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Home My WebLink About11442RESOLUTION NO. 11442 A RESOLUTION APPROVING AND ACCEPTING ASSURED GUARANTY CORP.'S COMMITMENT TO ISSUE RESERVE FUND INSURANCE POLICY AND COMMITMENT TO ISSUE FINANCIAL GUARANTY INSURANCE POLICY RELATING TO THE CITY OF PUEBLO, COLORADO MUNICIPAL BUILD- ING CORPORATION, CERTIFICATES OF PARTICIPATION, SERIES 2008 (POLICE COMPLEX PROJECT) AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 Assured Guaranty Corp.'s Commitment To Issue Financial Guaranty Insurance Policy and Commitment To Issue Financial Guaranty Insurance Policy ( "Insurance Commitments ") relating to the City of Pueblo, Colorado Municipal Building Corporation, Certificates of Participation, Series 2008 (Police Complex), in substantially the forms presented at this meeting of the City Council and in substantially the same content, having been approved as to form by the City Attorney, are hereby approved, authorized and confirmed. SECTION 2 The President or Vice President of the City Council is authorized and directed to affix his or her signature to the Insurance Commitments for and on behalf of the City. The City Clerk is directed to affix the seal of the City thereto, and attest same. SECTION 3 This Resolution shall become effective upon final approval and passage. BY Vera Ortegon Councilperson PRt ATTESTED aY { CLERK INTRODUCED October 14, 2008 D O ED A e Background Paper for Proposed RESOLUTION AGENDA ITEM # 12 DATE: October 14, 2008 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AND ACCEPTING ASSURED GUARANTY CORP.'S COMMITMENT TO ISSUE RESERVE FUND INSURANCE POLICY AND COMMITMENT TO ISSUE FINANCIAL GUARANTY INSURANCE POLICY RELATING TO THE CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, CERTIFICATES OF PARTICIPATION, SERIES 2008 (POLICE COMPLEX PROJECT) AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council approve and accept Assured Guaranty Corp.'s insurance commitments? RECOMMENDATION Approve the insurance commitment. BACKGROUND Assured Guaranty Corp.'s insurance policies will potentially result in a higher rating for the City of Pueblo, Colorado Municipal Building Corporation's Certificates of Participation, Series 2008 (Police Complex) ( "Certificates ") and therefore less interest payment component of debt servicer, and decrease the amount of the Certificates to be issued by not funding the Reserve Fund out of Certificate proceeds. FINANCIAL IMPACT Potential reduction in City's rent payment for the Police building which equals debt service on the Certificates. / rNANCL A L C%AA PA, mrV AsSURED GUARANTY rNOURING FlNANML STRFNGTN" AM,dP• 4aa Afoodyl •AAA RIM Mr. David Geih, City Manager City of Pueblo One City Hall Place P.O. Box 1427 Pueblo, CO 81002 September 26,20D8 Re: Not to Exceed $25,050,000 City of Pueblo Colorado Municipal Corporation Certificates of Participation, Series 2008 (Police Complex Project) Dear Mr. Gelli: Enclosed please find the original and one copy of the commitment (the ' Commitment ') of Assured Guaranty Corp. (' Assured Guarenbn pertaining to the prospective issuance of its financial guaranty insurance policy (the ' Pall(') with respect to the captioned obligations (the ' Obligations '). The Commitment duly executed by or on behalf of the addressee should be delivered to Assured Guaranty Corp., 1325 Avenue of the Americas. New York, New York 10019, Attention: Legal Department - Public Finance and a copy thereof held try or on behalf of the addressee. To the extent that the Commitment is not accepted as contemplated thereby, each copy should be destroyed or retumed to Assured Guaranty. Enclosed with the Commitment you will find the Assured Guaranty Closing Package, which contains the Assured Guaranty Disclosure language to be inserted into the preliminary Official Statement and the final Official Statement, the legend to appear on the Obligations, the specimen Policy, the form of opinion of counsel to Assured Guaranty, the form of Assured Guaranty tax, disclosure and no default certificate, and the form of instructions for wiring the insurance premium to the account of Assured Guaranty at closing. The lnrormafkm In floe Assured Guaranty Absfng Package may also be downloaded bamAssured Guaranty's sebsfte of www.assumdeuamntycaN Upon acceptance of the Commitment, the following must occur in order for Assured Guaranty to complete its review of applicable disclosure and legal documents in advance of the closing date, and timely issue its Policy: • Please notify Assured Guaranty of the closing date for the issuance of the Obligations and provide a draft Official Statement as soon as possible in order that Assured Guaranty may prepare the Policy for prompt and timely submission to the applicable rating agencies. • Once determined, the final debt service schedule for the Obligations should be delivered to Assured Guaranty, Attention: Closing Coordinator, by fax and/or e-mail in order that we may confirm the premium to be paid for the Policy. • A copy of (1) the preliminary Official Statement and the final Official Statement, each of which shall include the disclosure provided by Assured Guaranty and the specimen policy with respect to the Obligations and any other references to Assured Guaranty, and (it) the Obligations, together with the bond legend to be affixed to such Obligations must be delivered to Assured Guaranty by fax or e-mail in order that Assured Guaranty may confine its accuracy. • Please refer to the Commitment for conditions that must be satisfied prior to Assured Guaranty's release of its Policy and legal opinion. Drafts of documents reflecting Assured Guaranty's legal requirements (bladdined to reflect all revisions from any previous drafts) with respect to this transaction, as reflected In the Commitment. must be faxed and/ or e- mailed as soon as possible to the contact persons) listed below, and Assured Guaranty will review changes to these drafts. • To access the Assured Guaranty logo, please access contact the Closing Coordinator. The Assured Guaranty logo may only be used in preparation of the preliminary Official Statement or the final Official Statement. All other uses are strictly prohibited. • In addition, as noted in the Commitment, the rating agencies assess separate fees In connection with the issuance of rating letters with respect to the Obligations. Such fees must be paid by or on behalf of the Issuer, and questions with respect thereto should be addressed to the applicable agency. Aewr•d gwmnty coca. 1325 Avenue of d,e Ar ricae mar, 212 974 01 00irdo@ a uredguarw"corn ww .a wodguamntycom New York. NY 10019 fax 212 581 3209 Assured Guaranty contact information: Alexis Platis Associate Telephone: (212) 261 -5550 Fax: (212) 581-3268 Email: aplatis(Massuredauaranty.00m Eileen Kirchoff, Esq. Director and Counsel Telephone: (212) 408 -6073 Fax: (212) 581-3268 - -- Email: ekirchoff0assuredouaranty.com . Nicole DiMarco Closing Coordinator Telephone: (212) 261 -5593 Fax: (212) 581-3268 E -mail: ndimarco(dassuredouaranty.com If you have any questions, please do not hesitate to contact us at the contact information listed above. We appreciate the opportunity to insure this transaction and look forward to a successful closing. Very truly yours, ASS URED GUARANTY CORP. By i C B Y ( �1(t Nicole DiMarco Closing Coordinator cc: Bob Hain, City of Pueblo Thomas Jagger, Esq., City of Pueblo Jim Manire, James Capital Advisors Inc. Dawn Herrington, James Capital Advisors Inc. Bill Gorham, Esq., Kutak Rock LLP Jordan Oates, Esq., Kutak Rock LLP Bobbie Patton, Esq., Kutak Rock LLP Alan Matlosz, George K. Baum & Company Enclosures ASSURED CIUARANTY ENDURIfIG RNAWaAL STRENGTH- AAA SdP "Am M W, -AAA Firth Issuer: City of Pueblo, Colorado Municipal Building Corporation Obligor. City of Pueblo, Colorado Commitment Date: September 26, 2008 Expiration Date: December 26, 2008 Obligations: �� Not to Exceed $25,050,000 City of Pueblo Colorado Municipal Corporation Certificates of Participation, Series 2008 (Police Complex Project) Insurance Premium: The Issuer will pay to Assured Guaranty on the date of Issuance of the Obligations a non- refundable premium in an amount equal to .60% of the total principal and interest on the Obligations. On the terms and subject to the conditions set forth herein and in Exhibit A attached hereto and made a part hereof, and upon compliance with the procedures set forth in the letter delivered herewith (this commitment, such Exhibit A and such letter hereinafter, collectively, the " CommitmenC ), Assured Guaranty Corp., a Maryland insurance corporation (' Assured Guaranty hereby commits to issue a financial guaranty insurance policy relating to the Obligations referenced above, which financial guaranty insurance policy shall be substantially in the form attached hereto (such policy, the Unless accepted by the Obligor, this Commitment shall expire, and be of no further force and effect, at 5:00 p.m., Eastem Standard Time, on the Expiration Date, unless extended by Assured Guaranty in its sole discretion by written notice to the Obligor. Any request by the Obligor for any such extension must be made to Assured Guaranty prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date set forth above. ' Business Day , for all purposes hereof, shall mean any day other than (1) a Saturday or Sunday, (ii) any day on which the offices of the Trustee or Paying Agent (as defined in the Policy) or Assured Guaranty are dosed, or (iii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in New York City or in the States of Maryland or New York. Upon acknowledgement and acceptance by the Obligor, this Commitment shall constitute a binding agreement between Assured Guaranty and the Obligor, with respect to the subject matter hereof, enforceable against each such party in.ac ordance with its terms; provided, however, that this Commitment shall expire, and be of no further force and effect, to the extent that Assured Guaranty shall not have Issued the Policy as contemplated hereby on or prior to the Expiration Date. Upon the execution of this Commitment by Assured Guaranty and the Obligor, and In consideration of the Issuance of this Commitment by Assured Guaranty, the Obligor hereby agrees that it will not enter into any discussions or negotiations with, or seek any commitment from any financial guarantor other than Assured Guaranty, for the issuance of a financial guaranty insurance policy with respect to the Obligations, provided, that the Obligor may determine prior to the Expiration Date not to issue Obligations that are guaranteed by any financial guarantor, in which case the Obligor agrees to notify Assured Guaranty immediately after making such determination. Capitalized terms not defined herein shall have meaning ascribed to such terms as set forth in the Assured Guaranty Closing Package referred to in the accompanying letter (the ' Assured Guaranty Closing Package The issuance of the Policy by Assured Guaranty is subject to the satisfaction or waiver by Assured Guaranty of the following conditions, and the Issuer hereby further agrees as follows: Guaranteed Obligations. The Policy will guaranty the timely payment of scheduled principal and interest on the Obligations. Amumd Qu rrtygorp. 1325 Aw wof the Amenoae min - 212 WO Ot00irdoeamumdguar".c www.auwsdguaraniy.c New Ydrk, NY 10019 fax 2125613268 Offering Documents and Other Legal Documentation. Assured Guaranty shall be provided with: a. Executed copies of all financing documents (including documentation evidencing the Issuer's ability and intent to comply with the Intemal Revenue Code of 1986, as amended and certified copies of the resolution or ordinance relating to the approval and issuance of the Obligations), the Official Statement (or any other disclosure document) with respect to the Obligations (any such disclosure, collectively, the " Official Statement and all legal opinions delivered in connection with the Issuance and sale of the Obligations. The legal opinions shall include all opinions as are customary for financings of the type contemplated, including without limitation the unqualified approving opinion of bond counsel rendered by a law firm acceptable to Assured Guaranty. Such opinions shall be addressed to Assured Guaranty or, if not so addressed, a letter shall be provided to Assured Guaranty expressly providing that Assured Guaranty is entitled to rely on such opinions as 9 such opinions were addressed to Assured Guaranty. b. A copy of any insurance policy, surety bond, guaranty, indemnification, or any other policy, contract or agreement, which provides for the payment of all or any portion of the Obligations, or in any way secures, insures or enhances the cash flow available to pay the Obligations. c. Confirmation that an amount equal to the insurance premium to be paid to Assured Guaranty upon Issuance of the Policy has been deposited to the account of Assured Guaranty. Assured Guaranty Disclosure Must be Approved. A Statement of Insurance, in the form contained in the Assured Guaranty Closing Package attached hereto, shall be printed on, or attached to the Obligations. The Obligations and the Official Statement shall contain no reference to Assured Guaranty, to the Policy, or to the financial guaranty insurance evidenced thereby, except as expressly approved by Assured Guaranty. No Material Adverse Change. On the date hereof and on the dosing date pertaining to the issuance of the Obligations (the " Closinc Date '), there shall have been no material adverse change in or affecting the Issuer, the Obligor or the Obligations (including, without limitation, the security for the Obligations or the proposed debt service schedule of the Obligations), the Official Statement, the financing documents to be executed and delivered with respect to the Obligations, the legal opinions to be executed and delivered in connection with the issuance and sale of the Obligations, or any information submitted to Assured Guaranty with rasped to the Obligor or the Obligations, from that previously delivered or otherwise communicated to Assured Guaranty. No Event Affecting Purchase of Obligations. No event shall have occurred which would permit any otherwise committed purchaser of the Obligations to elect not to purchase the Obligations on the date scheduled for the Issuance and delivery thereof. No Untrue Statement or Omission. The Official Statement, the financing documents to be executed and delivered in connection with the issuance and sale of the Obligations and all information submitted to Assured Guaranty with respect to the Obligations, the Obligor and the Issuer shall not contain any untrue or misleading statement of material :fagt, or omit to state a material fact necessary in order to make the information contained therein not misleading. Assured Guaranty shall receive an opinion of counsel or a certificate of an authorized officer of the Obligor and the Issuer, as applicable, confirming the same. Final Documents. Assured Guaranty shall have received the substantially final forms of all financing documents (including, without limitation, legal opinions, schedules and exhibits), incorporating Assured Guaranty's comments in a manner acceptable to Assured Guaranty, on or prior to the fifth Business Day prior to the proposed Closing Date. Any provisions or requirements of any other documentation which refer to Assured Guaranty or to the Policy must be delivered to Assured Guaranty no later than five (5) Business Days prior to the contemplated sale of the Obligations. -2- Offering Documents; Closing Transcript. Assured Guaranty shall be provided with at least four (4) copies of each of the preliminary Official Statement and the final Official Statement as soon as they are printed and available (and in any event prior to the dosing of the Obligations). On the Closing Date, as a condition of delivery of the Policy, duplicate originals of the financing documents and legal opinions shall be immediately delivered by hand, sent via overnight mail or by e-mail for delivery no later than the day of dosing. Within thirty (30) days after the dosing for the Obligations, Assured Guaranty will be provided with three (3) complete sale of executed documents, preferably an CD-ROM, or If CD -ROWS are not avallable loose bound transcripts. Inspection Rights; Financial Statements. The Issuer and the Obligor must allow Assured Guaranty or its agent access to all non - confidential records. The Issuer and the Obligor must provide to Assured Guaranty such records and notices as reasonably may be requested by Assured Guaranty, including without limitation the following: financial reports, operational statistics and strategic plans, If any, and any other records or notices to be. provided to the Trustee pursuant to the terms of the financing documentation relating to the Obligations. Rating Agency Fees. Each rating agency rating the Obligations assesses fees with respect to such rating, which fees are payable by or on behalf of the Issuer directly to each such rating agency. Questions with respect to such fees should be addressed by or on behalf of the Issuer directly to the applicable rating agency. Legal Fees. Assured Guaranty will be responsible for its own attorney's fees and expenses incurred by Assured Guaranty in connection with the Issuance of the Policy. Very truly CORP. By: The undersigned hereby accepts the commitment of Assured Guaranty Corp. to issue its Policy with respect to the captioned Obligations on the terms and subject to the conditions set forth in the Commitment with respect thereto issued by Assured Guaranty Corp. on the Commitment Date set forth above. Acknowledged, accepted and agreed to as of Oe.}_l`iv 2006: CITY OF PU COLOR By: Name:'ZARBRRA Vt DMAR Tile: plZ®src- iNrorTAe C.4/ -3- EXHIBIT A Assured Guaranty Corp. Additional Terms and Conditions Financial Guaranty Insurance Policy The Commitment is subject to the terms and conditions set forth below pertaining to the financing documents and any other documentation for the captioned Obligations (the "Financing Documents'), all of which shall be in form and substance satisfactory to Assured Guaranty, in its sole discretion, and shall contain such representations , warranties, covenants, events of default and rights, for the benefit Assured Guaranty, as bond Insurer, as are customary for financings of the type contemplated. The following terms and conditions are subject in all respects to modification and supplement based on review of the Financing Documents and other materials by Assured Guaranty and its counsel. 1. Terns. Terms not otherwise defined herein shall have the meanings as set forth in the Mortgage and Indenture of Trust dated as of October 1, 2008, (the "Indenture "), by and between the Issuer and the trustee for the Obligations (the'frustsel. 