Document:

Exhibit 10.4.4

 

	
  (Bilateral
  Form)

  	
   

  	
  (ISDA Agreements Subject to New York Law Only)

  

 

ISDA®

International
Swaps and Derivatives Association, Inc.

 

CREDIT SUPPORT ANNEX

to the Schedule to
the ISDA Master Agreement

 

dated as of June 30,
2009

 

between

 

	
  DEXIA CRÉDIT LOCAL S.A., acting through
  its New York Branch, and DEXIA
  SA, jointly and severally;

  	
   

  	
  and

  	
   

  	
  FSA ASSET MANAGEMENT LLC

  

 

This
Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.

 

Accordingly, the parties agree as follows:—

 

Paragraph 1. 
Interpretation

 

(a)                                  Definitions and
Inconsistency.  Capitalized terms not otherwise defined herein or
elsewhere in this Agreement have the meanings specified pursuant to Paragraph
12, and all references in this Annex to Paragraphs are to Paragraphs of this
Annex.  In the event of any inconsistency
between this Annex and the other provisions of this Schedule, this Annex will
prevail, and in the event of any inconsistency between Paragraph 13 and the
other provisions of this Annex, Paragraph 13 will prevail.

 

(b)                                 Secured Party and Pledgor. 
All
references in this Annex to the “Secured Party” will be to either party when
acting in that capacity and all corresponding references to the “Pledgor” will
be to the other party when acting in that capacity; provided,
however, that if Other Posted Support is held by a party to this
Annex, all references herein to that party as the Secured Party with respect to
that Other Posted Support will be to that party as the beneficiary thereof and
will not subject that support or that party as the beneficiary thereof to
provisions of law generally relating to security interests and secured parties.

 

Paragraph 2. 
Security Interest

 

Each
party, as the Pledgor, hereby pledges to the other party, as the Secured Party,
as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party
hereunder.  Upon the Transfer by the
Secured Party to the Pledgor of Posted Collateral, the security interest and
lien granted hereunder on that Posted Collateral will be released immediately
and, to the extent possible, without any further action by either party.

 

Paragraph 3.  Credit Support Obligations

 

(a)                                  Delivery Amount. 
Subject to
Paragraphs 4 and 5, upon a demand made by the Secured Party on or promptly
following a Valuation Date, if the Delivery Amount for that Valuation Date
equals or exceeds the 

 

 

Pledgor’s
Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party
Eligible Credit Support having a Value as of the date of Transfer at least
equal to the applicable Delivery Amount (rounded pursuant to Paragraph
13).  Unless otherwise specified in
Paragraph 13, the “Delivery Amount”  applicable to the Pledgor for any Valuation Date will equal
the amount by which:

 

(i)            the
Credit Support Amount

 

exceeds

 

(ii)           the Value as of
that Valuation Date of all Posted Credit Support held by the Secured Party.

 

(b)                                 Return Amount. 
Subject to
Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly following
a Valuation Date, if the Return Amount for that Valuation Date equals or
exceeds the Secured Party’s Minimum Transfer Amount, then the Secured Party
will Transfer to the Pledgor Posted Credit Support specified by the Pledgor in
that demand having a Value as of the date of Transfer as close as practicable
to the applicable Return Amount (rounded pursuant to Paragraph 13).  Unless otherwise specified in Paragraph 13,
the “Return Amount”  applicable
to the Secured Party for any Valuation Date will equal the amount by which:

 

(i)            the Value as of
that Valuation Date of all Posted Credit Support held by the Secured Party
exceeds

 

(ii)           the
Credit Support Amount.

 

“Credit Support Amount”  means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party’s Exposure for that Valuation
Date plus (ii) the aggregate of all Independent Amounts applicable to the
Pledgor, if any, minus (iii) all Independent Amounts applicable to the
Secured Party, if any, minus (iv) the Pledgor’s Threshold; provided, however, that the Credit Support Amount will be
deemed to be zero whenever the calculation of Credit Support Amount yields a
number less than zero.

 

Paragraph 4. 
Conditions Precedent, Transfer Timing, Calculations and Substitutions

 

(a)                                  Conditions Precedent. 
Each
Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of the Secured
Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the
conditions precedent that:

 

(i)            no Event of
Default, Potential Event of Default or Specified Condition has occurred and is
continuing with respect to the other party; and

 

(ii)           no Early
Termination Date for which any unsatisfied payment obligations exist has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the other party.

 

(b)                                 Transfer Timing. 
Subject to
Paragraphs 4(a) and 5 and unless otherwise specified, if a demand for the
Transfer of Eligible Credit Support or Posted Credit Support is made by the
Notification Time, then the relevant Transfer will be made not later than the
close of business on the next Local Business Day; if a demand is made after the
Notification Time, then the relevant Transfer will be made not later than the
close of business on the second Local Business Day thereafter.

 

(c)                                  Calculations. 
All
calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d) will
be made by the Valuation Agent as of the Valuation Time.  The Valuation Agent will notify each party
(or the other party, if the Valuation Agent is a party) of its calculations not
later than the Notification Time on the Local Business Day following the
applicable Valuation Date (or in the case of Paragraph 6(d), following the date
of calculation).

 

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(d)                                 Substitutions.

 

(i)            Unless otherwise
specified in Paragraph 13, upon notice to the Secured Party specifying the
items of Posted Credit Support to be exchanged, the Pledgor may, on any Local
Business Day, Transfer to the Secured Party substitute Eligible Credit Support
(the “Substitute Credit Support”); and

 

(ii)           subject to
Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of
Posted Credit Support specified by the Pledgor in its notice not later than the
Local Business Day following the date on which the Secured Party receives the
Substitute Credit Support, unless otherwise specified in Paragraph 13 (the “Substitution
Date”); provided that the Secured Party will
only be obligated to Transfer Posted Credit Support with a Value as of the date
of Transfer of that Posted Credit Support equal to the Value as of that date of
the Substitute Credit Support.

 

Paragraph 5. 
Dispute Resolution

 

If a
party (a “Disputing Party”) disputes (I) the Valuation Agent’s calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer
of Eligible Credit Support or Posted Credit Support, then (1) the
Disputing Party will notify the other party and the Valuation Agent (if the
Valuation Agent is not the other party) not later than the close of business on
the Local Business Day following (X) the date that the demand is made
under Paragraph 3 in the case of (I) above or (Y) the date of
Transfer in the case of (II) above, (2) subject to Paragraph 4(a),
the appropriate party will Transfer the undisputed amount to the other party
not later than the close of business on the Local Business Day following (X) the
date that the demand is made under Paragraph 3 in the case of (I) above or
(Y) the date of Transfer in the case of (II) above, (3) the
parties will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:

 

(i)                                     In the case of a dispute involving a
Delivery Amount or Return Amount, unless otherwise specified in Paragraph 13,
the Valuation Agent will recalculate the Exposure and the Value as of the
Recalculation Date by:

 

(A)          utilizing any calculations of Exposure
for the Transactions (or Swap Transactions) that the parties have agreed are
not in dispute;

 

(B)           calculating the Exposure for the
Transactions (or Swap Transactions) in dispute by seeking four actual
quotations at mid-market from Reference Market-makers for purposes of
calculating Market Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not
available for a particular Transaction (or Swap Transaction), then fewer than
four quotations may be used for that Transaction (or Swap Transaction); and if
no quotations are available for a particular Transaction (or Swap Transaction),
then the Valuation Agent’s original calculations will be used for that
Transaction (or Swap Transaction); and

 

(C)           utilizing the procedures specified in
Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support.

 

(ii)                                  In the case of a dispute involving the
Value of any Transfer of Eligible Credit Support or Posted Credit Support, the
Valuation Agent will recalculate the Value as of the date of Transfer pursuant
to Paragraph 13.

 

Following
a recalculation pursuant to this Paragraph, the Valuation Agent will notify
each party (or the other party, if the Valuation Agent is a party) not later
than the Notification Time on the Local Business Day following the Resolution
Time.  The appropriate party will, upon
demand following that notice by the 

 

3

 

Valuation
Agent or a resolution pursuant to (3) above and subject to Paragraphs 4(a) and
4(b), make the appropriate Transfer.

 

Paragraph 6. 
Holding and Using Posted Collateral

 

(a)                                  Care of Posted Collateral.  
Without
limiting the Secured Party’s rights under Paragraph 6(c), the Secured Party
will exercise reasonable care to assure the safe custody of all Posted
Collateral to the extent required by applicable law, and in any event the
Secured Party will be deemed to have exercised reasonable care if it exercises
at least the same degree of care as it would exercise with respect to its own
property.  Except as specified in the
preceding sentence, the Secured Party will have no duty with respect to Posted
Collateral, including, without limitation, any duty to collect any
Distributions, or enforce or preserve any rights pertaining thereto.

 

(b)                                 Eligibility to Hold Posted
Collateral; Custodians.

 

(i)            General.  Subject to the satisfaction of any
conditions specified in Paragraph 13 for holding Posted Collateral, the Secured
Party will be entitled to hold Posted Collateral or to appoint an agent (a “Custodian”)
to hold Posted Collateral for the Secured Party.  Upon notice by the Secured Party to the
Pledgor of the appointment of a Custodian, the Pledgor’s obligations to make
any Transfer will be discharged by making the Transfer to that Custodian.  The holding of Posted Collateral by a
Custodian will be deemed to be the holding of that Posted Collateral by the
Secured Party for which the Custodian is acting.

 

(ii)           Failure to Satisfy Conditions.  If the Secured Party
or its Custodian fails to satisfy any conditions for holding Posted Collateral,
then upon a demand made by the Pledgor, the Secured Party will, not later than
five Local Business Days after the demand, Transfer or cause its Custodian to
Transfer all Posted Collateral held by it to a Custodian that satisfies those
conditions or to the Secured Party if it satisfies those conditions.

 

(iii)          Liability.  The Secured Party will be liable
for the acts or omissions of its Custodian to the same extent that the Secured
Party would be liable hereunder for its own acts or omissions.

 

(c)                                  Use of Posted Collateral. 
Unless
otherwise specified in Paragraph 13 and without limiting the rights and
obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if
the Secured Party is not a Defaulting Party or an Affected Party with respect
to a Specified Condition and no Early Termination Date has occurred or been
designated as the result of an Event of Default or Specified Condition with
respect to the Secured Party, then the Secured Party will, notwithstanding Section 9-207
of the New York Uniform Commercial Code, have the right to:

 

(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted Collateral it
holds, free from any claim or right of any nature whatsoever of the Pledgor,
including any equity or right of redemption by the Pledgor; and

 

(ii) register any Posted Collateral in the name of the Secured
Party, its Custodian or a nominee for either.

 

For
purposes of the obligation to Transfer Eligible Credit Support or Posted Credit
Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized
under this Agreement, the Secured Party will be deemed to continue to hold all
Posted Collateral and to receive Distributions made thereon, regardless of
whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.

 

4

 

(d)                                 Distributions and Interest
Amount.

 

(i)            Distributions.  Subject to Paragraph 4(a), if the
Secured Party receives or is deemed to receive Distributions on a Local
Business Day, it will Transfer to the Pledgor not later than the following
Local Business Day any Distributions it receives or is deemed to receive to the
extent that a Delivery Amount would not be created or increased by that
Transfer, as calculated by the Valuation Agent (and the date of calculation will
be deemed to be a Valuation Date for this purpose).

 

(ii)           Interest Amount.  Unless otherwise specified in
Paragraph 13 and subject to Paragraph 4(a), in lieu of any interest, dividends
or other amounts paid or deemed to have been paid with respect to Posted
Collateral in the form of Cash (all of which may be retained by the Secured
Party), the Secured Party will Transfer to the Pledgor at the times specified
in Paragraph 13 the Interest Amount to the extent that a Delivery Amount would
not be created or increased by that Transfer, as calculated by the Valuation
Agent (and the date of calculation will be deemed to be a Valuation Date for
this purpose).  The Interest Amount or
portion thereof not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security interest
granted under Paragraph 2.

