exv10w12






EXHIBIT
10.12




MISSISSIPPI BUSINESS FINANCE CORPORATION




to



THE BANK OF NEW YORK TRUST COMPANY, N.A.,



as Trustee



TRUST INDENTURE



Dated as of December 1, 2006



Relating to



$200,000,000



Mississippi Business Finance Corporation

Gulf Opportunity Zone Industrial Development Revenue Bonds

(Northrop Grumman Ship Systems, Inc. Project),

Series 2006








 









 








TABLE OF CONTENTS




	 	 	 	 	 

	ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION
	 	 	3	 
	Section 1.01. Definitions
	 	 	3	 
	Section 1.02. Rules of Construction
	 	 	10	 
	 
	 	 	 	 
	ARTICLE II THE BONDS
	 	 	11	 
	Section 2.01. Issuance of Bonds; Form; Dating
	 	 	11	 
	Section 2.02. Interest on the Bonds
	 	 	11	 
	Section 2.03. Changes to and from Auction Mode Rate Determination Method
	 	 	22	 
	Section 2.04. Execution and Authentication
	 	 	24	 
	Section 2.05. Bond Register
	 	 	25	 
	Section 2.06. Registration and Exchange of Bonds; Persons Treated as Owners
	 	 	25	 
	Section 2.07. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds
	 	 	26	 
	Section 2.08. Cancellation of Bonds
	 	 	26	 
	Section 2.09. Temporary Bonds
	 	 	26	 
	Section 2.10. Additional Bonds
	 	 	26	 
	 
	 	 	 	 
	ARTICLE III REDEMPTION, MANDATORY TENDER AND REMARKETING
	 	 	27	 
	Section 3.01. Notices to Trustee
	 	 	27	 
	Section 3.02. Redemption Dates
	 	 	27	 
	Section 3.03. Selection of Bonds to Be Redeemed
	 	 	28	 
	Section 3.04. Redemption Notices
	 	 	28	 
	Section 3.05. Payment of Bonds Called for Redemption
	 	 	29	 
	Section 3.06. Bonds Redeemed in Part
	 	 	30	 
	Section 3.07. Mandatory Tender
	 	 	30	 
	Section 3.08. Disposition of Purchased Bonds
	 	 	32	 
	Section 3.09 Purchase of Bonds in Lieu of Redemption
	 	 	34	 
	 
	 	 	 	 
	ARTICLE IV APPLICATION OF PROCEEDS AND PAYMENT OF BONDS
	 	 	34	 
	Section 4.01. Creation and Deposits to the Project Fund
	 	 	34	 
	Section 4.02. Payments from the Project Fund
	 	 	34	 
	Section 4.03. Trustee May Rely on Requisitions
	 	 	35	 
	Section 4.04. Completion Date
	 	 	35	 
	Section 4.05. Transfers to the Bond Fund
	 	 	35	 
	Section 4.06. Trustee’s Records
	 	 	35	 
	Section 4.07. Payment of Bonds
	 	 	35	 
	Section 4.08. Investments of Moneys
	 	 	36	 
	Section 4.09. Moneys Held in Trust; Unclaimed Funds
	 	 	37	 






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	ARTICLE V REVENUES AND APPLICATION THEREOF
	 	 	37	 
	Section 5.01. Revenues to Be Paid Over to Trustee
	 	 	37	 
	Section 5.02. The Bond Fund
	 	 	37	 
	Section 5.03. Revenues to Be Held for All Registered Owners: Certain Exceptions
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VI BOOK-ENTRY SYSTEM
	 	 	38	 
	Section 6.01. Book-Entry System
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VII COVENANTS
	 	 	40	 
	Section 7.01. Payment of Bonds
	 	 	40	 
	Section 7.02. Performance of Covenants by Issuer
	 	 	40	 
	Section 7.03. Recording and Filing; Further Assurances
	 	 	40	 
	Section 7.04. Tax Covenants
	 	 	40	 
	Section 7.05. Rights Under Agreement
	 	 	41	 
	Section 7.06. Designation of Additional Paying Agents
	 	 	41	 
	Section 7.07. Existence of Issuer
	 	 	41	 
	 
	 	 	 	 
	ARTICLE VIII DISCHARGE OF INDENTURE
	 	 	42	 
	Section 8.01. Bonds Deemed Paid; Discharge of Indenture
	 	 	42	 
	Section 8.02. Application of Trust Money
	 	 	43	 
	Section 8.03. Repayment to Company
	 	 	43	 
	 
	 	 	 	 
	ARTICLE IX DEFAULTS AND REMEDIES
	 	 	43	 
	Section 9.01. Events of Default
	 	 	43	 
	Section 9.02. Acceleration
	 	 	44	 
	Section 9.03. Other Remedies
	 	 	44	 
	Section 9.04. Legal Proceeding by Trustee
	 	 	45	 
	Section 9.05. Appointment of Receivers
	 	 	45	 
	Section 9.06. Waiver of Past Defaults
	 	 	46	 
	Section 9.07. Control by Majority
	 	 	46	 
	Section 9.08. Limitation on Suits
	 	 	46	 
	Section 9.09. Rights of Holders to Receive Payment
	 	 	46	 
	Section 9.10. Collection Suit by Trustee
	 	 	47	 
	Section 9.11. Trustee May File Proofs of Claim
	 	 	47	 
	Section 9.12. Priorities
	 	 	47	 
	Section 9.13. Undertaking for Costs
	 	 	47	 
	 
	 	 	 	 
	ARTICLE X TRUSTEE AND REMARKETING AGENT
	 	 	48	 
	Section 10.01. Acceptance of the Trusts
	 	 	48	 
	Section 10.02. Fees, Charges and Expenses of Trustee
	 	 	50	 
	Section 10.03. Notice to Bondholders if an Event of Default Occurs
	 	 	51	 
	Section 10.04. Intervention by Trustee
	 	 	51	 
	Section 10.05. Successor Trustee
	 	 	51	 
	Section 10.06. Resignation by Trustee
	 	 	51	 






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	Section 10.07. Removal of Trustee
	 	 	51	 
	Section 10.08. Appointment of Successor Trustee
	 	 	52	 
	Section 10.09. Concerning Any Successor Trustee
	 	 	52	 
	Section 10.10. Successor Trustee as Bond Registrar and Paying Agent
	 	 	53	 
	Section 10.11. Trustee and Issuer Required to Accept Directions and Actions of Company
	 	 	53	 
	Section 10.12. No Transfer of Note Held by the Trustee; Exception
	 	 	53	 
	Section 10.13. Filing of Certain Continuation Statements
	 	 	53	 
	Section 10.14. Duties of Remarketing Agent
	 	 	54	 
	Section 10.15. Eligibility of Remarketing Agent
	 	 	54	 
	Section 11.16. Replacement of Remarketing Agent
	 	 	54	 
	Section 10.17. Compensation of Remarketing Agent
	 	 	54	 
	Section 10.18. Successor Remarketing Agent
	 	 	54	 
	Section 10.19. Inapplicability of Remarketing Agent
	 	 	55	 
	 
	 	 	 	 
	ARTICLE XI AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE
	 	 	55	 
	Section 11.01. Without Consent of Bondholders
	 	 	55	 
	Section 11.02. With Consent of Bondholders
	 	 	56	 
	Section 11.03. Effect of Consents
	 	 	56	 
	Section 11.04. Notation on or Exchange of Bonds
	 	 	57	 
	Section 11.05. Signing by Trustee of Amendments and Supplements
	 	 	57	 
	Section 11.06. Company Consent Required
	 	 	57	 
	Section 11.07. Notice to Bondholders
	 	 	57	 
	 
	 	 	 	 
	ARTICLE XII AMENDMENTS OF AND SUPPLEMENTS TO THE AGREEMENT
	 	 	57	 
	Section 12.01. Without Consent of Bondholders
	 	 	57	 
	Section 12.02. With Consent of Bondholders
	 	 	58	 
	Section 12.03. Consents by Trustee to Amendments or Supplements
	 	 	58	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS
	 	 	58	 
	Section 13.01. Notices
	 	 	58	 
	Section 13.02. Bondholders’ Consent
	 	 	59	 
	Section 13.03. Appointment of Separate Paying Agent and/or Tender Agent
	 	 	59	 
	Section 13.04. Limitation of Rights
	 	 	60	 
	Section 13.05. Severability
	 	 	60	 
	Section 13.06. Payments Due on Non-Business Days
	 	 	60	 
	Section 13.07. Governing Law
	 	 	60	 
	Section 13.08. Captions
	 	 	60	 
	Section 13.09. No Liability of Officers
	 	 	60	 
	Section 13.10. Counterparts
	 	 	60	 






iii









 






	 	 	 	 	 

	EXHIBIT A            FORM OF BOND
	 	 	A-1	 
	 
	 	 	 	 
	EXHIBIT B            AUCTION PROCEDURES
	 	 	B-1	 
	 
	 	 	 	 
	Article I Definitions
	 	 	B-2	 
	 
	 	 	 	 
	Article II Auction Procedures
	 	 	B-6	 
	Section 2.01. General Procedures
	 	 	B-6	 
	Section 2.02. Orders by Existing Owners and Potential Owners
	 	 	B-6	 
	Section 2.03. Submission of Orders by Broker-Dealers to Auction Agent
	 	 	B-8	 
	Section 2.04. Determination of Auction Mode Rate
	 	 	B-11	 
	Section 2.05. Allocation of Bonds
	 	 	B-13	 
	Section 2.06. Notice of Auction Rate
	 	 	B-15	 
	Section 2.07. Reference Rate
	 	 	B-17	 
	Section 2.08. Miscellaneous Provisions Regarding Auctions
	 	 	B-17	 
	Section 2.09. Changes in Auction Period or Auction Date
	 	 	B-18	 
	 
	 	 	 	 
	Article III Auction Agent
	 	 	B-19	 
	Section 3.01. Auction Agent
	 	 	B-19	 
	Section 3.02. Qualifications of Auction Agent; Resignation; Removal
	 	 	B-19	 
	 
	 	 	 	 
	EXHIBIT C            Requisition and Certificate
	 	 	C-1	 











iv









 








TRUST INDENTURE




     THIS TRUST INDENTURE made and entered into as of December 1, 2006, by and between the
MISSISSIPPI BUSINESS FINANCE CORPORATION, a public corporation duly organized and existing under
the Constitution and laws of the State of Mississippi (the “Issuer”), and THE BANK OF NEW YORK
TRUST COMPANY, N.A., a national banking association duly organized, existing and authorized to
accept and execute trusts of the character herein set out under and by virtue of the laws of the
United States, with a designated corporate trust office located in Birmingham, Alabama, as trustee
(the “Trustee”).



RECITALS




     A. In furtherance of its statutory purposes, the Issuer has entered into a Loan Agreement,
dated as of December 1, 2006 (the “Agreement”), with Northrop Grumman Ship Systems, Inc., a
Delaware corporation (the “Company”), providing for the undertaking by the Issuer to loan amounts
to the Company in order to finance the construction, reconstruction, and renovation of the
Company’s interest in certain ship manufacturing and repair facilities, or portions thereof,
located in Gulfport, Mississippi, and Pascagoula, Mississippi.



     B. The Agreement provides that, for the purposes therein set forth, the Issuer will issue and
sell its Gulf Opportunity Zone Industrial Development Revenue Bonds (Northrop Grumman Ship Systems,
Inc. Project), Series 2006 in the aggregate principal amount of $200,000,000 (the “Bonds”); the
Issuer will loan the proceeds of the Bonds to the Company; and to evidence the Loan (as hereinafter
defined), the Company, will execute and deliver, concurrently with the issuance of the Bonds, the
Note (as hereinafter defined).



     C. The execution and delivery of this Indenture (as hereinafter defined) and the Agreement and
the issuance and sale of the Bonds have been in all respects duly and validly authorized by
resolution duly adopted by the Issuer.



     D. The Company has agreed to make payments on the Note to the Issuer in amounts sufficient to
pay the principal, purchase price, premium, if any, and interest on the Bonds.



     E. Northrop Grumman Corporation, a Delaware Corporation, has agreed to enter into a Guaranty
Agreement with the Trustee guarantying the payment of the Bonds.



     F. All acts, conditions and things required by the Constitution and laws of the State of
Mississippi to happen, exist and be performed precedent to and in the execution and delivery of
this Indenture and the Agreement have happened, exist and have been performed as so required, in
order to make this Indenture a valid



 









 




and binding trust indenture for the security of the Bonds in
accordance with its terms and in order to make the Agreement a valid and binding loan agreement in accordance with
its terms.




     G. The Trustee has accepted the trusts created by this Indenture and in evidence thereof has
joined in the execution hereof.



     Accordingly, the Issuer and the Trustee agree as follows for the benefit of each other and for
the benefit of the holders of the Bonds issued pursuant to this Indenture.



GRANTING CLAUSE




     NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in consideration of the premises, of the
acceptance by the Trustee of the trusts hereby created, and the purchase and acceptance of the
Bonds by the holders thereof, and also for and in consideration of the sum of One Dollar ($1.00) to
the Issuer in hand paid by the Trustee at or before the execution and delivery of this Indenture,
the receipt of which is hereby acknowledged, and for the purpose of fixing and declaring the terms
and conditions upon which the Bonds are to be issued, authenticated, delivered, secured and
accepted by all persons who shall from time to time be or become holders thereof, and in order to
secure the payment of all Bonds at any time issued and outstanding hereunder and the interest and
the premiums, if any, payable upon redemption or mandatory tender thereon according to their tenor,
purport and effect, and in order to secure the performance and observance of all the covenants,
agreements and conditions therein or herein contained; the Issuer has executed and delivered this
Indenture, and will cause the Company to deliver to the Trustee the Note; the Issuer does hereby
bargain, sell, convey, assign and pledge to the Trustee, and grant to the Trustee a security
interest in, all rights, title and interest of the Issuer in, to and under the Note and all
payments, if any, made and to be made thereunder as security for the payment of all outstanding
Bonds and the interest and the premium, if any, thereon and does hereby bargain, sell, convey,
assign and pledge to the Trustee, and grant to the Trustee a security interest in, all other
rights, title and interest of the Issuer in, to and under the Agreement and all moneys receivable
thereunder (except for Unassigned Rights, as hereinafter defined) as security for the satisfaction
of any other obligation assumed by it in connection with all outstanding Bonds at any time issued
hereunder;



     TO HAVE AND TO HOLD the same unto the Trustee and its successors in trust forever;



     IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth, for the equal and
proportionate benefit and security of all and singular present and future holders of the Bonds
issued under this Indenture, without preference, priority or distinction as to lien or otherwise,
except as otherwise hereinafter



2









 




provided, of any one Bond over any other Bond, by reason of
priority in the issue, sale or negotiation thereof or otherwise;




     PROVIDED, HOWEVER, that if the Issuer, its successors or assigns shall pay or cause to be paid
the principal of, premium, if any, and interest on the Bonds
due or to become due thereon, at the times and in the manner mentioned in the Bonds, and shall
perform all the covenants and conditions required of it by this Indenture, and shall pay or cause
to be paid to the Trustee and any additional paying agents all sums of money due or to become due
to them in accordance with the terms and provisions hereof, then upon such final payments this
Indenture and the rights hereby granted shall terminate and the Trustee shall release this
Indenture and shall execute such documents to evidence such termination and release as may be
reasonably required by the Issuer or the Company; otherwise this Indenture to be and remain in full
force and effect.



     THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds from time to
time issued and secured hereunder are to be issued, authenticated and delivered, and all said
property, rights and interests, including, without limitation, the amounts hereby assigned and
pledged, are to be dealt with and disposed of subject to the terms of this Indenture, and the
Issuer agrees with the Trustee and with the respective owners, from time to time, of said Bonds, or
part thereof, as follows:



ARTICLE I




DEFINITIONS AND RULES OF CONSTRUCTION



     Section 1.01. Definitions. For all purposes of this Indenture, unless the context
requires otherwise, words or terms defined in the preamble and recitals of this Indenture shall
have the meanings specified therein, and the following terms shall have the following meanings;
provided, however, that any terms used herein relating to Bonds in the Auction Mode Rate
Determination Method or Auction Procedures that are not expressly defined below shall be deemed to
have the meanings provided in Exhibit B, Auction Procedures, attached hereto:



     “Act” means Title 57, Chapter 10, Articles 7 and 11 of the Mississippi Code of 1972, et seq.,
as amended.



     “Auction Rate Period” means each period of time when the Bonds bear interest at an Auction
Mode Rate.



     “Beneficial Owner” means the purchaser of a beneficial interest in the Bonds when the Bonds
are held by the Securities Depository in the Book-Entry System, and otherwise means a Bondholder.



3









 





     “Bloomberg” means Bloomberg or other major information vendor listed on the official website
of the British Bankers’ Association if selected by the Remarketing Agent and acceptable to the
Company.



     “BMA
Index ” means, as of any date, the rate calculated according to 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 composed of weekly, tax-exempt variable rate demand notes
produced by Municipal Market Data, Inc. or any successor thereto, or as otherwise designated by the
Bond Market Association.



     “BMA Margin” is defined in Section 2.02(a)(6)(i).



     “Bondholder” or “holder” means the registered owner of any Bond.



     “Bonds” means the Gulf Opportunity Zone Industrial Development Revenue Bonds (Northrop Grumman
Ship Systems, Inc. Project), Series 2006 issued by the Issuer hereunder in the aggregate principal
amount of $200,000,000.



     “Book-Entry System” means the system maintained by the Securities Depository described in
Section 6.01.



     “Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which
commercial banks in New York, New York, Birmingham, Alabama, or the city in which the principal
corporate trust office of the Trustee is located, are authorized by law to close or (iii) a day on
which the New York Stock Exchange is closed; provided, however, that during an Auction Rate Period
the definition of “Business Day” shall be supplemented as provided in Exhibit B attached hereto.



     “Code” means the Internal Revenue Code of 1986, as amended, and the applicable Treasury
Regulations promulgated thereunder as the same may be applicable to the Bonds.



     “Commercial Paper Mode” means each period of time, comprised of Commercial Paper Periods,
during which Commercial Paper Rates are in effect.



     “Commercial Paper Period” means, with respect to any Bond, each period set under Section
2.02(a)(3).



     “Commercial Paper Rate” means an interest rate on each Bond set under Section 2.02(a)(3).



     “Company” means Northrop Grumman Ship Systems, Inc., a Delaware corporation, and its
successors and assigns, and any surviving, resulting or transferee entity as provided in Section
4.3 of the Agreement.



4









 





     “Company Representative” means any one of the persons at the time designated to act on behalf
of the Company by written certificate furnished to the Trustee containing the specimen signatures
of such persons and signed on behalf of the Company by one or more of its officers.



     “Conversion Notice” is defined in Section 2.02(b)(l).



     “Cost of the Project” means the costs and allowances for the acquisition, construction,
rehabilitation, installation and equipping of the Project which are permitted under Section
57-10-401 of the Act and which include, but are not limited to, all capital costs of the Project,
including the following:




     (a) Obligations incurred with respect to eligible equipment and labor and to
contractors, subcontractors, builders and materialmen in connection with the acquisition,
construction, and installation of an economic development project;




     (b) The cost of acquiring land or rights in land and any cost incidental thereto,
including recording fees;




     (c) The cost of contract bonds and of insurance of all kinds that may be required or
necessary during the course of acquisition, construction, and installation of an economic
development project which is not paid by the contractor or contractors or otherwise provided
for;




     (d) All costs of architectural and engineering services, including test borings,
surveys, estimates, plans and specifications, preliminary investigations, and supervision of
construction, as well as for the performance of all the duties required by or consequent
upon the acquisition, construction, and installation of an economic development project;




     (e) All costs which shall be required to be paid under the terms of any contract or
contracts for the acquisition, construction, and installation of an economic development
project; and




     (f) All costs, expenses, and fees incurred in connection with the issuance of bonds
pursuant to Sections 57-10-401 through 57-10-445 of the Act.




     Notwithstanding the above, Cost of the Project shall not include any movable fixtures
or equipment other than Eligible Equipment as defined in the Agreement.



     “Daily Rate” means an interest rate on the Bonds set under Section 2.02(a)(l).



     “Determination Method” is defined in Section 2.02(a) hereof.



5









 





     “Determination of Taxability” means a determination that the interest on any of the Bonds is
included in the gross income of the holders thereof 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 Company is advised in writing by the Commissioner or any
District Director of the Internal Revenue Service that, based upon any filings of the
Company, or upon any other grounds
whatsoever, the interest on the Bonds is included in the gross income of any holder or
former holder thereof for federal income tax purposes;




     (b) the day on which the Company receives notice from the Trustee in writing that the
Trustee has been advised (i) in writing by any holder or former holder of a Bond that the
Internal Revenue Service has issued a statutory notice of deficiency or similar notice to
such holder or former holder which asserts in effect that the interest on the Bonds received
by such holder or former holder of the Bonds is included in the gross income of such holder
or former holder for federal income tax purposes or (ii) in an Opinion of Tax Counsel that
the interest on the Bonds is included in the gross income of any holder or former holder
thereof for federal income tax purposes;




     (c) the day on which the Company 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
included in the gross income of any holder or former holder thereof for federal income tax
purposes; or




     (d) the day on which the Company 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 Company has been
given written notice and an opportunity to participate and defend that the interest on the
Bonds is included in the gross income of any holder or former holder thereof for federal
income tax purposes;


provided, however, no Determination of Taxability shall occur under subparagraph (a), (b) or (c) of
this paragraph (other than a conclusion set forth in an Opinion of Tax Counsel) unless the Company
has been afforded the opportunity, at its expense, to contest any such conclusion and/or assessment
and, further, no Determination of Taxability shall occur until such contest, if made, has been
finally determined. The Company 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 holder or former holder of a




6









 







Bond to judgment and through
any appeals therefrom or other proceedings related thereto.




     “Event of Default” is defined in Section 9.01.



     “Favorable Opinion of Tax Counsel” means an Opinion of Tax Counsel addressed to the Issuer,
the Trustee, the Guarantor and the Company to the effect that the action proposed to be taken is
permitted by the laws of the State and by this Indenture and will not adversely affect any
exclusion from gross income for federal income tax purposes of interest on the Bonds.



     “Guarantor” means Northrop Grumman Corporation, a Delaware corporation, as guarantor under the
Guaranty.



     “Guaranty” means that Guaranty Agreement dated as of December 1, 2006 from Northrop Grumman
Corporation to the Trustee.



     “Government Obligations” means (i) noncallable direct obligations of the United States for
which its full faith and credit are pledged, (ii) noncallable obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States, the timely payment
of which is unconditionally guaranteed as a full faith and credit obligation of the United States,
or (iii) securities or receipts evidencing ownership interests in obligations or specified portions
(such as principal or interest) of obligations described in (i) or (ii).



     “Indenture” means this Trust Indenture, as it may be amended or supplemented from time to time
in accordance with its terms.



     “Index” means the BMA Index or LIBOR Index, as applicable.



     “Index Adjustment Date” is defined in Section 2.02(a)(6)(i).



     “Index Period” means any period of time established by the Company pursuant to Section
2.02(b)(l) during which the Bonds bear interest at the Index Rate.



     “Index Rate” means an interest rate on the Bonds set under 2.02(a)(6).



     “Index Rate Determination Date” means (i) if the applicable Index is the LIBOR Index, the
second London Business Day immediately preceding the first day of the relevant Index Period or, if
the applicable Index is the BMA Index, the Business Day immediately preceding the first day of the
relevant Index Period; and (ii) the second London Business Day or the Business Day, as the case may
be, preceding each Thursday during the relevant Index Period thereafter.



     “Initial Interest Period” is defined in Section 2.02(b)(l).



7









 





     “Interest Payment Date” is defined in the form of the Bonds appearing in Exhibit A attached
hereto.



     “Interest Period” is defined in the form of the Bonds appearing in Exhibit A attached hereto.



     “LIBOR Index” for any Index Rate Determination Date will be the Reported Rate for deposits in
U.S. dollars having an index maturity of one month for a period commencing on the second London
Business Day immediately following the Index Rate Determination Date, in amounts of not less than
$1,000,000, at approximately 11:00 a.m., London time on the Index Rate Determination Date.



     “LIBOR Percentage” is defined in Section 2.02(a)(6)(i).



     “London Business Day” means a day that is a Business Day and a day on which dealings in
deposits in U.S. dollars are transacted, or with respect to any future date are expected to be
transacted, in the London interbank market.



     “Long-Term Interest Rate” means the interest rate on the Bonds for the Initial Interest Period
or an interest rate on the Bonds set under Section 2.02(a)(4).



     “Long-Term Interest Rate Period” means any period as defined in Section 2.02(a)(4).



     “Mandatory Redemption Event” means the occurrence of a Determination of Taxability.



     “Maturity Date” means the stated maturity for the Bonds as set forth in Section 2.01.



     “Note” means the promissory note executed and delivered by the Company in the form attached to
the Agreement concurrently with the issuance of the Bonds in a like principal amount bearing
interest at the rate or rates borne by the Bonds.



     “Opinion of Counsel” means a written opinion of counsel selected by the Company who is
acceptable to the Issuer and the Trustee. Such counsel may be an employee of or counsel to the
Issuer, the Trustee or the Company.



     “Opinion of Tax Counsel” means an Opinion of Counsel by counsel of nationally recognized
standing in matters relating to the exclusion of interest from gross income on obligations issued
by or on behalf of states and their political subdivisions.



     The term “outstanding” when used with reference to Bonds, or “Bonds outstanding” means all
Bonds which have been authenticated and delivered by the Trustee under this Indenture, except the
following:



8









 






     a. Bonds canceled or purchased by or delivered to the Trustee for cancellation.




     b. Bonds that have become due (at maturity or on redemption, acceleration or otherwise)
and for the payment, including interest accrued to the due date, of which sufficient moneys
are held by the Trustee.




     c. Bonds deemed paid by Section 7.01.




     d. Bonds in lieu of which others have been authenticated under Section 2.06 (relating
to registration and exchange of Bonds) or Section 2.07 (relating to mutilated, lost, stolen,
destroyed or undelivered Bonds).


Bonds purchased pursuant to tenders and not delivered to the Trustee for payment are not
outstanding, but there will be outstanding Bonds authenticated and delivered in lieu of such
undelivered Bonds as provided in the second paragraph of Section 2.07.




     “Participant” means one of the entities which deposit securities, directly or indirectly, in
the Book-Entry System.



     “Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, estate, unincorporated organization or government or any agency or political
subdivision thereof.



     “Principal” when used with reference to any Bonds, includes any premium payable on those
Bonds.



     “Project” has the meaning assigned to such term in the Agreement.



     “Purchase Contract” means the Purchase Contract, dated December 15, 2006 to be entered into by
and among the Issuer, the Company and the Underwriter providing for the sale of the Bonds.



     “Record Date” is defined in the form of the Bonds appearing as Exhibit A attached hereto.



     “Remarketing Agent” means the Person appointed as Remarketing Agent pursuant to Section 10.15
hereof, and its successors under this Indenture.



