Exhibit 10.6

 

TRUST INDENTURE

 

BETWEEN

 

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MISSISSIPPI BUSINESS FINANCE CORPORATION

 

AND

 

J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

as Trustee

 

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RELATING TO:

 

$25,000,000 Mississippi Business Finance Corporation

Variable Rate Demand Environmental Improvement Revenue Bonds

(Trex Company, Inc. Project), Series 2004

 

Dated as of December 1, 2004

 

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TABLE OF CONTENTS

 

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ARTICLE I DEFINITIONS

   2

ARTICLE II THE BONDS

   12

SECTION 201.

  

Authorized Amount of Bonds

   12

SECTION 202.

  

Issuance of Bonds

   12

SECTION 203.

  

Interest Rates on Bonds

   13

SECTION 204.

  

Conversion of Interest Rate on Bonds

   15

SECTION 205.

  

Purchase of Bonds at Option of Bondholder

   16

SECTION 206.

  

Mandatory Tender of Bonds

   17

SECTION 207.

  

Procedures for Remarketing of Bonds

   19

SECTION 208.

  

Execution; Limited Obligation

   21

SECTION 209.

  

Certificate of Authentication

   22

SECTION 210.

  

Form of Bonds

   22

SECTION 211.

  

Delivery of Bonds

   22

SECTION 212.

  

Mutilated, Lost, Stolen or Destroyed Bonds

   24

SECTION 213.

  

Exchangeability and Transfer of Bonds; Persons Treated as Owners

   24

SECTION 214.

  

Replacement Bonds

   26

SECTION 215.

  

Cancellation

   26

SECTION 216.

  

Ratably Secured

   26

SECTION 217.

  

Redemption of Bonds

   26

SECTION 218.

  

Partial Redemption of Bonds

   28

SECTION 219.

  

Notice of Redemption

   28

SECTION 220.

  

Book-Entry Only Registration of the Bonds

   30

SECTION 221.

  

CUSIP Numbers

   32

ARTICLE III SECURITY

   32

SECTION 301.

  

Security

   32

SECTION 302.

  

Payment of Bonds and Performance of Covenants

   33

SECTION 303.

  

Authority

   33

SECTION 304.

  

No Litigation

   34

SECTION 305.

  

Further Assurances

   34

 

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SECTION 306.

  

No Other Encumbrances

   34

SECTION 307.

  

No Recourse

   34

SECTION 308.

  

Letter of Credit

   34

ARTICLE IV FUNDS

   37

SECTION 401.

  

Establishment and Use of Bond Fund

   37

SECTION 402.

  

Establishment and Use of Project Fund

   40

SECTION 403.

  

Creation and Sources of Bond Purchase Fund

   40

SECTION 404.

  

Use of Moneys in the Bond Purchase Fund

   41

SECTION 405.

  

Deposit of Bond Proceeds

   43

SECTION 406.

  

Account Statements

   43

SECTION 407.

  

Investment of Project Fund and Bond Fund Moneys

   44

SECTION 408.

  

Arbitrage

   44

SECTION 409.

  

Rebate of Certain Arbitrage Earnings

   45

ARTICLE V DISCHARGE OF LIEN

   46

SECTION 501.

  

Discharge of Lien and Security Interest

   46

SECTION 502.

  

Provision for Payment of Bonds During Fixed Rate Period

   47

SECTION 503.

  

Discharge of this Indenture

   48

SECTION 504.

  

Unclaimed Moneys

   48

ARTICLE VI DEFAULT PROVISIONS AND REMEDIES

   49

SECTION 601.

  

Events of Default

   49

SECTION 602.

  

Acceleration

   50

SECTION 603.

  

Other Remedies; Rights of Bondholders

   50

SECTION 604.

  

Right of Bondholders and Bank to Direct Proceedings

   51

SECTION 605.

  

Discontinuance of Default Proceedings

   52

SECTION 606.

  

Waiver

   52

SECTION 607.

  

Application of Moneys

   52

ARTICLE VII THE TRUSTEE AND THE REMARKETING AGENT

   53

SECTION 701.

  

Appointment

   53

SECTION 702.

  

Fees, Expenses

   56

SECTION 703.

  

Intervention in Litigation

   57

 

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SECTION 704.

  

Resignation; Appointment of Successor Trustee; Successor Trustee Upon Merger,
Consolidation or Sale

   57

SECTION 705.

  

Removal of Trustee

   59

SECTION 706.

  

Instruments of Bondholders

   59

SECTION 707.

  

Power to Appoint Co-Trustees

   59

SECTION 708.

  

Recordation and Other Instruments

   61

SECTION 709.

  

Remarketing Agent

   62

SECTION 710.

  

Qualifications of Remarketing Agent; Resignation; Removal

   62

SECTION 711.

  

Trustee as Custodian of the Funds, Bond Registrar, Paying Agent and Tender Agent

   63

SECTION 712.

  

Several Capacities

   63

SECTION 713.

  

Representations, Warranties and Covenants of the Trustee

   63

ARTICLE VIII AMENDMENTS, SUPPLEMENTAL INDENTURES

   64

SECTION 801.

  

Supplemental Indentures

   64

SECTION 802.

  

Amendments to Indenture; Consent of Bondholders, the Bank and the Borrower

   65

SECTION 803.

  

Amendments to Loan Agreement Not Requiring Consent of Bondholders

   65

SECTION 804.

  

Amendments to Loan Agreement Requiring Consent of Bondholders and the Bank

   66

SECTION 805.

  

Amendments, Changes and Modifications to the Letter of Credit and the Promissory
Note

   66

SECTION 806.

  

Notice to and Consent of Bondholders

   67

SECTION 807.

  

Waivers

   67

ARTICLE IX MISCELLANEOUS

   67

SECTION 901.

  

Limitation of Rights

   67

SECTION 902.

  

Rights of the Bank

   67

SECTION 903.

  

Severability

   68

SECTION 904.

  

Notices

   68

SECTION 905.

  

Additional Notices to Rating Agencies

   69

SECTION 906.

  

Payments Due on Non-Business Days

   69

 

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TABLE OF CONTENTS

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SECTION 907.

  

Interest Computation

   70

SECTION 908.

  

Fees, Charges and Expenses of the Issuer

   70

SECTION 909.

  

Binding Effect

   70

SECTION 910.

  

Captions

   71

SECTION 911.

  

Governing Law

   71

SECTION 912.

  

Execution in Counterparts

   71

EXHIBIT A Form of Variable Rate Series 2004 Bond

    

EXHIBIT B Form of Fixed Rate Series 2004 Bond

    

 

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TRUST INDENTURE

 

THIS TRUST INDENTURE (“Indenture”) dated as of the 1st day of December, 2004,
between the MISSISSIPPI BUSINESS FINANCE CORPORATION, a public corporation duly
organized and existing under the laws of the State of Mississippi (the
“Issuer”), and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national
banking association organized under the laws of the United States of America, as
trustee, and its successor in trust and its assignees (the “Trustee”).

 

WHEREAS, the Issuer is authorized pursuant to the provisions of Section
57-10-401, et seq., Mississippi Code of 1972, as amended (the “Act”), to issue
its revenue bonds to finance the acquisition, construction and equipping of any
“project” (as defined in the Act), in furtherance of the public purposes set
forth in the Act; and

 

WHEREAS, the Issuer has agreed to issue its $25,000,000 Variable Rate Demand
Environmental Improvement Revenue Bonds (Trex Company, Inc. Project), Series
2004 (the “Bonds”), and lend the proceeds of the sale thereof to Trex Company,
Inc., a Delaware corporation (the “Borrower”), for the purpose of financing all
or a portion of the costs of the acquisition, construction and equipping of
solid waste disposal facilities in the City of Olive Branch, DeSoto County,
Mississippi, to be used by the Borrower in connection with the manufacture of
non-wood decking, railing and fencing products (the “Project”), and (ii) to pay
a portion of the costs of issuance of the Bonds; and

 

WHEREAS, the Issuer and the Borrower will enter into a Loan Agreement, dated as
of December 1, 2004 (the “Loan Agreement”), pursuant to which the Issuer will
agree to lend the proceeds of the Bonds to the Borrower and the Borrower will
agree to make payments sufficient to pay the principal and Purchase Price (as
hereinafter defined) of, and redemption premium, if any, and interest on, the
Bonds as the same become due and payable and to pay administrative expenses in
connection with the Bonds; and

 

WHEREAS, as security for the payment of the Bonds issued pursuant to this
Indenture, the Issuer has agreed to assign and pledge to the Trustee, the
Security (as hereinafter defined); and

 

WHEREAS, JPMorgan Chase Bank, N.A., a national banking association (the “Bank”),
will issue a Letter of Credit (as hereinafter defined) in favor of the Trustee,
for the account of the Borrower, obligating the Bank to pay to the Trustee
during the periods described therein, upon request and in accordance with the
terms thereof, the amounts described therein for the purpose of making certain
payments on or with respect to the Bonds (other than Bonds pledged to the Bank,
which Bonds shall not be entitled to any benefit of the Letter of Credit); and

 

WHEREAS, all things necessary to make the Bonds, when authenticated by the
Trustee and issued and delivered as in this Indenture provided, the legal,
valid, binding and enforceable limited obligations of the Issuer, according to
the import thereof, and to create a valid assignment and pledge of the Security
to the payment of the Bonds, have been done and performed, and the

 

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execution and delivery of this Indenture and the execution, issuance and
delivery of the Bonds, subject to the terms hereof, have in all respects been
authorized;

 

NOW, THEREFORE, in consideration of the premises and of the covenants and
undertakings herein expressed, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

All terms used herein which are not defined herein but are defined in the Loan
Agreement identified below shall have the meanings therein set forth, which
definitions are by this reference incorporated herein and made a part hereof. In
addition to terms elsewhere defined in this Indenture, the following words and
terms as used in this Indenture and the preambles hereto shall have the
following meanings unless the context or use clearly indicates another or
different meaning or intent and such definitions shall be equally applicable to
both the singular and plural forms of the terms and words herein defined:

 

“Act” means Section 57-10-401 et seq., Mississippi Code of 1972, as amended.

 

“Act of Bankruptcy” means the filing of a petition in bankruptcy (or the other
commencement of a bankruptcy or similar proceeding) by or against the Issuer,
the Borrower, or any Insider of the Borrower or the Issuer under any applicable
bankruptcy, insolvency, reorganization or similar law, now or hereafter in
effect.

 

“Alternate Letter of Credit” means an irrevocable letter of credit authorizing
drawings thereunder by the Trustee, issued by a national banking association, a
bank, a trust company or other financial institution, and satisfying the
requirements of Section 308 hereof.

 

“Authorized Denominations” means denominations of $100,000 or any integral
multiple of $5,000 in excess thereof.

 

“Bank” means initially JPMorgan Chase Bank, N.A., a national banking
association, in its capacity as the issuer of the initial Letter of Credit, its
successors in such capacity and their assigns, and, upon the acceptance of any
Alternate Letter of Credit by the Trustee, the issuer of such Alternate Letter
of Credit, its successors in such capacity and their assigns.

 

“Beneficial Owner” means, when the Bonds are held in a book-entry only system,
the owner of a Bond or portion thereof for federal income tax purposes.

 

“Bond” or “Bonds” means the Bonds authorized to be issued pursuant to Sections
201 and 202 hereof.

 

“Bond Counsel” means Watkins Ludlam Winter & Stennis, P.A. or other nationally
recognized bond counsel selected by the Borrower and reasonably satisfactory to
the Trustee.

 

“Bond Fund” means the fund created by Section 401 of this Indenture.

 

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“Bond Purchase Agreement” means the Bond Purchase Agreement among the
Underwriter, the Issuer and the Borrower, dated December     , 2004, relating to
the initial purchase of the Bonds.

 

“Bond Purchase Fund” means the fund created by Section 403 of this Indenture.

 

“Bond Register” means the books of the Issuer kept by the Trustee to evidence
the registration, transfer and exchange of Bonds.

 

“Bond Resolution” means the resolution adopted by the Issuer on November 17,
2004, authorizing and approving the issuance and sale of the Bonds pursuant to
this Indenture.

 

“Bondholder” or “holder” means the Registered Owner of any Bond.

 

“Borrower” means Trex Company, Inc., a Delaware corporation.

 

“Borrower Bonds” means Bonds, other than Pledged Bonds, the Registered Owner or
Beneficial Owner of which is the Borrower (or any affiliate of the Borrower).
For purposes of this definition, (a) an “affiliate” means any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Borrower; and (b) “control” means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.

 

“Business Day” means any day other than (i) a Saturday, (ii) a Sunday, (iii) a
day on which banking institutions in the city in which the administrative trust
office or the payment trust office of the Trustee (or its bond registrar, paying
agent or tender agent offices) is located or the principal office of the
Remarketing Agent is located or the office of the Bank at which action is to be
taken to realize moneys under the Letter of Credit are required or authorized by
law or executive order to be closed, or (iv) a day on which the New York Stock
Exchange is closed.

 

“Cede” means Cede & Co., as nominee of the Depository.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the rulings and
regulations (including temporary and proposed) promulgated thereunder and under
the Internal Revenue Code of 1954, as amended.

 

“Conversion Date” means the Business Day on which the Fixed Rate on the Bonds
shall be effective pursuant to Section 204 hereof.

 

“Conversion Notice” means the notice given by the Borrower of its intent to
convert the interest rate on the Bonds to the Fixed Rate pursuant to Section
204(a)(1) hereof.

 

“Costs of the Project” shall have the meaning specified in the Loan Agreement.

 

“Counsel” means an attorney, or firm thereof, admitted to practice law before
the highest court of any state in the United States of America or the District
of Columbia.

 

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“Depository” means any securities depository that is a clearing agency under
federal law operating and maintaining, with its participants or otherwise, a
book entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds in book entry form, the use of
which will not impair the federal tax exemption of interest on the Bonds, and
includes and means initially The Depository Trust Company (a limited purpose
trust company), New York, New York.

 

“Determination of Taxability” means a determination that the interest income on
any of the Bonds is included in gross income of the Bondholder or Beneficial
Owner for federal income tax purposes, which determination shall be deemed to
have been made upon the occurrence of the first to occur of the following:

 

(a) The day on which the Borrower is advised in writing by the Commissioner or
any District Director of the Internal Revenue Service that, based upon any
filings of the Borrower, or upon any review or audit of the Borrower, or upon
any other grounds whatsoever, the interest on the Bonds is includable for
federal income tax purposes in the gross income of any current or former holder
or Beneficial Owner thereof;

 

(b) The day on which the Borrower receives notice from the Trustee in writing
that the Trustee has been advised in writing by any current or former holder or
Beneficial Owner of a Bond that the Internal Revenue Service has issued a
statutory notice of deficiency or similar notice to such current or former
holder or Beneficial Owner which asserts in effect that the interest on the
Bonds received by such current or former holder or Beneficial Owner is
includable for federal income tax purposes in the gross income of such current
or former holder or Beneficial Owner;

 

(c) The day on which the Borrower is advised in writing by the Commissioner or
any District Director of the Internal Revenue Service that there has been issued
a public or private ruling of the Internal Revenue Service or a technical advice
memorandum issued by the national office of the Internal Revenue Service that
the interest on the Bonds is includable for federal income tax purposes in the
gross income of any current or former holder or Beneficial Owner of such Bonds;

 

(d) The day on which the Borrower is advised in writing that a final
determination, from which no further right of appeal exists, has been made by a
court of competent jurisdiction in the United States of America in a proceeding
with respect to which the Borrower has been given written notice and an
opportunity to participate and defend that the interest on the Bonds is
includable for federal income tax purposes in the gross income of any current or
former holder or Beneficial Owner of such Bonds; or

 

(e) The date specified in a written opinion to the Borrower and the Trustee from
Bond Counsel as the day on which interest on the Bonds first became or will
become includable for federal income tax purposes in the gross income of any
current or former holder or Beneficial Owner of such Bonds;

 

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provided, however, (i) no Determination of Taxability shall occur if the
interest on any of the Bonds is included in gross income for federal income tax
purposes solely because such Bonds were held by a Person who is a Substantial
User or a Related Person, and (ii) no Determination of Taxability shall occur
under subparagraph (a), (b) or (c) of this paragraph unless the Borrower has
been afforded the opportunity, at its expense, to contest any such conclusion
and/or assessment after furnishing the Trustee, the Issuer and the Bank, within
thirty (30) days after the occurrence of an event described in subparagraph (a),
(b) or (c) of this paragraph, with an opinion of Bond Counsel to the effect that
there is a reasonable likelihood that the Borrower will prevail in such contest,
and, further, no Determination of Taxability shall occur until such contest, if
made, has been finally determined. The Borrower shall promptly notify the
Trustee, the Bank and the Issuer of any event described in subparagraph (a),
(c), (d) or (e) of this paragraph and shall further promptly notify the Trustee,
the Bank and the Issuer of any final determination if the Borrower has contested
under subparagraph (a), (b) or (c) of this paragraph. The Borrower shall be
deemed to have been afforded the opportunity to contest the occurrence of a
Determination of Taxability if it shall have been permitted to commence and
maintain any action in the name of any current or former holder or Beneficial
Owner of such Bonds to judgment and through any appeals therefrom or other
proceedings related thereto.

 

“Eligible Funds” means moneys held by the Trustee which consist of any of the
following:

 

(a) Moneys representing the proceeds from the remarketing by the Remarketing
Agent of Bonds tendered for purchase pursuant to Section 205 or 206 hereof to
any person other than the Borrower, the Issuer, any Insider of the Borrower or
the Issuer, or any other person obligated (as guarantor or otherwise) to make
payments on the Bonds or under the Loan Agreement or the Reimbursement
Agreement, which in each case were at all times since their receipt by the
Trustee held in a separate and segregated account or accounts or sub-account or
sub-accounts in which no moneys which were not Eligible Funds were at any time
held;

 

(b) Amounts paid by the Bank to the Trustee under the Letter of Credit which
were at all times since their receipt by the Trustee held in a separate and
segregated account or accounts or sub-account or sub-accounts in which no moneys
other than those drawn under the Letter of Credit were at any time held; or

 

(c) Moneys with respect to which the Trustee has received an unqualified opinion
of Counsel familiar with bankruptcy matters (which may assume that no Bondholder
is an Insider of the Borrower or the Issuer) to the effect that the use of such
moneys to pay the principal of, premium, if any, Purchase Price or interest on
the Bonds would not be avoidable as a preference under Section 547 of the United
States Bankruptcy Code in the event of the filing of a petition thereunder by or
against the Issuer or the Borrower.

 

Notwithstanding the foregoing, (i) when used with respect to the payment of any
amounts due in respect of Pledged Bonds, the term “Eligible Funds” shall mean
any moneys held by the Trustee and the proceeds from the investment thereof,
except for moneys realized under the Letter of Credit and (ii) if the Bonds are
not secured by a Letter of Credit during the Fixed Rate

 

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Period, the term “Eligible Funds” shall mean any moneys furnished to the Trustee
and the proceeds of the investment thereof.

 

“Eligible Funds Account” means the account within the Bond Fund established
pursuant to Section 401 of the Indenture.

 

“Event of Default” means any of the events specified in Section 601 hereof.

 

“Favorable Opinion of Bond Counsel” means an opinion of Bond Counsel addressed
to the Issuer and the Trustee to the effect that the action proposed to be taken
is not prohibited by the laws of the State or this Indenture and will not
adversely affect any exclusion by the holders or Beneficial Owners from gross
income for federal income tax purposes of interest on the Bonds.

 

“Fixed Rate” means the interest rate on the Bonds during the Fixed Rate Period
established pursuant to Section 203(c) hereof.

 

“Fixed Rate Determination Date” means the date on which the Remarketing Agent
determines the Fixed Rate, which shall be a Business Day not more than twenty
(20) Business Days nor less than five (5) Business Days prior to the Conversion
Date.

 

“Fixed Rate Period” means the period from and including the Conversion Date to
and including the date of payment in full of the Bonds.

 

“Government Obligations” means obligations of the United States, its agencies,
or United States government sponsored enterprises, or obligations the timely
payment of principal and interest on which is unconditionally guaranteed by the
United States or its agencies.

 

“Government Obligations Fund” means a fund which is composed solely of
Government Obligations and repurchase agreements secured by Government
Obligations; provided that if the Bonds are then rated, such fund must be rated
by each Rating Agency then rating the Bonds at least as high as the then current
rating on the Bonds at the time of such investment.

 

“Indenture” means this Trust Indenture dated December 1, 2004 between the Issuer
and the Trustee, as amended or supplemented from time to time as permitted
hereby.

 

“Insider” means an “insider” as defined in Title 11 of the United States Code,
as amended from time to time, or any substitute or replacement legislation (the
“Bankruptcy Code”).

 

“Interest Payment Date” means (i) during the Variable Rate Period, the first
Business Day of each month, commencing with the first Business Day of the month
following the Issue Date, (ii) the Conversion Date, and (iii) following the
Conversion Date, each June 1 and December 1.

 

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“Issue Date” means the date on which the Bonds are delivered to the purchaser or
purchasers thereof upon original issuance.

 

“Issuer” means the Mississippi Business Finance Corporation, a public
corporation duly organized and existing under the laws of the State of
Mississippi, or any successor to its rights and obligations under the Loan
Agreement and this Indenture.

 

“J.J. Kenny Index” means, as of any date, the index of thirty (30) day yields on
high grade tax-exempt municipal bonds as determined by J.J. Kenny Co., Inc. or
any successor thereto and published on such date (or, if not published on such
date, on the most recent day prior thereto on which such index shall have been
so published).

 

“Letter of Credit” means a letter of credit satisfying the requirements of
Section 308 hereof, including any extensions or amendments thereto, and
including any Alternate Letter of Credit delivered pursuant to Section 308.

 

“Letter of Credit Account” means the account within the Bond Fund established
pursuant to Section 401 of this Indenture.

 

“Letter of Representations” means the blanket agreement of the Issuer to comply
with the operational arrangements of The Depository Trust Company and any
similar agreements with respect to a successor Depository.

 

“Liquidity Drawing” means a drawing under the Letter of Credit in accordance
with the terms thereof to pay the Purchase Price of tendered Bonds.

 

“Loan Agreement” means the Loan Agreement dated as of December 1, 2004, between
the Issuer and the Borrower, as the same may be amended or supplemented from
time to time as permitted thereby.

 

“Loan Repayments” means all amounts required to be paid by the Borrower to the
Issuer (and the Trustee as the assignee of the Issuer) pursuant to the
Promissory Note and Section 3.2 of the Loan Agreement.

 

“Mandatory Tender Date” means any date on which the Bonds are required to be
tendered for purchase in accordance with Section 206 hereof.

 

“Municipal Swap Index” means the Bond Market Association Municipal Swap Index as
of the most recent date for which such index was published or such other weekly,
high-grade index comprised of seven-day, tax-exempt variable rate demand notes
produced by Municipal Market Data, Inc. or its successor, or otherwise
designated by the Bond Market Association.

 

“Non-Eligible Funds Account” means the account within the Bond Fund established
pursuant to Section 401 of this Indenture.

 

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“Outstanding,” when used with reference to the Bonds at any date as of which the
amount of outstanding Bonds is to be determined, means all Bonds which have been
authenticated and delivered by the Trustee hereunder, except:

 

(a) Bonds canceled or delivered for cancellation at or prior to such date;

 

(b) Bonds deemed to be paid in accordance with Section 502 hereof;

 

(c) Bonds in lieu of which others have been authenticated under Sections 212,
213 and 214 hereof;

 

(d) Unsurrendered Bonds; and

 

(e) For purposes of any consent, request, demand, authorization, direction,
notice, waiver or other action to be taken by the holders of a specified
percentage of Outstanding Bonds hereunder, all Bonds held by or for the account
of the Issuer or the Borrower, except that for purposes of any such consent,
request, demand, authorization, direction, notice, waiver or action the Trustee
shall be obligated to consider as not being Outstanding only Bonds of which the
Trustee has actual notice to be so held.

 

“Participant” or “Participants” means securities brokers and dealers, banks,
trust companies and clearing corporations which participate in the Depository
with respect to the Bonds.

 

“Permitted Investments” means any of the following which are not prohibited
under applicable law:

 

(i) Government Obligations;

 

(ii) Obligations of a state of the United States, the District of Columbia or
any possession of the United States, or any political subdivision thereof, which
are described in Section 103(a) of the Code and are rated at the time of
purchase in one of the highest three major grades as determined by at least one
national rating service or are secured, as to payments of principal and
interest, by a letter of credit provided by a financial institution or insurance
provided by a bond insurance company which itself or its debt is rated at the
time of purchase in one of the highest three major grades as determined by at
least one national rating service;

 

(iii) Banker’s acceptances, commercial accounts, certificates of deposit, or
depository receipts issued by a bank, trust company, savings and loan
association, savings bank, credit union or other financial institution whose
deposits are, as appropriate, insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration or any successor
entities and whose reported capital and surplus equal at least $40,000,000;

 

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(iv) Commercial paper rated at the time of purchase within the two highest
classifications established by not less than two national rating services, and
which matures within two hundred seventy (270) days after the date of issue;

 

(v) Repurchase agreements against obligations itemized in paragraph (i) above
which must be executed by a bank or a trust company or by members of the
Association of Primary Dealers or other recognized dealers in United States
securities, the market value of which must be maintained at levels at least
equal to the amounts advanced and which must be held in the custody of the
Trustee or the Trustee’s agent;

 

(vi) Any fund or other pooling arrangement which exclusively purchases and holds
the investments itemized in (i) through (v) above, including without limitation,
one or more money market mutual fund portfolios of the JPMorgan Funds or any
other mutual fund for which the Trustee or any of its affiliates serves as an
investment manager, administrator, servicing agent, and/or custodian or
subcustodian, notwithstanding that (A) the Trustee or an affiliate of the
Trustee receives fees from such funds for services rendered, (B) the Trustee
charges and collects fees for services rendered pursuant to this Indenture,
which fees are separate from the fees received from such funds, and (C) services
performed for such funds and pursuant to this Indenture may at times duplicate
those provided to such funds by the Trustee or its affiliates.

 

(vii) An investment agreement or guaranteed investment contract with a provider
whose unsecured long-term debt is rated at the time of purchase within the two
highest rating classifications established by at least one national rating
service or an investment agreement or guaranteed investment contract which is
guaranteed by an entity meeting the provider requirements described in this
subparagraph (vii); or

 

(viii) shares of a fund registered under the Investment Company Act of 1940, as
amended, whose shares are registered under the Securities Act of 1933, as
amended, which shares, at the time of purchase, are rated by at least one
national ratings service within the two (2) highest rating classifications
(without regard to any refinements or gradation of rating classification by
numerical modifier or otherwise) assigned by such service for an obligation of
that nature including without limitation, one or more money market mutual fund
portfolios of the JPMorgan Funds or any other mutual fund for which the Trustee
or any of its affiliates serves as an investment manager, administrator,
servicing agent, and/or custodian or subcustodian, notwithstanding that (A) the
Trustee or an affiliate of the Trustee receives fees from such funds for
services rendered, (B) the Trustee charges and collects fees for services
rendered pursuant to this Indenture, which fees are separate from the fees
received from such funds, and (C) services performed for such funds and pursuant
to this Indenture may at times duplicate those provided to such funds by the
Trustee or its affiliates.

 

“Pledge Agreement” means, with respect to the Letter of Credit, the agreement
which governs the terms of any Pledged Bonds, and initially shall mean the
Custody, Pledge and

 

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Security Agreement dated as of December 1, 2004 among the Borrower, the Trustee
and the Bank, as the same may be amended or supplemented from time to time.

 

“Pledged Bonds” means, at the time of determination thereof, any Bonds or
beneficial interests in Bonds purchased by the Trustee with payments made under
the Letter of Credit as described in Section 404 hereof and pledged to the Bank
pursuant to the provisions of the Pledge Agreement.

 

“Project” means the acquisition, construction and equipping of solid waste
disposal facilities in the City of Olive Branch, DeSoto County, Mississippi to
be used by the Borrower in connection with the manufacture of non-wood decking,
railing and fencing products, all as more fully described in attached Exhibit D
to the Loan Agreement.

 

“Project Fund” means the fund created by Section 402 of this Indenture.

 

“Promissory Note” means the Promissory Note given by the Borrower to the Issuer
and assigned to the Trustee pursuant to the Loan Agreement, in the form of
attached Exhibit C to the Loan Agreement, as the same may be amended, modified
or supplemented in accordance with the terms of the Loan Agreement.

 

“Proposed Conversion Date” means any date designated by the Borrower as the
Conversion Date in accordance with Section 204 of this Indenture.

 

“Purchase Price” means one hundred percent (100%) of the principal amount of the
Bond or Bonds (or portions thereof in Authorized Denominations) to be purchased
pursuant to the provisions of Sections 205 or 206 hereof plus accrued interest,
if any, thereon to the purchase date.

 

“Rating Agency” means Moody’s Investors Service and/or Standard & Poor’s Ratings
Group or their successors and assigns, according to which of such rating
agencies then rates the Bonds; and provided that if neither of such rating
agencies then rates the Bonds, the term “Rating Agency” shall be deemed to refer
to any nationally recognized securities rating agency.

 

“Record Date” means with respect to each Interest Payment Date (i) on and prior
to the Conversion Date, the Trustee’s close of business on the Business Day next
preceding such Interest Payment Date, and (ii) after the Conversion Date, the
Trustee’s close of business on the fifteenth (15th) day of the calendar month
next preceding such Interest Payment Date, regardless whether such day is a
Business Day.

 

“Registered Owner” means the person or persons in whose name or names a Bond is
registered on the registration books of the Issuer maintained by the Trustee for
that purpose in accordance with the terms of this Indenture.

 

“Reimbursement Agreement” means with respect to each Letter of Credit, the
agreement pursuant to which such Letter of Credit is issued, including all
amendments thereof and supplements thereto, and initially shall mean the
Reimbursement and Credit Agreement,

 

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dated as of December 1, 2004, between the Bank and the Borrower, as the same may
be amended or supplemented from time to time.

 

“Related Person,” with reference to any Substantial User, means a “related
person” within the meaning of Section 147(a) of the Code,

 

“Remarketing Agent” means the Remarketing Agent appointed and serving in such
capacity under Section 709 hereof and any successors thereto. The initial
Remarketing Agent shall be J.P. Morgan Securities Inc., a Delaware corporation
with an office located in Chicago, Mississippi.

 

“Remarketing Agreement” means the Remarketing Agreement dated as of December 1,
2004, between the Borrower and the Remarketing Agent, as from time to time
supplemented and amended, and, unless the context or use indicates another or
different meaning or intent, any remarketing agreement among the Borrower and
the Remarketing Agent, as from time to time supplemented and amended, which
provides that it is a Remarketing Agreement for purposes of this Indenture.

 

“Replacement Bonds” means Bonds issued pursuant to Section 214 hereof.

 

“Security” means the revenues (including Loan Repayments), funds, rights and
interests specified in Section 301 of this Indenture.

 

“Special Tax Counsel” means McGuire Woods LLP, or any other nationally
recognized counsel expert in the law concerning tax exempt obligations.

 

“State” means the State of Mississippi.

 

“Stated Expiration Date” means the date (as such date may be extended from time
to time) on which the Letter of Credit is stated to expire or terminate in
accordance with its terms other than by virtue of the replacement of such Letter
of Credit with an Alternate Letter of Credit in accordance with the terms of
Section 308 hereof.

 

“Substantial User” means, with respect to any “facilities” (as the term
“facilities” is used in Section 147(a) of the Code), a “substantial user” of
such “facilities” within the meaning of Section 147(a) of the Code.

 

“Surplus Bond Proceeds” means all moneys transferred from the Project Fund to
the Bond Fund after the Completion Date pursuant to Section 5.4 of the Loan
Agreement and any investment earnings thereon.

