OFFICIAL STATEMENT

Dated: November 19, 2002

New Issue-Book Entry Only Rating: Standard & Poor’s “AA+/A-1+”In the opinion of Winston & Strawn, New York, New York, Bond Counsel, based on existing statutes, regulations, rulings and court

decisions, (i) interest on the Bonds is not includable in gross income for federal income tax purposes assuming compliance with certain covenantsand the accuracy of certain representations, except for any interest on any Bond for any period during which such Bond is held by a person who is a“substantial user” of the facilities financed with the proceeds of the Bonds or a “related person” as defined in Section 147(a) of the InternalRevenue Code of 1986, as amended; and (ii) interest on the Bonds constitutes an “item of tax preference” for purposes of computing the federalalternative minimum tax on individuals and corporations. In the opinion of Bond Counsel, based on existing statutes, interest on the Bonds is exemptfrom personal income taxes imposed by the State of New York and its political subdivisions (including the City of New York). See “TAX MATTERS” inthis Official Statement.

$25,000,000New York State Environmental Facilities Corporation

Solid Waste Disposal Revenue Bonds(Waste Management, Inc. Project)

Series 2002BDated: Date of Issuance Due: May 1, 2019

The Bonds are initially issuable as fully registered bonds in the denomination of $100,000 or any integral multiple thereof, and when issuedwill be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). Beneficial owners ofthe Bonds will not receive physical certificates representing the Bonds purchased, but will receive a credit balance on the books of the nominee ofsuch beneficial owners. So long as Cede & Co. is the registered owner of the Bonds, principal and purchase price of, premium, if any, and interestdue on the Bonds will be paid by The Bank of New York, as trustee (the “Trustee”), directly to DTC, which will in turn remit such principal,purchase price, premium, if any, and interest to its participants for subsequent disbursement to the beneficial owners of the Bonds as describedherein. See “THE BONDS - Book-Entry System.” Principal of and premium, if any, on the Bonds will be payable at maturity or redemption uponsurrender thereof at the principal corporate trust office of the Trustee in New York, New York.

On their date of issuance, the Bonds will bear interest at the Weekly Interest Rate as described herein under “THE BONDS – General.”During the initial Weekly Interest Rate Period, interest on the Bonds is payable on the first Business Day (as defined herein) of each month,commencing December 2, 2002. The interest rate on the Bonds will not exceed 12%. Interest on the Bonds is payable as described herein under“THE BONDS – General.”

As described herein under “THE BONDS – Demand Purchase,” during a Weekly Interest Rate Period, the Bonds will be purchased on thedemand of the Holders thereof on any Business Day upon at least seven days’ notice.

THE BONDS ARE SUBJECT TO MANDATORY TENDER AS DESCRIBED HEREIN UNDER “THE BONDS – MANDATORY TENDER FOR PURCHASE.” THEBONDS ARE SUBJECT TO REDEMPTION PRIOR TO MATURITY AS DESCRIBED HEREIN UNDER “THE BONDS - REDEMPTION.”

Except to the extent payable from drawings under the Original Letter of Credit as hereinafter described or out of Bond proceeds or anyincome from the investment thereof, the Bonds will be payable solely from, and secured solely by, a pledge of payments derived by the New YorkState Environmental Facilities Corporation (the “Issuer”) under a Loan Agreement dated as of November 1, 2002 (the “Agreement”) with WasteManagement of New York, L.L.C. and USA Waste Services of NYC, Inc. (jointly, the “Company” and each, individually, a “Company” as thecontext may indicate), each an indirect, wholly-owned subsidiary of Waste Management, Inc. (the “Guarantor”).

At the time of delivery of the Bonds,

JPMorgan Chase Bankwill issue an irrevocable, transferable direct-pay letter of credit (the “Original Letter of Credit”) to the Trustee, the drawings under which will be usedto pay principal, purchase price and interest (up to 36 days at the maximum rate of 12%) due on the Bonds. The Original Letter of Credit expires onNovember 26, 2003 unless extended or earlier terminated upon the occurrence of certain events as described herein under “THE ORIGINAL LETTER OFCREDIT.” Under certain circumstances, the Original Letter of Credit may be replaced by an Alternate Letter of Credit as described herein.

The payment of the principal and purchase price of, and premium, if any, and interest on, the Bonds will be guaranteed pursuant to aGuaranty Agreement, dated as of November 1, 2002, between the Trustee and

Waste Management, Inc.THE BONDS DO NOT CONSTITUTE THE DEBT OR INDEBTEDNESS OF THE STATE OF NEW YORK OR ANY CITY OR COUNTY WITHIN THE MEANING OF

ANY PROVISION OR LIMITATION OF THE CONSTITUTION OF THE STATE OF NEW YORK OR STATUTES, AND DO NOT CONSTITUTE OR GIVE RISE TO APECUNIARY LIABILITY OF THE STATE OF NEW YORK OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWERS. THE BONDS AND THE INTEREST ANDANY PREMIUM THEREON ARE SPECIAL OBLIGATIONS OF THE ISSUER AND ARE PAYABLE SOLELY FROM THE REVENUES DERIVED FROM THE AGREEMENT ANDTHE NOTE, WHICH REVENUES HAVE BEEN PLEDGED AND ASSIGNED UNDER THE INDENTURE TO THE TRUSTEE FOR THE EQUAL AND RATABLE PAYMENT OFTHE BONDS AND THE INTEREST THEREON. THE ISSUER SHALL NOT BE OBLIGATED TO PAY THE BONDS OR THE INTEREST OR ANY PREMIUM THEREON EXCEPTFROM SUCH REVENUES. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION ORAGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST OR ANY PREMIUM ON THE BONDS AND THE BONDS SHALL NOT BEDEEMED TO CONSTITUTE A DEBT OF THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF.

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read this entireOfficial Statement to obtain information essential to the making of an informed investment decision.

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Price: 100%_______________

The Bonds are offered when, as and if issued by the Issuer, subject to the approval of legality by Winston & Strawn, New York, New York,and certain other conditions. Certain legal matters will be passed upon for the Guarantor and the Company by Schnader Harrison Segal & LewisLLP, Pittsburgh, Pennsylvania, and by in-house counsel to the Company and the Guarantor, for the Issuer by Robert J. McLaughlin, Senior VicePresident & General Counsel, Albany, New York, for JPMorgan Chase Bank, as issuer of the Original Letter of Credit, by Locke Liddell & SappLLP, Houston, Texas and for the Underwriter by Chapman and Cutler, Chicago, Illinois. It is anticipated that the Bonds in definitive form will beavailable for delivery through the facilities of DTC against payment therefor in New York, New York on or about November 26, 2002.

Merrill Lynch & Co.

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No person has been authorized to give any information or make any representations other than those contained in thisOfficial Statement in connection with the offering of the Bonds, and, if made or given, such other information or representationsmust not be relied upon as having been authorized by the New York State Environmental Facilities Corporation (the “Issuer”),Waste Management, Inc. (the “Guarantor”), Waste Management of New York, L.L.C. and USA Waste Services of NYC, Inc.(jointly, the “Company” and each, individually, a “Company” as the context may indicate), JPMorgan Chase Bank, as issuer ofthe original Letter of Credit (the “Original Credit Provider”), or Merrill Lynch, Pierce, Fenner & Smith Incorporated (the“Underwriter”). Neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create anyimplication that there has been no change in the affairs of the Issuer, the Guarantor, the Company or the Original Credit Providersince the date hereof. This Official Statement does not constitute an offer or solicitation in any jurisdiction in which such offer orsolicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so or to any person towhom it is unlawful to make such offer or solicitation.

The information set forth herein relating to the business and affairs of the Company and the Guarantor has beensupplied by the Guarantor. The information set forth herein relating to the business and affairs of the Original Credit Providerhas been supplied by the Original Credit Provider. Such information is not to be construed as a representation by the Issuer or theUnderwriter.

The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter hasreviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under thefederal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee theaccuracy or completeness of such information.

The Issuer makes no representation as to the accuracy or completeness of any information in this Official Statementand takes no responsibility for its contents, other than the information relating to the Issuer under the headings “THE ISSUER” and“LITIGATION” (as it relates to the Issuer).

In connection with the offering of the Bonds the Underwriter may overallot or effect transactions which stabilize ormaintain the market price of the Bonds at levels above those which might otherwise prevail in the open market. Suchstabilization, if commenced, may be discontinued at any time.

TABLE OF CONTENTS

INTRODUCTION ................................................................................................................................................................1THE ISSUER ......................................................................................................................................................................3THE PROJECT AND THE APPLICATION OF BOND PROCEEDS .............................................................................................3SECURITY FOR THE BONDS ..............................................................................................................................................3

General .................................................................................................................................................................3The Agreement .....................................................................................................................................................4Original Letter of Credit.......................................................................................................................................5Alternate Letter of Credit .....................................................................................................................................6The Guaranty........................................................................................................................................................6

THE BONDS ......................................................................................................................................................................8General .................................................................................................................................................................8Determination of Daily Interest Rate and Weekly Interest Rate..........................................................................9Determination of Term Interest Rate..................................................................................................................11Demand Purchase...............................................................................................................................................12Mandatory Tender for Purchase .........................................................................................................................13Redemption ........................................................................................................................................................14Purchase and Remarketing of Bonds..................................................................................................................17Book-Entry System ............................................................................................................................................18

THE ORIGINAL LETTER OF CREDIT ................................................................................................................................21Original Letter of Credit.....................................................................................................................................21Original Reimbursement Agreement..................................................................................................................23

CONTINUING DISCLOSURE .............................................................................................................................................23TAX MATTERS ...............................................................................................................................................................24LITIGATION ....................................................................................................................................................................25BOND PURCHASE AGREEMENT ......................................................................................................................................25RATING ..........................................................................................................................................................................26LEGAL MATTERS ...........................................................................................................................................................26

APPENDIX A - WASTE MANAGEMENT, INC. ............................................................................................................... A-1

APPENDIX B - SELECTED DEFINITIONS AND SUMMARY OF LEGAL DOCUMENTS.........................................................B-1

APPENDIX C - CERTAIN INFORMATION CONCERNING THE ORIGINAL CREDIT PROVIDER ...........................................C-1

APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL .............................................................................. D-1

OFFICIAL STATEMENT

$25,000,000NEW YORK STATE ENVIRONMENTAL FACILITIES CORPORATION

SOLID WASTE DISPOSAL REVENUE BONDS

(WASTE MANAGEMENT, INC. PROJECT)SERIES 2002B

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INTRODUCTION

This Official Statement, including the cover page, appendices and documentsincorporated herein and therein by reference (collectively, the “Official Statement”), is providedto furnish certain information in connection with the issuance by the New York StateEnvironmental Facilities Corporation (the “Issuer”) of $25,000,000 aggregate principal amountof its Solid Waste Disposal Revenue Bonds (Waste Management, Inc. Project) Series 2002B (the“Bonds”). The Bonds will be issued pursuant to an Indenture, dated as of November 1, 2002 (asoriginally executed and as it may from time to time be supplemented, modified or amended byany Supplemental Indenture, the “Indenture”), by and between the Issuer and The Bank of NewYork, New York, New York, as Trustee (the “Trustee”). Principal, premium, if any, and intereston the Bonds will be payable from (1) drawings made by the Trustee under any Letter of Credit(as hereinafter defined) then in effect and (2) loan repayments made to the Issuer by WasteManagement of New York, L.L.C. and USA Waste Services of NYC, Inc. (jointly, the“Company” and each, individually, a “Company” as the context may indicate), each an indirect,wholly-owned subsidiary of Waste Management, Inc. (the “Guarantor”), pursuant to a LoanAgreement, dated as of November 1, 2002 (as originally executed and as it may from time totime be supplemented, modified or amended in accordance with the terms thereof and of theIndenture, the “Agreement”), by and between the Company and the Issuer. In addition,payments required to purchase Bonds tendered by the Holders thereof as described herein under“THE BONDS—Demand Purchase” and “—Mandatory Tender for Purchase” will be made from(1) the proceeds of the remarketing of the tendered Bonds, (2) amounts drawn under any Letterof Credit then in effect, (3) payments made by the Guarantor pursuant to the Guaranty (ashereinafter defined), and (4) payments made by the Company pursuant to the Agreement. Inorder to evidence its payment obligations under the Agreement, the Company will execute anddeliver to the Issuer a Promissory Note dated as of the date of issuance of the Bonds (the“Note”). Pursuant to the Indenture, the Issuer will assign its rights to receive payments under theAgreement (except for Unassigned Issuer Rights, as defined in Appendix B hereto) and the Noteto the Trustee as security for the payment of the principal and purchase price of, and thepremium, if any, and interest on, the Bonds. The full and prompt payment of the principal andpurchase price of, and premium, if any, and interest on, the Bonds is guaranteed by the Guarantorunder a Guaranty Agreement, dated as of November 1, 2002 (the “Guaranty”), between theGuarantor and the Trustee.

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The Bonds are enhanced by an irrevocable, transferable direct-pay letter of credit (the“Original Letter of Credit”) issued by JPMorgan Chase Bank (the “Original Credit Provider”).Pursuant to the Revolving Credit Agreement dated as of June 29, 2001, among the OriginalCredit Provider, the Guarantor and other parties (together with any other documents executedpursuant thereto or in connection therewith or with the Original Letter of Credit, as any of thesame may be amended, supplemented, restated or replaced from time to time, the “OriginalReimbursement Agreement”), the Guarantor has agreed to reimburse the Original CreditProvider for any drawings under the Original Letter of Credit. See “THE ORIGINAL LETTER OF

CREDIT” herein. The Original Letter of Credit may be replaced by an Alternate Letter of Credit(as defined in Appendix B hereto) as described below under “SECURITY FOR THE

BONDS—Alternate Letter of Credit.”

The Issuer has appointed Merrill Lynch, Pierce, Fenner & Smith Incorporated asRemarketing Agent (the “Remarketing Agent”) under the Indenture. The principal office of theRemarketing Agent is located at 4 World Financial Center, 9th Floor, New York, New York10080. The Remarketing Agent may be removed or replaced at any time, subject to the termsand conditions of the Indenture and the Remarketing Agreement, dated the date of issuance ofthe Bonds, between the Guarantor and the Remarketing Agent.

The Bank of New York has been appointed to serve as Tender Agent (the “TenderAgent”) under the Indenture. The principal corporate trust office of the Tender Agent is locatedin New York, New York. The Tender Agent may be removed or replaced at any time, subject tothe terms and conditions of the Indenture.

The Bonds do not constitute the debt or indebtedness of the State of New York orany city or county within the meaning of any provision or limitation of the Constitution ofthe State of New York or statutes, and do not constitute or give rise to a pecuniary liabilityof the State of New York or a charge against its general credit or taxing powers. TheBonds and the interest and any premium thereon are special obligations of the Issuer andare payable solely from the revenues derived from the Agreement and the Note, whichrevenues have been pledged and assigned under the Indenture to the Trustee for the equaland ratable payment of the Bonds and the interest thereon. The Issuer shall not beobligated to pay the Bonds or the interest or any premium thereon except from suchrevenues. Neither the faith and credit nor the taxing power of the State of New York orany political subdivision or agency thereof is pledged to the payment of the principal of orinterest or any premium on the Bonds and the Bonds shall not be deemed to constitute adebt of the State of New York or any political subdivision or agency thereof.

Brief descriptions of the Issuer, the Project (as hereinafter defined), the Bonds, theOriginal Letter of Credit, the Original Reimbursement Agreement, the Indenture, the Agreement,the Note and the Guaranty are included in this Official Statement. Information regarding thebusiness, properties and financial condition of the Guarantor is included in Appendix A attachedto and made a part of this Official Statement. Certain definitions and summaries of theIndenture, the Agreement and the Guaranty are set forth in Appendix B attached to and made apart of this Official Statement. Information regarding the business and financial condition of theOriginal Credit Provider is included in Appendix C attached to and made part of this Official

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Statement. The proposed form of the opinion of Bond Counsel is included as Appendix Dattached to and made a part of this Official Statement. The descriptions herein of the OriginalLetter of Credit, the Original Reimbursement Agreement, the Indenture, the Agreement and theGuaranty are qualified in their entirety by reference to such documents, and the descriptionsherein of the Bonds and the Note are qualified in their entirety by reference to the forms thereofand the information with respect thereto included in the aforesaid documents. Copies of suchdocuments may be obtained during the initial offering period from the principal office of MerrillLynch, Pierce, Fenner & Smith Incorporated (the “Underwriter”), 4 World Financial Center, 9thFloor, New York, New York 10080, Attention: Corporate Tax-Exempt Finance, and thereafterfrom the Trustee. All capitalized terms used herein and not otherwise defined herein shall havethe meanings set forth in Appendix B.

THE ISSUER

The Issuer is a body corporate and politic constituting a public benefit corporationestablished under the New York State Environmental Facilities Corporation Act, as amended,being Chapter 744 of the Laws of 1970, as amended, and constituting Title 12 of Article 5 of thePublic Authorities Law of the State of New York (the “Act”), and a resolution has been adoptedby the Issuer authorizing the issuance of the Bonds and the loan of the proceeds to the Companyfor the purpose, among other things, of providing solid waste disposal facilities for the reductionof pollution in the State.

The Issuer makes no representation as to the accuracy or completeness of anyinformation in this Official Statement and takes no responsibility for its contents, other than theinformation relating to the Issuer under the headings “THE ISSUER” and “LITIGATION” (as itrelates to the Issuer).

THE PROJECT AND THE APPLICATION OF BOND PROCEEDS

The proceeds of the Bonds will be loaned by the Issuer to the Company pursuant to theterms of the Agreement. Such proceeds will be applied to pay for certain costs relating to (i) theacquisition, construction, improving and/or equipping of certain solid waste disposal facilitiesowned and operated by the Company and located in the State (the “Project”) and (ii) the issuanceof the Bonds.

SECURITY FOR THE BONDS

The Bonds are not secured by a mortgage, security interest or other lien on theProject or any other properties of the Company or the Guarantor.

General

Payment of principal of, premium, if any, and interest on the Bonds will be paid from(1) drawings made by the Trustee under any Letter of Credit then in effect, (2) Loan Paymentsmade to the Issuer by the Company pursuant to the Agreement and the Note. In addition, the

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purchase price of tendered Bonds will be paid from (1) the proceeds of the remarketing of thetendered Bonds, (2) drawings under any Letter of Credit then in effect, (3) payments made by theGuarantor pursuant to the Guaranty and (4) payments made by the Company pursuant to theAgreement and the Note, in an amount equal to 100% of the principal amount of any Bondstendered for purchase as described below under “THE BONDS—Demand Purchase” and“—Mandatory Tender for Purchase,” plus accrued and unpaid interest thereon (the “PurchasePrice”) to but not including the date on which such Bonds are required to be purchased (the“Purchase Date”). The Bonds are also payable from the proceeds from the sale of the Bonds andfrom income derived from the investment of moneys held under the Indenture under thecircumstances set forth in the Indenture.

The Issuer will assign to the Trustee, as security for the Bonds, all of its right, title andinterest in the Agreement (except for Unassigned Issuer Rights), including its rights to theamounts payable by the Company under the Agreement sufficient to pay when due the principalof, and premium, if any, and interest on, the Bonds. The Issuer will also assign to the Trustee,for the benefit of tendering Holders, its rights to the amounts payable by the Company under theAgreement sufficient to pay when due the Purchase Price of Bonds tendered (or deemedtendered) for purchase. The Company’s obligations to make such payments pursuant to theAgreement will be absolute and unconditional and are not subject to any defense or any rights ofset-off, recoupment or counterclaim it might otherwise have against the Issuer. Neither theTrustee nor the Holders will have any lien or security interest in the Project or any other propertyof the Company.

The Bonds do not constitute the debt or indebtedness of the State of New York orany city or county within the meaning of any provision or limitation of the Constitution ofthe State of New York or statutes, and do not constitute or give rise to a pecuniary liabilityof the State of New York or a charge against its general credit or taxing powers. TheBonds and the interest and any premium thereon are special obligations of the Issuer andare payable solely from the revenues derived from the Agreement and the Note, whichrevenues have been pledged and assigned under the Indenture to the Trustee for the equaland ratable payment of the Bonds and the interest thereon. The Issuer shall not beobligated to pay the Bonds or the interest or any premium thereon except from suchrevenues. Neither the faith and credit nor the taxing power of the State of New York orany political subdivision or agency thereof is pledged to the payment of the principal of orinterest or any premium on the Bonds and the Bonds shall not be deemed to constitute adebt of the State of New York or any political subdivision or agency thereof.

The Agreement

Until the principal, premium, if any, and interest on the Bonds has been fully paid orprovision for such payment has been made as provided in the Indenture, on each date uponwhich any amounts payable with respect to the Bonds becomes due, whether upon redemption,acceleration, maturity or otherwise (a “Bond Payment Date”), the Company has agreed to pay tothe Trustee as a repayment on the loan of the Bond proceeds made to the Company under theAgreement a sum equal to the amount payable on such Bond Payment Date as principal of and

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premium, if any, and interest on, the Bonds as provided in the Indenture (a “Loan Payment”). Toevidence its obligation to repay such loan, the Company will execute and deliver the Note.

Each Loan Payment will at all times be sufficient to pay the total amount of interest andprincipal (whether at maturity or upon redemption or acceleration) and premium, if any,becoming due and payable on the Bonds on each Bond Payment Date; provided that any amountheld by the Trustee in the Bond Fund on any due date for a Loan Payment under the Agreementwill be credited against the Loan Payment due on such date, to the extent available for suchpurpose; and provided further that, subject to the provisions described in this paragraph, if at anytime the amounts held by the Trustee in the Bond Fund and available for such purpose aresufficient to pay all of the principal of and interest and premium, if any, on the Bonds as suchpayments become due, the Company will be relieved of any obligation to make any further LoanPayment. Notwithstanding the foregoing, if on any date the amount held by the Trustee in theBond Fund created under the Indenture is insufficient to make any required payments ofprincipal of (whether at maturity or upon redemption or acceleration) and interest and premium,if any, on, the Bonds as such payments become due, the Company has agreed to forthwith paysuch deficiency as a Loan Payment under the Agreement.

The Company has also covenanted in the Agreement to make Purchase Price Paymentsupon tenders of Bonds as described below under “THE BONDS—Demand Purchase” and“—Mandatory Tender for Purchase,” at the Purchase Price on the Purchase Date.

The obligations of each Company to make the Loan Payments, the Purchase PricePayments and any other payments required pursuant to the Agreement and the Note and toperform and observe the other agreements on its part contained therein will be joint and several,absolute and unconditional, irrespective of any defense or any rights of set-off, recoupment orcounterclaim it might otherwise have against the Issuer, and during the term of the Agreement,the Company has agreed to pay all payments required to be made under the Agreement (whichpayments will be net of any other obligations of the Company), free of any deductions andwithout abatement, diminution or set-off. Until such time as the principal of, premium, if any,and interest on, the Bonds has been fully paid, or provision for the payment thereof has beenmade as required by the Indenture, the Company (i) will not suspend or discontinue anypayments provided for in the Agreement; (ii) will perform and observe all of its other covenantscontained in the Agreement; and (iii) except as provided therein, will not terminate theAgreement for any cause.

Additional information regarding the Agreement is set forth in Appendix B hereto.

Original Letter of Credit

The Bonds are further enhanced by an irrevocable, transferable direct-pay Letter ofCredit which will be issued in favor of the Trustee on the date of issuance of the Bonds. See“THE ORIGINAL LETTER OF CREDIT.”

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Alternate Letter of Credit

The Company may at any time, at its option, provide for the delivery to the Trustee of anAlternate Letter of Credit and the Company will, while the Bonds are in a Variable Interest RatePeriod, cause to be delivered an Alternate Letter of Credit at least two Business Days before theexpiration date of any existing Letter of Credit, unless otherwise permitted by the Indenture. AnAlternate Letter of Credit must be an irrevocable letter of credit or other irrevocable creditfacility (including, if applicable, a confirming letter of credit), issued by a commercial bank,savings association or other financial institution, the terms of which shall in all material respectsbe the same as the Original Letter of Credit; provided, that the expiration date of such AlternateLetter of Credit will be a date not earlier than one year less one day from its date of issuance,subject to earlier termination upon payment of all Bonds in full or provision for such payment inaccordance with the defeasance provisions of the Indenture. On or prior to the date of thedelivery of an Alternate Letter of Credit to the Trustee, the Company will cause to be furnishedto the Trustee (i) an opinion of Bond Counsel stating to the effect that the delivery of suchAlternate Letter of Credit to the Trustee is authorized under the Indenture and complies with theterms thereof and will not in and of itself adversely affect the Tax-exempt status of interest onthe Bonds, (ii) an opinion of counsel to the provider of such Alternate Letter of Credit that suchAlternate Letter of Credit is enforceable in accordance with its terms (except to the extent thatthe enforceability thereof may be limited by bankruptcy, reorganization or similar laws limitingthe enforceability of creditors’ rights generally and except that no opinion need be expressed asto the availability of any discretionary equitable remedies), and (iii) written evidence from theRating Agency that the Bonds will have a long-term rating of “A” (or equivalent) or higher or, ifthe Bonds only have a short-term rating, such short-term rating will be in the highest short-termrating category (without regard to “+”s or “-”s).

