REMARKETING CIRCULAR DATED JUNE 5, 2014

Transcription

1 REMARKETING CIRCULAR DATED JUNE 5, 2014 NOT A NEW ISSUE BOOK ENTRY ONLY $224,660,000 CAPITAL BELTWAY FUNDING CORPORATION OF VIRGINIA SENIOR LIEN MULTI-MODAL TOLL REVENUE BONDS (I-495 HOT LANES PROJECT) SERIES 2008 A * through D (Tax-Exempt, Non-AMT) Dated: December 14, 2010 Price 100% Maturity Date: December 31, 2047 This Remarketing Circular describes the Capital Beltway Funding Corporation of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008 (Tax-Exempt, Non AMT) (the Series 2008 Non-AMT Bonds ) in the Weekly Mode and the Daily Mode. The Series 2008 Non-AMT Bonds were issued by the Capital Beltway Funding Corporation of Virginia (the Issuer ) on December 14, 2010 in an aggregate principal amount of $589,000,000 to refund all of the Issuer s outstanding Capital Beltway Funding Corporation of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008 (Tax-Exempt, AMT) (the Series 2008 Refunded Bonds ). The Issuer loaned proceeds of the Series 2008 Refunded Bonds to Capital Beltway Express LLC, a Delaware limited liability company (the Borrower ), to pay a portion of the costs of constructing and installing improvements to a portion of the Capital Beltway (I-495) in northern Virginia (the Project ). The Issuer, a Virginia nonstock, nonprofit corporation, without members, was incorporated in October 2007 for the limited purpose of providing financing for the Project. The Borrower is owned by DRIVe USA Investments LLC ( Transurban DRIVe ) and Transurban Express Lanes LLC ( Transurban Express and together with Transurban DRIVe, the Members ). The Borrower opened the tolled lanes to traffic on November 17, 2012 with Transurban (USA) Operations Inc. as the operating and support services contractor (the Operator ). The Project, which added two new, general purpose lanes in each direction on the outside of a 14-mile stretch of the Capital Beltway and converted the four inside lanes (two in each direction) to managed tolled lanes, was undertaken and is being operated pursuant to an Amended and Restated Comprehensive Agreement between the Virginia Department of Transportation ( VDOT ), an agency of the Commonwealth of Virginia (the Commonwealth ), and the Borrower. Together with proceeds of the Series 2008 Refunded Bonds, portions of the costs of the Project were funded with (i) proceeds of a loan provided by the United States Department of Transportation, acting through the Federal Highway Administration, under the Transportation Infrastructure Finance Innovation Act of 1998, as amended ( TIFIA ); (ii) funds provided by VDOT; and (iii) equity contributions made by the Borrower s original members. The Project is part of the Commonwealth s effort to create a regional network of managed tolled highway lanes in Northern Virginia. Another part of the Commonwealth s effort, the I-95 Express Lanes Project, is being undertaken under a separate comprehensive agreement by an affiliate of the Borrower, and the 95 Express Lanes will be operated by the Operator and will share with the Project the same operations center and tolling and traffic management system. On June 4, 2014, the Members deposited with the Trustee additional equity contributions in the aggregate amount of $281,425,642, which together with funds released from certain reserves, were applied to effect the redemption of $364,340,000 aggregate principal amount of Series 2008 Non-AMT Bonds on June 5, The principal of and interest on the Series 2008 Non-AMT Bonds of each series (other than the Series 2008 A Bonds) and the Purchase Price of Series 2008 Non- AMT Bonds (other than the Series 2008 A Bonds) that are tendered or deemed tendered for purchase but not remarketed are payable from the irrevocable, direct-pay Amended and Restated Letters of Credit described herein (each a Letter of Credit and collectively, the Letters of Credit ) issued by Banco Espirito Santo, S.A., New York Branch (in the case of the Series 2008 B Bonds), National Australia Bank Limited, New York Branch (in the case of the Series 2008 C Bonds) and The Bank of Nova Scotia, acting through its New York Agency (in the case of the Series 2008 D Bonds), each in favor of the Trustee. Each Letter of Credit represents a separate obligation of the respective Bank in respect of the applicable series of Series 2008 Non-AMT Bonds as shown on the inside cover. Each Letter of Credit will terminate on June 12, 2016, unless extended or terminated earlier in accordance with its terms. The Series 2008 A Bonds, originally supported by a letter of credit issued by DEPFA Bank plc, are held by ING Capital LLC and by DEPFA Bank plc, and are not being remarketed at this time. Prospective investors should not expect the Issuer to pay directly the principal of or redemption or purchase price of the Series 2008 Non-AMT Bonds or the interest on the Series 2008 Non-AMT Bonds as such payments become due. Accordingly, any investment decision to purchase Series 2008 Non-AMT Bonds being remarketed should be made solely on the basis of the creditworthiness of the applicable Bank as the provider of the applicable Letter of Credit. Neither the Borrower nor the Issuer is required to purchase tendered Series 2008 Non-AMT Bonds following a Bank Failure. Payment of the Series 2008 Non-AMT Bonds and reimbursements of amounts drawn under the Letters of Credit, together with the Borrower s Hedging Obligations and the other Trust Indenture Secured Obligations described herein, are secured under the Indenture by a pledge and assignment of, and by a lien on, the Trust Estate created under the Master Indenture, including certain toll revenues and certain funds and accounts held under the Indenture, and by a pledge to the Trustee of the membership interests in the Borrower held by the Members, as described herein. The Series 2008 Non-AMT Bonds of each Series, other than the Series 2008 A Bonds, currently are in the Weekly Mode and bear interest at Weekly Rates and are in the principal amounts set forth on the inside cover of this Remarketing Circular. Interest on Series 2008 Non-AMT Bonds in the Weekly Mode generally is payable on the first Business Day of each month. At the direction of the Borrower, the Issuer may elect at any time to convert the Series 2008 Non-AMT Bonds of one or more Series to another Interest Rate Mode as described herein. This Remarketing Circular describes the Series 2008 Non-AMT Bonds only in the Weekly Mode and the Daily Mode. Series 2008 Non-AMT Bonds in the Weekly Mode are subject to optional and mandatory tenders for purchase and to optional and mandatory redemption prior to maturity as described herein. The Series 2008 Non-AMT Bonds are in book-entry only form in authorized denominations of $100,000 and any integral multiple of $5,000 in excess thereof and are registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). The payment of the principal of and premium, if any, and interest on the Series 2008 Non-AMT Bonds will be made by the Trustee directly to Cede & Co., as nominee for DTC, as registered owner of the Series 2008 Non-AMT Bonds, to be subsequently disbursed to Direct Participants (as defined herein) and thereafter to beneficial owners of the Series 2008 Non-AMT Bonds. Purchasers of Series 2008 Non-AMT Bonds will not receive delivery of physical certificates representing their ownership interests in the Series 2008 Non-AMT Bonds. The Series 2008 Non-AMT Bonds are special, limited obligations of the Issuer payable solely from the Trust Estate described herein, including moneys drawn under the Letters of Credit. The Issuer has no taxing powers. The Series 2008 Non-AMT Bonds are not a debt or obligation, moral or otherwise, of the Commonwealth, VDOT, the Commonwealth Transportation Board (the CTB ) or any other agency, instrumentality or political subdivision of the Commonwealth and neither the full faith and credit nor the taxing power of the Commonwealth, VDOT, or any other agency, instrumentality or political subdivision of the Commonwealth is pledged to the payment of the principal of and interest on the Series 2008 Non-AMT Bonds. The approval by the CTB of the issuance of the Series 2008 Non-AMT Bonds and of the documents pertaining to the Series 2008 Non-AMT Bonds shall not be construed as a guarantee or endorsement by the CTB of the Series 2008 Non-AMT Bonds or any representation, warranty or other assurance by the CTB as to the ability of the Issuer or the Borrower to perform its respective obligations with respect to the Series 2008 Non-AMT Bonds or the adequacy of the Revenues (as defined in the Indenture described herein) to provide for payment of the Series 2008 Non-AMT Bonds. GOLDMAN, SACHS & CO. Remarketing Agent * The Series 2008A Non-AMT Bonds are not being remarketed at this time.

2 CAPITAL BELTWAY FUNDING CORPORATION OF VIRGINIA SENIOR LIEN MULTI-MODAL TOLL REVENUE BONDS (1-495 HOT LANES PROJECT) Series 2008 A through D (Tax-Exempt, Non-AMT) $65,405,000 Capital Beltway Funding Corporation Of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project) Series 2008 A (Tax-Exempt, Non- AMT) Liquidity Provider Bonds CUSIP No.*: AP8 The 2008 A Bonds are not being remarketed at this time $62,820,000 Capital Beltway Funding Corporation Of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (1-495 HOT Lanes Project) Series 2008 B (Tax-Exempt, Non- AMT) Bank: Banco Espirito Santo, S.A, New York Branch Rating: Ba3 (long-term) CUSIP No.*: AL7 $55,105,000 Capital Beltway Funding Corporation Of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (1-495 HOT Lanes Project) Series 2008 C (Tax-Exempt, Non-AMT) Bank: National Australia Bank Limited, New York Branch Rating: AA- by Fitch (long-term); Fl+ by Fitch (short-term) Aa2 by Moody s (long term) VMIG1 by Moody s (short-term) CUSIP No.*: AM5 $41,330,000 Capital Beltway Funding Corporation Of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (1-495 HOT Lanes Project) Series 2008 D (Tax-Exempt, Non-AMT) Bank: The Bank of Nova Scotia, acting through its New York Agency Rating: AA- by Fitch (long-term); Fl+by Fitch (short-term) Aa2 by Moody s (long term) VMIG1 by Moody s (short-term) CUSIP No.*: AN3 Series 2008 A Bonds The Series 2008 A Bonds are not being remarketed at this time. Series 2008 B, C and D Bonds Initial Interest Rate Mode: Rate Determination Date: Weekly Rate Period: Interest Payment Dates Generally: Maturity Date: Remarketing Agent: Weekly Each Wednesday or, if Wednesday is not a Business Day, then the Business Day next succeeding such Wednesday Generally the period commencing on Thursday of each week to and including Wednesday of the following week First Business Day of each month December 31, 2047 Goldman, Sachs & Co. *CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers listed above were provided by CUSIP Global Services, managed by Standard & Poor s Financial Services LLC on behalf of the American Bankers Association. CUSIP numbers are provided solely for convenience of reference. The CUSIP number for a specific series and maturity is subject to change as a result of various subsequent actions including, but not limited to, a refunding or redemption in whole or in part of Series 2008 Non-AMT Bonds of such series and maturity or as a result of a change in or termination of the applicable Letter of Credit for all or a portion of the Series 2008 Non-AMT Bonds of such series or maturity.

3 No dealer, broker, salesman or other person has been authorized by the Issuer or by the Borrower or the Remarketing Agent to give any information or to make any representations, other than those contained in this Remarketing Circular, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer or by the Borrower or the Remarketing Agent. This Remarketing Circular does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2008 Non-AMT Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The Series 2008 A Bonds are Bank Bonds and are not being remarketed at this time. The Remarketing Agent has provided the following sentence for inclusion in this Remarketing Circular. The Remarketing Agent reviewed the information in this Remarketing Circular in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Remarketing Agent does not guarantee the accuracy or completeness of such information. Prospective investors should not expect the Issuer to pay directly the principal of or redemption or purchase price of the Series 2008 Non-AMT Bonds or the interest on the Series 2008 Non-AMT Bonds as such payments become due. Accordingly, any investment decision to purchase Series 2008 Non-AMT Bonds being remarketed should be made solely on the basis of the creditworthiness of the applicable Bank as provider of the applicable Letter of Credit. Neither the Borrower nor the Issuer is required to purchase tendered Series 2008 Non-AMT Bonds following a Bank Failure. The statements contained or incorporated in this Remarketing Circular that are not purely historical, are forward-looking statements, including statements regarding the Issuer s, the Borrower s, the Operator s or the applicable Banks assumptions, expectations, hopes, intentions, forecasts, projections or strategies regarding the future. All forward-looking statements included in this Remarketing Circular are based on information available to the Issuer, the Borrower, the Operator or such Bank on the date hereof. Except the historical information to be provided pursuant to the Borrower s continuing disclosure undertaking described herein under CONTINUING DISCLOSURE UNDER SEC RULE 15c2-12, none of the Issuer, the Borrower, the Operator or any of the Banks assumes any obligation to update any such forward-looking statements. The Series 2008 Non-AMT Bonds have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and have not been registered with or approved by any state agency. In making an investment decision, investors must rely on their own examinations of the terms of and security for the Series 2008 Non-AMT Bonds, including the merits and risks involved. An investment in the Series 2008 Non-AMT Bonds involves certain risks, some of which are described in this Remarketing Circular under THE SERIES 2008 NON-AMT BONDS Remarketing Considerations and INVESTMENT CONSIDERATIONS. Investors must read this entire Remarketing Circular to obtain information essential to making an informed investment decision. THIS REMARKETING CIRCULAR DESCRIBES THE SERIES 2008 NON-AMT BONDS ONLY DURING THE PERIOD IN WHICH THEY BEAR INTEREST IN THE WEEKLY MODE OR THE DAILY MODE. THE SERIES 2008 NON-AMT BONDS ARE SUBJECT TO MANDATORY PURCHASE IN THE EVENT OF ANY CONVERSION TO A DIFFERENT MODE (EXCEPT CONVERSIONS BETWEEN THE WEEKLY MODE AND THE DAILY MODE) AS DESCRIBED HEREIN.

4 TABLE OF CONTENTS Page INTRODUCTION...1 General...1 The Series 2008 Non-AMT Bonds...1 The TIFIA Loan...2 Limited Obligations...3 The Issuer...3 The Banks and the Letters of Credit...3 Hedging Requirements...4 The Borrower...4 The Project...4 Recent Developments...5 THE SERIES 2008 NON-AMT BONDS...6 General...6 Interest on Series 2008 Non-AMT Bonds...7 Conversion of Series 2008 Non-AMT Bonds to Other Modes...8 Optional Tender...9 Mandatory Purchase...9 Remarketing of Series 2008 Non-AMT Bonds...10 Remarketing Considerations...11 Redemption...13 THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT...14 The Letters of Credit...14 Alternate Credit Facilities and Alternate Liquidity Facilities...16 The Reimbursement Agreement...16 PROJECT OPERATIONS...17 The Project...17 Operation and Maintenance...18 Tolling on the 495 Express Lanes...18 Electronic Tolling and Traffic Management...19 Tolling Operations...20 Toll Violations Enforcement...21 Violations Processing Services...21 FINANCIAL ARRANGEMENTS...22 Financial Performance to Date and 2014 Recapitalization...23 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS...27 Limited Obligations...27 Senior Loan Agreement...28 TIFIA Bonds...30 Hedge Agreements...31 The Revenues and the Trust Estate...31 Flow of Funds...33 Flow of Funds with No Term Out...35 Debt Service Reserve Fund...35 Capital and Operating Reserve Funds...36 Intercreditor Arrangements Relating to Senior Bonds, Senior Secured Parties and the TIFIA Bonds...38 THE BORROWER AND THE OPERATOR...39 INVESTMENT CONSIDERATIONS...39 Letter of Credit Bank Considerations...40 Limited Obligation of the Issuer...40 The Borrower is a Limited, Special-Purpose Entity...41 Page Political, Litigation and Community Risks...41 Appropriation Risk...42 Federal Budget Impacts...43 Control-Related Risks...43 Termination Risks Under the Comprehensive Agreement...43 Technology and Operational Risks...44 Enforcement and Collection Risk...45 Force Majeure and Insurance Limitations...46 Competing Transportation Facilities...46 Change in Law...46 Governmental Approvals...47 Third Party Actions Affecting the Project...47 Uncertainties of Forecasts and Assumptions...47 Limitations on Enforceability...48 Bankruptcy-Related Risks...49 Consolidation Risk...53 Rating Risks...53 Risks Relating to Market Liquidity for the Series 2008 Non- AMT Bonds...54 Risks Relating to Tax Matters...54 CONTINUING DISCLOSURE UNDER SEC RULE 15C FINANCIAL STATEMENTS...56 LEGAL MATTERS...56 TAX MATTERS...56 The 2010 Opinion of Bond Counsel...56 Other Tax Matters...57 RELATED PARTY TRANSACTIONS...58 Appendix A Definitions... A-1 Appendix B Information About the Letter of Credit Banks...B-1 Appendix C Summary of Certain Provisions of the Comprehensive Agreement...C-1 Appendix D Summary of Certain Provisions of the Operating Agreement and the Shared Facilities Agreement..... D-1 Appendix E Summary of Certain Provisions of the Indenture......E-1 Appendix F Summary of Certain Provisions of the Senior Loan Agreement and of the TIFIA Loan Agreement.. F-1 Appendix G Summary of Certain Provisions of the Reimbursement Agreement, including the Letters of Credit...G-1 Appendix H Copy of the Opinion of Bond Counsel Delivered in December, 2010 H-1 Appendix I DTC and its Book-Entry System.....I-1 Appendix J Audited Financial Statements of Capital Beltway Express LLC for the Fiscal Years Ended 30 June 2013 and J-1 Appendix K Copy of Continuing Disclosure Agreement Delivered in December, K-1

5 REMARKETING CIRCULAR $224,660,000 CAPITAL BELTWAY FUNDING CORPORATION OF VIRGINIA SENIOR LIEN MULTI-MODAL TOLL REVENUE BONDS (I-495 HOT LANES PROJECT) SERIES 2008 A through D (Tax-Exempt, Non-AMT) INTRODUCTION General This Remarketing Circular, which includes the cover page, the inside cover pages, the table of contents and all of the appendices, is furnished by Capital Beltway Express LLC on behalf of the Capital Beltway Funding Corporation of Virginia, a Virginia nonstock, nonprofit corporation without members (the Issuer ), in connection with the remarketing from time to time of the Issuer s outstanding Senior Lien Multi-Modal Toll Revenue Bonds (1-495 HOT Lanes Project), Series 2008 (Tax-Exempt, Non-AMT), other than the Series 2008 A Bonds, which are not being remarketed at this time. The Capital Beltway Funding Corporation of Virginia Senior Lien Multi- Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008 A through D (Tax-Exempt, Non-AMT) are referred to collectively in this Remarketing Circular as the Series 2008 Non-AMT Bonds. Capitalized terms used in the front portion of this Remarketing Circular but not defined are defined in Appendix A. The Series 2008 Non-AMT Bonds The Series 2008 Non-AMT Bonds were issued on December 14, 2010 in the aggregate principal amount of $589,000,000 to refund all of the Issuer s outstanding Capital Beltway Funding Corporation of Virginia Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008 (Tax-Exempt AMT), referred to in this Remarketing Circular as the Series 2008 Refunded Bonds. On June 12, 2008, pursuant to the Senior Loan Agreement described herein, the Issuer loaned proceeds received from the sale of the Series 2008 Refunded Bonds to Capital Beltway Express LLC, a Delaware limited liability company (the Borrower ), to pay a portion of the costs of the Project described below, and in December 2010, pursuant to an Amendment to the Senior Loan Agreement, the Issuer loaned the proceeds of the Series 2008 Non-AMT Bonds to the Borrower to refund the Series 2008 Refunded Bonds. The Series 2008 Non-AMT Bonds were issued and are secured as provided in an Amended and Restated Master Indenture of Trust, dated as of June 1, 2008, as amended and supplemented, including the amendments and supplements set forth in the First Supplemental Indenture of Trust, the Second Supplemental Indenture of Trust and the Third Supplemental Indenture of Trust, each dated as of June 1, 2008, and by the Fourth Supplemental Indenture of Trust, dated as of December 1, 2010 (collectively, the Master Indenture ), between the Issuer and Wells Fargo Bank, National Association, as trustee (the Trustee ). The Master Indenture as amended and supplemented by the Fifth Supplemental Indenture of Trust, dated as of July 1, 2012, and by the Sixth Supplemental Indenture of Trust, dated as of June 5, 2014, is referred to in this Remarketing Circular as the Indenture. The Series 2008 Non-AMT Bonds (other than the Series 2008 A Bonds) currently are in the Weekly Mode and bear interest at Weekly Rates as described below. At the option of the Borrower and upon satisfaction of the conditions set forth in the Indenture, the Series 2008 Non-AMT Bonds of one or more Series (or a portion The Series 2008 A Bonds are not being remarketed at this time.

6 of a Series designated as a subseries) may be converted to or from the Daily Mode, Weekly Mode, Flexible Mode, LIBOR Indexed Mode or Term Rate Mode or may be converted to the Fixed Rate Mode. See THE SERIES 2008 NON-AMT BONDS Conversion of the Series 2008 Non-AMT Bonds to Other Modes. The Series 2008 A Bonds, which are not being remarketed at this time, were purchased by DEPFA Bank plc in 2010 after a draw under its letter of credit. The Series 2008 A Bonds are owned by ING Capital LLC and by DEPFA Bank plc (together, the Series A Banks ) as Bank Bonds and are not supported by a letter of credit. See The Banks and the Letters of Credit and THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT The Reimbursement Agreement. Goldman, Sachs & Co. serves as remarketing agent for the Series 2008 Non-AMT Bonds (the Remarketing Agent ) pursuant to a Remarketing Agreement, dated December 14, 2010, between the Borrower and the Remarketing Agent. See THE SERIES 2008 NON-AMT BONDS Remarketing of Series 2008 Non- AMT Bonds and THE SERIES 2008 NON-AMT BONDS Remarketing Considerations. This Remarketing Circular provides information about Series 2008 Non-AMT Bonds being remarketed only for periods in which they bear interest in the Weekly Mode or the Daily Mode and only for periods in which the Letters of Credit are in effect. Prospective investors should not expect the Issuer or the Borrower to pay directly the principal of or the redemption or purchase price of the Series 2008 Non-AMT Bonds or the interest on the Series 2008 Non-AMT Bonds as such payments become due. Accordingly any investment decision to purchase Series 2008 Non-AMT Bonds being remarketed should be made solely on the basis of the creditworthiness of the applicable Bank as provider of the applicable Letter of Credit. Neither the Issuer nor the Borrower is required to purchase tendered Series 2008 Non-AMT Bonds following a Bank Failure. See THE SERIES 2008 NON-AMT BONDS and THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT below and INFORMATION ABOUT THE LETTER OF CREDIT BANKS in Appendix B. The TIFIA Loan In 2008, when Senior Loan Agreement was signed and the Series 2008 Refunded Bonds were issued, the Borrower also entered into an Amended and Restated TIFIA Loan Agreement, dated as of June 1, 2008 (the TIFIA Loan Agreement ), among the Issuer, the Borrower and the United States Department of Transportation (the USDOT ) acting by and through the Federal Highway Administration (the TIFIA Bondholder or TIFIA Lender ). Pursuant to the TIFIA Loan Agreement and as authorized by the Transportation Infrastructure Finance and Innovation Act of 1998, as amended ( TIFIA ), the TIFIA Lender made loans to the Issuer in the total amount of approximately $588,923,000 (the TIFIA Loan ), and to evidence the obligation to repay the TIFIA Loan, the Issuer issued to the TIFIA Lender Subordinate Revenue Bonds (the TIFIA Bonds ) in the same amount. As described below, the Indenture and the TIFIA Loan Agreement provide that except as provided in the Indenture upon the occurrence of a Bankruptcy Related Event, payment of the TIFIA Bonds is subordinate to the payment of Senior Lien Bonds issued under the Indenture, including the Series 2008 Non- AMT Bonds and to the Borrower s obligations under the Reimbursement Agreement to reimburse the Banks for moneys drawn under the Letters of Credit. See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS TIFIA Bonds and SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Intercreditor Arrangements Relating to Senior Bonds, Senior Secured Parties and the TIFIA Bonds below and SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT TIFIA Loan Agreement in Appendix F. 2

7 Limited Obligations The Series 2008 Non-AMT Bonds and the TIFIA Bonds are special, limited obligations of the Issuer payable solely from the Trust Estate described herein (including in the case of the Series 2008 B Bonds, Series 2008 C Bonds and Series 2008 D Bonds, moneys drawn under the applicable Letters of Credit described below). The Series 2008 Non-AMT Bonds and the TIFIA Bonds are not obligations, moral or otherwise of the Commonwealth of Virginia (the Commonwealth ), the Commonwealth Transportation Board (the CTB ), the Virginia Department of Transportation ( VDOT ) or any other agency, instrumentality or political subdivision of the Commonwealth. Neither the full faith and credit nor the taxing power of the Commonwealth or VDOT is pledged to the payment of the principal of and interest on the Series 2008 Non-AMT Bonds or the TIFIA Bonds. The Issuer The Issuer is a nonstock, nonprofit Virginia corporation formed solely to assist in the financing of the Project. The Issuer has no taxing power and no assets other than the assets pledged and assigned to the Trustee as part of the Trust Estate described below. The Banks and the Letters of Credit The Series 2008 B Bonds are supported by a direct-pay letter of credit issued by Banco Espirito Santo, S.A., New York Branch (the Series B Bank ); the Series 2008 C Bonds are supported by a direct-pay letter of credit issued by National Australia Bank Limited, New York Branch (the Series C Bank ); and the Series 2008 D Bonds are supported by a direct-pay letter of credit issued by The Bank of Nova Scotia, acting through its New York Agency (the Series D Bank and together with the Series A Banks, the Series B Bank and the Series C Bank, the Banks ). Each of the Letters of Credit (collectively, the Letters of Credit ) expires on June 12, 2016 unless extended or terminated earlier in accordance with its terms. The Letters of Credit were issued pursuant to an Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of December 14, 2010 (the Amended and Restated Reimbursement Agreement ), among the Borrower, each of the Banks and ING Capital LLC, (as successor bank agent to National Australia Bank Limited, New York Branch) as Bank Agent (the Bank Agent ). The Amended and Restated Reimbursement Agreement was amended and supplemented as of June 5, 2014 pursuant to Amendment No. 1 to Amended and Restated Letter of Credit and Reimbursement Agreement, among the Borrower, the Banks, ING Capital LLC as a Participating Bank and the Bank Agent, as described below. The Amended and Restated Reimbursement Agreement as so amended and supplemented is referred to in this Remarketing Circular as the Reimbursement Agreement. See THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT. Prospective investors should not expect the Issuer or the Borrower to pay directly the principal of or the redemption or purchase price of the Series 2008 Non-AMT Bonds or interest on the Series 2008 Non-AMT Bonds as such payments become due. Accordingly any investment decision to purchase Series 2008 Non-AMT Bonds being remarketed should be made solely on the basis of the creditworthiness of the applicable Bank as provider of the applicable Letter of Credit. Neither the Issuer nor the Borrower is required to purchase tendered Series 2008 Non-AMT Bonds following a Bank Failure. See THE SERIES 2008 NON-AMT BONDS and THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT below and INFORMATION ABOUT THE LETTER OF CREDIT BANKS in Appendix B. The Series 2008 A Bonds were purchased by DEPFA Bank plc on December 15, 2010 following a mandatory tender of the Series 2008 A Bonds and a draw made under the letter of credit issued by DEPFA Bank plc. ING Capital LLC then purchased a portion of the Series 2008 Non-AMT Bonds from DEPFA Bank plc. Remarketing of the Series 2008 A Bonds was suspended at that time, and the Series 2008 A Bonds remain Bank 3

8 Bonds (referred to as Liquidity Provider Bonds in the Indenture) and bear interest at the Term Out Rate under the Reimbursement Agreement. The Borrower does not expect any of the Series 2008 A Bonds to be remarketed unless and until a new letter of credit for the Series 2008 A Bonds is obtained or the Series 2008 A Bonds are converted to a mode that under the Indenture does not require a Credit Facility. See THE SERIES 2008 NON- AMT BONDS Conversion of Series 2008 Non-AMT Bonds to Other Modes and FINANCIAL ARRANGEMENTS. Hedging Requirements The Senior Loan Agreement requires the Borrower to enter into Hedge Agreements with one or more Hedging Banks implementing a swap that establishes a fixed interest rate for at least 98 percent of the principal amount of Series 2008 Non-AMT Bonds projected to be outstanding until As described below, the Borrower is a party to five Hedge Agreements with five Hedge providers. See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Senior Loan Agreement Hedging Requirements and SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Hedge Agreements. The Borrower In 2007, the Borrower was formed as a Delaware limited liability company by Transurban DRIVe USA LLC and Fluor Enterprises Inc. ( Fluor Enterprises ) to develop and operate the Project. In 2012, Transurban DRIVe USA LLC transferred all of its interests in the Borrower to a wholly-owned subsidiary, DRIVe USA Investments LLC ( Transurban DRIVe ), and in April 2014, Fluor Enterprises transferred all of its interests in the Borrower to Transurban Express Lanes LLC, an affiliate of Transurban DRIVe and a wholly-owned subsidiasry of Transurban ( Transurban Express Lanes and together with Transurban DRIVe, the Members ). On June 3, 2014, Transurban, through its wholly-owned subsidiary Transurban Express Lanes, purchased 965,517,250 units of the Borrower for an aggregate purchase price of $281,425,642. The proceeds from the issuance of the new units to Transurban Express Lanes were used to fund part of the simultaneous recapitalization of the Borrower. Following the issuance of these units, Transuban Express Lanes owns approximately 76.1 percent of the outstanding units of the Borrower, and Transurban DRIVe owns the remaining 23.9 percent of the outstanding units of the Borrower. See THE BORROWER AND THE OPERATOR. The Project The Project included the addition of two general-purpose lanes in each direction to the outside of approximately 14 miles of the existing Capital Beltway (Interstate 495 or I-495 ) in Fairfax County, Virginia and converted the four inside lanes (two in each direction) into managed toll lanes (the 495 Express Lanes ). The 495 Express Lanes begin just north of the Dulles Toll Road and extend south to the I-495/I-95/I-395 junction, known as the Springfield Interchange. The 495 Express Lanes are High Occupancy Vehicle ( HOV ) lanes with free passage for vehicles with three or more occupants ( HOV-3 ) and for mass transit, emergency vehicles and motorcycles. Other vehicles (except heavy trucks, which are not permitted on the 495 Express Lanes) pay a toll to access the 495 Express Lanes. The tolling system on the 495 Express Lanes is fully electronic, with no toll booths, and is compatible with the E-ZPass transponder system. The E-ZPass transponder system is an interoperable toll collection program that includes 25 toll agencies in 15 states. VDOT manages the E-ZPass program in Virginia. See PROJECT OPERATIONS Tolling Operations. As described below, Fluor-Lane LLC, a limited liability company formed by Fluor Enterprises and Lane Construction Corporation (the 495 Design-Build Contractor ), achieved substantial completion of the Project on November 16, 2012, and the Borrower opened the 495 Express Lanes to tolled traffic on November 17, 2012, more than one month ahead of schedule. Transurban (USA) Operations Inc., serves as the operating and support 4

9 services contractor (the Operator ) pursuant to an Amended and Restated Operating and Support Services Agreement (the Operating Agreement ) dated as of December 19, 2007, by and between the Borrower and the Operator. See PROJECT OPERATIONS and THE BORROWER AND THE OPERATOR. The Project was undertaken and is being operated pursuant to an Amended and Restated Comprehensive Agreement, dated as of December 19, 2007, by and between the Borrower and VDOT, an agency of the Commonwealth, as amended by Amendment No. 1 to the Amended and Restated Comprehensive Agreement Relating to the Route 495 HOT Lanes in Virginia Project, dated as of April 30, 2014 (as amended, the Comprehensive Agreement ). The Project was authorized and the Comprehensive Agreement was entered into pursuant to the Commonwealth s Public-Private Transportation Act, amended and re-enacted as of July 1, 2005 (the PPTA ). The PPTA authorizes VDOT to permit private entities to acquire, construct, improve, maintain and/or operate qualifying transportation facilities under agreements with the Commonwealth and any agency or other public entity that itself would have the power to conduct such activities in respect of transportation facilities. As defined in the PPTA, transportation facilities include roads and bridges. The Federal Highway Administration (the FHWA ) approved the Project in April Under the Comprehensive Agreement, the Borrower is responsible for the financing, design, procurement, construction, commissioning and testing of, and related services for, the Project with oversight from VDOT and the FHWA, and for the operation and maintenance of and collection of tolls on the 495 Express Lanes. See SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT in Appendix C. Portions of the construction and startup costs of the Project were paid with funds provided by VDOT, with funds made available pursuant to the TIFIA Loan described below, with proceeds received from the sale of the Series 2008 Refunded Bonds and with equity contributions made by the original members of the Borrower. See FINANCIAL ARRANGEMENTS. The Project is part of the Commonwealth s effort to create a regional network of managed, tolled highway lanes in northern Virginia and to provide congestion relief to travelers and commuters traveling to and from major employment, tourism and residential centers in and adjacent to Northern Virginia. Another part of the Commonwealth s effort, the I-95 Express Lanes Project, is being undertaken under a separate comprehensive agreement by an affiliate of the Borrower (the I-95 Concessionaire ) and under a separate design-build contract with affiliates of the 495 Design-Build Contractor and as described below, the Project and the I-95 Express Lanes Project will be operated by the same Operator, under separate operating contracts, and will share the same operations center and tolling and electronic traffic management systems. Although undertaken by affiliates, the two projects borrowers, concessionaires and design-build contractors are separate entities, and each project was funded with separate financing arrangements with separate groups of creditors. See PROJECT OPERATIONS. Recent Developments The Project achieved substantial completion more than one month ahead of schedule and at a total cost that was less than budgeted. Traffic and Toll Revenues on the 495 Express Lanes, however, have been lower than assumed in 2008 when the Series 2008 Refunded Bonds and the TIFIA Bonds were issued. As a result, the Borrower, with the consent of the Banks and the Hedge Providers, developed a program to reduce debt service and hedging costs by applying $151,425,642 of unused reserves and $281,425,642 of new capital contributed by the Members to effect the redemption on June 5, 2014 of $364,340,000 of outstanding Series 2008 Non-AMT Bonds and to pay the costs of terminating $364,334,323 notional amount of Hedging Obligations. Goldman Sachs Bank USA (an affiliate of the Remarketing Agent) entered into a Waiver to its Hedge Agreement with the Borrower to amend the partial termination provisions, and entered into a transaction confirmation reflecting the partial termination of the notional amount thereunder in exchange for a partial termination payment. The Banks and the Issuer also agreed to amend some of the Borrower s coverage 5

10 requirements for semiannual calculation periods ending December 31, See FINANCIAL ARRANGEMENTS. General THE SERIES 2008 NON-AMT BONDS The Series 2008 Non-AMT Bonds (other than the Series 2008 A Bonds) are in the Weekly Mode, bear interest at Weekly Rates and, subject to prior redemption, are stated to mature on December 31, At the option of the Borrower and upon satisfaction of the conditions set forth in the Indenture, the Series 2008 Non- AMT Bonds of each Series (or a portion of a Series if designated as a subseries) may be (a) converted or reconverted to or from the Daily Mode, Flexible Mode, Weekly Mode, LIBOR Indexed Mode or Term Rate Mode, in which Modes the Interest Period is, respectively, one day, between one and 270 days, one week or 180 days or any period in excess thereof, or (b) converted to the Fixed Rate Mode. See Conversion of Series 2008 Non-AMT Bonds to Other Modes. The Series 2008 A Bonds also may be converted but only if a new letter of credit or other Credit Facility is obtained or if the Series 2008 A Bonds are converted to a Fixed Rate Mode or to a Term Rate Mode and are remarketed without a Credit Facility. Series 2008 Non-AMT Bonds being converted to a different mode (other than from the Weekly Mode to the Daily Mode or from the Daily Mode to the Weekly Mode) will be subject to mandatory tender for purchase prior to such conversion. This Remarketing Circular provides information about the Series 2008 Non-AMT Bonds being remarketed only during the periods in which they bear interest in the Weekly Mode or the Daily Mode and only for periods in which the Letters of Credit are in effect. The Series 2008 Non-AMT Bonds being remarketed are in the form of one fully registered Bond certificate for the Series 2008 Non-AMT Bonds of each Series and maturity and are registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). DTC acts as securities depository for the Series 2008 Non-AMT Bonds. Individual purchases of Series 2008 Non-AMT Bonds may be made only in book-entry form and only in Authorized Denominations ($100,000 and any integral multiple of $5,000 in excess thereof for the Weekly and Daily Modes). So long as the Series 2008 Non-AMT Bonds are registered in the name of Cede & Co. (or in such other name as may be requested by an authorized representative of DTC), as nominee of DTC, payments of the principal or Redemption or Purchase Price of and interest on the Series 2008 Non-AMT Bonds will be made directly to DTC. Except as provided in the Indenture, so long as Cede & Co. (or such other DTC nominee) is the registered owner of the Series 2008 Non-AMT Bonds, references in this Remarketing Circular to Bondholders or Registered Owners mean Cede & Co. and not the Beneficial Owners of the Series 2008 Non-AMT Bonds. In this Remarketing Circular, the term Beneficial Owner means the person for whom its DTC Participant acquires an interest in Series 2008 Non-AMT Bonds. So long as the Series 2008 Non-AMT Bonds are in book-entry only form, notices to Series 2008 Non-AMT Bondholders will be sent by the Trustee or by the Tender Agent only to DTC. See DTC AND ITS BOOK-ENTRY SYSTEM in Appendix I. The principal or Redemption Price of the Series 2008 Non-AMT Bonds is payable upon surrender of the Series 2008 Non-AMT Bonds to Wells Fargo Bank, National Association as the paying agent (the Paying Agent ). Interest on the Series 2008 Non-AMT Bonds is payable by wire transfer within the continental United States of immediately available funds to the registered owners thereof (DTC so long as the Series 2008 Non-AMT Bonds are held by DTC in book-entry form), determined as of the close of business on the applicable Record Date, at the addresses shown on the registration books maintained by the Trustee as bond registrar. 6

11 Interest on Series 2008 Non-AMT Bonds So long as Series 2008 Non-AMT Bonds are in the Weekly Mode or the Daily Mode, interest on such Series 2008 Non-AMT Bonds is computed on the basis of a 365-day or 366-day year for the actual number of days elapsed and is payable on a monthly basis on the first Business Day of each month and on the maturity dates of the Series 2008 Non-AMT Bonds. The Indenture provides that if the date for payment of interest on or principal or Redemption Price of the Series 2008 Non-AMT Bonds in the Weekly or Daily Mode is a day other than a Business Day, then payment may be made on the next succeeding Business Day with the same force and effect as if made on the date originally fixed for payment, and in the case of such payment no interest will accrue for the period from the date originally fixed for payment to such next succeeding Business Day. As defined in the Indenture, Business Day means any day other than a Saturday, a Sunday or a day on which offices of the United States government or the Commonwealth are authorized to be closed or on which commercial banks in New York, New York, Washington, D.C., or the city and state in which the Trustee is located are authorized or required by law, regulation or executive order to be closed. The Record Date for the payment of interest while a Series 2008 Non-AMT Bond is in the Weekly Mode or Daily Mode is the Business Day preceding the date on which interest is to be paid. The Indenture provides that so long as the Series 2008 Non-AMT Bonds are in the Weekly Mode, a new Weekly Rate is to be determined on the Rate Determination Date, take effect on each Thursday and be effective from and including such Thursday to and including the immediately succeeding Wednesday. The Rate Determination Date in the Weekly Mode is (i) each Wednesday or, if Wednesday is not a Business Day, then the Business Day next succeeding such Wednesday and (ii) not later than the Business Day preceding a Conversion Date, a Substitution Date or a Mandatory Purchase Date requested by the Borrower as described below under Mandatory Purchase. In the case of a reconversion to the Weekly Mode, the Indenture provides that the Rate Determination Date will be no later than the Business Day prior to the Mode Change Date to the Weekly Mode and thereafter as described above. As defined in the Indenture, the interest rate for the Series 2008 Non-AMT Bonds in the Daily Mode or Weekly Mode is the rate of interest per annum determined by the Remarketing Agent on and as of the applicable Rate Determination Date as the minimum rate of interest which, in the opinion of the Remarketing Agent under then-existing market conditions, would result in the sale of the Series 2008 Non-AMT Bonds in the Daily Rate Period or Weekly Rate Period, as applicable, at a price equal to the principal amount thereof, plus interest, if any, accrued through the Rate Determination Date during the then current Interest Accrual Period. The Indenture also provides that no Series 2008 Non-AMT Bonds shall bear interest at an interest rate higher than the Maximum Rate. The Maximum Rate is 12 percent per annum for Series 2008 Non-AMT Bonds that are not Liquidity Provider Bonds (referred to as Bank Bonds under the Reimbursement Agreement). During the Weekly Mode, the Remarketing Agent is required to establish the Weekly Rate by 4:00 P.M. on each Rate Determination Date and to make the Weekly Rate available by Electronic Means no later than 5:00 P.M. on the Business Day following the Rate Determination Date. The Weekly Rate is to be in effect during the applicable Weekly Rate Period. During the Daily Mode, the Remarketing Agent is required to establish the Daily Rate by 10:00 A.M. on each Rate Determination Date. The Daily Rate for any day during the Daily Mode that is not a Business Day is to be the Daily Rate established on the immediately preceding Rate Determination Date. The Remarketing Agent is required to make the Daily Rate available by Electronic Means no less frequently than once each week. As provided in the Indenture, if the Remarketing Agent fails or is unable to determine the Weekly Rate or the Daily Rate, if the method by which the Remarketing Agent determines the Weekly Rate or Daily Rate is held 7

12 to be unenforceable by a court of law of competent jurisdiction or if the Remarketing Agent suspends its remarketing effort in accordance with the Remarketing Agreement (but only until such time as the Series 2008 Non-AMT Bonds become Liquidity Provider Bonds in accordance with the Reimbursement Agreement), the rate to take effect on the first day of any Interest Period will be the Alternate Rate as defined in the Indenture. See Remarketing Considerations below and DEFINITIONS Alternate Rate in Appendix A. The Indenture provides that so long as any Series 2008 Non-AMT Bonds are Liquidity Provider Bonds, such Bonds shall bear interest and be payable at the times and in the amounts required under the Reimbursement Agreement. Currently, the Series 2008 A Bonds are Liquidity Provider Bonds ( Bank Bonds under the Reimbursement Agreement). During the period when a Credit Facility that is a direct-pay letter of credit (such as the Letters of Credit) has been provided, the Trustee is required to draw moneys under the Credit Facility in accordance with the terms thereof to pay when due the principal of and the interest on the related Series 2008 Non-AMT Bonds (other than Liquidity Provider Bonds or Borrower Bonds) and to pay the purchase price of such Series 2008 Non-AMT Bonds tendered for purchase and not remarketed. Amounts drawn by the Trustee under a Credit Facility may be invested only in overnight direct obligations of the United States or be held uninvested. The Indenture provides that notwithstanding anything to the contrary in the Master Indenture, the Trustee (a) will not use any amounts drawn under a Credit Facility or Liquidity Facility or proceeds from the remarketing of the Series 2008 Non-AMT Bonds to pay its fees and expenses, (b) will not be entitled to any indemnity prior to making a draw on a Credit Facility or Liquidity Facility, giving notice of a Mandatory Purchase Date, making any payment to Owners or effecting any acceleration of the Series 2008 Non-AMT Bonds and (c) if payments of the Series 2008 Non-AMT Bonds have been accelerated pursuant to the Indenture and a Credit Facility has been drawn on to pay the Series 2008 Non-AMT Bonds, will not waive any such acceleration until the Credit Facility has been reinstated. The Indenture also provides that in the event of a Credit Provider Failure or a Liquidity Provider Failure (each a Bank Failure ), the Series 2008 Non-AMT Bonds will bear interest at the rate applicable to Liquidity Provider Bonds as set forth in the Reimbursement Agreement (the Unremarketed Bonds Rate ). A Bank Failure does not constitute an event of default under the Indenture or the Loan Agreement and, in the event of such Bank Failure, neither the Issuer nor the Borrower is obligated to pay the Purchase Price of the Series 2008 Non-AMT Bonds supported by the Letter of Credit of such non-performing Bank. See Senior Loan Agreement Borrower to Provide Funds in Appendix F. Conversion of Series 2008 Non-AMT Bonds to Other Modes Conversions from a Weekly Mode to a Daily Mode and from a Daily Mode to a Weekly Mode may occur on any Business Day. When the Series 2008 Non-AMT Bonds of a Series are in the Weekly Mode or the Daily Mode, conversions to any other Interest Rate Mode (other than to a Weekly Mode or Daily Mode) may occur on any Interest Payment Date, in each case upon not less than twenty days prior written notice from the Trustee as the tender agent (the Tender Agent ) to the registered owners of the Series 2008 Non-AMT Bonds of the applicable Series 2008 Non-AMT Bonds (DTC, so long as the Series 2008 Non-AMT Bonds are kept in the bookentry system with DTC). Upon such conversion or reconversion (except in the case of conversions between the Weekly Mode and the Daily Mode), the Series 2008 Non-AMT Bonds of the applicable Series or subseries will be subject to mandatory purchase as described below under Mandatory Purchase. Each conversion of the Series 2008 Non- AMT Bonds of the applicable Series or subseries from one Interest Rate Mode to another is subject to the conditions set forth in the Indenture. The Indenture provides that in the event that the conditions for a proposed conversion to a new Interest Rate Mode are not met (i) such new mode shall not take effect on the proposed Conversion Date, notwithstanding any prior notice to the registered owners of such conversion; (ii) the Series 2008 Non-AMT Bonds of the applicable Series shall remain in their prior Interest Rate Mode; and (iii) the Series 2008 Non-AMT Bonds of the applicable Series shall be subject to mandatory purchase (except in certain cases) as 8

13 described below if notice has been sent to the registered owners stating that the Series 2008 Non-AMT Bonds of the applicable Series would be subject to mandatory purchase on such date. The Indenture provides that in no event shall the failure of the Series 2008 Non-AMT Bonds of the applicable Series to be converted to another Interest Rate Mode be deemed to be a default or an Event of Default under the Indenture. The Indenture also provides that in the event that all or a part of the Series 2008 Non-AMT Bonds of a Series are converted either to a Fixed Rate Mode or to a Term Rate Mode, the Series 2008 Non-AMT Bonds of each Series not so converted will be subject to mandatory sinking fund redemption. Optional Tender So long as the Series 2008 Non-AMT Bonds are in the Weekly Mode or the Daily Mode and upon compliance with the optional tender conditions described below, the Series 2008 Non-AMT Bonds (or portions thereof) may be tendered for purchase in the amount of $100,000 or integral multiples of $5,000 in excess thereof at a purchase price equal to 100 percent of the principal amount thereof, plus (if the tender date is not an Interest Payment Date) accrued interest, if any, to the Purchase Date (the Purchase Price ). To exercise the right to tender, the registered owner (DTC) directly, or the Beneficial Owner through its Direct Participant, must deliver an irrevocable Tender Notice to the Tender Agent. Immediately upon receipt of a Tender Notice, the Tender Agent is required to notify the Remarketing Agent and provide the Remarketing Agent with a copy of such Tender Notice. The Indenture provides that when the Series 2008 Non-AMT Bonds are in a Daily Mode, such Tender Notice must be delivered by 11:00 A.M. on any Business Day. When the Series 2008 Non-AMT Bonds are in a Weekly Mode, the Purchase Date must be a Business Day, and such notice of tender must be delivered by 5:00 P.M. on the Business Day seven days prior to the applicable Purchase Date. The Purchase Price is to be paid to the tendering owner on the Purchase Date, or on any subsequent Business Day on which tendered Series 2008 Non-AMT Bonds are delivered to the Tender Agent, from moneys in the Remarketing Account, from moneys in the Liquidity Facility Purchase Account and from moneys, if any, deposited for such purpose by the Borrower, in that order. The Indenture provides, however, that so long as a Credit Facility is in effect, the Borrower is not obligated to purchase any Series 2008 Non-AMT Bonds even in the case of a Bank Failure, and that in no event is the Issuer obligated to provide funds to pay the Purchase Price of tendered Series 2008 Non-AMT Bonds. See Remarketing of Series 2008 Non-AMT Bonds and Remarketing Considerations. The Indenture also provides that from and after the Purchase Date, no further interest on the applicable Series 2008 Non-AMT Bond will be payable to the registered owner who gave notice of tender for purchase, provided that there are sufficient funds available on the Purchase Date to pay the Purchase Price. Mandatory Purchase During the Weekly Mode or the Daily Mode, the Series 2008 Non-AMT Bonds of one or more Series are subject to mandatory tender for purchase at the Purchase Price on the Mandatory Purchase Dates described below. On any Conversion Date. Except in the case of a change in Interest Rate Mode between the Weekly Mode and the Daily Mode, the Series 2008 Non-AMT Bonds of a Series or subseries are subject to Mandatory Purchase on the Conversion Date (the date the new Interest Rate Mode begins). On any Substitution Date. The Series 2008 Non-AMT Bonds of a Series or subseries are subject to Mandatory Purchase on the date upon which an Alternate Credit Facility or Alternate Liquidity Facility is scheduled to be substituted for the Credit Facility or Liquidity Facility then in effect. The Indenture provides that in the event all of the Series 2008 Non-AMT Bonds tendered on the Substitution Date are not remarketed, the 9

14 existing Credit Facility or Liquidity Facility shall be drawn on and not the Alternate Credit Facility or Alternate Liquidity Facility. Prior to the Expiration Date. The Series 2008 Non-AMT Bonds of a Series or subseries are subject to Mandatory Purchase on the fifth day prior to the Expiration Date (other than an expiration resulting from an Automatic Termination Event). Unless extended or terminated earlier, the Expiration Date of each of the Letters of Credit currently in effect is June 12, An Automatic Termination Event is an event of default set forth in a reimbursement agreement that would result in the immediate termination or suspension of the Liquidity Facility prior to its stated expiration date without prior notice from the Liquidity Provider to the Tender Agent, other than a termination upon the substitution of an Alternate Liquidity Facility. Upon a Reimbursement Agreement Event of Default. The Series 2008 Non-AMT Bonds of a Series or subseries are subject to Mandatory Purchase on the date specified by the Trustee which must be a Business Day not less than 20 days nor more than 25 days following the receipt by the Trustee of a written notice from the Bank Agent specifying the occurrence of an event of default (other than an Automatic Termination Event) under the Reimbursement Agreement and in no event later than the day preceding the termination date specified by the Bank Agent. Following Notice of Non-Reinstatement. The Series 2008 Non-AMT Bonds of a Series or subseries are subject to Mandatory Purchase on the date specified by the Trustee following receipt of notice by the Trustee from the Bank Agent that any Letter of Credit will not be reinstated following a drawing to pay interest on the related Series 2008 Non-AMT Bonds (other than interest on Series 2008 Non-AMT Bonds no longer Outstanding after such drawing). The Mandatory Purchase Date must be a Business Day not more than five days after the Trustee s receipt of such notice. At the Direction of the Borrower. The Series 2008 Non-AMT Bonds in the Daily Mode or the Weekly Mode are subject to Mandatory Purchase on any Business Day specified by the Borrower in a notice to the Trustee but not less than 20 days after the Trustee s receipt of such notice and in no event later than the day preceding the Expiration Date. Mandatory Purchase Notices. The Indenture provides that written notice of a Mandatory Purchase Date is to be given by the Tender Agent to the registered owners of the Series 2008 Non-AMT Bonds subject to mandatory purchase (DTC so long as the book-entry system with DTC is in effect) no less than three days prior to the Mandatory Purchase Date following a Nonreinstatement and no less than 20 days prior to the other Mandatory Purchase Dates described above. From and after the Mandatory Purchase Date, no further interest on the Series 2008 Non-AMT Bonds of the applicable Series will payable to the registered owners of the Series 2008 Non-AMT Bonds required to be tendered, provided that sufficient funds are available on the Mandatory Purchase Date to pay the Purchase Price. Remarketing of Series 2008 Non-AMT Bonds The Indenture and the Remarketing Agreement require the Remarketing Agent for the Series 2008 Non- AMT Bonds to use its best efforts to offer for sale: (i) all of the Series 2008 Non-AMT Bonds or portions thereof of as to which notice of optional tender has been given; (ii) all of the Series 2008 Non-AMT Bonds required to be purchased on a Mandatory Purchase Date, except a Mandatory Purchase in connection with the expiration of the applicable Letter 10

15 of Credit, as a result of an event of default under the Reimbursement Agreement or as a result of the failure to reinstate interest under the applicable Letter of Credit; and (iii) any Series 2008 Non-AMT Bonds purchased by the applicable Bank ( Bank Bonds or Liquidity Provider Bonds ) (A) with respect to which the applicable Bank has provided notice to the Trustee and the Remarketing Agent that the Bank has reinstated the Available Amount, (B) with respect to which an Alternate Liquidity Facility and Alternate Credit Facility is in effect (if such funds were supported by a Credit Facility prior to becoming Liquidity Provider Bonds which Credit Facility is no longer in effect), or (C) that are being converted and are marketed as Fixed Rate Bonds. The Indenture provides that no Series 2008 Non-AMT Bonds are to be remarketed to the Issuer, the Borrower or any affiliate thereof. On each date on which a Series 2008 Non-AMT Bond is to be purchased, the Remarketing Agent is required to notify the Tender Agent of the principal amount of tendered Series 2008 Non- AMT Bonds it has remarketed in accordance with the terms and conditions provided in the Indenture. If the Remarketing Agent gives notice to the Tender Agent pursuant to the Indenture that the Remarketing Agent was unable to remarket any of the Series 2008 Non-AMT Bonds of the applicable Series, the Tender Agent is required to direct the Trustee to draw on the applicable Letter of Credit in an amount equal to the Purchase Price of all such Series 2008 Non-AMT Bonds that have not been successfully remarketed. The Indenture provides that if moneys sufficient to pay the Purchase Price of all tendered Series 2008 Non-AMT Bonds to be purchased on any Purchase Date are not available (1) no purchase shall be consummated on such Purchase Date; (2) all tendered Series 2008 Non-AMT Bonds shall be returned to the Series 2008 Non-AMT Bond owners of such tendered Series 2008 Non-AMT Bonds; and (3) all remarketing proceeds shall be returned to the Remarketing Agent for return to the persons providing such moneys, all in accordance with the terms and conditions set forth in the Indenture. The Indenture also provides that anything provided therein to the contrary notwithstanding, if there shall have occurred and be continuing a failure by the applicable Bank to pay a properly presented conforming draw under the applicable Letter of Credit, the Remarketing Agent shall not remarket any of the related Series 2008 Non-AMT Bonds. The Indenture provides that all other provisions of the Indenture, including without limitation, those relating to the setting of interest rates and Interest Periods and mandatory and optional purchases, shall remain in full force and effect during the continuance of such Bank Failure, that a Bank Failure will not constitute an event of default under the Indenture or the Loan Agreement and that in the event of such Bank Failure, the Borrower will not be obligated to pay the Purchase Price of the Series 2008 Non-AMT Bonds supported by such non-performing Bank. See Remarketing Considerations. Remarketing Considerations The Remarketing Agent is Paid by the Borrower or the Issuer. The Remarketing Agent s responsibilities include determining the interest rate from time to time and remarketing Series 2008 Non-AMT Bonds that are optionally or mandatorily tendered by the owners thereof (subject, in each case to the terms of the Remarketing Agreement), all as further described in this Remarketing Circular. The Remarketing Agent is appointed by the Borrower or the Issuer and is paid by the Borrower or the Issuer for its services. As a result, the interests of the Remarketing Agent may differ from those of existing holders and potential purchasers of Series 2008 Non-AMT Bonds. The Remarketing Agent Routinely Purchases Bonds for its Own Account. The Remarketing Agent is permitted, but not obligated, to purchase tendered Series 2008 Non-AMT Bonds for its own account. The Remarketing Agent, in its sole discretion, routinely acquires tendered bonds for its own inventory to achieve a successful remarketing of the bonds (i.e., because there otherwise are not enough buyers to purchase the bonds) or for other reasons. The Remarketing Agent, however, is not obligated to purchase bonds including the Series

16 Non-AMT Bonds, and may cease doing so at any time without notice. The Remarketing Agent also may make a market in the Series 2008 Non-AMT Bonds by routinely purchasing and selling Series 2008 Non-AMT Bonds other than in connection with an optional tender and remarketing. Such purchases and sales may be at or below par. The Remarketing Agent, however, is not required to make a market in the Series 2008 Non-AMT Bonds. If the Remarketing Agent purchases Series 2008 Non-AMT Bonds for its own account, it may offer those Series 2008 Non-AMT Bonds at a discount to par to some investors. The Remarketing Agent also may sell any Series 2008 Non-AMT Bonds it has purchased to one or more affiliated investment vehicles for collective ownership or enter into derivative arrangements with affiliates or others in order to reduce its exposure to the Series 2008 Non- AMT Bonds. The purchase of Series 2008 Non-AMT Bonds by the Remarketing Agent may create the appearance that there is a greater third-party demand for the Series 2008 Non-AMT Bonds in the market than is actually the case. The practices described above also may reduce the supply of Series 2008 Non-AMT Bonds that may be tendered in a remarketing. Series 2008 Non-AMT Bonds May be Offered at Different Prices on any Date. The Remarketing Agent is required to determine on the Rate Determination Date the applicable rate of interest that, in its judgment, is the lowest rate that would permit the sale of the Series 2008 Non-AMT Bonds at par plus accrued interest, if any, on the date the rate becomes effective (the Effective Date ). The interest rate will reflect, among other factors, the level of market demand for the Series 2008 Non-AMT Bonds (including whether the Remarketing Agent is willing to purchase Series 2008 Non-AMT Bonds for its own account). The Remarketing Agreement requires that the Remarketing Agent use its best efforts to sell tendered bonds at par, plus accrued interest. There may or may not be Series 2008 Non-AMT Bonds tendered and remarketed on a Rate Determination Date. As an owner of Series 2008 Non-AMT Bonds, the Remarketing Agent may sell Series 2008 Non-AMT Bonds at varying prices, including at a discount to par, to different investors on a Rate Determination Date or any other date. The Remarketing Agent is not obligated to advise purchasers in a remarketing if it does not have third-party buyers for all of the Series 2008 Non-AMT Bonds at the remarketing price. The Ability to Sell the Series 2008 Non-AMT Bonds Other Than Through Tender Process May be Limited. Although the Remarketing Agent may buy and sell Series 2008 Non-AMT Bonds, it is not obligated to do so and may cease doing so at any time without notice. Thus, investors who purchase the Series 2008 Non- AMT Bonds, whether in a remarketing or otherwise, should not assume that they will be able to sell their Series 2008 Non-AMT Bonds other than by tendering through the Transfer Agent, the Series 2008 Non-AMT Bonds in accordance with the tender process. A Bank may fail to purchase tendered Series 2008 Non-AMT Bonds even when such Bank is obligated to do so. In the case of such Bank Failure, tendered Series 2008 Non-AMT Bonds of that Series would be returned to the holders thereof and bear interest at the Unremarketed Bond Rate until such Series 2008 Non-AMT Bonds can be remarketed. It is not certain that following a failure to purchase Series 2008 Non-AMT Bonds a secondary market for the Series 2008 Non-AMT Bonds will develop. Under Certain Circumstances, the Remarketing Agent May be Removed, Resign or Cease Remarketing the Series 2008 Non-AMT Bonds, Without a Successor Being Named. Under certain circumstances the Remarketing Agent may be removed or have the ability to resign or cease its remarketing efforts, without a successor having been named, subject to the terms of the Remarketing Agreement. In the event there is no Remarketing Agent, the Trustee may assume such duties as described in the Indenture. Under certain circumstances the Remarketing Agent May Suspend Remarketing with Immediate Effect. Under certain circumstances, the Remarketing Agent may suspend remarketing of the Series 2008 Non- AMT Bonds of any Series without prior notice. The Remarketing Agent also may suspend remarketing of the Series 2008 Non-AMT Bonds if agreed to by the Borrower and the applicable Bank. 12

17 Redemption Optional Redemption. The Series 2008 Non-AMT Bonds of each Series in the Weekly Mode or Daily Mode are subject to redemption at the option of the Issuer at the direction of the Borrower in whole or in part in Authorized Denominations on any Business Day at a redemption price equal to 100 percent of the principal amount thereof, plus accrued interest, if any, from the end of the preceding Interest Accrual Period to the date fixed for redemption. Mandatory Redemption. In the event that all or a part of the Series 2008 Non-AMT Bonds of a Series are converted either to a Fixed Rate Mode or to a Term Rate Mode, the Series 2008 Non-AMT Bonds of the Series not so converted and the Series 2008 Non-AMT Bonds converted will be subject to mandatory redemption in the amounts and at the times set forth in the Indenture. Selection of Series 2008 Non-AMT Bonds to Be Redeemed. Series 2008 Non-AMT Bonds may be redeemed only in Authorized Denominations. The Indenture provides that subject to the provisions of the Reimbursement Agreement, if any, if less than all of the Outstanding Bonds are to be redeemed and paid prior to maturity, the Borrower shall direct the Trustee as to which series of the Bonds should be redeemed and, if different portions of Bonds of a series are in different Interest Rate Modes, the Bonds of which Interest Rate Mode to redeem. The Indenture provides in general that within a Series, Series 2008 Non-AMT Bonds to be redeemed are to be selected by the Trustee by lot. The Indenture also authorized the June 5, 2014 optional redemptions of Series 2008 Non-AMT Bonds of each Series in the principal amounts agreed to by the Banks. The Indenture provides that in the case of a partial redemption of Series 2008 Non-AMT Bonds when Series 2008 Non-AMT Bonds of denominations greater than the minimum Authorized Denomination are then outstanding, for all purposes in connection with such redemption each principal amount equal to the minimum Authorized Denomination will be treated as though it were a separate Series 2008 Non-AMT Bond of the minimum Authorized Denomination. The Indenture also provides that if a portion, but not all, of the principal amount represented by any Series 2008 Non-AMT Bond is selected for redemption, then upon notice of intention to redeem such portion, the owner of such Series 2008 Non-AMT Bond (DTC so long as the Series 2008 Non- AMT Bonds are held in the book-entry system with DTC) or such owner s attorney or legal representative shall present and surrender such Series 2008 Non-AMT Bond to the Trustee (1) for payment of the redemption price (including the premium, if any, and interest to the date fixed for redemption) of the portion of the Series 2008 Non-AMT Bond called for redemption, and (2) for exchange, without charge to the owner thereof for a new Series 2008 Non-AMT Bond or Series 2008 Non-AMT Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Series 2008 Non-AMT Bond. The Indenture provides that if the owner of any such Series 2008 Non-AMT Bond fails to present such Series 2008 Non-AMT Bond to the Trustee for payment and exchange, the Series 2008 Non-AMT Bond shall, nevertheless, become due and payable on the date fixed for redemption to the extent of the principal amount called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Official notice of any such redemption (which in the case of optional redemption may be a conditional notice) is to be given by the Trustee on behalf of the Issuer by mailing a copy of an official redemption notice by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption to each owner of the Series 2008 Non-AMT Bonds to be redeemed (DTC so long as the Series 2008 Non-AMT Bonds are held in the book-entry system with DTC) at the address shown on the Bond Register or at such other address as is furnished in writing by such owner to the Trustee. So long as DTC remains the sole registered owner of the Series 2008 Non-AMT Bonds, notice of redemption is to be sent to DTC only, as provided in the Indenture. The Indenture provides that failure to mail any such notice or any defect in a notice shall not affect the validity of the proceedings for the redemption of Series 2008 Non-AMT Bonds as to which no such failure occurred. 13

18 The Indenture provides that notice of redemption, having been given (and in the case of optional redemption, provided that sufficient funds for such redemption are on deposit with the Trustee), the Series 2008 Non-AMT Bonds or portions thereof so called for redemption shall become due and payable at the applicable redemption price therein provided, and from and after the date so fixed for redemption, interest on the Series 2008 Non-AMT Bonds or portions thereof so called for redemption shall cease to accrue and become payable. Any failure of DTC to advise any Direct Participant, or any failure of a Direct Participant or Indirect Participant to notify a Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of the Series 2008 Non-AMT Bonds called for redemption or of any other action premised on such notice. See DTC AND ITS BOOK-ENTRY SYSTEM in Appendix I. The Indenture provides that failure to give any notice to any owner, or any defect therein, shall not affect the validity of any proceedings for the redemption of any other Series 2008 Non-AMT Bonds and that any notice mailed shall be conclusively presumed to have been duly given and shall become effective upon mailing, whether or not any owner receives the notice. The Indenture also provides that notwithstanding anything in the Indenture to the contrary, no notice of redemption is required to be given for a redemption occurring on a Mandatory Purchase Date. Conditional Notices of Optional Redemption. The Indenture provides that if at the time of mailing of notice of any optional redemption of Series 2008 Non-AMT Bonds there shall not have been deposited with the Trustee moneys sufficient to pay the Redemption Price of all the Series 2008 Non-AMT Bonds called for such redemption (the Redemption Moneys ), such notice shall state that it is conditional upon the deposit of an amount equivalent to the full amount of the Redemption Moneys with the Trustee for such purpose not later than the opening of business on the redemption date specified in the relevant redemption notice, and such redemption notice shall be of no effect unless such Redemption Moneys are so deposited. The Letters of Credit THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT The principal, Redemption Price, if any, and Purchase Price of, and the interest on (i) the Series 2008 B Bonds are payable from an irrevocable direct-pay letter of credit issued by Banco Espirito Santo, S.A., New York Branch (the Series 2008 B Letter of Credit ), (ii) the Series 2008 C Bonds are payable from an irrevocable direct-pay letter of credit issued by National Australia Bank Limited, New York Branch (the Series 2008 C Letter of Credit ) and (iii) the Series 2008 D Bonds are payable from an irrevocable direct-pay letter of credit issued by The Bank of Nova Scotia, acting through its New York Agency (the Series 2008 D Letter of Credit ). Each Letter of Credit qualifies as a Credit Facility and a Liquidity Facility under the Indenture, and each Letter of Credit permits the Trustee to draw to pay the principal of and interest on the related Series of the Series 2008 Non-AMT Bonds, whether upon redemption, at maturity or upon acceleration of maturity, and to pay, on any tender date, the purchase price of the related Series of the Series 2008 Non-AMT Bonds tendered or deemed tendered for purchase and not remarketed. The Series 2008 B Letter of Credit supports only the Series 2008 B Bonds and does not support any other Series of Bonds; the Series 2008 C Letter of Credit supports only the Series 2008 C Bonds and does not support any other Series of Bonds; and the Series 2008 D Letter of Credit supports only the Series 2008 D Bonds and does not support any other Series of Bonds. The Series 2008 B Letter of Credit, was issued originally in the amount of $115,686,575, of which (a) the amount of $114,000,000 supported payment of principal, or the portion of the redemption and purchase price corresponding to principal, of the Series 2008 B Bonds, and (b) the amount of $1,686,575 supported the payment of interest or portion of the redemption and purchase price corresponding to 45 days interest on the Series 2008 B Bonds at an assumed interest rate of 12% per annum (computed on the basis of a 365-day year). On June 5, 2014, following the drawing to pay the redemption price of $51,180,000 aggregate principal amount of Series 2008 B 14

19 Bonds and interest thereon, the Series 2008 B Letter of Credit was reduced to $63,749,392, of which $929,392 supports payment of interest and $62,820,000 supports payment of principal. The Series 2008 C Letter of Credit was issued originally in the amount of $101,479,453, of which (a) the amount of $100,000,000 supported the payment of principal, or the portion of the redemption and purchase price corresponding to principal, of the Series 2008 C Bonds, and (b) the amount of $1,479,453 supported the payment of interest or portion of the redemption and purchase price corresponding to 45 days interest on the Series 2008 C Bonds at an assumed interest rate of 12% per annum (computed on the basis of a 365-day year). On June 5, 2014, following the drawing to pay the redemption price of $44,895,000 aggregate principal amount of Series 2008 C Bonds and interest thereon, the Series 2008 C Letter of Credit was reduced to $55,920,252, of which $815,252 supports payment of interest and $55,105,000 supports payment of principal. The Series 2008 D Letter of Credit was issued originally in the amount of $76,109,589, of which (a) the amount of $75,000,000 supported the payment of principal, or the portion of the redemption and purchase price corresponding to principal, of the Series 2008 D Bonds, and (b) the amount of $1,109,589 supported the payment of interest or portion of the redemption and purchase price corresponding to 45 days interest on the Series 2008 D Bonds at an assumed interest rate of 12% per annum (computed on the basis of a 365-day year). On June 5, 2014, following the drawing to pay the redemption price of $33,670,000 aggregate principal amount of Series 2008 D Bonds and interest thereon, the Series 2008 D Letter of Credit was reduced to $41,941,458, of which $611,458 supports payment of interest and $41,330,000 supports payment of principal. Each Letter of Credit provides that it will expire on the first to occur of (i) June 12, 2016, subject to one or more extensions at any time for a period of one (1) year or such other period as the parties may agree; (ii) the date that is five days after the date on which all of the applicable Bank s designated variable-rate Series 2008 Non-AMT Bonds outstanding either are supported by an Alternate Credit Facility (as defined in the Indenture) or have been converted to bear interest at an Auction Rate, a Flexible Rate, a Term Rate or a Fixed Rate (as such terms are defined in the First Supplemental Indenture) or are no longer outstanding; (iii) the date on which the applicable Bank notifies the Trustee that it has purchased all of its designated variable rate Series 2008 Non-AMT Bonds that are outstanding and that the Letter of Credit no longer will be reinstated; (iv) the date that is 30 days after the date on which the Trustee receives notice from the applicable Bank directing the Trustee to cause a Mandatory Purchase Date to occur under either clause (vi) or (vii) of the definition of Mandatory Purchase Date; or (v) the date on which the final drawing available under such Letter of Credit is honored. See the definition of Mandatory Purchase Date in Appendix A. Pursuant to the Indenture, the Trustee is required to draw upon the applicable Letter of Credit in the following circumstances: (a) to make timely payment of interest on the related Series 2008 Non-AMT Bonds; (b) to make timely payment of the Redemption Price of the related Series 2008 Non-AMT Bonds called for mandatory or optional redemption or to make a final payment at maturity; and (c) to make timely payment of the Purchase Price of related Series 2008 Non-AMT Bonds required to be purchased as the result of an optional or mandatory purchase pursuant to the provisions of the Indenture to the extent remarketing proceeds are not available to make such payment. As provided in the Indenture, the Borrower s obligation to reimburse the Banks for amounts drawn under the Letters of Credit and to pay any other amounts due to the Banks under the Reimbursement Agreement is secured by a pledge and assignment of the Trust Estate (except with respect to funds on deposit in the TIFIA Sinking Fund and funds deposited from time to time in the TIFIA Sub-Account of the Construction Fund) on a parity with the pledge and assignment that secures payment of the Series 2008 Non-AMT Bonds, and as described 15

