Document:

Exhibit
10.5

 

LOAN
AGREEMENT

Dated
as of March 1, 1998

By
and Between

CITY
OF LADYSMITH, WISCONSIN

and

CITYFOREST
CORPORATION

Relating
to:

$27,000,000

CITY
OF LADYSMITH, WISCONSIN

VARIABLE RATE DEMAND
SOLID WASTE DISPOSAL FACILITY

REVENUE BONDS,

SERIES 1998 (CITYFOREST
CORPORATION PROJECT)

 

Notice of Assignment:

All rights and interest
of the City of Ladysmith under this Loan Agreement have (with certain
exceptions) been assigned to Norwest Bank Wisconsin, N.A., Milwaukee,
Wisconsin, under an Indenture of Trust dated even herewith.

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  PAGE

  
	
  ARTICLE I
  DEFINITIONS AND USE OF PHRASES

  	
   

  	
   

  
	
  Section 1.01 

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  Section 1.02 

  	
   

  	
  Use of Phrases; Rules of Construction

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE
  LOAN

  	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  Issuance of Bonds to Finance the Project

  	
   

  	
  4

  
	
  Section 2.02 

  	
   

  	
  Making of the Loan

  	
   

  	
  4

  
	
  Section 2.03 

  	
   

  	
  Acceptance and Evidence of the Loan

  	
   

  	
  4

  
	
  Section 2.04 

  	
   

  	
  Direct, Unsecured Obligation

  	
   

  	
  5

  
	
  Section 2.05 

  	
   

  	
  Pledge and Assignment to Trustee

  	
   

  	
  5

  
	
  Section 2.06 

  	
   

  	
  Loan Repayment

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  CONSTRUCTION OF THE PROJECT.

  	
   

  	
   

  
	
  Section 3.01 

  	
   

  	
  Agreement to Complete the Project

  	
   

  	
  5

  
	
  Section 3.02 

  	
   

  	
  Manner of Procuring Disbursements from the Cost of
  Issuance Fund

  	
   

  	
  6

  
	
  Section 3.03 

  	
   

  	
  Manner of Procuring Disbursements from the
  Construction Fund

  	
   

  	
  6

  
	
  Section 3.04 

  	
   

  	
  Amendments to Project Plans and Specifications

  	
   

  	
  7

  
	
  Section 3.05 

  	
   

  	
  Establishment of Project Completion Date

  	
   

  	
  7

  
	
  Section 3.06 

  	
   

  	
  Closing of Construction Fund

  	
   

  	
  7

  
	
  Section 3.07 

  	
   

  	
  Maintenance and Improvement of Project

  	
   

  	
  8

  
	
  Section 3.08 

  	
   

  	
  Agreements for the Benefit of the Issuer

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV CONVERSION OF INTEREST RATE, REMARKETING AGENT

  AND CREDIT FACILITIES

  	
   

  	
   

  
	
  Section 4.01 

  	
   

  	
  Conversion of Interest Rate

  	
   

  	
  8

  
	
  Section 4.02 

  	
   

  	
  Concerning the Remarketing Agent

  	
   

  	
  9

  
	
  Section 4.03 

  	
   

  	
  Concerning Substitute Credit Facilities

  	
   

  	
  9

  
	
  Section 4.04 

  	
   

  	
  References to Credit Facility Provider After
  Expiration or Default of Credit Facility

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  PREPAYMENT OF PROMISSORY NOTE

  	
   

  	
   

  
	
  Section 5.01 

  	
   

  	
  Optional Prepayment of Promissory Note Upon
  Occurrence of Certain Extraordinary Events

  	
   

  	
  9

  
	
  Section 5.02 

  	
   

  	
  Mandatory Prepayment of Promissory Note Upon
  Determination of Taxability or Expiration of Credit Facility

  	
   

  	
  10

  
	
  Section 5.03 

  	
   

  	
  Optional Prepayment of the Promissory Note

  	
   

  	
  11

  
	
  Section 5.04 

  	
   

  	
  Deposit of Prepayments in Redemption Fund

  	
   

  	
  12

  
	
  Section 5.05 

  	
   

  	
  Corresponding Redemption of Bonds

  	
   

  	
  12

  
	
  Section 5.06

  	
   

  	
  Purchase and Cancellation of Bonds

  	
   

  	
  12

  

 

 i
 

 

	
  ARTICLE VI REPRESENTATIONS OF BORROWER

  	
   

  	
   

  
	
  Section 6.01 

  	
   

  	
  Corporate Existence and Authorizations

  	
   

  	
  12

  
	
  Section 6.02 

  	
   

  	
  Absence of Conflicting Agreements

  	
   

  	
  12

  
	
  Section 6.03 

  	
   

  	
  Absence of Litigation

  	
   

  	
  12

  
	
  Section 6.04 

  	
   

  	
  Regulatory Approvals

  	
   

  	
  13

  
	
  Section 6.05 

  	
   

  	
  Date and Survival of Representations; Exceptions

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  COVENANTS OF BORROWER

  	
   

  	
   

  
	
  Section 7.01 

  	
   

  	
  Payment of Promissory Note

  	
   

  	
  13

  
	
  Section 7.02 

  	
   

  	
  Unconditional Obligation to Provide the Issuer with
  Sufficient Revenues

  	
   

  	
  13

  
	
  Section 7.03 

  	
   

  	
  Indemnification of Issuer

  	
   

  	
  14

  
	
  Section 7.04 

  	
   

  	
  Taxes, Licenses, Utilities and Governmental Charges

  	
   

  	
  15

  
	
  Section 7.05 

  	
   

  	
  Insurance

  	
   

  	
  15

  
	
  Section 7.06 

  	
   

  	
  Tax Status of Bonds

  	
   

  	
  15

  
	
  Section 7.07 

  	
   

  	
  Sale or Transfer of Project

  	
   

  	
  17

  
	
  Section 7.08 

  	
   

  	
  Maintenance of Corporate Existence

  	
   

  	
  17

  
	
  Section 7.09 

  	
   

  	
  Transfers of Assets

  	
   

  	
  18

  
	
  Section 7.10 

  	
   

  	
  Debt Service Reserve Fund

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  DAMAGE; EMINENT DOMAIN

  	
   

  	
   

  
	
  Section 8.01 

  	
   

  	
  Damage

  	
   

  	
  18

  
	
  Section 8.02 

  	
   

  	
  Eminent Domain

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX THE
  TRUSTEE AND TRUST FUNDS

  	
   

  	
   

  
	
  Section 9.01 

  	
   

  	
  Payment of Trustee’s Fees

  	
   

  	
  19

  
	
  Section 9.02 

  	
   

  	
  Duty to Provide Data

  	
   

  	
  20

  
	
  Section 9.03 

  	
   

  	
  Investment of Trust Funds; Arbitrage

  	
   

  	
  20

  
	
  Section 9.04 

  	
   

  	
  Bond Fund and Redemption Fund

  	
   

  	
  21

  
	
  Section 9.05 

  	
   

  	
  Excess Trust Fund Moneys

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE X DEFAULT
  PROVISIONS

  	
   

  	
   

  
	
  Section 10.01 

  	
   

  	
  Defaults; Events of Default

  	
   

  	
  21

  
	
  Section 10.02 

  	
   

  	
  Acceleration

  	
   

  	
  22

  
	
  Section 10.03 

  	
   

  	
  Remedies

  	
   

  	
  22

  
	
  Section 10.04 

  	
   

  	
  Disposition of Amounts Collected

  	
   

  	
  22

  
	
  Section 10.05 

  	
   

  	
  Payment of Costs and Expenses

  	
   

  	
  22

  
	
  Section 10.06 

  	
   

  	
  Limitation on Waivers

  	
   

  	
  23

  
	
  Section 10.07 

  	
   

  	
  Performance by Third Parties

  	
   

  	
  23

  
	
  Section 10.08 

  	
   

  	
  Performance for Issuer Under Indenture

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  MISCELLANEOUS

  	
   

  	
   

  
	
  Section 11.01 

  	
   

  	
  Amendments

  	
   

  	
  23

  
	
  Section 11.02 

  	
   

  	
  Successors

  	
   

  	
  24

  
	
  Section 11.03 

  	
   

  	
  Governing Law

  	
   

  	
  24

  

 

 ii
 

 

	
  Section 11.04 

  	
   

  	
  Captions and Dates

  	
   

  	
  24

  
	
  Section 11.05 

  	
   

  	
  Counterparts

  	
   

  	
  24

  
	
  Section 11.06 

  	
   

  	
  Notices

  	
   

  	
  24

  
	
  Section 11.07 

  	
   

  	
  Severability

  	
   

  	
  24

  
	
  Section 11.08 

  	
   

  	
  Termination

  	
   

  	
  25

  
	
  Section 11.09 

  	
   

  	
  Limited Liability of Issuer

  	
   

  	
  25

  

EXHIBITS

Exhibit A - Form of
Promissory Note 

Exhibit B - Form of Conversion Notice 

Exhibit C - Form of Reset Notice 

Exhibit D - Form of Requisition 

Exhibit E - Eligible Costs of the Project

 

 iii

LOAN
AGREEMENT

THIS LOAN AGREEMENT, made
and entered into as of March 1, 1998, by and between the CITY OF LADYSMITH,
WISCONSIN, a political subdivision and body corporate and politic existing
under the laws of the State of Wisconsin (the “Issuer”) and CITYFOREST
CORPORATION, a Minnesota corporation authorized to do business in the state of
Wisconsin (the “Borrower”);

WITNESSETH:

WHEREAS, the Issuer is
authorized pursuant to the provisions of the laws of the State of Wisconsin,
including specifically, but without limitation, Section 66.521, Wisconsin
Statutes (the “Act”), to issue its revenue bonds to finance or refinance all or
any part of the construction, equipping, re-equipping, acquisition, purchase,
installation, reconstruction, rebuilding, rehabilitation, improving,
supplementing, replacing, maintaining, repairing, enlarging, extending or
remodeling of qualified projects and the improvement of sites therefor within
and outside of the territory of the Issuer; and

WHEREAS, the Issuer is
further authorized by the Act to issue its revenue bonds, payable solely and
only from the revenues and receipts to be derived by the Issuer from the
Borrower, to provide funds to pay, in whole or in part, or to reimburse the
Borrower for, the costs of such qualified projects; and

WHEREAS, the Issuer has
induced the Borrower to proceed with the Project (as hereinafter defined) in
the territory of the Issuer by offering to issue the Bonds (as hereinafter
defined) and to loan the proceeds thereof to the Borrower for the purpose of
paying certain costs of the Project; and

WHEREAS, the Issuer will
receive substantial municipal benefits from the Project, including by way of
illustration but not limitation: retention of and more steady employment of its
citizens resulting in the alleviation of unemployment within the Issuer;
maintenance or increase in the tax base of the Issuer resulting in greater
support for education and municipal services; stimulation for expansion of
existing and new business; stimulation of private investment funds from
financial institutions; and betterment of the Issuer’s environment and economy;
and

WHEREAS, the Issuer’s
governing body has found and determined that the Project is a qualified project
under the Act, that the Borrower is an eligible participant under the Act, and
that this Loan Agreement meets the requirements of a revenue agreement under
the Act; and

WHEREAS, the Issuer’s
governing body has found and determined the financing of the Project with the
Bonds will serve the intended accomplishments of public purpose and will in all
respects conform to the provisions and requirements of the Act; and

WHEREAS, the execution
and delivery of this Loan Agreement have been in all respects duly and validly
authorized by resolution of the Issuer’s governing body, and no

sufficient petition for a
referendum has been filed pursuant to the provisions of subsection (10)(d) of
the Act;

WHEREAS,
the execution and delivery of this Loan Agreement have been in all respects
duly and validly authorized by resolution of the Issuer’s governing body;

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

ARTICLE I

DEFINITIONS AND USE OF PHRASES

Section 1.01  Definitions.

As
used in this Loan Agreement and the recitals hereto, the terms and phrases
defined in the Indenture of Trust dated even herewith between the Issuer and
U.S. Bank National Association, as trustee, shall, except as set forth below,
have the same meanings herein. In addition:

“Bond
Discount” means the difference, if any, between the Bond Amount and the
price at which the Bonds are sold by the Issuer to the original purchaser(s) of
the Bonds.

“Eligible
Costs of the Project” means the following categorical costs of providing
the Project:

(a)
the “Bond Issuance Costs”, namely the costs, fees and expenses incurred
or to be incurred by the Borrower in connection with the issuance and sale of
the Bonds which are subject to the limitation described in Section 147(g)(l) of
the Internal Revenue Code, including commitment, underwriting, remarketing or
other financing fees, the fees and disbursements of Bond Counsel, the Trustee’s
acceptance fee, the filing and recording fees in connection with any filings or
recording necessary under the Indenture or to perfect the lien thereof, any
administrative fee of the Issuer, the fees and disbursements of counsel to the
Issuer, the fees and disbursements of counsel to the Borrower, the fees and
disbursements of counsel to the underwriter, the fees and disbursements of
counsel to the Credit Facility Provider, rating agency fees, the fees and
disbursements of the Borrower’s accountants, the costs of preparing or printing
the Bonds and the documentation supporting the issuance of the Bonds, the costs
of any title insurance policies, appraisals, environmental audits and similar
costs relating to the Project or other security for the Borrower’s obligations
under the Credit Facility Reimbursement Agreement, and any other costs of a
similar nature reasonably incurred;

 2
 

(b)
the “Capitalized Interest Costs”, namely interest on the Bonds from the
date of their original delivery to the Completion Date and certain fees of the
Credit Facility Provider approved in writing by Bond Counsel;

(c)
the “Engineering Costs”, namely (i) the architectural and engineering
costs and other costs which are or were necessary for the design and planning
of the Project and which were paid or incurred after November 13, 1995 and/or
(ii) costs which constitute preliminary expenditures as such term is used in
Treas. Reg. §1.150-2(f);

(d)
the “Basic Project Costs”, namely those costs of acquiring, constructing
and installing the Project which were paid or incurred after November 13, 1995
and which were or are for the purpose of providing land or property of a
character subject to the allowance for depreciation under Section 167 of the
Internal Revenue Code;

(e)
the “Other Costs”, namely such other costs paid or incurred in
connection with the Project or the financing thereof which, in the opinion of
Bond Counsel, may be paid or reimbursed to the Borrower from the Construction
Fund without adverse effect on the legality of the Bonds or the exclusion of
interest thereon from gross income for federal income tax purposes under Sections
103(a) and 142 of the Internal Revenue Code; and

(f)
the “Debt Service Reserve Fund Costs” means an amount up to $500,000 to
be paid to the Credit Facility Provider for deposit in the Debt Service Reserve
Fund.

“Event of Default”
means any of the events designated as such in Section 10.01 of this Loan
Agreement.

“Loan” means the Loan
described in Section 2.02 hereof.

Section
1.02  Use of Phrases: Rules of
Construction.

The
following provisions shall be applied wherever appropriate herein:

“Herein”,
“hereby”, “hereunder”, “hereof” and other equivalent words
refer to this Loan Agreement as an entirety and not solely to the particular
portion of this Loan Agreement in which any such word is used.

The
definitions set forth in Section 1.01 hereof shall be deemed applicable whether
the words defined are herein used in the singular or the plural.

Wherever
used herein, any pronoun or pronouns shall be deemed to include both the
singular and plural and to cover all genders.

 3
 

Unless otherwise
provided, any determinations or reports hereunder which require the application
of accounting concepts or principles shall be made in accordance with generally
accepted accounting principles.

ARTICLE
II

THE LOAN

Section 2.01  Issuance of Bonds to Finance the Project.

Simultaneously with the
delivery of this Loan Agreement, the Issuer shall issue, sell and deliver the
Bonds in the Bond Amount to provide it with funds to be loaned to the Borrower
pursuant to this Loan Agreement. The Bonds shall be issued in accordance with
the Indenture. The Borrower’s approval of the terms of the Bonds and the
Indenture shall be conclusively established by its execution and delivery of
this Loan Agreement. If for any reason the Bonds are not issued, sold and
delivered, the Issuer shall have no obligation to make the Loan and this Loan
Agreement and the Promissory Note shall each cease, terminate and be void.

Section
2.02  Making of the Loan.

The Issuer hereby makes a
Loan to the Borrower in the principal amount of the Bond Amount. The Loan shall
be deemed to have been made when the proceeds of the original sale of the Bonds
are delivered to the Trustee at the direction of the Issuer. Such proceeds
shall be apportioned by the Trustee and deposited in Trust Funds, as follows:

(a) An amount equal to the
Cost of Issuance Deposit Amount shall be paid to the Credit Facility Provider
for deposit into the Cost of Issuance Fund and the Initial Debt Service Amount
shall be paid to the Credit Facility Provider for deposit in the Debt Service
Reserve Fund; and

(b) The balance shall be
deposited into the Construction Fund.

The Bond Discount, if
any, shall be deemed to have been loaned to the Borrower and applied to the
Bond Issuance Costs. The Bond Amount equals (and the Loan consists of) the sum
of the Bond Discount plus items (a) and (b) above.

Section
2.03  Acceptance and Evidence of the
Loan.

The Borrower hereby
accepts the Loan and as evidence thereof hereby delivers the Promissory Note to
the Issuer. The Issuer hereby acknowledges receipt of the Promissory Note.

 4
 

Section 2.04  Direct,
Unsecured Obligation.

The
debt obligations of the Borrower under this Loan Agreement and the Promissory
Note are direct, unsecured obligations of the Borrower.

Section 2.05  Pledge
and Assignment to Trustee.

Simultaneously
with the delivery of this Loan Agreement, the Issuer shall pledge and assign to
the Trustee under the Indenture all of the Issuer’s right, title and interest
in and to the Promissory Note, this Loan Agreement and all of the Issuer’s
rights to receive payments thereunder and hereunder; provided, however, that
the Issuer reserves the right to enforce the Unassigned Rights in its own name
and for its own account. The Borrower hereby consents to such pledge and
assignment and agrees that the Trustee may enforce any and all rights,
privileges and remedies of the Issuer (other than the Unassigned Rights) under
or with respect to the Promissory Note and this Loan Agreement.

Section 2.06  Loan
Repayment.

The
Borrower shall repay the Loan in accordance with the terms of the Promissory
Note. The Promissory Note shall be in the Bond Amount and shall mature on the
Final Maturity Date, but shall be subject to prepayment, as provided therein
upon the establishment of Reset Periods and as otherwise provided in Article V
hereof. The Promissory Note shall bear interest from the date of issuance of
the Bonds, (i) prior to the Conversion Date, at the Variable Rate, and (ii)
thereafter, during each Reset Period, at the Adjusted Interest Rates from time
to time. Interest is payable (i) on and prior to the Conversion Date, on the
first Business Day of each month, commencing March 1, 1998, (ii) thereafter, on
March 1 and September 1 of each year, commencing the first such date which is
at least 30 days after the Conversion Date, and (iii) on each other Interest
Payment Date for the Bonds as provided in the Indenture. The payments on the
Promissory Note shall be made by the Borrower (or by the Credit Facility
Provider pursuant to the Credit Facility Reimbursement Agreement) directly to
the Trustee then acting under the Indenture. The Trustee shall deposit all
payments on the Promissory Note into the Bond Fund or the Redemption Fund as
provided in the Indenture.

The
Borrower’s principal and interest payment obligations on the Promissory Note shall
be discharged to the extent that the corresponding principal and interest
payments on the Bonds are made from the Bond Fund in accordance with the
provisions of the Indenture.

ARTICLE III

CONSTRUCTION OF THE PROJECT.

Section 3.01  Agreement
to Complete the Project.

The
Borrower agrees to complete, or cause to be completed, the construction,
acquisition and installation of the Project with all reasonable dispatch in
accordance with the

 5
 

Project Plans and
Specifications. If the moneys in the Construction Fund shall be insufficient to
pay the costs of completing the Project, the Borrower shall nevertheless
complete the same and shall be responsible for causing the costs thereof to be
paid. The Borrower shall procure any and all building permits, use and occupancy
permits, and other permits, licenses and authorizations necessary for the
construction, completion, occupancy and use of the Project.

Section 3.02  Manner
of Procuring Disbursements from the Cost of Issuance Fund.

Bond
Issuance Costs, to the extent financed by the Bonds, may be disbursed only from
the Cost of Issuance Fund and only in an aggregate amount not exceeding the
Cost of Issuance Deposit Amount. Upon requisition as hereinafter provided, the
moneys in the Cost of Issuance Fund shall be disbursed to or at the order of
the Borrower to pay (or reimburse the Borrower for) the Bond Issuance Costs
described in the definition of Eligible Costs of the Project herein.

Disbursements
from the Cost of Issuance Fund shall be made by the Trustee only upon receipt
of an appropriately completed Borrower’s Requisition substantially in the form
attached hereto as Exhibit D, executed on behalf of the Borrower by a Borrower’s
Representative, accompanied by the supporting information and documentation
specified therein and approved by the Credit Bank.

If
the moneys in the Cost of Issuance Fund shall be insufficient to pay all of the
Bond Issuance Costs, the Borrower shall not allocate Bond proceeds to the
payment of such difference. If there shall be any balance in the Cost of
Issuance Fund remaining after the earlier of the date which is 90 days after
the date of issuance of the Bonds or the date the Trustee receives a
certification by the Borrower’s Representative that all Bond Issuance Costs
have been paid, such remaining balance shall be transferred to the Construction
Fund, or if the Construction Fund has been closed pursuant to Section 3.06
hereof, to the Surplus Construction Fund.

Section 3.03  Manner
of Procuring Disbursements from the Construction Fund.

Upon
requisition as hereinafter provided, moneys in the Construction Fund shall be
disbursed to or at the order of the Borrower to pay (or reimburse the Borrower
for) the Engineering Costs, the Basic Project Costs and the Other Costs of the
Project described in the definition of Eligible Costs of the Project herein.

Disbursements
from the Construction Fund shall be made by the Trustee only upon receipt of an
appropriately completed Borrower’s Requisition substantially in the form
attached hereto as Exhibit D, executed on behalf of the Borrower by a Borrower’s
Representative and approved by the Credit Facility Provider and the Independent
Engineer. With respect to each such disbursement from the Construction Fund,
the Borrower must allocate each such amount set forth therein to an Eligible
Cost of the Project described in Exhibit E hereto, unless such cost is
allocated to Other Costs of the Project described in the definition of Eligible
Costs of the Project. The Trustee shall have the right to withhold disbursements
from the Construction Fund if the Borrower’s Requisition is incomplete or is
not approved by the Credit Facility

 6
 

Provider and the Independent
Engineer.  The Borrower may deposit
moneys into the Construction Fund from time to time as it deems desirable or
necessary.

Disbursements
from the Construction Fund shall be subject to such further terms and
conditions as are contained in the Credit Facility Reimbursement Agreement.

Section 3.04  Amendments
to Project Plans and Specifications.

Subject
to the conditions set forth in this Section 3.04 and the Credit Facility
Reimbursement Agreement, the Borrower shall have the right to amend its Project
Plans and Specifications and to issue change orders to contractors from time to
time as the Borrower shall deem necessary and in each such case, the borrower
will provide the Trustee an amended to Exhibit E executed by a Borrower’s
Representative.

The
Borrower agrees that it will make no amendment or change to the Project Plans
and Specifications which would (i) adversely affect the legality of the Bonds
or the exclusion of interest thereon from gross income under Section 142 of the
Internal Revenue Code, or (ii) be inconsistent with Section 3.08 of this Loan
Agreement.

Section 3.05  Establishment
of Project Completion Date.

The
Borrower shall evidence the completion of the Project by filing the following
items with the Issuer, the Credit Facility Provider and the Trustee:  a Borrower’s Certificate certifying, without
prejudice to any rights against third parties (i) that the Project has been
constructed, acquired and installed in accordance with Project Plans and
Specifications, (ii) the date of Project completion and, if applicable, the
respective dates of completion of each of the component phases of the Project,
and (iii) that all labor, services, materials and supplies used to construct,
acquire and install the Project have been paid in full, except for such portion
thereof (which shall be identified in detail) which the Borrower is disputing
in good faith and by appropriate proceeding.

Upon
such filing, the date specified in accordance with clause (ii) above shall be
the “Completion Date” for purposes of this Loan Agreement.

Section 3.06  Closing
of Construction Fund.

Upon
being furnished the items described in Section 3.05 hereof, the Trustee shall
close the Construction Fund and transfer the remaining balance therein, if any,
to the Surplus Construction Fund. If the Borrower has not filed such items by
ninety days prior to the third annual anniversary of the Effective Date, the
Borrower shall file with the Trustee a Borrower’s Certificate stating in detail
the reasons therefor, certifying the amounts, if any, which are then due and
owing to contractors, materialmen or other suppliers for the Project and
containing detailed estimates of the costs necessary to complete the Project in
accordance with the Project Plans and Specifications.

 7
 

Section 3.07  Maintenance
and Improvement of Project.

For
so long as any Bonds shall be Outstanding, the Borrower agrees to keep and maintain
the Project in good condition, repair and working order, except for ordinary
wear and tear and obsolescence. Subject to Section 3.08 hereof, the Borrower
may remodel, modify or otherwise improve the Project from time to time as the
Borrower in its discretion determines to be in its best interests.

Section 3.08  Agreements
for the Benefit of the Issuer.

The
Borrower represents that its present intention and expectation is to use the
Project for the Project Enterprise for so long as there shall be Bonds
Outstanding. Notwithstanding such intention and expectation, the Borrower shall
have the right to use the Project for any lawful purpose which in the opinion
of Bond Counsel will not affect adversely the validity of the Bonds or result
in the inclusion of interest on the Bonds in gross income for federal income
tax purposes. As an inducement to the Issuer to issue the Bonds, the Borrower
covenants to use its best efforts to cause the Project Enterprise to be
conducted in the Issuer’s jurisdiction for so long as there shall be Bonds
Outstanding.

The
Borrower covenants that it shall, on the date of the making of the Loan, and
two years after the date of the original issuance and sale of the Bonds, submit
to the Department of Commerce of the State of Wisconsin, information regarding
the net number of jobs eliminated, created or maintained on the Project site
and elsewhere in the State of Wisconsin as a result of the Project. The
Borrower further agrees to notify (1) the Department of Industry, Labor and Human
Relations and (2) the area private industry council under the Job Training
Partnership Act, 29 U.S.C. §§ 1501 to 1798, of any position to be filled within
the geographic limits of the Issuer prior to November 25, 1998, and to provide
such notices at least two weeks prior to advertising the position.

The
Borrower covenants that it will not discriminate based on race, creed, sex,
handicap, ethnic origin, age or marital status with regard to employment within
the Plant Complex or access to any portion of the Plant Complex generally open
to the public.

A
breach of the covenants contained in this Section 3.08 shall not be or be
deemed an “Event of Default” under this Loan Agreement.

ARTICLE IV

CONVERSION OF INTEREST
RATE, REMARKETING

AGENT AND CREDIT FACILITIES

Section
4.01  Conversion of Interest Rate.

The
Borrower shall have the right to convert the interest rate on the Bonds from
the Variable Rate to the Adjusted Interest Rates, and to cause stated
maturities to be assigned to

 8
 

the Bonds, by delivering a
Conversion Notice in the form of Exhibit B hereto to the Trustee and causing
the other conditions set forth in Section 302(B) of the Indenture to be
satisfied, and thereafter to establish Reset Periods from time to time by
delivering Reset Notices in the form of Exhibit C hereto in accordance with
Section 302(C) of the Indenture. In the event that any Proposed Conversion Date
established by the delivery of a Conversion Notice does not become the
Conversion Date, the Borrower shall have the right to establish another
Proposed Conversion Date in the same manner.

Section 4.02  Concerning
the Remarketing Agent.

The
Borrower shall at all times cause a Remarketing Agent meeting the requirements
of Section 310 of the Indenture to perform the functions required of the Remarketing
Agent hereunder and under the Indenture. The Borrower shall be responsible for
the payment of the fees and expenses of the Remarketing Agent. Any successor
Remarketing Agent shall be appointed by the Issuer at the direction of the
Borrower.

Section 4.03  Concerning
Substitute Credit Facilities.

The
Borrower may furnish Substitute Credit Facilities from time to time in
accordance with Section 1202 of the Indenture.

Section 4.04  References
to Credit Facility Provider After Expiration or Default of Credit Facility.

The
particular provisions of this Loan Agreement which require the approval,
consent or direction of, or notice to, the Credit Facility Provider apply only
while a Credit Facility is outstanding and if the Credit Facility Provider is
not in default in any payment required to be made on the Credit Facility.

ARTICLE V

PREPAYMENT OF PROMISSORY
NOTE

Section 5.01  Optional
Prepayment of Promissory Note Upon Occurrence of Certain Extraordinary Events.

At
the option of the Borrower, the Promissory Note may be prepaid in whole (but
not in part) if any of the following shall occur:

(a)
The Plant Complex shall have been damaged or destroyed to such extent that, in
the opinion of the Borrower expressed in a Borrower’s Certificate filed with
the Issuer, the Trustee and the Credit Facility Provider following such damage
or destruction, (i) it is not practicable or desirable to rebuild, repair or
restore the Plant Complex within a period of six consecutive months following
such damage or destruction, or (ii) the Borrower is or will be thereby
prevented from carrying on its

 9
 

normal operations at the Plant Complex for a period of at least six
consecutive months; or

(b) Title to or the
temporary use of all or substantially all the Plant Complex shall have been
taken under the exercise of the power of eminent domain by any governmental
authority to such extent that, in the opinion of the Borrower expressed in a
Borrower’s Certificate filed with the Issuer, the Trustee and the Credit
Facility Provider, the Borrower is or will be thereby prevented from carrying
on its normal operations at the Plant Complex for a period of at least six
consecutive months; or

(c) Any court or
administrative body of competent jurisdiction shall enter a judgment, order or
decree requiring the Borrower to cease all or any substantial part of its
operations at the Plant Complex to such extent that, in the opinion of the
Borrower expressed in a Borrower’s Certificate filed with the Issuer, the
Trustee and the Credit Facility Provider, the Borrower is or will be thereby
prevented from carrying on its normal operations at the Plant Complex for a
period of at least six consecutive months; or

(d) As a result of any
changes in the Constitution of Wisconsin or the Constitution of the United
States of America or of legislative or administrative action (whether state or
federal) or by final decree, judgment or order of any court or administrative
body (whether state or federal), this Loan Agreement shall have become void or
unenforceable or impossible of performance in accordance with the intent and
purposes of the parties as expressed in this Loan Agreement, or unreasonable
burdens or excessive liabilities shall have been imposed on the Issuer or the
Borrower as a consequence of the Bonds or the Promissory Note being
Outstanding, including without limitation federal, state or other ad valorem,
property, income or other taxes not being imposed on the date of this Loan
Agreement.

To exercise such option the Borrower shall give notice
to the Issuer and the Trustee within 120 days following the occurrence of the
event which is said to give rise to the right to exercise such option. The
notice shall refer to this Section 5.01, shall describe and give the date of
the subject event, shall have attached to it the requisite Borrower’s
Certificate, and shall direct a redemption of all Outstanding Bonds pursuant to
Section 405 of the Indenture on a specified Business Day for which the notice
of redemption required by Section 402 of the Indenture can be given. As a
further condition to the exercise of such option, the Borrower shall obtain the
written consent of the Credit Facility Provider.

Section
5.02  Mandatory Prepayment of
Promissory Note Upon Determination of Taxability or Expiration of Credit
Facility.

(a) The Borrower agrees
to prepay the entire outstanding principal balance of the Promissory Note if a
Determination of Taxability shall occur. The Issuer and the Borrower authorize
the Trustee to take actions necessary to call all Bonds for redemption pursuant
to Section 406(A) of the Indenture on the earliest practicable

 10
 

Business Day for which the Trustee can give notice
pursuant to Section 402 of the Indenture, and in any event, within 60 days
following the date on which a Determination of Taxability shall have occurred,
and to draw on the Credit Facility to prepay the Promissory Note in the amount
of 100% of the principal amount of the Bonds to be so redeemed and all interest
thereon accrued and to accrue to the date of redemption.

(b) After the Conversion Date,
the Borrower agrees to prepay the entire outstanding principal balance of the
Promissory Note on the first day of the month in which the Credit Facility
Expiration Date is to occur unless, at least 45 days prior to such date, the
Borrower shall have caused to be delivered to the Trustee a Substitute Credit
Facility meeting the requirements of Section 1202 of the Indenture or an
amendment to the Credit Facility extending the Credit Facility Expiration Date
by at least the lesser of one year or the period ending on the fifteenth day of
the month in which the next Reset Date is to occur. The Issuer and the Borrower
authorize the Trustee to take actions necessary to call all Bonds for
redemption pursuant to Section 406(B) of the Indenture on such date and to draw
on the Credit Facility to prepay the Promissory Note in the amount of 100% of
the principal amount of the Bonds to be so redeemed and all interest thereon
accrued and to accrue to the date of redemption.

Section 5.03  Optional Prepayment of the Promissory Note.

At the option of the
Borrower, the Promissory Note may be prepaid (i) prior to the Conversion Date
in whole or in part on any Business Day (ii) in whole or in part on the
Conversion Date or any Reset Date, and (iii) during any Reset Period, in whole
on any date or in part on any regularly scheduled Interest Payment Date which
is (a) on or after the third anniversary of the Conversion Date or Reset Date,
as the case may be, if the length of the Reset Period is at least five years,
but less than seven years, and (b) on or after the fourth anniversary of the
Conversion Date or Reset Date if the length of the Reset Period is seven years
or more. If the length of the Reset Period is less than five years, the
Promissory Note shall not thereafter be subject to prepayment pursuant to this
Section 5.03.

Such option may not be
exercised if a Determination of Taxability has occurred. To exercise such
option the Borrower shall give notice to the Issuer and the Trustee at least 45
days prior to the Business Day date specified therein as the redemption date.
Such notice shall refer to this Section 5.03, shall state the principal amount
of the prepayment, and shall direct the redemption of a like principal amount
of Bonds pursuant to Section 404 of the Indenture on a specified authorized
redemption date for which the notice of redemption required by Section 402 of
the Indenture can be given. If the prepayment shall be in part, it shall be in
the amount of $5,000 or a multiple thereof. As further conditions to the
exercise of such option, the Borrower shall obtain the written consent of the
Credit Facility Provider and (unless the Credit Facility provides for the
payment of any redemption premium required by Section 404 of the Indenture in
connection with such a prepayment) shall cause the Trustee to have in hand, on
the date the Trustee gives such redemption notice, Eligible Funds in an amount
equal to the amount of any such premium.

 11

Section
5.04  Deposit of Prepayments in
Redemption Fund.

All
prepayments by the Borrower of principal on the Promissory Note, together with
the premium, if any, shall be deposited by the Trustee when received into the
Redemption Fund. The accrued interest paid in connection with any such
prepayment shall be deposited into the Bond Fund.

Section
5.05  Corresponding Redemption of
Bonds.

All
authorized prepayments of the Promissory Note shall be applied to a
corresponding redemption of the Bonds.

Section
5.06  Purchase and Cancellation of
Bonds.

The
Borrower shall have the right to purchase any Outstanding Bond with Eligible
Funds and deliver it to the Trustee for cancellation. Any such purchase and
cancellation of a Bond made with Eligible Funds as to which the Trustee has
received a Preference Opinion shall ipso
facto reduce the unpaid principal balance of the Promissory Note on
the date of such cancellation by an amount equal to the unpaid principal amount
of such Bond.

ARTICLE VI

REPRESENTATIONS OF
BORROWER

Section 6.01  Corporate
Existence and Authorizations.

The
Borrower represents that it is a corporation duly organized and validly
existing under the laws of the State identified in the first paragraph of this
Loan Agreement and that it has obtained all corporate authorizations necessary
on its part for the due and valid execution and delivery of this Loan Agreement
and the Promissory Note and the assumption of the obligations represented
hereby and thereby.

Section 6.02  Absence
of Conflicting Agreements.

The
Borrower represents that the execution and delivery of this Loan Agreement and
the Promissory Note, and the performance by the Borrower hereunder and
thereunder, will not conflict with or constitute a breach of or default under
its Articles of Incorporation or bylaws, or any indenture, loan agreement or
instrument or agreement to which the Borrower is a party or by which the
Borrower or its properties are bound.

Section 6.03  Absence
of Litigation.

The
Borrower represents that it is not a party to any litigation or administrative
proceeding, nor so far as is known by the Borrower is any litigation or
administrative proceeding threatened against it which in either case would, if
adversely determined, cause any

 12
 

material adverse change in its power or ability to perform its
obligations under this Loan Agreement.

Section 6.04  Regulatory Approvals.

The Borrower represents
that no authorization, approval, consent or license of any governmental
regulatory body or authority, not already obtained, is required for the valid
and lawful execution and delivery of this Loan Agreement and the Promissory
Note by the Borrower or the assumption of the obligations of the Borrower
represented hereby and thereby.

Section 6.05  Date and Survival of Representations,
Exceptions.

The representations of
the Borrower made in this Article VI are made as of the date of closing of the
Loan, and all such representations shall survive the execution and delivery of
this Loan Agreement and the making of the Loan.

ARTICLE
VII

COVENANTS
OF BORROWER

Section 7.01  Payment of Promissory Note.

