Document:

EXECUTION COPY

Exhibit 10.2

 

CAPITAL COMMITMENT
AGREEMENT

entered into as of November 13, 2008

by and among

Dexia Holdings Inc.

Financial Security Assurance Holdings Ltd.

 

and

 

FSA
Asset Management LLC

 

 

CAPITAL  COMMITMENT
AGREEMENT

 

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

 

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

 

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

 

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

 

ARTICLE I
– DEFINITIONS

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 1.2.            Interpretation.

 

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

 

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

 

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

 

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ARTICLE II

CAPITAL COMMITMENT; AMOUNT

 

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

 

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

 

ARTICLE III

CONTRIBUTION PAYMENTS; SHARES

 

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

 

ARTICLE IV–
CONTRIBUTION RIGHT

 

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

 

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

 

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

 

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

 

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

 

ARTICLE V
– CONTRIBUTION CONDITIONS PRECEDENT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

ARTICLE VII- TERMINATION

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
VIII

COVENANTS

 

FSAH and FSAM each covenants and agrees as follows:

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE IX

MISCELLANEOUS

 

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

 

9

 

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

 

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

 

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

 

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

 

(a)          If to FSAH:

 

Financial Security
Assurance Holdings Ltd.

31 West 52nd
Street

New York, New York  10019

Attention:     Managing
Director – Surveillance

Facsimile:    (212) 339-3518

 

with a copy to:

 

Financial Security
Assurance Holdings Ltd.

31 West 52nd
Street

New York, New York  10019

Attention:     General
Counsel

Facsimile:     (212) 857-0541

 

(b)         If to FSAM:

 

FSA Asset Management LLC

31 West 52nd
Street

New York, New York  10019

Attention:     FP
– Operations

Facsimile:    (212) 893-2727

 

10

 

with a copy to:

 

FSA Asset Management LLC

31 West 52nd
Street

New York, New York  10019

Attention:     General
Counsel

Facsimile:     (212) 857-0541

 

(c)          If to DHI:

 

Dexia Holdings Inc.

c/o Financial Security
Assurance Holdings Ltd.

31 West 52nd
Street

New York, New York  10019

Attention:     General
Counsel

Facsimile:     (212) 857-0541

 

with a copy to:

 

Dexia Crédit Local

1, Passerelle des Reflets

Tour Dexia La Défense 2

92913 La Défense Cedex

France

Attention:     Back Office Operations

Facsimile:     33 1 58 58
7290

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

[Remainder of page intentionally
left blank]

 

12

 

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

 

	
   

  	
  DEXIA
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/  Alain
  Delouis

  
	
   

  	
   

  	
   

  	
  Name:   Alain
  Delouis

  
	
   

  	
   

  	
   

  	
  Title:    
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  FINANCIAL SECURITY ASSURANCE HOLDINGS LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/  Robert
  P. Cochran

  
	
   

  	
   

  	
   

  	
  Name:   Robert
  P. Cochran

  
	
   

  	
   

  	
   

  	
  Title:    
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  FSA ASSET MANAGEMENT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/  Guy
  Cools

  
	
   

  	
   

  	
   

  	
  Name:   Guy
  Cools

  
	
   

  	
   

  	
   

  	
  Title:    Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ 
  Bruce Stern

  
	
   

  	
   

  	
   

  	
  Name:   Bruce
  Stern

  
	
   

  	
   

  	
   

  	
  Title:    Managing
  Director

  

 

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

 

	
   

  	
   

  	
   

  	
  DEXIA
  CREDIT LOCAL

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/  Jean Le Naour

  	
   

  	
   

  	
  By

  	
  /s/  Didier Casas

  
	
  Name:     
  Jean Le Naour

  	
   

  	
  Name:   Didier
  Casas

  
	
  Title:      
   Chief Financial Officer

  	
   

  	
  Title:    General
  Secretary

  
						

 

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

 

13EXECUTION COPY

 

Exhibit 10.3

 

PLEDGE AND INTERCREDITOR
AGREEMENT

 

THIS PLEDGE AND INTERCREDITOR AGREEMENT (as amended, supplemented, or
otherwise modified from time to time, this “Agreement”), dated as of November 13,
2008, is entered into between Dexia Crédit Local (“DCL”), Dexia Bank
Belgium S.A. (“DBB”), Financial Security Assurance Inc. (“FSA”)
and FSA Asset Management, LLC (“FSAM”).

