HomeMy WebLinkAbout500-AMBACOctober 19, 1993
Randall W. Hanna, Esq.
Bryant, Miller & Olive, P.A.
201 S. Monroe Street
Suite 500
Tallahassee, Florida 32301
RE: $26,255,000 City of Sanford, Florida, Water and Sewer
Refunding Revenue Bonds, Series 1993, dated October 1, 1993.
Dear Mr. Hanna:
Enclosed please find the original and one certified copy of the
Commitment for Municipal Bond Insurance, Commitment No. 94e8 (the
"Commitment"), relating to the above-captioned obligations (the
"Bonds"). The original of this Commitment should be delivered to
or held on behalf of the issuer of the Bonds, and if not exercised,
should be disregarded.
Please note the following:
1. If the Bonds sell with AMBAC insurance, please notify Janine
Feudi at (212) 208-3301, who will assign a closing coordinator
who will be responsible for the financing through the closing.
Enclosed in AMBAC's STANDARD PACKAGE is the bond legend which
should appear on the Bonds. The policy number to be printed as
part of the bond legend can be obtained from the closing
coordinator.
2. Enclosed for your use in preparing the Official Statement are:
a. a sample Municipal Bond Insurance Policy (the "Policy")
and an Endorsement thereto, pertaining to Florida
issuers, and
b. AMBAC's STANDARD PACKAGE, which includes suggested Official
Statement disclosure language and the official AMBAC logo.
Please send all drafts of the Official Statement to AMBAC's
Closing Department, attention of your closing coordinator.
Receipt of the final official statement will ensure timely
preparation of AMBAC'S Policy for submission to the rating
agencies. When final, please also forward six copies.
3. Please also notify your closing coordinator as soon as possible
if the following are required for closing:
a. an opinion of AMBAC's counsel regarding the fairness and
accuracy of the language included in the Official Statement
describing AMBAC and the Policy. The delivery of such
opinion is dependent upon the prior review of such official
statement by our legal department.
b. rating letters from Standard & Poor's Corporation and
Moody's Investors Service. If any requests are made of you
by either rating agency for documentation regarding this
issue or any related or parity debt issue, please respond
promptly since this will facilitate the timely receipt of
the rating letters.
NOTE: ENCLOSED FIND INFORMATION REGARDING MOODY'S RATING AND
FEES FOR INSURED ISSUES AND STANDARD & POOR'S RATINGS AND FEES
FOR INSURED ISSUES AND ASSIGNMENT OF INSURER'S CLAIMS-PAYING
RATINGS TO INSURED ISSUES. (Moody's Investors Service and
Standard & Poor's Corporation assess separate rating fees which
are payable directly to them.)
4. Refer to page 2 of this Commitment for conditions which must be
satisfied prior to AMBAC's release of its Policy. Drafts of all
financing documents and legal opinions should be sent to the
closing coordinator assigned to the financing.
5. Lastly, one final unbound transcript must be sent to your
closing coordinator as soon as possible after closing.
If you have any questions, please do not hesitate to contact Janine
Feudi or myself.
Enclosures
cc: Art Diamond
Fishkind and Associates
12424 Research Parkway, Suite 275
Orlando, Florida 32826
Edwin M Bulleit
William R. Hough & Co.
100 South Second Avenue, Suite 800
St. Petersburg, Florida 33701
William A. Simmons
CITY OF SANFORD
300 North Park Avenue
sanford, Florida 32772
Thomas Randazzo, AMBAC
Commitment for Municipal Bond Insurance A mAC Indemnity Corporation
c/o CT Corporation Systems
222 West Washington Avenue
Madison, Wisconsin 53703
Administrative Office:
One State Street Plaza
New York, New York 10004
Issuer: CITY OF SANFORD, FLORIDA Commitment Number: 94~8
Date of Commitment: October 19, 1993
Expiration Date: January 17, 1994
Insurance premium: 0.39000% of the total
Bonds: $26,255,000 Water and Sewer Refunding Revenue Bonds, principal and interest due on the Bonds.
Series .1993, dated October I, 1993, maturing on October 1 (Moody's Investors Service and Standard &
in the years 1994 through 2021, both inclusive. Poor's Corporation assess separate rating fees
which are payable directly to them.)
AMBAC Indemnity Corporation (AMBAC) A Wisconsin Stock Insurance
Company
hereby commits t0 issue a Municipal Bond Insurance Policy (the "Policy") relating to the above-described debt obligations
(the "Bonds"~, substantially in the form imprinted in this Commitment, subject to the terms and conditions contained heroin
or added hereto (see conditions set forth on 'page 2 and following).
To keep this Commitment in effect alxter the expiration date set forth above, a request for renewal must be submitted to
AMBAC prior to such expiration date. AMBAC reserves the right to refuse wholly or in part to grant a renewal.
The Municipal BOnd Insurance Policy shall be issued if the following ~onditions are satisfied:
The documents to be executed and delivered in connection with the issuance and sale of the Bonds shah not contain
any untrue or misleading statement of a material fact and shall not fail to state a material fact necessary in order to
make the information contained therein not misleading.
2. No event shall occur which would permit any purchaser of the Bonds, otherwise required, not to be required to
purchase the Bonds on the date scheduled for the issuance and delivery thereof.
3. There shall be no material change in or affecting the Bonds (including, without limitation, the security for the Bonds)
or the financing documents or the official statement (or any similar disclosure document) to be executed and
delivered in connection with the issuance and sale of the Bonds from the descriptions thereof heretofore provided
to AMBAC.
4. The Bonds shall contain no reference to AMBAC, the Policy or th~ municipal bond insurance evidenced thereby
i~xcept as may be approved by AMBAC.
Form #CMBI (12/89) Page I of 2
5. AMBAC shah be provided with:
(a) Executed copies of aH financing documents, the official statement (or any similar disclosure document) and
the various legal opinions delivered in comleetion with the issuance and sale of the Bonds, including, without
limitation, the unqualified approving opinion of bond counsel rendered by a law fwm acceptable to AMBAC.
The form of Bond Counsel's approving opinion shah also indicate, if applicable, that the Bonds are exempt
from federal income taxation, that the issuer must comply with certain covenants under and pursuant to the
new tax law and that the issuer has the legal power to comply with such covenants. Such opinion of bond
counsel shall be addressed to AMBAC or, in lieu thereof, a letter shah be provided to AMBAC to the effect
that AMBAC may rely on such opinion a~ if it were addressed to AMBAC.
