Document:

<PAGE>
                                                                               .
                                                                               .
                                                                               .

[BOEING LOGO]             PURCHASE CONTRACT             ACCEPTANCE REQUIRED: [X]

<TABLE>
<S>                                                     <C>
THE BOEING COMPANY
P.O. BOX 240002
HUNTSVILLE, AL 35824-8402                                                         SPECIAL CONTRACT INSTRUCTIONS ARE ATTACHED HERETO:

------------------------------------------------        ----------------------------------------------------------------------------
ORBITAL SCIENCES CORP                   675784          PURCHASE CONTRACT NO.:          PCC               STATUS           PAGE

                                                               101018                    2                  AP            1 OF 2
3380 S PRICE RD                                         ----------------------------------------------------------------------------

CHANDLER             , AZ   85248-3534                  ---------------------------
                                                        RELEASE        17-APR-02
                                                        DATE:
ATTENTION: Camille Cisek                                ---------------------------    ---------------------------------------------
                                                        ORIGINAL       27-MAR-02        [ ]  Subject to Tax
                                                        PC DATE:
                                                        ---------------------------     [X]  For Resale, Not Subject to Tax
                                                        CONFIRM        12/19/01              (Cert No. RA 103)
                                                        DATE:
------------------------------------------------        ---------------------------    ---------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SHIP VIA: Not applicable                                FOB: Not Applicable            TERMS:  0%  0    NET 30
------------------------------------------------------------------------------------------------------------------------------------
SHIP TO: The Boeing Company      799A James Record Road                         Huntsville                , AL        35824
------------------------------------------------------------------------------------------------------------------------------------
ADDRESS ALL INQUIRIES TO BUYER:

BUYER NAME: Connie Kama                      MAIL STOP:  GB-81           PHONE:  714-762-0352            FAX:

                                                      EMAIL: connie.kama@boeing.com
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
PURCHASE ORDER COMMENTS:

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

THE FOLLOWING LISTED ATTACHMENTS DEFINE THE TERMS AND CONDITIONS APPLICABLE TO THIS PURCHASE CONTRACT. ATTACHMENTS PRECEDED BY THE
WORD "WEB" ARE AVAILABLE ON THE INTERNET AT HTTP://WWW.BOEING.COM/COMPANYOFFICES/DOINGBIZ/TSCS. ADDITIONAL APPLICABLE TERMS AND
CONDITIONS IDENTIFIED IN THE LIST ARE ATTACHED HERETO. TERMS AND CONDITIONS APPLICABLE TO SPECIFIC LINE ITEMS ARE IDENTIFIED WITH
THE LINE ITEM. IF YOU ARE UNABLE TO ACCESS THE INTERNET, PLEASE CONTACT THE BUYER IDENTIFIED ABOVE.

ATTACHMENTS
CHANGE                  PC CHANGES                                  Rev  03
CLAUSES                 A229                                        Rev  01/01
DPAS                    DPAS ORDER                                  Rev  00
HEADER                  DD FORM 254                                 Rev  00
FREEFORM                101018 RAPID SOW                            Rev  000
SHIP VIA:               HSV. SHIPPING INSTRUCTIONS                  Rev  03/01
ZZZZ                    END                                         Rev  00

                                                                                             TOTAL PC VALUE    $333,954,177.00 NTE
                                                                                       CURRENT FUNDED VALUE     $61,371,294.00

------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT PRIORITY RATINGS IDENTIFIED AT THE LINE ITEM LEVEL
INDICATE THAT REQUIREMENTS WITHIN THIS ORDER ARE CERTIFIED FOR
NATIONAL DEFENSE USE UNDER DMS REGULATION 1, AND YOU ARE HEREBY
REQUESTED TO SIGN AND RETURN ACKNOWLEDGEMENT WITHIN TEN WORKING   ACCEPTANCE OF THE OFFER REPRESENTED BY THIS ORDER IS EXPRESSLY
DAYS FOR DO RATED REQUIREMENTS AND WITHIN FIVE WORKING DAYS FOR   LIMITED TO THE PROVISIONS HERETO. SIGNING AND RETURNING THE
DX RATED REQUIREMENTS.                                            ACKNOWLEDGMENT COPY OF THE ORDER (IF ATTACHED HERETO), OR, IN ANY
                                                                  EVENT, DELIVERY IN THE WHOLE OR IN PART OF THE ARTICLES TO BE
----------------------------------------------------------------  FURNISHED HEREUNDER SHALL CONSTITUTE ACCEPTANCE OF THIS ORDER.
                                                                  THIS IS THE ENTIRE CONTRACT AND NO CHANGES OF ANY KIND WHATSOEVER
                                                                  ARE BINDING ON THE BUYER UNLESS THEY ARE ACCEPTED BY THE BUYER IN
 --ACCEPTANCE OF THIS PURCHASE ORDER IS HEREBY ACKNOWLEDGED--     WRITING.

SELLER___________________________________   DATE___________

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

/\ REFERS TO INFORMATION OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT.
THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION
ALONG WITH A LETTER FROM THE MISSILE DEFENSE AGENCY STATING THAT SUCH REDACTED
TEXT IS CLASSIFIED PURSUANT TO RULE 0-6 OF THE SECURITIES EXCHANGE ACT OF 1934.

<PAGE>

<TABLE>
<S>                                                           <C>                                                 <C>
-----------------  -----------------------------------------  -------------------------------  -----------------  ------------------

[BOEING LOGO]           PURCHASE CONTRACT CONTINUATION           PURCHASE CONTRACT: 101018         REVISION 2         PAGE 2 OF 2

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

------  ----------------------------------------------------------------------------------------------------------------------------
 ITEM   QUANTITY                      UM   PART NUMBER                                                     PROJECT CCN
               VENDOR P/N                                           DESCRIPTION
               CONTRACT NUMBER                             PRIORITY RATING            FUNDED UNIT PRICE      FUNDED EXTENDED PRICE
               TRUE MANUFACTURER
------  ----------------------------------------------------------------------------------------------------------------------------
 0001                1                LT                                                                         VHA**10**093

             RAPID BV LAUNCH                                ORBITAL SCIENCES
             HQ0006-01-C-0001            DX-68                      $11,231,432.00                                 $11,231,432.00
    SOW: Rapid BV Lau             SOW REV:  12/17/20

    ITEM REFERENCE: Estimated Price to be negotiated

    ITEM UNIT VALUE:      $11,231,432.00   VALUE CODE: B

    PERIOD OF PERFORMANCE:  12/18/01 through 3/31/07

      ---------------------------------------------
         QUANTITY ORDERED       DELIVERY DATE
      ---------------------------------------------
                        1       30-APR-02

 0002                1                LT                                                                         VHA**10**093

                ABV DESIGN                                  ORBITAL SCIENCES
                HQ0006-01-C-0001         DX-C9                      $43,205,486.00                                 $43,205,486.00
    SOW: ABV Design a                SOW REV:  12/17/01

    ITEM REFERENCE: Definitized Price Included in Line Item 2

    ITEM UNIT VALUE:      $315,252,803.00  VALUECODE: f

    PERIOD OF PERFORMANCE:  12/18/01 through 3/31/07

      ---------------------------------------------
         QUANTITY ORDERED       DELIVERY DATE
      ---------------------------------------------
                        1       30-APR-02

 0003                1                LT                                                                         VHA**10**093

                                                            TEST BED
                HQ0006-01-C-0001         DX-C9                      $6,934,376.00                                  $6,934,376.00

    ITEM REFERENCE: To be negotiated

    ITEM UNIT VALUE:      $7,469,942.00    VALUE CODE: d

    PERIOD OF PERFORMANCE:  2/8/02 through 3/31/07

      ---------------------------------------------
         QUANTITY ORDERED       DELIVERY DATE
      ---------------------------------------------
                        1       30-APR-02
</TABLE>

<PAGE>

<TABLE>
<S>                                                     <C>                                                    <C>
------------------------------------------------------------------------------------------------------------------------------------
AUTHORITY                             PRIORITY          CCN VHA10093             ACCOUNT                       SUBCONTRACT NUMBER

    APPROVED RFPA 3/20/02               DX-C9                                                                        101018
------------------------------------------------------------------------------------------------------------------------------------
PRIME CONTRACT                      QA COORDINATION                NEG/ADM                          NO. OF PAGES         PAGE NO.

     HQ0006-01-C-0001                                                C. M. KAMA                           8                 1
------------------------------------------------------------------------------------------------------------------------------------
TO:  Orbital Sciences Corporation                                  THE BOEING COMPANY
     3380 S. Price Road                                            3370 MIRALOMA AVENUE
     Chandler, AZ 85248-3534                                       ANAHEIM, CA. 92803

------------------------------------------------------------
SHIP TO:     A - MSFC, Huntsville, AL
             B - KSC, Florida
    C        C - Other
 ------
------------------------------------------------------------------------------------------------------------------------------------
VIA:         1 - MDA-HSV Truck           4 - Parcel Post           F.O.B.                                          SECURITY
             2 - Supplier Choice         5 - Other                                                              CLASSIFICATION:
    5        3 - United Parcel           6 - GBL                                                                 UNCLASSIFIED
 ------                                                            DESTINATION
------------------------------------------------------------------------------------------------------------------------------------
TERMS:  NET 30                                                                                                      NET PRICE
------------------------------------------------------------------------------------------------------------------------------------

                                                      SCHEDULE
                                                      --------

The Letter Subcontract 101018, dated 12/18/01, and all change notices were issued in contemplation               $315,252,803.00
of the execution of this subcontract. All of the change notices issued under Letter Subcontract are
superseded in their entirety by this subcontract. Any and all acts of performance of the noted
Letter Subcontract as amended shall be deemed made, done, or performed under the applicable
provisions of this definitive subcontract.

The price of Line Item 2 valued at $315,252,803 is the definitive Net Price of this Subcontract and
does not include undefinitized Line Item 1 (Taurus Lite) and Line Item 3 (Test Bed) of the
Subcontract. Upon negotiation and agreement on price of said items, the price of this order will be
adjusted accordingly.

Exhibits A, B, C, D, E, and F are attached hereto and incorporated herein.

------------------------------------------------------------------------------------------------------------------------------------
PER YOUR:    A - Verbal                  C - Written
             B - Telegraphic
    C
 -------                                                               THIS ORDER SUBJECT TO THE TERMS AND CONDITIONS
           Quotation Dated 14 November 2001                                          SET FORTH HEREIN.
                           ----------------

           Quotation No. TM-16127
                         --------
------------------------------------------------------------------------------------------------------------------------------------

                                IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THESE PRESENTS TO
                                            BE EXECUTED ON THE DATES MENTIONED BELOW.

ORBITAL SCIENCES CORPORATION                                                THE BOEING COMPANY
-------------------------------------------------------                     ------------------
                 Subcontractor

By /s/                                                                      By /s/
   ----------------------------------------------------                        ----------------------------------------------------
Typed Name James Utter                                                      Typed Name C. M. Kama
           --------------------------------------------                                --------------------------------------------
                                                                                                (Authorized Agent)
Title  Senior V.P. Finance and Business Operations
      -------------------------------------------------

Date 4/2/02                                                                 Date 3/29/02
     --------------------------------------------------                          --------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                              SCHEDULE (CONTINUED)

                                TABLE OF CONTENTS

       EXHIBITS

   I.  STATEMENT OF WORK

  II.  PERIOD OF PERFORMANCE

 III.  COMPLETION DATES

  IV.  TERMS AND CONDITIONS/FORMS

   V.  CONTRACT LINE ITEMS

  VI.  TARGET COST, AWARD FEE, AND AWARD FEE PLAN - LINE ITEM 02

 VII.  FUNDING LIMITATION AND FUNDING LIMITATION REVISIONS

VIII.  GOVERNMENT PROPERTY

  IX.  PRINCIPAL PLACE OF PERFORMANCE

   X.  APPLICABLE LAW

  XI.  INVOICE PAYMENT INSTRUCTIONS

 XII.  PRIORITY

XIII.  SECURITY REQUIREMENTS

 XIV.  RELATIONSHIP WITH SUBCONTRACTOR

  XV.  ALABAMA TAX EXEMPTION

 XVI.  ORDER OF PRECEDENCE

XVII.  SUBCONTRACTOR RESPONSIBILITY

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

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                    EXHIBITS

<TABLE>
<CAPTION>
Exhibit       Title
-------       -----
<S>           <C>
   A.         Subcontract Terms and Conditions

   B.         Dual Booster Vehicle Statement of Work D743-16366-1, dated 9-26-01
              with Procurement Data Requirements List (PDRL), D743-16367-1,
              dated 8-17-01.

   C.         Boost Vehicle Prime Item Development Specification (PIDS)
              S743-16353-1, dated 9-12-01 with Boost Vehicle to Payload
              Interface Requirements Specifications (IRS) S743-16355-1, dated
              8-17-01.

   D.         DD Form 254, Contract Security Classification Specification for
              Subcontract Number 101018, Original Dated 12-17-01.

   E.         Award Fee Plan, dated 3-29-02.

   F.         GFP Listing. Dated 8-6-02.
</TABLE>

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

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

I.      STATEMENT OF WORK

        The Orbital Sciences Corporation (hereinafter referred to as
        "Subcontractor", "Supplier", "Seller", or OSC) shall provide to The
        Boeing Company, (hereinafter referred to as "Boeing," or "Buyer") on a
        Cost Plus Award Fee Basis, all labor, services, materials, and equipment
        (except for GFE/GFP authorized herein) necessary to perform and complete
        the efforts as set forth in Exhibit "B" National Missile Defense
        Alternate Boost Vehicle Statement of Work D743-16366-1, dated September
        26, 2001, which is attached hereto and made a part hereof.

II.     PERIOD OF PERFORMANCE

        The period of performance of this subcontract is 18 December 2001
        through 31 March 2007.

III.    COMPLETION DATES

        Seller shall accomplish the requirements specified herein so as to meet
        the following completion dates:

        DBV (Baseline):                 /\ Event                         Date
                                        /\                               /\
                                        /\                               /\
                                        /\                               /\
                                        /\                               /\
                                        /\                               /\
                                        /\                               /\
                                        /\                               /\
                                        /\                               /\
IV.     TERMS AND CONDITIONS/FORMS

        Terms and Conditions applicable to this subcontract are attached hereto
        as Exhibit "A" entitled "Terms and Conditions" and made a part hereof.

V.      CONTRACT LINE ITEMS

<TABLE>
<CAPTION>
              Line Item Description                                           NTE Price
              ---------------------                                           ---------
              <S>                                                             <C>
              01:  Taurus Lite                                                $ To Be Negotiated (Undefinitized)
              02:  DBV - Baseline, includes the following elements:           $315,252,803 (Definitized)
                    0101 Development            $264,368,370
                   *0103 Additional Boosters    $ 41,018,180
                   *0104 Special Studies        $  9,866,253
              03:  Test Bed                                                   $To Be Negotiated (Undefinitized)
                                                                              ---------------------------------
                                                        Total NTE Price:      $315,252,803 (Definitized Value)
</TABLE>

        Note: *Line Item 02: Subcontractor is authorized to perform work only
        under 0101 Development in accordance with the Scope of Work.
        Subcontractor will not perform effort under 0103 Additional Boosters and
        0109 Special Studies until authorized in writing by buyer.

        Line items 01 and 03, above are undefinitized and are subject to
        negotiation. Upon negotiation and agreement on price of said items, the
        price of this order will be adjusted accordingly.

        As an inducement to and as additional consideration for the issuance of
        this contract, Subcontractor hereby grants to Buyer the following option
        exercisable at the sole election of Buyer by issuing written notice
        thereof to Subcontractor on or before the option exercise date contained
        herein, to purchase under the same terms and conditions of this
        subcontract, as may be amended from time to tune, additional effort at a
        price to be negotiated by not to exceed the price below.

<TABLE>
<CAPTION>
        ITEM DESCRIPTION                 OPTION EXERCISE DATE                       NTE PRICE (TO BE NEGOTIATED)
        ----------------                 --------------------                       ----------------------------
        <S>                              <C>                                        <C>
        0201                             No later than 03/15/2003                   $116,731,405
        0203                             No later than 12/15/2003                   $396,233,354
        0301                             No later than 10/1/2005                    $18,885,247
</TABLE>

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

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

        It is mutually agreed and understood that the additional effort procured
        by buyer under the provisions of this option clause shall be performed
        in strict compliance with all of the requirements of this contract as
        such may be amended from time to time and made applicable hereto.

        It is contemplated that Buyer may make changes in accordance with the
        Changes article hereof at any time in the services ordered or to be
        ordered hereunder. In the event that any changes are made, the prices
        provided for herein shall, with respect to the effort changed, be
        subject to equitable adjustment in accordance with the Changes article.

        Exercise of any option hereunder will be by change notice hereto or by
        separate contract.

        It is further mutually agreed and understood that Buyer is under no
        obligation whatsoever to exercise the above option and that no
        representations have been made by committing to the exercise of any
        option hereunder, and that Buyer may procure any additional requirements
        elsewhere.

        Buyer and Subcontractor agree that Buyer's option exercise dates (s) are
        contingent upon exercise by Buyer's customer of options in its contract
        with the Buyer. Delay in the customer's exercise of any option will, in
        turn, delay the exercise of the related option in this order on a
        day-for-day basis, until such time as the Buyer's contract option is
        exercised.

VI.     TARGET COST, AWARD FEE, AND AWARD FEE PLAN - LINE ITEM 2: DBV (Baseline)

        Subject to the Form GP-4 Provision entitled "Allowable Cost and Payment
        -- FAR 52.216-7", the Subcontractor shall be compensated for performance
        of Line Item 02, DVB (Baseline) as follows:

<TABLE>
        <S>                                 <C>
        Target Cost                         $273,425,496
        Target Cost-of-Money                $813,483
        Award Fee @ 15%                     $41,013,824
                                            -----------
                                            $315,252,803
</TABLE>

        As established in the enclosed Award Fee Plan, dated 3-29-02 (Exhibit
        E), the award amount and the award fee determination methodology are
        unilateral decisions made solely at the discretion of Boeing.

VII.    FUNDING

        A.      Of the total estimated price of this subcontract of $333,954,177
                the following maximum amounts are available for payment and
                allotted to this subcontract.

<TABLE>
                      <S>                                         <C>
                      Line Item 01 Taurus Lite:                    $11,231,432
                      Line Item 02 DBV Program (Baseline):         $23,298,626
                      Line Item 03 Test Bed:                       $ 6,837,904
                                                                   -----------
                      Total Funding Limitation:                    $41,367,962
</TABLE>

        B.      The total estimated price set forth in Paragraph A for the DBV
                Program above will cover the work to be performed through the
                period ending 31 March 2007.

        C.      Notwithstanding any other provision of this subcontract, all
                payments to the Subcontractor shall be subject to the funding
                limitation as set forth in Paragraph A. above, and in accordance
                with Exhibit A, Form GP-4 Clause 11 entitled "Limitation of
                Funds".

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

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

        D.      Upon issuance by Boeing to the Subcontractor of a subcontract
                change notice signed by an authorized agent of Boeing, the
                expenditure limitation specified above as Boeing's maximum
                liability shall be deemed to be adjusted in accordance with said
                Change Notice for the continued performance of the work
                specified in Exhibit B.

        E.      Notwithstanding potential termination liability amounts reported
                by Seller to Buyer, pursuant to the Limitation of Funds
                provisions of this Subcontract, Seller shall fully utilize the
                funding released by Buyer, for performance of the requirements
                under this subcontract. Seller shall not reserve or withhold
                from its expenditures, any funding that represents potential
                termination costs. In the event that this Subcontract is
                terminated for convenience pursuant to the Termination clause of
                this subcontract, Buyer shall remain liable to Seller for
                termination costs in accordance with the provisions of the
                Termination clause hereof.

VIII.   GOVERNMENT PROPERTY

        A list of the current GFP is located in Exhibit "F" titled GFP Listing.
        Additional Government Furnished Property is subject to definitization by
        the government.

IX.     PRINCIPAL PLACE OF PERFORMANCE

        The principal place of performance of this subcontract shall be at the
        Subcontractor's site located in Chandler, Arizona.

X.      APPLICABLE LAW

        This subcontract shall be governed and construed according to the laws
        of the State of California.

XI.     INVOICE PAYMENT REQUIREMENTS

        Payments. Payments are made from "original" invoices only. Fax copies,
        copies of invoices or statements will not be accepted. "duplicate
        original" invoices must not be sent without prior authorization from
        either your purchasing agent or accounts payable. Duplicate original
        invoices, altered invoices or computer prints of invoices not on your
        company letterhead must be signed and dated with full signature of the
        appropriate manager in your company. Initials will not be accepted.
        Third party billing is not allowed.

        Payment Terms. Determination of payment due date, whether under net or
        discount terms, will be based on the latest of (i) the date goods are
        received or services performed; (ii) the date provided in this contract
        for receipt of goods or completion of services; (iii) the date an
        accurate invoice is received in accounts payable. Payments are not
        scheduled upon the date of your invoice. Payment will be deemed to have
        been made when deposited in the mail.

        Invoice mailing information. Invoices are to be mailed to:

                The Boeing Company
                Accounts Payable
                P.O. Box 66956, Mail Code S276-1371
                St. Louis, MO 63166-6956

                Attention: Carolyn Washington

                Phone: (314) 232-8455         Fax: (314) 232-8846

                Invoices sent to any other address or to buyers may
                delay your payment.

        A copy of invoices will be mailed to:

                The Boeing Company
                3370 Miraloma Ave.
                Anaheim, CA 92803-3105
                Attention: Connie Kama M/C GG-16

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

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

        Prepaid freight charges. When prepaid freight charges are authorized by
        your procurement agent, include a copy of each freight bill with the
        invoice if total charges exceed $100.00. Freight charges over $100.00
        require approval from Boeing traffic prior to payment and will be
        deducted from your invoice payment. It is not necessary to re-invoice.
        When the approval has been received, an additional check will be issued
        for the approval freight charge.

        Invoice requirements. All invoices must contain the following
        information:

        1.  The name and address of the supplier, which must match the name, and
            address on the purchase contract.

        2.  Invoice number.

        3.  Invoice date.

        4.  Boeing purchase contract number. Only one purchase contract number
            per invoice.

        5.  Boeing purchase contract line item number(s) and description of item
            ordered (Boeing part number).

        6.  Quantity invoiced, which must equal quantity, shipped and cannot
            exceed quantity ordered.

        7.  Unit of measure. If the invoice-billing unit of measure is different
            than the purchase contract order unit of measure, both units of
            measure must be included on the invoice.

        8.  Unit price, which must agree with the purchase contract unit price.
            If the invoice billing unit price is different than the purchase
            contract unit price, both unit prices must be included on the
            invoice.

        9.  Extended unit price. Each Boeing purchase contract line item must be
            subtotaled individually before tax, freight or any additional
            charges are listed. Each invoice must have a grand total, which
            includes all charges.

        10. Payment terms, which must agree with the purchase contract payment
            terms.

        11. Shipping information, which includes shipment number, date of
            shipment and freight carrier.

        12. Name and address where invoice payment is to be mailed. Name must
            agree with the purchase contract name.

        13. Name, title, phone/fax number and mailing address of person to be
            notified in event of a defective invoice.

        The purchase contract is the sole basis for your payment. Incorrect
        invoices will be returned unpaid. Accounts payable cannot authorize or
        negotiate any changes to the purchase contract. Please contact your
        procurement agent directly to resolve invoice discrepancies.

        Payment inquiries. Accounts payable checks are generated twice a week.
        Checks are prepared and mailed each Tuesday and Thursday.

        Inquiries on past due invoices (aged 45 days from invoice date) or
        payment problems may be faxed directly to accounts payable, fax number
        314-232-8846. A copy of the invoice in question should be annotated with
        the specific problem.

        Identification: For accounting purposes all invoices submitted by the
        Subcontractor shall note: Subcontract Number 101018. Prime Contract
        HQ0006-01-C-0001, and Cost Charge Number VHA10093.

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

<PAGE>

--------------------------------------------------------------------------------
 ITEM                 CONTINUATION SHEET        SUBCONTRACT NO.    PAGE NO.
  NO.
                                                    101018            8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

XII.    PRIORITY

        The priority rating for this subcontract is DX-C9. This is a rated order
        certified for national defense use, and you are required to follow all
        of the provisions of the Defense Priorities and Allocation System
        regulation (15 CFR Part 700). Pursuant to the Defense Priorities and
        Allocations System regulation, you are required to acknowledge this
        order in writing within ten working days after receipt of a "DO" rated
        order and within five working days after receipt of a "DX" rated order.

XIII.   SECURITY REQUIREMENTS

        The security requirements applicable to this subcontract are set forth
        in the DD Form 254, Contract Security Classification Specification,
        Exhibit D, attached hereto and made a part hereof.

XIV.    RELATIONSHIP WITH SUBCONTRACTOR

        The Subcontractor shall, at the request of Buyer, arrange and conduct
        meetings at the Subcontractor's or lower-tier supplier's or
        subcontractor's facilities with Buyer and Government personnel in
        attendance. Buyer may request such meetings to review in-process work,
        investigate problem areas or activities critical to program schedules,
        or to witness or review test activities.

XV.     ALABAMA TAX EXEMPTION

        The items and/or services purchased hereunder are for resale to the U.S.
        Government and are exempt from taxation per Certificate Number 6800
        04598.

XVI.    ORDER OF PRECEDENCE

        In the event of any inconsistency between the provisions of this
        subcontract, the inconsistency shall be resolved by giving precedence in
        the following order:

            (a) Schedule

            (b) General Provisions

            (c) Statements of Work

            (d) Other documents incorporated by reference

 XVII.  SUBCONTRACTOR RESPONSIBILITY

        Notwithstanding the right of Buyer to review the Subcontractor's efforts
        and progress, drawings, specifications, plans, data items, etc., as
        required by this subcontract, and to provide certain approvals as
        required by this subcontract, it is expressly understood that any such
        reviews and/or approvals shall in no manner relieve the Subcontractor
        from meeting any and all requirements of this subcontract.

--------------------------------------------------------------------------------exv4w1

 

EXHIBIT 4.1

[FORM OF INDENTURE]

MGE ENERGY, INC.

