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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1995
REGISTRATION NO. 33-48996
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AIG LIQUIDITY CORP. AMERICAN INTERNATIONAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER) CHARTER)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (STATE OR OTHER JURISDICTION OF INCORPORATION OR
ORGANIZATION) ORGANIZATION)
PENDING 13-2592361
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
100 NYALA FARM 70 PINE STREET
WESTPORT, CONNECTICUT 06880 NEW YORK, NEW YORK 10270
(203) 222-4700 (212) 770-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES) OFFICES)
KATHLEEN E. SHANNON, ESQ.
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET
NEW YORK, NEW YORK 10270
(212) 770-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time on or after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: /X/
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) FEE(3)
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Liquidity Facility Obligations and Credit Facility
Obligations(4)........................................... $93,750,000 100% $93,750,000 $32,328
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Guarantee Obligations(4)................................... $93,750,000 100% $93,750,000 $32,328
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(1) Maximum fee receivable by Registrants over the life of the Liquidity
Facility Obligations and Credit Facility Obligations (collectively, the
"Facility Obligations") and Guarantee Obligations (collectively, the
"Obligations") issued hereunder, estimated as product of (a) $1,500,000,000
(expected maximum amount of principal of and interest on Bonds subject to
the Obligations), (b) .0025 (expected maximum per annum fee per $1.00 of
principal of and interest on Bonds subject to the Obligations) and (c) 25
(expected maximum number of years any Obligations will be outstanding).
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Previously remitted.
(4) This Registration Statement also covers Obligations issued in connection
with any remarketing of Bonds purchased by the Registrants or their
affiliates.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 1, 1995
LIQUIDITY FACILITY OBLIGATIONS
AND
CREDIT FACILITY OBLIGATIONS
OF
AIG LIQUIDITY CORP.
AND
GUARANTEE OBLIGATIONS
OF
AMERICAN INTERNATIONAL GROUP, INC.
AIG Liquidity Corp. ("AIG-LC") may from time to time enter into standby bond
purchase agreements (each, a "Standby Agreement") with issuers of or ultimate
obligors (each, an "Issuer") in respect of one or more series of variable rate
municipal securities (each such issue, a series of "Bonds") and, in some cases,
the tender and paying agent (each, a "Tender Agent") for the Bonds and/or the
trustee (each, a "Trustee") under the indenture, resolution or ordinance (each,
an "Indenture") pursuant to which the Bonds are being or have been issued. The
Bonds of each such series, including any Bonds remarketed by a remarketing agent
(each, a "Remarketing Agent") as described herein, will be subject, at the
option of the holder of the Bonds, to tender for purchase and, under certain
circumstances, will be subject to mandatory tender for purchase, in each case at
the times and on the terms and conditions set forth in the Indenture for such
Bonds. Pursuant to any such Standby Agreement, AIG-LC will be obligated to
purchase tendered Bonds which have not been remarketed by a Remarketing Agent as
described in, and subject to any conditions described in, the accompanying
Prospectus Supplement (the "Prospectus Supplement"). Any tendered Bonds so
purchased by AIG-LC would again be subject to tender for purchase at the option
of the holder if such Bonds are remarketed by the Remarketing Agent.
In lieu of entering into a Standby Agreement with respect to a series of
Bonds, AIG-LC may from time to time issue direct-pay letters of credit (each, a
"Letter of Credit") in respect of such series of Bonds. Each Letter of Credit
will be issued in favor of the Trustee under the Indenture pursuant to which the
Bonds are issued for the benefit of the holders of the Bonds. Pursuant to any
such Letter of Credit, the Trustee will be authorized to draw directly on AIG-LC
from time to time to fund payments of principal of and interest on the Bonds or
to fund the purchase by the Tender Agent of tendered Bonds which have not been
remarketed by a Remarketing Agent (each such drawing, a "Credit Drawing") in
each case as described in, and subject to any conditions described in, the
Prospectus Supplement. In conjunction with issuing a Letter of Credit, AIG-LC
and the Issuer of the relevant series of Bonds will enter into a reimbursement
agreement ("Reimbursement Agreement") pursuant to which AIG-LC will be entitled
to reimbursement of all Credit Drawings at such times and on such terms as
provided in the Reimbursement Agreement and described in the accompanying
Prospectus Supplement.
The payment obligations of AIG-LC under each Standby Agreement or Letter of
Credit will be unconditionally guaranteed pursuant to a general guarantee
relating to all Standby Agreements or Letters of Credit or a specific guarantee
relating to the relevant Standby Agreement or Letter of Credit (the general
guarantee and each such specific guarantee, a "Guarantee") issued by American
International Group, Inc. ("AIG").
The Prospectus Supplement with respect to a Standby Agreement or Letter of
Credit and a Guarantee will set forth the title of the relevant series of Bonds,
the name of the Issuer and any Insurer (as hereinafter defined), a summary of
certain terms of the Bonds relevant to the operation of the Standby Agreement or
Letter of Credit and the Guarantee, and specific terms of such Standby Agreement
or Letter of Credit and Guarantee, including whether and under what
circumstances the obligations under the Standby Agreement or Letter of Credit
and Guarantee may be suspended or terminated.
This Prospectus and the Prospectus Supplement together constitute an
offering of the obligations of AIG-LC under the relevant Standby Agreement (the
"Liquidity Facility Obligations") or the relevant Letter of Credit (the "Credit
Facility Obligations") and the obligations of AIG under the relevant Guarantee
(the "Guarantee Obligations" and, together with the Liquidity Facility
Obligations or the Credit Facility Obligations, the "Obligations") but do not
constitute an offering of the Bonds related thereto, which have been or will be
offered pursuant to a separate offering document (the "Official Statement").
AIG-LC and AIG undertake no responsibility with respect to the accuracy or
completeness of any Official Statement or any information set forth therein. The
Obligations may not be traded separately from the Bonds to which they relate.
This Prospectus and the Prospectus Supplement may be delivered at the time of
initial issuance of the Bonds of a series or the remarketing thereof in
connection with the replacement by the Obligations of another liquidity facility
or credit facility in effect with respect to such Bonds and, when appropriately
supplemented, if required, may also be delivered in connection with a
remarketing of any Bonds purchased by AIG-LC or any affiliate thereof.
Payment of principal of and interest on the Bonds of a series to which
Liquidity Facility Obligations relate is solely the obligation of the Issuer and
is not insured or guaranteed by AIG-LC, AIG or any affiliate thereof. Although
Credit Facility Obligations issued by AIG-LC with respect to a series of Bonds
will serve to support payment of principal of and interest on such Bonds,
payment of such amounts will be primarily the obligation of the Issuer, as
described in the Official Statement for such Bonds, notwithstanding the
existence of such Credit Facility Obligations.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
FOR NORTH CAROLINA RESIDENTS ONLY
THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED OF THE OFFERING, NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
THIS PROSPECTUS MAY NOT BE DELIVERED UNLESS ACCOMPANIED BY THE PROSPECTUS
SUPPLEMENT.
The date of this Prospectus is , 1995
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AVAILABLE INFORMATION
AIG is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission, Room
1024, 450 Fifth Street, N.W., 13th Floor, Washington, D.C. 20549, as well as the
following Regional Offices: 7 World Trade Center, 13th Floor, New York, New York
10048 and Northwestern Atrium, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies can be obtained by mail at prescribed rates.
Requests should be directed to the Commission's Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements and
other information can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which AIG's common stock
is listed. This Prospectus does not contain all of the information set forth in
the Registration Statement, of which this Prospectus is a part, and exhibits
thereto which AIG-LC and AIG have filed with the Commission under the Securities
Act of 1933 (the "1933 Act"), to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document has been filed by AIG with the Commission (File No.
0-4652) and is incorporated herein by reference:
(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1994;
(2) AIG's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995;
(3) AIG's Proxy Statement dated April 3, 1995; and
(4) AIG's Report on Form 8-K dated February 23, 1995.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15 of the 1934
Act after the date of this Prospectus and prior to the termination of the
Obligations shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
AIG will provide without charge to each person to whom this Prospectus is
delivered, upon the written or oral request of any such person, a copy of the
documents (excluding exhibits thereto, unless such exhibits are specifically
incorporated by reference into such documents) referred to above which have been
or may be incorporated herein by reference and not furnished herewith. Requests
for such documents should be directed to AIG's Director of Investor Relations,
70 Pine Street, New York, New York 10270, telephone (212) 770-6667.
This Prospectus constitutes a prospectus with respect to the Obligations of
AIG-LC and AIG specified in the Prospectus Supplement. No Registration Statement
has been filed under the 1933 Act with respect to the Bonds specified in the
Prospectus Supplement.
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DESCRIPTION OF THE OBLIGATIONS
GENERAL
Standby Agreements or Letters of Credit may be entered into from time to
time (in each case guaranteed by a Guarantee) with respect to one or more series
of Bonds specified in the Prospectus Supplement. The Bonds of each series and
any municipal bond insurance policy purchased by the Issuer with respect to such
Bonds (an "Insurance Policy") have been or will be described in a separate
Official Statement of the Issuer. AIG-LC and AIG undertake no responsibility
with respect to the accuracy or completeness of any Official Statement or any
information set forth therein.
The obligations of AIG-LC under each Standby Agreement or Letter of Credit
and the obligations of AIG under each Guarantee will rank equally with all other
general unsecured and unsubordinated obligations of AIG-LC and AIG,
respectively. The Obligations are not being issued pursuant to an indenture.
In connection with each Standby Agreement or Letter of Credit, AIG will
agree to provide, or cause to be provided, by means of capital contributions,
purchases of assets, loans or otherwise, funds to AIG-LC to the extent necessary
to enable AIG-LC to meet its obligations under the Standby Agreement or Letter
of Credit. Any such agreement to provide or cause to be provided funds will be
solely for the benefit of and enforceable by AIG-LC and AIG.
AIG depends on its subsidiaries for cash flow in the form of loans,
advances and dividends. Some AIG subsidiaries, namely those in the insurance
business, are subject to regulatory restrictions on the amount of dividends
which can be issued to AIG. These restrictions vary by state. For example,
unless permitted by the New York Superintendent of Insurance, general insurance
companies domiciled in New York may not pay dividends to shareholders which in
any twelve month period exceed the lesser of 10 percent of the company's
statutory policyholders' surplus or 100 percent of its "adjusted net investment
income," as defined. Generally, less severe restrictions applicable to both
general and life insurance companies exist in most of the other states in which
AIG's insurance subsidiaries are domiciled. Certain foreign jurisdictions have
restrictions which generally cause only a temporary delay in the remittance of
dividends. There are also various local restrictions limiting cash loans and
advances to AIG by its subsidiaries. Largely as a result of the restrictions,
approximately 64 percent of consolidated capital funds were restricted from
immediate transfer to AIG at December 31, 1994.
Each Standby Agreement or Letter of Credit will be entered into
concurrently with or subsequent to the original issuance of the Bonds described
in the Prospectus Supplement, in either case as set forth in the Prospectus
Supplement, and will expire on the stated termination date set forth in the
Prospectus Supplement unless extended or earlier terminated upon the conditions
set forth in the Prospectus Supplement.
The Prospectus Supplement will set forth the specific terms of the
Obligations in respect of which this Prospectus is being delivered, including
among other things: (1) the timing, terms and method of purchase of Bonds to
which the Liquidity Facility Obligations relate under the Standby Agreement; (2)
the timing, terms and method of making Credit Drawings to which Credit Facility
Obligations relate under the Letter of Credit and the timing, terms and method
of reimbursing AIG-LC for Credit Drawings under the related Reimbursement
Agreement; (3) whether and under what circumstances such Obligations will be
terminable without, prior to, or after a mandatory tender for purchase or
acceleration of the related Bonds; (4) any limitations on the rights of AIG-LC
to resell Bonds purchased by AIG-LC; (5) the commitment fee payable to AIG-LC;
and (6) any other relevant terms of the Standby Agreement, or the Letter of
Credit, the Reimbursement Agreement and the Guarantee. The term of each Standby
Agreement or Letter of Credit shall be set forth in the Prospectus Supplement,
and generally will be at least 360 days, unless the final maturity of the Bonds
occurs prior to the end of such 360 day period, in which case the term of the
Standby Agreement or Letter of Credit would end on the date of such final
maturity of the Bonds. See "Tender of Bonds -- Mandatory Tender."
The Prospectus Supplement will also specify the following terms of the
Bonds to which the Obligations relate: (1) the Issuer and title of such Bonds;
(2) the aggregate principal amount of such Bonds; and
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(3) certain other terms of the Bonds or any Insurance Policy relevant to the
operation of the Standby Agreement, the Letter of Credit, the Reimbursement
Agreement or the Guarantee.
Payment of principal of and interest on the Bonds of a series to which
Liquidity Facility Obligations relate is solely the obligation of the Issuer and
is not insured or guaranteed by AIG-LC, AIG, or any affiliate thereof. Although
Credit Facility Obligations issued by AIG-LC with respect to a series of Bonds
will serve to support payment of principal of and interest on such Bonds,
payment of such amounts will be primarily the obligation of the Issuer, as
described in the Official Statement for such Bonds, notwithstanding the
existence of such Credit Facility Obligations. Under certain circumstances, the
Obligations with respect to the purchase of Bonds of any series may be
terminated or suspended upon an Event of Default (as defined in the relevant
Standby Agreement or Reimbursement Agreement and described in the Prospectus
Supplement). See "The Standby Agreements -- Events of Default and Nature of
Obligations" and "The Letters of Credit -- Events of Default."
Each holder of Bonds will be responsible for acting individually with
respect to, among other things, the giving of notices, responding to any
requests for consents, waivers or other amendments pertaining to the Bonds,
enforcing covenants and taking action upon a default.
During the period that the Bonds are owned by AIG-LC or a qualified
purchaser from AIG-LC (including AIG), such Bonds will bear interest at a rate
based on a reference rate or an index as described in the Prospectus Supplement,
subject in certain cases to a maximum rate, or will bear interest as otherwise
described in the Prospectus Supplement. AIG-LC or its affiliates may, to hedge
its interest rate exposure in connection therewith, enter into interest rate
swaps or similar transactions that would have the effect of converting interest
on the purchased Bonds into a LIBOR based rate (subject in certain cases to no
such maximum rate or to a different maximum rate). Unless otherwise set forth in
the Prospectus Supplement, the Remarketing Agent will have a continuing
obligation to use its best efforts to find purchasers for any Bonds owned by
AIG-LC or such qualified purchaser.
The following descriptions under "Tender of Bonds," "The Standby
Agreements," "The Letters of Credit," "Amount of Commitment" and "The
Guarantees" are general in nature and qualified in their entirety by reference
to, and may be superseded to the extent described in, the Prospectus Supplement
relating to any particular series of Bonds.
TENDER OF BONDS
Tender Option
The Bonds of each series will be subject, at the option of the holder of
the Bonds, to tender for purchase with funds available to the Tender Agent (the
"Tender Option"). The terms of the Bonds of a series may permit such tenders at
any time upon notice or at specified times relating to the reset of the interest
rate with respect to the Bonds of such series. On the date on which the Bonds of
any series are issued and on each interest reset date for such Bonds, in
general, the Remarketing Agent will determine the interest rate for the Bonds
which is necessary to remarket tendered Bonds at a price equal to 100% of the
principal amount thereof plus any accrued interest. The Bonds will bear interest
at such rate for the next succeeding interest rate period. Tenders of the Bonds
will be made to the Tender Agent for purchase at a price equal to 100% of the
principal amount thereof plus any accrued interest to the date of tender (the
"Purchase Price").
Mandatory Tender
Bonds with respect to which the interest rate period has been changed or
which have been converted to a fixed rate may be subject to mandatory tender to
the Tender Agent for purchase. In addition, the Bonds may be subject to
mandatory tender for purchase immediately prior to the termination or expiration
of the relevant Standby Agreement or Letter of Credit, unless the Issuer makes
provision for the delivery of an alternate liquidity facility or credit facility
meeting the criteria of the Indenture. Unless otherwise provided in the
Prospectus Supplement, if such Bonds are not delivered when due for tender, they
will nevertheless be deemed to be tendered and purchased at the Purchase Price
with funds available to the Tender Agent.
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THE STANDBY AGREEMENTS
The following paragraphs under the caption "The Standby Agreements" apply
to any series of Bonds with respect to which AIG-LC has entered into a Standby
Agreement.
Method of Purchase of Bonds by AIG-LC
On the purchase date for the Bonds of any series, the Tender Agent or the
Trustee as set forth in the Prospectus Supplement shall give AIG-LC notice of
the aggregate Purchase Price of that portion of the tendered Bonds of such
series that remain unsold. After receipt of such notice, AIG-LC shall (unless
its obligations have been terminated or suspended and subject to any conditions,
including its Available Commitment (as defined below), described in the
Prospectus Supplement) by the time set forth in the Prospectus Supplement, make
such amount available to the party so designated in the Prospectus Supplement,
in immediately available funds or such other funds as shall be permitted as
described in the Prospectus Supplement. As soon as practicable thereafter, but
in any event not later than the time set forth in the Prospectus Supplement on
each purchase date, the Tender Agent will be required under the Indenture to
purchase such Bonds, for the account of AIG-LC, at the Purchase Price. The
Tender Agent will be required to remit to AIG-LC such funds which are not so
used to purchase tendered Bonds.
