EXHIBIT 10.19


 


AMENDED AND RESTATED PLEDGE AND INTERCREDITOR
AGREEMENT


 


THIS AMENDED AND RESTATED PLEDGE AND INTERCREDITOR AGREEMENT (as
further amended, supplemented, or otherwise modified from time to time, this “Agreement”),
dated as of February 20, 2009, is entered into among Dexia Crédit Local (“DCL”),
Dexia Bank Belgium S.A. (“DBB”), Financial Security Assurance Inc. (“FSA”),
FSA Asset Management LLC (“FSAM”), FSA Capital Markets Services LLC (“FSA
Capital Markets”) and FSA Capital Management Services LLC (“FSA Capital
Management”).


 


W I T N E S S E T H:


 


WHEREAS, pursuant to the Amended and Restated Insurance and Indemnity
Agreement dated as of October 21, 2008 between FSA and FSAM (the “FSAM
Insurance Agreement”), a copy of which is attached hereto as Annex A, FSAM
has granted FSA a security interest in the collateral identified therein (as
defined in the FSAM Insurance Agreement the “Collateral”) to secure the
obligations of FSAM under the FSAM Insurance Agreement, including the
reimbursement of amounts paid by FSA under the Derivative Policies (as defined
in the FSAM Insurance Agreement);


 


WHEREAS, pursuant to a Pledge and Intercreditor Agreement dated November 13,
2008, FSAM granted a security interest over the Collateral to DBB and DCL
(together, the “Lenders”) in connection with their agreement to provide
financing under the terms of a Revolving Credit Agreement dated June 30,
2008, as amended (the “First Credit Agreement”), which security interest
is junior in priority to the security interest granted to FSA;


 


WHEREAS, in connection with the execution of the Release and
Termination Agreement dated February 20, 2009, FSA Capital Markets and FSA
Capital Management (the “GIC Issuers”) wish to obtain and FSAM wishes to
grant a security interest over the Collateral that is pari passu with the security interest
granted to FSA and senior to the security interest granted to the Lenders in
connection with the First Credit Agreement and FSA, DBB and DCL wish to consent
to the foregoing grant of security;


 


WHEREAS, pursuant to a Second Revolving Credit Agreement dated February 20,
2009 between FSAM and DCL (the “Second Credit Agreement”, and each of
the First Credit Agreement and the Second Credit Agreement, a “Credit
Agreement”), DCL has agreed to provide additional financing to FSAM which
is to be secured by a lien that is junior to the lien provided to the Lenders
in connection with the First Credit Agreement and FSAM, FSA, the GIC Issuers,
DBB and DCL wish to consent to the foregoing grant of security;


 


WHEREAS, the parties wish to set forth the priorities of their
respective liens in the Collateral and the circumstances that will determine
such relative priorities in an amended and restated pledge and intercreditor
agreement; and


 


WHEREAS, DCL and DBB have agreed that DCL will act as Security Agent
under this Agreement on behalf of itself and DBB with respect to the First
Credit Agreement and on behalf of itself with respect to the Second Credit
Agreement;


 

















 


NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, DBB, DCL, FSA, the GIC Issuers and FSAM each agree as
follows:


 


ARTICLE
I

DEFINITIONS


 


SECTION 1.1.                Certain Terms.  Capitalized terms used but not defined herein
have the meanings set forth in each Credit Agreement or, if not defined
therein, in the FSAM Insurance Agreement. 
The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the singular and plural
forms thereof):


 


“Account Bank Lien” means any Lien for the
benefit of the Account
Bank, as securities intermediary (as defined in the UCC), as required or
permitted under the UCC or under the Securities Account Control Agreement.


 


“Collateral
Posting Lien” means, in the event that the Master Agreements are
recharacterized as secured financings, the Lien for the benefit of FSA Capital
Management and/or FSA Capital Markets pursuant to a pledge or advance of
Collateral by FSAM for the purpose of enabling FSA Capital Management and FSA
Capital Markets to satisfy their respective Collateral Posting Requirements.


 


“Collateral Posting Requirements”
means any requirement for FSA Capital Management or FSA Capital Markets to post
specified collateral either (i) pursuant to the terms of the relevant GIC
irrespective of the rating of the financial strength of FSA or (ii) during
such time as the financial strength of FSA is not rated at least the required
rating specified under the relevant GIC. 
For the avoidance of doubt, a “requirement” to post collateral includes
a provision in a GIC that upon
a relevant downgrade of FSA, the GIC Issuers have the option to post collateral
(or effect one or more other cures), failing which the GIC would become subject
to termination (either automatically or at the election of the relevant GIC
holder).


 


“Excluded Collateral” means any (i) Collateral
specifically granted or sold by FSAM, in each case subject to the consent of
FSA and the GIC Issuers (and the GIC Issuers shall be deemed to have consented
to the same extent as FSA under Section 6.06 of the FSAM Insurance
Agreement), to secure its payment obligations under (A) any Master
Agreement, Related Derivative Agreement or other similar financing arrangements
or posted by FSAM as collateral to satisfy margin requirements with one or more
brokers or dealers, (B) any repurchase agreement between FSAM and DCL,
DBB, FSA or FSA Insurance Company, (C) any securities lending agreement
between FSAM and DCL, DBB, FSA or FSA Insurance Company, or (D) any
repurchase agreement between FSAM and any third party, where (I) the right
to act as purchaser under such repurchase agreement has first been offered to
DCL or DBB in the same amount and on substantially the same terms as those
subsequently agreed by FSAM with the relevant purchaser, pursuant to the Offer
Procedures, and (II) DCL or DBB, as applicable, has not accepted such
offer to enter into such repurchase agreement with FSAM on such terms in
accordance with the Offer Procedures and (ii) any other Collateral
consented to by FSA, the GIC Issuers and the Lenders (such consents not to be unreasonably withheld).  For the avoidance of doubt, Excluded
Collateral does not include, and the security interest of (i) the Lenders,
with respect to the First Credit Agreement (ii) DCL, with respect to the
Second Credit Agreement, and (iii) the GIC Issuers, with respect to the
Master Notes and the Master Agreements, shall extend to, all rights of FSAM to
repurchase or to receive the return of Collateral (or equivalent 


 


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securities or payments) under the Master Agreements or any Related
Derivative Agreement or other similar financing arrangements pursuant to which
Collateral may become Excluded Collateral.


 


“FSA Capital
Management Insurance Agreement” means the Insurance and Indemnity Agreement
dated as of October 29, 2001 between FSA and FSA Capital Management.


 


“FSA Capital
Markets Insurance Agreement” means the Insurance and Indemnity Agreement
dated as of October 29, 2001 between FSA and FSA Capital Markets.


 


“FSA Liens”
means the security interest(s) in favor of FSA in relation to any or all
of the Collateral under the FSAM Insurance Agreement.


 


“GIC Issuer
Obligations” means all payment obligations of FSAM under the Master Notes
and the Master Agreements.


 


“Grant”
means, as to any asset or property, to mortgage, pledge, assign and grant a
security interest in such asset or property. A Grant of the Collateral or any
assigned document, instrument or agreement shall include all rights, powers and
options (but none of the obligations, except to the extent required by law), of
the Granting party thereunder or with respect thereto, including the immediate
and continuing right to claim, collect, receive and give receipt for all moneys
payable thereunder and all income, proceeds, products, rents and profits
thereof, to give and receive notices and other communications, to make waivers
or other agreements, to exercise all rights and options, to bring proceedings
in the name of the Granting party or otherwise, and generally to do and receive
anything which the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.


