EXECUTION COPY


Exhibit 10.2


 


CAPITAL COMMITMENT
AGREEMENT



entered into as of November 13, 2008



by and among



Dexia Holdings Inc.



Financial Security Assurance Holdings Ltd.


 


and


 


FSA
Asset Management LLC


 













 


CAPITAL  COMMITMENT
AGREEMENT


 


This CAPITAL  COMMITMENT AGREEMENT (the “Agreement”)
is entered into as of November 13, 2008 (the “Commitment Effective Date”),
by and among Dexia Holdings Inc. (“DHI”), Financial Security Assurance
Holdings Ltd. (“FSAH”) and FSA Asset Management LLC (“FSAM”).  DHI, FSAH and FSAM are sometimes referred to
herein individually as a “Party” and collectively as the “Parties.”


 


WHEREAS,  FSAH desires to receive additional capital
contributions from DHI for purposes of FSAH making additional equivalent
capital contributions to FSAM (the “FSAM Commitment”), and FSAM desires to
receive additional capital contributions from FSAH for the Intended Uses; and


 


WHEREAS, DHI is
willing to contribute capital to FSAH from time to time in cash, up to an
aggregate amount of US$500 million, in return for certain cash payments from
(and, if the Board of Directors of FSAH so elects, common stock of) FSAH, on
the terms and subject to the conditions set forth below.


 


NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the Parties agree as follows:


 


ARTICLE I
– DEFINITIONS


 


Section 1.1.            Defined Terms.  As used in this Agreement, the following
terms have the following meanings:


 


“Affiliate” means, in relation to any Person, any entity controlled,
directly or indirectly, by the Person, any entity that controls, directly or
indirectly, the Person or any entity directly or indirectly under common
control with the Person (where, for the avoidance of doubt, two entities shall
be considered under “common control” where they are each controlled, directly
or indirectly, by the same third entity). 
For this purpose, “control” of any entity or Person means ownership of a
majority of the voting power of the entity or Person.


 


“Agreement” has the meaning set forth in the preamble.


 


“Bankruptcy
Event” means with respect to any person that such person (a) is
dissolved (other than pursuant to a consolidation, amalgamation or merger); (b) makes
a general assignment, arrangement or composition with or for the benefit of its
creditors; (c) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation, and, in the case
of any such proceeding or petition instituted or presented against it, such
proceeding or petition (i) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for
its winding-up or liquidation or (ii) is not dismissed, discharged, stayed
or restrained in each case within thirty calendar days of the institution or
presentation thereof; (d) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a consolidation,
amalgamation or merger); (e) seeks or becomes subject to the appointment
of an administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar 


 


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official for it or
for all or substantially all its assets; (f) has a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or
restrained, in each case within thirty calendar days thereafter; or (g) causes
or is subject to any event with respect to it which, under the applicable laws
of any jurisdiction, has an analogous effect to any of the events specified in
clauses (a) to (f) (inclusive)..


 


“Business Day” means each day which is neither
a Saturday, a Sunday nor any other day on which banking institutions in New
York or Paris are authorized or obligated by law or required by executive order
to be closed.


 


“Capital Contribution” has the meaning set forth in Section 2.1.


 


“Collateral Posting Requirements” has the meaning set forth in
the Pledge and Intercreditor Agreement.


 


“Common Stock” means common stock issued by FSAH, par value $.01
per share.


 


“Contribution Certificate “ has the meaning set forth in Section 4.2.


 


“Contribution Date” means any date on which FSAH may receive a
Capital Contribution in accordance with Article IV.


 


“Contribution Payment” means a non-refundable payment equal to
50 basis points per annum of the DHI Commitment, determined and payable in
accordance with Section 3.1.


 


“Contribution Request Date” means any date on which FSAH
delivers a Contribution Certificate to DHI in accordance with Section 4.1.


 


“Deficiency Amount” means the Economic Loss reduced by tax
benefits arising from Economic Losses that reduce FSAH’s federal income tax
liability as included in the Financial Statements.  The “Current Period Deficiency Amount” means
the Deficiency Amount reduced by the Deficiency Amount as of the prior quarter
end.  To the extent that such tax
benefits realized in any quarter exceed the Current Period Deficiency Amount
(calculated without deducting such tax benefits realized in that quarter or
carried over from such prior quarters), then the amount of those tax benefits
realized but not used are carried over and used in the next subsequent quarter
with a Current Period Deficiency Amount until such realized tax benefits have
been so used.