2. Security. The Obligations shall be payable from and secured by p) all amounts payable by the Obligor to the Issuer, pursuant to the Lease Agreement. which amounts are subject to annual appropriation by the Obligor, (!I) moneys held by the Trustee in the Debt Service Fund, the Reserve Fund and the Construction Fund created under the Indenture; and (di) following an Event of Nonappropriation or an Event of Default under the Lease, any moneys received by the Trustee from the sale or sublease of the Leased Property or the exercise of other remedies under the Lease and Indenture. 3. Lease Agreement. The Obligor.shall include in its annual budget for each fiscal year request for an amount sufficient to'meet Obligor's obligations undertheltl:ease!A reement. Rental payments shall be made at least fifteen (15) days prior to the r e ive es on ch interest and principal payments are due on the Obligations. The Obligor shall not be permitted to release or substitute any of the property subject to the Lease Agreement without the prior written consent of Assured Guaranty. 4. Reserve Fund. The reserve fund shall be fully funded with the proceeds of the Obligations in an amount equal to the least of (a) maximum annual debt service on the Obligations, 01) 125% of average annual debt service or (lit) 10% of the proceeds of the Obligations. Assured Guaranty has agreed to provide a surety, policy. If cash and a surety are on deposit in the reserve fund the Issuer shall be obligated to draw on the cash first prior to drawing on the surety policy. When replenishing the reserve fund Assured Guaranty shall be reimbursed for any draws on the surety policy prior to replenishing any cash on deposit in such reserve fund. Upon any draw on the reserve fund, such fund shall be replenished within twelve (12) months of such draw. 5. No Purchase In Lleu of Redemption. Without the prior written consent of Assured Guaranty, no Obligations Insured by Assured Guaranty shall be purchased by the Issuer or the Obligor, or any of he affiliates, in lieu of redemption, unless such Obligations are redeemed, defeased or cancelled. 6. Insurance. The Obligor shall maintain Insurance covering risks ;(including,. without limitation, property and casualty, general liability and professional liability) in amounts as customarily maintained by organizations =of similar size and conducting similar, operations of the Obligor. All insurers must be rated at least A by A.M. Best or S &P. All generel;I)abifity insurance policies shall be endorsedAo show the;tnistee`as- additional insured. Prior to expiration of any such policy, the Obligor shall furnish to Assured Guaranty satlsfactory'evidence that such policy has been renewed or replaced or is no longer required by the Financing Documents. All policies evidencing such required Insurance shall provide thlrty,(30) days', prior written notice to the •Issuer, "the Obligor, the Trustee and Assured Guaranty of any cancellation, reducdon.in• amount or material change in coverage. Reasonable deductibles - approved ,by.dre_ insurance consultant shall be permitted. Self Insurance. The Obligor may self Insure (for liability only), provided that the Obligor's self insurance plan provides for (i) the maintenance of a separate segregated seff4nsurence trust fund funded in an amount determined (Initially and on at least an annual basis) by an independent actuary satisfactory to Assured Guaranty employing accepted actuarial techniques and (II) the establishment and maintenance of a claims processing and risk management program. No later than one hundred twenty (120) days after the end of each fiscal year, the Issuer shall cause an Independent actuary, satisfactory to Assured Guaranty; to submit a written report to the Trustee and Assured Guaranty setting forth a determination, employing accepted actuarial techniques, of an Mi adequate amount of reserves to be maintained in the such member's self insurance trust fund. The Obligor shall immediately deposit any amount necessary to cause such the self insurance trust fund to be funded in the amount determined by such actuary. The Obligor may not seH Insure against casualty losses to any real or personal property owned, leased or used by @, including plant, property and equipment. 7. Disclosure. The Financing Documents shall refer to Assured Guaranty as the insurer for the captioned Obligations. B. Certificates and Opinion Letters. Assured Guaranty shall be addressed or entitled to rely upon: a. The unqualified approving opinion of bond counsel; b. The opinion of the counsel to the Issuer which shall indicate that (1) the Issuer is a body politic and corporate duly created and validly existing under the laws of Its state of incorporation, (11) the Financing Documents are legal, valid and binding obligations of the Issuer enforceable against the Issuer and, and (iii) there is no litigation pending against the Issuer, or to the knowledge of counsel „threatened (a) seeking to restrain or enjoin the issuance and delivery of the Obligations or the application of the proceeds of the Obligations, or (b) In any way contesting the corporate existence of the Issuer, or the title to the office of the officers, thereof, or affecting any powers of the Issuer under the statutes of the state of incorporation of the Issuer, including without limitation, the power of the Issuer to enter into the Financing Documents. c. The opinion of the counsel to the Obligor which shell indicate that (i) the Obligor is a'body politic and corporate duly created and validly existing under the laws of ita;:state of incorporation, (11) the Flnancing,Documents, to which the Obligor is a: party; are legal,.valid and..binding obligations of.the Obligoranforceable�againstthe 'Obligor; (iii) there.is no litigation pending against the Obligor, or to the knowledge. of counsel; threatened (a) seeking to restrain or enjoin the issuance and delivery of the Obligations or the application of the proceeds of the' Obligations, or (b) in any way contesting the corporate existence of the Obligor;. or the title to the office of the officers, thereof, or affecting any powers of the Obligor under the statutes of the state of incorporatlorroUthe Issuer, including without -2- 9. Reportlrtg Requlremerils. The Obligor will furnish or cause to be famished to Assured Guaranty: (a) the fiscal year budget of the Obligor within thirty (30) days after adoption of such budget; (b) annual audited financial statements of the Obligor prepared by an independent certified public accountant, together with a certificate of the Obligor stating that no event of default has occurred or is continuing under the Financing Documents. (c) prior to Issuing additional debt, any disclosure document or financing agreement pertaining to such additional debt, which disclosure document or financing agreement shall include, without limitation, the applicable maturity schedule, interest rate or rates, redemption and security provisions pertaining to any such additional debt; (d) within thirty (30) days following any litigation or investigation that may have a material adverse affect on the financial position of the Obligor of such litigation; (e) immediate notice of any event of non-appropriation by the Obligor. A -3 Schedule 1 A. Notices and Other Information The Financing Documents must provide that: 1. Any notice that is required to be given to holders of the Obligations (the ° Bondholders °), nationally recognized municipal securities Information repositories or state information depositories pursuant to Rule 15c2 -12(b) (5) adopted by the Securities and Exchange Commission or to the Trustee pursuant to the financing documents shall also be provided to Assured Guaranty, simultaneously with the sending of such notices. In addition, to the extent that the Issuer has entered into a continuing disclosure agreement with respect to the Obligations, all information furnished pursuant to such agreement shall also be provided to Assured Guaranty, simultaneously with the furnishing of such information. All notices required to be given to Assured Guaranty shall be in writing and shall be sent by registered or certified mail addressed to Assured Guaranty Corp., 1325 Avenue of the Americas, New York, New York 10019, Attention: General Counsel, with a copy to Assured Guaranty, Attention: Risk Management Department - Public Finance Surveillance. 2. Assured Guaranty shall have the right to receive such additional information as it may reasonably request. 3. The Obligor will permit Assured Guaranty to discuss the affairs, finances and accounts of the Obligor or any information Assured Guaranty may reasonably request regarding the security for the Obligations with appropriate officers of the Obligor, and will use best efforts to enable Assured Guaranty to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice. 4. The Trustee shall notify Assured Guaranty of any failure of the Issuer to provide notices, certificates and other information under the Financing Documents. B. Defeasance In the event that the principal and/or interest due on the Obligations shall be paid by Assured Guaranty pursuant to the Policy, the Obligations shall remain outstanding for all purposes, not be dsfeased:orotherwise satisfied and not be considered paid by.the Issuer, and the assignment and pledge of the trust estate and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners, including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Obligations. In addition, Assured Guaranty will require the following items: 1. An opinion of counsel that the defeasance will not adversely impact the exclusion from gross income for federal income tax purposes of interest on the Obligations or refunded bonds 2. An escrow agreement and an opinion of counsel regarding the validity and enforceability of the escrow agreement. The escrow agreement shall provide that a. Any substitution of securities shall require a verification by an independent certified public accountant and the prior written consent of Assured Guaranty. b. The Issuer will not exercise any optional redemption of Obligations secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right in make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition of any such redemption there shall be provided to Assured Guaranty a verification of an independent certified public accountant as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following such redemption. S -I c. The Issuer shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of Assured Guaranty. C. Trustee The Financing Documents must include the following provisions: t. Assured Guaranty shall receive prior written notice of any name change of the Trustee or the resignation, removal or termination of the Trustee. 2. No resignation, removal or termination of the Trustee shall take effect until a successor, acceptable to Assured Guaranty, shall be appointed. 3. The Trustee may be removed at any time at the request of Assured Guaranty for any breach of its obligations under the Financing Documents. D. Amendments and Supplements With respect to amendments or supplements to the financing documents which do not require the consent of the Bondholders, Assured Guaranty must be given prior written notice of any such amendments or supplements. With respect to amendments or supplements to the Financing Documents which do require the consent of the Bondholders, Assured Guaranty's prior written consent is required. All Financing Documents must contain a provision that requires that copies of any amendments or supplements to such documents which are consented to by Assured Guaranty shall be sent to the rating agencies that have assigned a rating to the Obligations. Notwithstanding any other provision of such Financing Document, in determining whether the rights of Bondholders will be adversely affected by any action taken pursuant to the terms and provisions thereof, the Trustee shall consider the effect on the Bondholders as if there were no Policy. E. Assured GuaMmv as Third Party Beneficiary To the extent that the Financing Documents confer upon or give or grant to Assured Guaranty any right, remedy or claim under or by reason of the Financing Documents„ the.. Financing Documents must contain a provision which stales that Assured •Gueranty is explicitly as being a third party`beneficiery thereunder and may enforce any such right; remedy or claim conferred, given or granted thereunder. F. Control Rights Assured Guaranty shall be deemed to be the holder of all of the Obligations for purposes of (a) exercising all,remedies and directing the Trustee to take actions or for any other purposes following an Event of Default (as defined in the resolution, indenture or ordinance), and (b) granting any consent, direction or approval or taking any action permitted by or required under the indenture, resolution or ordinance, as the case may be, to be granted or taken by the holders of such Obligations. [In transactions for which acceleration is not a remedy for an event of default, the following provision is to be included in the Documentation] Anything in this Financing Document to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined herein, Assured Guaranty shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or the Trustee for the benefit of the Bondholders under this Financing Document. [In transactions for which acceleration is a remedy for an event of default, the following provisions are to be Included in the Financing Documents In lieu of the provision above.] Anything in this Financing Document to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined herein, Assured Guaranty shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or the Trustee for the benefit of the Bondholders under this Financing Document, including, without limitation, (I) the right to accelerate the principal of the Obligations as described in this Financing Document and (11) the right to annul any declaration of acceleration. Assured Guaranty also shall be entitled to approve all waivers of events of default. 5 -2 G. Consent Rights of Assured Guaranty The Financing Documents shall include the following consent provisions: 1. Consent of Assured Guaranty. Any provision of this Financing Document expressly recognizing or granting rights in or to Assured Guaranty may not be amended in any manner that affects the rights of Assured Guaranty hereunder without the prior written consent of Assured Guaranty. 2. Consent of Assured Guaranty In Addition to Bondholder Consent. Wherever the Financing Documents require the consent of Bondholders, Assured Guaranty's consent shall also be required. 3. Consent of Assured Guaranty In the Event of Insolvency. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to Assured Guaranty. In the event of any reorganization or liquidation, Assured Guaranty shall have the right to vote on behalf of all Bondholders who hold Obligations guaranteed by Assured Guaranty, absent a default by Assured Guaranty under the Policy. 4. Consent ofAssurad Guaranty Upon Default. Upon the occurrence of an event of default as defined herein, the Trustee may, with the consent of Assured Guaranty, and shall at the direction of Assured Guaranty or the Bondholders with the prior written consent of Assured Guaranty, by written notice to the Issuer and Assured Guaranty, declare the principal of the Obligations to be Immediately due and payable, whereupon that portion of the principal of the Obligations thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Financing Document or the Obligations to the contrary notwithstanding. H. Payment Procedure Under the Poll . The Financing Documents shall include the following provisions: 1. At least two (2) Business Days prior to each payment date on the Obligations, the Trustee will determine whether there will be sufficient funds to pay all principal of and Interest on the Obligations due on the related payment date and shall immediately notify Assured Guaranty or Its designee on the same Business Day by telephone or electronic mall, confirmed in writing by registered or certified mail, of the amount of any deficiency. Such notice shall specify the amount of the anticipated deficiency, the Obligations to which such deficiency is applicable and whether such Obligations will be deficient as to principal or interest or both. If the deficiency is made up in whole or in part prior to or on the payment date, the Trustee shall so notify Assured Guaranty or its designee. 2. The Trustee shall, after giving notice to Assured Guaranty as provided above, make available to Assured Guaranty and, at Assured Guaranty's direction, to any Fiscal Agent, the registration books of the Issuer maintained by the Trustee and all records relating to the funds maintained under the Documentation. 3. The Trustee shall provide Assured Guaranty and any Fiscal Agent with a list of registered owners of Obligations entitled to receive principal or interest payments from Assured Guaranty under the terms of the Policy, and shall make arrangements with Assured Guaranty, the Fiscal Agent or another designee of Assured Guaranty to (i) mail checks or drafts to the registered owners of Obligations entitled to receive full or partial Interest payments from Assured Guaranty and (ii) pay principal upon Obligations surrendered to Assured Guaranty, the Fiscal Agent or another designee of Assured Guaranty by the registered owners of Obligations entitled to receive full or partial principal payments from Assured Guaranty. 4. The Trustee shall, at the time it provides notice to Assured Guaranty of any deficiency pursuant to clause 1. above, notify registered owners of Obligations entitled to receive the payment of principal or interest thereon from Assured Guaranty (i) as to such deficiency and Its entitlement to receive principal or Interest, as applicable, (ii) that Assured Guaranty will remit to them all or a part of the interest payments due on the related payment date upon proof of its entitlement thereto and delivery to Assured Guaranty or any Fiscal Agent, in form satisfactory to Assured Guaranty, of an appropriate assignment of the registered owner's right to payment, (ti) that, if they are entitled to receive partial payment of principal from Assured Guaranty, they must surrender the related Obligations or payment first to the Trustee, which will note on such Obligations the portion of the principal paid by the Trustee and second to Assured Guaranty or Its designee, together with an S -3 appropriate assignment, in form satisfactory to Assured Guaranty, to permit ownership of such Obligations to be registered in the name of Assured Guaranty, which will then pay the unpaid portion of principal, and (iv) that, if they are entitled to receive full payment of principal from Assured Guaranty, they must surrender the related Obligations for payment to Assured Guaranty or its designee, rather than the Trustee, together with the an appropriate assignment, in form satisfactory to Assured Guaranty, to permit ownership of such Obligations to be registered in the name of Assured Guaranty. 