As filed with the Securities and Exchange Commission on January 5, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
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.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of each class of maximum maximum
Securities to be Amount to be aggregate aggregate Amount of
registered registered per unit* offering price* registration fee
Liquidity Facility Obligations $1,000,000,000 100% $1,000,000,000 $295,000
<S> <C> <C> <C> <C>
</TABLE>
* Estimated solely for the purpose of determining the registration fee.
-------------------------
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.
$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.
Unless otherwise specified in a prospectus supplement to the Prospectus
(a "Prospectus Supplement"), the Obligations will be issued from time to time
to provide liquidity for certain adjustable or floating rate Securities
issued by municipal or other issuers. The specific terms of the Obligations
and the Securities to which they relate will be set forth in 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 January 5, 1997.
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.
-------------------
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, 1996;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997; (iii) the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997; and (iv) the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997, all heretofore filed
with the Commission pursuant to Section 13 of the 1934 Act, to which
reference is hereby made.
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.
SUMMARY
The proposed structure will be utilized to provide liquidity through a
"put" mechanism for floating or adjustable rate securities and other
derivative debt 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") or upon
certain other events. 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"). 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 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 standby loan
agreements with one or more financial institutions (the "Standby Lenders")
under which the Standby Lenders 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 of
non-payment, default or insolvency on the part of the issuer or other
specified entity. 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, 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 the highest ratings 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.
Unless otherwise specified in a Prospectus Supplement, 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 Standby Lenders under which the Standby Lenders 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 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
one or more Standby Lenders under which the Standby Lenders 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 a Standby Lender will guarantee the Securities to which its
Standby Loan Agreement relates or FGIC-SPI's obligation under any Standby
Purchase Agreement. Standby Lenders will be identified in the appropriate
Prospectus Supplement.
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.
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, 1996 and 1995, and for each of the years in the three-year
period ended December 31, 1996, appearing in FGIC Securities Purchase, Inc.'s
1996 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.
No dealer, salesman or any $1,000,000,000
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 principal amount
FGIC-SPI. This Prospectus does not plus interest and premium,
constitute an offer or solicitation if any
by anyone in any jurisdiction in
which an offer or solicitation is LIQUIDITY FACILITY OBLIGATIONS
not authorized or in which the
person making such offer or issued by
solicitation is not qualified to do
so or to anyone to whom it is
unlawful to make such offer or
solicitation. FGIC Securities
Purchase, Inc.
TABLE OF CONTENTS PROSPECTUS
Page
----
January 5, 1997
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 . . . . . . 6
Legal Matters . . . . . . . . . . 7
Experts . . . . . . . . . . . . . 7
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.
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 (included in Registration Statement at page
II-5).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. (1) 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 January 2, 1997.
FGIC SECURITIES PURCHASE, INC.
By:/s/Ann C. Stern
----------------------------
Ann C. Stern
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Ann C. Stern or Christopher Jacobs, or either of them, his or her
true and lawful attorney-in-fact and agent, with full powers of substitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign and to file any and all amendments, including post-
effective amendments, to this Registration Statement, with the Securities and
Exchange Commission, granting to said attorneys-in-fact full power and
authority to perform and other act on behalf of the undersigned required to
be done in connection therewith.
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.
Signature Title Date
--------- ----- ----
By: /s/Ann C. Stern President (principal January 2, 1997
------------------ executive officer),
Ann C. Stern Director
By: /s/Christopher Jacobs Treasurer (principal January 2, 1997
--------------------- financial and
Christopher Jacobs accounting officer),
Director
By: /s/A. Edward Turi, III Director January 2, 1997
----------------------
A. Edward Turi, III
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 (included in Registration Statement at page
II-5).
Exhibit 4.1
STANDBY BOND PURCHASE AGREEMENT
dated as of
between
and
FGIC SECURITIES PURCHASE, INC.
TABLE OF CONTENTS*
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Interpretation; Incorporation of Certain
Definitions by Reference . . . . . . . . . . . . . . . . . . 3
ARTICLE II
COMMITMENT TO PURCHASE BONDS
SECTION 2.01 Commitment to Purchase Bonds . . . . . . . . . . . . . . . . 4
2.02 Method of Purchasing . . . . . . . . . . . . . . . . . . . 4
2.03 Termination of Commitment . . . . . . . . . . . . . . . . . .5
2.04 Sale of Bonds . . . . . . . . . . . . . . . . . . . . . . . .5
2.05 Reduction of Available Commitment . . . . . . . . . . . . . .5
2.06 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.07 Corporation Rate . . . . . . . . . . . . . . . . . . . . . .6
2.08 General Provisions as to Payments . . . . . . . . . . . . . .6
ARTICLE III
CONDITIONS
SECTION 3.01 Conditions to Effectiveness . . . . . . . . . . . . . . . 6
3.02 Conditions to Purchase . . . . . . . . . . . . . . . . . . .7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Existence . . . . . . . . . . . . . . . . . . . . . . . . 7
4.02 Authorization; Contravention . . . . . . . . . . . . . . . .7
4.03 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . .7
4.04 No Default. . . . . . . . . . . . . . . . . . . . . . . . . .8
4.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . .8
4.06 No Sovereign Immunity . . . . . . . . . . . . . . . . . . . .8
4.07 Incorporation of Representations and
Warranties by Reference . . . . . . . . . . . . . . . . . .8
_______________________
* The Table of Contents is for convenience of reference only and is not a
part of this Agreement.
Page
----
ARTICLE V
COVENANTS
SECTION 5.01 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.02 No Amendment of the GE Capital
Agreement Without Consent of
Issuer and Trustee; Incorporation
of Certain Covenants . . . . . . . . . . . . . . . . . . .9
5.03 Other Liquidity Facilities . . . . . . . . . . . . . . . . .9
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . 9
6.02 Termination Events . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.02 No Waivers . . . . . . . . . . . . . . . . . . . . . . . . 12
7.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.04 Indemnification . . . . . . . . . . . . . . . . . . . . . . 12
7.05 Amendments and Waivers . . . . . . . . . . . . . . . . . . 13
7.06 Successors and Assigns . . . . . . . . . . . . . . . . . . 13
7.07 Term of this Agreement. . . . . . . . . . . . . . . . . . . 13
7.08 New York Law . . . . . . . . . . . . . . . . . . . . . . . 13
7.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 13
7.10 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . 14
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
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).