The Indenture will in general provide that if sufficient funds are duly
deposited on such date, then such Bond shall be deemed to have been purchased
for all purposes under the related Indenture and that thereafter such holder
will have no further rights under the related Indenture, except to receive the
Purchase Price from the funds so deposited upon surrender thereof. Neither
AIG-LC nor AIG will have any liability to a holder for the failure by the Tender
Agent to apply funds received by it to the Purchase Price of the related Bonds.
Events of Default and Nature of Obligations
Unconditional Obligations
If the Liquidity Facility Obligations are unconditional, as described in
the Prospectus Supplement, the occurrence and continuance of certain Events of
Default (as defined in the Standby Agreement and described in the Prospectus
Supplement) shall, except as otherwise described in the Prospectus Supplement,
give AIG-LC the right to terminate its obligations under the Standby Agreement
upon written notice to the Issuer and Tender Agent specifying a date on which
the Standby Agreement shall terminate. In such event, a mandatory tender of the
Bonds may take place pursuant to the Indenture prior to the date specified for
termination and AIG-LC will be obligated, subject to the terms and conditions of
the Standby Agreement and except as otherwise described in the Prospectus
Supplement, to provide funds for the payment of the Purchase Price of tendered
Bonds that are not remarketed.
Conditional Obligations
If the Liquidity Facility Obligations are conditional, as described in the
Prospectus Supplement, the occurrence and continuance of certain Events of
Default will, except as otherwise described in the Prospectus Supplement, result
in either immediate suspension or termination of AIG-LC's obligation to purchase
without further action by AIG-LC or give AIG-LC the right to suspend or
terminate its obligations under the Standby Agreement. In such event, except as
otherwise described in the Prospectus Supplement, either no mandatory tender of
Bonds will take place prior to such a suspension or termination or if a
mandatory tender does occur the Standby Agreement will have terminated prior to
the purchase date. Except as otherwise described in the Prospectus Supplement,
neither AIG-LC nor AIG will be obligated to provide funds for the payment of the
Purchase Price of tendered Bonds during such a suspension or following such
termination.
Obligation of Tender Agent to Obtain Funds Under the Standby Agreement
The Tender Agent will be entitled under the Standby Agreement to demand
funds for the payment of Purchase Price and the Standby Agreement will expressly
provide that the Standby Agreement is for the benefit of the Tender Agent. The
Indenture will provide that the Tender Agent is obligated to take such
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actions as may be necessary to obtain immediately available funds on each
Purchase Date under the Standby Agreement sufficient in amount to enable the
Tender Agent to pay the Purchase Price on such Purchase Date.
THE LETTERS OF CREDIT
The following paragraphs under the caption "The Letters of Credit" apply to
any series of Bonds with respect to which AIG-LC has issued a Letter of Credit.
Method of Payment of Credit Drawings by AIG-LC
The Trustee shall give to AIG-LC notice of Credit Drawings from time to
time up to the Stated Amount (as defined below). After receipt of such notice,
AIG-LC shall (unless its obligations have been terminated or suspended and
subject to any conditions, including its Stated Amount, described in the
Prospectus Supplement), by the time set forth in the Prospectus Supplement, make
such amount available to the Trustee, in immediately available funds or such
other funds as shall be permitted as described in the Prospectus Supplement. The
Trustee will apply such Credit Drawings to pay principal of and interest on the
Bonds or to purchase at the Purchase Price tendered bonds which have not been
remarketed by a Remarketing Agent. If the Credit Drawing is made to purchase
tendered Bonds, the Trustee will be required to remit to AIG-LC such funds which
are not so used to purchase tendered Bonds.
Neither AIG-LC nor AIG will have any liability to a holder for the failure
by the Trustee or any other person to apply funds received by it under the
Letter of Credit to payments of principal of, interest on or Purchase Price of,
as the case may be, the related Bonds.
Method of Reimbursement of Credit Drawings
Pursuant to the Reimbursement Agreement, AIG-LC will be entitled to
reimbursement by the Issuer of the Bonds of all Credit Drawings at such times
and on such terms as provided in the Reimbursement Agreement and described in
the Prospectus Supplement. If any such reimbursement obligation of an Issuer is
not paid on the same day on which Credit Drawings are made, the Issuer will be
obligated to pay interest to AIG-LC on the unpaid amount thereof.
Events of Default
The default by the Issuer of its obligation to reimburse AIG-LC for Credit
Drawings, or the occurrence and continuance of certain other Events of Default
(as defined in the Reimbursement Agreement and described in the Prospectus
Supplement), shall, except as otherwise described in the Prospectus Supplement,
give AIG-LC the right to terminate its obligations under the Letter of Credit
upon written notice to the Issuer or the Trustee specifying a date on which the
Letter of Credit shall terminate. In such event, a mandatory tender or
acceleration of the Bonds may take place pursuant to the Indenture prior to the
date specified for termination and AIG-LC will be obligated, subject to the
terms and conditions of the Letter of Credit and except as otherwise described
in the Prospectus Supplement, to make Credit Drawings available to the Trustee
for the acceleration of the Bonds or the payment of the Purchase Price of
tendered Bonds.
Obligation of Trustee to Obtain Funds Under the Letter of Credit
The Trustee will be entitled under the Letter of Credit to draw funds for
the payment of principal of and interest on the Bonds or to purchase tendered
Bonds which have not been remarketed by a Remarketing Agent, and the Letter of
Credit will expressly provide that the Letter of Credit is for the benefit of
the Trustee. The Indenture will provide that the Trustee is obligated to make
Credit Drawings as necessary to obtain immediately available funds for the
payment of principal of and interest on the Bonds or to purchase tendered Bonds
which have not been remarketed by a Remarketing Agent, in each case as such
amounts become due and payable.
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AMOUNT OF COMMITMENT
Except as otherwise described in the Prospectus Supplement, each Standby
Agreement and Letter of Credit will have an initial stated amount which is equal
to the sum of (a) the aggregate principal amount of the Bonds and (b) an amount
at least equal to the interest that would accrue on the Bonds during the period
specified on the Prospectus Supplement, computed as though the Bonds bore
interest at the maximum rate of interest permitted to be borne by the Bonds for
such period as set forth in the related Prospectus Supplement (collectively, the
"Available Commitment" or "Stated Amount").
Upon the purchase of any Bonds under a Standby Agreement, and upon the
payment and reimbursement of Credit Drawings under a Letter of Credit, the
Available Commitment or Stated Amount will be adjusted as described in the
Prospectus Supplement.
THE GUARANTEES
The Liquidity Facility Obligations and Credit Facility Obligations will be
unconditionally guaranteed by AIG pursuant to a Guarantee. The Guarantee will
terminate upon the termination of AIG-LC's obligations pursuant to the relevant
Standby Agreement or Letter of Credit.
AIG LIQUIDITY CORP.
AIG Liquidity Corp. was incorporated on June 29, 1992 in the State of
Delaware. All outstanding capital stock of AIG-LC is owned by AIG. AIG-LC's
principal executive offices are located at 100 Nyala Farm, Westport, Connecticut
06880, Telephone No. (203) 222-4700.
The business of AIG-LC consists of providing liquidity for the payment of
the tender price of certain variable rate municipal securities through Standby
Agreements, providing credit support for the payment of principal of, interest
on and tender price of certain variable rate municipal securities through
Letters of Credit and certain related activities.
AMERICAN INTERNATIONAL GROUP, INC.
American International Group, Inc., a Delaware corporation ("AIG"), is a
holding company which through its subsidiaries is primarily engaged in a broad
range of insurance and insurance-related activities in the United States and
abroad. AIG's primary activities include both general and life insurance
operations. Other significant activities are financial services and agency and
service fee operations. The principal executive offices of AIG are located at 70
Pine Street, New York, New York 10270, telephone (212) 770-7000.
The following table sets forth the historical ratios of earnings to fixed
charges of AIG and its consolidated subsidiaries for the periods indicated:
THREE MONTHS ENDED
MARCH 31, 1995 YEARS ENDED DECEMBER 31
------------------- -----------------------------------------
1994 1993 1992 1991 1990
---- ---- ----- ---- ----
3.04 3.03 3.08 2.67 3.00 3.03
Earnings represent income from operations before income taxes plus fixed charges
and dividends received from less than fifty percent owned persons, and exclude
capitalized interest and the equity income of less than fifty percent owned
persons. Fixed charges include interest, whether expensed or capitalized, and is
the proportion of rental expense deemed representative of the interest factor.
The ratios shown are significantly affected as a result of the inclusion of
the fixed charges and operating results of AIG Financial Products Corp. and its
subsidiaries (AIG-FP). AIG-FP structures borrowings through guaranteed
investment agreements and engages in other complex financial transactions,
including interest rate and currency swaps. In the course of its business,
AIG-FP enters into borrowings that are primarily used to purchase assets that
yield rates greater than the rates on the borrowings with the intent of earning
a profit on the spread and to finance the acquisition of securities utilized to
hedge certain transactions.
7
9
The pro forma ratios of earnings to fixed charges, excluding the effects of the
operating results of AIG-FP, are 4.58 for the first quarter of 1995 and 5.23,
5.66, 5.15, 5.40 and 7.27 for 1994, 1993, 1992, 1991 and 1990, respectively. As
AIG-FP will continue to be a subsidiary, AIG expects that these ratios will
continue to be lower than they would be if the fixed charges and operating
results of AIG-FP were not included therein.
USE OF PROCEEDS
In consideration for issuing the Liquidity Facility Obligations or the
Credit Facility Obligations, AIG-LC will receive fees from the Issuer described
in the relevant Prospectus Supplement. AIG-LC expects that any such fees so
received would be transferred to AIG or a subsidiary of AIG by means of
dividends, loans or otherwise and used by AIG or such subsidiary for general
corporate purposes. Except as otherwise described in the Prospectus Supplement
relating to a particular series of Bonds, AIG will not receive separate fees
from the Issuer of such Bonds in consideration for issuing the Guarantee
Obligations.
PLAN OF DISTRIBUTION
The Obligations will be offered from time to time in connection with the
initial issuance of the Bonds of any series or the remarketing thereof in
connection with the replacement by the Obligations of another liquidity facility
or credit facility in effect with respect to such Bonds. The Obligations may not
be traded separately from the Bonds specified in the Prospectus Supplement. Such
Bonds have been or will be offered pursuant to a separate Official Statement
through any underwriters or agents named therein. AIG-LC and AIG undertake no
responsibility with respect to the accuracy or completeness of any Official
Statement or any information set forth therein.
VALIDITY OF OBLIGATIONS
Unless otherwise specified in the Prospectus Supplement relating to any
Obligations, the validity of the Liquidity Facility Obligations or the Credit
Facility Obligations will be passed upon for AIG-LC by Mudge Rose Guthrie
Alexander & Ferdon LLP, New York, New York and the validity of the Guarantee
Obligations will be passed upon for AIG by Kathleen E. Shannon, Esq., Vice
President and Senior Counsel of AIG. Carla A. Hills, a director of AIG, is a
partner of Mudge Rose Guthrie Alexander & Ferdon LLP.
EXPERTS
The consolidated financial statements of AIG and its subsidiaries and the
related financial statement schedules included in its Annual Report on Form 10-K
for the year ended December 31, 1994, incorporated herein by reference, are so
incorporated in reliance upon the report of Coopers & Lybrand, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
8
10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration Fee.......................................................... $ 32,328
Printing and Engraving.................................................... 15,000
Legal Fees and Expenses................................................... 530,000
Rating Agency Fees........................................................ N/A
Miscellaneous............................................................. N/A
--------
Total........................................................... $577,328
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of AIG provides:
"The Company shall indemnify to the full extent permitted by law any
person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the Company or serves or served any other enterprise
at the request of the Company."
The Certificate of Incorporation of AIG-LC provides:
"The Corporation shall indemnify to the full extent permitted by law
any person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the Corporation or serves or served any other
enterprise at the request of the Corporation."
Section 145 of the Delaware General Corporation Law permits indemnification
against expenses, fines, judgments and settlements incurred by any director,
officer or employee of the registrant in the event of pending or threatened
civil, criminal administrative or investigative proceedings, if such person was,
or was threatened to be made, a party by reason of the fact that he is or was a
director, officer or employee of the registrant. Section 145 also provides that
the indemnification provided for therein shall not be deemed exclusive of any
other rights to which those seeking indemnification may otherwise be entitled.
In addition, AIG and its subsidiaries maintain a directors' and officers'
liability insurance policy.
II-1
11
ITEM 16. EXHIBITS
*4.1 Form of Standby Bond Purchase Agreement to be entered into by AIG-LC
4.2 Form of Letter of Credit to be issued by AIG-LC
4.3 Form of Specific Guarantee of American International Group, Inc.
4.4 Form of General Guarantee of American International Group, Inc.
5.1 Opinion of Mudge Rose Guthrie Alexander & Ferdon LLP, with respect to the
Liquidity Facility Obligations or the Credit Facility Obligations
5.2 Opinion of Kathleen E. Shannon, Esq. with respect to the Guarantee Obligations
10.1 Form of Letter Agreement to be entered into by AIG-LC and AIG relating to a
Standby Bond Purchase Agreement or a Letter of Credit
10.2 Form of Reimbursement Agreement to be entered into by AIG-LC
12 Computation of ratio of earnings to fixed charges (filed as exhibit to Annual
Report on Form 10-K for the year ended December 31, 1994, and incorporated
herein by reference)
23.1 Consent of Coopers & Lybrand, independent accountants
23.2 Consent of Mudge Rose Guthrie Alexander & Ferdon LLP, (included in Exhibit 5.1)
23.3 Consent of Kathleen E. Shannon, Esq. (included in Exhibit 5.2)
*24.1 Power of Attorney for American International Group, Inc.
28 Information from reports furnished to state insurance regulatory authorities
(filed as exhibit to Annual Report on Form 10-K for the year ended December 31,
1994 and incorporated herein by reference)
---------------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
AIG pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 and incorporated herein by reference,
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by AIG pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference, and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in the Registration
Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
II-2
12
(4) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of AIG's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of AIG
or AIG-LC pursuant to the foregoing provisions, or otherwise, AIG and AIG-LC
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by AIG or AIG-LC of expenses incurred
or paid by a director, officer or controlling person of AIG or AIG-LC in the
successful defense of any action, suit or proceeding) is asserted against AIG or
AIG-LC by such director, officer or controlling person in connection with the
securities being registered, AIG or AIG-LC, as the case may be, will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
13
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE TOWN OF WESTPORT,
STATE OF CONNECTICUT, ON THE 28TH DAY OF JULY 1995.
AIG LIQUIDITY CORP.
By: JOSEPH J. CASSANO
JOSEPH J. CASSANO,
MANAGING DIRECTOR,
VICE PRESIDENT, AND TREASURER
------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 1 to the Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
------------------------------------------ -------------------------------- --------------
EDWARD E. MATTHEWS Director and Co-Chairman July 28, 1995
(EDWARD E. MATTHEWS)
PETROS K. Director and Co-Chairman July 28, 1995
SABATACAKIS (Principal Executive Officer)
(PETROS K. SABATACAKIS)
JOSEPH J. Managing Director, July 28, 1995
CASSANO Vice President, and Treasurer
(JOSEPH J. CASSANO) (Principal Financial Officer and
Principal Accounting Officer)
THOMAS R. SAVAGE Managing Director and July 28, 1995
(THOMAS R. SAVAGE) Vice President
II-4
14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK
AND STATE OF NEW YORK, ON THE 28TH DAY OF JULY 1995.
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ M.R. GREENBERG*
-------------------------------------
(M.R. GREENBERG, CHAIRMAN)
------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 1 to the Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
------------------------------------------ --------------------------- ------------------
/s/ M.R. Chairman and Director July 28, 1995
GREENBERG* (Principal Executive
------------------------------------------ Officer)
(M.R. GREENBERG)
/s/ EDWARD E. MATTHEWS* Vice Chairman and Director July 28, 1995
------------------------------------------ (Principal Financial
(EDWARD E. MATTHEWS) Officer)
/s/ HOWARD I. Senior Vice President July 28, 1995
SMITH* and Comptroller
------------------------------------------ (Principal Accounting
(HOWARD I. SMITH) Officer)
/s/ M. BERNARD AIDINOFF* Director July 28, 1995
------------------------------------------
(M. BERNARD AIDINOFF)
/s/ LLOYD Director
BENTSEN*
------------------------------------------
(LLOYD BENTSEN)
II-5
15
SIGNATURE TITLE DATE
------------------------------------------ --------------------------- ------------------
/s/ MARSHALL A. COHEN* Director July 28, 1995
------------------------------------------
(MARSHALL A. COHEN)
/s/ BARBER B. CONABLE, Director July 28, 1995
JR.*
(BARBER B. CONABLE, JR.)
/s/ MARTIN S. FELDSTEIN* Director July 28, 1995
(MARTIN S. FELDSTEIN)
/s/ HOUGHTON FREEMAN* Director July 28, 1995
(HOUGHTON FREEMAN)
/s/ LESLIE L. Director July 28, 1995
GONDA*
(LESLIE L. GONDA)
Director
(CARLA A. HILLS)
/s/ FRANK HOENEMEYER* Director July 28, 1995
(FRANK HOENEMEYER)
/s/ JOHN I. Director July 28, 1995
HOWELL*
(JOHN I. HOWELL)
/s/ DEAN P. Director July 28, 1995
PHYPERS*
(DEAN P. PHYPERS)
/s/ JOHN J. Director July 28, 1995
ROBERTS*
(JOHN J. ROBERTS)
/s/ ERNEST E. Director July 28, 1995
STEMPEL*
(ERNEST E. STEMPEL)
/s/ THOMAS R. Director July 28, 1995
TIZZIO*
(THOMAS R. TIZZIO)
*By: HOWARD I.