20 below, the Bank Agent (acting at the instructions of the Required Banks) is deemed to be the Instructing Controlling Party as defined in the Intercreditor Agreement described below. Prospective investors should not expect the Issuer or the Borrower to pay directly the principal of or redemption or purchase price of the Series 2008 Non-AMT Bonds being remarketed or the interest on the Series 2008 Non-AMT Bonds as such payments become due. Accordingly, any investment decision to purchase the Series 2008 Non-AMT Bonds should be made solely on the basis of the creditworthiness of the applicable Bank as the provider of the applicable Letter of Credit. See INFORMATION ABOUT THE LETTER OF CREDIT BANKS in Appendix B. Alternate Credit Facilities and Alternate Liquidity Facilities Under the Indenture, each Letter of Credit is a Credit Facility and a Liquidity Facility for the related Series of Series 2008 Non-AMT Bonds. The Indenture permits the Borrower to replace a Letter of Credit with an Alternate Credit Facility and/or with an Alternate Liquidity Facility upon satisfaction of the requirements set forth in the Indenture, including delivery to the Trustee of (i) a Favorable Opinion of Bond Counsel; (ii) a written Opinion of Counsel for the provider of the Alternate Credit Facility or Alternate Liquidity Facility, as applicable, to the effect that such Alternate Credit Facility or Alternate Liquidity Facility is a valid, legal and binding obligation of the provider thereof; and (iii) unless waived by such entity, written evidence satisfactory to the Credit Provider and the Liquidity Provider of the provision for purchase from the Credit Provider or Liquidity Provider, as applicable, of all Liquidity Provider Bonds at a price equal to the principal amount thereof plus accrued and unpaid interest, and payment of all amounts due to the Credit Provider and the Liquidity Provider under the Reimbursement Agreement on or before the effective date of such Alternate Credit Facility or Alternate Liquidity Facility. The Indenture requires the Trustee to give notice of such proposed substitution by mail to the Owners of the Series 2008 Non-AMT Bonds no less than 20 days prior to the proposed Substitution Date. See THE SERIES 2008 NON-AMT BONDS Mandatory Purchase. The Reimbursement Agreement The Banks issued the Letters of Credit in 2008 pursuant to the 2008 reimbursement agreement and amended and restated the Letters of Credit and the 2008 reimbursement agreement in In addition to providing for the issuance of the Letters of Credit, the Reimbursement Agreement specifies the timing and terms of the Borrower s reimbursement obligations, includes a number of financial, operating and reporting covenants, lists events of default (including defaults under other documents that automatically trigger defaults under the Reimbursement Agreement) and specifies remedies the Banks may pursue, or may direct the Trustee to pursue, following an Event of Default under the Reimbursement Agreement, including acceleration of all reimbursement obligations and/or direction to the Trustee to effect a mandatory tender of all of the Series 2008 Non-AMT Bonds. In addition to quarterly fees and transaction and service charges, the Borrower is required to reimburse the Banks (through the Bank Agent) for amounts drawn under the Letters of Credit to pay interest on the Series 2008 Non-AMT Bonds supported by the Letters of Credit, to pay the redemption price of the Series 2008 Non-AMT Bonds supported by the Letters of Credit, and to pay the purchase price of such Series 2008 Non-AMT Bonds that are tendered or deemed tendered for purchase and not remarketed. The Borrower is required to reimburse amounts drawn to pay scheduled interest on the same Business Day such interest draw is honored and to reimburse the Banks for the interest component of purchase drawings by the earliest of (i) the next interest payment date, (ii) the date on which the purchased Series 2008 Non-AMT Bonds are remarketed and (iii) date on which such Series 2008 Non-AMT Bonds are redeemed or otherwise paid in full. The Borrower is required to reimburse amounts drawn to pay the redemption price of Series 2008 Non-AMT Bonds on the same Business Day such redemption drawing is honored and to reimburse the Banks for the principal component of a purchase drawing by the earliest of (i) the date on which such Series 2008 Non-AMT Bonds are remarketed, (ii) the date on 16

21 which such purchased Series 2008 Non-AMT Bonds are redeemed or otherwise paid in full or (iii) the 120th day after the Business Day on which the purchase drawing was honored. Bank Bonds. Series 2008 Non-AMT Bonds that are not remarketed become Bank Bonds under the Reimbursement Agreement (referred to as Liquidity Provider Bonds under the Indenture). Bank Bonds bear interest at fluctuating interest rates at a margin over One-Month LIBOR, as set forth in the Reimbursement Agreement. The Reimbursement Agreement also provides that if any Bank has held Bank Bonds for 120 days (or holds Bank Bonds on the Letter of Credit Stated Termination Date), the 121st day or the Letter of Credit Stated Termination Date, whichever is earlier (the Term Out Date ), will begin a Term Out period and require a revised flow of funds for all of the Series 2008 Non-AMT Bonds. In addition, if Bank Bonds are held as of the Letter of Credit Stated Termination Date, accelerated mandatory sinking fund payments ( Term Out Payments ) will become payable on all of the Series 2008 Non-AMT Bonds beginning June 30, The Series 2008 A Bonds, which have been Bank Bonds since December 15, 2010 and bear interest at the Term Out Rate set forth in the Reimbursement Agreement, triggered a Term Out, and thus the revised flow of funds described below, the accelerated Term Out amortization and the Term Out Rate on the Series 2008 A Bonds have been required since that time. The accelerated Term Out amortization begins on June 30, Control by the Banks. Certain actions under the Reimbursement Agreement may only be taken at the direction of or with the consent of the Required Banks. Under the Reimbursement Agreement, Required Banks includes not only the Banks but also Participating Banks and Purchasing Banks that have the rights of a Bank under the Reimbursement Agreement, and only the Banks, Participating Banks and FMS Wertmanagement AoR ( FMS ) may purchase Bank Bonds and be a Purchasing Bank (so long as they own Bank Bonds). See the definition of Required Banks in Appendix A and SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Intercreditor Arrangements Relating to Senior Bonds, Senior Secured Parties and the TIFIA Bonds below. The Project PROJECT OPERATIONS The 495 Express Lanes Project includes improvements to approximately 14 miles of I-495 (the Capital Beltway ) in Fairfax County Virginia. The Capital Beltway, which initially was completed in 1964, passes through parts of Maryland and Virginia and encircles Washington, D.C. The Project expanded 14 miles of the Capital Beltway in Northern Virginia by adding two lanes in each direction from just west of the Springfield Interchange to just north of the Dulles Toll Road, converting four existing interior lanes (two in each direction) into managed tolled lanes and replacing more than 50 bridges, overpasses and major interchanges. The new lanes were added to the outsides of the existing Capital Beltway lanes and together with two existing adjacent lanes, are general-purpose lanes that are open to the public at all times without charge. The four innermost lanes (two in each direction) were converted to High Occupancy Toll lanes ( HOT Lanes ). The HOT Lanes (now often referred to generally as the 495 Express Lanes ) are operated as managed toll lanes, with toll rates that are adjusted based upon the speed and density of traffic, and thus the amount of congestion, on the 495 Express Lanes. The 495 Express Lanes include a cashless, fully-electronic tolling and traffic management system (the ETTM System ) that is interoperable with the E-ZPass system operated in Virginia by VDOT and enables tolling at highway speeds and without toll-collection booths. Vehicles using the 495 Express Lanes are required to have E-ZPass transponders, and the ETTM System is designed to identify each vehicle by detecting a regular E-ZPass transponder or an E-ZPass Flex transponder (and to detect vehicles that are not carrying a transponder). The E- ZPass Flex transponder includes an HOV switch that, when turned on, permits vehicles with three or more passengers ( HOV-3 vehicles ) to use the 495 Express Lanes toll-free. In addition to HOV-3 vehicles, mass 17

22 transit vehicles, commuter buses, school buses, motorcycles and exempt vehicles, in each case with transponders, are not required to pay a toll on the 495 Express Lanes. The ETTM System, which supports the 495 Express Lanes, is operated by the Operator from the Express Operations Center in Alexandria, Virginia. The Express Operations Center is owned by VDOT and operated and managed by the Operator for the benefit of the Borrower and for the benefit of the concessionaire that is developing the I-95 Express Lanes Project. The ETTM Systems for both projects will be operated jointly by the Operator under two separate operating contracts. See THE BORROWER AND THE OPERATOR below, SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT in Appendix C and SUMMARY OF THE OPERATING AGREEMENT AND THE SHARED FACILITIES AGREEMENT in Appendix D. Operation and Maintenance Under the Comprehensive Agreement, the Borrower is responsible for operating and maintaining the 495 Express Lanes, and VDOT is responsible for operating and maintaining the general purpose lanes. The Borrower retained the Operator to operate and maintain the 495 Express Lanes on its behalf pursuant to the Operating Agreement between the Borrower and the Operator and in accordance with the Comprehensive Agreement. The Operator has outsourced to third parties some of its responsibilities related to operating and maintaining the 495 Express Lanes, including to VDOT and the Virginia State Police (the State Police ), but under the Comprehensive Agreement the Operator remains responsible for the management, supervision and delivery of those services. The outsourced services include incident response, routine maintenance, statutory inspections, debt collection, roadside HOV enforcement, mailhouse services, call center services, ETTM System maintenance, snow and ice removal and toll transaction account management services (provided by VDOT under the Electronic Toll Collection Agreement (the ETC Agreement )). Basic police services (including traffic patrol, traffic law enforcement and emergency services, but excluding toll lane violation enforcement) on the 495 Express Lanes are provided at no cost. Under the Comprehensive Agreement, the Borrower is required to provide sufficient equipment and personnel to support incident and emergency management operations on the 495 Express Lanes in accordance with the Technical Requirements. The Borrower directs such services from the Express Operations Center in Alexandria, Virginia, the facility that also will be used for operations of the I-95 Express Lanes Project. In July 2012, the Borrower and the I-95 Concessionaire entered into a Shared Facilities Agreement, pursuant to which the Borrower received from the I-95 Concessionaire a one-time access fee equal to $21,395,410 for use of space and services in the Express Operations Center. See SUMMARY OF CERTAIN PROVISIONS OF THE OPERATING AGREEMENT AND THE SHARED FACILITIES AGREEMENT SHARED FACILITIES AGREEMENT in Appendix D. Tolling on the 495 Express Lanes General. The Comprehensive Agreement provides that during its term, the Borrower has the exclusive right to impose, charge, collect, use and enforce the collection and payment of the toll revenues, in accordance with the terms of the Comprehensive Agreement and subject to the terms of the ETC Agreement, has the exclusive right, title, entitlement and interest in and to the toll revenues. Tolling on the 495 Express Lanes began on November 17, The Borrower is permitted to charge toll rates based on the level of speed and congestion as well as other variables as set forth in the Comprehensive Agreement. All vehicles accessing the 495 Express Lanes are required to have a transponder. HOV-3 vehicles, mass transit vehicles and commuter buses, school buses, motorcycles and exempt vehicles equipped with a transponder may use the 495 Express Lanes at a 100% discount 18

23 from otherwise applicable tolls. All other vehicles (other than heavy trucks) may use the 495 Express Lanes subject to payment of the applicable tolls. As described below, VDOT has agreed to compensate the Borrower if the number of HOV-3 vehicles on the 495 Express Lanes exceeds 24 percent of the total flow of permitted vehicles in the same Toll Section. During the first year, HOV-3 traffic averaged approximately six percent. See SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT Delay Events; Compensation Events; Force Majeure Events Toll Exemptions; Excess High Occupancy Vehicle Usage in Appendix C. The 495 Express Lanes are managed lanes, with toll rates that may be adjusted depending upon the speed and density of traffic and hence levels of congestion on the 495 Express Lanes. The 495 Express Lanes are divided into different toll sections. The toll rate is displayed at entry points so that drivers can decide whether to access the 495 Express Lanes and pay the toll. As traffic increases on the 495 Express Lanes, the toll rate can be increased to discourage new drivers from entering the 495 Express Lanes so as to maintain safety and averagespeed requirements. The Comprehensive Agreement does not limit the toll rates or the number of changes in the toll rates but does require that minimum average speeds be maintained. Under the Comprehensive Agreement, the Borrower is required to meet federal statutory requirements under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users ( SAFETEA-LU ), which requires managed HOV lanes to achieve minimum average operating speeds of 45 miles per hour during weekday peak hours for 90% of the time over a consecutive 180-day period. See SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT Use and Tolling of Project Tolling Generally; Tolling Exemptions in Appendix C. Electronic Tolling and Traffic Management The Project includes an all-electronic, cashless highway-speed tolling and traffic management system that is interoperable with the E-ZPass network and will be integrated with the system being installed for the I-95 Express Lanes Project. The ETTM System was delivered by Transurban (USA), Inc., as a subcontractor to the Design-Build Contractor (and the same entity responsible for delivering the ETTM System for the 95 Express Lanes), and permits toll transactions to occur at posted speeds with no toll booths or slowing or stopping. Electronic signs notify commuters of current toll rates to various destinations and video license plate identification technology captures license plate numbers to assist in generating toll and penalty invoices if no transponder is detected and to alert State Police to HOV-3 lane violators. The ETTM System was designed to decrease congestion during peak periods. The ETTM System identifies each vehicle automatically by detecting an E-ZPass transponder, including the E-ZPass Flex transponder, for non-exempt vehicles. The E-ZPass Flex transponder includes a HOV switch, designed to enable the HOV-3 vehicle to access the 495 Express Lanes without being charged a toll when switched in the HOV position. In the toll position, an E-ZPass Flex transponder operates as a normal E-ZPass transponder. Equipment on the toll gantries was designed to detect the E-ZPass transponder, and if it is a Flex transponder, to indicate whether the HOV switch is on, confirm its classification if necessary, form the transactions collected into a trip, and based upon the trip, assign the proper tolls (or 100% discount) based upon the toll rate then in effect for that destination. The ETTM System also includes cameras that are arranged on overhead gantries to provide full coverage of the 495 Express Lanes, including hard shoulders at the toll gantries. The system configuration is designed so that vehicles can be identified accurately independent of their lateral position on the road at high speed. To comply with the Comprehensive Agreement and applicable law, the ETTM System was designed to suspend tolling and to permit all traffic to travel on the 495 Express Lanes for use as an emergency mass evacuation route, with tolls suspended (if VDOT orders a suspension in accordance with the Comprehensive Agreement). 19

24 Tolling Operations As part of its operations and maintenance obligations under the Comprehensive Agreement, the Borrower is responsible, at its sole cost and expense, for the operation and maintenance of the ETTM System and for the collection and enforcement of tolls and other incidental charges in accordance with the terms of the Comprehensive Agreement, and pursuant to the Operating Agreement, the Operator agrees to perform the same duties for the Borrower. The Borrower also is responsible under the Comprehensive Agreement to provide all toll transaction account management services and to comply with those provisions, the Borrower entered into the ETC Agreement with VDOT for the provision by VDOT of all E-ZPass toll transaction account management services during the initial term of the ETC Agreement. VDOT is required under the ETC Agreement to perform administrative, back office, customer service and related activities for the 495 Express Lanes in connection with transactions processed through the E-ZPass network (and any successor to E-ZPass utilized on Commonwealth highways at that time). To the extent required for the performance of the Borrower s or the Operator s operations and maintenance services, the Borrower and the Operator agreed to cooperate and coordinate their performance of such services with VDOT s personnel performing toll transaction account management services in accordance with the ETC Agreement. VDOT centrally manages E-ZPass accounts and the distribution of transponders to customers for all toll facilities in the Commonwealth. The services VDOT is required to provide to the Borrower under ETC Agreement are similar to the services VDOT provides to all other toll-facility operators in the Commonwealth that utilize E-ZPass and are necessary for the administration of the central E-ZPass account and transaction processing system. These services include customer services, the distribution of transponders, the debiting from customer accounts of tolls charged through E-ZPass and the operation of E-ZPass customer service centers. VDOT charges its toll road operators service fees that are payable monthly. The service fee charged to operators, including the Borrower, includes a transaction fee and a revenue-based processing fee. The ETC Agreement, which is a one-year, renewable agreement, provides that on each business day VDOT will provide, via a direct computer interface to the Borrower s toll collection system, a complete listing of all valid E-ZPass transponder numbers. The Borrower then will forward, or cause the Operator to forward via that same interface, to VDOT a report listing E-ZPass transactions on the Project facilities of valid transponders from the previous day or weekend, as applicable, and VDOT is to forward to the Borrower and the Operator a disbursement report reflecting E-ZPass transaction revenue credited to the Borrower. The ETC Agreement requires VDOT to initiate payment by electronic wire transfer to the Borrower on or before the close of the next business day in an amount equal to the aggregate tolls and any applicable membership fees posted to customer accounts during the previous day or weekend, as applicable. The ETC Agreement requires VDOT and the Borrower and the Operator to exchange back-up information and to resolve any discrepancies between their reports amounting to $50 or more for any three consecutive days. Any E-ZPass transactions for the Project not sent to VDOT within 60 business days are subject to deletion and the related revenue may not be recorded unless the delay is due to VDOT s failure, in which case such related revenue is required to be transferred to the Borrower. The services required to be provided by VDOT under the ETC Agreement, and the form of ETC Agreement, are substantially the same as those VDOT performs and enters into with all other toll facilities in the Commonwealth that utilize E-ZPass. The Borrower is required to operate and maintain an electronic tolling collections system that is interoperable with the E-ZPass network and any successor to E-ZPass utilized on Commonwealth highways and to use reasonable efforts to cause its electronic toll collection equipment to be compatible with that used by VDOT on its other electronic toll collection facilities and related operations. To comply with such requirements, the Borrower purchased equipment from the official E-ZPass equipment vendor. The Comprehensive Agreement 20

25 requires VDOT to exercise due care and diligence in planning and implementing modifications, upgrades and associated testing of its electronic tolling collections system at levels that are reasonable given the schedule, scope and budget for such system and will not exceed what is considered customary and reasonable for electronic toll collection hardware and software processing systems. The Borrower and VDOT also are required to report as promptly as possible, and no later than 72 hours, after the receipt of notice of any system failure or degradation that may affect the electronic tolling collections operations. Toll Violations Enforcement The Code of Virginia makes it unlawful to operate a motor vehicle on designated HOT lanes without making arrangements with the HOT lanes operator to pay the specified toll or without meeting the applicable high occupancy requirement. VDOT s Commissioner may be authorized by the CTB to determine the high occupancy requirement consistent with the terms of the Comprehensive Agreement, but by statute, the high occupancy requirement for a HOT lanes facility constructed or operated pursuant to the PPTA cannot be less than three. Under the Comprehensive Agreement, VDOT is required to compensate the Borrower for the Net Revenue Impact to the Project if a Discriminatory Change in Law lowers the high occupancy requirement applicable to the Project to less than three. The Code of Virginia also requires the HOT lanes operator to install and operate photoenforcement systems at locations where tolls are collected for the use of such HOT lanes. The Code of Virginia allows information gathered by such photo-enforcement systems to be used as evidence in court and proof of a violation. As an additional toll enforcement measure, State Police vehicles patrol the I-495 Express Lanes. Virginia law provides that if a vehicle uses a HOT lane without paying the toll, the toll facility operator may impose and collect an administrative fee in addition to the unpaid toll after the first unpaid toll has been documented so as to recover the expenses of collecting the unpaid toll. The administrative fee must be reasonably related to the actual cost of collecting the unpaid toll and may not exceed $25 if the toll is paid within 30 days and otherwise not to exceed $100 per violation. In addition and subject to compliance with certain procedural and evidentiary requirements prescribed by statute, the toll facility operator may bring an action against the owner or operator of the vehicle in the general district court of the city or county in which the toll facility is located. If the court determines that an owner or operator of the vehicle violated the statute for toll payment, a toll violator may be assessed civil penalties that begin at $50 for the first offense, $250 for the second offense, $500 for a third offense within two years after the second offense and $1,000 for additional offenses within three years after the second offense, plus, in each case, unpaid tolls, accrued administrative fees and applicable court costs. Although the Commonwealth has existing legislation for in-state vehicles, the Borrower s ability to locate and prosecute out-of-state violators may be more limited. The Borrower is in the process of implementing several mitigation measures to help address this risk, including using reminder notices, toll violation notices and debt collection service providers to pursue out-of-state violators. See INVESTMENT CONSIDERATIONS. Violations Processing Services Under the Comprehensive Agreement, the risk of enforcement and collection of tolls and related charges (including user fees and civil penalties and administrative fees) remains with the Borrower. VDOT, however, has implemented and maintains a processing system for the enforcement of penalties for toll violations in Virginia for electronic toll collection systems on Commonwealth highways. The Borrower may, but is not obligated to, enter into an agreement with VDOT, in accordance with the form of Violations Processing Services Agreement attached to the Comprehensive Agreement, to obtain the benefits of such enforcement system. In consideration of such services, the Borrower will be obligated to pay VDOT its customary charges for such services in effect from time to time. For purposes of identifying and apprehending toll violators of the Project, as authorized under law and any applicable agreements or arrangements, VDOT agrees to make available to the Borrower the benefits of 21

26 any agreements or arrangements which VDOT has in place with other state authorities or agencies that provide access to records in their possession relating to vehicle and vehicle owner data, and will coordinate with the State Police in accordance with the terms and conditions of the Comprehensive Agreement with respect to the provision of policing services, emergency services, traffic patrol and traffic law enforcement services on the Project. See SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT Use and Tolling of the Project in Appendix C and SUMMARY OF CERTAIN PROVISIONS OF THE OPERATING AGREEMENT AND THE SHARED FACILITIES AGREEMENT OPERATING AGREEMENT Management and Operation of the HOT Lanes During the Operating Period in Appendix D. FINANCIAL ARRANGEMENTS The Project was financed initially in June 2008, when $589 million of Series 2008 Refunded Bonds were issued. At that time, the Design-Build Contract was signed, the Borrower committed to make equity contributions of $348.7 million, the USDOT agreed to make loans of $588.9 million under TIFIA and VDOT agreed to contribute $408.9 million. During construction, VDOT initiated change orders that required VDOT to fund an additional $124 million of Project costs, and in December 2010, the Series 2008 Non-AMT Bonds were issued to refund the Series 2008 Refunded Bonds. Substantial Completion was achieved on November 16, 2012, and on November 17, 2012 the 495 Express Lanes were opened for service. Also in November 2012, the Ramp-up Reserve, Revenue Stabilization Reserve and Capital Expenditure Reserve Accounts were funded. In March 2013, the last of the planned equity contributions were made, which increased the balance in the Revenue Stabilization Reserve Fund. Table 1 summarizes the sources and expenditures of funds during the construction phase of the Project. 22

27 Sources Table 1 Sources and Uses of Funds for Construction as of June 30, 2013 ($000) Series 2008 Refunded Bonds $589,000 TIFIA Loan 588,923 Equity Contributions 348,695 VDOT Contribution 408,896 Interest Income During Construction 44,471 Total Sources of Funds (excluding VDOT Change Orders) 1,979,985 VDOT Change Order Funding 123,958 Total Sources of Funds (including VDOT Change Orders) $2,103,943 Uses Construction Costs, Oversight & Other Admin Fee $1,476,752 Development Costs 66,227 Financing Costs Interest During Construction 149,093 Credit Enhancement & Other Fees 27,103 Construction Reserves Debt Service Reserve Fund 58,900 Ramp-Up Reserve Fund 30,000 Revenue Stabilization Reserve Fund 91,795 Shared Facilities Reserve 21,395 Capital Expenditure Reserve Fund 19,000 Project Enhancement Account 1 15,000 Operating Account 2 24,720 Total Uses of Funds (excluding VDOT Change Orders) 1,979,985 VDOT Change Orders 123,958 Total Uses of Funds (including VDOT Change Orders) $2,103,943 (1) Funding for major modifications and additions undertaken by VDOT benefiting the 495 Express Lanes. (2) Excess funds available for operations. Source: Capital Beltway Express LLC Financial Performance to Date and 2014 Recapitalization Although the 495 Express Lanes were opened one month earlier than initially planned, Toll Revenues and traffic on the 495 Express Lanes have been increasing but remain significantly lower than assumed in 2008 when the Series 2008 Refunded Bonds and the TIFIA Bonds were issued. The discussion of the Borrower s financial performance and condition included in this section should be read in conjunction with, and provides period-to-period comparisons based on, the Borrower s audited and unaudited financial statements and other financial information included elsewhere in this Remarketing Circular, including the audited financial statements for the Borrower s fiscal years ended June 30, 2013 and 2012 in Appendix J. The Borrower s future results may differ materially from its past results due to various uncertainties and risks, including the risks and uncertainties described in this Remarketing Circular. Such risks and uncertainties, among others, could cause actual results and events to differ materially. See INVESTMENT CONSIDERATIONS. 23

28 Table 2 summarizes for each quarter from December 2012 the number of average daily trips, average workday trips, average toll charged, maximum toll charged and total toll revenue. The Borrower s fiscal year ends on June 30, and quarterly data are as of the periods ended September 30, December 31, March 31 and June 30. Traffic and revenue information shown in Table 2 is derived from records maintained by the Operator. Table 2 Historical Traffic on the 495 Express Lanes for the Quarters Ended December 31, Through March 31, 2014 Quarter ended 31-Dec-12 1 Quarter ended 31-Mar-13 Quarter ended 30-Jun-13 Quarter ended 30-Sep-13 Quarter ended 31-Dec-13 Quarter ended 31-Mar-14 Nine months ended 31-Mar-14 Year ended 1 30-Jun-13 Toll Revenue ($000) $828 $2,475 $4,029 $7,332 $4,760 $5,913 $5,612 $16,285 Avg Daily Trips 18,594 21,008 28,905 23,661 30,518 30,417 28,637 29,867 Avg Workday trips 23,308 26,294 34,974 29,378 37,574 37,969 37,969 37,831 Average toll $1.07 $1.43 $1.71 $1.51 $1.86 $2.32 $2.38 $2.18 Maximum toll charged $3.70 $6.35 $7.55 $7.55 $8.90 $9.75 $10.90 $10.90 (1) The 495 Express Lanes first opened for traffic on November 17, Source: Capital Beltway Express LLC. The following tables summarize the Borrower s financial information by quarter for the fiscal year ended June 30, 2013 and for the nine months ended March 31, 2014, derived from unaudited financial statements, and should be read in conjunction with the notes to the Borrower s financial statements included in Appendix J. The audited and unaudited financial statements were prepared in accordance with Generally Accepted Accounting Principles. The financial information for the fiscal year ended June 30, 2013 is derived from the Borrower s audited financial statements included in Appendix J. 24

29 Table 3 Capital Beltway Express LLC Statement of Operations ($000) Quarter ended 30-Sep-12 Quarter ended 31-Dec-12 1 Quarter ended 31-Mar-13 Quarter ended 30-Jun-13 Year ended 30-Jun-13 Quarter ended 30-Sep-13 Quarter ended 31-Dec-13 Quarter ended 31-Mar-14 Nine months ended 31-Mar-14 Toll revenue $-- $828 $2,475 $4,029 $7,332 $4,760 $5,913 $5,612 $16,285 Fee and other revenue ,045 1,944 1,360 1,534 1,422 4,316 Toll, fee and other revenue -- 1,013 3,189 5,074 9,276 6,120 7,447 7,034 20,601 Interest Revenue , Total revenue 570 1,418 3,239 5,119 10,346 6,144 7,467 7,050 20,661 Operating costs -- (2,621) (5,314) (5,617) (13,552) (5,436) (7,569) (3,442) (16,447) Net revenue 570 (1,203) (2,075) (498) (3,206) 708 (102) 3,608 4,214 Maintenance provision 3 -- (704) (1,409) (1,966) (4,079) (2,177) (2,177) (518) (4,872) Depreciation amortization expense -- (2,066) (4,051) (4,123) (10,240) (4,214) (4,214) (3,992) (12,420) Finance Costs 4 -- (8,421) (16,934) (16,865) (42,220) (17,069) (16,934) (16,737) (50,740) Net (loss) gain $570 ($12,394) ($24,469) ($23,452) ($59,745) ($22,752) ($23,427) ($17,639) ($63,818) (1) The 495 Express Lanes opened for traffic on November 17, (2) Fee and other revenue includes recoveries from violation enforcement proceedings. (3) Non-cash provision for further maintenance expenditures (see notes to the financial statements in Appendix J for further information). (4) Includes interest accrued on the TIFIA Bonds. No payment is required until December Source: Capital Beltway Express LLC. 25

30 Table 4 Capital Beltway Express LLC Statement of Cash Flows ($000) Quarter ended 30-Sep-12 Quarter ended 31-Dec-12 1 Quarter ended 31-Mar-13 Quarter ended 30-Jun-13 Year ended 30-Jun-13 Quarter ended 30-Sep-13 Quarter ended 31-Dec-13 Quarter ended 31-Mar-14 Nine months ended 31-Mar-14 Cash flows from operating activities Toll and other revenue received 2 -- $793 $3,126 $4,741 $8,660 $6,112 $7,449 $6,565 $20,126 Operating expenditure -- (626) (3,600) (2,318) (6,544) (625) (274) (18,255) (19,154) Maintenance expenditure (111) (111) Interest received , Interest paid 3 -- (1,495) (8,779) (9,358) (19,632) (9,287) (9,030) (9,020) (27,337) Net cash flow from operating activities $595 ($745) ($9,200) ($6,889) ($16,239) ($3,887) ($1,835) ($20,694) ($26,416) (1) The 495 Express Lanes opened for traffic on November 17, (2) Other revenue received includes recoveries received from violation enforcement proceedings. (3) Does not include interest on the TIFIA Bonds because payment of interest is deferred until December Source: Capital Beltway Express LLC As described in more detail below, debt service, including debt service on the Series 2008 Non-AMT Bonds, and Hedging Obligations are payable from Revenues (including Toll Revenues) after the payment of Operating Costs and certain fees and administrative costs. The net revenue shown in Table 3 is calculated in this manner. The Borrower and the Operator, with the consent of the Banks, developed a program to reduce debt service and hedging costs by applying $151,425,642 of available reserves and $281,425,642 of new capital contributed by Transurban Express Lanes on June 3, 2014 to redeem on June 5, 2014 $364,340,000 aggregate principal amount of outstanding Series 2008 Non-AMT Bonds and to pay the costs of terminating $364,334,323 notional amount of Hedging Obligations. As described below, the Banks and the Issuer also agreed to amend some of the Borrower s coverage requirements for semiannual calculation periods ending December 31, Table 5 summarizes the sources and uses of funds applied to redeem portions of the Series 2008 Non- AMT Bonds of each Series and to reduce the notional amount of each of the Hedging Obligations. 26

31 Table Recapitalization Sources and Uses of Funds Sources ($000) Uses ($000) Reserves 1 Bond Redemptions Debt Service Reserve Fund 2 $35,400 Series 2008 A Bonds $234,595 Shared Services Reserve Fund 21,429 Series 2008 B Bonds 51,180 Capital Expenditure Reserve 19,000 Series 2008 C Bonds 44,895 Distribution Account 14,334 Series 2008 D Bonds 33,670 PABs Construction Account 8,263 Total Bond Redemptions $364,340 Revenue Stabilization Reserve 53,000 Total Reserves $151,426 Swap Termination Payments 68,512 Additional Contributed Equity 281,426 TOTAL SOURCES $432,852 TOTAL USES $432,852 (1) For further information regarding the reserves, see SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Capital and Operating Reserve Funds. (2) The balance remaining in the Debt Service Reserve Fund exceeds the Debt Service Reserve Requirement after the redemption on June 5, 2014 of a portion of the outstanding Series 2008 Non-AMT Bonds. Source: Capital Beltway Express LLC Consents to Waivers and Amendments. In June 2014, as part of the recapitalization described above, and in return for the Borrower s additional equity contribution, the Borrower, the Issuer, the Trustee (at the direction of the Instructing Controlling Party) and the Banks agreed to amend the Senior Loan Agreement, the Reimbursement Agreement and the Indenture and to permit the release of a portion of the unused funds in certain of the reserve accounts; and the Borrower and the Hedging Banks agreed to terminate a portion of the notional amount of each of the Hedge Agreements. The parties also agreed to amend and restate the debt service coverage covenants in each of the Senior Loan Agreement, the Indenture and the Reimbursement Agreement, with the result that the covenants will not apply until the six-month period ending on December 31, The Banks also agreed that a failure to achieve a Senior Debt Service Coverage Ratio of 1.15 to 1.00 for the Calculation Period ending on December 31, 2015 would not be an event of default under such agreements (and only in respect of that Calculation Period) if an equity contribution in the form of a cash deposit to the Revenue Fund is made in the amount and within the time specified in the Reimbursement Agreement. The parties also provided in the Sixth Supplemental Indenture for the selection of Series 2008 Non-AMT Bonds to be redeemed in a manner that differed from the method of selection specified in the Master Indenture. See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Senior Loan Agreement Oversight and Reporting Covenants below, SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT SENIOR LOAN AGREEMENT in Appendix F and SUMMARY OF CERTAIN PROVISIONS OF THE REIMBURSEMENT AGREEMENT, INCLUDING THE LETTERS OF CREDIT in Appendix G for descriptions of the financial covenants as amended. SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Limited Obligations The Indenture provides that the Series 2008 Non-AMT Bonds, the TIFIA Bonds and any other Bonds issued in accordance with the Indenture are special, limited obligations of the Issuer payable solely from the Trust Estate (including for the Series 2008 Non-AMT Bonds, payments to be made by the Borrower under the Senior Loan Agreement and in the case of the Series 2008 B, Series 2008 C, and Series 2008 D Bonds, moneys drawn under the applicable Letters of Credit). The Series 2008 Non-AMT Bonds and the TIFIA Bonds are not debts or obligations, moral or otherwise, of the Commonwealth, the CTB, VDOT or any other agency, instrumentality or political subdivision of the Commonwealth, and neither the full faith and credit nor the taxing power of the 27

32 Commonwealth, the CTB, VDOT or any agency, instrumentality or political subdivision of the Commonwealth is pledged to the payment of the principal of and interest on the Series 2008 Non-AMT Bonds or the TIFIA Bonds. The Issuer is a nonstock, nonprofit Virginia corporation and has no taxing powers. The Issuer s obligations under the Indenture, the Series 2008 Non-AMT Bonds, the TIFIA Bonds, the Senior Loan Agreement, the TIFIA Loan Agreement and any other agreement to which the Issuer is a party or by which it is bound are limited obligations payable solely from the assets of the Issuer, substantially all of which are pledged to the Trustee under the Indenture as part of the Trust Estate. The Indenture provides that recourse against the Issuer is limited to the Trust Estate, and the Indenture and each of the Loan Agreements provide that in no event shall any of the Issuer s directors, officers or agents be personally responsible for performing or paying any obligations of the Issuer under the Indenture, the Senior Loan Agreement, the TIFIA Loan Agreement, the Series 2008 Non- AMT Bonds or the TIFIA Bonds or any of the other Financing Documents. The Borrower was created as a limited liability company solely to enter into the Comprehensive Agreement and certain of the Project Agreements and Financing Documents relating to the Project. The Borrower has limited assets, all of which are pledged and assigned to the Trustee as part of the Trust Estate, and none of the Borrower s obligations are obligations of any its Members or of any of its officers, directors, agents or employees. Prospective investors should not expect the Issuer to pay directly the principal of or redemption or purchase price of the Series 2008 Non-AMT Bonds or the interest on the Series 2008 Non-AMT Bonds as such payments become due. Accordingly, any investment decision to purchase Series 2008 Non-AMT Bonds being remarketed should be made solely on the basis of the creditworthiness of the applicable Bank as provider of the applicable Letter of Credit. Neither the Borrower nor the Issuer is required to purchase tendered Series 2008 Non-AMT Bonds following a Bank Failure. Senior Loan Agreement General. The proceeds of the Series 2008 Non-AMT Bonds were loaned by the Issuer to the Borrower pursuant to the Senior Loan Agreement to refund all of the Series 2008 Refunded Bonds. To evidence its obligation to repay the loan, the Borrower executed and delivered to the Issuer, and the Issuer assigned to the Trustee, a promissory note (the Note ). The Borrower is obligated under the Senior Loan Agreement and the Note to make payments on the dates and in the amounts required to enable the Trustee to pay the principal or redemption price of and the interest on the Series 2008 Non-AMT Bonds (or to reimburse the Banks for moneys drawn under the Letters of Credit to make such payments). The Senior Loan Agreement permits the Borrower, at its option, to prepay all or a portion of its obligations under the Senior Loan Agreement and the Note at the times and in the amounts necessary to cause the optional redemption of all or a portion of Series 2008 Non-AMT Bonds. As described below, in the Indenture, the Issuer pledged and assigned to the Trustee substantially all of the Issuer s rights under the Senior Loan Agreement and the Note as security for the payment of the Secured Obligations, including the Series 2008 Non-AMT Bonds. The Senior Loan Agreement provides that the obligations of the Borrower under the Senior Loan Agreement are absolute and unconditional and are not subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach by the Issuer or the Trustee of any obligation to the Borrower or any indebtedness or liability at any time owing to the Borrower and provides that until all of the Series 2008 Non- AMT Bonds are fully paid or provision for the payment thereof has been made in accordance with the Indenture, the Borrower will not suspend or discontinue any payments, will perform and observe its obligations contained in the Senior Loan Agreement and will not terminate the Senior Loan Agreement. Operating and General Covenants. The Borrower covenanted in the Senior Loan Agreement that the Borrower will maintain arrangements satisfactory to the Trustee to ensure that all Toll Revenues and other Revenues are collected and deposited to the Revenue Fund daily, to the extent practicable either directly or 28

33 indirectly through payment mechanisms satisfactory to the Trustee. See The Revenues and the Trust Estate below and the definitions of Revenues and Toll Revenues in Appendix A. The Borrower made a number of other covenants under the Senior Loan Agreement, including covenants that it will maintain or require its contractors to maintain insurance that satisfies the insurance requirements in the Senior Loan Agreement, the Comprehensive Agreement and the other Finance Documents; that it will maintain operation of the 495 Express Lanes and will make all necessary repairs and replacements; that it will perform and observe in all material respects all of its covenants and other obligations contained in each Project Agreement and will enforce against any other party thereto each material covenant or obligation of such party; that it will not enter into any material contracts or agreements without the prior written approval of the Trustee (at the direction of the Instructing Controlling Party) or in general, permit the termination, amendment, modification or waiver of covenants under any Project Agreement without the approval or direction of the Trustee (at the direction of the Required Banks as Instructing Controlling Party). See Oversight and Reporting Covenants below and the definition of Instructing Controlling Party in Appendix A. The Borrower also covenanted that it will not directly engage at any time in any business other than ownership, management and financing of the Project and any Project Enhancements and activities directly related or complementary thereto; that it will not convey, sell, lease, assign, transfer or otherwise dispose of all or substantially all of its property, assets or business, either in a single transaction or in a series of transactions except as permitted in the Senior Loan Agreement; and that it will not enter into any transaction or agreement with any Affiliate except as permitted in the Senior Loan Agreement. Oversight and Reporting Covenants. The Borrower made a number of oversight and reporting covenants in the Senior Loan Agreement, including that it will require an Independent Engineer to inspect the 495 Express Lanes and provide reports to the Trustee and the Borrower semi-annually during the first two years of the Operating Period and annually thereafter; that it will provide to the Trustee unaudited quarterly consolidated financial statements within 60 days after the end of each fiscal quarter, audited financial statements of the Borrower within 140 days after the close of each fiscal year and a copy of the Borrower s annual operating budget, as and when delivered to VDOT. In the amendments to the Senior Loan Agreement, the Issuer and the Trustee agreed that they will waive any right to require the Borrower to meet the minimum financial ratios specified in the Senior Loan Agreement for any of the Calculation Periods ending on June 30 or December 31 in 2014 or on June 30, 2015 and that for the period ending on December 31, 2015, the Borrower may establish compliance with the minimum financial ratios by making in cash an additional equity contribution and by adding to Revenues the amount of such contribution. Thereafter, the Borrower will be required to deliver to the Trustee on each June 30 and December 31 (each a Calculation Date ) a compliance certificate that includes the computations and other information necessary to establish compliance by the Borrower with the Senior Debt Service Coverage Ratio of at least 1.25 to 1.00 and the Total Debt Service Coverage Ratio of at least 1.10 to 1.00 (together, the Coverage Test ) and the conditions for payments from the Distribution Fund and confirming that no Default or event that with notice or the passage of time or both, would constitute a Default has occurred and is continuing. The Senior Loan Agreement provides that except as described above, if the Borrower fails for any twelvemonth period to maintain the Coverage Test or if forecasts furnished by the Borrower project that Net Cash Flow may be inadequate to satisfy the Coverage Test for the following 12 months, the Borrower at the request of the Instructing Controlling Party, will engage a toll road consultant to review and analyze the operations of the Project and recommend actions regarding revising the rates, changing the methods of operation or other actions to increase the Net Cash Flow and either implement the toll road consultant s recommendations or undertake an alternative plan (provided that the Borrower is not required to take any action that may result in a breach of the Comprehensive Agreement or violate federal law. See the "s of Net Cash Flow, Senior Debt Service Coverage Ratio and Total Debt Service Coverage Ratio in Appendix A and SUMMARY OF CERTAIN PROVISIONS 29

34 OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT SENIOR LOAN AGREEMENT Special Covenants of Borrower Oversight Covenant in Appendix F. As noted below and in the summary of the Reimbursement Agreement in Appendix G, the Banks agreed that they would not require the Borrower to take such action if the Borrower failed to satisfy such coverage requirements as of any of the Calculation Periods ending on or before December 15, Hedging Requirements. The Borrower agreed in the Senior Loan Agreement (and in the TIFIA Loan Agreement) that it will enter into one or more Hedge Agreements, with one or more Hedging Banks implementing a swap that establishes a fixed interest rate for at least 98 percent of the principal amount of the Series 2008 Non- AMT Bonds projected to be outstanding for a period of 20 years after the date the Series 2008 Refunded Bonds were issued (the Senior Hedges ). Under the Indenture, moneys received from the providers of the Senior Hedges are pledged and assigned to the payment of debt service on Senior Lien Bonds, and regularly scheduled payments to such hedge providers are made pro rata from moneys in the Trust Estate that are available for payment of debt service on Senior Lien Bonds on parity with such debt service, except that payment from Revenues of Hedging Termination Obligations in respect of Senior Hedges is subordinate to interest and principal payments on Senior Lien Bonds and except as provided in the TIFIA Loan Agreement, payment of Hedging Termination Obligations in respect of the Senior Hedges is subordinate to the payment of principal of and interest on the TIFIA Bonds. With the approval of the Trustee (as directed by the Instructing Controlling Party), the Borrower may enter into additional Hedging Agreements. See Hedge Agreements below. Defaults and Remedies. The Senior Loan Agreement specifies a number of events that constitute Defaults under the Senior Loan Agreement, including among others, failure by the Borrower to pay any amount required to be paid under the Senior Loan Agreement or the Note, failure to observe and perform any covenant under the Senior Loan Agreement for a period of 30 days, the occurrence of a Bankruptcy Related Event with respect to the Borrower, a default or event of default by the Borrower under the Comprehensive Agreement or the Reimbursement Agreement or an Event of Default under the Indenture. One of the defaults under the Reimbursement Agreement that among other things could result in an Event of Default under the Senior Loan Agreement and under the Indenture is a failure to achieve a Senior Debt Service Coverage Ratio of 1.15 to 1.00 for any Calculation Period commencing with the Calculation Period ending on December 31, 2015 (or June 30, 2016 if a failure as of December 31, 2015 is cured with an equity deposit). See SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT SENIOR LOAN AGREEMENT Defaults and Remedies on Default in Appendix F and SUMMARY OF CERTAIN PROVISIONS OF THE REIMBURSEMENT AGREEMENT Events of Default in Appendix G. The Senior Loan Agreement provides a number of remedies that may be taken by the Trustee or by the Issuer with the consent of the Trustee, but as described in more detail below, so long as the Letters of Credit are in effect, neither the Trustee nor the Issuer may exercise remedies except at the direction or with the consent of the Required Banks as the Instructing Controlling Party. A Concessionaire Default under the Comprehensive Agreement or notice of a Termination Event under the Comprehensive Agreement (each an Instructing Controlling Party Step-in Event ) also would entitle, but not obligate, the Instructing Controlling Party, directly or through an agent, to take any and all actions to cure such breach and prevent the termination of the Comprehensive Agreement. See Intercreditor Arrangements Relating to Senior Bonds, Senior Secured Parties and the TIFIA Bonds. TIFIA Bonds The TIFIA Bonds were issued to the TIFIA Lender to evidence amounts drawn under the TIFIA Loan Agreement to pay or reimburse the Borrower for the payment of $588.9 million of Eligible Project Costs under the TIFIA Loan Agreement. No payment of principal or interest on the TIFIA Loan is required until December 2017 (the Debt Service Payment Commencement Date ), and during this period (the Capitalized Interest Period ), interest is capitalized and added to the principal amount of the TIFIA Loan. Thereafter and until the 30

35 20th anniversary of Substantial Completion, Mandatory Debt Service will be payable. Mandatory Debt Service totals $1.0 million in the first year in which it is payable and increases to, and then remains at, approximately 25 percent of the interest portion of the TIFIA Loan from the sixth year that interest is payable. Approximately $94.9 million of interest had accreted or accrued on the TIFIA Loan as of May 31, Scheduled Debt Service (the principal portion scheduled to be paid plus interest accrued during the previous six months, minus amounts paid as TIFIA Mandatory Debt Service) will be payable semiannually if and to the extent that funds are available therefor in accordance with the flow of funds under the Indenture. The TIFIA Loan Agreement provides that to the extent such funds are not sufficient, the unpaid interest portion of Scheduled Debt Service will be capitalized and the unpaid principal portion will be deferred and added to the outstanding TIFIA Loan Balance due and payable over the remaining life of the TIFIA Loan. The scheduled final maturity date of the TIFIA Bonds is December 31, See Flow of Funds and Intercreditor Arrangements Relating to Senior Bonds, Senior Secured Parties and the TIFIA Bonds Ranking of Claims Generally below and SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT TIFIA LOAN AGREEMENT in Appendix F. In general, the TIFIA Bonds are subordinate to the Senior Lien Bonds but are payable before any other Subordinate Bonds, except that following a Bankruptcy Related Event and for so long as the TIFIA Bonds are held by the USDOT, the TIFIA Bonds automatically be of equal rank with the Senior Lien Bonds and the Lien securing the TIFIA Bonds will be parri passu with the lien of the Senior Lien Bonds, subject to the limitations agreed to in the Intercreditor Agreement. Hedge Agreements In connection with the issuance of the Series 2008 Refunded Bonds, the Borrower entered into interest rate agreements (the Original Hedge Agreements ) with (i) Goldman Sachs Capital Markets, L.P. (novated to Goldman Sachs Bank USA) and guaranteed by Goldman Sachs Group; and (ii) DEPFA Bank plc. Following the issuance of the Series 2008 Refunded Bonds, DEPFA Bank plc transferred its interest in a portion of the hedging obligations under its Hedge Agreement to each of the Series B Bank; the Series C Bank; and the Series D Bank pursuant to novation confirmations (the Novation Confirmations and together with the Original Hedge Agreements, the Hedge Agreements ). The Hedge Agreements were amended in connection with the issuance of the Series 2008 Non-AMT Bonds to waive the ability of certain counterparties to terminate their Hedge Agreements upon the redemption of the Series 2008 Refunded Bonds and to refer to the Series 2008 Non-AMT Bonds (instead of the Series 2008 Refunded Bonds) and to the Amended and Restated Reimbursement Agreement. Under the Hedge Agreements, the Borrower is obligated to pay a fixed interest rate and receives variable interest rates equal to a fixed percentage of one-month LIBOR. The Hedge Agreements were amended again in connection with the redemption of a portion of the Series 2008 Non-AMT Bonds. FMS, as successor-in-interest to DEPFA Bank, and Goldman Sachs Bank USA (an affiliate of the Remarketing Agent) each is entering into a Waiver to its Hedge Agreement with the Borrower to amend the partial termination provisions, and each is entering into a transaction confirmation reflecting the partial termination of the notional amount thereunder in exchange for a partial termination payment. Each of the Series B Bank, the Series C Bank and the Series D Bank also is entering into a transaction confirmation reflecting the partial termination of the notional amount of its Hedge Agreement in exchange for a termination payment. See FINANCIAL ARRANGEMENTS. The Revenues and the Trust Estate In the Senior Loan Agreement, the Borrower covenants to ensure that all Toll Revenues and other Revenues are collected and deposited daily to the Revenue Fund held by the Trustee under the Indenture. 31

36 Revenues means all amounts received by or on behalf of the Borrower from Toll Revenues, Insurance Proceeds (other than proceeds of fire and other casualty insurance required to be paid into the Loss Proceeds Fund but including proceeds from business interruption insurance and loss of advance profits insurance), amounts received pursuant to any judgment or settlement with respect to the Project, amounts received with respect to Borrower Damages or other compensation from VDOT (which amounts may include Borrower Damages allocated to a Fiscal Year for which such amount was paid as compensation in respect of future Net Revenue Impact), condemnation awards with respect to the Project; all amounts payable to the Borrower (but not VDOT) as liquidated damages under contracts, in each case, to the extent the same relate to the Project; all amounts derived from the sale or other disposition of the Borrower s Interest (excluding, however, the proceeds of any direct or indirect sale of equity interests in the Borrower); subject to the proviso below, amounts derived as grants, loans or otherwise from the United States of America, the Commonwealth or any other Person by the Borrower for the acquisition, development, construction, management, operation and maintenance of the Project; and all other amounts derived from or in respect of the operation of the 495 Express Lanes which constitute revenues in accordance with Generally Accepted Accounting Principles, including without limitation Tolls and any interest income earned on any funds on deposit in any bank account or securities account, but excluding any proceeds of Permitted Disposals applied to redeem Bonds; provided, that Revenues exclude the proceeds of any Indebtedness incurred by the Borrower, including the TIFIA Bond, or capital contributions to the Borrower. Toll Revenues means all amounts received by or on behalf of the Borrower applicable to vehicles for the privilege of traveling on the 495 Express Lanes imposed pursuant to the provisions of the Comprehensive Agreement and from any other permitted use or operation of the 495 Express Lanes, including without limitation fees, Tolls, rates, incidental charges and other charges (including administrative charges such as late fees, insufficient funds fees, etc.). The Series 2008 Non-AMT Bonds and the TIFIA Bonds are payable solely from, and are secured solely by the pledge and assignment of, the Trust Estate, including the Revenues, pledged and assigned to the Trustee under the Indenture. The Indenture provides that the Trust Estate shall be held by the Trustee for the benefit of the Secured Parties, including Senior Secured Parties, and any of them, subject to the Intercreditor Agreement. As defined in the Indenture, Senior Secured Parties include the owners of the Series 2008 Non-AMT Bonds, the Trustee, the Banks, the Hedge Providers and upon the occurrence of a Bankruptcy Related Event and subject to the Intercreditor Agreement, the TIFIA Bondholders. Subordinate Lien Bonds (including the TIFIA Bonds unless a Bankruptcy Related Event occurs) are also Trust Estate Secured Obligations payable from the Trust Estate as described below. The Trust Estate includes all of the following property, franchises, rights and income, including any title or interest therein acquired after the date of the Master Indenture: (a) all right, title and interest of the Issuer in and to each Loan Agreement (except for Reserved Rights), each Note and any Security Interest granted to the Issuer in respect of the foregoing under the Collateral Documents or otherwise, and the present and continuing right of the Issuer to make claim for, collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable or receivable under each Loan Agreement and each Note, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Issuer is, or may become, entitled to do under each Loan Agreement and each Note; (b) all moneys from time to time held by the Trustee under the Indenture in any Fund or Account and, as to the Senior Lien Bonds only, the Debt Service Reserve Fund and funds deposited from time to time and earnings thereon in the PABs Sub-Account of the Construction Fund, and, as to the TIFIA Bonds only, the TIFIA Sinking Fund and funds deposited from time to time and earnings thereon in the TIFIA Sub-Account of the Construction Fund, other than (i) the Rebate Fund, (ii) any Defeasance Escrow Account, (iii) the Department Funding Account, 32

37 (iv) the Project Enhancement Account (as defined in the Comprehensive Agreement), and (v) any Fund or Account created by a Supplemental Indenture that is expressly excluded from the Trust Estate; (c) unless otherwise provided in a Supplemental Indenture as to the Senior Lien Bonds only, the rights to amounts payable to the Issuer or the Trustee under any Credit Facility or Liquidity Facility; (d) the rights to amounts payable to the Issuer, the Borrower or the Trustee pursuant to any Hedge Agreement under which payments by the Issuer or the Borrower are treated as Debt Service on the Bonds pursuant to the definition of Debt Service; and (e) any and all other property, revenues, rights or funds from time to time by delivery or by writing of any kind specially granted, assigned or pledged as and for additional security for any of the Trust Estate Secured Obligations in favor of the Trustee. Flow of Funds The Indenture requires that all Revenues be deposited to the Revenue Fund, requires that a number of other funds and accounts be held by the Trustee and prescribes the deposits, transfers and uses of moneys in such funds and accounts, some of which change in the event a Term Out as defined in the Reimbursement Agreement has occurred. In general, a Term Out occurs if one of one or more of the Banks owns Bank Bonds of one or more Series for more than 120 days or on the date its Letter of Credit expires. Because the Series 2008 A Bonds have been Bank Bonds since December 2010, the flow-of-funds provisions applicable during a Term Out and summarized below apply. During a Term Out, the Indenture requires that on the last day (or the preceding day if such last day is not a Business Day) of each calendar month (a Transfer Date ), all moneys in the Revenue Fund be paid or transferred by the Trustee in the following order of priority: First, to the Borrower to pay the projected Operating Costs (other than any bonus payments payable to the Design-Build Contractor under the Design-Build Contract) or Capital Expenditure, to the extent to be used solely in respect of meeting the Borrower s obligations under a Safety Compliance Certificate (as defined in the Indenture), in each case then due and payable or reasonably expected to become due and payable prior to the next succeeding Transfer Date; Second, after the application for such purposes of (x) funds on deposit in the Construction Fund and (y) funds from the Major Maintenance Reserve Fund, an amount equal to the cost of Major Maintenance required to comply with the Borrower s obligations under the Comprehensive Agreement or to comply with applicable Laws related to safety then due and payable or reasonably expected to become due and payable prior to the next succeeding Transfer Date; Third, to pay on a pari passu basis fees, administrative costs and expenses then due and payable or reasonably expected to become due and payable on or before the next succeeding Transfer Date to the Trustee under the Indenture or any Supplemental Indenture, to any Credit Facility Provider or Liquidity Provider and to the TIFIA Bondholder or any agent or trustee for the TIFIA Bondholder, in its respective capacity as loan servicer with respect to the TIFIA Bonds, under the TIFIA Loan Agreement, and amounts required to be paid into the Rebate Fund; Fourth, to pay Senior Interest Payments for deposit into the Senior Lien Bonds Interest Account in an amount equal to (A) with respect to any Senior Interest Payment that has an Interest Period of one month or less, the amount due on such Transfer Date and the amount to become due before the next succeeding Transfer Date, taking into account amounts then on deposit in the Senior Lien Bonds Interest Account and any amount to be 33

38 transferred from the Capitalized Interest Fund to such Account with respect to Interest on such Transfer Date, and (B) with respect to any Senior Interest Payment that has an Interest Period of greater than one month, the result of the total amount of Senior Interest Payments due on the next Interest Payment Date divided by the number of months in such Interest Period; provided that the monthly deposit on the Transfer Date that is on or immediately before the next Interest Payment Date takes into account the amount then on deposit in the Senior Lien Interest Account and any amount to be transferred from the Capitalized Interest Fund to such Account with respect to Interest on such Transfer Date; Fifth, (1) with respect only to any Series of Bonds in Term Out, to pay the mandatory sinking fund redemption of Senior Lien Bond principal of such Bonds in the amounts and on such Principal Payment Dates as specified in the Accelerated Repayment Schedule (which pursuant to the Reimbursement Agreement, begins on June 30, 2018); provided that with respect to any mandatory sinking fund redemption payment, an amount equal to 1/6 th of such payment is to be deposited into the Senior Lien Bond Principal Account starting on the Transfer Date that is six months before the applicable Principal Payment Date and on each Transfer Date falling on or before such Principal Payment Date; provided that the deposit on the Transfer Date immediately before such Principal Payment Date takes into account the amount then on deposit (provided that, if the result is not a positive number, it will be deemed to be zero and no deposit into the Senior Lien Bonds Principal Account will be required to be made on such Transfer Date); and (2) for all other Senior Lien Bonds, to pay Senior Principal Payments for deposit into the Senior Lien Bonds Principal Account starting on the Transfer Date that is six months before any Principal Payment Date and on each Transfer Date falling on or before such Principal Payment Date, an amount equal to 1/6 th of the amount of Senior Principal Payments due on such Principal Payment Date; provided that the deposit on the Transfer Date occurring on or immediately before such Principal Payment Date will take into account the amount then on deposit in the Senior Lien Bonds Principal Account and such deposit to the Senior Lien Bonds Principal Account will be an amount equivalent to the result of (a) the amount of Senior Lien Bond principal due and payable on such Principal Payment Date, minus (b) the amount standing to the credit of the Senior Lien Bonds Principal Account; provided that, if the result is not a positive number, it will be deemed to be zero and no deposit into the Senior Lien Bonds Principal Account will be required to be made on such Transfer Date; Sixth, to the appropriate Hedging Bank the amount of (i) any Hedging Termination Obligation upon termination of any Hedge Agreement (other than any Partially Subordinated Hedge) and (ii) with respect to any Partially Subordinated Hedge, any Hedging Termination Obligation upon either (A) a tax or illegality event or failure of the Borrower to pay Hedge Obligations or (B) the acceleration of the maturity of any Senior Lien Bond other than due to a failure to pay a Hedging Termination Obligation in respect of a Partially Subordinated Hedge; Seventh, to the Debt Service Reserve Fund the amount needed so that such Fund contains the applicable Cumulative Debt Service Reserve Fund Requirement; Eighth, to pay Mandatory Debt Service on the TIFIA Bonds for deposit in the Subordinate Lien Bonds Interest Account in an amount equal to (A) with respect to any Mandatory Debt Service on the TIFIA Bonds that has an Interest Period of one month or less, the amount due on such Transfer Date and the amount to become due before the next succeeding Transfer Date, taking into account amounts then on deposit in the Subordinate Lien Bonds Interest Account; and (B) with respect to any Mandatory Debt Service on the TIFIA Bonds that has an Interest Period of greater than one month, the result of the total amount of Mandatory Debt Service on the TIFIA Bonds due on the next Interest Payment Date divided by the number of months in such Interest Period; provided that the monthly deposit on the Transfer Date which is on or immediately before the next Interest Payment Date takes into account the amount then on deposit in the Subordinate Lien Bonds Interest Account; Ninth, to the O&M Reserve Fund the amount necessary to maintain the O&M Reserve Required Balance; 34

39 Tenth, to the Major Maintenance Reserve Fund the amount necessary to maintain the Major Maintenance Reserve Required Balance; Eleventh, to pay interest constituting Scheduled Debt Service for deposit into the Subordinate Lien Bonds Interest Account to an amount equal to (A) with respect to any interest constituting Scheduled Debt Service that has an Interest Period of one month or less, the amount due on such Transfer Date and the amount to become due before the next succeeding Transfer Date, taking into account amounts then on deposit in the Subordinate Lien Bonds Interest Account, and (B) with respect to any interest constituting Scheduled Debt Service that has an Interest Period of greater than one month, the result of the total amount of interest constituting Scheduled Debt Service due on the next Interest Payment Date divided by the number of months in such Interest Period; provided that the monthly deposit on the Transfer Date which is on or immediately before the next Interest Payment Date takes into account the amount then on deposit in the Subordinate Lien Bonds Interest Account; Twelfth, to pay principal or maturity value (including the principal component of the Redemption Price due in connection with any mandatory sinking fund redemption) constituting Scheduled Debt Service ( TIFIA Scheduled Principal ) for deposit into the Subordinate Lien Bonds Principal Account starting on the Transfer Date that is six months before any Principal Payment Date and on each Transfer Date falling on or before such Principal Payment Date, an amount equal to 1/6th of the amount of TIFIA Scheduled Principal due on such Principal Payment Date; provided that the deposit on the Transfer Date occurring on or immediately before such Principal Payment Date takes into account the amount then on deposit in the Subordinate Lien Bonds Principal Account and such deposit to the Subordinate Lien Bonds Principal Account is an amount equivalent to the result of (a) the amount of TIFIA Scheduled Principal due and payable on such Principal Payment Date, minus (b) the amount standing to the credit of the Subordinate Lien Bonds Principal Account; provided that, if the result is not a positive number, it is deemed to be zero and no deposit into the Subordinate Lien Bonds Principal Account is required to be made on such Transfer Date; and Thirteenth, all remaining amounts in the Revenue Fund, if any, are to be transferred to the Term Out Cash Sweep Fund to redeem Series 2008 Non-AMT Bonds on or after the Letter of Credit Termination Dates; provided that if all of the Series 2008 Non-AMT Bonds are remarketed or refunded, amounts remaining in the Term Out Cash Sweep Fund are to be deposited to the Revenue Fund and applied in accordance with the flow of funds specified in the Indenture for periods that are not Term Out periods. Flow of Funds with No Term Out In the absence of a Term Out Period (for example if Alternate Credit Facilities are in effect or if the Series 2008 Non-AMT Bonds are remarketed or refunded), Revenues deposited to the Revenue Fund are to be applied in accordance with the flow of funds provisions specified in the Indenture for such periods, as described in Appendix E. See SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Flow of Funds in Appendix E. Debt Service Reserve Fund The Capital Beltway Funding Corporation of Virginia Project Senior Lien Bonds Debt Service Reserve Fund (the Debt Service Reserve Fund ) was funded when the Series 2008 Non-AMT Bonds were issued, in an amount equal to the Cumulative Debt Service Reserve Fund Requirement (the initial Debt Service Reserve Requirement for the Series 2008 Non-AMT Bonds of each series or $58,900,000) from proceeds of the TIFIA Bonds. Subsequently, the TIFIA Bond proceeds were replaced with equity funds and were transferred to the Construction Fund. In connection with the redemption of a portion of the Series 2008 Non-AMT Bonds as described above, the Cumulative Debt Service Reserve Requirement is lower, and $35,400,000 of the excess in the Debt Service Reserve Fund was withdrawn and applied to redeem a portion of the Series 2008 Non-AMT Bonds. The Indenture provides that amounts on deposit in the Debt Service Reserve Fund are to be transferred to 35

40 the Senior Lien Bonds Debt Service Account if, after transfers from the other funds and accounts, moneys in the Senior Lien Bonds Debt Service Account are not sufficient to pay when due the principal of and interest on Senior Lien Bonds. The Indenture also provides that the Debt Service Reserve Fund is created solely for the benefit of the Senior Secured Parties and will not be subject to any Security Interest in favor of any person other than the Senior Secured Parties. Pursuant to the Indenture and upon notice to the TIFIA Bondholder, the Borrower may substitute for all or a portion of the cash or Permitted Investments (as defined in the First Supplemental Indenture) on deposit in the Debt Service Reserve Fund, a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar instrument (a Debt Service Reserve Fund Contract ) that provides for payments when and as required for purposes of such Fund and is issued by an obligor whose long term credit rating is rated in one of the two highest generic rating categories by each rating agency. The Indenture provides that so long as the cash or Permitted Investments on deposit in the Debt Service Reserve Fund were not funded with proceeds of the Series 2008 Non-AMT Bonds, Revenues or the proceeds of the TIFIA Bonds, any moneys withdrawn from the Debt Service Reserve Fund in connection with the deposit of a Debt Service Reserve Fund Contract therein will be deposited into the Distribution Fund. Any repayment or reimbursement obligation under the Debt Service Reserve Fund Contract will not be payable by the Borrower or by the Issuer nor will the provider of any such Debt Service Reserve Fund Contract have a lien on, or a security interest in, the Trust Estate. The Indenture also provides that if any of the funds on deposit in the Debt Service Reserve Fund at any time are substituted with contributions of equity or with a Debt Service Reserve Fund Contract, the amounts released shall be transferred and deposited, (A) to the extent such amounts represent proceeds of the TIFIA Bond, to the TIFIA Sub-Account of the Construction Fund, and (B) to the extent such amounts represent Revenues or proceeds of Senior Lien Bonds, to the Revenue Fund for application in accordance with the flow of funds; provided that, if any of the funds on deposit in the Debt Service Reserve Fund are substituted with contributions of equity, the credit balance of the Debt Service Reserve Fund immediately following such substitution must be at least equal to the credit balance thereof immediately prior to such substitution. Capital and Operating Reserve Funds The Indenture also provided for the creation and funding of a Major Maintenance Reserve Fund, a Ramp- Up Reserve Fund, an O&M Reserve Fund, a Capital Expenditure Reserve Fund and a Revenue Stabilization Reserve Fund, each to be held by the Trustee under the Indenture and each to be available for payments of debt service in the event amounts available in the Senior Lien Bond Debt Service Account are not sufficient. In some cases, the Borrower (with the consent of the Instructing Controlling Party) may substitute for all or any portion of the cash or Permitted Investments in one or more of these reserve funds a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar agreement that is non-recourse to the Borrower or the Issuer and meets all of the other conditions set forth in the Indenture. In addition, the Sixth Supplemental Indenture permits, at the request of the Borrower and with the consent of the Instructing Controlling Party if any Credit Facility or Liquidity Facility is in effect or if the Borrower has any obligations payable under the Reimbursement Agreement, the transfer of amounts in one or more of the following funds to provide for the optional redemption of Bonds, the reimbursement of the Banks for funds drawn under the Letters of Credit and/or the termination of Hedge Agreements, including the payment of Hedge Termination Obligations. The Sixth Supplemental Indenture also provided for the transfers from the Ramp-Up Reserve Fund, the Capital Expenditure Reserve Fund and the Revenue Stabilization Reserve Fund to effect the 2014 recapitalization and the redemptions and terminations described above. See FINANCIAL ARRANGEMENTS 2014 Recapitalization above and SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Special Covenants of Borrower Project Funds and Accounts in Appendix F. Major Maintenance Reserve Fund. The Major Maintenance Reserve Fund was funded in December 2012 in the amount of $1,286,000 to pay Major Maintenance costs. 36