AND

BANK ONE TRUST COMPANY, N.A., as Trustee

INDENTURE

Dated as of [                                    ], 2003

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	PAGE
	 	 	 	 	 	 	 	 	 	 	 	 	

	ARTICLE I	 	 	 	 	 	DEFINITIONS
	 	 	1	 
	 	 	 	 	SECTION 1.1	 	 	 	General
	 	 	1	 
	 	 	 	 	SECTION 1.2	 	 	 	TIA
	 	 	1	 
	 	 	 	 	SECTION 1.3	 	 	 	Other Definitions
	 	 	2	 
	ARTICLE II	 	 	 	 	 	FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
	 	 	19	 
	 	 	 	 	SECTION 2.1	 	 	 	Form Generally
	 	 	19	 
	 	 	 	 	SECTION 2.2	 	 	 	Form of Trustee’s Certificate of Authentication
	 	 	20	 
	 	 	 	 	SECTION 2.3	 	 	 	Amount Unlimited
	 	 	20	 
	 	 	 	 	SECTION 2.4	 	 	 	Denominations, Dates, Interest Payment and Record Dates
	 	 	20	 
	 	 	 	 	SECTION 2.5	 	 	 	Execution, Authentication, Delivery and Dating
	 	 	22	 
	 	 	 	 	SECTION 2.6	 	 	 	Exchange and Registration of Transfer of Notes
	 	 	24	 
	 	 	 	 	SECTION 2.7	 	 	 	Mutilated, Destroyed, Lost or Stolen Notes
	 	 	24	 
	 	 	 	 	SECTION 2.8	 	 	 	Temporary Notes
	 	 	25	 
	 	 	 	 	SECTION 2.9	 	 	 	Cancellation of Notes Paid, etc
	 	 	26	 
	 	 	 	 	SECTION 2.10	 	 	 	Interest Rights Preserved
	 	 	26	 
	 	 	 	 	SECTION 2.11	 	 	 	Payment of Notes
	 	 	26	 
	 	 	 	 	SECTION 2.12	 	 	 	Notes Issuable in the Form of a Global Note
	 	 	27	 
	 	 	 	 	SECTION 2.13	 	 	 	CUSIP Numbers
	 	 	29	 
	ARTICLE III	 	 	 	 	 	REDEMPTION OF NOTES; REPAYMENT PRIOR TO STATED MATURITY
	 	 	29	 
	 	 	 	 	SECTION 3.1	 	 	 	Applicability of Redemption Provisions
	 	 	29	 
	 	 	 	 	SECTION 3.2	 	 	 	Notice of Redemption; Selection of Notes
	 	 	29	 
	 	 	 	 	SECTION 3.3	 	 	 	Payment of Notes on Redemption; Deposit of Redemption Price
	 	 	30	 
	 	 	 	 	SECTION 3.4	 	 	 	Repayment at the Option of the Holder
	 	 	31	 
	 	 	 	 	SECTION 3.5	 	 	 	Extension
	 	 	32	 
	 	 	 	 	SECTION 3.6	 	 	 	Reset Notes
	 	 	33	 
	ARTICLE IV	 	 	 	 	 	SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS
	 	 	34	 
	 	 	 	 	SECTION 4.1	 	 	 	Satisfaction and Discharge
	 	 	34	 
	 	 	 	 	SECTION 4.2	 	 	 	Deposited Moneys to Be Held in Trust by Trustee
	 	 	35	 
	 	 	 	 	SECTION 4.3	 	 	 	Return of Unclaimed Moneys
	 	 	35	 
	 	 	 	 	SECTION 4.4	 	 	 	Reinstatement
	 	 	36	 
	ARTICLE V	 	 	 	 	 	PARTICULAR COVENANTS OF THE COMPANY
	 	 	36	 
	 	 	 	 	SECTION 5.1	 	 	 	Payment of Principal, Premium and Interest
	 	 	36	 
	 	 	 	 	SECTION 5.2	 	 	 	Office for Notices and Payments, etc
	 	 	36	 
	 	 	 	 	SECTION 5.3	 	 	 	Appointments to Fill Vacancies in Trustee’s Office
	 	 	37	 
	 	 	 	 	SECTION 5.4	 	 	 	Annual Statement and Notice
	 	 	37	 
	 	 	 	 	SECTION 5.5	 	 	 	Corporate Existence
	 	 	37	 
	 	 	 	 	SECTION 5.6	 	 	 	Limitation Upon Mortgages and Liens
	 	 	37	 
	 	 	 	 	SECTION 5.7	 	 	 	Waiver of Certain Covenants
	 	 	38	 
	ARTICLE VI	 	 	 	 	 	NOTEHOLDER LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
	 	 	38	 
	 	 	 	 	SECTION 6.1	 	 	 	Noteholder Lists
	 	 	38	 
	 	 	 	 	SECTION 6.2	 	 	 	Securities and Exchange Commission Reports
	 	 	38	 
	 	 	 	 	SECTION 6.3	 	 	 	Reports by the Trustee
	 	 	38	 
	ARTICLE VII	 	 	 	 	 	REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON EVENT OF DEFAULT
	 	 	39	 
	 	 	 	 	SECTION 7.1	 	 	 	Events of Default
	 	 	39	 
	 	 	 	 	SECTION 7.2	 	 	 	Acceleration of Maturity; Rescission and Annulment
	 	 	40	 
	 	 	 	 	SECTION 7.3	 	 	 	Collection and Suits for Enforcement by Trustee
	 	 	41	 
	 	 	 	 	SECTION 7.4	 	 	 	Trustee May File Proofs of Claim
	 	 	42	 

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	 	 	 	 	 	 	 	 	 	 	 	 	PAGE
	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	SECTION 7.5	 	 	 	Trustee May Enforce Claims Without Possession of Notes
	 	 	42	 
	 	 	 	 	SECTION 7.6	 	 	 	Application of Moneys Collected by Trustee
	 	 	43	 
	 	 	 	 	SECTION 7.7	 	 	 	Proceedings by Noteholders
	 	 	43	 
	 	 	 	 	SECTION 7.8	 	 	 	Proceedings by Trustee
	 	 	44	 
	 	 	 	 	SECTION 7.9	 	 	 	Remedies Cumulative and Continuing
	 	 	44	 
	 	 	 	 	SECTION 7.10	 	 	 	Restoration of Rights and Remedies
	 	 	44	 
	 	 	 	 	SECTION 7.11	 	 	 	Direction of Proceedings and Waiver of Defaults by Majority Noteholders
	 	 	45	 
	 	 	 	 	SECTION 7.12	 	 	 	Notice of Default
	 	 	45	 
	 	 	 	 	SECTION 7.13	 	 	 	Undertaking to Pay Costs
	 	 	45	 
	ARTICLE VIII	 	 	 	 	 	CONCERNING THE TRUSTEE
	 	 	46	 
	 	 	 	 	SECTION 8.1	 	 	 	Certain Duties and Responsibilities
	 	 	46	 
	 	 	 	 	SECTION 8.2	 	 	 	Notice of Defaults
	 	 	47	 
	 	 	 	 	SECTION 8.3	 	 	 	Certain Rights of Trustee
	 	 	47	 
	 	 	 	 	SECTION 8.4	 	 	 	Not Responsible for Recitals or Issuance of Notes
	 	 	48	 
	 	 	 	 	SECTION 8.5	 	 	 	May Hold Notes
	 	 	48	 
	 	 	 	 	SECTION 8.6	 	 	 	Money Held in Trust
	 	 	49	 
	 	 	 	 	SECTION 8.7	 	 	 	Compensation and Reimbursement
	 	 	49	 
	 	 	 	 	SECTION 8.8	 	 	 	Disqualification; Conflicting Interests
	 	 	49	 
	 	 	 	 	SECTION 8.9	 	 	 	Corporate Trustee Required; Eligibility
	 	 	54	 
	 	 	 	 	SECTION 8.10	 	 	 	Resignation and Removal; Appointment of Successor
	 	 	54	 
	 	 	 	 	SECTION 8.11	 	 	 	Acceptance of Appointment by Successor
	 	 	55	 
	 	 	 	 	SECTION 8.12	 	 	 	Merger, Conversion, Consolidation or Succession to Business
	 	 	55	 
	 	 	 	 	SECTION 8.13	 	 	 	Preferential Collection of Claims Against Company
	 	 	56	 
	 	 	 	 	SECTION 8.14	 	 	 	Appointment of Authenticating Agent
	 	 	59	 
	ARTICLE IX	 	 	 	 	 	 	CONCERNING THE NOTEHOLDERS
	 	 	61	 
	 	 	 	 	SECTION 9.1	 	 	 	Action by Noteholders
	 	 	61	 
	 	 	 	 	SECTION 9.2	 	 	 	Proof of Execution by Noteholders
	 	 	61	 
	 	 	 	 	SECTION 9.3	 	 	 	Who Deemed Absolute Owners
	 	 	61	 
	 	 	 	 	SECTION 9.4	 	 	 	Company-Owned Notes Disregarded
	 	 	62	 
	 	 	 	 	SECTION 9.5	 	 	 	Revocation of Consents; Future Holders Bound
	 	 	62	 
	 	 	 	 	SECTION 9.6	 	 	 	Record Date for Noteholder Acts
	 	 	62	 
	ARTICLE X	 	 	 	 	 	 	NOTEHOLDERS’ MEETING
	 	 	63	 
	 	 	 	 	SECTION 10.1	 	 	 	Purposes of Meetings
	 	 	63	 
	 	 	 	 	SECTION 10.2	 	 	 	Call of Meetings by Trustee
	 	 	63	 
	 	 	 	 	SECTION 10.3	 	 	 	Call of Meetings by Company or Noteholders
	 	 	63	 
	 	 	 	 	SECTION 10.4	 	 	 	Qualifications for Voting
	 	 	63	 
	 	 	 	 	SECTION 10.5	 	 	 	Regulations
	 	 	64	 
	 	 	 	 	SECTION 10.6	 	 	 	Voting
	 	 	64	 
	 	 	 	 	SECTION 10.7	 	 	 	Right of Trustee or Noteholders not Delayed
	 	 	65	 
	ARTICLE XI	 	 	 	 	 	 	CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	65	 
	 	 	 	 	SECTION 11.1	 	 	 	Company May Consolidate, etc., only on Certain Terms
	 	 	65	 
	 	 	 	 	SECTION 11.2	 	 	 	Successor Corporation Substituted
	 	 	66	 
	ARTICLE XII	 	 	 	 	 	 	SUPPLEMENTAL INDENTURES
	 	 	66	 
	 	 	 	 	SECTION 12.1	 	 	 	Supplemental Indentures without Consent of Noteholders
	 	 	66	 
	 	 	 	 	SECTION 12.2	 	 	 	Supplemental Indentures with Consent of Noteholders
	 	 	67	 
	 	 	 	 	SECTION 12.3	 	 	 	Compliance with Trust Indenture Act; Effect of Supplemental Indentures
	 	 	68	 
	 	 	 	 	SECTION 12.4	 	 	 	Notation on Notes
	 	 	68	 
	 	 	 	 	SECTION 12.5	 	 	 	Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee
	 	 	69	 

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	 	 	 	 	 	 	 	 	 	 	 	 	PAGE
	 	 	 	 	 	 	 	 	 	 	 	 	

	ARTICLE XIII	 	 	 	 	 	 	IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
	 	 	70	 
	 	 	 	 	SECTION 13.1	 	 	 	Indenture and Notes Solely Corporate Obligations
	 	 	70	 
	ARTICLE XIV	 	 	 	 	 	 	MISCELLANEOUS PROVISIONS
	 	 	70	 
	 	 	 	 	SECTION 14.1	 	 	 	Provisions Binding on Company’s Successors
	 	 	70	 
	 	 	 	 	SECTION 14.2	 	 	 	Official Acts by Successor Corporation
	 	 	70	 
	 	 	 	 	SECTION 14.3	 	 	 	Addresses for Notices, etc
	 	 	70	 
	 	 	 	 	SECTION 14.4	 	 	 	Governing Law
	 	 	71	 
	 	 	 	 	SECTION 14.5	 	 	 	Evidence of Compliance with Conditions Precedent
	 	 	71	 
	 	 	 	 	SECTION 14.6	 	 	 	Business Days
	 	 	72	 
	 	 	 	 	SECTION 14.7	 	 	 	Trust Indenture Act to Control
	 	 	72	 
	 	 	 	 	SECTION 14.8	 	 	 	Table of Contents, Headings, etc
	 	 	72	 
	 	 	 	 	SECTION 14.9	 	 	 	Execution in Counterparts
	 	 	72	 
	 	 	 	 	SECTION 14.10	 	 	 	Manner of Mailing Notice to Noteholders
	 	 	72	 
	EXHIBIT A	 	 	 	 	 	 	Global Fixed Rate Note
	 	 	 	 
	EXHIBIT B	 	 	 	 	 	 	Fixed Rate Note
	 	 	 	 
	EXHIBIT C	 	 	 	 	 	 	Global Floating Rate Note
	 	 	 	 
	EXHIBIT D	 	 	 	 	 	 	Floating Rate Note
	 	 	 	 

iii

 

TIE-SHEET

of provisions of Trust Indenture Act of 1939 with Indenture dated as of [
            ], 2003, between MGE Energy, Inc. and Bank One Trust Company, N.A., as
trustee.

	 	 	 	 	 
	Section of Act	 	Section of Indenture
	
	 	

	310(a)(1) and (2)
	 	 	9.9	 
	310(a)(3) and (4)
	 	Not applicable
	310(a)(5)
	 	 	9.8	 
	310(b)
	 	9.8 and 9.10
	310(c)
	 	Not applicable
	311(a) and (b)
	 	 	9.l3	 
	311(c)
	 	Not applicable
	312(a)
	 	 	7.1	 
	312(b) and (c)
	 	 	7.1	 
	313(a)
	 	 	7.3	 
	313(b)(1)
	 	Not applicable
	313(b)(2)
	 	 	7.3	 
	313(c)
	 	 	7.3	 
	313(d)
	 	 	7.3	 
	314(a)
	 	 	6.4, 7.2	 
	314(b)
	 	Not applicable
	314(c)(1) and (2)
	 	 	15.5	 
	314(c)(3)
	 	Not applicable
	314(d)
	 	Not applicable
	314(e)
	 	 	15.5	 
	314(f)
	 	Not applicable
	315(a), (c) and (d)
	 	 	9.1	 
	315(b)
	 	8.12; 9.2
	315(e)
	 	 	8.13	 
	316(a)(1)
	 	8.1 and 8.11
	316(a)(2)
	 	Omitted
	316(a) last sentence
	 	 	10.4	 
	316(b)
	 	 	8.7	 
	316(c)
	 	 	10.6	 
	317(a)(1)
	 	 	8.3	 
	317(a)(2)
	 	 	8.4	 
	317(b)
	 	Omitted
	318(a)
	 	 	15.7	 

	 	 	This tie-sheet does not constitute a part of the Indenture.

 

     THIS INDENTURE, dated as of [                        ], 2003, between MGE Energy, Inc., a
corporation duly organized and existing under the laws of the State of
Wisconsin (hereinafter sometimes called the “Company”), and Bank One Trust
Company, N.A., a national banking association organized and existing under the
laws of the United States of America, as trustee (hereinafter called the
“Trustee”).

WITNESSETH:

     WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for to from
time to time of its Medium-Term Notes (hereinafter sometimes called “Notes”),
to be issued as in this Indenture provided;

     AND WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized;

     NOW THEREFORE, THIS INDENTURE WITNESSETH:

     That in order to declare the terms and conditions upon which the Notes
are, and are to be authenticated, issued and delivered, and in consideration of
the premises, of the purchase and acceptance of the Notes by the Holders
thereof and of the sum of one dollar duly paid to it by the Trustee at the
execution of these presents, the receipt whereof is hereby acknowledged, the
Company covenants and agrees with the Trustee for the equal and proportionate
benefit of the respective Holders from time to time of the Notes, as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1 General.

     The terms defined in this Article I (except as herein otherwise expressly
provided or unless the context otherwise requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Article I.

     SECTION 1.2 TIA.

     (a)  Whenever this Indenture refers to a provision of the Trust Indenture
Act of 1939, as amended (“TIA”), such provision is incorporated by reference in
and made a part of this Indenture. The following TIA terms incorporated in
this Indenture have the following meanings:

     "indenture securities” means the Notes.

     "indenture note holder” means a Noteholder or a Holder.

     "indenture to be qualified” means this Indenture.

     "indenture trustee” or “institutional trustee” means the Trustee.

 

 

     "obligor” on the indenture securities means the Company.

     (b)  All terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by a rule of the Securities and
Exchange Commission have the meanings assigned to them in the TIA or such
statute or rule as in force on the date of execution of this Indenture.

     SECTION 1.3 Other Definitions.

     For purposes of this Indenture, the following terms have the following
meanings:

     "Accrued Interest”: The term “Accrued Interest” at any Interest Payment
Date (a) for a Floating Rate Note shall mean the amount obtained by multiplying
the principal amount of such Floating Rate Note by its Accrued Interest Factor,
and (b) for a Fixed Rate Note, shall mean the amount obtained by multiplying
the principal amount of such Fixed Rate Note by its Interest Rate, and
multiplying the product thus obtained by a fraction, the numerator of which is
the number of days in the Interest Reset Period for such Note ending on such
Interest Payment Date based on a 360-day year of twelve 30-day months, and the
denominator of which is 360.

     "Accrued Interest Factor”: The term “Accrued Interest Factor” at any
Interest Payment Date for a Floating Rate Note shall mean the sum of the
Interest Factors for such Floating Rate Note calculated for each day in the
Interest Reset Period for such Note ending on such Interest Payment Date or the
prior Record Date, as the case may be.

     "Amortized Face Amount”: The term “Amortized Face Amount” of an Original
Issue Discount Note as of the date that (i) the principal amount of such Note
is to be repaid prior to its Stated Maturity, whether upon declaration of
acceleration, call for redemption, repayment at the option of the Holder or
otherwise, or (ii) any consent, notice, request, direction, waiver or suit by
the Noteholders shall be deemed to be given, made or commenced under this
Indenture, shall mean the principal amount of such Note multiplied by its issue
Price plus the portion of the difference between the dollar amount thus
obtained and the principal amount of such Note that has accreted at the Yield
to Maturity of such Note (computed in accordance with generally accepted United
States bond yield computation principles) to such date, but in no event shall
the Amortized Face Amount of an Original Issue Discount Note exceed its
principal amount stated in the applicable Company Order.

     "Amortizing Note”: The term “Amortizing Note” shall mean a Note for which
payments of principal of and interest on such Note are made in installments
over the life of such Note, and unless otherwise specified in the applicable
Company Order, payments with respect to an Amortizing Note shall be applied
first to interest due and payable thereon and then to the reduction of the
unpaid principal amount thereof.

     "Authenticating Agent”: The term “Authenticating Agent” shall mean the
agent of the Trustee which shall be appointed and acting pursuant to Section
8.14.

     "Authorized Agent”: The term “Authorized Agent” shall mean an agent of
the Company designated by an Officers’ Certificate to give to the Trustee the
information specified in clause (a) of “Company Order” for the issuance of a
Note.

2

 

     "Authorized Newspaper”: The term “Authorized Newspaper” shall mean a
newspaper of general circulation in the relevant area, printed in the English
language and customarily published on each Business Day; whenever successive
publications in an Authorized Newspaper are required by this Indenture, such
publications may be made on the same or different days and in the same or in
different Authorized Newspapers.

     "Basis Point”: The term “Basis Point” shall mean one-one hundredth of a
percentage point.

     "Board of Directors”: The term “Board of Directors” shall mean the Board
of Directors of the Company or the Executive Committee of such Board or any
other duly authorized Committee of such Board.

     "Board Resolution”: The term “Board Resolution” shall mean a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.

     "Bond Indenture”: The term “Bond Indenture” shall mean the Indenture of
Mortgage and Deed of Trust dated as of January 1, 1946, from MGE to First
Wisconsin Trust Company (now known as U.S. Bank Trust Company), trustee.

     "Business Day”: The term “Business Day” shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday that in The City of New York, is not a day on
which banking institutions are authorized or obligated by law, regulation or
executive order to close and, with respect to LIBOR Notes, is also a London
Business Day, unless otherwise specified in the applicable Company Order.

     "Calculation Agent”: The term “Calculation Agent” for a particular
Floating Rate Note shall mean the Trustee, unless otherwise specified in the
applicable Company Order.

     "Calculation Date”: The term “Calculation Date” shall mean with regard to
any particular Interest Determination Date, the earlier of (i) the tenth
calendar day after such Interest Determination Date, or, if any such day is not
a Business Day, the next day that is a Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity, as the
case may be.

     "Commercial Paper Rate”: The term “Commercial Paper Rate” for a
particular Floating Rate Note, unless otherwise indicated in the applicable
Company Order, shall mean, with respect to any Commercial Paper Rate Interest
Determination Date, the Money Market Yield on such date of the rate for
commercial paper having the Index Maturity specified in such Company Order, as
such rate shall be published in H.l5(5l9) under the heading “Commercial Paper”.
In the event that such rate is not published prior to 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Commercial Paper Rate Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield on such Commercial Paper Rate Interest Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading “Commercial Paper”. If by 3:00 P.M., New York
City time, on such Calculation Date such rate is not published in either

3

 

 H.l5(5l9) or Composite Quotations, then the Commercial Paper Rate for such
Commercial Paper Rate Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean of
the offered rates (quoted on a bank discount basis) as of 11:00 A.M., New York
City time, on such Commercial Paper Rate Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the specified Index Maturity placed
for an industrial issuer whose bond rating is “AA”, or the equivalent, from a
nationally recognized rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as set forth
above, the Commercial Paper Rate will be the Commercial Paper Rate immediately
prior to such Commercial Paper Rate Interest Determination Date.

     "Commercial Paper Rate Interest Determination Date”: The term “Commercial
Paper Rate Interest Determination Date” pertaining to an Interest Reset Date
for a Commercial Paper Rate Note shall mean the second Business Day immediately
preceding such Interest Reset Date, unless otherwise specified in the
applicable Company Order.

     "Commercial Paper Rate Notes”: The term “Commercial Paper Rate Notes”
shall mean Floating Rate Notes which are specified in the applicable Company
Order as bearing interest at an interest rate calculated with reference to the
Commercial Paper Rate.

     "Common Shareholders Equity”: The term “Common Shareholders Equity” shall
mean, at any time, the total shareholders’ equity of the Company and its
consolidated subsidiaries, determined on a consolidated basis in accordance
with generally accepted accounting principles, as of the end of the most
recently completed fiscal quarter of the Company for which financial
information is then available.

     "Company”: The term “Company” shall mean the corporation named as the
“Company” in the first paragraph of this Indenture, and its successors and
assigns.

     "Company Order”: The term “Company Order” shall mean:

     (a)  a written order signed in the name of the Company by the Chairman of
the Board, the President or any Vice President and by the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee, to
authenticate a Note and to make it available for delivery, and specifying for
such Note the following information:

		
	 	     (i) the name of the Person in which a Note to be issued and
authenticated shall be registered;
	 
	 	     (ii) the address of such Person;
	 
	 	     (iii) the taxpayer identification number of such Person;
	 
	 	     (iv) the principal amount of such Note and, if multiple Notes are to
be issued to such Person, the denominations of such Notes;
	 
	 	     (v) the Issue Price of such Note;

4

 

		
	 	     (vi) the Original Issue Date of such Note;
	 
	 	     (vii) the date upon which such Note is scheduled to mature, any
Extension Period or Extension Periods, the Final Maturity Date and any
procedures pursuant to which the Holder of such Note may renew such Note;
	 
	 	     (viii) if the Note is to be redeemable at the option of the Company,
the Initial Redemption Date and the date or dates on which, and the price
or prices at which, such Note is redeemable at the option of the Company;
	 
	 	     (ix) if the Note is to be repayable prior to Stated Maturity at the
option of the Holder, the date or dates on which, and the price or prices
at which, such Note is repayable at the option of the Holder;
	 
	 	     (x) if the Note is a Fixed Rate Note, the rate of interest on such
Note and the Interest Payment Dates, if other than January 15 and July
15, and the Record Dates, if other than January 1 and July 1;
	 
	 	     (xi) if the Note is an Original Issue Discount Note, its Yield to
Maturity;
	 
	 	     (xii) if such Note is an Amortizing Note, a table setting forth the
schedule of dates and amounts of payments of principal of and interest on
such Note or the formula for the amortization of principal and/or
interest;
	 
	 	     (xiii) if the Note is a Reset Note, the Optional Interest Reset Date
and the formula, if any, for resetting the interest rate of a Fixed Rate
Note or the Spread and/or Spread Multiplier of a Floating Rate Note;
	 
	 	     (xiv) if the Note is a Floating Rate Note, its:

	 	 	 
	(A) Initial Interest Rate	 	
(F) Interest Reset Dates
	(B) Interest Rate Basis or Base Rate (including

      any Designated LIBOR Page)	 	
(G) Spread
(H) Spread Multiplier
	(C) Index Maturity	 	(I) Maximum Interest Rate 
	(D) Interest Determination Dates	 	(J) Minimum Interest Rate

	(E) Interest Reset Period	 	(K) Interest Payment Dates

	 	 	(L) Record Dates

	 	 	

		
	 	     (xv) whether or not such Note is to be issued in the form of a
Global Note to the Depositary;
	 
	 	     (xvi) the name and address of the Calculation Agent, if other than
the Trustee;
	 
	 	     (xvii) if other than denominations of $1,000 and integral multiples
thereof, the authorized denominations in which Notes shall be issued; and
	 
	 	     (xviii) all other information necessary for the issuance of such
Note not inconsistent with the provisions of this Indenture; or

5

 

     (b)  confirmation given to the Trustee by an officer of the Company
designated by an Officers’ Certificate, by telephone, confirmed by telex or
facsimile or similar writing, of the information given to the Trustee by an
Authorized Agent for the issuance of a Note, and the written order of the
Company to authenticate such Note and to make it available for delivery.

     "Composite Quotations”: The term “Composite Quotations” shall mean the
daily statistical release “Composite 3:30 P.M. Quotations for U.S. Government
Securities” or any successor publication published by the Federal Reserve Bank
of New York.

     "Corporate Trust Office of the Trustee”: The term “Corporate Trust Office
of the Trustee” (or other similar term) shall mean the principal office of the
Trustee at which at any particular time this Indenture shall be administered,
which office at the date of original execution of this Indenture is located at
1 Bank One Plaza, Suite IL1-0823, Chicago, Illinois 60670-0823, Attention:
Corporate Trust Administration, except that, with respect to presentation of
the Notes for payment or registration of transfers or exchanges, such term
means the office of the Trustee located at 55 Water Street, 1st Floor, Jeanette
Park Entrance, New York, New York 10041.

     "CUSIP”: The term “CUSIP” shall mean the registered trademark “Committee
on Uniform Securities Identification Procedures” or “CUSIP” and a unique system
of identification of each public issue of a security owned by the American
Bankers Association and administered by Standard and Poor’s Corporation, as
agent of the American Bankers Association.

     "Depositary”: The term “Depositary” shall mean, unless otherwise
specified by the Company pursuant to Section 2.5 hereof, The Depository Trust
Company, New York, New York, or any successor thereto registered as a Clearing
Agency under the Securities and Exchange Act of 1934, as amended, or any
successor statute or regulation.

     "Designated LIBOR Page”: The term “Designated LIBOR Page” shall mean
either (a) the display on the Reuters Monitor Money Rates Service for the
purpose of displaying the London interbank rates of major banks for United
States Dollars (if “LIBOR Reuters” is specified in the applicable Company
Order), or (b) the display on the Dow Jones Telerate Service for the purpose of
displaying the London interbank rates of major banks for United States dollars
(if “LIBOR Telerate” is specified in the applicable Company Order). If neither
LIBOR Reuters nor LIBOR Telerate is specified in the applicable Company Order,
LIBOR for United States dollars will be determined as if LIBOR Telerate (and
page 3750) had been chosen.

     "Discharged”: The term “Discharged” means, with respect to all Notes at
the time outstanding, that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, all
Notes and to have satisfied all the obligations under the Indenture relating to
such Notes except (i) the rights of Holders of such Notes to receive, from the
trust fund provided for under Sections 4.1 and 4.2, payment of the principal of
(and premium, if any) and interest on such Notes when such payments are due,
(ii) the Company’s obligations with respect to such Notes under Sections 2.6,
2.7 and 5.2 and (iii) the rights, powers, trusts, duties and immunities of the
Trustee under the Indenture.

6

 

     "Event of Default”: The term “Event of Default” shall mean any event
specified in Section 7.1, continued for the period of time, if any, and after
the giving of the notice, if any, therein designated.

     "Extension Notice”: The term “Extension Notice” shall mean a notice sent
by the Trustee by telegram, telex, facsimile transmission, hand delivery or
letter (first class, postage prepaid) to the Holder of a Note with respect to
which the Company has exercised its option to extend the Stated Maturity,
indicating (i) that the Company has elected to extend the Stated Maturity of
such Note, (ii) the new Stated Maturity, (iii) in the case of a Fixed Rate
Note, the interest rate applicable to the Extension Period or, in the case of a
Floating Rate Note, the Spread and/or Spread Multiplier applicable to the
Extension Period, and (iv) any provisions for redemption of such Note during
the Extension Period, including the date or dates on which or the period or
periods during which and the price or prices at which such redemption may occur
during the Extension Period.

     "Extension Period”: The term “Extension Period” shall mean a period of
from one to five whole years for which the Company may, at its option, extend
the Stated Maturity of a particular Note.

     "Fixed Rate Note”: The term “Fixed Rate Note” shall mean a Note issued
hereunder that bears an annual fixed rate of interest during the period
specified in the Note, as set forth in the Company Order or supplemental
indenture related thereto.

     "Floating Rate Note”: The term “Floating Rate Note” shall mean a Note
issued hereunder that bears interest at a rate calculated by reference to the
interest rate formula specified in the Company Order or supplemental indenture
related thereto, and which may be a Commercial Paper Rate Note, a LIBOR Note or
a Prime Rate Note.

     "Indebtedness”: The term “Indebtedness” shall mean with respect to any
Person (i) any liability of such Person (a) for borrowed money, or (b)
evidenced by a bond, note, debenture or similar instrument (including purchase
money obligations but excluding trade payables), or (c) for the payment of
money relating to a lease that is required to be classified as a capitalized
lease obligation in accordance with generally accepted accounting principles;
(ii) any liability of others described in the preceding clause (i) that such
Person has guaranteed, that is recourse to such Person or that is otherwise its
legal liability; and (iii) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred to in
clauses (i) and (ii) above.

     "Indenture”: The term “Indenture” shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.

     "Index Maturity”: The term “Index Maturity” of a particular Floating Rate
Note shall mean the period to Stated Maturity of the instrument or obligation
from which the Base Rate of such Floating Rate Note is calculated, as specified
in the applicable Company Order.

     "Initial Interest Rate”: The term “Initial Interest Rate” for a
particular Floating Rate Note shall mean the interest rate specified in the
applicable Company Order as in effect from the Original Issue Date of such
Floating Rate Note to its first Interest Reset Date.

7

 

     "Initial Redemption Date”: The term “Initial Redemption Date” shall mean
the earliest date, if any, on which a particular Note shall be redeemable at
the option of the Company prior to the Stated Maturity of such Note, as
specified in the applicable Company Order.

     "Interest Accrual Period:” The term “Interest Accrual Period” for a
particular Floating Rate Note shall mean the period from the date of issue of
such Floating Rate Note, or from an Interest Reset Date, if any, to its next
subsequent Interest Reset Date.

     "Interest Determination Date”: The term “Interest Determination Date”
shall mean each Commercial Paper Rate Interest Determination Date, LIBOR
Interest Determination Date, Prime Rate Interest Determination Date and
Treasury Rate Interest Determination Date.

     "Interest Factor”: The term “Interest Factor” for a Floating Rate Note
for each day in an Interest Accrual Period for such Floating Rate Note shall be
computed by dividing the Interest Rate applicable to such day by 360, in the
case of Commercial Paper Rate Notes, LIBOR Notes and Prime Rate Notes, or by
the actual number of days in the year, in the case of Treasury Rate Notes.

     "Interest Payment Date”:

     (a)  The term “Interest Payment Date” shall mean with respect to a Floating
Rate Note, including a Floating Rate Amortizing Note, which has an Interest
Reset Date which is (i) daily, weekly or monthly: the third Wednesday of each
month or the third Wednesday of March, June, September and December of each
year, as specified in the applicable Company Order, (ii) quarterly: the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Company Order, (iii) semiannually: the third Wednesday of the
two months of each year, as specified in the applicable Company Order; (iv)
annually: the third Wednesday of one month of each year, as specified in the
applicable Company Order, and, in each case, the date of Maturity of such
Floating Rate Note and, with respect to defaulted interest on such Floating
Rate Note, the date established by the Company for the payment of such
defaulted interest. If any Interest Payment Date (other than at Maturity) for
any Floating Rate Note would fall on a day that is not a Business Day with
respect to such Floating Rate Note, such Interest Payment Date will be the
following day that is a Business Day with respect to such Floating Rate Note,
except that, in the case of a LIBOR Note, if such Business Day with respect to
such Floating Rate Note is in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding London Business Day.

     (b)  The term “Interest Payment Date” shall mean with respect to a Fixed
Rate Note, including a Fixed Rate Amortizing Note, each January 15 and July 15,
or such other dates which are specified in the applicable Company Order during
the period such Fixed Rate Note is outstanding, the date of Maturity of such
Fixed Rate Note, and with respect to defaulted interest on such Fixed Rate
Note, the date established by the Company for the payment of such defaulted
interest.

     (c)  Notwithstanding the foregoing, the first Interest Payment Date for any
Note originally issued between a Record Date and the next Interest Payment Date
shall be the Interest Payment Date following the next succeeding Record Date.