 


“DHI Commitment” has the meaning set forth in Section 2.1.


 


“DHI” has the meaning set forth in the preamble.


 


“Economic Loss” means, in respect of assets owned by FSAM for
which an “other than temporary impairment” has been determined under FSAH’s
accounting principles and valuation rules consistently applied, the amount
by which the amortized purchase cost of these assets 


 


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exceeds the discounted present value of the future
expected cash flows of such assets in each case as disclosed in FSAH’s Form 10-K
or Form 10-Q in respect of the quarter ending immediately prior to the
relevant Contribution Date.


 


“End Date” means the earliest of (i) the
last maturity date of the assets included in FSAM’s investment portfolio (which
for this purpose shall include any assets held directly by a subsidiary of
FSAM) as of the Commitment Effective Date, (ii) the date of the completion
of the liquidation of all of such assets or (iii) any earlier termination
pursuant to Article VII of this Agreement.


 


“Exchange Act” means the Securities Exchange Act of 1934, as
amended.


 


“Financial Statements” means, from time to time, the most recent
audited annual financial statements delivered or made available to DHI pursuant
to Section 8.2(a) and, if any subsequent quarterly financial
statements have been delivered or made available to DHI, the most recent
unaudited quarterly financial statements described in Section 8.2(b).


 


“FSAH” has the meaning set forth in the preamble.


 


“FSAM” has the meaning set forth in the preamble.


 


 “FSA Inc.” means
Financial Security Assurance Inc., a New York stock insurance company.


 


“GAAP” means United States generally accepted accounting
principles, consistently applied as in effect from time to time.


 


“GIC Issuers” means collectively FSA Capital Management and FSA
Capital Markets, as such terms are defined in the Pledge and Intercreditor
Agreement.


 


“GMSLA” means the Global Master Securities Lending Agreement
(including the Annex thereto) dated as of November 13, 2008, between FSAM
and Dexia Bank Belgium S.A., as the same may from time to time be amended.


 


“Governmental Authority” means any national or federal
government, any state, regional, local or other political subdivision thereof
with jurisdiction and any Person with jurisdiction exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.


 


“Insolvency Event” means with respect to a person that such
person is or becomes financially insolvent or is unable generally to pay its
debts as they become due or fails or admits in writing in a judicial,
regulatory or administrative proceeding or filing its inability generally to
pay its debts as they become due.


 


“Intended Uses” has the meaning set forth in the Pledge and
Intercreditor Agreement.


 


“Parties” has the meaning set forth in the preamble.


 


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“Person” means any natural person, corporation, general or
limited partnership, limited liability company, joint venture, trust,
association, unincorporated entity of any kind, or Governmental Authority.


 


“Pledge and Intercreditor Agreement” means the Pledge and
Intercreditor Agreement dated as of November 13, 2008 among Dexia Crédit
Local, Dexia Bank Belgium S.A., FSAM and FSA Inc.


 


“Publication Date” means the date on which FSAH has delivered or
made available to DHI its latest audited annual financial statements pursuant
to Section 8.2(a) or its latest unaudited quarterly financial
statements pursuant to Section 8.2(b), as the case may be.


 


“Specified Liens” means the FSA Liens, the Subordinated Liens,
and any Permitted Lien as such terms are defined in the Pledge and
Intercreditor Agreement.


 


 “Subsidiary” shall mean,
as to any Person, any other Person with respect to which 50% or more of the
voting equity interests of such Person are owned by such first Person, whether
directly or indirectly through one or more intermediary Subsidiaries.


 


“Termination Event” has the meaning set forth in Article VII.


 


Section 1.2.            Interpretation.