 

“Trustee” means J.P. Morgan Trust Company, National Association, acting in its
capacity as the trustee under this Indenture, and any permitted successor
trustee under Article VII of this Indenture.

 

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“U.C.C.” means the Uniform Commercial Code of the State as now or hereafter
amended, whether or not such code is applicable to the parties or the
transaction.

 

“Underwriter” means J.P. Morgan Securities Inc., a Delaware corporation.

 

“Unsurrendered Bonds” means Bonds (or portions thereof in Authorized
Denominations) which are not tendered as required under the provisions of
Section 205 and Section 206 hereof, but for which there has been irrevocably
deposited in the Bond Purchase Fund an amount sufficient to pay the Purchase
Price thereof and of all other Bonds (if any) not tendered or deemed to be
tendered for purchase on the date specified in Section 205 hereof or on a
Mandatory Tender Date.

 

“Variable Rate” means the interest rate on the Bonds during the Variable Rate
Period established pursuant to Section 203(b) hereof.

 

“Variable Rate Period” means the period from and including the Issue Date to the
earlier of (i) the Conversion Date or (ii) the day of payment in full of the
Bonds.

 

ARTICLE II

THE BONDS

 

SECTION 201. Authorized Amount of Bonds. No Bonds may be issued under the
provisions of this Indenture except in accordance with this Article II. Pursuant
to the Bond Resolution, the total aggregate principal amount of Bonds that may
be issued and outstanding hereunder is expressly limited to an aggregate amount
of $25,000,000, subject to the provisions of Sections 212, 213 and 214 hereof.

 

SECTION 202. Issuance of Bonds. The Bonds (i) shall be designated “Mississippi
Business Finance Corporation Variable Rate Demand Environmental Improvement
Revenue Bonds (Trex Company, Inc. Project), Series 2004,” (ii) shall be dated
the Issue Date, (iii) shall bear interest from the Issue Date or such later date
to which interest has been paid, until paid, at the rates established pursuant
to Section 203 hereof (computed on the basis of a 365/366-day year, as the case
may be, on actual days elapsed prior to the Conversion Date and a 360-day year
of twelve 30-day months thereafter), and (iv) shall mature, unless sooner paid,
on December 1, 2029.

 

The Bonds shall be issued as registered bonds without coupons and shall be
issued in Authorized Denominations. The Bonds issued hereunder shall be numbered
consecutively from R-1 upwards bearing numbers not then contemporaneously
outstanding (in order of issuance) according to the records of the Trustee.

 

The principal and Purchase Price of and the redemption premium, if any, and the
interest on the Bonds shall be payable in lawful money of the United States of
America. The principal of and redemption premium, if any, on the Bonds and the
Purchase Price of the Bonds shall be payable at the payment trust office of the
Trustee currently located in Dallas, Texas or other designated office of the
Trustee. The interest on the Bonds shall be paid by check or draft of the

 

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Trustee mailed to the Persons in whose names the Bonds are registered on the
Bond Register at the close of business on the Record Date next preceding each
Interest Payment Date; provided, however, any Registered Owner of Bonds in the
aggregate principal amount of $1,000,000 or more as of the close of business on
the Record Date preceding any Interest Payment Date may, by prior written
instructions filed with the Trustee on or before the second (2nd) Business Day
preceding such Record Date (which instructions shall remain in effect until
revoked by subsequent written instructions), instruct that interest payments for
any period be made by wire transfer to any bank located in the continental
United States.

 

If any payment of interest or principal or redemption premium on the Bonds is
due on a date not a Business Day, payment shall be made on the next succeeding
Business Day with the same force and effect as if made on the date which is
fixed for such payment, and no interest shall accrue on such amount for the
period after such due date so long as such amount is paid on the next succeeding
Business Day.

 

The provisions of the Bonds shall control to the extent of any conflict with the
provisions hereof.

 

SECTION 203. Interest Rates on Bonds.

 

(a) The Bonds shall bear interest as provided herein from the Issue Date to the
date of payment in full of the Bonds. Interest accrued on the Bonds shall be
paid on each Interest Payment Date for the period from and including the prior
Interest Payment Date to but excluding such Interest Payment Date. The interest
rate on the Bonds will be determined as provided in this Section 203; provided
that (i) the Variable Rate shall not exceed the lesser of ten percent (10%) per
annum or the maximum rate permitted by applicable law and (ii) the Fixed Rate
shall not exceed the maximum rate permitted by applicable law. Interest on the
Bonds will be payable at the Variable Rate from the Issue Date until the earlier
of the Conversion Date or the date of payment in full of the Bonds.

 

(b) During the Variable Rate Period, the Variable Rate shall be determined by
the Remarketing Agent by 4:30 p.m. New York City time on each Wednesday (or the
immediately preceding Business Day if such Wednesday is not a Business Day) and
shall be the minimum rate necessary (as determined by the Remarketing Agent
based on the examination of tax-exempt obligations comparable to the Bonds known
to the Remarketing Agent to have been priced or traded under then-prevailing
market conditions) for the Remarketing Agent to sell such Bonds on the effective
date of such Variable Rate at their principal amount (without regard to accrued
interest). The first Variable Rate shall apply to the period beginning on the
Issue Date and ending on the next Wednesday. Thereafter, each Variable Rate
shall apply to the period beginning on the Thursday of the week in which such
Variable Rate is set and ending on the following Wednesday, or earlier, if
ending on the Conversion Date. If no Remarketing Agent is serving hereunder, or
if for any reason the Remarketing Agent has not determined the Variable Rate on
a Wednesday (or the immediately preceding Business Day if such Wednesday is not
a Business Day), the Variable Rate for the Bonds shall be equal to the Municipal
Swap Index; provided that if such index is no longer provided by Municipal
Market Data, Inc. or its

 

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successor, the rate shall be equal to the J.J. Kenny Index or if such index is
not available, such other index (or percentage of an index) deemed appropriate
for tax-exempt securities of the nature of the Bonds as the Remarketing Agent
may have previously selected, or, if no rate or index is provided, the new rate
shall be the same as the rate for the preceding week. The Remarketing Agent
shall promptly notify the Bondholders and the Bank by first-class mail of any
change in the interest rate determination method as described in the preceding
sentence.

 

(c) The Bonds shall bear interest at the Fixed Rate during the Fixed Rate
Period. The Fixed Rate for the Bonds shall be determined by the Remarketing
Agent on the Fixed Rate Determination Date and shall be the rate determined by
the Remarketing Agent on the Fixed Rate Determination Date to be the rate which,
if borne by the Bonds, would, in the judgment of the Remarketing Agent having
due regard to prevailing market conditions for revenue bonds or other tax-exempt
securities comparable to the Bonds, be the interest rate necessary, but would
not exceed the interest rate necessary, to enable the Remarketing Agent to
remarket the Bonds tendered (or deemed to have been tendered) for purchase at a
price of par (exclusive of accrued interest, if any) on the Fixed Rate
Determination Date; provided, however, that the Fixed Rate shall not exceed the
maximum rate permitted by applicable law. If for any reason the Remarketing
Agent fails to determine the Fixed Rate by the close of business on the fifth
(5th) Business Day preceding the Proposed Conversion Date, the Bonds shall
continue to bear interest at the Variable Rate as described in Section 204(b)
hereof. The Fixed Rate for the Bonds shall be set forth in a written notice of
the Remarketing Agent sent by facsimile to the Borrower, the Issuer and the
Trustee by the Remarketing Agent on the Fixed Rate Determination Date.

 

(d) The determination of the Variable Rate or the Fixed Rate by the Remarketing
Agent shall be conclusive and binding upon the Issuer, the Borrower, the
Trustee, the Remarketing Agent and the Bondholders.

 

(e) In determining the interest rate that the Bonds shall bear as provided in
this Section 203, neither the Remarketing Agent nor the Trustee shall have any
liability to the Issuer, the Borrower, the Trustee or any Bondholder except for
its gross negligence or willful misconduct.

 

(f) The Remarketing Agent shall give the Trustee facsimile notice by 4:30 p.m.
New York City time on the date on which a Variable Rate is set, such Variable
Rate as determined pursuant to Section 203(b) hereof. The Borrower, the Issuer,
the Bank or any Bondholder may request that the Remarketing Agent identify the
Variable Rate with respect to the Bonds at any time and the Remarketing Agent
shall identify such Variable Rate promptly via facsimile and/or verbally if so
requested. Using the interest rates provided by the Remarketing Agent, the
Trustee shall calculate the amount of interest to be paid on each Interest
Payment Date. The Trustee shall notify the Borrower of the amount of interest to
be paid on each Interest Payment Date during the Variable Rate Period as soon as
practicable. If the Bonds are in a book-entry only system, the Trustee shall
notify the Depository of the amount of interest to be paid on each Interest
Payment Date and the Remarketing Agent shall confirm such amount in accordance
with the requirements of the Letter of Representations.

 

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SECTION 204. Conversion of Interest Rate on Bonds.

 

(a) During the Variable Rate Period, the interest rate on the Bonds, at the
option of the Borrower, shall be converted from the Variable Rate to the Fixed
Rate, upon delivery by the Borrower to the Trustee, the Remarketing Agent, the
Bank and the Issuer:

 

(1) On any Business Day during the Variable Rate Period, of a notice (the
“Conversion Notice”) stating (i) that the Borrower intends to convert the
interest rate on the Bonds to the Fixed Rate and specifying the Proposed
Conversion Date, which date shall be a Business Day at least forty-five (45)
days after the date on which the Trustee receives the Conversion Notice, (ii)
that the Borrower has obtained the written consent of the Bank to the giving of
such Conversion Notice (and attaching such written consent), and (iii) whether
the Bonds will be secured by a Letter of Credit during the Fixed Rate Period;
and

 

(2) By 10:00 a.m. New York City time on the Proposed Conversion Date, of (i) a
Favorable Opinion of Bond Counsel as to the conversion of the interest rate on
the Bonds; (ii) if the Borrower elects to secure the Bonds with a Letter of
Credit during the Fixed Rate Period, an amendment to the Letter of Credit then
in effect or an Alternate Letter of Credit, in either case to be effective on
the Proposed Conversion Date and meeting the requirements of Section 308 hereof;
and (iii) a written undertaking by the Borrower, satisfactory in form and
substance to the Remarketing Agent and the Issuer, whereby the Borrower agrees
to comply with the continuing disclosure requirements of subsection (b)(5) of
Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, as then applicable; provided,
however, that the Borrower shall not be required to make such a written
undertaking if the Remarketing Agent provides the Issuer, the Trustee and the
Borrower with an opinion of counsel that an exemption from compliance with Rule
15c2-12 is available and applies.

 

(b) If (i) the Trustee receives written notification from the Borrower by the
close of business on the Fixed Rate Determination Date of the Borrower’s
decision not to elect the conversion of the interest rate on the Bonds to the
Fixed Rate on the Proposed Conversion Date; (ii) the Borrower fails to satisfy
the conditions of Section 204(a)(2) hereof; or (iii) the Remarketing Agent fails
to determine the Fixed Rate by the close of business on the fifth (5th) Business
Day preceding the Proposed Conversion Date, the interest rate on the Bonds shall
not be converted to the Fixed Rate on the Proposed Conversion Date. In such
event, the Bonds shall bear interest for the remaining portion of the current
interest rate period at the Variable Rate then in effect, or for an interest
rate period at the Variable Rate in effect for the immediately preceding
interest rate period, and will continue to remain outstanding in accordance with
the terms of this Indenture as if no such election had been made by the Borrower
to convert the interest rate borne by the Bonds to the Fixed Rate; provided,
however, that the Bonds will continue to be subject to mandatory tender on the
Proposed Conversion Date pursuant to Section 206 hereof. The Trustee shall
promptly notify the Issuer by mail (and shall promptly notify the Bank and the
Remarketing Agent by telephone) upon the occurrence of any of the events

 

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identified in clauses (i), (ii) or (iii) of this subsection (b) and in the event
that the interest rate on the Bonds is not converted on the Proposed Conversion
Date as provided herein.

 

(c) No conversion of the interest rate on the Bonds shall occur under this
Section 204 if at the time of such conversion an Event of Default has occurred
hereunder and is continuing with respect to the Bonds.

 

(d) The Bonds shall not be subject to optional or mandatory tender for purchase
as provided in Sections 205 and 206 hereof after the Conversion Date.

 

SECTION 205. Purchase of Bonds at Option of Bondholder. The holder of any Bond
shall have the right to tender such Bond to the Trustee as tender agent for
purchase in whole or in part (in any Authorized Denomination) on any Business
Day during the Variable Rate Period, but not thereafter, at a Purchase Price
equal to one hundred percent (100%) of the principal amount of Bonds (or
portions thereof in Authorized Denominations) tendered plus accrued interest to
the specified purchase date. In order to exercise such option with respect to
any Bond or portion thereof, the holder thereof must give to the Trustee as
tender agent at its designated corporate trust office by 9:00 a.m. New York City
time at such office on a Business Day at least seven (7) days immediately
preceding the proposed purchase date (i) telephonic notice of tender (which
telephonic notice must be confirmed by written notice, which may be by facsimile
transmission, of tender in the form provided in this Indenture or such other
form acceptable to the Trustee received by the Trustee as tender agent on a
Business Day not more than two (2) Business Days after such telephonic notice)
or (ii) written notice, which may be by facsimile transmission, of tender to the
Trustee as tender agent (which written notice of tender shall be in the form
provided in this Indenture or shall be in such other form acceptable to the
Trustee).

 

If the Bonds are in a book-entry only system, such notice of tender shall be
given, or caused to be given, by any Beneficial Owner of Bonds (through its
Participant in the Depository) to the Trustee and delivery of Bonds shall be
effected by causing such Participant to transfer its interest in the Bonds equal
to such Beneficial Owner’s interest on the records of the Depository to the
Participant account of the Remarketing Agent with the Depository. The
Remarketing Agent shall ascertain such information as it deems sufficient to
verify the identity of such Beneficial Owners including the Participant in whose
account such Beneficial Owner’s Bonds are recorded and shall promptly confirm
such notice telephonically to the Trustee as tender agent together with such
Participant account information. Upon the delivery of such written notice of
tender, such election to tender shall be irrevocable and binding upon the holder
(or Beneficial Owner) thereof. At or before 10:00 a.m., New York City time, on
the specified purchase date, the Registered Owner or Beneficial Owner of each
Bond as to which such written notice of tender has been given shall deliver each
Bond to be purchased as a whole or in part (in any Authorized Denominations) and
an instrument of assignment or transfer duly executed in blank (which instrument
of assignment or transfer shall be in the form provided on such Bond or in such
other form acceptable to the Trustee) to the Trustee, as tender agent, at its
designated corporate trust office, and any Bond which is not so tendered, but
for which there has been irrevocably deposited in the Bond Purchase Fund
Eligible Funds in an amount sufficient to pay

 

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the Purchase Price thereof and all other Bonds tendered or deemed tendered for
purchase on such specified purchase date, shall be deemed to have been tendered
by the holder thereof and purchased from such holder on the specified purchase
date. If the Bonds are in a book-entry only system, the requirement for physical
delivery of the Bonds in connection with a demand for purchase under this
Section 205 shall be deemed satisfied when the ownership rights in the Bonds are
transferred by Participants on the records of the Depository to the Participant
account of the Remarketing Agent. The Trustee shall, in its sole discretion,
determine whether, with respect to any Bond, the Registered Owner or Beneficial
Owner thereof has properly exercised the option to have his Bond purchased as a
whole or in part.

 

If any such notice of tender for purchase shall have been given to the Trustee
as tender agent pursuant to this Section 205, the Trustee as tender agent shall
promptly give telephonic or telecopier notice, promptly confirmed by a written
notice, to the Remarketing Agent, the Bank and the Borrower on the same date
that the Trustee as tender agent receives notice of the tender for purchase, if
possible, or on the immediately following Business Day, specifying the principal
amount of Bonds as to which notice of tender for purchase has been given and the
proposed date of purchase. On the specified purchase date, the Trustee as tender
agent shall purchase, or cause to be purchased, all Bonds as to which written
notices of tender for purchase have been received at a Purchase Price equal to
the principal amount thereof plus accrued interest, if any, thereon to the
specified purchase date. Funds for payment of the Purchase Price of Bonds
tendered for purchase shall be withdrawn by the Trustee as tender agent from the
Bond Purchase Fund as provided in Section 404 of this Indenture.

 

If there have been irrevocably deposited in the Bond Purchase Fund Eligible
Funds in an amount sufficient to pay the Purchase Price of all Bonds tendered or
deemed to be tendered for purchase on the specified purchase date, the holder of
any Unsurrendered Bond shall not be entitled to receive interest on such
Unsurrendered Bond on and after the specified purchase date and all such
Unsurrendered Bonds shall be deemed to have been tendered for purchase and
purchased pursuant to this Section 205 on such specified purchase date. The
Trustee shall issue a new Bond or Bonds in the same aggregate principal amount
of any Unsurrendered Bonds which are not tendered for purchase on any specified
purchase date and, upon receipt of any such Unsurrendered Bonds from the holder
thereof, the Trustee shall pay the Purchase Price of such Unsurrendered Bonds
plus accrued interest, if any, thereon to the specified purchase date to the
holders thereof and such Unsurrendered Bonds shall be canceled as provided in
Section 215 of this Indenture. If the Bonds are in a book-entry only system and
Bonds are purchased pursuant to this Section 205, the Beneficial Owner shall
cause its Participant in the Depository to record the transfers of the Bonds in
its books for the accounts of the Participants purchasing the same.

 

SECTION 206. Mandatory Tender of Bonds.

 

(a) During the Variable Rate Period, each Bondholder shall be required to tender
its Bonds to the Trustee as tender agent for purchase on each date described
below (each of the dates described below being a “Mandatory Tender Date”):

 

(i) On each Proposed Conversion Date;

 

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(ii) On the date upon which an Alternate Letter of Credit is to be substituted
for the Letter of Credit then in effect;

 

(iii) On the Interest Payment Date next preceding the Stated Expiration Date of
the Letter of Credit then in effect, if the Trustee has not received at least
forty-five (45) days (or such shorter period as shall be acceptable to the
Trustee, but not less than thirty (30) days) prior to the Interest Payment Date
next preceding the Stated Expiration Date of the current Letter of Credit either
an extension of the then existing Letter of Credit or an Alternate Letter of
Credit meeting the requirements of Section 308 hereof; and

 

(iv) On each optional redemption date for which the Borrower with the written
consent of the Bank has elected to purchase Bonds in lieu of an optional
redemption pursuant to Section 217(a) hereof.

 

(b) At least twenty (20) days, but not more than forty-five (45) days, prior to
each such Mandatory Tender Date, the Trustee, at the expense of the Borrower,
shall give notice of such mandatory tender by first class mail to the holders of
all Bonds at their addresses appearing on the Bond Register. Any notice given in
such manner shall be conclusively presumed to have been duly given, whether or
not the holders receive such notice. Such notice of mandatory tender shall (i)
specify the Mandatory Tender Date and the reason for the mandatory purchase on
such date, (ii) if such Mandatory Tender Date is a Proposed Conversion Date,
state that such conversion to the Fixed Rate will not occur if the conditions
described in Section 204(a)(2) hereof are not satisfied but that such mandatory
tender will still occur on the Proposed Conversion Date, and (iii) state that
all Bonds shall be tendered by the holders thereof for purchase at or before
10:00 a.m., New York City time, on the Mandatory Tender Date to the Trustee as
tender agent at its designated payment trust office, together with an instrument
of assignment or transfer duly executed in blank (which instrument of assignment
or transfer shall be in the form provided on the Bonds or such other form
acceptable to the Trustee as tender agent), and that such Bonds shall thereupon
be purchased on the Mandatory Tender Date at a Purchase Price equal to the
principal amount thereof plus accrued interest, if any, to the Mandatory Tender
Date, and any such Bond which is not so tendered but for which there has been
irrevocably deposited in the Bond Purchase Fund Eligible Funds in an amount
sufficient to pay the Purchase Price thereof and of all other Bonds so tendered
and deemed to be tendered for purchase on the Mandatory Tender Date shall be
deemed to have been tendered for purchase by the holder thereof and purchased
from such holder on the Mandatory Tender Date.

 

(c) All Bonds shall be tendered for purchase by the holders thereof to the
Trustee as tender agent at or before 10:00 a.m., New York City time, on a
Mandatory Tender Date, by delivering such Bonds to the Trustee as tender agent
at its designated payment trust office, together with an instrument of
assignment or transfer duly executed in blank (which instrument of assignment or
transfer shall be in the form provided on the Bonds or such other form
acceptable to the Trustee). If the Bonds are in a book-entry only system, a
Beneficial Owner of Bonds shall effect delivery of Bonds in accordance with this
Section 206 by causing its Participant in the Depository to transfer its
interest in the Bonds (equal to such Beneficial Owner’s interest) on the records
of the Depository to the participant account of the Trustee with

 

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the Depository and the requirement for physical delivery of Bonds hereunder
shall be deemed satisfied when the ownership rights in the Bonds are transferred
by Participants on the records of the Depository. On such Mandatory Tender Date
the Trustee as tender agent shall purchase, or cause to be purchased, all Bonds
at a Purchase Price equal to the principal amount thereof plus accrued interest,
if any, to the purchase date. Funds for payment of the Purchase Price of such
Bonds shall be withdrawn by the Trustee from the Bond Purchase Fund as provided
in Section 404 of this Indenture.

 

(d) If there have been irrevocably deposited in the Bond Purchase Fund Eligible
Funds in an amount sufficient to pay the Purchase Price of all Bonds tendered or
deemed tendered for purchase on a Mandatory Tender Date, the holder of any
Unsurrendered Bond shall not be entitled to receive interest on such
Unsurrendered Bond on and after such Mandatory Tender Date, and all such
Unsurrendered Bonds shall be deemed to have been tendered for purchase and
purchased pursuant to this Section 206 on such Mandatory Tender Date. The
Trustee shall issue a new Bond or Bonds in the same aggregate principal amount
for any Unsurrendered Bonds which are not tendered for purchase on any Mandatory
Tender Date and, upon receipt of any such Unsurrendered Bonds from the holders
thereof, the Trustee shall pay the purchase price of such Unsurrendered Bonds
plus accrued interest, if any, to the Mandatory Tender Date to the holders
thereof and such Unsurrendered Bonds shall be canceled as provided in Section
215 of this Indenture. If the Bonds are in a book-entry only system and Bonds
are purchased pursuant to this Section 206, the Beneficial Owner shall cause its
Participant in the Depository to record the transfer of the Bonds in its books
for the accounts of the Participants purchasing the same.

 

SECTION 207. Procedures for Remarketing of Bonds. Unless otherwise directed by
the Borrower and the Bank in writing not to do so, the Remarketing Agent will
use its best efforts to remarket all Bonds tendered or deemed to be tendered for
purchase pursuant to Section 205 or 206 hereof and, subject to the next sentence
hereof, to remarket all Bonds held by the Trustee as tender agent pursuant to
Section 404 hereof at a purchase price equal to the principal amount thereof
plus accrued interest, if any, thereon to the applicable purchase date;
provided, however, that the Remarketing Agent shall first select for remarketing
any Pledged Bonds. The Remarketing Agent may not remarket any Bonds (other than
Pledged Bonds) to the Borrower, the Issuer or any Insider thereof known to it
while the Letter of Credit is in effect. The Borrower may at any time, upon
written direction to the Remarketing Agent, together with a written consent
thereto from the Bank, direct the Remarketing Agent to cease or to resume the
remarketing of some or all of the Bonds. Notwithstanding any provision herein to
the contrary, the Remarketing Agent shall be under no obligation to remarket
Bonds (or beneficial interests therein) (i) if there shall have occurred and be
continuing an Event of Default hereunder or (ii) if the Bonds have been tendered
pursuant to Section 206(a)(iii) hereof and no extension of the Letter of Credit
or Alternate Letter of Credit has been delivered to the Trustee meeting the
requirements of Section 308 of this Indenture. All Bonds tendered for purchase
pursuant to Section 205 or 206 hereof may only be offered and sold by the
Remarketing Agent at a price equal to the principal amount thereof plus accrued
interest, if any, thereon to the applicable purchase date.

 

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At or prior to 3:00 p.m., New York City time, on the Business Day immediately
preceding the applicable purchase date, the Remarketing Agent shall give
telephonic or telecopier notice, promptly confirmed in writing, to the Trustee
and the Borrower (to be received by the Trustee by 4:00 p.m., New York City time
on such day), specifying or confirming (if the Bonds are not in a book-entry
only system) the names, addresses and taxpayer identification numbers of the new
Registered Owners of, and the principal amount and denominations of, such Bonds,
if any, remarketed by it pursuant to this Section 207. Such notice shall also
specify the principal amount of Bonds to be purchased on such purchase date
which it has failed to remarket (if any) and the amount of accrued interest, if
any, on such Bonds. If the Bonds are in a book-entry only system, the Trustee
shall notify the Depository of the transfer instructions (i.e., the names of the
tendering Participants and the principal amount of Bonds tendered by each such
Participant and the names of the purchasing Participants and the principal
amount of Bonds purchased by each such purchasing Participant). The Remarketing
Agent shall make appropriate settlement arrangements for the purchase of Bonds
which have been remarketed pursuant to this Section 207 between the purchasers
of such remarketed Bonds and the Trustee as tender agent, and shall direct such
purchasers by appropriate instructions to pay all moneys for the Purchase Price
of the Bonds which have been remarketed pursuant to this Section 207 to the
Trustee for deposit in the Bond Purchase Fund pursuant to Section 403 hereof at
or before 10:00 a.m., New York City time, on the purchase date. The Trustee as
tender agent shall deposit the proceeds of any such remarketing in the Bond
Purchase Fund pursuant to Section 403 hereof, and the Trustee as tender agent
shall hold and disburse such moneys pursuant to this Section 207 and Section 404
hereof. If any purchaser of remarketed Bonds fails to pay the Purchase Price of
such Bonds to the Trustee, as tender agent, at or before 10:00 a.m., New York
City time, on such purchase date, the Trustee shall promptly give notice of such
failure, and of the amount thereof, by telephone (to be subsequently confirmed
in writing) or by confirmed facsimile transmission to the Borrower and the
Remarketing Agent. If the Remarketing Agent fails to remarket any Bonds tendered
or deemed tendered for purchase, or if any purchaser of remarketed Bonds fails
to pay the Purchase Price thereof as required pursuant to the terms hereof, the
Trustee is required by Section 404(c) hereof to take action under the Letter of
Credit to realize moneys thereunder to enable the Trustee to make timely payment
of the Purchase Price of such Bonds and the Borrower is required by Section 3.4
of the Loan Agreement to pay to the Trustee amounts sufficient and at such times
as to enable the Trustee to make timely payment of the Purchase Price of such
Bonds.

 

At or before 2:00 p.m., New York City time, on each purchase date, the Trustee,
but only to the extent it shall have received money for such purpose, shall:

 

(i) If the Bonds are not in a book-entry only system, pay the Purchase Price to
each holder of a Bond (or portion thereof in Authorized Denominations) tendered
for purchase in federal or other immediately available funds, or by wire
transfer to the Registered Owners thereof in the event that the Registered Owner
of the aggregate principal amount of Bonds has given written notice to the
Trustee directing the Trustee to make such payment of Purchase Price by wire
transfer and identifying the location and the number of the account to which
such payment should be wired. If the Bonds are in a book-entry only system, the
Trustee shall transfer to the Depository the amount directed

 

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by the Remarketing Agent as representing the Purchase Price of the Bonds
tendered or deemed tendered in accordance with Sections 205 and 206 hereof. The
Trustee shall pay each such Purchase Price from moneys on deposit in the Bond
Purchase Fund in the manner set forth in Section 404 hereof; provided, that the
Trustee shall not pay or wire transfer the Purchase Price of any Unsurrendered
Bond unless and until the holder of such Unsurrendered Bond presents such
Unsurrendered Bond, together with an instrument of assignment or transfer duly
executed in blank, to the Trustee; and

 

(ii) if the Bonds are not in a book-entry only system, redeliver or cancel all
such Bonds in accordance with this Section 207 and Section 404 hereof.

 

Notwithstanding any provision herein contained to the contrary, any Bond
remarketed by the Remarketing Agent which has been called for prior redemption
shall be redelivered with a copy of the redemption notice and any Bond as to
which notice of mandatory tender has been given pursuant to Section 206 hereof
shall be redelivered with a copy of the notice of mandatory tender.

 

SECTION 208. Execution; Limited Obligation.

 

(a) The Bonds shall be executed on behalf of the Issuer with the manual or
facsimile signature of its President or Executive Director and shall have
impressed or imprinted thereon the official seal of the Issuer or a facsimile
thereof and shall be attested by the manual or facsimile signature of its
Secretary. All authorized facsimile signatures shall have the same force and
effect as if manually signed. In case any official of the Issuer whose signature
or facsimile signature shall appear on the Bonds shall cease to be such official
before the delivery of such Bonds, such signature or facsimile signature shall
nevertheless be valid and sufficient for all purposes, the same as if such
official had remained in office until delivery. The Bonds may be signed on
behalf of the Issuer by such persons who, at the time of the execution of such
Bonds, are duly authorized or hold the appropriate office of the Issuer,
although on the date of the Bonds such persons were not so authorized or did not
hold such offices.

 

(b) THE BONDS, TOGETHER WITH INTEREST THEREON AND REDEMPTION PREMIUM WITH
RESPECT THERETO, ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER SECURED BY THE
LOAN AGREEMENT AND THE PROMISSORY NOTE AND PAYMENTS MADE UNDER THE LETTER OF
CREDIT, ARE AND SHALL ALWAYS BE PAYABLE SOLELY FROM THE REVENUES AND INCOME
DERIVED FROM THE LOAN AGREEMENT AND THE PROMISSORY NOTE AND PAYMENTS MADE UNDER
THE LETTER OF CREDIT (EXCEPT TO THE EXTENT PAID OUT OF MONEYS ATTRIBUTABLE TO
PROCEEDS OF THE BONDS, OR THE INCOME FROM THE TEMPORARY INVESTMENT THEREOF), AND
ARE AND SHALL ALWAYS BE A VALID CLAIM OF THE OWNER THEREOF ONLY AGAINST THE
REVENUES AND INCOME DERIVED FROM THE LOAN AGREEMENT AND THE PROMISSORY NOTE AND
FROM OTHER INSTRUMENTS ASSIGNED TO OR HELD BY THE TRUSTEE, WHICH REVENUES AND
INCOME SHALL BE USED FOR NO OTHER PURPOSE THAN TO PAY THE PRINCIPAL INSTALLMENTS
OF, REDEMPTION

 

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PREMIUM, IF ANY, AND INTEREST ON THE BONDS, EXCEPT AS MAY BE EXPRESSLY
AUTHORIZED OTHERWISE IN THIS INDENTURE AND THE LOAN AGREEMENT. UNDER NO
CIRCUMSTANCES SHALL THE BONDS CONSTITUTE AN INDEBTEDNESS OR OBLIGATION OF THE
STATE OF MISSISSIPPI WITHIN THE PURVIEW OF ANY CONSTITUTIONAL LIMITATION OR
PROVISION, BUT SHALL BE SECURED BY THE SECURITY, AND SHALL BE PAYABLE SOLELY
FROM THE REVENUES AND INCOME DERIVED FROM THE LOAN AGREEMENT AND THE PROMISSORY
NOTE AND PAYMENTS MADE UNDER THE LETTER OF CREDIT. NO OWNER OF THE BONDS SHALL
HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OF
MISSISSIPPI TO PAY ANY PRINCIPAL INSTALLMENT OF, PREMIUM, IF ANY, OR INTEREST ON
THE BONDS. THE ISSUER HAS NO POWER TO LEVY TAXES FOR ANY PURPOSE WHATSOEVER.