 


“Intended Uses”
means FSAM’s application of funds to (i) make payments in respect of the
Master Notes or Master Agreements, (ii) make payments in respect of
Related Derivatives and any other hedging transactions (such as futures
transactions) entered into by FSAM to hedge exposures relating to the Assets,
the Master Notes and the Master Agreements, (iii) make advances to FSA
Capital Management and FSA Capital Markets for the purpose of enabling FSA
Capital Management and FSA Capital Markets to satisfy their respective
Collateral Posting Requirements under the guaranteed investment contracts (“GICs”)
issued by FSA Capital Management and FSA Capital Markets, (iv) make
reimbursement payments to FSA in respect of any payments by FSA under the
Derivative Policies, (v) make payments in respect of financing obtained
under the Master Agreements for the purpose of meeting Collateral Posting
Requirements or otherwise for the payments described in (i) through (iv), (vi) make
payment of other sums payable by the “Issuer” under the foregoing documents and
any of the other “Issuer Documents” as defined in the FSAM Insurance Agreement,
in connection with the transactions contemplated thereby, (vii) make
payments under agreements or transactions ancillary or incidental to the items
described in (i) through (vi), (viii) make payments of fees, charges,
costs and expenses in respect of banking, custodial and other services to FSAM
incurred in connection with the transactions contemplated by the agreements in (i) through
(vii) and (ix) make transfers of securities under FSAM’s other
repurchase agreements or securities lending agreements.


 


“Lender Agreements” means each
Credit Agreement, the Note(s) issued thereunder and this Agreement.


 


“Lender Obligations” means all
payment obligations of FSAM under the Lender Agreements.


 


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“Lenders’ Liens” has the meaning
provided in Section 2.1(c).


 


“Lenders” means DCL and DBB.


 


“Lien” means, with respect
to any property, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such property.


 


 “Master Agreements” means the Master
Repurchase Agreement I dated as of October 29, 2001 between FSAM and FSA
Capital Management and the Master Repurchase Agreement II dated as of October 29,
2001 between FSAM and FSA Capital Markets.


 


“Master Notes” means the
Master Note, Series A dated October 29, 2001 issued by FSAM to FSA
Capital Management and the Master Note, Series B dated October 29,
2001 issued by FSAM to FSA Capital Markets.


 


“Offer Procedures” means the
following procedures for giving DBB or DCL a right to match the terms of any
additional repurchase agreement financing obtained by FSAM:  (1) if FSAM intends to solicit
one or more quotations for repurchase agreement financing, FSAM shall give
notice (which may be oral notice) of such intention to DBB or DCL, with FSAM giving as
much advance notice of its solicitation of quotations as is reasonably
practicable and in any event contacting DBB or DCL substantially at the same
time as FSAM contacts other potential providers of financing, with such
notice to (x) be given at such notice details as DBB and DCL, as
applicable, shall specify from time to time to FSAM for this purpose and (y) describe
the expected purchased securities, purchase date, repurchase date, purchase
price, and approximate time at which FSAM intends to obtain quotations; (2) at
the time at which one or more
quotations are obtained, FSAM shall contact DBB or DCL by telephone, at the
contact number(s) of such individuals at DBB or DCL, as applicable, as DBB
or DCL shall specify from time to time to FSAM for such purpose (it being
understood that FSAM shall not be responsible if the relevant persons are
unavailable at such number(s)),
of the terms (including the final purchased securities, purchase date,
repurchase date, purchase price, pricing rate, and margin percentage) of the
proposed repurchase agreement for which FSAM has obtained one or more quotations from
a third party; and (3) DBB or DCL, as applicable, shall have 15 minutes
from receipt of such notice of such terms in which to accept an offer (which
may be by telephone) to act as purchaser under such a repurchase agreement with
FSAM.  The Offer Procedures will be
satisfied in relation to DBB only if all relevant notices given to DBB are
given during business hours in Brussels. 
In the case of notices given to DCL, the Offer Procedures may be
satisfied by notices given to personnel of DCL’s New York Branch during
business hours in New York; provided that if DCL ceases to conduct U.S. dollar
repurchase agreement financing activity in New York, FSAM and DCL shall
cooperate in good faith to specify an alternative set of procedures for giving
DCL a commercially reasonable notice and opportunity to exercise its option to
provide repurchase agreement financing arranged by FSAM from time to time.  For the avoidance of doubt, the Offer
Procedures are required to be satisfied with respect to any proposed repurchase
agreement only in relation to either DBB or DCL, not both DBB and DCL.


 


“Permitted Lien” means (i) any
Collateral Posting Lien and (ii) any Account Bank Lien.


 


“Person” Any individual,
corporation, partnership, joint venture, association, company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.


 


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“Security Agent” means the
DCL acting as agent for itself and, as applicable, DBB for purposes of the
Lender Agreements.


 


“Senior Secured Obligations”
means all payment obligations of FSAM under the FSAM Insurance Agreement, the
Master Notes and the Master Agreements.


 


“Subordinated Liens” means
the Lenders’ Liens.


 


“UCC” or “Uniform
Commercial Code” means the Uniform Commercial Code as in effect from time
to time in the State of New York and, with respect to security interests
perfected through the possession of the Security Agent, the Uniform Commercial
Code as in effect from time to time in the State of New York.  Unless otherwise stated, all references
herein to statutory sections or articles are to sections and articles of the
UCC.


 


ARTICLE II

SECURITY INTEREST PROVISIONS


 


SECTION 2.1.                GIC Issuers’ and Lenders’ Liens


 


(a)           In order to secure, as provided
herein, the performance and observance of each term, covenant, agreement and
condition of FSAM contained in the Master Notes and the Master Agreements
(whether in respect of existing or future obligations thereunder), FSAM hereby
Grants a security interest in and collaterally assigns, transfers, sets over,
pledges and conveys to each GIC Issuer, all the right, title, interest and
estate of FSAM, whether now or hereafter acquired, in, to and under the
Collateral (as defined in the FSAM Insurance Agreement) that secures the FSA
Liens and such security interest shall be pari
passu with the FSA Liens (the “GIC Issuers’ Lien”).


 


(b)           In order to secure, as provided
herein, the performance and observance of each term, covenant, agreement and
condition of FSAM contained in the First Credit Agreement or the Notes issued
thereunder (whether in respect of existing or future advances under the First
Credit Agreement), FSAM hereby Grants a security interest in and collaterally
assigns, transfers, sets over, pledges and conveys to the Security Agent, on
behalf of and for the benefit of each Lender, all the right, title, interest
and estate of FSAM, whether now or hereafter acquired, in, to and under the
Collateral as defined in the FSAM Insurance Agreement; provided, however, that
the Collateral shall not include any Excluded Collateral; and provided,
further, that such security interest shall be subordinated to the security
interest granted pursuant to Section 2.1(a) (the “First
Credit Agreement Lien”).


 


(c)           In order to secure, as provided
herein, the performance and observance of each term, covenant, agreement and condition
of FSAM contained in the Second Credit Agreement or the Notes issued thereunder
(whether in respect of existing or future advances under the Second Credit
Agreement), FSAM hereby Grants a security interest in and collaterally assigns,
transfers, sets over, pledges and conveys to the Security Agent, on behalf of
and for the benefit of DCL, all the right, title, interest and estate of FSAM,
whether now or hereafter acquired, in, to and under the Collateral as defined
in the FSAM Insurance Agreement; provided, however, that the Collateral shall
not include any Excluded Collateral; and provided, further, that such security
interest shall be subordinated to the security interests granted pursuant to Section 2.1(a) 


 


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and Section 2.1(b) (the
“Second Credit Agreement Lien”, and, together with the First Credit
Agreement Lien, the “Lenders’ Liens”).