     “Reported Rate” means on any date of determination, the offered rate (rounded up to the next
highest one one-thousandth of one percent (0.001%)) for deposits in U.S. dollars for a one-month
period which appears on the Bloomberg BTMM US at approximately 11:00 A.M., London time, on such
date, or if such date is not a date on which dealings in U.S. dollars are transacted in the London



9









 







interbank market, then on the next preceding day on which such dealings were transacted in such
market.



     “Responsible Officer” means any officer or trust officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.



     “Revenues” means (a) all amounts payable to the Trustee with respect to the principal or
redemption price of, or interest on, the Bonds (i) by the Company under the Note, and (ii) by
transfer from the Project Fund pursuant to Section 4.01 hereof, and (b) investment income with
respect to any moneys held by the Trustee in the Bond Fund.



     “Securities Depository” means The Depository Trust Company, New York, New York or its nominee,
and its successors and assigns, or any successor appointed under Section 5.01.



     “Spread” is defined in Section 2.02(a)(6)(i).



     “State” means the State of Mississippi.



     “Trustee” means the entity identified as such in the heading of this Indenture and its
successors under this Indenture.



     “Unassigned Rights” means the rights of the Issuer under Section 4.2 and Section 5.3 of the
Agreement.



     “Underwriter” means J. P. Morgan Securities Inc. on behalf of itself and Morgan Stanley & Co.,
Inc. and SunTrust Capital Markets.



     “Weekly Index Period” means, while the Bonds bear interest at an Index Rate, each weekly
period beginning on a Thursday and ending on a Wednesday.



     “Weekly Rate” means an interest rate on the Bonds set under Section 2.02(a)(2).



     Section 1.02. Rules of Construction. Unless the context otherwise requires,




     a. an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles,




     b. references to Articles and Sections are to the Articles and Sections of this
Indenture, and




     c. the singular form of any word, including the terms defined in Section 1.01, includes
the plural, and vice versa, and a word of any gender includes all genders.



10









 





ARTICLE II




THE BONDS



     Section 2.01. Issuance of Bonds; Form; Dating. The Bonds shall be designated
“Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue
Bonds (Northrop Grumman Ship Systems, Inc. Project), Series 2006.” The total principal amount of
Bonds that may be outstanding shall not exceed $200,000,000. The Bonds shall be substantially in
the form of Exhibit A attached hereto, which is part of this Indenture, in the denominations
provided for in the Bonds. The Bonds may have notations, legends or endorsements required by law or
usage.



     All Bonds will be dated the date of original issuance and delivery, will bear interest from
that date and shall mature, subject to prior redemption or mandatory tender, on December 1, 2028.
Bonds will be numbered as determined by the Trustee.



     Upon the execution and delivery of this Indenture, the Issuer will execute and deliver to the
Trustee and the Trustee will authenticate the Bonds and deliver them to the purchaser or purchasers
as directed in writing by the Issuer.



     Section 2.02. Interest on the Bonds. Interest on the Bonds will be payable as provided
in the Bonds and in this Section. The Determination Method may be changed by the Company as
described in paragraph (b) below. The methods of determining the various interest rates are as
provided in paragraph (a) below.




     (a) Interest Rate Determination Methods. Except with respect to the Initial Interest
Period, in accordance with the notification requirements described herein, the Company shall
determine the applicable interest rate determination method (each a “Determination Method”)
on the Bonds. The interest rate on the Bonds shall be determined by one of the following
Determination Methods; provided, however, that while there exists an Event of Default under
the Indenture, the interest rate on the Bonds will be the rate on the Bonds on the day
before the Event of Default occurred, except that if interest on any Bond was then payable
at a Commercial Paper Rate, the interest rate for all Bonds then bearing interest at a
Commercial Paper Rate will be the highest Commercial Paper Rate then in effect for any Bond.




     (1) Daily Rate. When interest on the Bonds is payable at a Daily Rate, the
Remarketing Agent will set a Daily Rate on or before 11:00 a.m., New York City time,
on each Business Day for that Business Day. Each Daily Rate will be the minimum rate
necessary (as determined by the Remarketing Agent based on the examination of
tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to
have been priced or traded under then-



11









 







prevailing market conditions) for the
Remarketing Agent to sell the Bonds on the day the rate is set at their principal
amount (without regard to accrued interest). The Daily Rate for any non-Business Day
will be the rate for the last day for which a rate was set.




     (2) Weekly Rate. When interest on the Bonds is payable at a Weekly Rate, the
Remarketing Agent will set a Weekly Rate on or before 5:00 p.m., New York City time,
on the last Business Day before the commencement of a period during which the Bonds
bear interest at a Weekly Rate and on each Tuesday thereafter so long as interest on
the Bonds is to be payable at a Weekly Rate or, if any Tuesday is not a Business
Day, on the next preceding Business Day. Each Weekly Rate will be the minimum rate
necessary (as determined by the Remarketing Agent based on the examination of
tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to
have been priced or traded under then prevailing market conditions) for the
Remarketing Agent to sell the Bonds on the date the rate is set at their principal
amount (without regard to accrued interest). Thereafter, each Weekly Rate shall
apply to (i) the period beginning on the Wednesday after the Weekly Rate is set and
ending on the following Tuesday or, if earlier, ending on the day before the
effective
date of a new method of determining the interest rate on the Bonds or (ii) the
period beginning on the effective date of the change to a Weekly Rate and ending on
the next Tuesday.




     (3) Commercial Paper Rate. During a Commercial Paper Mode, each Bond will bear
interest during the Commercial Paper Period for such Bond at the Commercial Paper
Rate for such Bond. Different Commercial Paper Periods may apply to different Bonds
at any time and from time to time. Except as otherwise described in this
subparagraph (3), the Commercial Paper Period and Commercial Paper Rate for each
Bond will be determined by the Remarketing Agent no later than 12:15 p.m., New York
City time, on the first day of each Commercial Paper Period.




     (i) Determination of Commercial Paper Periods. Subject to Section
2.02(b)(2)(vii), each Commercial Paper Period will be a period of at least 1
day and not more than 270 days, determined by the Remarketing Agent to be
the period which, together with all other Commercial Paper Periods for all
Bonds then outstanding, will, in the judgment of the Remarketing Agent,
result in the lowest overall interest expense on the Bonds over the next 270
days. Each Commercial Paper Period will end on either the day before a
Business Day or on the day before the Maturity Date for such Bond. However,
any Bond purchased on



12









 







behalf of the Company and remaining unsold by the
Remarketing Agent as of the close of business on the first day of the
Commercial Paper Period for that Bond will have a Commercial Paper Period of
1 day or, if that Commercial Paper Period would not end on a day before a
Business Day, a Commercial Paper Period of the shortest possible duration
greater than 1 day ending on a day before a Business Day.




     In determining the number of days in each Commercial Paper Period, the
Remarketing Agent shall take into account the following factors: (I)
existing short-term tax-exempt market rates and indices of such short-term
rates, (II) the existing market supply and demand for short-term tax-exempt
securities, (III) existing yield curves for short-term and long-term
tax-exempt securities for obligations of credit quality comparable to the
Bonds, (IV) general economic conditions, (V) industry economic and financial
conditions that may affect or be relevant to the Bonds, (VI) the number of
days in other Commercial Paper Periods applicable to the Bonds and (VII)
such other facts, circumstances and conditions as the Remarketing Agent, in
its sole discretion, shall determine to be relevant.




     (ii) Determination of Commercial Paper Rates. The Commercial Paper Rate
for each Commercial Paper Period for each Bond 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 by the Remarketing
Agent to have been priced or traded under then-prevailing market conditions)
for the Remarketing Agent to sell such Bond on the date and at the time of
such determination at its principal amount (without regard to accrued
interest).




     (4) Long-Term Interest Rate. The Remarketing Agent will set a Long-Term
Interest Rate on a date not less than seven Business Days before the beginning of
any period (a “Long-Term Interest Rate Period”) in which interest on any of the
Bonds will be payable at a Long-Term Interest Rate. The date on which such Long-Term
Interest Rate shall cease to accrue for such Long-Term Interest Rate Period shall be
determined by the Company in accordance with Section 2.02(b)(l). Each Long-Term
Interest Rate will be the minimum rate necessary (as determined by the Remarketing
Agent with respect to any Long-Term Interest Rate Period based on the examination of
tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to
have been priced or traded under then-



13









 







prevailing market conditions) for the
Remarketing Agent to sell the Bonds for delivery on the effective date of the
Long-Term Interest Rate at their principal amount (without regard to accrued
interest).




     (5) Auction Mode Rate. During an Auction Rate Period, the Auction Mode Rate
will be determined by the Auction Agent in accordance with the provisions set forth
in Exhibit B attached hereto which is part of this Indenture.




     (6) Index Rate. During an Index Period, the Bonds will bear interest at the
Index Rate to be determined as follows:




     (i) On the first day of the applicable Index Period and on the first
Index Rate Determination Date following each six month anniversary of such
day until the end of the Index Period (each, an “Index Adjustment Date”),
the Remarketing Agent shall (A) depending on the Index, determine the
minimum percentage of the LIBOR Index (the “LIBOR Percentage”) or the
minimum number of basis points above or below the BMA Index (the “BMA
Margin;” the BMA Margin and the LIBOR Percentage are hereinafter sometimes
referred to as the “Spread”), as applicable, that would be necessary (as
determined by the Remarketing Agent based on the examination of tax-exempt
obligations comparable to the Bonds known by the Remarketing Agent to have
been priced or traded under then-prevailing market conditions) to allow the Remarketing Agent to sell
the Bonds on the date and at the time of such determination at their
principal amount (without regard to accrued interest) if such Bonds were
being sold on such date, and (B) notify the Trustee and the Company of the
applicable Spread for such six month period.




     (ii) On each Index Rate Determination Date, (A) the Remarketing Agent
shall, no later than 11:00 a.m. on such date, notify the Trustee, depending
on the applicable Index, of the LIBOR Index or the BMA Index to apply for
the next succeeding Weekly Index Period. The applicable Index as determined
by the Remarketing Agent, adjusted by the applicable Spread, will be the
interest rate to be borne by the Bonds from the first Thursday after such
date through the following Wednesday; provided that, if the applicable Index
Rate Determination Date is a day following the Thursday in any week, the
Index Rate so determined will be in effect from the next preceding Thursday
through the following Wednesday.



14









 






     (iii) Promptly upon the determination of the Index Rate by the
Remarketing Agent, the Remarketing Agent will notify the Company and the
Trustee in writing of the Index Rate for the applicable period. The Index
Rate determined by the Remarketing Agent, absent manifest error, shall be
binding and conclusive upon the Beneficial Owners, Bondholders, the Company
and the Trustee.




     (iv) If the following circumstances exist on any Index Rate
Determination Date, the Index Rate shall be determined as follows:




     (A) In the event that the applicable Index on such Index Rate
Determination Date is the BMA Index and the BMA Index has not been
published or set, the Index Rate for the succeeding Weekly Index
Period shall be the minimum percentage of LIBOR Index that would be
necessary (as determined by the Remarketing Agent based on the
examination of tax-exempt obligations comparable to the Bonds known
by the Remarketing Agent to have been priced or traded under
then-prevailing market conditions) to allow the Remarketing Agent to
sell the Bonds on the date and at the time of such determination at
its principal amount (without regard to accrued interest) if the
Bonds were being sold on such date.




     (B) In the event that the applicable Index on such Index Rate
Determination Date is LIBOR Index and no Reported Rate appears on
Bloomberg as of
approximately 11:00 a.m., London time, on an Index Rate
Determination Date, the Index Rate for the succeeding Weekly Index
Period shall be based on the Reported Rate for the preceding week;
provided, however, that if no Reported Rate appears on Bloomberg for
two consecutive weeks, the Index Rate shall be determined by the
Remarketing Agent and shall be the minimum percentage of four-week
Treasury Bills that would be necessary (as determined by the
Remarketing Agent based on the examination of tax-exempt obligations
comparable to the Bonds known by the Remarketing Agent to have been
priced or traded under then-prevailing market conditions) to allow
the Remarketing Agent to sell the Bonds on such date and at the time
of such determination at its principal



15









 







amount (without regard to
accrued interest) if the Bonds were being sold on such date.




     (C) In the event that neither Index is available, the Index Rate
for the succeeding Weekly Index Period shall be the minimum
percentage of a referenced Treasury security selected by the
Remarketing Agent that would be necessary (as determined by the
Remarketing Agent based on the examination of tax-exempt obligations
comparable to the Bonds known by the Remarketing Agent to have been
priced or traded under then- prevailing market conditions) to allow
the Remarketing Agent to sell the Bonds on such date and at the time
of such determination at its principal amount (without regard to
accrued interest) if the Bonds were being sold on such date.




     (v) The foregoing notwithstanding, if the commencement of an Index
Period does not coincide with the commencement of the first succeeding
Weekly Index Period, the interest rate to be borne by the Bonds from the
date of the commencement of the Index Period until the commencement of the
first succeeding Weekly Index Period shall be a rate determined by the
Remarketing Agent prior to the commencement of such Index Period, and such
rate shall be the rate that would be necessary (as determined by the
Remarketing Agent based on the examination of tax-exempt obligations
comparable to the Bonds known by the Remarketing Agent to have been priced
or traded under then-prevailing market conditions) to allow the Remarketing
Agent to sell the Bonds on such date and at the time of such determination
at their principal amount (without regard to accrued interest) if the Bonds
were being sold on such date.




     (7) Failure of Remarketing Agent to Announce Interest Rates or Spread on the
Bonds. Except as set forth in Exhibit B attached hereto, if the appropriate interest
rate, Spread or Commercial Paper Period is not or cannot be determined for any
reason, or if, 30 days before the end of a Long-Term Interest Rate Period, the
Company has not provided for the next interest rate period, the method of
determining interest on the Bonds shall be automatically converted to the Weekly
Rate (without the necessity of complying with the requirements of Section 2.02(b))
and the interest rate shall be equal to the BMA Index plus the BMA Margin or, if the
BMA Index is unavailable, the LIBOR Index multiplied by the LIBOR Percentage, or



16









 







if
the LIBOR Index is unavailable, 90% of the 30-day Treasury rate, until such time as
the Determination Method can be changed in accordance with Section 2.02(b);
provided, however, during an Index Period, if the applicable Index is not available,
clause (iv)(A), (iv)(B) or (iv)(C), as applicable, of Section 2.02(a)(6) shall be
effective instead of this clause (7). The Trustee shall promptly notify the
Bondholders of any such automatic change as set forth in Section 3.07(b).




     While Bonds are in a Commercial Paper Mode, during any transition period caused
by an automatic conversion of such Bonds to a Weekly Rate in accordance with this
clause (7), Bonds bearing interest at a Weekly Rate and Bonds bearing interest at a
Commercial Paper Rate, as applicable, shall be governed by the provisions of this
Indenture applicable to such methods of determining interest on the Bonds.




     (b) (1) Initial Interest Rate Determination Method; Change in Interest Rate
Determination Method. The Bonds will bear interest for a Long-Term Interest Rate Period
beginning on the date of issuance and ending on December 1, 2028, except as provided
hereinafter (the “Initial Interest Period”). Interest on the Bonds will initially be payable
at a rate not to exceed thirteen percent (13%) per annum for the Initial Interest Period.
The rate during the Initial Interest Rate Period shall be the rate determined by the
Underwriter and agreed to by the Company and the Issuer pursuant to the Purchase Contract as
being the rate which permits the Underwriter to sell the Bonds to the public at the
principal amount thereof. On or after December 1, 2016, the Company may change the
Determination Method from time to time by notifying, as applicable, the Issuer, the Trustee,
the Remarketing Agent, the Auction Agent and the Broker Dealer, in writing. Such notice (a
“Conversion Notice”) shall contain (a) the effective date of such change, (b) the proposed
Determination Method, and (c) if the change is to a Long-Term Interest Rate or Rates, the
date on which the Long-Term Interest Rate for the first such Long-Term Interest Rate Period
shall cease to accrue and, at the option of the Company, the effective date and date(s) on
which the Long-Term Interest Rate for any successive Long-Term Interest Rate Periods
shall cease to accrue (which last day for each Long-Term Interest Rate Period must be
either the day before the Maturity Date for such Bonds or a day which next precedes a
Business Day and is at least 365 days after the effective date); provided, however, that if
the change is (x) to or from an Auction Rate Period, the notice shall be given in accordance
with Sections 2.03(a) or 2.03(b), as applicable, and (y) if such change is to an Index
Period, such notice shall also specify the applicable Index for the Index Period and the
length of such Index Period. The Long-Term Interest Rate Period shall be the same duration
for all of the Bonds. The notice must be accompanied by a Favorable Opinion of Tax Counsel.
If the Company’s notice complies with this



17









 







paragraph, and if the Company shall deliver to
the Trustee and the Issuer a confirming Opinion of Tax Counsel on the effective date as
specified in the notice, the interest rate on the Bonds will be determined on the basis of
the new rate on the effective date specified in the notice until there is another change as
provided in this Section. If the change is to a Long-Term Interest Rate Determination Method
and no Long-Term Interest Rate has been set by the date seven Business Days before the
proposed effective date of such change, the Company may cancel the change by notifying, as
applicable, the Issuer, the Trustee, the Remarketing Agent, the Auction Agent and the
Broker-Dealer, in writing.




     If the Company wishes to change the Determination Method to or from an Auction Mode
Rate, the Company must comply with Section 2.03 as well as this Section 2.02(b)(l).




     If the Company wishes to designate successive Long-Term Interest Rate Periods without
specifying the effective dates and last days as described in the preceding paragraph for the
second or any subsequent Long-Term Interest Rate Periods, it may do so by following the same
procedure as for a change in the Determination Method as provided in the foregoing
paragraph.




     When one Long-Term Interest Rate Period follows another, all provisions of this
Indenture applying to a change in the Determination Method will apply, except the Company
will not be required to deliver a Favorable Opinion of Tax Counsel if (i) the Company has
previously designated a series of successive Long-Term Interest Rate Periods which, together
with the current Long-Term Interest Rate Period, are substantially equal in length, (ii) a
Favorable Opinion of Tax Counsel was delivered before the first such Long-Term Interest Rate
Period in that series which applies to each such successive Long-Term Interest Rate Period
and (iii) no other change in the security for the Bonds or in this Indenture or the terms of
the Bonds is made which is effective as of, or agreed to in connection with, the effective
date of such subsequent Long-Term Interest Rate Period.




     Except as provided in Section 2.04(e) of the Auction Procedures, in the event there is
a failed conversion of the Bonds for any reason, the method of determining interest on the
Bonds shall be automatically converted to the
Weekly Rate and the Bonds shall continue to be subject to mandatory tender as described
under “Mandatory Tender Upon a Change in the Determination Method” as provided in paragraph
7 of the Bonds.




     (2) Limitations. Any change in the Determination Method pursuant to paragraph (1) above
must comply with the following:



18









 






     (i) the effective date of a change (or each effective date in the case of a
change from a Commercial Paper Mode) shall be a Business Day which is at least 20
days (30 days if a Long-Term Interest Rate is then in effect and the effective date
is before the day after the last day of a Long-Term Interest Rate Period) after
receipt by the Trustee of the Company’s Conversion Notice;




     (ii) if a Long-Term Interest Rate is then in effect, the effective date of any
change must be either the day after the last day of the then current Long-Term
Interest Rate Period or, except as described in clause (iii) below, a day on which
the Bonds would otherwise be subject to redemption under the paragraph “Optional
Redemption During Long-Term Interest Rate Period” in paragraph 9 of the Bonds if the
change did not occur;




     (iii) if the Company has previously designated successive Long-Term Interest
Rate Periods, the effective date of each new Long-Term Interest Rate Period must be
the day after the last day on which the Long-Term Interest Rate for the previous
Long-Term Interest Rate Period ceases to accrue;




     (iv) if a Commercial Paper Mode is then in effect, the effective date of any
change must be either the day after the last day of the Commercial Paper Mode or, as
to any Bond, the day after the last day of the Commercial Paper Period then in
effect (or to be in effect) with respect to that Bond;




     (v) if any Bonds have been called for redemption and the redemption has not yet
occurred, the effective date of the change cannot be before such redemption date;




     (vi) if a Long-Term Interest Rate or a Daily Rate is then in effect, the
effective date of any change cannot occur during the period after a Record Date and
to, but not including, the related Interest Payment Date;




     (vii) if a Commercial Paper Mode is then in effect, the Remarketing Agent shall
determine Commercial Paper Periods of such duration that will, in the judgment of
the Remarketing Agent, best promote an orderly transition on the effective date.
After the receipt by the Trustee of the Company’s Conversion Notice, the day after
the last
day of each Commercial Paper Period shall be, with respect to such Bond, not
later than the effective date of the change. The Remarketing Agent shall promptly
give written notice of each such last date and



19









 







each such effective date with respect
to each Bond to the Issuer, the Company and the Trustee;




     (viii) if an Auction Mode Rate is then in effect, the effective date of any
change must be the day after the last day of the Auction Period then in effect;




     (ix) if an Index Rate is then in effect, the effective date of any change must
be the day after the last day of the Index Period then in effect;




     (x) any change in the Auction Period with respect to a Bond in an Auction Rate
Determination Method or in the Index applicable to Bonds in an Index Rate
Determination Method shall be deemed to be a change in the Determination Method for
purposes of this Indenture; and




     (xi) in the event of a conversion to an Auction Rate Determination Method from
Commercial Paper Mode, the effective date of such conversion may not be earlier than
the day following the last day of the longest Commercial Paper Period then in
effect.




     During any such transition period, Bonds bearing interest at a Commercial Paper
Rate shall be governed by the provisions of this Indenture applicable to a
Commercial Paper Mode and Bonds bearing interest at a Daily Rate, Weekly Rate,
Long-Term Interest Rate, Auction Mode Rate or Index Rate, as applicable, shall be
governed by the provisions of this Indenture applicable to such Determination
Methods.




     (c) Calculation of Interest. The Remarketing Agent, and in the case of subparagraph 5
below, the Auction Agent, shall provide the Trustee and the Company with notice in writing
or by other written electronic means or by telephone (any such notice by telephone to be
delivered to a Responsible Officer of the Trustee) promptly confirmed by facsimile
transmission by 12:30 p.m., New York City time,




     (1) on the first Business Day after a month in which interest on the Bonds was
payable at a Daily Rate, of the Daily Rate for each day in such month,




     (2) on each day on which a Weekly Rate becomes effective, of the Weekly Rate,




     (3) on the first day of each Commercial Paper Period, of the length thereof and
the Commercial Paper Rate, and, if there is more



20









 







than one Commercial Paper Rate then
in effect, of the related applicable principal amounts,




     (4) on the first Business Day of a Long-Term Interest Rate Period (other than
the Initial Interest Period), of the Long-Term Interest Rate or Long-Term Interest
Rates set for that period,




     (5) on the first Business Day of each Auction Period, of the Auction Mode Rate
set for that period,




     (6) on each Index Adjustment Date, the Spread,




     (7) on each Index Rate Determination Date during an Index Period, depending on
the applicable Index, the LIBOR Index or BMA Index for such date, and




     (8) on any Business Day preceding any redemption or purchase date, any interest
rate requested by the Trustee in order to enable it to calculate the accrued
interest, if any, due on such redemption or purchase date.



     Using the rates supplied by this notice, the Trustee will calculate the interest payable on
the Bonds in accordance with the applicable interest rate calculation method set forth in the form
of the Bond. The Remarketing Agent or the Auction Agent, as the case may be, will inform the
Trustee and the Company orally at the oral request of either of them of any interest rate so set.
The Trustee will confirm the effective interest rate by telephone or in writing to any Bondholder
who requests it in any manner.



     The setting of the rates by the Remarketing Agent or the Auction Agent, as applicable, the
determination of Commercial Paper Periods by the Remarketing Agent and the calculation of interest
payable on the Bonds by the Trustee as provided in this Indenture will be conclusive and binding on
the Issuer, the Company, the Trustee, and the owners of the Bonds.




     (d) Change in Rate Determination Method-Opinions of Counsel. Notwithstanding any
provision of this Section 2.02, no change shall be made in the Determination Method at the
direction of the Company pursuant to Section 2.02(b)(l) hereof if the Company shall fail to
deliver a Favorable Opinion of Tax Counsel and confirmation thereof if required under
Section 2.02(b)(l). If the Trustee shall have sent any notice to the Bondholders regarding a
change in rate pursuant to Section 3.07(b), then in the event of such failure to deliver
such opinion or confirmation, the Trustee shall promptly notify all Bondholders (i) of such
failure and (ii) that the method of determining interest on the Bonds shall be automatically
converted to the Weekly Rate (without the necessity of complying with the requirements of



21









 







Section 2.02(b)) and the interest rate shall be equal to the BMA Index plus the BMA Margin
or, if the BMA Index is unavailable, the LIBOR Index multiplied by the LIBOR Percentage, or
if the LIBOR Index is unavailable, 90% of the 30-day Treasury rate, until such time as the
Determination Method can be changed in accordance with Section 2.02(b); provided,
however, during an Index Period, if the applicable Index is not available, clause
(iv)(A), (iv)(B) or (iv)(C), as applicable, of Section 2.02(a)(6) shall be effective instead
of this Subsection (d).



     Section 2.03. Changes to and from Auction Mode Rate Determination Method.



     (a) Changes to Auction Mode Rate. At the option of the Company, all of the Bonds may be
converted from another Determination Method to the Auction Mode Rate Determination Method. Any such
conversion shall be made as follows:




     (1) In any such conversion from another Determination Method, the effective date for
the Auction Rate Period shall be a regularly scheduled Interest Payment Date on which
interest is payable for the Interest Period from which the conversion is to be made;




     (2) The Company shall give written notice of any such conversion to the Remarketing
Agent, the Issuer, the Trustee, the Auction Agent, and the Broker-Dealer not less than 20
days prior to the proposed effective date for the change. Such notice shall specify the
information required pursuant to Section 2.02(b)(l) and the length of the Auction Period for
such Auction Rate Period. Together with such notice, the Company shall file with the Issuer
and the Trustee an Opinion of Tax Counsel to the effect that the conversion of the Bonds to
an Auction Mode Rate Determination Method shall not adversely affect the validity of the
Bonds or any exclusion from gross income for federal income tax purposes to which interest
on the Bonds would otherwise be entitled. No such change to an Auction Mode Rate
Determination Method shall become effective unless the Company shall also file, with the
Issuer and the Trustee, an Opinion of Tax Counsel to the same effect dated the effective
date for the Auction Mode Rate.




     (3) At least 15 days prior to the effective date for the Auction Mode Rate, the Trustee
shall mail a written notice of the conversion to the owners of all Bonds to be converted;




     (4) The initial Auction Mode Rate for the Auction Period commencing on the effective
date for the Auction Mode Rate shall be the lowest rate which, in the judgment of the
Broker-Dealer, is necessary to enable the Bonds to be remarketed at a price equal to the
principal amount thereof, plus accrued interest, if any, on the effective date for the
Auction Mode Rate. Such determination shall be conclusive and binding upon the



22









 







Issuer, the
Company, the Trustee, the Auction Agent and the owners of the Bonds to which such rate will
be applicable.




     (5) Not later than 5:00 p.m., New York City time, on the date of determination of the
Auction Mode Rate, the Broker-Dealer shall notify the Trustee and the Company of the Auction
Mode Rate by telephone, promptly confirmed in writing.