The Borrower agrees to
make the principal, premium, if any, and interest payments on the Promissory
Note in the manner and amounts and the times and places specified therein.

Section 7.02  Unconditional Obligation to Provide the
Issuer with Sufficient Revenues.

The Borrower
unconditionally agrees that it shall make payments to the Trustee (for the
account of the Issuer) in lawful money of the United States of America and in
such amounts and at such times (if not sooner required under the terms of this
Loan Agreement) as shall be necessary to enable the Trustee to make full and
prompt payment when due (whether at stated maturity, upon redemption prior to
stated maturity or upon acceleration of stated maturity), of the principal of,
premium, if any, and interest on all Bonds issued under the Indenture. The
obligation of the Borrower to make the payments required in this Section 7.02
shall be absolute and unconditional and shall not be subject to diminution by set
off, counterclaim, abatement or otherwise; and until such time as the principal
of, premium, if any, and interest on the Bonds shall have been paid or provided
for in accordance with the Indenture, the Borrower: (i) will not suspend or
discontinue, or permit the suspension or discontinuance of, any payments
provided for in this Section 7.02; (ii) will perform and observe all its other
agreements contained in this Loan Agreement; and (iii) will not terminate this
Loan Agreement for any cause including without limiting the generality of the
foregoing, any defect in title to the Project, failure of the Project to comply
with the Borrower’s plans and specifications, any acts or circumstances that
may constitute failure of consideration, destruction of or damage to the
Project, frustration of commercial purpose, any change in the tax or other laws
or

 13
 

administrative rulings of or administrative actions by
the United States of America or the State of Wisconsin or any political
subdivision of either, or any failure of the Issuer to perform and observe any
agreement, whether expressed or implied, or any duty, liability or obligation
arising out of or in connection with this Loan Agreement. Nothing contained in
this Section 7.02 shall be construed to release the Issuer from the performance
of any of the agreements on its part herein contained; and if the Issuer shall
fail to perform any such agreement on its part, the Borrower may institute such
action against the Issuer as the Borrower may deem necessary to compel performance,
provided that no such action shall violate the agreements on the part of the
Borrower contained in this Section 7.02, or diminish the amounts required to be
paid by the Borrower pursuant to this Section 7.02.

Section 7.03  Indemnification of Issuer.

Reference is made to
subsections (4)(a) and (10)(e) of the Act. Notwithstanding anything to the
contrary herein contained by implication or otherwise, the obligations of the
Issuer created by or arising out of this Loan Agreement shall not be general debt
obligations of the Issuer, do not constitute or give rise to charges against
its general credit or taxing powers and shall not constitute or give rise to
any personal liability of any member of the Issuer’s Governing Body or the
officers, agents and employees of the Issuer on the Bonds or for any act or
omission related to the authorization or issuance of the Bonds.

The Borrower agrees to
indemnify and hold harmless the Issuer and its officers, agents, employees and
officials from and against any and all losses, claims, damages, expenses
(including reasonable counsel fees) and liabilities caused by the Borrower and
arising from, in connection with, or as a result of the issuance of the Bonds,
the execution and delivery of this Loan Agreement and the Indenture or the
performance and observance by or on behalf of the Issuer of those things on the
part of the Issuer agreed to be performed or observed hereunder and thereunder.
Nothing in the foregoing indemnity shall protect the Issuer against its own
default, gross negligence or willful misconduct.

If any action shall be
brought against the Issuer in respect of which indemnity may be sought under
the foregoing provisions of this Section 7.03 against the Borrower, the Issuer
shall promptly notify the Borrower in writing, and the Borrower shall assume
the defense thereof including the employment of counsel and the payment of all
expenses. In any such action the Issuer shall have the right to employ separate
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of the Issuer unless the Borrower and the Issuer shall have mutually
agreed in writing to the employment of such counsel. The Borrower shall not be
liable for any settlement of such action effected without its written consent,
but if settled with the written consent of the Borrower or if there be a final
judgment for the plaintiff in any such action, the Borrower agrees to indemnify
and hold harmless the Issuer from and against any loss or liability by reason
of such settlement or judgment.

 14
 

Section 7.04  Taxes, Licenses, Utilities and Governmental
Charges.

The Borrower agrees to
pay promptly, as and when the same shall become due and payable, each and every
lawful cost, expense and obligation of every kind and nature, foreseen or
unforeseen, for the payment of which the Issuer or the Borrower is or shall
become liable by reason of its estate or interest in the Project or in any
portion thereof, or by reason of or in any manner connected with or arising out
of the possession, operation, maintenance, alteration, repair, rebuilding, use
or occupancy of the Project or any part thereof. The Borrower also agrees to
pay and discharge, promptly as and when the same shall become due and payable,
all lawful real estate taxes, personal property taxes, business and occupation
taxes, occupational license taxes, assessments for public improvements or
benefits and all other lawful governmental taxes, impositions and charges of
every kind and nature, ordinary or extraordinary, general or special, foreseen
or unforeseen, whether similar or dissimilar to any of the foregoing, and all
applicable interest and penalties thereon, if any, which at any time shall be
or become due and payable and which shall be lawfully levied, assessed or
imposed upon or with respect to, or which shall be or become liens upon, the
Project or any portion thereof or any interest of the Borrower therein. The
Borrower also agrees to pay or cause to be paid all lawful charges for gas,
water, sewer, electricity, light, heat, power, telephone and other utility and
service used, rendered or supplied to, upon or in connection with the Project.
The Borrower agrees that the Issuer is not, nor shall it be, required to
furnish free of charge to the Borrower or any other occupant of the Plant
Complex, any gas, water, sewer, electricity, light, heat, power or other
facilities, equipment, labor, materials or services of any kind, except as
otherwise may be required by law or except as the same shall generally be
furnished without charge to other owners or users of comparable property within
the Issuer’s jurisdiction.

The Borrower shall have
the right in good faith and by appropriate proceeding to dispute or contest the
validity or amount of any such tax, assessment, governmental charge or utility
charge, and during the pendency of any such dispute or contest, the Borrower
shall not be deemed to be in default under this Section 7.04 by reason of its
failure to have paid the disputed or contested amount.

Section 7.05  Insurance.

The Borrower agrees, both
generally and specifically with respect to the Project, that it will insure
against such risks in such amounts as are customarily insured against by
companies of like size similarly situated. Such insurance shall be obtained by
the purchase of insurance policies (including blanket policies covering
multiple risks) issued by reputable insurance companies authorized and
qualified to underwrite such risks.

Section 7.06  Tax Status of Bonds.

It is intended that the
interest on the Bonds be excluded from gross income for Federal income tax
purposes pursuant to Sections 103(a) and 142 of the Internal Revenue Code. In
general, the Borrower agrees that it will take no action which would (and will
omit no action

 15
 

the omission of which would) cause an Event of
Taxability. Without limiting the generality of such covenant, the Borrower
agrees:

(a) that its requisitions
from the Construction Fund will be such that at least 95% of the funds
deposited therein and earnings thereon of the Bonds will be used for the
acquisition, construction, reconstruction or improvement of land or property of
a character subject to the allowance for depreciation;

(b) that the issuance
costs financed by the Bonds will not exceed 2% of the aggregate face amount of
the issue;

(c) that not more than
25% of the funds deposited in the Construction Fund and earnings thereon the
Bonds will be used to provide a facility the primary purpose of which is one of
the following: retail food and beverage services, automobile sales or service,
or the provision of recreation or entertainment;

(d) that no portion of
the proceeds of the Bonds will be used to provide the following: any private or
commercial golf course, country club, massage parlor, tennis club, skating
facility (including roller skating, skateboard and ice skating), racquet sports
facility (including any handball or racquetball court), hot tub facility,
suntan facility or racetrack;

(e) that no portion of
the proceeds of the Bonds will be used for the acquisition of any property (or
an interest therein) unless either (i) the first use of such property is
pursuant to such acquisition, (ii) in the case of any building (and the
equipment therefor) the rehabilitation expenditures with respect to such
building incurred within two years after the Bonds are issued equal or exceed
15% of the portion of the cost of acquiring such building (and equipment)
financed with the net proceeds of the Bonds, or (iii) in the case of structures
other than a building, the rehabilitation expenditures with respect to such
structures incurred within two years after the Bonds are issued equal or exceed
100% of the portion of the cost of acquiring such structures financed with the
net proceeds of the Bonds;

(f) that less than 25% of
the funds deposited in the Construction Fund and earnings thereon will be used
(directly or indirectly) for the acquisition of land (or on interest therein);

(g) that it will permit
no use of the proceeds of the Bonds which would cause the Bonds to be
classified as “arbitrage bonds” within the meaning of Section 148 of the
Internal Revenue Code, and

(h) that the Project will
be used at all times as a solid waste disposal facility as defined in Section
142 of the Code and at least 65% by weight or volume of the materials used in
the conversions process at the Project will be solid waste as defined in
Section 142 of the Code;

 16
 

(i) that it shall pay any
rebate amount required to be paid on behalf of the Issuer to the United States
Treasury pursuant to Section 148(f) of the Internal Revenue Code and any
proposed, temporary or final regulations promulgated thereunder and, to assure
payment of such amount, that it shall pay to the Trustee any amount required to
be deposited into the Rebate Account pursuant to Section 803 of the Indenture.

If, nevertheless, an
Event of Taxability shall occur, the Borrower shall not be deemed to be in
default under this Section 7.06 if it complies in all respects with Section
5.02 of this Loan Agreement. Prepayment of the Loan shall be the sole liability
of the Borrower for an Event of Taxability.

Section 7.07  Sale or Transfer of Project.

The Borrower may sell,
assign or otherwise transfer all or any part of its interest in the Plant
Complex or the Project and in connection therewith may assign all or any
portion of its rights and privileges under this Loan Agreement, provided that:

(a) if such sale,
transfer or assignment involves (in a single transaction or any series of
transactions) all or substantially all of the Borrower’s assets, the Borrower
shall comply with Section 7.09 of this Loan Agreement;

(b) if such transaction
involves the sale, transfer or assignment of all or substantially all of the
Project, the purchaser, transferee or assignee, as the case may be, shall have
assumed in writing all obligations of the Borrower contained in Sections 3.03
and 7.06 hereof;

(c) no such sale,
transfer or assignment shall relieve the Borrower from primary liability for
the performance of its obligations hereunder and under the Promissory Note
unless the requirements set forth in Section 7.09(a) through (d) of this Loan
Agreement are met with respect to the purchaser, transferee or assignee, in
which event the Borrower shall be released of all further obligation hereunder
and such purchaser, transferee or assignee shall become the “Borrower” for
purposes hereof and of the Indenture and the Promissory Note;

(d) the Borrower shall
have delivered to the Trustee and the Issuer an opinion of Bond Counsel to the
effect that such transaction will not violate the Act, adversely affect the
legality of the Bonds or result in an Event of Taxability; and

(e) the Borrower shall
have complied with the applicable provisions of the Credit Facility
Reimbursement Agreement.

Section 7.08  Maintenance of Corporate Existence.

The Borrower agrees that,
except as otherwise permitted in Section 7.09 of this Loan Agreement, it will
maintain its corporate existence and will neither dissolve nor institute any
proceedings for dissolution.

 17
 

Section 7.09  Transfers of Assets.

The Borrower agrees that
it will not (in a single transaction or any series of transactions) dissolve or
otherwise dispose of all or substantially all its assets and will not
consolidate with or merge into another entity; provided, however, that the
Borrower may, without violating the foregoing, consolidate with or merge into
another entity, or transfer all or substantially all its assets to another
entity (and thereafter be released of all further obligation hereunder and
dissolve or not dissolve as it may elect) if:

(a) the resulting,
surviving or transferee entity, as the case may be, is a corporation
incorporated, or a partnership, limited liability company or other recognized
legal entity organized, under the laws of one of the States of the United
States of America;

(b) such resulting,
surviving or transferee entity has obtained the prior written consent of the
Credit Facility Provider (or, if there is no Credit Facility then in effect or
the Credit Facility Provider is in default of its obligations thereunder, the
Requisite Consent of Bondowners) to such transaction;

(c) such resulting,
surviving or transferee entity expressly assumes in writing (delivered to the
Issuer and the Trustee) all of the obligations of the Borrower contained in
this Loan Agreement, the Promissory Note and the Continuing Disclosure
Agreement (after which it shall be the “Borrower” for purposes hereof and
thereof); and

(d) the Borrower shall
have delivered to the Trustee and the Issuer an opinion of Bond Counsel to the
effect that such transaction will not adversely affect the legality of the
Bonds or result in an Event of Taxability.

Section 7.10  Debt Service Reserve Fund.

The Borrower shall
deposit with the Trustee, within 2 Business Days after the Trustee has given
the Borrower notice that the amount held in the Debt Service Reserve Fund is
less than the Debt Service Requirement, the amount necessary to cause the
balance in the Debt Service Reserve Fund to meet the Debt Service Fund
Requirement

ARTICLE
VIII

DAMAGE;
EMINENT DOMAIN

Section 8.01  Damage.

If prior to the full
payment of the Bonds (or provision for payment thereof having been made to the
satisfaction of the Trustee in accordance with the provisions of the Indenture)
the Plant Complex shall be damaged by fire, flood, windstorm or other casualty to
such extent that

 18
 

the Borrower has the option
of prepaying the Promissory Note pursuant to Section 5.01(a) of this Loan
Agreement, the Borrower shall either (i) prepay the entire outstanding balance
of the Promissory Note in accordance with Section 5.01 of this Loan Agreement,
or (ii) repair, replace or restore the damaged property to such condition as in
the judgment of the Borrower will restore the capacity of the Project to
conduct the Project Enterprise to a level at least equal to the lesser of (A) the
capacity of the Project to conduct the Project Enterprise as it existed
immediately prior to such damage, or (B) the capacity of the Project to conduct
the Project Enterprise on the date hereof.

Section
8.02  Eminent Domain.

If
prior to full payment of the Bonds (or provision for payment thereof having
been made in accordance with the provisions of the Indenture) the Plant Complex
shall be taken by eminent domain, in whole or in part, to such extent that the
Borrower has the option of prepaying the Promissory Note pursuant to Section
5.01(b) of this Loan Agreement, the Borrower shall either (i) prepay the entire
outstanding balance of the Promissory Note in accordance with Section 5.01 of
this Loan Agreement, or (ii) acquire such new property in the Issuer as in the
judgment of the Borrower will be necessary to restore the capacity of the
Project to conduct the Project Enterprise to a level at least equal to the
lesser of (A) the capacity of the Project to conduct the Project Enterprise as
it existed immediately prior to such taking, or (B) the capacity of the Project
to conduct the Project Enterprise on the date hereof.

ARTICLE IX

THE TRUSTEE AND TRUST
FUNDS

Section 9.01  Payment
of Trustee’s Fees.

The
Borrower agrees that it will pay the Trustee its customary fees for acting as
Trustee under the Indenture and that it will reimburse the Trustee for its
ordinary and necessary expenses incurred in carrying out the terms of the
Indenture. Such fees and reimbursements of expenses shall be paid upon receipt
of periodic invoices therefor.

In
the event the Trustee is required by the terms of the Indenture or otherwise
deems it necessary or advisable in fulfillment of its fiduciary
responsibilities thereunder to take actions beyond those which are routinely
performed by corporate trustees under similar indentures, the Borrower also
agrees that it will pay the Trustee its reasonable fees for its services in
such regard (including but not limited to legal fees and costs) and that it
will reimburse the Trustee for ordinary and necessary expenses incurred in
connection therewith. Such fees and reimbursements of expenses shall be paid
upon receipt of invoices therefor; provided, however, that the Borrower may
dispute (in good faith and by appropriate proceeding) the reasonableness of any
such charges and during the pendency of any such dispute the Borrower shall not
be deemed in default of the foregoing covenant by reason of its failure to have
paid the portion of such charges so disputed.

 19
 

Section
9.02  Duty to Provide Data.

The
Borrower agrees to furnish to the Trustee, promptly upon receipt of a written
request therefor, any documents, information or data reasonably necessary to
enable the Trustee to carry out its duties and responsibilities under the
Indenture or to verify the truth and accuracy of any representation or
statement made on behalf of the Borrower herein, in any Borrower’s Certificate.

Section 9.03  Investment
of Trust Funds; Arbitrage.

The
Trustee shall have the exclusive right to direct the investment and reinvestment
of Trust Fund moneys, subject, however, to the following limitations and
conditions:

(a)
The investment of the Trust Funds shall be in accordance with directions from
the Borrower, such directions to be made in a Borrower’s Certificate or in a writing
signed by the Borrower’s Representative and shall be consistent with the
remaining provisions of this Section 9.03.

(b)
The particular investments shall be Qualified Investments, and, in the case of
the investment of moneys in the Bond Fund, shall be Government Obligations.

(c)
No investment shall have a maturity later than the estimated time when the
funds so invested will be needed for the purposes of the Trust Fund of which
they are a part.

(d)
In the event of any actual loss realized from any such investment, the Borrower
shall promptly pay the amount of such loss to the Trustee for deposit into the
applicable Trust Fund.

(e)
The Trustee shall sell or otherwise reduce to cash any investment in the Bond
Fund or the Redemption Fund if such action is necessary to pay the principal
of, premium, if any, or interest on a Bond when due.

(f)
No investment or other use will be made of the proceeds of the Bonds which
would cause any Bond to be classified as an “arbitrage bond” within the meaning
of Section 148 of the Internal Revenue Code or any proposed, temporary or final
regulations issued thereunder.

(g)
In the event the Issuer or the Borrower is of the opinion (supported by an
opinion of Bond Counsel) that it is necessary or advisable to restrict or limit
the yield on the investment of any moneys held in any Trust Fund in order to
avoid the Bonds being considered “arbitrage bonds” within the meaning
aforesaid, the Issuer may (and shall if so requested by the Borrower) issue to
the Trustee a written certificate (copied to the Credit Facility Provider) to
such effect together with appropriate written instructions, in which event the
Trustee shall take such action as is necessary so to

 20
 

restrict or limit the yield
on such investment in accordance with such certificate and instructions,
irrespective of whether the Trustee shares such opinion.

Section 9.04  Bond
Fund and Redemption Fund.

Except
as expressly provided in the Indenture, moneys in the Bond Fund and the
Redemption Fund shall be used in accordance with the Indenture solely for the
payment of the principal of, premium, if any, and interest on the Bonds as the
same become due at maturity, upon redemption prior to maturity, or upon
acceleration of maturity.

Section 9.05  Excess
Trust Fund Moneys.

Following
full and final payment of the Bonds (or provision therefor having been made to
the satisfaction of the Trustee in accordance with the Indenture) and any fees
due to the Trustee, the Remarketing Agent and any paying agents under the
Indenture, any excess moneys remaining in the Trust Funds shall be paid to the
Credit Facility Provider, to the extent of any amounts due it under the Credit
Facility Reimbursement Agreement, and thereafter to the Borrower.

ARTICLE X

DEFAULT PROVISIONS

Section
10.01  Defaults; Events of Default.

If
any one or more of the following events occur, it is hereby defined as and
declared to be and to constitute an “Event of Default” under and for purposes
of this Loan Agreement:

(a)
Default in the due and punctual payment of any installment of principal or of
any payment of interest or premium on the Promissory Note;

(b)
Default in the performance or observance of any other of the covenants,
agreements or conditions on the part of the Borrower in this Loan Agreement
contained and the continuance thereof for a period of 30 days after receipt by
the Borrower of written notice (from the Issuer, the Trustee or the Owners of
at least 10% in aggregate principal amount of the Bonds at the time
Outstanding) specifying such default and requesting that it be cured; provided,
however, that if the default is capable of being cured, but not so within such
30 day period, such default shall not become an Event of Default if the
Borrower institutes reasonable corrective action within such period and pursues
such action diligently until such default is cured;

(c)
The Borrower shall: (i) become insolvent; or (ii) be unable, or admit in
writing its inability, to pay its debts as they mature; or (iii) make a general
assignment for the benefit of creditors or to an agent authorized to liquidate
any substantial amount of its property; or (iv) have a court order relief
against it under the United States

 21
 

Bankruptcy Code; or (v) file
a petition with respect to itself as debtor under chapter 7 or 11 of the United
States Bankruptcy Code; or (vi) have a petition under chapter 7 or 11 of the
United States Bankruptcy Code filed against it as debtor and fail to have such
petition vacated or discharged within 60 days following the filing thereof; or
(vii) file an answer to a creditor’s petition, admitting the material
allegations thereof, for liquidation, reorganization or to effect a plan or
other arrangement with creditors; or (viii) apply to a court for the
appointment of a receiver for any of its assets; or (ix) have a receiver
appointed for any of its assets (with or without the consent of the Borrower)
and such receiver shall not be discharged within 60 days after its appointment;
or

(d)
An “event of default” (as defined therein) shall have occurred under the
Indenture.

Section
10.02  Acceleration.

If
an Event of Default shall occur, the Trustee may with the written consent of
the Credit Facility Provider, and shall upon the written request of the Credit
Facility Provider or if the Bonds have been accelerated pursuant to Section
1002 of the Indenture, by written notice to the Borrower and the Credit
Facility Provider, declare the entire outstanding principal balance of the
Promissory Note together with all interest accrued thereon (to the date of such
acceleration) to be immediately due and payable, and such principal and
interest shall thereupon become and be immediately due and payable.

Section
10.03  Remedies.

If
an Event of Default shall occur, the Issuer or the Trustee may, with the
written consent of the Credit Facility Provider, pursue any available remedy at
law or in equity to realize the payment of the principal of, premium, if any,
and interest on the Promissory Note.

Section
10.04  Disposition of Amounts
Collected.

Any
amounts collected pursuant to action taken under this Article X shall be paid
to the Trustee and applied in accordance with the provisions of Section 1006 of
the Indenture or, if the Bonds have been fully paid (or provision for payment
thereof has been made in accordance with the provisions of the Indenture),
shall be paid to the Credit Facility Provider to the extent of any amount due
under the Credit Facility Reimbursement Agreement, and otherwise to the
Borrower.

Section
10.05  Payment of Costs and Expenses.

If
the Borrower defaults under any provisions of this Loan Agreement and the
Issuer or the Trustee, or both, employ attorneys or incur other expenses for
the collection of payments due or for the enforcement of performance or
observance of any other obligation or agreement on the part of the Borrower
herein contained, the Borrower agrees that it will on demand

 22
 

therefor pay to the Issuer or the Trustee, as the case
may be, the reasonable fees of such attorneys and such other reasonable
expenses so incurred by the Issuer or the Trustee.

Section
10.06  Limitation on Waivers.

If any agreement
contained in this Loan Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive the same, any
other or any future breach hereunder on any other occasion. No remedy herein
conferred upon or reserved to the Issuer or Trustee is intended to be exclusive
of any other available remedy or remedies, but each and every such remedy shall
be cumulative and shall be in addition to every other remedy given under this
Loan Agreement or now or hereafter existing at law or in equity or by virtue of
other contracts. No delay or omission to exercise any right or power occurring
upon any Event of Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right or power may be exercised
from time to time and as often as may be deemed expedient. To entitle the
Issuer or the Trustee to exercise any remedy reserved or available to it, it
shall not be necessary to give any notice other than such notice as may be
expressly required herein.

Section
10.07 Performance by Third Parties.

The Issuer agrees that,
with the written consent of the Borrower, third parties may perform any and all
acts or take such action as may be necessary for and on behalf of the Borrower
to prevent or correct any Event of Default hereunder, and the Issuer agrees
that the Trustee shall take or accept such performance as performance by the
Borrower in such event. The acceptance by the Issuer or the Trustee of any such
performance by third parties shall not in any way diminish or absolve the
Borrower of primary liability hereunder.

Section
10.08  Performance for Issuer Under
Indenture.

The Issuer agrees that
the Borrower and the Credit Facility Provider or either of them may, but shall
not be obligated to, perform any such acts and do all such things in the place
and stead of the Issuer as the Borrower or the Credit Facility Provider, as the
case may be, shall deem necessary to prevent or correct any default or “event
of default” caused or about to be caused by the Issuer under the Indenture.

ARTICLE XI

MISCELLANEOUS

Section
11.01  Amendments.

This Loan Agreement and
the Promissory Note shall not be effectively amended, changed, modified,
altered or terminated without the written consent of the Trustee and the Credit
Facility Provider, and no modification, alteration or amendment to this Loan
Agreement

 23
 

or the Promissory Note shall
be binding upon either party hereto until such modification, alteration or
amendment is reduced to writing and executed by both parties hereto.

Section 11.02  Successors.

Except
as limited or conditioned by the express provisions hereof, the provisions of
this Loan Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties hereto.

Section 11.03  Governing
Law.

The
laws of the State of Wisconsin shall govern this Loan Agreement and the
Promissory Note issued hereunder.

Section 11.04 Captions and Dates.

The
captions or headings in this Loan Agreement are for convenience only and in no
way define, limit or describe the scope or intent of any of the provisions of
this Loan Agreement. Any date set forth herein falling on February 28 shall
mean February 29 in any leap year.

Section 11.05 Counterparts.

This
Loan Agreement may be signed in any number of counterparts with the same effect
as if the signatures thereto and hereto were on the same instrument.

Section 11.06  Notices.

All
notices, certificates or other communications hereunder shall be sufficiently
given and shall be deemed given when hand delivered or when mailed by certified
or registered mail, postage prepaid, or by prepaid telegram addressed as
follows: (i) if to the Issuer, at the Issuer’s Address, and (ii) if to the
Borrower, at the Borrower’s Address.

A
duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Borrower shall also be concurrently given
to the Trustee at the Trustee’s Address, to the Credit Facility Provider at the
Credit Facility Provider’s Address, and to the Remarketing Agent at the
Remarketing Agent’s Address.

Section 11.07  Severability.

If
any provisions of this Loan Agreement shall be held or deemed to be or shall,
in fact, be inoperative or unenforceable as applied in any particular case in
any jurisdiction or jurisdictions or in all jurisdictions, or in all cases
because it conflicts with any other provision or provisions hereof or any
constitution or statute or rule of public policy, or for any other reason, such
circumstance shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions herein contained invalid, inoperative, or
unenforceable to any extent

 24
 

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

Section 11.08  Termination.

Upon full and final
payment of all Bonds (or if all Bonds shall, prior to the maturity or
redemption date thereof, be deemed to have been paid within the meaning of
Article IX of the Indenture) and of all amounts due under this Loan Agreement
(including all amounts required to be deposited with the Trustee for payment of
“rebate” obligations to the United States Treasury pursuant to Section 803 of
the Indenture):

(a) This Loan Agreement
shall terminate and neither the Issuer nor the Trustee nor any Bondowner shall
thereafter have any rights hereunder, saving and excepting those that shall
have theretofore vested; and

(b) The Issuer shall
cause the Promissory Note to be canceled and delivered to the Borrower.

Section 11.09  Limited Liability of Issuer.

Notwithstanding anything
herein contained to the contrary by implication or otherwise, any obligations
of the Issuer created by or arising out of this Loan Agreement do not give rise
to a pecuniary liability of the Issuer or a charge against its general credit
or the Issuer’s taxing powers, including, but not limited to (i) liability for
failure to investigate or negligence in the investigation of the financial
position or prospects of the Borrower, a user of the Project or any other
person or for failure to consider, or negligence concerning, the adequacy of
terms of, or collateral security for, the Bonds or any related agreement to
protect interests of holders of the Bonds; and (ii) any liability in connection
with the issuance or sale of the Bonds. In addition, this Loan Agreement shall
not give rise to any personal liability of any member of the Issuer’s Governing
Body or of any officers, agents, employees or officials of the Issuer on the
Bonds or for any act or omission related to the authorization or issuance of
the Bonds.

 25
 

IN WITNESS WHEREOF, the
Issuer has caused this Loan Agreement to be executed in its name and behalf by
its Chief Municipal Official and its Clerk thereunto duly authorized and its
seal to be hereunto affixed, and the Borrower has caused this Loan Agreement to
be executed in its name and behalf by an Authorized Officer of the Borrower,
all as of the Effective Date.

	
  

  	
   

  	
  CITY OF LADYSMITH, WISCONSIN

  
	
  

  	
   

  	
  By:

  	
  

  /s/ Ronald Moore

  
	
   

  	
   

  	
   

  	
  Mayor

  
	
   

  	
   

  	
  

  Attest:

  	
  /s/ Kathleen Stewart

  
	
   

  	
   

  	
   

  	
  Clerk

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITYFOREST CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Wayne Gullstad

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  

 

 26

EXHIBIT A

FORM OF PROMISSORY NOTE 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE TRANSFERABILITY HEREOF IS RESTRICTED BY THE
INDENTURE OF TRUST IDENTIFIED IN THE ASSIGNMENT ENDORSED HEREON.

PROMISSORY NOTE

	
  $27,000,000

  	
  March 26, 1998

  

 

FOR VALUE RECEIVED, the
undersigned CITYFOREST CORPORATION, a Minnesota corporation (hereinafter called
the “Borrower”, which term shall be construed to include the successors and
assigns of the Borrower), promises to pay to the order of the CITY OF
LADYSMITH, WISCONSIN, a municipal corporation and political subdivision of the
State of Wisconsin (hereinafter called the “Issuer”), the principal sum of
TWENTY-SEVEN MILLION DOLLARS ($27,000,000) on March 1, 2028. The unpaid
principal balance of this Promissory Note shall bear interest from the date
hereof (i) prior to the Conversion Date, at the Variable Rate in effect from
time to time, payable on the first Business Day of each month, commencing
March, 1998, and on any other date on which interest is payable on the Issuer’s
Variable Rate Demand Solid Waste Disposal Facility Revenue Bonds, Series 1998
(CityForest Corporation Project) (the “Bonds”) pursuant to the Indenture
hereinafter referred to, and (ii) on and after the Conversion Date, at the
weighted average of Adjusted Interest Rates (based upon the respective
principal amounts of outstanding Bonds bearing interest at those rates) in
effect from time to time, payable semi-annually on March 1 and September 1 of
each year, commencing the first such date occurring at least 30 days after the
Conversion Date, and on any other date on which interest is payable on the
Bonds pursuant to said Indenture. To the extent permitted by law, overdue
principal, premium, if any, and interest shall bear interest until paid at the
same rate per annum as borne by this Promissory Note on the due date of the
payment that is delinquent.

After the Conversion
Date, a portion of the principal of this Promissory Note shall be due on each
March 1 in accordance with the schedule of stated maturities assigned to the
Bonds pursuant to Section 301 of the Indenture.

The principal of and
interest on this Promissory Note are payable in federal or other immediately
available funds at the principal corporate trust office of Norwest Bank
Wisconsin, N.A., Milwaukee, Wisconsin or its successor or successors, as
trustee under that certain Indenture of Trust, dated as of March 1, 1998, from
the Issuer, as grantor, to which reference is hereby made for definitions of
the terms “Conversion Date”, “Variable Rate” and “Adjusted Interest Rates”.

 Exhibit A - Page 1
 

This Promissory
Note constitutes the Promissory Note issued under a Loan Agreement, dated as of
March 1, 1998, between the Borrower and the Issuer, to which Loan Agreement reference
is hereby made for a statement of the terms and conditions on which the loan
evidenced hereby was made, for a description of the circumstances under which
there shall be credits allowed against the principal and interest on this
Promissory Note, and for a description of the terms and conditions upon which
this Promissory Note may or must be prepaid or its maturity accelerated.

	
  

  	
   

  	
  CITYFOREST CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  

 

 

 

FOR VALUE RECEIVED, the
undersigned City of Ladysmith, Wisconsin, hereby assigns, without recourse, all
its right, title and interest in and to the above Promissory Note to Norwest
Bank Wisconsin, N.A., or to its successor or successors, as trustee under that
certain Indenture of Trust, dated as of March 1, 1998 by and between the
undersigned and said Trustee, securing its Variable Rate Demand Solid Waste
Disposal Facility Revenue Bonds, Series 1998 (CityForest Corporation Project)
issued under said Indenture.

Dated March 26, 1998.

	
  

  	
   

  	
  CITY OF LADYSMITH, WISCONSIN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Mayor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Clerk

  
	
  [SEAL]

  	
   

  	
   

  	
   

  

 

 Exhibit A - Page 2

EXHIBIT B

FORM OF CONVERSION NOTICE

 

	
  [Trustee Address]

  	
   

  	
  [Issuer Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Credit Facility
  Provider Address]

  	
   

  	
  [Remarketing
  Agent Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Rating Agency
  Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Re:                 $27,000,000
City of Ladysmith, Wisconsin Variable Rate Demand Solid Waste Disposal Facility
Revenue Bonds, Series 1998 (CityForest Corporation Project)

Ladies and Gentlemen:

This is a “Conversion
Notice” under purposes of the Indenture of Trust, dated as of March 1, 1998
(the “Indenture”) entered into in connection with the issuance of the captioned
bonds. Terms are used herein with the meanings assigned to them in the
Indenture.

The Borrower hereby
specifies the date______________, ______, as a Proposed Conversion Date and
February 28, ______ as the termination of the first Reset Period.

The Borrower hereby
requests the assignment of stated maturities of the Bonds during such Reset
Period in accordance with Section 301 of the Indenture and the establishment
(by [insert name of Remarketing Agent] as Remarketing Agent) of the Adjusted
Interest Rates to be in effect during such Reset Period in accordance with the
Indenture. [The Credit Facility to be in effect during the first Reset Period
is a _________________, issued by ___________________, a ___________________.]
[No Credit Facility shall be in effect during such Reset Period.] [The Debt
Service Reserve Fund [should] [should not] be liquidated prior to such Reset
Period.]

 Exhibit B - Page 1
 

Delivered
herewith are the  Bond  Counsel opinion and the undertaking  of the Remarketing Agent required by Section 302(B)(l)
of the Indenture.

	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITYFOREST CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  	
  Borrower’s
  Representative

  

 

 Exhibit B - Page 2

EXHIBIT C

FORM
OF RESET NOTICE

 

	
  [Trustee Address]

  	
   

  	
  [Issuer Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Credit Facility
  Provider Address]

  	
   

  	
  [Remarketing
  Agent Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Rating Agency
  Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Re:                 $27,000,000 City
of Ladysmith, Wisconsin Variable Rate Demand Solid Waste Disposal Facility
Revenue Bonds, Series 1998 (CityForest Corporation Project)

Ladies and Gentlemen:

This
is a “Reset Notice” under purposes of the Indenture of Trust, dated as of March
1, 1998 (the “Indenture”) entered into in connection with the issuance of the
captioned bonds. Terms are used herein with the meanings assigned to them in
the Indenture.

The
Borrower hereby specifies the date___________________, _______, as a Proposed
Conversion Date and February 28, ___ as the termination of the first Reset
Period.

The
Borrower hereby requests the assignment of stated maturities of the Bonds
during such Reset Period in accordance with Section 301 of the Indenture and
the establishment (by [insert name of Remarketing Agent] as Remarketing Agent)
of the Adjusted Interest Rates to be in effect during such Reset Period in
accordance with the Indenture. [The Credit Facility to be in effect during the
first Reset Period is a _____________________, issued by ______________________,
a ____________________________.] [No Credit Facility shall be in effect during
such Reset Period.] [The Debt Service Reserve Fund [should] [should not] be
liquidated prior to such Reset Period.]

 Exhibit C - Page 1
 

Delivered
herewith are the Bond Counsel opinion and the undertaking of the Remarketing
Agent required by Section 302(B)(1) of the Indenture.

	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITYFOREST CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  	
  Borrower’s
  Representative

  

 

 Exhibit C - Page 2

EXHIBIT D

FORM
OF REQUISITION

Requisition
No             

	
  To:

  	
   

  	
  Attn: Corporate
  Trust Department

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Re:

  	
   

  	
  $27,000,000

  	
   

  
	
   

  	
   

  	
  City of
  Ladysmith, Wisconsin

  	
   

  
	
   

  	
   

  	
  Variable Rate
  Demand Solid Waste Disposal Facility Revenue Bonds,

  Series 1998 (CityForest Corporation Project)

  	
   

  

This
Borrower’s Requisition is delivered to you pursuant to Section 3.02 and Section
3.03 of the Loan Agreement, dated as of March 1, 1998, (the “Loan Agreement”),
by and between CityForest Corporation, a Minnesota corporation (the “Borrower”),
and the City of Ladysmith, Wisconsin, a political subdivision and body
corporate and politic created under the laws of the State of Wisconsin (the “Issuer”).
Reference is made to the Cost of Issuance Fund and the Construction Fund
created in Sections 602 and 603, respectively, of the Indenture of Trust (the “Indenture”),
dated as of March 1, 1998, between the Issuer and you, securing the captioned
bonds.

The Borrower hereby
requisitions from the Construction Fund the amounts indicated below:

	
  Categorical
  Purpose

  	
   

  	
  Amount

  Requisitioned

  
	
  A.

  	
  To allocate to or pay (or
  reimburse the Borrower for) the Engineering Costs or the Basic Project Costs
  of the Project described in the definition of Eligible Costs of the Project
  in Section 1.01 of the Loan Agreement

  	
   

  	
  $

  	
   

  
	
  B.

  	
  To allocate to or pay
  (or reimburse the Borrower for) the Other Costs described in the definition
  of Eligible Costs of the Project in Section 1.01 of the Loan Agreement and
  specified in the Opinion of Bond Counsel attached

  	
   

  	
  $

  	
   

  
	
  C.