 


SECTION 2.2.                Notices.


 


In the event that
DCL, in the case of either Credit Agreement, or DBB, in the case of the First
Credit Agreement, shall give notice of an Event of Default under such Credit
Agreement or notify FSAM of the termination of the commitment of the Lenders
and acceleration of the amounts owed under the relevant Credit Agreement
pursuant to Section 5.01(b) of such Credit Agreement, the Security
Agent shall promptly give a copy of such notice to FSA.  In the event that a GIC Issuer shall give
notice of an Event of Default under the Master Notes or Master Agreements, such
GIC Issuer shall promptly give a copy of such notice to FSA.


 


SECTION 2.3                 Timing and Manner of Enforcement.


 


Notwithstanding the Lenders’ Liens, neither FSA nor the GIC
Issuers shall have any duty to the Security Agent, (i) on behalf of the
Lenders with respect to the First Credit Agreement or (ii) on behalf of
DCL with respect to the Second Credit Agreement, as holders of Subordinated
Liens as to the timing or manner of FSA’s exercise of its remedies under the
FSAM Insurance Agreement or the GIC Issuers’ exercise of their remedies under the
Master Notes, the Master Agreements or this Agreement, which shall in each case
be in the discretion of FSA or the GIC Issuers, as applicable, and pursuant to
the terms of the FSAM Insurance Agreement, the Master Notes, the Master
Agreements and this Agreement, as the case may be, and the failure by FSA or
the GIC Issuers to take any action shall not be deemed a waiver by FSA or the
GIC Issuers of any rights thereunder or hereunder.


 


Furthermore,
neither FSA nor the GIC Issuers shall be liable to the Security Agent, (i) on
behalf of the Lenders with respect to the First Credit Agreement or (ii) on
behalf of DCL with respect to the Second Credit Agreement, as holders of
Subordinated Liens with respect to any action taken or omitted to be taken by
FSA or the GIC Issuers with respect to the Collateral or any property
distributable on or by reason thereof, other than a failure to deliver any
remaining Collateral after all of the obligations of FSAM under the FSAM
Insurance Agreement, the Master Notes and the Master Agreements, have been
satisfied in full and the Liens of FSA and the GIC Issuers have been discharged
(the “Senior Lien Release Date”).


 


The Security
Agent, (i) on behalf of the Lenders with respect to the First Credit
Agreement and (ii) on behalf of DCL with respect to the Second Credit
Agreement, shall have no right to take action to enforce the Subordinated Liens
or exercise any creditor’s remedies in respect thereof, notwithstanding
occurrence of an Event of Default under either Credit Agreement, unless the
Senior Lien Release Date has occurred or FSA and the GIC Issuers have each
given their written consent with respect thereto.


 


The parties
acknowledge that the GIC Issuers have, pursuant to the FSA Capital Management
Insurance Agreement and the FSA Capital Markets Insurance Agreement,
collaterally assigned their rights hereunder to FSA to secure their obligations
to FSA thereunder and that FSA may exercise all rights of the GIC Issuers
hereunder and in relation to the GIC Issuers’ Lien.


 


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SECTION 2.4                 Amendments.


 


With respect to
the First Credit Agreement, the Lenders agree with FSA and the GIC Issuers that
the Lenders shall not enter into any amendment, modification or supplement to
the First Credit Agreement or the Letter Agreement dated August 5, 2008
between DCL, FSA and FSAM without the prior written consent of FSA and the GIC
Issuers, which consent shall not be unreasonably withheld or delayed.  With respect to the Second Credit Agreement,
DCL agrees with FSA and the GIC Issuers that DCL shall not enter into any
amendment, modification or supplement to the Second Credit Agreement or the
Letter Agreement dated February 20, 2009 between DCL and FSAM without the
prior written consent of FSA and the GIC Issuers, which consent shall not be
unreasonably withheld or delayed.   FSA
and the GIC Issuers each agree with the Lenders that they shall not enter into
any amendment, modification or supplement to the FSAM Insurance Agreement, the
FSA Capital Markets Insurance Agreement, the FSA Capital Management Insurance
Agreement, the Master Notes or the Master Agreements without the prior written
consent of the Lenders, which consent shall not be unreasonably withheld or
delayed.


 


The parties agree
that the FSAM Insurance Agreement, the FSA Capital Markets Insurance Agreement,
the FSA Capital Management Insurance Agreement, the Master Notes and the Master
Agreements shall be amended as and to the extent deemed necessary or advisable
to reflect the terms of this Agreement and the cancellation of the FSA policies
under the Release and Termination Agreement dated February 20, 2009 among
FSA, FSAM, FSA Capital Markets and FSA Capital Management.


 


ARTICLE III

REPRESENTATIONS AND WARRANTIES


 


Each of the Lenders, the GIC
Issuers, FSA and FSAM represents and warrants as to itself as of the date
hereof that:


 


SECTION 3.1.                Due Organization and Qualification. Such party is duly organized and
validly existing under the jurisdiction of its organization, and is duly
qualified to do business, is in good standing and has obtained all necessary
licenses, permits, charters, registrations and approvals necessary for the
performance of its obligations under this Agreement.


 


SECTION 3.2.                Due Authorization. 
The execution, delivery and performance of this Agreement have been duly
authorized by such party and do not require any additional approvals or
consents or other action by or any notice to or filing with any Person,
including, without limitation, any governmental entity.


 


SECTION 3.3.                Noncontravention. 
Neither the execution and delivery of this Agreement by such party, the
consummation of the transactions contemplated thereby nor the satisfaction of
the terms and conditions of this Agreement,


 


(a)           conflicts with or results in any breach or violation of any
provision of such party’s organization or constitutional documents or any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award currently in effect having applicability to such party or any of its
properties, including regulations issued by an administrative agency or other
governmental authority having supervisory powers over such party; or


 


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(b)           constitutes a default by such party under or a breach of any
provision of any loan agreement, mortgage, indenture or other agreement or
instrument to which such party is a party or by which it or any of its
properties is or may be bound or affected.


 


SECTION 3.4.                Valid and Binding Obligations. 
This Agreement, when executed and delivered by such party, will
constitute the legal, valid and binding obligation of such party, enforceable
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally.


 


ARTICLE IV


SECURITY INTEREST PROVISIONS


 


SECTION 4.1.                Financing Statement. 
FSAM shall do all such acts, and shall execute and deliver to the GIC
Issuers and the Security Agent all such financing statements, certificates,
instruments and other documents and shall do and perform or cause to be done
all matters and such other things necessary or expedient to be done as the GIC
Issuers and the Security Agent may reasonably request from time to time in
order to give full effect to this Agreement and for the purpose of effectively
perfecting, maintaining, preserving and enforcing the GIC Issuers’ and the
Security Agent’s security interests in the Collateral and the benefits intended
to be granted to the GIC Issuers and the Security Agent hereunder.  To the extent permitted by applicable law,
FSAM hereby authorizes the GIC Issuers and the Security Agent to file, in the
name of FSAM or otherwise, Uniform Commercial Code financing statements,
including continuation statements, which the GIC Issuers or the Security Agent
in its sole discretion may deem necessary or appropriate.


 


SECTION 4.2.                Account Control Agreement.


