AMENDMENT TO OFFICIAL STATEMENT $423,340,000 E-470 PUBLIC HIGHWAY AUTHORITY SENIOR REVENUE BONDS

Transcription

1 AMENDMENT TO OFFICIAL STATEMENT $423,340,000 E-470 PUBLIC HIGHWAY AUTHORITY SENIOR REVENUE BONDS $105,825,000 Series 2007A (Auction Rate Bonds) $105,825,000 Series 2007B (Auction Rate Bonds) $105,825,000 Series 2007C (Auction Rate Bonds) $105,865,000 Series 2007D (Auction Rate Bonds) The Official Statement dated June 6, 2007 for the above-captioned Bonds is amended as follows: 1. All references in the Official Statement to denominations and authorized denominations, including references in Appendices A and H to Authorized Denominations, are amended to mean, (a) with respect to Series 2007A Bonds, Series 2007B Bonds and Series 2007C Bonds that are Auction Rate Bonds, $25,000 in principal amount and any integral multiple thereof, and (b) with respect to Series 2007D Bonds that are Auction Rate Bonds, $5,000 in principal amount and any integral multiple thereof. 2. The reference to the Refunded Series 1997A Bonds in the second paragraph under the caption THE REFINANCING PLAN 2007 Refunding Project is amended to include the Series 1997A Bonds maturing on September 1, E-470 PUBLIC HIGHWAY AUTHORITY By: /s/ Edward J. Delozier Executive Director By: /s/ John D. McCuskey Deputy Executive Director and Director of Finance and Audit Amendment dated: June 12, 2007

2 NEW ISSUE - BOOK ENTRY ONLY RATINGS: (See "RATINGS" herein) In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2007 Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax; and, under existing Colorado statutes, the Series 2007 Bonds and the income therefrom are exempt from taxation, except inheritance, estate and transfer taxes, in Colorado. See "TAX MATTERS" within for a more complete description of the opinions of Bond Counsel. $105,825,000 SERIES 2007A (Auction Rate Bonds) $423,340,000 E-470 PUBLIC HIGHWAY AUTHORITY SENIOR REVENUE BONDS $105,825,000 SERIES 2007B (Auction Rate Bonds) $105,825,000 SERIES 2007C (Auction Rate Bonds) $105,865,000 SERIES 2007D (Auction Rate Bonds) Dated: Date of Delivery Due: September 1, as shown on inside cover This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Investors are advised to read the entire Official Statement, including "INVESTMENT CONSIDERATIONS," to obtain information essential to the making of an informed investment decision. The E-470 Public Highway Authority Senior Revenue Bonds, Series 2007A, Series 2007B, Series 2007C, and Series 2007D (referred to herein as the "Series 2007A Bonds," the "Series 2007B Bonds," the "Series 2007C Bonds," the "Series 2007D Bonds," and collectively as the "Series 2007 Bonds") are being issued pursuant to a Master Bond Resolution adopted by the E-470 Public Highway Authority (the "Authority") on August 14, 1997, as amended and supplemented, and an Amended and Restated Sixth Supplemental Bond Resolution adopted by the Authority on, 2007 (collectively, the "Resolutions"). Proceeds of the Series 2007 Bonds will be used (i) to current refund a portion of the Authority s currently outstanding Senior Revenue Bonds, Series 1997A (the "Refunded Series 1997A Bonds"), and (ii) to pay costs of issuance relating to the Series 2007 Bonds. As of June 1, 2007, the Authority currently has outstanding approximately $43,280,000 aggregate principal amount of its Vehicle Registration Fee Bonds, Series 2001 (the "Vehicle Registration Fee Bonds"), $441,600,000 aggregate principal amount of its Senior Revenue Bonds, Series 1997A (the "Series 1997A Bonds"), $299,345,097 original principal amount, and $499,150, accreted value, of its Senior Revenue Bonds, Series 1997B (the "Series 1997B Bonds"), $32,905,000 aggregate principal amount of its Senior Revenue Bonds, Series 1997C (the "Series 1997C Bonds"), $154,024,296 original principal amount, and $238,283, accreted value, of its Senior Revenue Bonds, Series 2000B (the "Series 2000B Bonds"), $76,484,624 original principal amount, and $87,110, accreted value, of its Senior Revenue Bonds, Series 2004A (the "Series 2004A Bonds"), $70,705,810 original principal amount, and $81,072, accreted value, of its Senior Revenue Bonds, Series 2004B (the "Series 2004B Bonds"), and $16,680,798 original principal amount, and $15,412, accreted value, of its Senior Revenue Bonds, Series 2004C (the "Series 2004C Bonds"), $53,755,000 original principal amount of its Senior Revenue Bonds, Series 2006A (the "Series 2006A Bonds") and $56,932,732 original principal amount, and $60,070, accreted value, of its Senior Revenue Bonds, Series 2006B (the "Series 2006B Bonds"). The Series 2007 Bonds are secured on a parity with the Series 1997A Bonds, Series 1997B Bonds, the Series 1997C Bonds, the Series 2000B Bonds, the Series 2004A Bonds, the Series 2004B Bonds, the Series 2004C Bonds, the Series 2006A Bonds, and the Series 2006B Bonds. The Series 2007 Bonds are special, limited obligations of the Authority, payable solely from the Trust Estate (excluding, to the extent provided in the Resolutions, Vehicle Registration Fees and related Funds and Accounts pledged for the payment of the Vehicle Registration Fee Bonds) in accordance with the Resolutions. The Series 2007 Bonds shall not constitute or be construed to be a debt or multiple fiscal year direct or indirect debt or other financial obligation, or a pledge of the taxing powers, faith, or credit of the State of Colorado or any political subdivision of the State of Colorado (other than the Authority to the extent provided in the Resolutions). The Authority has no taxing powers. The Series 2007 Bonds will be issued in fully registered form in denominations of $25,000 in principal amount or any integral multiple thereof and will be dated as set forth above. The Series 2007 Bonds will mature on September 1, in the years set forth on the inside cover of this Official Statement. The Series 2007 Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Series 2007 Bonds. Payments of principal of and premium, if any, and interest on the Series 2007 Bonds will be made by U.S. Bank National Association, Denver, Colorado, as Paying Agent, to DTC which in turn is obligated to remit such principal, premium, if any, and interest to DTC participants for subsequent disbursement to the beneficial owners of the Series 2007 Bonds. Payment, when due, of the regularly scheduled principal of and interest on the Series 2007 Bonds will be guaranteed by a financial guaranty insurance policy (the "Bond Insurance Policy") to be issued by: (the "Bond Insurer" or "MBIA"). The Series 2007 Bonds are subject to optional redemption prior to maturity as described herein. The Series 2007 Bonds are also subject to mandatory sinking fund redemption prior to maturity. The Series 2007 Bonds are offered when, as and if issued by the Authority, subject to the approving opinion of Kutak Rock LLP, bond counsel. Certain legal matters will be passed upon for the Authority by its special counsel, Hogan & Hartson L.L.P., Denver, Colorado, and its general counsel, Icenogle, Norton, Smith and Blieszner, P.C., Denver, Colorado. Certain legal matters will be passed upon for the Underwriters by Hawkins Delafield & Wood LLP, New York, New York. Certain legal matters will be passed upon for the Bond Insurer by Kutak Rock LLP as special counsel to the Bond Insurer. It is expected that the Series 2007 Bonds in book-entry form will be available for delivery through DTC in New York, New York on or about June 14, BEAR, STEARNS & CO. INC. MORGAN STANLEY GEORGE K. BAUM & COMPANY June 6, 2007

3 Initial Auction Period June 14, 2007 to June 25, 2007 Auction Period Generally 7-Day First Auction Date June 25, 2007 Maturity Schedule $105,825,000 Series 2007A Bonds First Interest Payment Date June 26, 2007 Auction Date Generally Monday Interest Payment Date Generally Tuesday Final Maturity Date September 1, 2039 CUSIP 26822L HM9 The initial interest rate for the Series 2007A Bonds will apply to the period commencing on their date of delivery to and including the initial Auction Date for the Series 2007A Bonds scheduled for June 25, Thereafter, the Series 2007A Bonds will bear interest at an Auction Rate resulting from an Auction conducted on each Auction Date in accordance with the Auction Procedures, which are summarized in "Appendix H - AUCTION PROCEDURES," subject to certain exceptions. A Holder of the Series 2007A Bonds who desires to sell the Series 2007A Bonds on an Auction Date may be required to hold such Series 2007A Bonds after such Auction Date if Sufficient Clearing Bids to purchase such Series 2007A Bonds are not received, in which case the Auction Rate will be the Maximum Rate (as such terms are defined in Appendix H). Initial Auction Period June 14, 2007 to July 10, 2007 Auction Period Generally 28-Day First Auction Date July 10, 2007 $105,825,000 Series 2007B Bonds First Interest Payment Date July 11, 2007 Auction Date Generally Tuesday Interest Payment Date Generally Wednesday Final Maturity Date September 1, 2039 CUSIP 26822L HN7 The initial interest rate for the Series 2007B Bonds will apply to the period commencing on their date of delivery to and including the initial Auction Date for the Series 2007B Bonds scheduled for July 10, Thereafter, the Series 2007B Bonds will bear interest at an Auction Rate resulting from an Auction conducted on each Auction Date in accordance with the Auction Procedures, which are summarized in "Appendix H AUCTION PROCEDURES," subject to certain exceptions. A Holder of the Series 2007B Bonds who desires to sell the Series 2007B Bonds on an Auction Date may be required to hold such Series 2007B Bonds after such Auction Date if Sufficient Clearing Bids to purchase such Series 2007B Bonds are not received, in which case the Auction Rate will be the Maximum Rate (as such terms are defined in Appendix H). Initial Auction Period June 14, 2007 to June 21, 2007 Auction Period Generally 7-Day First Auction Date June 21, 2007 $105,825,000 Series 2007C Bonds First Interest Payment Date June 22, 2007 Auction Date Generally Thursday Interest Payment Date Generally Friday Final Maturity Date September 1, 2039 CUSIP 26822L HP2 The initial interest rate for the Series 2007C Bonds will apply to the period commencing on their date of delivery to and including the initial Auction Date for the Series 2007C Bonds scheduled for June 21, Thereafter, the Series 2007C Bonds will bear interest at an Auction Rate resulting from an Auction conducted on each Auction Date in accordance with the Auction Procedures, which are summarized in "Appendix H AUCTION PROCEDURES," subject to certain exceptions. A Holder of the Series 2007C Bonds who desires to sell the Series 2007C Bonds on an Auction Date may be required to hold such Series 2007C Bonds after such Auction Date if Sufficient Clearing Bids to purchase such Series 2007C Bonds are not received, in which case the Auction Rate will be the Maximum Rate (as such terms are defined in Appendix H). Initial Auction Period June 14, 2007 to July 20, 2007 Auction Period Generally 28-Day First Auction Date July 20, 2007 $105,865,000 Series 2007D Bonds First Interest Payment Date July 23, 2007 Auction Date Generally Friday Interest Payment Date Generally Monday Final Maturity Date September 1, 2039 CUSIP 26822L HQ0 The initial interest rate for the Series 2007D Bonds will apply to the period commencing on their date of delivery to and including the initial Auction Date for the Series 2007D Bonds scheduled for July 20, Thereafter, the Series 2007D Bonds will bear interest at an Auction Rate resulting from an Auction conducted on each Auction Date in accordance with the Auction Procedures, which are summarized in "Appendix H AUCTION PROCEDURES," subject to certain exceptions. A Holder of the Series 2007D Bonds who desires to sell the Series 2007D Bonds on an Auction Date may be required to hold such Series 2007D Bonds after such Auction Date if Sufficient Clearing Bids to purchase such Series 2007D Bonds are not received, in which case the Auction Rate will be the Maximum Rate (as such terms are defined in Appendix H). (1) Neither the Authority nor the Underwriters take any responsibility for the accuracy of CUSIP numbers, which are included solely for the convenience of Owners of the Series 2007 Bonds. This Official Statement has been prepared for use in connection with the initial offering of the Series 2007 Bonds, and describes the terms of the Series 2007 Bonds while they bear interest at an Auction Rate. It is not intended to provide information relating to the Series 2007 Bonds while they bear interest at any other interest rate mode. No dealer, salesman, or other person has been authorized to give any information or to make any representation, other than the information contained in this Official Statement, in connection with the offering of the Series 2007 Bonds, and, if given or made, such information or representation must not be relied upon as having been authorized by the Authority or the Underwriters. The information in this Official Statement is subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or others since the date hereof. This Official Statement does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not authorized, or in which any person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Other than with respect to information concerning MBIA Insurance Corporation ("MBIA"), contained under the caption "BOND INSURANCE" and Appendix G - "Specimen Bond Insurance Policy for the Series 2007 Bonds" herein, none of the information in this Official Statement has been supplied or verified by MBIA and MBIA makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information; (ii) the validity of the Series 2007 Bonds; or (iii) the tax exempt status of the interest on the Series 2007 Bonds. This Official Statement is not a contract and does not provide investment advice. Investors should consult their financial advisors and legal counsel with questions about this Official Statement and the Series 2007 Bonds being offered, or anything else related to this bond issue. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their respective responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. Financial Advisor

4 TABLE OF CONTENTS PAGE INTRODUCTORY AND SUMMARY STATEMENT...1 Purposes...1 The Authority...1 The E-470 Toll Road...2 The Series 2007 Bonds...2 Security and Sources of Payment for the Series 2007 Bonds...3 Traffic and Revenue Projections...4 Bond Insurance for the Series 2007 Bonds...5 Continuing Disclosure Undertaking...5 Tax Matters...5 Investment Considerations...6 Professionals Involved in the Offering...6 Other Matters...6 INVESTMENT CONSIDERATIONS...7 Traffic and Revenue Projections...7 DIA Activity...7 Transportation Network and Potential Competition...8 Operating Costs...8 Default and Remedies; No Acceleration...8 THE SERIES 2007 BONDS...9 Special Considerations Relating to the Series 2007 Bonds Bearing Interest at the Auction Rate...13 Conversion to Another Interest Mode...17 Registration, Payment, Transfer, and Exchange; Book Entry Form...17 Redemption of the Series 2007 Bonds...18 Selection of Series 2007 Bonds to be Redeemed...21 Notice of Redemption...22 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS...23 Series 2007 Bonds and Other Senior Bonds...23 Pledge of Trust Estate...24 Toll Revenues...25 Vehicle Registration Fees...28 Other Revenues...30 Senior Bonds Debt Service Reserve Account...31 Surplus Fund...32 Renewal and Replacement Fund...33 Operating Reserve Fund...33 Other Transfers to Debt Service Fund...34 Issuance of Additional Bonds...38 Parity Obligations and Subordinate Obligations...40 Special Project Bonds...40 Investment of Funds...41 BOND INSURANCE...43 The MBIA Insurance Corporation Insurance Policy...43 MBIA Insurance Corporation...44 Regulation...44 Financial Strength Ratings of MBIA...45 MBIA Financial Information...45 Incorporation of Certain Documents by Reference...45 THE REFINANCING PLAN Refunding Project...46 Estimated Sources and Uses of Funds...47 Escrow Fund...47 PROJECTED FINANCIAL INFORMATION...48 THE AUTHORITY...53 General...53 Management...53 Powers of the Authority...56 Authority Liability...58 Financial Information Concerning the Authority...59 THE E-470 TOLL ROAD...61 General...61 PAGE Operation and Maintenance Insurance Toll Collection System...62 Recent Activities of the Authority FORWARD-LOOKING STATEMENTS...64 THE TOLL REVENUE STUDY LITIGATION CONSULTANTS VERIFICATION AGENT...65 FINANCIAL STATEMENTS TAX MATTERS Generally Changes in Federal and State Tax Law...66 LEGAL MATTERS...67 RATINGS UNDERWRITING CONTINUING DISCLOSURE UNDERTAKING RELATIONSHIP OF PARTIES TRUSTEE ADDITIONAL INFORMATION APPENDICES: Appendix A Appendix B Appendix C Appendix D Appendix E SUMMARY OF THE RESOLUTIONS...A-1 AUDITED FINANCIAL STATEMENTS OF THE AUTHORITY FOR THE FISCAL YEARS ENDED DECEMBER 31, 2006 AND B-1 THE TOLL REVENUE STUDY...C-1 FORM OF BOND COUNSEL OPINION...D-1 FORM OF CONTINUING DISCLOSURE UNDERTAKING... E-1 Appendix F BOOK-ENTRY ONLY SYSTEM... F-1 Appendix G SPECIMEN BOND INSURANCE... POLICY FOR SERIES 2007 BONDS... G-1 Appendix H AUCTION PROCEDURES... H-1 -i-

5 (THIS PAGE INTENTIONALLY LEFT BLANK)

6 OFFICIAL STATEMENT $423,340,000 E-470 PUBLIC HIGHWAY AUTHORITY SENIOR REVENUE BONDS $105,825,000 SERIES 2007A (Auction Rate Bonds) $105,825,000 SERIES 2007B (Auction Rate Bonds) $105,825,000 SERIES 2007C (Auction Rate Bonds) $105,865,000 SERIES 2007D (Auction Rate Bonds) INTRODUCTORY AND SUMMARY STATEMENT This Introductory and Summary Statement is qualified in its entirety by the more detailed information included and referred to elsewhere in this Official Statement, including the Appendices hereto. The offering of the Series 2007 Bonds (as defined below) to potential investors is made only by means of the entire Official Statement, including all such Appendices. Terms used in this Introductory and Summary Statement and not otherwise defined shall have the respective meanings assigned to them elsewhere in this Official Statement. Definitions of certain capitalized terms relating to the Resolutions and used in this Official Statement are set forth in Appendix A "SUMMARY OF THE RESOLUTIONS." Purposes This Official Statement is provided to furnish certain information in connection with the issuance and sale by the E-470 Public Highway Authority (the "Authority") of $105,825,000 aggregate principal amount of its Senior Revenue Bonds, Series 2007A (Auction Rate Bonds) (the "Series 2007A Bonds"), $105,825,000 aggregate principal amount of its Senior Revenue Bonds, Series 2007B (Auction Rate Bonds) (the "Series 2007B Bonds"), $105,825,000 aggregate principal amount of its Senior Revenue Bonds, Series 2007C (Auction Rate Bonds) (the "Series 2007C Bonds"), and $105,865,000 aggregate principal amount of its Senior Revenue Bonds, Series 2007D (Auction Rate Bonds) (the "Series 2007D Bonds" together with the Series 2007A Bonds, Series 2007B Bonds and the Series 2007C Bonds, the "Series 2007 Bonds"). Proceeds of the Series 2007 Bonds will be used (i) to current refund a portion of the Authority s currently outstanding Senior Revenue Bonds, Series 1997A (the "Refunded Series 1997A Bonds"), and (ii) to pay costs of issuance relating to the Series 2007 Bonds. See "THE REFINANCING PLAN Estimated Sources and Uses of Funds." The Authority The E-470 Public Highway Authority is a body corporate and political subdivision of the State of Colorado, established in January 1988 with all the powers, duties, and privileges permitted by the Public Highway Authority Law of the State, part 5 of article 4 of title 43, Colorado Revised Statutes, as amended (the "Public Highway Act"). The Board of Directors (the "Board") of the Authority is composed of one elected official from each of Arapahoe County, Adams County, Douglas County, the Cities of Aurora, Thornton, Brighton, and Commerce City, and the Town of Parker, Colorado (together, the "Member Governments"). The Authority is responsible for the financing, construction, and operation of the toll highway known as E-470 (the "E-470 Toll Road"). The Authority has no taxing powers. See "THE AUTHORITY" and "THE E-470 TOLL ROAD." - 1 -

7 The E-470 Toll Road The E-470 Toll Road, located on the eastern perimeter of the Denver metropolitan area consists of a 47-mile beltway extending from Interstate 25 ("I-25") on the southern perimeter of the Denver metropolitan through 120 th Avenue north of Denver International Airport ("DIA") to I-25 on the northern perimeter of the Denver metropolitan area. Segment I of the E-470 Toll Road was opened to traffic in June The northern portion of Segment II and the southern portion of Segment III opened to traffic in July In May 1999, the remaining portions of Segment II and III were opened to link the already operational north and south sections of the E-470 Toll Road. Segment IV, the final segment of the E-470 Toll Road, was opened in two sections. The first, from 120 th Avenue to US 85, opened in August 2002; the second, from US 85 to I-25, opened in January Certain operating information regarding the E-470 Toll Road is set forth under the caption "THE E-470 TOLL ROAD Operation and Maintenance." The E-470 Toll Road passes through the Member Governments of Adams County, Arapahoe County, Douglas County, the Cities of Aurora, Thornton, Brighton, and Commerce City, and the Town of Parker. The Series 2007 Bonds Authority for Issuance The Series 2007 Bonds are issued pursuant to the authority of the Public Highway Act, the Supplemental Public Securities Act, part 2 of article 57 of title 11, Colorado Revised Statutes, as amended, and the Public Securities Refunding Act, article 56 of title 11, Colorado Revised Statutes, as amended, and pursuant to a Master Bond Resolution adopted by the Authority on August 14, 1997, as amended and supplemented, and an Amended and Restated Sixth Supplemental Bond Resolution adopted by the Authority on May 24, 2007 (collectively, the "Resolutions"). See "THE SERIES 2007 BONDS." Denominations and Payment The Series 2007 Bonds will be initially issued as Auction Rate Bonds, and will mature and bear interest as set forth on the inside front cover page hereof and as more fully described in the section entitled "THE SERIES 2007 BONDS" and in Appendix H AUCTION PROCEDURES. The Series 2007 Bonds will be issued in fully registered form in denominations of $25,000 in principal amount or any integral multiple thereof. See "THE SERIES 2007 BONDS" herein. U.S. Bank National Association, Denver, Colorado, or its successor, will serve as the Trustee, registrar, and paying agent (the "Trustee," "Registrar," or the "Paying Agent") for the Series 2007 Bonds pursuant to the Resolutions. The principal and Redemption Price of any Series 2007 Bond will be paid to the Owner thereof as shown on the registration records of the Registrar upon maturity or prior redemption thereof and upon presentation and surrender to the Paying Agent. Interest on the Series 2007 Bonds (other than interest paid as part of the Redemption Price thereof) will be paid by check or draft of the Trustee mailed, on each Interest Payment Date, to the Owner thereof at his address as it last appears on the registration records of the Registrar at the close of business on the Record Date. Payment of interest by means of wire transfer may be used if mutually agreed to in writing between the Owner of $1,000,000 or more in aggregate principal amount of Series 2007 Bonds and the Trustee, subject to certain requirements of the Resolutions

8 Redemption Prior to Maturity The Series 2007 Bonds are subject to optional redemption prior to maturity. The Series 2007 Bonds are also subject to mandatory sinking fund redemption prior to maturity. All redemptions for the Series 2007 Bonds shall be in integral multiples of the Authorized Denominations thereof. See "THE SERIES 2007 BONDS Redemption of the Series 2007 Bonds." Book Entry System The Series 2007 Bonds are to be issued in fully registered form and are initially to be registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), as securities depository for the Series 2007 Bonds. Individual purchasers of the Series 2007 Bonds will not receive physical delivery of bond certificates, except as more fully described herein. Series 2007 Bonds will only be transferable on the register kept by the Registrar. See "THE SERIES 2007 BONDS Registration, Payment, Transfer, and Exchange; Book Entry Form." Security and Sources of Payment for the Series 2007 Bonds The Series 2007 Bonds are special, limited obligations of the Authority, payable solely from and secured by a lien on the Trust Estate, to the extent provided under the Resolutions. Debt Service on the Series 2007 Bonds is payable from the Trust Estate after the payment of Operating Expenses and after application of Vehicle Registration Fees to pay debt service on the Authority's Vehicle Registration Fee Bonds, outstanding as of June 1, 2007, in the approximate aggregate principal amount of $43,280,000, and to restore any deficiency in the Vehicle Registration Fee Bonds Debt Service Reserve Account. The Series 2007 Bonds are payable on a parity with, as of June 1, 2007, $441,600,000 aggregate principal amount of the Senior Revenue Bonds, Series 1997A (the "Series 1997A Bonds"), $299,345,097 original principal amount, and $499,150, accreted value, of the Senior Revenue Bonds, Series 1997B (the "Series 1997B Bonds"), $32,905,000 aggregate principal amount of the Senior Revenue Bonds, Series 1997C (the "Series 1997C Bonds"), $154,024,296 original principal amount, and $238,283, accreted value, of the Senior Revenue Bonds, Series 2000B (the "Series 2000B Bonds"), $76,484,624 original principal amount, and $87,110, accreted value, of the Senior Revenue Bonds, Series 2004A (the "Series 2004A Bonds"), $70,705,810 original principal amount, and $81,072, accreted value, of the Senior Revenue Bonds, Series 2004B (the "Series 2004B Bonds"), and $16,680,798 original principal amount, and $15,412, accreted value, of the Senior Revenue Bonds, Series 2004C (the "Series 2004C Bonds"), $53,755,000 original principal amount of the Senior Revenue Bonds, Series 2006A (the "Series 2006A Bonds") and $56,932,732 original principal amount, and $60,070, accreted value, of the Senior Revenue Bonds, Series 2006B (the "Series 2006B Bonds") The Series 1997A Bonds, the Series 1997B Bonds, the Series 1997C Bonds, the Series 2000B Bonds, the Series 2004A Bonds, the Series 2004B Bonds, the Series 2004C Bonds, the Series 2006A Bonds, the Series 2006B Bonds, and the Series 2007 Bonds are referred to collectively herein as the "Senior Bonds." The Vehicle Registration Fee Bonds and the Senior Bonds are sometimes referred to collectively herein as the "Bonds." For a summary description of the security for the Series 2007 Bonds, see "THE SERIES 2007 BONDS" and "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS Series 2007 Bonds and Other Senior Bonds," " Pledge of Trust Estate," and " Flow of Funds" herein. See also "BOND INSURANCE." The Trust Estate consists principally of Revenues (as defined in the Resolutions) and certain other moneys on deposit under the Resolutions (including, but not limited to, the Senior Bonds Debt Service Reserve Account, as described herein). Highway tolls are the predominant source of - 3 -

9 Revenues available to pay debt service on the Series 2007 Bonds. The Vehicle Registration Fees, which constitute a portion of the Revenues, are subject to a first lien for the payment of the principal of and interest on the Vehicle Registration Fee Bonds, as described herein, and restoration of any deficiency in the Vehicle Registration Fee Bonds Debt Service Reserve Account. Therefore, Vehicle Registration Fees are not available to pay debt service on the Series 2007 Bonds to the extent they are required to pay debt service on the Vehicle Registration Fee Bonds or to restore any deficiency in the Vehicle Registration Fee Bonds Debt Service Reserve Account. For a description of the security for the Vehicle Registration Fee Bonds, see "SUMMARY OF THE RESOLUTIONS Security for the Bonds and Parity Obligations," " Flow of Funds" and " Other Transfers to Debt Service Fund" in Appendix A hereto. The Series 2007 Bonds are secured by a pledge of the Trust Estate to the extent provided in the Resolutions on a parity with the pledge of the Trust Estate to the Series 1997A Bonds, the Series 1997B Bonds, the Series 1997C Bonds, the Series 2000B Bonds, the Series 2004A Bonds, the Series 2004B Bonds, the Series 2004C Bonds, the Series 2006A Bonds, and the Series 2006B Bonds and prior to the pledge of such Trust Estate to the payment of any Subordinate Bonds that may hereafter be issued in accordance with the Resolutions. The Bonds, including the Series 2007 Bonds, shall not constitute or be construed to be a debt or multiple fiscal year direct or indirect debt or other financial obligation, or a pledge of the taxing power, faith or credit of the State or any political subdivision of the State (other than the Authority, to the extent provided in the Resolutions). The Authority has no taxing powers. Traffic and Revenue Projections The Authority retained Wilbur Smith Associates (the "Traffic and Revenue Consultant") to prepare a comprehensive Traffic and Revenue Study dated October, 2005 that projects the future traffic volume on the E-470 Toll Road and future toll revenues (the "Comprehensive Toll Revenue Study"). The Traffic and Revenue Consultant also prepared a Traffic and Revenue Study Summary Report (the "Toll Revenue Study Summary Report"), dated October, 2005, which is a condensed version of the Comprehensive Toll Revenue Study. The Comprehensive Toll Revenue Study is not included in this Official Statement but is available through the Authority s website at com, and is incorporated by reference herein. The Toll Revenue Study Summary Report, which is included in Appendix C of this Official Statement, has not been updated in connection with the issuance of the Series 2007 Bonds. The Traffic and Revenue Consultant did, however, prepare a letter dated August 22, 2006, also included in Appendix C, in connection with the issuance of the Series 2006A Bonds and Series 2006B Bonds (the "2006 Letter of the Traffic and Revenue Consultant"). The 2006 Letter of the Traffic and Revenue Consultant stated that, except with respect to the specific changes set forth in the 2006 Letter of the Traffic and Revenue Consultant relating to projected transactions and revenues, the statements and information presented in the Comprehensive Toll Revenue Study and Toll Revenue Study Summary Report were accurate and complete in all material respects and no material change or development involving a prospective change had occurred that would make any of the statements and information in either the Comprehensive Toll Revenue Study or Toll Revenue Study Summary Report inaccurate or incomplete as of the date of the 2006 Letter of the Traffic and Revenue Consultant. In addition, the Traffic and Revenue Consultant prepared a letter dated May 25, 2007, also included in Appendix C, in connection with the issuance of the Series 2007 Bonds (the "2007 Letter of the Traffic and Revenue Consultant"). The 2007 Letter of the Traffic and Revenue Consultant stated that the purpose of the letter was to review actual experience during 2006 and the first four months of 2007 to determine if changes to the 2006 estimates were warranted. The 2007 Letter of the Traffic and Revenue Consultant further states that based on the fact that the actual revenue experience is within 0.1 percent of the Traffic and Revenue Consultant s estimate, the Traffic and Revenue Consultant finds no reason to make revisions to its previous forecasts. The financial projections and other forecasts - 4 -

10 contained in the Comprehensive Toll Revenue Study, Toll Revenue Study Summary Report, 2006 Letter of the Traffic and Revenue Consultant, and 2007 Letter of the Traffic and Revenue Consultant are based on what the Traffic and Revenue Consultant believed to be reasonable evaluations of conditions as of the date of such documents and assumptions regarding future conditions. Achievement of any financial projections and other forecasts is dependent upon future events which cannot be assured. Therefore, actual results have varied and likely will continue to vary from the projections and forecasts contained in the Comprehensive Toll Revenue Study and Toll Revenue Study Summary Report. Any reference herein to the "Toll Revenue Study" shall mean collectively the Comprehensive Toll Revenue Study, Toll Revenue Study Summary Report, 2006 Letter of the Traffic and Revenue Consultant, and 2007 Letter of the Traffic and Revenue Consultant. See "THE TOLL REVENUE STUDY," "INVESTMENT CONSIDERATIONS," "FORWARD-LOOKING STATEMENTS" and Appendix C. INVESTORS ARE ADVISED TO REVIEW CAREFULLY THE TOLL REVENUE STUDY IN ITS ENTIRETY. Bond Insurance for the Series 2007 Bonds Payment, when due, of the regularly scheduled principal of and interest on all of the Series 2007 Bonds will be guaranteed by a financial guaranty insurance policy (the "Bond Insurance Policy") to be issued by MBIA Insurance Corporation ("MBIA" or the "Bond Insurer") simultaneously with the issuance of the Series 2007 Bonds. See "BOND INSURANCE." A specimen of the Bond Insurance Policy is included in Appendix G hereto. Continuing Disclosure Undertaking Concurrently with the issuance and sale of the Series 2007 Bonds, the Authority will execute a continuing disclosure undertaking providing for the delivery to central repositories of certain annual financial and operating reports and timely material event disclosure as more fully described herein. See "CONTINUING DISCLOSURE UNDERTAKING." Tax Matters In the opinion of Bond Counsel, under existing laws, regulations, rulings, and judicial decisions, interest on the Series 2007 Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinions described in the preceding sentence assume the accuracy of certain representations and compliance by the Authority with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be met subsequent to the issuance of the Series 2007 Bonds. Notwithstanding Bond Counsel's opinion that interest on the Series 2007 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporations adjusted current earnings over their alternative maximum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). In the opinion of Bond Counsel, under existing Colorado statutes, the Series 2007 Bonds and the income therefrom are exempt from taxation, except inheritance, estate and transfer taxes, in Colorado. See "TAX MATTERS." - 5 -

11 Investment Considerations Investment in the Series 2007 Bonds involves risks, some of which are discussed in this Official Statement. For a description of certain of such risks, see "INVESTMENT CONSIDERATIONS." Professionals Involved in the Offering Bear, Stearns & Co. Inc., Morgan Stanley & Co. Incorporated, and George K. Baum & Company and will act as Underwriters in connection with the offering and issuance of the Series 2007 Bonds. See "UNDERWRITING." Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Incorporated will also act as Broker-Dealers for the Series 2007 Bonds. U.S. Bank National Association will act as Trustee with respect to the Series 2007 Bonds. U.S. Bank National Association will also act as the Auction Agent with respect to the Series 2007 Bonds. Kutak Rock LLP will act as Bond Counsel for the Series 2007 Bonds. Certain legal matters will be passed upon for the Authority by its general counsel, Icenogle, Norton, Smith and Blieszner, P.C., Denver, Colorado, and by its special counsel, Hogan & Hartson L.L.P., Denver, Colorado. The Underwriters are being represented in connection with their purchase of the Series 2007 Bonds by Hawkins Delafield & Wood LLP, New York, New York. Piper Jaffray & Co. serves as Financial Advisor to the Authority. The Bond Insurer is being represented in connection with the issuance of the Series 2007 Bonds by Kutak Rock LLP. See "RELATIONSHIP OF PARTIES." The Authority's financial statements for the fiscal years ended December 31, 2006 and 2005, which are included in Appendix B hereto, were audited by KPMG LLP. Other Matters This Official Statement speaks only as of its date, and the information and expressions of opinion contained herein are subject to change without notice. Neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority since the date hereof. The summaries of and references to all agreements, documents, statutes, reports, certificates, and other instruments referred to herein do not purport to be complete, comprehensive or definitive and each such summary or reference is qualified in its entirety by reference to each such agreement, document, statute, report, certificate, or instrument. Copies of any such agreements, documents, statutes, reports, certificates, and other instruments are available upon written request to the Authority's Deputy Executive Director and Director of Finance and Audit at the Authority's offices located at East 6 th Parkway, Aurora, Colorado 80018, telephone (303) U.S. Bank National Association, as Trustee under the Resolutions, has not reviewed this Official Statement and has made no representations as to the information contained herein

12 INVESTMENT CONSIDERATIONS The Authority's ability to derive Revenues from the use and operation of the E-470 Toll Road in amounts sufficient to pay debt service on the Bonds, including the Series 2007 Bonds, depends upon numerous factors, many of which are not within the control of the Authority. Described below are certain factors that could affect the E-470 Toll Road. Traffic and Revenue Projections Highway tolls are the predominant source of revenue available to pay debt service on the Senior Bonds, including the Series 2007 Bonds. The Toll Revenue Study projects the future traffic volume of the E-470 Toll Road and future toll revenues of the E-470 Toll Road. The achievement of financial and other projections is dependent upon future events that cannot be assured. The ultimate use of the E-470 Toll Road by motorists and the level of toll revenues to be generated through such use will be influenced by numerous factors, including, among others, household and employment trends within the E-470 Toll Road corridor area (including telecommuting practices), the level of congestion on alternative freeways and arterial highways and time savings experienced by using the E-470 Toll Road, the levels of tolls and their rate of increase over time, the availability of fuel and level of fuel prices, and the construction of new or improved competitive roadways, transit facilities, or transportation modes. See Appendix C "THE TOLL REVENUE STUDY" for a discussion of certain of such factors. The traffic projections of the Traffic and Revenue Consultant are sensitive to changes in, among other assumptions, population, household, and employment levels, commuting practices, as well as future levels of activity at DIA. For example, in the event growth in households or employment in the Denver area and the E-470 corridor occurs at rates below that projected or growth in enplanements at DIA occurs at a rate below that projected, traffic levels may be negatively impacted and traffic and revenue projections may not be realized. Neither the Authority nor the Traffic and Revenue Consultant can make any assurances that growth projections in the Toll Revenue Study will be realized. See "FORWARD-LOOKING STATEMENTS" and Appendix C "THE TOLL REVENUE STUDY". The levels of traffic and revenues projected by the Traffic and Revenue Consultant are based upon the toll schedule for vehicle tolls which was originally established by the Authority in June of 1995, as modified by the Authority in 2005 based upon recommendations of the Traffic and Revenue Consultant. The impact of future toll rate increases on traffic volume may vary from the projections of the Traffic and Revenue Consultant. Furthermore, if the revenues realized are below projections, the Authority may raise toll rates to pay debt service on the Senior Bonds or otherwise satisfy the revenue covenant under the Resolutions. There is no assurance that Revenues resulting from tolls will increase proportionately or at all as a consequence of changes in toll structure. Actual results have varied and likely will continue to vary from the projections and forecasts contained in the Toll Revenue Study. If the levels of toll revenues generated by the E-470 Toll Road are significantly lower than the projections of the Traffic and Revenue Consultant, the Authority may not have sufficient funds to pay all debt service requirements on the Series 2007 Bonds. DIA Activity The use of the E-470 Toll Road by motorists and the level of toll revenues to be generated through such use will be influenced in part by DIA activity and associated vehicular traffic (including airport trips for airport employees, passengers, and air service and air cargo). The activity - 7 -

13 levels at DIA and the commercial airlines that service DIA may be affected by many factors including, without limitation: service and cost competition, mergers, the availability and cost of fuel and other necessary supplies, national and international disasters and hostilities, the cost and availability of employees, airline bankruptcies, strikes and other employee disruptions, the maintenance and replacement requirements of aircraft, the availability of routes and slots at various airports, litigation liability, regulation by the federal government, environmental risks and regulations, noise abatement concerns and regulation, the onset of war and the threat of renewed terrorist attacks since the events of September 11, 2001, federal and state bankruptcy and insolvency laws and other risks. Transportation Network and Potential Competition The Traffic and Revenue Consultant has assumed that in future years certain improvements that may be beneficial to vehicular use of the E-470 Toll Road will be made to the roadway network in eastern metropolitan Denver. See Appendix C "THE TOLL REVENUE STUDY." There can be no assurance, however, that any or all assumed improvements in future years will be funded and/or completed on schedule. Failure to complete any or all such improvements may result in a decline in Revenues. See Appendix C "THE TOLL REVENUE STUDY." Construction of competing transportation improvements may adversely impact vehicular use of and toll revenues for the E-470 Toll Road. At the November 2004 election, voters approved a sales tax increase to fund a 12-year comprehensive plan ("FasTracks") developed by the Regional Transportation District ("RTD") to improve the Denver metropolitan transportation system, including light rail, commuter rail and bus service. The Authority cannot predict what impact, if any, FasTracks may have on vehicular use of and toll revenues for the E-470 Toll Road. Operating Costs The costs of operating and maintaining the toll collection and revenue management system and other costs related to operation and maintenance of the E-470 Toll Road, payable under the terms of operation and maintenance contracts (See "THE E-470 TOLL ROAD Operation and Maintenance" and "Toll Collection System"), as well as the administrative expenses of the Authority, are included in Operating Expenses (as defined in the Resolutions). Operating Expenses are payable prior to the payment of debt service on the Senior Bonds, including the Series 2007 Bonds. There can be no assurance that there will be no unexpected or unexpectedly costly roadway maintenance requirements that exceed amounts available therefor in the Renewal and Replacement Fund or from other sources. The terms of the current operation and maintenance contracts with respect to the E-470 Toll Road are scheduled to expire over the next few years, long before the final maturity of the Series 2007 Bonds, and there can be no assurance that the contracts or any additional renewals thereof can be negotiated within the assumed costs reflected in the projections in this Official Statement. See "THE E-470 TOLL ROAD Operation and Maintenance." If the actual costs significantly exceed the costs assumed in the Traffic and Revenue Consultant s projections, the Authority may not have sufficient funds to pay all debt service requirements on the Series 2007 Bonds. Default and Remedies; No Acceleration The Resolutions do not provide for any acceleration of the Series 2007 Bonds if an Event of Default occurs. The rights of the holders of the Series 2007 Bonds and the enforceability of the Series - 8 -

14 2007 Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights. Enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity, and may be limited by the reasonable exercise of police powers of the State of Colorado and by restrictions on remedies against public entities. THE SERIES 2007 BONDS The following is a summary of certain provisions of the Series 2007 Bonds. This summary of the Series 2007 Bonds is not intended to be an exhaustive discussion of the Series 2007 Bonds and the Auction Procedures. Investors are advised that the Resolutions should be reviewed for the general terms of the Series 2007 Bonds. See "Appendix A SUMMARY OF RESOLUTIONS." "Appendix H AUCTION PROCEDURES" provides a more detailed description of the Auction Procedures. This summary of the Series 2007 Bonds applies to the Series 2007 Bonds only while they bear interest at Auction Rates. Holders and potential owners of the Series 2007 Bonds should not rely on this Official Statement for information concerning a change of the Series 2007 Bonds to any Interest Period other than the Auction Period, but should look solely to the Resolutions and the remarketing memorandum or remarketing circular to be issued in connection with any such Interest Period change. General The Series 2007 Bonds will initially be issued as Auction Rate Bonds. The Series 2007 Bonds will bear interest for initial interest rate periods commencing on their date of delivery to and including the initial Auction Dates (the "Initial Interest Rate Periods") as set forth on the inside cover page of this Official Statement. After such Initial Interest Rate Periods, the rates on the Series 2007 Bonds for each succeeding Auction Rate Period, subject to certain exceptions described below and in Appendix H, shall be equal to the Auction Rate that the Auction Agent advises has resulted on the Auction Date from the implementation of the Auction Procedures; provided, however, that such rate shall not exceed the Maximum Rate. The first Auction Date for the Series 2007A Bonds shall occur on June 25, 2007 and each subsequent Auction Date will be the Business Day next preceding the first day of each Auction Rate Period, the first Auction Date for the Series 2007B Bonds shall occur on July 10, 2007 and each subsequent Auction Date will be the Business Day next preceding the first day of each Auction Rate Period, the first Auction Date for the Series 2007C Bonds shall occur on June 21, 2007 and each subsequent Auction Date will be the Business Day next preceding the first day of each Auction Rate Period, and the first Auction Date for the Series 2007D Bonds shall occur on July 20, 2007 and each subsequent Auction Date will be the Business Day next preceding the first day of each Auction Rate Period. See Appendix H with respect to circumstances under which an Auction Date may not occur. Reference is made to Appendix H for a description of the Auction Procedures, the particulars of the determination of the Auction Rates, and the meanings of additional defined terms used herein. "Auction Period" means with respect to the Series 2007 Bonds: (a) Flexible Auction Period. A Flexible Auction Period, as such term is defined in Appendix H; (b) Daily Auction Period. With respect to the Series 2007 Bonds in a daily Auction Period, a period beginning on each Business Day and extending to but not including the next succeeding - 9 -

15 Business Day unless such Business Day is the second Business Day preceding the conversion from a daily Auction Period to another Auction Period, in which case the daily Auction Period shall extend to, but not include, the next Interest Payment Date; (c) Seven-day Auction Period. With respect to the Series 2007 Bonds in a seven-day Auction Period, if Auctions generally are conducted on the day of the week specified in column A of the table below, a period of generally seven days beginning on the day of the week specified in column B of the table below (or the day following the last day of the prior Auction Period if the prior Auction Period does not end on the day of the week specified in column C of the table below) and ending on the day of the week specified in column C of the table below in the next succeeding week (unless such day is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business Day): (A) (B) (C) Auction Period Generally Begins this day When Auctions Occur on this day Friday Monday Sunday Monday Tuesday Monday Tuesday Wednesday Tuesday Wednesday Thursday Wednesday Thursday Friday Thursday Auction Periods Generally End this day (d) 28-day Auction Period. With respect to the Series 2007 Bonds in a 28-day Auction Period, if Auctions generally are conducted on the day of the week specified in column A of the table above, a period of generally 28 days beginning on the day of the week specified in column B of the table above (or the day following the last day of the prior Auction Period if the prior Auction Period does not end on the day of the week specified in column C of the table above) and ending on the same day of the week specified in column C of the table above four weeks later (unless such day is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business Day); (e) 35-day Auction Period. With respect to the Series 2007 Bond in a 35-day Auction Period, if Auctions generally are conducted on the day of the week specified in column A of the table above, a period of generally 35 days beginning on the day of the week specified in column B of the table above (or the day following the last day of the prior Auction Period if the prior Auction Period does not end on the day of the week specified in column C of the table above) and ending on the day of the week specified in column C of the table above five weeks later (unless such day is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business Day); (f) Three-month Auction Period. With respect to the Series 2007 Bond in a three-month Auction Period, a period of generally three months (or shorter period upon a conversion from another Auction Period) beginning on the day following the last day of the prior Auction Period and ending on the calendar day immediately preceding the first Business Day of the month that is the third calendar month following the beginning date of such Auction Period; and (g) Six-month Auction Period. With respect to the Series 2007 Bond in a six-month Auction Period, a period of generally six months (or shorter period upon a conversion from another Auction Period) beginning on the day following the last day of the prior Auction Period and ending on the next succeeding date set forth in Schedule I to the Auction Procedures;

16 provided, however, that if there is a conversion of the Series 2007 Bond with Auctions generally conducted on the day of the week specified in column A of the table above, (i) from a daily Auction Period to a seven-day Auction Period, the next Auction Period shall begin on the date of the conversion (i.e. the Interest Payment Date for the prior Auction Period) and shall end on the next succeeding day of the week specified in column C of the table above (unless such day is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business Day), (ii) from a daily Auction Period to a 28-day Auction Period, the next Auction Period shall begin on the date of the conversion (i.e., the Interest Payment Date for the prior Auction Period) and shall end of the day of the week specified in column C of the table above (unless such day is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business Day) which is more than 21 days but not more than 28 days from such date of conversion, and (iii) from a daily Auction Period to a 35-day Auction Period, the next Auction Period shall begin on the date of the conversion (i.e. the Interest Payment Date for the prior Auction Period) and shall end on the day of the week specified in column C of the table above (unless such day is not followed by a Business Day, in which case on the next succeeding day which is followed by a Business Day) which is more than 28 days but no more than 35 days from such date of conversion. Notwithstanding the foregoing, if an Auction is for an Auction Period of more than seven days and the Auction Rate on such Auction Date is the Maximum Rate as the result of a lack of Sufficient Clearing Bids, the Auction Period shall automatically convert to a seven-day Auction Period. On the following Auction Date, the Auction shall be conducted for an Auction Period of the same length as the Auction Period prior to such automatic conversion. If such Auction is successful, the Auction Period shall revert to the length prior to the automatic conversion, and, if such Auction is not successful, the Auction Period shall remain as a seven-day Auction Period. The Series 2007 Bonds will be issued in denominations of $25,000 or any integral multiple thereof. Interest due on the Series 2007 Bonds will be initially payable on the dates described on the inside cover of this Official Statement and thereafter (each, an Interest Payment Date ): (a) when used with respect to any Auction Period other than a daily Auction Period or a Flexible Auction Period, the Business Day immediately following such Auction Period; (b) when used with respect to a daily Auction Period, the first Business Day of the month immediately succeeding such Auction Period; (c) when used with respect to a Flexible Auction Period of (i) seven or more but fewer than 183 days, the Business Day immediately following such Flexible Auction Period, or (ii) 183 or more days, each semiannual date on which interest on the Bonds would be payable if such Bonds bore interest at a fixed rate of interest and on the Business Day immediately following such Flexible Auction Period; and (d) the date when the final payment of principal of the Series 2007 Bonds of such Series becomes due and payable (whether at stated maturity, upon redemption or acceleration, or otherwise). "Auction Rate" means for each Auction Period, (i) if Sufficient Clearing Bids exist, the Winning Bid Rate, but if all of the Auction Rate Bonds are the subject of Submitted Hold Orders, the Minimum Auction Rate and (ii) if Sufficient Clearing Bids do not exist, the Maximum Rate. See Appendix H. Auction Agent. U.S. Bank National Association shall act as Auction Agent (the "Auction Agent") for the Series 2007 Bonds. The Authority shall enter into the Auction Agent Agreement with the Auction Agent and the Trustee, acting in its capacity as Trustee, pursuant to which, among other things, the Auction Agent will determine the Auction Rate for each Auction in accordance with the Auction Procedures