"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 (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 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 15th 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.
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
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,
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.
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:
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:
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:
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
(Trustee)
(Municipality)
(Tender Agent)
(Remarketing Agent)
(Date)
Page Two
of business on the 15th 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)
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)
TABLE OF CONTENTS*
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions
1.02 Incorporation of Certain Definitions
by Reference
ARTICLE II
COMMITMENT TO PURCHASE VARIABLE RATE BONDS
SECTION 2.01 Commitment to Purchase
Variable Rate Bonds
2.02 Method of Purchasing
2.03 Termination of Commitment
2.04 Sale of Variable Rate Bonds
2.05 Reduction of Available Commitment
ARTICLE III
CONDITIONS
SECTION 3.01 Conditions to Effectiveness
3.02 Conditions to Purchase
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Existence
4.02 Authorization
4.03 Corporation Existence
4.04 Authorization; Binding Effect
4.05 Contravention; No Default
4.06 Litigation
______________________
* The Table of Contents is not a part of this Agreement.
Page
----
ARTICLE V
COVENANTS
SECTION 5.01 No Amendment of the GE Capital
Agreement Without Consent of
Issuer, Developer and Trustee
5.02 Other Liquidity Facilities
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Notices
7.02 No Waivers
7.03 Amendments and Waivers
7.04 Successors and Assigns
7.05 Term of this Agreement
7.06 New York Law
7.07 Counterparts
7.08 Trustee May Act through Agents and
Appoint Co-Trustees
7.09 Beneficiaries
7.10 Capacity of Trustee
Exhibit 1 - Notice of Purchase
Exhibit 2 - Termination Notice
Exhibit 3 - Notice Addresses
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 Corporation.
"GE Capital Agreement" means the Standby Loan Agreement, dated as of
, by and between the Corporation and GE Capital Corporation.
"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 Rating 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
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 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, 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.
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
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.
FGIC Securities Purchase, Inc. (Date)
The Purchase Price should be provided in immediately available funds on
the Purchase Date.
Very truly yours,
(TRUSTEE/TENDER AGENT)
By:______________________________
Name:
Title:
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
____ __, 199_
Page Two
of business on the date which is the 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:
EXHIBIT 3
NOTICE ADDRESSES
----------------
As set forth herein and in the Authorizing Document
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 creditor's 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.
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
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.
____ __, 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
January 5, 1997
FGIC Securities Purchase, Inc.
115 Broadway
New York, New York 10006
Ladies and Gentlemen:
As your counsel, we have examined a copy of the Certificate of
Incorporation, as amended, of FGIC Securities Purchase, Inc. (hereinafter
called the "Company"), certified by the Secretary of State of the State of
Delaware. We are familiar with the corporate proceedings held in connection
with the proposed issuance and sale by the Company of up to $1,000,000,000
aggregate amount of liquidity facility obligations (the "Obligations") and
have examined the Company's Registration Statement on Form S-3 relating to
the Obligations (the "Registration Statement") and the forms of Standby Bond
Purchase Agreement to be entered into between the Company and the issuer of
the securities filed as Exhibit 4.1 and Exhibit 4.2 to the Registration
Statement (the "Standby Bond Purchase Agreements").
Based upon the foregoing and upon such further investigation as we
deemed relevant in the premises, we are of the opinion that:
1. The Company has been duly incorporated under the laws of the State
of Delaware.
2. That each of the Standby Bond Purchase Agreements has been duly and
validly authorized and, when executed and delivered by the Company, will
constitute a valid and binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws of general applicability relating to or
affecting enforcement of creditors' rights or by general equity principles.
3. When the issuance of the Obligations have been duly authorized by
the Company as contemplated by the Standby Bond Purchase Agreements, such
Obligations will constitute valid and legally binding obligations,
enforceable in accordance with their terms, except that enforcement may be
limited by bankruptcy, insolvency or other laws of general applicability
relating to or affecting enforcement of creditor's rights or by general
equity principles.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name wherever appearing in the
Registration Statement and any amendment thereto.
Very truly yours,
/s/ Brown & Wood LLP
------------------------------------
------------------------------------
FGIC SECURITIES PURCHASE, INC.
AND
GENERAL ELECTRIC CAPITAL CORPORATION
STANDBY LOAN AGREEMENT
DATED AS OF ______ __, 19__
------------------------------------
------------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
Parties and Recitals ...................................... 1
ARTICLE I
DEFINITIONS
<PAGE>
SECTION 1.1 Definitions............................... 1
ARTICLE II
LOAN PROVISIONS
SECTION 2.1 Commitment.............................. 3
SECTION 2.2 Amount and Purpose of Loans............. 4
SECTION 2.3 Borrowing Procedures.................... 4
SECTION 2.4 Disbursement of Funds................... 4
SECTION 2.5 Note.................................... 4
SECTION 2.6 Interest................................ 5
ARTICLE III
COMMITMENT
SECTION 3.1 Commitment Fees............................ 5
SECTION 3.2 Reduction or Termination of the Commitment. 5
ARTICLE IV
PAYMENTS
SECTION 4.1 Voluntary Prepayments..................... 6
SECTION 4.2 Mandatory Prepayments..................... 6
SECTION 4.3 Repayment of Loans by Transfer of Tendered
Bonds..................................... 6
SECTION 4.4 Payments.................................. 7
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the
Borrower.................................. 7
SECTION 5.2 Representations and Warranties of GE
Capital................................... 9
ARTICLE VI
COVENANTS
SECTION 6.1 Covenants of the Borrower................... 10
<PAGE>
SECTION 6.2 Covenants of GE Capital..................... 11
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1 Conditions Precedent to Effectiveness....... 12
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Events of Default.......................... 12
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 No Waiver; Modifications in Writing........ 13
SECTION 9.2 Payment on Non-Business Days............... 14
SECTION 9.3 Further Assurances......................... 14
SECTION 9.4 Survival of Representations and Warranties. 14
SECTION 9.5 Notices, etc............................... 14
SECTION 9.6 Costs, Expenses and Taxes.................. 15
SECTION 9.7 No GE Capital Liability.................... 15
SECTION 9.8 Term of this Agreement..................... 15
SECTION 9.9 Execution in Counterparts.................. 15
SECTION 9.10 Binding Effect; Assignment................. 15
SECTION 9.11 Governing Law.............................. 16
SECTION 9.12 Severability of Provisions................. 16
SECTION 9.13 Headings................................... 16
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C -- Borrower's Opinion of Counsel
EXHIBIT D -- GE Capital's Opinion of Counsel
STANDBY LOAN AGREEMENT
----------------------
STANDBY LOAN AGREEMENT dated as of _______ __, 19__ between FGIC
Securities Purchase, Inc., a Delaware corporation (the "Borrower"), and
General Electric Capital Corporation, a New York corporation ("GE Capital").