5. In addition, If the Trustee has notice that any holder of the Obligations has been required to disgorge payments of principal or interest on the Obligations previously Due for Payment pursuant to a final non - appealable order by a court of competent judsdlction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy laws, then the Trustee shall notify Assured Guaranty or its designee of such fact by telephone or electronic notice, confirmed in writing by registered or certified mail. 6. The Trustee will be hereby irrevocably designated, appointed, directed and authorized to act as attorney -in -fact for holders of the Obligations as follows: a. If and to the extent there is a deficiency in amounts required to pay interest on the Obligations, the Trustee shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holders In any legal procaeding related to the payment of such interest and an assignment to Assured Guaranty of the claims for Interest to which such degdency retaes and which are paid by Assured Guaranty, (b) receive as designee of the respective holders (and not as Trustee) in accordance with the tenor of the Policy payment from Assured Guaranty with respect to the claims for Interest so assigned, and (c) disburse the same to such respective holders; and b. If and to the extent of a deficiency in amounts required to pay principal of the Obligations, the Trustee shall (a) execute and deliver to Assured Guaranty, in forth satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holder in any legal prooseding related to the payment of such principal and an assignment to Assured Guaranty of the Obligation surrendered to Assured Guaranty in an amount equal to the principal amount thereof as has rot previously been paid or for which moneys are not held by the Trustee and available for such payment (but such assignment shall be delivered only If payment from Assured Guaranty is received), (b) reosive as designee of the respective holders (and not as Tom) in accordance v& the tenor of the Policy payment therefore tram Assured Guaranty, and (c) disburse the same to such holders. 7. Payments with respect to claims for interest on and principal of Obligations disbursed by the Trustee from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer with respect to such Obligations, and Assured Guaranty shall become the owner of such unpaid Obligation and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. S. Irrespective of whether any such assignment Is executed and delivered, the Issuer and the Trustee hereby_egree for the benefit of Assured Guaranty that: a. they recognize that to the extent Assured Guaranty makes payments directly or Indlrecity (e.g., by paying through the Trustee), on amount of principal of or interest on the obligations, Assured Guaranty Wn be subrogated to the rights of such folders to receive the amount of such principal and interest from lie Issuer, with interest thereon as provided and solely from the sources stated in the financing documents and the Obligations; and b. they will accordingly pay to Assured Guaranty the amount of such principal and interest, with interest thereon as provided In the financing documents and the Obligations, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Obligations to holders, and will otherwise treat Assured Guaranty as the owner of such rights to the amount of such principal and interest. 6_f 9. Assured. Guaranty shall be entitled to pay principal of or interest on the Obligations that shall become Due for Payment but shall be unpaid by reason of Nonpayment (as such terms are defined In the Policy) and any amounts due on the Obligations as a result of acceleration of the maturity thereof in accordance with this agreement, whether or not Assured Guaranty has received a Notice (as defined in the Policy) of Nonpayment or a claim upon the Policy. 10. In addition, Assured Guaranty shall, to the extent it makes any payment of principal or Interest on the Obligations, become subrogated to the rights of the recipients of such payments in accordance with the temrs of the Policy, and to evidence such subrogation (i) in the case of claims for interest, the Trustee shall note Assured Guaranty's rights as subrogee on the registration books of the Issuer maintained by the Trustee, upon receipt of proof of payment of interest thereon to the registered holders of the Obligations, and (ii) in the case of claims for principal, the Trustee, If any, shall note Assured Guaranty's rights as subrogee on the registration books of the Issuer maintained by the Trustee, upon surrender of the Obligations together with receipt of proof of payment of principal thereof. 11. The Ohligorhe agree to_paa _ or _reimburse Assured Guaranty, -to the extent permitted 6y law and subject solely to annuel appropriation by the Obligor, (A) all amounts paid by Assured Guaranty under the terms of the Policy, and (B) any and all charges, fees,'cosis and expenses which Assured Guaranty may reasonably:pay or Incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (1) any accounts established to facilitate payments under the Policy, (it) the administration, enforcement, defense or preservation of any rights in respect this agreement or any other Financing Document, Including defending, monitoring or participating In any lltigetlon or proceeding (including any bankruptcy "proceeding in rasped of the 'Issuer or any affiliate thereof) relating to this agreement or any other Financing Document, any party to this agreement or any other Financing Document `orthe transaction contemplated by this agreement or any other Financing Documents, (Ili) the foreclosure against, sale or other disposition of any collateral securing any obligations under this agreement or any other Financing Document, or;the, pursuit of any remedies under this agreement or any other Financing Document, to the extent such.costs and expenses are not recovered from such foreclosure; sale or other disposition, or (iv) any amendment, waiver or other action with respect to, or related to, this agreement or any other Finanoing.Document whether or not executed or completed; costs and expenses shall 'include a reasonable allocation of compensation and overhead attributable to time of employees of Assured Guaranty spent in connection with the ed'ons desaritied in clauses;(iq - ( iv) above: In addition, Assured Guaranty reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of this;agreement orany other Financing Document. The Issuer will pay interest on the amounts owed In this paragraph from the date of any payment due or paid, at the per annum rate of interest publicly announced from tlmwto tlme by JP Morgan Chase Bank, National Association atats: principal office in New York, New York as.its prime lending rate (any change in such prime rate of interest to be effective on the datwsuch change is announced by JPMorgan Chase Bank, National Association) plus three percent ' (3%) per annum (the `Reimbursement Rate'). The. Reimbursement Rate shall be.calculated on the basis of the actual number of days elapsed over a 360 -day year. In the event JPMorgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank, as Assured Guaranty shall specify. S-5 12. In addition to any and all rights of reimbursemem, subrogation and any other rights pursuant hereto or under law or in equity,.the Obligor agrees tq,pey or. reimburse'Aisured Guaranty, to the extent permitted by law and subiact to annual appropriation,.any and all charges, fees, costs, claims, losses, liabilities (including penaltias); judgments, demands, damages, and expenses which Assured Guaranty or its officers, directors, shareholders, employees, agents and each Person, If any, who controls Assured Guaranty within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, may reasonably pay or incur; including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of any nature in connection with, in respect of or relating to the transactions contemplated by this agreement or any other Financing Document by reason of: a. any omission or action (other than of or by Assured Guaranty) in connection with the offering, issuance, sale, remarketing or delivery of the Obligations; b. the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft committed by any director, officer, employee or agent of the Issuer or the Obligor in connection with any transaction arising from or relating to this agreement or any other Financing Document; c. the violation by the Issuer or the Obligor of any law, rule or regulation, or any judgment, order or decree applicable to it d. the breach by the Issuer of any representation, warranty or covenant under this agreement or any other Financing Document or the occurrence, in respect of the Issuer or the Obligor under this agreement or any other Financing Document of any "event of default" or any event which, with the giving of notice or lapse of time or both, would constitute any "event of default "; or e. any untrue statement or alleged untrue statement of a material fact contained in any official statement relating to the Obligations, it any, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such claims arise out of or are based upon any untrue statement or omission in information included in an official statement, If any, and furnished by Assured Guaranty in writing expressly for use therein. S -6 Assured Guaranty Corp. Document and Disclosure Information For Municipal Finance Transactions (08/15/08) The information contained herein is intended for use by bond counsel, underwriters counsel, printers and any other entities involved with municipal finance transactions that will be insured by Assured Guaranty. Copies of the preliminary and final official statements, financing documents and the bond forms should be delivered to Assured Guaranty for review and comment prior to the printing of the preliminary and final official statements, the execution of the final financing documents and the execution and delivery of the bonds. (Revised 08116108) FORM OF DISCLOSURE t. The following are Assured Guaranty's requirements for printing the preliminary and final official statements: a. Both the preliminary and final official statements must contain the language set forth in this packet and Assured Guaranty must be provided with final drafts for its approval thereon at least two business days prior to the priming thereof. b: Any changes made to the Assured Guaranty disclosure language for inclusion in the preliminary and - final official statements must first be approved by Assured, Guaranty. c. We must receive four final transcripts, preferably on CD -ROM, or If CD -ROMS are not available, primed unbound copies, within thirty days of the closing date for the issuance. (NOTE.• THE INF0RA&4 MW IN THIS DISCLOSURE PACl27 MAYALSO BE DOWNLOADED FROM ASSURED GUARANTYSWEBSnE, ArWWW .ASSUREDGU4RANTY.COMPRODUCTS) 2. The following language is to be printed on the cover of the official statement: a. When Assured Guaranty is insuring the entire issue: The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a financial guaranty Insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY CORP. b. When Assured Guaranty is insuring less than the entire issue: The scheduled payment of principal of and interest on the Bonds maturing . on of the years through inclusive (the 'Insured Bonds "), when due will be guaranteed under a financial guaranty insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY CORP. 3. The following language is to be primed on the inside cover of the official statement Assured Guaranty makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, Assured Guaranty has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted heretrom, other than with respect to the accuracy of the information regarding Assured Guaranty supplied by Assured: Guaranty and presented under the heading `Bond Insurance" and "Exhibit _ - Specimen Financial Guaranty Insurance Policy". lNneaassery, drenge a# reftrences to Nre 610 m Ce1041111ea OrNaresl (Revised 08115108) 4. The following disclosure language is to be printed in the body of the official statement or as any exhibit: BONDINSURANCE The following information is not complete and reference Is -made to Appendix Lj for a specimen of the - financial guaranty insurance policy (the 'Policy") of Assured Guaranty Corp. (Assured Guaranty' or the 'Insurer*). THE INSURANCE POLICY Assured Guaranty has made a commitment to issue the Policy relating to the Bonds, effective as of the date of issuance of such Bonds. Under the terms of the Policy, Assured Guaranty will unconditionally and irrevocably guarantee to pay that portion of principal of and Interest on the Bonds that becomes Due for Payment but shall be unpaid by reason of Nonpayment (the 'Insured Payments'). Insured Payments shall not include any additional amounts owing by the Issuer solely as a result of the failure by the Trustee or the Paying Agent to pay such amount when due and payable, including without limitation any such additional amounts as may be attributable to penalties or to interest accruing at a default rate, to amounts payable in respect of indemnification, or to any other additional amounts payable by the Trustee or the Paying Agent by reason of such failure. The Policy is non cancelable for any reason, including without limitation the non - payment of premium. 'Due for Payment' means, when referring to the principal of the Bonds, the stated maturity date thereof, or the date on which such Bonds shall have been duly called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment is due by reason of a call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty In its sole discretion elects to make any principal payment, in whole or in part, on such earlier date) and, when referring to interest on such Bonds, means the stated dates for payment of interest. 'Nonpayment" means the failure of the Issuer to have provided sufficient funds to the Trustee or the Paying. Agent for payment in full of all principal and interest Due for Payment on the Bonds. it is further understood that the term Nonpayment in respect of a Bond also includes any amount previously distributed to the Holder (as such term is defined in the Policy) of such Bond in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable preference -with- respect to- such - Holder.- Nonpayment does not include. nonpayment.of.principal_or_interest raused.by.the- failure__ of the Trustee or the Paying Agent to pay such amount when due and payable. Assured Guaranty will pay each portion of an Insured Payment that is Due for Payment and unpaid by reason of Nonpayment, on the later to occur. of (t) the date such principal or interest becomes Due for Payment, or (Ii) the business day next following the day on which Assured Guaranty shall have received completed notice of Nonpayment therefor In accordance with the terms of the Policy. Assured Guaranty shall be fully subrogated to the rights of &a Holders of the Bonds to receive payments In respect of the Insured Payments to the extent of any payment by Assured Guaranty under the Policy. The Policy Is not covered by any insurance or guaranty fund established under New York, California, Connecticut or Florida insurance law. THEINSURER Assured Guaranty Corp. ("Assured Guaranty) is a Maryland- domiciled insurance company regulated by the Maryland Insurance Administration and licensed to conduct financial guaranty insurance business in all fifty states of the United States, the District of Columbia and Puerto Rico. Assured Guaranty commenced operations In 1988.. Assured Guaranty is a wholly owned, indirect subsidiary of Assured Guaranty Ltd. ('AGL "), a Bermuda -based holding company whose shares are publicly traded and are listed on the New York Block Exchange under the symbol 'AGO.' AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, structured finance and mortgage markets. Neither AGL nor any of Its shareholders is obligated to pay any debts of Assured Guaranty or any claims under any insurance policy issued by Assured Guaranty. Assured Guaranty is subject to insurance laws and regulations in Maryland and in New York (and in other jurisdictions in which it is licensed) that, among other things, (i) limit Assured Guaranty's business to financial guaranty insurance and related lines, (Ii) prescribe minimum solvency requirements, including capital and surplus requirements, (iii) limit classes and concentrations of investments, (iv) regulate the amount of both the aggregate and individual risks that may be insured, (v) limit the payment of dividends by Assured Guaranty, (vi) require the maintenance of contingency reserves, and (vii) govem changes in control and transactions among affiliates. Certain state laws to which Assured Guaranty Is subject also require the approval of policy rates and forms. Assured Guaranty's financial .strength is rated "AAA" (stable) by Standard & Pooi's, a division of The McGraw -Hill Companies, Inc. ( "S&P "), "AAA' (stable) by Fitch, Inca ('Fhchl and °Aaa" (under review for possible downgrade) by Moody's Investors Service, Inc. ('Moody's7. Each rating of Assured Guaranty should be evaluated (Revised 08115108). . independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject ID revision or withdrawal at any lime by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of any security guaranteed by Assured Guaranty.: Assured Guaranty does not guaranty the market price of the securities it guarantees, nor does it guaranty that the ratings on such securities will not be revised or withdrawn. Recent Developments For recent developments regarding Assured Guaranty's insurance financial strength ratings, see AGL's Quarterly Report on Form 10•Q for the quarterly period ended June 30, 2008 (which was filed by AGL with the SEC (as defined below) on August 8, 2008). Capitalization ofAssured Guaranty Corp As of June 30, 2008, Assured Guaranty had total admitted assets of $1,798,738,388 (unaudited), total liabilities of $1,339,900,327 (unaudited), total surplus of $458,838,061 (unaudited) and total statutory capital (surplus plus contingency reserves) of $1,109,675,386 (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by Insurance regulatory authorities. As of December 31, 2007, Assured Guaranty had total admitted assets of $1,361,538,502 (audited), total liabilities of $961,967,238 (audited), total surplus of $399,571,264 (audited) and total statutory capital (surplus plus contingency reserves) of $982,045,695 (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. The Maryland Insurance Administration recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company, for determining its solvency under the Maryland Insurance Cade, and for determining whether its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the Maryland Insurance Administration to financial statements prepared in accordance with accounting principles generally accepted in the United. States ('GAAP') in making such determinations. lacorporabon of Certain Documents by Reference