  	
  To allocate to or pay the
  Capitalized Interest Costs described in the definition of Eligible Costs of
  the Project in Section 1.01 of the Loan Agreement

  	
   

  	
  $

  	
   

  

 

 Exhibit D - Page 1
 

The Borrower hereby
requisitions from the Cost of Issuance Fund the amount indicated below:

	
  D.

  	
  To allocate to or pay (or
  reimburse the Borrower for) the Bond Issuance Costs described in the
  definition of Eligible Costs of the Project in Section 1.01 of the Loan
  Agreement

  	
   

  	
  $

  	
   

  
	
   

  	
  TOTAL REQUISITION AMOUNT

  	
   

  	
  $

  	
   

  

In support of this
requisition, the undersigned hereby certifies as follows:

1. He (She) is the
Borrower’s Representative, that is, the person or, in such person’s absence,
the alternate person, designated in a Borrower’s Certificate as the person
authorized to execute and deliver Requisitions and to give Trust Fund
investment directions on behalf of the Borrower.

2. The amounts, if any,
requisitioned for Categorical Purpose A. above:

(a) have been incurred by Borrower or paid by the
Borrower and are hereby allocated to the Eligible Costs of the Project
described in Schedule A hereto which corresponds to Exhibit E of
the Loan Agreement;

(b) have been incurred or paid by Borrower for land or
property of a character subject to the allowance for depreciation under Section
167 of the Internal Revenue Code except as otherwise indicated in Schedule A
attached hereto;

(c) were incurred or paid by Borrower after November
13, 1995; and

(d) are chargeable to the capital account of the
Project or would be so chargeable either with a proper election of the Borrower
or but for a proper election by the Borrower to deduct such amounts.

3. The amounts, if any,
requisitioned for Categorical Purpose D. above:

(a) have been incurred by the Borrower or paid by the
Borrower and are hereby allocated to the Eligible Costs of the Project
described in Schedule D attached hereto which correspond to Exhibit D
of the Loan Agreement; and

(b) have been or will be capitalized by the Borrower
for Federal income tax purposes.

4.
The estimated completion date of the Project now is                                                 ,
19     . The Borrower is not in default under the Loan
Agreement, except as follows (if no default exists, so state): 

 

 

.

 Exhibit D - Page 2
 

Nothing has occurred to
the knowledge of the undersigned which will prevent the performance by the
Borrower of its obligations under the Loan Agreement, except as follows (if
none, so state): 

 

.

5. No Borrower’s
Requisition has previously been submitted in respect of the costs which form a
basis for this Borrower’s Requisition.

6. You are hereby
requested to pay the Total Requisition Amount in the following manner:

(a) To the Borrower by
check; or

(b) To the Borrower by deposit in its general account
(No.                          )
maintained at                       
                                                                                                                                                  ;
or

(c) Other:                                                                    
                                                                                                                                           .

Executed by the undersigned on                                         ,
199     .

7. Attached hereto is the
requisition form to the Credit Facility Provider approved by the Independent
Engineer.

	
  

  	
   

  	
  CITYFOREST
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Its (Alternate) Borrower’s Representative

  

 

 Exhibit D - Page 3

EXHIBIT E

It is noted that items under the heading “Qualified”
represent Eligible Costs of the Project and that such Qualified amounts exceed
the amount of Bonds proceeds.

	
  Cost of Expansion and Upgrade:

  	
   

  	
  Qualified

  	
   

  
	
  Engineering - Prespent

  	
   

  	
  $

  	
  413,610

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Engineering

  	
   

  	
  1,441,411

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Voith Contract

  	
   

  	
  12,117,558

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DIP Equipment

  	
   

  	
  936,672

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DIP Spares

  	
   

  	
  97,174

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PM#4 AC Drives

  	
   

  	
  1,243,880

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PM#4 Equipment

  	
   

  	
  2,461,532

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DCS & Field
  Devices

  	
   

  	
  1,464,282

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Buildings

  	
   

  	
  7,615,766

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Processing
  Piping and Eqp. Install

  	
   

  	
  4,613,850

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Electrical

  	
   

  	
  1,520,726

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Construction
  Mgmt. & Sub. Mgmt

  	
   

  	
  918,683

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Boldt Project
  Mgmt. Services

  	
   

  	
  96,915

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  34,942,059

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capitalized Interest

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capitalized
  Interest - Bond

  	
   

  	
  3,500,000

  	
  *

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  3,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debt Service Reserve
  Fund

  	
   

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Transaction Costs

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Qualified at 2%

  	
   

  	
  $

  	
  540,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  1,540,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total All

  	
   

  	
  $

  	
  39,982,059

  	
   

  

* Estimated.

 Exhibit E - Page 1Exhibit 10.6

INDENTURE
OF TRUST

Dated
as of March 1, 1998

From

CITY OF LADYSMITH,
WISCONSIN 

as Grantor

To

NORWEST BANK WISCONSIN,
N.A.

Milwaukee, Wisconsin 

as Trustee

Relating
To:

$27,000,000

CITY OF LADYSMITH,
WISCONSIN

VARIABLE RATE DEMAND
SOLID WASTE DISPOSAL FACILITY

REVENUE BONDS,

SERIES 1998 (CITYFOREST
CORPORATION PROJECT)

TABLE OF CONTENTS

	
  Parties and Recitals

  	
  1

  
	
  Granting Clauses

  	
  2

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND USE OF PHRASES

  	
   

  
	
  Section 101

  	
  Definitions

  	
  3

  
	
  Section 102

  	
  Use of Phrases; Rules of Construction

  	
  14

  
	
   

  	
   

  
	
  ARTICLE II GENERAL PROVISIONS RELATING TO THE BONDS

  	
   

  
	
  Section 201

  	
  Creation of Bonds for Issuance

  	
  15

  
	
  Section 202 

  	
  Parity

  	
  16

  
	
  Section 203

  	
  Bonds to be Limited Obligations of Issuer

  	
  16

  
	
  Section 204

  	
  Execution of Bonds

  	
  16

  
	
  Section 205

  	
  Authentication

  	
  16

  
	
  Section 206

  	
  Form of Bonds

  	
  17

  
	
  Section 207

  	
  Provision for Registration, Transfer and Exchange of
  Bonds

  	
  17

  
	
  Section 208

  	
  Persons Treated as Owners

  	
  19

  
	
  Section 209 

  	
  Manner of Payment of Bonds

  	
  19

  
	
  Section 210

  	
  Mutilated, Lost, Stolen or Destroyed Bonds

  	
  19

  
	
  Section 211

  	
  Designation of Bond Registrar and Paying Agents

  	
  20

  
	
  Section 212

  	
  Disposition of Bonds Upon Payment; Safe-keeping of
  Bonds Surrendered for Exchange

  	
  20

  
	
  Section 213 

  	
  Nonpresentment of Bonds

  	
  20

  
	
  Section 214

  	
  Delivery of Bonds

  	
  20

  
	
   

  	
   

  
	
  ARTICLE III TERMS OF THE BONDS

  	
   

  
	
  Section 301 

  	
  Maturity

  	
  21

  
	
  Section 302

  	
  Interest on the Bonds

  	
  21

  
	
  Section 303

  	
  Purchase of Bonds Upon Demand

  	
  26

  
	
  Section 304

  	
  Mandatory Tender of Bonds for Purchase

  	
  27

  
	
  Section 305

  	
  Purchase of Tendered Bonds

  	
  28

  
	
  Section 306 

  	
  Bond Purchase Account

  	
  28

  
	
  Section 307

  	
  Treatment of Untendered Bond Certificates

  	
  30

  
	
  Section 308 

  	
  Remarketing of Tendered Bonds

  	
  30

  
	
  Section 309

  	
  Remarketing of Pledged Bonds

  	
  31

  
	
  Section 310

  	
  Concerning the Remarketing Agent

  	
  32

  
	
   

  	
   

  
	
  ARTICLE IV REDEMPTION OF BONDS PRIOR TO MATURITY

  	
   

  
	
  Section 401

  	
  Limitation of Redemptions Prior to Maturity

  	
  32

  
	
  Section 402 

  	
  Notice and Effect of Redemption

  	
  33

  
	
  Section 403

  	
  Selection of Bonds for Redemption; Manner of
  Effecting Partial Redemptions of Particular Bonds

  	
  33

  
	
  Section 404

  	
  Optional Redemption of Bonds at Election of the
  Borrower

  	
  34

  
				

 

 i
 

 

	
  Section 405

  	
  Optional Redemption of
  Bonds Upon Occurrence of Certain Extraordinary Events

  	
  35

  
	
  Section 406

  	
  Mandatory Redemption of
  Bonds Upon Determination of Taxability or Expiration of Credit Facility

  	
  36

  
	
  Section 407

  	
  Mandatory Purchase of
  Bonds Relating to Debt Service Reserve Fund

  	
  37

  
	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND COVENANTS OF ISSUER

  	
   

  
	
  Section 501 

  	
  Payment of Principal
  and Interest

  	
  37 

  
	
  Section 502

  	
  Performance of
  Covenants; Authority

  	
  37 

  
	
  Section 503

  	
  Instruments of Further
  Assurance

  	
  38

  
	
  Section 504

  	
  Inspection of Books

  	
  38

  
	
  Section 505

  	
  Rights Under Loan
  Agreement and Other Documents

  	
  38

  
	
  Section 506

  	
  Tax-Exempt Status of
  Bonds

  	
  38

  
	
   

  	
   

  
	
  ARTICLE VI CUSTODY AND APPLICATION OF PROCEEDS OF
  BONDS

  	
   

  
	
  Section 601

  	
  Application of Proceeds
  of Bonds

  	
  39

  
	
  Section 602

  	
  Cost of Issuance Fund

  	
  39

  
	
  Section 603

  	
  Construction Fund

  	
  39

  
	
  Section 604 

  	
  Surplus Construction
  Fund

  	
  40

  
	
  Section 605 

  	
  Debt Service Reserve
  Fund

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII REVENUES AND FUNDS

  	
   

  
	
  Section 701 

  	
  Source of Payment

  	
  42 

  
	
  Section 702 

  	
  Pledged Revenues

  	
  42 

  
	
  Section 703 

  	
  Bond Fund

  	
  42 

  
	
  Section 704 

  	
  Redemption Fund

  	
  44 

  
	
  Section 705 

  	
  Trust Funds Held in
  Trust

  	
  44 

  
	
  Section 706

  	
  Credit Facility
  Reimbursement Account

  	
  44 

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII INVESTMENTS

  	
   

  
	
  Section 801 

  	
  Permitted Investment of
  Trust Funds

  	
  45 

  
	
  Section 802 

  	
  Arbitrage

  	
  45 

  
	
  Section 803

  	
  Rebate of Certain
  Arbitrage Profits

  	
  46 

  
	
   

  	
   

  
	
  ARTICLE IX DISCHARGE

  	
   

  
	
  Section 901 

  	
  Discharge

  	
  46

  
	
   

  	
   

  
	
  ARTICLE X DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE
  AND BONDOWNERS

  	
   

  
	
  Section 1001 

  	
  Defaults; Events of
  Default

  	
  48 

  
	
  Section 1002

  	
  Acceleration

  	
  49 

  
	
  Section 1003 

  	
  Remedies

  	
  49 

  
	
  Section 1004

  	
  Right of Bondowners to
  Direct Proceedings

  	
  50 

  
	
  Section 1005 

  	
  Waiver of Certain
  Rights

  	
  51 

  
	
  Section 1006 

  	
  Application of Moneys

  	
  51 

  

 

 ii
 

 

	
  Section 1007

  	
  Remedies Vested in
  Trustee

  	
  53

  
	
  Section 1008

  	
  Rights and Remedies of
  Bondowners

  	
  53

  
	
  Section 1009

  	
  Termination of
  Proceedings

  	
  53

  
	
  Section 1010

  	
  Waivers of Events of
  Default

  	
  54

  
	
  Section 1011

  	
  Opportunity to Cure
  Defaults by Issuer

  	
  54

  
	
  Section 1012

  	
  Certain Notices to
  Borrower

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI THE TRUSTEE

  	
   

  
	
  Section 1101

  	
  Acceptance of Trusts

  	
  54

  
	
  Section 1102

  	
  Specific Duty of
  Trustee to File Continuation Statements

  	
  57

  
	
  Section 1103

  	
  Notice to Bondowners if
  Default Occurs

  	
  57

  
	
  Section 1104

  	
  Intervention by Trustee

  	
  57

  
	
  Section 1105

  	
  Successor Trustee

  	
  58

  
	
  Section 1106

  	
  Resignation by Trustee

  	
  58

  
	
  Section 1107

  	
  Removal of Trustee

  	
  58

  
	
  Section 1108

  	
  Appointment of
  Successor Trustee by Bondowners; Temporary Trustee

  	
  58

  
	
  Section 1109

  	
  Concerning Any
  Successor Trustee

  	
  59

  
	
  Section 1110

  	
  Appointment of
  Co-Trustee

  	
  59

  
	
  Section 1111

  	
  Acquisition of
  Conflicting Interests by Trustee

  	
  60

  
	
  Section 1112

  	
  Requirement of a
  Corporate Trustee

  	
  61

  
	
  Section 1113

  	
  Trustee’s Fees

  	
  61

  
	
   

  	
   

  
	
  ARTICLE XII CONCERNING THE CREDIT FACILITY

  	
   

  
	
  Section 1201

  	
  Trustee to Draw on
  Credit Facility

  	
  62

  
	
  Section 1202

  	
  Requirements Regarding
  Credit Facility and Substitute Credit Facility

  	
  63

  
	
  Section 1203

  	
  References to Credit
  Facility Provider After Expiration or Default of Credit Facility

  	
  65

  
	
  Section 1204

  	
  References to Eligible
  Funds and Preference Opinion After Expiration of Credit Facility

  	
  65

  
	
  Section 1205

  	
  Option of Credit
  Facility Provider to Purchase Bonds in Lieu of Redemption or Upon
  Acceleration

  	
  65

  
	
  Section 1206

  	
  Disclaimer of FDIC
  Insurance

  	
  65

  
	
   

  	
   

  
	
  ARTICLE XIII SUPPLEMENTAL INDENTURES

  	
   

  
	
  Section 1301

  	
  Amendments and
  Supplements Without Bondowners’ Consent

  	
  66

  
	
  Section 1302

  	
  Amendments With
  Bondowners’ Consent

  	
  66

  
	
  Section 1303

  	
  Consent of Borrower and
  Credit Facility Provider

  	
  67

  
	
   

  	
   

  
	
  ARTICLE XIV AMENDMENT OF LOAN AGREEMENT, PROMISSORY
  NOTE AND CREDIT FACILITY

  	
   

  
	
  Section 1401

  	
  Amendments Not
  Requiring Consent of Bondowners

  	
  67

  
	
  Section 1402

  	
  Amendments Requiring
  Consent of Bondowners

  	
  67

  
	
  Section 1403

  	
  Consent of Borrower and
  Credit Facility Provider

  	
  68

  

 

 iii
 

 

	
  ARTICLE XV FORM OF
  BONDS

  	
   

  
	
  Section 1501

  	
  General Matters

  	
  68

  
	
  Section 1502

  	
  Form of Bond Prior to the Conversion Date

  	
  68

  
	
  Section 1503

  	
  Form of Bond On or After Conversion Date

  	
  77

  
	
  Section 1504

  	
  Additional Matters Appearing on Bonds

  	
  85

  
	
   

  	
   

  
	
  ARTICLE XVI MISCELLANEOUS

  	
   

  
	
  Section 1601

  	
  Consent of Bondowners

  	
  86

  
	
  Section 1602 

  	
  Limitation of Rights

  	
  86

  
	
  Section 1603

  	
  Severability

  	
  86

  
	
  Section 1604

  	
  Notices

  	
  86

  
	
  Section 1605

  	
  Payments Due on Saturdays, Sundays and Holidays

  	
  87

  
	
  Section 1606

  	
  Captions

  	
   87

  
	
  Section 1607

  	
  Counterparts

  	
   87

  
	
  Section 1608

  	
  Governing Law

  	
  87

  

 

 iv

INDENTURE OF TRUST

THIS INDENTURE OF TRUST,
dated as of March 1, 1998, between the CITY OF LADYSMITH, WISCONSIN, a
political subdivision and body corporate and politic created under the laws of
the State of Wisconsin (the “Issuer”), and NORWEST BANK WISCONSIN, N.A., a
national banking association, duly organized, existing and authorized to accept
and execute trusts of the character herein set out by virtue of the laws of the
United States, with its principal corporate trust office located in Milwaukee,
Wisconsin, as trustee (the “Trustee”);

W I T N E S S E T H :

WHEREAS, the Issuer is
authorized pursuant to the provisions of the laws of the State of Wisconsin,
including specifically, but without limitation, Section 66.521, Wisconsin
Statutes (the “Act”), to issue its revenue bonds to finance or refinance all or
any part of the construction, equipping, reequipping, acquisition, purchase,
installation, reconstruction, rebuilding, rehabilitation, improving,
supplementing, replacing, maintaining, repairing, enlarging, extending or
remodelling of qualified projects and the improvement of sites therefor; and

WHEREAS, the Issuer has
agreed to issue its Variable Rate Demand Solid Waste Disposal Facility Revenue
Bonds, Series 1998 (CityForest Corporation Project) in the aggregate principal
amount of $27,000,000 (the “Bonds”), and to lend the proceeds of the sale of
the Bonds to CityForest Corporation (the “Borrower”), to enable the Borrower to
finance the acquisition, construction and equipping of a solid waste disposal
facility (the “Project”) located in the territory of the Issuer; and

WHEREAS, the Issuer and
the Borrower will enter into a Loan Agreement, dated as of March 1, 1998 (the “Loan
Agreement”), pursuant to which the Issuer will agree to lend the proceeds of the
Bonds to the Borrower and the Borrower will agree to make payments sufficient
to pay the principal and Purchase Price (as hereinafter defined) of, and
redemption premium, if any, and interest on, the Bonds as the same become due
and payable and to pay administrative expenses in connection with the Bonds;
and

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

WHEREAS, Union Bank of
California, N.A. (the “Bank”), will issue a Credit Facility (as hereinafter
defined) in favor of the Trustee, for the account of the Borrower, obligating
the Bank, as Credit Facility Provider to pay to the Trustee during the periods
described herein, upon request and in accordance with the terms thereof, the
amounts described therein for the purpose of making certain payments on or with
respect to the Bonds (other than Bonds

registered in the name of the Borrower or the Bank, which Bonds shall
not be entitled to any benefit of the Credit Facility); and

WHEREAS,
all things necessary to make the Bonds, when authenticated by the Trustee as in
this Indenture provided, the legal valid and binding limited obligations of the
Issuer according to the import thereof, and to constitute this Indenture a
valid pledge and assignment of the Trust Estate (as hereinafter defined) have
been done and performed;

GRANTING CLAUSES

NOW,
THEREFORE, in consideration of the premises, the acceptance by the Trustee of
the trusts hereby created, and the purchase and acceptance of delivery of the
Bonds by the purchaser(s) thereof, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
to secure the payment of the principal or Purchase Price of, premium, if any,
and interest on all Bonds issued and Outstanding under this Indenture according
to their tenor and effect, and to secure the performance and observance by the
Issuer of all the covenants contained in the Bonds and in this Indenture, the
Issuer does hereby pledge, assign, grant a security interest in and confirm
unto the Trustee, all and singular the properties, revenues and rights
hereinafter described, whether now owned or hereafter acquired, and the
proceeds thereof (collectively called the “Trust Estate”), to wit:

1.
All right, title and interest of the Issuer in and to the Promissory Note;

2.
All right, title and interest of the Issuer in, to and under the Loan Agreement
and the right to receive revenues and payments from the Borrower thereunder;

3.
All right, title and interest of the Issuer in and to the Pledged Revenues;

4.
All right, title and interest (if any) of the Issuer in and to the Credit
Facility;

5.
All right, title and interest of the Issuer in and to the Trust Funds and the
cash, securities and investments of which they are comprised (excluding the
Credit Facility Reimbursement Account and subject, however, to the rights of
the Credit Facility Provider with respect to the Debt Service Reserve Fund);
and

6.
All property which by the express provisions of this Indenture is required to
be subjected to the lien hereof, and any additional property that may from time
to time hereafter be made subject to the lien hereof by the Issuer or by anyone
on its behalf;

IN
TRUST, for the equal and ratable benefit and security of the Bondowners without
preference, priority or distinction as to lien or otherwise of any particular
Bond over

 2
 

any other Bond, except as
otherwise expressly provided herein and subject to the rights of the
Bondholders and Credit Facility Provider;

PROVIDED,
HOWEVER, that the Issuer reserves the right to enforce the Unassigned Rights in
its own name and for its own account; and

PROVIDED,
FURTHER, HOWEVER, that if the Issuer shall pay, cause to be paid or provide for
the payment of the principal of, premium, if any, and interest on the Bonds in
accordance with Article IX of this Indenture, and shall make all required “rebate”
payments to the United States Treasury in accordance with Section 803 of this
Indenture, and if the Issuer shall promptly, faithfully and strictly keep,
perform and observe all of its representations, covenants and agreements
contained in this Indenture, then in such event this Indenture and the rights
hereby granted (excepting Bondowners’ rights theretofore vested) shall cease,
terminate and be void, otherwise to remain in full force and effect upon the
trusts and subject to the conditions hereinafter set forth.

All
Bonds issued and secured hereunder are to be issued, authenticated and
delivered, and all Trust Funds, revenues and income hereby pledged are to be
dealt with and disposed of under and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes as hereinafter
expressed, and the Issuer has agreed and covenanted, and does hereby agree and
covenant, with the Trustee and with the respective Owners from time to time of
the Bonds, as follows, THAT IS TO SAY:

ARTICLE I

DEFINITIONS AND USE OF
PHRASES

Section
101 Definitions. As used in this Indenture and the recitals hereto, the
following terms and phrases shall have the following meanings.

“Act”
means Section 66.521 of the Wisconsin Statutes, as amended from time to time.

“Adjusted
Interest Rate” means, with respect to each Reset Period and Bonds of each
stated maturity, the interest rate determined and certified to the Trustee by
the Remarketing Agent as provided in Section 302(b)(iv) or Section 302(c)(iv),
as the case may be.

“Alternate
Paying Agent” means any bank or trust company designated by the Issuer at
the written request of the Borrower as an alternate or co-paying agent in
respect of the Bonds.

“Authorized
Denomination” means $100,000 or any multiple of $5,000 in excess thereof
provided that after the Conversion Date such term shall mean $5000 or any
multiple thereof.

 3
 

“Authorized
Officers of the Borrower” means the President or any Vice President of the
Borrower.

“Bankruptcy
Condition” means (i) the filing of a petition in bankruptcy by or against
the Borrower or the Issuer as debtor under the United States Bankruptcy Code,
11 U.S.C. Sections 101 et  seq., or (ii) the commencement or
continuance of other judicial proceedings with respect to the Borrower or the
Issuer as debtor under similar or successor federal or state bankruptcy,
reorganization or insolvency laws.

“Beneficial
Owner” means, with respect to a Bond which is held in Book Entry Form, the
person who owns the Beneficial Ownership Interest therein, as evidenced to the
satisfaction of the Trustee.

“Beneficial
Ownership Interest” means the right to receive payments and notices with
respect to Bonds which are held by the Depository under a Book Entry System and
for which the Depository does not, pursuant to the Letter of Representations,
act on behalf of the Beneficial Owner in connection with the optional or
mandatory tender of Bonds pursuant to Section 303 or Section 304 hereof.

“Bond
Amount” means $27,000,000.

“Bond
Counsel” means Independent Counsel whose legal and tax opinion on municipal
bond issues is nationally recognized.

“Bond
Fund” means the Trust Fund described in Section 703 of this Indenture.

“Bond
Purchase Account” means the trust account described in Section 306 of this
Indenture.

“Bond
Register” means the registration books maintained by the Trustee pursuant
to Section 207 of this Indenture.

“Bondowners”
and “Owners” (when used with reference to Bonds) means, at the time or
times of determination, the persons who are registered owners of Bonds.

“Bonds”
means the Issuer’s Variable Rate Demand Solid Waste Disposal Facility Revenue
Bonds, Series 1998 (CityForest Corporation Project) issued under this Indenture
in the aggregate principal amount of the Bond Amount.

“Book
Entry Form” or “Book Entry System” means, with respect to the Bonds,
a form or system, as applicable, under which (i) the ownership of beneficial
interests in the Bonds may be transferred only through book entry and (ii)
physical Bond certificates in fully registered form are registered only in the
name of a Depository or its nominee as Owner, with the physical Bond
certificates “immobilized” in the custody of the Depository.

 4
 

“Borrower”
means CityForest Corporation, a Minnesota corporation, and any successor,
surviving, resulting or transferee entity as provided in Sections 7.07, 7.09
and 11.02 of the Loan Agreement.

“Borrower’s
Address” means the address which the Borrower designates for the delivery
of notices hereunder. Until changed by notice from the Borrower to the Issuer,
the Credit Facility Provider, the Remarketing Agent and the Trustee, the
Borrower’s Address shall be:

CityForest Corporation

1215 East Worden Avenue

Ladysmith, Wisconsin 54848

Attention: President

Telephone: (715) 532-5541

Telecopy: (715) 532-5542

“Borrower’s
Certificate” means a certificate signed on behalf of the Borrower by
Authorized Officers of the Borrower.

“Borrower’s
Payments Account” means the Borrower’s Payments Account of the Bond Fund
described in Section 703 of this Indenture.

“Borrower’s
Representative” means the person or, in his or her absence, the alternate
person, designated in a Borrower’s Certificate (containing specimen signatures
of each such person) as a person authorized to execute and deliver
Requisitions, Conversion Notices and Reset Notices and to give Trust Fund
investment directions on behalf of the Borrower.

“Business
Day” means a day (a) other than a Saturday, Sunday or legal holiday on
which banks located in the city in which the Trustee’s Principal Office is
located, the city in which the Credit Facility Provider’s principal office is
located or the city in which the Remarketing Agent’s principal office is
located, are required or authorized to remain closed and (b) on which neither
the New York Stock Exchange nor the Federal Reserve Banks are closed.

“Calculation
Period” means, while the Bonds bear interest at the Variable Rate, the
period from Wednesday of each week (whether or not a Business Day) or any
Proposed Conversion Date through and including the earlier of (i) the following
Tuesday (whether or not a Business Day) or (ii) the day immediately preceding a
Proposed Conversion Date.

“Chief
Municipal Official” means the person at the time incumbent in the office of
Mayor of the Issuer or, in the event of the death, disability or absence of
such person, the person duly authorized and legally empowered to perform the
duties of such office in such event.

 5
 

“Clerk”
means the person at the time incumbent in the office of Clerk of the Issuer or,
in the event of the death, disability or absence of such person, the person
duly authorized and legally empowered to perform the duties of such office in
such event.

“Completion
Date” means the completion date of the Project as determined in accordance
with Section 3.05 of the Loan Agreement.

“Construction
Fund” means the Trust Fund described in Section 603 of this Indenture.

“Continuing
Disclosure Agreement” means the Continuing Disclosure Agreement, dated as
of the Effective Date, between the Borrower and the Trustee, as amended from
time to time.

“Cost
of Issuance Deposit Amount: means $540,000.

“Cost
of Issuance Fund” means the Trust Fund described in Section 602 of this
Indenture.

“Conversion
Date” means the date on which the interest rate on the Bonds is converted
from the Variable Rate to the Adjusted Interest Rate as provided in Section
302(b) of this Indenture.

“Conversion
Notice” means a notice in the form of Exhibit B to the Loan Agreement from
the Borrower to the Trustee, the Issuer, the Remarketing Agent, the Rating
Agency and the Credit Facility Provider designating a Proposed Conversion Date,
as provided in Section 302(b)(i) of this Indenture.

“Credit
Facility” means any letter of credit (or, on or after the Conversion Date,
any standby purchase agreement, guaranty, bond insurance policy or similar
credit enhancement instrument, meeting the requirements of Section 1202 of this
Indenture) or any Substitute Credit Facility. The initial Credit Facility is
Irrevocable Letter of Credit, No. 306S231063 issued by Union Bank of
California, N.A. in the original stated amount of $27,258,905 on the date of
original issuance and delivery of the Bonds.

“Credit
Facility Account” means the Credit Facility Account of the Bond Fund
described in Section 703 of this Indenture.

“Credit
Facility Expiration Date” means the stated expiry of a Credit Facility in
accordance with the terms thereof and Section 1202 of this Indenture.

“Credit
Facility Provider” means any bank, savings and loan association, insurance
company or other regulated financial institution which issues a Credit Facility
in accordance with Article XII of this Indenture. The initial Credit Facility
Provider is Union Bank of California, N.A., Los Angeles, California.

 6
 

“Credit
Facility Provider’s Address” means the address which the Credit Facility
Provider designates for the delivery of notices hereunder. Until changed by
notice from the Credit Facility Provider to the Issuer, the Remarketing Agent,
the Rating Agency, the Trustee and the Borrower, the Credit Facility Provider’s
Address shall be:

Union Bank of California,
N.A.

495 South Figueroa Street, 15th Floor

Los Angeles, California 90071

Attention: Vicente Bendanillo, Jr.

Telephone: (213) 236-6198

Telecopy: (213) 236-4096

“Credit
Facility Reimbursement Account” means the account created pursuant to
Section 706 of this Indenture.

“Credit
Facility Reimbursement Agreement” means the agreement between the Borrower
and the Credit Facility Provider pursuant to which the Credit Facility is
issued and, with respect to the initial Credit Facility, means the
Reimbursement Agreement, dated as of the Effective Date, between the Borrower
and Union Bank of California, N.A., as amended from time to time.

“Credit
Facility Substitution Date” means each date designated as such in
accordance with Section 1202 of this Indenture.

“Debt
Service Reserve Fund” shall have the meaning set forth in Article VI
hereof.

“Debt
Service Reserve Fund Requirement” shall mean initially $1,000,000 and
thereafter (i) while a Credit Facility is in effect, an amount in excess
thereof established by a written certificate provided to the Trustee signed by
the Borrower and the Credit Facility Provider, provided, that such amount shall
not exceed the Maximum Debt Service Reserve Amount, and, provided, further,
that such certification shall contain such certifications of the Credit
Facility Provider acceptable to Bond Counsel (expressed in a written opinion to
be provided to the Trustee, that increasing such amount will not adversely
affect the exclusion from gross income of interest on the Bonds) or (ii) if no
Credit Facility is in effect, and if the Borrower has not elected to liquidate
the Debt Service Reserve Fund in accordance with Section 407 hereof, an amount
equal to the lesser of the amount of the Debt Service Reserve Fund on the
Conversion Date or the Maximum Debt Service Reserve Amount.

“Depository”
means any securities depository that is a “clearing corporation” within the
meaning of the New York Uniform Commercial Code and a “clearing agency”
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, operating and maintaining, with its participants or otherwise, a
Book Entry System to record ownership of beneficial interests in the Bonds, and
to effect transfers of the Bonds, in Book

 7
 

Entry Form, and includes and
means initially The Depository Trust Company (a limited purpose trust company),
New York, New York.

“Determination
Date” means (i) with respect to each Calculation Period commencing on a
Wednesday, the Tuesday immediately preceding the commencement of such
Calculation Period or, if such Tuesday is not a Business Day, the next
preceding Business Day, and (ii) with respect to each Calculation Period
commencing on a Proposed Conversion Date, such Proposed Conversion Date.

“Determination
of Taxability” means the occurrence of any of the following:

(a)
the filing of a Borrower’s Certificate with the Trustee asserting or indicating
by its terms to the satisfaction of the Trustee that an Event of Taxability has
occurred;

(b)
notification to the Trustee that an authorized officer or official of the
Internal Revenue Service has issued a statutory notice of deficiency or
document of similar import to the effect that an Event of Taxability has
occurred; or

(c)
notification to the Trustee from any Bondowner or former Bondowner to the
effect that the Internal Revenue Service has assessed as includable in the
gross income of such Bondowner or former Bondowner interest on a Bond due to
the occurrence of any Event of Taxability;

(d)
provided, however, that in respect of clauses (b) and (c) above, a
Determination of Taxability shall not be deemed to have occurred unless and
until the Borrower has been notified of the allegation that an Event of
Taxability and a Determination of Taxability have occurred and the Borrower has
failed within 90 days following such notice either (i) to have the allegation
that an Event of Taxability has occurred rescinded by the Internal Revenue
Service or the Bondowner or the former Bondowner who made such allegation, as
the case may be, or (ii) to obtain an opinion of Bond Counsel acceptable to the
Trustee to the effect that no Event of Taxability has occurred.

“Effective
Date” means March 1, 1998.

“Eligible
Funds” means (i) any amounts (including investment earnings) in the Credit
Facility Account, the Debt Service Reserve Fund or the Bond Purchase Account,
and (ii) other amounts (including investment earnings) in the Bond Fund or the
Redemption Fund with respect to which the Trustee has received a Preference
Opinion.

“Event
of Default” means any of the events designated as such in Section 1001 of
this Indenture.

“Event
of Taxability” means the circumstance of interest paid or payable on any
Bond becoming includable for federal income tax purposes (other than for
purposes of

 8
 

computing alternative
minimum taxes) in the gross income of any Bondowner (other than a Bondowner who
is a “substantial user” of the Project or “related person” within the meaning
of Section 147(a) of the Internal Revenue Code) as a consequence of any act,
omission or event whatsoever; provided, however, that a change in the Internal
Revenue Code enacted after the date of issuance of the Bonds which results in
interest on borrowings by state and local governments generally being included
in gross income shall not be an Event of Taxability.

“Final
Maturity Date” means March 1, 2028.

“Government
Obligations” means direct, full faith and credit obligations of the United
States of America.

“Indenture”
means this Indenture of Trust from the Issuer to the Trustee, dated as of the
Effective Date, under which the Bonds are issued, as amended from time to time
by Supplemental Indentures.

“Independent
Counsel” means any attorney or firm of attorneys who or which shall be
acceptable to the Trustee and who or which is not an employee of the Borrower
or the Issuer.

“Initial
Debt Service Reserve Fund Deposit” means $1,000,000.

“Interest
Payment Date” means each date on which interest is stated to be due on any
Bond.

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

“Issuer”
means the City of Ladysmith, Wisconsin, a municipal corporation and political
subdivision of the State of Wisconsin, and any successor political subdivision
of the State of Wisconsin having jurisdiction over the Project.

“Issuer’s
Address” means the address which the Issuer designates for the delivery of
notices hereunder. Until changed by notice from the Issuer to the Borrower, the
Credit Facility Provider, the Remarketing Agent, the Rating Agency and the
Trustee, the Issuer’s Address shall be:

City of Ladysmith, Wisconsin

120 Minor Avenue West

P.O. Box 431

Ladysmith, Wisconsin 54848

Attention: Clerk

Telephone (215) 532-2600

Telecopy: (215) 532-2620

“Issuer’s Governing Body”
means the Common Council of the Issuer.

 9
 

“Letter of
Representations” means the agreement between the Issuer and the Depository
that sets forth the manner of making and processing payments, giving notices
and other procedures relating to the Depository’s Book Entry System. The
initial Letter of Representations is the Blanket Letter of Representations from
the Issuer to DTC.

“Loan
Agreement” means the Loan Agreement, dated as of the Effective Date,
between the Issuer and the Borrower, as amended from time to time in accordance
with Section 11.01 of the Loan Agreement and Article XIV of this Indenture.

“Mandatory
Tender Date” means each date on which all Bonds are required to be tendered
for purchase pursuant to Section 304 hereof.

“Maximum
Debt Service Reserve Amount” means the lesser of (i) 10% of the stated
principal amount of the Bonds, (ii) maximum annual debt service on the Bonds,
or (iii) 125% of average annual debt service on the Bonds. The amounts for (ii)
and (iii) above may be established by assuming the Bonds are level debt service
fixed rate bonds with an interest rate comparable to similar fixed rate bonds established
on the date of issuance of the Bonds by a certificate of the Remarketing Agent.

“Optional
Tender Date” means the date specified in a Purchase Demand as the date on
which the Owner or Beneficial Owner of the Bond(s) (or portions thereof)
described therein is demanding purchase of such Bond(s) (or portions thereof)
or the Beneficial Ownership Interest therein, which date must be a Business Day
not less than seven days after receipt by the Trustee of such Purchase Demand.

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

(i)
Bonds or portions thereof canceled by the Trustee or delivered to the Trustee
for cancellation;

(ii)
Bonds in lieu of which other Bonds have been authenticated and delivered in
accordance with Sections 206, 207, 210, 306, 309 and 403 of this Indenture; and

(iii)
Bonds which are not deemed to be Outstanding in accordance with the provisions
of Sections 213, 307 and 901 of this Indenture.

“Plant
Complex” means the land, building(s), improvements, fixtures and major
equipment located in the Issuer’s jurisdiction from time to time, with which
the Project Enterprise will be conducted and of which the Project forms a part.

“Pledged Bonds”
means Bonds or Beneficial Ownership Interests therein, purchased with the
proceeds of a draw under the Credit Facility pursuant to Section 1201(d) hereof
and not remarketed by the Remarketing Agent.