 


(a)          As used herein, except
as otherwise indicated herein or as the context may otherwise require: (i) the
words “include,” “includes,” and “including” are deemed to be followed by “without
limitation” whether or not they are in fact followed by such words or words of
like import; (ii) the words “hereof,” “herein,” “hereunder,” and
comparable terms refer to the entirety of this Agreement, and not to any
particular article, section, or other subdivision hereof; (iii) any
pronoun will include the corresponding masculine, feminine, and neuter forms; (iv) the
singular includes the plural and vice versa; (v) references to any agreement
or other document are to such agreement or document as the same may be from
time to time amended, modified, supplemented, and restated; (viii) references
to any Person include such Person’s respective successors and permitted
assigns.


 


(b)          In this Agreement, any
reference to a Party’s “knowledge,” and comparable terms including “know,” “known,”
“aware,” or “awareness,” means such Party’s actual knowledge after due inquiry
of officers, directors and other key employees of such Party reasonably believed
to have knowledge of such matters.


 


(c)          Any reference herein to
a “day” or number of “days” (without the explicit qualification of “Business”)
will be deemed to refer to a calendar day or number of calendar days.  If any action or notice is to be taken or
given on or by a particular calendar day, and such calendar day is not a
Business Day, then such action or notice may be taken or given on or by the
next succeeding Business Day.


 


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ARTICLE II

CAPITAL COMMITMENT; AMOUNT


 


Section 2.1.            Commitment.
Until the End Date, DHI agrees to contribute capital to FSAH (each
contribution, a “Capital Contribution”) in such amounts as requested by
FSAH from time to time, up to an aggregate capital contribution of US$500 million
(“DHI Commitment”), subject to and in accordance with the terms and
conditions of this Agreement.


 


Section 2.2.            Amount.
Notwithstanding anything to the contrary in this Agreement, in no event shall
the aggregate Capital Contributions under this Agreement exceed the DHI
Commitment.  FSAH may not request that
amounts contributed under the DHI Commitment and redistributed to DHI in any
manner be contributed again.


 


ARTICLE III

CONTRIBUTION PAYMENTS; SHARES


 


Section 3.1.            Contribution
Payment. FSAH shall pay to DHI the Contribution Payment quarterly in
arrears on the portion of the DHI Commitment that has not been
contributed.  Such amount shall be based
on the average portion of the DHI Commitment that has not been contributed
during a calendar quarter and calculated on an actual/360-day basis, with such
amount to be paid on the first Business Day of the immediately following
calendar quarter.  The payment shall be
made by wire transfer in immediately available funds (in US dollars) to an
account specified by DHI in accordance with the notice provisions in Section 9.5
of this Agreement.


 


ARTICLE IV–
CONTRIBUTION RIGHT


 


Section 4.1.            Date. Subject
to and in accordance with the terms and conditions of this Agreement, FSAH may
request that DHI contribute capital available under the DHI Commitment on a
quarterly basis (x) for the first contribution on December 15, 2008,
and (y) thereafter on the 30th day (or, if such 30th day is not
a Business Day, the first Business Day immediately following such 30th
day) after the Publication Date (each such date being a “Contribution Date”
hereunder), in each case in an amount up to the then existing Current Period
Deficiency Amount (subject to the DHI Commitment limit) by making a
contribution request to DHI no later than 20 days prior to the relevant
Contribution Date (or, with respect to the first contribution on December 15,
2008, no later than 20 days prior to such first Contribution Date).  The Current Period Deficiency Amount may be
increased above the otherwise applicable amount by the mutual agreement of DHI
and FSAH.


 


Section 4.2.            Certificate.
FSAH may make a contribution request by delivering to DHI a certificate (a “Contribution
Certificate”) executed by the principal financial officer of FSAH, which
shall set forth:


 


(a)           The Current Period Deficiency Amount and
FSAH’s calculations used to determine the Current Period Deficiency Amount in
reasonable detail; and


 


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(b)           The wire and account details for the Capital
Contribution.


 


Section 4.3.            Payment.
Subject to the terms and conditions of this Agreement, on the Contribution
Date, (i) DHI will pay to FSAH, in immediately available funds (in US
dollars), a Capital Contribution in an amount equal to the Current Period
Deficiency Amount, and (ii) if the Board of Directors of FSAH has elected
to issue new shares of Common Stock in consideration for such Capital
Contribution, FSAH shall deliver to DHI certificates representing the shares of
Common Stock being issued in connection with such Capital Contribution.