The portions of the following documents relating to Assured Guaranty are hereby incorporated by reference into this Official Statement and shall be deemed to be a pan hereof. • The Annual Report on Forth 10-K of AGL for the fiscal year ended December 31, 2007 (which was filed by AGL with the Securities and Exchange Commission (the "SEC ") on February 29, 2008); •, The Quarterly Report.on Form 10-0 for the quarterly period ended March 31, 2008 (which was filed by AGL with the SEC on May 9, 2008); • The Quarterly Report on Form 10.0 for the quarterly period ended June 30, 2008 (which was filed by AGL with the SEC on August 8, 2008); and • The Current Reports on Forth 8-K filed by AGL with the SEC, as they relate to Assured Guaranty. All consolidated financial statements of Assured Guaranty and all other information relating to Assured Guaranty included in documents filed by AGL with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities. Exchange Act of 1934, as amended, subsequent to the date of this Official Statement and prior to the termination of the offering of the Bonds shall be deemed to be incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such consolidated financial statements. Any statement contained In a document incorporated herein by reference or contained herein under the heading 'BOND INSURANCE - The insurer' shall be modified or superseded for purposes of this Official Statement to the extent that statement contained herein or in any subsequently filed document which is incorporated by reference herein also modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitutes part of this Official Statement. Copies of the consolidated financial statements of Assured Guaranty Incorporated by reference herein and of the statutory financial statements filed by Assured Guaranty with the Maryland, Insurance Administration are available upon request by contacting Assured Guaranty at 1325 Avenue of the Americas, New York New York 10019 or by calling Assured Guaranty at (212) 974-0100. In addition, the information regarding Assured Guaranty that is incorporated by reference In this Official Statement that has been filed by AGL with the SEC is available to the public over the Internet at the SEC's web site at http✓Avwvsecgov and at AGL's web site at http.lAvww.assuredguaranty.com, from the SEC's Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the office of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. Assured Guaranty makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, Assured Guaranty has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure (Revised 08115!08) contained herein, or omitted herefrom other than with respect to the accuracy of the information regarding Assured Guaranty supplied. by Assured Guaranty and presented under the heading 'BOND INSURANCE." pineaeseary. ~ affaftwxwto ardstoC&WmVs (Revised Oa/15=) STATEMENT . OFINSURANCE This Information Is not to be Included In the Olfldel Statement 5. The following language is to be printed on the bond forth: a. When Assured Guaranty is insuring the entire issue Assured Guaranty Corp. (`Assured Guaranty'), a Maryland - domiciled insurance company, has delivered Its financial guaranty Insurance policy (the 'Policy') with respect to the scheduled payments of principal of and Interest on this Bond to [insert name ofTwtee or Paying Agen4, as paying agent on behalf of the holders of the Bonds (the 'Paying Agenr). Such Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Assured Guaranty or the Paying Agent. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges and consents to the subrogation rights of Assured Guaranty as more fully set forth in the Policy. b. When Assured Guaranty is insuring less than the entire issue Assured Guaranty Corp. ("Assured Guaranty "), a .Maryland - domiciled insurance company, has delivered its financial guaranty Insurance policy (the 'Policy') with rasped to the scheduled payments of principal of and interest on the Bonds maturing on of the years through , inclusive ( the "Insured Bonds'), to {insert name of Trustee or Paying Agen4, as paying agent on behalf of the holders of the Bonds (the "Paying. Agent "). Such Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Assured Guaranty or the Paying Agent. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges and consents to the subrogation rights of Assured Guaranty as more fully set forth in the Policy. (dnecassarys d ange aU to the Bonds to Catti0colas orNot es.J FORM OF WIRE INSTRUCTIONS Premium Payment Instructions for Assured Guaranty Corp.: Bank: JP Morgan Chase New York Account Name: Assured Guaranty Corp. - Premium Account Number: 323-355919 ABA Number: 021 - 000-021 Reference: [Insert Issuance) Confirmation of Receipt of Premium: Please provide Assured Guaranty Corp. Attention: Closing Coordinator, with a who reference number when such premium is sent. Upon confirmation of the premium payment and satisfaction of all other conditions set forth in the commitment letter, Assured Guaranty will release the Policy. If you have any questions, please contact the Closing Coordinator at Assured Guaranty Corp. (Revised ON15ma) ASSURED GJ ARANTY' ENDURING FINANCIAL STRENGTH° AAA S&P•Am Al d,} -AAA Huh Financial Guaranty Insurance Policy Issuer. Policy No.: Obligations: Premium: Effective Date: Assured Guaranty Corp., a Maryland corporation ( "Assured Guaranty'), in consideration of the payment of the Premium and on the terms and subject to the conditions of this Polley (which Includes each endorsement hereto), hereby unconditionally and Irrevocably agrees to pay to the trustee (the Trustee") or the paying agent (the 'Paying Agent) for the Obligations (as set forth in the documentation providing for the issuance of and securing the Obligations) for the benefit of the Holders, that portion of the Insured Payments which shall become Due for Payment but shall be unpaid by reason of Nonpayrnerd. Assured Guaranty will make such insured Payments to the Trustee or the Paying Agent on the later ur of (1) the d te- applicable principal or interest becomes Due for Payment, or (11) the Business Day next fullowt a on which Assured Guaranty shall have Received a. completed Notice of Nonpayment. If a Notice of ant urad Guaranty fs incomplete or does not In any instance conform to the terns and oordtiorns oft ' cy, it s I d not Received, and Assured Guaranty shall promptly give notice to the Trustee or the I . U n pt of uch the Trustee or the Paying Agent may submit an amended Notice of Nonpayment. a ruts r P ,g en wi d bursa the Insured Payments to the Hollers only upon receipt by the T I it forth n factory to it of p) evidence of the Holders right to receive 1 e nits, () in dl wt n any appropriate Instruments of assignment, that al t Hokde s pircl t for'Payment shall thereupon vest In Assured GuE th e m of t A mured G shall become the Holder of the Obligations, a ap n nitrrtIou n ntd rig p of y rd thereof or Interest thereon, and shall be fully sub to t t the)H rs rig t to n t h d uding without limitation the right to receive payments in res o th bl ga y m by re he Trustee or the Paying Agent for the benefit of the Holders shall tins rge th bl gatio s my u ar Policy to the extent of such payment., This Policy Is non bl by u Gu for any reason. The Premium on this Policy is not refundable for any reason. This Pol - i is agal as of arty prepayment premium or other acceleration payment which at any time may become due I res Obligation, other than at the sole option of Assured Guaranty, for against any risk other than Nonpayment. Except to the extent expressly modified by any endorsement hereto, the following terms shall have the meanings specified for all purposes of this Polley. 'Avoided Paymenr means any amount previously disbibOed to a Holder in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code In accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable Preference with respect to such Holder. 'Business Day' means any day other than (1) a Saturday or Sunday, (11) any day on which the offices of the Trustee, the Paying. Agent or Assured Guaranty are closed, or (III) any day on which banking Institutions are authorized or required by law, executive order or governmental decree to be closed In the City of New York or In the State of Maryland. 'Due for Payment" means (t) when referring to.the . principal of an Obligation, the stated maturity date thereof, or the date on which such Obligation shell have been duty called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment Is due by reason of a call for redemption (other than by mandatory . .sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty In its sole discretion elects to make any principal payment, in whole or In part, on such earlier date) and (6) when referring to Interest on an Obligation, the stated date for payment of such interest. "Holder" means, In respect of any Obligation, the person or entity who, at the time of Nonpayment, Is entitled under the terns of such Obligation to payment of principal or Interest thereunder, except that Hokfer shall not iolude the Issuer or any person or entity whose direct or Indirect obligation constitutes the underlying security for the Obligations. Insured Payments" means that portion of the principal of and Interest -on the Obligations that shag become Due for Payment but shall be unpaid by reason of Nonpayment. Insured Payments shall not include any additional amounts owing by the Issuer solely as a result of the failure by the Trustee or the Paying Agent to pay such amount when due and payable, Including without limitation any such additional amounts as may be attributable to penalties or to interest accruing at a default rate, to amounts payable in respect of indemnification, or to any other additional amounts - payableby the Trustee or the Paying .Agent by reason of such failure. 'Nonpayment means, in respect of an Obligation, the failure of the Issuer to have provkfed sufficient funds to the Trustee or the Paying Agent for payment in full of all principal and Interest Due for Payment on such Obligation. it is further understood that the term 'Nonpayment' in respect of an Obligation includes any Avoided Payment. 'Recelpr or'Recehre8 means actual receipt or notice of or, If notice is given by overnight or other delivery service, or by certified or registered United States mail, by a delivery receipt signed by a person authorized to accept delivery on behalf of the person to whom the notice was given. Notices to Assured Guaranty may be mailed by registered mail w personally delivered or telecopled to it at 1325 Avenue of the Americas, New York, New York 10019, Telephone Number. (212) 974 -0100, Facsimile Number. (212) 561 -3268, Attention: Risk. Management Department - Public Finance Surveillance, with a copy to the General Counsel, or to such other address as shall be specified by Assured Guaranty to the Trustee or the Paying Agent In wrung. A Notice of Nonpayment will be deemed to be Received by Assured Guaranty on a given Business Day t it is Received prior to 12:00 noon (New York City time) on such Business Day; otherwise it will be deemed Received on the next Business Day. Term' means the period from and Including the Effective Date until the earlier of (1) the maturity date for the Obligations, or (ii) the date on which the Issuer has made all payments required to be made on the Obligations. At any time during the Term of this Policy, Assured Guaranty may appoint a fiscal agent (the'Fiscal Agenr) for purposes of this Policy by written notice to the Trustee or the Paying Agent, specifying the name and notice address of such Fiscal Agent.. From and after the date of Receipt of such notice by the Trustee or the Paying Agent copies of all notices and documents required to _ (Revised 08/1 SM) be delivered to Assured Guaranty pursuant to this Policy shall be delivered simultaneously to the fiscal Agent and to Assured Guaranty. All payments required to be made by Assured Guaranty under this Pol may be made directly by Assured Guaranty or by the Racal Agent on behalf of Assured Guaranty. The Fiscal Agent is the agent of Assured Guaranty only, and the Fiscal Agent shall in no event be liable to the Trustee or the Paying Agent for any acts of the Fiscal Agent or any failure of Assured Guaranty to deposh, or cause to be deposited, sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, Assured Guaranty hereby waives, in each case for the benefit of the Holders only, all rights and defenses of any kind (Including, without limitation, the defense of fraud in the tnd nI or in fact or any other circumstance that would have the effect of discharging a surety, guarantor or any other p n i Is w or In equity) that may be available to Assured Guaranty to deny a avoid payment of Its obligallo u d' i a xorclance with the express provisions hereof. Nothing in this paragraph will be construed (1) to IIIn o tie impair, and Assured Guaranty expressly reserves, Assured Guaranty's rights and remedies, I out Rat n: Its hl to assert any claim w to pursue recoveries (based on contractual rights, securities r W F lat ,'If s f ction) against any person or entity, In each case, directly or etgt' a u spn or I e, nt to making any Pay ment to the Trustee or the P In Agent, laze", nco wit t mT(*I(ms n , a r ) to uire payment by Assured Guaranty d any amounts t t e been or t i with the express provisions of this Policy. - This Polley (which nshco r�}i o e �¢dfAssured Guaranty with respect to t subject matter he n r o a ad a r agreement or Instrument, including, without Ilmkatkn, arvy moto or d nt f. TH I IS NOT COVERED BY THE PROPERTY /CASUALTY INSURANCE SE CIF E 6 OF THE NEW YORK INSURANCE.LAW. TM1is Policy will be governed by, and in a a Rh, the laws of the State of New York. lfbr IN WITNESS WH Guaranty has caused this Policy to be aed with Its corporate seal, to be signed by Its duly authorized officera effective and binding. upon Assured Guaranty by virtue of such signature. ASSURED GUARANTY CORP. (SEAL) By: Authored Officer Signature attested to by: Counsel (Revised 06/15!88) NOTICE OF NONPAYMENT This form Is not to be included In the Official Statement Assured Guaranty Corp. 1325 Avenue of the Americas New York, New York 10019 Attention: Risk Management Department - Public Finance Surveillance and General Counsel The undersigned, Is duly authorized officer of [TRUSTEE][PAYING AGENT]] (the - Trustee' or the "Paying Agent', hereby . certffes to Assured Guaranty Corp. ( "Assured Guaranty') with reference to Financial Guaranty Insurance Polley No. (the'Polky7, that: The deficiency with respect to the Insured Payment that is Due for Payment and unpaid by reason of Nonpayment on [insert applicable payment date] is $[insert applicable amount] (the 'Deficlency Amounr). The rTnlstee][Paying Agent] is making a claim under the Polley for the Deficiency Amount. The [fnrstee](Paying Agent] agrees that, following payment by Assured Guaranty made with respect to the Deficiency Amount which Is the subject of this Notice of Nonpayment, it will (a) cause such amounts to be applied directly to the payment of the applicable Insured Payment; (b) insure that such funds are not applied for any other purpose; and (c) cause an accurate record of such payment to be maintained with respect to the appropriate Insured Payment(s), the corresponding claim on the Policy, and the proceeds of such claim. The [rrustee][Paying Agent], on behalf of the Hollers, hereby assigns to Assured Guaranty all rights of the [frustee][Paying Agent] and the Holders with respect to the Obligations to this extent of any payments under the P , Including without Ilmitation any amounts due to the Holders in respect of securities haw violations arising from er an or sale of the Obligations; provided, that payments to Assured Guaranty In respect of the foregoing s n 11 cases be subject to and subordinate to the rights of the Holders to receive all payments In o the ion Th foregoing assignment is in addition to, and not in limitation of, rights of subrogation othe v Ilab u ra respect of such payments. The rrnatee][Paying Agent][Holderl shall take such act n de r In may be reasonably requested or required by Assured Guaranty to effectuate the p g(Es gm The [Tiustee][ Paying Agent], on t aff a d n ap ianty as agent and attorney- in-tact for the rrnrstee Ing a such r roceedi . respect to the Obligations. The (Trustee)[Payl t it y gas u s 1 n default In its payment obligations under the Policy, red u ra ty m t any 'ng D eeding by -or against the Issuer under the United States Ban y r le eivership, rehabilitation or similar law (an "Insolvency Poceeding di II afters I in to InsoN edIng, including, without limitation, (A) all maters relating to any claim in can ion t e nso king the avoidance as a preferential transfer of any payment made with respect to the at s "P ount"), (B) the direction of any appeal of any order relating to any Preference Amount at the expe u uara ut subject to reimbursement as provided in the documentation providing for the issuance of and securin the O , if any, and (C) the posting of any surety, supersedeas or performance bond pending any appeal.. In addition, the ][Paying Agentj hereby agrees that Assured Guaranty shall be fully subrogated o, and the [Trustee]paying Agent] on its behalf and on behalf of each Holder, hereby delegates and assigns, to the fullest extent permitted by law, the rights of the [TrusteeRPayi g Agent] and each Holder In the conduct of any Insolvency Proceeding, Including without limitation all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. Payment should be made by credit to the following account: Capitalized terms used in this Notice of Nonpayment and not otherwise dermed herein shall have the respective meanings ascribed thereto in the Policy. This Notice of Nonpayment may be revoked at any time by written notice of such revocation by the [Trustse][Paylg Agent][Holder] to the Assured Guaranty. ANY PERSON WHO KNOWINGLY AND WITH INTENT 70 DEFRAUD ANY INSURANCE. COMPANY OR 07HER PERSON FILES AN APPUCA77ON FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY M47ERWLLY FALSE INFORM4770N, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMA77ON CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCEACT, WHICH 1SA CRIMEAND SHALL ALSO BE SUBJECT 7 CIWL PEAf4L7YNOT TO EXCEED FIVE THOUSAND DOLLARSAND THESTA7ED VALUE OF THE CLAIM FOR EACH SUCH VIOLA77ON IN WITNESS WHEREOF, the undersigned has executed and delivered this Notice of Nonpayment as of the _ day of of — - [TRUSTEE/PAYING AGENT] By: Name: Tito: FORM OF OPINION OF ASSURED GUARANTY CORP. Re: Financial Guaranty Insurance Policy No. (the'Poikyr) relating Ladies and Gentlemen: This opinion letter has been requested of the undersigned, In the rapacity of the undersigned as of Assured Guaranty Corp., a Maryland corporation (' Assured Guaranty' In connection with the issuance by Assured Guaranty of its Policy effective as of the date hereof. In connection with this opinion letter, I have examined an execution copy of the Policy and such documents, certificates, agreements and Instruments and proceedings as I have considered necessary or appropriate under the circumstances to render the following opinion. As to all questions of fact material to this opinion letter, which have not been independently established by me, 1 have relied upon certificates or comparable documents of public officials . or of officers and representedwss of Assured Guaranty. In addition, I have assumed the genuineness of all signatures other than those of representatives of Assured Guaranty, the authenticity of all documents submitted to me as originals, the conformity to the original document of certified or photostatic copies thereof and the authenticity of the originals of such letter documents. Based upon the foregoing, and subject to the limitations and qualifications hereinafter set forth, I am of the opinion that: 1. Assured Guaranty is a corporation duly incorporated and validly existing under the laws of the State of Maryland and has all requisite corporate power and authority to issue and to perform Its obligations under the Policy in accordance with the terms thereof. 