 10

“Pledged
Revenues” means all revenues and income derived by or for the account of
the Issuer from or for the account of the Borrower pursuant to the terms of the
Loan Agreement, the Promissory Note and this Indenture, including, without
limitation (i) all amounts derived pursuant to the Credit Facility, (ii) all
cash and securities held from time to time in the Trust Funds (except the Debt
Service Reserve Fund when it is held by the Credit Facility Provider), and the
investment earnings thereon, and (iii) all payments by the Borrower on the
Promissory Note or pursuant to Section 7.02 of the Loan Agreement; but
excluding any amounts derived by the Issuer for its own account pursuant to the
enforcement of Unassigned Rights.

“Preference
Opinion” means an opinion of Bond Counsel addressed to the Trustee stating
in effect that the use of the funds to which the opinion relates for the
purchase of Bonds or for the payment of the principal of, premium, if any, or
interest on the Bonds, as the case may be, will not, upon the occurrence of a
Bankruptcy Condition on or after the date of such opinion, constitute a
preference payment under the United States Bankruptcy Code (taking into account
the “insider” provisions thereof) or a payment of similar import (that is, a
payment subject to disgorgement upon the occurrence of certain bankruptcy
events) under the then applicable Federal and State bankruptcy, insolvency and
reorganization laws.

“Principal
Payment Date” means the Final Maturity Date and, during any Reset Period, each
March 1.

“Project”
means the project of the Borrower described in Exhibit A to the Loan
Agreement which has been or is to be acquired, constructed and installed in the
Issuer’s jurisdiction in accordance with the Project Plans and Specifications.

“Project
Enterprise” means the business of manufacturing paper and tissue products
utilizing solid waste.

“Project
Plans and Specifications” means the Borrower’s architectural and
engineering drawings and other plans and specifications for the Project, as
amended from time to time in accordance with Section 3.04 of the Loan
Agreement.

“Promissory
Note” means the Borrower’s promissory note in the form of Exhibit A to the
Loan Agreement, dated the date of issuance of the Bonds, issued in the
principal amount of the Bond Amount payable to the order of the Issuer.

“Proposed
Conversion Date” shall mean the date identified in a Conversion Notice
properly delivered by the Borrower pursuant to Section 302(b)(i) hereof as the
date on which the interest rate on the Bonds is to be converted from the
Variable Rate to the Adjusted Interest Rate.

“Purchase
Demand” means a written demand by an Owner or a Beneficial Owner of a Bond,
meeting the requirements of Section 303 hereof, that such Bond or the
Beneficial Ownership Interest therein be purchased on the date specified
therein.

 11
 

“Qualified
Investments” means such of the following as at the time of determination
are permitted investments under the Act: (i) Government Obligations, (ii)
securities as to which the timely payment of both principal and interest are
unconditionally guaranteed by the United States of America, (iii) obligations
of any of the following: Banks for Cooperatives, Federal Land Banks, Federal
Home Loan Banks, Federal Intermediate Credit Banks and Federal National
Mortgage Association, (iv) interest-bearing accounts, time deposits and
certificates of deposit issued by any bank, trust company or national banking
association (including the Trustee and any affiliate of the Trustee) which has
capital, surplus and undivided profits in excess of $10,000,000, but in no
event shall the amount invested at any one time, in interest-bearing accounts,
time deposits and certificates of deposit issued by any one bank, trust company
or national banking association equal or exceed 20% of the capital, surplus and
undivided profits of such bank, trust company or national banking association,
(v) commercial paper issued by domestic corporations which is rated not less
than P-l by the Rating Agency (or an equivalent rating from another national
rating agency), (vi) any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (i) through (v) above or
repurchase agreements fully collateralized by such investments, and (vii) at
any time while a Credit Facility is in effect, any other investment approved in
writing by the Credit Facility Provider; provided, however, that if the
conditions of any investment rating assigned or to be assigned to the Bonds
require an exclusion of or limitation on any of the foregoing, the term “Qualified
Investments” shall conform to such conditions.

“Rating
Agency” means Moody’s Investors Service, Inc., or any successor thereto (if
at the time maintaining a rating on the Bonds), and any other national rating
service maintaining a rating on the Bonds.

“Rebate
Account” means the special account described in Section 803(b).

“Record
Date” means (i) with respect to each regularly scheduled Interest Payment
Date occurring on or before the Conversion Date, and with respect to any
redemption date that is not a regularly scheduled Interest Payment Date, the
day (whether or not a Business Day) immediately preceding such Interest Payment
Date or redemption date, as the case may be and (ii) with respect to each
regularly scheduled Interest Payment Date occurring after the Conversion Date,
the 15th day (whether or not a Business Day) of the calendar month next
preceding such Interest Payment Date.

“Redemption
Fund” means the Trust Fund described in Section 704 of this Indenture.

“Remarketing
Agent” means Lehman Brothers Inc. and any successor institution serving as
Remarketing Agent pursuant to Section 310 of this Indenture.

 12
 

“Remarketing
Agent’s Address” means the address or office which the Remarketing Agent
designates for the delivery of notices or payments hereunder. Until changed by
notice from the Remarketing Agent to the Credit Facility Provider, the
Borrower, the Issuer and the Trustee, the Remarketing Agent’s Address shall be:

Lehman Brothers Inc.

Three World Financial Center, 20th Floor
 New York, New York 10285
 Attn: Frank Murphy
 Telephone: (212) 528-1022
 Telecopy: (212) 526-2129

“Required
Substitution” shall have the meaning assigned such term in Section 1202 of
this Indenture.

“Requisite
Consent of Bondowners” means the affirmative written consent of Bondowners
owning in aggregate not less than a majority in principal amount of the Bonds
(other than Bonds owned by the Borrower or any “related person” as defined in
Section 147(a) of the Internal Revenue Code) at the time Outstanding.

“Requisition”
means a requisition of the Borrower substantially in the form of Exhibit C
to the Loan Agreement.

“Reset
Date” means the March 1 next following the scheduled termination date of
each Reset Period.

“Reset
Notice” means a written notice, substantially in the form of Exhibit C to
the Loan Agreement, from the Borrower to the Trustee, the Remarketing Agent,
the Rating Agency, the Issuer and the Credit Facility Provider, establishing a
new Reset Period as provided in Section 302(c)(ii) hereof.

“Reset
Period” means (i) the period from the Conversion Date through and including
the February 28 specified in the Conversion Notice as the termination date of
the first Reset Period and (ii) each period thereafter from and including the
next March 1 through and including the February 28 specified in the Reset
Notice as the termination date for such Reset Period; provided that, if the
conditions set forth in Section 302(b)(vi) to the establishment of the
succeeding Reset Period are not satisfied as of the Reset Date, the then
current Reset Period shall not terminate, and the next Reset Period shall not
commence, until the date as of which such conditions are satisfied.

“Substitute
Credit Facility” shall have the meaning assigned to such term in Section
1202 of this Indenture.

“Supplemental
Indenture” means any supplement to or amendment of this Indenture entered
into in accordance with Article VIII of this Indenture.

 13
 

“Surplus
Construction Fund” means the Trust Fund described in Section 604 of this
Indenture.

“Tender
Date” means a Mandatory Tender Date or Optional Tender Date.

“Tendered
Bonds” means Bonds tendered or required to be tendered for purchase in
accordance with Section 305 of this Indenture.

“Trust
Funds” means the trust funds administered by the Trustee under this
Indenture other than the Bond Purchase Account, the Rebate Account and the
segregated trust accounts described in Sections 213, 307 and 309 of this
Indenture.

“Trustee”
means Norwest Bank Wisconsin, N.A., Milwaukee, Wisconsin, and any successor
banking corporation, banking association or trust company at the time serving
as corporate trustee under this Indenture.

“Trustee’s
Address” and “Trustee’s Principal Office” means the address or office which
the Trustee designates for the delivery of notices or payments hereunder or
under the Loan Agreement. Until changed by notice from the Trustee to the
Borrower, the Credit Facility Provider, the Remarketing Agent, the Rating
Agency and the Issuer, the Trustee’s Address and Principal Office is:

Norwest Bank Wisconsin, N.A.

Suite 1200

100 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Attention: Corporate Trust

Telephone: (414) 224-7489

Telecopy: (414) 224-3747

“Unassigned
Rights” means the Borrower’s obligations to the Issuer under Sections 3.08,
7.03 and 11.09 of the Loan Agreement.

“Untendered
Bonds” means Bonds which are required to be tendered for purchase in
accordance with the provisions of Section 305 of this Indenture but which in
fact are not delivered to the Trustee on or before the applicable Tender Date.

“Variable
Rate” means the interest rate borne by the Bonds from time to time prior to
the Conversion Date, if any, determined in accordance with Section 302(a) of
this Indenture.

Section
102 Use of Phrases; Rules of Construction. The following provisions
shall be applied wherever appropriate herein:

 14
 

“Herein”,
“hereby”, “hereunder”, “hereof” and other equivalent words
refer to this Indenture as an entirety and not solely to the particular portion
of this Indenture in which any such word is used.

The
definitions set forth in Section 101 hereof shall be deemed applicable whether
the words defined are herein used in the singular or the plural.

Wherever
used herein, any pronoun or pronouns shall be deemed to include both the
singular and plural and to cover all genders.

Unless
otherwise provided, any determinations or reports hereunder which require the
application of accounting concepts or principles shall be made in accordance
with generally accepted accounting principles.

ARTICLE II

GENERAL PROVISIONS
RELATING TO THE BONDS

Section
201 Creation of Bonds for Issuance. There is hereby created for issuance
an issue of Bonds to be designated:

CITY OF LADYSMITH, WISCONSIN

VARIABLE RATE DEMAND SOLID WASTE DISPOSAL FACILITY

REVENUE BONDS,

SERIES 1998 (CITYFOREST CORPORATION PROJECT)

provided, that on or after the Conversion
Date, the Bonds shall be designated:

CITY OF LADYSMITH, WISCONSIN

SOLID WASTE DISPOSAL FACILITY REVENUE BONDS, SERIES 1998

(CITYFOREST CORPORATION PROJECT)

The
Bonds shall be issued in the aggregate principal amount of Twenty-Seven Million
Dollars ($27,000,000), and the maximum aggregate principal amount of Bonds that
may be Outstanding at any one time is hereby expressly limited to such amount.

The
Bonds shall be numbered in such manner as the Trustee shall deem appropriate,
provided that each particular Bond shall have a different identifying number.
The Bonds shall be issuable in the form of typewritten, lithographed, printed
or engraved fully registered Bonds in Authorized Denominations.

The
Bonds shall mature and bear interest as provided in Sections 301 and 302 of
this Indenture. The Bonds shall specify, as their original issue date, the date
of their original issuance and delivery. Each particular Bond shall be dated,
as its registration date, the date of its authentication.  Bonds authenticated prior to the first
Interest Payment Date shall bear

 15
 

interest from the original
issue date. Bonds authenticated on or after the first Interest Payment Date
applicable thereto shall bear interest from the Interest Payment Date next
preceding the date of their authentication unless the date of such authentication
is an Interest Payment Date to which interest has been fully paid or provided
for, in which case they shall bear interest from such Interest Payment Date. If
interest on the Bonds shall be in default, such Bonds shall bear interest from
the date to which interest on such Bonds has been paid in full or, if no
interest has been paid, then from the date of their original authentication and
delivery.

Section
202 Parity. This Indenture is for the equal and ratable benefit and
security of all Bonds issued hereunder. All Bonds shall be of equal rank, and
no Bondowner shall be accorded a preference or priority over any other
Bondowner except as expressly authorized or provided herein.

Section
203 Bonds to be Limited Obligations of Issuer. In accordance with the
Act, the Bonds shall be limited obligations of the Issuer payable by it solely
from the Pledged Revenues. The Bonds shall not constitute a debt or obligation
of the Issuer, the county in which it is located, the State of Wisconsin or any
political subdivision thereof within the meaning of any State of Wisconsin
constitutional provision or statutory limitation and shall not be a charge
against their general credit or taxing powers.

Section
204 Execution of Bonds. The Bonds shall be executed on behalf of the
Issuer by its Chief Municipal Official under the official seal, if any, of the
Issuer attested by its Clerk. The signatures of the Chief Municipal Official
and the Clerk on the Bonds may be manual or facsimile. The official seal of the
Issuer on the Bonds may be actually impressed or imprinted or may be reproduced
thereon by facsimile.

Bonds
bearing the manual or facsimile signatures of the persons who were the Chief
Municipal Official and the Clerk at the time of the execution thereof shall be
valid and sufficient for all purposes notwithstanding that such persons or
either of them have ceased to hold such offices prior to the authentication and
delivery of the Bonds or did not hold such offices at the date of the Bonds.
For this purpose a Bond executed by facsimile signature shall be deemed to have
been executed on the date of the printing thereof.

Section
205 Authentication. The Trustee is hereby appointed as a fiscal agent of
the Issuer for purposes of authenticating the Bonds. From time to time after
the execution and delivery of this Indenture, the Issuer may deliver executed
Bonds to the Trustee for authentication, and the Trustee shall authenticate and
deliver such Bonds as provided in this Indenture and not otherwise.

No
Bond shall be entitled to any benefit under this Indenture or be valid for any
purpose unless there appears on such Bond a certificate of authentication substantially
in the form set forth in Sections 1502 or 1503 hereof, as appropriate, executed
on behalf of the Trustee with the manual signature of an authorized signatory
of the Trustee. Such certificate of authentication executed as aforesaid on a
Bond shall be conclusive evidence that such Bond has been authenticated and
delivered under this Indenture.

 16
 

Section
206 Form of Bonds. The Bonds shall be issuable only as fully registered
Bonds substantially in the form set forth in Section 1502 (in the case of Bonds
authenticated prior to the Conversion Date) or 1503 (in the case of Bonds
authenticated on or after the Conversion Date) of this Indenture.

Pending
the preparation of definitive Bonds, the Issuer may execute and the Trustee
shall authenticate and deliver typewritten Bonds which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
Authorized Denomination, substantially of the tenor of the definitive Bonds in
lieu of which they are issued, in fully registered form, with such appropriate
insertions, omissions, substitutions and other variations as the Chief
Municipal Official and Clerk may determine, as evidenced by their manual
signing of such Bonds. If temporary Bonds are issued, the Trustee will cause
definitive Bonds to be prepared without unreasonable delay. After the
preparation of definitive Bonds, the temporary Bonds shall be exchangeable for
definitive Bonds upon surrender of the temporary Bonds at the Trustee’s
Principal Office without charge to the Bondowner. Upon surrender for
cancellation of any one or more temporary Bonds, the Issuer shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Bonds of Authorized Denominations. Until so
exchanged the temporary Bonds shall in all respects be entitled to the same
benefits under this Indenture as definitive Bonds, and the principal of,
premium, if any, and interest thereon, when and as payable, shall be paid to
the Owners of the temporary Bonds.

Section
207 Provision for Registration, Transfer and Exchange of Bonds. The
Bonds are issuable only as fully registered bonds and, except as hereinafter
provided, registered in the name of the Depository or its nominee, which shall
be considered to be the Bondowner for all purposes of this Indenture,
including, without limitation, payment by the Issuer of principal or purchase
price of, premium, if any, and interest on the Bonds, and receipt of notices
and exercise of rights of Bondowners. There shall be a single temporary Bond
for each maturity which shall be immobilized in the custody of the Depository
(or the Trustee as custodian for the Depository) with the beneficial owners
having no right to receive the Bonds in the form of physical securities or
certificates. Ownership of beneficial interests in the Bonds shall be shown by
book entry on the Book Entry System maintained and operated by the Depository,
and transfers of ownership of beneficial interests shall be made only by
Depository and, if applicable, its participants, by book entry, the Issuer
having no responsibility therefor. The Bonds as such shall not be transferable
or exchangeable, except for transfer to another Depository or to another
nominee of a Depository, without further action by the Trustee.

If
any Depository determines not to continue to act as a Depository for the Bonds
for use in a Book Entry System, the Trustee shall attempt to have established a
securities depository/book entry system relationship with another qualified
Depository under this Indenture. If the Trustee does not or is unable to do so,
the Issuer and the Trustee, after the Trustee has made provision for
notification of the beneficial owners by the then Depository, shall permit
withdrawal of the Bonds from the Depository, and authenticate and deliver Bond
certificates in fully registered form (in Authorized Denominations) to the
assigns

 17
 

of the Depository or its
nominee, all at the cost and expense (including costs of printing definitive
Bonds) of the Borrower.

If
the Bonds are not in a Book Entry System, the Trustee shall cause a register
(herein sometimes referred to as the “Bond Register”) to be kept at the Trustee’s
Principal Office for the purpose of providing for the registration and transfer
of Bonds in accordance with the provisions of this Section and such reasonable
additional regulations as the Trustee may prescribe. Subject to such
regulations, any Bondowner may cause its address on the Bond Register to be
changed by giving written notice to the Trustee. At reasonable times and under
reasonable regulations established by the Trustee, the Bond Register may be
inspected and copied by the Borrower, the Credit Facility Provider, the
Remarketing Agent, the Issuer or by Owners (or a designated representative
thereof) of 10% or more in aggregate principal amount of Bonds then
Outstanding, the authority of such designated representative to be evidenced to
the satisfaction of the Trustee.

Subject
to the foregoing provisions regarding the maintenance of a Book Entry System
for the Bonds, each Bond shall be fully negotiable. A Bond may be transferred
only by a written assignment duly executed by the Bondowner or by such Owner’s
duly authorized legal representative. Upon presentation and surrender of the
Bond together with said executed form of assignment at the Trustee’s Principal
Office, the Trustee shall, subject to the limitations contained in the last
paragraph of this Section 207, register the transfer in the Bond Register;
provided, however, that the Trustee shall have no obligation to register the
transfer unless the executed assignment shall be satisfactory to it in form and
substance. Upon registration of the transfer of a Bond, the Trustee shall
cancel the surrendered Bond and the Issuer shall issue, and the Trustee shall
authenticate, one or more new Bonds of Authorized Denominations of the same
maturity and interest rate and in the same aggregate principal amount as the
surrendered Bond.

Subject
to the foregoing provisions regarding the maintenance of a Book Entry System
for the Bonds, and to the limitations contained in the last paragraph of this
Section 207, Bonds may be exchanged at the Trustee’s Principal Office for a
like aggregate principal amount of Bonds of the same maturity and interest rate
in other Authorized Denominations. Each Bond surrendered for exchange shall be
accompanied by a written assignment in form and substance satisfactory to the
Trustee and duly executed by the Bondowner or by such Owner’s duly authorized
legal representative. The Issuer shall issue and the Trustee shall authenticate
such new Bonds as shall be required to accomplish exchanges as aforesaid.

The
Bondowner requesting any registration of transfer or exchange of Bonds shall
pay with respect thereto any resulting tax or governmental charge. All such payments
shall be conditions precedent to the exercise of the Bondowner’s rights of
registration of transfer or exchange.

All
registrations of transfer and exchanges of Bonds shall be accomplished in such
manner that no increase or decrease in interest payable on the Bonds results
therefrom.

 18
 

Except
in connection with a purchase of Bonds pursuant to Section 305 of this
Indenture, the Trustee shall not be required to register the transfer of or to
exchange any Bond (i) after the receipt by the Trustee of a Purchase Demand
with respect thereto and through the corresponding Optional Tender Date, (ii)
after the Trustee has given notice of a Mandatory Tender Date and through the
Mandatory Tender Date, (iii) during the fifteen days prior to the mailing of
any notice of redemption, or (iv) after such Bond has been selected for
redemption. Upon registration of the transfer of any Bond that has been called
for redemption, the Trustee shall promptly give notice of redemption to the
transferee in the manner provided in Section 402 hereof.

Section
208 Persons Treated as Owners. The Issuer, the Trustee and any Alternate
Paying Agent may treat the person in whose name any Bond is registered (who, in
the case of a Book Entry System, shall be the Depository) as the absolute owner
of such Bond for the purpose of receiving payment of the principal of, premium,
if any, and interest thereon and for all other purposes whatsoever (except as
otherwise specifically provided herein with respect to Beneficial Owners),
whether or not such Bond is overdue and irrespective of any actual, implied or
imputed notice to the contrary.

Section
209 Manner of Payment of Bonds. The principal of and premium, if any, on
each Bond shall be payable to the Owner of such Bond as shown on the Bond
Register on the date of payment, upon presentation and surrender at the Trustee’s
Principal Office. The interest on any Bond which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid by check
drawn by the Trustee payable to the order of the person in whose name that Bond
is registered as of the close of business on the Record Date for such interest
and mailed to such person at the address shown on the Bond Register.

The
principal of, premium, if any, and interest on all Bonds shall be paid in
lawful money of the United States of America.

Notwithstanding
the foregoing, while the Bonds are in a Book Entry System, payments shall be
made as provided in the Letter of Representations.

Section 210 Mutilated,
Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated, lost,
stolen or destroyed, the Issuer shall execute and the Trustee shall
authenticate a new Bond of like date, maturity, interest rate and denomination
as the Bond mutilated, lost, stolen or destroyed. In the case of any lost,
stolen or destroyed Bond, there shall first be furnished to the Issuer and the
Trustee evidence of such loss, theft or destruction satisfactory to the Issuer
and the Trustee, together with indemnity satisfactory to them. In the case of
any mutilated Bond, such Bond shall be surrendered to the Trustee. In the event
any such Bond shall have matured, the Trustee instead of issuing a substitute
Bond may pay the same without surrender thereof. The Issuer and the Trustee may
charge the Owner of such Bond with their reasonable fees and expenses in this
connection.

 19

Section
211 Designation of Bond Registrar and Paying Agents. The Trustee shall
be the Bond registrar and a paying agent for and in respect of all Bonds. At
the written request of the Borrower, the Issuer may also designate one or more
Alternate Paying Agents.

Section
212 Disposition of Bonds Upon Payment; Safe-keeping of Bonds Surrendered for
Exchange. All Bonds fully paid, fully redeemed or purchased by the Trustee
or any Alternate Paying Agent for cancellation under the provisions of this
Indenture shall be canceled when such final payment, redemption or purchase is
made, and such canceled Bonds shall be delivered to the Trustee. Bonds
surrendered to the Trustee for exchange or transfer in accordance with Section
207 hereof, temporary Bonds surrendered for exchange in accordance with Section
206 hereof, and mutilated Bonds surrendered for exchange in accordance with
Section 210 hereof, Bonds surrendered for partial redemption in accordance with
Section 403 hereof, Bonds tendered for purchase and purchased in accordance
with Section 305 hereof, and Pledged Bonds delivered by the Credit Facility
Provider upon remarketing in accordance with Section 309 hereof shall be
canceled by the Trustee. All canceled Bonds shall be destroyed by the Trustee
by cremation, shredding or other suitable means, and the Trustee shall execute
a certificate of destruction in duplicate describing the Bonds so destroyed and
one executed certificate shall be filed with the Issuer and the other executed
certificate shall be retained by the Trustee.

Section
213 Nonpresentment of Bonds. In the event any Bond shall not be
presented for payment when the principal thereof becomes due, either at stated
maturity or on the date fixed for redemption thereof, if Eligible Funds
sufficient to pay such Bond shall be held by the Trustee for the benefit of the
Owner thereof, all liability of the Issuer to the Owner thereof for the payment
of such Bond shall forthwith cease, terminate and be completely discharged, and
thereupon it shall be the duty of the Trustee to hold such Eligible Funds in a
segregated trust account without liability for interest thereon, for the
benefit of the Owner of such Bond who shall thereafter be restricted
exclusively to such account for any claim of whatever nature on such person’s
part under this Indenture or on or with respect to said Bond. Such cash in such
segregated trust account shall thereafter no longer be considered Pledged
Revenues and any such Bond shall no longer be deemed Outstanding under this
Indenture.

After
any such funds have been held in such segregated trust account for four years,
the Trustee shall certify the amount thereof and the identifying numbers of the
particular Bonds whose Owners have a claim thereagainst (which Owners shall
also be identified, if known) and deliver such certificate and such cash to the
Borrower. Thereafter such Owners shall have an unsecured claim against the
Borrower in respect of payment of such unpresented Bonds, and shall have no
further claim whatever against the Issuer, the Trustee or the Credit Facility
Provider in respect thereof.

Section
214 Delivery of Bonds. Upon the execution and delivery of this
Indenture, the Issuer shall issue and execute and deliver the Bonds to the
Trustee, and the Trustee shall authenticate such Bonds and deliver them to the
purchaser(s) as may be directed by the Issuer.

 20
 

Prior
to the delivery of the Bonds by the Trustee there shall be filed with the
Trustee:

(a)    a certified copy of the resolution(s) of the
Issuer’s Governing Body authorizing the issuance of the Bonds and the execution
and delivery of the Loan Agreement and this Indenture;

(b)    original executed counterparts of the Loan
Agreement, this Indenture and the Remarketing Agreement;

(c)    the original executed Promissory Note;

(d)    the original executed Credit Facility;

(e)    a request and authorization to the Trustee,
executed on behalf of the Issuer by its Chief Municipal Official or Clerk, to
deliver the Bonds to the purchaser(s) therein identified, in the form and
amount requested upon payment to the Trustee, for the account of the Issuer, of
a specified sum.

ARTICLE III

TERMS OF THE BONDS

Section
301 Maturity. Subject to the provisions of this section providing for
assignment of stated maturities on and after the Conversion Date, the Bonds
shall mature on the Final Maturity Date. The Bonds shall be subject to prior
redemption as provided in Article VI hereof and to optional and mandatory
purchase as provided in Sections 303 and 304 hereof.

Upon
the receipt of a Conversion Notice, the Trustee shall, in accordance with the
instruction of the Remarketing Agent, assign stated maturity dates to the
Bonds, to be effective on the Conversion Date, as hereinafter described. Upon
receipt of a Reset Notice, the Trustee shall, in accordance with the instructions
of the Remarketing Agent, assign stated maturity dates to the Bonds, to be
effective on the related Reset Date, as hereinafter described. Stated maturity
dates of each March 1 occurring during the applicable Reset Period shall be
assigned, such that the principal amount of Bonds to mature on each such March
1 is equal to the quotient (rounded down, if necessary, to the nearest multiple
of $100,000) obtained by dividing the aggregate principal amount of Bonds
Outstanding on the Conversion Date or Reset Date, as the case may be, by the
number of March 1’s occurring from (but not including) the Conversion Date or
Reset Date, as the case may be, through and including the Final Maturity Date.
After the Conversion Date, the Bond certificates shall specify the maturity
dates so assigned and no particular Bond certificate may cover more than one
such stated maturity date.

Section 302 Interest
on the Bonds. (a) Prior to the Conversion Date, if any, the Bonds shall
bear interest at the Variable Rate determined from time to time in accordance
with the provisions of this Section 302(a), payable on the first Business Day

 21
 

of each month, commencing March, 1998, on each
Mandatory Tender Date, and at maturity. From the date of issuance of the Bonds
through and including March 31, 1998 the Variable Rate shall be equal to 3.80%
per annum. Thereafter, the Variable Rate for each Calculation Period shall be
determined on the Determination Date with respect thereto and shall be the
lesser of (i) 10% per annum, or (ii) the minimum rate of interest which, in the
judgment of the Remarketing Agent, under prevailing market conditions, taking
into account the current rates for tax-exempt securities comparable in length
of interest rate adjustment periods, liquidity, security and creditworthiness
to the Bonds, would enable the Bonds to be sold at a price of par, plus accrued
interest, if any, on the Determination Date. The Remarketing Agent shall
determine the Variable Rate for each Calculation Period on the corresponding
Determination Date, and shall notify the Trustee of such determination on such
date by telephone, promptly, confirmed in writing, or by facsimile. In the
event that the Remarketing Agent shall fail for any reason to determine, and
notify the Trustee of, the Variable Rate for any Calculation Period, the
Variable Rate for such Calculation Period shall be equal to the Variable Rate
in effect immediately prior to the commencement of such Calculation Period.

Interest
accruing at the Variable Rate shall be computed on the basis of a 365 or
366-day year, as the case may be, and the actual number of days elapsed.

(b)
   From and after the Conversion Date, if
any, the Bonds of each stated maturity shall bear interest during each Reset
Period at the Adjusted Interest Rate with respect thereto, payable on the first
day of February and August of each year, commencing the first such date which
is at least 30 days after the Conversion Date, and at maturity. Interest
accruing at the Adjusted Interest Rates shall be calculated on the basis of a
360-day year comprised of twelve 30-day months. The interest rate on the Bonds
may be converted to the Adjusted Interest Rates as follows:

(i)
         The Borrower may designate any
Business Day (except as provided in paragraph (xii) below) as a Proposed Conversion
Date by delivering to the Trustee, the Remarketing Agent, the Issuer, the
Rating Agency and the Credit Facility Provider a Conversion Notice not less
than 45 days, nor more than 60 days, prior to the Proposed Conversion Date
(unless a shorter notice shall be acceptable to the Trustee). Such Conversion
Notice shall (a) specify the Proposed Conversion Date and the termination date
of the first Reset Period (which must be a February 28), (b) request the
establishment of an Adjusted Interest Rate for the Bonds of each stated
maturity to be in effect during such Reset Period, (c) provide the notice
described in Section 407 and state whether or not a Credit Facility will be in
effect during such Reset Period and (i) if so, describe such Credit Facility and
identify the Credit Facility Provider, and (ii) if not, include the written
consent of the current Credit Facility Provider to such conversion, (d) be
accompanied by a written opinion of Bond Counsel, addressed to the Trustee, the
Issuer and the Remarketing Agent, to the effect that the conversion of the
interest rate on the Bonds to the Adjusted Interest

 22
 

Rates is permitted by the
Act and this Indenture and that such conversion and the delivery of the Credit
Facility, if any, described in clause (c) above will not (upon satisfaction of
such conditions as may be set forth therein) result in interest on the Bonds
being included in gross income for federal income tax purposes, and (e) be
accompanied by a written undertaking of the Remarketing Agent to calculate the
principal amounts of Bonds to mature on each Principal Payment Date, establish
the Adjusted Interest Rates for Bonds maturing on each Principal Payment Date
and remarket the Bonds on the Proposed Conversion Date.

(ii)
        Upon receipt of a Conversion Notice,
the Trustee shall determine whether such Conversion Notice complies with
paragraph (i) above, and shall notify the Remarketing Agent, the Credit
Facility Provider and the Borrower of such determination. If the Conversion
Notice does comply with said paragraph (i), the Trustee shall also notify the
Bondowners of the mandatory tender on the Proposed Conversion Date as provided
in Section 304 hereof.

(iii)
       The Borrower or, if no Credit
Facility will be in effect during the First Reset Period, the current Credit
Facility Provider, may rescind the Conversion Notice by delivering to the
Trustee and the Remarketing Agent, no later than eight days prior to the
Proposed Conversion Date, a notice stating that the Borrower or the Credit
Facility Provider, as the case may be wishes to rescind the Conversion Notice
and have the Bonds continue to bear interest at the Variable Rate on and after
the Proposed Conversion Date.

(iv)
      Upon receipt of notice from the
Trustee under paragraph (ii) above, and unless the Remarketing Agent shall have
received notice from the Borrower under paragraph (iii) above, the Remarketing
Agent shall, no later than seven days prior to the Proposed Conversion Date,
determine the principal amount of Bonds to mature on each Principal Payment
Date (as provided in Section 301) and the respective Adjusted Interest Rates
and shall notify the Trustee of such determinations on such date by telephone,
promptly confirmed in writing, or by facsimile. The Adjusted Interest Rate for
Bonds of each stated maturity to be in effect during the first Reset Period
shall be the lesser of (a) 20% per annum, or (b) the minimum rate of interest
which, in the judgment of the Remarketing Agent, under prevailing market
conditions, taking into account the current rates for tax-exempt securities
comparable in term, security and creditworthiness to such Bonds, would enable
such Bonds to be sold at a price of par on the Proposed Conversion Date.

(v)
       On the Proposed Conversion Date,
the Borrower shall cause to be delivered: (a) to the Trustee, the Credit
Facility, if any, described in paragraph (i)(c) above, together with all other
items required by Section 1202 hereof and (b) to the Trustee and the
Remarketing Agent, a written opinion of Bond Counsel, dated the Proposed Conversion
Date, to the effect that the conversion

 23
 

 

of the interest rate on the
Bonds to the Adjusted Interest Rate and the delivery of the Credit Facility, if
any, described in clause (a) above, will not result in an Event of Taxability.

(vi)
      If all of the requirements of
paragraphs (i), (ii), (iv) and (v) above are met, if the Borrower has not
rescinded the Conversion Notice pursuant to paragraph (iii) above, and if by
11:00 a.m., New York, New York time, on the Proposed Conversion Date the
Remarketing Agent has successfully remarketed all of the Bonds at the Adjusted
Interest Rates and the proceeds of such remarketing are available in the Bond
Purchase Account pursuant to Section 306, the Proposed Conversion Date shall be
the Conversion Date and the Bonds shall bear interest at the respective
Adjusted Interest Rates during the first Reset Period. If the Borrower rescinds
the Conversion Notice pursuant to paragraph (iii) above, if for any reason the
Remarketing Agent fails to determine and notify the Trustee of the Adjusted
Interest Rates as described in paragraph (iv) above, if the Borrower fails to
cause to be delivered the Credit Facility, if any, and opinion of Bond Counsel
as described in paragraph (v) above, or if the Remarketing Agent has not successfully
remarketed all of the Bonds and caused the proceeds thereof to be available in
the Bond Purchase Account by 11:00 a.m., New York, New York time, on the
Proposed Conversion Date, the Proposed Conversion Date shall not be the
Conversion Date and the Bonds shall continue to bear interest at the Variable
Rate.

(vii)
     Notwithstanding the foregoing, no
Proposed Conversion Date shall be established on a day that is during the
thirty-five days immediately preceding a Principal Payment Date.

Interest
accruing at the Adjusted Interest Rates shall be calculated on the basis of a
360-day year comprising twelve 30-day months.

(c)
   Following the first Reset Period, the
Adjusted Interest Rates shall be established for each succeeding Reset Period
as follows:

(i)
         At least 45 days, but not more
than 60 days, prior to each Reset Date, the Trustee shall send a notice to the
Borrower and the Remarketing Agent, setting forth: (i) the Reset Date, and (ii)
that a Reset Notice is due not later than 25 days before the Reset Date. The
Trustee shall also notify the Bondholders of the mandatory tender on the Reset
Date as provided in Section 304 hereof.

(ii)
        Not later than 25 days prior to
each Reset Date, the Borrower shall deliver to the Trustee, the Remarketing
Agent, the Issuer, the Rating Agency and the Credit Facility Provider a Reset
Notice with respect to the Reset Period commencing on such Reset Date, which
shall (a) specify the termination date of such Reset Period, which date must
always be a February 28, (b) request

 24
 

the establishment of an
Adjusted Interest Rate for the Bonds of each stated maturity to be in effect
during such Reset Period, (c) state whether or not a Credit Facility will be in
effect during such Reset Period and if so, describe such Credit Facility and identify
the Credit Facility Provider, and (d) be accompanied by a written opinion of
Bond Counsel, addressed to the Trustee, the Issuer and the Remarketing Agent,
to the effect that the establishment of the new Adjusted Interest Rates is
permitted by the Act and this Indenture and that such establishment and the
delivery of the Credit Facility, if any, described in clause (c) above will not
(upon satisfaction of such conditions as may be set forth therein) result in
interest on the Bonds being included in gross income for federal income tax
purposes.

(iii)
       If the Borrower delivers to the
Trustee a document purporting to be a Reset Notice, the Trustee shall as
promptly as possible determine whether it is proper and sufficient as a Reset
Notice pursuant to this Indenture, and promptly notify the Borrower, the Credit
Facility Provider and the Remarketing Agent of such determination.

(iv)
      On the last Business Day which is at
least seven days prior to the Reset Date (or on an earlier day selected by the
Remarketing Agent with the consent of the Borrower), the Remarketing Agent
shall determine the principal amount of Bonds to mature on each Principal
Payment Date (as provided in Section 301) and the respective Adjusted Interest
Rates, and shall notify the Trustee of such determination on such date by
telephone, promptly confirmed in writing, or by facsimile. The Adjusted
Interest Rate for Bonds of each stated maturity to be in effect during the
Reset Period commencing on such Reset Date shall be the lesser of (a) 20% per
annum, or (b) the minimum rate of interest which, in the judgment of the
Remarketing Agent, under prevailing market conditions, taking into account the
current rates for tax-exempt securities comparable in term, security and
creditworthiness to such Bonds, would enable such Bonds to be sold at a price
of par on the Reset Date (or, in the case of a Reset Date that is not a
Business Day, at a price of par plus accrued interest on the next succeeding
Business Day).

(v)
       On the Reset Date (or, if the Reset
Date is not a Business Day, on the next succeeding Business Day), the Borrower
shall cause to be delivered: (a) to the Trustee, the Credit Facility, if any,
described in paragraph (ii)(c) above, together with all other items required by
Section 1202 hereof and (b) to the Trustee and the Remarketing Agent, a written
opinion of Bond Counsel, dated the date of delivery thereof, to the effect that
the establishment of the new Adjusted Interest Rate and the delivery of the
Credit Facility, if any, described in clause (a) above, will not result in an
Event of Taxability.

