AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1998
REGISTRATION NO. 333-43729
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 3 TO
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
FGIC SECURITIES PURCHASE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3633082
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
115 BROADWAY
NEW YORK, NEW YORK 10006
(212) 312-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Ann C. Stern
FGIC SECURITIES PURCHASE, INC.
115 Broadway
New York, New York 10006
(212) 312-3000
(Name, address, including zip code, and telephone number,
including area code, if agent for service)
Copy to:
MICHAEL F. TAYLOR, ESQ.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048-0557
- ------------------------------------------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
- ------------------------------------------------------------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities being offered only in connection
with dividend or interest reinvestment plans, check the following box. /X/
This Registration Statement also covers Liquidity Facility Obligations
issued in connection with any remarketing of Securities purchased by the
Registrant or its affiliates.
<TABLE>
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CALCULATION OF REGISTRATION FEE
- -------------------------------- ------------------ ---------------- ------------------- ------------------
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED MAXIMUM MAXIMUM REGISTRATION
REGISTERED AGGREGATE AGGREGATE FEE**
PER UNIT* OFFERING PRICE*
================================ ================== ================ =================== ==================
<S> <C> <C> <C> <C>
Liquidity Facility Obligations $1,000,000,000 100% $1,000,000,000 $295,000
================================ ================== ================ =================== ==================
</TABLE>
* Estimated solely for the purpose of determining the registration fee.
** Previously paid.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
$1,000,000,000
PRINCIPAL AMOUNT PLUS INTEREST
LIQUIDITY FACILITY OBLIGATIONS
OF
FGIC SECURITIES PURCHASE, INC.
FGIC Securities Purchase, Inc. ("FGIC-SPI" or the "Company") intends
to offer from time to time, in connection with the issuance by municipal
authorities of adjustable or floating rate debt securities (the "Securities"),
its obligations (the "Obligations") under one or more liquidity facilities (the
"Liquidity Facilities"). The Obligations will not be sold separately from the
Securities, which will be offered pursuant to a separate prospectus or offering
statement. The Obligations will not be severable from the Securities and may
not be separately traded. This Prospectus, appropriately supplemented, may also
be delivered in connection with any remarketing of Securities purchased by FGIC
Securities Purchase, Inc. or its affiliates.
The Obligations will be issued from time to time to provide liquidity
for certain adjustable or floating rate Securities issued by municipal issuers.
The specific terms of the Obligations and the Securities to which they relate
will be set forth in a prospectus supplement to the Prospectus (a "Prospectus
Supplement"). Each issue of Obligations may vary, where applicable, depending
upon the terms of the Securities to which the issuance of Obligations relates.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURI-
TIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS AND PROSPECTUS SUPPLE-
MENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is December 30, 1998.
<PAGE>
The information contained in this Prospectus has been obtained from
FGIC Securities Purchase, Inc. This Prospectus is submitted in connection with
the future sale of securities as referred to herein, and may not be reproduced
or used, in whole or in part, for any other purposes.
No dealer, salesman or any other person has been authorized by
FGIC-SPI to give any information or to make any representation, other than as
contained in this Prospectus or a Prospectus Supplement, in connection with the
offering described herein, and if given or made, such other information or
representation must not be relied upon as having been authorized by any of the
foregoing. This Prospectus does not constitute an offer of any securities other
than those described herein or a solicitation of an offer to buy in any
jurisdiction in which it is unlawful for such person to make such offer,
solicitation or sale.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information can be inspected and
copied at Room 1024 at the Office of the Commission, 450 Fifth Street N.W.,
Washington, D.C. 20549, as well as at the Regional Offices of the Commission at
Northwestern Atrium Center, 500 W. Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and Seven World Trade Center, 13th Floor, New York, New
York 10048 and copies can be obtained by mail from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission also maintains an Internet web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The address of
that site is http: //www.sec.gov. FGIC-SPI does not intend to deliver to
holders of its obligations offered hereby an annual report or other report
containing financial information.
This Prospectus and the applicable Prospectus Supplement constitute a
prospectus with respect to the Obligations of FGIC-SPI under the Liquidity
Facilities to be issued from time to time by FGIC-SPI in support of the
Securities. It is not anticipated that registration statements with respect to
the Securities issued by municipal authorities will be filed under the
Securities Act of 1933, as amended.
<PAGE>
----------------
DOCUMENTS INCORPORATED BY REFERENCE
There is hereby incorporated in this Prospectus by reference (i) the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 and
(ii) the Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1998, June 30, 1998 (including the Form 10-Q/A) and September
30, 1998 (including the Form 10-Q/A) (File No. 0-19564).
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the Obligations and the Securities shall be
deemed to be incorporated in this Prospectus by reference and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of such person, a copy of any or all of the documents referred to above
which have been or may be incorporated in this Prospectus by reference, other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents. Requests for such copies should
be directed to Corporate Communications Department, FGIC Corporation, 115
Broadway, New York, New York 10006, Telephone No. (212) 312-3000.
<PAGE>
SUMMARY
The proposed structure will be utilized to provide liquidity through a
"put" mechanism for floating or adjustable rate securities issued by municipal
authorities. Such securities typically include a tender feature that permits
broker-dealers to establish interest rates on a periodic basis which would
enable the securities to be remarketed at par and that provides a secondary
market liquidity mechanism for holders desiring to sell their securities. Such
securities will be remarketed pursuant to an agreement under which the
broker-dealers will be obligated to use "best efforts" to remarket the
securities. In the event that they cannot be remarketed, FGIC-SPI will be
obligated, pursuant to a standby purchase agreement with the issuer,
remarketing agent, tender agent or trustee of the securities, to purchase
unremarketed securities, from the holders desiring to tender their securities
(the "put option"). This facility will assure bondholders of liquidity for
their securities even when market conditions preclude successful remarketing.
The proposed structure may also be used in connection with concurrent
offerings of variable rate demand securities ("VRDNs") and convertible inverse
floating rate securities ("INFLOs") issued by municipalities. VRDNs and INFLOs
are municipal derivative securities pursuant to which (i) the interest rate on
the VRDNs is a variable interest rate which is re-set by the remarketing agent
from time to time (not to exceed a stated maximum rate) (the "VRDN Rate") and
(ii) the interest rate on the INFLOs is concurrently re-set at a rate equal to
twice a specified Linked Rate minus the fee charged by FGIC-SPI for the
Liquidity Facility. The owners of VRDNs have the optional right to tender their
VRDNs to the issuer for purchase and, in the event the remarketing agent does
not successfully remarket the tendered VRDNs, FGIC-SPI is obligated to pay the
purchase price therefor to such owners pursuant to the terms of its liquidity
facility.
If an owner of INFLOs desires a fixed rate of interest not subject to
fluctuation based on the inverse floating rate equation described above, such
owner may elect to purchase from VRDN holders an amount of VRDNs equal to the
principal amount of INFLOs for which such INFLO owner desires a fixed rate of
interest. The net effect of such purchase is to "link" an equal principal
amount of VRDNs and INFLOs and thereby set a fixed interest rate on the
combined securities. If the owner of such combined securities so elects, the
owner may "de-link" his or her VRDNs and INFLOs. The remarketing agent will
then remarket the VRDNs at a re-set interest rate and the INFLOs retained by
the de-linking owner will again continue to vary and to be re-set whenever the
interest rate of the VRDNs are re-set. An INFLOs owner may also elect to
permanently link his or her INFLOs with an equal principal amount of VRDNs and
thereby permanently fix the interest rate on the combined securities to their
stated maturity; once permanent linkage is effected, no subsequent de-linkage
is permitted.
Until such time as VRDNs are permanently linked to INFLOs, the VRDNs
will remain subject to remarketing in the manner noted above and FGIC-SPI will
remain obligated to purchase unremarketed VRDNs in connection with the optional
right of holders to tender their VRDNs for purchase.
The fees for providing the liquidity mechanism will be paid by the
issuer or other entity specified in the applicable Prospectus Supplement,
typically over the life of the liquidity agreement or, in the case of VRDNs,
until such time as a VRDN is permanently linked with an INFLO. Except as
otherwise provided in a Prospectus Supplement, in order to obtain funds to
purchase unremarketed securities, FGIC-SPI will enter into one or more standby
loan agreements with General Electric Capital Corporation (the "Standby
Lender") under which the Standby Lender will be irrevocably obligated to lend
funds to FGIC-SPI as needed to purchase securities for which the put option has
been exercised. Except as otherwise provided in a Prospectus Supplement, the
standby purchase agreement between FGIC-SPI and the trustee, issuer or other
specified entity will provide that without the consent of the issuer and the
trustee for the security holders, FGIC-SPI will not agree or consent to any
amendment, supplement or modification of the related standby loan agreement,
nor waive any provision thereof, if such amendment, supplement, modification or
waiver would materially adversely affect the issuer or other specified entity,
or the security holders. Except as otherwise provided in a Prospectus
Supplement, the obligations of FGIC-SPI under the standby purchase agreement
may only be terminated upon the occurrence of certain events including
non-payment of fees due to the Company from the issuer, the taking of any state
action which would impair the ability of the issuer or other specified entity
to comply with the covenants and obligations under the indenture pursuant to
which the Securities are issued (the "Indenture") or under a related municipal
financing agreement or any right or remedy of the Company or the holder of
Securities to enforce such covenants and obligations, the failure of the issuer
to comply with certain covenants set forth in the standby purchase agreement,
cross-default, default or insolvency on the part of the issuer or other
specified entity, actual or asserted invalidity or unenforceability of the
standby purchase agreement or any related document (including the Indenture and
the Securities), declaration of a moratorium affecting the Securities, or
payment defaults on the Securities or under a related municipal financing
agreement. Any such termination will be effective as of the close of business
on the 30th day following notice thereof by FGIC-SPI, or such later date as may
be specified in the applicable Prospectus Supplement. In the event of a
termination of the obligations of FGIC-SPI under the standby purchase
agreement, the Securities will be subject to a mandatory tender. Prior to such
time, and for at least 30 days following notice of termination by FGIC-SPI,
security holders will have the option to tender their Securities, all as set
forth in the applicable Prospectus Supplement.
The above structure is intended to receive a rating of "AAA" or the
equivalent from the rating agencies and to provide public issuers with the
lowest cost of financing. There can be no assurances, however, that such
ratings will be maintained.
THE COMPANY
FGIC-SPI was incorporated in 1990 in the State of Delaware. All
outstanding capital stock of FGIC-SPI is owned by FGIC Holdings, Inc., a
Delaware corporation.
The business of FGIC-SPI consists and will consist of providing
liquidity for certain adjustable and floating rate Securities issued by
municipal authorities or other issuers through Liquidity Facilities. The
securities are typically remarketed by registered broker-dealers at par on a
periodic basis to establish the applicable interest rate for the next interest
period and to provide a secondary market liquidity mechanism for security
holders desiring to sell their securities. Pursuant to standby purchase
agreements with issuers of the securities, FGIC-SPI will be obligated to
purchase unremarketed securities from the holders thereof who voluntarily or
mandatorily tender their Securities for purchase. In order to obtain funds to
purchase the Securities, FGIC-SPI will enter into one or more standby loan
agreements with the Standby Lender under which the Standby Lender will be
irrevocably obligated to lend funds as needed to FGIC-SPI to purchase
Securities as required.
FGIC-SPI's principal executive offices are located at 115 Broadway,
New York, New York 10006, Telephone No. (212) 312-3000.
THE LIQUIDITY FACILITIES
The Obligations will rank equally with all other general unsecured and
unsubordinated obligations of FGIC-SPI. The Obligations are not issued pursuant
to an indenture.
Registered owners of the Securities will be entitled to the benefits
and subject to the terms of the applicable Liquidity Facility as specified in
the Prospectus Supplement. Pursuant to the Liquidity Facilities, FGIC-SPI will
agree to make available to a specified intermediary, upon receipt of an
appropriate demand for payment, the purchase price for the Securities to which
such Liquidity Facility relates. The obligation of FGIC-SPI under each
Liquidity Facility will be sufficient to pay a purchase price equal to the
principal of the Security to which such facility relates, premium, if any, and
up to a specified amount of interest at a specified rate set forth in the
applicable Prospectus Supplement. The Liquidity Facilities are expected to have
a shorter duration than that of the Securities to which they relate, and are
subject to extension or renewal. The duration of the applicable Liquidity
Facility and the term of the related Securities will be set forth in the
applicable Prospectus Supplement.
THE STANDBY LOAN AGREEMENT
In order to obtain funds to fulfill its obligations under the
Liquidity Facilities, FGIC-SPI will enter into one or more Standby Loan
Agreements with the Standby Lender under which the Standby Lender will be
irrevocably obligated to lend funds to FGIC-SPI as needed to purchase the
Securities to which the applicable Liquidity Facility relates. Each Standby
Loan Agreement will have the terms set forth in the applicable Prospectus
Supplement. It is anticipated that each loan under a Standby Loan Agreement
will be in an amount not exceeding the purchase price for the Securities
tendered by the holders which will represent the outstanding principal amount
of such securities, premium, if any, and accrued interest thereon for a
specified period. The proceeds of each loan shall be used only for the purpose
of paying the purchase price for tendered Securities. It is not anticipated
that the Standby Lender will guarantee the Securities to which its Standby Loan
Agreement relates or FGIC-SPI's obligation under any Standby Purchase
Agreement.
PLAN OF DISTRIBUTION
The Obligations will not be sold separately from the Securities, which
will be offered pursuant to a separate prospectus, official statement or
offering circular.
In connection with the offering of the Obligations pursuant to this
Prospectus, any underwriter or agent participating in the offering may
overallot or effect transactions which stabilize or maintain the market price
of the securities at a level above that which might otherwise prevail in the
open market. Such stabilizing, if commenced, may be discontinued at any time.
LEGAL MATTERS
The legality of the Obligations has been passed upon for FGIC-SPI by
Brown & Wood LLP, One World Trade Center, New York, New York 10048.
