Exhibit 4.1
STANDBY BOND PURCHASE AGREEMENT
dated as of
between
and
FGIC SECURITIES PURCHASE, INC.
TABLE OF CONTENTS*
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Interpretation; Incorporation of Certain
Definitions by Reference . . . . . . . . . . . . . . . . . . 3
ARTICLE II
COMMITMENT TO PURCHASE BONDS
SECTION 2.01 Commitment to Purchase Bonds . . . . . . . . . . . . . . . . 4
2.02 Method of Purchasing . . . . . . . . . . . . . . . . . . . 4
2.03 Termination of Commitment . . . . . . . . . . . . . . . . . .5
2.04 Sale of Bonds . . . . . . . . . . . . . . . . . . . . . . . .5
2.05 Reduction of Available Commitment . . . . . . . . . . . . . .5
2.06 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.07 Corporation Rate . . . . . . . . . . . . . . . . . . . . . .6
2.08 General Provisions as to Payments . . . . . . . . . . . . . .6
ARTICLE III
CONDITIONS
SECTION 3.01 Conditions to Effectiveness . . . . . . . . . . . . . . . 6
3.02 Conditions to Purchase . . . . . . . . . . . . . . . . . . .7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Existence . . . . . . . . . . . . . . . . . . . . . . . . 7
4.02 Authorization; Contravention . . . . . . . . . . . . . . . .7
4.03 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . .7
4.04 No Default. . . . . . . . . . . . . . . . . . . . . . . . . .8
4.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . .8
4.06 No Sovereign Immunity . . . . . . . . . . . . . . . . . . . .8
4.07 Incorporation of Representations and
Warranties by Reference . . . . . . . . . . . . . . . . . .8
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* The Table of Contents is for convenience of reference only and is not a
part of this Agreement.
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ARTICLE V
COVENANTS
SECTION 5.01 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.02 No Amendment of the GE Capital
Agreement Without Consent of
Issuer and Trustee; Incorporation
of Certain Covenants . . . . . . . . . . . . . . . . . . .9
5.03 Other Liquidity Facilities . . . . . . . . . . . . . . . . .9
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . 9
6.02 Termination Events . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.02 No Waivers . . . . . . . . . . . . . . . . . . . . . . . . 12
7.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.04 Indemnification . . . . . . . . . . . . . . . . . . . . . . 12
7.05 Amendments and Waivers . . . . . . . . . . . . . . . . . . 13
7.06 Successors and Assigns . . . . . . . . . . . . . . . . . . 13
7.07 Term of this Agreement. . . . . . . . . . . . . . . . . . . 13
7.08 New York Law . . . . . . . . . . . . . . . . . . . . . . . 13
7.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 13
7.10 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit A - Opinion of Counsel for the Issuer
Exhibit B - Notice of Purchase
Exhibit C - No-Remarketing Notice
Exhibit D - Default Rate Notice
Exhibit E - Termination Notice
STANDBY BOND PURCHASE AGREEMENT
STANDBY BOND PURCHASE AGREEMENT dated as of , 199_ between
, a
of the State of New York (the "Issuer") and FGIC SECURITIES PURCHASE, INC., a
Delaware corporation (the "Corporation").
WHEREAS, the Issuer proposes to issue $ in principal amount
of its
(the "Bonds") pursuant to a
Bond Resolution, as amended and supplemented (the "Authorizing
Document");
WHEREAS, the Authorizing Document provides that the holders of the Bonds
shall have the option, upon the satisfaction of certain conditions, to tender
Bonds to the Issuer for purchase, upon notice to the Issuer or its agents as
provided for in the Authorizing Document and, under certain circumstances,
may be required to tender their Bonds for purchase thereof in accordance with
the terms of the Authorizing Document; and
WHEREAS, the Corporation has agreed to purchase such tendered Bonds
pursuant to the terms of this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
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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 Xxxxx'x 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 Xxxxxx
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
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Reference. All references to Bonds herein shall refer to Bonds in their
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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,
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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
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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
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Purchase Date be (i) on the same day the Notice of Purchase is received if
the Notice of Purchase is received by the Corporation later than 11:30 a.m.
(New York City time) or (ii) after the last day of the Purchase Period.