(vi)
      It is a condition to the
establishment of any Reset Period and the Adjusted Interest Rates with respect
thereto that (a) the Borrower shall have

 25
 

delivered to the Trustee a
Reset Notice in proper form, (b) the Remarketing Agent shall have determined
the Adjusted Interest Rates to be in effect during such period, (c) the
Borrower shall have delivered the Credit Facility, if any, and the opinion of
Bond Counsel described in paragraph (v) above, and (d) by 11:00 a.m., New York,
New York time, on the Reset Date (or, if the Reset Date is not a Business Day,
on the next succeeding Business Day), the Remarketing Agent shall have
successfully remarketed all of the Bonds at the new Adjusted Interest Rates and
the proceeds of such remarketing shall be available in the Bond Purchase
Account pursuant to Section 306. In the event such conditions have not been
satisfied as of the Reset Date (or, if the Reset Date is not a Business Day, as
of the next succeeding Business Day), the next Reset Period shall not commence,
and the new Adjusted Interest Rates and stated maturity dates assigned pursuant
to Section 301 shall not become effective, until such time, if any, as such
conditions are satisfied. On any Business Day thereafter upon which each such
condition has been satisfied (provided that the Remarketing Agent may have
established different Adjusted Interest Rates and the Bonds shall have been
remarketed in accordance with Section 309), the next Reset Period shall
commence. No failure to satisfy such conditions shall affect the requirement
for mandatory tender of Bonds on the Reset Date (or, if the Reset Date is not a
Business Day, on the next succeeding Business Day) or the right of the
Bondowners to have their Bonds purchased on such date; provided that no
remarketing of Bonds pursuant to Sections 308 or 309 shall be effective until
all such conditions have been satisfied.

(vii)
     To the extent permitted by law,
overdue principal, premium, if any, and interest shall bear interest at the
same rate as was borne by the Bonds on the due date of the payment that is
delinquent.

Section
303     Purchase of Bonds Upon Demand.
 While the Bonds bear interest at the
Variable Rate, any Bond or the Beneficial Ownership Interest therein (other
than a Pledged Bond), or any portion thereof in an Authorized Denomination,
shall be purchased by the Trustee, on behalf of the Borrower, but only from the
funds available therefor in the Bond Purchase Account, at a purchase price equal
to 100% of the principal amount thereof, plus accrued interest to the Optional
Tender Date, upon the demand of the Owner or Beneficial Owner thereof as
provided in this Section 303. The Owner or Beneficial Owner, as the case may
be, of a Bond may demand purchase of such Bond or the Beneficial Ownership
Interest therein, on any Business Day which is at least seven days after
delivery to the Trustee, at its Principal Office, by 11:00 a.m., New York, New
York time, on a Business Day of a Purchase Demand. Delivery of a Purchase
Demand shall be irrevocable and shall bind the Owner or Beneficial Owner, as
the case may be, to tender his, her or its Bonds or Beneficial Ownership
Interests for purchase on the Optional Tender Date as provided in Section 305
hereof. The Purchase Demand shall (i) state the name and taxpayer
identification number of the Owner or Beneficial Owner, as the case may be,
(ii) identify the Bond(s) or portion(s) thereof which are to be purchased, or
the Beneficial Ownership Interests in which are to be purchased, by CUSIP
number, Bond number(s) and principal amount(s), (iii) state the Optional Tender
Date on

 26
 

which the purchase of such
Bond(s), or Beneficial Ownership Interest(s) (or portions thereof) is being
demanded, which must be a Business Day not less than seven days after receipt
by the Trustee, at or before 11:00 a.m., New York, New York time, on a Business
Day, of such Purchase Demand, (iv) acknowledge that such demand is irrevocable,
and (v) in the case of a Beneficial Owner, (a) be submitted to the Trustee
through a participant in the Depository, (b) be accompanied by evidence
satisfactory to the Trustee of such participant’s position in the Bonds at the
Depository and of such Beneficial Owner’s Beneficial Ownership Interest in the
Bonds, and (c) contain irrevocable authorization for such participant to
transfer the Beneficial Ownership Interest on the Optional Tender Date. The
determination by the Trustee as to whether a Purchase Demand has been properly
delivered pursuant to this Section 303 shall be conclusive and binding upon the
Owners or Beneficial Owners of the Bonds.

Section
304     Mandatory Tender of Bonds for
Purchase.  All Bonds or the
Beneficial Ownership Interests therein (other than Pledged Bonds) shall be
subject to mandatory tender for purchase in accordance with Section 305 hereof
on:

(a)
   prior to the Conversion Date, the first
Business Day of the month in which the Credit Facility Expiration Date is to
occur unless, at least 45 days prior to such first Business Day of the month,
the Borrower shall have caused to be delivered to the Trustee a Substitute
Credit Facility meeting the requirements of Section 1202 hereof or an amendment
to the Credit Facility extending the Credit Facility Expiration Date by at
least the lesser of one year or the period ending on the fifteenth day of the
month in which the Final Maturity Date is to occur;

(b)
   on the Business Day that the Credit
Facility Provider shall have delivered a certificate to the Trustee stating
that an “Event of Default” (as defined therein) has occurred under the Credit
Facility Reimbursement Agreement and demanding a mandatory tender for purchase
of all of the Outstanding Bonds;

(c)
   each Proposed Conversion Date;

(d)
   prior to the Conversion Date, two
Business Days prior to the effective date of any Substitute Credit Facility
(other than a Required Substitution); and

(e)
   each Reset Date.

The
Trustee shall give notice of each Mandatory Tender Date in the same manner as
notice of redemption of Bonds pursuant to Section 402 hereof. Such notice shall
(i) identify the Bonds by name, CUSIP number, date of issue and maturity date,
(ii) state the Mandatory Tender Date, (iii) state that all Bonds (or Beneficial
Ownership Interests, as the case may be) are subject to mandatory tender for
purchase at a purchase price equal to 100% of the principal amount thereof,
plus accrued interest to the Mandatory Tender Date, (iv) state that, if moneys
are available and on hand with the Trustee on the Mandatory Tender Date (or, if
the Mandatory Tender Date is not a Business Day, on the next succeeding
Business Day), all Bonds (or Beneficial Ownership Interests, as the case may
be) shall be deemed tendered, whether or not so tendered, and that on and after
the Mandatory Tender Date, the Owner (or

 27
 

Beneficial Owner) shall have
no further rights in such Bond other than the right to receive the purchase
price thereof upon presentation of such Bond to the Trustee on any Business Day
on or after the Mandatory Tender Date (or upon the transfer of such Beneficial
Ownership Interest as directed by the Trustee) and (v) in the case of a
mandatory tender of Bonds, state the place where Bonds may be presented for
purchase.

Section
305     Purchase of Tendered Bonds.
 All Bonds or Beneficial Ownership
Interests, as the case may be (other than Pledged Bonds), with respect to which
the Owners or Beneficial Owners, as the case may be, thereof have delivered
Purchase Demands pursuant to Section 303 shall be purchased on an Optional
Tender Date, and all Bonds or Beneficial Ownership Interests, as the case may
be (other than Pledged Bonds), shall be purchased on each Mandatory Tender Date
(or, if the Mandatory Tender Date is not a Business Day, on the next succeeding
Business Day), at a purchase price equal to 100% of the principal amount
thereof, plus accrued interest to the Tender Date (or, if the Tender Date is
not a Business Day, to the next succeeding Business Day), from moneys available
therefor in the Bond Purchase Account. Provided that Eligible Funds are available
to the Trustee to pay the purchase price thereof and as set forth in Section
306:

(a)
   in the case of the tender of Bonds:

(i)
         all Tendered Bonds shall be
deemed tendered, whether or not actually tendered, on the Tender Date;

(ii)
        interest accruing on the Tendered
Bonds on and after the Tender Date shall cease to be payable to the former
Owners of such Tendered Bonds, who shall have no further interest or rights in
such Bonds, except the right to receive payment of the purchase price thereof,
exclusively from moneys held by the Trustee for such purpose upon presentation
of such Bonds to the Trustee at its Principal Office on any Business Day on or
after the Tender Date; and

(iii)
       the Trustee shall authenticate and
deliver Bonds to the new Owners thereof as provided in Section 306 hereof; and

(b)
in the case of the tender of Beneficial Ownership Interests, the Beneficial
Owner shall be obligated to cause the transfer of such Beneficial Ownership
Interest on the records of the Depository, as directed by the Trustee.

Section
306     Bond Purchase Account.  There is hereby created by the Issuer and
ordered established with the Trustee a trust account to be designated with the
names of the Issuer and the Borrower and the label “Bond Purchase Account”.
There shall be deposited into the Bond Purchase Account, when and as received
by the Trustee (i) all funds received from the Remarketing Agent on a Tender
Date for the purchase of Tendered Bonds (or Beneficial Ownership Interests
therein) in accordance with Section 308 of this Indenture, (ii) all funds
received from the Credit Facility Provider pursuant to a draw made by the
Trustee under Section 1201(d) hereof; and (iii) any other funds deposited
therein by or on behalf of the Borrower if accompanied with a Preference
Opinion with respect thereto. No other funds shall

 28
 

be accepted by the Trustee
for deposit into the Bond Purchase Account. Notwithstanding the foregoing, any
funds received from the Remarketing Agent representing accrued interest on
Tendered Bonds (or Beneficial Ownership Interests therein) with respect to a
Reset Date that is not a Business Day shall be deposited to the Bond Fund and
used to pay or reimburse the Credit Facility Provider for the payment of the
interest on the Bonds on the next Interest Payment Date.

Funds
in the Bond Purchase Account shall be held in trust for the account of the
respective owners of such funds at the time of the deposit thereof into the
Bond Purchase Account until such funds are applied by the Trustee on the Tender
Date to pay the purchase price of Tendered Bonds or Beneficial Ownership
Interests. Such funds may be invested only in Government Obligations maturing
no later than the date(s) on which such funds are expected to be needed for the
purposes of the Bond Purchase Account.

Funds
for the payment of such purchase price shall be derived from the following
sources in the following order:

First.          first, from proceeds of the remarketing
of Bonds (or Beneficial Ownership Interests) by the Remarketing Agent as
described in Section 308 hereof;

Second.     second, from proceeds of a draw on the
Credit Facility pursuant to Section 1201(d) hereof; and

Third.         third, from any other funds in the Bond
Purchase Account.

Each Tendered Bond
delivered to the Trustee pursuant to Section 305 of this Indenture shall be
held in trust in the Bond Purchase Account for the account of such Owner until
the purchase price shall have been paid in full to the Owner of such Tendered
Bond. Upon payment in full of the purchase price of a Tendered Bond or Beneficial
Ownership Interest from the Bond Purchase Account, the Tendered Bond or
Beneficial Ownership Interest, as the case may be, shall (a) in the case of
Bonds purchased with proceeds of the remarketing thereof, be registered and
delivered by the Trustee as directed by the Remarketing Agent, (b) in the case
of Beneficial Ownership Interests purchased with the proceeds of the
remarketing thereof, be recorded on the records of the Depository as directed
by the Trustee pursuant to instructions from the Remarketing Agent, (c) in the
case of Bonds purchased with the proceeds of a draw on the Credit Facility, be
registered in the name of the Credit Facility Provider and held by the Trustee,
except as otherwise provided in the Credit Facility Reimbursement Agreement,
(d) in the case of Beneficial Ownership Interests purchased with the proceeds
of a draw on the Credit Facility, be recorded on the records of the Depository
as directed by the Trustee pursuant to instructions from the Credit Facility
Provider, (e) in the case of Bonds purchased with other funds in the Bond
Purchase Account, be registered and delivered by the Trustee as directed by the
Borrower and (f) in the case of Beneficial Ownership Interests purchased with
other funds in the Bond Purchase Account, be recorded on the records of the
Depository as directed by the Trustee pursuant to instructions of the Borrower.

 29

Section
307     Treatment of Untendered Bond
Certificates.  Untendered Bonds shall
cease to bear interest on the Tender Date if funds sufficient to pay the
purchase price or redemption price, as the case may be, of an Untendered Bond
(including any accrued and unpaid interest) shall be held by the Trustee in the
Bond Purchase Account. All liability of the Issuer to the Owner thereof for the
payment of such Untendered Bond shall forthwith cease, terminate and be
completely discharged, and thereupon it shall be the duty of the Trustee to
hold such funds in a separate segregated trust account, without liability for
interest thereon, for the benefit of the owner of such Untendered Bond who
shall thereafter be restricted exclusively to such account for any claim of whatever
nature on such person’s part under this Indenture or on or with respect to such
Bond. Such funds in such segregated trust account shall not be considered
Pledged Revenues, and such Untendered Bonds shall not be deemed to be
Outstanding under this Indenture.

After
any such funds have been held in such segregated trust account for four years,
the Trustee shall certify the amount thereof and the identifying numbers of the
particular Bonds whose Owners have a claim there against (which Owners shall
also be identified, if known) and deliver such certificate and such funds to
the Borrower. Thereafter such Owners shall have an unsecured claim against the
Borrower in respect of payment of such Untendered Bonds, and shall have no
further claim whatever against the Issuer or the Trustee in respect thereof.

Section
308     Remarketing of Tendered Bonds.
 Upon receipt of a Purchase Demand, the
Trustee shall notify the Remarketing Agent by telephone, promptly confirmed in
writing, or by facsimile, of the principal amount of Bonds or Beneficial
Ownership Interests to be purchased on the Optional Tender Date.

Upon
being notified by the Trustee of its receipt of a Purchase Demand, the
Remarketing Agent shall attempt to remarket the Bonds or Beneficial Ownership
Interests described in such Purchase Demand in accordance with this Section
308, and the Remarketing Agent shall attempt to remarket all Bonds on each
Mandatory Tender Date in accordance with this Section; provided, however, that
if the Borrower notifies the Remarketing Agent of a principal amount of
Tendered Bonds or Beneficial Ownership Interests which the Remarketing Agent
shall not remarket, then the Remarketing Agent shall not attempt to remarket
the principal amount of the Bonds or Beneficial Ownership Interests so
identified.

The
Remarketing Agent shall use its best efforts to solicit purchases of the
Tendered Bonds or Beneficial Ownership Interests at a price of par plus accrued
interest on each Tender Date (or, in the case of a Reset Date that is not a
Business Day, on the next succeeding Business Day); provided that the
Remarketing Agent shall not settle any remarketing of Bonds at the Adjusted
Interest Rate on a Proposed Conversion Date or any remarketing of Bonds on a
Reset Date unless all of the conditions set forth in Section 302(b)(vi) or
302(c)(vi), as the case may be, have been satisfied. The Remarketing Agent
shall pay the purchase price received by it (for any Tendered Bonds or
Beneficial Ownership Interests so remarketed) to the Trustee for deposit in the
Bond Purchase Account prior to 11:00 a.m., New York, New York time, on the
Tender Date. No funds so deposited shall

 30
 

have been furnished by the
Borrower or the Issuer or any person who is an insider to the Borrower or the
Issuer, respectively, within the meaning of the United States Bankruptcy Code.
Upon request of the Borrower or the Credit Facility Provider from time to time,
the Remarketing Agent shall advise the requesting party of the status of the
remarketing effort and the Trustee shall advise the requesting party of the
balance held by it in the Bond Purchase Account.

The
Remarketing Agent shall have the right to, but shall not be obligated to,
purchase Bonds or Beneficial Ownership Interests therein (including Pledged
Bonds) for its own account to the same extent as if it were not the Remarketing
Agent hereunder, and the purchase price paid by the Remarketing Agent for
Tendered Bonds or Beneficial Ownership Interests shall be considered proceeds
of the remarketing of such Tendered Bonds or Beneficial Ownership Interests, as
the case may be.

Section
309     Remarketing of Pledged Bonds.
 The Remarketing Agent shall continue to
use its best efforts to solicit purchases of Pledged Bonds at a price of par
plus accrued interest on any Business Day; provided that (i) no Pledged Bonds
shall be remarketed for any Reset Period unless the conditions set forth in
Section 302(c)(vi) have been satisfied, and (ii) if the Credit Facility
Provider notifies the Remarketing Agent of a principal amount of Pledged Bonds
which the Remarketing Agent shall not remarket, then the Remarketing Agent
shall not attempt to remarket the principal amount of Pledged Bonds so
identified. If the Remarketing Agent shall identify a purchaser for Pledged
Bonds, it shall notify the Borrower, the Trustee and the Credit Facility
Provider, and the Trustee shall establish a separate, segregated account (the “Pledged
Bond Account”) to be used only for the purchase of such Pledged Bonds. Upon the
deposit into the Pledged Bond Account of the amount, if any, required under the
Credit Facility Reimbursement Agreement to be paid to the Credit Facility
Provider, together with the proceeds of the remarketing, to cause the release
of the Pledged Bonds, the Remarketing Agent shall cause to be deposited into
the Pledged Bond Account any proceeds it receives from such remarketing.

On
the Business Day fixed for such remarketing, provided that funds sufficient for
the payment of the purchase price of the Pledged Bonds to be remarketed,
together with any additional amount required pursuant to the Credit Facility
Reimbursement Agreement for the release of the Pledged Bonds, are on deposit in
the Pledged Bond Account:

(a)
   the Trustee shall authenticate and
deliver Bonds to the new Owners thereof as directed by the Remarketing Agent or
the Beneficial Ownership Interest shall be transferred on the records of the
Depositary, as appropriate; provided that Pledged Bonds remarketed by the
Remarketing Agent shall not be delivered to the purchasers (i) until the Trustee
has received written notice from the Credit Facility Provider that the Credit
Facility has been reinstated in an amount equal to the purchase price paid by
the Trustee from Credit Facility proceeds (unless the Credit Facility provides
for automatic reinstatement upon such remarketing), and (ii) if a Bond (or
Beneficial Ownership Interest) has been a Pledged Bond for a period of 30 days
or more, unless the Trustee has been provided with an opinion of Bond Counsel
to the effect that the status of such

 31
 

Bond (or Beneficial
Ownership Interest) as a Pledged Bond has not adversely affected the exclusion
of interest on such Bond from gross income for federal tax purposes; and

(b)
   the monies held in the Pledged Bond
Account with respect to such Pledged Bonds shall be paid to the Credit Facility
Provider, to the extent required by the Credit Facility Reimbursement
Agreement, and thereafter to the order of the Borrower.

Section
310     Concerning the Remarketing
Agent.  The Remarketing Agent shall
be a member of the National Association of Securities Dealers, Inc. and
authorized by law to perform the functions of the Remarketing Agent as
described in this Indenture. The Trustee shall cooperate with the Remarketing
Agent in the performance of its duties. The Remarketing Agent may resign upon
not less than 60 days prior written notice to the Issuer, the Trustee, the
Credit Facility Provider, the Rating Agency and the Borrower and may be removed
by the Borrower upon not less than 60 days prior written notice to the Issuer, the
Trustee, the Rating Agency, the Credit Facility Provider and the Remarketing
Agent. In case the Remarketing Agent shall resign or be removed, the Borrower
shall appoint a successor Remarketing Agent meeting the requirements of this
Section 310. The successor Remarketing Agent shall evidence its acceptance of
its duties hereunder by a writing delivered to the Trustee and the Credit
Facility Provider. If the current Remarketing Agent’s resignation is effective
prior to the appointment of a successor, the Trustee shall assume the duties
thereof until a successor is appointed.

The
Remarketing Agent’s duty to remarket Tendered Bonds (or Beneficial Ownership
Interests) and Pledged Bonds pursuant to this Indenture (unless it shall agree
otherwise in writing) shall be a “best efforts” undertaking on its part and
shall not obligate it to purchase Bonds (or Beneficial Ownership Interests) for
its own account or to advance funds for the account of any of its customers or
prospective purchasers of Bonds (or Beneficial Ownership Interests). The
Borrower shall, at its expense, furnish the Remarketing Agent with a prospectus
meeting the requirements of applicable state and federal securities laws as a
condition precedent to the institution by the Borrower of the remarketing
described in Sections 308 and 309. The Remarketing Agent’s compensation for
remarketing shall be fixed by agreement between the Borrower and the
Remarketing Agent within the range of customary charges by investment bankers
for similar services and shall be paid by the Borrower.

ARTICLE IV

REDEMPTION OF BONDS PRIOR TO MATURITY

Section
401     Limitation of Redemptions Prior
to Maturity.  No Bond may be called
for redemption prior to its stated maturity except as provided in this Article
IV; provided, however, that nothing herein shall be deemed to limit the right
of acceleration of Bond maturities upon the occurrence of an Event of Default.

 32
 

Section
402     Notice and Effect of Redemption.
 The Trustee shall give notice of the
call for any redemption of Bonds prior to maturity by mailing a copy of the
redemption notice by first class mail not less than 30 nor more than 60 days
prior to the redemption date to the Owner of each Bond to be redeemed at the
address shown on the Bond Register; provided, however, that failure to give any
such notice as aforesaid or any defect therein with respect to any particular
Bond shall not affect the validity of any proceedings for the redemption of any
other Bond. A copy of all notices of redemption shall also be sent to the Rating
Agency when sent to owners of Bonds, provided that any failure to provide such
notice shall not affect the validity of any redemption.

In
the case of optional redemption under Sections 404 or 405 of this Indenture,
the required notice of redemption shall not be given until the Trustee has
received (i) the written consent of the Credit Facility Provider, and (ii) in
the case of redemption at a premium which is not provided for by the Credit
Facility, Eligible Funds in an amount necessary to pay when due the premium, if
any, on the Bonds to be redeemed.

Each
redemption notice shall (a) identify the Bonds to be redeemed by name, CUSIP
number, date of issue, interest rate and maturity date and, if only a portion
of the Bonds are to be redeemed, the certificate numbers and the respective
principal amounts to be redeemed, (b) identify the redemption date, (c) state
the redemption price, (d) state that interest on the Bonds or the portions
thereof called for redemption will (unless such Bonds are purchased in lieu of
redemption pursuant to Section 1205 hereof) cease to accrue from and after the
redemption date if funds sufficient for their redemption and available for the
purpose are on deposit with the Trustee on the redemption date, and (e) state
that payment for the Bonds will be made on the redemption date at the principal
trust office of the Trustee during normal business hours upon the surrender of
the Bonds to be redeemed.

Notice
of redemption having been given as aforesaid, the Bonds so called for redemption,
together with the premium, if any and accrued interest thereon, shall become
due and payable on the redemption date. If pursuant to this Indenture the
Trustee shall hold Eligible Funds which are available and sufficient in amount
to pay the principal of and premium, if any, on the Bonds or portions thereof
thus called for redemption and to pay the interest thereon to the redemption
date, such Bonds or portions thereof shall (unless such Bonds are purchased in
lieu of redemption pursuant to Section 1205 hereof) cease to bear interest from
and after said redemption date; provided that funds available for the payment
of the redemption premium payable pursuant to Section 406 hereof need not be
Eligible Funds.

Section
403     Selection of Bonds for
Redemption; Manner of Effecting Partial Redemptions of Particular Bonds.  If less than all Bonds are to be redeemed
pursuant to the provisions of Section 404 hereof, the particular Bonds or
portions thereof to be redeemed shall be selected by the Trustee in the inverse
order of their stated maturities and within a stated maturity by lot or by such
other random means as the Trustee shall determine in its discretion; provided,
however, that Pledged Bonds shall be redeemed first and until all of the
Pledged Bonds have been redeemed, no other Bonds shall be redeemed. Any such
means of selecting

 33
 

Bonds for redemption shall
provide for the possibility of partial redemption of any Bond of a denomination
greater than the smallest Authorized Denomination.

Particular
Bonds may be redeemed only in multiples of the smallest Authorized Denomination
(hereinafter called a “Unit”). In the case of Bonds of denominations greater
than a Unit, each Unit shall be treated as though it were a separate Bond in
the denomination of a Unit. If it is determined that one or more, but not all
of the Units of principal amount represented by any such Bond is to be called
for redemption, then upon notice of redemption of such Unit or Units, the Owner
of such Bond shall present and surrender the same to the Trustee (i) for the
payment of the redemption price (including the redemption premium, if any, and
interest to the date fixed for redemption) in respect of the Unit or Units
called for redemption and (ii) in exchange for a new Bond in the aggregate principal
amount of the unredeemed balance of the principal amount not called for
redemption. New Bonds representing the unredeemed balance of the principal
amount of such Bond shall be issued to the registered Owner thereof without
charge therefor. If the Owner of any such Bond shall fail to present such Bond
to the Trustee for payment and exchange as aforesaid, such Bond shall
nevertheless become due and payable on the date fixed for redemption to the
extent of the Unit or Units of principal amount called for redemption (and to
that extent only), and (subject to Section 402 hereof) interest shall cease to
accrue on the portion of the principal amount of such Bond represented by such
Unit or Units from and after the date fixed for redemption.

Section
404     Optional Redemption of Bonds at
Election of the Borrower.  Upon
prepayment of the Promissory Note in accordance with Section 5.03 of the Loan
Agreement, and with the consent of the Credit Facility Provider, the Bonds are
subject to redemption pursuant to this Section 404:

(a)    on or prior to the Conversion Date, in whole
or in part (in multiples of $5,000 in excess of $100,000) on any Business Day,
at a redemption price of 100% of the principal amount of Bonds so redeemed,
plus accrued interest to the redemption date, and without premium; and

(b)    during any Reset Period, in whole on any
date or in part (in multiples of $5,000) on any regularly scheduled Interest
Payment Date which is (1) on or after the third anniversary of the Conversion
Date or the Reset Date, as the case may be, if the length of the Reset Period
is at least five years, but less than seven years, (2) on or after the fourth
anniversary of the Conversion Date or the Reset Date, if the length of the
Reset Period is seven years or more. The redemption price for any such
redemption shall be the amount determined from the applicable table below
(expressed as a percentage of the principal amount of the Bonds or portions
thereof so redeemed), plus accrued interest to the redemption date:

 34
 

If the Reset Period is at
least five years, but less than seven years:

	
  Redemption Period 

  (by reference to Annual Anniversaries

  of Conversion Date or Reset Date)

  	
   

  	
   

  	
   

  
	
  On or After

  	
   

  	
  But Prior To

  	
   

  	
  Redemption Price

  	
   

  
	
  Third Anniversary

  	
   

  	
  Fourth Anniversary

  	
   

  	
  101

  	
  %

  
	
  Fourth Anniversary

  	
   

  	
   

  	
   

  	
  100

  	
   

  

 

If the Reset Period is at
least seven years:

	
  Redemption Period

  (by reference to Annual Anniversaries

  of Conversion Date or Reset Date)

  	
   

  	
   

  	
   

  
	
  On or After

  	
   

  	
  But Prior To

  	
   

  	
  Redemption Price

  	
   

  
	
  Fourth Anniversary

  	
   

  	
  Fifth Anniversary

  	
   

  	
  102

  	
  %

  
	
  Fifth Anniversary

  	
   

  	
  Sixth Anniversary

  	
   

  	
  101

  	
   

  
	
  Sixth Anniversary

  	
   

  	
   

  	
   

  	
  100

  	
   

  

 

If
the length of the Reset Period is less than five years, the Bonds shall not be
subject to redemption pursuant to this Section 404 during such Reset Period.

(c)
on any Proposed Conversion Date or Reset Date, in whole or in part (in
multiples of $5,000), at a redemption price of 100% of the principal amount of
the Bonds so redeemed, plus accrued interest to the redemption date, and
without premium.

The
Trustee shall give notice of the call for redemption pursuant to this Section
404 in the manner provided in Section 402 of this Indenture.

Section
405     Optional Redemption of Bonds
Upon Occurrence of Certain Extraordinary Events.  The Bonds shall be subject to redemption, in
whole but not in part, on any Business Day, if within 120 days after the
occurrence of any of the following events, the Borrower shall, with the consent
of the Credit Facility Provider, elect to prepay the Promissory Note pursuant
to Section 5.01 of the Loan Agreement:

(a)    The Plant Complex shall have been damaged or
destroyed to such extent that, in the opinion of the Borrower expressed in a
Borrower’s Certificate filed with the Issuer, the Trustee and the Credit
Facility Provider following such damage or destruction (i) it is not
practicable or desirable to rebuild, repair or restore the Plant Complex within
a period of six consecutive months following such damage or destruction, or
(ii) the Borrower is or will be thereby prevented from carrying on its normal
operations at the Plant Complex for a period of at least six consecutive
months;

 35
 

(b)    Title to or the temporary use of all or
substantially all of the Plant Complex shall have been taken under the exercise
of the power of eminent domain by any governmental authority to such extent
that, in the opinion of the Borrower expressed in a Borrower’s Certificate
filed with the Issuer, the Trustee and the Credit Facility Provider, the
Borrower is or will be thereby prevented from carrying on its normal operations
at the Plant Complex for a period of at least six consecutive months;

(c)    Any court or administrative body of
competent jurisdiction shall enter a judgment, order or decree requiring the
Borrower to cease all or any substantial part of its operations at the Plant
Complex to such extent that, in the opinion of the Borrower expressed in a
Borrower’s Certificate filed with the Issuer, the Trustee and the Credit
Facility Provider, the Borrower is or will be thereby prevented from carrying
on its normal operations at the Plant Complex for a period of at least six
consecutive months; or

(d)    As a result of any changes in the
Constitution of Wisconsin or the Constitution of the United States of America
or of legislative or administrative action (whether state or federal) or by
final decree, judgment or order of any court or administrative body (whether
state or federal), the Loan Agreement shall have become void or unenforceable
or impossible of performance in accordance with the intent and purposes of the
parties as expressed in the Loan Agreement, or unreasonable burdens or
excessive liabilities shall have been imposed on the Issuer or the Borrower as
a consequence of having the Bonds or the Promissory Note Outstanding, including
without limitation federal, state or other ad valorem, property, income or
other taxes not being imposed on the date of the Loan Agreement.

The
redemption price shall be 100% of the principal amount of Bonds so redeemed,
plus accrued interest to the redemption date, and without premium. The Trustee
shall give notice of a call for redemption pursuant to this Section 405 in the
manner provided in Section 402 of this Indenture.

Section
406     Mandatory Redemption of Bonds
Upon Determination of Taxability or Expiration of Credit Facility.  (a) The Bonds shall be subject to mandatory
redemption in whole on the earliest practicable Business Day (selected by the
Trustee) for which the Trustee can give timely notice pursuant to Section 402
hereof, but in any event within 60 days following a Determination of
Taxability. The redemption price shall be 100% of the principal amount of Bonds
so redeemed, plus accrued interest to the redemption date.

(b)    During any Reset Period where the Borrower elected
in its Conversion Notice or Reset Notice to have a Credit Facility in effect
for the Reset Period relating to such notice and during which the Credit
Facility Expiration Date is to occur, the Bonds shall be subject to mandatory
redemption in whole on the first day of the month in which the Credit Facility
Expiration Date is to occur unless, at least 45 days prior to such first day of
the month, the Borrower shall have caused to be delivered to the

 36
 

Trustee a Substitute Credit
Facility meeting the requirements of Section 1202 hereof or an amendment to the
Credit Facility extending the Credit Facility Expiration Date by at least the
lesser of one year or the period ending on the fifteenth day of the month in
which the next Reset Date or the Final Maturity Date is to occur. The
redemption price shall be 100% of the principal amount of the Bonds to be so
redeemed, plus accrued interest to the redemption date. Redemption of Bonds as
aforesaid shall be the Bondholders’ sole remedy upon the Borrower not obtaining
an extension of the expiration of the existing Credit Facility or a Substitute
Credit Facility.

(c)    The Trustee shall give notice of a call for
redemption pursuant to this Section 406 in the manner provided in Section 402
of this Indenture.

Section
407     Mandatory Redemption of Bonds
Relating to Debt Service Reserve Fund.  If the Borrower, in any Conversion Notice or
Reset Notice gives notice to the Issuer, the Trustee and the Remarketing Agent
that the Debt Service Reserve Fund will not be necessary for such Reset Period,
the Trustee shall liquidate such Debt Service Reserve Fund and utilize the
proceeds to redeem the principal amount of Bonds closest in principal amount to
the proceeds of such Debt Service Reserve Fund to be tendered for purchase on such
Reset Date or Conversion Date and the Trustee shall cancel such Bonds thereby
permanently reducing the principal amount of Bonds Outstanding accordingly. Due
to such redemption occurring only on a Mandatory Tender Date, the Trustee need
not give any notice of such redemption in advance but shall, upon such
redemption, give notice thereof do the Borrower and the Remarketing Agent.

ARTICLE V

REPRESENTATIONS AND COVENANTS OF ISSUER

Section
501     Payment of Principal and
Interest.  The Issuer covenants that it
will promptly pay the principal of, premium, if any, and interest on each Bond
issued under this Indenture at the place, on the date and in the manner
provided in said Bond according to the true intent and meaning thereof. The
principal of, premium, if any, and interest on the Bonds are payable solely
from the Pledged Revenues, and nothing in the Bonds or this Indenture shall be
considered as pledging any other funds or assets of the Issuer.

Section
502     Performance of Covenants:
Authority.  The Issuer covenants that
it will faithfully perform each and every undertaking, covenant, stipulation
and provision contained in this Indenture and in each and every Bond executed,
authenticated and delivered hereunder. The Issuer represents that it is duly
authorized under the Constitution and laws of the State of Wisconsin to issue
the Bonds, to execute this Indenture and the Loan Agreement and to pledge the
revenues described and pledged herein. The Issuer represents further that all
action on its part for the issuance of the Bonds and the execution and delivery
of this Indenture and the Loan Agreement has been duly and effectively taken,
and that the Bonds in the hands

 37
 

of the Owners thereof are
and will be valid and enforceable obligations of the Issuer according to the
tenor and import thereof.

Section
503     Instruments of Further
Assurance.  The Issuer covenants that
it will do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, such Supplemental Indentures and such further acts,
instruments and transfers as the Trustee may reasonably require for the better
assuring, pledging, assigning and confirming unto the Trustee all and singular
the Trust Estate and the revenues pledged hereby to the payment of the
principal of, premium, if any, and interest on the Bonds.

Section
504     Inspection of Books.  The Issuer and the Trustee each covenant and
agree that all books and documents in their possession relating to the Bonds
and the Pledged Revenues shall at all times be open to inspection by such
accountants or other agents as the Trustee, the Borrower or the Issuer may from
time to time designate.

Section
505     Rights Under Loan Agreement and
Other Documents.  The Issuer
covenants and agrees that except as provided herein and in the Loan Agreement
it will not sell, assign, pledge, transfer, encumber or otherwise dispose of
the Pledged Revenues. The Loan Agreement, a duly executed counterpart of which
has been filed with the Trustee, sets forth covenants and obligations of the
Issuer and Borrower, including provisions that subsequent to the issuance of
the Bonds and prior to their payment in full or provision for payment thereof
in accordance with the provisions hereof, the Loan Agreement shall not be
effectively amended, changed, modified, altered or terminated (other than as
provided therein) without the concurring written consent of the Trustee and the
Credit Facility Provider. The Issuer agrees that the Trustee in its own name
may enforce all rights of the Issuer and all obligations of the Borrower under
and pursuant to the Loan Agreement (other than the Unassigned Rights) and the
Promissory Note for and on behalf of the Bondowners whether or not the Issuer
is in default hereunder, but the Trustee shall not thereby be deemed to have assumed
the obligations of the Issuer under the Loan Agreement or the Promissory Note
and shall have no obligations thereunder except as expressly provided herein or
therein. The Issuer hereby agrees to cooperate fully with the Trustee (at the
expense of the Borrower) in any proceedings or to join in or commence in its
own name any proceedings necessary to enforce the rights of the Issuer and all
obligations of the Borrower under and pursuant to the Loan Agreement and the
Promissory Note, if the Trustee shall so request.

Section
506     Tax-Exempt Status of Bonds.
 The Issuer covenants that it will take
no action which would adversely affect the exclusion of interest on the Bonds
from gross income under Section 142 of the Internal Revenue Code.

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ARTICLE VI

CUSTODY AND APPLICATION OF PROCEEDS OF BONDS

Section
601     Application of Proceeds of
Bonds.  The Trustee shall deposit the
Bond proceeds received by it for the account of the Issuer from the original
sale of the Bonds as follows:

(a)
   An amount equal to the Cost of Issuance
Deposit Amount shall be deposited into the Cost of Issuance Fund;

(b)
   An amount equal to the Initial Debt
Service Reserve Deposit shall be deposited in the Debt Service Reserve Fund or
deposited with the Credit Facility Provider as set forth in Section 605 hereof,
and

(c)
   The balance shall be deposited into the
Construction Fund;

Section
602     Cost of Issuance Fund.  There is hereby created by the Issuer and
ordered established with the Trustee a Trust Fund to be designated with the
names of the Issuer and the Borrower and the label “Cost of Issuance Fund.” The
Trustee shall deposit into the Cost of Issuance Fund, when and as received, the
amount specified in Section 601(a) hereof.

The
Trustee is hereby authorized and directed to disburse moneys from the Cost of
Issuance Fund to pay (or reimburse the Borrower for) the Bond Issuance Costs
(as defined in the definition of “Eligible Costs of the Project” in Section
1.01 of the Loan Agreement). Except as otherwise provided below, such
disbursements shall be made only upon requisition of the Borrower meeting the
requirements of and submitted in accordance with Section 3.02 of the Loan
Agreement.