The Company is required under the Agreement to provide the Trustee a notice at least15 days prior to the effective date of any Alternate Letter of Credit (and in any event no laterthan 35 days prior to the expiration of any existing Letter of Credit) identifying any suchAlternate Letter of Credit and the rating which is expected to apply to the Bonds after sucheffective date. Whenever the Company has delivered to the Trustee a notice of delivery of anAlternate Letter of Credit pursuant to the Agreement, the Trustee will, as set forth in theIndenture, provide certain notices to the Owners of the Bonds at least ten days prior to theeffective date of the Alternate Letter of Credit (and in any event no later than 30 days prior to thestated expiration date of any existing Letter of Credit).

The Guaranty

Pursuant to the Guaranty, the Guarantor has absolutely and unconditionally guaranteed tothe Trustee for the benefit of the owners and beneficial owners of the Bonds, whether or notupon the dishonor or repudiation of any Letter of Credit then in effect, the full and promptpayment of all payment obligations under the Agreement, including, without limitation, (a) theprincipal of and redemption premium, if any, on the Bonds when as the same become due(whether at maturity, by acceleration, call for redemption or otherwise); (b) the interest on theBonds when and as the same become due; (c) the purchase price of Bonds tendered or deemedtendered for purchase pursuant to those sections of the Indenture relating to demand purchase of

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the Bonds during a Variable Interest Rate Period (as described below under “THE

BONDS—Demand Purchase”) and mandatory tender for purchase of the Bonds (as describedbelow under “THE BONDS—Mandatory Tender for Purchase”); and (d) all Loan Payments,Purchase Price Payments and other payments due or to become due from the Company under theAgreement. The obligations of the Guarantor under the Guaranty will remain in full force andeffect until the entire principal, redemption premium, if any, and interest on and purchase priceof the Bonds has been paid or provided for according to the terms of the Indenture.

The obligations of the Guarantor under the Guaranty are absolute and unconditional andwill not be impaired, modified, released or limited by any occurrence or condition whatsoever(other than upon the discharge of the lien of the Indenture in accordance with the terms thereof),including, without limitation,

(i) any compromise, settlement, release, wavier, renewal, extension,indulgence, change in, amendment to or modification of any of the obligations andliabilities contained in the Bonds, the Indenture or the Agreement;

(ii) any impairment, modification, release or limitation of the liability of theIssuer or the Company, or any other security for or guaranty of the Bonds, or any remedyfor the enforcement thereof, resulting from the operation of any present or futureprovision of the federal bankruptcy laws or other statutes or from the decision of anycourt relating thereto;

(iii) the assertion or exercise by the Issuer, its successor or assigns, or theTrustee of any rights or remedies under the Indenture, the Agreement or the Guaranty ortheir delay in asserting or exercising, or failure to assert or exercise, any such rights orremedies;

(iv) the assignment or mortgaging or the purported assignment or mortgagingof all or any part of the interest of the Company in the Project; and

(v) the purchase or sale of any capital stock of the Company.

During the term of the Guaranty, the Guarantor will agree to maintain its corporateexistence, will not dissolve or otherwise dispose of all or substantially all of its assets and willnot consolidate with or merge into another corporation unless the acquirer of its assets or thecorporation with which it consolidates or into which it merges assumes in writing all of theobligations of the Guarantor under the Guaranty. Any transfer of all or substantially all of theGuarantor’s assets to any of its wholly owned direct or indirect subsidiaries, including theCompany, will not be deemed to constitute a disposition “of all or substantially all theGuarantor’s assets,” within the meaning of the Guaranty as described in this paragraph.

Additional information regarding the Guaranty is set forth in Appendix B hereto.

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THE BONDS

The following is a summary, which does not purport to be complete, of certain provisionsof the Bonds.

General

The Bonds will be dated their date of issuance, will mature, subject to optional andmandatory redemption as described herein, on May 1, 2019, and will initially bear interest on theunpaid principal amount thereof at a Weekly Interest Rate determined as described herein under“THE BONDS—Determination of Daily Interest Rate and Weekly Interest Rate.” During a DailyInterest Rate Period or a Weekly Interest Rate Period, interest on the Bonds will be computedupon the basis of a 365-day or 366-day year, as applicable, for the number of days actuallyelapsed. During any Term Interest Rate Period, interest on the Bonds will be computed upon thebasis of a 360-day year, consisting of twelve 30-day months.

The Bonds are issuable in Authorized Denominations. “Authorized Denominations”means (i) during any Daily Interest Rate Period or Weekly Interest Rate Period, $100,000 or anyintegral multiple thereof, and (ii) during a Term Interest Rate Period, $100,000 or any integralmultiple of $5,000 above that amount, except that if at any time during a Term Interest RatePeriod the Bonds are rated “A” or higher by all Ratings Agencies then rating the Bonds, theAuthorized Denomination will be $5,000 or any integral multiple thereof. The Bonds will betransferable and exchangeable as set forth in the Indenture, and will be initially registered in thename of Cede & Co., as nominee of The Depository Trust Company (“DTC”). DTC will act assecurities depository for the Bonds. Ownership interests in the Bonds may be purchased inbook-entry form only in Authorized Denominations (see “THE BONDS—Book-Entry System”herein).

Principal of and premium, if any, on the Bonds will be payable at maturity or redemptionupon surrender thereof at the Corporate Trust Office of the Trustee in New York, New York.Payment of the interest on any Bond will be made to the person appearing on the bondregistration books of the Trustee, acting as bond registrar (the “Bond Registrar”), as the Holderthereof on the Record Date, such interest to be paid to such Holder (1) by check mailed on theInterest Payment Date to such Holder’s address as it appears on the registration books or at suchother address as has been furnished to the Bond Registrar in writing by such Holder not laterthan the Record Date, or (2) upon written request at least three Business Days prior to theapplicable Record Date of the Holder of Bonds aggregating not less than $1,000,000 in principalamount, by wire transfer in immediately available funds at an account maintained in the UnitedStates at such wire address as such Holder specifies in its written request (any such writtenrequest to remain in effect until rescinded in writing by such Holder).

“Interest Payment Date” means (i) the first Business Day of each month with respect to aDaily Interest Rate Period or Weekly Interest Rate Period, (ii) each May 1 and November 1 withrespect to a Term Interest Rate Period, (iii) the effective date of each Interest Rate Period, or(iv) the maturity date of the Bonds.

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“Interest Period” means the period from and including any Interest Payment Date to andincluding the day immediately preceding the next following Interest Payment Date, except thatthe first Interest Period will be the period from and including the date of issuance of the Bonds toand including the day immediately preceding the first Interest Payment Date relating to theBonds.

“Interest Rate Period” means a Daily Interest Rate Period, Weekly Interest Rate Period orTerm Interest Rate Period.

“Record Date” means (i) the Business Day immediately preceding the applicable InterestPayment Date with respect to a Daily Interest Rate Period or a Weekly Interest Rate Period and(ii) the day, whether or not a Business Day, which is the fifteenth day of the month prior to anInterest Payment Date with respect to any Term Interest Rate Period.

“Variable Interest Rate” means the Daily Interest Rate and the Weekly Interest Rate.

As provided in the Indenture, the interest rate on the Bonds may be converted from aWeekly Interest Rate to a Daily Interest Rate as described below under “THE

BONDS—Determination of Daily Interest Rate and Weekly Interest Rate—Adjustment to DailyInterest Rate Period or Weekly Interest Rate Period” or to a Term Interest Rate as describedbelow under “THE BONDS – Determination of Term Interest Rate—Adjustment to Term InterestRate Period.” In no event, however, may the rate of interest on the Bond’s exceed at any timethe rate of 12% per annum. The Interest Rate Period may thereafter be changed from time totime among a Term Interest Rate Period, a Daily Interest Rate Period and a Weekly Interest RatePeriod as provided in the Indenture. Upon a change in the Interest Rate Period, the Bonds willbe subject to mandatory tender for purchase as described below under “THE BONDS—MandatoryTender for Purchase.”

Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Underwriter, will determine theinitial Weekly Interest Rate for the Bonds. Thereafter, the Remarketing Agent will determine theWeekly Interest Rate and any subsequent interest rate on the Bonds. See “THE

BONDS—Determination of Daily Interest Rate and Weekly Interest Rate” and “—Determinationof Term Interest Rate.” The determination of the interest rate on the Bonds by the RemarketingAgent as provided in the Indenture will be conclusive and binding upon the Holders of theBonds, the Company, the Issuer, the Trustee, the Tender Agent and any Credit Provider.

Determination of Daily Interest Rate and Weekly Interest Rate

Daily Interest Rate and Weekly Interest Rate. During each Daily Interest Rate Period,the Bonds will bear interest at the Daily Interest Rate, which will be determined by theRemarketing Agent not later than 9:30 a.m. (New York City time) on each Business Day duringsuch Daily Interest Rate Period to take effect on such Business Day. During each WeeklyInterest Rate Period, the Bonds will bear interest at the Weekly Interest Rate, which will bedetermined by the Remarketing Agent not later than 4:00 p.m. (New York City time) onWednesday of each week (or by 4:00 p.m. (New York City time) on the next succeedingBusiness Day if such Wednesday is not a Business Day) during such Weekly Interest Rate

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Period for the week commencing on that next succeeding Thursday (unless such Weekly InterestRate is determined on a Thursday in which case it will be effective on such day); provided,however, that if the initial Interest Rate Period is a Weekly Interest Rate Period or if the thencurrent Interest Rate Period is a Daily Interest Rate or a Term Interest Rate Period, the initialWeekly Interest Rate for the initial Interest Rate Period or the Weekly Interest Rate Periodsucceeding such Daily Interest Rate or Term Interest Rate Period, will be determined not laterthan the Business Day next preceding the effective date of such Weekly Interest Rate Period.The Variable Interest Rate will be the rate determined by the Remarketing Agent (on the basis ofexamination of obligations comparable to the Bonds known by the Remarketing Agent to havebeen priced or traded under then prevailing market conditions) to be the minimum interest ratewhich, if borne by the Bonds, would enable the Remarketing Agent to sell the Bonds on theeffective date of such interest rate at a price equal to the principal amount thereof plus accruedinterest; provided, however, that if for any reason the Variable Interest Rate cannot bedetermined, the Daily Interest Rate for the next succeeding Business Day and thereafter willremain at the then existing rate, and the Weekly Interest Rate for the next succeeding week willremain at the then existing rate, and thereafter the Weekly Interest Rate will be the BMA IndexRate plus 15 basis points. Each Daily Interest Rate will apply to the period commencing on theBusiness Day on which such rate becomes effective and ending at the close of business on theday immediately prior to the next succeeding Business Day (being the Business Day on whichsuch rate becomes effective if the next day is also a Business Day). The first Weekly InterestRate determined for each Weekly Interest Rate Period will apply to the period commencing onthe first day of such Weekly Interest Rate Period and ending on the next succeeding Wednesday.Thereafter, each Weekly Interest Rate will apply to the period commencing on Thursday andending on the next succeeding Wednesday, unless such Weekly Interest Rate Period ends on aday other than Wednesday, in which event the last Weekly Interest Rate for such Weekly InterestRate Period will apply to the period commencing on the Thursday preceding the last day of suchWeekly Interest Rate Period and ending on such last day.

Adjustment to Daily Interest Rate Period or Weekly Interest Rate Period. TheCompany, by written direction to the Trustee and the Remarketing Agent, may elect to adjust theInterest Rate Period for the Bonds (i) from a Weekly Interest Rate Period or a Term Interest RatePeriod to a Daily Interest Rate Period or (ii) from a Daily Interest Rate Period or a Term InterestRate Period to a Weekly Interest Rate Period. Such direction will include the information setforth in the Indenture and will specify the effective date of such adjustment to a Daily InterestRate Period or Weekly Interest Rate Period, as applicable, which will be an Interest PaymentDate with respect to the then current Daily Interest Period or Weekly Interest Rate Period or theInterest Payment Date which is the day next succeeding the last day of the then current TermInterest Rate Period, as applicable (or the Business Day next succeeding such Interest PaymentDate if such Interest Payment Date is not a Business Day), not less than 40 days following thedate of receipt by the Trustee of such direction.

Notice of Adjustment to Daily Interest Rate Period or Weekly Interest Rate Period.The Trustee will give notice by mail of an adjustment to a Variable Interest Rate Period to theBondholders, the Credit Provider, if any, the Remarketing Agent, and the Company not less than35 days prior to the effective date of such Variable Interest Rate Period. Such notice will state(1) that the interest rate on the Bonds will be adjusted to a Daily Interest Rate or a Weekly

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Interest Rate, as applicable, (2) the effective date of such Daily Interest Rate Period or WeeklyInterest Rate Period, as applicable, (3) that the Bonds will be purchased on such effective date,pursuant to the Indenture, and (4) the procedures for such purchase.

Determination of Term Interest Rate

Term Interest Rate. During each Term Interest Rate Period, the Bonds will bear interestat the Term Interest Rate, which will be determined by the Remarketing Agent not later than3:00 p.m. (New York City time) on the Business Day preceding the first day of such TermInterest Rate Period. The Term Interest Rate will be the rate determined by the RemarketingAgent (on the basis of examination of obligations comparable to the Bonds known by theRemarketing Agent to have been priced or traded under then prevailing market conditions) to bethe minimum interest rate which, if borne by the Bonds, would enable the Remarketing Agent tosell the Bonds on the effective date of such Term Interest Rate at a price equal to the principalamount thereof; provided, however, that if for any reason the Term Interest Rate cannot bedetermined for any Term Interest Rate Period, the interest rate on the Bonds will be adjusted to aWeekly Interest Rate.

Adjustment to Term Interest Rate Period. The Company, by written direction to theTrustee and the Remarketing Agent may elect that the Interest Rate Period for the Bonds will bea Term Interest Rate Period, and will determine the duration of the Term Interest Rate Period(which may be any period of one year, or any multiple of one year or the period of timeremaining to the maturity of the Bonds). Such direction (a) must specify the effective date ofsuch Term Interest Rate Period which will be (1) an Interest Payment Date with respect to thethen current Variable Interest Rate Period not less than 40 days following the date of receipt bythe Trustee of such direction or (2) the Interest Payment Date which is the day next succeedingthe last day of the then current Term Interest Rate Period (or the Business Day next succeedingsuch Interest Payment Date if such Interest Payment Date is not a Business Day) not less than40 days following the date of receipt by the Trustee of such direction; (b) must specify the lastday thereof; (c) must state that the Bonds will be purchased on the effective date of such TermInterest Rate; and (d) must be accompanied by an executed copy of the Continuing DisclosureAgreement to be in effect with respect to such Term Interest Rate Period. If, at least 40 daysprior to the last day of any Term Interest Rate Period, the Company has not elected that theBonds bear interest at a Variable Interest Rate or a Term Interest Rate during the next succeedingInterest Rate Period, the next succeeding Interest Rate Period will be a Term Interest Rate Periodof the same duration as the Term Interest Rate Period currently in effect, or, if less, until the finalmaturity of the Bonds.

Notice of Adjustment to Term Interest Rate Period. The Trustee will give notice bymail of each Term Interest Rate Period to the Bondholders, the Credit Provider, if any, theRemarketing Agent and the Company not less than 30 days prior to the effective date of suchTerm Interest Rate Period. Such notice will state (1) that the interest rate on the Bonds will beadjusted to or continue to be a Term Interest Rate, (2) the effective date of such Term InterestRate Period, (3) that the Bonds will be purchased on such effective date, and (4) the proceduresfor such purchase.

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The determination of the interest rate on the Bonds by the Remarketing Agent will beconclusive and binding upon the Bondholders, the Company, the Issuer, the Tender Agent, theCredit Provider, if any, and the Trustee.

Any election by the Company to adjust the Interest Rate Period for the Bonds from aVariable Interest Rate Period or a Term Interest Rate Period of one year in length to a TermInterest Rate Period of more than one year in length or from a Term Interest Rate Period of morethan one year in length to a Variable Interest Rate Period or a Term Interest Rate Period of oneyear in length must be accompanied by an Approving Opinion.

Demand Purchase

During any Variable Interest Rate Period, the Bonds or portions thereof in AuthorizedDenominations will be purchased at the option of the Bondholder thereof, or with respect toBook-Entry Bonds, at the option of the Direct Participant with an ownership interest in Book-Entry Bonds, on any Business Day, at a price of 100% of the principal amount thereof, plusaccrued interest to the Purchase Date, upon (i) delivery to the Trustee, if the Bonds are Book-Entry Bonds, or otherwise to the Tender Agent, at its Corporate Trust Office of an irrevocablenotice in writing (a “Tender Notice”) by 10:00 a.m. (New York City time) in the case of Bondsbearing interest at a Daily Interest Rate, or 4:00 p.m. (New York City time) in the case of Bondsbearing interest at a Weekly Interest Rate, on any Business Day, which states the name of theregistered Bondholder of such Bonds or the Direct Participant for such Bonds, as applicable,such Direct Participant’s account number, payment instructions with respect to the PurchasePrice of such Bonds, the principal amount of such Bonds or portions thereof in AuthorizedDenominations being tendered for purchase, the CUSIP number of such Bonds and the date onwhich the same are to be purchased (which date in the case of Bonds bearing interest at a DailyInterest Rate, will be any Business Day and, in the case of Bonds bearing interest at a WeeklyInterest Rate, will be a Business Day not prior to the seventh day next succeeding the date of thedelivery of such notice to the Tender Agent), and (ii) (a) if the Bonds are not Book-Entry Bonds,delivery of such Bonds to the Tender Agent at its Corporate Trust Office, accompanied by aninstrument of transfer thereof in form satisfactory to the Tender Agent, executed in blank by theBondholder thereof with the signature guaranteed in accordance with the guidelines set forth byone of the nationally recognized medallion signature programs at or prior to 12:00 p.m. (NewYork City time), on the date specified in such notice, or (b) if the Bonds are Book-Entry Bonds,upon confirmation by DTC (obtained by a Direct Participant with respect to Book-Entry Bondsbeing tendered for purchase) that such Direct Participant has an ownership interest in suchBook-Entry Bonds at least equal to the amount specified in such Tender Notice, and of thetransfer on the registration books of DTC of the beneficial ownership interest in such Book-EntryBonds to the account of the Trustee (or to the account of a Direct Participant acting on behalf ofthe Trustee).

If moneys sufficient to pay the Purchase Price of any Bonds to be purchased as describedin the immediately preceding paragraph are held by the Trustee on the date such Bonds are to bepurchased, any such Bonds to be so purchased which are not delivered by the Bondholdersthereof to the Tender Agent or transferred on the registration books of DTC, as applicable, on thedate specified for purchase thereof will be deemed to have been delivered for purchase, or

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transferred on the registration books of DTC, as applicable, on such date and to have beenpurchased. The former Bondholders, or Direct Participants with respect to Book-Entry Bonds,will thereafter have no rights with respect to such Bonds except to receive payment of thePurchase Price therefor upon surrender of such Bonds to the Tender Agent or the transfer on theregistration books of DTC of the beneficial interest in such Book-Entry Bonds.

Mandatory Tender for Purchase

(1) On the effective date of any new Interest Rate Period for the Bonds, (2) on the lastBusiness Day not less than five calendar days preceding the expiration date of any then currentLetter of Credit if no Alternate Letter of Credit will be provided, except that if item (1) aboveapplies, this item (2) will not apply, and (3) during a Variable Interest Period, on the effectivedate of any Alternate Letter of Credit, complying with the requirements of the Agreement, theBondholder or Direct Participant of each Bond is required under the Indenture to tender suchBond for purchase as described below and such Bond will be purchased or deemed purchased ata Purchase Price equal to the principal amount thereof plus accrued and unpaid interest thereon.Payment of the Purchase Price of such Bond will be made by 3:00 p.m. (New York City time), inimmediately available funds. If the Bonds are not Book-Entry Bonds, the Bondholders mustdeliver the Bonds no later than 12:00 p.m. (New York City time) on the Purchase Date to theTender Agent at its Corporate Trust Office, accompanied by an instrument of transfer thereof, inform satisfactory to the Tender Agent, with the signatures guaranteed in accordance with theguidelines set forth by one of the nationally recognized medallion signature programs. If theBonds are Book-Entry Bonds, the tendering Direct Participants shall transfer, on the registrationbooks of DTC, the beneficial ownership interests in the Bonds tendered for purchase to theaccount of the Trustee or a Direct Participant acting on behalf of the Trustee.

If moneys sufficient to pay the Purchase Price of the Bonds to be purchased as describedin the immediately preceding paragraph are held by the Trustee on the date such Bonds are to bepurchased, any such Bonds to be so purchased which are not delivered by the Bondholdersthereof to the Tender Agent or transferred on the registration books of DTC, as applicable, on thedate specified for purchase thereof will be deemed to have been delivered for purchase, ortransferred on the registration books of DTC, as applicable, on such date and to have beenpurchased. The former Bondholders, or Direct Participants with respect to Book-Entry Bonds,will thereafter have no rights with respect to such Bonds except to receive payment of thePurchase Price therefor upon surrender of such Bonds to the Tender Agent or the transfer on theregistration books of DTC of the beneficial interest in such Book-Entry Bonds.

Whenever the Company has delivered to the Trustee a notice of the delivery of a Letter ofCredit or an Alternate Letter of Credit pursuant to the Agreement, the Trustee is required to mailby first class mail a notice to all Bondholders stating: (i) the name of the issuer of the Letter ofCredit or Alternate Letter of Credit, (ii) the date on which the Letter of Credit or Alternate Letterof Credit will become effective, which date will not be less than two Business Days prior to thestated expiration date of the existing Letter of Credit in the case of an Alternate Letter of Credit,(iii) the rating expected to apply to the Bonds after the Letter of Credit or Alternate Letter ofCredit is delivered, and (iv) that the Bonds will be subject to mandatory tender for purchase onthe effective date of the Letter of Credit or Alternate Letter of Credit, and the procedures for such

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purchase. Such notice is required to be mailed at least ten days prior to the effective date of theLetter of Credit or Alternate Letter of Credit.

In the event of a mandatory tender described in item (2) of the third preceding paragraph,the Trustee is required to mail by first class mail a notice to all Bondholders stating: (i) that theLetter of Credit then in effect is expiring and no Alternate Letter of Credit will be provided,(ii) the date of such expiration, (iii) that the Bonds will be subject to mandatory tender forpurchase, (iv) the date of such mandatory tender for purchase (which will be the last BusinessDay not less than five calendar days preceding the expiration date of such Letter of Credit), and(v) the procedures for such purchase. Such notice is required to be mailed at least 30 days priorto the expiration date of the Letter of Credit.

Redemption

The Bonds are subject to redemption if and to the extent the Company is entitled to make,or is required to make, a prepayment pursuant to the Agreement. All such prepayments are to bedeposited in the Redemption Account, which Redemption Account the Trustee is required toestablish and maintain within the Bond Fund as provided in the Indenture. The Issuer will notcall the Bonds for optional redemption, and the Trustee will not give notice of any suchredemption, unless the Company has so directed. The Bonds are subject to redemption upon thefollowing terms:

Mandatory Redemption upon Invalidity or a Determination of Taxability. In theevent of a prepayment as a result of the invalidity of the Agreement or a Determination ofTaxability, Bonds Outstanding on the date of the occurrence of such invalidity or Determinationof Taxability will be redeemed in whole (or in part if the Company delivers an ApprovingOpinion to the Trustee) at any time within 60 days thereafter, at a redemption price of 100% ofthe principal amount thereof, without premium, plus accrued interest, if any, to the date ofredemption.

Mandatory Redemption from Excess Bond Proceeds. The Bonds shall be redeemed,in whole or in part, on any date from excess Bond proceeds on deposit in the Surplus Account ofthe Bond Fund, at a redemption price of 100% of the principal amount thereof without premium,plus accrued interest, if any, to the date of redemption. The deposit of excess Bond proceeds inthe Surplus Account of the Bond Fund will be deemed to be a direction of the Company toredeem on the earliest possible date such principal amount of Bonds in AuthorizedDenominations in accordance with the provisions of the Indenture in order that all such excessBond proceeds are totally used to so redeem Bonds. The Company is required under theAgreement to deposit any additional moneys which may be necessary in order to comply withthe requirements of the immediately preceding sentence.