SMITH
(HOWARD I. SMITH)
(ATTORNEY-IN-FACT)
II-6
16
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE
------ ---------------------------------------------------------------------------- ----
*4.1 Form of Standby Bond Purchase Agreement to be entered into by AIG-LC
4.2 Form of Letter of Credit to be issued by AIG-LC
4.3 Form of Specific Guarantee of American International Group, Inc.
4.4 Form of General Guarantee of American International Group, Inc.
5.1 Opinion of Mudge Rose Guthrie Alexander & Ferdon LLP, with respect to the
Liquidity Facility Obligations or Credit Facility Obligations
5.2 Opinion of Kathleen E. Shannon, Esq. with respect to the Guarantee
Obligations
10.1 Form of Letter Agreement to be entered into by AIG-LC and AIG relating to a
Standby Bond Purchase Agreement or a Letter of Credit
10.2 Form of Reimbursement Agreement to be entered into by AIG-LC
12 Computation of ratio of earnings to fixed charges (filed as exhibit to
Annual Report on Form 10-K for the year ended December 31, 1994, and
incorporated herein by reference)
23.1 Consent of Coopers & Lybrand, independent accountants
23.2 Consent of Mudge Rose Guthrie Alexander & Ferdon LLP (included in Exhibit
5.1)
23.3 Consent of Kathleen E. Shannon, Esq. (included in Exhibit 5.2)
*24.1 Power of Attorney for American International Group, Inc.
28 Information from reports furnished to state insurance regulatory authorities
(filed as exhibit to Annual Report on Form 10-K for the year ended December
31, 1994 and incorporated herein by reference)
---------------
* Previously filed.
1
EXHIBIT 4.2
APPENDIX I
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT
___________, ____
U.S. $________
No._____
________________, as trustee (the "Trustee") under the ________
[ordinance, resolution, order, trust indenture or similar instrument
of the Issuer pursuant to which the Bonds are issued and secured],
as amended and supplemented (the "Bond Security Agreement"),
including the ____________ [supplement to the Bond Security
Agreement specifying terms of Bonds] (the "Series Bond Security
Agreement"), each adopted _________ __, ____, of the ________________
[Name of Issuer] authorizing the issuance of the Bonds (as
hereinafter defined)
____________________________
________, ________
Attention:
__________________
__________________
__________________
Ladies and Gentlemen:
We hereby establish in your favor as Trustee for the benefit
of the holders of the Bonds (as hereinafter defined) our Irrevocable
Transferable Letter of Credit No.___ for the account of ________________________
(the "Issuer"). Any capitalized terms which are not expressly defined herein
shall have the meanings set forth in the Bond Security Agreement. In accordance
with the terms hereof, we hereby irrevocably authorize you to draw on us from
time to time, from and after the date hereof to and including the earliest to
occur of our close of business on:
(i) _______ __, ____ (the "Stated Expiration Date"),
Page 1 of 27 Pages
2
(ii) the earlier of (A) the date which is five (5) calendar
days following the Conversion Date (as defined in the Series Bond Security
Agreement) as such date is specified in a certificate in the form of Exhibit A
hereto or (B) the date which is five (5) calendar days following the date on
which we honor a drawing on the Letter of Credit on or after the Conversion Date
as such date is specified in a certificate in the form of Exhibit A hereto,
(iii) the date which is fifteen (15) calendar days following
our receipt from you of a certificate in the form set forth as Exhibit B hereto,
(iv) the date which is five (5) calendar days following
the date on which an Acceleration Drawing is honored by us, and
(v) the date which is fifteen (15) calendar days following
receipt by you of a written notice from us specifying the occurrence of an
Event of Default under the Reimbursement Agreement dated as of _______ _______ ,
____ between the Issuer and us (the "Reimbursement Agreement") and directing
you to redeem the Bonds (as hereinafter defined)
(the earliest of such dates hereinafter referred to as the "Termination Date")
(provided that if on the Termination Date you are unable to present any Payment
Document as herein provided as a consequence of any event referred to as a
cause for interruption of business under Article 17 of the Uniform Customs (as
hereinafter defined), then such Payment Document shall be deemed presented in
accordance herewith if the same is deposited in the mail, registered postage
prepaid, addressed to us as hereinafter provided and postmarked on or prior to
the Termination Date), a maximum aggregate amount not exceeding ____________
United States Dollars (U.S. $ _______ - the "Original Stated Amount") to pay
principal of and accrued interest on, or the purchase price of, the
$ _______________ Bonds, ____ Series issued by the Issuer (the "Bonds"), in
accordance with the terms hereof (said $ _______ having been initially
calculated to be equal to $_______, the original principal amount of the Bonds,
plus $_,___,___ which is at least ___ days' accrued interest on said principal
amount of the Bonds at the rate of __________ percent (___%) per annum (the
"Maximum Rate")). This credit is available to you against presentation of the
following certificates (with all blanks appropriately completed) (the "Payment
Documents") presented to AIG Liquidity Corp., a Delaware corporation (the
"Credit Provider"), at our office at _________,________, ________ (or such
other place as we may from time to time specify), Attention: _______ (or such
other person as we may from time to time specify):
(i) in the form attached as Exhibit C
Page 2 of 27 Pages
3
hereto to pay accrued interest on the Bonds as provided for
under Section _______ of the Series Bond Security Agreement
and Section _______ of the Bond Security Agreement (an
"Interest Drawing"),
(ii) in the form attached as Exhibit D hereto to pay the
principal amount of and accrued interest on the Bonds in
respect of any redemption of the Bonds as provided for in
Section _______ or _______ of the Bond Security Agreement or
Section _______ of the Series Bond Security Agreement (a
"Redemption Drawing"), provided that in the event the date of
redemption or purchase coincides with an Interest Payment
Date (as defined in the Bond Security Agreement) the
Redemption Drawing shall not include any accrued interest on
the Bonds (which interest is payable pursuant to an Interest
Drawing),
(iii) in the form attached as Exhibit E hereto, to
allow the Trustee, as Tender Agent (together with its
permitted successors and assigns, the "Tender Agent"), to
pay the purchase price of Bonds tendered for purchase as
provided for in Section _______ or Section _______ of the
Series Bond Security Agreement which have not been
successfully remarketed or for which the purchase price has
not been received by the Tender Agent by 11:00 A.M., New York
City time, on the purchase date (a "Liquidity Drawing"),
provided that in the event the purchase date coincides with
an Interest Payment Date, the Liquidity Drawing shall not
include any accrued interest on the Bonds (which interest is
payable pursuant to an Interest Drawing),
(iv) in the form attached as Exhibit F hereto, to pay
the principal of and accrued interest in respect of Bonds the
payment of which has been accelerated pursuant to Section ___
of the Bond Security Agreement (an "Acceleration Drawing"),
and
(v) in the form attached as Exhibit G hereto to pay the
principal amount of Bonds outstanding on _______ __, ____
(a "Stated Maturity Drawing"), each certificate to state
therein that it is given by your duly authorized officer and
dated the date such certificate is presented hereunder.
No drawings shall be made under this Letter of Credit for Credit
Provider Bonds (as defined in the Reimbursement Agreement). All drawings shall
be made by presentation of each
Page 3 of 27 Pages
4
Payment Document at our office at _______ , _____ _____, _____ _____ as
aforesaid, by hand delivery, by telecopier (at telecopier number (___) _______),
Attention: _______ , without further need of documentation, including the
original of this Letter of Credit, it being understood that each Payment
Document so submitted is to be the sole operative instrument of drawing. You
shall use your best efforts to give telephonic notice of a drawing to the Credit
Provider, Attention: Chief Financial Officer ((203) 222-4700) on
the Business Day preceding the day of such drawing (but such notice shall not be
a condition to drawing hereunder and you shall have no liability for not doing
so).
We agree to honor and pay the amount of any Interest,
Redemption, Liquidity, Acceleration or Stated Maturity Drawing if presented in
compliance with all of the terms of this Letter of Credit. If a Drawing is
presented prior to _____ A.M., New York City time, on a Business Day, we will
confirm to you by wire transfer of the amount specified, in immediately
available funds, and will notify you of the Federal Reserve Bank confirmation
number relating to such transfer by _____ P.M., New York City time, on the same
Business Day. If a Drawing is presented at or after _____ A.M., New York City
time, on a Business Day, we will confirm to you by wire transfer of the amount
specified, in immediately available funds, and will notify you of the Federal
Reserve Bank confirmation number relating to such transfer by _____ A.M., New
York City time, on the following Business Day. Payments made hereunder shall be
made by wire transfer to you or by deposit into your account with us in
accordance with the instructions specified by the Trustee in the drawing
certificate relating to a particular drawing hereunder. "Business Day" means
[incorporate definition from Bond Security Agreement].
The Available Amount (as hereinafter defined) of this Letter
of Credit will be reduced automatically by the amount of any drawing hereunder;
provided, however, that the amount of any Interest Drawing hereunder, less the
amount of the reduction in the Available Amount of this Letter of Credit
attributable to interest as specified in a certificate in the form of Exhibit D
or H hereto, shall be automatically reinstated effective the 11th calendar day
from the date of such drawing unless you shall have received notice by telecopy
(or other facsimile telecommunication) within ten (10) calendar days of the date
of any Interest Drawing that the Credit Provider has not been reimbursed in full
for any such drawing, or any other Event of Default has occurred under the
Reimbursement Agreement, and as a consequence thereof the Letter of Credit will
not be so reinstated. After payment by us of a Liquidity Drawing, the obligation
of the Credit Provider to honor drawings under this Letter of Credit will be
automatically reduced by an amount equal to the Original Purchase Price of any
Bonds (or portions thereof)
Page 4 of 27 Pages
5
purchased pursuant to said drawing. Prior to the Conversion Date, upon
reimbursement to the Credit Provider of the amount of any Liquidity Drawing
relating to Bonds purchased with the proceeds of such Liquidity Drawing plus all
accrued interest thereon (provided no Event of Default has occurred and is
continuing under the Reimbursement Agreement), this Letter of Credit shall be
reinstated by an amount equal to the Original Purchase Price of such Bonds. In
addition, without duplication of any reinstatement made pursuant to the
immediately preceding sentence, prior to the Conversion Date, in the event of
the remarketing of the Bonds (or portions thereof) previously purchased with the
proceeds of a Liquidity Drawing, our obligation to honor drawings hereunder will
be automatically reinstated concurrently upon receipt by us, or the Trustee or
the Tender Agent on our behalf, of an amount equal to the Original Purchase
Price of such Bonds (or portion thereof); the amount of such reinstatement shall
be equal to the Original Purchase Price of such Bonds (or portions thereof).
"Original Purchase Price" shall mean the principal amount of any Bond purchased
with the proceeds of a Liquidity Drawing plus the amount of accrued interest on
such Bond paid with the proceeds of a Liquidity Drawing (and not pursuant to an
Interest Drawing) upon such purchase.
Upon receipt by us of a certificate of the Trustee in the form
of Exhibit D or H hereto, the Available Amount of this Letter of Credit will
automatically and permanently reduce by the amount specified in such
certificate. Such reduction shall be effective as of the next Business Day
following the date of delivery of such certificate.
Upon any permanent reduction of the amounts available to be
drawn under this Letter of Credit, as provided herein, we may deliver to you a
substitute letter of credit in exchange for this Letter of Credit or an
amendment to this Letter of Credit substantially in the form of Exhibit I hereto
to reflect any such reduction. If we deliver to you such a substitute Letter of
Credit you shall simultaneously surrender to us for cancellation the Letter of
Credit then in your possession. The "Available Amount" shall mean the Original
Stated Amount (i) less the amount of all prior reductions pursuant to Interest,
Redemption, Liquidity, Acceleration or Stated Maturity Drawings, (ii) less the
amount of any reduction in the Available Amount of the Letter of Credit pursuant
to a reduction certificate in the form of Exhibit D or H hereto to the extent
such reduction is not already accounted for by a reduction in the Available
Amount pursuant to (i) above, (iii) plus the amount of all reinstatements as
above provided.
Prior to the Termination Date, we may extend the Stated
Expiration Date from time to time at the request of the Issuer by delivering to
you an amendment to this Letter of Credit in the form of Exhibit K hereto
designating the date to which the Stated
Page 5 of 27 Pages
6
Expiration Date is being extended. Each such extension of the Stated Expiration
Date shall become effective on the Business Day following delivery of such
notice to you and thereafter all references in this Letter of Credit to the
Stated Expiration Date shall be deemed to be references to the date designated
as such in such notice. Any date to which the Stated Expiration Date has been
extended as herein provided may be extended in a like manner.
Upon the Termination Date this Letter of Credit shall
automatically terminate and be delivered to the Credit Provider for
cancellation.
This Letter of Credit is transferable in whole only to your
successor as Trustee. Any such transfer (including any successive transfer)
shall be effective upon receipt by us (which receipt shall be subsequently
confirmed in writing to the transferor and the transferee by the Credit
Provider) of a signed copy of the instrument effecting each such transfer signed
by the transferor and by the transferee in the form of Exhibit J hereto (which
shall be conclusive evidence of such transfer) and, in such case the transferee
instead of the transferor shall, without the necessity of further action, be
entitled to all the benefits of and rights under this Letter of Credit in the
transferor's place; provided that, in such case, any certificates of the Trustee
to be provided hereunder shall be signed by one who states therein that he is a
duly authorized officer or agent of the transferee.
All communications with respect to this Letter of Credit (other than
presentation of Payment Documents) shall be addressed to us at _______ , _______
, _____ _____, _____ _____, Attention: _______ , _______ specifically referring
to the number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by, and construed in accordance with, the
terms of the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (the "Uniform
Customs"), except for Article 41 thereof, which shall not be applicable hereto,
and Article 48 thereof, which shall be applicable hereto except to the extent
described below and the first sentence of Article 54(e) thereof. As to matters
not governed by the Uniform Customs, this Letter of Credit shall be governed by
and construed in accordance with the laws of the State of New York, including
without limitation the Uniform Commercial Code as in effect in the State of New
York. Notwithstanding anything in Article 48 of the Uniform Customs to the
contrary, this Letter of Credit is transferable to any transferee who has
succeeded the Trustee, as Trustee under the Bond Security Agreement, and may be
successively transferred.
We hereby irrevocably submit to the non-exclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for the purposes of any legal
proceedings arising out of or in connection with this Letter of Credit.
Page 6 of 27 Pages
7
All payments made by us hereunder shall be made from our funds
or funds obtained by us from a participant of ours in this Letter of Credit, but
in no event shall such payment be made with funds obtained from the Issuer.
This Letter of Credit sets forth in full the terms of our
undertaking, and such undertaking shall not in any way be modified or amended by
reference to any other document whatsoever.
________________________
By________________________________
___________________
Page 7 of 27 Pages
8
EXHIBIT A
to
______________________
LETTER OF CREDIT
No. __________
NOTICE OF CONVERSION DATE
AIG Liquidity Corp.
_______________
_______ , ___________
Attention:
_______________
_______________
_______________
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. _______ dated _______ _______ , ____ (the "Letter of
Credit"), which has been established by you for the account of [Name of Issuer]
in favor of the Trustee.
The undersigned hereby certifies and confirms that the
Conversion Date of all of the Bonds within the meaning of the Series Bond
Security Agreement has occurred on [insert applicable date], and, accordingly,
said Letter of Credit shall terminate five days after such Conversion Date in
accordance with its terms.
All defined terms used herein which are not otherwise defined
herein shall have the same meaning as in the Letter of Credit.
_______________________
as Trustee
By ____________________
[Title of Authorized
Representative]
Page 8 of 27 Pages
9
EXHIBIT
B to
________________
LETTER OF CREDIT
No. _________
NOTICE OF TERMINATION
AIG Liquidity Corp.
__________________
_______ , __________
Attention:
____________
____________
____________
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. _______ dated _______ _______ , ____ (the "Letter of
Credit"), which has been established by you for the account of [Name of Issuer]
in favor of the Trustee.
The undersigned hereby certifies and confirms that [(i) no
Bonds (as defined in the Letter of Credit) remain Outstanding within the meaning
of the Bond Security Agreement, (ii) all drawings required to be made under the
Bond Security Agreement and available under the Letter of Credit have been made
and honored, or (iii) a substitute letter of credit has been issued to replace
the Letter of Credit in accordance with the Bond Security Agreement and the
Reimbursement Agreement (as such terms are defined in the Letter of Credit)]*,
and, accordingly, the Letter of Credit shall be terminated in accordance with
its terms.
All defined terms used herein which are not otherwise defined
shall have the same meaning as in the Letter of Credit.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
By Telecopy or Tested Telex
--------
* Insert appropriate statement.
Page 9 of 27 Pages
10
EXHIBIT C
to
________________
LETTER OF CREDIT
No._______
INTEREST DRAWING CERTIFICATE
AIG Liquidity Corp.
_____________
_______ , ________
Attention:
The undersigned individual, a duly authorized representative of
_______________ (the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable Transferable
Letter of Credit No. _______ dated _______ ___ , ____ (the "Letter of Credit"),
issued by _____________ in favor of the Beneficiary; (ii) those certain Bonds
(as defined in the Letter of Credit); and (iii) that certain Bond Security
Agreement (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Bond
Security Agreement.
2. The Beneficiary is entitled to make this drawing in the
amount of $___________ under the Letter of Credit pursuant to the Bond
Security Agreement with respect to the payment of interest due on all
Bonds Outstanding on the Interest Payment Date (as defined in the
Letter of Credit) occurring on [insert applicable date], other than
Credit Provider Bonds (as defined in the Letter of Credit).
