Document:

ctb94_indenture07.htm

    

 

    

    

    

    
      

      

      

      

      NATIONAL
        RURAL UTILITIES COOPERATIVE

      FINANCE
        CORPORATION

      

      TO

      

      FIRST
        BANK NATIONAL ASSOCIATION

      Trustee.

      

      

      

      

      

      

      

      Indenture

      Dated
        as of February 15, 1994

      

      

      

      

      

      

      Collateral
        Trust Bonds

      

      

      

    

    

    

    

    

    

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
 

    
      
        	
                TABLE
                  OF CONTENTS

              	 
	 	
                Page

              
	 	 
	
                PARTIES

              	
                1

              
	
                RECITALS

              	
                1

              
	
                GRANTING
                  CLAUSES

              	
                1

              
	
                ARTICLE
                  ONE — DEFINITION AND OTHER PROVISIONS OF
                  GENERAL APPLICATION

              	
                2

              
	
                SECTION
                  1.01.    Definitions

              	
                2

              
	 	
                Accountant

              	
                2

              
	 	
                Act

              	
                2

              
	 	
                Affiliate

              	
                2

              
	 	
                Allowable
                  Amount

              	
                2

              
	 	
                Appraiser

              	
                3

              
	 	
                Authenticating
                  Agent

              	
                3

              
	 	
                Authorized
                  Newspaper

              	
                3

              
	 	
                Averaged
                  Coverage Ratio

              	
                3

              
	 	
                Bearer
                  Bond

              	
                3

              
	 	
                Board
                  of Directors

              	
                3

              
	 	
                Board
                  Resolution

              	
                3

              
	 	
                Bondholder

              	
                3

              
	 	
                Bond
                  Register and Bond Registrar

              	
                3

              
	 	
                Business
                  Day

              	
                3

              
	 	
                Capital
                  Term Certificate

              	
                3

              
	 	
                Certificate
                  of Available Eligible Collateral

              	
                3

              
	 	
                Commission

              	
                3

              
	 	
                Company

              	
                3

              
	 	
                Company
                  Request and Company Order

              	
                3

              
	 	
                Completed
                  Calendar Year

              	
                4

              
	 	
                Corporate
                  Trust Office

              	
                4

              
	 	
                Corporation

              	
                4

              
	 	
                Coverage
                  Ratio

              	
                4

              
	 	
                Defaulted
                  Interest

              	
                4

              
	 	
                Depositary

              	
                4

              
	 	
                Distribution
                  System Member

              	
                5

              
	 	
                Eligible
                  Collateral

              	
                5

              
	 	
                Eligible
                  Mortgage Note

              	
                5

              
	 	
                Equity
                  Ratio

              	
                5

              
	 	
                Event
                  of Default

              	
                5

              
	 	
                Foreign
                  Currency

              	
                5

              
	 	
                Global
                  Bond

              	
                5

              
	 	
                Holder

              	
                5

              
	 	
                Indebtedness

              	
                5

              
	 	
                Indenture

              	
                6

              
	 	
                Independent

              	
                6

              
	 	
                Interest
                  Payment Date

              	
                6

              

      

      

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      
        	 	
                Lien
                  of this Indenture

              	
                6

              
	 	
                Loan
                  Agreement

              	
                7

              
	 	
                Maturity

              	
                7

              
	 	
                Member

              	
                7

              
	 	
                Mortgage

              	
                7

              
	 	
                Mortgage
                  Note

              	
                7

              
	 	
                Officers’
                  Certificate

              	
                7

              
	 	
                Opinion
                  of Counsel

              	
                7

              
	 	
                Outstanding

              	
                7

              
	 	
                Paying
                  Agent

              	
                8

              
	 	
                Permitted
                  Investments

              	
                8

              
	 	
                Person

              	
                8

              
	 	
                Place
                  of Payment

              	
                8

              
	 	
                Pledged
                  Property

              	
                8

              
	 	
                Predecessor
                  Bonds

              	
                8

              
	 	
                REA

              	
                8

              
	 	
                Redemption
                  Date

              	
                8

              
	 	
                Redemption
                  Price

              	
                8

              
	 	
                Registered
                  Bond

              	
                8

              
	 	
                Registered
                  Holder

              	
                8

              
	 	
                Regular
                  Record Date

              	
                8

              
	 	
                Responsible
                  Officer

              	
                8

              
	 	
                Restricted
                  Rentals

              	
                8

              
	 	
                Special
                  Record Date

              	
                9

              
	 	
                Stated
                  Maturity

              	
                9

              
	 	
                Stock
                  or Capital Stock

              	
                9

              
	 	
                Superior
                  Indebtedness

              	
                9

              
	 	
                Trust
                  Indenture Act or TIA

              	
                9

              
	 	
                Trustee

              	
                9

              
	 	
                United
                  States

              	
                9

              
	 	
                Vice
                  President

              	
                9

              
	
                SECTION
                  1.02.

              	
                Compliance
                  Certificates and Opinions

              	
                9

              
	
                SECTION
                  1.03.

              	
                Form
                  of Documents Delivered to Trestee

              	
                10

              
	
                SECTION
                  1.04.

              	
                Acts
                  of Holders

              	
                10

              
	
                SECTION
                  1.05.

              	
                Notices,
                  etc., to Trustee and Company

              	
                12

              
	
                SECTION
                  1.06.

              	
                Notices
                  to Holders; Waiver.

              	
                12

              
	
                SECTION
                  1.07.

              	
                Language
                  of Notices, etc.

              	
                12

              
	
                SECTION
                  1.08.

              	
                Conflict
                  with Trust Indenture Act

              	
                13

              
	
                SECTION
                  1.09.

              	
                Effect
                  of Heading and Table of Contents

              	
                13

              
	
                SECTION
                  1.10.

              	
                Successors
                  and Assigns

              	
                13

              
	
                SECTION
                  1.11.

              	
                Separability
                  Clause

              	
                13

              
	
                SECTION
                  1.12.

              	
                Benefits
                  of Indenture.

              	
                13

              
	
                SECTION
                  1.13.

              	
                Governing
                  Law

              	
                13

              

      

      

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
                  1.14.

              	
                Legal
                  Holidays

              	
                13

              
	
                ARTICLE
                  TWO — THE BONDS

              	
                13

              
	
                SECTION
                  2.01.

              	
                General
                  Limitations.

              	
                13

              
	
                SECTION
                  2.02.

              	
                Issuable
                  in Series.

              	
                14

              
	
                SECTION
                  2.03.

              	
                Terms
                  of Particular Series.

              	
                14

              
	
                SECTION
                  2.04.

              	
                Form
                  and Denominations.

              	
                16

              
	
                SECTION
                  2.05.

              	
                Execution,
                  Authentication and Delivery and Dating

              	
                17

              
	
                SECTION
                  2.06.

              	
                Temporary
                  Bonds.

              	
                18

              
	
                SECTION
                  2.07.

              	
                Registration,
                  Transfer and Exchange.

              	
                18

              
	
                SECTION
                  2.08.

              	
                Mutilated,
                  Destroyed, Lost and Stolen Bonds

              	
                20

              
	
                SECTION
                  2.09.

              	
                Payment
                  of Interest; Interest Rights Preserved.

              	
                21

              
	
                SECTION
                  2.10.

              	
                Persons
                  Deemed Owners.

              	
                23

              
	
                SECTION
                  2.11.

              	
                Cancellation.

              	
                23

              
	
                ARTICLE
                  THREE — AUTHENTICATION AND DELIVERY OF BONDS

              	
                23

              
	
                SECTION
                  3.01.

              	
                Authentication
                  and Delivery of Bonds on Basis of Eligible
                  Collateral.

              	
                23

              
	
                SECTION
                  3.02.

              	
                Authentication
                  and Delivery of Bonds on Basis of Refunding Outstanding
                  Bonds.

              	
                33

              
	
                SECTION
                  3.03.

              	
                Authentication
                  and Delivery of Bonds on Basis of Canceling Bonds Not Issued by
                  the
                  Company

              	
                34

              
	
                SECTION
                  3.04

              	
                Other
                  Authentication and Delivery of Bonds

              	
                35

              
	
                ARTICLE
                  FOUR — PROVISIONS AS TO PLEDGED PROPERTY

              	
                35

              
	
                SECTION
                  4.01.

              	
                Holding
                  of Pledged Securities

              	
                35

              
	
                SECTION
                  4.02.

              	
                Disposition
                  of Payments on Pledged Property

              	
                35

              
	
                SECTION
                  4.03.

              	
                Voting;
                  Consents

              	
                36

              
	
                SECTION
                  4.04.

              	
                Certain
                  Actions in Case of Judicial Proceedings.

              	
                37

              
	
                SECTION
                  4.05.

              	
                Renewal;
                  Extension; Substitution

              	
                37

              
	
                SECTION
                  4.06.

              	
                Certain
                  Rights in Respect of Stock

              	
                38

              
	
                SECTION
                  4.07.

              	
                Consolidation,
                  Merger, etc., of Issuing Corporations.

              	
                38

              
	
                SECTION
                  4.08.

              	
                Certain
                  Voting and Other Powers of the Trustee

              	
                39

              
	
                SECTION
                  4.09.

              	
                Rights
                  of Trustee and Company After Event of Default.

              	
                39

              
	
                ARTICLE
                  FIVE — APPLICATION OF MONEYS INCLUDED IN PLEDGED PROPERTY; PERMITTED
                  INVESTMENTS

              	
                39

              

      

      

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
                  5.01.

              	
                Cash
                  Held by Trustee Treated as a Deposit.

              	
                39

              
	
                SECTION
                  5.02.

              	
                Use
                  of Moneys for Payment, Redemption or Purchase of
                  Bonds

              	
                40

              
	
                SECTION
                  5.03.

              	
                Investment
                  of Moneys by Trustee.

              	
                40

              
	
                SECTION
                  5.04.

              	
                Trustee
                  to Retain Moneys if Event of Default Exists

              	
                41

              
	
                ARTICLE
                  SIX — WITHDRAWAL OF COLLATERAL

              	
                41

              
	
                SECTION
                  6.01.

              	
                Withdrawal
                  of Collateral

              	
                41

              
	
                SECTION
                  6.02.

              	
                Reassignment
                  of Mortgage Notes Upon Payment.

              	
                43

              
	
                ARTICLE
                  SEVEN — PARTICULAR COVENANTS OF THE COMPANY

              	
                43

              
	
                SECTION
                  7.01.

              	
                Payment
                  of Principal, Premium and Interest.

              	
                43

              
	
                SECTION
                  7.02.

              	
                Maintenance
                  of Offices or Agencies.

              	
                43

              
	
                SECTION
                  7.03.

              	
                Money
                  for Bond Payments to be Held in Trust

              	
                44

              
	
                SECTION
                  7.04.

              	
                Maintenance
                  of Corporate Existence.

              	
                45

              
	
                SECTION
                  7.05.

              	
                Maintenance
                  of Books of Record and Account; Financial Statements of Company
                  and
                  Members.

              	
                45

              
	
                SECTION
                  7.06.

              	
                Warranty
                  of Title and Authority to Pledge

              	
                45

              
	
                SECTION
                  7.07.

              	
                Protection
                  of Title; Payment of Taxes; Liens, etc

              	
                46

              
	
                SECTION
                  7.08.

              	
                Recordation;
                  Opinions of Counsel.

              	
                46

              
	
                SECTION
                  7.09.

              	
                Further
                  Assurances

              	
                47

              
	
                SECTION
                  7.10.

              	
                Advances
                  by Trustee.

              	
                47

              
	
                SECTION
                  7.11.

              	
                Restriction
                  on Indebtedness

              	
                48

              
	
                SECTION
                  7.12.

              	
                Restriction
                  on Amendment of Certain Instruments

              	
                48

              
	
                SECTION
                  7.13.

              	
                Maintenance
                  of Eligible Collateral.

              	
                48

              
	
                SECTION
                  7.14.

              	
                Restrictions
                  on Assignments of Mortgage and Loan Agreements.

              	
                49

              
	
                SECTION
                  7.15.

              	
                Statement
                  as to Compliance

              	
                49

              
	
                SECTION
                  7.16.

              	
                Waiver
                  of Certain Covenants

              	
                49

              
	
                ARTICLE
                  EIGHT — REDEMPTION OF BONDS

              	
                49

              
	
                SECTION
                  8.01.

              	
                Right
                  of Redemption

              	
                49

              
	
                SECTION
                  8.02.

              	
                Applicability
                  of Article.

              	
                49

              
	
                SECTION
                  8.03.