 

Paragraph 7. 
Events of Default

 

For
purposes of Section 5(a)(iii)(1) of this Agreement, an Event of
Default will exist with respect to a party if:

 

(i)            that party fails
(or fails to cause its Custodian) to make, when due, any Transfer of Eligible
Collateral, Posted Collateral or the Interest Amount, as applicable, required
to be made by it and that failure continues for two Local Business Days after notice
of that failure is given to that party;

 

(ii)           that party fails to
comply with any restriction or prohibition specified in this Annex with respect
to any of the rights specified in Paragraph 6(c) and that failure
continues for five Local Business Days after notice of that failure is given to
that party; or

 

(iii)          that party fails to
comply with or perform any agreement or obligation other than those specified
in Paragraphs 7(i) and 7(ii) and that failure continues for 30 days
after notice of that failure is given to that party.

 

Paragraph 8. 
Certain Rights and Remedies

 

(a)                                  Secured Party’s Rights and
Remedies.  If at any time (1) an Event of Default or
Specified Condition with respect to the Pledgor has occurred and is continuing
or (2) an Early Termination Date has occurred or been designated as the
result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following
rights and remedies:

 

(i)            all rights and
remedies available to a secured party under applicable law with respect to
Posted Collateral held by the Secured Party;

 

(ii)           any other rights
and remedies available to the Secured Party under the terms of Other Posted
Support, if any;

 

(iii)          the right to
Set-off any amounts payable by the Pledgor with respect to any Obligations
against any Posted Collateral or the Cash equivalent of any Posted Collateral
held by the Secured Party (or any obligation of the Secured Party to Transfer
that Posted Collateral); and

 

(iv)          the right to
liquidate any Posted Collateral held by the Secured Party through one or more
public or private sales or other dispositions with such notice, if any, as may
be required under applicable law, free from any claim or right of any nature
whatsoever of the Pledgor, including any equity or right of redemption by the
Pledgor (with the Secured Party having the right to purchase any 

 

5

 

or all of the Posted Collateral to be sold) and to apply the proceeds
(or the Cash equivalent thereof) from the liquidation of the Posted Collateral
to any amounts payable by the Pledgor with respect to any Obligations in that
order as the Secured Party may elect.

 

Each
party acknowledges and agrees that Posted Collateral in the form of securities
may decline speedily in value and is of a type customarily sold on a recognized
market, and, accordingly, the Pledgor is not entitled to prior notice of any
sale of that Posted Collateral by the Secured Party, except any notice that is
required under applicable law and cannot be waived.

 

(b)                                 Pledgor’s Rights and
Remedies.  If at any time an Early Termination Date has occurred
or been designated as the result of an Event of Default or Specified Condition
with respect to the Secured Party, then (except in the case of an Early
Termination Date relating to less than all Transactions (or Swap Transactions)
where the Secured Party has paid in full all of its obligations that are then
due under Section 6(e) of this Agreement):

 

(i)            the Pledgor may
exercise all rights and remedies available to a pledgor under applicable law
with respect to Posted Collateral held by the Secured Party;

 

(ii)           the Pledgor may
exercise any other rights and remedies available to the Pledgor under the terms
of Other Posted Support, if any;

 

(iii)          the Secured Party
will be obligated immediately to Transfer all Posted Collateral and the
Interest Amount to the Pledgor; and

 

(iv)          to the extent that
Posted Collateral or the Interest Amount is not so Transferred pursuant to (iii) above,
the Pledgor may:

 

(A)          Set-off any amounts payable by the
Pledgor with respect to any Obligations against any Posted Collateral or the
Cash equivalent of any Posted Collateral held by the Secured Party (or any
obligation of the Secured Party to Transfer that Posted Collateral); and

 

(B)           to the extent that the Pledgor does
not Set-off under (iv)(A) above, withhold payment of any remaining amounts
payable by the Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that Posted
Collateral is Transferred to the Pledgor.

 

(c)                                  Deficiencies and Excess
Proceeds.  The Secured Party will Transfer to the Pledgor any
proceeds and Posted Credit Support remaining after liquidation, Set-off and/or
application under Paragraphs 8(a) and 8(b) after satisfaction in full
of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and
8(b).

 

(d)                                 Final Returns. 
When no
amounts are or thereafter may become payable by the Pledgor with respect to any
Obligations (except for any potential liability under Section 2(d) of
this Agreement), the Secured Party will Transfer to the Pledgor all Posted
Credit Support and the Interest Amount, if any.

 

Paragraph 9. 
Representations

 

Each
party represents to the other party (which representations will be deemed to be
repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:

 

(i) it has the power to grant a security interest in and lien on
any Eligible Collateral it Transfers as the Pledgor and has taken all necessary
actions to authorize the granting of that security interest and lien;

 

6

 

(ii) it is the sole owner of or otherwise has the right to
Transfer all Eligible Collateral it Transfers to the Secured Party hereunder,
free and clear of any security interest, lien, encumbrance or other
restrictions other than the security interest and lien granted under Paragraph
2,

 

(iii) upon the Transfer of any Eligible Collateral to the Secured
Party under the terms of this Annex, the Secured Party will have a valid and
perfected first priority security interest therein (assuming that any central
clearing corporation or any third-party financial intermediary or other entity
not within the control of the Pledgor involved in the Transfer of that Eligible
Collateral gives the notices and takes the action required of it under
applicable law for perfection of that interest); and

 

(iv) the performance by it of its obligations under this Annex
will not result in the creation of any security interest, lien or other
encumbrance on any Posted Collateral other than the security interest and lien
granted under Paragraph 2.

 

Paragraph 10. 
Expenses

 

(a)                               General. 
Except as
otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its
own costs and expenses in connection with performing its obligations under this
Annex and neither party will be liable for any costs and expenses incurred by
the other party in connection herewith.

 

(b)                                 Posted Credit Support. 
The
Pledgor will promptly pay when due all taxes, assessments or charges of any
nature that are imposed with respect to Posted Credit Support held by the
Secured Party upon becoming aware of the same, regardless of whether any
portion of that Posted Credit Support is subsequently disposed of under
Paragraph 6(c), except for those taxes, assessments and charges that result
from the exercise of the Secured Party’s rights under Paragraph 6(c).

 

(c)                                  Liquidation/Application of
Posted Credit Support.  All reasonable costs and expenses incurred by or on
behalf of the Secured Party or the Pledgor in connection with the liquidation
and/or application of any Posted Credit Support under Paragraph 8 will be
payable, on demand and pursuant to the Expenses Section of this Agreement,
by the Defaulting Party or, if there is no Defaulting Party, equally by the
parties.

 

Paragraph 11. 
Miscellaneous

 

(a)                                  Default Interest. 
A Secured
Party that fails to make, when due, any Transfer of Posted Collateral or the
Interest Amount will be obligated to pay the Pledgor (to the extent permitted
under applicable law) an amount equal to interest at the Default Rate
multiplied by the Value of the items of property that were required to be
Transferred, from (and including) the date that Posted Collateral or Interest
Amount was required to be Transferred to (but excluding) the date of Transfer
of that Posted Collateral or Interest Amount. 
This interest will be calculated on the basis of daily compounding and
the actual number of days elapsed.

 

(b)                                 Further Assurances. 
Promptly
following a demand made by a party, the other party will execute, deliver, file
and record any financing statement, specific assignment or other document and
take any other action that may be necessary or desirable and reasonably requested
by that party to create, preserve, perfect or validate any security interest or
lien granted under Paragraph 2, to enable that party to exercise or enforce its
rights under this Annex with respect to Posted Credit Support or an Interest
Amount or to effect or document a release of a security interest on Posted
Collateral or an Interest Amount.

 

(c)                                  Further Protection. 
The
Pledgor will promptly give notice to the Secured Party of, and defend against,
any suit, action, proceeding or lien that involves Posted Credit Support
Transferred by the Pledgor or that could adversely affect the security interest
and lien granted by it under Paragraph 2, unless that suit, action, proceeding
or lien results from the exercise of the Secured Party’s rights under Paragraph
6(c).

 

7

 

(d)                                 Good Faith and
Commercially Reasonable Manner.  Performance of all obligations under this
Annex, including, but not limited to, all calculations, valuations and
determinations made by either party, will be made in good faith and in a
commercially reasonable manner.

 

(e)                                  Demands and Notices. 
All
demands and notices made by a party under this Annex will be made as specified
in the Notices Section of this Agreement, except as otherwise provided in
Paragraph 13.

 

(f)                                    Specifications of Certain
Matters.  Anything referred to in this Annex as being specified
in Paragraph 13 also may be specified in one or more Confirmations or other
documents and this Annex will be construed accordingly.

 

Paragraph 12. 
Definitions

 

As used in this Annex:—

 

“Cash”  means the lawful currency of the United States of
America.

 

“Credit Support Amount”  has the meaning specified in Paragraph 3

 

“Custodian”  has the meaning specified in Paragraphs 6(b)(i) and
13.

 

“Delivery Amount”  has the meaning specified in Paragraph 3(a).

 

“Disputing Party”  has the meaning specified in Paragraph 5.

 

“Distributions”  means with respect to Posted Collateral other than
Cash, all principal, interest and other payments and distributions of cash or
other property with respect thereto, regardless of whether the Secured Party
has disposed of that Posted Collateral under Paragraph 6(c).  Distributions will not include any item of
property acquired by the Secured Party upon any disposition or liquidation of
Posted Collateral or, with respect to any Posted Collateral in the form of
Cash, any distributions on that collateral, unless otherwise specified herein.

 

“Eligible Collateral”  means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.

 

“Eligible Credit Support”  means Eligible Collateral and Other Eligible Support.

 

“Exposure”  means
for any Valuation Date or other date for which Exposure is calculated and
subject to Paragraph 5 in the case of a dispute, the amount, if any, that would
be payable to a party that is the Secured Party by the other party (expressed
as a positive number) or by a party that is the Secured Party to the other
party (expressed as a negative number) pursuant to Section 6(e)(ii)(2)(A) of
this Agreement as if all Transactions (or Swap Transactions) were being
terminated as of the relevant Valuation Time; provided that
Market Quotation will be determined by the Valuation Agent using its estimates
at mid-market of the amounts that would be paid for Replacement Transactions
(as that term is defined in the definition of “Market Quotation”).

 

“Independent Amount”  means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.

 

“Interest Amount”  means, with respect to an Interest Period, the
aggregate sum of the amounts of interest calculated for each day in that
Interest Period on the principal amount of Posted Collateral in the form of
Cash held by the Secured Party on that day, determined by the Secured Party for
each such day as follows:

 

(x) the amount of that Cash on that day;
multiplied by

 

8

 

(y) the Interest Rate in effect for that day;
divided by

 

(z) 360.

 

“Interest Period”  means the period from (and including) the last Local
Business Day on which an Interest Amount was Transferred (or, if no Interest
Amount has yet been Transferred, the Local Business Day on which Posted
Collateral in the form of Cash was Transferred to or received by the Secured
Party) to (but excluding) the Local Business Day on which the current Interest
Amount is to be Transferred.

 

“Interest Rate”  means the rate specified in Paragraph 13.

 

“Local Business Day”, unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except
that references to a payment in clause (b) thereof will be deemed to
include a Transfer under this Annex.

 

“Minimum Transfer Amount”  means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.

 

“Notification Time”  has the meaning specified in Paragraph 13.

 

“Obligations”  means,
with respect to a party, all present and future obligations of that party under
this Agreement and any additional obligations specified for that party in
Paragraph 13.

 

“Other Eligible Support”  means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.

 

“Other Posted Support”  means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.

 

“Pledgor”  means
either party, when that party (i) receives a demand for or is required to
Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred
Eligible Credit Support under Paragraph 3(a).

 

“Posted Collateral”  means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released
by the Secured Party under Paragraph 8. 
Any Interest Amount or portion thereof not Transferred pursuant to
Paragraph 6(d)(ii) will constitute Posted Collateral in the form of Cash.

 

“Posted Credit Support”  means Posted Collateral and Other Posted Support.

 

“Recalculation Date”  means the Valuation Date that gives rise to the
dispute under Paragraph 5; provided, however, that
if a subsequent Valuation Date occurs under Paragraph 3 prior to the resolution
of the dispute, then the “Recalculation Date” means the most recent Valuation
Date under Paragraph 3.

 

“Resolution Time”  has the meaning specified in Paragraph 13.

 

“Return Amount”  has the meaning specified in Paragraph 3(b).

 

“Secured Party”  means either party, when that party (i) makes a
demand for or is entitled to receive Eligible Credit Support under Paragraph 3(a) or
(ii) holds or is deemed to hold Posted Credit Support.

 

“Specified Condition”  means, with respect to a party, any event specified as
such for that party in Paragraph 13.