3. The amount of the drawing is equal to the amount required
to be drawn by the Trustee pursuant to Section _____ of the Bond
Security Agreement.
4. The amount of the drawing made by this Certificate was
computed in compliance with the terms of the Bond Security Agreement
and, when added to the amount of any other drawing under the Letter of
Credit made simultaneously herewith, does not exceed the Available
Amount of the Letter of Credit.
Page 10 of 27 Pages
11
5. The proceeds of this drawing will not be used with respect
to Bonds bearing interest at a fixed rate per annum or Bonds that are
secured by a substitute or alternate letter of credit or other
alternate credit enhancement in accordance with the terms of the Bond
Security Agreement.
6. Payment by the Credit Provider pursuant to this drawing
shall be made to _______________, ABA Number _______________, Account
Number _______________, Attention: _______________, Re:_______________.
IN WITNESS WHEREOF, this Certificate has been executed this
____ day of __________ , 19___.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
Page 11 of 27 Pages
12
By Telecopy or Tested Telex
EXHIBIT D
to
___________________
LETTER OF CREDIT
No. _______
REDEMPTION DRAWING AND REDUCTION CERTIFICATE
____________
____________
_______ , ________
Attention:
____________
____________
____________
The undersigned individual, a duly authorized representative
of _______________ (the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable Transferable
Letter of Credit No. _______ dated _______ _______ , ____ (the "Letter of
Credit"), issued by _______ (the "Credit Provider") in favor of the Beneficiary;
(ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that
certain Bond Security Agreement and Series Bond Security Agreement (each as
defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Bond
Security Agreement.
2. The Beneficiary is entitled to make this drawing in the
amount of $___________ under the Letter of Credit pursuant to [Section
[___] [___] of the Bond Security Agreement] [Section [______] [______]
[______] [______] of the Series Bond Security Agreement].*
3. (a) The amount of this drawing is equal to (i) the
principal amount of Bonds to be redeemed by the Issuer pursuant to
[Section [___] [___] of the Bond Security Agreement] [Section [______]
[______] [______] [______] of the Series Bond Security Agreement]* on
[insert applicable date] (the "Redemption Date") other than Credit
Provider Bonds (as defined in the Letter of Credit), plus (ii) interest
on such Bonds accrued from the immediately preceding Interest Payment
--------
* Insert appropriate section and document reference.
Page 12 of 27 Pages
13
Date (as defined in the Letter of Credit) to the Redemption Date,
provided that in the event the Redemption Date coincides with an
Interest Payment Date this drawing does not include any accrued
interest on such Bonds.
(b) Of the amount stated in paragraph 2 above:
(i) $_______ is demanded in respect of the principal amount
of the Bonds referred to in subparagraph (a) above; and
(ii) $_________ is demanded in respect of accrued interest on
such Bonds.
4. Payment by the Credit Provider pursuant to this drawing
shall be made to _______________, ABA Number _______________, Account
Number _______________, Attention: _______________, Re:_______________.
5. The amount of the drawing made by this Certificate was
computed in compliance with the terms and conditions of the Bond
Security Agreement and, when added to the amount of any other drawing
under the Letter of Credit made simultaneously herewith, does not
exceed the Available Amount of the Letter of Credit.
6. Upon payment of the amount drawn hereunder, the Credit
Provider is hereby directed to permanently reduce the Available Amount
(as defined in the Letter of Credit) of the Letter of Credit by
$[insert amount of reduction] and the Available Amount shall thereupon
equal $[insert new Available Amount].
7. Of the amount of the reduction stated in paragraph 6
above:
(i) $___________ is attributable to the principal
amount of Bonds redeemed; and
(ii) $______________ is attributable to interest on
such Bonds (i.e., ___ days interest thereon at the Maximum
Rate, as defined in the Letter of Credit).
8. The amount of the reduction in the Available Amount of the
Letter of Credit has been computed in accordance with the provisions of
the Letter of Credit.
9. Following the reduction, the Available Amount of the
Letter of Credit shall be at least equal to the aggregate
principal amount of the Bonds Outstanding (to the extent such
Page 13 of 27 Pages
14
Bonds are not Credit Provider Bonds) plus ___ days' interest thereon at
the Maximum Rate.
*10. In the case of a redemption pursuant to Section ______ of
the Series Bond Security Agreement, the Trustee, prior to giving notice
of redemption to the owners of the Bonds, received written evidence
from the Credit Provider that the Credit Provider has consented to such
redemption.
11. The proceeds of this drawing will not be used with respect
to Bonds bearing interest at a fixed rate per annum or Bonds that are
secured by a substitute or alternate letter of credit or other
alternate credit enhancement in accordance with the terms of the Bond
Security Agreement.
IN WITNESS WHEREOF, this Certificate has been executed this
____ day of __________ , 19___.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
--------
* To be included in certificate only if Section _______ is
referenced in paragraph numbered 2 or 3 above.
Page 14 of 27 Pages
15
By Telecopy or Tested Telex
EXHIBIT E
to
________________
LETTER OF CREDIT
No.________
LIQUIDITY DRAWING CERTIFICATE
AIG Liquidity Corp.
__________________
________ , ________
Attention:
____________
____________
____________
The undersigned individual, a duly authorized representative of
_________ (the "Beneficiary"), hereby CERTIFIES as follows with respect to (i)
that certain Irrevocable Transferable Letter of Credit No. _______ dated
_______, _________, ____ (the "Letter of Credit") issued by _______ in favor of
the Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit);
and (iii) that certain Bond Security Agreement and Series Bond Security
Agreement (each as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Bond Security
Agreement.
2. The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount of $________ with respect to the payment
of the purchase price of Bonds tendered for purchase in accordance with
Section _____ or Section _____ of the Series Bond Security Agreement
and to be purchased on [insert applicable date] (the "Purchase Date")
which Bonds have not been remarketed as provided in the Series Bond
Security Agreement or the purchase price of which has not been received
by the Tender Agent (as defined in the Letter of Credit) by 11:00 A.M.,
New York City time, on said Purchase Date.
3. (a) The amount of the drawing is equal to (i) the principal
amount of Bonds to be purchased pursuant to the Series Bond Security
Agreement on the Purchase Date other than Credit Provider Bonds (as
defined in the Letter of Credit), plus (ii) interest on such Bonds
accrued from the immediately preceding Interest Payment Date (as
defined in the Letter of
Page 15 of 27 Pages
16
Credit) (or if none, the date of issuance of the Bonds) to the Purchase
Date, provided that in the event the Purchase Date coincides with an
Interest Payment Date this drawing does not include any accrued
interest on such Bonds.
(b) Of the amount stated in paragraph (2) above:
(i) $_______ is demanded in respect of the
principal portion of the purchase price of the Bonds
referred to in subparagraph (2) above; and
(ii) $_________ is demanded in respect of payment of
the interest portion of the purchase price of such Bonds.
4. The amount of the drawing made by this Certificate was
computed in compliance with the terms and conditions of the Series Bond
Security Agreement and, when added to the amount of any other drawing
under the Letter of Credit made simultaneously herewith, does not
exceed the Available Amount of the Letter of Credit.
5. The Beneficiary will register or cause to be registered in
the name of the Issuer, upon payment of the amount drawn hereunder,
Bonds in the principal amount of the Bonds being purchased with the
amounts drawn hereunder and will deliver such Bonds to the Trustee in
accordance with the Series Bond Security Agreement and the Pledge
Agreement (as defined in the Reimbursement Agreement), unless DTC (as
defined in the Reimbursement Agreement) is the registered owner of all
Bonds, in which case the Beneficiary will cause both the Issuer's
beneficial ownership interest of, and the Credit Provider's security
interest in, the Bonds to be recorded by DTC on its books.
6. Payment by the Credit Provider pursuant to this drawing
shall be made to _______________, ABA Number _______________, Account
Number _______________, Attention: _______________, Re:
_______________.
7. The proceeds of this drawing will not be used with respect
to Bonds bearing interest at a fixed rate per annum or Bonds that are
secured by a substitute or alternate letter of credit or other
alternate credit enhancement in accordance with the terms of the Bond
Security Agreement.
Page 16 of 27 Pages
17
IN WITNESS WHEREOF, this Certificate has been executed this
____ day of __________, 19___.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
Page 17 of 27 Pages
18
By Telecopy or Tested Telex
EXHIBIT F
to
_______________
LETTER OF CREDIT
No. ______
ACCELERATION DRAWING CERTIFICATE
AIG Liquidity Corp.
__________________
_______ , ________
Attention:
____________
____________
____________
The undersigned individual, a duly authorized representative
of _______________ (the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable Transferable
Letter of Credit No. _____ dated _______ __, ____ (the "Letter of Credit"),
issued by ________________ in favor of the Beneficiary; (ii) those certain Bonds
(as defined in the Letter of Credit); and (iii) that certain Bond Security
Agreement (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Bond
Security Agreement.
2. An Event of Default has occurred under subsection [insert
subsection] of Section _______ of the Bond Security Agreement and the
Trustee has declared the principal of and accrued interest on all Bonds
then outstanding immediately due and payable. The Beneficiary is
entitled to make this drawing in the amount of $_____________ under the
Letter of Credit pursuant to Section ___ of the Bond Security Agreement
in order to pay the principal of and interest accrued on the Bonds due
to an acceleration thereof in accordance with Section ___ of the Bond
Security Agreement.
3. (a) The amount of this drawing is equal to (i) the
principal amount of Bonds outstanding on [insert applicable date] (the
"Acceleration Date") other than Credit Provider Bonds (as defined in
the Letter of Credit), plus (ii) interest on such Bonds accrued from
the immediately preceding Interest Payment Date (as defined in the
Letter of Credit) to the Acceleration Date.
Page 18 of 27 Pages
19
(b) Of the amount stated in paragraph 2 above:
(i) $__________ is demanded in respect of the
principal portion of the Bonds referred to in
subparagraph (a) above; and
(ii) $___________ is demanded in respect of accrued
interest on such Bonds.
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Bond
Security Agreement and, when added to the amount of any drawing under
the Letter of Credit made simultaneously herewith, does not exceed the
Available Amount of the Letter of Credit.
5. Payment by the Credit Provider pursuant to this
drawing shall be made to _______________, ABA Number
_______________, Account Number _______________, Attention:
_______________: _______________, Re: _______________.
6. The proceeds of this drawing will not be used with respect
to Bonds bearing interest at a fixed rate per annum or Bonds that are
secured by a substitute or alternate letter of credit or other
alternate credit enhancement in accordance with the terms of the Bond
Security Agreement.
IN WITNESS WHEREOF, this Certificate has been executed this
____ day of _________, 19___.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
Page 19 of 27 Pages
20
By Telecopy or Tested Telex
EXHIBIT G
to
________________
LETTER OF CREDIT
No.______
STATED MATURITY DRAWING CERTIFICATE
AIG Liquidity Corp.
______________
_______ , ________
Attention:
____________
____________
____________
The undersigned individual, a duly authorized representative
of _______________ (the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable Transferable
Letter of Credit No. _______ dated _______ __, _______ (the "Letter of Credit"),
issued by _______ in favor of the Beneficiary; (ii) those certain Bonds (as
defined in the Letter of Credit); and (iii) that certain Bond Security Agreement
and Series Bond Security Agreement (each as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Bond
Security Agreement.
2. The Beneficiary is entitled to make this drawing in the
amount of $_______ under the Letter of Credit pursuant to Section
_______ of the Bond Security Agreement.
3. The amount of this drawing is equal to the principal amount
of Bonds outstanding on _________ __, ____ the maturity date thereof as
specified in Section 203 of the Series Bond Security Agreement, other
than Credit Provider Bonds (as defined in the Letter of Credit).
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Bond
Security Agreement and, when added to the amount of any other drawing
under the Letter of Credit made simultaneously herewith, does not
exceed the Available Amount of the Letter of Credit.
Page 20 of 27 Pages
21
5. The proceeds of this drawing will not be used with respect
to Bonds that are secured by a substitute or alternate letter of credit
or other alternate credit enhancement in accordance with the terms of
the Bond Security Agreement.
6. Payment by the Credit Provider pursuant to this
drawing shall be made to _______________, ABA Number
_______________, Account Number _______________, Attention:
_______________: _______________, Re: _______________.
IN WITNESS WHEREOF, this Certificate has been executed this
____ day of ________ ______.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
Page 21 of 27 Pages
22
EXHIBIT H
to
________________
LETTER OF CREDIT
No._____
REDUCTION CERTIFICATE
AIG Liquidity Corp.
______________
_______ , ________
Attention:
____________
____________
____________
The undersigned hereby CERTIFIES with respect to (i) that
certain Irrevocable Transferable Letter of Credit No. _______ dated _______
_______, ____ (the "Letter of Credit"), issued by _______ (the "Credit
Provider") in favor of the Beneficiary; (ii) those certain Bonds (as defined in
the Letter of Credit); and (iii) that certain Bond Security Agreement (as
defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Bond
Security Agreement.
2. Upon receipt by the Credit Provider of this Certificate,
the Available Amount (as defined in the Letter of Credit) shall be
reduced by $________ and the Available Amount shall thereupon equal
$________. $___________ of said amount is attributable to interest.
3. The amount of the reduction in the Available Amount of the
Letter of Credit has been computed in accordance with the provisions of
the Letter of Credit.
4. Following the reduction, the Available Amount of the Letter
of Credit shall be at least equal to the aggregate principal amount of
the Bonds outstanding (to the extent such Bonds are not Credit Provider
Bonds, as defined in the Letter of Credit) plus ___ days' interest
thereon at the Maximum Rate (as defined in the Letter of Credit).
Page 22 of 27 Pages
23
IN WITNESS WHEREOF, this Certificate has been executed this
____ day of _________, 19___.
_____________________________
as Trustee
By___________________________
[Title of Authorized
Representative]
Page 23 of 27 Pages
24
EXHIBIT I
to
________________
LETTER OF CREDIT
No._______
NOTICE OF AMENDMENT
[TRUSTEE]
_______________
_______________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable
Transferable Letter of Credit No. ______ dated _________ __, ____ (the "Letter
of Credit"), established by us in your favor as Beneficiary. We hereby notify
you that, in accordance with the terms of the Letter of Credit and that certain
Reimbursement Agreement dated as of _________ __, ____ among [Name of Issuer]
and us, the Available Amount of the Letter of Credit has been reduced to
$____________.
This letter should be attached to the Letter of Credit and
made a part thereof.
AIG LIQUIDITY CORP.
By ___________________
Authorized Officer
Page 24 of 27 Pages
25
EXHIBIT J
to
________________
LETTER OF CREDIT
No.________
TRANSFER CERTIFICATE
AIG Liquidity Corp.
______________
_______ , ________
Attention:
____________
____________
____________
Ladies and Gentlemen:
Reference is made to that certain Irrevocable Transferable
Letter of Credit No. _______ dated _______ _______ , ____ (the "Letter of
Credit") which has been established by you in favor of _______________.
The undersigned, a duly authorized officer or agent of [Name
of Transferor], has transferred and assigned (and hereby confirms to you said
transfer and assignment) all of its rights in and under said Letter of Credit to
[Name of Transferee] and confirms that [Name of Transferor] no longer has any
rights under or interest in said Letter of Credit.
Transferor and Transferee have indicated on the face of said
Letter of Credit that it has been transferred and assigned to Transferee.
Page 25 of 27 Pages
26
The undersigned, a duly authorized officer or agent of the
Transferee, hereby certifies that the Transferee is a duly authorized Transferee
under the terms of said Letter of Credit and is accordingly entitled, upon
presentation of the documents called for therein, to receive payment thereunder.
_____________________________
Name of Transferor
By___________________________
[Name and Title of Authorized
Officer of Transferor]
_____________________________
Name of Transferee
By___________________________
[Name and Title of Authorized
Officer of Transferee]
Page 26 of 27 Pages
27
EXHIBIT K
to
________________
LETTER OF CREDIT
No._________
NOTICE OF EXTENSION
[TRUSTEE]
___________
___________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable
Transferable Letter of Credit No. _______ dated _______ __, ____ (the "Letter of
Credit"), established by us in your favor as Beneficiary. We hereby notify you
that, in accordance with the terms of the Letter of Credit and that certain
Reimbursement Agreement dated as of _______ _______ , ____ among [Name of
Issuer] and us, the Stated Expiration Date of the Letter of Credit has been
extended to _______________, _______________.
This letter should be attached to the Letter of Credit and
made a part thereof.
AIG LIQUIDITY CORP.
By_________________
Authorized Officer
Page 27 of 27 Pages
1
EXHIBIT 4.3
FORM OF SPECIFIC
GUARANTEE OF AMERICAN
INTERNATIONAL GROUP, INC.
Guarantee, dated as of , by American International Group, Inc., a
Delaware corporation (the "Guarantor"), in favor of , a (the
"Guaranteed Party").
(1) GUARANTEE. To induce the Guaranteed Party to enter into a [Standby
Bond Purchase Agreement] [Letter of Credit], dated the date hereof (the
"Agreement"), with AIG Liquidity Corp., a Delaware corporation (the "Company"),
the Guarantor absolutely, unconditionally and irrevocably guarantees to the
Guaranteed Party and its successors, endorsees and assigns the prompt payment
when due, subject to any applicable grace period, of all present and future
obligations of the Company to the Guaranteed Party under the Agreement (the
"Obligations").