Optional Redemption upon Occurrence of Extraordinary Events. During any TermInterest Rate Period, the Bonds may be redeemed in whole or in part on any date, at a redemptionprice of 100% of the principal amount thereof, without premium, plus accrued interest, if any, tothe date of redemption, upon receipt by the Trustee of a written notice from the Company statingthat any of the following events has occurred:

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(i) all of the Project or a portion thereof is damaged, destroyed, condemned ortaken by eminent domain to such extent that, in the opinion of the Company contained ina certificate provided to the Issuer and the Trustee, which certificate may be conclusivelyrelied upon by the Trustee and the Issuer, (1) it is not practicable or desirable to rebuild,repair or restore the Project or such portion thereof within a period of six consecutivemonths following such damage, destruction or condemnation, and the Company is or willbe thereby prevented from carrying on its normal operations at the Project or such portionthereof for a period of at least six consecutive months, or (2) the cost of restoration of theProject or such portion thereof would substantially exceed the Net Proceeds of insurancecarried thereon; or

(ii) the continued operation of the Project or a portion thereof is enjoined orprevented or is otherwise prohibited by, or conflicts with, any order, decree, rule orregulation of any court or federal, state or local regulatory body, administrative agency orother governmental body.

Anything described in the preceding paragraph to the contrary notwithstanding, if any ofthe events described above has occurred with respect to part, but not all, of the Project, theamount of the Bonds that may be redeemed cannot exceed an amount derived by multiplying thetotal principal amount of the Bonds by a fraction (i) the numerator of which is the cost of theaffected portion of the Project and (ii) the denominator of which is the total cost of the Project.

Optional Redemption During a Variable Interest Rate Period or on any InterestRate Period Effective Date. On any Interest Payment Date during a Variable Interest RatePeriod and on the effective date of any Interest Rate Period, the Bonds may be redeemed by theTrustee, at the option of the Issuer upon direction of the Company as provided in the Agreement,in whole or in part, at a redemption price of 100% of the principal amount thereof, withoutpremium.

Optional Redemption During Term Interest Rate Period. During any Term InterestRate Period of greater than ten years in length, the Bonds are also subject to redemption in wholeor from time to time in part, at the option of the Issuer upon direction of the Company asprovided in the Agreement, at the times (measured from the first day of the applicable TermInterest Rate Period), and at the redemption prices (expressed as percentages of principalamount) set forth below, plus accrued interest, if any, to the redemption date:

Length of Term Interest Rate PeriodFrom Effective Date of Term Interest

Rate Period Until End of TermInterest Rate Period Redemption Dates and Prices

Greater than 10 years At any time on or after the 10th anniversary of theeffective date of such Interest Rate Period at 101%declining by 1/2% on each anniversary thereafter to100%, and thereafter at 100%

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Notwithstanding the optional redemption schedule set forth above, on or prior to the effectivedate of the Term Interest Rate Period, the Company can provide an alternate optional redemptionschedule if it obtains an Approving Opinion.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture forthe redemption of less than all of the Bonds, the Trustee will select the Bonds to be redeemedfrom all Bonds or such given portion thereof not previously called for redemption by lot in anymanner which the Trustee in its sole discretion deems appropriate and fair, provided, that BankBonds shall be selected prior to any other Bonds. Redemption will be done so that no Bond willremain Outstanding in an amount less than an Authorized Denomination.

Notice of Redemption. Notice of redemption is required to be mailed by the Trustee byfirst class mail not less than 30 days (15 days in the case of optional redemption during aVariable Interest Rate Period on any Interest Payment Date or on any Interest Rate Periodeffective date) or more than 60 days before such redemption date, to the respective Bondholdersdesignated for redemption at their addresses on the registration books maintained by the BondRegistrar and to each national repository. Each notice of redemption will state the redemptiondate, the place or places of redemption, if less than all of the Bonds are to be redeemed, thedistinctive number(s) of the Bonds to be redeemed, and in the case of Bonds to be redeemed inpart only, the respective portions of the principal amount thereof to be redeemed. Subject to thesecond succeeding sentence, each such notice will also state that on said date there will becomedue and payable on each of said Bonds the principal thereof or of said specified portion of theprincipal thereof in the case of a Bond to be redeemed in part only, and that from and after suchredemption date interest thereon will cease to accrue, and will require that such Bonds be thensurrendered. Neither failure to receive such notice nor any defect therein will affect thesufficiency of such redemption. With respect to any notice of optional redemption of Bonds atthe written direction of the Company, unless upon the giving of such notice Bonds will bedeemed to have been paid within the meaning of the Indenture, such notice may state (if sodirected by the Company in writing) that such redemption will be conditional upon the receipt bythe Trustee on or prior to the date fixed for such redemption of moneys (or Available Moneys ifa Letter of Credit is then in effect) sufficient to pay the principal of, and premium, if any, andinterest on, such Bonds to be redeemed, and that if such moneys are not so received said noticewill be of no further force and effect and the Issuer will not be required to redeem such Bonds.In the event that such notice of redemption contains such a condition and such moneys are not soreceived, the redemption will not be made and the Trustee will within a reasonable timethereafter give notice to such Bondholders, in the manner in which the notice of redemption wasgiven, that such moneys were not so received.

Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, theIssuer will execute and the Trustee will authenticate and deliver to the Bondholder thereof, at theexpense of the Company, a new Bond or Bonds of Authorized Denominations equal in aggregateprincipal amount to the unredeemed portion of the Bond surrendered.

Effect of Redemption. Notice of redemption having been duly given as describedabove, and moneys (which moneys must be Available Moneys while a Letter of Credit is ineffect) for payment of the redemption price of, together with interest accrued to the date fixed for

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redemption on, the Bonds (or portions thereof) so called for redemption being held by theTrustee on the redemption date designated in such notice, the Bonds (or portions thereof) socalled for redemption will become due and payable, interest on the Bonds so called forredemption will cease to accrue, said Bonds (or portions thereof) will cease to be entitled to anybenefit or security under the Indenture (except for payment of particular Bonds for whichmoneys are being held by the Trustee and which money will be pledged to such payment), andthe Bondholders of said Bonds will have no rights in respect thereof except to receive paymentof said principal, premium, if any, and interest accrued to the date fixed for redemption.

Purchase and Remarketing of Bonds

Purchase of Bonds. Whenever the Bonds are Book-Entry Bonds, all references in thissection to the Tender Agent will instead mean the Trustee, as the context may require.

As soon as practicable but in any event no later than (a) 12:00 noon (New York Citytime) on the Business Day after a Tender Notice is received during a Weekly Interest RatePeriod, or (b) 10:30 a.m. (New York City time) on the same Business Day that a Tender Noticeis received during a Daily Interest Rate Period, the Tender Agent is required to give telephonic,telegraphic, electronic or telecopier notice, promptly confirmed in writing, to the Trustee, theCompany and the Remarketing Agent, specifying the principal amount of Bonds tenderedpursuant to the Indenture as described above under “THE BONDS—Demand Purchase.”

The Tender Agent will purchase, but only from the sources listed below, Bonds requiredto be purchased in accordance with the Indenture from the Bondholders thereof by 3:00 p.m.(New York City time) on the date such Bonds are required to be purchased at the Purchase Price.Funds for the payment of such Purchase Price are required to be derived from the followingsources in the order of priority indicated:

(i) the proceeds of the sale of Bonds (but only such remarketing proceeds asare received from purchasers of the Bonds pursuant to a remarketing of such Bonds inaccordance with the Indenture) furnished to the Tender Agent by the Trustee, which willhave received such funds from the Remarketing Agent; provided, however that while aLetter of Credit is then in effect, such proceeds cannot have been derived from the Issuer,the Company or the Guarantor unless subparagraph (iii) below applies;

(ii) moneys furnished to the Tender Agent representing the proceeds of a drawunder the Letter of Credit if a Letter of Credit is then in effect;

(iii) only if the Credit Provider has wrongfully failed to pay a properlysubmitted drawing on the Letter of Credit, or if the Letter of Credit has been repudiated,or if there is no Letter of Credit then in effect, and the sources described in subparagraphs(i) and (ii) above are insufficient, from payments furnished by the Guarantor to theTender Agent; and

(iv) only if the Guarantor has failed to make payments under the Guaranty,from Purchase Price Payments furnished by the Company to the Tender Agent.

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Remarketing of the Bonds. The Remarketing Agent is required, pursuant to theRemarketing Agreement and the Indenture, to use its best efforts to sell any Bonds tendered forpurchase to new purchasers, and will arrange for the Purchase Price of remarketed Bonds to bedeposited with the Trustee.

If any Bond is tendered after a notice of redemption is given for such Bond, theRemarketing Agent will give the redemption notice to any purchaser of such Bond or to DTC, ifa Book-Entry Bond, and the purchaser (including a Direct Participant) will acknowledge receiptof such redemption notice.

Delivery of Proceeds of Sale and Remarketed Bonds. Upon receipt, the proceeds ofthe remarketing by the Remarketing Agent of any Bonds will be immediately applied by theTrustee or the Tender Agent, as applicable, to the payment of the Purchase Price of Bonds to theBondholders or Beneficial Owners thereof pursuant to the Indenture. The Trustee or the TenderAgent, as applicable, will make the Bonds available for delivery to the Remarketing Agent whichare registered pursuant to the instructions of the Remarketing Agent or will direct the transfer onthe registration books of DTC pursuant to the instructions of the Remarketing Agent or, in thecase of remarketing of Bank Bonds, as provided in the Indenture.

Unclaimed Moneys. The Tender Agent is required, at the end of the fifth Business Dayafter a Purchase Date, to transfer to the Trustee all funds then held on hand by virtue of the factthat the Bonds deemed tendered on such date were not presented for purchase to the TenderAgent, such funds (together with all funds then held on hand by the Trustee by virtue of the factthat Bonds deemed tendered on such date were not transferred on the registration books of DTC)to be held by the Trustee in trust, in a segregated account for the Bonds, for the payment of thePurchase Price thereof to the former Bondholders of such Bonds. The Trustee will pay suchPurchase Price from such amounts by check or draft of the Trustee made payable to the partyentitled to such payment as soon as practicable after such party surrenders the Bond or Bonds sodeemed purchased to the Trustee. Any such moneys so held in trust by the Trustee will be helduninvested until paid to the person entitled thereto or disposed of as provided by law.

No Remarketing During Default. Notwithstanding any other provision of theIndenture, there will be no remarketing of Bonds during the continuation of an Event of Defaultunder the Indenture.

Book-Entry System

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or suchother name as may be requested by an authorized representative of DTC. One fully-registeredBond will be issued for the Bonds, in the aggregate principal amount of such issue, and will bedeposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized underthe New York Banking Law, a “banking organization” within the meaning of the New YorkBanking Law, a member of the Federal Reserve System, a “clearing corporation” within the

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meaning of the New York Uniform Commercial Code, and a “clearing agency” registeredpursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended(the “Exchange Act”). DTC holds and provides asset servicing for over 2 million issues of U.S.and non-U.S. equity issues, corporate and municipal debt issues, and money market instrumentsfrom over 85 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTCalso facilitates the post-trade settlement among Direct Participants of sales and other securitiestransactions in deposited securities, through electronic computerized book-entry transfers andpledges between Direct Participants’ accounts. This eliminates the need for physical movementof securities certificates. Direct Participants include both U.S. and non-U.S. securities brokersand dealers, banks, trust companies, clearing corporations, and certain other organizations. DTCis 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 theNational Securities Clearing Corporation, Government Securities Clearing Corporation, MBSClearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC,and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., theAmerican Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Accessto the DTC system is also available to others such as both U.S. and non-U.S. securities brokersand dealers, banks, trust companies, and clearing corporations that clear through or maintain acustodial relationship with a Direct Participant, either directly or indirectly (“IndirectParticipants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable toits Participants are on file with the Securities and Exchange Commission (“SEC”). Moreinformation about DTC can be found at www.dtcc.com.

Purchases of the Bonds under the DTC system must be made by or through DirectParticipants, which will receive a credit for the Bonds on DTC’s records. The ownership interestof each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on theDirect and Indirect Participants’ records. Beneficial Owners will not receive writtenconfirmation from DTC of their purchase. Beneficial Owners are, however, expected to receivewritten confirmations providing details of the transaction, as well as periodic statements of theirholdings, from the Direct or Indirect Participant through which the Beneficial Owner entered intothe transaction. Transfers of ownership interests in the Bonds are to be accomplished by entriesmade on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests in Bonds,except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTCare registered in the name of DTC’s partnership nominee, Cede & Co., or such other name asmay be requested by an authorized representative of DTC. The deposit of Bonds with DTC andtheir registration in the name of Cede & Co. or such other DTC nominee do not effect anychange in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of theBonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts suchBonds are credited, which may or may not be the Beneficial Owners. The Direct and IndirectParticipants will remain responsible for keeping account of their holdings on behalf of theircustomers.

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Conveyance of notices and other communications by DTC to Direct Participants, byDirect Participants to Indirect Participants, and by Direct Participants and Indirect Participants toBeneficial Owners will be governed by arrangements among them, subject to any statutory orregulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds maywish to take certain steps to augment transmission to them of notices of significant events withrespect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to theBond documents. For example, Beneficial Owners of Bonds may wish to ascertain that thenominee holding the Bonds for their benefit has agreed to obtain and transmit notices toBeneficial Owners. In the alternative, Beneficial Owners may wish to provide their names andaddresses to the Trustee and request that copies of notices be provided directly to them. THE

ISSUER, THE COMPANY, THE CREDIT PROVIDER, THE GUARANTOR AND THE TRUSTEE WILL NOT

HAVE ANY RESPONSIBILITY OR OBLIGATION TO SUCH DIRECT AND INDIRECT PARTICIPANTS OR THE

PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE BONDS.

Redemption notices will be sent to DTC. If less than all of the Bonds within an issue arebeing redeemed, DTC’s practice is to determine by lot the amount of the interest of each DirectParticipant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote withrespect to Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures.Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible afterthe record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to thoseDirect Participants to whose accounts the Bonds are credited on the record date (identified in alisting attached to the Omnibus Proxy).

Principal and interest payments on the Bonds will be made to Cede & Co., or such othernominee as may be requested by an authorized representative of DTC. DTC’s practice is tocredit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detailinformation from the Issuer or the Trustee, on payable dates in accordance with their respectiveholdings shown on DTC’s records. Payments by Participants to Beneficial Owners will begoverned by standing instructions and customary practices, as is the case with securities held forthe accounts of customers in bearer form or registered in “street name,” and will be theresponsibility of such Participant and not of DTC, the Trustee, or the Issuer, subject to anystatutory or regulatory requirements as may be in effect from time to time. Payment of principaland interest to Cede & Co. (or such other nominee as may be requested by an authorizedrepresentative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of suchpayments to Direct Participants will be the responsibility of DTC, and disbursement of suchpayments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A Beneficial Owner will give notice to elect to have its Bonds purchased or tendered,through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing theDirect Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to theTrustee. The requirement for physical delivery of Bonds in connection with an optional tenderor a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds aretransferred by Direct Participants on DTC’s records and followed by a book-entry credit oftendered Bonds to the Trustee’s DTC account.

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DTC may discontinue providing its services as securities depository with respect to theBonds at any time by giving reasonable notice to the Issuer or the Trustee. In addition, theIssuer, at the direction of the Company, shall terminate, upon provision of notice to the Trustee,the Remarketing Agent and the Tender Agent, the services of DTC with respect to the Bonds.Under such circumstances, in the event that a successor securities depository is not obtained,Bonds are required to be printed and delivered as described in the Indenture.

THE ISSUER, THE TRUSTEE, THE COMPANY, THE GUARANTOR, THE CREDIT PROVIDER AND

THE UNDERWRITER SHALL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT OR

INDIRECT PARTICIPANT, ANY BENEFICIAL OWNER OR ANY OTHER PERSON CLAIMING A BENEFICIAL

OWNERSHIP INTEREST IN THE BONDS UNDER OR THROUGH DTC OR ANY DTC PARTICIPANT, OR

ANY OTHER PERSON WHICH IS NOT SHOWN ON THE REGISTRATION BOOKS OF THE BOND REGISTRAR

AS BEING A HOLDER, WITH RESPECT TO THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR

ANY DIRECT OR INDIRECT PARTICIPANT; THE PAYMENT BY DTC OR ANY DIRECT OR INDIRECT

PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OF, PURCHASE PRICE, PREMIUM, IF

ANY, OR INTEREST ON THE BONDS; ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO

OWNERS UNDER THE INDENTURE; THE SELECTION BY DTC OR ANY DIRECT OR INDIRECT

PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF

THE BONDS; ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS AN OWNER; OR ANY

OTHER PROCEDURES OR OBLIGATIONS OF DTC UNDER THE BOOK-ENTRY SYSTEM.

SO LONG AS CEDE & CO. (OR SUCH OTHER NOMINEE AS MAY BE REQUESTED BY AN

AUTHORIZED REPRESENTATIVE OF DTC) IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE

OF DTC, REFERENCES HEREIN TO BONDHOLDERS OR TO THE HOLDERS OR OWNERS OR

REGISTERED HOLDERS OR REGISTERED OWNERS OF THE BONDS MEANS CEDE & CO., AS

AFORESAID, AND DOES NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.

The foregoing description of the procedures and record keeping with respect to beneficialownership interests in the Bonds, payment of principal, interest and other payments on the Bondsto Direct and Indirect Participants or Beneficial Owners, confirmation and transfer of beneficialownership interest in such Bonds and other related transactions by and between DTC, the Directand Indirect Participants and the Beneficial Owners is based solely on information provided byDTC. Accordingly, no representations can be made concerning these matters, and neither theDirect nor Indirect Participants nor the Beneficial Owners should rely on the foregoinginformation with respect to such matters, but should instead confirm the same with DTC.

THE ORIGINAL LETTER OF CREDIT

Original Letter of Credit

On the date of issuance of the Bonds, the Original Credit Provider will issue in favor ofthe Trustee the Original Letter of Credit in an original face amount (as from time to time reducedand reinstated as provided in the Original Letter of Credit) equal to the original principal amountof the Bonds plus 36 days’ interest thereon at 12% per annum, on the basis of a 365-day year.The Original Letter of Credit (subject to any reductions and reinstatements as provided therein)

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will permit the Trustee to draw up to an amount equal to the then outstanding principal amountof the Bonds to pay the unpaid principal thereof and accrued interest on the Bonds. All drawingsunder the Original Letter of Credit will be paid with the Original Credit Provider’s immediatelyavailable funds without any requirement that the Trustee, the holders of the Bonds or theOriginal Credit Provider make any prior claims against the Company or obtain any funds fromthe Company.

The Original Letter of Credit will automatically terminate on the earliest to occur of:(i) November 26, 2003 (such date, as it may be extended from time to time in accordance withthe Original Letter of Credit, being called the “Stated Expiration Date”); (ii) the date which isfive days following the adjustment of the interest rate on all of the Bonds to a Term Interest Rate;(iii) the date of receipt of the Original Credit Provider of a notice of termination of the OriginalLetter of Credit from the Trustee; and (iv) the date on which an acceleration drawing is honored.See “THE ORIGINAL LETTER OF CREDIT—Original Reimbursement Agreement” below.

The amount available to be drawn under the Original Letter of Credit (the “AvailableAmount”) will be reduced automatically by the amount of any drawing thereunder, provided,however, that the amount of any drawing thereunder to pay accrued interest on the Bonds asprovided for under the Indenture (an “Interest Drawing”) will be automatically reinstated as ofthe date of the Original Credit Provider’s honoring such demand for payment thereunder and notreduced by the amount of any drawing thereunder. After payment by the Original CreditProvider of a drawing under the Original Letter of Credit to allow the Trustee to pay thepurchase price of Bonds tendered for purchase as provided in the Indenture which have not beenremarketed or for which the purchase price has not been received by the Trustee (a “TenderDrawing”), the obligation of the Original Credit Provider to honor drawings under the OriginalLetter of Credit will be automatically reduced by an amount equal to the Original Purchase Price(as hereinafter defined) of any Bonds purchased pursuant to said drawing. In addition, in theevent of the remarketing of the Bonds previously purchased with the proceeds of a TenderDrawing, the amount available to be drawn under the Original Letter of Credit will beautomatically reinstated concurrently upon (i) receipt by the Original Credit Provider of anamount equal to the Original Purchase Price of such Bonds and (ii) the Original CreditProvider’s receipt from the Trustee of written notice requesting such reinstatement in the formattached to the Original Letter of Credit; the amount of such reinstatement being equal to theOriginal Purchase Price of such Bonds. “Original Purchase Price” means the principal amountof any Bond purchased with the proceeds of a Tender Drawing plus the amount of accruedinterest on such Bond paid with the proceeds of a Tender Drawing (and not pursuant to anInterest Drawing) upon such purchase. Upon receipt by the Original Credit Provider of areduction certificate of the Trustee in the form attached to the Original Letter of Credit, theOriginal Letter of Credit will automatically and permanently reduce the amount available to bedrawn thereunder by the amount specified in such certificate. Following such reduction,however, the Available Amount must be certified by the Trustee to be at least equal to theaggregate principal amount of the Bonds outstanding (other than Bank Bonds) plus 36 daysinterest thereon at a maximum interest rate of 12% per annum on the basis of a 365-day year.

Except as otherwise provided in the Original Letter of Credit or the OriginalReimbursement Agreement, the Original Letter of Credit is governed by and construed in

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accordance with the International Standby Practices, 1998, International Chamber of CommercePublication No. 590 (the “ISP98”). As to matters not governed by the ISP98, the Original Letterof Credit will be governed by and construed in accordance with the Uniform Commercial Codeas in effect in the State of New York.

Original Reimbursement Agreement

The following summarizes certain provisions of the Original Reimbursement Agreement.This summary does not purport to be comprehensive or definitive and is subject to all of theterms and provisions of the Original Reimbursement Agreement to which reference is herebymade.

The Original Reimbursement Agreement sets forth a number of events of default,including but not limited to the failure of the Guarantor to reimburse the Original Credit Providerfor any amount due in respect of a drawing under the Original Letter of Credit when due. If anevent of default under the Original Reimbursement Agreement occurs and is continuing, (i) theAdministrative Agent under the Original Reimbursement Agreement may, in accordance withthe provisions of the Original Reimbursement Agreement, declare all amounts due under theOriginal Reimbursement Agreement and all interest accrued thereon to be immediately due andpayable, and upon such declaration the same will become and be immediately due and payable,without presentment, demand, protest, notice of intent to accelerate, notice of acceleration to theextent permitted by law or other notice of any kind, all of which have been waived by theGuarantor in the Original Reimbursement Agreement; provided that in the event of any event ofdefault relating to the bankruptcy or inability of the Guarantor (or related companies thereto) topay its debts as they become due, all such amounts shall become immediately due and payableautomatically without any requirement of notice from the Administrative Agent, the OriginalCredit Provider or the other “Banks” thereunder, (ii) the Original Credit Provider may notify theTrustee in writing that an event of default under the Original Reimbursement Agreement hasoccurred and is continuing and request that (1) the Bonds be accelerated pursuant to theIndenture, or (2) that all of the Bonds be required to be tendered for purchase, and (iii) theAdministrative Agent and the Original Credit Provider may pursue all remedies available tothem at law, by contract (including, without limitation, under the Original Letter of Credit or theOriginal Reimbursement Agreement), at equity or otherwise.

CONTINUING DISCLOSURE

The Bonds are exempt from the continuing disclosure requirements of paragraph (b)(5) ofRule 15c2-12 (the “Rule”) adopted by the SEC under the Exchange Act so long as they are in aVariable Interest Rate Period. The Guarantor has covenanted and agreed, upon the adjustment toa Term Interest Rate Period, to provide continuing disclosure in accordance with therequirements of the Rule, which include, among other things, entering into an undertaking toprovide continuing disclosure information as required by the Rule.

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TAX MATTERS

The Code establishes certain requirements that must be met at and subsequent to theissuance and delivery of the Bonds in order that interest on the Bonds be and remain notincludable in gross income of the Bondholders for federal income tax purposes pursuant toSection 103 of the Code. These continuing requirements include certain restrictions andprohibitions on the use of the proceeds of the Bonds and the Project, restrictions on theinvestment of proceeds and other amounts and the rebate to the United States of certain earningsin respect of such investments. Failure to comply with such continuing requirements may causeinterest on the Bonds to be includable in gross income for federal income tax purposesretroactively to the date of issue of the Bonds irrespective of the date on which suchnoncompliance occurs. The Indenture, the Agreement and the Tax Certificate and Agreementcontain covenants, representations and procedures designed to satisfy the requirements of theCode. The opinion of Winston & Strawn, New York, New York, Bond Counsel, is made inreliance upon and assumes continuing compliance with such covenants and procedures and thecontinuing accuracy, in all material respects, of such representations. However, compliance withcertain requirements of the Code may necessitate that persons not within the control of the Issueror the Company refrain from taking certain actions. Also, Bond Counsel has not undertaken todetermine (or to inform any person) whether any actions taken (or not taken) or events occurring(or not occurring) after the date of issuance of the Bonds may adversely affect the value of, orthe tax status of interest on, the Bonds.