 

SECTION 209. Certificate of Authentication. No Bonds shall be secured hereby or
entitled to the benefit hereof or shall be or become valid or obligatory for any
purpose unless there shall be endorsed thereon a certificate of authentication,
substantially in the form as set forth in the forms of Bond attached hereto as
Exhibits A and B, executed by an authorized signatory of the Trustee; and such
certificate on any Bond issued by the Issuer shall be conclusive evidence and
the only competent evidence that it has been duly authenticated and delivered
hereunder.

 

SECTION 210. Form of Bonds.

 

(a) Prior to the Conversion Date, the Bonds, the Trustee’s certificate of
authentication and the form of assignment shall be in substantially the form set
forth in Exhibit A attached hereto, with such appropriate variations, omissions,
substitutions and insertions as are permitted or required hereby or are required
by law and may have such letters, numbers or other marks of identification and
such legends and endorsements placed thereon as may be required to comply with
any applicable laws or rules or regulations, or as may, consistently herewith,
be determined by the officers executing such Bonds, as evidenced by their
execution of the Bonds.

 

(b) On and after the Conversion Date, the Bonds authenticated and delivered
hereunder, and the Trustee’s certificate of authentication and the form of
assignment, shall be in substantially the form of the Bond set forth in Exhibit
B attached hereto, with such changes as permitted in this Section 210.

 

(c) The Bonds shall be in either typewritten or printed form, as the Borrower
with the consent of the Remarketing Agent shall direct, on behalf of the Issuer;
provided that any expenses incurred in connection therewith shall be paid by the
Borrower.

 

(d) The Bonds shall be issued in the form of the Bonds set forth in Exhibits A
and B, as applicable, with changes as appropriate to reflect any differences in
the terms of each such series of Bonds as set forth herein and in the Loan
Agreement.

 

SECTION 211. Delivery of Bonds. Upon the execution and delivery hereof, the
Issuer shall execute the Bonds and deliver them to the Trustee, and the Trustee
shall authenticate the

 

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Bonds and deliver them to such purchaser or purchasers as shall be directed by
the Issuer as hereinafter in this Section 211 provided.

 

Prior to or simultaneously with the authentication and delivery of the Bonds by
the Trustee, there shall be filed with the Trustee:

 

(a) A copy, certified by an authorized officer of the Issuer, of all resolutions
adopted and proceedings had by the Issuer authorizing the issuance of the Bonds,
including the Bond Resolution;

 

(b) An original executed counterpart of this Indenture, the Loan Agreement, the
Pledge Agreement, the Bond Purchase Agreement, the Remarketing Agreement and the
original executed Promissory Note;

 

(c) The executed initial Letter of Credit;

 

(d) An original executed counterpart of the Tax Certificate of the Borrower
dated the date of closing relating to the Bonds dated the Issue Date, in form
and substance satisfactory to Special Tax Counsel;

 

(e) Closing certificates of the Borrower, the Issuer and the Bank in form and
substance satisfactory to Bond Counsel;

 

(f) A copy of completed IRS Form 8038 to be filed by or on behalf of the Issuer
pursuant to Section 149(e) of the Code;

 

(g) An opinion of Bond Counsel addressed to the Issuer, the Trustee and the Bank
to the effect that the Bonds have been duly issued pursuant to the Act and are
valid, binding and enforceable obligations under the Act and that this Indenture
and the Loan Agreement have been duly authorized, executed and delivered by the
Issuer and are valid and binding agreements of the Issuer;

 

(h) An opinion of Special Tax Counsel addressed to the Issuer, the Trustee and
the Bank to the effect that the interest on the Bonds is excludable from gross
income of the holders thereof for federal income tax purposes (other than any
holder who is a “substantial user” or “related person,” and other than any
interest which may be includable as a preference item or adjustment item in
computing any minimum tax);

 

(i) An opinion or opinions of Counsel for the Borrower addressed to the Issuer
and the Trustee to the effect that the Loan Agreement, the Promissory Note, the
Pledge Agreement and the Bond Purchase Agreement have been duly authorized,
executed and delivered by the Borrower and are legal, valid and binding
agreements of the Borrower, together with such additional matters as may be
requested by Bond Counsel;

 

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(j) An opinion of Counsel for the Bank addressed to the Issuer and the Trustee
to the effect that the Letter of Credit is a legal, valid and binding obligation
of the Bank, together with such additional matters as may be requested by Bond
Counsel;

 

(k) A request and authorization to the Trustee on behalf of the Issuer and
signed by a member or authorized officer of the Issuer directing the Trustee to
authenticate and deliver the Bonds in such specified denominations as permitted
herein to the Underwriter upon payment to the Trustee, but for the account of
the Issuer, of the aggregate principal amount of the Bonds, plus accrued
interest, if any; and

 

(l) Evidence satisfactory to the Trustee that the Issuer has delivered an
executed Letter of Representations to the Depository.

 

Upon receipt of the foregoing, the Trustee shall authenticate and deliver the
Bonds as provided above.

 

SECTION 212. Mutilated, Lost, Stolen or Destroyed Bonds. If any Bond is
mutilated, lost, stolen or destroyed, the Issuer may execute and the Trustee may
authenticate and deliver a new Bond of the same maturity, interest rate,
principal amount and tenor in lieu of and in substitution for the Bond
mutilated, lost, stolen or destroyed; provided that, in the case of any
mutilated Bond, such mutilated Bond shall first be surrendered to the Trustee,
and in the case of any lost, stolen or destroyed Bond, there shall be first
furnished to the Issuer and the Trustee evidence satisfactory to each of them of
the ownership of such Bond and of such loss, theft or destruction, together with
indemnity satisfactory to the Trustee and the Issuer and compliance with such
other reasonable requirements as the Issuer and Trustee may prescribe. The
replacement of any Bond under this Section 212 shall be in accordance with
Mississippi law. If any such Bond shall have matured or a redemption date
pertaining thereto shall have passed, instead of issuing a new Bond the Issuer
may pay the same without surrender thereof. The Issuer and the Trustee may
charge the holder of such Bond with their reasonable fees and expenses in this
connection.

 

SECTION 213. Exchangeability and Transfer of Bonds; Persons Treated as Owners.
The Issuer shall cause the Bond Register to be kept by the Trustee, which is
hereby constituted and appointed the bond registrar for the Bonds.

 

Any holder of a Bond, in person or by his duly authorized attorney, may transfer
title to his, her or its Bond on the Bond Register, upon surrender thereof at
the designated corporate trust office of the Trustee, together with a written
instrument of transfer (in substantially the form of assignment attached to the
Bond) executed by the holder or his, her or its duly authorized attorney. Upon
surrender for registration of transfer of any Bond, the Issuer shall execute and
the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Bond or Bonds of the same aggregate principal amount and tenor
as the Bond surrendered and of any Authorized Denomination.

 

Bonds may be exchanged upon surrender thereof at the designated corporate trust
office of the Trustee with a written instrument of transfer satisfactory to the
Trustee executed by the

 

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Bondholder or his, her or its attorney duly authorized in writing, for an equal
aggregate principal amount of Bonds of the same aggregate principal amount and
tenor as the Bonds being exchanged and of any Authorized Denomination. The
Issuer shall execute and the Trustee shall authenticate and deliver Bonds which
the Bondholder making the exchange is entitled to receive, bearing numbers not
contemporaneously then outstanding.

 

Such registrations of transfers or exchanges of Bonds shall be without charge to
the holders of such Bonds, but any taxes or other governmental charges required
to be paid with respect to the same shall be paid by the holder of the Bond
requesting such registration of transfer or exchange as a condition precedent to
the exercise of such privilege. Any service charge made by the Trustee for any
such registration, transfer or exchange shall be paid by the Borrower.

 

The Trustee shall not register any transfer of any Bond (or portion thereof)
during the fifteen (15) day period preceding the mailing of the notice of
redemption of the Bonds or after notice calling such Bond (or portion thereof)
for redemption or partial redemption has been given unless the holder delivers
to the Trustee a written statement acknowledging that such Bond has been called
for redemption and the date of such redemption.

 

The Person in whose name any Bond is registered on the Bond Register shall be
deemed and regarded as the absolute owner thereof for all purposes, except that
payment of or on account of either principal, premium, if any, or interest shall
be made only to or upon the order of the holder of record as of the Record Date
or the holder’s duly authorized attorney, but such registration may be changed
as hereinabove provided. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the extent of the sum or
sums so paid.

 

So long as the Bonds are held in book-entry form as described in Section 220
hereof, the Issuer shall execute and the Trustee shall authenticate a Bond to be
held by the Trustee for the account of the Depository, which (i) shall be
denominated in an amount equal to the aggregate principal amount of Bonds to be
held by the Depository (provided that, unless the Bonds are being issued on the
Issue Date, the Trustee has received a like aggregate principal amount such
Bonds for transfer in accordance with this Section 213), (ii) shall be
registered in the name of the Depository or Cede, in accordance with this
Section 213, (iii) shall be held by the Trustee for the account of the
Depository or pursuant to the Depository’s instructions, and (iv) shall bear a
legend substantially to the effect that unless such Bond is presented by an
authorized representative of the Depository to the Issuer or its agent for
registration of transfer, exchange or payment, any transfer, exchange, pledge or
other use for value or otherwise is not permitted.

 

All Bonds issued upon any transfer or exchange of Bonds shall be valid and
binding limited obligations of the Issuer, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the Bonds
surrendered upon such transfer or exchange.

 

In executing any Bond upon any exchange or transfer provided for in this Section
213, the Issuer may rely conclusively on a representation of the Trustee that
such execution is required.

 

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SECTION 214. Replacement Bonds. The Issuer shall execute and the Trustee shall
authenticate and deliver Replacement Bonds to replace (i) Bonds outstanding upon
conversion of the interest rate on the Bonds to the Fixed Rate pursuant to
Section 204, in which case such Replacement Bonds shall be in substantially the
form of Bond attached hereto as Exhibit B, and (ii) Bonds tendered for purchase
pursuant to Section 205 or Section 206 hereof, in which case such Replacement
Bonds shall be in substantially the form of Bond attached hereto as Exhibit A
and containing such terms and provisions as are applicable to the Bonds
following the purchase date and having eliminated therefrom the terms and
provisions which are not so applicable. Any such Replacement Bond shall be
executed and authenticated as provided in this Indenture. The Borrower shall
bear all expenses in connection with the preparation and delivery of the
Replacement Bonds.

 

SECTION 215. Cancellation. All Bonds which have been surrendered pursuant to
Section 212, 213 or 214 of this Indenture or for the purpose of purchase upon
tender as provided herein, payment upon maturity or redemption prior to maturity
shall be canceled by the Trustee. All Unsurrendered Bonds shall be deemed
canceled. Upon final maturity and payment in full of the Bonds, the Trustee
shall cancel all Bonds held as inventory by cremation or by otherwise destroying
such Bonds.

 

SECTION 216. Ratably Secured. All Bonds, except for Unsurrendered Bonds, issued
hereunder are and are to be, to the extent provided in this Indenture, equally
and ratably secured by this Indenture without preference, priority or
distinction on account of the actual time or times of the authentication or
delivery or maturity of the Bonds so that, subject as aforesaid, all Bonds at
any time outstanding hereunder shall have the same right, lien and preference
under and by virtue of this Indenture and shall all be equally and ratably
secured hereby with like effect as if they had all been executed, authenticated
and delivered simultaneously on the date hereof, whether the same, or any of
them, shall actually be disposed of at such date, or some future date.
Notwithstanding the foregoing, Pledged Bonds shall not be entitled to any
benefit of the Letter of Credit.

 

SECTION 217. Redemption of Bonds. The Bonds shall be subject to redemption prior
to maturity as follows:

 

(a) Optional Redemption. On or prior to the Conversion Date, the Bonds are
subject to redemption at any time prior to maturity, at the option of the
Borrower, as a whole or in part in Authorized Denominations, at the redemption
price of one hundred percent (100%) of the principal amount thereof to be
redeemed plus accrued interest to the date fixed for redemption, upon receipt by
the Trustee not less than forty-five (45) days (or such lesser period acceptable
to the Trustee) prior to such redemption date of a written direction from the
Borrower stating that it intends to exercise its option to prepay the Loan
Repayments due under the Loan Agreement and thereby effect redemption of all or
a portion of the Bonds.

 

After the Conversion Date, the Bonds are subject to redemption prior to
maturity, at the option of the Borrower, on or after the dates specified below,
in whole at any time or in part in Authorized Denominations on any Interest
Payment Date, at the redemption prices (expressed as

 

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percentages of principal amount) set forth in the following table plus accrued
interest to the redemption date upon receipt by the Trustee not less than
forty-five (45) days (or such lesser period acceptable to the Trustee) prior to
such redemption date of a written direction from the Borrower stating that it
intends to exercise its option to prepay the Loan Repayments due under the Loan
Agreement and thereby effect redemption of all or a portion of the Bonds as
follows:

 

Length of Period from the Interest Payment Date immediately succeeding the
Conversion Date to the Maturity Date    Redemption Price as a Percentage of
Principal Amount (measured from and including the Interest Payment Date
immediately succeeding the Conversion Date) greater than 10 years    After 8
years at 102%, declining 1% annually to 100% less than or equal to 10 and
greater than 7 years    After 5 years at 102%, declining by 1% annually to 100%
less than or equal to 7 and greater than 4 years    After 3 years at 102%,
declining by 1% annually to 100% less than or equal to 4 years    not subject to
optional redemption

 

At the election of the Borrower, contained in the notice of election to convert
to the Fixed Rate Period from the Borrower to the Issuer, the Trustee, the Bank
and the Remarketing Agent, the Bonds bearing interest at the Fixed Rate may be
subject to optional redemption on terms different from those set forth above, if
approved by the Issuer in a supplemental indenture delivered prior to the
Conversion Date, and as shall be specified in such notice, but only if such
notice is accompanied by a Favorable Opinion of Bond Counsel.

 

During the Variable Rate Period, the Borrower shall have the option to cause the
Bonds to be subject to mandatory tender and purchase pursuant to Section
206(a)(iv) hereof in lieu of an optional redemption of Bonds pursuant to this
Section 217(a). Such option may be exercised by delivery by the Borrower to the
Trustee and the Remarketing Agent on or prior to the Business Day preceding the
optional redemption date of a written notice specifying that the Bonds shall not
be redeemed, but instead shall be subject to mandatory tender and purchase
pursuant to Section 206 hereof. Upon delivery of such notice, the Bonds shall
not be redeemed but will instead be subject to mandatory tender and purchase
pursuant to Section 206 hereof at a Purchase Price equal to the price at which
the Bonds would have been redeemed on the date which would have been the
optional redemption date.

 

(b) Mandatory Redemption Upon Determination of Taxability. The Bonds shall be
subject to mandatory redemption prior to maturity, as a whole and not in part,
on the earliest practicable date for which notice can be given following the
occurrence of a Determination of Taxability, at a redemption price equal to one
hundred percent (100%) of the principal amount thereof plus accrued interest to
the redemption date.

 

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(c) Mandatory Redemption Upon Expiration of Letter of Credit During Fixed Rate
Period Only. If the Bonds are secured by a Letter of Credit during the Fixed
Rate Period and at least forty-five (45) days prior to the Interest Payment Date
next preceding the Stated Expiration Date of the Letter of Credit then in effect
the Trustee has not been provided with an extension of such Letter of Credit or
an Alternate Letter of Credit for the applicable period required by Section 308
hereof, then the Bonds will be subject to mandatory redemption on the Interest
Payment Date next preceding such Stated Expiration Date at a redemption price
determined as the lesser of (i) one hundred and two percent (102%) of the
principal amount thereof plus accrued interest to the redemption date, or (ii)
the redemption price which would apply as of the redemption date if the Bonds
were optionally redeemed pursuant to Section 217(a) hereof.

 

(d) Mandatory Redemption from Insurance and Condemnation Proceeds. The Bonds are
subject to mandatory redemption in whole at any time or in part (and if in part
in Authorized Denominations; provided that no Bond may be redeemed in part if
the principal amount to be Outstanding following such partial redemption is not
an Authorized Denomination) on any Interest Payment Date, at a redemption price
equal to one hundred percent (100%) of the aggregate principal amount of the
Bonds to be redeemed plus accrued interest to the redemption date, in an amount
equal to any insurance or condemnation proceeds deposited with the Trustee for
the purpose of redemption pursuant to Article VII of the Loan Agreement. During
any period in which a Letter of Credit secures the Bonds, such redemption shall
be effected by a drawing under the Letter of Credit and the Trustee shall use
such insurance or condemnation proceeds to reimburse the Bank for such drawing.

 

(e) Letter of Credit Draws for Redemption. So long as a Letter of Credit secures
the Bonds, any redemption pursuant to the provisions of this Section 217 shall
be effected by a drawing under the Letter of Credit or other Eligible Funds.

 

SECTION 218. Partial Redemption of Bonds. If less than all the Outstanding Bonds
are called for redemption, the Trustee shall select, or arrange for the
selection of, the Bonds to be redeemed by lot, in such manner as it shall in its
discretion determine; provided that any such Bonds selected for redemption shall
be in multiples of $5,000 and that unredeemed portions of Bonds shall be in
Authorized Denominations. Notwithstanding the foregoing, Pledged Bonds and
Borrower Bonds, in that order, shall be first selected by the Trustee for
redemption before any others are selected for redemption. If less than the
principal amount of a Bond is called for redemption, the Issuer shall execute
and the Trustee shall authenticate and deliver, upon surrender of such Bond,
without charge to the holder thereof, in exchange for the unredeemed principal
amount of such Bond, at the option of such holder, Bonds in Authorized
Denominations.

 

SECTION 219. Notice of Redemption. Notice of redemption shall be mailed, at the
expense of the Borrower, by the Trustee by first class mail at least thirty (30)
days but not more than forty-five (45) days before any redemption date to the
Registered Owner of each Bond to be redeemed in whole or in part at its last
address appearing on the Bond Register; provided, however, that failure to give
such notice by mailing, or any defect therein, shall not affect the validity of
any proceedings for the redemption of any Bond, or portion thereof with

 

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respect to which no such failure or defect has occurred; and provided, further,
that so long as the Letter of Credit is in effect, the Trustee shall not give
notice of any redemption pursuant to Section 217(a) hereof unless the Bank has
consented in writing to such redemption. In addition, the Trustee may give such
other notice or notices as may be recommended in releases, letters,
pronouncements or other writings of the Securities and Exchange Commission and
the Municipal Securities Rulemaking Board. No defect in or delay or failure in
giving any recommended notice described in the preceding sentence shall in any
manner affect the notice of redemption described in the first sentence of this
Section 219. Any notice mailed as provided in this Section 219 shall be
conclusively presumed to have been duly given, whether or not the Bondholder
receives the notice.

 

All notices of redemption shall state:

 

(1) The redemption date,

 

(2) The redemption price,

 

(3) The identification, including complete designation and issue date of the
series of Bonds of which such Bonds are a part and the CUSIP number (and in the
case of partial redemption, the respective principal amounts), interest rate and
maturity date of the Bonds to be redeemed,

 

(4) That on the redemption date the redemption price will become due and payable
upon each such Bond, and that interest thereon shall cease to accrue from and
after such date; and

 

(5) The name and address of the Trustee for such Bonds, including the name and
telephone number of a contact person and the place where such Bonds are to be
surrendered for payment of the redemption price.

 

Any notice of optional redemption during the Variable Rate Period shall also
state that the Borrower may elect that the Bonds be subject to mandatory tender
and purchase in lieu of optional redemption at a Purchase Price equal to the
redemption price.

 

Any notice of optional redemption may state that such redemption is conditioned
upon the deposit of Eligible Funds with the Trustee on or prior to the date set
for redemption and if such Eligible Funds are not so deposited, then such
redemption shall not take place. All Bonds so called for redemption will cease
to bear interest on the specified date set for redemption, provided Eligible
Funds for their redemption have been duly deposited with the Trustee.
Thereafter, the holders of such Bonds called for redemption shall have no rights
in respect thereof except to receive payment of the redemption price plus
accrued interest, if any, thereon to the redemption date from the Trustee and a
new Bond in an Authorized Denomination for any portion not redeemed.

 

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SECTION 220. Book-Entry Only Registration of the Bonds.

 

(a) Except as provided in subparagraph (c) of this Section 220, the Registered
Owner of all of the Bonds shall be, and the Bonds shall be registered in the
name of Cede. Payment of interest on any Bond, as applicable, shall be made in
accordance herewith for the account of Cede on each Interest Payment Date at the
address indicated for Cede in the Bond Register.

 

(b) Each series of Bonds shall be initially issued in the form of a single fully
registered Bond in the aggregate principal amount of such series of Bonds. Upon
initial issuance, the ownership of each such Bond shall be registered on the
Bond Register in the name of Cede, as nominee of the Depository. With respect to
the Bonds so registered in the name of Cede, the Issuer, the Borrower, the Bank
and the Trustee, shall have no responsibility or obligation with respect to (i)
the accuracy of the records of the Depository, Cede or any Participant or any
nominee of a Beneficial Owner with respect to any beneficial ownership interest
in the Bonds, (ii) the delivery to any Participant, Beneficial Owner or other
person, other than the Depository, of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any Participant,
Beneficial Owner or other person, other than Cede, as nominee of the Depository,
of any amount with respect to the principal, Purchase Price or redemption price
of, or interest on, the Bonds. The Issuer, the Borrower, the Bank and the
Trustee may treat and deem Cede, as nominee of the Depository, as the absolute
owner of each Bond for all purposes whatsoever, including (but not limited to)
(i) payment of the principal, Purchase Price or redemption price of, and
interest on, each such Bond, (ii) giving notices of redemption and other matters
with respect to such Bonds and (iii) registering transfers with respect to such
Bonds. The Trustee shall pay the principal, Purchase Price or redemption price
of, and interest on, all Bonds only to or upon the order of Cede, and all such
payments shall be valid and effective to fully satisfy and discharge the
Issuer’s obligations with respect to such principal, Purchase Price, redemption
price and interest, to the extent of the sum or sums so paid. So long as the
Bonds are book-entry-only, no person other than the Depository shall receive a
Bond evidencing the obligation of the Issuer to make payments of principal of
and interest on the Bonds pursuant to the Indenture. Upon delivery by the
Depository to the Trustee of written notice to the effect that the Depository
has determined to substitute a new nominee in place of Cede, and subject to the
transfer provisions of this Indenture, the word “Cede” herein shall refer to
such new nominee of the Depository; provided that, notwithstanding any provision
of this Indenture to the contrary, until the termination of the book-entry-only
system, the Bonds may be transferred in whole, but not in part, only to a
nominee of the Depository, or by a nominee of the Depository to the Depository
or any nominee thereof.

 

(c) (1) The Depository may determine to discontinue providing its services with
respect to the Bonds at any time by giving thirty (30) days written notice to
the Issuer or the Trustee and discharging its responsibilities with respect
thereto under applicable law.

 

(2) The Issuer, at the sole discretion and written direction of the Borrower and
without the consent of any other person, may terminate the services of the
Depository if the Borrower determines that the continuation of the system of
book-entry-only transfer through the Depository is not in the best interests of
the Beneficial Owners of the Bonds

 

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or is burdensome to the Issuer or the Borrower; provided, such termination shall
not occur except in accordance with applicable rules promulgated by the
Depository.

 

(3) Upon the termination of the services of the Depository with respect to the
Bonds pursuant to subsection (c)(1) hereof, the Bonds shall no longer be
restricted to being registered on the Bond Register in the name of Cede as
nominee of the Depository. In such event, the Issuer shall, at the expense of
the Borrower, issue and the Trustee shall transfer and exchange Bond
certificates of like principal amount, in Authorized Denominations to the
Participants or the identifiable Beneficial Owners (as identified by the
Depository or the Participants) in replacement of such Beneficial Owners’
beneficial interests in the Bonds. In such event, the Trustee shall receive the
names, addresses of record and taxpayer identification numbers for the
Beneficial Owners. The Trustee may rely upon the accuracy of any such
information provided by such Beneficial Owners. If the Trustee registers the
Bonds, the Trustee shall be provided with the names, addresses of record and
taxpayer identification numbers for such Bondholders. Notwithstanding the
preceding sentence, if the Borrower designates a successor Depository, the
Issuer shall issue and the Trustee shall transfer and exchange a Bond
certificate, in such name as is directed by the successor Depository, in the
amount of Bonds then Outstanding and the Trustee shall take such other action as
is necessary so that the beneficial ownership interests of the Beneficial Owners
are properly reflected on the records of the successor Depository and its
Participants. In such event, references herein to “Cede” shall be deemed to
refer to the successor Depository, or its nominee, as the context requires.

 

(d) The Issuer, the Trustee and the Remarketing Agent may conclusively rely on
(i) a certificate of the Depository as to the identity of the Participants in
the book-entry only system, and (ii) a certificate of such Participants as to
the identity of, and the respective principal amounts of Bonds beneficially
owned by, the Beneficial Owners.

 

(e) Whenever, during the term of the Bonds, Beneficial Ownership thereof is
determined by a book-entry at the Depository, the requirements in this Indenture
of holding, delivering or transferring Bonds shall be deemed modified to require
the appropriate person to meet the requirements of the Depository as to
registering or transferring the book-entry to produce the same effect.

 

(f) Notwithstanding anything in this Indenture to the contrary, the Issuer and
the Trustee hereby agree as follows with respect to the Bonds, if and to the
extent any Bond is registered in the name of Cede as nominee of the Depository:
(i) the Trustee shall give the Depository all special notices required by the
Letter of Representations at the times, in the forms and by the means required
by the Letter of Representations; (ii) the Trustee shall make payments to Cede
at the times and by the means specified in the Letter of Representations; (iii)
Cede shall not be required to surrender Bonds which have been partially paid or
prepaid to the extent permitted by the Letter of Representations; and (iv) the
Trustee shall set a special record date (and shall notify the registered owners
of the Bonds thereof in writing) prior to soliciting any Bondholder consent or
vote, such notice to be given not less than fifteen (15) calendar days prior to
such record date (any Bond transferred by a registered owner subsequent to the
establishment

 

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of the special record date and prior to obtaining such consent or vote shall
have attached to it a copy of the notice to Bondholders by the Trustee).

 

(g) NEITHER THE ISSUER, THE BORROWER, THE TRUSTEE, NOR THE REMARKETING AGENT
WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO PARTICIPANTS OR THE BENEFICIAL
OWNERS OF THE BONDS WITH RESPECT TO (i) THE ACCURACY OF ANY RECORDS MAINTAINED
BY THE DEPOSITORY OR ANY PARTICIPANT; (ii) THE PAYMENT BY THE DEPOSITORY TO ANY
PARTICIPANT OR BY ANY PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN
RESPECT OF THE PRINCIPAL AMOUNT, PURCHASE PRICE, REDEMPTION PRICE OF OR INTEREST
ON THE BONDS; (iii) THE DELIVERY OF ANY NOTICE BY THE DEPOSITORY TO ANY
PARTICIPANT OR BY ANY PARTICIPANT TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR
PERMITTED TO BE GIVEN TO BONDHOLDERS UNDER THE TERMS OF THIS INDENTURE; (iv) THE
SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY
PARTIAL REDEMPTION OF THE BONDS; OR (v) ANY OTHER ACTION TAKEN BY THE DEPOSITORY
OR ANY PARTICIPANT AS OWNER OF THE BONDS.

 

SECTION 221. CUSIP Numbers. All payments of principal, premium and interest,
whether by check or draft or wire transfer, shall be accompanied by the
appropriate CUSIP number identification with appropriate dollar amounts for each
CUSIP number.

 

ARTICLE III

SECURITY

 

SECTION 301. Security. The Bonds and the interest and any premium thereon shall
be a special, limited obligation of the Issuer as provided in Section 208
hereof, and shall be secured by and payable only from the following:

 

(i) All Loan Repayments received by the Issuer under the Loan Agreement
(including all Loan Repayments made through drawings under the Letter of
Credit), which Loan Repayments are to be paid directly by the Borrower to the
Trustee and deposited in the Bond Fund;

 

(ii) All moneys in the Bond Fund and the Project Fund, including the proceeds of
the Bonds pending disbursement thereof;

 

(iii) All of the Issuer’s rights and interest in the Promissory Note;

 

(iv) All of the Issuer’s rights and interest in the Loan Agreement, except the
Unassigned Rights, as defined in the Loan Agreement; and

 

(v) All of the proceeds of the foregoing, including, without limitation,
investments thereof.

 

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The foregoing are collectively the “Security.” In consideration of the purchase
of the Bonds and to secure payment of the principal of, premium, if any, and
interest on the Bonds and any other cost or pecuniary liability of the Issuer
relating to the Bonds or any proceeding, document or certification incidental to
the issuance of the Bonds, and to secure performance and observance of all
covenants, terms and conditions upon which the Bonds are to be issued, including
without limitation this Indenture, the Issuer, without warranty, pursuant to law
hereby conveys, assigns and pledges all of its right, title and interest in, and
grants a security interest in, the Security to the Trustee, and its successors
and assigns, in trust for the benefit of the Bondholders and, to the extent the
Bank is subrogated to the rights of the Registered Owners pursuant to the terms
of this Indenture, for the benefit of the Bank in satisfaction of the
reimbursement obligations of the Borrower pursuant to the Reimbursement
Agreement, and their successors and assigns. The Security shall not include any
moneys held in the Bond Purchase Fund or the Rebate Fund.

 

SECTION 302. Payment of Bonds and Performance of Covenants. The Issuer shall
promptly pay, but only out of the Security, the principal of, premium, if any,
and interest on the Bonds at the place, on the dates and in the manner provided
in the Bonds. The Issuer covenants that it will faithfully perform on its part
at all times any and all covenants, undertakings, stipulations and provisions
contained in this Indenture, in any and every Bond executed, authenticated and
delivered hereunder and in all of its proceedings pertaining thereto; provided,
however, that except for the matters set forth in any documents hereof relating
to payment of the Bonds, the Issuer shall not be obligated to take any action or
execute any instrument pursuant to any provision hereof until it shall have been
requested to do so by the Borrower or by the Trustee, or shall have received the
instrument to be executed and at the option of the Issuer shall have received
from the Borrower, assurance satisfactory to the Issuer that the Issuer shall be
reimbursed for its reasonable expenses, including legal counsel fees, incurred
or to be incurred in connection with taking such action or executing such
instrument.

 

SECTION 303. Authority. The Issuer covenants that it is duly authorized under
the Constitution and the laws of the State, including particularly the Act and
the Bond Resolution to issue the Bonds authorized hereby and to execute this
Indenture, to grant the security interest herein provided, to assign and pledge
the Agreement and the Note (except as otherwise provided herein) and to assign
and pledge the amounts hereby assigned and pledged in the manner and to the
extent herein set forth, that all action on its part for the issuance of the
Bonds and the execution and delivery of this Indenture has been duly and
effectively taken, and that the Bonds in the hands of the owners thereof are and
will be valid and enforceable obligations of the Issuer according to the terms
thereof and hereof. Anything contained in this Indenture to the contrary
notwithstanding, it is hereby understood that none of the covenants of the
Issuer contained in this Indenture are intended to create a general or primary
obligation of the Issuer. Subject to the limitations on its liability as stated
herein, the Issuer covenants and agrees that it has not knowingly engaged and
will not knowingly engage in any activities and that it has not knowingly taken
and will not knowingly take any action which might result in any interest on the
Bonds becoming includable in the gross income of the owners thereof for purposes
of federal income taxation.

 

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SECTION 304. No Litigation. The Issuer represents and warrants that, as of the
date hereof and as of the Issue Date (i) no litigation or administrative action
of any nature has been served upon the Issuer for the purpose of restraining or
enjoining the issuance or delivery of the Bonds or the execution and delivery of
this Indenture or the Loan Agreement or in any manner questioning the
proceedings or authority under which they have occurred, or affecting their
validity or its existence or authority of its present officers; (ii) no
authority or proceeding for the issuance of the Bonds or for the payment or
security thereof has been repealed, revoked or rescinded; and (iii) to the best
of the knowledge of the officers of the Issuer executing this Indenture, none of
the foregoing actions is threatened.