8

 

     "Interest Rate”:

     (a)  The term “Interest Rate” for a particular Floating Rate Note shall
mean (1) from the date of issue of such Floating Rate Note to the first
Interest Reset Date for such Floating Rate Note, the Initial Interest Rate, and
(2) each Interest Accrual Period commencing on or after such First Interest
Reset Date, the Base Rate with reference to the Index Maturity for such
Floating Rate Note as specified in the applicable Company Order plus or minus
the Spread, if any, multiplied by the Spread Multiplier, if any; provided that
in the event no Spread or Spread Multiplier is provided in such Company Order,
the Spread and Spread Multiplier shall be zero and one, respectively; provided,
further, in no event shall the Interest Rate be greater than the Maximum
Interest Rate, if any, or less than the Minimum Interest Rate, if any;
provided, further, the Interest Rate in effect for the ten days immediately
prior to Maturity will be the Interest Rate in effect on the tenth day
preceding such Maturity; and provided, further, the Interest Rate will in no
event be higher than the maximum rate permitted by New York or other applicable
law, as the same may be modified by United States federal laws of general
application.

     (b)  The term “Interest Rate” for a particular Fixed Rate Note shall mean
the interest rate specified in the applicable Company Order.

     "Interest Rate Basis; Base Rate”: The term “Interest Rate Basis” or “Base
Rate” shall mean with respect to (a) Commercial Paper Rate Notes, the
Commercial Paper Rate, (b) LIBOR Notes, LIBOR, (c) Prime Rate Notes, the Prime
Rate, (d) Treasury Rate Notes, the Treasury Rate, and (e) any other Floating
Rate Note, the interest rate formula which determines the variable rate at
which such Note bears interest.

     "Interest Reset Date”: The term “Interest Reset Date” shall mean, in the
case of a Floating Rate Note specified in the applicable Company Order as being
reset (a) daily: each Business Day; (b) weekly: the Wednesday of each week
(with exception of weekly reset Treasury Rate Notes, which reset the Tuesday of
each week, except as specified below); (c) monthly: the third Wednesday of
each month; (d) quarterly: the third Wednesday of March, June, September and
December; (e) semiannually: the third Wednesday of the two months specified in
the applicable Company Order; and (f) annually: the third Wednesday of the
month specified in the applicable Company Order. If any Interest Reset Date
for a Floating Rate Note would otherwise be a day which is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding day that is
a Business Day, except that in the case of a LIBOR Note, if such Business Day
is in the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. If, in the case of a Treasury Rate Note,
an Interest Reset Date shall fall on a day on which the Treasury auctions
Treasury Bills, then such Interest Reset Date shall instead be the first
Business Day immediately following such auction.

     "Interest Reset Period”: The term “Interest Reset Period” shall mean for:

     (a)  each Floating Rate Note on which interest is reset monthly, quarterly,
semiannually or annually, and each Fixed Rate Note, the period:

		
	 	     (i) beginning on and including the Original Issue Date of such Note
or the most recent Interest Payment Date on which interest was paid on
such Note, and

9

 

		
	 	     (ii) ending on but not including the next Interest Payment Date or,
for the last Interest Reset Period, the Maturity, of such Note;

     (b)  each Floating Rate Note on which interest is reset daily or weekly,
the period:

		
	 	     (i) beginning on and including the Original Issue Date of such
Floating Rate Note, or beginning on but excluding the most recent Record
Date through which interest was paid on such Note, and
	 
	 	     (ii) ending on and including the next Record Date or, for the last
Interest Reset Period, ending on but excluding Maturity, of such Note;

provided, however, that the first Interest Reset Period for any Note which has
its Original Issue date after a Record Date and prior to its next Interest
Payment Date, shall begin on and include such Original Issue Date and (i) end
on and include the next Record Date for Floating Rate Notes on which interest
is reset daily or weekly, and (ii) end on but not include the second Interest
Payment Date after the Original Issue Date for all other Notes.

     “Issue Price”: The term “Issue Price” shall mean the price expressed as a
percentage of the aggregate principal amount of a Note at which such Note is
issued.

     “LIBOR”: The term “LIBOR” for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect
to any LIBOR Interest Determination Date, the rate determined:

		
	 	     (i) with respect to any LIBOR Interest Determination Date, LIBOR
shall be either: (a) if “LIBOR Reuters” is specified in the applicable
Company Order, the arithmetic mean of the offered rates (unless the
specified Designated LIBOR Page by its terms provides only for a single
rate, in which case such single rate will be used) for deposits in United
States dollars having the Index Maturity specified in the applicable
Company Order, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, which appear on the
Designated LIBOR Page specified in the applicable Company Order as of
11:00 A.M., London time, on that LIBOR Interest Determination Date, if at
least two such offered rates appear (unless, as aforesaid, only a single
rate is required) on such Designated LIBOR Page, or (b) if “LIBOR
Telerate” is specified in the applicable Company Order, the rate for
deposits in United States dollars having the Index Maturity specified in
the applicable Company Order, commencing on the second London Business
Day immediately following such LIBOR Interest Determination Date, which
appears on the Designated LIBOR Page specified in the applicable Company
Order as of 11:00 A.M., London time, on that LIBOR Interest Determination
Date. Notwithstanding the foregoing, if fewer than two offered rates
appear on the Designated LIBOR Page with respect to LIBOR Reuters (unless
the specified Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate will be used), or if no rate
appears on the Designated LIBOR Page with respect to LIBOR Telerate,
whichever may be applicable, LIBOR with respect to such LIBOR Interest
Determination Date shall be determined as provided in clause (ii) below; and

10

 

		
	 	     (ii) with respect to any LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Designated LIBOR Page with
respect to LIBOR Reuters (unless the specified Designated LIBOR Page by
its terms provides only for a single rate, in which case such single rate
will be used), or if no rate appears on the Designated LIBOR Page with
respect to LIBOR Telerate, as the case may be, the Calculation Agent
shall request the principal London office of each of four major banks in
the London interbank market selected by the Calculation Agent to provide
the Calculation Agent with its offered rate quotation for deposits in
United States dollars for the period of the applicable Index Maturity
specified in the applicable Company Order, commencing on the second
London Business Day immediately following such LIBOR Interest
Determination Date, to prime banks in the London interbank market as of
11:00 A.M., London time, on such LIBOR Interest Determination Date and in
a principal amount that is representative for a single transaction in
United States dollars in such market at such time. If at least two such
quotations are provided, LIBOR with respect to such LIBOR Interest
Determination Date shall be calculated by the Calculation Agent and shall
be the arithmetic mean of such quotations. If fewer than two quotations
are provided, LIBOR with respect to such LIBOR Interest Determination
Date shall be the arithmetic mean of the rates quoted as of 11:00 A.M.,
New York City Time, on such LIBOR Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent for
loans in United States Dollars to leading European banks, commencing on
the second London Business Day immediately following such LIBOR Interest
Determination Date having the Index Maturity specified in the applicable
Company Order in a principal amount that is representative for a single
transaction in such United States dollars in such market at such time;
provided, however, that if the banks so selected by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR with respect to such
LIBOR Interest Determination Date shall be LIBOR in effect immediately
prior to such LIBOR Interest Determination Date.

     “LIBOR Interest Determination Date”: The term “LIBOR Interest
Determination Date” pertaining to an Interest Reset Date for a LIBOR Note shall
mean the second London Business Day immediately preceding such Interest Reset
Date, unless, otherwise specified in the applicable Company Order.

     “LIBOR Notes”: The term “LIBOR Notes” shall mean Floating Rate Notes
which are specified in the applicable Company Order as bearing interest at an
interest rate calculated with reference to LIBOR.

     “London Business Day”: The term “London Business Day” shall mean any day
on which dealings in deposits in United States dollars are transacted in the
London interbank market.

     “Maturity”: The term “Maturity”, when used with respect to any Note,
shall mean the date on which the principal of such Note or an installment of
principal becomes due and payable in accordance with its terms and the terms of
this Indenture as therein or herein provided, whether at Stated Maturity, upon
declaration of acceleration, call for redemption, repayment at the option of
the Holder or otherwise.

11

 

     “Maximum Interest Rate”: The term “Maximum Interest Rate” shall mean the
maximum rate of interest, if any, which may be applicable to any Floating Rate
Note during any Interest Accrual Period as specified in the applicable Company
Order.

     “MGE”: The term “MGE” shall mean Madison Gas and Electric Company, a
Wholly-Owned Subsidiary of the Company.

     “Minimum Interest Rate”: The term “Minimum Interest Rate” shall mean the
minimum rate of interest, if any, which may be applicable to any Floating Rate
Note during any Interest Accrual Period as specified in the applicable Company
Order.

     “Money Market Yield”: The term “Money Market Yield” shall be the yield
(expressed as a percentage) calculated in accordance with the following
formula:

	 	 	 	 	 	 
	 	 	 	 	D x 360	 
	Money Market Yield	 	=	 	
	x 100
	 	 	 	 	360 — (D x M)	 

where “D” refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and “M” refers to the
actual number of days in the Interest Accrual Period for which interest is
being calculated.

     "Note” or “Notes; Outstanding”: The terms “Note” or “Notes” shall mean
any note or notes of the Company authenticated and delivered under this
Indenture, including any Global Note.

     The term “outstanding,” when used with reference to Notes, shall, subject
to Section 9.4, mean, as of any particular time, all Notes authenticated and
delivered by the Trustee under this Indenture, except (a) Notes theretofore
cancelled by the Company or delivered to the Company for cancellation; (b)
Notes, or portions thereof, for the payment or redemption of which moneys in
the necessary amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as its own paying
agent); provided that if such Notes are to be redeemed prior to the Maturity
thereof, notice of such redemption shall have been given as provided in Article
III, or provisions satisfactory to the Trustee shall have been made for giving
such notice; (c) Notes which shall have been Discharged; and (d) Notes in lieu
of or in substitution for which other Notes shall have been authenticated and
delivered, or which have been paid, pursuant to Section 2.7.

     "Noteholder; Holder”: The terms “Noteholder” or “Holder” shall mean any
Person in whose name at the time a particular Note is registered in the
register of the Company kept for that purpose in accordance with the terms
hereof.

     "Officer’s Certificate”: The term “Officer’s Certificate” when used with
respect to the Company, shall mean a certificate signed by the Chairman of the
Board, the President or any Vice President and by the Secretary or an Assistant
Secretary of the Company. Each such certificate shall include the statements
provided for in Section 14.5 if and to the extent required by such Section.

12

 

     “Opinion of Counsel”: The term “Opinion of Counsel” shall mean an opinion
in writing signed by legal counsel, who may be an employee of the Company, or
such other counsel who is satisfactory to the Trustee. Each such opinion shall
include the statements provided for in Section 14.5 if and to the extent
required by such Section. In the event that the Indenture requires the
delivery of an Opinion of Counsel to the Trustee, the text and substance of
which has been previously delivered to the Trustee, the Company may satisfy
such requirement by the delivery by the legal counsel that delivered such
previous Opinion of Counsel of a letter to the Trustee to the effect that the
Trustee may rely on such previous Opinion of Counsel as if such Opinion of
Counsel was dated and delivered the date delivery of such Opinion of Counsel is
required.

     “Optional Interest Reset Date”: The term “Optional Interest Reset Date”
shall mean each date on which the interest rate on a Fixed Rate Reset Note or
the Spread and/or Spread Multiplier of a Floating Rate Reset Note may be reset
at the option of the Company.

     “Original Issue Date”: The term “Original Issue Date” shall mean for a
particular Note, or portions thereof, the date upon which it, or such portion,
was issued by the Company pursuant to this Indenture and authenticated by the
Trustee (other than in connection with a transfer, exchange or substitution).

     “Original Issue Discount Note”: The term “Original Issue Discount Note”
shall mean (i) a Note that has a “stated redemption price at maturity” that
exceeds its “issue price”, each as defined for United States federal income tax
purposes, by at least 0.25% of its stated redemption price at maturity
multiplied by the number of complete years from the Original Issue Date to the
Stated Maturity for such Note (or in the case of a Note that provides for
payment of any amount other than the “qualified stated interest”, as defined
for United States federal income tax purposes, prior to maturity, the weighted
average maturity of the Note) and (ii) any other Note designated by the Company
in the applicable Company Order as issued with original issue discount for
United States federal income tax purposes.

     “Permitted Encumbrances”: The term “Permitted Encumbrances” shall mean:

     (a)  (i) any mortgage, pledge or other lien or encumbrance on any property
hereafter acquired or constructed by the Company or a Subsidiary, or on which
property so constructed is located, and created prior to, contemporaneously
with or after, such acquisition or construction or the commencement of
commercial operation of such property to secure or provide for the payment of
any part of the purchase or construction price of such property, or (ii) any
mortgage, pledge, or other lien or encumbrance upon such property existing at
the time of acquisition thereof by the Company or any Subsidiary, whether or
not assumed by the Company or such Subsidiary, or (iii) any mortgage, pledge,
or other lien or encumbrance existing on the property, shares of stock or
indebtedness of a corporation at the time such corporation shall become a
Subsidiary or any pledge of the shares of stock of such corporation prior to,
contemporaneously with or after such corporation shall become a Subsidiary to
secure or provide for the payment of any part of the purchase price of such
stock, or (iv) any conditional sales agreement or other title retention
agreement with respect to any property hereafter acquired or constructed;
provided that, in the case of clauses (i) through (iv), the lien of any such
mortgage, pledge or other lien does not spread to property owned prior to such
acquisition or construction or to other property thereafter

13

 

 acquired or constructed other than additions to such acquired or
constructed property and other than property on which property so constructed
is located;

     (b)  any mortgage, pledge or other lien or encumbrance created for the sole
purpose of extending, renewing or refunding any mortgage, pledge, lien or
encumbrance permitted by subsection (a) of this definition; provided, however,
that the principal amount of indebtedness secured thereby shall not exceed the
principal amount of indebtedness so secured at the time of such extension,
renewal or refunding and that such extension, renewal or refunding mortgage,
pledge, lien or encumbrance shall be limited to all or any part of the same
property that secured the mortgage, pledge or other lien or encumbrance
extended, renewed or refunded;

     (c)  liens for taxes or assessments or governmental charges or levies not
then due and delinquent or the validity of which is being contested in good
faith, and against which an adequate reserve has been established; liens on any
property created in connection with pledges or deposits to secure public or
statutory obligations or to secure performance in connection with bids or
contracts; materialmen’s, mechanics’, carrier’s, workmen’s, repairmen’s or
other like liens; or liens on any property created in connection with deposits
to obtain the release of such liens; liens on any property created in
connection with deposits to secure surety, stay, appeal or customs bonds; liens
created by or resulting from any litigation or legal proceeding which is
currently being contested in good faith by appropriate proceedings; leases and
liens, rights of reverter and other possessory rights of the lessor thereunder;
zoning restrictions, easements, rights-of-way or other restrictions on the use
of real property or minor irregularities in the title thereto; and any other
liens and encumbrances similar to those described in this subsection (c), the
existence of which does not, in the opinion of the Company, materially impair
the use by the Company or a Subsidiary of the affected property in the
operation of the business of the Company or a Subsidiary, or the value of such
property for the purposes of such business;

     (d)  any mortgage, pledge or other lien or encumbrance created after the
date of this Indenture on any property leased to or purchased by the Company or
a Subsidiary after that date and securing, directly or indirectly, obligations
issued by a State, a territory or a possession of the United States, or any
political subdivision of any of the foregoing, or the District of Columbia, to
finance the cost of acquisition or cost of construction of such property;
provided that the interest paid on such obligations is entitled to be excluded
from gross income of the recipient pursuant to Section 103(a)(1) of the
Internal Revenue Code of 1986, as amended (or any successor to such provision),
as in effect at the time of the issuance of such obligations;

     (e)  any mortgage, pledge or other lien or encumbrance on any property
owned or hereafter acquired or constructed by the Company or a Subsidiary, or
on which property so owned, acquired or constructed is located, to secure or
provide for the payment of any part of the construction price or cost of
improvements of such property, and created prior to, contemporaneously with or
after, such construction or improvement; and

     (f)  any mortgage, pledge or other lien or encumbrance not otherwise
permitted under this Section; provided that the aggregate amount of
indebtedness secured by all such mortgages, pledges, liens or encumbrances does
not exceed the greater of $20,000,000 or 10% of Common Shareholders Equity.

14

 

     "Person”: The term “Person” shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.

     "Pre-Exercise Stated Maturity Date”: The term “Pre-Exercise Stated
Maturity Date” shall mean the Stated Maturity of a Note (including, if such
Stated Maturity has previously been extended, the Stated Maturity as previously
extended) in effect immediately prior to the Company’s exercise of an option to
extend such Stated Maturity for an Extension Period or the Holder’s exercise of
an option to renew such Note pursuant to provisions included in the applicable
Company Order.

     "Prime Rate”: The term “Prime Rate” for a particular Floating Rate Note,
unless otherwise indicated in the applicable Company Order, shall mean, with
respect to any Prime Rate Interest Determination Date, the rate on such date as
published in H.l5(519) under the heading “Bank Prime Loan.” In the event that
such rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Prime Rate Interest Determination Date,
then the Prime Rate with respect to such Prime Rate Interest Determination Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen USPRIME1 as such bank’s prime rate or base lending rate as in
effect with respect to such Prime Rate Interest Determination Date. If fewer
than four such rates appear on the Reuters Screen USPRIME1 with respect to such
Prime Rate Interest Determination Date, the Prime Rate with respect to such
Prime Rate Interest Determination Date shall be calculated by the Calculation
Agent and shall be the arithmetic mean of the prime rates quoted on the basis
of the actual number of days in the year divided by 360 as of the close of
business on such Prime Rate Interest Determination Date by at least two of the
three major money center banks in The City of New York selected by the
Calculation Agent. If fewer than two quotations are provided, the Prime Rate
with respect to such Prime Rate Interest Determination Date shall be determined
on the basis of the rates furnished in The City of New York by the appropriate
number of substitute banks or trust companies organized and doing business
under the laws of the United States, or any state thereof, having total equity
capital of at least $500,000,000 and being subject to supervision or
examination by federal or state authority, selected by the Calculation Agent to
provide such rate or rates; provided, however, that if the appropriate number
of substitute banks or trust companies selected as aforesaid are not quoting as
mentioned in this sentence, the Prime Rate with respect to such Prime Rate
Interest Determination Date shall be the Prime Rate in effect immediately prior
to such Prime Rate Interest Determination Date.

     "Prime Rate Interest Determination Date”: The term “Prime Rate Interest
Determination Date” pertaining to an Interest Reset Date for a particular Prime
Rate Note shall mean the second Business Day immediately preceding such
Interest Reset Date, unless otherwise specified in the applicable Company
Order.

     "Prime Rate Notes”: The term “Prime Rate Notes” shall mean Floating Rate
Notes which are specified in the applicable Company Order as bearing interest
at an interest rate calculated with reference to the Prime Rate.

15

 

     "Principal”: The term “principal amount” with respect to any Note shall
mean the principal amount thereof set forth in the applicable Company Order;
provided that in the case of any Original Issue Discount Note, its principal
amount as of (i) any date that the principal amount of such Note is to be
repaid prior to its Stated Maturity, whether upon declaration of acceleration,
call for redemption, repayment at the option of the Holder or otherwise, or
(ii) any date that any consent, notice, request, direction, waiver or suit by
the Noteholders shall be deemed to be given, made or commenced under this
Indenture, such term shall mean the Amortized Face Amount of such Note as of
such date.

     "Principal Executive Offices of the Company”: The term “principal
executive offices of the Company” shall mean the place where the main corporate
offices of the Company are located, currently 133 South Blair Street, Madison,
Wisconsin 53703, or such other place where the main corporate offices of the
Company are located as designated in an Officers’ Certificate delivered to the
Trustee.

     "Principal Facility”: The term “Principal Facility” shall mean the real
property, fixtures, machinery and equipment relating to any facility owned by
the Company or any Subsidiary (which may include a network of electric or gas
distribution facilities or a network of electric or gas transmission
facilities), except any facility that, in the opinion of the Board of
Directors, is not of material importance to the business conducted by the
Company and its Subsidiaries, taken as a whole.

     "Record Date”: The term “Record Date” shall mean for the Interest Payment
Date for the payment of interest for an Interest Reset Period for a particular
Note, unless otherwise specified in the applicable Company Order, (a) the day
which is fifteen calendar days prior to such Interest Payment Date, whether or
not such day is a Business Day, (b) the date of Maturity of such Note, unless
such date of Maturity for a Fixed Rate Note is a January 1 or a July 1, in
which event the Record Date will be as provided in clause (a), and (c) a date
which is not less than five Business Days preceding the Interest Payment Date
of defaulted interest on such Note established by notice given by first-class
mail by or on behalf of the Company to the Holder of such Note not less than
fifteen days prior to such Interest Payment Date.

     "Redemption Date”: The term “Redemption Date” for a Note shall mean the
date fixed for the redemption of such Note in accordance with the provisions of
this Indenture.

     "Regulated Subsidiary”: The term “Regulated Subsidiary” shall mean any
Subsidiary which owns or operates facilities used for the generation,
transmission or distribution of electric energy and is subject to the
jurisdiction of any governmental authority of the United States or any state or
political subdivision thereof, as to any of its: rates; services; accounts;
issuances of securities; affiliate transactions; or construction, acquisition
or sale of any such facilities, except that any “exempt wholesale generator”,
as defined in 15 USC 79z-5a(a)(1), “qualifying facility”, as defined in 18 CFR
29z, 101(b)(1), “foreign utility company”, as defined in 15 USC 79z-5b(a)(3)
and “power marketer”, as defined in Northwest Power Marketing Company, L.L.C.,
75 FERC ¶ 61,281, shall not be a Regulated Subsidiary.

16

 

     "Reset Note”: The term “Reset Note” shall mean a Fixed Rate Note, with
respect to which the Company has the option to reset the interest rate, and a
Floating Rate Note, with respect to which the Company has the option to reset
the Spread and/or Spread Multiplier.

     "Reset Notice”: The term “Reset Notice” shall mean a notice sent by the
Trustee by telegram, telex, facsimile transmission, hand delivery or letter
(first class, postage prepaid) to the Holder of a Reset Note with respect to
which the Company has exercised its option to reset the interest rate or the
Spread and/or the Spread Multiplier, indicating (i) that the Company has
elected to exercise such option, (ii) such new interest rate or Spread and/or
Spread Multiplier and (iii) any provisions for redemption of such Note during
the Subsequent Interest Period commencing on the applicable Optional Interest
Reset Date.

     "Responsible Officer”: The term “responsible officer” or “responsible
officers” when used with respect to the Trustee shall mean one or more of the
following: the chairman of the board of directors, the vice chairman of the
board of directors, the chairman of the executive committee, the vice chairman
of the executive committee, the chairman of the trust committee, the president,
any vice president, the cashier, the secretary, the treasurer, any trust
officer, any second or assistant vice president, any assistant cashier, any
assistant secretary, any assistant treasurer, any assistant trust officer or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.

     "Reuters Screen USPRIME1”: The term “Reuters Screen USPRIME1” shall mean
the display designated as page “USPRIME1” on the Reuters Monitor Money Rate
Service (or such other page which may replace the USPRIME1 page on such service
for the purpose of displaying the prime rate or base lending rate of major
banks)

     "Spread”: The term “Spread” applicable to a particular Floating Rate Note
shall mean the number of Basis Points above or below the Base Rate for such
Floating Rate Note as specified in the applicable Company Order, used in the
calculation of the Interest Rate for such Floating Rate Note.

     "Spread Multiplier”: The term “Spread Multiplier” applicable to a
particular Floating Rate Note shall mean the percentage of the Base Rate (plus
or minus any applicable Spread) for such Floating Rate Note as specified in the
applicable Company Order, used in the calculation of the Interest Rate for such
Floating Rate Note.

     "Stated Maturity”: The term “Stated Maturity”, when used with respect to
any Note shall mean the date specified in such Note as the date on which the
principal of such Note is due and payable, or the date specified as the Stated
Maturity (i) in an Extension Notice or (ii) in accordance with procedures
included in the applicable Company Order pursuant to which the Holder may renew
such Note.

     "Subsequent Interest Period”: The term ‘Subsequent Interest Period” shall
mean a period from an Optional Interest Reset Date of a Note to the next
Optional Interest Reset Date of

17

 

 such Note or, if there is no such next Optional Interest Reset Date, to
the Stated Maturity of such Note.

     "Subsidiary”: The term “Subsidiary” shall mean any corporation of which
at least a majority of the outstanding stock having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation,
irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency, is at the time, directly or indirectly, owned or
controlled by the Company or by one or more Subsidiaries thereof, or by the
Company and one or more Subsidiaries.

     "Treasury”: The term “Treasury shall mean the United States Department of
Treasury.

     "Treasury Bills”: The term “Treasury Bills” shall mean direct obligations
of the United States.

     "Treasury Rate”: The term “Treasury Rate” for a particular Floating Rate
Note, unless otherwise indicated in the applicable Company Order, shall mean,
with respect to any Treasury Rate Interest Determination Date, the rate
resulting from the most recent auction of Treasury Bills having the Index
Maturity specified in the applicable Company Order, as such rate is published
in H.15(519) under the heading “Treasury bills-auction average (investment)”
or, if not so published by 3:00 P.M., New York City time, on the Calculation
Date pertaining to such Treasury Rate Interest Determination Date, the average
auction rate on such Treasury Rate Determination Date (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the Treasury. In the event
that the results of the auction of Treasury Bills having the specified Index
Maturity are not reported as provided above by 3:00 P.M., New York City time,
on such Calculation Date pertaining to such Treasury Rate Determination Date,
or if no such auction is held in a particular week, then the Treasury Rate with
respect to such Treasury Rate Interest Determination Date shall be calculated
by the Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate
Interest Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity specified in the
applicable Company Order; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as set forth above, the
Treasury Rate with respect to such Treasury Rate Interest Determination Date
shall be the Treasury Rate in effect immediately prior to such Treasury Rate
Interest Determination Date.

     "Treasury Rate Interest Determination Date”: The term “Treasury Rate
Interest Determination Date” pertaining to an Interest Reset Date for a
Treasury Rate Note shall mean the day of the week in which its Interest Reset
Date falls on which Treasury Bills normally would be auctioned; provided,
however, that if as a result of a legal holiday an auction is held on the
Friday of the week preceding such Interest Reset Date, the related Treasury
Rate Interest Determination Date shall be such Friday, unless otherwise
specified in the applicable Company Order.

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     "Treasury Rate Notes”: The term “Treasury Rate Notes” shall mean Floating
Rate Notes which are specified in the applicable Company Order as bearing
interest at an interest rate calculated with reference to the Treasury Rate.

     "Trustee”: The term “Trustee” shall mean Bank One Trust Company, N.A.
and, subject to Article VIII, shall also include any successor Trustee.

     "U.S. Government Obligations”: The term “U.S. Government Obligations”
shall mean securities that are (i) direct obligations of the United States for
the payment of which its full faith and credit is pledged, or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States, which,
in either case under clauses (i) or (ii), are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of
interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.

     "Wholly-Owned Subsidiary”: The term “Wholly-Owned Subsidiary” shall mean
a Subsidiary of which all of the outstanding voting stock (other than
directors’ qualifying shares) is at the time, directly or indirectly, owned by
the Company, or by one or more Wholly-Owned Subsidiaries of the Company or by
the Company and one or more Wholly-Owned Subsidiaries.

     "Yield to Maturity”: The term “Yield to Maturity” shall mean for a
particular Note the yield to maturity of such Note, computed in accordance with
generally accepted United States bond yield computation principles and
expressed as a percentage, specified in the applicable Company Order.

     "Zero Coupon Note”: The term “Zero Coupon Note” means a Note issued at a
price representing a discount from the principal amount payable at Maturity and
bearing a zero fixed rate of interest.

ARTICLE II

FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

     SECTION 2.1 Form Generally.

     (a)  The Notes shall be titled “Medium-Term Notes”, and, if such Notes
shall be in the form of (a) a Fixed Rate Note which is a Global Note, shall be
in substantially the form set forth in Exhibit A, (b) a Fixed Rate Note which
is not a Global Note, shall be in substantially the form set forth in Exhibit
B, (c) a Floating Rate Note which is a Global Note, shall be in substantially
the form set forth in Exhibit C and (d) a Floating Rate Note which is not a
Global Note, shall be in substantially the form set forth in Exhibit D to this
Indenture, or in any such case such other

19

 

 form as shall be established by a Board Resolution, or an Officers’
Certificate pursuant to a Board Resolution, or in one or more indentures
supplemental hereto, in each case 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 with applicable law or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of such Notes. If the form of Notes is
established by a Board Resolution, or an Officers’ Certificate pursuant to a
Board Resolution, a copy of such Board Resolution or Officers’ Certificate
shall be delivered to the Trustee at or prior to the delivery to the Trustee of
the Company Order contemplated by Section 2.5 for the authentication and
delivery of such Notes.

     (b)  The definitive Notes shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Notes, as evidenced by their
execution of such Notes.

     SECTION 2.2 Form of Trustee’s Certificate of Authentication.

     The Trustee’s certificate of authentication on all Notes shall be in
substantially the following form:

Trustee’s Certificate of Authentication

This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 	 
	 	BANK ONE TRUST COMPANY, N.A., as Trustee
	 
	 	By:	 	 
	 
	 	 	 	
 

Authorized Signatory

     SECTION 2.3 Amount Unlimited.

     The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited.

     SECTION 2.4 Denominations, Dates, Interest Payment and Record Dates.

     (a)  The Notes shall be issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof, unless otherwise
specified in the applicable Company Order.

     (b)  Each Note shall be dated and issued as of the date of its
authentication by the Trustee, and shall bear an Original Issue Date or, as
provided in Section 2.12(d), two or more Original Issue Dates; each Note issued
upon transfer, exchange or substitution of a Note shall bear the Original Issue
Date or Original Issue Dates of such transferred, exchanged or substituted
Note, subject to Section 2.12(d).