              	
                Election
                  to Redeem; Notice to Trustee

              	
                49

              
	
                SECTION
                  8.04.

              	
                Selection
                  by Trustee of Bonds to be Redeemed.

              	
                50

              
	
                SECTION
                  8.05.

              	
                Notice
                  of Redemption

              	
                50

              

      

      

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
                  8.06.

              	
                Deposit
                  of Redemption Price

              	
                50

              
	
                SECTION
                  8.07.

              	
                Bonds
                  Payable on Redemption Date.

              	
                51

              
	
                SECTION
                  8.08.

              	
                Bonds
                  Redeemed in Part.

              	
                51

              
	
                ARTICLE
                  NINE — REMEDIES

              	
                51

              
	
                SECTION
                  9.01.

              	
                Events
                  of Default.

              	
                51

              
	
                SECTION
                  9.02.

              	
                Acceleration
                  of Maturity; Rescission and Annulment.

              	
                53

              
	
                SECTION
                  9.03.

              	
                Trustee’s
                  Power of Sale of Pledged Property; Notice Required; Power to Bring
                  Suit.

              	
                54

              
	
                SECTION
                  9.04.

              	
                Incidents
                  of Sale of Pledged Property.

              	
                55

              
	
                SECTION
                  9.05.

              	
                Upon
                  Default Company Will Pay Principal and Interest upon Demand of
                  Trustee.

              	
                56

              
	
                SECTION
                  9.06.

              	
                Judicial
                  Proceedings Instituted by Trustee.

              	
                56

              
	
                SECTION
                  9.07.

              	
                Bondholders
                  May Demand Enforcement of Rights by Trustee.

              	
                58

              
	
                SECTION
                  9.08.

              	
                Control
                  by Bondholders.

              	
                58

              
	
                SECTION
                  9.09.

              	
                Waiver
                  of Past Defaults

              	
                59

              
	
                SECTION
                  9.10.

              	
                Holder
                  May Not Bring Suit Except Under Certain Conditions.

              	
                59

              
	
                SECTION
                  9.11.

              	
                Undertaking
                  To Pay Court Costs

              	
                60

              
	
                SECTION
                  9.12.

              	
                Right
                  of Holders To Receive Payment Not To Be Impaired.

              	
                60

              
	
                SECTION
                  9.13.

              	
                Application
                  of Moneys Collected by Trustee.

              	
                60

              
	
                SECTION
                  9.14.

              	
                Bonds
                  or Coupons Held by Company Not To Share in
                  Distribution.

              	
                61

              
	
                SECTION
                  9.15.

              	
                Waiver
                  of Appraisement, Valuation, Stay, Right to
                  Marshalling.

              	
                61

              
	
                SECTION
                  9.16.

              	
                Remedies
                  Cumulative; Delay or Omission Not a Waiver

              	
                62

              
	
                ARTICLE
                  TEN — THE TRUSTEE

              	
                62

              
	
                SECTION
                  10.01.

              	
                Certain
                  Duties and Responsibilities.

              	
                62

              
	
                SECTION
                  10.02.

              	
                Notice
                  of Defaults.

              	
                63

              
	
                SECTION
                  10.03.

              	
                Certain
                  Rights of Trustee

              	
                63

              
	
                SECTION
                  10.04.

              	
                Not
                  Responsible for Recitals or Issuance of Bonds.

              	
                64

              
	
                SECTION
                  10.05.

              	
                May
                  Hold Bonds.

              	
                64

              
	
                SECTION
                  10.06.

              	
                Money
                  Held in Trust.

              	
                65

              
	
                SECTION
                  10.07.

              	
                Compensation
                  and Reimbursement.

              	
                65

              
	
                SECTION
                  10.08.

              	
                Disqualification;
                  Conflicting Interests.

              	
                65

              
	
                SECTION
                  10.09.

              	
                Corporate
                  Trustee Required; Eligibility.

              	
                65

              

      

      

      
        
          
          

        

        
          v

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
                  10.10.

              	
                Resignation
                  and Removal; Appointment of Successor.

              	
                66

              
	
                SECTION
                  10.11.

              	
                Acceptance
                  of Appointment by Successor.

              	
                67

              
	
                SECTION
                  10.12.

              	
                Merger,
                  Conversion, Consolidation or Succession to Business.

              	
                67

              
	
                SECTION
                  10.13.

              	
                Preferential
                  Collection of Claims Against Company.

              	
                67

              
	
                SECTION
                  10.14.

              	
                Appointment
                  of Authenticating Agent.

              	
                68

              
	
                ARTICLE
                  ELEVEN — BONDHOLDERS’ LISTS AND REPORTS BY TRUSTEE AND
                  COMPANY

              	
                69

              
	
                SECTION
                  11.01.

              	
                Company
                  to Furnish Trustee Names and Addresses of Bondholders

              	
                69

              
	
                SECTION
                  11.02.

              	
                Preservation
                  of Information; Communications to Bondholders.

              	
                69

              
	
                SECTION
                  11.03.

              	
                Reports
                  by Trustee.

              	
                70

              
	
                SECTION
                  11.04.

              	
                Reports
                  by Company.

              	
                70

              
	
                ARTICLE
                  TWELVE — CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR
                  LEASE

              	
                71

              
	
                SECTION
                  12.01.

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

              	
                71

              
	
                SECTION
                  12.02.

              	
                Successor
                  Corporation Substituted.

              	
                71

              
	
                SECTION
                  12.03.

              	
                Limitation
                  on Lease of Properties as Entirety.

              	
                72

              
	
                ARTICLE
                  THIRTEEN — SUPPLEMENTAL INDENTURES; AMENDMENT OF PLEDGED
                  PROPERTY

              	
                72

              
	
                SECTION
                  13.01.

              	
                Supplemental
                  Indentures and Amendments of Certain Pledged Property Without Consent
                  of
                  Bondholders.

              	
                72

              
	
                SECTION
                  13.02.

              	
                Supplemental
                  Indentures and Amendments of Certain Pledged Property With Consent
                  of
                  Bondholders.

              	
                74

              
	
                SECTION
                  13.03.

              	
                Execution
                  of Supplemental Indentures.

              	
                75

              
	
                SECTION
                  13.04.

              	
                Effect
                  of Supplemental Indentures.

              	
                75

              
	
                SECTION
                  13.05.

              	
                Conformity
                  with Trust Indenture Act

              	
                75

              
	
                SECTION
                  13.06.

              	
                Reference
                  in Bonds to Supplemental Indentures.

              	
                75

              
	
                ARTICLE
                  FOURTEEN — DEFEASANCE

              	
                76

              
	
                SECTION
                  14.01.

              	
                Payment
                  of Indebtedness; Satisfaction.

              	
                76

              
	
                SECTION
                  14.02.

              	
                Satisfaction,
                  Discharge and Defeasance of Bonds of Any Series.

              	
                77

              
	
                SECTION
                  14.03.

              	
                Reinstatement.

              	
                79

              
	
                SECTION
                  14.04.

              	
                Definitions.

              	
                79

              
	
                ARTICLE
                  FIFTEEN — SUNDRY PROVISIONS

              	
                80

              

      

      

      
        
          
          

        

        
          vi

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
                  15.01.

              	
                Exercise
                  of Rights and Powers Under Mortgage Notes and
                  Mortgages.

              	
                80

              
	
                SECTION
                  15.02.

              	
                Execution
                  in Counterparts

              	
                80

              
	
                SCHEDULE
                  I — SUMMARY OF TERMS OF MORTGAGE

              	
                82

              

      

    

    
      
        
          
          

        

        
          vii

          
            

          

        

        
          
          

        

      

    

    

    INDENTURE,
      dated as of February 15, 1994, between NATIONAL RURAL UTILITIES COOPERATIVE
      FINANCE CORPORATION, a District of Columbia cooperative association (hereinafter
      called the “Company”), having its principal executive office
      and mailing address at 2201 Cooperative Way, Herndon, VA 22071, and FIRST BANK
      NATIONAL ASSOCIATION, a national banking association, as trustee hereunder
      (hereinafter called the “Trustee”), having its corporate trust
      office at 180 East Fifth Street, Saint Paul, MN 55101.

     

    RECITALS
      OF THE COMPANY

     

    WHEREAS,
      the Company has duly authorized the creation of an issue of an unlimited
      aggregate principal amount of its bonds in series, from time to time, as
      hereinafter provided (hereinafter called the “Bonds”); and, to
      secure the Bonds and to provide for the authentication and delivery thereof
      by
      the Trustee, the Company has duly authorized the execution and delivery of
      this
      Indenture;

     

    NOW,
      THEREFORE, THIS INDENTURE WITNESSETH that, to secure the payment of the
      principal of and interest and premium (if any) on all the Bonds authenticated
      and delivered hereunder and any coupons appertaining thereto and issued by
      the
      Company and outstanding, and the performance of the covenants therein and herein
      contained, and in consideration of the premises and of the covenants herein
      contained and of the purchase of the Bonds by the holders thereof, and of the
      sum of $1 paid to the Company by the Trustee at or before the delivery hereof,
      the receipt whereof is hereby acknowledged, the Company by these presents does
      grant, bargain, sell, release, convey, assign, pledge, transfer, mortgage and
      confirm unto the Trustee all and singular the following (which collectively
      are
      hereinafter called the “Pledged Property”), to
      wit:

     

    CLAUSE
      FIRST

     

    All
      Mortgage Notes (as hereinafter defined) as shall be actually delivered, assigned
      and pledged by the Company to the Trustee, on the date hereof or from time
      to
      time hereafter, together with the interest of the Company (if any) in the
      Mortgages (as hereinafter defined) securing said Mortgage Notes.

     

    CLAUSE
      SECOND

     

    Also
      any property, including cash and Permitted Investments (as hereinafter defined),
      that may, on the date hereof or from time to time hereafter, be subjected to
      the
      lien and/or pledge hereof by the Company by delivery, assignment or pledge
      thereof to the Trustee hereunder; and the Trustee is hereby authorized to
      receive the same at any time as additional security hereunder.  Such
      subjection to the lien hereof of any such property as additional security may
      be
      made subject to any reservations, limitations or conditions which shall be
      set
      forth in a written instrument executed by the Company and/or by the Trustee
      respecting the scope or priority of such lien and/or pledge or the use and
      disposition of such property or the proceeds thereof.

     

    TO
      HAVE AND TO HOLD the Pledged Property unto the Trustee and its successors and
      assigns forever, but subject to the terms and conditions hereinafter set
      forth.

     

    BUT
      IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security
      (except as any sinking or other fund, established in accordance herewith, may
      afford additional special security for the Bonds and any coupons appertaining
      thereto of any particular series) of the holders from time to time of all the
      Bonds authenticated and delivered hereunder and any coupons appertaining thereto
      and issued by the Company and outstanding, without any priority of any one
      Bond
      or coupon over any other Bond or coupon.

     

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    AND
      UPON THE TRUSTS and subject to the covenants and conditions hereinafter set
      forth.

     

    ARTICLE
      ONE

    DEFINITION
      AND OTHER PROVISIONS Of GENERAL APPLICATION.

     

    
      	
              SECTION
                1.01.

            	
              Definitions.

            

    

     

    For
      all purposes of this Indenture, except as otherwise expressly provided or unless
      the context otherwise requires:

     

    (1)           the
      terms defined in this Article have the meanings assigned to them in this
      Article, and include the plural as well as the singular;

     

    (2)           all
      other terms used herein which are defined in the Trust Indenture Act, either
      directly or by reference therein, have the meanings assigned to them
      therein;

     

    (3)           all
      accounting terms not otherwise defined herein have the meanings assigned to
      them
      in accordance with generally accepted accounting principles;

     

    (4)           all
      reference in this instrument to designated “Articles”,
“Sections” and other subdivisions are to the designated
      Articles, Sections and other subdivisions of this instrument; and

     

    (5)           the
      words “herein”, “hereof” and
“hereunder” and other words of similar
      import refer to this
      Indenture as a whole and not to any particular Article, Section or other
      subdivision.

     

    Certain
      terms, used principally in Article Ten, are defined in that
      Article.

     

    “Accountant”
      means a Person qualified to pass upon accounting questions, whether or not
      (unless herein required to be Independent) such Person shall be an officer
      or
      employee of the Company or a Member or of an Affiliate of the Company or a
      Member.

     

    “Act”
      when used with respect to any Holder has the meaning specified in Section
      1.04.