2. The execution and delivery by Assured Guaranty of the Policy, and the performance by Assured Guaranty of Its obllgations thereunder, have been duty authorized by ell necessary corporate scion on the part of Assured Guaranty. 3. - The Policy has been validly executed and delivered by Assured Guaranty, and constitutes the legal, valid and binding obligation of Assured Guaranty, enforceable against Assured Guaranty in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, liquidation, rehabilitation, moratorium, arrangement, fraudulent conveyance or similar laws or enactments now or hereafter enacted affecting the enforcement of creditors' -rights generally, as well as to equitable principles of general application limiting the avallsbRity of equitable remedies and the discretion of the court before which any proceeding therefor may be brought (regardless. In each case, of whether enforcement is sought in 'a proceeding in equity or at low). I am licensed to practice law In the State of New York, and do not purport to be an expert as to, or to express any opinion concerning the laws of any other jurisdiction other then the laws - of the State of New York and the federal laws of the United States of America to the extent specifically referred to herein. To the extent that the opinions set forth herein purport to deal with matters of Maryland law, . the statements made therein are based solely upon my review of the corporate documents of Assured Guaranty, my reading of the Maryland General Corporation Law and, in respect of the opinion set forth In paragraph (1) above, my reading of the Maryland Insurance Code. The opinions expressed herein are limited to the matters expressly set forth herein, and no opinion is Implied or may be inferred beyond the matters expressly set forth herein. The opinions "pressed hereln are based solely on factual matters in existence as of the date hereof and ,laws and regulations In effect on the date hereof I assume no oblgaWn to revise or supplement this opinion letter should such factual matters change or should such laws or regulations be changed by legislative or regulatory action, judicial decision or otherwise, and I hereby express no opinion as to the effect any such charges may have on the foregoing opinions. This opinion letter is being delivered to you solely for your benefit in connection with the Issuance of the Policy, and may not be used, circulated, quoted or otherwise referred to or relied upon for any other purpose by any other person, In each case without my express prior written consent. Very truy yours, FORM OF CERTIFICATE OF ASSURED GUARANTY CORP. In connection with the issuance of (the 'Obligations') by (the 'Issuer'), Assured Guaranty Corp. ( 'Assured Guaranty') is issuing financial guaranty insurance policy no. D-_ (the "Policy') guaranteeing, when due, the principal of and interest on the Obligations, all as set forth In the Policy. On behalf of Assured Guaranty, the undersigned hereby certifies that: (i) the Policy is an unconditional and recourse obligation of Assured Guaranty (enforceable on behalf of the holders of the Obligations) to pay the scheduled payments of interest and principal on the Obligations in the event of a Nonpayment by the Issuer (as defined in the Policy); (it) the insurance premium of $ was determined in an arm's length negotiation in accordance with our standard procedure, and is required to be paid as a condition of the issuance of the Policy; (ill) no portion of such premium represents a payment for any direct or Indirect services other than the transfer of credit risk; (iv) Assured Guaranty is not a co-obligor on the Obligations and does not reasonably expect that it will be called upon to make any payment under the Policy; (v) the Issuer is not entitled to a refund of premium for the Policy in the event that the Obligations are retired prior to their stated maturity; (vi) there has not come to the attention of the undersigned any information which would cause the undersigned to believe that the description of the Insurer under the caption "Insurance - Assured Guaranty Corp.' in the official statement relating to the above referenced Obligations dated (the "Official Statement, as of the date of the Official Statement or as of the date of this certificate, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (vii) Assured Guaranty is not currently in default nor has Assured Guaranty ever been in default under any policy or obligation guaranteeing the payment of principal of or interest on an obligation; and (viii) Except for the insurance premium referred to in paragraph (fl) above, neither Assured Guaranty nor any party related to Assured Guaranty within the meaning of Section 1.150 -1(b) of the Treasury Regulations will use any portion of the proceeds of the Obligations. IN WITNESS WHEREOF, Assured Guaranty has caused this certificate to be executed in its name on this _ day of 20_, by one of its duty authorized officers. ASSURED GUARANTY CORP. By: Authorized Officer - ASSURED GUARANTY CORP. QUALIFIED INVESTMENTS. FOR INDENTURED FUNDS (a) Cash (fully insured by the Federal Deposit Insurance corporation), (b) Direct obligations (other than an obligation subject to variation in .principal repayment) of the United States of America ('U.S. Treasury Obligations'), (b) obligations fully and uncondibonaly guaranteed as to limey payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying govemment obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. THE ABOVE REFERENCED OBLIGATIONS MAY CONSTITUTE DEFEASANCE OBLIGATIONS. Any security used for defeasance must provide for the timely payment of principal and interest and cannot be callable or prepayable prior to maturity or earlier redemption of the rated debt (excluding securities that do not have a fixed per value and/or whose terms do not promise a fixed dollar amount at maturity or call date). 2. Federal Housing Administration debentures. 3. The listed obligations of government- sponsored agencies which are not backed by the full faith and credit of the United States of America: a) Federal Hoare Loan Mortgage Corporation (FHLMC) senior debt obligations and Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) b) Farm Credit System (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) consolidated system -wide bonds and notes c) Federal Home Loan Banks (FHL Banks) consolidated debt obligations d) Federal National Mortgage Association (FNMA) senior debt obligations and .mortgage-backed securities(exduded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) 4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 365 days) of any bank the short-tern obligations of which are rated 'A -1 +" or better by S&P and "Prime -1" by Moody's. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation, in banks which have capital and surplus of at least $15 million. 6. Commercial paper (having original maturities of not more than 270 days) rated 'A -1+ ".try S&P and "Prime -1" by MOWS. 7. Money market funds rated "Aam" or 'Aft-G" by S&P, or better and if rated by Moody's rated'Aa2" or better. 8. 'State Obligations', which means: a) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a. state the unsecured general obligation debt of which is rated at least "A3" by Moody's and at least "A-" by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency . whose unsecured general obligation debt is so rated. b)- Direct -- generalshort-term obligations of any state agency or subdivision or agency thereof described in (a) above and rated "A -1 +" by S&P and "MIG -1' by Moody's. c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state or state agency described In (b) above and rated 'AA-" or better by S&P and'Aa3' or better by Moody's. 9. Pre - refunded municipal obligations rated 'AAA" by S&P and "Aaa" by Moody's meeting the following requirements: a) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the Issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such. instructions; b) the municipal obligations are secured by cash or U.S. Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; c) the principal of and interest on the U.S. Treasury Obligations (plus any cash in the escrow) has been verified by the report of Independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, If any, due and to become due on the municipal obligations (" Verification Report'); d) the cash or U.S. Treasury Obligations serving . as security or the municipal obligations are held by an escrow agent or trustee in trust or owners of the municipal obligations; e) no substitution of a U.S. Treasury Obligation shall be permitted except with another U.S. Treasury Obligation and upon delivery of a new Verification Report; and f) the cash or U.S. Treasury Obligations are not available to satisfy any other claims, Including those by or against the trustee or escrow agent. 10. Repurchase agreements: with (1) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least W" by S&P and "A3" Moody's; or (2) any broker - dealer with "retail customers' or a related affiliate thereof which broker - dealer has, or the parent company- (which guarantees the provider) of which has, long- term debt rated at least "A-" by S&P and 'A3' by Moody's, which broker - dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated at least "A" by S&P and 'A3' Moody's and acceptable to Assured Guaranty (each an `Eligible Provider), provided that: a) (1) permitted collateral shall Include U.S. Treasury . Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted or these providers), and (11) collateral levels must beat - least 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA's and 104% of the total principal when the collateral type is FNMA and FHLMC ( "Eligible Collaterel7; b) the trustee or a third parry acting solely as agent therefore or or the issuer (the 'Custodian') has possession of the collateral or the collateral has been transferred to the Custodian in accordance with applicable state and federal laws (other than by means of entries on the transferors books) and such collateral shall be marked to market; c) the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the trustee, the issuer and Assured Guaranty setting forth the type of collateral, the collateral percentage required or that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; d) the repurchase agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of Assured Guaranty; e) the repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; _f) the repurchase agreement shall provide that t during its term the provider's rating by either Moody's or S &P is withdrawn or suspended or falls below 'A-' by S &P or 'AY by Moody's, as appropriate, the provider must, notify the issuer, the trustee and Assured Guaranty within five (5) days of receipt of such notice. Within ten (10) days of receipt of such notice, the provider shall either: (I) provide a written guarantee acceptable to Assured Guaranty, (II) post Eligible Collateral, or (ill) assign the agreement to an Eligible Provider. If the provider does not perform a remedy within ten (10) business days, the provider shall, at the direction of the trustee (who shall give such direction If so directed by Assured Guaranty) repurchase all collateral and terminate the repurchase agreement, with no penalty or premium to the issuer or the trustee. 11. Investment agreements: with a domestic or foreign bank or corporation the long -term debt of which, or, in the case of a guaranteed corporation the long -term debt, or, In the case of a monoline financial guaranty Insurance company, claims paying ability, of the guarantor is rated at least 'AA-" by S &P and "Aa3" by Moody's, and acceptable to Assured Guaranty (each an 'Eligible Provider'); provided that: a) interest payments are to be made to the trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the construction fund, construction draws) on the Bonds; b) the Invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven (7) days' prior notice; the issuer and the trustee hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; c) the provider shall send monthly reports to the trustee, the issuer and Assured Guaranty setting forth the balance the issuer or trustee has invested with the provider and the amounts and dates of Interest accrued and paid by the provider, d) the investment agreement shall state that is an unconditional and general obligation of the provider, and is not subordinated to any other obligationof, - theprovider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pad passu with the obligations of the provider to its other depositors and Its other unsecured and unsubordinated creditors; e) the investment agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of Assured Guaranty; f) the issuer, the trustee and Assured. Guaranty shall receive an opinion of domestic counsel to the provider that such investment agreement is legal, valid, binding and enforceable against the provider in accordance with its terms; g) the Issuer, the trustee and Assured Guaranty shall receive an opinion of foreign counsel to the provider (if applicable) that (1) the investment agreement has been duly authorized, executed and delivered by the provider and constitutes the legal, valid and binding obligation of the provider, enforceable against the provider in accordance with its terms (b) the choice of law of the state set forth in the investment agreement is valid under that country's laws and a court In such country would uphold such choice of law, and (c) any Judgment rendered by a court in the United States would be recognized and enforceable in such.country; h) the investment agreement shall provide that If during its tens: the provider's rating by either S &P or Moody's falls below'AA --' or'Aa3", the provider shall, at Its option, within ten (10) days of receipt of publication of such downgrade, either (1) provide a written guarantee acceptable to Assured Guaranty, (ii) post Eligible Collateral with the Issuer, the trustee or a third party acting solely as agent therefore (the "Custodianj free and clear of any third party liens or claims, or (ill) assign the agreement to an Eligible Provider, or (iv) repay the principal of and accrued but unpaid interest on the investment; ii) the provider's rating by either S &P or Moody's is withdrawn or suspended or falls below "A-" or "A3 ", the provider must, at the direction of the issuer or the trustee (who shall give such direction If so directed by the Insurer), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid Interest on the investment, in either case with no penalty or premium to the issuer or trustee. in the event the provider is required to collateralize, permitted collateral shall Include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers) and collateral levels must be 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type isGNMA's and 104% of the total principal when the collateral type is FNMA and FHLMC ("Eligible Collateral "). In addition, the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the trustee, the issuer and Assured Guaranty setting forth the type of collateral, the collateral . percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; )) the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral Is required to be pledged by the provider under the term - of the investment agreement, at the time such collateral is delivered, that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; k) the investment agreement must provide that If during its term: (i) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the issuer or the trustee (who shall give such direction K so directed by the Assured Guaranty), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the issuer or trustee, as appropriate, and (0) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. Covent of Insolvency'), the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the issuer or trustee, as appropriate. Investment Guidelines - Qualified Investments (10107) RESE(ZVE TopwNz ASSUUD GU�!