41 Ramp-Up Reserve Fund. The Ramp-Up Reserve Fund was funded in November 2012 with a deposit of $30 million pursuant to the Equity Funding Agreements for the purpose of paying Operating Costs and then Debt Service on Senior Lien Bonds to the extent funds in the Revenue Fund are not sufficient and following the fifth anniversary of Substantial Completion, to fund the O&M Reserve Fund. O&M Reserve Fund. Amounts, if any, on deposit in the O&M Reserve Fund are to be used (i) to pay Operating Costs to the extent funds on deposit in the Revenue Fund, the Ramp-Up Reserve Fund and the Revenue Stabilization Reserve Fund are insufficient to pay such amounts or (ii) with the consent of the Instructing Controlling Party if a Letter of Credit or Liquidity Facility is in effect or if the Borrower has any obligations payable under the Reimbursement Agreement, to the optional redemption of a portion of the Bonds, the reimbursement of the Banks for moneys drawn under the Letters of Credit and the partial termination of one or more of the Hedge Agreements, including the payment of Hedging Termination Obligations. Capital Expenditure Reserve Fund. The Capital Expenditure Reserve Fund was funded in November 2012 with a deposit of $19,000,000 pursuant to the Equity Funding Agreements to pay potential construction costs associated with the connection between the existing Dulles Toll Road and the 495 Express Lanes. The Indenture provides that to the extent the amount in the Capital Expenditure Reserve Fund exceeds $19,000,000 after any transfer of funds from the Construction Fund to the Capital Expenditure Reserve Fund, the excess is be transferred to the Revenue Stabilization Reserve Fund or at the request of the Borrower and with the consent of the Instructing Controlling Party at any time a Credit Facility or Liquidity Facility is in effect or the Borrower has any obligations payable under the Reimbursement Agreement, to the optional redemption of a portion of the Bonds, the reimbursement of the Banks for moneys drawn under the Letters of Credit and the partial termination of one or more of the Hedge Agreements, including payment of Hedging Termination Obligations. As described above, funds in the Capital Expenditure Reserve Fund were transferred as part of the 2014 recapitalization. Revenue Stabilization Reserve Fund. The Revenue Stabilization Reserve Fund was funded initially in November 2012 with a deposit of $50 million from amounts paid pursuant to the Equity Funding Agreements, and a second deposit of $41.8 million was made in 2013 from the unused portion of the equity commitment. Amounts on deposit in the Revenue Stabilization Reserve Fund are to be used to pay Operating Costs and Debt Service on the Senior Lien Bonds to the extent funds on deposit in the Revenue Fund and the Ramp-Up Reserve Fund are not sufficient to pay such amounts and, upon the Borrower s request and with the consent of the Instructing Controlling Party if a Credit Facility or Liquidity Facility is in effect or the Borrower has any obligations payable under the Reimbursement Agreement, amounts on deposit in the Revenue Stabilization Reserve Fund may be applied to the optional redemption of a portion of the Bonds, the reimbursement of the Banks for moneys drawn under the Letters of Credit and the partial termination of one or more of the Hedge Agreements, including payment of Hedge Termination Obligations. The Indenture also provides that beginning with the June 30, 2013 Calculation Date and on each Calculation Date thereafter through the December 31, 2016 Calculation Date, a portion of the balance remaining in the Revenue Stabilization Reserve Fund is to be transferred to the Distribution Fund and that the Revenue Stabilization Reserve Fund will be closed following the fifth anniversary of Substantial Completion. Approximately $4.5 million has been transferred to the Distribution Fund. As described above, funds in the Revenue Stabilization Reserve Fund also were transferred as part of the 2014 recapitalization. Shared Services Reserve Fund. The Shared Services Fund was created pursuant to the Fifth Supplemental Indenture in July 2012 and funded with moneys received from 95 Express Lanes LLC under the Shared Facilities Agreement. Moneys in the Shared Services Reserve Fund are to be used to pay Operating Costs and Debt Service on the Series 2008 Non-AMT Bonds to the extent funds on deposit and available for that purpose in the Revenue Fund, the Ramp-Up Reserve Fund, the Revenue Stabilization Fund and the O&M Reserve Fund are not sufficient or, with the consent of the Instructing Controlling Party if a Credit Facility or Liquidity Facility is in effect or the Borrower has obligations payable under the Reimbursement Agreement, to redeem 37

42 Bonds, reimburse the Banks for moneys drawn under the Letters of Credit and pay costs of partial termination of the Hedge Agreement, including Hedge Termination Obligations. The Fifth Supplemental Indenture provides that following the earlier of (i) the fifth anniversary of Substantial Completion or (ii) a Total Refinancing, all funds remaining in the Shared Services Reserve Fund are to be deposited to the Distribution Fund and the Shared Services Reserve Fund is to be closed. As described above, pursuant to the Sixth Supplemental Indenture, funds in the Capital Expenditure Reserve Fund were transferred as part of the 2014 recapitalization. Intercreditor Arrangements Relating to Senior Bonds, Senior Secured Parties and the TIFIA Bonds An Amended and Restated Intercreditor Agreement, dated as of June 12, 2008, among the Trustee, the Senior Secured Parties and the TIFIA Bondholder (together with each Accession Agreement, the Intercreditor Agreement ) sets forth intercreditor terms and definitions and defines Instructing Controlling Party. Ranking of Claims Generally. The Intercreditor Agreement, the Indenture and the TIFIA Loan Agreement provide that the TIFIA Obligations, including the TIFIA Bonds, are subject and subordinate to the Senior Obligations, including the Series 2008 Non-AMT Bonds, and Credit Facility Provider Obligations, and that (except with respect to the Security Interest in the funds in the TIFIA Sinking Fund and funds deposited from time to time in the TIFIA Sub-Account of the Construction Fund and earnings thereon, which are to be available solely to make payments on the TIFIA Bond) any Security Interest securing the TIFIA Obligations is subject and subordinate to the Security Interest securing the Senior Obligations. The Intercreditor Agreement provides, however, that upon the occurrence and during the continuance of a Bankruptcy Related Event, any TIFIA Bonds held by the USDOT as of the date of such Event of Default (and only for such time as such TIFIA Bonds are held by the USDOT) will automatically become and be of equal rank and on parity with the Senior Lien Bonds and except as provided in the Intercreditor Agreement, the Lien securing the TIFIA Bonds then held by the USDOT will automatically immediately become and be of equal rank and on parity with the Lien on and to the Collateral (other than amounts in the Debt Service Reserve Fund, the Senior Lien Bonds Debt Service Account or any funds in the PABS Sub-Account of the Construction Fund ) securing the Senior Lien Bonds (a springing lien ). The Intercreditor Agreement also provides that in the event the Bankruptcy Related Event is cured, the TIFIA Bonds no longer will be treated as Senior Lien Bonds and will revert to the status of Subordinate Lien Bonds for all purposes. See Appendix A for the definition of Bankruptcy Related Event. Acceleration. The TIFIA Bondholder also agrees in the Intercreditor Agreement that it will not accelerate the TIFIA Loan and will not instruct the Trustee to accelerate the maturity of the TIFIA Bonds unless (i) the Senior Lien Bonds have been accelerated or (ii) the Borrower has failed to make any optional redemptions of Senior Lien Bonds required pursuant to an agreement with the Credit Facility Providers and to repay any principal of Senior Lien Bonds that becomes due and payable on the final maturity of the Senior Lien Bonds and after such acceleration or failure, the Instructing Controlling Party directs the Trustee to sell or transfer all or a substantial part of the membership or equity interests in the Borrower or all or a substantial part of the membership or equity interests in the Borrower are sold or transferred pursuant to a foreclosure or action in lieu of foreclosure of the Trust Estate, if in either case such action or remedy results in any release or impairment of the lien of the Indenture in the Trust Estate (other than the membership interests or equity interest in the Borrower) granted for the benefit of Owners. Instructing Controlling Party. As defined in the Intercreditor Agreement and by reference, in the Indenture, the Reimbursement Agreement and the other financing documents, Instructing Controlling Party means the party holding, or designated by the party or parties holding, more than 50 percent of the aggregate outstanding principal amount of the Senior Lien Bonds; provided that (i) with respect to any such Senior Lien Bonds that are supported or guaranteed by a Credit Facility, the Credit Provider of such Credit Facility is deemed to be the sole holder of such Bonds for the purpose of designating the Instructing Controlling Party and (ii) if no Senior Lien Bonds remain Outstanding and no Credit Facility Provider Liabilities exist with respect to Credit Facilities securing Senior Lien Bonds and all amounts due under Senior Hedge Agreements have been paid, then 38

43 the Owner of the TIFIA Bonds will be the Instructing Controlling Party; provided further that at any time while the Borrower continues to have any obligations outstanding under the Reimbursement Agreement, notwithstanding anything above, the Instructing Controlling Party is the Bank Agent, acting on the instructions of the Required Banks (as defined in the Reimbursement Agreement). THE BORROWER AND THE OPERATOR The Borrower is a subsidiary of the Transurban Group ( Transurban ) and holds the rights to develop and operate the Project. Transurban is an established toll road developer, manager and operator with interests in Australia and the United States. Transurban has nearly 20 years of experience developing and operating complex and innovative urban networks of toll road projects. The effective management of toll road projects involves leveraging a network footprint in its target markets, taking a leading role in shaping policy and utilizing its core capabilities. These core capabilities include: Network planning and forecasting; Operations and customer management; Project development and delivery; Application of technology; and Community engagement. Transurban is focused on the long-term management of its toll road projects to achieve the best outcomes for its investors, partners and the community. Transurban is listed on the Australian Securities Exchange ( ASX ) under the symbol TCL with more than AUS$900 million in proportional annual toll revenues. Transurban is ranked within the Top 30 companies on the ASX and has a market capitalization of approximately $14 billion. Certain operations and administrative and maintenance functions are administered on behalf of the Borrower by Transurban (USA) Operations Inc., the Operator, which provides operations and maintenance support to Transurban for its toll road projects in the United States. Transurban (USA) Inc., an affiliate of the Operator, and other wholly-owned Transurban entities provide resources (including personnel) to the Operator to support those functions. The Operator and Transurban (USA) Inc. are parties to an Intercompany Services Agreement, dated as of August 5, 2010, that provides for the terms pursuant to which Transurban (USA) Inc. will provide any such services to the Operator. Transurban (USA) Inc. and the Operator are wholly-owned subsidiaries of Transurban. On June 3, 2014, Transurban, through its wholly-owned subsidiary, Transurban Express Lanes, purchased 965,517,250 units of the Borrower for an aggregate purchase price of $281,425,642. The proceeds from the issuance of the new units to Transurban Express Lanes were used to fund a portion of the simultaneous recapitalization of the Borrower. Following the issuance of these units, Transurban Express Lanes owns approximately 76.1 percent of the outstanding units of the Borrower, and Transurban DRIVe owns the remaining 23.9 percent of the outstanding units of the Borrower. INVESTMENT CONSIDERATIONS The investment considerations and risks discussed below, among others, should be considered in evaluating the ability of the Banks to honor drawings under the Letters of Credit and the ability of the Borrower to make payments under the Reimbursement Agreement and the TIFIA Loan Agreement (or to provide for payments on the Series 2008 Non-AMT Bonds if required). The following discussion is not meant to be an exhaustive list 39

44 of the risk and other factors that should be considered in connection with the purchase or tender of the Series 2008 Non-AMT Bonds and does not necessarily reflect the relative importance of the various risks and other factors. Potential purchasers of the Series 2008 Non-AMT Bonds are advised to consider the following factors, among others, and to review all of the other information in and incorporated into this Remarketing Circular in evaluating the Series 2008 Non-AMT Bonds. Any one or more of the risks and considerations discussed, and others, could adversely affect the Project and/or the ability of one or more of the Banks or the Borrower to provide for the payment or the purchase of the Series 2008 Non-AMT Bonds and could lead to substantial decreases in the market value and/or the liquidity of the Series 2008 Non-AMT Bonds. There can be no assurance that other risk factors will not become material in the future. Letter of Credit Bank Considerations The Series 2008 B Bonds, the Series 2008 C Bonds and the Series 2008 D Bonds are supported by the Letters of Credit. The banking industry has experienced significant stress since the Series 2008 Non-AMT Bonds were issued, from the effects of downturn and also as a result of vastly increased regulatory demands. Actual or perceived weaknesses in the credit or liquidity of one or more of the Banks, including additional ratings downgrades, may have a material and adverse impact on the interest rate and therefore on the liquidity and interest costs of the Series 2008 Non-AMT Bonds. The ratings of all of the Banks have been reduced since the Series 2008 Non-AMT Bonds were issued, and additional downgrades could result in such Series 2008 Non-AMT Bonds becoming Liquidity Provider Bonds. The Series 2008 B Bonds, for example, no longer have investmentgrade ratings, bear interest at higher rates than the Series 2008 C Bonds and Series 2008 D Bonds, and between July 6, 2011 and September 7, 2011 and between December 14, 2011 and February 2, 2012, portions of the Series B Bonds were not remarketed and became Liquidity Provider Bonds (Bank Bonds). As described above under THE SERIES 2008 NON-AMT BONDS Remarketing Considerations, no assurance can be given that all of the Series 2008 Non-AMT Bonds always can be remarketed and if they are not remarketed, that all the Banks will be able to honor draws on their Letters of Credit, particularly in June 2016, when all of the Letters of Credit are scheduled to expire and all of the Series 2008 Non-AMT Bonds supported by the Letters of Credit will be subject to Mandatory Purchase on the same day. The Borrower may not be able, and is not required, to purchase Series 2008 Non-AMT Bonds if the Letters of Credit are not extended or replaced, if the Series 2008 Non-AMT Bonds are not converted to a Mode that does not require Credit or Liquidity Facilities or if one or more of the Banks does not honor a draw under its Letter of Credit. See Bankruptcy-Related Risks. Limited Obligation of the Issuer The Series 2008 Non-AMT Bonds and the TIFIA Bonds are special, limited obligations of the Issuer payable solely from the Trust Estate (including in the case of the Series 2008 B Bonds, Series 2008 C Bonds and Series 2008 D Bonds, moneys drawn under the applicable Letters of Credit). The Series 2008 Non-AMT Bonds and the TIFIA Bonds are not debts or obligations, moral or otherwise, of the Commonwealth, the CTB, VDOT or any other agency, instrumentality or political subdivision of the Commonwealth. Neither the full faith and credit nor the taxing power of the Commonwealth, VDOT or the CTB is pledged to the payment of the principal of and interest on the Series 2008 Non-AMT Bonds or the TIFIA Bonds. The Issuer has no taxing power. The Issuer was formed solely to assist the Borrower in financing the Project, has not engaged in any activities other than in connection with the Project and has not played any management role in the construction or operation of the Project. The Issuer has no employees and no plans to hire employees, did not participate in or approve the design and construction of the Project or this Remarketing Circular and has no rights of any kind in connection with Project operations. So long as Credit Facilities (such as the Letters of Credit) are in effect, the Issuer s rights and actions under the Indenture, the Senior Loan Agreement and the TIFIA Loan Agreement require the consent or direction of the Required Banks as the Instructing Controlling Party. 40

45 The Borrower is a Limited, Special-Purpose Entity The Borrower does not own any material assets other than its rights under the Comprehensive Agreement and the other Project Agreements, substantially all of which have been assigned and pledged to the Trustee. The Borrower s primary source of revenues is derived from the collection of tolls from operation of the 495 Express Lanes, and the Borrower s ability to make payments pursuant to the Senior Loan Agreement, the Reimbursement Agreement and the TIFIA Loan Agreement depends entirely upon increases in demand for and travel on the 495 Express Lanes and receipt of sufficient revenues from tolls to pay operations and maintenance expenses, required capital expenses, such as the costs of safety compliance orders and debt service and other obligations. The obligations of the Members are limited, and although the Members or their affiliates contributed an additional $281,425,642 to reduce the amount of the Borrower s outstanding Bond and Hedge-related obligations, the Borrower still has very significant outstanding obligations to the Banks, to the Hedge Providers and to the TIFIA Lender, and no assurances can be given that any Member or equity participant will be willing or able to make additional contributions if traffic and Revenue do not increase as expected. Neither of the Members, nor any direct or indirect owner thereof, nor any officer, director, member, agent or employee thereof, is obligated to make any payments in connection with, and none of such parties is guaranteeing, the Series 2008 Non-AMT Bonds, the Borrower s obligation to reimburse the Banks, to repay the TIFIA Loan or any other agreement entered into by the Borrower or by any other party in connection with the Series 2008 Non-AMT Bonds, the TIFIA Loan, the Reimbursement Agreement or the Project. Similarly, although the Borrower expects to share the same ETTM System, space in the Express Operations Center and the same Operator with the I-95 Express Lanes Project (and thus to increase efficiency and reduce costs), the two projects, project agreements and obligors otherwise are completely separate, and neither will be obligated, or will be permitted, to subsidize or assist the other, financially or otherwise. Political, Litigation and Community Risks As is the case with many major infrastructure projects, operation of the 495 Express Lanes may prompt community and/or political reaction. The 495 Lanes are managed lanes with no pre-set maximum toll rates. The 495 Express Lanes are not the first toll roads in Virginia, but they are the first all-electronic, managed HOT Lanes in northern Virginia and are still relatively new to the public. Public resistance or antagonism at having to pay what could be a relatively high toll to avoid increasingly heavy congestion on the general purpose lanes or other routes, as well as unfamiliarity with the ramps on and off the 495 Express Lanes, could lead to public opposition, political pressure and generally to lower traffic volumes. The Operator conducts campaigns to familiarize the public with the ramps and how the lanes work, and VDOT is completing improvements to a major merge area at the northern end of the 495 Express Lanes, but no assurance can be given that such efforts will lead to significantly higher usage, or that the community will understand the benefits of, and the need for, the managed lanes. In addition, in 2012, VDOT began charging a monthly fee for new E-ZPass transponders, and reportedly the fee, although not a large one, has discouraged some drivers from acquiring transponders, particularly E-ZPass Flex transponders that permit free travel on the 495 Express Lanes. In April 2014, the General Assembly enacted legislation to require VDOT to cease charging such fees. No assurance can be given, however, that the removal of the fee will prompt significantly more drivers to acquire and use the E-ZPass transponders. Over time, political pressure also could lead to legislation that would harm operations and lead to reduced Revenues on the 495 Express Lanes. Under the Comprehensive Agreement, VDOT is obligated to make compensation payments to the Borrower for lost toll revenues in the event of a Compensation Event, including a Discriminatory Change in Law or enactment of any Law that permits other vehicles to travel on the 495 Express Lanes without paying the full toll established by the Borrower, but as with most Commonwealth agency obligations, the Comprehensive Agreement provides that payment of VDOT s compensation to the Borrower is 41

46 subject to appropriation by the General Assembly and allocation by the CTB. In any event not every Change of Law would be a Compensation Event even if such event had an adverse impact on the Project or reduces the revenues or increases the expenses of the Project. There can be no assurance that any amounts that VDOT may be required to pay would be sufficient, after the payment of fees and operations and maintenance expenses, to pay debt service on outstanding Series 2008 Non-AMT Bonds or to reimburse the Banks for such payments under the Letters of Credit, and during the period the Borrower is pursuing its remedies for Damages, its revenues may not be sufficient after payments of fees and operating and maintenance expenses to pay such amounts. HOT Lanes represent one side of competing public policies with respect to urban transportation and related environmental, quality-of-life and other issues. VDOT may in the future construct a number of other road improvements and additional park-and-ride, bus and other transit facilities to address traffic, environmental and other concerns in areas near the Capital Beltway. Such facilities may make it easier and more likely that HOV-3 use of the 495 Express Lanes will increase, which would result in a number of additional public benefits, but because HOV-3 vehicles with E-ZPass Flex transponders switched to HOV-3 status are not tolled, such public benefits could also result in lower toll revenues. The Comprehensive Agreement requires that VDOT compensate the Company if the number of HOV-3 vehicles using the 495 Express Lanes exceeds specified percentages over specified periods of time, but no assurance can be given that VDOT will be required or able to compensate the Borrower for all of its losses all of the time. In addition to political and community actions or pressures that could have a direct effect on the Project or on the Borrower, political pressure affecting the Commonwealth in general or VDOT or the USDOT or FHWA in particular could have an effect on the Borrower s ability to pay debt service on the Series 2008 Non-AMT Bonds or to reimburse the Banks for such payments. Future state and/or federal budget, tax or expenditure limitations or otherwise could have direct and substantial effects on the amount of funds available to VDOT or for any particular project. For example, federal legislation that authorizes transportation expenditures expires on September 30, 2014, and the Congressional Budget Office and the USDOT estimate that funds in the Highway Account in the federal Highway Trust Fund will be exhausted by August 2014, if not earlier. No assurance can be given that VDOT will always have sufficient resources to perform its monetary and other obligations under the Comprehensive Agreement. Appropriation Risk VDOT agreed in the Comprehensive Agreement to share or assume certain risks and to compensate the Borrower upon the occurrence of certain events. The Comprehensive Agreement provides, however, that payment of all of VDOT s monetary obligations, including the obligation to make compensation payments relating to excessive non-paying traffic volume and compensation payments relating to certain terminations of the Comprehensive Agreement, and payment of other losses or amounts due and owing by VDOT pursuant to the Comprehensive Agreement, are subject to appropriation by the General Assembly and to allocation by the CTB. The General Assembly is not always in session, however, and no assurance can be given that the Governor and the General Assembly always will take such actions or take such actions within the timeframe needed, particularly if balancing the budget would be difficult, if federal funding is cut back dramatically and/or if support for the Project has eroded. The CTB is also authorized to de-allocate moneys previously appropriated and allocated to a project in the event such funds are not expended when expected because of a delay in the project, an unexpected shortfall of moneys or for any other reason. Any failure of VDOT to make payments under the Comprehensive Agreement could result in a shortfall of monies to pay operations and maintenance expenses, major maintenance expenses and thus to pay debt service on the Series 2008 Non-AMT Bonds and under the Reimbursement Agreement. Suing to require the General Assembly to appropriate the needed funds and/or seizing the Project are not remedies available to Bondholders under Virginia law. Receipt of Commonwealth funds, to the extent appropriated, can take up to 330 days. Disagreements about whether compensation is owed and about the amount and timing of compensation (and other disputes) could 42

47 arise and could take additional time to resolve, which could mean delay of more than 330 days and could result in a shortfall of money to pay debt service on the Bonds, including the Series 2008 Non-AMT Bonds, or to reimburse the Banks for such payments. Federal Budget Impacts Since 2007, when the Comprehensive Agreement was signed, a number of military and other federalrelated facilities, including facilities located in northern Virginia, have closed or reduced operations. In addition, federal budget legislation resulted in significant decreases in military and other federal and federal-contractor employment in the northern Virginia area beginning in January 2013 (in addition to the overall federal government shutdown in October 2013). If legislation is not amended or repealed, future cutbacks and/or closures could have an adverse impact on the regional economy, travel patterns and usage of the 495 Express Lanes. Political stalemates and inaction also may result in reduced federal grants to VDOT, which could constrain VDOT s budgets and expenditures. See Uncertainties of Forecasts and Assumptions and Appropriation Risk. Control-Related Risks As in any commercial arrangement, the parties may disagree about the appropriate course of action to be taken, particularly if adverse events, conditions or circumstances occur. The Borrower and VDOT have different priorities and interests and may have difficulty resolving disputes. Similarly, the Banks, the TIFIA Bondholder and the Trustee on behalf of the Holders of the Bonds, including the Series 2008 Non-AMT Bonds, may have different interests and priorities following an adverse event or following a termination of the Comprehensive Agreement, and no assurance can be given that VDOT, the TIFIA Bondholder, the Banks, the Trustee or such other parties will be willing or able to take into account the interests of the Holders of the Bonds, including the Series 2008 Non-AMT Bonds, if an event of default, a Compensation Event, a termination or another adverse event occurs. VDOT intends to maintain an active role in overseeing the operation of the Project, and the Comprehensive Agreement and the other Project Agreements contain a number of reserved VDOT rights and require or permit VDOT s consent or direction in a number of circumstances. As the Commonwealth s agency responsible for the construction, maintenance and efficiency of the Commonwealth s roads, bridges and tunnels, VDOT s first priorities are safety and efficient transportation and may not always coincide with the interests and priorities of the Borrower, the Banks or the Holders of the Series 2008 Non-AMT Bonds. Under certain circumstances, some of which require VDOT to pay compensation to the Borrower, VDOT has the right to require additional approvals and inspections even if delays may result. Termination Risks Under the Comprehensive Agreement The Borrower s principal asset is its exclusive legal right pursuant to the Comprehensive Agreement to finance, develop, design, construct the Project; to manage operate and maintain the 495 Express Lanes; and to establish, impose, charge, collect, use and enforce payment of tolls and related charges, in each case for a term in effect until December 18, 2087, subject to earlier termination in accordance with the Comprehensive Agreement. The Comprehensive Agreement permits earlier termination by VDOT following a Borrower default, by VDOT or the Borrower if the Borrower elects not to restore the 495 Express Lanes after a Significant Force Majeure Event or by VDOT for any other reason. In some, but not all, cases, the Comprehensive Agreement would require VDOT to pay compensation to the Borrower, but no assurances can be given that the amount of such compensation will be sufficient to enable the Borrower to provide for the payment of all of its obligations, including the Series 2008 Non-AMT Bonds. See Appropriation Risk above and SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT Termination and Return Obligations in Appendix C. 43

48 Termination payments would be subject to withholding, reduction or offset for any amounts owed by the Borrower, by the amount of any insurance proceeds available for such purpose, and in the case of any termination because of a Borrower Default, termination compensation would be subject to reduction and offset for damages due to VDOT arising from a default by the Borrower pursuant to the Comprehensive Agreement. No assurance can be given that following a termination there will be sufficient funds to pay principal and interest on the Series 2008 Non-AMT Bonds or any other amounts payable under the Indenture, the Loan Agreements or the Reimbursement Agreement. See SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT in Appendix C. In addition, any amount of termination compensation payable by VDOT to the Borrower would be subject to appropriation by the General Assembly and to allocation by the CTB and may not be sufficient to enable the Borrower to reimburse the Banks or to provide for the payment of all of the thenoutstanding principal amount of the Series 2008 Non-AMT Bonds and interest and premiums, if any. Technology and Operational Risks The operation and maintenance of the 495 Express Lanes involves various operational risks. The quality of the operation and maintenance of the 495 Express Lanes, as well as events outside the Borrower s and the Operator s control, could result in reductions in toll revenues generated or could increase the expense of operating and maintaining the 495 Express Lanes and adversely impact the Borrower s ability to make payments pursuant to the Senior Loan Agreement and the Reimbursement Agreement. In addition, any such events could cause the Borrower to violate its obligations under the Comprehensive Agreement and, to the extent not otherwise cured or resolved, could result in VDOT s having the right to terminate the Comprehensive Agreement for a Default. In the event of a termination of the Comprehensive Agreement for any reason, the amount of termination compensation payable by VDOT to the Borrower may not be sufficient to pay all of the then-outstanding repayment obligations under the Indenture, the Reimbursement Agreement and the Loan Agreements. The Project includes a fully electronic toll collection and traffic management system, with no cash payments and no toll booths. The Borrower s ability to charge and collect tolls and its ability to ensure that traffic speeds on the 495 Express Lanes meet the minimum requirements under the Comprehensive Agreement and under federal law also require that the ETTM System continue to function as designed. In addition, the ETTM System for the 495 Express Lanes is interoperable with the E-ZPass system (and will be interoperable with the I- 95 Express Lanes Project when that project is completed), and both will depend upon the use of E-ZPass transponders and the E-ZPass system. Although the E-ZPass system has been operating successfully in Virginia for many years, it is possible for glitches to occur as new electronic toll projects connect to the E-ZPass system. No assurances can be given that the Borrower will not suffer delays or difficulties because of technical ETTM system or E-ZPass transponder issues or because of shortages or malfunction of the new E-ZPass transponders or the E-ZPass system itself. Successful operations also depend upon VDOT s continuing ability to maintain, or to provide for the maintenance of, the E-ZPass system in Virginia. Pursuant to recent legislation that becomes effective in July 2014, VDOT will no longer be authorized to charge monthly fees from customers. As a result, it is possible that toll road operators may incur additional costs in the future to help offset VDOT s operating and maintenance costs for the E-ZPass system. Although VDOT operates the E-ZPass system in Virginia, VDOT is not responsible under the Electronic Toll Collection Agreement for every event that could cause a loss of Toll Revenue to the Borrower. For example, VDOT in no event has any liability to the Borrower for any losses, including lost toll revenue, suffered due to equipment failure or error in the Borrower s electronic toll collection system, unless such loss of revenue was caused by VDOT s failure to properly maintain, repair and operate its system of electronic toll collection and the related E-ZPass customer service center. Similarly, unless VDOT is in breach of its duty of care and diligence under the Electronic Toll Collection Agreement, VDOT will not be financially responsible for the occurrence of any adverse impact to the Borrower during modifications, upgrades and associated testing of VDOT s electronic 44

49 toll collection system. In addition, any E-ZPass toll transactions not sent by the Borrower or the Operator to VDOT within sixty (60) business days could be subject to deletion prior to processing, and the related revenue may not be recorded. With respect to the potential loss of revenue because of such an event, no credit support or security is being provided by VDOT and the Borrower would not be entitled to claim a Compensation Event under the Comprehensive Agreement. VDOT has agreed that if the Electronic Toll Collection Agreement terminates for any reason or is materially changed or renegotiated, VDOT will (i) make a good faith attempt to give the Borrower the opportunity to obtain ETC Services from the servicer VDOT has engaged at that time or a substitute servicer engaged by VDOT, as appropriate, under substantially the same terms, and (ii) in the case where VDOT is performing the ETC Services, make ETC Services available to the Borrower under substantially the same terms. No assurance can be given that VDOT will be successful in obtaining substantially the same services from its servicer or that VDOT will otherwise make ETC Services available to the Borrower in a way that does not disrupt the continuity of the tolling operations of the 495 Express Lanes or increase the Borrower s costs significantly. If the Borrower is unable to access ETC Services in a timely fashion after the termination of or material change or renegotiation to the Electronic Toll Collection Agreement, the Borrower may experience a loss of toll revenues, as well as increased operating costs if a replacement contract for the ETC Services has more onerous terms. Successful operation of the 495 Express Lanes and the Borrower s ability to generate Revenues sufficient to pay Operating Costs and debt service may be influenced by the successful completion and operation of the I-95 Express Lanes Project, because the I-95 Express Lanes Project is expected to pay an allocable portion of the costs of the ETTM System and the Express Operations Center under the terms of a Shared Facilities Agreement. No assurance can be given, however, that the I-95 Express Lanes Project will be completed on time, that the start-up period will be proceed smoothly, that disputes will not arise or that the project will generate revenues in amounts required to pay an allocable share of operating costs when required. The costs of operating and maintaining the 495 Express Lanes, including the payment of applicable taxes as well as certain payments to VDOT will be paid before payments with respect to the Reimbursement Agreement and the Series 2008 Non-AMT Bonds and the funding and replenishment from time to time of the Debt Service Reserve Fund, as required under the Comprehensive Agreement. If the actual operations and maintenance costs and other payments significantly exceed the costs and payments the Borrower has assumed in its budget and financial projections, the Borrower may not have sufficient cash flow or reserves to make all of its payments. Traffic on the 495 Express Lanes, and thus Revenues, have been significantly lower than initially forecast. A number of operational improvements have been made since the 495 Express Lanes opened in November 2012, making the facility more attractive to users and leading to increased traffic growth. The Borrower, however, expects that in the near- to mid-term, traffic and thus Revenues will remain below original expectations. No assurances can be given that traffic and thus Revenues will continue to grow even at the current rate. Enforcement and Collection Risk The risk of enforcement and collection of tolls and related charges (including user fees and civil penalties) remains with the Borrower under the Comprehensive Agreement. Although the Commonwealth has enforcement legislation for vehicles registered in-state, the Commonwealth has limited means of collecting judgments against out-of-state registered violators in particular. The Operator is evaluating several mitigation measures to help address this risk. Currently, the Borrower s debt collection service providers have arrangements in place with state motor vehicle departments ( DMVs ) and pursue out-of-state violators, including through service of process and garnishment of wages. The Borrower expects that the Fairfax County courts (and other Virginia courts) will enter judgments against violators 45

50 in their absence if the violators have been personally served and will continue to permit collections on judgments via debt collection agents. Also, the Borrower expects that holds on vehicle registration and license renewals will be put in place for toll violators who have not paid following a judgment. Force Majeure and Insurance Limitations Operation of the 495 Express Lanes is at risk from events of force majeure, such as damaging storms, winds, blizzards and floods, fires and explosions, earthquakes, strikes and lockouts, sabotage, wars, blockades, riots and spills of hazardous substances, among other events. Operations also may be stopped or delayed by noncasualty events such as discovery of archaeological artifacts, changes in law, delays in obtaining or renewing permits, revocation or revision of permit requirements and litigation, among other things. Although the Operator provides and is required to continue to provide insurance, the required policies do not cover damage and delay from all events that potentially could interrupt construction or operations. Insurance policies may not be maintained or be obtainable in amounts that would be sufficient or be paid on time in all events to pay all of the costs required to be paid in connection with the 495 Express Lanes, including fees and operating and maintenance expenses and amounts required to be paid under the Reimbursement Agreement and the Loan Agreements. Policy limits (and business interruption coverage) are based upon maximum probable loss scenarios and not upon replacement value, but no assurance can be given that proceeds of such insurance will be sufficient if an extraordinary event with extraordinary losses occurs or, in the case of blanket policies, that coverage will be sufficient if a single event causes losses to the Borrower or the Operator and also causes losses to the Project or to other projects operated by affiliates in Virginia. Risks that are not insurable or that may not be insurable include a nuclear event, war, terrorism, unforeseeable environmental or geological conditions, discovery of archeological artifacts, criminal or intentional acts by the insured, bankruptcy, strikes, riot and civil commotion and insurer insolvency. In addition, changes in federal, state or local design, construction and environmental requirements and other changes in law are risks that generally are not insurable. The Borrower is permitted to obtain policies, including the liability policies, that are blanket policies to cover the Project and perhaps other facilities as well as the I-95 Express Lanes Project, and there can be no assurance that sufficient coverage will be available, especially if more than one facility is significantly damaged or more than one liability claim is made at the same time. In addition, there can be no assurance that any use by the Borrower or the Operator of insurance proceeds would not be challenged by other creditors, that the Borrower could repair any damage if insurance proceeds were not available or that the insurance proceeds could be used to pay debt service if damaged facilities cannot be repaired, replaced or restored. Competing Transportation Facilities The construction of new competing transportation facilities or improvements to existing transportation facilities or substantial shifts in population and employment centers away from the Virginia portion of the Capital Beltway or other factors could reduce the number of vehicles that use the Capital Beltway, including the 495 Express Lanes. The Borrower is not entitled to receive from VDOT or from any other source any monetary compensation for toll revenue losses should such events, however unlikely, occur. Change in Law The Project is subject to various laws and regulations, including, among others, laws governing environmental protection and laws governing tolling, which may change from time to time. The Project and the Borrower s business, financial condition and results of operations may be adversely affected by changes in such laws or regulations. Under the Comprehensive Agreement, however, only a Discriminatory Change in Law, such 46

51 as a change in law that expands the type of vehicles permitted to travel on the 495 Express Lanes without paying tolls or by paying a reduced toll, that limits the Borrower s right to charge, collect and enforce tolls and incidental charges, or that during the first 10 years transfers regulatory control to a different regulatory agency and results in a net revenue impact or a change in laws that results from the imposition of a state or local property tax changed against the Concessionaire s Interest qualify as Compensation Events that would entitle the Borrower to compensation. To the extent that the Borrower is required to expend additional funds to comply with any new or amended regulations or laws, particularly if the Borrower is not entitled to compensation under the Comprehensive Agreement, could negatively impact the Borrower s cash flow. Governmental Approvals Pursuant to the Comprehensive Agreement, the Borrower is responsible for obtaining, furnishing, paying the cost of, and maintaining in full force and effect, all governmental approvals (including environmental permits) required for the continued operation of the 495 Express Lanes (including any required future capital improvements as those requirements change from time to time). A failure to maintain any necessary governmental approvals, especially if the schedule, cost or revenue impact on the 495 Express Lanes as a result of such failure is not accommodated under the Comprehensive Agreement, could have an adverse effect on operations, including, but not limited to, the construction of future capital improvements, imposing additional costs on the Borrower, requiring the Borrower to pay liquidated damages to VDOT and/or providing VDOT with the right to terminate the Comprehensive Agreement. The occurrence of any such event could adversely affect the Borrower s ability to make payments pursuant to the Loan Agreements and the Reimbursement Agreement and to provide for payments of debt service on the Series 2008 Non-AMT Bonds. Third Party Actions Affecting the Project Maintenance of the general purpose lanes and of the other portions of the Capital Beltway that directly or indirectly feed traffic to the Capital Beltway is performed by local or state agencies (including in Virginia and Maryland). The quality of maintenance and the accessibility of such roadways are not within the Borrower s control. If such agencies do not or cannot maintain, or limit access to, such roadways, or if such maintenance requires lane closures, the 495 Express Lanes may experience a decrease in traffic volume, which could adversely affect toll revenues or increase operating costs on the 495 Express Lanes Uncertainties of Forecasts and Assumptions As part of the Borrower s agreement to provide for additional equity contributions and for the redemption of a $364,340,000 aggregate principal amount of Series 2008 Non-AMT Bonds and reduction of $364,334,323 notional amount of the Hedge Agreements, the Banks and the Issuer agreed that the Borrower s obligation to comply with the Coverage Tests would not be required until after June The Borrower expects to comply with the Coverage Tests by that time. The Borrower s expectations, however, are based upon a number of estimates and assumptions, any one or more which may not occur as predicted. In developing its estimates and expectations, the Borrower is making assumptions about the following variables and risks, among others: Population and employment levels in the region, including impacts of federal defense and other budget reductions federal and local government shutdowns; Extension or amendments to FHWA authorizations and funding; Income levels and the potential for growth in income and the value of time; 47

52 Increased acceptance of tolls and familiarity with the 495 Express Lanes (and with electronic tolling and managed lanes generally); Levels of HOV usage and other mass transit patronage, including rail and bus systems; The level of performance, the amount of leakage and the number of malfunctions of the ETTM System and of the E-ZPass system and or increases in the Borrower s share of costs of the E-ZPass system; Experience and training of Operator employees and interoperability with the 95 Express Lanes; The likelihood and costs of blizzards and unusually severe or frequent snow storms, as occurred during the first three months of 2014 and other unusual weather events, including hurricanes and earthquakes, accidents, fires, sabotage and other casualties that can damage the Borrower s facilities or result in a reluctance to use them; Disputes with the Operator, VDOT, local governments in northern Virginia or the public; and Unexpected equipment shutdowns or malfunctions due to previously undiscovered design or manufacturing defect, shortage of replacement parts and wear and tear resulting in unexpected increases in operating costs or in delays or inability to collect tolls. The assumptions and estimates the Borrower uses in preparing its budgets and in developing its expectations include assumptions and estimates about the variables and risks described above, and others, relate to general business and economic conditions, to government policy and political decisions (or lack thereof) and to other decisions and numerous contingencies and matters that are not within the Borrower s control and the occurrence or outcome of which cannot be predicted by anyone with any expectation of accuracy. If population and regional wealth grow more slowly than expected or if employment levels move materially adversely or if the Borrower s assumptions about familiarity with and usage of the 495 Express Lanes and other assumptions do not materialize, the result could be lower Toll Revenues and/or higher Operating Costs and therefore insufficient Revenues after payment of Operating Costs to make payments under the Loan Agreements and the Reimbursement Agreement and thus to provide for payments on the Series 2008 Non-AMT Bonds. Limitations on Enforceability Upon a default under the Comprehensive Agreement, the Reimbursement Agreement, the Senior Loan Agreement, the Indenture, the TIFIA Loan Agreement, the Series 2008 Non-AMT Bonds or the Letters of Credit or any of the other agreements, the remedies available to the Borrower, the Issuer, VDOT, the Trustee or the Banks may depend upon judicial actions that may be subject to substantial discretion and delay. Some of these remedies may in fact turn out not to be enforceable at all. The rights of the holders of the Series 2008 Non-AMT Bonds and the enforceability of VDOT s, the Operator s, the Issuer s and the Borrower s obligations may be subject to the exercise of judicial discretion under a variety of circumstances in various jurisdictions. The enforceability of governmental obligations also is subject to constitutional, statutory and public policy limitations and to other considerations that do not limit enforcement of obligations of private parties. VDOT makes a number of agreements in the Comprehensive Agreement that are for the benefit of lenders such as the Banks and the Holders of the Series 2008 Non-AMT Bonds, but no assurances can be given that a court exercising its judicial discretion will always enforce such provisions. The opinions delivered by counsel in December 2010, when the Series 2008 Non-AMT Bonds were issued, were qualified as to bankruptcy, insolvency and such other legal events. 48

53 Bankruptcy-Related Risks The Borrower. Should the Borrower become the subject of a bankruptcy case, there could be adverse effects on the holders of the Series 2008 Non-AMT Bonds that could result in delays or reductions in payments on, or other losses with respect to, the Series 2008 Non-AMT Bonds. Although each Letter of Credit is an independent contract between the issuing Bank and the Trustee, it is possible that the Borrower could persuade the bankruptcy court to enjoin draws on the Letters of Credit, to enjoin the Trustee from making payments on the Series 2008 Non-AMT Bonds using proceeds from draws on the applicable Letters of Credit, or to require the holders of the Series 2008 Non-AMT Bonds to return payments made to them using proceeds from draws on the Letters of Credit. The automatic stay provisions of the United States bankruptcy code could prevent (unless approval of the bankruptcy court were obtained) any action to collect any amount owing by the Borrower under any Financing Document or any Project Agreement or any action to enforce any obligation of the Borrower under any Financing Document or any Project Agreement. In particular, the Trustee may be prevented from foreclosing on any collateral (including the Trust Estate) that belongs to the Borrower. The Trustee may also be prevented from exercising any of the rights of the Borrower under the Project Agreements or Financing Documents that have been assigned to the Trustee. These restrictions may also prevent the Trustee from making payments to the holders of the Series 2008 Non-AMT Bonds from funds in the Trustee s possession during the pendency of the bankruptcy proceedings. Notwithstanding the provisions of agreements that require VDOT to pay all the Toll Revenues to the Trustee, the Borrower may be able to require that all Toll Revenues be paid to it. With the authorization of the bankruptcy court, the Borrower may be able to repudiate one or more of the Project Agreements or Financing Documents to which it is a party. A repudiation of any such agreement would excuse the Borrower from performing any of its obligations (including payment obligations) under such agreement and any rights of the Borrower under such agreement that have been assigned to the Trustee may be eliminated. Such a repudiation could also excuse the other parties to such agreement from performing any of their obligations. In particular, if the Borrower were authorized to repudiate any of its agreements with VDOT, VDOT may no longer be required to make any further payments of Toll Revenues. The Borrower may be able to borrow additional money that is secured by a lien on any of its property (including the Trust Estate), which lien could have priority over the lien of the Indenture and other Financing Documents, so long as the bankruptcy court determines that the rights of the Trustee and the Banks and holders of the Series 2008 Non-AMT Bonds will be adequately protected. The Borrower may be able to cause some of the Trust Estate to be released to it, free and clear of the lien of the Indenture and the other Financing Documents, as long as the bankruptcy court determines that the rights of the Trustee, the Banks and the holders of the Series 2008 Non-AMT Bonds will be adequately protected. The Borrower may be able, without the consent and over the objection of the Trustee, the Banks and the holders of the Series 2008 Non-AMT Bonds, to alter the priority, interest rate, principal amount, payment terms, maturity dates, payment sources, covenants, and other terms or provisions of the Financing Documents and the Series 2008 Non-AMT Bonds, so long as the bankruptcy court determines that the alterations are fair and equitable. With the authorization of the bankruptcy court, the Borrower may be able to assign its rights and obligations under any of the Financing Documents or the Project Agreements to another entity, despite any contractual provisions to the contrary. The Trustee may be required to return to the Borrower any property of the Borrower that became subject to the lien of the Indenture or the other Financing Documents within the 90 days immediately preceding the filing 49

54 of the bankruptcy petition. Payments previously made to the Banks or to the holders of the Series 2008 Non- AMT Bonds by the Borrower during the 90 days immediately preceding the filing of the bankruptcy petition may be avoided as preferential payments, so that the holders and the Banks would be required to return such payments to the Borrower. The lien of the Indenture and the other Financing Agreements may not attach to any property, including any Toll Revenues or other Revenues, that the Borrower acquires after the filing of a bankruptcy petition. The Borrower could threaten to take any of the actions described above as part of negotiations to alter its obligations under the Financing Documents or the Project Agreements. There may be delays in payments on the Series 2008 Non-AMT Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the Borrower that could result in delays or reductions in payments on the Series 2008 Non-AMT Bonds, or result in losses to the holders of the Series 2008 Non-AMT Bonds. Regardless of any specific adverse determinations in a Borrower bankruptcy, the fact of a Borrower bankruptcy could have an adverse effect on the liquidity and value of the Bonds. The Operator. Should the Operator become the subject of a bankruptcy case, there could be adverse effects on the holders of the Series 2008 Non-AMT Bonds that could result in delays or reductions in payments on, or other losses with respect to, the Series 2008 Non-AMT Bonds. The automatic stay provisions of the United States bankruptcy code could prevent (unless approval of the bankruptcy court were obtained) any action to collect any amount owing by the Operator under any Financing Document or any Project Agreement or any action to enforce any obligation of the Operator under any Financing Document or any Project Agreement. The Trustee may be prevented from exercising any of the rights of the Operator under the Project Agreements or the Financing Documents that have been assigned to the Trustee. With the authorization of the bankruptcy court, the Operator may be able to repudiate one or more of the Project Agreements or Financing Documents to which it is a party. A repudiation of any such agreement would excuse the Operator from performing any of its obligations (including payment obligations) under such agreement and any rights of the Operator under such agreement that have been assigned to the Trustee may be eliminated. Such a repudiation could also excuse the other parties to such agreement from performing any of their obligations. In particular, if the Operator were authorized to repudiate the Operating Agreement or the Shared Facilities Agreement, it would no longer be required to operate the Toll Road and VDOT may no longer be required to make any further payments of Toll Revenues. With the authorization of the bankruptcy court, the Operator may be able to assign its rights and obligations under any of the Financing Documents or the Project Agreements to another entity, despite any contractual provisions to the contrary. The Operator could threaten to take any of the actions described above as part of negotiations to alter its obligations under the Financing Documents or the Project Agreements. There may be delays in payments on the Series 2008 Non-AMT Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the Operator that could result in delays or reductions in payments on the Series 2008 Non-AMT Bonds, or result in losses to the holders of the Series 2008 Non-AMT Bonds. Regardless of any specific adverse determinations in an Operator bankruptcy, the fact of an Operator bankruptcy could have an adverse effect on the liquidity and value of the Series 2008 Non-AMT Bonds. Transurban (USA) Inc. Transurban (USA) Inc., an affiliate of the Operator, provides resources (including personnel) to the Operator. Although Transurban (USA) Inc. is not guaranteeing any of the Operator s 50

55 performance or payment obligations, the Operator has no assets or employees of its own and could be adversely affected if Transurban (USA) Inc. encountered financial or other difficulties. Transurban (USA) Inc. is not a single-purpose entity and provides resources to a number of affiliates in the United States. Should Transurban (USA) Inc. become the subject of a bankruptcy case, there could be adverse effects on the holders of the Series 2008 Non-AMT Bonds that could result in delays or reductions in payments on, or other losses with respect to, the Series 2008 Non-AMT Bonds. The automatic stay provisions of the United States bankruptcy code could prevent (unless approval of the bankruptcy court were obtained) any action to collect any amount owing by (or requested of) Transurban (USA) Inc. or any action to enforce any agreement between Transurban (USA) Inc. and the Operator, the Borrower or any other party in connection with the Project. The Trustee may be prevented from exercising any of the Operator s rights that have been assigned to the Trustee. With the authorization of the bankruptcy court, Transurban (USA) Inc. may be able to repudiate any agreement it might have with the Operator, the Borrower or any other a party in connection with the Project. A repudiation of any such agreement would excuse Transurban (USA) Inc. from performing any of its obligations (including payment obligations) under such agreement and any such rights that have been assigned to the Trustee may be eliminated. Such a repudiation also could excuse the other parties to such agreement from performing any of their obligations. In particular, if Transurban (USA) Inc. were authorized to repudiate agreements under which it provides services to the Operator, it is possible that the Borrower or the Operator would no longer be able to perform its obligations under the Project Agreements and the Financing Documents. Under such circumstances, VDOT may no longer be required to make any further payments of Toll Revenues. Transurban (USA) Inc. could threaten to take any of the actions described above as part of negotiations to alter its agreements with the Operator or to alter the Operator s obligations under the Project Agreements. There may be delays in payments on the Series 2008 Non-AMT Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of Transurban (USA) Inc. that could result in delays or reductions in payments on the Series 2008 Non-AMT Bonds, or result in losses to the holders of the Series 2008 Non-AMT Bonds. Regardless of any specific adverse determinations in such a bankruptcy, the fact of such a bankruptcy could have an adverse effect on the liquidity and value of the Series 2008 Non-AMT Bonds. The Members. Should one or more of the Members become the subject of a bankruptcy case, there could be adverse effects on the holders of the Series 2008 Non-AMT Bonds that could result in delays or reductions in payments on, or other losses with respect to, the Series 2008 Non-AMT Bonds. The automatic stay provisions of the United States bankruptcy code could prevent (unless approval of the bankruptcy court were obtained) any action to collect any amount owing by the bankrupt Member under any Financing Document or any Project Agreement or any action to enforce any obligation of the Member under any Financing Document or any Project Agreement. In particular, the Trustee may be prevented from foreclosing on any collateral (including the membership interests in the Borrower) that belongs to the Member. The Trustee may also be prevented from exercising any of the rights of the Member under the Project Agreements or the Financing Documents that have been assigned to the Trustee. These restrictions may also prevent the Trustee from making payments to the holders of the Series 2008 Non-AMT Bonds from funds in the Trustee s possession during the pendency of the bankruptcy proceedings. The bankrupt Member may be able to cause some of the collateral that it has pledged (including the membership interests in the Borrower) to be released to it, free and clear of the lien of the Indenture and the other Financing Documents, as long as the bankruptcy court determines that the rights of the Trustee and the holders of the Series 2008 Non-AMT Bonds will be adequately protected. 51

56 The Member may be able, without the consent and over the objection of the Trustee and the holders of the Series 2008 Non-AMT Bonds, to alter the priority, interest rate, principal amount, payment terms, maturity dates, payment sources, covenants, and other terms or provisions of the Financing Documents to which it is a party, so long as the bankruptcy court determines that the alterations are fair and equitable. A Member could threaten to take any of the actions described above as part of negotiations to alter its obligations under the Financing Documents or the Project Agreements. There may be delays in payments on the Series 2008 Non-AMT Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of a Member that could result in delays or reductions in payments on the Series 2008 Non-AMT Bonds, or result in losses to the holders of the Series 2008 Non-AMT Bonds. Regardless of any specific adverse determinations in a Member bankruptcy, the fact of a Member bankruptcy could have an adverse effect on the liquidity and value of the Series 2008 Non-AMT Bonds. The Issuer. Should the Issuer become the subject of a bankruptcy case, there could be adverse effects on the holders of the Series 2008 Non-AMT Bonds that could result in delays or reductions in payments on, or other losses with respect to, the Series 2008 Non-AMT Bonds. Although each Letter of Credit is an independent contract between the issuing bank and the Trustee, it is possible that the Issuer could persuade the bankruptcy court to enjoin draws on the Letters of Credit, to enjoin the Trustee from making payments on the Series 2008 Non-AMT Bonds using proceeds from draws on the Letters of Credit, or to require the holders of the Series 2008 Nn-AMT Bonds to return payments made to them using proceeds from draws on the Letters of Credit. The automatic stay provisions of the United States bankruptcy code could prevent (unless approval of the bankruptcy court were obtained) any action to collect any amount owing by the Issuer under any Financing Document or any Project Agreement or any action to enforce any obligation of the Issuer under any Financing Document or any Project Agreement. In particular, the Trustee may be prevented from foreclosing on any collateral (including the Trust Estate) that belongs to the Issuer. The Trustee also may be prevented from exercising any of the rights of the Issuer under the Project Agreements or the Financing Documents that have been assigned to the Trustee. These restrictions may also prevent the Trustee from making payments to the holders of the Series 2008 Non-AMT Bonds from funds in the Trustee s possession during the pendency of the bankruptcy proceedings. Notwithstanding the provisions of the Electronic Toll Collection Agreement that require VDOT to pay all the Toll Revenues to the Trustee, the Issuer may be able to require that all Toll Revenues be paid to it. The Issuer may be able to borrow additional money that is secured by a lien on any of its property (including the Trust Estate), which lien could have priority over the lien of the Indenture and the other Financing Documents, as long as the bankruptcy court determines that the rights of the Trustee and the holders of the Series 2008 Non-AMT Bonds will be adequately protected. The Issuer may be able to cause some of the Trust Estate to be released to it, free and clear of the lien of the Indenture and the other Financing Documents, so long as the bankruptcy court determines that the rights of the Trustee and the holders of the Bonds will be adequately protected. The Issuer may be able, without the consent and over the objection of the Trustee and the holders of the Series 2008 Non-AMT Bonds, to alter the priority, interest rate, principal amount, payment terms, maturity dates, payment sources, covenants, and other terms or provisions of the Financing Documents and the Series 2008 Non- AMT Bonds, so long as the bankruptcy court determines that the alterations are fair and equitable. The Trustee may be required to return to the Issuer any property of the Issuer that became subject to the lien of the Indenture or the other Financing Documents within the 90 days immediately preceding the filing of the 52

57 bankruptcy petition. Payments previously made to the holders of the Series 2008 Non-AMT Bonds by the Issuer during the 90 days immediately preceding the filing of the bankruptcy petition may be avoided as preferential payments, so that the holders would be required to return such payments to the Issuer. The lien of the Indenture and the other Financing Documents may not attach to any property, including any Toll Revenues, that the Issuer acquires after the filing of a bankruptcy petition. The Issuer could threaten to take any of the actions described above as part of negotiations to alter its obligations under the Financing Documents or the Project Agreements. There may be delays in payments on the Series 2008 Non-AMT Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the Issuer that could result in delays or reductions in payments on the Series 2008 Non-AMT Bonds, or result in losses to the holders of the Series 2008 Non-AMT Bonds. Regardless of any specific adverse determinations in an Issuer bankruptcy, the fact of an Issuer bankruptcy could have an adverse effect on the liquidity and value of the Series 2008 Non-AMT Bonds. Intercreditor Arrangements. The TIFIA Loan Agreement and the Intercreditor Agreement contain a springing lien implementing a non-subordination provision contained in 23 U.S.C. 603(b)(6) that provides that in the event of a bankruptcy, insolvency or liquidation of the Borrower, the TIFIA Bonds will not be subordinated, thus requiring, in these certain circumstances, that the Banks and the Holders of the Series 2008 Non-AMT Bonds share the Trust Estate with the TIFIA Lender on a pari passu basis. Subject to the terms and conditions of the Intercreditor Agreement, and consistent with 23 U.S.C. 603(b)(6) in the event of a Bankruptcy Related Event of the Borrower, the right to payment on the TIFIA Bonds, to the extent outstanding, and to the extent then held by the TIFIA Lender, will, in the context of a foreclosure on the Collateral, automatically change from being subordinate to the right to payment on the Series 2008 Non-AMT Bonds and the Hedge Agreements and the right to reimbursement under the Reimbursement Agreement to rank equally with the same. In addition, in such a circumstance, the lien securing the TIFIA Bonds and the TIFIA Loan Agreement will rank pari passu with the lien securing the Series 2008 Non-AMT Bonds, the Senior Loan Agreement and the Reimbursement Agreement. To the extent that the collateral that comprises the Trust Estate is subsequently foreclosed upon in a bankruptcy or any other foreclosure proceeding, the Banks, the Holders of the Series 2008 Non-AMT Bonds and the parties to the Hedge Agreements will be required to share the proceeds of the such collateral with the TIFIA Lender, proportionally reducing any claim that the Banks, the Holders and the Hedge Providers may have to such proceeds or termination compensation amount. Consolidation Risk If a parent entity of the Operator or the Borrower, as the case may be, is in bankruptcy and a party in interest (including such parent entity itself) were to take the position that the assets and liabilities of the Operator or the Borrower should be substantively consolidated with those of such parent entity, delays in payments on the Bonds could result. If a court were to adopt such position, then the consequences could be similar to those described above with respect to the bankruptcy of the Operator and the bankruptcy of the Borrower. See RELATED PARTY TRANSACTIONS. Rating Risks Public ratings on the Series 2008 A Bonds were withdrawn in Currently, one rating agency maintains a long-term rating on the Series 2008 B Bonds, and two rating agencies maintain ratings on the Series 2008 C Bonds and Series 2008 D Bonds. Such ratings are based solely upon the ratings of the Series B Bank, the Series C Bank and the Series D Bank and not upon ratings of any other party. A rating is not a recommendation to purchase, hold or sell Series 2008 Non-AMT Bonds and does not address the market price or the suitability of 53

58 the Series 2008 Non-AMT Bonds for a particular investor. A rating may not remain for any given period of time and may be lowered or withdrawn depending upon such rating agency s assessment of the applicable Bank s liquidity and financial strength. Risks Relating to Market Liquidity for the Series 2008 Non-AMT Bonds Investors who purchase Series 2008 Non-AMT Bonds should not assume that they will be able to sell their Series 2008 Non-AMT Bonds other than in accordance with the tender process. The Remarketing Agent has agreed to use best efforts to remarket tendered Series 2008 Non-AMT Bonds and may purchase tendered Series 2008 Non-AMT Bonds for its own account. However, as described above under THE SERIES 2008 NON-AMT BONDS Remarketing Considerations, the Remarketing Agent is not obligated to purchase Series 2008 Non- AMT Bonds and should the applicable Bank not honor a draw under the Letter of Credit to purchase such tendered Series 2008 Non-AMT Bonds, the owners of such Series 2008 Non-AMT Bonds may not be able to sell their Series 2008 Non-AMT Bonds at all. In addition, the Remarketing Agent is not obligated to remarket Series 2008 Non-AMT Bonds tendered for purchase after the occurrence of an event of default or upon the occurrence of certain other events, and in some cases the Remarketing Agent may cease remarketing immediately without prior notice. Neither the Borrower nor the Issuer is required to purchase Series 2008 Non-AMT Bonds tendered but not remarketed, even in the case of a Bank Failure. See THE SERIES 2008 NON-AMT BONDS Remarketing Considerations. Risks Relating to Tax Matters No assurance can be given that interest on the Series 2008 Non-AMT Bonds is or will continue to be exempt from tax for federal income tax purposes or that changes in tax laws or the occurrence of any other event that results in taxability as a whole or in part will not adversely affect the marketability and liquidity of the Series 2008 Non-AMT Bonds. Potential investors should consult their tax advisors concerning the tax implications of the purchase, ownership or tender of the Series 2008 Non-AMT Bonds. See TAX MATTERS. Many tax-related events also could adversely affect the value and liquidity or marketability of the Series 2008 Non-AMT Bonds, including but not limited to public knowledge of an audit, random or otherwise, by the Internal Revenue Service and changes or proposed changes in federal or state tax laws that may cause interest on the Series 2008 Non-AMT Bonds to be subject directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation or that otherwise prevent owners from realizing the full current benefit of the tax status of such interest. CONTINUING DISCLOSURE UNDER SEC RULE 15c2-12 In 2010, when the Series 2008 Non-AMT Bonds were issued, the Borrower and the Trustee entered into a written agreement (the Agreement ) to assist the underwriter of the Series 2008 Non-AMT Bonds in complying with Rule 15c2-12 promulgated by the Securities and Exchange Commission. Under the Agreement, the Borrower agreed for the benefit of the holders of the Series 2008 Non-AMT Bonds to provide to the Municipal Securities Rulemaking Board (the MSRB ) through its Electronic Municipal Market Access System ( EMMA ), on an annual basis on or before 120 days after the end of each Fiscal Year, commencing with the Fiscal Year ending June 30, 2011, certain financial information and operating data concerning the Borrower and the Project and the sources of revenue for the Series 2008 Non-AMT Bonds, referred to herein as Annual Information and described in more detail below. The Borrower also agreed to provide no later than 120 days after the end of each of its Fiscal Years, commencing with the Fiscal Year ending June 30, 2011, the Borrower s annual financial statements for such year, prepared in accordance with GAAP and audited by an independent firm of certified public accountants in accordance with generally accepted auditing standards, to the MSRB by and through 54

59 EMMA; provided, however, that if audited financial statements are not then available, unaudited financial statements shall be so provided and such audited financial statements shall be provided to the MSRB by and through EMMA, if and when available. In addition, the Borrower has undertaken, for the benefit of the holders of the Series 2008 Non-AMT Bonds, to provide to the MSRB by and through EMMA, in a timely manner (not in excess of ten business days after the occurrence of such event), the notices of certain events described below. The Annual Information consists of annual financial data and traffic usage data, including (i) total traffic; (ii) average weekday traffic; (iii) annual traffic revenue; and (iv) net revenue (i.e., revenue less operating expenses). The notices described above include notices of any of the following events with respect to the Series 2008 Non-AMT Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service ( IRS ), of proposed or final determinations of taxability. Notices of Proposed Issuer (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Series 2008 Non-AMT Bonds or events affecting the tax status of the Series 2008 Non-AMT Bonds; (7) modifications to the rights of security holders, if material; (8) bond calls, if material; (9) defeasances; (10) release, substitution or sale of property securing prepayment of the Series 2008 Non-AMT Bonds, if material; (11) rating changes; (12) tender offers; (13) bankruptcy, insolvency, receivership or similar proceeding of the Borrower or the Issuer; (14) the consummation of a merger, consolidation, or acquisition involving the Borrower or the Issuer or the sale of all or substantially all of the assets of the Borrower, other than the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (15) appointment of a successor or additional trustee, or the change of name of a trustee, if material. In addition, the Borrower has undertaken, for the benefit of the holders of the Series 2008 Non-AMT Bonds, to provide to the MSRB, in a timely manner, notice of any failure by the Borrower to provide the Annual Information and annual financial statements by the date required in the Borrower s undertakings described above. The sole and exclusive remedy for breach or default under the Agreement to provide continuing disclosure described above is an action to compel specific performance of the undertakings of the Borrower, and no person, including any holder of the Series 2008 Non-AMT Bonds, may recover monetary damages thereunder under any circumstance. Any holder of Series 2008 Non-AMT Bonds, including any beneficial owner, may enforce the Agreement for the equal and proportionate benefit of all holders similarly situated to the extent provided in the Agreement. A breach or default under the Agreement shall not constitute an Event of Default under the Indenture. In addition, if all or any part of Rule 15c2-12 ceases to be in effect for any reason, then the information required to be provided under the Agreement, insofar as the provision of Rule 15c2-12 no longer in effect required the provision of such information, shall no longer be required to be provided. The undertakings described above are intended to set forth a general description of the type of financial data and traffic usage data that are and will be provided; the descriptions are not intended to state more than general categories of financial data and traffic usage data; and where an undertaking calls for information that no longer can be generated or is no longer relevant because the operation to which it related have been materially changed or discontinued, a statement to that effect will be provided. As a result, the parties to the Agreement do not anticipate that it often will be necessary to amend the informational undertakings. The Agreement, however, may be amended or modified under certain circumstances set forth therein. The form of the Agreement is included in this Remarketing Circular as Appendix K. The Borrower has complied in all material respects with its undertakings in the Agreement to provide Annual Information and notices of material events, except that it did not file notices of two changes by Moody s Investors Service of its ratings on the Series 2008 B Bonds. 55

60 FINANCIAL STATEMENTS The Borrower s financial statements as of June 30, 2013 and 2012, included in this Remarketing Circular as Appendix J, were audited by PricewaterhouseCoopers, Australia, as stated in its report appearing herein. The Borrower s audited financial statements are a public document. PricewaterhouseCoopers has not performed since the date of its report any procedures on its financial statements addressed in its report. In addition, PricewaterhouseCoopers has not participated in any way in the preparation or review of this Remarketing Circular. LEGAL MATTERS In 2010, when the Series 2008 Bonds were issued, certain legal matters relating to the authorization and validity of the Series 2008 Non-AMT Bonds were subject to the approving opinion of Bond Counsel, dated as of December 14, 2010, which was furnished at the expense of the Borrower upon delivery of the Series 2008 Non- AMT Bonds (the 2010 Bond Opinion ). A copy of the 2010 Bond Opinion is included in this Remarketing Circular as Appendix H. The 2010 Bond Opinion was limited to matters relating to authorization and validity of the Series 2008 Non-AMT Bonds and to the tax-exempt status of interest thereon as of the date of the 2010 Bond Opinion as described under TAX MATTERS. Bond Counsel was not engaged to investigate the financial resources of the Borrower or its ability to provide for payment of the Series 2008 Non-AMT Bonds, and the 2010 Bond Opinion made no statement as to such matters. Bond Counsel was not retained and has not been retained to make any statements as to the accuracy or completeness of any disclosure documents, including this Remarketing Circular. In connection with the amendments to the Master Indenture and the Senior Loan Agreement, Hunton & Williams, LLP, Richmond, Virginia, Bond Counsel to the Issuer ( Bond Counsel ), delivered an opinion to the Trustee and the Banks to the effect that such amendments were permitted under the Master Indenture and in and of themselves did not impair the exclusion of interest on the Series 2008 Non-AMT Bonds. Certain legal matters relating to the amended documents to which the Borrower is a party were passed upon by Orrick, Herrington & Sutcliffe LLP as counsel to the Borrower. The 2010 Opinion of Bond Counsel TAX MATTERS The 2010 Bond Opinion stated that in the opinion of Bond Counsel, interest on the Series 2008 Non-AMT Bonds (a) will not be included in gross income for Federal income tax purposes, except when held by a substantial user of those portions of the Project that are financed by the proceeds of the Series 2008 Non-AMT Bonds or a related person within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended (the Code ), and (b) will be exempt from income taxation by the Commonwealth. The 2010 Bond Opinion further stated that interest on the Series 2008 Non-AMT Bonds is neither an item of tax preference nor taken into account in determining adjusted current earnings for purposes of the federal alternative minimum income tax imposed on individuals and corporations. No other opinion was expressed in the 2010 Bond Opinion or is expressed by Bond Counsel regarding the tax consequences of the ownership of or the receipt or accrual of interest on the Series 2008 Non-AMT Bonds. Furthermore, the 2010 Bond Opinion expressed no opinion as to the effect on the excludability of the interest on the Series 2008 Non-AMT Bonds from gross income of any event for which the Indenture or the Senior Loan Agreement requires the obtaining of a favorable opinion of Bond Counsel. The 2010 Bond Opinion was given in reliance upon certifications by representatives of the Issuer and the Borrower as to certain facts relevant to both the opinion and requirements of the Code and was subject to the 56

61 condition that there is compliance subsequent to the issuance of the Series 2008 Non-AMT Bonds with all requirements of the Code that must be satisfied in order for interest thereon to remain excludable from gross income for federal income tax purposes. The Issuer and the Borrower covenanted to comply with provisions of the Code regarding, among other matters, the use, expenditure and investment of the proceeds of the Series 2008 Non-AMT Bonds and the timely payment to the United States of any arbitrage rebate amounts with respect to the Series 2008 Non-AMT Bonds. Failure by the Issuer or the Borrower to comply with such covenants could cause interest on the Series 2008 Non-AMT Bonds to be included in gross income for federal income tax purposes retroactively to their date of issue. The IRS has a program to audit state and local government obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Series 2008 Non- AMT Bonds, under current IRS procedures, the IRS will treat the Issuer as the taxpayer and the owners of the Series 2008 Non-AMT Bonds will have only limited rights, if any, to participate. The 2010 Bond Opinion represented Bond Counsel s legal judgment based in part upon the representations and covenants referenced therein and its review of then-existing law, but was not and is not a guarantee of result or binding on the IRS or the courts. Bond Counsel assumed, and assumes, no duty to update or supplement the 2010 Bond Opinion to reflect any facts or circumstances that may thereafter come to Bond Counsel s attention or to reflect any changes in law or the interpretation thereof that may thereafter occur or become effective. Other Tax Matters In addition to the matters addressed above, prospective purchasers of the Series 2008 Non-AMT Bonds being remarketed also should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to certain taxpayers, including without limitation financial institutions, property and casualty insurance companies, S corporations, foreign corporations subject to the branch profits tax, recipients of social security or railroad retirement benefits and taxpayers who may be deemed to have incurred or continued Indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Series 2008 Non-AMT Bonds being remarketed should consult their tax advisors as to the applicability and impact of such consequences. Prospective purchasers of the Series 2008 Non-AMT Bonds being remarketed should consult their own tax advisors as to the status of interest on the Series 2008 Non-AMT Bonds being remarketed under the tax laws of any state other than the Commonwealth. There are many events which could affect the value and liquidity or marketability of the Series 2008 Non- AMT Bonds being remarketed, including but not limited to public knowledge of an audit of the Series 2008 Non- AMT Bonds by the Service, a general change in interest rates for comparable securities, a change in federal or state income tax rates, legislative or regulatory proposals affecting state and local government securities and changes in judicial interpretation of existing law. In addition, certain tax considerations relevant to owners of Series 2008 Non-AMT Bonds who purchase Series 2008 Non-AMT Bonds being remarketed or otherwise after their issuance may be different from those relevant to purchasers upon issuance. Interest on the Series 2008 Non-AMT Bonds could be, or become, includable in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2008 Non-AMT Bonds as a result of a failure of the Issuer or the Borrower to comply with certain provisions of the Internal Revenue Code, Treasury regulations or guidance issued by the Internal Revenue Service or by the courts. The 2010 Bond Opinion did not and this Remarketing Circular does not purport to address the likelihood or effect of any such potential events or such other tax considerations, and purchasers of the Series 2008 Non-AMT Bonds should seek advice concerning such matters as they deem prudent in connection with their purchase of Series 2008 Non-AMT Bonds. 57