 

SECTION 305. Further Assurances. The Issuer covenants that it will cooperate to
the extent necessary with the Borrower, the Trustee and the Bank in their
defenses of the Security against the claims and demands of all Persons, and will
do, execute, acknowledge and deliver or cause to be done, such indentures
supplemental hereto and such further acts, instruments and transfers as the
Trustee or the Bank may reasonably require for the better pledging of the
Security, subject to Section 908 hereof. The Issuer shall not cause or permit to
exist any amendment, modification, supplement, waiver or consent with respect to
the Loan Agreement or the Promissory Note without the prior written consent of
the Trustee and the Bank, which consent shall be governed by Article VIII of
this Indenture.

 

SECTION 306. No Other Encumbrances. The Issuer covenants that except as
otherwise provided herein and in the Loan Agreement, it will not sell, convey,
mortgage, encumber or otherwise dispose of any portion of the Security.

 

SECTION 307. No Recourse. No recourse shall be had for the payment of the
principal of, premium, if any, or interest on the Bonds or for any claim based
thereon or upon any obligation, covenant or agreement contained in this
Indenture or the Loan Agreement or the Bond Purchase Agreement, against any
past, present or future member, official, officer, director or employee of the
Issuer, or any incorporator, member, officer, employee, director, trustee or
successor organization, as such, either directly or through the Issuer or any
successor organization, under any rule of law or equity, statute or constitution
or by the enforcement of any assessment or penalty or otherwise, and all such
liability of any such member, official, officer, director, agent or employee as
such is hereby expressly waived and released as a condition of and in
consideration for the execution of this Indenture and the Loan Agreement and the
issuance of the Bonds.

 

SECTION 308. Letter of Credit.

 

(a) Requirements for Letter of Credit. The initial Letter of Credit will be an
irrevocable letter of credit of a commercial bank providing for direct payments
to or upon the order of the Trustee of amounts up to (1) the principal of the
Bonds when due, at maturity or upon acceleration, redemption, purchase pursuant
to a tender or otherwise; and (2) interest on the Bonds for a period of
forty-five (45) days at the maximum rate of ten percent (10%) per annum;
provided, however that if the Letter of Credit will be in effect during the
Fixed Rate Period, (A) the stated coverage amount of the Letter of Credit will
include interest on the Bonds for a period

 

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of one hundred ninety-five (195) days (or such other number of days as may be
required by any Rating Agency then rating the Bonds) at the applicable Fixed
Rate and (B) the Letter of Credit will not cover any Liquidity Drawing. The
Letter of Credit shall terminate no earlier than the earliest of: (i) the
payment in full by the Bank of funds authorized to be drawn thereunder; (ii) the
surrender of the Letter of Credit by the Trustee to the Bank for cancellation as
a result of (A) the payment in full of the Bonds pursuant to the provisions of
the Indenture, or (B) the acceptance by the Trustee of an Alternate Letter of
Credit, as certified by the Trustee to the Bank; (iii) its Stated Expiration
Date, which will be no earlier than fifteen (15) days after an Interest Payment
Date and that is one (1) year from its date of issuance; (iv) the Business Day
following the Conversion Date (except for any Letter of Credit issued to secure
Bonds during the Fixed Rate Period); or (v) the close of business on the date
which is fifteen (15) days after receipt by the Trustee of a written notice from
the Bank (A) specifying the occurrence of an “event of default” under the
Reimbursement Agreement and (B) directing the Trustee to accelerate the Bonds.

 

At least forty-five (45) days (or such shorter period as shall be acceptable to
the Trustee, but not less than thirty (30) days) prior to the Interest Payment
Date next preceding the Stated Expiration Date of the current Letter of Credit,
the Borrower may provide for the delivery to the Trustee of an amendment to the
Letter of Credit which extends the Stated Expiration Date to a date that is not
earlier than one year from its then current Stated Expiration Date. If the
Letter of Credit is so extended, the mandatory tender described in Section
206(a)(iii) hereof (or if the Fixed Rate Period is then in effect, the mandatory
redemption described in Section 217(c) hereof) shall not occur. Unless all of
the conditions of this paragraph which are required to be met forty-five (45)
days (or such shorter period as shall be acceptable to the Trustee, but not less
than thirty (30) days) preceding the Interest Payment Date next preceding the
Stated Expiration Date of the Letter of Credit have been satisfied, the Trustee,
at the expense of the Borrower, shall take all action necessary to subject the
Bonds to the mandatory tender described in Section 206(a)(iii) hereof (or if the
Fixed Rate Period is then in effect, to the mandatory redemption described in
Section 217(c) hereof) on the Interest Payment Date next preceding such Stated
Expiration Date; provided that if the Borrower shall have notified the Trustee
in writing that it expects to meet all the conditions for the delivery of an
amendment extending the existing Letter of Credit on or before the Interest
Payment Date next preceding the Stated Expiration Date of the existing Letter of
Credit, then the notice of such mandatory tender (or mandatory redemption if
then in the Fixed Rate Period) shall state that it is subject to rescission, and
the Trustee shall rescind such notice, if such conditions are so met (in which
case such mandatory tender (or mandatory redemption if then in the Fixed Rate
Period) shall not occur).

 

(b) Alternate Letter of Credit. The Borrower may elect to replace any Letter of
Credit with a Letter of Credit conforming to the requirements of Section 308(a)
hereof.

 

Notwithstanding anything to the contrary contained herein, (1) while the Bonds
bear interest at the Variable Rate, they shall be secured by a Letter of Credit,
and (2) if the Bonds are converted to bear interest at the Fixed Rate, they
shall not be secured by a Letter of Credit unless, immediately prior to the
Conversion Date, the Remarketing Agent makes an objective determination in a
certificate delivered to the Trustee that the present value of the cost of

 

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securing the Bonds with the Letter of Credit (including the cost of paying
interest on the Bonds at the expected interest rate and all fees associated with
the Letter of Credit) would be less than the cost of paying interest on the
Bonds if it is not so secured (using as a discount rate the yield to maturity on
the Bonds being converted to a Fixed Rate and treating the fees paid and to be
paid for the credit enhancement as interest on the Bonds). In addition, if the
Fixed Rate Period is then in effect the Borrower may not furnish an Alternate
Letter of Credit with a stated expiration date earlier than the Stated
Expiration Date of the Letter of Credit then in effect.

 

Upon delivery to the Trustee of an Alternate Letter of Credit conforming to the
requirement of this Section 308 and delivery of the opinions described in
Section 308(c), then the Trustee shall accept such Alternate Letter of Credit
and promptly surrender for cancellation the previously held Letter of Credit to
the issuer thereof in accordance with the terms of such Letter of Credit;
provided (i) that any draw on the Letter of Credit resulting from a mandatory
tender pursuant to Section 206(a)(ii) hereof shall be a draw on the previously
held Letter of Credit, and not a draw on the Alternate Letter of Credit, and
such draw is satisfied, and (ii) that no delivery of such Alternate Letter of
Credit shall be effective unless the Borrower has given written notice to the
Trustee (a copy of which shall be delivered to the Bank providing the current
Letter of Credit) not less than forty-five (45) days prior to such delivery (or
such shorter period as shall be acceptable to the Trustee but not less than
thirty (30) days) of the Borrower’s intention to provide for delivery of such
Alternate Letter of Credit and the anticipated date of such delivery. During the
Variable Rate Period, upon receipt of such notice, the Trustee shall take all
actions necessary to subject the Bonds to mandatory tender as described in
Section 206(a)(ii) hereof on the proposed effective date of such Alternate
Letter of Credit; provided (i) that any draw on the Letter of Credit resulting
from a mandatory tender pursuant to Section 206(a)(ii) hereof shall be a draw on
the previously held Letter of Credit, and not a draw on the Alternate Letter of
Credit and (ii) that the notice of such mandatory tender shall state that it is
subject to rescission, and the Trustee shall rescind such notice (unless the
Bonds are then subject to mandatory tender as described under the Section
206(a)(iii) hereof) if all of the requirements of this Section 308 are not met
on or before the date on which the Bonds are subject to mandatory tender (in
which case such mandatory tender shall not occur). During the Fixed Rate Period,
the Trustee shall give at least twenty (20) days prior written notice of the
proposed substitution to the Bondholders and the Issuer.

 

(c) Opinion of Counsel. Any Alternate Letter of Credit delivered to the Trustee
must be accompanied by (1) a Favorable Opinion of Bond Counsel as to the
delivery of the Alternate Letter of Credit; (2) an opinion of Counsel stating
that delivery of the Alternate Letter of Credit is authorized under this
Indenture and complies with its terms; (3) an opinion of Counsel to the issuer
of such Alternate Letter of Credit stating that such Alternate Letter of Credit
is a legal, valid, binding and enforceable obligation of such issuer in
accordance with it terms; and (4) evidence satisfactory to the Trustee that the
unsecured indebtedness of the new Bank (or parent company of the new Bank) is
rated by a Rating Agency at least “A1/P1” unless a Favorable Opinion of Bond
Counsel is delivered with respect to a different rating. In addition, if the
Borrower or any natural person, firm, association or public body related to the
Borrower within the meaning of Section 147(a) of the Code grants a security
interest in any cash, securities or

 

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investment type property to the issuer of such Alternate Letter of Credit, the
Borrower must furnish the Trustee a Favorable Opinion of Bond Counsel with
respect to such grant.

 

(d) Rating Maintenance for Letter of Credit Substitution During Fixed Rate
Period. On or before the date of delivery of any Alternate Letter of Credit to
the Trustee during the Fixed Rate Period, as a condition of acceptance of any
Alternate Letter of Credit by the Trustee, the Borrower shall furnish to the
Trustee (in addition to the other requirements set forth in this Section 308):
(1) written evidence from each Rating Agency then rating the Bonds (if the Bonds
are then rated), to the effect that such Rating Agency has reviewed the proposed
Alternate Letter of Credit and determined that the substitution of the proposed
Alternate Letter of Credit for the Letter of Credit then in effect will not, by
itself, result in a reduction or withdrawal of such Rating Agency’s then current
rating on the Bonds, or (2) if the Bonds are not then rated, written evidence
satisfactory to the Trustee that the unsecured long-term debt of the issuer of
the Alternate Letter of Credit is not less than the rating of the unsecured
long-term debt of the issuer of the then existing Letter of Credit.

 

(e) Draws. Except with respect to Pledged Bonds (which Bonds shall not be
entitled to any benefit of the Letter of Credit): (i) the Trustee shall draw
moneys under the Letter of Credit to the extent available in accordance with the
terms thereof to the extent necessary to make timely payments of principal,
premium (but only if such is permitted by the terms of the Letter of Credit) and
interest coming due and payable on the Bonds (whether upon any Interest Payment
Date, at maturity, upon the date fixed for redemption or upon acceleration of
the Bonds), all as contemplated by Section 401 hereof; (ii) the Trustee shall
draw moneys under the Letter of Credit to the extent available in accordance
with the terms thereof on each purchase date to effect the purchase of Bonds
required on such dates, except, in the case of each such date, to the extent of
remarketing proceeds which are available as contemplated by clause (i) of
Section 404(b) hereof; and (iii) upon the occurrence of an Event of Default
specified in Section 601(f) hereof or upon declaration of acceleration of the
Bonds pursuant to any other Event of Default, the Trustee shall immediately draw
on the Letter of Credit to the extent available in an amount equal to the full
unpaid principal and accrued interest on the Bonds. Notwithstanding any
provision to the contrary in this Indenture, (A) in computing the amount to be
drawn under the Letter of Credit on account of the payment of the principal or
Purchase Price of, or interest on the Bonds, the Trustee shall exclude any such
amounts in respect of any Bonds which are Pledged Bonds or Borrower Bonds on the
date such payment is due, and (B) amounts drawn by the Trustee under the Letter
of Credit shall not be applied to the payment of the principal or Purchase Price
of, or interest on, any Bonds which are Pledged Bonds or Borrower Bonds on the
date such payment is due.

 

ARTICLE IV

FUNDS

 

SECTION 401. Establishment and Use of Bond Fund. There is hereby created and
established with the Trustee a special fund to be designated “Mississippi
Business Finance Corporation — Trex Company, Inc. Project 2004 Bond Fund” and
within such Fund special accounts designated the “Non-Eligible Funds Account,”
the “Letter of Credit Account” and the

 

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“Eligible Funds Account.” All moneys in the Bond Fund (other than amounts
deposited in the Letter of Credit Account and the Issuer’s administrative fees
referenced in Section 3.5 of the Loan Agreement) shall be deposited and held in
the Non-Eligible Funds Account until such moneys become Eligible Funds. All
amounts drawn by the Trustee under the Letter of Credit (other than amounts
drawn to pay the Purchase Price of a tendered Bond) shall be deposited in the
Letter of Credit Account. Once the Trustee shall have been notified that moneys
on deposit in the Non-Eligible Funds Account shall have become Eligible Funds,
they shall be withdrawn from the Non-Eligible Funds Account and deposited in the
Eligible Funds Account until used pursuant to the terms hereof.

 

There shall be deposited in the applicable account in the Bond Fund (a) any
accrued interest received on the sale of the Bonds; (b) all Loan Repayments
under the Loan Agreement, including all proceeds resulting from the enforcement
of the Security or its realization as collateral; (c) all moneys received by the
Trustee under the Loan Agreement for deposit in the Bond Fund; (d) all moneys
drawn under the Letter of Credit (other than amounts drawn to pay the Purchase
Price of a tendered Bond) to pay principal of, premium (but only if the payment
of premium is permitted by the terms of the Letter of Credit), if any, or
interest on the Bonds; and (e) any other moneys received by the Trustee with
directions for deposit in the Bond Fund.

 

At all times the Trustee shall maintain adequate books and records relating to
the Bond Fund (including any investment income thereon) so that the Trustee may
at all times ascertain the date of deposit of the moneys in the Non-Eligible
Funds Account. The Trustee shall create separate and segregated sub-accounts in
the Non-Eligible Funds Account as directed by the Borrower. Moneys received by
the Trustee and deposited in the Letter of Credit Account shall not be
commingled with other moneys in the Bond Fund.

 

Moneys in the Bond Fund shall be held in trust first for the Bondholders and
then for the Bank subject to the provisions of Section 501 hereof. Except as
otherwise expressly provided herein (including without limitation Section 607
hereof), such moneys shall be used first solely for the payment of the interest
on the Bonds and for the payment of principal of and premium, if any, on the
Bonds upon maturity, whether stated or accelerated, or mandatory or optional
redemption, and then, to the extent of any moneys remaining on deposit therein,
for the payment of any amounts owed by the Borrower first to the Trustee, then
to the Issuer, and then to the Bank pursuant to the Borrower’s reimbursement
obligation under the Reimbursement Agreement; provided, however, that any
Surplus Bond Proceeds transferred from the Project Fund to the Bond Fund as
provided in Section 5.4 of the Loan Agreement may only be used by the Trustee as
provided in Section 11.1 of the Loan Agreement.

 

The Issuer hereby authorizes and directs the Trustee, and the Trustee hereby
agrees, to withdraw sufficient funds from the Bond Fund to pay the principal of,
premium, if any, and interest on the Bonds as the same become due and payable,
from funds derived from the following sources in the order of priority indicated
below:

 

(a) From the Letter of Credit Account, amounts realized by the Trustee under the
Letter of Credit for principal, premium, if provided for in the Letter of
Credit, and interest on the

 

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Bonds, provided in no event shall such moneys be used to pay for Pledged Bonds
or Borrower Bonds;

 

(b) Eligible Funds on deposit in the Eligible Funds Account; and

 

(c) Any other amounts (whether or not Eligible Funds) in the Bond Fund,
including amounts received by the Trustee pursuant to the Loan Agreement.

 

If the Bonds are in a book-entry only system, the Trustee is hereby directed to
give notice to the Depository on every Interest Payment Date occurring during a
period in which Pledged Bonds are in existence that the Depository is not to
pay, and will not be receiving from the Trustee, interest on the Pledged Bonds
recorded in the books of the Depository for the account of the Borrower (and
identifying the principal amount of such Bonds). Interest on such Pledged Bonds
will be paid by the Borrower to the Bank pursuant to the Pledge Agreement.

 

On the Business Day immediately preceding the date on which any principal and/or
interest shall become due on the Bonds (whether upon any Interest Payment Date,
at maturity, upon the date fixed for redemption or upon acceleration of the
Bonds), the Trustee shall, without making any prior claim or demand upon the
Borrower, take actions under and in accordance with the Letter of Credit so as
to receive moneys on such date thereunder in an amount which, together with
moneys described in clause (a) above and available therefor, shall be equal to
the amount of principal and interest (and premium, if provided for in the Letter
of Credit) coming due on the Bonds on the date such payment is due; provided,
that the Trustee shall not take any action under the Letter of Credit to pay the
principal of and/or interest (and premium, if provided for in the Letter of
Credit) on Pledged Bonds or Borrower Bonds. If for any reason funds are not
available under the Letter of Credit for payment of principal and/or interest
(and premium, if provided for in the Letter of Credit) due on the Bonds on any
such date, the Trustee shall immediately request from the Borrower immediately
available funds sufficient to make all such payments of principal and/or
interest and premium, if any, on the Bonds pursuant to Section 3.2 of the Loan
Agreement by directing that the Borrower deposit such funds with the Trustee at
its designated corporate trust office into the Bond Fund. If the Borrower has
deposited moneys with the Trustee in accordance with clause (c) above and moneys
have been realized by the Trustee under the Letter of Credit for the payment of
principal and/or interest (and premium, if provided for in the Letter of Credit)
on the Bonds, then the Trustee shall request a written statement from the Bank
as to whether or not the Bank has been reimbursed by the Borrower for any and
all such moneys. Upon written notice from the Bank that the Borrower has not
reimbursed the Bank in a certain amount, any such moneys deposited in accordance
with clause (c) above to such amount shall be immediately paid to the Bank.

 

Any amounts remaining in the Bond Fund after payment in full of the Bonds and
all other amounts required to be paid under this Indenture or the Loan
Agreement, shall be paid (i) to the Bank, to the extent of any amounts owing
under the Reimbursement Agreement, or, (ii) if there are no such amounts or
obligations of the Borrower existing under the Reimbursement Agreement as
certified in writing by the Bank to the Trustee, to the Borrower in accordance
with

 

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its written direction upon the expiration or sooner cancellation or termination
of the term of the Loan Agreement as provided therein.

 

Notwithstanding anything herein to the contrary, the Issuer’s administrative fee
referenced in Section 3.5 of the Loan Agreement shall be paid by the Borrower to
the Trustee and shall be deposited into the Non-Eligible Funds Account and
promptly be paid by the Trustee to the Issuer.

 

SECTION 402. Establishment and Use of Project Fund. There is hereby created and
established with the Trustee a special fund to be designated “Mississippi
Business Finance Corporation — Trex Company, Inc. Project 2004 Project Fund.”
The proceeds of the Bonds, as described in Section 405 hereof, shall be
delivered to the Trustee for deposit into the Project Fund. Funds in the Project
Fund shall be expended and disbursed in accordance with the provisions of the
Loan Agreement.

 

SECTION 403. Creation and Sources of Bond Purchase Fund.

 

(a) There is hereby established and created with the Trustee a special fund to
be designated “Mississippi Business Finance Corporation — Trex Company, Inc.
Project 2004 Bond Purchase Fund,” which shall be used to pay the Purchase Price
of Bonds tendered or deemed to be tendered for purchase pursuant to Section 205
or 206 of this Indenture. The Trustee shall hold all moneys on deposit in the
Bond Purchase Fund in trust for the benefit of the Bondholders who have tendered
their Bonds or who are deemed to have tendered their Bonds for purchase. The
Bondholders who have tendered or who are deemed to have tendered their Bonds for
purchase pursuant to Section 205 or 206 of this Indenture and for whose benefit
Eligible Funds have been deposited in the Bond Purchase Fund shall have a first
lien on, with right of payment to, such Eligible Funds.

 

(b) There shall be paid into the Bond Purchase Fund, as and when received,

 

(i) The proceeds of the remarketing of Bonds by the Remarketing Agent pursuant
to Section 207 of this Indenture (which proceeds shall at all times prior to
their transfer from the Bond Purchase Fund be held by the Trustee in a
segregated account in the Bond Purchase Fund separate from all other moneys in
the Bond Purchase Fund);

 

(ii) All payments made by the Borrower pursuant to Section 3.4 of the Loan
Agreement (each of which payments shall at all times prior to their transfer
from the Bond Purchase Fund be held by the Trustee in a segregated account in
the Bond Purchase Fund separate from all other moneys in the Bond Purchase
Fund);

 

(iii) All moneys realized by the Trustee under the Letter of Credit for the
purpose of paying such Purchase Price (all of which moneys shall at all times
prior to their transfer from the Bond Purchase Fund be held by the Trustee in a
segregated account in the Bond Purchase Fund separate from all other moneys in
the Bond Purchase Fund); and

 

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(iv) All other moneys received by the Trustee pursuant to this Indenture, the
Loan Agreement, or otherwise which are required or which are accompanied by
directions that such moneys are to be paid into the Bond Purchase Fund (each of
which payments shall at all times prior to their transfer from the Bond Purchase
Fund be held by the Trustee in a segregated account in the Bond Purchase Fund
separate from all other moneys in the Bond Purchase Fund).

 

SECTION 404. Use of Moneys in the Bond Purchase Fund.

 

(a) Except as provided in this Section 404, moneys in the Bond Purchase Fund
shall be used solely for the payment of the Purchase Price of Bonds tendered or
deemed to be tendered for purchase on any purchase date pursuant to Section 205
or Section 206 of this Indenture.

 

(b) On each purchase date, the Trustee shall pay the Purchase Price of Bonds
tendered for purchase from moneys on deposit in the Bond Purchase Fund from
funds derived from the following sources in the order of priority indicated:

 

(i) Proceeds of the remarketing of such Bonds pursuant to Section 207 hereof
which constitute Eligible Funds within the meaning of clause (a) of the
definition of Eligible Funds in this Indenture;

 

(ii) Moneys realized under the Letter of Credit to pay the Purchase Price of
Bonds tendered or deemed to be tendered for purchase (other than Pledged Bonds
or Borrower Bonds); and

 

(iii) Payments made by the Borrower pursuant to Section 3.4 of the Loan
Agreement and all other moneys deposited in the Bond Purchase Fund in accordance
with Section 403(b)(iv) hereof.

 

Unless notified to the contrary by the Remarketing Agent, the Issuer, the
Company or the Bank, the Trustee shall be entitled to assume that remarketing
proceeds delivered to it were remarketed to persons other than the Borrower, the
Issuer, any Insider of the Borrower or the Issuer or any other person obligated
(as guarantor or otherwise) to make payments on the Bonds or under the Loan
Agreement or the Reimbursement Agreement. Bonds (or portions thereof in
Authorized Denominations) purchased with moneys described in clause (i) above
shall be delivered to the purchasers thereof as provided in Section 207 hereof.
Bonds (or portions thereof in Authorized Denominations) purchased with moneys
described in clause (ii) above shall, if the Bonds are not in a book-entry only
system, be registered in the name of the Borrower (or as otherwise provided in
the Pledge Agreement), shall be referred to as Pledged Bonds, shall be held by
the Trustee under the Pledge Agreement in trust for the account of the Borrower,
shall be pledged to the Bank pursuant to the Pledge Agreement securing the
Borrower’s obligations thereunder and shall not be transferred or exchanged by
the Trustee until the Letter of Credit has been reinstated in accordance with
its terms (pursuant to the confirmation by the Trustee to the Bank by telephonic
notice that the Trustee holds in trust for the benefit of the Bank the proceeds
of the remarketing of such Pledged Bonds) in the amount of the aggregate
principal amount of such Bonds and the amount originally realized under the
Letter of Credit to pay the portion of the

 

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Purchase Price equal to the accrued interest, if any, on such Bonds; and the
Trustee may then release such Bonds, and register the transfer of such Bonds in
the names of the new registered owners thereof as shall be provided by the
Remarketing Agent by telephone or telecopy promptly confirmed in writing, in the
manner set forth in Section 207 hereof; provided, however, that Pledged Bonds
which have been held by the Trustee for a period of six (6) months and have not
been remarketed shall, at the written direction of the Bank given to the
Trustee, be canceled. Bonds (or portions thereof in Authorized Denominations)
purchased with moneys described in clause (iii) above shall, at the direction of
the Borrower if the Bonds are not in a book-entry only system, be registered in
the name of the Borrower or be canceled.

 

If the Bonds are in a book-entry only system, the Trustee shall instruct the
Depository to record in the books of the Depository for the account of the
Borrower any Bonds (or portions thereof in Authorized Denominations) purchased
with moneys described in clause (ii) above and the Trustee shall record such
beneficial ownership interest of the Borrower on its books, and such Bonds shall
be referred to as Pledged Bonds, shall be deemed to be held by the Trustee in
trust for account of the Bank and to the fullest extent permitted by law shall
be subject to a security interest in favor of the Bank as security for the
Borrower’s obligations under the Pledge Agreement and the Reimbursement
Agreement, which security interest shall be released only after the Letter of
Credit has been reinstated in accordance with its terms (pursuant to the
confirmation by the Trustee to the Bank by telephonic notice that the Trustee
holds in trust for the benefit of the Bank the proceeds of the remarketing of
such Pledged Bonds) in the amount of the aggregate principal amount of such
Bonds and the amount realized under the Letter of Credit to pay the portion of
the Purchase Price equal to the accrued interest, if any, on such Bonds;
provided, however, that any such Pledged Bonds which have been recorded in the
books of the Depository for the account of the Borrower for a period of six (6)
months and have not been remarketed shall, at the written direction of the Bank
given to the Trustee, be canceled. In addition, during any period in which there
are Pledged Bonds the Trustee shall make appropriate arrangements with the
Depository to segregate the Pledged Bonds on the books of the Depository so that
payments on the Bonds resulting from drawings under the Letter of Credit are not
applied to the Pledged Bonds. If the Bonds are in a book-entry only system, the
Trustee shall, with respect to any Bonds (or portions thereof in Authorized
Denominations) purchased with moneys described in clause (iii) above which the
Borrower does not instruct the Trustee to cancel, instruct the Depository to
record such Bonds in the books of the Depository for the account of the Trustee,
and such Bonds shall be Borrower Bonds.

 

(c) If the funds available under clause (i) of subsection (b) above for the
payment of the Purchase Price of the Bonds to be purchased pursuant to Section
205 or Section 206 of this Indenture are not sufficient to pay the Purchase
Price of such Bonds in full at or before 10:00 a.m., New York City time, on such
purchase date, the Trustee shall, without making any prior demand or claim upon
the Borrower, take action under the Letter of Credit prior to 11:00 a.m., New
York City time, and the Bank shall make payment under the Letter of Credit to
the Trustee at or before 1:30 p.m., New York City time, in immediately available
funds in an amount which will be sufficient, together with the funds available
under such clause (i) of subsection (b) above, to pay the Purchase Price of such
Bonds on such purchase date. If for any reason funds are not available under the
Letter of Credit for payment of the Purchase Price of such Bonds on such

 

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purchase date, the Trustee shall immediately request from the Borrower
immediately available funds sufficient to pay the Purchase Price of such Bonds
by 2:00 p.m., New York City time on that date pursuant to Section 3.4 of the
Loan Agreement.

 

(d) Notwithstanding any other provision of this Indenture to the contrary, in
the event that (i) the Remarketing Agent remarkets any Bonds tendered for
purchase pursuant to Section 205 or Section 206 hereof and the proceeds of such
remarketing are received by the Trustee after the Trustee has taken action under
the Letter of Credit to realize moneys to pay the Purchase Price of such Bonds,
pursuant to subsection (c) above, or (ii) the Remarketing Agent shall
subsequently remarket any Pledged Bonds, the Purchase Price of which Bonds were
paid by the Trustee as a result of action taken under the Letter of Credit
pursuant to subsection (c) above, then all proceeds of any such remarketing
which necessitated such action under the Letter of Credit (or which would
otherwise be payable to the Borrower as the Registered Owner or Beneficial Owner
of the Bonds) shall be paid by the Trustee to the Bank in respect of the
obligations of the Borrower under the Reimbursement Agreement. The Trustee shall
immediately notify the Bank by telecopy or telephone, promptly confirmed in
writing, that such proceeds are on deposit in the Bond Purchase Fund, and the
Bank shall certify to the Trustee the amount of the obligations of the Borrower
under the Reimbursement Agreement. When all obligations of the Borrower to the
Bank under the Reimbursement Agreement have been satisfied, then all such moneys
remaining in the Bond Purchase Fund shall be paid to the Borrower.

 

(e) If at any time moneys are on deposit in the Bond Purchase Fund in excess of
the amounts required to be on deposit therein because the Borrower has made
payment pursuant to Section 3.4 of the Loan Agreement for the purchase of Bonds
tendered or deemed tendered for purchase pursuant to Section 205 or Section 206
hereof and the proceeds of the remarketing of such Bonds pursuant to Section 207
hereof are received by the Trustee prior to the purchase of such Bonds, with the
result that such Bonds are or will be purchased with moneys described in Section
404(b)(i) hereof, such moneys so paid by the Borrower pursuant to Section 3.4 of
the Loan Agreement shall be promptly returned to the Borrower by the Trustee to
such extent.

 

SECTION 405. Deposit of Bond Proceeds. The net proceeds from the sale of the
Bonds shall be deposited into the Project Fund.

 

SECTION 406. Account Statements. The Trustee shall keep and maintain adequate
account statements, including receipts and statements of disbursements, deposits
and investments, pertaining to the Project Fund, Bond Fund and Bond Purchase
Fund. The Trustee shall provide monthly transaction and asset statements
pertaining to such Funds to the Borrower and, upon request, to the Issuer and
the Bank. The Borrower shall retain the transaction and asset statements
described in the preceding sentence and shall provide them to any Person
preparing the calculations or reports required pursuant to Section 409 hereof.
If the Trustee is required to provide such transaction and asset statements to
any Person preparing calculation or reports pursuant to Section 409 hereof, the
Trustee may charge the Borrower its expenses in retrieving such transaction and
asset statements.

 

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SECTION 407. Investment of Project Fund and Bond Fund Moneys. Moneys held as
part of the Project Fund and Bond Fund shall be invested and reinvested at the
written direction of the Borrower in Permitted Investments in accordance with
the provisions of Section 5.3 of the Loan Agreement, provided, however, that (i)
any moneys from a drawing under the Letter of Credit shall remain uninvested,
(ii) any moneys held by the Trustee in the Bond Purchase Fund shall remain
uninvested, and (iii) any other moneys held by the Trustee in the Bond Fund may
only be invested and reinvested in Government Obligations or Government
Obligations Funds. The Trustee may conclusively rely upon such instructions as
to both the suitability and legality of the directed investments. In the event
no such instructions are received by the Trustee, such amounts shall be invested
in Permitted Investments described in clause (viii) of the definition thereof,
pending receipt of such investment instructions. The Trustee may make any and
all such investments through its own investment department or that of its
affiliates or subsidiaries. Any Permitted Investments shall be held by or under
the control of the Trustee and shall be deemed at all times a part of the fund
and account which was used to purchase the same. All interest accruing thereon
and any profit realized from Permitted Investments shall be credited to the
respective fund or account and any loss resulting from Permitted Investments
shall be similarly charged. At the written direction of the Borrower, the
Trustee shall cause to be sold and reduced to cash a sufficient amount of
Permitted Investments whenever the cash balance is or will be insufficient to
make a requested or required disbursement from the Project Fund. The Trustee
shall not be accountable for any depreciation in the value of any Permitted
Investment or for any loss resulting from such sale. Funds in the Bond Purchase
Fund shall remain uninvested. Although the Issuer and the Borrower each
recognize that it may obtain a broker confirmation or written statement
containing comparable information at no additional cost, the Issuer and the
Borrower hereby agree that confirmations of permitted investments are not
required to be issued by the Trustee for each month in which a monthly statement
is rendered. No statement need be rendered for any fund or account if no
activity occurred in such fund or account during such month.