     

    “Affiliate”
      of any specified Person means any other Person directly or indirectly
      controlling or controlled by or under direct or indirect common control with
      such specified Person.  For the purposes of this definition,
“control” when used with respect to any specified Person means
      the power to direct the management and policies of such Person, directly or
      indirectly, whether through the ownership of voting securities, by contract
      or
      otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the
      foregoing.

     

    “Allowable
      Amount” of Eligible Collateral on any date means:

     

    (1)           with
      respect to cash, 100% thereof;

     

    (2)           with
      respect to Permitted Investments, the cost to the Company (exclusive of any
      accrued interest or brokerage commissions) except that with respect to any
      Permitted Investments which are traded on any national securities exchange
      or in
      any over-the-counter market, Allowable Amount on any date shall mean the fair
      market value thereof (as determined by the Company);

     

    (3)           with
      respect to Eligible Mortgage Notes, the principal amount theretofore advanced
      thereon which remains unpaid on such date.

     

    

    
      
        
          
          

        

        
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    “Appraiser”
      means a Person engaged in the business of appraising property or otherwise
      competent to determine the value of the particular property in question, whether
      or not (unless herein required to be Independent) such Person shall be an
      officer or employee of the Company or a Member or of an Affiliate of the Company
      or a Member.

     

    “Authenticating
      Agent” means any Person named as an Authenticating Agent pursuant to
Section 10.14.

     

    “Authorized
      Newspaper” means a newspaper of general circulation in a Place of
      Payment, printed in an official language of the country of publication or in
      the
      English language and customarily published on each Business Day, whether or
      not
      published on Saturdays, Sundays or holidays.

     

    “Averaged
      Coverage Ratio” of any Member means the average of the two higher of
      the Coverage Ratios of such Member for each of the last three Completed Calendar
      Years.

     

    “Bearer
      Bond” means any Bond payable to the bearer thereof.

     

    “Board
      of Directors” means either the board of directors of the Company or any
      committee of that board duly authorized to act for it in respect
      hereof.

     

    “Board
      Resolution” means 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.

     

    “Bondholder”
      means a bearer of a Bearer Bond or a Registered Holder of a Registered
      Bond.

     

    “Bond
      Register” and “Bond Registrar” have the respective
      meanings specified in Section 2.07.

     

    “Business
      Day” when used with respect to a Place of Payment means each Monday,
      Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
      institutions in that Place of Payment are authorized by law to
      close.

     

    “Capital
      Term Certificate” means a note of the Company substantially in the form
      of the capital term certificates outstanding on the date of execution and
      delivery of this Indenture and any other Indebtedness of the Company having
      substantially similar provisions as to subordination as those contained in
      said
      outstanding capital term certificates.

     

    “Certificate
      of Available Eligible Collateral” means a certificate substantially in
      the form provided in Section 3.01(b)(2).

     

    “Commission”
      means the Securities and Exchange Commission, as from time to time constituted,
      created under the Securities Exchange Act of 1934, or if at any time after
      the
      execution of this instrument such Commission is not existing and performing
      the
      duties now assigned to it under the Trust Indenture Act, then the body
      performing such duties on such date.

     

    “Company”
      means the Person named as the “Company” in the first paragraph of this
      instrument until a successor corporation shall have become such pursuant to
      the
      applicable provisions of this Indenture, and thereafter “Company” shall mean
      such successor corporation.

     

    “Company
      Request” and “Company Order” mean, respectively, a
      written request or order signed in the name of the Company by its Governor,
      Chief Executive Officer, Chairman of the Board, Vice

     

    

    
      
        
          
          

        

        
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    Chairman
      of the Board, President, Finance Officer or one of its Vice Presidents, and
      by
      its Treasurer, Secretary, or one of its Assistant Treasurers or Assistant
      Secretaries, and delivered to the Trustee.

     

    “Completed
      Calendar Year” of a Member means a calendar year ended more than 120
      days prior to any date of determination, unless financial statements of such
      Member for a later calendar year shall have been furnished to the Company
      pursuant to Section 7.05.

     

    “Corporate
      Trust Office” means the principal office of the Trustee at which at any
      particular time the corporate trust business of the Trustee shall be
      administered.

     

    “Corporation”
      shall include any cooperative association, voluntary association, joint stock
      company, business trust or similar organization.  Each reference
      herein to “corporation” shall be deemed to include Members.

     

    “Coverage
      Ratio” of any Member for any calendar year of such Member means the
      ratio determined by adding such Member’s Patronage Capital and Operating
      Margins, Non-Operating Margins 3⁄4 Interest,
      Interest
      Expense with respect to Long-Term Debt and Depreciation and Amortization Expense
      for such year, and dividing the sum so obtained by the sum of all payments
      of
      principal and interest required to be made during such year on account of such
      Member’s Long-Term Debt (but in the event any portion of such Member’s Long-Term
      Debt is refinanced during such year the payments of principal and interest
      required to be made during such year in respect thereof shall be based (in
      lieu
      of actual payments thereon) upon the larger of (x) an annualization of such
      payments required to be made with respect to the refinancing debt during the
      portion of such year such refinancing debt is outstanding and (y) the
      payments of principal and interest required to be made during the following
      year
      on account of such refinancing debt); Patronage Capital and Operating Margins,
      Interest Expense with respect to Long-Term Debt, Depreciation and Amortization
      Expense, Non-Operating Margins 3⁄4 Interest
      and
      Long-Term Debt being determined in accordance with the Uniform System of
      Accounts prescribed at the time by REA or, if such Member is not required to
      maintain its accounts in accordance with said Uniform System of Accounts,
      otherwise determined in accordance with generally accepted accounting
      principles, except that (i) in computing Interest Expense with respect to
      Long-Term Debt, and payments of interest required to be made on account of
      Long-Term Debt, for the purpose of the foregoing definition, there shall be
      added, to the extent not otherwise included, an amount equal to 33-1/3% of
      the
      excess of the Restricted Rentals paid by such Member for such year over 2%
      of
      such Member’s Equities and Margins for such year as defined in the Uniform
      System of Accounts prescribed by REA or, if such Member is not required to
      maintain its accounts in accordance with said Uniform System of Accounts,
      otherwise determined in accordance with generally accepted accounting
      principles, and (ii) in computing such Member’s Patronage Capital and
      Operating Margins for the purpose of the foregoing definition, all cash received
      in respect of generation and transmission and other capital credits (whether
      or
      not included in such Member’s Patronage Capital and Operating Margins) shall be
      included and all other amounts in respect of capital credits shall be
      excluded.

     

    “Defaulted
      Interest” has the meaning set forth in Section
      2.09.

     

    “Depositary”
      means, with respect to the Bonds of any series issuable or issued in whole
      or in
      part in the form of one or more Global Bonds, the Person designated as
      Depositary for such series by the Company pursuant to Section 2.03, until a
      successor Depositary shall have become such pursuant to the applicable
      provisions of this Indenture, and thereafter “Depositary” shall mean or include
      each Person who is then a Depositary hereunder, and if at any time there is
      more
      than one such Person, “Depositary” as used

     

    

    
      
        
          
          

        

        
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    with
      respect to the Bonds of any such series shall mean the Depositary with respect
      to the Bonds of that series.

     

    “Distribution
      System Member” means a Member 50% or more of whose gross operating
      revenues are derived from sales of electricity to ultimate consumers, determined
      as of the end of its last Completed Calendar Year.

     

    “Eligible
      Collateral” means cash, Permitted Investments and Eligible Mortgage
      Notes eligible for inclusion in a Certificate of Available Eligible Collateral
      and not deposited with or held by the Trustee for any payment upon particular
      Bonds or any coupons appertaining thereto.

     

    “Eligible
      Mortgage Note” means a Mortgage Note of a Distribution System Member
      which is secured by a Mortgage (i) under which no default in respect of any
      provision required by paragraphs 1 through 4 under Covenants and
      Warranties contained in Schedule I to this Indenture shall have occurred
      which shall not have been remedied or under which such a default would exist
      except for a waiver by the mortgagee or mortgagees under the Mortgage (it being
      understood that no default shall be deemed to exist in any case in which (x)
      such default relates only to a portion or portions of any such provision as
      was
      not required by said Schedule I to be included in the Mortgage, or (y) any
      action, omission to act or condition has been consented to or approved by the
      mortgagee or mortgagees pursuant to authority to grant consents or approvals
      contemplated by said paragraphs 1 through 4), and (ii) under which no “event of
      default” as defined in the Mortgage shall have occurred and shall have resulted
      in the exercise of any right or remedy described in the Mortgage.

     

    “Equity
      Ratio” of any Member means the ratio determined by dividing such
      Member’s Equities and Margins at the end of the last Completed Calendar Year by
      such Member’s Total Assets and Other Debits at such date, in each case computed
      in accordance with the Uniform System of Accounts prescribed by REA, or if
      such
      Member is not required to prepare its financial statements in accordance with
      the Uniform System of Accounts prescribed by REA, then in accordance with
      generally accepted accounting principles.

     

    “Event
      of Default” has the meaning specified in Section
      9.01.

     

    “Foreign
      Currency” means a currency issued by the government of any country
      other than the United States of America.

     

    “Global
      Bond” means a Bond evidencing all or part of a series of Bonds, issued
      to the Depositary for such series or its nominee in accordance with Section
      2.05, registered in the name of such Depositary or nominee and bearing the
      legend specified in Section 2.05.

     

    “Holder”
      when used with respect to any Bond means a Bondholder, and when used with
      respect to any coupon means the bearer thereof.

     

    “Indebtedness”
      of the Company means

     

    (1)           all
      indebtedness which would appear as indebtedness on a balance sheet of the
      Company prepared in accordance with generally accepted accounting principles
      (i)
      for money borrowed, (ii) which is evidenced by securities sold for money or
      (iii) which constitutes purchase money indebtedness;

     

    (2)           all
      such indebtedness guaranteed, directly or indirectly, in any manner by the
      Company, or in effect guaranteed, directly or indirectly, by the Company through
      an agreement,

     

    

    
      
        
          
          

        

        
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    contingent
      or otherwise, to purchase indebtedness, or to purchase goods, supplies or
      services primarily for the purpose of enabling the debtor to make payment of
      the
      indebtedness or of assuring the owner of the indebtedness against loss, or
      to
      supply funds to or in any other manner invest in the debtor, or
      otherwise;

     

    (3)           all
      such indebtedness of others for the payment or purchase of which the Company
      has
      agreed, contingently or otherwise, to advance or supply funds;

     

    (4)           all
      indebtedness secured by any mortgage, lien, pledge, charge or encumbrance upon
      property owned by the Company, even though the Company has not assumed or become
      liable for the payment of such indebtedness; and

     

    (5)           all
      indebtedness of the Company created or arising under any conditional sale or
      other title retention agreement (including any lease in the nature of a title
      retention agreement) with respect to property acquired by the Company (even
      though the rights and remedies of the seller or lender under such agreement
      in
      the event of default are limited to repossession of such property), but only
      to
      the extent that such property is included as an asset on the balance sheet
      of
      the Company;

     

    provided
      that, in computing the amount of the “Indebtedness” of the Company, there shall
      be excluded any particular indebtedness if, upon or prior to the maturity
      thereof, there shall have been deposited with the proper depository in trust
      money (or such indebtedness) in the necessary amount to pay, redeem or satisfy
      such indebtedness, and thereafter such money and indebtedness so deposited
      shall
      not be included in any computation of the assets of the Company; and,
provided, further, that no provision of this definition shall
      be construed to include as “Indebtedness” of the Company any indebtedness by
      virtue of any agreement by the Company to advance or supply funds to
      Members.

    

    “Indenture”
      means this Indenture, as originally executed and as it may from time to time
      be
      supplemented, restated or amended by one or more indentures supplemental hereto
      entered into pursuant to the applicable provisions hereof.

     

    “Independent”
      when used with respect to any specified Person means such a Person who (1)
      is in
      fact independent, (2) does not have any direct financial interest or any
      material indirect financial interest in the Company or in any other obligor
      upon
      the Bonds or in any obligor upon any Mortgage Note or in any Affiliate of the
      Company or of any such obligor upon the Bonds or any Mortgage Note, and (3)
      is
      not connected with the Company or any such obligor upon the Bonds or any
      Mortgage Note or any Affiliate of the Company or of any such obligor, as an
      officer, employee, promoter, underwriter, trustee, partner, director or Person
      performing similar functions (but in the case of an Accountant may be the
      accountant who regularly audits the books of the Company or a
      Member).  Whenever it is herein provided that any Independent Person’s
      opinion or certificate shall be furnished to the Trustee, such Person shall
      be
      approved by the Trustee in the exercise of reasonable care, and such opinion
      or
      certificate shall state that the signer has read this definition and that the
      signer is Independent within the meaning hereof.