 

9

 

“Substitute Credit Support”  has the meaning specified in Paragraph 4(d)(i).

 

“Substitution Date”  has the meaning specified in Paragraph 4(d)(ii).

 

“Threshold”  means,
with respect to a party, the amount specified as such for that party in
Paragraph 13; if no amount is specified, zero.

 

“Transfer”  means,
with respect to any Eligible Credit Support, Posted Credit Support or Interest
Amount, and in accordance with the instructions of the Secured Party, Pledgor
or Custodian, as applicable:

 

(i)                                     in the case of Cash, payment or delivery
by wire transfer into one or more bank accounts specified by the recipient;

 

(ii)                                  in the case of certificated securities
that cannot be paid or delivered by book-entry, payment or delivery in
appropriate physical form to the recipient or its account accompanied by any
duly executed instruments of transfer, assignments in blank, transfer tax
stamps and any other documents necessary to constitute a legally valid transfer
to the recipient;

 

(iii)                               in the case of securities that can be
paid or delivered by book-entry, the giving of written instructions to the
relevant depository institution or other entity specified by the recipient,
together with a written copy thereof to the recipient, sufficient if complied
with to result in a legally effective transfer of the relevant interest to the
recipient; and

 

(iv)                              in the case of Other Eligible Support or
Other Posted Support, as specified in Paragraph 13.

 

“Valuation Agent”  has the meaning specified in Paragraph 13.

 

“Valuation Date”  means each date specified in or otherwise determined
pursuant to Paragraph 13.

 

“Valuation Percentage”  means, for any item of Eligible Collateral, the percentage
specified in Paragraph 13.

 

“Valuation Time”  has the meaning specified in Paragraph 13.

 

“Value”  means
for any Valuation Date or other date for which Value is calculated and subject
to Paragraph 5 in the case of a dispute, with respect to:

 

(i)                                    Eligible Collateral or Posted Collateral
that is:

 

(A)          Cash,
the amount thereof, and

 

(B)           a security, the bid price obtained by
the Valuation Agent multiplied by the applicable Valuation Percentage, if any;

 

(ii)                                 Posted Collateral that consists of items
that are not specified as Eligible Collateral, zero; and

 

(iii)                              Other Eligible Support and Other Posted
Support, as specified in Paragraph 13.

 

10

 

Execution Version

 

ISDA®

CREDIT SUPPORT ANNEX

(New York Law)

to the Schedule to the

ISDA Master Agreement

Non-Guaranteed Put Contract

dated as of June 30, 2009 between

 

DEXIA CRÉDIT LOCAL S.A., acting through its New York Branch, and DEXIA SA (jointly and severally) (hereinafter together
referred to as “Party A” or “Pledgor”)

and

FSA ASSET MANAGEMENT LLC,  (hereinafter referred to as “Party B”
or “Secured Party”).

 

Paragraph
13.  Elections and Variables.

 

(a)                                  Security Interest for “Obligations”.

 

(i)                                     Paragraph
2 is amended by adding, immediately after the words “lien on and right of
Set-off against”, the words “the Dexia Collateral Account, and all the property
from time to time credited thereto or carried therein, and the proceeds
thereof, including without limitation”.

 

(ii)                                  The term “Obligations” as used in this Annex includes
the following additional obligations:

With
respect to Party A: not applicable.

With
respect to Party B: not applicable.

 

(b)                                 Credit Support Obligations.

 

(i)                                     Eligible
Collateral.

 

On any date, the categories
of assets denominated in U.S. Dollars or Euros and designated as “CSA Eligible”
on Schedule A to the credit support annex of the Dexia Guaranteed Put Contract
qualify as “Eligible Collateral” and the Valuation Percentage for each such
category shall be the percentage corresponding to the current rating for such
category on the relevant Valuation Date. 
For the avoidance of doubt, any asset that is not Eligible Collateral
shall have a Value of zero for all purposes under this Credit Support
Annex.  Cash in U.S. Dollars shall also
constitute Eligible Collateral.

 

(ii)                                  Other
Eligible Support.

 

The following items will
qualify as “Other Eligible Support” for
the party specified:

 

Not applicable.

 

(iii)                               Threshold.

 

(A)                         “Independent
Amount”

 

1

 

With respect to Party A: (i) prior to the Swap Amendment Cut-Off
Date (as defined in the Hedging Letter Agreement referred to in the Pledge and
Administration Agreement), not applicable and (ii) on or after the Swap
Amendment Cut-Off Date, any amount that is applicable under the Hedging Letter
Agreement (and otherwise zero).

 

With respect to Party B: not applicable.

 

(B)                                “Threshold” means, with respect to Party A, USD
5,000,000, unless the Subordinated Claims Payment Condition is not met, in
which case it will be zero.

 

“Threshold”, with respect to Party B and any
Valuation Date is not applicable.

 

(C)                                “Minimum
Transfer Amount” means, with respect to Party A and Party B,
USD 5,000,000, unless
the Subordinated Claims Payment Condition is not met, in which case it will be
zero with respect to Party A, and infinity with respect to Party B.

 

(D)                               Rounding: The Delivery Amount will be
rounded up to the nearest integral multiple of USD 10,000. The Return Amount will
be rounded down to the nearest integral multiple of USD 10,000.

 

(c)                                  Valuation and Timing.

 

(i)                                     “Valuation
Agent” means the Reporting Agent (as defined in the Pledge
and Administration Agreement).

 

(ii)                                  “Valuation
Date” means (A) each day which is the last Business
Day in a calendar week, (each, a “Scheduled
Valuation Date”) and (B) any additional Business Day requested
to be a Valuation Date by FSA or Party A from time to time which is not a
Scheduled Valuation Date and is notified to Party A or Party B and FSA, as
applicable and the Valuation Agent at least one Business Day in advance of the
proposed additional Valuation Date (each an “Additional
Valuation Date”), provided that the number of Additional Valuation
Dates requested by FSA shall not exceed 10 in any calendar year (and the number
of Additional Valuation Dates requested by Party A is not limited).

 

(iii)                               “Valuation
Time” means the close of business in the city of the
Valuation Agent on the Local Business Day immediately preceding the Valuation
Date or date of calculation, as applicable; provided that
the calculations of Value and Exposure will be made as of approximately the
same time on the same date.

 

(iv)                              “Notification Time”
means 11:00a.m., New York City time, on a Local Business Day.

 

(v)                                 Deemed
Demand.  Paragraph 3(a) is amended
by adding, immediately following the words “upon a demand made by the Secured
Party” in Paragraph 3(a), the words “(which demand shall be deemed as having
been validly made automatically upon receipt of notice from the Valuation Agent
of a Delivery Amount resulting from the Valuation Agent’s calculations on any
Valuation Date)”.

 

(vi)                              “Value” means FSAM
Asset Value.

 

2

 

(vii)                           No DCL
Collateral Period and No Dexia Collateral Period.

 

(A)                              With respect to any date which falls
during a period which is (A) not on or after a Sovereign Guarantee
Unenforceability Date (as defined in the Dexia Guaranteed Put Contract) and (B)(I) on
and after the First Collateral Posting Date and prior to the Liquidity and
Collateral Trigger Expiration Date or (II) during a period that a DCL
Bankruptcy has occurred and is continuing (a “No
DCL Collateral Period”), (i) any Eligible Collateral
Transferred by DCL, whether at any time before or during such No DCL Collateral
Period, will be deemed to have a Value of zero during such No DCL Collateral
Period (any such Eligible Collateral on any date during the No DCL Collateral
Period the “Affected DCL Collateral”)
and (ii) only postings made by Dexia (whether made at any time before or
during such No DCL Collateral Period, and including by substitution in
accordance with the Credit Support Annex of Eligible Collateral posted by Dexia
for Eligible Collateral posted by DCL) will be considered in calculating any
applicable Delivery Amount and whether the obligation to Transfer Eligible
Collateral with a Value equal to such Delivery Amount has been met during such
No DCL Collateral Period; provided, that such Affected DCL Collateral shall be
Transferred to DCL against the simultaneous delivery of replacement Eligible
Collateral by Dexia.

 

(B)                                With respect to any date which falls
during a period which is (A) on or after a Sovereign Guarantee
Unenforceability Date and (B) not during a period that a DCL Bankruptcy
has occurred and is continuing (a “No Dexia
Collateral Period”), (i) any Eligible Collateral Transferred by
Dexia, whether at any time before or during such No Dexia Collateral Period,
will be deemed to have a Value of zero during such No Dexia Collateral Period
(any such Eligible Collateral on any date during the No Dexia Collateral Period
the “Affected Dexia Collateral”)
and (ii) only postings made by DCL (whether made at any time before or
during such No Dexia Collateral Period, and including by substitution in
accordance with the Credit Support Annex of Eligible Collateral posted by DCL
for Eligible Collateral posted by Dexia) will be considered in calculating any
applicable Delivery Amount and whether the obligation to Transfer Eligible
Collateral with a Value equal to such Delivery Amount has been met during such
No Dexia Collateral Period; provided, that such Affected Dexia Collateral shall
be Transferred to Dexia against the simultaneous delivery of replacement
Eligible Collateral by DCL.

 

(C)                                In
relation to any Put Settlement Date arising from a Collateral Default Trigger
occurring during a No DCL Collateral Period or No Dexia Collateral Period,
Party B shall Transfer to Party A the relevant Affected DCL Collateral or
Affected Dexia Collateral as of the date of occurrence of the relevant
Collateral Default Trigger as part of the Put Settlement Assets delivered to
Party A on such Put Settlement Date (unless Party A has already effected a
substitution for such Affected DCL Collateral or Affected Dexia Collateral as
described in Paragraph 13(c)(vii)).

 

(viii)                        In the event that a Put Settlement Date
occurs (i) on or after a DCL Belgian Corporate Reorganization has occurred
and (ii) prior to the date on which (1) the Collateral Replacement
Date has occurred and (2) Eligible Collateral having a Value equal to the
Delivery Amount determined on the Collateral Replacement Date shall have been
Transferred under the Credit Support Annex, and except in the case of a Put
Settlement 

 

3

 

under which the Put Settlement Amount is paid to Party
B by the Sovereign Guarantors, (A) Party A will be required to pay the Put
Settlement Amount on the Put Settlement Date, (B) Party B will not be
required to Deliver the related Put Settlement Assets until the date following
the Put Settlement Date on which the Belgian Preference Period has expired and (C) pending
such Delivery on the date referred to in (B), Party A will be deemed to have
pledged the relevant Put Settlement Assets to Party B and Party B shall hold
such Put Settlement Assets as additional Posted Collateral hereunder (“Repledged Assets”).

 

(d)                                 Substitution.

 

(i)                                     “Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).

 

(ii)                                  Consent.  If specified here as applicable, then the
Pledgor must obtain the Secured Party’s consent for any substitution pursuant
to Paragraph 4(d):  Inapplicable.

 

(e)                                  Dispute Resolution.

 

(i)                                     “Resolution
Time” means 1:00 p.m. New
York time on the Local Business Day following the date on which the notice of
the dispute is given under Paragraph 5.

 

(ii)                                  Value.  The provisions of Paragraph 5
will apply, provided, however, that any dispute as to the Indicative Market
Value of any FSAM Asset shall be resolved as set forth in the definition of “FSAM
Asset Value” and, to such extent, the provisions of Paragraph 5 shall not
apply.

 

(f)                                    Holding and Using Posted Collateral.

 

(i)                                     Eligibility to Hold Posted
Collateral; Custodians.  Party B
(through the Custodian) will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b).

 

The Custodian for
Party B is: Wells Fargo Bank, National Association.

 

Party A and Party B agree that (x) Posted Collateral that is
denominated in USD, or that is Cash that is USD, will be credited to the Dexia
Collateral Account and held in the United States of America, and (y) all
other Posted Collateral will either be deposited in the Dexia Collateral
Account or granted to the Custodian directly acting as representative for the
benefit of Party B and held by the Custodian in a special designated pledged
account opened in its name in the Euroclear System with Euroclear Bank NV/SA in
accordance with Euroclear’s Multi Pledgor Pledged Account Terms and Conditions
(the “MPAA Account”).  The Custodian may
use agents and affiliates for purposes of opening, managing and operating the
MPAA Account.

 

Notwithstanding the foregoing, if both a DCL Belgian
Corporate Reorganization and a Sovereign Guarantee Unenforceability Date have
occurred, all Transfers of Eligible Collateral will be made through, and all
Posted Collateral will be held in, the MPAA Account or another account (or
subaccount or subcustody arrangement) maintained in the Euroclear System.