 


ARTICLE V
– CONTRIBUTION CONDITIONS PRECEDENT


 


DHI’s commitment to make any Capital Contribution, shall be subject to
the following conditions:


 


(a)           FSAH shall have delivered to DHI the
Contribution Certificate no later than 20 days prior to the Contribution Date;


 


(b)           FSAH shall have delivered to DHI no later
than the Business Day immediately prior to the Contribution Date any additional
documents and calculations reasonably requested by DHI in connection with the
Capital Contribution;


 


(c)           FSAH shall have
delivered a certificate to DHI, executed by FSAH’s  chief executive officer and principal
financial officer, which states that (i) each of the representations and
warranties  of FSAH and FSAM set forth in
Article VI of this Agreement are true and accurate in all material
respects as of the Contribution Date, and (ii) each of FSAH and FSAM has
performed and complied with in all material respects each covenant required to
be performed or complied with by it pursuant to Article VII of this
Agreement prior to or on the Contribution Date;


 


(d)           Each of the
representations and warranties of FSAH and FSAM set forth in Article VI of
this Agreement shall be true and accurate in all material respects as of the
Contribution Date;


 


(e)           Each of FSAH and FSAM
has performed and complied with in all material respects each covenant required
to be performed or complied with by it pursuant to Article VII of this
Agreement prior to or on the Contribution Date;


 


(f)            No Termination Event
shall have occurred or be continuing; and


 


(g)           If the Board of
Directors of FSAH has elected to issue new shares of Common Stock in
consideration for such Capital Contribution, FSAH shall have tendered for
delivery to DHI certificates representing the shares of Common Stock being
issued in connection with such Capital Contribution.


 


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ARTICLE VI

REPRESENTATIONS AND WARRANTIES


 


FSAH and FSAM jointly represent and warrant to DHI as of the date
hereof and as of each Contribution Date (or, in the case of any representation
or warranty that speaks as of a specific date or time, as of such specific date
or time) as follows:


 


Section 6.1.            Organization.  FSAM is a limited liability company duly organized and validly
existing under the laws of the State of Delaware.  FSAH is a corporation duly organized and validly existing
under the laws of the State of New York. 
Each such entity has all requisite power and authority, corporate and
otherwise, to conduct its business as now conducted and to own its
properties.  Each such entity has full power and authority to enter
into this Agreement and to incur its obligations provided for
herein, all of which
have been duly authorized by all proper and necessary action,
corporate or otherwise, on the part of such entity.  This Agreement
has been duly executed and delivered by each such entity and constitutes the valid and
legally binding agreement
of such entity,
enforceable against such entity in accordance with its terms, except as
enforceability may be affected by bankruptcy, insolvency and other laws
relating to or affecting creditors’ rights generally and by general principles
of equity.


 


Section 6.2.            Authorization; No
Conflicts.  All consents and approvals
of, and all notices to and filings with, any governmental entities or
regulatory bodies required as a condition to the valid execution, delivery or
performance by FSAM and FSAH of this Agreement have been obtained or made.  Neither the execution and delivery of this
Agreement nor compliance with the terms and provisions hereof will
conflict with, result in a breach of or constitute a default under
(i) any of the
terms, conditions or provisions of the limited liability company
agreement of FSAM or the
articles or
incorporation or by-laws of FSAH, (ii) any law, regulation or order,
writ, judgment, injunction, decree, determination or award of any court or
governmental instrumentality or (iii) any agreement or instrument to which FSAH or FSAM is a party or by which it is
bound.


 


Section 6.3.            Financial
Statements. The Financial Statements heretofore furnished or made available
to DHI are complete and correct and fairly present the consolidated financial condition of FSAH and its consolidated
subsidiaries as at the
dates thereof and the results of operations for the periods covered
thereby (subject, in the
case of quarterly statements, to normal, year-end audit adjustments).  Such financial statements were
prepared in accordance with U.S. generally accepted accounting principles consistently applied.