     

    “Interest
      Payment Date” when used with respect to any Bond means the Stated
      Maturity of an installment of interest on such Bond.

     

    “Lien
      of this Indenture” or “lien hereof” means the lien
      created by these presents.

     

    

    
      
        
          
          

        

        
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    “Loan
      Agreement” means a loan agreement (if any) between a Member and the
      Company (or between a Member and a wholly-owned subsidiary of the Company whose
      interest has been assigned to the Company) providing for the issuance of
      Mortgage Notes.

     

    “Maturity”
      when used with respect to any Bond means the date on which the principal of
      such
      Bond becomes due and payable, whether at the Stated Maturity or by declaration
      of acceleration, call for redemption or otherwise.

     

    “Member”
      means any Person which is a member or patron of the Company.

     

    “Mortgage”
      means a mortgage or deed of trust or pledges of revenues securing one or more
      Mortgage Notes (i) which complies with the requirements set forth in Schedule
      I
      hereto annexed and made a part hereof, (ii) which was made to the Company (or
      to
      a wholly-owned subsidiary of the Company whose interest has been assigned to
      the
      Company) or to a trustee or trustees under a trust indenture, (iii) as to which
      the interest of the Company (if any) has been assigned to the Trustee and (iv)
      an executed or true copy of which has been delivered to the
      Trustee.

     

    “Mortgage
      Note” means a note or bond of a Member payable or registered to the
      Company or to the order of the Company (or a wholly-owned subsidiary of the
      Company whose interest has been assigned to the Company) and delivered and
      assigned to and pledged with the Trustee.

     

    “Officers’
      Certificate” means a certificate signed by the Governor, the Chief
      Executive Officer, the Chairman of the Board, the Vice Chairman of the Board,
      the President, the Finance Officer or a Vice President, and by the Treasurer,
      the Secretary, or one of the Assistant Treasurers or Assistant Secretaries,
      of
      the Company, and delivered to the Trustee.

     

    “Opinion
      of Counsel” means a written opinion of counsel, who may (except as
      otherwise expressly provided in this Indenture) be counsel for the Company
      or
      for a Member, or other counsel acceptable to the Trustee.

     

    “Outstanding”
      when used with respect to Bonds means, as of the date of determination, all
      Bonds theretofore authenticated and delivered under this Indenture,
      except:

     

    (i)           Bonds
      theretofore cancelled by the Trustee or delivered to the Trustee for
      cancellation;

     

    (ii)           Bonds
      for whose payment or redemption moneys or certain obligations of the United
      States of America in the necessary amount have been theretofore deposited with
      the Trustee or any Paying Agent (other than the Company) in trust hereunder
      or
      set aside and segregated in trust by the Company (if the Company shall act
      as
      its own Paying Agent) hereunder for the Holders of such Bonds and any coupons
      appertaining thereto as provided in Section 14.01 or 14.02,
provided that, if such Bonds are to be redeemed (otherwise
      than
      pursuant to sinking fund provisions requiring notice of redemption to be given
      by the Trustee), notice of such redemption has been duly given pursuant to
      this
      Indenture or provision therefor satisfactory to the Trustee has been made;
      and

     

    (iii)           Bonds
      paid or in exchange for or in lieu of which other Bonds have been authenticated
      and delivered pursuant to this Indenture, unless such Bonds are held by a Person
      in whose hands they constitute a valid obligation of the Company;

     

    provided,
      however, that in determining whether the Holders of the requisite
      principal amount of Bonds Outstanding have given any request, demand,
      authorization, direction, notice, consent or waiver hereunder,

    

    
      
        
          
          

        

        
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    (1)
      Bonds to be redeemed pursuant to sinking fund provisions shall be deemed to
      be
      Outstanding until the selection of Bonds to be redeemed, and (2) Bonds owned
      by
      the Company or any other obligor upon the Bonds or any Affiliate of the Company
      or such other obligor shall be disregarded and deemed not to be Outstanding,
      except that in determining whether the Trustee shall be protected in relying
      upon any such request, demand, authorization, direction, notice, consent or
      waiver, only Bonds which the Trustee knows to be so owned shall be so
      disregarded.  Bonds so owned which have been pledged in good faith
      shall be regarded as Outstanding if the pledgee establishes to the satisfaction
      of the Trustee the pledgee’s right so to act with respect to such Bonds and that
      the pledgee is not the Company or any other obligor upon the Bonds or any
      Affiliate of the Company or such other obligor.

    

    “Paying
      Agent” when used with respect to any Bond means any Person authorized
      by the Company to pay the principal of (and premium, if any) or interest on
      such
      Bond or any coupons appertaining thereto on behalf of the Company.

     

    “Permitted
      Investments” has the meaning specified in Section
      5.03.

     

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

     

    “Place
      of Payment” when used with respect to any Bond means the Borough of
      Manhattan, City and State of New York or any other place or places where such
      Bond may be paid.

     

    “Pledged
      Property” has the meaning set forth in the Granting
      Clauses.

     

    “Predecessor
      Bonds” of any particular Bond means every previous Bond which evidenced
      all or a portion of the same debt as that evidenced by such particular
      Bond.

     

    “REA”
      means the Rural Electrification Administration of the Department of Agriculture
      of the United States of America or if at any time after the execution of the
      Indenture said Administration is not existing and performing the duties now
      assigned to it, then the body performing such duties at such time.

     

    “Redemption
      Date” when used with respect to any Bond means the date fixed for
      redemption of such Bond.

     

    “Redemption
      Price” when used with respect to any Bond means the price (exclusive of
      accrued interest) at which it is to be redeemed.

     

    “Registered
      Bond” means any Bond registered in the Bond Register.

     

    “Registered
      Holder” when used with respect to any Registered Bond means the Person
      in whose name such Bond is registered in the Bond Register.

     

    “Regular
      Record Date” for the interest payable on any Interest Payment Date when
      used with respect to any Bond means the date fixed for the determination of
      the
      Holder of such Bond entitled to payment of such interest on such Interest
      Payment Date.

     

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

     

    “Restricted
      Rentals” means all rentals required to be paid under finance leases and
      charged to income, exclusive of any amounts paid under any such lease (whether
      or not designated therein as rental or

     

    

    
      
        
          
          

        

        
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    additional
      rental) for maintenance or repairs, insurance, taxes, assessments, water rates
      or similar charges.  For the purpose of this definition the term
“finance lease” shall mean any lease having a rental term (including the term
      for which such lease may be renewed or extended at the option of the lessee)
      in
      excess of 3 years and covering property having an initial cost in excess of
      $250,000 other than automobiles, trucks, trailers, tractors, other vehicles
      (including without limitation aircraft and ships), office, garage and warehouse
      space and office equipment (including without limitation
      computers).

     

    “Special
      Record Date” for the payment of any Defaulted Interest when used with
      respect to any Bond means a date fixed by the Trustee pursuant to
Section 2.09 in respect of such Bond.

     

    “Stated
      Maturity” when used with respect to any Bond or any installment of
      interest thereon, including payment of a coupon appertaining thereto, means
      the
      date specified in such Bond or in such coupon as the fixed date on which the
      principal of such Bond or such installment of interest on such Bond or such
      coupon is due and payable.

     

    “Stock”
      or “Capital Stock” shall include any and all shares, interests,
      participations or other equivalents (however designated) of corporate stock,
      and, for such purpose, the interest of patrons or members of Members in the
      Company shall be deemed to be “stock”.

     

    “Superior
      Indebtedness” of the Company means all Indebtedness of the Company
      other than Capital Term Certificates.

     

    “Trust
      Indenture Act” or “TIA” means the Trust Indenture Act
      of 1939 as in force at the date as of which this instrument was
      executed.

     

    “Trustee”
      means the Person named as the “Trustee” in the first paragraph of this
      instrument until a successor Trustee shall have become such pursuant to the
      applicable provisions of this Indenture, and thereafter “Trustee” shall mean
      such successor Trustee.

     

    “United
      States” means the United States of America (including the States and
      the District of Columbia), its territories, possessions and other areas subject
      to its jurisdiction.

     

    “Vice
      President” when used with respect to the Company means any vice
      president, whether or not designated by a number or a word or words added before
      or after the title “vice president”.

     

    
      	
              SECTION
                1.02.

            	
              Compliance
                Certificates and Opinions.

            

    

     

    Upon
      any application or request by the Company to the Trustee to take any action
      under any provision of this Indenture, the Company shall furnish to the Trustee
      an Officers’ Certificate stating that all conditions precedent, if any, provided
      for in this Indenture (including any covenants compliance with which constitutes
      a condition precedent) 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, if any, have been complied with, except that in the case
      of any such application or request as to which the furnishing of such documents
      is specifically required by any provision of this Indenture relating to such
      particular application or request, no additional certificate or opinion need
      be
      furnished.

     

    Every
      certificate or opinion with respect to compliance with a condition or covenant
      provided for in this Indenture shall include

     

    (1)           a
      statement that each individual signing such certificate or opinion has read
      such
      covenant or condition and the definitions herein relating thereto;

     

    

    
      
        
          
          

        

        
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    (2)           a
      brief statement as to the nature and scope of the examination or investigation
      upon which the statements or opinions contained in such certificate or opinion
      are based;

     

    (3)           a
      statement that, in the opinion of each such individual, such individual has
      made
      such examination or investigation as is necessary to enable such individual
      to
      express an informed opinion as to whether or not such covenant or condition
      has
      been complied with; and

     

    (4)           a
      statement as to whether, in the opinion of each such individual, such condition
      or covenant has been complied with.

     

    
      	
              SECTION
                1.03.

            	
              Form
                of Documents Delivered to
                Trustee.

            

    

     

    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.

     

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

     

    Any
      Opinion of Counsel stated to be based on the opinion of other counsel shall
      be
      accompanied by a copy of such other opinion.

     

    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
                1.04.

            	
              Acts
                of Holders.

            

    

     

    (a)           Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided by this Indenture to be given or taken by Holders may be
      embodied in and evidenced by one or more instruments of substantially similar
      tenor signed by such Holders in person or by agent duly appointed in writing;
      and, except as herein otherwise expressly provided, such action shall become
      effective when such instrument or instruments are delivered to the Trustee
      and,
      where it is hereby expressly required, to the Company.  Such
      instrument or instruments (and the action embodied therein and evidenced
      thereby) are herein sometimes referred to as the “Act” of the
      Holders signing such instrument or instruments.  Proof of execution of
      any such instrument or of a writing appointing any such agent shall be
      sufficient for any purpose of this Indenture and (subject to Section
      10.01) conclusive in favor of the Trustee and the Company, if made in the
      manner provided in this Section.

     

    (b)           The
      fact and date of the execution by any Person of any such instrument or writing
      may be proved by the certificate of any notary public or other officer of any
      jurisdiction authorized to take

     

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    

    acknowledgments
      of deeds or administer oaths that the Person executing such instrument
      acknowledged to him the execution thereof, or by an affidavit of a witness
      to
      such execution sworn to before any such notary or other such officer and where
      such execution is by an officer of a corporation or association or a member
      of a
      partnership, on behalf of such corporation, association or partnership, such
      certificate or affidavit shall also constitute sufficient proof of his
      authority.  The fact and date of the execution of any such instrument
      or writing, or the authority of the Person executing the same, may also be
      proved in any other manner which the Trustee deems sufficient.

     

    (c)           The
      amount of Bearer Bonds held by any Person executing any such instrument or
      writing as a Bondholder, and the numbers of such Bearer Bonds, and the date
      of
      his holding the same, may be proved by the production of such Bonds or by a
      certificate executed, as depository, by any trust company, bank, banker or
      member of a national securities exchange (wherever situated), if such
      certificate is in form satisfactory to the Trustee, showing that at the date
      therein mentioned such Person had on deposit with such depository, or exhibited
      to it, the Bearer Bonds therein described; or such facts may be proved by the
      certificate or affidavit of the Person executing such instrument or writing
      as a
      Bondholder, if such certificate or affidavit is satisfactory to the
      Trustee.  The Trustee and the Company may assume that such ownership
      of any Bearer Bond continues until (1) another certificate bearing a later
      date
      issued in respect of the same Bearer Bond is produced, or (2) such Bearer Bond
      is produced by some other Person, or (3) such Bearer Bond is registered as
      to
      principal or is surrendered in exchange for a Registered Bond, or (4) such
      Bearer Bond is no longer Outstanding.