62 RELATED PARTY TRANSACTIONS Certain of the parties with which the Borrower has contracted to provide staffing and administrative, technical and other services to the Project are affiliates of or otherwise related to Transurban Express Lanes or Transurban DRIVe, the two Members. The Borrower has entered into an Operating Agreement with the Operator, an affiliate of Transurban DRIVe and Transurban Express, pursuant to which the Operator performs management, operations, maintenance, administration and related obligations under the Comprehensive Agreement and certain other specified services pursuant to the Operating Agreement. The Borrower pays the Operator compensation for services rendered under the Operating Agreement, as more fully described in SUMMARY OF CERTAIN PROVISIONS OF THE OPERATING AGREEMENT AND THE SHARED FACILITIES AGREEMENT in Appendix D. The Borrower also has entered into a Shared Facilities Agreement with the I-95 Concessionaire, an affiliate of the Borrower and the Operator, pursuant to which the Borrower and the I-95 Concessionaire will share access and use of the common-use areas of the Express Operations Center and of the toll and traffic management equipment. The Operator agreed to operate and maintain the shared facilities and to perform certain shared services, including back office support and IT operations and back office tolling management system maintenance, modifications and enhancements, among other services. The Borrower is required to pay, and beginning on the service commencement date of the I-95 Express Lanes Project, each of the Borrower and the I- 95 Concessionaire will be required to pay, monthly, its share of the aggregate costs (excluding any applicable margin) payable in respect of the shared facilities and shared services. See PROJECT OPERATIONS. In connection with Transurban s development of the separate I-95 Express Lanes Project, certain thirdparty services agreements may be entered into by Transurban (USA) Operations Inc. on behalf of both the Borrower and the I-95 Concessionaire. Cost allocations associated with these agreements will be either on a prenegotiated allocation basis or in good faith reflecting generally accepted accounting principles. The Operator and Transurban (USA) Inc. are parties to an Intercompany Services Agreement that provides for the terms pursuant to which Transurban (USA) will provide any such services to the Operator. On June 3, 2014, Transurban, through its wholly-owned subsidiary, Transurban Express Lanes, purchased 965,517,250 units of the Borrower for an aggregate purchase price of $281,425,642. The proceeds from the issuance of the new units to Transurban Express Lanes were used to fund a portion of the simultaneous recapitalization of the Borrower. Following this issuance of units, Transurban Express Lanes owns approximately 76.1 percent of the outstanding units of the Borrower, and Transurban DRIVe owns the remaining 23.9 percent of the outstanding units of the Borrower. 58

63

64 APPENDIX A DEFINITIONS 2010 Bond Opinion has the meaning given to such term in LEGAL MATTERS Note means the Note delivered by the Borrower pursuant to the Senior Loan Agreement in connection with the Series 2008 Non-AMT Bonds. Accelerated Repayment Schedule means the amortization schedule attached to the Sixth Supplemental Indenture. Account means the account or accounts created by the Indenture. Accreted Value means any amount defined as such in a Supplemental Indenture for the purposes of determining the Redemption Price of, certain rights of the Owner of, or certain other matters with respect to, a Capital Appreciation Bond. Accretion Date means any date defined as such in a Supplemental Indenture for the purposes of determining the Accreted Value or Maturity Value of a Capital Appreciation Bond. Additional Bonds means one or more Series of Bonds that are issued by the Issuer to pay the cost of completing the Project, to pay the cost of acquiring, constructing, equipping or completing Project Enhancements, to refund all or part of a Series of Bonds, or for any combination of such purposes, in all cases, issued pursuant to a Supplemental Indenture, and subject to any restrictions placed on the incurrence by the Borrower or the Issuer of Additional Senior Indebtedness imposed by any Credit Facility Provider or Liquidity Provider. Additional Senior Indebtedness means any Indebtedness which would rank pari passu with the Series 2008 Senior Lien Bonds. Additional Senior Loan means any borrowings permitted (or in certain cases, not prohibited) under the Senior Loan Agreement, other than the initial loan thereunder, which are limited to the circumstances set forth in SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT TIFIA Loan Agreement Limitations on Additional Debt in Appendix F. Additional Traffic Lanes means traffic lanes within the Capital Beltway Corridor beyond the improvements included within the Project. Advances means all amounts payable pursuant to any Purchase Drawing on a Letter of Credit under the Reimbursement Agreement. Affiliate, when used to indicate a relationship with a specified Person, means a Person that, directly or indirectly, through one or more intermediaries has a 10% or more voting or economic interest in such specified Person or controls, is controlled by or is under common control with such specified Person, and a Person is deemed to be controlled by another Person, if controlled in any manner whatsoever that results in control in fact by that other Person (or that other Person and any Person or Persons with whom that other Person is acting jointly or in concert), whether directly or indirectly and whether through share ownership, a trust, a contract or otherwise. Affiliate Contract has the meaning given to such term in Appendix C. Aggregate Unreimbursed LC Drawings means, as at any date, the aggregate of all drawings of Interest Component or Principal Component made under the Letters of Credit which have not been reimbursed by the Borrower in accordance with the Reimbursement Agreement (whether due or not). Agreement has the meaning given to such term in CONTINUING DISCLOSURE UNDER SEC RULE 15c2-12. Allocable Costs means: (a) for services performed using Department or Concessionaire personnel, materials and equipment, the sum of: (i) an amount equal to the fully burdened hourly rate (including overhead and fringe A-1

65 benefits) of each employee providing such services multiplied by the actual number of hours such employee performs such services; plus (ii) the cost of all materials used, including sales taxes, freight and delivery charges and any allowable discounts; plus (iii) the use, operating, maintenance, fuel, storage and other costs of all deployed tools (excluding small tools) and equipment, calculated at hourly rates determined from the most current volume of the Rental Rate Blue Book published by Nielsen/DATAQUEST, Inc. of Palo Alto, California, or its successors, or at any lesser hourly rate the Department may approve from time to time in its sole discretion, without area adjustment, but with equipment life adjustment made in accordance with the rate adjustment tables, provided that if rates are not published for a specific type of tool or equipment, the Department shall establish a rate for it that is consistent with its cost and use in the industry; or (b) if the services are performed by a contractor under contract with the Department or the Concessionaire, the sum of: (i) the amount owing under such contract; provided that if the contract is an Affiliate Contract, the lesser of the contract amount or the amount that would be reasonably obtained in an arm s length transaction for comparable services with a person that is not an Affiliate; plus (ii) 10% of such amount to reimburse the Department or the Concessionaire for costs of administering the contract; plus (iii) all costs the Department or the Concessionaire reasonably incurs to enforce or pursue remedies for the contractor s failure to perform in accordance with the contract, except in the case of a contract that is an Affiliate Contract. Allocated Interest means each of the Company and I-95 Concessionaire s equal undivided 50% interest in the Shared Facilities and Shared Services. Alternate Credit Facility means a Credit Facility issued in accordance with the terms of the First Supplemental Indenture as a replacement or substitute for any Credit Facility then in effect. Alternate Liquidity Facility means a Liquidity Facility issued in accordance with the terms of the First Supplemental Indenture as a replacement or substitute for any Liquidity Facility then in effect. Alternate Rate means, on any Rate Determination Date, for any Interest Rate Mode, a rate per annum equal to 110% of (a) the SIFMA Municipal Swap Index of Municipal Market Data most recently available as of the date of determination, or (b) if such index is no longer available, or if the SIFMA Municipal Swap Index is no longer published, the S&P Weekly High Grade Index (formerly the J.J. Kenny Index), or if neither the SIFMA Municipal Swap Index nor the S&P Weekly High Grade Index is published, the index determined to equal the prevailing rate determined by the Remarketing Agent for tax-exempt state and local government bonds meeting criteria determined in good faith by the Remarketing Agent to be comparable under the circumstances to the criteria used by the Securities Industry and Financial Markets Association to determine the SIFMA Municipal Swap Index just prior to when the Securities and Financial Markets Association stopped publishing the SIFMA Municipal Swap Index. The Tender Agent shall make the determinations required by this determination, upon notification from the Borrower, if there is no Remarketing Agent, if the Remarketing Agent fails to make any such determination or if the Remarketing Agent has suspended its remarketing efforts in accordance with the Remarketing Agreement. Amended and Restated Reimbursement Agreement has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. Annual Information means annual financial data and traffic usage data, including (i) total traffic, (ii) average weekday traffic, (iii) annual traffic revenue and (iv) net revenue (i.e., revenue less operating expenses. ASX means the Australian Securities Exchange. Auction Rate has the definition set forth in the First Supplemental Indenture. Authorized Denominations means (i) with respect to Bonds in a Daily Mode or Weekly Mode, $100,000 and any integral multiple of $5,000 in excess thereof, (ii) with respect to Bonds in a Flexible Mode, $100,000 and any integral multiple of $1,000 in excess thereof, (iii) with respect to Bonds in a Long-Term Mode, $5,000 and any integral multiple thereof, and (iv) with respect to Bonds in an Auction Mode, $25,000 and integral multiples thereof. A-2

66 Automatic Termination Event has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Mandatory Purchase Prior to the Expiration Date. Bank has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. Bank Agent has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. Bank Bonds has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit and THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Bank Bonds. Bank Failure has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS - Interest on Series 2008 Non-AMT Bonds and THE SERIES 2008 NON-AMT BONDS Remarketing of Series 2008 Non- AMT Bonds. Bank Rate means the prime rate of interest announced publicly by The Wall Street Journal (or its successors) as the so-called prime rate. Bankruptcy Event shall mean (a) commencement by a Person of any case or other proceeding (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or seeking to make a general assignment for the benefit of its creditors; or (b) commencement against such Person of any case or other proceeding of a nature referred to in clause (a) above which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged or unbonded for a period of 60 days; or (c) commencement against such Person of any case or other proceeding seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (d) such Person shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (a), (b) or (c) above; or (e) such Person shall admit in writing its inability to pay its debts as they become due. Bankruptcy Related Event means (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or the Issuer or their debts, or of a substantial part of the assets of the Borrower or the Issuer, under any Insolvency Law, or (ii) the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for the Borrower or the Issuer for a substantial part of the assets of the Borrower or the Issuer, and, in any case referred to in the foregoing clauses (i) and (ii), such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or (b) the Borrower or the Issuer shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for the Borrower or the Issuer or for a substantial part of the assets of the Borrower or the Issuer, or (ii) generally not be paying its debts as they become due unless such debts are the subject of a bona fide dispute, or become unable to pay its debts generally as they become due, or (iii) make a general assignment for the benefit of creditors, or (iv) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition with respect to it described in clause (a) of this definition, or (v) commence a voluntary proceeding under any Insolvency Law, or file a voluntary petition seeking liquidation, reorganization, an arrangement with creditors or an order for relief under any Insolvency Law, or (vi) file an answer admitting the material allegations of a petition filed against it in any proceeding referred to in the foregoing subclauses (i) through (v), inclusive, of this clause (b), or (vii) take any action for the purpose of effecting any of the foregoing; or (c) (1) all or a substantial part of the Trust Estate (other than membership interests or equity interest in the Borrower) shall be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure by the Trustee against the Trust Estate, or (2) all or a substantial part of the Trust Estate (other than membership interests or equity interest in the Borrower) shall be transferred pursuant to a sale or disposition of such Trust A-3

67 Estate in lieu of foreclosure; or (d) (1) all or a substantial part of the membership interests or equity interest in the Borrower shall be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure against the Trust Estate, or (2) all or a substantial part of the membership interests or equity interest in the Borrower shall be transferred pursuant to a sale or disposition of such Trust Estate in lieu of foreclosure, if in either such case such action or exercise of rights or remedies results in any release or impairment of the lien of the Indenture in the Trust Estate (other than the membership interests or equity interest in the Borrower) granted for the benefit of the Owners. Baseline Report means a baseline asset condition report by the Department provided to the Concessionaire no later than 18 months prior to the project Service Commencement Date that evaluates (i) the four inner lanes of the Capital Beltway and maintenance/repair requirement during the period preceding the Service Commencement Date, to be done at or about the time the New Lanes are opened, and (ii) the HOT Lanes and all other improvements and assets of the HOT Lanes Project and their physical conditions as of the date of such report, in the form attached to the Comprehensive Agreement. Beneficial Owner has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS General. Bond Counsel has the meaning given to such term in LEGAL MATTERS. Bondholders or Registered Owners means Cede & Co. Bond Insurance Policy means any municipal bond or financial guaranty insurance policy issued to the Trustee to guarantee the scheduled payment when due of the principal or Accreted Value of and the interest on Bonds of one or more Series. Bonds means (a) with respect to the TIFIA Loan Agreement, the Initial Senior Lien Bonds, the TIFIA Bond and any other debt issued in replacement of or in substitution for, in whole or in part, the Initial Senior Lien Bonds or the TIFIA Bond, and (b) with respect to the Indenture, the Senior Lien Toll Revenue Bonds (I-495 HOT Lanes Project) and Subordinate Lien Toll Revenue Bonds (I-495 HOT Lanes Project) authorized from time to time by the Indenture, including Additional Bonds and Series 2008 Refund Bonds. Borrower means Capital Beltway Express LLC, a Delaware limited liability company. Borrower Bonds means the Liquidity Provider Bonds that are no longer considered Liquidity Proivder Bonds under the terms of the Liquidity Facility. Borrower Damages means, with respect to any Compensation Event, the sum of (a) any net cost impact relating thereto and (b) any Net Revenue Impact relating thereto. Borrower Damages shall not include, with respect to any Compensation Event, an aggregate amount that is de minimis. Borrower Project Enhancements means any extensions of, additions to, or major modifications undertaken by the Borrower after the Service Commencement Date pursuant to criteria specified in the Comprehensive Agreement, except those required as part of the maintenance or repair of assets. Business Day has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Interest on Series 2008 Non-AMT Bonds. Calculation Date has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Oversight and Reporting Covenants. Calculation Period means (a) a period of twelve (12) months, and (b) each shorter period commencing on the Service Commencement Date and ending on a Calculation Date. Calculations and Forecasting Agreement means the Calculations and Forecasting Agreement, dated as of June 12, 2008, among the Borrower, the Trustee and the TIFIA Lender, as amended and supplemented and as it may be further amended and supplemented from time to time. A-4

68 Capital Appreciation Bond means a Bond on which no payments are due until maturity or redemption prior to maturity. Capital Beltway has the meaning given to such term in INTRODUCTION The Project AND PROJECT OPERATIONS The Project. Capital Beltway Corridor means that portion of the Capital Beltway with a northern terminus of the Old Dominion Drive Bridge (Route 738) just south of Georgetown Pike (Route 193) and a southern terminus that encompasses the Springfield Interchange Phase VIII. Capital Expenditure means an expenditure made or liability incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto that have a useful life of more than one year which are capitalized in accordance with GAAP but excluding Major Maintenance. Capital Expenditure Reserve Fund means Capital Beltway Funding Corporation of Virginia Project Capital Expenditure Reserve Fund, a special fund created with the Trustee under the Indenture. Capital Expenditure Reserve Fund Contract means a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar instrument in favor of the Trustee procured by the Borrower in lieu of funding (in whole or in part) the Capital Expenditure Reserve Fund. Capitalized Interest Fund means the Capital Beltway Funding Corporation of Virginia Project Capitalized Interest Fund, a special fund created with the Trustee under the Indenture. Capitalized Interest Period has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Defaults and Remedies. Cash Flow Available for Sweep means, as of any Transfer Date, amounts available for transfer to a special designated account known as the Term Out Cash Sweep Account within the Reserve Fund, after giving effect to the payment, in full of the amounts, or establishment of reserves for payments of the amounts, described in the Indenture. Cede & Co means the nominee of DTC. Change in Control with respect to the Borrower means the transfer of 50% or more of the membership interests in (i) the Borrower by the members of the Borrower or (ii) the members of the Borrower by their direct parents, in either case, as of the Closing Date, and any assignment, sale, transfer of interest or other transaction of any type or description, including by or through voting securities, asset transfer, contract, merger, acquisition, succession, dissolution, liquidation or otherwise, that results, directly or indirectly, in a change in possession of the power to direct or control or cause the direction or control of the management of the Borrower or a significant aspect of its business; provided, that the following shall not constitute a Change in Control: (a) A change in possession of the power to direct or control the management of the Borrower or a material aspect of its business due solely to bona fide open market transactions in securities effected on a recognized public stock exchange, excluding such transactions involving an initial public offering; (b) A change in possession of the power to direct or control the management of the Borrower or a material aspect of its business due solely to a bona fide transaction involving securities or beneficial interests in the ultimate parent organization of a shareholder, member, partner or joint venture member of the Borrower, unless the transferee in such transaction is at the time of the transaction suspended or debarred or subject to a proceeding to suspend or debar from bidding, proposing or contracting with any federal or State department or agency; A-5

69 (c) An upstream reorganization or transfer of direct or indirect interests in the Borrower so long as there occurs no change in the entity with ultimate power to direct or control or cause the direction or control of the management of such Person, whether directly or indirectly and whether through share ownership, a trust, a contract or otherwise; (d) The exercise of preferred or minority equityholder veto or voting rights (whether provided by applicable Law or by the Borrower s organizational documents) over major business decisions of the Borrower; (e) The grant of the Collateral Documents, or the exercise of remedies by the Collateral Documents, including foreclosure; or (f) Transfers of direct or indirect ownership interests in the Borrower (as applicable) between or among Persons that are under common control (within the meaning of control contemplated by the definition of Affiliate). Closing Date means the date on which each of the following has occurred: (i) the Concessionaire enters into the Design-Build Contract and issues the notice to proceed thereunder, (ii) the Concessionaire enters into a binding loan agreement for the TIFIA Loan for the completion of the design and construction of the Project, and (iii) the members of the Concessionaire pay the initial installment of the equity commitments under each Guaranty of Investment Obligations, which Closing Date shall be December 20, 2007, unless another date is mutually agreed upon in writing by the Department and the Concessionaire Code has the meaning given to such term in TAX MATTERS The 2010 Opinion of Bond Counsel. Code of Virginia means the Code of Virginia of 1950, as amended from time to time. Collateral means the Trust Estate. Collateral Agent means the Institutional Lender acting on behalf of or at the direction of the other Lenders or the Person or Persons so designated in an intercreditor agreement or other document executed by all Lenders to whom Financing Assignments are outstanding at the time of execution of such document, a copy of which shall be delivered by the Concessionaire to the Department. Initially, the Collateral Agent means Wells Fargo Bank, National Association, a national banking association, in its capacity as trustee under the Indenture, or any successor trustee thereunder. Collateral Documents means the Indenture, the Security Agreement, the Pledge Agreements, the Memorandum and Assignment Agreement, the Intercreditor Agreement and each other document now or hereafter granting a Security Interest in favor of, or for the benefit of the Trustee for the benefit of the Secured Parties. Commonwealth means the Commonwealth of Virginia. Company has the meaning given to such term in Appendix D. Compensation Event means any of the following events, in each case to the extent the Comprehensive Agreement entitles the Concessionaire to Concessionaire Damages: (a) any delay beyond the applicable time period in the issuance by the Department of a Substantial Completion Certificate pursuant to the Comprehensive Agreement; (b) the development or implementation of any Department Change pursuant to the Comprehensive Agreement or any Department Project Enhancement pursuant to the Comprehensive Agreement; (c) the performance by the Department of certain ITS activities pursuant to the Comprehensive Agreement that results in Concessionaire Damages; (d) any Discriminatory Change in Law pursuant to the Comprehensive Agreement; (e) any Reimbursable Tax Imposition pursuant to the Comprehensive Agreement; (f) an event related to toll exemptions described in the Comprehensive Agreement; or (g) an injunction or other legal proceeding enjoining or estopping the Concessionaire from the performance of its obligations under the Comprehensive Agreement, in A-6

70 any case for more than 30 days in the aggregate, based solely on claims that were not time barred because the reevaluation dated May 9, 2007 of the federal environmental impact study was not published in the Federal Register. Comprehensive Agreement means the Amended and Restated Comprehensive Agreement Relating to the Route 495 HOT Lanes in Virginia Project, dated as of December 19, 2007, by and among VDOT and the Concessionaire, as amended by Amendment No. 1 to the Amended and Restated Comprehensive Agreement Relating to the Route 495 HOT Lanes in Virginia Project, dated as of April 30, 2014, as it may be amended or supplemented. Concessionaire means Capital Beltway Express LLC, a Delaware limited liability company. Concessionaire Damages means, with respect to any Compensation Event, the sum of (a) any Net Cost Impact relating thereto and (b) any Net Revenue Impact relating thereto. Concessionaire Damages shall not include, with respect to any Compensation Event, an aggregate amount that is de minimis. Concessionaire Default means the occurrence of any one or more of the following events under the Comprehensive Agreement during the Term: (a) Any representation or warranty made by the Concessionaire herein or in any other Project Agreement is inaccurate or misleading in any respect on the date made and a material adverse effect upon the Project or the Department s rights or obligations under the Project Agreements results therefrom; (b) The Concessionaire fails to pay to the Department when due all monies payable to the Department under this Agreement or any other Project Agreement or to deposit funds to any reserve or account in the amount and within the time period required by this Agreement, and such failure continues unremedied for a period of 30 days following written notice thereof; (c) The Concessionaire fails to comply with, perform or observe any material obligation, covenant, agreement, term or condition in this Agreement or any other Project Agreement (provided, that the failure to comply with the provisions of or achieve any goals relating to SWaM or DBE participation in the Comprehensive Agreement do not constitute a Concessionaire Default), including material failure to perform any Work relating to the design, construction, operation and maintenance of the Project or any material portion thereof in accordance with this Agreement, and such failure continues unremedied for a period of ninety (90) days following notice thereof (giving particulars of the failure in reasonable detail) from the Department to the Concessionaire or for such longer period as may be reasonably necessary to cure such failure; provided, in the latter case, that the Concessionaire has demonstrated to the satisfaction of the Department, acting reasonably, that (i) it is proceeding, and will proceed, with all due diligence to cure or cause to be cured such failure, (ii) its proceeding can be reasonably expected to cure or cause to be cured such failure within a reasonable period of time acceptable to the Department, and (iii) such failure is in fact cured within such period of time; (d) This Agreement or all or any portion of the Concessionaire s Interest is Transferred in contravention of the Concession Agreement; (e) The Concessionaire (i) admits, in writing, that it is unable to pay its debts as they become due, (ii) makes an assignment for the benefit of its creditors, (iii) files a voluntary petition under Title 11 of the U.S. Code, or if such petition is filed against it and an order for relief is entered, or if the Concessionaire files any petition or answer seeking, consenting to or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future United States bankruptcy code or any other present or future applicable Law, or shall seek or consent to or acquiesce in or suffer the appointment of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of the Concessionaire, or of all or any substantial part of its properties or of the Project or any interest therein, or (iv) takes any action in furtherance of any action described in this paragraph; (f) Within 90 days after the commencement of any proceeding against the Concessionaire seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future United States bankruptcy code or any other present or future applicable Law, such proceeding has not been dismissed, or, within 90 days after the appointment, without the consent or acquiescence of the Concessionaire, of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of the Concessionaire or of all or any substantial part of its properties or of the Project or any interest therein, such appointment has not been vacated or stayed on appeal or otherwise, or, within 90 days after the expiration of any such stay, such appointment has not been vacated; or (g) A levy under execution or attachment has been made against all or any part of the Project or A-7

71 any interest therein as a result of any Lien (other than a Lien relating to permitted Concessionaire Debt) created, incurred, assumed or suffered to exist by the Concessionaire or any Person claiming through it, and such execution or attachment has not been vacated, removed or stayed by court order, bonding or otherwise within a period of 60 days, unless such levy resulted from actions or omissions of the Department or its Representatives. Concessionaire s Interest means the interest of the Concessionaire in and to (a) the Project, and (b) this Agreement and the other Project Agreements. Concessionaire Loan means the aggregate principal amount of Concessionaire Debt outstanding from time to time under the Project Financing Agreements and secured by the Financing Assignments, excluding any indebtedness owed to the Concessionaire s Affiliates. Construction Fund means the Capital Beltway Funding Corporation of Virginia Project Construction Fund, a special fund created with the Trustee, and any separate Accounts that may be created and maintained by the Trustee within the Construction Fund to account for the receipt and disbursement of proceeds of each separate issue of Bonds for federal income tax purposes. Conversion Date means with respect to the Bonds in a particular Interest Rate Mode, the day on which another Interest Rate Mode for the Bonds begins. Costs of Issuance means certain costs and expenses incurred in connection with the preparation, execution, delivery and administration of the Initial Project Financing Agreements and any other documents that may be delivered in connection therewith through the Closing Date, including, without limitation, upfront fees payable to Liquidity Providers under the Reimbursement Agreement, reasonable, out-of-pocket costs and expenses incurred by the Credit Providers and/or Liquidity Providers in connection therewith, and certain fees for advisory services relating thereto. Costs of Issuance Account means the account by that name created in the Construction Fund under the First Supplemental Indenture, from which the Borrower, by written notice to the Trustee, may withdraw amounts from time to time to pay or reimburse the Borrower or any of its Affiliates for properly documents Costs of Issuance. Coverage Test has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Oversight and Reporting Covenants. Credit Facility has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Alternate Credit Facilities and Alternate Liquidity Facilities. Credit Facility Provider means the issuer of any Credit Facility. Credit Facility Provider Liabilities means, collectively, the amount paid by the Credit Facility Provider under its Credit Facility, plus interest thereon at the rate set forth in the applicable reimbursement agreement, plus any costs and expenses incurred by the Credit Facility Provider in connection with enforcing its rights in connection with the Bonds and the reimbursement agreement, plus any other amounts required to be paid to the Credit Facility Provider under the reimbursement agreement or under any other document relating to the provision of such Credit Facility. Credit Facility Provider Obligations means, collectively, the amount paid by the Credit Facility Provider under its Credit Facility, plus interest thereon at the rate set forth in the applicable Reimbursement Agreement, plus any costs and expenses incurred by the Credit Facility Provider in connection with enforcing its rights in connection with the Bonds and the Reimbursement Agreement, plus any other amounts required to be paid to the Credit Facility Provider under the Reimbursement Agreement or under any other document relating to the provision of such Credit Facility. Credit Provider means any bank, insurance company, pension fund or other financial institution which provides a Credit Facility or Alternate Credit Facility for the Bonds. A-8

72 Credit Provider Failure or Liquidity Provider Failure means a failure of the Credit Provider or Liquidity Provider, as applicable, to pay a properly presented and conforming draw or request for advance under the Credit Facility or Liquidity Facility, as applicable, or the filing or commencement of any bankruptcy or insolvency proceedings by or against the Credit Provider or Liquidity Provider, as applicable, or the Credit Provider or Liquidity Provider, as applicable, shall declare a moratorium on the payment of its unsecured debt obligations or shall repudiate the Credit Facility or Liquidity Facility, as applicable. CTB means the Commonwealth Transportation Board, a board of the Commonwealth affiliated with the Department. Cumulative Debt Service Reserve Fund Requirement means at any time the amount equal to the aggregate of each Debt Service Reserve Fund requirement specified in any applicable supplemental Indenture with respect to any Senior Lien Bonds. Current Interest Bond means a Bond on which interest is payable on Interest Payment Dates prior to maturity or redemption prior to maturity. Daily Mode means the Interest Rate Mode during which the Bonds bear interest at the Daily Rate. Daily Rate means the per annum interest rate on any Bond in the Daily Mode determined at 10:00 AM on each Rate Determination Date and established by the Remarketing Agent. Daily Rate Period means the period during which a Bond in the Daily Mode shall bear interest at a Daily Rate, which shall be from the Business Day upon which a Daily Rate is set to but not including the next succeeding Business Day. Debt Service means (a) with respect to a Current Interest Bond, the interest due on such Bond on each Interest Payment Date and the principal and interest due on such Bond at maturity; (b) with respect to a Capital Appreciation Bond, the Maturity Value due on such Bond at maturity or conversion date to a Current Interest Bond; and (c) with respect to term Bonds that are subject to mandatory sinking fund redemption in accordance with a schedule set forth in a supplemental Indenture, the principal and interest or the accreted value payable on such Bonds on the date on which they are subject to mandatory sinking fund redemption in accordance with such schedule. Debt Service shall also include any additional amounts relating to administrative expenses for senior lien Bonds and subordinate lien Bonds if identified as such in a supplemental Indenture. Debt Service does not include the Redemption Price of any Bond. Debt Service Payment Commencement Date has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Defaults and Remedies. Debt Service Reserve Fund Contract has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Debt Service Reserve Fund. Debt Service Reserve Fund means the Capital Beltway Funding Corporation of Virginia Project Senior Lien Bonds Debt Service Reserve Fund, a special fund created with the Trustee under the Indenture. Default means each event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default. Defeasance Escrow Account means any trust account into which money and/or Defeasance Securities (as defined in the Indenture) are deposited for the purpose of defeasing any Bonds in accordance with of the Indenture. Delay Events has the meaning given to such term in Appendix C Summary of Certain Provisions of the Comprehensive Agreement. Department means the Virginia Department of Transportation. A-9

73 Department Project Enhancements means any extensions of, additions to, or major modifications of the HOT Lanes or the Additional Traffic Lanes, except as part of maintenance, repair, reconstruction, rehabilitation, restoration or replacement of any improvements and assets, within the Capital Beltway Corridor, undertaken by the Department after the Service Commencement Date pursuant to the Amended and Restated Comprehensive Agreement. Department Funding Account means the Capital Beltway Funding Corporation of Virginia Project Department Funding Account, a special fund created by the Trustee, into which all amounts received by the Trustee pursuant to the Department Funding Agreement shall be deposited. Department Funding Agreement means the VDOT Funding Agreement, dated as of December 19, 2007, between the Department, the Design-Build Contractor, the Borrower and the Trustee, as it may be amended or supplemented. Design-Build Contract means the Design-Build Contract, dated as of December 18, 2007, between the Concessionaire and the Design-Build Contractor for the Work, as it may be amended or supplemented. Design-Build Contractor has the meaning given to such term in INTRODUCTION The Project. Direct Participant has the meaning given to such term in APPENDIX I Book-Entry Only System. Discriminatory Change in Law means the adoption of any Virginia law or any change in any Virginia law or in the interpretation or application thereof during the term of the Comprehensive Agreement that has the effect of discriminating against the HOT Lanes Project or the Concessionaire (but as to the Concessionaire only with respect to the HOT Lanes Project), except where such law or change in law or in interpretation or application is in response to any act or omission on the part of the Concessionaire that is illegal (other than an act or omission rendered illegal by virtue of the Discriminatory Change in Law) or such law or change in law or in interpretation or application is otherwise permitted under the Comprehensive Agreement. Distribution means (a) any distribution, dividend or other payment, monetary or in-kind, made by the Concessionaire to the shareholders, members, partners, joint venturers or other holders of an equity interest in the Concessionaire, including from the proceeds of any Refinancing, on account of equity investment in the Concessionaire, or (b) any payment by the Concessionaire to an Affiliate other than pursuant to an Affiliate Contract to which the Department has consented. Distribution Fund means the Capital Beltway Funding Corporation of Virginia Project Senior Distribution Fund, a special fund created by the Trustee under the Indenture. DMV has the meaning given to such term in INVESTMENT CONSIDERATIONS Enforcement and Collection Risk. DTC has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS General. DTC Participant has the meaning given to such term in Appendix I. Effective Date has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Remarketing Considerations Series 2008 Non-AMT Bonds May be Offered at Different Prices on any Date. Electronic Means means telecopy, facsimile transmission, transmission or other similar electronic means of communication providing evidence of transmission, including a telephonic communication confirmed by any other method set forth in this definition. Eligible Project Costs means amounts in the Project Budget, substantially all of which are paid by or for the account of the Concessionaire in connection with the Project, including the cost of: (a) development phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, permitting, preliminary engineering and design work, and other preconstruction activities for the Project; A-10

74 (b) construction, reconstruction, rehabilitation, replacement, and acquisition of real property (including land related to the Project and improvements to land), environmental mitigation, construction contingencies, and acquisition of equipment; and (c) capitalized interest necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction. EMMA has the meaning given to such term in CONTINUING DISCLOSURE UNDER SEC RULE 15c2-12. Equity Funding Agreements means (a) the Amended and Restated Equity Funding Agreement, dated as of June 12, 2008, between, among others, Fluor, the Borrower and the Trustee, and (b) the Amended and Restated Equity Funding Agreement, dated as of June 12, 2008, between, among others, Transurban, the Borrower and the Trustee. Equity Funding Guaranty means (a) the Equity Funding Guaranty, dated as of December 20, 2007, among Fluor Corporation, the Borrower, the Department, Goldman Sachs Capital Markets, L.P., DEPFA Bank plc, and the Trustee and (b) the Equity Funding Guaranty, dated as of December 20, 2007, among Transurban Finance Company Pty. Ltd., the Borrower, the Department, Goldman Sachs Capital Markets, L.P., DEPFA Bank plc, and the Trustee, in each case as such documents are amended and confirmed by the Equity Funding Agreements. Equity Participants means Transurban DRIVe and Transurban Express. ETC Agreement has the meaning given to such term in PROJECT OPERATIONS Tolling Operations. ETC Services means certain toll transaction account management to be provided by VDOT pursuant to the ETC Agreement. ETTM Facilities means the administration/operations building, toll gantries and technical cabinets, utility connections, lighting facilities and other facilities associated with electronic toll and traffic management (including both the tolling subsystem and the HOT operations center traffic management subsystem). ETTM System has the meaning given to such term in PROJECT OPERATIONS The Project. Event of Default or Default means, with respect to the Indenture, the events or circumstances set forth at SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Events of Default in Appendix E; with respect to the Senior Loan Agreement, the events or circumstances, among others, set forth at SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT Senior Loan Agreement Defaults in Appendix F; with respect to the Reimbursement Agreement, the events or circumstances, among others, set forth at SUMMARY OF CERTAIN PROVISIONS OF THE REIMBURSEMENT AGREEMENT, INCLUDING THE LETTERS OF CREDIT Events of Default in Appendix G; and with respect to the TIFIA Loan Agreement, the events or circumstances, among others, set forth at SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT TIFIA Loan Agreement Events of Default in Appendix F. Expiration Date means the expiration date of each of the Letters of Credit currently in effect, which is June 12, Express Operations Center means an operation center building constructed and equipped by the Company in Alexandria, Virginia, as part of the 495 Express Lanes. E-ZPass or E-ZPass System means an electronic toll collection system used in the Commonwealth of Virginia and operated by VDOT and as part of the E-ZPass Interagency Group. EZPass Flex means one of the two types of E-ZPass transponders that can be detected by the ETTM System to identify vehicles. Favorable Opinion of Bound Counsel means, with respect to any action the occurrence of which requires such an opinion, an unqualified Opinion of Counsel, which shall be a Bond Counsel, to the effect that such action is A-11

75 permitted under the Authorizing Statute and this Indenture and will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of Federal income taxation (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of the Bonds). FHWA means the Federal Highway Administration. Fifth Supplemental Indenture means the Fifth Supplemental Indenture of Trust, by and between the Issuer and the Trustee, dated as of July 1, Final Acceptance Certificate means the certificate issued by the Department pursuant to the Comprehensive Agreement. Final Acceptance Date means the date on which the Department issues the Final Acceptance Certificate. Final Maturity Date means December 31, 2047 or, if the Substantial Completion Date has been revised pursuant to the TIFIA Loan Agreement, the last July 31 or January 31 occurring no later than thirty-five (35) years from Substantial Completion. Financing Assignment means an agreement between any Lender and the Concessionaire where the Concessionaire has the right, at its sole cost and expense, to pledge, sell or otherwise transfer solely the Toll Revenues available for Distribution in connection with a Permitted Securitization or to pledge, hypothecate or assign the Concessionaire s Interest for any Concessionaire Debt, such debt to be issued on such terms and conditions as may be acceptable to any Lender and the Concessionaire, and subject to certain terms and conditions under the Comprehensive Agreement. Financing Documents means, collectively, each Initial Project Financing Agreement, each supplemental Indenture, each Loan Agreement, each Note, each Credit Facility, each Liquidity Facility, each Reimbursement Agreement and each Qualified Hedge. First Supplemental Indenture means the First Supplemental Indenture of Trust, by and between the Issuer and the Trustee, dated as of June 1, Fiscal Year means the Borrower s fiscal year, which begins on July 1 of each calendar year and ends on June 30 of the next succeeding calendar year. Fixed Rate Mode means the Interest Rate Mode during which the Bonds bear interest at the Fixed Rate. Fixed Rate means the per annum interest rate on any Bond in the Fixed Rate Mode determined in the manner and at the times as follows: no later than 4:00 PM on the applicable Rate Determination Date, the Remarketing Agent shall determine the Fixed Rate as the minimum interest rate which, in the sole judgment of the Remarketing Agent, will result in a sale of the Bonds at a price equal to the principal amount thereof on the Rate Determination Date. Flexible Mode means the Interest Rate Mode during which the Bonds bear interest at the Flexible Rate. Flexible Rate means the per annum interest rate on a Bond in the Flexible Mode determined for such Bond by the Remarketing Agent so as to be able to remarket such Bond at part in the secondary market at the lowest average interest cost for all Flexible Rate Bonds. The Bonds in the Flexible Mode may bear interest at different Flexible Rates. Fluor Enterprises has the meaning given to such term in INTRODUCTION The Borrower. FMS has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Control by the Banks. Fourth Supplemental Indenture means the Fourth Supplemental Indenture of Trust, by and between the Issuer and the Trustee, dated as of December 1, Fund or Funds means the fund(s) created by the Indenture. A-12

76 Future Borrower Damages has the meaning given to such term in Appendix E. Generally Accepted Accounting Principles or GAAP means such accepted accounting practice as conforms at the time to generally accepted accounting principles in the United States of America, consistently applied. General Assembly means the General Assembly of the Commonwealth. Government means the United States of America and its departments and agencies. Governmental Approvals means all authorizations, covenants, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions and declarations of or with any Governmental Authority, including to the extent required under environmental laws. Governmental Authority means any court, federal, state, or local government, department, commission, board, bureau, agency or other regulatory or governmental authority. Governor means the governor of the Commonwealth. GP Lanes means the general-purpose traffic lanes (in either or both directions, as applicable) on the Capital Beltway. Hazardous Substance means, but is not limited to, any solid, liquid, gas, odor, heat, sound, vibration, radiation or other substance or emission which is or could be considered a contaminant, pollutant, dangerous substance, toxic substance, hazardous waste, solid waste, hazardous material or hazardous substance which is or becomes regulated by applicable Environmental Laws or which is classified as hazardous or toxic under applicable Environmental Laws (including but not limited to gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls, asbestos and urea formaldehyde foam insulation, and naturally asbestos-containing soils or sulfidic geological materials). Hedge Agreements means (a) any ISDA Master Agreement(s) and the related schedules and confirmations, each dated on or about the date hereof, entered into by the Borrower with, or novated to, any Hedging Bank and (b) any other agreement entered into, or to be entered into, by the Borrower for a Hedging Transaction. Hedging Banks means (a) as of June 1, 2008, the Initial Hedge Providers, and their respective successors and assigns and (b) thereafter, any other Qualified Hedge Provider that becomes a party to a Hedge Agreement and their respective successors and assigns. Hedging Obligations means, collectively, the payment of (a) all scheduled amounts payable to any Hedging Banks by the Borrower, under a Hedge Agreement (including interest accruing after the date of any filing by the Borrower of any petition in bankruptcy or the commencement of any bankruptcy, insolvency or similar proceeding with respect to the\ Borrower), net of all scheduled amounts payable to the Borrower by such Hedging Banks, under such Hedge Agreements, and (b) all other indebtedness, fees, indemnities and other amounts payable by the Borrower to the Hedging Banks under such Hedge Agreements; provided, that Hedging Obligations shall not include Hedging Termination Obligations. For the avoidance of doubt, the calculations of Hedging Obligations payable under any Hedge Agreements shall be made in accordance with the terms of such Hedge Agreements. Hedging Termination Obligations means the aggregate amount of (i) amounts payable to any Hedging Banks by the Borrower under a Hedge Agreement, upon the early unwind of all or a portion of such Hedge Agreement, net of all amounts payable to the Borrower by such Hedging Banks, plus (ii) any penalty payments or other payments in the form of unwind fees payable in connection with an early unwind under such Hedge Agreement. For the avoidance of doubt, (a) the calculations of Hedging Termination Obligations payable under a Hedge Agreement shall be made in accordance with the terms of such applicable Hedge Agreement, and (b) any Hedging Obligations not previously paid shall retain the security and lien level of Hedging Obligations. Hedging Transaction means any interest rate protection agreement, interest rate swap transaction, inflationindexed swap transaction, interest rate cap or collar transaction, interest rate future, interest rate option or rate lock. A-13

77 High Occupancy Requirement means the number of Persons in accordance with Law applicable to HOT lanes required to be traveling in a vehicle for the vehicle to use the HOT Lanes without the payment of a toll. High Occupancy Vehicles means, at any given time during the Term, Permitted Vehicles traveling with at least that number of persons required by the High Occupancy Requirement applicable at such time. HOT Assets means the HOT Lanes and all other improvements and assets of the HOT Lanes Project. HOT Lanes means the means the (a) four-lane inner directional roadways (two in each direction), including shoulders and ramps exclusively providing ingress or egress to the HOT Lanes and terminating at the merge point with the GP Lanes, comprising a portion of the Capital Beltway to be identified separately from the adjacent general-purpose lanes of the Capital Beltway and dedicated for use by qualifying HOT Lanes traffic and operated by the Concessionaire commencing on the Service Commencement Date, and (b) when constructed or designated as such, any Additional Traffic Lanes dedicated for use by qualifying HOT Lanes traffic or other Project Enhancements. HOT Lanes Operations means (a) the operation, management, maintenance and tolling of the HOT Lanes Project, and (b) all other actions relating to the HOT Lanes Project or otherwise that are to be performed by or on behalf of the Concessionaire during the Operating Period pursuant to this Agreement. HOT Lanes Project or 495 Express Lanes means (a) the HOT Lanes Right of Way, the HOT Lanes operations center and the four-lane inner directional roadways (two in each direction) comprising a portion of the existing Capital Beltway that are to be identified separately from the adjacent general-purpose lanes of the Capital Beltway (including the general-purpose lanes to be constructed as the New Lanes) and dedicated for use by qualifying HOT Lanes traffic, together with all improvements thereon, including the ETTM Facilities and ETTM System, and all associated assets including signage the cost of which is borne by the Concessionaire under the Agreement, in each case as more fully described in the Scope Document (attached to the Comprehensive Agreement), and (b) when constructed, any Project Enhancements intended by the Department to be included in the HOT Lanes Project. The HOT Lanes Project shall not include frontage roads, overpasses, underpasses, bridges and other crossings that cross the HOT Lanes Right of Way. HOT Lanes Right of Way means all real property within the access control line for the HOT Lanes Project, including the separation zone from the adjacent general-purpose lanes of the Capital Beltway and dedicated for use by qualifying HOT Lanes traffic, together with all improvements thereon related to in accordance with the HOT Lanes Project Purpose, including the HOT Lanes operations center site and easements for fiber optic routing to such operations center, and the property on which the ETTM Facilities and ETTM System is located, and all other facilities and improvements required for the opening and operations of the HOT Lanes. HOV has the meaning given to such term in INTRODUCTION The Project. HOV-2 means a High Occupancy Requirement of at least two persons. HOV-3 has the meaning given to such term in INTRODUCTION The Project. HOV-3 vehicles has the meaning given to such term in PROJECT OPERATIONS The Project. I-95 Concessionaire means 95 Express Lanes LLC, a Delaware limited liability company and an affiliate of the Borrower. I-95 Express Lanes Project means the I-95 HOV/HOT lanes project in the Commonwealth, which the I-95 Concessionaire is causing to be constructed and will operate pursuant to the Comprehensive Agreement relating to the I-95HOV/HOT Lanes Project, dated as of July 31, 2012, with VDOT. Indebtedness of any Person means (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (e) any lease A-14

78 which in accordance with GAAP is required to be capitalized on the balance sheet of such Person (and the amount of these obligations shall be the amount so capitalized), (f) all obligations, contingent or otherwise, of such Person under acceptances issued or created for the account of such Person, (g) all unconditional obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock or other equity interests of such Person or any warrants, rights or options to acquire such capital stock or other equity interests, (h) all payment obligations of such Person pursuant to hedging transactions, (i) all guarantee obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (h) above, (j) all Indebtedness of the type referred to in clauses (a) through (h) above to the extent secured by (or to the extent the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness, and (k) without double-counting, all Reimbursement Obligations owed by such person as a result of any non-payment of obligations of the kind referred to in clauses (a), (b), or (h); provided, however, that the term Indebtedness shall not include any payment obligations (or other obligations) under any Project Agreements. Indenture means the Master Indenture, as amended and supplemented by the Fifth Supplemental Indenture and the Sixth Supplemental Indenture. Independent Engineer means the independent engineering consultant retained by the Concessionaire and the Department in accordance with an Independent Engineer Agreement. Independent Engineer Agreement means the Independent Engineer Agreement, dated as of December 20, 2007, among the Concessionaire, the Department, the Collateral Agent and the Independent Engineer, as it may be amended or supplemented. Indirect Participant has the meaning given to such term in Appendix I. Initial Hedge Agreements means Hedge Agreements with the Initial Hedge Providers that were executed on or about the date the Series 2008 Refunded Bonds were issued, in connection with the issuance of such bonds. Initial Hedge Providers means (i) with respect to the Indenture, each of Goldman Sachs Capital Markets, L.P. and DEPFA BANK plc, or any recipient of an assignment or novation of any portion of the Initial Hedge Agreements, or any affiliate of any of the foregoing who are a party to the Initial Hedge Agreements, and (ii) with respect to the TIFIA Loan Agreement, each of Goldman Sachs Capital Markets, L.P. and DEPFA BANK plc, or any assignee of any of the foregoing of any portion of the Initial Hedge Agreements, or any affiliate of any of the foregoing who are a party to the Initial Hedge Agreements. Initial Project Financing Agreements means, collectively, the Indenture, the Senior Loan Agreement and any related Note, the TIFIA Loan Agreement, each Collateral Document, any Credit Facility and/or Liquidity Facility relating to the Series 2008 Senior Lien Bonds and any Reimbursement Agreement relating thereto and any Initial Hedge Agreements and any amendment, restatement or other modification in accordance with the terms of the Indenture to any of the foregoing. Initial Senior Lien Bonds means the series of Capital Beltway Funding Corporation of Virginia, Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project) issued pursuant to the First Supplemental Indenture. Insolvency Laws means the United States Bankruptcy Code, 11 U.S.C. 101 et seq., as from time to time amended and in effect, and any state bankruptcy, insolvency, receivership or similar law now or hereafter in effect. Institutional Lender means: (a) the United States of America, any state thereof or any agency or instrumentality of either of them, any municipal agency, public benefit corporation or public authority, advancing or insuring mortgage loans or making payments which, in any manner, assist in the financing, development, operation and maintenance of projects; (b) any (i) savings bank, commercial bank, investment bank, trust company (whether acting individually or in a fiduciary capacity) or insurance company organized and existing under the laws of the United States of America or any state thereof, (ii) foreign insurance company or commercial bank qualified to do A-15

79 business as an insurer or commercial bank as applicable under the laws of the United States of America or any state thereof, (iii) pension fund, hedge fund, foundation or university or college endowment fund, (iv) entity which is formed for the purpose of securitizing mortgages, whose securities are sold by public offering or to qualified investors under the U.S. Securities Act of 1933, as amended, (v) Person engaged in making loans in connection with the securitization of mortgages, to the extent that the mortgage to be made is to be so securitized in a public offering or offering to qualified investors under the U.S. Securities Act of 1933, as amended, within one year of its making (provided that an entity described in this clause (b) only qualifies as an Institutional Lender if it is subject to the jurisdiction of state and federal courts in the Commonwealth in any actions); (c) any qualified institutional buyer under Rule 144(a) under the Securities Act or any other similar Law hereinafter enacted that defines a similar category of investors by substantially similar terms; or (d) any other financial institution or entity designated by the Concessionaire and approved by the Department (provided that such institution or entity, in its activity under this Agreement, is acceptable under then current guidelines and practices of the Commonwealth); provided, that each such entity (other than entities described in clause (b)(iv) and clause (c) of this definition) or combination of such entities if the Institutional Lender is a combination of such entities shall have individual or combined assets, as the case may be, of not less than $1 billion; and provided, further, that an entity described in clause (b)(iv) of this definition must have assets of not less than $100 million. Instructing Controlling Party has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Instructing Controlling Party. Instructing Controlling Party has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Control by the Banks. Instructing Controlling Party Step-in Event has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Defaults and Remedies. Insurance means the contracts and policies of insurance taken out by or on behalf of the Borrower in accordance with the Initial Senior Loan Agreement, the TIFIA Loan Agreement, the Comprehensive Agreement and any similar requirements in any other Loan Agreement or (to the extent of its interest) in which the Borrower has an interest other than a Bond Insurance Policy. Insurance Proceeds means all proceeds of insurance (other than proceeds of business interruption insurance and loss of advance profits insurance, which shall constitute revenues ) payable to or received by the Borrower (whether by way of claims, return of premiums, ex gratia settlements or otherwise). Intercompany Services Agreement means the Intercompany Services Agreement, dated as of August 5, 2010, by and between the Operator and Transurban (USA) Inc., as it may be amended or supplemented. Intercreditor Agreement means the Intercreditor Agreement, dated as of June 1, 2008, between the Trustee, the TIFIA Bondholder and each other Secured Party that becomes a party thereto (by accession or otherwise) and any amendment or supplement thereto. Interest Accrual Period means the period during which a Bond accrues interest payable on the next Interest Payment Date applicable thereto. Each Interest Accrual Period shall commence on (and include) the last Interest Payment Date to which interest has been paid (or, if no interest has been paid, from the date of original authentication and delivery of the Bonds) to, but not including, the Interest Payment Date on which interest is to be paid. If, at the time of authentication of any Bond, interest is in default or overdue on the Bonds, such Bond shall bear interest from the date to which interest has previously been paid in full or made available for payment in full on Outstanding Bonds. Interest Component shall have the mean ascribed to such term in the Letters of Credit. Interest Drawing means a drawing against the Interest Component of the Letter of Credit Amount under any Letter of Credit in respect of payment of accrued interest. A-16

80 Interest Payment Date means each date on which interest is to be paid and is: (i) with respect to the Bonds in the Flexible Mode, each Mandatory Purchase Date applicable thereto; (ii) with respect to the Bonds in the Daily Mode or Weekly Mode, the first Business Day of each month; (iii) with respect to the Bonds in a Term Rate Mode or a Fixed Rate Mode, the first day of the sixth calendar month following the month in which such Term Rate Mode or a Fixed Rate Mode takes effect, and the first day of each sixth calendar month thereafter or, upon the receipt by the Trustee of a favorable opinion of Bond Counsel, any other six-month interval chosen by the Borrower (beginning with the first such day which is at least three months after the conversion date) and, with respect to a Term Rate Period, the final day of the current Interest Period if other than a regular six-month interval; (iv) with respect to the Bonds in the LIBOR Indexed Mode, each January 1, April 1, July 1 and October 1 (beginning with the first such day after the conversion date); (v) (without duplication as to any Interest Payment Date listed above) each Maturity Date; (vi) with respect to any Liquidity Provider bonds, the day set forth in the Reimbursement Agreement; and (vii) with respect to the Bonds in the Auction Mode, Interest Payment Date shall have the meaning set forth in the First Supplemental Indenture. Interest Period means, for the Bonds in a particular Interest Rate Mode, the period of time that the Bonds bear interest at the rate (per annum) which becomes effective at the beginning of such period, and shall include an auction period, a flexible rate period, a daily rate period, a weekly rate period, a LIBOR interest period, a term rate period and a fixed rate period. Interest Rate Mode means, as the context may require, the Auction Mode, the Flexible Mode, the Daily Mode, the Weekly Mode, the Term Rate Mode or the Fixed Rate Mode. Interim Payment Date means any date occurring during the Payment Period that is a date for Senior Interest Payment and is not a Semi-Annual Payment Date. Investment Grade Rating means a rating assigned by a Nationally Recognized Rating Agency which is now lower than BBB minus or Baa3. IRS has the meaning given to such term in CONTINUING DISCLOSURE UNDER SEC RULE 15c2-12. Issuer means Capital Beltway Funding Corporation of Virginia. Law means any current or future order, writ, injunction, decree, judgment, law, ordinance, decision, opinion, ruling, statute, code, rule or regulation of any Governmental Authority. Lenders means each of the Institutional Lenders that are parties to the Project Financing Agreements, including the Collateral Agent, and their respective successors and assigns who also qualify as Institutional Lenders. Letter of Credit Amount means, with respect to each Letter of Credit, the total stated amount of such Letter of Credit as it may be reduced, increased and/or restated from time to time in accordance with the provisions thereof. Letter of Credit Stated Termination Date means the expiration date of the Letter of Credit at 5:00pm on June 12, 2016, or, if such date is not a Business Day, on the next succeeding Business Day. Letters of Credit has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. LIBOR Indexed Mode means the Interest Rate Mode during which the Bonds bear interest at the LIBOR Index Rate, which includes any Liquidity Provider Mode. LIBOR Interest Period means, during the LIBOR Indexed Mode, the period from (and including) the Conversion Date or the date of issuance of the Bonds, as applicable, to the first Interest Payment Date and thereafter means the period from (and including) an Interest Payment Date to but not including the following Interest Payment Date (regardless of whether or not such Interest Payment Dates are business days). Lien means the liens of (a) all the Senior Lien Bonds, considered collectively; or (b) all the Subordinate Lien Bonds, considered collectively. A-17

81 Life Cycle Maintenance Plan means an annual plan prepared by the Operating Company of a full five year period maintenance plan on a rolling basis that describes life cycle asset maintenance for the HOT Lanes Project, which shall be subject to approval by the Concessionaire and (following approval by the Concessionaire) the Department. Liquidity Facility has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Alternate Credit Facilities and Alternate Liquidity Facilities. Liquidity Facility Purchase Account means the account established by the Tender Agent within the Purchase Fund under the First Supplemental Indenture. Liquidity Provider means any bank, insurance company, pension fund or other financial institution which provides a Liquidity Facility or Alternate Liquidity Facility for the Bonds. Liquidity Provider Bonds has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit and THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Bank Bonds. Liquidity Provider Failure or Credit Provider Failure means a failure of the Credit Provider or Liquidity Provider, as applicable, to pay a properly presented and conforming draw or request for advance under the Credit Facility or Liquidity Facility, as applicable, or the filing or commencement of any bankruptcy or insolvency proceedings by or against the Credit Provider or Liquidity Provider, as applicable, or the Credit Provider or Liquidity Provider, as applicable, shall declare a moratorium on the payment of its unsecured debt obligations or shall repudiate the Credit Facility or Liquidity Facility, as applicable. Loan Agreement or Loan Agreements means the Senior Loan Agreement, the TIFIA Loan Agreement and any other loan agreement between the Issuer and the Borrower (and any appropriate party thereto) governing the terms and conditions of a Loan. Loan Agreement Default means any Default under the Senior Loan Agreement or any event of default or equivalent term under any Loan Agreement. Loan Amortization Schedule means the loan amortization schedule attached to the TIFIA Bond delivered pursuant to the TIFIA Loan Agreement. Loss Proceeds Fund means the Capital Beltway Funding Corporation of Virginia Project Loss Proceeds Fund, a special fund with the Trustee under the Indenture. Major Maintenance means maintenance, repair, renewal, reconstruction or replacement of any portion or component of the Project Assets, as applicable, of a type which is not normally included as ordinary maintenance. Major Maintenance Reserve Fund means the Capital Beltway Funding Corporation of Virginia Project Major Maintenance Reserve Fund, a special fund created with the Trustee under the Indenture. Major Maintenance Reserve Fund Contract means a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar instrument in favor of the Trustee procured by the Borrower in lieu of funding (in whole or in part) the Major Maintenance Reserve Fund. Major Maintenance Reserve Required Balance means the Project life cycle cost requirements as set out in the Base Case Financial Model. For life cycle costs incurred in year N, the minimum Major Maintenance Reserve Required Balance at the beginning of year N in respect of such life cycle would be: Year Percentage N 100% N % N % A-18

82 Mandatory Debt Service or Mandatory Debt Service on TIFIA Bonds or TIFIA Mandatory Debt Service means the portion of interest unconditionally required to be paid on the TIFIA Bonds on a payment date pursuant to the TIFIA Loan Agreement as more fully specified in the TIFIA Loan Agreement. Mandatory Purchase Date means: (i) with respect to a flexible rate Bond the first Business Day following the last day of each flexible rate period with respect to such Bond; (ii) for Bonds in the Term Rate Mode, on the first Business Day following the last day of each term rate period; (iii) any conversion date (except a change in Interest Rate Mode between the Daily Mode and the Weekly Mode); (iv) any Substitution Date; (v) the fifth Business Day prior to the expiration date (other than as a result of an Automatic Termination Event); (vi) the date specified by the Trustee following the occurrence of an event of default (other than an Automatic Termination Event) under the Reimbursement Agreement, which date shall be a Business Day not more than twenty-five nor less than twenty days after the Trustee s receipt of notice of such event of default from the Credit Provider or the Liquidity Provider and in no event later than the day preceding the termination date specified by the Credit Provider or the Liquidity Provider; (vii) the date specified by the Trustee following receipt of notice by the Trustee from the Credit Provider that the Credit Facility will not be reinstated following a drawing to pay interest on the Bonds (other than interest on Bonds no longer outstanding after such drawing) which date shall be a Business Day not more than five days after the Trustee s receipt of such notice; and (viii) for Bonds in the Daily Mode or Weekly Mode, any Business Day specified by the Borrower not less than 20 days after the Trustee s receipt of such notice and in no event later than the day preceding the expiration date. Master Indenture means the Amended and Restated Master Indenture of Trust, by and between the Issuer and the Trustee, dated as of June 1, 2008, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, and the Fourth Supplemental Indenture. Material Adverse Effect means (i) with respect to the Senior Loan Agreement and the Reimbursement Agreement, a materially adverse effect on: (a) the ability of the Borrower or the Issuer to pay or perform or comply with any of its material obligations under any of the Finance Documents or Material Project Documents to which it is a party, (b) the validity, perfection or priority of the Security Interest on the Trust Estate and under the Security Agreement in favor of the Trustee, or (c) Documents; the ability of any Secured Party to enforce its rights and remedies under the Finance provided that no effect arising out of or in connection with or resulting from any of the following shall be deemed, either alone or in combination, to constitute or contribute to a Material Adverse Effect: (A) general economic conditions or changes therein; (B) financial, banking, currency or capital markets fluctuations or conditions (either in the United States or any international market and including changes in interest rates); (C) conditions affecting any or all of the real estate, financial services, construction or toll road industries; (D) any existing event, occurrence or circumstance of which any Secured Party has actual knowledge as of the Closing Date; and (E) any action, omission, change, effect, circumstance or condition contemplated by the Finance Documents or attributable to the execution, performance or announcement of the Finance Documents or the transactions contemplated thereby; provided, further, that the exceptions provided in the immediately preceding proviso shall not apply to any events occurring after the Closing Date; and (ii) with respect to the TIFIA Loan Agreement, a material adverse change in (a) the Project or the business, property or financial condition of the Concessionaire or, so long as such Member has obligations under an Equity Funding Agreement, a Member, (b) the ability of the Concessionaire to perform or comply with any of its material obligations under the Senior Loan Documents or the TIFIA Loan Documents or the Material Project Contracts to which it is a party, (c) the validity, perfection or A-19

83 priority of the Liens on the Collateral in favor of the Trustee or (d) the TIFIA Lender s rights or benefits available under the TIFIA Loan Agreement. Material Project Contracts means the Comprehensive Agreement, the Design-Build Contract, the Toll Agreement, the Design-Build Work Guarantee, any Development Contract (once executed), the ETC Agreement, as well as any other Project Agreement, as such term is defined in the Comprehensive Agreement. Maturity Date means December 31, Maturity Value means any amount defined as such in a Supplemental Indenture for purposes of determining the amount payable to the Owner of a Capital Appreciation Bond at the maturity of such Capital Appreciation Bond. Maximum Rate has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Interest on Series 2008 Non-AMT Bonds. Members means DRIVe USA Investments LLC, a Delaware limited liability company, and Transurban Express Lanes LLC, a Delaware limited liability company and an affiliate of DRIVe USA Investments LLC. Memorandum and Assignment Agreement means the Memorandum of Amended and Restated Comprehensive Agreement and Assignment of Toll Revenue dated June 1, 2008, among the VDOT, the Concessionaire and the Trustee, as it may be amended or supplemented. Moody s Investors Service means a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successor and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term shall be deemed to refer to any other nationally recognized securities rating agency selected by the Borrower after consultation with the Remarketing Agent, if any. MSRB has the meaning given to such term in CONTINUING DISCLOSURE UNDER SEC RULE 15c2-12. Nationally Recognized Rating Agency means Standard & Poor s Rating Services, Moody s Investor Services, Inc., Fitch Ratings or another national bond rating agency approved by the TIFIA Lender. Net Cash Flow means, in respect of any period, (a) aggregate Revenues received during such period, less (b) the Operating Costs, the Capital Expenditures, the cost of any Major Maintenance and any Project Costs, in each case paid by the Borrower during such period (other than (i) the cost of Major Maintenance funded by monies withdrawn from the Major Maintenance Reserve Fund or from the Capital Expenditure Reserve or from the Construction Fund or by Insurance Proceeds other than the proceeds of business interruption or loss of advance profits insurance or by additional Borrower Debt and (ii) Project Costs funded by monies withdrawn from the Construction Fund), less (c) deposits to the Major Maintenance Reserve Fund made during such period, plus (d) amounts withdrawn from the Major Maintenance Reserve Fund during such period, except to the extent used to pay for Major Maintenance, less (e) deposits to the O&M Reserve Fund made during such period other than deposit made from funds withdrawn from the Ramp Up Reserve Fund, plus (f) amounts withdrawn from the O&M Reserve Fund during such period, except to the extent used to pay for Operating Costs, plus (g) amounts withdrawn from the Capital Expenditure Reserve Fund during such period, except to the extent used to pay for Capital Expenditures, plus (h), for the purposes of the calculation of Senior Debt Service Coverage Ratio and Total Debt Service Coverage Ratio during the period from the Service Commencement Date through to the second anniversary thereof, the amount outstanding to the credit of the Ramp-Up Reserve Fund on the first day of the applicable Calculation Period. Net Cost Impact means any net increase or decrease in the Concessionaire s costs (including the Concessionaire s reasonable Allocable Costs and taking into account any savings in the Concessionaire s operating and finance costs resulting from the Compensation Event) directly attributable to a Compensation Event, as compared with what the Concessionaire s costs (including the Concessionaire s reasonable Allocable Costs) would have been absent occurrence of the Compensation Event, less the increased costs that can reasonably be mitigated by the Concessionaire in accordance with the Comprehensive Agreement. A-20

84 Net Revenue Impact means (a) any net increase or decrease in Toll Revenue directly attributable to a Compensation Event (taking into account the lost Toll Revenue that would be returned to the Department under the permitting fee arrangements detailed in the Comprehensive Agreement), and less (b) any savings in facility operating and maintenance costs resulting from a Compensation Event (excluding any savings in costs subtracted from Net Cost Impact for the same Compensation Event) as compared with what the Toll Revenues would have been absent occurrence of the Compensation Event, less (c) any lost Toll Revenues that can reasonably be mitigated by the Concessionaire in accordance with the Concessionaire Agreement (excluding any mitigation of costs subtracted from Net Cost Impact for the same Compensation Event). New Lanes means the approximately fourteen-mile stretch of four new general-purpose traffic lanes (two lanes in each direction) to be constructed on the outer sides of the existing Capital Beltway, as more fully described in the Scope Document. Note means any promissory note of the Borrower payable to the Issuer and assigned to the Trustee in the aggregate principal amount of a loan and delivered to the Trustee pursuant to the related loan agreement evidencing the Borrower s repayment obligations thereunder; provided that there is no Note delivered pursuant to the TIFIA Loan Agreement. Notices of Proposed Issuer shall mean IRS Form 5701-TEB. Novation Confirmations has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Hedge Agreements. O&M Contractor has the meaning given to such term in Appendix C. O&M Reserve Fund means the Capital Beltway Funding Corporation of Virginia Project Operation and Maintenance Reserve Fund, a special fund with the Trustee under the Indenture. O&M Reserve Fund Contract means a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar instrument in favor of the Trustee procured by the Borrower in lieu of funding (in whole or in part) the O&M Reserve Fund. O&M Reserve Required Balance means the greater of (i) 25% of Operating Costs incurred in the previous year, and (ii) $7,500,000; provided, that the O&M Reserve Required Balance shall be reduced by any amounts on deposit in the Ramp-Up Reserve Fund but to a value no less than zero. One-Month LIBOR means the rate for deposits in U.S. dollars with a one-month maturity that appears on Reuters Screen LIBOR01 Page (or such other page as may replace that page on that service, or such other service as may be nominated by the British Bankers Association, for the purpose of displaying London interbank offered rates for U.S. dollar deposits) as of 11:00 A.M., London time, on the Rate Determination Date, except that, if such rate does not appear on such page on the Rate Determination Date, the One-Month LIBOR means a rate determined on the basis of the rates at which deposits in U.S. dollars for a one month maturity and in a principal amount of at least U.S. $1,000,000 are offered at approximately 11:00 A.M., London time, on the Rate Determination Date, to prime banks in the London interbank market by four major banks in the London interbank market (herein referred to as the reference banks ) selected by the Quotation Agent. The Quotation Agent is to request the principal London office of each of such reference banks to provide a quotation of its rate. If at least two such quotations are provided, the One-Month LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, the One-Month LIBOR will be the arithmetic mean of the rates quoted by three (if three quotations are not provided, two or one, as applicable) major banks in New York City, selected by the Quotation Agent, at approximately 11:00 A.M., New York City time, on the Rate Determination Date for loans in U.S. dollars to leading European banks in a principal amount of at least U.S. $1,000,000 having a one-month maturity. If the banks in New York City selected by the Quotation Agent are not then quoting rates for such loans, then the One-Month LIBOR for the ensuing LIBOR Interest Period will mean the One-Month LIBOR then in effect. Operating Agreement has the meaning given to such term in INTRODUCTION The Project. A-21

85 Operating Costs means all reasonable costs incurred and paid or payable by the Borrower in relation to the Project, including without limitation costs for operation and maintenance, consumables, payments under any lease, payments pursuant to the agreements for the management, operation and maintenance of the Project, taxes, premiums payable on any insurance, payments for oversight services, police services, costs for any security, payments to VDOT in accordance with Article V of the Comprehensive Agreement and for its share of positive revenue, and any other reasonable expense paid for the operations and maintenance of the Project; provided, that Operating Costs shall not include capital expenditures, Debt Service, the Redemption Price of any Bond, hedging obligations, Hedging Termination Obligations, any distribution, and any major maintenance, payments due under any Reimbursement Agreement, non-cash charges, such as depreciation, amortization or other bookkeeping entries of a similar nature or payments of debt service under any Loan Agreement. Operator or O&M Operator or Operating Company means Transurban (USA) Operations Inc., a Delaware corporation. Opinion of Counsel means a written legal opinion from a firm of attorneys experienced in the matters to be covered in the opinion. Original Hedge Agreements has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Hedge Agreements. Other Loan Documents has the meaning given to such term in Appendix F. Other Material Indebtedness means any other indebtedness of the Concessionaire in an aggregate principal amount equal to or greater than $250,000 under the Other Loan Documents. Outstanding means all Bonds that have been executed and delivered, except: (a) any Bond on which all Debt Service due or to become due on or before maturity has been paid; (b) any Bond on which the Redemption Price due or to become due has been paid in accordance with the redemption provisions applicable to such Bond; (c) Bonds in lieu of which other Bonds have been executed and delivered pursuant to the provisions of the Indenture relating to the transfer and exchange of Bonds or the replacement of mutilated, lost, stolen or destroyed Bonds; (d) cancellation; Bonds that have been canceled by the Trustee or that have been surrendered to the Trustee for (e) Bonds on which all Debt Service or the Redemption Price is due and for which the Trustee holds moneys sufficient to pay the Debt Service or Redemption Price for the benefit of the Owner thereof pursuant to the Indenture; and (f) Except as otherwise provided in any Supplemental Indenture, Bonds that have been defeased pursuant to the Indenture. Outstanding TIFIA Loan Balance means the aggregate principal amount drawn by the Concessionaire and then outstanding with respect to the TIFIA Loan, as determined in accordance with the TIFIA Loan Agreement. Owner Insurance means insurance obtained by the Concessionaire for the Project, details of which shall be certified by the Concessionaire on the Effective Date and which satisfies the requirements of the Comprehensive Agreement. Owners mean the registered owners of Bonds, including the Securities Depository, if any, or its nominee. A-22

86 PABs Issuer means the Issuer. PABs Sub-Account of the Construction Fund means the special account within the Construction Fund created under the First Supplemental Indenture, in which all amounts remaining on deposit in the Costs of Issuance Account after all Costs of Issuance have been paid or reimbursed shall be transferred to this account, except for amounts segregated to pay annual Trustee fees and rating agency fees during construction of the Project. Partially Subordinated Hedge means a Qualified Hedge agreement, the Hedging Termination Obligations of which are subordinate to the payment of principal and interest on Senior Lien Bonds and, other than Hedging Termination Obligations with respect to tax or illegality event, failure of the Borrower to pay Hedge Obligations or acceleration of the maturity of any Senior Lien Bond other than due to a failure to pay a Hedging Termination Obligation in respect of a Partially Subordinated Hedge, are subordinate to payments of principal and interest on the TIFIA Bonds; provided, that after the TIFIA Bonds are no longer outstanding, the Partially Subordinated Hedge will no longer be a Partially Subordinated Hedge. Participating Banks means the banks that have entered into a participation agreement with any of the Banks, whereby such Bank will allocate to the Participating Banks certain percentages of the payment obligations of the Borrower under the Reimbursement Agreement and any Bank Bonds and the funding obligations of such Bank under its Letter of Credit and the Reimbursement Agreement. Participation Agreement means the participating agreements where a Bank will allocate to the Participating Banks certain percentages of the payment obligations of the Borrower under the Reimbursement Agreement and any Bank Bonds and the funding obligations of such Bank under its Letter of Credit and the Reimbursement Agreement. Paying Agent has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS General. Payment Date means each Semi-Annual Payment Date or an Interim Payment Date. Permitted Disposals means (i) sales or other dispositions contemplated by or permitted under the Comprehensive Agreement and the other Material Project Documents, (ii) sales or other dispositions of surplus, damaged, obsolete, worn out or defective equipment or other property of the Borrower in the ordinary course of the Borrower's business for not less than fair market value, (iii) sales or other dispositions of equipment or other property of the Borrower in the ordinary course of the Borrower's business in exchange for or replaced by other equipment or property of at least comparable value and utility as determined in accordance with good operating practice, (iv) sales or other dispositions permitted under a Permitted Lien and (v) sales, transfers or other dispositions of Permitted Investments. Permitted Investments means: Cash (insured at all times by the Federal Deposit Insurance Corporation), Obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S. including: U.S. Treasury obligations, All direct or fully guaranteed obligations, Farmers Home Administration, General Services Administration, Guaranteed Title XI financing, Government National Mortgage Association (GNMA), State and Local Government Series; Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: Export-Import Bank, Rural Economic Community Development Administration, U.S. Maritime Administration, Small Business Administration, U.S. Department of Housing & Urban Development (PHAs), Federal Housing Administration, Federal Financing Bank; Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises; Medium-term notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subdivision shall be rated A or better by a nationally recognized rating service. Purchases of medium-term notes shall not include other instruments authorized by this section; U.S. dollar denominated deposit accounts, federal funds and bankers A-23