 

The purchase or sale of any securities may be made through the bond or
investment department of the Trustee or the bond or investment department of any
affiliated entity. The Trustee, when authorized by the Borrower, may trade with
itself in the purchase or sale of securities for any investment. The Issuer
requires monthly confirmations of Permitted Investments. Notwithstanding any
provision of this Section 407 to the contrary, no statement need be rendered for
any fund or account if no activity occurred in such fund or account during such
month.

 

SECTION 408. Arbitrage. The Issuer recognizes that investment of the Bond
proceeds will be at the written direction of the Borrower, but agrees that it
will commit no act that would cause the Bonds to be “arbitrage bonds” within the
meaning of Section 148(a) of the Code. The Trustee covenants that, while
recognizing that investment of Bond proceeds will be at the written direction of
the Borrower, should the Issuer file with the Trustee, or should the Trustee
otherwise receive, an opinion of Bond Counsel or Special Tax Counsel, to the
effect that any proposed investment or other use of proceeds of the Bonds would
cause the Bonds to become “arbitrage bonds,” then the Trustee will comply with
any instructions of the

 

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Issuer or such Bond Counsel regarding such investment or use so as to prevent
the Bonds from becoming “arbitrage bonds.” The Trustee shall file a copy of any
such opinion of Bond Counsel with the Issuer, the Borrower and the Bank. The
Trustee shall not be required to determine whether or not any opinion is
required to be submitted.

 

SECTION 409. Rebate of Certain Arbitrage Earnings.

 

(a) Definitions. For purposes of this Section 409:

 

“Bond Year” means the annual period relevant to the application of Section
148(f) of the Code to the Bonds, except that the first and last Bond Years may
be less than twelve (12) months long. The last day of a Bond Year shall be the
close of business on the day preceding the anniversary of the Issue Date of the
Bonds unless the Borrower selects another date on which to end a Bond Year in
the manner permitted by the Code.

 

“Computation Date” means each date on which the Rebate Amount for an issue is
required to be computed under Treasury Regulations §1.148-3(e). In the case of
the Bonds, the first Computation Date shall not be later than five (5) years
after the Issue Date of the Bonds. Subsequent Computation Dates shall be not
later than five (5) years after the immediately preceding Computation Date for
which an installment payment of the Rebate Amount was paid. The final
Computation Date is the date the Bonds are retired.

 

“Rebate Amount” means the excess of the future value, as of any date, of all
receipts on nonpurpose investments acquired with gross proceeds of the Bonds
over the future value, as of that date, of all payments on nonpurpose
investments acquired with gross proceeds of the Bonds, computed in accordance
with Section 148(f) of the Code and Treasury Regulations. Gross proceeds that
are held in a bona fide debt service fund shall not be considered gross proceeds
for purposes of computing the Rebate Amount.

 

All determinations made pursuant to this Section 409 shall be made in accordance
with the applicable portion of Section 148(f) of the Code.

 

The terms “bona fide debt service fund,” “gross proceeds,” and “nonpurpose
investments” have the meanings assigned to them for the applicable purposes of
Section 148(f) of the Code.

 

(b) Rebate Amount. The Trustee shall furnish information to and the Borrower
shall engage (at the expense of the Borrower) an independent certified public
accounting firm or law firm or a consultant experienced in arbitrage rebate
matters, to calculate, within thirty (30) days after the end of the fifth (5th)
Bond Year and every fifth (5th) Bond Year thereafter and within thirty (30) days
after the retirement of all outstanding Bonds, the Rebate Amount, if any, as of
the end of that Bond Year or the date of such retirement. The Borrower shall
immediately notify the Trustee of the Rebate Amount, if any, and shall deliver
copies of the calculation thereof to the Trustee. Within sixty (60) days after
the end of each Computation Date, the Borrower, acting on behalf of the Issuer,
shall pay to the United States in accordance with Section 148(f) of the Code,
the Rebate Amount as of such Computation Date.

 

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On or about each Computation Date, the Trustee shall request in writing that the
Borrower furnish it with copies of the calculations made pursuant to this
Section 409 and evidence of payment of the Rebate Amount to the United States,
if applicable. The Trustee shall keep copies of the calculations made pursuant
to this Section 409 and provided to the Trustee. The Trustee shall be entitled
to rely on the calculations made pursuant to this Section 409 and shall not be
responsible for any loss or damage resulting from any action taken or omitted to
be taken in reliance upon those calculations.

 

Notwithstanding anything herein to the contrary, the Borrower may cause the
amount to be rebated to the United States in accordance with Section 148(f) of
the Code to be calculated under a different method or at different times and may
make such rebate payments at different times; provided that the Borrower, the
Issuer, and the Trustee shall have received a written opinion of Bond Counsel
that using such method or timing of those calculations and making payments at
such times will not adversely affect the exclusion of interest on the Bonds from
gross income of the holders or Beneficial Owners thereof for federal income tax
purposes. The Borrower shall promptly notify the Issuer and the Trustee of its
use of such other method of calculation or making payment at such other time.

 

ARTICLE V

DISCHARGE OF LIEN

 

SECTION 501. Discharge of Lien and Security Interest. Subject to the next
paragraph, upon payment in full of the Bonds, the lien of this Indenture upon
the Security shall cease, terminate and be void, and thereupon the Trustee, upon
determining that all conditions precedent to the satisfaction and discharge of
this Indenture have been complied with, and upon payment of the Trustee’s fees,
costs and expenses hereunder, shall (i) cancel and discharge this Indenture and
the lien of this Indenture upon the Security, (ii) execute and deliver to the
Issuer and the Borrower such instruments in writing which have been provided to
it as shall be required to cancel and discharge the lien of this Indenture and
the Security, (iii) reconvey, as applicable, the Security to the Issuer and the
Borrower, and (iv) assign and deliver to the Issuer and the Borrower so much of
the Security as may be in its possession or subject to its control, except for
moneys and Government Obligations held in the Bond Fund for the purpose of
paying Bonds and except for moneys held in the Bond Purchase Fund for the
purpose of paying the Purchase Price of the Bonds which have been purchased by
the Trustee; provided, however, such cancellation and discharge of this
Indenture shall not terminate the powers and rights granted to the Trustee with
respect to the payment, transfer and exchange of the Bonds; and provided,
further, that the rights of the Issuer, the Trustee and the Remarketing Agent to
indemnity and payment of all reasonable fees and expenses shall survive such
cancellation and discharge.

 

Notwithstanding any other provision to the contrary in this Indenture and unless
otherwise agreed to by the Bank, to the extent that (i) moneys are drawn by the
Trustee under the Letter of Credit which have not been reimbursed by the
Borrower or the Borrower is otherwise indebted to the Bank under the
Reimbursement Agreement and (ii) the fees, costs and expenses of the Issuer and
the Trustee hereunder have been paid, then: (A) the lien of this Indenture shall

 

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not be discharged; (B) the Bank shall be subrogated to the extent of such draws
on the Letter of Credit or the Borrower’s indebtedness to the Bank to all rights
of the Bondholders to enforce the payment of the Bonds from the Security and all
other rights of the Bondholders under the Bonds, this Indenture and the Loan
Agreement; (C) the Bank shall be entitled in its own right upon payment in full
of the principal of and interest on the Bonds to exercise all rights of
enforcement and remedies set forth in Article VI hereof; (D) the Bondholders
will be deemed paid to the extent of moneys drawn by the Trustee under the
Letter of Credit; and (E) the Issuer and the Trustee shall sign, execute and
deliver all documents or instruments (provided the Trustee shall not be required
to prepare any such documents or instruments) and do all things which may be
reasonably required by the Bank to effect the Bank’s subrogation of rights of
enforcement and remedies set forth in Article VI hereof in accordance with the
intent of this Article V, including without limitation a conveyance and
assignment of the Security and the Promissory Note to the Bank.

 

If payment or provision therefor has been made with respect to all the Bonds,
the interest of the Trustee in the Promissory Note shall cease and the Trustee
shall, subject to the rights of the Bank set forth in the preceding paragraph
(including, without limitation, the right to have an assignment of such
Promissory Note), cancel the Promissory Note and return the same to the
Borrower. Neither the obligations nor moneys deposited with the Trustee pursuant
to this Article V shall be withdrawn or used for any purpose other than, and
shall be segregated and held in trust, for the payment of the principal,
premium, if any, and interest on the Bonds or for payment to the Bank in
accordance with the terms of this Indenture.

 

SECTION 502. Provision for Payment of Bonds During Fixed Rate Period. During the
Fixed Rate Period, Bonds shall be deemed to have been paid within the meaning of
Section 501 if (but subject to the provisions of the second paragraph thereof to
the extent that the Bonds during the Fixed Rate Period remain secured by a
Letter of Credit):

 

(a) There have been irrevocably deposited in the Bond Fund:

 

(i) Moneys constituting Eligible Funds, and/or

 

(ii) Noncallable Government Obligations purchased with Eligible Funds, of such
maturities and interest payment dates and bearing such interest as will, without
further investment or reinvestment of either the principal amount thereof or the
interest earnings thereon (such earnings to be held in trust also), be
sufficient together with any moneys referred to in subsection (i) above,

 

for the payment at their respective maturities or redemption dates prior to
maturity, of the principal thereof and the redemption premium (if any) and
interest to accrue thereon to such maturity or redemption dates, as the case may
be;

 

(b) There have been paid all fees, costs and expenses, including without
limitation, reasonable Counsel fees, of the Issuer, the Trustee and the
Remarketing Agent due or to become due or there are sufficient moneys in the
Bond Fund to make such payments;

 

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(c) If any Bonds are to be redeemed on any date prior to their maturity, the
Trustee has received in form satisfactory to it irrevocable instructions to
redeem such Bonds on such date and either evidence satisfactory to the Trustee
that all redemption notices required by this Indenture have been given or
irrevocable power authorizing the Trustee to give such redemption notices has
been given; and

 

(d) The Trustee shall have received a written opinion of Bond Counsel to the
effect that such deposit (and the payment of the Bonds therefrom) will not
adversely affect the exclusion from gross income of interest on the Bonds by the
holders or Beneficial Owners thereof for federal income tax purposes.

 

In determining the sufficiency of the moneys and/or Government Obligations
deposited pursuant to subsection (a) of this Section 502, the Trustee shall be
entitled to receive, at the expense of the Borrower, and may rely on a
verification report of a firm of nationally recognized independent certified
public accountants.

 

Limitations elsewhere specified herein regarding the investment of moneys held
by the Trustee in the Bond Fund shall not be construed to prevent the depositing
and holding in the Bond Fund of the obligations described in the preceding
subparagraph (a)(ii) for the purpose of defeasing the lien of this Indenture as
to Bonds which have not yet become due and payable. In addition, all moneys so
deposited with the Trustee as provided in this Section 502 may also be invested
and reinvested, at the written direction of the Borrower, in Government
Obligations, maturing in the amounts and times as hereinbefore set forth, and
all income from all Government Obligations in the hands of the Trustee pursuant
to this Section 502 which is not required for the payment of the Bonds and
interest and redemption premium, if any, thereon with respect to which such
moneys shall have been so deposited under this Section 502 shall be deposited in
the Bond Fund as and when realized and collected for use and application as are
other moneys deposited in the Bond Fund.

 

SECTION 503. Discharge of this Indenture. Notwithstanding the discharge and
cancellation of the lien of this Indenture upon the Security under Section 501
hereof, this Indenture and the rights granted and duties imposed hereby, to the
extent not inconsistent with such discharge and cancellation of the lien upon
the Security, shall nevertheless continue and subsist after payment in full of
the Bonds and all of the Borrower’s obligations to the Bank under the
Reimbursement Agreement until the Trustee shall have returned to the Borrower
all funds held by the Trustee in the Bond Fund, Project Fund and the Bond
Purchase Fund pursuant to Sections 401, 402 and 404 of this Indenture.

 

SECTION 504. Unclaimed Moneys. Any moneys deposited with the Trustee in
accordance with the terms and provisions of this Indenture, or any moneys held
by any paying agent, in trust for the payment of the principal of and redemption
premium, if any, or interest on the Bonds or the Purchase Price of any
Unsurrendered Bonds and remaining unclaimed by the Registered Owners of the
Bonds for four (4) years after the final maturity of all Bonds issued hereunder
or the redemption date of all the Bonds, as the case may be, shall, at the
request of the Borrower (and if the Borrower is not at the time to the knowledge
of the Trustee

 

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in default with respect to any covenant contained in the Loan Agreement and if
the Issuer is not in default hereunder or under the Bonds) and upon provision of
adequate indemnification from the Borrower, the Trustee shall pay such amounts
to the Borrower, and the Holders of the Bonds for which the deposit was made
shall thereafter be limited to a claim against the Borrower. Upon any such
disposition to the Borrower, all liability of the Trustee with respect to the
such funds shall cease. All moneys held by the Trustee and subject to this
Section shall be held uninvested and without liability for interest thereon.
However, if the escheatment laws of the State direct a different disposition of
such funds, the Trustee shall comply with such laws. The Issuer, the Bank, the
Remarketing Agent and the Trustee shall have no responsibility with respect to
such moneys.

 

ARTICLE VI

DEFAULT PROVISIONS AND REMEDIES

 

SECTION 601. Events of Default. Any one (1) of the following shall constitute an
Event of Default hereunder:

 

(a) Default in the payment of any interest on any Bond when and as the same is
due;

 

(b) Default in the payment of the principal of or any premium on any Bond when
and as the same is due, whether at the stated maturity or redemption date
thereof or by acceleration;

 

(c) Default in the payment of the Purchase Price of any Bond required to be
purchased hereunder when and as the same is due;

 

(d) Default in the observance or performance of any other of the covenants,
agreements or conditions on the part of the Issuer included in this Indenture or
in the Bonds and the continuance thereof for a period of thirty (30) days after
the Trustee gives written notice to the Issuer, the Bank and the Borrower;

 

(e) The occurrence of an “Event of Default” as defined in the Loan Agreement;

 

(f) The Trustee receives a written notice from the Bank specifying the
occurrence of an “event of default” under the Reimbursement Agreement and
directing the Trustee to accelerate the Bonds; or

 

(g) The Bank shall wrongfully dishonor any draft or other request for payment
under the Letter of Credit presented in strict accordance with its terms, the
Letter of Credit shall, for any reason, become unavailable to or unenforceable
by the Trustee, or the Bank (i) shall generally not pay its debts as they become
due, (ii) shall admit in writing its inability to pay its debts generally, (iii)
shall make a general assignment for the benefit of creditors, (iv) shall
institute any proceeding or voluntary case (A) seeking to adjudicate it a
bankrupt or insolvent or (B) seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or (C) seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any

 

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substantial part of its property, (v) shall take any action to authorize any of
the actions described above in this subsection (g), or (vi) shall have
instituted against it any proceeding (A) seeking to adjudicate it a bankrupt or
insolvent or (B) seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of
debtors or (C) seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property, and, if each such proceeding is being
contested by the Bank in good faith, each such proceeding shall remain
undismissed or unstayed for a period of sixty (60) days, and the Borrower shall
not have obtained an Alternate Letter of Credit within sixty (60) days after
receipt of notice of each such occurrence.

 

Any default described in Section 601(d) hereof may be waived by the Trustee with
the written consent of the Bank from time to time if the Issuer (or the
Borrower, on behalf of the Issuer) is proceeding with all due diligence to cure
such default and the Issuer is not otherwise in default hereunder.

 

SECTION 602. Acceleration. Subject to the requirement that the Bank’s consent to
any acceleration must be obtained in the case of an Event of Default described
in subsection (d) or (e) of Section 601 hereof, upon the occurrence of any Event
of Default hereunder, the Trustee may and upon (i) the written request of the
holders of not less than a majority in aggregate principal amount of Bonds then
Outstanding or (ii) the occurrence of an Event of Default under subsection (f)
of Section 601 hereof, the Trustee shall immediately, by notice in writing sent
to the Issuer and Borrower, declare the principal of and any premium on all
Bonds then Outstanding (if not then due and payable) and the interest accrued
thereon to be due and payable immediately, and, upon such declaration, such
principal and premium, if any, and interest shall become and be immediately due
and payable. Interest on the Bonds shall cease to accrue on the date of such
declaration. Upon any declaration of acceleration hereunder, the Trustee shall
immediately exercise such rights as it may have under the Loan Agreement to
declare all payments thereunder to be immediately due and payable and, to the
extent it has not already done so and to the extent necessary, shall immediately
draw upon the Letter of Credit as provided in clause (iii) of Section 308(e)
hereof.

 

Immediately following any such declaration of acceleration, the Trustee shall,
at the expense of the Borrower, mail notice of such declaration by first class
mail to each holder of Bonds at his, her or its last address appearing on the
Bond Register. Any defect in or failure to give such notice of such declaration
shall not affect the validity of such declaration.

 

SECTION 603. Other Remedies; Rights of Bondholders. Upon the happening and
continuance of an Event of Default hereunder the Trustee may, but only with the
prior written consent of the Bank (subject to the limitations described in
Section 902 hereof), with or without taking action under Section 602 hereof,
pursue any available remedy to enforce the performance of or compliance with any
other obligation or requirement of this Indenture, the Loan Agreement or the
Promissory Note.

 

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Subject to Section 602 hereof and the requirement that the Bank’s consent to the
exercise by the Trustee of any such available remedy must be obtained (subject
to the limitations described in Section 902 hereof), upon the happening and
continuance of an Event of Default, and if requested to do so by the holders of
at least a majority in aggregate principal amount of Bonds then Outstanding and
the Trustee is indemnified as provided in Section 701 hereof, the Trustee shall
exercise such of the rights and powers conferred by this Section 603 and by
Section 602 hereof as the Trustee, being advised by Counsel, shall deem most
effective to enforce and protect the interests of the Bondholders, except to the
extent inconsistent with the interests of the Bondholders and the Bank.

 

No remedy by the terms of this Indenture conferred upon or reserved to the
Trustee (or to the Bondholders) is intended to be exclusive of any other remedy,
but each and every such remedy shall be cumulative and shall be in addition to
any other remedy given to the Trustee or to the Bondholders hereunder or now or
hereafter existing.

 

No delay or omission to exercise any right or power accruing upon any default or
Event of Default shall impair any such right or power or shall be construed to
be a waiver of any such default or Event of Default or acquiescence therein; and
every such right and power may be exercised from time to time and as often as
may be deemed expedient by the Trustee.

 

No waiver of any default or Event of Default hereunder, whether by the Trustee
or by the Bondholders, shall extend to or shall affect any subsequent default or
Event of Default or shall impair any rights or remedies consequent thereon.

 

The Trustee, as the assignee of all right, title and interest, but not the
obligations, of the Issuer in and to the Loan Agreement (with the exception of
the Unassigned Rights), shall be empowered to enforce each and every right
granted to the Issuer under the Loan Agreement (with the exception of the
Unassigned Rights).

 

SECTION 604. Right of Bondholders and Bank to Direct Proceedings. Anything in
this Indenture to the contrary notwithstanding, and subject to the rights of the
Bank to direct proceedings as provided in Sections 602 and 603 hereof, the
holders of a majority in aggregate principal amount of Bonds then Outstanding
shall have the right at any time, by an instrument or instruments in writing
executed and delivered to the Trustee, to direct the method and place of
conducting all proceedings to be taken in connection with the enforcement of the
terms and conditions of this Indenture, or any other proceedings hereunder;
provided, that such direction shall not be otherwise than in accordance with the
provisions of law and of this Indenture; and provided that the Trustee shall be
indemnified to its satisfaction (except for actions required under Section
308(e)(iii) or Section 602 hereof). No Bondholder shall individually, or
collectively except through the Trustee, have the right to present a draft to
the Bank to collect amounts available under the Letter of Credit.

 

No Bondholder shall have the right to institute any proceeding for the
enforcement of this Indenture unless such Bondholder has given the Trustee and
the Borrower written notice of an Event of Default, the holders of a majority in
aggregate principal amount of the Bonds then Outstanding shall have requested
the Trustee in writing to institute such proceeding, the Trustee

 

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shall have been afforded a reasonable opportunity to exercise its powers or to
institute such proceeding, and there shall have been offered to the Trustee
indemnity and the Trustee shall have thereafter failed or refused to exercise
such powers or to institute such proceeding within a reasonable time. Nothing in
this Indenture shall affect or impair any right of enforcement conferred on any
Bondholder hereof by the Act to enforce (i) the payment of the principal of and
premium (if any) and interest on Bonds at and after the maturity thereof, or
(ii) the obligation of the Issuer to pay the principal of and premium (if any)
and interest on Bonds to such Bondholder at the time, place, from the source and
in the manner as provided in this Indenture.

 

SECTION 605. Discontinuance of Default Proceedings. Prior to the drawing on the
Letter of Credit pursuant to clause (iii) of Section 308(e) hereof, in case the
Trustee has proceeded to enforce any right under this Indenture by the
appointment of a receiver or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or have been determined adversely,
then and in every such case the Issuer, the Bank and the Trustee shall be
restored to their former positions and rights hereunder and all rights, remedies
and powers of the Trustee and the Bank shall continue as if no such proceedings
had been taken subject to the limits of any adverse determination.

 

SECTION 606. Waiver. To the extent not precluded by the Act and Section 10.5 of
the Loan Agreement, the Trustee, with the consent of the owners of a majority in
aggregate principal amount of the Outstanding Bonds and with the consent of the
Bank (subject to the limitations described in Section 902 hereof), may waive any
default or Event of Default hereunder and its consequences and rescind any
declaration of acceleration of maturity of principal, and shall do so upon the
written request of the Bank; provided, however, that there shall be no such
waiver or rescission unless the Purchase Price and all principal, premium, if
any, and interest on the Bonds in arrears together with interest thereon (to the
extent permitted by law) at the applicable rate of interest borne by the Bonds
and all fees and expenses of the Trustee and the Issuer shall have been paid or
provided for. The Trustee may not waive any default or Event of Default
hereunder unless the amount available to be drawn under the Letter of Credit in
respect of the Purchase Price of the Outstanding Bonds (including both principal
and interest, if any) and principal, premium (if covered thereby), and interest
on the Outstanding Bonds has been reinstated in full and the Trustee has
received the written consent of the Bank to such waiver, the written
acknowledgment of the Bank of such reinstatement, and in the case of an Event of
Default under Section 601(f) hereof, the written notice of rescission by the
Bank of the prior written notice and direction of the Bank provided pursuant to
such Section 601(f).

 

SECTION 607. Application of Moneys. All moneys received by the Trustee pursuant
to any right given or action taken under the provisions of this Article VI shall
be deposited in the Bond Fund. After payment (out of moneys derived from a
source other than the Letter of Credit) of (i) the cost and expenses of the
proceedings resulting in the collection of such moneys and of the expenses,
liabilities and advances incurred or anticipated to be incurred or made by the
Trustee, including reasonable attorneys’ fees, and all other current outstanding
fees and expenses of the Trustee, and (ii) any sums due to the Issuer under the
Loan

 

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Agreement (other than Loan Repayments), such moneys shall be applied in the
order set forth below:

 

(a) To the Bondholders for the payment of the principal, premium, if any, and
interest then due and unpaid upon the Bonds, without preference or priority as
between principal, premium or interest, installments of interest or Bonds,
ratably according to the amounts due respectively for principal, premium and
interest to the Persons entitled thereto;

 

(b) To the Bank to the extent the Bank certifies to the Trustee that the
Borrower is indebted to the Bank under the Reimbursement Agreement; and

 

(c) To the Borrower.

 

Notwithstanding the foregoing, the Trustee shall apply moneys received under the
Letter of Credit only to principal, premium (if covered by the Letter of Credit)
and interest on the Bonds (except Pledged Bonds and Borrower Bonds). Subject to
Section 602 hereof, whenever moneys are to be applied pursuant to this Section
607, the Trustee shall fix the date of declaration of acceleration (which shall
be the earliest practical date, in the sole discretion of the Trustee, for which
the requisite notice to the Issuer can be given) upon which such application is
to be made and upon such date of declaration interest on the amounts of
principal to be paid on such dates shall cease to accrue. The Trustee shall give
such notice as it may deem appropriate of the deposit with it of any such moneys
and of the fixing of any such date.

 

ARTICLE VII

THE TRUSTEE AND THE REMARKETING AGENT

 

SECTION 701. Appointment. The Trustee is hereby appointed and does hereby agree
to act in such capacity, and to perform the express duties of the Trustee under
this Indenture, but only upon and subject to the following express terms and
conditions (and no implied covenants or other obligations shall be read into
this Indenture against the Trustee):

 

(a) The Trustee may execute any of its trusts or powers and perform any of its
duties herein by or through attorneys, agents, receivers or employees, and shall
be entitled to rely on advice of Counsel and other professionals concerning all
matters of such trusts, powers and duties. The Trustee shall not be answerable
for the default or misconduct of any attorney, agent, receiver or employee
selected by it with reasonable care, and may in all cases pay such Persons
reasonable compensation. The Trustee shall not be answerable for the exercise of
any discretion or power under this Indenture or for anything whatsoever in
connection with its trusts, powers and duties herein, except only for its gross
negligence or willful misconduct.

 

(b) The Trustee shall not be responsible for any recital herein or in the Bonds
(except with respect to the certificate of authentication of the Trustee
endorsed on the Bonds), or for the validity of the execution by the Issuer of
this Indenture or of any supplements thereto or instruments of further
assurance, or for the sufficiency of the Security for the Bonds. Except as
otherwise provided in Sections 308(e) and 602 hereof, the Trustee shall have no
obligation to perform any of the duties of the Issuer under the Loan Agreement,
and the Trustee shall not be

 

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liable for any loss suffered in connection with any investment of funds made by
it in accordance with Section 407 hereof. The Trustee shall not be responsible
for (i) the validity, priority, recording, rerecording, filing or refiling of
this Indenture or any supplemental Indenture, (ii) any instrument or document of
further assurance or collateral assignment, (iii) any financing statements,
amendments hereto or continuation statements, (iv) the validity of the execution
by the Issuer of this Indenture, any supplemental Indenture or instruments or
documents of further assurance, (v) the sufficiency of the security for the
Bonds issued hereunder or intended to be secured hereby, (vi) the value of or
title to the Project, or insurance of the Project or collection of insurance
moneys, or (vii) the maintenance of the Security hereof. The Trustee shall have
no duty or responsibility to examine or review and shall have no liability for
the contents of any documents submitted to or delivered to any Bondholder in the
nature of a preliminary or final placement memorandum, official statement,
offering circular or similar disclosure document.

 

(c) The Trustee shall not be accountable for the use of any Bonds authenticated
or delivered hereunder after such Bonds shall have been delivered in accordance
with instructions of the Issuer or for the use by the Borrower of the proceeds
of the Loan (as defined in the Loan Agreement). The Trustee may become the owner
of Bonds with the same rights as any other Bondholder.

 

(d) The Trustee shall be protected in acting upon opinions of Counsel and upon
any notice, request, consent, certificate, order, affidavit, letter, or other
paper or document believed in good faith to be genuine and correct and to have
been signed or sent by an authorized representative of such Person or Persons.
Any action taken by the Trustee pursuant to this Indenture upon the request or
consent of any Person who at the time of making such request or giving such
consent is the owner of any Bond (such ownership to be established as provided
in Section 213 hereof), shall be conclusive and binding upon all future owners
or holders of the same Bond and upon Bonds issued in exchange therefor or in
place thereof. The Trustee may conclusively rely upon a certificate furnished by
the Bank as to amounts owing under the Reimbursement Agreement.

 

(e) The permissive right of the Trustee to do things enumerated in this
Indenture or the Loan Agreement shall not be construed as duties. The Trustee
shall only be responsible for the performance of the duties expressly set forth
herein and shall not be answerable for other than its gross negligence or
willful misconduct in the performance of those express duties.

 

(f) The Trustee shall not be personally liable for any debts contracted or for
damages to Persons or to property injured or damaged, or for salaries or
non-fulfillment of contracts, relating to the Project.

 

(g) The Trustee shall not be required to give any bond or surety in respect of
the execution of its trusts and powers or otherwise hereunder.

 

(h) Before taking any action hereunder (except for (i) acceleration of the Bonds
as required by Section 602 hereof, (ii) for drawing on the Letter of Credit as
required by Section 308(e) hereof, (iii) any payments to Bondholders as set
forth herein from moneys in the possession of the Trustee, and (iv) any
Mandatory Tender of Bonds as set forth in Section 206

 

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hereof), the Trustee may require that satisfactory security or indemnity be
furnished to it for the reimbursement of all fees and expenses to which it may
be put and to protect it against all liability, except liability which is
adjudicated to have resulted from its own gross negligence or willful misconduct
by reason of any action so taken.

 

(i) All moneys received by the Trustee, until used or applied or invested as
herein provided, shall be held as special trust funds for the purposes specified
in this Indenture and for the benefit and security of the holders of the Bonds
and the Bank as herein provided. Such moneys need not be segregated from other
funds except to the extent required by law or herein provided, and the Trustee
shall not otherwise be under any liability for interest on any moneys received
hereunder.

 

(j) The Trustee shall not be bound to ascertain or inquire as to the performance
of the obligations of the Borrower under the Loan Agreement or the Issuer under
this Indenture, and shall not be deemed to have, or required to take, notice of
a Determination of Taxability or an Event of Default under this Indenture,
except (i) in the event the Borrower fails to pay any Loan Repayment when due,
(ii) in the event of an insufficient amount in the Bond Fund (or any account
therein) to make a principal or interest payment on the Bonds, (iii) upon
written notification actually received by the Trustee of the occurrence of a
Determination of Taxability from the Borrower, the Issuer or the holder of any
Bonds, (iv) upon written notification of a default actually received by the
Trustee from the Issuer or the holders of not less than a majority of the
principal amount of Outstanding Bonds, or (v) upon written notification actually
received by the Trustee from the Bank pursuant to Section 601(f) hereof. In the
absence of such notice, the Trustee may conclusively presume there is no
Determination of Taxability and no Event of Default except as aforesaid. The
Trustee may nevertheless require the Issuer and the Borrower to furnish
information regarding performance of their obligations under the Loan Agreement
and this Indenture, but is not obligated to do so.

 

(k) The Trustee may request a certificate from the Borrower that no Act of
Bankruptcy has occurred, and the Trustee may conclusively rely upon such
certificate as to the matters set forth therein.

 

(l) The Trustee shall, prior to any Event of Default and after the curing of all
Events of Default which may have occurred, perform such duties and only such
duties of the Trustee as are specifically set forth in this Indenture and the
Loan Agreement. The Trustee shall, during the existence of any Event of Default
(which has not been cured), exercise such of the rights and powers vested in it
by this Indenture and the Loan Agreement and use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs. The foregoing shall
not limit the Trustee’s obligations under Section 308(e)(iii) or Section 602
hereof.

 

(m) In the event that the Trustee receives direction from Bondholders under any
Section of this Indenture which permits Bondholders to direct the actions of the
Trustee, the Trustee shall only be required to act pursuant to the direction of
the Bondholders which represent the largest percentage in aggregate principal
amount of the Outstanding Bonds at the time such

 

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direction is issued to the Trustee (the “Majority Direction”). The Trustee may
act pursuant to other directions of Bondholders to the extent that such
direction is not inconsistent with the Majority Direction. The Trustee shall not
be liable for a failure to act upon any direction except the Majority Direction
when acting pursuant to this Section 701(m). Nothing in this Section 701(m)
shall be construed to modify or amend any Section hereof which requires a
minimum number of Bondholders to direct the Trustee to take certain action or
requires that indemnity satisfactory to the Trustee be provided before the
taking of such action by the Trustee becomes mandatory.

