Exhibit 4.1
STANDBY BOND PURCHASE AGREEMENT
dated as of
between
and
FGIC SECURITIES PURCHASE, INC.
TABLE OF CONTENTS*
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Interpretation; Incorporation of Certain Definitions by Reference......................4
ARTICLE II
COMMITMENT TO PURCHASE BONDS
SECTION 2.01. Commitment to Purchase Bonds...........................................................4
SECTION 2.02. Method of Purchasing...................................................................4
SECTION 2.03. Termination of Commitment..............................................................5
SECTION 2.04. Sale of Bonds..........................................................................5
SECTION 2.05. Reduction of Available Commitment......................................................6
SECTION 2.06. Fees...................................................................................6
SECTION 2.07. Corporation Rate.......................................................................6
SECTION 2.08. General Provisions as to Payments......................................................6
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness............................................................7
SECTION 3.02. Conditions to Purchase.................................................................7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Existence..............................................................................8
SECTION 4.02. Authorization; Contravention...........................................................8
SECTION 4.03. Binding Effect.........................................................................8
SECTION 4.04. No Default.............................................................................8
SECTION 4.05. Litigation.............................................................................8
SECTION 4.06. No Sovereign Immunity..................................................................8
SECTION 4.07. Incorporation of Representations and Warranties by Reference...........................8
ARTICLE V
COVENANTS
SECTION 5.01. Covenants..............................................................................9
SECTION 5.02. No Amendment of GE Capital Agreement Without Consent of Issuer and Trustee;
Incorporation of Certain Covenants.....................................................9
SECTION 5.03. Other Liquidity Facilities............................................................10
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default.....................................................................10
SECTION 6.02. Termination Events....................................................................11
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices...............................................................................12
SECTION 7.02. No Waivers............................................................................12
SECTION 7.03. Expenses..............................................................................12
SECTION 7.04. Indemnification.......................................................................13
SECTION 7.05. Amendments and Waivers................................................................13
SECTION 7.06. Successors and Assigns................................................................13
SECTION 7.07. Term of this Agreement; Extension.....................................................13
SECTION 7.08. New York Law..........................................................................14
SECTION 7.09. Counterparts..........................................................................14
SECTION 7.10. Beneficiaries.........................................................................14
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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇▇
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 (a) on the same day the Notice of Purchase is received if the
Notice of Purchase is received by the Corporation later than 11:30 a.m. (New
York City time) or (ii) after the last day of the Purchase Period.
SECTION 2.03. Termination of Commitment. If at any time a Termination
Event (as defined in Section 6.02 below) shall have occurred and be continuing,
the Corporation may deliver a notice (a "Termination Notice") regarding the
termination of the Commitment substantially in the form of Exhibit E hereto to
the Issuer, the Remarketing Agent, the Trustee and the Tender Agent at the
addresses set forth in Exhibit E hereto (or such other addresses as may be
specified by such Persons for such purpose in writing to the Corporation), and
the Commitment shall terminate, effective at the close of business on the
[30th] day following the date of receipt by the Trustee of such notice, or if
such day is not a Business Day, the next succeeding Business Day.
SECTION 2.04. Sale of Bonds. (a) Remarketing Notices. Prior to 12:15
p.m. (New York City time) on any Bond Payment Date that is a Business Day on
which the Corporation or any purchaser described in subsection (c) of this
Section 2.04 holds Bonds purchased pursuant to this Agreement, the Remarketing
Agent may deliver a notice (a "Remarketing Notice") to the Corporation and any
purchaser described in subsection (c) of this Section 2.04 and the Issuer
stating that it has located a purchaser (the "Purchaser") for some or all of
such Bonds and that such Purchaser desires to purchase on such Business Day
such Bonds at a price of par plus accrued interest; provided that a Remarketing
Notice may not be delivered following the delivery of a No-Remarketing Notice
pursuant to Section 6.01 unless the Commitment has terminated in full.