17 Broker-Dealer. Bear, Stearns & Co. Inc. and Morgan Stanley, shall act as Broker-Dealers (the "Broker-Dealers") with respect to the Series 2007 Bonds on the date of their delivery. The Auction Agent will enter into Broker-Dealer Agreements with the Broker-Dealers pursuant to which the Broker- Dealers shall act as the Broker-Dealers for the Series 2007 Bonds. The Broker-Dealers may be removed or replaced in accordance with the Broker-Dealer Agreements. Order by Existing Owners and Potential Owners. The procedure for submitting orders prior to the Submission Deadline on each Auction Date during an Auction Period is described in Article II of the Auction Procedures set forth in Appendix H. Changes in Auction Procedures, Auction Period or Auction Date. Changes in Auction Procedures. While any Series of Series 2007 Bonds are Auction Rate Bonds, the provisions of the Resolutions and the definitions contained therein, including without limitation the definitions of All Hold Rate, Index, Interest Payment Date, Maximum Rate, Auction Period Rate and Auction Rate, may be amended pursuant to the Resolutions by obtaining the consent of the owners of all affected Outstanding Series 2007 Bonds of such Series as follows. If on the first Auction Date occurring at least 20 days after the date on which the Trustee mailed notice of such proposed amendment to the registered owners of the affected Outstanding Series 2007 Bonds as required by the Resolutions, (a) the Auction Period Rate which is determined on such date is the Winning Bid Rate or the All Hold Rate and (b) there is delivered to the Authority, MBIA and the Trustee an opinion of Bond Counsel to the effect that such amendment shall not adversely affect the validity of the Series 2007 Bonds or any exemption from federal income taxation to which the interest on such Series 2007 Bonds would otherwise be entitled, the proposed amendment will be deemed to have been consented to by the registered owners of all affected Outstanding Series 2007 Bonds bearing interest at an Auction Period Rate; provided that MBIA shall be deemed to be the owner of all affected Outstanding Series 2007 Bonds bearing interest at the Auction Period Rate for the purpose of delivering such consent and, notwithstanding such clause (b) above in this paragraph, no consent shall be deemed given to any proposed amendment described by such clause (b) without the express prior written consent of MBIA. Changes in Auction Period. While any Series of Series 2007 Bonds are Auction Rate Bonds, the Authority may, from time to time on the Interest Payment Date immediately following the end of any Auction Period, change the length of the Auction Period with respect to a Series of Series 2007 Bonds among daily, seven-days, 28-days, 35-days, six months and a Flexible Auction Period in order to accommodate economic and financial factors that may affect or be relevant to the Auction Procedures or the length of the Auction Period and the interest rate borne by such Series 2007 Bonds. The Authority shall initiate the change by giving written notice to the Trustee, MBIA, the Auction Agent, the Broker-Dealers and DTC that the Auction Period shall change if the conditions described below are satisfied and the proposed effective date of the change, at least 10 Business Days prior to the Auction Date for such Auction Period. Any such changed Auction Period shall be for a period of one day, seven-days, 28-days, 35-days, three months, six months or a Flexible Auction Period and shall be for all of the Series 2007 Bonds of such Series. The change in length of the Auction Period shall take effect only if Sufficient Clearing Bids exist at the Auction on the Auction Date for such new Auction Period. For purposes of the Auction for such new Auction Period only, except to the extent any Existing Owner submits an Order with respect to such Bonds of any Series, each Existing Owner shall be deemed to have submitted Sell Orders with respect to all of its Series 2007 Bonds of such Series if the change is to a longer Auction Period and a Hold Order if

18 the change is to a shorter Auction Period. If there are not Sufficient Clearing Bids for the first Auction Period, the Auction Rate for the new Auction Period shall be the Maximum Rate, and the Auction Period shall be a seven-day Auction Period. Notwithstanding the foregoing, the Authority shall not change the length of the Auction Period with respect to any Series 2007 Bonds without the prior written consent of MBIA. Changes in Auction Date. While any Series of Series 2007 Bonds are Auction Rate Bonds, the Auction Agent, at the direction of the Authority, may specify an earlier or later Auction Date (but in no event more than five Business Days earlier or later) than the Auction Date that would otherwise be determined in accordance with the definition of Auction Date in order to conform with then current market practice with respect to similar securities or to accommodate economic and financial factors that may affect or be relevant to the day of the week constituting an Auction Date and the interest rate borne by the Series 2007 Bonds. The Auction Agent shall provide notice of the Authority s direction to specify an earlier Auction Date for an Auction Period by means of a written notice delivered at least 45 days prior to the proposed changed Auction Date to the Trustee, the Authority, MBIA and the Broker-Dealers, with a copy to DTC. In the event the Auction Agent is instructed to specify an earlier Auction Date, the days of the week on which an Auction Period begins and ends, the day of the week on which a Flexible Auction Period ends and the Interest Payment Date relating to a Flexible Auction Period shall be adjusted accordingly. Special Considerations Relating to the Series 2007 Bonds Bearing Interest at the Auction Rate Role of Broker-Dealer. Bear, Stearns & Co. Inc. and Morgan Stanley, as the Broker-Dealers, have each been appointed by the issuers or obligors of various auction rate securities to serve as a dealer in the auctions for those securities and is paid by the issuers or obligors for its services. The Broker- Dealers receive broker-dealers fees from such issuers and obligors at an agreed-upon annual rate that is applied to the principal amount of securities sold or successfully placed through the Broker-Dealers in Auctions. The Broker-Dealers are designated in the Broker-Dealer Agreements as the Broker-Dealers to contact Existing Owners and Potential Owners and solicit Bids for the Series 2007 Bonds. The Broker- Dealers will receive Broker-Dealer Fees from the Authority with respect to the Series 2007 Bonds sold or successfully placed through it in Auctions for the Series 2007 Bonds. Bidding by Broker-Dealer. Each Broker-Dealer is permitted, but not obligated, to submit Orders in Auctions for the Series 2007 Bonds for its own account either as a buyer or seller and routinely does so in the auction rate securities market in its sole discretion. If a Broker-Dealer submits an Order for its own account, it would have an advantage over other Bidders because the Broker-Dealer would have knowledge of the other Orders placed through it in that Auction for the Series 2007 Bonds and thus, could determine the rate and size of its Order so as to increase the likelihood that (i) its Order will be accepted in the Auction for the Series 2007 Bonds and (ii) the Auction for the Series 2007 Bonds will clear at a particular rate. For this reason, and because the Broker-Dealers are appointed and paid by the Authority to serve as Broker-Dealers in the Auctions for the Series 2007 Bonds, the Broker-Dealers interests in serving as the Broker-Dealers in an Auction for the Series 2007 Bonds may differ from those of Existing Owners and Potential Owners who participate in Auctions for the Series 2007 Bonds. See " Role of Broker-Dealer" above. The Broker-Dealers would not have knowledge of Orders submitted to the Auction Agent by any other firm that is, or may in the future be, appointed to accept Orders pursuant to the Broker-Dealer Agreements

19 The Broker-Dealers are the only Broker-Dealers in the Auctions for the Series 2007 Bonds, and, as long as that remains the case, they will be the only Broker-Dealers that submit Orders to the Auction Agent in the Auctions for the Series 2007 Bonds. As a result, in such circumstances, the Broker-Dealers may discern the clearing rate before the Orders are submitted to the Auction Agent and set the clearing rate with its Order. Each of the Broker-Dealers routinely places bids in auctions generally for its own account to acquire securities for its inventory, to prevent an "Auction failure" (which occurs if there are insufficient clearing bids and results in an auction rate being set at the maximum rate) or to prevent an auction from clearing at a rate that the Broker-Dealers believe does not reflect the market for such securities. The Broker-Dealers may place one or more Bids in an Auction for the Series 2007 Bonds for their own accounts to acquire the Series 2007 Bonds for their own inventory, to prevent an Auction failure or to prevent Auctions for the Series 2007 Bonds from clearing at a rate that the Broker-Dealers believe does not reflect the market for the Series 2007 Bonds. The Broker-Dealers may place such Bids even after obtaining knowledge of some or all of the other Orders submitted through them. When Bidding in an Auction for the Series 2007 Bonds for their own accounts, the Broker-Dealers also may Bid inside or outside the range of rates that they posts in their Price Talk. See " Price Talk. " Bids by the Broker-Dealers or those they may encourage to place Bids are likely to affect (i) the Auction Rate including preventing the Auction Rate from being set at the Maximum Rate or otherwise causing Bidders to receive a lower rate than they might have received had the Broker-Dealers not Bid or not encouraged others to Bid and (ii) the allocation of the Series 2007 Bonds being auctioned including displacing some Bidders who may have their Bids rejected or receive fewer Series 2007 Bonds than they would have received if the Broker-Dealers had not Bid or encouraged others to Bid. Because of these practices, the fact that an Auction clears successfully does not mean that an investment in the Series 2007 Bonds involves no significant liquidity or credit risk. The Broker-Dealers are not obligated to continue to place such Bids or to continue to encourage other Bidders to do so in any particular Auction to prevent an Auction failure or an Auction from clearing at a rate the Broker-Dealers believe does not reflect the market for the Series 2007 Bonds. Investors should not assume that the Broker-Dealers will place Bids or encourage others to do so or that Auction failures will not occur. Investors should also be aware that Bids by the Broker-Dealers or by those they may encourage to place Bids may cause lower Auction Rates to occur. The statements herein regarding Bidding by the Broker-Dealers apply only to the Broker-Dealers' auction desk and any other business units of the Broker-Dealers that are not separated from the auction desk by an information barrier designed to limit inappropriate dissemination of bidding information. Price Talk. Before the start of an Auction for the Series 2007 Bonds, the Broker-Dealers, in their discretion, may make available to its customers who are Existing Owners and Potential Owners each Broker-Dealer s good faith judgment of the range of likely clearing rates for the Auction for the Series 2007 Bonds based on market and other information. This is known generally as "Price Talk." Price Talk is not a guaranty that the Auction Rate established through the Auction for the Series 2007 Bonds will be within the Price Talk, and Existing Owners and Potential Owners are free to use it or ignore it. The Broker-Dealers occasionally may update and change the Price Talk based on changes in credit quality of the Bond Insurer or the Authority or macroeconomic factors that are likely to result in a change in interest rate levels, such as an announcement by the Federal Reserve Board of a change in the Federal Funds Rate or an announcement by the Bureau of Labor Statistics of unemployment numbers. Potential Owners should confirm with the Broker-Dealers the manner by which the Broker-Dealers will communicate Price Talk and any changes to Price Talk

20 All-or-Nothing Bids. The Broker-Dealers will not accept "all-or-nothing" Bids (i.e., Bids whereby the Bidder proposes to reject an allocation smaller than the entire quantity Bid) or any other type of Bid that allows the Bidder to avoid Auction Procedures that require the pro-rata allocation of Series 2007 Bonds where there are not sufficient Sell Orders to fill all Bids at the Winning Bid Rate. No Assurances Regarding Auction Outcomes. The Broker-Dealers provide no assurance as to the outcome of any Auction. The Broker-Dealers do not provide any assurance that any Bid will be successful, in whole or in part, or that the Auction for the Series 2007 Bonds will clear at a rate that a Bidder considers acceptable. Bids may be only partially filled, or not filled at all, and the Auction Rate on any Series 2007 Bonds purchased or retained in the Auction for the Series 2007 Bonds may be lower than the market rate for similar investments. The Broker-Dealers will not agree before an Auction to buy Series 2007 Bonds from or sell Series 2007 Bonds to a customer after the Auction. Deadlines. Each particular Auction for the Series 2007 Bonds has a formal deadline by which all Bids must be submitted by the Broker-Dealers to the Auction Agent. This deadline is called the "Submission Deadline." To provide sufficient time to process and submit customer Bids to the Auction Agent before the Submission Deadline, the Broker-Dealers impose an earlier deadline called the "Broker-Dealer Deadline" by which Bidders must submit Bids to the Broker-Dealers. The Broker- Dealer Deadline is subject to change by each Broker-Dealer by giving notice not less than two Business Days prior to the date such change is to take effect to Bidders who place Orders through such Broker- Dealer. Potential Owners should consult with each Broker-Dealer as to its Broker-Dealer Deadline. The Broker-Dealers may allow for correction of Clerical Errors after the Broker-Dealer Deadline and prior to the Submission Deadline. The Broker-Dealers may submit Bids for its own account at any time until the Submission Deadline. Bear, Stearns & Co. Inc. and Morgan Stanley each may submit Bids for its own account at any time until the Submission Deadline and may change Bids it has submitted for its own account at any time until the Submission Deadline. The Auction Procedures provide that until one hour after the Auction Agent completes the dissemination of the results of an Auction to the Broker-Dealers (as further defined in the Auction Procedures, the Error Correction Deadline ) a Broker-Dealer may: (a) submit to the Auction Agent an Order received prior to the Broker-Dealer Deadline (or, with respect to an Order generated by the Broker-Dealer for its own account, prior to the Submission Deadline) (provided that in each case the Broker-Dealer has a record of such Order and the time when such Order was received or generated), which Order was not submitted to the Auction Agent prior to the Submission Deadline as a result of (i) an event of force majeure or a technological failure which made delivery prior to the Submission Deadline impossible or, under the conditions then prevailing, impracticable or (ii) a Clerical Error on the part of the Broker-Dealer; or (b) modify or withdraw an Order received from an Existing Owner or Potential Owner or generated by the Broker-Dealer for its own account and submitted to the Auction Agent prior to the Submission Deadline or pursuant to clause (a) above, if the Broker-Dealer determines that such Order contained a Clerical Error on the part of the Broker-Dealer

21 In the event a Broker-Dealer makes a submission, modification or withdrawal as described in the preceding paragraph and the Auction Agent has already run the Auction, the Auction Agent is to rerun the Auction, taking into account such submission, modification or withdrawal. Each submission, modification or withdrawal of an Order so submitted by a Broker-Dealer after the Submission Deadline and prior to the Error Correction Deadline constitutes a representation by the Broker-Dealer that (i) in the case of a newly submitted Order or portion thereof or revised Order, the failure to submit such Order prior to the Submission Deadline resulted from an event described in clause (a) of the preceding paragraph and such Order was received by the applicable deadline or (ii) in the case of a modified or withdrawn Order, such Order was received by the applicable deadline and such Order as submitted to the Auction Agent contained a Clerical Error on the part of the Broker-Dealer and that such Order has been modified or withdrawn solely to effect a correction of such Clerical Error, and in the case of either (i) or (ii), as applicable, the Broker-Dealer has a record of such Order and the time when such Order was received or generated. The Auction Agent is entitled to rely conclusively (and shall have no liability for relying) on such representation for any and all purposes of the Auction Procedures. Existing Owner s Ability to Resell Series 2007 Bonds May Be Limited. An Existing Owner may sell, transfer or dispose of a Series 2007 Bond only pursuant to a Bid or Sell Order in accordance with the Auction Procedures or to or through the Broker-Dealers. Existing Owners will be able to sell all of the Series 2007 Bonds that are the subject of their Submitted Sell Orders only if there are Bidders willing to purchase all of those Series 2007 Bonds in the Auction. If Sufficient Clearing Bids have not been made, Existing Holders that have submitted Sell Orders will not be able to sell in the Auction all, and may not be able to sell any, of the Series 2007 Bonds subject to such Submitted Sell Orders. As discussed above (see " Bidding by Broker-Dealer"), the Broker-Dealers may submit a Bid in an Auction to avoid an Auction failure, but are not obligated to do so. There may not always be enough Bidders in an Auction to avoid an Auction failure in the absence of the Broker-Dealer bidding in the Auction for its own account or encouraging others to Bid. Therefore, Auction failures are possible, especially if the Bond Insurer s credit were to deteriorate, if a market disruption were to occur or if, for any reason, the Broker-Dealers were unable or unwilling to Bid. Between Auctions, there can be no assurance that a secondary market for the Series 2007 Bonds will develop or, if it does develop, that will provide Existing Owners the ability to resell the Series 2007 Bonds on the terms or at the times desired by an Existing Owner. The Broker-Dealers, in their own discretion, may decide to buy or sell the Series 2007 Bonds in the secondary market for their own accounts from or to investors at any time and at any price, including at prices equivalent to, below, or above par for the Series 2007 Bonds. However, the Broker-Dealers are not obligated to make a market in the Series 2007 Bonds and may discontinue trading in the Series 2007 Bonds without notice for any reason at any time. Existing Owners who resell between Auctions may receive an amount less than par, depending on market conditions. If an Existing Owner purchased a Series 2007 Bond through a dealer which is not the Broker- Dealers for the Series 2007 Bonds, such Existing Owner s ability to sell its Series 2007 Bonds may be affected by the continued ability of its dealer to transact trades for the Series 2007 Bonds through the Broker-Dealers. The ability to resell the Series 2007 Bonds will depend on various factors affecting the market for the Series 2007 Bonds, including financial information relating to the Authority or the Bond Insurer, the attractiveness of alternative investments, investor demand for short term securities, the perceived risk of owning the Series 2007 Bonds (whether related to credit, liquidity or any other risk), the tax or accounting treatment accorded the Series 2007 Bonds (including U.S. generally accepted accounting

22 principles as they apply to the accounting treatment of auction rate securities), reactions of market participants to regulatory actions (such as those described in " Securities and Exchange Commission Settlement" below) or press reports, financial reporting cycles and market conditions generally. Demand for the Series 2007 Bonds may change without warning, and declines in demand may be short-lived or continue for longer periods. Resignation of the Auction Agent or the Broker-Dealers Could Impact the Ability to Hold Auctions. The Auction Agent Agreement provides that the Auction Agent may resign from its duties as Auction Agent by giving at least 45 days notice to the Authority, the Bond Insurer, and the Trustee. The Broker-Dealer Agreements provide that the Broker-Dealers under such Broker-Dealer Agreements may resign upon at least 12 days notice and that, under certain circumstances, the Broker-Dealers may resign immediately. For any Auction Period during which there is no duly appointed Auction Agent, or during which there is no duly appointed Broker-Dealer, it will not be possible to hold Auctions, with the result that the interest rate on the Series 2007 Bonds will be the Maximum Rate. Securities and Exchange Commission Settlement. On May 31, 2006, the U.S. Securities and Exchange Commission (the "SEC") announced that it had settled its investigation of fifteen firms, including Bear, Stearns & Co. Inc. and Morgan Stanley, that participate in the auction rate securities market regarding their respective practices and procedures in this market. The SEC alleged in the settlement that the firms had managed auctions for auction rate securities in which they participated in ways that were not adequately disclosed or that did not conform to disclosed auction procedures. As part of the settlement, the Broker-Dealers agreed to pay a civil penalty. In addition, the Broker-Dealers, without admitting or denying the SEC s allegations, agreed to provide to customers written descriptions of its material auction practices and procedures, and to implement procedures reasonably designed to detect and prevent any failures by the Broker-Dealers to conduct the auction process in accordance with disclosed procedures. The Broker-Dealers can offer no assurance as to how the SEC settlement may affect the market for the Series 2007 Bonds. Conversion to Another Interest Mode Subject to certain conditions, the method for determining the interest rate on the Series 2007 Bonds may be converted by the Authority, from time to time, to a Daily Rate, Weekly Rate, a Term Rate or a Fixed Rate. See "Appendix H." The Authority shall give written notice of such conversion (the "Mode Conversion Notice") to the Trustee, the Remarketing Agent, if any, the Bond Insurer, the Auction Agent and the Broker-Dealers, at least 7 Business Days prior to the date that the Trustee is required to mail to Owners of the Series 2007 Bonds a notice relating such Interest Mode conversion. Such notice shall specify the Conversion Date, which shall be the Interest Payment Date following the final Auction Rate Period and shall be at least 20 days after the date on which such notice is given to Owners of the Series 2007 Bonds. It is currently anticipated that, should any of the Series 2007 Bonds be converted to bear interest in a Daily Mode, Weekly Mode, Term Mode, or Fixed Mode, a remarketing memorandum or remarketing circular will be distributed describing the Series 2007 Bonds during such Interest Mode. Registration, Payment, Transfer, and Exchange; Book Entry Form Registration and Payment. The Authority, the Bond Insurer, the Trustee, the Paying Agent, and any other Fiduciary may deem and treat the person in whose name any Series 2007 Bond shall be registered in the Register as the absolute Owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption

23 Price and interest on such Bond and for all other purposes, and all such payments so made to any such Owner or upon the Owner's order shall be valid and effectual to satisfy and discharge the liability upon such Series 2007 Bond to the extent of the sum or sums so paid, and the Authority, the Bond Insurer, the Trustee, the Paying Agent, and any other Fiduciary shall not be affected by any notice to the contrary. Transfer and Exchange. The Registrar shall keep, or cause to be kept, on behalf of the Authority at the principal operations center of the Registrar or such other location or locations as shall be provided in any Supplemental Resolution, the Register, in which, subject to such reasonable regulations as the Authority, the Trustee, and the Registrar may prescribe, the Registrar will cause the Series 2007 Bonds to be registered and will transfer Bonds as provided in the Resolutions. The Series 2007 Bonds are transferable only upon the Register, by the Owner of such Series 2007 Bonds in person or by the Owner's attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the Owner or the Owner's duly authorized attorney. Upon the transfer of any Series 2007 Bond and payment of any required fees, the Registrar shall issue in the name of the transferee a new fully registered Series 2007 Bond or Bonds of the same Series, aggregate principal amount and maturity as the surrendered Series 2007 Bonds. For every transfer of Series 2007 Bonds, the Authority, the Trustee, the Registrar, and any Authenticating Agent may make a charge sufficient to reimburse it or them for any expense, tax, fee or other governmental charge required to be paid with respect to such transfer. In addition, for every exchange of Series 2007 Bonds, the Authority, the Trustee, the Registrar, and any Authenticating Agent may make reasonable charges to cover the costs of printing Series 2007 Bonds, including any Trustee's, Registrar's, or Authenticating Agent's charges in connection therewith. The payment of such sum or sums shall be made by the Owner requesting the transfer or exchange as a condition precedent to the exercise of the privilege of making such exchange or transfer. The Registrar shall not, other than as provided in the Resolutions, be required to transfer or exchange Series 2007 Bonds for a period of 15 days next preceding the selection of Series 2007 Bonds for redemption or to transfer or exchange any Series 2007 Bonds called for redemption. DTC and the Book-Entry System. The Series 2007 Bonds will be issued initially in "book-entry" form only, as described in Appendix G "BOOK-ENTRY ONLY SYSTEM," and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"). DTC will act as securities depository for the Series 2007 Bonds. Unless the book-entry system for the Series 2007 Bonds is discontinued, prospective purchasers will acquire beneficial ownership interests in the Series 2007 Bonds, in authorized denominations, but will not receive Series 2007 Bond certificates representing such ownership interests. So long as Cede & Co. is the registered owner of the Series 2007 Bonds, payments of principal and interest on the Series 2007 Bonds will be made directly to DTC by the Trustee on behalf of the Authority, and DTC will, in turn, remit such payments to DTC Participants for subsequent disbursement to the beneficial owners of the Series 2007 Bonds. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the beneficial owners is the responsibility of DTC's Direct Participants and Indirect Participants, as more fully described in Appendix G "BOOK-ENTRY ONLY SYSTEM." Redemption of the Series 2007 Bonds Optional Redemption. While the Series 2007 Bonds bear interest at an Auction Rate, such Series 2007 Bonds are subject to redemption prior to maturity at the option of the Authority on the Interest Payment Date immediately following the end of an Auction Period at a redemption price equal to the principal amount thereof plus any interest accrued and unpaid thereon; provided that after any such optional redemption there shall be not less than $10,000,000 in aggregate principal amount of any Series

24 2007 Bonds unless otherwise consented to by the Broker-Dealers; and provided further that any such optional redemption shall be in Authorized Denominations or any integral multiple thereof. Mandatory Sinking Fund Redemption. The Series 2007 Bonds are subject to mandatory sinking fund redemption, at a redemption price equal to the principal amount of such Series 2007 Bonds redeemed, together with accrued interest thereon to the Redemption Date, pursuant to the Sinking Fund Installments on September 1, in each of the years and principal amounts specified below; provided, however, with respect to the Series 2007 Bonds bearing interest at an Auction Rate, such Series 2007 Bonds will be redeemed on the Interest Payment Date immediately preceding the scheduled sinking fund redemption date (other than Series 2007 Bonds having a Flexible Auction Period, which may be redeemed on such scheduled sinking fund redemption date), except that the Sinking Fund Installments of Series 2007 Bonds will be reduced in chronological order by the principal amount of any Series 2007 Bonds of the same Series and maturity that were redeemed pursuant to any other optional or mandatory redemption provision or were purchased by the Authority and delivered to the Trustee for cancellation on or before the date on which notice of the redemption of the Series 2007 Bonds subject to any such Sinking Fund Installment is given by the Trustee. Series 2007A Bonds * Final Maturity Principal Year Amount 2007 $300, , , ,000, ,450, , , , ,575, ,000, ,825, ,025, ,275, ,475, ,325, ,125, ,900, ,625, ,400, ,750, ,250, ,675, * 11,125,

25 Series 2007B Bonds * Final Maturity Principal Year Amount 2007 $300, , , ,000, ,450, , , , ,575, ,000, ,825, ,025, ,275, ,475, ,325, ,125, ,900, ,625, ,400, ,750, ,250, ,675, * 11,125,000 Series 2007C Bonds Principal Year Amount 2007 $300, , , ,000, ,450, , , , ,575, ,000, ,825, ,025, ,275, ,475, ,325, ,125,

26 * Final Maturity ,900, ,625, ,400, ,750, ,250, ,675, * 11,125,000 Series 2007D Bonds * Final Maturity Principal Year Amount 2007 $330, , , ,025, ,475, , , , ,580, ,000, ,795, ,060, ,285, ,465, ,320, ,090, ,915, ,600, ,385, ,745, ,270, ,680, * 11,085,000 Selection of Series 2007 Bonds to be Redeemed The Authority will determine the portion of any redemption to be made from each maturity of the Series 2007 Bonds; provided, however, that if less than all Series 2007 Bonds of a particular maturity are to be redeemed, the particular Series 2007 Bonds of such maturity to be redeemed will be chosen by the Trustee as herein described. In particular, if less than all the Series 2007 Bonds of a particular maturity will be called for redemption, the particular Series 2007 Bonds or portions of Series 2007 Bonds to be redeemed will be selected by lot or other random method by the Trustee in such manner as provided by the Resolutions; provided, however, that the portion of any Series 2007 Bonds to be redeemed will be in authorized denominations and that, in selecting Series 2007 Bonds for

27 redemption, the Trustee will treat each Series 2007 Bond as representing that number of Series 2007 Bonds as is obtained by dividing the principal amount of such Series 2007 Bond by the minimum authorized denomination for such Series 2007 Bonds. Notice of Redemption When the Trustee shall receive notice from the Authority of its election or direction to redeem Series 2007 Bonds the Trustee shall give notice, in the name of the Authority, of the redemption of such Series 2007 Bonds, which notice shall specify the Series and maturity or maturities of the Series 2007 Bonds to be redeemed, the Redemption Date, and the place or places where amounts due upon such Redemption Date will be payable and, if less than all the Series 2007 Bonds of any like Series and maturity are to be redeemed, the letters and numbers or other distinguishing marks of the Series 2007 Bonds so to be redeemed, and in the case of Series 2007 Bonds to be redeemed in part only, such notices shall also specify the respective portions thereof to be redeemed. Such notice shall further state that on such Redemption Date there shall become due and payable upon each Series 2007 Bond to be redeemed the Redemption Price thereof (or the Redemption Price of the specified portions thereof, in the case of Series 2007 Bonds to be redeemed in part only), together with interest accrued to the Redemption Date, as applicable, and that from and after such date interest thereon shall cease to accrue and be payable. The Trustee shall mail a copy of such notice, first class mail postage prepaid, not less than 30 nor more than 60 days before the Redemption Date, to the Owners of any Series 2007 Bonds or portions of Series 2007 Bonds which are to be redeemed, at their last addresses, if any, appearing upon the Register. The Trustee's obligation to give notice as described herein shall not be conditioned upon the prior payment to the Trustee of funds sufficient to pay the Redemption Price of the Series 2007 Bonds to which such notice relates or interest thereon to the Redemption Date and may be given in conditional form, specifying that the redemption is subject to receipt by the Trustee of moneys sufficient to pay the Redemption Price of and accrued interest on the Series 2007 Bonds to be redeemed or to other conditions. The failure to give notice as described herein to any Owner of any Series 2007 Bond or portion thereof to be redeemed shall not affect the validity of any proceedings for the redemption of any other Series 2007 Bond for which such notice has been duly given. If any Series 2007 Bonds that are Auction Rate Bonds are to be redeemed in part and such Bonds are held by a Securities Depository, the Authority shall include the notice of the call for redemption delivered to the Securities Depository (i) a date placed under an item entitled "Publication Date for Securities Depository Purposes" and such date shall be three Business Days after the Auction Date immediately preceding such Redemption Date (in the case of a daily Auction Period, such date shall be three Business Days immediately preceding the date of redemption) and (ii) an instruction to the Securities Depository to (x) determine on such Publication Date after the Auction held on the immediately preceding Auction Date has settled, the Securities Depository Participants whose Securities Depository position shall be redeemed and the principal amount of such Auction Rate Bonds to be redeemed from each such position (the "Securities Depository Redemption Information"), and (y) notify the Trustee immediately after such determination of (1) the position of the Securities Depository Participants in such Bonds immediately prior to such Auction settlement, (2) the position of the Securities Depository Participants in such Auction Rate Bonds immediately following such Auction settlement, and (3) the Securities Depository Redemption Information. Immediately upon receipt of the notice referred to in (y) of the preceding sentence, the Trustee shall send a copy of such notice to the Auction Agent

28 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS Series 2007 Bonds and Other Senior Bonds The Series 2007 Bonds are special, limited obligations of the Authority, payable solely from and secured by a lien on the Trust Estate, to the extent provided in the Resolutions. For a description of the security for the Series 2007 Bonds, see "SUMMARY OF THE RESOLUTIONS Security for the Bonds and Parity Obligations," " Flow of Funds" and "- Other Transfers to Debt Service Fund" in Appendix A hereto. See also "Pledge of Trust Estate" under this caption. The Series 2007 Bonds are issued on a parity with the Series 1997A Bonds, Series 1997B Bonds, Series 1997C Bonds, Series 2000B Bonds, Series 2004A Bonds, Series 2004B Bonds, Series 2004C Bonds, Series 2006A Bonds, and Series 2006B Bonds to be Outstanding after the issuance of the Series 2007 Bonds. The Trust Estate consists principally of Revenues and certain other moneys on deposit under the Resolutions. The Vehicle Registration Fees, which constitute a portion of the Revenues, are subject to a first lien for the Vehicle Registration Fee Bonds, as described herein. See "SUMMARY OF THE RESOLUTIONS Security for the Bonds and Parity Obligations" in Appendix A hereto. Payment of the Series 2007 Bonds and the other Senior Bonds is secured by a pledge of the Trust Estate to the extent provided in the Resolutions, which pledge is prior to the pledge of the Trust Estate to payment of any Subordinate Bonds that may hereafter be issued in accordance with the Resolutions. The Trust Estate includes amounts on deposit in various Funds and Accounts established under the Resolutions, including, without limitations, the Senior Bonds Debt Service Reserve Account. See "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto and "Other Transfers to Debt Service Fund" under this caption. The Senior Bonds Debt Service Reserve Account will be fully funded at the time of issuance of the Series 2007 Bonds in the required amount (the "Senior Bonds Debt Service Reserve Account Requirement"). In the event of any withdrawal from or other deficiency in amounts on deposit in the Senior Bonds Debt Service Reserve Account, the amount on deposit in the Senior Bonds Debt Service Reserve Account will be restored to the Senior Bonds Debt Service Reserve Account Requirement from the Revenue Fund subsequent to the payment of debt service on the Vehicle Registration Fee Bonds, restoration of the Vehicle Registration Fee Bonds Debt Service Requirement, Operating Expenses, debt service on the Senior Bonds and any required deposit to the Rebate Fund. See "SUMMARY OF THE RESOLUTIONS Flow of Funds" and " Debt Service Fund" in Appendix A hereto. See also "Senior Bonds Debt Service Reserve Account" and "Flow of Funds" under this caption. The Series 2007 Bonds shall not constitute or be construed to be a debt or multiple fiscal year direct or indirect debt or other financial obligation, or a pledge of the taxing power, faith, or credit of the State or any political subdivision (other than the Authority, to the extent provided in the Resolutions). The Authority has no taxing powers

29 Pledge of Trust Estate General. The Trust Estate established under the Resolutions includes, generally, all Revenues (as described below), all amounts deposited in the Revenue Fund, the Debt Service Fund (including the Accounts created therein with respect to the Senior Bonds, the Vehicle Registration Fee Bonds, and the First Tier Subordinate Bonds, if any) and the Debt Service Reserve Fund (including the Accounts created therein with respect to the Senior Bonds, the Vehicle Registration Fee Bonds, and the First Tier Subordinate Bonds, if any), and the other Funds and Accounts described below under this caption, all of which Funds and Accounts are created under the Resolutions. The Resolutions provide that Revenues (other than Vehicle Registration Fees, which are to be applied first to pay principal of and interest on the Vehicle Registration Fee Bonds and to restore amounts on deposit in the Vehicle Registration Fee Bonds Debt Service Reserve Account) are to be applied first to pay the Operating Expenses and then to pay the Senior Bonds. See "SUMMARY OF THE RESOLUTIONS Security for the Bonds and Parity Obligations" in Appendix A hereto for a more complete description of the pledge of the Trust Estate. See also "SUMMARY OF THE RESOLUTIONS Flow of Funds" and " Other Transfers to Debt Service Fund" in Appendix A hereto and "Flow of Funds" under this caption. Revenues. The principal component of the Trust Estate consists of the Revenues. The term "Revenues" means all amounts received by the Authority from (i) fees, tolls, rates and charges for the privilege of traveling on the E-470 Toll Road imposed by the Authority pursuant to the Public Highway Act ("Toll Revenues"); (ii) highway expansion fees imposed by the Authority pursuant to the Public Highway Act, but only to the extent such highway expansion fees are received with respect to property located within the boundaries of the Authority; (iii) Vehicle Registration Fees imposed by the Authority pursuant to the Public Highway Act (subject to the prior lien on such amounts for the payment of the Vehicle Registration Fee Bonds and restoration of amounts on deposit in the Vehicle Registration Fee Bonds Debt Service Reserve Account, and subject to the exclusion of such Vehicle Registration Fees from Revenues upon the occurrence of certain events as described in the next succeeding paragraph); (iv) proceeds of special assessments paid by owners of property included within local improvement districts established by the Authority pursuant to the Public Highway Act, but only to the extent such special assessments are received in connection with property located within the boundaries of the Authority; (v) increments in property or sales taxes received pursuant to the value capture provisions of the Public Highway Act, but only to the extent such taxes are received in connection with property located or taxable transactions occurring within the boundaries of the Authority; (vi) proceeds from insurance, condemnation awards and liquidated damages under contracts, in each case, to the extent they relate to the E-470 Toll Road; (vii) amounts derived from time to time from the Member Governments or otherwise in accordance with the Establishing Contract; (viii) all amounts derived from the sale or other disposition of land (or any interest therein) or other property included in the E-470 Toll Road; (ix) amounts derived as grants, loans or otherwise from the United States of America, the State, or any other person (which may be available for, and which the Authority determines to, deposit in the Revenue Fund); (x) all investment earnings that are transferred to or deposited into the Revenue Fund; (xi) all moneys released from another Fund or Account and transferred to the Revenue Fund as provided in the Resolutions; (xii) any net amounts of Regularly Scheduled Swap Payments received by the Authority; and (xiii) all other amounts derived from or in respect of the ownership or operation of the E-470 Toll Road which constitute revenues in accordance with Generally Accepted Accounting Principles, including, without limitation, tolls and any interest income earned on any Funds and Accounts which is required to be transferred to or maintained in any Fund, Account, or Subaccount under the Resolutions; provided, however, that revenues from Special Projects shall not be included in Revenues. See "SUMMARY OF THE RESOLUTIONS Definitions" in Appendix A hereto, for a more complete definition of "Revenues," and "Investment of Funds" under this caption. See also "Toll Revenues," "Vehicle Registration Fees," "Other Revenues," and "Special Project Bonds" under this caption

30 The Resolutions provide that Vehicle Registration Fees will be excluded from Revenues when both (i) no Vehicle Registration Fee Bonds are Outstanding and (ii) Net Revenues (defined as Revenues minus Operating Expenses) minus Vehicle Registration Fees during the preceding 12-month period equal or exceed 130% of the Debt Service on all Bonds and Parity Obligations during such 12-month period, as provided in the Resolutions. The Authority has indicated its intent to discontinue collection of Vehicle Registration Fees once Vehicle Registration Fees can be excluded from Revenues (as shown in the Authority's annual audited financial statements or an audit of such other 12-month period). Operating Expenses. In determining the amounts available to pay the Senior Bonds, including the Series 2007 Bonds, and any Subordinate Bonds, the Resolutions require the payment of Operating Expenses from available Revenues as a first priority. The term "Operating Expenses" means expenses for operation, maintenance, repairs, ordinary replacement, and ordinary reconstruction of the E-470 Toll Road, ordinary acquisition of equipment, and any other current expenses or obligations required to be paid by the Authority, the Member Governments, or any other Person, under or pursuant to the provisions of the Resolutions, the Establishing Contract (as defined in the Resolutions), or any other agreement between or among the Authority and any other person or persons, or by law, all to the extent properly and directly attributable to the operation of the E-470 Toll Road, but not any costs or expenses for new construction or any allowance for depreciation and not any payments or expenses relating to Related Financial Transactions. Operating Expenses may include, without limitation, but subject to the preceding sentence, including the condition that such expenses are properly and directly attributable to the operation of the E-470 Toll Road: (i) salaries, supplies, utilities, labor, and rent; (ii) fees and expenses for data processing, policing, insurance, legal, accounting, engineering, Fiduciaries, letters of credit and Credit Facilities, consulting and banking services, and certain financial transactions specified in the Resolutions; (iii) Costs of Issuance not paid as a Cost of the Project (as defined in the Resolutions); (iv) payments to pension, retirement, health and hospitalization funds for Authority employees; and (v) all obligations of the Authority as of the date of issuance of the Series 1997 Bonds that are classified as long-term debt in the Authority's audited financial statements for the fiscal year ended December 31, 1996 (no such obligations are currently outstanding). Such expenses do not include (i) costs of collection of Vehicle Registration Fees retained by any county or other person that collects Vehicle Registration Fees on behalf of the Authority, and (ii) any amounts payable pursuant to a judgment, court order or settlement of any legal proceeding. For further information regarding anticipated Operating Expenses, see the definition of "Operating Expenses" in "SUMMARY OF THE RESOLUTIONS Definitions" in Appendix A hereto and "THE REFINANCING PLAN" herein. Toll Revenues General. Highway tolls are the predominant source of revenue available to pay debt service on the Senior Bonds. The Authority's 2007 budget contemplates that 83.1% of its revenues will be derived from toll collections. The Authority currently anticipates that vehicle tolls and toll rate increases will be implemented as set forth below in its approved schedule. The Authority's Board, however, has the authority to alter the toll rate schedule in the future and may do so if necessary to comply with the Authority's revenue covenants. Revenue Covenant. Pursuant to the Resolutions, the Authority has covenanted that it will fix, charge, and collect pursuant to the Public Highway Act, the Establishing Contract, or otherwise such fees, assessments, tolls, or other charges in respect of the E-470 Toll Road as shall be required to produce Revenues which shall equal at least 1.30 times the Aggregate Debt Service due in such Fiscal

31 Year, after provision for the payment of Operating Expenses and any transfers of Revenues to any other Fund or Account required under the Resolutions or under the documents securing any Parity Obligations. Under the Public Highway Act, the Authority has the power to increase fees, tolls, rates, and charges for the privilege of traveling on the highway without voter approval and without supervision or regulation by any other board, agency, bureau, commission, or official. For purposes of this covenant, Revenues and Aggregate Debt Service in each Fiscal Year shall be reduced by the Aggregate Debt Service due in such Fiscal Year on Vehicle Registration Fee Bonds. Before the beginning of each such Fiscal Year, the Authority is required to review the financial status of the E-470 Toll Road in order to estimate and determine whether Revenues for the current Fiscal Year and for the following Fiscal Year will be sufficient to comply with the covenant described above. In connection with the preparation of the annual budget for each Fiscal Year, the Authority is required to prepare and file with the Trustee and the Bond Insurer a copy of its estimate of Revenues, Operating Expenses, Debt Service on the Outstanding Bonds, and any transfers of Revenues required to be made to any other Fund or Account under the Resolutions or under the documents securing Parity Obligations, together with a statement of the pertinent estimates and assumptions. If the Authority in adopting any annual budget determines that Revenues may be inadequate to meet such covenant, or if the audited financial reports regarding the E-470 Toll Road prepared by the Authority show that the Authority did not satisfy such covenant for the prior Fiscal Year, the Authority is required to engage a Toll Road Consultant within 60 days of such determinations or the date such audit is final, subject to the rights of the Bond Insurer to approve and/or nominate a Toll Road Consultant for such purpose as provided in the Resolutions. Such Toll Road Consultant is required to conduct a study and, within 60 days of such engagement, recommend such actions as will provide sufficient Revenues in the following Fiscal Year to comply with the covenant described above and that will provide additional Revenues in such following Fiscal Year and later years to eliminate any deficiency at the earliest practicable time. A copy of such study and recommendations must be filed with the Trustee and the Bond Insurer. The Authority is required to take such recommended action no later than 60 days after the receipt of such recommendations from the Toll Road Consultant. Except as set forth below, failure to comply with the revenue covenant described above will not constitute an "Event of Default" under the Resolutions if either (i) the Authority complies with the requirements described in the immediately preceding paragraph or (ii) the Toll Road Consultant provides a written opinion to the Trustee and the Bond Insurer that any action which will comply with such requirements is impracticable at that time. For purposes of the preceding sentence, "impracticable" means (A) such action would not result in compliance with the revenue covenant described above, (B) the economic cost of taking such action exceeds the economic benefit resulting from such action, or (C) the Authority does not have sufficient available funds to pay the cost of taking such action. Notwithstanding the foregoing, if the failure to comply with the revenue covenant described above continues for a period of 36 consecutive months, such failure will constitute an Event of Default under the Resolutions regardless of whether an event described in clause (i) or (ii) of the first sentence of this paragraph has occurred. Historical Toll Revenues. The following table sets forth the Authority's historical toll revenues for fiscal years 2000 through 2006:

32 Year Historical Toll Revenues Toll Revenue 2000 $23,229, ,855, ,108, ,894, ,584, ,788, ,121,077 Gross toll revenues for 2007 (through May 13, 2007) were approximately $31,591,000. Toll Schedule. The following table sets forth the tolls currently in effect for two-axle vehicles using the E-470 Toll Road. In June 1995, the Board adopted a schedule for future toll rate increases, which schedule was modified by the Authority in 2005 based upon recommendations of the Traffic and Revenue Consultant. The modified schedule is set forth below. The schedule is subject to adjustment by the Authority to meet revenue needs, and no assurance can be given that the scheduled toll rate increases will be imposed in the amounts and at the times shown. [Remainder of page intentionally left blank]

33 Scheduled Passenger Car Toll Rate Increases (1) Interchange No. Location Type (direction to/from) I-25 No Toll Jamaica No Toll Peoria Toll (South) $0.75 $0.75 $0.75 $0.75 $1.00 $1.00 Barrier A Mainline Toll Potomac/Chambers Toll (North) Jordan Toll (North) Parker No Toll A Gartrell Toll (South) Smoky Hill Toll (South) Quincy Toll (South) Barrier B Mainline Toll Jewell Toll (North) Sixth Avenue Toll (North) I-70 No Toll Barrier C Mainline Toll th Avenue Toll (North) th Avenue Toll (North) th Avenue Toll (North) Pena Boulevard No Toll th Avenue Toll (South) Barrier D Mainline Toll th Avenue Toll (North) th Avenue Toll (North) th Avenue Toll (North) I-76 No Toll US85 Toll (South) Barrier E Mainline Toll Quebec Toll (North) Colorado Toll (North) York Toll (North) I-25 No Toll (1) Toll increases are assumed to occur on January 1st. Rates for commercial vehicles and other vehicle classes are based on the number of axles and are a multiple of the rate for passenger cars (or two-axle vehicles). Vehicle Registration Fees The Authority has agreed to deposit into the Revenue Fund all Vehicle Registration Fee receipts. The Authority's 2007 budget contemplates that 7.5% of its revenues will be derived from such Vehicle Registration Fees. As noted above, the Vehicle Registration Fees are subject to the prior lien for the payment of the Vehicle Registration Fee Bonds and to restore any deficiencies in the Vehicle Registration Fee Bonds Debt Service Account, and are to be excluded from Revenues in certain circumstances as described in "Pledge of Trust Estate" under this caption. Although a Debt Service Reserve Account is permitted with respect to future Vehicle Registration Fee Bonds issued by the Authority, the

34 Authority did not establish a Debt Service Reserve Account for its outstanding Vehicle Registration Fee Bonds. The Authority does not currently expect to issue any future Vehicle Registration Fee Bonds. The Authority has responsibility for collecting the Vehicle Registration Fees as long as any Vehicle Registration Fee Bonds remain outstanding (but Vehicle Registration Fees may be excluded from Revenues, and collection of Vehicle Registration Fees may be discontinued, when no Vehicle Registration Fee Bonds are outstanding under the conditions described above in "Pledge of Trust Estate - Revenues" under this caption). The Authority has indicated its intent to discontinue collection of Vehicle Registration Fees once Vehicle Registration Fees can be excluded from Revenues (as shown in the Authority's annual audited financial statements or an audit of such other 12-month period). The Vehicle Registration Fees constitute the first revenue source implemented by the Authority. The Authority began to assess and collect the $10 per vehicle motor vehicle registration fee applicable to all vehicles owned by residents within the Voting Boundaries of the Authority in January See "THE AUTHORITY Powers of the Authority." The Authority entered into contracts with the county clerks of each of Arapahoe County, Adams County, and Douglas County, pursuant to which the county clerks are collecting the Authority's Vehicle Registration Fees and remitting the receipts thereof to the Authority on a monthly basis. These agreements, which are in effect by their terms as long as the Authority imposes the Vehicle Registration Fees, provide that the fees are to be remitted to the Authority within 16 days of the last day of the month in which the fees are received by the county clerks. Under these agreements, the county clerks are entitled to retain a fee of 5% of the fees collected each month to offset administration costs. The Authority has agreed that, as long as any Vehicle Registration Fee Bonds are Outstanding, the Authority will continue to impose the Vehicle Registration Fees without regard to the continuation of a statewide motor vehicle registration fee or the manner of its collection. The Authority deposits all Vehicle Registration Fee receipts in the Revenue Fund established under the Resolutions as received. The Authority has established a debt management plan which calls for an early redemption of the Vehicle Registration Fee Bonds as moneys are available for such purposes; however, there is no guarantee that this early redemption will occur. The table below shows actual gross fee receipts, collection costs, debt service on Vehicle Registration Fee Bonds, and net receipts available to pay operating expenses each year: [Remainder of page intentionally left blank]

