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MUNICIPAL BOND INSURANCE AND DEBT SERVICE RESERVE FUND POLICY Bond Insurance The following information under this heading has been furnished by the Bond Insurer for use in this Official Statement. Reference is made to Appendix F for a specimen of the Bond Insurer's policy. Concurrently with the issuance of the Series 1996 Bonds, the Bond Insurer will issue its Municipal Bond New Issue Insurance Policy for the Series 1996 Bonds (the "Policy"). The Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Series 1996 Bonds which has become due for payment, but shall be unpaid by reasons of nonpayment by the County. The Bond Insurer will make such pay- ments to State Street Bank and Trust Company, NA., or its successor as its agent (the "Fiscal Agent"), on the later of the date on which such principal and interest is due or on the business day next following the day on which the Bond Insurer shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an Owner of Series 1996 Bonds or the Paying Agent of the nonpayment of such amount by the County. The Fiscal Agent will disburse such amount due on any Series 1996 Bond to its Owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the Owner's right to receive payment of the principal and interest due for payment and evidence, including any appropriate instruments of assignment, that all of such Owner's rights to payment of such principal and interest shall be vested in the Bond Insurer. The term "nonpayment" in respect of a Series 1996 Bond includes any payment of principal or interest made to an Owner of a Series 1996 Bond which has been recovered from such Owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. The Policy is non -cancellable and the premium will be fully paid at the time of delivery of the Series 1996 Bonds. The Policy covers failure to pay principal of the Series 1996 Bonds on their respective stated maturity dates or dates on which the same shall have been duly called for mandatory sinking fund redemption, and not on any other date on which the Series 1996 Bonds may have been otherwise called for redemption, accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the stated date for its payment. Generally, in connection with its insurance of an issue of municipal securities, the Bond Insurer requires, among other things, (i) that it be granted the power to exercise any rights granted to the holders of such securities upon the occurrence of an event of default, without the consent of such holders, and that such holders may not exercise such rights without the Bond Insurer's consent, in each case so long as the Bond Insurer has not failed to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or other modification of the principal legal documents be subject to the Bond Insurer's consent. The specific rights, if any, granted to the Bond Insurer in connection with its insurance of the Series 1996 Bonds are set forth in the description of the principal legal documents appearing elsewhere in this Official Statement. Reference should be made as well to such description for a discussion of the circumstances, if any, under which the County is required to provide additional or substitute credit enhancement, and related matters. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law or by the Florida Insurance Guaranty Association. Debt Senice Reserve Fund Polky Concurrently with the issuance of the Series 1996 Bonds, Financial Guaranty Insurance Company (*Financial Gu ranty") will issue its Municipal Bond Debt Service Reserve Fund Policy (the "Reserve Policy). The Reserve Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Series 1996 Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the County, provided that the aggregate amount paid under the Reserve Policy may not exceed the maximum amount 13