VOTING AGREEMENT
VOTING AGREEMENT, dated as of March 14, 2000 (this
"Agreement"), by and between Dexia Credit local de France S.A. (the "Acquiring
Party") and the shareholder of Financial Security Assurance Holdings Ltd. (the
"Company") identified as the signatory hereto (the "Shareholder").
WHEREAS, the Acquiring Party is prepared to enter into an
agreement and plan of merger dated as of March 14, 2000 with the Company (the
"Merger Agreement") simultaneously with the execution of this Agreement;
WHEREAS, the Acquiring Party would not enter into the Merger
Agreement unless the Shareholder enters into this Agreement;
WHEREAS, the Shareholder will benefit directly and
substantially from the Merger Agreement; and
WHEREAS, the Shareholder has, after consultation with the
Company as to the process (and the results thereof) the Company has undertaken
regarding a possible sale of the Company and the nature of the Acquiring Party's
proposal, advised the Board of Directors of the Company that it desires that the
Company and the Board of Directors accept the Acquiring Party's proposal
embodied in the Merger Agreement, terminate any further activities with third
parties regarding a sale of the Company and approve and adopt the Merger
Agreement and authorize the execution and delivery thereof.
NOW, THEREFORE, in consideration of the Acquiring Party's
entry into the Merger Agreement, the Shareholder agrees with the Acquiring Party
as follows:
1. The Shareholder represents and warrants that (i) it owns
(of record and beneficially) and controls, or controls with exclusive power to
vote, the number and class of shares of the Company set forth on the signature
page hereof (including any shares acquired on the conversion of any other
shares, the "Owned Shares") free from any lien, encumbrance or restriction
whatsoever and with full power to vote the Owned Shares without the consent or
approval of any other person, (ii) this Agreement has been duly authorized,
executed and delivered by it and constitutes the legally binding obligation of
the Shareholder, enforceable in accordance with its terms, and (iii) the
execution, delivery and performance by the Shareholder of this Agreement does
not and will not (a) conflict with any provision of its certificate or articles
of incorporation or by-laws or any similar corporate document, or any agreement,
indenture or instrument to which it is a party or (b) require the consent or
approval of any governmental authority having jurisdiction over
-1-
it or of any third party. For all purposes of this Agreement, Owned Shares shall
include any shares of the Company as to which beneficial ownership is acquired
after the execution hereof.
2. The Shareholder represents and warrants that the agreements
listed in Appendix I to this Agreement are the only written agreements or
arrangements between the Shareholder (or any subsidiary of the Shareholder) and
the Company (or any subsidiary of the Company) relating to any capital stock of
the Company (or any Subsidiary of the Company) (the "Covered Agreements").
3. The Shareholder irrevocably and unconditionally agrees that
it will (a) vote all of the Owned Shares in favor of the Merger Agreement and
the merger provided for therein (the "Merger") at any meeting or meetings of the
Company's shareholders called to vote upon the Merger Agreement and the Merger
and (b) will not vote such shares (or otherwise provide a proxy, consent, voting
agreement or similar arrangement with respect thereto) in favor of any other
Acquisition Proposal as defined below, provided that, in the case of each of
clauses (a) and (b), the terms of the Merger Agreement shall not have been
amended in a manner that adversely affects the Shareholder in a material way
(with a change in the amount of the merger consideration being material).
4. The Shareholder agrees that it will not (a) directly or
indirectly, sell, transfer, pledge, assign or otherwise dispose of (other than
by exercising any conversion right), or enter into any contract, option,
commitment or other arrangement or understanding with respect to the sale,
transfer, pledge, assignment or other disposition of, any of the Owned Shares,
unless it receives (i) a proxy, in form and substance substantially similar to
the provisions of Section 3 hereof, irrevocable so long as this Agreement is
effective, to vote or not to vote such Owned Shares as provided in Section 3 of
this Agreement, and the Shareholder will so vote or not vote such Owned Shares
and (ii) an agreement identical in all material respects to this Agreement
executed by the buyer of the Owned Shares the subject thereof; (b) exercise any
appraisal rights available to such Shareholder pursuant to Section 910 of the
New York Business Corporation Law in connection with the Merger; and (c) take
any action or omit to take any action which would prohibit, prevent or preclude
Shareholder from performing its obligations under this Agreement.
