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THE MBIA INSURANCE CORPORATION INSURANCE POLICY The following infom~arion tias been fumisl~ed by MBIA Insuran~e Corporation (the "Insurer") for use in this Official Staiement Referenoe is made to APP~x _ for a spacimen of the Ins~uei's policy. ~ The Insiue~s policy unoonditionally and inevocably guarai~tees the full and comple~e payment req~rired to be made by or on behalf of the ~ to the A~ern or its s~~cessor of an amount equal to (i) the principal of (either at the srtated matuiity or by an advano~ of mat-uity ~ to a :, sinl4ng fimd payment) a~ interest on, the Bonds as such payme~s shall baoome du~e but shall not be so paid (exoept that in the ev~t of any aooelaation of the due date of s~ch principal by reason o~mandatory or optional redemption or aooeleration resulting from del'ault or otherwise, other tban any advanoeme.nt of matuiity pursuant to a mandaiory sinldng fm~d payment, the PgYments Suar~d bY the Ins~ne~'s policy shall be made in such amo~mts and at such times as such payments of principal vwuld have been due had there not bcen any such aoceleration); and (ri) the reuntnusement of any such payment wluch is subsequently reoovered from any ow~r of the Bonds puisuant to a fmal judgmern by a ootut of competent j~uisdiction that such paymec~t constitutes an avoidable piefe~ence to such o~vner wiflvn the meaning of any applicable banlauptcy law (a'Pcderence'~. The Instuer's policy does not insune against loss of anY P~y~nent Pre~uum which may at any time be pery~able with res~~act to azry Bond. Tbe Ins~ur~'s policy does not, under any a~unslanoe, u~ue against loss relating to: (~ aptional or mandatory re~tions (other than mandatory sinldng fund red~ons); (ii) anY Payments to be mac~e on an aooelerated basis; (iii) Paymeirts of the p~u~chase price o~Bonds upon tender by an o~wner therea~ or Cn') ~Y ~ce ~g ~ C) ~~ (rii) above. The Insurei's polic.y aLso dces not ins~u~ agau~ nonpayment of principat o~ or inberest on the Bonds ~sulting fium the insotvency, negligenoe or any other ad or omission of the Paying Agent or any other paying agern for the Bonds. Upon reoeipt of telephonic or telegraphic notice, swch notioe ~ntly oonfirmed in writing by reg~ or oertifiied mail, or upon receipt of vvritten notiice by registered or oer6fied mail, by the Insurer from the Paying Agent or azry awner of a Banri the payment of an insured amoimt for which is then du~ ~~at such required peyment has not been m~de, the Insuner on the due date of s~ch payment or wittvn one busi~ss day af~r noeipt of notioe af s~rh no~ayment, wtuche~er is later, will make a deposit of fiwds, in an aooount with Shate Stred Bank and TnLSt Company, N.A, in New Yoci~, New Yo~ic, or its siiooessor, s~'icient for the paym~t Qf any such insuned amounts which are then due. Upon pres~rtment and s~uiender of s~h Bo~s or presenm~t of such other proof of owneiship of the Bonds, together with a~' apP~riate inshuments of assigiment to evidence the assignment of the ins~u~d amounts due on the Bonds as are paid by the Ins~u~r, and appropriate inslnunents to eBed the appointineut af the Ins~uer as agent for such owne~s o~the Bonds in any legal prooaeding related to paymecrt of ins~rod amounts on the Bo~s, such inshuments being in aform satis6ctory to State Stm~ Bank and Tnist Company, N.A, State Sme~ Bank and Tn~st Company, N.A shall disbu~se to such owners or the Payiug Agent payment of the insured amouNS due on svch Bonds, less any amount beld by the Paying Agent for the paycnent of such insu~d amounts a~d legally available therefor. The Insurer is tl~ Prin~cipal oPerating subsidiary of MBIA Inc., a New York Stock Exc~annge listed oompany (the "Co~'). The Cornpany is not obligatad to pay