WHEREAS, the Borrower desires to borrow amounts from GE Capital from
time to time for the purpose of paying the purchase price of Tendered Bonds
(as defined herein) and GE Capital is prepared to make such loans upon the
terms hereof;
NOW THEREFORE, in consideration of the respective agreements contained
herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1 DEFINITIONS. The following terms as used in this Agreement
-----------
shall have the following meanings, unless the context otherwise requires:
"AGREEMENT" shall mean this Standby Loan Agreement, as the same may from
---------
time to time be amended or supplemented.
"AVAILABLE COMMITMENT" shall mean, at the time any determination thereof
--------------------
is to be made, the amount of the Commitment adjusted as follows: (i)
downward by an amount equal to ______% of the aggregate principal amount of
all Tendered Bonds purchased by the Borrower with the proceeds of Loans made
under this Agreement and (ii) upward by an amount equal to ______% of the
aggregate principal amount of Tendered Bonds which have been sold by the
Borrower in a remarketing pursuant to Section 2.04 of the Standby Bond
Purchase Agreement, the proceeds of which have been delivered to GE Capital
as a prepayment of Loans as required by Section 4.2 of this Agreement.
"BASE RATE" shall mean for any day the Prime Rate for such day plus 1%;
---------
provided that the Base Rate shall at no time exceed the lesser of (a) 25% per
annum and (b) the maximum rate permitted by applicable law.
"BONDS" shall mean the (TITLE OF BONDS) of the Issuer in an aggregate
-----
principal amount not to exceed $___________.
"BORROWING" shall mean the incurrence of a Loan by the Borrower from GE
---------
Capital pursuant to Section 2.3 hereof.
"BORROWING DATE" shall mean the date on which a Borrowing is, or is to
--------------
be, consummated, as the context may indicate; provided that in no event shall
-------- ----
the Borrowing Date be (i) on the same day the Notice of Borrowing is received
if the Notice of Borrowing is received by GE Capital later than 1:00 p.m.
(New York City time), in which case the Borrowing Date shall be the next
succeeding Business Day or (ii) after the last day of the Commitment Period.
"BUSINESS DAY" shall mean a day (a) other than a day on which commercial
------------
banks in The City of New York (OR OTHER CITY) are required or authorized by
law or executive order to close and (b) on which the New York Stock Exchange
is not closed.
"COMMITMENT" shall mean, initially $______________, and thereafter, at
----------
the time any determination thereof is to be made, such initial amount reduced
by the amount of any permanent reduction(s) in such amount made pursuant to
Section 3.2 hereof.
"COMMITMENT FEE" shall have the meaning assigned to that term in Section
--------------
3.1 hereof.
"COMMITMENT PERIOD" shall mean the period commencing with and including
-----------------
the Effective Date and ending on and including the Commitment Termination
Date.
"COMMITMENT TERMINATION DATE" shall mean the date which is (FIVE) years
---------------------------
from the Effective Date; provided that if such date is not a Business Day,
--------
the Business Day immediately succeeding such date.
"DEFAULT" shall mean an event, act or occurrence which with the giving
-------
of notice or the lapse of time (or both) would become an Event of Default.
"EFFECTIVE DATE" shall have the meaning assigned to such term in Section
--------------
7.1 hereof.
"EVENT OF DEFAULT" shall have the meaning assigned to that term in
----------------
Section 8.1 hereof.
"ISSUER" shall mean (______________).
------
"LOAN" or "LOANS" shall have the meaning provided in Section 2.1.
---- -----
"NOTE" shall have the meaning provided in Section 2.5.
----
"NOTICE OF BORROWING" shall have the meaning provided in Section 2.3.
-------------------
"PERSON" shall mean an individual or a corporation, partnership, trust,
------
firm, incorporated or unincorporated association, joint venture, joint stock
company, unincorporated organization, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PRIME RATE" shall mean the rate of interest publicly announced by
----------
Morgan Guaranty Trust Company of New York from time to time as its Prime
Rate.
"REMARKETING AGENT" means the entity designated as such in the Bonds and
-----------------
its permitted successors and assigns.
"REMARKETING AGREEMENT" shall mean the Remarketing Agreement between the
---------------------
Issuer and the Remarketing Agent relating to the Bonds.
"STANDBY BOND PURCHASE AGREEMENT" shall mean the Standby Bond Purchase
-------------------------------
Agreement, dated as of the date hereof, between the Borrower and the Issuer
(the Trustee).
"TENDER AGENT" shall mean the entity designated as such in the Bonds and
------------
its permitted successors and assigns.
"TENDERED BONDS" shall mean Bonds tendered or deemed tendered to the
--------------
Tender Agent for purchase pursuant to the terms of the Bonds and for which
the Borrower has received a notice of purchase pursuant to Section 2.02 of
the Standby Bond Purchase Agreement.
"TRANSFER NOTICE" shall have the meaning provided in Section 4.3.
---------------
("TRUSTEE" shall mean __________, and its permitted successors and
-------
assigns.)
ARTICLE II
LOAN PROVISIONS
---------------
SECTION 2.1 COMMITMENT. Upon the terms and subject to the conditions
----------
of this Agreement, GE Capital will make loans (each a "Loan" and,
collectively, the "Loans") to the Borrower during the Commitment Period, in
an aggregate principal amount outstanding at any time up to but not exceeding
the Commitment.
SECTION 2.2 AMOUNT AND PURPOSE OF LOANS. Each Loan shall be in an
---------------------------
amount not exceeding the purchase price for Tendered Bonds which represents
the outstanding principal amount of such Tendered Bonds together with accrued
interest thereon to but excluding the Borrowing Date, and each Loan shall
mature on the Commitment Termination Date. The proceeds of each Loan shall
be used only for the purpose of paying such purchase price for Tendered
Bonds.
