NEW ISSUE - BOOK ENTRY MOODY'S INVESTOR SERVICES RATING: "Aaa"/"VMIG 1" In the opinion of Kutak Rock LLP, Bond Counsel, based on existing laws, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel is also of the opinion that interest on the Bonds is exempt from current State of California personal income taxes. Bond Counsel expresses no opinion regarding other tax consequences related to the ownership or disposition of or the accrual or receipt ofinterest on, the Bonds. For a more complete description, see "TAX MATTERS" herein. $7,000,000 California Infrastructure and Economic Development Bank Variable Rate Demand Revenue Bonds (Southern California Public Radio Project), Series 2005 (DTC Book-Entry Only) Dated: Date of Issue Maturity Date: September 1, 2025 The California Infrastructure and Economic Development Bank (the "Issuer") is offering $7,000,000 of its Variable Rate Demand Revenue Bonds (Southern California Public Radio Project), Series 2005 (the "Bonds"). The Bonds are issuable in fully registered form in denominations of $100,000 or in any greater multiple of $5,000 prior to the commencement of the Fixed Letter of Credit Rate Period. It is expected that the Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York ("OTC"). Purchasers of the Bonds will not receive physical delivery of bond certificates. Ownership by the beneficial owners of the Bonds will be evidenced by book-entry only. As long as Cede & Co. is the registered owner of the Bonds as nominee of OTC, payments of principal, interest and premium, if any, will be made directly to Cede & Co., which in turn will remit such payment to the OTC Participants for subsequent disbursement to beneficial owners. See "DESCRIPTION OF BONDS-Bonds in Book-Entry Form Only." The Bonds will bear interest at a Variable Rate determined daily, weekly or monthly in the manner described herein (see "DESCRIPTION OF BONDS-Variable Rate") until converted to a Fixed Rate (see "DESCRIPTION OF BONDS-Conversion to Fixed Interest Rate"). The interest rate will initially be determined daily. While the Bonds bear interest at a Variable Rate, the Bonds are subject to purchase at the demand of the owners. See "DESCRIPTION OF BONDS-Optional Tender." IF THE INTEREST RATE ON THE BONDS IS CONVERTED FROM AVARIABLE RATE TO A FIXED RATE, THE BONDS ARE SUBJECT TO A MANDATORY TENDER. See "DESCRIPTION OF BONDS-Conversion to Fixed Interest Rate." Interest is payable (a) during the Variable Rate Period, monthly on the first Business Day of each month beginning October 3, 2005; (b) on any Conversion Date; (c) on any Redemption Date; and (d) during the Fixed Rate Period, if any, semiannually on the first day of each March and' September. Interest, principal and premium, if any, will be paid through Wells Fargo Bank, National Association, as Trustee (the "Trustee"). The payment of principal of, purchase price of and interest on, the Bonds is subject to certain risks. See "INVESTMENT CONSIDERATIONS" in this Official Statement. NEITHER THE STATE OF CALIFORNIA, THE ISSUER, NOR ANY POLITICAL SUBDIVISION NOR AGENCY OF THE STATE OF CALIFORNIA SHALL BE OBLIGATED TO PAY THE BONDS OR THE INTEREST THEREON. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION NOR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, PURCHASE PRICE OF, OR INTEREST ON, THE BONDS. NEITHER THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA IS IN ANY MANNER OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE ISSUER HAS NO TAXING POWER. THE BONDS, TOGETHER WITH THE INTEREST AND PREMIUM (IF ANY) THEREON AND THE PURCHASE PRICE THEREOF, SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA. The Bonds have been authorized by the Issuer for the purpose of providing financing to Southern California Public Radio (the "Borrower") for the acquisition of real property and the improvements thereon and for the rehabilitation of such improvements located in Pasadena, California. The Bonds will be secured by: (a) a Letter of Credit; (b) loan payments required to be made by the Borrower under the Loan Agreement; (c) a Guaranty provided by American Public Media Group ("APMG"), the Borrower's parent corporation, whereby APMG guarantees the payment of amounts due from the Borrower under the Loan Agreement; and ( d) moneys and securities held from time to time by the Trustee under the Indenture. The Letter of Credit will be issued by: ALLIED IRISH BANKS, p.l.c., acting through its New York Branch The Letter of Credit expires on September 8, 2008, unless renewed or extended according to its terms. The Letter of Credit may be replaced at any time by a renewal, substitute or replacement letter of credit from either Allied Irish Banks, p.l.c., acting through its New York Branch (the "Bank), or another financial institution, as described under the heading "ALTERNATE LETTER OF CREDIT." The Bonds are offered on the basis of their support by the Letter of Credit and the Guaranty and not on the basis of the financial strength of the Borrower. The Bonds are subject to redemption prior to maturity as described under "REDEMPTION OF BONDS PRIOR TO MATURITY'' herein. The Bonds may also become due in advance of their stated maturities as a result of a default under the Reimbursement Agreement pursuant to which the Letter of Credit is issued as described under the heading "THE REIMBURSEMENT AGREEMENT." The Bonds are offered when, as and if issued by the Issuer and accepted by Piper Jaffray & Co., Minneapolis, Minnesota (the "Underwriter"), subject to prior sale, the withdrawal or modification of the offer without notice, and certain other conditions including the approval of legality by Kutak Rock, LLP Pasadena, California, Bond Counsel. The validity of the Letter of Credit will be passed upon for the Bank by Schiff Hardin LLP, Chicago, Illinois, counsel to the Bank, and by the Bank's legal department. Certain matters will be passed upon by Rodriguez, Horii & Choi LLP, Los Angeles, California and Faegre & Benson LLP, Minneapolis, Minnesota, counsel for the Borrower. It is expected that delivery of the Bonds will be made in a form acceptable to OTC on or about September 8, 2005 (the "Closing Date") against payment therefor. For information with respect to the Underwriter and its compensation, see "UNDERWRITING" herein. PIPER JAFFRAY & CO.

September 8, 2005 t. •

No dealer, broker, salesman or other person has been authorized by the Issuer, the Bank or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth in Appendix A has been obtained from the Borrower and the information set forth in Appendix B has been obtained from the Bank. Other information set forth herein has been obtained from the Borrower and sources which are believed to be reliable. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the parties referred to above or that the other information or opinions are correct as of any time subsequent to the date of this Official Statement. TABLE OF CONTENTS

INTRODUCTION ...... 1 Events of Default...... 18 INVESTMENT CONSIDERATIONS ...... 2 Remedies ...... 19 Inability To Obtain Alternate Letter of Credit ...... 2 Damage, Destruction and Condemnation ...... 19 Mandatory and Optional Redemption or Tender Amendments, Changes and Modifications ...... 19 for Purchase Prior to Maturity ...... 2 Alterations to the Project and Removal of Effect of Bankruptcy on Security for the Bonds ...... 3 Equipment ...... 19 Determination of Taxability ...... 3 Taxes and Other Governmental Charges ...... 19 Certificate of Compliance and Other Reports ...... 20 THE ISSUER...... 4 Indemnity ...... 20 DESCRIPTION OF BONDS ...... 4 General Terms ...... 4 THE GUARANTY ...... 20 Bonds in Book-Entry Form Only ...... 5 THE INDENTURE ...... 20 Successor Securities Depository; Discontinuation Pledge by Issuer ...... 20 of Book-Entry System ...... 7 Construction Fund ...... 21 Variable Rate ...... 7 Bond Fund ...... 21 Conversion to Fixed Interest Rate ...... 8 Costs oflssuance Fund...... 21 Payment of Interest on the Bonds ...... 9 Bond Purchase Fund...... 21 Optional Tender ...... 9 Investment of Funds ...... 21 Mandatory Tender ...... 10 Discharge of Lien oflndenture...... 22 Remarketing Agent ...... 10 Events of Default...... 22 Source of Payment and Security ...... 10 Remedies ...... 22 Rights and Remedies of Bondholders ...... 23 SOURCES AND USES OF FUNDS ...... 11 Application of Moneys ...... 23 REDEMPTION OF BONDS PRIOR TO MATURITY ...... 11 Waiver of Events of Default ...... 23 In General ...... 11 The Trustee ...... 23 Notice and Effect ofRedemption ...... 11 The Remarketing Agent ...... 24 Optional Redemption ...... 12 Supplemental Indentures ...... 24 Mandatory Redemption Prior to Expiration of Rights of Borrower and Bank ...... 24 Letter of Credit ...... 12 Amendments, Changes and Modifications of Partial Redemption ...... 12 Loan Agreement ...... 24 Expected Amortization ...... 13 Ownership of Bonds ...... 25 THE LETTER OF CREDIT ...... 13 TAX MATTERS ...... 25 ALTERNATE LETTER OF CREDIT ...... 14 LEGAL MATTERS ...... 26 THE REIMBURSEMENT AGREEMENT ...... 15 UNDERWRITING AND REMARKETING ...... 26 THE LOAN AGREEMENT ...... 16 NO CONTINUING DISCLOSURE...... 27 General ...... 16 RATING ...... 27 Payment of Project Costs ...... 16 MISCELLANEOUS ...... 27 Term of Loan Agreement...... 17 APPENDIX A THE BORROWER, THE GUARANTOR Basic Payments ...... 17 AND THE PROJECT ...... 1 Additional Charges ...... 17 APPENDIX B THE BANK ...... 1 Prepayment ofBonds ...... 17 APPENDIX C DEFINITIONS Termination of the Loan Agreement ...... 17 Loss of Tax Exemption ...... 18 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HA VE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939 IN RELIANCE UPON CERTAIN EXEMPTIONS SET FORTH IN SUCH ACTS. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS WHEREIN THESE SECURITIES HA VE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THESE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON, OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 1 j

OFFICIAL STATEMENT

$7,000,000 California Infrastructure and Economic Development Bank Variable Rate Demand Revenue Bonds (Southern California Public Radio Project), Series 2005 (DTC Book-Entry Only)

INTRODUCTION

This Official Statement is furnished by Southern California Public Radio, a Minnesota nonprofit corporation (the "Borrower"), to set forth information concerning the above captioned issue of bonds (the "Bonds") to be issued by the California Infrastructure and Economic Development Bank (the "Issuer").

The Bonds are authorized to be issued pursuant to Division 1 of Title 6.7 of the California Government Code (commencing with Section 63000), as now in effect (the "Act"), and will be issued under an Indenture of Trust dated as of September 1, 2005 (the "Indenture") between the Issuer and Wells Fargo Bank, National Association, as trustee (the "Trustee"). The Trustee will initially be the registrar and paying agent for the Bonds.

Prior to the issuance of the Bonds, the Issuer and the Borrower will enter into a Loan Agreement dated as of September 1, 2005 (the "Loan Agreement"). The Loan Agreement requires the loan of the Bond proceeds to the Borrower for the purpose of financing costs of the Project hereinafter described.

To further secure the Bonds, an irrevocable letter of credit (the "Letter of Credit'') will be issued by Allied Irish Banks, p.l.c., acting through its New York Branch (the "Bank"), and delivered to the Trustee pursuant to which the Trustee is permitted to draw up to (a) an amount sufficient to pay the principal of the Bonds or to pay the purchase price of the Bonds delivered to it for purchase, plus (b) an amount equal to 45 days' accrued interest on the outstanding Bonds assuming an interest rate of 10%. The Letter of Credit will be issued pursuant to a Reimbursement Agreement (the "Reimbursement Agreement") between the Bank and the Borrower. Throughout this Official Statement, wherever required by the context, the terms "Letter of Credit," "Bank" and "Reimbursement Agreement" also refer to an Alternate Letter of Credit (as defined herein), the issuer thereof and the agreement pursuant to which it is issued.

The Bonds will also be secured by a Guaranty (the "Guaranty") provided to the Trustee by American Public Media Group, the Borrower's parent company ("APMG"). Under the Guaranty, APMG will unconditionally guarantee the payment of amounts due from the Borrower under the Loan Agreement on account of the principal, interest and purchase price, if any, due on the Bonds if, for whatever reason, amounts paid under the Letter of Credit and from the Borrower are not sufficient for that purpose.

NEITHER THE STATE OF CALIFORNIA, THE ISSUER, NOR ANY POLITICAL SUBDIVISION NOR AGENCY OF THE STATE OF CALIFORNIA SHALL BE OBLIGATED TO PAY THE BONDS OR THE INTEREST HEREON. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, PURCHASE PRICE OF, OR INTEREST ON, T~E BONDS. NEITHER THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA IS IN ANY MANNER OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE ISSUER HAS NO TAXING POWER. THE BONDS, TOGETHER WITH THE

1 I I

INTEREST AND PREMIUM (IF ANY) THEREON AND THE PURCHASE PRICE THEREOF, SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA.

THE BONDS ARE OFFERED ON THE BASIS OF THEIR SUPPORT BY THE LETTER OF CREDIT AND THE GUARANTY AND ARE NOT OFFERED ON THE BASIS OF THE FINANCIAL STRENGTH OF THE BORROWER. SEE "THE LETTER OF CREDIT" AND "THE GUARANTY" HEREIN.

This Official Statement contains brief descriptions of the Borrower, the Project, the Bonds, the Letter of Credit, the Reimbursement Agreement, the Loan Agreement, the Indenture and the Guaranty. The descriptions and summaries herein do not purport to be comprehensive or definitive and reference is made to each document for the complete details of all terms and conditions. Terms not defined herein will have the meanings set forth in Appendix C attached hereto. All statements herein are qualified in their entirety by reference to each such document. See "MISCELLANEOUS" herein for information regarding availability of the documents.

The information in this Official Statement is applicable to the Bonds only prior to the Conversion Date, as described below under "DESCRIPTION OF BONDS-Conversion to Fixed Interest Rate."

INVESTMENT CONSIDERATIONS

No person should purchase any Bonds without carefully reviewing the following information which summarizes some, but not all, of the risks associated with such purchase.

Inability To Obtain Alternate Letter of Credit

The Initial Letter of Credit expires on September 8, 2008. No assurances can be given that the Borrower will be able to obtain extensions or renewals of the Letter of Credit or obtain a subsequent Alternate Letter of Credit to secure the Bonds at their stated interest rates and original terms until and including the Maturity Dates. Failure to obtain a renewal or extension of the Initial Letter of Credit or any Alternate Letter of Credit to secure the Bonds will result in a mandatory redemption of the Bonds prior to maturity. See "REDEMPTION OF BONDS PRIOR TO MATURITY-Mandatory Redemption Prior to Expiration of Letter of Credit."