     (6) Interest on the Bonds in an Auction Period of 180 days or less will be computed on
the basis of actual days over 360 and in an Auction Period greater than 180 days on the
basis of a 360-day year of twelve 30-day months.




     (7) The Company may revoke its election to effect a conversion of the interest rate on
any Bonds to an Auction Mode Rate by giving written notice of such revocation to the
Trustee, the Remarketing Agent, the Auction Agent and the Broker-Dealer at any time prior to
the setting of the Auction Mode Rate by the Broker-Dealer.




     (8) No Bonds may be converted to the Auction Mode Rate Determination Method when the
Bonds are not held by a Securities Depository.



     (b) Conversions from Auction Mode Rate Determination Method. At the option of the Company, all
of the Bonds may be converted from an Auction Rate Period to another Determination Method. Any such
conversion shall be made as follows:




     (1) The effective date for the new Determination Method shall be the second regularly
scheduled Interest Payment Date following the final Auction Date.




     (2) The Company shall give written notice of any such conversion to the Issuer, the
Trustee, the Remarketing Agent, the Auction Agent and the Broker-Dealer(s) not less than 20
days prior to the proposed effective date for the change. Such notice shall specify the
effective date for the new Determination Method, the Determination Method to which the
conversion will be made and any additional information required pursuant to Section
2.02(b)(l). Together with such notice, the Company shall file with the Issuer and the
Trustee an Opinion of Tax Counsel to the effect that the conversion of the Bonds to be
converted will not adversely affect the validity of the Bonds or any exclusion from gross
income for federal income tax purposes to which interest on the Bonds would otherwise be
entitled. No change to the new Determination Method shall become effective unless the
Company shall also file, with the Issuer and the Trustee, an Opinion of Tax Counsel to the
same effect dated the effective date for the new Determination Method.



23









 






     (3) At least 15 days prior to the effective date for the new Determination Method, the
Trustee shall mail a written notice of the conversion to the owners of all Bonds to be
converted, specifying the effective date for the new Determination Method.




     (4) If on the effective date for the new Determination Method any condition precedent
to such conversion required under this Indenture is not satisfied, the Trustee will give
written notice by first class mail postage prepaid as soon as practicable, and in any event
not later than the next succeeding Business Day, to the Bondholders to have been converted,
that
such conversion has not occurred, that Bonds will not be purchased on the failed
effective date for the new Determination Method, that the Auction Agent will continue to
implement the Auction Procedures on the Auction Dates with respect to such Bonds which
otherwise would have been converted excluding however, the Auction Date falling on the
Business Day next preceding the failed effective date for the new Determination Method, and
that the interest rate will continue to be the Auction Mode Rate; provided, however, that
the interest rate borne by such Bonds during the Auction Period commencing on such failed
effective date for the new Determination Method will be the Maximum Auction Rate, and the
Auction Period will be the seven-day Auction Period.




     (5) On the conversion date applicable to the Bonds to be converted, the Bonds to be
converted shall be subject to mandatory tender at a purchase price equal to 100% of the
principal amount thereof, plus accrued interest. The purchase price of such Bonds so
tendered shall be payable solely from the proceeds of the remarketing of such Bonds. In the
event that the conditions of a conversion are not satisfied, including the failure to
remarket all applicable Bonds on a mandatory tender date, the Bonds to have been converted
will not be subject to mandatory tender, will be returned to their owners, will
automatically convert to a seven-day Auction Period and will bear interest at the Maximum
Auction Rate.



     Section 2.04. Execution and Authentication. The Bonds shall be signed on behalf of the
Issuer with the manual or facsimile signature of its Executive Director or the President of its
Board of Directors and attested by the manual or facsimile signature of its Secretary or Assistant
Secretary, and the seal of the Issuer shall be impressed or imprinted on the Bonds by facsimile or
otherwise. All authorized facsimile signatures shall have the same effect as if manually signed. If
an officer of the Issuer whose signature is on a Bond no longer holds that office at the time the
Trustee authenticates the Bond, the Bond shall nevertheless be valid. Also, if a person signing a
Bond is the proper officer on the actual date of execution, the Bond shall be valid even if that
person is not the proper officer on the nominal date of action.



24









 





     A Bond shall not be valid for any purpose under this Indenture until the Trustee manually
signs the certificate of authentication on the Bond. Such signature shall be conclusive evidence
that the Bond has been authenticated under this Indenture.



     As a precondition to the initial authentication and delivery of the Bonds, the Trustee shall
receive a request and authorization to the Trustee from the Issuer, signed by the Executive
Director or the President of the Board of Directors of the Issuer, to authenticate and deliver the
Bonds to the persons and in the manner therein described.



     Section 2.05. Bond Register. Bonds must be presented at the principal corporate trust
office of the Trustee for
registration of transfer, exchange and, except as otherwise provided herein, payment. The
Trustee shall keep a register of Bonds and of their registration of transfer and exchange, which
register shall be open to inspection by the Issuer and the Company during normal business hours.



     Section 2.06. Registration and Exchange of Bonds; Persons Treated as Owners. Bonds
may be registered as transferred only on the register maintained by the Trustee. Upon surrender for
registration of transfer of any Bond to the Trustee, duly endorsed for transfer or accompanied by
an assignment duly executed by the holder or the holder’s attorney duly authorized in writing, the
Trustee will authenticate a new Bond or Bonds of the same maturity, in an equal total principal
amount and registered in the name of the transferee.



     Bonds may be exchanged for an equal total principal amount of Bonds of the same maturity but
of different authorized denominations. The Trustee will authenticate and deliver Bonds that the
Bondholder making the exchange is entitled to receive, bearing numbers not then outstanding.



     Except in connection with the purchase of Bonds tendered for purchase, the Trustee will not be
required to register the transfer of or to exchange any Bond called for redemption or during the
period beginning 15 days before the mailing of notice calling the Bonds or any portion of the Bonds
for redemption and ending on the redemption date.



     The registered owner of a Bond shall be treated as the absolute owner of the Bond for all
purposes, and payment of principal, interest, premium, if any, or purchase price shall be made only
to or upon the written order of the Bondholder or the Bondholder’s legal representative,
notwithstanding any notice, actual or constructive, to the contrary.



     The Trustee will require the payment by a Bondholder requesting exchange or registration of
transfer of any tax or other governmental charge required to be paid in respect of the exchange or
registration of transfer, but will not impose any other charge.



25









 





     Section 2.07. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds. If any Bond is
mutilated, lost, stolen or destroyed, the Trustee will authenticate a new Bond of the same
denomination with similar terms if any mutilated Bond shall first be surrendered to the Trustee,
and if, in the case of any lost, stolen or destroyed Bond, there shall first be furnished to the
Issuer, the Trustee and the Company evidence of such loss, theft or destruction, together with an
indemnity satisfactory to them. If the Bond has matured or become subject to redemption or tender,
instead of issuing a replacement Bond, the Trustee may with the consent of the Company pay the Bond
or the Company may purchase the Bond without
requiring surrender of the Bond and make such requirements as the Trustee deems fit for its
protection, including a lost instrument bond. The Issuer and the Trustee may charge the Bondholder
their reasonable fees and expenses in this connection.



     If a Bond is tendered for purchase as provided in Article III, or if the holder of a Bond
gives irrevocable instructions to the Remarketing Agent for purchase, and in each case funds are
deposited with the Trustee sufficient for the purchase, the Trustee upon written request of the
Company or the Remarketing Agent will authenticate a new Bond in the same maturity and in the same
denomination registered as the Company or the Remarketing Agent may direct and deliver it to the
Company or upon the Company’s order, whether or not the Bond purchased is ever delivered, and the
undelivered Bonds shall be canceled on the books of the Trustee, whether or not said undelivered
Bonds have been delivered to the Trustee. From and after the purchase date, interest on such Bond
shall cease to be payable to the prior holder thereof, such holder shall cease to be entitled to
the benefits or security of this Indenture and shall have recourse solely to the funds held by the
Trustee for the purchase of such Bond, and the Trustee shall not register any further transfer of
such Bond by such prior holder. All funds held by the Trustee for the purchase of undelivered Bonds
shall be held uninvested.



     Section 2.08. Cancellation of Bonds. Whenever a Bond is delivered to the Trustee for
cancellation (upon payment, redemption, tender or otherwise), or for registration of transfer,
exchange or replacement pursuant to Section 2.06 or Section 2.07, the Trustee will promptly cancel
and dispose of the Bond in accordance with the Trustee’s policy of disposal. The Trustee may, but
shall not be required to, destroy canceled Bonds.



     Section 2.09. Temporary Bonds. Until definitive Bonds are ready for delivery, the
Issuer may execute and the Trustee will authenticate temporary Bonds substantially in the form of
the definitive Bonds, with appropriate variations. The Issuer will, without unreasonable delay,
prepare and the Trustee will authenticate definitive Bonds in exchange for the temporary Bonds.
Such exchange shall be made by the Trustee without charge.



     Section 2.10. Additional Bonds. No additional Bonds shall be issued under this
Indenture. Changing the Determination Method with respect to the Bonds and



26









 







the applicable interest
rate on the Bonds, if permitted under this Indenture, shall not be treated as the issuance of
additional bonds hereunder even if such change is treated as a reissuance for federal income tax
purposes. Notwithstanding the foregoing, the Issuer may, at the request of the Company, issue
additional bonds under separate indentures for other projects operated by the Company, including
projects in Pascagoula, Mississippi, and Gulfport, Mississippi, and no Bondholder consent or
approval thereof shall be required hereunder.



ARTICLE III




REDEMPTION, MANDATORY TENDER AND REMARKETING



     Section 3.01. Notices to Trustee. If the Company wishes that any Bonds be redeemed
pursuant to any optional redemption provision in the Bonds, the Company will notify the Trustee in
writing of the applicable provision, the redemption date, the principal amount of the Bonds to be
redeemed and other necessary particulars in accordance with Section 4.7 of the Agreement.



     Section 3.02. Redemption Dates.



     (a) The redemption date of Bonds to be redeemed pursuant to any optional redemption provision
in the Bonds will be a date permitted by the Bonds and specified by the Company in the notice
delivered pursuant to Section 4.7 of the Agreement. Except as set forth below, the redemption date
for mandatory redemptions will be as specified in the Bonds to be redeemed or determined by the
Trustee consistently with the provisions of the Bonds.



     (b) Upon the occurrence of a Mandatory Redemption Event, the Bonds shall be redeemed, in
whole, or in part if the Trustee and the Issuer receive an Opinion of Tax Counsel to the effect
that the redemption of a specified portion of the Bonds would have the result that interest payable
on the Bonds remaining outstanding after such redemption would be tax-exempt to any holder or
Beneficial Owner of a Bond (other than a holder or Beneficial Owner who is a “substantial user” of
the facilities financed with the proceeds of the Bonds or a “related person” within the meaning of
Section 144(a)(3) of the Code), upon which opinion the Trustee and the Issuer may rely, and in such
event the Bonds will be redeemed (in authorized denominations) in such amount as such Opinion of
Tax Counsel has stated is necessary as to accomplish that result. Such redemption shall take place
upon not less than 30 nor more than 60 days’ notice at a redemption price equal to 100% of the
principal amount plus accrued and unpaid interest to the redemption date. Subject to the notice
requirements set forth herein, the Bonds shall be redeemed on a date within 60 days after the
occurrence of the Mandatory Redemption Event. Any notice of redemption required to be given by the
Trustee in connection with a redemption required by this Section 3.02(b) need not be given



27









 







earlier
than 15 days after the date the Trustee receives notice of a Mandatory Redemption Event pursuant to
this Section 3.02(b).



     Section 3.03. Selection of Bonds to Be Redeemed. Except as provided in the Bonds, if
fewer than all the Bonds are to be redeemed, the Trustee will select the Bonds to be redeemed by
lot or other method it deems fair and appropriate, except that the Trustee will first select any
Bonds owned by the Company or any of
its nominees or held by the Trustee for the account of the Company or any of its nominees. The
Trustee will make the selection from Bonds not previously called for redemption. For this purpose,
the Trustee will consider each Bond in a denomination larger than the minimum denomination
permitted by the Bonds at the time to be separate Bonds each in the minimum denomination.
Provisions of this Indenture that apply to Bonds called for redemption also apply to portions of
Bonds called for redemption.



     Section 3.04. Redemption Notices.



     (a) Official Notice of Redemption. The Trustee will give notice of each redemption as provided
in the Bonds and will at the same time give a copy of the notice to the Remarketing Agent, the
Auction Agent and the Broker-Dealer, as applicable. The notice shall identify the Bonds to be
redeemed and shall state (1) the redemption date (and, if the Bonds provide that accrued interest
will not be paid on the redemption date, the date it will be paid), (2) the redemption price, (3)
that the Bonds called for redemption must be surrendered to collect the redemption price, (4) the
address at which the Bonds must be surrendered and (5) that interest on the Bonds called for
redemption ceases to accrue on the redemption date.



     With respect to an optional redemption of any Bonds under “Optional Redemption During
Long-Term Interest Rate Period,” “Extraordinary Optional Redemption,” “Optional Redemption During
Daily or Weekly Rate Period” or “Optional Redemption During Auction Rate Period” in paragraph 9 of
the form of the Bonds, unless moneys sufficient to pay the principal of, premium, if any, and
interest on the Bonds to be redeemed shall have been received by the Trustee prior to the giving of
such notice of redemption, such notice may state that said redemption shall be conditional upon the
receipt of such moneys by the Trustee on or prior to the date fixed for redemption. If such moneys
are not received, such notice shall be of no force and effect, the Issuer shall not redeem such
Bonds, the redemption price shall not be due and payable and the Trustee shall give notice, in the
same manner in which the notice of redemption was given, that such moneys were not so received and
that such Bonds will not be redeemed.



     Failure to give any required notice of redemption as to any particular Bonds or any defect
therein will not affect the validity of the call for redemption of any Bonds in respect of which no
such failure or defect has occurred. Any notice mailed



28









 







as provided in the Bonds shall be effective
when sent and will be conclusively presumed to have been given whether or not actually received by
any holder.



     (b) Additional Notice of Redemption. In addition to the redemption notice required above,
further notice (the “Additional Redemption Notice”) shall be given by the Trustee as set out below.
No defect in the Additional Redemption Notice nor any failure to give all or any portion of the
Additional Redemption Notice shall in
any manner defeat the effectiveness of a call for redemption if notice is given as prescribed
in paragraph (a) above.




     (1) Each Additional Redemption Notice shall contain the information required in
paragraph (a) above for an official notice of redemption plus (i) the CUSIP numbers of all
Bonds being redeemed; (ii) the date of the Bonds as originally issued; (iii) the
Determination Method for, or the rate of interest borne by each Bond being redeemed; (iv)
the Maturity Date of each Bond being redeemed; and (v) any other descriptive information
needed to identify accurately the Bonds being redeemed.




     (2) Each Additional Redemption Notice shall be sent at least 30 days before the
redemption date by registered or certified mail or overnight delivery service (or by such
other means as the Trustee may have established with the Securities Depository or any
information service) to all registered securities depositories then in the business of
holding substantial amounts of obligations similar to the Bonds (such depositories now being
The Depository Trust Company of New York, New York, and Midwest Securities Trust Company of
Chicago, Illinois) and to one or more national information services that disseminate notices
of redemption of obligations such as the Bonds.



     The information required in any redemption notice (including an Additional Redemption Notice)
pursuant to this Section and the information required in any notice of tender (including an
Additional Tender Notice) may be combined in a single notice if it is sent to Bondholders in the
manner and at the time specified under “Notice of Redemption” in paragraph 9 of the form of the
Bonds.



     Section 3.05. Payment of Bonds Called for Redemption. Upon surrender to the Trustee,
Bonds called for redemption shall be paid as provided in this Article at the redemption price
(including premium, if any) stated in the notice, plus interest accrued to the redemption date, or
at a purchase price as provided in the form of Bond, except that interest payable on Bonds bearing
interest at a Daily Rate will be paid on the fifth Business Day following the redemption date.
Bonds called for redemption and purchased pursuant to a tender before the redemption date will not
be redeemed but will be dealt with as provided below in this Article. Upon the payment of the
redemption price of the Bonds being redeemed, each check or other transfer of funds issued for such
purpose shall bear the CUSIP number identifying,



29









 







by issue and maturity, the Bonds being redeemed
with the proceeds of such check or other transfer.



     Section 3.06. Bonds Redeemed in Part. Subject to Article VI, upon surrender of a Bond
redeemed in part, the Trustee will authenticate for the holder a new Bond or Bonds in authorized
denominations equal in principal amount to the unredeemed portion of the Bond surrendered.



     Section 3.07. Mandatory Tender.



     (a) Mandatory Tender of Bonds. The Bonds are subject to mandatory tender as provided in
paragraph 7 of the form of the Bonds.



     (b) Notice to Bondholders of Change in Interest Rate Determination Method. When a change in
the Determination Method is to be made, or upon commencement of a new Long- Term Interest Rate
Period or a new Index Period immediately after a prior Index Period, the Trustee will, upon notice
from the Company pursuant to Section 2.02(b), notify the affected Bondholders by first class mail
at least 15 days before the effective date of the change or the commencement of a new Long-Term
Interest Rate Period or Index Period, except that (i) such notice shall be given at least 30 days
prior to the effective date if a Long-Term Interest Rate Period is in effect and the effective date
is on or before the end of the Long-Term Interest Rate Period and (ii) no notice shall be given
with respect to a tender under “Mandatory Tender on Each Interest Payment Date During Commercial
Paper Mode” in paragraph 7 of the form of the Bonds. The notice shall be effective when sent and
shall state:




     (1) the purchase date (and, if the Bonds provide that accrued interest will not be paid
on the purchase date, the date it will be paid);




     (2) the purchase price;




     (3) that the Bonds to be tendered must be surrendered to collect the purchase price;




     (4) the address at which or the manner in which the Bonds must be surrendered;




     (5) that interest on the Bonds to be tendered ceases to accrue on the purchase date;




     (6) that the interest rate determination method will be changed and what the new method
will be;




     (7) the proposed effective date of the new rate; and



30









 






     (8) that a mandatory tender will result on the effective date of the change as provided
in the Bonds and that, in the case of a failed conversion (other than as provided in Section
2.04(e) of the Auction Procedures), the interest rate determination method will
automatically be converted to a Weekly Rate Determination Method and the Bonds will continue
to be subject to mandatory tender on such proposed effective date.



     Failure to give any required notice of tender as to any particular Bonds or any defect therein
will not affect the validity of the tender of any Bonds in respect of which no such failure or
defect has occurred. Any notice mailed as provided in the
Bonds shall be effective when sent and will be conclusively presumed to have been given
whether or not actually received by any holder.



     (c) Additional Notice of Tender. In addition to the tender notice required above, further
notice (the “Additional Tender Notice”) shall be given by the Trustee as set out below. No defect
in the Additional Tender Notice nor any failure to give all or any portion of the Additional Tender
Notice shall in any manner defeat the effectiveness of a tender notice if notice is given as
prescribed in paragraph (b) above.




     (1) Each Additional Tender Notice shall contain the information required in paragraph
(c) above for an official notice of tender plus (i) the CUSIP numbers of all Bonds being
tendered; (ii) the date of the Bonds as originally issued; (iii) the maturity date of each
Bond being purchased; and (iv) any other descriptive information needed to identify
accurately the Bonds being purchased.




     (2) Each Additional Tender Notice shall be sent at least 30 days before the purchase
date by registered or certified mail or overnight delivery service (or by such other means
as the Trustee may have established with the Securities Depository or any information
service) to all registered securities depositories then in the business of holding
substantial amounts of obligations similar to the Bonds (such depositories now being The
Depository Trust Company of New York, New York and Midwest Securities Trust Company of
Chicago, Illinois) and to one or more national information services that disseminate notices
of purchase of obligations such as the Bonds.



     The information required in any tender notice (including an Additional Tender Notice) pursuant
to this Section and the information required in any redemption notice (including an Additional
Redemption Notice) may be combined in a single notice if it is sent to Bondholders in the manner
and at the time specified under “Notice of Tender” in paragraph 7 of the form of the Bonds.



31









 





     Section 3.08. Disposition of Purchased Bonds. (a) Bonds to be Remarketed. Bonds
purchased pursuant to tenders as provided in the form of Bonds or as provided in Section 3.07 will
be offered for sale by the Remarketing Agent as provided in this Section except as follows:




     (1) Bonds required to be tendered as described under “Mandatory Tender Upon a Change in
the Determination Method” in paragraph 7 of the form of Bond, which are tendered between the
date notice of mandatory tender is given and the mandatory tender date, may be remarketed
before the mandatory tender date only if the buyer receives a copy of the mandatory tender
notice from the Remarketing Agent; and




     (2) Bonds will not be offered for sale under this Section during the continuance of an
Event of Default under Section 9.01(a), (b), (c) or (d). Bonds will be offered for sale
under this Section 3.08 during an event which with the
passage of time or the giving of notice or both may become an Event of Default only in
the sole discretion of the Remarketing Agent.



     (b) Remarketing Effort. Except to the extent the Company directs the Remarketing Agent not to
do so, the Remarketing Agent will offer for sale and use reasonable efforts to sell all Bonds to be
sold as provided in paragraph (a) above and, when directed by the Company, any Bonds held by the
Company. The sale price of each Bond must be equal to the principal amount of each Bond plus
accrued interest, if any, to the purchase date. The Company may direct the Remarketing Agent from
time to time to cease and to resume sales efforts with respect to some of or all the Bonds. The
Remarketing Agent may buy as principal any Bonds to be offered under this Section 3.08.



     (c) Notices in Respect of Tenders. When the Trustee receives a notice from a Bondholder (or a
Beneficial Owner through its direct Participant) as specified in paragraph 6 of the form of the
Bond for the Bondholder (or a Beneficial Owner through its direct Participant) that Bonds are being
tendered, the Trustee will promptly notify the Remarketing Agent and the Company by facsimile
transmission or telephone, promptly confirmed in writing, of the receipt of such notice, but in no
event later than the following times:




     (i) when the Bonds bear interest at a Daily Rate, no later than 11:15 a.m. (New York
City time) on the same Business Day; and




     (ii) when the Bonds bear interest at a Weekly Rate, no later than 11:15 a.m. (New York
City time) on the Business Day next succeeding receipt of such notice.



32









 





     (d) Delivery of Remarketed Bonds.




     (i) Except when a book-entry system of registration is in effect, the Trustee shall
hold all Bonds delivered pursuant to this Section 3.08 in trust for the benefit of the
owners thereof until moneys representing the purchase price of such Bonds shall have been
delivered to or for the account of or to the order of such Bondholders, and thereafter, if
such Bonds are remarketed, shall deliver replacement Bonds, prepared by the Trustee in
accordance with the directions of the Remarketing Agent and authenticated by the Trustee,
for any Bonds purchased in accordance with the written directions of the Remarketing Agent,
to the Remarketing Agent for delivery to the purchasers thereof.




     (ii) The Remarketing Agent or, in the case of Bonds bearing interest at an Auction Mode
Rate, the Auction Agent, shall advise the Trustee and the Company in writing or by facsimile
transmission of (A) the principal amount of Bonds which have been remarketed, and, (B)
except in the case of Bonds bearing interest at an Auction Mode Rate, the denominations and
registration instructions (including taxpayer identification numbers), in each case, in
accordance with the following schedule (all times of which are New York City time):



	 	 	 

	CURRENT METHOD OF
INTEREST RATE
 DETERMINATION
OR, IN CONNECTION WITH A
CHANGE IN SUCH METHOD, THE
NEW METHOD
 OF INTEREST RATE
DETERMINATION

	 	TIME BY WHICH INFORMATION

TO BE FURNISHED

TO TRUSTEE
	 	 	 
	Commercial Paper Period
	 	12:15 p.m. on the purchase date
	Daily Rate Period
	 	12:15 p.m. on the purchase date
	Weekly Rate Period
	 	12:15 p.m. on the purchase date
	Long-Term Interest Rate Period
	 	12:15 p.m. on the purchase date
	Auction Rate Period
	 	12:15 p.m. on the date of the Auction

	Index Period
	 	12:15 p.m. on the purchase date







     (iii) The terms of any sale by the Remarketing Agent shall provide for the
authorization of the payment of the purchase price by the Remarketing Agent to the Trustee
in exchange for Bonds registered in the name of the new Bondholder which shall be delivered
by the Trustee to the Remarketing Agent at or before 2:00 p.m. (New York City time) on the
purchase date if the purchase price has been received from the Remarketing Agent by the time
set forth in Section 3.08(e) on the purchase date.



     (e) Delivery of Proceeds of Sale. The Remarketing Agent shall deliver directly to the Trustee
an amount equal to the principal amount thereof plus accrued interest, if any, of the Bonds which
the Remarketing Agent has advised the Trustee have been remarketed pursuant to Section 3.08(d)(ii)
no later than 12:30 p.m. (New York City time) on the purchase date.



33









 





     Section 3.09 Purchase of Bonds in Lieu of Redemption. When Bonds are called for
redemption pursuant to “Optional Redemption During Long-Term Interest Rate Period,” “Optional
Redemption During Daily or Weekly Rate Period” or “Optional Redemption During Auction Rate Period”
as provided under paragraph 9 in the form of Bond, the Company may purchase some or all of the
Bonds called for redemption if it (or the Remarketing Agent) gives written notice to the Trustee,
the Remarketing Agent, the Auction Agent and the Broker-Dealer not later than the day before the
redemption date that it wishes to purchase the principal amount of Bonds specified in the notice,
at a purchase price equal to the redemption price. On the date specified as the redemption date,
the Trustee will be furnished sufficient remarketing proceeds (or other funds provided by the
Company) in sufficient time for the Trustee to make the purchase on the redemption date. Any such
purchase of Bonds by the Company shall not be deemed to be a payment or redemption of the Bonds or
any portion thereof and such purchase shall not operate to extinguish or discharge the indebtedness
evidenced by such Bonds.



ARTICLE IV




APPLICATION OF PROCEEDS AND PAYMENT OF BONDS



     Section 4.01. Creation and Deposits to the Project Fund. The Issuer will cause the
proceeds of the sale of the Bonds to be deposited with the Trustee in a segregated trust account as
follows.



          (a) A special fund is hereby created and designated “Mississippi Business Finance Corporation
Gulf Opportunity Zone Industrial Development Revenue Bonds, Series 2006 (Northrop Grumman Ship
Systems, Inc.) Project Fund” (the “Project Fund”) to the credit of which such deposits shall be
made as are required by the provisions of this Indenture. Any moneys received by the Issuer or by
the Trustee as trustee under this Indenture from any source for payment of the Cost of the Project,
including all proceeds of the sale of the Bonds shall be deposited to the credit of the Project
Fund.




          (b) The moneys in the Project Fund shall be held by the Trustee in trust and, subject to the
provisions of Sections 4.05 and 9.02 of this Indenture, shall be applied to the payment of the Cost
of the Project and, pending such application, shall be and are hereby made subject to a lien and
charge in favor of the registered owners of the Bonds issued and outstanding under this Indenture
and for the further security of such owners until paid out or transferred as herein provided.




     Section 4.02. Payments from the Project Fund.