 


Section 6.4.            Litigation.  As of the date of this Agreement, other than
as may have been disclosed in the Annual Report on Form 10-K for the year
ending December 31, 2007, or the Quarterly Reports on Form 10-Q for
the quarters ending March 31, 2008, or June 30, 2008, in each case as
filed by FSAH with the U.S. Securities and Exchange Commission, there is no
action, suit or proceeding pending against, or to FSAH’s and FSAM’s knowledge
threatened against or affecting, FSAH or FSAM before any court or arbitrator or
any governmental body, agency or official which, if adversely determined, would
have a material adverse effect (actual or prospective) on FSAH’s or FSAM’s
business, properties or financial position or which seeks to terminate or calls
into question the validity or enforceability of this Agreement.


 


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Section 6.5.                                   Nature
of Entity.  Each of FSAM and FSAH is
not (i) a “holding company,” or a “subsidiary company” of a “holding
company,” or of a “subsidiary company” of a “holding company,” within the
meaning of the Public Utility Holding Company Act of 1935, or (ii) required
to be registered as an “investment company” as defined in (or subject to
regulation under) the Investment Company Act of 1940.  Neither the making of requests for capital
contributions by FSAH or FSAM hereunder, or the application of the amounts
received as a result thereof by FSAH or FSAM, nor the consummation of other
transactions contemplated hereunder, will violate any provision of the Public
Utility Holding Company Act of 1935, the Investment Company Act of 1940 or any
rule, regulation or order of the SEC.


 


Section 6.6.                                   No
Termination Event.  No Termination
Event has occurred and is continuing.


 


ARTICLE VII- TERMINATION


 


The DHI Commitment shall automatically terminate and
DHI shall have no further obligation to make any Capital Contribution upon the
earliest of (each of the following being a “Termination Event”):


 


(a)                                  the DHI Commitment
has been contributed in full or, if earlier, upon payment or other satisfaction
of all liabilities of FSAM;


 


(b)                                 a Bankruptcy Event in
relation to any of FSAH, FSA Inc., FSAM, FSA Capital Markets Services LLC or
FSA Capital Management Services LLC;


 


(c)                                  any
Insolvency Event in relation to FSA Inc.; or


 


(d)                                 an
Event of Default occurring under either (x) the Revolving Credit Agreement
dated as of June 30, 2008 between Dexia Crédit Local and FSAM, as amended
or (y) the GMSLA.


 


ARTICLE
VIII

COVENANTS


 


FSAH and FSAM each covenants and agrees as follows:


 


Section 8.1.                                   Conduct
of Business.  It  will maintain its corporate (or,
with respect to FSAM, its limited liability company) existence in good standing, will comply in all material
respects with all applicable laws, rules, regulations and orders of any Governmental
Authority noncompliance with which would have a material adverse effect on its
financial condition or operations or on its ability to meet its obligations
hereunder, and will continue to engage in business of the same general type as
that engaged in by it on
the date hereof.  It will pay and discharge, at or
before maturity, all its obligations and liabilities, including, without
limitation, tax liabilities, where failure to satisfy such
obligations or liabilities in the aggregate would have a material adverse
effect on its financial condition, operations or ability to meet its
obligations hereunder.


 


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Section 8.2.                                   Financial
Statements.  FSAH will furnish to
DHI:


 


(a)                                  As soon as available
and in any event within 90 days after the end of each fiscal year of FSAH, a
consolidated balance sheet of FSAH and its consolidated subsidiaries as at the
close of such fiscal year and the related consolidated statements of income and
changes in financial position for such year, certified by independent public
accountants of recognized standing; and


 


(b)                                 As soon as available
and in any event within 45 days after the end of each of the first three
quarters of each fiscal year of FSAH, a consolidated balance sheet of FSAH and
its consolidated subsidiaries as at the close of such quarter and the related
consolidated statements of income and changes in financial position for such
quarter and for the portion of such fiscal year then ended, certified by FSAH’s
chief financial officer as having been prepared on a basis consistent with the
most recent audited consolidated financial statements of FSAH and its
consolidated subsidiaries, it being understood that the required certifications
on Form 10-Q and Form 10-K shall suffice for such purpose.


 


Section 8.3.                                   Use
of Proceeds.  FSAH shall use the
proceeds from the DHI Commitment solely to perform its obligations under the
FSAM Commitment and FSAM shall use any proceeds it receives (whether directly
or indirectly) from a contribution request by FSAH solely to purchase
securities eligible to be posted by the GIC Issuers as collateral for purposes
of meeting Collateral Posting Requirements and for any other Intended Uses.


