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payments from AMBAC Indemnity under the terms of the Municipal Bond Insurance Policy, and <br /> shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered <br /> owners of Bonds entitled to receive full or partial interest payments from AMBAC Indemnity, and <br /> (ii) to pay principal upon Bonds surrendered to the Insurance Trustee by the registered owners of <br /> Bonds entitled to receive full or partial principal payments from AMBAC Indemnity. <br /> (d) the City or the Bond Registrar shall, at the time it provides notice to AMBAC <br /> Indemnity pursuant to (a) above, notify registered owners of Bonds entitled to receive the <br /> payment of principal or interest thereon from AMBAC Indemnity (i) as to the fact of such <br /> entitlement, (ii) that AMBAC Indemnity will remit to them all or a part of the interest payments <br /> next coming due upon proof of bondholder entitlement to interest payments and delivery to the <br /> Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of <br /> the registered owner's right to payment, (iii) that should they be entitled to receive full payment of <br /> principal from AMBAC Indemnity, they must surrender their Bonds (along with an appropriate <br /> instrument of assignment satisfactory to the Insurance Trustee to permit ownership of such Bonds <br /> to be registered in the name of AMBAC Indemnity) for payment to the Insurance Trustee, and not <br /> the Bond Registrar, and (iv) that should they be entitled to receive partial payment of principal <br /> from AMBAC Indemnity, they must surrender their Bonds for payment thereon first to the Bond <br /> Registrar, who shall note on such Bonds the portion of the principal paid by the Bond Registrar, <br /> and then, along with an appropriate instrument of assignment satisfactory to AMBAC Indemnity, <br /> to the Insurance Trustee, which will then pay the unpaid portion of principal. <br /> (e) in the event that the Bond Registrar has notice that any payment of principal of or <br /> interest on a Bond which has become due for payment and which is made to a bondholder by or <br /> on behalf of the City has been deemed a preferential transfer and theretofore recovered from its <br /> registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in <br /> accordance with the final, nonappealable order of a court having competent jurisdiction, the Bond <br /> Registrar shall, 'at the time AMBAC Indemnity is notified pursuant to (a) above, notify all <br /> -24- DOTOOM.00c 94/01/19 <br />