 


(a)           The Bank of New York
Mellon (f/k/a “The Bank of New York”) (the “Account Bank”) has
established an account in the name “FSA Asset Management LLC” (such account and
any successor account, the “Securities Account”).  The Account Bank, FSAM and FSA are parties to
a securities account control agreement dated as of July 31, 2003 (the “Existing
Control Agreement”) that among other things evidences FSA’s “control”
(within the meaning of Section 8-106(d)(2) of the UCC) with respect
to the “security entitlements” (within the meaning of the UCC) in the
Securities Account.


 


(b)           FSA hereby acknowledges
that, to the extent that it holds, or a third party holds on its behalf,
physical possession of or control or as bailee over the Securities Account, the
security entitlements therein or any other Collateral, such possession, control
or bailment is also for the benefit of the GIC Issuers, the Security Agent, and
the Lenders solely to the extent required to perfect their security interests
in the Securities Account, the security entitlements therein and such other
Collateral.  Nothing in the preceding sentence
shall be construed to impose any duty on FSA (or any third party acting on its
behalf) with respect to the Securities Account, security entitlements and other
Collateral.  The provisions of this
Agreement are intended solely to govern the respective priorities as between
the FSA Liens, the GIC Issuers’ Lien, the First Credit Agreement Lien and the Second Credit Agreement
Lien and shall not impose on FSA any obligations in respect of the
disposition of any assets in the Securities Account, any security entitlements
therein or any other Collateral.


 


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(c)           FSAM,
FSA, the GIC Issuers and the Security Agent, on behalf of the Lenders with
respect to the First Credit Agreement and on behalf of DCL with respect to the
Second Credit Agreement, each agree to use their commercially reasonable
efforts, as soon as practicable after the date of this Agreement, either to (i) enter
into a custodial and securities account control arrangement with the Account
Bank or any successor thereto as FSAM’s regular custodian, or (ii) amend
and restate the Existing Control Agreement with the Account Bank to reflect the
agreements among such parties set forth herein and the respective priorities as
between the FSA Liens, the GIC Issuers’ Lien, the First Credit Agreement Lien
and the Second Credit Agreement Lien. 
The Existing Control Agreement prior to any amendment thereto, any such
new custodial and securities account control arrangement, or any such amendment
and restatement of the Existing Control Agreement shall hereafter be referred
to as the “Securities Account Control Agreement”.  The Securities Account Control Agreement
shall include, without limitation, a covenant that in the event that the Senior
Lien Release Date has occurred but any of the Lender Obligations remain
outstanding, that FSA shall assign “control” (within the meaning of Section 8-106(d)(2) of
the UCC) over the Securities Account to the Security Agent, on behalf of the
Lenders.


 


(d)           For the avoidance of doubt, unless the Senior Lien Release Date
has occurred and an Event of Default under either Credit Agreement has occurred
and is continuing, the Security Agent agrees that FSAM shall be entitled to
instruct the sale or transfer from the Securities Account of such Collateral as
FSAM may determine necessary for any of the Intended Uses.


 


SECTION 4.3.                Security Interest Representations
and Warranties.  FSAM represents, warrants and agrees that:


 


(a)           This Agreement creates a valid and continuing security interest
(as defined in the UCC) in the Collateral in favor of (i) with respect to
the Master Notes and the Master Agreements, the GIC Issuers, which security
interest is prior to all other Liens except for any Collateral Posting Lien and
any Account Bank Lien, to which it is subordinate, and the FSA Liens, with
which it is pari passu, (ii) with
respect to the First Credit Agreement, the Security Agent, on behalf of the
Lenders, which security interest is prior to all other Liens (except for any
Collateral Posting Lien, any Account Bank Lien, the FSA Liens and the GIC
Issuers’ Lien) and (iii) with respect to the Second Credit Agreement, the
Security Agent, on behalf of DCL, which security interest is prior to all other
Liens (except for any Collateral Posting Lien, any Account Bank Lien, the FSA
Liens, the GIC Issuers’ Lien and the First Credit Agreement Lien), and is enforceable
as such as against creditors of and purchasers from FSAM.  The security interest of the GIC Issuers in
the Collateral shall, until payment in full of the obligations and indebtedness
secured thereby hereunder and termination of this Agreement with respect
thereto, be a perfected security interest in the Collateral, senior to all
other security interests in the Collateral, except for any Collateral Posting
Lien and any Account Bank Lien, to which it is subordinate, and the FSA Liens,
with which it is pari passu.  The security interest of the Security Agent, (i) on
behalf of the Lenders with respect to the First Credit Agreement and (ii) on
behalf of DCL, with respect to the Second Credit Agreement, in the Collateral
shall, until payment in full of the obligations and indebtedness secured
thereby hereunder and termination of this Agreement with respect thereto, be a
perfected 


 


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security interest in the
Collateral, senior to all other security interests in the Collateral, except
for (i) in the case of the First Credit Agreement, any Collateral Posting
Lien, Account Bank Lien, the FSA Liens and the GIC Issuers’ Lien, and (ii) in
the case of Second Credit Agreement, any Collateral Posting Lien, Account Bank
Lien, the FSA Liens, the GIC Issuers’ Lien and the First Credit Agreement Lien.


 


(b)           FSAM owns the Collateral free and clear of any lien, claim or
encumbrance of any Person other than the FSA Liens, the GIC Issuers’ Lien, the
Lenders’ Liens or any Permitted Lien.


 


(c)           FSAM has caused or will have caused, as soon as reasonably
practicable but in any event within 10 days of this Agreement, the filing of
all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in the Collateral granted hereunder to the GIC Issuers and to the
Security Agent (on behalf of the Lenders in the case of the First Credit
Agreement, or DCL in the case of the Second Credit Agreement).  In each case, FSAM shall provide a copy of
each such financing statement, with filing numbers noted thereon, to the GIC
Issuers and the Security Agent, as applicable.


 


(d)           Other than the FSA Liens, the GIC Issuers’ Lien, any Permitted
Lien and the Lenders’ Liens, FSAM has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Collateral.  FSAM has not authorized the filing of and is
not aware of any financing statements against FSAM that include a description of
the Collateral, including those financing statements that have been terminated,
other than any financing statement relating to the FSA Liens, the GIC Issuers’
Lien, any Permitted Lien and the Lenders’ Liens.


 


(e)           None of the “instruments” (as defined in the UCC) that constitute
or evidence the Collateral has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than to FSA,
the GIC Issuers, the Security Agent (on behalf of the Lenders in the case of
the First Credit Agreement, or DCL in the case of the Second Credit Agreement),
or in connection with any Permitted Lien.


 


(f)            FSAM has received all consents and
approvals required by the terms of the Collateral to the transfer to the GIC
Issuers and the Security Agent (on behalf of the Lenders in the case of the
First Credit Agreement, or DCL in the case of the Second Credit Agreement), its
interest and rights in the Collateral hereunder.


 


(g)           FSAM has not consented to the Account Bank’s complying with the
entitlement orders or other instructions of any Person other than FSA, the GIC
Issuers and the Security Agent (i) on behalf of the Lenders with respect
to the First Credit Agreement and (ii) on behalf of DCL with respect to
the Second Credit Agreement, as applicable, in connection with the Securities
Account.  All of the Collateral
consisting of “security entitlements” (within the meaning of the UCC) and “financial
assets” (within the meaning of the UCC) has been credited to the Securities
Account.  The securities intermediary for
the Securities Account has agreed to treat all “Collateral” (for this purpose
as such term is defined in the Existing Control Agreement) credited to the
Securities Account as “financial assets” (within the meaning of the UCC).  The Securities 


 


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Account is a “securities account”
(within the meaning of the UCC).  FSAM
acknowledges that the Account Bank as securities intermediary has agreed, or
will agree, upon execution of the Securities Account Control Agreement pursuant
to Section 4.2, to comply with all instructions originated by either FSA
or the GIC Issuers or (in the event the Senior Lien Release Date has occurred)
the Security Agent, (i) on behalf of the Lenders with respect to the First
Credit Agreement and (ii) on behalf of DCL with respect to the Second
Credit Agreement, as applicable, relating to the Securities Account, without
further consent by FSAM.