Co) Ale. Rer from bond counsel or counsel to the purchaser or otherwise from another person acceptable to
AMBAC to the effect that the fmancing documents, the of~c'ml statement (or any similar
disclosure document) and the various legal opinions executed and delivered in connection with the
issuance and sale of the Bonds are substantially in the forms theretofore submitted to AMBAC for
review, with only such amendments, modifications or deletions as approved by AMBAC.
(c) A certified o~' cashicr's check for or evidence of wire transfer of an amount equal to the insurance premium
at the time of the issuance and delivery of the Bonds. If the amount of premium exceeds $100,000.00,
payment must be made by federal funds wire transfer.
6. Unless expressly waived in whole or in part by AMBAC, the financing documents and the Official Statement shah
contain (a) the terms and provisions provided in the AMBAC Indemnity STANDARD PACKAGE transmitted
herewith and Co) any additional oral or writton provisions or comments submitted by AMBAC.
7. AIVIBAC shah receive a copy of any insurance policy, surety bond, guaranty or indemnification or any other policy,
contract or agreement which provides for payment of all or any portion of the debt, the costs of reconstruction, the
loss of bosincss income or in any way secures, ensures or enhances the income stream anticipated to pay the bonds.
8. Any provisions or requirements of the Purchase Contract or Bond Purchase Agreement referencing AMBAC must
be sent to the attention of/anine Feudi not less than five (5) business days prior to closing. If such provisions or
requirements are not received within that time, compliance may not be possible.
9. Review and approval by AMBAC at least S days prior to closing of the Escrow Agreement for the defcasance of
the applicable Bonds (the "Prior BondsT).
10. At least 5 days prior to closing, AMBAC must receive certification by an accnunting finn acceptable to AMBAC
that the securities invested arc sufficient to pay the Prior Bonds. Upon receipt of this commitment AMBAC should
be notified which fLrm will be providing the certification.
11. Receipt of an opinion of counsel acceptable to AMBAC that the Prior Bonds have been legally dcfeased.
12. Receipt of an opinion of counsel acceptable to AMBAC with regard to the validity and enforceability of the Escrow
Agreement.
13. The Debt Service Reserve Fund shah be valued at least annually at market value. Deficiencies in the Debt Service
Reserve Fund shah be replenished with'm one year in 12 equal monthly payments.
/ A ed
Form #CMBI (12/89) Page 2 of 2
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Moody's
Public Finance.
Department
Moody' s Ratings,and
'Fees for Insured Issues
Assignment: of Insurer's Claims-Paying Ratings to Insured Issues
Moody's Investors Service cunentiy rates the insurance and unconditional for the life of the insured obligation.
claims-paying ability of AMBAC Indemnity Corporation Upon verification of these conditions Moody'swill assign
(AMBAC) Aaa for long-term Obligations and MIG 1 for the Aaa or MIG 1 rating to the insured obligation.
short-term notes. Accordingly, obligations insured by After Moody',s assigns the rating, written confirmation of
AMBAC will receive the appropriate Moody's rating. that action will be provided to AMBAC and made availa-
Prior to assigning a rating to an insured obligation; ble at the closing. The issue and its Aaa or MIG 1 rating
Moody's will verify that AMBAC's insurance policy for will then be included in all Moody's published ratings
the issue Ito be insured guarantees full and timely payment directories and rating verification services.
of all principal and interest when due, and is permanent
Moody's Requirements for Information from Issuers
In addition to Our verification of the insured transaction In the course of our rating review, issuers can also 6xpect a
prior to the assignment of the Aaa or M IG 1 ratings, Moody's analyst to call with questions and. to request
Moody's Ireviews the underlying credit quality of the additional information. As is the ease with all rating
insured obligation. reviews, if sufficient and appropriate information is not
If the insured obligation is on parity with. or its repayment made available Moody's may withdraw the outstanding
source is closely related ~to, outstanding debt which is rated parity or related ratings on the uninsured debt.
by MOody's on an uninsured basis, Moody's will review If the insured obligation is not Ion parity with or related to
the ratings on the outstanding uninsured debt prior to the other rated outstanding debt, Moody's still witl asSess (for
closing date of the new insured obligation. Moody's will internal purposes) the credit quality of the insured obliga-
require the issuer to provide the same documents normally lion as a part of Moody's overall evaluation of the credit
required for the rating of any new issue, e:g., preliminary quality of the insured portfolin of AMBAC. In addition,
official statement; legal documents, financial statements, Moody's raay from time to time require updated informa-
etc. tion concerning the insured obligation.
Rating Fee for Insured Issues
Moody's fees for.insured issues are determined on the b) When insurance is purchased' on an issue where
same basis as fees fornon-insured issues; Such fees can be Moody's has not received an application for a rating on
determined by callingAnita Webbl(2 12) 553-0901 or an uninsured basis, the rating fee will be billed to the
Bernie Morris (212) 553-0317, at Moody's. purchaser of the insurance.
Moody's billing policy is as follows: c) When an issue has receivetin Moody's rating on an
a) Each insured obligation will be billed a rating service uninsured basis and the issue is subsequently insured,
fee. Moody's will bill the issuer without an additional
charge for the insurance rating.
Standard & Poor'S Ratings' Group
Municipal Finance Department
Bond Insurance Administration
Fee Policy & Billing Administration
-25 Broadway
New York, New York 10004-1064
Telephone 212/412-0355
STANDARD & POOR'S RATINGS FEES FOR
INSURED ISSUES and ASSIGNMENT
OF INSURER'S CLAIMS - PAYING RATINGS
TO INSURED ISSUES
Standard & Poor's Ratings Group currently rams the insurance claims paying ability of AMBAC
Indemnity Corporation (AMBAC) "AAA' for long-ten obh'gations, and only after specific
review by S&P, 'SP-I+" for short-term obligations, Accordingly, obligations insured by
AMBAC will receive the appropriate S&P rating.
Prior to assigning a rating to an insured obligation, S&P verities that AMBAC's insurance policy
for the issue(s) to be insured guarantees full and timely payment of all principal and interest, in
full and when due, and is permanent and unconditional for the full life and maturity of the
ipsured obligation(s). S&P also r~eives preliminary information from AMBAC at the time of
a commitment of insurance. An initial review of the security-type is made at the time S&P
receives policy information. Upon verification of these conditions S&P will assign the "AAA'
or "SP-I+' rating to the insured obligation(s). Written confirmation of that action will be
provided to AMBAC and made available prior to or by the date of the closing. The issue and
its appropriate "AAA" or 'SP-I+* rating will then be included in all S&P's published ratings
directories and rating verification services.
