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HomeMy WebLinkAboutContracts & Agreements_52-1997_CCv0001.pdf EXECUTION COPY INVESTMENT AGREEMENT This INVESTMENT AGREEMENT, dated as of June 18, 1997 (this "Agreement") , by and among FDIC CAPITAL MARKET SERVICES, INC. , a Delaware corporation ("FCMSI") , CITY OF REDLANDS, CALIFORNIA (the "Issuer") , and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as successor trustee (the "Trustee") under the Trust Agreement, dated as of March 1, 1992, by and among the Issuer, the City of Redlands Public Improvement Corporation (the "Corporation") and Security Pacific National Bank (the "Initial Trustee") , providing for the execution and delivery of the Issuer' s Certificates of Participation (1992 Solid Waste Capital Improvement Projects) (the "Bonds") WITNESSETH. WHEREAS, the Indenture (as defined below) establishes various trust funds and accounts for the receipt and disbursement of moneys, all as more fully set forth in the Indenture; and WHEREAS, the Trustee is authorized by the Indenture pursuant to the written request of the Issuer to invest certain moneys held in or credited to the Fund (as defined below) under the Indenture with FCMSI pursuant to the terms and provisions of this Agreement; and WHEREAS, FCMSI is willing, on the terms and conditions set forth in this Agreement, to accept such moneys as an investment by the Trustee; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, FCMSI, the Issuer and the Trustee hereby agree as follows . SECTION 1 . DEFINITIONS As used herein, the following terms have the following meanings . Capitalized terms used herein and not defined shall have the meanings ascribed to them in the indenture. "Acquisition: Fund" means the Acquisition Fund established pursuant to the Indenture with respect to the Bonds . "Acquisition Investment" shall have the meaning giver to such term in Section 2 . 1 hereof. "Approved Wire Time" means 3 : 30 p.m. , New York time. "Bond Insurer" means AMBAC Indemnity Corporation, as insurer of the Bonds. "Business Day" shall have the meaning set forth in Exhibit A hereto. "Collateral" means (i) cash and securities issued or guaranteed by the United States Government, including United States treasury obligations and any other obligations the timely payment of the principal of and interest on which are guaranteed by the United States Government and senior debt and mortgage backed obligations of Government National Mortgage Association, (ii) senior debt and mortgage backed obligations of Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, or (iii) other investments approved in writing by the Bond Insurer and permitted by S&P in accordance with its guidelines for establishing the Collateral Requirement Level . "Collateral Agent" means a third party or the Trustee appointed by FCMSI and consented to by the Trustee as directed by the Issuer and the Bond Insurer (which consent shall not be unreasonably withheld) that shall hold the Collateral in accordance with the terms of this Agreement . "Collateral Requirement Level" means the collateral requirements specified in Exhibit A. "Collateral Valuation Date" means each Tuesday or if such day is not a Business Day the next succeeding Business Day. "Collateral Value" as of any date, means, in the case of cash, the amount thereof and, in the case of other Collateral, at any time the average value computed on the basis of the closing bid and offer prices for such Collateral on the preceding Business Day as reported in The Wall Street Journal (or such other source as is mutually agreed upon by the Bond Insurer and FCMST) plus accrued and unpaid interest to the extent not included therein. "Debt Service Reserve Fund" means the Reserve Fund estabi-i -shed pursuant to the Indenture with respect to the Bonds . "Debt Service Reserve 'Investment" shall have the meaning given to such term in Section 2 . 1 hereof. 2 "Earnings" means, with respect to each Investment, interest earned and accrued on the outstanding balance of the Investment in accordance with the provisions of Section 2 .2 hereof. "Event of Default" has the meaning given that term in Section 5. 1 hereof. "FCMSI" means FGIC Capital Market Services, Inc. , a Delaware corporation, or the entity to which its rights and obligations hereunder have been transferred in accordance with Section 4 .2 (ii) or Section 8 . 4 hereof. "Fund" means the Acquisition Fund and the Debt Service Reserve Fund, individually or together as the context shall indicate. ,'GE Capital" means General Electric Capital Corporation, a New York Corporation. "GE Capital Guarantee" means the Amended and Restated Guarantee dated as of April 5, 1994, by the Guarantor, which, among other things, guarantees the payment obligations of FCMSI hereunder. "Guarantee" means the GE Capital Guarantee; provided, however, that if any Replacement Guarantee is delivered pursuant to Section 3. 1 hereof, "Guarantee" shall mean the Replacement Guarantee. "Guarantor" means GE Capital; provided, however, that if a Replacement Guarantee is delivered pursuant to Section 3 . 1 hereof, "Guarantor" shall mean the Replacement Guarantor. References to the Guarantor shall be disregarded in the event that the Guarantee is no longer in effect in accordance with the terms of this Agreement. "Indenture" means the Trust Agreement dated as of March 1, 1992 among the Issuer, the Corporation and the Initial Trustee referenced in the first paragraph of this Agreement, as amended 4 and supplemented through and including the Investment Date. "Interest Payment Date" has the meaning given that term in Exhibit A hereto. "Investment" means the Acquisition Investment, and the Debt Service Reserve Investment, individually or together as the context shall indicate. "Investment Date" has, with respect to each Investment, the meaning given that term in Exhibit A hereto. 3 "Moody's" means Moody' s Investors Service or any successor thereto . "Permitted Withdrawal Purpose" means with respect to the .Acquisition Investment, purposes for which amounts may be withdrawn from the Acquisition Fund pursuant to Section 3 . 03of the Indenture, and with respect to the Debt Service Reserve Investment, purposes for which amounts may be withdrawn from the Debt Service Reserve Fund under Section 5 . 04 of the Indenture and (a) to pay amounts due on the Bonds in the event of a deficiency in the debt service account, (b) to pay amounts due on the Bonds upon acceleration after any event of default, (c) upon a refunding of the Bonds in whole, or to the extent of the applicable pro rata portion if the Bonds are refunded in part, and (d) in the event that the reserve requirement for the Bonds is reduced; provided, however, that (i) withdrawal may also be made upon submission by the Issuer to FCMSI of an opinion of nationally recognized Bond Counsel indicating that withdrawal of all or a portion of the Investment is required to preserve the exclusion from gross income for federal income tax purposes of interest on the Bonds, provided that only such portion of the Investment as is necessary to prevent the Investment Agreement from adversely affecting such tax status may be withdrawn, and (ii) except as provided in (i) , above, under no circumstances may withdrawals be made for the purpose of reinvestment or in connection with the provision of surety bond, letter of credit or similar instrument within the Fund. "Rate of Earnings" has the meaning given that term in Exhibit A hereto . "Replacement Guarantee" means a financial guaranty insurance policy, surety bond, letter of credit or guarantee, which replaces the Guarantee then in effect, issued by an affiliate of GE Capital that is a domestic institution, or by an entity approved by the Issuer and the Bond Insurer, in favor of the Trustee, guaranteeing the payment of amounts payable by FCMSI hereunder, which Guarantee shall either be in the form of the GE Capital Guarantee or in a form approved by the Bond Insurer. "Replacement Guarantor" means the issuer of a Replacement Guarantee "S&P" means Standard & Poor' s Ratings Group or any successor thereto. "Termination Date" has the meaning given that -term in Exhibit A hereto . 