35 Vehicle Registration Fee Revenues Year Gross Registration Fee Receipts Collection Costs Available for Debt Net Debt Service on Service on Vehicle Vehicle Registration Registration Fee Bonds Fee Bonds (1) Deposit to Revenue Fund 2001 $7,331,050 $366,553 $6,964,497 $2,093,264 $4,871, ,490, ,541 7,116,212 2,868,629 4,247, ,591, ,550 7,211,450 2,872,040 4,339, ,811, ,300 7,419,320 2,404,272 5,015, ,051, ,561 7,648,659 2,873,000 4,775, ,192, ,649 7,783,331 4,894,200 2,889, (2) 8,541, ,075 8,114,425 4,895,700 3,218,725 (1) Scheduled debt service on Vehicle Registration Fee Bonds based on synthetic fixed rate of 4.11% based on the interest rate swap executed with respect to the Vehicle Registration Fee Bonds in May, Amounts include liquidity and remarketing fees but not potential receipts and payments under associated interest rate swap agreement. See the Authority s financial statements for the fiscal years ended December 31, 2006 and 2005, which are included in Appendix B hereto. (2) Budgeted. Source: E-470 Public Highway Authority Other Revenues Sources of other Authority revenues include highway expansion fees, permit fees, cellular tower leases, and Northwest Parkway and Colorado Tolling Enterprise transaction fees. Such other revenues account for approximately 1.2% of budgeted revenues in In particular, the Authority assesses and collects highway expansion fees from landowners, the development of whose land is expected to impact the E-470 Toll Road. Highway expansion fees during 2006 totaled approximately $653,492. The Authority collects various permit fees for access and use of the Authority's right-of way and multi-use easement that parallels the E-470 Toll Road corridor. The Authority received $16,600 in permit fees in The Authority has allowed the placement of ten cellular towers in its right-of-way that parallels the E-470 Toll Road corridor under lease agreements with cellular carriers. The Authority received approximately $192,740 in cellular tower lease payments in The Authority also has entered into intergovernmental agreements with the Northwest Parkway Public Highway Authority ("NPPHA") and the Colorado Tolling Enterprise to process electronic toll collections through the joint and cooperative use of part of the E-470 EXpressToll AVI System. In April, 2007, NPPHA selected Brisa/CCR Brisa Auto-Estradas de Portugal SA/Companhia de Concessoes Rodoviarias ("Brisa") to enter into a long-term operation and management agreement with NPPHA in which Brisa would operate the Northwest Parkway toll road. The Authority is uncertain as of the date of this Official Statement as to the impact, if any, such public private arrangement will have on the current intergovernmental agreement between the Authority and NPPHA

36 Senior Bonds Debt Service Reserve Account Pursuant to the Resolutions, there is established a Senior Bonds Debt Service Reserve Account within the Debt Service Reserve Fund, solely for the benefit of the holders of the Senior Bonds, in an amount (the "Senior Bonds Debt Service Reserve Account Requirement") equal to the lesser of (i) the maximum Aggregate Debt Service payable during any Fiscal Year on all Senior Bonds or (ii) the maximum amount of sale proceeds of the Senior Bonds (as defined in the United States Treasury Regulations) that may be deposited in the Senior Bonds Debt Service Reserve Account without adversely affecting the exemption from federal income taxation of interest on the Senior Bonds; provided that, the Senior Bonds Debt Service Reserve Account Requirement shall not be determined on the date the Series 2007 Bonds are issued and the amount on deposit in the Senior Bonds Debt Service Reserve Account immediately prior to the issuance of the Series 2007 Bonds (which, pursuant to similar provisos made in connection with the issuance of the Series 2004 Bonds and the Series 2006 Bonds, equals the amount on deposit in the Senior Bonds Debt Service Reserve Account immediately prior to the issuance of the Series 2004 Bonds) shall be the Senior Bonds Debt Service Reserve Account Requirement until Senior Bonds are issued in addition to the Series 2007 Bonds and the other Senior Bonds Outstanding on the date the Series 2007 Bonds are issued. Upon the issuance of the Series 2007 Bonds, the Senior Bonds Debt Service Reserve Account Requirement will be $118,033,648, which amount will be funded from amounts currently on deposit in the Senior Bonds Debt Service Reserve Account. Amounts on deposit in the Senior Bonds Debt Service Reserve Account will be applied solely for the purpose of paying the principal, Maturity Value, and Redemption Price of and interest on the Senior Bonds in the event amounts on deposit in the Senior Bonds Debt Service Account of the Debt Service Fund are insufficient to make such payments. See "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto and "Other Transfers to Debt Service Fund" under this caption. If the amount on deposit in the Senior Bonds Debt Service Reserve Account is less than the Senior Bonds Debt Service Reserve Account Requirement, then, subject to the priorities described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and below under "Flow of Funds," on or before the last day of each month there will be transferred from the Revenue Fund into the Senior Bonds Debt Service Reserve Account an amount equal to 1/12 of the Senior Bonds Debt Service Reserve Account Requirement or the amount needed to attain the Senior Bonds Debt Service Reserve Account Requirement, whichever is lesser, which transfers will continue until the Senior Bonds Debt Service Reserve Account contains the Senior Bonds Debt Service Reserve Account Requirement. See "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and "Flow of Funds" under this caption. The Resolutions provide that the Trustee, at the written direction of the Authority at any time, with the written consent of the Bond Insurer (which consent may be given or withheld at the sole discretion of the Bond Insurer), shall substitute for the cash deposit in the Debt Service Reserve Fund or any Account or Subaccount thereof a letter of credit, surety bond, insurance policy, agreement guaranteeing payment or other undertaking by a financial institution to insure that cash in the amount otherwise required to be maintained therein will be available to the Trustee as needed, provided that the Trustee receives evidence satisfactory to the Trustee from each Rating Agency that such substitution will not, by itself, result in a withdrawal of or reduction in its rating of any Bonds. Upon any such substitution, the cash deposit in such Fund, Account, or Subaccount must be transferred to the Construction Fund or the Revenue Fund, as directed by the Authority

37 Because the Debt Service Reserve Fund is established for the benefit of all Senior Bonds, amounts on deposit therein are subject to certain restrictions imposed thereon under the Master Bond Resolution. These include, for example, certain restrictions on investments of moneys on deposit therein, and certain requirements that the Bond Insurer consent to substitution of a credit facility for cash in the Debt Service Reserve Fund, as described in the preceding paragraph. Surplus Fund The Surplus Fund and the General Surplus Account and the Termination Payment Account therein are established under the provisions of the Resolutions. As of June 1, 2007, the General Surplus Account contained approximately $143,725,000. For administrative purposes the Authority maintains four subaccounts in the General Surplus Account: the Vehicle Registration Fee Bonds Defeasance Subaccount, the Senior Bonds Defeasance Subaccount, the Capital Improvement Subaccount, and the Rainy Day Reserve Subaccount. As of the date of this Official Statement such subaccounts contained approximately $13,904,000, $26,104,000, $93,360,000, and $10,445,000, respectively. As of June 1, 2007, the Termination Payment Account contained $0. As set forth in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and below under "Flow of Funds," any money remaining in the Revenue Fund at the end of any Fiscal Year must be transferred to the Surplus Fund. If on any date there are not sufficient moneys in the Revenue Fund to make the transfers to the Debt Service Fund required by the Resolutions, such deficiency must be satisfied from various of the Funds and Accounts established under the Resolutions, including the Surplus Fund, as described in "Other Transfers to Debt Service Fund" under this caption. Moneys transferred to the Surplus Fund pursuant to the Resolutions, and, except for any Termination Payment received by the Authority, any other moneys deposited in or transferred to the Surplus Fund shall be deposited in the General Surplus Account. Any Termination Payments received by the Authority shall be deposited directly to the Termination Payment Account. Use of General Surplus Account. Moneys held in the General Surplus Account shall be transferred to the Debt Service Fund or one or more of the Accounts thereof to the extent described under "Other Transfers to Debt Service Fund" below and otherwise shall be distributed to, or to the order of, the Authority at the written request of an Authorized Authority Representative to be applied: (i) prior to the Completion Date, for the purpose of paying Costs of the Project relating to portions of the Project that have been constructed, are under construction or are contiguous to portions of the Project that have been constructed or are under construction; and (ii) following the Completion Date: (A) for the redemption of Bonds, (B) as may be required by the Establishing Contract and (C) for any other purpose now or hereafter authorized or permitted by law. Notwithstanding the foregoing, amounts on deposit in the General Surplus Account shall be used at any time (I) to pay any Termination Payments or Miscellaneous Swap Payments payable by the Authority, (II) to make any payments due and owing to the Bond Insurer which have not been paid pursuant to clause (vi) under "Use of Senior Bonds Retained Balance Subaccount" above or clause (iv) under "Use of Vehicle Registration Fee Bonds and Senior Bonds Subaccount" above, (III) to make any payments due and owing to the Bank which have not been paid pursuant to clause (iii) under "Use of Vehicle Registration Fee Bonds and Senior Bonds Subaccount" above and (IV) to make any payments required upon the execution and delivery of a Related Financial Transaction or any Credit Facility. Use of Termination Payment Account. Moneys held in the Termination Payment Account shall be used to make any payments required to be made by the Authority upon the execution and delivery of a Related Financial Transaction, unless the Bond Insurer consents in writing to the release of such moneys from the Termination Payment Account. Moneys held in the Termination

38 Payment Account shall be retained therein until the Bond Insurer has consented in writing to the execution and delivery of the Related Financial Transaction or to the release of such moneys to the General Surplus Account as described below. Any Termination Payments released from the Termination Payment Account and not used to make a payment upon the execution and delivery of a Related Financial Transaction shall be deposited to the General Surplus Account. Authority's Right to Deposit Other Money. Nothing in the Resolutions shall prohibit the Authority from depositing directly into the Surplus Fund or any of the Accounts thereof moneys that, prior to such deposit, are not part of the Trust Estate. Renewal and Replacement Fund Under the provisions of the Resolutions, the Renewal and Replacement Fund is established and is required to be funded over time with Revenues and then maintained in an amount equal to the greater of (i) the amount determined by a Consulting Engineer to be necessary for the purposes thereof and (ii) an amount equal to the lesser of (A) the Operating Expenses estimated by the Authority for the succeeding Fiscal Year and (B) $20,000,000 (the "Renewal and Replacement Fund Requirement"). As of June 1, 2007, $19,249,000 has been deposited in the Renewal and Replacement Fund. The Authority intends to transfer from the Revenue Fund to the Renewal and Replacement Fund on or before the last day of each month an amount equal to 1/36 of the Renewal and Replacement Fund Requirement or the amount needed to attain the Renewal and Replacement Fund Requirement, whichever is lesser. Such transfers shall continue until the Renewal and Replacement Fund contains the Renewal and Replacement Fund Requirement. See "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and below under "Flow of Funds". If on any date there are not sufficient moneys in the Revenue Fund to make the transfers to the Debt Service Fund required by the Resolutions, such deficiency must be satisfied from various of the Funds and Accounts established under the Resolutions, including the Renewal and Replacement Fund, as described in "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto and in "Other Transfers to Debt Service Fund" under this caption. Subject to such transfers to the Debt Service Fund, moneys in the Renewal and Replacement Fund are to be distributed to, or to the order of, the Authority and applied for the purpose of paying costs of maintenance and repair of, and environmental mitigation for, the Project. Operating Reserve Fund Under the provisions of the Resolutions, the Operating Reserve Fund is established and is required to be funded over time with Revenues and then maintained in an amount equal to 1/6 of budgeted Operating Expenses, as determined by the Authority, for the current fiscal year (the "Operating Reserve Fund Requirement"). As of June 1, 2007, $5,072,000 has been deposited in the Operating Reserve Fund, and as of such date the Operating Reserve Requirement was $4,883,000. If the Operating Reserve Fund contains less than the Operating Reserve Fund Requirement, then, subject to the priorities described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and below under "Flow of Funds," on or before the last day of each month there will be transferred from the Revenue Fund to the Operating Reserve Fund the amount needed to attain the Operating Reserve Fund Requirement. If on any date there are not sufficient moneys in the Revenue Fund to make the transfers to the Debt Service Fund required by the Resolutions, such deficiency must be satisfied from moneys deposited in various of the Funds and Accounts established under the Resolutions, including the Operating Reserve Fund, as described in "SUMMARY OF THE RESOLUTIONS Other Transfers to

39 Debt Service Fund" in Appendix A hereto and in "Other Transfers to Debt Service Fund" under this caption. Subject to such transfers to the Debt Service Fund, amounts on deposit in the Operating Reserve Fund are to be distributed to, or to the order of, the Authority at the written request of an Authorized Authority Representative to be applied to Operating Expenses not paid from other sources. See "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and "Flow of Funds" under this caption. Other Transfers to Debt Service Fund Vehicle Registration Fee Bonds. Under the provisions of the Resolutions, if on any date there are not sufficient moneys in the Revenue Fund to make the required deposits to the Vehicle Registration Fee Bonds Debt Service Account on such date, moneys shall be transferred to the Vehicle Registration Fee Bonds Debt Service Account from the following Funds, Accounts, and Subaccounts, in the priority in which listed, in an amount which, together with the amounts to be transferred thereto from the Revenue Fund on such date, will be sufficient to establish the balance required by the Resolutions to be on deposit therein: (i) From the Vehicle Registration Fee Bonds Capitalized Interest Subaccount; (ii) If and to the extent Revenues consisting of Vehicle Registration Fees and amounts received by the Authority pursuant to a Related Financial Transaction with respect to Vehicle Registration Fee Bonds (other than any Termination Payments) have been transferred to any Fund or Account other than the Vehicle Registration Fee Bonds Debt Service Account after the previous first Business Day of September, from such Fund or Account an amount equal to the Revenues consisting of Vehicle Registration Fees and amounts received by the Authority pursuant to a Related Financial Transaction with respect to Vehicle Registration Fee Bonds (other than any Termination Payments) that have been so transferred to such Fund or Account; and (iii) Subject to the priorities set forth below under "Priorities Between Tiers of Bonds," from the Surplus Fund or any Account thereof; and (iv) From the Vehicle Registration Fee Bonds Debt Service Reserve Account. For a more complete description of other transfers to the Vehicle Registration Fee Bonds Debt Service Account, see "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto. Senior Bonds. Under the provisions of the Resolutions, if on any date there are not sufficient moneys in the Revenue Fund to make the required deposits to the Senior Bonds Debt Service Account on such date, moneys are required to be transferred to the Senior Bond Debt Service Account from the following Funds, Accounts, and Subaccounts, in the priority in which listed, in an amount which, together with the amount to be transferred thereto from the Revenue Fund on that date, will be sufficient to establish the balance required by the Resolutions to be on deposit therein: (i) Surplus Fund or any Account thereof (subject to the priorities set forth below under "Priorities Between Tiers of Bonds");

40 (ii) (iii) (iv) (v) Renewal and Replacement Fund (subject to the priorities set forth below under "Priorities Between Tiers of Bonds"); Senior Bonds Debt Service Reserve Account; Project Account (subject to the priorities set forth below under "Priorities Between Tiers of Bonds"); and If an Event of Default with respect to the Senior Bonds has occurred and is continuing, the Operating Reserve Fund (subject to the priorities set forth below under "Priorities Between Tiers of Bonds"). For a more complete description of other transfers to the Senior Bonds Debt Service Account, see "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto. Subordinate Bonds. Under the provisions of the Resolutions, if on any date there are not sufficient moneys in the Revenue Fund to make the required deposits, if any, to the First Tier Subordinate Bonds Debt Service Account, the Second Tier Subordinate Bonds Debt Service Account, or the Third Tier Subordinate Bonds Debt Service Account to pay the debt service requirements on any First Tier Subordinate Bonds, Second Tier Subordinate Bonds, and Third Tier Subordinate Bonds, respectively, moneys are required to be transferred to the applicable Debt Service Accounts from various Funds and Accounts as described in "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto. As described therein, subject to the priorities set forth in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and below under "Priorities Between Tiers of Bonds," and subject to certain other limitations set forth in the Resolutions, the amounts on deposit in the General Surplus Account, the Renewal and Replacement Fund, the Project Account and, if an Event of Default has occurred and is continuing, the Operating Reserve Fund may be transferred to the applicable Subordinate Bond Debt Service Accounts if amounts in the Revenue Fund are not sufficient to make the required deposits. For a more complete description of other transfers to the Debt Service Accounts for Subordinate Bonds, see "SUMMARY OF THE RESOLUTIONS Other Transfers to Debt Service Fund" in Appendix A hereto. Priorities Between Tiers of Bonds. If the amount to be transferred as described above under this caption to a Debt Service Account for more than one Tier of Bonds from any Fund, Account, or Subaccount other than the Project Account exceeds the balance then on deposit in the Fund, Account, or Subaccount from which moneys are to be transferred, the Resolutions provide that the moneys available in such Fund, Account, or Subaccount shall be transferred to such Debt Service Accounts in the order in which such Debt Service Accounts are to be funded from moneys in the Revenue Fund as described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and in "Flow of Funds" under this caption; provided that, if such a transfer is to be made from the Surplus Fund or any Account thereof to both the Senior Bonds Debt Service Account and the Vehicle Registration Fee Bonds Debt Service Account, the amounts transferred to the Vehicle Registration Fee Bonds Debt Service Account and the Senior Bonds Debt Service Account shall be determined by the Bond Insurer. Any moneys transferred to a Debt Service Account for the First Tier Subordinate Bonds, the Second Tier Subordinate Bonds or the Third Tier Subordinate Bonds from the Project Account as described above under this caption shall be transferred only to the extent of the proportionate share of the moneys on deposit in the Project Account on the first date on which moneys are transferred from the Project Account to the Debt Service Account for such Tier of Bonds that bears the same ratio to the total amount of moneys then on deposit in the Project Account on such date as the ratio of (i) the Outstanding

41 principal amount on such date of such Tier of Bonds bears to (ii) the Outstanding principal amount on such date of all Bonds. Hedge Obligations. Proceeds of the Series 2007 Bonds are expected to be issued to current refund the Refunded Series 1997A Bonds that are subject to optional redemption on September 1, On June 5, 2007, the Authority will enter into three forward floating-to-fixed interest rate swap agreements (the "Swap Agreements") with Bear, Stearns Financial Products, Inc. ("BS"), Morgan Stanley Capital Services Inc. ("MS"), and GKB Financial Services Corporation II ("GKB"). The purpose of the Swap Agreements is to lock in prevailing fixed interest rates in contemplation of the refunding of the Refunded Series 1997A Bonds. The Swap Agreements with BS, MS, and GKB have notional amounts of $155,252,500, $155,252,500, and $112,835,000, respectively. Each Swap Agreement will provide for certain payments to or from BS, MS, and GKB equal to the difference between the fixed rates (3.832% to BS, 3.832% to MS, and 4.035% to GKB) payable by the Authority under the respective Swap Agreements and 67% of one month U.S. dollar LIBOR payable by BS and MS (with respect to the BS and MS Swap Agreements), and 100% of USD-SIFMA Municipal Swap Index payable by GKB (with respect to the GKB Swap Agreement). Such payments will commence as of June 14, The Authority plans to have the Swap Agreements apply to the payments due on all the Series 2007 Bonds issued to refund the Refunded Series 1997A Bonds, thereby effectively converting the floating rate on such portion of the Series 2007 Bonds to fixed rate obligations. The Authority's obligations under the Swap Agreement are secured by a lien on the Trust Estate on parity with any Senior Bonds, including the Series 2007 Bonds. The Authority has designated the Swap Agreements as Related Financial Transactions with respect to the Series 2007 Bonds. Consequently, the Regularly Scheduled Swap Payments payable by the Authority pursuant to the Swap Agreements are payable and secured by a lien on the Trust Estate on parity with the Senior Bonds, including the Series 2007 Bonds, as further described in SUMMARY OF THE RESOLUTIONS Related Financial Transactions in Appendix A. Any Termination Payments and Miscellaneous Swap Payments required to be made by the Authority pursuant to the Swap Agreements are payable from amounts on deposit in the Surplus Fund. See SUMMARY OF THE RESOLUTIONS Surplus Fund in Appendix A. Flow of Funds Except as otherwise provided in the Resolutions, all Revenues must be delivered to the Trustee upon receipt by the Authority, and must be deposited by the Trustee in the Revenue Fund, and amounts in the Revenue Fund are to be used for the purposes and in the order of priority generally described in the following chart. More detailed information regarding the flow of funds under the Resolutions is set forth in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto. Any conflict between the chart below and the provisions of the Resolutions summarized in Appendix A hereto shall be governed by the Resolutions summarized in Appendix A hereto

42 R E V E N U E S (1) REVENUE FUND Vehicle Registration Fee Bonds Debt Service Account (2) Vehicle Registration Fee Bonds Debt Service Reserve Account (2) O P E R A T I N G E X P E N S E S Senior Bonds Debt Service Account REBATE FUND Senior Bonds Debt Service Reserve Account First Tier Subordinate Bonds Debt Service Account First Tier Subordinate Bonds Debt Service Reserve Account RENEWAL AND REPLACEMENT FUND Second Tier Subordinate Bonds Debt Service Account Third Tier Subordinate Bonds Debt Service Account OPERATING RESERVE FUND Other Subordinate Debt SURPLUS FUND (1) Includes all amounts derived from ownership or operation of the E-470 Toll Road. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS Pledge of Trust Estate Revenues." (2) Payable solely from Vehicle Registration Fees deposited in the Revenue Fund. Whenever the amount on deposit in the Operating Reserve Fund is in excess of the Operating Reserve Fund Requirement or the amount on deposit in the Renewal and Replacement Fund is in excess of the Renewal and Replacement Fund Requirement, the Resolutions provide that the excess on deposit in such Account or Fund shall be transferred to the Revenue Fund and applied as described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto. Whenever the amount on deposit in the Vehicle Registration Fee Bonds Debt Service Reserve Account is in excess of the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement and the other conditions described below in subparagraph (b) of the second paragraph under the caption "Investment of Funds" have been complied with, the Resolutions provide that the excess on deposit in such Account shall be transferred to the Revenue Fund and applied as described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto. Whenever the amount on deposit in the Senior Bonds Debt Service Reserve Account is in excess of the Senior Bonds Debt Service Reserve Account Requirement and the other conditions described below in subparagraph (c) of the second paragraph under the caption "Investment of Funds" have been complied with, the Resolutions provide that the excess on deposit in such Account shall be transferred to the Revenue Fund and applied as described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto

43 Issuance of Additional Bonds No bonds in addition to the Bonds may be issued under the Resolutions unless the following requirements are satisfied. Certain additional requirements for the issuance of Bonds are described in "SUMMARY OF THE RESOLUTIONS Provisions For Issuance of Bonds" in Appendix A hereto. (a) For all additional Series of Bonds not including certain completion bonds as described in further detail in Appendix A hereto and certain Refunding Bonds described in paragraph (b) below, the conditions set forth in subparagraphs (iii), (iv), and (v) of this paragraph (a) must be met, and the conditions set forth in either subparagraph (i) or subparagraph (ii) of this paragraph (a) must be met; provided that none of such conditions need be met if the written consent of the Bond Insurer is obtained for the issuance of such additional Series of Bonds: (i) If the Series of Bonds to be issued is not Vehicle Registration Fee Bonds, a certificate or report of a Toll Road Consultant to the effect that for each 12-month period beginning on the first day of the first calendar month following the date of issuance of the Series of Bonds to be issued, Net Revenues (based upon such assumptions as shall be set forth in such certificate or report and subject to the adjustment provided in this paragraph) are estimated to be in an amount not less than (A) if the Series of Bonds to be issued is Senior Bonds, 1.30 times the Aggregate Debt Service for each such 12-month period, and (B) if the Series of Bonds to be issued is First, Second, or Third Tier Subordinate Bonds (or bonds or other obligations subordinate thereto), 1.20 times the Aggregate Debt Service for each such 12-month period. For purposes of this subparagraph, (w) Net Revenues for each such 12-month period shall be reduced by an amount equal to the maximum Aggregate Debt Service due in any 12-month period on Vehicle Registration Fee Bonds; (x) Aggregate Debt Service for each such 12-month period shall not include Aggregate Debt Service due during such 12-month period on Vehicle Registration Fee Bonds or Aggregate Debt Service due during such 12- month period on any Bonds that are Subordinate to the Series of Bonds to be issued; (y) Aggregate Debt Service for each such 12-month period shall include Aggregate Debt Service due during such 12-month period on the Series of Bonds to be issued and Aggregate Debt Service due during such 12-month period on any Series of Bonds, other than Vehicle Registration Fee Bonds or Bonds that are Subordinate to the Series of Bonds to be issued, that, in the opinion of the Toll Road Consultant, will have to be issued in order to complete the Applicable Portion of the Project defined in the Supplemental Resolution authorizing the Series of Bonds to be issued; and (z) Aggregate Debt Service and Net Revenues for each such 12-month period shall include the interest due during such 12-month period on the Series of Bonds to be issued and all Outstanding Bonds that are not Vehicle Registration Fee Bonds or Bonds that are Subordinate to the Series of Bonds to be issued to the extent such interest is to be paid from proceeds of Bonds or other funds held or to be held in the Capitalized Interest Account of the Construction Fund and investment earnings on such proceeds and other funds; or

44 (ii) (iii) (iv) (v) if the Series of Bonds to be issued is Vehicle Registration Fee Bonds, a certificate or report of a Toll Road Consultant to the effect that for each 12-month period beginning on the first day of the first calendar month following the date of issuance of the Series of Bonds to be issued, Vehicle Registration Fees (based upon such assumptions as shall be set forth in such certificate or report) are estimated to be in an amount not less than 1.20 times the Aggregate Debt Service for each such 12-month period on the Vehicle Registration Fee Bonds to be issued, all other Outstanding Vehicle Registration Fee Bonds and any additional Vehicle Registration Fee Bonds that, in the opinion of the Toll Road Consultant, will have to be issued in order to complete the Applicable Portion of the Project defined in the Supplemental Resolution authorizing the Series of Bonds to be issued; and A certificate satisfactory to the Bond Insurer of an Authorized Authority Representative dated as of the date of issuance of such additional Series of Bonds, stating that portions of the E-470 Toll Road between Parker Road and 120 th Avenue is open and operating and toll revenues have been collected from persons traveling on such E-470 Toll Road for at least 12 calendar months, provided that this clause (ii) will not apply when there are no Senior Bonds Outstanding that are insured by the Bond Insurer; and A certificate of an Authorized Authority Representative dated as of the date of issuance of such additional Series of Bonds, stating that there exists no Event of Default under the Resolutions; and The Trustee and the Bond Insurer shall have received written evidence (or other evidence satisfactory to the Trustee and the Bond Insurer) from each Rating Agency that the issuance of such additional Series of Bonds will not, by itself, result in a withdrawal of or reduction of its rating of any Bonds or Parity Obligations; and (b) Without regard to the limitations described in subparagraphs (a) (i), (ii), (iii) and (iv) above, but subject to satisfaction of subparagraph (a) (v) above and the rights of the Bond Insurer as established by the Resolutions, (1) for any Refunding Bonds that are Senior Bonds and that are issued to refund Senior Bonds or Vehicle Registration Fee Bonds (A) a Toll Road Consultant's certificate or opinion that the revenue covenant described in "Toll Revenues Revenue Covenant" above under this caption will be met through the final maturity date of such Refunding Bonds and (B) a certificate or opinion of a Consultant with expertise in investment banking that the issuance of the Refunding Bonds and the defeasance of the Bonds refunded by the Refunding Bonds will result in present value savings, provided that none of the conditions of this paragraph (b) need be met if the written consent of the Bond Insurer is obtained for the issuance of such Refunding Bonds; (2) for any Refunding Bonds that are Vehicle Registration Fee Bonds and are issued to refund Vehicle Registration Fee Bonds or Senior Bonds, a certificate or opinion of a Consultant with expertise in investment banking that the issuance of the Refunding Bonds and the defeasance of the Bonds refunded by the Refunding Bonds will result in present value savings, provided that none of the conditions of this paragraph (b) need be met if the written consent of the Bond

45 Insurer is obtained for the issuance of such Refunding Bonds; and (3) for any Refunding Bonds that are not Senior Bonds or Vehicle Registration Fee Bonds, a Toll Road Consultant's certificate or opinion that the revenue covenant described in "Toll Revenues Revenue Covenant" above under this caption will be met through the final maturity date of such Refunding Bonds, provided that none of the conditions of this paragraph (b) need be met if the written consent of the Bond Insurer is obtained for the issuance of such Refunding Bonds; and (c) For all Series of Vehicle Registration Fee Bonds or Bonds or Parity Obligations the principal and Redemption Price of and interest on which are to be secured by Vehicle Registration Fees on a parity with the Vehicle Registration Fee Bonds, the written consent of the Bond Insurer is obtained, which the Bond Insurer may give or withhold in its sole discretion; and (d) For all Series of Senior Bonds that are not permitted by (b) above and, the written consent of the Bond Insurer is obtained, which the Bond Insurer may give or withhold in its sole discretion. In connection with the issuance of the Series 2007 Bonds, the Bond Insurer will, pursuant to paragraph (b) above, consent to the issuance of the Series 2007 Bonds as Senior Bonds and waive the requirements set forth in paragraph (b)(1)(a), but not (b)(1)(b), above. Parity Obligations and Subordinate Obligations The Authority reserves the right to issue or incur Parity Obligations and to pledge the Revenues to the payment of such Parity Obligations on a parity with the pledge of the Revenues to payment of any Bonds issued under the Resolutions; but only if all the following conditions are met: (a) all conditions to the issuance of the additional Bonds described under "Issuance of Additional Bonds" above are met with respect to such Parity Obligations (determined for such purpose as if such Parity Obligations were Bonds); (b) such Parity Obligations shall have no right to, or lien on, (i) any moneys or investments held in any Fund, Account or Subaccount other than the Revenue Fund or (ii) any other portion of the Trust Estate other than the Revenues; (c) the Parity Obligation Instrument under which such Parity Obligations are issued incorporates the provisions of, and appoints the Trustee as trustee for the owners of such Parity Obligations for purposes of enforcing the provisions of, the Resolutions relating to defaults and remedies; and (d) following the issuance of such Parity Obligations, such Parity Obligations shall be treated as Bonds and debt service on such Parity Obligations shall be treated as Debt Service on Bonds for purposes of the Resolutions, including, but not limited to, the provisions relating to the issuance of additional Bonds and the revenue covenants described in "Toll Revenues Revenue Covenant" under this caption. The Authority has reserved the right under the Resolutions to issue Subordinate Lien Obligations with a pledge of the Revenues subordinate to those of the Series 2007 Bonds. However, the Authority has no current plans to issue any such Subordinate Lien Obligations. Special Project Bonds Notwithstanding any other provisions of the Resolutions, the Authority reserves the right to issue, pursuant to any instrument, revenue bonds which are secured by liens on and pledges of

46 revenues and proceeds derived from any Special Project and are not Authority Bonds or Parity Obligations. In order for a project to be a Special Project, (a) the Special Project must not include any portion of the limited access highway between I-25 South and I-25 North, including the interchanges at I- 25 South and I-25 North, or any property related thereto, except that the Special Project may be located on or in the right-of-way for the E-470 Toll Road so long as the Special Project will not, in the opinion of a Toll Road Consultant, materially adversely affect the operation of the highway or materially reduce the amount of Net Revenues that would be received in the absence of the Special Project, (b) the Authority must declare in writing that it is a Special Project and is not to be part of the E-470 Toll Road project, and (c) the costs of construction, acquisition, improvement, operation, and maintenance of such Special Project must be paid directly from, or from the proceeds of a financing transaction under which the amounts payable by the Authority are payable from, (i) sources that are not included in Revenues or (ii) moneys in the General Surplus Account. A Special Project shall not be deemed to be a part of the E-470 Toll Road project and the revenues from a Special Project shall not be included in Revenues. The Authority has no current plans to issue any Special Project Bonds. Investment of Funds Moneys held in any Fund or Account to be held by the Trustee or any Depository shall be invested and reinvested by the Trustee as promptly as practicable, in accordance with a Letter of Instructions, except that moneys drawn on the Bond Insurance Policy shall not be invested, and moneys in any Funds or Account held by the Authority shall be invested and reinvested by the Authority, in each case to the fullest extent practicable and permitted by the laws of the State, in Investment Securities; provided, however, that, moneys held in the Vehicle Registration Fee Bonds Debt Service Reserve Account and the Senior Bonds Debt Service Reserve Account shall only be invested in (A) Defeasance Investment Securities, (B) Investment Securities held in the Senior Bonds Debt Service Reserve Account established under the 1986 Bond Documents, as of the date of issuance of the Series 1997 Bonds, and (C) other Investment Securities approved by the Bond Insurer in writing. Except as described below with respect to the investments held in the Senior Bonds Debt Service Reserve Account established under the 1986 Bond Documents, Investment Securities in all Funds and Accounts shall mature, or the principal of and accrued interest on such Investment Securities shall be available for withdrawal without penalty, not later than such times as shall be necessary to provide moneys when needed for payment to be made from such Funds and Accounts; provided, however, that (i) in the case of the Senior Bonds Debt Service Reserve Account, if the Net Revenues are not in the amount necessary to satisfy the Authority's revenue covenant (see "Toll Revenues Revenue Covenant" under this caption and "SUMMARY OF THE RESOLUTIONS Particular Covenants of the Authority Revenue Covenant" in Appendix A hereto) at any time after September 1, 2001, until such time as the Net Revenues satisfy such covenant, the Investment Securities therein shall be limited to: (1) Defeasance Investment Securities that mature, or the principal of and accrued interest on such Investment Securities shall be available for withdrawal without penalty, within two years of the date of deposit therein; (2) Investment Securities held in the Senior Bonds Debt Service Reserve Account established under the 1986 Bond Documents as of the date of issuance of the Series 1997 Bonds; and (3) Investment Securities approved by the Bond Insurer in writing; (ii) in the case of the First Tier Subordinate Bonds Debt Service Reserve Account, no less than 20% of the Amortized Value of the Investment Securities therein must at all times mature, or the principal of and accrued interest on such Investment Securities must be available for withdrawal without penalty, within three years of the date of deposit therein; and (iii) in the case of the Vehicle Registration Fee Bonds Debt Service Reserve Account, the Investment Securities therein shall mature within five years of the date of deposit therein (or such longer period to which the Bond Insurer consents in writing). Except as otherwise described in this paragraph or provided in the Resolutions, interest earned or profits realized from investing any moneys deposited in the Funds and Accounts or any

47 Subaccounts thereof will be transferred to the Revenue Fund and applied as described in "SUMMARY OF THE RESOLUTIONS Flow of Funds" in Appendix A hereto and as summarized in "Flow of Funds" herein. Notwithstanding the foregoing: (a) interest and profits from the Rebate Fund, the Project Account, the Capitalized Interest Account and any Account or Subaccount of any of such Funds, Accounts, or Subaccounts shall be retained in such Fund, Account, or Subaccount; (b) interest and profits from the Vehicle Registration Fee Bonds Debt Service Reserve Account shall be applied as follows: (i) regardless of when such interest and profits are received, such interest and profits shall be retained in the Vehicle Registration Fee Bonds Debt Service Reserve Account if and to the extent the amount on deposit in the Vehicle Registration Fee Bonds Debt Service Reserve Account is not equal to the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement, and (ii) to the extent such interest and profits are not required to be applied pursuant to clause (i), any interest and profits received after August 31, 1998, (A) shall be retained in the Vehicle Registration Fee Bonds Debt Service Reserve Account if Vehicle Registration Fees (net of any collection fees retained by, or paid to, any county or other person that collects Vehicle Registration Fees on behalf of the Authority) for each of the immediately preceding two 12-month periods is less than 1.35 times the maximum Aggregate Debt Service payable on the Vehicle Registration Fee Bonds during any Fiscal Year and (B) to the extent not required to be applied pursuant to clause (A), shall be transferred to the Revenue Fund; (c) interest and profits from the Senior Bonds Debt Service Reserve Account shall be applied as follows: (i) regardless of when such interest and profits are received, such interest and profits shall be retained in the Senior Bonds Debt Service Reserve Account if and to the extent the amount on deposit in the Senior Bonds Debt Service Reserve Account is not equal to the Senior Bonds Debt Service Reserve Account Requirement, and (ii) to the extent such interest and profits are not required to be applied pursuant to clause (i), any interest and profits received after September 1, 2001, (A) shall be retained in the Senior Bonds Debt Service Reserve Account if the Net Revenues are not in the amount required by the revenue covenant as described in " Toll Revenues" under this caption and (B) to the extent not required to be applied pursuant to clause (A), shall be transferred to the Revenue Fund; (d) interest and profits from the Renewal and Replacement Fund shall be retained therein to the extent required to attain the Renewal and Replacement Fund Requirement; and (e) interest and profits from the Operating Reserve Fund shall be retained therein to the extent required to attain the Operating Reserve Fund Requirement. Investment Securities acquired as an investment of moneys in any Fund or Account created under the provisions of the Resolutions shall be and remain a part of such Fund or Account except to the extent that, following the transfer or withdrawal of such security or an interest therein or the transfer or withdrawal of the proceeds from the liquidation of such security or an interest therein out of such Fund or Account, the amount remaining on deposit in such Fund or Account is equal to or in excess of the amount required to be on deposit therein under the Resolutions. In computing the amount in the Operating Reserve Fund and the Renewal and Replacement Fund, Investment Securities shall be valued

48 on the date of deposit therein and not less than every six months thereafter at their Amortized Value plus accrued interest; provided that time deposits shall be valued at cost plus accrued interest. Investment Securities held in the Senior Bonds Debt Service Reserve Account must mature within five years of the date of deposit therein unless a longer maturity is approved by the Bond Insurer in writing. In computing the amount in the Debt Service Reserve Fund, Investment Securities must be valued at Fair Market Value on the date of deposit therein and not less than once each year thereafter. Except as otherwise provided in the Resolutions, the Trustee shall sell, or present for redemption, any Investment Security so purchased as an investment whenever it shall be requested in writing by an Authorized Authority Representative to do so or whenever it shall be necessary in order to provide moneys to meet any payment or transfer from any Fund or Account held by it. The Trustee shall not be liable or responsible for any loss resulting from any such investment. BOND INSURANCE The following information has been furnished by MBIA for use in this Official Statement. Neither the Authority nor the Underwriters make any representation as to the accuracy or the completeness of such information, or as to the absence of material adverse changes in such information. Reference is made to Appendix G for a specimen of MBIA's policy. MBIA does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding MBIA s policy and MBIA set forth under this heading "BOND INSURANCE". Additionally, MBIA makes no representation regarding the Series 2007 Bonds or the advisability of investing in the Series 2007 Bonds. The MBIA Insurance Corporation Insurance Policy MBIA's policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the Authority to the Trustee or its successor of an amount equal to (i) the principal of (either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 2007 Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by MBIA's policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration, unless MBIA elects in its sole discretion, to pay in whole or in part any principal due by reason of such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner of the Series 2007 Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference"). MBIA's policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Series 2007 Bonds. MBIA's policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii) payments of the purchase price of Series 2007 Bonds upon tender by an owner thereof; or (iv) any Preference relating to (i) through (iii) above. MBIA's policy also does not insure against nonpayment of principal of or interest on the Series 2007 Bonds resulting from the insolvency, negligence or any other act or omission of the Trustee or any other paying agent for the Series 2007 Bonds

49 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by MBIA from the Trustee or any owner of a Series 2007 Bond the payment of an insured amount for which is then due, that such required payment has not been made, MBIA on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Series 2007 Bonds or presentment of such other proof of ownership of the Series 2007 Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 2007 Bonds as are paid by MBIA, and appropriate instruments to effect the appointment of MBIA as agent for such owners of the Series 2007 Bonds in any legal proceeding related to payment of insured amounts on the Series 2007 Bonds, such instruments being in a form satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National Association shall disburse to such owners or the Trustee payment of the insured amounts due on such Series 2007 Bonds, less any amount held by the Trustee for the payment of such insured amounts and legally available therefor. MBIA Insurance Corporation MBIA is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange listed company (the "Company"). The Company is not obligated to pay the debts of or claims against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and subject to regulation under the laws of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the Territory of Guam. MBIA, either directly or through subsidiaries, is licensed to do business in the Republic of France, the United Kingdom and the Kingdom of Spain and is subject to regulation under the laws of those jurisdictions. In February 2007, MBIA incorporated a new subsidiary, MBIA Mexico, S.A. de C.V. ("MBIA Mexico"), through which it intends to write financial guarantee insurance in Mexico beginning in To date, MBIA Mexico has had no operating activity. The principal executive offices of MBIA are located at 113 King Street, Armonk, New York and the main telephone number at that address is (914) Regulation As a financial guaranty insurance company licensed to do business in the State of New York, MBIA is subject to the New York Insurance Law which, among other things, prescribes minimum capital requirements and contingency reserves against liabilities for MBIA, limits the classes and concentrations of investments that are made by MBIA and requires the approval of policy rates and forms that are employed by MBIA. State law also regulates the amount of both the aggregate and individual risks that may be insured by MBIA, the payment of dividends by MBIA, changes in control with respect to MBIA and transactions among MBIA and its affiliates. MBIA s policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law

50 Financial Strength Ratings of MBIA Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa." Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the financial strength of MBIA "AAA." Fitch Ratings rates the financial strength of MBIA "AAA." Each rating of MBIA should be evaluated independently. The ratings reflect the respective rating agency's current assessment of the creditworthiness of MBIA and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Series 2007 Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Series 2007 Bonds. MBIA does not guaranty the market price of the Series 2007 Bonds nor does it guaranty that the ratings on the Series 2007 Bonds will not be revised or withdrawn. MBIA Financial Information As of December 31, 2006, MBIA had admitted assets of $10.9 billion (audited), total liabilities of $6.9 billion (audited), and total capital and surplus of $4.0 billion (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of March 31, 2007, MBIA had admitted assets of $11.2 billion (unaudited), total liabilities of $7.0 billion (unaudited), and total capital and surplus of $4.2 billion (unaudited), determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. For further information concerning MBIA, see the consolidated financial statements of MBIA and its subsidiaries as of December 31, 2006 and December 31, 2005 and for each of the three years in the period ended December 31, 2006, prepared in accordance with generally accepted accounting principles, included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2006 and the consolidated financial statements of MBIA and its subsidiaries as of March 31, 2007 and for the three month period ended March 31, 2007 and March 31, 2006 included in the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007, which are hereby incorporated by reference into this Official Statement and shall be deemed to be a part hereof. Copies of the statutory financial statements filed by MBIA with the State of New York Insurance Department are available over the Internet at the Company s web site at and at no cost, upon request to MBIA at its principal executive offices. Incorporation of Certain Documents by Reference The following documents filed by the Company with the SEC are incorporated by reference into this Official Statement:

51 (1) The Company s Annual Report on Form 10-K for the year ended December 31, 2006; and (2) The Company s Quarterly Report on Form 10-Q for the quarter ended March 31, Any documents, including any financial statements of MBIA and its subsidiaries that are included therein or attached as exhibits thereto, filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the Company s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, and prior to the termination of the offering of the Series 2007 Bonds offered hereby shall be deemed to be incorporated by reference in this Official Statement and to be a part hereof from the respective dates of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein, or contained in this Official Statement, shall be deemed to be modified or superseded for purposes of this Official Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official Statement. The Company files annual, quarterly and special reports, information statements and other information with the SEC under File No Copies of the Company s SEC filings (including (1) the Company s Annual Report on Form 10-K for the year ended December 31, 2006, and (2) the Company s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007) are available (i) over the Internet at the SEC s web site at (ii) at the SEC s public reference room in Washington, D.C.; (iii) over the Internet at the Company s web site at and (iv) at no cost, upon request to MBIA at its principal executive offices Refunding Project THE REFINANCING PLAN Proceeds of the Series 2007 Bonds will be used, in part, to refund all of the Refunded Series 1997A Bonds, as described below (the "2007 Refunding Project"). The 2007 Refunding Project will result in present value savings to the Authority in Debt Service on its outstanding Senior Bonds, will reduce such Debt Service in the years 2008 to and including 2010, and 2012 to and including 2026, and is consistent with the Authority's debt management program, which contemplates periodic debt restructurings to achieve a more level annual Debt Service structure. The 2007 Refunding Project contemplates that all of the Refunded Series 1997A Bonds, in the aggregate principal amount of $409,080,000 maturing on September 1, 2010, 2011, 2015, 2016, 2017, 2018, 2021, and 2023 (the "Refunded Series 1997A Bonds"), are to be paid upon prior redemption on September 1, 2007 for a redemption price equal to the principal amount thereof plus a premium of 101% and accrued interest to the redemption date

52 Estimated Sources and Uses of Funds The table below sets forth the estimated sources and uses of funds for the 2007 Refunding Project: Sources of Funds Series 2007 Bond Proceeds $423,340,000 Transfer for Refunded Bonds Fund $5,082, Total Sources of Funds $428,422, Uses of Funds Deposit to Escrow Fund (1) $419,020, Issuance Costs (2) $9,401, Total Uses of Funds $428,422, (1) See "2007 Refunding Project" under this caption. (2) Includes the bond insurance premium, and fees for legal counsel, financial advisor, auction agent fees, broker-dealer fees, and rating agencies, underwriter's discount and other expenses associated with the issuance of the Series 2007 Bonds. For information regarding the underwriting arrangements relating to the Series 2007 Bonds, see "UNDERWRITING." Escrow Fund Generally. The Authority and U.S. Bank National Association, as escrow agent (the "Escrow Bank"), will enter into a Series 2007 Escrow Agreement, dated the date of delivery of the Series 2007 Bonds (the "Escrow Agreement"). Pursuant to the Escrow Agreement, the Authority will deposit a portion of the proceeds from the sale of the Series 2007 Bonds into a separate, distinct trust account (the "Escrow Fund") created pursuant to the Escrow Agreement. See "Estimated Sources and Uses of Funds" under this caption. $419,020, will be deposited in the Escrow Fund is to be invested in certain direct obligations of the United States Treasury. The Authority intends that the principal of and interest on the investments in the Escrow Fund (together with any uninvested amount) will be sufficient to enable the Escrow Bank to pay the principal of, and interest on the Refunded Bonds to the Redemption Date as well as to pay the required redemption premium. See "Verification of Mathematical Computations" under this caption. Verification of Mathematical Computations. Prior to the delivery of the Series 2007 Bonds, Causey Demgen & Moore Inc., will deliver a report on the mathematical accuracy of certain computations contained in schedules provided to them by the Underwriters relating to (a) the adequacy of the United States Treasury obligations described above to pay all of the principal of, and interest on (and the related redemption premium of) the Refunded Bonds, when due, and (b) the computations of actuarial yields supporting the Bond Counsel's opinion relating to federal tax matters. See "TAX MATTERS." Based on the mathematical computations of the accountants, the Escrow Fund will be funded in an

53 amount sufficient such that the Refunded Bonds will be deemed to have been paid and will no longer be outstanding under the Resolutions as of the date of the establishment of the Escrow Fund. PROJECTED FINANCIAL INFORMATION The tables on the following pages set forth the annual debt service requirements for the Senior Bonds after issuance of the Series 2007 Bonds, the estimated annual toll revenues available to pay operating expenses and debt service, the gross revenue projection for the E-470 Toll Road, and projected debt service coverage on the Senior Bonds. The tables were prepared based on information furnished by the Authority, the Underwriters, and the Traffic and Revenue Consultant. None of the Authority, the Underwriters, nor the Traffic and Revenue Consultant warrant or represent that the estimates and projections will be met. In addition, the Authority gives no assurances that the actual results of its financial operations will meet or exceed the estimates and projections set forth herein and assumes no obligation to update any such information. See "FORWARD LOOKING STATEMENTS." [Remainder of page intentionally left blank]

54 TABLE 1 Senior Bonds Debt Service Requirements Outstanding Bonds Series 2007 Fiscal Year Ends December 31 Original Principal Interest Original Principal Interest(2) Total Debt Service 2007(1) $24,959,250 $25,738,857 $1,230,000 $ 9,207,917 $61,136, ,423,998 17,459,552 2,635,000 17,690,782 64,209, ,514,419 19,963,631 2,750,000 17,490,587 68,718, ,120,542 22,595,198 4,025,000 17,439,192 74,179, ,457,814 23,259,337 5,825,000 17,156,048 75,698, ,332,031 28,941, ,000 17,307,220 77,880, ,265,932 29,546, ,000 17,044,579 82,466, ,685,899 29,806, ,000 16,936,059 85,068, ,131,485 29,814,015 22,305,000 16,592,749 90,843, ,763,264 32,253,486 20,000,000 15,732,838 94,749, ,078,565 34,513,685 19,270,000 14,804, ,667, ,453,361 51,494,639 12,135,000 14,074, ,157, ,878,132 54,021,868 21,110,000 13,479, ,489, ,329,572 57,670,428 21,890,000 12,524, ,414, ,395,161 60,099,839 21,295,000 11,682, ,472, ,458,800 62,741,200 20,465,000 10,757, ,422, ,658,483 65,236,517 19,615,000 9,928, ,438, ,788,386 67,906,614 18,475,000 9,175, ,345, ,047,864 70,452,136 17,585,000 8,531, ,616, ,230,144 35,569,856 62,995,000 7,013, ,808, ,785,259 89,714, ,314, ,814, ,322,661 92,177, ,288, ,788, ,733, ,766, ,288, ,788, ,291, ,208, ,314, ,814, ,889, ,610, ,288, ,788, ,713, ,786, ,314, ,814, ,607, ,892, ,288, ,788, ,038, ,461, ,288, ,788, ,125,200 45,874, ,390,440 65,390, ,064, ,435, ,314, ,814, ,020,221 55,699,779 41,020,000 4,719, ,459, ,242,301 56,477,699 42,705,000 3,012, ,437, ,545,002 57,174,998 44,460,000 1,208, ,388,286 Total $793,353,347 $1,960,364,637 $423,340,000 $336,598,686 $3,513,656,670 (1) Includes payments made on March 1, 2007 and payments scheduled for September 1, (2) Interest estimates based on 2007 USD-SIFMA Municipal Swap Index and LIBOR Interest Rate Swap rates, and also includes auction rate fees

55 TABLE 2 Estimated Annual Toll Transactions and Revenue Year Transactions Revenue ,633,000 $95,323, ,027, ,165, (1) 62,170, ,110, ,900, ,957, ,854, ,214, (1) (2) 79,892, ,755, ,686, ,160, ,767, ,130, (1) 86,052, ,164, ,969, ,965, ,463, ,950, (1) 101,039, ,036, ,882, ,899, (1) 102,833, ,305, ,811, ,477, ,789, ,649, ,767, ,821, ,746, ,993, ,724, ,165, ,702, ,337, ,680, ,509, ,659, ,681, ,637, ,853, ,519, ,022, ,498, ,194, ,476, ,366, ,454, ,538, ,432, ,710, ,410, ,882, ,389, ,054, ,389, ,054, ,389, ,054, ,389, ,054,000 " (1) Year of planned toll increase. (2) Interchanges at 48th Avenue, 88th Avenue, 112th Avenue, Potomac Street and Quebec Street opened to traffic on January 1. * For purposes of this table, annual toll transactions and revenue is assumed to equal the amounts projected through 2036 in the Toll Revenue Study Summary Report and Letter of the Traffic and Revenue Consultant, which is the assumption currently utilized by the Authority for planning purposes. See "INVESTMENT CONSIDERATIONS Traffic and Revenues Projections."