 

4

 

(ii)                                  Use of Posted
Collateral.  The provisions of Paragraph
6(c)(i) will not apply to Party B, and the provisions of
Paragraph 6(c)(ii) will
apply to Party B; provided, however, that

 

(A)                              on any date on which the Collateral Agent
or FSA has delivered a Payment Failure Notice (as defined in the Pledge and
Administration Agreement) and the payment failure identified in such Payment
Failure Notice has not been cured on the third Business Day following the
Collateral Agent or FSA’s delivery of such Payment Failure Notice, Paragraph 6(c)(i) will apply to Party B
such that the Collateral Agent and/or FSA shall have the rights, subject to the
terms and limitations of the Pledge and Administration Agreement, to (x) enter
into a Temporary Funding Transaction (as defined in the Pledge and Administration
Agreement) in relation to any Posted Collateral held by the Collateral Agent
hereunder or (y) solely in the circumstances described in Section 11.2(b)(i)(C) of
the Pledge and Administration Agreement, to effect a Liquidation of Posted
Collateral by sale for its obtainable market value, and in each case apply the
proceeds of such transaction in (x) or (y) to satisfy one or more
scheduled or expected Senior Priority Payments identified in accordance with
the provisions Section 11.2(b) of the Pledge and Administration
Agreement at or prior to the time when such Payment Failure Notice was sent (“Required Senior Priority Payments”), and
any such application of the proceeds of such transaction in (x) or (y) shall
also be deemed to satisfy (to the extent of such proceeds) any Liquidity Draw
Request which is outstanding and has not been funded on the date such proceeds
are applied;

 

(B)                                on any date on or after the Collateral
Replacement Date on which the Administrator, the Collateral Agent or FSA has
delivered a GIC Termination Liquidity Draw and the relevant Bank under (and as
defined in) the Liquidity Facility or Buyer under (and as defined in) the
Repurchase Facility Agreement, as applicable, has not performed its payment
obligations within the time required under the Liquidity Facility or Repurchase
Facility Agreement, as applicable, Paragraph
6(c)(i) will apply to Party B such that the Collateral Agent and/or
FSA shall have the rights to enter into a Temporary Funding Transaction in
relation to any Posted Collateral held by the Collateral Agent hereunder, and
apply the proceeds of such transaction to satisfy the relevant GIC Termination
Liquidity Draw; and

 

(C)                                Party B or, if a Dexia Event of Default
has occurred, the Collateral Agent or FSA directly as third party beneficiary,
may instruct the transfer of any Posted Collateral which is eligible to be
posted as collateral to secure either (x) a FSA GIC Contract or (y) a
Third Party Hedge Agreement which is not a Subordinated Hedge Agreement to the
collateral account for such FSA GIC Contract or Third Party Hedge Agreement, as
applicable, and Paragraph 6(c)(i) will
apply to Party B to the extent necessary to permit such actions in (x) or
(y).

 

Any use of Posted
Collateral (or the cash proceeds thereof) provided for under (A) through (C) shall
not be considered a Set-off under Paragraph 8(a)(iii) or otherwise affect
the inclusion of the Value of such Posted Collateral as Posted Credit Support
held by the Secured Party for purposes of Paragraph 3 or the determination of
any Delivery Amount or Return Amount thereunder, provided that (x) the
Value of any Posted Collateral Liquidated under (ii)(A)(y) above, or
Liquidated in connection with the termination of a Temporary Funding
Transaction, shall be fixed at the FSAM Asset Value thereof as most recently
determined hereunder at the time of such Liquidation (in connection with the
Collateral Sale Deficiency Amount and Collateral Sale Excess Amount adjustments

 

5

 

referred to below) and (y) to
the extent that the Liquidation Proceeds of any sale or cash obtained in a
Temporary Financing Transaction have been applied to satisfy a Qualifying
Liquidity Payment (a “Liquidity Draw Offset”),
the portion of the FSAM Asset Value of the relevant Eligible Collateral
obtained by multiplying (i) such FSAM Asset Value times (ii) the
relevant Liquidity Offset Fraction, shall be no longer be included in
determining the Value of Posted Credit Support held by the Secured Party for
purposes of Paragraph 3 or the determination of any Delivery Amount or Return
Amount hereunder.

 

(g)                                 Distributions and
Interest Amount.

 

(i)                                     Distributions. The
provisions of Paragraph 6(d)(i) will not apply.  The Custodian shall credit all Distributions
received to the Dexia Collateral Account or the MPAA Account, as
applicable.  “Dexia Collateral Account”
has the meaning set forth in the Pledge and Administration Agreement.

 

(ii)                                  Interest Amount.  The provisions of Paragraph 6(d)(ii) will
apply, provided that (I) Posted Collateral in the form of Cash may be
invested only in cash equivalent investments eligible under the ALM Procedures
and agreed between the Custodian and the Administrator from time to time and (II) the
amount of interest on Posted Collateral in the form of Cash on any date will be
calculated by the Custodian based on the relevant investments in (I).

 

(h)                                 Additional Representation(s).  There are no additional representations by
either party.

 

(i)                                     Other Eligible Support
and Other Posted Support.

 

(i)                                           “Value” with respect
to Other Eligible Support and Other Posted Support means: not applicable.

 

(ii)                                        “Transfer” with respect to Other Eligible Support and Other
Posted Support means: not applicable.

 

(j)                                     Demands and Notices.  All demands, specifications and
notices under this Annex will be made pursuant to the Notices Section of
this Agreement, except that any demand, specification or notice shall be given
to or made at the following addresses, or at such other address as the relevant
party may from time to time designate by giving notice (in accordance with the
terms of this paragraph) to the other party:

 

If
to Party A, at the address specified pursuant to the Notices Section of
this Agreement.

 

If
to Party B, at the address specified pursuant to the Notices Section of
this Agreement.

 

If to Party B’s
Custodian:  Same address as if to Party B
pursuant to the Notices Section of this Agreement.

 

(k)                                 Address for Transfers.   Each Transfer hereunder
shall be made to the address specified in writing from time to time by the
party to which such Transfer will be made.

 

Party A account details — To be provided.

 

6

 

Party B account details — To be provided.

 

(l)                                     Additional Transfers.  On
any date, whether or not a Valuation Date, Party A may at its option  Transfer additional Eligible Collateral to the Dexia Collateral Account  for the purpose of making the resulting Posted Collateral available for
use by Party B in the manner contemplated by (f)(ii)(B) above.

 

(m)                               Other Provisions.

 

(i)                                     Collateral
Account.  Party A and Party B acknowledge and agree that
the Custodian shall hold, record and identify all Posted Collateral in the Dexia
Collateral Account or the MPAA Account.

 

(ii)                                  Agreement
as to Single Secured Party and Single Pledgor. Party A and Party B hereby agree that, notwithstanding
anything to the contrary in this Annex, (a) the term “Secured Party” as
used in this Annex means only Party B, (b) the term “Pledgor” as used in
this Annex means only Party A, (c) only Party A makes the pledge and grant
in Paragraph 2, the acknowledgement in the final sentence of Paragraph 8(a) and
the representations in Paragraph 9.

 

(iii)                               Events
of Default.

 

Paragraph 7 shall not apply.  Any failure by Party A to
comply with or perform any obligation to be complied with or performed by Party
A under this Credit Support Annex shall only be an Event of Default if Section 5(a)(i) of
the Agreement (as amended by the Schedule) is or becomes applicable thereto.

 

(iv)                              Additional
Definitions.  As used in this Annex:

 

“ALM Noncompliance Amount” means on any date of determination on which a
Dexia Event of Default has not occurred, the sum of (i) the aggregate of
the ALM Noncompliance Derivative Amounts plus (ii) the ALM Noncompliance
Operational Amount.

 

“ALM
Noncompliance Derivative Amount” means on any date of determination on which a
Dexia Event of Default has not occurred, and in relation to any interest rate,
currency or other derivative transaction (whether such transaction would be
classified as an Asset Swap or a Liability Swap) which (1) either (A) Party
A has agreed, following an objection by FSA, was required to have been effected
in order to comply with the ALM Procedures or (B) the ALM Arbiter has
concluded was required to have been effected in order to comply with the ALM
Procedures, as applicable, and (2) has not yet been effected by Party B,
an amount equal to the FSAM Liability Swap Benefit or FSAM Asset Swap Benefit,
as applicable, that would result from such transaction having been effected on
the date the ALM Arbiter determines (or that Party A agrees with FSA) that it
should have been effected and currently being in effect on such date of
determination.  In determining such FSAM
Liability Swap Benefit or FSAM Asset Swap Benefit the Valuation Agent may rely
on the determination of FSAM’s swap counterparty under any Third Party Hedge
Agreement or on the determination of the ALM Arbiter.

 

7

 

“ALM
Noncompliance Operational Amount” means on any date of determination on which (A) either
(i) the ALM Arbiter has concluded (or Party A has agreed, following an
objection by FSA) that Party B has failed to comply with a requirement of the
ALM Procedures or (ii) the ALM Arbiter has concluded (or Party A has agreed,
following an objection by FSA) that Party B has adopted an amendment or
modification to the ALM Procedures (other than a Dexia Policy Amendment) such
that the amended ALM Procedures do not constitute a reasonable and prudent
asset and liability management policy in accordance with prevailing market
standards for portfolio management activities of the same type, (B) FSA
has not consented to the relevant noncompliance, amendment or modification and (C)
Party B has failed to remedy the relevant noncompliance or rescind the relevant
amendment or modification to the ALM Procedures, an amount equal to 25% times
the Spread Component of the GIC Business Costs Amount as most recently
determined on such date.

 

“Collateral Replacement Date” means
the earlier to occur of (i) the First Collateral Posting Date, and (ii) any
Sovereign Guarantee Unenforceability Date.

 

“Collateral Sale
Excess Amount”
means in relation to each item of Eligible Collateral Liquidated by Party B or
the Collateral Agent in the circumstances set forth in Paragraph
13(f)(ii)(A)(y), (A) one minus the Liquidity Offset Fraction times (B) the
excess, if any, of (i) the relevant Liquidation Proceeds over (ii) the
FSAM Asset Value of such item of Eligible Collateral as most recently
determined hereunder at the time of such Liquidation.

 

“Collateral Sale
Deficiency Amount” means in relation to each item of Eligible Collateral sold by Party B
or the Collateral Agent in the circumstances set forth in Paragraph
13(f)(ii)(A)(y), (A) one minus the Liquidity Offset Fraction times (B) the
excess, if any, of (i) the FSAM Asset Value of such item of Eligible
Collateral as most recently determined hereunder at the time of such
Liquidation over (ii) the applicable Liquidation Proceeds.

 

“Collateral Value”
means, with respect to each Hedge Agreement, the Value of the Posted Collateral
held by the Collateral Agent on behalf of FSAM (and, for the avoidance of
doubt, not merely held by DCL as Credit Support Provider of FSAM under the
relevant Hedge Agreement) in relation to each Hedge Agreement, as determined by
the Valuation Agent.  For purpose of the
foregoing, with respect to any Hedge Agreement, “Value” and “Posted Collateral”
shall have the meanings set forth in Hedge Agreement, and the Valuation Agent
may rely on the determination of such Value by the Valuation Agent (as defined
in the relevant Hedge Agreement) in accordance with the terms of the relevant
Hedge Agreement.

 

“Dexia Policy Amendment”
means an amendment or modification to the ALM Procedures that is necessary, as
reasonably evidenced to FSA by Party A, to conform such ALM Procedures to
generally applicable risk management policies within the Dexia group.