(b) Remarketing of Purchased Bonds. Upon receipt of a Remarketing
Notice in accordance with subsection (a), the Corporation or any purchaser
described in subsection (c) of this Section 2.04 shall have the option to
either (1) retain such Bonds, which in such event shall bear interest
thereafter at the regular Bond interest rate, and not the Corporation Rate, or
(ii) deliver those Bonds being remarketed by the Remarketing Agent upon payment
for such Bonds in immediately available funds in an amount equal to the
principal amount thereof plus interest accrued thereon at the Corporation Rate.
(c) Right to Sell Purchased Bonds. The Corporation expressly reserves
the right to sell Purchased Bonds held by it pursuant to this Agreement at any
time after (x) it has owned such Bonds for more than 60 days without receiving
a Remarketing Notice for such Bonds or (y) a No-Remarketing Notice has been
delivered. The Corporation agrees that sales pursuant to this subsection (c)
will be made only to affiliates of the Corporation pursuant to the GE Capital
Agreement, institutional investors or other entities or individuals which
customarily purchase commercial paper or tax exempt securities in large
denominations who acknowledge in writing that their ownership of said Purchased
Bonds is subject to the obligation to sell such Bonds pursuant to Sections
2.04(a) and (b) hereof. The Corporation agrees to notify the Issuer, the Fiscal
Agent, the Tender Agent, the Remarketing Agent, Moody's and Standard & Poor's
promptly of any such sale effected by it pursuant to this subsection (c). Bonds
to be sold by the Corporation pursuant to this subsection (c) shall first be
exchanged for new Bonds, which Bonds are not covered by the Rating, upon which
is conspicuously noted their status as Purchased Bonds not subject, unless
remarketed under the provisions of Sections 2.04(a) and (b) hereof, to Optional
Tenders or Mandatory Tenders and which shall bear new CUSIP numbers.
(d) Sale Without Recourse. Any sale of a Bond, or portion thereof,
pursuant to this Section shall be without recourse to the seller and without
representation or warranty of any kind.
SECTION 2.05. Reduction of Available Commitment. Upon any redemption,
defeasance, repayment or other payment or conversion to a Fixed Rate of all or
any portion of the principal amount of the Bonds the aggregate Available
Principal Commitment shall automatically be terminated by an amount equal to
the principal amount of the Bonds so redeemed, repaid or otherwise paid or
converted, as the case may be.
SECTION 2.06. Fees. (a) Until the Commitment has terminated, the
Issuer shall pay to the Corporation a commitment fee at the rate of ___% per
annum on the daily average amount of the Available Commitment. Such commitment
fee shall accrue from and including the Effective Date to but excluding the
date of termination of the Commitment in its entirety and shall be payable
quarterly, commencing __________________ , and on each _______ , _________ ,
_________ , and thereafter with a final payment due upon the date of
termination of the Commitment in its entirety. The commitment fee shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed.
(b) Whenever any payment hereunder shall be due on a day which is not
a Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day.
SECTION 2.07. Corporation Rate. At any time that the Corporation owns
Bonds which it has purchased pursuant to this Agreement and which it has not
elected to retain pursuant to Section 2.04(b)(i) hereof, the Corporation Rate
per annum on such Bonds shall be Prime Rate plus 1% provided, that such rate
may be increased as set forth in Section 6.01 hereof. Notwithstanding the
foregoing, the Corporation Rate shall at no time exceed the maximum rate
permitted under the Authorizing Document.
SECTION 2.08. General Provisions as to Payments. Notwithstanding any
provision contained in the Bonds, any Related Document, or any other
instrument, so long as any of the Bonds are owned by the Corporation hereunder,
the Issuer shall cause each payment of principal of and interest on such Bonds
to be paid not later than 5:00 p.m. New York time on the date when due in
immediately available funds, or on the prior day in next day funds, to the
account of the Corporation at ______________ , New York, New York, account
number ________________ . Commitment fees due to the Corporation pursuant to
Section 2.06 hereof shall be paid by the Issuer not later than 5:00 p.m. New
York time on the date when due in immediately available funds, or on the prior
day in next day funds, to the account of the Corporation.