If
there shall be any balance in the Cost of Issuance Fund remaining after the
earlier of (i) the date which is 90 days after the date of issuance of the
Bonds or (ii) the Trustee’s receipt of a certification by the Borrower’s
Representative that all Bond Issuance Costs have been paid, the Trustee shall
transfer such remaining balance to the Construction Fund or, if the
Construction Fund has been closed pursuant to Section 3.06 of the Loan
Agreement, to the Surplus Construction Fund.

Section
603     Construction Fund.  There is hereby created by the Issuer and
ordered established with the Trustee a Trust Fund to be designated with the
names of the Issuer and the Borrower and the label “Construction Fund”. The
Trustee shall deposit into the Construction Fund, when and as received:

(a)
   the amount specified in Section 601(c)
hereof;

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(b)
   any additional moneys which the
Borrower may deliver to the Trustee from time to time with the instruction that
such moneys be deposited into the Construction Fund; and

(c)
   Moneys required to be deposited into
the Construction Fund under the terms of a Supplemental Indenture.

The
Trustee is hereby authorized and directed to disburse moneys from the
Construction Fund to pay (or reimburse the Borrower for) the Engineering Costs,
the Basic Project Costs, the Capitalized Interest Costs and the Other Costs of
the Project (as defined in the definition of “Eligible Costs of the Project” in
Section 1.01 of the Loan Agreement). Except as otherwise provided below, such
disbursements shall be made only upon requisition of the Borrower meeting the
requirements of and submitted in accordance with Section 3.03 of the Loan
Agreement. In addition, and subject to the Maximum Debt Service Reserve Amount
and the requirements of the Loan Agreement, an amount of up to $500,000 from
the Construction Fund may be transferred to the Debt Service Reserve Fund (regardless
of whether it is held by the Trustee or the Credit Facility Provider).

Upon
the closing of the Construction Fund in accordance with Section 3.06 of the
Loan Agreement, any remaining balance in the Construction Fund shall be
transferred to the Surplus Construction Fund.

Section
604     Surplus Construction Fund.  There is hereby created by the Issuer and
ordered established with the Trustee a Trust Fund to be designated with the
names of the Issuer and the Borrower and the label “Surplus Construction Fund”.

The
Trustee shall deposit into the Surplus Construction Fund, when and as received:

(a)
   Moneys remaining in the Construction
Fund after it has been closed in accordance with Section 3.06 of the Loan
Agreement;

(b)
   Moneys required to be transferred from
the Costs of Issuance Fund pursuant to Section 602 hereof;

(c)
   Moneys required to be deposited into
the Surplus Construction Fund under the terms of a Supplemental Indenture; and

(d)
   Moneys transferred to the Trustee from
the Credit Facility Provider.

The
Trustee is hereby authorized and directed to use the moneys in the Surplus
Construction Fund (upon transfer to the Redemption Fund) to call Bonds for
redemption pursuant to Section 404 of this Indenture. Such redemption shall be
in the largest amount possible and at the earliest possible call date or dates
given the call provisions of the Bonds as specified in Section 404 of this
Indenture.

 40

Notwithstanding
the foregoing, during periods in which the Bonds are callable only in an amount
in excess of available moneys in the Surplus Construction Fund, or during
periods in which the Bonds are callable but a call premium or penalty is
required for such early redemption, the Trustee shall not transfer Surplus
Construction Fund moneys to the Redemption Fund unless directed to do so by the
Borrower in a Borrower’s Certificate.

Until
used for one or more of the foregoing purposes, any moneys in the Surplus
Construction Fund shall be invested in Qualified Investments but may not be
invested to provide a yield on such moneys (computed from the Completion Date
and taking into account any investment of such moneys during the period from
the Completion Date to the date of deposit of such moneys into the Surplus
Construction Fund) greater than the yield on the Bonds from the proceeds of
which such moneys were derived, all as such terms are defined and used in
Section 148 of the Internal Revenue Code and any proposed, temporary or final
regulations promulgated thereunder; provided that such yield restriction on the
Surplus Construction Fund shall not apply if the Trustee is furnished with an
opinion of Bond Counsel to the effect that the lack of a yield restriction on
the Surplus Construction Fund and the use of such monies will not result in an
Event of Taxability.

Section
605     Debt Service Reserve Fund.

The
Trustee shall create a special separate trust fund to be known and designated
as the Debt Service Reserve Fund (CityForest Corporation) (the “Debt Service
Reserve Fund”).

If
the Debt Service Reserve Fund is not held by the Credit Facility Provider,
moneys on deposit in the Debt Service Reserve Fund shall be transferred to the
Credit Facility Reimbursement Account of the Bond Fund upon written notice to
the Trustee from the Credit Facility Provider of a Borrower failure to repay a
draw on the Credit Facility in an amount set forth in such notice, provided,
that such notice must contain a covenant from the Credit Facility Provider that
any such amounts paid to it from the Debt Service Reserve Fund will only be
used to pay unreimbursed draws on the Credit Facility and will not be used to
pay any fees, interest or other amounts owed to the Credit Facility Provider by
the Borrower or be shared with any other persons or entities, provided further
that if no Credit Facility shall be in effect, money on deposit in the Debt
Service Reserve Fund shall be transferred to the Bond Fund on an Interest
Payment Date to make up any deficiency in such Bond Fund. Upon receipt from the
Credit Facility Provider of the notice relating to an unreimbursed draw on the
Credit Facility, and the transfer of funds to the Credit Facility Reimbursement
Account from the Debt Service Reserve Fund, the Trustee within one Business Day
thereafter shall give the Borrower written notice of the amount so transferred
which shall cause a deficiency in the Debt Service Reserve Fund equal to such
amount.

Moneys
on deposit in the Debt Service Reserve Fund shall be invested in Qualified
Investments which shall be valued by the Trustee (or, if relevant, the Credit
Facility Provider) on each March 1 and September 1 (which valuation shall take
into account any accrued and unpaid interest and shall be based on the
assumption that such investment shall be

 41
 

held to maturity). If, at
the time of such valuation, the balance in the Debt Service Reserve Fund is
less than the Debt Service Reserve Fund Requirement, the Trustee (or, if
relevant, the Credit Facility Provider) shall give notice to the Borrower of
the aggregate amount necessary to cause the balance in the Debt Service Reserve
Fund to meet the Debt Service Reserve Fund Requirement. If upon any such
valuation the balance in the Debt Service Reserve Fund is in excess of the Debt
Service Reserve Fund Requirement, such excess shall be transferred to the Bond
Fund, if no Credit Facility is in existence and, if in existence to the Credit
Facility Reimbursement Account if the Credit Facility Provider does not hold
the Debt Service Reserve Fund, or reimburse the Credit Facility Provider for
the next draw or draws on the Credit Facility if the Debt Service Reserve Fund
is held by the Credit Facility Provider.

For
so long as the Debt Service Reserve Fund is held by the Credit Facility
Provider, all obligations of the Trustee with respect thereto and contained
herein, shall be obligations of the Credit Facility Provider and not of the
Trustee (including any rebate obligation determination with respect thereto).
In order for the Credit Facility Provider to hold the Debt Service Reserve
Fund, it shall execute and deliver to the Trustee and the Borrower an agreement
wherein it shall unconditionally agree to maintain the Debt Service Reserve
Fund as a separate account, to adhere to the requirements of the Trustee set
forth in this Indenture with respect to the Debt Service Reserve Fund and to
adhere to the requirements set forth in the Nonarbitrage Certificate relating
to records relating to the Bonds (with respect to maintenance of records for
the Debt Service Reserve Fund). In addition, the Credit Facility Provider will
agree that any amounts in the Debt Service Reserve Fund will be used
exclusively to reimburse the Credit Facility Provider for unreimbursed draws on
the Credit Facility, or to pay principal and interest on the Bonds and will not
be used to pay any fees or expenses of the Credit Facility Provider. In
addition, the Credit Facility Provider will agree that it shall deposit to the
Trustee any rebate liability relating to the Debt Service Reserve Fund from
investment proceeds of the Debt Service Reserve Fund for deposit in the Rebate
Account when such fund is held by the Credit Facility Provider.

ARTICLE VII

REVENUES AND FUNDS

Section
701     Source of Payment.  The principal of, premium, if any, and
interest on the Bonds shall be payable by the Issuer solely from the Pledged
Revenues.

Section
702     Pledged Revenues.  The Pledged Revenues are hereby specifically,
irrevocably and exclusively pledged to the punctual payment of the principal
of, premium, if any, and interest on the Bonds, and shall be used for no other
purpose except as otherwise expressly authorized in this Indenture.

Section
703     Bond Fund.  There is hereby created by the Issuer and
ordered established with the Trustee a Trust Fund to be designated with the
names of the Issuer and the Borrower and the label “Bond Fund”. Within the Bond
Fund there are hereby created and

 42
 

ordered established and the
Trustee shall maintain two separate accounts to be designated the “Credit
Facility Account” and the “Borrower’s Payments Account”.

The
Trustee shall deposit into the Bond Fund, when and as received:

(a)
   All payments received under the Credit
Facility other than (i) payments received pursuant to a draw under Section 1201(d)
and (ii) payments received for the purchase of Bonds pursuant to Section 1205;

(b)
   All payments from or for the account of
the Borrower on the Promissory Note (except prepayments of principal and the
premium, if any, thereon required to be deposited into the Redemption Fund) or
pursuant to Section 7.02 of the Loan Agreement;

(c)
   Moneys required to be transferred to
the Bond Fund from other Trust Funds (including, if applicable, the Debt
Service Reserve Fund) or from Pledged Revenues in accordance with this
Indenture;

(d)
   Proceeds from the remarketing of
Tendered Bonds or Beneficial Ownership Interests with respect to a Reset Date
that is not a Business Day, to the extent such proceeds represent accrued
interest on such Tendered Bonds; and

(e)
   Moneys required to be deposited into
the Bond Fund pursuant to the terms of a Supplemental Indenture.

All
payments received under the Credit Facility shall be deposited into the Credit
Facility Account. All other moneys received by the Trustee for the account of the
Bond Fund shall be deposited into the Borrower’s Payments Account. The Trustee
shall not commingle moneys in the Credit Facility Account with moneys in the
Borrower’s Payment Account.

All
moneys in the Bond Fund shall be used solely for the payment of interest on the
Bonds and for the payment of principal of the Bonds when due (whether at
maturity, by acceleration or call for redemption or otherwise). The Trustee
shall pay principal of and interest on the Bonds from the following sources and
in the following priority:

First, from the Credit Facility Account (provided
that no Pledged Bonds shall be paid from the Credit Facility Account);

Second, from Eligible Funds on deposit in the
Borrower’s Payments Account; and

Third, from remaining moneys in the Bond Fund, but
only to the extent that the foregoing two sources are not likely to be
available and sufficient therefor.

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Notwithstanding
the foregoing, any monies in the Bond Fund representing proceeds of the
remarketing of Tendered Bonds or Beneficial Ownership Interests and which are
not applied as described above shall be paid to the Credit Facility Provider to
reimburse it for the payment of interest on the Bonds no later than the first
Business Day following the deposit of such monies.

Section
704     Redemption Fund.  There is hereby created by the Issuer and
ordered established with the Trustee a Trust Fund to be designated with names
of the Issuer and the Borrower and the label “Redemption Fund”.

The
Trustee shall deposit into the Redemption Fund, when and as received:

(a)
   All prepayments of principal by the
Borrower on the Promissory Note, together with the premium, if any, thereon;

(b)
   Moneys required to be transferred to
the Redemption Fund from other Trust Funds in accordance with this Indenture;
and

(c)
   Moneys required to be deposited into
the Redemption Fund pursuant to the terms of a Supplemental Indenture.

The
Issuer hereby authorizes and directs the Trustee to (i) transfer Eligible Funds
from the Redemption Fund to the Bond Fund when and as required to pay, or
reimburse the Credit Facility for the payment of, the principal of any Bonds
called for redemption in accordance with this Indenture; (ii) withdraw funds
from the Redemption Fund to pay, or reimburse the Credit Facility Provider for
the payment of, any premiums payable on Bonds called for redemption in
accordance with this Indenture; and (iii) transfer Eligible Funds from the
Redemption Fund to the Bond Fund to pay, or reimburse the Credit Facility
Provider for the payment of, the final payment of principal on the Bonds at the
last maturity thereof. Except to the extent moneys in the Redemption Fund are
needed for the purposes described in the foregoing clauses (i) and (ii), the
Trustee is authorized to use Eligible Funds in the Redemption Fund in
accordance with Section 306 for the purchase of Bonds for cancellation;
provided that such purchases shall be made only to the extent authorized by the
Borrower in a Borrower’s Certificate; and provided further that the purchase
price for any Bond so purchased shall not exceed the principal amount thereof
plus any accrued and unpaid interest thereon.

Section
705     Trust Funds Held in Trust.  All Trust Funds shall be held in trust in the
custody of the Trustee, subject to the provisions of this Indenture which
permit disbursements from the Trust Funds. All moneys and securities held in
Trust Funds shall be subject to the first lien of this Indenture thereon and
shall not be subject to lien, attachment, garnishment or other claims or
proceedings by other creditors of the Borrower or the Issuer.

Section
706     Credit Facility Reimbursement
Account.

The
Trustee shall create a Credit Facility Reimbursement Account into which it
shall deposit (if the Debt Service Reserve Fund is not held by the Credit
Facility Provider)

 44
 

amounts pursuant to Section
605 hereof and from which it shall pay to the Credit Facility Provider amounts
in accordance with Section 605 hereof deposited in connection with a Borrower
failure to reimburse the Credit Facility Provider for a draw on the Credit
Facility. Other funds deposited in the Credit Facility Reimbursement Account
may be used at any time to reimburse the Credit Facility Provider for draws on
the Credit Facility upon a written request to the Trustee signed by the
Borrower and the Credit Facility Provider accompanied by covenants described in
Section 605 hereof.

ARTICLE VIII

INVESTMENTS

Section
801     Permitted Investment of Trust
Funds.  Moneys held in the Trust
Funds shall be separately invested and reinvested by the Trustee in accordance
with this Article VIII and Section 9.03 of the Loan Agreement. Each investment
shall be held by or under the control of the Trustee and shall be deemed at all
times to be part of the particular Trust Fund in which such moneys were held.
Income and profit from any such investment shall be credited to the Trust Fund
for whose account the investment was made. Any net loss realized and resulting
from any such investment shall be charged to the particular Trust Fund for
whose account the investment was made.

All
such investments and reinvestments shall be made in Qualified Investments
having a maturity not later than the estimated time when the moneys so invested
will be needed for the purposes of the Trust Fund of which they are a part.
Moneys in the Bond Fund shall be invested only in Government Obligations.

The
Trustee may make and execute any such investment through its own bond
department, money center or other investment operation or through the bond
department, money center or investment operation of any affiliated bank.

Section
802     Arbitrage.  The Issuer covenants that it will take no
action to permit any investment or other use of the proceeds of the Bonds which
would cause any Bond to be classified as an “arbitrage bond” within the meaning
of Section 148 the Internal Revenue Code or any proposed, temporary or final
regulations issued thereunder.

In
the event the Issuer or the Borrower is of the opinion (supported by an opinion
of Bond Counsel) that it is necessary or advisable to restrict or limit the
yield on the investment of any moneys held in any Trust Fund in order to avoid
the Bonds being considered “arbitrage bonds” within the meaning aforesaid, the
Issuer may (and shall if so requested by the Borrower) issue to the Trustee a
written certificate to such effect together with appropriate written
instructions, in which event the Trustee shall take such action as is necessary
so to restrict or limit the yield on such investment in accordance with such
certificate and instructions, irrespective of whether the Trustee shares such
opinion.

 45
 

Section
803     Rebate of Certain Arbitrage
Profits.  To the extent required by
law, the Trustee shall take the following actions to provide for payment to the
United States Treasury pursuant to Section 148(f) of the Internal Revenue Code
and any proposed, temporary or final regulations promulgated thereunder:

(a)
   Either the Trustee or an agent employed
by the Trustee shall make a determination, on the fifth anniversary of the date
of original issuance of the Bonds, and upon the final payment of the Bonds, of
the amount required to be paid to the United States Treasury. If an agent is
employed, the Trustee may pay its reasonable compensation which shall be an
expense of the administration of this Indenture reimbursable by the Borrower
under the Loan Agreement.

(b)
   An amount equal to the amount to be
paid shall be paid by the Borrower to the Trustee pursuant to Section 7.06(c)
of the Loan Agreement or by the Credit Facility Provider pursuant to Section
6.05 hereof and deposited by the Trustee into a special account established
with the Trustee and designated with the names of the Issuer and the Borrower
and the label “Rebate Account”, which shall be held for the sole benefit of the
United States Treasury and shall not be or be deemed to be a Trust Fund.

(c)
   The Trustee shall make payment to the
United States Treasury from the Rebate Account on the dates and in the manner
required by law, as indicated by an opinion of Bond Counsel or otherwise
determined by the Trustee.

(d)
   The Trustee shall take any additional
action required to be taken pursuant to the nonarbitrage certificate delivered
by the Issuer in connection with the issuance and sale of the Bonds as directed
by the Borrower.

(e)
   The Trustee shall keep records of the
determinations made under clause (a) above, on behalf of the Issuer, until six
years after the final payment of the Bonds.

ARTICLE IX

DISCHARGE

Section
901     Discharge.  If the Issuer shall pay or cause to be paid
the principal, premium, if any, and interest due or to become due on the Bonds
at the times and in the manner stipulated therein, and if the Issuer shall not
then be in default in any of the covenants and promises in the Bonds and in
this Indenture expressed as to be kept, performed and observed by it or on its
part, and shall pay or cause to be paid to the Trustee all sums of money due or
to become due according to the provisions hereof, then these presents and the
estate and rights hereby granted shall cease, terminate and be void, whereupon
the Trustee shall cancel and discharge the lien of this Indenture and execute
and deliver to the Issuer such instruments in writing as shall be requisite to
cancel and discharge the lien hereof, and recovery, release, assign and deliver
unto the Issuer any and all the estate, right, title and interest in and to any
and all property conveyed, assigned or pledged to the Trustee or

 46
 

otherwise subject to the
lien of this Indenture, except moneys or securities held by the Trustee in
separate segregated trust accounts pursuant to Sections 213 and 307 hereof for
the payment of the principal of, premium, if any, and interest on unpresented
Bonds or the purchase of Untendered Bonds.

A
Bond shall be deemed to be paid within the meaning of this Article when payment
of the principal of and premium, if any, on such Bond, plus interest thereon to
the due date thereof (whether such due date be by reason of maturity or upon
redemption as provided in this Indenture, or otherwise) either (A) shall have
been made in accordance with the terms of this Indenture, or (B) shall have
been provided for by irrevocably depositing with the Trustee, in trust and
irrevocably set aside exclusively for such payment, (i) moneys sufficient to
make such payment or (ii) Government Obligations not redeemable at the option
of the issuer or anyone acting on its behalf, maturing as to principal and
interest in such amounts and at such times as will provide sufficient moneys to
make such payment, and all necessary and proper fees and expenses of the Trustee
pertaining to the Bond with respect to which such deposit is made. At such time
as a Bond shall be deemed to be paid hereunder as aforesaid, it shall no longer
be deemed to be Outstanding hereunder and shall no longer be secured by or
entitled to the benefits of this Indenture, except for the purposes of any such
payment from such moneys or Government Obligations.

Notwithstanding
the foregoing, no deposit under clause (B) of the immediately preceding
paragraph shall be deemed a payment of such Bonds as aforesaid until:

(a)
   The deposit shall have been made under
the terms of an escrow trust agreement in form and substance satisfactory to
the Trustee consistent herewith, which shall identify the Bonds covered
thereby;

(b)
   In the case of an escrow trust deposit
with respect to Bonds subject to redemption prior to maturity at the option of
the Borrower, the Borrower shall have delivered a Borrower’s Certificate
designating when such Bonds are to be paid or redeemed under the terms of such
escrow trust agreement;

(c)
   In the case of Bonds which are subject
to mandatory redemption or which are subject to mandatory or optional tender
for purchase, the Trustee shall have been furnished with evidence satisfactory
to it that a redemption or tender for purchase of such Bonds in accordance with
their terms in advance of stated maturity will not create a deficiency in the
escrow;

(d)
   In case of Bonds which are to be
redeemed prior to maturity from such escrow trust deposit, a redemption notice
meeting the requirements of Section 402 hereof and stating that such Bonds are
being redeemed from a deposit made pursuant to this Article either (i) shall
have been given, or (ii) shall have been provided for by delivery to the
Trustee of irrevocable instructions for the giving of such notice;

(e)
   The Trustee shall have been furnished
with an opinion of Bond Counsel to the effect that the payment of the Bonds in
accordance with said escrow trust

 47
 

agreement will not adversely
affect the exclusion of interest on the Bonds from gross income of the owners
thereof and will not cause the Bonds to be classified as “arbitrage bonds”
under Section 148 of the Internal Revenue Code;

(f)
    The Trustee shall have been furnished
with a Preference Opinion in respect of the moneys so deposited; and

(g)
   The Trustee shall have given notice of
such deposit to the Owner of each such Bond at the address shown on the Bond
Register.

Notwithstanding
any provision of any other Article of this Indenture which may be contrary to
the provisions of this Article, all moneys or Government Obligations set aside
and held in trust pursuant to the provisions of this Article for the payment of
Bonds (including interest and premium thereon, if any) shall be applied to and
used solely for the payment of the particular Bonds (including interest and
premium thereon, if any) with respect to which such moneys and Government
Obligations have been so set aside in trust.

Anything
in Article VIII hereof to the contrary notwithstanding, if moneys or Government
Obligations have been deposited or set aside with the Trustee pursuant to this
Article for the payment of Bonds and the interest and premium, if any, thereon
and such Bonds and the interest and premium, if any, thereon shall not have in
fact been actually paid in full, no amendment to the provisions of this Article
shall be made without the consent of the Owner of each of the Bonds affected
thereby.

ARTICLE X

DEFAULT PROVISIONS

AND REMEDIES OF TRUSTEE AND BONDOWNERS

Section
1001   Defaults; Events of Default.
 If any of the following events occur, it
is hereby defined as and declared to be and to constitute an “Event of Default”:

(a)
   Default in the due and punctual payment
of the principal or purchase price of, premium, if any, or interest on any Bond
whether at the stated maturity thereof, on a Tender Date, or upon proceedings
for redemption (or purchase in lieu of redemption) thereof, or upon the
maturity thereof by acceleration or otherwise; or

(b)
   The acceleration of the maturity of the
Promissory Note pursuant to the terms of Section 10.02 of the Loan Agreement;
or

(c)
   Default in the performance or
observance of any of the covenants, agreements or conditions on the part of the
Issuer in this Indenture or in the Bonds contained and the continuance thereof
for a period of 60 days after written notice given to the Issuer by the Trustee
or to the Trustee and the Issuer by the Owners of not less than 25% in
aggregate principal amount of Bonds then Outstanding; or

 48
 

(d)    The Credit Facility Provider admits its
insolvency or becomes unable to pay its debts as they mature or a receiver is
appointed for the Credit Facility Provider; or the Credit Facility Provider
defaults in the payment when due of any amounts due under the Credit Facility;
or the Credit Facility ceases to remain in full force and effect and, in any
such event, the Borrower fails to deliver to the Trustee, within 45 days of
receipt of notice of such event, a Substitute Credit Facility issued by another
financial institution; or

(e)    The Credit Facility Provider delivers a
certificate to the Trustee (i) stating that an “event of default” (as defined
therein) has occurred under the Credit Facility Reimbursement Agreement and
demanding an acceleration of the Bonds or (ii) stating that the amount of a
drawing under the Credit Facility in respect of interest on the Bonds will not
be reinstated.

 49
 

Section 1002   Acceleration.  Upon the occurrence of an Event of Default set
forth in Section 1001(c), the Trustee shall upon the written request of the
Credit Facility Provider, or if no Credit Facility shall be securing the Bonds,
the Owners of not less than 25% in aggregate principal amount of Bonds then
Outstanding, by notice in writing delivered to the Issuer, the Credit Facility
Provider, the Rating Agency and the Borrower, 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 and shall cease to accrue.

Upon the occurrence of an
Event of Default set forth in Sections 1001(b), (d) or (e), or upon the
continuance for two Business Days of the Event of Default set forth in Section
1001(a), the Trustee shall, by notice in writing delivered to the Issuer, the
Credit Facility Provider and the Borrower, declare the principal of all Bonds
then Outstanding and the accrued interest thereon immediately due and payable,
and such principal and interest shall thereupon become and be immediately due
and payable and shall cease to accrue.

Upon the occurrence of an
Event of Default set forth in Section 1001(a), and without regard to the
continuance thereof, the Trustee may, and upon the written request of the
Owners of not less than 25% in aggregate principal amount of Bonds then
Outstanding shall, by notice in writing delivered to the Issuer, the Credit
Facility Provider and the Borrower, declare the principal of all Bonds then
outstanding and the accrued interest thereon immediately due and payable, and
such principal and interest shall thereupon become and be immediately due and
payable and shall cease to accrue.

Upon the acceleration of
the maturities of the Bonds, the Trustee shall forthwith demand payment from
the Credit Facility Provider for the payment under the Credit Facility pursuant
to the terms thereof in an amount sufficient to pay the principal of and
interest on the Bonds (other than Pledged Bonds) to the expected payment date.

Section 1003   Remedies.  Upon the occurrence of an Event of Default,
the Trustee, with the written consent of the Credit Facility Provider (if such
Event of Default is not caused by an event or events described in Section
1001(a) or Section 1001(d) hereof), may, in addition to acceleration as
provided in Section 1002, pursue any available remedy by action at law or suit
in equity to enforce the payment of the principal of, premium, if any, and
interest on the Bonds or on the Promissory Note.

The Trustee, as
beneficiary of the Credit Facility, shall enforce such of its rights thereunder
as it shall deem necessary or appropriate. The Trustee, as an assignee of
rights and interests of the Issuer in and to the Loan Agreement shall, with the
prior written consent of the Credit Facility Provider, enforce such of its
rights and the rights of the Issuer thereunder as it shall deem necessary or
appropriate. In exercising such rights and the rights given the Trustee under
this Article X, the Trustee shall take such action as, in the judgment of the
Trustee applying the standards described in Section 1101 hereof, would best serve
the interests of the Bondowners.

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If an Event of Default
shall have occurred, and if requested so to do by the Credit Facility Provider
or the Owners of at least 25%  in
aggregate principal amount of Bonds then Outstanding (if no Credit Facility
shall be in effect or if such Event of Default is caused by an event or events
described in Section 1001(a) or Section 1001(d) hereof) and if indemnified as
provided in subsection (1) of Section 1101 hereof, the Trustee shall be obliged
to exercise such one or more of the rights and powers conferred by this Article
as the Trustee, being advised by counsel, shall deem most expedient in the
interest of the Bondowners.

No remedy by the terms of
this Indenture conferred upon or reserved to the Trustee (or to the Bondowners)
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 Bondowners 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 and as often as may be deemed
expedient.

No waiver of any default
or Event of Default hereunder, whether by the Trustee pursuant to the
provisions of Section 1010 hereof or by the Bondowners, shall extend to or
shall affect any subsequent default or event of default or shall impair any
rights or remedies consequent thereon.

 51

Section 1004   Right of Bondowners to Direct Proceedings.
 Anything in this Indenture to the
contrary notwithstanding, the Owners of a majority in aggregate principal
amount of Bonds then Outstanding shall have the right, at any time, by an
instrument or instruments in writing executed and delivered to the Trustee, to
direct the time, method and place of conducting all proceedings to be taken in
connection with the enforcement of the terms and conditions of this Indenture,
or for the appointment of a receiver or any other proceedings hereunder;
provided, that such direction shall not be otherwise than in accordance with
the provisions of law and of this Indenture (including, where applicable, the
consent of the Credit Facility Provider).

Section 1005   Waiver of Certain Rights.  Upon the occurrence of an Event of Default, to
the extent that such rights may then lawfully be waived, neither the Issuer nor
anyone claiming through it or under it, shall set up, claim or seek to take
advantage of any moratorium, stay, extension or redemption laws now or
hereafter in force to prevent or hinder the enforcement of this Indenture, but
the Issuer for itself and all who may claim through or under it hereby waives,
to the extent that it lawfully may do so, the benefit of all such laws to which
it may be entitled by law.

Section 1006   Application of Moneys.  All moneys received by the Trustee pursuant to
any right given or action taken under the provisions of this Article shall,
after payment of the cost and expenses of the proceedings resulting in the
collection of such moneys and of the expenses, liabilities and advances
incurred or made by the Trustee (provided that no such costs or expenses may be
taken or paid from Credit Facility proceeds), be deposited into the Bond Fund
and all moneys held or deposited in the Bond Fund during the continuance of an
Event of Default shall be applied, in the order of priority set forth in
Section 703 of this Indenture, as follows (provided that no Pledged Bonds shall
be paid from Credit Facility proceeds):

(a)    Unless the principal of all the Bonds has
become or shall have been declared due and payable, all such moneys shall be
applied:

First:          To the payment to the persons entitled
thereto of all installments of interest then due on the Bonds, in the order of
the maturity of the installments of such interest including interest (to the
extent permitted by law) on overdue installments of interest at the same
rate(s) per annum as borne by such Bonds on the date such interest became due,
and, if the amount available shall not be sufficient to pay in full any
particular installment, then to the payment ratably, according to the amounts
due on such installment, to the persons entitled thereto without any
discrimination or privilege; and

Second:     To the payment to the persons entitled
thereto of the unpaid principal of any of the Bonds which shall have become due
(other than Bonds called for redemption for the payment of which moneys are
held pursuant to the provisions of this

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Indenture), in the order
of their due dates, with interest (to the extent permitted by law) on such
Bonds from the respective dates upon which they became due at the same rate(s)
per annum as borne by such Bonds on the date such principal became due and, if
the amount available shall not be sufficient to pay in full Bonds due on any
particular date, together with such interest, then to the payment ratably,
according to the amount of principal, with interest (to the extent permitted by
law) on such principal from the respective dates on which such principal became
due, due on such date, to the persons entitled thereto without any
discrimination or privilege.

Third:         To the payment to the persons entitled
thereto of the unpaid premium, if any, on any of the Bonds which have been called
for redemption, in the order of the redemption dates, with interest (to the
extent permitted by law) on such premiums from the respective dates on which
such premiums became due, and, if the amount available shall not be sufficient
to pay in full the premiums due on any particular redemption date, together
with such interest, then to the payment ratably, according to the premium due
on such date, to the persons entitled thereto without any discrimination or
privilege.

(b)    If the principal of all the Bonds shall have
become due or shall have been declared due and payable, all such moneys shall
be applied first to the payment of the principal and interest then due and
unpaid upon all of the Bonds, without preference or priority of principal over
interest or of interest over principal, or of any installment of interest, or
of any Bond over any other Bond, ratably, according to the amounts due
respectively for principal and interest, to the persons entitled thereto
without any discrimination or privilege, and secondly to the payment of the
premium, if any, then due, ratably to the persons entitled thereto without any
discrimination or privilege.

(c)    If the principal of all the Bonds shall have
been declared due and payable, and if such declaration shall thereafter have
been rescinded and annulled under the provisions of this Article, then, subject
to the provisions of paragraph (b) of this Section in the event that the
principal of all the Bonds shall later become due or be declared due and
payable, the moneys shall be applied in accordance with the provisions of
paragraph (a) of this Section.

Whenever moneys are to be
applied pursuant to the provisions of this Section, such moneys shall be
applied at such times from time to time as the Trustee shall determine, having
due regard to the amount of such moneys available for application and the
likelihood of additional moneys becoming available for such application in the
future. Whenever the Trustee shall apply such funds, it shall fix the date
(which shall be a regularly scheduled Interest Payment Date unless it shall
deem another date more suitable or unless the Credit Facility requires an
earlier payment date) upon which such application is to be made and upon such
date interest on the amounts of principal to be paid on such dates shall cease
to accrue. The Trustee shall give such notice as it may deem appropriate of the
deposit with it of such moneys and of the fixing of such date and shall not be
required to make payment to the Owner of any unpaid Bond until such Bond shall
be presented to the Trustee for appropriate endorsement or for cancellation if
fully paid. The foregoing in this paragraph notwithstanding,

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upon any Event of Default and draw on the Credit
Facility relating thereto, the Trustee shall immediately pay the principal and
accrued interest on the Bonds and upon such acceleration interest shall cease
to accrue on the Bonds.

Whenever all of the Bonds
and interest thereon have been paid under the provisions of this Section 1006
and all fees, charges and expenses of the Trustee and any paying agents and all
other amounts required to be paid hereunder have been paid, any balance
remaining in the Bond Fund shall be paid to the Credit Facility Provider to the
extent of any amounts due it pursuant to the Credit Facility Reimbursement
Agreement, and thereafter to the Borrower.

Section 1007   Remedies Vested in Trustee.  All rights of action (including the right to
file proof of claims) under this Indenture or under any of the Bonds may be
enforced by the Trustee without the possession of any of the Bonds or the
production thereof in any trial or other proceedings relating thereto and any
such suit or proceeding instituted by the Trustee shall be brought in its name
as Trustee without the necessity of joining as plaintiffs or defendants any
Owners of the Bonds, and any recovery of judgment shall, subject to the
provisions of Section 1006 hereof, be for the equal and ratable benefit of the
Owners of the Outstanding Bonds.

Section 1008   Rights and Remedies of Bondowners.  No Owner of any Bond shall have any right to
institute any suit, action or proceeding in equity or at law for the
enforcement of this Indenture or for the execution of any trust thereof or for
the appointment of a receiver or any other remedy hereunder, unless: (i) a
default has occurred of which the Trustee has been notified as provided in
subsection (h) of Section 1101, or of which by said subsection it is deemed to
have notice, (ii) such default shall have become an Event of Default and the Owners
of at least 25%  in aggregate principal amount of
Bonds then Outstanding shall have made written request to the Trustee and shall
have offered it reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such action, suit or proceeding in its own
name, (iii) such Owners shall have offered to the Trustee indemnity as provided
in Section 1101, and (iv) the Trustee shall thereafter have failed or refused
to exercise the powers hereinbefore granted, or to institute such action, suit
or proceeding in its own name; and such notification, request and offer of
indemnity are hereby declared in every case at the option of the Trustee to be
conditions precedent to the execution of the powers and trust of this
Indenture, and to any action or cause of action for the enforcement of this
Indenture, or for the appointment of a receiver or for any other remedy
hereunder; it being understood and intended that no one or more Owners of the
Bonds shall have any right in any manner whatsoever to affect, disturb or
prejudice the security of this Indenture by its, his, her 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 benefit of the Owners of all Bonds
then Outstanding. Nothing in this Indenture contained shall, however, affect or
impair the right of any Owner of Bonds to enforce the payment of the principal
of and interest on any Bond at and after the stated maturity thereof, or the
obligation of the Issuer to pay the principal of, premium, if any, and

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interest on each of the Bonds issued hereunder to the
respective Owners of the Bonds at the time and place, from the source and in
the manner herein and in said Bonds expressed.

Section 1009   Termination of Proceedings.  In case the Trustee shall have proceeded to
enforce any right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely, then and in every such case the Issuer, the Borrower and the Trustee
shall be restored to their former positions and rights hereunder and all
rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.

Section 1010   Waivers of Events of Default.  The Trustee shall waive any Event of Default
hereunder and its consequences and rescind any declaration of maturity of
principal of and interest on the Bonds upon the written request of the Owners
of a majority in aggregate principal amount of all of the Bonds then
Outstanding; provided, however, that the Event of Default set forth in Section
1001(e) may be waived only with the written consent of the Credit Facility
Provider and upon the rescission of the notice delivered pursuant to Section
1001(e) and the reinstatement of funds available under the Credit Facility; and
provided further that there shall not be waived without the consent of the
Owners of all the Bonds Outstanding (i) any Event of Default in the payment of
the principal or purchase price of any Outstanding Bonds at the date of
maturity specified therein or at the date fixed for the redemption or purchase
thereof, or (ii) any Event of Default in the payment when due of the interest
on any such Bonds unless, prior to such waiver or rescission, all arrears of
interest, with interest (to the extent permitted by law) on overdue
installments of interest at the same rate(s) per annum as borne by such Bonds,
or all arrears of payments of principal, with interest (to the extent permitted
by law) on overdue principal at the same rate(s) per annum as borne by such
Bonds, as the case may be, and all expenses of the Trustee in connection with
such default shall have been paid or provided for; and in case of any such
waiver or rescission, or in case any proceeding taken by the Trustee on account
of any such default shall have been discontinued or abandoned or determined
adversely, then and in every such case the Issuer, the Trustee and the
Bondowners shall be restored to their former positions and rights hereunder
respectively, but no such waiver or rescission shall extend to any subsequent
or other default, or impair any right consequent thereon.

Section 1011   Opportunity to Cure Defaults by Issuer.
 With regard to any alleged default by
the Issuer hereunder, the Issuer hereby names and appoints the Borrower and the
Credit Facility Provider or either of them as its attorney-in-fact and agent
with full authority to perform any covenant or obligation any failure in the
performance of which is alleged to constitute a default by the Issuer, in the
name and stead of the Issuer with full power to do any and all things and acts
with power of substitution.