20

 

     (c)  Each Note shall bear interest, if any, at its Interest Rate during
each Interest Reset Period for such Note, from the later of (i) its Original
Issue Date (or, if pursuant to Section 2.12, a Global Note has two or more
Original Issue Dates, interest shall, beginning on each such Original Issue
Date, begin to accrue for that part of the principal amount of such Global Note
to which that Original Issue Date is applicable), or (ii) the most recent date
to which any interest has been paid or duly provided for until the principal of
such Note is paid or funds are made available for such payment, and Accrued
Interest on each Note shall be payable for each Interest Reset Period on the
Interest Payment Date immediately subsequent to the Record Date for the payment
of interest for such Interest Reset Period.

     (d)  All percentages resulting from any calculation of the Interest Rate
for a Floating Rate Note shall be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded
to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from
such calculation shall be rounded to the nearest cent (with one-half cent being
rounded upward).

     (e)  Each Note shall mature on a date specified in such Note not less than
nine months nor more than 30 years after its Original Issue Date, and the
principal amount of each outstanding Note shall be payable on the Maturity date
specified therein.

     (f)  The Person in whose name any Note is registered at the close of
business on any Record Date with respect to an Interest Payment Date for such
Note shall be entitled to receive the Accrued Interest payable on such Note on
such Interest Payment Date notwithstanding the cancellation of such Note upon
any registration of transfer, exchange or substitution of such Note subsequent
to such Record Date and prior to such Interest Payment Date.

     (g)  The Company shall cause the Calculation Agent to calculate each
Interest Rate applicable to each Floating Rate Note in accordance with this
Indenture, and the Company shall, or shall cause the Calculation Agent to,
notify the Trustee of each determination of such Interest Rate promptly after
such determination. The Calculation Agent’s determination of any Interest Rate
shall be final and binding in the absence of manifest error.

     (h)  On the fifth Business Day immediately preceding each Interest Payment
Date, the Trustee shall furnish to the Company a notice setting forth the total
amount of the Accrued Interest payments to be made on such Interest Payment
Date, and to the Depositary a notice setting forth the total amount of Accrued
Interest payments to be made on Global Notes on such Interest Payment Date.
The Trustee will provide monthly to the Company a list of the principal of and
any premium and Accrued Interest to be paid on Notes in the next succeeding
month and to the Depositary a list of the principal of and any premium and
Accrued Interest to be paid on Global Notes in the such succeeding month.
Promptly after the first Business Day of each month, the Trustee shall furnish
to the Company a written notice setting forth the aggregate principal amount of
the Global Notes. The Company will provide to the Trustee not later than the
payment date sufficient moneys to pay in full all principal of and any premium
and Accrued Interest payments due on such payment date. The Trustee shall be
responsible for withholding taxes on interest paid as required by law.

21

 

     (i)  Upon the request of any Noteholder of a Floating Rate Note, the
Trustee shall provide to such Noteholder the Interest Rate then in effect and,
if then determined, the Interest Rate that will become effective on the next
Interest Reset Date, with respect to such Floating Rate Note.

     SECTION 2.5 Execution, Authentication, Delivery and Dating.

     (a)  The Notes shall be executed on behalf of the Company by the Chairman
of the Board, the President or any Vice President and by the Secretary or an
Assistant Secretary. The signature of any of such officers on any Notes may be
manual or facsimile.

     (b)  Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.

     (c)  At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with one or more Company Orders for the
authentication and delivery of such Notes, and the Trustee in accordance with
any such Company Order shall authenticate such Notes and make them available
for delivery. Prior to authenticating such Notes, and in accepting the
additional responsibilities under this Indenture in relation to such Notes, the
Trustee shall be entitled to receive the following only at or before the first
issuance of Notes, and (subject to Section 8.1) shall be fully protected in
relying upon:

		
	 	     (i) a Board Resolution authorizing this Indenture and the Notes, and
if applicable, an appropriate record of any action taken pursuant to such
Board Resolution, certified by the Secretary or an Assistant Secretary of
the Company;

		
	 	     (ii) an Officers’ Certificate designating one or more officers of
the Company who are authorized to give Company Orders for the issuance
of, and specifying terms of, Notes and, if appropriate, setting forth the
form of Notes in accordance with Section 2.1;

		
	 	     (iii) an Opinion of Counsel stating,

		
	 	     (A) if the form of Notes has been established by or pursuant
to a Board Resolution, an Officers’ Certificate pursuant to a Board
Resolution, or a supplemental indenture as permitted by Section
2.1, that such form has been established in conformity with this
Indenture;

		
	 	     (B) that the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally
binding agreement of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting the
enforcement of creditors’ rights and to general equity principles;

		
	 	     (C) that the Indenture is qualified under the TIA;

22

 

		
	 	     (D) that any supplemental indenture referred to in (A) above
has been duly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting the enforcement of creditors’ rights and
to general equity principles;

		
	 	     (E) that the Notes, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel consistent with the
terms of this Indenture, will constitute legal, valid and legally
binding obligations of the Company, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting the enforcement of creditors’ rights and to general
equity principles;

		
	 	     (F) that all laws and requirements in respect of the
execution, delivery and sale by the Company of the Notes have been
complied with;

		
	 	     (G) that the Company is not in default in any of its
obligations under this Indenture, and that the issuance of the
Notes will not result in any such default; and

		
	 	     (H) such other matters as the Trustee may reasonably request.

     (d)  The Trustee shall have the right to decline to authenticate and
deliver any Note:

		
	 	     (i) if the issuance of such Note pursuant to this Indenture will
affect the Trustee’s own rights, duties or immunities under the Notes and
this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee;

		
	 	     (ii) if the Trustee, being advised by counsel, determines that such
action may not lawfully be taken; or

		
	 	     (iii) if the Trustee in good faith by its Board of Directors,
executive committee or a trust committee of directors and/or responsible
officers in good faith determines that such action would expose the
Trustee to personal liability to Holders of any outstanding Notes.

     (e)  No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture; provided, however, that if any Note shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Note to the Trustee for cancellation as
provided in Section 2.9, for all purposes of this Indenture such Note shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.

23

 

     SECTION 2.6 Exchange and Registration of Transfer of Notes.

     (a)  Subject to Section 2.12, Notes may be exchanged for one or more new
Notes of any authorized denominations and of a like aggregate principal amount
and Stated Maturity and having the same terms and Original Issue Date or
Original Issue Dates. Notes to be exchanged shall be surrendered at any of the
offices or agencies to be maintained by the Company for such purpose as
provided in Section 5.2, and the Company shall execute and register and the
Trustee shall authenticate and deliver in exchange therefor the Note or Notes
which the Noteholder making the exchange shall be entitled to receive.

     (b)  The Trustee, on behalf of the Company, shall keep, at one of said
offices or agencies, a register in which, subject to such reasonable
regulations as it or the Company may prescribe, the Trustee shall register or
cause to be registered Notes and shall register or cause to be registered the
transfer of Notes as provided in this Article II. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times such register shall be open
for inspection by the Company. Upon due presentment for registration of
transfer of any Note at any such office or agency, the Company shall execute
and register or cause to be registered and the Trustee shall authenticate and
make available for delivery, in the name of the transferee or transferees, one
or more new Notes of any authorized denominations and of a like aggregate
principal amount and Stated Maturity and having the same terms and Original
Issue Date or Original Issue Dates.

     (c)  All Notes presented for registration of transfer or for exchange,
redemption or payment shall (if so required by the Company) be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
or the attorney of such Holder duly authorized in writing.

     (d)  No service charge shall be made for any exchange or registration of
transfer of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.

     (e)  The Company shall not be required to exchange or register a transfer
of any Notes selected, called or being called for redemption except, in the
case of any Note to be redeemed in part, the portion thereof not to be so
redeemed.

     (f)  If the principal amount and any applicable premium of part but not all
of a Global Note is paid, then upon surrender to the Trustee of such Global
Note, the Company shall execute, and the Trustee shall authenticate, and make
available for delivery, a Global Note in an authorized denomination in
aggregate principal amount equal to, and having the same terms and Original
Issue Date or Original Issue Dates as, the unpaid portion of such Global Note.

     SECTION 2.7 Mutilated, Destroyed, Lost or Stolen Notes.

     (a)  In case any temporary or definitive Note shall become mutilated or be
destroyed, lost or stolen, the Company in its discretion may execute, and upon
its request the Trustee shall authenticate and deliver, a new Note of like form
and principal amount and having the same terms and Original Issue Date or
Original Issue Dates and bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Note, or in lieu of

24

 

 and in substitution for the Note so destroyed, lost or stolen. In every
case the applicant for a substituted Note shall furnish to the Company, the
Trustee, any Authenticating Agent or Note registrar such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft of a Note, the applicant shall also furnish to the
Company and to the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.

     (b)  The Trustee may authenticate any such substituted Note and deliver the
same upon the written request or authorization of any officer of the Company.
Upon the issuance of any substituted Note, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. In
case any Note which has matured or is about to mature shall become mutilated or
be destroyed, lost or stolen, the Company may, instead of issuing a substituted
Note, pay or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Note) if the applicant for such payment shall
furnish to the Company, the Trustee, any Authenticating Agent or Note registrar
such security or indemnity as may be required by them to save each of them
harmless and, in case of destruction, loss or theft, evidence satisfactory to
the Company and the Trustee of the destruction, loss or theft of such Note and
of the ownership thereof.

     (c)  Every substituted Note issued pursuant to this Section 2.7 by virtue
of the fact that any Note is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company, whether or not such
destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder. All Notes shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

     SECTION 2.8 Temporary Notes.

     Pending the preparation of definitive Notes, the Company may execute and
the Trustee shall authenticate and make available for delivery, temporary Notes
(printed, lithographed or otherwise reproduced). Temporary Notes shall be
issuable in any authorized denomination and substantially in the form of the
definitive Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Company.
Every such temporary Note shall be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Notes. Without unreasonable delay the Company will execute and
register and will deliver to the Trustee definitive Notes and thereupon any or
all temporary Notes may be surrendered in exchange therefor, at the Corporate
Trust Office of the Trustee, and the Trustee shall authenticate and deliver in
exchange for such temporary Notes an equal aggregate principal amount of
definitive Notes. Such exchange shall be made by the Company at its own
expense and without any charge therefor to the Noteholders. Until so
exchanged, the temporary Notes shall in all respects be

25

 

 entitled to the same benefits under this Indenture as definitive Notes
authenticated and made available for delivery hereunder.

     SECTION 2.9 Cancellation of Notes Paid, etc.

     All Notes surrendered for the purpose of payment, redemption, exchange or
registration of transfer shall be surrendered to the Trustee for cancellation
and promptly cancelled by it and no Notes shall be issued in lieu thereof
except as expressly permitted by this Indenture. All Notes so cancelled shall
be retained by the Trustee. If the Company shall acquire any of the Notes,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Notes unless and until the same are
cancelled by the Trustee.

     SECTION 2.10 Interest Rights Preserved.

     Each Note delivered under this Indenture upon transfer of or in exchange
for or in lieu of any other Note shall carry all the rights to unpaid Accrued
Interest, and interest to accrue, which were carried by such other Note, and
each such Note shall be so dated that neither gain nor loss of interest shall
result from such transfer, exchange or substitution.

     SECTION 2.11 Payment of Notes.

     Unless otherwise specified in the applicable Company Order, the principal
of and any premium and Accrued Interest on all Notes shall be payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts as follows:

     (a)  On or before 10:00 a.m., New York City time, of the day on which any
payment of principal, Accrued Interest or premium is due on any Global Note
pursuant to the terms thereof, the Company shall deliver to the Trustee
immediately available funds sufficient to make such payment. On or before
10:30 a.m., New York City time or such other time as shall be agreed upon
between the Trustee and the Depositary, of the day on which such payment is
due, the Trustee shall deposit with the Depositary such funds by wire transfer
into the account specified by the Depositary. As a condition to the payment at
the Maturity of any part of the principal and any applicable premium of any
Global Note, the Depositary shall surrender, or cause to be surrendered, such
Global Note to the Trustee, whereupon a new Global Note shall be issued to the
Depositary pursuant to Section 3.3(d).

     (b)  With respect to any Note that is not a Global Note, principal, any
premium and Accrued Interest due at the Maturity of such Note shall be payable
in immediately available funds when due upon presentation and surrender of such
Note at the Corporate Trust Office of the Trustee; provided that this Note is
presented to the Trustee in time for the Trustee to make such payment in such
funds in accordance with its normal procedures. Accrued Interest on (and, in
the case of Amortizing Notes, installments of principal of) any Note that is
not a Global Note (other than Accrued Interest or such installments payable at
Maturity) shall be paid by a clearinghouse funds check mailed on the Interest
Payment Date; provided, however, that if any Holder of Notes, the aggregate
principal amount of which equals or exceeds $10,000,000, provides a written
request to the Trustee on or before the applicable Record Date for such
Interest Payment Date, Accrued Interest (and such installments of principal)
shall be paid by

26

 

 wire transfer of immediately available funds to a bank within the
continental United States or by direct deposit into the account of such Holder
if such account is maintained with the Trustee.

     SECTION 2.12 Notes Issuable in the Form of a Global Note.

     (a)  If the Company shall establish pursuant to Section 2.5 that particular
Notes are to be issued in whole or in part in the form of one or more Global
Notes, then the Company shall execute and the Trustee shall, in accordance with
Section 2.5 and the Company Order delivered to the Trustee thereunder,
authenticate and make available for delivery, such Global Note or Notes, which
(1) shall represent, shall be denominated in an amount equal to the aggregate
principal amount of, and shall have the same terms as, the outstanding Notes to
be represented by such Global Note or Notes, (ii) shall be registered in the
name of the Depositary or its nominee, (iii) shall be delivered by the Trustee
to the Depositary or pursuant to the Depositary’s instruction and (iv) shall
bear a legend substantially to the following effect: “This Note is a Global
Note registered in the name of the Depositary or a nominee thereof and, unless
and until it is exchanged in whole or in part for the individual Notes
represented hereby, this Global Note may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.”

     (b)  Notwithstanding any other provision of Section 2.6 or of this Section
2.12, unless the terms of a Global Note expressly permit such Global Note to be
exchanged in whole or in part for individual Notes, a Global Note may be
transferred, in whole but not in part, only to a nominee of the Depositary, or
by a nominee of the Depositary to the Depositary, or to a successor Depositary
for such Global Note selected or approved by the Company or to a nominee of
such successor Depositary.

		
	 	     (c) (i) (i) If at any time the Depositary for a Global Note notifies
the Company that such Depositary is unwilling or unable to continue as
Depositary for such Global Note or if at any time the Depositary for a
Global Note shall no longer be registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or any successor statute or
regulation, the Company may appoint a successor Depositary with respect
to such Global Note. If (A) a successor Depositary for such Global Note
is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, or (B) any Notes are
represented by a Global Note at a time when an Event of Default with
respect to the Notes shall have occurred and be continuing, then in each
case the Company’s election pursuant to the applicable Company Order
shall no longer be effective with respect to such Global Note and the
Company shall execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of individual Notes of like tenor and
terms in exchange for such Global Note, shall authenticate and make
available for delivery, individual Notes of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal
amount of such Global Note in exchange for such Global Note. The Trustee
shall not be charged with knowledge of notice of the ineligibility of a
Depositary unless a responsible officer
assigned to and working in its corporate trust administration
department shall have actual knowledge thereof.

27

 

		
	 	     (ii) The Company may at any time and in its sole discretion
determine that one or more Notes issued or issuable in the form of one or
more Global Notes shall no longer be represented by such Global Note or
Notes. In such event the Company shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of
individual Notes of like tenor and terms in exchange for such Global Note
or Notes, shall authenticate and make available for delivery, individual
Notes of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Note or
Notes in exchange for such Global Note or Notes.
	 
	 	     (iii) If agreed upon by the Company and the Depositary with respect
to Notes issued in the form of a Global Note, the Depositary for such
Global Note shall surrender such Global Note in exchange in whole or in
part for individual Notes of like tenor and terms in definitive form on
such terms as are acceptable to the Company and such Depositary.
Thereupon the Company shall execute, and the Trustee shall authenticate
and make available for delivery, without a service charge, (A) to each
Person specified by the Depositary, a new Note or Notes of like tenor and
terms, and of any authorized denominations as requested by such Person in
aggregate principal amount equal to and in exchange for the beneficial
interest of such Person in such Global Note; and (B) to such Depositary a
new Global Note of like tenor and terms and in a denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of Notes delivered to
Holders thereof.
	 
	 	     (iv) In any exchange provided for in Section 2.12(c)(i), (ii) or
(iii), the Company will execute and the Trustee will authenticate and
make available for delivery, individual Notes in definitive registered
form in authorized denominations. Upon the exchange of a Global Note for
individual Notes, such Global Note shall be cancelled by the Trustee.
Notes issued in exchange for a Global Note pursuant to this Section 2.12
shall be registered in such names and in such authorized denominations as
the Depositary for such Global Note, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Notes to the Depositary for delivery to
the Persons in whose names such Notes are so registered, or if the
Depositary shall refuse or be unable to deliver such Notes, the Trustee
shall deliver such Notes to the Persons in whose names such Notes are
registered, unless otherwise agreed upon by the Trustee and the Company.

     (d)  Neither the Company, the Trustee or any Authenticating Agent will have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

     (e)  Pursuant to the provisions of this subsection, at the option of the
Trustee and upon thirty days’ written notice to the Depositary, the Depositary
shall be required to surrender any two or more Global Notes which have
identical terms, including, without limitation, identical maturities, interest
rates and redemption provisions (but which may have differing Original Issue
Dates) to the Trustee, and the Company shall execute and the Trustee shall
authenticate and deliver to, or at the direction of, the Depositary a Global
Note in principal amount equal to the aggregate principal amount of, and with
all terms identical to, the Global Notes surrendered to

28

 

the Trustee, and such
new Global Note shall indicate each applicable Original Issue Date and the
principal amount applicable to each such Original Issue Date. The exchange
contemplated in this subsection shall be consummated at least 30 days prior to
any Interest Payment Date applicable to any of the Global Notes so surrendered
to the Trustee. Upon any exchange of any Global Note with two or more Original
Issue Dates, whether pursuant to this Section or pursuant to Section 2.6 or
Section 3.3, the aggregate principal amount of the Notes with a particular
Original Issue Date shall be the same before and after such exchange, giving
effect to any retirement of Notes and the Original Issue Dates applicable to
such Notes occurring in connection with such exchange.

     SECTION 2.13 CUSIP Numbers.

     The Company in issuing Notes may use CUSIP numbers (if then generally in
use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption
as a convenience of Noteholders; provided that any such notice may state that
no representation is made as to the correctness of such CUSIP numbers either as
printed on the Notes or as contained in any notice of redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.

ARTICLE III

REDEMPTION OF NOTES; REPAYMENT PRIOR TO STATED MATURITY

     SECTION 3.1 Applicability of Redemption Provisions.

     Unless otherwise specified in the applicable Company Order, the Notes will
not be subject to an sinking fund. If a Company Order specifies an Initial
Redemption Date for a Note, the Company shall have an option to redeem such
Note prior to its Stated Maturity on the date or dates and at the prices
specified in such Company Order, all as provided for in Sections 3.2 and 3.3.

     SECTION 3.2 Notice of Redemption; Selection of Notes.

     (a)  The election of the Company to redeem any Notes shall be evidenced by
a Board Resolution which shall be given with notice of such redemption to the
Trustee at least ten Business Days prior to the giving of the notice of
redemption to Holders of such Notes. The selection of Notes or portions
thereof to be redeemed prior to their Stated Maturity shall be in the sole
discretion of the Company; provided that the Company shall give notice thereof
to the Trustee in accordance with Section 3.2(b). Each Note which by its terms
is redeemable prior to its Stated Maturity may be redeemed by the Company in
whole or in part without also redeeming any other Note which is redeemable
prior to its Stated Maturity.

     (b)  Notice of redemption to each Holder of Notes to be redeemed as a whole
or in part shall be given by the Company (or, at the Company request, by the
Trustee in the name and
at the expense of the Company) in the manner provided in Section 14.10 at
least 30 but not more than 60 calendar days prior to the Redemption Date. Any
notice which is given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the

29

 

Noteholder receives the
notice. In any case, failure duly to give such notice, or any defect in such
notice, to the Holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.

     (c)  Each such notice shall specify the Redemption Date, the places of
redemption and the redemption price at which such Notes are to be redeemed, and
shall state that payment of the redemption price of such Notes or portion
thereof to be redeemed will be made on surrender of such Notes at such places
of redemption, that Accrued Interest to the Redemption Date will be paid as
specified in such notice and that from and after such date interest thereon
will cease to accrue. If less than all the Notes having the same terms are to
be redeemed, the notice shall specify the particular Notes or portions thereof
to be redeemed. In case any Note is to be redeemed in part only, the notice
which relates to such Note shall state the portion of the principal amount
thereof to be redeemed, and shall state that, upon surrender of such Note, a
new Note or Notes having the same terms in aggregate principal amount equal to
the unredeemed portion thereof will be issued.

     (d)  If at the time of the mailing of any notice of redemption the Company
shall not have irrevocably directed the Trustee to apply funds deposited with
the Trustee or held by it and available to be used for the redemption of Notes
to redeem all the Notes called for redemption, such notice may state that it is
subject to the receipt of the redemption moneys by the Trustee before the
Redemption Date and that such notice shall be of no effect unless such moneys
are so received before such date.

     SECTION 3.3 Payment of Notes on Redemption; Deposit of Redemption Price.

     (a)  If notice of redemption shall have been given as provided in Section
3.2, such Notes or portions of Notes called for redemption shall become due and
payable on the date and at the places stated in such notice at the applicable
redemption price, together with Accrued Interest to the Redemption Date of such
Notes, and on and after the Redemption Date; provided that the Company shall
have deposited with the Trustee on or prior to the Redemption Date funds in an
amount sufficient to pay the redemption price together with Accrued Interest to
the Redemption Date of such Notes. Interest on the Notes or portions thereof
so called for redemption shall cease to accrue and such Notes or portions
thereof shall be deemed not to be entitled to any benefit under this Indenture
except to receive payment of the redemption price together with Accrued
Interest to the Redemption Date of such Notes; provided, however, that any
payments due with respect to such Note prior to the Redemption Date shall be
payable to the Holders of record of such Notes at the close of business on the
relevant Record Date specified in the applicable Company Order. On
presentation and surrender of such Notes at such a place of payment in such
notice specified, such Notes or the specified portions thereof shall be paid
and redeemed at the applicable Redemption Price.

     (b)  The Company shall not mail any notice of redemption of Notes during
the continuance of any Event of Default, except that (1) where notice of
redemption of any Notes has theretofore been mailed, the Company shall redeem
such Notes; provided that funds have
theretofore been deposited for such purpose, and (2) notices of redemption
of all outstanding Notes may be given during the continuance of an Event of
Default.

30

 

     (c)  If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and any premium on such Note, shall
until paid bear interest from the date fixed for redemption at the rate borne
by such Note.

     (d)  Upon surrender of any Note redeemed in part only, the Company shall
execute and register, and the Trustee shall authenticate and make available for
delivery, a new Note or Notes of authorized denominations in aggregate
principal amount equal to, and having the same terms and Original Issue Date or
Original Issue Dates as, the unredeemed portion of the Note so surrendered.

     SECTION 3.4 Repayment at the Option of the Holder.

     (a)  Unless otherwise specified in the applicable Company Order, Notes
shall not be repayable prior to Stated Maturity at the option of the Holder.
If so specified, a Note shall be repayable at the option of the Holder, in
whole or in part, on a date or dates prior to Stated Maturity and at a price or
prices specified in the applicable Company Order, plus accrued and unpaid
interest to but excluding the date of repayment.

     (b)  In order for a Note that is repayable at the option of the Holder to
be repaid prior to Stated Maturity, such Holder shall deliver or cause to be
delivered to the Trustee at least 30 but not more than 45 calendar days prior
to the repayment date: (i) the Note with the form entitled “Option to Elect
Repayment” on the reverse of the Note duly completed, or (ii) a telegram,
telex, facsimile transmission, hand delivery or letter (first class, postage
prepaid) from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
in the United States setting forth the name of the Holder of the Note, the
principal amount of the Note, the principal amount of the Note to be repaid,
the certificate number or a description of the tenor and terms of the Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid with the form entitled “Option to Elect
Repayment” on the reverse of the Note duly completed shall be received by the
Trustee not later than five Business Days after the date of such telegram,
telex, facsimile transmission, hand delivery or letter, if such Note and form
duly completed are received by the Trustee by such fifth Business Day.

     (c)  Exercise of the repayment option by the Holder of a Note shall be
irrevocable, except that a Holder who has tendered a Note for repayment may
revoke such tender for repayment by written notice to the Trustee received
prior to 5:00 P.M., New York City time, on the tenth calendar day prior to the
repayment date.

     (d)  Unless otherwise specified in the applicable Company Order, the
repayment option may be exercised by the Holder of a Note for less than the
entire principal amount of the Note; provided that the principal amount of the
Note remaining outstanding after such repayment is an authorized denomination.
Upon such partial repayment such Note will be cancelled and a new Note or Notes
for the remaining principal amount thereof shall be issued in the name of the
Holder thereof.

     (e)  While any Note is represented by one or more Global Notes, any such
option for repayment may be exercised by the applicable participant in the
Depositary that has an account

31

 

for Notes with the Depositary, on behalf of the
beneficial owners of the Note represented by such Global Note or Notes, by
delivering a written notice substantially similar to the above-mentioned form
duly completed to the Trustee at its Corporate Trust Office (or such other
address of which the Company shall from time to time notify the Holders), at
least 30 but not more than 60 calendar days prior to the date of repayment.
Notices of election from such participants on behalf of beneficial owners of
the Global Note or Notes representing such Notes to exercise their option to
have such Notes repaid shall be received by the Trustee by 5:00 P.M., New York
City time, on the last day for giving such notice. All notices shall be
executed by a duly authorized officer of such participant (with signatures
guaranteed) and shall be irrevocable. In addition, beneficial owners of the
Global Note or Notes representing Notes shall effect delivery to the Depositary
at the time such notices of election are given by causing the applicable
participant to transfer such beneficial owner’s interest in the Global Note or
Notes representing such Notes, on the Depositary’s records, to the Trustee.

     SECTION 3.5 Extension.

     (a)  If a Company Order specifies an Extension Period or Periods for a
Note, the Company shall have an option to extend the Stated Maturity of such
Note for one or more Extension Periods specified in such Company Order, but not
beyond the Final Maturity Date specified therein. The Company may exercise
such option by notifying the Trustee of such exercise at least 45 but not more
than 60 calendar days prior to the Pre-Exercise Stated Maturity Date of such
Note, and after receipt of such notification, the Trustee shall send not later
than 40 calendar days prior to such Pre-Exercise Stated Maturity Date an
Extension Notice to the Holder of such Note.

     (b)  Upon the sending by the Trustee of an Extension Notice to the Holder
of a Note, the Stated Maturity of such Note will be extended automatically,
and, except as modified by the Extension Notice and, subject to Section 3.5(c)
and (d), such Note will have the same terms as prior to the sending of such
Extension Notice.

     (c)  Notwithstanding Sections 3.5(a) and (b), not later than 20 calendar
days prior to the Pre-Exercise Stated Maturity Date, the Company may, at its
option, revoke the interest rate, in the case of a Fixed Rate Note, or the
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, provided
for in the Extension Notice and establish a higher interest rate, in the case
of a Fixed Rate Note, or a Spread and/or Spread Multiplier resulting in a
higher interest rate, in the case of a Floating Rate Note, for the Extension
Period by causing the Trustee to send by telegram, telex, facsimile
transmission, hand delivery or letter (first class, postage prepaid) notice of
such higher interest rate or Spread and/or Spread Multiplier resulting in a
higher interest rate, as the case may be, to the Holder of such Note, and such
notice will be irrevocable. All Notes with respect to which the Stated
Maturity is extended will bear such higher interest rate, in the case of a
Fixed Rate Note, or Spread and/or Spread Multiplier resulting in a higher
interest rate, in the case of a Floating Rate Note, for the Extension Period,
whether or not tendered for repayment as provided in Section 3.5(d).

     (d)  If the Company extends the Stated Maturity of a Note (including, if
such Stated Maturity has previously been extended, the Stated Maturity as
previously extended), the Holder of such Note shall have the option to elect
repayment of such Note, in whole but not in part, by

32

 

the Company on the
Pre-Exercise Stated Maturity Date (including, if such Stated Maturity has
previously been extended, the last day of the then current Extension Period),
at a price equal to the principal amount thereof plus accrued and unpaid
interest to but excluding such date. In order for a Note to be so repaid on
the Pre-Exercise Stated Maturity Date, the Holder thereof must follow the
procedures set forth in Section 3.4 for optional repayment, except that the
period for delivery of such Note or notification to the Trustee will be at
least 25 but not more than 35 calendar days prior to the Pre-Exercise Stated
Maturity Date. A Holder who has tendered a Note for repayment following
receipt of an Extension Notice may revoke such tender for repayment by written
notice to the Trustee received prior to 5:00 P.M., New York City time, on the
tenth calendar day prior to the Pre-Exercise Stated Maturity Date.

     SECTION 3.6 Reset Notes.

     (a)  If a Company Order specifies Optional Interest Reset Dates for a Note,
the Company shall have an option to reset the interest rate of a Fixed Rate
Note or the Spread and/or Spread Multiplier of a Floating Rate Note, subject to
any formula for such resetting specified in such Company Order. The Company
may exercise such option by notifying the Trustee of such exercise at least 45
but not more than 60 calendar days prior to an Optional Interest Reset Date for
such Note. If the Company so notifies the Trustee of such exercise, the
Trustee shall send not later than 40 calendar days prior to such Optional
Interest Reset Date, by telegram, telex, facsimile transmission, hand delivery
or letter (first class, postage prepaid) to the Holder of such Note, a Reset
Notice, including the date or dates on which or the period or periods during
which and the price or prices at which redemption of such Note may occur during
the Subsequent Interest Period commencing on such Optional Interest Reset Date.