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness. This Agreement shall not
become effective until each of the following conditions has been satisfied:
(a) receipt by the Corporation of (i) an opinion of _______________
("Bond Counsel"), dated the Effective Date, substantially in the form of
Exhibit A-1 hereto (ii) a reliance letter of Bond Counsel, addressed to the
Corporation, with respect to its approving opinion, and (iii) an opinion of
counsel for the Authority, dated the Effective Date addressed to and
satisfactory to the Corporation, to the effect that the Financing Agreement is
duly authorized, valid, binding and enforceable and that the Authority has all
requisite power and authority to fulfill its obligations thereunder;
(b) The conditions set forth in Section 9 of the Purchase Contract
shall have been met to the satisfaction of the Corporation and the Corporation
shall have received executed copies (addressed or certified to the Corporation
in the case of opinions and other documents in letter form) of all opinions,
certificates and other documents called for by the closing conditions of the
Purchase Contract; and
(c) Financial Guaranty Insurance Company shall have issued a policy
of municipal bond insurance guaranteeing payment of the full amount of
principal of and interest on the Bonds; and
SECTION 3.02. Conditions to Purchase. (a) The obligation of the
Corporation to purchase Bonds hereunder on any Purchase Date is subject to
receipt by the Corporation of a Notice of Purchase as required by Section 2.02.
The Corporation shall not be required to purchase any Bonds that are held by or
for the account of the Issuer, any affiliate of the Issuer or any broker-dealer
holding Bonds pursuant to an arrangement with the Issuer.
The Tender Agent will hold, as custodian for the Corporation,
Bonds purchased by the Corporation hereunder, and shall have instructed the
Trustee to register such Bonds in the name of the Corporation or in such other
name or names as the Corporation may direct or shall have provided for the
Corporation to be beneficial owner of book-entry Bonds registered to Cede & Co.
or other nominee of the Depository Trust Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Issuer represents and warrants that, as of the date on which this
Agreement is executed:
SECTION 4.01. Existence. The Issuer is validly existing as a public
benefit corporation under the laws of the State of New York, including the
state constitution, with full right and power to issue the Bonds and to
execute, deliver and perform its obligations under this Agreement and each
Related Document.
SECTION 4.02. Authorization; Contravention. The execution, delivery
and performance by the Issuer of this Agreement and each Related Document are
within the Issuer's powers, have been duly authorized by all necessary action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not violate or contravene, or constitute a default
under, any provision of applicable law, charter, ordinance or regulation or of
any material agreement, judgment, injunction, order, decree or other instrument
binding upon the Issuer or result in the creation or imposition of any lien or
encumbrance on any asset of the Issuer.
SECTION 4.03. Binding Effect. This Agreement and each Related
Document constitutes a valid, binding and enforceable agreement of the Issuer,
subject to applicable laws affecting creditor's rights generally.
SECTION 4.04. No Default. It is not, in any material respect, in
breach of or default under its charter or other similar documents, or any
applicable law or administrative regulation of the State or of the United
States, relating, in each case, to the issuance of debt securities by it, or
any applicable judgment, decree, loan agreement, note, resolution, ordinance,
agreement or other instrument to which it is a party or is otherwise subject.
Late delivery of financials or other reporting materials shall not be deemed
material for purposes of this Section as long as said materials are delivered
within 180 days of the applicable due date.
SECTION 4.05. Litigation. Except as disclosed in the Official
Statement with respect to the Bonds, there is no action, suit or proceeding
pending against, or to the knowledge of the Issuer threatened against or
affecting, the Issuer before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the financial position or
results of operations of the Issuer or which in any manner draws into question
the validity or enforceability of this Agreement or any Related Document.
SECTION 4.06. No Sovereign Immunity. The defense of sovereign
immunity is not available to the Issuer in any proceeding by the Corporation to
enforce any of the obligations of the Issuer under this Agreement or the Bonds
and, to the fullest extent permitted by law, the Issuer consents to the
initiation of any such proceeding in any federal or state court of competent
jurisdiction located in the State of New York and agrees not to assert the
defense of sovereign immunity in any such proceeding.