Mandatory and Optional Redemption or Tender for Purchase Prior to Maturity

In considering whether the Bonds might be redeemed or subject to a mandatory tender prior to maturity, Holders of Bonds should consider the information included in this Official Statement under the heading "REDEMPTION OF BONDS PRIOR TO MATURITY." The Bonds may be called for redemption prior to maturity at the option of the Borrower, with the prior written consent of the Bank, at any time upon 35 days' notice. The Bonds will also be called for redemption prior to maturity: (a) if the Borrower fails to deliver an extension or renewal of the existing Letter of Credit or a commitment for an Alternate Letter of Credit to the Trustee at least 35 days prior to the date on which the Letter of Credit expires, or (b) the Borrower fails to deliver the Alternate Letter of Credit to the Trustee at least 10 days prior to the date on which the Letter of Credit expires after a commitment to deliver such Alternate Letter of Credit has been delivered to the Trustee. See "REDEMPTION OF BONDS PRIOR TO MATURITY."

2 In addition, the Bonds will be called for mandatory tender on the Conversion Date and upon a Determination of Taxability. The effect of a mandatory tender on Holders of Bonds would be similar to that of early redemption at par. See "INVESTMENT CONSIDERATIONS-Determination of Taxability," "DESCRIPTION OF BONDS-Conversion to Fixed Interest Rate" and "DESCRIPTION OF BONDS-Mandatory Tender."

Upon: (a) default in the due and punctual payment of interest on any Bond; (b) default in the due and punctual payment of the principal of any Bond at its maturity; ( c) default in the due and punctual payment of the purchase price of Bonds tendered for purchase pursuant to the Indenture; ( d) receipt by the Trustee of written notice from the Bank of an event of default under the Reimbursement Agreement; and ( e) receipt by the Trustee following a draw under the Letter of Credit to pay interest on the Outstanding Bonds of written notice from the Bank that the amount available to be drawn under the Letter of Credit with respect to interest will not be reinstated in full, the Maturity Date of the Bonds will be accelerated and the Bonds will be called for payment. The effect of such an acceleration on Holders of Bonds would be similar to that of early redemption at par.

As provided in the Reimbursement Agreement an.d the Indenture, under certain circumstances, the Bank has the right, in its sole discretion, to require that the Bonds be accelerated. The effect on Holders of Bonds of such an acceleration would be similar to that of early redemption at par. See "THE REIMBURSEMENT AGREEMENT."

Effect of Bankruptcy on Security for the Bonds

Bankruptcy proceedings and equity principles may delay or otherwise adversely affect the ability of the Trustee to obtain amounts required to be paid pursuant to the Letter of Credit or the enforcement of Bondholders' rights in the property granted as security for the Bonds. Remedies under the Letter of Credit and the Indenture may not be readily available or may be limited under existing law. Furthermore, if the security for the Bonds is inadequate for payment in full of the Bonds, bankruptcy proceedings and usual equity principles may also limit any attempt by the Trustee to seek payment from other property of the Borrower or Guarantor, if any. Also, federal bankruptcy law permits adoption of a reorganization plan even though it has not been accepted by the Holders of a majority in aggregate principal amount of the Bonds, if the Bondholders are provided with the benefit of their original lien or its "indubitable equivalent." In addition, if the bankruptcy court concludes that the Bondholders have "adequate protection," it may (a) substitute other security subject to the lien of the Bondholders; and (b) subordinate the lien of the Bondholders (i) to claims by persons supplying goods and services to the Borrower after bankruptcy, and (ii) to the administrative expenses of the bankruptcy proceeding. The bankruptcy court may also have the power to invalidate certain provisions of the Letter of Credit and Loan Agreement that make bankruptcy and related proceedings by the Borrower an event of default thereunder.

Determination of Taxability

Bonds are subject to mandatory tender on the first day for which proper notice can be given after a Determination of Taxability. A Determination of Taxability may not occur for a substantial period of time after interest first becomes includible in the gross income of owners of the Bonds. In such event, the tax liability of owners of the Bonds may extend to years for which interest was received on the Bonds and for which the relevant statute of limitations has not yet run. See "TAX EXEMPTION" herein. The Letter of Credit does not provide any coverage for any tax liability of owners of the Bonds.

A Determination of Taxability occurs upon a determination that interest income on any Bond is includable in gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended. Such a determination will be deemed made upon the occurrence of any of the

3 •

following: (a) a final decree or judgment of any federal court, not subject to appeal, or a final action of the Internal Revenue Service, not subject to appeal, that determines that interest paid or payable on any Bonds is or was includable in the gross income of an owner for federal income tax purposes; (b) the receipt by any present or former owner of a Bond, the Trustee, the Borrower or the Issuer of a "notice of deficiency" issued by the Internal Revenue Service or any similar notice assessing or expressing an intention to assess a tax in respect of any interest on the Bonds, if no longer subject to any contest or appeal; or (c) the execution of a settlement agreement between the Internal Revenue Service and any present or former owner, the Trustee, the Borrower or the Issuer under which a tax, penalty or interest in respect of any interest on the Bonds is to be assessed (other than an agreement pursuant to which the Bonds at issue will continue to be tax-exempt Bonds); however, no such decree, action, agreement or notice will be considered a "Determination of Taxability" unless the Issuer and the Borrower have been given written notice and, if it is so desired and is legally allowed, the Issuer has been afforded the opportunity to contest the same, either directly or in the name of any owner of a Bond, and until conclusion of any appellate reviews, including judicial decisions and appeals therefrom as may be sought and legally available.

Neither the Bonds, the Loan Agreement, the Indenture nor any other document provides for the payment of any premium or penalty by any person as a result of the occurrence of a Determination of Taxability. Upon a Determination of Taxability, affected Holders of the Bonds may have legal rights to damages or other remedies, depending upon the circumstances. Holders of Bonds are advised to consult their own legal and tax advisors with regard to the possible effect of a Determination ofTaxability in their case.

THE ISSUER

The Issuer is an entity within the Business, Transportation and Housing Agency of the State of California (the "State"), duly organized and validly existing under the laws of the State. The Bonds are authorized and issued by the Issuer pursuant to the Act and pursuant to a resolution adopted by the governing body of the Issuer.

The Bonds will be issued as special, limited obligations of the Issuer under and pursuant to the Act, payable solely from pledged revenues as described herein and shall never constitute the debt or indebtedness of the Issuer, the State of California or any subdivision of the Issuer or the State, or a charge against the general credit or taxing powers of any of them. The Bonds shall not constitute an indebtedness, pecuniary liability, general or moral obligation or pledge of the faith or credit of any taxing power of the United States of America or any agency thereof.

DESCRIPTION OF BONDS

General Terms

The Bonds mature on September 1, 2025, subject to prior redemption, and are further subject to mandatory tender if and when the interest rate on the Bonds is converted from a Variable Rate to a Fixed Rate. Interest payments on the Bonds commence on October 3, 2005.

The person in whose name a Bond is registered (the "Holder" or "Registered Holder") will be deemed the Holder thereof for all purposes of the Indenture, except that interest will be paid on each Interest Payment Date, as defined below, to the Registered Holder determined as of the business day immediately preceding the Interest Payment Date. See "DESCRIPTION OF BONDS-Bonds in Book­ Entry Form Only."

4 )'

Denominations; Transfer of Bonds. The Bonds are issuable as fully registered bonds in denominations of $100,000 each or any greater integral multiple of $5,000 prior to the commencement of the Fixed Letter of Credit Rate Period and on and after the commencement of the Fixed Letter of Credit Rate Period, $5,000 or integral multiples thereof. The Bonds are transferable or exchangeable for Bonds of different Authorized Denominations upon presentation at the principal corporate trust office of the Trustee duly endorsed and accompanied by a written instrument or instruments of transfer acceptable to the Trustee. Except in connection with the tender of Bonds for purchase on a tender date, the Trustee will not be required to transfer or exchange any Bond during the 10 days immediately preceding the first publication or mailing (if there is no publication) of any redemption notice or transfer or exchange any Bond so selected for redemption. Any Holder requesting any registration or transfer or exchange of Bonds will pay any resulting tax or other governmental charge. In the event any Bond is mutilated, lost, stolen or destroyed, the Issuer may execute and the Trustee may authenticate a new Bond of like date, maturity and denomination in accordance with the provisions therefor in the Indenture, and the Issuer and the Trustee may charge the Holder of such Bond with their reasonable fees and expenses and may also require satisfactory indemnity in the case of Bonds lost, stolen or destroyed.

Manner of Payment. Except in the case of interest in default, interest will be paid on each Interest Payment Date by check drawn by the Trustee payable to the order of the persons in whose names the Bonds were registered at the close of business on the record date for such interest. The record date for each Interest Payment Date during the Variable Rate Period will be the Business Day immediately preceding such Interest Payment Date. Interest in default will be paid on the dates and by reference to record dates selected by the Trustee in its discretion. Principal of and premium, if any, on the Bonds payable at maturity or upon proceedings for redemption thereof will be payable to the registered owners thereof upon presentation and surrender of the Bonds at the Trustee's principal office.

Optional and Mandatory Tenders. The purchase price of Bonds subject to tender for purchase on a tender date will be payable only upon delivery of such Bonds to the Trustee on or after the Tender Date.

Selection of Bonds for Redemption. If less than all Outstanding Bonds are to be redeemed, the particular Bonds or portions thereof to be redeemed will be selected by the Trustee by lot or by such other random means as the Trustee will determine in its discretion. Bonds are subject to redemption in part, in multiples of $5,000.

Bonds in Book-Entry Form Only

The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities in the name of Cede & Co. (DTC's partnership nominee). One fully registered Bond certificate will be issued in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. "Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York

5 Stock Exchange, Inc., the American Stock Exchange; Inc. and the National Association ·of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of 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 Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership; DTC has no knowledge of the actual Beneficial Owners of the Bonds. DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices will be sent to Cede & Co. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither OTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual procedures, OTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.' s consenting or voting rights ·to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not ofDTC, the Trustee or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

6 A Beneficial Owner will give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Remarketing Agent, and will effect delivery of such Bonds by causing the Direct Participant to transfer the Participant's interest in the Bonds, on DTC 's records, to the Remarketing Agent. The requirement for physical delivery of Bonds in connection with a demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC's records.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered.

The preceding information in this Section concerning DTC and DTC's book-entry system has been obtained from sources that the Borrower believes to be reliable.

So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to Holders as registered owner of the Bonds will mean DTC or its nominee, Cede & Co., and will not mean the Beneficial Owners of the Bonds. Beneficial Owners of the Bonds may desire to make arrangements with a Direct Participant or an Indirect Participant so that all notices of redemption of Bonds or other communications to DTC which affect such Beneficial Owner, and notification of all interest payments, will be forwarded in writing by the Direct Participant or Indirect Participant. No failure of DTC to advise any Direct Participant, or of any Direct Participant or Indirect Participant to advise a Beneficial Owner, of any notice of redemption or its content or effect will affect the validity of the redemption of the Bonds called for redemption or any other action premised on such notice.

Successor Securities Depository; Discontinuation of Book-Entry System

In the event that: (a) the Issuer or the Borrower determines that DTC is incapable of discharging its responsibilities described in the Indenture and in the initial Blanket Letter of Representations from the Issuer and accepted by DTC (the "Representation Letter"); (b) the Representation Letter will be terminated for any reason; or ( c) the Issuer or the Borrower determines that it is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certificated bonds, the Issuer will notify DTC of the availability through DTC of Bonds certificates and the Bonds will no longer be restricted to being registered on the Bond Register in the name of Cede & Co., as nominee of the DTC. At that time, the Issuer may determine that the Bonds will be registered in the name of and deposited with the successor depository operating a securities depository system, as may be acceptable to the Issuer, or such depository's agent or designee, or if the Issuer does not select such an alternate securities depository system then the Bonds may be registered in whatever name or names Registered Owners of Bonds transferring or exchanging Bonds will designate, in accordance with the provisions of the Indenture.

Variable Rate

For the period beginning on the date of first authentication and delivery to the Conversion Date (the "Variable Rate Period"), the Bonds will bear interest at a Variable Rate in effect from time to time. The Variable Rate will be the Daily Interest Rate, Weekly Interest Rate or Monthly Interest Rate. The Borrower will have the option to convert the Variable Rate from one interest mode to another as described in this Official Statement. The initial Variable Rate for the Bonds will be a Daily Interest Rate.

7 The Daily Interest Rate will be determined· by the Remarketing Agent on each Business Day ( each a "Daily Rate Determination Date"), effective for such Business Day and any additional period until the commencement of the next succeeding Business Day. If for any reason the Daily Interest Rate is not determined on a Daily Rate Determination Date, the Daily Interest Rate will be 130% of the tax-exempt seven-day variable rate index most recently published by Kenny Information Service.

The Weekly Interest Rate will be determined by the Remarketing Agent on Wednesday of each week, or, if such Wednesday is not a Business Day, then on the next succeeding Business Day (each a "Weekly Rate Determination Date"). Each Weekly Interest Rate so determined will be effective for the period from and including Thursday ( or, if not a Business Day, the next succeeding Business Day) in each week, to but not including Thursday ( or, if not a Business Day, the next succeeding Business Day) in the following week. If for any reason the Weekly Interest Rate is not determined on a Weekly Interest Rate Determination Date, the Weekly Interest Rate will be 130% of the tax-exempt seven-day variable rate index most recently published by Kenny Information Service.

The Monthly Interest Rate will be determined by the Remarketing Agent on the Business Day preceding the first Business Day of each month ( each, a "Monthly Rate Determination Date") and on each Monthly Rate Determination Date thereafter, effective for the period from and including the first Business Day of each month until, but not including, the first Business Day of the next month. In the event for any reason, a Monthly Interest Rate is not determined on a Monthly Rate Determination Date, the Monthly Interest Rate until the next Monthly Rate Determination Date will be 130% of the tax-exempt seven-day variable rate index published by Kenny Information Services.

If the interest rate payable on the Bonds is converted to a Fixed Rate, the Bonds will continue to bear interest at a Variable Rate only to but not including the Conversion Date.

On the basis of the Variable Rate, the Trustee will calculate the amount of interest payable on the Bonds on each applicable Interest Payment Date and pay the interest by check or draft of the Trustee mailed to the Holders thereof as of the applicable Record Dates, or by wire transfer at the written request of any Holder of not less than $500,000 aggregate principal amount of Bonds. The Variable Rate determined by the Remarketing Agent will be the interest rate which, when borne by the Bonds, would equal the interest rate necessary to enable the Remarketing Agent to sell the Bonds on any Rate Determination Date at 100% of the principal amount thereof plus accrued interest, provided the Variable Rate will not exceed 10% per annum.

While the Bonds bear interest at a Variable Rate, interest will be calculated on the basis of 365- or 366-day year for the actual number of days elapsed.

While the Bonds bear interest at a Variable Rate, Holders of Bonds may put their Bonds to the Trustee for purchase. See "DESCRIPTION OF BONDS-Purchase of Bonds at Option of Owner."