STANDARD & POOR'S REQUIREMENTS
FOR INFORMATION FROM ISSUERS
In order to assess continually ~e ,AAA* or 'SP-1 +* claims paying ability of AMBAC, S&P
reviews the credit quality of selected insured obligations periodically. If the insured obligation
is on a parity with or it's repayment source is closely related to, outstanding debt which is rated
by S&P on an uninsured basis, S&P must review the ratings on the outstanding uninsured debt
prior to the closing date of the new insured obligations. S&P requires that the issuer provide
the same documentation normally required for the rating of any new issue, e.g., preliminary
official statement, legal documents, financial statements, etc.
In the course of our rating process, issuers can also r,,xf, cct S&P analysts to Call/contact
appropriate officials with questions and requests for additional information. As is the case with
all ratings, if sufficient and appropriate information is not made available, S&P reserves the
right to withdraw the outstanding parity or related rating(s) on the uninsured debt.
If the insured obligation is not on parity with or related to other rated outstanding debt, S&P still
may assess the credit quality of the insured obligations (on an underlying basis) as a pan of
S&P's overall evaluation of AMBAC's insured portfolio. As a result, S&P may periodically
require additional information concerning the insured obligation.
STANDARD & POOR'S FEES
FOR INSURED ISSUES
Fees for rating services for insured debt obligations are determined on the same basis as fees for
non-insured issuances. Information about fees can be determined, for specific obligations or
based on general 'ranges' of fees by calling Mr. Vincent Orgo or Mr. Michael Gmitro at (212)
412-0355. Standard & Poor's/Municipal Finance Department billing & fees policy for insured
debt issuances is as follows:.
I. Each insured obligation will be billed a rating service fee. Fees are payable, in full, by
the issuing entity, underwriter, financial advisor or purchaser of insurance - depending
upon the structuring of the debt obligation. Multiple insurance policies may be a basis
for additional fee charges beyond normal fees.
II. When insurance is obtained on an issuance where S&P has not received an application
for a rating on an uninsured basis, the invoice for rating services will be billed and
forwarded to the purchaser of the insurance, unless otherwise advised (see attached). If
rating fees are to be paid by other than the purchasers of the insurance, S&P MUST BE
NOTIFIED WHOM TO BILL.
III. When an issue has received an S&P rating on an uninsured basis and the issue then
aubs~luenfly is insured at the time of sale, S&P will bill the issuer or other appropriate
party of the debt without any additional charges for the insured rating CAAA" or "SP-
1+').
Bond Insurance Administration/Fee Policy & Billing Administration
Arthur J. Grisi, Senior Vice President 212/412-0355
Vincent Orgo, Administrative Officer 212/412.0355
Michael Gmitro, Pricing Specialist 212/412-0355
Fax Number 212/208-8262
A~.IBAC Inden'g~ty Corporation
One State Street Plaza
New York. New York 10004
(21.2)668-03~,0 Fax: (212) 509-9190 AUGUST 16, 1993
AMBA~ INDEMNI~ gTANDARD PACKAGE
FOR AMBA~-IN~URED TRAN~A~TION~
{NOT FOR UgE IN TEXAg FINAN~ING~}
TO: Issuer, Issuer's Counsel, Managing Underwriter, Bond Counsel and
Underwriter's Counsel
RE: Preparation of Financing Documents for AMBAC Indemnity Insured
Issues
The attached materials have been prepared to assist you in the preparation of
documents for your AMBAC Indemnity Corporation ("AMBAC Indemnity") insured
issue. Please modify the attached exhibits where appropriate and notify us as to any
proposed modifications. If desired, these provisions can be incorporated into one
section entitled "Municipal Bond Insurance" within the applicable Indenture,
Resolution, Ordinance, Order or any other operative financing document (such
applicable financing document will be referred to herein as the "Financing Document").
Please be advised that the provisions contained in this package are in addition to the
conditions listed in the Commitment for Municipal Bond Insurance and any other
comments or changes that may be required by the AMBAC Indemnity personnel
working on this financing. If you have any questions, please call one of the following
persons: Joseph V. Salzano, Eileen L. Kirchoff, Jerry H. Pisecki, Karl T. Molin, Mary
P. McKeon, Kevin J. Doyle or Kate A. McDonough.
o Definitions (Exhibit A).
o AMBAC Indemnity consent required for changes to underlying
documentation and exercise of remedies upon default (Exhibit
B),
o Notices to be given to AMBAC Indemnity (Exhibit C).
o Permitted Investments and Valuation Provisions (Exhibit D).
o Defeasance Language (Exhibit E).
o Description of AMBAC Indemnity Payment Procedure (Exhibit
F).
o Trustee-related provisions (Exhibit G).
o AMBAC Indemnity as a third-party beneficiary (Exhibit H).
o Suggested language for (i) AMBAC Indemnity Official
Statement Disclosure, (ii) Notice of Sale, (iii) Bond Legend, (iv)
Cover page of Official Statement, and (v) Ratings section of
Official Statement (Exhibit I).
o Form of AMBAC Indemnity Legal Opinion (Exhibit J).
o Form of AMBAC Indemnity Certificate of Bond Insurer (Exhibit
K).
o AMBAC Indemnity Wiring Instructions (Exhibit L).
EXHIBIT A
DEFINITIONS
The following definitions are those which AMBAC recommends for the Financing
Document:
"AMBAC Indemnity" shall mean AMBAC Indemnity Corporation, a
Wisconsin-domiciled stock insurance company.
"Municipal Bond Insurance Policy" shall mean the municipal bond insurance
policy issued by AMBAC Indemnity insuring the payment when due of the
principal of and interest on the Bonds as provided therein.
EXHIBIT B
AMBAC CONSENT LANGUAGE
AMBAC requires that the Financing Document include the following consent
provisions:
A. Consent of AMBAC Indemnity.
Any provision of this [Financing Document] expressly recognizing or granting
rights in or to AMBAC Indemnity may not be amended in any manner which
affects the rights of AMBAC Indemnity hereunder without the prior written
consent of AMBAC Indemnity.
B. Consent of AMBAC Indemnity in Addition to Bondholder Consent.
Unless otherwise provided in this Section, AMBAC Indemnity's consent shall
be required in addition to Bondholder consent, when required, for the following
purposes: (i) execution and delivery of any supplemental [Financing Document]
or any amendment, supplement or change to or modification of the [Loan
Agreement, Lease Agreement, etc.] (ii) removal of the Trustee or Paying Agent
and selection and appointment of any successor trustee or paying agent
[required in those transactions in which the Financing Document provides for
a trustee or paying agent]; and (iii) initiation or approval of any action not
described in (i) or (ii) above which requires Bondholder consent.