 

“Exposure” means on any Valuation Date, an amount equal to the
sum, which shall not be less than zero, of:

 

8

 

(1)                                      the sum of

 

(A)                        the aggregate GIC Redemption Balance of
the FSA GIC Contracts as of such date, plus

 

(B)                          the GIC Business Costs Amount most
recently calculated on or prior to such date, plus

 

(C)                          the aggregate sum of the FSAM Exposure to
each of its Hedge Counterparties as of such date; plus

 

(D)                         the aggregate of all the FSAM Asset Swap
Costs and all the FSAM Liability Swap Costs, in each case in relation to Third
Party Hedge Agreements other than Third Party Hedge Agreements which are
Qualifying Hedge Agreements on such date; plus

 

(E)                           to the extent that (x) the “Credit
Support Amount” applicable to FSAM in relation to any Third Party Hedge
Agreement that is not a Qualifying Hedge Agreement as of such date, plus or minus any “unpaid
amounts” that are outstanding between the parties exceeds (y) the amount
determined in relation to such Third Party Hedge Agreement under (D), the
aggregate of such excess of (x) over (y) in relation to all such
Third Party Hedge Agreements; plus

 

(F)                           the ALM Noncompliance Amount (if any); plus

 

(G)                          the Lien Creditor Amount (if any); plus

 

(H)                         the Principal Forgiveness Amount (if
any); plus

 

(I)                              the aggregate of the Collateral Sale
Deficiency Amounts determined on or prior to such date, if any;

 

minus

 

(2)                                  the sum of

 

(A)                              (I) prior to the Collateral
Replacement Date, the aggregate Outstanding Principal Amount of the Put
Portfolio Assets and (II) on and after the Collateral Replacement Date,
the aggregate FSAM Asset Value of the Put Portfolio Assets, plus

 

(B)                                the aggregate FSAM Asset Value of the Excluded Assets and Other Assets
(including without duplication (I) cash proceeds of any Defaulted
Collateral Amount that has been paid by the Sovereign Guarantors as a Put
Settlement Amount under the Sovereign Guarantee and not invested in Permitted
Investments constituting Other Assets or applied under the Priority of
Payments, 

 

9

 

(II) Repledged
Assets, (III) any other cash held in respect of the Required Reserve and (IV) all
other amounts standing to the credit of the FSAM Cash Account or other accounts
maintained by the Collateral Agent under the Pledge and Administration
Agreement), plus

 

(C)                                the aggregate of the Collateral Values
related to Hedge Agreements, plus

 

(D)                               the aggregate of all the FSAM Asset Swap
Benefits in relation to Hedge Agreements; plus

 

(E)                                 the aggregate of the Collateral Sale
Excess Amounts determined on or prior to such date, if any.

 

“Eligible Dealers”
means JP Morgan Securities Inc., Goldman Sachs & Co., Deutsche Bank
Securities, Inc., Morgan Stanley & Co., Bank of America
Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities
(USA) LLC, and such other dealers as may be reasonably agreed among Party A,
the Administrator and FSA from time to time.

 

“FSAM Asset Swap Benefit”
means in relation to each derivative transaction that is identified as an Asset
Swap in the Hedge Agreement Register, the mark to market value of such
derivative transaction (if any) in favor of FSAM as determined by the Valuation
Agent hereunder in accordance with the definition of Exposure applicable under
the relevant Hedge Agreement (but disregarding any transactions other than such
Asset Swap that would otherwise be included in the determination of Exposure
thereunder as defined therein), where the Valuation Agent hereunder may rely
for this purposes on the determination of Exposure (or the components thereof)
by the relevant Third Party Valuation Agent.

 

“FSAM Asset Swap Cost”
means in relation to each derivative transaction that is identified as an Asset
Swap in the Hedge Agreement Register, the mark to market value of such
derivative transaction (if any) in favor of FSAM’s Hedge Counterparty as
determined by the Valuation Agent hereunder in accordance with the definition
of Exposure applicable under the relevant Hedge Agreement (but disregarding any
transactions other than such Asset Swap that would otherwise be included in the
determination of Exposure thereunder as defined therein), plus or minus any “unpaid
amounts” that are outstanding between the parties, where the Valuation Agent
hereunder may rely for this purposes on the determination of Exposure (or the
components thereof) by the relevant Third Party Valuation Agent.

 

“FSAM Assets Valuation Percentage”
means in relation to each category of FSAM Asset, the valuation percentage
corresponding to the current rating of such FSAM Asset as set forth under the
heading “Collateral Rating” on Schedule A to the credit support annex
of the Dexia Guaranteed Put Contract.

 

“FSAM Asset Value”
means in relation to each FSAM Asset or item of Eligible Collateral, on any
date of determination, the product of (i) (A) in the case of an FSAM
Asset, the Outstanding Principal Amount thereof times the indicative market
price (as a

 

10

 

 percentage of par) of such FSAM Asset
determined by the Valuation Agent in accordance with the procedures attached as
Schedule C to the credit support annex of the Dexia Guaranteed Put Contract,
and (B) in the case of an item of Eligible Collateral, the unpaid
principal balance thereof times the indicative market price (as a percentage of
par) of such item of Eligible Collateral, determined in accordance with
generally applicable procedures used by the Custodian for valuing similar types
of assets (each of (A) and (B), the “Indicative
Market Value”) and (ii) the FSAM Assets Valuation Percentage
corresponding to the relevant category of FSAM Asset (or item of Eligible
Collateral, as applicable).  The
FSAM Asset Value with respect to FSAM Assets that are not Put Portfolio Assets,
Excluded Assets, Permitted Investments or cash will be zero.

 

Either
the Pledgor or FSA (a “Disputing Party”)
may dispute the determination of any FSAM Asset Value on the basis of the Indicative
Market Value by the Valuation Agent; provided that in relation to any single
Valuation Date neither the Pledgor nor the Secured Party may dispute the
Valuation Agent’s determination of the FSAM Asset Value in relation to more
than 10% of the FSAM Assets (by principal amount, with such 10% permitted
amount to be determined separately for the Pledgor or Secured Party, as
applicable).  If a Disputing Party
disputes the Valuation Agent’s calculation of an FSAM Asset Value in accordance
with the foregoing restriction, then (1) the Disputing Party will notify
the other party, FSA and the Valuation Agent not later than the close of
business on the Local Business Day that the date that a demand is made or
deemed to have been made under Paragraph 3 (if such demand was made or
deemed to have been made at or prior to the Notification Time), or by 12:00
noon (New York City time) on the next Local Business Day (if such demand was
made or deemed to have been made at after the Notification Time), (2) subject
to Paragraph 4(a), the appropriate party will Transfer the full amount demanded
or deemed to have been demanded to the other party in accordance with the
timing set forth in Paragraph 4(b), (3) the parties will consult with each
other in an attempt to resolve the dispute and (4) if they fail to resolve
the dispute by the Resolution Time, then in relation to each FSAM Asset for
which one of the parties has initiated a dispute within the required time, the
Valuation Agent shall request bids from at least three Eligible Dealers, one of
which shall be identified by the Pledgor, one of which shall be identified by
FSA and the remainder of which shall be selected by the Valuation Agent.  For any bid to be eligible for use in calculating
the FSAM Asset Value (each an “Eligible Bid”),
it (i) must be received from the Eligible Dealer at or before 1:00 p.m.
on the business day following the Resolution Time, and (ii) must be a firm
bid at which the Eligible Dealer is ready and willing to purchase assets
determined by the Valuation Agent to be comparable, in an amount determined by
the Valuation Agent to be representative, at such price (provided, that in
obtaining such bid, the Valuation Agent shall not be required to commit to
actually deliver and sell the asset to any bidder).  On the basis of the Eligible Bids received
the Valuation Agent shall determine the FSAM Asset Value as follows:

 

(i)                                     In the event
that the Valuation Agent receives any Eligible Bid that is equal to or greater
than the Indicative Market Value for any FSAM Asset, the Indicative Market
Value determination for such FSAM Asset shall prevail without consideration of
any other Eligible Bid; or

 

11

 

(ii)                                  If the
Valuation Agent does not receive any Eligible Bid that is equal to or greater
than the Indicative Market Value for any FSAM Asset, then:

 

(a)                                  if the
Valuation Agent receives three or more Eligible Bids, the Valuation Agent shall
calculate the arithmetic mean of the three lowest Eligible Bids received (the “Bid Average”), and if such Bid Average is
more than 105% or less than 95% of the Indicative Market Value, the Valuation
Agent shall adjust the determination of the FSAM Asset Value so as to be within
the range that is not more than 105% or less than 95% of the Indicative Market
Value (but by no more than the amount necessary to be within such range), which
adjusted FSAM Asset Value shall be binding; or

 

(b)                                 if the
Valuation Agent receives only two Eligible Bids, the Valuation Agent shall use
the Indicative Market Value as one of the three bids used to calculate the Bid
Average, and the Valuation Agent shall determine FSAM Asset Value in accordance
with sub-clause (a) above; or

 

(c)                                  in the event
that fewer than two Eligible Bids are received, the Indicative Market Value
determination shall prevail without consideration of any Eligible Bid.

 

“FSAM Exposure” means
in relation to each Hedge Agreement the aggregate Exposure (if any) of FSAM to
the relevant Hedge Counterparty determined by the Valuation Agent in accordance
with the definition of Exposure applicable under the relevant Hedge Agreement
(where the Valuation Agent may rely for this purposes on the determination of
Exposure by the valuation agent or calculation agent under such Hedge
Agreement).  For the avoidance of doubt,
the determination of FSAM Exposure shall not be reduced by any Threshold
applicable to collateral postings under the relevant Hedge Agreement.

 

“FSAM Liability Swap Benefit”
means in relation to each derivative transaction that would be identified as a
Liability Swap in the Hedge Agreement Register, the mark to market value of
such derivative transaction (if any) in favor of FSAM that would be determined
by the Valuation Agent in accordance with the definition of Exposure applicable
under any Hedge Agreement selected by the Administrator (but disregarding any
transactions other than such transaction that would otherwise be included in
such determination of Exposure); or if such derivative transaction would not be
documented under an ISDA Master Agreement, the current market value of such
transaction in the relevant futures market or similar market as reasonably
estimated by the Administrator.

 

“FSAM Liability Swap Cost”
means in relation to each derivative transaction that is identified as a
Liability Swap in the Hedge Agreement Register, the mark to market value of
such derivative transaction (if any) in favor of FSAM’s Hedge Counterparty as
determined by the Valuation Agent hereunder in accordance with the definition
of Exposure applicable under the relevant Hedge Agreement (but disregarding any
transactions other than such Liability Swap that would otherwise be included in
such determination of Exposure), plus or minus any “unpaid amounts” that are
outstanding between the parties, where the Valuation Agent hereunder may rely
for this purposes on

 

12

 

the
determination of Exposure (or the components thereof) by the relevant Third
Party Valuation Agent.

 

“GIC Business Costs Amount”
means on any date of determination the amount applicable under the terms set
forth in Schedule B to the credit support annex of the Dexia Guaranteed Put
Contract in relation to such date, as most recently determined by the
Calculation Agent.

 

“GIC Redemption Balance”
means the outstanding principal balance of a GIC or, if a GIC accretes a
redemption value based on a fixed series of payments, such accreted redemption
value, provided, however that any component of such redemption value that is
attributable to a makewhole or prepayment premium payable upon redemption of
the relevant GIC in respect of changes in interest rates shall be excluded in
determining such redemption value.

 

“GIC
Termination Liquidity Draw” means a Liquidity Draw Request for
the purpose of paying, or reserving funds for payment of, the maximum amount potentially payable
under one or more GICs due to mandatory terminations, or terminations at the
option of the GIC Holder under the GIC Contracts, as a result of a GIC Credit
Event (as defined in the Liquidity Facility or Repurchase Agreeement Facility,
as applicable) which has made one or more GIC Termination Downgrade
Provisions become applicable under the relevant GIC Contracts.

 

“GIC
Termination Downgrade Provision” means a provision that requires
(i) the termination and repayment of a GIC Contract either automatically,
or assuming notice from the relevant GIC Holder electing such termination and
repayment (notwithstanding any posting of collateral) and (ii) becomes
applicable upon a specified downgrade of the rating of FSA’s financial
strength.

 

“Lien” means, with respect to any
asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset.

 

“Lien Creditor Amount” means, as of
any date, an amount equal to the sum of (x) the amount of any judgment,
tax claim or claim under the Employee Retirement Income Security Act of 1974 or
equivalent laws under non-U.S. jurisdictions (including any interest and/or
penalties on any such amounts) which is secured by a Lien on any Posted
Collateral or FSAM Assets, plus (y) an amount equal to the aggregate
amount of obligations (including any interest on such obligations accrued up to
and including such date) which are secured by a Lien on any Posted Collateral
or by FSAM Assets (other than the Lien of the Collateral Agent or any Secured
Party under the Pledge and Administration Agreement as contemplated by the
terms of such Agreement) which has not been discharged and with respect to
which Party A has received 30 days’ prior notice from Party B of the existence
of such Lien.