 


(h)           The Collateral consists of (1) “instruments” (within the
meaning of the UCC), (2) “accounts” (within the meaning of the UCC), (3) “general
intangibles” (within the meaning of the UCC), (4) “security entitlements”
(within the meaning of the UCC), (5) “securities accounts” (within the
meaning of the UCC), (6) “deposit accounts” (within the meaning of the
UCC) or (7) “financial assets” (within the meaning of the UCC).


 


(i)            With respect to any sale of
Collateral by FSAM from time to time, the amount of consideration being
received by FSAM from the purchaser of such Collateral constitutes reasonably
equivalent value and fair consideration for FSAM’s interest in the Collateral.


 


(j)            Each of the foregoing
representations: (i) shall also be deemed made and repeated by FSAM, as
applicable, for purposes of Sections 2.02(a) and 3.01 of each Credit
Agreement as of the date of the relevant loan and (ii) shall, as
applicable, be deemed repeated each time new assets become part of the
Collateral.


 


SECTION 4.4.                Further Assurances. At any time and from time to
time, upon the written request of FSA, a GIC Issuer or a Lender, and at the
sole expense of FSAM, FSAM will promptly and duly execute and deliver, or will
promptly cause to be executed and delivered, such further instruments and
documents and take such further action as FSA, a GIC Issuer or Lender may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Article IV and of the rights and powers herein granted, including,
without limitation, the execution and delivery of deposit account control
agreements and the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the Liens
created hereby.  FSAM also hereby
authorizes FSA, each GIC Issuer and the Security Agent to file any such
financing or continuation statement without the signature of FSAM to the extent
permitted by applicable law.  A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.  The Security Agent, (i) on behalf of the
Lenders with respect to the First Credit Agreement and (ii) on behalf of
DCL with respect to the Second Credit Agreement, and each Lender covenants with
FSA and the GIC Issuers that such party will not file any such financing
statement until after FSA and the GIC Issuers confirm the filing of a financing
statement perfecting FSA’s and the GIC Issuers’ pari passu security interests in the Collateral not
previously perfected under the Existing Control Agreement.


 


SECTION 4.5.                Release of Security Interest.


 


(a)           Upon termination of the Master
Notes and Master Agreements and repayment to the GIC Issuers of all amounts
owed by FSAM thereunder and the performance by FSAM of all obligations
thereunder, the GIC Issuers shall release their security interest in any 


 


11

















 


remaining
Collateral; provided that if any payment, or any part thereof, of any of the
GIC Issuer Obligations is rescinded or must otherwise be restored or returned by
a GIC Issuer upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of FSAM, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or a trustee or similar officer for
FSAM or any substantial part of its property, or otherwise, the Master Notes
and Master Agreements, all rights thereunder and the GIC Issuers’ Lien created
hereby shall continue to be effective, or be reinstated, as though such
payments had not been made.  The GIC
Issuers shall be authorized to take any action and make any filings necessary
or desirable to continue or reinstate such GIC Issuers’ Lien.


 


(b)           Upon termination of the Lender
Agreements and repayment to the Lenders of all amounts owed by FSAM under the
Credit Agreements and the performance of all obligations under the Lender
Agreements, the Security Agent, on behalf of the Lenders with respect to the
First Credit Agreement and on behalf of DCL with respect to the Second Credit
Agreement, shall release its security interest in any remaining Collateral;
provided that if any payment, or any part thereof, of any of the Lender
Obligations is rescinded or must otherwise be restored or returned by a Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
FSAM, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or a trustee or similar officer for FSAM or any substantial
part of its property, or otherwise, the Lender Agreements, all rights
thereunder and the Lenders’ Liens created hereby shall continue to be
effective, or be reinstated, as though such payments had not been made.  The Security Agent shall be authorized to
take any action and make any filings necessary or desirable to continue or
reinstate such Lenders’ Liens.


 


(c)           So long as no Event of Default
under either Credit Agreement has occurred and is continuing, no Senior Lien
Release Date has occurred and no “Notice of Sole Control” (as such term is
defined in the Securities Account Control Agreement) has been delivered by the
Security Agent, the Lenders’ Liens in any Collateral sold by FSAM from time to
time in accordance with the Lender Agreements, the Master Notes and the Master
Agreements, and the FSAM Insurance Agreement for one or more of the Intended
Uses shall be deemed released without the need for further action or consent by
the Security Agent at the same time as the FSA Liens and the GIC Issuers’ Lien
in such Collateral are released in connection with such sale by FSAM (provided
that the existence of a Permitted Lien shall result in the subordination of the
Lenders’ Liens, the FSA Liens and the GIC Issuers’ Lien in accordance with Section 5.1
but not the release of such Liens).


 


SECTION 4.6.                Changes in Locations, Name, etc. FSAM shall not (i) change
the location of its chief executive office/chief place of business from that
specified in the Lender Agreements, (ii) change its name, identity or
corporate structure (or the equivalent) or change the location where it
maintains its records with respect to the Collateral or (iii) reorganize
or reincorporate under the laws of any other jurisdiction, unless it shall have
given FSA, the GIC Issuers and the Security Agent at least 30 days prior
written notice thereof and shall have delivered to FSA, the GIC Issuers and the
Security Agent all Uniform Commercial Code financing statements and amendments
thereto as FSA, the GIC Issuers and the Security Agent shall request and taken
all other reasonable actions deemed necessary or desirable by FSA, the GIC
Issuers and the Security Agent to continue FSA, the GIC Issuers’ and the
Security Agent’s perfected statuses in the Collateral with the same or better
priorities.


 


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ARTICLE V


SUBORDINATION; REMEDIES


 


SECTION 5.1.                Subordination to Permitted Liens.


 


The Lenders, FSA,
the GIC Issuers and FSAM agree that the Lenders’ Liens, the GIC Issuer’s Lien
and the FSA Liens, including any right or security of any party arising in
connection with a Collateral Posting Lien, shall be expressly made subordinate
and junior in priority and right of enforcement to any Permitted Lien.


 


SECTION 5.2                 Subordination of Lenders’
Liens.


 


(a)           Irrespective of anything contained in any Lender Agreement, the
Master Notes, the Master Agreements, the FSAM Insurance Agreement, the FSA
Capital Management Insurance Agreement or the FSA Capital Markets Insurance
Agreement, so long as any Senior Secured Obligations are outstanding, the
Lenders agree that the security interest created in favor of the Security
Agent, (i) on behalf of the Lenders with respect to the First Credit
Agreement and (ii) on behalf of DCL with respect to the Second Credit
Agreement, under this Agreement, is hereby expressly made subordinate and
junior in priority and right of enforcement to the security interest in the
Collateral to the extent for the benefit of FSA and the GIC Issuers now
existing and arising in the future securing the Senior Secured Obligations.


 


(b)           Following receipt of notice of an
Event of Default (as defined in the FSAM Insurance Agreement) from FSA or of
notice of an Event of Default (as defined in the Master Notes or Master
Agreements) from either of the GIC Issuers and prior to the Senior Lien Release
Date, each of the Lenders agrees that it shall not exercise any rights, remedies
or powers with respect to the Collateral granted to it under this Agreement, as
a secured party or otherwise, without the prior written consent of FSA and the
GIC Issuers.