SECTION 2.03. Termination of Commitment. If at any time a Termination
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Event (as defined in Section 6.02 below) shall have occurred and be
continuing, the Corporation may deliver a notice (a "Termination Notice")
regarding the termination of the Commitment substantially in the form of
Exhibit E hereto to the Issuer, the Remarketing Agent, the Trustee and the
Tender Agent at the addresses set forth in Exhibit E hereto (or such other
addresses as may be specified by such Persons for such purpose in writing to
the Corporation), and the Commitment shall terminate, effective at the close
of business on the 15th day following the date of receipt by the Trustee of
such notice, or if such day is not a Business Day, the next succeeding
Business Day.
SECTION 2.04. Sale of Bonds. (a) Remarketing Notices. Prior to 12:15
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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
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Issuer and Trustee; Incorporation of Certain Covenants. Without the prior
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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
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
EXHIBIT A
OPINION OF ,
BOND COUNSEL FOR THE ISSUER
(Effective Date)
(Authority)
FGIC Securities Purchase, Inc.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:__________________________
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement dated as of
, 199_ (the "Agreement") among the (Authority) and FGIC Securities
Purchase, Inc. Capitalized terms used herein shall have the meanings given
to them in or by reference to the Agreement.
Pursuant to Section 2.02(a) of the Agreement, we hereby give you notice
that due to the inability to remarket Bonds on the date hereof, such Bonds
are to be purchased by you on ____________ __, 199_ (the "Purchase Date")
pursuant to Section 2.02 of the Agreement. The aggregate Purchase Price of
such Bonds is __________ dollars ($________). Of such aggregate Purchase
Price, __________ dollars ($______) comprises principal of such Bonds and
_________ dollars ($______) comprises interest accrued on such Bonds to but
excluding the Purchase Date. The Bonds referred to herein bear interest at a
Variable Rate and have not been defeased.
FGIC Securities Purchase, Inc.
(Date)
Page Two
The Purchase Price should be provided in (immediately available/next-
day) funds.
Very truly yours,
(TENDER AGENT)
By:______________________________
Name:
Title:
EXHIBIT C
(LETTERHEAD OF CORPORATION)
NO-REMARKETING NOTICE
(Date)
__________________
__________________
__________________
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement dated as of
, 199_ among the (Authority) and FGIC Securities Purchase, Inc. (the
"Agreement"). Capitalized terms used herein shall have the meanings given to
them in or by reference to the Agreement.
We hereby give you notice that because an Event of Default has occurred
and is continuing, you are hereby instructed not to remarket any of the Bonds
purchased by FGIC Securities Purchase, Inc. pursuant to the Agreement or
deliver any Remarketing Notices pursuant to Section 2.04 of the Agreement.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By:___________________________
Name:
Title:
EXHIBIT D
(LETTERHEAD OF CORPORATION)
DEFAULT RATE NOTICE
(Date)
(Authority)
Attention:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement dated as of
, 199_ among the (Authority) and FGIC Securities Purchase, Inc. (the
"Agreement"). Capitalized terms used herein shall have the meanings given to
them in or by reference to the Agreement.
We hereby give you notice that because an Event of Default has occurred
and is continuing, the Corporation Rate payable on the Bonds is increased as
of the date hereof to the Prime Rate plus 3%.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By:___________________________
Name:
Title:
EXHIBIT E
(LETTERHEAD OF CORPORATION)
TERMINATION NOTICE
(Authority)
__________________________
__________________________
Attention: (comptroller)
(Trustee)
__________________________________
__________________________________
__________________________________
(Remarketing Agent)
____________________________
____________________________
____________________________
(Tender Agent)
____________________________
____________________________
____________________________
Re:
Dear Sirs:
Reference is made to the Standby Bond Purchase Agreement dated as of
, 199_ among the (Authority), and FGIC Securities Purchase, Inc. (the
"Agreement"). Capitalized terms used herein shall have the meanings given to
them in or by reference to the Agreement.
We hereby give you notice that a Termination Event has occurred and is
continuing. Pursuant to Section 2.03 of the Agreement, the Commitment shall
terminate, effective at the close
(Trustee)
(Municipality)
(Tender Agent)
(Remarketing Agent)
(Date)
Page Two
of business on the 15th day following receipt by the Trustee of this
Termination Notice.
Please be advised that a Notice of Purchase may not be delivered
following the termination of the Commitment.
Very truly yours,
FGIC SECURITIES PURCHASE, INC.
By: __________________________
Name:
Title:
Acknowledgment of Receipt
on (date).
__________________________
(Trustee)