56 Year Ending December 31 Net Vehicle Registration Fee (VRF) Receipts (1) VRF Bonds Debt Service (2) VRF Revenue Available for Senior Debt TABLE 3 Gross Revenue Projection Gross Toll Revenue (3) Violation Revenue (4) Senior Bonds D/S Reserve Fund Earnings (5) Non-Toll Revenues (6) GROSS REVENUES 2007 $8,321,200 $4,787,572 $3,533,628 $95,323,000 $2,000,000 $7,375,000 $1,355,000 $109,586, ,321,200 4,796,241 3,524, ,165,000 2,000,000 7,375,000 1,355, ,419, ,321,200 4,804,310 3,516, ,110,000 2,000,000 7,375,000 1,355, ,356, ,321,200 4,811,574 3,509, ,957,000 2,000,000 7,375,000 1,355, ,196, ,321,200 4,822,775 3,498, ,214,000 2,000,000 7,375,000 1,355, ,442, ,321,200 4,827,606 3,493, ,755,000 2,000,000 7,375,000 1,355, ,978, ,321,200 4,840,912 3,480, ,160,000 2,000,000 7,375,000 1,355, ,370, ,321,200 4,847,231 3,473, ,130,000 2,000,000 7,375,000 1,355, ,333, ,321,200 4,861,409 3,459, ,164,000 2,000,000 7,375,000 1,355, ,353, ,321,200 4,872,933 3,448, ,965,000 2,000,000 7,375,000 1,355, ,143, ,321,200 4,881,596 3,439, ,950,000 2,000,000 7,375,000 1,355, ,119, ,321,200 1,438,001 6,883, ,036,000 2,000,000 7,375,000 1,355, ,649, ,899,000 2,000,000 7,375,000 1,355, ,629, ,305,000 2,000,000 7,375,000 1,355, ,035, ,477,000 2,000,000 7,375,000 1,355, ,207, ,649,000 2,000,000 7,375,000 1,355, ,379, ,821,000 2,000,000 7,375,000 1,355, ,551, ,993,000 2,000,000 7,375,000 1,355, ,723, ,165,000 2,000,000 7,375,000 1,355, ,895, ,337,000 2,000,000 7,375,000 1,355, ,067, ,509,000 2,000,000 7,375,000 1,355, ,239, ,681,000 2,000,000 7,375,000 1,355, ,411, ,853,000 2,000,000 7,375,000 1,355, ,583, ,022,000 2,000,000 7,375,000 1,355, ,752, ,194,000 2,000,000 7,375,000 1,355, ,924, ,366,000 2,000,000 7,375,000 1,355, ,096, ,538,000 2,000,000 7,375,000 1,355, ,268, ,710,000 2,000,000 7,375,000 1,355, ,440, ,882,000 2,000,000 7,375,000 1,355, ,612, ,054,000 2,000,000 7,375,000 1,355, ,784, ,054,000 2,000,000 7,375,000 1,355, ,784, ,054,000 2,000,000 7,375,000 1,355, ,784, ,054,000 2,000, ,721,148 1,355, ,130,148 (1) Amount budgeted for For purposes of this table, no growth is assumed in annual collections and the fee is assumed to be collected through 2018, the scheduled final maturity of the Vehicle Registration Fee Bonds (net of collection costs). (2) Scheduled debt service on Vehicle Registration Fee Bonds based on synthetic fixed rate of 4.11% based on the interest rate swap executed with respect to the Vehicle Registration Fee Bonds in May, Amounts do not include liquidity and remarketing fees or potential receipts and payments under the associated interest rate swap agreement. (3) For purposes of this table, annual gross toll revenues are assumed to be equal to the updated traffic and revenue projections prepared by the Traffic and Revenue Consultant in August Gross toll revenues are assumed to increase 3.6% from 2035 to 2036 with no increase from 2036 through (4) For purposes of this table, the Authority has projected $2,000,000 to be collected annually for toll violations. (5) Anticipated receipts from securities held in the Senior Bonds Debt Service Reserve Account, which mature prior to Account balance is assumed to be released in (6) Amounts expected to be received in 2007 from highway expansion fees, permits, cell tower leases, ETC transaction fees and miscellaneous fees charged to customers. For purposes of this table, no increase is assumed in future years

57 Year Ending December 31 Gross Revenue (1) TABLE 4 Projected Debt Service Coverage on Senior Bonds Operating Expenses (2) Net Revenue Available to Pay Debt Service Total Senior Bonds Net Debt Service(3) Senior Bonds Debt Service Coverage 2007 $109,586,628 $29,096,700 $80,489,928 $61,136, ,419,959 30,300,000 86,119,959 64,209, ,356,890 31,500,000 96,856,890 68,718, ,196,626 32,700, ,496,626 74,179, ,442,425 34,000, ,442,425 75,698, ,978,594 35,400, ,578,594 77,880, ,370,288 36,800, ,570,288 82,466, ,333,969 38,300, ,033,969 85,068, ,353,791 39,800, ,553,791 90,843, ,143,267 41,400, ,743,267 94,749, ,119,604 43,100, ,019, ,667, ,649,199 44,800, ,849, ,157, ,629,000 46,600, ,029, ,489, ,035,000 48,500, ,535, ,414, ,207,000 50,400, ,807, ,472, ,379,000 52,400, ,979, ,422, ,551,000 54,500, ,051, ,438, ,723,000 56,700, ,023, ,345, ,895,000 59,000, ,895, ,616, ,067,000 61,400, ,667, ,808, ,239,000 63,900, ,339, ,814, ,411,000 66,500, ,911, ,788, ,583,000 69,200, ,383, ,788, ,752,000 72,000, ,752, ,814, ,924,000 74,900, ,024, ,788, ,096,000 77,900, ,196, ,814, ,268,000 81,000, ,268, ,788, ,440,000 84,200, ,240, ,788, ,612,000 87,600, ,012,000 65,390, ,784,000 91,100, ,684, ,814, ,784,000 94,800, ,984, ,459, ,784,000 98,600, ,184, ,437, ,130, ,500, ,630, ,388, (1) See last column of Table 3. (2) Budgeted amounts in Annual increase of 4% is assumed thereafter. (3) See last column of Table

58 THE AUTHORITY General The Public Highway Act became effective on August 27, Under the Public Highway Act, public highway authorities may be created within metropolitan regions of the State for the purpose of financing and constructing beltways and other transportation improvements. In accordance with the Public Highway Act and the E-470 Memorandum of Understanding, on January 13, 1988 Adams County, Arapahoe County, and Douglas County entered into an Establishing Contract (as amended from time to time, the "Establishing Contract"). On the same day, the Director of the State Division of Local Government issued a Certificate of Organization (the "Certificate") for the Authority, establishing the Authority as a separate political subdivision of the State and a body corporate. The City of Aurora, the Town of Parker, the City of Thornton, the City of Brighton and Commerce City subsequently became parties to the Establishing Contact and are Member Governments of the Authority. On July 24, 1997, the Authority accepted the cities of Broomfield (now known as the City and County of Broomfield) and Greeley and Weld County as non-voting affiliate members. The City of Arvada was added as a nonvoting affiliate member effective May 14, Management The Establishing Contract provides for a board of directors for the Authority in which all legislative power of the Authority is vested. Each Member Government, as a party to the Establishing Contract, has the right to appoint one director to the board of directors who shall be an elected official of the Member Government. The current Board of the Authority is as follows: [Remainder of page intentionally left blank] -53-

59 Director E-470 PUBLIC HIGHWAY AUTHORITY Board of Directors Title/Member Government Director Since David Casiano, Chairperson Mayor, Town of Parker 2005 Ed Tauer, Vice Chairperson Mayor, City of Aurora 2003 Jan Pawlowski, Secretary/Treasurer Mayor, City of Brighton 2001 Reba Drotar, Director Council Member, City of Commerce City 2001 Erik Hansen, Director Council Member, City of Thornton 2006 Larry Pace, Director County Commissioner, Adams County 2005 Frank Weddig, Director Melanie Worley, Director County Commissioner, Arapahoe County County Commissioner, Douglas County Ex-Officio Directors (Non-Voting) John "Jack" O'Boyle O Neill Quinlan Bill Swenson Affiliate Member Directors (Non-Voting) Don Allard Rob Masden Tom Selders Karen Stuart Representing Denver Regional Council of Governments Regional Transportation District Colorado Department of Transportation Representing Council Member, City of Arvada County Commissioner, Weld County Mayor, City of Greeley Mayor, City of Broomfield The Authority's staff currently includes the following department heads: E-470 PUBLIC HIGHWAY AUTHORITY Department Heads Edward J. DeLozier... Executive Director John D. McCuskey... Deputy Executive Director, Director of Finance and Audit Matthew M. McDole... Chief Engineer David M. Kristick... Director of Operations J. Matthew Alexander... Director of Roadway and Land Management Michael Hart... Director of Information Technology The Authority's offices are currently located at East 6 th Parkway, Aurora, Colorado 80018; its telephone number is (303) ; and its telecopy number is (303) All Authority directors are responsible for administration of employees, consultants, and budgeting within their respective areas. Set forth below is certain information relating to the professional experience and areas of responsibility for each of the department heads. -54-

60 Edward J. DeLozier, Executive Director. Edward J. DeLozier joined the Authority as Executive Director in January, He began his career as a toll collector on the New Jersey Turnpike Authority in 1973, and was promoted to northern division supervisor in In 1985 he relocated to northern Virginia where he became the Toll Facility Manager for the Dulles Toll Road. He became a toll industry consultant in 1990, working for toll system vendors, other toll facilities, and as an expert witness. In 1994, as project manager he oversaw the privatization efforts of the Orlando Orange County Expressway Authority through Florida Toll Services, a joint venture with Morrison Knudsen (now Washington Group) and Parsons Brinkerhoff. Florida Toll Services converted state operated facilities to the private sector, at a significant cost savings and improvement in quality of service for the Orlando area. Since coming to the Authority, Mr. DeLozier oversaw the completion of the missing link unifying Segments II and III, and the completion of the eastern beltway around Denver through the design-build contract for Segment IV. He has spearheaded the efforts to rebuild the toll system, positioned the Authority to perform its own installations and maintenance, vastly improved violation processing, and established the administrative law court system and outsourced collections. Mr. DeLozier holds a bachelors degree from Rutgers College and a Master of Science in Human Resources Management from Rutgers University. He received his J.D. from George Mason University School of Law and was admitted to practice law in the Commonwealth of Virginia in He is a member of the IBTTA Board of Directors and Chairman of the OmniAir Consortium. John D. McCuskey, Deputy Executive Director, Director of Finance and Audit. Mr. McCuskey became the Authority's Deputy Executive Director in July 2002 and Director of Finance and Audit in February of His background with the Authority dates to 1988, when he was an investment banker and a member of the original E-470 finance team. Shortly thereafter, he became the E-470 Operations Project Manager for the operation of E-470's first open segment of the road between I-25 and Parker Road. He was an independent toll road operations and financial consultant working on toll road projects nationally and internationally for five years prior to accepting his current position. He is responsible for all financial, accounting, risk management and toll audit functions for the Authority. Mr. McCuskey oversees the management of the Authority's budget preparation, cash management, debt management, and financial reporting. Mr. McCuskey holds a Bachelor of Science degree from Southern Illinois University and a Master of Public Administration in Finance from the University of Colorado. Matthew M. McDole, P.E., Chief Engineer. Mr. McDole has served as Chief Engineer since September Mr. McDole was responsible for the management on behalf of the Authority of the Segments II, III, and IV design-build contracts. He is a registered professional engineer in Colorado and California with over forty years of professional experience. Immediately prior to joining E-470, he spent ten years with the San Francisco Bay Area Rapid Transit District (BART), where he also served as chief engineer as well as in other management positions. He was the principal in an engineering consulting firm from 1981 to Mr. McDole also served in engineering management positions for the Regional Transportation District in Denver from 1975 to 1980, including holding the position of Deputy Executive Director for planning, engineering, construction, and right-of-way from 1978 to He holds a Bachelor of Science in Civil Engineering from the University of Arizona. Mr. McDole oversees all planning, engineering, design and construction functions for the tollway, including management of environmental review, Design-Build Contracts and all other engineering and construction contracts. He was recently elected to the Board of Governors of the Transportation and Development Institute of the American Society of Civil Engineers. -55-

61 David M. Kristick, Director of Operations. Mr. Kristick became the Director of Operations in December Previously he served as E-470's Manager of Operations and joined E-470 in August of Mr. Kristick is responsible for E-470 and EXpressToll customer services, marketing and public relations, toll collection operations and maintenance of the Authority's toll collection system and facilities. Mr. Kristick retrofitted the previous Segment I electronic toll collection system to the current toll collection system in use for Segments I through III in October 1998 and directed the continued design and installation of the system as it was fielded for the remaining segments of E-470 in May 1999 and January He also directed the Authority's Violation Processing Center upgrade that became operational in February of Mr. Kristick has extensive leadership, information technology, and operations management experience. Mr. Kristick holds a Bachelor of Science in Engineering from the U.S. Military Academy at West Point, and holds an MBA in Finance and Organizational Development from the University of Rhode Island and a Masters of Science in Strategic Studies from the U.S. Naval War College. J. Matthew Alexander, Director of Roadway and Land Management. Mr. Alexander became the Director of Roadway and Land Management in January 2003 following the opening of Segment IV. He joined the Authority in May of 1996 as Manager of Construction overseeing construction of Segments II, III and IV. Prior to joining E-470, Mr. Alexander was Manager of Construction for RTD on projects including the North I-25 Bus/HOV lane project. He holds a Bachelor of Science in Construction Management from Iowa State University and is a registered Professional Engineer in the State of Colorado. He has more than twenty years experience in the construction industry. Mr. Alexander oversees all roadway maintenance activities including snow removal, signage, lighting, guardrail, drainage structures and all right-of-way activities including acquisition, disposal and permits. Michael Hart, Director of Information Technology. Mr. Hart became the Director of Information Technology in November He previously served as the Authority s Manager of IT Operations beginning in November of Mr. Hart oversees the Authority's information systems hardware and software. Mr. Hart designed and implemented the new E-470 data center in June of 2004, and designed and implemented the Authority s new Voice Over IP (VOIP) phone system in June of Mr. Hart has management experience in a number of industries, including telecommunications, banking, and software development. Mr. Hart received a Bachelor of Science degree in Computer Information Systems from Regis University in Denver. Powers of the Authority Statutory Powers. Under the Public Highway Act, a public highway authority has the following powers without voter approval (except as limited by the TABOR Amendment, as described below in this section), unless limited by the contract creating such authority: to construct, finance, operate or maintain beltways and other transportation improvements; to take private property by condemnation; to establish and collect tolls on any highway provided by the authority; -56-

62 to establish and collect a highway expansion fee from persons developing property within the boundaries of the authority; to establish local improvement districts within the boundaries of the authority and to assess property which is especially benefited by highways provided by the authority; to establish value capture areas within the boundaries of the authority to obtain the incremental growth in revenues in certain local property or sales and use tax revenues resulting from the provision of highways by the authority; to issue bonds; to pledge its revenues to the payment of bonds; and to succeed to the obligations of other governmental entities (such as Arapahoe County and the First E-470 Authority). Under the Public Highway Act, a public highway authority may also accept federal funds under certain circumstances as outlined therein. The Public Highway Act provides that the board of directors of a public highway authority may include property within or exclude property from the boundaries of the authority upon the satisfaction of certain requirements set forth therein. Property may be included within the authority boundaries only if it is within the boundaries of the members of the authority, is contiguous to property within the boundaries of the authority at the time of inclusion, and is not more than two and one-half miles from the proposed center line of the public highway. Prior to such inclusion or exclusion of property, notice of the proposed action must be provided and a public hearing with respect to the proposed inclusion or exclusion of property must be held as described in the Public Highway Act. Thereafter, the board of directors of the authority, with the affirmative vote of two-thirds of its members, may adopt a resolution including or excluding all or any portion of the property described in the notice. Authorization of Vehicle Registration Fees. As provided in the Public Highway Act, the Authority may impose certain vehicle registration fees within all or any part of the jurisdiction of the Member Governments if the registered electors affected by the fee approve it by majority vote at an election. No money of a public highway authority may be used to urge or oppose passage of such an election. Those fees requiring an election are motor vehicle registration fees. The Public Highway Authority Act provides that the electorate eligible to vote for such fees includes the voters within the area in which the proposed fee is to be collected. By resolution adopted on August 10, 1988, the Authority established voting boundaries for purposes of conducting a motor vehicle registration fee election that include only portions of the jurisdictional area within the Member Governments (the "Voting Boundaries"). The Voting Boundaries were generally established on precinct boundary lines within such governments. At an election held on November 8, 1988, to consider authorization of an annual $10 per motor vehicle registration fee, a majority of those voting in the Voting Boundaries approved the registration fee. Thereafter, the governing bodies of the Member Governments ratified imposition of the fee. The Authority began to assess and collect motor vehicle registration fees in January The Vehicle Registration Fees are subject to a first lien for the payment of the principal of and interest on the Vehicle Registration Fee Bonds and to any replenishable deficiencies in the Vehicle Registration Fee Bonds Debt Service Reserve Account as described in "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES

63 BONDS." For information on the revenues received by the Authority from the motor vehicle registration fees, see "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS Vehicle Registration Fees." TABOR Amendment. At the general election held in November 1992, the electors of the State of Colorado approved a voter-initiated amendment to the Colorado Constitution, sometimes referred to as the taxpayer's bill of rights or "TABOR" (the "TABOR Amendment"). The TABOR Amendment generally requires, among other things, that any "district" must obtain voter approval prior to imposing any new tax or tax rate increase, creating any multiple-fiscal year direct or indirect debt or other financial obligation, or increasing fiscal year spending from year-to-year in excess of inflation plus local growth. A "district" is defined under the TABOR Amendment to include the State of Colorado or any local government, excluding "enterprises" (government-owned businesses authorized to issue their own revenue bonds and receiving under 10% of annual revenue in grants from all Colorado state and local governments combined). Although the Colorado Supreme Court in May 1995 ruled that the Authority was a "district" and not an "enterprise" under TABOR since the Authority had the ability to levy certain taxes, the Colorado General Assembly enacted legislation in March 1996 declaring its intention that public highway authorities be permitted to qualify as enterprises under the TABOR Amendment, and eliminated the power to impose taxes as inconsistent with the establishment of a public highway authority as an "enterprise" under the TABOR Amendment. The Arapahoe County District Court held in June 1996 that the Authority was now an "enterprise" and not a "district," and that the TABOR Amendment was not applicable to the Authority. Based on this decision, the Authority believes that it constitutes an enterprise as described in the TABOR Amendment, and, therefore, that the spending, revenue and debt limitations under the TABOR Amendment do not apply to the Authority's operations. Contracts and Agreements. Although certain essential governmental functions of the Authority may not be delegated by contract to private third parties, the Authority may contract for construction, operations and maintenance, and financial advisory services, among other things. Throughout its existence, the Authority has engaged a number of national engineering firms to advise it on a variety of E-470 Toll Road matters. The Authority currently has contracts with TP Enterprises for snow removal and ice control, Alltech, Inc., A Parsons Brinckerhoff Company, d/b/a Mile High Toll Services for toll operations, toll maintenance, and management tasks, and the Colorado State Patrol for law enforcement. The Authority has an on-call engineering contract with URS Corporation. See "THE E-470 TOLL ROAD Operation and Maintenance" herein. Authority Liability As provided in the Colorado Governmental Immunity Act, Article 10 of Title 24, Colorado Revised Statutes ("Immunity Act"), public entities and their employees acting within the course and scope of their employment shall be immune from liability for tort claims under Colorado state law based on the principle of sovereign immunity except for those specifically identified events or occurrences defined in the Immunity Act. Colorado courts have not addressed whether the Authority or any other public highway authority is a "public entity" within the meaning of the Immunity Act. The exceptions in the Immunity Act allow liability for, among other things, injuries resulting from a dangerous condition which interferes with the movement of traffic on any public highway, road, street, or sidewalk; a dangerous condition caused by failure to realign a turned stop or yield sign or to repair a traffic signal displaying conflicting directions; a dangerous condition caused by known accumulation of snow and ice that physically interferes with public access on walks leading to a public building; the operation of a motor -58-

64 vehicle owned or leased by the public entity, except for emergency vehicles; a dangerous condition of any public building of the public entity; and the operation and maintenance of or a dangerous condition of public water, gas, sanitation, electrical, or power facilities. Where recovery is permitted, the Immunity Act also generally limits the maximum amount that may be recovered to $150,000 for injury to one person in a single occurrence, and $600,000 for an injury to two or more persons in a single occurrence, except that no one person may recover in excess of $150,000. The Immunity Act does not limit recovery against a public employee who is acting outside the course and scope of his/her employment. The Immunity Act specifies the sources from which judgments against public entities may be collected and provides that public entities are not liable for punitive or exemplary damages. Punitive or exemplary damages may be assessed, however, against a public employee personally who is acting outside the course and scope of his/her employment. The Immunity Act does not prohibit claims against public entities or their employees under federal law, contract law, or under other common law theories. Financial Information Concerning the Authority Financial Statements. The audited financial statements of the Authority for the fiscal years ended December 31, 2006 and 2005 are included in Appendix B hereto. Budgetary Process. The Authority utilizes a planning based budget process. The Authority creates a two-year operating budget for Board review prior to formal adoption in one-year increments. It also reviews a five-year capital plan with the Board annually, prior to adopting the next year's capital budget. In developing the operating and capital budget for Fiscal Year 2007, the various departments of the Authority developed separate budgets, which were then subjected to peer review of all department directors. This process resulted in a unified budget that was reviewed by the Board in September 2006 and was appropriated and approved by the Board in December

65 E-470 PUBLIC HIGHWAY AUTHORITY Fiscal Year 2007 Budget Summary REVENUE Tolls $95,323,000 Vehicle Registration Fees 8,541,500 Investment Income 7,375,000 Other Authority Revenues 3,469,000 TOTAL REVENUES $114,708,500 EXPENDITURES Salary Expenses $5,254,500 OPERATING Toll Operations $13,454,700 Roadway Maintenance and Land Management 4,720,900 Engineering 300,100 Finance 3,052,100 Executive Director and Board of Directors 1,203,400 Information Technology 1,554,300 Subtotal Operating Expenses $24,285,500 TOTAL OPERATING BUDGET $29,540,000 CAPITAL BUDGET $39,959,000 Capital Improvement Plan. The Authority will expend approximately $39.9 million in capital projects during This includes major resurfacing of a portion of the E-470 Toll Road ($8.5 million) and completion of the I-70 interchange fly-by and fly-over complex ($23.5 million). Other projects in 2007 include dualization of Jordan Road ramps ($1.7 million), completion of the Smoky Hill Road bridge widening ($1.7 million) and cable-barrier placement in a portion of the median. Additionally, the Authority expects that, from 2008 to 2011, it will undertake approximately $22.8 million in major capital improvement projects for the E-470 Toll Road. The following are key improvements included in the capital improvement plan: Bridge and Pavement Repairs. This project includes ongoing maintenance of roadway surface and structures. This includes pavement marking, pavement replacement and overlays where necessary, and bridge repairs where necessary. These projects are expected to be ongoing for the next five years. The total project cost is approximately $12.9 million. Roadway Safety Study and Cable Barrier System. The Authority conducted a third party system-wide roadway safety study in the first half of The study determined the E- 470 Toll Road performs, as a matter of safety, better than similarly designed roads of its class. The study also identified the locations for installation of the cable barrier system -60-

66 approved by the Authority. The budget has $1 million a year over the next five years for the cable barrier system. I-70 Flyby and Ramp H Flyover. The Authority began a $40 million flyby project over I- 70 in Following completion through-traffic will be able to avoid the traffic signals at I-70. The Ramp H Flyover is a $20 million project to take north-bound E-470 to westbound I-70. The Ramp H Flyover is expected to be completed in the fourth quarter of Both projects will enhance the traffic flow as well as provide a safer interchange. Dualization of Jordan Road and Avenue Jewel Ramps. Additional electronic non-stop toll lanes were added at Jordan Road during the first half of The Jewel Avenue ramps will be designed and constructed in the second half of THE E-470 TOLL ROAD General The E-470 Toll Road is a 47-mile, limited-access highway generally running along the eastern perimeter of the Denver metropolitan area, operating as a toll highway and extending state highway C-470 from a location intersecting I-25, south of the Denver Tech Center ("I-25 South"), running east and north through the City of Aurora, passing along the edge of DIA and intersecting I-25 North of Denver ("I-25 North"). Segment IV, the final segment of the E-470 Toll Road, was opened in two sections. The first component from 120 th Avenue to US 85 opened in August, The section from US 85 to I-25 North opened in January, 2003 and highway tolls were implemented for Segment IV traffic in January, Operation and Maintenance The Authority has collected tolls on use of Segment I since July, 1991, on use of the opened portions of Segments II and III in phases, beginning in October, 1998 and in May, 1999, and on use of Segment IV in August, 2002 and January, See "Toll Collection System" under this caption for a description of the toll collection system and of tolls imposed for use of the E-470 Toll Road. See "THE AUTHORITY Financial Information Concerning the Authority Capital Improvement Plan" for information about certain planned capital improvements to the E-470 Toll Road. Day-to-day operation and maintenance of the E-470 Toll Road are being provided under several contracts for roadway operation, facility and toll maintenance and management, roadside maintenance, roadway maintenance and management consulting services. The Authority has contracted with Alltech, Inc., A Parsons Brinckerhoff Company, d/b/a Mile High Toll Services ("Mile High Toll"), as the Operations Contractor under the 2004 Operations Contract dated as of January 1, 2004 (the "Operations Agreement"). Mile High Toll is a Texas corporation and is affiliated with Parsons Brinkerhoff. Under the Operations Agreement, Mile High Toll provides certain operations, toll maintenance, and management tasks. The Operations Agreement has an initial term ending December 31, 2007, with two one year extensions. The Operations Agreement also provides for an automatic oneyear extension, which may be overridden by the Authority upon 45 days' notice. The Authority is currently in the first of the two year extensions, and expects to exercise the second year extension for fiscal year Under the Operations Agreement, Mile High Toll is to submit an annual budget for approval by the Authority. Effective in 2007, Mile High Toll will receive a management fee calculated using a base of 4.9% of budgeted operating costs and an administrative fee of 1.6%. -61-

67 The Authority contracts for all maintenance of the E-470 Toll Road and the Right-of- Way. These include separate contracts for asphalt repair, concrete repair, guardrails, snow removal and ice control, sweeping, traffic control, lighting, fencing, mowing and landscaping, and pavement striping and sign repair. Insurance The Authority carries blanket coverage property insurance on the E-470 Toll Road, covering physical damage to bridges, buildings, Authority personal property and electronic data processing equipment, with a limit of $198,839,526, subject to an occurrence limit of $25,000,000 and varying deductibles ranging up to $50,000. The Authority carries flood and earthquake insurance of $5,000,000, with a $50,000 deductible. The Authority carries business interruption insurance, with a current limit of $4,900,000 and a 72-hour deductible. The Authority carries municipal excess liability insurance (including automobiles), with an $11,000,000 annual aggregate limit and an occurrence deductible of $5,000, and has workers' compensation coverage. Toll Collection System General. The toll collection system for the E-470 Toll Road is a "closed barrier and ramp" system. This system, which ensures that all motorists using the facility pay a toll, is designed to produce the greatest toll revenues at the lowest operating cost. The toll collection system for the E-470 Toll Road includes five mainline toll plazas as well as 32 ramp toll plazas located at certain interchanges. Four of the mainline toll plazas currently have five lanes in each direction including three manual and two high speed EXpressToll only lanes. The fifth plaza has six lanes in each direction consisting of three manual and three high speed EXpressToll only lanes. Attendants are available at manual collection lanes to provide change, receipts and information. Under the Authority's EXpressToll system, express/avi lanes are designed to allow vehicles equipped with EXpressToll transponders to be charged for the toll automatically at highway speeds. As of May 8, 2007, there were $241,401 EXpressToll accounts opened, and within those accounts, there were 445,491 transponders issued. The number of open accounts increased 4.7% from December, The ramp plazas have automatic coin machines and in some locations separate AVI capabilities. The Authority will continue to implement and use a Violation Enforcement System ("VES") to enforce and ensure the collection of all tolls due, and is currently working to improve the operation and reliability of the VES as described below under "Enforcement Provisions." All lanes will have VES capability. The toll collection system also includes an audit system, a traffic incident management system, a carbon monoxide monitoring system, banking/deposit preparation and counting equipment, and a fiber-optic communication system. Enforcement Provisions. Under the Public Highway Act, the Authority is authorized to adopt, by resolution, regulations pertaining to the enforcement of toll collection and providing a civil penalty for toll evasion. The civil penalty for any toll evasion is authorized by the Public Highway Act to range from $10 to $250 per violation in addition to any costs imposed by a court. The Authority is authorized to use state of the art technology, including, but not limited to, automatic vehicle identification photography, to aid in the collection of tolls and enforcement of toll violations. In addition, the Public Highway Act authorizes State and local law enforcement authorities to enter into traffic and toll enforcement agreements with the Authority. To date, the Authority has put in place and is collecting fines utilizing both toll enforcement by the Colorado State Patrol and its statutory ability to mail violation citations. The Authority currently imposes a $70 fine plus costs for all violations. Amounts received for toll violations are payable to the Authority. -62-

68 In cooperation with the Colorado Judicial Branch, the Authority, in 2005, requested legislation in the Colorado General Assembly empowering public highway authorities to remove toll violation prosecutions from County Courts and to establish and operate administrative law proceedings for the enforcement of toll violations. After passage of the requested statute and commencing in 2006, the Authority has operated an administrative law system for adjudicating toll violations and, as appropriate, imposing fines on violators. At the Authority's request, the legislature also increased the maximum toll violation penalty on Colorado public highways to $250. The Authority has retained a collection service to pursue all unpaid violation fines and costs. Recent Activities of the Authority Resources of the Authority have been allocated to marketing of and business development for the E-470 Toll Road, including expansion of the Authority's EXpressToll system. The Authority is an active member of the Southeast Business Partnership, the DIA Business Partnership, and a number of chambers of commerce and economic development agencies. The Authority has won a number of awards relating to its work on the E-470 Toll Road, including among others, the Colorado Asphalt Paving Association's "Best in Colorado" Asphalt Paving Award (120 th Avenue to Parker Road), in 1999 and Segment IV in 2003, the National Asphalt Pavement Association's Quality in Construction Award for 1999 and 2004, and the Best Portland Cement Award for Segment IV in The Authority has also been recognized with toll innovation awards from the International Bridge Tunnel and Turnpike Association, and in 2006 received the first Design-Build Institute of America Owners Award. In September, 2006, the Authority received the International Bridge Tunnel and Turnpike Association s Toll Excellence Award for Customer Service for its use of business analytics. The Authority has developed the courtesy patrol program to assist motorists using the E-470 Toll Road, and has been involved in leasing sites for cell towers adjacent to the E-470 Toll Road. The Authority has entered into a program with the Colorado Department of Transportation to connect the two agency's fiber optic networks to create redundant fiber optic corridors. See "THE AUTHORITY Financial Information Concerning the Authority Capital Improvement Plan." In April 2004, the Authority defeased $9,480,622 notes payable to Commerce City and the other intergovernmental agreements with the Authority's Member Governments. Additionally in June 2004 the Authority paid in full its loan in the amount of $14,400,000 from the CDOT. The Authority maintains its web site at Other than the Comprehensive Toll Revenue Study, which is available through the Authority s website and is incorporated by reference herein, the information provided on the Authority s web site is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2007 Bonds. Although the Authority has prepared the information on its website for the convenience of those seeking information regarding the Authority, no decision in reliance upon such information should be made. Typographical or other errors may have occurred in converting the original source documents to their digital format, and the Authority assumes no liability or responsibility for errors or omissions contained on its website. Further, the Authority disclaims any duty or obligation to update or maintain the availability of the information contained on the website or any responsibility or liability for any damages caused by viruses contained within the electronic files on the website. The Authority also assumes no liability or responsibility for any errors or omissions or for any updates to dated information contained on the website. -63-

69 FORWARD-LOOKING STATEMENTS This Official Statement, and particularly the information contained under the captions "THE REFINANCING PLAN" and "THE TOLL REVENUE STUDY" and in Appendix C contain statements relating to future results that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of When used in this Official Statement, the words "anticipate," "assume," "estimate," "projection," "plan," "budget," "forecast," "intend," and similar expressions identify forward-looking statements. The words or phrases "to date," "now," "currently," and the like are intended to mean as of the date of this Official Statement. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. As noted in the Toll Revenue Study, any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. For a discussion of certain of such risks and possible variations in results, see the information under "INVESTMENT CONSIDERATIONS" and in Appendix C hereto. THE TOLL REVENUE STUDY The Traffic and Revenue Consultant was retained by the Authority to prepare the Comprehensive Toll Revenue Study dated October, 2005 that projects the future traffic volume on the E-470 Toll Road and future toll revenues. The Traffic and Revenue Consultant also prepared the Toll Revenue Study Summary Report, which is a condensed version of the Comprehensive Toll Revenue Study, and is included herein as Appendix C. The Comprehensive Toll Revenue Study is not included in this Official Statement but is available through the Authority s website at and is incorporated by reference herein. The Toll Revenue Study Summary Report has not been updated in connection with the issuance of the Series 2007 Bonds. The Traffic and Revenue Consultant did, however, prepare the 2006 Letter of the Traffic and Revenue Consultant dated August 22, 2006 in connection with the issuance of the Series 2006A Bonds and Series 2006B Bonds, which is included in Appendix C. In addition, the Traffic and Revenue Consultant prepared the 2007 Letter of the Traffic and Revenue Consultant dated May 25, 2007, also included in Appendix C. The Comprehensive Toll Revenue Study, the Toll Revenue Study Summary Report, the 2006 Letter of the Traffic and Revenue Consultant, and the 2007 Letter of the Traffic and Revenue Consultant defined together as the "Toll Revenue Study" must be read in its entirety for an understanding of the assumptions and rationale underlying the toll revenue projections contained therein and in "THE REFINANCING PLAN". The Toll Revenue Study was performed by Wilbur Smith Associates, the Traffic and Revenue Consultant, in conjunction with Economic & Planning Systems, Felsburg, Holt & Ullevig, and Public Finance Associates, all of whom assisted in the efforts of the Traffic and Revenue Consultant as described in the Toll Revenue Study. The Toll Revenue Study includes a description of the E-470 Toll Road, as well as certain historical data regarding traffic and revenue on the E-470 Toll Road. The remainder of the Toll Revenue Study discusses the Traffic and Revenue Consultant's methodology in creating the traffic model used to generate the traffic and revenue forecasts included in the Toll Revenue Study, including the data and assumptions used in that model. It is essential that prospective investors read and understand the Toll Revenue Study in its entirety in order to understand the basis for the -64-

70 Toll Revenue Study's projections of Revenues for the E-470 Toll Road. The Toll Revenue Study relies on numerous explicit and implicit assumptions, including but not limited to the assumptions discussed under the heading "Toll Rates and Toll Sensitivity." Prospective investors should carefully consider the reasonableness of the explicit and implicit assumptions in the Toll Revenue Study. Actual Revenues generated by the E-470 Toll Road have varied and likely will continue to vary, perhaps significantly, from the Revenue projections included in the Toll Revenue Study. See "FORWARD-LOOKING STATEMENTS." LITIGATION There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the Authority, threatened against or affecting the Authority or, to its knowledge, any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the operations or properties of the Authority, the transactions contemplated by this Official Statement or the validity of the Series 2007 Bonds, the Resolutions or any agreement or instrument to which the Authority is a party and which is used or contemplated for use in the transactions contemplated by this Official Statement. CONSULTANTS The Authority has retained Wilbur Smith Associates to perform the Toll Revenue Study. Wilbur Smith Associates Toll Revenue Study Summary Report and Letter of the Traffic and Revenue Consultant is included herein as Appendix C of this Official Statement in reliance upon the knowledge and expertise of Wilbur Smith Associates. Piper Jaffray & Co., Denver Colorado, has acted as Financial Advisor to the Authority with respect to the issuance of the Series 2007 Bonds. VERIFICATION AGENT Causey Demgen & Moore Inc., an independent accounting firm, will verify from the information provided to them the mathematical accuracy as of the date of issuance of the Series 2007 Bonds of the computations contained in the provided schedules to determine that the anticipated receipts from the escrow investment will be sufficient to pay, when due, the principal, interest and redemption premium with respect to the Refunded Bonds to be refunded with the proceeds of the Series 2007 Bonds. No opinion will be expressed as to the assumptions provided to such firm, nor as to the exemption from taxation of the interest of the Series 2007 Bonds. See "THE REFINANCING PLAN Escrow Fund Verification of Mathematical Computations" herein. FINANCIAL STATEMENTS The audited financial statements of the Authority for the fiscal years ended December 31, 2006 and 2005, included herein at Appendix B, have been audited by KPMG LLP, independent certified public accountants. Generally TAX MATTERS In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2007 Bonds is excluded from gross income for -65-

71 federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinions described in the preceding sentence assume the accuracy of certain representations and compliance by the Authority with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Series 2007 Bonds. Failure to comply with such requirements could cause interest on the Series 2007 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2007 Bonds. The Authority has covenanted to comply with such requirements. Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2007 Bonds. Notwithstanding Bond Counsel's opinion that interest on the Series 2007 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporations' adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). The accrual or receipt of interest on the Series 2007 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2007 Bonds. The extent of these other tax consequences will depend upon such owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion regarding any such consequences. Purchasers of the Series 2007 Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Series 2007 Bonds. In the opinion of Bond Counsel, under existing Colorado statutes, the Series 2007 Bonds and the income therefrom are exempt from taxation, except inheritance, estate and transfer taxes, in Colorado. Bond Counsel has expressed no opinion regarding other tax consequences arising with respect to the Series 2007 Bonds under the laws of Colorado or any other state or jurisdiction. Changes in Federal and State Tax Law From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2007 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2007 Bonds. An example of such litigation is the case of Davis v. Kentucky Department of Revenue, 197 S.W.3d 557 (Ky. 2006), which the U.S. Supreme Court has agreed to review pursuant to a writ of certiorari granted on May 21, 2007, challenging Kentucky's taxation of bonds issued by other states and their political subdivisions differently than it taxes bonds issued by Kentucky and its political subdivisions. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation will be resolved, or whether the Series 2007 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2007 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by -66-

72 relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2007 Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. LEGAL MATTERS Certain legal matters incident to the issuance and sale of the Series 2007 Bonds and the tax treatment of interest on the Series 2007 Bonds are subject to the approving opinion of Kutak Rock LLP, a form of which is attached hereto as Appendix D. Kutak Rock LLP's participation in the review of this Official Statement has been limited as described in the form of opinion attached hereto as Appendix D. Certain legal matters will be passed upon for the Authority by its special counsel Hogan & Hartson L.L.P., Denver, Colorado, and its general counsel Icenogle, Norton, Smith and Blieszner, PC, Denver, Colorado, and for the Underwriters by Hawkins Delafield & Wood LLP, New York, New York. Certain legal matters will be passed upon for the Bond Insurer by Kutak Rock LLP. Certain fees of legal counsel are contingent upon the successful issuance and sale of the Series 2007 Bonds. RATINGS Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies ("S&P"), and Fitch, Inc. ("Fitch") have assigned the Series 2007 Bonds ratings of "Aaa," "AAA," and "AAA," respectively, based upon the issuance of the Bond Insurance Policy by the Bond Insurer. Moody's, S&P, and Fitch assigned underlying ratings on the Series 2007 Bonds of "Baa2," "BBB-," and "BBB-," respectively. Each rating reflects only the views of such rating agency. Any explanation of the significance of such rating may only be obtained from such rating agency. The Authority has furnished to the rating agencies certain information and materials relating to the Series 2007 Bonds and the E-470 Toll Road, including certain information and materials which have not been included in this Official Statement. There is no assurance that any of the ratings will continue for any given period of time, or that any of the ratings will not be revised downward or withdrawn entirely by any such rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of any such rating may have an adverse effect on the market price of the Series 2007 Bonds. The Authority and the Underwriters have undertaken no responsibility to oppose any such revision or withdrawal. UNDERWRITING The Underwriters have agreed to purchase the Series 2007 Bonds from the Authority pursuant to a Bond Purchase Agreement dated June 12, 2007 (the "Bond Purchase Agreement"), at a price equal to the aggregate of the principal amount of the Series 2007A Bonds, less an underwriter's discount of $1,693,360. The Underwriters are committed to take and pay for all of the Series 2007 Bonds if any are taken. The prices at which the Series 2007 Bonds are offered to the public (and the yields resulting therefrom) may vary from the initial public offering prices appearing on the inside cover of this Official Statement. In addition, the Underwriters may allow commissions or discounts from such initial offering prices to dealers and others. -67-

73 CONTINUING DISCLOSURE UNDERTAKING The Authority has covenanted, for the benefit of the owners of the Series 2007 Bonds, in a continuing disclosure undertaking executed in connection with the issuance and sale of the Series 2007 Bonds, to provide (i) certain financial information and operating data related to the Authority not later than 210 days after the end of each fiscal year, commencing with the fiscal year ended December 31, 2007 (the "Annual Financial Information"), (ii) the annual budget of the Authority adopted by the Board, within 30 days after the end of each fiscal year ("Annual Budget Information"), and (iii) notices of the occurrence of certain enumerated material events. The Annual Financial Information and Annual Budget Information will be filed or caused to be filed by the Authority or its designee for such purpose with each Nationally Recognized Municipal Securities Information Repository and each Colorado State Repository, if any. The notices of material events will be filed by the Authority or its designee for such purpose with the Municipal Securities Rulemaking Board and each Colorado State Repository, if any. See Appendix F for the form of the Authority's Continuing Disclosure Undertaking. The Authority has not failed to comply with any previous continuing disclosure undertaking. RELATIONSHIP OF PARTIES Kutak Rock LLP, Bond Counsel, also serves as special counsel to MBIA Insurance Corporation, the Bond Insurer for the Series 2007 Bonds, in connection with the issuance of the Series 2007 Bonds. Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Incorporated will act as both Underwriters and Broker-Dealers for the Series 2007 Bonds. Bear, Stearns & Co. Inc., Morgan Stanley & Co. Incorporated, and George K. Baum & Company will serve as Underwriters for the Series 2007 Bonds as well as swap counterparties to the Swap Agreements. U.S. Bank National Association will act as Trustee with respect to the Series 2007 Bonds. U.S. Bank National Association will also act as the Auction Agent with respect to the Series 2007 Bonds. TRUSTEE The Authority has appointed U.S. Bank National Association, a national banking association organized under the laws of the United States, to serve as Trustee, Registrar and Paying Agent for the Series 2007 Bonds. The Trustee is to carry out those duties assignable to it under the Resolutions. Except for the contents of this section, the Trustee has neither reviewed nor participated in the preparation of this Official Statement and does not assume any responsibility for the nature, completeness, contents or accuracy of the Official Statement. Furthermore, the Trustee has no oversight responsibility, and is not accountable, for the use or application by the Authority of any of the Series 2007 Bonds authenticated or delivered pursuant to the Resolutions or for the use or application of the proceeds of such Series 2007 Bonds by the Authority. The Trustee has not evaluated the risks, benefits or propriety of any investment in the Series 2007 Bonds and makes no representation, and has reached no conclusions regarding the value or condition of any assets pledged or assigned as security for the Series 2007 Bonds or the investment quality of the Series 2007 Bonds, about all of which the Trustee expresses no opinion and expressly disclaims the expertise to evaluate. Additional information about the Trustee and its services may be found at U.S. Bank National Association s website at usbank.com/corporatetrust. U.S. Bank National Association s website is not incorporated into this Official Statement by such reference and is not a part hereof. -68-

74 ADDITIONAL INFORMATION The description and summaries in this Official Statement of the Series 2007 Bonds, the Continuing Disclosure Undertaking, various agreements, statutes and other reports, documents and instruments do not purport to be complete, comprehensive or definitive, and each such description or summary is qualified in its entirety by reference to each such agreement, document, report, certificate, statute or instrument for a complete statement of its provisions. Copies of such agreements, documents, reports, certificates and other instruments generally are available upon written request to the Authority's Deputy Executive Director and Director of Finance and Audit at the Authority's offices at East 6 th Parkway, Aurora, Colorado 80018, telephone (303) The attached Appendices are integral parts of this Official Statement and should be read in their entirety. E-470 PUBLIC HIGHWAY AUTHORITY By: /s/ Edward J. Delozier Executive Director By: /s/ John D. McCuskey Deputy Executive Director and Director of Finance and Audit -69-

75 (THIS PAGE INTENTIONALLY LEFT BLANK)