     

    (d)           The
      fact and date of execution of any such instrument or writing and the amount
      and
      numbers of Bearer Bonds held by the Person so executing such instrument or
      writing may also be proved in any other manner which the Trustee deems
      sufficient; and the Trustee may in any instance require further proof with
      respect to any of the matters referred to in this Section.

     

    (e)           The
      ownership of Registered Bonds shall be proved by the Bond Register.

     

    (f)           Any
      request, demand, authorization, direction, notice, consent, waiveror other
      action by the Holder of any Bond shall bind the Holder of every Bond issued
      upon
      the transfer thereof or in exchange therefor or in lieu thereof, in respect
      of
      anything done or suffered to be done by the Trustee or the Company in reliance
      thereon, whether or not notation of such action is made upon such
      Bond.

     

    (g)           If
      the Company shall solicit from the Holders any request, demand, authorization,
      direction, notice, consent, waiver or other Act, the Company may, at its option,
      by or pursuant to a Board Resolution, fix a record date (which shall be not
      more
      than 60 nor less than five days prior to the date upon which such solicitation
      commences) for the determination of Holders 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 such record date, but only the Holders
      of record at the close of business on such record date shall be deemed to be
      Holders for the purposes of determining whether Holders of the requisite
      proportion of Outstanding Bonds have authorized or agreed or consented to such
      request, demand, authorization, direction, notice, consent, waiver or other
      Act,
      and for that purpose the Outstanding Bonds shall be computed as of such record
      date; provided that no such authorization, agreement or consent by the Holders
      on such record date shall be deemed effective unless it shall become effective
      pursuant to the provisions of this Indenture not later than six months after
      the
      record date.

     

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    

    
      	
              SECTION
                1.05.

            	
              Notices,
                etc., to Trustee and Company

            

    

     

    Any
      request, demand, authorization, direction, notice, consent, waiver or Act of
      Holders or other document provided or permitted by this Indenture to be made
      upon, given or furnished to, or filed with,

     

    (1)           the
      Trustee by any Holder or by the Company shall be sufficient for every purpose
      hereunder if made, given, furnished or filed in writing to or with the Trustee
      at its Corporate Trust Office, or

     

    (2)           the
      Company by the Trustee or by any Holder shall be sufficient for every purpose
      hereunder if in writing and mailed, first-class postage prepaid, to the Company
      addressed to it at the address of its principal office specified in the first
      paragraph of this instrument or at any other address previously furnished in
      writing to the Trustee by the Company for such purpose.

     

    
      	
              SECTION
                1.06.

            	
              Notices
                to Holders; Waiver.

            

    

     

    Where
      this Indenture provides for notice to Holders of any event,

     

    (1)           such
      notice shall be sufficiently given to Holders of Registered Bonds(unless
      otherwise herein expressly provided) if in writing and mailed, first-class
      postage prepaid, to each such Registered Holder, at his address as it appears
      in
      the Bond Register, not later than the latest date, and not earlier than the
      earliest date, prescribed for the giving of such notice.

     

    (2)           such
      notice shall be sufficiently given to the Holders of Bearer Bonds of any series
      if published in an Authorized Newspaper in each Place of Payment for such Bonds
      (hereinafter referred to as “Notice by
      Publication”).

     

    Where
      this Indenture provides for notice in any manner, such notice may be waived
      in
      writing by the Person entitled to receive such notice, either before or after
      the event, and such waiver shall be the equivalent of such
      notice.  Waivers of notice by Holders shall be filed with the Trustee,
      but such filing shall not be a condition precedent to the validity of any action
      taken in reliance upon such waiver.  In any case where notice to
      Holders is given by mail, neither the failure to mail such notice, nor any
      defect in any notice so mailed, to any particular Registered Holder shall affect
      the sufficiency of such notice with respect to other Registered Holders or
      the
      sufficiency of any Notice by Publication to Holders of Bearer Bonds, and any
      notice which is mailed in the manner herein provided shall be conclusively
      presumed to have been duly given.

     

    In
      case, by reason of suspension of publication or any other cause, it shall be
      impossible to publish a notice in any Authorized Newspaper or Authorized
      Newspapers as provided in any provision of this Indenture, then (notwithstanding
      such provision) such other publication or notification as shall be made with
      the
      approval of the Trustee shall constitute sufficient publication of such
      notice.  Neither failure to give Notice by Publication to Holders of
      Bearer Bonds as provided above, nor any defect in any notice so published,
      shall
      affect the sufficiency of any notice mailed to Holders of Registered Bonds
      as
      provided above, or of any effective Notice by Publication given to other Holders
      of Bearer Bonds.

     

    
      	
              SECTION
                1.07.

            	
              Language
                of Notices, etc.

            

    

     

    Except
      as otherwise expressly provided herein, any request, demand, authorization,
      direction, notice, consent, election or waiver required or permitted under
      this
      Indenture shall be in the English language, except that any published notice
      may
      be in an official language of the country of publication.

     

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
                1.08.

            	Conflict with Trust Indenture Act.

    

     

     

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

     

    
      	
              SECTION
                1.09.

            	
              Effect
                of Heading and Table of
                Contents.

            

    

     

    The
      Article and Section headings herein and the Table of Contents are for
      convenience only and shall not affect the construction hereof.

     

    
      	
              SECTION
                1.10.

            	
              Successors
                and Assigns.

            

    

     

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

     

    
      	
              SECTION
                1.11.

            	
              Separability
                Clause.

            

    

     

    In
      case any provision in this Indenture or in the Bonds or coupons shall be
      invalid, illegal or unenforceable, the validity, legality and enforceability
      of
      the remaining provisions shall not in any way be affected or impaired
      thereby.

     

    
      	
              SECTION
                1.12.

            	
              Benefits
                of Indenture.

            

    

     

    Nothing
      in this Indenture or in the Bonds or coupons, express or implied, shall give
      to
      any Person, other than the parties hereto and their successors hereunder, and
      the Holders of Bonds and coupons, any benefit or any legal or equitable right,
      remedy or claim under this Indenture.

     

    
      	
              SECTION
                1.13.

            	
              Governing
                Law.

            

    

     

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

     

    
      	
              SECTION
                1.14.

            	
              Legal
                Holidays.

            

    

     

    In
      any case where any Interest Payment Date or Redemption Date or the Stated
      Maturity of any Bond shall not be a Business Day at any Place of Payment, then
      (notwithstanding any other provision of this Indenture or of the Bonds or
      coupons) payment of interest or principal (and premium, if any) need not be
      made
      on such date at such Place of Payment, but may be made on the next succeeding
      Business Day at such Place of Payment with the same force and effect as if
      made
      on the Interest Payment Date or Redemption Date or at the Stated Maturity,
      and
      no interest shall accrue on such payment for the period from and after such
      Interest Payment Date, Redemption Date or Stated Maturity, as the case may
      be.

     

    ARTICLE
      TWO

    THE
      BONDS

     

    
      	
              SECTION
                2.01.

            	
              General
                Limitations.

            

    

     

    The
      aggregate principal amount of Bonds which may be authenticated and delivered
      and
      Outstanding under this Indenture is not limited, except as provided in Article
      Three.

     

    

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
                2.02.

            	Issuable in Series

    

     

    The
      Bonds may be issued from time to time in such series as shall be established
      pursuant to Section 2.03.

     

    The
      Bonds of all series shall be entitled generally “Collateral Trust
      Bonds” of the Company.  With respect to the Bonds of any
      particular series, such words, letters or figures descriptive thereof may be
      incorporated in or added to the general title of such Bonds as may be
      established therefor pursuant to indentures supplemental hereto or as provided
      in Sections 2.03 or 2.04.

     

    
      	
              SECTION
                2.03.

            	
              Terms
                of Particular Series.

            

    

     

    Prior
      to the authentication and delivery of Bonds of any series, the Company shall
      establish, in or pursuant to a Board Resolution or an indenture supplemental
      hereto, or in an Officers’ Certificate pursuant to a Board Resolution or an
      indenture supplemental hereto, the following terms of the Bonds of any such
      series:

     

    (1)           the
      title of the Bonds of such series (which shall distinguish the Bonds of such
      series from Bonds of any other series);

     

    (2)           any
      limit upon the aggregate principal amount of the Bonds of such series which
      may
      be authenticated and delivered under this Indenture (except for Bonds
      authenticated and delivered pursuant to Sections 2.06, 2.07,
2.08, 8.08 or 13.06);

     

    (3)           the
      Persons (without specific identification) to whom interest on Bonds of such
      series, or any tranche thereof, shall be payable on any Interest Payment Date,
      if other than the Persons in whose names such Bonds are registered at the close
      of business on the Regular Record Date for such interest;

     

    (4)           the
      date or dates on which the principal of the Bonds of such series, or any tranche
      thereof, is payable or any formula or other method or other means by which
      such
      date or dates shall be determined, by reference or otherwise (without regard
      to
      any provisions for redemption, prepayment, acceleration, purchase or
      extension);

     

    (5)           the
      rate or rates at which the Bonds of such series, or any tranche thereof, shall
      bear interest, if any (including the rate or rates at which overdue principal
      shall bear interest, if different from the rate or rates at which such Bonds
      shall bear interest prior to Maturity, and, if applicable, the rate or rates
      at
      which overdue premium or interest shall bear interest, if any), or any formula
      or any other method or other means by which such rate or rates shall be
      determined, by reference or otherwise; the date or dates from which such
      interest shall accrue, the Interest Payment Dates on which such interest shall
      be payable and the Regular Record Date, if any, for the interest payable on
      such
      Bonds on any Interest Payment Date; and the basis of computation of
      interest;

     

    (6)           the
      place or places at which (i) the principal of, and premium, if any, and
      interest, if any, on Bonds of such series, or any tranche thereof, shall be
      payable, (ii) registration of transfer of Bonds of such series, or any tranche
      thereof, may be effected, (iii) exchanges of Bonds of such series, or any
      tranche thereof, may be effected and (iv) notices and demands to or upon the
      Company in respect of the Bonds of such series, or any tranche thereof, and
      this
      Indenture may be served; the Bond Registrar for such series; and if such is
      the
      case, that the principal of such Bonds shall be payable without the presentment
      or surrender thereof;

     

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    

    (7)           the
      period or periods within which or the date or dates on which, the price or
      prices at which and the terms and conditions upon which the Bonds of such
      series, or any tranche thereof, may be redeemed, in whole or in part, at the
      option of the Company, pursuant to any sinking fund or otherwise;

     

    (8)           the
      obligation or obligations, if any, of the Company to redeem or purchase the
      Bonds of such series, or any tranche thereof, pursuant to any sinking fund
      or
      other mandatory redemption provisions or at the option of a Holder thereof,
      and
      the period or the periods within which or the date or dates on which, the price
      or prices at which and the terms and conditions upon which such Bonds shall
      be
      redeemed or purchased, in whole or in part, pursuant to such
      obligation;

     

    (9)           the
      denominations in which Bonds of such series, or any tranche thereof, shall
      be
      issuable if other than denominations of $1,000 and any integral multiple
      thereof;

     

    (10)           the
      coin or currency, including composite currencies, in which payment of the
      principal of and premium, if any, and interest, if any, on the Bonds of such
      series, or any tranche thereof, shall be payable (if other than the coin or
      currency in which the Bonds of such series, or any tranche thereof, are
      denominated);

     

    (11)           if
      the principal of or premium, if any, or interest, if any, on the Bonds of such
      series, or any tranche thereof, are to be payable, at the election of the
      Company or a Holder thereof, in a coin or currency other than that in which
      the
      Bonds of such series, or any tranche thereof, are denominated, the period or
      periods within which, and the terms and conditions upon which, such election
      may
      be made;

     

    (12)           if
      denominated or payable in any coin or currency, including composite currencies,
      other than U.S. dollars, the method by which the Bonds of such series, or any
      tranche thereof, shall be valued, which may be any reasonable method, against
      the Bonds of all other series for voting, distribution and all other purposes
      hereof;

     

    (13)           if
      the principal of or premium, if any, or interest, if any, on the Bonds of such
      series, or any tranche thereof, are to be payable, at the election of the
      Company or a Holder thereof, in securities or other property, the type and
      amount of such securities or other property, or the formulary or other method
      or
      other means by which such amount shall be determined, and the periods within
      which, and the terms and conditions upon which, any such election may be
      made;

     

    (14)           if
      the amount payable in respect of principal of or premium, if any, or interest,
      if any, on the Bonds of such series or any tranche thereof, may be determined
      with reference to an index or other fact or event ascertainable outside of
      this
      Indenture, the manner in which such amounts shall be determined;