EXPERTS
The financial statements of FGIC Securities Purchase, Inc. as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, appearing in FGIC Securities Purchase, Inc.'s 1997
Annual Report (Form 10-K) have been audited by KPMG Peat Marwick LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
<PAGE>
No dealer, salesman or any other individual has been authorized to
give any information or to make any representations other than those contained
in this Prospectus in connection with the offer made by this Prospectus, and,
if given or made, such information or representations must not be relied upon
as having been authorized by FGIC-SPI. This Prospectus does not constitute an
offer or solicitation by anyone in any jurisdiction in which an offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
TABLE OF CONTENTS
Page
Available Information...............................2
Documents Incorporated By Reference.................3
Summary.............................................4
The Company.........................................5
The Liquidity Facilities............................6
The Standby Loan Agreement..........................6
Plan of Distribution................................7
Legal Matters.......................................7
Experts.............................................7
$1,000,000,000
principal amount
plus interest and premium,
if any
LIQUIDITY FACILITY OBLIGATIONS
issued by
FGIC Securities
Purchase, Inc.
PROSPECTUS
December 30, 1998
<PAGE>
[FORM OF PROSPECTUS SUPPLEMENT]
[The following is an example of the prospectus supplement which we
will issue whenever we issue Obligations under the accompanying prospectus. The
final terms of the Obligations, which may be different from the terms described
in this prospectus supplement, will be specified in this applicable prospectus
supplement.]
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 30, 1998)
$--------------
PRINCIPAL AMOUNT PLUS INTEREST
LIQUIDITY FACILITY
OF
FGIC SECURITIES PURCHASE, INC.
IN SUPPORT OF
[NAME OF ISSUER]
[NAME OF BONDS]
-------------------
LIQUIDITY FACILITY: We are providing a liquidity facility for the
Bonds described below (the "Liquidity Facility"). The Liquidity Facility will
expire on ________________ unless it is extended or terminated sooner in
accordance with its terms.
TERMS OF THE BONDS: [The terms of the underlying Bonds to which the
Obligations relate will be summarized on the cover of the applicable prospectus
supplement.]
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
Our obligations under the Liquidity Facility (the "Obligations") are
not being sold separately from the Bonds. The Bonds are being remarketed under
a separate disclosure document. The Obligations may not be separately traded.
This prospectus supplement and the accompanying prospectus, appropriately
supplemented, may also be delivered in connection with any remarketing of Bonds
purchased by us.
[UNDERWRITERS]
The date of this prospectus supplement is [month/date/year].
<PAGE>
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TABLE OF CONTENTS
Page
<S> <C>
INTRODUCTION................................................................................................S-
DESCRIPTION OF THE BONDS....................................................................................S-
THE LIQUIDITY FACILITY......................................................................................S-
THE STANDBY LOAN AGREEMENT; GE CAPITAL......................................................................S-
EXPERTS.....................................................................................................S-
</TABLE>
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
INTRODUCTION
We are providing you with this prospectus supplement to furnish
information regarding our obligations under a Liquidity Facility in support of
$________ aggregate principal amount of [TITLE OF BONDS] which [NAME OF ISSUER]
(the "Issuer") issued on or about __________________ (the "Bonds"). We [have
entered] [will enter] into a Standby Bond Purchase Agreement (the "Liquidity
Facility") with [Issuer/Trustee/other specified entity], pursuant to which we
[are] [will be] obligated under certain circumstances to purchase unremarketed
Bonds from the holders optionally or mandatorily tendering their Bonds for
purchase. In order to obtain funds to purchase the Bonds, we [have entered]
[will enter] into a Standby Loan Agreement with General Electric Capital
Corporation ("GE Capital") under which GE Capital [is] [will be] irrevocably
obligated to lend funds to us as needed to purchase Bonds. Our obligations
under the Liquidity Facility will expire on ________________ unless the
Liquidity Facility is extended or terminated sooner in accordance with its
terms.
DESCRIPTION OF THE BONDS
[THE APPLICABLE PROSPECTUS SUPPLEMENT WILL SET FORTH A DETAILED
DESCRIPTION OF THE UNDERLYING BONDS, INCLUDING A DESCRIPTION OF INTEREST
PROVISIONS, FORM, DENOMINATION AND TRANSFER PROVISIONS, REDEMPTION AND TENDER
PROVISIONS AND ANY OTHER TERMS APPLICABLE TO THE BONDS.]
THE LIQUIDITY FACILITY
The Obligations will rank equally with all of our other general
unsecured and unsubordinated obligations. The Obligations are not issued under
an indenture. As of the date of this prospectus supplement, we have
approximately $____ billion amount of obligations currently outstanding,
including the Obligations we are issuing under this prospectus supplement.
Owners of the Bonds to which the Obligations relate will be entitled
to the benefits and will be subject to the terms of the Liquidity Facility.
Under the Liquidity Facility, we agree to make available to a specified
intermediary, upon receipt of an appropriate demand for payment, the purchase
price for the Bonds. Our obligation under the Liquidity Facility will be
sufficient to pay a purchase price equal to the principal of and up to __ days'
interest on the Bonds at an assumed rate of __% per year.
TERMINATION EVENTS
The scheduled expiration date of the Liquidity Facility is
[month/date/year]. The Indenture relating to the Bonds will specify certain
circumstances where we must purchase Bonds which a holder tenders for purchase
pursuant to an optional or mandatory tender, which have not been remarketed.
Under certain circumstances, we may terminate our obligation to purchase Bonds.
The following events would permit such termination:
[(a) (i) if the Issuer fails to pay any portion of the commitment fee
when due as set forth in the Standby Bond Purchase Agreement and the related
payment agreement, or (ii) if the Issuer fails to pay when due any other amount
it must pay under those documents and such failure continues for a specified
number of business days;
(b) if the Issuer fails to observe or perform any agreement contained
in the Standby Bond Purchase Agreement, the Indenture or a related municipal
financing agreement (or the applicable State takes any action which would
impair the power of the Issuer [or other specified entity] to so comply) and,
if such failure is a result of a covenant breach that the Issuer can remedy,
such failure continues for a specified number of days following written notice
of such failure from us to the Issuer;
(c) if any representation, warranty, certification or statement made
by the Issuer in the Standby Bond Purchase Agreement or any related document or
in any certificate, financial statement or other document the Issuer delivers
under those documents proves to have been incorrect in any material respect
when made;
(d) if the Issuer defaults in the payment of principal of or premium,
if any, or interest on any bond, note or other evidence of indebtedness that
the Issuer has issued, assumed or guaranteed, and such default is continuing;
(e) if the Issuer [or other specified entity] commences a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of its or any substantial part of its
property, or consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or makes a general assignment for the benefit of
creditors, or fails generally to pay its debts as they become due, or declares
a moratorium, or takes any action to authorize any of the foregoing;
(f) if an involuntary case or other proceeding is commenced against
the Issuer [or other specified entity] seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, and such involuntary case remains undismissed and unstayed for
a period of 60 days; or if an order for relief is entered against the Issuer
[or other specified entity] under the federal bankruptcy laws;
(g) if any material provision of the Standby Bond Purchase Agreement
or any related document for any reason whatsoever ceases to be a valid and
binding agreement of the Issuer [or other party thereto] or the Issuer [or
other party thereto] contests the validity or enforceability of any of these
documents; or
(h) if the Issuer [or other specified entity] does not pay when due
any amount payable under the Bonds or under a related municipal financing
agreement (regardless of whether the holders of the Bonds waive such failure).]
[YOU SHOULD BE AWARE THAT THE SPECIFIC TERMINATION EVENTS APPLICABLE
TO A LIQUIDITY FACILITY WILL BE SUBJECT TO NEGOTIATION IN EACH CASE. FOR THIS
REASON, OTHER OR DIFFERENT TERMINATION EVENTS THAN THOSE LISTED ABOVE MAY APPLY
TO THE SPECIFIC LIQUIDITY FACILITY. THE FINAL TERMINATION EVENTS UNDER EACH
LIQUIDITY FACILITY WILL BE SPECIFIED IN THE APPLICABLE PROSPECTUS SUPPLEMENT.]
Upon the occurrence of a termination event, we may deliver notice to
the Trustee, the Issuer, the Company, the Remarketing Agent and any applicable
paying agent or tender agent regarding our intention to terminate the Liquidity
Facility. In that case, the Liquidity Facility would terminate, effective at
the close of business on the ____ day following the date of the notice, or if
that date is not a business day, on the next business day. Before the time at
which termination takes effect, the Bonds will be subject to mandatory tender
for purchase from the proceeds of a drawing under the Liquidity Facility. The
termination of the Liquidity Facility, however, does not result in an automatic
acceleration of the Bonds.
The obligations of the Issuer under the Bonds are as described in the
Issuer's separate disclosure document relating to the Bonds.
THE STANDBY LOAN AGREEMENT; GE CAPITAL
In order to obtain funds to fulfill our obligations under the
Liquidity Facility, we [will enter] [have entered] into a standby loan
agreement with GE Capital (the "Standby Loan Agreement") under which GE Capital
will be irrevocably obligated to lend funds to us as needed to purchase Bonds.
The amount of each loan under the Standby Loan Agreement will be no greater
than the purchase price for tendered Bonds. The purchase price represents the
outstanding principal amount of the tendered Bonds and interest accrued on the
principal to but excluding the date we borrow funds under the Standby Loan
Agreement. Each loan will mature on a date specified in the Standby Loan
Agreement, which date will be set forth in the applicable prospectus
supplement. The proceeds of each loan will be used only for the purpose of
paying the purchase price for tendered Bonds. When we wish to borrow funds
under the Standby Loan Agreement, we must give GE Capital prior written notice
by a specified time on the proposed borrowing date. No later than a specified
time on each borrowing date (if GE Capital has received the related notice of
borrowing by the necessary time on such date), GE Capital will make available
the amount of the borrowing requested.
The Standby Loan Agreement will expressly provide that it is not a
guarantee by GE Capital of the Bonds or of our obligations under the Liquidity
Facility. GE Capital will not have any responsibility or incur any liability
for any act, or any failure to act, by us which results in our failure to
purchase tendered Bonds with the funds provided under the Standby Loan
Agreement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings to
fixed charges of GE Capital for the periods indicated:
[WE WILL PROVIDE THIS INFORMATION FOR THE PREVIOUS FIVE YEARS AND THE MOST
RECENT INTERIM PERIOD.]
For purposes of computing the consolidated ratio of earnings to fixed charges,
earnings consist of net earnings adjusted for the provision for income taxes,
minority interest and fixed charges. Fixed charges consist of interest and
discount on all indebtedness and one-third of rentals, which we believe
reasonably approximates the interest factor of such rentals.
WHERE YOU CAN FIND MORE INFORMATION REGARDING GE CAPITAL
GE Capital files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information GE Capital files at the SEC's public
reference rooms located at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661 and 7 World Trade Center, Suite 1300, New York, NY 10048. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. GE
Capital's SEC filings are also available to the public from commercial document
retrieval services and at the web site maintained by the SEC at
"http://www.sec.gov."
INCORPORATION OF INFORMATION REGARDING GE CAPITAL
The SEC allows us to "incorporate by reference" information into this
prospectus supplement, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus
supplement, except for any information superseded by information in this
prospectus supplement. This prospectus supplement incorporates by reference the
documents set forth below that GE Capital has previously filed with the SEC.
These documents contain important information about GE Capital, its business
and its finances.
DOCUMENT PERIOD
Annual Report on Form 10-K................ Year ended December 31, _____
[Quarterly Reports on Form 10-Q........... Quarters ended March 31, _____,
June 30, _____ and
September 30, _____]
EXPERTS
The financial statements and schedule of GE Capital and consolidated
affiliates as of December 31, ____ and _____, and for each of the years in the
three year period ended December 31, ____, appearing in GE Capital's Annual
Report on Form 10-K for the year ended December 31, ____, incorporated by
reference in this prospectus supplement, have been incorporated herein by
reference in reliance upon the report of _____________, independent certified
public accountants, incorporated by reference in this prospectus supplement,
and upon the authority of such firm as experts in accounting and auditing.
<PAGE>
$------------
principal amount plus interest
LIQUIDITY FACILITY OBLIGATIONS
issued by
FGIC SECURITIES PURCHASE, INC.
in support of
[NAME OF ISSUER]
[TITLE OF BONDS]
PROSPECTUS SUPPLEMENT
[month/day/year]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses expected to be incurred in
connection with the offering described in the Registration Statement. All
amounts are estimated except the registration fee.
Registration Fee..................................... $295,000
Printing and Engraving............................... 5,000
Legal Fees and Expenses.............................. 30,000
Rating Agency Fees.................................. 50,000
Miscellaneous Fees................................... 5,000
-----
Total....................................... $385,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides that in certain circumstances a corporation may indemnify directors
and officers against the reasonable expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by them in connection with any action, suit or proceeding by reason of
being or having been directors or officers, if such person shall have acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, except that if such action,
suit or proceeding shall be in the right of the corporation, indemnification
shall be provided only against reasonable expenses (including attorneys' fees)
and no such indemnification shall be provided as to any claim, issue or matter
as to which such person shall have been judged to have been liable to the
corporation, unless and to the extent that the Court of Chancery of the State
of Delaware or any other court in which the suit was brought shall determine
upon application that, in view of all of the circumstances of the case, such
person is fairly and reasonably entitled to indemnity. A corporation shall be
required to indemnify against reasonable expenses (including attorneys' fees)
any director or officer who successfully defends any such actions. The
foregoing statements are subject to the detailed provisions of Section 145 of
the General Corporation Law of the State of Delaware.
The By-Laws of FGIC-SPI provide that each person who at any time is or
shall have been a director, officer, employee or agent of FGIC-SPI, or is or
shall have been serving at the request of FGIC-SPI as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, and his or her heirs, executors and administrators, shall be
indemnified by FGIC-SPI in accordance with and to the full extent permitted by
the General Corporation Law of the State of Delaware.
<PAGE>
The directors of FGIC-SPI are insured under officers and directors
liability insurance policies purchased by FGIC Corporation. The directors,
officers and employees of FGIC-SPI are also insured against fiduciary
liabilities under the Employee Retirement Income Security Act of 1974.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Item 601 of Regulation
S-K Exhibit Reference
Number
4.1 -- Proposed Form of Standby Bond Purchase Agreement (Issuer).