76 APPENDIX A SUMMARY OF THE RESOLUTIONS Certain provisions of the Master Resolution, the First Supplemental Resolution, the Second Supplemental Resolution, the Third Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution and the Sixth Supplemental Resolution (collectively, the Resolutions ) are described in the body of this Official Statement under the captions THE SERIES 2007 BONDS and SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS and are not summarized in this Appendix A. Additionally, the Auction Procedures and certain provisions of the Sixth Supplemental Resolution related thereto, including the definitions of certain defined terms used in this Appendix A and in the body of the Official Statement, are set forth in Appendix H to this Official Statement. The summary of the Resolutions set forth below should be read in conjunction with the material in the body of this Official Statement under the captions THE SERIES 2007 BONDS and SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS and in Appendix H to this Official Statement. This summary, the Auction Procedures in Appendix H to this Official Statement and the descriptions in the body of this Official Statement under the captions THE SERIES 2007 BONDS and SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2007 BONDS are qualified in all respects by reference to the Resolutions, which contain complete descriptions of the terms of the contract between the Authority and the Bondowners, and which may vary in certain respects from this summary. Copies of the Resolutions are available from the Authority. Definitions The following are definitions of certain terms used in the Resolutions, and this Official Statement. Account or Accounts means any one or more of the accounts from time to time created in any of the Funds established by the Master Resolution or by any Supplemental Resolution. Accountant means any nationally recognized certified public accountant or firm of certified public accountants or accounting corporation of recognized experience and qualifications, selected by the Authority, and may be the accountant or firm of accountants that regularly audits the books of the Authority. Accountant s Certificate means a certificate or opinion signed by the Accountant. Accreted Value means the amount defined as such in a Supplemental Resolution for purposes of determining the Redemption Price of, rights of the Owner of or other matters with respect to a Capital Appreciation Bond. Accretion Date means any date defined as such in a Supplemental Resolution for purposes of determining the Accreted Value or Maturity Value of any Capital Appreciation Bond. Act means part 5 of article 4 of title 43, Colorado Revised Statutes, as amended, known and cited as the Public Highway Authority Law, as it may be amended from time to time. Aggregate Debt Service means, for any Fiscal Year or other 12-month period, as of the date of calculation, the sum of the amounts of Debt Service for such Fiscal Year or other 12-month period. Amortized Value means the value of an Investment Security calculated by adding the amount of the premium paid upon acquisition to the par value of the Investment Security or deducting the amount of the discount received upon acquisition from the par value of the Investment Security, as the case may be, after such premium or discount has been amortized according to Generally Accepted Accounting Principles for the number of days since the acquisition of the Investment Security. Applicable Portion of the Project means, with respect to each Series of Bonds, the portion of the Project defined as the Applicable Portion of the Project for such Series of Bonds in the Supplemental Resolution authorizing such Series of Bonds A-1

77 Authenticating Agent means any bank or trust company or national or state banking association designated to authenticate the Bonds of any Series on behalf of the Authority or the Trustee, and its successor or successors. Authority means the E-470 Public Highway Authority, a body corporate and political subdivision of the State created pursuant to the Act, and any political subdivision or other entity succeeding to the rights and obligations thereof under the Master Resolution. Authority Bond or Authority Bonds means any bond or bonds, as the case may be, authenticated and delivered under and pursuant to the Master Resolution. Authorized Authority Representative means (a) the Executive Director of the Authority; (b) the Director of Finance and Administration of the Authority; or (c) any other officer or employee of the Authority authorized by law or by resolution of the Board to act as an Authorized Authority Representative under the Master Resolution or any Supplemental Resolution or otherwise with respect to the Bonds or the Project. Authorized Denomination means (i) with respect to 2007 Bonds bearing interest at a Daily Rate or a Weekly Rate, $100,000 and any integral multiple of $5,000 in excess thereof, (ii) with respect to 2007 Bonds bearing a Term Rate or a Fixed Rate, $5,000 or any integral multiple thereof and (iii) with respect to 2007 Bonds bearing interest at an Auction Period Rate, $25,000 or any integral multiple thereof. Board means the board of directors of the Authority, or any successor in function. Bond means any Authority Bond. Bond Counsel means an attorney or firm of attorneys, selected by the Authority and acceptable to the Trustee and MBIA, whose experience in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized. Bond Obligation means (a) with respect to any Capital Appreciation Bond, the Accreted Value of such Capital Appreciation Bond as of the date on which the Bond Obligation is being determined; (b) with respect to any Bond that is not a Capital Appreciation Bond, the principal amount of such Bond; (c) with respect to all the Bonds together, the sum of the amounts determined as described in clauses (a) and (b) of this definition; and (d) the Bond Obligation of Parity Obligations for purposes of the Master Resolution shall be determined in a manner consistent with clauses (a) through (c) above, adjusted as determined by the Authority, with the written consent of MBIA (which consent shall not be unreasonably withheld), to be appropriate based on the characteristics of such Parity Obligations, which determination by the Authority shall be conclusive and binding on the Owners of all Bonds and the owners of all Parity Obligations; provided, however, that only Bonds or Parity Obligations that are Outstanding as of the date of determination shall be included in determining the Bond Obligation. Bondowner, Owner of Bonds or Owner means, when used with respect to Bonds, the registered owner of any Bond; and, when used with respect to Parity Obligations, the registered owner of such Parity Obligation. BSFP means Bear Stearns Financial Products Inc. and any successor thereto as counterparty under the BSFP Swap Agreement. BSFP Swap Agreement means the Related Financial Transaction consisting of, collectively, the ISDA Master Agreement and the Schedule thereto and Confirmation relating thereto between the Authority and BSFP. Business Day means any day other than a Saturday, Sunday or other day on which The New York Stock Exchange or banks are authorized or required to close in New York, New York or Denver, Colorado. Capital Appreciation Bond means any Authority Bond on which interest is not due prior to maturity. Capitalized Interest Account means the account established and designated as such in the First Supplemental Resolution. Capitalized Interest Account Requirement means the amount required to be on deposit from time to time in the Capitalized Interest Account pursuant to the First Supplemental Resolution A-2

78 Code means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations proposed or in effect with respect thereto. Completion Date means, when used with respect to any portion of the Project, the date of completion of the construction of such portion of the Project; and, when used with respect to the entire Project, the date of completion of construction of the entire Project, in either case as such date shall be certified in the manner provided in the Master Resolution. Construction Fund means the E-470 Public Highway Authority Revenue Bond Construction Fund established by the Master Resolution, and includes any separate Accounts or Subaccounts established by the terms of any Supplemental Resolution or any agreement pursuant thereto. Consultant means any Person at the time retained by or on behalf of the Authority (or, to the extent specifically provided in the Master Resolution or in any Supplemental Resolution, by or on behalf of the Trustee) to carry out the duties imposed by or pursuant to the Master Resolution or a Supplemental Resolution, which Person is not an employee of the Authority and is experienced and has a national and favorable reputation in the matters for which such Person is so employed. Consulting Engineer means any Consultant with expertise in engineering. Current Interest Bond means a Bond on which interest is payable on Interest Payment Dates prior to maturity or redemption prior to maturity. Costs or Costs of the Project means all costs of acquisition, construction and improvement of the Project, as determined by the Authority, including, without limitation, any of the following that are authorized by the Act and determined by the Authority to be included within this definition: (a) contractors fees and charges, the cost of labor, services, materials and supplies used or furnished in site improvement and construction, training and testing costs, the cost of purchasing machinery, equipment, facilities, rolling stock and ancillary items, and the cost of utility services; (b) the cost of acquiring by purchase, and the amount of any deposit in court or award or final judgment in, or any settlement or compromise of, any proceeding to acquire by eminent domain, such lands, property, property rights, rights of way, easements, franchises and other interests as may be deemed necessary or convenient, options and partial payments thereon, the cost of demolishing or removing or relocating any buildings or structures or land so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved, and the amount of any incident or consequent damages; (c) the costs of preparing surveys, cost estimates, appraisals, plans and specifications (including any preliminary study or planning or any aspect thereof), fees for architectural, engineering, supervisory and consulting services, planning and development costs, the costs of obtaining governmental or regulatory permits, licenses, franchises and approvals, and any other fees or expenses necessary to establishing feasibility or practicability; (d) Operating Expenses and amounts required to be deposited to the Operating Reserve Fund and the Renewal and Replacement Fund; (e) to the extent not paid by the contractor, premiums of all insurance and surety and payment bonds required to be maintained, all claims and expenses relating to injury and damage, and casualty and liability insurance premiums in connection with insurance against loss from such claims; (f) all federal, state and local taxes and payments in lieu of taxes legally required, or deemed advisable by the Authority; (g) interest to accrue on the Bonds; (h) to the extent provided by Supplemental Resolution, any amount otherwise required to pay principal, Redemption Price of or interest on any Bonds; A-3

79 (i) any amount required to fund or maintain the Debt Service Reserve Fund; (j) repayment of all temporary borrowings incurred by or on behalf of, or advances made by or on behalf of, the Authority or the Member Governments in connection with the Project; (k) Costs of Issuance, to the extent not otherwise described in this definition; (l) amounts sufficient to purchase Bonds that are held by any contractor that is providing or has provided services with respect to the Project; (m) all items of expense relating to any guarantee, letter of credit, line of credit, standby purchase agreement, bond insurance policy, financial guaranty insurance policy or Related Financial Transaction, to the extent not otherwise described in this definition; (n) all amounts payable by the Authority under the Design/Build Contract and any other contract, agreement or other arrangement relating to the acquisition, construction or improvement of the Project; and (o) all other costs and expenses relating to the acquisition, construction or improvement of the Project, including, but not limited to, costs of environmental mitigation. Costs of Issuance means the items of expense relating to the authorization, sale and issuance of Bonds, which items of expense may include, without limitation: travel expenses; printing costs; costs of reproducing documents; computer fees and expenses; filing and recording fees; initial fees and charges of the Trustee, Registrar, Paying Agent, and other Fiduciaries; initial fees and charges of banks, insurers or other parties pursuant to guarantees, letters of credit, lines of credit, standby purchase agreements, bond insurance policies, financial guaranty insurance policies and Related Financial Transactions; bond discounts; fees and expenses of underwriters; fees and expenses of financial advisors; legal fees and charges; consulting fees and charges; auditing fees and expense; financial advisor s fees and charges; costs of credit ratings; insurance premiums; fees and charges for the execution, transportation and safekeeping of Bonds; and any other administrative or other costs of issuing, carrying and repaying such Bonds and investing the Bond proceeds. Credit Facility means any credit facility securing a Series of Bonds, including without limitation any letter of credit, committed line of credit, insurance policy (including the MBIA Insurance Policy), surety bond, standby bond purchase agreement or any other similar instrument, which provides for payment of (or provides liquidity for the payment of) all or any portion of the principal, Purchase Price and Redemption Price of and interest or premium on Bonds as and when due and payable. References to Credit Facility with respect to any Series of Bonds shall be ineffective when such Bonds are not supported by a Credit Facility. Debt Service means, with respect to any particular Fiscal Year or other 12-month period, and as of any calculation date, an amount equal to the sum of (a) all principal of and interest on all Outstanding Bonds that is payable during such period; (b) the Redemption Price of Outstanding Bonds payable during such period with respect to any Outstanding Bonds that are to be redeemed during such period pursuant to mandatory redemption provisions or pursuant to optional redemption provisions that have been exercised by the Authority as of the calculation date; and (c) the amount that is or would be due by the Authority under any Governmental Loan Agreement in such period if the Authority were to appropriate the full amount so due in such period. For purposes of this definition: (a) Debt Service shall not include (i) the principal and Redemption Price of and interest on Outstanding Bonds to the extent the same is to be paid from proceeds of Bonds or Parity Obligations or other funds held by the Trustee or an escrow agent for the benefit of the Owners of Outstanding Bonds and investment earnings on such proceeds or other funds or (ii) amounts due or that would be due under any Governmental Loan Agreement to the extent the same is to be paid from proceeds of Bonds or Parity Obligations or other funds held by the Trustee or an escrow agent for the purpose of paying such amounts and investment earnings on such proceeds or other funds. (b) Future Debt Service for any Series of Bonds which bears interest at variable rates or which will at some future date be subject to conversion to an interest rate or interest rate mode such that future interest payments cannot, as of the calculation date, be definitely ascertained shall be equal to (i) if such Bonds (or, if A-4

80 not, if other Bonds of the same Tier) bore interest at an interest rate determined in the same manner during the 36-month period preceding the calculation date, the average interest rate borne by such Bonds (or such other Bonds) during such 36-month period; or (ii) if clause (i) does not apply, the lesser of (A) 8% per annum or (B) 110% of the rate as of the calculation date (or most recent preceding date if such rate is not published for such date) under the Bond Market Association Municipal Swap Index (produced by Municipal Market Data) applicable to comparable obligations. If there is no Bond Market Association Municipal Swap Index for comparable obligations, the calculation under clause (ii)(b) shall be based on an extrapolation from the Bond Market Association Municipal Swap Index or Indices for other obligations in the manner specified in a certificate of a Consultant. If the Bond Market Association Municipal Swap Index is no longer published, the calculations as described in clause (ii)(b) may be based on another index certified by a Consultant to be comparable to the Bond Market Association Municipal Swap Index. (c) Interest paid and payable on Bonds with respect to which a Related Financial Transaction is in effect shall be determined by taking into account (in a manner that does not result in the duplication of payment requirements): (i) regularly scheduled payments due pursuant to such transaction so long as no failure to pay or event of default under such transaction has occurred and is continuing and (ii) upon termination of such transaction (by reason of an event of default or otherwise), amounts actually paid with respect to the termination of such transaction; provided, however, with respect to the Series 2001 Bonds, only amounts paid by the Authority to the provider of a Related Financial Transaction with respect to such Bonds (other than any Termination Payments) shall be taken into account in determining interest payable on such Bonds. Debt Service Fund means the E-470 Public Highway Authority Revenue Bond Debt Service Fund established by the Master Resolution. Debt Service Reserve Fund means the E-470 Public Highway Authority Revenue Bond Debt Service Reserve Fund established by the Master Resolution. Debt Service Reserve Fund Requirement means the amount required to be maintained in the Debt Service Reserve Fund by any Supplemental Resolution, calculated in the manner and times as set forth in the Master Resolution and any Supplemental Resolution. Defeasance Investment Securities means any one or more of the following: (a) Cash; (b) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series --- SLGs ); (c) Direct obligations of the United States Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities; (d) The interest component of Resolution Funding Corp. (REFCORP) strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form; (e) Pre-refunded municipal bonds which, when acquired, are rated Aaa by Moody s and AAA by S&P, except that, if the bonds are only rated by S&P (i.e., there is no Moody s rating), then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations or pre-refunded municipals rated AAA by S&P to satisfy this condition; (f) Obligations issued by the following agencies which are backed by the full faith and credit of the United States: (i) U.S. Export-Import Bank (Eximbank): direct obligations or fully guaranteed certificates of beneficial ownership (ii) (iii) Farmers Home Administration (FmHA): certificates of beneficial ownership Federal Financing Bank A-5

81 (iv) (v) General Services Administration: participation certificates U.S. Maritime Administration: guaranteed Title XI financing (vi) U.S. Department of Housing and Urban Development (HUD): Project Notes; Local Authority Bonds; New Communities Debentures U.S. government guaranteed debentures; and U.S. Public Housing Notes and Bonds U.S. government guaranteed public housing notes and bonds. (g) Investment agreements that are (i) issued, guaranteed or insured by an entity the long-term obligations or claims paying ability of which, when the agreement is entered into, is rated Aaa by Moody s and AAA by S&P and (ii) approved in writing by MBIA. Depository means any bank, trust company, national banking association, savings and loan association, savings bank or other banking institution or association selected by the Authority as a depository (to the extent permitted by the laws of the State) of moneys and securities held under the provisions of the Master Resolution and the Act, and may include the Trustee. Design/Build Contract means the design, engineering and construction contract dated as of July 6, 1995, as amended, between the Authority and Platte River Constructors, Ltd., an Ohio limited liability company, and the design, engineering and construction contract dated as of January 27, 2000, as amended, between the Authority and MKK Constructors, a Colorado joint venture. DTC Bonds means bonds issued in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York in accordance with the Master Resolution. Establishing Contract means the contract dated January 13, 1988 establishing the Authority, as the same has been and may be amended from time to time. Event of Default means the events described under the caption Defaults and Remedies Events of Default in this Appendix A. Fair Market Value means, as of any particular time: (a) as to Investment Securities the bid and asked prices of which are published on a regular basis in a financial journal or publication of general circulation in the United States of America, the bid price for such Investment Securities so published on or most recently prior to the date of valuation by the Trustee, or (b) as to Investment Securities the bid and asked prices of which are not published on a regular basis in a financial journal or publication of general circulation in the United States of America, the average bid price for such Investment Securities at the date of valuation by the Trustee, as reported to the Trustee by any two nationally recognized dealers in such Investment Securities. The Fair Market Value of Investment Securities that are subject to a put exercisable by the Authority or the Trustee shall be equal to the greater of the Fair Market Value of such Investment Securities as determined under clause (a) or (b) above and the price at which such Investment Securities may be put to a third party. The Fair Market Value of Investment Securities that are subject to a call exercisable by a third party shall be equal to the lesser of the Fair Market Value of such Investment Securities as determined under clause (a) or (b) above and the price at which such Investment Securities may be called by such third party. Fiduciary or Fiduciaries means the Trustee, the Registrar, the Paying Agent, and any remarketing, tender, escrow, indexing, authenticating or other agent of the Authority or of any other Fiduciary, or any or all of them, as the context may require. Fifth Supplemental Resolution means the Fifth Supplemental Bond Resolution adopted by the Board on August 24, 2006, as it may be amended from time to time in accordance with its terms. Financial Transaction means any rate swap transaction, basis swap, cap transaction, floor transaction, collar transaction; any other Transaction as defined in the 1992 U.S. Municipal Counterparty Definitions published by the International Swap Dealers Association, Inc. or any amendments to or subsequent editions of such Definitions or any similar transaction (regardless of how defined) permitted under any such amendments to or more recent editions of such Definitions or of any similar publications of such association or any similar organization; any transactions similar to any of the foregoing; or any combination of any of the transactions described in this definition A-6

82 First Supplemental Resolution means Resolution No , adopted by the Board on August 14, 1997, as amended by the Second Supplemental Resolution, the Third Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution and the Sixth Supplemental Resolution and as it may be further amended from time to time in accordance with its terms and the terms of the Master Resolution. First Tier Subordinate Bonds means any Bonds designated as First Tier Subordinate Bonds by Supplemental Resolution. First Tier Subordinate Bonds Debt Service Account means the First Tier Subordinate Bonds Debt Service Account of the Debt Service Fund established by the Master Resolution. First Tier Subordinate Bonds Debt Service Reserve Account means the First Tier Subordinate Bonds Debt Service Reserve Account of the Debt Service Reserve Fund established by the Master Resolution. First Tier Subordinate Bonds Debt Service Reserve Account Requirement means the amount required to be maintained in the First Tier Subordinate Bonds Debt Service Reserve Account by any Supplemental Resolution, calculated in the manner and times as set forth in the Master Resolution and any Supplemental Resolution. Fiscal Year means the fiscal year of the Authority, currently the 12-month period ending December 31. Fourth Supplemental Resolution means Resolution No , adopted by the Board on December 9, 2004, as it may be amended from time to time in accordance with its terms. Fund or Funds means any one or more, as the case may be, of the separate special funds established by the Master Resolution or by any Supplemental Resolution. General Surplus Account means the General Surplus Account of the Surplus Fund established by the Master Resolution. Generally Accepted Accounting Principles means such accepted accounting practice as, in the opinion of the Accountant, conforms at the time to a body of generally accepted accounting principles. GKB means GKB Financial Services Corporation II and any successor thereto as counterparty under the GKB Swap Agreement (other than Societe Generale pursuant to the Replacement Swap Undertaking). GKB Swap Agreement means the Related Financial Transaction consisting of, collectively, (a) the ISDA Master Agreement and the Schedule thereto and the Confirmation relating thereto among the Authority, GKB and Societe Generale, (b) the Replacement Swap Undertaking relating thereto, and (c) any ISDA Master Agreement, Schedule thereto, and Confirmation relating thereto between the Authority and Societe Generale resulting from the operation of the Replacement Swap Undertaking. Governmental Lenders means the State, acting by and through the Department of Transportation, and the cities and counties that are parties to Governmental Loan Agreements. Governmental Loan Agreements means the agreements between the Authority and each of the Governmental Lenders. Governmental Loan Repayments means any amount paid to the Governmental Lenders by the Authority pursuant to the Governmental Loan Agreements. Independent Certified Public Accounting Firm means a licensed certified public accounting firm that carries errors and omissions insurance, acting at arms-length of the transaction on behalf of the Owners that is not the underwriter, Bond Counsel or the financial adviser for a refunding issue. Insured Termination Payments means Termination Payments which are guaranteed pursuant to the 2001 Swap Insurance Policy, the 2007 Swap Insurance Policies or any similar insurance policy issued by MBIA guaranteeing payments by the Authority payable pursuant to a Related Financial Transaction A-7

83 Interest Payment Date, when used with respect to the 2007 Auction Rate Bonds, has the meaning set forth in Appendix H to this Official Statement. Investment Security or Investment Securities means any one or more of the following: (a) Direct obligations of the United States of America (including obligations issued or held in bookentry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): U.S. Export-Import Bank (Eximbank); Farmers Home Administration (FmHA); Federal Financing Bank; Federal Housing Administration (FHA); General Services Administration; Government National Mortgage Association; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (HUD). (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself): Federal Home Loan Bank System; Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac ); Federal National Mortgage Association (FNMA or Fannie Mae ); Resolution Funding Corp. (REFCORP); Farm Credit System. (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G, AAA-m or AA-m and if rated by Moody s rated Aaa, Aa1 or Aa2. (e) Certificates of deposit secured at all times by collateral described in paragraph (a) and/or (b) of this definition. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF. (g) Investment Agreements, including GIC s, Forward Purchase Agreements and Reserve Fund Put Agreements acceptable to MBIA. S&P. (h) Commercial paper rated, at the time of purchase, Prime - 1 by Moody s and A-1 or better by (i) Bonds or notes issued by any state or municipality which are rated by Moody s and S&P in one of the two highest rating categories assigned by such agencies. (j) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of Prime - 1 or A3 or better by Moody s and A-1 or A or better by S&P. (k) Repurchase Agreements ( repos ) for 30 days or less must follow the following criteria. Repurchase Agreements which exceed 30 days must be acceptable to MBIA. Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Authority (buyer/lender), and the transfer of cash from the Authority to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Authority in exchange for the securities at a specified date. (i) Repos must be between the Authority and a dealer bank or securities firm which are: (A) Primary dealers on the Federal Reserve reporting dealer list which are rated A or better by S&P and Moody s, or A-8

84 (B) Banks rated A or above by S&P and Moody s. (ii) The written repo contract must include the following: (A) Securities which are acceptable for transfer are: (1) Direct U.S. governments, or (2) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FHLMC). (B) The term of the repo may be up to 30 days. (C) The collateral must be delivered to the Authority, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). (D) Valuation of Collateral. The securities must be valued weekly, marked-to-market at current market price plus accrued interest. The value of collateral must be equal to 104% of the amount of cash transferred by the Authority to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%. (iii) Legal opinion which must be delivered to the municipal entity: Repo meet guidelines under state law of legal investment of public funds. (l) The securities held in the Senior Bonds Debt Service Reserve Account. (m) Any security or other investment approved by MBIA in writing. (n) Any State-administered pool investment fund in which the Authority is statutorily permitted or required to invest. Letter of Instructions means a written directive and authorization executed by an Authorized Authority Representative. Liquidity Facility means any letter of credit, committed line of credit, standby bond purchase agreement or any other similar instrument acceptable to MBIA which requires the Liquidity Provider to purchase the Bonds to which such Liquidity Facility applies upon any optional or mandatory tender of such Bonds made in accordance with the terms of the related Supplemental Resolutions(s), but which does not guarantee the payment of the principal of or interest on such Bonds. Liquidity Provider means the provider of any Liquidity Facility, and any successor thereto acceptable to MBIA as provider thereof. Master Resolution means Resolution No , adopted by the Board on August 14, 1997, as amended by the First Supplemental Resolution, the Second Supplemental Resolution, the Third Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution and the Sixth Supplemental Resolution and as it may be further amended from time to time in accordance with its terms. Maturity Value means the amount defined as such in a Supplemental Resolution for purposes of determining the amount payable to the Owner of a Capital Appreciation Bond at the maturity of such Capital Appreciation Bond A-9

85 References herein and in the First Supplemental Resolution to principal of Bonds shall include the Maturity Value of Capital Appreciation Bonds; provided, however, that the Accreted Value shall be used instead of the principal amount of Capital Appreciation Bonds in determining the Redemption Price of Capital Appreciation Bonds and in determining the Bond Obligation. MBIA means MBIA Insurance Corporation and its successors and assigns. References to MBIA shall be ineffective when none of the Bonds are insured by the MBIA Insurance Policy and MBIA has been reimbursed in full for any payments made under the MBIA Insurance Policy. MBIA Insurance Policy means, with respect to each Series of MBIA Insured Bonds, the Financial Guaranty Insurance Policy or Policies by which MBIA insures the principal of and interest on the MBIA Insured Bonds when due. References to MBIA Insurance Policy with respect to any Series of Bonds shall be ineffective when such Bonds are not insured by the MBIA Insurance Policy. MBIA Insured Bonds means (a) the 1997 Bonds; (b) the Series 2000A Bonds; (c) the Series 2000B Bonds maturing in 2006, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2027, 2028, 2029, 2030, 2031, 2032 and 2033; (d) the 2001 Bonds; (e) the 2004 Bonds, (f) the 2006 Bonds and (g) the 2007 Bonds. MSCS means Morgan Stanley Capital Services Inc. and any successor thereto as counterparty under the MSCS Swap Agreement. MSCS Swap Agreement means the Related Financial Transaction consisting of, collectively, the ISDA Master Agreement and the Schedule thereto and Confirmation relating thereto between the Authority and MSCS. Member Governments means the members of the Authority. Miscellaneous Swap Payments means amounts paid or received by the Authority pursuant to a Related Financial Transaction which do not represent Regularly Scheduled Swap Payments or Termination Payments. Moody s means Moody s Investors Service Inc., its successors and assigns, and, if Moody s Investors Service, Inc. shall for any reason no longer perform the functions of a securities rating agency, Moody s shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority and approved in writing by MBIA. NRMSIR means a nationally recognized municipal securities information repository, as recognized from time to time by the Securities and Exchange Commission by no-action letter for the purposes referred to in Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. Net Revenues means, for any Fiscal Year or other period of time, the Revenues received in such Fiscal Year or other period of time less the Operating Expenses incurred in such Fiscal Year or other period of time Bonds means the E-470 Public Highway Authority, acting as assignee and delegatee of Arapahoe County, Colorado, Capital Improvement Trust Fund Revenue Bonds (E-470 Project), Series 1986A-M Vehicle Registration Fee Bonds means the 1986 Bonds designated as Vehicle Registration Fee Bonds in Resolution No Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 1997A and Series 1997B Senior Bonds Capitalized Interest Subaccount means the subaccount within the Capitalized Interest Account established and designated as such in the First Supplemental Resolution Senior Bonds Subaccount of the Project Account means the subaccount within the Project Account established and designated as such by the Second Supplemental Resolution A-10

86 1997 Senior Bonds Capitalized Interest Subaccount Requirement means the amount required to be deposited in the 1997 Senior Bonds Capitalized Interest Subaccount by the First Supplemental Resolution calculated in the manner and times set forth therein. Operating Expenses means expenses for operation, maintenance, repairs, ordinary replacement and ordinary reconstruction of the Project, ordinary acquisition of equipment, and any other current expenses or obligations required to be paid by the Authority, the Member Governments or any other Person, under or pursuant to the provisions of the Master Resolution, any Supplemental Resolution, the Establishing Contract or any other agreement between or among the Authority and any other Person or Persons, or by law, all to the extent properly and directly attributable to the operation of the Project, but not any costs or expenses for new construction or any allowance for depreciation and not any payments or expenses relating to Related Financial Transactions. Operating Expenses may include, without limitation (but subject to the preceding sentence, including but not limited to the condition that such expenses are properly and directly attributable to the operation of the Project): (a) salaries, supplies, utilities, labor and rent; (b) fees and expenses for data processing, policing, insurance, legal, accounting, engineering, Fiduciaries, letters of credit and Credit Facilities, consulting and banking services, and Financial Transactions that are not Related Financial Transactions; (c) Costs of Issuance not paid as a Cost of the Project; (d) payments to pension, retirement, health and hospitalization funds for Authority employees; and (e) all obligations of the Authority as of the date of issuance of the 1997 Bonds that are classified as long-term debt in the Authority s audited financial statements for the fiscal year ended December 31, Such expenses do not include (i) costs of collection of Vehicle Registration Fees retained by any county or other person that collects Vehicle Registration Fees on behalf of the Authority or (ii) any amounts payable pursuant to a judgment, court order or settlement of any legal proceeding. Operating Reserve Fund means the E-470 Public Highway Authority Revenue Bond Operating Reserve Fund established by the Master Resolution. Operating Reserve Fund Requirement means an amount equal to one-sixth of budgeted Operating Expenses, as determined by the Authority, for the current Fiscal Year. Outstanding or outstanding means, with respect to any Bonds or Parity Obligations as of any date, Bonds or Parity Obligations theretofore or thereupon being authenticated and delivered under the Master Resolution or Parity Obligation Instruments except: (a) Bonds or Parity Obligations canceled or delivered for cancellation at or prior to such date; (b) Bonds or Parity Obligations in lieu of or in substitution for which other Bonds or Parity Obligations shall have been authenticated and delivered pursuant to the Master Resolution or Parity Obligation Instruments; (c) Bonds or Parity Obligations deemed to have been paid, redeemed, purchased or defeased as provided in the Master Resolution, in any Supplemental Resolution or in any Parity Obligation Instrument, as applicable, or as provided by law; and (d) Bonds held by the Authority. Parity Obligation Instruments means the resolutions, indentures, contracts or other instruments pursuant to which Parity Obligations are issued or incurred. Parity Obligations means any debt or financial obligations of the Authority (other than the Bonds) that have a lien on the Revenues on a parity with the lien of any Tier of Bonds under and as permitted by the Master Resolution. Paying Agent means, with respect to the 2007 Bonds, U.S. Bank National Association, and its successors in such capacity. Person means any individual, public or private corporation, county, district, authority, municipality, political subdivision or other entity of the State or the United States of America, and any partnership, association, firm, trust, estate, or any other entity whatsoever. Principal Installment means as of any particular date of calculation and with respect to Bonds of a particular Series, an amount of money equal to the aggregate of (a) the principal amount of Outstanding Bonds of such Series which A-11

87 mature on a single future date, reduced by the aggregate principal amount of such Outstanding Bonds of such Series which would at or before said future date be retired as a result of Sinking Fund Installments applied in accordance with the Master Resolution or a Supplemental Resolution plus (b) the amount of any Sinking Fund Installment payable on said future date for the retirement of any Outstanding Bonds of such Series. Project means all of the right, title and interest (whether such interest is fee, easement, leasehold, contractual or otherwise) of the Authority or any other Person in and to the public highway and other property and improvements that the Authority is authorized to finance, construct, operate and maintain under the Establishing Contract and the Act; provided, however, that Special Projects shall not be deemed to be part of the Project. Project Account means the account within the Construction Fund established and designated as such in the First Supplemental Resolution. Purchase Date means the date of an optional or mandatory tender of any Series of Bonds, subject to such optimal or mandatory tender, as appropriate, pursuant to the provisions of a Supplemental Resolution. Purchase Price means an amount equal to 100% of the principal amount of Bonds to be purchased on a Purchase Date pursuant to a Supplemental Resolution, plus all accrued and unpaid interest thereon to the Purchase Date. Rating Agency means any one or more, as the context may require, of the following that as of the date of applying this definition maintain a rating on the Bonds: Fitch, Moody s and S&P. Rebate Fund means the E-470 Public Highway Authority Revenue Bond Rebate Fund established by the Master Resolution, and includes any separate accounts or subaccounts established by the terms of any Supplemental Resolutions or any agreement pursuant thereto. Record Date, when used with respect to the 2007 Auction Rate Bonds, has the meaning set forth in Appendix H to this Official Statement. Redemption Date means the date upon which any Bonds are to be redeemed prior to their respective fixed maturities pursuant to the mandatory or optional redemption provisions of any Supplemental Resolution. Redemption Price means, with respect to any Bond, the amount, including any applicable premium, payable upon the mandatory or optional redemption thereof, as provided in any Supplemental Resolution. Refunded Bonds means all of the Outstanding Series 1997A Bonds that are subject to the redemption at the option of the Authority on September 1, Refunding Bonds means all Authority Bonds, whether issued in one or more Series, issued for the purpose of refunding a like or different principal amount of Bonds, and hereafter authenticated and delivered pursuant to the Master Resolution. Refunding Revenue Securities Law means the Refunding Revenue Securities Law, title 11, article 54, Colorado Revised Statutes, as amended. Bonds. Register means the register maintained by the Registrar for each Series of Bonds which shows ownership of Registrar means, with respect to the 2007 Bonds, U.S. Bank National Association, and its successors in such capacity. Regularly Scheduled Swap Payments means the payments to be paid or received pursuant to a Related Financial Transaction which are scheduled to generally correspond in time to the Interest Payment Dates on the related Series of Bonds. Reimbursement Agreement means, collectively, the Reimbursement Agreement between the Authority and MBIA relating to the financial guaranty insurance policy insuring the principal of and interest when due on the 2000 Bonds that are MBIA Insured Bonds, as such agreement is amended and supplemented in accordance with its terms; A-12

88 the Reimbursement Agreement between the Authority and MBIA relating to the 2001 Bond Insurance Policy and the 2001 Swap Insurance Policy, as such agreement is amended and supplemented in accordance with its terms; the Reimbursement Agreement among the Authority, the Trustee and MBIA relating to the financial guaranty insurance policy insuring the principal of and interest when due on the 2006 Bonds, as such agreement is amended and supplemented in accordance with its terms; and the Reimbursement Agreement among the Authority, the Trustee and MBIA relating to the financial guaranty insurance policy insuring the principal of and interest when due on the 2007 Bonds and the 2007 Swap Insurance Policies, as such agreement is amended and supplemented in accordance with its terms. Related Financial Transaction means, with respect to any Series of Bonds, including any Series of Bonds which has not yet been issued but which is proposed to be issued by the Authority, a Financial Transaction pursuant to which payments by the Authority are to be paid from or secured by revenues or funds pledged to the payment of or as security for such Series of Bonds and payments to the Authority are pledged to the payment of or as security for such Series of Bonds. Renewal and Replacement Fund means the E-470 Public Highway Authority Revenue Bond Renewal and Replacement Fund established by the Master Resolution. Renewal and Replacement Fund Requirement means the greater of (a) the amount determined by a Consulting Engineer to be necessary for the purposes thereof and (b) an amount equal to the lesser of (i) the Operating Expenses estimated by the Authority for the succeeding Fiscal Year and (ii) $20,000,000. Replacement Swap Undertaking means the Replacement Swap Undertaking among the Authority, GKB and Societe Generale constituting a part of the GKB Swap Agreement. Revenue Fund means the E-470 Public Highway Authority Revenue Bond Revenue Fund established by the Master Resolution. Revenues means all amounts received by the Authority from (a) fees, tolls, rates and charges for the privilege of traveling on the Project imposed by the Authority pursuant to the Act; (b) highway expansion fees imposed by the Authority pursuant to the Act, but only to the extent such highway expansion fees are received in connection with property located within the boundaries of the Authority; (c) Vehicle Registration Fees imposed by the Authority pursuant to the Act; provided, however, that Vehicle Registration Fees shall be excluded from Revenues when both (i) no Vehicle Registration Fee Bonds are Outstanding and (ii) Net Revenues minus Vehicle Registration Fees during the preceding 12- month period equal or exceed 130% of the Debt Service on all Bonds and Parity Obligations during such 12-month period (as shown in the Authority s audited financial statements or an audit of such other 12-month period); (d) proceeds of special assessments paid by owners of property included within local improvement districts established by the Authority pursuant to the Act, but only to the extent such special assessments are received in connection with property located within the boundaries of the Authority; (e) property or sales taxes received pursuant to Section of the Act, but only to the extent such taxes are received in connection with property located or taxable transactions occurring within the boundaries of the Authority; (f) proceeds from insurance, condemnation awards and liquidated damages under contracts, in each case, to the extent the same relate to the Project; (g) all amounts payable to the Authority as liquidated damages pursuant to the Design/Build Contract or any other contract or agreement for the provision of services or property with respect to the Project; (h) all amounts derived from time to time from the Member Governments, or otherwise, in accordance with the Establishing Contract; (i) all amounts derived from the sale or other disposition of land (or any interest therein) or other property included in the Project; (j) amounts derived as grants, loans or otherwise from the United States of America, the State or any other Person which may be available for, and which the Authority determines to, deposit in the Revenue Fund; (k) all investment earnings that are transferred to or deposited into the Revenue Fund; (l) all moneys released from another Fund or Account and transferred to the Revenue Fund pursuant to the Master Resolution; (m) any net amounts of Regularly Scheduled Swap Payments received by the Authority and (n) all other amounts derived from or in respect of the ownership or operation of the Project which constitute revenues in accordance with Generally Accepted Accounting Principles, including without limitation tolls and any interest income earned on any Funds and Accounts which is required to be transferred to or maintained in any Fund, Account or Subaccount under the Master Resolution; provided, however, that revenues from Special Projects shall not be included in Revenues. S&P means Standard & Poor s Ratings Services, a Division of McGraw-Hill, Inc., its successors and assigns, and, if Standard & Poor s Ratings Services, a Division of McGraw-Hill, Inc. shall for any reason no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority and approved in writing by MBIA A-13

89 Second Supplemental Resolution means Resolution No adopted by the Board on April 27, 2000, as amended by the Third Supplemental Resolution and the Fourth Supplemental Resolution and as it may be amended from time to time in accordance with its terms and the terms of the Master Resolution. Second Tier Subordinate Bonds means any Bonds designated as Second Tier Subordinate Bonds by Supplemental Resolution. Second Tier Subordinate Bonds Debt Service Account means the Second Tier Subordinate Bonds Debt Service Account of the Debt Service Fund established by the Master Resolution. Senior Bonds means the 1997 Bonds, the 2000 Bonds, the 2004 Bonds, the 2006 Bonds, the 2007 Bonds and any Authority Bonds designated as Senior Bonds by a Supplemental Resolution. Senior Bonds Debt Service Account means the Senior Bonds Debt Service Account of the Debt Service Fund established by the Master Resolution. Senior Bonds Debt Service Reserve Account means the Senior Bonds Debt Service Reserve Account of the Debt Service Reserve Fund established by the Master Resolution. Senior Bonds Debt Service Reserve Account Requirement means the amount required to be maintained in the Senior Bonds Debt Service Reserve Account of the Debt Service Reserve Fund by any Supplemental Resolution, calculated in the manner and times as set forth in the Master Resolution and in any Supplemental Resolution. So long as any Senior Bonds that are MBIA Insured Bonds are Outstanding, the Senior Bonds Debt Service Reserve Requirement shall be calculated in the manner and at the times provided in the Resolutions. Series means Bonds identified as a separate series which are authenticated and delivered on original issuance or in connection with a remarketing, and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Master Resolution and any Supplemental Resolution. Series 2000A Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2000A. Series 2000B Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2000B. Series 2004A Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2004A (Noncallable Capital Appreciation Bonds). Series 2004B Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2004B (Callable Capital Appreciation Bonds). Series 2004C Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2004C (Noncallable Convertible Appreciation Bonds). Series 2006A Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2006A (Current Interest Bonds). Series 2006B Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2006B (Capital Appreciation Bonds). Series 2007A Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007A. Series 2007B Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007B. Series 2007C Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007C. Series 2007D Bonds means the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007D. Sinking Fund Installment means, as of any particular date of calculation and with respect to any Series of Bonds, the amount of money to be applied as the Redemption Price of Bonds subject to mandatory sinking fund A-14

90 redemption in any Fiscal Year prior to maturity pursuant to the Supplemental Resolution for such Series, as such Sinking Fund Installment shall have been previously reduced by the principal amount of any Bonds of such Series of the maturity in respect of which such Sinking Fund Installment is payable which are purchased or redeemed by the Trustee in accordance with the provisions of the Master Resolution or of any Supplemental Resolution, other than by the prior payment of a Sinking Fund Installment. Sixth Supplemental Resolution means the Amended and Restated Sixth Supplemental Resolution authorizing the issuance of the 2007 Bonds adopted by the Board on May 24, 2007, as it may be amended from time to time in accordance with its terms. Societe Generale means Societe Generale, New York Branch, and any successor thereto as a party to the Replacement Swap Undertaking or counterparty under the GKB Swap Agreement. Special Project means a special project that meets the conditions for a Special Project set forth in the Master Resolution. State means the State of Colorado. Subaccount means any one or more of the subaccounts from time to time created in any of the Accounts established by the Master Resolution or by any Supplemental Resolution. Subordinate means, when used with respect to a particular Tier of Senior Bonds, First Tier Subordinate Bonds, Second Tier Subordinate Bonds, Third Tier Subordinate Bonds or bonds or other obligations subordinate thereto, all Bonds with respect to which amounts in the Revenue Fund are to be applied to the Debt Service Account for such Bonds pursuant to the Master Resolution at a priority following the priority at which such amounts are to be applied to the Debt Service Account for the particular Tier of Bonds. For purposes of this definition, no other Tier of Bonds shall be deemed Subordinate to the Vehicle Registration Fee Bonds and the Vehicle Registration Fee Bonds shall not be deemed Subordinate to any other Tier of Bonds. Supplemental Resolution means any Resolution supplemental to or amendatory of the Master Resolution, adopted by the Authority in accordance with the Master Resolution. Surplus Fund means the E-470 Public Highway Authority Revenue Bond Surplus Fund established by the Master Resolution. Termination Payment means amounts paid or received by the Authority upon the termination or cancellation of a Related Financial Transaction or upon replacement of the swap counterparty. Termination Payment Account means the Termination Payment Account of the Surplus Fund. Third Supplemental Resolution means Resolution No , as adopted by the Board on May 10, 2001, as amended by the Fourth Supplemental Resolution, the Fifth Supplemental Resolution and the Sixth Supplemental Resolution and as it may be further amended from time to time in accordance with its terms and the terms of the Master Resolution. Third Tier Subordinate Bonds means any Bonds designated as Third Tier Subordinate Bonds by Supplemental Resolution. Third Tier Subordinate Bonds Debt Service Account means the Third Tier Subordinate Bonds Debt Service Account of the Debt Service Fund established by the Master Resolution. Tier means all Bonds of one or more Series the principal and Redemption Price of and interest on which are payable from the same Debt Service Account. Toll Road Consultant means a Consultant with expertise and experience regarding the operation, management and financing of, and the collection of revenues from, toll roads A-15

91 Trust Estate means: (a) all right, title and interest of the Authority in and to the Revenues as the same are collected; (b) all right, title and interest of the Authority now owned or hereafter acquired in and to all moneys deposited or required to be deposited in any Fund, Account or Subaccount pursuant to the Master Resolution or any Supplemental Resolution, except the Rebate Fund, and all right, title and interest in and to the Investment Securities (and interest and investment income derived therefrom) held in any such Fund, Account or Subaccount pursuant to the Master Resolution or any Supplemental Resolution; provided, however, that (i) the Authority may establish one or more separate Accounts or Subaccounts in any such Fund, Account or Subaccount, which separate Accounts or Subaccounts and the moneys deposited therein (together with all investments thereof and investment income earned thereon) may be pledged exclusively to the payment of one or more designated Series of Bonds or portions thereof for any designated period, or otherwise, all as shall be provided in the Master Resolution or in any Supplemental Resolution and (ii) the Authority shall transfer any or all interest and investment income derived from Investment Securities held in any such Fund, Account or Subaccount to the other Funds, Accounts and Subaccounts in accordance with the provisions of the Master Resolution or any Supplemental Resolution; provided, however, that no transfer as described in this clause (ii) that is not specifically provided for or specifically permitted in the Master Resolution or in the First Supplemental Resolution of any Investment Securities or any moneys in any Fund, Account or Subaccount, other than the General Surplus Account, the First Tier Subordinate Bonds Debt Service Account, the Second Tier Subordinate Bonds Debt Service Account, the Third Tier Subordinate Bonds Debt Service Account or the First Tier Subordinate Bonds Debt Service Reserve Account, shall be made without MBIA s written consent; (c) all right, title and interest of the Authority in and to (i) the Design/Build Contract and (ii) any other contract, agreement or other arrangement relating to the acquisition, construction or improvement of the Project but only if the Authority s obligations thereunder are to be paid from a Fund, Account or Subaccount other than the General Surplus Account; and (d) any and all property of every kind and nature (including, without limitation, cash, obligations or securities) which may from time to time hereafter be assigned, hypothecated, endorsed, pledged, granted, or delivered to or deposited with the Trustee as additional security under the Master Resolution by the Authority or anyone on its behalf, or which pursuant to any of the provisions of the Master Resolution may come into the possession or control of the Trustee as security under the Master Resolution, or of a receiver lawfully appointed under the Master Resolution, including, but not limited to, any Related Financial Transaction (provided, however, that a Related Financial Transaction and the amounts payable to the Authority or the Trustee thereunder shall be part of the Trust Estate only in respect of the Series of Bonds to which such Related Financial Transaction relates), all of which the Trustee is authorized to receive, hold and apply according to the terms of the Master Resolution. Trustee means the commercial bank appointed in the Master Resolution to act in such capacity, its legal successor, or any other commercial bank or trust company duly organized and existing under the laws of the State or the United States of America, which is authorized under such laws to exercise corporate trust powers and is subject to examination by federal authority, appointed pursuant to the Master Resolution as its successor or its successors Bonds means the Series 2000A Bonds and the Series 2000B Bonds, collectively Senior Bonds Capitalized Interest Subaccount means the subaccount within the Capitalized Interest Account established and designated as such in the Second Supplemental Resolution Bank means Dexia Credit Local, acting through its New York Agency, and its successors as liquidity provider for the 2001 Bonds Bonds means the E-470 Public Highway Authority Vehicle Registration Fee Bonds, Series Financial Transaction Counterparty means Bear Stearns Financial Products, Inc. and any successors and assigns A-16

92 2001 Interest Rate Exchange Agreement means the Related Financial Transaction relating to the 2001 Bonds and consisting of the ISDA Master Agreement between the Authority and the 2001 Financial Transaction Counterparty, the Schedule and Confirmation related thereto, as amended and supplemented pursuant to the terms thereof Standby Bond Purchase Agreement means the Standby Bond Purchase Agreement dated as of May 1, 2001 between the Authority and the 2001 Bank, as in effect from time to time, and each successor facility Swap Insurance Policy means the interest rate swap insurance policy provided by MBIA for the 2001 Interest Rate Exchange Agreement Bonds means the Series 2004A Bonds, the Series 2004B Bonds and the 2004C Bonds, collectively Bonds means the Series 2006A Bonds and the Series 2006B Bonds, collectively Auction Rate Bond means any 2007 Bond bearing interest at an Auction Period Rate Bonds means, collectively, the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007A, the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007B, the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007C and the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007D Costs of Issuance Account means the Account within the Construction Fund established pursuant to the Sixth Supplemental Resolution Escrow Agreement means the 2007 Escrow Agreement dated as of the date of issuance of the 2007 Bonds between the Authority and U.S. Bank National Association, as escrow agent Escrow Fund means the escrow fund established pursuant to the 2007 Escrow Agreement MBIA Commitment means the commitment between MBIA and the Authority for the issuance by MBIA of the financial guaranty insurance policy insuring the regularly scheduled principal of and interest when due on the 2007 Bonds and the 2007 Swap Insurance Policies, as such commitment may be amended and supplemented prior to the issuance of the 2007 Bonds Reimbursement Agreement means Reimbursement Agreement among the Authority, the Trustee and MBIA relating to the financial guaranty insurance policy insuring the regularly scheduled principal of and interest when due on the 2007 Bonds and the 2007 Swap Insurance Policies, as such agreement is amended and supplemented in accordance with its terms Swap Agreements means, collectively, the BSFP Swap Agreement, the MSCS Swap Agreement and the GKB Swap Agreement Swap Counterparties means, collectively, BSFP, MSCS, GKB, and, to the extent provided in the Replacement Swap Undertaking, Societe Generale Swap Insurance Policies means the interest rate swap insurance policies provided by MBIA and insuring the Regularly Scheduled Swap Payments and certain Termination Payments pursuant to the 2007 Swap Agreements. Vehicle Registration Fee Bonds means the 2001 Bonds and any Series of Bonds designated as Vehicle Registration Fee Bonds by Supplemental Resolution. Vehicle Registration Fee Bonds Capitalized Interest Subaccount means the subaccount within the Capitalized Interest Account established and designated as such in the First Supplemental Resolution. Vehicle Registration Fee Bonds Capitalized Interest Subaccount Requirement means the amount required to be deposited in the Vehicle Registration Fee Bonds Capitalized Interest Subaccount pursuant to the First Supplemental Resolution A-17