 

“Liquidation” means
either (i) the sale for cash of Eligible Collateral or (ii) the
termination of a Temporary Funding Transaction in relation to Eligible
Collateral on terms whereby the repurchase agreement buyer retains such
Eligible Collateral and the repurchase agreement seller retains the Liquidation
Proceeds.

 

13

 

“Liquidation Proceeds”
means the cash sale proceeds from a sale of Eligible Collateral or the cash proceeds of the financing
obtained in connection with such Temporary Funding Transaction.

 

“Liquidity Draw Request”
has the meaning specified in the Pledge and Administration Agreement.

 

“Liquidity Offset Fraction”
means in the case of a Liquidity Draw Offset, the fraction obtained by dividing
(i) the amount of the Liquidity Draw Offset by (ii) the full
Liquidation Proceeds of any sale or cash amount of the relevant Temporary
Financing Transaction.

 

“Local Business Day” means any day on
which (A) commercial banks are open for business (including dealings in
foreign exchange and foreign currency deposits) in New York and the location of
Party A, Party B and any Custodian, and (B) in relation to a Transfer of
Eligible Collateral, any day on which the clearance system agreed between the
parties for the delivery of Eligible Collateral is open for acceptance and
execution of settlement instructions (or in the case of a Transfer of Cash or
other Eligible Collateral for which delivery is contemplated by other means a
day on which commercial banks are open for business (including dealings in
foreign exchange and foreign deposits) in New York and the location of Party A,
Party B and any Custodian).

 

“Principal Forgiveness Amount” means
an amount equal to the aggregate of all amounts of principal forgiven by the
holders of any Put Portfolio Assets, Excluded Assets or Other Assets pursuant
to amendments to the Underlying Instruments which result in a reduction of the
Outstanding Principal Amount of the related Put Portfolio Assets, Excluded
Assets or Other Assets (except to the extent that either (A) such amount
of principal forgiven has been separately paid by Party A to Party B as a
Writedown Amount under this Agreement or (B) a Put Settlement Date has
occurred and the Put Settlement Amounts in relation thereto have already been
paid in relation to the relevant Put Portfolio Assets, Excluded Assets or Other
Assets prior to the relevant forgiveness of principal).

 

“Qualifying Hedge Agreement”
means a Third Party Hedge Agreement that (i) is a Subordinated Hedge Agreement and (ii) with respect to which on
the date of determination, Dexia or its Affiliates have posted all collateral
required to be posted in relation to such Third Party Hedge Agreement under the
credit support annex for such Third Party Hedge Agreement (including by
satisfying such requirements through the credit support annex for the Dexia
Affiliate guaranteeing such Third Party Hedge Agreement) as of such date.  For the avoidance of doubt, collateral posted
by Dexia or its Affiliates in relation to any Hedge Agreement that is treated
as a Qualifying Hedge Agreement shall be deemed not to constitute a Put
Portfolio Asset, Excluded Asset or Other Asset, or to have any FSAM Asset Value
for purposes of the determination of Exposure hereunder, whether or not the
relevant Hedge Counterparty treats Party B as the pledgor or beneficial owner
of such collateral for purposes of the relevant Hedge Agreement.

 

14

 

“Qualifying Liquidity Payment”
means (i) if any undrawn or unutilized commitments remaining outstanding
with respect to the Guaranteed Liquidity Facilities and such Guaranteed
Liquidity Facilities have not been terminated, a payment with respect to a
Liquidity Draw Request and (ii) if no undrawn or unutilized commitments
remain outstanding under the Guaranteed Liquidity Facilities or such Guaranteed
Liquidity Facilities have been terminated, a payment of principal or redemption
amount in relation to an FSA GIC Contract that if not otherwise paid would be
required to be paid by Party A as an “Obligation” under the Dexia FP Guarantee.

 

“Subordinated Hedge Agreement”
means each Third Party Hedge Agreement in relation to which Party A, FSAM and the
relevant Hedge Counterparty have entered into an amendment substantially in the
form set forth in Schedule D to the credit support annex to the Dexia
Guaranteed Put Contract, provided that Party A, Party B and FSA acknowledge and
agree that variations in the terms of individual amendments based on such form
either (i) that do not impair in any material respect the direct or
indirect benefits to Party B and FSA of the amendment contemplated by such form
or (ii) to which FSA has given its consent not to be unreasonably withheld
or delayed, shall not prevent a Third Party Hedge Agreement from qualifying as
a Subordinated Hedge Agreement.

 

“Third Party Valuation Agent”
means the “Valuation Agent” as defined in a Hedge Agreement.

 

Other terms.  Capitalized terms used and not defined herein
have the meanings set forth in the Pledge and Administration Agreement or the
Confirmation to this Agreement.

 

(v)                                 Rating
Agency Revisions.  Notwithstanding the provisions for the calculation of
Exposure and Value set forth above, if each of Moody’s Investors Service,
Standard and Poor’s Rating Services and Fitch Ratings Inc. (the “Rating Agencies”) confirm that the GIC
Issuers’ obligations in relation to the FSA GIC Contracts will continue to be
rated at least “Aa2/AA/AA” (without giving effect to the Retained FSA Policies
other than Secondary Policies) with a lesser Exposure being collateralized by
Party A or different FSAM Assets Valuation Percentage being applicable, then
the calculation of Exposure or FSAM Asset Value described above shall be
revised accordingly pursuant to Section 9(b) of this Agreement, and
when such amendment is effective Party A may post such lesser Credit Support
Amount as results from such amendment and/or receive a Return Amount of any
resulting excess Credit Support Amount (any such change a “Required Collateral Reduction”); provided,
further, that no Return Amount shall apply unless, prior to any Transfer of
such Return Amount, each Rating Agency confirms that the credit rating assigned
to the financial strength of FSA would not be downgraded or withdrawn as a
result of such Transfer.  Any rating
issued in accordance with the preceding sentence must be a monitored rating
(with the related costs and expenses being borne by Party A).

 

If after being obtained
any rating of the GIC Issuers is subsequently downgraded below “Aa3” by Moody’s
or “AA-” by S&P or Fitch or withdrawn, the definitions of Exposure and FSAM
Assets Valuation Percentage will be reinstated to require the Credit Support
Amount initially set forth herein prior to any Required Collateral Reductions,
and Party A 

 

15

 

shall be required to
Transfer Eligible Collateral to the extent of any resulting increase in the
Credit Support Amount resulting from such reinstatement within five Business
Days of receiving notice of such downgrade. 
Provided Party A satisfies such Transfer obligations, the FSAM Assets
Valuation Percentage shall thereafter be amended as necessary in consultation
with the Rating Agencies such that the rating of the GIC Issuers will be at
least “Aa3” by Moody’s, “AA-” by S&P and “AA-” by Fitch, provided that in
no event shall the definitions of Exposure and FSAM Assets Valuation Percentage
be reinstated to require a higher Credit Support Amount than initially set
forth herein prior to any Required Collateral Reductions.

 

(m)                               Remedies, Waiver.

 

(i)                                     In addition to the rights
and remedies of the Secured Party or its designee under Paragraph 8(a), and
subject in each case to the provisions of Section 5.3 of the Pledge and
Administration Agreement, the Pledgor agrees that if at any time (1) an
Event of Default with respect to the Pledgor has occurred and is continuing and
FSA has become the Secured Party Representative, or (2) an Early Termination
Date has occurred or been designated as the result of an Event of Default with
respect to the Pledgor, then, unless the Pledgor has paid in full all of its
Obligations that are then due, the Collateral Agent (as assignee of the Secured
Party and at the direction of the Secured Party Representative) may exercise
any of its rights or remedies afforded under any agreement, by law, at equity
or otherwise, including the rights and remedies of a secured party under the
Uniform Commercial Code as in effect in any applicable jurisdiction, or under
other applicable law, without further notice, demand or presentment.  Such rights and remedies include the rights
to use self-help or other remedies, including without limitation (i) taking possession of any Posted Collateral,
wherever situate; (ii) entering any premises or obtain sole control of any
account where Posted Collateral is located; and (iii) selling or otherwise
disposing of any Posted Collateral “as is” without representation or warranty
of any kind, at public or private sale, with such notice as may be required by
applicable law, in lots or in bulk, at such locations, all as the
Collateral Agent (as assignee of the Secured Party and at the direction of the
Secured Party Representative), in its
sole discretion, deems advisable.  The
Collateral Agent (as assignee of the Secured Party and at the direction of the
Secured Party Representative) shall
have the right to sell, lease or otherwise dispose of any Posted Collateral for
cash, credit or any combination thereof, and the Collateral Agent (as
assignee of the Secured Party and at the direction of the Secured Party
Representative) may purchase any Posted
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of the purchase price, may set off the amount of such price
against the Obligations.  The
rights and remedies of the Collateral Agent are cumulative, may be exercised at
any time and from time to time, concurrently or in any order, and are not
exclusive of any other rights or remedies available by agreement, by law, at
equity or otherwise.

 

(ii)                                  Paragraph 8(b) shall
not apply.

 

16

 

IN
WITNESS WHEREOF, the parties have executed this Annex by their duly authorized
representatives as of the date of the Agreement.

 

	
  DEXIA CRÉDIT LOCAL S.A.

  	
   

  	
  FSA ASSET MANAGEMENT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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  DEXIA
  SA  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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  Title:Exhibit
10.5

 

FIRST
DEMAND GUARANTEE

 

RELATING
TO THE “FINANCIAL PRODUCTS” PORTFOLIO OF FSA ASSET

MANAGEMENT LLC

 

ISSUED
BY THE FOLLOWING PARTIES, hereinafter “the Parties”:

 

1. The Belgian State, represented by Mr. Didier
Reynders, Vice-Prime Minister and Minister of Finance and Institutional
Reforms, duly authorized by the royal decree of December 10, 2008,
relating to the guarantee of certain risks assumed by financial institutions,
as amended by a royal decree of April 26, 2009, published in the Moniteur belge / Belgisch Staatsblad dated
December 19, 2008 and May 7, 2009; hereinafter “the Belgian State”;

 

2. The French State, represented by Mrs. Christine
Lagarde, Minister of the Economy, Industry and Employment, duly authorised by
Paragraph IV of Article 6 of the amending finance Law No 2008-1061 dated October 16,
2008 for the financing of the economy and published in the Official Journal of
the French Republic on October 17, 2008, as further supplemented and
amended by article 123 of the amending finance Law No 2008-1443 dated December 30,
2008 and published in the Official Journal of the French Republic on December 31,
2008; hereinafter “the French State”;

 

hereinafter collectively “the States”.

 

WHEREAS:

 

Financial Security Assurance Inc. (“FSA”),
a subsidiary of Dexia S.A. (“Dexia”),
has insured, in its “financial products” activity, Guaranteed Investment
Contracts issued by affiliates of FSA (such contracts insured by FSA the “GICs”). 
Payments in respect of the GICs are serviced by intercompany indebtedness
owed from FSA Asset Management LLC (“FSAM”)
to the issuers of the GICs, which intercompany indebtedness is serviced by the
assets owned by FSAM.

 

The contractual terms of said GICs typically provide that the issuer of
the GICs is obligated, in the event of a downgrade of the rating of FSA to a
specified level, to post collateral for the benefit of the GIC holders or to
redeem such GIC at the option of the GIC holder.

 

Such collateral posting or redemption requirement would result in
outflows of cash for FSAM, and indirectly for Dexia and those of its banking
subsidiaries who provide financing to FSAM, such that the stability of Dexia
may be compromised.

 

Dexia has agreed to the sale of FSA, which will contribute to
reinforcing Dexia’s stability.  Such sale
may only be achieved if the purchaser is protected against the risk of such
collateral posting or redemption requirements. 
Under the Guaranteed Put Contract defined below, Dexia has agreed to
provide credit protection to FSAM in relation to the assets servicing the GICs,
in order 

 

 

to ensure that FSAM can make payments on the intercompany indebtedness
servicing the GICs.  Dexia’s commitments
under the Guaranteed Put Contract will require substantial collateral posting
by Dexia unless subject to a guarantee by the States.

 

The European Commission has authorised the granting of this Guarantee
by a decision dated 13 March 2009.

 

The States have therefore
agreed, on the terms of this Guarantee, to issue a first demand guarantee to
the benefit of FSAM to cover the payment obligations of Dexia in relation to
the Guaranteed Put Contract.

