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Principal Component of Base Rentals represented thereby plus the Interest Component of Base Rentals accrued thereon to the Optional Prepayment Date. Extraordinary Optional Prepayment. The Certificates are subject to optional prepayment on any Payment Date, in whole but not in part, at a Prepayment Price equal to 100% of the Principal Component of Base Rentals represented thereby plus the Interest Component of Base Rentals accrued thereon to the prepayment date without premium, if (1) the Leased Property is damaged or destroyed, in whole or in part, or is taken in a condemnation proceeding, or certain events occur with respect to the title to the Leased Property, (2) the Net Proceeds of any insurance policy or condemnation award, plus all amounts required to be paid as deductibles thereunder, made available by reason of one or more such occurrences, are insufficient to pay in full the cost of repairing, restoring, modifying, improving or replacing the affected portion of the Leased Property, and (3) the City elects, pursuant to the Lease, to apply such Net Proceeds to the payment of the Option Price applicable on the next occurring Optional Prepayment Date together with such other money as the City is required to provide pursuant to the Lease to assure that sufficient money is available to pay the Option Price in full. If so called for prepayment, the Certificates will be subject to prepayment on the next Payment Date for which timely notice of prepayment is given as provided in the Indenture. See "SUMMARY OF THE LEASE -- Damage, Destruction and Condemnation" in Appendix C hereto. Partial Prepayment of Certificates. If less than all of the Outstanding Certificates of a series are called for prepayment, (1) Certificates shall be prepaid in such order of stated payment dates as is determined by the City, and (2) within a stated payment date the Trustee shall select the Certificates or any given portion thereof to be prepaid in such equitable manner as the Trustee determines in principal amounts of $5,000 or integral multiples thereof. Upon surrender of any Certificate prepaid in part only, the Trustee shall execute and deliver to the Owner thereof, at the expense of the City, a new Certificate or Certificates of the same series and stated payment date, equal in aggregate principal amount to the unprepaid portion of the Certificate surrendered. Notice of Prepayment. Official notice of any prepayment of Certificates is required to be given by the Trustee by mailing a copy of the notice at least 30 days and not more than 60 days prior to the prepayment date by first class mail to the Certificate Insurer and the Owner of the Certificate or Certificates to be prepaid, at the address shown on the Register on the date the notice is mailed, as more fully described in the Indenture. Effect of Prepayment. After funds sufficient for payment of the Prepayment Price have been deposited with the Trustee and notice of prepayment has been given as required by the Indenture, on the prepayment date designated in the notice, (1) the Certificates (or portions thereof) called for prepayment will become due and payable at the Prepayment Price specified in the notice, (2) the Interest Component of Base Rentals represented by the Certificates called for prepayment will cease to accrue, (3) the Certificates (or portions thereof) will cease to be entitled to any benefit or security under the Indenture and (4) the Owners of such Certificates will have no rights in respect thereof except to receive payment of the Prepayment Price. CERTIFICATE INSURANCE Certificate Insurance Policy The Certificate Insurer has made a commitment to issue a Financial Guaranty Insurance Policy (the "Certificate Insurance Policy") relating to the Series 2004 Certificates effective as of the date of delivery of the Series 2004 Certificates. Under the terms of the Certificate Insurance Policy, the Certificate Insurer will pay to The Bank of New York, in New York, New York or any successor thereto (the "Insurance Trustee") that portion of the principal of and interest on the Series 2004 Certificates which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are defmed in the Certificate Insurance Policy). The Certificate Insurer will make such payments to the Insurance Trustee on the later of the date on which such principal and interest becomes Due for Payment or within one business day following the date on which the -7-