87 acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of P-1 by Moody s and A-1 or A-1+ by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); Commercial paper which is rated at the time of purchase in the single highest classification, P-1 by Moody s and A-1+ by S&P and which matures not more than 270 calendar days after the date of purchase; Investments in a money market fund rated AAAm or AAAm-G or better by S&P; Pre-refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and which are rated, based on an irrevocable escrow account or fund (the Escrow ), in the highest rating category of Moody s or S&P or any successors thereto; or (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A(2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; Municipal obligations rated Aaa/AAA or general obligations of states with a rating of A2/A or higher by both Moody s and S&P; Investment agreements or guaranteed investment contracts with any company or financial institution provided that such agreements or contracts, or the senior unsecured long term debt obligations of the issuer (or of any unconditional guarantor) are rated, at the time such agreements or contracts are entered into, in one of the two highest ratings categories (disregarding any gradations within such categories) and subject to the following downgrade conditions: Collateral levels must be 104% of the total principal deposited under the investment agreement for U.S. Treasury obligations, GNMA obligations and full faith and credit U.S. Government obligations and 105% of the total principal deposited under the investment agreement for Federal agency or United States government-sponsored enterprise obligations. The collateral must be held by a third party, segregated and marked to market at least weekly. Permitted Liens means, with respect to the Senior Loan Agreement and the Reimbursement Agreement, any (a) Security Interest contemplated in the Initial Project Financing Agreements; (b) Security Interest arising by operation of law in the ordinary course of business; (c) mechanic s, workmen s or any like lien or right of set-off arising in the ordinary course of business, securing or otherwise relating to Indebtedness which is not yet due or which is being contested or litigated in good faith and with respect to which reserves or security acceptable to the Trustee and each Credit Facility Provider with respect to the Senior Lien Bonds, in each case, acting reasonably, are in place; (d) Security Interest for Taxes, assessments or governmental charges which are not yet due or which are being contested or litigated in good faith and with respect to which reserves or security acceptable to the Trustee and the Instructing Controlling Party, in each case acting reasonably, are in place; and (e) the Trust Estate; and with respect to the TIFIA Loan Agreement, (a) Liens imposed pursuant to the TIFIA Loan Documents; (b) Liens imposed pursuant to the Senior Loan Documents; (c) Liens imposed by law for taxes that are not yet due or are being contested in compliance with the TIFIA Loan Agreement; (d) carriers, warehousemen s, mechanics, materialmen s, repairmen s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with the TIFIA Loan Agreement; (e) pledges and deposits made in the ordinary course of business in compliance with workers compensation, unemployment insurance and other social security laws or regulations; (f) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (g) judgment liens in respect of judgments that do not constitute an Event of Default under the TIFIA Loan Agreement; (h) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not A-24

88 materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Concessionaire or any Subsidiary; (i) any Lien existing on any property or asset prior to the acquisition thereof by the Concessionaire; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition, (ii) such Lien shall not apply to any other property or assets of the Concessionaire and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; (j) purchase money security interests in real property, improvements thereto or equipment hereafter acquired (or, in the case of improvements, constructed) by the Concessionaire, provided that (i) such security interests secure indebtedness for borrowed money permitted by the TIFIA Loan Agreement), (ii) such security interests are incurred, and the indebtedness secured thereby is created, within 90 days after such acquisition (or construction), (iii) the indebtedness secured thereby does not exceed the fair market value of such real property, improvements or equipment at the time of such acquisition (or construction) and (iv) such security interests do not apply to any other property or assets (other than accessions to such real property, improvements or equipment) of the Concessionaire; and (k) Liens securing indebtedness described in the TIFIA Loan Agreement. Permitted Securitization means any asset securitization pursuant to which the Concessionaire pledges, sells or otherwise transfers solely the Toll Revenues available for distribution to the holders of equity interests in the Concessionaire in accordance with the Concessionaire s governing instruments, senior Financing Assignments and the Comprehensive Agreement (with no other portion of the Revenues or Concessionaire s Interest encumbered thereby or subject to the exercise of remedies), in each instance so long as: (a) the issuance by the Concessionaire of any Concessionaire Debt related to the asset securitization is a Refinancing that is permitted hereunder, (b) pursuant to the agreements that govern the asset securitization, the Concessionaire s Interest is not subject to the exercise of remedies as a result of a default or other similar event relating to any other asset in the securitization pool or any payment default by the issuer or other obligor of the securitized debt or other instruments, and (c) the asset securitization documents conform to the limitations and restrictions set forth in the Comprehensive Agreement, respecting use and application of Revenues. Person means any individual (including, the heirs, beneficiaries, executors, legal representatives or administrators thereof), corporation, partnership, joint venture, trust, limited liability company, limited partnership, joint stock company, unincorporated association or other entity or a Governmental Authority. Pledged Membership Interests means the limited liability company interests in the Borrower and all options, warrants, and rights to purchase limited liability interests in the Borrower and all dividends, distributions, cash, securities, instruments and other property from time to time paid, payable or otherwise distributed in respect of or in exchange for all or any part of its limited liability company interests in the Borrower and all proceeds thereof, pledged by each Equity Participant pursuant to the Membership Interest Pledge Agreements and, from and after the TIFIA Loan Closing Date, the TIFIA Loan Agreement, in order to secure the payment in full when due of the Secured Obligations. PPTA has the meaning given to such term in INTRODUCTION The Project. Pre-Existing Hazardous Substances means any Hazardous Substance that was present on VDOT Existing ROW as of December 19, Principal Component has the meaning ascribed to such term in the Letters of Credit. Principal Payment Date means (a) with respect to Bonds, any date on which principal or maturity value (including the principal component of the Redemption Price due in connection with any mandatory sinking fund redemption is due, and (b) with respect to any Credit Facility, the date on which the Reimbursement Agreement relating to such Credit Facility requires the Borrower to reimburse the Credit Facility Provider for the payment of A-25

89 principal on Bonds under the Credit Facility, including, without limitation, the amount of any optional redemption that the Borrower is required to make under such Reimbursement Agreement is due. Project means the project undertaken pursuant to the terms of the Amended and Restated Comprehensive Agreement which will consist of (a) the financing, design, development, construction, expansion, reconstruction, installation and/or implementation of the following improvements: (i) four new general-purpose traffic lanes (two lanes in each direction) to be constructed on the outer sides of the existing lanes of the Capital Beltway Corridor and all related improvements thereon; (ii) the conversion of the existing four innermost lanes of the Capital Beltway Corridor (two in each direction) into High Occupancy Toll Lanes (HOT Lanes), including the installation of the electronic toll and traffic management facilities and systems necessary and appropriate for the operation of the such HOT Lanes (including Advanced Transportation Management System (ATMS) elements), and all other facilities and improvements required for the opening and operation of the HOT Lanes; (iii) the following access points to the HOT Lanes (the locations of which may be adjusted to facilitate operational needs and construction phases): Braddock Road, Gallows Road, Lee Highway, I-66 Interchange, Route 7, Westpark Boulevard, Jones Branch Drive and the Dulles Toll Road/Dulles Airport Access Road; (iv) the reconstruction of the following ramps, interchanges, frontage roads, overpasses, underpasses, bridges and other crossings necessary to accommodate the new general purpose lanes and the operation of the HOT Lanes: Braddock Road, Wakefield Park Pedestrian, Bridge, Route 236, Gallows Road, Arlington Boulevard (Rt. 50), Lee Highway (Rt. 29), I-66, W&OD Pedestrian Bridge, Idylwood Road, Oak Street, Route 7, Route 123, and the Dulles Toll Road/Dulles Airport Access Road, and Lewinsville Road; (v) Springfield Interchange Phase VIII; (vi) Phase I of Jones Branch shall be a four-lane connector roadway and structures connecting the HOT Lanes with Jones Branch Drive, which shall accommodate future expansion to six lanes and through traffic across the Capital Beltway to Route 123, in accordance with pertinent state and local design standards, and which shall constitute a part of the HOT Lanes Project; and (vii) all other improvements constructed pursuant to the Amended and Restated Comprehensive Agreement and enhancements to the HOT Lanes and/or the general-purpose lanes the Department determines are necessary to facilitate the operation of the HOT Lanes as intended by the Comprehensive Agreement, and (b) the operation, maintenance, and repair of the HOT Lanes Project in accordance with the Comprehensive Agreement. Project Agreement means any of the Comprehensive Agreement, the Design-Build Contract, the Corporate Guaranty, the Equity Funding Agreements, the Equity Funding Guaranties, any Development Contract, the Operating Agreement, the ETC Agreement, and the Independent Engineer Agreement, and the term Project Agreements means all such agreements and documents in the aggregate. Project Assets means the HOT Lanes together with the other assets to be constructed, maintained or held by the Concessionaire pursuant to the Comprehensive Agreement (or any applicable portion of such assets). Project Budget means the budget for the Project in the aggregate amount of $2,002,003,140 attached to TIFIA Loan Agreement as Schedule I showing a summary of all Eligible Project Costs and the estimated sources and uses of funds for the Project, as amended from time to time with the approval of the TIFIA Lender. Project Costs means the (a) costs paid or incurred (to the extent paid, such costs shall be reimbursed to the Person who paid such costs) or to be paid or incurred by the Borrower in connection with or incidental to the acquisition, design, construction, rehabilitation, equipping, operations and maintenance of the Project, including legal, administrative, engineering, planning, design, insurance, due diligence development and financing costs, including without limitation, the contract price of the Design-Build Contract, the amounts payable under the Operating and Support Services Agreement, amounts payable under all construction, engineering, technical and other contracts entered into by the Borrower in connection with performing its obligations under the Comprehensive Agreement and in accordance with the Financing Documents, all O&M Expenditures and Maintenance Capital Expenditures incurred prior to the Substantial Completion Date, Costs of Issuance, and any taxes, assessments or governmental charges payable by the Sponsors in connection with the Project; (b) payments when due (whether at the maturity of principal, the due date of interest, or upon optional or mandatory prepayment) on any indebtedness of the Borrower (other than the TIFIA Loan) incurred for the Project; and A-26

90 amounts, if any, required by any financing agreement to be paid into any fund or account upon the incurrence of any Senior Obligations; (c) costs of equipment and supplies and initial working capital and reserves required by the Borrower for the commencement of operation of the Project (and including funding the Construction Reserve Account, the Debt Service Reserve Account, the O&M Reserve Account and the Major Maintenance Reserve Account), including general administrative expenses and overhead of the Borrower other than to the extent such amounts constitute direct or indirect costs unallowable to the Borrower and its contractors under 48 C.F.R. Part 31; and (d) payments when due pursuant to the terms of any Project-related engagement or fee letter executed by the Borrower (including developer fees), and the repayment of obligations incurred by the Borrower, the proceeds of which obligations were used to pay items (a) through (d) of this definition. Project Enhancement Account means the concession payments account where the Department shall deposit all amounts received pursuant to the Comprehensive Agreement, with such amounts used to pay or finance costs of programs or projects reasonably related to or benefiting users of the Project and as otherwise permitted by applicable Law. Project Enhancements Enhancements. means, collectively, Borrower Project Enhancements and Department Project Project Right of Way means (a) all real property within the access control line for the Project including the HOT Lanes Right of Way and (b) all other right of way, including temporary and permanent easements, that is necessary for the performance of the Work. Purchase Date means (i) for a Bond in the Daily Mode or Weekly Mode, any Business Day selected by the beneficial owner of said Bond pursuant to the provisions of the First Supplemental Indenture, and (ii) any Mandatory Purchase Date. Purchase Drawing means a drawing against the Principal Component and the Interest Component of the Letter of Credit Amount under any Letter of Credit in respect of payment of the purchase price. Purchase Price has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Optional Tender. Purposes means (a) the optional redemption of a portion of the outstanding Bonds, (b) the reimbursement of the Banks and a proportional reduction of each of the Letters of Credit and (c) the partial termination of one or more of the Hedge Agreements, including the payment of Hedging Termination Obligations. Qualified Hedge means a contract with a Qualified Hedge Provider. Qualified Hedge Provider means, the Initial Hedge Providers and an entity, other than any Affiliate of any Member, whose senior long term obligations, other senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying ability, or whose payment obligations under an interest rate exchange agreement are guaranteed by an entity whose senior long term debt obligations, other senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying ability, are rated, at the time of execution of the Hedge Agreement at least as high as the second highest rating category of any rating agency then maintaining a rating for the Qualified Hedge Provider and which has acceded to the Intercreditor Agreement. Quotation Agent means Goldman, Sachs & Co., or, if Goldman, Sachs & Co. cannot perform the duties of a Quotation Agent set forth herein, such other quotation agent as may be designated by the Borrower. Ramp-up Reserve Fund means Capital Beltway Funding Corporation of Virginia Project Ramp-Up Reserve Fund, a special fund created with the Trustee under the Indenture. Ramp-Up Reserve Fund Contract means a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar instrument in favor of the Trustee procured by the Borrower in lieu of funding (in whole or in part) the Ramp-Up Reserve Fund. A-27

91 Rate Determination Date means any date on which the interest rate on Bonds shall be determined, which, (i) in the case of the Flexible Mode, shall be the first day of an Interest Period; (ii) in the case of the Daily Mode, shall be each Business Day commencing with the first day (which must be a Business Day) the Bonds become subject to the Daily Mode; (iii) in the case of the Weekly Mode, (A) each Wednesday or, if Wednesday is not a Business Day, then the Business Day next succeeding such Wednesday and (B) not later than the Business Day preceding a Conversion Date, a Substitution Date or a Mandatory Purchase Date specified in clause (viii) of the definition of Mandatory Purchase Date; (iv) in the case of the Term Rate Mode, shall be a Business Day no earlier than fifteen (15) Business Days and no later than the Business Day next preceding the first day of an Interest Period, as determined by the Remarketing Agent; (v) in the case of the LIBOR indexed mode, shall be date that is two (2) London banking days preceding the first day of each LIBOR interest period; and (vi) in the case of the Fixed Rate Mode, shall be a date determined by the Remarketing Agent which shall be at least one Business Day prior to the conversion date. Rating Category or Rating Categories means one of the generic rating categories of a Nationally Recognized Rating Agency without regard to any refinement or gradation of such rating by a numerical modifier or otherwise. Rebate Fund means the Capital Beltway Funding Corporation of Virginia Project Rebate Fund, a special fund with the Trustee under the Indenture. Record Date has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Interest on Series 2008 Non-AMT Bonds. Redemption Moneys has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Redemption Conditional Notices of Optional Redemption. Redemption Price means an amount equal to the principal of and premium, if any, and accrued interest, if any, on the Bonds to be paid on the redemption date. Refinancing means: (a) Any amendment, variation, novation or supplement of any Concessionaire Debt, Initial Project Financing Agreement or Financing Assignment that results in an increase of such Concessionaire Debt; (b) The issuance by Concessionaire of any Concessionaire Debt other than the Concessionaire Debt incurred pursuant to the Initial Project Financing Agreements, secured or unsecured, including issuance of any reimbursement agreement respecting a Letter of Credit; or (c) Any other arrangement put in place by Concessionaire or another person which has an effect similar to clause (a) or (b) above, excluding, however any capitalization of interest or accretion of principal or other committed increases on any Concessionaire Debt incurred or committed on or prior to the Closing Date. Reimbursable Tax Imposition has the meaning given to such term in Appendix C. Reimbursement Agreement means (a) the Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of December 14, 2010, amended by Amendment No. 1 to Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of June 5, 2014, as it may be amended or supplemented, and (b) with respect to the Indenture, any agreement or agreements between the Borrower and/or the Issuer and any Credit Facility Provider or Liquidity Facility Provider, as applicable. Remarketing Proceeds Account shall mean a separate account maintained with the Tender Agent where, upon the receipt of the proceeds of a remarketing of a Bond on the date such bond is to be purchased, the Tender Agent shall deposit such proceeds in the account for application to the Purchase Price of the Bonds. Remarketing Agent has the meaning given to such term in INTRODUCTION The Series 2008 Non-AMT Bonds. A-28

92 Remarketing Agreement means the Remarketing Agreement, dated as of December 14, 2010, between the Borrower and the Remarketing Agent, as it may be amended or supplemented from time to time in accordance with its terms. Required Banks means, at any time, those Banks whose aggregate percentage share of the Total Exposure equals or exceeds the Required Percentage of the Total Exposure. Required Percentage means (a) if (i) any one Bank's percentage share (excluding from the calculation of such share any interest in the Total Exposure with respect to which such Bank has assigned the right to vote as a Bank under this Agreement pursuant to a Participation Agreement acknowledged by the Borrower and the Bank Agent) of the Total Exposure equals or exceeds 35% of the Total Exposure, or (ii) any one Bank's percentage share (without excluding from the calculation of such share any such assignments referred to in the parenthetical in clause (a) above) of the Total Exposure equals or exceeds 55% of the Total Exposure; and (b) 66 2/3%, if clause (a) above does not apply. Reserved Rights means amounts payable to the Issuer under the Senior Loan Agreement (including, but not limited to, certain costs and fees of the Issuer and indemnification payments owed to the Issuer) and any amounts so specified in any other Loan Agreement. Revenue Fund means the Capital Beltway Funding Corporation of Virginia Project Revenue Fund, a special fund with the Trustee under the Indenture. Revenue Stabilization Reserve Fund means the Capital Beltway Funding Corporation of Virginia Project Revenue Stabilization Reserve Fund, a special fund with the Trustee under the Indenture. Revenue Stabilization Reserve Fund Contract means a surety bond, insurance policy, letter of credit, investment agreement, investment contract or similar instrument in favor of the Trustee procured by the Borrower in lieu of funding (in whole or in part) the Revenue Stabilization Reserve Fund. Revenues has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS The Revenues and the Trust Estate. Rule 15c2-12 means Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. Part 240, c2-12). SAFETEA-LU has the meaning given to such term in PROJECT OPERATIONS Tolling on the 495 Express Lanes General. Safety Compliance Order means (a) any written order or directive of the Department issued after the date of the Comprehensive Agreement, which directs the Borrower to undertake certain improvements to the HOT Lanes Project to correct a specific safety condition affecting the HOT Lanes Project, which the Department has determined to exist by investigation or analysis, or (b) to conform to changes in safety standards or methodologies agreed to or adopted by the Department for similar portions of the highways in the Commonwealth. Scheduled Debt Service means, with respect to any Payment Date occurring during any Payment Period, the principal portion of the Outstanding TIFIA Loan Balance scheduled to be paid on such Payment Date as shown on the Loan Amortization Schedule and/or the portion of interest thereon scheduled to be paid on the Outstanding TIFIA Loan Balance on such Payment Date in accordance with the TIFIA Loan Agreement, but, in each case, required to be paid on such Payment Date only upon satisfaction of the condition specified in the TIFIA Loan Agreement. Scope Document is the scope document attached to the Comprehensive Agreement. Second Supplemental Indenture means the Amended and Restated Second Supplemental Indenture of Trust, by and between the Issuer and the Trustee, dated as of June 1, A-29

93 Secured Parties means each Owner, the Trustee, any Credit Provider or Liquidity Provider, the Initial Hedge Providers, any Qualified Hedge Provider under a Hedge Agreement entered into pursuant to a Loan Agreement and upon the occurrence of a Bankruptcy Related Event and subject to the Intercreditor Agreement, the TIFIA Bondholder. Security Agreement means the Security Agreement, dated as of June 1, 2008, between the Concessionaire and the Trustee, as it may be amended or supplemented, and any other Security Agreement entered into in connection with a Loan Agreement. Security Documents means the Indenture, the Senior Security Documents, the Security Agreement, the Pledge Agreements, the Memorandum and Assignment Agreement, each Control Agreement and each other document or instrument from time to time pursuant to which a lien or security interest is granted or perfected. Securities Depository means The Depository Trust Company. Security Interest means any mortgage, pledge, hypothecation, assignment in security, mandatory deposit arrangement, encumbrance, lien (statutory or otherwise) or other security interest, any conditional sale or other title retention agreement or any financing lease having substantially the same effect as any of the foregoing. Semi-Annual Payment Date means the last Business Day of each June and December in each year, commencing with the Debt Service Payment Commencement Date. Senior Debt Service Coverage Ratio means, for any Calculation Period, the ratio of (a) Net Cash Flow to (b) Debt Service on Senior Indebtedness for such Calculation Period. Senior Hedges has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Hedging Requirements. Senior Indebtedness means as at any date, the Series 2008 Senior Lien Bonds, any Additional Senior Indebtedness incurred as at such date and (on the occurrence and during the continuation of a Bankruptcy Related Event only) any TIFIA Bonds held by the TIFIA Bondholder. Senior Interest Payment means, with respect to a payment date, (a) the interest (including the interest component of the Redemption Price due in connection with any mandatory sinking fund redemption) due on such date on the Senior Lien Bonds, (b) Credit Facility Provider Liabilities, with respect to a Credit Facility relating to Senior Lien Bonds to the extent that it represents a reimbursement for the payment of interest (including the interest component of the Redemption Price due in connection with any mandatory sinking fund redemption) on Senior Lien Bonds, and (c) Hedging Obligations under a Senior Hedge Agreement. Senior Lender means collectively the financial institution or institutions or Governmental Authority (or any agent or trustee acting on behalf of any of the foregoing) providing the Senior Loan under the Senior Loan Agreement, initially the Borrower/Issuer. Senior Lien Bond Principal Account means the Capital Beltway Funding Corporation of Virginia Project Senior Lien Bonds Principal Account, a special fund created by the Trustee within the Debt Service Fund. Senior Lien Bonds means the Bonds designated as such by any supplemental Indenture. Senior Lien Bonds Interest Account means the Capital Beltway Funding Corporation of Virginia Project Senior Lien Bonds Interest Account, a special fund created by the Trustee within the Debt Service Fund. Senior Lien Bonds Debt Service Account means the Senior Lien Bonds Interest Account and the Senior Lien Bonds Principal Account. Senior Loan Agreement means the Loan Agreement between the Issuer, the Borrower and the Trustee, dated as of June 1, 2008, executed in connection with the issuance of the Series 2008 Senior Lien Bonds, as amended by the First Amendment to Loan Agreement, dated as of December 1, 2010, and the Waiver and Consent to Loan Agreement, dated as of June 5, 2014, and any further amendment or supplement thereto. A-30

94 Senior Loan Documents means the Initial Senior Loan Agreement, the Indenture, any other Senior Loan Agreement hereafter entered into by the Concessionaire, the Senior Security Documents, any agreements and documents executed by the Concessionaire in connection with hedging arrangements entered into pursuant to or in connection with any Senior Loan Agreement, and all other agreements, instruments and documents executed and delivered pursuant or in connection with any of the foregoing. Senior Principal Payments means, with respect to a payment date, (a) the principal or maturity value (including the principal component of the Redemption Price due in connection with any mandatory sinking fund redemption) due or to become due prior to the next succeeding Interest Payment Date, and (b) Credit Facility Provider Liabilities, due or to become due on the next succeeding payment date, with respect to a Credit Facility securing Senior Lien Bonds to the extent that it represents a reimbursement for the payment of principal or maturity value (including the principal component of the Redemption Price due in connection with any mandatory sinking fund redemption). Senior Secured Parties means each owner of a Senior Lien Bond, the Trustee, any Credit Facility Provider or Liquidity Facility Provider with respect to any Senior Lien Bonds, the Initial Hedge Providers (as defined in the Indenture), any provider of a Senior Hedge agreement entered into pursuant to a Loan Agreement and, upon the occurrence and during the continuation of a Bankruptcy Related Event and subject to the terms of the Intercreditor Agreement, the TIFIA Bondholder. Senior Secured Parties has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS The Revenues and the Trust Estate. Series means any Bonds designated as a separate series in a Supplemental Indenture and any Bonds authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Indenture or any Supplemental Indenture. Series 2008 A Bonds means the Issuer s Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008A, issued pursuant to the First Supplemental Indenture in the total aggregate principal amount of $300,000,000. Series 2008 B Bonds means the Issuer s Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008B, issued pursuant to the First Supplemental Indenture in the total aggregate principal amount of $114,000,000. Series 2008 B Letter of Credit has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT The Letters of Credit. Series 2008 C Bonds means the Issuer s Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008C, issued pursuant to the First Supplemental Indenture in the total aggregate principal amount of $100,000,000. Series 2008 C Letter of Credit has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT The Letters of Credit. Series 2008 D Bonds means the Issuer s Senior Lien Multi-Modal Toll Revenue Bonds (I-495 HOT Lanes Project), Series 2008D, issued pursuant to this First Supplemental Indenture in the total aggregate principal amount of $75,000,000. Series 2008 D Letter of Credit has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT The Letters of Credit. Series 2008 Non-AMT Bonds has the meaning given to such term in INTRODUCTION General. Series 2008 Refunded Bonds has the meaning given to such term in INTRODUCTION The Series 2008 Non- AMT Bonds. A-31

95 Series 2008 Senior Lien Bonds means (a) until the issuance of the Series 2008 Non-AMT Bonds, the Series 2008 Refunded Bonds and (b) thereafter, the Series 2008 Non-AMT Bonds or any Bonds authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Indenture or any Supplemental Indenture. Series A Banks has the meaning given to such term in INTRODUCTION The Series 2008 Non-AMT Bonds. Series B Bank has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. Series C Bank has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. Series D Bank has the meaning given to such term in INTRODUCTION The Banks and the Letters of Credit. Series Issues Date means the date that the Bonds are issued. Service Commencement Date means the first date on which all of the conditions set forth in the Comprehensive Agreement have been satisfied and the Department has issued a Service Commencement Notice. Service Commencement Notice means a written notice from the Department that the conditions to service commencement have been satisfied under the Comprehensive Agreement, including issuance of the Substantial Completion certificate, among other things. Shared Facilities means, collectively, the equipment used for the toll and traffic management system of the 495 Express Lanes, common-use areas of the Express Operations Center and new toll and traffic management equipment to be added in connection with construction of the I-95 Express Lanes Project. Shared Facilities Agreement means the Shared Facilities Agreement, dated as of July 31, 2012, by and between the Company and the I-95 Concessionaire, as it may be amended or supplemented. Shared Facilities Operator means Transurban (USA) Operations, Inc. or any replacement thereof pursuant to the terms of the Shared Facilities Agreement. Shared Services means certain services related to the Shared Facilities performed by the Operating Company pursuant to the Operating Agreement. Shared Services Reserve Fund means the Shared Services Reserve Fund, a special fund created with the Trustee under the Fifth Supplemental Indenture. SIFMA Municipal Swap Index of Municipal Market Data means the Securities Industry and Financial Markets Association Munisicial Swap Index, produced by Municipal Market Data, which is a 7-day high-grad market index comprised of tax-exempt VRDOs from Muncipal Market Data s extensive database. Significant Force Majeure Event has the meaning given to such term in Appendix C. Sixth Supplemental Indenture means the Sixth Supplemental Indenture of Trust, by and between the Issuer and the Trustee, dated as of June 5, Springfield Interchange means the I-495/I-95/I-395 junction. Springfield Interchange Phase VIII means construction of HOV connector ramps from I-95 and I-395 to the Capital Beltway. The limits of construction extend approximately 6,000 feet east and west along the Capital Beltway connecting I-95 to I-495 and approximately 1,500 feet north and south from I-95 to I-395. The project includes seven bridges, bi-directional ramps and loops to connect the I-95/395 HOV system to the Capital Beltway. State Police means the Virginia State Police. Subordinate Lien Bonds means the Bonds designated as such by any supplemental Indenture. Subordinate Lien Bonds Interest Account means the Interest Account created by and designated as such in the Indenture. Subsequent Qualified Hedge means any Qualified Hedge entered into subsequent to the initial Qualified Hedges. A-32

96 Substantial Completion means completion of the Work of the Project, the New Lanes or, in the Department s sole discretion pursuant to the Comprehensive Agreement, certain segments of the Project, in accordance with the Design-Build Contract, the Design Documentation (as defined in the Comprehensive Agreement) and the Construction Documentation (as defined in the Comprehensive Agreement), subject only to punch list items, so that Department (or in the case of the HOT Lanes, the Concessionaire) can occupy and use the Project, and that the Department and the public (traveling and general) will have full and unrestricted use and benefit of the Work, from both an operational and safety standpoint, with only minor incidental Work remaining to be performed, corrected or repaired, as confirmed by the Department s issuance of a Substantial Completion Certificate in accordance with the Comprehensive Agreement, subject to agreement by the Department and the Concessionaire upon a punch list. Substantial Completion Certificate means a letter or certificate issued by the Department evidencing the Department s determination that Substantial Completion has occurred. Substantial Completion Date means the date on which Substantial Completion was achieved. Substituted Concessionaire has the meaning given to such term in Appendix C. Substitution Date means the date upon which an Alternate Credit Facility or Alternate Liquidity Facility is scheduled to be substituted for the Credit Facility or Liquidity Facility then in effect. Supplemental Indenture means any indenture supplementing or amending the Indenture that is adopted pursuant to the Indenture. SWaM has the meaning given to such term in Appendix C. Technical Requirement Revisions means the adoption by the Department, through revisions to existing manuals and publications or new manuals and publications, changes, deletions, supplements or other modifications to the Technical Requirements, after the Closing Date. Technical Requirements means the Technical Requirements attached to the Comprehensive Agreement, as the same may be revised by any Technical Requirement Revisions. Tender Agent has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Conversion of Series 2008 Non-AMT Bonds to Other Modes. Tender Notice means a notice delivered by electronic means or in writing that states (i) the principal amount of such Bond to be purchased pursuant to the First Supplemental Indenture, (ii) the Purchase Date on which such Bond is to be purchased, (iii) applicable payment instructions with respect to the Bonds being tendered for purchase and (iv) an irrevocable demand for such purchase. Term Out Cash Sweep Fund means the Capital Beltway Funding Corporation of Virginia Project Term Out Cash Sweep Fund, a special fund created with the Trustee under the Fourth Supplemental Indenture. Term Out Date has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Bank Bonds. Term Out Payments has the meaning given to such term in THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENT Bank Bonds. Term Out Rate means the fluctuating rate per annum equal to One-Month LIBOR plus a percentage margin set forth in the Reimbursement Agreement. Term Rate means the per annum interest rate for the Bonds in the Term Rate Mode determined in the manner and at the times as follows: no later than 4:00 PM on the applicable Rate Determination Date, the Remarketing Agent shall determine the Fixed Rate as the minimum interest rate which, in the sole judgment of the Remarketing Agent, will result in a sale of the Bonds at a price equal to the principal amount thereof on the Rate Determination Date. A-33

97 Term Rate Mode means the Interest Rate Mode during which the Bonds bear interest at the Term Rate. Termination Event means any event or condition that occurs under the Comprehensive Agreement which would either immediately or, following the applicable cure period or the giving of notice or both, enable the Department to terminate or suspend its obligations under the Comprehensive Agreement. The Department shall not terminate the Comprehensive Agreement until it first gives written notice of such Termination Event to the Collateral Agent, and provides the Collateral Agent a reasonable opportunity to cure such Termination Event. Third Supplemental Indenture means the Third Supplemental Indenture of Trust, by and between the Issuer and the Trustee, dated as of March 17, TIFIA means the Transportation Infrastructure Finance and Innovation Act of 1998, as amended. TIFIA Bondholder has the meaning given to such term in INTRODUCTION The TIFIA Loan. TIFIA Bonds means the Subordinate Lien Bonds issued pursuant to the Second Supplemental Indenture of Trust. TIFIA Debt Service means, for any period, the sum (without duplication) of the Mandatory Debt Service and Scheduled Debt Service for such period (in each case whether or not any of such amounts were actually paid for such period and whether or not, in the case of Scheduled Debt Service, such amount was actually required to be paid for such period under the TIFIA Loan Agreement. TIFIA Lender means USDOT, acting by and through the Administrator, and its successors and assigns, who is providing funds for the TIFIA Loan, as owner of the TIFIA Bond. TIFIA Loan means the secured loan from the TIFIA Lender with proceeds of the TIFIA Bond to the Borrower/Issuer on behalf of the Concessionaire under the TIFIA Loan Agreement. TIFIA Loan Agreement means the Amended and Restated TIFIA Loan Agreement, dated as of June 1, 2008, by and among USDOT, acting by and through the FHWA, the Issuer and the Borrower in connection with the issuance of the TIFIA Bonds, as it may be amended or supplemented. TIFIA Loan Closing Date means June 1, TIFIA Loan Document or Documents means the TIFIA Loan Agreement, the TIFIA Bond, the Security Documents and the Indenture. TIFIA Loan Life Coverage Ratio means, as of each applicable Calculation Date, the ratio of (a) the sum (without duplication) of: (i) the present value of (A) all projected future Net Cash Flow available after payment of all projected future Debt Service of the Concessionaire (including by cash sweep, if applicable, to pay Debt Service on the Senior Lien Bonds, but excluding TIFIA Debt Service) from such Calculation Date looking forward to the Final Maturity Date for the TIFIA Loan, minus (B) the amount of federal or state income tax payable by the Concessionaire during such period, with both (A) and (B) discounted at the TIFIA interest rate, using updated Base Case Projections, adjusted to take into account actual results and updated Revenue and traffic projections (which projections shall be determined in accordance with the Calculations and Forecasting Agreement), and with the Base Case Projections updated to make allowance for Debt Service in connection with Additional Senior Loans, plus (ii) any balances credited to the TIFIA Sinking Fund as of such Calculation Date (or, in the case of any future Calculation Date, projected to be credited as of such date), to (b) the Outstanding TIFIA Loan Balance, plus accrued interest thereon on such Calculation Date (or, in the case of any future Calculation Date, projected to be outstanding, together with interest due thereon, as of such date). TIFIA Scheduled Principal has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Flow of Funds. TIFIA Sinking Fund means the Capital Beltway Funding Corporation of Virginia Sinking Fund, a special fund created with the Trustee under the Indenture. A-34

98 TIFIA Sub-Account of the Construction Fund means the Capital Beltway Funding Corporation of Virginia Sub-Account, a special fund created with the Trustee within the Construction Fund under the Second Supplemental Indenture. Toll Revenues has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS The Revenues and the Trust Estate. Total Debt Service Coverage Ratio means, for any Calculation Period, the ratio of (a) Net Cash Flow to (b) Debt Service on Senior Indebtedness for such Calculation Period, plus Mandatory Debt Service on TIFIA Bonds for such Calculation Period; provided that, for purposes of such calculation during the Capitalized Interest Period, the TIFIA Debt Service shall be deemed to be zero. Total Exposure means the sum of (i) the Aggregate Unreimbursed LC Drawings, plus (ii) the aggregate undrawn exposure under the Letters of Credit. Total Invested Project Funds means (a) all documented fees, costs and expenses incurred by the Concessionaire or its Affiliates on or after August 25, 2004 and paid by the Concessionaire or its Affiliates in connection with the investigation, development, negotiation, and closing of the transactions described in the Agreement; (b) all capital contributions or debt advances made by the members of the Concessionaire or its Affiliates on or after the Closing Date; and (c) all Concessionaire Debt incurred by the Concessionaire on or after the Closing Date (other than (i) capital contributions, debt advances or Concessionaire Debt incurred or used directly or indirectly to fund Distributions or to reimburse the Concessionaire or its Affiliates for amounts referred to in the foregoing clause (a) or (ii) any Refinancing to the extent that it does not increase the principal amount of Concessionaire Debt then outstanding, provided, that capital contributions, debt advances or Concessionaire Debt deposited to reserves and potentially available directly or indirectly to fund Distributions shall be included as Total Invested Project Funds when paid, contributed, incurred or received, as the case may be, and any such amounts released from reserves to fund Distributions shall be included as a revenue for purposes of the calculation of Net Cash Flow). Total Refinancing means a refinancing of the credit support for the Series 2008 Senior Lien Bonds such that all Reimbursement Obligations are paid in full, the exposure of each Bank under its Letter of Credit is reduced to zero and any other amount payable by the Borrower to the Banks or the Bank Agent under this Agreement has been paid in full. Total Return on Investment or TRI means as of any date after the Closing Date, the rate (rounded up, if necessary, to a whole multiple of 1/1000 of 1%) that should be used to discount the sum of the Total Invested Project Funds and Net Cash Flows (calculated from the respective dates on which Total Invested Project Funds and Net Cash Flows are paid, contributed, incurred, or received as the case may be) so that the sum of the then discounted Total Invested Project Funds and Net Cash Flows as at the Closing Date is zero. Transfer Date has the meaning given to such term in SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Flow of Funds. Transportation Management Plan has the meaning given to such term in Appendix D. Transurban means Transurban Group. Transurban DRIVe has the meaning given to such term in INTRODUCTION The Borrower. Transurban Express has the meaning given to such term in INTRODUCTION The Borrower. Trust Estate means the property and rights granted to the Trustee as follows: (a) all right, title and interest of the Issuer in and to each Loan Agreement (except for Reserved Rights), each Note and any Security Interest granted to the Issuer in respect of the foregoing under the Collateral Documents or otherwise, and the present and continuing right of the Issuer to make claim for, collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable or receivable under each Loan Agreement and each Note, to bring actions and proceedings thereunder or for the A-35

99 enforcement thereof, and to do any and all things which the Issuer is, or may become, entitled to do under each Loan Agreement and each Note; (b) all moneys from time to time held by the Trustee under the Indenture in any Fund or Account and, as to the Senior Lien Bonds only, the Debt Service Reserve Fund and funds deposited from time to time and earnings thereon in the PABs Sub-Account of the Construction Fund, and, as to the TIFIA Bonds only, the TIFIA Sinking Fund and funds deposited from time to time and earnings thereon in the TIFIA Sub-Account of the Construction Fund, other than (i) the Rebate Fund, (ii) any Defeasance Escrow Account, (iii) the Department Funding Account, (iv) the Project Enhancement Account (as defined in the Amended and Restated Comprehensive Agreement), and (v) any Fund or Account created by a Supplemental Indenture that is expressly excluded from the Trust Estate; (c) unless otherwise provided in a Supplemental Indenture as to the Senior Lien Bonds only, the rights to amounts payable to the Issuer or the Trustee under any Credit Facility or Liquidity Facility; (d) the rights to amounts payable to the Issuer, the Borrower or the Trustee pursuant to any Hedge Agreement under which payments by the Issuer or the Borrower are treated as Debt Service on the Bonds pursuant to the definition of Debt Service in Appendix A; and (e) any and all other property, revenues, rights or funds from time to time hereafter by delivery or by writing of any kind specially granted, assigned or pledged as and for additional security for any of the Trust Estate Secured Obligations in favor of the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof, any Supplemental Indenture and the terms of the Intercreditor Agreement. Trust Estate Secured Obligations means all present and future obligations and liabilities (whether actual or contingent and whether owned, jointly or severally, or in any other capacity whatsoever) of the Issuer or the Borrower to any Secured Party under or in connection with any Finance Document. Trustee means Wells Fargo Bank, National Association. Unremarketed Bonds Rate has the meaning given to such term in THE SERIES 2008 NON-AMT BONDS Interest on Series 2008 Non-AMT Bonds. USDOT has the meaning given to such term in INTRODUCTION The TIFIA Loan. Variable Interest Rate means a variable interest rate to be borne by any Permitted Debt. The method of computing such variable interest rate shall be specified in the Indenture or the Senior Loan Agreement pursuant to which such Permitted Debt is incurred. Such Indenture or Senior Loan Agreement shall also specify either (i) the particular period or periods of time for which each value of such variable interest rate shall remain in effect or (ii) the time or times upon which any change in such variable interest rate shall become effective. VDOT means the Virginia Department of Transportation. VDOT Existing ROW means the property owned as of December 19, 2007 by the Department within the Project Right of Way. Waiver and Consent has the meaning given to such term in Appendix F. Weekly Mode means the Interest Rate Mode during which the Bonds bear interest at the Weekly Rate. Weekly Rate Period means the period during which a Bond in the Weekly Mode shall bear a Weekly Rate, which shall be the period commencing on Thursday of each week to and including Wednesday of the following week, except (i) if the Bonds are issued in the Weekly Mode, in which case the first Weekly Rate Period shall be from the initial issuance of the Bonds to and including the Wednesday of the following week, (ii) in connection with a conversion to the Weekly Rate, in which case the first Weekly Rate Period shall be from the Conversion A-36

100 Date to and including the Wednesday of the following week, (iii) in the case of a Substitution Date or Mandatory Purchase Date specified in clause (viii) of the definition of Mandatory Purchase Date, in which case the Weekly Rate Period prior to the Substitution Date or such Mandatory Purchase Date shall end on the day before the Substitution Date or such Mandatory Purchase Date and a new Weekly Rate Period shall commence on the Substitution Date or such Mandatory Purchase Date and end on the Wednesday of the following week and (iv) in connection with a conversion from the Weekly Mode, the last Weekly Rate Period shall end on the day next preceding the Conversion Date. Weekly Rates means the per annum interest rate on the Bonds in the Weekly Mode established by the Remarketing Agent at 4:00 PM on each Rate Determination Date. Work means: (a) during the Work Period, all of the work required to be furnished and provided by or on behalf of the Concessionaire under this Agreement, including all administrative, design, engineering, real property acquisition support services, occupant relocation, construction, Utility Relocations, utility accommodation, procurement, supply, installation, testing, verification, labor, materials, equipment, construction management services, documentation and other duties and services, except for those efforts which this Agreement expressly specifies will be performed by persons other than the Concessionaire or the Design-Build Contractor; and (b) during the Operating Period, all of the work required to be furnished and provided by the Concessionaire pursuant to this Agreement, including Major Maintenance work. Work Commencement Approval shall mean satisfaction or waiver by the Department in writing of the following conditions precedent: (a) the Initial Project Financing Agreements shall have been executed and delivered by the parties thereto in substantially the forms attached to the Comprehensive Agreement; (b) the Concessionaire and the Design-Build Contractor shall have executed and delivered the Design-Build Contract in substantially the form attached to the Comprehensive Agreement, the Contractor Guarantor shall have executed and delivered the Completion Guaranty, and the Concessionaire shall have delivered the Initial Baseline Schedule to the Department; Work; (c) there exists no court order which restrains, enjoins, challenges or delays performance of the (d) all representations and warranties of the Concessionaire set forth in the Comprehensive Agreement remain true in all material respects; and (e) there exists no uncured Concessionaire Default for which the Concessionaire has received notice from the Department. Work Period means the period commencing on the date on which the Department grants its Work Commencement Approval pursuant to the Comprehensive Agreement through the Final Acceptance Date. A-37

101 APPENDIX B INFORMATION ABOUT THE LETTER OF CREDIT BANKS

102 The Bank of Nova Scotia ( Scotiabank or the Bank ), founded in 1832, is a Canadian chartered bank with its principal office located in Toronto, Ontario. Scotiabank is one of North America s premier financial institutions and Canada s most international bank. With over 83,000 employees, Scotiabank and its affiliates serve over 21 million customers in more than 55 countries around the world. Scotiabank offers a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking, through its network of branches located in all Canadian provinces and territories. Outside Canada, Scotiabank has branches and offices in over 55 countries and provides a wide range of banking and related financial services, both directly and through subsidiary and associated banks, trust companies and other financial firms. For the fiscal year ended October 31, 2013, Scotiabank recorded total assets of CDN$743.8 billion (US$717.1 billion) and total deposits of CDN$516.6 billion (US$498.0 billion). Net income for the fiscal year ended October 31, 2013 equaled CDN$6.697 billion (US$6.456 billion), compared to CDN$6.466 billion (US$6.233 billion) for the prior fiscal year. Amounts above are shown in Canadian dollars and also reflect the United States dollar equivalent as of October 31, 2013 ( United States dollar equals Canadian dollars). For the quarter ended April 30, 2014, Scotiabank recorded total assets of CDN$791.8 billion (US$730.2 billion) and total deposits of CDN$551.7 billion (US$508.8 billion). Net income for the quarter ended April 30, 2014 equaled CDN$1.800 billion (US$1.660 billion), compared to CDN$1.582 billion (US$1.459 billion) for the same period of the prior year. Amounts above are shown in Canadian dollars and also reflect the United States dollar equivalent as of April 30, 2014 ( United States dollar equals Canadian dollars). Scotiabank will provide to anyone, upon written request, a copy of its most recent annual report, as well as a copy of its most recent quarterly financial report. Requests should be directed to: The Bank of Nova Scotia, New York Agency, One Liberty Plaza, 26 th Floor, New York, NY, The information concerning the Bank contained herein is furnished solely to provide limited introductory information regarding the Bank and does not purport to be comprehensive. Such information is qualified in its entirety by the detailed information appearing in the documents and financial statements referenced above. The delivery of this disclosure information by the Bank shall not create any implication that there has been no change in the affairs of the Bank since the date hereof, or that the information contained or referred to in this disclosure information is correct as of any time subsequent to its date. B-2

103 NATIONAL AUSTRALIA BANK LIMITED National Australia Bank Limited ( NAB ) is registered in the State of Victoria with Australian Business Number NAB was incorporated on 23 June NAB is a public limited company incorporated in the Commonwealth of Australia and it operates under Australian legislation including the Corporations Act 2001 of Australia. Its registered office is Level 1, 800 Bourke Street, Docklands, Victoria 3008, Australia (telephone number ). NAB and its controlled entities ( NAB Group ) is an international financial services group, providing a comprehensive and integrated range of financial products and services, with over 12,400,000 customers and 42,000 full time equivalent employees, operating more than 1,800 stores and service centres globally. The NAB Group s major financial services franchises are in Australia, but it also operates businesses in New Zealand, Asia, the United Kingdom and the United States. As at the date hereof, NAB has four whollyowned main operating subsidiaries: the Bank of New Zealand, MLC Limited, Clydesdale Bank PLC and Great Western Bank. The principal activities of the NAB Group are banking services, credit and access card facilities, leasing, housing and general finance, international banking, investment banking, wealth management, funds management, life insurance, and custodian, trustee and nominee services. In Australia, the NAB Group provides a comprehensive range of financial products and services to all customer segments. In New Zealand, the NAB Group provides retail, business, agribusiness, corporate, private banking, wealth and insurance products and services, operating under the Bank of New Zealand brand. In the United Kingdom, the NAB Group offers a range of banking services for personal and business customers through retail branches, business banking centers, direct banking and brokers, operating under the Clydesdale Bank and Yorkshire Bank brands. In the United States, the NAB Group provides a range of retail, commercial, agribusiness and wealth management banking services through Great Western Bank, which operates across the mid-western United States. As at March 31, 2014, the NAB Group held AUD 846 billion of total assets. On a statutory basis, the net profit of the NAB Group attributable to members for the six months ended March 31, 2014 was AUD 2.86 billion. More detailed information in respect of the NAB Group, including its financial statements and the notes thereto, are contained in the most recently published Annual Financial Report of NAB from time to time, which can be obtained by contacting NAB at the following address: National Australia Bank Limited, Level 1, 800 Bourke Street, Docklands, Victoria 3008, Australia; Attention: Company Secretary. Telephone requests may be directed to (+61-3) The information concerning the NAB Group contained herein is of a summary nature only and does not purport to be comprehensive or complete. NAB makes no representation that the information contained herein is correct as of any time subsequent to the date hereof. B-3

104 BANCO ESPÍRITO SANTO, S.A. Banco Espírito Santo, S.A. ( BES ) is a bank incorporated in Portugal (with registered number ) on 26th September, 1990 for an unlimited duration and with limited liability (sociedade anόnima). BES, together with its consolidated subsidiaries (the BES Group ), had total net consolidated assets as of 31st December, 2013 of Euro 80.6 billion, and the second largest private-sector bank in Portugal by total assets. As of 31st December, 2013, the BES Group s consolidated net loan portfolio totaled Euro 46.3 billion and, net of loan impairment provisions, represented 57.5 percent of its total net consolidated assets. The BES Group develops its banking activity, providing a universal range of financial services with the fundamental goal of creating value for its shareholders while simultaneously meeting the needs of clients and employees, all framed by its overall duty of social responsibility. The BES Group Offers a full range of banking and financial services, including taking deposits, lending, asset management, sale of life and non life insurance, leasing and factoring, investment banking and brokerage services. As of 31st December, 2013, the BES Group operated 788 branches and 28 private banking centres and 37 corporate banking centres and employed 10,216 people worldwide. Since its privatisation, BES has followed a clear and consistent strategy of organic growth in its domestic market (where its share has increased from 8.5% in 1992 to 19.5% in 2013), which has benefited from the development of a market approach based on a multi-specialist model. An organic growth strategy based on solid brand recognition and strong commercial dynamics have made BES a leading financial institution in the domestic market and in particular in the corporate segment where it holds a 25.5% market share as at December Complementing its domestic operations, the BES Group has a targeted international focus on countries with cultural and economic affinities with Portugal, such as Spain, Angola and Brazil. The know-how developed in the domestic market in corporate banking, investment banking and private banking allows the BES Group to export its skills and expertise to serve both local customers and those who engage in cross-border business, namely by supporting the internationalisation of Portuguese companies. In this regard, particular emphasis is placed on facilitating access to strategic markets and markets offering business opportunities and where the BES Group can provide support, either through its direct presence or through partnerships with local banks. As at 22nd of May 2014, BES is rated by: (i) Moody s Investors Service, España, S.A.: Ba3 long-term and NP short-term rating, negative outlook; (ii) Standard & Poor s Credit Market Services Europe Limited: BB- long-term and B short-term rating, negative outlook; (iii) DBRS Ratings Limited: BBBL long-term and R-2M short-term rating, negative outlook; (iv) Dagong Europe Credit Rating S.r.1.: BB long-term and B short-term rating, negative outlook; BES will provide without charge a copy of its most recent publicly available annual report. Written requests should be directed to: (Banco Espírito Santo, S.A., Avenida da Liberdade, 195, 11, Lisboa Portugal). The delivery of this information shall not create any implication that the information contained or referred to herein is correct as of any time subsequent to its date. In addition, updated financial information may be found from the BES website at: B-4

105 APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE COMPREHENSIVE AGREEMENT Set forth herein is a summary of certain sections of the Amended and Restated Comprehensive Agreement Relating to the Route 495 HOT Lanes in Virginia Project, dated as of December 19, 2007, by and among the Virginia Department of Transportation (the Department or VDOT ) and Capital Beltway Express LLC (the Concessionaire ), as amended by Amendment No. 1 to the Amended and Restated Comprehensive Agreement Relating to the Route 495 HOT Lanes in Virginia Project, dated as of April 30, 2014 (as amended, the Comprehensive Agreement ). This summary does not purport to be complete, and reference is made to the Comprehensive Agreement itself for a complete statement of the rights, duties and obligations of the parties thereto. The headings herein are not part of the Comprehensive Agreement but have been added for ease of reference only. Capitalized terms used herein but not defined shall have the meaning given such terms in the Comprehensive Agreement, Appendix A or the front part of this Remarketing Circular. Term Pursuant to the Comprehensive Agreement, the Department has granted the Concessionaire a permit to develop, finance, design and construct the Project. The term of the Comprehensive Agreement will terminate 80 years after the agreement date, subject to early termination for default, and for extensions of time with respect to Delay Events (as defined below) during the Work Period or Significant Force Majeure Events (as defined below). Use and Tolling of Project Tolling Generally; Tolling Exemptions. Upon Substantial Completion of the Project, the Concessionaire will have the right and obligation to manage, operate, maintain, repair, improve and equip the HOT Lanes and establish and collect, and enforce payment of tolls. The Concessionaire will impose congestion pricing on the HOT Lanes, which may include dynamic tolling with potential toll rate changes at frequent intervals, with a view to maintaining free flow conditions of traffic in accordance with SAFETEA-LU. There will be no restrictions on tolling and vehicles permitted to use HOT Lanes may use the HOT Lanes subject to payment of applicable tolls, except that (i) vehicles permitted to use the HOT Lanes that meet the High Occupancy Requirement may use the HOT Lanes at a 100% discount from tolls and (ii) mass transit vehicles and commuter buses, school buses, motorcycles and certain emergency and law enforcement vehicles may use the HOT Lanes at a 100% discount from tolls. The Concessionaire may charge and collect tolls using electronic tolling facilities or other technologies that are interoperable with the E-ZPass network. Toll Violations Enforcement. The Concessionaire will have all rights available under applicable Law and the other project agreements to enforce toll violations, including the use of automated vehicle detection systems. If the Department implements a processing system for the enforcement of electronic toll violations in Virginia, the Department will provide such enforcement system for the benefit of the HOT Lanes Project and will remit to the Concessionaire amounts received as a result of such enforcement. For purposes of identifying and apprehending toll violators, the Department will allow the Concessionaire the benefits of any arrangements which the Department has with other state authorities that provide access to records relating to vehicle and vehicle owner data. Use of Toll Revenues. All toll revenues must first be used to pay the following before any amounts are distributed to the holders of equity interests in the Project: (i) operating and maintenance costs and any amounts due to the Department; (ii) current and delinquent debt service and other current and delinquent amounts due under any Concessionaire Loans; (iii) all taxes currently due and payable or delinquent; and (iv) all current and delinquent deposits to the major maintenance reserve fund. C-1

106 Permitted Securitization. The Concessionaire will have no right to use toll revenues to pay any debt, obligation or liability unrelated to the Comprehensive Agreement or the Project, provided that the Concessionaire may pledge, sell or otherwise transfer solely the toll revenues available for distribution to the holders of equity interests in the Concessionaire pursuant to any asset securitization so long as (i) the asset securitization is a refinancing that is permitted under the Comprehensive Agreement; (ii) the Concessionaire s interest in the Project is not subject to the exercise of remedies as a result of a default relating to any other asset in the securitization pool or any payment default by the obligor of the securitized debt; and (iii) the asset securitization documents conform to the limitations set forth in the Comprehensive Agreement respecting use and application of revenues. Emergency Suspension of Tolls. The Department may suspend tolling on the HOT Lanes without any compensation to the Concessionaire for loss of toll revenues if the HOT Lanes are designated as an emergency mass evacuation route, provided that the Department concurrently suspends tolling on other tolling facilities in the designated area and the Department lifts the suspension over the HOT Lanes concurrently with the lifting of the suspension on the other facilities. Compliance with SAFETEA-LU. The Concessionaire must operate the HOT Lanes Project in compliance with 23 U.S.C. 166 (Safe Accountable Flexible Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)) and must limit toll-paying vehicles as necessary to maintain free flow of traffic per SAFETEA- LU requirements. The Department will provide the FHWA with the certifications required of a state agency under SAFETEA-LU with respect to the compliance of the HOT Lanes Project with SAFETEA-LU requirements. Permit Fee The Department is entitled to receive permit fee payments from the Concessionaire based on the Project achieving certain agreed upon pre-tax internal rates of return on investment. Regulatory Approvals; Acquisition of Project Right of Way The Concessionaire is responsible for obtaining all regulatory approvals for the operation and maintenance of the Project, except regulatory approvals issued by the Department or approvals required to implement a Department project enhancement. The Concessionaire will acquire all real property in the Project Right of Way and any property outside of the Right of Way necessary for any permanent or temporary works, at its cost up to an allowance cap, any excess of which will be reimbursed by the Department. Project Financing; Lender Rights Department Funding. Subject to certain conditions, the Department provided the Design-Build Contractor payments aggregating $283,367,386 as financial support for the development, design, construction and start-up of certain elements of the I-66 Interchange improvements and other construction relating to the New Lanes and reconstruction of certain existing interchanges, and an additional $125,528,168 as financial support for the development, design, construction and start-up of Springfield Interchange Phase VIII. PABs Financing. The Department approved the issuance of the Bonds by the Issuer under the terms and pricing as provided in the Indenture and related financing documents, for the purpose of paying certain costs of designing and constructing the New Lanes and costs of any bond insurance or credit enhancement related to the Bonds, funding a portion of the capitalized interest during construction of the Project, and making any required deposits to the debt service reserve fund with respect to the Bonds. The Department also approved the assignment by the Issuer of the Bond proceeds as part of the trust estate under the Indenture. Financing Assignments. Subject to certain limitations, the Concessionaire has the right to pledge, sell or otherwise transfer solely the toll revenues available for distribution to the equity holders in the Project in C-2

107 connection with a securitization permitted under the Comprehensive Agreement or to pledge the Concessionaire s interest in the Comprehensive Agreement as security for any debt of the Concessionaire (a financing assignment ). A financing assignment may only secure loans the proceeds of which are used exclusively to finance the Project or any Project enhancements, paying reasonable closing fees and development costs and expenses, paying reasonable development fees to any affiliate of the Concessionaire for services related to the Project, making equity distributions, but only from the proceeds of refinancings permitted under the Comprehensive Agreement, and any permitted refinancing of pre-existing Concessionaire Loans. The Department is required to notify the lenders of a financing assignment of any potential breach or default by the Concessionaire. The financing assignment may limit the Concessionaire from effecting any amendment to the Comprehensive Agreement that could have a material adverse effect on the rights or interests of the lenders or to any voluntary surrender or termination of the Comprehensive Agreement, in each case, without lender consent. Lender Right to Cure. The Department may not terminate the Comprehensive Agreement for a Concessionaire default without first giving the collateral agent (defined as an institutional lender acting on behalf of or at the direction of lenders to whom a financing assignment is outstanding) a reasonable opportunity to cure such termination event. Generally, a collateral agent will be afforded 30 days in addition to any cure period provided to the Concessionaire to remedy a payment default and 45 days in addition to any cure period provided to the Concessionaire to remedy a non-monetary default (which 45 days may be extended for up to 180 days if the default cannot be cured within the 45 day period or requires possession to effect the cure, in each case, so long as the collateral agent is exercising diligent efforts to cure, or the collateral agent is prohibited by a bankruptcy proceeding to effect the cure). The Department may not exercise its termination right so long as the collateral agent s right to cure has not expired and the collateral agent is acting to cure such termination event, and the Department will permit the collateral agent and any substituted concessionaire the same access to the Project as is permitted to the Concessionaire under the Comprehensive Agreement. A Substituted Concessionaire may take any cure action that can be taken by a collateral agent. A Substituted Concessionaire is any entity selected by the lenders and approved by the Department to perform the Concessionaire s obligations and succeed to the Concessionaire s interest in the Comprehensive Agreement in the event of a foreclosure or transfer in lieu of foreclosure, or after the collateral agent takes possession and control of the Project. Lender Rights to New Agreement. If the Comprehensive Agreement is rejected or disaffirmed in a bankruptcy or insolvency proceeding, the Department will terminate the Comprehensive Agreement and enter into a new comprehensive agreement with the collateral agent or its Substituted Concessionaire if the collateral agent so requests within 60 days. In addition, if a termination event occurs that cannot be cured by the collateral agent without having possession of the Project, and if the Department terminates the Comprehensive Agreement for such termination event after expiration of the maximum 180-day cure period, the Department will enter into a new comprehensive agreement with the collateral agent or its Substituted Concessionaire. The new comprehensive agreement will run for the remainder of the term and contain the same terms and conditions as the Comprehensive Agreement. The right of the collateral agent or its Substituted Concessionaire to the new comprehensive agreement is subject to the payment of all amounts past due under the Comprehensive Agreement, the commitment to cure all then-existing defaults and the payment of costs and expenses incurred by the Department in connection with the default and/or termination, the preparation of the new agreement and all costs incurred by the Department to build, operate and/or maintain the Project since the cessation of the Concessionaire s performance of its duties. Other Lender Rights. A collateral agent may exercise its rights and remedies under a financing assignment with respect to the Concessionaire s interest in the Comprehensive Agreement. The Department acknowledges that upon a transfer of the Concessionaire s interest to a collateral agent or a Substituted Concessionaire, as transferee, such transferee will succeed to all of the right, title and interest and obligations of the Concessionaire under the Comprehensive Agreement and may thereafter perform as if it were the C-3

108 Concessionaire. The exercise by a collateral agent of its rights under a financing assignment does not require the Department s consent or constitute a breach or default under the Comprehensive Agreement. Refinancing. Any Refinancing is subject to the Department s prior approval (not to be unreasonably withheld), except that no approval will be required if (i) the proposed Refinancing refinances existing Concessionaire Debt and does not increase the principal amount of the Concessionaire s debt then outstanding, (ii) the proposed Refinancing has been assigned an investment grade rating by a nationally-recognized rating agency, or (iii) no proceeds of the proposed Refinancing will be used to make equity distributions or to pay noncapital costs of the Project. Major Maintenance Reserve. Reserve funds and other security for major maintenance costs will be as provided for in the project financing agreements. Project Management; Operations and Maintenance Operation and Maintenance. Service commencement of the HOT Lanes occurred upon certification from the Department that certain conditions were met, including: substantial completion had been achieved, all required insurance coverages had been obtained, and the Concessionaire was not in default under the Comprehensive Agreement. The Concessionaire has been, and will responsible for the following, at its sole cost and expense: (a) the management and control of traffic on the HOT Lanes, including but not limited to, incident response services and temporary partial or full closures of the HOT Lanes, (b) the maintenance and repair of the HOT Lanes and all systems and components thereof, including the electronic toll systems, which the Concessionaire may upgrade, modify, change and replace, as applicable, in accordance with the operations and maintenance requirements set forth in the Comprehensive Agreement, (c) the operation of the HOT Lanes Project, the electronic toll facilities and system and otherwise carrying out the collection and enforcement of tolls and other incidental charges respecting the HOT Lanes, and (d) the maintenance, compliance with and renewal of Regulatory Approvals necessary and incidental to the foregoing activities, in each case, in accordance with all laws and detailed performance standards and measurements specified by the Department, such obligations to include all major maintenance, repairs and required capital improvements. The Concessionaire will enter into an operations agreement with a contractor approved by the Department (the O&M Contractor ), who will be delegated the operations and maintenance obligations, with the Concessionaire being ultimately responsible for performance under the Comprehensive Agreement. The O&M Contractor will at all times be subject to the direction and control of the Concessionaire. The Concessionaire has no responsibility for the management, operation and maintenance of the Springfield Interchange Phase VIII from and after the service commencement date, except that it may install and maintain electronic toll facilities on the Springfield Interchange Phase VIII at its cost. Annual Budget. For each calendar year and partial calendar year from and after the Service Commencement Date, the Concessionaire is required to file with the Department an annual budget for the Project for such full or partial calendar year at least 60 days prior to the start of such calendar year or partial calendar year. Each such annual budget is required to show in reasonable detail all projected Revenues, operating and maintenance expenses, debt service, contributions to individual reserves, projected Total Return on Investment, projected permit fee payable to the Department, distributions to holders of equity interests in the Concessionaire and other related items for such period on an annual basis and such other information as the Department may reasonably require. Major Maintenance. The Concessionaire is required, at its sole cost and expense, to perform all Major Maintenance with respect to the HOT Lanes and the electronic tolling facilities and system on the HOT Lanes Project in accordance with life cycle maintenance plans approved by the Department. All design and construction Work during the operating period must comply with the applicable technical requirements as set forth in the C-4

109 Comprehensive Agreement. The condition of the HOT Lanes is subject to assessment every five years after service commencement, which condition will be compared against the baseline assessment made before service commencement, and the Concessionaire will be responsible for any Work necessary to restore the HOT Lanes to its baseline condition. The Concessionaire will also be responsible for all major maintenance on the HOT Lanes as required by a life cycle maintenance model that projects major maintenance work on a rolling five year basis and is updated annually with the approval of the Department. Hazardous Substances Management. The Concessionaire is solely responsible for compliance with environmental laws and permitting concerning Hazardous Substances. During the operating period, the Concessionaire is obligated to take all remedial action for Hazardous Substances encountered within the Project Right of Way or the HOT Lanes Right of Way at its sole cost, following procedures set forth in an approved hazardous substances management plan, provided that pursuant to an indemnity in the Comprehensive Agreement, the Concessionaire is entitled to reimbursement from the Department for approved costs relating to remedial action of Pre-Existing Hazardous Substances on property within the Project Right of Way owned by the Department. Police Services. The Department will cause police (traffic patrol and traffic law enforcement) and emergency services to be provided on the HOT Lanes at no charge to the Concessionaire. Enhanced levels of police services either from the State Police or another entity, as well as toll and HOV enforcement services, are at the Concessionaire s expense. Contract Services. If at any time the Department procures a contract for any maintenance services for State Highways on a regional or network basis in the area of the Project, the Department must require the contractor, so long as it is under contract with the Department, at Concessionaire s request, to offer comparable services to the Concessionaire on comparable terms and conditions, subject to the contractor s reasonable approval of Concessionaire s ability to pay. Snow and Ice Removal. The Department is required to provide snow and ice removal services on the HOT Lanes at a comparable level of service to that it provides on the general purpose lanes. If the Department fails at any time to provide snow and ice removal to the HOT Lanes at a level of service comparable to that it provides on the general purpose lanes, with prior written notice to the Department, the Concessionaire may arrange for other contractors to provide such service provided that such contractors shall not in any way hinder the removal of snow and ice from the general purpose lanes. Performance Points. The Comprehensive Agreement contains a system of performance points that will be assessed by the Department to identify certain Concessionaire breaches or failures to perform under the agreement and to measure the Concessionaire s performance levels. The accumulation of performance points by the Concessionaire may trigger certain remedies as set forth in the Comprehensive Agreement, which include increased monitoring, implementation of a remedial plan, or the triggering of a Concessionaire default. The assessment of performance points will apply only during the operating period beginning in the fifth year of operation. The Concessionaire is entitled to dispute the assessment of points as provided in the Comprehensive Agreement. Project Enhancements; Safety Compliance Orders Concessionaire Project Enhancements. The Concessionaire is entitled to construct, operate and maintain project enhancements within the HOT Lanes Right of Way, including any fundamental change in the dimensions, character, quality, location or position of the HOT Lanes, at its own cost, subject to approval by the Department. Department Project Enhancements. The Department has the right to construct project enhancements (including additional traffic lanes on the Capital Beltway corridor), either through the use of its own resources or C-5

110 by directing the Concessionaire to undertake such enhancements at the Department s cost. With very limited exceptions, the Department will compensate the Concessionaire for net loss in revenue to the Project resulting from a Department project enhancement (except that if the Department builds additional traffic lanes, there are certain limitations on compensation based on the number of new lanes constructed and the Project achieving certain internal rate of revenue benchmarks), and the Concessionaire and the Department will share equally in any net increase in revenue to the Project resulting from the Department project enhancement. The Department may, in its sole discretion, permit the construction of additional lanes as part of the Project with a view to minimizing any detrimental impact on the Project or its ability to generate revenues. The Department may also give the Concessionaire the opportunity to propose the construction of new HOT Lanes or toll lanes at the Concessionaire s sole cost as a Concessionaire project enhancement. If the Concessionaire determines not to pursue the construction of new HOT Lanes or toll lanes or the Department does not approve such Concessionaire project enhancement, and the Department adds additional traffic lanes, such construction will be treated as a Department project enhancement. Safety Compliance Orders. The Concessionaire, at its sole cost, must carry out work required by compliance orders issued by the Department in respect of safety deficiencies specifically affecting the Project or changes in safety standards or methodologies adopted by the Department for similar portions of state highways. Department Oversight and Other Services The Department is entitled to perform oversight services on the Project and to inspect the Project and records relating to the Project. The Department will use reasonable efforts to minimize the effect and duration of any disruption to the construction of the Project or the operations of the HOT Lanes. Subject to certain caps on the aggregate amount of compensation, the Concessionaire must reimburse the Department for costs and expenses incurred with respect to such oversight services. Subcontracting Practices The Concessionaire may subcontract its responsibilities to the Project subject to the subcontract satisfying certain requirements set forth in the Comprehensive Agreement. The Concessionaire may not enter into or materially amend a contract with an affiliate of the Concessionaire (an Affiliate Contract ) without the Department s consent, which consent will not be unreasonably withheld or delayed if the contract or subcontract is entered into in the ordinary course of business and the Concessionaire demonstrates that the contract is on overall terms no less favorable or unfavorable to the Concessionaire than terms the Concessionaire could obtain in a third party arm s-length transaction for comparable services. Further, no consent is required for (i) reasonable overhead sharing fees and reimbursement of third-party costs payable to an affiliate for legal, accounting, tax, computer and other centralized management services provided to the Concessionaire in lieu of Concessionaire having its own employees for such functions; or (ii) the joint ownership of assets or property used for the operation or maintenance of the Project and other projects owned or operated by affiliates of the Concessionaire so long as the cost of such assets and properties are reasonably shared and documented. Interrelations Among Transportation Facilities The Department has the right at any time (and without liability to the Concessionaire for damages except to the extent of a Department-directed change order or a Department project enhancement) to finance, develop, construct, improve, reconstruct, renew, replace or repair any new or existing transportation or other facilities. The Department also has the right to make discretionary and non-discretionary distributions of federal and other funds for any transportation projects, and to otherwise improve the GP Lanes and other structures within or adjacent to the Capital Beltway Corridor. Without restricting the Department s rights with respect to other facilities, during the term, the Department will maintain, repair and cause to be continuously open and operational, so as to permit C-6