 

W
I  T  N  E  S  S  E  T  H:

 

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

 

WHEREAS, pursuant to a Revolving Credit Agreement dated June 30,
2008 between FSAM and DCL, as amended by the letter of assignment dated as of August 13,
2008 between DBB and DCL (the “Credit Agreement”), DBB and DCL (together
the “Lenders”) will provide financing to FSAM in the form of advances
requested by FSAM from time to time;

 

WHEREAS, the Lenders wish to obtain and FSAM wishes to grant a security
interest over the Collateral identified in the FSAM Insurance Agreement and FSA
wishes to consent to the foregoing grant of security;

 

WHEREAS, the Lenders and FSA wish to set forth the priorities of their
respective liens in the Collateral and the circumstances that will determine
such relative priority;

 

WHEREAS DCL and DBB have agreed that DCL will act as Security Agent on
behalf of itself and DBB under this Agreement;

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

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

 

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

 

 

purpose of enabling FSA Capital Management
and FSA Capital Markets to satisfy their respective Collateral Posting
Requirements.

 

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

 

“Creditor
Parties” means the Lenders and FSA.

 

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

 

 “FSA Capital Management” means FSA Capital Management
Services LLC.

 

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

 

“FSA Capital
Markets” means FSA Capital Markets Services LLC.

 

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

 

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

 

“Grant”
means, as to any asset or property, to mortgage, pledge, assign and grant a
security interest in such asset or property. A Grant of the Collateral or any
assigned document, instrument or agreement shall include all rights, powers and
options (but none of the obligations, except to the extent required by law), of
the Granting party thereunder or with respect thereto, including the immediate
and continuing right to claim, collect, receive and give receipt for all 

 

2

 

moneys payable thereunder and all income,
proceeds, products, rents and profits thereof, to give and receive notices and
other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the Granting party or
otherwise, and generally to do and receive anything which the Granting party is
or may be entitled to do or receive thereunder or with respect thereto.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Offer Procedures” means the
following procedures for giving DBB or DCL a right to match the terms of any
additional repurchase agreement financing obtained by FSAM:  (1) if FSAM intends to solicit
one or more quotations for repurchase agreement financing, FSAM shall give
notice (which may be oral notice) of such intention to DBB or DCL, with FSAM giving as
much advance notice of its solicitation of quotations as is reasonably practicable
and in any event contacting DBB or DCL substantially at the same time as FSAM
contacts other potential providers of financing, with such notice to (x) be
given at such notice details as DBB and DCL, 

 

3

 

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

 

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

 

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

 

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

 

“Senior Secured Obligations”
means all payment obligations of FSAM under the FSAM Insurance Agreement.

 

“Subordinated Liens” means
the Lenders’ Liens.

 

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

 

ARTICLE II

SECURITY INTEREST
PROVISIONS

 

SECTION 2.1.                                               Lenders’ Liens

 

In order to secure, as provided herein, the performance and
observance of each term, covenant, agreement and condition of FSAM contained in
the Credit Agreement or the Notes issued thereunder (whether in respect of
existing or future advances under the Credit 

 

4

 

Agreement) FSAM
hereby Grants a security interest in and collaterally assigns, transfers, sets
over, pledges and conveys to the Security Agent, on behalf of and for the
benefit of each Lender, all the right, title, interest and estate of FSAM,
whether now or hereafter acquired, in, to and under the Collateral as defined
in the FSAM Insurance Agreement; provided, however, that the Collateral shall
not include any Excluded Collateral (the “Lenders’ Liens”).

 

SECTION 2.2.                                               Notices.

 

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

 

SECTION 2.3                                                  Timing and Manner of Enforcement.