 

NOW,
THEREFORE, THE PARTIES AGREE:

 

1.
DEFINITIONS

 

In this Guarantee, unless
stated otherwise, the following capitalised terms shall have the meaning
ascribed to them below.

 

“Accelerated Notice Guarantee Call” means a
Guarantee Call in relation to a Put Settlement Amount arising from a Liquidity
Default Trigger where the relevant Defaulted Liquidity Amount relates
to an amount drawn for the purpose of paying, or reserving funds for payment
of, one or more Accelerated Termination GICs which have terminated or are
subject to termination by the relevant GIC holders as a result of a Termination
Downgrade Provision; provided, however, that a copy of the relevant Put Exercise
Notice to which the Defaulted Liquidity Amount relates must have been received
by the States not later than 4:30 pm, Central European Time on the Business Day
prior to the date on which the relevant Guarantee Call is received;

 

“Accelerated Termination GIC” means a GIC
which is subject to a provision (a “Termination
Downgrade Provision”) providing for the termination and repayment of
such GIC either automatically, or assuming immediate notice from the relevant
GIC holder electing such termination and repayment upon the relevant downgrade,
six “business days” (as defined in the relevant GIC) or sooner after a
downgrade of the rating of FSA’s financial strength to below a threshold of “A-”
by S&P or “A3” by Moody’s (or to below a lower threshold), and which is identified as an
Accelerated Termination GIC in Appendix 3;

 

“Business Day” shall mean a Day, other than
a Saturday, a Sunday or a Day on which banks in France, Belgium and/or the City
of New York are authorized or obligated by law to close;

 

“Collateral Agent” shall mean The Bank of
New York Mellon Trust Company, N.A. as Collateral Agent under the Pledge and
Administration Agreement, or such successor Collateral Agent as may be
appointed thereunder from time to time in accordance with the terms thereof; and
in each case a reference to the “Collateral Agent” herein shall also refer to
any representative of the Collateral Agent authorized to act on its behalf
under the terms of such Pledge and Administration Agreement, which, for the
avoidance of doubt shall include FSA for all purposes hereunder;

 

2

 

“Day” shall mean a calendar day;

 

“Dexia Guarantors” means Dexia and DCL as
counterparties under the Guaranteed Put Contract;

 

“Guarantee” shall mean this Guarantee as
well as its appendices which shall form an integral part of it;

 

“Guarantee
Call” shall have
the meaning given in Article 5.2;

 

“Guaranteed Put Contract” means the ISDA
Master Agreement dated as of June 30, 2009 among Dexia, Dexia Crédit Local
S.A., acting through its New York branch (“DCL”)
and FSAM, including the Schedule and Credit Support Annex thereto and the
Confirmation thereunder dated as of June 30, 2009 and captioned “Guaranteed
Put Contract,” in relation to a put option transaction with respect to the Put
Portfolio Assets referred to therein, in each case without giving effect to any
amendments thereto to which the States have not given their prior written
consent;

 

“Pledge and Administration Agreement” means
the Pledge and Administration Agreement dated as of June 30, 2009 among, inter
alia, Dexia, DCL, FSAM, FSA and The Bank of New York Mellon Trust
Company, N.A. as Collateral Agent;

 

“September 30 Put Portfolio” means the
portfolio of financial assets of FSAM which is identified as such in the
Guaranteed Put Contract and which is also attached hereto as Appendix 2;

 

“Shortfall
Information” shall
have the meaning given in Article 5.3; and

 

“USD” or “U.S.
Dollars” means the lawful currency of the United States of America.

 

The following capitalized
terms used and not defined herein have the meanings ascribed in the Guaranteed
Put Contract, without giving effect to any amendments thereto to which the
States have not given their prior written consent:  “Asset
Default Trigger,” “Bankruptcy Trigger,” “Collateral Default Trigger,” “Defaulted
Collateral Amount,” “Defaulted Liquidity Amount,” “Deferred Settlement
Election,” “Delivery Amount,” “Dexia Bankruptcy,” “Final Maturity Date,” “First
Collateral Posting Date,” “GIC Balance,” “Interest Shortfall Amount,” “Legal
Final Maturity Date,” “Liquidity Default Trigger,” “Moody’s,” “Outstanding
Principal Balance,” “Principal Shortfall Amount,” “Put Portfolio Asset,” “Put
Settlement Amount,” “Put Settlement Assets,” “Put Settlement Date,” “S&P,” “Shortfall
Amount,” “Shortfall Payment Date,” “Sovereign Guarantee Unenforceability Date,”
“Transfer,” and “Writedown Amount.”

 

3

 

2.
OBJECT OF THE GUARANTEE

 

The Belgian State and the
French State severally, but not jointly, each to the extent of its quota
indicated in Article 4 and according to the terms and conditions of this
Guarantee, irrevocably and unconditionally undertake to pay to FSAM amounts
equal to the Shortfall Amounts or Put Settlement Amounts determined from time
to time under the Guaranteed Put Contract which are stated in a Guarantee Call
to be due and payable by Dexia. 
Notwithstanding the foregoing, this Guarantee will not extend (i) to
any termination payment obligations under Section 6(e) of the Guaranteed
Put Contract or otherwise, or (ii) to any amounts which can no longer
become payable under the Guaranteed Put Contract as a result of the designation
of such Early Termination Date.  In no
event shall this Guarantee cover attorney fees or any other litigation costs (i) arising
out of any dispute relating to the Guaranteed Put Contract or this Guarantee, (ii) arising
out of any enforcement of remedies under the Guaranteed Put Contract or this
Guarantee or (iii) otherwise relating to FSAM or the GICs.

 

3.
NATURE OF THE GUARANTEE

 

This Guarantee is an
autonomous guarantee and is payable upon first demand (“autonome garantie op eerste verzoek”/“garantie autonome à première demande”). In
the event of a Guarantee Call, each of the States waives any right (without
prejudice to their rights vis-à-vis Dexia)
to invoke any defenses or exceptions pertaining to the underlying obligations
between the Dexia Guarantors and FSAM and any other defenses or exceptions a
Dexia Guarantor could assert against FSAM, any Dexia Guarantor or any affiliate
or subsidiary thereof, FSA or the Collateral Agent.  The obligations of the States under this
Guarantee shall be absolute, unconditional and irrevocable, subject only to the
receipt of the relevant Guarantee Call in accordance with Article 5.2,
including for the avoidance of doubt the relevant Shortfall Information, in
connection with any claim on the States Guarantee.

 

Any reference in this
Guarantee to the Guaranteed Put Contract or to any other present or future
instrument is made for reference purposes only and shall not in any case be
interpreted as a waiver of the independent nature of the States’ obligations
hereunder.

 

4. STATE
QUOTAS AND CAP ON THE GUARANTEE

 

4.1  State
Quotas

 

Each of the States shall
pay the amounts duly called under a Guarantee Call up to the amount of its
quota (each a “State Quota”),
which is established at:

 

· a percentage figure equal to 60.5/97 for
the Belgian State;

· a percentage figure equal to 36.5/97 for
the French State;

 

This quota shall be
understood to be per Guarantee Call.

 

4

 

4.2  Aggregate
Loss Cap

 

In no event shall (A) the
cumulative amount of all payments made by each State under this Guarantee
exceed 60.5/97 of USD 16,980,000,000 in the case of the Belgian State or
36.5/97 of USD 16,980,000,000 (i.e. USD 6,389,381,443) in the case of the
French State, and (B) the maximum amount of all payments made by the
States under this Guarantee in any one-year period (measured from each January 1)
exceed 60.5/97, in the case of the Belgian State, or 36.5/97, in the case of
the French State, of the outstanding principal balance of the September 30
Portfolio as of December 31 of the immediately preceding year (either of (A) or
(B) the “Aggregate Loss Cap”).

 

4.3  In the event that an Early Termination Date
is designated on behalf of FSAM in accordance with the terms of the Guaranteed
Put Contract, the States’ obligations under this Guarantee shall be applicable
only to those amounts which have become due and payable under the terms of the
Guaranteed Put Contract prior to the designation of such Early Termination
Date.

 

5.
GUARANTEE CALL

 

5.1  Procedure

 

This Guarantee may only
be called by FSAM (or the Collateral Agent acting on behalf of FSAM through a
power of attorney or as otherwise contemplated by Article 10.2) insofar as
FSAM (or the Collateral Agent acting on behalf of FSAM through a power of
attorney or as otherwise contemplated by Article 10.2) expressly states in
the Guarantee Call that one or more Shortfall Amounts and/or Put Settlement
Amounts due by Dexia have not been paid to it on the scheduled payment date
therefor under the Guaranteed Put Contract.

 

In relation to any Put
Settlement Date arising from an Asset Default Trigger, if FSAM (or the
Collateral Agent acting on behalf of FSAM through a power of attorney or as
otherwise contemplated by Article 10.2) shall deliver a Guarantee Call as
described in Article 5.2, then at the option of the States either (i) a
Deferred Settlement Election shall be deemed to have been made and continued in
effect, such that the States shall pay only the relevant Shortfall Amounts
under this Guarantee (and not Put Settlement Amounts), until the relevant
subsequent Put Settlement Date arising after the applicable Deferred Settlement
Election period (a “Subsequent Put Settlement
Date”) or (ii) the States shall pay the Put Settlement Amount
against the delivery of, or undertaking to deliver, the Put Settlement Assets
to Dexia (as contemplated by Article 6.2), in each case on the number of
Business Days specified in Article 6.1.1 following receipt of such notice
specified in Article 5.2.  Unless
both States shall opt for the application of sub-clause (ii) above within
five Business Days following receipt of such notice, sub-clause (i) shall
be deemed to apply.

 

In relation to any Put
Settlement Date arising from a Liquidity Default Trigger, Collateral Default
Trigger or Bankruptcy Trigger, or a Subsequent Put Settlement Date relating to
an Asset Default Trigger, if FSAM (or the Collateral Agent acting on behalf of
FSAM through a power of attorney or as otherwise contemplated by Article 10.2)
shall deliver a Guarantee Call as described in Article 5.2, then the
States shall pay the Put Settlement Amount against the delivery 

 

5

 

of, or undertaking to
deliver, the Put Settlement Assets to Dexia (as contemplated by Article 6.2)
on the number of Business Days specified in Article 6.1.1 following
receipt of such notice.

 

5.2  Terms of
the Guarantee Call

 

Any demand for payment by
FSAM (including a demand by the Collateral Agent acting on behalf of FSAM
through a power of attorney or as otherwise contemplated by Article 10.2)
shall be made by means of a notice addressed directly to each of the States
substantially in the form set forth in Appendix 1 and including the relevant
Shortfall Information (the “Guarantee Call”).
For the avoidance of doubt, no State shall be required to make any payments
under this Guarantee unless any Guarantee Call is sent on the same date to both
the Belgian State and the French State. The Guarantee Call gives rise to the
performance of this Guarantee in accordance with the terms provided under Article 6.1.

 

5.3  Shortfall
Information

 

In order to be valid, the
Guarantee Call must be accompanied by the following information: (i) in
the case of a Guarantee Call in relation to an Asset Default Trigger, a
servicer or trustee report, advice from a paying agent, record of a clearance
system, statement by a rating agency, or similar information documenting the
relevant Interest Shortfall Amount, Principal Shortfall Amount or Writedown
Amount, (ii) in the case of a Guarantee Call in relation to a Liquidity
Default Trigger, a calculation of the relevant Defaulted Liquidity Amount
including evidence of the relevant notice or request for payment and
confirmation by the Collateral Agent of nonreceipt of funds, and a calculation
of the GIC Balance, (iii) in the case of a Guarantee Call in relation to a
Collateral Default Trigger, a calculation of the relevant Defaulted Collateral
Amount including evidence of the relevant demand for Transfer of a Delivery
Amount and confirmation by the Collateral Agent of nonreceipt of such Delivery
Amount, and a calculation of the GIC Balance or (iv) in the case of a
Guarantee Call in relation to a Bankruptcy Trigger, a calculation of the
aggregate current Outstanding Principal Balance plus accrued interest of the
Put Portfolio Assets and of the GIC Balance (each of (i), (ii), (iii) or (iv) in
relation to any Guarantee Call the “Shortfall
Information”).