SECTION 2.3 BORROWING PROCEDURES. Whenever the Borrower desires to
--------------------
make a Borrowing hereunder, its duly authorized representative shall give GE
Capital at its office located at 201 High Ridge Road, Stamford, Connecticut
06927; Attention: Senior Vice President - Corporate Treasury and Global
Funding Operation, Telecopy: 203-357-4975, prior written notice of such
Borrowing by at least 11:45 A.M., New York City time, on the proposed
Borrowing Date. Each such notice (each a "Notice of Borrowing") shall be
substantially in the form of Exhibit A attached hereto, and shall specify the
aggregate principal amount the Borrower desires to borrow hereunder, the
aggregate principal amount of Tendered Bonds being purchased with the
proceeds of such Borrowing, the proposed Borrowing Date (which shall be a
Business Day), the place where the proceeds of such Borrowing shall be made
available and whether the Borrowing is to be made available in immediately
available or next-day funds.
SECTION 2.4 DISBURSEMENT OF FUNDS. No later than 2:15 P.M. (New York
---------------------
City time) on each Borrowing Date (if the related Notice of Borrowing has
been received by 11:45 A.M. (New York City time) on such date), GE Capital
will make available the amount of the Borrowing requested to be made on such
date in U.S. dollars, in the funds specified in the Notice of Borrowing and
pursuant to the instructions specified in the Notice of Borrowing.
SECTION 2.5 NOTE. (a) The Borrower's obligation to pay the principal
----
of, and interest on, the Loans shall be evidenced by a single promissory note
(the "Note") substantially in the form of Exhibit B hereto with the blanks
appropriately completed in conformity herewith. The Note shall (i) be
payable to the order of GE Capital (ii) be dated the date of this Agreement,
(iii) be in a stated principal amount equal to the Commitment on the date of
issuance, (iv) be payable in the principal amount of the Loans evidenced
thereby, (v) mature on the Commitment Termination Date, (vi) bear interest as
provided in Section 2.6 in respect of the Loans evidenced thereby, and (vii)
be entitled to the benefits of this Agreement.
(b) The date and amount of each Loan made by GE Capital and of each
repayment of principal thereon received by GE Capital shall be recorded by GE
Capital on the Loan and Repayment Schedule attached to the Note, and the
aggregate unpaid principal amount shown on such Schedule shall be rebuttable
presumptive evidence of the principal amount owing and unpaid
on such Note. The failure to record or any error in recording any such
amount on such Schedule shall not, however, limit, increase or otherwise
affect the obligations of the Borrower hereunder or under the Note to repay
the outstanding principal amount of the Loans together with all interest
accruing thereon.
SECTION 2.6 INTEREST. (a) The Borrower agrees to pay interest in
--------
respect of the unpaid principal amount of each Loan at a rate per annum which
shall be the Base Rate in effect from time to time.
(b) Interest shall be calculated on the basis of a year of 365 days (or
on 366 days in a leap year) and paid for the actual number of days elapsed to
the day of payment.
(c) Overdue principal and overdue interest in respect of each Loan
shall bear interest at a rate per annum equal to the lesser of (i) 2% in
excess of the Base Rate in effect from time to time, (ii) 25% and (iii) the
maximum rate permitted by applicable law.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable on
the first day of each calendar month and on any prepayment or at maturity
(whether by acceleration or otherwise), and after such maturity, on demand.
ARTICLE III
COMMITMENT
----------
SECTION 3.1 COMMITMENT FEES. (a) In consideration of the commitment
---------------
of GE Capital to make Loans to the Borrower under the terms hereof, the
Borrower hereby agrees to pay GE Capital a fee (herein called the "Commitment
Fee") which shall be in the amounts, and shall be payable on the dates,
mutually agreed to by the Borrower and GE Capital.
(b) In addition, the Borrower shall pay GE Capital on the Effective
Date an initial fee in an amount mutually agreed to by the Borrower and GE
Capital.
SECTION 3.2 REDUCTION OR TERMINATION OF THE COMMITMENT. (a) The
------------------------------------------
Borrower shall have the right at any time and from time to time, to
permanently reduce in part, or to terminate in whole, without penalty or
premium, the Commitment upon not less than one Business Day prior notice (by
telex, telegram or telecopier) received by GE Capital, designating the date
(which shall be a Business Day) of such reduction or termination and the
amount of any partial reduction. Such partial reduction or termination of
the Commitment shall be effective on the date specified in the Borrower's
aforesaid notice.
(b) GE Capital and the Borrower hereby agree that neither of them will
exercise any right to terminate this Agreement pursuant to Section 3.2(a)
hereof so long as any obligations pursuant to Section 2.01 of the Standby
Bond Purchase Agreement remain outstanding; provided, that if the Borrower
--------
exercises any termination right under Section 2.03 of the Standby Bond
Purchase Agreement, the result of which is to terminate the Commitment
thereunder (and as defined therein), a termination hereof may be effected.
ARTICLE IV
PAYMENTS
--------
SECTION 4.1 VOLUNTARY PREPAYMENTS. The Borrower shall have the right
---------------------
to prepay the Loans in whole or in part, without premium or penalty, from
time to time upon at least one Business Day prior written notice (or
telephonic notice confirmed in writing).
SECTION 4.2 MANDATORY PREPAYMENTS. In the event any Tendered Bonds
---------------------
purchased by the Borrower with the proceeds of Loans made available hereunder
are either (i) remarketed in accordance with the terms of the Remarketing
Agreement, (ii) sold by the Borrower (other than pursuant to a remarketing as
described in clause (i) above) to a party or parties other than GE Capital or
(iii) redeemed or otherwise paid by or on behalf of the Issuer, the Borrower
shall immediately (in no event later than the next Business Day) deliver, or
cause to be delivered, to GE Capital the purchase price for such Tendered
Bonds. Upon receipt of such payment GE Capital shall apply such payment as a
prepayment of the Loans, such amount to be applied first to reduce any
interest accrued but unpaid on the Loans and then applied to reduce the
principal amount of any Loans then outstanding. In connection with any
prepayment made in accordance with clause (i) above, the Borrower shall
include with such prepayment a notice specifying the aggregate principal
amount of Tendered Bonds which were sold in the remarketing giving rise to
such prepayment.