 

Notwithstanding
the Lenders’ Subordinated Liens, FSA shall have no duty to the Security Agent,
on behalf of the Lenders, as holder of Subordinated Liens as to the timing or
manner of FSA’s exercise of its remedies under the FSAM Insurance Agreement,
which shall be in the discretion of FSA, and pursuant to the terms of the FSAM
Insurance Agreement, failure by FSA to take any action shall not be deemed a
waiver by FSA of any rights thereunder. 
Furthermore, FSA shall not be liable to Security Agent, on behalf of the
Lenders, as holder of Subordinated Liens with respect to any action taken or
omitted to be taken by FSA with respect to the Collateral or any property
distributable on or by reason thereof, other than a failure to deliver any
remaining Collateral after the obligations of FSAM under the FSAM Insurance
Agreement have been satisfied in full and the Lien of FSA has been discharged
in accordance with the provisions thereof (the “Senior Lien Release Date”).  The Security Agent, on behalf of the Lenders,
shall have no right to take action to enforce the Subordinated Liens or
exercise any creditor’s remedies in respect thereof, notwithstanding occurrence
of an Event of Default under the Credit Agreement, unless the Senior Lien
Release Date has occurred or FSA has given its written consent with respect
thereto.

 

SECTION 2.4                                                  Amendments.

 

The Lenders agree
with FSA that the Lenders shall not enter into any amendment, modification or
supplement to the Credit Agreement without the prior written consent of FSA, in
its sole discretion.   FSA agrees with
the Lenders that FSA shall not enter into any amendment, modification or
supplement to the FSAM Insurance Agreement without the prior written consent of
the Lenders, in their sole discretion.

 

ARTICLE III

REPRESENTATIONS
AND WARRANTIES

 

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

 

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

 

5

 

registrations and
approvals necessary for the performance of its obligations under this
Agreement.

 

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

 

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

 

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

 

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

 

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

 

6

 

ARTICLE IV

SECURITY INTEREST PROVISIONS

 

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

 

SECTION 4.2.                                               Account Control Agreement.

 

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

 

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

 

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

 

7

 

8-106(d)(2) of the UCC) over the Securities
Account to the Security Agent, on behalf of the Lenders.

 

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

 

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

 

(a)                                  This Agreement creates a valid and
continuing security interest (as defined in the UCC) in the Collateral in favor
of the Security Agent, on behalf of the Lenders, which security interest is
prior to all other Liens (except for any Collateral Posting Lien, any Account
Bank Lien and the FSA Liens), and is enforceable as such as against creditors
of and purchasers from FSAM.  The
security interest of the Security Agent, on behalf of the Lenders, in the
Collateral shall, until payment in full of the obligations and indebtedness
secured hereunder and termination of this Agreement, be a perfected security
interest in the Collateral, senior to all other security interests in the
Collateral, except for any Collateral Posting Lien, any Account Bank Lien and
the FSA Liens.

 

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

 

(c)                                  FSAM has caused or will have
caused, within ten days of the date of this Agreement, the filing of all
appropriate financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Collateral granted to the Security Agent, on behalf of the Lenders,
hereunder (and shall provide a copy of each such statement, with filing numbers
noted thereon, to the Security Agent).

 

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

 

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

 

(f)                                    FSAM has received all consents and
approvals required by the terms of the Collateral to the transfer to the
Security Agent, on behalf of the Lenders, its interest and rights in the
Collateral hereunder.

 

8

 

(g)                                 FSAM has not consented to the
Account Bank’s complying with the entitlement orders or other instructions of
any Person other than FSA and the Security Agent, on behalf of the Lenders, as
applicable, in connection with the Securities Account.  All of the Collateral consisting of “security
entitlements” (within the meaning of the UCC) and “financial assets” (within
the meaning of the UCC) has been credited to the Securities Account.  The securities intermediary for the
Securities Account has agreed to treat all “Collateral” (for this purpose as
such term is defined in the Existing Control Agreement) credited to the
Securities Account as “financial assets” (within the meaning of the UCC).  The Securities Account is a “securities
account” (within the meaning of the UCC). 
FSAM acknowledges that the Account Bank as securities intermediary has
agreed, or will agree, upon execution of the Securities Account Control
Agreement pursuant to Section 4.2, to comply with all instructions
originated by either FSA or (in the event the Senior Lien Release Date has
occurred) the Security Agent, on behalf of the Lenders, as applicable, relating
to the Securities Account, without further consent by FSAM.