4.2 -- Proposed Form of Standby Bond Purchase Agreement (Third Party
Fiduciary).
5 -- Opinion of Brown & Wood LLP re legality of securities.*
10 -- Proposed Form of Standby Loan Agreement between FGIC-SPI and a Standby
Lender.*
24 -- Consents of experts and counsel:
(a) Consent of KPMG Peat Marwick LLP
(b) Consent of Brown & Wood LLP*
(included in Exhibit 5).
25 -- Power of Attorney.*
- ----------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. (a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
b. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
c. To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the registrant pursuant to the registrant's Certificate of Incorporation,
Bylaws, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
4. That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
5. That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 (including the security rating
requirement which the Registrant reasonably believes will be met by the time of
sale) and has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereto duly authorized, in The City of New York,
State of New York, on December 30, 1998.
FGIC SECURITIES PURCHASE, INC.
By: /s/ Ann C. Stern
Ann C. Stern
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
By: /s/ Ann C. Stern President (principal December 30, 1998
Ann C. Stern executive officer),
Director
By: * Treasurer (principal December 30, 1998
Christopher Jacobs financial and
accounting officer),
Director
By: * Director December 30, 1998
A. Edward Turi, III
* By: /s/ Ann C. Stern
Ann C. Stern
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
The following exhibit is filed herewith:
4.1 -- Proposed Form of Standby Bond Purchase Agreement (Issuer).
4.2 -- Proposed Form of Standby Bond Purchase Agreement (Third Party
Fiduciary).
5 -- Opinion of Brown & Wood LLP re legality of securities.*
10 -- Proposed Form of Standby Loan Agreement between FGIC-SPI and a
Standby Lender.*
24 -- Consents of experts and counsel:
(a) Consent of KPMG Peat Marwick LLP
(b) Consent of Brown & Wood LLP*
(included in Exhibit 5).
25 -- Power of Attorney.*
--------------------------
* Previously filed
Exhibit 4.1
STANDBY BOND PURCHASE AGREEMENT
dated as of
between
and
FGIC SECURITIES PURCHASE, INC.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
Page
ARTICLE I
DEFINITIONS
<S> <C>
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Interpretation; Incorporation of Certain Definitions by Reference......................4
ARTICLE II
COMMITMENT TO PURCHASE BONDS
SECTION 2.01. Commitment to Purchase Bonds...........................................................4
SECTION 2.02. Method of Purchasing...................................................................4
SECTION 2.03. Termination of Commitment..............................................................5
SECTION 2.04. Sale of Bonds..........................................................................5
SECTION 2.05. Reduction of Available Commitment......................................................6
SECTION 2.06. Fees...................................................................................6
SECTION 2.07. Corporation Rate.......................................................................6
SECTION 2.08. General Provisions as to Payments......................................................6
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness............................................................7
SECTION 3.02. Conditions to Purchase.................................................................7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Existence..............................................................................8
SECTION 4.02. Authorization; Contravention...........................................................8
SECTION 4.03. Binding Effect.........................................................................8
SECTION 4.04. No Default.............................................................................8
SECTION 4.05. Litigation.............................................................................8
SECTION 4.06. No Sovereign Immunity..................................................................8
SECTION 4.07. Incorporation of Representations and Warranties by Reference...........................8
ARTICLE V
COVENANTS
SECTION 5.01. Covenants..............................................................................9
SECTION 5.02. No Amendment of GE Capital Agreement Without Consent of Issuer and Trustee;
Incorporation of Certain Covenants.....................................................9
SECTION 5.03. Other Liquidity Facilities............................................................10
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default.....................................................................10
SECTION 6.02. Termination Events....................................................................11
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices...............................................................................12
SECTION 7.02. No Waivers............................................................................12
SECTION 7.03. Expenses..............................................................................12
SECTION 7.04. Indemnification.......................................................................13
SECTION 7.05. Amendments and Waivers................................................................13
SECTION 7.06. Successors and Assigns................................................................13
SECTION 7.07. Term of this Agreement; Extension.....................................................13
SECTION 7.08. New York Law..........................................................................14
SECTION 7.09. Counterparts..........................................................................14
SECTION 7.10. Beneficiaries.........................................................................14
</TABLE>
<PAGE>
Exhibit A - Opinion of Counsel for the Issuer
Exhibit B - Notice of Purchase
Exhibit C - No-Remarketing Notice
Exhibit D - Default Rate Notice
Exhibit E - Termination Notice
<PAGE>
STANDBY BOND PURCHASE AGREEMENT
STANDBY BOND PURCHASE AGREEMENT dated as of ____________ , 199_
between _____________________________________________________ , a of the State
of New York (the "Issuer") and FGIC SECURITIES PURCHASE, INC., a Delaware
corporation (the "Corporation").
WHEREAS, the Issuer proposes to issue $ in principal amount of its
(the "Bonds") pursuant to a Bond Resolution, as amended and supplemented (the
"Authorizing Document");
WHEREAS, the Authorizing Document provides that the holders of the
Bonds shall have the option, upon the satisfaction of certain conditions, to
tender Bonds to the Issuer for purchase, upon notice to the Issuer or its
agents as provided for in the Authorizing Document and, under certain
circumstances, may be required to tender their Bonds for purchase thereof in
accordance with the terms of the Authorizing Document; and
WHEREAS, the Corporation has agreed to purchase such tendered Bonds
pursuant to the terms of this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Authority" means the .
"Authorized Representative" means any official of the Issuer duly
authorized and empowered to execute and deliver the Related Documents and all
certificates or other documents connected with the issuance, sale and
subsequent disposition of the bonds on behalf of the Issuer.
"Available Commitment" as of any day means the sum of the Available
Principal Commitment and the Available Interest Commitment, in each case as of
such day.
"Available Interest Commitment" initially means $ _______________ and
thereafter means such initial amount adjusted from time to time as follows: (a)
downward by an amount that bears the same proportion to such initial amount as
the amount of any reduction in the Available Principal Commitment pursuant to
the definition of "Available Principal Commitment" bears to the initial
Available Principal Commitment; and (b) upward by an amount that bears the same
proportion to such initial amount as the amount of any increase in the
Available Principal Commitment pursuant to the definition of "Available
Principal Commitment" bears to the initial Available Principal Commitment.
"Available Principal Commitment" initially means $ ________________
and thereafter means such initial amount adjusted from time to time as follows:
downward by the amount of any termination or reduction of the Available
Principal Commitment pursuant to Section 2.03 or Section 2.05; (b) downward by
the principal amount of any Bonds purchased by the Corporation pursuant to
Section 2.02; and (c) upward by the principal amount of any Bonds theretofore
purchased by the Corporation pursuant to Section 2.02, which are delivered for
sale by the Corporation pursuant to Section 2.04(b).
"Business Day" means a day (a) other than a day on which commercial
banks in The City of New York, New York are required or authorized by law or
executive order to close and (b) on which the New York Stock Exchange is not
closed.
"Commitment" means the Available Commitment calculated without regard
to clauses (b) and (c) of the definition of Available Principal Commitment and
the effect thereof on the amount of the Available Interest Commitment.
"Corporation Rate" means the rate of interest borne by the Bonds
owned by the Corporation as specified in Section 2.07 hereof.
"Default" means any condition or event which constitutes an Event of
Default or which, with the giving of notice or lapse of time or both, would,
unless cured or waived, become an Event of Default.
"Effective Date" means the date of the execution of this Agreement.
"Event of Default" has the meaning set forth in Section 6.01.
"Financing Agreement" means the Financing Agreement by and among the
City of New York, the Authority and the Issuer, dated as of , as amended and
supplemented.
"Fixed Rate" means a Flexible Interest Rate which, in accordance with
the terms of the Authorizing Document, shall remain in effect through the
maturity date of the Bonds bearing said Flexible Interest Rate.
"GE Capital Agreement" means the Standby Loan Agreement, dated as of
, by and between the Corporation and General Electric Capital Corporation.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"No-Remarketing Notice" has the meaning set forth in Section 6.01.
"Notice of Purchase" has the meaning specified in Section 2.02.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time as its prime rate.
"Purchase Date" has the meaning set forth in Section 2.02(d).
<PAGE>
"Purchase Contract" means the Purchase Contract between the Issuer
and the Underwriters named therein executed and delivered in connection with
the sale of the Bonds.
"Purchase Period" means, unless extended in accordance with Section
7.07 of this Agreement, the period from the later of _______________ and the
Effective Date to and including the earlier of (i) the Scheduled Termination
Date (or, if such date is not a Business Day, the Business Day immediately
preceding such date), (ii) the date on which all Bonds have been paid in full,
redeemed or defeased in accordance with the terms of such Bonds, (iii) two
Business Days following the date the Bonds are converted to a Fixed Rate in
accordance with the terms of such Bonds, and (iv) the date on which the
Commitment is terminated pursuant to Section 2.03.
"Purchase Price" shall mean the Tender Option Price.
"Related Documents" means the Authorizing Document, the Bonds, the
Remarketing Agreement, the Financing Agreement and all other agreements,
documents, certificates and instruments executed and delivered on the date
hereof in connection with the issuance, sale and delivery of the Bonds.
"Remarketing Agent" means ____________________ and its successors and
assigns under the Remarketing Agreement, including any substitute remarketing
agent appointed pursuant to such Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated the
date hereof between the Issuer and the Remarketing Agent.
"Scheduled Termination Date" means __________ or such later date
specified by the Corporation pursuant to an extension under Section 7.07.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of McGraw Hill, Inc., and its successors.
"Tender Agent" means the entity designated as such in the Authorizing
Document and its permitted successors and assigns.
"Termination Event" has the meaning set forth in Section 6.02.
"Termination Notice" has the meaning set forth in Section 2.03.
"Trustee" means the Trustee under the Authorizing Document.
"Variable Rate" means any interest rate that is subject to change
prior to maturity of the applicable Bonds in accordance with the Authorizing
Document.
SECTION 1.02. Interpretation; Incorporation of Certain Definitions by
Reference. All references to Bonds herein shall refer to Bonds in their
registered form or beneficial ownership interests in Bonds in book-entry form
registered with Cede & Co. or other nominee of the Depository Trust Company.
Each capitalized term used herein and not otherwise defined herein shall have
the meaning provided therefor in the Authorizing Document.
ARTICLE II
COMMITMENT TO PURCHASE BONDS
SECTION 2.01. Commitment to Purchase Bonds. The Corporation agrees,
on the terms and conditions contained in this Agreement, to purchase Bonds
bearing interest at a Variable Rate (and not defeased) that are tendered to the
Corporation from time to time pursuant to the Authorizing Document during the
Purchase Period at the Purchase Price. In accordance with Section 2.3 of the GE
Capital Agreement such purchase shall be made from Corporation moneys or moneys
made available by GE Capital to the Corporation under the GE Capital Agreement.
The Corporation will exercise its rights under the GE Capital Agreement and
make a borrowing thereunder in a timely manner in order to obtain all funds
necessary to meet the payment obligations under this Agreement. The aggregate
principal amount of the Bonds purchased by the Corporation on any Purchase Date
shall not exceed the Available Principal Commitment on such date and the
aggregate amount of the Purchase Price comprising interest on Bonds purchased
by the Corporation on any Purchase Date shall not exceed the lesser of (1) the
Available Interest Commitment and (2) the actual amount of interest accrued and
unpaid on such Bonds to but excluding such date. The Corporation agrees that in
no event shall amounts paid by it in respect of the Purchase Price be paid from
funds or property of the Issuer. The parties hereto acknowledge that the
obligation of the Corporation hereunder to purchase Bonds pursuant and subject
to the terms and conditions of this Agreement is irrevocable and constitutes an
extension of credit to the Issuer at the Effective Date and that the obligation
of the Issuer to repay amounts advanced by the Corporation under this Agreement
in respect of the purchase of Bonds shall be evidenced by the Bonds so
purchased. From and after the Effective Date, the obligation of the Corporation
to purchase Bonds pursuant to this Agreement shall run to the benefit of those
beneficiaries identified in Section 7.10.
SECTION 2.02. Method of Purchasing. (a) Pursuant to the Authorizing
Document, the Tender Agent will give notice to the Corporation as provided in
subsection (b) below if Bonds bearing interest at a Variable Rate (and not
defeased) are to be purchased by the Corporation due to the inability of the
Remarketing Agent to remarket such Bonds.
(b) If by 11:30 a.m. (New York City time) on any Business Day during
the Purchase Period the Corporation receives a notice of purchase from the
Tender Agent substantially in the form of Exhibit B hereto, (any such notice to
be referred to as a "Notice of Purchase"), the Corporation will pay, unless it
determines that any applicable condition specified in Section 3.02 below is not
satisfied, not later than 2:30 p.m. (New York City time) on the Purchase Date
to the Tender Agent, in funds to be available as specified in such Notice of
Purchase, an amount equal to the aggregate Purchase Price.
(c) The Corporation shall not have any responsibility for, or incur
any liability in respect of, any act, or any failure to act, by the Tender
Agent which results in the failure of the Tender Agent (x) to credit the
appropriate account with funds made available by the Corporation pursuant to
this Section or (y) to effect the purchase for the account of the Corporation
of Bonds with such funds pursuant to this Section.
(d) The "Purchase Date" for any purchase of Bonds shall be the date
specified in the Notice of Purchase; provided that in no event shall the
Purchase Date be (a) on the same day the Notice of Purchase is received if the
Notice of Purchase is received by the Corporation later than 11:30 a.m. (New
York City time) or (ii) after the last day of the Purchase Period.
SECTION 2.03. Termination of Commitment. If at any time a Termination
Event (as defined in Section 6.02 below) shall have occurred and be continuing,
the Corporation may deliver a notice (a "Termination Notice") regarding the
termination of the Commitment substantially in the form of Exhibit E hereto to
the Issuer, the Remarketing Agent, the Trustee and the Tender Agent at the
addresses set forth in Exhibit E hereto (or such other addresses as may be
specified by such Persons for such purpose in writing to the Corporation), and
the Commitment shall terminate, effective at the close of business on the
[30th] day following the date of receipt by the Trustee of such notice, or if
such day is not a Business Day, the next succeeding Business Day.