Section 1012   Certain Notices to Borrower.  In the event that the Trustee fails to receive
when due any payment of principal or interest by the Borrower on the Promissory
Note, the Trustee shall immediately give written notice thereof by registered
or certified mail, postage prepaid, or by messenger to the Borrower specifying
such failure. Such notice,

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however, shall not be a condition precedent to the
exercise of any remedy hereunder, and failure to give such notice shall not
preclude such default from being an Event of Default.

ARTICLE
XI

THE
TRUSTEE

Section 1101   Acceptance of Trusts.  The Trustee hereby accepts the trusts imposed
upon it by this Indenture, and agrees to perform said trusts, but only upon and
subject to the following express terms and conditions, and no implied covenants
or obligations shall be read into this Indenture against the Trustee:

(a)    The Trustee, prior to the occurrence of any
Event of Default and after the curing 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) 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 reasonable and prudent person would
exercise or use under the circumstances in the conduct of personal affairs.

(b)    The Trustee may execute any of the trusts or
powers hereof and perform any of its duties by or through attorneys, agents or
employees but shall be answerable for the conduct of the same in accordance
with the standard specified above, and shall be entitled to act upon the
opinion or advice of its counsel concerning all matters of trust hereof and the
duties hereunder, and may in all cases pay such reasonable compensation to all
such attorneys, agents and employees as may reasonably be employed in
connection with the trust hereof. The Trustee may act upon an opinion of
Independent Counsel and shall not be responsible for any loss or damage
resulting from any action by it taken or omitted to be taken in good faith in
reliance upon such opinion of Independent Counsel.

(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 validity of the execution by the
Issuer of this Indenture or of any supplements hereto or for the sufficiency of
the security for the Bonds issued hereunder or intended to be secured hereby,
and the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the
part of the Issuer or on the part of the Borrower in connection with the Loan
Agreement, except as hereinafter set forth; and the Trustee shall not be
responsible or liable for any loss suffered in connection with any investment
of funds made by it in accordance with Article VIII hereof.

(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 Trustee. The Trustee

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may in good faith buy, sell, own and deal in any of
the Bonds and may join in any action which any Bondowner may be entitled to
take with like effect as if the Trustee were not a party to this Indenture.

(e)    The Trustee shall be protected in acting upon
any notice, request, consent, certificate, order, affidavit, letter, telegram,
telex, telecopy 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 Bonds issued in
exchange therefor or in place thereof.

(f)     As to the existence or nonexistence 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 on
behalf of the Issuer by the Chief Municipal Official or such other person as
may be designated for such purpose by resolution of the Issuer’s Governing
Body, and attested by the Clerk or such other person as may be designated for
such purpose by resolution of the Issuer’s Governing Body, 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, or of which by said subsection it is deemed to have notice, shall
also be at liberty to accept and rely upon 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 Clerk under the Issuer’s seal, if any, to the
effect that a resolution in the form therein set forth has been adopted by the
Issuer’s Governing Body as conclusive evidence that such resolution has been
duly adopted, and is in full force and effect. The resolutions, orders,
opinions, certificates and other instruments provided for in this Indenture may
be accepted by the Trustee as conclusive evidence of the facts and conclusions
stated therein and shall be full warrant protection and authority to the Trustee
for the withdrawal of cash and the taking or omitting of any other action
hereunder.

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

(h)    The Trustee shall not be presumed to have
knowledge of any default or Event of Default hereunder except (i) the failure
to pay the principal or purchase price of, premium, if any, and interest on the
Bonds or the Promissory Note, or (ii) the failure of the Credit Facility
Provider to honor a demand made by the Trustee under the Credit Facility,
unless the Trustee shall be specifically notified in writing of such default by
the Borrower, the Issuer, the Credit Facility Provider or the Owners of at
least 10% in aggregate principal amount of Bonds then Outstanding.

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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, but shall not be required, to inspect all
books, papers and records of the Issuer pertaining to 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 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 deemed 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.

(1)    Before taking any action under Articles X or
XI of this Indenture, other than acceleration of the Bonds and presentation of
a draft to the Credit Facility Provider pursuant to the Credit Facility, and
making payments with respect to the Bonds when due, the Trustee may require
that satisfactory indemnity be furnished to it 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
Alternate Paying Agent shall, until used or applied or invested as herein
provided, be held in trust in the manner and for the purposes for which they
were received but need not be segregated from other funds except to the extent
required by this Indenture or law. Neither the Trustee nor any Alternate Paying
Agent shall be under any liability for interest on any moneys received hereunder
except such as may be agreed upon.

(n)    While the Bonds are in Book Entry Form, the
Trustee shall comply with the representations and undertakings set forth in the
Letter of Representations.

(o)    The Trustee shall comply with the provisions
of the Continuing Disclosure Agreement.

Section 1102   Specific Duty of Trustee to File
Continuation Statements.  The Trustee
shall periodically file Uniform Commercial Code continuation statements as
required to maintain and continue the perfection of any security interests
granted by the Issuer as debtor to the Trustee as secured party hereunder.

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Section 1103   Notice to Bondowners if Default Occurs.
 If a default occurs of which the Trustee
has, or is by subsection (h) of Section 1101 hereof presumed to have, knowledge,
then the Trustee shall give written notice thereof by first-class mail to the
Owners of all Bonds then Outstanding.

Section 1104   Intervention by Trustee.  In any judicial proceedings 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 Owners of the Bonds, the Trustee may
intervene on behalf of Bondowners and shall do so if requested in writing by
the Owners of at least 25% in aggregate principal amount of all Bonds then
Outstanding, provided that the Trustee shall first have been offered such
reasonable indemnity against such liability as it may incur in or by reason of
such proceedings. The rights and obligations of the Trustee under this Section
are subject to the approval of a court of competent jurisdiction.

Section 1105   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 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 a successor Trustee hereunder and under
the Continuing Disclosure Agreement, and vested with all of the title to the
whole property or 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 1106   Resignation by Trustee.  The Trustee and any successor Trustee may at
any time resign from the trusts hereby created by giving 30 days’ prior written
notice to the Issuer, the Borrower and the Credit Facility Provider, and by
first-class mail to each Owner of Bonds. Such resignation shall take effect,
however, only upon the appointment of a successor Trustee (or a temporary
Trustee as provided in Section 1108 hereof) by the Bondowners or by the
Borrower and the acceptance of such appointment and the transfer of the Credit
Facility to the successor Trustee.

Section 1107   Removal of Trustee.  The Trustee may be removed at any time, by an
instrument or concurrent instruments in writing delivered to the Trustee and to
the Issuer, and signed by the Borrower or Owners of a majority in aggregate
principal amount of Bonds then Outstanding. If notice of removal is provided by
the Borrower, the Trustee shall mail by first-class mail notice thereof to the
Owners of the Bonds. Such removal shall take effect, however, only upon the
appointment of a successor Trustee (or a temporary Trustee as provided in
Section 1108 hereof) by the Bondowners or by the Borrower and the acceptance of
such appointment and the transfer of the Credit Facility to the successor
Trustee.

Section 1108   Appointment of Successor Trustee by
Bondowners; Temporary 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

 59
 

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
may be appointed, with the prior written consent of the Credit Facility
Provider, by either the Borrower or the Owners of a majority in aggregate
principal amount of Bonds then Outstanding by an instrument or concurrent instruments
in writing signed by such Owners, or by their attorneys-in-fact, duly
authorized; provided, nevertheless, that in case of such vacancy the Issuer by
an instrument executed and signed by the Chief Municipal Official and attested
by the Clerk under its seal shall appoint a temporary Trustee to fill such
vacancy until a successor Trustee shall be appointed by the Bondowners and
consented to by the Credit Facility Provider in the manner above provided; and
any such temporary Trustee so appointed by the Issuer shall immediately and
without further act be superseded by the Trustee so appointed by such
Bondowners. If no successor Trustee has been appointed within 60 days from the
mailing of notice of resignation by the Trustee under Section 1106, or from the
date the Trustee is removed or becomes incapable of acting hereunder, the
Trustee or any Bondowner may petition a court of competent jurisdiction to
appoint a successor Trustee. Every such Trustee appointed pursuant to the
provisions of this Section shall be a trust company or bank organized and in
good standing under the laws of the United States of America or any state of
the United States of America having the power and any authority to assume the
duties and trusts hereby created and having a reported capital, surplus and
undivided profits of not less than $10,000,000 if there be such an institution
willing, qualified and able to accept the trust upon reasonable or customary
terms.

 60

Section 1109   Concerning Any Successor Trustee.  Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to its predecessor and also to the
Issuer and the Borrower an instrument in writing accepting such appointment
hereunder and under the Continuing Disclosure Agreement, and thereupon such
successor, without any further act, deed or conveyance, shall become fully
vested with all of the properties, rights, powers, trusts, duties and
obligations of its predecessor; but such predecessor shall nevertheless, on the
written request of its successor, or of the Issuer, execute and deliver an
instrument transferring to such successor Trustee all the properties, rights,
powers, and trusts of such predecessor hereunder and under the Continuing
Disclosure Agreement and the Credit Facility; and every predecessor Trustee
shall deliver the Credit Facility and 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 properties, 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.

Section 1110   Appointment of Co-Trustee.  At any time or times, for the purposes of
conforming to any legal requirements, restrictions or conditions in any State,
or if the Trustee shall be advised by Independent Counsel that it is necessary
or advisable in the interest of the Bondowners so to do, the Issuer and the
Trustee shall have power to appoint (and upon the request of the Trustee, the
Issuer shall for such purpose join with the Trustee in the execution, delivery
and recording of all instruments and agreements necessary or proper to appoint)
another corporation or one or more persons, approved by the Trustee, either to
act as separate Trustee or Trustees or Co-Trustees of all or any of the trust
estate jointly with the Trustee hereunder.

Every separate Trustee or
Co-Trustee (other than the Trustee initially acting as Trustee hereunder,
hereinafter in this Section called the “Initial Trustee”, and any Trustee which
may be appointed as successor to it) shall, to the extent permitted by law, be
appointed subject to the following provisions and conditions, namely:

(a)    The Bonds secured hereby shall be
authenticated and delivered, and all powers, duties, obligations and rights,
conferred upon the Trustee in respect of the custody of all funds and any
securities pledged hereunder, shall be exercised solely by the Initial Trustee
or its successors in trust hereunder;

(b)    No power shall be exercised hereunder by such
separate Trustee or Co-Trustee except with the consent in writing of the
Initial Trustee or its successors in the trust hereunder;

(c)    The Issuer and the Initial Trustee or its
successors in the trust hereunder, at any time by an instrument in writing
executed by them jointly, may accept the resignation or remove any separate
Trustee or Co-Trustee appointed under this Section,

 61
 

and may likewise and in like manner appoint a
successor to such separate Trustee or Co-Trustee who shall be so removed or who
shall have resigned as provided in Section 1106 hereof, anything herein
contained to the contrary notwithstanding; and

(d)    No Trustee or Co-Trustee hereunder shall be
personally liable by reason of any act or omission of any other Trustee or
Co-Trustee hereunder.

Any notice, request or
other writing, by or on behalf of the Owners of the Bonds issued hereunder,
delivered solely to the Initial Trustee, or its successors in trust, shall be
deemed to have been delivered to all of the then Trustees and Co-Trustees as
effectually as if delivered to each of them. Every instrument appointing any
Trustee or Co-Trustee other than a successor to the Initial Trustee shall refer
to this Indenture and the conditions in this Section expressed, and upon the
acceptance in writing by such Trustee or Co-Trustee, he, she, they or it shall
be vested with the rights, powers, estate and/or property specified in such
instrument either jointly with the Initial Trustee, or its successor, or
separately, as may be provided therein, subject to all the trusts, conditions
and provisions of this Indenture; and every such instrument shall be filed with
the Initial Trustee or its successors in the trust. Any separate Trustee or
Co-Trustee may at any time by an instrument in writing constitute the Initial
Trustee or its successors in the trusts hereunder, his, her, their or its agent
or attorney-in-fact, with full power and authority, to the extent which may be
authorized by law, to do all acts and things and exercise all discretion
authorized or permitted by him, her, them or it, for and in behalf of him, her,
them or it, and in his, her, their or its name. Any Co-Trustee may, as to any
action hereunder, whether discretionary or otherwise, act by attorney-in-fact.
In case any separate Trustee or Co-Trustee, or a successor to any of them,
shall die, become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of said separate
Trustee or Co-Trustee, so far as permitted by law, shall vest in and be
exercised by the Initial Trustee or its successors in trust until the
appointment of a successor to such separate Trustee or Co-Trustee.

Section 1111   Acquisition of Conflicting Interests by
Trustee.  If the Trustee has or shall
acquire any conflicting interest, the Trustee shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate the same
or resign by giving notice in accordance with Section 1106 hereof to the
Issuer, the Borrower and Bondowners within such period; provided that such
resignation shall become effective upon the appointment of a successor Trustee
and such successor’s acceptance of such appointment, and the Issuer and the
Trustee agree to take prompt steps to have a successor appointed in the manner
herein provided.

The Trustee shall be
deemed to have a conflicting interest hereunder if, while the Bonds are not
secured by a Credit Facility, it has a “conflicting interest” within the
meaning of Section 310(b)(i) to (ix), inclusive, of the Trust Indenture Act of
1939, as amended, except that the Trustee shall not be deemed to have a
conflicting interest solely by reason of its having for itself or as a banker
become a purchaser, seller or pledgee of Bonds, it being understood that the
Trustee may so deal with Bonds with the same rights that it would have if it
were not Trustee and without liability or accountability to the Issuer or
Owners of

 62
 

Bonds on account thereof. Also, it may act as
depositary for any purpose for any committee formed to protect the rights of
Bondowners or effect or aid in any reorganization growing out of or involving
the enforcement of the Bonds or this Indenture whether or not any such
committee shall represent the Owners of a majority in aggregate principal
amount of the Bonds Outstanding hereunder.

In the event that the
Trustee shall fail to comply with the provisions of this Section, the Trustee
shall within 10 days after the expiration of such 90-day period, transmit
notice of such failure to the Bondowners.

Any Bondowner who has
been a bona fide Owner of a Bond or Bonds for at least six months may, on
behalf of himself, herself or itself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor, if the Trustee fails, after written request therefor
by such Owner, to comply with the provisions of this Section.

Section 1112   Requirement of a Corporate Trustee.  There shall at all times be one or more
Trustees hereunder. One of the Trustees hereunder shall at all times be a
corporate Trustee, and the corporate Trustee and any successor to the corporate
Trustee, appointed as hereinbefore provided, shall be a corporation organized
and doing business under the laws of the United States of America or any State
or territory thereof, or of the District of Columbia, and shall be authorized
under such laws to exercise corporate trust powers and be subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority and have a combined capital, surplus and undivided profits
of not less than the $10,000,000; provided, however, that the preceding
combined capital, surplus and undivided profits test shall not apply to the
initial Trustee under this Indenture. If such corporate Trustee publishes
reports of its condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority hereinbefore referred
to, then for the purposes of this Section, the combined capital, surplus and
undivided profits of the corporate Trustee shall be deemed its combined
capital, surplus and undivided profits as the same is set forth in such
corporate Trustee’s most recent report of condition so published.

Section 1113   Trustee’s Fees.  The Borrower has agreed in the Loan Agreement
to pay certain fees and expenses of the Trustee for acting as Trustee
hereunder. The Trustee shall not be entitled to any payment from the Issuer for
fees or expenses of the Trustee, except to the extent payable from Pledged
Revenues. During the continuance of an Event of Default, the Trustee shall have
a first lien on Pledged Revenues (other than proceeds of the Credit Facility
and moneys in the Bond Purchase Account and the segregated trust accounts held
by the Trustee pursuant to Sections 213, 307 or 309 hereof) for payment of its
fees and expenses in accordance with the Loan Agreement, with a right of
payment therefrom prior to payment of any principal, premium, or interest on
the Bonds. The Trustee shall not be entitled to any payments of fees or
reimbursements of expenses which result from the negligence or willful default
of the Trustee.

 63
 

ARTICLE
XII

CONCERNING
THE CREDIT FACILITY

Section 1201   Trustee to Draw on Credit Facility.  For so long as the Credit Facility remains
outstanding, the Trustee shall
draw on the Credit Facility as follows:

(a)    On or before the Business Day immediately
preceding each Interest Payment Date — an amount sufficient to pay all interest
on the Outstanding Bonds due on such Interest Payment Date;

(b)    On or before the Business Day immediately
preceding each Principal Payment Date — an amount sufficient to pay the
principal amount of the Outstanding Bonds maturing on such Principal Payment
Date;

(c)    On or before the Business Day preceding each
redemption date fixed pursuant to Sections 404, 405, or 406 of this Indenture —
an amount sufficient to pay the principal of, and (to the extent provided for
in such Credit Facility) the premium, if any, and accrued interest (to the
extent not already covered by the draw described in clause (a) above) on all
Outstanding Bonds to be redeemed on such redemption date;

(d)    At or before 11:30 a.m., New York, New York,
time, on each Tender Date (or, in the case of a Reset Date that is not a
Business Day, on the next succeeding Business Day) — an amount sufficient,
together with available Eligible Funds in accordance with Section 306 hereof on
deposit at 11:00 a.m., New York, New York time in the Bond Purchase Account, to
pay the purchase price (to the extent not already covered by the draw described
in clause (a) above) of all Tendered Bonds or Beneficial Ownership Interests;
and

(e)    Upon acceleration of the maturity of the
Bonds pursuant to Section 1002 of this Indenture — an amount sufficient to pay
the principal of the Outstanding Bonds and the accrued interest thereof to the
date of such acceleration;

provided, however, that for purposes of this Section
1201, Pledged Bonds shall not be deemed Outstanding, and the Trustee shall not
draw on the Credit Facility or use the proceeds of the Credit Facility for the
payment of Pledged Bonds.

Each such draw on the
Credit Facility shall be made in timely manner in accordance with the terms of
the Credit Facility. In the event that for purposes of obtaining or maintaining
a rating for the Bonds or for any other reason, it shall be necessary or
desirable to make provision for draws on the Credit Facility at particular
times, the Trustee shall deliver a written undertaking so to do and shall be
bound thereby to the same extent as if the terms thereof were set forth in full
in this Indenture.

Section 1202   Requirements Regarding Credit Facility and
Substitute Credit Facility.  Prior to
the Conversion Date there shall at all time be in effect a Credit Facility

 64
 

meeting the requirements set forth in this Indenture.
Thereafter, there shall be no requirement for a Credit Facility to be in effect
meeting the requirements hereof unless the Borrower, in a Conversion Notice or
Reset Notice, shall have elected to cause a Credit Facility to be delivered to
the Trustee. Each Credit Facility shall have the following terms and
provisions:

(a)    the Credit Facility shall be issued by a
Credit Facility Provider and shall permit demands to be made against it as set
forth in Section 1201 of this Indenture;

(b)    the Credit Facility shall have a Credit
Facility Expiration Date which is the fifteenth day of the month that is not
earlier than (i) if issued in respect of the period prior to the Conversion
Date, the earlier of one year from the effective date of such Credit Facility
or the Final Maturity Date, and (ii) if issued in respect of a Reset Period,
the first date on which the Bonds would be subject to redemption pursuant to
Section 404(b) hereof at a redemption price all of which (including any
redemption premium) is provided for by such Credit Facility (or if such Bonds
are not subject to redemption pursuant to Section 404(b), then the last day of
such Reset Period);

(c)    the Credit Facility shall be in an amount not
less than the sum of (i) the maximum principal amount of Bonds that will be
Outstanding commencing on the first date on which draws are permitted
thereunder, plus (ii) at least 35 days, prior to the Conversion Date, and 195
days thereafter of interest on such principal amount of Bonds at the maximum
rate that could be borne thereby (if issued in respect of the period prior to
the Conversion Date) or at the Adjusted Interest Rate (if issued in respect of
a Reset Period), as the case may be, plus (iii) in the case of a Substitute
Credit Facility delivered with respect to a Reset Period after the Reset Date
with respect thereto (or, in the case of the first Reset Period, after the
Conversion Date), an amount equal to any premium that could become due upon a
redemption of Bonds to the extent provided for by the Existing Credit Facility
(as hereinafter defined);

(d)    the Credit Facility shall be issued in favor
of and delivered to the Trustee; and

(e)    in the case of a Substitute Credit Facility
delivered after the Conversion Date, either (i) the Credit Facility Provider is
the issuer of both the Existing Credit Facility and the Substitute Credit
Facility, or (ii) the Trustee shall have received evidence satisfactory to it
that the issuer of the Substitute Credit Facility has a rating on its long-term
unsecured debt, or on obligations secured by its letters of credit, from
Standard & Poor’s or another national rating firm of at least the higher of
(A) the comparable rating of the issuer of the Existing Credit Facility, if
any, or (B) “A” or the equivalent thereof.

(f)     in the case of a Substitute Credit Facility
issued in respect of the period prior to the Conversion Date, it shall be
delivered at least 45 days prior to its effective date, which must be a
Business Day, except that a Substitute Credit Facility delivered

 65
 

under the circumstances described in Section 1001(d)
(a “Required Substitution”) need not be delivered prior to its effective date.

The Trustee shall not
accept any instrument as a Credit Facility unless it determines to its
satisfaction that the foregoing conditions have been satisfied and unless the
Trustee shall have been furnished with (i) an opinion of Independent Counsel to
the effect that the Credit Facility has been duly authorized, executed and
delivered and is a legally valid and binding obligation of the Credit Facility
Provider enforceable in accordance with its terms (subject to customary
exceptions as to enforceability), (ii) a Preference Opinion relating to the
proceeds of the Credit Facility and (iii) in the case of a Substitute Credit
Facility, an opinion of Bond Counsel to the effect that the Trustee’s
acceptance of the Substitute Credit Facility will not result in an Event of
Taxability.

The Trustee shall, from
time to time, at the written direction of the Borrower, accept a substitute or
replacement Credit Facility to replace the Credit Facility then in effect (the “Existing
Credit Facility”) (such substitute or replacement being referred to herein as a
“Substitute Credit Facility”), provided that the Substitute Credit Facility
meets the requirements of a Credit Facility as set forth above. Except in the
case of a Required Substitution, such direction shall be given to the Trustee
not less than 45 days prior to the Credit Facility Substitution Date (unless a
shorter notice shall be acceptable to the Trustee). The Trustee shall also
accept an amendment to the Existing Credit Facility to extend its expiration
date, as provided in Section 1401(a), which shall not be deemed a Substitute
Credit Facility.

In the case of a
Substitute Credit Facility to be effective prior to the Conversion Date (other
than a Required Substitution), the Trustee shall give notice of the mandatory
tender of Bonds as provided in Section 304. In the case of a Substitute Credit
Facility to be effective during a Reset Period (other than a Required
Substitution), the Trustee shall give immediate notice (but in no case less
than 30 days prior to the Credit Facility Substitution Date) of the proposed
delivery of such Substitute Credit Facility by first class mail to the Owner of
each Bond at the address shown on the Bond Register and to the Remarketing
Agent at the Remarketing Agent’s Address. In the case of a Required
Substitution, the Trustee shall give notice of the delivery of the Substitute
Credit Facility in the manner described above as soon as practicable after such
delivery.

On the effective date of
a Substitute Credit Facility (a “Credit Facility Substitution Date”), the
Existing Credit Facility shall be released to the issuer thereof for
cancellation upon the drawing from such Existing Letter of Credit of any
amounts necessary to pay the Bonds; provided that the Existing Credit Facility
shall not be so released upon the delivery of a Substitute Credit Facility in
connection with a Reset Period for which the conditions set forth in Section
302(b)(xi) or Section 302(c)(xi), as the case may be, are not met. Upon the
termination and release of the Existing Credit Facility, all references in this
Indenture to the Credit Facility, the Credit Facility Provider and the Credit
Facility Expiration Date shall be construed by reference to the Substitute
Credit Facility.

 66
 

Section 1203   References to Credit Facility Provider
After Expiration or Default of Credit Facility.  The particular provisions of this Indenture
and the Loan Agreement which require the approval, consent or direction of, or
notice to, the Credit Facility Provider apply only while a Credit Facility is
outstanding and if the Credit Facility Provider is not in default in any
payment required to be made on the Credit Facility.

Section 1204   References to Eligible Funds and Preference
Opinion After Expiration of Credit Facility.  The provisions of this Indenture and the Loan
Agreement which require that particular funds be Eligible Funds or that require
a Preference Opinion with respect thereto shall not apply if no Credit Facility
is outstanding.

Section 1205   Option of Credit Facility Provider to
Purchase Bonds in Lieu of Redemption or Upon Acceleration.  For so long as its Credit Facility is
outstanding, the Credit Facility Provider shall have the right to purchase with
its own funds including Credit Facility proceeds (but not with funds provided
by the Borrower or any person who is an insider to the Borrower within the
meaning of the United States Bankruptcy Code) any Bonds (i) which have been
called for redemption pursuant to Sections 404 or 406 hereof or (ii) whose
maturities have been accelerated pursuant to Section 1002. The purchase price
due the Owners of the Bonds so purchased shall be 100% of the principal,
premium, if any, and interest otherwise due on such Bonds on the redemption
date or accelerated maturity date, as the case may be. The purchase price shall
be payable in immediately available funds for the account of such Owners at the
Principal Office of the Trustee prior to the time that payment would otherwise
be due on the Credit Facility for the retirement of such Bonds in such event.
In any such case, a payment from the Credit Facility Provider pursuant to the
Credit Facility shall be deemed to be for the purchase of the Bonds otherwise
to be redeemed, unless the Credit Facility Provider elects in a written notice
accompanying such payment to have such payment applied to the redemption and
retirement of such Bonds.

 67
 

Section 1206   Disclaimer of FDIC Insurance.  The Trustee hereby disclaims and waives any
and all right to assert a claim for Federal Deposit Insurance against the
Federal Deposit Insurance Corporation in respect of the Credit Facility or the
Bonds.

ARTICLE
XIII

SUPPLEMENTAL
INDENTURES

Section 1301   Amendments and Supplements Without Bondowners’
Consent.  This Indenture may be
amended or supplemented from time to time, without the consent of the
Bondowners, by a Supplemental Indenture authorized by a resolution of the
Issuer’s Governing Body filed with the Trustee, for one or more of the
following purposes:

(a)    to add additional covenants of the Issuer or
to surrender any right or power herein conferred upon the Issuer; and

(b)    for any purpose not inconsistent with the
terms of this Indenture or to cure any ambiguity or to correct or supplement
any provision contained herein or in any Supplemental Indenture which may be
defective or inconsistent with any other provision contained herein or in any
Supplemental Indenture, or to make such other provisions in regard to matters
or questions arising under this Indenture as shall not be inconsistent with the
provisions of this Indenture and shall not, in the judgment of the Trustee,
adversely affect the interests of the Owners of the Bonds.

Section 1302   Amendments With Bondowners’ Consent.  This Indenture may be amended from time to
time by a Supplemental Indenture consented to by the Borrower and approved by
the Requisite Consent of Bondowners; provided that no amendment shall be made
which affects the rights of some but less than all the Outstanding Bonds
without the Requisite Consent of Bondowners so affected; and provided further
that unanimous written consent of the Bondowners shall be required for any
amendment with respect to (i) the amount or due date of any principal, purchase
price, premium or interest payment upon any Bonds, (ii) the mandatory
redemption provisions of any Bonds, (iii) the optional and mandatory tender
provisions of any Bonds and (iv) this Article VIII and Article XIV hereof.

If at any time the Issuer
shall request the Trustee to enter into any Supplemental Indenture for any of
the purposes of this Section, the Trustee shall, upon being satisfactorily
indemnified with respect to expenses, mail a copy of the notice by first-class
mail to each Owner of the Bonds. Such notice shall briefly set forth the nature
of the proposed Supplemental Indenture and shall state that copies thereof are
on file at the Trustee’s Principal Office for inspection by all Bondowners. If
within six months following the giving of such notice, the execution of any
such Supplemental Indenture shall have been consented to and approved as herein
provided, no Owner of any Bond shall have any right to object to any of the
terms and provisions contained therein, or the operation thereof, or in any
manner to

 68
 

question the propriety of the execution thereof, or to
enjoin or restrain the Trustee or the Issuer from executing the same or from
taking any action pursuant to the provisions thereof. Upon the execution of any
such Supplemental Indenture as in this Section permitted and provided, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith.

Section 1303   Consent of Borrower and Credit Facility
Provider.  No Supplemental Indenture
under this Article XIII shall become effective unless the Credit Facility
Provider shall have consented in writing thereto, and no Supplemental Indenture
under this Article XIII which affects any rights of the Borrower shall become
effective unless and until the Borrower shall have consented in writing to the
execution and delivery of such Supplemental Indenture.

ARTICLE
XIV

AMENDMENT
OF LOAN AGREEMENT, PROMISSORY NOTE 

AND CREDIT FACILITY

Section 1401   Amendments Not Requiring Consent of
Bondowners.  The Issuer and the
Trustee may without the consent of or notice to the Bondowners agree to any
amendment, change or modification of the Loan Agreement, the Promissory Note or
the Credit Facility in connection with any change therein for any of the
following purposes:

(a)    to add additional covenants of the Borrower
or the Credit Facility Provider, as the case may be, or to surrender any right
or power therein conferred upon the Borrower or the Credit Facility Provider,
as the case may be, or to add additional security for the performance of their
respective obligations, or to extend the Credit Facility Expiration Date to any
date permitted under Section 1202(b);

(b)    to make such other provisions in regard to
matters or questions arising thereunder as shall not be inconsistent with the
provisions of this Indenture and shall not, in the judgment of the Trustee,
adversely affect the interests of the Owners of the Bonds; and

(c)    to cause a rating on the Bonds to be
maintained.

In addition, any
amendment to Exhibit E to the Loan Agreement may be made without the
consent of Bondowners and without the consent of or execution by the Issuer in
accordance with Section 3.04 of the Loan Agreement.

Section 1402   Amendments Requiring Consent of Bondowners.
 Except for amendments, changes or
modifications as provided in Section 1401 hereof, neither the Issuer nor the
Trustee shall consent to any amendment of the Loan Agreement, the Promissory
Note or the Credit Facility without the giving of notice and the Requisite
Consent of Bondowners; provided, that no amendment shall be consented to which
affects the rights of some but less than all the Outstanding Bonds without the
Requisite Consent of Bondowners so affected; and

 69
 

provided further that the Trustee shall not without
the unanimous written consent of the Bondowners consent to any amendment which
would (i) decrease the amounts payable on the Credit Facility or Promissory
Note, (ii) change the date of payment of principal of or premium or interest on
the Promissory Note, or (iii) change Section 7.02 of the Loan Agreement.

If at any time the
Trustee shall be requested to consent to any such proposed amendment, change or
modification, the Trustee shall, upon being satisfactorily indemnified with
respect to expenses, notify the Issuer and the Borrower and cause notice of
such proposed amendment, change or modification to be given in the same manner
as provided in Section 1302 hereof with respect to Supplemental Indentures.
Such notice shall briefly set forth the nature of such proposed amendment,
change or modification and shall state that copies of the instrument embodying
the same are on file at the Trustee’s Principal Office for inspection by all
Bondowners.

Section 1403   Consent of Borrower and Credit Facility
Provider.  Unless an Event of Default
shall have occurred described in Section 1001(a) or Section 1001(d) hereof, no
amendment, change or modification under this Article XIV shall be effective
unless the Credit Facility Provider shall have consented in writing thereto,
and any amendment, change or modification under this Article XIV which affects
any rights or obligations of the Borrower shall become effective unless and
until the Borrower shall have consented in writing thereto.

ARTICLE
XV

FORM OF
BONDS

Section 1501   General Matters.  The Bonds and the certificates of authentication
thereon shall be in substantially the forms set forth in this Article XV, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon, as may be required to comply with the rules of any securities
exchange, or as may, consistently herewith, be determined by the officers
executing such Bonds as evidenced by their execution of the Bonds.

Section 1502   Form of Bond Prior to the Conversion Date.
 Each particular Bond authenticated prior
to the Conversion Date shall be substantially in the following form, with such
insertions and alterations as shall be necessary to identify such Bond by
number and date and to indicate the principal amount and Owner of such Bond;
and the Trustee’s certificate of authentication to appear on all Bonds shall be
substantially in the following form:

	
  REGISTERED

  	
  United States of
  America

  	
  REGISTERED

  
	
  NO._________________

  	
  State of
  Wisconsin

  County of Rusk

  	
  $_______________

  

 

CITY OF LADYSMITH,
WISCONSIN

VARIABLE RATE DEMAND SOLID WASTE DISPOSAL FACILITY

 70

REVENUE BOND,

SERIES 1998 (CITYFOREST CORPORATION PROJECT)

	
  Interest

  Rate

  	
   

  	
  Maturity

  Date

  	
   

  	
  Original Issue

  Date:

  	
   

  	
  CUSIP

  Number

  
	
  Variable - see below

  	
   

  	
  March 1, 2028

  	
   

  	
  ____ __, 1998

  	
   

  	
  ___________

  

 

	
   

  	
  Registered Owner:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Denomination:

  	
   

  	
   

  	
  DOLLARS

  	
   

  	
   

  

 

THE CITY OF LADYSMITH,
WISCONSIN, a municipal corporation and political subdivision of the State of
Wisconsin (the “Issuer”), for value received, promises to pay, but solely from
the source and as hereinafter provided and not otherwise, to the above named
Registered Owner, or registered assigns, on the above specified Maturity Date,
upon presentation and surrender of this Bond, the principal sum specified above
and to pay interest thereon, but solely from said source and as so provided and
not otherwise, at the Variable Rate (as defined below), payable monthly on the
first Business Day of each month, commencing March, 1998, on each Mandatory
Tender Date (as defined below) and on the redemption date until payment of such
principal sum, or, if this Bond shall be duly called for redemption, until the
redemption date. Interest on overdue principal, premium, if any, and interest
(to the extent legally enforceable) is payable at the same rate per annum as
was borne by this Bond on the due date. The principal of, premium, if any, and
interest on this Bond are payable in lawful money of the United States of
America at the principal corporate trust office of Norwest Bank Wisconsin,
N.A., Milwaukee, Wisconsin, or its successor or successors, as trustee (the “Trustee”).
Interest hereon which is payable, and punctually paid or duly provided for, on
any interest payment date shall be paid by check drawn by the Trustee payable
to the order of the person in whose name this Bond is registered at the close
of business on the record date for such interest, which shall be the day
(whether or not a Business Day) immediately preceding such interest payment
date. Such interest shall be mailed to such person at the address shown on the
Bond register kept by the Trustee.

The interest rate on this
Bond may be converted to an adjusted interest rate, whereupon a different
maturity date may be assigned to this Bond. In such event, the owner of this
Bond shall be required to tender this Bond for purchase as hereinafter
described, and a new Bond will be authenticated and delivered in lieu hereof.

As used herein:

“Business Day”
means a day (a) other than a Saturday, Sunday or legal holiday on which banks
located in the city in which the Trustee’s principal office is located, the
city in

 71
 

which the Credit Facility Provider’s principal office
is located or the city in which the Remarketing Agent’s principal office is
located, are required or authorized to remain closed and (b) on which neither
the New York Stock Exchange nor the Federal Reserve Bank is closed.

“Calculation Period”
means, while the Bonds bear interest at the Variable Rate, the period from
Wednesday of each week or any proposed Conversion Date established as provided
in the Indenture through and including the earlier of (i) the following
Tuesday, or (ii) the day immediately preceding a proposed Conversion Date.

“Conversion Date”
means the date on which the interest rate on the Bonds is converted from the
Variable Rate to the adjusted interest rates described above.

“Determination Date”
means (i) with respect to each Calculation Period commencing on a Wednesday,
the Tuesday immediately preceding the commencement of such Calculation Period
or, if such Tuesday is not a Business Day, the next preceding Business Day, and
(ii) with respect to each Calculation Period commencing on a proposed
Conversion Date, such proposed Conversion Date.

“Remarketing Agent”
means Lehman Brothers Inc. and any successor institution serving as Remarketing
Agent pursuant to the Indenture.

“Variable Rate”
means (a) for the period from the Original Issue Date through March 31, 1998,
the rate set forth in the Indenture hereinafter referred to, and (b)
thereafter, for each Calculation Period, the lesser of (i) 10% per annum or
(ii) the interest rate per annum determined by the Remarketing Agent on the
Determination Date as the minimum rate of interest, which, in the judgment of
the Remarketing Agent, under prevailing market conditions, taking into account the
current rates for tax-exempt securities comparable in length of interest rate
adjustment periods, liquidity, security and creditworthiness to the Bonds,
would enable the Bonds to be sold at a price of par, plus accrued interest, if
any, on the Determination Date.