In the opinion of Bond Counsel, based on existing statutes, regulations, rulings and courtdecisions and assuming continuing compliance by the Issuer and the Company (and theirsuccessors) with covenants and procedures and the accuracy of the representations referencedabove, interest on the Bonds is not includable in gross income for federal income purposespursuant to Section 103 of the Code, except for any interest on any Bond for any period duringwhich such Bond is held by a person who is a “substantial user” of the facilities financed withthe proceeds of the Bonds or a “related person” as defined in Section 147(a) of the Code. Underthe Code, however, such interest constitutes an “item of tax preference” for purposes ofcomputing the alternative minimum tax imposed with respect to individuals and corporations. Acomplete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix Dhereto.

Certain requirements and procedures contained or referred to in the Indenture, theAgreement, the Tax Certificate and Agreement and other relevant documents and certificatesmay be changed and certain actions (including, without limitations, defeasance of the Bonds)may be taken subsequent to the date of issue, under the circumstances and subject to the termsand conditions set forth in such documents or certificates, upon the advice or with the approvingopinion of nationally recognized bond counsel. Winston & Strawn expresses no opinion as toany Bond or the interest thereon if such change occurs or action is taken or omitted upon theadvice or approval of bond counsel other than Winston & Strawn.

In the further opinion of Bond Counsel, interest on the Bonds is also exempt frompersonal income taxes imposed by the State of New York or any political subdivision thereof(including The City of New York).

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Prospective purchasers of the Bond should be aware that ownership of, accrual or receiptof interest on, or disposition of tax-exempt obligations, such as the Bonds, may have collateralfederal income tax consequences for certain taxpayers, including financial institutions, certainsubchapter S corporations, United States branches of foreign corporations, property and casualtyinsurance companies, individual recipients of Social Security or Railroad Retirement benefits,taxpayers eligible for the earned income credit and taxpayers who may be deemed to haveincurred or continued indebtedness to purchase or carry tax-exempt obligations. The foregoingis not intended as an exhaustive list of potential tax consequences. Prospective purchasersshould consult their tax advisors regarding any possible collateral consequences with respect tothe Bonds. Bond Counsel expresses no opinion regarding any such collateral consequences.

No assurance can be given that any future legislation, including amendments to the Codeor the State income tax laws, will not cause interest on the Bonds to be subject, directly orindirectly, to federal or State or local income taxation, or otherwise prevent Holders fromrealizing the full current benefit of the tax status of such interest. Prospective purchasers of theBonds should consult their own tax advisers regarding any pending or proposed federal or Statetax legislation. Further, no assurance can be given that the introduction or enactment of any suchfuture legislation, or any action of the Internal Revenue Service, including but not limited toregulation, ruling, or selection of the Bonds for audit examination, or the course or result of anyInternal Revenue Service examination of the Bonds, or obligations which present similar taxissues, will not affect the market price of the Bonds.

LITIGATION

There is no litigation of any nature now pending against the Issuer, or to the knowledgeof its officers, threatened, restraining or enjoining the issuance, sale, execution or delivery of theBonds, or in any way contesting or affecting the validity of the Bonds or any of the financingdocuments executed in connection therewith.

Except as described in the documents filed by the Guarantor under the Exchange Act thatare incorporated by reference in Appendix A hereto under the caption “DOCUMENTS

INCORPORATED BY REFERENCE,” there is no controversy of any nature now pending against theGuarantor or the Company, or to the knowledge of their respective officers threatened, which, ifsuccessful, would in the view of the Guarantor or the Company or materially adversely affect theoperation or financial condition of the Guarantor or the Company or materially adversely affectthe operation of the Project.

BOND PURCHASE AGREEMENT

Under the terms of a Bond Purchase Agreement with the Issuer, the Company and theGuarantor, the Underwriter has agreed, subject to the approval of certain legal matters by counseland to certain other conditions, to purchase the Bonds at the offering price set forth on the coverpage of this Official Statement. As compensation for such agreement to purchase the Bonds, theGuarantor has agreed to pay to the Underwriter a fee of $125,000, exclusive of out of pocketexpenses. The Underwriter has agreed to purchase all of the Bonds if any of the Bonds are

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purchased. The Guarantor has agreed to indemnify the Issuer and the Underwriter againstcertain liabilities or to contribute to any payments required to be made by the Underwriterrelating to such liabilities, including certain liabilities under federal securities laws relating to theBonds.

In the ordinary course of their respective businesses, the Underwriter and certain of itsaffiliates have engaged, and may in the future engage, in investment and/or commercial bankingtransactions with the Guarantor and its affiliates.

RATING

The Bonds have received the rating of “AA+/A-1+” by Standard & Poor’s RatingsServices, a division of The McGraw-Hill Companies, Inc., based upon its review of the OriginalLetter of Credit and the Original Credit Provider. An explanation of the significance and statusof such credit rating may be obtained from the rating agency furnishing the same. There is noassurance that such rating will continue for any given period of time or that it will not be revisedor withdrawn entirely by such rating agency, if in its judgment circumstances so warrant. Arevision or withdrawal of any such credit rating could have an effect on the price of the Bonds inany market where they may be traded.

LEGAL MATTERS

Certain legal matters incident to the authorization, issuance and sale of the Bonds aresubject to the approving opinion of Winston & Strawn, New York, New York, Bond Counsel. Acomplete copy of the proposed form of the opinion of Bond Counsel is set forth as APPENDIX Dhereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness ofthis Official Statement, except that in its capacity as Bond Counsel, Winston & Strawn has, atthe request of the Underwriter reviewed the information herein under “INTRODUCTION,”“SECURITY FOR THE BONDS” and “THE BONDS” and in APPENDIX B hereto (other than under“THE BONDS—Book-Entry System” and with respect to DTC and its procedures and its book-entry system), solely to determine whether such information which purports to summarizecertain provisions of the Bonds, the Agreement, the Indenture and the Guaranty is accurate in allmaterial respects, and under “TAX MATTERS” solely to determine whether such informationfairly summarizes the opinion of Bond counsel referred to above. This review was undertakensolely at the request and for the benefit of the Underwriter.

Certain legal matters will be passed upon for the Issuer by Robert J. McLaughlin, SeniorVice President & General Counsel, Albany, New York; for the Company and Guarantor bySchnader Harrison Segal & Lewis LLP, Pittsburgh, Pennsylvania, and by in-house counsel to theCompany and the Guarantor; for the Original Credit Provider by Locke Liddell & Sapp LLP,Houston, Texas; and for the Underwriter by Chapman and Cutler, Chicago, Illinois.

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The execution and delivery of this Official Statement has been duly authorized by theIssuer and approved by the Guarantor.

NEW YORK STATE ENVIRONMENTAL FACILITIES

CORPORATION

By: /s/ Thomas J. Kelly ____________President

APPROVED:

WASTE MANAGEMENT, INC.

By: /s/ Lee A. McCormick Assistant Treasurer

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APPENDIX A

WASTE MANAGEMENT, INC.

The information contained herein as Appendix A to this Official Statement has beenobtained from Waste Management, Inc. The Issuer and the Underwriter make no representationas to the accuracy or completeness of such information.

Waste Management, Inc., a Delaware corporation (the “Guarantor”), is its industry’sleading provider of integrated waste services in North America. Based in Houston, theGuarantor, through its subsidiaries, provides collection, transfer, recycling and resourcerecovery, and disposal services. The Guarantor is also a leading developer, operator and ownerof waste-to-energy facilities in the United States. Its customers include commercial, industrial,municipal and residential customers, other waste management companies, governmental entitiesand independent power market participants.

AVAILABLE INFORMATION

The Guarantor is subject to the informational requirements of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”), and in accordance therewith files reports, proxystatements and other information with the Securities and Exchange Commission (the“Commission”). These filings are available to the public over the Internet at the Commission’sweb site at http://www.sec.gov. Reports, proxy statements and other information filed by theGuarantor can be inspected and copied at the public reference facilities maintained by theCommission at its principal office at Room 1024, 450 Fifth Street, N.W., Washington, D.C.Copies of such material can be obtained by mail from the Public Reference Section of theCommission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Aprospective purchaser can call the Commission at 1-800-SEC-0330 for further information onadditional public reference rooms and copy charges. In addition, copies of such material andother information about the Guarantor are available for inspection at the New York StockExchange, 20 Broad Street, New York, New York.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Guarantor under the Exchange Act areincorporated by reference herein:

1. Annual Report on Form 10-K for the fiscal year ended December 31,2001.

2. Current Report on Form 8-K dated March 27, 2002.

3. Definitive Proxy Statement dated March 27, 2002.

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4. Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002,June 30, 2002 and September 30, 2002.

All documents filed by the Guarantor pursuant to Section 13, 14 or 15(d) of the ExchangeAct subsequent to the date of this Official Statement and prior to the termination of the offeringof the Bonds will be deemed to be incorporated by reference herein and to be part hereof fromthe date of filing of such documents (other than current reports furnished under Item 9 of Form8-K). Any statement contained herein or in a document incorporated or deemed to beincorporated by reference herein will be deemed to be modified or superseded for purposes ofthis Official Statement to the extent that a statement contained herein or in any othersubsequently filed document which also is or is deemed to be incorporated by reference hereinmodifies or supersedes such statement. Any such statement as modified or superseded will notbe deemed, except as so modified or superseded, to constitute a part of this Official Statement.

The Guarantor hereby undertakes to provide without charge to each person to whom thisOfficial Statement is delivered, upon written request of such person, a copy (which may be bye–mail delivery) of any and all of the documents referred to above which have been or may beincorporated by reference herein, other than exhibits thereto (unless such exhibits are specificallyincorporated by reference in such documents). Requests for such copies should be directed toLee McCormick, Assistant Treasurer (713) 512-6208.

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APPENDIX B

SELECTED DEFINITIONS AND SUMMARY OF LEGAL DOCUMENTS

The following are brief summaries of certain provisions of the Indenture, the Agreementand the Guaranty, each dated as of November 1, 2002, pertaining to the issuance of the Bonds.These summaries do not purport to be comprehensive or definitive and are qualified in theirentirety by reference to the full terms of the respective documents listed below. Capitalizedterms not otherwise defined in this Official Statement or below have the meanings specified inthe Indenture or the respective document.

DEFINITIONS

“Accountant” means any firm of independent certified public accountants selected by theCompany and reasonably acceptable to the Trustee.

“Act” means the New York State Environmental Facilities Corporation Act, Title 12 ofArticle 5 of the Public Authorities Law of the State of New York, as from time to time amendedand supplemented.

“Additional Payments” means the payments required to be made by the Companypursuant to the Agreement, except for Loan Payments and Purchase Price Payments.

“Administrative Fees and Expenses” means the reasonable and necessary expensesincurred by the Issuer pursuant to the Agreement or the Indenture and the compensation andexpenses paid to or incurred by the Trustee, the Tender Agent, the Bond Registrar, theRemarketing Agent and/or any Paying Agent under the Agreement or the Indenture, whichinclude but are not limited to printing of Bonds, accomplishing transfers or new registration ofBonds, or other charges and other disbursements including those of their respective officers,directors, members, attorneys, agents and employees incurred in and about the administrationand execution of the Agreement and the Indenture.

“Agreement” or “Loan Agreement” means that certain Loan Agreement by and betweenthe Issuer and the Company, dated as of November 1, 2002, as originally executed and as it mayfrom time to time be supplemented, modified or amended in accordance with the terms thereofand of the Indenture.

“Alternate Letter of Credit” means an alternate irrevocable letter of credit, including, ifapplicable, a confirming letter of credit, or similar credit facility issued by a commercial bank,savings association or other financial institution, the terms of which will in all material respectsbe the same as those of the Letter of Credit then in effect, delivered to the Trustee pursuant to theAgreement.

“Approving Opinion” means an opinion of Bond Counsel that an action being taken (i) isauthorized by applicable law and the Indenture, and (ii) will not adversely affect the Tax-exemptstatus of the Bonds.

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“Authorized Denomination” means (i) during any Daily Interest Rate Period or WeeklyInterest Rate Period, $100,000 or any integral multiple thereof, and (ii) during a Term InterestRate Period, $100,000 or any integral multiple of $5,000 above that amount, except that if at anytime during a Term Interest Rate Period the Bonds are rated “A” or higher by all RatingAgencies then rating the Bonds, the Authorized Denomination shall be $5,000 or any integralmultiple thereof.

“Authorized Representative” means with respect to the Company, the person or personsat the time designated to act on behalf of the Company by a written certificate signed by theCompany, furnished to the Trustee, the Credit Provider, if any, and the Issuer, containing thespecimen signature of each such person and with respect to the Credit Provider, if any, theperson or persons at the time designated to act on behalf of the Credit Provider by a writtencertificate signed by the Credit Provider, furnished to the Trustee, the Company and the Issuer,containing the specimen signature of each such person.

“Available Moneys” means (i) Bond proceeds deposited with the Trusteecontemporaneously with the issuance and sale of the Bonds and which were continuouslythereafter held subject to the lien of the Indenture in a separate and segregated fund, account orsubaccount established under the Indenture (except the Rebate Fund) in which no moneys whichwere not Available Moneys were at any time held, together with investment earnings on suchBond proceeds; (ii) moneys (A) paid by the Issuer, the Company or the Guarantor to the Trustee,(B) held in any fund, account or subaccount established under the Indenture (except the RebateFund) in which no other moneys which are not Available Moneys are held, and (C) which haveso been on deposit with the Trustee for at least 124 consecutive days from their receipt by theTrustee during and prior to which period no petition by or against the Issuer or the Company (orany other Person, including the Guarantor, obligated, as guarantor or otherwise, to makepayments on the Bonds or under the Agreement or the Reimbursement Agreement or an“affiliate” of the Company as defined in Bankruptcy Code § 101(2)) under any bankruptcy orsimilar law now or hereafter enacted has been filed (unless such petition has been dismissed andsuch dismissal is final and not subject to appeal), together with investment earnings on suchmoneys; (iii) moneys received by the Trustee from any draw on a direct pay Letter of Credit,together with investment earnings on such moneys, (iv) proceeds from the remarketing of anyBonds pursuant to the Indenture to any person other than the Company (or any other Person,including the Guarantor, obligated, as guarantor or otherwise, to make payments on the Bonds orunder the Agreement or the Reimbursement Agreement or an “affiliate” of the Company asdefined in Bankruptcy Code §101(2)) or the Issuer; and (v) any other moneys or securitiesdelivered to the Trustee, including without limitation the proceeds from the issuance and sale ofrefunding bonds, if there is delivered to the Trustee at the time such moneys or securities aredelivered to the Trustee an opinion (which may assume that no Owner of Bonds is an “insider”within the meaning of the Bankruptcy Code) of nationally recognized bankruptcy counsel to theeffect that the use of such proceeds to pay the principal of, premium, if any, or interest on theBonds would not be avoidable as preferential payments under Section 547 of the BankruptcyCode should the Issuer or the Company (or any other Person, including the Guarantor, obligated,as guarantor or otherwise, to make payments on the Bonds or under the Agreement or theReimbursement Agreement or an “affiliate” of the Company as defined in Bankruptcy Code§101(2)) become a debtor in a proceeding commenced thereunder.

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“Bank Bonds” means Bonds purchased with a drawing on the Letter of Credit.

“Bankruptcy Code” means Title 11 of the United States Code, as amended, and anysuccessor statute or statutes having substantively the same function.

“Beneficial Owners” means those individuals, partnerships, corporations or other entitiesfor whom the Direct Participants have caused DTC to hold Book-Entry Bonds.

“BMA Index Rate” means the current Bond Market Association “swap index” interestrate published in The Bond Buyer as determined by the Remarketing Agent or if The BondBuyer or such index is no longer published, any other successor or similar published index asdetermined by the Remarketing Agent.

“Bond Counsel” means any attorney at law or firm of attorneys of nationally recognizedstanding in matters pertaining to the federal tax exemption of interest on bonds issued by statesand political subdivisions, and duly admitted to practice law before the highest court of any stateof the United States of America, but shall not include counsel for the Company.

“Bond Fund” means the fund by that name established pursuant to the Indenture.

“Bond Payment Date” has the meaning set forth above in this Official Statement under“SECURITY FOR THE BONDS—The Agreement.”

“Bond Registrar” or “Registrar” means the entity or entities performing the duties of thebond registrar pursuant to the Indenture. The Trustee is designated under the Indenture as theinitial Bond Registrar.

“Bondholder.” See “Holder.”

“Bonds” means the Bonds designated as provided on the cover hereof, authorized andissued under the Indenture in an aggregate principal amount not to exceed $25,000,000.

“Book-Entry Bonds” means the Bonds registered in the name of the nominee of DTC, orany successor securities depository for such Bonds, as the registered owner thereof pursuant tothe terms and provisions of the Indenture.

“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on whichcommercial banks in New York, New York, or the city or cities in which the Corporate TrustOffice of the Trustee or the Tender Agent or, if applicable, the office of the Credit Provider atwhich demands for payment under the Letter of Credit are to be presented are authorized orrequired by law to close, (iii) a day on which the New York Stock Exchange is closed, or (iv) if aLetter of Credit is in effect, any day not a Business Day as defined in the Letter of Credit or theReimbursement Agreement.

“Certificate,” “Statement,” “Request,” “Requisition” or “Order” of the Issuer or theCompany means, respectively, a written certificate, statement, request, requisition or order

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signed in the name of the Issuer by the President or Executive Vice President, or such otherperson as may be designated and authorized to sign for the Issuer, or in the name of theCompany by an Authorized Representative of the Company. Any such instrument andsupporting opinions or representations, if any, may, but need not, be combined in a singleinstrument with any other instrument, opinion or representation, and the two or more socombined will be read and construed as a single instrument. If and to the extent required by theapplicable section of the Indenture, each such instrument will include the statements provided fortherein.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” means Waste Management of New York L.L.C., a limited liability companylegally existing under the laws of the State of Delaware, and USA Waste Services of NYC, Inc.,a corporation duly incorporated, organized and existing under the laws of the State of Delaware,jointly or each individually as the context may indicate, or any entity which is a surviving,resulting or transferee entity in any merger, consolidation or transfer of assets permitted underthe Agreement and also means, unless the context otherwise requires, an assignee of theAgreement as permitted by the Agreement, but does not mean any affiliate of the Company.

“Continuing Disclosure Agreement” means any Continuing Disclosure Agreement by theCompany or the Guarantor relating to the Bonds, as originally executed and as it may beamended from time to time in accordance with the terms thereof.

“Corporate Trust Office” means, (i) with respect to the Trustee, the principal corporatetrust office of the Trustee at 101 Barclay Street, Floor 21 West, New York, New York 10286, orsuch other office designated by the Trustee from time to time, and (ii) with respect to the TenderAgent if other than the Trustee, such office designated by the Tender Agent to the Company, theGuarantor, the Remarketing Agent and the Credit Provider, if any, as its Corporate Trust Office.

“Costs of Issuance” means all items of expense directly or indirectly payable by orreimbursable to the Issuer or the Company and related to the authorization, issuance, sale anddelivery of the Bonds, including but not limited to costs of preparation and reproduction ofdocuments, printing expenses, filing and recording fees, the issuance fee of the Issuer, initial feesand charges of the Trustee, legal fees and charges, fees and disbursements of consultants andprofessionals, rating agency fees, fees and charges for preparation, execution and safekeeping ofthe Bonds and any other cost, charge or fee in connection with the original issuance of the Bondswhich constitutes a “cost of issuance” within the meaning of Section 147(g) of the Code.

“Costs of Issuance Fund” means the fund by that name established pursuant to theIndenture.

“Costs of the Project” means the sum of the items, or any such item, authorized to be paidfrom the Project Fund pursuant to the provisions of the Agreement, but does not include anyCosts of Issuance.

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“Credit Provider” means, initially, JPMorgan Chase Bank and thereafter, means anycommercial bank, savings association or other financial institution issuing a Letter of Creditcomplying with the Agreement and party to a Reimbursement Agreement.

“Daily Interest Rate” means a variable interest rate on the Bonds established daily inaccordance with the Indenture as described above in this Official Statement under “THE BONDS –Determination of Daily Interest Rate and Weekly Interest Rate.”

“Daily Interest Rate Period” means each period during which Daily Interest Rates are ineffect.

“Dated Date” means November 26, 2002.

“Determination of Taxability” means a determination that, due to the untruth orinaccuracy of any representation or warranty made by the Company in the Agreement or thebreach of any covenant or warranty of the Company contained in the Agreement, interest on theBonds, or any of them, is determined not to be Tax-exempt by a final administrativedetermination of the Internal Revenue Service or a final judicial decision of a court of competentjurisdiction in a proceeding of which the Company received notice and in which the Companywas afforded an opportunity to participate to the full extent permitted by law. A determinationor decision will not be considered final for purposes of the preceding sentence unless (A) theIssuer or the holder or holders of the Bonds involved in the proceeding in which the issue israised (i) have given the Company and the Trustee prompt written notice of the commencementthereof, and (ii) have offered the Company the opportunity to control the proceeding; providedthe Company agrees to pay all expenses in connection therewith and to indemnify such holder orholders against all liability for such expenses (except that any such holder may engage separatecounsel, and the Company will not be liable for the fees or expenses of such counsel); and(B) such proceeding is not subject to a further right of appeal or has not been timely appealed.

“Direct Participants” means those broker-dealers, banks and other financial institutionsfrom time to time for which DTC holds the Bonds as securities depository.

“DTC” means The Depository Trust Company, New York, New York, a limited purposetrust company organized under the New York Banking Law, or any successor securitiesdepository for the Bonds.

“Government Obligations” means the following:

(A) bonds, notes, certificates of indebtedness, treasury bills or other securitiesconstituting direct obligations of, or obligations on which the full and timely payment ofprincipal and interest is fully and unconditionally guaranteed by, the United States ofAmerica; and

(B) evidences of direct ownership of a proportionate or individual interest infuture interest or principal payments on specified direct obligations of, or obligations forwhich the full and timely payment of the principal of and interest is unconditionally

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guaranteed by, the United States of America, which obligations are held by a bank ortrust company organized and existing under the laws of the United States of America orany state thereof in the capacity of custodian in form and substance satisfactory to theTrustee.

“Guarantor” means Waste Management, Inc., a Delaware corporation, and its successorsand assigns.

“Guaranty” or “Guaranty Agreement” means that certain Guaranty Agreement dated asof November 1, 2002 executed by the Guarantor in favor of the Trustee relating to the Bonds.

“Holder” or “Bondholder” or “Owner,” whenever used herein with respect to a Bond,means the person in whose name such Bond is registered on the books of the Bond Registrar inaccordance with the Indenture.

“Indenture” means the Indenture, as originally executed or as it may from time to time besupplemented, modified or amended by any Supplemental Indenture.

“Interest Account” means the account by that name in the Bond Fund establishedpursuant to the Indenture.

“Interest Payment Date” means (i) the first Business Day of each month with respect to aDaily Interest Rate Period or Weekly Interest Rate Period, (ii) each May 1 and November 1 withrespect to a Term Interest Rate Period, (iii) the effective date of each Interest Rate Period, or(iv) the maturity date of the Bonds.

“Interest Period” means the period from and including any Interest Payment Date to andincluding the day immediately preceding the next following Interest Payment Date, except thatthe first Interest Period will be the period from and including the Issuance Date to and includingthe day immediately preceding the first Interest Payment Date relating to the Bonds.

“Interest Rate Period” means either a Daily Interest Rate Period, a Weekly Interest RatePeriod or a Term Interest Rate Period.