 


(c)           From and after any Event of Default
under the FSAM Insurance Agreement or the Master Notes or Master Agreements,
all collections, payments, sale proceeds realized on disposition or other
proceeds of the Collateral shall be applied in the following order:  (i) to the payment of due and unpaid
fees and expenses of the Account Bank, (ii) pro rata to (a) the
payment of all obligations of FSAM to FSA under the FSAM Insurance Agreement,
and (b) the payment of all unpaid principal or interest in respect of the
Master Notes or repurchase price in respect of the Master Agreements, provided
that such payment is applied on the same Business Day to the payment of  a corresponding amount of unpaid principal
and interest in respect of the GICs, (iii) following the final payment of
all amounts owed under the FSAM Insurance Agreement and the Master Notes and
the Master Agreements, to the payment of any and all unpaid principal or
interest, commitment fees, or other amounts due and payable in respect of  the First Credit Agreement, (iv) following
the final payment of all amounts owed under the First Credit Agreement, to the
payment of any and all unpaid principal or interest, commitment fees, or other
amounts due and payable in respect of 
the Second Credit Agreement, and (v) after occurrence of the dates
referred to in (i), (ii), (iii) and (iv), to FSAM; provided, that
the provisions of this Section 5.2(c) shall not limit the right of
FSAM to use any such proceeds of the Collateral or any borrowings made under
either Credit Agreement for any of the Intended Uses.


 


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(d)           If at any time following notice of an Event of Default under the
FSAM Insurance Agreement, the Master Notes or the Master Agreements, the
Lenders shall have received any payment or distribution (whether voluntary,
involuntary, through the exercise of any rights of set-off, or otherwise, and
whether in cash, property or securities) in excess of the payments or
distributions the Lenders would have received through the operation of 5.2(c) (such
excess payments or distributions being referred to as “Excess Payments”),
then the Lenders shall hold such Excess Payments in trust for the benefit of
FSA and the GIC Issuers, and shall promptly pay over such Excess Payments in
the form received (duly endorsed, if necessary, to FSA) to FSA, for distribution
by FSA pursuant to Section 5.2(c).


 


(e)           Upon release by FSA of the security
interest in all Collateral pursuant to the terms of the FSAM Insurance
Agreement and by the GIC Issuers of the GIC Issuers’ Lien, either (i) FSA
shall transfer and assign “control” (as defined under the UCC) of the
Securities Account under the Securities Account Control Agreement to the
Security Agent or (ii) FSA shall terminate the Securities Account Control
Agreement in accordance with the terms thereunder and the Security Agent and
the Account Bank may enter into a new securities account control agreement
giving the Security Agent “control” (as defined under the UCC) of the
Securities Account.


 


SECTION 5.3                 Effectiveness of Subordination. The subordinations, agreements and
priorities set forth in this Agreement shall remain in full force and effect,
regardless of whether any Person in the future seeks to rescind, amend,
terminate or reform, by litigation or otherwise, its respective agreements with
FSAM.


 


SECTION 5.4                   Obligations
Absolute. Nothing
herein shall impair, as between FSAM, on the one hand, and FSA, on the other
hand, the obligations of FSAM, which are irrevocable, unconditional and
absolute, to pay to FSA the amounts due under the FSAM Insurance Agreement from
time to time.  Nothing herein shall
impair, as between FSAM, on the one hand, and the GIC Issuers, on the other
hand, the obligations of FSAM, which are irrevocable, unconditional and
absolute, to pay to the GIC Issuers the amounts due under the Master Notes and
Master Agreements from time to time.


 


SECTION 5.5                 Lender Remedies. 
The provisions of this Section 5.5
are subject to the provisions of Section 2.3 hereof.  If any Event of Default under either Credit
Agreement shall occur and be continuing, the Security Agent may exercise, in
addition to all other rights and remedies granted to it under this Agreement
and each Credit Agreement and in any other instrument or agreement securing,
evidencing or relating to the Lender Obligations, all rights and remedies of a
secured party under the Uniform Commercial Code.  Without limiting the generality of the
foregoing, the Security Agent may without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon FSAM or any other Person
(each and all of which demands, presentments, protests, advertisements and
notices are hereby waived), in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell (on a servicing released basis, at the Security Agent’s option),
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels or as an entirety at public or private sale
or sales, at any exchange, broker’s board or office of the Security Agent or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may 


 


14

















 


deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Security Agent shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in FSAM, which right or equity is hereby waived or
released. The Security Agent may, on one or more occasions, postpone or adjourn
any such sale by public announcement at the time of such sale. The Security
Agent shall give FSAM prior or concurrent notice of any such postponement or
adjournment.  FSAM further agrees, at the
Security Agent’s request, to assemble the Collateral and make it available to
the Security Agent at places which the Security Agent shall reasonably select,
whether at FSAM’s premises or elsewhere. The Security Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Security
Agent hereunder, including without limitation reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Lender Obligations, in
such order as the Security Agent may elect, and only after such application and
after the payment by the Lenders of any other amount required or permitted by
any provision of law, including without limitation the Uniform Commercial Code,
need the Security Agent account for the surplus, if any, to FSA, the GIC
Issuers or FSAM.  If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such
sale or other disposition.  FSAM shall
remain liable for any deficiency (plus accrued interest thereon in accordance
with the terms of the Lender Agreements) if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Lender Obligations
and the fees and disbursements of any attorneys employed by the Security Agent
to collect such deficiency.


 


SECTION 5.6                 GIC Issuer Remedies. 
The provisions of this Section 5.6
are subject to the provisions of Section 2.3 hereof.  If any Event of Default under the Master
Notes or the Master Agreements shall occur and be continuing, the GIC Issuers
may exercise, in addition to all other rights and remedies granted to it under
this Agreement, the Master Notes, the Master Agreements and in any other
instrument or agreement securing, evidencing or relating to the Master Notes or
the Master Agreements, all rights and remedies of a secured party under the
Uniform Commercial Code.  Without
limiting the generality of the foregoing, the GIC Issuers may without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon FSAM
or any other Person (each and all of which demands, presentments, protests,
advertisements and notices are hereby waived), in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell (on a servicing released basis, at the GIC
Issuers’ option), lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels or as an entirety
at public or private sale or sales, at any exchange, broker’s board or office
of the GIC Issuers or elsewhere upon such terms and conditions as they may deem
advisable and at such prices as they may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The GIC Issuers
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption
in FSAM, which right or equity is hereby waived or released. The GIC Issuers
may, on one or more occasions, postpone or adjourn any such sale by public
announcement at the time of such sale. The GIC Issuers shall give FSAM prior or
concurrent notice of any such 


 


15

















 


postponement or adjournment. 
FSAM further agrees, at the GIC Issuers’ request, to assemble the
Collateral and make it available to the GIC Issuers at places which the GIC
Issuers shall reasonably select, whether at FSAM’s premises or elsewhere. The
GIC Issuers shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of the GIC Issuers hereunder, including without limitation
reasonable attorneys’ fees and disbursements, to the payment in whole or in
part of the GIC Issuer Obligations, in such order as the GIC Issuers may elect,
and only after such application and after the payment by the GIC Issuers of any
other amount required or permitted by any provision of law, including without
limitation the Uniform Commercial Code, need the GIC Issuers account for the
surplus, if any, to FSA or FSAM.  If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. 
FSAM shall remain liable for any deficiency (plus accrued interest
thereon in accordance with the terms of the Master Notes and the Master
Agreements) if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the GIC Issuer Obligations and the fees and
disbursements of any attorneys employed by the GIC Issuers to collect such
deficiency.