SECTION 4.3 REPAYMENT OF LOANS BY TRANSFER OF TENDERED BONDS. (a) GE
------------------------------------------------
Capital shall have the right, in its sole discretion, at any time during the
term of this Agreement, to give written notice (each a "Transfer Notice") to
the Borrower requesting that the Borrower transfer to GE Capital, in
satisfaction of the payment of outstanding Loans, Tendered Bonds then held by
the Borrower. Upon receipt of such notice, the Borrower shall immediately
(in no event later than the next Business Day) transfer, or cause to be
transferred, to (or at the direction of) GE Capital such Tendered Bonds at
the address specified in the Transfer Notice. GE Capital shall treat the
receipt of the aggregate principal amount of such Tendered Bonds plus accrued
interest thereon as a prepayment of the Loans, such amount to be applied
first to reduce any interest accrued but unpaid on the Loans and then
applied to reduce the principal amount of any Loans then outstanding.
(b) On the Commitment Termination Date, the Borrower shall have the
right to deliver, or cause to be delivered, to (or at the direction of) GE
Capital all Tendered Bonds then held by the Borrower in payment for all or
any portion of the Loans outstanding on such date. GE Capital shall treat
the receipt of the aggregate principal amount of such Tendered Bonds plus
accrued interest thereon as a repayment of the Loans, such amount to be
applied first to reduce any interest accrued but unpaid on the Loans and then
applied to reduce the principal amount of the Loans then outstanding.
(c) GE Capital expressly reserves the right to sell Tendered Bonds
received by it pursuant to this Section 4.3. Any Tendered Bonds sold by GE
Capital pursuant to this Section 4.3 shall bear interest at the same rate and
be subject to the same terms and conditions as applied prior to such Bonds'
becoming Tendered Bonds; provided, however, that Tendered Bonds shall not be
-------- -------
entitled to the benefits of tender and purchase under Sections 2.01 and 2.02
of the Standby Bond Purchase Agreement.
(d) For purposes of this Section 4.3, the aggregate principal amount of
Tendered Bonds shall mean the aggregate face amount of such Tendered Bonds.
SECTION 4.4 PAYMENTS. All payments to be made by or on behalf of the
--------
Borrower to GE Capital hereunder (other than as contemplated under Section
4.3 above), whether on account of principal or interest on the Loans, the
Commitment Fee or other amounts at any time owing hereunder or in connection
herewith, shall be made to GE Capital at Bankers Trust Company - New York,
Account Number 50-001-677, in immediately available funds. All such payments
shall be made to GE Capital not later than noon, New York City time, on the
date due; and funds received by GE Capital as aforesaid after that hour shall
be deemed to have been received by GE Capital on the next succeeding Business
Day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
----------------------------------------------
Borrower represents and warrants to GE Capital as follows:
(a) CORPORATE STATUS. The Borrower is a corporation duly
----------------
organized and validly existing in good standing under the laws of the
State of Delaware. The Borrower is duly qualified to transact business
and is in good standing in the jurisdictions in which the conduct of
its business or the ownership of its property requires such
qualification.
(b) POWER AND AUTHORIZATION. The Borrower has the corporate
-----------------------
power and authority (i) to execute, deliver and perform this Agreement and
the Note, (ii) to issue the Note in the manner and for the purpose
contemplated by this Agreement, and (iii) to execute, deliver and perform all
other agreements and instruments to be executed and delivered by the Borrower
pursuant to or in connection with this Agreement.
(c) NO VIOLATION. The execution, delivery and performance
------------
by the Borrower of this Agreement, the issuance of the Note in the manner and
for the purpose contemplated by this Agreement and the execution, delivery
and performance by the Borrower of all other agreements and instruments to be
executed and delivered by the Borrower pursuant hereto or thereto or in con-
nection herewith or therewith (i) will not violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or any applicable law
or regulation or any order, writ, judgment or decree of any court, arbitrator
or governmental authority, and (ii) will not violate any provision of,
constitute a default under, or result in the creation or imposition of any
lien on any of the assets of the Borrower pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which the
Borrower is a party or which purports to be binding upon the Borrower or upon
any of its assets.
(d) GOVERNMENTAL APPROVALS. No order, consent, approval,
----------------------
license, authorization or validation of, or filing, recording or registration
with (except as will have been obtained or made prior to the Effective Date),
or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance by the Borrower of this
Agreement or the Note or (ii) the legality, validity, binding effect or
enforceability against the Borrower of this Agreement or the Note.
(e) ENFORCEABILITY. This Agreement has been duly authorized,
--------------
executed and delivered by the Borrower. This Agreement constitutes, and each
other agreement or instrument executed and delivered by the Borrower pursuant
hereto or in connection herewith will constitute, and the Note, when executed
by the Borrower, will be duly issued and will constitute, the legal, valid
and binding obligation of the Borrower enforceable against the
Borrower in accordance with its respective terms, except as the enforcement
thereof may be limited by bankruptcy and other similar laws of
general application relating to creditors' rights or general principles
of equity.
SECTION 5.2 REPRESENTATIONS AND WARRANTIES OF GE CAPITAL. GE Capital
--------------------------------------------
represents and warrants to the Borrower as follows:
(a) CORPORATE STATUS. GE Capital is a corporation duly
----------------
organized and validly existing in good standing under the laws of the State
of New York.
(b) POWER AND AUTHORIZATION. GE Capital has the corporate
-----------------------
power and authority (i) to execute, deliver and perform this Agreement and
(ii) to execute, deliver and perform all other agreements and instruments to
be executed and delivered by GE Capital pursuant to or in connection with
this Agreement.
(c) NO VIOLATION. The execution, delivery and performance
------------
by GE Capital of this Agreement and the execution, delivery and performance
by GE Capital of all other agreements and instruments to be executed and
delivered by GE Capital pursuant hereto or in connection herewith, (i) will
not violate any provision of the Organization Certificate or By-Laws of GE
Capital or any applicable law or regulation or any order, writ, judgment or
decree of any court, arbitrator or governmental authority, and (ii) will not
violate any provision of, or constitute a default under, any mortgage,
indenture, contract, agreement or other undertaking to which GE Capital is a
party or which purports to be binding upon GE Capital or upon any of its
assets.