          (a) Payment of the Cost of the Project shall be made from the Project Fund. All payments from
the Project Fund shall be subject to the provisions and restrictions set forth in this Article, and
the Issuer covenants that it will not cause to be paid from the Project Fund any sums except in
accordance with such




34









 







provisions and restrictions. Such payments shall be made by the Trustee upon
receipt of a requisition and certificate, signed by the Company Representative (substantially in
the form of the Requisition and Certificate attached hereto as Exhibit C and hereby deemed
incorporated herein).




          (b) The Trustee is authorized and directed to apply the moneys in the Project Fund in
accordance herewith but only upon receipt of the requisitions required by this Section 4.02, duly
executed by the person and in the manner provided for herein.




     Section 4.03. Trustee May Rely on Requisitions. All requisitions in the form provided
by Section 4.02 hereof and all other statements, orders, certifications and approvals received by
the Trustee, as required by this Article as conditions of payment from the Project Fund, may be
conclusively relied upon by
the Trustee, and shall be retained by the Trustee, subject at all reasonable times to
examination by the Company (so long as the Agreement shall remain in force and effect), the Issuer,
any registered owner and the agents and representatives thereof.



     Section 4.04. Completion Date. The establishment of the Completion Date (as defined
in the Agreement) and the disposition of moneys then held for the credit of the Project Fund shall
be in accordance with Sections 3.5 and 3.6 of the Agreement, respectively.



     Section 4.05. Transfers to the Bond Fund. In the event that the Company should elect
or be required to prepay the Note in its entirety or that the Trustee shall declare the Bonds to be
due and payable pursuant to Section 9.02 hereof, the Trustee shall, without further authorization,
forthwith transfer any balance remaining in the Project Fund to the Bond Fund.



     Section 4.06. Trustee’s Records. The Trustee shall maintain adequate records for a
period of at least three (3) years after the Completion Date pertaining to all disbursements from
the Project Fund.



     Section 4.07. Payment of Bonds. The Trustee will make payments of principal of,
premium, if any, and interest on the Bonds from moneys available to the Trustee under this
Indenture for that purpose. The Trustee will pay the purchase price of tendered Bonds first from
the proceeds of the reoffering of Bonds under Section 3.08 and second from other moneys available
to the Trustee for that purpose; provided, however, that during an Auction Rate Period, payment of
purchase price shall occur pursuant to Section 2.03(b)(5).



     All moneys received as proceeds of remarketing the Bonds under Section 3.08 shall be held
segregated by the Trustee in a separate and segregated trust account. To the extent that the
payment of principal or interest on the Bonds is made from moneys as described in this Section,
such payment shall also satisfy and discharge any payment obligation of the Company under the Note
and the Trustee shall



35









 







promptly notify the Company in writing if such payment requirement has not
been satisfied. If any Bond is redeemed prior to maturity or if the Company surrenders any Bond to
the Trustee for cancellation, the Trustee shall cancel such Bond.



     Section 4.08. Investments of Moneys. The Trustee will invest and reinvest moneys held
by the Trustee as directed in writing by the Company to the extent permitted by law, in:



     (a) Government Obligations;



     (b) Bonds and notes of the Federal Land Bank;



     (c) Obligations of the Federal Intermediate Credit Bank;



     (d) Obligations of the Federal Bank for Cooperatives;



     (e) Bonds and notes of Federal Home Loan Banks;



     (f) Negotiable or non-negotiable certificates of deposit, time deposits or similar banking
arrangements, issued by a bank or trust company (which may be the commercial banking department of
the Trustee or any bank or trust company under common control with the Trustee) or savings and loan
association which are insured by the Federal Deposit Insurance Corporation or secured as to
principal by Government Obligations; or



     (g) Other investments then permitted by applicable Mississippi law.



     The Trustee may make investments permitted by this Article through its own bond department or
the bond department of any bank or trust company under common control with the Trustee. Investments
will be made so as to mature or be subject to redemption at the option of the holder on or before
the date or dates that the Trustee anticipates that moneys from the investments will be required.
The Trustee, when authorized in writing by the Company, may trade with itself in the purchase and
sale of securities for such investment. Investments will be registered in the name of the Trustee
and held by or under the control of the Trustee. Obligations so purchased as an investment of
moneys in any fund or account shall be held by or under the control of the Trustee and shall be
deemed at all times to be a part of such fund or account, and the interest accruing thereon and any
profit realized from such investment shall be credited to such fund or account, and any loss
resulting from such investment shall be charged to such fund or account. The Trustee will sell and
reduce to cash a sufficient amount of investments whenever the cash held by the Trustee is
insufficient. The Trustee shall not be liable for any loss from such investments to the extent
directed in writing by the Company and to the extent such written directions have been complied
with by the Trustee.



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     Section 4.09. Moneys Held in Trust; Unclaimed Funds. The Trustee shall deposit into a
separate and segregated trust account for the benefit of the Bondholders all moneys received by it
for any payment on the Bonds. Money received by the Remarketing Agent or the Trustee from the sale
of a Bond under Section 3.08 or for the purchase of a Bond will be held segregated from other funds
of the Remarketing Agent or the Trustee in trust for the benefit of the Person from whom such Bond
was purchased or the Person delivering such purchase money, as the case may be, and will not be
invested. The Trustee shall promptly, but in no event later than 30 days of their original deposit,
apply moneys received from the Company in accordance with this Indenture and as directed in writing
by the Company.



     Notwithstanding the provisions of the immediately preceding paragraph, any moneys which shall
be set aside by the Trustee or deposited by the Trustee with the paying agents and which shall
remain unclaimed by the holders of such Bonds for a period of six years after the date on which
such Bonds shall have become due and payable shall upon request in writing be paid to the Company
or to such officer, board or body as may then be entitled by law to receive the same, and
thereafter the holders of such Bonds shall look only to the Company or to such officer, board or
body, as the case may be, for payment and then only to the extent of the amount so received without
any interest thereon, and the Trustee, the Issuer and the paying agents shall have no
responsibility with respect to such moneys.



ARTICLE V




REVENUES AND APPLICATION THEREOF



     Section 5.01. Revenues to Be Paid Over to Trustee. The Issuer has pledged and
assigned all payments on account of the Note to be paid directly to the Trustee which amounts shall
be held and administered by the Trustee in the Bond Fund as hereinafter provided. If,
notwithstanding these arrangements, the Issuer receives any payments on account of the Note with
respect to the principal or redemption price of or interest on the Bonds, the Issuer shall
immediately pay over the same to the Trustee to be held under the Bond Fund as hereinafter
provided.



     Section 5.02. The Bond Fund.



     There is hereby established with the Trustee a special fund to be designated “Mississippi
Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds, Series
2006 (Northrop Grumman Ship Systems, Inc.) Bond Fund” (the “Bond Fund”), the moneys in which the
Trustee shall apply to pay (i) the principal or redemption price of Bonds as they mature or become
due, upon surrender thereof, and (ii) the interest on the Bonds as it becomes payable. Money
received by the Trustee from the Company as payments on the Note shall be



37









 







deposited in the Bond
Fund and applied to pay the principal of, premium, if any, and interest on the Bonds.



     Section 5.03. Revenues to Be Held for All Registered Owners: Certain Exceptions.
Revenues shall, until applied as provided in this Indenture, be held by the Trustee in trust for
the benefit of the registered owners of all Outstanding Bonds, except that any portion of the
Revenues representing the principal or redemption price of any Bonds, and interest on any Bonds
previously matured or called for redemption in accordance with Article IX of this Indenture, shall
be held for the benefit of the registered owners of such Bonds only.



ARTICLE VI




BOOK-ENTRY SYSTEM



     Section 6.01. Book-Entry System. The Bonds shall be initially issued in the name of
Cede & Co., as nominee for The Depository Trust Company as the initial Securities Depository and
registered owner of such Bonds, and held in the custody of the Securities Depository. A single
certificate will be issued and delivered to the Securities Depository, or a custodian thereof, for
the Bonds. The Beneficial Owners will not receive physical delivery of Bond certificates except as
provided herein. For so long as the Securities Depository shall continue to serve as securities
depository for such Bonds as provided herein, all transfers of beneficial ownership interests will
be made by book-entry only on the records of the Securities Depository, and no investor or other
party purchasing, selling or otherwise transferring beneficial ownership of such Bonds is to
receive, hold or deliver any Bond certificate. The Issuer, the Company and the Trustee will
recognize the Securities Depository or its nominee as the Bondholder of such Bonds for all
purposes, including payment, notices and voting.



     The Issuer and the Trustee covenant and agree, so long as The Depository Trust Company shall
continue to serve as Securities Depository for the Bonds, to meet the requirements of The
Depository Trust Company with respect to required notices and other provisions of the Letter of
Representations among The Depository Trust Company, the Issuer, the Trustee, the Company and the
Remarketing Agent, executed with respect to the Bonds.



     The Issuer, the Trustee, the Company and the Remarketing Agent may conclusively rely upon (i)
a certificate of the Securities Depository as to the identity of the Participants in the
Book-Entry-System and (ii) a certificate of any such Participant as to the identity of, and the
respective principal amount of Bonds beneficially owned by, the Beneficial Owners.



     Whenever, during the term of the Bonds, the beneficial ownership thereof is determined by a
book-entry at the Securities Depository, the requirements in this Indenture of holding, delivering
or transferring Bonds shall be deemed modified to



38









 







require the appropriate Person to meet the
requirements of the Securities Depository as to registering or registering the transfer of the
book-entry to produce the same effect. Any provision hereof permitting or requiring delivery of
Bonds shall, while the Bonds are in a Book-Entry System, be satisfied by the notation on the books
of the Securities Depository in accordance with applicable law.



     The Trustee and the Issuer, at the written direction and expense of the Company and with the
consent of the Remarketing Agent, may from time to time appoint a successor Securities Depository
and enter into an agreement with such
successor Securities Depository to establish procedures with respect to the Bonds consistent
with current industry practice. Any successor Securities Depository shall be a “clearing agency”
registered under Section 17A of the Securities Exchange Act of 1934, as amended.



     None of the Issuer, the Company, the Trustee, any Broker-Dealer nor the Remarketing Agent will
have any responsibility or obligation to any Securities Depository, any Participants in the
Book-Entry System or the Beneficial Owners with respect to (i) the accuracy of any records
maintained by the Securities Depository or any Participant; (ii) the payment by the Securities
Depository or by any Participant of any amount due to any Beneficial Owner in respect of the
principal amount or redemption or purchase price of, or interest on, any Bonds; (iii) the delivery
of any notice by the Securities Depository or any Participant; (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 Securities Depository or any Participant.



     Bond certificates are required to be delivered to and registered in the name of the Beneficial
Owner, under the following circumstances:




     (a) The Securities Depository determines to discontinue providing its service with
respect to the Bonds and no successor Securities Depository is appointed as described above.
Such a determination may be made at any time by giving 30 days’ written notice to the
Issuer, the Company, the Remarketing Agent and the Trustee and discharging its
responsibilities with respect thereto under applicable law.




     (b) The Company determines not to continue the Book-Entry System through a Securities
Depository.



     The Trustee is hereby authorized to make such changes to the form of bond attached hereto as
Exhibit A which are necessary or appropriate to reflect whether the Book-Entry System is not in
effect, that a successor Securities Depository has been appointed or that an additional or
co-paying agent or tender agent has been designated pursuant to Section 13.03.



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     If at any time, the Securities Depository ceases to hold the Bonds, all references herein to
the Securities Depository shall be of no further force or effect.



ARTICLE VII




COVENANTS



     Section 7.01. Payment of Bonds. The Issuer will promptly pay the principal of,
premium, if any, and interest on, and other amounts due with respect to, the Bonds on the dates and
in the manner provided in the Bonds, but only from the amounts assigned to and held
by the Trustee under this Indenture. Neither the State, nor any political subdivision thereof
(including Mississippi Business Finance Corporation) shall be obligated to pay the principal of the
Bonds, or the premium, if any, or interest thereon or other costs incidental thereto, the same
being payable solely from the revenues and receipts hereinabove referred to. Neither the faith and
credit nor the taxing power of the State or any political subdivision thereof (including the
Issuer) is pledged to the payment of the principal of the Bonds, or the premium, if any, or
interest thereon, or the costs incidental thereto.



     Section 7.02. Performance of Covenants by Issuer. The Issuer covenants that it will
faithfully perform 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 hereto. The Issuer covenants that it is duly authorized
under the Constitution and laws of the State, including particularly and without limitation the
Act, to issue the Bonds authorized hereby and to execute this Indenture, to accept, assign and
pledge the Note and the Agreement and the amounts payable under the Note and to pledge the amounts
hereby pledged in the manner and to the extent herein set forth; that all action on its part
necessary for the issuance of the Bonds and the execution and delivery of this Indenture and the
Agreement 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.



     Section 7.03. Recording and Filing; Further Assurances. The Issuer will execute and
deliver such supplemental indentures and such further instruments, and do such further acts, as the
Trustee may reasonably require for the better assuring, assigning and confirming to the Trustee the
amounts assigned under this Indenture for the payment of the Bonds. The Issuer further covenants
that it will not create or suffer to be created any lien, encumbrance or charge upon its interest
in the Note or the Agreement, if any, except the lien of this Indenture.



     Section 7.04. Tax Covenants. The Issuer covenants that it shall take no action nor
make any investment or use of the proceeds of the Bonds or any other moneys which would cause the
Bonds to be treated as “arbitrage bonds” within the



40









 







meaning of Section 148 of the Code to the
extent that the same may be applicable or proposed to be applicable to the Bonds at the time of
such action, investment or use.



     Notwithstanding any provision of this Indenture to the contrary, the Trustee shall not be
liable or responsible for any calculation or determination which may be required in connection
with, or for the purpose of complying with, Section 148 of the Code, or any successor statute or
any regulation, ruling or other judicial or
administrative interpretation thereof, including, without limitation, the calculation of
amounts required to be paid to the United States of America or the determination of the maximum
amount which may be invested in nonpurpose obligations having a yield higher than the yield on the
Bonds, and the Trustee shall not be liable or responsible for monitoring the compliance by the
Issuer or the Company with any of the requirements of Section 148 of the Code or any applicable
regulation, ruling or other judicial or administrative interpretation thereof; it being
acknowledged and agreed that the sole obligation of the Trustee with respect to the investment of
monies held under any fund or account created hereunder shall be to invest such monies in
accordance with Section 4.08 in each case pursuant to the written instructions received by the
Trustee in accordance with Section 4.08.



     Section 7.05. Rights Under Agreement. The Agreement, a duly executed counterpart of
which has been filed with the Trustee, sets forth the covenants and obligations of the Issuer and
the Company, and reference is hereby made to the same for a detailed statement of said covenants
and obligations of the Company thereunder; and the Issuer agrees that the Trustee in its own name
or in the name of the Issuer may enforce all rights of the Issuer and all obligations of the
Company under and pursuant to the Agreement for and on behalf of the Bondholders, whether or not
the Issuer is in default hereunder.



     Section 7.06. Designation of Additional Paying Agents. The Issuer may cause, with the
consent of the Company, the necessary arrangements to be made through the Trustee and to be
thereafter continued for the designation of additional paying agents and for providing for the
payment of such of the Bonds as shall be presented when due at the corporate trust office of the
Trustee, or its successor in trust hereunder, or at the principal office of said additional paying
agents. All such funds held by said additional paying agents shall be held by each of them in trust
and shall constitute a part of the trust estate and shall be subject to the security interest
created hereby.



     Section 7.07. Existence of Issuer. The Issuer covenants that it will at all times
maintain its corporate existence and will duly procure any necessary renewals and extensions
thereof; will use its best efforts to maintain, preserve and renew all the rights, powers,
privileges and franchises owned by it; and will comply with all valid acts, rules, regulations and
orders of any legislative, executive, judicial or administrative body applicable to the Project.



41









 





ARTICLE VIII




DISCHARGE OF INDENTURE



     Section 8.01. Bonds Deemed Paid; Discharge of Indenture. Any Bond will be deemed paid
for all purposes of this Indenture when (a) payment of the principal of and interest (which, except
for Bonds which bear interest at a Long-Term Interest Rate, shall be calculated at the Maximum
Interest Rate) on the Bond to the due date of such principal and interest (whether at maturity,
upon redemption or otherwise) or the payment of the purchase price either (1) has been made in
accordance with the terms of the Bonds or (2) has been provided for by depositing with the Trustee
in trust (A) moneys in an amount which are sufficient to make such payment and/or (B) Government
Obligations maturing as to principal and interest in such amounts and at such times as will insure,
without any further reinvestment, the availability of sufficient moneys to make such payment, and
(b) all compensation and reasonable expenses of the Trustee pertaining to each Bond in respect of
which such deposit is made have been paid or provided for to the Trustee’s satisfaction. When a
Bond is deemed paid, it will no longer be secured by or entitled to the benefits of this Indenture
or the Guaranty or be an obligation of the Issuer, the Company or the Guarantor, and shall be
payable solely from the moneys or Government Obligations under (a)(2) above, except that such Bond
may be tendered if and as provided in the Bonds and it may be registered as transferred, exchanged,
discharged from registration or replaced as provided in Article II.



     Notwithstanding the foregoing, upon the deposit of funds or Government Obligations under
clause (a)(2) of the first paragraph of this Section 8.01, the purchase price of tendered Bonds
shall be paid from the sale of Bonds under Section 3.08. If payment of such purchase price is not
made from the sale of Bonds pursuant to Section 3.08, payment shall be made from funds (or
Government Obligations) on deposit pursuant to this Section without the need of any further
instruction or direction by the Company, in which case such Bonds shall be surrendered to the
Trustee and canceled.



     Notwithstanding the foregoing, no deposit under clause (a)(2) of the first paragraph of this
Section shall be deemed a payment of a Bond until (1) the Company has furnished the Trustee an
Opinion of Tax Counsel to the effect that the deposit of such cash or Government Obligations will
not cause the Bonds to become “arbitrage bonds” under Section 148 of the Code, (2) the Company has
furnished the Trustee a verification report in form satisfactory to the Trustee, verifying the
mathematical sufficiency of the funds and Government Obligations to pay such Bonds if required by
the Trustee, and (3) (a) notice of redemption of the Bond is given in accordance with Article III
or, if the Bond is not to be redeemed or paid within the next 60 days, until the Company has given
the Trustee, in form satisfactory to the Trustee, irrevocable written instructions (i) to notify,
as soon as
practicable, the owner of the Bond, in accordance with Article III, that the deposit



42









 







required
by (a)(2) above has been made with the Trustee and that the Bond is deemed to be paid under this
Article and stating the maturity or redemption date upon which moneys are to be available for the
payment of the principal of the Bond, and premium, if any, and interest on such Bond, if the Bond
is to be redeemed rather than paid and (ii) to give notice of redemption not less than 30 nor more
than 60 days prior to the redemption date for such Bond, or (b) the maturity of the Bond.



     When all outstanding Bonds are deemed paid under the foregoing provisions of this Section, the
Trustee will upon written request acknowledge the discharge of the lien of this Indenture,
provided, however that the obligations relating to the tender for purchase as provided in the
Bonds, the obligations under Section 8.03 and obligations under Article II in respect of the
registration of transfer, exchange, discharge from registration and replacement of Bonds shall
survive the discharge of the lien of this Indenture.



     Section 8.02. Application of Trust Money. The Trustee shall hold in trust money or
Government Obligations deposited with it pursuant to the preceding Section and shall apply the
deposited money and the money from the Government Obligations in accordance with this Indenture
only to the payment of principal of, premium, if any, and interest on the Bonds and to the payment
of the purchase price of tendered Bonds.



     Section 8.03. Repayment to Company. The Trustee shall promptly pay to the Company
upon written request any excess money or securities held by the Trustee at any time under this
Article and any money held by the Trustee under any provision of this Indenture for the payment of
principal or interest or for the purchase of Bonds that remains unclaimed for six years.



ARTICLE IX




DEFAULTS AND REMEDIES



     Section 9.01. Events of Default. An “Event of Default” is any of the following:



     (a) Default in the payment of any interest on any Bond when due;



     (b) Default in the due and punctual payment of principal on any Bond when due and payable,
whether at maturity, upon redemption or by declaration or otherwise;



     (c) Default in the due and punctual payment of the purchase price of any Bond required to be
purchased in accordance with its terms;



     (d) An event of default has occurred and is continuing under the Agreement; or



43









 





     (e) An event of default has occurred and is continuing under the Guaranty.



     Section 9.02. Acceleration. Upon the occurrence of an Event of Default, the Trustee
may, and upon receipt of the written request of the holders of not less than 51% in aggregate
principal amount of the Bonds then outstanding shall, by notice in writing delivered to the Issuer
and the Company, declare the principal of all Bonds then outstanding and the interest accrued
thereon immediately due and payable; and such principal and interest shall thereupon become and be
immediately due and payable.



     If after the principal of the Bonds and the accrued interest thereon have been so declared to
be due and payable, all arrears of interest and interest on overdue installments of interest (if
lawful) and the principal and premium, if any, on all Bonds then outstanding which shall have
become due and payable otherwise than by acceleration and all other sums payable under this
Indenture or upon the Bonds, except the principal of, and interest on, the Bonds which by such
declaration shall have become due and payable, are paid by the Issuer, and the Issuer also performs
all other things in respect of which it may have been in default hereunder and pays the reasonable
charges of the Trustee, the Bondholders and any trustee appointed under law, including the
Trustee’s reasonable attorneys’ fees, then, and in every such case, the Trustee shall annul such
declaration and its consequences, and such annulment shall be binding upon all holders of Bonds
issued hereunder; but no such annulment shall extend to or affect any subsequent default or impair
any right or remedy consequent thereon. The Trustee shall forward a copy of any such annulment
notice pursuant to this paragraph to the Issuer and the Company.



     Section 9.03. Other Remedies. If an Event of Default occurs and is continuing,
subject to Section 9.06, the Trustee, before or after declaring the principal of the Bonds and the
interest accrued thereon immediately due and payable, may, and upon receipt of the written request
of the holders of not less than 51% in aggregate principal amount of the Bonds then outstanding and
receipt of security and/or indemnity satisfactory to it shall, by notice in writing delivered to
the Issuer and the Company, pursue any available remedy by proceeding at law or in equity available
to the Trustee under the Agreement, the Note or the Guaranty to collect the principal of or
interest on the Bonds or to enforce the performance of any provision of the Bonds, the Note, the
Agreement this Indenture or the Guaranty.



     The Trustee, as the assignee of all the right, title and interest of the Issuer in and to the
Agreement and the Note, may enforce each and every right granted to the Issuer under the Agreement
and the Note. In exercising such rights and the rights given the Trustee under this Article IX, the
Trustee shall take such action as,
in the judgment of the Trustee applying the standards described in Section 10.01 (a), would
best serve the interests of the Bondholders.



44









 





     Section 9.04. Legal Proceeding by Trustee. If any Event of Default has occurred and
is continuing, the Trustee in its discretion may, and upon receipt of the written request of the
holders of not less than 51% in aggregate principal amount of the Bonds then outstanding and
receipt of security and/or indemnity satisfactory to it shall, by notice in writing delivered to
the Issuer and the Company, in its own name:



     (a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights
of the Bondholders, including the right to require the Issuer to enforce any rights under the
Agreement and the Note and to require the Issuer to carry out any other provisions of this
Indenture for the benefit of the Bondholders and to perform its duties under the Act;



     (b) bring suit upon the Bonds;



     (c) bring suit on the Guaranty;



     (d) by action or suit in equity require the Issuer to account as if it were the trustee of an
express trust for the Bondholders; or



     (e) by action or suit in equity enjoin any acts or things which may be unlawful or in
violation of the rights of the Bondholders.



     No remedy conferred upon or reserved to the Trustee or to the Bondholders by the terms of this
Indenture 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 at law or in equity or by statute.



     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 as often as may be deemed expedient.



     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.



     Section 9.05. Appointment of Receivers. Upon the occurrence and continuance of an
Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to
enforce the rights of the Trustee and of the Bondholders under this Indenture, the Trustee shall be
entitled as a matter of right
to the appointment of a receiver or receivers of the trust estate with such powers as the
court making such appointment shall confer.



45









 





     Section 9.06. Waiver of Past Defaults. The holders of a majority in principal amount
of the Bonds then outstanding by written notice to the Trustee may waive an existing Event of
Default and its consequences. When an Event of Default is waived, it is cured and stops continuing,
but no such waiver shall extend to any subsequent or other Event of Default or impair any right
consequent to it.



     Section 9.07. Control by Majority. The holders of a majority in principal amount of
the Bonds then outstanding may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or of exercising any trust or power conferred on it. However,
the Trustee may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 10.01, that the Trustee determines is unduly prejudicial to the rights of other
Bondholders, or would involve the Trustee in personal liability.



     Section 9.08. Limitation on Suits. A Bondholder may not pursue any remedy with
respect to this Indenture or the Bonds unless (a) the holder gives the Trustee notice stating that
an Event of Default is continuing, (b) the holders of at least 51% in principal amount of the Bonds
then outstanding make a written request to the Trustee to pursue the remedy, (c) such holder or
holders offer to the Trustee security and/or indemnity satisfactory to the Trustee against any
loss, liability or expense and (d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security and/or indemnity; it being understood and
intended that no one or more holders of the Bonds shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien of this Indenture by its, his or their action or to enforce
any right hereunder except in the manner herein provided, and that all proceedings at law or in
equity shall be instituted, had and maintained in the manner herein provided and for the equal and
ratable benefit of the holders of all Bonds then outstanding. Nothing in the Indenture contained
shall, however, affect or impair the right of any Bondholder to enforce the payment of the
principal of and premium, if any, and interest on any Bond at and after the maturity thereof, or
the obligation of the Issuer to pay the principal of and premium, if any, and interest on each of
the Bonds issued hereunder to the respective holders thereof at the time and place, from the source
and in the manner in the Bonds expressed.



     A Bondholder may not use this Indenture to prejudice the rights of another Bondholder or to
obtain a preference or priority over the other Bondholders.



     Section 9.09. Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any holder to receive payment of principal of and
interest on a Bond, on or after the due dates expressed in the Bond, or the purchase price of a
Bond on or after the date for its purchase as provided in the Bond, or to bring suit for the
enforcement of any such payment on or after such dates, shall not be impaired or affected without
the consent of the holder.



46









 





     Section 9.10. Collection Suit by Trustee. If an Event of Default under Section
9.01(a), (b) or (c) occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount remaining unpaid.



     Section 9.11. Trustee May File Proofs of Claim. The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee and the Bondholders allowed in any judicial proceedings relative to the Company, its
creditors or its property and, unless prohibited by law or applicable regulations, may vote on
behalf of the holders in any election of a trustee in bankruptcy or other Person performing similar
functions. In the event of a bankruptcy or reorganization of the Company or Northrop Grumman
Corporation, the Trustee may file a proof of claim on behalf of all Bondholders with respect to the
obligations of the Company pursuant to the Agreement and the Note or with respect to the obligation
of Northrop Grumman Corporation pursuant to the Guaranty.



     Section 9.12. Priorities. If the Trustee collects any money pursuant to this Article,
it shall pay out the money in the following order:



     FIRST: To the Trustee for amounts to which it is entitled under Section 10.02.