�RAN'TY' T ENDURING FINANCIAL STRENGTH" AAA 56 P•Aaahbadyx•AAA fi&h Commitment to Issue Reserve Fund Insurance Poll Issuer. City of Pueblo, Colorado Municipal Building Corporation Obligor. City of Pueblo, Colorado Commitment Date: September 26, 2008 Expiration Date: December 26, 2008 Obligations: Not to Exceed $25,050,000 City of Pueblo, Colorado Municipal Building Corporation Certificates of Participation, Series 2008 (Police. Complex Project) Insured Obligations: Not to exceed $2,505,D00 ('Policy Limir) Insurance Premfurrc The Issuer will pay to Assured Guaranty on the date of issuance of the Obligations a non-refundable premium in an amount equal to 3.25% of the Policy Limit On the terms and subject to the conditions set forth herein (this ' Commitment ), Assured Guaranty Corp., a Maryland insurance corporation ( Assured Guaranty °), hereby commits to issue a financial guaranty insurance policy with respect to the reserve fund for the Obligations referenced above, which financial guaranty insurance policy shall be substantially In the form attached hereto (the *Policy). Unless accepted by the Obligor, by the Expiration Date, this Commitment shall expire, and be of no further force and effect, at 5:00 p.m., Eastern Standard Time, on such Expiration Date, unless extended by Assured Guaranty in its sole discretion by written notice to the Obligor. Any .request by the Obligor for any such extension must - bemade to Assured Guaranty prior to 5:00 p.m., Eastern Standard Time, on such Expiration Date. " Business Day ", for all purposes hereof, shall mean any day other than (i) a Saturday or Sunday, (ii) any day on which the offices of the Trustee or Paying Agent (as defined in the Policy) or Assured Guaranty are closed, or (iii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in New York City or in the States of Maryland or New York. Upon acknowlodgement and acceptance by the Obligor, this Commitment shall constitute a binding agreement between Assured Guaranty and the Obligor with respect to the subject matter hereof, enforceable against each such parry in accordance with its terms, provided, howevar, that this Commitment shall expire, and be of no further force and effect, to the extent that Assured Guaranty shall not have issued the Policy as contemplated hereby on or prior to the Expiration Date. Upon the execution of this Commitment by Assured Guaranty, and the Obligor and in consideration of the Issuance of this Commitment by Assured Guaranty, the Obligor hereby agrees that it will not enter into any discussions . or negotiations with, or seek any commitment from, any financial guarantor other than Assured Guaranty, for the issuance of a reserve fund insurance policy with respect to the Obligations, provided, that the Obligor may determine prior to the Expiration Date not to fund the reserve fund with a financial guaranty insurance policy, in which case the Obligor agrees to notify Assured Guaranty Immediately after making such determination. The issuance of the Policy by Assured. Guaranty is subject to the satisfaction or waiver by Assured Guaranty of the following conditions, and the Issuer hereby further agrees as follows: Offering Documents and Other Legal Documentation. Assured Guaranty shall be provided with: a. Executed copies of all financing documents, the official statement (or any other disclosure document) with respect to the Obligations (any and all such disclosure collectively, the "Official Statement and all legal opinions delivered in connection with the issuance and sale of the Obligations. Such legal opinions shall include all opinions as are customary for financings of the type contemplated, Including without limitation the unqualified approving opinion of bond counsel .rendered by a law firm acceptable to Assured Guaranty in its sole discretion. Such opinions shall be addressed to Assured Guaranty or, if not so addressed, a letter shall be provided to Assured Guaranty expressly providing that Assured Guaranty is entitled to rely on such opinions as if such opinion were addressed to Assured Guaranty. b. A copy of any insurance policy, surety bond, guaranty, indemnification. or any other policy, contract or agreement, which provides for the payment of all or any portion of the Bond Obligations, or in any way secures, insures or enhances the cash flow available to pay the Bond Obligations. a Confirmation that an amount equal to the insurance premium to be paid to Assured Guaranty upon issuance of the Policy, if any, has been deposited to the account of Assured Guaranty. No Material Adverse Change. On the date hereof and on the closing date pertaining to the issuance of the Bond Obligations (the `Closine Date there shall have been no material adverse change in or affecting the Issuer, the Obligor or the Bond Obligations (including, without limitation, the security for the Bond Obligations or the proposed debt service schedule of the Bond Obligations), the financing documents to be executed and delivered with respect to the Obligations, or the Official Statement, the legal opinions to be executed and delivered in connection with the Issuance and sale of the Bond Obligations, or any information submitted to Assured Guaranty with respect to the Issuer or the Bond Obligations, from that previously delivered or otherwise communicated to Assured Guaranty. No Event Affecting Purchase of Bond Obligations. No even shall have occurred which would permit any otherwise committed purchaser of the Bond Obligations to elect not to purchase the Bond Obligations on the date scheduled for the issuance and delivery thereof. Repayment of Draws under the Policy. The Issuer shall repay any draws under the Policy and pay all related expenses incurred by Assured Guaranty. In addition, the issuer shall be required to enter into a reimbursement agreement, substantially in the form included in the Assured Guaranty Surety Package, with Assured Guaranty pursuant to which the Issuer shall reimburse Assured Guaranty for any amounts which have been paid and have not been reimbursed to Assured Guaranty under the Policy.. Payments Due under the Policy. Ali amounts on deposit under the resolution or trust indenture authorizing the issuance of the Bond Obligations, shall be used to pay debt service on the Bond Obligations before any drawing may be made on the Policy or any other credit facility (other than the financial . guaranty insurance polity issued by Assured Guaranty). When replenishing the debt service reserve fund the Issuer shall reimburse Assured Guaranty for any draws on the surety policy prior to replenishing the cash on deposit in the debt service reserve fund. Upon any such draw on the debt service reserve fund, the Issuer shall replenish such draw within twelve (12) months of such draw. No Untrue Statement or Omission. The Official Statement, the documents to be executed and delivered in connection with the - issuance and sale of the Bond Obligations and all information and documents submitted to Assured Guaranty with respect to the Bond Obligations and the Issuer, shall not contain any untrue or misleading statement of material fact, nor omit to state a material fact necessary in order to make the information contained therein not misleading. Assured Guaranty shall receive an opinion of counsel or a certificate of an authorized officer of the Issuer and the Obligor, as applicable, confirming the same. Document Requirements. The financing documents authorizing the issuance of the Bond Obligations shall require the Trustee or the Paying Agent to determine the necessity for a claim under the Policy and to provide notice to Assured Guaranty in accordance with the terms of the Policy. Kral Documents. Assured Guaranty shall have received the substantially final forms of all documents (including, without limitation, legal opinions, schedules and exhibits), incorporating Assured Guaranty's comments in a manner acceptable to Assured Guaranty, on or prior to the fifth (5th) Business Day prior to the proposed closing of the issuance of the Bond Obligations. Any provisions or requirements of the bond purchase contract or any other documentation which refer to Assured Guaranty or to the Policy must be delivered to Assured Guaranty no later than five (5) Business Days prior to the contemplated sale of the Bond Obligations. -2- Offering Documents; Closing Transcript. On the day of issuance and delivery of the Obligations, as a condition of delivery of the Policy, duplicate originals of the primary financing- documents and legal opinions shall be immediately delivered by hand or sent via overnight mail for delivery not later than the day of the closing. WfMin thirty (30) days after fhe closing for the Obligations, Assured Guaranty will be provided with four (4) complete sets of executed documents preferably on CD -ROM, or N- CD -ROMS are not available, or soft bound copies of the vansaipt Inspection Rights; Financial Statements. The Obligor must allow Assured Guaranty or its agent access to all non - confidential records. The Obligor must provide to Assured Guaranty such records and notices as reasonably may be requested by Assured Guaranty, including without limitation the following: financial reports, operational statistics and strategic plans, if any, and any other records or notices to be provided to the Trustee pursuant to the tars of the master indenture, any supplemental indenture or other financing documentation relating to the Obligations. Additional Requirements. Assured Guaranty shall insure the Bond Obligations pursuant to Its Commitment related to the Bond Obligations. Expiration of the Policy. The Policy shall expire on the date the Bond. Obligations (other than Bond _Obligations held by Assured Guaranty) are no longer outstanding.. Opinion Letter. Assured Guaranty shall be addressed on an opinion of counsel to the Issuer which shall indicate that the reimbursement agreement has been duty authorized and executed by the Issuer and such agreement is legal; valid and binding obligation of the Issuer enforceable against the issuer. Legal Fees. Assured Guaranty will be responsible for its own attorneys' fees and expenses incurred by Assured Guaranty in connection with the issuance of the Policy. CORP. Murray The undersigned hereby accepts the commitment of Assured Guaranty Corp. to issue its Policy with respect to the captioned Obligations on the terms and subject to the conditions set forth in the Commitment with respect thereto.issued by Assured Guaranty Corp. on the Commitment Date set forth above. Acknowledged, accepted and agreed to as of 0c1' 1 ' 4 —2008 CITY OF PUEBLO, ORAD Name: Barbara Vidmar Title: President of the City Council -3- ASSURED GUARANTY CORP. PRINTING AND DISCLOSURE PACKET FOR MUNICIPAL FINANCE TRANSACTIONS (SURETY POLICY) �'�."1% This packet is intended for use by bond counsel, printers and preparers of municipal offerings that will be insured by Assured Guaranty. Copies of each draft of each preliminary and final official statement should be delivered to Assured Guaranty for review and comment with reasonable opportunity to submit any comments prior to printing. 670 (LegaVPF /Dlscb ura Packet/Surety) FORM OF DismostiRE 1. The following. are Assured Guaranty's . requirements for printing the preliminary and final official statements: a. Both the preliminary and final official statements must contain the language set forth in this packet and Assured Guaranty must be provided with final drafts for its approval and sign off thereon at least two business days prior to the printing thereof. b. Any changes made to the Assured Guaranty disclosure language for inclusion in the preliminary and final official statements must first be approved by Assured Guaranty. 2. The following disclosure language is to be printed In the body of the official statement or as any exhibit THE RESERVE FUND INSURANCE POLICY Assured Guaranty has made a commitment to issue a financial guaranty insurance policy for the reserve fund with respect to the Bonds (the `Reserve Fund Insurance Policy"), effective as of the date of issuance of such Bonds. Under the terms of the Reserve Fund Insurance, Assured Guaranty will unconditionally and Irrevocably guarantee to pay thatportion of the scheduled principal and interest on the Bonds that becomes due for payment but shall be unpaid by reason of nonpayment by the issuer (the 'Insured Payments'). Assured Guaranty will pay each portion of an Insured Payment that is due for payment and unpaid by reason of nonpayment by the Issuer to the Trustee or Paying Agent, as beneficiary of the Reserve Fund Insurance Policy on behalf of the holders of the Bonds on the later to occur of (i) the date such scheduled principal or interest becomes due for payment or (Ii) the business day next following the day on which Assured Guaranty receives a demand for payment therefor in accordance with the terms of the Reserve Fund Insurance Policy. No payment shall be made under the Reserve Fund Insurance Policy in excess of $ , (the "Reserve Fund Insurance Policy Limit). Pursuant to the terms of the. Reserve Fund Insurance Policy, the amount available at any particular time to be paid to the Trustee or Paying Agent shall automatically be reduced to the extent of any payment made by Assured Guaranty under the Reserve Fund Insurance Policy, provided, that, to the extent of the reimbursement of such payment to Assured Guaranty, the amount available under the Reserve Fund Insurance Policy shall be reinstated in full or in part, in an amount not to exceed the Reserve Fund Insurance Policy Limit. The Reserve Fund Insurance Policy does not insure against nonpayment caused by the insolvency or negligence of the Trustee or Paying Agent. The Reserve Fund Insurance Policy is not covered by any insurance or guaranty fund established under New York, California, Connecticut or Florida Insurance law. ASSURED GUARANTY ENDURING FINANCIAL SDRENG1`11° A A SbP -Asa Moody • AAA Fifth Financial Guaranty Insurance Policy (Reserve Fund) Issuer. Obligations: Polley Limit: The lesser of (1) $ or (it) the reserve requirement as set forth In the Transaction Documentation. The Policy Limit shell automatically and irrevocably be reduced from time to time by the amount of each reduction In the reserve fund requirement, as _provided in the Transaction Documentation. Assured Guaranty Corp., a Maryland corporeC Premium and on the terms and subject to the conditions th unconditionally and Irrevocably agrees to pay to the t Obligations (as set forth in the Transaction Documan n), r which shall become Due for Payment but shall be unpa' Assured Guaranty will make a Insu P m (I) the date applicable principal or Imerest Mae Dus r Assured Guaranty shat have Received Go of Incomplete or does not in any Instan fo to terms and Assured Guaranty shall promptly g not o e T sect Paying. Agent may submit an a nded No me Payments only upon receipt by u for Agent's right to .receive me , nd id assignment, that III Trus Paying. A9 's hts to thereupon vest in As red Guars Pon a to the reimbursement of am t pe w' in at Payment by Asgurep r ran to T ort eying n Assured Gut to th ext of such men refundable tic a . Thislmli k arry cvxtoes not Policy No.: Premium: payment of the hereto), hereby Agent) for the sured Payments e t a @ Agent on the later to occur of e o ii) ay next following tae day on which Y nt. If a Nonpayment by Assured Guaranty is dh(o o t shall be deemed not Received, and 3riq nt`Ujb:xi receipt of such notice, the Trustee or the e at or the Paying Agent will disburse the Insured ab sa ry to t of (1) evidence of the Trustee or. Paying Iricu ng without limitation any appropriate: instruments of pay em of such principal or interest Due for Payment shall of h payment, Assured Guaranty shall become entitled to and expenses) Pursuant to the Reimbursement Agreement. uarty u t ' P t for the benefit of the Holders shall discharge the obligation of for any reason. The Premium on this Policy Is not other than Nonpayment. amount avai his Policy shall riot exceed the Policy Lunt. The amount available at any particular time to be pail to th ng. em under the terms of this Policy shall automatically be reduced by any payment under the Polle ev aft y. How su ,the amount available under this Policy shall be reinstated in full or part, but only up to the Policy Li ,to ext t ot the reimbursement of such payment (exclusive of interest and expenses) to Assured Guaranty pursuant to Reimbu ment Agreement. Within three (3) Business Days of such reimbursement, Assured Guaranty shalt provide the or the Peyhng Agent with a Notice of Reinstatement and such reinstatement shall be effective as of the date Assured Guaranty gives such notice. If the amount payable under this Polley is also payable under another Insurance policy or surety bond insuring the Obligations, payment first shall be made under this Polley to the extent of the amount available under this Policy up, to the Policy Limit. In no event shall Assured Guaranty incur duplicate liability for the same amounts owing with respect to -the - Obligations that am covered under this Policy and any other insurance policy or surety bond that Assured. Guaranty has issued. Except to the extent expressly modified by any - endorsement hereto, the following terms shat have the meanings specified for all purposes of this Policy. 'Avoided Payment" means any amount previously distributed to a Holder in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code In accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable preference with respect to such Folder. 'Business Day" means any day other than (1) a Saturday or Sunday, (il) any day on which the offices of the Trustee,. the Paying Agent or Assured Guaranty are closed, or (Iii) arty day on which banking institutions am authorized or required by law, executive order or governmental decree to be closed In the City of New York or in the State of Maryland. "Due for Payment" means () when referring to the principal of an Obligation, the stated maturity dale thereof, or the date on which such Obligatlon shall have been duly called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment Is due by reason of a call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty In is sole discretion elects to make any principal payment, in whole or in part, on such earlier date) and means (II) when referring to interest on an Obligation, the stated date for payment of such interest. 'Holder" means, in respect of any Obligation, the person or entity who, at the time of Nonpayment, is entitled undo the terms of such Obligation to payment of principal or Interest thereunder, except that Holder shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Obligations. 'Insured Payments" means that portion of the principal of and interest on Assured Guaranty Corp. 1925 Avenue of the America main 212974 moo infogassumoguaramy.wm xu suuredguaranty.can New Yak NY 10019 fax 212 581 3268 —_1 - -_ - - -- the Obligations that shall become Due for Payment but shall be unpaid by reason of Nonpayment "Nonpayment" means, in respect of an Obligation, the failure of the Issuer to have provided sufficient funds to live Trustee or the Paying Agent for payment in full of all principal and Interest Due for Payment on such Obligation. It is further understood that the term "Nonpayment" in respect of an Obligation Includes any Avoided Payment. Notice of Reinstatement" means the notice. from Assured Guaranty to the Trustee or the Paying Agent reinstating the Policy coverage in an amount not greater than the Palley Limit. 'RecelpP or "Received' means actual receipt or notice of or, If notice is given by overnight or other delivery service, or by certified or registered United Slates mail, by a delivery receipt signed by a person authorized to accept delivery on behalf of the person to whom the notice was given. Notices to Assured Guaranty may be mailed by registered mall or personally delivered or telecopied to it at 1325 Avenue of the Americas, New York, New York 10019, Telephone Number (212) 974-0100, Facsimile Number. (212) 581 -3268, Attention: Risk Management Department - Public: Finance Surveillance, with a copy to the General Counsel, or to such other address as shall be specified by Assured Guaranty to the Trustee or the Paying Agent in writing. A Notice of Nonpayment will be deemed to be Received by Assured Guam n a given Business Day 8 k Is Received prior to 12:00 noon (New York City time) on such Business Day; otherwise it wlli road Received on the next Business Day. "Reimbursement Agreement' shall mean the Reimbursement Agree ment the I ssuer or the obligor on the Obligations, as applicable, and Assured Guaranty, effective as of the date . 