93 Vehicle Registration Fee Bonds Debt Service Account means the Vehicle Registration Fee Bonds Debt Service Account of the Debt Service Fund established by the Master Resolution. Vehicle Registration Fee Bonds Debt Service Reserve Account means the Vehicle Registration Fee Bonds Debt Service Reserve Account of the Debt Service Reserve Fund established by the Master Resolution. Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement means the amount required to be maintained in the Vehicle Registration Fee Bonds Reserve Account pursuant to any Supplemental Resolution. Vehicle Registration Fee Parity Obligations means Parity Obligations payable in whole or in part from Vehicle Registration Fees on the same priority as the Vehicle Registration Fee Bonds. Vehicle Registration Fees means all amounts received by the Authority, acting on its own behalf, from the vehicle registration fees imposed by the Authority, acting on its own behalf, pursuant to the Act that were authorized at the November, 1988 general election. Security for the Bonds and Parity Obligations In order to secure the payment of the principal, Maturity Value and Redemption Price of and interest on the Bonds and the comparable amounts with respect to Parity Obligations as the same become due and payable (whether at maturity, by prior redemption, or otherwise) and the performance and observance of all of the covenants and conditions contained in the Master Resolution, and in consideration of the premises, the purchase and acceptance of the Bonds by the Owners thereof and of the Parity Obligations by the owners thereof, and other good and valuable consideration, the receipt and sufficiency of which have been acknowledged, the Authority grants to the Trustee and its successors in trust under the Master Resolution a pledge of and first lien on the Trust Estate, with all rights and privileges appurtenant thereto, subject, however, to the terms and provisions of the Master Resolution. Such pledge and lien shall be for the equal and proportionate benefit and security of the Owners from time to time of the Bonds issued and to be issued under the Master Resolution and the owners from time to time of the Parity Obligations issued and to be issued under the Parity Obligation Instruments, or any of them, without preference, priority or distinction as to lien or otherwise of any Bond or Parity Obligation over any other Bond or Parity Obligation, except that, as further provided in and subject to the further terms of the Master Resolution, (a) the Owners of the Vehicle Registration Fee Bonds shall have a first lien on Vehicle Registration Fees and on any amounts received by the Authority pursuant to a Related Financial Transaction with respect to Vehicle Registration Fee Bonds (other than any Termination Payments), (b) the Owners of the Bonds of each Tier shall have an exclusive lien on the Debt Service Account and the Debt Service Reserve Account with the same designation as such Tier of Bonds, (c) the Owners of the Bonds of each Series have an exclusive lien on any subaccount of the Capitalized Interest Account dedicated to payment of interest on such Series, (d) the lien on the Trust Estate of the Owners of Bonds of Tiers other than Vehicle Registration Fee Bonds is subordinate or superior to the lien of the Owners of such Bonds of other Tiers, and (e) there are various differences in the rights of, and priorities for the benefit of, the Owners of the Bonds of different Tiers with respect to various other matters, including but not limited to remedies following Events of Default. If the Authority, its successors or assigns, shall well and truly pay, or cause to be paid, all of the principal and Redemption Price of and interest on the Bonds, at the times and in the manner provided in the Bonds according to the true intent and meaning thereof, and shall cause the payments to be made into the Funds and Accounts established under and in the amounts required by the Master Resolution, or shall provide, as permitted, for the payment thereof by depositing with or for the account of the Trustee or an escrow agent an amount sufficient to provide for payment of the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of the Master Resolution to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions of the Master Resolution, and shall pay or cause to be paid all amounts due to MBIA, and if the Authority, its successors or assigns, shall well and truly pay, or cause to be paid, all of the principal and redemption price of and interest on the Parity Obligations, at the times and in the manner provided in the Parity Obligations according to the true intent and meaning thereof, and shall cause the payments to be made into the funds and accounts established under the Parity Obligation Instruments and in the amounts required thereby, or shall provide, as provided in the Master Resolution, for the payment thereof by depositing with or for the account of the Trustee or an escrow agent an amount sufficient to provide for payment of the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of the Parity Obligation Instruments to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due to it in accordance with the A-18

94 terms and provisions of the Parity Obligation Instruments, and shall pay or cause to be paid all amounts due to MBIA, then, upon such payment and performance, the Master Resolution and the rights and liens granted shall cease, determine and be void; otherwise, the Master Resolution is to be and shall remain in full force and effect. Provisions for Issuance of Authority Bonds (a) All (but not less than all) the Authority Bonds of each Series will be executed by the Authority for issuance under the Master Resolution and delivered to the Trustee and thereupon will be authenticated by the Trustee or Authenticating Agent and by it delivered upon the order of the Authority, but only upon the receipt by the Trustee of: (i) An opinion of Bond Counsel in customary form to the effect that, as of its date (A) the Master Resolution and the Supplemental Resolution authorizing the Bonds of such Series have been duly authorized, executed and delivered by the Authority, are in full force and effect and constitute legal, valid and binding special, limited obligations of the Authority; (B) the Master Resolution and the Supplemental Resolution create the valid pledge of and lien on the Trust Estate which they purport to create, subject only to the provisions of the Master Resolution and such Supplemental Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the Master Resolution and such Supplemental Resolution; and (C) the Bonds of such Series are valid and binding special, limited obligations of the Authority, payable solely from the sources provided therefor in the Master Resolution and such Supplemental Resolution; provided, however, that such opinion may include exceptions for limitations imposed by or resulting from bankruptcy, insolvency, moratorium, reorganization, or other laws affecting creditors rights generally, matters relating to equitable or governmental principles and other exceptions or qualifications appropriate in the circumstances; (ii) A letter, signed by an Authorized Authority Representative, instructing the Trustee as to the delivery of such Bonds; (iii) In the case of each Series of Authority Bonds, a copy of the Supplemental Resolution authorizing such Bonds, certified by an officer of the Authority, which shall specify: (A) The authorized principal amount, designation, Tier and Series of such Bonds; (B) The maturity date or dates of the Bonds of such Series; (C) The interest rate or rates, if any, or the manner of determining such interest rate or rates, on the Bonds of such Series, which may be fixed, variable or otherwise, and the Interest Payment Date or Dates thereof, or, with respect to Capital Appreciation Bonds, the Maturity Value, Accreted Value and Accretion Dates, or the manner of determining the same, for the Bonds of such Series; (D) The denominations of and the manner of dating, numbering and lettering the Bonds of such Series; (E) The Debt Service Reserve Fund Requirement (or the method of determining the same) and any capitalized interest requirement (or the method of determining the same) for the Bonds of such Series; (F) Any Paying Agent, Registrar, or other Fiduciary required in respect of the Bonds of such Series; Series; (G) The Redemption Prices and redemption terms, if any, for the Bonds of such (H) The amount and due date of each Sinking Fund Installment, if any, for Bonds of like maturity of such Series; (I) The form of the Bonds of such Series; and A-19

95 (J) Any other provisions deemed advisable by the Authority and not in conflict with the provisions of this Master Resolution; and (iv) Such further opinions and instruments as are required by or pursuant to the provisions of the Master Resolution or any Supplemental Resolution. (b) All Refunding Bonds of each Series will be executed by the Authority for issuance under the Master Resolution and delivered to the Trustee and thereupon shall be authenticated by the Trustee or any Authenticating Agent and by it delivered upon the order of the Authority, but only upon the receipt by the Trustee of: (i) the opinions and instruments referred to in paragraph (a) under this caption; (ii) if any Bonds or portions thereof to be refunded are to be called for redemption, a Letter of Instructions containing irrevocable instructions to the Trustee, satisfactory to it, requiring that due notice be given of the redemption of the Bonds or portions thereof to be refunded on a Redemption Date specified in such instructions; (iii) a Letter of Instructions containing irrevocable instructions to the Trustee, satisfactory to it, requiring that such other notice be given with respect to the Bonds being refunded as may be required by this Master Resolution; (iv) evidence satisfactory to the Trustee that the deposit of moneys or Defeasance Investment Securities described in Discharge of Master Resolution below has been made; (v) such further opinions and instruments as are required by the provisions of the Master Resolution or by the provisions of any Supplemental Resolution; and met. (vi) all requirements under paragraph (f) in Certain Rights of MBIA below have been (c) No additional Series of Authority Bonds shall be issued unless the following additional requirements are satisfied by delivering to the Trustee: (i) If such Series of Bonds is being issued to complete the portion of the Project between 120 th Avenue and Interstate 25 North, including the interchanges at 120 th Avenue and Interstate 25 North, to complete the interchange at Interstate 70 or to make major repairs to the Project, and the sum of the principal amount of such Series and the principal amount of all other Series issued as described in this paragraph (i) does not exceed $50 million, a certificate from a Toll Road Consultant to the effect that such Series of Bonds is required to finance Costs of the Project for which there are not funds otherwise available (for purposes of this paragraph, amounts held in the Renewal and Replacement Fund shall be deemed to be unavailable for any purpose other than scheduled repairs) and such Costs of the Project must be incurred in order to complete the portion of the Project between 120 th Avenue and Interstate 25 North, to complete the interchange at Interstate 70 or to make major repairs to the Project; (ii) For all additional Series of Bonds not permitted as described in paragraph (i) above or paragraph (iii) below, conditions (C), (D) and (E) below are met and either condition (A) or (B) below is met, provided that none of such conditions need be met if the written consent of MBIA is obtained for the issuance of such additional Series of Bonds: (A) if the Series of Bonds to be issued is not Vehicle Registration Fee Bonds, a certificate or report of a Toll Road Consultant to the effect that for each 12-month period beginning on the first day of the first calendar month following the date of issuance of the Series of Bonds to be issued, Net Revenues (based upon such assumptions as shall be set forth in such certificate or report and subject to the adjustment provided in this paragraph) are estimated to be in an amount not less than (1) if the Series of Bonds to be issued is Senior Bonds, 1.30 times the Aggregate Debt Service for each such 12-month period, and (2) if the Series of Bonds to be issued is First, Second or Third Tier Subordinate Bonds (or bonds or A-20

96 other obligations subordinate thereto), 1.20 times the Aggregate Debt Service for each such 12-month period. For purposes of this paragraph, (w) Net Revenues for each such 12-month period shall be reduced by an amount equal to the maximum Aggregate Debt Service due in any 12-month period on Vehicle Registration Fee Bonds; (x) Aggregate Debt Service for each such 12-month period shall not include Aggregate Debt Service due during such 12-month period on Vehicle Registration Fee Bonds or Aggregate Debt Service due during such 12- month period on any Bonds that are Subordinate to the Series of Bonds to be issued; (y) Aggregate Debt Service for each such 12-month period shall include Aggregate Debt Service due during such 12-month period on the Series of Bonds to be issued and Aggregate Debt Service due during such 12-month period on any other Series of Bonds, other than Vehicle Registration Fee Bonds or Bonds that are Subordinate to the Series of Bonds to be issued, that, in the opinion of the Toll Road Consultant, will have to be issued in order to complete the Applicable Portion of the Project defined in the Supplemental Resolution authorizing the Series of Bonds to be issued; and (z) Aggregate Debt Service and Net Revenues for each such 12-month period shall include the interest due during such 12-month period on the Series of Bonds to be issued and on all Outstanding Bonds that are not Vehicle Registration Fee Bonds or Bonds that are Subordinate to the Series of Bonds to be issued to the extent such interest is to be paid from proceeds of Bonds or other funds held or to be held in the Capitalized Interest Account of the Construction Fund and investment earnings on such proceeds and other funds; or (B) if the Series of Bonds to be issued is Vehicle Registration Fee Bonds, a certificate or report of a Toll Road Consultant to the effect that for each 12-month period beginning on the first day of the first calendar month following the date of issuance of the Series of Bonds to be issued, Vehicle Registration Fees (based upon such assumptions as shall be set forth in such certificate or report) are estimated to be in an amount not less than 1.20 times the Aggregate Debt Service for each such 12-month period on the Vehicle Registration Fee Bonds to be issued, all other Outstanding Vehicle Registration Fee Bonds and any additional Vehicle Registration Fee Bonds that, in the opinion of the Toll Road Consultant, will have to be issued in order to complete the Applicable Portion of the Project defined in the Supplemental Resolution authorizing the Series of Bonds to be issued; and; (C) a certificate satisfactory to MBIA of an Authorized Authority Representative dated as of the date of issuance of such additional Series of Bonds, stating that Segments II and III are open and operating and toll revenues have been collected from Persons traveling on such portion of the Project for at least 12 calendar months, provided that this clause (C) shall not apply when there are no Senior Bonds that are MBIA Insured Bonds Outstanding; and (D) a certificate of an Authorized Authority Representative dated as of the date of issuance of such additional Series of Bonds, stating that there exists no Event of Default under the Master Resolution; and (E) the Trustee and MBIA shall have received written evidence (or other evidence satisfactory to the Trustee and MBIA) from each Rating Agency that the issuance of such additional Series of Bonds will not, by itself, result in a withdrawal of or reduction of its rating of any Bonds or Parity Obligations; (iii) Without regard to the limitations of (ii)(a), (B), (C) and (D) above, but subject to satisfaction of (ii)(e) above and paragraph (f) in Certain Rights of MBIA below: (A) for any Refunding Bonds that are Senior Bonds and that are issued to refund Senior Bonds or Vehicle Registration Fee Bonds, (1) a Toll Road Consultant s certificate or opinion that the revenue covenant described in paragraph (a) of Revenue Covenant below will be met through the final maturity date of such Refunding Bonds and (2) a certificate or opinion of a Consultant with expertise in investment banking that the issuance of the Refunding Bonds and the defeasance of the Bonds refunded by the Refunding Bonds will result in present value savings, provided that none of the conditions of this paragraph (iii) need be met if the written consent of MBIA is obtained for the issuance of such Refunding Bonds; A-21

97 Construction Fund (B) for any Refunding Bonds that are Vehicle Registration Fee Bonds and are issued to refund Vehicle Registration Fee Bonds or Senior Bonds, a certificate or opinion of a Consultant with expertise in investment banking that the issuance of the Refunding Bonds and the defeasance of the Bonds refunded by the Refunding Bonds will result in present value savings, provided that none of the conditions of this paragraph (iii) need be met if the written consent of MBIA is obtained for the issuance of such Refunding Bonds; and (C) for any Refunding Bonds that are not Senior Bonds or Vehicle Registration Fee Bonds, a Toll Road Consultant s certificate or opinion that the revenue covenant described in paragraph (a) of Revenue Covenant below will be met through the final maturity date of such Refunding Bonds, provided that none of the conditions of this paragraph (iii) need be met if the written consent of MBIA is obtained for the issuance of such Refunding Bonds; (iv) For all Series of Vehicle Registration Fee Bonds or Bonds or Parity Obligations the principal and Redemption Price of and interest on which are to be secured by Vehicle Registration Fees on a parity with the Vehicle Registration Fee Bonds, the written consent of MBIA is obtained, which MBIA may give or withhold in its sole discretion; and (v) For all Series of Senior Bonds that are not permitted by (i) or (iii) above, the written consent of MBIA is obtained, which MBIA may give or withhold in its sole discretion. There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of the Master Resolution and any Supplemental Resolution. There may also be paid into the Construction Fund, at the option of the Authority, any moneys received by the Authority from any source unless otherwise required to be applied by the Master Resolution or any Supplemental Resolution. Separate, segregated accounts and subaccounts may be created within the Construction Fund and held by the Trustee or any other Fiduciary in the manner provided in any Supplemental Resolution. Money held in such accounts and subaccounts shall be held separately from other moneys in the Construction Fund and shall be disposed of only in the manner provided in the Supplemental Resolution pursuant to which such accounts and subaccounts are created. Without limiting the generality of the foregoing, such separate, segregated accounts and subaccounts, and all funds, investments thereof and investment income earned thereon, may be exclusively pledged (and a lien and security interest therein may be exclusively granted) to secure for any period of time the payment of principal and Redemption Price of any or all of any such Series of Bonds, and interest thereon to any date, all as may be more fully provided in such Supplemental Resolution, in which case such pledge, lien and security interest will be prior and superior to the lien and pledge on the Construction Fund granted by the Master Resolution securing the Bonds generally. Except as otherwise provided by Supplemental Resolution, amounts in the Construction Fund shall be used to pay Costs of the Project, and shall be distributed to, or to the order of, the Authority, acting on its own behalf, for such purpose at the written request of an Authorized Authority Representative. Except as otherwise provided by Supplemental Resolution, amounts in the Construction Fund may, at the written direction of the Authority be transferred to the Debt Service Fund for the Bonds and applied to the payment of principal and Redemption Price of and interest on the Bonds when due, to the extent that other funds established for such purposes are insufficient. When the Project shall have been substantially completed in accordance with the relevant plans and specifications, and when all Costs of the Project shall have been paid or reasonable provision therefor shall have been made, an Authorized Authority Representative, upon receipt from the Consulting Engineer of a notice so stating, shall certify the Project to be complete as of the date therein set forth. Upon such certification, any surplus moneys remaining in the Construction Fund and not otherwise required to be maintained therein by any Supplemental Resolution shall be transferred to the Debt Service Reserve Fund, to the extent of any deficiency in the Debt Service Reserve Fund Requirement thereof, and thereupon to the Debt Service Fund A-22

98 Revenue Fund Except as otherwise provided in the Master Resolution or by Supplemental Resolution and except that Governmental Loan Proceeds received prior to the Completion Date shall be deposited, as determined by the Authority, in the Revenue Fund, the Project Account, the Capitalized Interest Account or any Subaccount of the Capitalized Interest Account or the Debt Service Fund, all Revenues shall be delivered to the Trustee immediately upon receipt by the Authority and shall be deposited by the Trustee in the Revenue Fund immediately upon receipt by the Trustee and amounts in the Revenue Fund shall be used for the purposes and in the order of priority described in Flow of Funds below. Flow of Funds (a) Notwithstanding paragraph (b) below or any other provision of the Master Resolution, but subject to paragraph (c) below and the provisions of the Master Resolution described under Related Financial Transactions below, all amounts deposited in the Revenue Fund from Vehicle Registration Fees and any amounts received by the Authority pursuant to a Related Financial Transaction with respect to Vehicle Registration Fee Bonds (other than any Termination Payments) shall be applied as follows: First, unless provision for such payments from the Construction Fund or otherwise has been made as contemplated by Construction Fund above or otherwise, there shall be transferred to the Vehicle Registration Fee Bonds Account of the Debt Service Fund, amounts which, when added to other amounts in the Vehicle Registration Fee Bonds Account of the Debt Service Fund, shall equal all Principal Installments and interest to become due on the Vehicle Registration Fee Bonds on or before the first Business Day of September immediately following the date on which such amounts are received by the Trustee, with interest on variable rate Vehicle Registration Fee Bonds determined as provided in paragraph (e) below. Second, if the Vehicle Registration Fee Bonds Debt Service Reserve Account contains less than the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement, there shall be transferred into the Vehicle Registration Fee Bonds Debt Service Reserve Account, an amount equal to the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement or the amount needed to attain the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement, whichever is lesser, which transfers shall continue until the Vehicle Registration Fee Bonds Debt Service Reserve Account contains the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement. Third, all amounts not required to be applied as provided in priorities First and Second above shall be applied as provided in paragraph (b) below. (b) Except as otherwise provided in paragraph (a) above, paragraph (c) below and Related Financial Transactions below, otherwise in the Master Resolution or by Supplemental Resolution, amounts in the Revenue Fund shall be applied for the following purposes in the priority in which listed: First, on or before the last day of each month, to the extent not paid from other sources, Operating Expenses budgeted by the Authority for the next succeeding month shall be distributed to, or to the order of, the Authority. Second, unless provision for such payments from the Construction Fund or otherwise has been made as contemplated by Construction Fund above or otherwise, on or before the last day of each month, or at such other times as shall be set forth in any Supplemental Resolution, there shall be transferred to the Senior Bonds Debt Service Account of the Debt Service Fund amounts which, when added to other amounts in the Senior Bonds Debt Service Account of the Debt Service Fund and available for such purposes, will provide for the accumulation, in substantially equal monthly installments, or otherwise as may be provided in any Supplemental Resolution, of the amounts required to pay the sum of: (A) any interest to become due and payable on each Series of Outstanding Senior Bonds on each Interest Payment Date for such Series occurring within the next six months, with interest on variable rate Senior Bonds determined as provided in paragraph (e) below; and A-23

99 (B) any Principal Installments to become due and payable on any Series of Outstanding Senior Bonds on or before the next date (within the next 12 months) on which such Principal Installment is payable. Third, there shall be transferred to the Rebate Fund amounts which, when added to other amounts in the Rebate Fund, shall equal the amount required to be on deposit therein pursuant to Rebate Fund below. Fourth, if the Senior Bonds Debt Service Reserve Account of the Debt Service Reserve Fund contains less than the Senior Bonds Debt Service Reserve Account Requirement, on or before the last day of each month there shall be transferred into the Senior Bonds Debt Service Reserve Account of the Debt Service Reserve Fund, an amount equal to 1/12 of the Senior Bonds Debt Service Reserve Account Requirement or the amount needed to attain the Senior Bonds Debt Service Reserve Account Requirement, whichever is lesser, which transfers shall continue until the Senior Bonds Debt Service Account of the Debt Service Reserve Fund contains the Senior Bonds Debt Service Reserve Account Requirement. Fifth, unless provision for such payments from the Construction Fund or otherwise has been made as contemplated by Construction Fund above or otherwise, on or before the last day of each month, or at such other times as shall be set forth in any Supplemental Resolution, there shall be transferred to the First Tier Subordinate Bonds Debt Service Account of the Debt Service Fund amounts which, when added to other amounts in the First Tier Subordinate Bonds Debt Service Account of the Debt Service Fund and available for such purposes, will provide for the accumulation, in substantially equal monthly installments, or otherwise as may be provided in any Supplemental Resolution, of the amounts required to pay the sum of: (A) any interest to become due and payable on each Series of Outstanding First Tier Subordinate Bonds on each Interest Payment Date for such Series occurring within the next six months, with interest on variable rate First Tier Subordinate Bonds determined as provided in paragraph (e) below; and (B) any Principal Installments to become due and payable on any Series of Outstanding First Tier Subordinate Bonds on or before the next date (within the next 12 months) on which such Principal Installment is payable. Sixth, if the First Tier Subordinate Bonds Debt Service Reserve Account contains less than the First Tier Subordinate Bonds Debt Service Reserve Account Requirement, there shall be transferred into the First Tier Subordinate Bonds Debt Service Reserve Account, an amount equal to 1/60 of the First Tier Subordinate Bonds Debt Service Reserve Account Requirement or the amount needed to attain the First Tier Subordinate Bonds Debt Service Reserve Account Requirement, whichever is lesser, which transfers shall continue until the First Tier Subordinate Bonds Debt Service Reserve Account contains the First Tier Subordinate Bonds Debt Service Reserve Account Requirement. Seventh, if the Renewal and Replacement Fund contains less than the Renewal and Replacement Fund Requirement, on or before the last day of each month there shall be transferred to the Renewal and Replacement Fund, an amount equal to 1/36 of the Renewal and Replacement Fund Requirement or the amount needed to attain the Renewal and Replacement Fund Requirement, whichever is lesser, which transfers shall occur until the Renewal and Replacement Fund contains the Renewal and Replacement Fund Requirement. Eighth, on or before the last day of each month there shall be delivered to the Authority, acting on its own behalf, any amount payable to Governmental Lenders for Governmental Loan Repayments in the succeeding calendar month, but only to the extent such Governmental Loan Repayments have been appropriated by the Authority, acting on its own behalf, in the fiscal year of the Authority, acting on its own behalf, in which such Governmental Loan Repayments are to be paid. Ninth, unless provision for such payments from the Construction Fund or otherwise has been made as contemplated by Construction Fund above or otherwise, on or before the last day of each month, or at such other times as shall be set forth in any Supplemental Resolution, there shall be A-24

100 transferred to the Second Tier Subordinate Bonds Debt Service Account of the Debt Service Fund amounts which, when added to other amounts in the Second Tier Subordinate Bonds Debt Service Account of the Debt Service Fund and available for such purposes, will provide for the accumulation, in substantially equal monthly installments, or otherwise as may be provided in any Supplemental Resolution, of the amounts required to pay the sum of: (A) any interest to become due and payable on each Series of Outstanding Second Tier Subordinate Bonds on each Interest Payment Date for such Series occurring within the next six months, with interest on variable rate Second Tier Subordinate Bonds determined as provided in paragraph (e) below; and (B) any Principal Installments to become due and payable on any Series of Outstanding Second Tier Subordinate Bonds on or before the next date (within the next 12 months) on which such Principal Installment is payable. Tenth, unless provision for such payments from the Construction Fund or otherwise has been made as contemplated by Construction Fund above or otherwise, on or before the last day of each month, or at such other times as shall be set forth in any Supplemental Resolution, there shall be transferred to the Third Tier Subordinate Bonds Debt Service Account of the Debt Service Fund amounts which, when added to other amounts in the Third Tier Subordinate Bonds Debt Service Account of the Debt Service Fund and available for such purposes, will provide for the accumulation, in substantially equal monthly installments, or otherwise as may be provided in any Supplemental Resolution, of the amounts required to pay the sum of: (A) any interest to become due and payable on each Series of Outstanding Third Tier Subordinate Bonds on each Interest Payment Date for such Series occurring within the next six months, with interest on variable rate Third Tier Subordinate Bonds determined as provided in paragraph (e) below; and (B) any Principal Installments to become due and payable on any Series of Outstanding Third Tier Subordinate Bonds on or before the next date (within the next 12 months) on which such Principal Installment is payable. Eleventh, if the Operating Reserve Fund contains less than the Operating Reserve Fund Requirement, on or before the last day of each month there shall be transferred to the Operating Reserve Fund, the amount needed to attain to the Operating Reserve Fund Requirement. Twelfth, money remaining in the Revenue Fund shall be used to make or provide for all deposits, payments or transfers required by any Supplemental Resolution. Thirteenth, any money remaining in the Revenue Fund at the end of any Fiscal Year shall be transferred to the Surplus Fund. (c) Notwithstanding any other provision of the Master Resolution, whenever any Parity Obligation is outstanding and moneys are to be applied as described under Flow of Funds to any Fund, Account or Subaccount relating to any Bonds, moneys shall also be applied to the comparable fund, account or subaccount established with respect to any Parity Obligation that is on a parity with such Bonds, and if the amount required to be so applied is insufficient for both such purposes the amount deposited to each such fund, account or subaccount shall be reduced in equal proportions based on the total amount required to be applied to both such funds, accounts or subaccounts. (d) Whenever the amount on deposit in the Operating Reserve Fund is in excess of the Operating Reserve Fund Requirement, the amount on deposit in the Renewal and Replacement Fund is in excess of the Renewal and Replacement Fund Requirement, the excess on deposit in such Account or Fund shall be transferred to the Revenue Fund and applied as provided in paragraph (b) above. Whenever the amount on deposit in the Vehicle Registration Fee Bonds Debt Service Reserve Account is in excess of the Vehicle Registration Fee Bonds Debt Service Reserve Account Requirement and the other conditions of the Master Resolution have been complied with, the excess on deposit in such Account shall be transferred to the Revenue Fund and applied as provided in paragraph (b) above. Whenever the amount on deposit in the Senior Bonds A-25

101 Debt Service Reserve Account is in excess of the Senior Bonds Debt Service Reserve Account Requirement and the other conditions of the Master Resolution have been complied with, the excess on deposit in such Account shall be transferred to the Revenue Fund and applied as provided in paragraph (b) above. (e) The amount to be transferred to any Account of the Debt Service Fund as described in paragraph (a) or (b) of this Section with respect to interest on Bonds that bear interest at an adjustable or variable interest rate such that the interest payable on such Bonds cannot be determined with certainty shall be the greater of (i) the actual interest rate borne by such Bonds on the date the transfer is made or (ii) the interest rate determined on the date the transfer is made as described in clause (b)(ii)(b) of the definition of Debt Service above. (f) Notwithstanding paragraph (b) above or any other provision of the Master Resolution, (i) any Termination Payments and Miscellaneous Swap Payments due from the Authority shall be paid solely from amounts on deposit in the General Surplus Account of the Surplus Fund and (ii) any Termination Payments received by the Authority shall be deposited directly to the Termination Payment Account of the Surplus Fund. If the Trustee is required to make a Termination Payment which constitutes an Insured Termination Payment from the General Surplus Account of the Surplus Fund at the same time it is required to make a Termination Payment which does not constitute an Insured Termination Payment from the General Surplus Account of the Surplus Fund, the Trustee shall pay the Termination Payment which constitutes an Insured Termination Payment prior to paying the Termination Payment which does not constitute an Insured Termination Payment. If the Trustee is required to make a Termination Payment which constitutes an Insured Termination Payment from the General Surplus Account of the Surplus Fund at the same time it is required to make a Miscellaneous Swap Payment from the General Account of the Surplus Fund, the Trustee shall pay the Insured Termination Payment prior to paying the Miscellaneous Swap Payment. Other Transfers to Debt Service Fund (a) Notwithstanding anything described in Flow of Funds above or the Master Resolution to the contrary, if on any date there are not sufficient moneys in the Revenue Fund to make the transfers as described under Flow of Funds above to the Vehicle Registration Fee Bonds Debt Service Account on such date, moneys shall be transferred to the Vehicle Registration Fee Bonds Debt Service Account from the following sources in an amount which, together with the amount to be transferred thereto from the Revenue Fund on such date, will result in the Vehicle Registration Fee Bonds Debt Service Account having the balance required to be on deposit therein pursuant to the provisions of the Resolutions described in Flow of Funds above, from the following sources in the priority in which listed: First, from the Vehicle Registration Fee Bonds Capitalized Interest Subaccount; Second, if and to the extent Revenues consisting of Vehicle Registration Fees and amounts received by the Authority pursuant to a Related Financial Transaction with respect to Vehicle Registration Fee Bonds (other than any Termination Payments) have been transferred to any Fund or Account other than the Vehicle Registration Fee Bonds Debt Service Account after the previous first Business Day of September, from such Fund or Account an amount equal to the Revenues consisting of Vehicle Registration Fees and amounts received by the Authority pursuant to a Related Financial Transaction with respect to Vehicle Registration Fee Bonds (other than any Termination Payments) that have been so transferred to such Fund or Account; Third, subject to paragraph (f) under this caption, from the Surplus Fund or any Account thereof; and Fourth, from the Vehicle Registration Fee Bonds Debt Service Reserve Account. (b) Notwithstanding anything in the Master Resolution to the contrary, if on any date there are not sufficient moneys in the Revenue Fund to make the transfers described in Flow of Funds above to the Senior Bonds Debt Service Account on such date, moneys shall be transferred to the Senior Bonds Debt Service Account from the following sources in an amount which, together with the amount to be transferred thereto from the Revenue Fund on such date, will result in the Senior Bonds Debt Service Account having the balance required to be on deposit therein pursuant to the provisions of the Resolutions described in Flow of Funds above: A-26

102 (i) If no Event of Default with respect to the Senior Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, from the 1997 Senior Bonds Capitalized Interest Subaccount to the extent moneys are required to be on deposit in the Senior Bonds Debt Service Account to pay interest on the 1997 Bonds and from the 2000 Senior Bonds Capitalized Interest Subaccount to the extent moneys are required to be on deposit in the Senior Bonds Debt Service Account to pay interest on the 2000 Bonds; thereof; Second, subject to paragraph (f) below, from the Surplus Fund or any Account Third, subject to paragraph (f) below, from the Renewal and Replacement Fund; Fourth, from the Senior Bonds Debt Service Reserve Account; and Fifth, subject to paragraph (f) below, from the Project Account. (ii) If an Event of Default with respect to the Senior Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, from the 1997 Senior Bonds Capitalized Interest Subaccount to the extent moneys are required to be on deposit in the Senior Bonds Debt Service Account to pay interest on the 1997 Bonds and from the 2000 Senior Bonds Capitalized Interest Subaccount to the extent moneys are required to be on deposit in the Senior Bonds Debt Service Account to pay interest on the 2000 Bonds; thereof; Second, subject to paragraph (f) below, from the Surplus Fund or any Account A-27 Third, subject to paragraph (f) below, from the Renewal and Replacement Fund; Fourth, from the Senior Bonds Debt Service Reserve Account; Fifth, subject to paragraph (f) below, from the Project Account; and Sixth, subject to paragraph (f) below, from the Operating Reserve Fund. (c) Notwithstanding anything described in Flow of Funds above or the Master Resolution to the contrary, if on any date there are not sufficient moneys in the Revenue Fund to make the transfers described in Flow of Funds above to the First Tier Subordinate Bonds Debt Service Account on such date (for purposes of this paragraph (c), the subject transfer date ), moneys shall be transferred to the First Tier Subordinate Bonds Debt Service Account from the following sources in an amount which, together with the amount to be transferred thereto from the Revenue Fund on such date, will result in the First Tier Subordinate Bonds Debt Service Account having the balance required to be on deposit therein pursuant to the provisions of the Resolutions described in Flow of Funds above: (i) If no Event of Default with respect to the First Tier Subordinate Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, subject to paragraph (f) below, from the General Surplus Account; Second, subject to paragraph (f) below, from the Renewal and Replacement Fund, provided that the sum of the amounts transferred to the First Tier Subordinate Bonds Debt Service Account as described in this subparagraph and subparagraph Second of paragraph (ii) of this paragraph (c), to the Second Tier Subordinate Bonds Debt Service Account as described in this subparagraph or subparagraph Second of paragraph (i) and subparagraph Second of paragraph (ii) of paragraph (d) below and to the Third Tier Subordinate Bonds Debt Service

103 Account as described in subparagraph Second of paragraph (i) and subparagraph Second of paragraph (ii) of paragraph (e) below, shall not on any date exceed 50% of the least of: (A) the Renewal and Replacement Fund Requirement; (B) the amount on deposit in the Renewal and Replacement Fund on the subject transfer date; and (C) the difference between: (1) the sum of (aa) the amount on deposit in the Renewal and Replacement Fund on the first date (for purposes of this clause (C), the first transfer date ) on which any amounts are transferred to the First Tier Subordinate Bonds Debt Service Account as described in this subparagraph or subparagraph Second of paragraph (ii) of this paragraph (c), to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (d) below or to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (e) below and (bb) any amounts transferred to the Renewal and Replacement Fund described in Flow of Funds above at any time after the first transfer date and on or before the subject transfer date; and (2) any amounts on deposit in the Renewal and Replacement Fund that have been used, at any time after the first transfer date and on or before the subject transfer date, to pay costs of maintenance and repair of, and environmental mitigation for, the Project described in Renewal and Replacement Fund below; Third, from the First Tier Subordinate Bonds Debt Service Reserve Account; Fourth, subject to paragraph (f) below, from the Project Account; and Fifth, if and only if an Event of Default with respect to the Senior Bonds has occurred and is continuing and subject to paragraph (f) below, from the Operating Reserve Fund. (ii) If an Event of Default with respect to the First Tier Subordinate Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, subject to paragraph (f) below, from the General Surplus Account; Second, subject to paragraph (f) below, from the Renewal and Replacement Fund, provided that sum of the amounts transferred to the First Tier Subordinate Bonds Debt Service Account as described in this subparagraph and subparagraph Second of paragraph (i) of this paragraph, to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) and subparagraph Second of paragraph (ii) of paragraph (d) below and to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) and subparagraph Second of paragraph (ii) of paragraph (e) below, shall not on any date exceed 50% of the least of: (A) the Renewal and Replacement Fund Requirement, (B) the amount on deposit in the Renewal and Replacement Fund on the subject transfer date, and (C) the difference between: A-28 (1) the sum of (aa) the amount on deposit in the Renewal and Replacement Fund on the first date (for purposes of this clause (C), the first transfer

104 date ) on which any amounts are transferred to the First Tier Subordinate Bonds Debt Service Account as described in this subparagraph or subparagraph Second of paragraph (i) of this paragraph, to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (d) below or to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (e) below and (bb) any amounts transferred to the Renewal and Replacement Fund described in Flow of Funds above at any time after the first transfer date and on or before the subject transfer date, and (2) any amounts on deposit in the Renewal and Replacement Fund that have been used, at any time after the first transfer date and on or before the subject transfer date, to pay costs of maintenance and repair of, and environmental mitigation for, the Project described in Renewal and Replacement Fund below; Third, from the First Tier Subordinate Bonds Debt Service Reserve Account; Fourth, subject to paragraph (f) below, from the Project Account; and Fifth, if and only if an Event of Default with respect to the Senior Bonds has occurred and is continuing and, subject to paragraph (f) below, from the Operating Reserve Fund. (d) Notwithstanding any provisions of the Resolutions described in Flow of Funds above or in the Master Resolution to the contrary, if on any date there are not sufficient moneys in the Revenue Fund to make the transfers required by Flow of Funds above to the Second Tier Subordinate Bonds Debt Service Account on such date (for purposes of this paragraph, the subject transfer date ), moneys shall be transferred to the Second Tier Subordinate Bonds Debt Service Account from the following sources in an amount which, together with the amount to be transferred thereto from the Revenue Fund on such date, will result in the Second Tier Subordinate Bonds Debt Service Account having the balance required to be on deposit therein described in Flow of Funds above: (i) If no Event of Default with respect to the Second Tier Subordinate Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, subject to paragraph (f) below, from the General Surplus Account; and Second, subject to paragraph (f) below, from the Renewal and Replacement Fund, provided that the sum of the amounts transferred to the Second Tier Subordinate Bonds Debt Service Account as described in this subparagraph and subparagraph Second of paragraph (ii) of this paragraph, to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above and to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) and subparagraph Second of paragraph (ii) of paragraph (e) below, shall not on any date exceed 50% of the least of: (A) the Renewal and Replacement Fund Requirement; (B) the amount on deposit in the Renewal and Replacement Fund on the subject transfer date; and (C) the difference between: (1) the sum of (aa) the amount on deposit in the Renewal and Replacement Fund on the first date (for purposes of this clause (C), the first transfer date ) on which any amounts are transferred to the Second Tier Subordinate Bonds Debt Service Account as described in this paragraph or subparagraph Second of paragraph (ii) of this paragraph, to the First Tier Subordinate Bonds Debt Service A-29

105 Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above or to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (e) below and (bb) any amounts transferred to the Renewal and Replacement Fund described in Flow of Funds above at any time after the first transfer date and on or before the subject transfer date; and (2) any amounts on deposit in the Renewal and Replacement Fund that have been used, at any time after the first transfer date and on or before the subject transfer date, to pay costs of maintenance and repair of, and environmental mitigation for, the Project described in Renewal and Replacement Fund below; and Third, subject to paragraph (f) below, from the Project Account. (ii) If an Event of Default with respect to the Second Tier Subordinate Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, subject to paragraph (f) below, from the General Surplus Account; Second, subject to paragraph (f) below, from the Renewal and Replacement Fund, provided that the sum of the amounts transferred to the Second Tier Subordinate Bonds Debt Service Account as described in this subparagraph and subparagraph Second of paragraph (i) of this paragraph, to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above and to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (1) and subparagraph Second of paragraph (ii) of paragraph (e) below, shall not on any date exceed 50% of the least of: (A) the Renewal and Replacement Fund Requirement; (B) the amount on deposit in the Renewal; and Replacement Fund on the subject transfer date, and (C) the difference between: (1) the sum of (aa) the amount on deposit in the Renewal and Replacement Fund on the first date (for purposes of this clause (C), the first transfer date ) on which any amounts are transferred to the Second Tier Subordinate Bonds Debt Service Account as described in this subparagraph or subparagraph Second of paragraph (i) of this paragraph (d), to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above or to the Third Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (e) below and (bb) any amounts transferred to the Renewal and Replacement Fund described in Flow of Funds above at any time after the first transfer date and on or before the subject transfer date; and (2) any amounts on deposit in the Renewal and Replacement Fund that have been used, at any time after the first transfer date and on or before the subject transfer date, to pay costs of maintenance and repair of, and environmental mitigation for, the Project described in Renewal and Replacement Fund below; and Third, subject to paragraph (f) below, from the Project Account; and A-30

106 Fourth, if and only if an Event of Default with respect to the Senior Bonds has occurred and is continuing and, subject to paragraph (f) below, from the Operating Reserve Fund. (e) Notwithstanding anything in the Master Resolution to the contrary, if on any date there are not sufficient moneys in the Revenue Fund to make the transfers described in Flow of Funds above to the Third Tier Subordinate Bonds Debt Service Account on such date (for purposes of this paragraph, the subject transfer date ), moneys shall be transferred to the Third Tier Subordinate Bonds Debt Service Account from the following sources in an amount which, together with the amount to be transferred thereto from the Revenue Fund on such date, will result in the Third Tier Subordinate Bonds Debt Service Account having the balance required to be on deposit therein described in Flow of Funds above: (i) If no Event of Default with respect to the Third Tier Subordinate Bonds has occurred and is continuing, from the following sources in the priority in which listed: First, subject to paragraph (f) below, from the General Surplus Account; and Second, subject to paragraph (f) below, from the Renewal and Replacement Fund, provided that (aa) the amounts transferred to the Third Tier Subordinate Bonds Debt Service Account as described in o this subparagraph on any date shall never exceed the interest due on the Third Tier Subordinate Bonds on or before such date and (bb) the sum of the amounts to the Third Tier Subordinate Bonds Debt Service Account as described in this subparagraph and subparagraph Second of paragraph (ii) of this paragraph, to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above and to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (d) above shall not on any date exceed 50% of the least of: (A) the Renewal and Replacement Fund Requirement; (B) the amount on deposit in the Renewal and Replacement Fund on the subject transfer date; and (C) the difference between: (1) the sum of (aa) the amount on deposit in the Renewal and Replacement Fund on the first date (for purposes of this clause (C), the first transfer date ) on which any amounts are transferred to the Third Tier Subordinate Bonds Debt Service Account as described in this subparagraph or subparagraph Second of paragraph (ii) of this paragraph, to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above or to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (d) below and (bb) any amounts transferred to the Renewal and Replacement Fund described in Flow of Funds at any time after the first transfer date and on or before the subject transfer date; and (2) any amounts on deposit in the Renewal and Replacement Fund that have been used, at any time after the first transfer date and on or before the subject transfer date, to pay costs of maintenance and repair of, and environmental mitigation for, the Project described in Renewal and Replacement Fund below; and Third, subject to paragraph (f) below, from the Project Account. (ii) If an Event of Default with respect to the Third Tier Subordinate Bonds has occurred and is continuing, from the following sources in the priority in which listed: A-31

107 First, subject to paragraph (f) below, from the General Surplus Account; Second, subject to paragraph (f) below, from the Renewal and Replacement Fund, provided that (aa) the amounts transferred to the Third Tier Subordinate Bonds Debt Service Account as described in this subparagraph shall never exceed the interest due on the Third Tier Subordinate Bonds on or before such date and (bb) the sum of the amounts transferred to the Third Tier Subordinate Bonds Debt Service Account as described in this subparagraph and subparagraph Second of paragraph (i) of this paragraph, to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above and to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (d) above, shall not on any date exceed 50% of the least of: (A) the Renewal and Replacement Fund Requirement; (B) the amount on deposit in the Renewal and Replacement Fund on the subject transfer date; and (C) the difference between: (1) the sum of (aa) the amount on deposit in the Renewal and Replacement Fund on the first date (for purposes of this clause (C), the first transfer date ) on which any amounts are transferred to the Third Tier Subordinate Bonds Debt Service Account as described in this subparagraph or subparagraph Second of paragraph (i) of this paragraph, to the First Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (c) above or to the Second Tier Subordinate Bonds Debt Service Account as described in subparagraph Second of paragraph (i) or subparagraph Second of paragraph (ii) of paragraph (d) above and (bb) any amounts transferred to the Renewal and Replacement Fund described in Flow of Funds above at any time after the first transfer date and on or before the subject transfer date; and (2) any amounts on deposit in the Renewal and Replacement Fund that have been used, at any time after the first transfer date and on or before the subject transfer date, to pay costs of maintenance and repair of, and environmental mitigation for, the Project described in Renewal and Replacement Fund below; and Third, subject to paragraph (f) below, from the Project Account; and Fourth, if and only if an Event of Default with respect to the Senior Bonds has occurred and is continuing and, subject to paragraph (f) below, from the Operating Reserve Fund. (f) If the amount to be transferred as described in this section to a Debt Service Account for more than one Tier of Bonds from any Fund, Account or Subaccount other than the Project Account exceeds the balance then on deposit in the Fund, Account or Subaccount from which moneys are to be transferred, the moneys available in such Fund, Account or Subaccount shall be transferred to such Debt Service Accounts in the order in which such Debt Service Accounts are to be funded as described in Flow of Funds above; provided that if such a transfer is to be made from the Surplus Fund or any Account thereof to both the Senior Bonds Debt Service Account and the Vehicle Registration Fee Bonds Debt Service Account, the amounts transferred to the Vehicle Registration Fee Bonds Debt Service Account and the Senior Bonds Debt Service Account shall be determined by MBIA. Any moneys transferred to a Debt Service Account for the First Tier Subordinate Bonds, the Second Tier Subordinate Bonds or the Third Tier Subordinate Bonds from the Project Account as described in this section shall be transferred only to the extent of the proportionate share of the moneys on deposit in the Project Account on the first date on which moneys are transferred from the Project Account to the Debt Service Account for such Tier of Bonds that bears the same ratio to the total amount of moneys then on deposit in the A-32