111 access to the HOT Lanes, the Capital Beltway and the ramps, bridges and roadways directly connecting to the HOT Lanes and the Capital Beltway Corridor that are part of the state highway system. Delay Events; Compensation Events; Force Majeure Events Delay Events. A Delay Event will excuse the Concessionaire from whatever performance is being prevented as a result of the Delay Event for a period of time as reasonably agreed to between the Department and the Concessionaire. Delay Events generally mean (a) with respect to the Work Period, (i) a force majeure event, (ii) the discovery of any of the following conditions: (A) unanticipated subsurface conditions on the Project Right of Way, (B) threatened or endangered species, (C) archaeological, paleontological or cultural resources, (D) Hazardous Substances present on the Project Right of Way as of the Agreement date, (E) Hazardous Substances spilled subsequent to the Agreement date other than by the Concessionaire in the course of performing the Work or (E) unknown utilities; (iii) failure to obtain any regulatory approval from a governmental authority; (iv) an injunction enjoining the Department or the Concessionaire from the performance of its obligations under the Comprehensive Agreement; or (v) a change in applicable laws occurring after the Agreement date that imposes additional requirements that materially and adversely impacts performance of the Work and that could not have reasonably been anticipated; and (b) with respect to the operating period, (i) a force majeure event; or (ii) an injunction enjoining the Department or the Concessionaire from the performance of its obligations under the Comprehensive Agreement. Compensation Events. A Compensation Event will entitle the Concessionaire to any net revenue losses and/or net cost increases resulting from such an event. Compensation Events include the following: (a) a delay beyond the applicable time period in the issuance by the Department of a substantial completion certificate; (b) Department-directed change orders or Department project enhancements as described in this summary; (c) the performance by the Department of certain ITS activities that results in Concessionaire damages; (d) a Discriminatory Change in Law (as described below); and (e) a Reimbursable Tax Imposition (as described below). Force Majeure; Significant Force Majeure Event. The Concessionaire will be responsible for the cost of repair and restoration resulting from any force majeure event. If a Significant Force Majeure Event (as defined below) occurs, the Concessionaire will have the right to extend the term (contingent on the Concessionaire s agreement to diligently and completely restore the HOT Lanes before the end of the existing term) for a period of time that would be sufficient so as to restore the Concessionaire to the same economic position as it would have been in had such force majeure event not occurred. If the Concessionaire elects not to restore the HOT Lanes for any physical damage resulting from a Significant Force Majeure Event, or if the restoration may not reasonably be completed by the end of the existing term, the Comprehensive Agreement may be terminated as described in more detail in the section entitled Termination for Significant Force Majeure Event below. Discriminatory Change in Law. If a change in state law has the effect of discriminating against the HOT Lanes project or the Concessionaire with respect to the HOT Lanes project, and the change in law results in net revenue loss, the Department will compensate the Concessionaire for such loss. Any net increase in revenue resulting from the change in law will be shared equally between the Concessionaire and the Department. Transfer of Regulatory Control over HOT Lanes. If regulatory control and jurisdiction over the HOT Lanes is transferred or assigned to a governmental authority other than the Department during the first 10 years after financial close, and such transfer has a net revenue or net cost impact, the Department will pay Concessionaire damages with respect thereto. Toll Exemptions; Excess High Occupancy Vehicle Usage. If any governmental authority enacts or modifies any law (including by reducing the high occupancy requirement to less than three persons) that permits vehicles (other than vehicles currently exempted) to travel on the HOT Lanes without paying full tolls or permits C-7

112 vehicles other than Permitted Vehicles to travel on the HOT Lanes and the action has a net revenue impact or net cost impact, the Department will pay Concessionaire damages with respect thereto. Pursuant to the Comprehensive Agreement, the Department agrees to pay the Concessionaire, subject to certain limitations, amounts equal to 70% of the Average Toll applicable to vehicles paying tolls for the number of High Occupancy Vehicles exceeding a threshold of 24% of the total flow of all Permitted Vehicles that are then using such Toll Section going in the same direction for the first 30 consecutive minutes during any day, and any additional 15 consecutive minute periods in such day, during which average traffic for a Toll Section going in the same direction exceeds a rate of 3,200 vehicles per hour based on two lanes, but only with respect to periods beginning one year after the Service Commencement Date and ending not later than 40 years after the Closing Date. This payment will cease to apply once a pre-tax internal rate of return (rounded up, if necessary, to a whole multiple and 1/1000 of 1%) on Total Invested Project Funds of 12.98%, calculated based on the nominal Net Cash Flow of the HOT Lanes Project for the period from the Service Commencement Date to the end of a calendar year, has been achieved, and for purposes of determining the High Occupancy Vehicles as a percentage of flow, HOV-2 or below vehicles and Permitted Vehicles violating the High Occupancy Requirement shall not be counted as High Occupancy Vehicle usage but shall be counted as part of total flow. To the extent there are amounts on deposit in the Project Enhancement Account at the time of such payments, such payments shall be made first from the Project Enhancement Account and the interest due shall be calculated based on the average earnings rate on the Project Enhancement Account, during such period. If there are no amounts on deposit therein then interest shall be based on the average earnings rate on the Commonwealth s transportation trust fund or any successor thereto, during such period. Reimbursable Tax Imposition. The Department will pay the Concessionaire any net cost impact or net revenue impact resulting from the imposition of a state or local property tax charged against the Concessionaire s interest in the Comprehensive Agreement or the Project or any license fee or tax on or measured by receipts or revenues imposed on the Concessionaire on account of its interest in the Project. Indemnification and Insurance Indemnities of the Concessionaire. Indemnities of the Concessionaire in favor of the Department and other state entities against third party claims relating to the Concessionaire s breach, misconduct, negligence and other acts and omissions of its obligations under the Comprehensive Agreement will continue for six years following the expiration or earlier termination of the Comprehensive Agreement subject to the terms of the Comprehensive Agreement. Insurance. During the operating period, the Concessionaire is required at its own cost and expense to procure and maintain property, liability and other insurance coverages specified in the Comprehensive Agreement. The Department will be named as an additional insured on appropriate policies. The Comprehensive Agreement provides for a procedure to determine the commercial availability of insurance coverages in the event the Concessionaire and the Department cannot agree as to replacement coverage. Termination and Return Obligations In addition to termination for default, the Comprehensive Agreement provides for the following: Termination for Significant Force Majeure Event. If a Significant Force Majeure Event (as defined below) occurs that causes damage or destruction to the HOT Lanes, the Concessionaire may elect to restore the HOT Lanes to the same condition as they would have been had such force majeure event not occurred. If it does not elect to do so or if restoration may not reasonably be completed by the end of the existing term, either the Department or the Concessionaire may terminate the Comprehensive Agreement. No amount will be payable to the Concessionaire if the Concessionaire terminates. If the Department terminates, the Department must pay to C-8

113 the Concessionaire a sum equal to the lesser of (i) project value after such force majeure event, or (ii) the lesser of (A) 80% of senior debt outstanding at the time of such event (including any private activity bonds then outstanding), plus 80% of any TIFIA Loans then outstanding, or (B) 80% of senior debt (including private activity bonds) plus 80% of the TIFIA Loans projected in the closing date financial model to be then outstanding, in either case minus cash balances and equity distributions and any insurance proceeds. Significant Force Majeure Event means a force majeure event occurring after the service commencement date of the HOT Lanes for which insurance is not obtainable at commercially reasonable rates that (a) causes physical damage or destruction to the HOT Lanes, or any ramp, feeder road or bridge within 3 miles of the HOT Lanes constituting a direct traffic route to or from the HOT Lanes, and (b) results in the HOT Lanes being substantially unavailable for public use for a period in excess of 120 consecutive days or the suspension or substantial reduction in toll collections on the HOT Lanes for a period in excess of 120 consecutive days. Other Termination. If the Department terminates for other reasons, the Department must pay to the Concessionaire the greater of (a) Project value plus out-of-pocket costs and expenses incurred by the Concessionaire as a result of such termination and (b) the lesser of 100% of Concessionaire Debt then outstanding or 100% of Concessionaire Debt projected in the closing date financial model to be then outstanding, plus any breakage costs. Return Obligations. Upon the expiration or earlier termination of the Comprehensive Agreement, the Concessionaire must hand-back the HOT Lanes, at no charge to the Department, with asset condition having a remaining life as required by the Comprehensive Agreement, free and clear of any Liens. The Comprehensive Agreement will provide for security arrangements satisfactory to the Department. Reserved Rights The Department hereby reserves to itself all ownership, development, use and enjoyment of certain Reserved Rights. The Department will use efforts to minimize interference with the construction, operation and maintenance of the Project in connection with the exercise of Reserved Rights, but the Department will owe no compensation or damages on account of its exercise of Reserved Rights, subject to any rights the Concessionaire has if the exercise constitutes a Department project enhancement. Reserved Rights include the Department s right to use, possess, operate, maintain state or local highways or roadways that cross the HOT Lanes Right of Way and any other real and personal property over, under or adjacent to the Capital Beltway for any purpose not expressly prohibited by the Comprehensive Agreement, including the construction and operation of other transportationrelated projects, improvements or facilities. Project Enhancement Account Amounts that the Department will receive as permit fee payments and its share of positive revenues under the Comprehensive Agreement will be deposited to a project enhancement account and will be used to pay or finance costs of programs or projects reasonably related to or benefiting users of the Project and as otherwise permitted by law. During the Work Period, the Concessionaire may request an allocation of any amounts in such account to fund any portion of additional costs of the Project. SWaM Goals The Concessionaire must work toward a long-term goal of 40% for Small, Women Owned and Minority Business ( SWaM ) participation during the operating period of the Project. If the Department determines that the Concessionaire neither achieves the goals nor demonstrates good faith efforts, the Concessionaire and its Affiliates may be enjoined or disqualified from additional work or new contracts with the Commonwealth of Virginia. C-9

114 Transfers and Change of Control Any transfer of the Concessionaire s interest in the Project, and any change in control of the Concessionaire, will require the Department s prior approval. No transfer or change in control will be permitted during the 10-year period after financial close. Dispute Resolution Disputes arising between the Concessionaire and the Department under the Comprehensive Agreement that are not resolved in good faith negotiations are subject to mediation or other form of alternative dispute resolution that is acceptable to both parties. If the dispute remains unresolved, the parties may litigate the matter in the Circuit Court for the City of Richmond, Virginia, Division I, which will have exclusive jurisdiction and venue. C-10

115 APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE OPERATING AGREEMENT AND THE SHARED FACILITIES AGREEMENT Set forth herein is a summary of certain sections of the Amended and Restated Operating and Support Services Agreement for the Capital Beltway HOT Lanes Project, dated as of June 12, 2008, between Capital Beltway Express LLC (the Borrower or the Company ) and Transurban (USA) Operations Inc. (the Operating Agreement ) as well as a summary of certain sections of the Shared Facilities Agreement, dated as of July 31, 2012, by and between the Company and 95 Express Lanes LLC (the I-95 Concessionaire ) (the Shared Facilities Agreement ). This summary does not purport to be complete, and reference is made to the Operating Agreement and the Shared Facilities Agreement, for a complete statement of the rights, duties and obligations of the parties to each such document. The headings herein are not part of the Operating Agreement or the Shared Facilities Agreement, but have been added for ease of reference only. Capitalized terms used herein but not defined shall have the meaning given such terms in the Operating Agreement, the Shared Facilities Agreement, Appendix A or the front part of this Remarketing Circular. OPERATING AGREEMENT Operations of the Project The Borrower has appointed Transurban (USA) Operations, Inc., as the Operating and Support Services Contractor (the Operating Company ), to perform the HOT Lanes Operations (as defined in the Comprehensive Agreement) pursuant to the Operating Agreement. Terms of Payment For each full or partial fiscal year starting January 1, 2009, or later, the Operating Company will prepare an annual budget to be approved by the Borrower and VDOT. Each year, the aggregate annual expenses or Capital Expenditures of the Operating Company may not exceed 110% of such an approved budget, except to ensure public health and safety, prevent imminent or irreparable harm to the Project, or comply with executed agreements or applicable law. During the Work Period, the Borrower paid the Operating Company s fully burdened costs and documented third-party contract costs, plus an agreed mark-up. Beginning on the Service Commencement Date, the Borrower paid and will pay the Operating Company an additional annual fee for administrative costs, adjusted for inflation. In addition, the Borrower will pay the Operating Company s fully burdened costs and documented third-party contract costs, plus an agreed mark-up, for additional services subject to commercial discussions. Management and Operation of the HOT Lanes During the Operating Period The Operating Company, on behalf of the Borrower, will be responsible for providing or contracting for all services required to be performed during the Operating Period in order to operate, maintain, repair, renew and restore the HOT Lanes and comply with the Borrower s obligations under the Comprehensive Agreement and the other Project Agreements. The Operating Company shall provide all personnel required to perform these duties, who will carry out their duties with skill, competence, and diligence consistent with prudent industry practice. The services of the Operating Company will specifically include the following: Management and Operation of the HOT Lanes. The Operating Company, on behalf of the Borrower, is required to manage and operate the HOT Lanes in accordance with all applicable Laws, all regulatory approvals, D-1

116 and the terms, conditions and standards set forth in the Comprehensive Agreement and the Operating Agreement. Without limiting the foregoing, the Operating Company is required to be responsible for the following: (a) the management and control of traffic on the HOT Lanes, including but not limited to, incident response services and temporary partial or full closures of the HOT Lanes; (b) the maintenance, inspection and repair of the HOT Lanes Project and all systems and components thereof, including the ETTM System, including the upgrade, modification, change or replacement thereof; (c) the operation of the HOT Lanes Project, the ETTM Facilities and the ETTM System and otherwise carrying out the collection and enforcement of tolls and other tolls respecting the HOT Lanes, including performing its obligations under the Electronic Toll Collection Agreement, dated as of December 20, 2007 (as amended and supplemented, the ETC Agreement ), between VDOT and the Borrower; (d) activities; (e) the management and administration of contracts necessary and incidental to the foregoing the operation of the customer services staff; (f) the planning and management services associated with the Borrower s approved marketing and public relations plan during the Operating Period; Lanes; (g) the management of administrative services related to enforcement of toll violations on the HOT (h) the maintenance, compliance with and renewal of regulatory approvals necessary and incidental to the foregoing activities; (i) traffic management and maintenance and repair responsibilities under clause (a) above; and (j) carrying out activities in accordance with a Transportation Management Plan, a plan setting forth a program for traffic management and related activities, to be developed by the Operating Company in coordination with the Borrower and the VDOT. Major Maintenance Work. (a) The Operating Company, on behalf of the Borrower, is required to perform, or cause to be performed, all Major Maintenance with respect to the HOT Lanes Project, the ETTM Facilities and the ETTM System on the HOT Lanes Project in accordance with Life Cycle Maintenance Plans, prepared by the Operating Company in compliance with the Technical Requirements, with the approval of VDOT. (b) Commencing with the date that is five (5) years after the adoption of the Baseline Report, and every five (5) years thereafter, the Operating Company is required to conduct a reassessment of the physical condition of the HOT Lanes Assets, and prepare an analysis, comparable to the Baseline Report, of the condition of the HOT Lanes and all other improvements and assets of the HOT Lanes Project as of the date of such report (or, with respect to any Project Enhancements, their condition upon completion thereof), such analysis to take into account any changes in federal requirements and changes to safety standards. If the condition of any HOT Lanes asset is determined by the Operating Company, VDOT or the Independent Engineer to fall below its assessment rating in the Baseline Report (or the original condition of such Project Enhancement), the Operating Company is required, within 120 days of such assessment, to develop and submit to the Borrower (and the Borrower is D-2

117 required to deliver to VDOT) a plan to restore such asset to its baseline or original condition, as applicable, subject to ordinary wear and tear, including a budget, timeline and identification of the funding sources that will be utilized to restore such asset. (c) Any obligation of the Operating Company with respect to Major Maintenance will not include any Major Maintenance with respect to the Springfield Interchange Phase VIII which will be subject to the provisions of the Comprehensive Agreement. Police and Enforcement Services. The Operating Company is required to manage the provision of police and enforcement services to be provided by the Commonwealth on the HOT Lanes. Hazardous Substances Management. The Operating Company is required to manage the Hazardous Substances management services to be provided by the Borrower. Snow and Ice Removal. The Operating Company, on behalf of the Borrower, is required to manage the snow and ice removal services to be provided by VDOT. Other Operations Services. The Operating Company also is required to provide such other administrative and general management services for the ongoing operations of the Borrower, including but not limited to: coordination of all financial reporting required by law, under the Comprehensive Agreement or otherwise, including audits and financial services; major marketing and public relations based upon a plan to be developed by the Operating Company and agreed to by the Borrower; to the extent requested by the Borrower, maintenance of governance documents of the Borrower under the Borrower s organizational documents; and handling all legal issues arising under the Comprehensive Agreement, including litigation. The Operating Company also is required to be responsible for monitoring and providing asset enhancement services, including the identification of safety enhancements for the HOT Lanes Project and asset improvements to improve the present value of the HOT Lanes Project. Additional Services. The Operating Company is required to provide such other additional services from time to time requested by the Borrower and agreed to by the Operating Agreement. D-3

118 SHARED FACILITIES AGREEMENT As part of the 495 Express Lanes, the Company constructed and equipped an operations center building in Alexandria, Virginia (the Express Operations Center ) that houses certain equipment and software used for the toll and traffic management system of the 495 Express Lanes. This equipment, the common-use areas of the Express Operations Center, and new toll and traffic management equipment to be added in connection with construction of the I-95 Express Lanes Project are referred to collectively as the Shared Facilities. Pursuant to the Operating Agreement, the Operating Company operates and maintains the 495 Express Lanes, including the Shared Facilities, and performs certain services related to the Shared Facilities (the Shared Services ). The Shared Services include back office support and IT operations, back office tolling management system maintenance, modifications and enhancements, and support, building and equipment maintenance and repair, and plant management and facility monitoring, among other services. The Company and I-95 Concessionaire determined that the shared use of the Shared Facilities and Shared Services in connection with the I-95 Express Lanes Project and the 495 Express Lanes will promote efficiencies and result in lower costs than if each of the Company and I-95 Concessionaire constructed and operated separate buildings and equipment and used separate operating personnel. As a result, the Company and I-95 Concessionaire entered into the Shared Facilities Agreement to set forth their respective rights to access and use the Shared Facilities and receive the Shared Services, and the Operating Company operates and maintains the 495 Express Lanes, including operating and maintaining the Shared Facilities and performing the Shared Services in respect of the 495 Express Lanes, pursuant to the Operating Agreement and the operating agreement with respect to the I-95 Express Lanes Project. The term of the Shared Facilities Agreement began on July 31, 2012 and, unless canceled or terminated earlier in accordance with its terms and except as otherwise expressly set forth in the Shared Facilities Agreement, will expire on the date on which either the Comprehensive Agreement or the Comprehensive Agreement with respect to the I-95 Express Lanes Project expires or is terminated (unless VDOT assumes the rights and obligations under the Shared Facilities Agreement of the Company or I-95 Concessionaire, depending on which comprehensive agreement is terminated). Access Fee On July 31, 2012, the I-95 Concessionaire paid to the Company a one-time access fee of $21,395,410 for the right to access and use the Express Operations Center, subject to the terms and conditions of the Shared Facilities Agreement. Shared Facilities and Shared Services Subject to certain limited exceptions, the Company and I-95 Concessionaire each have an irrevocable, non-exclusive right to use and access the Express Operations Center and the other Shared Facilities for the construction, testing, startup and operation and maintenance of the I-95 Express Lanes Project and the 495 Express Lanes, respectively. Initially, each of the Company and I-95 Concessionaire will have an equal undivided 50% interest in the Shared Facilities and Shared Services (each party s interest is its Allocated Interest ). The initial Allocated Interests are based on the number of projected tolling transactions to be processed through the Shared Facilities on behalf of each of the I-95 Express Lanes Project and the 495 Express Lanes. Each of the Company and I-95 Concessionaire have the right to use its undivided interest in the Shared Facilities and Shared Services on a nonexclusive basis. I-95 Concessionaire will also have the right to interconnect the tolling, traffic management and other data and information systems of the I-95 Express Lanes Project with the Shared Facilities and, at its cost, to D-4

119 obtain and install additional components and equipment in the Shared Facilities to permit the operation and maintenance of tolling and traffic management system in respect of the I-95 Express Lanes Project. On the third anniversary of the service commencement date with respect to the I-95 Concessionaire and on each succeeding third anniversary thereof, and when otherwise requested in good faith by the Company or I-95 Concessionaire, the Company or I-95 Concessionaire will, pursuant to the Shared Facilities Agreement, seek in good faith to adjust the Allocated Interests to more accurately reflect the actual use by each of the 495 Express Lanes and the I-95 Express Lanes Project of the Shared Facilities and Shared Services during the succeeding three-year period. At such time, the Company or I-95 Concessionaire may propose use of a metric other than the number of projected tolling transactions if it determines that metric no longer appropriately reflects the actual costs of the Company s or I-95 Concessionaire s relative use of one or more of the Shared Facilities and/or the Shared Services. No adjustment to the Allocated Interests or change to the metric that would result in the Company s share of the total costs payable under the Operating Agreement increasing by more than 3% over the Company s share of such total costs in effect immediately prior to such adjustment or change, will be effective unless the Company has certified to the I-95 Concessionaire that it has notified the Company s lenders of the same. Operation and Management of the Express Operations Center The Operating Company will operate and manage the Express Operations Center as part of its obligations under the Operating Agreement and the operating agreement with respect to the I-95 Concessionaire, respectively, and will also maintain the back-up toll and traffic management system such that it will be fully operational and available for immediate use in the event of a division of the Shared Facilities as described below. The Operating Company will make all day-to-day decisions in the ordinary course of the operation of the Shared Facilities and provision of the Shared Services. All other decisions concerning the Express Operations Center that are not made by the Operating Company will be made by a coordination committee that will be composed of two representatives of each party. The coordination committee will coordinate budgeting of the costs of operating and maintaining the Shared Facilities and performing the Shared Services. Beginning on the service commencement date of the I-95 Express Lanes Project, each of the Company and I-95 Concessionaire will pay monthly its share, based on its respective Allocated Interest, of the aggregate costs (excluding any applicable margin) payable under the Operating Agreement and the operating agreement with respect to the I-95 Concessionaire, respectively, in respect of the Shared Facilities and Shared Services. The Operating Company will invoice each party for its share of costs, including any applicable margin. The parties will regularly communicate through the coordination committee to confirm that the aggregate costs, and each party s share thereof, have been calculated accurately. If it is determined by the parties or pursuant to dispute resolution that costs have not been calculated and allocated accurately, they will promptly make true-up payments to each other so that each party pays its accurate share of the aggregate costs, and provide additional direction to the operator so as to avoid inaccuracies in the future. Termination of the Operating and Support Services Agreement or Beltway Operating Agreement If either the Operating Agreement or the operating and support services agreement for the I-95 Express Lanes Project is terminated or amended such that the Operating Company is no longer a Shared Facilities Operator, then, pursuant to the Shared Facilities Agreement, the party whose agreement was terminated is required to cause its replacement operator to subcontract on an arms length basis, including fair and commercially reasonable terms, with the Shared Facilities Operator to operate the Shared Facilities and perform the Shared Services unless (i) the party whose agreement was not terminated elects not to retain the Shared Facilities Operator or (ii) such termination or amendment is in connection with the exercise of rights by the Company s or I-95 Concessionaire s lenders under the applicable financing documents, the replacement operator elects not to retain the Operating Company and the party whose agreement was not terminated desires to retain the Operating D-5

120 Company, then the Company and I-95 Concessionaire will end the Shared Services and divide the Shared Facilities as described below, with all costs of implementing such division being borne by the party whose lenders authorized or directed such termination or amendment. If the new operator needs to be selected, then the parties will meet in good faith to select a replacement Shared Facilities Operator, subject to the requirements of the Comprehensive Agreement, the comprehensive agreement with respect to I-95 Concessionaire and each party s financing documents. Division of Shared Facilities The addition of new toll and traffic management system equipment as part of the construction of the I-95 Express Lanes Project will result in the creation of a new primary system serving both the I-95 Express Lanes Project and the 495 Express Lanes, and the existing toll and traffic management system will serve as a back-up system serving both the I-95 Express Lanes Project and the 495 Express Lanes. Under the Shared Facilities Agreement, if the Company and I-95 Concessionaire are unable to agree on a replacement Shared Facilities Operator or the Company or I-95 Concessionaire demonstrates that continuing to use the Shared Facilities or a portion thereof would cause it to suffer a material adverse effect, then it may propose that shared use of the Shared Facilities end and that the Shared Facilities be divided such that a discrete portion thereof is available for use exclusively by the I-95 Express Lanes Project and a discrete portion thereof is available for use exclusively by the 495 Express Lanes. If the parties agree to such division, or division is directed pursuant to dispute resolution, then the Shared Facilities will be divided, with the new toll and traffic management system exclusively serving the I-95 Express Lanes Project, and the back-up toll and traffic management system exclusively serving the 495 Express Lanes. D-6

121 APPENDIX E SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Set forth herein is a summary of certain sections of the Amended and Restated Master Indenture of Trust, dated as of June 1, 2008, as supplemented by the First Supplemental Indenture of Trust, dated as of June 1, 2008 (the First Supplemental Indenture ), in the Amended and Restated Second Supplemental Indenture of Trust, dated as of June 1, 2008 (the Second Supplemental Indenture ), the Third Supplemental Indenture of Trust, dated as of March 17, 2010 (the Third Supplemental Indenture ), the Fourth Supplemental Indenture of Trust, dated as of December 1, 2010 (the Fourth Supplemental Indenture ), the Fifth Supplemental Indenture of Trust, dated as of July 1, 2012 (the Fifth Supplemental Indenture ), and the Sixth Supplemental Indenture of Trust, dated as of June 5, 2014 (the Sixth Supplemental Indenture and, collectively, the Indenture ). This summary does not purport to be complete, and reference is made to the Indenture itself, a copy of which is on file with the Trustee, for a complete statement of the rights, duties and obligations of the parties thereto. The headings herein are not part of the Indenture but have been added for ease of reference only. Capitalized terms used herein but not defined shall have the meaning given such terms in the Indenture, Appendix A or the front part of this Remarketing Circular. Authorization and Issuance of Bonds and Hedge Agreements. (a) The Indenture authorized the issuance in 2008 of the Series 2008 Refunded Bonds and in 2010, the issuance of (i) Senior Lien Multi-Modal Revenue Bonds, Series 2008A (Tax-Exempt, Non-AMT) in the amount of $300,000,000, (ii) Senior Lien Multi-Modal Revenue Bonds, Series 2008B (Tax-Exempt, Non-AMT) in the amount of $114,000,000, (iii) Senior Lien Multi-Modal Revenue Bonds, Series 2008C (Tax-Exempt, Non- AMT) in the amount of $100,000,000 and (iv) Senior Lien Multi-Modal Revenue Bonds, Series 2008D (Tax- Exempt, Non-AMT) in the amount of $75,000,000 to refund the Series 2008 Refunded Bonds. (b) The Indenture also authorized the issuance of the TIFIA Bonds and the Hedge Agreements. Grant of the Trust Estate The Indenture provides that the Issuer, in consideration for the purchase of the Bonds by the Owners, the credit support of certain Bonds by the Credit Facilities, the execution and delivery by a Hedging Bank of a Hedge Agreement, the actions of other Secured Parties with respect to any document they are a party to and other good and valuable consideration, and to secure the payment of the Trust Estate Secured Obligations, to secure the performance and observance of all the covenants and conditions set forth in the Bonds, the Master Indenture and any Supplemental Indenture, has executed and delivered the Master Indenture and has pledged and assigned, and does pledge and assign unto the Trustee and to its successors and assigns forever and subject to the Intercreditor Agreement for the benefit of the Secured Parties, all of the following described property, franchises, rights and income, including any title or interest therein acquired after June 1, 2008, the date of the Master Indenture (collectively, the Trust Estate ): (a) all right, title and interest of the Issuer in and to each Loan Agreement (except for Reserved Rights), each Note and any Security Interest granted to the Issuer in respect of the foregoing under the Collateral Documents or otherwise, and the present and continuing right of the Issuer to make claim for, collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable or receivable under each Loan Agreement and each Note, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Issuer is, or may become, entitled to do under each Loan Agreement and each Note; (b) all moneys from time to time held by the Trustee under the Indenture in any Fund or Account and, as to the Senior Lien Bonds only, the Debt Service Reserve Fund and funds deposited from time to time and E-1

122 earnings thereon in the PABs Sub-Account of the Construction Fund, and, as to the TIFIA Bonds only, the TIFIA Sinking Fund and funds deposited from time to time and earnings thereon in the TIFIA Sub-Account of the Construction Fund, other than (i) the Rebate Fund, (ii) any Defeasance Escrow Account, (iii) the Department Funding Account, (iv) the Project Enhancement Account (as defined in the Comprehensive Agreement), and (v) any Fund or Account created by a Supplemental Indenture that is expressly excluded from the Trust Estate; (c) unless otherwise provided in a Supplemental Indenture as to the Senior Lien Bonds only, the rights to amounts payable to the Issuer or the Trustee under any Credit Facility or Liquidity Facility; (d) the rights to amounts payable to the Issuer, the Borrower or the Trustee pursuant to any Hedge Agreement under which payments by the Issuer or the Borrower are treated as Debt Service on the Bonds pursuant to the definition of Debt Service; and (e) any and all other property, revenues, rights or funds from time to time after the date of the Master Indenture by delivery or by writing of any kind specially granted, assigned or pledged as and for additional security for any of the Trust Estate Secured Obligations in favor of the Trustee, and authorizing the Trustee to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof, any Supplemental Indenture and the terms of the Intercreditor Agreement. Time of Pledge; Delivery of Trust Estate. The Indenture provides that in accordance with the Virginia Code, (a) the pledge of the Trust Estate pursuant to the Indenture shall be valid and binding as of the time it is made; (b) the Trust Estate shall immediately be subject to the lien of such pledge without any physical delivery, filing or further act; and (c) the lien of such pledge shall be valid, binding and enforceable against all parties having claims of any kind in tort, contract or otherwise against the Issuer, irrespective of whether such claiming party has notice of such lien, any Supplemental Indenture and the terms of the Intercreditor Agreement. Bonds, Credit Facilities and Hedge Agreements Secured on a Parity Unless Otherwise Provided. The Indenture also provides that the Trust Estate shall be held by the Trustee for the equal and proportionate benefit of the Secured Parties and any of them, without preference, priority or distinction as to lien or otherwise, except as expressly set forth in the Indenture and the Intercreditor Agreement. Limited Obligations. The Indenture (and the form of the Bonds) provide that the Bonds are special, limited obligations of the Issuer, payable solely from and secured solely by the Trust Estate and that the Bonds are not, and shall not be deemed to constitute a pledge of the full faith and credit of the Commonwealth or any governmental unit thereof. Bonds Constitute a Contract. Under the Indenture, the Bonds constitute a contract between the Issuer and the Owners of the Bonds for their benefit and for the benefit of the other Secured Parties. Series 2008 Non-AMT Bonds in the Weekly Mode. The Bonds are issuable in the form of fully registered Bonds in Authorized Denominations. The Series 2008 A Bonds, Series 2008 C Bonds and Series 2008 D Bonds were issued in the Weekly Mode. The Series 2008 A Bonds were issued initially in the Flexible Mode with the Flexible Rate Period of one day at an interest rate equal to the Alternate Rate and since that time have been Liquidity Provider Bonds. The Indenture provides that so long as any Bonds are Liquidity Provider Bonds, such Bonds are to bear interest and be payable at the times and in the amounts required under the Reimbursement Agreement. Calculation and Payment of Interest; Change in Interest Rate Mode; Maximum Rate. (a) The Bonds in any Interest Rate Mode (other than a Fixed Rate Mode) may be changed to any other Interest Rate Mode at the times and in the manner described in the Indenture. E-2

123 (b) No Bonds are permitted to bear interest at an interest rate higher than the Maximum Rate. (c) The Indenture provides that in the absence of manifest error, the determination of interest rates (including any determination of rates in connection with a New Mode) and interest periods by the Remarketing Agent or the Auction Agent and the record of interest rates maintained by the Paying Agent shall be conclusive and binding upon the Remarketing Agent, the Broker-Dealer, the Auction Agent, the Paying Agent, the Trustee, the Issuer, the Borrower, the Owners and the Beneficial Owners. Determination of Interest Rates During the Daily Mode and the Weekly Mode. (a) The interest rate for the Bonds in the Daily Mode or Weekly Mode is the rate of interest per annum determined by the Remarketing Agent on and as of the applicable Rate Determination Date as the minimum rate of interest which, in the opinion of the Remarketing Agent under then-existing market conditions, would result in the sale of the Bonds in the Daily Rate Period or the Weekly Rate Period, as applicable, at a price equal to the principal amount thereof, plus interest, if any, accrued through the Rate Determination Date during the then current Interest Accrual Period. (b) During the Weekly Mode, the Remarketing Agent is required to establish the Weekly Rate by 4:00 PM. on each Rate Determination Date, with the Weekly Rate to be in effect during the applicable Weekly Rate Period. The Remarketing Agent is required to make the Weekly Rate available no later than 5:00 PM on the Business Day following the Rate Determination Date by Electronic Means to each Notice Party requesting such rate. Credit Facility; Liquidity Facility. During the period when a Credit Facility that is a direct-pay letter of credit has been provided, the Trustee is required to timely draw moneys under the Credit Facility in accordance with the terms thereof, to pay when due the principal of, premium if any and interest on the Bonds. The Trustee is prohibited from drawing on a Credit Facility or a Liquidity Facility to pay the principal of, premium, if any, or interest on any Liquidity Provider Bonds or Borrower Bonds. Creation of Separate Subaccounts. Whenever Bonds of a Series are in a different Interest Rate Mode or are supported by a different Credit Facility or Liquidity Facility from any other Bonds, the Trustee is required to create subaccounts in the Debt Service Fund and the Purchase Fund and any accounts therein to enable the separate administration of the Bonds of such Series. Additional Bonds. After the issuance of the Series 2008 Non-AMT Bonds and the TIFIA Bonds and subject to any additional restrictions placed on the incurrence by the Borrower or the Issuer of Additional Senior Indebtedness imposed by the Banks, the Issuer may issue one or more series of Additional Bonds to pay the cost of completing the Project, to pay the cost of acquiring, constructing, equipping or completing Project Enhancements, to refund all or part of a Series of Bonds, or for any combination of such purposes. Each Series of Additional Bonds is to be issued pursuant to a Supplemental Indenture. The Indenture provides that if such Series of Additional Bonds will be Senior Lien Bonds they shall be equally and ratably secured under the Indenture with all other Senior Lien Bonds, without preference, priority or distinction of any Senior Lien Bonds over any other Senior Lien Bonds. The Indenture also provides that if such Series of Additional Bonds will be Subordinate Lien Bonds, they shall be equally and ratably secured under the Indenture with other Subordinate Lien Bonds, without preference, priority or distinction of any Subordinate Lien Bonds over any other Subordinate Lien Bonds. Additional Bonds may be issued, without condition or qualification, for the limited purpose of funding Safety Compliance Orders, subject to the requirements of the Senior Loan Agreement and the TIFIA Loan Agreement. The Trustee is required to authenticate and deliver such Additional Bonds, but only upon receipt by the Trustee of, among other things, the following: E-3

124 (a) A certificate of the Issuer dated as of the date of delivery of such Additional Bonds, stating that as of the date of such certificate, no event or condition has happened or existed, or is happening or existing, that constitutes, or that, with notice or lapse of time or both, would constitute, an Event of Default (as defined in Events of Default below) by the Issuer under the Indenture; (b) A certificate of the Borrower dated as of the date of delivery of such Additional Bonds, requesting the issuance and approving the terms of the Additional Bonds and stating (i) the Borrower is in compliance with each Loan Agreement, (ii) the issuance of the Additional Bonds will not cause an Event of Default or covenant violation under any Loan Agreement or other Collateral Documents, and (iii) either that (A) as of the date of such certificate no event or condition has happened or has existed, or is happening or existing, that constitutes, or that, with notice or lapse of time or both, would constitute, an Event of Default under any Loan Agreement or (B) if any such event or condition is happening or existing, specifying such event or condition and stating that such event or condition will be corrected promptly after the issuance of such Additional Bonds directly by the application of the proceeds of such Additional Bonds; (c) If such Additional Bonds are Senior Lien Bonds, a certified or bank cashier s check or federal funds wire or investments, letters of credit or surety bond policies qualifying for investment of amounts in the Debt Service Reserve Fund in the amount, if any, necessary, together with any funds provided from the proceeds of such Additional Bonds, to increase the amount in the Debt Service Reserve Fund to not less than the Cumulative Debt Service Reserve Fund Requirement applicable after the issuance of such Additional Bonds; (d) If such Additional Bonds are for the purpose of completing the Project or any Project Enhancements for which Bonds have previously been issued, a written statement of the Independent Engineer setting forth the Independent Engineer s (i) estimate of the cost of completing the Project or the applicable Project Enhancements and the date on which the Project or the applicable Project Enhancements will be completed and (ii) opinion that the proceeds of such Additional Bonds, together with any other moneys available for such purpose, will be sufficient to pay the cost of completing the Project or the applicable Project Enhancements; provided, that the aggregate principal amount of such Additional Bonds shall not be in an amount greater than 10% of the aggregate principal amount of the Bonds issued to finance the Project or the applicable Project Enhancements, as the case may be; (e) If such Additional Bonds are Senior Lien Bonds for each 12-month period (beginning on the first day of the first month after the issuance of such Additional Bonds and through the period ending on the latest maturity date of the Senior Lien Bonds then Outstanding immediately prior to the issuance of such Additional Bonds), the Senior Debt Service Coverage Ratio, calculated in accordance with the Calculations and Forecasting Agreement, shall be required to be projected to be at least 1.50 to 1.00, taking the proposed Additional Bonds into account, as shown by forecasted statements of Revenues and Operating Costs for such period, accompanied by a statement of the relevant assumptions upon which such forecasted statements are based; (f) If such Additional Bonds are Subordinate Lien Bonds, calculated in accordance with the Calculations and Forecasting Agreement, for each 12-month period (beginning on the first day of the first month after the issuance of such Additional Bonds and through the period ending on the latest maturity date of the Senior Lien Bonds and Subordinate Lien Bonds then Outstanding immediately prior to the issuance of such Additional Bonds), the Senior Debt Service Coverage Ratio shall be required to be projected to be at least 1.50 to 1.00 and the Total Debt Service Coverage Ratio, calculated in accordance with the Calculations and Forecasting Agreement, shall be required to be projected to be at least 1.20 to 1.00, taking the proposed Additional Bonds into account, as shown by forecasted statements of revenues and expenses for such period, accompanied by a statement of the relevant assumptions upon which such forecasted statements are based; (g) If such Additional Bonds are for the purpose of refunding all or part of one or more Series of Senior Lien Bonds: E-4

125 (i) If the Bonds to be refunded are to be redeemed prior to maturity, irrevocable instructions from the Borrower and the Issuer, to redeem all Bonds to be redeemed and such evidence as the Trustee deems appropriate as to the adequacy of funds to provide for such redemption and/or payment; and (ii) If all Outstanding Bonds are not to be refunded, either (i) computations (prepared or verified by an independent public accountant), showing that throughout the period beginning on the date of the issuance of the Additional Bonds and ending 12 months after the final maturity of all Bonds outstanding immediately prior to the issuance of such Additional Bonds (other than Bonds being refunded from the proceeds of the Additional Bonds), the Maximum Annual Debt Service (taking into account the issuance of such Additional Bonds) will not be more than the Maximum Annual Debt Service immediately prior to the issuance of such Additional Bonds, or (ii) a certificate meeting the requirements described in (e) or (f) above, as applicable. (h) A certificate of VDOT that the Borrower is in compliance with the Comprehensive Agreement, delivered after the Trustee has given notice of the proposed issuance of such Additional Bonds to VDOT. (i) If such Additional Bonds are Senior Lien Bonds, confirmation from at least one rating agency that such Additional Bonds have an investment grade rating (without taking into account any Credit Facility or Liquidity Facility that may be being provided in relation to such Additional Bonds); provided that, for the purposes of this paragraph (i), an investment grade rating must be a rating of at least, BBB- if given by S&P, BBB- if given by Fitch and Baa3 if given by Moody s. Bond Anticipation Notes. The Indenture provides that whenever the Issuer authorizes the issuance of a Series of Bonds, the Issuer may authorize the issuance of notes in anticipation of such Series. The principal of and interest on such notes will be payable from the proceeds of such notes, or from the proceeds of the sale of the Series of Bonds in anticipation of which such notes are issued and as otherwise provided in the Supplemental Indenture. The provisions of the Indenture relating to Bonds will apply equally to bond anticipation notes except as otherwise provided in a Supplemental Indenture. Covenants of the Issuer. The Issuer has made representations, warranties and covenants under the Indenture including, but not limited to, the following: (a) The Issuer will not, except as specifically permitted with respect to Bonds, the Hedge Agreements and the Credit Facility pursuant to the Indenture, pledge, grant, create or permit to exist in any manner any lien, encumbrance or Security Interest on, or rights with respect to, the Trust Estate, except for a contract or agreement under which the financial obligations of the Issuer and the rights of any Person to require the Issuer to make any payment are (i) limited to (A) moneys in the Funds and Accounts that are to be used pursuant to such contract or agreement for the purposes for which moneys in such Funds and Accounts may be used pursuant to the terms of the Indenture or (B) moneys of the Issuer that are not part of the Trust Estate; and (ii) subordinate to (A) the rights of the Owners of the Bonds under the Indenture and (B) the rights of the provider of any Credit Facility, Liquidity Facility or Hedge Agreement under the Indenture, and any agreement between or among the Issuer and the provider of any Credit Facility, Liquidity Facility or Hedge Agreement. (b) The Issuer will not take any action or omit to take any action with respect to the Bonds, the proceeds of the Bonds, the Trust Estate, the Project or any other funds or property of the Issuer, and it will not permit any other Person to take any action or omit to take any action with respect to the Bonds, the Trust Estate, the Project or any other funds or property of the Issuer if such action or omission would cause interest on any of the Bonds to be included in gross income for federal income tax purposes. In furtherance of this covenant, the Issuer agrees to comply with the procedures set forth in the Tax Compliance Certificate for each Series of Bonds. The Indenture provides that such tax covenants shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all of the Issuer obligations in fulfilling such covenants E-5

126 have been met but that such covenants shall not apply to any Series of Bonds if, at the time of issuance, the Issuer intends the interest on such Series of Bonds to be subject to federal income tax. Flow of Funds The Indenture requires that all Revenues be deposited to the Revenue Fund and prescribes the deposits, transfers and uses of moneys in the funds and accounts established under the Indenture, some of which change during a Term Out Period. The flow of funds required by the Indenture during a Term Out Period is described in the front portion of this Remarketing Circular under SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Flow of Funds. When a Term Out is not in effect Revenues deposited to the Revenue Fund are to be applied as described below on the last day (or the preceding day if such last day is not a Business Day) of each calendar month (or on any other date specified for any such transfer by any applicable Supplemental Indenture) (a Transfer Date ) in the following order of priority: First, to the Borrower to pay the projected Operating Costs (other than any bonus payments payable to the Design-Build Contractor under the Design-Build Contract, or Capital Expenditures) to the extent to be used solely in respect of meeting the Borrower s obligations under a Safety Compliance Certificate (as defined in the Indenture), in each case then due and payable or reasonably expected to become due and payable prior to the next succeeding Transfer Date; Second, after the application for such purposes of (x) funds on deposit in the Construction Fund and (y) funds from the Major Maintenance Reserve Fund, an amount equal to the cost of Major Maintenance required to comply with the Borrower s obligations under the Comprehensive Agreement or to comply with applicable Laws related to safety then due and payable or reasonably expected to become due and payable prior to the next succeeding Transfer Date; Third, to pay on a pari passu basis fees, administrative costs and expenses then due and payable or reasonably expected to become due and payable on or before the next succeeding Transfer Date to the Trustee under the Master Indenture or any Supplemental Indenture, to any Credit Provider or Liquidity Provider and to the TIFIA Bondholder or any agent or trustee for the TIFIA Bondholder, in its respective capacity as loan servicer with respect to the TIFIA Bond, under the TIFIA Loan Agreement, and amounts required to be paid into the Rebate Fund; Fourth, to pay Senior Interest Payments for deposit into the Senior Lien Bonds Interest Account in an amount equal to (A) with respect to any Senior Interest Payment that has an Interest Period of one month or less, the amount due on such Transfer Date and the amount to become due before the next succeeding Transfer Date, taking into account amounts then on deposit in the Senior Lien Bonds Interest Account and any amount to be transferred from the Capitalized Interest Fund to such Account with respect to interest on such Transfer Date, and (B) with respect to any Senior Interest Payment that has an Interest Period of greater than one month, the result of the total amount of Senior Interest Payments due on the next Interest Payment Date divided by the number of months in such Interest Period; provided that the monthly deposit on the Transfer Date which is on or immediately before the next Interest Payment Date will take into account the amount then on deposit in the Senior Lien Bonds Interest Account and any amount to be transferred from the Capitalized Interest Fund to such Account with respect to interest on such Transfer Date; Fifth, to pay Senior Principal Payments for deposit into the Senior Lien Bonds Principal Account starting on the Transfer Date which is six months before any Principal Payment Date and on each Transfer Date falling on or before such Principal Payment Date, an amount equal to 1/6th of the amount of Senior Principal Payments due on such Principal Payment Date; provided that the deposit on the Transfer Date occurring on or immediately before such Principal Payment Date will take into account the amount then on deposit in the Senior Lien Bonds E-6

127 Principal Account and such deposit to the Senior Lien Bonds Principal Account will be an amount equivalent to the result of (a) the amount of Senior Lien Bond principal due and payable on such Principal Payment Date, minus (b) the amount standing to the credit of the Senior Lien Bonds Principal Account; provided that, if the result is not a positive number, it will be deemed to be zero and no deposit into the Senior Lien Bonds Principal Account will be required to be made on such Transfer Date; Sixth, to the appropriate Hedging Bank the amount of (i) any Hedging Termination Obligation upon termination of any Hedge Agreement (other than any Partially Subordinated Hedge) and (ii) with respect to any Partially Subordinated Hedge, any Hedging Termination Obligation upon either (A) a tax or illegality event or failure of the Borrower to pay Hedge Obligations or (B) the acceleration of the maturity of any Senior Lien Bond other than due to a failure to pay a Hedging Termination Obligation in respect of a Partially Subordinated Hedge; Seventh, to the Debt Service Reserve Fund the amount needed so that such Fund contains the applicable Cumulative Debt Service Reserve Fund Requirement; Eighth, to pay Mandatory Debt Service on the TIFIA Bond for deposit in the Subordinate Lien Bonds Interest Account in an amount equal to (A) with respect to any Mandatory Debt Service on the TIFIA Bond that has an Interest Period of one month or less, the amount due on such Transfer Date and the amount to become due before the next succeeding Transfer Date, taking into account amounts then on deposit in the Subordinate Lien Bonds Interest Account, and (B) with respect to any Mandatory Debt Service on the TIFIA Bond that has an Interest Period of greater than one month, the result of the total amount of Mandatory Debt Service on the TIFIA Bond due on the next Interest Payment Date divided by the number of months in such Interest Period; provided that the monthly deposit on the Transfer Date which is on or immediately before the next Interest Payment Date shall take into account the amount then on deposit in the Subordinate Lien Bonds Interest Account; Ninth, to the O&M Reserve Fund the amount necessary to maintain the O&M Reserve Required Balance; Tenth, to the Major Maintenance Reserve Fund the amount necessary to maintain the Major Maintenance Reserve Required Balance; Eleventh, to pay interest constituting Scheduled Debt Service for deposit into the Subordinate Lien Bonds Interest Account to an amount equal to (A) with respect to any interest constituting Scheduled Debt Service that has an Interest Period of one month or less, the amount due on such Transfer Date and the amount to become due before the next succeeding Transfer Date, taking into account amounts then on deposit in the Subordinate Lien Bonds Interest Account, and (B) with respect to any interest constituting Scheduled Debt Service that has an Interest Period of greater than one month, the result of the total amount of interest constituting Scheduled Debt Service due on the next Interest Payment Date divided by the number of months in such Interest Period; provided that the monthly deposit on the Transfer Date which is on or immediately before the next Interest Payment Date shall take into account the amount then on deposit in the Subordinate Lien Bonds Interest Account; Twelfth, to pay principal or maturity value (including the principal component of the Redemption Price due in connection with any mandatory sinking fund redemption) constituting Scheduled Debt Service ( TIFIA Scheduled Principal ) for deposit into the Subordinate Lien Bonds Principal Account starting on the Transfer Date which is six months before any Principal Payment Date and on each Transfer Date falling on or before such Principal Payment Date, an amount equal to 1/6th of the amount of TIFIA Scheduled Principal due on such Principal Payment Date; provided that the deposit on the Transfer Date occurring on or immediately before such Principal Payment Date shall take into account the amount then on deposit in the Subordinate Lien Bonds Principal Account and such deposit to the Subordinate Lien Bonds Principal Account shall be an amount equivalent to the result of (a) the amount of TIFIA Scheduled Principal due and payable on such Principal Payment Date, minus (b) the amount standing to the credit of the Subordinate Lien Bonds Principal Account; E-7

128 provided that, if the result is not a positive number, it shall be deemed to be zero and no deposit into the Subordinate Lien Bonds Principal Account shall be required to be made on such Transfer Date; Thirteenth, to pay Debt Service on other Subordinate Lien Bonds due or to become due prior to the next succeeding Interest Payment Date on such other Subordinate Lien Bonds, to the Subordinate Lien Bonds Interest Account or Principal Account, as applicable, the amount which together with any amounts then on deposit in such Accounts after payments made with respect to the TIFIA Bond as described in Eighth, Eleventh and Twelfth above, equals the amount of Debt Service due on such Subordinate Lien Bonds on such date or to become due prior to the next succeeding Transfer Date; Fourteenth, to pay all other amounts not referred to in Fourth or Fifth above, payable in respect of the Senior Lien Bonds; Fifteenth, to the appropriate Hedging Bank the amount of any Hedging Termination Obligations upon termination of any Partially Subordinated Hedge (other than those described in the above subsection sixth ); Sixteenth, to pay costs for any Project Enhancements and other discretionary Capital Expenditures; Seventeenth, to pay any bonus payments payable to the Design-Build Contractor under the Design-Build Contract (to the extent payable from amounts on deposit in the Revenue Fund); and Fund. Eighteenth, all remaining amounts in the Revenue Fund, if any, is to be transferred to the Distribution The Indenture requires the Borrower to deliver to the Trustee and the TIFIA Bondholder, with a copy to the Instructing Controlling Party, a funds transfer certificate prior to each Transfer Date. Each such funds transfer certificate is to set forth the amounts proposed to be transferred from the Revenue Fund to each other Fund or Account on such Transfer Date; provided, that if any proposed transfer would be in violation of the Indenture or the other Financing Documents, the Instructing Controlling Party will have the right to direct the Trustee to disregard such funds transfer certificate and to instruct the Trustee to make on such Transfer Date deposits to the Funds and/or Accounts as the Instructing Controlling Party will deem necessary in order for the Borrower to comply with the terms and conditions of the Indenture and the other Financing Documents. The Indenture provides that if any funds transfer certificate requests that amounts be transferred from the Revenue Fund to the Borrower to pay Operating Costs, such funds transfer certificate is to set forth required information regarding estimated and budgeted Operating Costs. If the Borrower at any time receives a payment of Borrower Damages in respect of future Net Revenue Impact ( Future Borrower Damages ), the Borrower will be required to instruct the Trustee to deposit such Future Borrower Damages into the Revenue Fund together with a calculation showing a breakdown of how much of such Borrower Damages are applicable to each future year for which such amount was paid as compensation in respect of Net Revenue Impact. The Indenture requires that the Borrower accompany any such Future Borrower Damages calculation with, to the extent available, a report of the Traffic Consultant or a copy of any connected agreement prepared between the Borrower and VDOT. As of the commencement of each Fiscal Year for which such Future Borrower Damages were paid, the amount of Future Borrower Damages allocated to such year will be available to be transferred from the sub-account into the Revenue Fund in the event that, on any Transfer Date, there is any shortfall in the amount available in the Revenue Fund to make any of the payments due on such date in accordance with the Indenture. The Indenture also provides that if the Borrower receives any moneys as collateral for the future payment obligations of any person for the use of the Project or with respect to any transponders distributed to such person E-8

129 by the Borrower in connection with the use of the Project by such person, the Borrower will instruct the Trustee to deposit such amounts into a sub-account of the Revenue Fund. In the event that such moneys are so deposited into such sub-account at the Borrower s written request, such amounts may be withdrawn from such sub-account for the purpose of returning such amounts to the relevant person or, to the extent that the Borrower will have become entitled to any such amounts, to fund the Revenue Fund. The proceeds of any Additional Bonds that refinance or replace all of the Outstanding Senior Lien Bonds are to be applied as follows (i) first, such proceeds will be paid directly towards the prepayment of the Senior Lien Bonds and to the payment of interest thereon and other amounts payable in connection therewith (including any Hedging Termination Obligations) and to the payment of the costs of issuance of such Additional Bonds (not to exceed 2% of the principal amount thereof) and to the funding of any required deposits; (ii) if any proceeds then remain, such proceeds will be applied in accordance with the TIFIA Loan Agreement; and (iii) if any proceeds then remain, such proceeds will be deposited into the Revenue Fund. Events of Default. Any of the following constitutes an Event of Default under the Indenture with respect to all the Outstanding Bonds: (a) Default in the payment of any portion of the Debt Service on, or the Redemption Price (excluding any redemption premium) of, any Outstanding Bond when due and payable, or a default in the payment of any Credit Facility Provider Liability, Hedge Obligations or Hedge Termination Obligations under the Indenture, when due and payable; or (b) Failure by the Issuer to cure any noncompliance with any other provision of the Indenture within 60 days after receiving written notice of such noncompliance from the Trustee or the Instructing Controlling Party with respect to the affected Series of Bonds; provided, that if the Owners of such Bonds are the Instructing Controlling party, then such notice shall have been issued by Owners of a majority of the Bonds; or (c) The occurrence, with respect to the Issuer, of a Bankruptcy Event; or (d) A Loan Agreement Default (other than any Loan Agreement relating to the proceeds of any Subordinate Lien Bonds) shall have occurred; or (e) An Event of Default, howsoever described, shall have occurred under the Reimbursement Agreement, or a demand for payment under the Reimbursement Agreement shall have been made, unless a notice rescinding such demand for payment is received no later than two Business Days prior to the date on which payment for such demand would otherwise have been due and payable under the Reimbursement Agreement; or (f) An Event of Default shall have occurred under the TIFIA Loan Agreement if no Senior Lien Bonds are Outstanding, no Credit Facility Provider Liabilities exist with respect to Credit Facilities securing Senior Lien Bonds and no Hedge Obligations exist under any Senior Hedge Agreements; or (g) An Event of Default, howsoever described, shall have occurred under a Loan Agreement relating to the proceeds of any Subordinate Lien Bonds other than the TIFIA Bond if no Senior Lien Bonds are Outstanding; no Credit Facility Provider Liabilities exist with respect to Credit Facilities securing Senior Lien Bonds, no obligations exist under any Senior Loan Agreements and the TIFIA Bond is not Outstanding. Remedies Following an Event of Default. (a) Upon the occurrence of an Event of Default, the Instructing Controlling Party may deliver to the Trustee a written notice, with a copy to the Issuer, that an Event of Default has occurred and is continuing. The Indenture provides that the Trustee is not deemed to have any knowledge of the occurrence of an Event of E-9

130 Default, unless and until it has received such a notice from the Instructing Controlling Party and that notwithstanding the foregoing, if more than fifty per cent of the aggregate outstanding principal amount of the Senior Lien Bonds do not have the benefit of a Credit Facility, then the Trustee can acknowledge that an Event of Default has occurred without notice from the Instructing Controlling Party. (b) Subject to the Intercreditor Agreement, at any time during which an Event of Default has occurred and is continuing commencing on the date of delivery by the Instructing Controlling Party to the Trustee of the notice described in the section above, the Instructing Controlling Party has the right to give the Trustee one or more enforcement directions directing the Trustee to take any of the following actions on behalf of the Senior Secured Parties: (i) If such Event of Default is in the payment of any portion of the Debt Service on, or the Redemption Price (excluding any redemption premium) of, any Outstanding Bond, the action to be taken is, without further demand or notice, transfer moneys to the Senior Lien Bonds Interest Account or Senior Lien Bonds Principal Account, as applicable, from other Funds and Accounts as provided in, and subject to the limitations set forth in, the Indenture; and (ii) For all other Events of Default, subject to the section below, the action to be taken is whatever action at law or in equity may appear necessary or desirable to enforce the rights of the Senior Secured Parties and shall deposit any moneys received as a result of such action in the Senior Lien Bonds Interest Account or Senior Lien Bonds Principal Account, as applicable. (c) The Indenture provides that upon an Event of Default, if so instructed by the Instructing Controlling Party, the Trustee is required to declare all Outstanding Senior Lien Bonds, all interest accrued and unpaid thereon, and all other amounts payable under the Senior Lien Bonds to be due and payable, whereupon the same shall become immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are waived by the Issuer; provided that the Outstanding Senior Lien Bonds may be accelerated as described in this clause only to the extent the underlying Loans under the applicable Loan Agreement have been accelerated. The Indenture also provides that so long as there are Senior Lien Bonds Outstanding, the TIFIA Bonds are subject to acceleration only upon satisfaction of the applicable conditions in the Intercreditor Agreement. (d) The Indenture permits the Trustee to enforce all rights and actions and claims under the Indenture on behalf of the Senior Secured Parties and provides that any recovery of judgment by the Trustee, after provision for the payment of the reasonable expenses of the Trustee and its advisors, be for the benefit of the other Senior Secured Parties and be applied as provided in, and subject to the provisions summarized below under Use of Moneys Received from Exercise of Remedies. In the case of pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization or other similar judicial proceeding relative to the Issuer or the Trust Estate, the Trustee and the TIFIA Bondholder to the extent permitted by the Intercreditor Agreement are, upon receipt of written instructions from the Instructing Controlling Party, entitled to file and prove a claim for the amount of the Issuer s obligations to the Senior Secured Parties owing and unpaid and to file such other papers or documents as may be necessary in order to have the claims of the Senior Secured Parties allowed in such judicial proceeding and, to the extent permitted by Law, to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same in accordance with the terms hereof. (e) The Indenture also provides that subject to the Intercreditor Agreement, after the occurrence of a Bankruptcy Related Event, the TIFIA Bond is to be treated as a Senior Lien Bond in all respects other than in relation to the benefit of the Security Interest in the Debt Service Reserve Fund and as provided in the Indenture. Use of Moneys Received from Exercise of Remedies. E-10

131 (a) Prior to acceleration, if moneys that are available to pay the Debt Service on, and the Redemption Price (excluding any redemption premium) of, the Bonds, to pay any amounts due under any Hedge Agreement, and to pay any amounts due with respect to the reimbursement of a Credit Provider for its payment on the Bonds are not sufficient to pay 100 percent of the Debt Service on, and the Redemption Price (excluding any redemption premium) of, all Bonds, to pay any amounts due under any Hedge Agreement, and to pay any amounts due with respect to the reimbursement of a Credit Provider for its payment on the Bonds, such monies are required to be used to pay the Debt Service on, and the Redemption Price (excluding any redemption premium) of, the Bonds, to pay any amounts due under any Hedge Agreement, and to pay any amounts due with respect to the reimbursement of a Credit Provider for its payment on the Bonds, in the following order of priority: (i) First, the interest component of the Debt Service and Redemption Price due on the Bonds, to pay any Hedging Obligations and to pay any amounts due with respect to the reimbursement of a Credit Provider for its payment of interest on the Bonds. If more than one installment of interest is due on the Bonds or more than one installment of Hedging Obligations is due, or any amounts due with respect to the reimbursement of a Credit Provider for its payment of interest on the Bonds, such installments are to be paid in the order in which they were due, with the first installment being paid first. If the amount available is insufficient to pay all of any particular installment of interest due on the Bonds or any installment of Hedging Obligations, or any amounts due with respect to the reimbursement of a Credit Provider for its payment of interest on the Bonds, the amount available is required to be paid ratably, based on the ratio of the amount due on each such obligation to the total amount due on all such obligations. The Indenture provides that the difference between the Original Principal Amount and the Accreted Value of a Capital Appreciation Bond is to be treated as interest for this purpose. (ii) Second, the principal component of the Debt Service and Redemption Price due on the Bonds, to pay Hedging Termination Obligations and to pay amounts due with respect to the reimbursement of a Credit Provider for its payment of principal (including principal component of the Redemption Price) on the Bonds. If principal is due that was to have been paid on more than one date, the amounts due on the earliest dates are required to be paid first. If the amount available is insufficient to pay all the principal on the Bonds, to pay all Hedging Termination Obligations then due and to pay amounts due with respect to the reimbursement of a Credit Provider for its payment of principal (including principal component of the Redemption Price) on the Bonds due on any particular date, the amount available is to be paid ratably, based on the ratio of the amount due on each such Bond or under any Hedge Agreement or any Reimbursement Agreement to the amount due on all the Bonds, and amounts due under all Hedge Agreements and all Reimbursement Agreements. The Original Principal Amount of a Capital Appreciation Bond is to be treated as principal for purposes of this paragraph. (iii) Third, subject to the Intercreditor Agreement, the provisions of the above sections hereof apply separately to Senior Lien Bonds and Subordinate Lien Bonds, and any Hedge Agreement and Credit Facility with respect thereto, and no payments are to be made to Subordinate Lien Bonds, and any Hedge Agreement and Credit Facility with respect thereto, have been made. (b) After an acceleration pursuant to the Indenture, moneys received by the Trustee resulting from the sale or disposition pursuant to a foreclosure or a sale or disposition in lieu of foreclosure by the Trustee against the Collateral (as defined in the Security Agreement) following an Event of Default hereunder and under the other Collateral Documents are required to be applied first to pay the reasonable and proper fees and expenses of the Trustee determined in accordance with the Indenture and incurred in connection with the exercise of remedies following such Event of Default, and thereafter remaining amounts are to be applied promptly by the Trustee as follows: (i) In the event that an Event of Default has occurred and clause (ii) below is not applicable, the Trustee is required to distribute all amounts received by it hereunder and under the other Collateral E-11

132 Documents to the Secured Parties in the following order of priority: first, to pay, pro rata (A) all Debt Service on the Senior Lien Bonds then outstanding, (B) any payments due with respect to the reimbursement of any Credit Provider for its payment of interest on any Senior Lien Bonds, and (C) any Hedging Obligations then due and payable under any Senior Hedge Agreements; second, to pay, pro rata, (A) any unpaid principal amounts due and payable on any Senior Lien Bonds, (B) any payments due with respect to the reimbursement of any Credit Provider for its payment of principal on any Senior Lien Bonds, and (C) any Hedging Termination Obligations then due and payable under any Senior Hedge Agreements, in each case, without preference or priority of any amount due over any other amount due or any installment over any other installment, or of any such Series of Senior Lien Bonds, payments due to Credit Providers or Hedging Obligations or Hedging Termination Obligations under any Senior Hedge Agreements over any other such Series of Senior Lien Bonds, payments due to Credit Providers or amounts due under Senior Hedge Agreements; and third, upon the payment in full of the obligations described in clauses first and second above, to pay accrued and unpaid interest and any unpaid principal amounts due and payable on the Subordinate Lien Bonds until all such amounts have been indefeasibly paid in full, and finally; fourth, to pay to the Borrower, or its successors and assigns, or as a court of competent jurisdiction may direct, any monies then remaining. (ii) In the event that a Bankruptcy Related Event has occurred and is continuing (including any Bankruptcy Related Event occurring by reason of a sale or disposition of Collateral under the Indenture or the other Security Documents), subject to the Intercreditor Agreement, the Trustee is required to distribute all amounts received by it hereunder and under the other Collateral Documents to the Secured Parties in the following order of priority: first, to pay, pro rata, (A) all Debt Service on the Senior Lien Bonds and all accrued and unpaid interest payable on any TIFIA Bonds, (B) payments due with respect to the reimbursement of any Credit Provider for its payment of interest on any Senior Lien Bonds and (C) any Hedging Obligations then due and payable under any Hedging Agreements to the Hedging Banks; second, to pay, pro rata (A) any unpaid principal amounts due and payable on any Senior Lien Bonds and any TIFIA Bonds, (B) payments due with respect to the reimbursement of any Credit Provider for its payment of principal on any Senior Lien Bonds and (C) any Hedging Termination Obligations then due and payable under any Hedging Agreements to the Hedging Banks; third, upon payment in full of the obligations described in clause first and second above, to pay accrued and unpaid interest and any unpaid principal amounts due and payable on any Subordinate Lien Bonds until all such amounts have been indefeasibly paid in full, and finally; fourth, to pay to the Borrower, or its successors or assigns, or as a court of competent jurisdiction may direct, any amounts then remaining. Instructing Controlling Party May Control Proceedings. Notwithstanding any other provision hereof and unless provided otherwise in any Supplemental Indenture, and subject to the Intercreditor Agreement, the Instructing Controlling Party shall (with each such Series voting as a class), subject to the limitations on remedies set forth in the Indenture, always have the right, at any time, to the extent permitted by law, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all proceedings to be taken in pursuit of remedies following an Event of Default or otherwise in connection with the enforcement of the terms of the Indenture. Limitations on Rights of Owners Acting Individually. No Owner will have any right to institute any suit, action or proceeding at law or in equity for the enforcement of any remedy hereunder or for the enforcement of the terms of the Indenture, unless an Event of Default under the Indenture has occurred and the Instructing Controlling Party of the Series of Bonds with respect to which an Event of Default has occurred have made a written request to the Trustee, and have given the Trustee a reasonable opportunity, to take such action in its capacity as Trustee. The purpose of the preceding sentence is to assure that no Owner or Owners shall have the right to affect, disturb or prejudice the lien of the Indenture by his, her, its or their action or to enforce any right thereunder except in the manner therein provided and that all proceedings at law or in equity will be instituted and maintained in the manner therein provided and for the equal benefit of the Secured Parties. The Indenture E-12

133 provides that nothing in the foregoing will affect or impair the right of the Instructing Controlling Party to enforce the payment of the Debt Service on or Redemption Price of any Bond at and after the date such payment is due, subject, however, to the limitations on remedies set forth in the Indenture. Trustee May Enforce Rights Without Bonds. All rights of action and claims under the Indenture or any of the Outstanding Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or proceedings relative thereto; any suit or proceeding instituted by the Trustee is required to be brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any Owners; and any recovery of judgment is to be for the ratable benefit of the Owners, subject to the provisions hereof. Trustee to File Proofs of Claim in Receivership, Etc. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceedings affecting the Trust Estate, the Trustee is required to, to the extent permitted by law, be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have claims of the Trustee of the Owners allowed in such proceedings for the entire amount due on the Bonds under the Indenture, at the date of the institution of such proceedings and for any additional amounts which may become due by it after such date, without prejudice, however, to the right of any Owner to file a claim in its own behalf. Delay or Omission No Waiver. No delay or omission of the Trustee or of any Owner to exercise any remedy, right or power accruing upon any Event of Default or otherwise is to exhaust or impair any such remedy, right or power or be construed to be a waiver of any such Event of Default, or acquiescence therein; and every remedy, right and power given by the Indenture may be exercised from time to time and as often as may be deemed expedient. Discontinuance of Proceedings on Event of Default; Position of Parties Restored. In case the Trustee or any Owner have proceeded to enforce any right under the Indenture and such proceedings has been discontinued or abandoned for any reason, or have been determined adversely to the Trustee or such Owner, then and in every such case the Issuer, the Trustee and the Owners are to be restored to their former positions and rights, and all rights, remedies and powers of the Trustee and the Owner are to continue as if no such proceedings had been taken Waivers of Events of Default. The Trustee, notwithstanding anything else to the contrary contained in the Indenture, will waive any Event of Default upon the written direction of the Instructing Controlling Party; provided, however, that any Event of Default in the payment of the Debt Service on, or the Redemption Price of, any Bond or payments under a Senior Hedge Agreement when due there shall not be waived without the consent of the Owners of 100% of the Bond Obligation represented by the Bonds or the providers of all Senior Hedge Agreements under which a Hedging Obligation or Hedging Termination Obligation is owed, with respect to which an Event of Default has occurred, unless, prior to such waiver, all such amounts (with interest on amounts past due on any Bond at the interest rate on such Bond or, in the case of a Capital Appreciation Bond, the interest rate determined by straight-line interpolation between Accretion Dates) and all expenses of the Trustee in connection with such Event of Default have been paid or provided for. In case of any such waiver, then and in every such case the Issuer, the Trustee and the Owners shall be restored to their former positions and rights hereunder, but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon. Rights of Instructing Controlling Party. Except to the extent expressly provided to the contrary in any Financing Document, any action to be taken by the Trustee under any of the Financing Documents or the Project Agreements will be made or taken only at the direction of the Instructing Controlling Party. E-13