SECTION 2.04. Sale of Bonds. (a) Remarketing Notices. Prior to 12:15
p.m. (New York City time) on any Bond Payment Date that is a Business Day on
which the Corporation or any purchaser described in subsection (c) of this
Section 2.04 holds Bonds purchased pursuant to this Agreement, the Remarketing
Agent may deliver a notice (a "Remarketing Notice") to the Corporation and any
purchaser described in subsection (c) of this Section 2.04 and the Issuer
stating that it has located a purchaser (the "Purchaser") for some or all of
such Bonds and that such Purchaser desires to purchase on such Business Day
such Bonds at a price of par plus accrued interest; provided that a Remarketing
Notice may not be delivered following the delivery of a No-Remarketing Notice
pursuant to Section 6.01 unless the Commitment has terminated in full.
(b) Remarketing of Purchased Bonds. Upon receipt of a Remarketing
Notice in accordance with subsection (a), the Corporation or any purchaser
described in subsection (c) of this Section 2.04 shall have the option to
either (1) retain such Bonds, which in such event shall bear interest
thereafter at the regular Bond interest rate, and not the Corporation Rate, or
(ii) deliver those Bonds being remarketed by the Remarketing Agent upon payment
for such Bonds in immediately available funds in an amount equal to the
principal amount thereof plus interest accrued thereon at the Corporation Rate.
(c) Right to Sell Purchased Bonds. The Corporation expressly reserves
the right to sell Purchased Bonds held by it pursuant to this Agreement at any
time after (x) it has owned such Bonds for more than 60 days without receiving
a Remarketing Notice for such Bonds or (y) a No-Remarketing Notice has been
delivered. The Corporation agrees that sales pursuant to this subsection (c)
will be made only to affiliates of the Corporation pursuant to the GE Capital
Agreement, institutional investors or other entities or individuals which
customarily purchase commercial paper or tax exempt securities in large
denominations who acknowledge in writing that their ownership of said Purchased
Bonds is subject to the obligation to sell such Bonds pursuant to Sections
2.04(a) and (b) hereof. The Corporation agrees to notify the Issuer, the Fiscal
Agent, the Tender Agent, the Remarketing Agent, Moody's and Standard & Poor's
promptly of any such sale effected by it pursuant to this subsection (c). Bonds
to be sold by the Corporation pursuant to this subsection (c) shall first be
exchanged for new Bonds, which Bonds are not covered by the Rating, upon which
is conspicuously noted their status as Purchased Bonds not subject, unless
remarketed under the provisions of Sections 2.04(a) and (b) hereof, to Optional
Tenders or Mandatory Tenders and which shall bear new CUSIP numbers.
(d) Sale Without Recourse. Any sale of a Bond, or portion thereof,
pursuant to this Section shall be without recourse to the seller and without
representation or warranty of any kind.
SECTION 2.05. Reduction of Available Commitment. Upon any redemption,
defeasance, repayment or other payment or conversion to a Fixed Rate of all or
any portion of the principal amount of the Bonds the aggregate Available
Principal Commitment shall automatically be terminated by an amount equal to
the principal amount of the Bonds so redeemed, repaid or otherwise paid or
converted, as the case may be.
SECTION 2.06. Fees. (a) Until the Commitment has terminated, the
Issuer shall pay to the Corporation a commitment fee at the rate of ___% per
annum on the daily average amount of the Available Commitment. Such commitment
fee shall accrue from and including the Effective Date to but excluding the
date of termination of the Commitment in its entirety and shall be payable
quarterly, commencing __________________ , and on each _______ , _________ ,
_________ , and thereafter with a final payment due upon the date of
termination of the Commitment in its entirety. The commitment fee shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed.
(b) Whenever any payment hereunder shall be due on a day which is not
a Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day.
SECTION 2.07. Corporation Rate. At any time that the Corporation owns
Bonds which it has purchased pursuant to this Agreement and which it has not
elected to retain pursuant to Section 2.04(b)(i) hereof, the Corporation Rate
per annum on such Bonds shall be Prime Rate plus 1% provided, that such rate
may be increased as set forth in Section 6.01 hereof. Notwithstanding the
foregoing, the Corporation Rate shall at no time exceed the maximum rate
permitted under the Authorizing Document.
SECTION 2.08. General Provisions as to Payments. Notwithstanding any
provision contained in the Bonds, any Related Document, or any other
instrument, so long as any of the Bonds are owned by the Corporation hereunder,
the Issuer shall cause each payment of principal of and interest on such Bonds
to be paid not later than 5:00 p.m. New York time on the date when due in
immediately available funds, or on the prior day in next day funds, to the
account of the Corporation at ______________ , New York, New York, account
number ________________ . Commitment fees due to the Corporation pursuant to
Section 2.06 hereof shall be paid by the Issuer not later than 5:00 p.m. New
York time on the date when due in immediately available funds, or on the prior
day in next day funds, to the account of the Corporation.
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness. This Agreement shall not
become effective until each of the following conditions has been satisfied:
(a) receipt by the Corporation of (i) an opinion of _______________
("Bond Counsel"), dated the Effective Date, substantially in the form of
Exhibit A-1 hereto (ii) a reliance letter of Bond Counsel, addressed to the
Corporation, with respect to its approving opinion, and (iii) an opinion of
counsel for the Authority, dated the Effective Date addressed to and
satisfactory to the Corporation, to the effect that the Financing Agreement is
duly authorized, valid, binding and enforceable and that the Authority has all
requisite power and authority to fulfill its obligations thereunder;
(b) The conditions set forth in Section 9 of the Purchase Contract
shall have been met to the satisfaction of the Corporation and the Corporation
shall have received executed copies (addressed or certified to the Corporation
in the case of opinions and other documents in letter form) of all opinions,
certificates and other documents called for by the closing conditions of the
Purchase Contract; and
(c) Financial Guaranty Insurance Company shall have issued a policy
of municipal bond insurance guaranteeing payment of the full amount of
principal of and interest on the Bonds; and
SECTION 3.02. Conditions to Purchase. (a) The obligation of the
Corporation to purchase Bonds hereunder on any Purchase Date is subject to
receipt by the Corporation of a Notice of Purchase as required by Section 2.02.
The Corporation shall not be required to purchase any Bonds that are held by or
for the account of the Issuer, any affiliate of the Issuer or any broker-dealer
holding Bonds pursuant to an arrangement with the Issuer.
The Tender Agent will hold, as custodian for the Corporation,
Bonds purchased by the Corporation hereunder, and shall have instructed the
Trustee to register such Bonds in the name of the Corporation or in such other
name or names as the Corporation may direct or shall have provided for the
Corporation to be beneficial owner of book-entry Bonds registered to Cede & Co.
or other nominee of the Depository Trust Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Issuer represents and warrants that, as of the date on which this
Agreement is executed:
SECTION 4.01. Existence. The Issuer is validly existing as a public
benefit corporation under the laws of the State of New York, including the
state constitution, with full right and power to issue the Bonds and to
execute, deliver and perform its obligations under this Agreement and each
Related Document.
SECTION 4.02. Authorization; Contravention. The execution, delivery
and performance by the Issuer of this Agreement and each Related Document are
within the Issuer's powers, have been duly authorized by all necessary action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not violate or contravene, or constitute a default
under, any provision of applicable law, charter, ordinance or regulation or of
any material agreement, judgment, injunction, order, decree or other instrument
binding upon the Issuer or result in the creation or imposition of any lien or
encumbrance on any asset of the Issuer.
SECTION 4.03. Binding Effect. This Agreement and each Related
Document constitutes a valid, binding and enforceable agreement of the Issuer,
subject to applicable laws affecting creditor's rights generally.
SECTION 4.04. No Default. It is not, in any material respect, in
breach of or default under its charter or other similar documents, or any
applicable law or administrative regulation of the State or of the United
States, relating, in each case, to the issuance of debt securities by it, or
any applicable judgment, decree, loan agreement, note, resolution, ordinance,
agreement or other instrument to which it is a party or is otherwise subject.
Late delivery of financials or other reporting materials shall not be deemed
material for purposes of this Section as long as said materials are delivered
within 180 days of the applicable due date.
SECTION 4.05. Litigation. Except as disclosed in the Official
Statement with respect to the Bonds, there is no action, suit or proceeding
pending against, or to the knowledge of the Issuer threatened against or
affecting, the Issuer before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the financial position or
results of operations of the Issuer or which in any manner draws into question
the validity or enforceability of this Agreement or any Related Document.
SECTION 4.06. No Sovereign Immunity. The defense of sovereign
immunity is not available to the Issuer in any proceeding by the Corporation to
enforce any of the obligations of the Issuer under this Agreement or the Bonds
and, to the fullest extent permitted by law, the Issuer consents to the
initiation of any such proceeding in any federal or state court of competent
jurisdiction located in the State of New York and agrees not to assert the
defense of sovereign immunity in any such proceeding.
SECTION 4.07. Incorporation of Representations and Warranties by
Reference. As of the Effective Date, the Issuer hereby makes to the Corporation
the same representations and warranties as are set forth in the Related
Documents, which representations and warranties, as well as the related defined
terms contained therein, are hereby incorporated by reference with the same
effect as if each and every such representation and warranty and defined term
were set forth herein in its entirety. No amendment to such representations and
warranties or defined terms made pursuant to the Related Documents shall be
effective to amend such representations and warranties and defined terms as
incorporated by reference herein without the consent of the Corporation.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants. The Issuer agrees that so long as the
Corporation has a Commitment hereunder or any amount payable hereunder or under
any Bond purchased by the Corporation pursuant to this Agreement remains
unpaid:
(a) Information. The Issuer will deliver to the Corporation as soon
as possible and in any event within 120 days after the end of each fiscal year
of the Issuer, a balance sheet of the Issuer as of the end of such fiscal year
and the related statements of revenue and expense, setting forth in each case
in comparative form the figures for the previous fiscal year, all certified as
to the fairness of presentation, generally accepted accounting principles and
consistency by a nationally recognized firm of independent certified public
accountants; and
(b) No Amendment Without Consent of the Corporation. Without the
prior written consent of the Corporation, the Issuer will not agree or consent
to any amendment, supplement waiver or modification (i) of the Remarketing
Agreement which would have an adverse affect on the Corporation, or (ii) of the
Financing Agreement or Authorizing Document that under said documents would
require consent of the Trustee or Bondholders.
(c) Maintenance of Remarketing Agent. The Issuer will at all times
have a Remarketing Agent performing the duties thereof contemplated by the
Authorizing Document.
(d) Incorporation of Covenants by Reference. The Issuer agrees that
it will perform and comply with each and every covenant and agreement required
to be performed or observed by it in the Authorizing Document, which
provisions, as well as related defined terms contained herein are hereby
incorporated by reference herein with the same effect as if each and every such
provision were set forth therein in its entirety. To the extent that any such
incorporated provision permits any Person to waive compliance with or consent
to such provision or requires that a document, opinion or other instrument or
any event or condition be acceptable or satisfactory to any Person, for
purposes of this Agreement, such provision shall be complied with only if it is
waived or consented to by the Corporation and such document, opinion or other
instrument shall be acceptable or satisfactory only if it is acceptable or
satisfactory to the Corporation.
SECTION 5.02. No Amendment of GE Capital Agreement Without Consent of
Issuer and Trustee; Incorporation of Certain Covenants. Without the prior
written consent of the Issuer and the Trustee, the Corporation will not agree
or consent to any amendment, supplement or modification of the GE Capital
Agreement, nor waive any provision thereof, if such amendment, supplement,
modification or waiver would materially adversely affect the interests of the
Issuer or the holders of the Bonds. The Corporation hereby repeats, for the
benefit of the Issuer and the holders of the Bonds, the covenants set forth in
Section 6.1 of the GE Capital Agreement, which covenants, as well as the
related defined terms contained therein, are hereby incorporated by reference
with the same effect as if each and every such covenant and defined term were
set forth herein in its entirety.
SECTION 5.03. Other Liquidity Facilities. The Corporation agrees not
to enter into another standby bond purchase agreement or other similar form of
liquidity facility in support of the tender feature of adjustable rate bonds,
unless such bonds are rated by both Moody's and Standard & Poor's in their
highest short-term and long-term rating categories.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Issuer shall fail to pay when due (i) any amount payable
under Section 2.06 and such failure shall continue for seven days or (ii) any
other amount payable hereunder and such failure shall continue for seven days;
(b) (i) the State of New York shall take any action which would
impair the power of the Authority or the Issuer to comply with the covenants
and obligations of such entities under the Authorizing Document or the
Financing Agreement or any right or remedy of the Corporation or any owners of
the Bonds from time to time to enforce said covenants and obligations or (ii)
the Issuer shall fail to observe the covenants contained in Sections 5.01 (c)
hereof;
(c) the Issuer shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clauses (a)
or (b) above, but including those incorporated by reference) for 30 days after
written notice thereof has been given to the Issuer by the Corporation;
(d) any representation, warranty, certification or statement made by
the Issuer or the Authority (or incorporated by reference) in this Agreement or
any Related Document or in any certificate, financial statement or other
document delivered pursuant to this Agreement or any Related Document shall
prove to have been incorrect in any material respect when made;
(e) any default by (A) the Issuer shall have occurred and be
continuing in the payment of principal of or premium, if any, or interest on
any bond, note or other evidence of indebtedness issued, assumed or guaranteed
by the Issuer, or (B) by the Issuer or the Authority in the payment of any
amounts payable under any lease, payment contract, mortgage, or conditional
sale arrangement securing, with the consent of the Issuer or the Authority, as
applicable, the payment of any indebtedness of a public benefit corporation or
other governmental agency, instrumentality or body for borrowed money (except
to the extent that the obligation to make such payment is being disputed in
good faith and, if appropriate, contested in proceedings diligently conducted
and there is no default in the payment of the principal of or interest on the
secured indebtedness);
(f) the Issuer or the Authority shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of its or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall declare a moratorium, or shall take any action to
authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Issuer or the Authority seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Issuer or the Authority under the federal bankruptcy
laws as now or hereafter in effect;
(h) any material provision of this Agreement or any Related Document
shall cease for any reason whatsoever to be a valid and binding agreement of
the Issuer (to the extent the Issuer is a party thereto) or the Authority (to
the extent the Authority is a party thereto) or the Issuer or the Authority, as
the case may be, shall contest the validity or enforceability thereof; or
(i) the Issuer shall fail to pay when due any amount payable under
the Bonds or the Authority shall fail to pay any amount required to be
deposited with the Trustee under Section 4.2(c) of the Financing Agreement
(regardless of any waiver by the holders of the Bonds);
then, and in every such event, the Corporation may deliver a notice in the form
of Exhibit D hereto (a "Default Rate Notice") to the Issuer and the Trustee for
purposes of increasing the Corporation Rate payable on the Bonds, deliver a
notice in the form of Exhibit C hereto (a "No-Remarketing Notice") to the
Remarketing Agent not to remarket any of the Bonds purchased by the Corporation
hereunder and/or take any other actions permitted by applicable law.