     (b)  Notwithstanding Section 3.6(a), not later than 20 calendar days prior
to an Optional Interest Reset Date for a Note, the Company may, at its option,
revoke the interest rate, in the, case of a Fixed Rate Note, or the Spread
and/or Spread Multiplier, in the case of a Floating Rate Note, provided for in
a Reset Notice and establish a higher interest rate, in the case of a Fixed
Rate Note, or a Spread and/or Spread Multiplier resulting in a higher interest
rate, in the case of a Floating Rate Note, for the Subsequent Interest Period
commencing on such Optional Interest Reset Date by causing the Trustee to send
by telegram, telex, facsimile transmission, hand delivery or letter (first
class, postage prepaid) notice of such higher interest rate or Spread and/or
Spread Multiplier resulting in a higher interest rate, as the case may be, to
the Holder of such Note, and such notice will be irrevocable. All Notes with
respect to which the interest rate or Spread and/or Spread Multiplier is reset
on an Optional Interest Reset Date to a higher interest rate or Spread and/or
Spread Multiplier resulting in a higher interest rate will bear such higher
interest rate, in the case of a Fixed Rate Note, or Spread and/or Spread
Multiplier resulting in a higher interest rate, in the case of a Floating Rate
Note, whether or not tendered for repayment as provided in Section 3.6(c).

     (c)  If the Company elects prior to an Optional Interest Reset Date to
reset the interest rate or the Spread and/or Spread Multiplier of a Note, the
Holder of such Note shall have the option to elect repayment of such Note, in
whole but not in part, by the Company on such
Optional Interest Reset Date at a price equal to the principal amount
thereof plus accrued and unpaid interest to but excluding such Optional
Interest Reset Date. In order for a Note to be so repaid on an Optional
Interest Reset Date, the Holder thereof must follow the procedures set

33

 

forth in
Section 3.4, except that the period for delivery of such Note or notification
to the Trustee will be at least 25 but not more than 35 calendar days prior to
such Optional Interest Reset Date. A Holder who has tendered a Note for
repayment following receipt of a Reset Notice may revoke such tender for
repayment by written notice to the Trustee received prior to 5:00 P.M., New
York City time, on the tenth calendar day prior to such Optional Interest Reset
Date.

ARTICLE IV

SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS

     SECTION 4.1 Satisfaction and Discharge.

     This Indenture shall, upon the request of the Company set forth in an
Officers’ Certificate, cease to be of further effect and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

     (i)  either

		
	 	     (A) all Notes theretofore authenticated and delivered (other
than (1) Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.7, (2) Notes
for which payment money has theretofore been deposited with or paid
to the Trustee and thereafter repaid to the Company or discharged
from such trust, as provided in Section 4.3) have been delivered to
the Trustee for cancellation; or
	 
	 	     (B) all such Notes not theretofore delivered to the Trustee
for cancellation,

		
	 	     (1) have become due and payable, or
	 
	 	     (2) will become due and payable at their Stated Maturity
within one year, or
	 
	 	     (3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice by the Trustee in the name, and at the expense, of
the Company,

and the Company, in the case of (1), (2) or (3) of this subclause (B), has
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust for such purpose an amount in United States dollars, U.S. Government
Obligations maturing as to principal and interest in such amounts and at such
times as will ensure the availability of United States dollars, or a
combination of United States dollars and U.S. Government Obligations,
sufficient to pay and discharge the entire indebtedness on such Notes for
principal (and premium, if any) and interest to the date of such deposit (in
the case of Notes which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be; provided, however, in the event a
petition for relief under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, is filed with respect to the Company within 91 days after
the deposit and the Trustee is required to return the deposited

34

 

money to the
Company, the obligations of the Company under this Indenture with respect to
such Notes shall not be deemed terminated or discharged;

		
	 	     (ii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
	 
	 	     (iii) the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to such Notes have been complied with; and
	 
	 	     (iv) the Company has delivered to the Trustee an Opinion of Counsel
or a ruling by the Internal Revenue Service to the effect that Holders of
the Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge.

Notwithstanding the satisfaction and discharge of this Indenture, this
Indenture shall continue in effect as to (i) rights of registration of transfer
and exchange of Notes, (ii) substitution of apparently mutilated, defaced,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and any premium and interest thereon, upon the
original stated due dates therefor (but not upon acceleration of maturity),
(iv) the rights, obligations and immunities of the Trustee hereunder and (v)
the rights of the Holders of Notes as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them), and the
Trustee, on demand of the Company accompanied by an Officers’ Certificate and
an Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture. Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 8.7 shall survive.

     SECTION 4.2 Deposited Moneys to Be Held in Trust by Trustee.

     Subject to Section 4.3, all moneys and U.S. Government Obligations
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by it to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the Holders of
the particular Notes for the payment or redemption of which such moneys and
U.S. Government Obligations have been deposited with the Trustee, of all sums
due and to become due thereon for principal and premium, if any, and interest.

     SECTION 4.3 Return of Unclaimed Moneys.

     Any moneys deposited with or paid to the Trustee for payment of the
principal of or any premium or interest on any Notes and not applied but
remaining unclaimed by the Holders of such Notes for two years after the date
upon which the principal of or any premium or interest on such Notes, as the
case may be, shall have become due and payable, shall be repaid to the Company
by the Trustee on written demand and all liability of the Trustee shall
thereupon cease;
and any Holder of any of such Notes shall thereafter look only to the
Company for any payment which such Holder may be entitled to collect; provided,
however, that the Trustee before being required to make any such repayment, may
at the expense of the Company cause to be mailed to

35

 

such Holder notice that
such money remains unclaimed and that, after a date specified therein which
shall not be less than 30 days from the date of such mailing, any unclaimed
balance of such money then remaining will be repaid to the Company.

     SECTION 4.4 Reinstatement.

     If the Trustee is unable to apply any money or U.S. Government Obligations
in accordance with Section 4.1 by reason of any legal proceeding or any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company’s obligations under this
Indenture with respect to the Notes to which such money or U.S. Government
Obligations were to have been applied shall be revived and reinstated as though
no deposit had occurred pursuant to Section 4.1 until such time as the Trustee
is permitted to apply such money or U.S. Government Obligations in accordance
with Section 4.1; provided, however, that if the Company has made any payment
of principal of or any premium or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee.

ARTICLE V

PARTICULAR COVENANTS OF THE COMPANY

     SECTION 5.1 Payment of Principal, Premium and Interest.

     The Company covenants and agrees for the benefit of the Holders of the
Notes that it will duly and punctually pay or cause to be paid the principal of
and any premium and interest on each of the Notes at the places, at the
respective times and in the manner provided in such Notes.

     SECTION 5.2 Office for Notices and Payments, etc.

     So long as any of the Notes remain outstanding, the Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
the Notes may be presented for registration of transfer and for exchange as in
this Indenture provided, and where, at any time when the Company is obligated
to make a payment upon Notes (other than a payment as to which it is permitted
to make such payment by check), the Notes may be presented for payment, and
shall maintain at any such office or agency and at its principal office an
office or agency where notices and demands to or upon the Company in respect of
the Notes or of this Indenture may be served; provided that the Company may
maintain at its principal executive offices, one or more other offices or
agencies for any or all of the foregoing purposes; the Company hereby appoints
the Trustee as agent of the Company for the foregoing purposes. The Company
will give to the Trustee written notice of the location of each such office or
agency and of any change of location thereof. In case the Company shall fail
to maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof,
presentations may be made and notices and demands may be served at the
Corporate Trust Office of the Trustee.

36

 

     SECTION 5.3 Appointments to Fill Vacancies in Trustee’s Office.

     The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 8.11, a Trustee, so
that there shall at all times be a Trustee hereunder.

     SECTION 5.4 Annual Statement and Notice.

     (a)  The Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company, beginning with the fiscal year ending
December 31, 2003, an Officers’ Certificate which complies with TIA Section
314(a)(4) stating that in the course of the performance by the signers of their
duties as officers of the Company they would obtain knowledge of any default by
the Company in the performance of any covenant contained in this Indenture or
an Event of Default stating whether they have obtained knowledge of any such
default or such Event of Default, and, if so, specifying each such default or
such Event of Default of which the signers have knowledge, and the nature and
status thereof.

     (b)  The Company shall give to the Trustee written notice of the occurrence
of an Event of Default within five days after the Company becomes aware of such
occurrence.

     SECTION 5.5 Corporate Existence.

     Subject to Article XI, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.

     SECTION 5.6 Limitation Upon Mortgages and Liens.

     The Company will not at any time directly or indirectly create or assume
and will not cause or permit a Subsidiary directly or indirectly to create or
assume, except in favor of the Company or a Wholly-Owned Subsidiary, any
mortgage, pledge or other lien or encumbrance upon any Principal Facility or
any interest it may have therein or upon any stock of any Regulated Subsidiary
or any indebtedness of any Subsidiary to the Company or any other Subsidiary,
whether now owned or hereafter acquired, without making effective provision
(and the Company covenants that in such case it will make or cause to be made,
effective provision) whereby the outstanding Notes and any other indebtedness
of the Company then entitled thereto shall be secured by such mortgage, pledge,
lien or encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured; provided, however, that the foregoing
covenant shall not be applicable to the lien of the Bond Indenture or Permitted
Encumbrances.

     SECTION 5.7 Waiver of Certain Covenants.

     The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 5.6 (and if so specified, any other covenant not set forth herein
and specified pursuant to Section 2.5 to be

37

 

applicable to any Notes, except as
otherwise provided pursuant to Section 2.5), if before the time for such
compliance the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding shall either waive such compliance in such instance
or generally waive compliance with such term, provision or condition, but no
waiver shall extend to or affect such term, provision or condition except to
the extent expressly so waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.

ARTICLE VI

NOTEHOLDER LISTS AND REPORTS

BY THE COMPANY AND THE TRUSTEE

     SECTION 6.1 Noteholder Lists.

     The Company will, so long as any Notes are outstanding under this
Indenture, furnish or cause to be furnished to the Trustee within 15 days prior
to each Interest Payment Date on Notes then outstanding, and at such other
times as the Trustee may request in writing, the information required by TIA
Section 312(a), which the Trustee shall preserve as required by TIA Section
312(a). The Trustee shall also comply with TIA Section 312(b), but the
Trustee, the Company and each Person acting on behalf of the Trustee or the
Company shall have the protection of TIA Section 312(c).

     SECTION 6.2 Securities and Exchange Commission Reports.

     The Company shall (a) file with the Trustee, within 15 days after the
Company is required to file the same with the Securities and Exchange
Commission, copies of the reports, information and documents (or portions
thereof) required to be so filed pursuant to TIA Section 314(a), and (b) comply
with the other provisions of TIA Section 314(a).

     SECTION 6.3 Reports by the Trustee.

     The Trustee shall (a) transmit within 60 days after May 15 in each year,
beginning with the year 2004, to the Noteholders specified in TIA Section
3.13(c) and to the Securities and Exchange Commission, a brief report dated as
of such May 15 and complying with the requirements of TIA Section 313(a), but
no report shall be required if no event described in TIA Section 313(a) shall
have occurred within the previous twelve months ending on such date. The
Trustee shall also comply with the other provisions of TIA Section 313(b)(2).

ARTICLE VII

REMEDIES OF THE TRUSTEE AND

NOTEHOLDERS ON EVENT OF DEFAULT

     SECTION 7.1 Events of Default.

     “Event of Default” where used herein with respect to any Notes means any
one of the following events (whatever the reason for such Event of Default and
whether it shall be

38

 

voluntary or involuntary or be effected by operation of
law, pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):

     (a)  default in the payment of any interest upon any Note when it becomes
due and payable, and continuance of such default for a period of 30 days; or

     (b)  default in the payment of the principal of (and premium, if any, on)
any Note at its Maturity; or

     (c)  default in the performance or breach of any covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section 7.1 specifically
dealt with), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or

     (d)  default (A) in the payment of any principal of or interest on any
Indebtedness of the Company (other than Notes), aggregating more than
$10,000,000 in principal amount, when due after giving effect to any applicable
grace period or (B) in the performance of any other term or provision of any
Indebtedness of the Company (other than Notes) in excess of $10,000,000
principal amount that results in such Indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise become due and
payable, and such acceleration shall not have been rescinded or annulled, or
such Indebtedness shall not have been discharged, within a period of 15 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding, a written notice
specifying such default or defaults and stating that such notice is a “Notice
of Default” hereunder; or

     (e)  the entry against the Company of one or more judgments, decrees or
orders by a court having jurisdiction in the premises from which no appeal may
be or is taken for the payment of money, either individually or in the
aggregate, in excess of $10,000,000, and the continuance of such judgment,
decree or order unsatisfied and in effect for any period of 45 consecutive days
after the amount thereof is due without a stay of execution and there has been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes then
outstanding, a written notice specifying such entry and continuance of
such judgment, decree or order and stating that such notice is a “Notice of
Default” hereunder; or

     (f)  the entry of a decree or order for relief in respect of the Company by
a court having jurisdiction in the premises in an involuntary case under the
federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or a
decree or order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal or
state law, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar

39

 

official) of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or

     (g)  the commencement by the Company of a voluntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or the consent by
it to the entry of an order for relief in an involuntary case under any such
law or to the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Company or of any
substantial part of its property, or the making by it of an assignment for the
benefit of its creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of corporate action
by the Company in furtherance of any such action; or

     (h)  any other Event of Default provided with respect to the particular
Note specified in the applicable Company Order.

     SECTION 7.2 Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default with respect to the Notes then outstanding occurs
and is continuing, then in every such case the Trust or the Holders of not less
than 25% in aggregate principal amount, of the Notes then outstanding may
declare the principal amount of all the Notes to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount shall become
immediately due and payable. Upon payment of such amount in United States
dollars, all obligations of the Company in respect of the payment of principal
of the Notes shall terminate.

     At the time after such a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article provided,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if

     (a)  the Company has paid or deposited with the Trustee a sum in United
States dollars sufficient to pay

		
	 	     (i) all overdue installments of interest on all Notes,

		
	 	     (ii) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such Notes,
	 
	 	     (iii) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest on each Note at the rate
borne by such Note, and
	 
	 	     (iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;

40

 

     and

     (b)  All Events of Default with respect to the Notes, other than the
nonpayment of the principal of Notes which has become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
7.11.

No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.

     SECTION 7.3 Collection and Suits for Enforcement by Trustee.

     The Company covenants that if

     (a)  default is made in the payment of any installment of interest on any
Note when such interest becomes due and payable and such default continues for
a period of 30 days, or

     (b)  default is made in the payment of principal of (or premium, if any,
on) any Notes as and when the same shall have become due and payable,

the Company shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Notes, the amount then due and payable on such Notes for
principal (and premium, if any) and interest, if any, and, to the extent that
payment of such interest shall be legally enforceable, interest upon the
overdue principal (and premium, if any) and upon overdue installments of
interest at the rate borne by the Notes; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

     If the Company fails to pay such amount forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor under such Notes, and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Notes wherever
situated.

     If an Event of Default with respect to any Notes occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders of the Notes by such appropriate judicial proceedings
as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement
of any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

     SECTION 7.4 Trustee May File Proofs of Claim.

     In the case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, relative to the Company or
any other obligor upon the Notes or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of such

41

 

Notes shall then be due and payable as therein expressed or
by declaration of acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,

     (a)  to file and prove a claim for the whole amount of principal (or, if
any Notes are Original Issue Discount Securities, the Amortized Face Amount
thereof or such other portion of the principal amount as may be due and payable
with respect to such Original Issue Discount Notes pursuant to a declaration in
accordance with Section 7.2) (and premium, if any) and interest owning and
unpaid in respect of the Notes and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders of such Notes
allowed in such judicial proceeding, and

     (b)  to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

     and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
such Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to such Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 8.6.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

     SECTION 7.5 Trustee May Enforce Claims Without Possession of Notes.

     All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of such
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the compensation, expenses, disbursements and
advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes in respect of which such judgment has been recovered.

     SECTION 7.6 Application of Moneys Collected by Trustee.

     Any moneys collected by the Trustee with respect to any of the Notes shall
be applied in the order following, at the date or dates fixed by the Trustee
for the distribution of such moneys, upon presentation of the several Notes,
and stamping thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:

		
	 	     FIRST: To the payment of all amounts due to the Trustee pursuant to
Section 8.7;

42

 

		
	 	     SECOND: In case the principal of the Notes then outstanding in
respect of which such moneys have been collected shall not have become
due and be unpaid, to the payment of interest on the Notes, in the order
of the maturity of the installments of such interest, with interest (to
the extent allowed by law and to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at
the rate borne by the Notes, such payments to be made ratably to the
persons entitled thereto;
	 
	 	     THIRD: In case the principal of the Notes then outstanding in
respect of which such moneys have been collected shall have become due,
by declaration or otherwise, to the payment of the whole amount then
owing and unpaid upon the Notes for principal and any premium and
interest thereon, with interest on the overdue principal and any premium
and (to the extent allowed by law and to the extent that such interest
has been collected by the Trustee) upon overdue installments of interest
at the rate borne by the Notes; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Notes, then to the payment of such principal and any premium and interest
without preference or priority of principal and any premium over
interest, or of interest over principal and any premium or of any
installment of interest over any other installment of interest, or of any
Note over any other Note, ratably to the aggregate of such principal and
any premium and accrued and unpaid interest; and
	 
	 	     FOURTH: To the payment of the remainder, if any, to the Company,
its successors or assigns, or to whomsoever may lawfully be entitled to
the same, or as a court of competent jurisdiction may determine.

     SECTION 7.7 Proceedings by Noteholders.

     (a)  No Holder of any Note shall have any right by virtue of or by availing
of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such Holder previously shall have given to the Trustee written notice of
default with respect to such Note and of the continuance thereof, as
hereinabove provided, and unless also the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding, it being understood and intended, and being
expressly covenanted by the taker and the Holder of every Note with every other
taker and Holder and the Trustee that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Notes.

     (b)  Notwithstanding any other provision in this Indenture, however, the
rights of any Holder of any Note to receive payment of the principal of and any
premium and interest on such

43

 

Note, on or after the respective due dates
expressed in such Note (or, in the case of redemption, on the Redemption Date),
or to institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of such
Holder.

     SECTION 7.8 Proceedings by Trustee.

     In case of an Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any of such rights, either by suit in equity or by
action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture
or in aid of the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this Indenture or
by law.

     SECTION 7.9 Remedies Cumulative and Continuing.

     All powers and remedies given by this Article VII to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any powers and remedies hereof or of any other powers and remedies
available to the Trustee or the Holders of the Notes, by judicial proceedings
or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Holder of any of the Notes in exercising any right or power accruing
upon any default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to Section 7.7, every power and remedy given
by this Article VII or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Noteholders.

     SECTION 7.10 Restoration of Rights and Remedies.

     If the Trustee or any Noteholder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Noteholders
shall be restored severally and respectively to their former positions
hereunder and
thereafter all rights and remedies of the Company, the Trustee and the
Noteholders shall continue as though no such proceeding had been instituted.

     SECTION 7.11 Direction of Proceedings and Waiver of Defaults by Majority
Noteholders.

     The Holders of a majority in aggregate principal amount of the Notes then
outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that
(subject to Section 8.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee being advised by counsel determines that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees or

44

 

responsible officers shall
determine that the action or proceeding so directed would involve the Trustee
in personal liability or would be unduly prejudicial to the rights of
Noteholders not joining in such directions. Prior to any declaration
accelerating the Maturity of the Notes, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may on behalf of all of the
Holders of all of the Notes waive any past default or Event of Default
hereunder and its consequences, except a default (i) in the payment of
principal of or any premium or interest on any Note or (ii) in respect of a
covenant or provision hereof which pursuant to Section 12.2 cannot be modified
or amended without the consent of the Holder of each Note then outstanding that
would be affected thereby. Upon any such waiver, such default will cease to
exist, and any Event of Default arising therefrom will be deemed to have been
cured, for every purpose of the Indenture and the Notes, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.

     SECTION 7.12 Notice of Default.

     The Trustee shall, within 90 days after the occurrence of a default with
respect to the Notes, give to all Holders of the Notes specified in TIA Section
3.13(c), in the manner provided in Section 14.10, notice of such default,
unless such default shall have been cured before the giving of such notice, the
term “default for the purpose of this Section 7.12 being hereby defined to be
any event which is or after notice or lapse of time or both would become an
Event of Default; provided that, except in the case of default in the payment
of the principal of or any premium or interest on any of the Notes, the Trustee
shall be protected in withholding such notice if and so long as its board of
directors or trustees, executive committee, or a trust committee of directors
or trustees or responsible officers in good faith determines that the
withholding of such notice is in the interests of the Holders of the Notes.
The Trustee shall not be charged with knowledge of any Event of Default unless
a responsible officer of the Trustee assigned to the corporate trust division
of the Trustee shall have actual knowledge of such Event of Default.

     SECTION 7.13 Undertaking to Pay Costs.

     All parties to this Indenture agree, and each Holder of any Note by
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but this Section 7.13 shall not apply to any suit instituted by the
Trustee, or to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than 10% in principal amount of the Notes then
outstanding, or to any suit instituted by any Noteholder for the enforcement of
the payment of the principal of or any premium or interest on any Note on or
after the due date expressed in such Note.

45

 

ARTICLE VIII

CONCERNING THE TRUSTEE

     SECTION 8.1 Certain Duties and Responsibilities.

     (a)  Except during the continuance of an Event of Default,

		
	 	     (i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
	 
	 	     (ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.

     (b)  In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

     (c)  No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that

		
	 	     (i) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section 8.1.
	 
	 	     (ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
	 
	 	     (iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less
than a majority in principal amount of the Notes at the time
outstanding, determined as provided in Section 9.4, relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Notes; and
	 
	 	     (iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.

46

 

     (d)  Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
8.1.

     SECTION 8.2 Notice of Defaults.

     Within 90 days after the occurrence of any default hereunder the Trustee
shall transmit by mail to all Holders as their names and addresses appear in
the Note register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Note or in the payment of any sinking fund
installment with respect to any Notes, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of such Notes; and provided, further that in the case
of any default of the character specified in Section 7.1(c), no such notice to
Holders shall be given until at least 30 days after occurrence thereof. For
the purpose of this Section 8.2, the term “default” means any event which is,
or after notice or lapse of time or both would become, an Event of Default.

     SECTION 8.3 Certain Rights of Trustee.

     Subject to the provisions of Section 8.1:

     (a)  the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;

     (b)  any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers’ Certificate and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;

     (c)  whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers’ Certificate;

     (d)  the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;

     (e)  the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

47

 

     (f)  prior to the occurrence of an Event of Default and after the curing or
waiving of all such Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, approval or other paper or document, or the
books and records of the Company, unless requested in writing to do so by the
Holders of a majority in aggregate principal amount of the Notes then
outstanding; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding; the reasonable
expense of every such investigation shall be paid by the Company or, if paid by
the Trustee, shall be repaid by the Company upon demand; and

     (g)  the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

     SECTION 8.4 Not Responsible for Recitals or Issuance of Notes.

     The recitals contained herein and in the Notes, except the Trustee’s
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Notes or the proceeds thereof.

     SECTION 8.5 May Hold Notes.

     The Trustee, any Authenticating Agent, any Paying Agent, any Note
registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 8.8
and 8.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Note registrar
or such other agent.

     SECTION 8.6 Money Held in Trust.

     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.

     SECTION 8.7 Compensation and Reimbursement.

     The Company agrees:

     (a)  to pay to the Trustee such compensation that the Company and Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall

48

 

not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

     (b)  except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and

     (c)  to indemnity the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any its powers or duties hereunder.

     The provisions of this Section 8.7 shall survive this Indenture.

     SECTION 8.8 Disqualification; Conflicting Interests.

     (a)  If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 8.8, with respect to the Notes, it shall, within 90
days after ascertaining that it has such conflicting interest, either eliminate
such conflicting interest or resign in the manner and with the effect
hereinafter specified in this Article VIII.

     (b)  In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section 8.8, the Trustee shall, within 10 days after
the expiration of such 90-day period, transmit by mail to all Holders as their
names and addresses appear in the Note registrar, notice of such failure.

     (c)  For the purposes of this Section 8.8, the Trustee shall be deemed to
have a conflicting interest with respect to the Notes if

		
	 	     (i) the Trustee is trustee under another indenture under which any
securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other indenture
is a collateral trust indenture under which the only collateral consists
of Notes, provided that there shall be excluded from the operation
of this paragraph this Indenture with respect to any other indenture
or indenture under which securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if

		
	 	     (A) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are
hereafter qualified under the TIA, unless the Securities and
Exchange Commission shall have found and declared by order pursuant
to Section 305(b) or Section 307(c) of the TIA that differences
exist between the provisions of this Indenture and the provisions
of such other indenture or indentures which are so likely to
involve a material conflict of interest as to make it necessary in
the public interest or for the 

49

 

		
	 	protection of investors to
disqualify the Trustee from acting as such under this Indenture
with respect to such other indenture or indentures, or
	 
	 	     (B) the Company shall have sustained the burden of proving, on
application to the Securities and Exchange Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to such other indenture or indentures is not
so likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors
to disqualify the Trustee from acting as such under this Indenture
with respect to such other indenture or indentures;

		
	 	     (ii) the Trustee or any of its directors or executive officers is an
obligor upon the Notes or an underwriter for the Company;
	 
	 	     (iii) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with the Company or an underwriter for the Company;
	 
	 	     (iv) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (A) one individual may be a director or an executive officer, or
both, of the Trustee and a director or an executive officer, or both, of
the Company but may not be at the same time an executive officer of both
the Trustee and the Company; (B) if and so long as the number of
directors of the Trustee in office is more than nine, one additional
individual may be a director or an executive officer, or both, of the
Trustee and a director of the Company; and (C) the Trustee may be
designated by the Company or by any underwriter for the Company to act in
the capacity of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent or depositary, or in any other similar
capacity, or, subject to the provisions of paragraph (i) of this
Subsection, to act as trustee, whether under an indenture or otherwise;
	 
	 	     (v) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner
or executive officer thereof, or is beneficially owned, collectively, by
any two or more such persons;
	 
	 	     (vi) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), (A) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company not including the
Notes and securities issued under any other indenture under which the
Trustee is also trustee, or (B) 10% or more of any class of security of
an underwriter for the Company;

50

 

		
	 	     (vii) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly or is under direct or
indirect common control with, the Company;
	 
	 	     (viii) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection defined), 10% or more of any class of security of any
person who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Company; or
	 
	 	     (ix) the Trustee owns, on May 15 in any calendar year, in the
capacity of executor, administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest under
paragraph (vi), (vii) or (viii) of this Subsection. As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator or testamentary trustee of an estate which
included them, the provisions of the preceding sentence shall not apply,
for a period of two years from the date of such acquisition, to the
extent that such securities included in such estate do not exceed 25% of
such voting securities or 25% of any such class of security. Promptly
after May 15 in each calendar year, the Trustee shall make a check of its
holdings of such securities in any of the above-mentioned capacities as
of such May 15. If the Company fails to make payment in full of the
principal of (or premium, if any) or interest on any of the Notes when
and as the same becomes due and payable, and such failure continues for
30 days thereafter, the Trustee shall make a prompt check of its holdings
of such securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph, all such
securities so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the Trustee for
the purposes of paragraphs (vi), (vii) and (viii) of this Subsection.

     The specification of percentages in paragraphs (v) to (ix), inclusive, of
this Subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (iii) or
(vii) of this Subsection.

     For the purposes of paragraphs (vi), (vii), (viii) and (ix) of this
Subsection only, (A) the terms “security” and “securities” shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be “In default” when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (C) the Trustee shall not be
deemed to be the owner or holder of (1) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in

51

 

clause (B) above, or (2) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (3) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representative
capacity.

     (d)  For the purposes of this Section 8.8:

		
	 	     (i) The term “underwriter”, when used with reference to the Company,
means every person who, within three years prior to the time as of which
the determination is made, has purchased from the Company with a view to,
or has offered or sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors’ or sellers’ commission.

		
	 	     (ii) The term “director” means any director of a corporation or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.

		
	 	     (iii) The term “person” means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term “trust” shall include only
a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
	 
	 	     (iv) The term “voting security” means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs
of a person.
	 
	 	     (v) The term “Company” means any obligor upon the Notes.
	 
	 	     (vi) The term “executive officer” means the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization
whether incorporated or unincorporated, but shall not include the
chairman of the board of directors.

     (e)  The percentages of voting securities and other securities specified in
this Section 8.8 shall be calculated in accordance with the following
provisions:

		
	 	     (i) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section 8.8 (each of
whom is referred to as a “person” in this paragraph) means such amount of
the outstanding voting securities of such person as entitles the holder
or holders thereof to cast such specified percentage 

52

 

		
	 	of the aggregate
votes which the holders of all the outstanding voting securities of such
person are entitled to cast in the direction or management of the affairs
of such person.
	 
	 	     (ii) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the class
outstanding.
	 
	 	     (iii) The term “amount”, when used in regard to securities, means
the principal amount if relating to evidences of indebtedness, the number
of shares if relating to capital shares and the number of units if
relating to any other kind of security.
	 
	 	     (iv) The term “outstanding” means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:

		
	 	     (A) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
	 
	 	     (B) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as to
principal or interest or otherwise;
	 
	 	     (C) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or
interest or otherwise; and
	 
	 	     (D) securities held in escrow if placed in escrow by the
issuer thereof;

provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.

		
	 	     (v) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes and provided, further that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient
to constitute them securities of different classes, whether or not they
are issued under a single indenture.

     SECTION 8.9 Corporate Trustee Required; Eligibility.

     There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 subject to supervision or examination by Federal or
State authority and having its Corporate Trust Office in Chicago, Illinois or
New York, New York, to the extent there is such an institution eligible and
willing to serve. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said

53

 

supervising or
examining authority, then for the purposes of this Section 8.9, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.9, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article VIII.

     SECTION 8.10 Resignation and Removal; Appointment of Successor.

     (a)  No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VIII shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 8.11.

     (b)  The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required
by Section 8.11 shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

     (c)  The Trustee may be removed at any time by the Holders of a majority in
aggregate principal amount of the Notes then outstanding, delivered to the
Trustee and to the Company.

     (d)  If at any time:

		
	 	     (i) the Trustee shall fail to comply with Section 8.8(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Note for at least six months, or
	 
	 	     (ii) the Trustee shall cease to be eligible under Section 8.9 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
	 
	 	     (iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee, or (B) subject to Section 7.13, any Holder who has been a bona fide
Holder of a Note for at least six months may, on behalf of such Holder and all
others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee or Trustees.