During the Variable Rate Period, the Bonds are subject on any Interest Payment Date to a change of interest mode, upon the election of the Borrower, with the consent of the Bank, provided (a) notice is given to the Trustee, and (b) an opinion of Bond Counsel is delivered to the effect that conversion from one interest mode to a different interest mode will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. Notice of the election of a new interest mode will be given by the Trustee to all Holders of the Bonds in the same manner as notices of redemption of the Bonds, not less than 15 days prior to the effective date of the new interest mode.

8 Conversion to Fixed Interest Rate

The Borrower may at any time, with the prior written consent of the Bank, convert the interest rate on all of the Bonds from a Variable Rate to a Fixed Rate; provided that the requirements contained in the Indenture relating to such conversion are satisfied. To convert to the initial Fixed Rate, the Borrower must give a written conversion notice (a "Conversion Notice") to the Trustee and other parties at least 60 but not more than 90 days prior to such conversion specifying (a) the date on which such conversion will occur; and (b) the date on which the Fixed Rate will be announced, which will not be less than 10 days prior to the Conversion Date. In addition, the Borrower must deliver to the Issuer, Trustee and the Remarketing Agent, together with the Conversion Notice: (i) an opinion of Bond Counsel stating that such conversion is permitted by the Act and the Indenture and will not cause the interest on the Bonds to be included in gross income of an owner for purposes of federal taxation, (ii) a copy of the prior written consent of the Bank to such conversion, and (iii) the Alternate Letter of Credit. UPON SUCH A CONVERSION, THE BONDS ARE SUBJECT TO MANDATORY TENDER WITHOUT A RIGHT TO RETAIN. NOTICE OF ANY SUCH MANDATORY TENDER WILL BE DELIVERED BY THE TRUSTEE TO THE REGISTERED OWNERS OF BONDS AT LEAST 30 DAYS PRIOR TO SUCH MANDATORY TENDER DATE.

If the Borrower has exercised its option to convert the interes~ rate on the Bonds to a Fixed Rate and the Remarketing Agent has not, on or before the date on which the Fixed Rate is determined, received commitments to purchase all of the Bonds on the Conversion Date at a price which is not less than par, the Remarketing Agent is obligated to notify the Issuer, the Borrower and the Trustee and the conversion of the interest rate to a Fixed Rate will be cancelled. Thereafter, the Bonds will continue to bear interest at the Variable Rate as if the Borrower had not attempted to exercise its option to convert the interest rate to a Fixed Rate.

Payment of Interest on the Bonds

On or before the Conversion Date, interest on the Bonds is payable monthly on the first Business Day of each month commencing on October 3, 2005 (the "Interest Payment Dates"), and on the Conversion Date. As to any Bond which is being redeemed prior to Maturity, interest will also be payable on the date upon which such Bond is to be redeemed (a "Redemption Date") if such date does not occur on a regularly scheduled Interest Payment Date. All interest payments will be made, while the Bonds are held by DTC or its nominee, to the Holder thereof, which will be DTC or its nominee (see "DESCRIPTION OF BONDS-Bonds in Book-Entry Form Only"), as of the close of business on the record date for such Interest Payment Date, which will be the immediately preceding Business Day.

Optional Tender

During the Variable Rate Period, any Bonds (or any portion thereof) will be purchased by the Trustee for the account of the Borrower, or through the Remarketing Agent for the account of a third party, at the option of the Holder, on any Business Day, at a purchase price equal to the principal amount thereof plus accrued interest thereon to the date of purchase, upon delivery to the Remarketing Agent and the Trustee of written notice (the "Optional Tender Notice") stating, among other things, the principal amount of the Bond and the date on which such Bond will be purchased (the "Optional Tender Date"). While the Bonds bear interest at a Daily Interest Rate, the Optional Tender Date may be any Business Day. While the Bonds bear interest at a Weekly Interest Rate, the Optional Tender Date must be a Business Day not earlier than the seventh calendar day next succeeding the date of delivery of the Optional Tender Notice. While the Bonds bear interest at a Monthly Interest Rate, the Optional Tender Date must be a Business Day not earlier than the seventh Business Day next succeeding the date of delivery of the Optional Tender Notice.

9 For Bonds bearing interest at a Daily Interest Rate,-the·Optional Tender Notice must be delivered by 8:30 a.m., Minnesota time, and the Bond(s) must be delivered by 9:00 a.m., Minnesota time, on the Optional Tender Date. For Bonds bearing interest at a Weel

Mandatory Tender

The Bonds are subject to mandatory tender for purchase, in whole and not in part upon a Determination of Taxability and upon conversion from a Variable Rate to a Fixed Rate.

The Trustee will give notice of a Mandatory Tender Date to the Holders of all Bonds subject to mandatory tender and to the Remarketing Agent at least 30 days prior to such Mandatory Tender Date. All Bonds must then be tendered to the Trustee for purchase before 12:00 noon, Minnesota time, on the Business Day prior to the Mandatory Tender Date by delivering such Bonds to the Trustee together with an appropriate instrument of transfer duly executed in blank, and, if tendered prior to an Interest Payment Date and after the Record Date for such Interest Payment Date, a check satisfactory to the Trustee for interest due on such Interest· Payment Date. On the Mandatory Tender Date, the Trustee will purchase (on behalf of the Borrower) all Bonds at a purchase price equal to the principal amount plus accrued interest.

Remarketing Agent

The Remarketing Agent will use its best efforts to remarket the Bonds or beneficial ownership interests tendered for purchase.

Piper Jaffray & Co., whose principal office is located in Minneapolis, Minnesota, the underwriter for the Bonds, will initially act as the Remarketing Agent under the Indenture. Pursuant to the terms of a Remarketing Agreement, the Remarketing Agent and the Borrower will agree on certain fees for remarketing the Bonds. The Remarketing Agent may resign or be terminated as provided in the Remarketing Agreement and the Indenture, and, if so, a successor Remarketing Agent will be appointed by the Borrower, subject to the qualifications and conditions set forth in the Indenture.

Source of Payment and Security

The Bonds are secured by a pledge by the Issuer of certain revenues to be received by the Issuer from or for the account of the Borrower pursuant to the terms of the Loan Agreement and the Indenture, as well as certain cash and securities held by the Trustee from time to time pursuant to the Indenture. See "THE LOAN AGREEMENT" and "THE INDENTURE" herein. The Bonds are further secured by the Letter of Credit. See "THE LETTER OF CREDIT" herein.

NEITHER THE STATE OF CALIFORNIA, THE ISSUER, NOR ANY POLITICAL SUBDIVISION NOR AGENCY OF THE STATE OF CALIFORNIA SHALL BE OBLIGATED TO PAY THE BONDS OR THE INTEREST HEREON. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION NOR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, PURCHASE PRICE OF, OR INTEREST ON, THE BONDS. NEITHER THE STATE OF

10 CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA IS IN ANY MANNER OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE ISSUER HAS NO TAXING POWER. THE BONDS, TOGETHER WITH THE INTEREST AND PREMIUM (IF ANY) THEREON AND THE PURCHASE PRICE THEREOF, SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA.

THE BONDS ARE OFFERED ON THE BASIS OF THEIR SUPPORT BY THE LETTER OF CREDIT AND THE GUARANTY AND ARE NOT OFFERED ON THE BASIS OF THE FINANCIAL STRENGTH OF THE BORROWER.

SOURCES AND USES OF FUNDS

Proceeds from the sale of the Bonds (less certain costs of issuance) will be loaned by the Issuer to the Borrower to finance a portion of the cost of the Project. See Appendix A for a description of the Borrower and the Project. The sources and uses of funds for the Project are as described on the following table:

Sources Bond Proceeds $7,000,000 Total Sources of Funds $7.000.000

Uses Project Costs $6,860,000 Costs of Issuance* 140,000 Total Uses of Funds $7 000,000

*Includes Underwriter's Discount

REDEMPTION OF BONDS PRIOR TO MATURITY

In General

The Bonds may not be called for redemption prior to maturity, except as described below under "-Optional Redemption," and "-Mandatory Redemption Prior to Expiration of Letter of Credit."

Following certain Events of Default under the Indenture (see "THE INDENTURE-Events of Default" herein), the Trustee may be required to accelerate the maturity of the Bonds and draw upon the Letter of Credit for the funds necessary to retire the Bonds. An event of default under the Indenture resulting in the acceleration of the Bonds can occur, at the direction of the Bank, anytime there is a default under the Reimbursement Agreement. See "THE REIMBURSEMENT AGREEMENT" below. Assuming in such circumstance that the Letter of Credit would be honored in accordance with its terms, the effect on Holders of Bonds would be similar to that of an early redemption at par. No representation is made with respect to the likelihood of early retirement of the Bonds as a result of an Event of Default. IN EVALUATING THE SUITABILITY OF AN INVESTMENT IN THE BONDS, PROSPECTIVE PURCHASERS OF THE BONDS SHOULD NOT ASSUME THEY WILL HAVE PROTECTION AGAINST AN EARLY RETIREMENT OF THE BONDS.

11 Notice and Effect of Redemption

Notice of the call for any redemption, identifying the Bonds or portions thereof to be redeemed, will be given by mailing a redemption notice not less than 30 days prior to the Redemption Date to the Holder of each Bond to be redeemed and the Remarketing Agent, except that notice of mandatory redemption due to a failure by the Borrower to deliver an Alternate Letter of Credit when required (See "REDEMPTION OF BONDS PRIOR TO MATURITY-Mandatory Redemption Prior to Expiration of Letter of Credit") will be given by mailing a redemption notice not less than five days prior to such Redemption Date. · Failure to give any such notice by mailing, or any defect therein, with respect to any Bond will not affect the validity of any proceedings for the redemption of any other Bond not affected by such failure or defect. All notices of redemption will: (a) specify the Bonds (or portions thereof) to be redeemed, the Redemption Date, the Redemption Price and the place or places where (or, if a partial redemption, the manner in which) the amounts due upon such redemption will be payable; and (b) state that on the Redemption Date the Bonds (or portions thereof) to be redeemed will cease to bear interest.

All Bonds or portions thereof so called for redemption will cease to bear interest on the specified Redemption Date. Following the delivery by the Trustee of the Redemption Price of any Bond to be redeemed to the person in whose name the Bond is registered, such Bond will be null and void.

Optional Redemption

While the Bonds bear interest at the Variable Rate, the Bonds are subject to redemption at the election of the Borrower, with the prior written consent of the Bank, prior to stated maturity, in whole or in part, upon at least 35 days' prior notice by the Borrower to the Trustee, in integral multiples of $5,000, on any Business Day (and if in part in Authorized Denominations and only if the remaining principal amount of such Bond will be in an Authorized Denomination). The Redemption Price for any such redemption will be 100% of the par amount, plus accrued interest to the date of redemption, and without premium.

Mandatory Redemption Prior to Expiration of Letter of Credit

The Bonds will be subject to mandatory redemption, in whole but not in part, at least two Business Days immediately preceding the expiration date of the Letter of Credit then in effect, unless an acceptable extension to or renewal or replacement of the Letter of Credit then in effect, or a commitment for a replacement or renewal of the Letter of Credit meeting the requirements of the Indenture, will have been delivered to the Trustee at least 35 days prior to such expiration date of the Letter of Credit. The Bonds will likewise be subject to mandatory redemption in whole but not in part at least two Business Days immediately preceding the expiration date of the Letter of Credit then in effect if a commitment for a replacement or renewal of the Letter of Credit has been delivered but no such renewal or replacement has been delivered to the Trustee at least 10 days prior to the expiration date of the Letter of Credit. The Redemption Price in any such event will be 100% of the principal amount of the Bonds so redeemed, plus accrued interest to the Redemption Date, without premium.

The Letter of Credit issued by Allied Irish Banks, p.l.c., acting through its New York Branch, expires on September 8, 2008, unless renewed or extended.

Partial Redemption

If less than all Bonds at the time Outstanding are to be called for prior redemption, the particular Bonds or portions thereof to be redeemed will be selected by the Trustee in such manner as the Trustee

12 will deem fair and equitable; provided that no partial redemption of Bonds will result in any Holder owning less than an Authorized Denomination of such Bonds.

No partial redemption of Bonds will be allowed if an Event of Default under the Indenture will have occurred and be continuing.

Expected Amortization

Although the Indenture does not require the Borrower to pay any portion of the principal of the Bonds prior to maturity, the Reimbursement Agreement will require the Borrower to exercise its right to cause the Issuer to optionally redeem Bonds in accordance with a schedule set forth in the Reimbursement Agreement.

THE LETTER OF CREDIT

Upon execution and delivery of the Letter of Credit to the Trustee by the Bank at or prior to the purchase of the Bonds by the Underwriter, the Letter of Credit will be an irrevocable obligation of the Bank to pay to the Trustee upon timely request an amount not exceeding the amount of principal and accrued interest (up to 45 days computed on the basis of the actual number of days in a 365-day year, at the maximum rate of 10% per annum (the "Maximum Rate")) then due on the Bonds. Initially the amount of the Letter of Credit is equal to the principal amount of the Bonds plus 45 days of interest on the Bonds at the Maximum Rate (as may be reduced or reinstated as set forth below, the "Stated Amount"). The initial Stated Amount will be $7,086,302, of which $7,000,000 represents the original principal amount of the Bonds and $86,302 represents 45 days' accrued interest on the original principal amount of the Bonds calculated at the Maximum Rate.

The Trustee may draw on the Letter of Credit by presenting the proper certificate to the Bank to pay: (a) accrued interest on the Bonds; (b) the principal amount of and accrued interest on the Bonds in connection with any redemption of the Bonds; ( c) the purchase price of Bonds tendered for purchase; ( d) the principal amount of and accrued interest on Bonds, the payment of which has been accelerated; or ( e) the principal amount of Bonds at their stated maturity, all in accordance with the Indenture. However, in no event will the Trustee draw on the Letter of Credit to pay the principal or purchase price of or interest on Company Bonds or Pledged Bonds.

The Stated Amount available under the Letter of Credit will automatically be reduced by the amount of each drawing paid by the Bank, subject to reinstatements as described. Amounts drawn for the payment of interest ( other than amounts drawn to pay accrued interest paid as part of the purchase price of Bonds tendered for purchase and less amounts drawn to pay accrued interest in connection with the redemption of Bonds or repayment of Bonds at their final maturity) will be automatically reinstated effective as of the seventh calendar day after the date of such drawing unless the Bank notifies the Trustee prior to the close of business on the sixth calendar day following the date of such drawing that such amount will not be reinstated. Amounts drawn for payment of the purchase price of the Bonds tendered for purchase will be reinstated upon receipt by the Bank of reimbursement for such purchase price, unless an Event of Default under the Reimbursement Agreement or an event or condition which, but for the lapse of time or the giving of notice or both, would constitute an Event of Default, exists, in which case the Bank may refuse to permit remarketing of the Bonds and refuse to reinstate the Stated Amount.