4 SECTION 2. INVESTMENT OF FUNDS 2 .1 The Investment. On the terms and subject to the conditions herein set forth, the Trustee shall invest with FCMSI and FCMSI shall accept as an investment from the Trustee amounts as set forth on Exhibit A hereto, which amounts constitute funds received by the Trustee for deposit in (i) the Acquisition Fund pursuant to the Indenture (such amounts herein referred to as the "Acquisition Investment") , and (ii) the Debt Service Reserve Fund pursuant to the Indenture (such amounts herein referred to as the "Debt Service Reserve Investment") . Each Investment or applicable portion thereof shall be payable by the Trustee to FCMSI by wire transfer in immediately available funds in accordance with the payment instructions specified in Exhibit B hereto by the Approved Wire Time on the applicable Investment Date in accordance with Exhibit A and Section 2 .4 hereof. FCMSI may, but shall not be obligated to, accept the Investments described above (or any portion thereof) on any date other than the applicable Investment Date. In the event that any Investment described above (or any portion thereof) is not delivered to FCMSI on the applicable Investment Date and FCMSI does not elect in its sole discretion to accept such Investment (or portion thereof) on a later date, this Agreement shall terminate in respect of any portion of such Investment not so accepted by FCMSI, provided to the extent that it has been negligent, the Trustee shall be liable for any damages, expenses or losses suffered or incurred directly or indirectly by FCMSI or any of its affiliates as a result of such nondelivery. 2 .2 Interest . Interest on each outstanding principal balance of the Investment shall accrue daily as of the close of business each day from and including the date of receipt thereof by FCMSI to but excluding the earlier of the applicable Termination Date and the date remitted to the Trustee as provided herein, at the Rate of Earnings with respect thereto, provided that no interest will accrue on or after such Termination Date. Earnings shall be payable in arrears by FCMSI to the Trustee on each Interest Payment Date. 2. 3 Withdrawal . The Trustee may make withdrawals from each Investment for applicable Permitted Withdrawal Purposes on any Business Day, in each case in such amount as the Trustee shall specify in a written notice in the form of Exhibit C hereto received by FCMSI at least two Business Days ' prior to the date specified for any such withdrawal; provided, however, that (i) the Trustee shall not (x) require payment to be made by FCMSI earlier than three Business Days prior to the date on which such amounts are to be applied pursuant to the terms and conditions of the Indenture or (y) require payment by FCMSI in any amount greater than the amount to be so applied by the Trustee for 5 applicable Permitted Withdrawal Purposes; (ii) the Trustee shall not call for more than four withdrawals per calendar month from any Investment; and (iii) the notice delivered by the Trustee shall specify the amount and date of the withdrawal and shall certify that (x) the withdrawal is being made for Permitted Withdrawal Purposes only, (y) the entire amount being withdrawn will be applied by the Trustee for applicable Permitted Withdrawal Purposes within three Business Days of the withdrawal and (z) all amounts on deposit in the applicable Fund are included in the related Investment or, alternatively, that the total amount being withdrawn hereunder is being drawn only after all other amounts, investments or sources of funding on deposit in the Fund have been drawn upon, redeemed or otherwise utilized in full . If not earlier repaid in full pursuant to this Section or the other provisions hereof, the outstanding principal balance of the Investment, together with all unpaid Earnings thereon, shall be repaid in full on the applicable Termination Date. The principal amount of the Investment may not be withdrawn by the Trustee, and shall not be repayable by FCMSI, for any reason except as expressly provided in this Section 2 .3 or in Sections 4 .2, 4 . 3 or 5.2 hereof. 2 . 4 Wire Transfers . Amounts to be paid hereunder by the Trustee to FCMSI shall be paid by the Approved Wire Time by wire transfer of immediately available funds to FCMSI ' s account in accordance with the instructions set forth in Exhibit B hereto or to such other account pursuant to such other instructions as FCMSI shall so designate, such designation to be made in writing not less than two Business Days prior to the date of transfer. Unless otherwise agreed to by FCMSI, payments to FCMSI to be credited as the Investment hereunder shall be deemed made by the Approved Wire Time only if FCMSI has received, prior to the Approved Wire Time, either (a) confirmation of the amount of the Investment and the federal funds wire transfer number therefor, or (b) receipt of funds in its account designated in Exhibit 3 or otherwise designated as set forth above. Any payments to FCMSI made or deemed made after the Approved Wire Time shall be treated hereunder as if made on the next Business Day. Amounts to be paid hereunder by FCMSI to the Trustee shall be paid by the Approved Wire Time by wire transfer of immediately available funds to the account designated by the Trustee in Exhibit B hereto or to such other account as the Trustee shall so designate, such designation to be made in writing not less than two Business Days prior to the date of transfer. Any fees or costs associated with the transfer of funds hereunder shall be paid by the transferor of the funds . 6 2.5 Rewired Notices. In addition to all Cather notices required hereby, the Trustee or Issuer, as appropriate, shall give FCMSI a written notice of all funds received for deposit in the Fund wh .ch are not included in the Investment, W as to the Issuer- thirty days, prior written notice of any advance or other refunding of the Bonds, (c) a copy of each statement furnished by the Trustee to the Issuer, pertaining to the Fund promptly following the date on which such statement is so furnished, (d) notice of any amendments to the Indenture. 2.6 Unconditional Obligation. The obligation of FCMSI to pay amounts due and payablepursuant to the terns of Sections 2 .2 and 2.3 hereof is unconditional and FGMSI hereby waives any right of setoff or counterclaim with respect thereto. SECTION 3. GUARANTEE 3. 