SECTION 4.07. Incorporation of Representations and Warranties by
Reference. As of the Effective Date, the Issuer hereby makes to the Corporation
the same representations and warranties as are set forth in the Related
Documents, which representations and warranties, as well as the related defined
terms contained therein, are hereby incorporated by reference with the same
effect as if each and every such representation and warranty and defined term
were set forth herein in its entirety. No amendment to such representations and
warranties or defined terms made pursuant to the Related Documents shall be
effective to amend such representations and warranties and defined terms as
incorporated by reference herein without the consent of the Corporation.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants. The Issuer agrees that so long as the
Corporation has a Commitment hereunder or any amount payable hereunder or under
any Bond purchased by the Corporation pursuant to this Agreement remains
unpaid:
(a) Information. The Issuer will deliver to the Corporation as soon
as possible and in any event within 120 days after the end of each fiscal year
of the Issuer, a balance sheet of the Issuer as of the end of such fiscal year
and the related statements of revenue and expense, setting forth in each case
in comparative form the figures for the previous fiscal year, all certified as
to the fairness of presentation, generally accepted accounting principles and
consistency by a nationally recognized firm of independent certified public
accountants; and
(b) No Amendment Without Consent of the Corporation. Without the
prior written consent of the Corporation, the Issuer will not agree or consent
to any amendment, supplement waiver or modification (i) of the Remarketing
Agreement which would have an adverse affect on the Corporation, or (ii) of the
Financing Agreement or Authorizing Document that under said documents would
require consent of the Trustee or Bondholders.
(c) Maintenance of Remarketing Agent. The Issuer will at all times
have a Remarketing Agent performing the duties thereof contemplated by the
Authorizing Document.
(d) Incorporation of Covenants by Reference. The Issuer agrees that
it will perform and comply with each and every covenant and agreement required
to be performed or observed by it in the Authorizing Document, which
provisions, as well as related defined terms contained herein are hereby
incorporated by reference herein with the same effect as if each and every such
provision were set forth therein in its entirety. To the extent that any such
incorporated provision permits any Person to waive compliance with or consent
to such provision or requires that a document, opinion or other instrument or
any event or condition be acceptable or satisfactory to any Person, for
purposes of this Agreement, such provision shall be complied with only if it is
waived or consented to by the Corporation and such document, opinion or other
instrument shall be acceptable or satisfactory only if it is acceptable or
satisfactory to the Corporation.
SECTION 5.02. No Amendment of GE Capital Agreement Without Consent of
Issuer and Trustee; Incorporation of Certain Covenants. Without the prior
written consent of the Issuer and the Trustee, the Corporation will not agree
or consent to any amendment, supplement or modification of the GE Capital
Agreement, nor waive any provision thereof, if such amendment, supplement,
modification or waiver would materially adversely affect the interests of the
Issuer or the holders of the Bonds. The Corporation hereby repeats, for the
benefit of the Issuer and the holders of the Bonds, the covenants set forth in
Section 6.1 of the GE Capital Agreement, which covenants, as well as the
related defined terms contained therein, are hereby incorporated by reference
with the same effect as if each and every such covenant and defined term were
set forth herein in its entirety.