The initial Letter of Credit will expire at the close of the Bank's business on the date which is the earliest of (a) September 8, 2008; (b) the date which is 15 days following the Conversion Date; (c) the date which is 15 days following receipt by the Bank from the Trustee of a notice of termination of the Letter of Credit; ( d) the date on which the Bank honors a draw to pay the principal of and accrued interest

13 on the Bonds the payment of which has been accelerated; and ( e) the date which is 20 days following receipt by the Trustee of written notice from the Bank notifying the Trustee of an Event of Default under the Reimbursement Agreement.

The Bank may extend the expiration date of the Letter of Credit at the request of the Borrower by delivering to the Trustee an amendment to the Letter of Credit or the Borrower may provide an Alternate Letter of Credit to extend the expiration date. See "ALTERNATE LETTER OF CREDIT" herein. The Bank has made no commitment to extend the expiration date of the Letter of Credit.

If the maturity of the Bonds is accelerated, the Trustee is directed to draw on the Letter of Credit in a timely manner in an amount sufficient to provide for the full payment of the principal of the outstanding Bonds and up to 45 days of accrued interest thereon, but only the actual amount of interest accrued.

THE ABILITY OF THE BANK TO HONOR DRAWINGS ON THE LETTER OF CREDIT IS BASED SOLELY ON THE BANK'S GENERAL CREDIT. THE TRUSTEE MAY NOT ASSERT A CLAIM FOR FEDERAL DEPOSIT INSURANCE AGAINST THE FEDERAL DEPOSIT INSURANCE CORPORATION IN RESPECT OF THE BONDS OR THE LETTER OF CREDIT, AND BONDOWNERS SHOULD NOT ASSUME ANY SUCH INSURANCE COVERAGE IS AVAILABLE. IN THE EVENT OF THE INSOLVENCY OF THE BANK, A CLAIM BY THE TRUSTEE OR THE BONDOWNERS UNDER THE LETTER OF CREDIT WOULD PROBABLY BE SUBORDINATE TO THE CLAIMS OF THE BANK'S DEPOSITORS.

Prospective Bond purchasers are directed to Appendix B hereto for certain information relating to the Bank.

Section 105 of the United States Bankruptcy Code empowers a bankruptcy court to issue such orders as are necessary or appropriate to carry out the provisions of the Ba_nkruptcy Code. Court decisions discussing the enforceability of letters of credit indicate that it is possible that a bankruptcy court acting pursuant to Section 105 or other equitable powers under the Bankruptcy Code could enjoin a drawing by the Trustee under the Letter of Credit or the payment by the Trustee to Holders of Bonds of amounts drawn under the Letter of Credit under various circumstances, including the bankruptcy or insolvency of, or of a similar event with respect to, the Borrower or an affiliate of the Borrower.

ALTERNATE LETTER OF CREDIT

While the Bonds are Outstanding, the Borrower may cause an irrevocable letter of credit to be issued by another financial institution which meets the requirements set forth in the following paragraph (an "Alternate Letter of Credit"). The Alternate Letter of Credit may be effective on any Business Day; provided that the Alternate Letter of Credit meets the requirements set forth below and the Borrower will have given written notice to the Trustee of such substitution not less than 35 days prior to the date of such substitution. The Trustee is obligated under the Indenture to notify the Remarketing Agent and the Holders of Bonds of the receipt of notice from the Borrower that the Borrower intends to deliver an Alternate Letter of Credit.

The Alternate Letter of Credit will meet the following requirements:

(a) the Alternate Letter of Credit will be issued by a commercial bank doing business in the United States or a branch or agency of a foreign commercial bank located in the United States and subject to regulation by state and federal banking regulatory authorities;

14 (b) the Alternate Letter of Credit will be irrevocable; and

( c) the terms of the Alternate Letter of Credit will in all material respects be the same as the terms of the initial Letter of Credit.

The Trustee will not accept any instrument as an Alternate Letter of Credit unless it determines to its satisfaction that the foregoing conditions have been satisfied and unless the Trustee and Issuer will have been furnished with: (a) an opinion of counsel for the bank issuing the Alternate Letter of Credit to the effect that the Alternate Letter of Credit has been duly authorized, executed and delivered and is a legally valid and binding obligation of the issuer of the Alternate Letter of Credit and that payment of principal and interest on the Bonds with amounts drawn on the Alternate Letter of Credit will not constitute a voidable preference under the United States Bankruptcy Code; and (b) either (i) written evidence from the Rating Agency or Rating Agencies rating the Bonds (if the Bonds are then rated by a Rating Agency} that the then current rating on the Bonds will not be withdrawn or lowered as a result of delivery of the Alternate Letter of Credit; or (ii) if the Bonds are not rated, evidence satisfactory to the Trustee and the Remarketing Agent that the senior debt of the issuer of the Alternate Letter of Credit or debt issues rated solely on the basis of letters of credit issued by the issuer of the Alternate Letter of Credit are rated by a Rating Agency not lower than "A"/"A-1" (Standard & Poor's) or "A-2"/"P-1" (Moody's).

Pursuant to the Reimbursement Agreement, the Borrower has agreed that, prior to September 1, 2008, the Borrower will not exercise its right to supply an Alternate Letter of Credit from a financial institution other than Bank unless: (a) the Bank elects not to extend the expiration date of the Letter of Credit, (b) any rating applicable to the Bank is lowered, or (c) the Borrower is required to pay increased costs in connection with the Letter of Credit.

THE REIMBURSEMENT AGREEMENT

At the time of the delivery of the Letter of Credit, the Borrower and the Bank will enter into a Reimbursement Agreement (the "Reimbursement Agreement"). Pursuant to the Reimbursement Agreement, the Borrower will agree to pay the Bank for any draft drawn on the Letter of Credit and paid by the Bank, plus interest thereon at the rate specified in the Reimbursement Agreement, plus certain fees and expenses of the Bank.

The Reimbursement Agreement includes certain covenants of and restrictions on the Borrower which are typically found in loan agreements between a bank and a borrower which remain in effect at least as long as the Bank remains obligated to honor a draft submitted under the Letter of Credit. Such covenants include, without limitation, the Borrower's agreement to provide financial statements and other information to the Bank, the Borrower's agreement to keep accurate books of record and account for itself in accordance with good accounting practices, the Borrower's agreement to continue to engage in its current operations and maintain its corporate existence, restrictions on the incurrence of certain liens, the Borrower's agreement to comply with applicable laws, the Borrower's maintenance of certain financial covenants, restrictions on certain corporate transactions and agreements to maintain insurance and pay taxes, along with other covenants of the Borrower. Such covenants and restrictions are solely for the benefit of the Bank and may be waived or amended by the Bank and the Borrower without the consent of the Trustee, the Issuer or the Holders of Bonds. The Holders of Bonds will have no rights or obligations as a result of any such covenants or any amendments thereto or waivers thereof.

The Reimbursement Agreement requires the Borrower to exercise its right to cause the Issuer to optionally redeem Bonds in accordance with a schedule set forth in the Reimbursement Agreement.

15 The Reimbursement Agreement, including the provisions relating to optional redemption of the Bonds, may be amended from time to time by the Borrower and the Bank without the consent of the Issuer, the Trustee or the Bondowners.

Defined events of default under the Reimbursement Agreement include, among others:

(a) any representation or warranty of the Borrower or APMG made in the Reimbursement Agreement or any related document proves to be incorrect, incomplete or misleading when made;

(b) any breach or default or event of default on the part of the Borrower or APMG occurrs under the Reimbursement Agreement or any related document;

( c) failure of the Borrower to make any payments owed to the Bank when such payments are due;

(d) certain events of bankruptcy related to the Borrower or APMG;

( e) either the Borrower or APMG sells or transfers any interest in all or any material part of its assets or permits such sale or transfer to occur;

(f) certain failures on the part of the Borrower to pay other debts when due;

(g) certain judgments or similar process filed against the Borrower or certain property of the Borrower in excess of $100,000;

(h) a default in the observance or performance by the Borrower of certain terms, covenants, or agreements and the failure to remedy such default for 30 days after written notice has been given to the Borrower by the Bank; and

(i) ·a material adverse change in the Borrower's or the APMG's condition (fmancial or otherwise) or operations as reasonably determined by the Bank.

THE LOAN AGREEMENT

The following is a summary of certain provisions of the Loan Agreement. The summary is qualified in its entirety by reference to the full text of that Loan Agreement.

General

The Loan Agreement provides that the Issuer will issue the Bonds and that the proceeds of the Bonds will be loaned to the Borrower to finance the cost of acquisition, construction and installation of the Project. The proceeds of the sale of the Bonds will be deposited in the Construction Fund and disbursed by the Trustee to pay for or reimburse the Borrower for acquisition, construction and installation costs and certain costs of issuance all in accordance with the Indenture.

Payment of Project Costs

The Borrower agrees that, until issuance of the Bonds, it will be solely responsible for the payment of Project Costs, and that it will pay all costs incurred or to be incurred to complete the Project, including certain enumerated items set out in Section 3.02 of the Loan Agreement, which items the Issuer agrees will be reimbursable from Bond proceeds to the extent and manner provided in the Loan

16 Agreement. The Trustee is authorized to make disbursements from the Construction· Fund from time to time or upon the order of the Borrower, in payment of, or reimbursement for Project Costs, in accordance with the terms of the Indenture.

Term of Loan Agreement

The term of the Loan Agreement commences as of the date of issuance of the Bonds, and continues until the Bonds are discharged as provided in the Indenture. During the term of the Loan Agreement above specified, the Borrower agrees to make the payments described below.

Basic Payments

The Borrower agrees to make Basic Payments on the Loan sufficient to pay in full the principal of, interest on, and the purchase price of, if applicable, the Bonds when due, at maturity, upon call for redemption, upon mandatory purchase or upon an acceleration of maturity under the Indenture. For so long as the Letter of Credit is in effect, Basic Payments with respect to regularly scheduled payments of interest and principal due on the Bonds will be made directly to the Bank; otherwise, Basic Payments will be made to the Trustee and will be deposited in the Bond Fund. If the Borrower fails to make any of the Basic Payments, the Borrower will remain obligated to pay the amount in default in full with interest thereon. If on any date the balance in the Bond Fund is not sufficient for these purposes, the Borrower will forthwith pay the deficiency. The Borrower's obligations to make payments under the Loan Agreement are unconditional.

Additional Charges

The Borrower agrees to pay the full amount of the following items as Additional Charges under the Loan Agreement: (a) all issuance expenses; (b) all reasonable fees and expenses of the Trustee and Paying Agent and such other persons as are entitled to payment or reimbursement in connection with the transactions contemplated by the Loan Agreement and the Indenture; (c) the administrative fee of the Issuer; and (d) all expenses incurred by the Issuer in relation to the Project, the Loan Agreement, the Indenture and the Tax Certificate not otherwise payable by the Borrower.

Prepayment of Bonds

The Borrower may at any time transmit or cause to be transmitted funds to the Trustee for deposit in the Bond Fund to be used to redeem Bonds which will be redeemable according to their terms (with the consent of the Bank) or to provide for the payment of Bonds prior to maturity or redemption in accordance with the terms of the defeasance provisions of the Indenture, or to purchase and cancel Bonds in accordance with the terms of the Indenture.

Upon the happening of certain events, the Borrower also has the option to prepay the Loan and terminate the Loan Agreement as described under "-Termination of the Loan Agreement" below.

Termination of the Loan Agreement

Except during the continuance of an Event of Default under the Loan Agreement, the Borrower has the option, with the consent of the Bank, to prepay the Loan and terminate the Loan Agreement after the occurrence of either of the following events:

(a) the Project has been destroyed or damaged or title has been taken by Condemnation to the extent that the Project cannot be restored within six months or be used

17 normally for six months; or the reasonably estimated cost of restoring the Project exceeds 20% of the original face amount of the Bonds and is also reasonably estimated to exceed the proceeds of any insurance (including any deductible amount for which the Borrower is self-insured) or Condemnation award, any such estimates to be approved by the Bank; or

(b) changes in the Constitution or laws of the United States or of the State of California or any federal or state legislative or administrative action, or any final decree, judgment or order of any court or administrative body, make performance of the Loan Agreement impossible in accordance with the parties' intent.

Before exercise of its option to prepay the Loan, the Borrower must give notice in accordance with the terms of the Loan Agreement of its intent to terminate the Loan Agreement. On or before the date the Loan Agreement is terminated, the Borrower will pay to the Trustee an amount sufficient to discharge the lien of the Indenture in accordance with its terms. In such event all payments to Holders of Bonds will be paid from proceeds of a draw under the Letter of Credit. The Borrower will also pay an amount equal to any other fees, costs and expenses of the Trustee, the Issuer and the Paying Agent accrued or to accrue until final payment and redemption of the Bonds. The Borrower may also terminate the Loan Agreement if it has provided for the payment of all Bonds and the discharge of the Indenture under the defeasance provisions thereof.

Loss of Tax Exemption

The Borrower covenants that it will not use the proceeds of the Bonds or any other sums treated as "bond proceeds" under Sections 103 or 148 of the Code and applicable federal tax regulations in such a manner as to cause the Bonds to be classed as "arbitrage bonds" under said Sections and applicable federal income tax regulations, and that it will not otherwise use Bond proceeds, or take or fail to take any action, the effect of which would be to cause the interest on the Bonds to be included in gross income for federal income tax purposes.

Events of Default

The following events are Events of Default under the Loan Agreement:

(a) failure of the Borrower to pay any Basic Payment on or before the date due;

(b) if an Act of Bankruptcy occurs;

( c) failure of the Borrower to pay any Additional Charges on or before the date due and such failure continues for 30 days after written notification from the Trustee to the Borrower and the Bank;

( d) failure of the Borrower to observe and perform any other covenant, condition or agreement on its part under the Loan Agreement for a period of 60 days after written notice to the Borrower and the Bank from the Issuer or the Trustee; provided that such default may be waived by the Holders of no less than 66% of the principal amount of outstanding Bonds;

( e) liquidation or dissolution of the Borrower ( except where a new entity assumes the obligations of the Borrower under the conditions described in the Loan Agreement);

( f) any representation or warranty made by the Borrower in the Loan Agreement or by a representative of the Borrower in any document or certificate furnished the Trustee, the

18 Issuer or the Underwriter in connection with the Loan Agreement or such document or certificate, which proves at any time to be or to have been, in any material respect, incorrect or misleading as of the date made; or

(g) if an Event of Default occurs under the Guaranty.