1 The Issuer, in entering into this agreement and in directing the Trustee to enter into this Agreement is and will be relying on the GF Capital Guarantee; provided, however, that, without limiting the terms of the GE Capital Guarantee, the Trustee and the issuer each acknowledges and agrees for purposes of this Agreement and the GF Capital Guarantee that GE Capital will be released from its obligations in respect of this Agreement in the event that: either �i) it delivers a Replacement Guarantee, provided that the claims-paying ability or the long- term, senior unsecured debt: obligations of the Replacement Guarantor shall be rated "Asa" by Moody's and ""AAA" y S&P at the time of replacement, or ( i) this Agreement is transferred in accordance with. Section 4 . (ii) hereof or (iii) a Replacement Guarantee is delivered in accordance with section .2 (iii) hereof. SECTION 4. TERMINATION , 1 Termination. This Agreement shall terminate with respect to each Investment on the applicable Termination Date, unless earlier terminated in accordance with its terms. 4.2 Ratings Downgrade. If (a) the ratings` of the long- term, senior unsecured debt obligations of the Guarantor are, at anv time while the Guarantee is in effect with respect to this "" Agreement rated below -" or "Aa3" by Sip or Moody' s, repeci. ey, or (b) the ratings of the claims paying ability or long-term senior unsecured debt obligations of the Replacement Guarantor are, at any time while a Replacement' Guarantee is in effect with respect to this Agreement rated. below -" or "Aa " by SF or Moody' s, respectively, then, in any such case, FG ?SI will have the right (but not the obligation) , within ten. Business 7 Days of the publication of such rating downgrade, to do any of the following: (i) with the prior written consent of the Bond Insurer, deliver and grant, or cause to be delivered and granted, to the Collateral Agent on behalf of the Trustee a first and prior security interest perfected under the applicable Uniform Commercial Code or other applicable law, in and to Collateral, together with an opinion of counsel as to the perfection of such security interest under applicable law; or (ii) transfer this Agreement and its rights and obligations hereunder to an entity satisfactory to the Bond Insurer whose long-term, senior unsecured debt obligations, or whose guarantor's long-term, senior unsecured debt obligations or claims paying ability, are rated at least "AA-" and "Aa3" by S&P and Moody' s, respectively; or (iii) deliver a Replacement Guarantee of a Replacement Guarantor having long-term, senior unsecured debt obligations or claims paying ability rated at least "AA-" and "Aa3" by S&P and Moody' s, respectively. If FCMSI does not satisfy the requirements of clause (i) , (ii) or (iii) above within such ten Business Day period, FCMSI shall give notice to that effect to the Trustee and the Bond Insurer and the Trustee may, and shall at the direction of the Bond Insurer, withdraw the entire balance of the Investment then on deposit, together with all unpaid Earnings thereon, by giving written notice of such election to FCMSI (such notice shall specify the withdrawal date which shall be not less than two Business Days nor more than ten Business Days after the date such notice is given) . Upon any such withdrawal, this Agreement shall terminate. FCMSI shall provide written notice of any rating downgrade within two Business Days to the Trustee, the Bond Insurer and the Issuer. 4. 3 Provisions with Resect to Collateral . In the event that FCMSI elects to deliver Collateral pursuant to Section 4 .2 (il, hereof, the provisions of this Section 4 .3 shall apply. (a) Collateral Valualtion, The Collateral Agent shall, promptly following the opening of business on each Collateral. Valuation Date determine the aggregate Collateral Value of Collateral held by the Collateral Agent pursuant to this Section 4 . 33, and shall not L notify and he 'Trustee by telephone on such. FCMSI tTh date (such notice to be confirmed in writing) of such amount and provide FCMSI and the Trustee any information that FCMSI and the 8 Trustee may reasonably request regarding the Collateral Agent' s determination thereof. If such amount is less than the Collateral Requirement Level on such Date, FCMSI shall, before the close of business on the second Business Day following the date of such determination, deliver to the Collateral Agent additional Collateral having an aggregate Collateral Value on such day not less than the amount of such deficiency. (b) Withdrawal of Collateral. FCMSI shall, by giving telephonic notice (such notice to be confirmed in writing) to the Collateral Agent, be entitled to withdraw excess Collateral on any Collateral Valuation Date to the extent that the aggregate Collateral Value of Collateral held by the Collateral Agent pursuant to this Section 4 . 3 exceeds the Collateral Requirement Level on such Collateral Valuation Date. Such notice shall specify the Collateral to be withdrawn. In addition, FCMSI shall be entitled to withdraw all Collateral on any Business Day by delivering written notice to the Collateral Agent (together with executed copies of all pertinent documents and agreements relating thereto) to the effect that either (i) the applicable ratings issued by S&P and Moody' s in respect of the Guarantor have been reinstated or raised to or above "AA-" and "Aa3", respectively; or (ii) FCMSI has paid to the Trustee the balance of the Investment, together with all Earnings thereon; or (iii) FCMSI has satisfied the requirements of either Section 4 .2 (ii) or (iii) hereof. such notice shall specify the Collateral to be withdrawn. The Collateral Agent shall deliver to FCMSI the Collateral so specified as soon as practicable following receipt of such notice, but in any event no later than the close of business on the second Business Day following receipt of such notice and such documents and agreements . (c) Substitution of Collateral . FCMSI shall, by giving telephonic notice (such notice to be confirmed in writing) to the Collateral Agent, be entitled on any Business Day to substitute for any Collateral other Collateral having the same or a greater Collateral Value at the time of substitution. Such notice shall specify the Collateral to be withdrawn and the substitute Collateral to be delivered to the Collateral Agent. The Collateral Agent shall as soon as practicable following receipt of such notice, but in any event no later than the close of business on the second Business Day following receipt of such notice, deliver to FCMSI the collateral so specified for withdrawal against delivery by FCMSI of such substitute Collateral . (d) Late Delivery, The Collateral Value from day to day of any Collateral specified for withdrawal which is not delivered by the Collateral Agent to FCMSI on a tamely basis in accordance with Section 4 .3 (b) or (c) hereof shall bear interest from the 9 date delivery was due to be made to the date of actual delivery at the prevailing Federal Funds rate as published in The Wall Street Journal, changing as such published rate changes, such interest to be paid by the Collateral Agent from its own funds and not from the Collateral or funds held in trust on the date such Collateral is ultimately delivered by the Collateral Agent . (e) Registration and Repled ge of Collateral. Except after the occurrence and during the continuation of an Event of Default, the Collateral Agent may not sell, pledge or otherwise dispose of any Collateral or any interest therein except for redelivery of Collateral to FCMSI or the pledgor thereof. (f) Remedies . If any Event of Default shall occur and be continuing, the Collateral Agent at the direction of the Trustee as directed by the Issuer may exercise any of the rights and remedies of a secured party with respect to the Collateral, including any such rights and remedies under the