     (e)  If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees and shall comply with the applicable requirements of Section 8.11.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by the
Holders of a majority in aggregate principal amount of the Notes then
outstanding delivered to the Company

54

 

and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section 8.11, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 8.11, any
Holder who has been a bona fide Holder of a Note for at least six months may,
on behalf of such Holder and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.

     (f)  The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to all Holders as
their names and addresses appear in the Note register. Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.

     SECTION 8.11 Acceptance of Appointment by Successor.

     (a)  Every successor Trustee shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of the compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.

     (b)  Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section 8.11.

     (c)  No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article VIII.

     SECTION 8.12 Merger, Conversion, Consolidation or Succession to Business

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any Notes
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.

55

 

     SECTION 8.13 Preferential Collection of Claims Against Company.

     (a)  Subject to Subsection (b) of this Section 8.13, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within four months prior to a default, as defined in Subsection (c)
of this Section 8.13, or subsequent to such a default, then, unless and until
such default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the Notes
and the holders of other indenture securities, as defined in Subsection (c) of
this Section 8.13:

		
	 	     (i) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such four months’ period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (ii) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a petition
in bankruptcy had been filed by or against the Company upon the date of
such default; and

		
	 	     (ii) all property received by the Trustee in respect of any claims
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four
months’ period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
	 
	 	     Nothing herein contained, however, shall affect the right of the Trustee:

		
	 	     (A) to retain for its own account (1) payments made on account
of any such claim by any Person (other than the Company) who is
liable thereon, and (2) the proceeds of the bona fide sale of any
such claim by the Trustee to a third Person, and (3) distributions
made in cash, securities or other property in respect of claims
filed against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal Bankruptcy
Act or applicable State law;

		
	 	     (B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held
prior to the beginning of such four months’ period;

		
	 	     (C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such four months’ period
and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall
sustain the burden of proving that at the time such property was so
received the Trustee had no reasonable cause to believe that a
default, as defined in Subsection (C) of this Section 8.13, would
occur within four months; or
	 
	 	     (D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security
for such claim as provided 

56

 

		
	 	in paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.

     For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such four months’ period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.

     If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on
account of the receipt by it from the Company of the funds and property in such
special account and before crediting to the respective claims of the Trustee
and the Holders and the holders of other indenture securities dividends on
claims filed against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources, other
than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term “dividends” shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion among the Trustee, the
Holders and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole
or in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Holders and the holders of other indenture securities with respect to their
respective claims, in which event it shall not be necessary to liquidate or to
appraise the value of any securities or other property held in such special
account or as security for any such claim, or to make a specific allocation of
such distributions as between the secured and unsecured portions of such
claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.

     Any Trustee which has resigned or been removed after the beginning of such
four months’ period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months’ period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:

57

 

		
	 	     (i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four months’ period; and
	 
	 	     (ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.

     (b)  There shall be excluded from the operation of Subsection (a) of this
Section 8.13 a creditor relationship arising from:

		
	 	     (i) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
	 
	 	     (ii) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purposes of
preserving any property which shall at any time be subject to the lien of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the circumstances
surrounding the making thereof is given to the Holders at the time and in
the manner provided in this Indenture;
	 
	 	     (iii) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
	 
	 	     (iv) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (C) of
this Section 8.13;
	 
	 	     (v) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; and
	 
	 	     (vi) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper, as defined in Subsection
(c) of this Section 8.13.

     (c)  For the purposes of this Section 8.13 only:

		
	 	     (i) the term “default” means any failure to make payment in full of
the principal of or interest on any of the Notes or upon the other
indenture securities when and as such principal or interest becomes due
and payable;
	 
	 	     (ii) the term “other indenture securities” means securities upon
which the Company is an obligor outstanding under any other indenture (A)
under which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of this Section 8.13, and (C)
under which a default exists at the time of the apportionment of the
funds and property held in such special account;

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	 	     (iii) the term “cash transaction” means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
	 
	 	     (iv) the term “self-liquidating paper” means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
	 
	 	     (v) the term “Company” means any obligor upon the Notes; and
	 
	 	     (vi) the term “Federal Bankruptcy Act” means the Bankruptcy Act or
Title 11 of the United States Code.

     SECTION 8.14 Appointment of Authenticating Agent.

     At any time when any of the Notes remain outstanding the Trustee may
appoint an Authenticating Agent or Agents with respect to the Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 2.6, and Notes so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the
Trustees certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 8.14, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this
Section 8.14, such Authenticating Agent shall resign immediately in the
manner and with the effect specified in this Section 8.14.

     Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding

59

 

to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 8.14, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 8.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Note register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 8.14.

     The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 8.14, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 8.7.

     If an appointment is made pursuant to Section 9.14, the Notes may have
endorsed thereon, in addition to the Trustee’s certificate of authentication,
an alternate certificate of authentication in the following form:

Trustee’s Certificate of Authentication

This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 
	 	BANK ONE TRUST COMPANY, N.A., as Trustee
	 
	 	By:	 
	 
	 	 	
 

Authorized Signatory
	 
	 	 	 
	 
	 	By:	 
	 
	 	 	
 

Authorized Signatory

ARTICLE IX

CONCERNING THE NOTEHOLDERS

     SECTION 9.1 Action by Noteholders.

     (a)  Whenever in this Indenture it is provided that the Holders of a
specified percentage in aggregate principal amount of the Notes may take any
action (the making of any demand or request, or the giving of any notice,
consents or waivers in lieu of a Noteholders’

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meeting or the taking of any
other action), the fact that at the time of taking any such action the Holders
of such specified percentage have joined therein may be evidenced (i) by any
instrument or any number of instruments of similar tenor executed by such
Noteholders in person or by agent or proxy appointed in writing, or (ii) by the
record of such Noteholders voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with Article X, or (iii) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders.

     (b)  Whenever in this Indenture it is provided that the Holders of a
specified percentage in aggregate principal amount of the Notes may take any
action, any party designated in writing by the Depositary, or by any party so
designated by the Depositary, as the owner of a beneficial interest of a
specified principal amount of any Global Note held by such Depositary shall be
deemed to be a Holder of Notes in such principal amount for such purpose.

     SECTION 9.2 Proof of Execution by Noteholders.

     (a)  Subject to Sections 8.1 and 10.5, proof of the execution of any
instruments by a Noteholder or the agent or proxy for such Noteholder shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Notes shall be proved by the Note register of
the Company or by a certificate of the Note registrar.

     (b)  The record of any Noteholders’ meeting shall be proven in the manner
provided for in Section 10.6.

     SECTION 9.3 Who Deemed Absolute Owners.

     Subject to Sections 2.4(f) and 9.1, the Company, the Trustee, any
Authenticating Agent and Note registrar may deem the person in whose name any
Note shall be registered upon the Note register of the Company to be, and may
treat such person as, the absolute owner of such Note (whether or not such Note
shall be overdue) for the purpose of receiving payment of or on account of the
principal of and any premium and interest on such Note, and for all other
purposes; and neither the Company nor the Trustee nor any Authenticating Agent
nor any Note registrar shall be affected by any notice to the contrary. All
such payments shall be valid and effectual to satisfy and discharge the
liability upon any such Note to the extent of the sum or sums so paid.

     SECTION 9.4 Company-Owned Notes Disregarded.

     In determining whether the Holders of the requisite aggregate principal
amount of Notes then outstanding have concurred in any direction, consent or
waiver under this Indenture, Notes which are owned by the Company or any other
obligor on the Notes or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
any other obligor on the Notes shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Notes which the Trustee knows are so
owned shall be so disregarded. Notes so owned which have been pledged in good
faith may be regarded as outstanding for the purposes

61

 

of this Section 9.4 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee’s
right to vote such Notes and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.

     SECTION 9.5 Revocation of Consents; Future Holders Bound.

     At any time prior to the taking of any action by the holders of the
percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any Holder of a Note, which is shown
by the evidence to be included in the Notes the Holders of which have consented
to such action may, by filing written notice with the Trustee at the Corporate
Trust Office of the Trustee and upon proof of ownership as provided in Section
9.2(a), revoke such action so far as it concerns such Note. Except as
aforesaid any such action taken by the Holder of any Note shall be conclusive
and binding upon such Holder and upon all future Holders and owners of such
Note and of any Notes issued in exchange or substitution therefor, irrespective
of whether or not any notation thereof is made upon such Note or such other
Notes.

     SECTION 9.6 Record Date for Noteholder Acts.

     If the Company shall solicit from the Noteholders any request, demand,
authorization, direction, notice, consent, waiver or other act, the Company
may, at its option, by Board Resolution, fix in advance a record date in
compliance with TIA Section 3.16(c) for the determination of Noteholders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other act, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other act may be given before or after
the record date, but only the Noteholders of record at the close of business on
the record date shall be deemed to be Noteholders for the purpose of
determining whether Holders of the requisite aggregate principal amount of
Notes then outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other act, and for
that purpose the outstanding Notes shall be computed as of the record date;
provided, however, that no such authorization, agreement or consent by the
Noteholders on the record date shall be deemed effective unless it shall become
effective pursuant to this Indenture not later than six months after the record
date.

ARTICLE X

NOTEHOLDERS’ MEETING

     SECTION 10.1 Purposes of Meetings.

     A meeting of Noteholders may be called at any time and from time to time
pursuant to this Article X for any of the following purposes:

     (a)  to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to Article VII;

62

 

     (b)  to remove the Trustee and nominate a successor Trustee pursuant to
Article VIII;

     (c)  to consent to the execution of an indenture or indentures supplemental
hereto pursuant to Section 12.2; or

     (d)  to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Notes, as the case
may be, under any other provision of this Indenture or under applicable law.

     SECTION 10.2 Call of Meetings by Trustee.

     The Trustee may at any time call a meeting of Holders of Notes to take any
action specified in Section 10.1, to be held at such time and at such place as
the Trustee shall determine. Notice of every such meeting of Noteholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given to Holders of the
Notes that may be affected by the action proposed to be taken at such meeting
in the manner provided in Section 14.10. Such notice shall be given not less
than 20 nor more than 90 days prior to the date fixed for such meeting.

     SECTION 10.3 Call of Meetings by Company or Noteholders.

     In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting and may call
such meeting to take any action authorized in Section 10.1, by giving notice
thereof as provided in Section 10.2.

     SECTION 10.4 Qualifications for Voting.

     To be entitled to vote at any meetings of Noteholders a Person shall (a)
be a Holder of one or more Notes affected by the action proposed to be taken or
(b) be a Person appointed by an instrument in writing as proxy by a Holder of
one or more such Notes. The only Persons who shall be entitled to be present
or to speak at any meeting of Noteholders shall be the Persons
entitled to vote at such meeting and their counsel and any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.

     SECTION 10.5 Regulations.

     (a)  Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Noteholders, in regard to proof of the holding of Notes and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.

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     (b)  The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by the Noteholders as provided in Section 10.3, in which case the
Company or Noteholders calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by the Holders of a majority in
aggregate principal amount of the Notes present in person or by proxy at the
meeting.

     (c)  Subject to Section 9.4, at any meeting each Noteholder or proxy shall
be entitled to one vote for each $1,000 principal amount of Notes held or
represented by such Noteholder; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman
of the meeting shall have no right to vote other than by virtue of Notes held
by such chairman or instruments in writing as aforesaid duly designating such
chairman as the person to vote on behalf of other Noteholders. At any meeting
of Noteholders duly called pursuant to Section 10.2 or 10.3, the presence of
persons holding or representing Notes in an aggregate principal amount
sufficient to take action on any business for the transaction for which such
meeting was called shall constitute a quorum. Any meeting of Noteholders duly
called pursuant to Section 10.2 or 10.3 may be adjourned from time to time by
the Holders of a majority in aggregate principal amount of the Notes present in
person or by proxy at the meeting, whether or not constituting a quorum, and
the meeting may be held as so adjourned without further notice.

     SECTION 10.6 Voting.

     The vote upon any resolution submitted to any meeting of Noteholders shall
be by written ballots on which shall be subscribed the signatures of the
Holders of Notes or of their representatives by proxy and the principal amount
of Notes held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section 10.2.
The record shall show the principal amount of
the Notes voting in favor of or against any resolution. The record shall
be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee. Any
record so signed and verified shall be conclusive evidence of the matters
therein stated.

     SECTION 10.7 Right of Trustee or Noteholders not Delayed.

     Nothing in this Article X contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Noteholders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders of Notes under any of the provisions
of this Indenture or of the Notes.

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ARTICLE XI

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

     SECTION 11.1 Company May Consolidate, etc., only on Certain Terms.

     The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person unless:

     (a)  the corporation formed by such consolidation or into which the Company
is merged (the “successor corporation”) or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any State or the
District of Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if any)
and interest on all Notes and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;

     (b)  immediately after giving effect to such consolidation, merger,
conveyance, transfer or lease, no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing;

     (c)  if, as a result of such consolidation, merger, conveyance, transfer or
lease, properties or assets of the Company would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which would not otherwise
be permitted by this Indenture without making effective provision whereby the
Notes then outstanding and any other indebtedness of the Company then entitled
thereto will be equally and ratably secured with any and all indebtedness and
obligations secured thereby, the Company or the successor corporation or
Person, as the case may be, will take such action as will be necessary
effectively to secure all Notes equally and ratably with (or prior to) all
indebtedness secured thereby; and

     (d)  the Company has delivered to the Trustee an Officer’s Certificate and
an Opinion of Counsel each stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture comply with this Article XI
and that all conditions precedent herein
provided for relating to such consolidation, merger, conveyance or
transfer have been complied with.

     SECTION 11.2 Successor Corporation Substituted.

     Upon any consolidation or merger, or any conveyance, transfer or lease as
an entirety in accordance with Section 11.1, the successor corporation formed
by such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named as the
Company herein; provided, however, that no such conveyance or transfer shall
have the effect of releasing the Person named as the “Company” in the first
paragraph of this Indenture or any successor corporation which shall
theretofore have become such in the manner prescribed in this Article XI from
its liability as obligor and maker on any of the Notes.

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ARTICLE XII

SUPPLEMENTAL INDENTURES

     SECTION 12.1 Supplemental Indentures without Consent of Noteholders.

     (a)  The Company, when authorized by Board Resolution, and the Trustee may
at any time and from time to time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:

		
	 	     (i) to make such provision in regard to matters or questions arising
under this Indenture as may be necessary or desirable and not
inconsistent with this Indenture or for the purpose of supplying any
omission, curing any ambiguity, or curing, correcting or supplementing
any defective or inconsistent provision; provided that such provision
shall not adversely affect the interests of Holders of outstanding Notes
created prior to the execution of such supplemental indenture in any
material respect;
	 
	 	     (ii) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no Note outstanding created prior to the execution of such
supplemental indenture which is entitled to the benefit of such
provision;
	 
	 	     (iii) to secure the Notes;
	 
	 	     (iv) to establish the form of Notes as permitted by Section 2.1 or
to establish or reflect any terms of any Note determined pursuant to
Section 2.5;
	 
	 	     (v) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Notes;
	 
	 	     (vi) to grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers or authority;
	 
	 	     (vii) to permit the Trustee to comply with any duties imposed upon
it by law;
	 
	 	     (viii) to specify further the duties and responsibilities of, and to
define further the relationships among, the Trustee, any Authenticating
Agent and any paying agent;
	 
	 	     (ix) to add to the covenants of the Company for the benefit of the
Holders of all or any Notes (and if such covenants are to be for the
benefit of less than all Notes, stating that such covenants are expressly
being included solely for the benefit of such Notes) or to surrender a
right or power conferred on the Company herein; and
	 
	 	     (x) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all Notes, stating that such
Events of Default are expressly being included for the benefit of such
Notes).

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     (b)  The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.

     (c)  Any supplemental indenture authorized by this Section 12.1 may be
executed by the Company and the Trustee without the consent of the Holders of
any of the Notes then outstanding, notwithstanding any of the provisions of
Section 12.2.

     SECTION 12.2 Supplemental Indentures with Consent of Noteholders.

     (a)  With the consent (evidenced as provided in Section 9.1) of the Holders
of not less than a majority in aggregate principal amount of the Notes then
outstanding that would be affected by the particular supplemental indenture,
the Company, when authorized by Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Noteholders;
provided, however, that no such supplemental indenture shall:

		
	 	     (i) change the Stated Maturity of any Note; or reduce the rate of
interest on any Note; or change the method of calculating interest, or
any term used in the calculation of interest, or the period for which
interest is payable, on any Floating Rate Note; or reduce the principal
amount of any Note or any premium thereon; reduce the amount of the
principal of an Original Issue Discount Note that would be due and
payable upon a declaration of acceleration of the Maturity thereof, or
adversely affect the right of repayment or renewal, if any, at the option
of the Holder; or change the coin or currency in which the principal of
any Note or any premium or interest thereon is payable; or change the
date on which any Note may be redeemed; or adversely affect the rights of
any Noteholder to institute suit for the enforcement of any payment of
principal of or any premium or interest on any Note; in each case without
the consent of the Holder of each Note then outstanding that would be
affected thereby (for purposes of this
Section 12.2(a)(i) only, the term “Note” shall include Notes for
which an offer to purchase has been accepted by the Company); or
	 
	 	     (ii) reduce the aforesaid percentage of Notes, the Holders of which
are required to consent to any such supplemental indenture, or the
percentage in aggregate principal amount of the Notes then outstanding
the consent of the Holders of which is required for any waiver of certain
past defaults or Events of Default hereunder or the consequences thereof,
in each case without the consent of the Holders of all of the Notes then
outstanding.

     (b)  Upon the request of the Company, accompanied by a copy of the Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join

67

 

with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

     (c)  It shall not be necessary for the consent of the Holders of Notes
under this Section 12.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.

     (d)  Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Section 12.2, the Company shall give
notice in the manner provided in Section 14.10, setting forth in general terms
the substance of such supplemental indenture, to all Noteholders. Any failure
of the Company to give such notice, or any defect therein shall not, however,
in any way impair or affect the validity of any such supplemental indenture.

     SECTION 12.3 Compliance with Trust Indenture Act; Effect of Supplemental
Indentures.

     Any supplemental indenture executed pursuant to this Article XII shall
comply with the TIA. Upon the execution of any supplemental indenture pursuant
to this Article XII, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the Noteholders shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.

     SECTION 12.4 Notation on Notes.

     Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article XII may bear a notation in form approved by
the Trustee as to any matter provided for in such supplemental indenture. If
the Company or the Trustee shall so determine, new Notes so modified as to
conform in the opinion of the Trustee and the Board of Directors to any
modification of this Indenture contained in any such supplemental indenture may
be
prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Notes then outstanding.

     SECTION 12.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee.

     The Trustee, subject to Section 8.1, may receive an Officers’ Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant hereto complies with the requirements of this
Article XII.

68

 

ARTICLE XIII

IMMUNITY OF INCORPORATORS,

STOCKHOLDERS, OFFICERS AND DIRECTORS

     SECTION 13.1 Indenture and Notes Solely Corporate Obligations.

     No recourse for the payment of the principal of or any premium or interest
on any Note, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company, contained in this Indenture or in any supplemental indenture, or in
any Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and
as a consideration for, the execution of this Indenture and the issue of the
Notes.

ARTICLE XIV

MISCELLANEOUS PROVISIONS

     SECTION 14.1 Provisions Binding on Company’s Successors.

     All the covenants, stipulations, promises and agreements made by the
Company in this Indenture shall bind its successors and assigns whether so
expressed or not.

     SECTION 14.2 Official Acts by Successor Corporation.

     Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful successor of the Company.

     SECTION 14.3 Addresses for Notices, etc.

     Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the Noteholders on the
Company may be given or served by being deposited postage prepaid in a post
office letter box addressed (until another address is filed by the Company with
the Trustee) to MGE Energy, Inc., 133 South Blair Street, Madison, Wisconsin
53703, to the attention of the Corporate Secretary. Any notice, direction,
request or demand by any Noteholder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the Corporate Trust Office of the Trustee.

69

 

     SECTION 14.4 Governing Law.

     This Indenture and each Note shall be deemed to be a contract made under
the laws of the State of New York, and for all purposes shall be construed in
accordance with the laws of such State.

     SECTION 14.5 Evidence of Compliance with Conditions Precedent.

     (a)  Upon any application or demand by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee an
Officers’ Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.

     (b)  Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (i) a statement that each
Person making such certificate or opinion has read such covenant or condition
and the definitions relating thereto; (ii) a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinion contained in such certificate or opinion are based; (iii) a statement
that, in the opinion of each such Person, such Person has made such examination
or investigation as is necessary to enable such Person to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (iv) a statement as to whether or not, in the opinion of each such Person,
such condition or covenant has been complied with.

     (c)  In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

     (d)  Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such person knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

     (e)  Any certificate, statement or opinion of any officer of the Company,
or of counsel, may be based, insofar as it relates to accounting matters, upon
a certificate or opinion of or representations by an accountant or firm of
accountants, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the

70

 

 accounting matters upon which the certificate, statement or opinion of
such officer or counsel may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any
certificate or opinion of any firm of independent public accountants filed with
the Trustee shall contain a statement that such firm is independent.

     (f)  Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

     SECTION 14.6 Business Days.

     Unless otherwise provided herein, in any case where the date of Maturity
of the principal of or any premium or interest on any Note or the Redemption
Date of any Note is not a Business Day, then payment of such principal or any
premium or interest need not be made on such date 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 Redemption Date, and, in the case of payment, no interest
shall accrue for the period from and after such date.

     SECTION 14.7 Trust Indenture Act to Control.

     If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 317,
inclusive, of the TIA, such required provision shall control.

     SECTION 14.8 Table of Contents, Headings, etc.

     The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.

     SECTION 14.9 Execution in Counterparts.

     This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.

     SECTION 14.10 Manner of Mailing Notice to Noteholders.

     Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or the Company to or on the
Holders of Notes, as the case may be, shall be given or served by first-class
mail, postage prepaid, addressed to the Holders of such Notes at their last
addresses as the same appear on the Note register referred to in Section 2.6,
and any such notice shall be deemed to be given or served by being deposited in
a post office letter box in the form and manner provided in this Section 14.10.

[Remainder of Page Intentionally Left Blank]

71

 

     IN WITNESS WHEREOF, MGE Energy, Inc. has caused this Indenture to be
signed and acknowledged by its Chairman, President and Chief Executive Officer,
Vice President, Chief Financial Officer and Corporate Secretary, and its Vice
President and Treasurer, and Bank One Trust Company, N.A. has caused this
Indenture to be signed and acknowledged by one of its authorized signatories
and its corporate seal to be affixed hereunto, and the same to be attested by
one of its authorized signatories, as of the day and year first written above.

	 	 	 
	
MGE Energy, Inc.
	 
	By:	 	 
	 	 	

Name:      Gary J. Wolter

Title:     Chairman, President and Chief

Executive Officer
	 
	By:	 	
 

Name:      Terry A. Hanson

Title:     Vice President, Chief Financial

Officer and Secretary
	 
	By:	 	
 

Name:      Jeffrey C. Newman

Title:     Vice President and Treasurer
	 
	 	 	
Bank One Trust Company, N.A., as Trustee
	 
	By:	 	 
	 	 	

Name:
	 	 	
Title:
	 
	By:	 	 
	 	 	

Name:
	 	 	
Title:

	 	 	 
	(Seal)	 	 
	 
	Attest:	 	 
	 
	By:	 	 
	 
	 	 	
 

Name:
	 
	 	 	
Title:

[INDENTURE]

 

	 	 	 	 	 	 	 
	STATE OF WISCONSIN	 	 	
	)	 	 
	 	 	 	 

	)	 	ss:
	COUNTY OF DANE	 	 	
	)	 	 

     I, , a Notary Public in and for said County and State aforesaid, do hereby
certify that Gary J. Wolter of MGE Energy, Inc., a Wisconsin corporation, and
Terry A. Hanson and Jeffrey C. Newman of said corporation, who are personally
known to me to be the same persons whose names are subscribed to the foregoing
instrument and who are both personally known to me to be Chairman, President
and Chief Executive Officer, Vice President, Chief Financial Officer and
Secretary, and Vice President and Treasurer, respectively, of said corporation,
appeared before me this day in person and severally acknowledged that they this
day signed and delivered the said instrument as their free and voluntary act as
such Chairman, President and Chief Executive Officer, Vice President, Chief
Financial Officer and Secretary, and Vice President and Treasurer,
respectively, of said corporation and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth, and that the said
instrument was signed and delivered on behalf of said corporation by authority
of its Board of Directors, and acknowledged said instrument to be the free and
voluntary act of said corporation.

     GIVEN under my hand and notarial seal this       day of                     , 2003.

	 
	 

Notary Public

My commission expires:

1

 

	 	 	 	 	 	 	 
	STATE OF OHIO	 	 	
	)	 	 
	 	 	 	 	)	 	ss:
	COUNTY OF FRANKLIN	 	 	
	)	 	 

     I, , a Notary Public in and for said County and State aforesaid, do hereby
certify that [     ] of Bank One Trust Company, N.A., a national banking
association organized and existing under the laws of the United States of
America, and [     ] of said corporation, who are personally known to me
to be the same persons whose names are subscribed to the foregoing instrument
and who are both personally known to me to be an Authorized Signer of said
corporation, appeared before me this day in person and severally acknowledged
that they this day signed, sealed and delivered the said instrument as their
free and voluntary act as such an Authorized Signer of said corporation, and as
the free and voluntary act of said corporation, for the uses and purposes
therein set forth, and that the seal affixed to said instrument is the
corporate seal of said corporation and that the said instrument was signed,
sealed and delivered on behalf of said corporation by authority of its By-laws,
and acknowledged said instrument to be the free and voluntary act of said
corporation.

     GIVEN under my hand and notarial seal this ____ day of ______, 2003.

	 
	 

Notary Public

My commission expires:

2

 

EXHIBIT A

Global Fixed Rate Note

	 	 	 
	REGISTERED

NO.	 	
REGISTERED

MGE ENERGY, INC.

Fixed Rate

Medium-Term Note

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

     The following summary of terms is subject to the provisions set forth
below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CUSIP:	 	 	 	 	 	OPTIONAL EXTENSION OF

    ORIGINAL MATURITY DATE:
	 	[   ]
	 	Yes
	 	[   ]
	 	No
	ORIGINAL ISSUE DATE(S):	 	 	 	 	 	EXTENSION PERIOD:	 	 	 	 	 	 	 	 
	PRINCIPAL AMOUNT:	 	 	 	 	 	NUMBER OF EXTENSION PERIODS:	 	 	 	 	 	 	 	 
	MATURITY DATE:	 	 	 	 	 	FINAL MATURITY DATE:	 	 	 	 	 	 	 	 
	INTEREST RATE:	 	 	 	 	 	OPTIONAL INTEREST RESET:
	 	[   ]
	 	Yes
	 	[   ]
	 	No
	INTEREST PAYMENT DATES:	 	 	 	 	 	OPTIONAL INTEREST RESET DATES:	 	 	 	 	 	 	 	 
	RECORD DATES:	 	 	 	 	 	ORIGINAL ISSUE DISCOUNT NOTE:
	 	[   ]
	 	Yes
	 	[   ]
	 	No
	OPTIONAL REDEMPTION:	 	
[   ] Yes
	 	[   ] No
	 	ISSUE PRICE (percentage of principal):	 	 	 	 	 	 	 	 
	INITIAL REDEMPTION DATE:	 	 	 	 	 	YIELD TO MATURITY:	 	 	 	 	 	 	 	 
	AMORTIZING NOTE:	 	
[   ] Yes
	 	[   ] No
	 	RENEWABLE AT OPTION OF HOLDER:
	 	[   ]
	 	Yes
	 	[   ]
	 	No
	OPTION TO ELECT

    REPAYMENT:	 	
[   ] Yes
	 	[   ] No
	 	ANNEX ATTACHED (and incorporated by

    reference herein):
	 	[   ]
	 	Yes
	 	[   ]
	 	No

     MGE Energy, Inc., a Wisconsin corporation (herein called the “Company”,
which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to

or registered assigns the principal sum specified above, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date specified
above and to pay interest thereon, in such coin or currency,

Exhibit A-1

 

from and including the Original Issue Date (or if this Global Note has two or
more Original Issue Dates, interest shall, beginning on each such Original
Issue Date, begin to accrue for that part of the principal amount to which such
Original Issue Date is applicable) specified above, or from and including the
most recent Interest Payment Date specified above to which interest has been
paid or duly provided for, as the case may be. Interest shall be paid in
arrears semiannually on each Interest Payment Date in each year commencing on
(a) the first such Interest Payment Date next succeeding the earliest Original
Issue Date or Original Issue Dates, or (b) if such Original Issue Date is after
a Record Date and prior to the first Interest Payment Date, on the second
Interest Payment Date, at the per annum Interest Rate set forth above until
Maturity and the principal hereof is paid or made available for payment. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note is registered at the close of business on the Record Date
specified above next preceding such Interest Payment Date; provided, however,
that if an Original Issue Date falls between a Record Date and the next
Interest Payment Date, the first payment of interest with respect to such
Original Issue Date will be paid on the second Interest Payment Date subsequent
to such Original Issue Date to the Person in whose name this Note is registered
at the close of business on the Record Date for such second Interest Payment
Date; and provided, further, that interest payable on the Maturity date or, if
applicable, upon redemption, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Record Date and shall be paid to the Person in
whose name this Note is registered at the close of business on a Record Date
for the payment of such defaulted interest to be fixed by the Company, notice
whereof shall be given to Noteholders not less than fifteen days prior to such
Record Date. Payment of the principal of and any premium and interest on this
Note shall be made on or before 10:30 A.M., New York City time or such other
time as shall be agreed upon between the Trustee and the Depositary, of the day
on which such payment is due, by wire transfer into the account specified by
the Depositary; provided, however, that as a condition to the payment at the
Maturity date of any part of the principal and any applicable premium of this
Global Note, the Depositary shall surrender, or cause to be surrendered, this
Global Note to the Trustee. The Company will pay any administrative costs
imposed by banks in connection with making payments by wire transfer, but not
any tax, assessment or governmental charge imposed on the Holder of this Note.