Remedies

Whenever any Event of Default specified in clause (a) above has happened and be continuing, the Trustee will accelerate payment of all Basic Payments due under the Loan Agreement; provided that, under no circumstances may payment of the Basic Payments be accelerated on account of an Event of Default unless payment of the Bonds has also been accelerated under the Indenture. Whenever any Event of Default occurs, the Trustee or the Issuer, with the prior written consent of the Trustee, may take any one or more of the following remedial steps, to the extent permitted by law:

(a) take whatever action at law or in equity may appear necessary or appropriate to collect the Basic Payments and all other amounts due or to become due under the Loan Agreement and to enforce performance of any agreement of the Borrower under the Loan Agreement, or to otherwise compensate the Issuer, Trustee or Bondholders for any damages on account of such Event of Default; and

(b) take whatever action at law or in equity may appear necessary or appropriate to enforce the Issuer's rights of indemnification under the Loan Agreement and to collect all sums due to the Issuer under the Loan Agreement.

The Bank has the right, but not the obligation to cure any Event of Default on the part of the Borrower under the Loan Agreement.

Damage, Destruction and Condemnation

If, while any Bonds remain Outstanding under the Indenture, the Project is damaged or destroyed by fire or other casualty, or the Project or any part thereof is taken by condemnation, the Borrower may restore the project, or exercise its option. to prepay the Loan and terminate the Loan Agreement. See "THE LOAN AGREEMENT-Termination of the Loan Agreement."

Amendments, Changes and Modifications

No amendment, change or modification of the Loan Agreement is permissible without the prior written consent of the Trustee, Borrower, Bank and Issuer, except as otherwise permitted in the Loan Agreement or the Indenture. Except as otherwise provided in the Indenture, Bondholder consent is required for amendments, changes or modifications for certain specified purposes. See "THE INDENTURE-Amendments, Changes and Modifications."

Alterations to the Project and Removal of Equipment

The Borrower may at its own cost and expense, remodel and make additions, modifications, alterations, improvements and changes to the project or remove any equipment therefrom provided such alterations or removal do not impair the character of the Project as a "project" within the meaning of the Act or cause the interest on the Bonds to become includable in gross income for purposes of federal income taxation.

19 Taxes and Other Governmental Charges ·

The Borrower will pay all taxes and special assessments levied upon or with respect to the Project and other charges made by any governmental body for public improvements, taxes or governmental charges on any property of the Borrower upon or with respect to the Project, or sales and other excise taxes on products thereof and any taxes levied upon or with respect to income or profits from the operation of the Project. With respect to governmental charges that may be paid in installments over a period of years with or without interest, the Borrower is obligated to pay only such installments and interest as are required to be paid during the term of the Loan Agreement. The Borrower may, at its own expense and good faith, contest any such taxes and other charges and in the event of such contest may permit the item so contested to remain unpaid during the period of the contest and may appeal therefrom provided that such contest does not affect the Borrower's right to operate the Project.

Certificate of Compliance and Other Reports

The Borrower will, at the request of the Issuer, and at the Borrower's expense, furnish to the Underwriter and Issuer a copy of such other reports containing such information as is necessary to comply with any lawful reporting or continuing registration requirements imposed by any agency of the State of California under the Act, the California Blue Sky Laws or any other applicable state law or any agency of any other state in which the Bonds have been sold, or such information as necessary to comply with federal securities law.

Indemnity

The Borrower will indemnify the Issuer and its officers, agents and employees, and any person who controls the Issuer within the meaning of the Securities Act of 1933, against liabilities, losses, expenses, damages and other costs and expenses in certain instances arising out of or related to the Project and this Official Statement.

THE GUARANTY

The following is a summary of certain provisions of the Guaranty between APMG and the Trustee. The summary is qualified in its entirety by reference to the full text of the Guaranty.

Under the Guaranty, APMG will unconditionally agree to pay, to the Trustee, amounts due from the Borrower under the Loan Agreement on account of principal of, interest on and purchase price of the Bonds in the event that the Borrower fails to make such payments and, for whatever reason, amounts paid under the Letter of Credit are not ~ufficient for that purpose. APMG has also agreed that its payment obligations under the Guaranty will be reinstated and revived in the event a preference claim is made by a bankruptcy trustee for any payments made by the Borrower to the Bondholders.

THE INDENTURE

The following is a summary of certain provisions of the Indenture between the Issuer and the Trustee. The summary is qualified it its entirety by reference to the full text of the Indenture.

Pledge by Issuer

The Issuer will pledge and assign to the Trustee in trust all of the rights and interests of the Issuer in the Loan Agreement, including but not limited to the Basic Payments and all sums the Issuer is entitled to receive from the Borrower under the Loan Agreement ( except for certain rights to indemnification and

20 payment of expenses), and all other sums required to be deposited in the·trust accounts created pursuant to the Indenture, the earnings derived from the investment of the foregoing sums, amounts obtained under the Letter of Credit and any other property which may become subject to the lien of the Indenture. The Trustee is entitled to hold all of the above and enjoy all privileges related to such pledge by the Issuer, subject to the rights of the Borrower under the Loan Agreement.

Construction Fund

The Construction Fund will be maintained by the Trustee. The Trustee will disburse amounts held in the Construction Fund to or for the account of the Borrower to pay Project Costs pursuant to the provisions of Article VI of the Indenture and in accordance with the Loan Agreement, and to finance the costs of acquiring, constructing and installing the project.

Bond Fund

The Bond Fund will be maintained by the Trustee, and will include a general account and a letter of credit account. All Basic Payments made by the Borrower and certain other amounts specified in the Indenture, including amounts received from the Guarantor, will be deposited in the general account of the Bond Fund. However, for so long as the Letter of Credit is outstanding, the Borrower will make Basic Payments with respect to interest and principal due on the Bonds on a regularly scheduled payment date directly to the Bank to reimburse the Bank for draws under the Letter of Credit. The Trustee will deposit all amounts received from the Bank under the Letter of Credit in the letter of credit account. Money in the Bond Fund will be used and withdrawn by the Trustee for the payment of principal of, interest on and premium, if any, on the Bonds and for the redemption and prepayment of Bonds, to discharge Outstanding Bonds in accordance with the Indenture and Loan Agreement or to purchase and cancel any Bonds pursuant to the Indenture upon deposit by the Borrower of sufficient additional sums to do so. In no event will any money drawn on the Letter of Credit be used to pay the principal of or interest on Company Bonds or Pledged Bonds.

Costs of Issuance Fund

The Costs of Issuance Fund will be maintained by the Trustee. The Trustee will disburse amounts held in the Costs of Issuance Fund to or for the account of the Borrower to pay Costs of Issuance pursuant to the provisions of Article VI of the Indenture to finance the costs of issuing the Bonds. Any money remaining in the Costs of Issuance Fund on March 8, 2006, will be transferred to the Construction Fund.

Bond Purchase Fund

The Trustee will maintain a Bond Purchase Fund into which will be deposited remarketing proceeds of the Bonds on any Optional Tender Date and on any Mandatory Tender Date and Letter of Credit proceeds drawn for purposes of purchasing the Bonds on any Optional Tender Date or Mandatory Tender Date. Moneys in the Bond Purchase Fund will be used to pay the purchase price of the Bonds (first from proceeds obtained under the Letter of Credit) and to reimburse the Bank for a draw on its Letter of Credit, all as provided in the Indenture. In no event will any money drawn on the Letter of Credit be used to pay the purchase price of any Company Bonds or Pledged Bonds.

Investment of Funds

Any moneys held as part of established funds under the Indenture will be invested or reinvested by the Trustee upon the request of the Borrower in such securities as are authorized by then applicable

21 Minnesota laws, and any securities purchased and any earnings on investments of the moneys held in the funds established under the Indenture wi~l be held by the Trustee in accordance with the Indenture. However, no investment may be made by the Trustee in such a manner as to cause the Bonds to be arbitrage bonds within, the meaning of Sections 103 and 148 of the Code.

Discharge of Lien of Indenture

Prior to the Conversion Date, the lien of the Indenture and the Loan Agreement may not be terminated unless all Bonds have been redeemed and paid in full.

Events of Default

Any of the following events is an "Event of Default" under the Indenture:

(a) default in the due and punctual payment of any interest on any Bond;

(b) default in the due and punctual payment of the principal of any Bond at its Maturity;

(c) default in the due and punctual payment of the purchase price of Bonds required to be purchased pursuant to the Indenture when payment of such amount has become due and payable;

(d) receipt by the Trustee of a written notice from the Bank of an event of default under the Reimbursement Agreement; or

( e) receipt by the Trustee, following a draw under the Letter of Credit to pay interest on the Outstanding Bonds, of a written notice from the Bank that the amount available to be drawn under the Letter of Credit with respect to interest will not be reinstated in full.

Remedies

Acceleration. Upon the occurrence of an Event of Default, the Trustee will immediately declare the principal of the Bonds and interest accrued thereon to be payable, whereupon the principal of all then Outstanding Bonds and interest thereon will become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding. Interest on the Bonds will cease to accrue as of the declaration of acceleration.

Remedies. Subject to the provisions relating to acceleration, upon the occurrence of an Event of Default, the Trustee may pursue any available remedies by suit at law or in equity to enforce the payment of principal, interest and any premium on the then Outstanding Bonds. If an Event of Default has occurred under the Loan Agreement, the Trustee may enforce any and all rights of the Issuer except that only the Issuer has the right and obligation to representation before the Internal Revenue Service in any matter connected with the Bonds. All remedies conferred upon or reserved to the Trustee or the Bondholders are cumulative and are in addition to any other remedy now or, hereafter existing in law, in equity or by statute.

If any Event of Default will have occurred, other than an Event of Default described in clause (d) or (e) above, and if it will have been requested to do so by the Holders of 51 % of the total principal amount of the then Outstanding Bonds and will have been indemnified as provided in the Indenture, the Trustee will be obligated to exercise such rights and powers conferred by the Indenture as the Trustee,

22 being advised by Independent Counsel, will deem most expedient in the interests of the Bondholders; provided, however, that the Trustee will have the right to decline to comply with any such request if the Trustee will be advised by Independent Counsel that the action so requested may not lawfully be taken or if the Trustee in good faith will determine that such action would be unjustly prejudicial to the Holders of Bonds not parties to such request.

Every right and power accruing to the Trustee or Bondholders upon an Event of Default may be exercised as often as deemed expedient; no delay or omission in exercising any such rights or powers will be construed as a waiver of or acquiescence in an Event of Default.

Rights and Remedies of Bondholders

Direction ofProceedings by Bondholders. The Holders of 51 % in aggregate principal amount of Bonds then Outstanding will have the right, upon fulfillment of certain conditions, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of the Indenture, the Loan Agreement and the Letter of Credit; provided that such direction will not be contrary to the. provisions of law and of the Indenture.

Institution of Suit by Bondholders. No suit, action at law or in equity or exercise of any remedy under the Indenture or Loan Agreement accruing upon the occurrence of an Event of Default relating to the Bonds will exist under the document involved unless the Trustee has been requested in writing by the Holders of 51 % of the aggregate principal amount of the then Outstanding Bonds to exercise the powers granted to it or to institute suit in its own name and, offered a reasonable opportunity to do so, the Trustee fails or refuses to act. This notice must also contain an offer from the Holders to indemnify the Trustee upon the exercise of its powers or the institution of suit. At the Option of the Trustee, such written notice described above may be declared a condition precedent to any enforcement of or action taken under the Indenture.

Nothing in the Indenture, however, will affect or impair the right of the Bondholders to enforce the payment of principal and interest on the Bonds at or after their date of maturity or the obligation of the Issuer to pay the principal and interest on the Bonds as specified in the Indenture.

Application of Moneys

All moneys received by the Trustee pursuant to any right given or action taken under the provisions of the Indenture, Loan Agreement or Letter of Credit will be deposited in the Bond Fund created under the Indenture. Such moneys will be used to pay principal and interest on the Bonds in accordance with the further provisions of the Indenture.

Waiver of Events of Default

Upon certain conditions, the Trustee may waive any Event of Default under the Indenture ( other than an Event of Default described in clause (a) (b) or (c) above) and rescind any declaration of acceleration of maturity of principal; provided that no Event of Default will be waived after a draw under the Letter of Credit unless the amount drawn under the Letter of Credit has been reinstated in full.

No waiver of an Event of Default by the Trustee or the Bondholders will affect any subsequent Event of Default or impair any rights or powers accruing as a consequence of a subsequent Event of Default.

23 The Trustee

The Indenture provides that the Trustee will, prior to the occurrence of any Event of Default under the Indenture and after the curing of all Events of Default which have occurred, perform only such duties as are specifically set forth in the Indenture. During the existence of any Event of Default, the Trustee will exercise such of the rights and powers vested in it under the Indenture, and use the same degree of care and skill in their exercise, as a prudent trustee would under a corporate mortgage, subject to certain conditions.

The Trustee may acquire and hold Bonds with the same rights as if it were not Trustee under the Indenture.

The Trustee is not responsible for the sufficiency of any security and is not otherwise liable to the Bondholders except for its negligence or willful misconduct and is protected from liability if it acts in reliance on counsel, or in reliance upon a document bona fide on its face.

In the Event of Default, the Indenture requires the Trustee to give the Holders notice thereof; except for an Event of Default in the payment of principal and interest on the Bonds, the Trustee may withhold notice on the good faith advice of its Board of Directors, executive or trust committee or its chief executive officer that such withholding of notice is in the interest of the Holders.

The Remarketing Agent

The Underwriter has also been appointed to act as Remarketing Agent for the Bonds. In that regard, the Borrower and Remarketing Agent have entered into a Remarketing Agreement dated as of September 1, 2005 which provides for the remarketing of the Bonds on each Tender Date and the payment of an annual fee therefor based upon the outstanding principal amount of Bonds.

Supplemental Indentures

Except for certain specific purposes set out in the Indenture, supplemental indentures modifying, amending or rescinding the terms of the Indenture require the consent of the Holders of not less than 51 % of the total principal amount of the then Outstanding Bonds. However, the consent of Holders of 100% of the principal amount of Outstanding Bonds is required for supplemental indentures extending the maturity of the principal of or interest on any Bond, or reducing the amount of the principal of, premium or interest rate on any Bond, or giving any Bonds a privilege or priority over any other Bonds, or modifying the provisions of the Indenture relating to bondholder consent to supplemental indentures.

Rights of Borrower and Bank

No supplemental indenture will become effective that adversely affects the rights of the Borrower under the Loan Agreement unless and until the Borrower has consented in writing to the execution and delivery of the supplemental indenture, after notice of the proposed execution of such supplement by the Trustee. No consent of the Borrower is required if an Event of Default has occurred and is continuing under the Loan Agreement.

The Trustee will not enter into any supplemental indenture without first obtaining the prior written consent of the Bank.

24 ..