applicable Uniform Commercial Code, and in addition the Collateral Agent at the direction of the Trustee, as directed by the Issuer, may, to the extent permitted by applicable law, without demand of performance and without notice to FCMSI except as provided below, terminate this Agreement and sell the Collateral or any part thereof, in one lot or in separate parcels, for cash or on credit or for future delivery, at the option and at the sole discretion of the Collateral Agent at the direction of the Trustee, as directed by the Issuer, at any public or private sale, and at such price or prices as the Collateral Agent at the direction of the Trustee, at the direction of the Issuer, may deem appropriate, upon two Business Days ' prior notice to FCMSI of its intention to sell and of the time and place of sale. If the purchaser fails to take up and pay for the Collateral so sold, such Collateral may again be similarly sold. The Trustee or the Collateral Agent may be the purchaser of any or all of the Collateral sold and thereafter shall hold such Collateral free from any right of redemption, stay or appraisal; provided, however, that in the sale of securities neither the Trustee nor the Collateral Agent shall be entitled to purchase any of the Collateral at any private sale for less than the market value of such securities. (g) 1Ap plication of Proceeds . The proceeds of any sale of all or any part of the Collateral pursuant to this Section 4 . 3 shall be applied by the Collateral Agent first to all reasonable expenses and fees (including, without limitation, reasonable fees and expenses of legal counsel of the Trustee and Issuer) or taxes imposed or incurred, after the occurrence of an Event of Default, in connection with (i) the custody, -care, sale or collection of, or realization upon, any of the Collateral or (ii) the preservation or enforcement of any rights of the Collateral Agent 10 hereunder and second to the payment of the obligations of FCMSI hereunder; FCMSI shall remain ,liable for any such obligations remaining unpaid from the foregoing proceeds and shall be entitled to any surplus after any application of such proceeds. (h) Other Regkirements. ,All Collateral delivered to the Collateral Agent hereunder shall be segregated b the Collateral Agent from <other assets of the Collateral Agent, the Issuer or any other person. The Collateral .gent shall prepare and deliver to FCMSI by the 20th calendar day of each month a report specifying the identity and location of all Collateral as of the end of the month preceding such report. Provided that an Event of Default shell not have occurred and be continuing, all payments of interest or other amounts payable on any Collateral delivered to the Collateral Agent hereunder shallbe remitted by, the Collateral Agent to FCMSI on the date of receipt thereof if such payments are received by the Collateral Agent by 1:00 p.m. {New York, time) ) or on the ' Business Day following ;the date: of receipt if such payments are received by the Collateral Agent atter l.-OO l.-Op.m. few York time) ) . ,All fees and expenses or the Collateral Agent shall be paid. by FCMSI. SECTION 5. DEFAULT' 5.1 Events of Default, The following events shall constitute events of default under this Agreement (each an "Event of Default") .- (a) efa alt") ;{a) A failure by FCMSI and. the Guarantor on behalf of FCMSI to male any payment of the Investment or Earnings when due pursuant to the provisions of this Agreement, ' or to deposit Collateral as required by Section 4.3 (a) , and the continuation of any` such failure for one Business Icy or more after the Trustee gives FCMSI and the Guarantor written notice thereof, (b) FCMSI or the Guarantor commences e case in bankruptcy relating to it, is adjudicated an insolvent or bankrupt, petitions or applies for the appointment of any receiver or trustee for itself or any substantial part of its property or initiates any proceeding' relating to it seeking a court order for reorganization, arrangement, conservation, liquidation, or dissolution under applicable bankruptcy or similar applicable ' laws; or, any such proceeding is initiated against FCMSI or the Guarantor and FCMSI or the Guarantor, as the: case may be, indicates in writing its consent thereto or such proceeding is not dismissed within 60 days or such an girder is 'entered against FCMSI or Guarantor. (c) A failure by FCMSI to perform or observe any of Lts material obligations under or with respect to this Agreement 11 (other than these described in Section 5. 1 (a) hereof) and the continuation of such failure for ten Business Days or more after written notice thereof is given by the Trustee to FCMSI . (d) Except as permitted by the terms of Section 3 hereof or the terms of the Guarantee, the expiration, termination or repudiation of the Guarantee in respect of this Agreement, or any other event which causes the Guarantee to cease to be in full force and effect in respect of this Agreement, or any action by the Guarantor which challenges the validity of the Guarantee in respect of this Agreement, unless this Agreement has been transferred in accordance with Section 4 .2 hereof. (e) Any representation or warranty under Section 6.2 is false in any material respect when made. 5 .2 Rights and Obligations of Parties upon an Event of Default. Upon the occurrence of an Event of Default, the Trustee shall have the right to and shall, at the Band Insurer' s direction, declare the entire balance of the Investment and all accrued and unpaid Earnings thereon to be due and payable immediately and to withdraw such entire balance and unpaid Earnings. If, as a result of the occurrence of an Event of Default, the entire balance of the Investment and all accrued and unpaid Earnings are so withdrawn by the Trustee, this Agreement shall be terminated on the date of such withdrawal as if such date were the Termination Date. Upon the occurrence of an Event of Default specified in Section 5 . 1 (b) hereof, the Investment and all accrued and unpaid Earnings shall become due and payable immediately without notice as if the date of such occurrence were the Termination Date. SECTION 6. REPRESENTATIONS AND WARRANTIES 6. 1 Trustee and Issuer Representations and Warranties . The Trustee and the Issuer each represents and warrants that (i) it understands that neither FCMSI nor the Guarantor nor any person representing FCMSI or the Guarantor has made any representation to it with respect to FCMSI, the Guarantor or the offering or sale of this Agreement or the Guarantee other than as expressly set forth herein or in the Guarantee; (ii) the legend set forth in Section 8.11 hereof has been called to its attention; (iii) it is duly authorized to enter into this Agreement and the transactions contemplated hereby; (iv) this Agreement constitutes a legal, valid and binding obligation enforceable against such party in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting creditors ' rights generally, and subject further as to enforceability, to general principles of equity; and (v) the execution, delivery and performance of this Agreement by it does not and will not result 12 in a breach or violation of, or cause a default under, its charter or enabling legislation or by-laws or any provision of any law, regulation, order, license, decree, judgment or agreement applicable to or binding upon it or its assets. The Issuer represents and warrants to FCMSI and the Guarantor (i) that it has had access to such financial and other information concerning FCMSI and the Guarantor as it has deemed necessary in connection with its decision to make the Investment hereunder and (ii) any fees paid by FCMSI in connection with the provision of this Investment Agreement have been paid on the Issuer's behalf for services rendered to the Issuer or its agents. The Trustee represents and warrants to FCMSI and the Guarantor that (i) all moneys that the Trustee invests with FCMSI pursuant to this Agreement shall be derived from funds and accounts established pursuant to the Indenture; and (ii) it has been directed by the Issuer to enter into this Agreement and is authorized by the terms of the Indenture to make all investments as set forth in this Agreement. 