(2) NATURE OF GUARANTEE. The Guarantor's obligations hereunder shall not
be affected by the existence, validity, enforceability, perfection or extent of
any collateral therefor or by any other circumstance relating to the Obligations
that might otherwise constitute a legal or equitable discharge of or defense to
the Guarantor not available to the Company. The Guarantor agrees that the
Guaranteed Party may resort to the Guarantor for payment of any of the
Obligations whether or not the Guaranteed Party shall have resorted to any
collateral therefor or shall have proceeded against the Company or any other
obligor principally or secondarily obligated with respect to any of the
Obligations. The Guaranteed Party shall not be obligated to file any claim
relating to the Obligations in the event that the Company becomes subject to a
bankruptcy, reorganization or similar proceeding, and the failure of the
Guaranteed Party to so file shall not affect the Guarantor's obligations
hereunder. This Guarantee shall remain in full force and effect and shall be
binding on the Guarantor, its successors and assigns until all of the
Obligations have been satisfied in full. In the event that any payment to the
Guaranteed Party in respect of any Obligations is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor shall remain liable hereunder
with respect to such Obligations as if such payment had not been made. The
Guarantor reserves the right to assert defenses which the Company may have to
payment of any Obligations other than defenses arising from the bankruptcy or
insolvency of the Company and other defenses expressly waived hereby.
(3) CHANGES IN OBLIGATIONS, COLLATERAL THEREFOR AND AGREEMENTS RELATING
THERETO; WAIVER OF CERTAIN NOTICES. The Guarantor agrees that the Guaranteed
Party may at any time and from time to time, either before or after the maturity
thereof, without notice to or further consent of the Guarantor, extend the time
of payment of, exchange or surrender any collateral for, or renew any of the
Obligations, and may also make any agreement with the Company or with any other
party to or person liable on any of the Obligations or interested therein, for
the extension, renewal, payment, compromise, discharge or release thereof, in
whole or in part, or for any modification of the terms thereof or of any
agreement between the Guaranteed Party and the Company or any such other party
or person, without in any way impairing or affecting this Guarantee. The
Guarantor waives notice of the acceptance of this Guarantee and of the
Obligations, presentment, demand for payment, notice of dishonor and protest.
(4) EXPENSES. The Guarantor agrees to pay on demand all fees and out of
pocket expenses (including the reasonable fees and expenses of the Guaranteed
Party's counsel) in any way relating to the enforcement or protection of the
rights of the Guaranteed Party hereunder; provided, that the Guarantor shall not
be liable for any expenses of the Guaranteed Party if no payment under this
Guarantee is due.
(5) SUBROGATION. Upon payment of all of the Obligations owing to any
Guaranteed Party, the Guarantor shall be subrogated to the rights of the
Guaranteed Party against the Company with respect to such Obligations, and the
Guaranteed Party agrees to take at the Guarantor's expense such steps as the
Guarantor may reasonably request to implement such subrogation.
(6) NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed
Party to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Guaranteed Party of any right, remedy or power hereunder
preclude any other or
1
2
future exercise of any right, remedy or power. Each and every right, remedy and
power hereby granted to the Guaranteed Party or allowed it by law or other
agreement shall be cumulative and not exclusive of any other, and may be
exercised by the Guaranteed Party at any time or from time to time.
(7) REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that:
(a) the Guarantor is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate
power to execute, deliver and perform this Guarantee;
(b) the execution, delivery and performance of this Guarantee have
been and remain duly authorized by all necessary corporate action and do
not contravene any provision of the Guarantor's certificate of
incorporation or by-laws, as amended to date, or any law, regulation, rule,
decree, order, judgment or contractual restriction binding on the Guarantor
or its assets;
(c) all consents, licenses, clearances, authorizations and approvals
of, and registrations and declarations with, any governmental authority or
regulatory body necessary for the due execution, delivery and performance
of this Guarantee have been obtained and remain in full force and effect
and all conditions thereof have been duly complied with, and no other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required in connection with the execution, delivery or
performance of this Guarantee; and
(d) this Guarantee constitutes a legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(8) ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign
its rights, interests or obligations hereunder to any other person (except by
operation of law) without the prior written consent of the Guarantor or the
Guaranteed Party, as the case may be, provided, however, that the Guaranteed
Party may assign its rights, interests and obligations hereunder to an assignee
or transferee to which it has transferred its interests and obligations under
the Agreement pursuant to Section thereof.
(9) NOTICES. All notices or demands on the Guarantor shall be deemed
effective when received, shall be in writing and shall be delivered by hand or
by registered mail, or by facsimile transmission promptly confirmed by
registered mail, addressed to the Guarantor at:
American International Group, Inc.
70 Pine Street
New York, NY 10270
Attention: Secretary
Fax: (212) 514-6894
or to such other address or fax number as the Guarantor shall have notified the
Guaranteed Party in a written notice delivered to the Guaranteed Party in
accordance with the Agreement.
(10) GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, this Guarantee has been duly executed and delivered by
the Guarantor to the Guaranteed Party as of the date first above written.
AMERICAN INTERNATIONAL GROUP, INC.
By
----------------------------------
By
----------------------------------
2
1
EXHIBIT 4.4
AMERICAN INTERNATIONAL GROUP, INC.
GENERAL GUARANTY
AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation (the
"Guarantor") for value received and hereby acknowledged, hereby unconditionally
and irrevocably guarantees to each party (a "Party") entering into a standby
bond purchase agreement or letter of credit, line of credit or similar credit
facility (each, a "Facility") with AIG Liquidity Corp., a Delaware corporation
("AIG-LC"), the obligations of AIG-LC under which have been registered under the
Securities Act of 1933 pursuant to the Registration Statement on Form S-3,
Registration No. 33-48996, and to such Party's successors, endorsees and
assigns, the prompt payment when due of all present and future obligations and
liabilities of all kinds of AIG-LC to such Party arising out of the Facilities
(the "Obligations").
The Guarantor hereby waives any requirements that a Party, in the event of
a default in any payment by AIG-LC under a Facility, first make demand upon or
seek to enforce remedies against AIG-LC or first realize upon the collateral, if
any, available to such Party before demanding payment under or seeking to
enforce this Guarantee. In the event that any payment to a Party in respect to
any Obligations is rescinded or must otherwise be returned for any reason
whatsoever, the Guarantor shall remain liable hereunder with respect to such
Obligations as if such payment has not been made. The Guarantor reserves the
right to assert defenses which AIG-LC may have to payment of any obligations
other than defenses arising from the bankruptcy or insolvency of AIG-LC and
other defenses expressly waived hereby.
The Guarantor agrees and consents that without the necessity for any
additional endorsement or guaranty of the Obligations hereby guaranteed, or any
reservation of rights against the Guarantor, and without further notice to, or
assent by the Guarantor, the Obligations hereby guaranteed may, from time to
time, in whole or in part be renewed, extended, modified, accelerated,
compromised, or released by the Party with the agreement of AIG-LC, and any
changes may be made by such Party with the agreement of AIG-LC in the maturity
dates, interest rates or other terms of the Obligations guaranteed hereunder
without impairing, abridging, affecting, diminishing or releasing the liability
of the Guarantor hereunder, which liability shall also extend to such
Obligations as renewed, extended, modified, accelerated, compromised or
otherwise changed. The Guarantor waives any and all notices of acceptance of
this Guarantee or of the creation, renewal, extension, modification,
acceleration, compromising or releasing of any of the Obligations hereby
guaranteed.
Upon payment of all of the Obligations owing to any Party, the Guarantor
shall be subrogated to the rights of such Party against AIG-LC with respect to
such Obligations, and such Party agrees to take at the Guarantor's expense such
steps as the Guarantor may reasonably request to implement such subrogation.
All dealings between AIG-LC and a Party or between AIG-LC and any
authorized brokers, dealers, placement agents or remarketing agents of
securities which are the subject of a Facility, their successors, and assigns,
shall be conclusively presumed to have been had or consummated in reliance upon
this Guarantee. The Guarantor waives presentment, demand for payment, notice of
dishonor or non-payment to or on the Guarantor or AIG-LC, protest and all other
notices and demands whatsoever. Nothing but prompt payment in full of the
Obligations hereby guaranteed shall discharge the Guarantor of its obligations
hereunder.
This Guarantee may not be amended orally and all rights and obligations of
the parties hereunder shall be construed and interpreted in accordance with the
laws of the State of New York. The Guarantor warrants and represents that there
are no mortgages, deeds of trust, indentures, note or loan agreements, or any
other agreements of undertaking to which it is a party or by which any of its
property is bound which limit or in any way restrict its capacity, right or
power to execute and deliver this Guarantee and to discharge by prompt payment
in full its obligations hereunder.
1
2
IN WITNESS WHEREOF, AMERICAN INTERNATIONAL GROUP, INC. has authorized and
caused this Guarantee to be duly executed and delivered by its authorized
officers as of the day of , 19 .
AMERICAN INTERNATIONAL GROUP, INC.
By:
--------------------------------------
Edward E. Matthews
Vice Chairman
By:
--------------------------------------
Kathleen E. Shannon
Vice President and Secretary
2
1
EXHIBIT 5.1
July 31, 1995
AIG Liquidity Corp.
100 Nyala Farm,
Westport, Connecticut 06880
Dear Sirs:
In connection with the registration under the Securities Act
of 1933 (the "Act") of $93,750,000 of (i) liquidity facility obligations (the
"Liquidity Facility Obligations") to be issued by AIG Liquidity Corp. (the
"Company") under Standby Bond Purchase Agreements (each, a "Standby Bond
Purchase Agreement"), and/or credit facility obligations (the "Credit Facility
Obligations") to be issued by the Company under Letters of Credit (each, a
"Letter of Credit"), and (ii) guarantee obligations (the "Guarantee
Obligations") to be issued by American International Group, Inc. (the
"Guarantor") under a General Guarantee relating to all Standby
2
Purchase Agreements and Letters of Credit and a Specific Guarantee relating to
the relevant Standby Purchase Agreement or Letter of Credit (the General
Guarantee and each such Specific Guarantee being herein referred to as a
"Guarantee"), we, as counsel to the Company, have examined such corporate
records, certificates and other documents, and such questions of law, as we
have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion, when (a) the Registration Statement has become effective under the
Act, (b) the terms of a Standby Bond Purchase Agreement or a Letter of Credit,
as the case may be, and related Guarantee (and the terms of issuance of the
corresponding Liquidity Facility Obligations or Credit Facility Obligations, as
the case may be, and Guarantee Obligations) have been duly established in
conformity with the Registration Statement so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon the Company or the Guarantor and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company or the Guarantor, (c) such Standby Bond Purchase
Agreement or Letter of Credit, as the case may be, and Guarantee have been duly
authorized, executed and delivered and (d) such Liquidity Facility Obligations
or Credit Facility Obligations, as the case may be, and Guarantee Obligations
have been duly issued in accordance with the Registration Statement, such
Liquidity Facility Obligations or Credit Facility Obligations, as the case may
be, will constitute valid and legally binding obligations of the Company,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the State of New York and the General Corporation
Law of the State of Delaware, and we are expressing no opinion as to the effect
of the laws of any other jurisdiction.
We have relied as to certain matters on information obtained
from public officials, officers of the Company and other sources believed by us
to be responsible.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to us under the heading
"Validity of Obligations" in the Prospectus. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act.
Very truly yours,
1
July 31, 1995
AIG Liquidity Corp.,
100 Nyala Farm,
Westport, Connecticut 06880.
Dear Sirs:
In connection with the registration under the Securities Act of 1933 (the
"Act") of $93,750,000 of (i) liquidity facility obligations (the "Liquidity
Facility Obligations") to be issued by AIG Liquidity Corp. (the "Company") under
Standby Bond Purchase Agreements (each, a "Standby Bond Purchase Agreement") and
(ii) credit facility obligations (the "Credit Facility Obligations") and with
the Liquidity Facility Obligations, the "Facility Obligations") to be issued by
the Company under Letters of Credit (each, a "Letter of Credit") and guarantee
obligations (the "Guarantee Obligations") to be issued by American International
Group, Inc. (the "Guarantor") under a General Guarantee relating to all Standby
Bond Purchase Agreements and Letters of Credit and a Specific Guarantee relating
to the relevant Standby Bond Purchase Agreement or Letter of Credit (the General
Guarantee and each such Specific Guarantee being herein referred to as a
"Guarantee"), I, as Vice President and Senior Counsel to the Guarantor, have
examined such corporate records, certificates and other documents, and such
questions of law, as I have considered necessary or appropriate for the purposes
of this opinion.
Upon the basis of such examination, I advise you that, in my opinion, when
(a) the Registration Statement has become effective under the Act, (b) the terms
of a Standby Bond Purchase Agreement or Letter of Credit and related Guarantee
(and the terms of issuance of the corresponding Liquidity Facility Obligations
and Guarantee Obligations) have been duly established in conformity with the
Registration Statement so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company
or the Guarantor and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Company or the
Guarantor, (c) such Standby Bond Purchase Agreement or Letter of Credit and
Guarantee have been duly authorized, executed and delivered and (d) such
Facility Obligations and Guarantee Obligations have been duly issued in
accordance with the Registration Statement, such Guarantee Obligations will
constitute valid and legally binding obligations of the Guarantor, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
The foregoing opinion is limited to the Federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware, and I am expressing no opinion as to the effect of the laws of any
other jurisdiction.
I have relied as to certain matters on information obtained from public
officials, officers of the Guarantor and other sources believed by me to be
responsible.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Validity of
Obligations" in the Prospectus. In giving such consent, I do not thereby admit
that I am in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
Kathleen E. Shannon, Esq.
1
EXHIBIT 10.1
, 19
AIG Liquidity Corp.
100 Nyala Farm
Westport, Connecticut 06880
Dear Sirs:
We refer to the [Standby Bond Purchase Agreement] [Letter of Credit], dated
, 19 (the "Agreement"), between you and
(the "Issuer") relating to $ aggregate
principal amount of the Issuer's securities (the "Bonds"). In connection with
your obligations under the Agreement to pay principal of or interest on Bonds or
to purchase tendered Bonds, American International Group, Inc. ("AIG") hereby
agrees to provide or cause to be provided, by means of capital contributions,
purchases of assets, loans or otherwise, funds to the extent necessary to enable
you to meet your obligations under the Agreement (other than obligations to us
or obligations satisfied by payments by us pursuant to our guarantee of your
obligations under the Agreement).
This letter is solely for the benefit of and enforceable by you and AIG.
AMERICAN INTERNATIONAL GROUP, INC.
By:
By:
1
EXHIBIT 10.2
REIMBURSEMENT AGREEMENT
AMONG
[NAME OF ISSUER]
AND
AIG LIQUIDITY CORP.
DATED AS OF , 19
2
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS
Title Page No.
----- --------
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Incorporation of Certain Definitions By Reference . . . . . . . . . . . . . . . . . . . 5
ARTICLE II.
LETTER OF CREDIT
SECTION 2.1. Issuance of Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3. Reimbursement of Liquidity Drawings; Interest . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4. Reimbursement of Other Drawings; Interest . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.5. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.6. Method of Payment; Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.7. Reduction and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.8. Reduction and Reinstatement of the Amount of the Letter of Credit . . . . . . . . . . . 8
SECTION 2.9. Substitute Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.10. Disbursement of Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.11. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.12. Payment Due on Non-Business Day to be Made on Next Business Day . . . . . . . . . . . . 9
SECTION 2.13. Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.14. Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.15. Extension of Stated Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.16. Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.17. Credit Provider Rate Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE III.
CONDITIONS PRECEDENT
SECTION 3.1. Conditions Precedent to Issuance of Letter of Credit . . . . . . . . . . . . . . . . . 12
-i-
3
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Title Page No.
----- --------
SECTION 4.1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V.
COVENANTS
SECTION 5.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI.
DEFAULTS
SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. Waiver; Parties in Interest; Caption Headings . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.3. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7.5. Liability of the Credit Provider . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7.6. Fees; Expenses; Documentary Taxes; Indemnification . . . . . . . . . . . . . . . . . . 24
SECTION 7.7. Term of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.8. Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . 25
SECTION 7.9. Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.10. Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.12. Consent to Jurisdiction; Waiver of Defense of Sovereign Immunity . . . . . . . . . . . 27
SECTION 7.13. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-ii-
4
REIMBURSEMENT AGREEMENT (this "Agreement") dated as of _______,
1994 between ____________, a [state] [authority] [political subdivision]
[municipal corporation] organized and existing under the laws of the State
of _____________ (the "Issuer"), and AIG Liquidity Corp., a Delaware
corporation (the "Credit Provider").
WHEREAS, the Issuer intends to issue $_____________ aggregate
principal amount of its_______Bonds, Series _______ (the "Bonds") pursuant to
the Issuer's [ordinance, resolution, order, trust indenture or similar
instrument of the Issuer pursuant to which the Bonds are issued and secured],
as amended and supplemented (the "Bond Security Agreement"), including
the_______[supplement to the Bond Security Agreement specifying terms of
Bonds] (the "Series Bond Security Agreement"); and
WHEREAS, pursuant to the terms of the Bond Security Agreement
and the Bonds, the holders of the Bonds will have the right and under certain
circumstances are required to tender their Bonds for purchase at a purchase
price equal to the principal amount of the tendered Bonds plus interest accrued
thereon to the purchase date; and
WHEREAS, the Issuer has requested the Credit Provider to issue
a letter of credit to provide funds for the payment of the principal of and
interest on the Bonds when due and, in the event that any tendered Bonds cannot
be remarketed as provided in the Bond Security Agreement, for the payment of the
purchase price of such tendered Bonds.