Amendments, Changes and Modifications of Loan Agreement

The Issuer and the Trustee may, without the consent of or notice to the Bondholders, consent to any amendment, change or modification of the Loan Agreement required or permitted by the provisions of the Loan Agreement or Indenture: (a) to be made without Bondholder consent; (b) to cure any ambiguity or formal defect or omission; (c) to reconcile the Loan Agreement and any collateral documents, with any amendment or supplement to the Indenture; or ( d) in connection with any other changes to the Agreement which in the judgment of the Trustee do not prejudice the Trustee or the Bondholders ( other than consenting Bondholders).

Any other amendments, changes or modifications of the Loan Agreement require the publication of notice and the written consent of the Holders of at least 51 % of the total principal amount of all then Outstanding Bonds. If the required number of Holders consent to any amendment or modification, no Holder will have the right to object to the terms and provisions thereof or to enjoin or restrain the Issuer or Trustee from executing such amendment. Notwithstanding these provisions for amendment, no amendment or modification will be permitted that would reduce the amount of Basic Payments due under the Loan Agreement or change the stated maturities of the Bonds. No amendment to the Loan Agreement or the Letter of Credit may be made without obtaining written consent of the Bank.

Ownership of Bonds

The Holder of any Bond may be treated as the owner for the purpose of receiving payment and for all other purposes, and the Issuer, or any agent thereof, Trustee and Paying Agent will not be affected by notice to the contrary.

TAX MATTERS

In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for the purposes of the federal alternative minimum tax. Interest is also exempt from present State of California personal income taxes.

The opinion described in the preceding paragraph assumes compliance by the Issuer and the Borrower with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Issuer and the Borrower have covenanted to comply with such requirements. Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Bonds.

The interest rate determination method and certain other requirements, agreements and procedures contained or referred to in the Indenture, the Loan Agreement, the Tax Certificate and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) may be taken under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to any Bond or the interest thereon on or after any such change that occurs or action that is taken upon the advice or approval of bond counsel other than Bond Counsel.

Notwithstanding Bond Counsel's opinion that interest on the Bonds is not a specific preference item for the purposes of the federal alternative minimum tax, such interest will be included in adjusted

25 current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income ( determined without regard to such adjustment and prior to reduction for certain net operating losses).

The accrual or receipt of such interest may otherwise affect the federal income tax liability of the owners of the Bonds. The extent of these other tax consequences will depend upon such owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion regarding any such consequences. Purchasers of the Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Bonds.

From time to time, there are legislative proposals in the Congress that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation.

LEGAL MATTERS

Legal matters incident to the authorization and issuance of the Bonds are subject to the approval of the law firm of Kutak Rock LLP, Pasadena, California, Bond Counsel, whose approving opinion as Bond Counsel will be delivered with or printed on the Bonds. The Underwriter's obligation to purchase the Bonds is subject to, among other things, receipt by it of Bond Counsel's approving opinion with respect thereto.

The validity of the Letter of Credit will be passed upon for the Bank by Schiff Hardin LLP, counsel to the Bank, and by the Bank's legal department. Certain legal matters will be passed upon for the Issuer by Brooke Bassett, Esq., San Francisco, California and for the Borrower by Rodriguez, Horii & Choi LLP, Los Angeles, California, and Faegre & Benson LLP, Minneapolis, Minnesota.

There is no pending or, to the knowledge of the Borrower, threatened litigation against the Borrower which in any way questions or affects the validity of the Bonds or the Letter of Credit or any proceedings or transactions relating to their issuance, sale or delivery of the Bonds or the issuance and delivery of the Letter of Credit or which may affect the acquisition, construction or completion of the Project. As of the date of this Official Statement, the Borrower does not know of any fact or set of facts from which liability might arise which individually or collectively would materially and adversely affect the business or operation of the Borrower or the Project.

There is no action, suit or administrative proceeding pending or, to the knowledge of the Bank, threatened against the Bank at law or in equity or before any public board of body challenging the validity or enforceability of the Letter of Credit or any other letter of credit issued by the Bank under similar circumstances.

26 UNDERWRITING AND REMARKETING

Piper Jaffray & Co. (the "Underwriter) has agreed, subject to the terms of a Bond Purchase Agreement to purchase from the Issuer the aggregate principal amount of the Bonds offered hereby at a purchase price of $6,980,050, which represents the principal amount of the Bonds less an underwriting discount of $19,950. Concessions from the initial price may be allowed to selected dealers and special purchasers. The initial price is subject to change after the date hereof. The Borrower has agreed to indemnify the Underwriter and its employees against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended.

Piper Jaffray & Co. will enter into a Remarketing Agreement with the Borrower for the purpose of remarketing Bonds.

NO CONTINUING DISCLOSURE

No party is obligated to provide any other ongoing disclosure or to update any information included in this Official Statement.

RATING

As noted on the cover hereof, Moody's Investors Service ("Moody's") has assigned a long-term rating of "Aaa" and a short-term rating of "VMIG 1" to the Bonds, conditioned on the issuance of the Letter of Credit by the Bank. Moody's has also assigned an underlying rating of "A2" based on the stand­ alone credit strength of APMG, as Guarantor. Moody's has based the "Aaa"/"VMIG l" long-term rating on the Bonds on its analysis of the credit strength of both the Bank and APMG using its "Two-Party-Pay" rating approach. This approach examines both the Bank and APMG and evaluates the likelihood that both parties will be unable to make payments on the Bonds when due. The short-term rating on the Bonds is based solely on the credit strength of the Bank.

The ratings reflect only the view of such rating agency. Further information concerning the ratings is available from Moody's. No application was made to any other rating agency for the purpose of obtaining an additional rating for the Bonds.

To obtain these ratings, certain information and materials have been furnished to the rating agency, some of which have not been included in this Official Statement. These ratings are not a recommendation to purchase, sell or hold a security. There is no assurance that either rating will remain for any period of time or that it may not be lowered or withdrawn entirely by the rating agency, if the rating agency determines, in its judgment, that the circumstances so warrant. Any downward change in or withdrawal of either rating may have an adverse effect on the market price of the Bonds.

MISCELLANEOUS

The foregoing summaries do not purport to be complete and are expressly made subject to the exact provisions of the complete documents. For details of all terms and conditions, prospective purchasers are referred to the Letter of Credit, the Reimbursement Agreement, the Loan Agreement and the Indenture, copies of which may be obtained from the Underwriter during the period of this offering, and thereafter from the Trustee. The appendices attached hereto are a part of this Official Statement. Any matters in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact.

27 This Official Statement has been approved by the Borrower; after due investigation on its part and to the best of its lmowledge and belief, for distribution by the Underwriter to prospective purchasers of the Bonds.

28 APPENDIX A

THE BORROWER, THE GUARANTOR AND THE PROJECT

THE BORROWER

Southern California Public Radio ("SCPR") is a tax-exempt nonprofit organization that produces and acquires programming of community value and combines these programs into a nonprofit radio service for broadcast to the people of Southern California and the nation, including the production and broadcast of local, West Coast, and Pacific Rim news and information programming.

Founded in 1999, SCPR contracted with the Pasadena Area Community College District (the "District") to operate KPCC (89.3 FM), the public radio station licensed to the District. Since then, SCPR - driven by its mission to strengthen the civic and cultural bonds that unite Southern California's diverse communities - has been transforming public media in the greater Los Angeles area.

The mission of SCPR is to strengthen the civic and cultural bonds that unite Southern California's diverse communities by providing the highest quality news and information service through radio and other interactive media. SCPR seeks to be a public forum that engages its audiences in an ongoing dialogue and exploration of issues, events and cultures in the region and in the world, seeking to provide greater understanding and new perspectives to the people of these communities and their leaders.

Through KPCC, SCPR reaches nearly all of Los Angeles and Orange Counties, as well as the heavily populated western portions of San Bernardino and Riverside Counties. The station's weekly audience has been increasing annually since 2000. Listenership increased by 12.1 % from spring 2004 (April through June 2004) to summer 2004 (July through September 2004, the latest figures available), rising from 340,100 to 381,300.

SCPR is developing an extensive local public radio news operation in California. Since 2000, SCPR has won more than 90 local and national awards for excellence in its news and public affairs programs, more than· any other local radio news staff. SCPR believes it is also providing more opportunities for in-depth discussion of important local issues, on KPCC and on its website, than any other public radio organization in the Western United States.

SCPR is committed to providing a link between high quality journalism, robust civic discourse, and a strong, participatory democracy through its programming and through its innovative use of new interactive and on-line media. With locally based management and a board of trustees focusing solely on its public service mission, SCPR' s goal is to become the leading non-profit news and information media company in Southern California in terms of quality programming, audience size, reputation for excellence, and financial support from the public.

THE GUARANTOR

SCPR is part of a larger family of companies with a parent support organization, American Public Media Group ("APMG"). In connection with the issuance of the Bonds, APMG has executed the Guaranty, whereby it has unconditionally guaranteed the payment of amounts due from the Borrower under the Loan Agreement on account of principal, interest and purchase price due on the Bonds.

A-1 J...

APMG is a nonprofit corporation whose purpose is to develop resources, services and systems to support public media for public service.

APMG's affiliates are engaged in various public radio, theater rental, commercial radio, and publishing activities. APMG also operates the Public Radio MusicSource, a fund-raising effort by which APMG engages in the sale of sound recordings to listeners of public radio stations, including MPR and SCPR, and the Pretty Good Goods catalog, by which it sells program-related and psychographically­ related goods to consumers by direct marketing through mail and the Internet.

APMG provides core support services for SCPR and for other entities in the group, including the nonprofit Minnesota Public Radio ("MPR"), based in Saint Paul, Minnesota, and the nonprofit Fitzgerald Theater Company ("FTC"), also based in Saint Paul, Minnesota, sharing the cost of those services among all entities.

APMG owns all of the stock of the for-profit Greenspring Company, which has two taxable for­ profit operating subsidiaries - Greenspring Media Group and The KLBB Company. (On May 24, 2005, Greenspring entered into an agreement to sell The KLBB Company. This sale should close prior to September 7, 2005). The success of these companies and other for-profit businesses has helped support the activities of the nonprofits within the group. For example, in 1998, Greenspring sold its then principal asset, Rivertown Trading Company ("Rivertown"), in a transaction that allowed APMG to create a permanent endowment of $85.6 million. (See below.) This endowment replaced and helped APMG to stabilize the annual revenue stream that it relied upon Rivertown to provide to MPR for the previous 10 years.

APMG has the ability to elect or approve the election of all of the SCPR Board of Trustees.

Collectively, MPR, FTC, SCPR, Greenspring, and Greenspring Media Group are referred to as the affiliated organizations or affiliates.

In April 1998, APMG sold Rivertown, an indirect, wholly owned, for-profit subsidiary, to Target Corporation for approximately $123 million. In October 1998, the APMG Board of Trustees approved setting aside $85.6 million from the net proceeds of the sale of Rivertown as a permanent endowment for the benefit of MPR. APMG maintains variance power over this endowment. In April 1999, the APMG Board of Trustees adopted the Investment Policy for this Earned Endowment for MPR. The Investment Policy includes a spending policy designating an annual distribution of 4.5% of the five-year average market value of the Earned Endowment's assets.

APMG's existing indebtedness includes a guarantee of the $10,000,000 Variable Rate Demand Revenue Bonds ("Minnesota Public Radio Project") Series 2002, which were issued by the Housing and Redevelopment Authority of the City of Saint Paul ("Saint Paul HRA") and loaned to MPR to finance the purchase of land and an existing building for an expansion project, of which $9,655,000 is outstanding, and a guarantee of the $10,000,000 Variable Rate Demand Revenue Bonds ("Minnesota Public Radio Project") Series 2005, also issued by the Saint Paul HRA as the final piece of financing for the same project.

The following table is a summary of the statement of activities for APMG (unrestricted portion only) for fiscal years 2000 to 2004. For complete audited financial statements for such years prepared on a consolidated basis for APMG and its affiliates, see the APMG Web site at www .americanpublicmediagroup.org.

A-2 L.

American Public Media Group and Affiliates Consolidated Statement of Unrestricted Activities (in Thousands)

2000 2001 2002 2003 2004

Support From Public Membership $ 8,007 $ 10,066 $ 12,636 $ 12,751 $ 14,382 Regional underwriting 2,450 3,055 2,758 4,936 6,784 National underwriting 1,651 4,108 4,429 3,820 1,066 Business general support 713 1,236 691 770 743 Foundations 311 1,065 960 302 224 Grants from endowments 960 1,094 1,191 1,201 1,147 Institutional sponsors 384 426 376 405 413 Other grants from private sources Total support from public $14,476 $21,050 $23,041 $24,185 $24,759 Support From Governmental Agencies Corporation for Public Broadcasting 2,863 3,179 3,426 4,248 5,115 Other grants from governmental agencies 107 41 72 627 ~ Total support from governmental agencies $2,970 $3,220 $3,498 $4,875 $5,460 Earned Revenue Revenue from broadcasting activities 5,164 7,107 8,984 8,791 11,365 Royalties and licensing fees 1,248 1,408 1,237 1,453 1,317 Investment gain (loss), net 9,438 257 (2,994) 1,195 14,268 Product sales and other earned revenue 132192 142958 142237 152883 152535 Total earned revenue $29,042 $23,730 $21,464 $27,322 $42,485 Net Assets Released From Restriction 22771 5,574 6,117 9,065 11,440 Total support and earned revenue $49,259 $53,574 $54,120 $65,447 $84,144 Expenses Cost of Goods sold 3,522 3,416 3,460 3,919 5,450 Operations, Rent & Occupancy 32,709 40,907 44,459 47,562 54,415 Selling, general, and administrative 6,628 8,765 9,552 9,394 10,490 Fundraising 4,291 5,546 62279 8,494 7,487 Total expenses $47,150 $58,634. $63,750 $69,369 $77,842 Minority Interest In Joint Venture (35} (39} (48} (45} (11} Revenues (Less Than) In Excess of Expenses Before Income Taxes and Capital Items 2,074 (5,099) (9,678) (3,967) 6,291 Income Tax Benefit 278 (98) 531 117 614 Capital Campaign Revenue 2 109 962 3,104 Capital Campaign Expense 172 (396} (583} Gain on Sale of Assets 5,666 Change in Net Assets 2,524 (5,195) (9,038) (3,284) 15,092 Discontinued Operations Gain on Sale of Discontinued Operations 1,378 Change In Net Assets $2,524 $ (5,195) $ (9,038) $ (3,284) $16,470 NET ASSETS-Beginning of Year 145,078 147,602 142,407 133,369 130,085 NET ASSETS-EndofYear $147~602 $142 401 $133~369 $130~085 $146 555

A-3 THE PROJECT

Proceeds of the Bonds will be loaned to SCPR to provide financing for the acquisition of real property and improvements thereon located in Pasadena, California (the "Property") and for the rehabilitation of the Property for SCPR's broadcasting purposes (altogether, the "Project"). The purpose of the Project is to accommodate SCPR's growth over the next 10 years. SCPR's current facilities are not sufficient to meet present content production demands and cannot support SPCR's ambitious growth plan. The Property gives SCPR a minimum 10 years of growth expansion room.