5. The Shareholder agrees, at the request of the Acquiring
Party, (i) to terminate, or cause the termination of, any or all Covered
Agreements (other than the rights of the holders of any shares of preferred
stock under the Company's certificate of incorporation) designated by the
Acquiring Party immediately prior to, and subject to, the effectiveness of the
Merger and (ii) to execute, or cause the execution of, any other documents or
instruments necessary to effect the foregoing termination. In addition,
effective upon consummation of the Merger, the Shareholder, for itself and on
behalf of
-2-
any subsidiary, hereby releases the Company and any of its subsidiaries from any
obligations they may have under any Covered Agreement and any claims the
Shareholder or any of its subsidiaries may have with respect to the Covered
Agreements.
6. The Shareholder agrees to take all reasonable actions and
make such reasonable efforts to consummate the Merger and effect the other
transactions contemplated by the Merger Agreement, provided that the terms of
the Merger Agreement shall not have been amended in a manner that adversely
affects the Shareholder in a material way (with a change in the amount of the
merger consideration being material).
7. The Shareholder agrees to waive any pre-emptive right that
it may have with respect to capital stock of the Company pursuant to any of the
transactions contemplated by the Merger Agreement or any voting agreement
similar to this Agreement and consents to the transactions contemplated hereby
and thereby.
8. The Shareholder shall not, nor shall it permit any of its
subsidiaries to, nor shall it permit any of its or its Subsidiaries' directors
or officers to, and shall use its commercially reasonable efforts to cause its
employees, agents and representatives (including, without limitation, any
investment banker, financial advisor, attorney or accountant retained by it or
any of its subsidiaries or affiliates) not to (i) solicit, initiate or encourage
(including by way of furnishing information), or knowingly take any other action
designed to facilitate, the making of any proposal which constitutes an
Acquisition Proposal (as defined in the Merger Agreement) or (ii) participate in
any discussions or negotiations (including by way of furnishing information)
regarding any Acquisition Proposal; provided, however, that this Section 8 shall
not be deemed to prohibit any person acting in such person's capacity as a
director or officer of the Company from engaging in any such activities to the
extent the Company may so engage without violating the Merger Agreement.
9. The Shareholder agrees that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed by
it in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Acquiring Party shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement by the Shareholder to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which it is entitled at law or in equity and that the Shareholder
waives the posting of any bond or security in connection with any proceeding
related thereto.
10. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original. This
Agreement shall become effective
-3-
when one counterpart signature page has been signed by each party hereto and
delivered to the other party (which delivery may be by facsimile).
11. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as it is enforceable.
12. The Shareholder agrees to execute and deliver all such
further documents, certificates and instruments and take all such further
reasonable action as may be necessary or appropriate, in order to consummate the
transactions contemplated hereby.
13. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to principles
of conflict of laws), except to the extent that the Federal laws of the United
States govern the matters set forth herein.
14. To the extent that the Shareholder is ultimately
controlled by another entity, such entity is identified below and, by its duly
authorized execution and delivery of this Agreement in the space provided for
below, hereby agrees (a) to be bound by this Agreement as if it were the
Shareholder and (b) to cause the Shareholder to perform its obligations
hereunder.
15. The Shareholder agrees not to exercise any registration
rights or similar rights regarding the Company's shares.
16. This Agreement shall terminate upon the earlier to occur
of (a) the date of termination of the Merger Agreement and (b) the effective
time of the Merger, provided that termination shall not relieve a breaching
party of liability for any breach prior to the termination.
17. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
-4-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
DEXIA CREDIT LOCAL DE FRANCE S.A.
By:
Name:
Title:
WHITE MOUNTAINS SERVICES CORPORATION,
a subsidiary of
WHITE MOUNTAINS INSURANCE GROUP, LTD.
By:
Name:
Title:
WHITE MOUNTAINS INSURANCE GROUP, LTD.,
parent of
WHITE MOUNTAINS SERVICES CORPORATION
By:
Name:
Title:
Number of "Owned Shares" of Common Stock of the Company: 6,943,316
Number of "Owned Shares" of Preferred Stock of the Company: 2,000,000
-5-
WHITE MOUNTAINS PROPERTIES (BARBADOS)
SRL
a subsidiary of
WHITE MOUNTAINS INSURANCE GROUP, LTD.
By:
Name:
Title:
-6-