     SECOND: To Bondholders for amounts due and unpaid on the Bonds for principal and interest,
ratably, without preference or priority of any kind, according to the amounts due and payable on
the Bonds for principal and interest, respectively.



     THIRD: To the Company.


The Trustee may fix a payment date for any payment to the Bondholders.




     Section 9.13. Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a holder pursuant to
Section 9.08 or a suit by holders of more than 10% in principal amount of the Bonds then
outstanding.



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ARTICLE X




TRUSTEE AND REMARKETING AGENT



     Section 10.01. Acceptance of the Trusts. The Trustee hereby accepts the trusts
imposed upon it by this Indenture and the Loan Agreement, and agrees to perform such trusts, but
only upon and subject to the following express terms and conditions:




     (a) The Trustee, prior to the occurrence of any Event of Default and after the curing
or waiver of all Events of Default which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent corporate trustee would exercise or
use under the circumstances in the enforcement of a corporate indenture.




     (b) The Trustee may execute any of the trusts or powers hereof and perform any of its
duties by or through attorneys, agents, receivers or employees selected by it with
reasonable care and the Trustee shall not be responsible for the conduct of such attorneys,
agents, receivers or employees, if selected with reasonable care, and shall be entitled to
advice of counsel concerning all matters relating to the trusts hereof and the duties
hereunder, and may in all cases pay such reasonable compensation to all such attorneys,
agents, receivers and employees as may reasonably be employed in connection with the trusts
hereof. The Trustee may act upon the opinion or advice of any attorney (who may be the
attorney or attorneys for the Issuer or the Company), approved by the Trustee in the
exercise of reasonable care. The Trustee shall not be responsible for any loss or damage
resulting from any action or inaction in good faith in reliance upon such opinion or advice.




     (c) The Trustee shall not be responsible for any recital herein, or in the Bonds
(except in respect to the certificate of the Trustee endorsed on the Bonds), or for the
recording or re-recording, filing or re-filing of this Indenture, or any other instrument
required by this Indenture to secure the Bonds, or for insuring the Project or collecting
any insurance moneys, or for validity of the execution by the Issuer of this Indenture or of
any supplements
hereto or instruments of further assurance, or for the sufficiency of the security for
the Bonds issued hereunder or intended to be secured hereby.




     (d) The Trustee shall not be accountable for the use of any Bonds authenticated or
delivered hereunder. The Trustee may become the owner of Bonds secured hereby with the same
rights which it would have if not the Trustee. To the extent permitted by law, the Trustee
may also receive tenders



48









 







and purchase in good faith Bonds from itself, including any
department, affiliate or subsidiary, with like effect as if it were not the Trustee.




     (e) The Trustee shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram or other paper or document believed by it to
be genuine and correct and to have been signed or sent by the proper Person or Persons. Any
action taken by the Trustee pursuant to this Indenture upon the request or authority or
consent of any Person who at the time of making such request or giving such authority or
consent is the owner of any Bond, shall be conclusive and binding upon all future owners of
the same Bond and upon owners of Bonds issued in exchange therefore or in place thereof.




     (f) As to the existence or non-existence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon
a certificate signed by the Issuer or the Company as sufficient evidence of the facts
therein contained; and prior to the occurrence of a default of which the Trustee has been
notified as provided in subsection (h) of this Section 10.01, or of which by said subsection
it is deemed to have notice, the Trustee shall also be at liberty to accept a similar
certificate to the effect that any particular dealing, transaction or action is necessary or
expedient, but may at its discretion secure such further evidence deemed necessary or
advisable, but shall in no case be bound to secure the same. The Trustee may accept a
certificate of the Secretary or Assistant Secretary of the Issuer under the Issuer’s seal to
the effect that a resolution in the form therein set forth has been adopted by the Issuer as
conclusive evidence that such resolution has been duly adopted, and is in full force and
effect.




     (g) The permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty, and it shall not be answerable for other than its negligence or
willful default.




     (h) The Trustee shall not be required to take notice or be deemed to have notice of any
Event of Default hereunder except failure by the Issuer to cause to be made any of the
payments to the Trustee required to be made by Article IV, unless the Trustee shall be
specifically notified in writing of such Event of Default by the Issuer or by the holders of
at least 25% in aggregate principal amount of Bonds then outstanding; and all notices or
other instruments required by this Indenture to be delivered to the Trustee must, in order
to be effective, be delivered at the principal corporate trust office of the Trustee, and in
the absence of such notice so delivered the Trustee may conclusively assume there is no
default except as aforesaid.



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     (i) At any and all reasonable times the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives shall have the right fully to
inspect any and all parts of the Project, including all books, papers and records of the
Issuer pertaining to the Project and the Bonds and to take such memoranda from and in regard
thereto as may be desired.




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




     (k) Notwithstanding anything elsewhere in this Indenture contained, the Trustee shall
have the right, but shall not be required, to demand, in respect of the authentication of
any Bonds, the withdrawal of any cash, the release of any property or any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions, appraisals or
other information, or corporate action or evidence thereof, in addition to that by the terms
hereof required as a condition of such action by the Trustee, which the Trustee in its
discretion may deem desirable for the purpose of establishing the right of the Issuer to the
authentication of any Bonds, the withdrawal of any cash or the taking of any other action by
the Trustee.




     (l) Before taking any action referred to in Section 9.02, 9.03, 9.04, 9.05, 9.08, 9.09
or 10.04, the Trustee may require that satisfactory security and/or an indemnity bond be
furnished for the reimbursement of all expenses to which it may be put and to protect it
against all liability, except liability which is adjudicated to have resulted from its
negligence or willful default by reason of any action so taken.




     (m) All moneys received by the Trustee or any paying agent shall, until used or applied
or invested as herein provided, be held in trust for the purposes for which they were
received but need not be segregated from other funds except to the extent required herein or
by law. Neither the Trustee nor any paying agent shall be under any liability for interest
on any moneys received hereunder except such as may be mutually agreed upon.




     (n) No provision of the 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.



     Section 10.02. Fees, Charges and Expenses of Trustee. The Trustee 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 Trustee in connection
with such services. Upon an Event of Default,



50









 







but only upon an Event of Default,
the Trustee shall
have a first lien, with right of payment prior to payment on account of principal of and premium,
if any,
and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses
incurred by it.



     Section 10.03. Notice to Bondholders if an Event of Default Occurs. If an Event of
Default occurs of which the Trustee is by Section 10.01(h) required to take notice or if notice of
an Event of Default be given as in Section 10.01(h) provided, then the Trustee shall promptly give
written notice thereof by registered or certified mail to each owner of Bonds then outstanding.



     Section 10.04. Intervention by Trustee. In any judicial proceeding to which the
Issuer is a party and which in the opinion of the Trustee and its counsel has a substantial bearing
on the interests of the owners of the Bonds, the Trustee may intervene on behalf of the Bondholders
and shall do so if requested in writing by the owners of at least 51% of the aggregate principal
amount of Bonds then outstanding. The rights and obligations of the Trustee under this Section
10.04 are subject to the approval of a court of competent jurisdiction.



     Section 10.05. Successor Trustee. Any corporation or association into which the
Trustee may be converted or merged, or with 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
corporation or association resulting from any such conversion, sale, merger, consolidation or
transfer to which it is a party, ipso facto, shall be and become successor Trustee hereunder and
vested with all of the title to the trust estate and all the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the execution or
filing of any instrument or any further act, deed or conveyance on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.



     Section 10.06. Resignation by Trustee. The Trustee and any successor Trustee may at
any time resign from the trusts hereby created by giving thirty days’ written notice to the Issuer
and the Company, served personally or sent by registered or certified mail, and to each owner of
Bonds then outstanding, sent by registered or certified mail, and such resignation shall take
effect at the end of such thirty days, or upon the earlier appointment of a successor Trustee
pursuant to Section 10.08.



     Section 10.07. Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing delivered to (a) the Trustee, the Issuer and the
Company, and signed by the owners of a majority in aggregate principal amount of Bonds then
outstanding, or (b) the Trustee and the owners of the Bonds then
outstanding, and signed by the Issuer and the Company. In addition, provided that no Event of
Default, or event or circumstance which with the passage of time or the giving of notice could
become an Event of Default, has



51









 







occurred and is continuing, the Trustee may be removed at any time
by an instrument or concurrent instruments in writing delivered to the Issuer, the Trustee, the
Remarketing Agent, the Auction Agent, each Broker-Dealer, and the Bondholders and signed by the
Company, such removal to be effective only upon the acceptance of such appointment by a qualified
successor Trustee in accordance with Section 10.08. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice
of removal, the Trustee being removed may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.



     Section 10.08. Appointment of Successor Trustee. In case the Trustee hereunder shall
resign or be removed, or be dissolved, or shall be in 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 officer or officers, or of a receiver appointed by a court, a successor shall be
appointed by the Issuer at the direction of the Company. The Issuer shall cause notice of such
appointment to be given in the same manner as the giving of notices of redemption as set forth in
Section 3.04. If the Issuer fails to make such appointment promptly, a successor may be appointed
by the owners of a majority in aggregate principal amount of Bonds then outstanding. Every such
successor Trustee appointed pursuant to the provisions of this Section 10.08 shall be a trust
company or bank in good standing having a reported capital, surplus and undivided profits of not
less than $75,000,000, if there be such an institution willing, qualified and able to accept the
trusts upon reasonable and customary terms.



     Section 10.09. Concerning Any Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the Issuer an
instrument in writing accepting such appointment hereunder, and thereupon such successor, without
any further act, deed or conveyance, shall become fully vested with all of the estates, properties,
rights, powers, trusts, duties and obligations of its predecessor; but such predecessor shall,
nevertheless, on the written request of the Issuer, or of its successor, execute and deliver an
instrument transferring to such successor Trustee all the estates, properties, rights, powers and
trusts of such predecessor hereunder, and every predecessor Trustee shall deliver all securities
and moneys held by it as Trustee hereunder to its successor. Should any instrument in writing from
the Issuer be required by any successor Trustee for more fully and certainly vesting in such
successor the estate, rights, powers and duties hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged
and delivered by the Issuer. The resignation of any
Trustee and the instrument or instruments removing any Trustee and appointing a successor
hereunder, together with all other instruments provided for in this Article X, shall be filed
and/or recorded by the successor Trustee in each recording office where the Indenture shall have
been filed and/or recorded and the successor Trustee shall bear the cost thereof.



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     Section 10.10. Successor Trustee as Bond Registrar and Paying Agent. In the event of
a change of Trustee, the Trustee which has resigned or been removed shall cease to be bond
registrar and a paying agent for principal of and premium, if any, and interest on the Bonds, and
the successor Trustee shall become such bond registrar and a paying agent.



     Section 10.11. Trustee and Issuer Required to Accept Directions and Actions of
Company. Whenever, after a reasonable request by the Company, the Issuer shall fail, refuse or
neglect to give any written direction to the Trustee or to require the Trustee to take any action
which the Issuer is required to have the Trustee take pursuant to the provisions of the Agreement
or this Indenture, the Company as agent of the Issuer may give any such written direction to the
Trustee or require the Trustee to take any such action, and the Trustee is hereby irrevocably
empowered and directed to accept such written direction from the Company as sufficient for all
purposes of this Indenture. The Company shall have the right as agent of the Issuer to cause the
Trustee to comply with any of the Trustee’s obligations under this Indenture to the same extent
that the Issuer is empowered so to do.



     Certain actions or failures to act by the Issuer under this Indenture may create or result in
an Event of Default under this Indenture and the Company, as agent of the Issuer, may to the extent
permitted by law, perform any and all acts or take such action as may be necessary for and on
behalf of the Issuer to prevent or correct said Event of Default and the Trustee shall take or
accept such performance by the Company as performance by the Issuer in such event.



     The Issuer hereby makes, constitutes and appoints the Company irrevocably as its agent to give
all directions, do all things and perform all acts provided, and to the extent so provided, by this
Section 10.11.



     Section 10.12. No Transfer of Note Held by the Trustee; Exception. Except as required
to effect an assignment to a successor Trustee, the Trustee shall not sell, assign or transfer the
Note, and the Trustee is authorized to enter into an agreement with the Company to such effect.



     Section 10.13. Filing of Certain Continuation Statements. From time
to time, the Trustee shall duly file, or cause to be filed, at the expense of the Company,
continuation statements for the purpose of continuing without lapse the effectiveness of filing of
any financing statements as may be filed contemporaneously with the issuance of the Bonds with
respect to the security interest created by this Indenture in the Agreement and the Note. Upon the
filing of any continuation statement the Trustee shall immediately notify the Issuer and the
Company that the same has been accomplished.



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     Section 10.14. Duties of Remarketing Agent. Except as otherwise described herein, the
Remarketing Agent will set the interest rates on the Bonds and perform the other duties provided
for in Section 2.02 and will remarket the Bonds as provided in Section 3.08, subject to any
provisions of a remarketing agreement between the Company and the Remarketing Agent. The
Remarketing Agent may for its own account or as broker or agent for others deal in Bonds and may do
anything any other Bondholder may do to the same extent as if the Remarketing Agent were not
serving as such.



     Section 10.15. Eligibility of Remarketing Agent. Unless a notice of redemption with
respect to the Bonds has theretofore been issued by the Trustee pursuant to Section 3.04, upon any
change in the Determination Method, the Company shall appoint a Remarketing Agent in sufficient
time for such Remarketing Agent to establish the interest rate for such succeeding Interest Rate
Period. The Company will give prompt written notice of such appointment to the Issuer and the
Trustee. The Remarketing Agent will 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 or any
state or the District of Columbia, will have a combined capital stock, surplus and undivided
profits of at least $15,000,000 as shown in its most recent published annual report, will be a
Participant in the Securities Depository and will be authorized by law to perform all the duties
imposed upon it by this Indenture. Any Remarketing Agent shall be rated at least Baa 3/P-3 or
otherwise qualified by Moody’s Investors Service, Inc. or have an equivalent rating of another
rating agency.



     Section 10.16. Replacement of Remarketing Agent. The Remarketing Agent may resign by
notifying the Issuer, the Trustee and the Company in writing. Such resignation will take effect on
the day a successor Remarketing Agent appointed in accordance with this Section 10.16 has accepted
the appointment or, if no successor has so accepted, 30 days after notice of resignation has been
sent. The Company may remove the Remarketing Agent at any time by an instrument signed by the
Company and filed with the Remarketing Agent, the Issuer and the Trustee at least 30 days prior to
the effective date of such removal (which will not in any event occur prior to the appointment of a
successor Remarketing Agent). A new
Remarketing Agent may be appointed by the Company upon the resignation or removal of the
Remarketing Agent. The Trustee shall promptly notify the Bondholders of any change in the
Remarketing Agent.



     Section 10.17. Compensation of Remarketing Agent. The Remarketing Agent will not be
entitled to any compensation from the Issuer or the Trustee or to any property held under this
Indenture but must make separate arrangements with the Company for compensation.



     Section 10.18. Successor Remarketing Agent. If the Remarketing Agent consolidates
with, merges or converts into, or transfers all or substantially all its



54









 







assets (or, in the case of
a bank or trust company, its corporate trust assets) to another corporation, the resulting,
surviving or transferee corporation without any further act shall be the successor Remarketing
Agent, provided that such successor shall be eligible under the applicable provisions in this
Article.



     Section 10.19. Inapplicability of Remarketing Agent. The provisions of this Indenture
relating to the Remarketing Agent, including, but not limited to, Sections 10.14, 10.15, 10.16,
10.17 and 10.18, shall not apply when the Bonds are in an Auction Rate Period.



ARTICLE XI




AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE



     Section 11.01. Without Consent of Bondholders. The Issuer and the Trustee may amend
or supplement this Indenture or the Bonds without notice to or consent of any Bondholder:




     (a) to cure any ambiguity, inconsistency, formal defect or omission;




     (b) to grant to the Trustee for the benefit of the Bondholders additional rights,
remedies, powers or authority;




     (c) to subject to this Indenture additional collateral or to add other agreements of
the Issuer;




     (d) to modify this Indenture or the Bonds to permit qualification under the Trust
Indenture Act of 1939, as amended, or any similar federal statute at the time in effect, or
to permit the qualification of the Bonds for sale under the securities laws of any state of
the United States;




     (e) to authorize different authorized denominations of the Bonds and to make
correlative amendments and modifications to this Indenture regarding exchangeability of
Bonds of different authorized denominations, redemptions of portions of Bonds of particular
authorized denominations and similar amendments and modifications of a technical nature;




     (f) to increase or decrease the number of days specified for the giving of notices in
Section 3.07 and to make corresponding changes to the period for notice of redemption of the
Bonds; provided that no decreases in any such number of days shall become effective except
while the Bonds bear interest at a Daily Rate or a Weekly Rate and until 30 days after the
Trustee has given notice to the owners of the Bonds;



55









 






     (g) to provide for an uncertificated system of registering the Bonds or to provide for
the change to or from a Book-Entry System for the Bonds;




     (h) to evidence the succession of a new Trustee or the appointment by the Trustee or
the Issuer of a co-trustee;




     (i) to make any change (including a change in Section 7.04 to reflect any amendment to
the Code or interpretations by the Internal Revenue Service of the Code) that does not
materially adversely affect the rights of any Bondholder, or




     (j) to make any other changes to this Indenture that take effect as to any or all
remarketed Bonds following a mandatory tender provided that the Issuer and the Trustee
receive a Favorable Opinion of Tax Counsel with respect to such changes before such changes
take effect.



     Section 11.02. With Consent of Bondholders. If an amendment of or supplement to this
Indenture or the Bonds without any consent of Bondholders is not permitted by the preceding
Section, the Issuer and the Trustee may enter into such amendment or supplement without prior
notice to any Bondholders but with the consent of the holders of at least a majority in aggregate
principal amount of the Bonds then outstanding. However, without the consent of each Bondholder
affected thereby, no amendment or supplement may (a) extend the maturity of the principal of, or
interest on, any Bond, (b) reduce the principal amount of, or rate of interest on, any Bond, (c)
effect a privilege or priority of any Bond or Bonds over any other Bond or Bonds, (d) reduce the
percentage of the principal amount of the Bonds required for consent to such amendment or
supplement, (e) impair the exclusion from federal gross income of interest on any Bond, (f)
eliminate the holders’ rights to tender the Bonds, or any mandatory redemption of the Bonds, extend
the due date for the purchase of Bonds tendered by the holders thereof or call for mandatory
redemption or reduce the purchase or redemption price of such Bonds, (g) create a lien ranking
prior to or on a parity with the lien of this Indenture on the property described in the Granting
Clause of this Indenture or (h) deprive any Bondholder of the lien created by this Indenture
on such property. In addition, if moneys or Government Obligations have been deposited or set aside
with the Trustee pursuant to Article VIII for the payment of Bonds and those Bonds shall not have
in fact been actually paid in full, no amendment to the provisions of that Article shall be made
without the consent of the holder of each of those Bonds affected.



     Section 11.03. Effect of Consents. Any consent received pursuant to Section 11.02
will bind each Bondholder delivering such consent and each subsequent holder of a Bond or portion
of a Bond evidencing the same debt as the consenting holder’s Bond.



56









 





     Section 11.04. Notation on or Exchange of Bonds. If an amendment or supplement
changes the terms of a Bond, the Trustee may require the holder to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Bond about the changed terms and return it to the
holder. Alternatively, if the Trustee, the Issuer and the Company determine, the Issuer in exchange
for the Bond will issue and the Trustee will authenticate a new Bond that reflects the changed
terms.



     Section 11.05. Signing by Trustee of Amendments and Supplements. The Trustee will
sign any amendment or supplement to the Indenture or the Bonds authorized by this Article if the
amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may, but need not, sign it. In signing an amendment or
supplement, the Trustee will be entitled to receive and (subject to Section 10.01) will be fully
protected in relying on an Opinion of Counsel stating that such amendment or supplement is
authorized by this Indenture.



     Section 11.06. Company Consent Required. An amendment or supplement to the Indenture,
the Loan Agreement, the Note or the Bonds shall not become effective unless the Company and the
Guarantor delivers to the Trustee their written consent to the amendment or supplement.



     Section 11.07. Notice to Bondholders. The Trustee shall cause notice of the execution
of each supplement or amendment to this Indenture or the Agreement to be mailed to the Bondholders.
The notice will, at the option of the Trustee, either (i) briefly state the nature of the amendment
or supplement and that copies of it are on file with the Trustee for inspection by Bondholders or
(ii) enclose a copy of such amendment or supplement.



ARTICLE XII




AMENDMENTS OF AND SUPPLEMENTS TO THE AGREEMENT



     Section 12.01. Without Consent of Bondholders. The Issuer may enter into, and the
Trustee may consent to, any amendment of or supplement to the Agreement or the Note, or the Trustee
may amend the Guaranty or may waive compliance by the Company of any provision of the Agreement,
the Note or the Guaranty, in each case without prior notice to or consent of any Bondholder, if the
amendment, supplement or waiver is required or permitted (a) by the provisions of the Agreement or
this Indenture, (b) to cure any ambiguity, inconsistency, formal defect or omission, (c) to
identify more precisely the Project, (d) in connection with any authorized amendment of or
supplement to this Indenture or (e) to make any change that, in the judgment of the Trustee in
reliance upon an Opinion of Counsel, does not materially adversely affect the rights of any
Bondholder.



57









 





     Section 12.02. With Consent of Bondholders. If an amendment of or supplement to the
Agreement, the Note or the Guaranty without any consent of Bondholders is not permitted by Section
12.01, the Issuer may enter into, and/or the Trustee may enter into or consent to (as the case may
be), such amendment or supplement, or may waive compliance by the Company of any provision of the
Agreement, without prior notice to any Bondholder but (a) with the consent of the holders of at
least a majority in aggregate principal amount of the Bonds then outstanding with respect to an
amendment of or supplement to or waiver of a provision with respect to the Agreement or the Note
and (b) with the consent of the holders of 100% in aggregate principal amount of Bonds then
outstanding with respect to an amendment, supplement or waiver of the Guaranty not permitted by
Section 12.01. However, without the consent of each Bondholder affected thereby, no amendment,
supplement or waiver may result in anything described in the lettered clauses of Section 11.02.



     Section 12.03. Consents by Trustee to Amendments or Supplements. The Trustee will
consent to any amendment or supplement to the Agreement, the Note or the Guaranty authorized by
this Article XII if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In
signing a consent to an amendment or supplement to the Agreement or the Note or amending the
Guaranty, the Trustee shall be entitled to receive and (subject to Section 10.01) shall be fully
protected in relying on an Opinion of Counsel stating that such amendment or supplement is
authorized or permitted by this Indenture.



ARTICLE XIII




MISCELLANEOUS



     Section 13.01. Notices.




     (a) Any notice, request, direction, designation, consent, acknowledgment,
certification, appointment, waiver or other communication required or permitted by this
Indenture or the Bonds must be in writing except as expressly provided otherwise in this
Indenture or the Bonds.




     (b) Any notice or other communication shall be sufficiently given and deemed given when
delivered by hand or mailed by first-class mail, postage prepaid, addressed as follows: if
to the Issuer, 735 Riverside Dr., Suite 300, Jackson, Mississippi 39202; if to the Trustee,
to The Bank of New York Trust Company, N.A., 505 North 20th Street, Suite 950,
Birmingham, Alabama 35203; if to the Company, at 1840 Century Park East, Los Angeles,
California 90067, Attention: Treasurer, Mark Rabinowitz; if to the Auction Agent, to the
address specified at the time of acceptance of its duties; if to the Broker-Dealer, to the
address specified at the time of acceptance of its duties;



58









 







and if to the Remarketing Agent,
to the address specified at the time of acceptance of its duties. Any addressee may
designate additional or different addresses for purposes of this Section.




     (c) A duplicate copy of each notice, certificate or other communication given hereunder
by the Issuer, the Company or the Trustee shall also be given to the Guarantor.



     Section 13.02. Bondholders’ Consent. Any consent or other instrument required by this
Indenture to be signed by Bondholders may be in any number of concurrent documents and may be
signed by a Bondholder or by the holder’s agent appointed in writing. Proof of the execution of
such instrument or of the instrument appointing an agent and of the ownership of Bonds, if made in
the following manner, shall be conclusive for any purposes of this Indenture with regard to any
action taken by the Trustee under the instrument:




     (a) The fact and date of a Person’s signing an instrument may be proved by the
certificate of any officer in any jurisdiction who by law has power to take acknowledgments
within that jurisdiction that the Person signing the writing acknowledged before the officer
the execution of the writing, or by an affidavit of any witness to the signing.




     (b) The fact of ownership of Bonds, the amount or amounts, numbers and other
identification of such Bonds and the date of holding shall be proved by the registration
books kept pursuant to this Indenture.



     In determining whether the holders of the required principal amount of Bonds outstanding have
taken any action under this Indenture, Bonds owned by the Company or any Person controlling,
controlled by or under common control with the Company shall be disregarded and deemed not to be
outstanding unless all of the Bonds are so owned. In determining whether the Trustee shall be
protected in relying on any such action, only Bonds which the Trustee actually knows to be so owned
shall be disregarded.



     Any consent or other instrument shall be irrevocable and shall bind any subsequent owner of
such Bond or any Bond delivered in substitution therefore.



     Section 13.03. Appointment of Separate Paying Agent and/or Tender Agent. If, at any
time, the Securities Depository ceases to hold the Bonds, with the effect that the Bonds are no
longer subject to the Book-Entry System, then the Issuer and the Trustee, acting at the written
request of the Company, may appoint one or more banks or trust companies to act as paying agent
and/or tender agent for the Bonds hereunder. Any such paying agent or tender agent shall be a bank
or trust company organized under the laws of the United States of America or any state thereof,
shall have a reported capital and surplus of at least $100,000,000 and a corporate trust office
located in New York, New York at which Bonds may be presented for payment



59









 







or purchase and shall
perform such duties and responsibilities as may be delegated to it hereunder. If such a paying
agent or tender agent is appointed, then all references herein to the “Trustee” shall include such
paying agent or tender agent to the extent of the duties performed by such entity.



     Section 13.04. Limitation of Rights. Nothing expressed or implied in this Indenture
or the Bonds shall give any Person other than the Trustee, the Issuer, the Company, the Remarketing
Agent, the Auction Agent and the Bondholders any right, remedy or claim under or with respect to
this Indenture.



     Section 13.05. Severability. If any provision of this Indenture shall be held or
deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect
any other provision or provisions herein contained or render the same invalid, inoperative or
unenforceable to any extent whatsoever.



     Section 13.06. Payments Due on Non-Business Days. If a payment date is not a Business
Day at the place of payment, then payment may be made at that place on the next Business Day, and
no interest shall accrue for the intervening period.



     Section 13.07. Governing Law. This Indenture shall be governed exclusively by and
construed in accordance with the applicable laws of the State.



     Section 13.08. Captions. The captions in this Indenture are for convenience only and
do not define or limit the scope or intent of any provisions or Sections of this Indenture.



     Section 13.09. No Liability of Officers. No covenant or agreement contained in the
Bonds or this Indenture shall be deemed to be a covenant or agreement of any commissioner, agent or
employee of the Issuer in his individual capacity, and neither the officers of the Issuer nor any
official executing the Bonds or this Indenture shall be liable personally on the Bonds or be
subject to any personal liability or accountability by reason of the issuance of the Bonds or the
execution and delivery of this Indenture.