'Te ' m ns the period from and including the Effective Date until the earlier of (i) the maturity date for the ObligaC or (ii) too which the Issuer has made all payments required to be made on the Obligations. 'Transaction " mea d mentatlon providing for the issuance of and securing the Obligations. - At any time during the Tenn of the Polley, I purposes of this Policy by written notice to the Trustee or Fiscal Agent. From and after the date of Receipt of sucht documents required to be delivered to Assured Guarauty F Agent and to Assured Guaranty. All payments directly by Assured Guaranty or by the Fiscal A"] on be Guaranty only, and the Fiscal Agent shall in - be, Agent or any failure of GuarantyAssuredGuaranty t ct this Policy. To the fullest extent of the Folders only, all rights and dE fact or any other circumsta thal equity) that may be avail, abl o with the express prov h Assured Guaranty ax ty any claim or to pursue a it any person or e h c any payment the or thi nt ages - Fiscal Again) for the nd notice address of such a P Ing em, pies of all notices and be a simulfaneousy to the Fiscal r this Policy may be made e F Agent is the agent of Assured. Payi Agent for any ads of the Fiscal :o unds to make payments due under r, asi r Thereby waives, in each case for the benefit w IW ' the defense d fraud in the inducament or in I' arg rely, guarantor or any other person in law or in nt of Its obligations under this Policy In accordance h I mnsUUed (i) to waive, limit or otherwise Impair, and remedies, including, without limitation: its right o assert dries law violations, fraud or other causes of action) against das a subrogee, assignee or otherwise, subsequent to making ante with the express provisions hereof, and/or (II) to require Previously paid or that are not otherwise due in accordance with each apdarsement hereto) sets forth in full the undertaking of Assured Guaranty with rof, nd m rot be modified, altered or affected by any other agreement or instrument, nods t thereto or amendment thereof. THIS POLICY IS NOT COVERED BY THE VCE S CURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE by, and shall be construed In accordance with, the laws of the State of New York. 1 E WHEREOF, Assured Guaranty has caused this Policy to be affixed with its corporate seal, to be signed by its y a oriz officer; and to become effective and binding upon Assured Guaranty by virtue of such signature. ASSURED GUARANTY CORP.: (SEAL) By: Authorized Signature attested to by: Counsel -2- FORM OF OPINION OF ASSURED GUARANTY CORP. Re: Financial Guaranty Insurance Policy No. (the 'Policyl relating to Ladies and Gentlemen This opinion letter has been requested of the undersigned, in the capacity of the undersigned as of Assured Guaranty Corp., a Maryland corporation {'Assured Guaranty"), in connection with the issuance by Assured Guaranty of its Policy effective as of the date hereof. In connection with this opinion letter, I have examined an execution copy of the Policy and such documents, certificates, agreements and instruments and proceedings as I have considered necessary or appropriate under the circumstances to render the following opinion. As to all questions of fact material to this opinion letter, which have riot been irxlependently established by me, I have relied upon certificates or comparable documents of public officials or of officers and representatives of Assured Guaranty. In addition, I have assumed the genuineness of all signatures other than those of : representatives of Assured Guaranty, the authenticity of all documents submitted to me as originals, the conformity to the original document of certified or photostatic copies thereof and the authenticity of the originals of such latter documents. Based upon the foregoing, and subject to the limitations and qualifications hereinafter set forth, I am of the opinion that: 1. Assured Guaranty is a corporation duty incorporated and validly existing under the laws of the State of Maryland and has all requisite corporate power and authority to issue and to perform its obligations under the Policy in accordance with the terms thereof. 2. The execution and delivery by Assured Guaranty of the Policy, and the performance by Assured Guaranty of its obligations thereunder, have been duly authorized by all necessary corporate action on the part of Assured Guaranty. 3. The Policy has been validly executed and delivered by Assured Guaranty, and constitutes the legal, valid and binding obligation of Assured Guaranty, enforceable against Assured Guaranty in accordance with Its terms, subject to applicable bankruptcy, reorganization, insolvency, liquidation, rehabilitation, moratorium, arrangement, fraudulent conveyance or similar laws or enactments now or hereafter enacted affecting the enforcement of credftors' rights generally, as well as to equitable principles of general application limiting the availability of equitable remedies and the discretion of the court before which any proceeding therefor may be brought (regardless, in each case, of whether enforcement is sought In a proceeding In equity or at law). I am licensed to practice law in the State of New -York, and do not purport to be an expert as to, or to express any opinion concerning the laws of any other jurisdiction other than the laws of the State of New York and the federal laws of the United States of America to the extent specifically referred to herein. To the extent that the opinions set forth herein purport to deal with matters of Maryland law, the statements made therein are based solely upon my review of the corporate documents of Assured Guaranty, my reading of the Maryland General Corporation Law and, in respect of the opinion set forth in paragraph (1) above, rry reading of the Maryland Insurance Code. The opinions expressed herein are limited to the matters set forth herein, and no opinion is Implied or may be inferred beyond the matters expressly set forth herein. The opinions expressed herein are based solely on factual matters in existence as of the date hereof and laws and regulations in effect on the date hereof. I assume no obligation to revise or supplement this opinion letter should such factual matters change or should such laws or regulations be changed by legislative or regulatory action, judicial decision or otherwise, and I hereby express no opinion as to the effect any such changes may have on the foregoing opinions. This opinion letter is being delivered to you solely for your benefit in connection with the Issuance of the Policy, and may not be used, circulated, quoted or otherwise referred to or relied upon for any other . purpose by any other person, in each case without my express prior written consent. Very truly yours, FORM OF REIMBURSEMENT AGREEMENT (RESERVE FUND SURETY) REIMBURSEMENT AGREEMENT (RESERVE FUND SURETY) This AGREEMENT (this "Agreement's is made as of [INSERT DATE] by and between ASSURED GUARANTY CORP., a Maryland insurance corporation (together with its successors and assigns, 'Assured Guarany"), and [INSERT COUNTERPARTY], [INSERT TYPE OF CORPORATION] (together with its successors and assigns, the "Issuer"). WITNESSETH: WHEREAS, the Issuer ((as hereinafter defined)) will issue the Obligations (as hereinafter defined) pursuant to the terms of the Authorizing Resolution (as hereinafter defined); WHEREAS, pursuant to the terms of the Financing Agreement (as hereinafter defined) the Issuer has agreed to make certain payments with respect to the Obligations; WHEREAS, the Issuer has requested that Assured Guaranty, subject to the terms and conditions set forth in the Commitment, issue its Policy (as hereinafter defined) pursuant to which Assured Guaranty will guarantee certain payments by the Issuer subject to the terms and conditions of the Policy; WHEREAS, as consideration for Assured Guaranty issuing the Policy, the Issuer has agreed to (i) cause to be paid to Assured Guaranty a premium as provided in the Commitment, (ii) reimburse Assured Guaranty for any payment made by Assured Guaranty under the Policy, and (iii) indemnify Assured Guaranty for certain amounts as more fully set forth herein; WHEREAS, the Issuer acknowledges and agrees that execution and delivery of this agreement is a requirement of Assured Guaranty and an element of the consideration for issuance of the Policy; NOW, THEREFORE, in consideration of the premises and of the agreements herein contained and of the execution of the Policy, the Issuer and Assured Guaranty agree as follows: ARTICLE I DEFINITIONS Section 1.01. Defintons. Except as otherwise defined herein, the following words and phrases shall have the following meanings: "Agreemenf shall mean this Reimbursement Agreement dated [INSERT DATE] between Assured Guaranty and the Issuer, as such agreement maybe amended or supplemented. "Assured Guarent)r shall have the meaning set forth in the first paragraph of this Agreement. Authonzing Resoiuboif shall mean the [INSERT AUTHORIZING RESOLUTIONIORDINANCEANDENTUREL as amended or supplemented from time to time. _ "AvailabieFuni& shall mean [INSERT AVAILABLE REVENUES]. Bond Purchase Agreement" shall mean the Bond Purchase Agreement [INSERT DATE] by and between [INSERT PARTIES]. "Commitmenf shall mean the commitment of Assured Guaranty to issue the Policy dated [INSERT DATE]. 'Continuing Disclosure Agreement' shall mean the Continuing Disclosure Agreement between [INSERT PARTIES] dated as of [INSERT DATE]. 'Debt Service Payments" shall mean those payments required to be made by or on behalf of the Issuer, which will be applied to payment of principal of and Interest on the Obligations. 'Demand for Payment shall mean the certificate submitted to Assured Guaranty for payment under the Policy substantially in the form attached to the Policy. 'Event ofOefaulf shall have the meaning given that term in Section 5.01 hereof. Financing Agreement'shall mean [INSERT FINANCING AGREEMENT]. 'Financing Documents" shall mean the Authorizing Resolution, the Financing Agreement, the Bond Purchase Agreement, the Continuing Disclosure Agreement [INSERT ADDITIONAL FINANCING DOCUMENTS] and all other documents entered into by the Issuer with respect to the Obligations, as all such documents are amended from time to time. "Oblfgadons'shall mean the [INSERT OBLIGATONS]. "Oflidal Statement shall mean the Official Statement dated [INSERT DATE] relating to the Obligations. "Owners' shall mean the registered owner of any Obligation as indicated In the books maintained by the Paying Agent for such purpose. "PaylrrgAgenf shall mean [INSERT PAYING AGENT], or any successor thereto. "Policy( shall mean financial guaranty Insurance policy no. [INSERT POLICY NUMBER] issued by Assured Guaranty guaranteeing, subject to the terms and limitations thereof, the Debt Service Payments. 'Policy Coverage' shall mean the amount available at any particular time to be paid under the terms of the Policy, which amount shall never exceed the Policy Limit. "PolicyLimft shall mean the Reserve Account Requirement, provided that such amount shall not exceed the amount set forth in the Policy. "Policy Payment shall mean an amount equal to the Debt Service Payment required . to be made by the Issuer pursuant to the Authorizing Resolution less (i) that portion of the Debt Service Payment paid by or on behalf of the Issuer, and (ii) other funds legally available for payment to the Owners, all as certified in a Demand for Payment. 'Reimbursement Rater shall mean the per annum rate of interest, publicly announced from time to time by JP Morgan Chase Bank, National Association at its principal office in New York, New York as its prime lending. rate (any change in such prime rate of interest to be effective on the date such change is announced by JP Morgan Chase - Bank, National Association) plus three percent (3 %) per annum. The Reimbursement Rate shall becalculated -on the basis of the actual number of days elapsed over a 360 -day year. In the event JP Morgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank as Assured Guaranty shall specify. 'Reserve Account Requirement shall have the meaning ascribed to such term as set forth in the Authorizing Resolution, but only as such term relates to the Obligations. - "State' shall mean the State of New York. Section 1.02. Generic Terms. The term "hereon or 'herein' unless otherwise modified by more specific reference, shall refer to this Agreement. Unless otherwise specified, the term 'Article' or 'Section' shall refer to an Article or Section of this Agreement. ARTICLE 11 THE POLICY Section 2.01. The Policy. Assured Guaranty will issue the Policy in accordance with and subject to the terms and conditions of the Commitment. - The maximum liability of Assured Guaranty under the Policy . and the - coverage and tens thereof shall be subject to and limited by the terms and conditions of the Policy. Section 2.02. Premium. In consideration of Assured Guaranty agreeing to issue the Policy, the Issuer hereby agrees to cause to be paid to Assured Guaranty the premium set forth in the Commitment. The premium on the Policy Is not refundable for any reason. Section 2.03. Policy Limit. Payments under the Policy will reduce the Policy Coverage to the extent of such payment. - Section 2.04. Settlement. Assured Guaranty shall have the exclusive right to settle and determine any claim, liability, suit or judgment relating to the Policy. Any such decision by Assured Guaranty shall be final and binding upon the Issuer for all purposes of this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01. Due Organization and Qualification. The Issuer is [INSERT TYPE OF CORPORATION] by virtue of, the laws of the State of [INSERT STATE]. - Section 3.02. Power and Authority. The Issuer has full corporate power and authority to execute and deliver this Agreement and the Financing Documents. The execution and delivery of this Agreement and the financing Documents have been duty authorized by the Issuer, and all necessary approvals for the execution, delivery and performance of this Agreement and the Financing Documents have been obtained by the Issuer. Section 3.03. Non-contraverdlon. The execution and delivery of this Agreement and the Financing Documents, the consummation of the transactions contemplated by this Agreement and the Financing Documents, and the fulfillment of or compliance with the terms and conditions of this Agreement and the Financing Documents, does not conflict with or result in any breach or violation of any of the terms, conditions or provisions of any applicable laws, including regulations, or any material agreement, organizational document or instrument to which It is now parry or by which it is bound, or constitute a default under any of the foregoing which breach or default would materially and adversely affect the consummation of the transactions contemplated by this Agreement. Section 3.04. Conditions Required for Delivery of the Policy. The Issuer shall provide or cause to be provided to Assured Guaranty prior to the issuance of the Policy (t) conformed copies of this Agreement and the Financing Documents, (1I) certifications of the Issuer, as requested by Assured Guaranty, if any, and (iii) such opinions of legal counsel to the Issuer evidencing necessary or appropriate corporate action taken by the Issuer, and such other documents as may reasonably be requested by Assured Guaranty (including documents evidencing any required approvals of the transactions. contemplated by this Agreement and the Financing Documents). ARTICLE IV REIMBURSEMENT; INDEMNIFICATION; PAYMENTS Section 4.01. Reimbursement for Payments Under the Policy and Expenses; Indemnification; Payment (a) The Issuer will reimburse Assured - Guaranty, from Available Funds, without demand or notice by Assured Guaranty to the Issuer, or any other person, to the extent of each Policy Payment with interest on each Policy Payment from and including the date made to the date of the reimbursement at the lesser of the Reimbursement Rate or the maximum rate of interest permitted by then applicable law. Such reimbursement shall be made not later than [INSERT DAY COUNT] business day after any Policy Payment. (b) The Issuer will pay all other amounts required to be paid to Assured Guaranty pursuant to the terms of this Agreement or in - connection with the transactions contemplated by the Financing Documents, this Agreement, or the Policy, from Available - Funds, within one business day of receipt of written notice from Assured Guaranty of the amounts so owed. (c) The Issuer will pay or reimburse Assured Guaranty, to the extent permitted by law, . and solely from Available Funds, any and all charges, fees, costs, losses, liabilities and expenses which Assured Guaranty may pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations; in connection with (i) any accounts established to facilitate payments under the Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of this Agreement or any Financing Document including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the. Issuer, or any affiliate thereof) relating . to this Agreement or any other Financing Document, any party to this Agreement or any other .Financing Document or the transaction contemplated by the Financing Documents, (III) the foreclosure against, sale or other disposition of any collateral securing any obligations under this Agreement or any other Financing Document, if any, or the pursuit of any remedies under any other Financing Document, to the extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, (iv) any amendment, waiver or other action with respect to, or related tothls - Agreement, the Policy or any other Financing Document whether or not executed or completed, or (v) any action taken by Assured Guaranty to cure a. default or termination or similar event (or to mitigate the effect thereof) under any Financing Document; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of Assured Guaranty spent in connection with the actions described in clauses (1l)-(v) above. Assured Guaranty reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of this Agreement or any other Financing Document. (d) The Issuer will .pay Interest on the amounts owed in clauses (a), (b), and (c), of this Section 4.01 from the date of any payment due or paid as described in clauses (a) or (c), and from the date of receipt of written notice from Assured Guaranty, as provided in clause (b), in each case at the Reimbursement Rate. If the Interest provisions of this clause (d) shall result in an effective rate of interest which, for any period, exceeds the limit of the usury or any other laws applicable to the indebtedness created herein, then all sums in excess of those lawfully collectible as Interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied as additional interest for any later periods of time when amounts are outstanding hereunder to the extent that interest otherwise due hereunder for such periods plus such additional interest would not