“Investment Securities” means any of the following securities (other than those issued bythe Issuer or the Company):

(A) Government Obligations;

(B) bonds, notes or other obligations of any state of the United States or anypolitical subdivision of any state, which at the time of their purchase are rated in either ofthe two highest rating categories by a nationally recognized rating service;

(C) certificates of deposit or time or demand deposits constituting directobligations of any bank, bank holding company, savings and loan association or trustcompany organized under the laws of the United States or any state thereof (including the

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Trustee or any of its affiliates), except that investments may be made only in certificatesof deposit or time or demand deposits which are:

(1) insured by the Bank Insurance Fund or the Savings AssociationInsurance Fund of the Federal Deposit Insurance Corporation, or any other similarUnited States Government deposit insurance program then in existence; or

(2) continuously and fully secured by Government Obligations, whichhave a market value, exclusive of accrued interest, at all times at least equal to theprincipal amount of such certificates of deposit or time or demand deposits; or

(3) issued by a bank, bank holding company, savings and loanassociation or trust company under the laws of the United States or any statethereof (including the Trustee or any of its affiliates) whose outstandingunsecured long-term debt is rated at the time of issuance in either of the twohighest rating categories by a Rating Agency;

(D) repurchase agreements with any bank, bank holding company, savings andloan association, trust company or other financial institution organized under the laws ofthe United States of America or any state thereof (including the Trustee or any of itsaffiliates), that are continuously and fully secured by Government Obligations and whichhave a market value, exclusive of accrued interest, at all times at least equal to theprincipal amount of such repurchase agreements, provided that each such repurchaseagreement conforms to current industry standards as to form and time, is in commerciallyreasonable form, is for a commercially reasonable period, results in transfer of legal titleto identified Government Obligations which are segregated in a custodial or trust accountfor the benefit of the Trustee, and further provided that Government Obligations acquiredpursuant to such repurchase agreements shall be valued at the lower of the then currentmarket value thereof or the repurchase price thereof set forth in the applicable repurchaseagreement;

(E) investment agreements constituting an obligation of a bank, bank holdingcompany, savings and loan association, trust company, insurance company or otherfinancial institution whose outstanding unsecured short-term debt is rated at the time ofsuch agreement in the highest rating category by a Rating Agency or whose outstandingunsecured long-term debt is rated at the time of such agreement in either of the twohighest rating categories by a Rating Agency;

(F) short term discount obligations of the Federal National MortgageAssociation and the Government National Mortgage Association;

(G) money market mutual funds (1) that invest in Government Obligations orthat are registered with the Securities and Exchange Commission, meeting therequirements of Rule 2a-7 under the Investment Company Act of 1940, as amended, and(2) that are rated in either of the two highest categories by a Rating Agency; and

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(H) such other investments permitted by law and approved in writing by theCredit Provider, if any.

“Issuance Date” means November 26, 2002.

“Issuer” means the New York State Environmental Facilities Corporation.

“Letter of Credit” means (i) the Original Letter of Credit issued by JPMorgan ChaseBank, as the Original Credit Provider; (ii) any other Letter of Credit issued by a Credit Providerpursuant to a Reimbursement Agreement, naming the Trustee as beneficiary and delivered oneither (a) the effective date of any Interest Rate Period for the Bonds or (b) any Business Dayduring a Variable Interest Rate Period; and (iii) in the event of delivery of an Alternate Letter ofCredit, such Alternate Letter of Credit.

“Letter of Credit Account” means the account by that name in the Bond Fund establishedpursuant to the Indenture.

“Loan Default Event” means any one or more of the events specified as such in theAgreement.

“Loan Payments” means the loan repayments required to be made by the Companypursuant to the Agreement.

“Moody’s” means Moody’s Investors Service, a corporation organized and existing underthe laws of the State of Delaware, its successors and their assigns, or, if such corporation shall bedissolved or liquidated or shall no longer perform the functions of a securities rating agency, anyother nationally recognized securities rating agency designated by the Company, with theapproval of the Remarketing Agent.

“Net Proceeds” means the proceeds from insurance with respect to the Project, less anycosts reasonably expended by the Company to receive such proceeds.

“Note” means the Note dated the Issuance Date from the Company to the Issuer pursuantto the Agreement.

“Opinion of Counsel” means a written opinion of counsel (who may be counsel for theCompany) selected by the Company and acceptable to the Trustee and the Guarantor. If and tothe extent required by the provisions of the applicable section of the Indenture, each Opinion ofCounsel will include the statements provided for therein.

“Outstanding,” when used as of any particular time with reference to Bonds, means(subject to the provisions of the Indenture) all Bonds theretofore, or thereupon being,authenticated and delivered by the Trustee under the Indenture except (1) Bonds theretoforecanceled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds with respect towhich liability of the Issuer has been discharged in accordance with the Indenture, includingBonds (or portions of Bonds) referred to in the Indenture; and (3) Bonds for the transfer or

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exchange of or in lieu of or in substitution for which other Bonds have been authenticated anddelivered by the Trustee pursuant to the Indenture.

“Paying Agent” means the Paying Agent described in the Indenture.

“Person” means an individual, corporation, firm, association, limited liability company,partnership, trust, or other legal entity or group of entities, including a governmental entity orany agency or political subdivision thereof.

“Principal Account” means the account by that name in the Bond Fund establishedpursuant to the Indenture.

“Project” means the buildings, structures, fixtures and improvements financed in wholeor in part from the proceeds of the sale of the Bonds as more fully described in Exhibit A to theAgreement.

“Project Fund” means the fund by that name established pursuant to the Indenture.

“Purchase Date” means the date on which any Bond is required to be purchased pursuantto the Indenture and as described above in this Official Statement under “THE BONDS—DemandPurchase” and “—Mandatory Tender for Purchase.”

“Purchase Price” means that amount equal to 100% of the principal amount of any Bondpurchased pursuant to the Indenture, plus accrued and unpaid interest thereon to but notincluding the Purchase Date.

“Purchase Price Payments” means the purchase price payments required to be made bythe Company pursuant to the Agreement.

“Qualified Newspaper” means The Wall Street Journal or The Bond Buyer or any othernewspaper or journal containing financial news, printed in the English language and customarilypublished on each Business Day, of general circulation in New York, New York, and selected bythe Trustee, whose decision will be final and conclusive.

“Rating Agency” means Moody’s, if Moody’s is then rating the Bonds, and S&P, if S&Pis then rating the Bonds, or any other nationally recognized securities rating agency selected bythe Company, with the approval of the Remarketing Agent.

“Rebate Fund” means the fund by that name created pursuant to the Tax Agreement.

“Record Date” means (i) the Business Day immediately preceding the applicable InterestPayment Date with respect to a Daily Interest Rate Period or a Weekly Interest Rate Period and(ii) the day, whether or not a Business Day, which is the fifteenth day of the month prior to anInterest Payment Date with respect to any Term Interest Rate Period.

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“Redemption Account” means the account by that name established in the Bond Fundpursuant to the Indenture.

“Reimbursement Agreement” means the Revolving Credit Agreement dated as ofJune 29, 2001, among the Bank, the Guarantor and other parties, together with any otherdocuments executed pursuant thereto or in connection therewith or with the Letter of Credit, asany of the same may be amended, supplemented, restated or replaced from time to time, or anyother similar agreements entered into in connection with the Letter of Credit or the issuance ofany Alternate Letter of Credit.

“Remarketing Agent” means with respect to the Bonds, Merrill Lynch, Pierce, Fenner &Smith Incorporated, and its respective successors in such office under the Indenture.

“Remarketing Agreement” means the Remarketing Agreement, dated the Issuance Date,between the Guarantor and the Remarketing Agent or the agreement or instrument pursuant towhich a successor to the Remarketing Agent performs its services.

“Revenues” means all amounts received by the Issuer or the Trustee for the account ofthe Issuer pursuant or with respect to the Agreement, the Note, the Guaranty or, if applicable, theLetter of Credit, including, without limiting the generality of the foregoing, Loan Payments(including both timely and delinquent payments and any late charges paid from whateversource), prepayments, insurance proceeds, condemnation proceeds, and all interest, profits orother income derived from the investment of amounts in any fund or account establishedpursuant to the Indenture, but not including certain excluded payments to the Issuer, the Trusteeor other parties pursuant to the Agreement, including without limitation any Administrative Feesand Expenses, or any moneys paid for deposit into the Rebate Fund pursuant to the Agreement,and not including Purchase Price Payments pursuant to the Agreement.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-HillCompanies, Inc., its successors and their assigns, or, if such entity is dissolved or liquidated orno longer performs the functions of a securities rating agency, any other nationally recognizedsecurities rating agency designated by the Company, with the approval of the RemarketingAgent.

“State” means the State of New York.

“Supplemental Indenture” means any indenture duly authorized and entered into betweenthe Issuer and the Trustee, supplementing, modifying or amending the Indenture; but only if andto the extent that such Supplemental Indenture is specifically authorized under the Indenture.

“Surplus Account” means the account established within the Bond Fund pursuant to theIndenture.

“Tax Agreement” means the Tax Certificate and Agreement among the Company, theIssuer and the Trustee dated the Issuance Date.

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“Tax-exempt” means, with respect to interest on any obligations of a state or localgovernment, including the Bonds, that such interest is excluded from gross income of theHolders or Beneficial Owners thereof for federal income tax purposes (other than in the case of aHolder or Beneficial Owner of any Bonds who is a substantial user of the Project or a relatedperson within the meaning of Section 147(a) of the Code) whether or not such interest isincludable as an item of tax preference or otherwise includable directly or indirectly for purposesof calculating tax liabilities, including any alternative minimum tax or environmental tax, underthe Code.

“Tender Agent” means initially the Trustee and any successor tender agent appointedpursuant to the Indenture.

“Tender Notice” has the meaning set forth above in this Official Statement under “THE

BONDS—Demand Purchase.”

“Term Interest Rate” means a non-variable interest rate on the Bonds established inaccordance with the Indenture as described above in this Official Statement under “THE BONDS –Determination of Term Interest Rate.”

“Term Interest Rate Period” means each fixed period of time during which a TermInterest Rate is in effect.

“Trustee” means The Bank of New York, a state banking corporation organized andexisting under and by virtue of the laws of the State of New York having a Corporate TrustOffice in New York, New York or its successor as Trustee under the Indenture.

“Unassigned Issuer Rights” means all of the rights of the Issuer under the Agreement to(i) receive Additional Payments in accordance with the Agreement; (ii) to be held harmless andindemnified in accordance with the Agreement; (iii) to be reimbursed for fees and expenses uponenforcement of the Agreement in accordance with the Agreement; (iv) to receive notices inaccordance with the Agreement; and (v) to give and withhold consent to amendments, changes,modifications and alterations of the Agreement under the Agreement and its right to enforce suchrights.

“Undelivered Bonds” means Bonds required to be but not presented to the Tender Agentas described above in this Official Statement under “THE BONDS – Demand Purchase” or “THE

BONDS – Mandatory Tender for Purchase.”

“Variable Interest Rate” means the Daily Interest Rate and the Weekly Interest Rate.

“Variable Interest Rate Period” means each period during which a Variable Interest Rateis in effect.

“Weekly Interest Rate” means a variable interest rate on the Bonds established weekly inaccordance with the Indenture as described above in this Official Statement under “THE BONDS –Determination of Daily Interest Rate and Weekly Interest Rate.”

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“Weekly Interest Rate Period” means each period during which Weekly Interest Rates arein effect.

THE INDENTURE

The following is a brief summary of certain provisions of the Indenture. THIS SUMMARY

DOES NOT PURPORT TO BE COMPLETE OR DEFINITIVE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE

TO THE INDENTURE, COPIES OF WHICH ARE ON FILE WITH THE TRUSTEE.

Project Fund

Under the Indenture, the Trustee will establish the Project Fund. The moneys in theProject Fund will be held by the Trustee in trust and applied to the payment and/orreimbursement of the Costs of the Project.

Before each payment is made from the Project Fund by the Trustee, there must be filedwith the Trustee a requisition conforming with the requirements of the Indenture and theAgreement.

Each such requisition will be sufficient evidence to the Trustee of the facts stated thereinand the Trustee will have no duty to confirm the accuracy of such facts. Upon receipt of eachsuch requisition, signed by an Authorized Representative of the Company, the Trustee will paythe amount set forth therein as directed by the terms thereof.

Upon the receipt by the Trustee of a certificate conforming with the requirements of theAgreement, and after payment of costs payable from the Project Fund or provision having beenmade for payment of such costs not yet due by retaining such costs in the Project Fund orotherwise as directed in such certificate, the Trustee is required to transfer any remaining balancein the Project Fund into a separate account within the Bond Fund, which the Trustee willestablish and hold in trust, and which is to be entitled the “Surplus Account.” The moneys in theSurplus Account will be used and applied to redeem Bonds in Authorized Denominations at theearliest possible date on which Bonds can be redeemed under the Indenture as described above inthis Official Statement under “THE BONDS—Redemption—Mandatory Redemption from ExcessBond Proceeds.” Notwithstanding certain provisions of the Indenture, the moneys in the SurplusAccount will be invested at the written instruction of an Authorized Representative of theCompany at a yield no higher than the yield on the Outstanding Bonds (unless in the opinion ofBond Counsel investment at a higher yield would not cause interest on the Bonds to become nolonger Tax-exempt), and all such investment income is to be deposited in the Surplus Accountand expended or reinvested as described above.

In the event of redemption of all the Bonds pursuant to the provisions of the Indenture oran Event of Default which causes acceleration of the Bonds, any moneys then remaining in theProject Fund are to be transferred to the Bond Fund and all moneys in the Bond Fund will beused to reimburse the Credit Provider for draws on the Letter of Credit so used to redeem Bondsor to redeem Bonds if there is no Letter of Credit.

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Costs of Issuance Fund

The Trustee will establish under the Indenture the Costs of Issuance Fund. The moneysin the Costs of Issuance Fund shall be held by the Trustee in trust and applied to the payment ofCosts of Issuance of the Bonds, upon a requisition filed with the Trustee, signed by anAuthorized Representative of the Company. Any money remaining in the Costs of IssuanceFund six months following the Issuance Date is to be transferred to the Project Fund.

Pledge and Assignment; Bond Fund

(A) Subject only to the provisions of the Indenture permitting the application thereof forthe purposes and on the terms and conditions set forth therein, all of the Revenues and any otheramounts (including proceeds of the sale of Bonds) held in any fund or account establishedpursuant to the Indenture (except the Rebate Fund and other moneys excluded from thedefinition of Revenues) are pledged to secure the full payment of the principal of, premium, ifany, and interest on the Bonds in accordance with their terms and the provisions of the Indentureand thereafter to secure the Credit Provider, if any, to the extent of its interest in such Revenuesand certain other funds or accounts established under the Indenture. Notwithstanding any otherprovision of the Indenture, moneys in the account created therein into which Purchase Pricepayments on Bonds not presented for purchase are to be deposited will be held solely for thebenefit of the former Bondholders as provided therein. Said pledge will constitute a lien on andsecurity interest in such assets and will attach, be perfected and be valid and binding from andafter delivery by the Trustee of the Bonds, without any physical delivery thereof or further act.

(B) The Issuer will transfer in trust, and assign to the Trustee, for the benefit of theBondholders from time to time and the Credit Provider, if any, to the extent of its interest therein,all of the Revenues and other assets pledged under the Indenture and described in (A)immediately above and all of the right, title and interest of the Issuer in the Agreement (exceptfor Unassigned Issuer Rights). The Trustee will be entitled to and will collect and receive all ofthe Revenues, and any Revenues collected or received by the Issuer will be deemed to be held,and to have been collected or received, by the Issuer as the agent of the Trustee and will be paidby the Issuer to the Trustee. The Trustee also will be entitled to and will take all steps, actionsand proceedings reasonably necessary in its judgment to enforce, either jointly with the Issuer orseparately, all of the rights of the Issuer and all of the obligations of the Company under theAgreement or the Note or of the Guarantor under the Guaranty.

(C) All Revenues will be promptly deposited by the Trustee upon receipt thereof in aspecial fund designated as the Bond Fund which the Trustee will establish, maintain and hold intrust. Except as otherwise provided in the Indenture, all moneys received by the Trustee andrequired to be deposited in the Redemption Account will be promptly deposited in theRedemption Account, which the Trustee will establish, maintain and hold in trust as provided inthe Indenture. All Revenues deposited with the Trustee will be held, disbursed, allocated andapplied by the Trustee only as provided in the Indenture.

(D) Any amount held by the Trustee in the Bond Fund on the due date for a LoanPayment under the Agreement will be credited against the installment due on such date to the

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extent available for such purpose under the terms of the Indenture and as described below in thisAppendix B under “THE AGREEMENT—Loan of Proceeds; Repayment—Loan Payments andPayment of Other Amounts.”

Allocation of Revenues

On or before any date on which interest or principal (whether at maturity, or byredemption or acceleration) is due, the Trustee will transfer funds from the Bond Fund anddeposit into the following respective accounts (each of which the Trustee is directed and agreesto establish and maintain within the Bond Fund), the following amounts (provided, however, thatthe moneys received by the Trustee from any draw on the Letter of Credit will not be depositedinto such account but will be deposited into the Letter of Credit Account of the Bond Fund asdescribed below in this Appendix B under “THE INDENTURE—Letter of Credit Account”), in thefollowing order of priority, the requirements of each such account (including the making up ofany deficiencies in any such account resulting from lack of Revenues sufficient to make anyearlier required deposit) at the time of deposit to be satisfied before any transfer is made to anyaccount subsequent in priority:

First: to the Interest Account, the aggregate amount of interest becoming due andpayable on the related Interest Payment Date or on the date of redemption or accelerationof all or a portion of the Bonds then Outstanding, until the balance in said account isequal to said aggregate amount of interest.

Second: to the Principal Account, the aggregate amount of principal, if any,becoming due and payable on the related Interest Payment Date.

Third: to the Redemption Account, the aggregate amount of principal andpremium next coming due by redemption permitted or required under the Indenture, or byacceleration required under the Indenture.

Priority of Moneys in Bond Fund

(A) Funds for the payment of the principal or redemption price of and interest on theBonds will be derived from the following sources in the order of priority indicated in each of theaccounts in the Bond Fund; provided however, that amounts in the respective accounts in theBond Fund will be used to pay when due (whether upon redemption, acceleration, InterestPayment Date, maturity or otherwise) the principal or redemption price of and interest on theBonds held by Bondholders other than the Credit Provider or the Company prior to the paymentof the principal and interest on the Bonds held by the Credit Provider or the Company andprovided further that no moneys from the Letter of Credit Account may in any circumstances beused to pay amounts due on Bank Bonds:

(i) moneys paid into the Letter of Credit Account of the Bond Fund from adraw by the Trustee under the Letter of Credit;

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(ii) moneys paid into the Interest Account, if any, representing accruedinterest received at the initial sale of the Bonds and proceeds from the investment thereofwhich are to be applied to the payment of interest on such Bonds;

(iii) moneys paid into the Bond Fund pursuant to the defeasance provisions ofthe Indenture and proceeds from the investment thereof, which, while a Letter of Credit isthen in effect, constitute Available Moneys;

(iv) any other moneys (other than from draws on the Letter of Credit) paid intoand deposited in the Bond Fund and proceeds from the investment thereof, which, while aLetter of Credit is then in effect, constitute Available Moneys;

(v) any moneys paid by the Guarantor and proceeds from the investmentthereof, which are not Available Moneys; and

(vi) any other moneys paid into and deposited in the Bond Fund and proceedsfrom the investment thereof, which are not Available Moneys.

Letter of Credit Account

The Trustee will create within the Bond Fund a separate account called the “Letter ofCredit Account,” into which all moneys drawn under the Letter of Credit are to be deposited anddisbursed. None of the Company, the Guarantor or the Issuer has any rights to or interest in theLetter of Credit Account. The Letter of Credit Account will be established and maintained bythe Trustee and held in trust apart from all other moneys and securities held under the Indentureor otherwise, and over which the Trustee will have the exclusive and sole right of withdrawal forthe exclusive benefit of the Bondholders with respect to which such drawing was made. Nomoneys from the Letter of Credit Account may in any circumstance be used to pay principal orinterest on any Bank Bonds or any Bonds owned by or for the account of the Company.

When notified by the Company in writing of the intent to create Available Moneys by theaging of moneys as described above in this Appendix B under “DEFINITIONS—AvailableMoneys,” the Trustee will establish within the Interest Account, Principal Account orRedemption Account one or more subaccounts to facilitate the calculation of the aging ofmoneys deposited with the Trustee until they become Available Moneys.

The Trustee is required under the Indenture to draw moneys under the Letter of Credit inaccordance with the terms thereof in an amount necessary to make timely payments of principalof, premium, if any and, if provided for under the Letter of Credit, interest on the Bonds, otherthan Bonds owned by or for the account of the Company or the Credit Provider, on each InterestPayment Date and when due whether at maturity, redemption, acceleration or otherwise.

Immediately after making a drawing under the Letter of Credit, as described above,which has been honored, the Trustee will reimburse the Credit Provider for the amount of thedrawing using moneys, if any, contained in:

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(A) the Interest Account, if the drawing was to pay interest on the Bonds;

(B) the Principal Account, if the drawing was to pay principal on the Bonds;and

(C) the Redemption Account, if the drawing was to redeem Bonds or to payBonds accelerated upon an Event of Default under the Indenture.

In addition, the Trustee is required under the Indenture to draw moneys under the Letterof Credit in accordance with the terms thereof to the extent necessary to make timely paymentsof the Purchase Price required to be made pursuant to, and in accordance with, the Indenture butsuch moneys will not be deposited into the Letter of Credit Account of the Bond Fund.

If at any time there is delivered to the Trustee an Alternate Letter of Credit pursuant tothe Agreement, the Trustee will accept such Alternate Letter of Credit and promptly surrenderthe then held Letter of Credit to the Credit Provider, in accordance with the terms of such Letterof Credit, for cancellation, and will promptly take all actions requested by the Credit Provider toconvey to the Credit Provider or otherwise relinquish all of its right, title and interest in anysecurity held jointly by the Credit Provider and the Trustee. If at any time there ceases to be anyBonds Outstanding under the Indenture, the Trustee will promptly surrender the Letter of Creditto the Credit Provider, in accordance with the terms of the Letter of Credit, for cancellation. TheTrustee will comply with the procedures set forth in the Letter of Credit relating to thetermination thereof.

Letter of Credit

The Trustee will hold and maintain the Letter of Credit for the benefit of the Bondholdersuntil the Letter of Credit expires in accordance with its terms. While the Bonds are in a VariableInterest Rate Period, the Letter of Credit will be continuously maintained in full force and effectin an amount equal to the principal amount of the Outstanding Bonds plus the amount requiredfor interest thereon, until all of the Bonds have been paid in full or their payment provided for inaccordance with the Indenture. The Trustee will diligently enforce all terms, covenants andconditions of the Letter of Credit, including payment when due of any draws on the Letter ofCredit, and the provisions relating to the payment of draws on, and reinstatement of amounts thatmay be drawn under, the Letter of Credit, and will not consent to, agree to or permit anyamendment or modification of the Letter of Credit which would materially adversely affect therights or security of the Bondholders. If at any time during the term of the Letter of Credit anysuccessor Trustee is appointed and qualified under the Indenture, the resigning or removedTrustee is required to request that the Credit Provider transfer the Letter of Credit to thesuccessor Trustee. If the resigning or removed Trustee fails to make this request, the successorTrustee will do so before accepting appointment. When the Letter of Credit expires inaccordance with its terms or is replaced by an Alternate Letter of Credit, the Trustee is requiredto immediately surrender the Letter of Credit to the Credit Provider after drawing thereunder forthe related mandatory tender occurring under the Indenture as described above in this OfficialStatement under “THE BONDS – Mandatory Tender for Purchase.”

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If at any time the Trustee has made a proper drawing on the Letter of Credit for principalof or interest due on the Bonds, and the Credit Provider has failed to make payment within thetime specified in the Letter of Credit or the Letter of Credit has been repudiated, the Trustee willimmediately notify the Guarantor and request payment of the amount due under the Guarantyand the Agreement in immediately available funds by 3:00 p.m. (New York City time) on theBond Payment Date. The Trustee has agreed to give similar notice with respect to a properdrawing on the Letter of Credit for Purchase Price pursuant to the Indenture.

To the extent that any payment has been made to a Bondholder with funds provided by adraw upon the Letter of Credit for which the Credit Provider has not been reimbursed pursuant tothe Reimbursement Agreement, the following provisions will apply notwithstanding any otherprovision of the Indenture to the contrary. The Credit Provider will be subrogated to the rights ofsuch Bondholder. Any such payment will not extinguish any payment obligation to theBondholder, but will effect a purchase by the Credit Provider of the payment right of theBondholder, and the Credit Provider will be considered a Bondholder with respect thereto. Tothe extent that any such payment is made to pay principal on a Bond, or that part of the purchaseprice corresponding to principal, such Bond will be registered in the name of the Credit Provideron the registration books of DTC, with respect to Book-Entry Bonds, or will be registered in thename of the Credit Provider and delivered to the Credit Provider or an agent designated by theCredit Provider, and will be given all of the rights accorded a Bank Bond under the Indenture.

Investment of Moneys

All moneys in any of the funds or accounts established pursuant to the Indenture will,except as described below, be, invested by the Trustee as specifically directed in writing by anAuthorized Representative of the Company, solely in Investment Securities. Notwithstandingany other provision in the Indenture, in the absence of specific written investment instructionsdirecting the Trustee by noon of the second Business Day preceding the day when investmentsare to be made, the Trustee is directed to invest available funds in the money market mutual fundknown as the Fidelity US Treasury Portfolio II 696 Fund. The Trustee will not be liable for anyconsequences resulting from any investments made pursuant to the Indenture. The Trustee isentitled to rely conclusively upon the Company’s investment directions as to the fact that eachsuch investment meets the criteria of the Indenture.