SECTION 6.02. Termination Events. If an Event of Default (other than
an Event of Default solely under Section 6.01(a)(ii), (c) or (d)) (a
"Termination Event") shall have occurred and be continuing, then, and in every
such event, the Corporation may terminate the Corporation's obligation to
purchase Bonds pursuant to this Agreement as provided in Section 2.03; provided
that an Event of Default shall not affect the obligation of the Corporation to
purchase Bonds in accordance with the provisions of this Agreement prior to the
close of business on the date on which such obligation terminates pursuant to
Section 2.03.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex, fax or
similar writing) and shall be given to such party at its address or telex or
facsimile number set forth on the signature pages hereof or such other address
or telex or facsimile number as such party may hereafter specify for the
purpose by notice to the other parties. Each such notice, request or other
communication shall be effective (i) if given by telex or facsimile, when such
telex or facsimile is transmitted to the telex or facsimile number specified in
this Section and the appropriate answerback is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Corporation under Sections 2.02 and 2.04 shall not be effective until
received and that notices under Sections 2.02 and 2.04 may also be given by
telephone to the Corporation at the telephone numbers listed on the signature
pages hereof (or such other telephone number as may be designated by the
Corporation, by written notice to the Issuer and Tender Agent, to receive such
notice), immediately confirmed in writing or by telex or facsimile.
SECTION 7.02. No Waivers. (a) The obligations of the Issuer hereunder
shall not in any way be modified or limited by reference to any other document,
instrument or agreement (including, without limitation, the Bonds or any other
Related Document). The rights of the Corporation hereunder are separate from
and in addition to any rights that any holder of any Bond may have under the
terms of such Bond or any Related Document or otherwise.
(b) No failure or delay by the Corporation in exercising any right,
power or privilege hereunder or under the Bonds shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. No failure or delay by the
Corporation in exercising any right, power or privilege under or in respect of
the Bonds or any other Related Document shall affect the rights, powers or
privileges of the Corporation hereunder or shall operate as a limitation or
waiver thereof.
SECTION 7.03. Expenses. The Issuer shall pay (i) all reasonable
out-of-pocket expenses of the Corporation, including fees and disbursements of
counsel for the Corporation in connection with the preparation and review of
this Agreement and the Related Documents and in connection with any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Corporation,
including fees and disbursements of counsel, in connection with such Event of
Default and collection and other enforcement proceedings resulting therefrom.
SECTION 7.04. Indemnification. To the extent permitted by law, the
Issuer hereby indemnifies and holds harmless the Corporation from and against
the cost of defending any and all third party claims and liabilities whatsoever
that the Corporation may incur (or may be claimed against the Corporation by
any Person whatsoever) (i) by reason of any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
materials used in marketing the Bonds, or the omission or alleged omission to
state therein a material fact necessary to make such statements, in the light
of the circumstances under which they are or were made, not misleading; or (ii)
by reason of or in connection with the execution and delivery or transfer of,
or payment or failure to pay under, this Agreement; provided that the Issuer
shall not be required to indemnify the Corporation for any costs of defending
third party claims or liabilities to the extent, but only to the extent, such
claims or liabilities arise due to the willful misconduct or gross negligence
of the Corporation or are attributable to information concerning the
Corporation provided by the Corporation expressly for use in the Official
Statement relating to the Corporation; provided further that, unless there is
an actual or potential conflict with respect to the legal defenses available to
the Issuer and the Corporation, the Issuer may discharge its obligation
hereunder by diligently defending the Corporation. The Corporation will
promptly notify the counsel of the Issuer upon becoming aware of any claims or
liabilities giving rise to a right to indemnification hereunder and will
cooperate with the Issuer in the defense of such claims or liabilities. Nothing
in this Section is intended to limit the Issuer's obligations contained in
other parts of this Agreement or the Bonds. The Issuer will not refer to the
Corporation in any materials used in marketing the Bonds without the prior
written consent of the Corporation.
SECTION 7.05. Amendments and Waivers. Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Issuer and the Corporation; provided that no such
amendment or waiver shall, unless signed by the Corporation (i) reduce the
principal of or rate of interest on any Bond or any amounts payable under
Section 2.06 or (ii) postpone the date fixed for any payment of principal of or
interest on any Bond or any amounts payable under Section 2.06 hereunder or for
any reduction or termination of the Available Commitment. The Issuer will
notify Moody's and Standard & Poor's of any amendment to this Agreement.
SECTION 7.06. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Issuer may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of the Corporation.
SECTION 7.07. Term of this Agreement; Extension. The term of this
Agreement shall be from the Effective Date until the expiration of the Purchase
Period. The Corporation may extend the scheduled term of the Purchase Period
for an additional period of five years and thereafter for additional five-year
periods by giving written notice of its intent to do so to the Issuer not later
than the 3rd anniversary of the Effective Date and thereafter at the end of
each successive five-year period beginning with said 3rd anniversary. The
Issuer may, at its election, terminate this Agreement subject to payment in
full of all amounts as set forth in (ii), above. Notwithstanding a termination
of this Agreement by either the Corporation or the Issuer, the provisions of
Section 7.04 shall survive such termination and shall remain in full force and
effect; provided, however, that such termination shall be subject to the
limitations of the Related Documents.
SECTION 7.08. New York Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
SECTION 7.09. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 7.10. Beneficiaries. This Agreement is not intended and shall
not be construed to confer upon any Person other than the parties hereto and
their successors and permitted assigns any rights or remedies hereunder except
that the agreement of the Corporation to purchase Bonds in accordance with the
terms and conditions of this Agreement is made for the benefit of the holders
of the Bonds and, in its capacity as such, the Tender Agent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
[Authority]
By_______________________________
[Address]
Attention:
Fax Number:
Telephone Number:
FGIC SECURITIES PURCHASE, INC.
By_______________________________
Vice President
115 Broadway
New York, New York 10006
Attention: President
Fax Number: (212) 312-3093
Telephone Number: (212) 312-3001
<PAGE>
EXHIBIT A
OPINION OF ,
BOND COUNSEL FOR THE ISSUER
[Effective Date]
[Authority]
FGIC Securities Purchase, Inc.
115 Broadway
New York, New York 10006
Dear Sirs:
We have acted as counsel for [Authority] (the "Issuer") in connection
with (i) the Standby Bond Purchase Agreement dated as of _________ , 199_ (the
"Standby Bond Purchase Agreement") among the City and FGIC Securities Purchase,
Inc.,(ii) the Contract of Purchase dated as of ________________ , 199_ (the
"Purchase Contract"), among the Issuer and the Underwriters referred to
therein, and (iii) Issuer's ______________________________ Bond Resolution, as
amended and supplemented, relating to the __________________________ (the
"Authorizing Document") and (iv) the Financing Agreement, dated as of
___________ , 199_, as amended and supplemented (the "Financing Agreement"), by
and among the Issuer and ______________________________ . The Standby Bond
Purchase Agreement, the Purchase Contract, the Authorizing Document and the
Financing Agreement are hereinafter referred to as the "Agreements". You have
requested our opinion as to certain matters concerning the Agreements. Terms
defined in the Standby Bond Purchase Agreement are used herein as defined
therein.
Based on our examination of existing law, the Agreements, such legal
proceedings and such other documents as we deem necessary to render this
opinion, we are of the opinion that:
1. The Issuer is a public benefit corporation validly existing under
the laws of the State of New York (the "State").
2. The execution, delivery and performance by the Issuer of each of
the Agreements are within the Issuer's powers, have been duly authorized by all
necessary action and require no action by or in respect of, or filing with, any
governmental body, agency or official that has not been accomplished.
3. Each of the Agreements has been duly executed and delivered and
constitutes a valid and binding agreement of the Issuer, and the covenants made
by the Issuer in the Standby Bond Purchase Agreement are legally binding
obligations of the Issuer.
The enforceability of the Agreements may be subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable; to securities laws that may affect the Issuer's
indemnification obligations; and to the exercise of the State's police powers
and of judicial discretion in appropriate cases.
Very truly yours,
<PAGE>
EXHIBIT B
[LETTERHEAD OF THE TENDER AGENT]
NOTICE OF PURCHASE
[Date]
FGIC Securities Purchase, Inc.
115 Broadway
New York, New York 10006
Attention:__________________________
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement
dated as of _________ , 199_ (the "Agreement") among the [Authority] and FGIC
Securities Purchase, Inc. Capitalized terms used herein shall have the meanings
given to them in or by reference to the Agreement.
Pursuant to Section 2.02(a) of the Agreement, we hereby give
you notice that due to the inability to remarket Bonds on the date hereof, such
Bonds are to be purchased by you on ____________ __, 199_ (the "Purchase Date")
pursuant to Section 2.02 of the Agreement. The aggregate Purchase Price of such
Bonds is __________ dollars ($________). Of such aggregate Purchase Price,
__________ dollars ($______) comprises principal of such Bonds and _________
dollars ($______) comprises interest accrued on such Bonds to but excluding the
Purchase Date. The Bonds referred to herein bear interest at a Variable Rate
and have not been defeased.
<PAGE>
FGIC Securities Purchase, Inc.
[Date]
Page Two
The Purchase Price should be provided in [immediately
available/next-day] funds.
Very truly yours,
[TENDER AGENT]
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT C
[LETTERHEAD OF CORPORATION]
NO-REMARKETING NOTICE
[Date]
==================
- ------------------
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement
dated as of _________ , 199_ among the [Authority] and FGIC Securities
Purchase, Inc. (the "Agreement"). Capitalized terms used herein shall have the
meanings given to them in or by reference to the Agreement.
We hereby give you notice that because an Event of Default
has occurred and is continuing, you are hereby instructed not to remarket any
of the Bonds purchased by FGIC Securities Purchase, Inc. pursuant to the
Agreement or deliver any Remarketing Notices pursuant to Section 2.04 of the
Agreement.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT D
[LETTERHEAD OF CORPORATION]
DEFAULT RATE NOTICE
[Date]
[Authority]
Attention:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement
dated as of _________ , 199_ among the [Authority] and FGIC Securities
Purchase, Inc. (the "Agreement"). Capitalized terms used herein shall have the
meanings given to them in or by reference to the Agreement.
We hereby give you notice that because an Event of Default
has occurred and is continuing, the Corporation Rate payable on the Bonds is
increased as of the date hereof to the Prime Rate plus 3%.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT E
[LETTERHEAD OF CORPORATION]
TERMINATION NOTICE
[Authority]
==========================
Attention: [comptroller]
[Trustee]
==================================
- ----------------------------------
[Remarketing Agent]
============================
- ----------------------------
[Tender Agent]
============================
- ----------------------------
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement dated as of
_________ , 199_ among the [Authority], and FGIC Securities Purchase, Inc. (the
"Agreement"). Capitalized terms used herein shall have the meanings given to
them in or by reference to the Agreement.
We hereby give you notice that a Termination Event has occurred and
is continuing. Pursuant to Section 2.03 of the Agreement, the Commitment shall
terminate, effective at the close
<PAGE>
[Trustee]
[Municipality]
[Tender Agent]
[Remarketing Agent]
[Date]
Page Two
of business on the [30th] day following receipt by the Trustee of this
Termination Notice.
Please be advised that a Notice of Purchase may not be delivered
following the termination of the Commitment.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By:__________________________
Name:
Title:
Acknowledgment of Receipt
on [date].
- --------------------------
[Trustee]
* The Table of Contents is for convenience of reference only and is
not a part of this Agreement.
Exhibit 4.2
STANDBY BOND PURCHASE AGREEMENT
dated as of
between
, AS TRUSTEE,
and
FGIC SECURITIES PURCHASE, INC.
[Must include Joinder of Tender Agent if different than Trustee]
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
Page
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Definitions............................................................................2
SECTION 1.02. Incorporation of Certain Definitions by Reference......................................5
ARTICLE II
COMMITMENT TO PURCHASE VARIABLE RATE BONDS
SECTION 2.01. Commitment to Purchase Variable Rate Bonds.............................................5
SECTION 2.02. Method of Purchasing...................................................................5
SECTION 2.03. Termination of Commitment..............................................................6
SECTION 2.04. Sale of Variable Rate Bonds............................................................6
SECTION 2.05. Reduction of Available Commitment......................................................7
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness............................................................7
SECTION 3.02. Conditions to Purchase.................................................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Existence..............................................................................8
SECTION 4.02. Authorization..........................................................................8
SECTION 4.03. Corporation Existence..................................................................8
SECTION 4.04. Authorization; Binding Effect..........................................................9
SECTION 4.05. Contravention; No Default..............................................................9
SECTION 4.06. Litigation.............................................................................9
ARTICLE V
COVENANTS
SECTION 5.01. No Amendment of GE Capital Agreement Without Consent of Issuer and Trustee.............9
SECTION 5.02. Other Liquidity Facilities.............................................................9
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default.....................................................................10
<PAGE>
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices...............................................................................11
SECTION 7.02. No Waivers............................................................................11
SECTION 7.03. Amendments and Waivers................................................................11
SECTION 7.04. Successors and Assigns................................................................11
SECTION 7.05. Term of this Agreement................................................................12
SECTION 7.06. New York Law..........................................................................12
SECTION 7.07. Counterparts..........................................................................12
SECTION 7.08. Trustee May Act through Agents and Appoint Co-Trustees................................12
SECTION 7.09. Beneficiaries.........................................................................12
SECTION 7.10. Capacity of Trustee...................................................................13
Exhibit 1 - Notice of Purchase
Exhibit 2 - Termination Notice
Exhibit 3 - Notice Addresses
</TABLE>
<PAGE>
STANDBY BOND PURCHASE AGREEMENT
STANDBY BOND PURCHASE AGREEMENT (the "Agreement") dated as of _______
between ______________, a banking corporation, as Trustee (the "Trustee") and
FGIC SECURITIES PURCHASE, INC., a Delaware corporation (the "Corporation").