exceed the limit of the usury or such other laws, and any excess shall be applied upon principal immediately upon receipt of such moneys by Assured Guaranty, with the same force and effect as If the Issuer had specifically designated such extra sums to be so applied and Assured Guaranty had agreed to accept such extra paymerd(s) as additional interest for such later periods. In no event shall any agreed -to or actual exaction as consideration for the indebtedness created herein exceed the limits Imposed or provided by the law applicable to this transaction for the use or detention of money or for forbearance in seeking its collection. Section 4.02. Conduct of Actions or Proceedings. In the event that any action or proceeding (including any governmental investigation) shall be commenced or claim asserted which may entitle Assured Guaranty, any of its subsidiaries and affiliates, and any shareholder, director, officer, employee, agent or 'controlling person, within the meaning of Section 15 of the Securities Exchange Act or Section 20 of the Securities Exchange Act, of any of the foregoing (each, an 'Indemnified Party' and, collectively, the "Indemnified Parties/ to be indemnified under this Agreement, such party shall give the Issuer (the 'Indemnifying Parry') written notice of such action proceeding, or claim promptly after receipt of written notice thereof. if any such action, proceeding or claim shall be brought against an Indemnified Party, it shall notify the Indemnifying Party thereof: The Indemnified Party shall have the right to employ its own counsel in any such action, proceeding or claim at the expense of the Indemnifying Party and all such reasonable fees and expenses shall be reimbursed promptly as they are incurred. Section 4.03. Allocation of Payments. Assured Guaranty and the Issuer hereby agree that each payment received by Assured Guaranty from or on behalf of the Issuer as a reimbursement to Assured Guaranty as required by Section 4.01 hereof shall be applied by Assured Guaranty as follows: (1) first, toward repayment of the aggregate Policy Payments made by Assured Guaranty and not yet repaid; payment of which will reinstate all or a portion of the Policy Coverage to the extent of such repayment (but not to exceed the Policy Limit), and (ii) second, upon reinstatement of the Policy Coverage to the Policy Limit, toward other amounts as determined by Assured Guaranty in its sole discretion, including, without limitation, any interest payable with respect to any Policy Payments then due to Assured Guaranty. Section 4.04. Security fox Payments. To the extent, but only to the extent, that, the Authorizing Resolution or any other Financing Document or related indenture, trust agreement, ordinance, resolution, mortgage, security agreement or any similar instrument, if any, pledges to the Issuer, the Owners or any trustee therefore or to any holder of any other obligations of the Issuer secured on a parity basis with the Obligations, or grants a security interest or lien in or on any collateral, property, revenue or other payments ( "Collateral and Revenues') in order to secure the Obligations or such parity obligations or provide a source of payment for the Obligations or such parity obligations, the Issuer hereby grants to Assured Guaranty a security . interest in or lien on, as the case maybe, and pledges to Assured Guaranty all such Collateral and Revenues as security for payment of all amounts due hereunder, under the Authorizing Resolution and under any other Financing Document, (A) which security interest, lien and /or pledge created or granted under this Section 4.04 shall be subordinate only to (1) the interests of the Owners or owners of such parity obligations and any trustee therefor in such Collateral and Revenues, and (ii) the interests of any grantee of any other previously granted security interest in, lien on and /or pledge of such Collateral and Revenue, and (B) which security interest, lien and/or pledge created or granted under this Section 4.04 shall be on a parity with any security Interest in, lien on and/or pledge of such Collateral and Revenue hereafter granted to any provider of any - letter of credit, surety bond or financial guaranty insurance policy issued to fund a reserve account to the reserve requirement with respect to any parity obligations hereafter issued pursuant to the Authorizing Resolution. The Issuer agrees that it will, from time to time, execute, acknowledge and deliver any instruments as may be necessary or appropriate as shall be requested by Assured Guaranty to perfect or protect the security interests granted hereby. Section 4.05. Payments. All payments made to Assured Guaranty under this Agreement shall be paid in lawful currency of the United States in immediately available funds to Assured Guaranty Corp., 1325 Avenue of the Americas, New York, New York 10019, Attention: Accounting Department, or at such other place as shall be designated by Assured Guaranty. Section 4.06. Unconditional Obligation. The obligations of the Issuer to pay all amounts due under this Agreement shall be an absolute and unconditional obligation of the Issuer and will be paid or performed strictly in accordance with this Agreement, irrespective of: (a) (i) any lack of validity or enforceability of or any amendment or other modifications of, or waiver with respect to the Obligations or any financing Document, or (ii) any amendment or other modification of, or waiver with respect to the Policy; (b) any exchange, release or non - perfection of arty security interest in property securing the Obligations, this Agreement or any Financing Documents; (c) whether or not such Obligations are contingent or matured, disputed or undisputed, liquidated or unliquidated; (d) any amendment, modification or waiver of or arty consent to departure from this Agreement, the Policy or all or any of the Financing Documents; (e) the existence of any claim, setoff, defense (other than the defense of payment in full), reduction, abatement or other right which the Issuer may have at any time against the Paying Agent or any other person or entity other than Assured Guaranty, whether in connection with this Agreement, the transactions contemplated herein or in the Financing Documents or any unrelated transactions; (f) any statement or any other document presented under or in connection with the Policy or the Commitment proving in any and all respects invalid, Inaccurate, insufficient, fraudulent or forged or any statement therein tieing untrue or inaccurate in any respect; or (g) any payment by Assured Guaranty under the Policy against presentation of a certificate or other document which does not strictly comply with the terms of the Policy. ARTICLE V EVENTS OF DEFAULT; REMEDIES Section 5.01. Events of Default. The following events shall constitute Events of Default hereunder: (a) The Issuer shall fail to pay to Assured Guaranty any amount payable under Article IV hereof; or (b) Any representation or warranty made by the Issuer . hereunder or under the Financing Documents or in any report, certificate, financial statement or other instrument provided in connection with the Commitment, the Policy or this Agreement shall have been or is untrue in any material respect; or (c) Except as otherwise provided in this Section 5.01, the Issuer shag fail to perform any of its other obligations hereunder or under any other Financing Document; or. (d) The occurrence and continuation of an event of default under any Financing Document; or (e) The Issuer shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, Insolvency or similar law, (ii) consent to the Institution of; or fail to controvert in a timely and appropriate manner; any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestretor or similar official for such party or for a substantial part of its property, (Iv) file an answer admitting the material allegations of a petition fled against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi). become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take action for the purpose of effecting any of the foregoing; or (f) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking.(1) relief in respect of the Issuer, or of a substantial part of Its property, under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law or (ii) the appointment of a receiver, trustee, custodian, sequestretor or similar official for the Issuer or for a substantial part of its property, and such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for thirty (30) days. Secdon5.02. Remedies. Whenever an Event of Default referred to in Sectlon 5.01 hereof shall have happened and be continuing, Assured Guaranty may take whatever action at law or in equity : as may .appear necessary or desirable In Assured Guaranty's Judgment to collect the amounts then due and thereafter to become due hereunder or to enforce performance of any obligation of the Issuer to Assured Guaranty hereunder or under any Financing Document. Section 5.03. No Remedy Exclusive. Unless otherwise expressly provided, no remedy herein conferred upon or reserved to Assured Guaranty is intended to be exclusive of any other available remedy, but each remedy shall be cumulative and shall be in addition to other remedies given under this Agreement or any Financing Document or existing at law or in equity. No delay or failure to exercise any right or power occurring under this Agreement or any Financing Document upon the happening of any Event of Default set forth in Section 5.01 hereof or an event of default under any Financing Document shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. ARTICLE VI MISCELLANEOUS Section 6.01. Interest ComprAatlons. All computations of premium, Interest and fees due hereunder shall be made on the basis of the actual number of days elapsed over a year of 360 days. Section 6.02. Exercise of Rights. No failure or delay on the part of Assured Guaranty to exercise any right, power or privilege under this Agreement and no course of dealing between Assured Guaranty and the Issuer or any other parry shall operate as a waiver of any such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which Assured Guaranty would otherwise have pursuant to law or equity. No notice to or demand on any parry in any case shall entitle such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the other parry to any other or further action in any circumstances without notice or demand. Section 6.03. Amendments and Waivers. This Agreement may only be amended, modified,'. waived, supplemented, discharged or terminated only by written instruments signed by the parties hereto. The Issuer hereby agrees that Assured Guaranty may issue a substitute or replacement for the Policy .to cure any ambiguity or omission in the Policy which does not materially change the terms of the Policy nor adversely affect the rights of the Owners, and this Agreement shall apply to such substituted Policy. So long as the Policy is in effect, the Issuer agrees not to amend or supplement any Financing Document so as to adversely affect the rights of Assured Guaranty without the prior written consent of Assured Guaranty. Section 6.04. Successors and Assigns; Descriptive Headings. (a) This Agreement shall bind, and the benefits thereof shall inure to, the Issuer and Assured Guaranty and their respective successors and assigns; provided, that the Issuer may not transfer or assign any or all of its rights and obligations hereunder without the prior written consent of Assured Guaranty. (b) The descriptive headings of the various provisions of this Agreement are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. Section 6.05. Waiver. The Issuer waives any defense that this Agreement was executed subsequent to the date of the Policy, admitting and covenanting that such Policy was executed pursuant to their request and in reliance on their promise to execute this Agreement. Section 6.06. Other Sureties. If Assured Guaranty shall procure any other surety to reinsure the Policy, this Agreement shall inure to the benefit of such other surety, Its successors and assigns, so as to give to it a direct right of action against the Issuer to enforce this Agreement and 'Assured Guaranty' whenever used herein, shall be - deemed to include such reinsuring surety, as its respective interest may appear. Section 6.07. Notices, Requests, Demands. Except as otherwise expressly provided herein, all written notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been given or made when actually received, or in the case of telex ortelecopier notice sent over atelex or a telecopler machine owned or operated by a parry hereto, when sent, addressed as specified below or at such other address as any of the parties may hereafter specified in writing to the others:' If to the Issuer. - [INSERT ISSUER] [INSERT ADDRESS] , Attention: [INSERT CONTAC11 - Facsimile No.: [INSERT FAX NUMBER] Telephone No.: [INSERT TELEPHONE NUMBER] If to Assured Guaranty: Assured Guaranty Corp. 1325 Avenue of the Americas New York, New York 10019 Attention: Risk Management, Public Finance Surveillance Facsimile No.: (212) 581 -3268 Telephone No.: (212) 974 -0 100 E-mail: RlskManagementDept @assuredguaranty.com Policy No.: [INSERT POLICY NUMBER] (in each case in which notice or other communication to Assured Guaranty refers to an event of default, a claim on the Policy or any other event with respect to which failure on the part of Assured Guaranty to respond shall be deemed to constitute consent or acceptance; then a copy of such notice or other communication shall also be sent to the attention of the General Counsel via facsimile at facsimile number (212) 5813268 and shall be marked to indicate'URGENT MATERIAL ENCLOSED7), Section 6.08. Survival of Represemadons and Wattantles. All representations, warranties and obligations contained herein shall survive the execution and delivery of this Agreement and the Policy. Section 6.09. Governing Law. THIS AGREEMENT AND ANY DISPUTES OR CONTROVERIES ARISING OUT OF OR RELATING TO THIS .AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE. FEDERAL LAW, WITHOUT REGARD TO CHOICE OF LAW RULES OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW SECTION 51401. Section 6.10. Consent to Jurisdiction. (a) PURSUANT TO, AND IN ACCORDANCE WITH, SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW (OR TO ANY SUCCESSOR STATUTE THERETO), THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT WHICH HEARS APPEALS FROM ANY COURT THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH ANY OF THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE HEARD OR DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT BY WAY OF MOTION, AS ADEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT; ACTION OR PROCEEDING IS IMPROPER OR THAT THE FINANCING DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS. (b) To the extent permitted by applicable law, the parties hereto shall not seek and hereby waive the right to any review of the judgment of any such court by any court of any other nation or jurisdiction which may be called upon to grant an enforcement of such judgment. Section 8.11. Limited Liability. No recourse under this Agreement shall be had against, and no personal liability shall attach to, any officer, employee, agent, director, affiliate, advisor or securityholder of Assured Guaranty; by the enforcement of any assessment or by any legal or equitable proceeding; by virtue of any statute or otherwise in respect of this Agreement or the Policy, it being expressly agreed and understood that the Policy is solely a corporate obligation of Assured Guaranty, and that any and all personal liability, either at common law or in equity, or by statute or constitution, of every such officer, employee, agent, director, affiliate, advisor or securityholder for breaches by Assured Guaranty of any obligations under the Policy is hereby expressly waived as a condition of and in consideration for the execution and delivery of this Agreement. Section 6.12. Trial by Jury Waived. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH ANY PROVISIONS OF THE THIS AGREEMENT OR ANY OTHER THE FINANCING DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF LITIGATION,. SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE FINANCING DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER. Section 6.13. Counterparts. This Agreement may be executed in counterparts by the parties hereto and such counterparts shalt constitute one and the same instrument, each of which shall be deemed to be an original instrument. Section 6.14. Further Assurances. Assured Guaranty and the Issuer agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto (including any financing statements, if applicable) and such further instruments as may be required by law or as shall reasonably be requested by Assured Guaranty for carrying out the intention of or facilitating the performance of this Agreement SectIm6.15. Severabillty. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, the parties hereto agree that such holding shall not invalidate or make unenforceable any other provision hereof. The parties hereto further agree that the holding by any court of competent jurisdiction that any remedy pursued by any parry hereto is unavailable or unenforceable shall not affect in any way the ability of such party to pursue any other remedy available to it. Section 6.16. Survival of Obligations. Notwithstanding anything to the contrary contained in this Agreement, the obligation of the Issuer to pay all amounts due hereunder and the rights of Assured Guaranty to pursue all remedies shall survive the expiration, termination or substitution of the Policy and this Agreement. _ Section 6.17. Information and Reporting. The Issuer covenants to provide to Assured Guaranty, promptly upon request, any information regarding the Obligations, the Financing Documents or the financial condition and operations of the Issuer as reasonably requested by Assured Guaranty. IN WITNESS WHEREOF, each of the parties hereto have duly executed and delivered this Agreement as of the date first above written. [INSERT ISSUER] By: Name: [INSERT NAME]. Title: [INSERT TITLE] ASSURED GUARANTY CORP. By: Name: [INSERT NAME] Title: [INSERT TITLE] FORM OF WIRE INSTRUCTIONS Premium Payment Instructions for Assured Guaranty Corp.: Bank: JP Morgan Chase New York Account Name: Assured Guaranty Corp. - Premium Account Number: 323355919 ABA Number: 021 -000-021 Reference: [Insert Issuance] Policy Number, :[Insert Policy Number] Confirmation of Receipt of Premium: Please provide Assured Guaranty Corp. Attention: Closing Coordinator, with a wire reference number when such premium Is sent. Upon confirmation of the premium payment and satisfaction of all other conditions set forth in the commitment letter, Assured Guaranty will release the Policy. If you have any questions, please contact the Closing Coordinator at Assured Guaranty Corp.