 

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

 

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

 

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

 

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

 

9

 

SECTION 4.5.                                               Release of Security Interest.

 

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

 

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

 

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

 

ARTICLE V

SUBORDINATION; REMEDIES

 

SECTION 5.1.                                               Subordination to Permitted Liens.

 

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

 

10

 

SECTION 5.2 Subordination
of Lenders’ Liens.

 

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

 

(b)           Following receipt of notice of an
Event of Default (as defined in the FSAM Insurance Agreement) from FSA and
prior to the Senior Lien Release Date, each of the Lenders agrees that it shall
exercise any rights, remedies or powers with respect to the Collateral granted
to it under this Agreement, as a secured party or otherwise, only with the prior
consent of FSA.

 

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

 

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

 

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

 

11

 

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

 

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

 

SECTION 5.5                 Remedies.  The
provisions of this Section 5.5 are subject to the provisions of Section 2.3
hereof.  If any Event of
Default under the Credit Agreement shall occur and be continuing, the Security
Agent may exercise, in addition to all other rights and remedies granted to
them under this Agreement and the Credit Agreement and in any other instrument
or agreement securing, evidencing or relating to the Lender Obligations, all
rights and remedies of a secured party under the Uniform Commercial Code.  Without limiting the generality of the
foregoing, the Security Agent may without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon FSAM or any other Person
(each and all of which demands, presentments, protests, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell (on a servicing released basis, at the Security Agent’s
option), lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels or as an entirety at public or
private sale or sales, at any exchange, broker’s board or office of the
Security Agent or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Security Agent shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in FSAM,
which right or equity is hereby waived or released. The Security Agent may, on
one or more occasions, postpone or adjourn any such sale by public announcement
at the time of such sale. The Security Agent shall give FSAM prior or
concurrent notice of any such postponement or adjournment.  FSAM further agrees, at the Security Agent’s
request, to assemble the Collateral and make it available to the Security Agent
at places which the Security Agent shall reasonably select, whether at FSAM’s
premises or elsewhere. The Security Agent shall apply the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Security Agent hereunder,
including without limitation reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Lender Obligations, in such order as the
Security Agent may elect, and only after such application and after the payment
by the Lenders of any other amount required or permitted by any provision of
law, including without limitation the Uniform Commercial Code, need the
Security Agent account for the surplus, if any, to FSA or FSAM.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.  FSAM shall remain liable
for any deficiency (plus accrued interest thereon in accordance with the terms
of the Lender Agreement) if the proceeds of any sale or other

 

12

 

disposition of the
Collateral are insufficient to pay the Lender Obligations and the fees and
disbursements of any attorneys employed by the Security Agent to collect such
deficiency.

 

SECTION 5.6                 Right to Initiate Judicial
Proceedings, etc. The provisions of this Section 5.6
are subject to the provisions of Section 2.3 hereof.  The Security Agent shall have the
right and power to institute and maintain such suits and proceedings as it may
deem appropriate to protect and enforce the rights vested in it and the Lenders
under the Lender Agreements.  From and
after the occurrence of an Event of Default the Security Agent may, either
after entry or without entry, proceed by suit or suits at law or in equity to
enforce such rights and to foreclose upon the Collateral and to sell all, or
from time to time any, of the Collateral under the judgment or decree of a
court of competent jurisdiction.

 

SECTION 5.7                 Remedies Not Exclusive. The provisions of this Section 5.7 are subject to
the provisions of Section 2.3 hereof. (a) No remedy
conferred upon or reserved to the Security Agent or the Lenders herein is
intended to be exclusive of any other remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by statute.