     

    (15)           if
      other than the principal amount thereof, the portion of the principal amount
      of
      Bonds of such series, or any tranche thereof, which shall be payable upon
      declaration of the acceleration of the maturity thereof pursuant to Section
      9.02;

     

    (16)           the
      terms, if any, pursuant to which the Bonds of such series, or any tranche
      thereof, may be converted into or exchanged for other securities of the Company
      or any other Person;

     

    (17)           if
      the Bonds of such series or any tranche thereof, are to be issued in global
      form, (i) the Depositary with respect to such Global Bond or Bonds, (ii) any
      limitations on the rights of the

     

    

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    

    Holder
      or Holders of such Global Bond or Bonds to transfer or exchange the same or
      to
      obtain the registration of transfer thereof, (iii) any limitations on the rights
      of the Holder or Holders thereof to obtain certificates therefore in definitive
      form in lieu of temporary form, and (iv) any and all other matters incidental
      to
      such Global Bond or Bonds;

     

    (18)           if
      the Bonds of any such series, or any tranche thereof, are to be issuable as
      bearer securities, any and all matters incidental thereto;

     

    (19)           to
      the extent not established pursuant to clause (16) of this Section, any
      limitations on the rights of the Holder or Holders of such bonds to transfer
      or
      exchange the same or to obtain the registration of transfer thereof; and if
      a
      service charge will be made for the registration of transfer or exchange of
      the
      same, the amount or terms thereof;

     

    (20)           the
      right, if any, of the Company to limit or discharge the Indenture as to the
      Bonds of any such series or any tranche thereof pursuant to Section
      14.02;

     

    (21)           whether
      and under what circumstances the Company will pay additional amounts on the
      Bonds of such series, or any tranche thereof, held by a Person who is not a
      U.S.
      person in respect of any tax, assessment or governmental charge withheld or
      deducted and, if so, whether and on what terms the Company will have the option
      to redeem such Bonds rather than pay such additional amounts; and

     

    (22)           any
      other terms of the Bonds of such series, or any tranche thereof (which terms
      shall conform to any applicable requirements of the TIA, and shall not
      materially adversely affect the rights of the Holders of Bonds then
      outstanding).

     

    
      	
              SECTION
                2.04.

            	
              Form
                and Denominations.

            

    

     

    The
      Bonds of each series shall be either Registered Bonds or Bearer Bonds, or both,
      and such Bonds (and the related coupons, if any) shall be in such form as shall
      be established by or pursuant to a Board Resolution or the supplemental
      indenture creating such series, with such omissions, variations and insertions
      as are permitted by this Indenture, and may have such letters, numbers or other
      marks of identification and such legends or endorsements printed, lithographed
      or engraved thereon, as may be required to comply with the rules of any
      securities exchange or to conform to any usage in respect thereof, or as may,
      consistently herewith, be prescribed by the Board of Directors or by the
      officers executing such Bonds and coupons, such determination by said officers
      to be evidenced by their signing the Bonds and coupons.  The Bonds of
      each series and coupons appertaining thereto, if any, shall be distinguished
      from the Bonds and coupons of other series in such manner as may be prescribed
      in or pursuant to the Board Resolution or supplemental indenture creating or
      authorizing the creation of such series.

     

    The
      definitive Bonds and coupons shall be printed, lithographed or engraved or
      produced by any combination of these methods on steel engraved borders or may
      be
      produced in any other manner permitted by the rules of any securities exchange,
      all as determined by the officers executing such Bonds or coupons, as evidenced
      by their execution of such Bonds or coupons.

     

    The
      Bonds of each series shall be issued in such denominations as shall be provided
      in or pursuant to the Board Resolution or supplemental indenture creating or
      authorizing the creation of such series or as the Board of Directors may
      determine.  In the absence of any such provision with respect to the
      Bonds of any particular series, the Bonds of such series shall be of the
      denominations of $1,000 or multiples thereof.

     

    

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

    

    
      	
              SECTION
                2.05.

            	
              Execution,
                Authentication and Delivery and
                Dating.

            

    

     

    The
      Bonds shall be executed on behalf of the Company by its Governor, its Chief
      Executive Officer, its Chairman of the Board, its President or one of its Vice
      Presidents under its corporate seal reproduced thereon and attested by its
      Treasurer, its Secretary or one of its Assistant Treasurers or its Assistant
      Secretaries.  The signature of any of these officers on the Bonds may
      be manual or facsimile.  The coupons shall bear the facsimile
      signature of the Treasurer or an Assistant Treasurer of the
      Company.

     

    Bonds
      and coupons 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 Bonds and coupons
      or
      did not hold such offices at the date of such Bonds and coupons.

     

    At
      any time and from time to time after the execution and delivery of this
      Indenture, the Company may deliver Bonds with coupons, if any, appertaining
      thereto executed by the Company to the Trustee for authentication; and the
      Trustee shall authenticate and deliver such Bonds as in this Indenture provided
      and not otherwise.

     

    All
      Registered Bonds shall be dated the date of their authentication.  All
      Bearer Bonds of each series shall be dated as of a single date specified in
      or
      pursuant to the Board Resolution or supplemental indenture or indentures
      creating or authorizing the creation of such series of Bearer
      Bonds.

     

    No
      Bond or coupon appertaining thereto shall be entitled to any benefit under
      this
      Indenture or be valid or obligatory for any purpose, unless there appears on
      such Bond a certificate of authentication substantially in the form provided
      for
      herein executed by the Trustee by manual signature, and such certificate upon
      any Bond shall be conclusive evidence, and the only evidence, that such Bond
      has
      been duly authenticated and delivered hereunder.  Except as permitted
      by Sections 2.08 or 2.09, the Trustee shall not authenticate
      and deliver any Bearer Bond unless all appurtenant coupons for interest then
      matured and duly provided for or paid have been detached and
      cancelled.

     

    If
      the Company shall establish pursuant to Section 2.03 that the Bonds of a series
      are to be issued in the form of one or more Global Bonds, then the Company
      shall
      execute and the Trustee shall in accordance with this Section authenticate
      and
      deliver one or more Global Bonds that (i) shall represent and shall be
      denominated in an amount equal to the aggregate principal amount of all of
      the
      Bonds of such series issued and not yet canceled, (ii) shall be registered
      in
      the name of the Depositary for such Global Bond or Bonds or the nominee of
      such
      Depositary, (iii) shall be delivered by the Trustee to such Depositary or
      pursuant to such Depositary’s instructions and (iv) shall bear a legend
      substantially to the following effect (or such other legend as such Depositary
      may require): “Unless this certificate is presented by an authorized
      representative of the Depositary to the Company or its agent for registration
      of
      transfer, exchange, or payment, and any certificate issued is registered in
      the
      name of the nominee of the Depositary or in such other name as is requested
      by
      an authorized representative of the Depositary (and any payment made to the
      nominee of the Depositary or to such other entity as is requested by an
      authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER
      USE
      HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as
      the
      registered owner hereof, the nominee of the Depositary, has an interest
      herein.”

     

    Each
      Depositary designated pursuant to Section 2.03 for a Global Bond in registered
      form shall, at the time of its designation and at all times while it serves
      as
      Depositary, be a clearing agency registered under the Securities Exchange Act
      of
      1934, as amended.

     

    

    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    

    
      	
              SECTION
                2.06.

            	
              Temporary
                Bonds

            

    

     

    Pending
      the preparation of definitive Bonds of any series, the Company may execute,
      and
      upon Company Order the Trustee shall authenticate and deliver, temporary Bonds
      which are printed, lithographed, typewritten, mimeographed or otherwise
      produced, in any denomination, substantially of the tenor of the definitive
      Bonds in lieu of which they are issued, in bearer or registered form, with
      one
      or more coupons or without coupons, and with such appropriate insertions,
      omissions, substitutions and other variations as the officers executing such
      Bonds may determine, as evidenced by their execution of such Bonds.

     

    If
      temporary Bonds of any series are issued, the Company will cause definitive
      Bonds of such series to be prepared without unreasonable delay.  After
      the preparation of definitive Bonds, the temporary Bonds shall be exchangeable
      for definitive Bonds upon surrender of the temporary Bonds at the office or
      agency of the Company in any Place of Payment for Bonds of such series, without
      charge to the Holder.  Upon surrender for cancellation of any one or
      more temporary Bonds (accompanied by any unmatured coupons appertaining thereto)
      the Company shall execute and the Trustee shall authenticate and deliver in
      exchange therefor a like aggregate principal amount of definitive Bonds of
      the
      same series of authorized denominations.  Until so exchanged such
      temporary Bonds shall in all respects be entitled to the same benefits under
      this Indenture as definitive Bonds, and interest thereon, when and as payable,
      shall be paid to the bearers of temporary Bonds upon presentation thereof for
      notation of such payment thereon, unless such temporary Bonds shall be
      Registered Bonds or shall bear coupons for such interest.

     

    Anything
      in this Section 2.06 to the contrary notwithstanding, the Board
      Resolution or supplemental indenture creating a series of Bonds may establish
      or
      provide for establishing the requirements (which may vary from those set forth
      in this Section 2.06) concerning the form of temporary Bonds and
      procedures for exchanging them for definitive Bonds.

     

    
      	
              SECTION
                2.07.

            	
              Registration,
                Transfer and Exchange.

            

    

     

    The
      Company shall cause to be kept at the Corporate Trust Office of the Trustee
      a
      register (herein sometimes referred to as the “Bond Register”)
      in which, subject to such reasonable regulations as it may prescribe, the
      Company shall provide for the registration of Registered Bonds and of transfers
      of Registered Bonds.  The Trustee is hereby appointed “Bond
      Registrar” for the purpose of registering Registered Bonds and
      transfers of Registered Bonds as herein provided.

     

    Upon
      surrender for transfer of any Registered Bond of any series (except any series
      of Global Bonds to the extent set forth in this Section) at the office or agency
      of the Company in any Place of Payment for Registered Bonds of such series,
      the
      Company shall execute, and the Trustee shall authenticate and deliver, in the
      name of the designated transferee or transferees, one or more new Registered
      Bonds of the same series of any authorized denominations, of a like aggregate
      principal amount.

     

    At
      the option of the Holders, Registered Bonds may be exchanged for other
      Registered Bonds of the same series of any authorized denominations, of a like
      aggregate principal amount, upon surrender of the Registered Bonds to be
      exchanged at such office or agency.  Whenever any Registered Bonds are
      so surrendered for exchange, the Company shall execute, and the Trustee shall
      authenticate and deliver, the Registered Bonds which the Bondholder making
      the
      exchange is entitled to receive.

     

    Bearer
      Bonds and coupons appertaining thereto shall be transferable by
      delivery.

     

    

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    

    At
      the option of the Holder, Bearer Bonds of any series (except any series of
      Global Bonds to the extent set forth in this Section) may be exchanged for
      Registered Bonds of the same series of any authorized denominations, of a like
      aggregate principal amount, upon surrender of the Bearer Bonds to be exchanged
      at any office or agency of the Company maintained for such purpose with all
      unmatured coupons and all matured coupons in default appertaining
      thereto.  If the Holder of a Bearer Bond is unable to produce any such
      unmatured coupon or coupons or matured coupon or coupons in default, such
      exchange may be effected if the Bearer Bonds are accompanied by payment of
      funds
      acceptable to the Company in an amount equal to the face amount of such missing
      coupon or coupons, or the surrender of such missing coupon or coupons may be
      waived by the Company and the Trustee if there be furnished to them such
      security or indemnity as they may require to save each of them and any Paying
      Agent harmless.  If thereafter the Holder of such Bond shall surrender
      to any Paying Agent any such missing coupon in respect of which such a payment
      shall have been made, such Holder shall be entitled to receive the amount of
      such payment; provided, however, that, except as otherwise
      provided in Section 7.02 or in or pursuant to the supplemental
      indenture or Board Resolution creating the series of Bonds to which they relate,
      interest represented by coupons shall be payable only upon presentation and
      surrender of those coupons at an office or agency located outside the United
      States.  Notwithstanding the foregoing, in case a Bearer Bond of any
      series is surrendered at any such office or agency in exchange for a Registered
      Bond of the same series after the close of business at such office or agency
      on
      (i) any Regular Record Date and before the opening of business at such
      office or agency on the relevant Interest Payment Date, or (ii) any Special
      Record Date and before the opening of business at such office or agency on
      the
      related date for payment of Defaulted Interest, such Bearer Bond shall be
      surrendered without the coupon relating to such Interest Payment Date or such
      date for payment of Default Interest, as the case may be.  Whenever
      any Bearer Bonds are so surrendered for exchange, the Company shall execute,
      and
      the Trustee shall authenticate and deliver, the Bonds which the Holder making
      the exchange is entitled to receive.