 


Section 8.4.                                   Maintenance
of Properties.  It shall (a) maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary
wear and tear excepted, and (b) use the standard of care typical in the
industry in the operation and maintenance of its facilities, except where the
failure to do so could not reasonably be expected to have a material adverse
effect on it.


 


Section 8.5.                                   Maintenance
of Insurance.  It shall maintain with
financially sound and reputable insurance companies or with a captive insurance
company that is its Affiliate as to which DHI may request reasonable evidence
of financial responsibility, insurance with respect to its properties in such
amounts with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where it or any of its Subsidiaries operates.


 


ARTICLE IX

MISCELLANEOUS


 


Section 9.1.                                   Entire
Agreement.  This Agreement contains,
and is intended as, a complete statement of all of the terms of the agreements
among the Parties with respect to the matters provided for herein.


 


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Section 9.2.                                   Headings.  The article and section headings of this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.


 


Section 9.3.                                   Rules of
Construction.  The Parties agree that
they have been represented by counsel during the negotiation, preparation, and
execution of this Agreement and, therefore, waive the application of any law or
rule of construction providing that ambiguities in an agreement or other
document will be construed against the Party drafting such agreement or
document.


 


Section 9.4.                                   Public
Announcements.  Subject to FSAH’s
disclosure obligations imposed by law or regulation or the rules of any
stock exchange upon which its securities are listed, neither FSAH nor FSAM will
make any news release or public disclosure without first consulting with DHI
and receiving its consent (which shall not be unreasonably withheld or delayed)
and FSAH and FSAM shall coordinate with DHI with respect to any such news
release or public disclosure.


 


Section 9.5.                                   Notices.  All notices and other communications
hereunder must be in writing and must be delivered personally, faxed, sent by
internationally recognized delivery service or mailed by registered or
certified mail (return receipt requested) to the relevant Parties at the
following address (or to such other Person or address for a Party as specified
by such Party by like notice) and shall be effective when received:


 


(a)          If to FSAH:


 


Financial Security
Assurance Holdings Ltd.


31 West 52nd
Street


New York, New York  10019


Attention:     Managing
Director – Surveillance


Facsimile:    (212) 339-3518


 


with a copy to:


 


Financial Security
Assurance Holdings Ltd.


31 West 52nd
Street


New York, New York  10019


Attention:     General
Counsel


Facsimile:     (212) 857-0541


 


(b)         If to FSAM:


 


FSA Asset Management LLC


31 West 52nd
Street


New York, New York  10019


Attention:     FP
– Operations


Facsimile:    (212) 893-2727


 


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with a copy to:


 


FSA Asset Management LLC


31 West 52nd
Street


New York, New York  10019


Attention:     General
Counsel


Facsimile:     (212) 857-0541


 


(c)          If to DHI:


 


Dexia Holdings Inc.


c/o Financial Security
Assurance Holdings Ltd.


31 West 52nd
Street


New York, New York  10019


Attention:     General
Counsel


Facsimile:     (212) 857-0541


 


with a copy to:


 


Dexia Crédit Local


1, Passerelle des Reflets


Tour Dexia La Défense 2


92913 La Défense Cedex


France


Attention:     Back Office Operations


Facsimile:     33 1 58 58
7290


 


Section 9.6.                                   Severability.  If at any time any covenant or provision
contained herein is deemed in a final ruling of a court or other body of
competent jurisdiction to be invalid or unenforceable, such covenant or
provision will be considered divisible and such covenant or provision will be
deemed immediately amended and reformed to include only such portion of such
covenant or provision as such court or other body has held to be valid and
enforceable; and the Parties agree that such covenant or provision, as so
amended and reformed, will be valid and binding as though the invalid or
unenforceable portion had not been included herein.