(d) GOVERNMENTAL APPROVALS. No order, consent, approval,
----------------------
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the Effective Date), or
exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of this Agreement by GE
Capital or (ii) the legality, validity, binding effect or enforceability of
this Agreement against GE Capital.
(e) ENFORCEABILITY. This Agreement has been duly authorized,
--------------
executed and delivered by GE Capital. This Agreement constitutes, and each
other agreement or instrument executed and delivered by GE Capital pursuant
hereto or in connection herewith will constitute, the legal, valid and
binding obligation of GE Capital enforceable against GE Capital in accordance
with its respective terms, except as the enforcement thereof may be limited
by bankruptcy and other similar laws of general application relating to
creditors' rights or general principles of equity.
ARTICLE VI
COVENANTS
---------
SECTION 6.1 COVENANTS OF THE BORROWER. The Borrower covenants and
-------------------------
agrees that so long as any Loans shall remain unpaid or GE Capital shall have
any Commitment hereunder:
(a) USE OF PROCEEDS. The Borrower will use the proceeds of
---------------
the Loans solely for the purposes set forth in Section 2.2.
(b) DIVIDEND LIMITATION. The Borrower will not declare or
-------------------
pay any dividend in respect of, or make any distribution in respect of, or
redemption of, any shares of its capital stock.
(c) LIENS. The Borrower will not contract for, create,
-----
incur, assume or suffer to exist any lien, security interest, charge or other
encumbrance of any nature upon any of its property or assets, whether now
owned or hereafter acquired.
(d) OTHER DEBT. The Borrower will not, without the prior
----------
written consent of GE Capital, create, incur, assume or suffer to exist any
indebtedness, whether current or funded, or any other liability except
indebtedness owed to GE Capital.
(e) GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
-------------------------------------------------
Except as contemplated by the Standby Bond Purchase Agreement, the Borrower
will not, without the prior written consent of GE Capital, make any loan or
advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on
any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities
of, or any other interest in, or make any capital contribution to, any other
Person.
(f) CONSOLIDATION, MERGER AND SALE OF ASSETS. The Borrower
----------------------------------------
will not enter into any merger, consolidation, joint venture, syndicate or
other form of combination with any Person, or sell, lease or transfer or
otherwise dispose of any of its assets (other than the sale of Tendered
Bonds in a remarketing permitted by Section 2.04(b) of the Standby Bond
Purchase Agreement) or engage in any other transaction which would
result in a change of control of the Borrower.
(g) CAPITAL EXPENDITURES. The Borrower will not make any
--------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(both realty and personalty).
(h) OTHER BUSINESS. The Borrower will not, without the prior
--------------
written consent of GE Capital, engage in any business or enterprise or enter
into any material transaction which is of a type different than that which is
contemplated by this Agreement and the Standby Bond Purchase Agreement.
(i) AMENDMENT OF CERTIFICATE OF INCORPORATION OR BY-LAWS.
----------------------------------------------------
The Borrower will not amend its Certificate of Incorporation or By-Laws
without the prior written consent of GE Capital.
(j) GOOD STANDING. The Borrower will maintain its corporate
-------------
existence as a corporation validly existing and in good standing under the
laws of the State of Delaware.
(k) NO CHANGES IN DOCUMENTS. The Borrower will not amend,
-----------------------
supplement, modify or waive any of the provisions of the Standby Bond
Purchase Agreement or consent to any amendment, supplement, modification or
waiver of any Related Document (as defined in the Standby Bond Purchase
Agreement), unless the Borrower shall have obtained the prior written consent
of GE Capital.
SECTION 6.2 COVENANTS OF GE CAPITAL. GE Capital covenants and agrees
-----------------------
that, prior to the date which is one year and one day after the Commitment
hereunder has been terminated, GE Capital will not institute against, or join
any other Person in instituting against, the Borrower any bankruptcy,
reorganization arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States of America or any
state of the United States of America.
ARTICLE VII
CONDITIONS PRECEDENT
--------------------
SECTION 7.1 CONDITIONS PRECEDENT TO EFFECTIVENESS. This Agreement
-------------------------------------
shall become effective on the earliest date (the "Effective Date") on which
each of the following conditions shall have been satisfied; provided that the
-------- ----
Effective Date shall occur no later than (DROP-DEAD DATE):
----------------
(a) AGREEMENT. GE Capital and the Borrower each shall have
---------
signed and delivered a counterpart of this Agreement.
(b) THE NOTE. The Borrower shall have executed and delivered
--------
to GE Capital a Note in the form set forth in Exhibit B.
(c) OPINION OF BORROWER'S COUNSEL. GE Capital shall have
-----------------------------
received an opinion of Managing Counsel of Financial Guaranty Insurance
Company, an affiliate of the Borrower, dated the Effective Date, to the
effect set forth in Exhibit C attached hereto.
(d) OPINION OF GE CAPITAL'S COUNSEL. The Borrower shall have
-------------------------------
received an opinion of either the Senior Vice President, General Counsel and
Secretary of GE Capital or the Associate General Counsel, Treasury Operations
and Assistant Secretary of GE Capital, dated the Effective Date, to the
effect set forth in Exhibit D attached hereto.
(e) EFFECTIVENESS OF STANDBY BOND PURCHASE AGREEMENT. The
------------------------------------------------
Standby Bond Purchase Agreement shall have become effective.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
SECTION 8.1 EVENTS OF DEFAULT. If the following events, acts or
-----------------
occurrences (each herein called an "Event of Default") shall occur:
the Borrower shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy," as
now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against the
Borrower and the petition is not controverted within 10 days, or is
not dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower, or
the Borrower commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now
or hereafter in effect relating to the Borrower, or there is commenced
against the Borrower any such proceeding which remains undismissed for a
period of 60 days, or the Borrower is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or the
Borrower makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower for the purpose of effecting
any of the foregoing;
then all sums then owing by the Borrower hereunder and under the Note shall
automatically become and be immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.1 NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay
-----------------------------------
on the part of GE Capital in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
provided for herein are cumulative and are not exclusive of any remedies that
may be available to GE Capital at law or in equity or otherwise. No
amendment, modification, supplement, termination or waiver of or to any
provision of this Agreement, nor consent to any departure by the Borrower
therefrom, shall be effective unless the same shall be in writing and signed
by or on behalf of GE Capital. Any amendment, modification or supplement of
or to any provision of this Agreement, and any consent to any departure by
the Borrower from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for
which made or given. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
SECTION 9.2 PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
----------------------------
made hereunder shall be due on a day which is not a Business Day, then
such payment shall be made on the next succeeding Business Day.