6.2 FCMSI Representations and Warranties . FCMSI represents and warrants to the Trustee and the Issuer that: (i) it is duly authorized to enter into this Agreement and the transactions contemplated hereby; (ii) this Agreement constitutes a legal, valid and binding obligation of FCMSI enforceable against FCMSI in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting creditors ' rights generally, and subject further as to enforceability, to general principles of equity; and (iii) the execution, delivery and performance of this Agreement by FCMSI does not and will not result in a breach or violation of, or cause a default under, its charter or by-laws or any provision of any law, regulation, order, license, decree, judgment or agreement applicable to or binding upon FCMSI or its assets. SECTION 7. LIMITATION ON FCMSI 'S OBLIGATIONS In performing its obligations hereunder, neither FCMSI nor any of its directors, officers, incorporators, employees, agents, shareholders, representatives or affiliates make any representation or warranty with respect to, nor shall any of them be liable or responsible for, (i) the payment of any amounts owing on or with respect to the Bonds; (ii) the use or application by the Trustee of any moneys payable to the Trustee hereunder; (iii) any acts or omissions of the Trustee, the Issuer, or the parties to the Indenture or any other agreement or instrument with respect to the Bonds other than this Agreement as to FCMSI; (iv) the validity or enforceability of the Bonds or the Indenture or any other agreement or instrument with respect tc the Bonds other than this Agreement as to FCMSI; (v) the Trustee' s or the Issuer' s performance of its obligations under 13 this Agreement, the Bonds, or the Indenture or any other agreement or instrument with respect to the Bonds; (vi) the effect of the negotiation, delivery and performance by FCMSI of this Agreement on the tax-exempt status of the Bonds; and (vii) any charges, impositions or penalties arising from the performance of its obligations in accordance with the terms of this Agreement. Without limiting the foregoing, regardless of whether FCMSI has reviewed the Indenture or is generally familiar with the terms of indentures or bond resolutions of a similar type, F(--MSI shall have no duty to comply with the terms of the Indenture or to ascertain whether the Trustee or the Issuer is in compliance therewith. The Issuer recognizes that FCMSI and the Guarantor for their affiliates) may have other business relationships with the Issuer and with other entities or persons party to other agreements or instruments with respect to the Bonds . For purposes of this Agreement, it shall not be necessary for FCMSI to segregate or otherwise separately identify or account for the portion of invested funds and FCMSI may aggregate all the invested funds for accounting purposes; provided, however, that FCMSI shall be required to give reports as required by Section 2 .5 hereof. The Trustee shall maintain complete and accurate records identifying the principal amount of the Investment held by the Trustee for or credited to the applicable funds and accounts under the Indenture. SECTION 8. MISCELLANEOUS 8 . 1 Information Regarding FCMSI and the Guarantor. The Issuer hereby agrees that it will not, nor will it permit any other person to, include in any official statement, offering circular, information memorandum or other disclosure document prepared with respect to the Bonds any information relating to FCMSI or the Guarantor, including the name of FCMSI or the Guarantor, without FCMSI ' s prior written consent. 8 .2 No Waiver; Amendment. No failure or delay on the part of FCMSI or the Trustee in exercising any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other right or remedy. The rights and remedies of FCMSI or the Trustee hereunder are cumulative and are not exclusive of any rights or remedies provided by law or equity or in any other contract between the Trustee and FCMSI or the Guarantor. None of the terms or provisions of this Agreement or the Guarantee, as it applies to this Agreement, may be waived modified or amended, except in writing duly executed by FCMSI, the Trustee, the Bond Insurer, and the Issuer. 8 .3 Survival . All warranties and representations made by the Trustee, the Issuer or FCMSI in this Agreement or in any of 14 the instruments or documents delivered pursuant to this Agreement regardless of any investigation made shall be considered to have been relied upon by the other parties hereto and shall survive the delivery of any instruments or documents . 8 .4 Successors and Assigns. This Agreement and all obligations and rights arising hereunder shall inure to the benefit of and be binding upon the parties hereto and their respective successors, assigns and beneficiaries . Notwithstanding the foregoing, this Agreement, and the obligations and rights arising under this Agreement or any part hereof, may not be sold, pledged or assigned or otherwise transferred by FCMSI, the Trustee or the Issuer without the prior written consent of the other parties hereto and the Bond Insurer and any such attempted sale, pledge, assignment or transfer shall be void ab initio; provided, however, that FCMSI may transfer this Agreement or any of its rights, interests or obligations hereunder (i) as provided in Section 4 -2 (ii) hereof or (ii) to any affiliate of General Electric Company if from and after such transfer either (x) the obligations of the transferee hereunder shall be guaranteed by the Guarantor under the same terms or terms at least as favorable to the Trustee and the Bond Insurer as the terms of the Guarantee, or (y) it delivers a Replacement Guarantee meeting the requirements set forth in Section 3 . 1 (i) ; provided further, that any successor to the Trustee as trustee under the Indenture shall be considered a successor in interest to the Trustee with respect to this Agreement without the necessity of obtaining the prior written consent of FCMSI; and provided further that this Section shall not affect any pledge or grant of any Fund to the Trustee on behalf of Bondholders under the Indenture. 8 . 5 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in such State. 8 . 6 Severability of Provisions . If any one or more of the provisions contained in this Agreement is declared invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 8 . 71 Counterparts . This Agreement may be executed in several counterparts and, as so executed, shall constitute one agreement binding upon the parties hereto. 8 . 8 Integration of Terms . This Agreement contains the entire agreement among the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with 15 respect thereto. In the event of any discrepancy between terms in Exhibit A and terms appearing elsewhere in this Agreement, the terms of Exhibit A shall be deemed controlling. 