The Bonds have been
issued pursuant to and in full compliance with the Constitution and laws of the
State of Wisconsin, particularly Section 66.521 of the Wisconsin Statutes, as
amended, and by authority of resolutions adopted by the Issuer’s governing body
in connection with a project and activity undertaken pursuant to said Section
of the Wisconsin Statutes. THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER. THE
BONDS SHALL NOT CONSTITUTE A DEBT OR OBLIGATION OF THE ISSUER, THE COUNTY IN
WHICH IT IS LOCATED, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION
THEREOF WITHIN THE MEANING OF ANY STATE CONSTITUTIONAL PROVISION, STATUTORY
LIMITATION OR CHARTER PROVISION OR LIMITATION AND SHALL NOT BE A CHARGE AGAINST
THEIR GENERAL CREDIT OR TAXING POWERS. The principal of, premium, if any, and
interest on the Bonds are payable by the Issuer solely from “Pledged Revenues”
as defined in the Indenture hereinafter referred to, including all payments by
the Borrower on the Promissory

 72
 

Note hereinafter referred to and all proceeds derived
pursuant to the Credit Facility hereinafter referred to.

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, and that the
issuance of this Bond and the issue of which it forms a part has been duly
authorized by the Issuer and does not exceed or violate any constitutional or
statutory limitation. This Bond is issued with the intent that the laws of the
State of Wisconsin will govern its construction. 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 signed by the Trustee.

IN WITNESS
WHEREOF, the Issuer has caused this Bond to be executed in its name by the
manual or facsimile signatures of its Mayor and its Clerk and its seal to be
hereunto affixed, impressed, imprinted or otherwise reproduced.

	
  

  	
   

  	
  CITY OF LADYSMITH, WISCONSIN

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Mayor

  

 

	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Clerk

  

 

	
  

  	
   

  	
   

  	
   

  
	
  Registrar, Paying Agent

  and Tender Agent:

  	
   

  	
  Norwest Bank Wisconsin, N.A.,

  Milwaukee, Wisconsin

  
	
   

  	
   

  	
   

  	
   

  

 

Certificate of Authentication:

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

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Norwest Bank Wisconsin, N.A.,

  as trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  

 

 73
 

[Text of Reverse Side of
Bond]

This Bond is one of a
duly authorized issue of Bonds of the Issuer, limited in aggregate principal
amount to $27,000,000 (hereinafter referred to as the “Bonds”), issued and
authorized to be issued for the purpose of funding a loan to CityForest
Corporation, a Minnesota corporation (the “Borrower”), pursuant to the terms of
a Loan Agreement made and entered into as of March 1, 1998, by and between the
Issuer and the Borrower (hereinafter referred to as the “Loan Agreement”). The
purpose of the Bond issue and of the loan funded thereby is to refund bonds
previously issued by the Issuer to finance a project at the Borrower’s
facilities (the “Plant Complex”) located in the jurisdiction of the Issuer.
Pursuant to the Loan Agreement, the Borrower has executed and delivered its
promissory note, payable to the order of the Issuer in the principal amount of
$27,000,000, maturing and bearing interest on the unpaid principal balance
thereof at such rates as to provide the Issuer with sufficient revenues to pay
when due the principal of and interest on the Bonds (the “Promissory Note”).

The Bonds are all issued
under and are equally and ratably secured and entitled to the protection and
benefits given by an Indenture of Trust, dated as of March 1, 1998, duly
executed and delivered by the Issuer to the Trustee (the “Indenture”).
Reference is hereby made to the Indenture and to all indentures supplemental
thereto for a description of rights, duties and obligations of the Issuer, the
Trustee and the owners of the Bonds. All of the Issuer’s right, title and
interest in and to the Loan Agreement (except for its right to enforce certain
limited provisions of the Loan Agreement) and the Promissory Note have been
pledged and assigned to the Trustee under the Indenture as security for the
payment of the Bonds.

The payment of the Bonds
may be further secured by a letter of credit, standby purchase agreement,
guaranty, bond insurance policy or similar credit enhancement instrument which
meets the requirements set forth in the Indenture (a “Credit Facility”) issued
by a bank, savings and loan association, insurance company or other regulated
financial institution (a “Credit Facility Provider”). The initial Credit
Facility is an Irrevocable Letter of Credit issued by Union Bank of California,
N.A., expiring on March 15, 2003 or such other date as therein provided.
Subject to the conditions set forth in the Indenture, the Borrower may replace
any Credit Facility with a new Credit Facility issued by the same or a
different Credit Facility Provider.

The Owner of this Bond
may require the Trustee to purchase this Bond (or any portion hereof that is a
multiple of $5,000 in excess of $100,000) on any Business Day (an “Optional
Tender Date”) but only from the sources set forth in the Indenture, upon
delivery to the Trustee, no less than seven days prior to the Optional Tender
Date, of a written demand for purchase (a “Purchase Demand”). The purchase
price shall be 100% of the principal amount of this Bond (or the portion hereof
to be purchased), plus accrued interest to the Optional Tender Date. The
Purchase Demand shall be irrevocable, and must (i) state the name and taxpayer
identification number of the Owner, (ii) identify this Bond or the portion
hereof to be purchased by CUSIP number, Bond number and principal amount, (iii)
state the Optional Tender Date on which the purchase of this Bond (or portion
hereof) is being demanded, which must be a Business Day not less than seven
days after receipt of such Purchase Demand by the

 74
 

Trustee, at or before 11:00 a.m., New York, New York
time, on a Business Day, and (iv) acknowledge that such demand is irrevocable.

This Bond shall be
subject to mandatory tender for purchase by the Trustee, but only from the
sources set forth in the Indenture, on any date established under the Indenture
for the conversion of the interest rate on the Bonds to adjusted interest
rates, on the effective date of a substitute Credit Facility (except as
otherwise provided in the Indenture), or on the first Business Day of the month
in which the expiration of the Credit Facility is to occur, unless the Credit
Facility expiration date has been extended in accordance with the Indenture.
The purchase price shall be 100% of the principal amount hereof. The Trustee
shall give notice of such mandatory tender in the same manner described below
for notice of redemption, not less than 30 nor more than 60 days prior to the
date fixed for such mandatory tender (the “Mandatory Tender Date” and, together
with an Optional Tender Date, a “Tender Date”) except with respect to a
mandatory tender caused by notice given by the Credit Facility Provider.

BONDS WHICH ARE SUBJECT
TO OPTIONAL OR MANDATORY TENDER FOR PURCHASE AS AFORESAID BUT WHICH ARE NOT IN
FACT DELIVERED TO THE TRUSTEE ON OR BEFORE THE TENDER DATE SHALL CEASE TO BEAR
INTEREST ON THE TENDER DATE. IF ELIGIBLE FUNDS (AS DEFINED IN THE INDENTURE)
SUFFICIENT TO PAY THE PURCHASE PRICE OF ANY SUCH UNTENDERED BOND SHALL BE HELD
BY THE TRUSTEE, ALL LIABILITY OF THE ISSUER TO THE OWNER OF SUCH UNTENDERED
BOND FOR THE PAYMENT OF SUCH BOND SHALL FORTHWITH CEASE, TERMINATE AND BE
COMPLETELY DISCHARGED, AND THEREUPON IT SHALL BE THE DUTY OF THE TRUSTEE TO
HOLD SUCH FUNDS IN A SEPARATE SEGREGATED TRUST ACCOUNT, WITHOUT LIABILITY FOR
INTEREST THEREON, FOR THE BENEFIT OF THE OWNER OF SUCH UNTENDERED BOND WHO
SHALL THEREAFTER BE RESTRICTED EXCLUSIVELY TO SUCH ACCOUNT FOR ANY CLAIM OF
WHATEVER NATURE ON SUCH PERSON’S PART UNDER THE INDENTURE OR ON OR WITH RESPECT
TO SUCH BOND. SUCH FUNDS IN SUCH SEGREGATED TRUST ACCOUNT SHALL NOT BE
CONSIDERED PLEDGED REVENUES, AND SUCH UNTENDERED BONDS SHALL NOT BE DEEMED TO
BE OUTSTANDING UNDER THE INDENTURE.

Upon prepayment of the
Promissory Note in accordance with Section 5.03 of the Loan Agreement, the
Bonds are subject to redemption, in whole or in part on any Business Day. The
redemption price shall be 100% of the principal amount of the Bonds or portions
thereof so redeemed, plus accrued interest to the redemption date, and without
premium.

The Bonds shall be
subject to redemption, in whole but not in part, on any Business Day, if within
120 days after the occurrence of any of the following events, the Borrower
shall elect to prepay the Promissory Note pursuant to Section 5.01 of the Loan
Agreement:

 75
 

(a)    The Plant Complex shall have been damaged or
destroyed to such extent that, in the opinion of the Borrower expressed in a
Borrower’s certificate filed with the Issuer, the Trustee and the Credit
Facility Provider following such damage or destruction (i) it is not
practicable or desirable to rebuild, repair or restore the Plant Complex within
a period of six consecutive months following such damage or destruction, or
(ii) the Borrower is or will be thereby prevented from carrying on its normal
operations at the Plant Complex for a period of at least six consecutive
months;

(b)    Title to or the temporary use of all or
substantially all of the Plant Complex shall have been taken under the exercise
of the power of eminent domain by any governmental authority to such extent
that, in the opinion of the Borrower expressed in a Borrower’s certificate
filed with the Issuer, the Trustee and the Credit Facility Provider, the
Borrower is or will be thereby prevented from carrying on its normal operations
at the Plant Complex for a period of at least six consecutive months;

(c)    Any court or administrative body of competent
jurisdiction shall enter a judgment, order or decree requiring the Borrower to
cease all or any substantial part of its operations at the Plant Complex to
such extent that, in the opinion of the Borrower expressed in a Borrower’s
certificate filed with the Issuer, the Trustee and the Credit Facility Provider,
the Borrower is or will be thereby prevented from carrying on its normal
operations at the Plant Complex for a period of at least six consecutive
months; or

(d)    As a result of any changes in the
Constitution of Wisconsin or the Constitution of the United States of America
or of legislative or administrative action (whether state or federal) or by
final decree, judgment or order of any court or administrative body (whether
state or federal), the Loan Agreement shall have become void or unenforceable
or impossible of performance in accordance with the intent and purposes of the
parties as expressed in the Loan Agreement, or unreasonable burdens or
excessive liabilities shall have been imposed on the Issuer or the Borrower as
a consequence of having the Bonds or the Promissory Note outstanding including
without limitation federal, state or other ad valorem, property, income or
other taxes not being imposed on the date of the Loan Agreement.

The redemption price for
any such redemption shall be 100% of the principal amount of Bonds so redeemed,
plus accrued interest to the redemption date, and without premium.

The Bonds shall be
subject to mandatory redemption in whole on the earliest practicable Business
Day for which the Trustee can give timely notice, but in any event within 60
days following a Determination of Taxability (as defined in the Indenture). The
redemption price for any such redemption shall be 100% of the principal amount
of Bonds so redeemed, plus accrued interest to the redemption date.

Bonds which otherwise are
to be redeemed in accordance with the redemption provisions summarized under
the third preceding paragraph or the immediately preceding paragraph may, at
the option of the Credit Facility Provider, be purchased in lieu of

 76
 

redemption on the redemption
date. Any Bonds so purchased may be remarketed. The purchase price shall be the
same as the otherwise applicable redemption price.

Notice
of the call for any redemption of the Bonds prior to maturity shall be given by
mailing a copy of the redemption notice by first-class mail not less than 30
nor more than 60 days prior to the redemption date to the registered owner of
each Bond to be redeemed at the address shown on the Bond register maintained
by the Trustee. Neither the failure to mail any such notice, nor any defect in
any notice so mailed, with respect to any particular Bondowner shall affect the
validity of any proceedings for redemption of any other Bond. All Bonds or
portions thereof so called for redemption shall, unless they are purchased in
lieu of redemption as provided in the Indenture, cease to bear interest on the
specified redemption date and shall no longer be deemed to be outstanding under
the provisions of the Indenture if Eligible Funds (as defined in the Indenture)
available and sufficient for their redemption are on deposit at the place of
payment at that time.

Except
as provided in the Indenture, the owners of the Bonds shall have no right to
enforce the provisions of the Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any event of default
under the Indenture, or to institute, appear in or defend any suit or other
proceedings with respect thereto. In certain events, on the conditions, in the
manner and with the effect set forth in the Indenture, the principal of all
Bonds issued under the Indenture and then outstanding may become or may be
declared due and payable before the stated maturity thereof, together with
interest accrued thereon. Amendments, modifications and alterations of the Loan
Agreement, the Indenture and the Credit Facility, or of any supplements
thereto, may be made only to the extent and in the circumstances permitted by
the Indenture.

This
Bond shall be fully negotiable, but may be transferred only by a written
assignment duly executed by the registered owner hereof or by such owner’s duly
authorized legal representative. Upon presentation and surrender of this Bond
together with said executed form of assignment at the principal corporate trust
office of the Trustee, the Trustee shall register the transfer of this Bond in
the Bond register maintained by the Trustee; provided, however, that the
Trustee shall have no obligation to register the transfer unless the executed
assignment shall be satisfactory to it in form and substance. Upon registration
of the transfer of this Bond, the Trustee shall cancel this Bond, and the
Issuer shall issue, and the Trustee shall authenticate, one or more new Bonds
of authorized denominations of the same maturity and interest rate and in the
same aggregate outstanding principal amount as this Bond. The Issuer and the
Trustee may deem and treat the registered owner hereof as the absolute owner
hereof for the purpose of receiving payment of or on account of the principal of,
premium, if any, and interest due hereon and for all other purposes, and
neither the Issuer, nor the Trustee nor any alternate paying agent shall be
affected by any notice to the contrary.

The
Bonds are issuable in the form of fully registered bonds in the denominations
of $100,000 or any multiple of $5,000 in excess thereof. In the manner and
subject to the conditions provided in the Indenture, Bonds, upon surrender
thereof at the principal corporate trust office of the Trustee together with a
written instrument of transfer

 77
 

satisfactory to the Trustee, duly executed by the
registered owner or such owner’s duly authorized legal representative, may be
exchanged for an equal outstanding aggregate principal amount of Bonds of the
same maturities and interest rates of any authorized denomination. Except in
connection with a remarketing of the Bonds upon optional or mandatory tender,
the Trustee shall not be required to register the transfer or to exchange any
Bond (i) after the receipt by the Trustee of a Purchase Demand with respect
thereto and through the corresponding Optional Tender Date, (ii) after the
Trustee has given notice of a Mandatory Tender Date and through the Mandatory
Tender Date, (iii) during the fifteen days prior to the mailing of notice of any
redemption, or (iv) after such Bond has been called for redemption. The
Bondowner requesting any registration of transfer or exchange of Bonds shall
pay with respect thereto any resulting tax or governmental charge. All such
payments shall be conditions precedent to the exercise of the Bondowner’s
rights of registration of transfer or exchange.

ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
__________________________________________________________________________________________________________________
(Please Print or Typewrite Name and Address of Transferee)
_______________________________________________________________________ the
within Bond and all rights thereunder, and hereby irrevocably constitutes and
appoints ________________________________________ Attorney to transfer the
within Bond on the books kept for registration thereof, with full power of
substitution in the premises.

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed:

  	
   

  	
   

  	
  Signature of Bondowner:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (L.S.)

  
	
   

   

  	
   

  	
   

  	
   

  
	
  NOTICE: Signature(s) must be guaranteed.

  	
   

  	
   

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

  

 

Section 1503 Form of
Bond On or After Conversion Date. Each particular Bond authenticated on or
after the Conversion Date shall be substantially in the following form, with
such insertions and alterations as shall be necessary to identify such Bond by
number, date and CUSIP number (if any) and to indicate the principal amount,
maturity date, Reset Date, Owner, interest rate and redemption features of such
Bond; and the Trustee’s Certificate of authentication to appear on all Bonds
shall be substantially in the following form:

 78
 

 

	
  REGISTERED

  	
  United States of
  America

  	
  REGISTERED

  
	
  NO.___________________

  	
  State of
  Wisconsin

  County of Rusk

  	
  $_______________

  

 

CITY OF LADYSMITH,
WISCONSIN

SOLID WASTE DISPOSAL FACILITY

REVENUE BOND, 

SERIES 1998 (CITYFOREST CORPORATION PROJECT)

 

	
  Interest

  Rate

  	
   

  	
  Maturity

  Date

  	
   

  	
  [Mandatory 

  Tender

  Date

  	
   

  	
  Original Issue

  Date:

  	
   

  	
  CUSIP

  Number

  
	
  ________%

  	
   

  	
  March 1, _____

  	
   

  	
  __________ 1, _____]

  	
   

  	
  __________, 1998

  	
   

  	
  ___________

  

 

	
  

  	
  Registered
  Owner:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Denomination:

  	
   

  	
   

  	
  DOLLARS

  	
   

  	
   

  

 

THE CITY OF LADYSMITH,
WISCONSIN, a municipal corporation and political subdivision of the State of
Wisconsin (the “Issuer”), for value received, promises to pay, but solely from
the source and as hereinafter provided and not otherwise, to the above named
Registered Owner, or registered assigns, on the above specified Maturity Date,
upon presentation and surrender of this Bond, the principal sum specified above
and to pay interest thereon, but solely from said source and as so provided and
not otherwise, at a rate per annum equal to the Interest Rate set forth above,
payable quarterly on each March 1 and September 1, commencing                     
1,       and on the redemption date until payment of
such principal sum, or, if this Bond shall be duly called for redemption, until
the redemption date. Interest on overdue principal, premium, if any, and
interest (to the extent legally enforceable) is payable at the same rate per
annum as was borne by this Bond on the due date. The principal of, premium, if
any, and interest on this Bond are payable in lawful money of the United States
of America at the principal corporate trust office of Norwest Bank Wisconsin,
N.A., or its successor or successors, as trustee (the “Trustee”). Interest
hereon which is payable, and punctually paid or duly provided for, on any
interest payment date shall be paid by check drawn by the Trustee payable to
the order of the person in whose name this Bond is registered at the close of
business on the record date for such interest, which shall be the fifteenth day
of the calendar month immediately preceding such interest payment date. Such
interest shall be mailed to such person at the address shown on the Bond
register kept by the Trustee.

 79
 

The Bonds have been
issued pursuant to and in full compliance with the Constitution and laws of the
State of Wisconsin, particularly Section 66.521 of the Wisconsin Statutes, as
amended, and by authority of resolutions adopted by the Issuer’s governing body
in connection with a project and activity undertaken pursuant to said Section
of the Wisconsin Statutes. THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER. THE
BONDS SHALL NOT CONSTITUTE A DEBT OR OBLIGATION OF THE ISSUER, THE COUNTY IN
WHICH IT IS LOCATED, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION
THEREOF WITHIN THE MEANING OF ANY STATE CONSTITUTIONAL PROVISION, STATUTORY
LIMITATION OR CHARTER PROVISION OR LIMITATION AND SHALL NOT BE A CHARGE AGAINST
THEIR GENERAL CREDIT OR TAXING POWERS. The principal of, premium, if any, and
interest on the Bonds are payable by the Issuer solely from “Pledged Revenues”
as defined in the Indenture hereinafter referred to, including all payments by
the Borrower on the Promissory Note hereinafter referred to [and all proceeds
derived pursuant to the Credit Facility hereinafter referred to].

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, and that the
issuance of this Bond and the issue of which it forms a part has been duly
authorized by the Issuer and does not exceed or violate any constitutional or
statutory limitation. This Bond is issued with the intent that the laws of the
State of Wisconsin will govern its construction. 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 signed by the Trustee.

 80
 

IN
WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name by
the manual or facsimile signatures of its Mayor and its Clerk and its seal to
be hereunto affixed, impressed, imprinted or otherwise reproduced.

	
  

  	
   

  	
  CITY OF LADYSMITH, WISCONSIN

  
	
  

  	
   

  	
  By

  	
  

  
	
   

  	
   

  	
   

  	
  Mayor

  

 

	
  [SEAL]

  	
   

  	
   

  
	
  

  	
   

  	
  By

  	
  

  
	
   

  	
   

  	
   

  	
  Clerk

  

 

	
  

  	
   

  	
   

  	
   

  
	
  Registrar, Paying Agent

  and Tender Agent:

  	
   

  	
  NORWEST BANK WISCONSIN,
  N.A.,

  Milwaukee, Wisconsin

  
	
   

  	
   

  	
   

  	
   

  

 

Certificate of Authentication:

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

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  NORWEST BANK WISCONSIN,
  N.A., as trustee

  
	
   

  	
   

  	
   

  	
   

  	
  By

  	
  

  
	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  

 

 81

[Text
of Reverse Side of Bond]

This
Bond is one of a duly authorized issue of Bonds of the Issuer, limited in
aggregate principal amount to $27,000,000 (hereinafter referred to as the “Bonds”),
issued and authorized to be issued for the purpose of funding a loan to
CityForest Corporation, a Minnesota corporation (the “Borrower”), pursuant to
the terms of a Loan Agreement made and entered into as of March 1, 1998, by and
between the Issuer and the Borrower (hereinafter referred to as the “Loan
Agreement”). The purpose of the Bond issue and of the loan funded thereby is to
refund bonds previously issued by the Issuer to finance a project at the
Borrower’s facilities (the “Plant Complex”) located in the jurisdiction of the
Issuer. Pursuant to the Loan Agreement, the Borrower has executed and delivered
its promissory note, payable to the order of the Issuer in the principal amount
of $27,000,000, maturing and bearing interest on the unpaid principal balance
thereof at such rates as to provide the Issuer with sufficient revenues to pay
when due the principal of and interest on the Bonds (the “Promissory Note”).

The
Bonds are all issued under and are equally and ratably secured and entitled to
the protection and benefits given by an Indenture of Trust, dated as of March
1, 1998, duly executed and delivered by the Issuer to the Trustee (the “Indenture”).
Reference is hereby made to the Indenture and to all indentures supplemental
thereto for a description of rights, duties and obligations of the Issuer, the
Trustee and the owners of the Bonds. All of the Issuer’s right, title and
interest in and to the Loan Agreement (except for its right to enforce certain
limited provisions of the Loan Agreement) and the Promissory Note have been
pledged and assigned to the Trustee under the Indenture as security for the
payment of the Bonds.

[The
payment of the Bonds may be further secured by a letter of credit, standby
purchase agreement, guaranty, bond insurance policy or similar credit
enhancement instrument which meets the requirements set forth in the Indenture
(a “Credit Facility”) issued by a bank, savings and loan association, insurance
company or other regulated financial institution (a “Credit Facility Provider”).
The current Credit Facility is                                                                      
issued by                                                                      
expiring on                                    ,
                     
or such earlier date as therein provided. Subject to the conditions set forth
in the Indenture, the Borrower may replace any Credit Facility with a new
Credit Facility issued by the same or a different Credit Facility Provider.]

[The
Bonds may also be further partially be secured by a Debt Service Reserve Fund.]

[The
Bonds shall be subject to mandatory tender for purchase on the Mandatory Tender
Date set forth above. The purchase price shall be 100% of the principal amount
of the Bonds, plus accrued interest to the Mandatory Tender Date. Each
Bondowner will be required to tender its Bonds to the Trustee, or such Bonds
will be deemed to have been so tendered, for purchase on such date. The
purchase price will be payable only upon actual surrender of the Bond to the
Trustee.]

 82
 

BONDS WHICH ARE SUBJECT
TO MANDATORY TENDER FOR PURCHASE AS AFORESAID BUT WHICH ARE NOT IN FACT
DELIVERED TO THE TRUSTEE ON OR BEFORE THE MANDATORY TENDER DATE SHALL CEASE TO
BEAR INTEREST ON THE MANDATORY TENDER DATE. IF ELIGIBLE FUNDS (AS DEFINED IN
THE INDENTURE) SUFFICIENT TO PAY THE PURCHASE PRICE OF ANY SUCH UNTENDERED BOND
SHALL BE HELD BY THE TRUSTEE, ALL LIABILITY OF THE ISSUER TO THE OWNER OF SUCH
UNTENDERED BOND FOR THE PAYMENT OF SUCH BOND SHALL FORTHWITH CEASE, TERMINATE
AND BE COMPLETELY DISCHARGED, AND THEREUPON IT SHALL BE THE DUTY OF THE TRUSTEE
TO HOLD SUCH FUNDS IN A SEPARATE SEGREGATED TRUST ACCOUNT, WITHOUT LIABILITY
FOR INTEREST THEREON, FOR THE BENEFIT OF THE OWNER OF SUCH UNTENDERED BOND WHO
SHALL THEREAFTER BE RESTRICTED EXCLUSIVELY TO SUCH ACCOUNT FOR ANY CLAIM OF
WHATEVER NATURE ON SUCH PERSON’S PART UNDER THE INDENTURE OR ON OR WITH RESPECT
TO SUCH BOND. SUCH FUNDS IN SUCH SEGREGATED TRUST ACCOUNT SHALL NOT BE
CONSIDERED PLEDGED REVENUES, AND SUCH UNTENDERED BONDS SHALL NOT BE DEEMED TO
BE OUTSTANDING UNDER THE INDENTURE.

[Upon prepayment of the
Promissory Note in accordance with Section 5.03 of the Loan Agreement, the Bonds
[maturing after March 1,     ] are subject to redemption,
in whole or in part on any date or in part on any regularly scheduled interest
payment date. The redemption price shall be the amount determined from the
table below (expressed as a percentage of the principal amount of the Bonds or
portions thereof so redeemed), plus accrued interest to the redemption date:

	
  Redemption Period

  	
   

  	
  Redemption Price

  
	
  

  	
   

  	
  ]

  

 

The Bonds shall be
subject to redemption, in whole but not in part, on any Business Day, if within
120 days after the occurrence of any of the following events, the Borrower
shall elect to prepay the Promissory Note pursuant to Section 5.01 of the Loan
Agreement:

(a)    The Plant Complex shall have been damaged or
destroyed to such extent that, in the opinion of the Borrower expressed in a
Borrower’s certificate filed with the Issuer, the Trustee [and the Credit
Facility Provider] following such damage or destruction (i) it is not
practicable or desirable to rebuild, repair or restore the Plant Complex within
a period of six consecutive months following such damage or destruction, or
(ii) the Borrower is or will be thereby prevented from carrying on its normal
operations at the Plant Complex for a period of at least six consecutive
months;

(b)    Title to or the temporary use of all or
substantially all of the Plant Complex shall have been taken under the exercise
of the power of eminent domain by

 83
 

any governmental authority
to such extent that, in the opinion of the Borrower expressed in a Borrower’s
certificate filed with the Issuer, the Trustee [and the Credit Facility
Provider,] the Borrower is or will be thereby prevented from carrying on its
normal operations at the Plant Complex for a period of at least six consecutive
months;

(c)
   Any court or administrative body of
competent jurisdiction shall enter a judgment, order or decree requiring the
Borrower to cease all or any substantial part of its operations at the Plant
Complex to such extent that, in the opinion of the Borrower expressed in a
Borrower’s certificate filed with the Issuer, the Trustee, [and the Credit
Facility Provider] the Borrower is or will be thereby prevented from carrying
on its normal operations at the Plant Complex for a period of at least six
consecutive months; or

(d)
   As a result of any changes in the
Constitution of Wisconsin or the Constitution of the United States of America
or of legislative or administrative action (whether state or federal) or by
final decree, judgment or order of any court or administrative body (whether
state or federal), the Loan Agreement shall have become void or unenforceable
or impossible of performance in accordance with the intent and purposes of the
parties as expressed in the Loan Agreement, or unreasonable burdens or
excessive liabilities shall have been imposed on the Issuer or the Borrower as
a consequence of having the Bonds or the Promissory Note outstanding including
without limitation federal, state or other ad valorem, property, income or
other taxes not being imposed on the date of the Loan Agreement.

The
redemption price for any such redemption shall be 100% of the principal amount
of Bonds so redeemed, plus accrued interest to the redemption date, and without
premium.

[The
Bonds shall be subject to mandatory redemption in whole on the first day of the
month in which the Credit Facility is to expire unless, at least 45 days before
such first day of the month, the Borrower has caused to be delivered a
substitute Credit Facility, or an amendment to the Credit Facility extending
the expiration date, in either case meeting the requirements of the Indenture.
The redemption price for any such redemption shall be 100% of the principal
amount of Bonds so redeemed, plus accrued interest to the redemption date, and
without premium.]

The
Bonds shall be subject to mandatory redemption in whole on the earliest
practicable Business Day for which the Trustee can give timely notice, but in
any event within 60 days following a Determination of Taxability (as defined in
the Indenture). The redemption price for any such redemption shall be 100% of
the principal amount of Bonds so redeemed, plus accrued interest to the
redemption date.

[Bonds
which otherwise are to be redeemed in accordance with the redemption provisions
summarized under the fourth preceding paragraph, the second preceding paragraph
and the immediately preceding paragraph may, at the option of the Credit
Facility Provider, be

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purchased in lieu of
redemption on the redemption date. Any Bonds so purchased may be remarketed.
The purchase price shall be the same as the otherwise applicable redemption
price.]

Notice
of the call for any redemption of the Bonds prior to maturity shall be given by
mailing a copy of the redemption notice by first-class mail not less than 30
nor more than 60 days prior to the redemption date to the registered owner of
each Bond to be redeemed at the address shown on the Bond register maintained
by the Trustee. Neither the failure to mail any such notice, nor any defect in
any notice so mailed, with respect to any particular Bondowner shall affect the
validity of any proceedings for redemption of any other Bond. All Bonds or
portions thereof so called for redemption shall[, unless they are purchased in
lieu of redemption as provided in the Indenture,] cease to bear interest on the
specified redemption date and shall no longer be deemed to be outstanding under
the provisions of the Indenture if Eligible Funds (as defined in the Indenture)
available and sufficient for their redemption are on deposit at the place of
payment at that time.

Except
as provided in the Indenture, the owners of the Bonds shall have no right to
enforce the provisions of the Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any event of default
under the Indenture, or to institute, appear in or defend any suit or other
proceedings with respect thereto. In certain events, on the conditions, in the
manner and with the effect set forth in the Indenture, the principal of all
Bonds issued under the Indenture and then outstanding may become or may be
declared due and payable before the stated maturity thereof, together with
interest accrued thereon. Amendments, modifications and alterations of the Loan
Agreement, the Indenture [and the Credit Facility,] or of any supplements
thereto, may be made only to the extent and in the circumstances permitted by
the Indenture.

This
Bond shall be fully negotiable, but may be transferred only by a written
assignment duly executed by the registered owner hereof or by such owner’s duly
authorized legal representative. Upon presentation and surrender of this Bond
together with said executed form of assignment at the principal corporate trust
office of the Trustee, the Trustee shall register the transfer of this Bond in
the Bond register maintained by the Trustee; provided, however, that the
Trustee shall have no obligation to register the transfer unless the executed
assignment shall be satisfactory to it in form and substance. Upon registration
of the transfer of this Bond, the Trustee shall cancel this Bond, and the
Issuer shall issue, and the Trustee shall authenticate, one or more new Bonds
of authorized denominations of the same maturity and interest rate and in the
same aggregate outstanding principal amount as this Bond. The Issuer and the
Trustee may deem and treat the registered owner hereof as the absolute owner
hereof for the purpose of receiving payment of or on account of the principal
of, premium, if any, and interest due hereon and for all other purposes, and
neither the Issuer, nor the Trustee nor any alternate paying agent shall be
affected by any notice to the contrary.

The
Bonds are issuable in the form of fully registered bonds in the denominations
of $5,000 or any multiple thereof. In the manner and subject to the conditions
provided in the Indenture, Bonds, upon surrender thereof at the principal corporate
trust office

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of the Trustee together with
a written instrument of transfer satisfactory to the Trustee, duly executed by
the registered owner or such owner’s duly authorized legal representative, may
be exchanged for an equal outstanding aggregate principal amount of Bonds of
the same maturities and interest rates of any authorized denomination. The
Trustee shall not be required to register the transfer or to exchange any Bond
(i) during the fifteen days prior to the mailing of notice of any redemption,
or (ii) after such Bond has been called for redemption. The Bondowner
requesting any registration of transfer or exchange of Bonds shall pay with
respect thereto any resulting tax or governmental charge. All such payments
shall be conditions precedent to the exercise of the Bondowner’s rights of
registration of transfer or exchange.

ASSIGNMENT

FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers unto
___________________________________________________________________________________________________________________________________
(Please Print or Typewrite Name and Address of Transferee)
________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________ Attorney to transfer the within
Bond on the books kept for registration thereof, with full power of
substitution in the premises.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed:

  	
   

  	
   

  	
  Signature of Bondowner:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (L.S.)

  
	
   

  	
   

  	
   

  	
   

  
	
  NOTICE: Signature(s) must
  be guaranteed.

  	
   

  	
   

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

  

 

Section
1504   Additional Matters Appearing on
Bonds.  There may be printed or
otherwise reproduced on any Bond form (i) the legal opinion of Bond Counsel,
(ii) customary “back file panel” summary information, (iii) restrictions on
transfer in form approved by the Trustee as required in particular instances,
and (iv) any other information deemed necessary or appropriate by the Issuer or
the Trustee with the approval of Bond Counsel to give notice of information to
Bondowners.

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ARTICLE XVI

MISCELLANEOUS

Section
1601   Consent of Bondowners.  Any consent, request, direction, approval,
objection or other instrument required by this Indenture to be signed and
executed by the Bondowners may be in any number of concurrent writings of
similar tenor and may be signed or executed by such Bondowners in person or by
agent appointed in writing. The fact and date of the execution by any person of
any such writing may be proved by the certificate of any officer in any
jurisdiction who by law had power to take acknowledgments within such
jurisdiction that the person signing such writing acknowledged before him or
her the execution thereof, or by an affidavit of any witness to such execution.
Proof of the execution of any such consent, request, direction, approval,
objection or other instrument or of the writing appointing any such agent, if
made in said manner, shall be sufficient for any of the purposes of this
Indenture, and shall be conclusive in favor of the Trustee with regard to any
action taken under such request for other instrument.

Section
1602   Limitation of Rights.  With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from the
Indenture or the Bonds is intended or shall be construed to give to any person
other than the parties hereto, the Borrower, the Remarketing Agent, the Credit
Facility Provider, and the Owners of the Bonds any legal or equitable right,
remedy or claim under or in respect to this Indenture, or any covenants,
conditions and provisions hereof, which are and are intended to be for the sole
and exclusive benefit of the parties hereto, the Borrower, the Credit Facility
Provider, and the Owners of the Bonds as herein provided.

Section
1603 Severability. If any provision of this Indenture shall be held or
deemed to be or shall, in fact, be inoperative or unenforceable as applied in
any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any other provision or
provisions hereof or any constitution or statute or rule of public policy, or
for any other reason, such circumstances shall not have the effect of rendering
the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatever.

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

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Section
1604   Notices.  Unless otherwise expressly provided herein,
all notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when hand delivered or when mailed
by certified or registered mail, postage prepaid, or by prepaid telex, telecopy
or telegram addressed as follows: (i) if to the Issuer, at the Issuer’s
Address; (ii) if to the Trustee, at the Trustee’s Address; (iii) if to the
Remarketing Agent, at the Remarketing Agent’s Address; and (iv) if to the
Credit Facility Provider, at the Credit Facility Provider’s Address. A notice
to the Rating Agency shall be sent to the current address of the Rating Agency.

A
duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Trustee shall also be concurrently given
to the Borrower at the Borrower’s Address and to the Credit Facility Provider
at the Credit Facility Provider’s Address.

Whenever
the Trustee is required hereunder to give notice to Bondowners, it shall give
such notice by first class mail to each person on the Bond Register whose Bond
is affected thereby. The Trustee shall send to the Rating Agency by first class
mail notice of any of the following events:

(a)
   change in any party to the Indenture or
Loan Agreement;

(b)    any material change in the Credit Facility,
Loan Agreement or Indenture;

(c)
   any expiration, failure to reinstate or
termination of the Credit Facility;

(d)
   any Proposed Conversion Date or
Mandatory Tender Date; or

(e)
   any redemption, defeasance or
acceleration of the Bonds.

Section
1605   Payments Due on Saturdays,
Sundays and Holidays.  In any case
where the date of maturity of interest on or principal of the Bonds or the date
fixed for mandatory tender or redemption of any Bonds shall not be a Business
Day, the payment of principal, premium, if any, and interest (or, in the case
of mandatory tender for purchase, the purchase price) need not be made on such
date in such city but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after such date and
prior to the date of payment as aforesaid.

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Section 1606   Captions.  The captions or headings in this Indenture are
for convenience only and in no way define, limit or describe the scope or
intent of any provisions of this Indenture.

Section 1607   Counterparts.  This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

Section 1608   Governing Law.  The laws of the State of Wisconsin shall
govern this Indenture.

IN WITNESS WHEREOF, the
Issuer has caused this Indenture to be executed in its name and on its behalf
by its Chief Municipal Official and its Clerk thereunto duly authorized and its
seal to be hereunto affixed, and the Trustee has caused this Indenture to be
executed in its name and behalf by its duly authorized officer all as of the
first day of March, 1998.

	
  

  	
   

  	
  CITY OF LADYSMITH, WISCONSIN

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
  /s/ Ronald Moore

  
	
   

  	
   

  	
   

  	
  Mayor

  

 

	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Kathleen Stewart

  
	
   

  	
   

  	
   

  	
  Clerk

  

 

	
  

  	
   

  	
  NORWEST BANK WISCONSIN, N.A., as trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
  By

  	
  /s/ Susan L. Shepherd

  
	
   

  	
   

  	
   

  	
  Corporate Trust Officer

  

 

 89

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