SECTION 9.3 FURTHER ASSURANCES. The Borrower agrees to do such further
------------------
acts and things and to execute and deliver to GE Capital such additional
assignments, agreements, powers and instruments, as GE Capital may require or
deem advisable to carry into effect the purposes of this Agreement or to
better assure and confirm unto GE Capital its rights, powers and remedies
hereunder.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
------------------------------------------
agreements, representations and warranties made in this Agreement and in any
certificates delivered pursuant hereto shall survive the execution and
delivery of this Agreement and the making of the Loans hereunder, and the
agreements contained in Sections 9.3 and 9.6 hereof shall survive payment of
the Note and the termination of this Agreement.
SECTION 9.5 NOTICES, ETC. Except where telephonic instructions or
-------------
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon
any party hereto or any other Person shall be in writing and shall be
personally delivered or sent by registered or certified mail or overnight
courier, postage prepaid, or by telecopy, and shall be deemed to be given for
purposes of this Agreement on the day that such writing is delivered to the
intended recipient thereof in accordance with the provisions of this Section.
Unless otherwise specified in a notice sent or delivered in accordance with
the foregoing provisions of this Section, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telecopy
numbers) indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
If to the Borrower:
FGIC Securities Purchase, Inc.
c/o Financial Guaranty Insurance Company
115 Broadway
New York, New York 10006-4972
Attention: Senior Counsel - Public Finance
Telecopy No.: 212-312-3093
Tel. No.: 212-312-3000
If to GE Capital:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927
Attention: Senior Vice President - Corporate
Treasury and Global Funding Operation
Telecopy No.: 203-357-4975
Tel. No.: 203-357-4000
SECTION 9.6 COSTS, EXPENSES AND TAXES. The Borrower agrees to pay
-------------------------
promptly all costs and expenses in connection with the preparation, issuance,
delivery, filing, recording, and administration of this Agreement, the Note,
and any other documents which may be delivered in connection with this
Agreement, including, without limitation, the reasonable out-of-pocket
expenses of GE Capital and the fees and expenses of its counsel, and all
costs and expenses (including counsel fees and expenses) in connection with
(i) the modification, extension, change in terms, maintenance, renewal or
termination of the Commitment or (ii) the enforcement of this Agreement or
the Note.
SECTION 9.7 NO GE CAPITAL LIABILITY. This Agreement is not, and shall
-----------------------
not be construed to be, a guarantee by GE Capital of the Bonds or of the
Borrower's obligations under the Standby Bond Purchase Agreement. GE Capital
shall not have any responsibility for, or incur any liability in respect of,
any act, or any failure to act, by the Borrower which results in the failure
of the Borrower to effect the purchase for the account of the Borrower of
Tendered Bonds with the funds provided pursuant to this Agreement.
SECTION 9.8 TERM OF THIS AGREEMENT. Subject to Section 9.4 hereof, the
----------------------
term of this Agreement shall be until the termination of the Commitment in
its entirety.
SECTION 9.9 EXECUTION IN COUNTERPARTS. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered,
shall be deemed to be an original and all of which counterparts, taken
together, shall constitute but one and the same Agreement.
SECTION 9.10 BINDING EFFECT; ASSIGNMENT. This Agreement shall be
--------------------------
binding upon, and inure to the benefit of, the Borrower and GE Capital and
their respective successors and assigns; provided, however, that the Borrower
-------- -------
may not assign its rights or obligations hereunder without the prior written
consent of GE Capital and GE Capital may not assign its rights or obligations
hereunder without the prior written consent of the Borrower (which consent
will not be given unless the ratings assigned to the Bonds are reaffirmed by
the relevant rating agencies). This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.
SECTION 9.11 GOVERNING LAW. This Agreement and the Note shall be
-------------
deemed to be a contract made under the laws of the State of New York and for
all purposes shall be construed in accordance with the laws of said State.
SECTION 9.12 SEVERABILITY OF PROVISIONS. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 9.13 HEADINGS. Article and Section headings used in this
--------
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
FGIC SECURITIES PURCHASE, INC.
By_______________________________
GENERAL ELECTRIC CAPITAL
CORPORATION
By________________________________
Jeffrey S. Werner
Senior Vice President - Corporate
Treasury and Global Funding Operation
EXHIBIT A
---------
FORM OF NOTICE OF BORROWING
---------------------------
_______________, 19__
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927
Attention: Senior Vice President - Corporate Treasury
and Global Funding Operation
Gentlemen:
Pursuant to Section 2.3 of the Standby Loan Agreement dated as of
_______ _, 19__ (the "Standby Loan Agreement") between FGIC Securities
Purchase, Inc. (the "Borrower") and General Electric Capital Corporation ("GE
Capital"), the Borrower hereby confirms that on ________ __, 19__ it
requested that GE Capital make a Loan in the principal amount of
$_______________ on ________ __, 19__, which is a Business Day.
The Loan requested hereby is for the sole purpose of paying the purchase
price for Tendered Bonds which represents the aggregate outstanding principal
amount of such Tendered Bonds in the amount of $__________ together with
accrued interest thereon.
You are hereby requested to disburse the Loan requested hereby to
account #__________ maintained at the office of (__________________________)
in immediately available funds.
Each capitalized term used herein shall have the meaning ascribed
thereto in the Standby Loan Agreement.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By____________________________
Title_______________________
EXHIBIT B
---------
FORM OF NOTE
------------
$______________
_______ _, 19__
FOR VALUE RECEIVED, FGIC SECURITIES PURCHASE, INC., a corporation
organized under the laws of the State of Delaware (the "Borrower"), hereby
promises to pay to the order of GENERAL ELECTRIC CAPITAL CORPORATION ("GE
Capital"), in lawful money of the United States of America in immediately
available funds on (COMMITMENT TERMINATION DATE) (or, if such date is not a
Business Day, the Business Day immediately succeeding such date), the
principal sum of ________________________________, or, if less, the unpaid
principal amount of all Loans made by GE Capital pursuant to, and as defined
in, the Standby Loan Agreement referred to below. (All capitalized terms
used herein shall have the meanings set forth in such Standby Loan
Agreement.)