     Section 13.10. Counterparts. This Indenture may be signed in several counterparts.
Each will be an original, but all of them together constitute the same instrument.



60









 





     IN WITNESS WHEREOF, the MISSISSIPPI BUSINESS FINANCE CORPORATION has caused these presents to
be signed in its name and behalf and its official seal to be hereunto affixed and attested by its
duly authorized officers, and to evidence its acceptance of the trusts hereby created The Bank of
New York Trust Company, N.A., as Trustee, has caused these presents to be signed in its name and
behalf and its official seal to be hereunto affixed and attested by its duly authorized officers,
all as of the day and year first above written.



	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	MISSISSIPPI BUSINESS FINANCE 

CORPORATION	 	 
	[SEAL]	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Executive Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Secretary	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	THE BANK OF NEW YORK TRUST 

COMPANY, N.A., as Trustee	 	 
	[SEAL]	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 










 









 








	 	 	 	 	 	 	 

	STATE OF MISSISSIPPI

	 	 	)	 	 	 
	 

	 	 	)	 	 	SS:
	COUNTY OF HINDS

	 	 	)	 	 	 






     I, the undersigned Notary Public, certify that CINDY CARTER personally came before me this day
and acknowledged that she is the Secretary of Mississippi Business Finance Corporation, and that by
authority duly given and as the act of said Mississippi Business Finance Corporation, the foregoing
instrument was signed in its name by William T. Barry, its Executive Director, sealed with its
official seal, and attested by her/him as its Secretary.



     WITNESS my hand and official seal, this the __th day of December, 2006.



	 	 	 	 	 

	 

	 	 

Notary Public

	 	 
	 
	 	 	 	 
	My Commission expires:
	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	(Notary Seal)
	 	 	 	 











 









 








	 	 	 	 	 	 	 

	STATE OF                     

	 	 	)	 	 	 
	 

	 	 	)	 	 	SS:
	COUNTY OF                     

	 	 	)	 	 	 






     I, the undersigned Notary Public, certify that                      personally came before me this
day and acknowledged that he/she is the Trust Officer of The Bank of New York Trust Company, N.A.,
a national banking association, and that by authority duly given and as the act of said banking
association, the foregoing instrument was signed in its name by                      and sealed with its
corporate seal.



     WITNESS my hand and official seal, this the __th day of December, 2006.



	 	 	 	 	 

	 

	 	 

Notary Public

	 	 
	 
	 	 	 	 
	My Commission expires:
	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	(Notary Seal)
	 	 	 	 











 









 








EXHIBIT A

Form of Bond




UNITED STATES OF AMERICA



STATE OF MISSISSIPPI



			
	 	 	 
	No.                    
	 	$200,000,000






Mississippi Business Finance Corporation

Gulf Opportunity Zone Industrial development Revenue Bond

(Northrop Grumman Ship Systems, Inc. Project)

series 2006




					
	 	 	 	 	 
	MATURITY DATE
	 	DATED DATE
	 	CUSIP
	 	 	 	 	 
	December 1, 2028	 	 	 	 






REGISTERED OWNER: CEDE & CO.




PRINCIPAL AMOUNT: $200,000,000




     Mississippi Business Finance Corporation (the “Issuer”), a public body corporate and politic,
created, activated and validly existing under the laws of the State of Mississippi, for value
received, hereby promises to pay, solely from the sources described in this Bond, to the Registered
Owner identified above, or registered assigns, on the Maturity Date stated above (or if this Bond
is called for earlier redemption as described herein, on the redemption date) the principal amount
identified above and to pay interest as provided in this Bond.



     1. Indenture; Agreement. This Bond is one of the bonds (the “Bonds”), limited to $200,000,000
in principal amount, issued under the Trust Indenture dated as of December 1, 2006 (the
“Indenture”), between the Issuer and The Bank of New York Trust Company, N.A., as trustee (the
“Trustee”). The terms of the Bonds include those in the Indenture and those contained herein.
Bondholders are referred to the Indenture for a statement of certain of those terms. When used with
reference to the Bonds, the term “principal” includes any premium payable on those



A-1









 




Bonds. Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Indenture.




     The Issuer has entered into a Loan Agreement dated as of December 1, 2006 (the “Agreement”)
with Northrop Grumman Ship Systems, Inc., a Delaware corporation (the “Company”). Under the
Agreement, the Issuer has loaned the proceeds of the Bonds of this series to the Company (the
“Loan”). In order to evidence the Loan and the Company’s obligation to repay the same, the Company
has executed and delivered its non-negotiable promissory note (the “Note”). The Note provides for
the repayment by the Company of the Loan, including interest thereon, in installments sufficient to
pay (i) the principal of, and premium, if any, and interest on the Bonds as the same shall become
due and payable, and (ii) the purchase price of certain tendered Bonds as required under the
Indenture. The Note provides that the payments thereunder shall be paid directly to the Trustee as
assignee of the Issuer. The Issuer has assigned its rights to such payments under the Agreement and
the Note to the Trustee as security for the Bonds. The proceeds of the Bonds are to be used to pay
or reimburse the Company for costs incurred in constructing, reconstructing or renovating certain
ship manufacturing/repair facilities located in Gulfport and Pascagoula, Mississippi (the
“Project”) as more fully described in the Agreement. Northrop Grumman Corporation, a Delaware
Corporation, has entered into a Guaranty Agreement dated as of December 1, 2006 (the “Guaranty”)
with the Trustee pursuant to which Northrop Grumman Corporation guaranties the full payment of the
Bonds.



     The Indenture, the Agreement and the Note may be amended or supplemented as provided by their
terms, and references to them include any amendments or supplements.



     The Issuer has established a book-entry only system of registration for the Bonds (the
“Book-Entry System “). Except as specifically provided otherwise in the Indenture, a Securities
Depository (or its nominee) will be the registered owner of this Bond. By acceptance of a
confirmation of purchase, delivery or transfer, the Beneficial Owner (if any) of this Bond shall be
deemed to have agreed to this arrangement. If the Securities Depository (or its nominee) is the
registered owner of this Bond, it shall be treated as the owner of it for all purposes.



     2. Source of Payments. The principal of, premium, if any, and interest on, and any other
amounts due with respect to, the Bonds are limited special obligations of the Issuer and, as
provided in the Indenture, are payable solely and only from payments derived from the Agreement,
the Note, the Guaranty and any other moneys held by the Trustee under the Indenture for such
purpose. The Bonds are issued pursuant to and in full compliance with the Constitution and laws of
the State of Mississippi, particularly Title 57, Chapter 10, Articles 7 and 11, Mississippi Code of
1972, as amended, and pursuant to resolutions adopted by the Issuer on March 14, 2006, September
20, 2006 and November 15, 2006, which resolutions



A-2









 







authorize the execution and delivery of the
Bonds, the Agreement and the
Indenture. The Bonds and premium, if any, and interest thereon and other amounts due with
respect to the Bonds shall not be deemed to constitute a debt or general obligation or a pledge of
the faith and credit of the State of Mississippi or any political subdivision thereof, including
the Mississippi Business Finance Corporation. Neither the State of Mississippi nor any political
subdivision thereof nor the Issuer shall be obligated to pay the principal of the Bonds or premium,
if any, or interest thereon or other amounts due with respect thereto except from the revenues and
receipts pledged therefore, and neither the faith and credit nor the taxing power of the State of
Mississippi or any political subdivision thereof is pledged to the payment of such amounts.
Payments under the Note sufficient for the prompt payment when due of the principal of and premium,
if any, and interest on the Bonds are to be paid to the Trustee by the Company for the account of
the Issuer and deposited in a special trust account created by the Issuer and have been duly
pledged and assigned for that purpose. In addition, substantially all other rights of the Issuer
under the Agreement have also been assigned to the Trustee to secure payment of amounts due on the
Bonds.



     3. Interest Rate. Interest on this Bond will be paid at the lesser of (a) a Daily Rate, a
Weekly Rate, a Commercial Paper Rate, a Long-Term Interest Rate, an Auction Mode Rate or an Index
Rate as selected by the Company and as determined in accordance with the Indenture or (b) 13%.
Interest will be payable during the Initial Interest Period at a Long-Term Rate of 4.55% per annum,
and the first Interest Payment Date (as hereinafter defined) will be June 1, 2007. On or after
December 1, 2016, the Company may change the Determination Method from time to time. A change in
the Determination Method will result in mandatory tender of the Bonds (see “Mandatory Tender for
Purchase“ below). While there exists an Event of Default under the Indenture, the interest rate on
the Bonds will be the rate on the Bonds on the day before the Event of Default occurred, except
that if interest on any Bond was then payable at a Commercial Paper Rate, the interest rate for all
Bonds then bearing interest at a Commercial Paper Rate will be the highest Commercial Paper Rate
then in effect for any Bond.



     When interest is payable at a Daily Rate, Weekly Rate, Commercial Paper Rate or Index Rate, it
will be computed on the basis of the actual number of days elapsed over a year of 365 days (366
days in leap years), when payable at an Auction Mode Rate, on the basis of actual days over 360
(during Auction Periods of 180 days or less) and on the basis of a 360-day year of twelve 30-day
months (during Auction Periods greater than 180 days), and when payable at a Long-Term Interest
Rate, on the basis of a 360-day year of twelve 30-day months. Interest on overdue principal and, to
the extent lawful, on overdue premium and interest will be payable at the rate on the Bonds on the
day before the default occurred.



     4. Interest Payment and Record Dates. Interest will accrue on the unpaid portion of the
principal of this Bond from the Dated Date stated above and



A-3









 







thereafter from the Interest Payment
Date (as hereinafter defined) next succeeding
the date of authentication hereof to which interest has been paid or duly provided for, unless
the date of authentication hereof is an Interest Payment Date to which interest has been paid or
duly provided for, in which case from the date of authentication hereof, or unless no interest has
been paid or duly provided for on the Bonds of this series, in which case from the Dated Date;
provided, however, that if the date of authentication is between the Record Date (as hereinafter
defined) for any Interest Payment Date and such Interest Payment Date, then interest will accrue
from such Interest Payment Date or, if the Company shall default in payment of the interest due on
such Interest Payment Date, then from the next preceding Interest Payment Date to which interest
has been paid or duly provided for, or if no interest has been paid or duly provided for, then from
the Dated Date.



     When interest is payable at the rate in the first column below, interest accrued during the
period (an “Interest Period”) shown in the second column will be paid on the date (an “Interest
Payment Date”) in the third column to holders of record on the date (a “Record Date”) in the fourth
column:



A-4









 





	 	 	 	 	 	 	 
	 	 	 	 	INTEREST PAYMENT	 	 
	RATE	 	INTEREST PERIOD	 	DATE	 	RECORD DATE
	Daily*

	 	Calendar month
	 	Fifth Business Day of
the next month
	 	Last Business Day
of the month
	 
	 	 	 	 	 	 
	Weekly*

	 	Calendar month
	 	First Business Day of
the next month
	 	Last Business Day
before Interest
Payment Date
	 
	 	 	 	 	 	 
	Commercial Paper

	 	From 1 to 270 days
as determined for
each Bond pursuant
to the Indenture
(“Commercial Paper
Period”)
	 	Day after the last
day of Commercial
Paper Period
	 	Last Business Day
before Interest
Payment Date
	 
	 	 	 	 	 	 
	Long-Term+

	 	Six month period or
portion thereof
ending the last day
of May or November
	 	June 1 and December
1; beginning June 1,
2007
	 	Fifteenth of the
month before the
Interest Payment
Date (May 15 and
November
15)***
	 
	 	 	 	 	 	 
	Auction Mode

	 	From 1 to 365 days
as determined for
each Bond pursuant
to the Indenture
	 	The Business Day
immediately following
each Auction Period,
and, in addition, for
an Auction Period of
more than 91 days,
each 13th Thursday
after the first day
of such Auction
Period****
	 	The second Business
Day preceding an
Interest Payment
Date therefore
	 
	 	 	 	 	 	 
	Index

	 	Calendar Month
	 	First Business Day of
the next month
	 	Last Business Day
before Interest
Payment Date








 




			
	*	 	If there shall be a change from a Daily Rate
or a Weekly Rate on a day other than the first day of a calendar month, the
then current Interest Period relating to such Daily Rate or Weekly Rate shall
end on the day immediately preceding the date on which the new interest rate on
the Bonds shall become effective, which date in the case of a change from a
Weekly Rate, shall be the Interest Payment Date for such Interest Period, for
which the Record Date shall be the immediately preceding Business Day; but in
the case of a change from a Daily Rate, the Interest Payment Date for such
Interest Period shall be the fifth Business Day after the last day of such
Interest Period, for which the Record Date shall be the last Business Day of
such Interest Period. If such new interest rate shall be a Daily Rate or a
Weekly Rate, the first Interest Period relating thereto shall begin on the
effective date of such new interest rate and end on the last day of the then
current calendar month, for which the Interest Payment Date and the Record Date
shall be as prescribed in this Table.
	 
	+	 	If there shall be a change from a Long-Term
Interest Rate on a day other than a regularly scheduled Interest Payment Date
for a Long-Term Interest Rate Period, or if there shall be an early termination
of such Long-Term Interest Rate Period and a new Long-Term Interest Rate shall
be set, such Long-Term Interest Rate Period shall end on the day immediately
preceding the date on which the new interest rate shall become effective, which
date shall be the Interest Payment Date for such Long-Term Interest Rate
Period, for which the Record Date shall be the last day of such Long-Term
Interest Rate Period or, if sooner, the first day of such Long-Term Interest
Rate Period. If such new interest rate shall be a Daily Rate or a Weekly Rate,
the first Interest Period relating thereto shall begin on the effective date of
such new interest rate and end on the last day of the then current calendar
month, for which the Interest Payment Date and the Record Date shall be as
prescribed in this Table.
	 
	***	 	If an Interest Payment Date occurs less than
15 days after the first day of a Long-Term Interest Rate Period, the first day
of such Long-Term Interest Rate Period is the Record Date for such Interest
Payment Date.
	 
	****	 	The Interest Payment Date with respect to a
daily Auction Period shall be the first Business Day of the month immediately
succeeding such Auction Period.




A-5









 









Payment of defaulted interest will be made to holders of record as of the fifth-to-last
Business Day before payment




     5. Method of Payment. Holders must surrender Bonds to the Trustee to collect principal at
maturity or upon redemption. (See “Optional Tenders” and “Mandatory Tender for Purchase” below for
the payment of purchase price of tendered Bonds.) Interest on Bonds bearing interest at a
Commercial Paper Rate (other than Bonds in the Book-Entry System) is payable only upon presentation
of such Bonds to the Trustee. Interest on Bonds bearing interest at a Daily, Weekly, Auction Mode,
Index or Long-Term Interest Rate (other than Bonds in the Book-Entry System) will be paid to the
registered holder hereof as of the Record Date by check mailed by first-class mail on the Interest
Payment Date to such holder’s registered address. A holder of $1,000,000 or more in principal
amount of Bonds may be paid interest at a Daily, Weekly, Auction Mode, Index or Commercial Paper
Rate by wire transfer in immediately available funds to an account in the continental United States
if the holder makes a written request of the Trustee (in form satisfactory to the Trustee) at least
two Business Days before the Record Date specifying the account address. The notice may provide
that it will remain in effect for later interest payments until changed or revoked by another
written notice. Principal and interest will be paid in money of the United States that at the time
of payment is legal tender for payment of public and private debts or by checks or wire transfers
payable in such money. If any payment on the Bonds is due on a non-Business Day, it will be made on
the next Business Day, and no interest will accrue as a result.



     6. Optional Tenders. “Tender” means to require, or the act of requiring, the Trustee to
purchase a Bond at the holder’s option under the provisions of this paragraph 6 at 100% of the
principal amount plus interest accrued to (but excluding) the date of purchase. During a Daily
Interest Period, if a Bond is tendered after the Record Date and before the Interest Payment Date
for that Interest Period, the Trustee will pay (but only from funds available therefore as provided
in the Indenture) a purchase price of principal plus interest accruing after the last day of that
Interest Period. While the Bonds bear interest at a Long-Term Interest Rate, a Commercial Paper
Rate, an Auction Mode Rate or an Index Rate, the owner of a Bond does not have the option to
require the Trustee to purchase its Bond.



     Daily Rate Tender. When interest on the Bonds is payable at a Daily Rate and a Book- Entry
System is in effect, a Beneficial Owner (through its direct Participant in the Securities
Depository) may tender his interest in a Bond (or portion of Bond) by delivering an irrevocable
written notice or an irrevocable telephone notice, promptly confirmed in writing, to the Trustee
(any such telephone notice to be delivered to a Responsible Officer of the Trustee) and an
irrevocable notice by telephone, telegraph or facsimile transmission to the Remarketing Agent, in
each case prior to 11:00 a.m., New York City time, on a Business Day, stating the



A-6









 







principal amount
of the Bond (or portion of Bond) being tendered, payment instructions for the purchase price and
the Business Day (which may be the date the notice is delivered) the Bond (or portion of Bond) is
to be purchased. The Beneficial Owner shall effect delivery of such Bond by causing such direct
Participant to transfer its interest in the Bond equal to such Beneficial Owner’s interest on
the records of the Securities Depository to the participant account of the Trustee with the
Securities Depository. Any notice received by the Trustee after 11:00 a.m., New York City time,
shall be deemed to have been given on the next Business Day.



     When interest on the Bonds is payable at a Daily Rate and a Book-Entry System is not in
effect, a holder of a Bond may tender the Bond (or portion of Bond) by delivering the notices as
described above (which shall include the certificate number of the Bond), and shall also deliver
the Bond to the Trustee by 1:00 p.m., New York City time, on the date of purchase (see additional
requirements below).



     Weekly Rate Tender. When interest on the Bonds is payable at a Weekly Rate and a Book-Entry
System is in effect, a Beneficial Owner (through its direct Participant in the Securities
Depository) may tender his interest in a Bond (or portion of Bond) by delivering an irrevocable
written notice or an irrevocable telephone notice, promptly confirmed in writing, to the Trustee
(any such telephone notice to be delivered to a Responsible Officer of the Trustee) and an
irrevocable notice by telephone, telegraph or facsimile transmission to the Remarketing Agent, in
each case prior to 5:00 p.m., New York City time, on a Business Day stating the principal amount of
the Bond (or portion of Bond) being tendered, payment instructions for the purchase price and the
date, which must be a Business Day at least seven days after the notice is delivered, on which the
Bond (or portion of Bond) is to be purchased. The Beneficial Owner shall effect delivery of such
Bond by causing such direct Participant to transfer its interest in the Bond equal to such
Beneficial Owner’s interest on the records of the Securities Depository to the participant account
of the Trustee or its agent with the Securities Depository.



     When interest on the Bonds is payable at a Weekly Rate and a Book-Entry System is not in
effect, a holder of a Bond may tender the Bond (or portion of Bond) by delivering the notices as
described above (which shall include the certificate number of the Bond), and shall also deliver
the Bond to the Trustee by 1:00 p.m., New York City time, on the date of purchase (see additional
requirements below).



     Payment of Purchase Price. The purchase price for a tendered Bond will be paid in immediately
available funds to the registered owner of the Bond by the close of business on the date of
purchase. No purchase of Bonds by the Trustee shall be deemed to be a payment or redemption of the
Bonds or of any portion thereof and such purchase will not operate to extinguish or discharge the
indebtedness evidenced by such Bonds.



A-7









 





     7. Mandatory Tender for Purchase. As provided below, the Bonds are subject to mandatory tender
for purchase under certain circumstances. BY ACCEPTANCE OF THIS BOND, THE OWNER AGREES TO SELL AND
SURRENDER THIS BOND, PROPERLY ENDORSED, UNDER THE CONDITIONS DESCRIBED BELOW. All purchases will be
made in funds immediately available on the purchase date and will be at a purchase price of 100% of
the principal amount of the Bonds being purchased (unless a premium is required
as otherwise specified) plus interest accrued to (but excluding) the purchase date, except
that interest accruing at a Daily Rate will be paid on the fifth Business Day following the
purchase date. Bonds tendered for purchase on a date after a call for redemption but before the
redemption date will be purchased pursuant to the tender. No purchase of Bonds shall be deemed to
be a payment or redemption of the Bonds or of any portion thereof and such purchase will not
operate to extinguish or discharge the indebtedness evidenced by such Bonds.



     Mandatory Tender at Beginning of a New Long-Term Interest Rate Period. When the Bonds bear
interest at a Long-Term Interest Rate and a new Long-Term Interest Rate is to be determined, the
Bonds will be subject to mandatory tender for purchase on the effective date of the new Long-Term
Interest Rate. In the case of a change prior to the day originally established as the day after the
last day of a Long-Term Interest Rate Period, the Bonds will be purchased at the percentage of
their principal amount which would be payable upon the applicable redemption described under
“Optional Redemption During Long-Term Interest Rate Period” below.



     Mandatory Tender on Each Interest Payment Date During Commercial Paper Mode. When Bonds bear
interest at a Commercial Paper Rate, each Bond must be tendered for purchase on the Interest
Payment Date for such Bond.



     Mandatory Tender Upon a Change in the Determination Method. Subject to the provisions of
Section 2.03(b) of the Indenture, on the effective date of the change in the Determination Method
(the methods being Daily, Weekly, Commercial Paper, Long-Term, Auction Mode or Index Interest
Rates), the Bonds will be subject to mandatory tender for purchase on the effective date of such
change. Any such purchase shall be at a price equal to 100% of the principal amount of the Bonds,
plus accrued interest, except that in the case of change prior to the day originally established as
the date after the last day of a Long Term Interest Rate Period, the Bonds will be purchased at the
percentage of their principal amount which would be payable upon the applicable redemption
described under “Optional Redemption During Long-Term Interest Rate Period” below.



     Mandatory Tender Upon Expiration of Index Period. When a new Index Period immediately follows
the expiration of a prior Index Period, the Bonds will be subject to mandatory tender for purchase
on the commencement date of the new Index Period.



A-8









 





     Notice of Tender. At least 15 days before each mandatory tender (except for tenders described
under “Mandatory Tender on Each Interest Payment Date During Commercial Paper Mode” described
above, for which no notice will be given and except that such notice shall be given at least 30
days prior to the effective date if a Long-Term Interest Rate Period is in effect and the effective
date is on or before the end of the Long-Term Interest Rate Period), the Trustee will mail a notice
of tender by first-class mail to each Bondholder at the holder’s registered address. Failure to
give any required notice of tender as to any particular Bonds, or any defect therein, will not
affect the validity of the tender of any Bonds in respect of which no failure or defect occurs. Any
notice mailed as provided in this paragraph shall be effective
when sent and will be conclusively presumed to have been given whether or not actually
received by the addressee.



     Effect of Notice. When notice of tender is required and given, and when Bonds are to be
tendered without notice, Bonds tendered become due and payable on the purchase date; in such case
when funds are deposited with the Trustee sufficient for purchase, interest on the Bonds to be
purchased ceases to accrue as of the date of purchase.



     8. Delivery Address; Additional Delivery Requirements. Notices in respect of tenders and Bonds
tendered must be delivered to the Trustee, and notices in respect of tenders must be delivered to
the Remarketing Agent, as provided in the Indenture.



     All tendered Bonds must be accompanied by an instrument of transfer satisfactory to the
Trustee, executed in blank by the registered owner or his duly authorized attorney, with the
signature guaranteed by an eligible guarantor institution.



     Limitation on Tenders. Except as provided under “Mandatory Tender Upon a Change in the
Determination Method,” “Mandatory Tender Upon Expiration of Index Period,” “Mandatory Tender at
Beginning of a New Long-Term Interest Rate Period” and “Mandatory Tender on Each Interest Payment
Date During Commercial Paper Mode,” no Bonds may be tendered while they bear interest at a
Commercial Paper Rate, Auction Mode Rate, Index Rate or a Long-Term Interest Rate.



     Irrevocable Notice Deemed to be Tender of Bond; Undelivered Bonds. The giving of notice by the
registered owner of a Bond as provided in paragraph 6 or the occurrence of a mandatory tender for
purchase as described in paragraph 7 constitutes the irrevocable tender for purchase of each Bond
(or portion of Bond) with respect to which such notice was given, irrespective of whether such Bond
was delivered as provided in paragraph 6 or 7. The determination of the Trustee as to whether a
notice of tender has been properly sent shall be conclusive and binding upon the Bondholders.



A-9









 





     The Trustee may refuse to accept delivery of any Bond for which a proper instrument of
transfer has not been provided. If any owner of a Bond who gave notice of optional tender or which
is subject to mandatory tender fails to deliver his Bond to the Trustee at the place and on the
applicable date and time specified, or fails to deliver his Bond properly endorsed, and moneys for
the payment of such Bond are on deposit with the Trustee, his Bond shall constitute an undelivered
Bond as described in the Indenture and interest shall cease to accrue on his Bonds as of the tender
date and such owner shall have no right under the Indenture other than the right to receive payment
of the tender price thereof. BY ACCEPTANCE OF THIS BOND, THE OWNER AGREES TO SELL AND SURRENDER
THIS BOND, PROPERLY ENDORSED, TO THE TRUSTEE AFTER THE GIVING OF IRREVOCABLE NOTICE OF TENDER FOR
PURCHASE AS DESCRIBED ABOVE.



     9. Redemptions. All redemptions will be made in funds immediately available on the redemption
date and will be at a redemption price of 100% of the principal amount of the Bonds being redeemed
(unless a premium is required as provided below) plus interest accrued to the redemption date,
except that interest accruing at a Daily Rate will be paid on the fifth Business Day following the
redemption date.



     Mandatory Redemption. Upon the occurrence of a Mandatory Redemption Event, the Bonds shall be
redeemed, in whole but not in part, prior to the Maturity Date upon not less than 30 nor more than
60 days’ notice at a redemption price equal to 100% of the principal amount plus accrued and unpaid
interest to the redemption date. A Mandatory Redemption Event will be deemed to have occurred at
the time that the Trustee receives written notice of the Determination of Taxability and such
notice shall constitute the notice required by Section 4.7 of the Agreement. Subject to the notice
requirement set forth in the Indenture, the Bonds shall be redeemed on a date within 60 days after
the occurrence of the Mandatory Redemption Event. Any notice of redemption required by Section
3.02(b) of the Indenture to be given by the Trustee in connection with a redemption need not be
given earlier than 15 days after the date the Trustee receives notice of a Mandatory Redemption
Event pursuant to Section 3.02(b) of the Indenture.



     Optional Redemption During Long-Term Interest Rate Period. During the Initial Interest Period,
the Bonds will be redeemable on or after December 1, 2016. During any Long-Term Interest Rate
Period (other than the Initial Interest Period), if the Long-Term Interest Rate Period is less than
or equal to five years, the Bonds will not be redeemable pursuant to this provision during the
Long-Term Interest Rate Period.



     If the Long-Term Interest Rate Period (other than the Initial Interest Period) is greater than
five years, the Bonds will not be redeemable for five years after the date on which the Bonds begin
to bear interest at the new Long-Term Interest Rate.



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After the five year no-call period, the Bonds
may be redeemed at any time in whole or in part at 100% of their principal amount plus accrued
interest, if any.