C. Consent of AMBAC Indemnity in the Event of Insolvency.
Any reorganization or liquidation plan with respect to the [issuer or obtigor]
must be acceptable to AMBAC Indemnity. In the event of any reorganization
or liquidation, AMBAC Indemnity shall have the right to vote on behalf of all
bondholders who hold AMBAC Indemnity-insured bonds absent a default by
AMBAC Indemnity under the applicable Municipal Bond Insurance Policy
insuring such Bonds.
[in transactions for which acceleration is not a remedy for an event of default, the
following provision is to be included in the Financing Document.]
D. Consent of AMBAC Indemnity Upon Default.
Anything in this [Financing Document] to the contrary notwithstanding, upon
the occurrence and continuance of an event of default as defined herein,
AMBAC Indemnity shall be entitled to control and direct the enforcement of all
rights and remedies granted to the Bondholders or the Trustee for the benefit
of the Bondholders under this [Financing Document].
[In transactions for which acceleration is a remedy for an event of default, the
following two provisions must be included in the Financing Document in lieu of
paragraph D above.]
E. Consent of AMBAC Indemnity Upon Default.
Anything in this [Financing Document] to the contrary notwithstanding, upon
the occurrence and continuance of an event of default as defined herein,
AMBAC Indemnity shall be entitled to control and direct the enforcement of all
rights and remedies granted to the Bondholders or the Trustee for the benefit
of the Bondholders under this [Financing Document], including, without
limitation: (i) the right to accelerate the principal of the Bonds as described in
this [Financing Document], and (ii) the right to annul any declaration of
acceleration, and AMBAC Indemnity shall also be entitled to approve all waivers
. of events of default.
F. Acceleration Rights
Upon the occurrence of an event of default, the Trustee may, with the consent
of AMBAC Indemnity, and shall, at the direction of AMBAC Indemnity or __%
of the Bondholders with the consent of AMBAC Indemnity, by written notice
to the Issuer and AMBAC Indemnity, declare the principal of the Bonds to be
immediately due and payable, whereupon that portion of the principal of the
Bonds thereby coming due and the interest thereon accrued to the date of
payment shall, without further action, become and be immediately due and
payable, anything in this [Financing Document] or in the Bonds to the contrary
notwithstanding.
5
EXHIBIT C
NOTICES TO BE GIVEN TO AMBAC
AMBAC requires that the following notice provisions be incorporated in the Financing
Document:
A. While the Municipal Bond Insurance Policy is in effect, the Issuer* or the
Trustee [as appropriate] shall furnish to AMBAC Indemnity:
(a) as soon as practicable after the filing thereof, a copy of any financial
statement of the Issuer* and a copy of any audit and annual report of
the Issuer*;
(b) a copy of any notice to be given to the registered owners of the
Bonds, including, without limitation, notice of any redemption of or
defeasance of Bonds, and any certificate rendered pursuant to this
[Financing Document] relating to the security for the Bonds; and
(c) such additional information it may reasonably request.
B. The Trustee or Issuer* [as appropriate] shall notify AMBAC Indemnity of any
failure of the Issuer* to provide relevant notices, certificates, etc.
C. The Issuer* will permit AMBAC Indemnity to discuss the affairs, finances and
accounts of the Issuer* or any information AMBAC Indemnity may reasonably
request regarding the security for the Bonds with appropriate officers of the
Issuer*. The Trustee or Issuer* [as appropriate] will permit AMBAC Indemnity
to [have access to the Project and] have access to and to make copies of all
books and records relating to the Bonds at any reasonable time.
D. AMBAC Indemnity shall have the right to direct an accounting at the Issuer's*
expense, and the Issuer's* failure to comply with such direction within thirty
(30) days after receipt of written notice of the direction from AMBAC Indemnity
shall be deemed a default hereunder; provided, however, that if compliance
cannot occur within such period, then such period will be extended so long as
compliance is begun within such period and diligently pursued, but only if such
extension would not materially adversely affect the interests of any registered
owner of the Bonds.
E. Notwithstanding any other provision of this [Financing Document], the Trustee
or Issuer* [as appropriate] shall immediately notify AMBAC Indemnity if at any
time there are insufficient moneys to make any payments of principal and/or
interest as required and immediately upon the occurrence of any event of
default hereunder.
*or appropriate obligor on the Bonds.
EXHIBIT D
PERMITTED INVESTMENTS (MODIFIED AS OF JULY 19, 1993)
A. AMBAC Indemnity will allow the following obligations to be used as Permitted
Investments for all purposes, including defeasance investments in refunding
escrow accounts.
(AMBAC Indemnity does not give a premium credit for the investment of
accrued and/or capitalized interest.)
(1) Cash (insured at all times by the Federal Deposit Insurance Corporation
or otherwise collateralized with obligations described in paragraph (2)
below), or
(2) Direct obligations of (including obligations issued or held in book entry
form on the books of) the Department of the Treasury of the United
States of America.
B. AMBAC Indemnity will allow the following Obligations to be used as Permitted
Investments for all purposes other than defeasance investments in refunding
escrow accounts.
(1) obligations of any of the following federal agencies which obligations
represent the full faith and credit of the United States of America,
including:
Export-Import Bank
Farm Credit Svstem Financial Assistance Corporation
Farmers Home Administration
General Services Administration
U.S. Maritime Administration
Small Business Administration
Government National Mortgage Association (GNMA)
U.S. Department of Housing & Urban Development (PHA's)
Federal Housing Administration;
(2) senior debt oblic)ations rated "AAA" by Standard & Poor's Corporation
(S&P) and "Aaa" by Moody's Investors Service, Inc. (Moody's) issued by
the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation. Senior debt obliaations of other Government
Sponsored Aqencies approved bv AMBAC Indemnitv;
(3) U.S. dollar denominated deposit accounts, federal funds and banker's
acceptances with domestic commercial banks which have a rating on
their short term certificates of deposit on the date of purchase of "A-1"
or "A-1 +" by S&P and "P-1" by Moody's and maturing no more than
360 days after the date of purchase. (Ratings on holding companies are
not considered as the rating of the bank);
(4) commercial paper which is rated at the time of purchase in the single
highest classification, "A-1 +" by S&P and '?-1" by Moody's and which
matures not more than 270 days after the date of purchase;
(5) investments in a money market fund rated '"AAAm" or "AAAm-G" or
better by S&P;
(6) Pre-refunded Municipal Obligations defined as follows: Any bonds or
other obligations of any state of the United States of America or of any
agency, instrumentality or local governmental unit of any such state
which are not callable at the option of the obligor prior to maturity or as
to which irrevocable instructions have been given by the obligor to call
on the date specified in the notice; and
(A) which are rated, based on an irrevocable escrow account or
fund (the "escrow"), in the highest rating category of S&P and
Moody's or any successors thereto; or
(B) (i) which are fully secured as to principal and interest and
redemption premium, if any, by an escrow consisting only of cash
or obligations described in paragraph A(2) above, which escrow
may be applied only to the payment of such principal of and
interest and redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or the specified
redemption date or dates pursuant to such irrevocable
instructions, as appropriate, and (ii) which escrow is sufficient, as
verified by a nationally recognized independent certified public
accountant, to pay principal of and interest and redemption
premium, if any, on the bonds or other obligations described in
this paragraph on the maturity date or dates specified in the
irrevocable instructions referred to above, as appropriate; [Pre-
refunded Municipal Obligations meeting the requirements of
subsection (El) hereof may not be used as Permitted Investments
for annual appropriation lease transactions without the prior
written approval of S&P.]