NOW, THEREFORE, in consideration of the respective agreements
contained herein, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. The following terms, as used in this
Agreement, have the following meanings:
"ACCELERATION DRAWING" means a drawing under the Letter of
Credit resulting from the presentation of a certificate in the form of Exhibit F
to the Letter of Credit.
"ACT" means the enabling legislation of the Issuer and other
law pursuant to which the Bonds are issued and secured.
5
"AVAILABLE AMOUNT" has the meaning set forth in the Letter of
Credit.
"BOND DOCUMENTS" means the Bond Security Agreement, this
Agreement, the Letter of Credit, the Remarketing Agreement and [if applicable]
the Tender Agency Agreement.
"BUSINESS DAY" has the meaning set forth in the Letter of
Credit.
"CHANGE OF LAW" has the meaning set forth in Section 2.16.
"CLOSING DATE" means the date on which the Letter of Credit is
issued.
"CONVERSION DATE" has the same meaning herein as in the Series
Resolution.
"CREDIT PROVIDER BONDS" means any Bond (i) owned or held by the
Credit Provider or by the Trustee or an agent of the Trustee for the account of
the Credit Provider or (ii) with respect to which the Credit Provider has
notified the Trustee, or which the Trustee actually knows, were purchased by
another Person for the account of the Credit Provider or by a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Credit Provider.
"CREDIT PROVIDER RATE" means, on any date of determination, a
rate per annum equal to [to be determined]; provided, however, that such Credit
Provider Rate shall be subject to adjustment as set forth in Section 2.17; and
provided further that in no event shall the Credit Provider Rate exceed the
Maximum Lawful Rate.
"DEFAULT" means any event which with notice or lapse of time,
or both, would become an Event of Default.
"DESIGNATED OFFICE" means [specify the office of the Credit
Provider to which payments are to be made].
"DRAWING" means an Interest Drawing, a Liquidity Drawing, a
Redemption Drawing, an Acceleration Drawing or a Stated Maturity Drawing.
"DTC" means The Depository Trust Company, New York, New York,
or its nominee, or its successors and assigns, or any other depository
performing similar functions under the Bond Security Agreement.
2
6
"EVENT OF DEFAULT" means any one of the events described in
Section 6.1 hereof.
"GAAP" means generally accepted accounting principles in the
United States of America, as in effect from time to time.
"GUARANTEE" means the guarantee of the Guarantor in the form of
Appendix II hereto.
"GUARANTOR" means American International Group, Inc.
"INTEREST DRAWING" means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of Exhibit C to the
Letter of Credit.
"INTEREST PAYMENT DATE" has the same meaning herein as in the
Bond Security Agreement.
"LETTER OF CREDIT" has the meaning set forth in Section 2.1.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, deposit arrangement, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).
"LIQUIDITY ADVANCE" has the meaning set forth in Section 2.3(a)
hereof.
"LIQUIDITY DRAWING" means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of Exhibit E to the
Letter of Credit.
"MAXIMUM LAWFUL RATE" means the maximum interest rate permitted
by law.
"MAXIMUM RATE" means the maximum rate of interest permitted to
be borne by Bonds under the Bond Security Agreement.
"MERGER WITHOUT ASSUMPTION" means that the Issuer consolidates
or amalgamates with, or merges with or into, or transfers all or substantially
all its assets to, or reorganizes, incorporates, reincorporates, or
reconstitutes into or as, another entity, and in any such case, at the time of
such consolidation, amalgamation, merger, transfer, reorganization,
incorporation, reincorporation, reconstitution, or succession the resulting,
surviving or transferee entity fails to assume all the obligations of the Issuer
under this Agreement by operation of law or pursuant
3
7
to an agreement reasonably satisfactory to the other party to this Agreement.
"OFFICIAL STATEMENT" means the Preliminary Official Statement
and the final Official Statement relating to the sale of the Bonds (including
the cover page and all summary statements, appendices and other materials
included or incorporated by reference or attached thereto), as amended or
supplemented or any other preliminary or final official statement of the Issuer
or prospectus used with respect to the remarketing of the Bonds.
"PARTICIPANT" means any Person which purchases from the Credit
Provider, from time to time, a participation in the Credit Provider's rights and
obligations under the Letter of Credit and this Agreement.
"PERSON" means any individual or entity, together with its
permitted successors and assigns, in the case of a governmental Person,
succeeding to its functions and capacities.
"PLEDGED REVENUES" means the revenues of the Issuer on which
the Issuer has given a Lien pursuant to the Bond Security Agreement.
"PURCHASE ACCOUNT" means the Purchase Account maintained by the
Tender Agent in the Purchase and Remarketing Fund for use in connection with the
purchase of Bonds pursuant to Section __ of the Bond Security Agreement.
"REDEMPTION DRAWING" means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of Exhibit D to the
Letter of Credit.
"REIMBURSEMENT OBLIGATIONS" means the obligations hereunder to
reimburse the Credit Provider for Drawings, to pay interest on Drawings and to
pay fees to the Creditor Provider pursuant to Section 2.5.
"REMARKETING AGENT" means the entity acting as remarketing
agent under the Series Bond Security Agreement.
"REMARKETING AGREEMENT" means that certain Remarketing
Agreement dated as of_______ ___, ___ by and between the Issuer and the
Remarketing Agent.
"STATED EXPIRATION DATE" means the date on which the Letter of
Credit terminates in accordance with its terms, as extended from time to time in
accordance with the terms of the Letter of Credit.
4
8
"STATED MATURITY" means, with respect to any Bond, the date on
which such Bond matures.
"STATED MATURITY DRAWING" means a drawing under the Letter of
Credit resulting from the presentation of a certificate in the form of Exhibit G
to the Letter of Credit.
"TENDER AGENT" means_______of_______or its
successor under the Series Bond Security Agreement.
"TERMINATION DATE" means the earliest to occur of the close of
the Credit Provider's business on (i) the Stated Expiration Date; (ii) the date
which is fifteen (15) days following the Credit Provider's receipt of written
notice from the Trustee in the form of Exhibit B to the Letter of Credit; (iii)
the earlier of (A) the date which is five (5) days following the Conversion Date
as specified in a certificate in the form of Exhibit A to the Letter of Credit
or (B) the date on which the Credit Provider honors a Drawing under the Letter
of Credit on or after the Conversion Date as specified in a certificate in the
form of Exhibit A to the Letter of Credit; (iv) the date on which an
Acceleration Drawing is honored by the Bank; or (v) the date which is fifteen
(15) days following the receipt by the Trustee of a written notice from the
Credit Provider specifying the occurrence of an Event of Default and directing
the Trustee to cause a redemption of the Bonds.
"TRUSTEE" means_______Bank, which, as of the date hereof, has
its principal corporate trust office in_______, and its successors and assigns,
or any other corporation or association which may at any time be substituted in
its place, as provided in Section_______of the Bond Security Agreement.
The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms. Any capitalized terms used
herein which are not specifically defined herein shall have the same meanings
herein as in the Bond Security Agreement. All references in this Agreement to
times of day shall be references to New York City time unless otherwise
expressly provided herein. Where the character or amount of any asset or
liability or item or income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
specific provisions of this Agreement.
SECTION 1.2. INCORPORATION OF CERTAIN DEFINITIONS BY REFERENCE.
Each capitalized term used herein and not defined herein shall have the meaning
provided therefor in the Bond Security Agreement.
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ARTICLE II.
LETTER OF CREDIT
SECTION 2.1. ISSUANCE OF LETTER OF CREDIT. The Credit Provider
agrees with the Issuer, on the terms and subject to the conditions herein set
forth, to issue to the Trustee on the Closing Date a letter of credit
substantially in the form of Appendix I hereto (the "Letter of Credit"). The
Letter of Credit shall be in the original stated amount of $_______, which is
the sum of (i) the principal amount of Bonds outstanding on the Closing Date,
plus (ii) interest thereon at the Maximum Rate for a period of__________(___)
days (computed on the basis of 365- or 366-day year, as applicable, and the
actual number of days elapsed).
SECTION 2.2. LETTER OF CREDIT DRAWINGS. The Letter of Credit
permits, and the Bond Security Agreement requires, the Trustee to make Drawings
at the times and in the amounts specified therein.
SECTION 2.3. REIMBURSEMENT OF LIQUIDITY DRAWINGS; INTEREST. (a)
The amount of each Liquidity Drawing shall constitute an advance (a "Liquidity
Advance") to the Issuer which shall be repaid as follows:
(i) on the next succeeding Interest Payment Date, in part in an
amount equal to the portion of such Liquidity Advance, if any, used to
pay the interest component of the purchase price of the Credit Provider
Bonds purchased with such Liquidity Advance;
(ii) on each date on which any portion of any Credit Provider
Bonds purchased with such Liquidity Advance are subject to redemption
pursuant to Section _____, _____ or _____ of the Bond Security
Agreement or are required to be paid at Stated Maturity, in part in an
amount equal to the principal amount of the Credit Provider Bonds
required to be so redeemed or paid.
(b) The unpaid balance of each Liquidity Advance shall bear
interest at the Credit Provider Rate payable on each Interest Payment Date and,
with respect to any part of such Liquidity Advance repaid or prepaid pursuant to
Section 2.3(c), on the date of such repayment or prepayment.
(c) Notwithstanding the foregoing provisions of Section 2.3,
each Liquidity Advance shall be repaid (i) on the date on which any Credit
Provider Bonds purchased with such Liquidity Advance are remarketed pursuant to
the Series Bond Security Agreement, in an amount equal to the principal amount
of the Credit
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Provider Bonds so remarketed, and (ii) on the date on which the Letter of Credit
is replaced by a substitute letter of credit in accordance with the terms of the
Bond Security Agreement and Section_______hereof, in the amount of the entire
unpaid balance of such Liquidity Advance, in each case together with interest
accrued thereon at the Credit Provider Rate. Any Liquidity Advance created
pursuant to Section 2.3(a) may be prepaid at the option of the Issuer in whole
or in part (but, if in part, in a minimum principal amount of $100,000) at any
time without premium or penalty on any Business Day. Each repayment or
prepayment pursuant to this Section 2.3(c) shall be made by payment of an amount
equal to the principal amount of the Liquidity Advance to be repaid or prepaid
plus accrued interest thereon to the date of such repayment or prepayment at the
Credit Provider Rate.
(d) The honoring of any Liquidity Drawing with respect to any
Bonds shall constitute the purchase of such Bonds by the Credit Provider. Any
such Bonds so purchased by the Credit Provider shall constitute Credit Provider
Bonds, shall be registered in the name of the Credit Provider and held by the
Trustee for the Credit Provider and shall not be entitled to the benefits of
the Letter of Credit. Payments of principal of or interest on, or purchase
price of, any such Credit Provider Bonds shall be credited against the
corresponding amount due with respect to the related Liquidity Advance.
SECTION 2.4. REIMBURSEMENT OF OTHER DRAWINGS; INTEREST. Each
Interest Drawing, Redemption Drawing, Acceleration Drawing and Stated Maturity
Drawing shall be reimbursed on the date of such Drawing. Until reimbursed, each
Drawing referred to in this Section shall bear interest in accordance with
Section 2.13.
SECTION 2.5. FEES. (a) In consideration of the issuance by the
Credit Provider of the Letter of Credit, the Issuer hereby agrees to pay the
Credit Provider a letter of credit fee for each day during the period from and
including the Closing Date to but excluding the Termination Date equal
to_______% per annum times the Available Amount in effect on such day. Such fee
shall be payable, in immediately available funds, in [advance] [arrears] on
each_______and_______, commencing _____________, and on the Termination Date.
Fees payable pursuant to this Section shall be calculated on the basis of a
360-day year and actual days elapsed from and including the immediately
preceding date for payment (or the effective date hereof, if there has been no
such date for payment) to but excluding the current date for payment, without
regard to whether either such date is a Business Day. It is understood that such
fee shall be paid by the Issuer on the date due without the submission of any
invoice or demand therefore on the part of the Credit Provider. If such fees are
paid by the Trustee on behalf of the Issuer, the Credit Provider shall deliver
to the Trustee a copy of an invoice for such fees.
(b) The Issuer hereby agrees to pay to the Credit Provider on
the date of each Drawing a drawing fee of $_______.
SECTION 2.6. METHOD OF PAYMENT; ETC. All payments to be made to
the Credit Provider under this Agreement shall be made at the Designated Office
of the Credit Provider not later than 2:00 p.m., New York City time, on the date
when due and shall be made in
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lawful money of the United States of America in freely transferable and in
immediately available funds. If any such payment falls due on a date which is
not a Business Day, the payment shall be made in accordance with this Section
2.6 on the first following day that is a Business Day.
SECTION 2.7. REDUCTION AND TERMINATION. (a) Subject to Section
2.9 hereof, the Trustee shall have the right at any time to permanently reduce,
without penalty or premium, the Available Amount of the Letter of Credit upon
not less than five (5) Business Day's prior written notice to the Credit
Provider by the Trustee in the form of Exhibit D or H to the Letter of Credit,
designating the date (which shall be a Business Day) of such reduction and the
amount of such reduction. Such reduction of the Available Amount shall be
effective, after receipt of such notice, on the date specified in such notice.
(b) If the Trustee shall partially reduce the Available Amount
pursuant to Section 2.7(a), the Credit Provider shall then have the right to
require the Trustee to simultaneously surrender the outstanding Letter of Credit
to the Credit Provider on the effective date of such partial reduction of the
Available Amount and to accept on such date, in substitution for the then
outstanding Letter of Credit, a substitute irrevocable transferable letter of
credit, dated such date, for an amount equal to the amount to which the
Available Amount shall have been so reduced but otherwise having terms identical
to the then outstanding Letter of Credit. Alternatively, if the Trustee shall
partially reduce the Available Amount pursuant to Section 2.7(a), the Credit
Provider in its sole discretion may elect to deliver to the Trustee a Notice of
Amendment to the Letter of Credit in the form of Exhibit I to the Letter of
Credit, dated the effective date of such partial reduction of the Available
Amount of the Letter of Credit and stating the amount to which the Available
Amount has been reduced.
(c) At the close of the Credit Provider's business on the
fifteenth day following receipt by the Credit Provider of a certificate of the
Trustee in the form of Exhibit B to the Letter of Credit, the Letter of Credit
shall terminate and no further drawings will be or need be honored thereunder.
SECTION 2.8. REDUCTION AND REINSTATEMENT OF THE AMOUNT OF THE
LETTER OF CREDIT. (a) As set forth in the Letter of Credit, the Available Amount
of the Letter of Credit shall be reduced by an amount equal to the amount of any
Drawing made thereunder and shall be reinstated as set forth in the Letter of
Credit.
(b) The Credit Provider will promptly notify the Trustee, the
Issuer and the Remarketing Agent of any reinstatement of the Letter of Credit
pursuant to Section 2.8(a) hereof relating to reimbursement of a Liquidity
Drawing or payment of the purchase price of Bonds theretofore purchased with the
proceeds of a Liquidity Drawing, but failure to provide such notice shall not
affect the reinstatement of the Letter of Credit as provided above.
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SECTION 2.9. SUBSTITUTE LETTER OF CREDIT. (a) The Issuer may
elect to terminate the Letter of Credit at any time if the short-term ratings of
the Bonds are withdrawn, suspended, or reduced below "A-1" in the case of
Standard & Poor's or "VMIG-1" in the case of Moody's; provided, however, that
the effective date of any such termination shall be at least_______(___)days
after notice of such termination is received by the Credit Provider and the
Trustee unless a replacement Credit Facility is to be provided in accordance
with the Bond Security Agreement in which event the effective date of such
termination shall be at least_______(____) days after notice of such replacement
is so received.
(b) In addition, subject to the terms of the Series Bond
Security Agreement and this paragraph, the Issuer may elect to terminate the
Letter of Credit at any time by providing to the Credit Provider and the Trustee
a replacement letter of credit in substitution for the Letter of Credit;
provided, however, that the Issuer shall give the Credit Provider at least
______ (___) days' prior written notice of any such substitution. The provision
of such a replacement shall be subject to the condition that the entity
providing such replacement or the Issuer shall provide funds sufficient to repay
all outstanding Liquidity Advances and to pay interest thereon accrued and
unpaid to the date of such termination.
SECTION 2.10. DISBURSEMENT OF DRAWINGS. The Issuer hereby
directs the Credit Provider to make payments under the Letter of Credit in the
manner therein provided.
SECTION 2.11. COMPUTATION OF INTEREST. All computations of
interest payable to the Credit Provider under this Agreement shall be made on
the basis of a three hundred sixty (360) day year and actual days elapsed.
Interest shall accrue during each period during which interest is computed from
and including the first day thereof to but excluding the last day thereof.
SECTION 2.12. PAYMENT DUE ON NON-BUSINESS DAY TO BE MADE ON
NEXT BUSINESS DAY. If any sum becomes payable pursuant to this Agreement on a
day which is not a Business Day, the date for payment thereof shall be extended,
without penalty, to the next succeeding Business Day, with no adjustment in the
amount to be paid on such day.
SECTION 2.13. LATE PAYMENTS. If the principal amount of any
Reimbursement Obligation or other amount owed by the Issuer hereunder is not
paid when due, such Reimbursement Obligation or other amount shall bear interest
(computed on the basis of a 360 day year and actual days elapsed) from the due
date thereof until
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paid in full at a rate per annum equal to the Credit Provider Rate plus ____
percent, payable on demand.