134 Removal of Trustee. Subject to the provisions of any Supplemental Indenture, the present or any future Trustee may be removed at any time (a) by the Issuer in the event the Issuer reasonably determines that the Trustee is not duly performing its obligations hereunder or that such removal is in the best interests of the Issuer or the Owners; provided, that the Trustee may not be removed during the pendency of an Event of Default without the written consent of the Instructing Controlling Party, or (b) subject to the provisions of any Supplemental Indenture, by an instrument in writing executed by the Instructing Controlling Party, for any reason or for no reason. Supplemental Indentures Not Requiring Consent of Secured Parties. The Issuer and the Trustee (acting on the instructions of the Instructing Controlling Party) may, without the consent of, or notice to, the Secured Parties, enter into a Supplemental Indenture for any one or more or all of the following purposes: (a) Indenture; (b) to add additional covenants to the covenants and agreements of the Issuer set forth in the to add additional revenues, properties or collateral to the Trust Estate; (c) to cure any ambiguity, or to cure, correct or supplement any defect or omission or inconsistent provision contained in the Indenture; (d) to amend any existing provision thereof or to add additional provisions which, in the opinion of Bond Counsel, are necessary or advisable (i) to qualify, or to preserve the qualification of, the interest on any Bonds for exclusion from gross income for federal income tax purposes or for exclusion from federal alternative minimum tax; (ii) to qualify, or to preserve the qualification of, any Bonds for exemption from taxation and assessment in the Commonwealth; (iii) to qualify, or to preserve the qualification of, the Indenture or any Supplemental Indenture under the federal Trust Indenture Act of 1939; or (iv) to qualify, or preserve the qualification of, any Bonds for an exemption from registration or other limitations under the laws of any state or territory of the United States; (e) to amend any provision of the Indenture relating to the Rebate Fund if, in the opinion of Bond Counsel, such amendment does not adversely affect the exclusion of interest on any Bonds from gross income for federal income tax purposes; (f) (g) to provide for or eliminate book-entry registration of any of the Bonds; to obtain or maintain a rating of the Bonds by a rating agency; (h) to authorize the issuance of any Series of Bonds in accordance with the Indenture hereto and to provide the terms of Bonds not inconsistent herewith; (i) to facilitate the provision of a Credit Facility, Liquidity Facility or a Hedge Agreement in accordance with the Senior Loan Agreement or any other Loan Agreement, including adding any payments with respect thereto to the flow of funds as set forth in the Indenture; (j) to facilitate the receipt of Revenues; (k) to establish additional funds, accounts or subaccounts necessary or useful in connection with any Supplemental Indenture authorized by any other provision of the Indenture; or (l) in connection with any other change which, in the judgment of the Trustee, does not materially adversely affect the rights of the Secured Parties. E-14

135 Supplemental Indentures Requiring Consent of Secured Parties. Except as expressly provided in Supplemental Indentures Not Requiring Consent of Secured Parties, the Issuer and the Trustee may not enter into a Supplemental Indenture without the written consent of each Secured Party with respect to each Series of Bonds affected thereby, subject to the provisions of any Supplemental Indenture; provided, however, that no Supplemental Indenture modifying the Indenture in the way described below may be entered into without the written consent of the Owner of each Bond or provider of a Credit Facility or Hedge Agreement affected thereby, subject to the provisions of any Supplemental Indenture: (a) a reduction of the interest rate, Debt Service or Redemption Price payable on any Bond, a change in the maturity date of any Bond, a change in the Original Principal Amount of any Capital Appreciation Bond, a change in any Interest Payment Date for any Current Interest Bond or any Accretion Date for any Capital Appreciation Bond or a change in the redemption provisions applicable to any Bond; (b) the deprivation of an Owner or the provider of a Credit Facility or Senior Hedge Agreement of the Security Interest of the Trust Estate granted in the Indenture; (c) the creation of a priority right in the Trust Estate of another Bond, Credit Facility or Senior Hedge Agreement over the right of the affected Bond or the affected Credit Facility or Senior Hedge Agreement, except as permitted herein; (d) a reduction in the percentage of the aggregate Bond Obligations required for consent to any Supplemental Indenture or the parties whose consent is required; or (e) the amount, timing or security of any obligation owed under a Senior Hedge Agreement. Consent of Credit Provider or Hedging Banks. No Supplemental Indenture that would have a material adverse effect on a Credit Provider or Hedging Bank will take effect without the consent of such Person. Consent of TIFIA Bondholder. No Supplemental Indenture that would have a material adverse effect on the TIFIA Bondholder will take effect without the consent of the TIFIA Bondholder. Amendments to Loan Agreement, Collateral Documents and Note Not Requiring Consent of Secured Parties. The Issuer and the Trustee may upon receipt of an opinion of Bond Counsel to the effect that the proposed amendment will not adversely affect the excludability of interest on any Series of Bonds from gross income for federal income tax purposes (to the extent that the Issuer intended that interest on such Bonds is to be excluded from gross income for federal income tax purposes) and is authorized by the Indenture, and with the consent of the Instructing Controlling Party, consent to any amendment, change or modification of any Loan Agreement or Note or the Collateral Documents as may be required (i) by the provisions of such Loan Agreement or Note or the Collateral Documents, (ii) for the purpose of curing any ambiguity or formal defect or omission in such Loan Agreement or Note or the Collateral Documents, (iii) to enter into an indenture or indentures supplemental to the Indenture as provided in Supplemental Indentures Not Requiring Consent of Secured Parties, (iv) to make any revisions that shall be required by a rating agency in order to obtain or maintain an investment grade rating on the Bonds, (v) in connection with any other change therein which, in the judgment of the Trustee, is not to the prejudice of the Trustee or the Secured Parties, (vi) to facilitate the provision of any Credit Facility, Liquidity Facility or Hedge Agreement in accordance with such Loan Agreement; or (vii) to make revisions thereto which will be effective only upon, and in connection with, the remarketing of all of the Bonds then Outstanding. Amendments to Loan Agreements, Security Documents, Collateral Documents and Notes Requiring Consent of Secured Parties. Except for the amendments, changes or modifications as provided in Amendments to Loan Agreements, Security Documents, Collateral Documents and Notes Requiring Consent of Secured E-15

136 Parties, neither the Issuer nor the Trustee will consent to any other amendment, change or modification of any Loan Agreement or Note or any Collateral Document without mailing of notice and the written approval or consent of the Controlling Party of the Series of Bonds which is affected by such amendment, change or other modification; provided, that the consent of all of the Secured Parties is required for any amendment, change or modification of such Loan Agreement or Note or any Collateral Document that would permit the termination or cancellation of such Loan Agreement or any Collateral Document or a reduction in or postponement of the payments under such Loan Agreement or Note or any Collateral Document or any change in the provisions relating to payment thereunder. Discharge of Indenture. Subject to the provisions of any Supplemental Indenture, if 100% of the Debt Service and Redemption Price due, or to become due, on all the Bonds, all rebate payments payable to the United States with respect to the Bonds, the fees and expenses due to the Trustee and all other amounts payable (including but not limited to amounts owed under any Hedge Agreement, Liquidity Facility or Credit Facility or any reimbursement agreement) hereunder have been paid, or provision shall have been made for the payment thereof in accordance with Defeasance of Bonds below, and provided that all Liquidity Facilities and Credit Facilities have expired or terminated, and the opinion of Bond Counsel required by Opinion of Bond Counsel below has been delivered, then, (a) the right, title and interest of the Trustee in and to the Trust Estate shall terminate and be discharged (referred to herein as the discharge of the Indenture); (b) the Trustee shall transfer and convey to or to the order of the Issuer all property that was part of the Trust Estate, including but not limited to any moneys held in any Fund or Account hereunder, except any Defeasance Escrow Account created pursuant to Defeasance of Bonds below (which Defeasance Escrow Account shall continue to be held in accordance with the agreement governing the administration thereof); and (c) the Trustee will execute any instrument requested by the Issuer to evidence such discharge, transfer and conveyance. Defeasance of Bonds. (a) Subject to the provisions of any Supplemental Indenture, all or any portion of the Outstanding Bonds will be deemed to have been paid (referred to herein as defeased ) prior to their maturity or redemption if: (i) if the defeased Bonds are to be redeemed prior to their maturity, the Issuer has irrevocably instructed the Trustee to give notice of redemption of such Bonds in accordance with the Indenture; (ii) there has been deposited in trust in a Defeasance Escrow Account either moneys in an amount which will be sufficient, or Defeasance Securities, to pay the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which, together with the moneys, if any, deposited into or held in the Defeasance Escrow Account, will be sufficient to pay when due the Debt Service or Redemption Price, as applicable, due and to become due on the defeased Bonds on and prior to the redemption date or maturity date thereof, as the case may be; (iii) a verification agent has delivered a verification report verifying the deposit described in paragraph (ii) of this subsection; and (iv) been delivered. the opinion of Bond Counsel required by Opinion of Bond Counsel below hereof has (b) The Defeasance Securities and moneys deposited in a Defeasance Escrow Account and the principal and interest payments on such Defeasance Securities will not be withdrawn or used for any purpose other than, and will be held in trust solely for, the payment of the Debt Service on and Redemption Price of the defeased Bonds; provided, however, that (i) any moneys received from principal and interest payments on such Defeasance Securities that are not required to pay the Debt Service on or Redemption Price of the defeased Bonds E-16

137 on the date of receipt will, to the extent practicable, be reinvested in Defeasance Securities maturing at the times and in amounts sufficient to pay when due the Debt Service on and Redemption Price to become due on the defeased Bonds on or prior to the redemption date or maturity date thereof, as the case may be; and (ii) any moneys or Defeasance Securities may be withdrawn from a Defeasance Escrow Account if (A) the moneys and Defeasance Securities that are on deposit in the Defeasance Escrow Account, including any moneys or Defeasance Securities that are substituted for the moneys or Defeasance Securities that are withdrawn from the Defeasance Escrow Account, satisfy the conditions stated in subsection (a)(ii) above and (B) a verification report and Bond Counsel opinion are delivered that comply with subsections (a)(iii) and (a)(iv) above. (c) Any Bonds that are defeased as provided in the Indenture shall no longer be secured by or entitled to any right, title or interest in or to the Trust Estate, and the Debt Service on and Redemption Price thereof will be paid solely from the Defeasance Securities and money held in the Defeasance Escrow Account. Opinion of Bond Counsel. Prior to any discharge of the Indenture pursuant to Discharge of Indenture or the defeasance of any Bonds pursuant to Defeasance of Bonds, Bond Counsel must have delivered a written opinion to the effect that all requirements of the Indenture for such discharge or defeasance have been complied with and that such discharge or defeasance will not constitute a violation by the Issuer of its tax covenant in Covenants of the Issuer above. Defeasance of Less than all Bonds of a Particular Series or Maturity. If less than all the Bonds of any particular Series, any particular maturity of any Series or any particular interest rate within a maturity of a Series are defeased, the Trustee will institute a system to preserve the identity of the individual Bonds or portions thereof that are defeased, regardless of changes in Bond numbers attributable to transfers and exchanges of Bonds. First Supplemental Indenture. Provisions for the Series 2008 Refunded Bonds and Initial Hedge Agreements. The First Supplemental Indenture provided for the issuance of the Series 2008 Refunded Bonds, their redemption and all other terms pertaining to the Series 2008 Bonds. The First Supplemental Indenture also provided for the execution of one or more Initial Hedge Agreements. The proceeds of the Series 2008 Refunded Bonds were used, among other sources of funds, to fund certain costs, including construction costs, development and start-up costs, funding of debt service, major maintenance, and ramp-up reserves, operating expenses expected for the Operating Period, funding various reserve funds related to the Series 2008 Refunded Bonds and to the Project, and certain financing costs. Requisitions from PABs Sub-Account of the Construction Fund and Costs of Issuance Account. There is created within the Construction Fund the Series 2008 Senior Lien Bonds Costs of Issuance Account and the PABs Sub-Account. The Borrower, by written notice to the Trustee, may withdraw amounts from the Costs of Issuance Account from time to time to pay or reimburse the Borrower or any of its affiliates for properly documented Costs of Issuance. The Borrower may request disbursements of moneys on deposit in PABs Sub- Account to pay or reimburse a prior payment of New Lanes Project Costs not more frequently than once per calendar month by delivering to the Trustee, with a copy to the Bank Agent, not later than the 5th Business Day prior to the proposed date of disbursement, a requisition signed by a borrower representative with a certificate of the Independent Engineer. Any amounts remaining on deposit in the Costs of Issuance Account on the day following the issuance of the Series 2008 Refunded Bonds shall be transferred to the Construction Fund, except for amounts segregated to pay annual Trustee fees and rating agency fees during construction of the Project as provided in the Tax Compliance Certificate, which shall remain on deposit on the Costs of Issuance Account until expended. Second Supplemental Indenture E-17

138 Provisions for the Series TIFIA Bond. The Amended and Restated Second Supplemental Indenture provided for the issuance of the Series TIFIA Bond, their redemption and all other terms pertaining to the Series TIFIA Bond to finance a portion of the Eligible Project Costs (as defined in the TIFIA Loan Agreement). Third Supplemental Indenture The Third Supplemental Indenture provided for the creation of a special sub-account within the Department Funding Account, designated the Capital Beltway Funding Corporation of Virginia Project Department Funding Change Order Sub-Account, for the payment of Department change orders. Fourth Supplemental Indenture Term Out Cash Sweep Fund. Among other things, the Fourth Supplemental Indenture provided for the creation of a special fund, designated the Capital Beltway Funding Corporation of Virginia Project Term Out Cash Sweep Fund. On and after the Term Out Date, the Term Out Cash Sweep Fund shall be funded in accordance with and subject to the flow of funds set forth under SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2008 NON-AMT BONDS AND OTHER SECURED OBLIGATIONS Flow of Funds above. On the earliest Stated Termination Date to occur, if any Liquidity Provider Bonds are then outstanding, and on each Calculation Date thereafter while any Liquidity Provider Bonds remain outstanding, funds then on deposit in the Term Out Cash Sweep Fund will be applied to make extraordinary redemption payments of the principal amount of all Bonds for which a Liquidity Facility has been provided then outstanding (together with accrued and unpaid interest on such amounts) in accordance with each Liquidity Provider s Pro Rata Share of the aggregate principal amount of Bonds then outstanding; provided that, if following a Term Out of one or more series of Liquidity Provider Bonds, all such Liquidity Provider Bonds are successfully remarketed pursuant to the Reimbursement Agreement or there is a Total Refinancing, in each case, prior to such earliest Stated Termination Date, then all amounts on deposit in the Term Out Cash Sweep Fund shall be transferred to the Revenue Fund on the date of such remarketing or Total Refinancing and applied in accordance with the Master Indenture. Fifth Supplemental Indenture Shared Services Reserve Fund. The Fifth Supplemental Indenture provides for the creation of the Shared Services Reserve Fund, funded with the access fee paid by the I-95 Concessionaire from the closing of the Shared Facilities Agreement, and deposited into the Shared Services Reserve Fund by the Trustee. Funds on deposit are to be used to pay Operating Cost and Debt Service on the Senior Lien Bonds to the extent that the funds on deposit and available for such purposes in the Revenue Fund, Ramp-Up Reserve Fund, the Revenue Stabilization Fund and the O&M Reserve Fund are not sufficient to pay such amount. Following the earlier of (i) the fifth (5th) anniversary of Substantial Completion or (ii) a Total Refinancing (as such term is defined in the Reimbursement Agreement), all remaining funds in the Shared Services Reserve Fund shall be deposited into the Distribution Fund and applied as provided in the Distribution Fund section of the Indenture, and the Shared Services Reserve Fund is to be closed. Sixth Supplemental Indenture Recapitalization Account. The Sixth Supplemental Indenture provides for the creation of a new account, the Recapitalization Account, into which certain equity contributions may be deposited with the Trustee. The funds from this Recapitalization Account, together with moneys transferred from certain cash accounts and reserve accounts held by the Trustee, are to be used for (a) the optional redemption of a portion of the outstanding Bonds, (b) the reimbursement of the Banks and a proportional reduction of each of the Letters of Credit and (c) the partial termination of one or more of the Hedge Agreements, including the payment of Hedging Termination Obligations (collectively, the Purposes ), by the Trustee at the written direction of the Borrower. E-18

139 Expansion of Permitted Uses of Cash and Reserve Accounts. The PABS Sub-Account of the Construction Fund, the Debt Service Reserve Fund, the Distribution Fund, the Ramp-Up Reserve Fund, the Capital Expenditure Reserve Fund, the Revenue Stabilization Reserve Fund, and the Shared Services Reserve Fund are all amended and restated to permit moneys on deposit in each of the accounts to be withdrawn and applied for the Purposes with the prior written consent of the Instructing Controlling Party. Accelerated Repayment Schedule. The Sixth Supplemental Indenture amends the Accelerated Repayment Schedule to mean the Accelerated Repayment Schedule attached as Schedule 1 to Amendment No. 1 to the Letter of Credit and Reimbursement Agreement. E-19

140 APPENDIX F SUMMARY OF CERTAIN PROVISIONS OF THE SENIOR LOAN AGREEMENT AND OF THE TIFIA LOAN AGREEMENT Set forth herein is a summary of certain sections of the Loan Agreement, dated as of June 1, 2008 (the Original Loan Agreement ), a First Amendment to Loan Agreement, dated as of December 1, 2010 (the First Amendment ), and the Waiver and Consent to Loan Agreement, dated as of June 5, 2014 (the Waiver and Consent, and collectively with the Original Loan Agreement and the First Amendment, the Senior Loan Agreement ), as well as a summary of certain sections of the Amended and Restated TIFIA Loan Agreement, dated as of June 1, 2008 (the TIFIA Loan Agreement ). This summary does not purport to be complete, and reference is made to the Senior Loan Agreement and the TIFIA Loan Agreement, copies of which are on file with the Trustee, for a complete statement of the rights, duties and obligations of the parties thereto. The headings herein are not part of the Senior Loan Agreement or the TIFIA Loan Agreement but have been added for ease of reference only. Capitalized terms used herein but not defined shall have the meaning given such terms in the Senior Loan Agreement, the TIFIA Loan Agreement, Appendix A or the front part of this Remarketing Circular. Senior Loan Agreement Borrower to Provide Funds. If the proceeds derived from the Loan made under the Senior Loan Agreement and other available funds are not sufficient to finance the New Lanes Project Costs, and pay all Issuance Costs (as defined in the Indenture) relating to the Bonds, the Borrower will pay such moneys as are necessary to provide for payment in full of such costs. The Borrower will not be entitled to any reimbursement therefor from the Issuer except as agreed to in writing among the parties or the Trustee nor shall it be entitled to any abatement, diminution or postponement of its payments hereunder or under the 2010 Note delivered by the Borrower pursuant to the Senior Loan Agreement. Repayment of Loan. The 2010 Note delivered by the Borrower pursuant to the Senior Loan Agreement secures payment of all Bonds. Payments on 2010 Note. (a) The Borrower will make all payments required to be made by the 2010 Note delivered pursuant to the Senior Loan Agreement to enable the Trustee to make the transfers required by the Indenture with respect to the Bonds; provided that the Borrower will not be obligated to pay the Purchase Price of the Bonds if a Liquidity Facility has been delivered. (b) Moneys received from the provider of the Initial Hedge Agreement are pledged and assigned to the payments of Debt Service on the Bonds, and the parties to the Senior Loan Agreement have agreed that payments to the Initial Hedge Provider shall be made pro rata from moneys in the Trust Estate that are available for payment of Debt Service on Bonds on parity with such Debt Service and that such Initial Hedge Agreement will constitute a Senior Hedge Agreement; provided, however, that payment of Hedging Termination Obligations shall be subordinate to payment of the Bonds and that so long as the TIFIA Bond remains Outstanding the Hedging Termination Obligations shall be a Partially Subordinated Hedge and that payments thereof shall be subordinate to the payment of principal and interest on the TIFIA Bond. Obligations of Borrower Unconditional. The obligations of the Borrower to make payments on the 2010 Note delivered pursuant to the Senior Loan Agreement and to observe and perform all covenants will be absolute and unconditional. F-1

141 Prepayment and Redemption. The Borrower will have the option to prepay its obligations under the Senior Loan Agreement at the times and in the amounts as necessary to exercise its option to cause the redemption of the Bonds that are to be redeemed as set forth in the Indenture and the Bonds. The Issuer, at the request of the Borrower, will forthwith take all steps (other than the payment of the money required for such redemption) necessary under the applicable redemption provisions of the Indenture to effect redemption of all or part of the Outstanding Bonds, as may be specified by the Borrower, on the date established for such redemption. Special Covenants of Borrower. Covenants made by the Borrower under the Senior Loan Agreement include, but are not limited to, the following: Payment of Revenues to the Revenue Fund. The Borrower at all times must maintain arrangements satisfactory to the Trustee to ensure that all Toll Revenues and other Revenues are collected and deposited to the Revenue Fund daily, to the extent practicable either directly or indirectly through payment mechanisms satisfactory to the Trustee. Oversight Covenant. If the Borrower fails for any twelve-month period to maintain (i) a Senior Debt Service Coverage Ratio at least equal to 1.25 to 1.00 and (ii) a Total Debt Service Coverage Ratio at least equal to 1.10 to 1.00 (the Coverage Test ), or the forecasts furnished by the Borrower project that Net Cash Flow may be inadequate to satisfy the Coverage Test for the following twelve months, the Borrower will, upon the request of the Instructing Controlling Party: (a) engage a toll road consultant (as defined in the Senior Loan Agreement) to review and analyze the operations of the Project and recommend actions regarding revising the rates, changing the methods of operation or other actions to increase the Net Cash Flow as to satisfy the Coverage Test and (b) either implement the toll road consultant s recommendations or undertake an alternative plan that the Borrower agrees is likely to generate equivalent or greater Net Cash Flow than the toll road consultant s recommended actions; provided, that the Borrower will not be required to take any action that may result in a breach by the Borrower of any of its obligations or covenants in the Comprehensive Agreement and the provisions of 23 U.S.C. 166 and 23 U.S.C. 129, successor provisions, and all regulations promulgated thereunder. Pursuant to the Waiver and Consent, the Issuer and the Trustee have waived any right to require the Borrower to take the actions specified above if the Borrower fails to meet either of the minimum financial ratios comprising the Coverage Test with respect to any of the Calculation Periods ending on June 30, 2014, December 31, 2014, June 30, 2015 or December 31, Maintenance of Existence. Throughout the term of the Senior Loan Agreement, the Borrower is required to maintain (i) its existence as a limited liability company, (ii) its qualification to do business in the Commonwealth and in every jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, and (iii) all material rights, franchises, privileges and consents necessary for the maintenance of its existence and the operation of the Project. Project Agreements. The financial obligations of the Borrower under all Project Agreements entered into as of the date of the Senior Loan Agreement, and the financial obligations of the Borrower under all Project Agreements entered into after such date, are subordinate to the rights of the Senior Secured Parties, other than Permitted Liens. Sale or Encumbrance of Interests under Comprehensive Agreement. The Borrower is not permitted to sell or otherwise dispose of all or any part of its interests under the Comprehensive Agreement except in accordance with any applicable provisions of the Senior Loan Agreement and the Comprehensive Agreement and unless it determines that such sale or other disposal is not adverse to the rights of the Secured Parties (as defined in the Indenture). The Borrower is not permitted to create, incur, assume, permit or suffer to exist any Security Interest upon or with respect to its interests under the Comprehensive Agreement, other than Permitted Liens. F-2

142 Operation and Maintenance of HOT Lanes Project. The Borrower is required to maintain operation of the HOT Lanes Project and will operate the HOT Lanes Project in a reasonable and prudent manner and will establish and enforce reasonable rules and regulations governing the use and operation of the HOT Lanes Project and will maintain and operate the HOT Lanes Project in an efficient and economical manner and at all times maintain the same in good repair, working order and in sound operating condition and in accordance with the Comprehensive Agreement and make all necessary repairs, renewals and replacements, in each case, in accordance in all material respects with the Project Agreements and in compliance in all material respects with applicable Laws and the terms of the insurance policies required by the Senior Loan Agreement (as described below) except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a Material Adverse Effect. Insurance. The Borrower is required to maintain or will require its contractors (including the Design- Build Contractor) to maintain, insurance which satisfies the requirements of the Comprehensive Agreement and the Financing Documents at such time as such insurance is required to be maintained thereunder, together with such other policies of insurance as are customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties. Such policies will: (i) name the Trustee as sole/first loss payee as their interests may appear (pending any existing contractual overrides) with an acceptable mortgagee/lenders loss payable clause on all delay in start up and business interruption and property insurance during construction and operations (as applicable), and as a loss payee as its interests may appear on the builders all risk insurance and any other applicable first party policies during construction; and (ii) provide that the insurance (A) is primarily for the benefit of the Secured Parties as additional insureds on all insurance coverages except for workers compensation and professional indemnity, (B) includes a waiver of subrogation in their favor, and (C) require that they will be provided with 30 days written notice of cancellation (10 for nonpayment of premium); provided that, if insurance ceases to be available on a commercially reasonable basis and the provisions governing unavailability of insurance in the Comprehensive Agreement apply, the Borrower is required to propose an independent insurance expert reasonably acceptable to the Instructing Controlling Party for purposes of the review procedures set forth in such sections of the Comprehensive Agreement. The Borrower is required to pay any condemnation proceeds it receives, as well as any insurance proceeds it receives under the builders all risk, delay in start up, property all risk and business interruption exceeding $5,000,000, to the Trustee for deposit into the Loss Proceeds Fund to the extent attributable to the debt service and fixed expense component of the delay in start up and business interruption Insurance Proceeds (as defined in the Indenture) (but not any additional revenue or loss of profit component of delay in start up, business interruption or advance loss of profit insurance, which are required to be deposited into the Revenue Fund). Any proceeds paid to the Trustee are required to be applied in accordance with the terms of the Indenture. If required to be applied for such purpose and such proceeds are insufficient to reconstruct or replace the damaged portion of the Project, any deficiency thereof is required to be provided by the Borrower. The Borrower is not permitted to do anything, or permit anything to be done, which would result in any Insurance (as defined in the Indenture) lapsing or otherwise being rendered void, voidable or ineffective and will not cancel or vary any policy of Insurance without the approval of the Trustee (such approval not to be unreasonably withheld). Accounts and Financial Reporting. information to the Trustee: The Borrower is required to deliver the following financial (a) as soon as available and, in any event, within sixty (60) days after the end of each fiscal quarter of the Borrower, unaudited consolidated financial statements, including an unaudited balance sheet and an unaudited statement of income, all prepared in accordance with GAAP; F-3

143 (b) as soon as available, and in any event no more than one-hundred and forty (140) days after the close of each fiscal year (A) the annual financial statements of the Borrower prepared in accordance with GAAP, and (B) a certificate of the auditors for each such party setting forth that they have examined such statements and have conducted a general review of accounting procedures and such tests of accounting records and other supporting evidence as they consider necessary and confirming that in their opinion such statements present fairly the financial position of each such party and the results of their respective operations for the fiscal year reported on and have been prepared in accordance with GAAP; (c) simultaneously with the delivery of each set of financial statements referred to in subclauses (a) and (b) above, a certificate of an officer of the Borrower in form and substance satisfactory to the Trustee (at the direction of the Instructing Controlling Party) confirming that such financial statements fairly present the financial condition of the Borrower and the results of its operations for the periods covered; and (d) Agreement. an annual operating budget as and when delivered to VDOT pursuant to the Comprehensive Project Funds and Accounts. (a) The Borrower is prohibited from maintaining or permitting to be maintained any accounts other than the Funds and Accounts and Permitted Accounts. (b) The Borrower may establish bank accounts in its name with the prior written consent of the Trustee (at the direction of the Instructing Controlling Party which consent will not unreasonably be withheld or delayed) to hold monies withdrawn from the Revenue Fund or the Distribution Fund in accordance with the terms of the Indenture when in the judgment of the Borrower the creation of such accounts will enable the Borrower to better administer the HOT Lanes Project, provided that the Borrower is required to, prior to depositing any moneys into such account, enter into a control agreement in faint and substance satisfactory to the Trustee (at the direction of the Instructing Controlling Party) covering such account so as to perfect the Security Interest created in favor of the Trustee over such account and the monies therein. (c) The Borrower may establish a special deposit account to be maintained with a bank on which checks may be written by the Borrower or the O&M Operator (the Operating Account ). The Borrower is required to transfer to the Operating Account any amounts available under subsection first of the flow of funds under the Indenture and will thereafter apply, or the O&M Operator will apply, such funds in the Operating Account for the payment of Operating Costs. The Operating Account is a Permitted Account. Hedge Agreements. (a) The Borrower may purchase or arrange for a Hedge Agreement with a Qualified Hedge Provider (as defined in the Indenture) with respect to the Bonds or any portion of the Trust Estate or revenues or moneys that are not included in the Trust Estate. If moneys paid to the Borrower or the Trustee pursuant to such a Hedge Agreement are pledged to the payment of Debt Service on any Bonds (as they are with the Initial Hedge Agreement), the Borrower may agree to make payments but not Hedging Termination Obligations to the provider of such Hedge Agreement from any moneys in the Trust Estate that are available for payment of Debt Service on such Bonds on a parity with or on a basis subordinate to the payment of such Debt Service. Hedging Termination Obligations may be paid from monies in the Trust Estate on a basis subordinate to the payment of Debt Service and other amounts as provided in the Indenture. (b) Except for any Hedge Agreement entered into as provided in this Hedge Agreements, the Borrower is prohibited from engaging in any transaction involving interest rate, currency, commodity, equity, credit or other swaps, options, futures, caps, collars, floors, swaptions, puts, calls or any similar contracts or F-4

144 derivative transactions without the prior written approval of the Trustee (at the direction of the Instructing Controlling Party, such approval not to be unreasonably withheld). Payment of Lawful Claims. The Borrower is required to pay or cause to be discharged, or make adequate provision to satisfy and discharge, all lawful claims and demands for labor, materials, supplies or other objects which, if unpaid, might by law become a lien upon the Trust Estate, from moneys available therefor in the Trust Estate or other legally available moneys; provided, however, that nothing in this Payment of Lawful Claims will require the Borrower to pay or cause to be discharged, or make provision for, any such lien or charge the validity of which is being contested in good faith by appropriate legal proceedings. Use of Proceeds; Tax Covenant. Neither the Issuer nor the Borrower will cause any proceeds of the Bonds to be expended, except pursuant to the Indenture and the Senior Loan Agreement. The Issuer and the Borrower covenant and agree on their own behalf that they will not take or omit, or permit to be taken or omitted, any action the taking or omission of which has or would result in the loss of the exclusion of interest on the Bonds from gross income of the Owners thereof for federal income tax purposes. Prohibition on Exercise of Option to Convert; Covenant To Provide Ongoing Disclosure. The Borrower is required to upon the exercise by the Borrower of any option to convert the interest rate mode on the Bonds that will result in the application of Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 CFR Part 240, c2-12) (the Rule ), the Borrower will enter into a written undertaking for the benefit of the Owners of the Bonds, as required by Section (b)(5)(i) of the Rule as then in existence; provided, however, that the Borrower will not be obligated to enter into such written undertaking if the Borrower will furnish to the Trustee, prior to the delivery of the notice relating to a conversion option, an opinion of Bond Counsel that, notwithstanding such election by the Borrower, the Rule is not applicable to the Bonds. Transaction Documents. (a) The Borrower is required to (i) perform and observe in all material respects all of its covenants and its other obligations contained in each Project Agreement to which it is a party and (ii) enforce against any other party thereto each material covenant or obligation of such party in each Project Agreement in accordance with its terms, except, in the case of clauses (i) and (ii) above, to the extent that the failure to do any of the foregoing could not reasonably be expected to have a Material Adverse Effect. (b) The Borrower is not permitted to terminate, or allowed to expire or assign, or amend or modify, or waive timely performance by any other party of material covenants under, any Project Agreement, provided that (i) any such termination will be permitted if (x) such termination occurs by the express expiry of such Project Agreement and not as a result of any default or breach on the part of any party to such Project Agreement or (y) other than with respect to the Comprehensive Agreement, a binding replacement contract is entered into within 60 days of the termination of such Project Agreement that provides projected economic benefits for the HOT Lanes Project that are, in light of the material risks and liabilities of such replacement contract, taken as a whole, at least as favorable as the benefits under the existing contract, in light of the material risks and liabilities of such existing contract, (ii) any such termination, amendment, modification or waiver will be permitted if such termination, amendment, modification or waiver could not reasonably be expected to result in a Material Adverse Effect, and (iii) any such termination, amendment, modification or waiver will be permitted if it is approved in writing by the Trustee (at the direction of the Instructing Controlling Party, such approval not to be unreasonably withheld). Preservation of Assets. The Borrower is required to maintain its property in good condition and from time to time make all repairs and replacements thereto as required in accordance with normal industry practice. The Borrower is not permitted to convey, sell, assign, transfer, lease or otherwise dispose of, in one transaction or a series of related transactions, any property or assets in excess of $5,000,000 per year in the aggregate except: F-5

145 (a) sales, transfers or other dispositions of obsolete, worn out or defective equipment that is promptly replaced by the Borrower with suitable substitute equipment of substantially the same character and quality and at least equivalent useful life and utility except to the extent that the failure to replace such equipment could not reasonably be expected to have a Material Adverse Effect; (b) business; and (c) sales, transfers or other dispositions of equipment or other property in the ordinary course of sales, transfers or other dispositions of any Permitted Investment. Business Activities. The Borrower is not permitted to directly engage at any time in any business other than ownership, management and financing of the Project and any Project Enhancements, and activities directly incidental or complementary thereto. Limitation on Fundamental Changes; Sale of Assets, Etc. The Borrower is not permitted to: (a) enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself, or suffer any liquidation or dissolution, or (b) either in a single transaction or in a series of transactions and whether related or not, convey, sell, lease, assign, transfer or otherwise dispose of all or substantially all of its property, assets or business, whether now owned or hereafter acquired, except Permitted Disposals; provided that, the foregoing restrictions does not prohibit the Borrower s grant of the Security Interest under the Security Agreement. Limitation on Indebtedness. The Borrower is not permitted to create, incur or assume any Indebtedness other than Permitted Indebtedness. Permitted Investments. The Borrower is not permitted to make any investment or capital contribution to, or purchase stocks, bonds, notes or other securities of, or advance any extension of credit to, or make any other investment in, any other Person, other than Permitted Investments (as defined in the First Supplemental Indenture). Operating Costs. Not later than 90 days after the end of each fiscal quarter of the Borrower occurring after the Service Commencement Date, the Borrower is required to deliver to the Trustee a report showing (i) the operating data for the HOT Lanes Project for the previous quarter and for the year to date, including total Revenues for the HOT Lanes Project, total Operating Costs incurred, and total Major Maintenance costs incurred, (ii) the variances for such periods between the actual Project Revenues and the budgeted Project Revenues and the actual Operating Costs and Major Maintenance costs incurred and the budgeted Operating Costs and Major Maintenance costs, together with a brief narrative explanation of the reasons for any such variance of 10% or more, (iii) reports on quarterly traffic and average toll figures, and (iv) if a Default exists, such other operating and traffic information as the Trustee (on behalf of the Instructing Controlling Party) may reasonably request. Negative Pledge. The Borrower is not permitted to create, incur, assume or permit to exist any Security Interest on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except Permitted Liens. Limitations on Issuance of Equity Securities; Loans. (a) The Borrower is not permitted to issue any equity or equity-linked securities, or securities convertible or exchangeable into either of the foregoing, except to the Members (as defined in the Sixth Supplemental Indenture). F-6

146 (b) The Borrower is not permitted to make any loan or advance of funds to any Person except for (i) Permitted Investments (as defined in the First Supplemental Indenture), (ii) down payments and prepayments to suppliers on ordinary commercial terms in the ordinary course of business, and (iii) receivables arising in the ordinary course of business. Major Maintenance. The Borrower is required to perform all Major Maintenance with respect to the HOT Lanes Project in accordance with Life Cycle Maintenance Plans, as defined in the Comprehensive Agreement, approved by VDOT. Operations and Maintenance. The Borrower is required to in all material respects maintain and keep, or cause to be maintained and kept, the HOT Lanes Project in accordance with the Project Agreements and in compliance in all material respects with applicable governmental rules and Governmental Approvals and appropriate standards of good industry practice, so that the business carried on in connection therewith may be properly conducted at all times. Hedging Transactions. (a) The Borrower is required to enter into the Initial Hedge Agreement that provides for a swap establishing a fixed interest rate for at least 98% of the principal amount of the Bonds. (b) The Borrower may, subject to first obtaining the approval of the Trustee (as directed by the Instructing Controlling Party, which approval will not be unreasonably withheld), after the Closing Date enter into additional Hedging Transactions (as defined in the Indenture) with any Hedging Bank (as defined in the Indenture), pursuant to the terms of a Hedge Agreement, implementing a swap for any Bond Obligations in relation to which no Hedging Transaction has been entered into. The Borrower will not enter into any other Hedging Transactions. Ranking of Indebtedness. Borrower is required to procure that its payment obligations under the Financing Documents and any Hedge Agreements will at all times rank in priority to all other Indebtedness, save for any Indebtedness preferred by Law or as otherwise agreed by the Secured Parties. Defaults. Defaults under the Senior Loan Agreement include, but are not limited to, the following: (a) Failure by the Borrower to pay any amount required to be paid under the Senior Loan Agreement and described in subsection (a) in Payments on 2010 Note. (b) Failure by the Borrower to observe and perform any covenant, condition or agreement on its part to be observed or performed under the Senior Loan Agreement, other than as referred to in (a) above, for a period of thirty (30) days after the earlier of (i) the Borrower acquiring actual knowledge of such occurrence and (ii) written notice specifying such failure and requesting that it be remedied will have been given to the Borrower by the Issuer or the Trustee, unless the Issuer and the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice is capable of cure but cannot reasonably be cured within the applicable period, the Borrower will be entitled to a further extension of time reasonably necessary to remedy such failure so long as corrective action is instituted by the Borrower within the applicable period and is diligently pursued until such failure is corrected. (c) The occurrence of a Bankruptcy Related Event with respect to the Borrower. (d) The occurrence of a Default under and as defined in any other Loan Agreement (other than the TIFIA Loan Agreement). F-7

147 (e) If one or more Credit Facilities have been delivered to the Trustee as security for the Bonds, occurrence of an event of default under the Reimbursement Agreement; provided, however, that if the provider of such Credit Facility directs the Trustee to effect a mandatory tender of the applicable Series of Senior Lien Bonds following an event of default under the Reimbursement Agreement, such event of default will not be a Default under the Senior Loan Agreement or the Indenture. (f) Any of the representations, warranties or certifications of the Borrower or Issuer made in or delivered pursuant to the Senior Loan Agreement or any other Initial Project Finance Agreements will prove to have been false or misleading in any material respect when made and, if such misrepresentation is capable of being cured, such misrepresentation has not been cured within thirty (30) days after the earlier of (i) the Borrower acquires actual knowledge of such failure and (ii) the Borrower s receipt of written notice from the Trustee or the Issuer of such failure. (g) (i) A Concessionaire Default (as defined in the Comprehensive Agreement) shall have occurred, and such Concessionaire Default shall be continuing beyond any grace period applicable to the Borrower (and not including any grace or cure period provided to the Borrower s lenders pursuant to the terms of the Comprehensive Agreement); or (ii) the Borrower shall fail to perform or observe any material covenant, agreement or obligation under any Project Agreement (unless such failure could not reasonably be expected to have a Material Adverse Effect), and the Borrower shall have failed to cure such failure or to obtain an effective written waiver thereof within the earlier of (A) thirty 30 days after receipt of written notice thereof from the Trustee and (B) the expiry of any applicable grace period relating to such covenant, agreement or obligation, provided, however, that with respect to this subclause (ii), if such cure or waiver cannot reasonably be obtained within the applicable period, the Borrower shall be entitled to an extension of such time if corrective action is instituted by the Borrower within the applicable period and diligently pursued until such failure is corrected. (h) One or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered against the Borrower and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower to enforce any such judgment or is not adequately covered by insurance or a performance bond for a period of 30 days. (i) Any payment required to be made under an Equity Funding Agreement or Equity Funding Guaranty or any letter of credit required to be provided under any Equity Funding Guaranty shall fail to be made or provided, as applicable, at the time and in the amount required and such failure to pay or provide the letter of credit, as applicable, shall have not been cured within thirty (30) days after receipt of written notice thereof from the Trustee. (j) A Bankruptcy Event occurs with respect to (i) the Issuer, (ii) any guarantor under the Equity Funding Guaranties, for so long as payments guaranteed by such guarantor are required to be made under an Equity Funding Agreement, or for as long as the Corporate Guaranty is outstanding, the Corporate Guarantor, unless in each case the Borrower shall have delivered to the Trustee, within thirty (30) days of such event, a replacement guaranty on substantially similar terms and by a guarantor reasonably acceptable to the Trustee (at the direction of the Instructing Controlling Party of the Senior Lien Bonds), (iii) any Member prior to the satisfaction in full of its obligations under its respective Equity Funding Agreement and thereafter if it is reasonably likely to have a Material Adverse Effect, (iv) the Design-Build Contractor, prior to the expiry of the warranty period under the Design-Build Contract to the extent that it is reasonably likely to have a Material Adverse Effect; (v) the O&M Contractor to the extent that it is reasonably likely to have a Material Adverse Effect; and (vi) any entity replacing either of the parties referred to in (iv) and (v) above, to the extent that it is reasonably likely to have a Material Adverse Effect. F-8

148 (k) The Comprehensive Agreement shall expire or be terminated (whether by reason of a default thereunder or by mutual agreement of the parties thereto or otherwise), or for any reason shall cease to be in full force and effect. (l) The Borrower abandons all or a material part of the Project or its activities to operate or maintain the HOT Lanes Project, which abandonment shall be deemed to have occurred after the Service Commencement Date if the Borrower fails, without reasonable cause, to operate the HOT Lanes Project for 90 days. (m) Any Project Agreement (other than the Comprehensive Agreement), Equity Funding Agreement or Equity Funding Guaranty is or becomes wholly or partly void, voidable, unenforceable or illegal, and such event or circumstance could reasonably be expected to have a Material Adverse Effect, unless, in the case of any Project Agreement (other than the Comprehensive Agreement) or Equity Funding Agreement or Equity Funding Guaranty, such document is replaced by a contract on substantially similar terms with a counterparty acceptable to the Trustee (at the direction of the Instructing Controlling Party) within thirty (30) days following the earlier of (i) the Borrower s actual knowledge of such occurrence and (ii) the delivery of written notice thereof to the Borrower by the Trustee, or such longer period, not exceeding 180 days, reasonably necessary to effect such replacement. (n) Any Project Agreement is terminated by any party thereto other than as provided in the Senior Loan Agreement or by reason of all the obligations of the parties thereunder having been fulfilled or the expiration of the term thereof, and such event could reasonably be expected to have a Material Adverse Effect, unless, in the case of any Project Agreement other than the Comprehensive Agreement, such Project Agreement is replaced in accordance with the requirements set forth in the Senior Loan Agreement within thirty (30) days following the delivery of written notice thereof to the Borrower by the Bank Agent or such longer period, not exceeding 180 days, reasonably necessary to effect such replacement. (o) Failure by the Borrower to cause the delivery of a valid replacement Reserve Fund Contract (as defined in the Indenture) within the timeframe specified in the Indenture prior to the expiration of the expiring Reserve Fund Contract, unless the Trustee is permitted to draw on such Reserve Fund Contract prior to the expiration thereof and deposits such amount to the appropriate Fund. (p) The Borrower fails to obtain, renew, maintain or comply with all material Governmental Approvals (as defined in the Indenture), as and when required by it, in connection with the Project or the entering into of any Financing Document or any Project Agreement, and such failure could reasonably be expected to have a Material Adverse Effect; unless such failure is remedied within thirty (30) days after the Trustee giving written notice thereof to the Borrower, or such longer period, not exceeding 180 days, as is reasonably necessary under the circumstances to remedy such failure. (q) Any Collateral Document to which the Borrower or Member is a party ceases, except in accordance with its terms, to be effective to grant a perfected Security Interest on the collateral described therein (other than on an immaterial portion thereof), other than as a result of actions or failure to act by any of the Secured Parties. (r) A change in control with respect to the Borrower shall have occurred for which consent has not been granted by VDOT and the Instructing Controlling Party. (s) An event of default (howsoever described) occurs with respect to the nonpayment of any Indebtedness of the Borrower (other than in respect of fully subordinated Indebtedness provided for in clauses (viii) and (xi) of the definition of Permitted Indebtedness in the Senior Loan Agreement, which shall not, in any event, include any monies provided to the Borrower under any Equity Funding Agreement or Equity F-9

149 Funding Guaranty) under agreements or instruments involving in the aggregate in excess of US $10,000,000, beyond the grace period, if any, provided in the instrument or agreement under which such Indebtedness was created and as a result thereof the maturity of such Indebtedness is accelerated. (t) The Substantial Completion Date has not occurred by the date 12 months after the Guaranteed Substantial Completion Date (as defined in the Comprehensive Agreement); provided that, such event shall not be a Default, if the Borrower has shown to the reasonable satisfaction of the Trustee (at the direction of the Instructing Controlling Party) that the Borrower has sufficient committed funds available to it to complete the Work unless the Independent Engineer certifies to the Trustee that he reasonably believes that the Work cannot be completed prior to the Outside Substantial Completion Date (as defined in the Comprehensive Agreement). (u) Any Insurance required under Insurance in Special Covenants of Borrower is not, or ceases to be, in full force and effect at any time when it is required to be in effect, or any such Insurance is avoided or any insurer avoids, suspends or otherwise reduces its liability under any policy relating to any such Insurances or any insurer of any Insurance is not bound, or ceases to be bound, to meet its obligations in full under any such Insurance, unless (i) such Insurance is (prior to its cessation) replaced by insurance on substantially similar terms and in form and substance, and with insurers, reasonably satisfactory to the Trustee (at the direction of the Instructing Controlling Party) or (ii) in respect of any insurance required to be effected under the Comprehensive Agreement, the risks covered by such insurance are uninsurable or such insurance is determined to be not commercially available in the insurance market as determined by the insurance review procedures set forth in the Comprehensive Agreement and the Borrower have agreed the means by which the risk should be managed in accordance with the Comprehensive Agreement. (v) The occurrence of loss or damage of all or a material part of the HOT Lanes Project that renders the HOT Lanes substantially unavailable for public use or results in the suspension or substantial reduction of toll collections on the HOT Lanes for a period in excess of 120 consecutive days (and all or such material part is not being reinstated in accordance with the Comprehensive Agreement). (w) The Work is suspended for a continuous period of 90 days (other than (a) as permitted under the Comprehensive Agreement or (b) with the prior written consent of the Trustee) and such suspension has a Material Adverse Effect. (x) The Work is abandoned; provided that, for the purposes of this subsection (x) abandonment of the HOT Lanes Project is deemed to have occurred if no significant Work (taking into account the construction schedule and permitted delay as a result of force majeure) is carried out without reasonable cause, for a continuous period of sixty (60) days. (y) The operation of the HOT Lanes Project or any part thereof is suspended or abandoned other than as permitted under the Comprehensive Agreement; provided that, for the purposes of this subsection (y), abandonment of the HOT Lanes Project is deemed to have occurred if the Borrower fails, without reasonable cause, to operate the HOT Lanes Project (taking into account force majeure) for a continuous period of sixty (60) days. (z) The occurrence of an Event of Default under and as defined in the Indenture or any Supplemental Indenture occurs. The provisions of subsection (b) of this section Defaults are subject to the following limitation: if by reason of force majeure the Borrower is unable in whole or in part to carry out any of its agreements contained in the Senior Loan Agreement (other than its payment obligations under the Senior Loan Agreement), the Borrower shall not be deemed in Default during the continuance of such inability. The term force majeure as used herein means, without limitation, the following: acts of God; strikes or other industrial disturbances; acts of public F-10

150 enemies; orders or restraints of any kind of the government of the United States of America or of the Commonwealth or of any of their departments, agencies or officials, or of any civil or military authority; insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage or accident to machinery, transmission pipes or canals; and any other cause or event not reasonably within the control of the Borrower. The Borrower agrees, however, to remedy with all reasonable dispatch the cause or causes preventing the Borrower from carrying out its agreement, provided that the settlement of strikes and other industrial disturbances shall be entirely within the discretion of the Borrower and the Borrower will not be required to settle strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Borrower unfavorable to the Borrower. Remedies on Default. Whenever any Default referred to in the section Defaults above shall have occurred and be continuing, the Trustee, or the Issuer with the written consent of the Trustee, may take one or any combination of the following remedial steps, by notice to the Borrower: (a) Declare that all or any part of any amount outstanding under the Senior Loan Agreement is (i) immediately due and payable, and/or (ii) payable on demand by the Trustee, and any such notice shall take effect in accordance with its terms but only if all amounts payable with respect to the Outstanding Bonds are being accelerated, or if all of the Outstanding Bonds are being defeased or otherwise paid; (b) Have reasonable access to and inspect, examine and make copies of the books and records and any and all accounts, data and income tax and other tax returns of the Borrower during regular business hours of the Borrower if reasonably necessary in the opinion of the Trustee; or (c) Take whatever other action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under the 2010 Note issued pursuant to the Senior Loan Agreement, or the Senior Loan Agreement. Any amounts collected pursuant to action taken described in this paragraph shall be paid into the Debt Service Fund and applied in accordance with the provisions of the Indenture. Subject to certain limitations set forth in Indenture, no remedy herein conferred upon or reserved to the Issuer or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Senior Loan Agreement or now or hereafter existing at law or in equity. Instructing Controlling Party Step-In Event. (a) If, at any time, either (i) the Trustee (or any other Senior Secured Party) receives a notice of Concessionaire Default from the Borrower (pursuant to any Financing Document) or VDOT and the applicable cure period for the benefit of the Borrower has expired or (ii) the Trustee (or any other Senior Secured Party) receives notice of a Termination Event (as defined in the Comprehensive Agreement) from VDOT (either such event, an Instructing Controlling Party Step-In Event ), the Instructing Controlling Party (subject to the Comprehensive Agreement and unless prohibited by applicable Law) shall have the right (but not the obligation), either directly or through an agent, to take any and all actions (including action pursuant to VDOT Consent) that it reasonably deems necessary or appropriate under the facts and circumstances in order to (A) cure, or cause to be cured in the name of the Borrower, any breach of the Comprehensive Agreement, any applicable Law or other default or breach giving rise to VDOT s right or alleged right to terminate the Comprehensive Agreement or the Issuer s rights with respect thereto; and/or (B) otherwise prevent the termination of the Comprehensive Agreement or the Borrower s rights with respect thereto (including the right to negotiate directly with VDOT on behalf of the Borrower and to represent the Borrower before VDOT). F-11

151 (b) Following an Instructing Controlling Party Step-In Event, the Borrower shall be entitled, in consultation with the Instructing Controlling Party, to (i) take steps to cure any breach of the Comprehensive Agreement, any applicable Law or other default or breach giving rise to VDOT s right or alleged right to terminate the Comprehensive Agreement or the Borrower s rights with respect thereto; and/or (ii) otherwise prevent the termination of the Comprehensive Agreement or the Borrower s rights with respect thereto; provided that the Borrower shall fully cooperate with the Instructing Controlling Party in connection with the exercise by the Instructing Controlling Party of any of the step-in rights described in this section entitled Instructing Controlling Party Step-In Event and, in the event the Instructing Controlling Party exercises such step-in rights, shall follow the directions of the Instructing Controlling Party in connection with the exercise by it of the step-in rights provided for in this section entitled Instructing Controlling Party Step-In Event. Amendments, Changes and Modifications. Neither the Senior Loan Agreement nor the 2010 Note may be effectively amended, changed, modified, altered or terminated except in accordance with the provisions of the Indenture. Limitations of Issuer Liability. Any obligation the Issuer may incur under the Senior Loan Agreement in connection with the Loan for the payment of money shall not be deemed to constitute a general obligation of the Issuer but shall be payable solely from the revenues and receipts derived by it from or in connection with issuance of the Bonds and the Senior Loan Agreement, including payments received under the 2010 Note. Neither the Directors of the Issuer nor any persons executing the Bonds will be personally liable on the Bonds so long as such person does not act in bad faith. Assignment of Issuer s Rights Under Senior Loan Agreement. Pursuant to the Indenture, the Issuer will assign to the Trustee all of the Issuer s right, title and interest in and to the Senior Loan Agreement and the related note as security for the payment of the Bonds and any other bonds issued pursuant to the Indenture, and the Borrower has entered into a Security Agreement (as defined in the Indenture) with the Trustee pursuant to which the Borrower has granted a lien on and security interest in all tangible and intangible property owned or at any time hereafter acquired by the Borrower or in which the Borrower has or will have any right, title or interest, as security for the payment of all of the Issuer s and the Borrower s obligations under the Financing Documents. TIFIA Loan Agreement TIFIA Loan Disbursement. The disbursed amount of the TIFIA Loan will not exceed $588,922,875, and will be disbursed only to pay directly for, or to reimburse the Concessionaire for, payment of Eligible Project Costs incurred in connection with the Project. Such disbursements will be made pursuant to requisitions, and no disbursements can be made later than one year after the Substantial Completion Date. Security and Priority of the TIFIA Loan. Pursuant to the Indenture, the Borrower/Issuer and the Concessionaire have pledged, assigned and granted to the Trustee, Liens on the Collateral in accordance with the provisions of the Security Documents. The TIFIA Loan shall be secured by the Liens (1) on the TIFIA Sinking Fund and the funds deposited therein, by a first priority security interest, (2) on the TIFIA Sub-Account of the Construction Fund and the funds deposited therein from time to time (and all earnings thereon), by a first priority security interest, and (3) on the Collateral, subordinate, during any period when an Event of Default described below in clause (j) of Events of Default has not occurred, only (except as otherwise required by law) to the Lien on such Collateral of any Permitted Debt described in clause (i) of the definition of Permitted Debt; provided that, notwithstanding the immediately following sentence, the Debt Service Reserve Fund and the PABs Sub-Account of the Construction Fund and all funds deposited therein from time to time (and all earnings thereon) shall not be subject to any Lien securing the TIFIA Loan. Subject to the Intercreditor Agreement, upon the occurrence and continuance of an Event of Default described below in clause (j) of Events of Default, the TIFIA Loan shall be secured by a first priority security interest in the Collateral on a parity with the lien of any Permitted Debt described in clause (i) of the definition of Permitted Debt. F-12

152 Special Covenants of the Concessionaire and Borrower/Issuer. Covenants made by the Borrower/Issuer and Concessionaire under the TIFIA Loan Agreement include, but are not limited to, the following: Permitted Indebtedness. Except for Permitted Debt, neither Concessionaire nor the Borrower/Issuer will issue or incur indebtedness without the prior written consent of the TIFIA Lender. At least 30 days prior to the incurrence of Permitted Debt described in clauses (i) and (iv) of the definition of Permitted Debt, the Concessionaire will certify to the TIFIA Lender that such proposed Additional Senior Loans or purchase money obligations are authorized under the TIFIA Loan Agreement, and in the case of Additional Senior Loans, specifying the subparagraphs within the Permitted Debt definition under which such indebtedness is authorized. Securing Liens. The Borrower/Issuer and the Concessionaire will, at any and all times, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning, securing and confirming the Liens in and to the Collateral (whether now existing or hereafter arising) granted to the Trustee for the benefit of the TIFIA Lender, as owner of the TIFIA Bond, pursuant to the Security Documents, or intended so to be granted pursuant to the Security Documents, or which the Borrower/Issuer and/or the Concessionaire may become bound to grant, and the Collateral is and will be free and clear of any pledge, Lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with the Liens created by the Security Documents, other than for Permitted Liens described in clause (i) or (j) of the definition of Permitted Liens or liens entitled to priority as a matter of law or as permitted by such documents or the TIFIA Loan Agreement, and all corporate action on the part of the Borrower/Issuer and the Concessionaire to that end will be duly and validly taken at such times. The Borrower/Issuer and the Concessionaire will, at all times, to the extent permitted by law, defend, preserve and protect the Liens on the Collateral granted pursuant to the Security Documents and all the rights of the Trustee for the benefit of the TIFIA Lender, as owner of the TIFIA Bond, under the Security Documents against all claims and demands of all Persons whomsoever, subject to Permitted Liens. Use of Proceeds. The Borrower/Issuer and Concessionaire will only use the proceeds of the TIFIA Bond and the TIFIA Loan to pay, or reimburse the Concessionaire for, Eligible Project Costs. Maintain Operations. The Concessionaire will maintain operation of the Project and will operate the Project in a reasonable and prudent manner and will maintain the Project in good repair, working order and condition and in accordance with the Comprehensive Agreement. The Concessionaire shall, at all times do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises and authorizations material to the conduct of its business, and comply in all material respects with all applicable rules, regulations, orders, decrees, judgments or administrative decisions, whether now in effect or hereafter enacted, of any Governmental Authority having jurisdiction over the Concessionaire or its assets or operations (including, without limitation, the National Environmental Policy Act of 1969). Insurance. The Concessionaire will at all times maintain or cause to be maintained with responsible insurers (1) the Owner Insurances and (2) such other insurance on the Project as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties. No Lien Extinguishment or Adverse Amendments. Neither the Borrower/Issuer nor the Concessionaire will, without the prior written consent of the TIFIA Lender, either (i) extinguish the Liens on the Collateral, except as provided under the Indenture and other Security Documents, or (ii) amend, modify or supplement the Senior Loan Agreement or any Related Document in a manner that could adversely affect the TIFIA Lender in connection with the TIFIA Loan. F-13

153 Change in Control. The Concessionaire will not permit a Change in Control to occur without the prior written consent of the TIFIA Lender, provided that, after the second anniversary of the Effective Date, the TIFIA Lender can withhold such consent only if (A) the proposed transfer is prohibited by applicable law or (B) the Person to whom control (as contemplated by the definition of Change in Control) is proposed to be transferred is, in the judgment of the TIFIA Lender, not capable of performing the obligations and covenants of the Concessionaire under the Comprehensive Agreement, which determination may be based upon, or take into account, one or more of the following factors: (1) the financial strength and integrity of the proposed transferee, its direct or indirect beneficial owners, any proposed managers or operating partners and each of their respective Affiliates; (2) the capitalization of the proposed transferee; (3) the experience of the proposed transferee or the operations and maintenance contractor proposed to be engaged by such transferee in operating toll roads or highways and performing other projects; (4) the background and reputation of the proposed transferee, its direct or indirect beneficial owners, any proposed managers or operating partners, each of their respective officers, directors and employees and each of their respective Affiliates (including the absence of criminal, civil or regulatory claims or actions against any such Person and the quality of any such Person s past or present performance on other projects (and if the TIFIA Lender is not reasonably satisfied that the foregoing conditions are met, it may condition its consent on provision of reasonable additional security or other reasonable arrangements). Maintain Legal Structure. The Borrower/Issuer and the Concessionaire will maintain their respective existence and good standing under their respective jurisdictions of formation, and neither the Borrower/Issuer nor the Concessionaire will consolidate with, privatize or merge into any other Person or convey, assign, transfer or lease all or substantially all of the Project or its other assets to any other Person without the consent of the TIFIA Lender, excluding the pledge and assignment of Collateral pursuant to the Security Documents. Major Maintenance Reserve. The Concessionaire will cause the Major Maintenance Reserve Fund to be fully funded in such amounts as required under the Senior Loan Documents (if any such requirement exists) and the Indenture. Debt Service Reserve Fund. The Concessionaire will maintain the Debt Service Reserve Fund in an amount equal to the Debt Service Reserve Fund Requirement in accordance with the provisions of the Indenture. Amounts in the Debt Service Reserve Fund will be made available to ensure the timely payment of Debt Service on the Senior Loan. The Concessionaire can replace all or a portion of the required balance thereof, in accordance with the terms of the Indenture, with a Debt Service Reserve Fund Contract provided by a financial institution with a long-term credit rating in one of the top two Rating Categories. TIFIA Sinking Fund. (a) No later than thirty (30) days after any Calculation Date, commencing on the Debt Service Payment Commencement Date, in respect of which funds are transferred to the Distribution Fund in accordance with the Indenture, the Concessionaire will furnish to the TIFIA Lender a certificate certifying as to the TIFIA Loan Life Coverage Ratio as of such Calculation Date and for each future Calculation Date through the Final Maturity Date (based on a revenue forecast determined in accordance with the Calculations and Forecasting Agreement), together with reasonably detailed information and calculations attached thereto supporting such certification. (b) If the certificate required by clause (a) above shows that the TIFIA Loan Life Coverage Ratio as of any Calculation Date is less than 1.30, the Concessionaire will, to the extent that the conditions to the distribution of funds in the Distribution Account established under the Indenture (except for the TIFIA Loan Life Coverage Ratio) have been satisfied, cause to be transferred from the Distribution Account to the TIFIA Sinking Fund established under the Indenture an amount that is equal to the lesser of (1) the amount that is estimated to be necessary to increase the TIFIA Loan Life Coverage Ratio as of each Calculation Date to not less than 1.30 or (2) F-14

154 100% of all funds on deposit in the Distribution Account as of such Calculation Date (each a TIFIA Sinking Fund Deposit ). On each Calculation Date occurring thereafter until (and excluding) the first Calculation Date as of which the TIFIA Loan Life Coverage Ratio for all subsequent Calculation Dates is 1.30 or greater, the Concessionaire shall continue to make additional TIFIA Sinking Fund Deposits. (c) The Concessionaire s obligation to make TIFIA Sinking Fund Deposits will be from the sources and in the priority specified in the Indenture, and will be subject to the availability of funds for such purpose in accordance with the Indenture. (d) The TIFIA Lender will have a first-priority security interest in any funds on deposit in the TIFIA Sinking Fund, to the exclusion of the Senior Lenders. (e) If, as of any Semi-Annual Payment Date, insufficient funds are otherwise available under the Indenture to pay any of the principal amount of or interest on a TIFIA Loan then due and payable or scheduled to be paid (including, without limitation, Scheduled Debt Service, but excluding any interest during the Capitalized Interest Period), funds in an amount equal to the lesser of (1) such deficiency or (2) all funds on deposit in the TIFIA Sinking Fund will be transferred to the TIFIA Lender to pay such amounts then due and payable or scheduled to be paid. (f) If on a Calculation Date the TIFIA Loan Life Coverage Ratio as of such Calculation Date is less than 1.30, the Concessionaire will make a prepayment of the TIFIA Loan in an amount equal to the lesser of (1) the amount that is estimated to be necessary to increase such TIFIA Loan Life Coverage Ratio to 1.30 (calculated without reference to any balances credited to the TIFIA Sinking Fund as of such Calculation Date) or (2) 100% of all funds on deposit in the TIFIA Sinking Fund as of such Calculation Date. Any such prepayment will be applied to prepay the TIFIA Loan. (g) Provided that no Event of Default has occurred and is continuing, if on any Calculation Date the TIFIA Loan Life Coverage Ratio for such Calculation Date and all subsequent Calculation Dates is projected to be 1.30 or greater, any amounts in the TIFIA Sinking Fund in excess of the amount necessary to maintain the TIFIA Loan Life Coverage Ratio at not less than 1.30 may be paid to or at the direction of the Concessionaire at its written request, as provided in the Indenture; provided that no such distribution of amounts may occur during the Capitalized Interest Period. Oversight Covenant. If the Concessionaire fails for any twelve-month period to maintain (i) a Senior Debt Service Coverage Ratio at least equal to 1.25 in such year and (ii) a Total Debt Service Coverage Ratio at least equal to 1.10 in such year (the Coverage Test ), or the forecasts furnished by the Concessionaire pursuant hereto project that Net Cash Flow may be inadequate to satisfy the Coverage Test for the following twelve months, or if audited financial statements show that the Coverage Test was not satisfied for any year, the Concessionaire will, upon the request of the TIFIA Lender or the Senior Lender (a) engage the traffic auditor to review and analyze the operations of the Project and recommend actions regarding revising the rates, changing the methods of operation or other actions to increase the Net Cash Flow as to satisfy the Coverage Test and (b) either implement the traffic auditor s recommendations or undertake an alternative plan that the traffic auditor agrees is likely to generate equivalent or greater Net Cash Flow than the traffic auditor s recommended actions; provided, that the Concessionaire shall not be required to take any action that may result in a breach by the Concessionaire of its obligation to maintain and operate the HOT Lanes at all times in compliance with the Comprehensive Agreement and the provisions of 23 U.S.C. 166 and 23 U.S.C. 129, successor provisions, and all regulations promulgated thereunder. No Prohibited Liens. Neither the Borrower/Issuer nor the Concessionaire will create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except Permitted Liens. F-15

155 No Prohibited Payments. The Concessionaire will not at any time make (i) any distribution or other payment in respect of its outstanding limited liability company membership interests, or in respect of any repurchase or other acquisition thereof, or (ii) any payment of the principal of, interest on or other amounts in respect of any debt for borrowed money owed by the Concessionaire to any holder of an outstanding limited liability company membership interest in the Concessionaire, or (iii) any payment to any Affiliate of the Concessionaire or of any holder of a limited liability company membership interest in the Concessionaire (other than the reimbursement of out-of-pocket expenses incurred for the benefit of the Concessionaire in the ordinary course of business, and other than payments permitted pursuant to the provisions of the TIFIA Loan Agreement as described in No Prohibited Asset Trustee below), except that the Concessionaire may make distributions or payments described in clauses (i), (ii) and (iii) above (A) out of funds withdrawn from the Distribution Account in accordance with the provisions of the Indenture and (B) out of the net proceeds of any Additional Senior Loan incurred pursuant to the provisions of clause (d) of the definition of Additional Senior Loan, to the extent permitted by the last sentence of such clause (d). During the Capitalized Interest Period the Concessionaire will either (i) at the end of each Fiscal Year, apply 15% of the Revenues deposited in the Distribution Account during such Fiscal Year or (ii) at the end of the Capitalized Interest Period or at such later time that such funds are available for Distribution, apply 15% of the Revenues deposited in the Distribution Account during the Capitalized Interest Period, to the payment of accrued interest under the TIFIA Loan; provided, that Revenues deposited into the Distribution Fund for any period in respect of which the Borrower has paid interest on the TIFIA Loan in cash will not be subject to such payment requirements. The foregoing payment requirement will not be applicable with respect to any portion of Revenues that are required to be transferred to the Senior Lien Bonds Debt Service Account pursuant to the Indenture. Surplus Sharing. If, as of the end of each quarter following initial payment of a permit fee to VDOT under the Comprehensive Agreement, the TRI (as defined n the Comprehensive Agreement) equals or exceeds 7.94%, the Concessionaire will use 50% of the funds otherwise available for distribution under the Indenture as of the end of such period (or such lesser amount as would result in such TRI being equal to such percentage if the prepayment were treated as a Project Cost) to be applied toward a mandatory prepayment of the TIFIA Loan under the TIFIA Loan Agreement. Hedging. (a) To protect against fluctuations in interest rates, the Concessionaire will make arrangements for one or more Qualified Hedges, to be effective no later than seven (7) calendar days after the date on which the Initial Senior Lien Bonds are issued, and thereafter maintained at all times with respect to the Senior Loan during any period in which the Senior Loan bears interest at a Variable Interest Rate. The initial Qualified Hedges shall have a term of not less than five (5) years and must be in full force and effect as of the Effective Date. Each Qualified Hedge must be on a notional amount which, together with the aggregate notional amounts of each other Qualified Hedge then in effect with respect to the Senior Loan, is equal to the approximately 100% principal amount of the Senior Loan projected, on the date of entering into such Qualified Hedge, to be outstanding during the term of the Qualified Hedge and bearing interest at a Variable Interest Rate during such term; provided that such requirement shall be deemed to be fulfilled if the Qualified Hedge is no more than 102% and no less than 98% of principal amount of such Senior Loan projected to be outstanding during the term of such Qualified Hedge; provided, further, that, unless otherwise consented to by the TIFIA Lender, the initial Qualified Hedge and any Subsequent Qualified Hedge (as defined below) shall be a Partially Subordinated Hedge; and provided, further, that if the Senior Loan to which such Qualified Hedge relates is secured by a financial guaranty insurance policy, termination payments under such Qualified Hedge shall also be secured by such policy as a Partially Subordinated Hedge. The Concessionaire s obligations to pay (a) Hedging Obligations, and (b) Hedging Termination Obligations will be from the sources and in the priority specified in the Indenture. Each Qualified Hedge will be secured and documented on terms and conditions substantially similar to the terms and conditions of the initial Qualified Hedge unless otherwise approved by the TIFIA Lender (the Hedge Documents ). The Concessionaire will ensure that, as of the day following the termination date of any Qualified Hedge, either (a) a F-16