108 Project Account on such date as the ratio of (i) the Outstanding principal amount on such date of such Tier of Bonds bears to (ii) the Outstanding principal amount on such date of all Bonds. Debt Service Fund (a) There shall be paid out of the Debt Service Fund on or before each Interest Payment Date for any of the Bonds, the amount required for the interest payment on such date, and there shall be paid out of the Debt Service Fund on or before each Principal Installment due date, the amount required for the Principal Installment payable on such due date; provided, however, that if any special fund, account or subaccount has been created for the payment of capitalized interest on the Bonds or any Series thereof, any amounts transferred to the Debt Service Fund from such special fund, account or subaccount shall be used to pay such interest prior to the use of any other amounts in the Debt Service Fund for such purpose. On or before any Redemption Date for Bonds to be redeemed, there shall also be paid out of the Debt Service Fund, from available amounts deposited therein from time to time, the Redemption Price of and interest on the Bonds then to be redeemed. (b) Amounts in the Debt Service Fund with respect to any Sinking Fund Installment (together with amounts in the Debt Service Fund with respect to interest on the Bonds for which such Sinking Fund Installment was established) shall be applied to the redemption of Bonds of the Series and maturity for which such Sinking Fund Installment was established in an amount not exceeding that necessary to complete the retirement of such Sinking Fund Installment in accordance with the provisions of the Supplemental Resolution governing the redemption of such Bonds. (c) The Trustee shall, at any time at the direction of the Authority, apply amounts available in the Debt Service Fund for the payment of any Sinking Fund Installments to pay the Redemption Price of Bonds of any Series and maturity for which such Sinking Fund Installment has been established, which Bonds may be purchased on the open market at a price (excluding accrued interest to the purchase date but including any brokerage or other charges) no greater than the applicable Redemption Price of such Bonds and the applicable provisions of the Master Resolution. (d) Notwithstanding any other provision of the Master Resolution, amounts in the Vehicle Registration Fee Bonds Account, the Senior Bonds Account, the First Tier Subordinate Bonds Account, the Second Tier Subordinate Bonds Account and the Third Tier Subordinate Bonds Account of the Debt Service Fund shall be applied only to the payment of Debt Service on the Bonds of the same designation, in each case in the manner and at the times provided in paragraphs (a), (b) and (c) above. Debt Service Reserve Fund (a) If on any date, after giving effect to all transfers pursuant to the provisions of the Resolutions described in Flow of Funds above, the amount in the Debt Service Fund shall be less than the amount required to make all payments of principal and Redemption Price of and interest on the Bonds then due and payable, the Trustee shall transfer amounts from the Debt Service Reserve Fund to the extent necessary to make such payments. (b) When the amount in the Debt Service Reserve Fund, together with the amounts in the Debt Service Fund, is sufficient to fully pay all Outstanding Bonds in accordance with their terms (including principal or Redemption Price and interest), the funds on deposit in the Debt Service Reserve Fund may, at the direction of the Authority, be applied to pay the principal and Redemption Price of and interest on all Outstanding Bonds. (c) Except as otherwise provided in the Master Resolution, whenever the amount in the Debt Service Reserve Fund exceeds the Debt Service Reserve Fund Requirement, the Trustee shall transfer such excess to the Debt Service Fund. (d) Notwithstanding any other provision of the Master Resolution, (i) the Vehicle Registration Fee Bonds Debt Service Reserve Account, the Senior Bonds Debt Service Reserve Account and the First Tier Subordinate Bonds Debt Service Reserve Account of the Debt Service Reserve Fund shall be maintained and administered as separate accounts for the purposes of securing, and shall be applied only to the payment of, the principal and Redemption Price of and interest on Bonds of the same designation and (ii) to the extent required to make such payments, moneys from each such Account shall be transferred to the Account of the Debt Service Fund of the same designation A-33

109 (e) Notwithstanding any other provision of the Master Resolution or of any Supplemental Resolution, the Trustee at the written direction of the Authority at any time shall substitute for the cash deposit in the Debt Service Reserve Fund or any Account or Subaccount thereof, a letter of credit, surety bond, insurance policy, agreement guaranteeing payment or other undertaking by a financial institution to insure that cash in the amount otherwise required to be maintained therein will be available to the Trustee as needed, provided that (i) the Trustee receives written evidence (or other evidence satisfactory to the Trustee) from each Rating Agency that such substitution will not, by itself, result in a withdrawal of or reduction in its rating of any Bonds and (ii) if such substitution is to occur with respect to the Vehicle Registration Fee Bonds Debt Service Reserve Account or the Senior Bonds Debt Service Reserve Account, MBIA consents in writing (which consent may be given or withheld at the sole discretion of MBIA). Upon any such substitution, the cash deposit in such Fund, Account or Subaccount shall be transferred to the Construction Fund or the Revenue Fund, as directed by the Authority. Renewal and Replacement Fund Moneys held in the Renewal and Replacement Fund shall be transferred to the Debt Service Fund to the extent described in Other Transfers to Debt Service Fund above and otherwise shall be distributed to, or to the order of, the Authority at the written request of an Authorized Authority Representative to be applied for the purpose of paying costs of maintenance and repair of, and environmental mitigation for, the Project. Surplus Fund Moneys transferred to the Surplus Fund as described in Flow of Funds above and, except for any Termination Payment received by the Authority, any other moneys deposited in or transferred to the Surplus Fund shall be deposited in the General Surplus Account. Any Termination Payments received by the Authority shall be deposited directly to the Termination Payment Account. Moneys held in the General Surplus Account shall be transferred to the Debt Service Fund or one or more of the Accounts thereof to the extent described in Other Transfers to Debt Service Fund above and otherwise shall be distributed to, or to the order of, the Authority at the written request of an Authorized Authority Representative to be applied: (i) prior to the Completion Date, for the purpose of paying Costs of the Project relating to portions of the Project that have been constructed, are under construction or are contiguous to portions of the Project that have been constructed or are under construction; and (ii) following the Completion Date: (A) for the redemption of Bonds, (B) as may be required by the Establishing Contract and (C) for any other purpose now or hereafter authorized or permitted by law. Notwithstanding the foregoing, amounts on deposit in the General Surplus Account shall be used at any time (I) to pay any Termination Payments or Miscellaneous Swap Payments payable by the Authority, (II) to make any payments due and owing to MBIA, (III) to make any payments due and owing to the 2001 Bank and (IV) to make any payments required upon the execution and delivery of a Related Financial Transaction or any Credit Facility. Moneys held in the Termination Payment Account shall be used to make any payments required to be made by the Authority upon the execution and delivery of a Related Financial Transaction, unless MBIA consents in writing to the release of such moneys from the Termination Payment Account. Moneys held in the Termination Payment Account shall be retained therein until MBIA has consented in writing to the execution and delivery of the Related Financial Transaction or to the release of such moneys to the General Surplus Account as specified below. Any Termination Payments released from the Termination Payment Account and not used to make a payment upon the execution and delivery of a Related Financial Transaction shall be deposited to the General Surplus Account. Nothing in the Master Resolution shall prohibit the Authority from depositing directly into the Surplus Fund or any of the Accounts thereof moneys that, prior to such deposit, are not part of the Trust Estate. Rebate Fund Moneys shall be deposited into the Rebate Fund pursuant to the Resolutions as described in Flow of Funds above in the amount required pursuant to the tax compliance certificate delivered by the Authority in connection with the issuance of the Bonds issued pursuant to the First Supplemental Resolution and pursuant to any similar instrument or certificate delivered by the Authority in connection with the issuance of any additional Bonds (collectively, the Tax Compliance Certificates ). Notwithstanding any other provision of the Master Resolution or of any other instrument, moneys on deposit in the Rebate Fund shall not be part of the Trust Estate and, except as otherwise provided in this paragraph, the Rebate Fund shall be used solely for the purpose of paying amounts due to the United States of America with respect to the Bonds pursuant to Section 148(f) of the Code. Moneys on deposit in the Rebate Fund shall be A-34

110 forwarded to the United States Treasury (at the address provided in the Tax Compliance Certificates) at the times and in the amounts set forth in the Tax Compliance Certificates. If the moneys on deposit in the Rebate Fund are insufficient for the purpose thereof, the Authority shall transfer moneys in the amount of the insufficiency to the Rebate Fund from any and all sources available to it other than draws on the MBIA Insurance Policy. Upon receipt by the Authority of an opinion of Bond Counsel to the effect that the amount in the Rebate Fund is in excess of the amount required to be contained therein, such excess shall be transferred to the Authority. Operating Reserve Fund Moneys held in the Operating Reserve Fund shall be transferred to the Debt Service Fund to the extent required by the Resolutions as described in Other Transfers to Debt Service Fund above and otherwise shall be distributed to, or to the order of, the Authority at the written request of an Authorized Authority Representative to be applied to Operating Expenses not paid from other sources. Investment of Funds Moneys held in any Fund or Account to be held by the Trustee or any Depository shall be invested and reinvested by the Trustee as promptly as practicable, in accordance with a Letter of Instructions, except that moneys drawn on the MBIA Insurance Policy shall not be invested, and moneys in any Funds or Account held by the Authority shall be invested and reinvested by the Authority, in each case to the fullest extent practicable and permitted by laws of the State, in Investment Securities; provided, however, that moneys held in the Vehicle Registration Fee Bonds Debt Service Reserve Account and the Senior Bonds Debt Service Reserve Account shall only be invested in (i) Defeasance Investment Securities, (ii) Investment Securities held in the Senior Bonds Debt Service Reserve Account, and (iii) other Investment Securities approved by MBIA in writing. Except as otherwise provided in the Master Resolution, Investment Securities in all Funds and Accounts shall mature, or the principal of and accrued interest on such Investment Securities shall be available for withdrawal without penalty, not later than such times as shall be necessary to provide moneys when needed for payment to be made from such Funds and Accounts; provided, however, that (A) in the case of the Senior Bonds Debt Service Reserve Account, if the Net Revenues are not in the amount required by the Master Resolution at any time after September 1, 2001, until such time as the Net Revenues are in the amount required by the Master Resolution, the Investment Securities therein shall be limited to (1) Defeasance Investment Securities that mature, or the principal of and accrued interest on such Investment Securities shall be available for withdrawal without penalty, within two years of the date of deposit therein, (2) Investment Securities held in the Senior Bonds Debt Service Reserve Account and (3) Investment Securities approved by MBIA in writing; (B) in the case of the First Tier Subordinate Bonds Debt Service Reserve Account, no less than 20% of the Amortized Value of the Investment Securities therein shall at all times mature, or the principal of and accrued interest on such Investment Securities shall be available for withdrawal without penalty, within three years of the date of deposit therein; and (C) in the case of the Vehicle Registration Fee Bonds Debt Service Reserve Account, the Investment Securities therein shall mature within five years of the date of deposit therein (or within such longer period to which MBIA consents in writing). The Board has determined that the Investment Securities and Defeasance Investment Securities that are not specified in part 6 of article 75 of title 24, Colorado Revised Statutes, as amended, meet the standard established in Section , Colorado Revised Statutes, as amended, the income is at least comparable to income available on investments specified in said part 6 and such investments will assist the Authority in the financing, constructing, maintenance or operation of public highways. Particular Covenants of the Authority The Authority represents, covenants and agrees with the Bondowners as follows: Payment of Bonds. The Authority shall duly and punctually pay or cause to be paid, but solely from the Trust Estate pledged therefor by the Master Resolution, the principal and Redemption Price of and interest on the Bonds, at the date and places and in the manner mentioned in the Bonds, according to the true intent and meaning thereof. Establishing Contract. The Authority shall use its best efforts to implement the terms and provisions of the Establishing Contract in accordance with the true intent and meaning thereof. Money for Bond Payments to be Held in Trust. Except as otherwise provided by Supplemental Resolution, on or before each payment date of the principal and Redemption Price of or interest on any Bonds, the Authority shall deposit with or cause the Trustee to make available to each Paying Agent a sum sufficient to pay the principal and A-35

111 Redemption Price of or interest on the Bonds so becoming due, such sum to be held in trust for the benefit of the Owners of the Bonds entitled to such principal, Redemption Price or interest. The Authority will cause each Paying Agent other than the Trustee to execute and deliver an instrument in which such Paying Agent shall agree with the Authority, subject to the provisions of this Section, that such Paying Agent will hold all sums held by it for the payment of principal and Redemption Price, or interest on, Bonds in trust for the benefit of the Owners of the Bonds entitled thereto until such sums shall be paid to such Owners of the Bonds or otherwise disposed of as provided in the Master Resolution; give the Trustee notice of any default in the making of any such payment of principal, Redemption Price, or interest; and at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Authority may at any time, for the purpose of obtaining the satisfaction and discharge of the Master Resolution or for any other purpose, pay, or direct any Paying Agent to pay, to the Trustee or an escrow agent all sums held in trust by the Authority or such Paying Agent, such sums to be held by the Trustee or an escrow agent upon the same trusts as those upon which such sums were held by the Authority or such Paying Agent; and upon such payment by any Paying Agent to the Trustee or an escrow agent, such Paying Agent shall be released from all further liabilities with respect to such money. Power to Adopt Master Resolution, Issue Bonds and Pledge Trust Estate. The Authority is duly authorized under all applicable laws to create and issue the Bonds, to adopt the Master Resolution, and to pledge the Trust Estate pledged by the Master Resolution in the manner and to the extent provided in the Master Resolution and no other authorization or consent is required thereof. The Trust Estate so pledged is and will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto except the pledge granted by the Master Resolution to the extent provided in the Master Resolution and all action on the part of the Authority to that end has been and will be duly and validly taken. The Master Resolution has been duly and lawfully adopted by the Authority, is in full force and effect and is valid and binding upon the Authority and enforceable in accordance with its terms. The Bonds and the provisions of the Master Resolution are and will be the valid and legally enforceable obligations of the Authority in accordance with their terms and the terms of the Master Resolution subject only to the laws relating to bankruptcy, creditors rights and principles of governmental law and equity. The Authority shall at all times, to the extent permitted by law, defend, preserve and protect its title to the Trust Estate, the pledge of the Trust Estate under the Master Resolution and all the rights of the Bondowners under the Master Resolution against all claims and demands of all persons whomsoever. Construction Contracts. The Authority covenants and agrees that before entering into any construction contract it will, to the extent required by law, require each person, firm or corporation with whom it may contract for labor or materials in connection with the construction of the Project or any part thereof to furnish a performance bond and a payment bond, and to carry workmen s compensation or employer s liability insurance as may be required by law. The Authority further covenants and agrees that the proceeds of any such performance bond with respect to any construction contract under which the Authority s obligations are to be paid from a Fund, Account or Subaccount other than the General Surplus Account will forthwith, upon receipt of such proceeds, be deposited in the Construction Fund and applied toward the completion of the contract in connection with which such performance bond and a payment shall have been furnished. All contracts of the Authority for the Project shall be made and awarded in accordance with law. Tax Covenant. The Authority covenants for the benefit of the Owners of the Bonds that it will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof, any other funds of the Authority or any facilities financed or refinanced with the proceeds of the Bonds if such action or omission (a) would cause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code; or (b) would cause interest on the Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Code, except to the extent such interest is required to be included in the adjusted current earnings adjustment applicable to corporations under Section 56 of the Code in calculating corporate alternative minimum taxable income. In furtherance of this covenant, the Authority agrees to comply with the procedures set forth in the Tax Compliance Certificate delivered by the Authority in connection with the issuance of the 1997 Bonds and the provisions of any similar certificate or instrument delivered by the Authority in connection with the issuance of any additional Bonds. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Authority in fulfilling the above covenants under the Code have been met. The covenants set forth under this caption shall not apply to any Series of Bonds if, at the time of issuance, the Authority intends the interest on such Series of Bonds to be subject to federal income tax. Maintenance of Existence; Performance of Obligations; Enterprise Status. The Authority will at all times maintain its corporate existence and will use its best efforts to maintain, preserve and renew all the rights and powers A-36

112 provided to it by the Act or otherwise; provided, however, that this covenant shall not prevent the assumption, by operation of law or otherwise, by any political subdivision or other entity of the rights and obligations of the Authority under the Master Resolution, but only if and to the extent such assumption does not materially impair the rights of the Owners of any Outstanding Bonds or MBIA. The Authority shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Authority under the provisions of the Master Resolution, any Supplemental Resolution, any other instrument or other arrangement to which it is a party that benefits the Owners of any Outstanding Bonds, the Act and any other law, regulation, rule, order or judgment applicable to the Authority. The Authority covenants and agrees that it is an enterprise as defined in Article X, Section 20 of the State Constitution. The Authority further covenants and agrees to continue to maintain its enterprise status under Article X, Section 20 of the Colorado Constitution unless and until it receives an opinion of Bond Counsel that termination of such status will not adversely affect the security, rights, privileges or powers of the Owners of any Outstanding Bonds or MBIA and will not adversely affect the Authority s ability to finance, construct, operate or maintain the Project in a manner that will produce Revenues sufficient to meet its obligations under the Master Resolution and under any Supplemental Resolution. Further Assurances. At any and all times the Authority shall, 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, granting, pledging, assigning and confirming the Trust Estate, Revenues, Funds, Accounts, Investment Securities held in any Fund or Account under the Master Resolution, and the Authority s right, title and interest in and to the foregoing, and all other moneys, securities and funds pledged or assigned, or intended so to be, or which the Authority may become bound to pledge or assign. Sale or Encumbrance of Project. The Authority covenants that, as long as there are any Outstanding Bonds, and except as in the Master Resolution otherwise permits, it will not sell or otherwise dispose of the Project or any part thereof unless it determines that such sale or other disposal is in the best interest of the Project and not materially adverse to the rights of the Owners of the Bonds or MBIA. Nothing in this paragraph, however, shall limit the ability of the Authority to dispose of surplus property or to enter into contracts with respect to the lease or operation of all or any part of the Project. Annual Reports of Consulting Engineer and Risk Management Consultant. After each portion of the Project is completed and operational and after the entire Project is completed and operational, the Authority will cause the Consulting Engineer and a consultant with expertise in risk management (the Risk Management Consultant ) to inspect the portions of the Project that have been completed and to submit written reports not less than annually. The report of the Consulting Engineer shall include (a) the Consulting Engineer s findings as to whether the completed portions of the Project have been maintained in good repair, working order and condition; (b) the Consulting Engineer s advice and recommendations as to the proper maintenance and repair of the completed portions of the Project during the ensuing Fiscal Year and an estimate of the amount of money necessary for such purposes; and (c) the Consulting Engineer s determination as to the amount necessary for the purpose of the Renewal and Replacement Fund Requirement, as required by the definition of Renewal and Replacement Fund Requirement in the Master Resolution. The report of the Risk Management Consultant shall include the Risk Management Consultant s advice and recommendation as to insurance to be carried under the provisions of the Master Resolution. Copies of the reports delivered as described in this paragraph shall be filed with the Trustee and MBIA. Annual Budget. After the Project or any part thereof is completed and operational, the Authority shall file with the Trustee and MBIA an annual budget for the Project for each Fiscal Year. Each such annual budget shall include the estimated Operating Expenses for such Fiscal Year, in addition to any amount required to be deposited during such Fiscal Year into any Fund or Account as described in Flow of Funds above. Each such annual budget may set forth such additional material as the Authority may determine. The Authority may, at any time, adopt an amended annual budget for the remainder of the then current Fiscal Year. Until a new annual budget is adopted, the prior Fiscal Year s annual budget shall be deemed to be the annual budget for that Fiscal Year. Limitation on Operating Expenses. All payments for Operating Expenses in any Fiscal Year will not exceed the reasonable amount required therefor, and the Authority will not expend any amount or incur any obligations for Operating Expenses in excess of the amounts provided for Operating Expenses in the Authority s annual budget, or amended or supplemental annual budget, unless the Authority determines that such expenditure is necessary and there is A-37

113 not time to amend or supplement the budget. Nothing in this paragraph shall limit the amount which the Authority may expend for Operating Expenses in any Fiscal Year. Accounts and Reports. The Authority shall keep proper books of records and account in which complete and correct entries shall be made of its transactions in accordance with Generally Accepted Accounting Principles. The Funds and Accounts established by the Master Resolution, such books, and all other books and papers relating to the Project, shall, to the extent permitted by law, at all times be subject to the inspection of the Trustee and MBIA. The Authority will permit the Trustee and MBIA, at all reasonable times, to take copies and extracts from the books of record and account, and will from time to time furnish, or cause to be furnished, to the Trustee or MBIA, such information and statements as the Trustee or MBIA may reasonably request, all as may be reasonably necessary for the purpose of determining performance or observance by the Authority of the covenants, conditions and obligations contained in the Master Resolution. The Trustee shall advise the Authority within 15 days after the end of each month of its transactions during such month relating to the Funds and Accounts held by it under the Master Resolution. The Authority shall create accounts within any Fund or Account created by the Master Resolution or any Supplemental Resolution when in the judgment of the Authority the creation of such account will enable the Authority to administer the Project or regulate investments or limit returns on such investments. The Authority shall annually cause a Consultant to deliver a report to the Trustee and MBIA which specifies the amount of Revenues which need to be received in the Revenue Fund as described in Flow of Funds above for the future payment of Debt Service. Rules and Regulations; Maintenance of Project. The Authority covenants that, subject to the terms of the Establishing Contract: (a) it will establish and enforce reasonable rules and regulations governing the use of the Project and the operation thereof, (b) it will maintain and operate the Project in an efficient and economical manner, (c) from the Revenues of the Project or other moneys legally available therefor, it will at all times maintain the same in good repair and in sound operating condition and will make all necessary repairs, renewals and replacements, and (d) it will comply with all valid acts, rules, regulations, orders and directions of any legislative, executive, administrative or judicial body applicable to the Project. Payment of Lawful Claims. The Authority covenants that, from the Trust Estate, it will pay or cause to be discharged, or will make adequate provision to satisfy and discharge, all lawful claims and demands for labor, materials, supplies or other object which, if unpaid, might by law become a lien upon the Trust Estate; provided, however, that nothing in this paragraph shall require the Authority to pay or cause to be discharged, or make provision for, any such lien or charge so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings. Consulting Engineers. The Authority covenants that, as long as there are any Outstanding Bonds, one or more Consulting Engineers selected by the Authority shall be employed as necessary to comply with the Master Resolution, including, but not limited to, the determination of the Renewal and Replacement Fund Requirement. Insurance. The Authority covenants that it will insure the Project or cause the Project to be insured in such manner, in such amounts and against such loss, damage and liability as is customary for projects similar to the Project that are operated by Persons similar to the Person operating the Project. Revenue Covenant. (a) There shall be fixed, charged and collected pursuant to the Act, the Establishing Contract or otherwise such fees, assessments, tolls or other charges in respect of the Project as shall be required to produce Revenues which, beginning on the first day of the second full Fiscal Year immediately following the Completion Date of the portion of the Project between Parker Road and 120th Avenue, including the interchanges at Parker Road and 120th Avenue, and for each Fiscal Year thereafter, shall equal at least 1.30 times the Aggregate Debt Service due in such Fiscal Year, after provision for the payment of Operating Expenses and any transfers of Revenues to any other Fund or Account required under the Master Resolution or under any Parity Obligation Instrument. For purposes of this provision, Revenues and Aggregate Debt Service in each fiscal year shall be reduced by the Aggregate Debt Service due in such Fiscal Year on Vehicle Registration Fee Bonds A-38

114 (b) Before the beginning of each such Fiscal Year, the Authority will review the financial status of the Project in order to estimate and determine whether Revenues for the current Fiscal Year and for the following Fiscal Year will be sufficient to comply with the covenant set forth in paragraph (a) above. In connection with the preparation of the annual budget for each Fiscal Year, the Authority will prepare and file with the Trustee and MBIA a copy of its estimate of Revenues, Operating Expenses, Debt Service and any transfers of Revenues required to be made to any other Fund or Account under the Master Resolution or under any Supplemental Resolution or Parity Bond Instrument, together with a statement of the pertinent estimates and assumptions, which must take into consideration the cost of completing any uncompleted portion of all Applicable Portions of the Project defined in Supplemental Resolutions and the issuance of future Series of Bonds or series of Parity Obligations, if necessary, to finance the completion. If the Authority in adopting any annual budget determines that Revenues may be inadequate to meet such covenant, or if the audited financial reports regarding the Project prepared by the Authority show that the Authority did not satisfy such covenant for the prior Fiscal Year, the Authority shall, within 60 days of such determination or the date such audit is final but subject to the rights of MBIA stated below engage a Toll Road Consultant who shall conduct a study and, within 60 days of such engagement, recommend such actions as will provide sufficient Revenues in the following Fiscal Year to comply with the covenant in paragraph (a) above and that will provide additional Revenues in such following Fiscal Year and later years to eliminate any deficiency at the earliest practicable time. A copy of such study and recommendations shall be filed with the Trustee and MBIA. The Authority will take such recommended action no later than 60 days after the receipt of such recommendations from the Toll Road Consultant. Prior to engaging a Toll Road Consultant for purposes of complying with the above paragraph, the Authority shall provide written notice to MBIA stating that it intends to do so and nominating a Toll Road Consultant by name, address and telephone number. If MBIA approves the Toll Road Consultant nominated by the Authority in writing or does not, within 15 days of MBIA s receipt of the notice in which the Authority nominates a Toll Road Consultant, deliver to the Authority the notice of nonapproval described in the next sentence, the Authority shall be entitled to engage the Toll Road Consultant nominated in its notice. If, within 15 days of MBIA s receipt of the notice in which the Authority nominates a Toll Road Consultant, MBIA delivers a written notice to the Authority (i) stating that MBIA does not approve the Toll Road Consultant nominated by the Authority and (ii) nominating at least two Toll Road Consultants (by name, address and telephone number) that MBIA would approve, the Authority shall use its best efforts to engage one of the Toll Road Consultants nominated by MBIA. If the Authority is unable to engage a Toll Road Consultant nominated by MBIA, it shall notify MBIA in writing, specifying in detail the reasons why it is unable to engage such a Toll Road Consultant. In such event, MBIA shall be entitled to nominate additional Toll Road Consultants until the Authority engages one of them. The 60-day period for engaging a Toll Road Consultant set forth in the preceding paragraph shall be extended as required to comply with this paragraph. (c) Failure to comply with the covenant described in paragraph (a) above will not constitute an Event of Default if either (i) the Authority complies with the covenant described in paragraphs (b) above or (ii) the Toll Road Consultant provides a written opinion to the Trustee and MBIA that any action that will comply with such covenant is impracticable at that time; provided, however, that failure to comply with the covenant described in paragraph (a) above for a period of 36 consecutive months will in all events constitute an Event of Default regardless of whether an event described in clause (i) or (ii) has occurred. For purposes of the preceding sentence, impracticable means (A) such action would not result in compliance with the covenant described in paragraph (a) above, (B) the economic cost of taking such action exceeds the economic benefit resulting from such action or (C) the Authority does not have sufficient available funds to pay the cost of taking such action. Contracts With Other Persons. The Authority reserves the right to enter into contracts with any Person providing for the joint construction, acquisition, improvement, operation, repair, maintenance or replacement of the Project or any part thereof. Any contract entered into by the Authority as described in the provisions of this paragraph may contain such provisions and be upon such terms and conditions as the Authority deems advisable. No Competing Transportation Facilities. The Authority shall not acquire, construct or operate any transportation facility that will compete with the Project in a manner that will reduce the amount of Revenues. Related Financial Transactions. Except for any Related Financial Transaction entered into before the date on which 1997 Bonds are issued, the Authority shall not enter into any Related Financial Transaction unless: (i) on the date the Related Financial Transaction is entered into, the long term debt of the counterparty (or, where applicable, any A-39

115 guarantor or Credit Support Provider (as such term is used in the 1992 ISDA Master Agreement (Multicurrency Cross Border or Local Currency Single Jurisdiction) of such counterparty) is rated at least either AA- by S&P or Aa3 by Moody s; (ii) the conditions set forth in the Resolutions for the issuance of additional Bonds are met with respect to the Series of Bonds to which such transaction relates as determined as of the effective date of such transaction and taking into account the Related Financial Transaction (or, with respect to a Related Financial Transaction relating to a proposed Series of Bonds, such conditions are reasonably expected by the Authority to be met with respect to such Series of Bonds); (iii) the Authority has received the prior written consent of MBIA to such Related Financial Transaction pursuant to the Resolutions; and (iv) the Trustee and MBIA have received an opinion of Bond Counsel, in form and substance satisfactory to the Trustee and MBIA, that such transaction is permitted under Master Resolution and any applicable Supplemental Resolution, is authorized under the laws of the State and will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any of the Bonds. Notwithstanding anything to the contrary contained in the Resolutions: (a) amounts paid or received by the Authority in connection with a Related Financial Transaction (other than any Termination Payments) shall be taken into account in the manner provided in clause (c) of the definition of Debt Service in determining the amount of interest due on the related Series of Bonds for purposes of payments pursuant to the Master Resolution, where such amounts received by the Authority are based on a formula derived from a variable or adjustable index, the Trustee shall, for purposes of making the monthly transfers required under paragraph (b) of Flow of Funds above, assume that the amount that will be received by the Authority on any date scheduled for such receipt during the following month will be the amount that would be produced by such formula if such amount were received on such monthly calculation date (giving effect to any change in the notional amount of such Related Financial Transaction that would occur between such monthly calculation date and the date such amount is to be received); and (b) for purposes of the third paragraph under Security for the Bonds and Parity Obligations in this Appendix, paragraph (c) under Flow of Funds in this Appendix, paragraph (d) under Debt Service Reserve Fund in this Appendix, Payment of Bonds in this Appendix, paragraph (c) under Application of Proceeds in this Appendix, and the first paragraph under Discharge of Master Resolution in this Appendix, Regularly Scheduled Swap Payments payable by the Authority pursuant to any Related Financial Transaction shall be deemed to be interest on Bonds of the same Tier as the Bonds the Debt Service on which is payable from the Account of the Debt Service Fund from which such Regularly Scheduled Swap Payments are payable. Continuation of Vehicle Registration Fees. So long as any Vehicle Registration Fee Bonds are Outstanding, the Authority shall continue to impose the Vehicle Registration Fees without regard to the continuation of a Statewide motor vehicle registration fee or the manner of its collection. Defaults and Remedies Rights and Remedies, Generally. Subject to the provisions of the Master Resolution, the Owners of the Bonds and Parity Obligations and the Trustee acting for all of the Owners of the Bonds and Parity Obligations shall be entitled to all of the rights and remedies provided in the Act and to all of the rights and remedies otherwise provided or permitted by law. Events of Default. Each of the following events has been declared an Event of Default under the Master Resolution: (a) failure to make due and punctual payment of the principal or Redemption Price of any Bond when and as the same shall become due and payable, whether at maturity or by call for redemption, or otherwise; (b) failure to make due and punctual payment of any installment of interest on any Bond or the unsatisfied balance of any Sinking Fund Installment therefor (except when such Sinking Fund Installment is due on the maturity date of such Bond), when and as such interest installment or Sinking Fund Installment shall become due and payable; (c) failure by the Authority in the performance or observance of any other of the covenants, agreements or conditions on its part contained in the Master Resolution or any Supplemental Resolution or in the Bonds, and such failure shall continue for a period of 30 days after written notice thereof to the Authority by the A-40

116 Trustee or to the Authority and to the Trustee by the Owners of not less than 25% in Bond Obligation represented by the Bonds and Parity Obligations Outstanding; (d) if the Authority shall: (i) file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, arrangement, readjustment or composition of its debts or for any other relief under the federal bankruptcy laws or under any other insolvency act or law, State or federal, now or hereafter existing; (ii) take any action indicating its consent to, approval of, or acquiescence in, any such petition or proceeding; (iii) apply for, or consent or acquiesce in the appointment of, a receiver or a trustee of the Authority or for all or a substantial part of its property; (iv) make an assignment for the benefit of creditors; or (v) be unable, or admit in writing its inability, to pay its debts as they mature; (e) if proceedings shall be commenced against the Authority, without its authorization, consent or application, in bankruptcy or seeking reorganization, arrangement, readjustment or composition of its debts or for any other relief under the federal bankruptcy laws or under any other insolvency act or law, State or federal, now or hereafter existing, or seeking the involuntary appointment of a receiver or trustee of the Authority or for all or a substantial part of its property, and the same shall continue for 90 days undismissed or undischarged or shall result in the adjudication of bankruptcy or insolvency; or (f) failure to make any payment comparable to a payment described in paragraph (a) or (b) above with respect to any Parity Obligation in the manner described in the applicable paragraph. Notwithstanding any provision in the Master Resolution to the contrary, no Event of Default described in paragraph (a) or (b) above with respect to any Series of Bonds and no Event of Default described in paragraph (f) above with respect to any Parity Obligation shall be an Event of Default with respect to any other Series of Bonds or series or subseries of Parity Obligations except those that are of the same Tier or otherwise have a parity lien on Revenues. (8.02) Notice of Default. The Trustee shall not be required to give notice to the Authority of any Event of Default under the Master Resolution; provided, however, that upon written request of the Owners of not less than 25% of the aggregate Bond Obligation represented by the affected Bonds and Parity Obligations Outstanding, the Trustee shall give written notice to the Authority of any default or breach constituting an Event of Default described in paragraph (c) under Events of Default above. Specific Remedies. (a) If an Event of Default with respect to the Vehicle Registration Fee Bonds shall occur and be continuing, then, subject to paragraphs (d) and (e) under this caption, the Trustee may, with the written consent of the Owners of not less than a majority of the aggregate Bond Obligation represented by the Vehicle Registration Fee Bonds and any Parity Obligations that have a lien on Revenues that is on a parity with the lien of such Bonds (for purposes of this caption, the Vehicle Registration Fee Obligations ), and shall, at the written direction of a majority of the Bond Obligation represented by the Vehicle Registration Fee Obligations and having been indemnified to its satisfaction: (i) by mandamus or other suit, action or proceeding at law or in equity require the Authority to perform its covenants, representations and duties with respect to the Vehicle Registration Fee Obligations under the Master Resolution; (ii) by action or suit in equity require the Authority to account as if it were the trustee of an express trust for the Owners of the Vehicle Registration Fee Obligations; (iii) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Vehicle Registration Fee Obligations; (iv) take possession, administration and management of all Funds and Accounts (with respect to Bonds) and comparable funds, accounts and subaccounts (with respect to Parity Obligations) securing such Vehicle Registration Fee Obligations and prohibit the Authority from withdrawing moneys therefrom without the Trustee s consent; A-41

117 (v) request that a court of competent jurisdiction appoint, to the extent permitted by law, a receiver or receivers of the Trust Estate, and the income, revenues, profits and use thereof, it being the intent of the Master Resolution that, to the extent permitted by law, the Trustee shall be entitled to appointment of such a receiver as a matter of right; and/or (vi) take such other steps to protect and enforce its rights and the rights of the Owners of the Vehicle Registration Fee Obligations, whether by action, suit or proceeding in aid of the execution of any power or for the enforcement of any other appropriate legal or equitable remedy, including, but not limited to, proceeding by suit or suits, at law or in equity or by any other appropriate legal or equitable remedy, to enforce payment of the principal and Redemption Price of and interest on the Vehicle Registration Fee Obligations. (b) If an Event of Default with respect to the Senior Bonds shall occur and be continuing, then, subject to the paragraphs below, the Trustee may, with the written consent of the Owners of not less than a majority of the aggregate Bond Obligation represented by the Senior Bonds and any Parity Obligations that have a lien on Revenues that is on a parity with the lien of such Bonds (for purposes of this caption, the Senior Obligations ), and shall, at the written direction of the Owners of not less than a majority of the aggregate Bond Obligation represented by the Senior Obligations and having been indemnified to its satisfaction: (i) by mandamus or other suit, action or proceeding at law or in equity require the Authority to perform its covenants, representations and duties with respect to the Senior Obligations under the Master Resolution; (ii) by action or suit in equity require the Authority to account as if it were the trustee of an express trust for the Owners of the Senior Obligations; (iii) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Senior Obligations; (iv) take possession, administration and management of all Funds and Accounts (with respect to Bonds) and comparable funds, accounts and subaccounts (with respect to Parity Obligations) securing such Senior Obligations and prohibit the Authority from withdrawing moneys therefrom without the Trustee s consent; (v) request that a court of competent jurisdiction appoint, to the extent permitted by law, a receiver or receivers of the Trust Estate, and the income, revenues, profits and use thereof, it being the intent of the Master Resolution that, to the extent permitted by law, the Trustee shall be entitled to appointment of such a receiver as a matter of right; and/or (vi) take such other steps to protect and enforce its rights and the rights of the Owners of the Senior Obligations, whether by action, suit or proceeding in aid of the execution of any power or for the enforcement of any other appropriate legal or equitable remedy, including, but not limited to, proceeding by suit or suits, at law or in equity or by any other appropriate legal or equitable remedy, to enforce payment of the principal and Redemption Price of and interest on the Senior Obligations. (c) If an Event of Default with respect to the First Tier Subordinate Bonds, the Second Tier Subordinate Bonds or the Third Tier Subordinate Bonds shall occur and be continuing, then, subject to paragraph (d), the Trustee may, with the written consent of the Owners of not less than a majority of the aggregate Bond Obligation represented by the First Tier Subordinate Bonds, the Second Tier Subordinate Bonds and the Third Tier Subordinate Bonds with respect to which such Event of Default has occurred and is continuing and any Parity Obligations with a lien on Revenues that is on a parity with such Bonds (for purposes of this caption, the Affected Subordinate Obligations ), and shall, at the written direction of the Bond Obligation represented by the Affected Subordinate Obligations and having been indemnified to its satisfaction: (i) by mandamus or other suit, action or proceeding at law or in equity require the Authority to perform its covenants, representations and duties with respect to the Affected Subordinate Bonds and Subordinate Parity Obligations under the Master Resolution; and/or A-42

118 (ii) take possession, administration and management of the Debt Service Accounts and Debt Service Reserve Accounts (with respect to Bonds) and the comparable funds, accounts or subaccounts (with respect to Parity Obligations) that secure such Affected Subordinate Obligations but that are not available for payment of the Senior Bonds or the Vehicle Registration Fee Bonds and prohibit the Authority from withdrawing moneys therefrom without the Trustee s consent. (d) Notwithstanding any other provision of the Master Resolution, if an Event of Default has occurred and is continuing with respect to any Bonds (or Parity Obligations), no such remedy may be exercised by any Person on behalf of the Owners of any Subordinate Obligation (as defined below), in a manner that materially adversely affects the lien on the Trust Estate of any Superior Obligation (as defined below), the collection or payment of Revenues for the benefit of any such Superior Obligation or the other rights of the Owners of any such Superior Obligation. For purposes of this paragraph, any Tier of Bonds (or Parity Obligations with a lien on Revenues that is on a parity with the lien on Revenues of such Tier of Bonds) shall be deemed to be a Superior Obligation to each other Tier of Bonds (or Parity Obligations with a lien on Revenues that is on a parity with the lien on Revenues of such other Tier of Bonds) (each such other Tier of Bonds or Parity Obligations is referred to in the Master Resolution as a Subordinate Obligation ) if amounts in the Revenue Fund are to be applied to the Debt Service Account for such Superior Obligation as described in the Flow of Funds above at a priority earlier than the priority at which such amounts are to be applied to the Debt Service Account for such Subordinate Obligation; provided that, the Vehicle Registration Fee Bonds (and Parity Obligations with a lien on Revenues that is on a parity with the lien on Revenues of the Vehicle Registration Fee Bonds) shall be deemed to be a Superior Obligation to all other Bonds and Parity Obligations with respect to the Vehicle Registration Fees; provided further that, the Owners of the Vehicle Registration Fee Bonds (and Parity Obligations with a lien on Revenues that is on a parity with the lien on Revenues of the Vehicle Registration Fee Bonds) shall have the exclusive right to direct the Trustee with respect to any remedies relating to the imposition, collection and administration of Vehicle Registration Fees, and the rights of the Owners of other Bonds and Parity Obligations with respect to Vehicle Registration Fees and any amounts received by the Authority pursuant to a Related Financial Transaction with respect to the Vehicle Registration Fee Bonds (other than any Termination Payments) shall be limited to the right to require the Trustee to apply Vehicle Registration Fees and any amounts received by the Authority pursuant to a Related Financial Transaction with respect to the Vehicle Registration Fee Bonds (other than any Termination Payments) in accordance with paragraph (a) of Flow of Funds above. (e) Notwithstanding any other provision of the Master Resolution, (i) no Bonds or Parity Obligations may be accelerated without the written consent of MBIA; (ii) if MBIA Insured Bonds do not constitute a majority of the Bond Obligation represented by the Vehicle Registration Fee Obligations, no remedy described in paragraph (a) above may be implemented without the written consent of MBIA; and (iii) if MBIA Insured Bonds do not constitute a majority of the Bond Obligation represented by the Senior Obligations, no remedy described in paragraph (b) above may be implemented without the written consent of MBIA. Application of Proceeds. The proceeds received by the Trustee pursuant to the exercise of any right or remedy under this Default and Remedies section shall, together with all securities and other moneys which may then be held by the Trustee as a part of the Trust Estate, subject to paragraph (d) of Remedies above, be applied in order, as follows: (a) to the payment of the reasonable and proper charges, expenses and liabilities of the Trustee; (b) to the payment of the amounts certified by a Consultant to be required for reasonable and necessary Operating Expenses allocable to the Bonds, the Master Resolution or the Project; (c) subject to the limitations set forth in Other Transfers to Debt Service above, the Master Resolution, to the payment of the interest and principal or Redemption Price then due on the Bonds with respect to which such remedy was exercised (and interest for such purpose shall include payments due under a Related Financial Transaction as provided in that section), as follows: First, to the payment to the Persons entitled thereto of all installments of interest (including interest, compounded semiannually) then due in the order of the maturity of such installment, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; A-43

119 Second, to the payment to the Persons entitled thereto of the unpaid principal or Redemption Price of the Bonds with respect to which such remedy was exercised which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, and, if the amount available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference; and (d) to the payment of any obligations then due and owing that, absent an Event of Default, are payable from the Surplus Fund, and, if the amount available shall not be sufficient to pay in full all such obligations then due and owing, then to the payment thereof, ratably, subject to the priorities described in paragraph (f) under Flow of Funds in this Appendix and Surplus Fund in this Appendix, according to the amounts due with respect to each such obligation. Trustee May Act Without Possession of Bonds. All rights of action under the Master Resolution or under any Bonds may be enforced by the Trustee without possession of any of the Bonds or the production thereof in any trial or other proceedings relative thereto, and any such suit or proceedings instituted by the Trustee shall be brought in its name, as Trustee for the ratable benefit of the Owners of the Bonds, subject to the provisions of the Master Resolution. Trustee as Attorney-in-Fact. The Trustee has been appointed (and the Owners of the Bonds, by taking and holding same from time to time, shall be deemed to have so appointed the Trustee) the true and lawful attorney in fact of the Owners of the Bonds, or on behalf of all Owners of the Bonds as a class, with respect to any proof of debt, amendment to proof of debt, petition or other document, and to do and perform any and all acts and things for and in the name of the Owners of the Bonds against the Authority allowed in any equity receivership, insolvency, liquidation, bankruptcy, reorganization or other proceedings to which the Authority shall be a party and to receive payment of or on account of such claims. Any such receiver, assignee, liquidator or trustee is authorized by each of the Owners of the Bonds to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Owners of the Bonds, to pay to the Trustee any amount due for compensation and expenses of the Trustee, including counsel fees, incurred up to the date of such distribution, and the Trustee shall have full power of substitution and delegation in respect of any such powers. Remedies Not Exclusive. No remedy conferred upon or reserved to 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 the Master Resolution or under the Bonds or now or hereafter existing at law or in equity or by statute subject, however, to the limitations on remedies for the benefit of the Owners of First Tier Subordinate Bonds, Second Tier Subordinate Bonds and Third Tier Subordinate Bonds and other Subordinate Obligations set forth in paragraph (b) of Remedies above. Limitation on Suits. All rights of action in respect of the Master Resolution shall be exercised only by the Trustee with the consent of or at the direction of the Owners of Bonds, and no Owner of any Bond shall have any right to institute any suit, action or proceedings at law or in equity for the appointment of a receiver or for any other remedy or for any other reason under the Master Resolution, unless and until the Trustee shall have received a written request of the Owners of not less than a majority of the aggregate Bond Obligation represented by the Bonds Outstanding and shall have been furnished reasonable indemnity and shall have refused or neglected for 10 days thereafter to institute such suit, action or proceedings. The making of such request and the furnishing of such indemnity shall in each and every case be conditions precedent to the execution and enforcement by any Owner of any Bond of the powers and remedies given to the Trustee under the Master Resolution and to the institution and maintenance by any such Owner of any action or cause of action for the appointment of a receiver or for any other remedy under the Master Resolution, but the Trustee may, with the consent of or at the direction of the Owners of Bonds, and when thereunto duly requested in writing by the Owners of not less than a majority of the aggregate Bond Obligation represented by the Bonds Outstanding and when furnished indemnity satisfactory to protect it against expenses, charges and liability shall, forthwith, as set forth in paragraph (d) of Remedies above take such appropriate action by judicial proceedings otherwise in respect of any existing default on the part of the Authority as so directed. The rights of the Owners under this Section are in all events subject to the provisions the Resolutions as described in paragraph (d) of Remedies above. Nothing contained in the Master Resolution, however, shall affect or impair the right of any Owner of Bonds, which, subject to paragraph (d) of Remedies above, shall be absolute and unconditional, to enforce the payment of the principal of, premium, if any, and interest on the Bonds of such Owner, but only out of the moneys for such payment as provided in the Master Resolution, or the obligation of the Authority, which shall also be absolute and unconditional, to A-44

120 make payment of the principal of, premium, if any, and interest on the Bonds and Parity Obligations, but only out of the funds provided for such payment, to the respective Owners thereof at the time and place stated in said Bonds. Right of Owners of the Bonds to Direct Proceedings. Notwithstanding any provision of the Master Resolution to the contrary, the Owner or Owners of more than 50% of the aggregate Bond Obligation represented by the Bonds Outstanding with respect to which an Event of Default shall have occurred and be continuing shall have the right, at any time, 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 connection with the enforcement of the terms and conditions of the Master Resolution, or for the pursuit or exercise of any remedy available to the Trustee or any trust or power conferred on the Trustee or any other proceedings under the Master Resolution, provided, however, that the Trustee shall have been satisfactorily indemnified and that such direction shall not be contrary to law or the provisions of the Master Resolution, and the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall determine that the proceedings so directed would involve it in personal liability or would be unjustly prejudicial to the Owners of the Bonds not consenting. The rights of the Owners under this caption are in all events subject to the provisions of the Resolutions as described in paragraph (d) of Remedies above. Restoration of Rights and Remedies. If the Trustee or any Owner of a Bond has instituted any proceeding to enforce any right or remedy under the Master Resolution and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Owner of a Bond, then and in every such case, the Authority, the Trustee and the Owners of the Bonds shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions under the Master Resolution, and thereafter all rights and remedies of the Trustee and the Owners of the Bonds shall continue as though no such proceeding had been instituted. Waiver of Stay or Extension Laws. To the extent that it may lawfully do so, the Authority covenants that it will not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of any stay or extension law, whenever or wherever enacted, which may affect the covenants or the performance of the Master Resolution. The Authority also covenants that it will not otherwise hinder, delay or impede the execution of any power granted to the Trustee. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Owner of any Bond to exercise any right or remedy accruing upon any Event of Default under the Master Resolution shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by the Master Resolution or by law to the Trustee or to the Owners of the Bonds may be executed from time to time, and as often as may be deemed expedient, by the Trustee or by the Owners of the Bonds, as the case may be. Notice to Owners of the Bonds of Default. The Trustee shall promptly mail to registered Owners of Bonds written notice of the occurrence of any Event of Default of which it has notice pursuant to the Master Resolution. Resignation of Trustee Except as otherwise provided by Supplemental Resolution, the Trustee may at any time resign and be discharged of the duties and obligations created by the Master Resolution, effective immediately upon the appointment of a successor Trustee as described in Appointment of Successor Trustee below, by giving not less than 60 days written notice to the Authority of the date it desires to resign and mailing written notice to the Owners of all Bonds and such resignation shall take effect immediately on the appointment of a successor Trustee as described in Appointment of Successor Trustee below. Removal of Trustee The Trustee may be removed, for cause, at any time by an instrument or concurrent instruments in writing, filed with the Trustee, and signed by the Owners of a majority of the Bond Obligation represented by the Bonds Outstanding or their attorneys-in-fact duly authorized. The Trustee may be removed, without cause, at any time upon the filing with the Trustee of (i) an instrument or concurrent instruments in writing signed by the Owners of a majority of the Bond Obligation represented by the Bonds Outstanding or their duly authorized attorneys-in-fact, accompanied by the written consent of the Authority to such removal or (ii) an instrument in writing signed by an Authorized Authority Representative, accompanied by the written consents of the Owners of a majority of the Bond Obligation represented by the Bonds Outstanding or their duly authorized attorneys-in-fact A-45