     

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

     

    Every
      Registered Bond presented or surrendered for transfer or exchange shall (if
      so
      required by the Company or the Trustee) be duly endorsed, or be accompanied
      by a
      written instrument of transfer in form satisfactory to the Company and the
      Bond
      Registrar duly executed, by the Holder thereof or his attorney duly authorized
      in writing.

     

    No
      service charge shall be made for any transfer or exchange of Bonds, but the
      Company may require payment of a sum sufficient to cover any tax or other
      governmental charge that may be imposed in connection with any transfer or
      exchange of Bonds, other than exchanges pursuant to Section 2.06 or
13.06 not involving any transfer.  The Trustee may require
      payment of a sum sufficient to cover any tax or other governmental charge that
      may be imposed in connection therewith.

     

    The
      Company shall not be required (i) to issue, transfer or exchange any Bond of
      any
      series during a period beginning at the opening of business 15 days before
      the
      day of the mailing of a notice of redemption of Bonds of such series selected
      for redemption under Section 8.04 and ending at the close of business
      on the day of such mailing, or (ii) to transfer or exchange any Bond so selected
      for redemption in whole or in part, or (iii) to exchange any Bearer Bond so
      selected for redemption except that such a Bearer Bond may be exchanged for
      a
      Registered Bond of that series, provided that such Registered Bond
      shall be immediately surrendered for redemption.

     

    Registered
      Bonds may not be exchanged for Bearer Bonds.

     

    

    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

    

    Notwithstanding
      any other provisions of this Section 2.07, unless and until it is
      exchanged in whole or in part for Bonds in definitive registered form, a Global
      Bond representing all or a portion of the Bonds of a series may not be
      transferred except as a whole by the Depositary for such series to a nominee
      of
      such Depositary or by a nominee of such Depositary or by such Depositary or
      any
      such nominee to a successor Depositary for such series or a nominee of such
      successor Depositary.

     

    If
      at any time the Depositary for any Bonds of a series represented by one or
      more
      Global Bonds notifies the Company that it is unwilling or unable to continue
      as
      Depositary for such Bonds, the Company shall appoint a successor Depositary
      with
      respect to such Bonds.  If a successor Depositary for such Bonds is
      not appointed by the Company within 90 days after the Company receives such
      notice, the Company’s election pursuant to Section 2.03 that such Bonds
      be represented by one or more Global Bonds shall no longer be effective and
      the
      Company will execute, and the Trustee, upon receipt of a Company Order for
      the
      authentication and delivery of definitive Bonds of such series, will
      authenticate and deliver, Bonds of such series in definitive registered form
      without coupons, in any authorized denominations in an aggregate principal
      amount equal to the principal amount of the Global Bond or Bonds representing
      such Bonds in exchange for such Global Bond or Bonds.

     

    The
      Company may at any time and in its sole discretion determine that the Bonds
      of
      any series issued in the form of one or more Global Bonds shall no longer be
      represented by a Global Bond or Bonds.  In such event the Company will
      execute, and the Trustee, upon receipt of a Company Order for the authentication
      and delivery of the definitive Bonds of such series, will authenticate and
      deliver, Bonds of such series in definitive registered form without coupons,
      in
      any authorized denominations, in an aggregate principal amount equal to the
      principal amount of the Global Bond or Bonds representing such Bonds, in
      exchange for such Global Bond or Bonds.

     

    If
      an Event of Default shall have occurred and be continuing with respect to the
      Global Bonds of any series or under any other circumstances specified by the
      Company pursuant to Section 2.03 with respect to the Global Bonds of
      such series the Depositary for such Global Bond may surrender such Global Bond
      in exchange in whole or in part for Bonds of the same series in definitive
      registered form on such terms as are acceptable to the Company and such
      Depositary.  Thereupon, the Company shall execute, and the Trustee
      shall authenticate and deliver, without service charge,

     

    (i)
      to the Person specified by such Depositary a new Bond or Bonds of the same
      series, of any authorized denominations as requested by such Person, in an
      aggregate principal amount equal to and in exchange for such Person’s beneficial
      interest in the Global Bond; and

     

    (ii)
      to such Depositary a new Global Bond in a denomination equal to the difference,
      if any, between the principal amount of the surrendered Global Bond and the
      aggregate principal amount of Bonds authenticated and delivered pursuant to
      clause (i) above.

     

    
      	
              SECTION
                2.08.

            	
              Mutilated,
                Destroyed, Lost and Stolen
                Bonds.

            

    

     

    If
      (i) any mutilated Bond or a Bond with a mutilated coupon appertaining to it
      is
      surrendered to the Trustee, or the Company and the Trustee receive evidence
      to
      their satisfaction of the destruction, loss or theft of any Bond or coupon,
      and
      (ii) there is delivered to the Company and the Trustee such security or
      indemnity as may be required by them to save each of them harmless, then, in
      the
      absence of notice to the Company or the Trustee that such Bond or coupon has
      been acquired by a bona fide purchaser, the Company shall execute and upon
      its
      request the Trustee shall authenticate and deliver, in exchange therefor or
      in
      lieu thereof or in exchange for the Bond to which a destroyed, lost or stolen
      coupon appertains (with all appurtenant coupons not destroyed, lost or stolen),
      a new Bond of like tenor and principal amount, bearing

     

    

    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    

    a
      number not contemporaneously outstanding, with coupons corresponding to the
      coupons, if any, appertaining to the surrendered, destroyed, lost or stolen
      Bond
      or to the Bond to which such mutilated, destroyed, lost or stolen coupon
      appertains.

     

    In
      case any such mutilated, destroyed, lost or stolen Bond or coupon has become
      or
      is about to become due and payable, the Company in its discretion may, instead
      of issuing a new Bond or coupon, pay such Bond or coupon.

     

    Upon
      the issuance of any new Bond under this Section, 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.

     

    Every
      new Bond with its coupons, if any, issued pursuant to this Section in lieu
      of
      any destroyed, lost or stolen Bond or in exchange for a Bond to which a
      destroyed, lost or stolen coupon appertains, shall constitute an original
      additional contractual obligation of the Company, whether or not the destroyed,
      lost or stolen Bond with its coupons, if any, or the destroyed, lost or stolen
      coupon, shall be at any time enforceable by anyone, and shall be entitled to
      all
      the benefits of this Indenture equally and proportionately with any and all
      other Bonds and coupons duly issued hereunder.

     

    Except
      as otherwise provided in or pursuant to a supplemental indenture or Board
      Resolution creating a series of Bonds, any Bearer Bond issued under this Section
      may only be delivered to the Person entitled thereto outside the United
      States.

     

    The
      provisions of this Section are exclusive and shall preclude (to the extent
      lawful) all other rights and remedies with respect to the replacement or payment
      of mutilated, destroyed, lost or stolen Bonds or coupons.

     

    
      	
              SECTION
                2.09.

            	
              Payment
                of Interest; Interest Rights
                Preserved.

            

    

     

    Interest
      on any Registered Bond of any series which is payable, and is punctually paid
      or
      duly provided for, on any Interest Payment Date for Registered Bonds of such
      series shall be paid to the Person in whose name that Bond (or one or more
      Predecessor Bonds) is registered at the close of business on the Regular Record
      Date for such interest in respect of Registered Bonds of such
      series.  In case a Bearer Bond of any series is surrendered in
      exchange for a Registered Bond of such series after the close of business (at
      an
      office or agency maintained by the Company for such purpose for such series)
      on
      any Regular Record Date and before the opening of business (at such office
      or
      agency) on the next succeeding Interest Payment Date, such Bearer Bond shall
      be
      surrendered without the coupon relating to such Interest Payment Date and
      interest will not be payable on such Interest Payment Date in respect of the
      Registered Bond issued in exchange for such Bearer Bond, but will be payable
      only to the Holder of such coupon when due in accordance with the provisions
      of
      this Indenture.

     

    Any
      interest on any Registered Bond which is payable, but is not punctually paid
      or
      duly provided for, on any Interest Payment Date for Bonds of such series (herein
      called “Defaulted Interest”) shall forthwith cease to be
      payable to the Holder on the relevant Regular Record Date by virtue of having
      been such Holder; and such Defaulted Interest may be paid by the Company, at
      its
      election in each case, as provided in paragraph (1) or
paragraph (2) below:

     

    (1)
      The Company may elect to make payment of any Defaulted Interest to the Persons
      in whose names the Registered Bonds of the series in respect of which interest
      is in default (or their respective Predecessor Bonds) are registered at the
      close of business on a Special Record Date for

     

    

    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    

    the
      payment of such Defaulted Interest, which shall be fixed in the following
      manner.  The Company shall notify the Trustee in writing of the amount
      of Defaulted Interest proposed to be paid on each Registered Bond and the date
      of the proposed payment, and at the same time the Company shall deposit with
      the
      Trustee an amount of money equal to the aggregate amount proposed to be paid
      in
      respect of such Defaulted Interest or shall make arrangements satisfactory
      to
      the Trustee for such deposit prior to the date of the proposed payment, such
      money when deposited to be held in trust for the benefit of the Persons entitled
      to such Defaulted Interest as in this paragraph provided.  Thereupon
      the Trustee shall fix a Special Record Date for the payment of such Defaulted
      Interest which shall be not more than 15 nor less than 10 days prior to the
      date
      of the proposed payment and not less than 10 days after the receipt by the
      Trustee of the notice of the proposed payment.  The Trustee shall
      promptly notify the Company of such Special Record Date and, in the name and
      at
      the expense of the Company, shall cause notice of the proposed payment of such
      Defaulted Interest and the Special Record Date therefor to be mailed, first
      class postage prepaid, to each holder of a Registered Bond of such series at
      his
      address as it appears in the Bond Register, not less than 10 days prior to
      such
      Special Record Date.  The Trustee may, in its discretion, in the name
      and at the expense of the Company, cause a similar notice to be published at
      least once in an Authorized Newspaper in each Place of Payment for Registered
      Bonds of such series, but such publication shall not be a condition precedent
      to
      the establishment of such Special Record Date.  Notice of the proposed
      payment of such Defaulted Interest and the Special Record Date therefor having
      been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
      in whose names the Registered Bonds of such series (or their respective
      Predecessor Bonds) are registered on such Special Record Date and shall no
      longer be payable pursuant to the following paragraph
      (2).  In case a Bearer Bond of any series is surrendered at the
      office or agency in a Place of Payment for such series in exchange for a
      Registered Bond of such series after the close of business at such office or
      agency on any Special Record Date and before the opening of business at such
      office or agency on the related proposed date for payment of Defaulted Interest,
      such Bearer Bond shall be surrendered without the coupon relating to such
      proposed date of payment and Defaulted Interest will not be payable on such
      proposed date of payment in respect of the Registered Bond issued in exchange
      for such Bearer Bond, but will be payable only to the Holder of such coupon
      when
      due in accordance with the provision of this Indenture.

     

    (2)
      The Company may make payment of any Defaulted Interest in any other lawful
      manner not inconsistent with the requirements of any securities exchange on
      which the Bonds of the series in respect of which interest is in default may
      be
      listed, and upon such notice as may be required by such exchange, if, after
      notice given by the Company to the Trustee of the proposed payment pursuant
      to
      this paragraph, such payment shall be deemed practicable by the
      Trustee.

     

    Any
      Defaulted Interest payable in respect of any Bearer Bond shall be payable
      pursuant to such procedures as may be satisfactory to the Trustee in such manner
      as may reasonably minimize any discrimination as between the Holders of
      Registered Bonds and Bearer Bonds of the same series, and notice of the payment
      date therefor shall be given by the Trustee, in the name and at the expense
      of
      the Company, in the manner set forth in Section 1.06.

     

    Subject
      to the foregoing provisions of this Section, each Bond delivered under this
      Indenture upon transfer of or in exchange for or in lieu of any other Bond
      shall
      carry the rights to interest accrued and unpaid, and to accrue, which were
      carried by such other Bond.

     

    

    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
                2.10.

            	
              Persons
                Deemed Owners.