WHEREAS, the ___________ (the "Issuer") has issued $__________
principal amount of its ______________ (herein called the "Variable Rate
Bonds") pursuant to an ________ dated as of _________ (the "Indenture" or the
"Authorizing Document"), between the Issuer and the Trustee (as in effect on
the date hereof);
WHEREAS, the Authorizing Document provides that the holders of the
Variable Rate Bonds shall have the option, upon the satisfaction of certain
conditions, to tender Variable Rate Bonds to the Tender Agent for purchase,
upon notice to the Tender Agent as provided for in the Authorizing Document
and, under certain circumstances, may be required to tender their Variable Rate
Bonds for purchase thereof in accordance with the terms of the Authorizing
Document; and
WHEREAS, the Corporation has agreed to purchase such tendered
Variable Rate Bonds pursuant to the terms of this Agreement, as consideration
for (i) the Corporation's status under the Authorizing Document as a Bondholder
of such purchased tendered Variable Rate Bonds entitled to the payments as a
general obligation of the Issuer of principal, interest (at the [Provider Rate]
prescribed herein), and the fees and expenses described therein, (ii) the
Corporation's entitlement to exercise all rights and remedies afforded
Bondholders under the Authorizing Document;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Authorized Representative" means any official of the Trustee or its
agents and of the Tender Agent, duly authorized and empowered to execute and
deliver this Agreement and all certificates or other documents connected
herewith or in connection with the issuance, sale and subsequent disposition of
the Variable Rate Bonds.
"Available Commitment" as of any day means the sum of the Available
Principal Commitment and the Available Interest Commitment, in each case as of
such day.
"Available Interest Commitment" initially means $ _______________ ,
computed based upon the Available Principal Commitment at the Maximum Rate and
thereafter means such initial amount adjusted from time to time as follows: (a)
downward by an amount that bears the same proportion to such initial amount as
the amount of any reduction in the Available Principal Commitment pursuant to
the definition of "Available Principal Commitment" bears to the initial
Available Principal Commitment; and (b) upward by an amount that bears the same
proportion to such initial amount as the amount of any increase in the
Available Principal Commitment pursuant to the definition of "Available
Principal Commitment" bears to the initial Available Principal Commitment.
"Available Principal Commitment" initially means $ _________________
and thereafter means such initial amount adjusted from time to time as follows:
(a) downward by the amount of any termination or reduction of the Available
Principal Commitment pursuant to Section 2.03 or Section 2.05; (b) downward by
the principal amount of any Bonds purchased by the Corporation pursuant to
Section 2.02; and (c) upward by the principal amount of any Bonds theretofore
purchased by the Corporation pursuant to Section 2.02, which are delivered for
sale by the Corporation pursuant to Section 2.04(b).
"Business Day" has the meaning set forth in the Authorizing Document.
"Commitment" means the Available Commitment calculated without regard
to clauses (b) and (c) of the definition of Available Principal Commitment and
the effect thereof on the amount of the Available Interest Commitment.
"Default" means any condition or event which constitutes an Event of
Default or which, with the giving of notice or lapse of time or both, would,
unless cured or waived, become an Event of Default.
"Default Rate" means a rate of interest per annum equal to the Prime
Rate plus 3%, provided, however, that in no event shall the Default Rate exceed
the Maximum Rate.
"Effective Date" means the date of execution and delivery of this
Agreement.
"Event of Default" has the meaning set forth in Section 6.01.
"GE Capital" means General Electric Capital Corporation.
"GE Capital Agreement" means the Standby Loan Agreement, dated as of
, by and between the Corporation and GE Capital.
"Maximum Rate" means the lesser of 25% per annum or the maximum rate
permitted by applicable law.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Notice of Purchase" has the meaning specified in Section 2.02.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time as its Prime Rate.
"Prospectus Supplement" means the Prospectus Supplement relating to
this Agreement which supplements the Corporation's Prospectus dated the date
hereof included in the Corporation's Registration Statement on Form S-3 (File
No. 33-65928) and amendments thereto, filed with the Securities and Exchange
Commission.
"Prospectus Supplement Effective Date" means the date that the
Prospectus Supplement is filed with the Securities and Exchange Commission in
accordance with the Securities Act of 1933.
"Provider Rate" means the rate of interest per annum equal to the
Prime Rate plus 1%.
"Purchase Date" has the meaning set forth in Section 2.02(d).
"Purchase Period" means the period from the later of
__________________ and the Prospectus Supplement Effective Date to and
including the earlier of (i) the Scheduled Termination Date (or, if such date
is not a Business Day, the Business Day immediately succeeding such date), (ii)
the date on which all Variable Rate Bonds have been paid in full, redeemed,
defeased or converted to a Fixed Rate in accordance with the terms of such
Variable Rate Bonds, (iii) the date on which the Commitment is terminated
pursuant to Section 2.03 and (iv) the date on which this Agreement is
terminated in accordance with the applicable provisions of Article
______________________ of the Authorizing Document.
"Related Documents" means the Authorizing Document, the Variable Rate
Bonds, the Remarketing Agreement and all other agreements, documents,
certificates and instruments executed and delivered in connection with the
issuance, sale and delivery of the Variable Rate Bonds and the execution and
delivery of this Agreement.
"Remarketing Agent" means ________________ and its successors and
assigns under the Remarketing Agreement, including any substitute remarketing
agent appointed pursuant to such Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated as of
between the Issuer and the Remarketing Agent.
"Scheduled Termination Date" means _______________ from the Effective
Date or such later date to which the Corporation may in its sole discretion, at
the request of the Trustee, extend this Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services and its
successors.
"State" means the State of _____________.
"Tender Agent" means, initially, __________________ , and upon any
resignation or removal of such Tender Agent, any other entity thereafter
designated as such pursuant to the Authorizing Document, and its permitted
agents, fiduciary designees, successors and assigns.
"Termination Event" has the meaning set forth in Section 6.01.
"Termination Notice" has the meaning set forth in Section 2.03.
SECTION 1.02. Incorporation of Certain Definitions by Reference. Each
capitalized term used herein and not otherwise defined herein shall have the
meaning provided therefor in the Authorizing Document.
ARTICLE II
COMMITMENT TO PURCHASE VARIABLE RATE BONDS
SECTION 2.01. Commitment to Purchase Variable Rate Bonds. The
Corporation agrees, on the terms and conditions contained in this Agreement, to
purchase Variable Rate Bonds bearing interest at a variable rate that are
tendered to the Tender Agent from time to time pursuant to the Authorizing
Document during the Purchase Period at the Purchase Price. In accordance with
Section 2.3 of the GE Capital Agreement, such purchase shall be made from
Corporation moneys or moneys made available by GE Capital to the Corporation
under the GE Capital Agreement. The aggregate principal amount of the Variable
Rate Bonds purchased by the Corporation on any Purchase Date shall not exceed
the Available Principal Commitment on such date and the aggregate amount of the
Purchase Price comprising interest on Variable Rate Bonds purchased by the
Corporation on any Purchase Date shall not exceed the lesser of (1) the
Available Interest Commitment and (2) the actual amount of interest accrued and
unpaid on such Variable Rate Bonds to but excluding such date. The Corporation
agrees that in no event shall amounts paid by it in respect of the Purchase
Price be paid from funds or property of the Issuer. The parties hereto
acknowledge that the obligation of the Corporation hereunder to purchase
Variable Rate Bonds pursuant and subject to the terms and conditions of this
Agreement is irrevocable and that the Corporation shall become a Bondholder
under the Authorizing Document of each Variable Rate Bond purchased under this
Agreement and that the Corporation, as such Bondholder, shall be entitled, as
the holder of Provider Bonds bearing interest at the Provider Rate, to all
rights and remedies granted to Bondholders of Variable Rate Bonds under the
Authorizing Document. From and after the Effective Date, the obligation of the
Corporation to purchase Variable Rate Bonds pursuant to this Agreement shall
run to the benefit of those beneficiaries identified in Section 7.09.
SECTION 2.02. Method of Purchasing. (a) Pursuant to Section of the
Authorizing Document, the Trustee will give notice to the Corporation, the
Issuer and the Tender Agent of the principal amount of Variable Rate Bonds for
which it has arranged a remarketing. Pursuant to the Authorizing Document and
Section 2.02(b) herein below, the Tender Agent will give notice to the
Corporation if Variable Rate Bonds bearing interest at a Variable Rate are to
be purchased by the Corporation due to the unavailability of remarketing
proceeds for such purchase.
(b) If by 11:30 p.m. (New York City time) on any Business Day during
the Purchase Period the Corporation receives a notice of purchase from the
Tender Agent substantially in the form of Exhibit 1 hereto (any such notice to
be referred to as a "Notice of Purchase"), the Corporation will pay, unless it
determines that any applicable condition specified in Section 3.02 below is not
satisfied, not later than 2:30 p.m. (New York City time) on the Purchase Date
to the Tender Agent, in funds to be available as specified in such Notice of
Purchase, an amount equal to the aggregate Purchase Price.
(c) The Corporation shall not have any responsibility for, or incur
any liability in respect of, any act, or any failure to act, by the Tender
Agent which results in the failure of the Tender Agent (x) to credit the
appropriate account with funds made available by the Corporation pursuant to
this Section or (y) to effect the purchase for the account of the Corporation
of Variable Rate Bonds with such funds pursuant to this Section.
(d) The "Purchase Date" for any purchase of Variable Rate Bonds shall
be the date specified in the Notice of Purchase; provided that in no event
shall the Purchase Date be (i) on the same day the Notice of Purchase is
received if the Notice of Purchase is received by the Corporation later than
11:30 p.m. (New York City time) or (ii) after the last day of the Purchase
Period.
SECTION 2.03. Termination of Commitment. If at any time a Termination
Event shall have occurred and be continuing, the Corporation may deliver a
notice (a "Termination Notice") regarding the termination of the Commitment
substantially in the form of Exhibit 2 hereto to the Trustee, the Issuer, the
Remarketing Agent and the Tender Agent at the addresses set forth in Exhibit 3
hereto (or such other addresses as may be specified by such Persons for such
purpose in writing to the Corporation), and the Commitment shall terminate,
effective at the close of business on the [30th] day following the date of
receipt of such notice by the Trustee, or if such day is not a Business Day,
the next succeeding Business Day.
SECTION 2.04. Sale of Variable Rate Bonds. (a) Remarketing Notices.
Prior to 11:15 a.m. (New York City time) on any Business Day on which the
Corporation holds Variable Rate Bonds purchased pursuant to this Agreement, the
Remarketing Agent may deliver a notice (a "Remarketing Notice") to the
Corporation, the Trustee and the Issuer stating that it has located a purchaser
(the "Purchaser") for some or all of such Variable Rate Bonds and that such
Purchaser desires to purchase on such Business Day such Variable Rate Bonds at
the principal amount thereof plus accrued interest at the rate such Variable
Rate Bonds would have accrued interest had such bonds not been Provider Bonds.
(b) Sale of Purchased Variable Rate Bonds. Upon receipt of a
Remarketing Notice in accordance with subsection (a), the Corporation shall
direct the Tender Agent to deliver those Variable Rate Bonds held in the
account of the Corporation being remarketed by the Remarketing Agent against
payment for such Variable Rate Bonds in an amount equal to the principal amount
thereof plus interest accrued thereon at the Provider Rate.
(c) Right to Sell Bonds. The Corporation expressly reserves the right
to sell, at any time, Provider Bonds purchased by it pursuant to this Agreement
provided that any such purchaser acknowledges in writing that its purchase
pursuant to this Section 2.04(c) is subject to the provisions of Sections
2.04(a) and (b) hereof.
(d) Sale Without Recourse. Any sale of a Variable Rate Bond, or
portion thereof, pursuant to Section 2.04(c) and other than pursuant to a
remarketing shall be without recourse to the seller and without representation
or warranty of any kind except as may be required by law.
SECTION 2.05. Reduction of Available Commitment. Upon any redemption,
defeasance, repayment or other payment, or on the fifth day following
conversion to a Fixed Rate of all or any portion of the principal amount of the
Variable Rate Bonds, the aggregate Available Principal Commitment shall
automatically be terminated by an amount equal to the principal amount of the
Variable Rate Bonds so redeemed, defeased, repaid or otherwise paid or
converted, as the case may be.
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness. This Agreement shall not
become effective until each of the following conditions has been satisfied:
(a) receipt by the Corporation of an opinion of counsel for the
Trustee, dated the Effective Date, covering the matters represented or
warranted in Sections 4.01 and 4.02 hereof;
(b) receipt by the Trustee of an opinion of counsel for the
Corporation, dated the Effective Date, covering the matters represented or
warranted in Sections 4.03, 4.04, 4.05 and 4.06 hereof;
(c) reliance letters shall have been addressed and delivered to the
Corporation with respect to the legal opinions delivered in connection with the
execution of this Agreement and the Variable Rate Bonds;
(d) receipt by the Corporation of a certificate from an Authorized
Representative of the Trustee to the effect that as of the Effective Date, to
the Trustee's best knowledge no "event of default" exists under the Authorizing
Document nor does any event exist which might become an event of default with
the passage of time or giving of notice or both; and
(e) Financial Guaranty Insurance Company shall have issued a policy
of municipal bond insurance guaranteeing payment of the full amount of
principal of and interest on the Variable Rate Bonds in accordance with
Financial Guaranty's Commitment Letter dated ________________ , 199_ relating
to such policy.
