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set forth in the Reserve Policy, which maximum amount represents maximum annual debt service on the Series 1996 Bonds. Financial Guaranty will make such payments to the Paying Agent for the Series 1996 Bonds 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 Financial Guaranty shall have received telephonic or telegraphic notice subsequently confirmed in writing or written notice by registered or certified mail from the Paying Agent of the nonpayment of such amount by the County. 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 Reserve Policy is non -cancellable and the premium will be fully paid at the time of delivery of the Series 1996 Bonds. The Reserve 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 called for mandatory sinking fund redemption, and not on any other date on which the Series 1996 Bonds may have been accelerated, and covers the failure to pay an installment of interest on the stated date for its payment. The Reserve Policy shall terminate on the earlier of the food maturity date of the Series 1996 Bonds and the date on which Series 1996 Bonds are no longer outstanding under the Master Bond Resolution, as amended and supplemented. Generally, in connection with its issuance of a Reserve Policy, Financial Guaranty requires, among other things, (i) that, so long as it has not failed to comply with its payment obligations under the Reserve Policy, it be granted the power to exercise any remedies available at law or under the authorizing document other than (A) acceleration of the Series 1996 Bonds or (B) remedies which would adversely affect holders in the event that the County fails to reimburse Financial Guaranty for any draws on the Reserve Policy; and (ii) that any amend- ment or supplement to or other modification of the principal legal documents be subject to Financial Guaranty's consent. The specific rights, if any, granted to Financial Guaranty in connection with its issuance of the Reserve Policy 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 Reserve Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. Itatlop This Official Statement contains a section regarding the ratings assigned to the Series 1996 Bonds and references should be made to such section for a discussion of such ratings and the basis for their assignment to The Series 1996 Bonds. See "RATINGS" herein. Financial Guaranty Insurance Company The Bond Insurer is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts of or the claims against the Bond Insurer. The Bond Insurer is a monoline financial guaranty insurer domiciled in the State of New York and subject to regulation by the State of New York Insurance Department. As of September 30, 1995, the total capital and surplus of the Bond Insurer was approximately $994,500,000. The Bond Insurer prepares financial statements on the basis of both statutory accounting principles and generally accepted accounting principles. Copies of such financial statements may be obtained by writing to the Bond Insurer at 115 Broadway, New York, New York 10006, Attention: Communications Department (telephone number: (212)312-3000) or to the New York State Insurance Department at 160 West Broadway, 18th Floor, New York, New York 10013, Attention: Financial Condition Property/Casualty Bureau (telephone number: (212)602-0389). 14