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The Municipal Bond Insurance Policy does not insure any risk other than Nonpayment, as <br />defined in the Policy. Specifically, the Municipal Bond Insurance Policy does not cover: <br />1. payment on acceleration, as a result of a call for redemption (other than mandatory <br />sinking fund redemption) or as a result of any other advancement of maturity. <br />2. payment of any redemption, prepayment or acceleration premium. <br />3. nonpayment of principal or interest caused by the insolvency or negligence of any <br />Trustee or Paying Agent, if any. <br />If it becomes necessary to call upon the Municipal Bond Insurance Policy, payment of <br />principal requires surrender of Bonds to the Insurance Trustee together with an appropriate <br />instrument of assignment so as to permit ownership of such Bonds to be registered in the <br />name of AMBAC Indemnity to the extent of the payment under the Municipal Bond <br />Insurance Policy. Payment of interest pursuant to the Municipal Bond Insurance Policy <br />requires proof of Bondholder entitlement to interest payments and an appropriate <br />assignment of the Bondholders right to payment to AMBAC Indemnity. <br />Upon payment of the insurance benefits, AMBAC Indemnity will become the owner of the <br />Bond, appurtenant coupon, if any, or right to payment of principal or interest on such Bond <br />and will be fully subrogated to the surrendering Bondholders rights to payment. <br />16 <br />