On the Effective Date, the Corporation shall deliver its certificate
stating that this Agreement has become effective and that the conditions
precedent thereto have been satisfied.
SECTION 3.02. Conditions to Purchase. The obligation of the
Corporation to purchase Variable Rate Bonds hereunder on any Purchase Date is
subject to satisfaction of the following conditions:
(a) receipt by the Corporation of a Notice of Purchase as required by
Section 2.02;
(b) the fact that the Variable Rate Bonds to be so purchased are not
beneficially held (or held in certificated form) by or for the account of the
Issuer, any affiliate of the Issuer or any broker-dealer holding Variable Rate
Bonds pursuant to an arrangement with the Issuer; and
(c) to the extent Variable Rate Bonds are certificated, the Tender
Agent shall hold, in trust for the Corporation, Variable Rate Bonds purchased
by the Corporation hereunder; the Tender Agent shall register such Variable
Rate Bonds purchased by the Corporation in the name of the Corporation or in
such other name or names as the Corporation may direct.
The Corporation shall be obligated to purchase Variable Rate Bonds
with respect to which the condition set forth in clause (b) has been satisfied,
notwithstanding the fact that such condition has not been satisfied with
respect to all of the outstanding Variable Rate Bonds. The Corporation shall
notify the Trustee, the Tender Agent and the Issuer by telephone no later than
1:30 p.m. on any Purchase Date in the event any of the conditions set forth in
this Section are not met.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Trustee represents and warrants that, as of the date on
which this Agreement is executed:
SECTION 4.01. Existence. The Trustee is a validly existing banking
corporation, with full right and power to execute, deliver and perform its
obligations under this Agreement and each Related Document to which it is a
party.
SECTION 4.02. Authorization. This Agreement has been duly authorized,
executed and delivered by the Trustee.
The Corporation represents and warrants that, as of the date on which
this Agreement is executed:
SECTION 4.03. Corporation Existence. The Corporation has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware.
SECTION 4.04. Authorization; Binding Effect. This Agreement and the
GE Capital Agreement each has been duly executed and delivered by the
Corporation pursuant to due authorization and each of this Agreement and the GE
Capital Agreement constitutes a valid and binding agreement of the Corporation
enforceable against the Corporation in accordance with its terms, except as (x)
limited by insolvency, reorganization, receivership, conservatorship,
liquidation, moratorium or other similar laws affecting the enforcement of
creditors' rights generally as such laws would apply in the event of the
insolvency, reorganization, receivership, conservatorship or liquidation of, or
other similar occurrence with respect to, the Corporation or in the event of
any moratorium or similar occurrence affecting the Corporation and (y) limited
by equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
SECTION 4.05. Contravention; No Default. The execution and delivery
by the Corporation of, and the performance by the Corporation of its
obligations under, this Agreement will not contravene any provision of
applicable law or the Certificate of Incorporation or By-laws, each as amended,
of the Corporation or any material agreement or other instrument binding upon
the Corporation, and no consent, approval or authorization of any governmental
body or agency (which has not been obtained) is required for the performance by
the Corporation of its obligations under this Agreement.
SECTION 4.06. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Corporation threatened against, the
Corporation before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision
which could materially adversely affect the financial position or results of
operations of the Corporation or which in any manner draws into question the
validity or enforceability of this Agreement or the Corporation's ability to
perform under this Agreement.
ARTICLE V
COVENANTS
SECTION 5.01. No Amendment of GE Capital Agreement Without Consent of
Issuer and Trustee. Without the prior written consent of the Trustee and the
Issuer, the Corporation will not agree or consent to any amendment, supplement
or modification of the GE Capital Agreement, nor waive any provision thereof.
The Corporation hereby repeats, for the benefit of the Trustee and the Issuer
and the holders of the Variable Rate Bonds, the covenants set forth in Section
6.1 of the GE Capital Agreement, which covenants, as well as the related
defined terms contained therein, are hereby incorporated by reference with the
same effect as if each and every such covenant and defined term were set forth
herein in its entirety.
SECTION 5.02. Other Liquidity Facilities. The Corporation agrees not
to enter into another standby bond purchase agreement or other similar form of
liquidity facility in support of the tender feature of adjustable rate bonds,
unless such bonds are rated by both Moody's and Standard & Poor's in their
highest short-term and long-term rating categories after giving effect to such
other agreement or liquidity facility in support of the tender feature of
adjustable rate bonds.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) (i) any portion of the commitment fee for this Agreement shall
not be paid when due on the quarterly payment date therefor as set forth in the
Payment Agreement, or (ii) any other amount payable thereunder shall not be
paid when due and any such failure shall continue for three (3) Business Days;
(b) (i) an Event of Default shall occur under Section ____ of the
Indenture, and, if such failure is the result of a covenant breach which is
capable of being remedied, such failure continues for sixty (60) days following
written notice thereof to the Issuer from the Corporation, or (ii) the Issuer
shall fail to have at all times a Remarketing Agent performing the duties
thereof contemplated by the Authorizing Document;
(c) any default by the Issuer shall have occurred and be continuing
in the payment of principal of or premium, if any, or interest on any bond,
note or other evidence of indebtedness issued, assumed or guaranteed by the
Issuer, the obligation and security for which under the Authorizing Document is
senior to, or on parity with, the Variable Rate Bonds;
(d) if the Issuer shall have declared a moratorium affecting the
Variable Rate Bonds; or
(e) any material provision of this Agreement, the Authorizing
Document or the Variable Rate Bonds shall cease for any reason whatsoever to be
a valid and binding agreement of the Issuer or the Issuer shall contest the
validity or enforceability thereof;
then, and in every such event (each such event is herein called a "Termination
Event"), (i) the interest rate payable on Provider Bonds shall increase to the
Default Rate, and (ii) the Corporation may terminate the Corporation's
obligation to purchase Variable Rate Bonds pursuant to this Agreement as
provided in Section 2.03; provided that an Event of Default shall not affect
the obligation of the Corporation to purchase Variable Rate Bonds in accordance
with the provisions of this Agreement prior to the close of business on the
date on which such obligation terminates pursuant to Section 2.03.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including fax or similar writing)
and shall be given to such party at its address or facsimile number set forth
on the signature pages hereof or such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the other parties.
Each such notice, request or other communication shall be effective (i) if
given by facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate answerback is received, (ii) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to the Corporation under Sections 2.02 and 2.04 shall not be
effective until received and that notices under Sections 2.02 and 2.04 may also
be given by telephone to the Corporation at the telephone numbers listed on the
signature pages hereof (or such other telephone number as may be designated by
the Corporation, by written notice to the Trustee and the Tender Agent, to
receive such notice), immediately confirmed in writing or by facsimile.
SECTION 7.02. No Waivers. (a) The obligations of the parties
hereunder shall not in any way be modified or limited by reference to any other
document, instrument or agreement (including, without limitation, the Variable
Rate Bonds or any other Related Document) except as set forth herein. The
rights of the Corporation hereunder are separate from and in addition to any
rights that any holder of any Variable Rate Bond may have under the terms of
such Variable Rate Bond or any Related Document or otherwise.
(b) No failure or delay by the Corporation in exercising any right,
power or privilege hereunder or under the Variable Rate Bonds shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. No failure or delay by the
Corporation in exercising any right, power or privilege under or in respect of
the Variable Rate Bonds or any other Related Document shall affect the rights,
powers or privileges of the Corporation hereunder or shall operate as a
limitation or waiver thereof.
SECTION 7.03. Amendments and Waivers. Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Trustee and the Corporation. The Trustee will
notify Moody's and Standard & Poor's of any amendment to this Agreement, each
of which must confirm to the Trustee prior to such amendment or waiver becoming
effective that such amendment or waiver shall not result in a change in the
rating initially received from Moody's and Standard & Poor's.
SECTION 7.04. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that neither party may
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of the other party except to any successor Trustee
pursuant to the terms of the Authorizing Documents. The Trustee shall notify
Moody's and Standard & Poor's in writing of any assignment or transfer, each of
which must confirm to the Trustee that prior to such assignment or waiver
becoming effective such assignment or transfer shall not result in a change in
the rating initially received from Moody's and Standard & Poor's.
SECTION 7.05. Term of this Agreement. The term of this Agreement
shall be until the earlier of (i) the Scheduled Termination Date and (ii)
payment in full of the principal of and interest on all Variable Rate Bonds
purchased by the Corporation pursuant to this Agreement.
SECTION 7.06. New York Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
SECTION 7.07. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 7.08. Trustee May Act through Agents and Appoint Co-Trustees.
The Trustee may execute any of the powers hereof and perform any duties
hereunder either directly or by or through its agents or attorneys. The Trustee
may delegate to a co-trustee or co-trustees such power, rights, duties and
responsibilities as the Trustee may deem necessary or desirable in order to
permit the Trustee to lawfully execute and perform the duties set forth in this
Agreement.
SECTION 7.09. Beneficiaries. This Agreement is made by the
Corporation with the Trustee and the Issuer for the express benefit of the
holders of the Variable Rate Bonds. Nothing contained herein, express or
implied, is intended to give any person other than the Corporation, the
Trustee, the Issuer and the holders of the Variable Rate Bonds any right,
remedy, or claim hereunder or by reason hereof. Any agreement or covenant
required herein to be performed by or on behalf of the Corporation shall be for
the sole and exclusive benefit of the Trustee, the Issuer and the holders of
the Variable Rate Bonds. Prior to the Scheduled Termination Date and provided
that the Commitment hereunder has not terminated pursuant to the provisions of
Sections 2.03 and 6.01 hereof, the Corporation agrees that it will not assert
any act or failure to act by the Issuer, including without limitation (A) the
commencement of a bankruptcy or similar case by or against the Issuer, (B) the
unenforceability or nonpayment of the Provider Rate in any such case, (C) the
unenforceability of the Payment Agreement, or (D) any default under any Related
Document or Event of Default as a defense to its obligations hereunder, and
that this Agreement shall survive (A) the commencement of a bankruptcy or
similar case by or against the Issuer, (B) the unenforceability or nonpayment
of the Provider Rate in any such case, (C) the unenforceability of the Payment
Agreement among the Issuer, the Trustee and the Corporation in any such case,
or (D) any default under any Related Document or Event of Default. The
Corporation agrees that, so long as this Agreement is in effect and has not
terminated, the holders of the Variable Rate Bonds are express beneficiaries of
this Agreement and, as such, any holder of a Variable Rate Bond shall have the
right to bring suit against the Corporation to enforce this Agreement should
the Corporation fail to perform any of its obligations hereunder.
SECTION 7.10. Capacity of Trustee. The Trustee is entering into this
Agreement solely in its capacity as Trustee [and Tender Agent] under the
Authorizing Document and the duties, powers and liabilities of the Trustee in
acting hereunder as Trustee and as Tender Agent shall be subject to the
provisions of the Authorizing Document including, without limitation, the
provisions of Article __________________ of the Indenture.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
,
as Trustee
--------------------------
By:_______________________
Title:_____________________
Attention:
Fax Number:
Telephone Number:
FGIC SECURITIES PURCHASE, INC.
By_______________________________
Vice President
115 Broadway
New York, New York 10006
Attention: President
Copy: Managing Counsel
Fax Number: (212) 312-3219
Telephone number: (212) 312-3001
<PAGE>
EXHIBIT 1
[LETTERHEAD OF THE TRUSTEE/TENDER AGENT]
NOTICE OF PURCHASE
[Date]
FGIC Securities Purchase, Inc.
115 Broadway
New York, New York 10006
Attention:__________________________
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement
dated as of ___________ (the "Agreement") between __________________ , as
Trustee and FGIC Securities Purchase, Inc. Capitalized terms used herein shall
have the meanings given to them in or by reference to the Agreement.
Pursuant to Section 2.02(a) of the Agreement, we hereby give
you notice that due to the unavailability of remarketing proceeds on the
Purchase Date (hereinafter defined) as set forth in the notice from the
Remarketing Agent pursuant to Section 2.02(a) of the Agreement, such Variable
Rate Bonds are to be purchased by you on ____________ __, 199_ (the "Purchase
Date") pursuant to Section 2.02 of the Agreement. The aggregate Purchase Price
of such Variable Rate Bonds is __________ dollars ($________). Of such
aggregate Purchase Price, __________ dollars ($______) comprises principal of
such Variable Rate Bonds and _________ dollars ($______) comprises interest
accrued on such Variable Rate Bonds to but excluding the Purchase Date. The
Variable Rate Bonds referred to herein bear interest at a Variable Rate and
have not been defeased.
<PAGE>
FGIC Securities Purchase, Inc. [Date]
Page Two
The Purchase Price should be provided in immediately available funds
on the Purchase Date.
Very truly yours,
[TRUSTEE/TENDER AGENT]
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT 2
[LETTERHEAD OF CORPORATION]
TERMINATION NOTICE
as trustee
Attention:
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement
dated as of ___________________ between _________________ , as Trustee and FGIC
Securities Purchase, Inc. (the "Agreement"). Capitalized terms used herein
shall have the meanings given to them in or by reference to the Agreement.
We hereby give you notice that a Termination Event has
occurred and is continuing. Pursuant to Section 2.03 of the Agreement, the
Commitment shall terminate, effective at the close of business on the date
which is the [30th] day following the date of receipt of this Termination
Notice, or if such day is not a Business Day, the next succeeding Business Day.
Please be advised that a Notice of Purchase may not be
delivered following the termination of the Commitment.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By: __________________________
Name:
Title:
<PAGE>
EXHIBIT 3
NOTICE ADDRESSES
As set forth herein and in the Authorizing Document
<PAGE>
A G R E E M E N T
AGREEMENT (the "Agreement") dated as of ______________ , 199_ among
____________ (the "Issuer"), _______________ , as Trustee (the "Trustee") and
FGIC SECURITIES PURCHASE, INC., a Delaware corporation (the "Corporation").