(7) investment agreements approved in writing by AMBAC Indemnity
Corporation [supported by appropriate opinions of counsel] with notice
to S&P; and
(8) other forms of investments (including repurchase agreements) approved
in writing by AMBAC with notice to S&P.
C. The value of the above investments shall be determined as follows:
"Value", which shall be determined as of the end of each month, means that
the value of any investments shall be calculated as follows:
a) as to investments the bid and asked prices of which are published on a
regular basis in The Wall Street Journal (or, if not there, then in The New
York Times): the average of the bid and asked prices for such
investments so published on or most recently prior to such time of
determination;
b) as to investments the bid and asked prices of which are not published on
a regular basis in The Wall Street Journal or The New York Times: the
average bid price at such time of determination for such investments by
any two nationally recognized government securities dealers (selected by
the Trustee in its absolute discretion) at the time making a market in
such investments or the bid price published by a nationally recognized
pricing service;
c) as to certificates of deposit and bankers acceptances: the face amount
thereof, plus accrued interest; and
d) as to any investment not specified above: the value thereof established
by prior agreement between the Issuer, the Trustee and AMBAC
Indemnity Corporation.
9
EXHIBIT E
DEFEASANCE LANGUAGE
A. The definition of "Outstanding" bonds or obligations, or any like concept,
should specifically include bonds or obligations which fall into the category
described below.
B. The defeasance section of the Financing Document should include the following
language:
Notwithstanding anything herein to the contrary, in the event that the principal
and/or interest due on the Bonds shall be paid by AMBAC Indemnity
Corporation pursuant to the Municipal Bond Insurance Policy, the Bonds shall
remain Outstanding for all purposes, not be defeased or otherwise satisfied and
not be considered paid by the Issuer, and the assignment and pledge of the
Trust Estate and all covenants, agreements and other obligations of the Issuer
to the registered owners shall continue to exist and shall run to the benefit of
AMBAC Indemnity, and AMBAC Indemnity shall be subrogated to the rights of
such registered owners.
10
EXHIBIT F
PAYMENT PROCEDURE PURSUANT TO THE MUNICIPAL BOND INSURANCE
POLICY
The following language sets out the applicable procedure for payments under the
Municipal Bond Insurance Policy and should be incorporated into the Financing
Document:
As long as the bond insurance shall be in full force and effect, the Issuer, the Trustee
and any Paying Agent agree to comply with the following provisions:
(a) At least one ( 1 ) day prior to all Interest Payment Dates the Trustee or Paying
Agent, if any, will determine whether there will be sufficient funds in the Funds
and Accounts to pay the principal of or interest on the Bonds on such Interest
Payment Date. If the Trustee or Paying Agent, if any, determines that there
will be insufficient funds in such Funds or Accounts, the Trustee or Paying
Agent, if any, shall so notify AMBAC Indemnity. Such notice shall specify the
amount of the anticipated deficiency, the Bonds to which such deficiency is
applicable and whether such Bonds will be deficient as to principal or interest,
or both. If the Trustee or Paying Agent, if any, has not so notified AMBAC
indemnity at least one (1) day prior to an Interest Payment Date, AMBAC
Indemnity will make payments of principal or interest due on the Bonds on or
before the first (1 st) day next following the date on which AMBAC Indemnity
shall have received notice of nonpayment from the Trustee or Paying Agent, if
any.
(b) the Trustee or Paying Agent, if any, shall, after giving notice to AMBAC
Indemnity as provided in (a) above, make available to AMBAC Indemnity and,
at AMBAC Indemnity's direction, to the United States Trust Company of New
York, as insurance trustee for AMBAC Indemnity or any successor insurance
trustee (the "Insurance Trustee"), the registration books of the Issuer
maintained by the Trustee or Paying Agent, if any, and all records relating to
the Funds and Accounts maintained under this [Financing Document].
(c) the Trustee or Paying Agent, if any, shall provide AMBAC Indemnity and the
Insurance Trustee with a list of registered owners of Bonds entitled to receive
principal or interest payments from AMBAC Indemnity under the terms of the
Municipal Bond Insurance Policy, and shall make arrangements with the
Insurance Trustee (i) to mail checks or drafts to the registered owners of Bonds
entitled to receive full or partial interest payments from AMBAC Indemnity and
(ii) to pay principal upon Bonds surrendered to the Insurance Trustee by the
registered owners of Bonds entitled to receive full or partial principal payments
from AMBAC Indemnity.
11
(d) the Trustee or Paying Agent, if any, shall, at the time it provides notice to
AMBAC Indemnity pursuant to (a) above, notify registered owners of Bonds
entitled to receive the payment of principal or interest thereon from AMBAC
Indemnity (i) as to the fact of such entitlement, (ii) that AMBAC Indemnity will
remit to them all or a part of the interest payments next coming due upon proof
of Bondholder entitlement to interest payments and delivery to the Insurance
Trustee, in form satisfactory to the Insurance Trustee, of an appropriate
assignment of the registered owner's right to payment, (iii) that should they be
entitled to receive full payment of principal from AMBAC Indemnity, they must
surrender their Bonds (along with an appropriate instrument of assignment in
form satisfactory to the Insurance Trustee to permit ownership of such Bonds
to be registered in the name of AMBAC Indemnity) for payment to the
Insurance Trustee, and not the Trustee or Paying Agent, if any, and (iv) that
should they be entitled to receive partial payment of principal from AMBAC
Indemnity, they must surrender their Bonds for payment thereon first to the
Trustee or Paying Agent, if any, who shall note on such Bonds the portion of
the principal paid by the Trustee or Paying Agent, if any, and then, along with
an appropriate instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee, which will then pay the unpaid portion of
principal.