SECTION 5.03. Other Liquidity Facilities. The Corporation agrees not
to enter into another standby bond purchase agreement or other similar form of
liquidity facility in support of the tender feature of adjustable rate bonds,
unless such bonds are rated by both Moody's and Standard & Poor's in their
highest short-term and long-term rating categories.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Issuer shall fail to pay when due (i) any amount payable
under Section 2.06 and such failure shall continue for seven days or (ii) any
other amount payable hereunder and such failure shall continue for seven days;
(b) (i) the State of New York shall take any action which would
impair the power of the Authority or the Issuer to comply with the covenants
and obligations of such entities under the Authorizing Document or the
Financing Agreement or any right or remedy of the Corporation or any owners of
the Bonds from time to time to enforce said covenants and obligations or (ii)
the Issuer shall fail to observe the covenants contained in Sections 5.01 (c)
hereof;
(c) the Issuer shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clauses (a)
or (b) above, but including those incorporated by reference) for 30 days after
written notice thereof has been given to the Issuer by the Corporation;
(d) any representation, warranty, certification or statement made by
the Issuer or the Authority (or incorporated by reference) in this Agreement or
any Related Document or in any certificate, financial statement or other
document delivered pursuant to this Agreement or any Related Document shall
prove to have been incorrect in any material respect when made;
(e) any default by (A) the Issuer shall have occurred and be
continuing in the payment of principal of or premium, if any, or interest on
any bond, note or other evidence of indebtedness issued, assumed or guaranteed
by the Issuer, or (B) by the Issuer or the Authority in the payment of any
amounts payable under any lease, payment contract, mortgage, or conditional
sale arrangement securing, with the consent of the Issuer or the Authority, as
applicable, the payment of any indebtedness of a public benefit corporation or
other governmental agency, instrumentality or body for borrowed money (except
to the extent that the obligation to make such payment is being disputed in
good faith and, if appropriate, contested in proceedings diligently conducted
and there is no default in the payment of the principal of or interest on the
secured indebtedness);
(f) the Issuer or the Authority shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of its or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall declare a moratorium, or shall take any action to
authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Issuer or the Authority seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Issuer or the Authority under the federal bankruptcy
laws as now or hereafter in effect;
(h) any material provision of this Agreement or any Related Document
shall cease for any reason whatsoever to be a valid and binding agreement of
the Issuer (to the extent the Issuer is a party thereto) or the Authority (to
the extent the Authority is a party thereto) or the Issuer or the Authority, as
the case may be, shall contest the validity or enforceability thereof; or
(i) the Issuer shall fail to pay when due any amount payable under
the Bonds or the Authority shall fail to pay any amount required to be
deposited with the Trustee under Section 4.2(c) of the Financing Agreement
(regardless of any waiver by the holders of the Bonds);
then, and in every such event, the Corporation may deliver a notice in the form
of Exhibit D hereto (a "Default Rate Notice") to the Issuer and the Trustee for
purposes of increasing the Corporation Rate payable on the Bonds, deliver a
notice in the form of Exhibit C hereto (a "No-Remarketing Notice") to the
Remarketing Agent not to remarket any of the Bonds purchased by the Corporation
hereunder and/or take any other actions permitted by applicable law.
SECTION 6.02. Termination Events. If an Event of Default (other than
an Event of Default solely under Section 6.01(a)(ii), (c) or (d)) (a
"Termination Event") shall have occurred and be continuing, then, and in every
such event, the Corporation may terminate the Corporation's obligation to
purchase Bonds pursuant to this Agreement as provided in Section 2.03; provided
that an Event of Default shall not affect the obligation of the Corporation to
purchase Bonds in accordance with the provisions of this Agreement prior to the
close of business on the date on which such obligation terminates pursuant to
Section 2.03.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex, fax or
similar writing) and shall be given to such party at its address or telex or
facsimile number set forth on the signature pages hereof or such other address
or telex or facsimile number as such party may hereafter specify for the
purpose by notice to the other parties. Each such notice, request or other
communication shall be effective (i) if given by telex or facsimile, when such
telex or facsimile is transmitted to the telex or facsimile number specified in
this Section and the appropriate answerback is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Corporation under Sections 2.02 and 2.04 shall not be effective until
received and that notices under Sections 2.02 and 2.04 may also be given by
telephone to the Corporation at the telephone numbers listed on the signature
pages hereof (or such other telephone number as may be designated by the
Corporation, by written notice to the Issuer and Tender Agent, to receive such
notice), immediately confirmed in writing or by telex or facsimile.
SECTION 7.02. No Waivers. (a) The obligations of the Issuer hereunder
shall not in any way be modified or limited by reference to any other document,
instrument or agreement (including, without limitation, the Bonds or any other
Related Document). The rights of the Corporation hereunder are separate from
and in addition to any rights that any holder of any Bond may have under the
terms of such Bond or any Related Document or otherwise.
(b) No failure or delay by the Corporation in exercising any right,
power or privilege hereunder or under the Bonds shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. No failure or delay by the
Corporation in exercising any right, power or privilege under or in respect of
the Bonds or any other Related Document shall affect the rights, powers or
privileges of the Corporation hereunder or shall operate as a limitation or
waiver thereof.