Investment Securities may be purchased at such prices as the Trustee may be specificallydirected in writing by an Authorized Representative of the Company. All Investment Securitiesshall be acquired subject to the limitations set forth in the Indenture, the limitations as tomaturities set forth in the Indenture and such additional limitations or requirements consistentwith the foregoing as may be established by request of the Company.

Except as described in the next succeeding sentence, moneys in all funds and accountsare required to be invested in Investment Securities maturing not later than the date on whichsuch moneys will be required for the purposes specified in the Indenture. Notwithstandinganything else in the Indenture, (i) any moneys in the Interest Account, the Principal Account orthe Redemption Account held for the payment of particular Bonds (prior to the payment orredemption date thereof) will be invested at the specific written direction of an Authorized

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Representative of the Company in direct obligations of the United States or bonds or otherobligations guaranteed by the United States government or for which the full faith and credit ofthe United States is pledged for the full and timely payment of principal and interest thereof (ormutual funds consisting of such obligations which are rated in the highest rating category by theRating Agency), rated in the highest rating category applicable to such investments which maturenot later than the date on which it is estimated that such moneys will be required to pay suchBonds (but in any event maturing in not more than thirty (30) days), (ii) moneys in the SurplusAccount will be invested as provided in the Indenture and described above in this Appendix Bunder “THE INDENTURE—Project Fund,” (iii) investments of moneys in the Rebate Fund are alsosubject to the provisions of the Tax Agreement and (iv) moneys in the Letter of Credit Accountand moneys held for non-presented Bonds will be held uninvested.

All interest, profits and other income received from the investment of moneys in any fund(or account therein) established pursuant to the Indenture and allowed to be invested inaccordance therewith is to be deposited in the fund (or account therein) from which suchinvestment was made. Notwithstanding anything to the contrary described in this paragraph, anamount of interest received with respect to any Investment Security equal to the amount ofaccrued interest, if any, paid as part of the purchase price of such Investment Security will becredited to the fund (or account therein) from which such accrued interest was paid. To theextent that any Investment Securities are registrable, such Securities will be registered in thename of the Trustee or its nominee.

For the purpose of determining the amount in any fund, all Investment Securities creditedto such fund (or account therein) will be valued at the lesser of cost or par value plus, prior to thefirst payment of interest following purchase, the amount of accrued interest, if any, paid as a partof the purchase price.

Subject to provisions of the Indenture, investments in any and all funds and accounts(other than moneys representing the proceeds of a draw on the Letter of Credit or held in theLetter of Credit Account, remarketing proceeds, Available Moneys, moneys being aged tobecome Available Moneys, or moneys held for the payment of particular Bonds (includingmoneys held for Undelivered Bonds or held under the provisions of the Indenture described inthis Appendix B under “THE INDENTURE—Deposit of Money or Securities with Trustee”)) maybe commingled for purposes of making, holding and disposing of investments, notwithstandingprovisions of the Indenture for transfer to or holding in particular funds and accounts amountsreceived or held by the Trustee under the Indenture, provided that the Trustee will at all timesaccount for such investments strictly in accordance with the Indenture. Subject to the provisionsof the Indenture, any moneys may be invested in a pooled investment account consisting solelyof funds held by the Trustee as a fiduciary. The Issuer acknowledges that to the extentregulations of the Comptroller of the Currency or other applicable regulatory entity grant theIssuer the right to receive brokerage confirmations of security transactions as they occur, theIssuer specifically waives receipt of such confirmations to the extent permitted by law. TheTrustee may act as principal or agent in the making or disposing of any investment. The Trusteemay sell or present for redemption any Investment Securities so purchased whenever it shall benecessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement

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from the fund (or account therein) to which such Investment Security is credited, and the Trusteewill not be liable or responsible for any loss or tax resulting from such investment.

Rebate Fund

The Trustee will establish and maintain the Rebate Fund separate from any other fundestablished and maintained under the Indenture pursuant to and in accordance with theprovisions of the Tax Agreement.

Events of Default; Acceleration; Waiver of Default

Each of the following events which has occurred and is continuing will constitute an“Event of Default” under the Indenture:

(A) default in the due and punctual payment of the principal of, or premium (ifany) on, any Bond, whether at maturity as therein expressed, by proceedings forredemption, by declaration or otherwise;

(B) default in the due and punctual payment of any installment of interest on,or the Purchase Price of, any Bond;

(C) failure by the Issuer to perform or observe any other of the covenants,agreements or conditions on its part in the Indenture or in the Bonds contained, and thecontinuation of such failure for a period of sixty (60) days after written notice thereof,specifying such default and requiring the same to be remedied, has been given to theIssuer, the Credit Provider, if any, the Guarantor and the Company by the Trustee, or tothe Issuer, the Credit Provider, if any, the Company and the Trustee by the Holders of notless than 25% in aggregate principal amount of the Bonds at the time Outstanding;

(D) the occurrence and continuance of a Loan Default Event described in theAgreement; or

(E) if applicable, receipt by the Trustee of written notice from the CreditProvider that an Event of Default (as defined in the Reimbursement Agreement) hasoccurred under the Reimbursement Agreement and directing the Trustee to accelerate theBonds.

No default specified in (C) above will constitute an Event of Default unless the Issuer, orthe Company on behalf of the Issuer, has failed to correct such default within the applicableperiod; provided, however, that if the default is such that it cannot be corrected within suchperiod, it will not constitute an Event of Default if corrective action is instituted by the Issuer orthe Company within the applicable period and diligently pursued. With regard to any allegeddefault concerning which notice is given to the Company as described in this subheading, theIssuer will grant the Company under the Indenture full authority for the account of the Issuer toperform any covenant or obligation the non-performance of which is alleged in said notice toconstitute a default in the name and stead of the Issuer with full power to do any and all things

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and acts to the same extent that the Issuer could do and perform any such things and acts andwith power of substitution.

During the continuance of an Event of Default described in (A), (B), (C) or (D) above,unless the principal of all the Bonds has already become due and payable, the Trustee may, andupon the written request of the Bondholders of not less than 66-2/3% in aggregate principalamount of the Bonds at the time Outstanding, or upon the occurrence of an Event of Defaultdescribed in (E) above, the Trustee is required, promptly upon such occurrence, by notice inwriting to the Issuer, the Company, the Guarantor and the Credit Provider, to declare theprincipal of all the Bonds then Outstanding, and the interest accrued thereon, to be due andpayable immediately, and upon any such declaration the same will become and be immediatelydue and payable, anything in the Indenture or in the Bonds contained to the contrarynotwithstanding. Upon any such declaration, the Trustee is required to promptly draw upon anythen existing Letter of Credit in accordance with the terms thereof and apply the amount sodrawn to pay the principal of and interest on the Bonds declared to be due and payable. Intereston the Bonds will cease to accrue as of the date of the declaration of acceleration. The Trusteewill promptly notify the Bondholders of the date of acceleration and the cessation of accrual ofinterest on the Bonds in the same manner as for a notice of redemption.

The provisions described in the preceding paragraph, however, are subject to thecondition that if, at any time after the principal of the Bonds has been declared due and payable,and before any judgment or decree for the payment of the moneys due has been obtained orentered as provided in the Indenture, and before the Letter of Credit has been drawn upon inaccordance with its terms and honored, there has been deposited with the Trustee a sumsufficient to pay (with Available Moneys if a Letter of Credit is in effect) all the principal of theBonds matured prior to such declaration and all matured installments of interest (if any) upon allthe Bonds, with interest on such overdue installments of principal as provided in the Agreement,and the reasonable fees and expenses of the Trustee, and any and all other defaults known to theTrustee (other than in the payment of principal of and interest on the Bonds due and payablesolely by reason of such declaration) have been made good or cured to the satisfaction of theTrustee or provision deemed by the Trustee to be adequate has been made therefor, then, and inevery such case, the Bondholders of at least a majority in aggregate principal amount of theBonds then Outstanding, by written notice to the Issuer and to the Trustee, may, on behalf of theBondholders of all the Bonds, rescind and annul such declaration and its consequences andwaive such default; but no such rescission and annulment will extend to or affect any subsequentdefault, or impair or exhaust any right or power consequent thereon. Notwithstanding any otherprovision of the Indenture except as described in the following sentence, the Trustee may notexercise any remedy in the event of a default described in (A) through (E) above without thewritten consent of the Credit Provider, so long as a Letter of Credit is in effect and the CreditProvider has not wrongfully failed to make a payment thereunder. The Trustee may exercise anyand all remedies under the Indenture and the Agreement (except as provided in the Agreement)to collect any fees, expenses and indemnification from the Company without obtaining theconsent of the Credit Provider.

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Institution of Legal Proceedings by Trustee

Subject to the provisions described above in this Appendix B under “THE

INDENTURE—Events of Default; Acceleration; Waiver of Default,” if one or more of the Eventsof Default has happened and is continuing, the Trustee in its discretion may, and upon the writtenrequest of the Holders of two-thirds in principal amount of the Bonds then Outstanding and uponbeing indemnified to its satisfaction therefor pursuant to provisions of the Indenture, proceed toprotect or enforce its rights or the rights of the Bondholders under the Act or under the Indentureor the Agreement by a suit in equity or action at law, either for the specific performance of anycovenant or agreement contained therein, or in aid of the execution of any power therein granted,or by mandamus or other appropriate proceeding for the enforcement of any other legal orequitable remedy as the Trustee deems most effectual in support of any of its rights or dutiesunder the Indenture.

Application of Revenues and Other Funds After Default

If an Event of Default occurs and is continuing under the Indenture, all Revenues and anyother funds then held or thereafter received by the Trustee under any of the provisions of theIndenture (subject to certain provisions of the Indenture) will be promptly applied by the Trusteeas follows and in the following order:

(1) To the payment of any expenses necessary in the opinion of the Trustee toprotect the interests of the Bondholders and payment of reasonable fees, charges andexpenses of the Trustee (including reasonable fees and disbursements of its counsel)incurred in and about the performance of its powers and duties under the Indenture;

(2) To the payment of the principal of and interest then due on the Bonds(upon presentation of the Bonds to be paid, and stamping thereon of the payment if onlypartially paid, or surrender thereof if fully paid) subject to the provisions of the Indenture(including provisions of the Indenture relating to the extension of payment of the Bonds),as follows:

(i) Unless the principal of all of the Bonds has become or has beendeclared due and payable,

First: To the payment to the persons entitled thereto of allinstallments of interest then due in the order of the maturity of suchinstallments, and, if the amount available is not sufficient to pay in fullany installment or installments maturing on the same date, then to thepayment thereof ratably, according to the amounts due thereon, to thepersons entitled thereto, without any discrimination or preference; and

Second: To the payment to the persons entitled thereto of the unpaidprincipal of any Bonds which have become due, whether at maturity or bycall for redemption, with interest on the overdue principal at the rate borneby the Bonds, and, if the amount available is not sufficient to pay in full

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all the Bonds, together with such interest, then to the payment thereofratably, according to the amounts of principal due on such date to thepersons entitled thereto, without any discrimination or preference.

(ii) If the principal of all of the Bonds has become or has beendeclared due and payable, to the payment of the principal and interest then dueand unpaid upon the Bonds, with interest on the overdue principal at the rateborne by the Bonds, and, if the amount available is not sufficient to pay in full thewhole amount so due and unpaid, then to the payment thereof ratably, withoutpreference or priority of principal over interest, or of interest over principal, or ofany installment of interest over any other installment of interest, or of any Bondover any other Bond, according to the amounts due respectively for principal andinterest, to the persons entitled thereto without any discrimination or preference,

provided, however, that in no event will moneys derived from drawings under the Letter ofCredit, moneys set aside to pay principal or interest on any particular Bonds (including moneysheld for non-presented Bonds as provided in the Indenture), or the proceeds from remarketing ofthe Bonds be used to pay any of the items described in clause (i) of this paragraph and AvailableMoneys and moneys being aged to become Available Moneys will not be used to pay any of theitems described in clause (i) of this paragraph until all amounts have been paid.

(3) To the payment of any amounts owed to the Credit Provider pursuant tothe Reimbursement Agreement.

(4) To the extent that any Revenues or any other funds held by the Trusteeremain after all amounts required to be paid under the Indenture and described inparagraphs (1), (2) and (3) above have been paid, such amounts will be paid over to theCompany.

Trustee to Represent Bondholders

The Trustee is irrevocably appointed under the Indenture (and the successive respectiveBondholders, by taking and holding the same, are conclusively deemed to have so appointed theTrustee) as trustee and true and lawful attorney-in-fact of the Bondholders for the purpose ofexercising and prosecuting on their behalf such rights and remedies as may be available to suchBondholders under the provisions of the Bonds, the Indenture, the Agreement, the Note, the Actand applicable provisions of any other law. Subject to provisions of the Indenture, describedabove in this Appendix B under “THE INDENTURE –Events of Default; Acceleration; Waiver ofDefault,” upon the occurrence and continuance of an Event of Default or other occasion givingrise to a right in the Trustee to represent the Bondholders, the Trustee in its discretion may, andupon the written request of the Bondholders of not less than 66-2/3% in aggregate principalamount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, isrequired under the Indenture to proceed to protect or enforce its rights or the rights of theBondholders by such appropriate action, suit, mandamus or other proceedings as it deems mosteffectual to protect and enforce any such right, at law or in equity, either for the specificperformance of any covenant or agreement contained in the Indenture, or in aid of the execution

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of any power granted in the Indenture, or for the enforcement of any other appropriate legal orequitable right or remedy vested in the Trustee or in the Bondholders under the Indenture, theAgreement, the Act or any other law; and upon instituting such proceeding, the Trustee will beentitled, as a matter of right, to the appointment of a receiver of the Revenues and other assetspledged under the Indenture, pending such proceedings. All rights of action under the Indentureor the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possessionof any of the Bonds or the production thereof in any proceeding relating thereto, and any suchsuit, action or proceeding instituted by the Trustee will be brought in the name of the Trustee forthe benefit and protection of all the Bondholders, subject to the provisions of the Indenture(including provisions of the Indenture relating to the extension of payment of the Bonds).

Bondholders’ Direction of Proceedings

Anything in the Indenture to the contrary notwithstanding, but subject to provisions of theIndenture relating to expenditures by the Trustee of its own funds and the rights of the CreditProvider as described below in this Appendix B under “THE INDENTURE—Rights of CreditProvider,” the Bondholders of 25% in aggregate principal amount of the Bonds then Outstandinghave the right, by an instrument or concurrent instruments in writing executed and delivered tothe Trustee, to direct the method of conducting all remedial proceedings taken by the Trusteeunder the Indenture, provided that such direction is not otherwise than in accordance with lawand the provisions of the Indenture, and that the Trustee has the right to decline to follow anysuch direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholdersnot parties to such direction or for which it has not been provided indemnity reasonablysatisfactory to it.

Limitation on Bondholders’ Right to Sue

Subject to provisions of the Indenture described above in this Appendix B under “THE

INDENTURE—Events of Default; Acceleration; Waiver of Defaults,” no Bondholder of any Bondshall have the right to institute any suit, action or proceeding at law or in equity, for theprotection or enforcement of any right or remedy under the Indenture, the Agreement, the Act orany other applicable law with respect to such Bond, unless (1) such Holder has given to theTrustee written notice of the occurrence of an Event of Default; (2) the Bondholders of not lessthan 25% in aggregate principal amount of the Bonds then Outstanding shall have made writtenrequest upon the Trustee to exercise the powers granted in the Indenture or to institute such suit,action or proceeding in its own name; (3) subject to provisions of the Indenture relating toexpenditures by the Trustee of its own funds, such Bondholder or said Bondholders havetendered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses andliabilities to be incurred in compliance with such request; and (4) the Trustee has refused oromitted to comply with such request for a period of 60 days after such written request has beenreceived by, and said tender of indemnity has been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are declared underthe Indenture, in every case, to be conditions precedent to the exercise by any Bondholder of anyremedy under the Indenture or under law; it being understood and intended that no one or moreBondholders has any right in any manner whatever by such Bondholders’ action to affect, disturb

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or prejudice the security of the Indenture or the rights of any other Bondholders, or to enforceany right under the Indenture, the Agreement, the Act or other applicable law with respect to theBonds, except in the manner provided in the Indenture, and that all proceedings at law or inequity to enforce any such right must be instituted, had and maintained in the manner provided inthe Indenture and for the benefit and protection of all Bondholders of the Outstanding Bonds,subject to the provisions of the Indenture (including provisions of the Indenture relating toextension of payment of the Bonds).

Absolute Obligation of Issuer

Nothing described in the two immediately preceding paragraphs or in any other provisionof the Indenture, or in the Bonds, contained will affect or impair the obligation of the Issuer,which is absolute and unconditional, to pay the principal of and interest on the Bonds to therespective Bondholders at their date of maturity, or upon call for redemption, as provided in theIndenture, but only out of the Revenues and other assets pledged in the Indenture therefor, oraffect or impair the right of such Bondholders, which is also absolute and unconditional, toenforce such payment by virtue of the contract embodied in the Bonds.

Termination of Proceedings

In case any proceedings taken by the Trustee or any one or more Bondholders on accountof any Event of Default have been discontinued or abandoned for any reason or have beendetermined adversely to the Trustee or the Bondholders, then in every such case the Issuer, theTrustee and the Bondholders, subject to any determination in such proceedings, will be restoredto their former positions and rights under the Indenture, severally and respectively, and all rights,remedies, powers and duties of the Issuer, the Trustee and the Bondholders will continue asthough no such proceedings had been taken.

Remedies Not Exclusive

No remedy conferred under the Indenture or reserved to the Trustee or to theBondholders is intended to be exclusive of any other remedy or remedies, and each and everysuch remedy, to the extent permitted by law, is to be cumulative and in addition to any otherremedy given under the Indenture or now or hereafter existing at law or in equity or otherwise.

No Waiver of Default

No delay or omission of the Trustee or of any Bondholder to exercise any right or powerarising upon the occurrence of any default will impair any such right or power or be construed tobe a waiver of any such default or an acquiescence therein; and every power and remedy givenby the Indenture to the Trustee or to the Bondholders may be exercised from time to time and asoften as may be deemed expedient.

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Consent of Credit Provider to Defaults

The provisions described in this paragraph apply only if a Letter of Credit is in effect.Notwithstanding any other provisions of the Indenture described above in this Appendix B under“THE INDENTURE—Events of Default; Acceleration; Waiver of Default” through “—No Waiverof Default,” and subject to provisions of the Indenture relating to expenditures by the Trustee ofits own funds and to indemnification of the Trustee and to the provision of the Indenturedescribed below in this Appendix B under “THE INDENTURE—Rights of Credit Provider,” solong as the Credit Provider is not continuing wrongfully to dishonor drawings under the Letter ofCredit, no Event of Default described in (C) through (E) of the first paragraph above in thisAppendix B under “THE INDENTURE—Events of Default; Acceleration; Waiver of Default” is tobe declared (except in a case resulting from the failure of the Company to pay the Trustee’s feesand expenses or to indemnify the Trustee), nor any remedies exercised with respect to any Eventof Default by the Trustee or by the Bondholders (except in a case resulting from the failure of theCompany to pay the Trustee’s fees and expenses or to indemnify the Trustee) and no Event ofDefault under the Indenture is to be waived by the Trustee or the Bondholders to the extent itmay otherwise be permitted under the Indenture, without, in any case, the prior written consentof the Credit Provider and, if applicable, rescission by the Credit Provider of any notice of anevent of default under the Reimbursement Agreement. No Event of Default can be waived, inany circumstance, unless the Trustee has received written notice from the Credit Provider thatthe Letter of Credit, if any, has been fully reinstated and is in full force and effect.

Modification or Amendment of the Indenture

(A) Except as described in paragraph (B) below and as described below in thisAppendix B under “THE INDENTURE—Rights of Credit Provider,” the Indenture and the rightsand obligations of the Issuer and of the Bondholders and of the Trustee may be modified oramended from time to time and at any time by an indenture or indentures supplemental to theIndenture, which the Issuer and the Trustee may enter into when the written consent of theBondholders of 66-2/3% in aggregate principal amount of all Bonds then Outstanding and thewritten consent of the Credit Provider have been filed with the Trustee. No such modification oramendment may (1) extend the fixed maturity of any Bond, or reduce the amount of principalthereof, or extend the time of payment, or change the method of computing the rate of interestthereon, or extend the time of payment of interest thereon, or (2) affect the rights and obligationsof the Holders to tender Bonds for purchase or the payment provisions with respect thereto, or(3) reduce the aforesaid percentage of Bonds the consent of the Bondholders of which is requiredto effect any such modification or amendment, or (4) permit the creation of any lien on theRevenues and other assets pledged under the Indenture prior to or on a parity with the liencreated by the Indenture, or (5) deprive the Bondholders of the lien created by the Indenture onsuch Revenues and other assets (except as expressly provided in the Indenture), without in eachcase the written consent of the Bondholders of all of the Bonds then Outstanding and the CreditProvider. It will not be necessary for the consent of the Bondholders or the Credit Provider toapprove the particular form of any Supplemental Indenture, but it will be sufficient if suchconsent approves the substance thereof. Promptly after the execution by the Issuer and theTrustee of any Supplemental Indenture described in this paragraph, the Trustee will mail anotice, setting forth in general terms the substance of such Supplemental Indenture, to each

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Rating Agency then rating the Bonds, the Company, the Guarantor and the Bondholders at theaddress shown on the registration books of the Bond Registrar. Any failure to give such notice,or any defect therein, will not, however, in any way impair or affect the validity of any suchSupplemental Indenture.

(B) The Indenture and the rights and obligations of the Issuer, of the Trustee and of theBondholders may also be modified or amended from time to time and at any time by anindenture or indentures supplemental to the Indenture, which the Issuer and the Trustee mayenter into without the consent of any Bondholders, but with the written consent of the CreditProvider, for any one or more of the following purposes:

(1) to add to the covenants and agreements of the Issuer contained in theIndenture other covenants and agreements thereafter to be observed, to pledge or assignadditional security for the Bonds, or to surrender any right or power reserved to orconferred upon the Issuer under the Indenture;

(2) to make such provisions for the purpose of curing any ambiguity,inconsistency or omission, or of curing or correcting any defective provision, containedin the Indenture, or in regard to matters or questions arising under the Indenture, as theIssuer may deem necessary or desirable and not inconsistent with the Indenture;

(3) to modify, amend or supplement the Indenture in such manner as to permitthe qualification thereof under the Trust Indenture Act of 1939, as amended, or anysimilar federal statute hereafter in effect, and to add such other terms, conditions andprovisions as may be permitted by said act or similar federal statute;

(4) to conform to the terms and provisions of any Alternate Letter of Credit orto obtain a rating on the Bonds; or

(5) to modify, alter, amend or supplement the Indenture in any other respect,including amendments which would otherwise be described in paragraph (A) of thissubheading, if the effective date of such Supplemental Indenture is a date on which allBonds affected thereby are subject to mandatory tender for purchase pursuant to theIndenture (as described above in this Official Statement under “THE BONDS – MandatoryTender for Purchase”) or if notice by first class mail of the proposed SupplementalIndenture is given to Bondholders of the affected Bonds at least thirty (30) days beforethe effective date thereof and, on or before such effective date, such Bondholders havethe right to demand purchase of their Bonds pursuant to the Indenture as described abovein this Official Statement under “THE BONDS—Demand Purchase.”

(C) The Trustee may in its discretion, but is not obligated to, enter into anySupplemental Indenture described in the immediately preceding paragraphs (A) and (B) whichmaterially adversely affects the Trustee’s own rights, duties or immunities under the Indenture orotherwise.

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(D) The Trustee may in its discretion, but is not obligated to, request the Company tofurnish an Opinion of Counsel to the effect that the provisions of any such SupplementalIndenture described in the immediately preceding paragraphs (A) and (B) above are permitted byapplicable law and do not materially adversely affect the interest of the Holders of the Bonds.

(E) Any other provision of the Indenture to the contrary notwithstanding, noSupplemental Indenture described in the immediately preceding paragraphs (A) and (B) willbecome effective without the written consent of the Company.