     As an alternative to and in lieu of the foregoing redemption provisions, if, with respect to
any Long-Term Interest Rate Period, a Favorable Opinion of Tax Counsel is delivered to the Trustee
not later than the date of the establishment of such Long-Term Interest Rate Period, the Bonds may
be redeemed during such Long-Term Interest Rate Period at the option of the Company in whole or in
part at any time after a no-call period, if any, established by the Remarketing Agent, at the
percentages of their principal amount, plus accrued interest, as follows: the Remarketing Agent
shall, given the duration of the Long-Term Interest Rate Period, determine and inform the Trustee
and the Company, on a date which is no later than the establishment of the Long-Term Interest Rate,
the periods during which the Bonds shall not be subject to redemption (the “Call Protection
Period”), the premium or premiums payable upon redemption (the “Call Premiums”), if any,
applicable to the redemption of Bonds after the Call Protection Period, and the period or
periods during which the Call Premiums shall be effective (the “Call Premium Periods”) necessary to
establish the Long-Term Interest Rate. Such Call Protection Period, Call Premiums and Call Premium
Periods shall be established in accordance with optional call redemption provisions which, in the
judgment of the Remarketing Agent, are generally accepted at the time of determination as the
standard features for obligations such as the Bonds, given the length of the Long-Term Interest
Rate Period.



     Extraordinary Optional Redemption. The Bonds are subject to redemption in whole without
premium at any time upon receipt by the Trustee and the Issuer of a written notice from the Company
stating that the Company has determined that:



          (i) Any federal, state or local body exercising governmental or judicial authority has taken
any action which results in the imposition of unreasonable burdens or excessive liabilities with
respect to the Project, rendering impracticable or uneconomical the operation of the Project,
including the condemnation or taking by eminent domain of all or substantially all of the Project;
or




          (ii) Changes in the economic availability of raw materials, operating supplies or facilities
or technological or other changes have made the continued operation of the Project as an efficient
ship building and repair facility uneconomical; or




          (iii) The Project has been damaged or destroyed to such an extent that it is not practicable
or desirable to rebuild, repair or restore the Project.




     If the Issuer shall have received such notice by the Company, the Issuer, upon request of the
Company, shall give written notice to the Trustee directing the



A-11









 







Trustee to take all action
necessary to redeem the outstanding Bonds in whole and on a date specified in such notice, which
date shall be not less than 45 nor more than 90 days from the date the notice is received by the
Trustee.



     Optional Redemption During Daily or Weekly Rate Period. When interest on the Bonds is payable
at a Daily or Weekly Rate, the Bonds may be redeemed in whole or in part at the option of the
Company, on any Business Day.



     Optional Redemption During Auction Rate Periods. When interest on the Bonds is payable at an
Auction Mode Rate, the Bonds may be redeemed in whole or in part at the option of the Company, on
the first day after the last day of the Auction Period then in effect.



     Optional Redemption During Index Rate Periods. During any Index Rate Period, the Bonds are not
subject to optional redemption.



     Notice of Redemption. At least 30 days before each redemption, the Trustee will mail a notice
of redemption by first-class mail to each Bondholder with Bonds to be redeemed at such holder’s
registered address. Failure to give any required
notice of redemption as to any particular Bonds, or any defect therein, will not affect the
validity of the call for redemption of any Bonds in respect of which no failure or defect occurs.
Any notice mailed as provided in this paragraph shall be effective when sent and will be
conclusively presumed to have been given whether or not actually received by the addressee.



     Effect of Notice. When notice is required and given, Bonds called for redemption become due
and payable on the redemption date; in such case when funds are deposited with the Trustee
sufficient for redemption, interest on the Bonds to be redeemed ceases to accrue as of the date of
redemption.



     10. Denominations; Transfer; Exchange. The Bonds may be issued in registered form without
coupons in denominations as follows: (1) when interest is payable at a Daily, Weekly or Commercial
Paper Rate, $100,000 or any integral multiple thereof; (2) when interest is payable at a Long-Term
Interest Rate, $5,000 and integral multiples of $5,000 thereafter; (3) when interest is payable at
an Auction Mode Rate, $1,000 and integral multiples thereof; and (4) when interest is payable at an
Index Rate, $100,000 and integral multiples of $5,000 thereafter. A holder may register the
transfer of or exchange Bonds in accordance with the Indenture. The Trustee may require a holder,
among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. Except in connection with the purchase of
Bonds tendered for purchase, the Trustee will not be required to register the transfer of or
exchange any Bond which has been called for redemption or during the period beginning 15 days
before the mailing of notice calling the



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Bonds or any portion of the Bonds for redemption and
ending on the redemption date.



     11. Persons Deemed Owners. The registered holder of this Bond shall be treated as the owner of
it for all purposes.



     12. Funds in Trust; Unclaimed Funds. All moneys which the Trustee shall have withdrawn from
the account of the Company or shall have received from any other source and set aside, or deposited
with the paying agents, for the purpose of paying any of the Bonds hereby secured, either at the
maturity thereof or upon call for redemption or tender, shall be held in trust for the respective
holders of such Bonds. But any moneys which shall be so set aside or deposited by the Trustee and
which shall remain unclaimed by the holders of such Bonds for a period of six years after the date
on which such Bonds shall have become due and payable shall upon request in writing be paid to the
Company or to such officer, board or body as may then be entitled by law to receive the same, and
thereafter the holders of such Bonds shall look only to the Company or to such officer, board or
body, as the case may be, for payment and then only to the extent of the amount so received without
any interest thereon, and the Trustee, the Issuer and the paying agents shall have no
responsibility with respect to such moneys.



     13. Discharge Before Redemption, Tender or Maturity. If the Company at any time deposits with
the Trustee money or Government Obligations as described in the Indenture sufficient to pay at
redemption, tender or maturity principal of and
interest on the outstanding Bonds, and if the Company also pays or provides for the payment of
all other sums then payable by the Company under the Agreement or the Indenture, the lien of the
Indenture will be discharged. After discharge, Bondholders must look only to the deposited money
and securities for payment except as otherwise specifically provided in the Indenture.



     14. Amendment, Supplement, Waiver. Subject to certain exceptions, the Indenture, the Agreement
or the Bonds may be amended or supplemented, and any past default or compliance with any provision
may be waived, with the consent of the holders of a majority in principal amount of the Bonds then
outstanding. Any such consent shall be irrevocable and shall bind any subsequent owner of this Bond
or any Bond delivered in substitution for this Bond. Without the consent of any Bondholder, the
Issuer may amend or supplement the Indenture, the Agreement or the Bonds as described in the
Indenture, among other things, to cure any ambiguity, omission, defect or inconsistency, to provide
for uncertificated Bonds in addition to or in place of certificated Bonds, to provide for a
Book-Entry System for the Bonds or to make any change that does not materially adversely affect the
rights of any Bondholder.



     15. Defaults and Remedies. The Indenture provides that the occurrences of certain events
constitute Events of Default. If an Event of Default occurs and is



A-13









 







continuing, the Bonds may become
or may be declared immediately due and payable, as provided in the Indenture. An Event of Default
and its consequences may be waived as provided in the Indenture. Bondholders may not enforce the
Indenture or the Bonds except as provided in the Indenture. Except as specifically provided in the
Indenture, the Trustee may refuse to enforce the Indenture or the Bonds unless it receives security
and/or indemnity satisfactory to it. Subject to certain limitations, holders of a majority in
principal amount of the Bonds then outstanding may direct the Trustee in its exercise of any trust
or power.



     16. No Recourse Against Others. A member, director, officer or employee, as such, of the
Issuer shall not have any liability for any obligations of the Issuer or the Company under the
Bonds or the Indenture or for any claim based on such obligations or their creation. Each
Bondholder by accepting a Bond waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Bond.



     17. Authentication. This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the certificate of authentication
hereon shall have been duly executed by the Trustee.



     18. Abbreviations. Customary abbreviations may be used in the name of a Bondholder or an
assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and
U/G/M/A (= Uniform Gifts to Minors Act),



     A copy of the Indenture may be inspected at the corporate trust office of the Trustee located
at 505 North 20th Street, Suite 950, Birmingham, AL 35203.



A-14









 





     IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to
exist, happen and be performed precedent to and in the execution and delivery of the Indenture and
the issuance of this Bond do exist, have happened and have been performed in due time, form and
manner as required by law.



     IN WITNESS WHEREOF the Mississippi Business Finance Corporation has caused this Bond to be
executed in its name by its Executive Director or the President of its Board of Directors by his
manual or facsimile signature and attested by the manual or facsimile signature of its Secretary or
Assistant Secretary and its corporate seal to be hereunto affixed or printed hereon.



	 	 	 	 	 	 	 

	 	 	Mississippi Business Finance Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	[SEAL]

	 	 	 	Executive Director
	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Secretary
	 	 	 	 	 	 









A-15









 








CERTIFICATE OF AUTHENTICATION




     This Bond is one of the Bonds of the series designated therein and issued under the provisions
of the within-mentioned Indenture.



	 	 	 	 	 	 	 

	 	 	THE BANK OF NEW YORK TRUST 

COMPANY, N.A., as Trustee	 	 
	 
	 	 	 	 	 	 
	Date:                     

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory
	 	 











A-16









 








CERTIFICATE OF REGISTRATION AND VALIDATION




     This bond is one of the Series 2006 Bonds described in the Official Action resolution
described in the Loan Agreement and is one of the Mississippi Business Finance Corporation Gulf
Opportunity Zone Industrial Development Revenue Bonds (Northrop Grumman Ship Systems, Inc.
Project), Series 2006, which issue of bonds was validated by decree of the Chancery Court of the
First Judicial District of Hinds County, Mississippi on December 4, 2006.



	 	 	 

	 	 	 

Secretary, Mississippi Business Finance Corporation











A-1









 







The following abbreviations, when used in the inscription on the face of the within Bond, shall be
construed as though they were written out in full according to applicable laws or regulations:




	 	 	 	 	 	 	 	 	 

	TEN COM-

	 	as tenants common
	 	UNIF GIFT MIN ACT-. ____________


Custodian _______
	 	 
	 
	 	 	 	 	 	 	 	 
	TEN ENT-

	 	as tenants by the

entireties
	 	 	 	(Cust)                      (Minor)


under Uniform Gifts to Minors Act	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	JT TEN-

	 	as joint tenants
with right of
survivorship and
not as tenants in
common
	 	 	 	(State)	 	 





Additional abbreviations may also be used though not in list above.




ASSIGNMENT



FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto



 




Please Insert Social Security Or

Other Identifying Number Of Assignee




	 	 	 

	
 


	 	 






 




(Name and Address of Assignee)




 





the within Bond and does
hereby irrevocably constitute and appoint                                          attorney to
transfer the said Bond on the books kept for registration thereof with full power of substitution
in the premises.




	 	 	 	 	 	 	 

	Dated:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Signature guaranteed:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Medallion Number:                    	 	 	 	 
	 	 	 	 	 	 	 
	*Signature(s) must be guaranteed by an
eligible guarantor institution which is a
member of a recognized signature guarantee
program, i.e. Securities Transfer Agents
Medallion Program (STAMP), or New York
Stock Exchange Medallion Signature Program (MSP).	 	NOTICE: The signature to
this assignment must
correspond with the name of
the registered owner as it
appears upon the face of the
within Bond in every
particular, without
alteration or enlargement or
any change whatever.	 	 






 









 






EXHIBIT B




TO



TRUST INDENTURE



 




Auction Procedures








B-1









 








ARTICLE I




Definitions



     In addition to the words and terms elsewhere defined in this Indenture, the following words
and terms as used in this Exhibit B and elsewhere in this Indenture have the following meanings
with respect to Bonds in an Auction Rate Period unless the context or use indicates another or
different meaning or intent.



     “Agent Member” means a member of, or participant in, the Securities Depository who shall act
on behalf of a Bidder.



     “All Hold Rate” means, as of any Auction Date, 45% of the Reference Rate in effect on such
Auction Date.



     “Applicable Percentage” means, as of any Auction Date, (a) so long as there has not been more
than one Failed Auction since the last Successful Auction, 300%; and (b) if there have been two or
more consecutive Failed Auctions since the last Successful Auction, 400%.



     “Auction” means each periodic implementation of the Auction Procedures.



     “Auction Agent” means the auctioneer appointed in accordance with Section 3.01 or 3.02 of this
Exhibit B.



     “Auction Agreement” means an agreement among the Company, the Auction Agent and the Trustee
pursuant to which the Auction Agent agrees to follow the procedures specified in this Exhibit B
with respect to the Bonds while bearing interest at an Auction Mode Rate, as such agreement may
from time to time be amended or supplemented.



     “Auction Date” means during any period in which the Auction Procedures are not suspended in
accordance with the provisions hereof, (i) if the Bonds are in a daily Auction Period, each
Business Day, and (ii) if the Bonds are in any other Auction Period, the Business Day next
preceding each Interest Payment Date for such Bonds (whether or not an Auction shall be conducted
on such date); provided, however, that the last Auction Date with respect to the Bonds in an
Auction Period other than a daily Auction Period shall be the earlier of (a) the Business Day next
preceding the Interest Payment Date next preceding the Conversion Date for the Bonds and (b) the
Business Day next preceding the Interest Payment Date next preceding the final maturity date for
the Bonds; and provided, further, that if the Bonds are in a daily Auction Period, the last Auction
Date shall be the earlier of (x) the Business Day next preceding the Conversion Date for the Bonds
and (y) the



B-2









 







Business Day next preceding the final maturity date for the Bonds. On the Business
Day preceding the conversion from a daily Auction Period to another Auction Period, there
shall be two Auctions, one for the last daily Auction Period and one for the first Auction Period
following the conversion.



     “Auction Mode Rate” means the rate of interest to be borne by the Bonds during each Auction
Period determined in accordance with Section 2.04 of this Exhibit B; provided, however, in no event
may the Auction Mode Rate exceed the Maximum Auction Rate.



     “Auction Period” or “Auction Rate Period” means any period of less than 365 days during which
the Bonds bear interest at a single Auction Mode Rate, as established pursuant to the Indenture.



     “Auction Procedures” means the procedures for conducting Auctions for Bonds during an Auction
Rate Period set forth in this Exhibit B.



     “Auction Rate” means for each Auction Period, (i) if Sufficient Clearing Bids exist, the
Winning Bid Rate, provided, however, if all of the Bonds are the subject of Submitted Hold Orders,
the All Hold Rate and (ii) if Sufficient Clearing Bids do not exist, the Maximum Auction Rate.



     “Authorized Denominations” means $25,000 and integral multiples thereof, notwithstanding
anything else in this Indenture to the contrary, so long as the Bonds bear interest at an Auction
Mode Rate.



     “Available Bonds” means on each Auction Date, the aggregate principal amount of Bonds that are
not the subject of Submitted Hold Orders.



     “Bid” has the meaning specified in subsection (a) of Section 2.02 of this Exhibit B.



     “Bidder” means each Existing Owner and Potential Owner who places an Order.



     “Broker-Dealer” means any entity that is permitted by law to perform the function required of
a Broker-Dealer described in this Exhibit B, that is a member of, or a direct participant in, the
Securities Depository, that has been selected by the Company and that is a party to a Broker-Dealer
Agreement with the Company and the Auction Agent.



     “Broker-Dealer Agreement” means an agreement among the Auction Agent, the Company and a
Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the procedures described in
this Exhibit B, as such agreement may from to time be amended or supplemented.



B-3









 





     “Business Day” in addition to any other definition of “Business Day” included in this
Indenture while Bonds bear interest at an Auction Mode Rate, the term Business Day shall not
include April 14 or 15 or December 30 or 31 or days on which the Auction Agent or any Broker-Dealer
are not open for business.



     “Conversion Date” means the date on which the Bonds are converted to bear interest at a Daily
Rate, a Weekly Rate, a Commercial Paper Rate, a Long-Term Interest Rate or an Index Rate.



     “Existing Owner” means a Person who is listed from time to time as the beneficial owner of
Bonds in the records of the Auction Agent.



     “Failed Auction” means an Auction for which there were not Sufficient Clearing Bids.



     “Hold Order” has the meaning specified in subsection (a) of Section 2.02 of this Exhibit B.



     “Interest Payment Date” with respect to Bonds bearing interest at Auction Mode Rates, means
(a) when used with respect to any Auction Period of less than 92 days (other than a daily Auction
Period), the Business Day immediately following such Auction Period, (b) when used with respect to
a daily Auction Period, the first Business Day of the month immediately succeeding such Auction
Period, (c) when used with respect to an Auction Period of 92 or more days, each 13th Thursday
after the first day of such Auction Period or the next Business Day if such Thursday is not a
Business Day and on the Business Day immediately following such Auction Period, (d) each Conversion
Date and (e) the Maturity Date.



     “Maximum Auction Rate” means, as of any Auction Date, the product of the Reference Rate
multiplied by the Applicable Percentage; provided, however, that if there have been two or more
consecutive Failed Auctions since the last Successful Auction and there has not been a Successful
Auction for a period of greater than 90 days after the first of such Failed Auctions, the Maximum
Auction Rate shall be the Maximum Interest Rate; provided, further that in no event shall the
Maximum Auction Rate exceed the Maximum Interest Rate.



     “Maximum Interest Rate” means (i) 13% on the date hereof and (ii) to the extent the maximum
rate permitted by applicable law shall become less than 13%, then the maximum rate permitted by
applicable law.



     “Moody’s” means Moody’s Investors Service, Inc. and its successors and assigns.



     “Order” means a Hold Order, Bid or Sell Order.



B-4









 





     “Potential Owner” means any Person, including any Existing Owner, who may be interested in
acquiring a beneficial interest in the Bonds in addition to the Bonds currently owned by such
Person, if any.



     “Principal Office” means, with respect to the Auction Agent, the office thereof designated in
writing to the Company, the Trustee and each Broker-Dealer.



     “Rating Agencies” means Moody’s and S&P.



     “Reference Rate” shall have the meaning specified in Section 2.07 of this Exhibit B.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors and assigns.



     “Securities Depository” means The Depository Trust Company and its successors and assigns or
any other securities depository selected by the Company which agrees to follow the procedures
required to be followed by such securities depository in connection with the Bonds.



     “Sell Order” has the meaning specified in subsection (a) of Section 2.02 of Exhibit B.



     “Submission Deadline” means 1:00 p.m., New York City time, on each Auction Date not in a daily
Auction Period and 11:00 a.m., New York City time, on each Auction Date in a daily Auction Period,
or such other time on such date as shall be specified from time to time by the Auction Agent
pursuant to the Auction Agreement as the time by which Broker-Dealers are required to submit Orders
to the Auction Agent.



     “Submission Processing Deadline” means the earlier of (i) 40 minutes after the Submission
Deadline and (ii) the time when the Auction Agent begins to disseminate the results of the Auction
to the Broker-Dealer.



     “Submitted Bid” has the meaning specified in subsection (b) of Section 2.04 of this Exhibit B.



     “Submitted Hold Order” has the meaning specified in subsection (b) of Section 2.04 of this
Exhibit B.



     “Submitted Order” has the meaning specified in subsection (b) of Section 2.04 of this Exhibit
B.



     “Submitted Sell Order” has the meaning specified in subsection (b) of Section 2.04 of this
Exhibit B.



B-5









 





     “Successful Auction” means an Auction for which there were Sufficient Clearing Bids.



     “Sufficient Clearing Bids” means an Auction for which the aggregate principal amount of Bonds
that are the subject of Submitted Bids by Potential Owners specifying one or more rates not higher
than the Maximum Interest Rate is not less than the aggregate principal amount of Bonds that are
the subject of Submitted Sell Orders and of Submitted Bids by Existing Owners specifying rates
higher than the Maximum Interest Rate.



     “Winning Bid Rate” means the lowest rate specified in any Submitted Bid which if selected by
the Auction Agent as the Auction Rate, subject to the All Hold
Rate, would cause the aggregate principal amount of Bonds that are the subject of Submitted
Bids specifying a rate not greater than such rate to be not less than the aggregate principal
amount of Available Bonds.



ARTICLE II




Auction Procedures



     Section 2.01. General Procedures. While the Bonds bear interest at the Auction Mode Rate,
Auctions shall be conducted on each Auction Date (other than the Auction Date immediately preceding
each Auction Rate Period commencing after the ownership of the Bonds is no longer maintained in the
Book-Entry System pursuant to this Indenture). If there is an Auction Agent on such Auction Date,
Auctions shall be conducted in the manner set forth in this Exhibit B.



     Section 2.02. Orders by Existing Owners and Potential Owners.



     (a) Prior to the Submission Deadline on each Auction Date:




     (i) each Existing Owner may submit to a Broker-Dealer, in writing or by such other
method as shall be reasonably acceptable to such Broker-Dealer, information as to:




     (A) the principal amount of Bonds, if any, held by such Existing Owner which
such Existing Owner irrevocably commits to continue to hold for the next succeeding
Auction Period without regard to the rate determined by the Auction Procedures for
such Auction Period,




     (B) the principal amount of Bonds, if any, held by such Existing Owner which
such Existing Owner irrevocably commits to continue to hold for the next succeeding
Auction Period if the rate determined by the Auction Procedures for such Auction
Period shall not be less than the rate per annum then specified by such Existing



B-6









 







Owner (and which such Existing Owner irrevocably offers to sell on the next
succeeding Auction Date (or the same day in the case of a daily Auction Period) if
the rate determined by the Auction Procedures for the next succeeding Auction Period
shall be less than the rate per annum then specified by such Existing Owner), and/or




     (C) the principal amount of Bonds, if any, held by such Existing Owner which
such Existing Owner irrevocably offers to sell on the next succeeding Auction Date
(or on the same day in the case of a daily Auction Period) without regard to the
rate determined by the Auction Procedures for the next succeeding Auction Period;
and




     (ii) for the purpose of implementing the Auctions and thereby to achieve the lowest
possible interest rate on the Bonds, one or more Broker-Dealers shall contact Potential
Owners, including Persons that are Existing Owners, to determine the principal amount of
Bonds, if any, which each such Potential Owner irrevocably offers to purchase if the rate
determined by the Auction Procedures for the next succeeding Auction Period is not less than
the rate per annum then specified by such Potential Owner.



     For the purposes hereof an Order containing the information referred to in clause (i)(A) above
is herein referred to as a “Hold Order”, an Order containing the information referred to in clause
(i)(B) or (ii) above is herein referred to as a “Bid”, and an Order containing the information
referred to in clause (i)(C) above is herein referred to as a “Sell Order.”



     (b) (i) Subject to the provisions of Section 2.03 of this Exhibit B, a Bid by an Existing
Owner shall constitute an irrevocable offer to sell:




     (A) the principal amount of Bonds specified in such Bid if the rate determined
by the Auction Procedures on such Auction Date shall be less than the rate specified
therein if sufficient Clearing Bids exist; or




     (B) such principal amount or a lesser principal amount of Bonds to be
determined as set forth in subsection (a)(v) of Section 2.05 hereof if the rate
determined by the Auction Procedures on such Auction Date shall be equal to such
specified rate; or




     (C) a lesser principal amount of Bonds to be determined as set forth in
subsection (b)(iv) of Section 2.05 hereof if such specified rate shall be higher
than the Maximum Auction Rate and Sufficient Clearing Bids do not exist.




     (ii) Subject to the provisions of Section 2.03 of this Exhibit B, a Sell Order by an
Existing Owner shall constitute an irrevocable offer to sell:



B-7









 






     (A) the principal amount of Bonds specified in such Sell Order; or




     (B) such principal amount or a lesser principal amount of Bonds as set forth in
subsection (b)(iv) of Section 2.05 hereof if Sufficient Clearing Bids do not exist.




     (iii) Subject to the provisions of Section 2.03 of this Exhibit B, a Bid by a Potential
Owner shall constitute an irrevocable offer to purchase:




     (A) the principal amount of Bonds specified in such Bid if the rate determined
by the Auction Procedures on such Auction Date shall be higher than the rate
specified therein; or




     (B) such principal amount or a lesser principal amount of Bonds as set forth in
subsection (a)(vi) of Section 2.05 hereof if the rate determined by the Auction
Procedures on such Auction Date shall be equal to such specified rate.



     (c) Anything herein to the contrary notwithstanding:




     (i) for purposes of any Auction, any Order which specifies Bonds to be held, purchased
or sold in a principal amount which is not $1,000 or an integral multiple thereof shall be
rounded down to the nearest $1,000, and the Auction Agent shall conduct the Auction
Procedures as if such Order had been submitted in such lower amount;




     (ii) for purposes of any Auction other than during a daily Auction Period, any portion
of an Order of an Existing Owner which relates to a Bond which has been called for
redemption on or prior to the Interest Payment Date next succeeding such Auction shall be
invalid with respect to such portion and the Auction Agent shall conduct the Auction
Procedures as if such portion of such Order had not been submitted; and




     (iii) for purposes of any Auction other than during a daily Auction Period, no portion
of a Bond which has been called for redemption on or prior to the Interest Payment Date next
succeeding such Auction shall be included in the calculation of Available Bonds for such
Auction.



     Section 2.03. Submission of Orders by Broker-Dealers to Auction Agent.



     (a) Each Broker-Dealer shall submit to the Auction Agent in writing or by such other method as
shall be reasonably acceptable to the Auction Agent, prior to the Submission Deadline on each
Auction Date, all Orders obtained by such Broker-Dealer. In each Auction in which such
Broker-Dealer submits one or more Orders, a Broker-Dealer may net the Orders of different Potential
Owners or Existing Owners



B-8









 







on whose behalf a Broker-Dealer is submitting Orders; provided, however,
the interest rates on Bids, other than Sell Orders, are the same when rounded pursuant to the
provisions of the Auction Procedures. For purposes of conducting an Auction, the Auction Agent may
consider a Broker-Dealer acting on behalf of its customer as a single Existing Owner or Potential
Owner, as the case might be. Each Broker-Dealer shall specify, with respect to each Order:




     (i) the name of the Bidder, or the Broker-Dealer on behalf of the Bidder, placing such
Order;




     (ii) the aggregate principal amount of Bonds, if any, that are the subject of such
Order;




     (iii) to the extent that such Bidder is an Existing Owner:




     (A) the principal amount of Bonds, if any, subject to any Hold Order placed by
such Existing Owner;




     (B) the principal amount of Bonds, if any, subject to any Bid placed by such
Existing Owner and the rate specified in such Bid; and




     (C) the principal amount of Bonds, if any, subject to any Sell Order placed by
such Existing Owner; and




     (iv) to the extent such Bidder is a Potential Owner, the rate and amount specified in
such Potential Owner’s Bid.



     (b) If any rate specified in any Bid contains more than three figures to the right of the
decimal point, the Auction Agent shall round such rate up to the next highest one thousandth of one
percent (0.001%).



     (c) If an Order or Orders covering all of the Bonds held by an Existing Owner is not submitted
to the Auction Agent prior to the Submission Deadline, the Auction Agent shall deem a Hold Order to
have been submitted on behalf of such Existing Owner covering the principal amount of Bonds held by
such Existing Owner and not subject to Orders submitted to the Auction Agent; provided, however,
that if there is a conversion from one Auction Period to another Auction Period and Orders have not
been submitted to the Auction Agent prior to the Submission Deadline covering the aggregate
principal amount of Bonds to be converted held by such Existing Owner, the Auction Agent shall deem
a Sell Order to have been submitted on behalf of such Existing Owner covering the principal amount
of Bonds to be converted held by such Existing Owner not subject to Orders submitted to the Auction
Agent.