 

(n) The Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the direction of the Bank or
the Bondholders relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee hereunder, or exercising any
trust or power conferred upon the Trustee, under this Indenture. No provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it;
provided that the foregoing shall not relieve the Trustee of its duties to take
actions required to be taken under Section 602 and with respect to payments to
be made under the Letter of Credit and making payments on the Bonds when due.

 

(o) Notwithstanding any provision of this Indenture to the contrary, the Trustee
shall not be liable or responsible for the accuracy of any calculation or
determination which may be required in connection with or for the purpose of
complying with Section 148 of the Code, including, without limitation, the
calculation of amounts required to be paid to the United States under the
provisions of Section 148 of the Code, the maximum amount which may be invested
in “nonpurpose obligations” as defined in the Code and the fair market value of
any investments made hereunder, and the sole obligation of the Trustee with
respect to the investments of funds hereunder shall be to invest the moneys
received by the Trustee as provided herein pursuant to the written instructions
of the Borrower.

 

(p) Affiliates of the Trustee may serve as the Remarketing Agent or as the Bank.

 

(q) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Article.

 

SECTION 702. Fees, Expenses. The Trustee shall be entitled to payment and/or
reimbursement for reasonable fees for its ordinary services rendered hereunder
and all advances, counsel fees and other ordinary expenses reasonably made or
incurred by the Trustee in connection with such ordinary services. If it becomes
necessary that the Trustee perform extraordinary services (including services
performed in connection with the occurrence of a default or an Event of Default
hereunder or under the Loan Agreement), it shall be entitled to reasonable extra
compensation therefor, and to reimbursement for reasonable extraordinary
expenses in connection therewith; provided, that if such

 

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extraordinary services or extraordinary expenses are occasioned by the gross
negligence or willful misconduct of the Trustee it shall not be entitled to
compensation or reimbursement therefor.

 

The Trustee shall also be indemnified by the Borrower as provided in the Loan
Agreement. The Trustee recognizes that all fees, charges and other compensations
to which it may be entitled under this Indenture are required to be paid by the
Borrower under the terms of the Loan Agreement or from funds derived from the
Project or from the proceeds of the Bonds. Accordingly, the Trustee agrees that
except for moneys that the Issuer may derive from the foregoing (excluding,
however, the moneys for the issuance fee, administrative costs, taxes and other
public service charges and indemnity under Sections 3.5, 8.6 and 10.4 of the
Loan Agreement) the Issuer shall not be liable for any such fees, charges and
other compensation to which the Trustee and the Remarketing Agent may be
entitled. Payment of all such amounts shall however, be secured by the Security
(except the Letter of Credit and any moneys on deposit with the Trustee which
are being held in the Bond Fund for the purpose of paying to Bondholders
principal, Purchase Price, premium, if any, or interest which has previously
become payable with respect to the Bonds) as set forth herein.

 

As security for the payment of the Trustee’s fees, costs and expenses and for
the indemnity provided in this Section 702, the Trustee shall have a first lien
on all moneys and property coming into its possession (except for any moneys on
deposit with the Trustee which are being held in the Bond Fund for the purpose
of paying to the Bondholders principal, Purchase Price, premiums, if any, or
interest which has previously become payable with respect to the Bonds).

 

When the Trustee incurs expenses or renders services after the occurrence of an
Act of Bankruptcy with respect to the Issuer or the Borrower, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any federal or state bankruptcy, insolvency, arrangement,
moratorium, reorganization or other debtor relief law.

 

The Borrower’s payment obligations under this Section 702 and the Loan Agreement
shall survive the discharge of this Indenture and the resignation or removal of
the Trustee, and shall not be limited by any law affecting the compensation of a
trustee of an express trust.

 

SECTION 703. Intervention in Litigation. In any judicial proceedings to which
the Issuer is a party, the Trustee may intervene on behalf of Bondholders, and
shall intervene if requested in writing by the holders of at a majority of the
aggregate principal amount of Bonds then Outstanding and indemnified as provided
in Section 701(h) hereof.

 

SECTION 704. Resignation; Appointment of Successor Trustee; Successor Trustee
Upon Merger, Consolidation or Sale. (a) The Trustee and any successor Trustee
may resign only upon giving sixty (60) days’ prior written notice to the Issuer,
the Bank, the Borrower and the Bondholders. Such resignation shall take effect
only upon the appointment of a successor Trustee as described in Section 704(b)
below and the acceptance of such appointment by the successor Trustee. If a
successor Trustee is not appointed within 120 days after the Trustee has given
notice of its resignation, the Trustee, at the expense of the Borrower, shall
have the right

 

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to petition a court of competent jurisdiction to appoint a successor Trustee
hereunder. Upon appointment of a successor Trustee, the resigning Trustee shall,
after payment of its fees, costs and expenses, assign all of its right, title
and interest in the Security, and transfer and assign its right, title and
interest in the Indenture and the Letter of Credit, pursuant to the terms of the
Letter of Credit, to the successor Trustee. The successor Trustee shall meet the
requirements of Section 704(b) below and shall accept in writing its duties and
responsibilities hereunder and file such acceptance with the Issuer, the Bank
and the Borrower.

 

(b) In case the Trustee shall give notice of resignation or be removed, or be
dissolved, or shall be in the course of dissolution or liquidation, or otherwise
become incapable of acting hereunder, or in case it shall be taken under the
control of any public office or offices, or of a receiver appointed by a court,
a successor may with the prior written consent of the Borrower (to the extent
that no “Event of Default” shall have occurred and be continuing under the Loan
Agreement) and the Bank, be appointed by the owners of a majority in aggregate
principal amount of Bonds then Outstanding, by an instrument or concurrent
instruments in writing signed by such owners, or by their duly authorized
attorneys in fact, a copy of which shall be delivered personally or sent by
first class mail, postage prepaid, to the Issuer, the retiring Trustee, the
successor Trustee, the Borrower, the Bank and the Remarketing Agent. Pending
such appointment by the Bondholders, the Issuer may, with the consent of the
Borrower (to the extent that no “Event of Default” shall have occurred and be
continuing under the Loan Agreement) and the Bank, appoint a successor Trustee,
by an instrument in writing signed by an authorized officer of the Issuer, a
copy of which shall be delivered personally or sent by first class mail, postage
prepaid, to the retiring Trustee, the successor Trustee, the Borrower, the Bank
and the Remarketing Agent. If the Registered Owners and the Issuer fail to so
appoint a successor Trustee, hereunder within forty-five (45) days after the
Trustee has given notice of its resignation, has been removed, has been
dissolved, has otherwise become incapable of acting hereunder or has been taken
under control by a public officer or receiver, the Trustee shall have the right
to petition a court of competent jurisdiction to appoint a successor hereunder.
Every such Trustee appointed pursuant to the provisions of this Section 704
shall (i) be a trust company or bank organized and in good standing under the
laws of Mississippi or any state or the District of Columbia or be a national
banking association organized under the laws of the United States (in either
case, having trust powers), and (ii) have a combined capital and surplus of not
less than $50,000,000 as set forth in its most recent published annual report of
condition.

 

(c) Notwithstanding any of the provisions of this Article VII to the contrary
concerning the resignation or removal of the Trustee or the appointment of a
successor Trustee, so long as a Letter of Credit is supporting the payment of
the Bonds, no such resignation, removal or appointment shall be effective until
the Bank shall have issued and delivered to the successor Trustee (i) a
substitute Letter of Credit in substantially the same form as the existing
Letter of Credit, but in favor of the successor Trustee, whereupon the retiring
Trustee shall simultaneously return the Letter of Credit then held by it to the
Bank for cancellation, or (ii) an amendment to the existing Letter of Credit,
evidencing transfer thereof in all respects to the successor Trustee, to the
extent permitted by law and by the terms of the Letter of Credit.

 

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(d) Any company, bank, trust company or association into which the Trustee may
be merged or converted or with or into which it may be consolidated, or to which
it may sell or transfer its corporate trust business and assets as a whole or
substantially as a whole, or any company, bank, trust company or association
resulting from any merger, conversion, sale, consolidation or transfer to which
it is a party, provided such company shall be eligible under Section 704(b)
hereof, shall be and become successor Trustee hereunder and shall be vested with
all the trusts, powers, rights, obligations, duties, remedies, immunities and
privileges hereunder as was its predecessor, without the execution or filing of
any instrument or any further act on the part of any of the parties hereto.

 

SECTION 705. Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing (a) delivered to the Trustee,
the Bank, the Issuer and the Borrower and signed by the owners of a majority in
aggregate principal amount of Bonds then Outstanding, or (b) delivered to the
Trustee and the Issuer and signed by the Borrower and consented to by the Bank;
which consent shall not be unreasonably withheld, provided that if an Event of
Default has occurred and is continuing hereunder, the Trustee may not be removed
without the consent of the holders of a majority in aggregate principal amount
of the Bonds then Outstanding. No removal of the Trustee and no appointment of a
successor Trustee shall become effective until the successor Trustee has
accepted its appointment in the manner provided in Section 704 hereof. Upon such
removal and the payment of its fees, costs and expenses, the Trustee shall
assign to the successor Trustee all of its right, title and interest in the
Security in the same manner as provided in Section 704 hereof, and transfer and
assign its right, title and interest in the Letter of Credit pursuant to the
terms of the Letter of Credit.

 

SECTION 706. Instruments of Bondholders. Any instrument required by this
Indenture to be executed by Bondholders may be in any number of writings of
similar tenor and may be executed by Bondholders in person or by an agent
appointed in writing. Proof of the execution of any such instrument or of the
writing appointing any such agent shall be sufficient for any of the purposes of
this Indenture if it is established by a certificate of any officer in any
jurisdiction who by law has power to take acknowledgments within such
jurisdiction that the person signing such writing acknowledged before him the
execution thereof. Proof of the ownership of Bonds shall be established by the
ownership records noted in the Bond Register.

 

The Trustee may rely on such an instrument of Bondholders unless and until the
Trustee receives notice in the form specified above that the original such
instrument is no longer trustworthy. In the event that the Trustee receives
conflicting directions from two groups of Bondholders, each with combined
holdings of not less than twenty-five percent (25%) of the principal amount of
Outstanding Bonds, the Majority Direction shall be controlling and the Trustee
shall follow such Majority Direction as required in this Indenture.

 

SECTION 707. Power to Appoint Co-Trustees. At any time or times, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Project is located, the Issuer and the Trustee, with the written consent of the
Bank and the Borrower, may appoint, and, upon the request of the Trustee or of
the holders of not less than a majority

 

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of the aggregate principal amount of the Bonds then Outstanding, the Issuer
shall, with the written consent of the Bank and the Borrower, join with the
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint one or more Persons approved by the
Trustee either to act as co-trustee or co-trustees, jointly with the Trustee of
all or any part of the Project, or to act as separate trustee or separate
co-trustees of all or any part of the Project, and to vest in such Person or
Persons, in such capacity, such title to the Project or any part thereof, and
such rights, powers, duties, trusts or obligations as the Issuer and the Trustee
may consider necessary or desirable, subject to the provisions of this Section
707.

 

The Bank shall not be required to honor a draft on the Letter of Credit from a
co-trustee unless the Trustee has transferred and assigned to such co-trustee
its right, title and interest in the Letter of Credit in accordance with the
terms of the Letter of Credit.

 

If the Issuer has not joined in such appointment within thirty (30) days after
the receipt by it of a request so to do, or in case an Event of Default has
occurred and is continuing, the Trustee alone shall have the power to make such
appointment.

 

The Issuer shall execute, acknowledge and deliver all such instruments as may be
required by any such co-trustee or separate trustee for more fully confirming
such title, rights, powers, trusts, duties and obligations to such co-trustee or
separate trustee.

 

Every co-trustee or separate trustee shall, to the extent permitted by law or
any applicable contract, be appointed subject to the following terms, namely:

 

(a) This Indenture shall become effective once the Bonds are authenticated and
delivered, and thereupon the Trustee shall have all rights, powers, trusts,
duties and obligations by this Indenture conferred upon the Trustee in respect
of the custody, control or management of moneys, papers, securities and other
personal property.

 

(b) All rights, powers, trusts, duties and obligations conferred or imposed upon
the Trustee shall be conferred or imposed upon and exercised or performed by the
Trustee, or by the Trustee and such co-trustee or co-trustees, or separate
trustee or separate trustees, as shall be provided in the instrument appointing
such co-trustee or co-trustees or separate trustee or separate trustees, except
to the extent that, under the law of any jurisdiction in which any particular
act or acts are to be performed, the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such act or acts shall be performed
by such co-trustee or co-trustees or separate trustee or separate trustees.

 

(c) Any request in writing by the Trustee to any co-trustee or separate trustee
to take or to refrain from taking any action hereunder shall be sufficient
warrant for the taking, or the refraining from taking, of such action by such
co-trustee or separate trustee.

 

(d) Any co-trustee or separate trustee to the extent permitted by law may
delegate to the Trustee the exercise of any right, power, trust, duty or
obligation, discretionary or otherwise.

 

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(e) The Trustee at any time, by an instrument in writing, with the concurrence
of the Issuer evidenced by a resolution, may accept the resignation of or remove
any co-trustee or separate trustee appointed under this Section 707. If an Event
of Default has occurred and is continuing, the Trustee may accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Issuer. Upon the request of the Trustee, the Issuer shall
join with the Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section 707.

 

(f) No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder.

 

(g) Any demand, request, direction, appointment, removal, notice, consent,
waiver or other action in writing executed by any Bondholder and delivered to
the Trustee shall be deemed to have been delivered to each such co-trustee or
separate trustee.

 

(h) Any moneys, papers, securities or other items of personal property received
by any such co-trustee or separate trustee hereunder shall forthwith, so far as
may be permitted by law, be turned over to the Trustee.

 

Upon the acceptance in writing of such appointment by any such co-trustee or
separate trustee, it shall be vested with the security interest in the Security
and with such rights, powers, duties, trusts or obligations, as shall be
specified in the instrument of appointment jointly with the Trustee (except
insofar as local law makes it necessary for any such co-trustee or separate
trustee to act alone) subject to all the terms of this Indenture. Every such
acceptance shall be filed with the Trustee.

 

In case any co-trustee or separate trustee shall die, become incapable of
acting, resign or be removed, the security interest in the Security and all
rights, powers, trusts, duties and obligations of such co-trustee or separate
trustee shall, so far as permitted by law, vest in and be exercised by the
Trustee unless and until a successor co-trustee or separate trustee shall be
appointed in the same manner as provided for with respect to the appointment of
a successor Trustee pursuant to Section 704 hereof.

 

SECTION 708. Recordation and Other Instruments. In order to perfect the security
interest of the Trustee and to perfect the security interest in the Note, the
Issuer, to the extent permitted by law, will execute such security agreements or
financing statements, naming the Trustee as assignee and pledgee of the Bonds
assigned and pledged under this Indenture for the payment of the principal of,
premium, if any, and interest on the Bonds and as otherwise provided herein, and
the Borrower will cause the same to be duly filed and recorded, as the case may
be, in the appropriate state and county offices as required by the provisions of
the Uniform Commercial Code or other similar law as adopted in the State, as
from time to time amended. To continue the security interest evidenced by such
security agreements or financing statements, the Borrower, at its own expense,
shall prepare and deliver to the Trustee, and the Trustee, at the Borrower’s
expense, shall file and record or cause to be filed

 

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and recorded such necessary continuation statements or supplements thereto and
other instruments from time to time as may be required pursuant to the
provisions of the said Uniform Commercial Code or other similar law to fully
preserve and protect the security interest of the Trustee in the Bonds and to
perfect the security interest in the Note. The Issuer, to the extent permitted
by law, at the expense of the Borrower, shall execute and cause to be executed
any and all further instruments as shall be reasonably required by the Trustee
or the Bank for such protection and perfection of the interests of the Trustee,
the registered owners and the Bank, and the Borrower shall file and refile or
cause to be filed and refiled such instruments which shall be necessary to
preserve and perfect the lien of this Indenture upon the Bonds until the
principal of, premium, if any, and interest on the Bonds issued hereunder shall
have been paid or provision for their payment shall be made as herein provided.

 

SECTION 709. Remarketing Agent. At the request of the Borrower, J.P. Morgan
Securities Inc., is hereby appointed as the initial Remarketing Agent. The
Borrower, with the consent of the Bank, which consent shall not be unreasonably
withheld, shall appoint any successor Remarketing Agent for the Bonds, subject
to the conditions set forth in Section 710 hereof. Any Remarketing Agent shall
designate to the Issuer and the Trustee its principal office for purposes
hereof, which shall be the office of such Remarketing Agent at which all notices
and other communications in connection herewith may be delivered to it. The
Remarketing Agent shall signify its acceptance of the duties and obligations
imposed upon it hereunder by a written instrument of acceptance delivered to the
Issuer, the Borrower, the Trustee and the Bank, under which such Remarketing
Agent will agree particularly to (i) perform its obligations under Section 203
hereof with respect to the determination of the Variable Rate and the Fixed
Rate, (ii) perform its obligations under Section 207 hereof with respect to any
Bond delivered or deemed to have been delivered to the Trustee as tender agent
for purchase pursuant to Section 205 or 206 hereof, and (iii) keep books and
records with respect to all its activities hereunder available for inspection by
the Issuer, the Trustee, the Borrower and the Bank at all reasonable times.

 

SECTION 710. Qualifications of Remarketing Agent; Resignation; Removal. The
Remarketing Agent shall be a bank, trust company or member of the National
Association of Securities Dealers, Inc. organized and doing business under the
laws of the United States of America or any state or the District of Columbia,
shall have a combined capital stock, surplus and undivided profits of at least
$15,000,000 as set forth in its most recent published annual report and shall be
authorized by law to perform all the duties imposed upon the Remarketing Agent
by this Indenture and the Remarketing Agreement. The Remarketing Agent may at
any time resign and be discharged of the duties and obligations created by this
Indenture by giving at least thirty (30) days’ notice to the Issuer, the
Borrower, the Trustee and the Bank. The Remarketing Agent may be removed at any
time, without cause, upon at least thirty (30) days’ written notice to the
Remarketing Agent, at the direction of the Borrower, by an instrument signed by
the Borrower and filed with the Remarketing Agent, the Trustee, the Issuer and
the Bank. In no event shall the resignation or removal of the Remarketing Agent
be effective until a qualified successor has accepted appointment as such. Each
successor Remarketing Agent shall be an institution rated at least “Baa3” or
“P-3” by Moody’s Investors Service, Inc. (or Moody’s Investors Service, Inc.
shall have provided written evidence that the appointment of

 

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such successor Remarketing Agent would not result in a reduction or withdrawal
of the rating currently applicable to the Bonds if the Bonds are then rated by
Moody’s Investors Service, Inc., and at least “BBB-” or “A-3” by Standard &
Poor’s Ratings Group (or Standard & Poor’s Ratings Group shall have provided
written evidence that such successor Remarketing Agent is otherwise acceptable
to Standard & Poor’s Ratings Group) if the Bonds are then rated by Standard &
Poor’s Ratings Group, and authorized by law to perform all the duties imposed
upon it by this Indenture.

 

In the event of the resignation or removal of the Remarketing Agent, the
Remarketing Agent shall pay over, assign and deliver any moneys and Bonds held
by it in such capacity to its successor. Upon the resignation or removal of the
Remarketing Agent, the Borrower, with the written consent of the Bank, which
consent shall not be unreasonably withheld, shall appoint a successor
Remarketing Agent. The Bank may appoint a successor Remarketing Agent if the
Borrower fails to do so within thirty (30) days after the resignation or removal
of the prior Remarketing Agent.

 

SECTION 711. Trustee as Custodian of the Funds, Bond Registrar, Paying Agent and
Tender Agent. The Trustee shall be custodian of the funds, bond registrar and
paying agent for principal of and premium (if any) and interest on the Bonds.
The Trustee shall be tender agent for the Bonds as provided in Article II
hereof. The Trustee hereby agrees that in performing its duties as tender agent
referred to in Article II hereof that it is acting as the agent and
representative of the Borrower and the Bondholders and not as the agent or
representative of the Issuer. In performing its duties under the Pledge
Agreement, its duties as tender agent, custodian of the funds, and its duties as
bond registrar and paying agent for the Bonds, J.P. Morgan Trust Company,
National Association shall be afforded the same rights, discretions, privileges
and immunities as the Trustee, and the tender agent, custodian of the funds,
bond registrar and paying agent may resign and/or be removed in the same manner
as is provided herein for the resignation and/or removal of the Trustee.

 

SECTION 712. Several Capacities. Anything in this Indenture to the contrary
notwithstanding, the same entity may serve hereunder as the Bank, the Trustee
and the Remarketing Agent and in any other combination of such capacities, to
the extent not prohibited by law.

 

SECTION 713. Representations, Warranties and Covenants of the Trustee. All
federal, state and local governmental, public, and regulatory authority
approvals, consents, notices, authorizations, registrations, licenses,
exemptions, and filings that are required to have been obtained or made by the
Trustee with respect to the authorization, execution, delivery, and performance
by, or the enforcement against or by, Trustee of the Indenture have been
obtained and are in full force and effect and all conditions of such approvals,
consents, notices, authorizations, registrations, licenses, exemptions, and
filings have been fully complied with.

 

The Trustee is not (i) required to qualify or obtain any certificate of
authority to do business in the State of Mississippi or (ii) subject to any
filing requirement to pay any fees or

 

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taxes required of foreign entities doing business in the State of Mississippi,
in either case solely as a result of executing, delivering, or performing the
Indenture.

 

The Trustee has a combined capital and surplus of at least $50,000,000 or,
alternatively, a liability policy having the type of coverage and in an amount
acceptable to the and the Borrower. The Trustee has an administrative group of
at least four (4) experienced trust officers, with primary responsibility for
municipal bond issues. The Trustee administers at least twenty-five (25)
municipal bond indentures aggregating at least $25,000,000 under its
administration.

 

ARTICLE VIII

AMENDMENTS, SUPPLEMENTAL INDENTURES

 

SECTION 801. Supplemental Indentures. The Issuer and the Trustee, with the
written consent of the Bank but without the consent of or notice to any
Bondholders, may enter into an indenture or indentures supplemental to this
Indenture and not inconsistent herewith for one (1) or more of the following
purposes:

 

(a) To cure any ambiguity or to correct or supplement any provision contained
herein or in any supplemental indenture which may be defective or inconsistent
with any provision contained herein or in any supplemental indenture, or to make
such other provisions in regard to matters or questions arising under this
Indenture which do not adversely affect the interest of the Bondholders or the
Bank;

 

(b) To grant to or confer upon the Trustee for the benefit of the Bondholders or
the Bank any additional rights, remedies, powers or authority that may lawfully
be granted to or conferred upon the Bondholders or the Trustee;

 

(c) To grant or pledge to the Trustee for the benefit of the Bondholders and the
Bank any additional security other than that granted or pledged under this
Indenture;

 

(d) To modify, amend or supplement this Indenture or any supplemental indenture
in such manner as to permit the qualification thereof under the Trust Indenture
Act of 1939 or any similar federal statute then in effect or to permit the
qualification of the Bonds for sale under the securities laws of any of the
states of the United States;

 

(e) To appoint a successor Trustee, separate trustees or co-trustees in the
manner provided in Article VII hereof;

 

(f) To make any change necessary to secure from a Rating Agency a rating on the
Bonds equal to the rating on the unsecured indebtedness of the Bank other than a
change requiring consent of the holders of all Bonds then outstanding; and

 

(g) To make any other change which, in the judgment of the Trustee, is not
materially adverse to the Trustee or the Bondholders.

 

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When requested by the Issuer or the Borrower, and upon receipt of an opinion of
Bond Counsel to the effect that all conditions precedent under this Indenture
have been met, the Trustee shall join the Issuer in the execution of any such
supplemental indenture. A copy of all such supplemental indentures shall be
promptly furnished to the Bank and the Borrower.

 

SECTION 802. Amendments to Indenture; Consent of Bondholders, the Bank and the
Borrower. Exclusive of supplemental indentures covered by Section 801 hereof and
subject to the terms and provisions contained in this Section 802, and not
otherwise, the holders of not less than a majority in aggregate principal amount
of the Bonds then Outstanding and affected by such indenture or indentures
supplemental hereto, with the written consent of the Bank, shall have the right,
from time to time, anything contained in this Indenture to the contrary
notwithstanding, to consent to and direct the execution by the Trustee of such
other indenture or indentures supplemental hereto as shall be consented to by
the Issuer, which consent shall not be unreasonably withheld, for the purpose of
modifying, altering, amending, adding to or rescinding, in any particular, any
of the terms or provisions contained in this Indenture or in any supplemental
indenture; provided, however, that nothing in this Article VIII shall permit, or
be construed as permitting (a) without the consent of the holders of all Bonds
then outstanding (i) an extension of the maturity of the principal of, or the
mandatory redemption date of, or interest on, any Bond, or (ii) a reduction in
the principal amount of, or the premium or the rate of interest on, any Bond,
(iii) a preference or priority of any Bond or Bonds over any other Bond or
Bonds, (iv) the creation of a lien prior to the lien of this Indenture, (v) a
reduction in the aggregate principal amount of the Bonds required for consent to
any supplemental indenture, or (vi) a modification or change which impairs the
ability of a Bondholder to tender Bonds for purchase pursuant to Section 205
hereof or (b) a modification or change in the duties of the Trustee hereunder
without the consent of the Trustee. The giving of notice to and consent of the
Bondholders to any such proposed supplemental indenture shall be obtained
pursuant to Section 806 hereof.

 

Anything herein to the contrary notwithstanding, a supplemental indenture,
amendment or other document described under this Article VIII which affects any
rights or obligations of the Borrower shall not become effective unless and
until the Borrower consents to the execution of such supplemental indenture,
amendment or other document.

 

Copies of any such supplemental indentures shall be filed with the Borrower and
the Bank.

 

SECTION 803. Amendments to Loan Agreement Not Requiring Consent of Bondholders.
The Issuer may with the written consent of the Bank and the Trustee but without
the consent of or notice to any of the Bondholders, enter into or permit any
amendment of the Loan Agreement acceptable to the Borrower as may be required
(i) to cure any ambiguity or formal defect or omission which shall not adversely
affect the interest of the Bondholders; (ii) to grant or pledge to the Issuer or
Trustee, for the benefit of the Bondholders or the Bank, any additional
security; or (iii) in connection with any other change therein which, in the
judgment of the Trustee, is not materially adverse to the Trustee or the
Bondholders.

 

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Copies of any such amendments to the Loan Agreement shall be filed with the
Trustee and the Bank.

 

SECTION 804. Amendments to Loan Agreement Requiring Consent of Bondholders and
the Bank. Except as provided in Section 803 hereof, the Issuer shall not enter
into, and the Trustee shall not consent to, any other modification or amendment
of the Loan Agreement, nor shall any such modification or amendment become
effective, without the written consent of the Bank and the consent of the
holders of not less than a majority of the aggregate principal amount of the
Bonds at the time Outstanding, such consent to be obtained in accordance with
Section 806 hereof. No such amendment may, without the consent of the holders of
all the Outstanding Bonds, reduce the amounts or delay the times of payment of
Loan Repayments under the Loan Agreement.

 

Copies of any such amendments to the Loan Agreement shall be filed with the
Trustee and the Bank.

 

SECTION 805. Amendments, Changes and Modifications to the Letter of Credit and
the Promissory Note. Except for Letter of Credit substitutions permitted under
Section 308 hereof, subsequent to the initial issuance of Bonds and prior to
payment of the Bonds in full (or provision for the payment thereof having been
made in accordance with the provisions of this Indenture), the Letter of Credit
may not be amended, changed or modified without the prior written consent of the
Trustee; provided, that the Stated Expiration Date of the Letter of Credit may
be extended without the consent of the Trustee. The Trustee may, without the
consent of the owners of the Bonds, consent to any amendment of the Letter of
Credit as may be required (a) for purposes of curing any ambiguity, formal
defect or omission or for purposes of making any other change which, in the
Trustee’s judgment, does not prejudice in any material respect the interests of
the Bondholders and (b) pursuant to Section 308 hereof as a result of a
conversion of the Bonds to a Fixed Rate. Except for such amendments, the Letter
of Credit may be amended only with the consent of the Issuer, the Trustee and
the owners of a majority in aggregate principal amount of Outstanding Bonds,
except that no such amendment may be made which would reduce the amounts
required to be paid thereunder, extend the time for payment of such amounts or
accelerate the Stated Expiration Date of the Letter of Credit without the
written consent of the owners of all Outstanding Bonds.

 

The Trustee may, with the consent of the Borrower and the Bank but without the
consent of the owners of the Bonds, consent to any amendment of the Promissory
Note as may be required for purposes of curing any ambiguity, formal defect or
omission or in connection with any other change therein which, in the Trustee’s
judgment, acting in reliance upon an opinion of Counsel, does not prejudice in
any material respects the interests of the Bondholders. Except for such
amendments, the Promissory Note may be amended only with the consent of the
Borrower, the Issuer, the Trustee, the Bank and the owners of a majority in
aggregate principal amount of Outstanding Bonds, except that no such amendment
may be made which would reduce the amounts required to be paid or the time for
payment of such amounts under the Promissory Note without the written consent of
the owners of all the Outstanding Bonds.

 

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Copies of any such amendments, changes or modifications to the Promissory Note
shall be filed with the Trustee and the Bank.

 

SECTION 806. Notice to and Consent of Bondholders. If consent of the Bondholders
is required under the terms of this Indenture for the amendment of this
Indenture, the Loan Agreement, the Letter of Credit or the Promissory Note for
any other similar purpose, the Trustee shall cause notice of the proposed
execution of the amendment or supplemental indenture to be given by first class
mail to the last known holders of the Outstanding Bonds then shown on the Bond
Register. Such notice shall briefly set forth the nature of the proposed
amendment, supplemental indenture or other action and shall state that copies of
any such amendment, supplemental indenture or other document are on file at the
principal corporate trust office of the Trustee for inspection by all
Bondholders. If, within sixty (60) days or such longer period as shall be
prescribed by the Trustee following the mailing of such notice, the holders of a
majority or all, as the case may be, of the principal amount of the Bonds
Outstanding by instruments filed with the Trustee shall have consented to the
amendment, supplemental indenture or other proposed action, then the Trustee may
execute such amendment, supplemental indenture or other document or take such
proposed action and the consent of the Bondholders shall thereby be conclusively
presumed.

 

SECTION 807. Waivers. The Trustee shall not waive on its own behalf or on behalf
of the Issuer any obligation of the Borrower under the Loan Agreement without
the prior written consent of the Bank and the Trustee shall do so if directed by
the Bank.

 

ARTICLE IX

MISCELLANEOUS

 

SECTION 901. Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this
Indenture or the Bonds is intended or shall be construed to give to any Person
other than the parties hereto, the Bondholders, the Bank and the Borrower any
legal or equitable right, remedy or claim under or in respect to this Indenture
or any covenants, conditions and provisions herein contained; this Indenture and
all of the covenants, conditions and provisions herein being intended to be and
being for the sole and exclusive benefit of the parties hereto, the Bondholders,
the Bank and the Borrower as herein provided.

 

SECTION 902. Rights of the Bank. So long as the Bank has not dishonored, which
dishonor has not been cured, a proper drawing (which drawing strictly complies
with, and conforms to, the terms and conditions of the Letter of Credit) under
the Letter of Credit, the Bank shall be deemed the owner of 100% of the Bonds
secured by the Letter of Credit for the purposes of any action, notice,
direction or consent permitted to be taken by the owners of such Bonds.
Provided, all rights of the Bank under this Indenture to consent to certain
extensions, remedies, waivers, actions and amendments hereunder shall cease and
become null and void (i) for so long as the Bank wrongfully dishonors any draft
presented in strict conformity with the requirements of the Letter of Credit and
until it has honored a subsequent draft, if any, thereunder or (ii) if the
Letter of Credit is no longer in effect and all of the Borrower’s obligations to
the Bank pursuant to the Reimbursement Agreement have been paid.