Defeasance

Bonds may be paid by the Issuer under the Indenture in any of the following ways,provided that the Issuer also pays or causes to be paid any other sums payable under theIndenture by the Issuer:

(a) by paying or causing to be paid (with Available Moneys when a Letter ofCredit is then in effect) the principal of, interest and premium, if any, on the Bonds thenOutstanding as and when the same become due and payable;

(b) by depositing with the Trustee, in trust, at or before maturity or theredemption date thereof, money or securities in the necessary amount (as described belowin this Appendix B under “THE INDENTURE—Deposit of Money or Securities withTrustee”) to pay or redeem (with Available Moneys when a Letter of Credit is then ineffect) all Bonds then Outstanding that bear interest at a Term Interest Rate; or

(c) by delivering to the Trustee, for cancellation by it, the Bonds thenOutstanding.

If the Issuer shall also pay or cause to be paid all other sums payable under the Indentureby the Issuer, then and in that case, at the election of the Issuer (evidenced by a Certificate of theIssuer, filed with the Trustee, signifying the intention of the Issuer to discharge all suchindebtedness and the Indenture), and notwithstanding that any Bonds have not been surrenderedfor payment, the Indenture and the pledge of Revenues and other assets made under theIndenture and all covenants, agreements and other obligations of the Issuer under the Indentureshall cease, terminate, become void and be completely discharged and satisfied except only asdescribed below in this Appendix B under “THE INDENTURE—Discharge of Liability on Bonds.”In such event, upon written request of the Issuer, the Trustee will cause an accounting for suchperiod or periods as may be requested by the Issuer to be prepared and filed with the Issuer andwill execute and deliver to the Issuer all such instruments as may be necessary or desirable toevidence such discharge and satisfaction, and the Trustee will pay over, transfer, assign ordeliver all moneys or securities or other property held by it pursuant to the Indenture (other thanthe Rebate Fund) which are not required for the payment or redemption of Bonds not theretoforesurrendered for such payment or redemption and any amounts owed to the Trustee under theIndenture in the following order (1) first, to the Credit Provider to the extent of any amounts dueto the Credit Provider pursuant to the Reimbursement Agreement and (2) second, to theCompany, provided, however, that the Company may not receive any funds derived from a draw

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on the Letter of Credit, remarketing proceeds, or moneys held for the payment of particularBonds (including moneys held for non-presented Bonds).

Discharge of Liability on Bonds

Upon the deposit with the Trustee, in trust, at or before maturity or redemption, as thecase may be, of money or securities in the necessary amount (as described below in thisAppendix B under “THE INDENTURE—Deposit of Money or Securities with Trustee”) to pay orredeem any Outstanding Bond that bears interest at a Term Interest Rate (whether upon or priorto its maturity or the redemption date of such Bond), provided that, if such Bond is to beredeemed prior to maturity, notice of such redemption must have been given as provided in theIndenture and described above in this Official Statement under “THE BONDS—Redemption—Notice of Redemption” or provision satisfactory to the Trustee must have beenmade for the giving of such notice, then all liability of the Issuer in respect of such Bond willcease, terminate and be completely discharged, except only that the Bondholder thereof willthereafter be entitled to payment of the principal of and interest on such Bond by the Issuer, andthe Issuer will remain liable for such payment, but only out of such money or securitiesdeposited with the Trustee as described above for their payment and such money or securitieswill be pledged to such payment; provided further, however, that the provisions of the Indenturerelating to the payment of Bonds after the discharge of the Indenture will apply in all events.

The Issuer may at any time surrender to the Trustee for cancellation by it any Bondspreviously issued and delivered, which the Issuer may have acquired in any manner whatsoever,and such Bonds, upon such surrender and cancellation, will be deemed to be paid and retired.

Deposit of Money or Securities with Trustee

Whenever in the Indenture it is provided or permitted that there be deposited with or heldin trust by the Trustee money or securities in the necessary amount to pay or redeem any Bondsthat bear interest at a Term Interest Rate, the money or securities to be deposited or held mayinclude money or securities held by the Trustee in the funds and accounts established pursuant tothe Indenture (exclusive of the Rebate Fund, the Letter of Credit Account and the account to beestablished by the Trustee under the Indenture for Bonds deemed tendered for purchase but notpresented to the Tender Agent) and shall be:

(a) moneys (Available Moneys when a Letter of Credit is then in effect) in anequal amount to the principal amount of such Bonds, and all unpaid interest thereon tomaturity except that, in the case of Bonds which are to be redeemed prior to maturity andin respect of which notice of such redemption has been given as provided in the Indentureand described above in this Official Statement under the caption “THE

BONDS—Redemption— Notice of Redemption” or provision satisfactory to the Trusteehas been made for the giving of such notice, the amount to be deposited or held to be theprincipal amount or redemption price of such Bonds and all unpaid interest thereon to theredemption date; or

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(b) Investment Securities (rated by S&P “AAA” or equivalent) which consistsolely of securities described in clause (A) or (B) of the definition of InvestmentSecurities as set forth above in this Appendix B under “DEFINITIONS” and, when a Letterof Credit is then in effect, which are purchased with Available Moneys, the principal ofand interest on which when due and without reinvestment will provide money sufficientto pay the principal of, premium, if any, and all unpaid interest to maturity or to theredemption date on the Bonds to be paid or redeemed, as such principal and interestbecome due, with maturities no longer than 30 days or as may be necessary to make therequired payment on the Bonds, provided that, in the case of Bonds which are to beredeemed prior to the maturity thereof, notice of such redemption has been given asprovided in the Indenture and described above in this Official Statement under “THE

BONDS—Redemption—Notice of Redemption” or provision satisfactory to the Trusteemust have been made for the giving of such notice;

provided, in each case, that the Trustee has been irrevocably instructed (by the terms of theIndenture or by written request of the Issuer) to apply such money or Investment Securities to thepayment of such principal, premium, if any, and interest with respect to such Bonds and providedfurther that each Rating Agency then rating such Bonds and the Trustee have received a report ofan Accountant that the moneys or Investment Securities on deposit are sufficient to pay theprincipal, premium, if any, and interest on the Bonds to maturity or the redemption date, and anApproving Opinion and, if a Letter of Credit is then in effect, a legal opinion from a nationallyrecognized firm in bankruptcy law that payment of the Bonds from such moneys will not be avoidable preference in the event of the bankruptcy of the Company or the Issuer.

Rights of Credit Provider

Notwithstanding anything in the Indenture to the contrary, so long as a Letter of Credit isthen in effect and the Credit Provider has not failed or refused to honor a properly presented andconforming draw under the Letter of Credit, the Credit Provider, and not the Owners of theBonds, will be deemed to be the Owner of 100% of the Outstanding Bonds at all times for thepurpose of giving any approval, request, consent, direction (other than as related to theprovisions described above in this Official Statement under the caption "THEBONDS—Demand Purchase"), declaration, rescission or amendment which under the Indentureis to be given by the Owners of the Bonds at the time Outstanding; provided, however, that theCredit Provider may not consent to any modification or amendment of the Indenture, theAgreement or the Guaranty requiring the consent of the Owners of 100% in aggregate principalamount of the Bonds Outstanding or which would cause the interest on the Bonds to be no longerexcluded from gross income for federal income tax purposes unless the actual Owners of 100%in aggregate principal amount of the Bonds Outstanding have also consented thereto or unlessthe Credit Provider is also the registered owner of 100% of the Bonds Outstanding; and providedfurther, that the Credit Provider does not have the right prior to the occurrence of an Event ofDefault under the Indenture to deprive any Owner of the Bonds of the benefit of the Letter ofCredit under the circumstances and in the manner contemplated as set forth in the Indenture anddescribed herein.

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THE AGREEMENT

The following is a brief summary of certain provisions of the Agreement. THIS SUMMARY

DOES NOT PURPORT TO BE COMPLETE OR DEFINITIVE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE

TO THE AGREEMENT, COPIES OF WHICH ARE ON FILE WITH THE TRUSTEE.

Term

The Agreement will be in full force and effect from the date of the Agreement and willcontinue in effect as long as any of the Bonds is outstanding or the Trustee holds any moneysunder the Indenture, whichever is later.

Issuance of the Bonds; Application of Proceeds

To provide funds to finance Costs of the Project and Costs of Issuance, the Issuer agreesthat it will issue under the Indenture, sell and cause to be delivered to the purchasers thereof, theBonds. The Issuer will thereupon apply the proceeds received from the sale of the Bonds asprovided in the Indenture. The Company agrees that it will acquire, construct and install, orcomplete the acquisition, construction and installation of, the Project, substantially in accordancewith the description of the Project prepared by the Company and submitted to the Issuer,including any and all supplements, amendments and additions or deletions thereto or therefrom,it being understood that the approval of the Issuer will not be required for changes in suchdescription which do not substantially alter the purpose and description of the Project. TheCompany further agrees to proceed with due diligence to complete the Project within three yearsfrom the date of the Agreement.

In the event that the Company desires to alter or change any part of the Project, and suchalteration or change substantially alters the purpose and description of the Project, the Issuer mayconsent (which consent shall not be unreasonably withheld) to such changes in its discretion and,if it does so consent, will instruct the Trustee to consent to such amendment or supplement aswill be required to reflect such alteration or change to the Project upon receipt of:

(i) a certificate of the Authorized Representative of the Company describingin detail the proposed changes and stating that they will not have the effect ofdisqualifying the Project as facilities that may be financed pursuant to the Act;

(ii) a copy of the proposed amendment or supplement; and

(iii) an Approving Opinion relating to such proposed changes.

Loan of Proceeds; Repayment

Loan of Bond Proceeds; Issuance of Bonds. The Issuer has covenanted and agreed,upon the terms and conditions in the Agreement, to make a loan to the Company from theproceeds of the Bonds for the purpose of financing the Costs of the Project and the Costs ofIssuance. The Issuer further covenants and agrees under the Agreement that it will take all

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actions within its authority to keep the Agreement in effect in accordance with its terms.Pursuant to said covenants and agreements, the Issuer will issue the Bonds upon the terms andconditions contained in the Agreement and the Indenture and will cause the Bond proceeds to beapplied as provided in the Indenture.

Loan Payments and Payment of Other Amounts. On or before 12:00 noon, New YorkCity time, on each Bond Payment Date, until the principal of, premium, if any, and interest on,the Bonds has been fully paid or provision for such payment has been made as provided in theIndenture, the Company covenants and agrees under the Agreement to pay to the Trustee as arepayment on the loan made to the Company from Bond proceeds as described in theimmediately preceding paragraph, a sum equal to the amount payable on such Bond PaymentDate as principal of, and premium, if any, and interest on, the Bonds as provided in theIndenture. Such Loan Payments are to be made in federal funds or other funds immediatelyavailable at the Corporate Trust Office of the Trustee.

Each payment made as described in the immediately preceding paragraph must at alltimes be sufficient to pay the total amount of interest and principal (whether at maturity or uponredemption or acceleration) and premium, if any, becoming due and payable on the Bonds oneach Bond Payment Date; provided that any amount held by the Trustee in the Bond Fund onany due date for a Loan Payment under the Agreement will be credited against the Loan Paymentdue on such date, to the extent available for such purpose; and provided further that, subject tothe provisions described in this paragraph, if at any time the amounts held by the Trustee in theBond Fund and available for such purpose are sufficient to pay all of the principal of and interestand premium, if any, on the Bonds as such payments become due, the Company will be relievedof any obligation to make any further payments as described in the immediately precedingparagraph. Notwithstanding the foregoing, if on any date the amount held by the Trustee in theBond Fund is insufficient to make any required payments of principal of (whether at maturity orupon redemption or acceleration) and interest and premium, if any, on, the Bonds as suchpayments become due, the Company will forthwith pay such deficiency as a Loan Paymentunder the Agreement.

The obligation of the Company to make any payment described in the two immediatelypreceding paragraphs will be deemed to have been satisfied to the extent of any correspondingpayment made by a Credit Provider to the Trustee pursuant to a Letter of Credit then in effectwith respect to the Bonds.

The Company further covenants and agrees under the Agreement to make any paymentsrequired to be made pursuant to the provisions of the Indenture in connection with Bondholders’demands for purchase of their Bonds during a Variable Interest Rate Period (as described abovein this Official Statement under “THE BONDS—Mandatory Tender for Purchase”) and inconnection with mandatory tenders of the Bonds for purchase (as described above in this OfficialStatement under “THE BONDS—Mandatory Tender for Purchase”), such payments to be made atthe applicable Purchase Price thereof by 3:00 p.m. New York City time on the Purchase Date infederal or other immediately available funds; provided however the obligation to make suchpayments will be deemed satisfied to the extent that such Purchase Price is paid fromremarketing proceeds or from a draw under a Letter of Credit pursuant to the Indenture.

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Unconditional Obligation. The obligations of each Company to make the LoanPayments, the Purchase Price Payments and the other payments required by the Agreement andto perform and observe the other agreements on its part contained in the Agreement are joint andseveral, absolute and unconditional, irrespective of any defense or any rights of set-off,recoupment or counterclaim it might otherwise have against the Issuer, and during the term ofthe Agreement, the Company will pay all payments required to be made on account of theAgreement (which payments will be net of any other obligations of the Company) as describedabove in this Appendix B under “THE AGREEMENT—Loan of Proceeds; Repayment—LoanPayments and Payment of Other Amounts” and all other payments required thereunder, free ofany deductions and without abatement, diminution or set-off. The Company is obligated to makethe payments whether or not the Project has come into existence or become functional andwhether or not the Project has ceased to exist or to be functional to any extent and from anycause whatsoever. The Company shall be obligated to make such payments regardless ofwhether the Company is in possession or is entitled to be in possession of the Project or any partthereof. Until such time as the principal of, premium, if any, and interest on, the Bonds has beenfully paid, or provision for the payment thereof has been made as required by the Indenture, theCompany has agreed that it (i) will not suspend or discontinue any payments described above inthis Appendix B under “THE AGREEMENT—Loan of Proceeds; Repayment—Loan Payments andPayment of Other Amounts”; (ii) will perform and observe all of its other covenants contained inthe Agreement; and (iii) except as provided in the provisions of the Agreement relating toprepayment, will not terminate the Agreement for any cause, including, without limitation, theoccurrence of any act or circumstances that may constitute failure of consideration, destructionof or damage to all or a portion of those facilities or equipment comprising the Project,commercial frustration of purpose, any change in the tax or other laws of the United States ofAmerica or of the State or any political subdivision of either of these, or any failure of the Issueror the Trustee to perform or observe any covenant, whether express or implied, or any duty,liability or obligation arising out of or connected with the Agreement or the Indenture, except tothe extent permitted by the Agreement.

Assignment of Issuer’s Rights

As security for the payment of the Bonds, the Issuer will under the Indenture assign to theTrustee the Issuer’s rights under the Agreement (except for the Unassigned Issuer Rights) andthe Note, including the right to receive Loan Payments under the Agreement. The Issuer directsthe Company under the Agreement to make the Loan Payments required under the Agreementdirectly to the Trustee for deposit as contemplated by the Indenture. The Issuer directs theCompany under the Agreement to make the Purchase Price Payments required under theAgreement and payments on the Note directly to the Trustee or the Tender Agent ascontemplated by the Indenture. The Company has consented to such assignment and has agreedunder the Agreement to make payments directly to the Trustee or the Tender Agent, as the casemay be, without defense or set-off by reason of any dispute between the Company and the Issueror the Trustee.

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Special Covenants and Agreements

Right of Access to the Project. The Company agrees that during the term of theAgreement the Issuer, the Trustee, and the duly authorized agents of either of them shall have theright at all reasonable times during normal business hours to enter upon each site where any partof the Project is located and to examine and inspect the Project; provided that reasonable noticeshall be given to the Company at least five (5) Business Days prior to such examination orinspection, and such inspection shall not to disturb the Company’s normal business operations.

Disposition of Project. Except as provided in the Agreement with respect to the portionof the Project comprising equipment, without the prior consent of the Issuer (i) neither Companywill sell, lease or otherwise dispose of, or place any other person in possession of, the Project orany portion thereof or interest therein, or make any material change in the purposes for which theProject is used, and (ii) the portion of the Project comprising equipment will remain at therespective Project sites. Either Company may remove and sell or otherwise dispose of anyportions of the Project comprising equipment when the same has become obsolete, worn out orunnecessary for its business operations.

The Company’s Maintenance of Its Existence. Each Company covenants and agreesunder the Agreement that during the term of the Agreement (i) it will maintain its existence as acorporation in good standing and qualified to do business in the State, and (ii) it will notdissolve, sell or otherwise dispose of all or substantially all of its assets and will not combine orconsolidate with or merge into another entity so that it is not the resulting or surviving entity(any such sale, disposition, combination or merger is referred to hereafter as a “transaction”);provided that it may enter into such transaction, with the prior consent of the Issuer, if (a) thesurviving or resulting transferee, person or entity, as the case may be, assumes and agrees inwriting to pay and perform all of the obligations of such Company under the Agreement, underthe Tax Agreement and on the Note, (b) the surviving or resulting transferee, person or entity, asthe case may be, qualifies to do business in the State and (c) such Company delivers to theTrustee prior to the consummation of the transaction an Approving Opinion.

If a merger, consolidation, sale or other transfer is effected, as described in theimmediately preceding paragraph, all provisions of the Agreement as so described will continuein full force and effect and no further merger, consolidation, sale or transfer will be effectedexcept in accordance with such provisions.

Letter of Credit

The Credit Provider during the initial Interest Rate Period will be JPMorgan Chase Bank.The Company may at any time, at its option, provide for the delivery to the Trustee of a Letter ofCredit or an Alternate Letter of Credit (hereafter collectively referred to in this paragraph as a“Credit Instrument”) and while the Bonds are in a Variable Interest Rate Period the Companywill cause to be delivered an Alternate Letter of Credit at least two (2) Business Days before theexpiration date of any existing Letter of Credit, unless otherwise permitted by the Indenture. ACredit Instrument must be an irrevocable letter of credit or other irrevocable credit facility(including, if applicable, a confirming letter of credit), issued by a Credit Provider, the terms of

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which must be in all material respects the same as the Original Letter of Credit; provided, thatthe expiration date of such Credit Instrument must be a date not earlier than one year less oneday from its date of issuance, subject to earlier termination upon payment of the Bonds in full orprovision for such payment in accordance with the provisions of the Indenture as describedabove in this Appendix B under “THE INDENTURE—Defeasance” through “—Deposit of Moneyor Securities with Trustee.” On or prior to the date of the delivery of a Credit Instrument to theTrustee, the Company must cause to be furnished to the Trustee (i) an opinion of Bond Counselstating to the effect that the delivery of such Credit Instrument to the Trustee is authorized underthe Indenture and complies with the terms of the Agreement and will not in and of itselfadversely affect the Tax-exempt status of interest on the Bonds, (ii) an opinion of counsel to theCredit Provider issuing such Credit Instrument stating to the effect that such Credit Instrument isenforceable in accordance with its terms (except to the extent that the enforceability thereof maybe limited by bankruptcy, reorganization or similar laws limiting the enforceability of creditors’rights generally and except that no opinion need be expressed as to the availability of anydiscretionary equitable remedies), and (iii) written evidence from the Rating Agency that theBonds have a long-term rating of “A” (or equivalent) or higher or, if the Bonds only have ashort-term rating, such short-term rating is to be in the highest short-term rating category(without regard to “+”s or “-”s).

The Company will provide to the Trustee (with a copy to the Issuer) a notice at least 15days prior to the effective date of any Alternate Letter of Credit (and in no event later than 35days prior to the expiration of any existing Letter of Credit) identifying the Alternate Letter ofCredit , if any, and the rating that is expected to apply to the Bonds after the effective date.

Loan Default Events and Remedies

Loan Default Events. Any one of the following which occurs and continues willconstitute a Loan Default Event under the Agreement:

(a) failure of the Company to make any Loan Payment required by theAgreement or under the Note when due; or

(b) failure of the Company to make any Purchase Price Payment required bythe Agreement or under the Note when due; or

(c) failure of either Company to observe and perform any covenant, conditionor agreement on its part required to be observed or performed by the Agreement or underthe Note other than as described in (a) or (b) above, which continues for a period of thirty(30) days after written notice delivered to such Company and the Credit Provider, if any,which notice must specify such failure and request that it be remedied by the Issuer or theTrustee, unless the Issuer and the Trustee agree in writing to an extension of such time;provided, however, that if the failure stated in the notice cannot be corrected within suchperiod, the Issuer and the Trustee will not unreasonably withhold their consent to anextension of such time if corrective action is instituted within such period and diligentlypursued until the default is corrected; or

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(d) the dissolution or liquidation of either Company or the filing by eitherCompany of a voluntary petition in bankruptcy, or failure by either Company promptly tocause to be lifted any execution, garnishment or attachment of such consequence as willimpair such Company’s ability to carry on its obligations under the Agreement, or thecommission by either Company of any act of bankruptcy, or adjudication of eitherCompany as a bankrupt, or if a petition or answer proposing the adjudication of eitherCompany as a bankrupt or its reorganization, arrangement or debt readjustment under anypresent or future federal bankruptcy act or any similar federal or state law is filed in anycourt and such petition or answer is not discharged or denied within ninety (90) days afterthe filing thereof, or if either Company admits in writing its inability to pay its debtsgenerally as they become due, or a receiver, trustee or liquidator of either Company isappointed in any proceeding brought against such Company and is not discharged withinninety (90) days after such appointment or if either Company consents to or acquiesces insuch appointment, or assignment by such Company for the benefit of its creditors, or theentry by either Company into an agreement of composition with its creditors, or abankruptcy, insolvency or similar proceeding is otherwise initiated by or against eitherCompany under any applicable bankruptcy, reorganization or analogous law as now orhereafter in effect and if initiated against such Company remains undismissed (subject tono further appeal) for a period of ninety (90) days; provided, the term “dissolution orliquidation of either Company,” as used in this subsection, should not be construed toinclude the cessation of the existence of a Company resulting either from a merger orconsolidation of such Company into or with another entity or a dissolution or liquidationof such Company following a transfer of all or substantially all of its assets as an entiretyor under the conditions permitting such actions as described above in this Appendix Bunder “THE AGREEMENT—Special Covenants and Agreements—The Company’sMaintenance of Its Existence”; or

(e) the existence of an Event of Default under the Indenture or the Guaranty.

Remedies on Default. Subject to the provisions of the Agreement described in theimmediately preceding paragraph, whenever any Loan Default Event has occurred and iscontinuing,

(a) The Trustee, by written notice to the Issuer, the Company and the CreditProvider, if any, will declare the unpaid balance of the loan payable under the Agreementand on the Note to be due and payable immediately, provided that concurrently with orprior to such notice the unpaid principal amount of the Bonds has been declared to be dueand payable under the Indenture. Upon any such declaration such amount will becomeand will be immediately due and payable as determined in accordance with the Indenture.

(b) The Trustee may have access to and may inspect, examine and makecopies of the books and records and any and all accounts, data and federal income tax andother tax returns of the Company.

(c) Notwithstanding any contrary provision in the Agreement or theIndenture, the Issuer will have the right to take any action or make any decision with

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respect to proceedings for indemnity against the liability of the Issuer and for collectionor reimbursement form sources other than moneys or property held under the Agreementor the Indenture. The Issuer may enforce its rights under the Agreement and theIndenture which have not been assigned to the Trustee by legal proceedings for thespecific performance of any obligation contained in the Agreement or for theenforcement of any other appropriate legal or equitable remedy, and may recoverdamages caused by any breach by the Company of its obligations to the Issuer under theAgreement or the Indenture, including court costs, reasonable attorney’s fees and othercosts and expenses incurred in enforcing such obligations.

(d) The Issuer or the Trustee may take whatever action at law or in equity asmay be necessary or desirable to collect the payments and other amounts then due andthereafter to become due or to enforce performance and observance of any obligation,agreement or covenant of the Company under the Agreement.

(e) If applicable, the Trustee will immediately draw upon any Letter of Credit,if permitted by its terms and required by the terms of the Indenture, and apply the amountso drawn in accordance with the Indenture and may exercise any remedy available to itthereunder.

In case the Trustee or the Issuer has proceeded to enforce its rights under the Agreementand such proceedings have been discontinued or abandoned for any reason or have beendetermined adversely to the Trustee or the Issuer, then, and in every such case, the Company, theTrustee and the Issuer will be restored respectively to their several positions and rights under theAgreement, and all rights, remedies and powers of the Company, the Trustee and the Issuer willcontinue as though no such action had been taken.

The Company covenants that, in case a Loan Default Event occurs with respect to thepayment of any Loan Payment payable under the Agreement or on the Note, then, upon demandof the Trustee, the Company will pay to the Trustee the whole amount that then has become dueand payable under the Agreement or on the Note, with interest on the amount then overdue at therate of seven percent (7%) per annum, following a delinquency of thirty (30) days or longer untilsuch amount has been paid or, if seven percent (7%) per annum is greater than the rate thenpermitted by law, at the greatest rate then permitted.