 


SECTION 5.7                 Right to Initiate Judicial
Proceedings, etc. The provisions of this Section 5.7 are subject to
the provisions of Section 2.3 hereof. 
The GIC Issuers and the Security Agent shall have the right
and power to institute and maintain such suits and proceedings as they may deem
appropriate to protect and enforce the rights vested in (i) the GIC
Issuers, in the case of the Master Notes and Master Agreements, and (ii) the
Lenders under the Lender Agreements.  From
and after the occurrence of an Event of Default (as defined under a Master Note
or Master Agreement) the GIC Issuers may, either after entry or without entry,
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Collateral and to sell all, or from time to time any, of the
Collateral under the judgment or decree of a court of competent
jurisdiction.  From and after the
occurrence of an Event of Default (as defined under a Credit Agreement) the
Security Agent may, either after entry or without entry, proceed by suit or
suits at law or in equity to enforce such rights and to foreclose upon the
Collateral and to sell all, or from time to time any, of the Collateral under
the judgment or decree of a court of competent jurisdiction.


 


SECTION 5.8                 Remedies Not Exclusive. The
provisions of this Section 5.8 are subject to the provisions of Section 2.3
hereof. (a) No remedy conferred upon or reserved to the GIC
Issuers, the Security Agent or the Lenders herein is intended to be exclusive
of any other remedy or remedies, but every such remedy shall be cumulative and
shall be in addition to every other remedy conferred herein or now or hereafter
existing at law or in equity or by statute.


 


(b)           No delay by or omission of the GIC Issuers, the
Security Agent or the Lenders to exercise any right, remedy or power accruing
upon the occurrence and continuance of any Event of Default under the Master
Notes or Master Agreements or under the Lender Agreements, as applicable, shall
impair any such right, remedy or power or shall be construed to be a waiver of
any such Event of Default or an acquiescence therein; and every right, power
and remedy given by this Agreement to the GIC Issuers or the Security Agent may
be exercised from time to time and as often as may be deemed expedient by the
GIC Issuers subject to the provisions of the Master Notes and the Master
Agreements or the 


 


16

















 


Security Agent subject to the provisions of the Lender
Agreements.


 


(c)           In case the GIC Issuers or the Security Agent
shall have proceeded to enforce any right, remedy or power under this
Agreement, the Master Notes, the Master Agreements, or any Lender Agreement and
the proceeding for the enforcement thereof shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the GIC
Issuers, the Security Agent or the Lenders, as applicable, then and in every
such case FSAM, the GIC Issuers, the Security Agent, and the Lenders shall, subject
to any effect of or determination in such proceeding, severally and
respectively be restored to their former positions and rights hereunder with
respect to the Collateral and in all other respects, and thereafter all rights,
remedies and powers of the GIC Issuers and the Security Agent shall continue as
though no such proceeding had been taken.


 


(d)           All rights of action and rights to assert claims
upon or under this Agreement may be enforced by the GIC Issuers or the Security
Agent without the possession of this Agreement, the Master Notes, the Master
Agreements, the Credit Agreements or any Note issued thereunder, or any other
document or “instrument” (within the meaning of the UCC) evidencing any of the
GIC Issuer Obligations or Lender Obligations or the production thereof in any
trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the GIC Issuers or the Security Agent shall, in the case of the
GIC Issuers, be brought in the names of the GIC Issuer’s, or in the case of the
Security Agent, in its name, and any recovery of judgment shall be held as part
of the Collateral.


 


SECTION 5.9                 Security Agent’s Appointment as
Attorney-in-Fact


 


(a)           FSAM  hereby
irrevocably constitutes and appoints the Security Agent, (i) on behalf of
the Lenders with respect to the First Credit Agreement and (ii) on behalf
of DCL with respect to the Second Credit Agreement, and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of FSAM, and in the name of FSAM or in its own name, from time to time in
their discretion, for the purpose of, carrying out the terms of each Credit
Agreement and this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of such agreements; provided, that the
Security Agent hereby agrees that it shall not exercise its rights under this Section 5.9(a) until
(i) the occurrence of the Senior Lien Release Date and (ii) the
occurrence and continuation of any Event of Default under either Credit
Agreement.  Without limiting the
generality of the foregoing, FSAM  hereby gives the Security Agent the power
and right, on behalf of FSAM, without assent by, but with notice to, FSAM, if
the Senior Lien Release Date has occurred and an Event of Default has occurred
and is continuing with respect to either Credit Agreement, to do the following:


 


(i)            in the name of FSAM, or its own
name, or otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
with respect to any other Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Security Agent for the purpose of collecting any and all
such moneys due under any such insurance or with respect to any other
Collateral whenever payable;


 


17














 


(ii)                                  to pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral; and


 


(iii)                               (A) to direct any party liable
for any payment under any Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Security Agent or as the Security
Agent shall direct; (B) to ask or demand for, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (C) to
sign and endorse any invoices, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any thereof and to enforce
any other right in respect of any Collateral; (E) to defend any suit,
action or proceeding brought against FSAM with respect to any Collateral; (F) to
settle, compromise or adjust any suit, action or proceeding described in clause
(E) above and, in connection therewith, to give such discharges or
releases as the Security Agent may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Security Agent
were the absolute owner thereof for all purposes, and to do, at the option of
the Security Agent and at FSAM’s expense, at any time, and from time to time,
all acts and things that the Security Agent deems necessary to protect,
preserve or realize upon the Collateral and the Security Agent’s Liens thereon
and to effect the intent of the Lender Agreements, all as fully and effectively
as FSAM might do; and


 


(b)                                 FSAM hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.


 


(c)                                  If the Senior Lien Release Date has
occurred and an Event of Default has occurred and is continuing with respect to
either Credit Agreement, FSAM also authorizes the Security Agent, at any time
and from time to time, to execute, in connection with any sale of Collateral,
any endorsements, assignments, stock powers or other instruments of conveyance
or transfer with respect to the Collateral.


 


(d)                                 Notwithstanding the foregoing, the powers
conferred on the Security Agent, (i) on behalf of the Lenders with respect
to the First Credit Agreement and (ii) on behalf of DCL with respect to
the Second Credit Agreement, and its officers and affiliates are solely to
protect the Lenders’ interests in the Collateral in order to satisfy the Lender
Obligations, shall not be used for any other purpose, and shall not impose any
duty upon the Security Agent to exercise any such powers.  Each Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and no Lender nor any of its officers, directors, or employees shall be
responsible to FSAM for any act or failure to act hereunder, except for its own
gross negligence or willful misconduct.


 


(e)                                  All powers, authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.