The Property is located at 4 7 4 South Raymond A venue and is situated on the east side of the street between Bellvue Drive and California Boulevard, in the City of Pasadena, County of Los Angeles, California. The Property is a generally level, rectangular-shaped parcel covering approximately 37,500 square feet of land, and includes a two-story commercial office building with an underground parking level on its northern half. An asphalt-paved parking lot exists on the southern half. The office building is of concrete block construction with concrete columns and wood-frame supports. The building contains an underground parking garage level accessed from a driveway off of Raymond Avenue. The building was constructed in 1970 and remodeled in 1990. Total floor space of the building is approximately 29 ,500 square feet.

The building will be remodeled to provide space for studios and studio equipment, for news reporters, and for new program development. The remodel will also include office space and equipment for SCPR's administration, finance, human resources, membership, underwritng, and development departments.

Construction is scheduled to begin no later than the end of 2005 and end in January 2007.

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A-4 APPENDIXB

THE BANK Allied Irish Banks, p.l.c.

THIS DOCUMENT REPRESENTS ONLY A SUMMARY OF THE INFORMATION REFERRED TO HEREIN. EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN, THIS DOCUMENT DOES NOT ATTEMPT TO DESCRIBE THE BUSINESS OR ANALYZE THE CONDITION, FINANCIAL OR OTHERWISE, OF ALLIED IRISH BANKS, p.l.c. ("AIB") OR OTHERWISE DESCRIBE ANY RISKS ASSOCIATED WITH AIB. EACH BONDHOLDER MUST RELY ON THAT HOLDER'S OWN KNOWLEDGE, INVESTIGATION AND EXAMINATION OF AIB AND AIB'S CREDITWORTHINESS.

AIB reports its financial information on a consolidated basis which includes AIB and certain affiliates and subsidiaries ("AIB Group"). AIB Group provides a diverse and comprehensive range of banking, financial and related services principally in Ireland, Britain, Poland and the United States. AIB Group is currently organized into four (4) divisions: Republic of Ireland; Great Britain & Northern Ireland; Poland; and Capital Markets (which includes AIB's New York Branch). AIB is the largest banking corporation organized under the laws of Ireland. As of December 31, 2004, AIB's total assets were EUR102 billion. Pre-tax profits for the year ending December 31, 2004 amounted to EURl,418 million. Profit after tax was EURl,047 million. Return on equity was 20.2% and return on assets was 1.17%.

AIB's New York Branch files quarterly reports on Form FFIEC-002 ("Call Reports") with the Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10001, the Federal Deposit Insurance Corporation ("FDIC") at 20 Exchange Place, New York, NY 10005 and with the New York State Banking Department at 1 State Street, New York, NY 10004. The Call Reports are publicly available.

AIB is an Irish registered public limited company and its ordinary shares are quoted on the Dublin and London stock exchanges. The Group's ordinary shares (symbol AIB) and non-cumulative preference shares (symbol AIBPr) are traded in the USA on the New York Stock Exchange in the form of American Depositary Shares ("ADS") and each ADS is evidenced by an American Depositary Receipt ("ADR"). AIB, as a foreign private issuer of securities in the United States, is required to file an annual report on Form 20-F with the U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act") within 6 months after the end of each fiscal year. Moreover, a foreign issuer, unlike domestic companies, is required to submit to the SEC under the Exchange Act on Form 6-K, only those interim reports and other materials that the issuer prepares in accordance with home country or home market requirements or delivers to its security holders. Exchange Act documents filed by AIB are publicly available at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at its regional offices at 233 Broadway, New York, NY 10279 and 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of documents filed by AIB with the SEC may also be accessed electronically by means of the SEC' s home page on the Internet at "http://www.sec.gov".

Any of the documents referred to herein ( other than exhibits to such documents) are available upon request, without charge, by writing to the Office of Investor Relations, Allied Irish Banks, p.1.c., Bankcentre, Ballsbridge, Dublin 4, Ireland. Additional information about AIB, including a copy of AIB Group's Annual Report and Form 20-F, is presently available on the Internet at "http://www.aibgroup.com".

Note: The rate as at 12/31/04 - EURl = $1.3621

B-1 APPENDIXC

DEFINITIONS

"Act" means Division 1 of Title 6.7 of the California Government Code (commencing with Section 63000), as amended.

"Act ofBankruptcy" means any of the following events:

(a) the Company or the Guarantor will (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of the Company or the Guarantor or of all or a substantial part of their property; (ii) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect); or (iii) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts; or

(b) a proceeding or case will be commenced, without the application or consent of the Company or the Guarantor, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding up, or the composition or adjustment of debts, of the Company or the Guarantor; (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of the Company or the Guarantor or of all or any substantial part of their assets; or (iii) similar relief in respect of the Company or the Guarantor under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts.

"Additional Charges" means the payments required by Section 4.04 of the Loan Agreement.

"Adjustment Date" means Wednesday of each week or if the Remarketing Agent is not open for business on any Wednesday, then on the last day preceding Wednesday for which it is open for business.

"Adjustment Period'' means individually or collectively, the Daily Period, the Weekly Period and the Monthly Period.

"Alternate Letter of Credif' means any Letter of Credit delivered to the Trustee in accordance with Section 4.08(b) of the Loan Agreement and Section 7.04 of the Indenture.

"Authorized Denominations" means (a) prior to the commencement of the Fixed Letter of Credit Rate Period, $100,000 or any multiple of $5,000 in excess of $100,000; and (b) on and after the commencement of the Fixed Letter of Credit Rate Period, $5,000 or integral multiples thereof.

"Available Moneys" means (a) proceeds of the Bonds; (b) moneys held by the Trustee in the Construction Fund, Costs of Issuance Fund or Bond Fund for a period of at least 123 consecutive days, during which period no Act of Bankruptcy will have occurred; ( c) proceeds of a drawing under the Letter of Credit; or ( d) proceeds of an issue of revenue bonds ( excluding the Bonds), and investment earnings thereon if the Trustee receives an opinion of Independent Counsel to the effect that payments of principal and interest on the Bonds with proceeds of such revenue bonds will not constitute a voidable preference under 11 U.S.C. § 547 of the Federal Bankruptcy Code.

"Bank:' means Allied Irish Banks, p.l.c., New York Branch (the issuer of the Original Letter of Credit), its successors or assigns, including any other entity which may, from time to time, be the issuer of the Letter of Credit then in effect, as provided herein.

C-1 ·-

"Bank Default" means failure by the Bank to honor a drawing made under and in strict compliance with the terms of the Letter of Credit, unless such failure is a result of the Bank complying with the order of any court.

"Bank Insolvency" means a decree or order of a court or agency or supervisory authority, having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator of any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding, or for the winding up or liquidation of its affairs has been entered against the Bank or the Bank has consented to the appointment of a conservator or receiver or liquidator in any such proceedings of or relating to the Bank or relating to all or substantially all of its property.

"Basic Payments" means the payments required by Sections 4.02 and 4.03 of the Loan Agreement.

"Beneficial Owner" means the Person for which a DTC Participant holds an interest in the Bonds as shown on the books and records of the DTC Participant.

"Bond Closing' means the date on which there is delivery by the Issuer of and payment for the Bonds.

"Bond Counsel" means the firm of Kutak Rock LLP, of Pasadena, California, or any other firm of nationally recognized bond counsel experienced in tax exempt private activity bond financing and acceptable to the Issuer and the Company.

"Bond Fund'' means the fund so designated in Section 6.03 of the Indenture from which the principal of and interest on the Bonds are payable and within which will be established a General Account and a Letter of Credit Account.

"Bond Purchase Fund'' means the fund so designated in Section 6.04 of the Indenture and within which there will be established a Remarketing Account and a Letter of Credit Account.

"Bond Register" means the register maintained by the Trustee pursuant to Section 2.11 of the Indenture.

"Bond Year" means each 12-month period commencing September 1, and ending on the last day of August of the following year, provided that the first Bond Year will commence on the date of Bond Closing.

"Bondholder'' or "Holder" means the person in whose name a Bond is registered in the Bond Register.

"Bonds" means the Issuer's Variable Rate Demand Revenue Bonds (Southern California Public Radio Project), Series 2005 to be issued pursuant hereto.

"Business Day" means any day which is not (a) a Saturday, Sunday, or in the City of New York, New York, or Minneapolis Minnesota ( or, if different, in the city in which the principal corporate trust office of the Trustee or the principal office of the Remarketing Agent is located) a day on which banking institutions are required or authorized by law (including executive order) to remain closed; or (b) a day on which the New York Stock Exchange is closed.

C-2 -•

"Cede & Co." means initially, Cede & Co., as nominee of DTC and any successor or subsequent such nominee designated by DTC respecting DTC's functions as book-entry depository for any Bond or Bonds.

"Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, and all applicable Treasury Regulations.

"Company" means Southern California Public Radio, a Minnesota nonprofit corporation, its successors and assigns, and any surviving, resulting or transferee corporation or other entity which may assume its obligations pursuant to the Loan Agreement.

"Company Bonds" means any Bonds owned by the Company ( excluding Pledged Bonds), which Bonds were purchased by the Company on the secondary market or from funds provided by the Company pursuant to Section 4.05 of the Indenture, which Company Bonds will be delivered to the Trustee for cancellation in accordance with Section 2.13 of the Indenture.

"Completion Date" means the date established under Section 3.06 of the Loan Agreement.

"Computation Date" has the meaning ascribed to it in Section 2.04 of the Indenture.

"Condemnation" or phrase "eminent domain" as used herein, means the taking or requisition by governmental authority or by a person, firm or corporation acting under governmental authority and a conveyance made under threat of Condemnation, provided such conveyance is made with the approval of the Bank, and "Condemnation award" will mean payment for property condemned or conveyed under threat of Condemnation.

"Construction Fund'' means the fund so designated in Section 6.02 of the Indenture, from which fund Project Costs are paid or reimbursed.

"Conversion Date" means the date as of which the interest rate on the Bonds converts from a Variable Rate to a Fixed Rate as such date is established pursuant to Section 2.04 of the Indenture.

"Cost," "Costs of the Project" or "Project Costs" means the cost items enumerated in Section 3.02 of the Loan Agreement.

"Costs ofIssuance" means all items of expense directly or indirectly payable by or reimbursable to the Issuer or the Company and related to the authorization, issuance, sale and delivery of the Bonds, including but not limited to costs of preparation and reproduction of documents, printing expenses, application, filing and recording fees, initial fees and charges of the Trustee and Paying Agent, legal fees and charges, including the fees and charges of Bond Counsel, fees and disbursements of consultants and professionals, rating agency fees, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds which constitutes a "cost of issuance" within the meaning of Section 147(g) of the Code.

"Costs of Issuance Fund'' means the fund so designated in Section 6.06 of the Indenture, from which fund Costs of Issuance are paid or reimbursed.

"Daily Interest Rate" means, with respect to any series of Bonds, a variable interest rate on the Bonds established daily on each Business Day in accordance with this Indenture and the Remarketing Agreement.

C-3 "Daily Period'' means, with-respect to the Bonds; a period which the· Bonds will bear interest at a Daily Interest Rate.

"Date ofTaxability" means the date as of which the interest on the Bonds is deemed includable in gross income for federal income tax purposes under a Detennination of Taxability.

"Defaulted Interest" has the meaning ascribed to it as stated in Section 2.02 of the Indenture.

"Determination of Taxability" means (a) a final decree or judgment of any federal court, not subject to appeal, or a final action of the Internal Revenue Service, not subject to appeal, that detennines that interest paid or payable on any Bond is or was includable in the gross income of an owner for federal income tax purposes; (b) the receipt by any present or former owner of a Bond, the Trustee, the Borrower or the Issuer of a "notice of deficiency" issued by the Internal Revenue Service or any similar notice assessing or expressing an intention to assess a tax in respect of any interest on the Bonds, if no longer subject to any contest or appeal; or ( c) the execution of a settlement agreement between the Internal Revenue Service and any present or former owner of a Bond, the Trustee, the Borrower or the Issuer under which a tax, penalty or interest in respect of any interest on the Bonds is to be assessed ( other than an agreement pursuant to which the Bonds will continue to be tax exempt); however, no such decree, action, agreement or notice will be considered a "Determination of Taxability" for any purpose hereunder unless the Issuer and the Borrower have been given written notice and, if it is so desired and is legally allowed, the Issuer has been afforded the opportunity to contest the same, either directly or in the name of any owner of a Bond, and until conclusion of any appellate reviews, including judicial decisions and appeals therefrom as may be sought and legally available.

"Discharge Date" means the date on which all Outstanding Bonds are discharged under Article IX.

"DTC'' means Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, or any successor book-entry securities depository for the Bonds appointed pursuant to Section 2.14 of the Indenture.

"DTC Participant" means those broker-dealers, banks and other financial institutions from time to time for which DTC holds Bonds or securities as depository.

"Event ofDefault' means any of the events set forth in Section 10.01 of the Indenture.

"Facility" means the improvements located at 474 South Raymond Avenue, Pasadena, California.

"Federal Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978, as amended, or any similar or succeeding federal bankruptcy law.

"Fixed Letter of Credit Rate" means the Fixed Letter of Credit Rate established in accordance with Section 2.04 of the Indenture.

"Fixed Letter of Credit Rate Period'' means the period from and including the Conversion Date upon which the interest rate on the Bonds converts from the Variable Rate to the Fixed Letter of Credit Rate, to and including the date preceding the payment in full of the Bonds.

"Fixed Rate" means the Fixed Letter of Credit Rate.

C-4 "Fixed Rate Interest Payment Date" means the first March 1 or September 1 next succeeding the Conversion Date, and each March 1 and September 1 thereafter until payment in full of the Bonds including September 1, 2025.

"Fixed Rate Period'' means the period from and including the Conversion Date to and including the date next preceding the payment in full of the Bonds.

"Fund'' means any fund described in Article VI hereof.

"Government Obligations" means direct general obligations of, or obligations the prompt payment of the principal of and the interest is unconditionally guaranteed by, the United States of America.

"Guarantor" means American Public Media Group, a Minnesota corporation.

"Guaranty" means the Guaranty Agreement dated September 1, 2005 pursuant to which American Public Media Group guarantees the Company's obligations under the Loan Agreement.

"Holder" or "Bondholder" means the person in whose name a Bond is registered in the Bond Register.

"Indenture" means this Indenture of Trust by and between the Issuer and the Trustee, as the same may from time to time be amended or supplemented as herein provided.