 

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SECTION 903. Severability. If any provision of this Indenture is held to be in
conflict with any applicable statute or rule of law or is otherwise held to be
unenforceable for any reason whatsoever, such circumstances shall not have the
effect of rendering the provision in question inoperative or unenforceable in
any other part or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.

 

The invalidity of any one or more phrases, sentences, clauses or Sections of
this Indenture contained, shall not affect the remaining portions of this
Indenture, or any part thereof.

 

SECTION 904. Notices. Except as otherwise specifically provided for herein, all
notices required to be given hereunder or under the Loan Agreement shall be in
writing. Except as otherwise provided herein, it shall be sufficient service or
giving of any notice, request, complaint, demand or other paper required by this
Indenture to be given to or filed with the Issuer, the Trustee, the Bank, the
Remarketing Agent, or the Borrower if the same shall be duly deposited in the
United States mail and sent by first-class mail, postage pre-paid, or delivered,
in each case to the parties at the addresses set forth below or as a party may
designate by notice to the other parties:

 

If to the Issuer:

  

Mississippi Business Finance Corporation

735 Riverside Drive

 

Jackson, Mississippi 39202

 

Attention: Executive Director

 

Tel:     601/355-6232

 

Fax:     601/355-3888

 

If to the Borrower:

  

Trex Company, Inc.

160 ExeterDrive

 

Winchester, Virginia 22603-8605

 

Attention: Senior Vice President and Chief Financial Officer

 

Tel:     540/542-6939

 

Fax:     540/542-6889

 

If to the Trustee’s

Administrative Trust Office:

  

J.P. Morgan Trust Company, National Association

1650 Market Street

Suite 4700

Philadelphia, Pennsylvania 19103

 

Attention: Institutional Trust Services

 

Tel:     215/640-3414

 

Fax:     215/640-3430

 

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If to the Trustee’s

Payment Trust Office:

  

J.P. Morgan Trust Company, National Association

c/o JPMorgan Chase Bank, N.A.

2001 Bryan Street

 

Dallas, Texas 75201

 

Tel:     800-275-2048

If to the Bank:

  

JPMorgan Chase Bank, N.A.

277 Park Avenue, 22nd floor

 

New York, New York 10172

 

Attention: Sandra BVW Braun, Vice President

 

Tel:     212-622-3622

 

Fax:     646-534-0692

If to the Remarketing

Agent:

  

J.P. Morgan Securities Inc.

1 Bank One Plaza

Mail Suite IL1-0463

 

Chicago, Illinois 60670

 

Attention: Municipal Bond Dept/Short Term Trading

 

Tel:     312/732-3868

 

Fax:     312/732-1033

 

SECTION 905. Additional Notices to Rating Agencies. The Trustee hereby agrees
that if at any time (a) there is a change in the Trustee, the Remarketing Agent,
or the Bank; (b) there are any modifications, supplements or amendments to the
Indenture, Loan Agreement, Pledge Agreement or Letter of Credit of which the
Trustee has notice; (c) the Letter of Credit expires, is terminated, is extended
or is substituted; (d) the Trustee receives payment in full of all of the Bonds;
or (e) the interest rate on the Bonds is converted to the Fixed Rate, then, in
each case, the Trustee shall promptly give notice of any such event to each
Rating Agency then maintaining a rating on the Bonds, which notice in the case
of an event described in clause (b) above shall include a copy of any such
amendment, modification or supplement.

 

SECTION 906. Payments Due on Non-Business Days. In any case where the date of
maturity of interest on or premium, if any, or principal of the Bonds or the
date fixed for redemption of any Bonds shall not be a Business Day, then payment
of such interest, premium or principal need not be made on such date but shall
be made on the next succeeding Business

 

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Day, with the same force and effect as if made on the date of maturity or the
date fixed for redemption, and, in the case of such payment on the next
succeeding Business Day, no interest shall accrue for the period from and after
such date.

 

SECTION 907. Interest Computation. The interest on the Bonds shall be computed
on the basis of a 365/366-day year, as the case may be, on actual days elapsed
prior to the Conversion Date and a 360-day year comprised of twelve 30-day
months thereafter.

 

SECTION 908. Fees, Charges and Expenses of the Issuer. The Issuer shall be
entitled to payment and reimbursement for reasonable fees for its services
rendered hereunder and all advances, counsel fees and other expenses reasonably
made or incurred by the Issuer in connection with such services and in
connection with entering into this Indenture, including any such fees and
expenses incurred in connection with action taken hereunder.

 

The Issuer shall not be obligated to execute any documents or take any other
action under or pursuant to this Indenture, the Agreement, the Promissory Note
or any other document in connection with the Bonds unless and until provision
for the payment of expenses of the Issuer shall have been made. Provisions for
expenses shall be deemed to have been made upon arrangement reasonably
satisfactory to the Issuer for the provision of expenses being agreed upon by
the Issuer and the party requesting such execution.

 

SECTION 909. Binding Effect. This instrument shall inure to the benefit of and
shall be binding upon the Issuer and the Trustee and their respective successors
and assigns, subject, however, to the limitations contained in this Indenture.

 

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SECTION 910. Captions. The captions or headings in this Indenture are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Indenture.

 

SECTION 911. Governing Law. This Indenture shall be governed by and interpreted
in accordance with the laws of the State, without regard to conflict of law
principles.

 

SECTION 912. Execution in Counterparts. This Indenture may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

 

IN WITNESS WHEREOF, the Issuer has executed this Indenture by one of its members
or authorized officers and the Trustee has caused this Indenture to be executed
in its name by its duly authorized officer, all as of the day and year first
above written.

 

MISSISSIPPI BUSINESS FINANCE CORPORATION, a public corporation duly organized
and existing under the laws of the State of Mississippi By:  

/s/ Bill Barry

Its:

 

Executive Director

 

(SEAL)

 

ATTEST:

By:  

/s/ Vernon Smith

Its:

 

Secretary

 

J.P. MORGAN TRUST COMPANY,

NATIONAL ASSOCIATION, as Trustee

By:  

/s/ Marvin S. Kierstead

Its:

 

Vice President

 

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EXHIBIT A

FORM OF VARIABLE RATE SERIES 2004 BOND

 

R-_

 

Unless this Bond is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange, or payment, and any Bond issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

 

UNITED STATES OF AMERICA

STATE OF MISSISSIPPI

 

$25,000,000

 

MISSISSIPPI BUSINESS FINANCE CORPORATION

VARIABLE RATE DEMAND ENVIRONMENTAL IMPROVEMENT REVENUE BOND

(TREX COMPANY, INC. PROJECT),

SERIES 2004

 

INTEREST RATE

--------------------------------------------------------------------------------

 

MATURITY DATE

--------------------------------------------------------------------------------

 

DATE OF ORIGINAL ISSUE

--------------------------------------------------------------------------------

 

CUSIP

--------------------------------------------------------------------------------

Variable

  December 1, 2029   __________, 2004   ____________

 

Registered Owner:     CEDE & CO.

 

Principal Amount:     Twenty-five Million and 00/100 Dollars ($25,000,000)

 

THIS BOND AND THE OBLIGATION TO PAY INTEREST HEREON AND REDEMPTION PREMIUMS WITH
RESPECT HERETO ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER, SECURED AS
AFORESAID AND PAYABLE SOLELY OUT OF THE REVENUES AND INCOME DERIVED FROM THE
LOAN AGREEMENT AND THE NOTE AND AS OTHERWISE PROVIDED IN THE INDENTURE OR BOND
RESOLUTION AND LOAN AGREEMENT. UNDER NO CIRCUMSTANCES SHALL THIS BOND CONSTITUTE
AN INDEBTEDNESS OR OBLIGATION OF THE STATE OF MISSISSIPPI WITHIN THE PURVIEW OF
ANY CONSTITUTIONAL LIMITATION OR PROVISION. NO OWNER OF THIS BOND SHALL HAVE THE
RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OF MISSISSIPPI TO
PAY ANY

 

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PRINCIPAL INSTALLMENT OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND. THE ISSUER
HAS NO POWER TO LEVY TAXES FOR ANY PURPOSE WHATSOEVER.

 

FOR VALUE RECEIVED, the Mississippi Business Finance Corporation, a public
corporation duly organized and existing under the laws of the State of
Mississippi (the “Issuer”) hereby promises to pay to the Registered Owner
specified above, or registered assigns, upon surrender hereof, at the payment
trust office or other designated office of the Trustee named below, on the
Maturity Date specified above, unless redeemed prior thereto, the Principal
Amount specified above, together with interest thereon at the rates determined
as set forth herein from the date hereof or such later date to which interest
has been paid, but only from the sources and in the manner hereinafter provided
on each Interest Payment Date (as hereinafter defined) until the principal
hereof is paid or duly provided for upon redemption or maturity. Payment of the
principal of, premium, if any, and interest on this Bond shall be made in lawful
money of the United States of America which at the time of payment is legal
tender for payment of public and private debts. Unless other arrangements are
made pursuant to Section 202 of the Indenture (as defined herein), interest is
payable by check or draft of the Trustee mailed, when due, to the registered
holder hereof at the close of business on the Record Date (as hereinafter
defined) immediately preceding any Interest Payment Date at the address of such
holder as it appears on the Bond registration books of the Issuer maintained by
the Trustee (the “Bond Register”).

 

Interest on this Bond shall be computed on the basis of a 365/366-day year, as
the case may be, on actual days elapsed prior to the Conversion Date (as
hereinafter defined) and a 360-day year consisting of twelve (12) months of
thirty (30) days each thereafter.

 

This Bond is one of a series of Variable Rate Demand Environmental Improvement
Revenue Bonds (Trex Company, Inc. Project), Series 2004 (the “Bonds”) of the
Issuer in the aggregate principal amount of $25,000,000 issued under Section
57-10-401 et seq., Mississippi Code of 1972, as amended (the “Act”). The
proceeds of the Bonds are being loaned to Trex Company, Inc., a Delaware
corporation (the “Borrower”), in accordance with the Loan Agreement between the
Issuer and the Borrower dated as of December 1, 2004 (the “Loan Agreement”) for
the purpose of financing all or a portion of the costs of (i) the acquisition,
construction and equipping of solid waste disposal facilities in the City of
Olive Branch, DeSoto County, Mississippi to be used by the Borrower in
connection with the manufacture of non-wood decking, railing and fencing
products (the “Project”), and (ii) to pay a portion of the costs of the issuance
of the Bonds.

 

The Bonds are issued pursuant to and in full compliance with the Act and
pursuant to a resolution of the Issuer adopted on November 17, 2004 (the
“Resolution”) and a Trust Indenture (the “Indenture”) dated as of December 1,
2004, between the Issuer and J.P. Morgan Trust Company, National Association, as
trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Indenture.

 

The Bonds and interest due thereon shall not be a general obligation, a debt or
a liability of the Issuer or an obligation, debt or liability of the State of
Mississippi and do not constitute or give rise to any pecuniary liability or
charge against the general credit of the Issuer or the credit

 

A-2

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or taxing power of the State of Mississippi, but shall be special, limited
obligations of the Issuer payable solely from and secured by the “Security,”
including the moneys available to be drawn by the Trustee under a certain letter
of credit (the “Letter of Credit,” and together with any Alternate Letter of
Credit (as defined in the Indenture) delivered to and accepted by the Trustee in
accordance with the Loan Agreement, the “Letter of Credit”), issued by JPMorgan
Chase Bank, N.A. (together with the issuer of any alternate or replacement
letter of credit delivered to and accepted by the Trustee in accordance with the
Indenture, the “Bank”), all as defined in and subject to limitations set forth
in the Indenture, for the equal and ratable benefit of the holders, from time to
time, of the Bonds (the “Bondholders”), except as otherwise provided in the
Indenture. The Issuer has no taxing power. Reference is hereby made to the
Indenture for a description of the nature and extent of the Security, and to the
Letter of Credit for the terms thereof. The Letter of Credit is being issued
pursuant to the terms of a Reimbursement Agreement (together with any other
agreement pursuant to which a Letter of Credit is issued, the “Reimbursement
Agreement”) dated as of December 1, 2004, between the Bank and the Borrower.

 

The Bonds are issuable as fully registered Bonds in the denomination of $100,000
or any integral multiple of $5,000 in excess thereof (the “Authorized
Denominations”). This Bond, upon surrender hereof at the payment trust office of
the Trustee with a written instrument of transfer satisfactory to the Trustee
executed by the registered holder hereof or his attorney duly authorized in
writing, may, at the option of the registered holder hereof, be exchanged for an
equal aggregate principal amount of Bonds of any other Authorized Denomination.
This Bond is transferable as provided in the Indenture, subject to certain
limitations therein contained, only upon the Bond Register and only upon
surrender of this Bond for transfer to the Trustee duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the registered holder hereof or his attorney duly
authorized in writing. Thereupon, one (1) or more new Bonds of Authorized
Denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.

 

Any service charge made by the Trustee for any such registration, transfer or
exchange hereinbefore referred to shall be paid by the Borrower. The Trustee or
the Issuer may require payment by the Bondholder of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Neither
the Issuer nor the Trustee shall make any such exchange or registration of
transfer of any Bond after notice calling such Bond for redemption or partial
redemption has been given and prior to such redemption unless the holder
delivers to the Trustee a written statement acknowledging that such Bond has
been called for redemption and the date of such redemption.

 

The Issuer, the Borrower, the Trustee and any other agent of the Issuer may
treat the person in whose name this Bond is registered on the Bond Register as
the absolute owner hereof for all purposes, except that payment of or on account
of either principal, premium, if any, or interest shall be made only to or upon
the order of the holder of record as of the Record Date or its duly authorized
attorney, but such registration may be changed as provided in the Indenture.
Neither the Issuer, the Borrower, the Trustee nor any other such agent shall be
affected by notice to the contrary.

 

A-3

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Interest Rates on the Bonds

 

(a) Interest on the Bonds will be payable at the Variable Rate (as hereinafter
defined) from the Date of Original Issue until the earlier of the date on which
the interest on the Bonds is converted to the Fixed Rate (the “Conversion Date”)
or the date of payment in full of the Bonds (the “Variable Rate Period”). During
the Variable Rate Period, the Variable Rate shall be determined by J.P. Morgan
Securities Inc., as Remarketing Agent under the Indenture (together with any
successor Remarketing Agent under the Indenture, the “Remarketing Agent”), by
4:30 p.m. New York City time on each Wednesday (or the immediately preceding
Business Day if such Wednesday is not a Business Day) and shall be the minimum
rate necessary (as determined by the Remarketing Agent based on the examination
of tax-exempt obligations comparable to the Tax-Exempt Bonds known to the
Remarketing Agent to have been priced or traded under then-prevailing market
conditions) for the Remarketing Agent to sell the Bonds on the effective date of
such Variable Rate at their principal amount (without regard to accrued
interest). The first Variable Rate shall apply to the period beginning on the
Issue Date and ending on the next Wednesday. Thereafter, each Variable Rate
shall apply to the period beginning on the Thursday of the week in which such
Variable Rate is set and ending on the following Wednesday, or if earlier,
ending on the Conversion Date. Notwithstanding the foregoing, the Variable Rate
shall not exceed the lesser of ten percent (10%) per annum or the maximum rate
permitted by applicable law. If no Remarketing Agent shall be serving under the
Indenture, or if for any reason the Remarketing Agent has not determined the
Variable Rate on a Wednesday (or the immediately preceding Business Day if such
Wednesday is not a Business Day), the Variable Rate for the Tax-Exempt Bonds
shall be equal to the Municipal Swap Index; provided that if such index is no
longer provided by Municipal Market Data, Inc. or its successor, the rate shall
be equal to the J.J. Kenny Index or if such index is not available, such other
index (or percentage of an index) deemed appropriate for tax-exempt securities
of the nature of the Tax-Exempt Bonds as the Remarketing Agent may have
previously selected, or, if no rate or index is provided, the new rate shall be
the same as the rate for the preceding week. The Trustee shall promptly notify
the Bondholders by first class mail of any change in the interest rate
determination method.

 

(b) The Bonds shall bear interest at the Fixed Rate (as hereinafter defined)
from and including the Conversion Date until the payment in full of the Bonds
(the “Fixed Rate Period”). The Fixed Rate for the Bonds shall be determined by
the Remarketing Agent on a date which is not more than twenty (20) Business Days
nor less than five (5) Business Days prior to the Conversion Date (the “Fixed
Rate Determination Date”) and shall be the rate determined by the Remarketing
Agent on the Fixed Rate Determination Date to be the rate which, if borne by the
Bonds would, in the judgment of the Remarketing Agent having due regard to
prevailing market conditions for tax-exempt revenue bonds or other tax-exempt
securities comparable to the Tax-Exempt Bonds, be the interest rate necessary,
but would not exceed the interest rate necessary, to enable the Remarketing
Agent to remarket the Bonds or portion thereof tendered (or deemed to have been
tendered) for purchase at a price of par (exclusive of accrued interest, if any)
on the Fixed Rate Determination Date; provided, however, that the Fixed Rate
shall not exceed the maximum rate permitted by applicable law. If for any reason
the Remarketing Agent fails to determine the Fixed Rate by the close of business
on the fifth (5th) Business Day preceding the

 

A-4

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Proposed Conversion Date, the Bonds shall continue to bear interest at the
Variable Rate determined in accordance with the Indenture.

 

(c) The determination of the Variable Rate or the Fixed Rate by the Remarketing
Agent shall be conclusive and binding upon the Issuer, the Borrower, the
Trustee, the Remarketing Agent and the Bondholders.

 

(d) In determining the interest rate that the Bonds shall bear as provided
herein, neither the Remarketing Agent nor the Trustee shall have any liability
to the Issuer, the Borrower, the Trustee or any Bondholder except for its gross
negligence or willful misconduct.

 

As used herein, “Business Day” means any day other than (i) a Saturday, (ii) a
Sunday, (iii) a day on which banking institutions in the city in which the
administrative trust office or the payment trust office of the Trustee (or its
bond registrar, paying agent or tender agent offices) is located or the
principal office of the Remarketing Agent is located or the office of the Bank
at which action is to be taken to realize moneys under the Letter of Credit are
required or authorized by law or executive order to be closed, or (iv) a day on
which the New York Stock Exchange is closed.

 

As used herein, “Interest Payment Date” means, (i) during the Variable Rate
Period, the first Business Day of each month, commencing                     ,
(ii) the Conversion Date and (iii) following the Conversion Date, each June 1
and December 1.

 

As used herein, “Record Date” means with respect to each Interest Payment Date
(i) on and prior to the Conversion Date, the Trustee’s close of business on the
Business Day next preceding such Interest Payment Date, and (ii) after the
Conversion Date, the Trustee’s close of business on the fifteenth day of the
calendar month next preceding such Interest Payment Date, regardless whether
such day is a Business Day.

 

Conversion of Interest Rate on the Bonds

 

(a) During the Variable Rate Period, the interest rate on the Bonds, at the
option of the Borrower, shall be converted from the Variable Rate to the Fixed
Rate, upon delivery by the Borrower to the Trustee, the Remarketing Agent, the
Bank and the Issuer:

 

(1) On any Business Day during the Variable Rate Period, of a notice (the
“Conversion Notice”) stating (i) that the Borrower has elected to convert the
interest rate on the Bonds to the Fixed Rate and specifying the Proposed
Conversion Date, which date shall be a Business Day at least forty-five (45)
days after the date on which the Trustee receives the Conversion Notice, (ii)
that the Borrower has obtained the written consent of the Bank to the giving of
such Conversion Notice (and attaching such written consent) and (iii) whether
the Bonds will be secured by a Letter of Credit during the Fixed Rate Period,
and

 

(2) By 10:00 a.m. New York City time on the Proposed Conversion Date, of (i) a
Favorable Opinion of Bond Counsel as to the conversion of the interest rate on
the

 

A-5

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Bonds; (ii) if the Borrower elects to secure the Bonds with a Letter of Credit
during the Fixed Rate Period, an amendment to the Letter of Credit then in
effect or an Alternate Letter of Credit, in either case to be effective on the
Proposed Conversion Date and meeting the requirements of the Indenture; and
(iii) a written undertaking by the Borrower, satisfactory in form and substance
to the Remarketing Agent and the Issuer, whereby the Borrower agrees to comply
with the continuing disclosure requirements of subsection (b)(5) of Rule 15c2-12
promulgated by the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended, as then applicable; provided, however, that
the Borrower shall not be required to make such a written undertaking if the
Remarketing Agent provides the Issuer, the Trustee and the Borrower with an
opinion of counsel that an exemption from compliance with Rule 15c2-12 is
available.

 

(b) If (i) the Trustee receives written notification from the Borrower by the
close of business on the Fixed Rate Determination Date of the Borrower’s
decision not to elect the conversion of the interest rate on the Bonds to the
Fixed Rate on the Proposed Conversion Date, or (ii) the Borrower fails to
satisfy the conditions described in paragraph (a)(2) above, or (iii) the
Remarketing Agent fails to determine the Fixed Rate by the close of business on
the fifth (5th) Business Day preceding the Proposed Conversion Date, the
interest rate on the Bonds shall not be converted to the Fixed Rate on the
Proposed Conversion Date. In such event, the Bonds shall bear interest for the
remaining portion of the current interest rate period at the Variable Rate then
in effect, or for an interest rate period of the Variable Rate in effect for the
immediately preceding interest rate period, and will continue to remain
outstanding in accordance with the terms of this Indenture as if no such
election had been made by the Borrower to convert the interest rate borne by the
Bonds to the Fixed Rate; provided, however, that the Bonds will continue to be
subject to mandatory tender on the Proposed Conversion Date pursuant to Section
206 of the Indenture.

 

(c) No conversion of the interest rate on the Bonds shall occur as provided
herein if at the time of such conversion an Event of Default shall have occurred
under the Indenture and be continuing with respect to the Bonds.

 

(d) The Bonds shall not be subject to optional or mandatory tender for purchase
as provided herein after the Conversion Date.

 

“Bond Counsel” means a firm of nationally recognized attorneys at law acceptable
to the Issuer experienced in legal work relating to the issuance of bonds the
interest on which is excluded from gross income for federal income tax purposes
under Section 103(a) of the Internal Revenue Code of 1986, as amended.

 

Optional Tender of Bonds for Purchase

 

The owner hereof shall have the right to tender this Bond or a portion hereof
(in Authorized Denominations) to the Trustee as tender agent for purchase as a
whole or in part (in any Authorized Denomination) (provided the Bonds which will
continue to be held by such Beneficial Owner shall be in Authorized
Denominations) on any Business Day during the

 

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Variable Rate Period, but not thereafter, at a purchase price equal to one
hundred percent (100%) of the principal amount hereof tendered plus accrued
interest to the specified purchase date, in accordance with the Indenture. In
order to exercise such option with respect to this Bond or any portion hereof,
the owner hereof must give to the Trustee as tender agent at its designated
corporate trust office by the opening of business at such office on a Business
Day which is at least seven (7) days immediately preceding the proposed purchase
date (i) telephonic notice of tender (which telephonic notice must be confirmed
by written notice, which may be by facsimile transmission, of tender received by
the Trustee as tender agent on a Business Day not more than two (2) Business
Days after such notice) or (ii) written notice, which may be by facsimile
transmission, of tender to the Trustee as tender agent (which written notice of
tender shall be in the form attached hereto or shall be in such other form
acceptable to the Trustee). If the Bonds are in a book-entry only system, such
notice of tender shall be given, or caused to be given, by any Beneficial Owner
of Bonds (through its Participant in the Depository, each as defined in the
Indenture) to the Trustee and delivery of such Bonds shall be effected by
causing such Participant to transfer its interest in the Bonds equal to such
Beneficial Owner’s interest on the records of the Depository to the participant
account of the Remarketing Agent with the Depository. Upon the delivery of such
written notice of tender, such election to tender shall be irrevocable and
binding upon the owner (or Beneficial Owner) hereof. At or before 10:00 a.m.,
New York City time, on the specified purchase date, the Registered Owner or
Beneficial Owner of each Bond as to which any such notice of tender shall have
been given shall deliver his Bond and an instrument of assignment or transfer
duly executed in blank (which instrument of assignment or transfer shall be in
the form provided on the Bonds or in such other form acceptable to the Trustee)
to the Trustee, as tender agent, at its designated corporate trust office and,
on the specified purchase date, the Trustee as tender agent shall purchase such
Bond only out of funds made available to it for such purpose, or cause such Bond
to be purchased, at a purchase price equal to the principal amount thereof plus
accrued interest, if any. If the Bonds are in a book-entry only system, the
requirement for physical delivery of the Bonds in connection with a demand for
purchase hereunder shall be deemed satisfied when the ownership rights in the
Bonds are transferred by Participants on the records of the Depository to the
participant account of the Remarketing Agent. The owners of the Bonds, by their
acceptance of the Bonds, covenant and agree to tender their Bonds in the manner
and at the times aforesaid. If any Bond is not so tendered after notice of
tender from the owner thereof (an “Unsurrendered Bond”), and there has been
irrevocably deposited in the Bond Purchase Fund referred to in the Indenture
Eligible Funds in an amount sufficient to pay the purchase price of such Bond
and all other Bonds so tendered or deemed tendered for purchase on such
specified purchase date, such Bond shall be deemed to have been tendered by the
owner thereof and purchased from such owner on the specified purchase date, and
the owner thereof shall not be entitled to receive interest on such Bond on and
after the specified purchase date. Upon surrender of any Unsurrendered Bond to
the Trustee, the Trustee shall pay to the owner of such Unsurrendered Bond only
an amount equal to the purchase price of such Unsurrendered Bond due on such
purchase date. The Trustee shall, in its sole discretion, determine whether,
with respect to any Bond, the owner thereof shall have properly exercised the
option to have his Bond purchased as a whole or in part.

 

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Mandatory Tender of Bonds for Purchase

 

During the Variable Rate Period, the Registered Owner hereof shall be required
to tender this Bond to the Trustee as tender agent for purchase on each date
described below (each of the dates described below being a “Mandatory Tender
Date”):

 

(1) On each proposed Conversion Date;

 

(2) On the date upon which an Alternate Letter of Credit is to be substituted
for the Letter of Credit then in effect;

 

(3) On the Interest Payment Date next preceding the Stated Expiration Date of
the Letter of Credit then in effect, if the Trustee has not received at least
forty-five (45) days (or such shorter period as shall be acceptable to the
Trustee, but not less than thirty (30) days) prior to the Interest Payment Date
next preceding the Stated Expiration Date of the current Letter of Credit either
an extension of the then existing Letter of Credit or an Alternate Letter of
Credit meeting the requirements set forth therefor in the Indenture; and

 

(4) On each optional redemption date for which the Borrower with the written
consent of the Bank has elected to purchase Bonds in lieu of an optional
redemption pursuant to the Indenture.

 

At least twenty (20) days, but not more than forty-five (45) days, prior to each
such Mandatory Tender Date, the Trustee shall give notice of such mandatory
tender by first class mail to the Registered Owner hereof at his address
appearing on the Bond Register. Such notice of mandatory tender shall (i)
specify the Mandatory Tender Date and the reason for the mandatory purchase on
such date, (ii) if such Mandatory Tender Date is a Proposed Conversion Date,
state that such conversion to the Fixed Rate will not occur if the conditions
described in paragraph (a)(2) above under the heading “Conversion of Interest
Rate on the Bonds” are not satisfied but that such mandatory tender will still
occur on the Proposed Conversion Date, and (iii) state that this Bond must be
tendered by the Registered Owner hereof for purchase at or before 10:00 a.m.,
New York City time, on the Mandatory Tender Date to the Trustee as tender agent
at its designated corporate trust office, together with an instrument of
assignment or transfer duly executed in blank (which instrument of assignment or
transfer shall be in the form provided on this Bond or such other form
acceptable to the Trustee as tender agent), and that this Bond shall thereupon
be purchased on the Mandatory Tender Date at a purchase price equal to the
principal amount hereof plus accrued interest, if any, and if this Bond is not
so tendered (an “Unsurrendered Bond”), but there has been irrevocably deposited
in the Bond Purchase Fund referred to in the Indenture Eligible Funds sufficient
to pay the purchase price of this Bond and all other Bonds so tendered or deemed
tendered for purchase on the Mandatory Tender Date, this Bond shall be deemed to
have been tendered for purchase by the Registered Owner hereof and purchased
from such owner on the Mandatory Tender Date.

 

This Bond shall be tendered for purchase by the owner hereof to the Trustee as
tender agent at or before 10:00 a.m., New York City time, on each Mandatory
Tender Date, by

 

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delivering this Bond to the Trustee as tender agent at its designated payment
trust office, together with an instrument of assignment or transfer duly
executed in blank (which instrument of assignment or transfer shall be in the
form provided on this Bond or such other form acceptable to the Trustee), and on
such Mandatory Tender Date the Trustee as tender agent shall purchase this Bond,
or cause this Bond to be purchased, at a purchase price equal to the principal
amount hereof, plus accrued interest, if any, and the Registered Owner of this
Bond, by his acceptance hereof, hereby covenants and agrees to tender this Bond
in the manner and at the time as aforesaid. If the Bonds are in a book-entry
only system, a Beneficial Owner shall effect delivery of this Bond by causing
its Participant in the Depository to transfer such Participant’s interest in the
Bonds equal to the Beneficial Owner’s interest on the records of the Depository
to the participant account of the Trustee with the Depository and the
requirement for physical delivery of this Bond shall be deemed satisfied when
the ownership rights in this Bond are transferred by such Participant on the
records of the Depository. If this Bond is not tendered at or before 10:00 a.m.,
New York City time, on a Mandatory Tender Date, and there has been irrevocably
deposited in the Bond Purchase Fund referred to in the Indenture an amount
sufficient to pay the purchase price hereof and all other Bonds tendered or
deemed tendered for purchase on such Mandatory Tender Date, this Bond shall be
deemed to be tendered by the Registered Owner hereof and purchased from such
owner on such Mandatory Tender Date, and the Registered Owner hereof shall not
be entitled to receive interest on this Unsurrendered Bond on and after such
Mandatory Tender Date. Upon surrender after a Mandatory Tender Date of an
Unsurrendered Bond to the Trustee, the Trustee shall pay to the Registered Owner
of such Unsurrendered Bond only an amount equal to the purchase price of such
Unsurrendered Bond due on such Mandatory Tender Date.

 

REDEMPTION OF BONDS

 

The Bonds are not subject to redemption prior to maturity except as hereinafter
provided.

 

Optional Redemption

 

On or prior to the Conversion Date, the Bonds are subject to redemption at any
time prior to maturity, at the option of the Borrower, as a whole or in part in
Authorized Denominations (and the Bonds which continue to be held by such
Beneficial Owner will be in Authorized Denominations) at a redemption price of
one hundred percent (100%) of the principal amount thereof plus accrued interest
to the date fixed for redemption, upon receipt by the Trustee not less than
forty-five (45) days prior to such redemption date of a written direction from
the Borrower stating that it intends to exercise its option to prepay the Loan
Repayments due under the Loan Agreement and thereby effect redemption of the
Bonds.

 

After the Conversion Date, the Bonds are subject to redemption prior to
maturity, at the option of the Borrower, on or after the dates specified in the
Indenture, in whole at any time or in part in Authorized Denominations on any
Interest Payment Date, at the redemption prices determined as provided in the
Indenture upon receipt by the Trustee not less than forty-five (45) days prior
to such redemption date of a written direction from the Borrower stating that it
intends

 

A-9

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to exercise its option to prepay the Loan Repayments due under the Loan
Agreement and thereby effect redemption of the Bonds.