8 . 9 Interpretation. The headings of the articles and sections hereof are for convenience of reference only and shall not affect the meaning or construction of any provision hereof. 8 . 10 Notices . All notices, requests, demands and other 'communications hereunder shall be in writing and shall be deemed to have been duly given upon delivery if delivered by hand (against receipt) , or as of the date of delivery shown on the receipt if mailed at a post office in the United States by registered or certified mail, postage prepaid, return receipt requested, or as of the date of acknowledgment if transmitted by facsimile transmission or other telecommunication equipment, in any case addressed to the attention of any of the persons listed on Exhibit B hereto, or at such other address or to the attention of such other persons as such party shall have designated to the other parties hereto in a written notice. Any notices given by facsimile transmission or other telecommunication equipment shall be orally confirmed by the sender immediately after such notice is transmitted. 8 . 11 Legend. NEITHER THIS AGREEMENT NOR THE GUARANTEE HAVE BEEN OR WILL BE REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") , OR THE SECURITIES LAWS OF ANY STATE OR TERRITORY, AND, EXCEPT IN CONNECTION WITH AN ASSIGNMENT HEREOF TO THE GUARANTOR UPON A PAYMENT BY THE GUARANTOR UNDER THE GUARANTEE, THIS AGREEMENT AND THE GUARANTEE MAY BE SOLD, TRANSFERRED OR ASSIGNED ONLY AS PERMITTED HEREUNDER AND ONLY IF REGISTERED PURSUANT TO THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS, OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE. BY ITS EXECUTION OF THIS AGREEMENT, THE TRUSTEE AND THE ISSUER EACH AGREES THAT THIS AGREEMENT AND THE GUARANTEE ARE BEING ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, THE PUBLIC DISTRIBUTION THEREOF. FCMSI HEREBY CALLS THE ATTENTION OF THE ISSUER AND THE TRUSTEE TO THE LEGEND SET FORTH IN THIS SECTION. 8 . 12 Ratings . All references to ratings of Moody's or S&P herein shall refer to the actual referenced ratings or, if the applicable ratings structure has been revised, to the then current equivalent thereof at the time the applicable determination is made . 8 . 13 No Third Partv Beneficiaries . Nothing expressed or implied herein is intended or shall be construed to confer upon any person (other than the parties hereto and the Bond Insurer and their successors and permitted assigns) , any right, remedy or 16 claim by reason of this Agreement or any term hereof, and all terms contained herein shall be for the sole and exclusive benefit of the parties hereto and the Bond Insurer and their successors and permitted assigns. 8 . 14 Concerning the Trustee,. The Trustee is entering into this Agreement solely in its capacity as Trustee under the Indenture and not in its individual or personal capacity, as directed by the Issuer in accordance with the provisions of the Indenture. The Trustee may consult with counsel with respect to any question relating to its duties or responsibilities hereunder and shall not be liable for any action taken or not taken in good faith and in reliance upon such advice or opinion of counsel. The Trustee may act through its officers, agents, employees and attorneys. The Trustee shall be entitled to rely conclusively upon any certificate, notice, order or other document delivered to it hereunder by FCMSI as provided herein as to the truth, accuracy and validity thereof. [THIS SPACE INTENTIONALLY LEFT BLANK) 17 The Trustee shall not be liable for any fees of expenses of the Collateral Agent or for the acts or omissions of the Collateral Agent . IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written. FDIC CAPITAL ET , EIC INC. By: 'Tit' ; Vice`f President FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as trustee By; I Tit e; R, €rii `v Alltt Vice CITY OF RJZDLANDS, MLIFORNIA By Title; Swen arson, Mayor ATTEST: j`.\^rc\556a.dac Lt yz r ity Clerk Ced a s 1 The Trustee shall not be liable for any fees of expenses of the Collateral Agent or for the acts or omissions of the Collateral Agent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written. FGIC CAPITAL MARKET SERVICES, INC. By: Title: Vice President FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as trustee By: Title: CITY OF DLANDSP";CALIFORNIA Title: Swen Larson, Mayor ATTEST: j:\mrc\556a.doc L(5y�— Poyzer erk 7ri EXHIBIT A Principal Terms I . Acquisition Investment 1 . Investment Amount: $3, 326, 336. 2 . Investment Date: June 18, 1997 . 3 . Rate of Earnings : 6. 40% per annum, calculated on the basis of a 360-day year composed of twelve 30-day months . 4 . Interest Payment Date: The Business Day preceding each March 11 and September 11 commencing on the Business Day preceding September 1, 1997, and on the Termination Date. S. Termination Date: March 1, 2000, or if such day is not a Business Day, the next succeeding Business Day. II . Debt Service Reserve Investment 1 . Investment Amount : $943, 640 . Subsequent to a withdrawal from the Debt Service Reserve Investment, additions to the Debt Service Reserve Investment shall be permitted in an aggregate amount not exceeding the amount of the withdrawal which is required to be deposited to restore the Debt Service Reserve Fund as required by the Loan and Trust Agreement; provided, however, that (a) the aggregate amount of the Debt Service Reserve Investment on deposit with " MSI shall not exceed $943, 640 at any time; (b) the Trustee shall not make any additions to the Debt Service Reserve Investment with FCMSI in amounts less than $5, 000; (c) not more than one such addition to the Debt Service Reserve Investment shall be permitted per calendar month; and (d) the Trustee shall give FCMSI written notice at least two Business Days prior to making any such addition, which notice shall specify the amount of such addition and shall indicate that it is for deposit in the Debt Service Reserve Investment. The Trustee agrees, to the extent permitted by the terms set forth above and the terms of this Agreement, to promptly deposit all amounts in the Debt Service Reserve Fund not being utilized within two Business Days for Permitted Withdrawal Purposes in the Debt Service Reserve Investment . 2 . Investment Date: June 18, 1997 with respect to the initial Investment and any date specified in a notice to FCMSI, described in item 1 . (d) above, with respect to an addition to the Investment. 3 . Rate of Earnings : 6 . 55% per annum., calculated on the basis of a 360-day year composed of twelve 30-day months . 4 . Interest Payment Date: The Business Day preceding each March 1, and September 1, commencing on the Business Day preceding September 1, 1997, and on the Termination Date. S . Termination Date: March 1, 2007, or if such day is not a Business Day, the next succeeding Business Day. [THE FOLLOWING PROVISIONS APPLY TO EACH INVESTMENT HEREUNDER] 6. Collateral Requirement Level: That percentage of the Investment secured thereby as is required to meet the guidelines of Moody' s and S&P for ratings of Aa3/AA- or 104% of Collateral described in item W of the definition thereof and 105% of Collateral described in item (ii) of the definition thereof. . 