WHEREAS, the Issuer has issued $_______________ in principal amount
of its ___________ (herein called the "Variable Rate Bonds") pursuant to an
_________________ dated as of ______________, _____________ between the Issuer
and the Trustee (the "Indenture" or the "Authorizing Document");
WHEREAS, the Authorizing Document provides that the holders of the
Variable Rate Bonds shall have the option, upon the satisfaction of certain
conditions, to tender Variable Rate Bonds to the Tender Agent for purchase,
upon notice to the Tender Agent as provided for in the Authorizing Document
and, under certain circumstances, may be required to tender their Variable Rate
Bonds for purchase thereof in accordance with the terms of the Authorizing
Document; and
WHEREAS, the Corporation has agreed to purchase such tendered Bonds
pursuant to the terms of a Standby Bond Purchase Agreement dated as of
________________ (the "Standby Bond Purchase Agreement") between the
Corporation and the Trustee;
NOW, THEREFORE, as consideration for the issuance by the Corporation
of the Standby Bond Purchase Agreement and the Corporation's assumption of the
liabilities and undertakings of the Corporation thereunder, the parties hereto
agree as follows (hereinafter, all capitalized terms not otherwise defined
herein shall have the same meanings set forth in the Standby Bond Purchase
Agreement or in the Authorizing Document, wherever such terms appear):
1. Fees. (a) Until the Commitment has terminated, the _____________
shall pay to the Corporation a commitment fee at the rate of ___% per annum on
the daily average amount of the Available Commitment. Such commitment fee shall
accrue from and including the Effective Date to but excluding the date of
termination of the Commitment in its entirety and shall be payable quarterly in
arrears commencing _________________ , on each ________________ , and upon the
date of termination of the Commitment in its entirety. The Corporation shall
use its best efforts to mail to the Issuer and the Trustee, not fewer than 30
days prior to each quarterly due date, an invoice for the amount of the
commitment fee next due. The commitment fee shall be computed on the basis of a
year of 365/366 days and paid for the actual number of days elapsed.
(b) Whenever any payment hereunder shall be due on a day which is not
a Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day.
2. General Provisions as to Payments. Notwithstanding any provision
contained in the Variable Rate Bonds, any related Document, or any other
instrument, so long as any of the Variable Rate Bonds are owned by the
Corporation under the Standby Bond Purchase Agreement, the Trustee on behalf of
the Issuer shall cause each payment of principal of and interest on such
Variable Rate Bonds to be paid not later than 2:00 p.m., New York City time on
the date when due in immediately available funds, to the account of the
Corporation at ________________ , New York, New York, A/C No. ________________
. Commitment fees due to the Corporation pursuant to Section 1 hereof shall be
paid by the Issuer not later than 2:00 p.m., New York City time on the date
when due in immediately available funds, or on the prior day in next day funds,
to the account of the Corporation.
3. Expenses. The Issuer shall pay all reasonable out-of-pocket
expenses of the Corporation, including (i) fees and disbursements of counsel
for the Corporation and counsel for the Trustee in connection with the
preparation and review of the Standby Bond Purchase Agreement, this Agreement,
Securities and Exchange Commission filings, the Preliminary and final Official
Statements and the Related Documents, (ii) in connection with any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
default or alleged default hereunder or thereunder and (iii) if an Event of
Default occurs under the Standby Bond Purchase Agreement, all out-of-pocket
expenses incurred by the Corporation and the Trustee, including fees and
disbursements of counsel, in connection with such Event of Default and
collection and other enforcement proceedings resulting therefrom.
4. Indemnification. To the extent permitted by law, the hereby Issuer
indemnifies and holds harmless the Corporation from and against the cost of
defending any and all third party claims and all costs, losses, expenses,
fines, penalties and all other liabilities whatsoever that the Corporation may
incur (or may be claimed against the Corporation by any person whatsoever) (i)
by reason of any untrue statement or alleged untrue statement relating to the
Issuer or of any material fact contained or incorporated by reference in the
Preliminary and Final Official Statements or Preliminary or Final Reoffering
Circular, or supplements thereto, relating to the Variable Rate Bonds, or the
omission or alleged omission to state therein a material fact relating to the
Issuer or necessary to make such statements, in the light of the circumstances
under which they are or were made, not misleading (excluding any materials
expressly provided for inclusion therein by the Corporation or Financial
Guaranty Insurance Company); provided that the Issuer shall not be required to
indemnify the Corporation for any costs of defending third party claims or
liabilities to the extent, but only to the extent, such claims or liabilities
arise due to the willful misconduct or gross negligence of the Corporation or
are attributable to information concerning the Corporation or Financial
Guaranty Insurance Company expressly for use in the Official Statement or
Preliminary or Final Reoffering Circular, or supplements thereto. The
Corporation will promptly notify the Issuer upon becoming aware of any claims
or liabilities giving rise to a right to indemnification hereunder and will
cooperate with the Issuer in the defense of such claims or liabilities. Nothing
in this Section is intended to limit the Issuer's obligations contained in
other parts of this Agreement. The Issuer will not refer to the Corporation in
any materials used in marketing the Variable Rate Bonds without the prior
written consent of the Corporation. The Corporation hereby agrees to provide
the Issuer with any disclosure information which the Issuer may reasonably
request relating to the Corporation for inclusion in the Preliminary and Final
Official Statements relating to the Variable Rate Bonds.
5. Term of the Standby Bond Purchase Agreement. As further provided
in the Standby Bond Purchase Agreement, the term of the Standby Bond Purchase
Agreement shall be until the later of (i) the termination of the Commitment in
its entirety and (ii) payment in full of the principal of and interest on all
Variable Rate Bonds purchased by the Corporation pursuant to the Standby Bond
Purchase Agreement and payment in full of any other amounts required to be paid
by the Issuer pursuant to any provision of this Agreement. Any termination by
the Corporation or by the Trustee shall be subject to the Issuer's payment in
full of all sums due pursuant to this Agreement and, notwithstanding a
termination of the Standby Bond Purchase Agreement by either the Corporation or
the Trustee, the provisions of Section 5 shall survive such termination and
shall remain in full force and effect.
6. Issuer Representations and Warranties. The Issuer represents and
warrants that, as of the date on which this Agreement is executed:
(a) Existence. The Issuer is validly existing as a public benefit
corporation under the laws of the State of New York, including the state
constitution, with full right and power to issue the Bonds and to execute,
deliver and perform its obligations under this Agreement and each Related
Document.
(b) Authorization; Contravention. The execution, delivery and
performance by the Issuer of this Agreement and each Related Document are
within the Issuer's powers, have been duly authorized by all necessary action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not violate or contravene, or constitute a default
under, any provision of applicable law, charter, ordinance or regulation or of
any material agreement, judgment, injunction, order, decree or other instrument
binding upon the Issuer or result in the creation or imposition of any lien or
encumbrance on any asset of the Issuer.
(c) Binding Effect. This Agreement and each Related Document
constitutes a valid, binding and enforceable agreement of the Issuer, subject
to applicable laws affecting creditors' rights generally.
(d) No Default. It is not, in any material respect, in breach of or
default under its charter or other similar documents, or any applicable law or
administrative regulation of the State or of the United States, relating, in
each case, to the issuance of debt securities by it, or any applicable
judgment, decree, loan agreement, note, resolution, ordinance, agreement or
other instrument to which it is a party or is otherwise subject. Late delivery
of financials or other reporting materials shall not be deemed material for
purposes of this Section as long as said materials are delivered within 180
days of the applicable due date.
(e) Litigation. Except as disclosed in the Official Statement with
respect to the Bonds, there is no action, suit or proceeding pending against,
or to the knowledge of the Issuer threatened against or affecting, the Issuer
before any court or arbitrator or any governmental body, agency or official in
which there is a reasonable possibility of an adverse decision which could
materially adversely affect the financial position or results of operations of
the Issuer or which in any manner draws into question the validity or
enforceability of this Agreement or any Related Document.
(f) No Sovereign Immunity. The defense of sovereign immunity is not
available to the Issuer in any proceeding by the Corporation to enforce any of
the obligations of the Issuer under this Agreement or the Bonds and, to the
fullest extent permitted by law, the Issuer consents to the initiation of any
such proceeding in any federal or state court of competent jurisdiction located
in the State of New York and agrees not to assert the defense of sovereign
immunity in any such proceeding.
7. New York Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York. Concurrently with the
execution and delivery hereof, the Issuer shall deliver an opinion of its
general counsel, addressed to, and in form and substance acceptable to, the
Corporation, as to the power, authority and valid and binding effect of this
Agreement upon the Issuer, subject only to the customary creditors' rights
exceptions.
8. Covenants. The Issuer agrees that so long as the Corporation has a
Commitment hereunder or any amount payable hereunder or under any Bond
purchased by the Corporation pursuant to this Agreement remains unpaid:
(a) Information. The Issuer will deliver to the Corporation as soon
as possible and in any event within 120 days after the end of each Fiscal Year
of the Issuer, a balance sheet of the Issuer as of the end of such Fiscal Year
and the related statements of revenue and expense, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all certified as
to the fairness of presentation, generally accepted accounting principles and
consistency by a nationally recognized firm of independent certified public
accountants.
(b) No Amendment Without Consent of the Corporation. Without the
prior written consent of the Corporation, the Issuer will not agree or consent
to any amendment, supplement or modification of any Related Document, nor waive
any provision thereof.
(c) Maintenance of Remarketing Agent. The Issuer will at all times
cause the Issuer to have a Remarketing Agent performing the duties thereof
contemplated by the Authorizing Document.
9. Capacity of Trustee. The Trustee is entering into this Agreement
solely in its capacity as Trustee under the Authorizing Document and the
duties, powers and liabilities of the Trustee in acting hereunder shall be
subject to the provisions of the Authorizing Document, including, without
limitation, the provisions of Article _______________________ of the Indenture
thereof.
10. Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
, as Trustee
By:_______________________
Title:
Address:
Attention:
Fax Number:
Telephone Number:
, as Issuer
By:________________________
Title:
Address:
Attention:
Fax Number:
Telephone Number:
FGIC SECURITIES PURCHASE, INC.
By:____________________________
Title: Vice President
115 Broadway
New York, New York 10006
Attention: President
Copy To: Managing Counsel
Fax Number: (212) 312-3219
Telephone Number: (212) 312-3000
<PAGE>
EXHIBIT A
OPINION OF COUNSEL FOR THE ISSUER
____ __, 199_
- --------------------------------
Attention: ____________________
FGIC Securities Purchase, Inc.
115 Broadway
New York, New York 10006
Re:
Dear Sirs:
We have acted as counsel for the _______________ in
connection with (i) the Standby Bond Purchase Agreement dated as of
_______________ (the "Standby Bond Purchase Agreement") between FGIC Securities
Purchase, Inc. and ________________ , as Trustee, (ii) the _________________
between the Issuer and the Trustee dated as of ________________ relating to the
Variable Rate Bonds described therein (the "Authorizing Document") and (iii)
the Payment Agreement among the Issuer,, the Trustee and FGIC Securities
Purchase, Inc. dated as of _______________ (the "Payment Agreement"). The
Standby Bond Purchase Agreement, the Authorizing Document and the Payment
Agreement are hereinafter referred to as the "Agreements". You have requested
our opinion as to certain matters concerning the Agreements. Terms defined in
the Standby Bond Purchase Agreement or in the Payment Agreement are used herein
as defined therein.
<PAGE>
____ __, 199_
Page Two
Based on our examination of existing law, the Agreements, such legal
proceedings and such other documents as we deem necessary to render this
opinion, we are of the opinion that:
1. The Issuer is duly incorporated and is validly existing as a
company in good standing under the laws of _______________.
2. The Payment Agreement has been duly executed and delivered by the
Issuer pursuant to due authorization and the Payment Agreement constitutes the
valid and binding agreement of the Issuer enforceable against the Issuer in
accordance with its terms, except as (x) limited by insolvency, reorganization,
receivership, conservatorship, liquidation, moratorium or other similar laws
affecting the enforcement of creditors' rights generally as such laws would
apply in the event of the insolvency, reorganization, receivership,
conservatorship or liquidation of, or other similar occurrence with respect to,
the Issuer or in the event of any moratorium or similar occurrence affecting
the Issuer, (y) limited by equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law) and
(z) the indemnification provisions thereof may be limited by Federal securities
laws.
3. The execution and delivery by the Issuer of, and the performance
by the Issuer of its obligations under, the Payment Agreement will not
contravene any provision of applicable law or the Restated Articles of
Incorporation or By-laws, each as amended, of the Issuer or any material
agreement or other instrument binding upon the Issuer known to us, and no
consent, approval or authorization of any governmental body or agency (which
has not been obtained) is required for the performance by the Issuer of its
obligations under the Payment Agreement.
4. Except as disclosed in _______________________________ 's
Registration Statement on Form S- (Registration No. 333- _________ ) in the
form it became effective with the Securities and Exchange Commission, there is
no action, suit or proceeding pending against, or to the best of our knowledge,
threatened against, the Issuer before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
financial position or results of operations of the Issuer or which in any
manner draws into question the validity or enforceability of the Payment
Agreement.
Very truly yours,
_____________________
Counsel for Issuer
Exhibit 24(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholder
FGIC Securities Purchase, Inc.
We consent to incorporation by reference in the registration statement
on Form S-3, as amended (File No. 333-43729) of FGIC Securities Purchase, Inc.
of our report dated January 17, 1998, relating to the financial statements of
FGIC Securities Purchase, Inc. as of December 31, 1997 and 1996, and for each
of the years in the three-year period ended December 31, 1997 included in the
1997 Form 10-K of FGIC Securities Purchase, Inc. and to the reference of our
firm under the heading "Experts" in the Form S-3.
/s/ KPMG Peat Marwick LLP
New York, New York
December 30, 1998
