PRILIMINARY OFFIC STATEMENT 11-15-2001 44.

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So long as (i) no Event of Default has occurred and is continuing, (ii) all reports of the Borrower required to be provided to the Trustee under Section 6.02 of the Loan Agreement have been so provided, and (iii) all deposits described in Section 5.01 of the Indenture to the Taxes and Insurance Fund, the Senior Debt Service Account of the Bond Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Operating Reserve Fund and the Subordinate Debt Service Account of the Bond Fund are current(or credit for such deposits shall have been given in accordance herewith for other amounts in such funds), and (iv) any loan to the Borrower for replacement of the initial letter of credit deposited to the Operating Reserve Fund has been repaid,then on December 1 each year,the Trustee shall apply all moneys in the Surplus Fund for the following purposes in the following priority, provided in no case shall such an application reduce amounts in the Surplus Fund below the Surplus Fund Requirement: (a) First, fifty percent (50%) of such moneys to the redemption of Subordinate Bonds; and; (b) Second, to the Borrower. Operating Reserve Fund On the date of the issue of the Series 2001 Bonds, the Trustee shall deposit in the Operating Reserve Fund moneys or a bank letter of credit equal to the Operating Reserve Requirement ($250,000). Thereafter, the Trustee shall deposit thereinto the Operating Reserve Fund(i)all rental income and fees arising from the operation of the Project Facilities and received on or before April 1,2003, and(ii)the amounts transferred from the Revenue Fund, until such deposits equal the Operating Reserve Requirement. As amounts are deposited therein, the stated amount of the bank letter of credit will be reduced by a corresponding amount, and the Trustee will release such portion of the bank letter of credit from the Trust Estate. If the rental income and the transfers from the Revenue Fund do not equal the Operating Reserve Requirement and are not sufficient to fully replace the bank letter of credit on April 1,2003,the Manager shall loan the difference to the Borrower,who shall transfer the proceeds of the loan to the Trustee for deposit to the Operating Reserve Fund. Such loan shall bear simple interest at nine percent(9%)and shall be repaid out of the Surplus Fund, to the extent that funds are available. Repayments of this loan shall be made prior to any distributions to the Borrower or redemptions of Subordinate Bonds. Commencing April 1,2003,the Trustee shall deposit to the Operating Reserve Fund any Loan Repayments and other funds in the Revenue Fund as provided in the Indenture as necessary to maintain or restore the balance : . . : _ • . therein to the Operating Reserve Requirement. If the Operatiiig Rcsen.e Fund is funded on the Date of - .: - •• • •el - - • •• , II .: . • , • . . • , . replaced by inoncy6 from the Revo ue Fund or fium other funds of the Bon ower transfei red