In case either Company fails to pay such amounts upon such demand, the Trustee shall beentitled and empowered to institute any action or proceeding at law or in equity for the collectionof the sums so due and unpaid, and may prosecute any such action or proceeding to judgment orfinal decree, and may enforce any such judgment or final decree against the Company and collectin the manner provided by law the moneys adjudged or decreed to be payable.

In case proceedings are pending for the bankruptcy or for the reorganization of eitherCompany under the federal bankruptcy laws or any other applicable law, or in case a receiver ortrustee has been appointed for the property of either Company or in the case of any other similarjudicial proceedings relative to either Company, or the creditors or property of either Company,then the Trustee will be entitled and empowered, by intervention in such proceedings or

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otherwise, to file and prove a claim or claims for the whole amount owing and unpaid pursuantto the Agreement and, in case of any judicial proceedings, to file such proofs of claim and otherpapers or documents as may be necessary or advisable in order to have the claims of the Trusteeallowed in such judicial proceedings relative to such Company, its creditors or its property, andto collect and receive any moneys or other property payable or deliverable on any such claims,and to distribute such amounts as provided in the Indenture after the deduction of its reasonablecharges and expenses to the extent permitted by the Indenture. Any receiver, assignee or trusteein bankruptcy or reorganization is authorized under the Agreement to make such payments to theTrustee, and to pay to the Trustee any amount due it for reasonable compensation and expenses,including reasonable expenses and fees of counsel incurred by it up to the date of suchdistribution.

In the event the Trustee incurs expenses or renders services in any proceedings whichresult from a Loan Default Event under the Agreement as described in paragraph (d) above inthis Appendix B under “THE AGREEMENT—Loan Default Events and Remedies—Loan DefaultEvents,” or from any default which, with the passage of time, would become such Loan DefaultEvent, the expenses so incurred and compensation for services so rendered are intended toconstitute expenses of administration under the Bankruptcy Code or equivalent law.

Prepayment

Options to Prepay Installments. The Company has the option to prepay the LoanPayments payable under the Agreement by paying to the Trustee, for deposit in the Bond Fund,the amount described below in this Appendix B under “THE AGREEMENT—Prepayment—Amount of Prepayment” and to cause all or any part of the Bonds to be redeemed at the timesand at the prices set forth in the Indenture if the conditions under the Indenture are met and at thetimes and at the prices set forth in the Indenture and described above in this Official Statementunder “THE BONDS—Redemption—Optional Redemption upon Occurrence of ExtraordinaryEvent,” “—Optional Redemption During Variable Interest Rate Period or on any Interest RatePeriod Effective Date” and “—Optional Redemption During Term Interest Rate Period.”

Mandatory Prepayment. The Company has and accepts the obligation to prepay theLoan Payments required by the Agreement, together with interest accrued, but unpaid, thereonby paying to the Trustee, for deposit in the Bond Fund, the amount described below in thisAppendix B under “THE AGREEMENT—Prepayment—Amount of Prepayment,” to be used toredeem all or a part of the Outstanding Bonds if mandatory redemption is required by theIndenture as described above in this Official Statement under “THE BONDS—Redemption—Mandatory Redemption upon Invalidity or a Determination of Taxability” and “—MandatoryRedemption from Excess Bond Proceeds.”

Amount of Prepayment. In the case of a prepayment of the entire amount due asdescribed in the two immediately preceding paragraphs, the amount to be paid will be a sumsufficient, together with other funds and the yield on any securities deposited with the Trusteeand available for such purpose, to pay (1) the principal of all Bonds Outstanding on theredemption date specified in the notice of redemption, plus interest accrued and to accrue to thepayment or redemption date of the Bonds, plus premium, if any, pursuant to the Indenture, (2) all

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reasonable and necessary fees and expenses of the Issuer, the Trustee and any Paying Agentaccrued and to accrue through final payment of the Bonds and (3) all other liabilities of theCompany accrued and to accrue under the Agreement. In the case of partial prepayment of theLoan Payments, the amount payable will be a sum sufficient, together with other funds depositedwith the Trustee and available for such purpose, to pay the principal amount of and premium, ifany, and accrued interest on the Bonds to be redeemed, as provided in the Indenture, and to payexpenses of redemption of such Bonds.

Non-liability of Issuer

The Issuer is not obligated under the Agreement to pay the principal or Purchase Price of,or premium, if any, or interest on, the Bonds, except from Revenues. The Company hasacknowledged that the Issuer’s sole source of moneys to repay the Bonds will be provided by thepayments made by the Company pursuant to the Agreement, together with other Revenues withrespect to the Bonds, including amounts received by the Trustee under the Guaranty or the CreditFacility, if any, and investment income on certain funds and accounts held by the Trustee underthe Indenture, and agrees that if the payments to be made under the Agreement ever proveinsufficient to pay all principal and Purchase Price of, and premium, if any, and interest on theBonds as the same become due (whether by maturity, redemption, acceleration or otherwise),then upon notice from the Trustee, the Company will pay such amounts as are required fromtime to time to prevent any deficiency or default in the payment of such principal, PurchasePrice, premium or interest, including, but not limited to, any deficiency caused by acts,omissions, nonfeasance or malfeasance on the part of the Trustee, the Company, the Issuer, theCredit Provider, if any, or any third party.

Amendment of Agreement

Except as otherwise provided in the Agreement or the Indenture (including withoutlimitation the provisions of the Indenture described above in this Appendix B under “THE

INDENTURE—Rights of Credit Provider”) the Agreement may not be effectively amended,changed, modified, altered or terminated except by the written agreement of the Issuer and theCompany and with the written consent of the Credit Provider, if applicable, and of the Trustee.Under the terms of the Indenture, the Trustee will give such written consent only if (1) therequirements of the Agreement are met if the change relates to a change in the Project asdescribed above in this Appendix B under “THE AGREEMENT—Issuance of the Bonds;Application of Proceeds,” or (2) in the Opinion of Counsel, such amendment, change,modification, alteration or termination will not materially adversely affect the interests of theBondholders or result in any material impairment of the security given for the payment of theBonds under the Indenture, or (3) the Trustee first obtains the written consent of the Holders of66-2/3% in principal amount of the Bonds then Outstanding to such amendment, change,modification, alteration, or termination, provided that no such amendment, change, modification,alteration or termination will reduce the amount of Loan Payments or Purchase Price Paymentsto be made by the Company pursuant to the Agreement, or extend the time for making suchpayments, without the written consent of all the Holders of the Bonds then Outstanding. TheTrustee will be entitled to rely upon an Opinion of Counsel with respect to the effect of anyamendments to the Agreement.

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GUARANTY AGREEMENT

The following is a summary of certain provisions of the Guaranty. THIS SUMMARY DOES

NOT PURPORT TO BE COMPLETE OR DEFINITIVE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO

THE GUARANTY, COPIES OF WHICH ARE ON FILE WITH THE TRUSTEE.

Guaranty of Payment

For the entire term of the Agreement, the Guarantor has agreed to absolutely andunconditionally guarantee to the Trustee for the benefit of the owners and beneficial owners ofthe Bonds, whether or not upon the dishonor or repudiation of any Letter of Credit then in effect,the full and prompt payment of the amounts set forth above in this Official Statement under thecaption “SECURITY FOR THE BONDS—The Guaranty.” In addition, the Guarantor has agreed tounconditionally guarantee to the Trustee (a) for the benefit of the Trustee, the full and promptpayment of all amounts due or to become due from the Company under the Agreement forpayment of certain fees to the Trustee and (b) for the benefit of the Issuer, the full and promptpayment of all amounts due or to become due from the Company under those sections of theAgreement relating to the Issuer’s fees, attorney’s fees, expenses and indemnification. Suchguaranteed amounts are collectively referred to as the “Guaranteed Obligations.”

Obligations Unconditional

The obligations of the Guarantor under the Guaranty are absolute and unconditional andwill not be impaired, modified, released or limited by any occurrence or condition whatsoever(other than upon the discharge of the lien of the Indenture in accordance with the provisionsthereof as described above in this Appendix B under “THE INDENTURE—Defeasance” through“—Deposit of Money or Securities with Trustee”), including without limitation (a) anycompromise, settlement, release, waiver, renewal, extension, indulgence, change in, amendmentto or modification of any of the obligations and liabilities contained in the Bonds, the Indentureor the Agreement, (b) any impairment, modification, release or limitation of the liability of theIssuer or the Company, or any other security for or guaranty of the Bonds, or any remedy for theenforcement thereof, resulting from the operation of any present or future provision of thefederal bankruptcy laws or other statues or from the decision of any court relating thereto, (c) theassertion or exercise by the Issuer, its successors or assigns, or the Trustee of any rights orremedies under the Indenture, the Loan Agreement or the Guaranty or their delay in asserting orexercising, or failure to assert or exercise, any such rights or remedies, (d) the assignment ormortgaging or the purported assignment or mortgaging of all or any part of the interest of theCompany in the Project, and (e) the purchase or sale of any capital stock of the Company.

Maintenance of Corporate Existence

The Guarantor agrees that during the term of the Guaranty, it will maintain its corporateexistence, will not dissolve or otherwise dispose of all or substantially all of its assets and willnot consolidate with or merge into another corporation unless the acquirer of its assets or thecorporation with which it consolidates or into which it merges assumes in writing all of theobligations of the Guarantor under the Guaranty. Any transfer of all or substantially all of the

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Guarantor’s assets to any of its wholly owned direct or indirect subsidiaries, including theCompany, will not be deemed to constitute a disposition “of all or substantially all of theGuarantor’s assets,” within the meaning of this paragraph. Any such transfer of the Guarantor’sassets will not relieve the Guarantor of any of its obligations under the Guaranty.

Events of Default; Remedies

Each of the following events is an Event of Default under the Guaranty:

(a) Failure of the Guarantor to pay any Guaranteed Obligations upon receiptof demand by the Trustee or the Issuer to the Guarantor given in accordance with theGuaranty.

(b) Failure of the Guarantor to observe or perform any of the other covenants,conditions or agreements under the Guaranty for a period of sixty (60) days after notice(unless the Guarantor and the Trustee and, with respect to payments relating to fees,expenses and indemnification due the Issuer under the Agreement, the Issuer agree inwriting to an extension of such time prior to its expiration), specifying such failure andrequesting that it be remedied, given by the Trustee or the Issuer to the Guarantor;provided, that if said default is such that it can be corrected but cannot be correctedwithin the applicable period, it will not constitute an Event of Default if corrective actionis instituted by the Guarantor within the applicable period and is diligently pursued untilthe default is corrected.

(c) The dissolution or liquidation of the Guarantor or the filing by theGuarantor of a voluntary petition in bankruptcy, or failure by the Guarantor promptly tocause to be lifted any execution, garnishment or attachment of such consequence as willimpair the Guarantor’s ability to carry on its obligations under the Guaranty, or thecommission by the Guarantor of any act of bankruptcy, or adjudication of the Guarantoras a bankrupt, or if a petition or answer proposing the adjudication of the Guarantor as abankrupt or its reorganization, arrangement or debt readjustment under any present orfuture federal bankruptcy act or any similar federal or state law is filed in any court andsuch petition or answer is not discharged or denied within ninety (90) days after the filingthereof, or if the Guarantor admits in writing its inability to pay its debts generally as theybecome due, or a receiver, trustee or liquidator of the Guarantor is appointed in anyproceeding brought against the Guarantor and not discharged within ninety (90) daysafter such appointment or if the Guarantor consents to or acquiesces in such appointment,or assignment by the Guarantor for the benefit of its creditors, or the entry by the Guaran-tor into an agreement of composition with its creditors, or a bankruptcy, insolvency orsimilar proceeding is otherwise initiated by or against the Guarantor under any applicablebankruptcy, reorganization or analogous law as now or hereafter in effect and if initiatedagainst the Guarantor remains undismissed (subject to no further appeal) for a period ofninety (90) days; provided, the term “dissolution or liquidation of the Guarantor,” as usedin this subparagraph (c), will not be construed to include the cessation of the existence ofthe Guarantor resulting either from a merger or consolidation of the Guarantor into orwith another entity or a dissolution or liquidation of the Guarantor following a transfer of

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all or substantially all of its assets as an entirety or under the conditions permitting suchactions contained in the Guaranty and described above in this Appendix B under“GUARANTY AGREEMENT—Maintenance of Corporate Existence.”

(d) If any representation contained in the Guaranty or any financial statementor other information furnished to the Trustee or the Issuer in connection with theGuaranty was false or misleading in any material respect at the time it was made ordelivered.

Whenever an Event of Default under the Guaranty has happened and is continuing,(a) the Trustee in the manner provided in the Indenture may declare the entire unpaid principalof, redemption premium, if any, and interest on the Bonds to be immediately due and payable,and (b) the Trustee may take whatever action at law or in equity as may appear necessary ordesirable to collect payments then due or thereafter to become due under the Guaranty or toenforce observance or performance of any covenant, condition or agreement of the Guarantorunder the Guaranty.

In case the Trustee has proceeded to enforce the Guaranty and such proceedings havebeen discontinued or abandoned for any reason, then and in every such case the Guarantor andthe Trustee will be restored respectively to their several positions and rights under the Guaranty,and all rights, remedies and powers of the Guarantor and the Trustee will continue as though nosuch proceeding had been taken.

Amendment of Guaranty

The Trustee and the Guarantor may, without the consent or notice to the owners orbeneficial owners of the Bonds, enter into any amendment, change or modification of theGuaranty (i) as may be required by the provisions of the Guaranty or the Indenture, (ii) for thepurpose of curing any ambiguity or formal defect or omission, (iii) in connection with anamendment of the Indenture, (iv) to effect any event or purpose for which there could be anamendment of the Indenture without the consent of the owners or beneficial owners of theBonds, or (v) in connection with any other change in the Guaranty which is not in the soledetermination of the Trustee to the material prejudice of the Trustee or the owners or beneficialowners of the Bonds. Except for the amendments, changes or modifications described in thepreceding sentence, the Trustee and the Guarantor may not enter into any other amendment,change or modification of the Guaranty without first mailing notice to, and, subject to theprovisions described above in this Appendix B under “THE INDENTURE—Rights of CreditProvider,” obtaining the written approval or consent of, the owners or beneficial owners of notless than 66-2/3% in aggregate principal amount of the Bonds at the time outstanding; provided,however, that the foregoing does not permit, without the written approval or consent of theowners or beneficial owners of 100% in aggregate principal amount of the Bonds thenoutstanding, an extension of the time of payment of, or a reduction in, any of the GuaranteedObligations or changes the unconditional nature of the Guaranty. In addition, any amendment,change or modification of the Guaranty relating to certain payments due the Issuer under theAgreement relating to fees, expenses and indemnification may only be made with the priorwritten consent of the Issuer.

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APPENDIX C

CERTAIN INFORMATION CONCERNING THE ORIGINAL CREDIT PROVIDER

JPMORGAN CHASE BANK

JPMorgan Chase Bank is a wholly owned bank subsidiary of J.P. Morgan Chase & Co., aDelaware corporation whose principal office is located in New York, New York. JPMorganChase Bank is a commercial bank offering a wide range of banking services to its customers bothdomestically and internationally. Its business is subject to examination and regulation by Federaland New York State banking authorities. JPMorgan Chase Bank resulted from the merger onNovember 10, 2001 of The Chase Manhattan Bank and Morgan Guaranty Trust Company ofNew York. As of September 30, 2002, JPMorgan Chase Bank had total assets of $605.1 billion,total net loans of $175.6 billion, total deposits of $285.7 billion, and total stockholder's equity of$36.0 billion. As of December 31, 2001, JPMorgan Chase Bank had total assets of $537.8billion, total net loans of $174.9 billion, total deposits of $280.5 billion, and total stockholder'sequity of $33.3 billion.

Additional information, including the most recent Form 10-K for the year endedDecember 31, 2001 of J.P. Morgan Chase & Co. (formerly known as “The Chase ManhattanCorporation”), the 2001 Annual Report of J.P. Morgan Chase & Co. and additional annual,quarterly and current reports filed with the Securities and Exchange Commission by J.P. MorganChase & Co., as they become available, may be obtained without charge by each person towhom this Official Statement is delivered upon the written request of any such person to theOffice of the Secretary, J.P. Morgan Chase & Co., 270 Park Avenue, New York, New York10017.

________________________________________

The information contained in this Appendix relates to and has been obtained fromJPMorgan Chase Bank. This data has been taken from the Consolidated Reports of Conditionand Income filed with the Board of Governors of the U.S. Federal Reserve System compiled inaccordance with regulatory accounting principles. The delivery of the Official Statement shallnot create any implication that there has been no change in the affairs of JPMorgan Chase Banksince the date hereof, or that the information contained or referred to in this Appendix is correctas of any time subsequent to its date.

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APPENDIX D

PROPOSED FORM OF OPINION OF BOND COUNSEL

[Closing Date]

New York State EnvironmentalFacilities Corporation625 BroadwayAlbany, New York 12207

Ladies and Gentlemen:

We have examined a record of proceedings relating to the sale and issuance of SolidWaste Disposal Revenue Bonds (Waste Management, Inc. Project) Series 2002B in theaggregate principal amount of $25,000,000 (the “Bonds”) of the New York State EnvironmentalFacilities Corporation (the “Issuer”).

The Bonds are issued under and pursuant to the Constitution and laws of the State of NewYork, particularly the New York State Environmental Facilities Corporation Act, as amended,being Chapter 744 of the Laws of 1970, as amended, and constituting Title 12 of Article 5 of thePublic Authorities Law and Chapter 43-A of the Consolidated Laws of the State of New York(the “Act”) and under and in accordance with an Indenture, dated as of November 1, 2002 (the“Indenture”), between the Issuer and The Bank of New York, as trustee and paying agent (the“Trustee”).

The Bonds are dated the date hereof and mature on May 1, 2019. During the initialWeekly Interest Rate Period interest on the Bonds is payable on the first Business Day of eachmonth, commencing December 2, 2002.

We have also examined a specimen of the Bonds delivered to the Trustee.

We have also examined executed copies of the Indenture and a Loan Agreement dated asof November 1, 2002 (the “Loan Agreement”), made and entered into by and among the Issuerand Waste Management of New York, L.L.C. and USA Waste Services of NYC, Inc.(collectively, the “Borrower”), whereby the Issuer has agreed to cause the proceeds of the Bondsto be applied to the acquisition, construction and installation of the Project (as defined in theLoan Agreement) and the Borrower has agreed to execute and deliver to the Issuer a promissorynote (the “Note”) relating to the Bonds.

The Internal Revenue Code of 1986, as amended (the “Code”), establishes certainrequirements that must be met at and subsequent to the issuance and delivery of the Bonds inorder that interest on the Bonds be and remain not includable in gross income of the Bondholders

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for federal income tax purposes pursuant to Section 103 of the Code. These continuingrequirements include certain restrictions and prohibitions on the use of the proceeds of the Bondsand the project financed thereby, restrictions on the investment of proceeds and other amountsand the rebate to the United States of certain earnings in respect of such investments. Failure tocomply with such continuing requirements may cause interest on the Bonds to be includable ingross income for federal income tax purposes retroactively to the date of issue of the Bondsirrespective of the date on which such noncompliance occurs. The Indenture, the LoanAgreement and the Tax Certificate and Agreement (the “Tax Certificate”) contain covenants,representations and procedures designed to satisfy the requirements of the Code. The opinion ofBond Counsel is made in reliance upon and assumes continuing compliance with such covenantsand procedures and the continuing accuracy, in all material respects, of such representations.However, compliance with certain requirements of the Code may necessitate that persons notwithin the control of the Issuer or the Borrower refrain from taking certain actions. Also, BondCounsel has not undertaken to determine (or to inform any person) whether any actions taken (ornot taken) or events occurring (or not occurring) after the date of issuance of the Bonds mayadversely affect the value of, or the tax status of interest on, the Bonds.

Certain requirements and procedures contained or referred to in the Indenture, the LoanAgreement, the Tax Certificate and other relevant documents and certificates may be changedand certain actions (including, without limitations, defeasance of the Bonds) may be takensubsequent to the date of issue, under the circumstances and subject to the terms and conditionsset forth in such documents or certificates, upon the advice or with the approving opinion ofnationally recognized bond counsel. Winston & Strawn expresses no opinion as to any Bond orthe interest thereon if such change occurs or action is taken or omitted upon the advice orapproval of bond counsel other than Winston & Strawn.

We are of the opinion that:

1. The Issuer is a body corporate and politic constituting a public benefit corporation,and is duly created and validly existing under the Constitution and laws of the State of NewYork, including particularly the Act, and has the right and lawful authority to issue the Bonds forthe purpose of financing the acquisition, design, construction and installation of the Project ascontemplated by the Loan Agreement and the Indenture, to receive and pledge the revenues andreceipts derived pursuant to the Loan Agreement in accordance with the terms of the LoanAgreement and as provided in the Indenture and to secure the Bonds in the manner contemplatedby the Indenture.

2. The Issuer has the right and power pursuant to the Act to enter into and perform itsobligations under the Indenture and the Indenture has been duly authorized, executed anddelivered, is in full force and effect and constitutes a legal, valid and binding obligation of theIssuer enforceable in accordance with its terms.

3. The Issuer has the right and power pursuant to the Act to enter into and perform itsobligations under the Loan Agreement, and the Loan Agreement has been duly authorized,executed and delivered, is in full force and effect and constitutes a legal, valid and bindingagreement between the parties thereto enforceable in accordance with its terms. Those rights and

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interests of the Issuer under the Loan Agreement assigned and pledged by the Issuer to theTrustee as further security for the Bonds have been duly and legally assigned and pledged.

4. Those rights and interests of the Issuer under the Note assigned and pledged by theIssuer to the Trustee as security for payments under the Note have been duly and legally assignedand pledged.

5. The Issuer has the right and power pursuant to the Act to enter into and perform itsobligations under the Tax Certificate, and the Tax Certificate has been duly authorized, executedand delivered, is in full force and effect and constitutes a legal, valid and binding agreementamong the parties thereto enforceable in accordance with its terms. Those rights and interests ofthe Issuer under the Tax Certificate assigned by the Issuer to the Trustee for the benefit of theBondholders have been duly and legally assigned.

6. The Bonds have been duly authorized, executed and delivered and issued by theIssuer in accordance with the Indenture and the Constitution and the laws of the State of NewYork, including the Act. The Bonds are valid and legally binding special obligations of theIssuer, secured by the Indenture, and are payable as to principal, premium, if any, and interestfrom, and are secured by a valid lien on and pledge of, the Note, the payments by the Borrowerof principal, premium, if any, and interest thereon, and other moneys held by the Trustee underthe Indenture and available therefor, all in the manner provided in the Indenture. The Bonds areenforceable in accordance with their terms and the terms of the Indenture and are entitled to thebenefits of the Act and the Indenture. All conditions precedent to the delivery of the Bonds havebeen fulfilled.

7. Under existing statutes, regulations, rulings and court decisions and assumingcontinuing compliance by the Issuer and the Borrower (and their successors) with the covenantsand procedures and the continuing accuracy of the representations and certifications referencedabove, interest on the Bonds is not includable in gross income for federal income tax purposes,except for any interest on any Bond for any period during which such Bond is held by a personwho is a “substantial user” of the facilities financed with the proceeds of the Bonds, or a “relatedperson,” as defined in Section 147(a) of the Code. Interest on the Bonds constitutes an “item oftax preference” for purposes of the federal alternative minimum tax on individuals andcorporations.

8. Under existing law, by virtue of the Act, interest on the Bonds is exempt frompersonal income taxes imposed by the State of New York or any political subdivision thereof(including The City of New York).

The opinions set forth in paragraphs 2 through 6 above are qualified only to the extentthat the enforceability of the Bonds, the Indenture, the Tax Certificate, the Note and the LoanAgreement may be limited by applicable bankruptcy, insolvency, moratorium, reorganization orother laws or judicial decisions or principles of equity relating to or affecting the enforcement ofcreditors’ rights or contractual obligations generally.

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In rendering the opinions set forth in paragraphs 3, 4 and 5 above, we have relied withyour approval upon the opinion of in-house counsel to the Borrower, dated as of the date hereof,with respect to the due authorization, execution and delivery of the Loan Agreement, the TaxCertificate and the Note by the Borrower.

In rendering the foregoing opinions we have made a review of such legal proceedings aswe have deemed necessary to approve the legality and validity of the Bonds. In rendering theforegoing opinions we have not been requested to examine any document or financial or otherinformation concerning the Issuer, the Borrower or the Project other than the record ofproceedings referred to above, and we express no opinion as to the accuracy, adequacy orsufficiency of any financial or other information which has been or will be supplied topurchasers of the Bonds.

Our opinions set forth herein are based upon the facts in existence and the laws in effecton the date hereof and we disclaim any obligation to update our opinions herein, regardless ofwhether changes in such facts or laws come to our attention after the delivery hereof.

Very truly yours,