121 Appointment of Successor Trustee In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property or affairs, a successor may be appointed by the Owners of a majority of the Bond Obligation represented by the Bonds Outstanding, excluding any Bonds held by or for the account of the Authority by an instrument or concurrent instruments in writing signed and acknowledged by such Bondowners or by their attorneys-in-fact duly authorized and delivered to such successor Trustee, notification thereof being given to the Authority and the predecessor Trustee; provided, nevertheless, that unless a successor Trustee shall have been appointed by the Bondowners as aforesaid, the Authority by duly executed written instrument signed by an Authorized Authority Representative shall forthwith appoint a Trustee to fill such vacancy until a successor Trustee shall be appointed by the Bondowners as authorized in the Master Resolution. The Authority shall mail notice of such appointment to the Owners of all Bonds. Any successor Trustee appointed by the Authority shall, immediately and without further act, be superseded by a Trustee appointed by the Bondowners. If in a proper case no appointment of a successor Trustee shall be made as described in the preceding paragraph within 45 days after the Trustee shall have given to the Authority written notice as provided in Resignation of Trustee above or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, its removal, or for any other reason whatsoever, the Trustee (in the case of a resignation under Resignation of Trustee above or the Owner of any Bond (in any case) may apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Trustee. Any Trustee appointed under the foregoing paragraphs in succession to the Trustee shall be a bank or trust company or national or state banking association, having (or whose parent holding company shall have) capital stock and surplus aggregating at least $25,000,000. Supplemental Resolutions Supplemental Resolutions Effective Upon Filing With the Trustee. For any one or more of the following purposes and at any time or from time to time, the Authority may adopt and execute a Supplemental Resolution, which, upon the filing with the Trustee of a copy thereof certified by an officer of the Authority, shall be fully effective in accordance with its terms without the consent of any Bondholders (except as otherwise specifically provided below): (a) to authorize Authority Bonds of a Series and, in connection therewith, to specify and determine any matters and things relative to such Bonds which are not in conflict with the Master Resolution as theretofore in effect, or to amend, modify, or rescind any such authorization, specification, or determination at any time prior to the first delivery of such Bonds; (b) to conform the Master Resolution to any amendment of any Supplemental Resolution in accordance with its terms; (c) to close the Master Resolution or any Supplemental Resolution against, or provide limitations and restrictions in addition to the limitations and restrictions contained in the Master Resolution or any Supplemental Resolution on, the delivery of Authority Bonds or the issuance of other evidences of indebtedness; (d) to add to the covenants and agreements of the Authority in the Master Resolution or any Supplemental Resolution, other covenants and agreements to be observed by the Authority which are not in conflict with the Master Resolution or the applicable Supplemental Resolutions as theretofore in effect; (e) to add to the limitations and restrictions in the Master Resolution or any Supplemental Resolution other limitations and restrictions to be observed by the Authority which are not in conflict with the Master Resolution or the applicable Supplemental Resolution as theretofore in effect; (f) to confirm, as further assurance, any pledge under, and the subjection to any lien or pledge created or to be created by, the Master Resolution or any Supplemental Resolution, of the Trust Estate; (g) to modify any of the provisions of the Master Resolution or any Supplemental Resolution in any respect whatever, provided that (i) such modification shall be, and be expressed to be, effective only after all A-46

122 Outstanding Bonds of any Series at the date of the adoption of such Master Resolution or Supplemental Resolution shall cease to be Outstanding Bonds; and (ii) such Supplemental Resolution shall be specifically referred to in the text of all Bonds of any Series delivered after the date of the adoption of such Supplemental Resolution and of Bonds issued in exchange therefor or in place thereof; (h) to modify, amend or supplement the Master Resolution or any Supplemental Resolution in such manner as to permit, if presented, the qualification thereof under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or under any state blue sky law; (i) to surrender any right, power or privilege reserved to or conferred upon the Authority by the terms of the Master Resolution, provided that the surrender of such right, power or privilege is not in conflict with the covenants and agreements of the Authority contained in the Master Resolution; (j) to increase the Debt Service Reserve Fund Requirement and any capitalized interest requirements; (k) to establish or increase the required balance to be accumulated or maintained in the Renewal and Replacement Fund; (l) to alter the Master Resolution to comply with the requirements of a nationally recognized rating agency in order to obtain or maintain a rating on any of the Bonds in one of the four highest rating categories of such rating agency, provided that no Supplemental Resolution adopted as described in this clause (l) shall be effective without the written consent of MBIA; (m) to designate Paying Agents, Registrars, and other Fiduciaries for the Bonds of any Series; (n) to modify, amend or supplement the Master Resolution or any Supplemental Resolution in order to provide for or eliminate book-entry registration of all or any of the Bonds; (o) to amend a prior Supplemental Resolution in accordance with the provisions thereof; (p) for any other purpose in respect of any Bonds or any Series of Bonds which, at the time such amendments are made, are fully secured by a pledge of or lien on direct obligations of or obligations the principal of and interest on which is unconditionally guaranteed by, the United States of America, certified by an independent certified public accountant to be sufficient to provide for the full and timely payment of principal and Redemption Price of, and interest on, the Bonds; (q) if such amendment does not amend this section or reduce the principal amount or Maturity Value, delay principal or Maturity Value payment dates, reduce interest rates, delay Interest Payment Dates or Accretion Dates or, except to the extent contemplated therein, amend redemption provisions, then applicable to any Series of Bonds and then, at least one of the following conditions is met: (i) on the effective date of such amendment, all Bonds of such Series are secured by a Credit Facility through the later of the next date on which such Bonds are subject to optional or mandatory purchase or their maturity, the consent of the issuer of the Credit Facility is obtained and the Trustee has been provided with proof satisfactory to it that such amendment will not result in a reduction of any Rating of any of the Bonds in effect immediately prior to such amendment; (ii) such amendment is made to facilitate the provision of a Credit Facility for a Series of Bonds that is not then secured by a Credit Facility, provided that no Supplemental Resolution adopted as described in this clause (ii) shall be effective without the written consent of MBIA; or (iii) such amendment is made to facilitate (A) the maintenance of any current Rating of the Bonds of such Series or (B) the obtaining of any higher Rating of the Bonds of such Series desired by the Authority; (r) if such amendment amends this section or reduces the principal amount or Maturity Value, delays principal or Maturity Value payment dates, reduces interest rates, delays Interest Payment Dates or Accretion Dates or, except to the extent contemplated therein, amends redemption provisions, then applicable to any Series A-47

123 of Bonds, then, on the effective date of such amendment, all of the Bonds to which such amendment applies are subject to purchase pursuant to the Supplemental Resolution authorizing their issuance and, in the case of Bonds that are subject to optional purchase on such effective date, the notice given to the Owners of such Bonds with respect to such optional purchase described such amendment; or (s) to facilitate the issuance of and provision of security for Parity Obligations in accordance with the Master Resolution. Supplemental Resolutions Effective With Consent of Trustee. For any one or more of the following purposes and at any time or from time to time, the Authority may adopt and execute a Supplemental Resolution, which, upon (i) the filing with the Trustee of a copy thereof certified by an Authority Representative, and (ii) the filing with the Authority of an instrument in writing made by the Trustee consenting thereto, shall be fully effective in accordance with its terms without the consent of any Bondowner: (a) to cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision in the Master Resolution; (b) to insert such provisions clarifying matters or questions arising under the Master Resolution as are necessary or desirable and are not contrary to or inconsistent with the Master Resolution as theretofore in effect; (c) to provide for additional duties of the Trustee in connection with the Trust Estate or the Project; or (d) to modify any of the provisions of the Master Resolution or any Supplemental Resolution in any respect whatsoever, provided that such action shall not adversely affect the interests of the Owners of Outstanding Bonds of any Series. Any such Supplemental Resolution may also effect one or more of the purposes specified in Supplemental Resolutions above, and in that event, the consent of the Trustee required by this Section shall be applicable only to those provisions of such Supplemental Resolution as shall effect one or more of the purposes set forth in this caption. Supplemental Resolutions Effective With Consent of Bondowners. At any time or from time to time, but subject to consent by Bondowners in accordance with and subject to the provisions of the Master Resolution, the Authority may adopt and execute a Supplemental Resolution, which Supplemental Resolution, upon the filing with the Trustee of a copy thereof certified by an officer of the Authority and upon compliance with the provisions of the Master Resolution, shall become fully effective in accordance with its terms. General Provisions. (a) The Master Resolution shall not be modified or amended in any respect except as provided in and in accordance with and subject to provisions of the Master Resolution described above under Supplemental Resolutions. (b) Any Supplemental Resolution referred to and permitted or authorized by the provisions of the Resolutions described in Supplemental Resolutions Effecting Upon Filing with the Trustee and Supplemental Resolutions Effective with Consent of Trustee above may be adopted by the Authority without the consent of any of the Bondowners, but shall become effective only on the conditions, to the extent and at the time provided in said sections, respectively. The copy of every Supplemental Resolution when filed with the Trustee shall be accompanied by an opinion of Bond Counsel, in form and substance satisfactory to the Trustee, stating that such Supplemental Resolution has been duly and lawfully adopted in accordance with the provisions of the Master Resolution, is authorized or permitted by the Master Resolution, and is valid and binding upon the Authority, and will not adversely affect the exclusion from gross income for federal income tax purposes of any interest on the Bonds. (c) The Trustee has been authorized to accept the delivery of a certified copy of any Supplemental Resolution referred to and permitted or authorized by the Resolutions as described in Supplemental Resolutions Effective Upon Filing with the Trustee, Supplemental Resolutions Effective with Consent of Trustee and Supplemental Resolutions Effective with Consent of Bondowners above and to make all further agreements and stipulations which may be therein contained, and the Trustee, in taking such action, shall be fully protected A-48

124 Amendments in relying on an opinion of counsel (which may be an opinion of Bond Counsel) that such Supplemental Resolution is authorized or permitted by the provisions of the Master Resolution. (d) Notwithstanding any provision in the Master Resolution to the contrary, in particular Supplemental Resolutions Effective Upon Filing with the Trustee, no Supplemental Resolution shall change or modify any of the rights or obligations of the Trustee without its written consent thereto. Mailing. Any provision for the mailing of a notice or other instrument to Bondowners shall be fully complied with if it is mailed postage prepaid only to each Owner of Bonds at his address, if any, appearing upon the Register and to the Trustee. Powers of Amendment. Except as described under Supplemental Resolutions above, any modification or amendment of the Master Resolution and of the rights and obligations of the Authority and of the Owners of the Bonds under the Master Resolution, in any particular, may only be made by a Supplemental Resolution with the written consent (given as provided in the paragraph below) (a) of the Owners of at least 66% of the Bond Obligation represented by the Bonds that will be Outstanding as of the effective date of such modification or amendment, and (b) in case less than all of the several Tiers of Bonds Outstanding are affected by the modification or amendment, of the Owners of at least 66% of the Bond Obligation represented by the Bonds of each Tier so affected and Outstanding as of the effective date of such modification or amendment; provided, however, that if such modification or amendment will, by its terms, not take effect as long as any Bonds of any specified like Series and maturity remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this section. Except as otherwise provided in the Master Resolution or any Supplemental Resolution, no such modification or amendment shall permit a change in the terms of redemption or maturity of the principal or Maturity Value of any Outstanding Bond or of any installment of interest thereon or a reduction in the principal amount, Maturity Value or the Redemption Price thereof or in the rate of interest thereon without the consent of the Owner of such Bond, or shall reduce the percentages or otherwise affect the classes of Bonds of which the consent of the Owners is required to effect any such modification or amendment, or shall change or modify any of the rights or obligations of any Fiduciary without its written consent thereto. For the purposes of this section, a Series shall be deemed to be affected by a modification or amendment of the Master Resolution if the same materially adversely affects the rights of the Owners of Bonds of such Series. The Trustee may in its discretion determine whether or not, in accordance with the foregoing powers of amendment, Bonds of any particular Series or maturity would be affected by any modification or amendment of the Master Resolution and any such determination shall be binding and conclusive on the Authority and all Owners of Bonds, except that MBIA must consent regarding the effect on MBIA Insured Bonds. Consent of Bondowners. The Authority may at any time adopt and execute a Supplemental Resolution making a modification or amendment permitted by the provisions of the above paragraph, to take effect when and as provided in this paragraph. A copy of such Supplemental Resolution (or brief summary thereof or reference thereto in form approved by the Trustee), together with a request to Bondowners for their consent thereto in form satisfactory to the Trustee, shall be delivered to a NRMSIR. Such Supplemental Resolution shall not be effective unless and until: (a) there shall have been filed with the Trustee the written consent of Owners of the percentages of Outstanding Bonds specified in the above paragraph and an opinion of Bond Counsel, in form and substance satisfactory to the Trustee and MBIA, stating that such Supplemental Resolution has been duly and lawfully adopted and filed by the Authority in accordance with the provisions of the Master Resolution, is authorized or permitted by the Master Resolution, is valid and binding upon the Authority and enforceable in accordance with its terms, is in accordance with the Master Resolution and will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any Bonds; provided, however, that such opinion may take exception for limitations imposed by or resulting from bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors rights generally and principles of government law and equity; and (b) a notice shall have been delivered to a NRMSIR as provided in this paragraph. Each such consent shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by the Master Resolution. A certificate or certificates by the Trustee filed with the Trustee that it has examined such proof and that such proof is sufficient shall be conclusive that the consents have been given by the Owners of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Owner of the Bonds giving such consent and, anything in the Master Resolution to the contrary notwithstanding, upon any subsequent Owner of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent Owner thereof has notice thereof) unless such consent is revoked in writing by the Owner of such Bonds giving such consent or a subsequent Owner thereof by filing with the Trustee, prior to the time when the written statement of the Trustee in this Section provided for is filed, such revocation. The fact that a consent has not been A-49

125 revoked may likewise be proved by a certificate of the Trustee filed with the Trustee to the effect that no revocation thereof is on file with the Trustee. At any time after the Owners of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution, the Trustee shall make and file with the Authority a written statement that the Owners of such required percentages of Bonds have filed such consents. Such written statement shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the Supplemental Resolution (which may be referred to as a Supplemental Resolution adopted by the Authority on a stated date, a copy of which is on file with the Trustee) has been consented to by the Owner of the required percentages of Bonds and will be effective as provided in this Section, may be given to Bondowners by delivering such notice to a NRMSIR. Proof of the delivery of such notice to a NRMSIR shall be filed with the Trustee. A record, consisting of the papers required or permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusively binding upon the Authority, the Fiduciaries and the Owners of all Bonds at the expiration of 10 days after the filing with the Trustee of the proof of the delivery to a NRMSIR of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Resolution in a legal action or equitable proceeding for such purpose commenced within such 10-day period; provided, however, that any Fiduciary and the Authority during such 10-day period and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Resolution as they may deem expedient. Modifications by Unanimous Consent. The Authority may adopt and execute a Supplemental Resolution modifying or amending the terms and provisions of the Master Resolution and the rights and obligations of the Authority and of the Owners of the Bonds under the Master Resolution in any respect with the consent of all the Owners of all the Bonds Outstanding, which consent shall be given as described in Consent of Bondowners above, except that no notice to Bondowners shall be required (and which consent may be given by any underwriter, remarketing agent or broker that has purchased such Bonds and intends to resell them, provided that the Persons to whom such Bonds are to be resold are informed of the adoption of the Supplemental Resolution); provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee without the written consent thereto of the Trustee in addition to the consent of the Bondowners. The terms and provisions of the Master Resolution and the rights and obligations of the Authority and the Owners of the Bonds thereunder may be modified or amended with respect to a particular Series upon the adoption and filing by the Authority of a Supplemental Resolution and the consent of the Owners of all Outstanding Bonds of the particular Series, which consent shall be given by written notice to the Trustee, and no notice to Bondowners shall be required (and which consent may be given by any underwriter, remarketing agent or broker that has purchased such Bonds and intends to resell them, provided that the Persons to whom such Bonds are to be resold are informed of the adoption of the Supplemental Resolution); provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee without the written consent thereto of the Trustee in addition to the consent of the Bondowners. Parity Obligations The Authority reserves the right to issue or incur Parity Obligations and to pledge the Revenues to the payment of such Parity Obligations on a parity with the pledge of the Revenues to payment of any Tier of Bonds, but only if all the following conditions are met: (a) all conditions to the issuance of additional Bonds described under the caption Provisions for Issuance of Authority Bonds above are met with respect to such Parity Obligations (determined for such purpose as if such Parity Obligations were Bonds); (b) such Parity Obligations shall have no right to, or lien on, (i) any moneys or investments held in any Fund, Account or Subaccount other than the Revenue Fund or (ii) any other portion of the Trust Estate other than the Revenues; (c) the Parity Obligation Instrument under which such Parity Obligations are issued incorporates the provisions described under the caption Defaults and Remedies above, and appoints the Trustee as trustee for the owners of such Parity Obligations for purposes of enforcing the provisions described under the caption Defaults and Remedies above; and (d) following the issuance of such Parity Obligations, such Parity Obligations shall be treated as Bonds and debt service on such Parity Obligations shall be treated as Debt Service on Bonds for purposes of the Master Resolution. Subordinate Obligations The Authority reserves the right to issue for any lawful purpose, bonds, notes, or other obligations secured in whole or in part by liens on the Revenues that are junior and subordinate to the lien on Revenues securing payment of the A-50

126 Bonds. Such subordinate lien obligations may be further secured by any other source of payment lawfully available for such purposes. Special Project Bonds Notwithstanding any other provision of the Master Resolution, the Authority reserves the right to issue, pursuant to any instrument, revenue bonds which are secured by liens on and pledges of revenues and proceeds derived from any Special Project and are not Authority Bonds or Parity Obligations. In order for a project to be a Special Project, (a) the Special Project must not include any portion of the limited access highway between Interstate 25 South and Interstate 25 North, including the interchanges at Interstate 25 South and Interstate 25 North, or any property related thereto; (b) the Authority must declare in writing that it is a Special Project and is not to be part of the Project; and (c) the costs of construction, acquisition, improvement, operation and maintenance of such Special Project must be paid directly from, or from the proceeds of a financing transaction under which the amounts payable by the Authority are payable from, (i) sources that are not included in Revenues or (ii) moneys in the General Surplus Account. A Special Project shall not be deemed to be a part of the Project and the revenues from a Special Project shall not be included in Revenues. Discharge of Master Resolution If (i) the Authority shall pay or cause to be paid, or there shall otherwise be paid, to the Owners of the Bonds of any Series the principal or Redemption Price thereof, and interest due or to become due thereon, at the times and in the manner stipulated therein and in the Master Resolution and (ii) all amounts due to MBIA have been paid, then, the pledge of the Trust Estate under the Master Resolution and all covenants, agreements and other obligations of the Authority to the Bondowners of such Series, shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall cause an accounting for such period or periods as shall be requested by the Authority to be prepared and filed with the Authority and, upon the request of the Authority, shall execute and deliver to the Authority all such instruments as may be desirable to evidence such discharge and satisfaction, and the Fiduciaries shall pay over or deliver to the Authority all moneys or securities held by them pursuant to the Master Resolution in respect of such Series which are not required for the payment of principal or Redemption Price, and interest on the Bonds of such Series not theretofore surrendered for such payment, or redemption. Any Outstanding Bonds of any Series shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in the paragraph above if (i) in case any of such Bonds are to be redeemed on any date prior to their maturity, the Authority shall have given to the Trustee in form satisfactory to it a Letter of Instructions containing irrevocable instructions to give notice of redemption of such Bonds on said date as provided in Redemption of Authority Bonds above, (ii) there shall have been deposited with the Trustee or an escrow agent, in trust, either money in an amount which shall be sufficient, or Defeasance Investment Securities the principal of and interest on which without any reinvestment thereof when due will provide money which, together with the money, if any, deposited with the Trustee or an escrow agent at the same time, shall be sufficient, to pay when due the principal or Redemption Price of, and interest due and to become due on, such Bonds on or prior to the redemption date or maturity date thereof, as the case may be, and (iii) the Trustee and MBIA receive an opinion, in form and substance satisfactory to the Trustee and MBIA, of counsel with recognized expertise in the area of bankruptcy, that any amounts so deposited with the escrow agent from funds provided by the Authority may not be recovered by creditors of the Authority as a voidable preference under Section 547 of the United States Bankruptcy Code. Neither Defeasance Investment Securities nor money deposited with the Trustee or an escrow agent as described in this paragraph nor principal or interest payments on any such Defeasance Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price of and interest on said Bonds; provided that any cash received from such principal or interest payment on such Defeasance Investment Securities, (A) to the extent such cash will not be required at any time for such purpose, shall be paid over to the Authority as received, free and clear of any trust, lien, security interest, pledge or assignment securing such Bonds or otherwise existing under the Master Resolution, if all Bonds have been redeemed or discharged, otherwise such cash shall be deposited as Revenues, and (B) to the extent such cash will be required for such purpose at a later date, shall, to the extent practicable, be reinvested in the Defeasance Investment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price of and interest to become due on such Bonds, on or prior to such Redemption Date or maturity date thereof, as the case may be, and interest earned from such reinvestment shall be paid over to the Authority, as received, free and clear of any trust, lien or pledge, if all Bonds have been redeemed or discharged, otherwise such cash shall be deposited as Revenues. If the escrow agreement allows for substitution of securities in the escrow account, then the escrow agreement must provide that no such substitution may occur unless there has first been delivered to the escrow agent and the Trustee the following: (i) a verification report from an Independent Certified Public Accounting Firm that the escrow investments, as substituted, are sufficient to pay debt service, as it becomes due, on the refunded bonds and (ii) an opinion of Bond Counsel stating A-51

127 that the substitution is permitted under the documents and that the substitution has no adverse effect on the exclusion from gross income for federal income tax purposes of interest on the refunding bonds. Notwithstanding any other provision of this Section, any series or subseries of Parity Obligations shall be deemed paid upon satisfaction of conditions comparable to those set forth in the Master Resolution for Bonds. Master Resolution and Supplemental Resolutions to Constitute Contracts In consideration of the purchase and acceptance of any and all of the Bonds authorized to be issued under the Master Resolution by those who shall hold the same from time to time, the Master Resolution and each Supplemental Resolution shall be deemed to be and shall constitute a contract among the Authority, the Trustee and the Owners of the Bonds; and the pledge made in the Master Resolution and the covenants and agreements set forth to be performed by or on behalf of the Authority shall be for the equal benefit, protection and security of the Owners of any and all of the Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, shall be of equal rank within preference, priority or distinction of any of the Bonds over any other thereof, except as otherwise provided in or permitted by the Master Resolution or Supplemental Resolution. Rights of Owners of Parity Obligations Except as provided in the Master Resolution or except as the below described rights granted to the owners of Parity Obligations may be limited by the Parity Obligation Instrument authorizing such Parity Obligations, so long as any Parity Obligations are Outstanding, (i) the owners of Parity Obligations shall have the same rights as Owners of Bonds under the Master Resolution; (ii) Parity Obligations shall be included in determining whether any rights of Owners of Bonds have been or may be exercised under the Master Resolution; and (iii) the Master Resolution may not be amended or supplemented unless the Trustee receives an opinion of Bond Counsel that such amendment or supplement does not adversely effect the security for the payment of such Parity Obligations or the exclusion of the interest thereon from gross income for federal income tax purposes. Certain Rights of MBIA Notwithstanding any other provision of the Master Resolution: (a) Each owner of an MBIA Insured Bond by virtue of its purchase of such MBIA Insured Bond is deemed to have granted the rights and privileges described in this paragraph to MBIA as a condition to, and in consideration for, MBIA s issuance and delivery of the MBIA Insurance Policy. MBIA shall be and is deemed to be the Owner of all Outstanding MBIA Insured Bonds for all purposes (other than the receipt of payments on non-defaulted Bonds), including, without limitation, for purposes of giving consents, exercising rights and directing remedies on behalf of Owners of MBIA Insured Bonds, and shall have the unimpeded right to direct all remedies available to Owners of MBIA Insured Bonds following the occurrence of an Event of Default. (b) If MBIA pays the principal or interest due on an MBIA Insured Bond, such Bond shall be deemed to be Outstanding until MBIA has been reimbursed for the amount so paid by it, MBIA shall be subrogated to all rights of the record Owner of such Bond and MBIA shall be entitled to all payments due on such Bond from the same sources and on the same priority as if the principal and interest had not been paid by MBIA. (c) MBIA shall be a third-party beneficiary of all provisions of the Master Resolution and any Supplemental Resolution. All provisions of the Master Resolution and any Supplemental Resolution that benefit Owners of MBIA Insured Bonds, including, but not limited to, all representations, covenants and warranties intended for the benefit of MBIA Insured Bonds shall be construed to be for the benefit of MBIA. (d) Unless MBIA consents in writing (which consent may be given or withheld in the sole discretion of MBIA), (i) no Senior Bonds or Vehicle Registration Fee Bonds shall bear interest at a variable interest rate and (ii) none of the Authority, the Trustee or any other Person acting on behalf of either of them shall execute or enter into a Related Financial Transaction with respect to MBIA Insured Bonds, provided that the consent of MBIA shall not be required for the issuance of inverse floating rate securities or a derivative transaction with the same effect so long as (A) the obligations of the Authority remain limited to payment of a fixed amount of interest on principal and (B) MBIA s obligations under the MBIA Insurance Policy are not directly or indirectly modified or extended beyond the principal and fixed interest payable by the Authority with respect to the MBIA Insured Bonds in the form in which the MBIA Insured Bonds were originally issued A-52

128 (e) The Trustee shall give MBIA and S&P written notice prior to the effective date of any amendment to the Master Resolution or the First Supplemental Resolution or the adoption of any other Supplemental Resolution, which notices shall include a copy of the proposed amendment or Supplemental Resolution in the most recent available form. (f) If any of the MBIA Insured Bonds are defeased through an advance refunding, in addition to the requirements described under Discharge of Master Resolution above, (i) the defeasance escrow for the MBIA Insured Bonds shall not, without the written consent of MBIA, include a forward supply agreement or float contract; (ii) MBIA shall receive a copy of a defeasance opinion from Bond Counsel in form and substance acceptable to MBIA; (iii) MBIA shall receive the final debt service schedule on the issue within three Business Days from the sale date; (iv) MBIA shall receive at least ten days in advance of closing draft copies of the escrow securities, purchase contracts of SLG subscription forms or open market confirmations; (v) MBIA shall receive a draft opinion at least ten days in advance of closing from Bond Counsel in form and substance acceptable to MBIA to the effect that the refunding bonds are being issued in compliance with state law and that the interest on the refunding bonds is excluded from gross income for federal income tax purposes; (vi) MBIA shall receive at least five business days prior to closing a draft opinion from Bond Counsel stating that the refunded bonds have been legally defeased; (vii) MBIA shall receive final executed copies of the items required by clauses (v) and (vi) above via overnight mail prior to closing; and (viii) the escrow agreement and a verification report from an Independent Certified Public Accounting Firm must be delivered to MBIA and must be in form and substance acceptable to MBIA at least ten days in advance of closing, the provider of such verification report to be reviewed by MBIA on a transaction by transaction basis. (g) None of the following shall be effective without the prior written consent of MBIA: (i) any amendment to any of the following provisions of the Master Resolution: the definitions of MBIA, MBIA Insurance Policy and MBIA Insured Bonds, Authority Bonds, Bonds, Bond Obligation, Debt Service, Debt Service Reserve Fund, Defeasance Investment Securities, Investment Securities, Net Revenues, Operating Expenses, Revenues, Trust Estate, and any definitions used in such definitions; or (ii) any amendment to any other provision of this Master Resolution, the First Supplemental Resolution, the Second Supplemental Resolution, the Third Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution or the Sixth Supplemental Resolution, or the adoption of another Supplemental Resolution, unless MBIA has received a copy of such amendment or Supplemental Resolution and an opinion of Bond Counsel, in form and substance reasonably satisfactory to MBIA, stating that either (A) such amendment or Supplemental Resolution does not materially limit the rights of the Owners of the MBIA Insured Bonds or MBIA, or materially expand the rights of the Owners of other Bonds, with respect to the Revenues, the Vehicle Registration Fee Bonds Debt Service Account, the Vehicle Registration Fee Bonds Capitalized Interest Subaccount, the Vehicle Registration Fee Bonds Debt Service Reserve Account, the Senior Bonds Debt Service Account, the 1997 Senior Bonds Capitalized Interest Subaccount, the 2000 Senior Bonds Capitalized Interest Subaccount or the Senior Bonds Debt Service Reserve Account under this Master Resolution, the First Supplemental Resolution, the Second Supplemental Resolution, the Third Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution, the Sixth Supplemental Resolution or any other Supplemental Resolution, as in effect immediately prior to the effective date of such amendment or Supplemental Resolution, or (B) such amendment or Supplemental Resolution does not materially adversely affect the security for the payment of the MBIA Insured Bonds, or the rights of the Owners of the MBIA Insured Bonds or MBIA, under this Master Resolution, the First Supplemental Resolution, the Second Supplemental Resolution, the Third Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution, the Sixth Supplemental or any other Supplemental Resolution, as in effect immediately prior to effective date of such amendment or Supplemental Resolution. (h) Any notice required to be given to any Person pursuant to the Master Resolution or any Supplemental Resolution must also be given, in the same manner and at the same time, to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Insured Portfolio Management Global Public Finance A-53

129 (i) Whenever MBIA is to receive any notice or other document, such notice or document shall also be delivered to S&P; and whenever MBIA is to consent to any event or document under the Master Resolution, such consent shall not be deemed to be effective until the Trustee has received evidence, satisfactory to the Trustee, that such event or document will not, by itself, result in a withdrawal of or reduction in S&P s Rating of the MBIA Insured Bonds. (j) No successor Trustee may be appointed without the prior written consent of MBIA, which consent shall not be unreasonably withheld. (k) In the event of any conflict between this section and any other provision of the Master Resolution or any Supplemental Resolution, this section shall control. (l) Notwithstanding any other provision of the Master Resolution, MBIA at any time may waive any or all of the provisions of this section, permanently or with respect to one or more transactions or events or for any period of time, by delivering a written notice to the Authority and the Trustee A-54

130 APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE AUTHORITY FOR THE FISCAL YEARS ENDED DECEMBER 31, 2006 AND 2005 B-1

131 (THIS PAGE INTENTIONALLY LEFT BLANK)

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168 APPENDIX C THE TOLL REVENUE STUDY C-1

169 (THIS PAGE INTENTIONALLY LEFT BLANK)

170

171

172

173

174

175 (THIS PAGE INTENTIONALLY LEFT BLANK)

176

177

178

179 (THIS PAGE INTENTIONALLY LEFT BLANK)

180

181 (THIS PAGE INTENTIONALLY LEFT BLANK)

182

183 (THIS PAGE INTENTIONALLY LEFT BLANK)

184

185

186

187

188

189

190

191

192

193

194

195

196

197

198

199

200

201

202

203

204

205

206

207

208

209

210

211 (THIS PAGE INTENTIONALLY LEFT BLANK)

212 E-470 Public Highway Authority U.S. Bank National Association, as trustee MBIA Insurance Corporation Bear, Stearns & Co. Inc. Morgan Stanley & Co. Incorporated George K. Baum & Company APPENDIX D FORM OF BOND COUNSEL OPINION June 14, 2007 $423,340,000 E-470 PUBLIC HIGHWAY AUTHORITY SENIOR REVENUE BONDS $105,825,000 Series 2007A $105,825,000 Series 2007B $105,825,000 Series 2007C $105,865,000 Series 2007D Ladies and Gentlemen: We have been engaged by the E-470 Public Highway Authority (the Authority ) to act as bond counsel for the issuance of the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007A, in the aggregate principal amount of $105,825,000 (the Series 2007A Bonds ), the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007B, in the aggregate principal amount of $105,825,000 (the Series 2007B Bonds ), the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007C, in the aggregate principal amount of $105,825,000 (the Series 2007C Bonds ), and the E-470 Public Highway Authority Senior Revenue Bonds, Series 2007D, in the aggregate principal amount of $105,865,000 (the Series 2007D Bonds ) (the Series 2007A Bonds, the Series 2007B Bonds, the Series 2007C Bonds and the Series 2007D Bonds, collectively, are referred to herein as the 2007 Bonds ) pursuant to the Public Highway Authority Law, title 43, article 4, part 5 of the Colorado Revised Statutes (the Public Highway Authority Law ), as amended, the Supplemental Public Securities Act, title 11, article 57, part 2, Colorado Revised Statutes, as amended (the Supplemental Public Securities Act ), the Public Securities Refunding Act, title 11, article 56, Colorado Revised Statutes, as amended (the Public Securities Refunding Act and, together with the Public Highway Authority Law and the Supplemental Public Securities Act, the Acts ), and the Master Bond Resolution (the Master Resolution ) adopted by the Board of Directors of the Authority (the Board ) on August 14, 1997, as supplemented and amended by the First Supplemental Bond Resolution (the First Supplemental Resolution ) adopted by the Board on August 14, 1997, the Second Supplemental Bond Resolution (the Second Supplemental Resolution ) adopted by the Board on April 27, 2000, the Third Supplemental Bond Resolution (the Third Supplemental Resolution ) adopted by the Board on May 10, 2001, the Fourth Supplemental Bond Resolution (the Fourth Supplemental Resolution ) adopted by the Board on December 9, 2004, the Fifth Supplemental Bond Resolution (the Fifth Supplemental Resolution ) adopted by the Board on August 24, 2006, and the Amended and Restated Sixth Supplemental Bond Resolution (the Sixth Supplemental Resolution ) adopted by the Board on May 24, 2007 (the Master Resolution, the First Supplemental Resolution, the Second Supplemental Resolution, the Third D-1

213 Supplemental Resolution, the Fourth Supplemental Resolution, the Fifth Supplemental Resolution and the Sixth Supplemental Resolution, collectively, are referred to herein as the Resolutions ). Terms used but not defined herein have the meanings assigned to them in the Resolutions. We have examined the Constitution and the laws of the State of Colorado (the State ), including but not limited to the Acts; the June 26, 1996 order and judgment of the Arapahoe County District Court In Re the Petition of the E-470 Public Highway Authority (Case No. 96 CV 946, Division 5) regarding the status of the Authority as an enterprise within the meaning of article X, section 20 of the State Constitution; the provisions of the Internal Revenue Code of 1986, as amended (the Code ), and the regulations, rulings and judicial decisions relevant to the opinions set forth in paragraph 5 below; the transcript of the proceedings relating to the issuance of the 2007 Bonds; and such other certificates, documents, opinions and papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the certifications in the transcript of proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon and in reliance on the foregoing, we are of the opinion, under existing law and as of the date hereof, that: 1. The Authority is duly created and validly existing as a body corporate and political subdivision of the State with the power to adopt the Resolutions, perform the agreements on its part contained therein and issue the 2007 Bonds. 2. The Resolutions have been duly adopted by the Authority and constitute valid and binding obligations of the Authority enforceable against the Authority. 3. Pursuant to the Public Highway Authority Law and the Supplemental Public Securities Act, the Resolutions create a valid lien as set forth in the Resolutions on the Revenues and other funds pledged by the Resolutions for the security of the 2007 Bonds on a parity with the Outstanding E-470 Public Highway Authority Senior Revenue Bonds, Series 1997A, 1997B and 1997C, the Outstanding E-470 Public Highway Authority Senior Revenue Bonds, Series 2000B, the Outstanding E-470 Public Highway Authority Senior Revenue Bonds, Series 2004A, 2004B and 2004C, the Outstanding E-470 Public Highway Authority Senior Revenue Bonds, Series 2006A and 2006B, and any additional Senior Bonds that are issued under the Master Resolution in the future, subject to no prior lien granted under the Public Highway Authority Law or the Supplemental Public Securities Act. 4. The 2007 Bonds have been duly authorized, executed and delivered by the Authority and are valid and binding special, limited obligations of the Authority payable solely from the sources provided therefor in the Resolutions. 5. Under the laws, regulations, rulings and judicial decisions existing on the date hereof, interest on the 2007 Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinions set forth in the preceding sentence assume the accuracy of certain representations and compliance by the Authority with certain covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the 2007 Bonds. Failure to comply with such requirements could cause interest on the 2007 Bonds to be included in gross income for federal income tax purposes or could otherwise adversely affect such opinions, retroactive to the date of issuance of the 2007 Bonds. The Authority has covenanted to comply with such requirements. We express no opinion regarding other federal tax consequences arising with D-2

214 respect to the 2007 Bonds. We note, however, that interest on the 2007 Bonds will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporations adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). 6. Under the Public Securities Refunding Act, the 2007 Bonds and the income therefrom are exempt from taxation, except inheritance, estate and transfer taxes, in the State. We express no opinion regarding other tax consequences arising with respect to the 2007 Bonds under the laws of the State or any other state or jurisdiction. The rights of the holders of the 2007 Bonds and the enforceability of the 2007 Bonds and the Resolutions may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights heretofore or hereafter enacted to the extent constitutionally applicable, to the exercise of judicial discretion in appropriate cases, to the exercise by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. We have not been engaged to review the accuracy, completeness or sufficiency of the Official Statement or other offering materials relating to the 2007 Bonds and we express no opinion or belief herein relating thereto. This opinion is delivered based and in reliance upon our examination of the laws, documents and other items specifically described in the second paragraph hereof on the date hereof; we have no obligation to supplement or update this opinion based on or with respect to changes in such laws, documents or other items or with respect to any other event that occurs after the date hereof. Respectfully submitted, D-3

215 (THIS PAGE INTENTIONALLY LEFT BLANK)

216 APPENDIX E FORM OF CONTINUING DISCLOSURE UNDERTAKING This Continuing Disclosure Undertaking (the "Disclosure Certificate") is executed and delivered by the E-470 Public Highway Authority (the "Authority") in connection with the issuance of the Authority's $423,340,000 in original aggregate principal amount of Senior Revenue Bonds Series 2007 (the "Bonds"). The Bonds are being issued pursuant to a Master Resolution adopted by the Board of Directors of the Authority (the "Board") on August 14, 1997, as amended and supplemented, and an Amended and Restated Sixth Supplemental Bond Resolution adopted by the Board on May 24, 2007 (collectively, the "Resolutions"). The Authority covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Authority for the benefit of the Bondholders and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolutions and the Official Statement dated June 6, 2007 (the "Official Statement") used in connection with the sale of the Bonds, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this section, the following capitalized terms shall have the following meanings: "Annual Financial Information" means any Annual Financial Information provided by the Authority pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Central Post Office" means Disclosure USA, a website accessible at or any other national central repository authorized by the Securities and Exchange Commission for continuing disclosure filings by issuers of municipal securities pursuant to the Rule 15c2-12. "Dissemination Agent" means any person, firm, corporation or other entity and any successor thereto, designated in writing by the Authority to serve as its agent for disseminating on behalf of the Authority the information required hereby, and which has filed with the Authority a written acceptance of such designation. Certificate. "Listed Events" means any of the events listed in Section 5(a) of this Disclosure "National Repository" means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Currently, the following are National Repositories: Bloomberg Municipal Repositories, Princeton, New Jersey DPC Data Inc., Fort Lee, New Jersey Standard & Poor's J. J. Kenny Repository, New York, New York Interactive Data, New York, New York "Participating Underwriters" means Bear, Stearns & Co. Inc., Morgan Stanley & Co. Incorporated and George K. Baum & Company the underwriters for the Bonds, required to comply with the Rule in connection with the issuance of the Bonds. E- 1

217 "Repository" means each National Repository and each State Repository. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" means any public or private repository or entity designated by the State as a state repository for the purpose of the Rule. As of the date of this Certificate, there is no State Repository. "Tax-exempt" means that interest on the Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax. Information. SECTION 3. Provision of Annual Financial Information and Annual Budget (a) The Authority shall provide, or shall cause the Dissemination Agent to provide, not later than 210 days after the end of each fiscal year of the Authority, commencing with the Authority's fiscal year ended December 31, 2007, to each Repository or the Central Post Office the Annual Financial Information which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to said date, the Authority shall provide the Annual Financial Information to the Dissemination Agent (if other than the Authority). The Annual Financial Information may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Authority may be submitted separately from the balance of the Annual Financial Information. (b) If the Authority is unable to provide to the Repositories or the Central Post Office the Annual Financial Information by the date required in subsection (a), the Authority shall send a notice to each Repository in substantially the form attached hereto as Exhibit A. (c) If the Authority designates a Dissemination Agent pursuant to this Disclosure Certificate, the Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Financial Information the name and address of each National Repository and each State Repository, if any, or the Central Post Office; and (ii) file a report with the Authority certifying that the Annual Financial Information has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories or the Central Post Office to which it was provided. (d) The Authority shall provide, or cause the Dissemination Agent to provide, to each Repository or the Central Post Office not later than 30 days after the end of each fiscal year, commending with the Authority's fiscal year ending December 31, 2007, the annual budget of the Authority adopted by the Board. E- 2

218 SECTION 4. Content of Annual Financial Information. Financial Information shall contain or incorporate by reference the following: The Authority's Annual (a) The most recent financial statements of the Authority audited in accordance with generally accepted accounting principles (the "Audit"); (b) All gross toll revenues received by, and operating expenses and net toll revenues of the Authority during the Authority's most recently ended fiscal year, to the extent not clearly set forth in the Audit; (c) All highway expansion fees received by the Authority during the Authority's most recently ended fiscal year, to the extent not clearly set forth in the Audit; and (d) All bonds or other financial obligations of the Authority (other than the Bonds) issued, remarketed or incurred by the Authority during the Authority's most recent fiscal year. Any or all of the items listed above may be incorporated by reference from other documents, including issuance statements or Official Statements of debt issues of the Authority or related public entities, or the Authority's audited financial statements, which have been submitted to each of the Repositories or the Central Post Office or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Authority shall clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of Significant Events. (a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds, if material: Bonds. 1. Delinquency in payment when due or any principal of or interest on the 2. Occurrence of any Event of Default under and as defined in the Resolutions (other than as described in clause (1) above). 3. Modifications to rights of holders of Bonds, including, but not limited to, any amendment to the Resolutions or this Disclosure Certificate. 4. Giving of a notice of optional or unscheduled redemption of any Bonds. 5. Defeasance of the Bonds or any portion thereof. 6. Any change in any rating on the Bonds. 7. (A) Receipt of an opinion of nationally recognized bond counsel to the effect that interest on the Bonds is not tax-exempt; or (B) Any event adversely affecting the tax-exempt status of the Bonds, including but not limited to: E- 3

219 (i) any audit, investigation or other challenge of the taxexempt status of the Bonds by the Internal Revenue Service or in any administrative or judicial proceeding; or (ii) The issuance of any regulation, decision or other official pronouncement by the Internal Revenue Service or other official tax authority or by any court adversely affecting the tax-exempt status of the Bonds or bonds of the same type as the Bonds or financing structures of the same type as financed by the Bonds. 8. Any unscheduled draw on the Vehicle Registration Fee Bonds Debt Service Reserve Account, if any, or the Senior Bonds Debt Service Reserve Account reflecting financial difficulties. 9. Any unscheduled draw on the Bond Insurance Policy reflecting financial difficulties. 10. Any change in the provider of the Bond Insurance Policy, or any failure by the Insurer to perform on the Bond Insurance Policy. 11. The release, substitution, or sale of property, if any, securing repayment of the Bonds (including property leased, mortgaged, or pledged as such security). (b) Whenever the Authority obtains knowledge of the occurrence of a Listed Event, the Authority shall as soon as possible determine if such event would constitute material information for Holders of Bonds, provided that any event under subsection (a)(1), (5), (6), or (7) will always be deemed to be material. (c) If the Authority determines that knowledge of the occurrence of a Listed Event would be material, the Authority shall promptly file a notice of such occurrence with the Municipal Securities Rulemaking Board and each State Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Resolutions. SECTION 6. Termination of Reporting Obligation. The Authority's obligations under this Disclosure Certificate shall terminate upon the contractual defeasance, prior redemption, or payment in full of all the Bonds. SECTION 7. Dissemination Agent. The Authority may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Authority may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. E- 4

220 SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Authority from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Certificate, provided, however, that the Authority shall have no obligation under this Agreement to update such information or include it in any future Annual Financial Information or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Authority to comply with any provision of this Disclosure Certificate, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Authority to comply with its obligations under this Disclosure Certificate. A Bondholder shall provide written notice to the Authority of its intention to take an action to cause the Authority to comply with this Disclosure Certificate at least 15 days in advance of taking such action. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolutions, and the sole remedy under this Disclosure Certificate in the event of any failure of the Authority to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Authority, the Dissemination Agent, the Participating Underwriters, and Holders from time to time of the Bonds, and shall create no rights in any other person or entity. Date:, 2007 E-470 PUBLIC HIGHWAY AUTHORITY By: Executive Director [Signature Page to Continuing Disclosure Undertaking] E- 5

221 (THIS PAGE INTENTIONALLY LEFT BLANK)

222 EXHIBIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION E-470 Public Highway Authority $105,825,000 of E-470 Public Highway Authority Senior Revenue Bonds, Series 2007A $105,825,000 of E-470 Public Highway Authority Senior Revenue Bonds, Series 2007B $105,825,000 of E-470 Public Highway Authority Senior Revenue Bonds, Series 2007C $105,865,000 of E-470 Public Highway Authority Senior Revenue Bonds, Series 2007D Issued on June 14, 2007 NOTICE IS HEREBY GIVEN that the Authority has not provided the Annual Financial Information with respect to the above-named Bonds as required by that certain Continuing Disclosure Undertaking of E-470 Public Highway Authority dated, The Authority anticipates that the Annual Financial Information will be filed by, 20. Date: E-470 PUBLIC HIGHWAY AUTHORITY By: Executive Director A-1

223 (THIS PAGE INTENTIONALLY LEFT BLANK)

224 APPENDIX F BOOK-ENTRY ONLY SYSTEM Unless otherwise noted, the information contained under "General" below has been provided by The Depository Trust Company, New York, New York ("DTC"). Neither the Authority nor the Underwriters make any representation as to the accuracy or the completeness of such information. The Beneficial Owners of the Series 2007 Bonds should confirm the following information with DTC or the DTC Participants. NEITHER THE AUTHORITY, THE TRUSTEE, NOR THE UNDERWRITERS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS, OR ANY BENEFICIAL OWNER WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (B) ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF THE SERIES 2007 BONDS UNDER THE RESOLUTIONS (C) THE SELECTION BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE SERIES 2007 BONDS; (D) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR REDEMPTION PREMIUM, IF ANY, OR INTEREST DUE WITH RESPECT TO THE OWNER OF THE SERIES 2007 BONDS; (E) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE OWNERS OF SERIES 2007 BONDS; OR (F) ANY OTHER MATTER RELATING TO DTC OR THE BOOK- ENTRY ONLY SYSTEM. General DTC will act as securities depository for the Series 2007 Bonds. The Series 2007 Bonds will be 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 bond will be issued for each maturity of the Series 2007 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC DTC, the world s largest 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 1934, as amended. DTC holds and provides asset servicing for over 2.2 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, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and F-1

225 EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. 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 Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at and Book-Entry System Purchases of Series 2007 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2007 Bonds on DTC s records. The ownership interest of each actual purchaser of each Series 2007 Bond ("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 Series 2007 Bonds 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 bond certificates representing their ownership interests in Series 2007 Bonds, except in the event that use of the book-entry system for the Series 2007 Bonds is discontinued. To facilitate subsequent transfers, all Series 2007 Bonds 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 Series 2007 Bonds 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 Series 2007 Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2007 Bonds 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. 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 Series 2007 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2007 Bonds, such as redemptions or defaults. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Series 2007 Bonds 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 notices be provided directly to them. Redemption notices shall be sent by the Trustee to DTC. If less than all of the Series 2007 Bonds within a particular maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2007 Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority or the Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to F-2

226 those Direct Participants to whose accounts the Series 2007 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, redemption price and interest payments on the Series 2007 Bonds will be made by the Trustee 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 Trustee, 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 Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, 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. Discontinuation of Book-Entry System DTC may discontinue providing its services as securities depository with respect to the Series 2007 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered. The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, certificates representing the Series 2007 Bonds will be printed and delivered to DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Authority believes to be reliable, but neither the Authority nor the Underwriters take any responsibility for the accuracy hereof. F-3

227 (THIS PAGE INTENTIONALLY LEFT BLANK)

228 APPENDIX G SPECIMEN BOND INSURANCE POLICY FOR SERIES 2007 BONDS G-1

229 (THIS PAGE INTENTIONALLY LEFT BLANK)

230