"Independent Accountant'' means a certified public accountant or firm of certified public accountants registered and qualified to practice as such under the laws of the State of California, and not regularly employed by the Issuer or the Company, except to perform independent reviews of the books and records of either or both of them or other similar periodic reviews.

"Independent Counsef' means any attorney duly admitted to practice law before the highest court of any state, who may be counsel to the Company or the Issuer but who may not be an officer or a full-time employee of the Company or the Issuer.

"Interest Accrual Period'' or "Interest Period'' means: (a) with respect to a Daily Period or a Weekly Period, the period commencing with the first day of each calendar month during such Daily Period or Weekly Period ( or the first day of such Daily Period or Weekly Period, if such day will not be the first day of the month) to and including the earlier of the last day of such calendar month and the last day of such Daily Period or Weekly Period; (b) with respect to a Monthly Period, the period commencing with the first Business Day of each calendar month during such Monthly Period ( or the first day of such Monthly Period, if such day will not be the first Business Day of the month) to and including the earlier of the last day of such calendar month and the last day of such Monthly Period; and (c) with respect to the Fixed Rate Period, a period commencing with the first day of the Fixed Rate Period to and including the last day preceding the first Fixed Rate Interest Payment Date, and thereafter a period commencing with each Interest Payment Date to and including the last day preceding the next Interest Payment Date; provided that the Interest Accrual Period with respect to a Mandatory Tender Date or a Tender Date with respect to remarketed Pledged Bonds which is a Variable Rate Interest Payment Date as described in clauses (b) and ( c ), respectively of the definition thereof, will commence on the first day of the immediately preceding Interest Accrual Period and will end on the day preceding such Variable Rate Interest Payment Date, and the next Interest Accrual Period will commence on such Variable Rate Interest Payment Date.

C-5 "Interest Mode" means a Daily Interest Rate, a W eeldy Interest Rate or a Monthly Interest Rate, as the provisions hereof may require.

"Interest Mode Conversion" means the process whereby the Bonds are converted from one Interest Mode to another pursuant to Section 2.03( c) of the Indenture.

"Interest Mode Conversion Date" means the date on which the Bonds are converted to a different Interest Mode.

"Interest Payment Date" means each Fixed Rate Interest Payment Date and each Variable Rate Interest Payment Date.

"Internal Revenue Code" or "Code" means the Internal Revenue Code of 1986, as amended, and all applicable Treasury Regulations.

"Issuer'' means the California Infrastructure and Economic Development Bank, its successors and assigns.

"Letter of Credit" means the Original Letter of Credit including any extension thereof or, upon delivery of any Alternate Letter(s) of Credit to the Trustee in accordance with Section 7.04 of the Indenture and Section 4.08(b) of the Loan Agreement, such Alternate Letter(s) of Credit.

"Loan Agreement" means the Loan Agreement of even date herewith by and between the Issuer and the Company, as the same may from time to time be amended or supplemented as provided therein and in this Indenture.

"Mandatory Tender Date" has the meaning ascribed to it in Section 4.02 of the Indenture.

"Mandatory Tender Notice" has the meaning ascribed to it in Section 4.02(b) of the Indenture.

"Maturity Date" or "Maturity" means any date on which principal of or interest or premium, if any, on the Bonds is due, whether at maturity, on a scheduled interest payment date, or upon redemption or acceleration, or otherwise.

"Monthly Interest Rate" means, with respect to the Bonds, a variable interest rate on the Bonds established monthly in accordance with this Indenture and the Remarketing Agreement.

"Monthly Period" means, with respect to the Bonds, a period during which the Bonds will bear interest at a Monthly Interest Rate.

"Moody's" means Moody's Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation will be dissolved or liquidated or will no longer perform the functions of a municipal securities rating agency, "Moody's" will be deemed to refer to any other nationally recognized municipal securities rating agency designated by the Issuer (other than Standard & Poor's).

"Notice by Mail" means a written notice meeting the requirements of this Indenture mailed by first-class mail, postage prepaid, to the Holders of specified Bonds at the addresses shown in the Bond Register.

C-6 "Optional ·Tender Date" means any date on which a Bond is to be purchased pursuant to Section 4.01 of the Indenture.

"Optional Tender Notice" has the meaning ascribed to it in Section 4.01 (a)(ii) of the Indenture.

"Original Letter of Credit" means the Letter of Credit issued by Allied Irish Banks, p.l.c., New York Branch, to the Trustee contemporaneously with the original issuance of the Bonds.

"Original Purchaser" means the bank, investment banker, bond dealer, registered investment company, or other person who acts as underwriter or otherwise purchases the Bonds from the Issuer.

"Outstanding Bonds" means, as of the date of determination, all Bonds theretofore issued and delivered under this Indenture except:

(a) Bonds theretofore canceled by the Trustee or Paying Agent or delivered to the Trustee or Paying Agent canceled or for cancellation;

(b) Bonds for which payment or redemption moneys or securities ( as provided in Article IX) will have been theretofore deposited with the Trustee or Paying Agent in trust for the Holders of such Bonds; provided, however, that if such Bonds are to be redeemed, notice of such redemption will have been duly given pursuant to this Indenture or irrevocable action will have been taken to call such Bonds for redemption at a stated redemption date; and

(c) Bonds in exchange for or in lieu of which other Bonds will have been issued and delivered pursuant to this Indenture; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Bonds have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Company Bonds will be disregarded and deemed not to be Outstanding Bonds, except that in determining whether the Trustee will be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Trustee knows to be Bonds owned by the Company will be disregarded.

"Paying Agent" means the Trustee or any other entity designated pursuant to this Indenture as the agent of the Issuer and the Trustee to receive and disburse the principal of and premium, if any, and interest on the Bonds.

"Permitted Investments" means:

(a) Government Obligations;

(b) shares (including money market mutual fund shares offered by the Trustee) of an investment company registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and whose only investments are obligations described in clause (a) above;

( c) any general obligation of the State of California or any of its political subdivisions; provided that securities described in clause (a) above have been irrevocably deposited in escrow to effect discharge of the general obligations in the same manner and subject to the same conditions required to effect discharge of the Bonds under Article IX;

C-7 ( d) · certificates of deposit with fixed maturities, time deposits, repurchase agreements or any other direct obligation with or of either the Bank or any other national or state bank or federally chartered savings and loan association whose senior debt obligations are rated in the highest short-term or long term rating category by a Rating Agency or any other bank if the debt obligations for which such bank's letters of credit are the primary basis are rated in the highest short-term rating category by a Rating Agency which initially rated the Bonds;

( e) investment agreements continuously secured by the obligations listed in clause (a) above, with any nationally or state-chartered bank, foreign bank acting through a U.S. branch, financial institution, trust company or broker or dealer (as defined by the Securities Exchange Act of 1934, as amended) which has long-term debt obligations rated in one of the three highest rating categories by Standard & Poor' s Corporation or Moody's fuvestors Service, or, upon the discontinuance of either rating service or both of such rating services, any other nationally recognized rating service;

(f) investment agreements with any nationally or state-chartered bank, any foreign bank acting through a U.S. branch, any financial institution, insurance company, trust company or broker or dealer (as defined by the Securities Exchange Act of 1934, as amended) which has long-term debt obligations rated in one of the two highest rating categories by Standard & Poor's Corporation or Moody's fuvestors Service, or, upon the discontinuance of either rating service or both of such rating services, any other nationally recognized rating service; and

(g) prior to the Conversion Date, any other investments permitted by the Bank.

"Person" means any natural person, corporation, joint venture, cooperative, partnership, trust or unincorporated organization, government or governmental body or agency, political subdivision or other legal entity, as in the context may be appropriate.

"Pledge and Security Agreement" means the Pledge and Security Agreement dated as of September 1, 2005 between the Company, the Trustee and the Bank and any supplements and amendments thereto.

"Pledged Bonds" means any Bonds purchased by the Trustee for the account of the Company pursuant to Sections 4.01 and 4.02 of the fudenture and held by the Trustee as the agent of the Bank, pursuant to the Pledge and Security Agreement.

"Prime Rate" means the rate of interest publicly announced from time to time by the Bank, or its successor, as its base or prime rate of interest, which rate will change when and as such base or prime rate changes. Actual rates charged by the Bank may be at, below or above the Prime Rate.

"Project" means the Facility, Project Equipment and Project Premises, as they may at any time exist.

"Project Equipment" means any and all (a) fixtures or tangible personal property now or hereafter attached or affixed to the Project Premises and acquired from the proceeds of the Bonds; (b) other tangible personal property now or hereafter located within or used in connection with the Project Premises or the Facility and acquired, in whole or part, from proceeds of the Bonds; and ( c) any additions to, replacements of and substitutions for any of the foregoing.

"Project Premises" means the real estate located at 474 South Raymond Avenue, Pasadena, California.

C-8 "Rate Determination Date" means, with respect to the Bonds, (a) prior to the Conversion Date; the date(s) specified herein with respect to each Interest Mode; and (b) with respect to the period on and after the Conversion Date, the Computation Date.

"Rating Agency" means Standard & Poor's or Moody's.

"Rating Category" means one of the generic rating categories of a Rating Agency, without regard to any refinement or gradation of such Rating Category by a numerical or other modifier.

"Rebate Amounts" means the amount determined pursuant to Section 7.07(k) of the Loan Agreement to be rebated to the United States.

"Rebate Fund'' means the fund of that name created pursuant to Section 6.07 of the Indenture.

"Record Date" means (a) with respect to each Variable Rate Interest Payment Date, the Business Day preceding such Variable Rate Interest Payment Date; and (b) with respect to each Fixed Rate Interest Payment Date, the fifteenth day of the calendar month preceding such Fixed Rate Interest Payment Date, whether or not such day is a Business Day.

"Redemption Date" when used with respect to any Bond to be redeemed, means the date on which it is to be redeemed pursuant hereto.

"Redemption Price" when used with respect to any Bond to be redeemed, means the price at which it is to be redeemed pursuant hereto.

"Regular Interest Payments" means all interest payments on the Bonds, other than Special Interest Payments.

"Reimbursement Agreement" means the Reimbursement Agreement dated as of September 1, 2005, by and between the Company and the Bank, and any amendments and supplements thereto and any comparable agreement relating to any Alternate Letter of Credit.

"Related Documents" means the Loan Agreement, the Remarketing Agreement, the Pledge and Security Agreement and the Letter of Credit.

"Remarketing Agent" means Piper Jaffray & Co., or any successor Remarketing Agent appointed and serving in such capacity pursuant to this Indenture.

"Remarketing Agreement' means the Remarketing Agreement, dated as of September 1, 2005, between the Company and the Remarketing Agent as the same may be amended from time to time, and if a successor Remarketing Agent is appointed in accordance with this Indenture, "Remarketing Agreement" will mean such other similar agreement between the Company and such successor Remarketing Agent.

"Representation Letter" means such Letter of Representations to DTC or other documentation required by DTC as a condition to its acting as book-entry depository for any Bond or Bonds together with any replacement thereof or amendment or supplement thereto ( and including any standard procedures or policies referenced therein or applicable thereto) respecting the procedures and other matters relating to DTC's role as book-entry depository for the Bonds.

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"Representative" means the Executive Director of the Issuer or an officer of the Company, or any other person at any time designated to act on behalf of the Issuer or the Company, as the case may be, as evidenced by a written certificate furnished to the other party and the Trustee containing the specimen signature of such person and signed for the Issuer by its Executive Director or Chair or for the Company by an officer thereof.

"Responsible Agent" means any person duly authorized and designated by the Trustee to act on its behalf in carrying out the applicable duties and powers of the Trustee as set forth in this Indenture (any action required by the Trustee under this Indenture may be taken by a Responsible Agent).

"Restricted Obligations" means obligations which are issued by the United States Treasury and any other Permitted Investments, the investment in which will not cause the Bonds to be federally guaranteed obligations within the meaning of Section 149(b) of the Code.

"Retained Rights" means the rights of the Issuer to opinions, notices, indemnification and Additional Charges.

"Special Interest Payments" means all payments of, or with respect to, interest on the Bonds made upon the acceleration of the Bonds pursuant to Section 10.02 of the Indenture.

"Special Record Date" means the date fixed by the Trustee pursuant to Section 2.02 of the Indenture relating to the payment of any Defaulted Interest.

"Standard & Poor's" means Standard & Poor's Ratings Group, a division of The McGraw Hill Companies, Inc. its successors and their assigns, and if such corporation will be dissolved or liquidated or will no longer perform the functions of a municipal securities rating agency, "Standard & Poor' s" will be deemed to refer to any other nationally recognized municipal securities rating agency designated by the Issuer (other than Moody's).

"Stated Maturity" when used with respect to any Bond or any installment of interest thereon, means the date specified in such Bond as the fixed date on which principal of such Bond or such installment of interest is due and payable.

"Tax Certificate" means, collectively, the Tax Certificate and Agreement, dated September 8, 2005, executed by the Issuer and the Borrower.

"Tender Date" means each Optional Tender Date and the Mandatory Tender Date.

"Termination Date" means the date on which a Letter of Credit expires in accordance with its terms.

"Treasury Regulations" means all proposed, temporary or permanent federal income tax regulations then in effect and applicable.

"Trust Estate" means the Trust Estate as defined and set forth in the granting clauses hereof.

"Trustee" means Wells Fargo Bank, National Association, in Minneapolis, Minnesota, and any co-trustee or successor trustee appointed, qualified and then acting as such under the provisions of this Indenture.

C-10 "Unpaid Bonds" means all Outstanding Bonds and ~y other Bonds which have neither matured nor been redeemed or purchased and canceled under this Indenture.

"Untendered Bond'' has the meaning ascribed to it as set forth in Section 4.08 of the Indenture.

"Variable Rate" means the Daily, Weekly or Monthly Interest Rate from time to time in effect on the Bonds from and including the date of issuance to, but not including the Conversion Date, if any, as determined and redetermined in accordance with the Remarketing Agreement and with Section 2.03 of the Indenture.

"Variable Rate Bond'' means a Bond bearing interest at a Daily, Weekly or Monthly Interest Rate.

"Variable Rate Interest Payment Date" means (a) the first Business Day of each month, commencing the first Business Day of the month after the Bonds are issued, (b) each Mandatory Tender Date described in the Indenture with respect to the Bonds subject thereto, and (c) the date of payment in full of the Bonds.

"Variable Rate Period'' means the period from Bond Closing until the earlier of (a) the day next preceding the Conversion Date; or (b) the date of the last maturity of the Bonds, during which period the Bonds bear interest at the Variable Rate.

"Weekly Interest Rate" means the respective Variable Rate established weekly in accordance with this Indenture.

"Weekly Period'' means, with respect to the Bonds, a period during which the Bonds will bear interest at a Weekly Interest Rate.

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