 

6.
PERFORMANCE OF THE GUARANTEE

 

6.1  Each of the States shall, up to the amount of
its quota, pay in favour of FSAM the amount duly called pursuant to any
Guarantee Call in accordance with the provisions of this Guarantee.  Payments shall be made in accordance with the
following deadlines:

 

· not later than the fifth Business Day
following the Guarantee Call for Put Settlement Amounts arising from any
Liquidity Default Trigger (other than a Liquidity Default Trigger identified in
an Accelerated Notice Guarantee Call), Collateral Default Trigger or Bankruptcy
Trigger;

 

· not later than 6:30 pm, New York City
time, on the Business Day following the Guarantee Call for Put Settlement Amounts
arising from a Liquidity Default Trigger identified in an Accelerated Notice
Guarantee Call, provided that such Accelerated 

 

6

 

Notice Guarantee Call is
received by the States not later than 4:30 pm, Central European Time on a
Business Day;

 

· not later than the fifth Business Day
following the Guarantee Call for Put Settlement Amounts or Shortfall Amounts
arising from any Asset Default Trigger;

 

6.2  Payments shall be made in immediately
available funds via any appropriate clearing system or institutional service
mechanism or, by default, directly. Payments of Put Settlement Amounts shall be
made to the Collateral Agent against delivery by FSAM or the Collateral Agent
to Dexia of, or against an unconditional and irrevocable undertaking by the Collateral
Agent to deliver to Dexia upon receipt of payment, the relevant Put Settlement
Assets.  In relation to Put Settlement
Assets which may be subject to a pledge or lien, such an unconditional and
irrevocable undertaking may include an undertaking by the Collateral Agent,
acting as an escrow agent, custodian or in a similar capacity, to deliver such
Put Settlement Assets to Dexia following receipt of a payment hereunder
(whether by treating such payment as a discharge of the relevant pledge or lien,
as a substitution of cash collateral in place of such Put Settlement Assets for
purposes of the relevant pledge agreement, or otherwise).

 

7.  TERM OF THE GUARANTEE

 

7.1  The term of this Guarantee applicable to
Guarantee Calls arising from an Asset Default Trigger or Bankruptcy Trigger
shall extend until the earlier of (x) the final maturity of the latest
maturing Put Portfolio Asset with respect to which no Put Settlement Amount has
been paid or (y) March 30, 2035 .

 

7.2  The term of this Guarantee applicable to
Guarantee Calls arising from any Liquidity Default Trigger or Collateral
Default Trigger shall expire on October 31, 2011.

 

7.3  In order to be valid, any Guarantee Call,
including for the avoidance of doubt the relevant Shortfall Information, must
be received by the end of the relevant term of the Guarantee.  Payments due pursuant to a timely Guarantee
Call shall be required to made hereunder notwithstanding that the date for
payment determined in accordance with Article 6.1 may occur after the relevant
expiration date.

 

7.4  Notwithstanding any other provision of this
Guarantee, (a) no Guarantee Call may be validly made hereunder in relation
to any Liquidity Default Trigger or Collateral Default Trigger if, or to the
extent that, the related Defaulted Liquidity Amount or Defaulted Collateral
Amount would not have become applicable but for the occurrence of a Sovereign
Guarantee Unenforceability Date and (b) no Guarantee Call may be validly
made hereunder in relation to any Bankruptcy Trigger where the definition of
Dexia Bankruptcy under the Guaranteed Put Contract would not have been
satisfied but for the occurrence of a Sovereign Guarantee Unenforceability
Date.

 

8.  OPTIONAL TERMINATION OF THE GUARANTEE;
AMENDMENTS

 

The States acknowledge
and agree that a voluntary termination of this Guarantee may be agreed with
FSAM or otherwise become effective only if the conditions to such optional
termination specified in the Guaranteed Put Contract have been satisfied, as
evidenced by a written notice to 

 

7

 

such effect delivered by
the Collateral Agent to the States and FSAM, prior to such voluntary
termination

 

This Guarantee and any
term, condition or provision hereof may be otherwise amended or modified only
with the prior written consent of FSAM and the Collateral Agent.

 

9.  CURRENCY; CURRENCY INDEMNITY

 

The States agree that all
payments required to be made by the States hereunder shall be made in U.S.
Dollars.  In furtherance of the
foregoing. the obligation of the States in respect of any amount due under this
Guarantee shall, notwithstanding any payment in any currency other than U.S.
Dollars (whether pursuant to a judgment or otherwise), be discharged only to
the extent of the amount in U.S. Dollars that the person entitled to receive
that payment may, in accordance with normal banking procedures, purchase with
the sum paid in the other currency (after any premium and costs of exchange) on
the Business Day immediately following the day on which that person receives
that payment. If the amount in U.S. Dollars that may be so purchased for any
reason falls short of the amount originally due, the States shall pay such
additional amount, in U.S. Dollars, as is necessary to compensate for the
shortfall. Any obligation of the States not discharged by that payment shall,
to the fullest extent permitted by applicable law, be due as a separate and
independent obligation and until discharged as provided herein, shall continue
in full force and effect.  For the avoidance
of doubt, calculations of the utilization of the State Quotas and the Aggregate
Loss Cap shall be made solely in U.S. Dollars and on the basis of U.S. Dollar
amounts initially due under this Guarantee and paid by the States, whether or
not any related additional amounts are payable pursuant to this Article 9,
and any such additional amounts shall not increase the U.S. Dollar amounts used
in such calculation over the U.S. Dollar amounts initially due.

 

The States are not
entitled to any excess which may be enjoyed by the person or the account
entitled to receive such payment due to the conversion of the amount received
in US Dollars into the currency of the Guaranteed Obligation.

 

10.
MISCELLANEOUS

 

10.1  Entry into
force of the Guarantee

 

This Guarantee shall
enter into force on the date of its signature by the States and take effect as
from 30 June 2009 inclusive.

 

10.2  Assignment
of rights and obligations

 

The rights of FSAM
arising out of this Guarantee shall not be assignable to a third party, but may
be pledged by FSAM to the Collateral Agent to secure its intercompany
indebtedness relating to the GICs, and in connection with an enforcement of
such pledge the Collateral Agent may exercise the right of FSAM to make
Guarantee Calls and enforce the obligations of the States to make payments to
FSAM hereunder.

 

The obligations of the
States hereunder are not subject to delegation or transfer by the States.

 

8

 

10.3  Notifications

 

Any notification to be
served in performance of this Guarantee must be served by electronic mail or
fax sent to the following addresses and numbers (or to any other address which
may have been communicated in advance by one of the States to FSAM and the
other State) accompanied by a simultaneous transmission by bailiff or by
registered post with acknowledgement of receipt (it being understood that (i) a
notice by electronic mail or fax shall be effective upon receipt and (ii) for
the determination of the deadlines referred to in this Guarantee, any deadline
shall run from the date of the electronic mails or faxes received):

 

Belgian
State:

 

Public Federal Service
Finance

General Administration of
the Treasury

For the attention of
Monsieur l’Administrateur du Financement de l’Etat, marchés et services
financiers

Avenue des Arts 30

1040 Brussels

Fax: + 32 2 579 5828 and
+ 32 2 579 5842

email:
marc.monbaliu@minfin.fed.be; omer.vandriessche@minfin.fed.be;

piet.raepsaet@minfin.fed.be;
christel.devleeschauwer@minfin.fed.be; 

danny.premereur@minfin.fed.be

 

With a
copy to:

 

National Bank of Belgium

For the attention of the
Governor

14, Boulevard de
Berlaimont

1000 Brussels

Fax: +32 2 221 32 10

 

French
State:

 

Minister of the Economy,
Industry and Employment

For the attention of M. le Directeur Général du

Trésor et de la Politique Economique

139 Rue de Bercy

75 572 PARIS Cedex 12

Fax: + 33 1 53 18 36 15

Email:

sec-dg-ape@ape.finances.gouv.fr

and

sec-dgtresor@dgtpe.fr

 

9

 

With a
copy to:

 

Bank of France

For the attention of the
Governor

31 Rue Croix des petits champs

75001 PARIS

Fax: + 33 1 42 92 20 10

Email:
Secretariat.gouv@banque-france.fr

 

A copy of any
notification made pursuant to the present Article, must also be sent to:

DEXIA S.A.

11, Place Rogier

1210 Brussels

Fax: +32 (0)2 213 58 90

E-mail:

olivier.vanherstraeten@dexia.com
 and

secretarygeneral@dexia.com

Attn: Secretary General

 

10.4  Execution
of the Guarantee

 

The parties may execute
this Guarantee in multiple counterparts, each of which shall be deemed to be an
original by the party executing such counterpart, and all of which shall be
considered one Guarantee. The signatures of all parties should not necessarily
appear on the same counterpart.

 

10.5  Severability

 

Any provision of this Guarantee
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.

 

10.6  Headings

 

Article and Section headings
used herein are for convenience of reference only, are not part of this
Guarantee and shall not affect the construction of, or be taken into
consideration in interpreting, this Guarantee.

 

10.7  Taxes

 

All payments to be made
by each State hereunder shall be made without withholding or deduction for or on
account of any present or future taxes, duties or governmental charges
whatsoever imposed by such State, unless a State is compelled by law to deduct
or withhold such 

 

10

 

taxes, duties or
charges.  In that event, the applicable
State shall pay such additional amounts as may be necessary in order that the
net amounts received after such withholding or deduction shall equal the
amounts that would have been received if no withholding or deduction had been made,
and any such additional amounts shall not be taken into account in determining
whether any payment hereunder would cause the State Quotas and/or the Aggregate
Loss Cap to be exceeded.

 

10.8  Non-Petition

 

Each
of the States severally and not jointly covenants and agrees that it shall not,
prior to the date which is one year and one day (or if longer, the applicable
preference period then in effect) after the payment in full of the GICs and
FSAM’s intercompany indebtedness with respect to the GICs and the other secured
obligations of FSAM set forth in the Pledge and Administration Agreement,
acquiesce, petition or otherwise, directly or indirectly, invoke or cause FSAM
or any issuer of a GIC to invoke the process of any governmental authority for
the purpose of commencing or sustaining a case against FSAM or any issuer of a
GIC under any applicable bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of such person or any substantial part of its property or
ordering the winding up or liquidation of the affairs of such person.

 

11.
Applicable Law and Litigation

 

11.1  This Guarantee shall be governed by Belgian
law.

 

11.2 The courts of
Brussels shall have exclusive jurisdiction over any action to enforce this
Guarantee and any dispute in relation to this Guarantee, and each of the States
consents to such jurisdiction.  Without
limitation of the foregoing, the fact that certain claims or disputes under the
Guaranteed Put Contract, not including claims against the States, may be
resolved in the courts of the United States or the State of New York is not
intended to, and shall not, subject the States to jurisdiction in any court in
the United States with respect to claims, matters or issues arising out of such
litigation or any other matter.

 

11.3  Each of the Belgian State and the French
State is a sovereign entity, and each beneficiary of or claimant under this
Guarantee from time to time by its acceptance hereof acknowledges and agrees
that the States’ issuance of this Guarantee and the acts contemplated by this
Guarantee constitute sovereign activity undertaken within the scope of the
inherent authority of the Belgian State and the French State under Belgian law
and French law respectively, and do not constitute commercial activity.  Nothing in this Guarantee is intended, nor
shall it be deemed, to waive the inherent sovereign immunity of the Belgian
State and the French State to the jurisdiction of the courts of the United
States or of any State of the United States, as recognized in the United States
under the Foreign Sovereign Immunities Act, under traditional principles of
international comity and respect, or under other applicable domestic or
international law, nor to consent to such jurisdiction in any respect.

 

11

 

IN  WITNESS WHEREOF, this Guarantee is
executed as of 30 June 2009 in two counterparts drawn up in the English
and French languages.  Both language
versions shall be binding on the Parties, but interpretation differences shall
be resolved having regard to the fact that negotiations were conducted in
English.

 

[signatures follow]

 

The Belgian State

 

please
write by hand: “valid for 60.5/97 of USD sixteen billion nine hundred eighty
million”

 

 

	
   

  	
   

  
	
  Didier Reynders

  

Vice-Prime Minister and
Minister of Finance and Institutional Reforms

 

The French State

 

please
write by hand: “valid for 36.5/97 of USD sixteen billion nine hundred eighty
million”

 

 

	
   

  	
   

  

Christine Lagarde

Ministre de l’Economie, de l’Industrie et de l’Emploi

 

 

Agreed
and accepted:

FSA
Asset Management LLC

 

 

	
   

  	
   

  

Name:

Attorney-in-Fact

 

12

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