SECTION 7.03. Expenses. The Issuer shall pay (i) all reasonable
out-of-pocket expenses of the Corporation, including fees and disbursements of
counsel for the Corporation in connection with the preparation and review of
this Agreement and the Related Documents and in connection with any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Corporation,
including fees and disbursements of counsel, in connection with such Event of
Default and collection and other enforcement proceedings resulting therefrom.
SECTION 7.04. Indemnification. To the extent permitted by law, the
Issuer hereby indemnifies and holds harmless the Corporation from and against
the cost of defending any and all third party claims and liabilities whatsoever
that the Corporation may incur (or may be claimed against the Corporation by
any Person whatsoever) (i) by reason of any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
materials used in marketing the Bonds, or the omission or alleged omission to
state therein a material fact necessary to make such statements, in the light
of the circumstances under which they are or were made, not misleading; or (ii)
by reason of or in connection with the execution and delivery or transfer of,
or payment or failure to pay under, this Agreement; provided that the Issuer
shall not be required to indemnify the Corporation for any costs of defending
third party claims or liabilities to the extent, but only to the extent, such
claims or liabilities arise due to the willful misconduct or gross negligence
of the Corporation or are attributable to information concerning the
Corporation provided by the Corporation expressly for use in the Official
Statement relating to the Corporation; provided further that, unless there is
an actual or potential conflict with respect to the legal defenses available to
the Issuer and the Corporation, the Issuer may discharge its obligation
hereunder by diligently defending the Corporation. The Corporation will
promptly notify the counsel of the Issuer upon becoming aware of any claims or
liabilities giving rise to a right to indemnification hereunder and will
cooperate with the Issuer in the defense of such claims or liabilities. Nothing
in this Section is intended to limit the Issuer's obligations contained in
other parts of this Agreement or the Bonds. The Issuer will not refer to the
Corporation in any materials used in marketing the Bonds without the prior
written consent of the Corporation.
SECTION 7.05. Amendments and Waivers. Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Issuer and the Corporation; provided that no such
amendment or waiver shall, unless signed by the Corporation (i) reduce the
principal of or rate of interest on any Bond or any amounts payable under
Section 2.06 or (ii) postpone the date fixed for any payment of principal of or
interest on any Bond or any amounts payable under Section 2.06 hereunder or for
any reduction or termination of the Available Commitment. The Issuer will
notify Moody's and Standard & Poor's of any amendment to this Agreement.
SECTION 7.06. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Issuer may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of the Corporation.
SECTION 7.07. Term of this Agreement; Extension. The term of this
Agreement shall be from the Effective Date until the expiration of the Purchase
Period. The Corporation may extend the scheduled term of the Purchase Period
for an additional period of five years and thereafter for additional five-year
periods by giving written notice of its intent to do so to the Issuer not later
than the 3rd anniversary of the Effective Date and thereafter at the end of
each successive five-year period beginning with said 3rd anniversary. The
Issuer may, at its election, terminate this Agreement subject to payment in
full of all amounts as set forth in (ii), above. Notwithstanding a termination
of this Agreement by either the Corporation or the Issuer, the provisions of
Section 7.04 shall survive such termination and shall remain in full force and
effect; provided, however, that such termination shall be subject to the
limitations of the Related Documents.
SECTION 7.08. New York Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
SECTION 7.09. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 7.10. Beneficiaries. This Agreement is not intended and shall
not be construed to confer upon any Person other than the parties hereto and
their successors and permitted assigns any rights or remedies hereunder except
that the agreement of the Corporation to purchase Bonds in accordance with the
terms and conditions of this Agreement is made for the benefit of the holders
of the Bonds and, in its capacity as such, the Tender Agent.
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
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Attention: President
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
OPINION OF ,
BOND COUNSEL FOR THE ISSUER
[Effective Date]
[Authority]
FGIC Securities Purchase, Inc.
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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.
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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]
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------------------
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 [30th] day following receipt by the Trustee of this
Termination Notice.
Please be advised that a Notice of Purchase may not be delivered
following the termination of the Commitment.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By:__________________________
Name:
Title:
Acknowledgment of Receipt
on [date].
--------------------------
[Trustee]
* The Table of Contents is for convenience of reference only and is
not a part of this Agreement.