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BOND INSURANCE General The information contained under the caption "BOND INSURANCE" has been furnished by the Insurer for use in this Official Statement. Reference is made to Appendix F for a specimen of the Policy. No representation is made by the Authority as to the accuracy or completeness of this information, or the absence of any material adverse changes subsequent to the date hereof, and the Authority assumes no responsibility therefor. Payment Pursuant to Municipal Bond Insurance Policy The Insurer's policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the Authority to the Trustee or its successor of an amount equal to (i) the principal of(either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on the Current Interest Bonds and AIRS and the Accreted Value of the Capital Appreciation Bonds as such payments shall become due but shall not be so paid, (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by the Insurer's Policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner of the Bonds pursuant to a fmal judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference"). The Insurer's Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Bond. The Insurer's Policy does not, under any circumstance, insure against loss relating to optional or mandatory redemptions (other than mandatory sinking fund redemptions) or any Preference relating thereto. The Insurer's Policy also does not insure against nonpayment of principal of or interest on the Current Interest Bonds and AIRS or the Accreted Value of the Capital Appreciation Bonds resulting from the insolvency,negligence or any other act or omission of the Trustee or any other paying agent for the Bond. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Trustee or any Owner of a Bond the payment of an insured amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Bond or presentment of such other proof of ownership of such Bond, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Bond as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Bond in any legal proceeding related to payment of insured amounts on the Bond, such instruments being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the Trustee payment of the insured amounts due on such Bond less any amount held by the Trustee for the payment of such insured amounts and legally available therefor. MBIA Corporation The Insurer is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange listed company, MBIA Inc. is not obligated to pay the debts of or claims against the Insurer. The Insurer is a limited liability corporation rather than a several liability association. The Insurer is domiciled in the state of New 19