 


Section 9.7.                                   Amendment;
Waiver.  No provision of this
Agreement may be amended or modified except by an instrument or instruments in
writing signed by the Parties and designated as an amendment or
modification.  No waiver by any Party of
any provision of this Agreement will be valid unless in writing and signed by
the Party making such waiver and designated as a waiver.  No failure or delay by any Party in
exercising any right, power, or remedy hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof or the exercise of any
other right, power, or remedy preclude any further exercise thereof or the
exercise of any other right, power, or remedy. 
No waiver of any provision hereof will be construed as a waiver of any
other provision.


 


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Section 9.8.                                   Assignment;
Binding Effect.  No Party may assign
any of its rights or delegate any of its obligations under this Agreement
without (a) the prior written consent of the other Parties, and (b) the
complete written assumption by the assignee of all of the obligations of the
assignor under this Agreement.  All of
the terms and provisions of this Agreement will be binding on, and will inure
to the benefit of, the respective successors and permitted assigns of the
Parties.


 


Section 9.9.                                   Third-Party
Beneficiaries. The representations, warranties, covenants, and agreements
contained in this Agreement are for the sole benefit of the Parties and their
respective successors and permitted assigns, and they will not be construed as
conferring and are not intended to confer any rights, remedies, obligations, or
liabilities on any other Person, unless such Person is expressly stated herein
to be entitled to any such right, remedy, obligation, or liability. This
Agreement shall not be enforceable by any creditor of FSAH, any creditor of
FSAM or any other Person or entity, other than DHI, FSAH, FSAM and their
successors.


 


Section 9.10.                             Governing
Law.  This Agreement will be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
The Parties hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the state and federal courts located in the Borough
of Manhattan, City and State of New York for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions contemplated
hereby.


 


Section 9.11.                             Waiver
of Jury Trial.  Each of the Parties
hereto irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby.


 


Section 9.12.                             Counterparts.  This Agreement may be executed by the Parties
in separate counterparts, each of which when so executed and delivered will be
an original, but all such counterparts will together constitute one and the
same instrument.


 


Section 9.13                                Covenant
with Respect to Dexia Crédit Local. 
DHI covenants to FSAH that it will borrow from Dexia Crédit Local, or
otherwise request that Dexia Crédit Local contribute or convey to DHI, any
funds necessary for DHI to make all Capital Contributions required to be made
by DHI under this Agreement, such that Dexia Crédit Local loans, contributes or
conveys to DHI the amount of each such Capital Contribution on or immediately
prior to the related Contribution Date.


 


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left blank]


 


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IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written above.


 


	
   

  	
  DEXIA
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/  Alain
  Delouis

  
	
   

  	
   

  	
   

  	
  Name:   Alain
  Delouis

  
	
   

  	
   

  	
   

  	
  Title:    
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  FINANCIAL SECURITY ASSURANCE HOLDINGS LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/  Robert
  P. Cochran

  
	
   

  	
   

  	
   

  	
  Name:   Robert
  P. Cochran

  
	
   

  	
   

  	
   

  	
  Title:    
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  FSA ASSET MANAGEMENT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/  Guy
  Cools

  
	
   

  	
   

  	
   

  	
  Name:   Guy
  Cools

  
	
   

  	
   

  	
   

  	
  Title:    Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ 
  Bruce Stern

  
	
   

  	
   

  	
   

  	
  Name:   Bruce
  Stern

  
	
   

  	
   

  	
   

  	
  Title:    Managing
  Director

  



 


By signing this Agreement
below, Dexia Crédit Local agrees to, and covenants to FSAH that it shall, loan,
contribute or otherwise convey to DHI amounts equal to all Capital
Contributions required to be made by DHI under this Agreement, with Dexia
Crédit Local to loan, contribute or otherwise convey to DHI the amount of each
such Capital Contribution on or immediately prior to the related Contribution
Date.


 


	
   

  	
   

  	
   

  	
  DEXIA
  CREDIT LOCAL

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/  Jean Le Naour

  	
   

  	
   

  	
  By

  	
  /s/  Didier Casas

  
	
  Name:     
  Jean Le Naour

  	
   

  	
  Name:   Didier
  Casas

  
	
  Title:      
   Chief Financial Officer

  	
   

  	
  Title:    General
  Secretary

  
						



 


Acting together pursuant
to a special power of attorney granted by the Board of Directors of Dexia
Crédit Local on November 13th, 2008.


 


13