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money from the date hereof until paid at the rates and
at the times provided in the Standby Loan Agreement.
This Note is the Note referred to in the Standby Loan Agreement dated as
of _______ _, 19__ between the Borrower and GE Capital (as the same may from
time to time be amended or supplemented, the "Standby Loan Agreement") and is
entitled to the benefits thereof and shall be subject to the provisions
thereof. As provided in the Standby Loan Agreement, this Note is subject to
prepayment in whole or in part.
In case an Event of Default (as defined in the Standby Loan Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Standby Loan Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
EXHIBIT B
---------
Page 2
This Note shall be construed in accordance with and be governed by
the laws of the State of New York.
FGIC SECURITIES PURCHASE, INC.
By____________________________
EXHIBIT B
---------
Page 3
Schedule attached to the Note, dated _______ _, 19__, of FGIC Securities
Purchase, Inc.
<TABLE>
<CAPTION>
LOAN AND REPAYMENT SCHEDULE
Amount of Unpaid Name of
Amount of Principal Principal Person Making
Date Loan Made Repaid Balance Notation
<S> <C> <C> <C> <C>
</TABLE>
EXHIBIT C
---------
(FORM OF BORROWER'S OPINION OF COUNSEL)
-------------------------------------
General Electric Capital Corporation on
260 Long Ridge Road
Stamford, Connecticut 06927
Dear Sirs:
I am (counsel) for FGIC Securities Purchase, Inc. (the "Borrower") and
in such capacity I have acted for the Borrower in connection with the Standby
Loan Agreement (the "Loan Agreement") dated as of _______ _, 19__ between the
Borrower and General Electric Capital Corporation. Terms defined in the Loan
Agreement are used herein as therein defined. This opinion is being rendered
to you pursuant to Section 7.1(c) of the Loan Agreement.
I have examined such documents, certificates, orders and proceedings and
have made such investigation as I have deemed necessary or appropriate for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower has been duly incorporated and is validly
existing and in good standing under the laws of the State of
Delaware. The Borrower is duly qualified to transact business and
is in good standing in the jurisdictions in which the conduct of
its business or the ownership of its property requires such
qualification.
2. The execution, delivery and performance by the Borrower
of the Loan Agreement and the Note are within the Borrower's
corporate powers and have been duly authorized by all necessary
corporate action. The execution, delivery and performance of the
Loan Agreement and the Note by the Borrower will not contravene the
Certificate of Incorporation or by-laws of the Borrower or result
in any violation of any of the terms or provisions of any law or
regulation or of any indenture, mortgage or other agreement or
instrument known to me by which the Borrower is bound or, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Borrower.
3. Each of the Loan Agreement and the Note constitutes a
legal, valid and binding agreement of the Borrower enforceable against
the Borrower in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally against (or affecting) the Borrower and by general equitable
principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
4. There is no action, suit or proceeding pending against,
or to the best of my knowledge threatened against or affecting, the
Borrower before any court or administrator 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 of the Borrower or which in any
manner draws into question the validity of the Loan Agreement or
the Note.
I am a member of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws
of the United States of America.
I understand that copies of this opinion are being delivered to Standard
& Poor's Corporation and Moody's Investor Service, Inc. in connection with
the issuance of the Bonds. Such entities are authorized to rely upon this
opinion as though this opinion were addressed to them.
Very truly yours,
EXHIBIT D
---------
(FORM OF GE CAPITAL'S OPINION OF COUNSEL)
_______ __, 19__
FGIC Securities Purchase, Inc.
115 Broadway
New York, New York 10006-4972
Moody's Investors Service, Inc.
99 Church Street
New York, NY 10007
Standard & Poor's
25 Broadway
New York, NY 10004-1064
Ladies and Gentlemen:
I am Associate General Counsel, Treasury Operations for General Electric
Capital Corporation ("GE Capital") and in such capacity I have acted for GE
Capital in connection with the Standby Loan Agreement (the "Loan Agreement")
dated as of _______ _, 19__ between GE Capital and FGIC Securities Purchase,
Inc. Terms defined in the Loan Agreement are used herein as therein defined.
This opinion is being rendered to you pursuant to Section 7.1(d) of the Loan
Agreement.
I have examined such documents, certificates, orders and proceedings and have
made such investigation as I have deemed necessary or appropriate for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. GE Capital has been duly incorporated and is validly
existing and in good standing under the laws of the State
of New York. GE Capital is duly qualified to transact
business and is in good standing in the jurisdictions in
which the conduct of its business or the ownership of its
property requires such qualification.
2. The execution, delivery and performance by GE Capital of the
Loan Agreement are within GE Capital's corporate powers and
have been duly authorized by all necessary corporate action on
the part of GE Capital. The execution, delivery and
performance of the Loan Agreement by GE Capital will not
contravene the Organization Certificate or by-laws of GE
Capital or result in any violation of any of the terms or
provisions of any law or regulation or of any indenture,
mortgage or other agreement or instrument known to me by which
GE Capital is bound or, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over GE
Capital.
3. The Loan Agreement constitutes a legal, valid and binding
agreement of GE Capital enforceable against GE Capital in
accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors'
rights as they would apply to the bankruptcy, insolvency or
reorganization of GE Capital and by general equitable
principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law).
My opinion is limited to the law of the State of New York and the federal
laws of the United States of America.
I understand that copies of this opinion are being delivered to Standard &
Poor's Corporation and Moody's Investors Service, Inc. in connection with the
issuance of the Bonds. Such entities are authorized to rely upon this
opinion as though this opinion were addressed to them.
Very truly yours,
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 of FGIC Securities Purchase, Inc. of our report dated January 17,
1997, relating to the financial statements of FGIC Securities Purchase, Inc.
as of December 31, 1996 and 1995, and for each of the years in the three-year
period ended December 31, 1996 included in the 1996 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
January 5, 1998