(e) in the event that the Trustee or Paying Agent, if any, has notice that any
payment of principal of or interest on a Bond which has become Due for
Payment and which is made to a Bondholder by or on behalf of the Issuer has
been deemed a preferential transfer and theretofore recovered from its
registered owner pursuant to the United States Bankruptcy Code by a trustee
in bankruptcy in accordance with the final, nonappealable order of a court
having competent jurisdiction, the Trustee or Paying Agent, if any, shall, at the
time AMBAC Indemnity is notified pursuant to (a) above, notify all registered
owners that in the event that any registered owner's payment is so recovered,
such registered owner will be entitled to payment from AMBAC Indemnity to
the extent of such recovery if sufficient funds are not otherwise available, and
the Trustee or Paying Agent, if any, shall furnish to AMBAC Indemnity its
records evidencing the payments of principal of and interest on the Bonds
which have been made by the Trustee or Paying Agent, if any, and
subsequently recovered from registered owners and the dates on which such
payments were made.
(f) in addition to those rights granted AMBAC Indemnity under this [Financing
Document], AMBAC Indemnity shall, to the extent it makes payment of
principal of or interest on Bonds, become subrogated to the rights of the
recipients of such payments in accordance with the terms of the Municipal
Bond Insurance Policy, and to evidence such subrogation (i) in the case of
subrogation as to claims for past due interest, the Trustee or Paying Agent, if
12
any, shall note AMBAC Indemnity's rights as subrogee on the registration
books of the Issuer maintained by the Trustee or Paying Agent, if any, upon
receipt from AMBAC Indemnity of proof of the payment of interest thereon to
the registered owners of the Bonds, and (ii) in the case of subrogation as to
claims for past due principal, the Trustee or Paying Agent, if any, shall note
AMBAC Indemnity's rights as subrogee on the registration books of the Issuer
maintained by the Trustee or Paying Agent, if any, upon surrender of the Bonds
by the registered owners thereof together with proof of the payment of
principal thereof.
13
EXHIBIT G
TRUSTEE-RELATED PROVISIONS
With respect to transactions involving a trustee or paying agent, AMBAC requires that
the following provisions be incorporated into the Financing Document. Please note
that unless otherwise required by AMBAC, if the financing at hand does not
contemplate a trustee or paying agent, these provisions may be disregarded.
1. The Trustee (or Paying Agent) may be removed at any time, at the request of
AMBAC indemnity, for any breach of the Trust set forth herein.
2. AMBAC Indemnity shall receive prior written notice of any Trustee (or Paying
Agent) resignation.
3. Every successor Trustee appointed pursuant to this Section shall be a trust
company or bank in good standing located in or incorporated under the laws of
the State, duly authorized to exercise trust powers and subject to examination
by federal or state authority, having a reported capital and surplus of not less
than 975,000,000 and acceptable to AMBAC Indemnity. Any successor Paying
Agent, if applicable, shall not be appointed unless AMBAC approves such
successor in writing.
4. Notwithstanding any other provision of this [Financing Document], in
determining whether the rights of the Bondholders will be adversely affected
by any action taken pursuant to the terms and provisions of this [Financing
Document], the Trustee (or Paying Agent) shall consider the effect on the
Bondholders as if there were no Municipal Bond insurance Policy.
5. Notwithstanding any other provision of this [Financing Document], no removal,
resignation or termination of the Trustee (or Paying Agent) shall take effect
until a successor, acceptable to AMBAC, shall be appointed.
EXHIBIT H
INTERESTED PARTIES
In addition to the provisions listed above, AMBAC also requires the following provision
be incorporated into the Financing Document:
A, AMBAC As Third Party Beneficiary.
To the extent that this [Financing Document] confers upon or gives or grants
to AMBAC any right, remedy or claim under or by reason of this [Financing
Document], AMBAC is hereby explicitly recognized as being a third-party
beneficiary hereunder and may enforce any such right remedy or claim
conferred, given or granted hereunder.
B. Parties Interested Herein.
Nothing in this [Financing Document] expressed or implied is intended or shall
be construed to confer upon, or to give or grant to, any person or entity, other
than the Issuer, the Trustee, AMBAC Indemnity, the Paying Agent, if any, and
the registered owners of the Bonds, any right, remedy or claim under or by
reason of this [Financing Document] or any covenant, condition or stipulation
hereof, and all covenants, stipulations, promises and agreements in this
[Financing Document] contained by and on behalf of the Issuer shall be for the
sole and exclusive benefit of the Issuer, the Trustee, AMBAC Indemnity, the
Paying Agent, if any, and the registered owners of the Bonds.
15
EXHIBIT I
AMBAC INDEMNITY OFFICIAL STATEMENT DISCLOSURE
AND SUGGESTED LANGUAGE FOR THE NOTICE OF SALE,
BOND LEGEND, COVER PAGE OF OFFICIAL STATEMENT,
AND RATINGS SECTION OF OFFICIAL STATEMENT
AMBAC INDEMNITY OFFICIAL STATEMENT DISCLOSURE
Payment Pursuant to Municipal Bond Insurance Policy
AMBAC Indemnity has made a commitment to issue a municipal bond insurance policy
(the "Municipal Bond Insurance Policy") relating to the Bonds effective as of the date
of issuance of the Bonds. Under the terms of the Municipal Bond Insurance Policy,
AMBAC Indemnity will pay to the United States Trust Company of New York, in New
York, New York or any successor thereto (the "InsurAnce Trustee") that portion of the
principal of and interest on the Bonds which shall become Due for Payment but shall
be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the
Municipal Bond Insurance Policy). AMBAC Indemnity will make such payments to the
Insurance Trustee on the later of the date on which such principal and interest
becomes Due for Payment or within one business day following the date on which
AMBAC Indemnity shall have received notice of Nonpayment from the Trustee/Paying
Agent. The insurance will extend for the term of the Bonds and, once issued, cannot
be canceled by AMBAC Indemnity.
The Municipal Bond Insurance Policy will insure payment only on stated maturity dates
and on mandatory sinking fund installment dates, in the case of principal, and on
stated dates for payment, in the case of interest. If the Bonds become subject to
mandatory redemption and insufficient funds are available for redemption of all
outstanding Bonds, AMBAC Indemnity will remain obligated to pay principal of and
interest on outstanding Bonds on the originally scheduled interest and principal
payment dates including mandatory sinking fu~.d red_eruption dates. In the event of any
acceleration of the principal of the Bonds, the insured payments will be made at such
times and in such amounts as would have been made had there not been an
acceleration.