 


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SECTION 5.10                                            GIC Issuers’ Appointment as Attorney-in-Fact


 


(a)                                  FSAM  hereby irrevocably constitutes and
appoints the GIC Issuers and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of FSAM, and in the name of FSAM or
in their own names, from time to time in their discretion, for the purpose of,
carrying out the terms of the Master Notes, Master Agreements and this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of such agreements; provided, that the GIC Issuers hereby agree that
they shall not exercise their rights under this Section 5.10(a) until
the occurrence and continuation of any Event of Default under either a Master
Note or Master Agreement.  Without
limiting the generality of the foregoing, FSAM  hereby gives the GIC Issuers the power
and right, on behalf of FSAM, without assent by, but with notice to, FSAM, if
an Event of Default has occurred and is continuing with respect to any Master
Note or Master Agreement, to do the following:


 


(i)                                     in the name of FSAM, or its own
name, or otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
with respect to any other Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the GIC Issuers for the purpose of collecting any and all such
moneys due under any such insurance or with respect to any other Collateral
whenever payable;


 


(ii)                                  to pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral; and


 


(iii)                               (A) to direct any party liable
for any payment under any Collateral to make payment of any and all moneys due
or to become due thereunder directly to the GIC Issuers or as the GIC Issuers
shall direct; (B) to ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral; (C) to sign
and endorse any invoices, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any thereof and to enforce
any other right in respect of any Collateral; (E) to defend any suit, action
or proceeding brought against FSAM with respect to any Collateral; (F) to
settle, compromise or adjust any suit, action or proceeding described in clause
(E) above and, in connection therewith, to give such discharges or
releases as the GIC Issuers may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the GIC Issuers
were the absolute owner thereof for all purposes, and to do, at the option of
the GIC Issuers and at FSAM’s expense, at any time, and from time to time, all
acts and things that the GIC Issuers deem necessary to protect, preserve or
realize upon the Collateral and the 


 


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GIC Issuers’ Lien
thereon and to effect the intent of the Master Notes and the Master Agreements,
all as fully and effectively as FSAM might do; and


 


 (b)                              FSAM hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.


 


(c)                                  If an Event of Default has occurred and is
continuing with respect to any Master Note or Master Agreement, FSAM also
authorizes the GIC Issuers, at any time and from time to time, to execute, in
connection with any sale of Collateral, any endorsements, assignments, stock
powers or other instruments of conveyance or transfer with respect to the
Collateral.


 


(d)                                 Notwithstanding the foregoing, the powers
conferred on the GIC Issuers and its officers and affiliates are solely to
protect the GIC Issuers’ interests in the Collateral in order to satisfy the
GIC Issuer Obligations, shall not be used for any other purpose, and shall not
impose any duty upon the GIC Issuers to exercise any such powers.  Each GIC Issuer shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and no GIC Issuer nor any of its officers, directors, or employees shall be
responsible to FSAM for any act or failure to act hereunder, except for its own
gross negligence or willful misconduct.


 


(e)                                  All powers, authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.


 


SECTION 5.11                                            Waiver of Certain Rights. FSAM, to the extent it may
lawfully do so, on behalf of itself and all who may claim through or under it,
including any and all subsequent creditors, vendees, assignees and lienors,
expressly waives and releases any, every and all rights to presentment, demand,
protest or any notice (to the extent permitted by applicable law and except as
specifically provided in this Agreement) of any kind in connection with this
Agreement or any Collateral or to have any marshalling of the Collateral upon
any sale, whether made under any power of sale granted hereunder or any other
agreement or instrument, or pursuant to judicial proceedings or upon any
foreclosure or any enforcement of this Agreement, any other Lender Agreement or
any Master Note or Master Agreement and consents and agrees that all the
Collateral may at any such sale be offered and sold as an entirety or in lots
or otherwise as the GIC Issuers or the Security Agent may determine or be
directed hereunder, as applicable.


 


SECTION 5.12                                            Limitation by Law. All the provisions of this Article V
are intended to be subject to all applicable mandatory provisions of law which
may be controlling in the premises and to be limited to the extent necessary so
that they will not render this Agreement invalid, unenforceable in whole or in
part or not entitled to be recorded, registered, or filed under the provisions
of any applicable law.


 


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ARTICLE VI


 MISCELLANEOUS PROVISIONS


 


SECTION 6.1.                                               Binding on Successors, Transferees
and Assigns.  This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by each party, and their respective
successors, transferees and assigns.


 


SECTION 6.2.                                               Amendments, etc. 
No amendment to, waiver of or consent to departure from the terms of any
provision of this Agreement shall be effective unless the same shall be in
writing signed by all of the parties hereto and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.


 


SECTION 6.3.                                               Notices. 
All notices and other communications provided for hereunder shall be in
writing (including facsimile communication) and mailed or telecopied or
delivered by electronic transmission or delivered to it at the address and in
the manner set forth in the applicable Lender Agreement, FSAM Insurance
Agreement, Master Note or Master Agreement, as applicable.


 


SECTION 6.4.                                               No Waiver; Remedies. 
No failure on the part of a party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.


 


SECTION 6.5.                                               Captions. 
Section captions used in this Agreement are for convenience of
reference only, and shall not affect the construction of this Agreement.


 


SECTION 6.6.                                               Severability. 
Wherever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.


 


SECTION 6.7.                                               Governing Law, Entire Agreement,
etc.  THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). 
THIS AGREEMENT CONSTITUTES THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO. THE “SECURITIES INTERMEDIARY’S
JURISDICTION” AND THE “BANK’S JURISDICTION” UNDER THE SECURITIES ACCOUNT
CONTROL AGREEMENT SHALL BE THE STATE OF NEW YORK, AND, ACCORDINGLY, THE PARTIES’
RIGHTS AND OBLIGATIONS CONCERNING THE SECURITIES ACCOUNT AND ALL FINANCIAL
ASSETS CREDITED THERETO AND CASH THEREIN SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.


 


SECTION 6.8.                                               Forum Selection and Consent to
Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
PARTIES 


 


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SHALL BE BROUGHT
AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.  EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR OUTSIDE OF THE STATE OF NEW YORK. 
EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  TO THE EXTENT THAT ANY PARTY HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR
FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS AGREEMENT.


 


SECTION 6.9.                                               Waiver of Jury Trial. 
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF EITHER PARTY.  EACH PARTY
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION.


 


SECTION 6.10.                                         Counterparts. 
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.


 


SECTION 6.11.                                         Third Party Beneficiaries. 
Nothing in this Agreement shall confer any right, remedy or claim,
express or implied, upon any person other than the parties hereto, and all the
terms, covenants, conditions, promises and agreements contained herein shall be
for the sole and exclusive benefit of the parties hereto and their successors
and permitted assigns


 


22

















 


IN WITNESS WHEREOF, the parties
have caused this Agreement to be duly executed and delivered by its officer
thereunto as of the date first written above.


 


 


	
  DEXIA CRÉDIT LOCAL

  	
   

  	
  FINANCIAL SECURITY ASSURANCE INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Pascal Poupelle

  	
   

  	
   

  
	
  Name:

  	
  Pascal Poupelle

  	
   

  	
  By:

  	
   

  	
  /s/ Robert P. Cochran

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
  Chairman & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEXIA BANK BELGIUM S.A.

  	
   

  	
  FSA ASSET MANAGEMENT
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Ann De Roeck

  	
   

  	
  By:

  	
   

  	
  /s/ Guy Cools

  
	
  Name:

  	
  Ann De Roeck

  	
   

  	
  Title:

  	
  Managing Director

  
	
  Title:

  	
  Secretary General, Member of the

  Management Board

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Christine Vanderveeren

  	
   

  	
   

  
	
  Name:

  	
  Christine Vanderveeren

  	
   

  	
   

  
	
  Title:

  	
  Director, Legal Department

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FSA CAPITAL MANAGEMENT SERVICES LLC

  	
   

  	
  FSA CAPITAL MARKETS SERVICES LCC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Guy Cools

  	
   

  	
  By:

  	
   

  	
  /s/ Guy Cools

  
	
  Title:

  	
  Managing Director

  	
   

  	
  Title:

  	
  Managing Director

  



 


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