tl~e debts of or claims aganlst the Insurer. The Insurer is domialed in the State af New Yodc a~ licen.9ed to do business in and subject to ~egulation under the laws af all 50 srates, the District of Columbia, the Commonwealth of Puerto Rioo, the Commonwealth of the Northern Mariana islands, the Vngin Islands af the Unitsd S~tes and the Territory of Guam. The Instuer has two European brancties, one in the Repn~blic of France and tl~e in the Kingdom of Spain. New York has laws p~.scnbing minimum ppital naquireme~s, limiting cla~es and conoen~ions af i~ and ' the approval of polic,y rates and forms. State laws aLso regulata the amount af both the ag~te and individual risks that may be in~u~ed, the of dividends by the ~, changes in oontrol and tru~sactions among affiliates. Addi6onally, the Ins~uer is rec~.riied to maintain oontingency reserves on its liabilities in certain amauits and for certain periods of time. ~ Effective Febn~y 17, 1998, the Company ac~quired all of the outstanding stodc of Capital Mark~s Ass~uanoe Coiporation ("CMAC~ thnough a mergex with its pacent CapMAC Holdings Inc. Pursuant to a reins~uanoe agteemeirt, CMAC has ceded all o~its net insured risks (including an5' amrnu~ts due but unpaid fiom thind pariy reinsar~ers), as w~ell as its une~ned premiums and conting~x,y rese~ves to the Insucer. The Company is not obligated to pay the debts of or claims agau~st CMAC. As of Deoember 31, 1997, the Insurer l~ad admiuzd as~ts of $5.3 billion (audited), total liabilities of $3.5 billion (audited), and toral capital and siuplus o~'~1.8 billion (audited) d~ennii-ed in aooordance with statutory aooamting pradioes pcesc.nbad or permitbad by iiuurance regulatory a~rthorities. As of S~e~ber 30, 1998, the Instu~er t~ad admitted ass~s of $6.3 billion (unauditad)> toral liabilifies of 54.1 billion (imaudite~, and tdal capiral and s~uplus a~ $2.2 billion (unauditad) detennined in aoco~anoe with stah~tory aooo~uiting practioes presa~bad or permittsd ~,y ins~u~oe regulat,ory authorities. Furtt~re, copies of the I~~surea's year end financial statemenls pmganed in aooocdanoe with stah~tory aoco~u-ting Practices are available without charge from the Insurer. A oo~ry of the Annual Report on Form 10-K of die Company is available from the In~ner or the Seauities and Fxchange Commission The address of the Ins~uer is 113 King Stroet, Armonk, New York 10504. The telephone number o~tl~e Insorer is (914) 273~545. Moody's Irnesto~s Servioe, Inc. rates the financial strength of the Insurer "Aaa„ Standard & Poor's Ratings Servioes, a division of The McGraw-Hill Companies, Inc., rates the financial strength of the Insurer "AAA„ Fitch IBCA, Inc. (formerly lrnown as Fitch Imrestors Servioe, L.P.) rates the financial strength af the Insuier "AA~„ Each rating af the Insurer should be evaluated independently. The ratings reflect the respedive rating agenc~s caunent ass~nent of the croditw~orthuiess of tl~e Ivsurer and its ability to pay claims on its policies of ins~uanoe. A~ finther explanarion as to the si~canoe af the above ratings may be obfiained onty from the applicable rating agency. The above ratings are not recommendaUions to buy, sell or hold the Bonds, and such rarings may be subject to revision or withdrawal at any time by the rating agencies. t~ny downward revision or withdrawal of azry of the above ratings may have an adverse effed on the maiicd price of the Bonds. The Ins~uer ~es not guacanty the market price of the Bonds nor does it guatanty that the ratings on the Bonds will not be revi.sed or withdrawn. 'I~~e can be no ass~uacros tt~at payc~ns made by the Inuuer ~uig icrterest an d~e [obli~tionsJ w~71 be exduded fi~m g~uss imome, bor fiada~al tax in the evart a~~on by the [politir.al ~bdivision]. LSE