In the event the Trustee/Paying Agent has notice that any payment of principal of or
interest on a Bond which has become Due for Payment and which is made to a
Bondholder by or on behalf of the Issuer has been deemed a preferential transfer and
theretofore recovered from its registered owner pursuant to the United States
Bankruptcy Code in accordance with a final, nonappealable order of a court of
competent jurisdiction, such registered owner will be entitled to payment from
AMBAC Indemnity to the extent of such recovery if sufficient funds are not otherwise
available.
The Municipal Bond Insurance Policy does not insure any risk other than Nonpayment,
as defined in the Policy. Specifically, the Municipal Bond Insurance Policy does not
Cover:
1. payment on acceleration, as a result of a call for redemption (other than
mandatory sinking fund redemption) or as a result of any other advancement
of maturity.
2. payment of any redemption, prepayment or acceleration premium.
3. nonpayment of principal or interest caused by the insolvency or negligence
of any Trustee or Paying Agent, if any.
If it becomes necessary to call upon the Municipal Bond Insurance Policy, payment of
principal requires surrender of Bonds to the Insurance Trustee together with an
appropriate instrument of assignment so as to permit ownership of such Bonds to be
registered in the name of AMBAC Indemnity to the extent of the payment under the
Municipal Bond Insurance Policy. Payment of interest pursuant to the Municipal Bond
Insurance Policy requires proof of Bondholder entitlement to interest payments and an
appropriate assignment of the Bondholder's right to payment to AMBAC Indemnity.
Upon payment of the insurance benefits, AMBAC Indemnity will become the owner
of the Bond, appurtenant coupon, if any, or right to payment of principal or interest
on such Bond and will be fully subrogated to the surrendering Bondholder's rights to
payment.
FOR TRANSACTIONS INVOLVING VARIABLE RATE BONDS:
The Municipal Bond Insurance Policy does not insure against loss relating to payments
of the purchase price of Bonds upon tender by a registered owner thereof or any
preferential transfer relating to payments of the purchase price of Bonds upon tender
by a registered owner thereof.
ADDITIONAL PARAGRAPH FOR CALIFORNIA TRANSACTIONS:
In the event that AMBAC indemnity were to become insolvent, any claims arising
under the Policy would be excluded from coverage by the California insurance
Guaranty Association, established pursuant to the laws of the State of California.
ADDITIONAL PARAGRAPH FOR NEW YORK TRANSACTIONS:
The insurance provided by the Municipal Bond insurance Policy is not covered by the
property/casualty insurance security fund specified by the insurance laws of the State
of New York.
ADDITIONAL PARAGRAPH FOR FLORIDA TRANSACTIONS:
The insurance provided by the Municipal Bond insurance Policy is not covered by the
Florida insurance Guaranty Association.
18
AMBAC INDEMNITY CORPORATION
AMBAC Indemnity Corporation ("AMBAC Indemnity") is a Wisconsin-domiciled stock
insurance corporation regulated by the Office of the Commissioner of Insurance of the
State of Wisconsin and licensed to do business in 50 states, the District of Columbia,
and the Commonwealth of Puerto Rico, with admitted assets of approximately
$1 ,884,000,000 (unaudited) and statutory capital of approximately $1 ,038,000,000
(unaudited) as of June 30, 1993. Statutory capital consists of AM BAC Indemnity's
policyholders' surplus and statutory contingency reserve. AMBAC Indemnity is a
wholly owned subsidiary of AMBAC Inc., a 100% publicly-held company. Moody's
Investors Service, Inc. and Standard & Poor's Corporation have both assigned a triple-
A claims-paying ability rating to AMBAC Indemnity.
Copies of AMBAC Indemnity's financial statements prepared in accordance with
statutory accounting standards are available from AMBAC Indemnity. The address
of AMBAC Indemnity's administrative offices and its telephone number are One State
Street Plaza, 17th Floor, New York, New York, 10004 and (212) 668-0340.
AMBAC Indemnity has entered into pro rata reinsurance agreements under which a
percentage of the insurance underwritten pursuant to certain municipal bond insurance
programs of AMBAC Indemnity has been and will be assumed by a number of foreign
and domestic unaffiliated reinsurers.
AMBAC Indemnity has obtained a ruling from the Internal Revenue Service to the
effect that the insuring of an obligation by AMBAC Indemnity will not affect the
treatment for federal income tax purposes of interest on such obligation and that
insurance proceeds representing maturing interest paid by AMBAC Indemnity under
policy provisions substantially identical to those contained in its municipal bond
insurance policy shall be treated for federal income tax purposes in the same manner
as if such payments were made by the issuer of the Bonds. [THE FOLLOWING MUST
BE INCLUDED IN ANNUAL APPROPRIATION LEASE TRANSACTIONS: No
representation is made by AMBAC Indemnity regarding the federal income tax
treatment of payments that are made by AMBAC Indemnity under the terms of the
Policy due to nonappropriation of funds by the Lessee.]
AMBAC indemnity makes no representation regarding the Bonds or the advisability of
investing in the Bonds and makes no representation regarding, nor has it participated
in the preparation of, the Official Statement other than the information supplied by
AMBAC Indemnity and presented under the heading" "
19
NOTICE OF SALE
AMBAC Indemnity Corporation ("AMBAC Indemnity") has issued a commitment for
municipal bond insurance relating to the Bonds. All bids may be conditioned upon the
issuance effective as of the date on which the Bonds are issued, of a policy of
insurance by AMBAC Indemnity, insuring the payment when due of principal of and
interest on the Bonds. Each Bond will bear a legend referring to the insurance. The
purchaser, holder or owner is not authorized to make any statements concerning the
insurance beyond those set out here and in the bond legend without the approval of
AMBAC Indemnity.
BOND LEGEND
Municipal Bond Insurance Policy No. __ (the "Policy") ~ith respect to payments due
for principal of and interest on this bond has been issued by AMBAC Indemnity
Corporation ("AMBAC Indemnity"). The Policy has been delivered to the United
States Trust Company of New York, New York, New York, as the Insurance Trustee
under said Policy and will be held by such Insurance Trustee or any successor
insurance trustee. The Policy is on file and available for inspection at the principal
office of the Insurance Trustee and a copy thereof may be secured from AMBAC
Indemnity or the Insurance Trustee. All payments required to be made under the
Policy shall be made in accordance with the provisions thereof. The owner of this
bond acknowledges and consents to the subrogation rights of AMBAC indemnity as
more fully set forth in the Policy.