 

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

 

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

 

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

 

SECTION 5.8                 Security Agent’s Appointment
as Attorney-in-Fact

 

(a)           FSAM  hereby irrevocably constitutes and
appoints the Security Agent, on behalf of the Lenders, and any officer or agent
thereof, with full power of substitution, as its true

 

13

 

and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of FSAM, and
in the name of FSAM or in its own name, from time to time in their discretion,
for the purpose of, carrying out the terms of the Credit Agreement and this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of such Agreement; provided, that the Security Agent hereby agrees
that it shall not exercise its rights under this Section 5.8(a) until
(i) the occurrence of the Senior Lien Release Date and (ii) the
occurrence and continuation of any Event of Default under the Credit
Agreement.  Without limiting the
generality of the foregoing, FSAM  hereby gives the Security Agent the power
and right, on behalf of FSAM, without assent by, but with notice to, FSAM, if
the Senior Lien Release Date has occurred and an Event of Default has occurred
is continuing with respect to the Credit Agreement, to do the following:

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

SECTION 5.9                 Waiver of Certain Rights.
FSAM, to the extent it may lawfully do so, on behalf of itself and all who may
claim through or under it, including any and all subsequent creditors, vendees,
assignees and lienors, expressly waives and releases any, every and all rights
to presentment, demand, protest or any notice (to the extent permitted by
applicable law and except as specifically provided in this Agreement) of any
kind in connection with this Agreement or any Collateral or to have any
marshalling of the Collateral upon any sale, whether made under any power of
sale granted hereunder or any other agreement or instrument, or pursuant to
judicial proceedings or upon any foreclosure or any enforcement of this
Agreement or any other Lender Agreement and consents and agrees that all the
Collateral may at any such sale be offered and sold as an entirety or in lots
or otherwise as the Security Agent may determine or be directed hereunder.

 

SECTION 5.10               Limitation by Law. All the
provisions of this Article V are intended to be subject to all
applicable mandatory provisions of law which may be controlling in the premises
and to be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part or not entitled to be
recorded, registered, or filed under the provisions of any applicable law.

 

ARTICLE VI

MISCELLANEOUS
PROVISIONS

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.8.                Forum
Selection and Consent to Jurisdiction. 
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES SHALL BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.  EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR 

 

16

 

OUTSIDE OF THE
STATE OF NEW YORK.  EACH PARTY HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT.

 

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

 

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

 

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

 

17

 

IN WITNESS WHEREOF, the parties
have caused this Agreement to be duly executed and delivered by its officer
thereunto as of November 13, 2008.

 

	
  DEXIA CRÉDIT LOCAL

  	
   

  	
  FINANCIAL SECURITY ASSURANCE INC.

  
	
   

  	
   

  	
   

   

  
	
  By:

  	
   

  	
  /s/ Jean Le Naour

  	
   

  	
  By:

  	
   

  	
  /s/ Robert P. Cochran

  
	
  Name:

  	
       Jean Le Naour

  	
   

  	
  Name:

  	
       Robert P. Cochran

  
	
  Title:

  	
     Chief Financial Officer

  	
   

  	
  Title:

  	
    Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Didier Casas

  	
   

  	
   

  	
   

  
	
  Name:

  	
      Didier Casas

  	
   

  	
   

  	
   

  
	
  Title:

  	
     General Secretary

  	
   

  	
   

  	
   

  

 

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

 

	
  DEXIA BANK BELGIUM S.A.

  	
   

  	
  FSA ASSET MANAGEMENT LLC

  
	
   

  	
   

  	
   

   

  
	
  By:

  	
   

  	
  /s/ Ann De Roeck

  	
   

  	
  By:

  	
   

  	
  /s/ Guy Cools

  
	
  Name:

  	
       Ann De Roeck

  	
   

  	
  Name:

  	
       Guy Cools

  
	
  Title:

  	
     Secretary General

    Member of the Management Board

  	
   

  	
  Title:

  	
       Managing Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Jean-Francois Martin

  	
   

  	
  By:

  	
   

  	
  /s/ Bruce Stern

  
	
  Name:

  	
       Jean-Francois Martin

  	
   

  	
  Name:

  	
       Bruce Stern

  
	
  Title:

  	
     Member of the Management Board

  	
   

  	
  Title:

  	
       Managing Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

18

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