7 . Reporting: FCMSI shall send or cause to be sent monthly reports, no later than the 20th day of each month, to the Trustee, the Issuer and, upon request, the Bond Insurer, setting forth the amount of each Investment, deposits and withdrawals with respect thereto, and interest accrued and paid thereon. FCMSI shall also include in this monthly report a statement that annual reports of the Guarantor are filed with the Securities Exchange Commission (the "SEC") and may be obtained from the SEC upon request; provided that if such filings with the SEC are no longer made by the Guarantor, FCMSI shall provide, on an annual basis, a copy of the audited financial statements of the Guarantor for its most recent fiscal year. FCMSI will give notice of any downgrade of the ratings of the Guarantor by S&P to the Trustee and the Issuer. 8 . Payment Convention: Except as otherwise provided herein, any payment due under this Agreement on a day that is not a Business Day shall be due and payable on the next succeeding Business Day 9 . Business Day: The term "Business Day", as used in the Investment Agreement, shall mean any day which is not a Saturday or a Sunday or a day on which banks located in the City of New York, Los Angeles, California, or St. Paul, Minnesota are authorized or required by law or executive order to close. EXHIBIT B Notices and communications to the parties should be directed to: If to FCMSI FDIC Capital Market Services, Inc. 115 Broadway New York, New York 10006 Attention: William McPartland Operations Manager Telephone No. : (212) 312-3000 Telecopier No. : (212) 312-3421 If to the Trustee: First Trust of California, National Association SSO South Hope Street, Suite SOO Los Angeles, California 90071 Attention: Rob Schneider Telephone No. : (213) 533-8721 Telecopier No. : (213) 533-8729 If to the Issuer: City of Redlands 35 Cajon Street Redlands, California 92373 Attention: Finance Director Telephone No. : (909) 798-7543 Telecopier No . : (909) 798-7602 If to the Bond Insurer: AMBAC Indemnity Corporation One State Street Plaza, 17tx" Floor New York, New York 10004 Attention: David MacDougall Telephone No. : (212) 208-3396 Telecopier No. : (212) 480-3682 Wire Transfer Information - unless otherwise designated as provided herein, wire instructions and transfers shall be made as follows : If to FCMSI: FEDERAL FUNDS WIRE TRANSFER TO: Bankers Trust Company, New York, New York ABA NUMBER: 021001033 FOR: GE CAPITAL CORP. DDA ACCOUNT NUMBER: 50001677 REFERENCE: FDIC CMSI City of Redlands, CA [Trustee to indicate applicable Investment] If to the Trustee: FEDERAL FUNDS WIRE TRANSFER TO: First Bank, N.A. Minneapolis, MN ABA NUMBER: 091000022 FFCr: First Trust, N.A. A/C Number: 180121167365 TSU: SPS 47300050 ATTN: Investment Agreement Desk (612) 244-0580 EXHIBIT C FORM OF DRAW REQUEST (FOR WITHDRAWALS THAT ARE NOT SCHEDULED IN THE INVESTMENT AGREEMENT) [Letterhead of Trustee] FDIC Capital Market Services, Inc. 115 Broadway New York, New York 10006 Attention: Bill McPartland, Operations Manager Fax: 1-212-312-3460 Phone: 1-212-312-3469 Re: Investment Agreement, dated as of June 18, 1997, by and among the City of Redlands, California, First Trust of California, National Association, as trustee, and FGIC Capital Market Services, Inc. The undersigned hereby requests a withdrawal pursuant to the above-referenced Investment Agreement as set forth below: INVESTMENT/FUND TO BE WITHDRAWN: REQUEST DATE: NOTICE DAYS: AMOUNT: PURPOSE OF WITHDRAWAL: Payment instruction, if different than those contained in the Investment Agreement: Telephone Number of Trustee: The above request has been reviewed against the terms contained in the above-referenced Investment Agreement, including the applicable notice period for withdrawals, and is in accordance with the terms and conditions "-.--hereof. THE CERTIFICATIONS REQUIRED BY SECTION 2 . 3 OF SAID INVESTMENT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE. Name: Title: Date Please confirm receipt of this (fax] by FDIC Capital Market Services, Inc. at telephone number 1-212-312-3469. .MENDED _ZLIND RESTATED GUAFCTuNTEE This AMENDED AND RES' -A-TED GU.A�tANTEZ, dated as of April- 5, CAPITAL CORPORATION, 1994 (the "Guarantee") by GENERAL ELECTRIC -C a New York Cornorat i on the "Guarantor" ` , in favor of each party ,a "Party") entitled to ;Davment under any Transaction Document !as hereinafter defined) with -GIC Capital. Market Services, Inc. , a Delaware corporation (the "Company") amends and restates the ,guarantee by the Guarantor of the Company' s obligations, dated as of October 15, 1993 (the "Original Guarantee") ; provided, however, that the Original Guarantee shall remain in full force and effect with respect to Transaction Documents entered into pr1or to the date hereof. The term "Transaction Document" shall mean (i) any municJ-pal re_­1,estment contract, guaranteed investment contract- or investment agreement and " i any other aareement specifically identified in writing by the Guarantor to I- i e Included within this Definition, in each case entered into by a '-�arty with the Company on or after the date hereof (subject to t - the orovisions of Section 11 hereof) . 1 . Guarantee. For -:aiue received, and to induce Parties and related entities to enter into Transaction Documents with the Company, the Guarantor unconditionally and irrevocably guarantees to each Party, its successors, endorsees and permitted assigns, subject to the terms and conditions hereof, the payment of all present and future monetary obligations and liabilities of all kinds of the Company to such Party under any Transaction Document, whether due or to become due, secured or unsecured, absolute or contingent, point or several (the "Obligations") . Upon the Company' s failure to pay any Obligation when due under a Transaction Document and upon receipt by the Guarantor of written notice in accordance with Section 7 of this Guarantee of such failure from the applicable Party prior to 10: 30 A.M. New York time on any Business Day, the Guarantor shall make payment to such Party by 2 : 30 P.M. New York time on such Business Day. If upon such failure such notice is received by the Guarantor after 10 : 30 A.M. New York time on any Business Day, payment shall be made by 2:30 P.M. New York time on the next succeeding Business Day. The term "Business Day" shall mean any day which is not a Saturday or Sunday or a day on which banks located in the City of New York are required by 1-aw or executive order to close. 2. Nature of Guarantee. This Guarantee is a guarantee of payment and not of collection. No Party shall be obligated to file any claim relating to the obligations owing to it if the Company becomes subject to a bankruptcy, reorganization, or similar proceeding, and the failure of any Party to file a claim shall not affect the Guarantor' s obligations hereunder. if any -1- payment to any Party on account of any Obligation must be returned for any reason whatsoever, the Guarantor shall remain 4 ''-able hereunder :or such. Obligation as f such payment 'sad not been made. The Guarantor ' s cb�.iaations hereunder shall not be affected by the genuineness, validity, regularity or enforcement of the Obligations, or by any substitution, release or exchange of anv other auarantee of or security for any of the Obligations, or by any other circumstance relating to the Obligations which might otherwise constitute a defense to this Guarantee or a legal or equitable discharge of a surety or guarantor. 