SECTION 2.14. SOURCE OF FUNDS. All payments made by the Letter
of Credit shall be made from funds of the Credit Provider or from funds obtained
by the Credit Provider from a Participant as provided in Section 7.6 of this
Agreement, but in no event shall such payment be made with funds obtained from
the Issuer.
SECTION 2.15. EXTENSION OF STATED EXPIRATION DATE. (a) If the
short-term ratings of the Bonds are at least "A-1" in the case of Standard &
Poor's or "VMIG-1" in the case of Moody's, the Credit Provider may, by written
notice given to the Issuer and the Trustee in the form of Exhibit K to the
Letter of Credit (a "Notice of Extension") on or before the_______day prior to
then current Stated Expiration Date, elect to extend the Stated Expiration
Date to a future date designated in the Notice of Extension or, if the final
maturity of the Bonds shall occur prior to such future date, to a date _____
days after such final maturity of the Bonds.
(b) If the Credit Provider does not give a Notice of Extension
as provided in paragraph (a) of this Section 2.15, the Issuer may, on or before
the_______day prior to the then current Stated Expiration Date, but no earlier
than the _______ day prior to the then current Stated Expiration Date, request
in writing that the Credit Provider agree to an extension of the Stated
Expiration Date to a future anniversary date of such Stated Expiration Date
designated in the Notice of Extension or, if the final maturity of the Bonds
shall occur prior to such future anniversary date, to a date _______ days after
such final maturity of the Bonds. Within _______ days following its receipt of a
request for an extension of the Stated Expiration Date, the Credit Provider
shall give written notification to the Issuer and the Trustee as to whether it
elects to extend the Stated Expiration Date; provided, that failure by the
Credit Provider to give any such notice within such time period shall constitute
an election by the Credit Provider not to extend the then current Stated
Expiration Date. If the Credit Provider, in its sole discretion, elects to
extend the Stated Expiration Date then in effect, it shall deliver to the Issuer
and the Trustee a Notice of Extension designating the date to which the Stated
Expiration Date is being extended.
(c) Any extension of the Stated Expiration Date pursuant to
paragraph (a) or (b) shall be effective on the Business Day following the date
of delivery of the applicable Notice of Extension and thereafter all references
in this Agreement to the Stated Expiration Date shall be deemed to be references
to the date designated as such in the most recent Notice of Extension delivered
to the Trustee.
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SECTION 2.16. CHANGE OF LAW. (a) If, after the date of this
Agreement, the adoption of any governmental rule, any change in any governmental
rule or the application or requirements thereof (whether such change occurs in
accordance with the terms of such governmental rule as enacted, as a result of
amendment or otherwise), any change in the interpretation or administration of
any governmental rule by any governmental authority, or compliance by the Credit
Provider or any Participant with any request or directive (whether or not having
the force of law) of any governmental authority or any credit rating agency
(a "Change of Law"):
(i) Shall subject the Credit Provider or any Participant to any
tax, duty or other charge with respect to the Credit Provider's
commitment under the Letter of Credit, or shall change the basis of
taxation of the Credit Provider or any Participant on Credit Provider
Bonds (except for changes in the rate of taxation on the overall net
income of the Credit Provider or any Participant); or
(ii) Shall impose, modify or hold applicable any reserve,
special deposit or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances or loans by, or
any other acquisition of funds by the Credit Provider or any
Participant for the Credit Provider's commitment under the Letter of
Credit; or
(iii) Shall impose on the Credit Provider or any Participant
any other condition related to the Credit Provider's commitment under
the Letter of Credit;
and the effect of any of the foregoing is to increase the cost to the Credit
Provider or any Participant of making, renewing, or maintaining the Credit
Provider's commitment or of issuing or maintaining the Letter of Credit or
funding or maintaining Drawings or to reduce any amount receivable by the Credit
Provider or any Participant hereunder or under any Credit Provider Bonds; then
the Issuer shall from time to time, upon demand by the Credit Provider or any
Participant, pay to the Credit Provider or any Participant additional amounts
sufficient to reimburse the Credit Provider or any Participant for such
increased costs or to compensate the Credit Provider or any Participant for such
reduced amounts relating to its commitment hereunder. A certificate as to the
amount of such increased costs or reduced amounts, submitted by the Credit
Provider or any Participant to the Issuer shall, in the absence of manifest
error, be conclusive and binding on the Issuer for all purposes.
(b) If, after the date of this Agreement, the Credit Provider
or any Participant determines that (i) any Change of Law affects the amount of
capital required or expected to be maintained by the Credit Provider or any
person controlling the Credit Provider or any Participant (a "Capital Adequacy
Requirement") and
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(ii) the amount of capital maintained by the Credit Provider or any Participant
which is attributable to or based upon the Available Amount or this Agreement
must be increased as a result of such Capital Adequacy Requirement (taking into
account the Credit Provider's or such Participant's policies with respect to
capital adequacy), the Issuer shall pay to the Credit Provider or any
Participant, upon demand of the Credit Provider or any Participant, such amounts
as the Credit Provider or any Participant shall determine are necessary to
compensate the Credit Provider for the increased costs to the Credit Provider or
any Participant of such increased capital. A certificate of the Credit Provider
or any Participant setting forth in reasonable detail the computation of any
such increased costs, delivered by the Credit Provider or any Participant to the
Issuer shall, in the absence of manifest error, be conclusive and binding on the
Issuer for all purposes.
SECTION 2.17. CREDIT PROVIDER RATE ADJUSTMENT. If the amount of
interest that would have accrued hereunder for any period at a rate (the
"Formula Rate") equal to the Credit Provider Rate calculated without regard to
the Maximum Lawful Rate and without regard to this Section 2.17 exceeds the
amount of interest that actually accrued for such period giving effect to the
Maximum Lawful Rate, interest hereunder shall accrue at the Maximum Lawful Rate
in accordance with the first proviso to the definition of Creditor Provider Rate
in Section 1.1. The difference between (a) the amount of interest which would
accrue at the Formula Rate and (b) the amount of interest that actually accrues
as provided in the immediately preceding sentence is herein referred to as the
"Excess Interest Amount". The Credit Provider shall calculate and notify the
Issuer promptly in writing of the Excess Interest Amount, if any, determined
from time to time. If there is an Excess Interest Amount, then all interest
hereunder shall accrue at the Maximum Lawful Rate until such time as the excess
of (a) the amount of interest accrued thereon at such rate over (b) the amount
of interest that would have accrued at the Formula Rate equals the Excess
Interest Amount.
ARTICLE III.
CONDITIONS PRECEDENT
SECTION 3.1. CONDITIONS PRECEDENT TO ISSUANCE OF LETTER OF
CREDIT. It shall be a condition precedent to the Credit Provider's issuing the
Letter of Credit that:
(a) All corporate and other proceedings taken in connection
with the transactions contemplated hereby and all documents incident thereto
shall be in form and substance satisfactory to the Credit Provider and that the
Credit Provider shall have received on or prior to the Closing Date:
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(i) a true and complete original of this Agreement;
(ii) resolutions of the Issuer authorizing the Bond Documents
and the issuance of the Bonds, certified on the Closing Date by the
Secretary of the Issuer;
(iii) a certified copy of the [governing instruments of the
Issuer] and evidence of the filing of required notices with respect
thereto with the office of the Secretary of the State of
__________________;
(iv) a copy certified on the Closing Date by the Secretary or
Assistant Secretary of any Bond Documents delivered on or prior to the
Closing Date;
(v) signature and incumbency certificates, dated the Closing
Date, of the signatories of the Issuer executing this Agreement;
(vi) copies of the legal opinions rendered in connection with
the issuance of the Bonds, and the delivery of the Bond Documents,
dated the Closing Date, either addressed to the Credit Provider or
stating that the Credit Provider is entitled to rely thereon as if said
opinions were addressed to it;
(vii) an executed opinion of counsel to the Issuer as to the
due authorization, execution, delivery and enforceability of this
Agreement;
(viii) payment of the expenses and other amounts then due, if
any, referred to in Section 7.6; and
(ix) a certificate of the chief executive officer or the chief
financial officer of the Issuer, to the effect that all representations
and warranties of the Issuer contained or incorporated by reference
herein or otherwise made in writing in connection herewith or in the
other Bond Documents are true and correct as though such
representations and warranties had been made as of the date of this
Agreement and that no Event of Default or Default exists under this
Agreement;
(b) This Agreement and each of the Bond Documents shall have
been duly executed and delivered by the parties thereto, shall each be in full
force and effect, and shall each be in form and substance satisfactory to the
Credit Provider; and
(c) All municipal, corporate and legal proceedings and all
instruments in connection with the transactions contemplated by this Agreement
and the Bond Documents shall be satisfactory in form and substance to the Credit
Provider and its counsel and the Credit Provider shall have received all
documents, including records of
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corporate proceedings and governmental approvals, which it may reasonably
request in connection with the transactions contemplated by this Agreement and
the Bond Documents, any such document where appropriate to be certified by
proper officers.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS AND WARRANTIES. The Issuer
represents and warrants to the Credit Provider as of the Closing Date that:
(a) The Issuer is a _________ of the State of _______ and has
all requisite power and authority (i) to conduct its business, to own its
properties and to carry on its activities, (ii) to execute, deliver and perform
its obligations under the Bond Documents, (iii) to issue the Bonds in the manner
and for the purpose contemplated by the Bond Security Agreement, and (iv) to
execute, deliver or adopt, as the case may be, and perform its obligations under
all other agreements and instruments executed and delivered by the Issuer
pursuant to or in connection with this Agreement.
(b) This Agreement constitutes, and each of the Bond Documents
constitutes, the legal, valid and binding obligation of the Issuer enforceable
against the Issuer in accordance with its respective terms, except as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and subject to usual equity
principles.
(c) All of the Issuer's most recent Financial Statements and
its Annual Report, copies of which have been furnished to the Credit Provider,
have been prepared in conformity with generally accepted accounting principles
(except as noted therein) and fairly present the financial condition of each of
the entities listed therein as at the then respective dates, and the results of
its operations for the period covered thereby. There has been no change in the
condition (financial or otherwise), operations or prospects of the Issuer since
the date of such Financial Statements or since the date of preparation of the
current and projected fiscal year plan.
(d) The information contained in the Official Statement (other
than with respect to the information contained therein and furnished in writing
by the Credit Provider), is as of the date hereof true and correct in all
material respects and does not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading; and
except as otherwise disclosed to the Credit
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Provider by the Issuer in writing, from the date of the Official Statement to
the date of execution of this Agreement there has occurred no material adverse
change in the condition, financial or otherwise of the Issuer, or in the status
of the required permits, licenses or approvals for the [Project] [System].
(e) Each authorization, consent, approval, license or formal
exemption from, or filing, declaration or registration with, any court,
governmental agency or regulatory authority (Federal, state or local), required
in connection with the execution and delivery or adoption, as the case may be,
and performance by the Issuer of the Bond Documents or the issuance by the
Issuer of the Bonds in the manner and for the purpose contemplated by this
Agreement and the Bond Documents, has been obtained or made and is in full force
and effect.
(f) The Bond Security Agreement creates the pledge, lien and
assignment which it purports to create to secure the Bonds [and the Issuer's
obligations hereunder] as and to the extent provided in the Bond Security
Agreement.
(g) The execution and delivery or adoption, as the case may be,
and performance by the Issuer of this Agreement or any Bond Document have been
duly authorized by the Issuer and will not (i) conflict with or violate the
_______ [governing instruments of the Issuer] or any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Issuer, (ii) result in a breach of or
constitute a default under any indenture, mortgage, deed of trust, ordinance or
loan or credit agreement or any other agreement, lease or instrument to which
the Issuer is a party or by which it or its properties may be bound or affected,
or (iii) result in, or require, the creation or imposition of any Lien (other
than the Lien of the Bond Security Agreement) upon or with respect to any of the
properties now owned or hereafter acquired by the Issuer; and the Issuer is not
in material default under any such law, order, rule, regulation, writ, judgment,
injunction, decree, determination or award or any such indenture, ordinance,
agreement, lease or instrument.
(h) No Event of Default or an event which with the lapse of
time, the giving of notice, or both, would constitute an Event of Default has
occurred and is continuing.
(i) Except as set forth in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation at law or in equity or before
or by any court, public board, body or official pending or, to the knowledge of
the Issuer, threatened against or affecting (i) the transactions contemplated by
or the validity of any Bond Documents or this Agreement, or any agreement or
instrument to which the Issuer is a party and which is issued or contemplated
for use in the consummation of the transactions
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contemplated by the Bond Documents or this Agreement, (ii) the tax exempt status
of the Issuer or of the interest on the Bonds, (iii) the Issuer's ability to
perform its obligations under this Agreement or the Bond Documents to which it
is a party, or (iv) which in any way contests the existence, organization or
powers of the Issuer or the titles of the officers of the Issuer to their
respective offices; or which in the aggregate might materially adversely affect
the Issuer's property, assets, operations or condition, financial or otherwise,
or which in any manner draws into question the validity or enforceability of
this Agreement or any Bond Document.
(j) The defense of sovereign immunity is not available to the
Issuer in any proceeding initiated by the Credit Provider to enforce any of the
obligations of the Issuer under this Agreement or the Bond Documents and, to the
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 and agrees not to assert the defense of sovereign immunity in any such
proceeding.
(k) The Issuer makes each of the representations and warranties
contained in the Bond Documents to which the Issuer is a party to, and for the
benefit of, the Credit Provider as if the same were set forth in full herein.
ARTICLE V.
COVENANTS
SECTION 5.1. AFFIRMATIVE COVENANTS. During the term of this
Agreement, and until the obligations of the Issuer to the Credit Provider
hereunder or under any Credit Provider Bond are paid in full and the Credit
Provider has no further commitment hereunder, unless the Credit Provider shall
otherwise consent in writing, the Issuer hereby covenants to:
(a) Forthwith after the Issuer shall have obtained knowledge of
the occurrence of an Event of Default or Default, provide to the Credit Provider
the written statement of an authorized officer of the Issuer setting forth the
details of each such Event of Default or Default and the action which the Issuer
proposes to take with respect thereto.
(b) Within _______ days after the end of each fiscal year of
the Issuer, and within _______ days after the end of each quarter of the
Issuer's fiscal year, or at such earlier time as the same may be available,
provide to the Credit Provider financial statements consisting of a balance
sheet of the [Project] [System] as at the end of such period and a statement of
income and retained earnings of the [Project] [System] for such
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fiscal year, setting forth in comparative form the corresponding figures, if
any, for the preceding fiscal period, all in reasonable detail and accompanied
by (i) in the case of the financial statements prepared at the end of the
Issuer's fiscal year, an audit report of nationally recognized independent
public accountants stating that such financial statements have (except as noted
therein) been prepared in accordance with generally accepted accounting
principles consistently applied and (ii) in any case a certificate from an
authorized financial officer of the Issuer stating that no Event of Default or
Default has come to his attention which was continuing at the end of such fiscal
period or on the date of his certificate, or if there has been or currently
exists an Event of Default or Default, indicating the nature of such Default or
Event of Default and the action which the Issuer proposes to take with respect
thereto.
(c) Preserve and maintain its existence, rights and privileges
in the State of ________, and qualify and remain qualified and authorized to do
business in each other jurisdiction in which such qualification is necessary in
view of its activities or operations with respect to the [Project][System].
(d) Use the proceeds from the sale of Bonds as provided in the
Series Bond Security Agreement.
(e) Cause the [Trustee] [Tender Agent] to use the proceeds from
any purchase of Bonds made hereunder solely to pay the principal or Purchase
Price of or interest on the Bonds as more fully described herein.
(f) Use its best efforts to cause each of the Paying Agent, the
Trustee, the Tender Agent and the Remarketing Agent at all times to comply with
the terms of the Bond Documents to which it is a party.
(g) At all times have a Trustee, Paying Agent, Tender Agent and
Remarketing Agent performing the duties thereof contemplated by the Bond
Security Agreement.
(h) Upon reasonable notice permit any Person designated by the
Credit Provider in writing, at the Credit Provider's expense, to visit any of
the properties of the Issuer relating to the Bonds or this Agreement, to examine
the corporate books and financial records of the Issuer and make copies thereof
or extracts therefrom, and to discuss the affairs, finances and accounts of the
Issuer with the principal officers of the Issuer and its independent public
accountants relating to the Bonds or this Agreement, all at such reasonable
times and as often as the Credit Provider may reasonably request.
(i) Observe and perform all of its obligations under this
Agreement, the Bonds and the other Bond Documents.
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(j) Furnish to the Credit Provider a copy of any notice,
certification, demand or other writing or communication given by the
[Trustee][Tender Agent] to the Issuer or by the Issuer to the [Trustee][Tender
Agent] under or in connection with the Bonds or any of the Bond Documents, in
each case promptly after the receipt or giving of the same.
(k) Give the Credit Provider prompt notice of any action, suit
or proceeding known to it at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined, could materially
impair the ability of the Issuer to carry out its obligations under the Act,
this Agreement, the Bonds or any other document, instrument or agreement
required hereunder or thereunder, or would materially and adversely affect its
assets or financial condition.
(l) Promptly give written notice to the Credit Provider of (i)
any material dispute which may exist between the Issuer and the [Trustee][Tender
Agent] or any dispute in connection with any transaction contemplated under this
Agreement or (ii) any matter or event which may result in a material adverse
change in the Issuer's financial condition or operations.