 

During the Variable Rate Period, the Borrower shall have the option to cause the
Bonds to be subject to mandatory tender and purchase in lieu of an optional
redemption of Bonds as described above. Such option may be exercised by delivery
by the Borrower to the Trustee and the Remarketing Agent on or prior to the
Business Day preceding the optional redemption date of a written notice
specifying that the Bonds shall not be redeemed, but instead shall be subject to
mandatory tender and purchase. Upon delivery of such notice, the Bonds shall not
be redeemed but will instead be subject to mandatory tender and purchase
pursuant to the Indenture at a tender price equal to the price at which the
Bonds would have been redeemed on the date which would have been the optional
redemption date.

 

Mandatory Redemption Upon Determination of Taxability

 

The Bonds shall be subject to mandatory redemption prior to maturity, as a whole
and not in part, on the earliest practicable date for which notice can be given
following the occurrence of a Determination of Taxability, at a redemption price
equal to one hundred percent (100%) of the principal amount thereof plus accrued
interest to the redemption date.

 

Mandatory Redemption from Insurance and Condemnation Proceeds

 

The Bonds are subject to mandatory redemption in whole at any time or in part
(and if in part in Authorized Denominations; provided that no Bond may be
redeemed in part if the principal amount to be outstanding following such
partial redemption is not an Authorized Denomination) on any Interest Payment
Date, at a redemption price equal to one hundred percent (100%) of the aggregate
principal amount of the Bonds to be redeemed plus accrued interest to the
redemption date, in an amount equal to any insurance or condemnation proceeds
deposited with the Trustee for the purpose of redemption pursuant to Article VII
of the Loan Agreement. Such redemption shall be effected by a drawing under the
Letter of Credit and the Trustee shall use such insurance or condemnation
proceeds to reimburse the Bank for such drawing pursuant to the Reimbursement
Agreement.

 

Partial Redemption

 

If less than all the outstanding Bonds are called for redemption, the Trustee
shall select, or arrange for the selection of, the Bonds to be redeemed by lot,
in such manner as it shall in its discretion determine; provided that any such
Bonds selected for redemption shall be in Authorized Denominations and the Bonds
which will continue to be held by such Beneficial Owner will be in Authorized
Denominations. Notwithstanding the foregoing, Bonds pledged to the Bank
(“Pledged Bonds”) pursuant to the Pledge Agreement (as defined in the Indenture)
and Bonds held for the account of the Borrower or any affiliate of the Borrower
(“Borrower Bonds”) shall be first selected by the Trustee for redemption before
any other Bonds are selected for redemption. If less than the principal amount
of a Bond is called for redemption, the Issuer shall execute and the Trustee
shall authenticate and deliver, upon surrender of such Bond, without

 

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charge to the owner thereof, in exchange for the unredeemed principal amount of
such Bond, at the option of such owner, Bonds in any of the Authorized
Denominations.

 

Notice of Redemption

 

Notice of redemption shall be mailed by the Trustee by first class mail at least
thirty (30) days but not more than forty-five (45) days before any redemption
date to the Registered Owner of each Bond to be redeemed in whole or in part at
its last address appearing on the Bond Register; provided, however, that failure
to give such notice by mailing, or any defect therein, shall not affect the
validity of any proceedings for the redemption of any Bond or a portion thereof
with respect to which no such failure or defect has occurred; and provided,
further, that so long as the Letter of Credit is in effect, the Trustee shall
not give notice of any optional redemption unless the Bank has consented in
writing to such redemption. In addition, the Trustee may give such other notice
or notices as may be recommended in releases, letters, pronouncements or other
writings of the Securities and Exchange Commission and the Municipal Securities
Rulemaking Board. Any notice mailed as provided above shall be conclusively
presumed to have been duly given, whether or not the Bondholder receives the
notice. All Bonds so called for redemption will cease to bear interest on the
specified date set for redemption, provided Eligible Funds for their redemption
have been duly deposited with the Trustee pursuant to the Indenture and,
thereafter, the holders of such Bonds called for redemption shall have no rights
in respect thereof except to receive payment of the redemption price from the
Trustee and a new Bond for any portion not redeemed in any Authorized
Denomination.

 

Certain Other Provisions

 

If provision is made for the payment of principal of, premium, if any, and
interest on this Bond in accordance with the Indenture, this Bond shall no
longer be deemed outstanding under the Indenture, shall cease to be entitled to
the benefits of the Indenture, and shall thereafter be payable solely from the
funds provided for payment.

 

Under certain circumstances as described in the Indenture, the principal of all
the Bonds may be declared due and payable in the manner and with the effect
provided in the Indenture. The Indenture directs the Trustee to declare an
acceleration upon the occurrence of an event of default under the Reimbursement
Agreement if directed to do so by the Bank. Except in certain circumstances
related to payment of principal and Purchase Price of and premium, if any, and
interest on the Bonds or the wrongful dishonor by the Bank of a draft or other
request for payment under the Letter of Credit, the Trustee has the right to
accelerate the outstanding balance of the Loan and the principal of the Bonds in
certain events only with the Bank’s consent, if the Letter of Credit is in
effect, all as provided in more detail in the Indenture. Immediately following
any such declaration of acceleration, the Trustee shall mail notice of such
declaration by first class mail to each holder of Bonds at his last address
appearing on the Bond Register. Any defect in or failure to give such notice of
such declaration shall not affect the validity of such declaration.

 

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations (if any) of
the Issuer, the Borrower, the

 

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Bank and the holders of the Bonds at any time with the consent of the Bank and
the holders of a majority in aggregate principal amount of the Bonds at the time
outstanding which are affected by such modifications. The Indenture also permits
amendments and supplements to the Indenture and the Loan Agreement, without
requiring the consent of any Bondholders, but with the consent of the Bank, in
certain specifically described instances. The Indenture also contains provisions
permitting, subject to the Bank’s consent, holders of a majority in aggregate
principal amount of the Bonds at the time outstanding, on behalf of all the
holders of all Bonds, to waive compliance by the Issuer and the Borrower with
certain provisions of the Indenture and their consequences. Any such consent or
waiver by the holder of this Bond shall be conclusive and binding upon such
holder and on all future holders of this Bond and of any Bond issued in lieu
hereof whether or not notation of such consent or waiver is made upon this Bond.
Supplements and amendments to the Indenture or the Loan Agreement may be made
only to the extent and in circumstances permitted by the Indenture.

 

The holder of this Bond shall have no right to enforce the provisions of the
Indenture or the Loan Agreement, or to institute action to enforce the covenants
therein, or to take any action with respect to a default under the Indenture or
the Loan Agreement, or to institute, appear in or defend any suit or other
proceedings with respect thereto, except as provided under certain limited
circumstances described in the Indenture; provided, however, that nothing
contained in the Indenture shall affect or impair any right of enforcement
conferred on the holder hereof by the Act to enforce (i) the payment of the
principal of and premium (if any) and interest on this Bond at and after the
maturity thereof, or (ii) the obligation of the Issuer to pay the principal of
and premium (if any) and interest on this Bond to the holder hereof at the time,
place, from the source and in the manner as provided in the Indenture.

 

The holder of this Bond, by acceptance hereof, consents to all of the terms and
provisions of the Indenture and the Loan Agreement.

 

IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and
things required to exist, happen and be performed precedent to the execution and
delivery of the Indenture and the issuance of this Bond and the issue of which
it is a part, do exist, have happened and have been timely performed in regular
form and manner as required by law, and the issuance of this Bond, together with
all other obligations of the Issuer, does not exceed or violate any
constitutional or statutory limitation of the Issuer.

 

Unless the certificate of authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signers, this Bond shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.

 

A-12

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IN WITNESS WHEREOF, the Mississippi Business Finance Corporation has executed
this Bond by the manual or facsimile signature of one of its members or one of
its authorized officers and has caused its seal (or a facsimile thereof) to be
impressed or imprinted hereon, all as of the Date of Original Issue set forth
above.

 

MISSISSIPPI BUSINESS FINANCE CORPORATION, a public corporation duly organized
and existing under the laws of the State of Mississippi By:    

Its:

 

Executive Director

 

(SEAL)

ATTEST:

By:    

Its:

 

Secretary

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This Bond is one of the Bonds described in the within-mentioned Indenture.

 

J.P. MORGAN TRUST COMPANY,

NATIONAL ASSOCIATION, as Trustee

By:    

Its:

   

 

Authentication Date:             

 

A-13

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[FORM OF ASSIGNMENT]

 

For value received, the undersigned hereby sells, assigns and transfers unto
            

 

     

(Name and Address of Assignee)

 

(Taxpayer I.D. No.:                                         
                        )

the within Bond and does hereby irrevocably constitute and appoint
                                                             
                                        
                                        
                                        
                                        
                                                      ,

attorney to transfer such Bond on the books kept for registration and transfer
of the within Bond, with full power of substitution in the premises.

 

Dated:                                        

                 [Signature]

 

NOTICE: The signature(s) to this Assignment must correspond with the name as it
appears upon the face of the Bond in every particular, without alteration or
enlargement or any change whatever.

 

Signature Guaranteed:                                         
                    

 

NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution as
defined by SEC Rule 17Ad-15 (17 CFR 240.17Ad-15) participating in a Securities
Transfer Association recognized signature guarantee program.

 

A-14

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VALIDATION CERTIFICATE

 

The issuance of the Bonds of which this Bond is one has been validated and
confirmed by decree of the Chancery Court of the First Judicial District of
Hinds County, Mississippi, rendered on this              day of             .

 

  Secretary, Mississippi Business Finance Corporation

 

A-15

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[FORM OF BONDHOLDER TENDER]

BONDHOLDER TENDER NOTICE

 

The undersigned hereby elects to have the Variable Rate Demand Environmental
Improvement Revenue Bonds (Trex Company, Inc. Project), Series 2004 numbered
             (the “Bond”), of the Mississippi Business Finance Corporation, a
public corporation duly organized and existing under the laws of the State of
Mississippi (the “Issuer”) (or any portion thereof in any Authorized
Denomination) purchased in accordance with the provisions of the Bond and the
Trust Indenture (the “Indenture”) dated as of December 1, 2004, by and between
the Issuer and J.P. Morgan Trust Company, National Association, as Trustee (the
“Trustee”), on              (the “Purchase Date”), which Purchase Date shall be
a Business Day at least seven (7) days immediately following the Business Day of
the submission of this Bondholder Tender Notice, which may be by facsimile
transmission, to the Trustee, as tender agent (unless the undersigned has given
telephonic notice of its election to tender the Bond by 9:00 a.m., prevailing
time, at the Trustee’s designated payment trust office, confirmed by submission
of this Bondholder Tender Notice, which may be by facsimile transmission, not
more than two (2) Business Days after such telephonic notice, in which event
such Purchase Date shall be a Business Day at least seven (7) days immediately
following the date of such telephonic notice), at the purchase price of one
hundred percent (100%) of the principal amount thereof being purchased plus
accrued interest, if any, to the Purchase Date (the “Purchase Price”).

 

Pursuant to the terms of the Indenture, the Purchase Price of the Bond (or
portion thereof) to be purchased shall be paid to the undersigned Registered
Owner of the Bond in immediately available funds, which may be remitted by wire
transfer to any requesting Owner, as provided in the Indenture, at or before
2:00 p.m., New York City time, on the Purchase Date upon presentation of the
Bond to the Trustee, as tender agent, together with an instrument of assignment
or transfer duly executed in blank (which instrument of assignment or transfer
shall be in the form provided on the Bond or in such other form acceptable to
the Trustee), at or before 10:00 a.m., New York City time, on the Purchase Date,
at or to

 

J.P. Morgan Trust Company, National Association

c/o J.P. Morgan Bank, N.A.

2001 Bryan Street

Dallas, Texas 75201

Attn: Corporate Trust Department

Telephone: 800-275-2048

 

The undersigned hereby acknowledges and agrees to such terms.

 

This Bondholder Tender Notice shall not be accepted by the Trustee unless it is
properly completed and received by the Trustee at its designated corporate trust
office.

 

If the Bond is submitted for purchase in part, the undersigned hereby directs
the Trustee to exchange the Bond for (i) a Bond representing the principal
amount of the Bond to be purchased, and (ii) a Bond (or Bonds of Authorized
Denominations if the owner specifies the Authorized Denominations) representing
the principal amount of the Bond not to be purchased.

 

A-16

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The Bond or Bonds not to be purchased shall be registered in the same name(s) as
the Bond tendered for purchase. Unless the undersigned Registered Owner of the
Bond delivers instructions to the Trustee, with this Bondholder Tender Notice,
specifying that said owner wishes to have the Trustee deliver more than one Bond
representing the principal amount of the Bond not to be purchased, and
specifying the Authorized Denominations of such replacement Bonds, the Trustee
will deliver only one replacement Bond to such owner in the principal amount of
the Bond not to be purchased.

 

THIS ELECTION IS IRREVOCABLE AND BINDING ON THE UNDERSIGNED AND CANNOT BE
WITHDRAWN.

 

The undersigned hereby authorizes the Trustee to accept on behalf of the
undersigned the Purchase Price of the Bond (or portion thereof) subject to this
Bondholder Tender Notice.

 

Print or Type                            Name(s) of Bondholder(s)               
           

Street

   City         State         Zip                           

(            )

    

Area Code

   Telephone Number

Signature(s)                            Date:                           

 

Note: The signature(s) to this Bondholder Tender Notice must correspond exactly
to the name(s) appearing on the registration books of the Issuer maintained by
the Trustee, as bond registrar, in every particular, without alteration or
enlargement or any change whatsoever.

 

The principal amount of the Bond subject to this notice of tender for purchase
$                    . (Insert total principal amount of Bond or a portion
thereof in the amount of $100,000 or any integral multiple of $5,000 in excess
thereof).

 

IF NO AMOUNT IS INDICATED IN THE SPACE ABOVE, THE ABOVE SIGNED OWNER OF THE BOND
SUBJECT TO THIS BONDHOLDER TENDER NOTICE WILL BE DEEMED TO HAVE TENDERED THE
BOND IN ITS FULL PRINCIPAL AMOUNT FOR PURCHASE.

 

The principal amount of the Bond not subject to this notice of tender for
purchase is $                    . (Must be $100,000 or any integral multiple of
$5,000 in excess thereof).

 

A-17

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EXHIBIT B

FORM OF FIXED RATE SERIES 2004 BOND

 

R-_

 

Unless this Bond is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange, or payment, and any Bond is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

 

UNITED STATES OF AMERICA

STATE OF MISSISSIPPI

 

MISSISSIPPI BUSINESS FINANCE CORPORATION

 

ENVIRONMENTAL IMPROVEMENT REVENUE BOND

(TREX COMPANY, INC. PROJECT),

SERIES 2004

 

INTEREST RATE

--------------------------------------------------------------------------------

 

MATURITY DATE

--------------------------------------------------------------------------------

 

DATE OF ORIGINAL ISSUE

--------------------------------------------------------------------------------

 

CUSIP

--------------------------------------------------------------------------------

    December 1, 20       __________ 2004    

 

Registered Owner:

 

Principal Amount:

 

THIS BOND DOES NOT CONSTITUTE A GENERAL OBLIGATION OF THE ISSUER, THE STATE OR
ANY POLITICAL SUBDIVISION THEREOF OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF
THE ISSUER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. UNDER NO
CIRCUMSTANCES SHALL THIS BOND CONSTITUTE AN INDEBTEDNESS OR OBLIGATION OF THE
STATE OF MISSISSIPPI WITHIN THE PURVIEW OF ANY CONSTITUTIONAL LIMITATION OR
PROVISION. NO OWNER OF THIS BOND SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF
THE TAXING POWER OF THE STATE OF MISSISSIPPI TO PAY ANY PRINCIPAL INSTALLMENT
OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND. THE ISSUER HAS NO POWER TO LEVY
TAXES FOR ANY PURPOSE WHATSOEVER.

 

B-1

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FOR VALUE RECEIVED, the Mississippi Business Finance Corporation a public
corporation duly organized and existing under the laws of the State of
Mississippi (the “Issuer”) hereby promises to pay to the Registered Owner
specified above, or registered assigns, upon surrender hereof, at the payment
trust office of the Trustee (currently located in Dallas, Texas) or other
designated office of the Trustee named below, on the Maturity Date specified
above, unless redeemed prior thereto, the Principal Amount specified above,
together with interest thereon at the interest rate specified above from the
authentication date hereof or such later date to which interest has been paid,
but only from the sources and in the manner hereinafter provided on each June 1
and December 1 (each an “Interest Payment Date”) until the principal hereof is
paid or duly provided for upon redemption or maturity. Payment of the principal
of, premium, if any, and interest on this Bond shall be made in lawful money of
the United States of America which at the time of payment is legal tender for
payment of public and private debts. Unless other arrangements are made pursuant
to Section 202 of the Indenture (as defined herein) (hereinafter defined),
interest is payable by check or draft of the Trustee mailed when due to the
registered holder hereof at the close of business on the fifteenth (15th) day of
the month immediately preceding any Interest Payment Date at the address of such
holder as it appears on the Bond registration books of the Issuer maintained by
the Trustee (the “Bond Register”).

 

Interest on this Bond shall be computed on the basis of a 360-day year
consisting of twelve (12) months of thirty (30) days each.

 

This Bond is one of an authorized series of bonds of the Issuer designated
“Variable Rate Demand Environmental Improvement Revenue Bonds (Trex Company,
Inc. Project), Series 2004” (the “Bonds”), and issued in the aggregate principal
amount of $25,000,000). The proceeds of the Bonds are being loaned to Trex
Company, Inc. a Delaware corporation (the “Borrower”), in accordance with the
Loan Agreement between the Issuer and the Borrower dated as of December 1, 2004
(the “Loan Agreement”) for the purpose of financing all or a portion of the
costs of (i) the acquisition, construction and equipping of solid waste disposal
facilities in the City of Olive Branch, DeSoto County, Mississippi to be used by
the Borrower in connection with the manufacture of non-wood decking, railing and
fencing products (the “Project”), and (ii) to pay a portion of the costs of the
issuance of the Bonds.

 

The Bonds are issued pursuant to and in full compliance with Section 57-10-401
et seq., Mississippi Code of 1972, as amended (the “Act”), and pursuant to a
resolution of the Issuer adopted on November 17, 2004 (the “Resolution”) and a
Trust Indenture (the “Indenture”) dated as of December 1, 2004, between the
Issuer and J.P. Morgan Trust Company, National Association, as Trustee (the
“Trustee”). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Indenture.

 

The Bonds and interest due thereon shall not be a general obligation, a debt or
a liability of the Issuer or an obligation, debt or liability of the State of
Mississippi and do not constitute or give rise to any pecuniary liability or
charge against the credit of the Issuer or the credit or taxing power of the
State of Mississippi, but shall be limited special obligations of the Issuer
payable solely from and secured by the “Security,” including the moneys
available to be drawn by the Trustee under a certain letter of credit (the
“Letter of Credit,” and together with any Alternate

 

B-2

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Letter of Credit (as defined in the Indenture) delivered to and accepted by the
Trustee in accordance with the Loan Agreement, the “Letter of Credit”), issued
by JPMorgan Chase Bank, N.A. (together with the issuer of any Alternate Letter
of Credit delivered to and accepted by the Trustee in accordance with the
Indenture, the “Bank”), all as defined in and subject to limitations set forth
in the Indenture, for the equal and ratable benefit of the holders, from time to
time, of the Bonds (the “Bondholders”), except as otherwise provided in the
Indenture. The Issuer has no taxing power. Reference is hereby made to the
Indenture for a description of the nature and extent of the Security, and to the
Letter of Credit for the terms thereof. The Letter of Credit is being issued
pursuant to the terms of a Reimbursement Agreement dated as of December 1, 2004
(together with any other agreement pursuant to which a Letter of Credit is
issued, the “Reimbursement Agreement”), among the Bank and the Borrower.

 

The Bonds are issuable as fully registered Bonds in the denomination of $100,000
or any integral multiple of $5,000 in excess thereof (the “Authorized
Denominations”). This Bond, upon surrender hereof at the payment trust office of
the Trustee with a written instrument of transfer satisfactory to the Trustee
executed by the registered holder hereof or his attorney duly authorized in
writing, may, at the option of the registered holder hereof, be exchanged for an
equal aggregate principal amount of Bonds of any other Authorized Denomination.
This Bond is transferable as provided in the Indenture, subject to certain
limitations therein contained, only upon the Bond Register and only upon
surrender of this Bond for transfer to the Trustee duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the registered holder hereof or his attorney duly
authorized in writing. Thereupon, one or more new Bonds of Authorized
Denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.

 

Any service charge made by the Trustee for any such registration, transfer or
exchange hereinbefore referred to shall be paid by the Borrower. The Trustee or
the Issuer may require payment by the Bondholder of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Neither
the Issuer nor the Trustee shall make any such exchange or registration of
transfer of any Bond after notice calling such Bond for redemption or partial
redemption has been given and prior to such redemption, unless the holder
delivers to the Trustee a written statement acknowledging that such Bond has
been called for redemption and the date of such redemption.

 

The Issuer, the Borrower, the Trustee and any other agent of the Issuer may
treat the person in whose name this Bond is registered on the Bond Register as
the absolute owner hereof for all purposes, except that payment of or on account
of either principal, premium, if any, or interest shall be made only to or upon
the order of the holder of record as of the Record Date or its duly authorized
attorney, but such registration may be changed as provided in the Indenture.
Neither the Issuer, the Borrower, the Trustee nor any other such agent shall be
affected by notice to the contrary.

 

B-3

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REDEMPTION OF BONDS

 

The Bonds are not subject to redemption prior to maturity except as hereinafter
provided.

 

Optional Redemption

 

The Bonds are subject to redemption prior to maturity, at the option of the
Borrower, on or after the dates specified below, in whole at any time or in part
in Authorized Denominations on any Interest Payment Date for which notice of
redemption can be given pursuant to the Indenture, at the redemption prices
(expressed as percentages of the principal amount so redeemed) set forth in the
following table plus accrued interest to the redemption date, upon receipt by
the Trustee not less than forty-five (45) days prior to such redemption date of
a written direction from the Borrower stating that it intends to exercise its
option to prepay the Loan Prepayments due under the Loan Agreement and thereby
effect redemption of the Bonds as follows:

 

Redemption Dates (Dates Inclusive)

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   Redemption Prices:

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            ,             through             ,            

         %

            ,             through             ,            

         %

            ,             through             ,            

         %

            ,             and thereafter

   100%

 

[Complete schedule in accordance with Section 217(a) of the Indenture.]

 

Mandatory Redemption Upon Determination of Taxability

 

The Bonds shall be subject to mandatory redemption prior to maturity, as a whole
and not in part, on the earliest practicable date for which notice can be given
following the occurrence of a Determination of Taxability, at a redemption price
equal to one hundred percent (100%) of the principal amount thereof plus accrued
interest to the redemption date.

 

Mandatory Redemption Upon Expiration of Letter of Credit During the Fixed Rate
Period

 

If the Bonds are secured by a Letter of Credit during the Fixed Rate Period and
at least forty-five (45) days prior to the Interest Payment Date next preceding
the Stated Expiration Date of the Letter of Credit then in effect the Trustee
has not been provided with an extension of such Letter of Credit or an Alternate
Letter of Credit for the applicable period required by the Indenture, then the
Bonds will be subject to mandatory redemption on the Interest Payment Date next
preceding such stated expiration date at a redemption price equal to the lesser
of (a) one hundred and two percent (102%) of the principal amount thereof plus
accrued interest to the redemption date or (b) the redemption price which would
apply as of the redemption date if the Bonds were optionally redeemed.

 

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Mandatory Redemption from Insurance and Condemnation Proceeds.

 

The Bonds are subject to mandatory redemption in whole at any time or in part
(and if in part in Authorized Denominations; provided that no Bond may be
redeemed in part if the principal amount to be outstanding following such
partial redemption is not an Authorized Denomination) on any Interest Payment
Date, at a redemption price equal to one hundred percent (100%) of the aggregate
principal amount of the Bonds to be redeemed plus accrued interest to the
redemption date, in an amount equal to any insurance or condemnation proceeds
deposited with the Trustee for the purpose of redemption pursuant to Article VII
of the Loan Agreement. During any period in which a Letter of Credit secures the
Bonds, such redemption shall be effected by a drawing under the Letter of Credit
and the Trustee shall use such insurance or condemnation proceeds to reimburse
the Bank for such drawing pursuant to the Reimbursement Agreement.

 

Partial Redemption

 

If less than all the outstanding Bonds are called for redemption, the Trustee
shall select, or arrange for the selection of, the Bonds to be redeemed by lot,
in such manner as it shall in its discretion determine; provided that any such
Bonds selected for redemption shall be in Authorized Denominations.
Notwithstanding the foregoing, Bonds held for the account of the Borrower or any
affiliate of the Borrower (“Borrower Bonds”) shall be first selected by the
Trustee for redemption before any other Bonds are selected for redemption. If
less than the principal amount of a Bond is called for redemption, the Issuer
shall execute and the Trustee shall authenticate and deliver, upon surrender of
such Bond, without charge to the owner thereof, in exchange for the unredeemed
principal amount of such Bond, at the option of such owner, Bonds in any of the
Authorized Denominations.

 

Notice of Redemption

 

Notice of redemption shall be mailed by the Trustee by first class mail at least
thirty (30) days but not more than forty-five (45) days before any redemption
date to the Registered Owner of each Bond to be redeemed in whole or in part at
its last address appearing on the Bond Register; provided, however, that failure
to give such notice by mailing, or any defect therein, shall not affect the
validity of any proceedings for the redemption of any Bond or a portion thereof
with respect to which no such failure or defect has occurred; and provided,
further, that so long as the Letter of Credit is in effect, the Trustee shall
not give notice of any optional redemption unless the Bank has consented in
writing to such redemption. In addition, the Trustee may give such other notice
or notices as may be recommended in releases, letters, pronouncements or other
writings of the Securities and Exchange Commission and the Municipal Securities
Rulemaking Board. Any notice mailed as provided above shall be conclusively
presumed to have been duly given, whether or not the Bondholder receives the
notice. All Bonds so called for redemption will cease to bear interest on the
specified date set for redemption, provided funds for their redemption have been
duly deposited with the Trustee pursuant to the Indenture and, thereafter, the
holders of such Bonds called for redemption shall have no rights in

 

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respect thereof except to receive payment of the redemption price from the
Trustee and a new Bond for any portion not redeemed in any of the Authorized
Denominations.

 

Certain Other Provisions

 

If provision is made for the payment of principal of, premium, if any, and
interest on this Bond in accordance with the Indenture, this Bond shall no
longer be deemed outstanding under the Indenture, shall cease to be entitled to
the benefits of the Indenture, and shall thereafter be payable solely from the
funds provided for payment.

 

Under certain circumstances as described in the Indenture, the principal of all
the Bonds may be declared due and payable in the manner and with the effect
provided in the Indenture. The Indenture directs the Trustee to declare an
acceleration upon the occurrence of an event of default under the Reimbursement
Agreement if directed to do so by the Bank. Except in certain circumstances
related to payment of principal of, premium, if any, and interest on the Bonds
or the wrongful dishonor by the Bank of a draft or other request for payment
under the Letter of Credit, the Trustee has the right to accelerate the
outstanding balance of the Loan and the principal of the Bonds in certain events
only with the Bank’s consent if the Letter of Credit is in effect, all as
provided in more detail in the Indenture to which reference is hereby made.
Immediately following any such declaration, the Trustee shall mail notice of
such declaration by first class mail to each holder of Bonds at his last address
appearing on the Bond Register. Any defect in or failure to give such notice of
such declaration shall not affect the validity of such declaration.

 

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations, if any, of
the Issuer, the Borrower, the Bank and the holders of the Bonds at any time with
the consent of the Bank and the holders of a majority in aggregate principal
amount of the Bonds at the time outstanding which are affected by such
modifications. The Indenture also permits amendments and supplements to the
Indenture and the Loan Agreement, without requiring the consent of any
Bondholders in certain specifically described instances. The Indenture also
contains provisions permitting holders of a majority in aggregate principal
amount of the Bonds at the time outstanding, on behalf of all the holders of all
Bonds, to waive compliance by the Issuer and the Borrower with certain
provisions of the Indenture and their consequences. Any such consent or waiver
by the holder of this Bond shall be conclusive and binding upon such holder and
on all future holders of this Bond and of any Bond issued in lieu hereof whether
or not notation of such consent or waiver is made upon this Bond. Supplements
and amendments to the Indenture or the Loan Agreement may be made only to the
extent and in circumstances permitted by the Indenture.

 

The holder of this Bond shall have no right to enforce the provisions of the
Indenture or the Loan Agreement, or to institute action to enforce the covenants
therein, or to take any action with respect to a default under the Indenture or
the Loan Agreement, or to institute, appear in or defend any suit or other
proceedings with respect thereto, except as provided under certain limited
circumstances described in the Indenture; provided, however, that nothing
contained in the Indenture shall affect or impair any right of enforcement
conferred on the holder hereof by

 

B-6

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the Act to enforce (i) the payment of the principal of and premium, if any, and
interest on this Bond at and after the maturity thereof, or (ii) the obligation
of the Issuer to pay the principal of and premium, if any, and interest on this
Bond to the holder hereof at the time, place, from the source and in the manner
as provided in the Indenture.

 

The holder of this Bond, by acceptance hereof, consents to all of the terms and
provisions of the Indenture and the Loan Agreement.

 

IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and
things required to exist, happen and be performed precedent to the execution and
delivery of the Indenture and the issuance of this Bond and the issue of which
it is a part, do exist, have happened and have been timely performed in regular
form and manner as required by law, and the issuance of this Bond, together with
all other obligations of the Issuer, does not exceed or violate any
constitutional or statutory limitation of the Issuer.

 

Unless the certificate of authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signers, this Bond shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.

 

IN WITNESS WHEREOF, the Mississippi Business Finance Corporation has executed
this Bond by the manual or facsimile signature of its Executive Director and has
caused its seal (or a facsimile thereof) to be impressed or imprinted hereon,
all as of the Date of Original Issue set forth above.

 

MISSISSIPPI BUSINESS FINANCE

CORPORATION, a public corporation duly

organized and existing under the laws of the State

of Mississippi

By:

   

Its:

 

Executive Director

 

(SEAL)

ATTEST:

By:

   

Its:

 

Secretary

 

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This Bond is one of the Bonds described in the within-mentioned Indenture.

 

J.P. MORGAN TRUST COMPANY,

NATIONAL ASSOCIATION, as Trustee

By:    

Its:

   

 

Authentication Date:                                         
                        

 

B-8

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[FORM OF ASSIGNMENT]

 

For value received, the undersigned hereby sells, assigns and transfers unto

                                                                               
                                        
                                        
                                        
                                                            

                                                                               
                                        
                                        
                                        
                                                            

                                                                               
                                        
                                        
                                        
                                                            

(Name and Address of Assignee)

 

(Taxpayer I.D. No.                                         
                                                 )

the within Bond and does hereby irrevocably constitute and appoint

___________________________________________________
_____________________________________,

attorney to transfer such Bond on the books kept for registration and transfer
of the within Bond, with full power of substitution in the premises.

 

Dated:

                              [Signature]

 

NOTICE: The signature(s) to this Assignment must correspond with the name as it
appears upon the face of the Bond in every particular, without alteration or
enlargement or any change whatever.

 

Signature Guaranteed:                                         
                                             

 

NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution as
defined by SEC Rule 17Ad-15 (17 CFR 240.17Ad-15) participating in a Securities
Transfer Association recognized signature guarantee program.

 

B-9

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VALIDATION CERTIFICATE

 

The issuance of the Bonds of which this Bond is one has been validated and
confirmed by decree of the Chancery Court of the First Judicial District of
Hinds County, Mississippi, rendered on this              day of
                        .

 

 

Secretary, Mississippi Business Finance

Corporation

 

B-10