156 Subsequent Qualified Hedge is in full force and effect to the extent the Senior Loan bears interest at a Variable Interest Rate or (b) the Senior Loan has been converted to a fixed rate, in each case in accordance with the TIFIA Loan Agreement and the Senior Loan Agreement. (b) Any Qualified Hedge entered into subsequent to the initial Qualified Hedges (a Subsequent Qualified Hedge ) will commence no later than the termination date of the Qualified Hedge which is terminating and terminate no earlier than the date which is the first (1 st ) anniversary of the effective date of such Subsequent Qualified Hedge or, if sooner, the final maturity date of the Senior Loan. (c) No later than thirty days prior to the Concessionaire seeking any bids from any Qualified Hedge Provider for a Subsequent Qualified Hedge, the Concessionaire will obtain the written consent of the TIFIA Lender to the effect that the process for selecting a Subsequent Qualified Hedge is a competitive process designed to obtain a fair market price and to avoid conflicts of interest. At the time the Subsequent Qualified Hedge is priced, the Concessionaire shall provide to the TIFIA Lender a certificate from a qualified third party acceptable to the TIFIA Lender to the effect that either the underlying LIBOR based fixed rate or the price of acquiring a Subsequent Qualified Hedge is a fair price based on the interest rate market at the time such Qualified Hedge is priced. (d) The Trustee will be granted a security interest (which shall become a part of the Collateral) in each Qualified Hedge and payments due under each Qualified Hedge in order to secure the Concessionaire s obligations to the TIFIA Lender under the TIFIA Loan Agreement. The Hedge Documents will provide that all payments due thereunder to the Concessionaire shall be made directly to the Trustee for deposit in the Revenue Fund and shall be disbursed in accordance with the Indenture. No Prohibited Sale or Assignment. Neither the Borrower/Issuer nor the Concessionaire will sell or assign its respective rights in and to the Project, the Comprehensive Agreement or its respective rights and obligations under the TIFIA Loan Agreement unless such sale or assignment in and of itself is not expected to result in any material change in the amount of revenues projected to be received from the operation of the Project and is upon terms and conditions which are acceptable to the TIFIA Lender in its sole discretion and subject to such additional terms and conditions as the TIFIA Lender may require. Material Obligations. The Concessionaire will pay its material obligations promptly and in accordance with their terms and pay and discharge promptly all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful and material claims for labor, materials and supplies or other claims which, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided, however, that such payment and discharge will not be required with respect to any such tax, assessment, charge, levy or claim so long as the validity or amount thereof is contested by the Concessionaire in good faith by appropriate proceedings and so long as the Concessionaire sets aside adequate reserves on its books as required by GAAP on a consistent basis. No Prohibited Asset Trustee. The Concessionaire will not sell or transfer any property or assets to, or purchase or acquire any property or assets of, or otherwise engage in any other material transactions with, any of its Affiliates, except: (a) transactions at prices and on terms and conditions not less favorable to the Concessionaire than fair market prices and on terms and conditions not less favorable to the Concessionaire than could be reasonably obtained on an arm s length basis from unrelated third parties; and (b) the payment of fees and expenses pursuant to and in accordance with the provisions of the Technical Support Agreement. OHS East: F-17

157 Fiscal Year. The Concessionaire will not adopt any fiscal year other than the Concessionaire Fiscal Year, except with the prior written consent of the TIFIA Lender. No Prohibited Business. The Concessionaire will not, at any time, engage in any business or activity other than the design, construction, operation and maintenance of the Project and activities incidental or related thereto. Operating Costs. The Concessionaire will not increase in any year the amount of Operating Expenses or Major Maintenance expenses by more than 10% over the amount shown for such expenditures in such year in the annual budget of the Concessionaire for such year delivered to the TIFIA Lender, without the TIFIA Lender s prior written consent; provided, that no consent will be required for (i) reasonably unforeseen expenditures to the extent necessary to pay for compliance with Safety Compliance Orders (as defined in the Comprehensive Agreement) and (ii) reasonably unforeseen expenditures to the extent necessary to be made to cause the Project to be in compliance with applicable mandatory Governmental Rules. Comprehensive Agreement. The Concessionaire will comply with the Comprehensive Agreement in all material respects and will not terminate the Comprehensive Agreement without the TIFIA Lender s consent. Distributions to Equity. The Concessionaire will not request or accept any payments from amounts on deposit in the Distribution Fund except in accordance with the Indenture. Limitations on Additional Debt Pursuant to the TIFIA Loan Agreement, Additional Senior Loans may be made as follows: (a) to complete the construction of the Project or to comply with obligations under the Material Project Contracts, so long as the Concessionaire certifies to the Senior Lender and the TIFIA Lender, and the Independent Engineer confirms, that the additional investment is necessary and that the proceeds, together with other funds available to complete the Project, are expected to be sufficient to complete the construction of the Project; provided that the aggregate amount of Additional Senior Loans incurred pursuant to this paragraph (a) may not, without the prior written consent of the TIFIA Lender, exceed 5% of the maximum principal amount of the Initial Senior Loan; (b) to refurbish, upgrade, modify, expand or add to the Project so long as (i) such Additional Senior Loans have an Investment Grade Rating and (ii) the Concessionaire certifies to the TIFIA Lender, and the Independent Engineer confirms, that (A) there will be no fundamental change in the use of the Project, (B) the proceeds of such Additional Senior Loans, together with other funds available, shall be sufficient for the proposed purpose; and (C) either (1) the additional investment is not expected to have a Material Adverse Effect, or (2) the Total Debt Service Coverage Ratio for each Calculation Period during the remaining term of the TIFIA Loan is not less than 1.10 (based on a revenue forecast determined in accordance with the Calculations and Forecasting Agreement) and the TIFIA Loan Life Coverage Ratio as of such date is 1.30; (c) to refinance or replace any existing Senior Loans, so long as (i) such Additional Senior Loans have an Investment Grade Rating, (ii) the net proceeds thereof (after deducting costs of issuance not to exceed 2% of the principal amount of such Additional Senior Loans and any required deposits) do not exceed the principal amount outstanding and being refinanced of the Senior Loan and (iii) Debt Service, after the incurrence of such Additional Senior Loans, in each year of the remaining term of the TIFIA Loan is less than Debt Service forecast for such year in accordance with the Calculations and Forecasting Agreement (with the model set to illustrate the Senior Loans being repaid by a refinancing rather than the cash sweep mechanism) (making allowance for Debt Service in connection with such Additional Senior Loans) delivered on or prior to the Effective Date; and F-18

158 (d) to add to, refinance or replace the existing Senior Loan for purposes not covered in clauses (a), (b) and (c) above, so long as (i) at least 50% of the net proceeds (after repayment of any outstanding Senior Loan refinanced with such Additional Senior Loan and after costs of issuance not to exceed 2% of the principal amount of such Additional Senior Loan and any required deposits) of each such Additional Senior Loan is used to prepay the TIFIA Loan, (ii) the Additional Senior Loan has an Investment Grade Rating, (iii) the Total Debt Service Coverage Ratio, after giving effect to such Additional Senior Loan, is 1.10 or more for each year of the remaining term of the TIFIA Loan (based on a revenue forecast in accordance with the Calculations and Forecasting Agreement), (iv) if principal of such Additional Senior Loan is paid through a cash sweep mechanism, such payments of principal are subordinate to payment of TIFIA Debt Service and (v) the TIFIA Loan Life Coverage Ratio as of such date is Subject to the above provisions, the remaining balance of such net proceeds of any such Additional Senior Loan may, at the option of the Concessionaire, be distributed to the Members; provided that, unless otherwise agreed by the TIFIA Lender, each lender of any such Additional Senior Loan (or an agent or trustee acting on its behalf), at the time of execution of any documentation with respect thereto, shall become a party to and be bound by the Intercreditor Agreement as a Senior Lender thereunder. Events of Default. The Events of Default under the TIFIA Loan Agreement include, but are not limited to, the following: (a) Failure by the Borrower/Issuer or the Concessionaire to pay any of the principal amount of or interest on a TIFIA Loan when and as the payment thereof is required to be paid under the TIFIA Loan Agreement or a TIFIA Bond or at the Final Maturity Date. (b) Failure by the Borrower/Issuer or the Concessionaire to observe and perform any covenant, agreement or obligation on its respective part under the TIFIA Loan Agreement, the TIFIA Bond, or any other TIFIA Loan Document (other than as set forth above in clause (a) above), and such failure is not cured within thirty (30) days after receipt by the Borrower/Issuer or the Concessionaire, as applicable, from the TIFIA Lender of written notice thereof; provided, however, if the failure is capable of cure but cannot reasonably be cured within such 30-day period, then no Event of Default will be deemed to have occurred or be continuing under this clause (b) if and so long within such 30-day period, the Borrower/Issuer or the Concessionaire, as applicable, commences actions reasonably designed to cure such failure and diligently pursues such actions until such failure is cured. (c) Any of the representations, warranties or certifications of the Borrower/Issuer or the Concessionaire made in or delivered pursuant to the TIFIA Loan Agreement, the TIFIA Bond or the other TIFIA Loan Documents prove to have been false or misleading in any material respect when made. (d) Any acceleration of the maturity of the Bonds or the Senior Loan or of any other indebtedness of the Concessionaire in an aggregate principal amount equal or greater than $250,000 that is senior to, or in parity with, the TIFIA Loan in right of payment or in right of security, or any such Senior Loan or other indebtedness is not paid in full upon the final maturity thereof. (e) Any of the representations, warranties or certifications of the Concessionaire made in or delivered pursuant to the Senior Loan Documents or the documents under which indebtedness of the Concessionaire in an aggregate principal amount equal or greater than $250,000 ( Other Material Indebtedness ) is created or incurred (the Other Loan Documents ), prove to be false or misleading in any material respect, or any default occurs in respect of the performance of any covenant, agreement or obligations of the Concessionaire under the Senior Loan Documents or the Other Loan Documents and such default is continuing after the giving of any applicable notice and the expiration of any applicable grace period specified in the Senior Loan Documents or the Other Loan Documents with respect to such default, if the effect of such misrepresentation or default is to permit the immediate acceleration of the maturity of any or all of the Senior Indebtedness or the Other Material F-19

159 Indebtedness (as the case may be), and, in the case of any such misrepresentation or default, the Concessionaire shall have failed to cure or to obtain an effective written waiver thereof within 30 days after receipt of written notice thereof from the TIFIA Lender; provided, however, that if such cure or waiver of such misrepresentation or default cannot reasonably be obtained within such 30-day period, then no Event of Default will be deemed to have occurred or be continuing under this clause (e) if and so long as within such 30-day period the Concessionaire commences actions reasonably designed to obtain a cure or waiver thereof and diligently pursues such actions until such cure or waiver is obtained. (f) The Borrower/Issuer or the Concessionaire defaults in the timely performance of any covenant, agreement or obligation under any Related Document (other than a Senior Loan Document) or any Related Document is terminated prior to its scheduled termination (unless such default or termination could not reasonably be expected to have a material adverse effect on the Concessionaire s ability to comply with its obligations under the TIFIA Loan Agreement, the TIFIA Bond or the other TIFIA Loan Documents), and the Borrower/Issuer or the Concessionaire, as applicable, failed to cure such default or to obtain an effective written waiver thereof, or to obtain an effective revocation of such termination, within 30 days after receipt of written notice thereof from the TIFIA Lender; provided, however, that if such cure or waiver or revocation cannot reasonably be obtained within such 30-day period, then no Event of Default is deemed to have occurred or be continuing under this clause if and so long as within such 30-day period the Borrower/Issuer or the Concessionaire, as applicable, commences actions reasonably designed to obtain a cure or waiver of such default or a revocation of such termination (as the case may be) and diligently pursues such actions until such cure or waiver or revocation is obtained. (g) One or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 is rendered against the Concessionaire and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution is not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Concessionaire to enforce any such judgment. (h) (i) (j) (k) (l) Agreement. A Change in Control occurs in violation of the TIFIA Loan Agreement. Failure by the Concessionaire to maintain its existence as a Delaware limited liability company. A Bankruptcy- Related Event occurs. The Concessionaire abandons the Project. The Concessionaire or VDOT fails to satisfy certain conditions of the Comprehensive (m) Any of the events described under the definition of Bankruptcy Related Event occurs with respect to any Member Party. (n) The Comprehensive Agreement expires or is terminated (by reason of a default or by mutual agreement of the parties thereto or otherwise) or for any reason ceases to be in full force and effect. (o) Operation of the Project ceases for a continuous period of 180 days or more, unless such cessation of operations occurred because of an Uncontrollable Force and either (i) the Concessionaire has an insurance policy in force under which it is entitled to recover substantially all Debt Service, TIFIA Debt Service and costs and expenses of the Concessionaire during the cessation of operations or (B) VDOT has agreed to a Force Majeure Extension (as defined in the Comprehensive Agreement), the Concessionaire has raised enough money to pay all Debt Service, TIFIA Debt Service and costs and expenses of the Concessionaire during such F-20

160 cessation of operations and the Concessionaire diligently restores any physical damage or destruction to the Project. Remedies on Default. Upon the occurrence of an Event of Default described in clauses (j) and (k), all obligations of TIFIA Lender regarding disbursement of any undisbursed proceeds of the TIFIA Bonds will be immediately deemed terminated. Upon the occurrence of an Event of Default described in clause (j), all obligations of the TIFIA Lender with respect to disbursement of the TIFIA Loan shall be automatically deemed to be terminated, and the unpaid principal amount of the TIFIA Loan, together with accrued interest and all fees, costs, expenses indemnities and other amounts payable under the TIFIA Loan Agreement, the TIFIA Bond or the other TIFIA Loan Documents shall automatically become immediately due and payable. Upon the occurrence of any other Event of Default referred to in the section Events of Default above, the TIFIA Lender, by written notice to the Borrower/Issuer and the Concessionaire, may (a) suspend or terminate all of its obligations with respect to the disbursement of any undisbursed amounts of the TIFIA Bonds and (b) declare the unpaid principal amount outstanding under the TIFIA Bond is (i) immediately due and payable, including accrued interest and all fees, costs, expenses, indemnities and other amounts payable under the TIFIA Loan Agreement, the TIFIA Bond or the other TIFIA Loan Documents. Whenever any Event of Default referred to in the section Events of Default above shall have occurred and be continuing, the TIFIA Lender may take one or any combination of the following steps: (a) Take whatever action at law or in equity to collect the amounts then due and unpaid under the TIFIA Loan Agreement, a TIFIA Bond or the other TIFIA Loan Documents, or to prosecute any such judgment or final decree against the Borrower/Issuer and the Concessionaire and collect in the manner provided by law out of the Concessionaire s property the money adjudged or decreed to be payable, and the TIFIA Lender will have all of the rights and remedies of a secured creditor under the UCC and can take all actions at law or in equity as may appear necessary or desirable to collect all amounts payable by Borrower/Issuer and the Concessionaire or to enforce performance and observance of any obligation, agreement or covenant of the Borrower/Issuer and the Concessionaire under the TIFIA Loan Agreement, the TIFIA Bond or the other TIFIA Loan Documents; or (b) Suspend or debar the Borrower/Issuer or the Concessionaire, as applicable, from further participation in any Government program administered by the TIFIA Lender and notify other departments and agencies of such default. F-21

161 APPENDIX G SUMMARY OF CERTAIN PROVISIONS OF THE REIMBURSEMENT AGREEMENT, INCLUDING THE LETTERS OF CREDIT Set forth herein is a summary of certain sections of the Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of December 14, 2010, amended by Amendment No. 1 to Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of June 5, 2014 ( Amendment No. 1 and, as amended, the Reimbursement Agreement ). This summary does not purport to be complete, and reference is made to the Reimbursement Agreement and the Letters of Credit, copies of which are on file with the Trustee, for a complete statement of the rights, duties and obligations of the parties thereto. The headings herein are not part of the Reimbursement Agreement or the Letters of Credit but have been added for ease of reference only. Capitalized terms used herein but not defined shall have the meaning given such terms in the Reimbursement Agreement, the Letters of Credit, Appendix A or the front part of this Remarketing Circular. See also SECURITY FOR THE BONDS The Letters of Credit in the Remarketing Circular. General. The Borrower and each of the Banks are parties to the Reimbursement Agreement, pursuant to which each of the Banks agreed, subject to the conditions contained in the Reimbursement Agreement, to issue amended and restated Letters of Credit in connection with the issuance of the Series 2008 Non-AMT Bonds. Reduction. With respect to each of the Letters of Credit, the Letter of Credit Amount and the Principal Component (as defined in the Letter of Credit) and Interest Component (as defined in the Letter of Credit) for the Letter of Credit will be reduced in accordance with the terms and conditions provided in the Letter of Credit. Reinstatement. In the event of a drawing under a Letter of Credit with an Interest Drawing (as defined in the Letter of Credit), the Interest Component of the Letter of Credit Amount will, in accordance with the terms and conditions set forth in the Letter of Credit and Reimbursement Agreement, be automatically reinstated by an amount equal to the amount of such drawing on the fourth (4th) Business Day following payment of such drawing provided that the Trustee has not received notice from the Bank within three (3) days of the payment of such drawing that the Interest Component will not be reinstated. In the event of a Purchase Drawing (as defined in the Letter of Credit) under a Letter of Credit, the Principal Component and the Interest Component of the Letter of Credit Amount will, in accordance with the terms and conditions set forth in the Letter of Credit, be reinstated (1) automatically when and to the extent that both (i) the Bank Agent has received for credit to the applicable Bank immediately available funds for application to the Borrower s reimbursement obligation for such drawing and (ii) the Trustee has delivered a certificate to the applicable Bank in respect of such reinstatement in the form required by the Letter of Credit, or (2) when and to the extent the applicable Bank, at its option, upon the Borrower s request, advises the Trustee in writing that such reinstatement shall occur, it being understood that the applicable Bank has no obligation to grant any such reinstatement except as set forth in clause (1) of this sentence. Certain Covenants. So long as a drawing is available under a Letter of Credit, or any of the Banks shall have any commitment under its Letter of Credit or under the Reimbursement Agreement, or the Borrower shall have any obligation to pay any amount to a Bank under the Reimbursement Agreement, the Reimbursement Agreement provides that the Borrower comply with the following covenants, among other covenants: Payment of Revenues to the Revenue Fund. The Borrower at all times must maintain arrangements satisfactory to the Required Banks to ensure that all Toll Revenues and other Revenues are collected and deposited to the Revenue Fund daily, to the extent practicable either directly or indirectly through payment mechanisms satisfactory to the Required Banks. G-1

162 Oversight Covenant. If the Borrower fails for any twelve-month period to maintain (i) a Senior Debt Service Coverage Ratio at least equal to 1.25 to 1.00 and (ii) a Total Debt Service Coverage Ratio at least equal to 1.10 to 1.00 (the Coverage Test ), or the forecasts furnished by the Borrower project that Net Cash Flow may be inadequate to satisfy the Coverage Test for the following twelve months, the Borrower will, upon the request of the Required Banks: (a) engage a toll road consultant to review and analyze the operations of the Project and recommend actions regarding revising the rates, changing the methods of operation or other actions to increase the Net Cash Flow as to satisfy the Coverage Test and (b) either implement the toll road consultant s recommendations or undertake an alternative plan that the Borrower agrees is likely to generate equivalent or greater Net Cash Flow than the toll road consultant s recommended actions; provided, that the Borrower will not be required to take any action that may result in a breach by the Borrower of any of its obligations or covenants in the Comprehensive Agreement and the provisions of 23 U.S.C. 166 and 23 U.S.C. 129, successor provisions, and all regulations promulgated thereunder. Pursuant to Amendment No. 1, each Bank has waived any right to require the Borrower to take the actions specified above if the Borrower fails to meet either of the minimum financial ratios comprising the Coverage Test with respect to any of the Calculation Periods ending on June 30, 2014, December 31, 2014, June 30, 2015 or December 31, 2015, provided no other Event of Default has occurred under the Reimbursement Agreement. Maintenance of Existence. Throughout the term of the Reimbursement Agreement, the Borrower is required to maintain (i) its existence as a limited liability company, (ii) its qualification to do business in the Commonwealth and in every jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, and (iii) all material rights, franchises, privileges and consents necessary for the maintenance of its existence and the operation of the Project. Project Agreements. The financial obligations of the Borrower under all Project Agreements entered into as of the date of the Reimbursement Agreement are, and the financial obligations of the Borrower under all Project Agreements entered into after such date, are subordinate to the rights of the Senior Secured Parties, other than Permitted Liens. Sale or Encumbrance of Interests under Comprehensive Agreement. The Borrower is not permitted to sell or otherwise dispose of all or any part of its interests under the Comprehensive Agreement except in accordance with any applicable provisions of the Reimbursement Agreement and the Comprehensive Agreement and unless the Required Banks determine that such sale or other disposal is not materially adverse to the rights of the Secured Parties. The Borrower is not permitted to create, incur, assume, permit or suffer to exist any Security Interest upon or with respect to its interests under the Comprehensive Agreement, other than Permitted Liens. Operation and Maintenance of HOT Lanes Project. The Borrower is required to maintain operation of the HOT Lanes Project and is required to operate the HOT Lanes Project in a reasonable and prudent manner and is required to establish and enforce reasonable rules and regulations governing the use and operation of the HOT Lanes Project, and is required to maintain and operate the HOT Lanes Project in an efficient and economical manner and at all times maintain the same in good repair, working order and in sound operating condition and in accordance with the Comprehensive Agreement and make all necessary repairs, renewals and replacements, in each case, in accordance in all material respects with the Project Agreements and in compliance in all material respects with applicable Laws and the terms of the Insurance Policies required under the Reimbursement Agreement, except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a Material Adverse Effect. Insurance. The Borrower is required to maintain or will require its contractors (including the Design- Build Contractor) to maintain, insurance which satisfies the requirements of the Comprehensive Agreement and the Financing Documents at such time as such insurance is required to be maintained thereunder, together with such other policies of insurance as are customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties. Such policies will: (i) name the G-2

163 Trustee as sole/first loss payee as their interests may appear (pending any existing contractual overrides) with an acceptable mortgagee/lenders loss payable clause on all delay in start up and business interruption and property insurance during construction and operations (as applicable), and as a loss payee as its interests may appear on the builders all risk insurance and any other applicable first party policies during construction; and (ii) provide that the insurance (A) is primarily for the benefit of the Secured Parties as additional insureds on all insurance coverages except for workers compensation and professional indemnity, (B) includes a waiver of subrogation in their favor, and (C) require that they will be provided with 30 days written notice of cancellation (10 for nonpayment of premium); provided that, if insurance ceases to be available on a commercially reasonable basis and the provisions governing unavailability of insurance in the Comprehensive Agreement apply, the Borrower is required to propose an independent insurance expert reasonably acceptable to the Required Banks for purposes of the review procedures set forth in such sections of the Comprehensive Agreement. The Borrower is required to pay any condemnation proceeds it receives, as well as any insurance proceeds it receives under the builders all risk, delay in start up, property all risk and business interruption exceeding $5,000,000, to the Trustee for deposit into the Loss Proceeds Fund to the extent attributable to the debt service and fixed expense component of the delay in start up and business interruption Insurance Proceeds (as defined in the Indenture) (but not any additional revenue or loss of profit component of delay in start up, business interruption or advance loss of profit insurance, which are required to be deposited into the Revenue Fund). Any proceeds paid to the Trustee are required to be applied in accordance with the terms of the Indenture. If required to be applied for such purpose and such proceeds are insufficient to reconstruct or replace the damaged portion of the Project, any deficiency thereof is required to be provided by the Borrower. The Borrower is not permitted to do anything, or permit anything to be done, which would result in any Insurance (as defined in the Indenture) lapsing or otherwise being rendered void, voidable or ineffective and will not cancel or vary any policy of Insurance without the approval of the Trustee (such approval not to be unreasonably withheld). Accounts and Financial Reporting. information to the Bank Agent: The Borrower is required to deliver the following financial (a) as soon as available and, in any event, within sixty (60) days after the end of each fiscal quarter of the Borrower, unaudited consolidated financial statements, including an unaudited balance sheet and an unaudited statement of income, all prepared in accordance with GAAP; (b) as soon as available, and in any event no more than one-hundred and forty (140) days after the close of each fiscal year (A) the annual financial statements of the Borrower prepared in accordance with GAAP, and (B) a certificate of the auditors for each such party setting forth that they have examined such statements and have conducted a general review of accounting procedures and such tests of accounting records and other supporting evidence as they consider necessary and confirming that in their opinion such statements present fairly the financial position of each such party and the results of their respective operations for the fiscal year reported on and have been prepared in accordance with GAAP; (c) simultaneously with the delivery of each set of financial statements referred to in sub-clauses (a) and (b) above, a certificate of an officer of the Borrower in form and substance satisfactory to the Bank Agent confirming that such financial statements fairly present the financial condition of the Borrower and the results of its operations for the periods covered; and (d) an annual operating budget as and when delivered to the Department pursuant to the Comprehensive Agreement. G-3

164 Project Funds and Accounts. (a) The Borrower is prohibited from maintaining, or permitting to be maintained, any accounts other than the Funds and Accounts and Permitted Accounts. (b) The Borrower may establish bank accounts in its name with the prior written consent of the Trustee (at the direction of the Required Banks, which consent shall not be unreasonably withheld or delayed) to hold monies drawn from the Revenue Fund or the Distribution Fund in accordance with the terms of the Indenture when in the judgment of the Borrower, the creation of such accounts will enable the Borrower to better administer the HOT Lanes Project, provided that the Borrower is required to, prior to depositing any moneys into such account, enter into a control agreement in form and substance satisfactory to the Trustee (at the instruction of the Required Banks) covering such account so as to perfect the Security Interest created in favor of the Trustee over such account and the monies therein. (c) The Borrower may establish a special deposit account to be maintained with a bank on which checks may be written by the Borrower or the O&M Operator (the Operating Account ). The Borrower is required to transfer to the Operating Account all amounts available under subsection first of the flow of funds set forth in the Indenture and will thereafter apply, or the O&M Operator will apply, such funds in the Operating Account for the payment or reimbursement of Operating Costs. The Operating Account is a Permitted Account. Hedge Agreements. (a) The Borrower may purchase or arrange for a Hedge Agreement with a Qualified Hedge Provider with respect to the Series 2008 Senior Lien Bonds or any portion of the Trust Estate or revenues or moneys that are not included in the Trust Estate. If moneys paid to the Borrower or the Trustee pursuant to such a Hedge Agreement are pledged to the payment of Debt Service on any Series 2008 Senior Lien Bonds, the Borrower may agree to make payments but not Hedging Termination Obligations to the provider of such Hedge Agreement from any moneys in the Trust Estate that are available for payment of Debt Service on such Series 2008 Senior Lien Bonds on a parity with or on a basis subordinate to the payment of such Debt Service. Hedging Termination Obligations may be paid from monies in the Trust Estate on a basis subordinate to the payment of Debt Service and other amounts as provided in the Indenture. (b) Except for any Hedge Agreement entered into as provided in this Hedge Agreements, the Borrower is prohibited from engaging in any transaction involving interest rate, currency, commodity, equity, credit or other swaps, options, futures, caps, collars, floors, swaptions, puts, calls or any similar contracts or derivative transaction without the prior written approval of the Trustee (at the direction of the Required Banks, such approval not to be unreasonably withheld). Payment of Lawful Claims. The Borrower is required to pay or cause to be discharged, or make adequate provision to satisfy and discharge, all lawful claims and demands for labor, materials, supplies or other objects which, if unpaid, might by law become a lien upon the Trust Estate, from moneys available therefor in the Trust Estate or other legally available moneys; provided, however, that nothing in this Payment of Lawful Claims will require the Borrower to pay or cause to be discharged, or make provision for, any such lien or charge the validity of which is being contested in good faith by appropriate legal proceedings. Use of Proceeds; Tax Covenant.The Borrower is not permitted to, and as far as it is reasonably able to do so, will procure that the Issuer is not permitted to, cause any proceeds of the Series 2008 Senior Lien Bonds to be expended, except pursuant to the Indenture and the Senior Loan Agreement. The Borrower covenants and agrees that it may not, and as far as it is reasonably able to do so, shall procure that the Issuer will take or omit, or permit to be taken or omitted, any action the taking or omission of which would result in a loss of the exclusion of G-4

165 interest on the Series 2008 Senior Lien Bonds from gross income of the Owners thereof for federal income tax purposes. Transaction Documents. (a) The Borrower is required to (i) perform and observe in all material respects all of its covenants and its other obligations contained in each Project Agreement to which it is a party and (ii) enforce against any other party thereto each material covenant or obligation of such party in each Project Agreement in accordance with its terms, except, in the case of clauses (i) and (ii) above, to the extent that the failure to do any of the foregoing could not reasonably be expected to have a Material Adverse Effect. (b) The Borrower is required to (i) perform and observe in all material respects all of its covenants and its other obligations contained in the Remarketing Agreement, (ii) enforce against the Remarketing Agent each material covenant or obligation of the Remarketing Agent in the Remarketing Agreement in accordance with its terms and (iii) is prohibited from terminating the Remarketing Agreement, without the prior written consent of the Required Banks. If the Remarketing Agreement is terminated other than in accordance with the Reimbursement Agreement or by reason of all the obligations of the parties thereunder having been fulfilled or the expiration of the term thereof, the Borrower is required to use all commercially reasonable efforts to enter into a replacement remarketing agreement with a remarketing agent and on terms reasonably satisfactory to the Required Banks. (c) The Borrower is not permitted to terminate, or allowed to expire or assign, or amend or modify, or waive timely performance by any other party of material covenants under, any Project Agreement, provided that: (i) any such termination shall be permitted if (x) such termination occurs by the express expiry of such Project Agreement and not as a result of any default or breach on the part of any party to such Project Agreement or (y) other than with respect to the Comprehensive Agreement, a binding replacement contract is entered into within 30 days of the termination of such Project Agreement that provides projected economic benefits for the HOT Lanes Project that are, in light of the material risks and liabilities of such replacement contract, taken as a whole, at least as favorable as the benefits under the existing contract, in light of the material risks and liabilities of such existing contract; and (z) in the case of the ETC Agreement, the Independent Engineer has confirmed that the Borrower has the ability to provide the services covered by the ETC Agreement, either on a standalone basis, or with support from the O&M Contractor pursuant to a replacement contract in form and substance reasonably satisfactory to the Required Banks; and (ii) any such termination, amendment, modification or waiver shall be permitted if such termination, amendment, modification or waiver could not reasonably be expected to result in a Material Adverse Effect. Preservation of Assets. The Borrower is required to maintain its property in good condition and from time to time make all repairs and replacements thereto as required in accordance with normal industry practice. The Borrower is not permitted to convey, sell, assign, transfer, lease or otherwise dispose of, in one transaction or a series of related transactions, any property or assets in excess of $5,000,000 per year in the aggregate except: (a) sales, transfer or other dispositions of obsolete, worn out or defective equipment that is promptly replaced by the Borrower with suitable substitute equipment of substantially the same character and quality and at least equivalent useful life and utility except the extent that the failure to replace such equipment could not reasonably be expected to have a Material Adverse Effect; (b) business; and (c) sales, transfers or other dispositions of equipment or other property in the ordinary course of sales, transfers or other dispositions of any Permitted Investment. G-5

166 Business Activities. The Borrower is not permitted to directly engage at any time in any business other than ownership, management and financing of the Project and any Project Enhancements, and activities directly incidental or complementary thereto. Limitation on Fundamental Changes; Sale of Assets, Etc. The Borrower is not permitted to: (a) enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself, or suffer any liquidation or dissolution or (b) either in a single transaction or in a series of transactions, related or not, convey, sell,, lease, assign, transfer or otherwise dispose of all or substantially all of its property, assets or business,whether now owned or hereafter acquired, except Permitted Disposals; provided that, the foregoing restriction does not prohibit the Borrower s grant of the Security Interest under the Security Agreement. Restricted Payments and Releases from the Distribution Fund. (a) The Borrower is not permitted to declare or make, or incur any liability to declare or make, any Distribution other than from the Distribution Fund in accordance with the terms of the Indenture; (b) In addition to the restrictions on Distributions from the Distribution Fund specified in the Indenture, the Borrower is not permitted to declare or make, or incur any liability to declare or make, any Distribution at any time period to the third anniversary of the Service Commencement Date; provided that such restriction does not apply with respect to amounts transferred to the Distribution Fund from the Revenue Stabilization Reserve Fund to the extent that each of the Debt Service Reserve Fund, the Major Maintenance Reserve Fund and the O&M Reserve Fund is funded to the applicable required balance. (c) In addition to the restrictions on Distributions from the Distribution Fund specified in the Indenture, amounts transferred to the Distribution Fund from the Revenue Stabilization Reserve Fund can only be paid to the Borrower (or to the order of the Borrower) on a Calculation Date on which Net Cash Flow for the applicable period preceding such Calculation Date is not less than 90% of the amount set forth below (prorated in each case for any partial period of less than six months): (i) with respect to the first Calculation Date occurring after the Service Commencement Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $10,200,000.00; (ii) with respect to the second Calculation Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $18,800,000.00; (iii) with respect to the third Calculation Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $28,200,000.00; (iv) with respect to the fourth Calculation Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $32,400,000.00; (v) with respect to the fifth Calculation Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $37,900,000.00; G-6

167 (vi) with respect to the sixth Calculation Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $37,400,000.00; and (vii) with respect to the seventh Calculation Date, the Net Cash Flow for the six-month period ending on such Calculation Date was at least equal to $39,500, (d) In addition to the restrictions on Distributions from the Distribution Fund specified in the Indenture, the Borrower is not permitted to declare or make, or incur any liability to declare or make, any Distribution at any time during which any Bank Bonds are outstanding. (e) Notwithstanding anything to the contrary in the Indenture, the Borrower is not permitted to declare or make, or incur any liability to declare or make, any Distribution unless, among other things, the following conditions are satisfied: (x) for so long as the Series 2008 Senior Lien Bonds remain Outstanding, the Senior Debt Service Coverage Ratio was at least equal to 1.45 to 1.00 for the entirety of the most recent Calculation Period; and (y) for so long as the Series 2008 Senior Lien Bonds remain Outstanding, the Senior Debt Service Coverage Ratio is projected to be at least equal to 1.45 to 1.00 for the entirely of the next Calculation Period. Limitation on Indebtedness. The Borrower is not permitted to create, incur or assume any Indebtedness other than Permitted Indebtedness. Permitted Investments. The Borrower is not permitted to make any investment or capital contribution to, or purchase stocks, bonds, notes or other securities of, or advance any extension of credit to, or make any other investment in, any other Person, other than Permitted Investments. Operating Costs. No later than 90 days after the end of each fiscal quarter of the Borrower, after the Service Commencement Date, Borrower is required to deliver to the Bank Agent a report showing (i) the operating data for the HOT Lanes Project for the previous quarter and year-to-date, including total Revenues for the HOT Lanes Project, total Operating Costs incurred, and total Major Maintenance costs incurred, (ii) the variances for such periods between the actual Project Revenues and the budgeted Project Revenues and the actual Operating Costs and Major Maintenance costs incurred and the budgeted Operating Costs and Major Maintenance costs, together with a brief narrative explanation of the reasons for any such variance of 10% or more, (iii) reports on quarterly traffic and average toll figures, and (iv) if an Event of Default exists, such other operating and traffic information as the Trustee (on behalf of the Required Banks) may reasonably request. Annual Operating Budget. Not less than 30 days before the commencement of each calendar year, the Borrower is required to submit to each Bank and the Independent Engineer for their review an operating plan and budget for the Project, in a form reasonably acceptable to the Bank Agent. Each annual operating budget shall specify in reasonable detail all projected Toll Revenues and Operating Costs, as well as projected Major Maintenance costs and Capital Expenditures for such period on a monthly basis. Subject to the Reimbursement Agreement, the Borrower is required to operate the HOT Lanes substantially in accordance with the annual operating budget. The Borrower has the right to make expenditures in respect of Operating Costs, as well as Major Maintenance costs and other Capital Expenditures, without any consent or approval of the Bank Agent, the Banks, the Independent Engineer or any other Person if such costs do not exceed an amount equal to 110% of the aggregate amount budgeted for such costs in the applicable annual operating budget. Any expenditures in excess of such amount require the prior consent of the Bank Agent (acting at the direction of the Required Banks), such consent not to be unreasonably withheld or delayed, provided that no such consent will in any event be required as to any unforeseen expenditures in the event of an Emergency or to the extent reasonably necessary to comply with the requirements of the Comprehensive Agreement or applicable Law. G-7

168 Negative Pledge. The Borrower is not permitted to create, incur, assume or permit to exist any Security Interest on any property or asset now owned or hereafter acquired by it, or assign, or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except Permitted Liens. Limitations on Issuance of Equity Securities; Loans. The Borrower is not permitted to issue any equity or equity-linked securities, or securities convertible or exchangeable into either of the foregoing, except to the Members. The Borrower is not permitted to make any loan or advance of funds to any Person except for (i) Permitted Investments, (ii) down payments and prepayments to suppliers on ordinary commercial terms in the ordinary course of business, and (iii) receivables arising in the ordinary course of business. Profit-sharing; Subsidiaries. The Borrower is not permitted to (i) enter into any partnership, joint venture, profit-sharing or royalty agreement or similar arrangement whereby the Borrower s income or profits are, or might be, shared with any Person or (ii) form or have any subsidiaries, except as expressly permitted pursuant to any Transaction Document or with the prior written consent of the Required Banks. Major Maintenance. The Borrower is required to perform all Major Maintenance with respect to the HOT Lanes Project in accordance with Life Cycle Maintenance Plans (as defined in the Comprehensive Agreement), approved by the Department. Hedging Transactions. No later than the date of the issuance of the Series 2008 Senior Lien Bonds, the Reimbursement Agreement provides that the Borrower enters into one or more Hedging Agreements with one or more Hedging Banks implementing a swap establishing a fixed interest rate for at least 98% of the principal amount of the Series 2008 Senior Lien Bonds projected to be Outstanding for the period of twenty years following the Closing Date. Subject to obtaining the approval of the Trustee (as directed by the Required Banks, and such approval not to be unreasonably withheld), the Borrower may enter into additional Hedging Transactions with any Hedging Bank, pursuant to the terms of a Hedging Agreement, implementing a swap for any Bond Obligations in relation to which no Hedging Transaction has been entered into, after the Closing Date. The Borrower is not permitted to enter into any other Hedging Transactions except as discussed in this paragraph and in the paragraph entitled Hedge Agreements above. Ranking of Indebtedness. The Borrower is required to ensure that its payment obligations under the Finance Documents and any Hedging Agreement will at all times rank in priority to all other Indebtedness, save for any Indebtedness preferred by Law or as otherwise agreed by the Secured Parties. Additional Senior Indebtedness. Notwithstanding anything to the contrary in the Finance Documents, the Borrower is not permitted to incur, and is required to ensure that the Issuer does not incur, any Indebtedness which would rank pari passu with the Series 2008 Senior Lien Bonds without the prior written consent each of the Banks. Debt Service Reserve Fund Contract, Major Maintenance Reserve Fund Contract. Notwithstanding anything to the contrary in the Indenture the Borrower is not permitted to substitute all or any portion of the cash or Permitted Investments on deposit in the Debt Service Reserve Fund with a Debt Service Reserve Fund Contract (as defined in the Indenture). If the Borrower elects to substitute all or any portion of the cash or Permitted Investments on deposit in the Major Maintenance Reserve Fund with a Major Maintenance Reserve Fund Contract (as defined in the Indenture) pursuant to the Indenture, such Major Maintenance Reserve Fund Contract is required to be in a form reasonably satisfactory to the Required Banks. Operations and Maintenance Agreement; Conversion to Fixed Fee Structure. The Borrower is not permitted to agree to the initial conversion of the compensation payable to the O&M Contractor to a fixed-price structure in accordance with the provisions of the Operating Agreement without the prior written consent of the Required Banks; provided, that the amount and timing of any payment under any fixed-price structure does not G-8

169 required consent of the Required Banks or any Bank to the extent such amount does not exceed the amount reflected for such category of cost in the applicable annual operating budget. Payment of Operating Costs. All amounts paid out of the Revenue Fund in accordance with the Indenture are required to be transferred into the Operating Account by the Borrower and used in accordance with the Operating Agreement or to pay for or reimburse Operating Costs. Events of Default. Events of Default under the Reimbursement Agreement include, but are not limited to, the following: (a) Failure by the Borrower to pay any amount payable under the Reimbursement Agreement with respect to (i) a reimbursement for a drawing under a Letter of Credit and payments in relation to Bank Bonds or (ii) any Letter of Credit fee, transaction charge, or Bank Agent fee; (b) Failure by the Borrower to make (i) any other payment to the Banks or Bank Agent under the Reimbursement Agreement within ten (10) Business Days from the date on which it was due, or (ii) any amount required to be paid under the Senior Loan Agreement, when due; (c) Failure by the Borrower to observe and perform any covenant, condition or agreement on its part to be observed or performed under the Reimbursement Agreement or the Senior Loan Agreement, other than as referred to in clause (a) above (subject to certain cure provisions set forth in the Reimbursement Agreement); (d) The occurrence of a Bankruptcy Related Event with respect to the Borrower; (e) The occurrence of a Default under and as defined in the Senior Loan Agreement or a default under any other Loan Agreement (other than the TIFIA Loan Agreement); (f) Any of the representations, warranties or certifications of the Borrower made in or delivered pursuant to the Reimbursement Agreement or any other Initial Project Financing Agreements prove to have been false or misleading in any material respect when made (subject to certain cure provisions set forth in the Reimbursement Agreement); (g) (i) A Concessionaire Default (as defined in the Comprehensive Agreement) has occurred and is continuing beyond any grace period applicable to the Borrower (and not including any grace or cure period provided to the Borrower s lenders pursuant to the terms of the Comprehensive Agreement); or (ii) the Borrower fails to perform or observe any material covenant, agreement or obligation under any Project Agreement (unless such failure could not reasonably be expected to have a Material Adverse Effect) (subject to certain cure provisions set forth in the Reimbursement Agreement; (h) One or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 is rendered against the Borrower and the same remains undischarged for a period of thirty (30) consecutive days during which execution is not be effectively stayed, or any action is legally taken by a judgment creditor to attach or levy upon any assets of the Borrower to enforce any such judgment or is not adequately covered by insurance or a performance bond for a period of thirty (30) days; (i) A Bankruptcy Event occurs with respect to (i) the Issuer, (ii) any Member if it is reasonably likely to have a Material Adverse Effect, (iii) the Design-Build Contractor, prior to the expiry of the warranty period under the Design-Build Contract to the extent that it is reasonably likely to have a Material Adverse Effect; (iv) the O&M Contractor to the extent that it is reasonably likely to have a Material Adverse Effect; and (v) any entity replacing either of the parties referred to in clauses (iii) and (iv) above, to the extent it is reasonably likely to have a Material Adverse Effect; G-9

170 (j) The Comprehensive Agreement shall expire or be terminated (whether by reason of a default thereunder or by mutual agreement of the parties thereto or otherwise), or, for any reason, shall cease to be in full force and effect; (k) The Borrower abandons all or a material part of the Project or its activities to operate or maintain the HOT Lanes Project, which abandonment shall be deemed to have occurred after the Service Commencement Date if the Borrower fails, without reasonable cause, to operate the HOT Lanes Project for 90 days; (l) Any Project Agreement (other than the Comprehensive Agreement) is or becomes wholly or partly void, voidable, unenforceable or illegal, and such event or circumstance could reasonably be expected to have a Material Adverse Effect (subject to certain substitution provisions set forth in the Reimbursement Agreement); (m) Any Project Agreement is terminated by any party thereto other than in compliance with the terms of the Reimbursement Agreement or by reason of all the obligations of the parties thereunder having been fulfilled or the expiration of the term thereof, and such event could reasonably be expected to have a Material Adverse Effect (subject to certain substitution provisions set forth in the Reimbursement Agreement); (n) Failure by the Borrower to cause the delivery of a valid replacement Reserve Fund Contract (as defined in the Indenture) within the timeframe specified in the Indenture prior to the expiration of the expiring Reserve Fund Contract unless the Trustee is permitted to draw on such Reserve Fund Contract prior to the expiration thereof and deposits such amount to the appropriate Fund; (o) The Borrower fails to obtain, renew, maintain or comply with all material Governmental Approvals, as and when required by it, in connection with the Project or the entering into of any Financing Document or any Project Agreement, and such failure could reasonably be expected to have a Material Adverse Effect (subject to certain cure provisions set forth in the Reimbursement Agreement); (p) Any Collateral Document to which the Borrower or Member is a party ceases, except in accordance with its terms, to be effective to grant a perfected Security Interest on the collateral described therein (other than on an immaterial portion thereof), other than as a result of actions or failure to act by any of the Secured Parties; (q) A change in control with respect to the Borrower shall have occurred for which consent has not been granted by VDOT and the Required Banks (as defined in the Reimbursement Agreement); (r) An event of default (howsoever described) occurs with respect to the nonpayment of any Indebtedness of the Borrower (other than in respect of fully subordinated Indebtedness provided for in clauses (vii) and (x) of the definition of Permitted Indebtedness in the Senior Loan Agreement, which shall not, in any event, include any monies provided to the Borrower under any Equity Funding Agreement or Equity Funding Guaranty) under agreements or instruments involving in the aggregate in excess of $10,000,000, beyond the grace period, if any, provided in the instrument or agreement under which such Indebtedness was created and as a result thereof the maturity of such Indebtedness is accelerated; (s) Any Insurance required under the Reimbursement Agreement is not, or ceases to be, in full force and effect at any time when it is required to be in effect, or any such Insurance is avoided or any insurer avoids, suspends or otherwise reduces its liability under any policy relating to any such Insurances or any insurer of any Insurance is not bound, or ceases to be bound, to meet its obligations in full under any such Insurance (subject to certain substitution and uninsurability provisions set forth in the Reimbursement Agreement); G-10

171 (t) The occurrence of loss or damage of all or a material part of the HOT Lanes Project that renders the HOT Lanes substantially unavailable for public use or results in the suspension or substantial reduction of toll collections on the HOT Lanes for a period in excess of 120 consecutive days (and all or such material part is not being reinstated in accordance with the Comprehensive Agreement); (u) The Work is suspended for a continuous period of ninety (90) days (other than (a) as permitted under the Comprehensive Agreement or (b) with the prior written consent of the Required Banks (as defined in the Reimbursement Agreement)) and such suspension has a Material Adverse Effect; (v) The Work is abandoned (subject to the meaning of abandonment of the HOT Lanes Project provided in the Reimbursement Agreement); (w) The operation of the HOT Lanes Project or any part thereof is suspended or abandoned other than as permitted under the Comprehensive Agreement (subject to the meaning of abandonment of the HOT Lanes Project provided in the Reimbursement Agreement); (x) The occurrence of an Event of Default under and as defined in the Indenture or any Supplemental Indenture occurs; (y) The Senior Debt Service Coverage Ratio for any Calculation Period commencing with the Calculation Period ending on December 31, 2015, is less than 1.15 to 1.00; provided, that with respect to the Calculation Period ending on December 31, 2015, and solely with respect to such Calculation Period, such occurrence is not an Event of Default if (i) an equity contribution to the Borrower in the form of cash is made and deposited in the Revenue Fund in an amount that, when added to Revenues for the purposes of calculating Net Cash Flow for the Calculation Period ending on December 31, 2015, will result in a Senior Debt Service Coverage Ratio of at least 1.15 to 1.00 and (ii) such equity contribution is made within thirty (30) days after the earlier of (1) the date on which the Borrower is required to deliver a compliance certificate pursuant to the Reimbursement Agreement for the Calculation Period ending on December 31, 2015, and (2) the date on which such certificate is delivered. (z) A Governmental Authority (as defined in the Indenture) exercises its right of condemnation, eminent domain or other similar action or proceeding in respect of all or a material portion of the Project; and (aa) Any Bank Bonds (as defined in the Reimbursement Agreement) remain outstanding at any time after June 30, The Events of Default described above under this subheading Events of Default are subject to certain force majeure limitations set forth in the Reimbursement Agreement. Remedies Upon an Event of Default. Upon the occurrence of any Bankruptcy Event with respect to the Borrower described in clause (d) of Events of Default above, all unreimbursed drawings in respect of the Letters of Credit and payments in relation to any Bank Bonds and any and all other indebtedness or obligations of any kind owing by the Borrower to the Banks under the Reimbursement Agreement will immediately become due and payable. Upon or after the occurrence of any other Event of Default, the Bank Agent may (at the instructions of the Required Banks), without prior notice, demand or presentment, and to the extent permitted by applicable law, do any or all of the following: G-11

172 (a) declare all unreimbursed drawings in respect of the Letters of Credit and any and all other indebtedness or obligations of any and every kind owing by the Borrower to the Banks under the Reimbursement Agreement to be (A) due and payable, whereupon the same shall be immediately due and payable, or (B) payable on demand; (b) have reasonable access to and inspect, examine and make copies of the books and records and any and all accounts, data and income and other tax records of the Borrower, during regular working hours of the Borrower if reasonably necessary in the opinion of the Required Banks; (c) notify the Trustee that such Event of Default has occurred and direct the Trustee in the exercise of remedies relating to the Series 2008 Senior Lien Bonds under and pursuant to the Financing Documents; (d) notify the Trustee that such Event of Default has occurred and direct the Trustee to call the Series 2008 Senior Lien Bonds for mandatory purchase pursuant to the Indenture; (e) by suit, action or proceeding in equity, enjoin any acts or things which are unlawful or the violation of any rights of the Banks or the Trustee; and (f) exercise, or cause to be exercised, any and all such remedies as it may have under the Reimbursement Agreement, the other Financing Documents or any other document or at law or in equity. G-12

173 APPENDIX H COPY OF THE OPINION OF BOND COUNSEL DELIVERED IN DECEMBER, 2010 H-1

174

175

176

177

178 APPENDIX I DTC AND ITS BOOK-ENTRY SYSTEM The following information regarding DTC and DTC s book-entry system has been extracted from information provided by DTC. 1. The Depository Trust Company ( DTC ), New York, NY, acts as securities depository for the Series 2008 Non-AMT Bonds of each Series (the Securities ). The Securities were issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate was issued in the aggregate principal amount of the Securities of each Series and was deposited with DTC. 2. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC s records. The ownership interest of each actual purchaser of each Security ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. I-1

179 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the Securities of a Series are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in the Securities of such Series to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption and other payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts, upon DTC s receipt of funds and corresponding detail information from the Issuer or agent on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC nor its nominee, the registrar or other agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Tender Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant s interest in the Securities, on DTC s records, to the Tender Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC s records and followed by a book entry credit of tendered Securities to the Tender Agent s DTC account. 10. DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to the Issuer or the Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC s book entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. I-2

180 APPENDIX J AUDITED FINANCIAL STATEMENTS OF CAPITAL BELTWAY EXPRESS LLC FOR THE FISCAL YEARS ENDED 30 JUNE 2013 AND 2012 J-1

181 Financial Statements of Capital Beltway Express LLC For the year ended 30 June 2013

182 Capital Beltway Express LLC Statement of Operations Year ended 30 June Notes $'000 $'000 Toll, fee and other revenue 9,276 - Interest income 1,070 2,311 Total revenue 10,346 2,311 Operational costs (13,552) - Maintenance provision (4,079) - Depreciation and amortisation expense (10,240) - Finance costs 10 (42,220) - Net (loss) gain (59,745) 2,311 The above Statement of Operations should be read in conjunction with the accompanying notes. 1

183 Capital Beltway Express LLC Statement of Financial Position As at 30 June Notes $'000 $'000 Current assets Cash at bank 2 23,411 49,585 Cash reserves 2 216,547 58,900 Held to maturity investments 3-28,159 Receivables ,034 Prepayments Total current assets 240, ,681 Non current assets Property, plant and equipment 6 1,227,092 1,188,226 Capitalized borrowing costs 7 15,302 15,740 Total non current assets 1,242,394 1,203,966 Total assets 1,483,241 1,342,647 Current liabilities Other payables 8 16,808 40,009 Provision 9 1,215 - Total current liabilities 18,023 40,009 Non current liabilities Borrowings 10 1,245,665 1,164,863 Financial derivatives 11 95, ,785 Provision 9 2,864 - Total non current liabilities 1,343,714 1,315,648 Total liabilities 1,361,737 1,355,657 Equity Capital contributed , ,175 Accumulated other comprehensive losses 13 (176,740) (225,479) Accumulated (losses) gains 14 (50,451) 9,294 Total equity 121,504 (13,010) Total liabilities and member's equity 1,483,241 1,342,647 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 2

184 Capital Beltway Express LLC Statement of Cash Flows Year ended 30 June 2013 Cash flows from operating activities Notes $'000 $'000 Toll and other revenue received 8,660 - Operating expenditure (6,544) - Interest received 1,277 2,305 Interest paid (19,632) - Net cash (outflow) inflow from operating activities 17 (16,239) 2,305 Cash flows from investing activities Payments for property, plant and equipment (79,093) (300,423) Receipts from matured US Treasuries 28,136 56,789 Net cash outflows from investing activities (50,957) (243,634) Cash flows from financing activities Proceeds from borrowings 53, ,639 Proceeds from capital contributions 145,520 25,741 Net cash inflows from financing activities 198, ,380 Net increase in cash at bank 131,473 15,051 Cash at bank at the beginning of the year 108,485 93,434 Cash at bank at the end of the year 2 239, ,485 The above Statement of Cash Flows should be read in conjunction with the accompanying notes. 3

185 Capital Beltway Express LLC Statement of Changes in Members Equity Year ended 30 June 2013 Notes $ 000 $ 000 Capital contributed At the beginning of the year 203, ,434 Equity issued during the year ,520 25,741 At the end of the year 348, ,175 Accumulated other comprehensive (losses): At the beginning of the year (225,479) (121,089) Changes in fair value of cash flow hedges 48,739 (104,390) At the end of the year 13 (176,740) (225,479) Accumulated (losses) gains: At the beginning of the year 9,294 6,983 Net (loss) gain for the year 14 (59,745) 2,311 At the end of the year (50,451) 9,294 Total equity at the end of the year 121,504 (13,010) Total comprehensive loss for the year (11,006) (102,079) The above Statement of Changes in Members Equity should be read in conjunction with the accompanying notes. 4

186 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Summary of significant accounting policies (a) Basis of preparation of the financial statements The Financial Statements and accompanying Notes to the Financial Statements for Capital Beltway Express LLC (the Company ) have been prepared in accordance with accounting principles generally accepted in the United States of America. Capital Beltway Express LLC is a Delaware limited liability company. In accordance with the terms of the Limited Liability Company Agreement (the Agreement ), the Company will continue perpetually unless the Company is dissolved in accordance with the provisions of the Delaware Limited Liability Company Act and the Agreement. The initial members of Capital Beltway Express LLC were admitted on the 17 December In accordance with section 3.07 of the Agreement the debts, obligations and liabilities of the Company are solely of the Company and no member shall be obligated personally for any such debt, obligation or liability solely by reason of being a member of the Company. The rights, privileges and liabilities of classes of members are substantially the same. The financial report consists of the Capital Beltway Express LLC as a single entity (referred to as the Company). All numbers in the financial statements and notes are stated in US Dollars. (b) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Toll revenue is recognised when vehicles travel on a road that the Company, through its Concession agreement, has the right to toll. Interest revenue is measured at the fair value of the consideration received or receivable. (c) Income tax The Company is a limited liability company and is treated as a partnership for federal income tax purposes. The Company is not liable for US federal income tax as its members recognise their share of income and loss in their respective tax returns. Accordingly, no provision for US federal income taxes is recorded. (d) Cash and cash equivalents For cash flow statement presentation purposes, cash and cash equivalents includes cash at bank and cash reserves including restricted cash in multiple reserves (Note 2), deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. 5

187 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Summary of significant accounting policies (continued) (e) Receivables Receivables are recognised initially at fair value and subsequently measured at amortized cost, less provision for impairment. Trade receivables are due for settlement no more than 30 days from the date of revenue recognition. Collectability of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the assets carrying value and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to shortterm receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the statement of operations. (f) Held to maturity investments Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company s management has the positive intention and ability to hold to maturity. If the Company were to sell other than an insignificant amount of held to maturity financial assets, the whole category would be tainted and reclassified to available for sale. Held to maturity assets are included in noncurrent assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets. (g) Property, plant and equipment Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of operations during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of operations. When revalued assets are sold, it is policy to transfer the amounts included in other reserves in respect of those assets to retained earnings. During the period of constructing a qualifying asset, interest cost incurred by the Company is capitalized to the cost of the asset being constructed. The service concession arrangement for the construction of the 495 Express Lanes has also been assessed as an arrangement containing a lease. However, the Company as lessee is considered to be owner of the property, plant and equipment during the construction phase. 6

188 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Summary of significant accounting policies (continued) (h) Impairment of assets Long lived assets, other than goodwill, are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. There are no impairment charges recognised for the year ended 30 June (i) Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Company prior to the end of the financial year and which are unpaid. The amounts are unsecured and are generally paid within 30 days of recognition. (j) Provisions A provision is recognised in relation to maintenance obligations under the capital lease for the 495 Express Lanes. In accordance with US GAAP, these costs are recognised in the period in which the obligation arises, similar to contingent rentals as described in ASC Lease Classification Minimum-Lease-Payment Criterion and Residual Value Guarantees. The maintenance obligation is measured as the present value of management s best estimate of the expenditure required to settle the obligation at reporting date. (k) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any differences between the proceeds (net of transaction costs) and the redemption amount are recognised in the statement of operations over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the facility, are recognised as prepayments and amortized on a straight-line basis over the term of the facility. Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or other expenses. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. (l) Borrowing costs Borrowing costs incurred for the construction of any qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed. 7

189 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Summary of significant accounting policies (continued) (l) Borrowing costs (continued) Debt issuance costs are reported in the statement of financial position as capitalized borrowing costs and accounted for as part of the effective interest rate on borrowings. (m) Derivatives Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivatives are designated as hedging instruments, and if so, the nature of the item being hedged. The Company designated its derivatives as hedges of the cash flow of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges). At the inception of the hedging transaction the Company documents the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. The fair values of various derivative financial instruments used for hedging purposes are disclosed in note 11. The hedging reserve is shown in note 13. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the statement of operations within other income or finance costs. Amounts accumulated in equity are recycled in the statement of operations in the periods when the hedged item will affect profit or loss. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the statement of operations within finance costs. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, fixed assets) the gains and losses are deferred in equity. The deferred amounts are ultimately recognised in the statement of operations as depreciation in the case of fixed assets. When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity remains in equity and is recognised when the forecast transaction is ultimately recognised in the statement of operations. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of operations. 8

190 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Summary of significant accounting policies (continued) (n) Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs, expenses and gains and losses not affecting retained earnings that are reported in the financial statements and accompanying disclosures. These estimates are based on management s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. Refer to note 18 for discussion of the Company s critical estimates. (o) New standards to be implemented The new standards and amendments by the Financial Accounting Standards Board for the 30 June 2013 reporting period are determined to be not relevant for the Company. (p) New standards issued Certain new standards and amendments have been published that are not mandatory for 30 June 2013 reporting period. The Company's assessment of the impact of these new standards and interpretations is set out below. In July 2013, the Financial Accounting Standards Board (FASB) issued guidance allowing the use of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a benchmark interest rate for hedge accounting purposes in addition to interest rates on direct Treasury obligations of the United States government and the LIBOR. In addition, the guidance removes the restriction on using different benchmark rates for similar hedges. The guidance became effective on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013, and is not expected to have a material impact in the financial results. In July 2013, the FASB issued guidance regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Under certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The guidance is a change in financial statement presentation only and has no material impact in the financial results. The guidance is effective beginning January 1, 2014 on either a prospective or retrospective basis. In March 2013, the FASB issued guidance on when foreign currency translation adjustments should be released to net income. When a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity, the parent is required to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of 9

191 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Summary of significant accounting policies (continued) assets had resided. The guidance is effective prospectively beginning January 1, It is not expected to have a material impact in the financial results. In February 2013, the FASB issued guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of the guidance is fixed at the reporting date. Examples include debt arrangements, other contractual obligations and settled litigation. The guidance requires an entity to measure such obligations as the sum of the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus additional amounts the reporting entity expects to pay on behalf of its coobligors. The guidance is effective January 1, 2014 and is not expected to have a material impact in the financial results. 2. Cash and cash equivalents Note $ 000 $ 000 Current assets Cash at bank 23,411 49,585 Cash reserves 2.1 Maintenance Reserve 1,286 - Debt Service Reserve 58,900 58,900 Shared Services Reserve 21,415 - Ramp Up Reserve 23,905 - Revenue Stabilization Reserve 87,249 - Capital Expenditure Reserve 19,000 - Distribution Reserve 4, ,547 58,900 Total cash and cash equivalents 239, , Maintenance, Debt Service, Shared Services, Ramp Up, Revenue Stabilization, Capital Expenditure and Distribution Reserves are required to be held and only available for use pursuant to the Capital Beltway financing documents and the Amended and Restated Comprehensive Agreement (ARCA). 10

192 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Held to Maturity Investments 2013 $ $ 000 Current assets Treasury bonds - 28,159-28,159 The carrying value of treasury bonds at 30 June 2012 approximated the fair value. Contractual maturities The US Treasuries asset is a portfolio of debt instruments (Treasury notes and strips). All remaining Treasuries matured before 30 June An analysis of the maturities (using written-down values) is as follows: 2013 $ $ 000 Within 1 year - 28,159 Total - 28,159 11

193 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Receivables 2013 $ $ 000 Interest receivable - 2,034 Other debtors , Prepayment 2013 $ $ 000 Prepayment Property, plant and equipment Capital Beltway 495 Express Lanes $ 000 $ 000 Carrying value 1,237,332 1,188,226 Less: Accumulated depreciation (10,240) - Net book value 1,227,092 1,188,226 The Capital Beltway 495 Express Lanes are high occupancy toll lanes that operate on the I-495/Capital Beltway. Operation commenced 17 November Capitalized borrowing costs 2013 $ $ 000 Capitalized borrowing costs 17,513 17,513 Accumulated amortization (2,211) (1,773) 15,302 15,740 12

194 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Current other payables Note $ 000 $ 000 Trade creditors and accruals 2,306 11,137 Creditors Fluor Lane LLC - 22,272 Creditors Transurban (USA) Operations Inc ,488 2,193 Interest accruals 2,760 3,160 Other 1,254 1,247 16,808 40, Capital Beltway Express LLC has yet to receive invoices from Transurban (USA) Operations Inc. for these services. Transurban (USA) Operations Inc. has the right to invoice and demand payment for these invoices at any time. However, Capital Beltway Express LLC does not currently forecast payment of these invoices until after 30 June The carrying value of the creditors and accruals approximate fair value. 9. Provisions Current liabilities 2013 $ $ 000 Provision for maintenance 1,215-1,215 - Non current liabilities Provision for maintenance 2,864-2,864-13

195 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Borrowings 2013 $ $ 000 Transportation Infrastructure Finance and Innovation Act (TIFIA) 656, ,863 Private Activity Bonds (PABs) 589, ,000 1,245,665 1,164,863 The carrying amount of borrowings approximates fair value. Capital Beltway TIFIA The facility limit is $589 million (plus accreting interest), of which $589 million is drawn and $67.7 million of interest has accreted. Interest accrues at 4.45 per cent and is accretive until five years post substantial completion of the project construction. Substantial Completion was achieved on 16 November 2012 per the Amended and Restated Comprehensive Agreement. The facility matures on 31 December 2047 and is second ranking in priority to the PABs. There are no principal repayments due to be made within the next five years. Capital Beltway Private Activity Bonds (PABs) The bonds are marketed weekly at a variable interest rate on the Securities Industry and Financial Markets Association (SIFMA) index at a variable interest rate. Security is provided to the bond purchasers by bank-issued irrevocable direct-pay letter of credits. Agreements are in place for the letter of credit issuers to purchase the bonds should they fail to market. The irrevocable letters of credit mature in June Additionally, the Company has entered interest rate swap contracts to provide protection from movements in the underlying variable interest rate. As at 30 June 2013, $300 million of the PABs were subject to a remarketing suspension agreement expiring 31 May 2016 whereby a fixed rate of interest is paid and the bonds are not remarketed weekly. The PABs mature on 31 December The collateral against the bonds is a first ranking pledge of toll revenues generated from the operation of the 495 Express Lanes. There are no principal repayments due to be made within the next five years. 14

196 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Borrowings (continued) Interest on borrowings 2013 $ $ 000 Cost of financing Commitment and debt fees Interest expense Total recognised in Statement of Operations 272-2,586 39,362-42,220 - Interest capitalized 25,351 62,204 67,571 62, Financial derivatives 2013 $ $ 000 Interest rate swaps 95, ,785 95, ,785 Interest rate swaps are in place to hedge against the interest rate risk of the Private Activity Bonds. The interest rate swaps have been designated as cash flow hedges. For the year ended 30 June 2013, a gain of $48.7 million was recorded in accumulated gains and (losses)` not affecting accumulated losses in connection with cash flow hedges of the Company s borrowings. Financial derivatives are measured at fair value on a recurring basis in accordance with the provisions of the ASC 820 fair value hierarchy. The fair value hierarchy comprises three levels as follows: Level 1: Fair value measurements recorded using quoted prices in active markets for identical assets or liabilities. Level 2: Fair value measurements recorded using models with observable inputs. Level 3: Fair value measurements recorded using models with unobservable inputs. The interest rate swaps are valued using market observed indexes and yield curves and are all classified as Level 2. 15

197 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Capital contributed Contributed by members during the year $ 000 $ 000 DRIVe (USA) Investments LLC 130, ,858 Fluor Enterprises, Inc. 14,552 20, , ,175 Units on Issue (Par value $1) Number Number $ 000 $ 000 Opening balance 203, ,434 Capital calls made 145,520 25,741 Closing balance 348, ,175 The number of units is measured by reference to the value of capital contributed by each member. A member will own one unit for each dollar of capital contributed. The Company is required to fulfil its revenue sharing obligations with the Virginia Department of Transportation (VDOT) and meet all debt covenants prior to making a dividend payment to members. 13. Accumulated other comprehensive losses 2013 $ $ 000 Cash flow hedges (176,740) (225,479) Effect of financial derivatives deemed to be cash flow hedges (see note 11 for financial derivatives). 16

198 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Accumulated (losses) gains 2013 $ $ 000 Opening balance 9,294 6,983 (Loss) gain for the year (59,745) 2,311 Closing balance (50,451) 9, Related party transactions The related party transactions during the period included transactions with the Transurban Group as an equity investor of Transurban DRIVe Holdings LLC and Fluor Enterprises, Inc. as an equity investor in Capital Beltway Express LLC. The following transactions occurred with related parties: 2013 $ 000 Note Charged/ (Received) during the Year Outstanding at Balance Date Transurban (USA) Operations Inc. Fee for Beltway Operating and Support Services ,631 10,488 Fluor-Lane LLC Design and Construct , Express LLC Shared Facilities 15.3 (21,395) - Total 53,913 10, $ 000 Note Charged during the Year Outstanding at Balance Date Transurban (USA) Operations Inc. Fee for Beltway Operating and Support Services ,132 2,193 Fluor-Lane LLC Design and Construct ,673 22,272 Total 260,805 24,465 17

199 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Related party transactions (continued) 15.1 Pursuant to the Operating and Support Services Agreement for the Capital Beltway 495 Express Lanes Project between Capital Beltway Express LLC and Transurban (USA) Operations Inc. dated 19 December Pursuant to the Turnkey Lump-Sum Design-Build Contract for the Route 495 Express Lanes in Virginia Project between Capital Beltway Express LLC, as Concessionaire and Fluor-Lane LLC, as contractor dated 18 December Received pursuant to the Shared Facilities Agreement between Capital Beltway Express LLC and 95 Express Lanes LLC dated 31 July Commitments Committed costs at the reporting date but not recognised as liabilities are as follows: Note 2013 $ $ 000 Capital Commitment - Design and Build Contract Within one year - 68, ,752 Operations Management 2013 $ $ 000 Within one year 22,954 26,032 Later than one year to two years 23,205 22,954 Years two to three 23,215 23,205 Years three to four 23,311 23,215 Years four to five 23,985 23,311 Later than five years 130, , , , The design and build contract commitment relates to Capital Beltway Express LLC s commitment only, and excludes any VDOT funded commitments. 18

200 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Reconciliation of profit after income tax to net cash inflow from operating activities 2013 $ $ 000 Operating (loss) gain after income tax (59,745) 2,311 Change in interest accrual 207 (6) Depreciation and amortization 10,240 - Non-cash financing costs 22,588 - Maintenance Provision 4,079 - Changes in operating assets and liabilities Debtors (616) - Creditors 7,008 - Operating cash flows (16,239) 2, Use of estimates Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are disclosed below. Useful lives of plant and equipment The Company determines the estimated useful lives and related depreciation for its plant and equipment. This estimate is based on expected useful lives of the asset. It could change significantly as a result of technical innovations. The Company will increase the depreciation charge where useful lives are less than previously estimated lives, or will write-off or writedown obsolete assets. The Company depreciates the assets associated with the various toll road infrastructure over the life of the respective concession arrangements. Estimated impairment of intangible assets and cash generating units The Group tests whether assets and cash generating units have suffered any impairment, in accordance with the accounting policy stated in note 1(h). The recoverable amount of each cash generating unit has been determined based on the greater of valuein-use and fair value less costs to sell calculations. These calculations require the use of 19

201 Capital Beltway Express LLC Notes to the Financial Statements Year ended 30 June Use of estimates (continued) assumptions regarding traffic flows, discount rates, growth rates and other factors affecting operating activities of the cash generating units. Fair value of derivatives and other financial instruments The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and makes assumptions that are mainly based on market conditions existing at each balance sheet date. 20

202

203 APPENDIX K COPY OF CONTINUING DISCLOSURE AGREEMENT DELIVERED IN DECEMBER, 2010 K-1

204

205

206

207

208