COVER PAGE OF OFFICIAL STATEMENT
Payment of the principal of and interest on the Bonds when due will be insured by a
municipal bond insurance policy to be issued by AMBAC Indemnity Corporation
simultaneously with the delivery of the Bonds.
RATINGS SECTION OF OFFICIAL STATEMENT FOR FIXED RATE BONDS
Standard & Poor's Corporation and Moody's Investors Service, Inc. have assigned
their municipal bond ratings of "AAA" and "Aaa", respectively, to this issue of Bonds
with the understanding that upon delivery of the Bonds~ a policy insuring the payment
when due of the principal of and interest on the Bonds will be issued by AMBAC
Indemnity Corporation.
20
EXHIBIT J
FORM OF THE AMBAC LEGAL OPINION
DATE/ADDRESSES
Ladies and Gentlemen:
This opinion has been requested of the undersigned, a Vice President and an Assistant
General Counsel of AMBAC indemnity Corporation, a Wisconsin stock insurance
company ("AMBAC Indemnity"), in connection with the issuance by AMBAC
indemnity of a certain Municipal Bond Insurance Policy and endorsement thereto,
effective as of the date hereof (the "Policy"), insuring $> in aggregate principal
amount of the > (the "lssuer"), > dated > (the "Bonds").
In connection with my opinion herein, I have examined the Policy, such statutes,
documents and proceedings as I have considered necessary or appropriate in the
circumstances to render the following opinion, including, without limiting the
generality of the foregoing, certain statements contained in the Official Statement of
the Issuer dated >, relating to the Bonds (the "Official Statement") under the
headings ">" and "> ".
Based upon the foregoing and having regard to legal considerations I deem relevant,
I am of the opinion that:
1. AMBAC Indemnity is a stock insurance company duly organized and
validly existing under the laws of the State of Wisconsin and duly
qualified to conduct an insurance business in the State of >.
2. AMBAC indemnity has full corporate power and authority to execute
and deliver the Policy and the Policy has been duly authorized,
executed and delivered by AMBAC indemnity and constitutes a legal,
valid and binding obligation of AMBAC indemnity enforceable in
accordance with its terms except to the extent that the enforceability
(but not the validity) of such obligation may be limited by any
applicable bankruptcy, insolvency, liquidation, rehabilitation or other
similar law or enactment now or hereafter enacted affecting the
enforcement of creditors' rights.
3~ The execution and delivery by AMBAC indemnity of the Policy will
not, and the consummation of the transactions contemplated thereby
and the satisfaction of the terms thereof will not, conflict with or
result in a breach of any of the terms, conditions or provisions of the
21
Certificate of Incorporation or By-Laws of AMBAC Indemnity, or any
restriction contained in any contract, agreement or instrument to
which AMBAC Indemnity is a party or by which it is bound or
constitute a default under any of the foregoing.
4. Proceedings legally required for the issuance of the Policy have been
taken by AMBAC Indemnity and licenses, orders, consents or other
authorizations or approvals of any governmental boards or bodies
legally required for the enforceability of the Policy have been
obtained; any proceedings not taken and any licenses, authorizations
or approvals not obtained are not material to the enforceability of the
Policy.
5. The statements contained in the Official Statement under the heading
">," insofar as such statements constitute summaries of the matters
referred to therein, accurately reflect and fairly present the
information purported to be shown and, insofar as such statements
describe AMBAC Indemnity, fairly and accurately describe AMBAC
Indemnity.
6. The form of Policy contained in the Official Statement under the
heading ">" is a true and complete copy of the form of Policy.
Very truly yours,
Vice President and
Assistant General Counsel
22
EXHIBIT K
CERTIFICATE OF BOND INSURER
In connection with the issuance of $ > (the "lssuer") > (the "Bonds"),
AMBAC Indemnity Corporation i"AMBAC") is issuing a municipal bond insurance
policy [and endorsement thereto] (the "Insurance Policy") insuring the payment of
principal and interest when due on the Bonds, all as more fully set out in the Insurance
Policy.
This certificate is to advise you that:
(i) the Insurance Policy is an unconditional and recourse obligation of
us (enforceable by or on behalf of the holders of the Bonds) to pay the scheduled
payments of interest and principal on the Bonds in the event of a Nonpayment as
defined in the Insurance Policy;
(ii) the insurance premium of $> was determined in arm's length
negotiations in accordance with our standard procedures, is required to be paid as a
condition to the issuance of the Insurance Policy and represents a reasonable charge
for the transfer of credit risk;
(iii) no portion of such premium represents an indirect payment of
costs related to the issuance of the Bonds, including rating agency fees directly
attributable to the issuance of the Bonds or the provision of additional services by us,
or the direct or indirect payment for a cost, risk or other element that is not
customarily borne by insurers of tax-exempt Bonds (in transactions in which the
guarantor has no involvement other than as a guarantor);
(iv) we are rated in one of the two highest categories for claims
paying ability by Standard & Poor's Corporation and Moody's Investors Services;
iv) we do not reasonably expect that we will be called upon to make
any payment under the Insurance Policy and we are entitled by subrogation to the
rights of the bondholders to be fully and immediately paid by the obligation of the
Bonds for any payment made by us under the Insurance Policy;
(vii we are reasonably assured (based on a binding obligation of an
entity with sufficient funds) that sufficient funds will be available to fully retire the
Bonds according to the regularly scheduled payments of principal or interest on the
Bonds or upon any mandatory redemption of the Bonds pursuant to the terms of the
Bonds in the event that none (or an insubstantial portion) of the proceeds of the
Bonds are expended for a purpose other than the payment of costs of issuance and
our premium;
23
(vii) the Issuer is not entitled to a refund for the Insurance Policy;
(viii) we are not exempt from Federal Income Tax, and
(ix) we would not have issued the Insurance Policy in the absence of
a Debt Service Reserve Fund of the size and type established by the documents
pursuant to which the Bonds are being issued, and it is normal and customary to
require a Debt Service Reserve Fund of such a size and type in similar transactions.
DATED: >
AMBAC INDEMNITY CORPORATION
By:
Vice President and Assistant
General Counsel
24
EXHIBIT L
AMBAC INDEMNITY CORPORATION WIRING INSTRUCTIONS
(REVISED - AS OF 8/2/93)
Citibank N.A.
ABA NO. 021000089
For: AMBAC Indemnity Corporation
A/C No. 40609486
Advise: Ivan Greenfield (212) 208-3277
* ** Please indicate Policy Number on wire * * *
POLICY NUMBER CAN BE OBTAINED FROM AMBAC INDEMNITY'S CLOSING
DEPARTMENT.
CALL JANINE FEUDI AT (212) 208-3301
25