     (d) Notwithstanding clauses (a) and (c) of this section, a Broker-Dealer may submit Orders to
the Auction Agent after the Submission Deadline and prior to



B-9









 







the Submission Processing Deadline if
the Orders were received by such Broker-Dealer from Existing Owners or Potential Owners, other than
such Broker-Dealer acting for its own account, prior to the Submission Deadline and were
time-stamped by such Broker-Dealer prior to the Submission Deadline. Each Order submitted to the
Auction Agent after the Submission Deadline and prior to the Submission Processing Deadline shall
constitute a representation by the Broker-Dealer that submitted such Order that such Order was
received by such Broker-Dealer from an Existing Owner or Potential Owner, other than such
Broker-Dealer acting for its own account, prior to the Submission Deadline and was time-stamped by
such Broker-Dealer prior to the Submission Deadline.



     (e) If one or more Orders covering in the aggregate more than the principal amount of
outstanding Bonds held by any Existing Owner are submitted to the Auction Agent, such Orders shall
be considered valid as follows and in the following order of priority:




     (i) all Hold Orders shall be considered valid Hold Orders, but only up to and including
in the aggregate the principal amount of Bonds held by
such Existing Owner, and if the aggregate principal amount of Bonds subject to such
Hold Orders exceeds the aggregate principal amount of Bonds held by such Existing Owner, the
aggregate principal amount of Bonds subject to each such Hold Order shall be reduced pro
rata to cover the aggregate principal amount of outstanding Bonds held by such Existing
Owner;




     (ii) (A) any Bid of an Existing Owner shall be considered valid as a Bid of an Existing
Owner up to and including the excess of the principal amount of Bonds held by such Existing
Owner over the aggregate principal amount of the Bonds subject to Hold Orders referred to in
paragraph (i) above;




     (B) subject to sub-clause (A) of this paragraph (ii), all Bids of an Existing
Owner with the same rate shall be aggregated and considered a single Bid of an
Existing Owner up to and including the excess of the principal amount of Bonds held
by such Existing Owner over the principal amount of Bonds held by such Existing
Owner subject to Hold Orders referred to in sub-paragraph (i) of this paragraph (e);




     (C) subject to sub-clause (A) of this paragraph (ii), if more than one Bid with
different rates is submitted on behalf of such Existing Owner, such Bids shall be
considered valid Bids of an Existing Owner in the ascending order of their
respective rates up to the amount of the excess of the principal amount of Bonds
held by such Existing Owner over the principal amount of Bonds held by such



B-10









 







Existing
Owner subject to Hold Orders referred to in sub-paragraph (i) of this paragraph (e);
and




     (D) the principal amount, if any, of such Bonds subject to Bids not considered
to be Bids of an Existing Owner under this paragraph (ii) shall be treated as the
subject of a Bid by a Potential Owner at the rate specified therein; and




     (iii) all Sell Orders shall be considered valid Sell Orders, but only up to and
including a principal amount of Bonds equal to the excess of the principal amount of Bonds
held by such Existing Owner over the sum of the principal amount of the Bonds considered to
be subject to Hold Orders pursuant to sub-paragraph (i) of this paragraph (e) and the
principal amount of Bonds considered to be subject to Bids of such Existing Owner pursuant
to sub-paragraph (ii) of this paragraph (e).



     (f) If more than one Bid is submitted on behalf of any Potential Owner, each Bid submitted
with the same rate shall be aggregated and considered a single Bid and each Bid submitted with a
different rate shall be considered a separate Bid with the rate and the principal amount of Bonds
specified therein.



     (g) Any Bid submitted by an Existing Owner or a Potential Owner specifying a rate lower than
the All Hold Rate shall be treated as a Bid specifying the All Hold Rate, and any such Bid shall be
considered as valid and shall be selected in ascending order of the respective rates in the
Submitted Bids (as defined in Section 2.04).



     (h) Neither the Issuer, the Company, the Trustee, the initial Broker-Dealer nor the Auction
Agent shall be responsible for the failure of any Broker-Dealer to submit an Order to the Auction
Agent on behalf of any Existing Owner or Potential Owner.



     Section 2.04. Determination of Auction Mode Rate.



     (a) Not later than 9:30 a.m., New York City time, on each Auction Date, the Auction Agent
shall advise the Broker-Dealers and the Trustee by telephone of the All Hold Rate, the Maximum
Auction Rate and the Reference Rate.



     (b) Promptly after the Submission Deadline on each Auction Date, the Auction Agent shall
assemble all Orders submitted or deemed submitted to it by the Broker-Dealers (each such Order as
submitted or deemed submitted by a Broker-Dealer being hereinafter referred to as a “Submitted Hold
Order,” a “Submitted Bid” or a “Submitted Sell Order,” as the case may be, and collectively as a
“Submitted Order”) and shall determine (i) the Available Bonds, (ii) whether there are Sufficient
Clearing Bids and (iii) the Auction Rate.



B-11









 





     (c) Promptly after the Auction Agent has made the determinations pursuant to subsection (b) of
this Section 2.04, the Auction Agent shall advise the Trustee and the Company by telex, facsimile
or other electronic transmission of the Auction Rate for the next succeeding Auction Period and the
Trustee shall promptly notify DTC of such Auction Rate.



     (d) In the event the Auction Agent fails to calculate or, for any reason, fails to timely
provide the Auction Rate for any Auction Period, (i) if the preceding Auction Period was a period
of 35 days or less, the new Auction Period shall be the same as the preceding Auction Period and
the Auction Mode Rate for the New Auction Period shall be the same as the Auction Mode Rate for the
preceding Auction Period, and (ii) if the preceding Auction Period was a period of greater than 35
days, the preceding Auction Period shall be extended to the seventh day following the day that
would have been the last day of such Auction Period had it not been extended (or if such seventh
day is not followed by a Business Day then to the next succeeding day which is followed by a
Business Day) and the Auction Mode Rate in effect for the preceding Auction Period will continue in
effect for the Auction Period as so extended. In the event an Auction Period is extended as set
forth in clause (ii) of the preceding sentence, an Auction shall be held on the last Business Day
of the Auction Period as so extended to take effect for an Auction Period beginning on the Business
Day immediately following the last day of the Auction Period as extended which Auction Period will
end on the date it would otherwise have ended on had the prior Auction Period not been extended.



     (e) Notwithstanding the last paragraph of Section 2.02(b)(1) of the Indenture, in the event of
a failed conversion from an Auction Mode Rate Determination Method to another Determination Method
or in the event of a failure to change the length of the current Auction Period due to the lack of
Sufficient
Clearing Bids at the Auction on the Auction Date for the first new Auction Period, the Auction
Mode Rate for the next Auction Period shall be the Maximum Auction Rate and the Auction Period
shall be a seven-day Auction Period.



     (f) If the Auction Mode Rate shall be the Maximum Interest Rate or the Maximum Auction Rate
for a period (i) in excess of thirty (30) days, the Company agrees to take all steps necessary to
ensure that the Auction Rate does not exceed the interest rate payable on similar securities
(taking into account the interest period and the then enhanced/insured rating of the Bonds, if any)
or (ii) in excess of sixty (60) days, the Company agrees to (A) convert, or cause to be converted,
all Bonds to a Long-Term Interest Rate Period until the Maturity Date or to a Daily, Weekly or
Commercial Paper Rate, in each case at the lowest interest rate that will permit the Remarketing
Agent to sell all the Bonds on the Conversion Date at a price equal to 100% of the principal amount
thereof plus accrued interest thereon.



B-12









 





     (g) If the Bonds are not rated or if the Bonds are no longer maintained in book-entry-only
form by the Securities Depository then the Auction Mode Rate shall be the Maximum Auction Rate.



     Section 2.05. Allocation of Bonds.



     (a) In the event of Sufficient Clearing Bids, subject to the further provisions of subsections
(c) and (d) below, Submitted Orders shall be accepted or rejected as follows in the following order
of priority:




     (i) the Submitted Hold Order of each Existing Owner shall be accepted, thus requiring
each such Existing Owner to continue to hold the Bonds that are the subject of such
Submitted Hold Order;




     (ii) the Submitted Sell Order of each Existing Owner shall be accepted, and the
Submitted Bid of each Existing Owner specifying any rate that is higher than the Winning Bid
Rate shall be rejected, thus requiring each such Existing Owner to sell the Bonds that are
the subject of such Submitted Sell Order or Submitted Bid;




     (iii) the Submitted Bid of each Existing Owner specifying any rate that is lower than
the Winning Bid Rate shall be accepted, thus requiring each such Existing Owner to continue
to hold the Bonds that are the subject of such Submitted Bid;




     (iv) the Submitted Bid of each Potential’ Owner specifying any rate that is lower than
the Winning Bid Rate shall be accepted, thus requiring each such Potential Owner to purchase
the Bonds that are the subject of such Submitted Bid;




     (v) the Submitted Bid of each Existing Owner specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus requiring each such Existing Owner to continue to
hold the Bonds that are the subject of such
Submitted Bid, but only up to and including the principal amount of Bonds obtained by
multiplying (A) the aggregate principal amount of Bonds outstanding which are not the
subject of Submitted Hold Orders described in sub-paragraph (i) of this paragraph (a) or of
Submitted Bids described in sub-paragraphs (iii) and (iv) of this paragraph (a) by (B) a
fraction the numerator of which shall be the principal amount of Bonds outstanding held by
such Existing Owner subject to such Submitted Bid and the denominator of which shall be the
aggregate principal amount of Bonds outstanding subject to such Submitted Bids made by all
such Existing Owners that specified a rate equal to the Winning Bid Rate, and the remainder,
if any, of such Submitted Bid shall be rejected, thus requiring each such Existing Owner to
sell any excess amount of Bonds;



B-13









 






     (vi) the Submitted Bid of each Potential Owner specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus requiring each such Potential Owner to purchase the
Bonds that are the subject of such Submitted Bid, but only in an amount equal to the
principal amount of Bonds obtained by multiplying (A) the aggregate principal amount of
Bonds outstanding which are not the subject of Submitted Hold Orders described in
sub-paragraph (i) of this paragraph (a) or of Submitted Bids described in sub-paragraphs
(iii), (iv) or (v) of this paragraph (a) by (B) a fraction the numerator of which shall be
the principal amount of Bonds outstanding subject to such Submitted Bid and the denominator
of which shall be the sum of the aggregate principal amount of Bonds outstanding subject to
such Submitted Bids made by all such Potential Owners that specified a rate equal to the
Winning Bid Rate, and the remainder of such Submitted Bid shall be rejected; and




     (vii) the Submitted Bid of each Potential Owner specifying any rate that is higher than
the Winning Bid Rate shall be rejected.



     (b) In the event there are not Sufficient Clearing Bids, subject to the further provisions of
subsections (c) and (d) below, Submitted Orders shall be accepted or rejected as follows in the
following order of priority:




     (i) the Submitted Hold Order of each Existing Owner shall be accepted, thus requiring
each such Existing Owner to continue to hold the Bonds that are the subject of such
Submitted Hold Order;




     (ii) the Submitted Bid of each Existing Owner specifying any rate that is not higher
than the Maximum Auction Rate shall be accepted, thus requiring each such Existing Owner to
continue to hold the Bonds that are the subject of such Submitted Bid;




     (iii) the Submitted Bid of each Potential Owner specifying any rate that is not higher
than the Maximum Auction Rate shall be accepted, thus requiring each such Potential Owner to
purchase the Bonds that are the subject of such Submitted Bid;




     (iv) the Submitted Sell Orders of each Existing Owner shall be accepted as Submitted
Sell Orders and the Submitted Bids of each Existing Owner specifying any rate that is higher
than the Maximum Auction Rate shall be deemed to be and shall be accepted as Submitted Sell
Orders, in both cases only up to and including the principal amount of Bonds obtained by
multiplying (A) the aggregate principal amount of Bonds subject to Submitted Bids described
in paragraph (iii) of this subsection (b) by (B) a fraction the numerator of which shall be
the principal amount of Bonds outstanding held by such Existing Owner subject to such
Submitted Sell



B-14









 







Order or such Submitted Bid deemed to be a Submitted Sell Order and the
denominator of which shall be the principal amount of Bonds outstanding subject to all such
Submitted Sell Orders and such Submitted Bids deemed to be Submitted Sell Orders, and the
remainder of each such Submitted Sell Order or Submitted Bid shall be deemed to be and shall
be accepted as a Hold Order and each such Existing Owner shall be required to continue to
hold such excess amount of Bonds; and




     (v) the Submitted Bid of each Potential Owner specifying any rate that is higher than
the Maximum Auction Rate shall be rejected.



     (c) If, as a result of the procedures described in subsection (a) or (b) of this Section 2.05,
any Existing Owner or Potential Owner would be required to purchase or sell an aggregate principal
amount of Bonds which is not an integral multiple of $1,000 on any Auction Date, the Auction Agent
shall by lot, in such manner as it shall determine in its sole discretion, round up or down the
principal amount of Bonds to be purchased or sold by any Existing Owner or Potential Owner on such
Auction Date so that the aggregate principal amount of Bonds purchased or sold by each Existing
Owner or Potential Owner on such Auction Date shall be an integral multiple of $1,000, even if such
allocation results in one or more of such Existing Owners or Potential Owners not purchasing or
selling any Bonds on such Auction Date.



     (d) If, as a result of the procedures described in subsection (a) of this Section 2.05, any
Potential Owner would be required to purchase less than $1,000 in principal amount of Bonds on any
Auction Date, the Auction Agent shall by lot, in such manner as it shall determine in its sole
discretion, allocate Bonds for purchase among Potential Owners so that the principal amount of
Bonds purchased on such Auction Date by any Potential Owner shall be an integral multiple of
$1,000, even if such allocation results in one or more of such Potential Owners not purchasing
Bonds on such Auction Date.



     (e) If the Broker-Dealer holds any Bonds for its own account on an Auction Date, the
Broker-Dealer must submit a Sell Order into the Auction with respect to such Bonds.



     Section 2.06. Notice of Auction Rate.



     (a) On each Auction Date, the Auction Agent shall notify by telephone or other electronic
means or in writing each Broker-Dealer that participated in the Auction held on such Auction Date
and submitted an Order on behalf of any Existing Owner or Potential Owner of the following:




     (i) the Auction Mode Rate determined on such Auction Date for the succeeding Auction
Period;



B-15









 






     (ii) whether Sufficient Clearing Bids existed for the determination of the Winning Bid
Rate;




     (iii) if such Broker-Dealer submitted a Bid or a Sell Order on behalf of an Existing
Owner, whether such Bid or Sell Order was accepted or rejected, in whole or in part, and the
principal amount of Bonds, if any, to be sold by such Existing Owner;




     (iv) if such Broker-Dealer submitted a Bid on behalf of a Potential Owner, whether such
Bid was accepted or rejected, in whole or in part, and the principal amount of Bonds, if
any, to be purchased by such Potential Owner;




     (v) if the aggregate principal amount of the Bonds to be sold by all Existing Owners on
whose behalf such Broker-Dealer submitted Bids or Sell Orders is different from the
aggregate principal amount of Bonds to be purchased by all Potential Owners on whose behalf
such Broker-Dealer submitted a Bid, the name or names of one or more Broker-Dealers (and the
Agent Member, if any, of each such other Broker-Dealer) and the principal amount of Bonds to
be (A) purchased from one or more Existing Owners on whose behalf such other Broker-Dealers
submitted Bids or Sell Orders or (B) sold to one or more Potential Owners on whose behalf
such Broker-Dealer submitted Bids; and




     (vi) the immediately succeeding Auction Date.



     (b) On each Auction Date, each Broker-Dealer that submitted an Order on behalf of any Existing
Owner or Potential Owner shall:




     (i) advise each Existing Owner and Potential Owner on whose behalf such Broker-Dealer
submitted an Order as to (A) the Auction Mode Rate determined on such Auction Date, (B)
whether any Bid or Sell Order submitted on behalf of each such Owner was accepted or
rejected and (C) the immediately succeeding Auction Date;




     (ii) instruct each Potential Owner on whose behalf such Broker-Dealer submitted a Bid
that was accepted, in whole or in part, to instruct such Potential Owner’s Agent Member to
pay to such Broker-Dealer (or its Agent Member) through the Securities Depository the amount
necessary to purchase the principal amount of Bonds to be purchased pursuant to such Bid
(including, with respect to the Bonds in a daily Auction Period, accrued interest if the
purchase date is not an Interest Payment Date for such Bond) against receipt of such Bonds;
and




     (iii) instruct each Existing Owner on whose behalf such Broker-Dealer submitted a Sell
Order that was accepted or a Bid that was rejected in



B-16









 







whole or in part to instruct such
Existing Owner’s Agent Member to deliver to such Broker-Dealer (or its Agent Member) through
the Securities Depository the principal amount of Bonds to be sold pursuant to such Bid or
Sell Order against payment therefore.



     Section 2.07. Reference Rate.



     (a) The Reference Rate on any Auction Date with respect to Bonds in any Auction Period of 35
days or less shall be the greater of (a) the offered rate for deposits in U.S. dollars for a
one-month period (LIBOR) which appears on the Bloomberg at approximately 11:00 A.M., London time,
on such date, or if such date is not a date on which dealings in U.S. dollars are transacted in the
London interbank market, then on the next preceding day on which such dealings were transacted in
such market, or (b) the BMA Index at approximately 9:30 A.M., New York time, on such date. The
Reference Rate with respect to Bonds in any Auction Period of more than 35 days shall be the rate
on Treasury securities having a maturity which most closely approximates the length of the Auction
Period, as last published in The Wall Street Journal. If either rate is unavailable, the Reference
Rate shall be an index or rate agreed to by all Broker-Dealers and consented to by the Company.



     (b) If for any reason on any Auction Date the Reference Rate shall not be determined as
hereinabove provided in this Section, the Reference Rate shall be the Reference Rate for the
Auction Period ending on such Auction Date.



     (c) The determination of the Reference Rate as provided herein shall be conclusive and binding
upon the Issuer, the Company, the Trustee, the Remarketing Agent, the Broker-Dealers, the Auction
Agent and the Owners and Beneficial Owners of the Bonds.



     Section 2.08. Miscellaneous Provisions Regarding Auctions.



     (a) In this Exhibit B, each reference to the purchase, sale or holding of Bonds shall refer to
beneficial interests in Bonds, unless the context clearly requires otherwise.



     (b) During an Auction Rate Period, the provisions of the Indenture and the definitions
contained therein and described in this Exhibit B, including without limitation the definitions of
All Hold Rate, Interest Payment Date, Maximum Auction Rate, Reference Rate, Applicable Percentage
and Auction Mode Rate, may be amended pursuant to the Indenture by obtaining the consent of the
owners of all Bonds bearing interest at an Auction Mode Rate as follows. If, on the first Auction
Date occurring at least 20 days after the date on which the Trustee mailed notice of such proposed
amendment to the registered owners of the Bonds as required by the Indenture, (i) the Auction Mode
Rate which is determined on such date is the Winning Bid Rate and (ii) there is delivered to the
Company and the Trustee an



B-17









 




Opinion of Tax Counsel to the effect that such amendment shall not adversely affect the
validity of the Bonds or any exemption from federal income tax to which the interest on the Bonds
would otherwise be entitled, the proposed amendment shall be deemed to have been consented to by
the owners of all Bonds affected by such amendment.




     (c) During an Auction Rate Period, so long as the ownership of the Bonds is maintained in
book-entry form by the Securities Depository, an Existing Owner or a Beneficial Owner may sell,
transfer or otherwise dispose of a Bond only pursuant to a Bid or Sell Order in accordance with the
Auction Procedures or to or through a Broker-Dealer, provided that (i) in the case of all transfers
other than pursuant to Auctions, such Existing Owner or its Broker-Dealer or its Agent Member
advises the Auction Agent of such transfer and (ii) a sale, transfer or other disposition of Bonds
from a customer of a Broker-Dealer who is listed on the records of that Broker-Dealer as the
Existing Owner of such Bonds to that Broker-Dealer or another customer of that Broker-Dealer shall
not be deemed to be a sale, transfer or other disposition for purposes of this Section 2.08 if such
Broker-Dealer remains the Existing Owner of the Bonds so sold, transferred or disposed of
immediately after such sale, transfer or disposition.



     Section 2.09. Changes in Auction Period or Auction Date.



     (a) Changes in Auction Period.




     (i) During any Auction Rate Period, the Company, may, from time to time on any Interest
Payment Date, change the length of the Auction Period with respect to all of the Bonds in
order to accommodate economic and financial factors that may affect or be relevant to the
length of the Auction Period and the interest rate borne by such Bonds. Any such change in
the Auction Period shall be deemed to be a change in Determination Method. The Company shall
initiate the change in the length of the Auction Period by giving a Conversion Notice
pursuant to Section 2.02(b)(1) of the Indenture.




     (ii) The change in the length of the Auction Period shall not be effective unless
Sufficient Clearing Bids existed at both the Auction before the date on which the notice of
the proposed change was given as provided in this subsection (a) and the Auction immediately
preceding the proposed change.




     (iii) The change in length of the Auction Period shall take effect only if (i)
Sufficient Clearing Bids exist at the Auction on the Auction Date for such first Auction
Period and (ii) on the proposed effective date, the Company provides the Trustee with a
Favorable Opinion of Tax Counsel as to such change in the Auction Period. For purposes of
the Auction for such first Auction Period only, each Existing Owner shall be deemed to have
submitted



B-18









 







Sell Orders with respect to all of its Bonds except to the extent such Existing
Owner submits an Order with respect to such Bonds. If the conditions referred to in the
first sentence of this sub-paragraph (iii) are not met, the
Trustee shall notify the Auction Agent and then the Auction Mode Rate for the next
Auction Period shall be the Maximum Auction Rate, and the Auction Period shall be a
seven-day Auction Period.




     (iv) On the conversion date of the Bonds selected for conversion from one Auction
Period to another, any Bonds which are not the subject of a specific Hold Order or Bid will
be deemed to be subject to a Sell Order.



     (b) Changes in Auction Date. During any Auction Rate Period, the Auction Agent, with
the written consent of the Company, may specify an earlier Auction Date (but in no event more than
five Business Days earlier) than the Auction Date that would otherwise be determined in accordance
with the definition of “Auction Date” in order to conform with then current market practice with
respect to similar securities or to accommodate economic and financial factors that may affect or
be relevant to the day of the week constituting an Auction Date and the interest rate borne on the
Bonds. The Auction Agent shall provide notice of its determination to specify an earlier Auction
Date for an Auction Period by means of a written notice delivered at least 45 days prior to the
proposed changed Auction Date to the Trustee, the Issuer, the Company, the Broker-Dealers, the
Remarketing Agent, and the Securities Depository.



ARTICLE III




Auction Agent



     Section 3.01. Auction Agent.



     (a) The Auction Agent shall be appointed by the Company to perform the functions specified
herein. The Auction Agent shall designate its Principal Office and signify its acceptance of the
duties and obligations imposed upon it hereunder by a written instrument, delivered to the Company,
the Trustee, the Issuer and each Broker-Dealer which shall set forth such procedural and other
matters relating to the implementation of the Auction Procedures as shall be satisfactory to the
Issuer, the Company and the Trustee.



     (b) Subject to any applicable governmental restrictions, the Auction Agent may be or become
the owner of or trade in Bonds with the same rights as if such entity were not the Auction Agent.



     Section 3.02. Qualifications of Auction Agent; Resignation; Removal. The Auction Agent shall
be (a) a bank or trust company organized under the laws of the United States or any state or
territory thereof having a combined capital stock, surplus and undivided profits of at least
$30,000,000 or (b) a member of NASD



B-19









 







having a capitalization of at least $30,000,000 and, in either
case, authorized by law to perform all the duties and obligations imposed upon it by this Indenture
and a member of or a participant in the Securities Depository. The Auction Agent may at any time
resign and be discharged of the duties and obligations created by this
Indenture by giving at least 90 days notice to the Company, the Issuer and the Trustee. The
Auction Agent may be removed at any time by the Company by written notice delivered to the Auction
Agent, the Issuer and the Trustee. Upon any such resignation or removal, the Company shall appoint
a successor Auction Agent meeting the requirements of this section. In the event of the resignation
or removal of the Auction Agent, the Auction Agent shall pay over, assign and deliver any moneys
and Bonds held by it in such capacity to its successor. The Auction Agent shall continue to perform
its duties hereunder until its successor has been appointed by the Company. In the event that the
Auction Agent has not been compensated for its services, the Auction Agent may resign by giving
forty-five (45) days notice to the Company, the Issuer and the Trustee even if a successor Auction
Agent has not been appointed.








B-20









 








EXHIBIT C




Requisition from Project Fund For



Mississippi Business Finance Corporation



$200,000,000 Gulf Opportunity Zone



Industrial Development Revenue Bonds



(Northrop Grumman Ship Systems, Inc. Project),



Series 2006



	 	 	 	 	 

	TO:

	 	The Bank of New York Trust Company, N.A., as Trustee	 	 
	 
	 	 	 	 
	FROM:

	 	Northrop Grumman Ship Systems, Inc.
	 	Dated:                     






     Pursuant to Section 3.1 of the Loan Agreement dated as of December 1, 2006 (the “Loan
Agreement”), between the Mississippi Business Finance Corporation (the “Issuer”) and Northrop
Grumman Ship Systems, Inc., a Delaware corporation (the “Company”), you are hereby directed to
disburse from the Project Fund referred to in the Loan Agreement (the “Project Fund”) the amount
indicated below.




	 	1.	 	The name and address of the person, firm or corporation to whom payment is due:





	 	 	 	 	 

	 

	 	Name:
	 	Northrop Grumman Ship Systems, Inc.
	 	 	 	 	 
	 
	 	 	 	 
	 

	 	Bank:
	 	JP Morgan Chase, New York
	 
	 	 	 	 
	 

	 	ABA No:
	 	021000021
	 
	 	 	 	 
	 

	 	Account No:
	 	323362605
	 
	 	 	 	 
	 	 	The parties named in the attachment hereto.
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 






	 	2.	 	Amount to be disbursed:
	 
	 	3.	 	The disbursement herein requested is for obligations properly incurred, is a
proper charge against the Project Fund in accordance with the Loan Agreement and has
not been the basis of any previous requisition from the Project Fund or from the
proceeds (including investment income) of any other obligations issued by or on behalf
of any state or political subdivision,




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	 	 	 	including authorities, agencies, departments or other similar issuers. The amount
requisitioned hereby is being expended in a manner consistent in all material
respects with the covenants, representations and warranties of the Company set forth
in the Loan Agreement, including but not limited to the Company’s specific tax
covenants set forth in Section 4.10 of the Loan Agreement.





	 	 	 	 	 	 	 

	 	 	Northrop Grumman Ship Systems, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Authorized Company Representative	 	 









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SCHEDULE TO REQUISITION AND CERTIFICATE NO.                     




	 	 	 	 	 	 	 	 	 
	Payee	 	Item	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 






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