     Under certain circumstances, this Global Note is exchangeable in whole or
from time to time in part for a definitive individual Note or Notes, with the
same Original Issue Date or Original Issue Dates, Maturity date, Interest Rate
and redemption and other provisions as provided herein or in the Indenture.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL NOTE SET
FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

Exhibit A-2

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

	 	 	 	 	 
	Dated:	 	 	 	 
	 
	 	 	MGE Energy, Inc.
	 
	 	 	
By:	 	 
	 
	 	 	 	 	 

Name:
	 	 	 	 	Title:    President
	 
	 	 	
By:	 	 
	 
	 	 	 	 	 

Name:
	 	 	 	 	Title:    Secretary

TRUSTEE’S CERTIFICATE

OF AUTHENTICATION

     This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 
	
BANK ONE TRUST COMPANY, N.A., as Trustee
	 
	By:	 	 
	 
	 	 	
Authorized Signatory

Exhibit A-3

 

[REVERSE OF NOTE]

MGE ENERGY, INC.

MEDIUM-TERM NOTE

     This Global Note is one of, and a global security which represents Notes
which are part of, the duly authorized Notes of the Company (herein called the
“Notes”), issued and to be issued under an Indenture dated as of [                          ],
2003 (herein called the “Indenture”) between the Company and Bank One Trust
Company, N.A., as Trustee (herein called the “Trustee”, which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Noteholders, and of the terms upon which the Notes are, and
are to be, authenticated and delivered.

     Each Note shall be dated the date of its authentication by the Trustee.
Each Note shall also bear an Original Issue Date or Original Issue Dates which
with respect to this Global Note (or any portion thereof) shall mean the date
or dates of the original issue of the Notes represented hereby as specified on
the face hereof, and such Original Issue Date or Original Issue Dates shall
remain the same for all Notes subsequently issued upon transfer, exchange or
substitution of such original Note (or such subsequently issued Notes)
regardless of their dates of authentication. The Notes may bear different
dates, mature at different times, bear interest at different rates, be subject
to different redemption provisions, if any, and may otherwise vary, all as
provided in the Indenture.

     Interest on this Note will be payable on the Interest Payment Date or
Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity. Unless otherwise specified on the face hereof, payments on this Note
with respect to any particular Interest Payment Date or the Maturity date will
include interest accrued from and including the applicable Original Issue Date,
or from and including the most recent Interest Payment Date to which interest
has been paid or duly provided for, to but excluding the particular Interest
Payment Date or the Maturity date. Interest on this Note will be computed and
paid on the basis of a 360-day year of twelve 30-day months.

     Unless otherwise specified on the face hereof, if this Note is an
Amortizing Note, payments with respect to this Note will be applied first to
interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and
interest on this Note or the formula for the amortization of principal and/or
interest is set forth in an annex attached to this Note.

     All percentages resulting from any calculation with respect to this Note
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upward, and all dollar amounts used in or resulting from any such calculation
with respect to this Note will be rounded to the nearest cent (with one-half
cent being rounded upward).

Exhibit A-4

 

     “Business Day” means, unless otherwise specified on the face hereof, any
Monday, Tuesday, Wednesday, Thursday or Friday that in the City of New York is
not a day on which banking institutions are authorized or obligated by law,
regulation or executive order to close. If an Interest Payment Date or
Maturity for this Note falls on a day that is not a Business Day, payment of
principal, premium, if any, and interest to be made on such day with respect to
this Note will be made on the next day that is a Business Day with the same
force and effect as if made on the due date, and no additional interest will be
payable on the date of payment for the period from and after the due date as a
result of such delayed payment.

     This Note will be redeemable at the option of the Company prior to its
Stated Maturity only if an Initial Redemption Date is specified on the face
hereof. If so specified, this Note will be subject to redemption at the option
of the Company on any date on and after such Initial Redemption Date in whole
or from time to time in part in increments of $1,000 or integral multiples
thereof, at the redemption prices specified in an annex attached to this Note,
plus accrued and unpaid interest to but excluding the date of redemption, but
payments due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on the
relevant Record Date specified on the face hereof, all as provided in the
Indenture. The Company may exercise such option by causing the Trustee to mail
a notice of such redemption, at least 30 but not more than 60 calendar days
prior to the date of redemption, in accordance with the provisions of the
Indenture. In the event of redemption of this Note in part only, this Note
will be cancelled and a new Note or Notes representing the unredeemed portion
hereof will be issued in the name of the Holder hereof. This Note is not
subject to a sinking fund unless otherwise specified in an annex attached
hereto.

     If so specified on the face of this Note, (i) this Note shall be subject
to repayment, in whole or in part, prior to Stated Maturity at the option of
the Holder on a certain date or dates and at a certain price or prices, plus
accrued and unpaid interest to but excluding the date of payment; (ii) the
Stated Maturity of this Note may be extended at the option of the Company for
one or more Extension Periods, as specified on the face hereof, up to but not
beyond the Final Maturity Date specified on the face hereof; (iii) the interest
rate specified on the face hereof may be reset by the Company in accordance
with a formula or otherwise on the Optional Interest Reset Date or Dates
specified on the face hereof; and/or (iv) this Note shall be renewable at the
option of the Holder, in each case in accordance with the provisions of the
Indenture applicable thereto or any indenture supplemental thereto and/or as
specified in an annex attached to this Note.

     Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note as specified on the face hereof, the amount
payable in the event the principal amount hereof is declared to be due and
payable immediately by reason of an Event of Default or in the event of
redemption or repayment hereof prior to the Stated Maturity hereof, in lieu of
the principal amount due at the Stated Maturity hereof, shall be the Amortized
Face Amount of this Note as of the date of declaration, redemption or
repayment, as the case may be. The “Amortized Face Amount” of this Note shall
be the amount equal to (a) the principal amount of this Note multiplied by the
Issue Price specified on the face hereof plus (b) the portion of the difference
between the dollar amount thus obtained and the principal amount hereof that
has accreted at the Yield to Maturity specified on the face hereof (computed in
accordance with generally accepted United States bond yield computation
principles) to such date of declaration,

Exhibit A-5

 

 redemption, or repayment but in no event shall the Amortized Face Amount
of this Note exceed the principal amount stated on the face hereof.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Noteholders to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Notes then
outstanding that would be affected thereby. The Indenture also contains
provisions permitting the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, on behalf of the Holders of all
Notes, to waive compliance by the Company with certain covenants in the
Indenture. The Indenture also provides that the Holders of not less than a
majority in aggregate principal amount of the Notes then outstanding may waive
certain past defaults and their consequences on behalf of the Holders of all
Notes. Any such consent or waiver by the Holder of this Global Note (if not
timely revoked in accordance with the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders of this Global Note and of
any Note issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Global Note or such Note.

     As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing default
with respect to the Notes, the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as Trustee, and the Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of and any premium or interest on this Global Note on or after the respective
due dates expressed herein.

     THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

     If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note
or if at any time the Depositary for this Global Note shall no longer be
registered as a clearing agency under the Securities Exchange Act of 1934, as
amended, or any successor statute or regulation, the Company may appoint a
successor Depositary with respect to this Global Note. If (A) a successor
Depositary for this Global Note is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such ineligibility,
or (B) any Notes are represented by this Global Note at a time when an Event of
Default with respect to the Notes

Exhibit A-6

 

 shall have occurred and be continuing, then in each case the Company’s
election to issue this Note in global form shall no longer be effective with
respect to this Global Note and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of individual
Notes in exchange for this Global Note, shall authenticate and make available
for delivery, individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of this Global Note in
exchange for this Global Note.

     If agreed by the Company and the Depositary with respect to Notes issued
in the form of this Global Note, the Depositary for such Global Note shall
surrender this Global Note in exchange in whole or in part for individual Notes
of like tenor and terms in definitive form on such terms as are acceptable to
the Company and such Depositary. Thereupon the Company shall execute, and the
Trustee shall authenticate and make available for delivery, without a service
charge, (1) to each Person specified by such Depositary, a new Note or Notes of
like tenor and terms, and of any authorized denominations as requested by such
Person in aggregate principal amount equal to and in exchange for the
beneficial interest of such Person in this Global Note, and (2) to such
Depositary a new Global Note of like tenor and terms and in a denomination
equal to the difference, if any, between the principal amount of this Global
Note and the aggregate principal amount of Notes delivered to Holders thereof.

     Under certain circumstances specified in the Indenture, the Depositary may
be required to surrender any two or more Global Notes which have identical
terms (but which may have differing Original Issue Dates) to the Trustee, and
the Company shall execute and the Trustee shall authenticate and deliver to, or
at the direction of, the Depositary a Global Note in principal amount equal to
the aggregate principal amount of, and with all terms identical to, the Global
Notes surrendered to the Trustee, and such new Global Note shall indicate each
applicable Original Issue Date and the principal amount applicable to each such
Original Issue Date.

     No reference herein to the Indenture and no provision of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates, and in the coin or
currency, herein prescribed.

     The Indenture contains provisions for the satisfaction and discharge of
the Indenture upon compliance by the Company with certain conditions specified
therein, which provisions apply to this Note.

     Prior to due presentment of this Global Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Global Note is registered as the owner hereof for
all purposes, whether or not this Global Note is overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.

Exhibit A-7

 

     All terms used in the Note which are defined in the Indenture but are not
defined in this Note shall have the meanings assigned to them in the Indenture.

Exhibit A-8

 

OPTION TO ELECT REPAYMENT

(To be completed only if this Note is repayable at the option

of the Holder and the Holder elects to exercise such rights)

     The undersigned owner of this Note hereby irrevocably elects to have the
Company repay (i) the principal amount of this Note or portion hereof below
designated at the applicable optional repayment price indicated on an annex
attached hereto plus accrued and unpaid interest to but excluding the date of
repayment, if this election is being made pursuant to the option referred to
under “Option to Elect Repayment” on the face hereof, or (ii) l00% of the
principal amount of this Note plus accrued and unpaid interest to but excluding
the Optional Interest Reset Date, if this election is being made following an
exercise by the Company of the option referred to under “Optional Interest
Reset” on the face hereof, or to but excluding the Pre-Exercise Stated Maturity
Date as defined in the Indenture), if this election is being made following an
exercise by the Company of the option referred to under “Optional Extension of
Original Maturity Date” on the face hereof. If a portion of this Note is not
being repaid pursuant to clause (i) above, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):

	 	 	 
	Dated:_________________________________________________________	 	___________________________________________________
		 	 
	Principal amount to be repaid if
amount to be repaid is pursuant
to clause (i) above and is less than
the entire principal amount of this
Note (principal amount remaining
must be an authorized denomination)	 	
Signature

Sign exactly as name appears on the
front of this Note

Indicate address where check is
to be sent:
	$	 	 
	
	 	

	(Which must be an integral multiple
of $1,000)	 	
	 	 	

Social Security Or Other Taxpayer

    ID Number:
	 	 	

	Denomination or denominations of the
Note or Notes to be issued for the
portion of this Note not being
repaid pursuant to clause (i) above:	 	 
	
	 	 
	 	 	 
	
	 	 

Exhibit A-9

 

ABBREVIATIONS

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

	 	 	 	 	 	 	 
	TEN COM	-	
as tenants in common
	 	UNIT GIFT

MIN ACT -
	 	      Custodian      
	 	 	 	 	 	 	(Cust)         (Minor)
	TEN ENT 	-	
as tenants by the

entireties
	 	 	 	Under Uniform Gifts

to Minors Act
	 	 	 	 	 	 	 
	JT TEN	-	
as joint tenants with

right of survivorship and

not as tenants in common	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	State

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

FOR VALUE RECEIVED the undersigned hereby sell(s)

assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR

    OTHER IDENTIFYING NUMBER OF ASSIGNEE

Please print or typewrite name and address including postal zip code of assignee

the within note and all rights thereunder, hereby irrevocably constituting and
appointing __________________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the premises.

	 	 	 	 
	Dated:	 	 	 
	 	
	 	

	 	 	 	
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the within instrument in
every particular, without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by an “eligible
guarantor institution” that is a member or participant in the
Securities Transfer Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange, Inc. Medallion
Program.

Exhibit A-10

 

EXHIBIT B

Fixed Rate Note

	 	 	 
	REGISTERED

NO.	 	
REGISTERED

MGE ENERGY, INC.

Fixed Rate

Medium-Term Note

     The following summary of terms is subject to the provisions set forth
below:

	 	 	 	 	 	 	 	 	 	 	 
	CUSIP:	 	 	 	 	 	OPTIONAL EXTENSION OF

    ORIGINAL MATURITY DATE:
	 	[  ] Yes
	 	[  ] No
	ORIGINAL ISSUE DATE:	 	 	 	 	 	EXTENSION PERIOD:	 	 	 	 
	PRINCIPAL AMOUNT:	 	 	 	 	 	NUMBER OF EXTENSION PERIODS:	 	 	 	 
	MATURITY DATE:	 	 	 	 	 	FINAL MATURITY DATE:	 	 	 	 
	INTEREST RATE:	 	 	 	 	 	OPTIONAL INTEREST RESET:
	 	[  ] Yes
	 	[  ] No
	INTEREST PAYMENT DATES:	 	 	 	 	 	OPTIONAL INTEREST RESET DATES:	 	 	 	 
	RECORD DATES:	 	 	 	 	 	ORIGINAL ISSUE DISCOUNT NOTE:
	 	[  ] Yes
	 	[  ] No
	OPTIONAL REDEMPTION:	 	
[  ] Yes
	 	[  ] No
	 	ISSUE PRICE (percentage of principal):	 	 	 	 
	INITIAL REDEMPTION DATE:	 	
[  ] Yes
	 	[  ] No
	 	YIELD TO MATURITY:
	 	[  ] Yes
	 	[  ] No
	AMORTIZING NOTE:	 	
[  ] Yes
	 	[  ] No
	 	RENEWABLE AT OPTION OF HOLDER:
	 	[  ] Yes
	 	[  ] No
	OPTION TO ELECT

    REPAYMENT:	 	 	 	 	 	ANNEX ATTACHED (and incorporated by

    reference herein):
	 	[  ] Yes
	 	[  ] No

     MGE Energy, Inc., a Wisconsin corporation (herein called the “Company”,
which term includes any successor Person under the Indenture referred to on the
reverse hereof, for value received, hereby promises to pay to

     or registered assigns the principal sum specified above, in such coin to
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date specified
above, and to pay interest thereon, in such coin or currency, from and
including the Original Issue Date specified above, or from the most recent
Interest Payment Date specified above to which interest has been paid or duly
provided for, as the case may be. Interest shall be paid in arrears
semiannually on each Interest Payment Date in each year commencing on (a) the
first such Interest Payment Date next succeeding the Original Issue Date
specified above, or (b) if such Original Issue Date is after a Record Date and
prior to the first Interest Payment Date, on the second Interest Payment Date,
at the per annum Interest Rate set forth above until Maturity and the principal
hereof is paid or made available for payment. The interest so payable and
punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note is
registered at

Exhibit B-1

 

the close of business on the Record Date specified above next
preceding such Interest Payment Date; provided, however, that if the Original
Issue Date falls between a Record Date and the next Interest Payment Date, the
first payment of interest will be paid on the second Interest Payment Date
subsequent to such Original Issue Date to the Person in whose name this Note is
registered at the close of business on the Record Date for such second Interest
Payment Date; and provided, further, that interest payable on the Maturity
date, or, if applicable, upon redemption, shall be payable to the Person to
whom principal shall be payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and shall be
paid to the Person in whose name this Note is registered at the close of
business on a Record Date for the payment of such defaulted interest to be
fixed by the Company, notice whereof shall be given to Noteholders not less
than fifteen days prior to such Record Date. Payment of the principal of and
any premium and interest on this Note due at the Maturity of this Note shall be
payable in immediately available funds when due upon presentation and surrender
of such Note at the Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York; provided that this Note is presented to the
Trustee in time for the Trustee to make such payment in such funds in
accordance with its normal procedures. Accrued Interest on (and, if this Note
is an Amortizing Note, installments of principal of) this Note (other than
Accrued Interest or such installments payable at Maturity) shall be paid by a
clearinghouse funds check mailed on the Interest Payment Date; provided,
however that of any Holder of Notes, the aggregate principal amount of which
equals or exceeds $10,000,000, provides a written request to the Trustee on or
before the applicable Record Date for such Interest Payment Date, Accrued
Interest (and such installments of principal) shall be paid by wire transfer of
immediately available funds to a bank within the continental United States or
by direct deposit into the account of such Holder if such account is maintained
with the Trustee. The Company will pay any administration costs imposed by
banks in connection with making payments by wire transfer, but not any tax,
assessment or governmental charge imposed upon the Holder of this Note.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

Exhibit B-2

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

	 	 	 	 	 
	Dated:	 	 	 	 
	 
	 	 	MGE Energy, Inc.
	 
	 	 	
By:	 	 
	 	 	 	 	

Name:
	 	 	 	 	Title:    President
	 
	 	 	
By:	 	 
	 	 	 	 	

Name:
	 	 	 	 	Title:    Secretary

TRUSTEE’S CERTIFICATE

OF AUTHENTICATION

     This is one of the Notes referred to in the within-mentioned Indenture.

BANK ONE TRUST COMPANY, N.A., as Trustee

By:

      ________________________________

      Authorized Signatory

Exhibit B-3

 

[REVERSE OF NOTE]

MGE ENERGY, INC.

MEDIUM-TERM NOTE

     This Note is one of the duly authorized Notes of the Company (herein
called the “Notes”), issued and to be issued under an Indenture dated as of
[                     ], 2003 (herein called the (“Indenture”) between the Company and Bank
One Trust Company, N.A., as Trustee (herein called the “Trustee”, which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Noteholders, and of the terms upon which the
Notes are, and are to be, authenticated and delivered.

     Each Note shall be dated the date of its authentication by the Trustee.
Each Note shall also bear an Original Issue Date which with respect to this
Note (or any portion thereof) shall mean the date of its original issue as
specified on the face hereof, and such Original Issue Date shall remain the
same for all Notes subsequently issued upon transfer, exchange or substitution
of such original Note (or such subsequently issued Notes) regardless of their
dates of authentication. The Notes may bear different dates, mature at
different times, bear interest at different rates, be subject to different
redemption provisions, if any, and may otherwise vary, all as provided in the
Indenture.

     Interest on this Note will be payable on the Interest Payment Date or
Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity. Unless otherwise specified on the face hereof, payments on this Note
with respect to any particular Interest Payment Date or the Maturity date will
include interest accrued from and including the Original Issue Date, or from
and including the most recent Interest Payment Date to which interest has been
paid or duly provided for, to but excluding the particular Interest Payment
Date or the Maturity date. Interest on this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.

     Unless otherwise specified on the face hereof, if this Note is an
Amortizing Note, payments with respect to this Note will be applied first to
interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and
interest on this Note or the formula for the amortization of principal and/or
interest is set forth in an annex attached to this Note.

     All percentages resulting from any calculation with respect to this Note
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point (with five one-millionths of a percentage point rounded
upward) and all dollar amounts used in or resulting from any such calculation
with respect to this Note will be rounded to the nearest cent (with one-half
cent being rounded upward).

     “Business Day” means, unless otherwise specified on the face hereof, any
Monday, Tuesday, Wednesday, Thursday or Friday that in the City of New York is
not a day on which banking institutions are authorized or obligated by law,
regulation or executive order to close. If

Exhibit B-4

 

an Interest Payment Date or Maturity for this Note falls on a day that is
not a Business Day, payment of principal, premium, if any, and interest to be
made on such day with respect to this Note will be made on the next day that is
a Business Day with the same force and effect as if made on the due date, and
no additional interest will be payable on the date of payment for the period
from and after the due date as a result of such delayed payment.

     This Note will be redeemable at the option of the Company prior to its
Stated Maturity only if an Initial Redemption Date is specified on the face
hereof. If so specified, this Note will be subject to redemption at the option
of the Company on any date on and after such Initial Redemption Date in whole
or from time to time in part in increments of $1,000 or integral multiples
thereof, at the redemption prices specified in an annex attached to this Note,
plus accrued and unpaid interest to but excluding the date of redemption, but
payments due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on the
relevant Record Date specified on the face hereof, all as provided in the
Indenture. The Company may exercise such option by causing the Trustee to mail
a notice of such redemption, at least 30 but not more than 60 calendar days
prior to the date of redemption, in accordance with the provisions of the
Indenture. In the event of redemption of this Note in part only, this Note
will be cancelled and a new Note or Notes representing the unredeemed portion
hereof will be issued in the name of the Holder hereof. This Note is not
subject to a sinking fund unless otherwise specified in an annex attached
hereto.

     If so specified on the face of this Note, (i) this Note shall be subject
to repayment, in whole or in part, prior to Stated Maturity at the option of
the Holder on a certain date or dates and at a certain price or prices, plus
accrued and unpaid interest to but excluding the date of payment; (ii) the
Stated Maturity of this Note may be extended at the option of the Company for
one or more Extension Periods, as specified on the face hereof, up to but not
beyond the Final Maturity Date specified on the face hereof; (iii) the interest
rate specified on the face hereof may be reset by the Company in accordance
with a formula or otherwise on the Optional Interest Reset Date or Optional
Interest Reset Dates specified on the face hereof; and/or (iv) this Note shall
be renewable at the option of the Holder, in each case in accordance with the
provisions of the Indenture applicable thereto or any indenture supplemental
thereto and/or as specified in an annex attached to this Note.

     Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note as specified on the face hereof, the amount
payable in the event the principal
amount hereof is declared to be due and
payable immediately by reason of an Event of Default or in the event of
redemption or repayment hereof prior to the Stated Maturity hereof, in lieu of
the principal amount due at the Stated Maturity hereof, shall be the Amortized
Face Amount of this Note as of the date of declaration, redemption or
repayment, as the case may be. The “Amortized Face Amount” of this Note shall
be the amount equal to (a) the principal amount of this Note multiplied by the
Issue Price specified on the face hereof plus (b) the portion of the difference
between the dollar amount thus obtained and the principal amount hereof that
has accreted at the Yield to Maturity specified on the face hereof (computed in
accordance with generally accepted United States bond yield computation
principles) to such date of declaration, redemption or repayment but in no
event shall the Amortized Face Amount of this Note exceed the principal amount
stated on the face hereof.

Exhibit B-5

 

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Noteholders to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Notes then outstanding
that would be affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding, on behalf of the Holders of all Notes, to waive
compliance by the Company with certain covenants in the Indenture. The Indenture
also provides that the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding may waive certain past defaults
and their consequences on behalf of the Holders of all Notes. Any such consent
or waiver by the Holder of this Note (if not timely revoked in accordance with
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note or such Note.

     As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with respect
to the Indenture or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing default with
respect to the Notes, the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
Trustee, and the Trustee shall have failed to institute such proceeding within
60 days; provided, however, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of and any premium or interest on this Note on or after the respective due dates
expressed herein.

     No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, places and rates, and in the coin or currency, herein
prescribed.

     The Indenture contains provisions for the satisfaction and discharge of
the Indenture upon compliance by the Company with certain conditions specified
therein, which provisions apply to this Note.

     Unless otherwise specified in an annex attached hereto, the Notes are
issuable only in registered form, without coupons, in denominations of $1,000
and integral multiples thereof. As provided in the Indenture and subject to
certain limitations specified therein, this Note may be exchanged for one or
more new Notes, of any authorized denominations and of a like aggregate
principal amount and Stated Maturity and having the same terms and Original
Issue Date, as requested by the Holder surrendering this Note.

     As provided in the Indenture and subject to the limitations specified
therein, upon due presentment of this Note for registration of transfer at an
office or agency of the Trustee in the Borough of Manhattan, the City of New
York, maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the note
registrar duly executed by, the Holder hereof or the attorney of such Holder
duly authorized

Exhibit B-6

 

in writing, the Company shall execute and register or cause to
be registered and the Trustee shall authenticate and make available for
delivery, in the name of the transferee or transferees one or more new Notes of
any authorized denominations and of a like aggregate principal amount and Stated
Maturity and having the same terms and Original Issue Date.

     No service charge will be made for any such exchange or registration of
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

     The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in the Note which are defined in the Indenture but are
not defined in this Note shall have the meanings assigned to them in the
Indenture.

Exhibit B-7

 

OPTION TO ELECT REPAYMENT

(To be completed only if this Note is repayable at the option

of the Holder and the Holder elects to exercise such rights)

     The undersigned owner of this Note hereby irrevocably elects to have
the Company repay (i) the principal amount of this Note or portion hereof below
designated at the applicable optional repayment price indicated on an annex
attached hereto plus accrued and unpaid interest to but excluding the date of
repayment, if this election is being made pursuant to the option referred to
under “Option to Elect Repayment” on the face hereof, or (ii) l00% of the
principal amount of this Note plus accrued and unpaid interest to but excluding
the Optional Interest Reset Date, if this election is being made following an
exercise by the Company of the option referred to under “Optional Interest
Reset” on the face hereof, or to but excluding the Pre-Exercise Stated Maturity
Date as defined in the Indenture), if this election is being made following an
exercise by the Company of the option referred to under “Optional Extension of
Original Maturity Date” on the face hereof. If a portion of this Note is not
being repaid pursuant to clause (i) above, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):

	 	 	 
	Dated:	 	 
	
	 	

		 	 
	Principal amount to be repaid if
amount to be repaid is pursuant
to clause (i) above and is less than
the entire principal amount of this
Note (principal amount remaining
must be an authorized denomination)	 	
Signature

Sign exactly as name appears on the
front of this Note

Indicate address where check is
to be sent:
	$	 	 
	
	 	

	(Which must be an integral multiple
of $1,000)	 	
	 	 	

Social Security Or Other Taxpayer

    ID Number:
	 	 	

	Denomination or denominations of the
Note or Notes to be issued for the
portion of this Note not being
repaid pursuant to clause (i) above:	 	 
	
	 	 
	 	 	 
	
	 	 

Exhibit B-8

 

ABBREVIATIONS

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

	 	 	 	 	 	 	 
	TEN COM	-	
as tenants in common
	 	UNIT GIFT

MIN ACT -
	 	      Custodian      
	 	 	 	 	 	 	(Cust)         (Minor)
	TEN ENT 	-	
as tenants by the

entireties
	 	 	 	Under Uniform Gifts

to Minors Act
	 	 	 	 	 	 	 
	JT TEN	-	
as joint tenants with

right of survivorship and

not as tenants in common	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	State

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

FOR VALUE RECEIVED the undersigned hereby sell(s)

assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR

    OTHER IDENTIFYING NUMBER OF ASSIGNEE

Please print or typewrite name and address including postal zip code of assignee

the within note and all rights thereunder, hereby irrevocably constituting and
appointing __________________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the premises.

	 	 	 	 
	Dated:	 	 	 
	 	
	 	

	 	 	 	
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the within instrument in
every particular, without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by an “eligible
guarantor institution” that is a member or participant in the
Securities Transfer Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange, Inc. Medallion
Program.

Exhibit B-9

 

EXHIBIT C

Global Floating Rate Note

	 	 	 
	REGISTERED

NO	 	
REGISTERED

MGE ENERGY, INC.

Floating Rate

Medium-Term Note

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

     The following summary of terms is subject to the provisions set forth
below:

	 	 	 	 	 
	CUSIP:

ORIGINAL ISSUE DATE(S):	 	
OPTIONAL REDEMPTION:

INITIAL REDEMPTION DATE:
	 	[   ] Yes [   ] No
	PRINCIPAL AMOUNT:	 	
AMORTIZING NOTE:
	 	[   ] Yes [   ] No
	MATURITY DATE:	 	
OPTION TO ELECT REPAYMENT:
	 	[   ] Yes [   ] No
	INITIAL INTEREST RATE:	 	
OPTIONAL EXTENSION OF

ORIGINAL MATURITY DATE:
	 	[   ] Yes [   ] No
	INTEREST RATE BASIS OR

BASE RATE (including

any Designated	 	
EXTENSION PERIOD:	 	 
	LIBOR Page):	 	 	 	 
	INDEX MATURITY:	 	
NUMBER OF EXTENSION PERIODS:	 	 
	INTEREST DETERMINATION

DATES:	 	
FINAL MATURITY DATE:	 	 
	INTEREST RESET PERIOD:	 	
OPTIONAL INTEREST RESET:
	 	[   ] Yes [   ] No
	INTEREST RESET DATES:	 	
OPTIONAL INTEREST RESET DATES:	 	 
	SPREAD:	 	
ORIGINAL ISSUE DISCOUNT NOTE:
	 	[   ] Yes [   ] No
	SPREAD MULTIPLIER:	 	
ISSUE PRICE (percentage of principal):	 	 
	MAXIMUM INTEREST RATE:	 	
YIELD TO MATURITY:	 	 
	MINIMUM INTEREST RATE:	 	
RENEWABLE AT OPTION OF HOLDER:
	 	[   ] Yes [   ] No
	INTEREST PAYMENT DATES:

RECORD DATES:	 	
ANNEX ATTACHED (and incorporated by

reference herein):
	 	[   ] Yes [   ] No

Exhibit C-1

 

     MGE Energy, Inc., a Wisconsin corporation (herein called the “Company”,
which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to

or registered assigns the principal sum specified above, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date specified
above and to pay interest thereon, in such coin or currency, from and including
the Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which such Original Issue Date
is applicable) specified above, or from and including the most recent Interest
Payment Date specified above to which interest has been paid or duly provided
for, as the case may be. Interest shall be paid in arrears monthly, quarterly,
semiannually or annually as specified above under Interest Payment Dates, on
each Interest Payment Date in each year and at Maturity, commencing on (a) the
first such Interest Payment Date next succeeding the earliest Original Issue
Date or Original Issue Dates, or (b) if such Original Issue Date is after a
Record Date and prior to the first Interest Payment Date, on the second
Interest Payment Date, at a rate per annum equal to the Initial Interest Rate
specified above until the initial Interest Reset Date specified above, and
thereafter at a rate per annum determined in accordance with the provisions in
the Indenture for calculating the Interest Rate for Notes having the Interest
Rate Basis specified above, until Maturity and the principal hereof is paid or
made available for payment. The interest so payable and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note is registered at the
close of business on the Record Date specified above next preceding such
Interest Payment Date; provided, however, that if an Original Issue Date falls
between a Record Date and the next Interest Payment Date, the first payment of
interest with respect to such Original Issue Date will be paid on the second
Interest Payment Date subsequent to such Original Issue Date to the Person in
whose name this Note is registered at the close of business on the Record Date
for such second Interest Payment Date; and provided, further, that interest
payable on the Maturity date or, if applicable, upon redemption, shall be
payable to the Person to whom principal shall he payable. Except as otherwise
provided in the Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and shall be paid to the Person in whose name this Note is registered at
the close of business on a Record Date for the payment of such defaulted
interest to be fixed by the Company, notice whereof shall be given to
Noteholders not less than fifteen days prior to such Record Date. Payment of
the principal of and any premium and interest on this Note shall be made on or
before 10:30 A.M., New York City time or such other time as shall be agreed
upon between the Trustee and the Depositary, of the day on which such payment
is due, by wire transfer into the account specified by the Depositary;
provided, however, that as a condition to the payment at the Maturity date of
any part of the principal and any applicable premium of this Global Note, the
Depositary shall surrender, or cause to be surrendered, this Global Note to the
Trustee. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but not any tax, assessment
or governmental charge imposed on the Holder of this Note.

