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FGIC SECURITIES PURCHASE, INC.
AND
GENERAL ELECTRIC CAPITAL CORPORATION
STANDBY LOAN AGREEMENT
DATED AS OF ______ __, 19__
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TABLE OF CONTENTS
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PAGE
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Parties and Recitals ...................................... 1
ARTICLE I
DEFINITIONS
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
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
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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
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SECTION 1.1 DEFINITIONS. The following terms as used in this Agreement
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shall have the following meanings, unless the context otherwise requires:
"AGREEMENT" shall mean this Standby Loan Agreement, as the same may from
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time to time be amended or supplemented.
"AVAILABLE COMMITMENT" shall mean, at the time any determination thereof
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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%;
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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
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principal amount not to exceed $___________.
"BORROWING" shall mean the incurrence of a Loan by the Borrower from GE
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Capital pursuant to Section 2.3 hereof.
"BORROWING DATE" shall mean the date on which a Borrowing is, or is to
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be, consummated, as the context may indicate; provided that in no event shall
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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
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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
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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
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3.1 hereof.
"COMMITMENT PERIOD" shall mean the period commencing with and including
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the Effective Date and ending on and including the Commitment Termination
Date.
"COMMITMENT TERMINATION DATE" shall mean the date which is (FIVE) years
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from the Effective Date; provided that if such date is not a Business Day,
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the Business Day immediately succeeding such date.
"DEFAULT" shall mean an event, act or occurrence which with the giving
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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
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7.1 hereof.
"EVENT OF DEFAULT" shall have the meaning assigned to that term in
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Section 8.1 hereof.
"ISSUER" shall mean (______________).
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"LOAN" or "LOANS" shall have the meaning provided in Section 2.1.
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"NOTE" shall have the meaning provided in Section 2.5.
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"NOTICE OF BORROWING" shall have the meaning provided in Section 2.3.
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"PERSON" shall mean an individual or a corporation, partnership, trust,
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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
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Xxxxxx 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
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its permitted successors and assigns.
"REMARKETING AGREEMENT" shall mean the Remarketing Agreement between the
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Issuer and the Remarketing Agent relating to the Bonds.
"STANDBY BOND PURCHASE AGREEMENT" shall mean the Standby Bond Purchase
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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
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its permitted successors and assigns.
"TENDERED BONDS" shall mean Bonds tendered or deemed tendered to the
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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.
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("TRUSTEE" shall mean __________, and its permitted successors and
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assigns.)
ARTICLE II
LOAN PROVISIONS
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SECTION 2.1 COMMITMENT. Upon the terms and subject to the conditions
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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
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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
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make a Borrowing hereunder, its duly authorized representative shall give GE
Capital at its office located at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx
00000; Attention: Senior Vice President - Corporate Treasury and Global
Funding Operation, Telecopy: 000-000-0000, 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
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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
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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
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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
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SECTION 3.1 COMMITMENT FEES. (a) In consideration of the commitment
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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
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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
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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
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SECTION 4.1 VOLUNTARY PREPAYMENTS. The Borrower shall have the right
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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
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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
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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
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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
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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 00-000-000, 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
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SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
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Borrower represents and warrants to GE Capital as follows:
(a) CORPORATE STATUS. The Borrower is a corporation duly
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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
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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
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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,
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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,
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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
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represents and warrants to the Borrower as follows:
(a) CORPORATE STATUS. GE Capital is a corporation duly
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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
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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
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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,
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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,
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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
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SECTION 6.1 COVENANTS OF THE BORROWER. The Borrower covenants and
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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
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the Loans solely for the purposes set forth in Section 2.2.
(b) DIVIDEND LIMITATION. The Borrower will not declare or
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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,
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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
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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.
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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
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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
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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
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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.
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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
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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,
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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
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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
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SECTION 7.1 CONDITIONS PRECEDENT TO EFFECTIVENESS. This Agreement
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shall become effective on the earliest date (the "Effective Date") on which
each of the following conditions shall have been satisfied; provided that the
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Effective Date shall occur no later than (DROP-DEAD DATE):
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(a) AGREEMENT. GE Capital and the Borrower each shall have
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signed and delivered a counterpart of this Agreement.
(b) THE NOTE. The Borrower shall have executed and delivered
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to GE Capital a Note in the form set forth in Exhibit B.
(c) OPINION OF BORROWER'S COUNSEL. GE Capital shall have
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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
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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
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Standby Bond Purchase Agreement shall have become effective.
ARTICLE VIII
EVENTS OF DEFAULT
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SECTION 8.1 EVENTS OF DEFAULT. If the following events, acts or
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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
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Senior Counsel - Public Finance
Telecopy No.: 000-000-0000
Tel. No.: 000-000-0000
If to GE Capital:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Senior Vice President - Corporate
Treasury and Global Funding Operation
Telecopy No.: 000-000-0000
Tel. No.: 000-000-0000
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________________________________
Xxxxxxx X. Xxxxxx
Senior Vice President - Corporate
Treasury and Global Funding Operation
EXHIBIT A
---------
FORM OF NOTICE OF BORROWING
---------------------------
_______________, 19__
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
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.
LOAN AND REPAYMENT SCHEDULE
Amount of Unpaid Name of
Amount of Principal Principal Person Making
Date Loan Made Repaid Balance Notation
EXHIBIT C
---------
(FORM OF BORROWER'S OPINION OF COUNSEL)
-------------------------------------
General Electric Capital Corporation on
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
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 Xxxxx'x 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.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Standard & Poor's
00 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
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 Xxxxx'x 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,
