Exhibit 10.4
EXECUTION COPY
CONTRIBUTION AGREEMENT dated as of
November 22, 2006 (this “ Agreement ”),
between DEXIA S.A., a Belgian corporation (“ Parent
”), and FINANCIAL SECURITY ASSURANCE HOLDINGS LTD., a New
York corporation (“ Issuer ”).
WHEREAS, Parent is the ultimate
beneficial owner of a majority of the outstanding common stock of
Issuer; and
WHEREAS, Parent and Issuer desire to
enter into this agreement in connection with the issuance by Issuer
of $300,000,000 of its Junior Subordinated Debentures pursuant to
the Indenture (the “Debentures”) on the date
hereof;
NOW, THEREFORE, in consideration of
the mutual promises herein contained, the parties hereto agree as
follows:
SECTION
1.
Definitions . Capitalized terms used but not defined
herein shall have the respective meanings given to them in the
Indenture dated as of November 22, 2006 (the “
Indenture ”) between Issuer and The Bank of New York,
as indenture trustee (the “ Trustee ”), or the
Debentures.
SECTION
2.
Contribution . (a) If, at any time, (i) Issuer,
in accordance with the terms of the Indenture, optionally defers
interest on the Debentures for a period of five years or,
optionally defers interest on the Debentures and pays current
interest thereon prior to the fifth anniversary of the commencement
of the applicable Deferral Period, and therefore is required to
issue shares of its common stock or Qualifying Non-Cumulative
Perpetual Preferred Stock pursuant to Section 9 of the Debentures
and (ii) Issuer has attempted to issue shares of its
Qualifying Non-Cumulative Perpetual Preferred Stock but has not
raised sufficient Eligible Proceeds through the sale of its common
stock and Qualifying Non-Cumulative Perpetual Preferred Stock to
pay all deferred interest (including compounded amounts thereon),
then, subject to paragraph (b) of this Section 2, Parent shall,
upon receipt of a request of Issuer (an “ Issuance
Request ”), (1) prior to the date that Parent
obtains the Dexia Stock Issuance Board Approval, promptly use its
commercially reasonable efforts, taking into account its own
funding requirements, to subscribe for additional shares of
Issuer’s common stock for an amount equal to the Shortfall
Amount with any source of funds then available to it, and
(2) from and after the date that Parent obtains the Dexia
Stock Issuance Board Approval, promptly use its commercially
reasonable efforts to raise common equity providing Parent with net
proceeds (after underwriters’ or placement agents’
fees, commissions or discounts and other expenses relating to the
issuance) in an amount equal to the Shortfall Amount. If
Parent is successful in raising any such common equity pursuant to
the preceding clause (2), then Parent shall promptly subscribe for
additional shares of Issuer’s common stock with such net
proceeds. If, subsequent to Parent obtaining the Dexia Stock
Issuance Board Approval, Parent is not successful in raising any
such common equity pursuant to the preceding clause (2), then
Parent will not be required to subscribe for additional shares of
Issuer’s common stock or otherwise have any obligation to
contribute any of its
assets to Issuer under the preceding
clause (2), and specifically, Parent shall not be required to apply
any of its other assets to discharge its obligations under the
preceding clause (2).
(b) Notwithstanding the
foregoing Parent shall not be required to (i) issue common
equity or subscribe for shares of Issuer’s common stock to
the extent that the net proceeds of such issuance of common equity,
together with the net proceeds of all other common equity which has
been previously issued pursuant to Issuance Requests, would exceed,
in the aggregate, an amount equal to the Shortfall Amount,
(ii) use its commercially reasonable efforts to issue common
equity during the continuance of a Parent Market Disruption Event
or (iii) issue common equity or subscribe for shares of
Issuer’s common stock at any time after Parent has acquired
shares of Issuer’s common stock pursuant to this Agreement
for an aggregate purchase price equal to the Maximum Contribution
Amount.
(c) For purposes of this
Agreement, “ Dexia Stock Issuance Board Approval
” means the approval by Parent’s Board of Directors of
Parent’s obligation to raise common equity described under
clause (a)(2) of this Section 2.
(d) For purposes of this
Agreement, “ Parent Market Disruption Event ”
means the occurrence or existence of any of the following events or
sets of circumstances: (i) a material suspension of or limitation
on trading or on settlement procedures for transactions
in Parent’s common equity and/or preferred securities
through the primary stock exchange or exchanges on which such
securities are then traded or the principal central securities
depositary through which such securities are then cleared; (ii) a
prohibition or material restriction imposed by applicable law (or
by order, decree or regulation of any governmental entity, stock
exchange or self-regulating body having jurisdiction) on the
ability of Parent to issue or transfer its common equity or
preferred securities; (iii) Parent would be required to obtain the
consent or approval of its shareholders to issue common equity as
required by this Agreement, and Parent fails to obtain that consent
or approval notwithstanding its commercially reasonable efforts to
obtain that consent or approval; or (iv) Parent is subject to a
“blackout’’ period which, under applicable
securities laws or Parent