     Under certain circumstances, this Global Note is exchangeable in whole or
from time to time in part for a definitive individual Note or Notes, with the
same Original Issue Date or

Exhibit C-2

 

 Original Issue Dates, Maturity date, Interest Rate and redemption and
other provisions as provided herein or in the Indenture.

	 	 	REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL NOTE
SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS
PLACE.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

	 	 	 	 	 
	Dated:	 	 	 	 
	 
	 	 	MGE Energy, Inc.
	 
	 	 	
By:	 	 
	 
	 	 	 	 	 

Name:
	 
	 	 	 	 	Title:    President
	 
	 	 	
By:	 	 
	 
	 	 	 	 	 

Name:
	 
	 	 	 	 	Title:    Secretary

TRUSTEE’S CERTIFICATE

OF AUTHENTICATION

     This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 	 
	
BANK ONE TRUST COMPANY, N.A., as Trustee	 
	 
	By:	 	 	 
	 
	 	 	
 

Authorized Signatory	 

Exhibit C-3

 

[REVERSE OF NOTE]

MGE ENERGY, INC.

MEDIUM-TERM NOTE

     This Global Note is one of, and a global security which represents Notes
which are part of, the duly authorized Notes of the Company (herein called the
“Notes”), issued and to be issued under an Indenture
dated as of [     ],
2003 (herein called the “Indenture”) between the Company and Bank One Trust
Company, N.A., as Trustee (herein called the “Trustee”, which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Noteholders, and of the terms upon which the Notes are, and
are to be, authenticated and delivered.

     Each Note shall be dated the date of its authentication by the Trustee.
Each Note shall also bear an Original Issue Date or Original Issue Dates which
with respect to this Global Note (or any portion thereof) shall mean the date
or dates of the original issue of the Notes represented hereby as specified on
the face hereof, and such Original Issue Date or Original Issue Dates shall
remain the same for all Notes subsequently issued upon transfer, exchange or
substitution of such original Note (or such subsequently issued Notes)
regardless of their dates of authentication. The Notes may bear different
dates, mature at different times, bear interest at different rates, be subject
to different redemption provisions, if any, and may otherwise vary, all as
provided in the Indenture.

     Interest on this Note will be payable on the Interest Payment Date or
Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity. Unless otherwise specified on the face hereof, payments on this Note
with respect to any particular Interest Payment Date or the Maturity date will
include interest accrued from and including the applicable Original Issue Date,
or from and including the most recent Interest Payment Date to which interest
has been paid or duly provided for, to but excluding the particular Interest
Payment Date or the Maturity date. Interest on this Note shall be calculated
for each day during such period by dividing the interest rate applicable to
such day by 360, if the Interest Rate Basis specified on the face hereof is the
Commercial Paper Rate, LIBOR or Prime Rate, or by the actual number of days in
the year, if the Interest Rate Basis specified on the face hereof is the
Treasury Rate. Unless otherwise provided in an annex attached hereto, the
Trustee, acting in the capacity of Calculation Agent, will calculate the
Interest Rate on this Note. Upon the request of any Holder of this Note, the
Trustee shall provide to such Holder the Interest Rate then in effect and, if
then determined, the interest rate that will become effective on the next
Interest Reset Date with respect to this Note. Each such determination of an
Interest Rate will be final and binding in the absence of manifest error.

     Unless otherwise specified in an annex attached hereto, if this Note is an
Amortizing Note, payments with respect to this Note will be applied first to
interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and

Exhibit C-4

 

 interest on this Note or the formula for the amortization of principal
and/or interest is set forth in an annex attached to this Note.

     All percentages resulting from any calculation with respect to this Note
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point (with five one-millionths of a percentage point rounded
upward) and all dollar amounts used in or resulting from any such calculation
with respect to this Note will be rounded to the nearest cent (with one-half
cent being rounded upward).

     “Business Day” means, unless otherwise specified on the face hereof, any
Monday, Tuesday, Wednesday, Thursday or Friday that in the City of New York is
not a day on which banking institutions are authorized or obligated by law,
regulation or executive order to close. If an Interest Payment Date or
Maturity for this Note falls on a day that is not a Business Day, payment of
principal, premium, if any, and interest to be made on such day with respect to
this Note will be made on the next day that is a Business Day with the same
force and effect as if made on the due date, and no additional interest will be
payable on the date of payment for the period from and after the due date as a
result of such delayed payment.

     This Note will be redeemable at the option of the Company prior to its
Stated Maturity only if an Initial Redemption Date is specified on the face
hereof. If so specified, this Note will be subject to redemption at the option
of the Company on any date on and after such Initial Redemption Date in whole
or from time to time in part in increments of $1,000 or integral multiples
thereof, at the redemption prices specified in an annex attached to this Note,
plus accrued and unpaid interest to but excluding the date of redemption, but
payments due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on the
relevant Record Date specified on the face hereof, all as provided in the
Indenture. The Company may exercise such option by causing the Trustee to mail
a notice of such redemption, at least 30 but not more than 60 calendar days
prior to the date of redemption, in accordance with the provisions of the
Indenture. In the event of redemption of this Note in part only, this Note
will be cancelled and a new Note or Notes representing the unredeemed portion
hereof will be issued in the name of the Holder hereof. This Note is not
subject to a sinking fund unless otherwise specified in an annex attached
hereto.

     If so specified on the face of this Note, (i) this Note shall be subject
to repayment, in whole or in part, prior to Stated Maturity at the option of
the Holder on a certain date or dates and at a certain price or prices, plus
accrued and unpaid interest to but excluding the date of payment; (ii) the
Stated Maturity of this Note may be extended at the option of the Company for
one or more Extension Periods, as specified on the face hereof, up to but not
beyond the Final Maturity Date specified on the face hereof; (iii) the interest
rate specified on the face hereof may be reset by the Company in accordance
with a formula or otherwise on the Optional Interest Reset Date or Dates
specified on the face hereof; and/or (iv) this Note shall be renewable at the
option of the Holder, in each case in accordance with the provisions of the
Indenture applicable thereto or any indenture supplemental thereto and/or as
specified in an annex attached to this Note.

     Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note as specified on the face hereof, the amount
payable in the event the principal

Exhibit C-5

 

 amount hereof is declared to be due and payable immediately by reason of
an Event of Default or in the event of redemption or repayment hereof prior to
the Stated Maturity hereof, in lieu of the principal amount due at the Stated
Maturity hereof, shall be the Amortized Face Amount of this Note as of the date
of declaration, redemption or repayment, as the case may be. The “Amortized
Face Amount” of this Note shall be the amount equal to (a) the principal amount
of this Note multiplied by the Issue Price specified on the face hereof plus
(b) the portion of the difference between the dollar amount thus obtained and
the principal amount hereof that has accreted at the Yield to Maturity
specified on the face hereof (computed in accordance with generally accepted
United States bond yield computation principles) to such date of declaration,
redemption, or repayment but in no event shall the Amortized Face Amount of
this Note exceed the principal amount stated on the face hereof.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Noteholders to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Notes then
outstanding that would be affected thereby. The Indenture also contains
provisions permitting the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, on behalf of the Holders of all
Notes, to waive compliance by the Company with certain covenants in the
Indenture. The Indenture also provides that the Holders of not less than a
majority in aggregate principal amount of the Notes then outstanding may waive
certain past defaults and their consequences on behalf of the Holders of all
Notes. Any such consent or waiver by the Holder of this Global Note (if not
timely revoked in accordance with the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders of this Global Note and of
any Note issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Global Note or such Note.

     As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing default
with respect to the Notes, the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as Trustee, and the Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of and any premium or interest on this Global Note on or after the respective
due dates expressed herein.

     THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

Exhibit C-6

 

     If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note
or if at any time the Depositary for this Global Note shall no longer be
registered as a clearing agency under the Securities Exchange Act of 1934, as
amended, or any successor statute or regulation, the Company may appoint a
successor Depositary with respect to this Global Note. If (A) a successor
Depositary for this Global Note is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such ineligibility,
or (B) any Notes are represented by this Global Note at a time when an Event of
Default with respect to the Notes shall have occurred and be continuing, then
in each case the Company’s election to issue this Note in global form shall no
longer be effective with respect to this Global Note and the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Notes in exchange for this Global
Note, shall authenticate and make available for delivery, individual Notes of
like tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of this Global Note in exchange for this Global Note.

     If agreed by the Company and the Depositary with respect to Notes issued
in the form of this Global Note, the Depositary for such Global Note shall
surrender this Global Note in exchange in whole or in part for individual Notes
of like tenor and terms in definitive form on such terms as are acceptable to
the Company and such Depositary. Thereupon the Company shall execute, and the
Trustee shall authenticate and make available for delivery, without a service
charge, (1) to each Person specified by such Depositary, a new Note or Notes of
like tenor and terms, and of any authorized denominations as requested by such
Person in aggregate principal amount equal to and in exchange for the
beneficial interest of such Person in this Global Note, and (2) to such
Depositary a new Global Note of like tenor and terms and in a denomination
equal to the difference, if any, between the principal amount of this Global
Note and the aggregate principal amount of Notes delivered to Holders thereof.

     Under certain circumstances specified in the Indenture, the Depositary may
be required to surrender any two or more Global Notes which have identical
terms (but which may have differing Original Issue Dates) to the Trustee, and
the Company shall execute and the Trustee shall authenticate and deliver to, or
at the direction of, the Depositary a Global Note in principal amount equal to
the aggregate principal amount of, and with all terms identical to, the Global
Notes surrendered to the Trustee, and such new Global Note shall indicate each
applicable Original Issue Date and the principal amount applicable to each such
Original Issue Date.

     No reference herein to the Indenture and no provision of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates, and in the coin or
currency, herein prescribed.

     The Indenture contains provisions for the satisfaction and discharge of
the Indenture upon compliance by the Company with certain conditions specified
therein, which provisions apply to this Note.

     Prior to due presentment of this Global Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this

Exhibit C-7

 

 Global Note is registered as the owner hereof for all purposes, whether or
not this Global Note is overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.

     The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in the Note which are defined in the Indenture but are not
defined in this Note shall have the meanings assigned to them in the Indenture.

Exhibit C-8

 

OPTION TO ELECT REPAYMENT

(To be completed only if this Note is repayable at the option

of the Holder and the Holder elects to exercise such rights)

     The undersigned owner of this Note hereby irrevocably elects to have the
Company repay (i) the principal amount of this Note or portion hereof below
designated at the applicable optional repayment price indicated on an annex
attached hereto plus accrued and unpaid interest to but excluding the date of
repayment, if this election is being made pursuant to the option referred to
under “Option to Elect Repayment” on the face hereof, or (ii) l00% of the
principal amount of this Note plus accrued and unpaid interest to but excluding
the Optional Interest Reset Date, if this election is being made following an
exercise by the Company of the option referred to under “Optional Interest
Reset” on the face hereof, or to but excluding the Pre-Exercise Stated Maturity
Date as defined in the Indenture), if this election is being made following an
exercise by the Company of the option referred to under “Optional Extension of
Original Maturity Date” on the face hereof. If a portion of this Note is not
being repaid pursuant to clause (i) above, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):

	 	 	 
	Dated:_______________________________________________________________	 	______________________________________________________
		 	 
	Principal amount to be repaid if
amount to be repaid is pursuant
to clause (i) above and is less than
the entire principal amount of this
Note (principal amount remaining
must be an authorized denomination)	 	
Signature

Sign exactly as name appears on the
front of this Note

Indicate address where check is
to be sent:
	$	 	 
	
	 	

	(Which must be an integral multiple
of $1,000)	 	
	 	 	

Social Security Or Other Taxpayer

    ID Number:
	 	 	

	Denomination or denominations of the
Note or Notes to be issued for the
portion of this Note not being
repaid pursuant to clause (i) above:	 	 
	
	 	 
	 	 	 
	
	 	 

Exhibit C-9

 

ABBREVIATIONS

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

	 	 	 	 	 	 	 
	TEN COM	-	
as tenants in common
	 	UNIT GIFT

MIN ACT -
	 	      Custodian      
	 	 	 	 	 	 	(Cust)         (Minor)
	TENENT 	-	
as tenants by the

entireties
	 	 	 	Under Uniform Gifts

to Minors Act
	 	 	 	 	 	 	 
	JT TEN	-	
as joint tenants with

right of survivorship and

not as tenants in common	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	State

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

FOR VALUE RECEIVED the undersigned hereby sell(s)

assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR

    OTHER IDENTIFYING NUMBER OF ASSIGNEE

Please print or typewrite name and address including postal zip code of assignee

the within note and all rights thereunder, hereby irrevocably constituting and
appointing __________________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the premises.

	 	 	 	 
	Dated:	 	 	 
	 	
	 	

	 	 	 	
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the within instrument in
every particular, without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by an “eligible
guarantor institution” that is a member or participant in the
Securities Transfer Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange, Inc. Medallion
Program.

Exhibit C-10

 

EXHIBIT D

Floating Rate Note

	 	 	 
	REGISTERED

NO	 	
REGISTERED

MGE ENERGY, INC.

Floating Rate

Medium-Term Note

     The following summary of terms is subject to the provisions set forth
below:

	 	 	 	 	 
	CUSIP:

ORIGINAL ISSUE DATE(S):	 	
OPTIONAL REDEMPTION:

INITIAL REDEMPTION DATE:
	 	[   ] Yes [   ] No
	PRINCIPAL AMOUNT:	 	
AMORTIZING NOTE:
	 	[   ] Yes [   ] No
	MATURITY DATE:	 	
OPTION TO ELECT REPAYMENT:
	 	[   ] Yes [   ] No
	INITIAL INTEREST RATE:	 	
OPTIONAL EXTENSION OF

ORIGINAL MATURITY DATE:
	 	[   ] Yes [   ] No
	INTEREST RATE BASIS OR

BASE RATE (including

any Designated	 	
EXTENSION PERIOD:	 	 
	LIBOR Page):	 	 	 	 
	INDEX MATURITY:	 	
NUMBER OF EXTENSION PERIODS:	 	 
	INTEREST DETERMINATION

DATES:	 	
FINAL MATURITY DATE:	 	 
	INTEREST RESET PERIOD:	 	
OPTIONAL INTEREST RESET:
	 	[   ] Yes [   ] No
	INTEREST RESET DATES:	 	
OPTIONAL INTEREST RESET DATES:	 	 
	SPREAD:	 	
ORIGINAL ISSUE DISCOUNT NOTE:
	 	[   ] Yes [   ] No
	SPREAD MULTIPLIER:	 	
ISSUE PRICE (percentage of principal):	 	 
	MAXIMUM INTEREST RATE:	 	
YIELD TO MATURITY:	 	 
	MINIMUM INTEREST RATE:	 	
RENEWABLE AT OPTION OF HOLDER:
	 	[   ] Yes [   ] No
	INTEREST PAYMENT DATES:

RECORD DATES:	 	
ANNEX ATTACHED (and incorporated by

reference herein):
	 	[   ] Yes [   ] No

     MGE Energy, Inc., a Wisconsin corporation (herein called the “Company”,
which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to

     or registered assigns the principal sum specified above, in such coin to
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date specified
above, and to pay interest thereon, in such coin or currency, from and
including the Original Issue Date specified above, or from the most recent
Interest

Exhibit D-1

 

Payment Date specified above to which interest has been paid or duly provided
for, as the case may be. Interest shall be paid in arrears monthly, quarterly,
semiannually or annually as specified above under Interest Payment Dates, on
each Interest Payment Date in each year and at Maturity, commencing on (a) the
first such Interest Payment Date next succeeding the Original Issue Date
specified above, or (b) if such Original Issue Date is after a Record Date and
prior to the first Interest Payment Date, on the second Interest Payment Date,
at a rate per annum equal to the Initial Interest Rate specified above until
the initial Interest Reset Date specified above, and thereafter at a rate per
annum determined in accordance with the provisions in the Indenture for
calculating the Interest Rate for Notes having the Interest Rate Basis
specified above, until Maturity and the principal hereof is paid or made
available for payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Note is registered at the close of
business on the Record Date specified above next preceding such Interest
Payment Date; provided, however, that if the Original Issue Date falls between
a Record Date and the next Interest Payment Date, the first payment of interest
will be paid on the second Interest Payment Date subsequent to such Original
Issue Date to the Person in whose name this Note is registered at the close of
business on the Record Date for such second Interest Payment Date; and
provided, further, that interest payable on the Maturity date, or, if
applicable, upon redemption, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Record Date and shall be paid to the Person in
whose name this Note is registered at the close of business on a Record Date
for the payment of such defaulted interest to be fixed by the Company, notice
whereof shall be given to Noteholders not less than fifteen days prior to such
Record Date. Payment of the principal of and any premium and interest on this
Note due at the Maturity of this Note shall be payable in immediately available
funds when due upon presentation and surrender of such Note at the Corporate
Trust Office of the Trustee in the Borough of Manhattan, the City of New York;
provided that this Note is presented to the Trustee in time for the Trustee to
make such payment in such funds in accordance with its normal procedures.
Accrued Interest on (and, if this Note is an Amortizing Note, installments of
principal of) this Note (other than Accrued Interest or such installments
payable at Maturity) shall be paid by a clearinghouse funds check mailed on the
Interest Payment Date; provided, however, that if any Holder of Notes, the
aggregate principal amount of which equals or exceeds $10,000,000, provides a
written request to the Trustee on or before the applicable Record Date for such
Interest Payment Date, Accrued Interest (and such installments of principal)
shall be paid by wire transfer of immediately available funds to a bank within
the continental United States or by direct deposit into the account of such
Holder if such account is maintained with the Trustee. The Company will pay
any administration costs imposed by banks in connection with making payments by
wire transfer, but not any tax, assessment or governmental charge imposed upon
the Holder of this Note.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an

Exhibit D-2

 

authorized signatory, this Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

	 	 	 	 	 
	Dated:	 	 	 	 
	 
	 	 	MGE Energy, Inc.
	 
	 	 	
By:	 	 
	 
	 	 	 	 	 

Name:
	 	 	 	 	Title:    President
	 
	 	 	
By:	 	 
	 
	 	 	 	 	 

Name:
	 	 	 	 	Title:    Secretary

TRUSTEE’S CERTIFICATE

OF AUTHENTICATION

     This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 
	
BANK ONE TRUST COMPANY, N.A., as Trustee
	 
	By:	 	 
	 
	 	 	
Authorized Signatory

Exhibit D-3

 

[REVERSE OF NOTE]

MGE ENERGY, INC.

MEDIUM-TERM NOTE

     This Note is one of the duly authorized Notes of the Company (herein
called the “Notes”), issued and to be issued under an Indenture dated as of
[______], 2003 (herein called the “Indenture”) between the Company and Bank
One Trust Company, N.A., as Trustee (herein called the “Trustee”, which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Noteholders, and of the terms upon which the
Notes are, and are to be, authenticated and delivered.

     Each Note shall be dated the date of its authentication by the Trustee.
Each Note shall also bear an Original Issue Date which with respect to this
Note (or any portion thereof) shall mean the date of its original issue as
specified on the face hereof, and such Original Issue Date shall remain the
same for all Notes subsequently issued upon transfer, exchange or substitution
of such original Note (or such subsequently issued Notes) regardless of their
dates of authentication. The Notes may bear different dates, mature at
different times, bear interest at different rates, be subject to different
redemption provisions, if any, and may otherwise vary, all as provided in the
Indenture.

     Interest on this Note will be payable on the Interest Payment Date or
Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity. Unless otherwise specified on the face hereof, payments on this Note
with respect to any particular Interest Payment Date or the Maturity date will
include interest accrued from and including the Original Issue Date, or from
and including the most recent Interest Payment Date to which interest has been
paid or duly provided for, to but excluding such Interest Payment Date or the
Maturity date. Interest on this Note shall be calculated for each day during
such period by dividing the interest rate applicable to such day by 360, if the
Interest Rate Basis specified on the face hereof is the Commercial Paper Rate,
LIBOR or Prime Rate, or by the actual number of days in the year, if the
Interest Rate Basis specified on the face hereof is the Treasury Rate. Unless
otherwise provided in an annex attached hereto, the Trustee, acting in the
capacity of Calculation Agent, will calculate the Interest Rate on this Note.
Upon the request of any Holder of this Note, the Trustee shall provide to such
Holder the Interest Rate then in effect and, if then determined, the interest
rate that will become effective on the next Interest Reset Date with respect to
this Note. Each such determination of an Interest Rate will be final and
binding in the absence of manifest error.

     Unless otherwise specified in an annex attached hereto, if this Note is an
Amortizing Note, payments with respect to the Note will be applied first to
interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and
interest on this Note or the formula for the amortization of principal and/or
interest is set forth in an annex attached to this Note.

Exhibit D-4

 

     All percentages resulting from any calculation with respect to this Note
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point (with five one-millionths of a percentage point rounded
upward) and all dollar amounts used in or resulting from any such calculation
with respect to this Note will be rounded to the nearest cent (with one-half
cent being rounded upward)

     “Business Day” means, unless otherwise specified on the face hereof, any
Monday, Tuesday, Wednesday, Thursday or Friday that in the City of New York is
not a day on which banking institutions are authorized or obligated by law,
regulation or executive order to close. If an Interest Payment Date or
Maturity for this Note falls on a day that is not a Business Day, payment of
principal, premium, if any, and interest to be made on such day with respect to
this Note will be made on the next day that is a Business Day with the same
force and effect as if made on the due date, and no additional interest will be
payable on the date of payment for the period from and after the due date as a
result of such delayed payment.

     This Note will be redeemable at the option of the Company prior to its
Stated Maturity only if an Initial Redemption Date is specified on the face
hereof. If so specified, this Note will be subject to redemption at the option
of the Company on any date on and after such Initial Redemption Date in whole
or from time to time in part in increments of $1,000 or integral multiples
thereof, at the redemption prices specified in an annex attached to this Note,
plus accrued and unpaid interest to but excluding the date of redemption, but
payments due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on the
relevant Record Date specified on the face hereof, all as provided in the
Indenture. The Company may exercise such option by causing the Trustee to mail
a notice of such redemption, at least 30 but not more than 60 calendar days
prior to the date of redemption, in accordance with the provisions of the
Indenture. In the event of redemption of this Note in part only, this Note
will be cancelled and a new Note or Notes representing the unredeemed portion
hereof will be issued in the name of the Holder hereof. This Note is not
subject to a sinking fund unless otherwise specified in an annex attached
hereto.

     If so specified on the face of this Note, (i) this Note shall be subject
to repayment, in whole or in part, prior to Stated Maturity at the option of
the Holder on a certain date or dates and at a certain price or prices, plus
accrued and unpaid interest to but excluding the date of payment; (ii) the
Stated Maturity of this Note may be extended at the option of the Company for
one or more Extension Periods of from one to five years, as specified on the
face hereof, up to but not beyond the Final Maturity Date specified on the face
hereof; (iii) the interest rate specified on the face hereof may be reset by
the Company in accordance with a formula or otherwise on the Optional Interest
Reset Date or Dates specified on the face hereof; and/or (iv) this Note shall
be renewable at the option of the Holder, in each case in accordance with the
provisions of the Indenture applicable thereto or any indenture supplemental
thereto and/or as specified in an annex attached to this Note.

     Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note as specified on the face hereof, the amount
payable in the event the principal amount hereof is declared to be due and
payable immediately by reason of an Event of Default or in the event of
redemption or repayment hereof prior to the Stated Maturity hereof, in lieu of
the principal amount due at the Stated Maturity hereof, shall be the Amortized
Face Amount of this

Exhibit D-5

 

 Note as of the date of declaration, redemption or repayment, as the case
may be. The “Amortized Face Amount” of this Note shall be the amount equal to
(a) the principal amount of this Note multiplied by the Issue Price specified
on the face hereof plus (b) the portion of the difference between the dollar
amount thus obtained and the principal amount hereof that has accreted at the
Yield to Maturity specified on the face hereof (computed in accordance with
generally accepted United States bond yield computation principles) to such
date of declaration, redemption, or repayment but in no event shall the
Amortized Face Amount of this Note exceed the principal amount stated on the
face hereof.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Noteholders to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Notes then
outstanding that would be affected thereby. The Indenture also contains
provisions permitting the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, on behalf of the Holders of all
Notes, to waive compliance by the Company with certain covenants in the
Indenture. The Indenture also provides that the Holders of not less than a
majority in aggregate principal amount of the Notes then outstanding may waive
certain past defaults and their consequences on behalf of the Holders of all
Notes. Any such consent or waiver by the Holder of this Note (if not timely
revoked in accordance with the Indenture) shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note or such Note.

     As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing default
with respect to the Notes, the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as Trustee, and the Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of and any premium or interest on this Note on or after the respective due
dates expressed herein.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the times, places and rates, and in the coin or
currency, herein prescribed.

     The Indenture contains provisions for the satisfaction and discharge of
the Indenture upon compliance by the Company with certain conditions specified
therein, which provisions apply to this Note.

     Unless otherwise specified in an annex attached hereto, the Notes are
issuable only in registered form, without coupons, in denominations of $1,000
and integral multiples thereof. As provided in the Indenture and subject to
certain limitations specified therein, this Note may be

Exhibit D-6

 

 exchanged for one or more new Notes, of any authorized denominations and
of a like aggregate principal amount and Stated Maturity and having the same
terms and Original Issue Date, as requested by the Holder surrendering this
Note.

     As provided in the Indenture and subject to the limitations specified
therein, upon due presentment of this Note for registration of transfer at an
office or agency of the Trustee in the Borough of Manhattan, the City of New
York, maintained for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the note
registrar duly executed by, the Holder hereof or the attorney of such Holder
duly authorized in writing, the Company shall execute and register or cause to
be registered and the Trustee shall authenticate and make available for
delivery, in the name of the transferee or transferees one or more new Notes of
any authorized denominations and of a like aggregate principal amount and
Stated Maturity and having the same terms and Original Issue Date.

     No service charge will be made for any such exchange or registration of
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

     The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in the Note which are defined in the Indenture but are not
defined in this Note shall have the meanings assigned to them in the Indenture.

Exhibit D-7

 

OPTION TO ELECT REPAYMENT

(To be completed only if this Note is repayable at the option

of the Holder and the Holder elects to exercise such rights)

     The undersigned owner of this Note hereby irrevocably elects to have the
Company repay (i) the principal amount of this Note or portion hereof below
designated at the applicable optional repayment price indicated on an annex
attached hereto plus accrued and unpaid interest to but excluding the date of
repayment, if this election is being made pursuant to the option referred to
under “Option to Elect Repayment” on the face hereof, or (ii) l00% of the
principal amount of this Note plus accrued and unpaid interest to but excluding
the Optional Interest Reset Date, if this election is being made following an
exercise by the Company of the option referred to under “Optional Interest
Reset” on the face hereof, or to but excluding the Pre-Exercise Stated Maturity
Date as defined in the Indenture), if this election is being made following an
exercise by the Company of the option referred to under “Optional Extension of
Original Maturity Date” on the face hereof. If a portion of this Note is not
being repaid pursuant to clause (i) above, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):
Dated:      

	 	 	 
	Dated:_______________________________________________________________	 	______________________________________________________
		 	 
	Principal amount to be repaid if
amount to be repaid is pursuant
to clause (i) above and is less than
the entire principal amount of this
Note (principal amount remaining
must be an authorized denomination)	 	
Signature

Sign exactly as name appears on the
front of this Note

Indicate address where check is
to be sent:
	$	 	 
	
	 	

	(Which must be an integral multiple
of $1,000)	 	
	 	 	

Social Security Or Other Taxpayer

    ID Number:
	 	 	

	Denomination or denominations of the
Note or Notes to be issued for the
portion of this Note not being
repaid pursuant to clause (i) above:	 	 
	
	 	 
	 	 	 
	
	 	 

Exhibit D-8

 

ABBREVIATIONS

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

	 	 	 	 	 	 	 
	TEN COM	-	
as tenants in common
	 	UNIT GIFT

MIN ACT -
	 	      Custodian      
	 	 	 	 	 	 	(Cust)         (Minor)
	TENENT 	-	
as tenants by the

entireties
	 	 	 	Under Uniform Gifts

to Minors Act
	 	 	 	 	 	 	 
	JT TEN	-	
as joint tenants with

right of survivorship and

not as tenants in common	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	State

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

FOR VALUE RECEIVED the undersigned hereby sell(s)

assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR

    OTHER IDENTIFYING NUMBER OF ASSIGNEE

Please print or typewrite name and address including postal zip code of assignee

the within note and all rights thereunder, hereby irrevocably constituting and
appointing __________________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the premises.

	 	 	 	 
	Dated:	 	 	 
	 	
	 	

	 	 	 	
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the within instrument in
every particular, without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by an “eligible
guarantor institution” that is a member or participant in the
Securities Transfer Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange, Inc. Medallion
Program.

Exhibit D-9

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