3 . Consents, Waivers and Renewals . The Guarantor agrees that a Party may at any time and from time to time, either before or after the maturity of any of the Obligations, without notice to or further consent of the Guarantor, extend the time ime of payment of or renew any of the obligations owing to it, and may also maze any agreement with the Company or with any other party to any Transaction Document or person liable on any Obligation, or interested therein, for the extension, renewal, payment, compromise, discharge or release of any of the Obligations, in whole or in part, or for any modification of the terms thereof or of any agreement between such Party and the Company or any such other party or person, without impairing or affecting this Guarantee. The Guarantor agrees that a Party may resort to the Guarantor for payment of any of the Obligations, whether or not the Party has proceeded against any other obligor principally or secondarily obligated for any Obligation. The Guarantor waives all notices that may be required by law, except as provided in Section 1 hereof. 4. Expenses . The Guarantor agrees to pay on demand all reasonable out-of-pocket expenses (including the reasonable fees and expenses of counsel) incurred in the enforcement or protection of the rights of a Party hereunder but only if and to the extent (i) they are incurred after demand for payment under this Guarantee has been made by such Party and not timely honored by the Guarantor and (ii) such Party is the prevailing party. 5. Subrogation. Upon payment of all the Obligations owing to any Party, the Guarantor shall be subrogated to the rights of such Party against the Company, and such Party agrees to take at the Guarantor' s expense such steps as the Guarantor may reasonably request to implement such subrogation. The Guarantor will not exercise or enforce any rights which it may acquire by virtue of subrogation unless and until the full amount owing to a Party regarding the Obligation with respect to such Party has been paid. The payment by the Guarantor of any amount pursuant to this guarantee shall not entitle the Guarantor to any right, title or interest (whether by way of subrogation or otherwise) in and to any of such Obligation or any proceeds thereof or any security therefor unless and until the full amount owing to said Party has been paid. 6. Beneficiaries . The Guarantor hereby acknowledges that the Parties are the intended beneficiaries of this Guarantee and may enforce this Guarantee directly against the Guarantor. 7 . Notices . Any notice or other communication required or permitted hereunder shall be given to: the Guarantor at : 260 Long Ridge Road Stamford, Connecticut 06927 Attention: senior Vice President - Corporate Treasury and Global Funding Operation - 3 Facsimile No . : (4203-) -57-4975 (ii) a Party at its address specified in the applicable Transaction Document, and shall be in writing and delivered by hand, registered or certified U.S. mail (postage prepaid and return receipt requested) , facsimile transmission (promptly confirmed by other permitted written means) , or overnight courier service. All notices and other communications shall be deemed given on the date of receipt if hand delivered, upon acknowledgment of receipt if sent by facsimile transmission or two Business Days after being sent by registered or certified U.S . mail or overnight courier service. A party may change the address to which notices are to be sent to it at any time by delivery of written notice of such change to the other party hereto . 8. Governing Law. This Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed within such State. 9. Amendment. The terms of this Guarantee as they apply in respect of any particular Transaction Document may be varied only by means of a written amendment signed by the Guarantor and each Party under such Transaction Document. 10. Assignment. No Party may assign its rights, interests or obligations hereunder to any other person without the prior written consent of the Guarantor; provided, however, that a Party may assign its rights, interests and obligations hereunder in respect of any Transaction Document to any assignee to which it has permissibly transferred its rights, interests and obligations under, and in accordance with the express terms of, such Transaction Document . The Guarantor may assign this Guarantee, in whole or in part, to any successor in merger or any wholly owned subsidiary if at --he -_';-me of such assignment the ratinas of Moody' s Investors Service and Standard & Poor' s Ratings Group applicable to such ass:, nee are the same as or nigher than those appi-icable to the Guarantor. 11 Termination. The Guarantor ' s obligations and liabilities hereunder in respect of any Transaction Document may be terminated as provided in such Transaction Document. This Guarantee may be revoked by the Guarantor at any time by means of notice given to each of Moody' s Investors Service and Standard and Poor' s Ratings Group; provided, however, that, such revocation shall not limit or terminate this Guarantee in respect of any particular 'Transaction Doc�L,_rnenz entered into prior to the time such notice or revocation is so given, unless otherwise aareed to in writing by eacParty to such Transaction Document. 12. No Set-Off . 33y acceptance of this Guarantee, each Party Shail be deemed to have waived any right to set-off, combine, consolidate, or otherwise appropriate and apply, any indebtedness or other obligation or liability at any time owing by such Party to the Guarantor against, or on account of, any obligations or liabilities of the Guarantor under this Guarantee. The Guarantor hereby waives any right to set-off, combine, consolidate or otherwise appropriate and apply, any indebtedness or other obligation or liability at any time owing by it under this Guarantee to any Party against, or on account of, any obligations or liability of such Party to the Guarantor. This instrument is executed as of the date first above written. GENERAL EE. CITRIC CAPITAL CORPORATION By: Nam Jeffrey S. Werner Title: Senior Vice President - Corporate Treasury and Global Fund Operations AGS06a -4- Investment Contract Provider Certificate The undersigned officer of FDIC Capital Market Services, Inc. (the "Provider") , hereby certifies that : (a) No brokerage commissions or other fees were paid or are expected to be paid to any person by the Provider in connection with the Investment Agreement among City of Redlands, California, (the "Issuer") and First Trust of California, National Association and the Provider, dated as of June 1€, 1997 (the "Agreement") , except as listed below, which amounts shall be paid to each recipient on behalf of the Issuer; Recipient Amount, Fund Services Associates $3, 990 . 00 (Acquisition) Fund Services Associates $2, 494 . 74 (Reserve) (b) The interest rate on the Agreement is not less than the interest rate then available from the Provider at the time of its bid for the Agreement on reasonably comparable contracts, if any, offered to other persons from a source of funds ether than gross proceeds of an issue of tax--exempt bonds, assuming equal brokerage commissions and fees. (c) The Agreement was entered into between the Trustee, the Provider and the owner in an arm' s-length transaction, {d} I am an officer of the Provider and am duly authorized to execute and deliver this certificate for the Provider. I understand that the certifications contained herein will be relied upon by Stradling, Yocca, Carlson & Rauth, as bond counsel, in rendering certain of its opinions in connection with the `1SSuancE3 the Bonds. � President Dated: June 18, 1997 556&.dam