(m) 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 Bond Documents, which provisions, as well as related defined terms contained
therein, are hereby incorporated by reference herein with the same effect as if
each and every such provision were set forth herein 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 Credit Provider and
such document, opinion or other instrument shall be satisfactory to the Credit
Provider. No amendment to such covenants and agreements or defined terms made
pursuant to the Bond Documents shall be effective to amend such covenants and
agreements and defined terms as incorporated by reference herein without the
consent of the Credit Provider.
SECTION 5.2. NEGATIVE COVENANTS. The Issuer covenants,
undertakes and agrees with the Credit Provider that, from the date of execution
hereof and so long as any Bond remains Outstanding or any other amounts are due
to the Credit Provider under this Agreement, it will not:
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(a) Violate any laws, rules, regulations, or governmental
orders to which it is subject, which violation involves a reasonable possibility
of materially and adversely affecting its financial condition, business or
results of operations or of materially adversely affecting the Issuer's ability
to perform its obligations under this Agreement or the Bond Documents.
(b) Except as provided in Section(s) ____ of the Bond Security
Agreement, issue or incur any bonds, notes, debentures, obligations or other
evidences of indebtedness of similar nature, other than the Bonds, payable out
of or secured by a Lien on the Pledged Revenues or other moneys, securities or
funds held or set aside by the Issuer under the Bond Security Agreement; or
create or cause to be created any Lien on the Pledged Revenues or such moneys,
securities or funds, except as provided in the Bond Security Agreement.
(c) Except as provided in Section ____ of the Bond Security
Agreement, create or incur any indebtedness for borrowed money payable from the
Pledged Revenues which is prior to or on a parity with the lien on Pledged
Revenues which secures the Bonds.
(d) Amend or modify the Bond Documents in a material manner
relating in any way to this Agreement or the Credit Provider or having a
material adverse effect on the Issuer's ability to pay when due principal of or
interest on any Bond, without the prior written consent of the Credit Provider.
(e) Refer to the Credit Provider in any Official Statement or
make any changes in reference to the Credit Provider in any Official Statement
without the Credit Provider's prior written consent thereto. Upon specific
request of the Issuer therefor in each instance, the Credit Provider agrees to
provide such information with respect to the Credit Provider as may be
reasonably requested by the Issuer and required to enable the Issuer to comply
with applicable disclosure requirements for the Official Statement.
(f) Take any action, or permit any action to occur or be taken
by any other person, that would cause a Merger Without Assumption.
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ARTICLE VI.
DEFAULTS
SECTION 6.1. EVENTS OF DEFAULT. If any of the following events
shall occur and be continuing, each such event shall be an "Event of Default":
(a) any representation or warranty made by the Issuer under or
in connection with this Agreement or any of the other Bond Documents
shall prove to be untrue in any material respect on the date as of
which it was made;
(b) any "event of default" on the part of the Issuer shall have
occurred under any of the Bond Documents (as defined respectively
therein);
(c) default on the part of the Issuer in the payment of any
Reimbursement Obligations or other amount owing hereunder when and as
the same shall become due and payable as herein provided;
(d) default in the due observance or performance by the Issuer
of any covenant set forth herein [with grace periods to be determined];
(e) A proceeding is instituted in a court having jurisdiction
over the Issuer, any of its activities or any of its properties seeking
an order for relief, rehabilitation, reorganization, conservation,
liquidation or dissolution in respect of the Issuer under applicable
law and such proceeding is not terminated for a period of 60
consecutive days or such court enters an order granting the relief
sought in such proceeding or the Issuer shall institute or take any
corporate action for the purposes of instituting any such proceeding;
or the Issuer shall become insolvent or unable to pay its debts as they
mature or shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary
case under any such law or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of the Issuer or
for any substantial part of its property, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts or claims as they become due, or shall take any corporate
action in furtherance of any of the foregoing; or
(f) (1) The Issuer shall default in any payment of principal of
or interest on any obligation for borrowed money (or any obligation
under any conditional sale or other title
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retention agreement or any obligation secured by a purchase money
mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) payable from the Pledged Revenues
beyond any period of grace provided with respect thereto; or (2) the
Issuer shall default in the performance or observance of any other
agreement, term or condition contained in any agreement under which any
such obligation is created (or if any other event or default thereunder
or under such agreement shall occur and be continuing) and the effect
of such event or default is to cause, or to permit the holder or
holders of such obligation (or a trustee on behalf of such holder or
holders) to cause, such obligation to become due prior to its stated
maturity; or
(g) The Bond Security Agreement shall terminate or cease to be
of full force and effect, other than as a result of any redemption or
defeasance in full of the Bonds; or the Issuer shall in writing to the
Trustee claim that its obligations under the Bonds, the Bond Security
Agreement, any Bond Document or this Agreement are not valid and
binding on the Issuer or repudiate such obligations; or the Issuer
shall initiate any legal proceedings to seek an adjudication that any
such obligations are not valid and binding on the Issuer; or any court
or governmental authority with jurisdiction to rule on the validity of
such obligations shall announce, find or rule that any such obligations
are not valid and binding on the Issuer; or
(h) Moody's [and][or] S&P shall withdraw or suspend its
respective long-term ratings of the Bonds or shall reduce such rating
to less than " _______ " and " _______ " (or the then current
equivalent thereof), as the case may be.
SECTION 6.2. REMEDIES. If any Event of Default hereunder has
occurred and is continuing the Credit Provider may exercise any one or more of
the following rights and remedies:
(a) give notice of the occurrence of an Event of Default to the
Trustee and directing the Trustee to redeem the Bonds, thereby causing
the Letter of Credit to expire at the close of the Credit Provider's
business 15 days after receipt by the Trustee of such notice;
(b) direct the Trustee to exercise the rights of the Trustee
under the Bond Security Agreement; and
(c) pursue any other action available at law or in equity.
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ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. WAIVER; PARTIES IN INTEREST; CAPTION HEADINGS. No
failure or delay on the part of the Credit Provider in exercising any right,
power or privilege hereunder or under the Letter of Credit and no course of
dealing shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein and in the Letter of Credit expressly
provided are cumulative and not exclusive of any rights or remedies which the
Credit Provider would otherwise have. No notice to or demand on the Issuer or
any other party hereto in any case shall entitle the Issuer or such other party
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Credit Provider to any other or further
action in any circumstances without notice or demand. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the parties hereto. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that the Issuer
may not assign or transfer any of its interest hereunder without the prior
written consent of the Credit Provider. It is understood that this Agreement is
also for the benefit of the Trustee and the Guarantor, and that the Guarantor is
entitled to exercise all rights and remedies herein provided to the Credit
Provider upon payment under the Guarantee.
The captions in this Agreement are for convenience of reference
only and shall not affect the meaning or construction of or define or limit any
of the provisions hereof.
SECTION 7.2. GOVERNING LAW. THE OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT ARE TO BE CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE
WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE IT BEING UNDERSTOOD HOWEVER THAT THE
CORPORATE POWERS AND LEGAL CAPACITY OF THE ISSUER SHALL BE CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [ISSUER].
SECTION 7.3. SEVERABILITY. If any provision of this Agreement
shall be held or deemed to be or shall in fact be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative or unenforceable to any
extent whatever.
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SECTION 7.4. COUNTERPARTS. This Agreement may be simultaneously
executed in several counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
SECTION 7.5. LIABILITY OF THE CREDIT PROVIDER. As between the
Issuer and the Credit Provider only, the Issuer assumes all risks of the acts or
omissions of the Trustee, or any agent of the Trustee, and any transferee
beneficiary of the Letter of Credit with respect to its use of the Letter of
Credit. Neither the Credit Provider nor any of its officers or directors shall
be liable or responsible for: (a) the use which may be made of the Letter of
Credit or for any acts or omissions of the Trustee and any transferee
beneficiary in connection therewith; (b) the validity or genuineness of
documents, or of any endorsement(s) thereon, even if such documents should in
fact prove to be in any or all respects invalid, fraudulent or forged; (c)
payment by the Credit Provider against presentation of documents which do not
comply with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make payment
under the Letter of Credit; provided, however, that the Issuer shall have a
claim against the Credit Provider, and the Credit Provider shall be liable to
the Issuer, to the extent of any direct, as opposed to consequential, damages
suffered by the Issuer which the Issuer proves were caused by (i) the Credit
Provider's willful misconduct or gross negligence in determining whether
documents presented under the Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Credit Provider's willful or grossly negligent
failure (A) to make lawful payment under the Letter of Credit after the
presentation to the Credit Provider by the Trustee or a transferee beneficiary
of the Letter of Credit of a draft and certificate strictly complying with the
terms and conditions of the Letter of Credit or (B) in making payment against a
drawing which does not comply with the terms of the Letter of Credit (it being
understood that in making such payment the Credit Provider's exclusive good
faith reliance on the documents presented to the Credit Provider in accordance
with the terms of the Letter of Credit as to any and all matters set forth
therein, whether or not any statement or any document presented pursuant to the
Letter of Credit proves to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein proves to be untrue or inaccurate in any
respect whatsoever, shall not be deemed willful misconduct or gross negligence
of the Credit Provider). The Credit Provider is hereby expressly authorized and
directed to honor any demand for payment which is made under the Letter of
Credit without regard to, and without any duty on its part to inquire into the
existence of, any disputes or controversies between the Issuer, the Trustee, any
transferee beneficiary of the Letter of Credit or any other person or the
respective rights, duties or liabilities of any of them, or
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whether any facts or occurrences represented in any of the documents presented
under the Letter of Credit are true and correct.
SECTION 7.6. FEES; EXPENSES; DOCUMENTARY TAXES;
INDEMNIFICATION. (a) The Issuer agrees, whether or not the transactions hereby
contemplated shall be consummated, to pay, and save the Credit Provider harmless
against liability for the payment of, all reasonable out-of-pocket costs and
expenses arising in connection with this transaction including, without
limitation, the preparation, execution and delivery of this Agreement, the
Letter of Credit and related documents, the enforcement of, or the preservation
of, any rights under this Agreement, the other Bond Documents, the Bonds, and
related documents, any modification or consent under such documents and
instruments, the reasonable fees and expenses of counsel for the Credit
Provider, and all stamp and documentary taxes (including interest and penalties,
if any) which may be payable in respect of such documents.
(b) To the maximum extent permitted by law, the Issuer hereby
agrees to indemnify, defend and hold the Credit Provider and each Participant
harmless from and against all liability (including, without limitation,
interest, penalties and all reasonable attorneys' fees) to which the Credit
Provider or any Participant may become subject insofar as such liability arises
out of or is based upon a suit, proceeding, investigation or governmental action
brought or taken in connection with the [Project] [System], this Agreement, the
Letter of Credit, the other Bond Documents or related documents or the use (or
the proposed or potential use) of the proceeds of any purchase under this
Agreement.
(c) Any action taken or omitted by the Credit Provider, under
or in connection with this Agreement or drafts or documents relating thereto, if
taken or omitted without gross negligence, shall be binding upon the Issuer and
shall not result in the Credit Provider incurring any liability to the Issuer.
(d) To the maximum extent permitted by law, the Issuer hereby
agrees at all times to protect, indemnify and save harmless the Credit Provider
and each Participant from and against any and all claims, actions,
investigations, suits and other legal proceedings, and from and against any and
all losses, claims, demands, liabilities, damages, costs, charges, counsel fees
and other expenses which the Credit Provider or any Participant may, at any
time, sustain or incur by reason of or in consequence of or arising out of (i) a
misstatement of a material fact in, or omission of a material fact from, the
Official Statement or other offering document (other than information furnished
by the Credit Provider in writing to the Issuer for use in the Official
Statement and used in strict conformity with the information so provided, which
information is held by a court of competent jurisdiction to
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contain an untrue statement of a material fact or to omit to state a material
fact necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading), (ii) the execution
and delivery of this Agreement or any Bond Document, the issuance of the Bonds
or any failure of the Tender Agent to pay the Purchase Price of tendered Bonds
following performance by the Credit Provider of its obligations hereunder;
provided, however, that the Issuer shall not be required to protect, indemnify
and save harmless the Credit Provider or any Participant from and against any of
the foregoing to the extent caused by the Credit Provider's gross negligence or
willful misconduct. The Credit Provider shall not, in any way, be liable for any
failure by the Credit Provider to purchase Tendered Bonds under this Agreement
as a result of any act of a governmental authority or any other cause beyond the
control of the Credit Provider. The obligations of the Issuer under this Section
7.6 shall survive the payment of the Bonds and the termination of this
Agreement.
SECTION 7.7. TERM OF THE AGREEMENT. The term of this Agreement
shall be until the later of (i) the payment of all amounts due to the Credit
Provider by the Issuer under this Agreement and any Credit Provider Bonds,
including, without limitation, interest on the Credit Provider Bonds at the
Credit Provider Rate and (ii) the Stated Expiration Date.
SECTION 7.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations and warranties of the Issuer and the Credit
Provider contained in this Agreement shall survive issuance of the Letter of
Credit, delivery of this Agreement and the transactions contemplated hereby. All
covenants of the Issuer to make payments to the Credit Provider under any
provision hereof, including Sections 2.5, 2.16 and 7.6, shall survive the
payment of the Bonds, including the Credit Provider Bonds, and termination of
this Agreement. All other covenants of the Issuer contained in this Agreement
shall survive termination of this Agreement if and so long as there are Credit
Provider Bonds.
SECTION 7.9. PARTICIPATION. The Credit Provider shall have the
right at any time to sell, assign, grant or transfer participation in all or
part of its obligations under the Letter of Credit and the obligations of the
Issuer hereunder to any other Participant without the consent of or notice to
the Issuer; provided, that any participation shall not relieve the Credit
Provider from any of its obligations under the Letter of Credit. The Credit
Provider may disclose to any Participants or prospective Participants any
information or other data or material in the Credit Provider's possession
relating to this Agreement, any Bond Document and the Issuer, without the
consent of or notice to the Issuer.
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SECTION 7.10. RIGHT OF SET-OFF. In addition to any rights now
or hereafter granted under applicable law (including, but not limited to,
Section 151 of the New York Debtor and Creditor Law) and not by way of
limitation of any such rights, during the continuance of any Event of Default,
the Credit Provider and any Participant is hereby authorized at any time and
from time to time, without notice to the Issuer or to any other person or
entity, any such notice being hereby expressly waived, to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by the Credit Provider or any Participant
to or for the credit or the account of the Issuer against and on account of the
obligations and liabilities of the Issuer to the Credit Provider under this
Agreement, including (without limitation) all claims of any nature or
description arising out of or connected with this Agreement irrespective of
whether or not the Credit Provider shall have made any demand hereunder.
SECTION 7.11. NOTICES. Except as otherwise expressly specified
in this Agreement, all notices, requests and other communications hereunder
shall be in written form (including bank wire, telegram, telecopier or similar
writing) and shall be given to the party to whom addressed, at its address or
telecopier number as such party may hereafter specify for the purpose by notice
to the other parties below. Each such notice, request or communication shall be
effective (i) if given by telecopy, upon receipt thereof, (ii) if given by mail,
three (3) days after such communication is deposited in the United States Mail
with first-class postage prepaid, addressed as aforesaid, or (iii) if given by
any other means, when delivered at the address specified below.
If to the Issuer, to:
_____________________________
_____________________________
_____________________________
If to the Credit Provider, to:
AIG Liquidity Corp.
100 Nyala Farm
Westport, Connecticut 06880
Attention: Chief Financial Officer
Telecopier Number: (203) 222-4780
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If to the Remarketing Agent, to:
_____________________________
_____________________________
_____________________________
If to AIG Financial Products Corp., to:
AIG Financial Products Corp.
100 Nyala Farm
Westport, Connecticut 06880
Attention: Chief Financial Officer
Telecopier Number: (203) 222-4780
SECTION 7.12. CONSENT TO JURISDICTION; WAIVER OF DEFENSE OF
SOVEREIGN IMMUNITY. To the extent permitted by law, the Issuer consents to the
initiation of any proceeding for the enforcement of this Agreement in any
federal or state court of competent jurisdiction located in the State of
________ and agrees not to assert the defense of sovereign immunity in any such
proceeding.
SECTION 7.13. OBLIGATIONS ABSOLUTE. The obligations of the
Issuer under this Agreement shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances whatsoever, including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any of the Bond
Documents;
(ii) any amendment or waiver of or any consent to departure
from all or any of the Bond Documents;
(iii) the existence of any claim, set-off, defense or other
rights which the Issuer may have at any time against the Trustee or any
other beneficiary of the Letter of Credit, the Credit Provider (other
than the defense of payment to the Credit Provider in accordance with
the terms of this Agreement), or any other Person whether in connection
with this Agreement, the Bond Documents or any unrelated transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, or invalid or any
statement therein being untrue or inaccurate in any respect whatsoever;
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(v) payment by the Credit Provider under the Letter of Credit
against presentation of a certificate which does not comply with the
terms of the Letter of Credit; and
(vi) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing.
It is hereby understood and agreed that the provisions of this
Section 7.13 shall not restrict the right the Issuer to sue the Credit Provider
in a separate, independent lawsuit for any claims arising under this Agreement,
subject to Section 7.5 hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by their duly authorized officers, all as of the date
first above written.
Attest: [ISSUER]
________________________ By ________________
Secretary Title:_________
AIG LIQUIDITY CORP.
By _______________
Title:_________
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to the Registration Statement on Form S-3 (Registration No.
33-48996) of our report dated February 23, 1995, on our audits of the
consolidated financial statements and financial statement schedules of American
International Group, Inc. and subsidiaries included in Annual Report on Form
10-K for the year ended December 31, 1994. We also consent to the reference to
our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
New York, New York
July 31, 1995