            

    

     

    Prior
      to due presentment of a Registered Bond for transfer, the Company, the Trustee
      and any agent of the Company or the Trustee may treat the Person in whose name
      any Registered Bond is registered as the owner of such Registered Bond for
      the
      purpose of receiving payment of principal of (and premium, if any), and (subject
      to Section 2.09) interest on, such Bond and for all other purposes
      whatsoever, whether or not such Bond be overdue, and neither the Company, the
      Trustee nor any agent of the Company or the Trustee shall be affected by notice
      to the contrary.

     

    The
      Company, the Trustee and any agent of the Company or the Trustee may treat
      the
      bearer of any Bearer Bond and the bearer of any coupon as the absolute owner
      of
      such Bond or coupon for the purpose of receiving payment thereof or on account
      thereof and for all other purposes, whether or not such Bond or coupon be
      overdue, and neither the Company, the Trustee, nor any such agent shall be
      affected by notice to the contrary.

     

    No
      holder of any beneficial interest in any Global Bond held on its behalf by
      a
      Depositary shall have any rights under this Indenture with respect to such
      Global Bond, and such Depositary may be treated by the Company, the Trustee,
      and
      any agent of the Company or the Trustee as the owner of such Global Bond for
      all
      purposes whatsoever.  Notwithstanding the foregoing, nothing herein
      shall impair, as between a Depositary and such holders of beneficial interests,
      the operation of customary practices governing the exercise of the rights of
      the
      Depositary as Holder of any Bond.

     

    
      	
              SECTION
                2.11.

            	
              Cancellation.

            

    

     

    All
      Bonds and coupons surrendered for payment, redemption, transfer or exchange
      shall, if surrendered to any Person other than the Trustee, be delivered to
      the
      Trustee for cancellation.  The Company may at any time deliver to the
      Trustee for cancellation any Bonds previously authenticated and delivered
      hereunder, together with all unpaid coupons appertaining thereto which the
      Company may have acquired in any manner whatsoever, and all Bonds so delivered
      shall be promptly cancelled by the Trustee.  No Bonds shall be
      authenticated in lieu of or in exchange for any Bonds cancelled as provided
      in
      this Section, except as expressly permitted by this Indenture.  All
      cancelled Bonds and coupons held by the Trustee shall be destroyed or disposed
      of in accordance with the Trustee’s customary practices.

     

    ARTICLE
      THREE

    AUTHENTICATION
      AND DELIVERY OF BONDS

     

    
      	
              SECTION
                3.01.

            	
              Authentication
                and Delivery of Bonds on Basis of Eligible
                Collateral.

            

    

     

    (a)
      At any time and from time to time Bonds of any series authorized by or pursuant
      to Board Resolution or an indenture supplemental hereto and coupons appertaining
      thereto may be executed by the Company and delivered to the Trustee for
      authentication, and shall thereupon be authenticated and delivered by the
      Trustee as directed by Company Order and upon delivery of the instruments
      specified in Subsection (b) of this Section; provided,
however, that, as shown by the Certificate of Available
      Eligible
      Collateral furnished to the Trustee pursuant to Subsection (b)(2) of
      this Section,

     

    (1)
      the Allowable Amount of Eligible Collateral certified in such Certificate as
      being pledged under the Indenture after all withdrawals shall at least equal
      the
      aggregate principal amount of Bonds to be Outstanding immediately after the
      authentication and delivery of such Bonds,

     

    

    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    

    (2)
      each Eligible Mortgage Note included in the Eligible Collateral so certified
      is
      an Eligible Mortgage Note of a Member having an Equity Ratio of at least 20%
      and
      an Average Coverage Ratio of at least 1.35, and

     

    (3)
      the aggregate Allowable Amount of all Eligible Mortgage Notes of any one Member
      so certified shall not exceed 10% of the aggregate Allowable Amount of all
      Eligible Collateral so certified.

     

    (b)
      Prior to the authentication and delivery of any Bonds of any series pursuant
      to
      this Section the Trustee shall be furnished with the following
      instruments:

     

    (1)
      A Board Resolution requesting or authorizing the authentication and delivery
      of
      a specified aggregate principal amount of Bonds of the series.

     

    (2)
      A Certificate of Available Eligible Collateral, dated not more than 30 days
      prior to such authentication and delivery, which shall be an Officers’
Certificate and, unless one of the officers signing the same is an Accountant
      and shall so state, shall also be signed by an Accountant in respect of items
      1
      through 16 thereof, in substantially the following form:

     

    

    
      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

    

    

    NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

    

    INDENTURE
      DATED AS OF , 199

    

    

    

    CERTIFICATE
      OF AVAILABLE ELIGIBLE COLLATERAL FILED WITH FIRST BANK NATIONAL ASSOCIATION,
      Trustee

    

    

    ______________,
      Governor (or Chief Executive Officer or Chairman of the Board or Vice Chairman
      of the Board or President or Finance Officer or Vice President) and ,
      [Assistant] Treasurer (or , [Assistant] Secretary), respectively, of National
      Rural Utilities Cooperative Finance Corporation, of whom the latter [former]
      is
      an Accountant [and , an [Independent] Accountant selected by the Company],
      hereby certify to the Trustee under the above-mentioned Indenture [as
      supplemented to the date hereof] (herein called the “Indenture”) as
      follows:

     

    
      	
              1.

            	
              The
                Allowable Amount of Eligible Collateral
                shown

            

    

    
      	
               

            	
              in
                item 8 in the most recent Certificate of
                Available

            

    

    
      	
               

            	
              Eligible
                Collateral dated _____________ delivered to
                the

            

    

    
      	
               

            	Trustee
              is.........................................................................................................	
              $

            

    

     

    
      	
              2.

            	
              The
                increase (or decrease) in the Allowable Amount
                of

            

    

    
      	
               

            	
              such
                Eligible Collateral and the Allowable Amount of
                any

            

    

    
      	
               

            	
              Mortgage
                Notes (which are Eligible Mortgage Notes at
                the

            

    

    
      	
               

            	
              date
                hereof) substituted for other Mortgage Notes
                pursuant

            

    

    
      	
               

            	
              to
                Section 4.05 of the Indenture, remaining on deposit
                with

            

    

    
      	
               

            	the Trustee, as shown on Schedule A herto,
              is..................................................	
              $

            

    

     

    
      	
              3.

            	
              The
                Allowable Amount, as at the date of such most
                recent

            

    

    
      	
               

            	
              Certificate
                of Available Eligible Collateral, of Eligible
                Collateral

            

    

    
      	
               

            	
              which
                has, since such date, been withdrawn or substituted
                for

            

    

    
      	
               

            	
              pursuant
                to Section 4.05 (including Eligible Mortgage
                Notes

            

    

    
      	
               

            	
              fully paid) by the Company or ceased to be Eligilble
                Collateral,

            

    

    
      	
               

            	
              as
                shown on Schedule A hereto,
                is.....................................................................

            	
              $

            

    

     

    
      	
              4.

            	
              The
                present Allowable Amount of Eligible Collateral
                certified

            

    

    
      	
               

            	
              to
                the Trustee in the most recent Certificate of Available
                Eligible

            

    

    
      	
               

            	
              Collateral
                (item 1 plus (or minus, if decrease) item 2, and
                minus

            

    

    
      	
               

            	item 3)
              is..........................................................................................................	$

    

     

    
      	
              5.

            	
              The
                Allowable Amount of Eligible Collateral certified
                hereby,

            

    

    
      	
               

            	
              including
                the Eligible Collateral deposited herewith, which
                was

            

    

    
      	
               

            	
              not
                certified in the most recent Certificate of Available
                Eligible

            

    

    
      	
               

            	Collateral, as shown on Schedule B hereto,
              is...................................................	$

    

     

    
      	
              6.

            	
              The
                Allowable Amount of Eligible Collateral held by the
                Trustee

            

    

    
      	
               

            	
              on
                the date hereof and included in this Certificate before
                any

            

    

    
      	
               

            	
              withdrawals
                (item 4 plus item 5)
                is.....................................................................

            	
              
                $

              

            

    

     

    

    
      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

    

    

    
      	
              7.

            	
              The
                Allowable Amount of Eligible Collateral the withdrawal
                of

            

    

    
      	
               

            	
              which
                is hereby requested, if any, as shown on Schedule C
                hereto

            

    

    
      	
               

            	
              (the
                Eligible Collateral made the basis of such withdrawal
                being

            

    

    
      	
               

            	designated on Schedule A and/or Schedule B
              hereto) is....................................	
              
                $

              

            

    

     

    
      	
              8.

            	
              The
                Allowable Amount of Eligible Collateral held by the Trustee
                on

            

    

    
      	
               

            	
              the
                date hereof and included in this Certificate after any
                withdrawals

            

    

    
      	
               

            	(item 6 minus item 7)
              is.....................................................................................	
              $

            

    

     

    
      	
              9.

            	
              The
                aggregate principal amount of Bonds
                Outstanding

            

    

    
      	
               

            	at the date hereof
              is..........................................................................................	
              $

            

    

     

    
      	
              10.

            	
              The
                aggregate amount by which such Allowable Amount
                of

            

    

    
      	
               

            	Eliglible Collateral exceeds Bonds Outstanding
              (item 8 minus item 9) is............	
              $

            

    

     

    
      	
              11.

            	
              The
                principal amount of Bonds the authentication and
                delivery

            

    

    
      	
               

            	
              of
                which is now being requested, if any (an amount not
                greater

            

    

    
      	
               

            	
              than
                the amount shown in item 10) (the Eligible Collateral
                made

            

    

    
      	
               

            	
              the
                basis of such authentication and delivery being designated
                on

            

    

    
      	
               

            	
              Schedule
                A and/or Schedule B hereto)
                is...........................................................

            	
              $

            

    

     

    
      	
              12.

            	
              Each
                Eligible Mortgage Note the Allowable Amount of which is included
                in item 8
                is an Eligible Mortgage Note of a Member which has an Equity Ratio
                of at
                least 20% and an Average Coverage Ratio of not less than
                1.35.

            

    

     

    
      	
              13.

            	
              The
                aggregate Allowable Amount of all Eligible Mortgage Notes of any
                one
                Member included in item 8 of this Certificate does not exceed 10%
                of the
                aggregate Allowable Amount of Eligible Collateral shown in such item
                8.

            

    

     

    
      	
              14.

            	
              In
                the opinion of the undersigned, the respective Equity Ratios and
                Average
                Coverage Ratios of Members whose Eligible Mortgage Notes are listed
                on
                Schedules A and B are not less than those appearing on said
                Schedules.

            

    

     

    
      	
              15.

            	
              None
                of the Eligible Collateral certified in this Certificate includes
                any cash
                or Permitted Investments held for any payment upon particular
                Bonds.

            

    

     

    
      	
              16.

            	
              All
                computations of Equity Ratios and Average Coverage Ratios shown on
                Schedules A and B are based upon financial statements furnished the
                Company in accordance with Section 7.05 of the
                Indenture.

            

    

     

    
      	
              17.

            	
              So
                far as is known to the undersigned (i) no Event of Default under
                the
                Indenture, and no event which, with notice or lapse of time or both,
                would
                result in such an Event of Default, has occurred which has not been
                remedied and (ii) no default specified in clause (i) of the definition
                in
                the Indenture of Eligible

            

    

     

    

    
      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

    

    

    
      	
               

            	
              Mortgage
                Notes which has not been remedied or waived, consented to or approved
                to
                the extent permitted by said clause and no event of default which
                shall
                have resulted in the exercise of any right or remedy referred to
                in clause
                (ii) of said definition has occurred with respect to any of the Mortgage
                Notes listed on Schedules A and B hereto or any of the Mortgages
                securing
                said Mortgage Notes.

            

    

     

    
      	
              18.

            	
              The
                undersigned have read all conditions precedent provided for in the
                Indenture (including any covenants compliance with which constitutes
                a
                condition precedent) and definitions therein which relate to the
                action
                the Trustee is being requested to take, have examined certain corporate
                and financial records of the Company and in the opinion of the undersigned
                have made such examination or investigation as is necessary to enable
                the
                undersigned to express an informed opinion as to whether or not such
                conditions and covenants have been complied with; in the opinion
                of the
                undersigned, such conditions and covenants have been complied
                with.

            

    

     

    All
      terms which are defined in the Indenture are used herein as so
      defined.

     

    Dated:                                                                           .................................................

    .................................................

    

    Of
      National Rural Utilities

    Cooperative
      Finance Corporation

    

    [________________________________

    Accountant

    

    Signing
      in respect of items 1 through 16]

    

    [and
      certifying that (s)he is “Independent” as defined in the Indenture]

    

    
      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

    

    

    ELIGIBLE
      COLLATERAL ON DEPOSIT

     

    SCHEDULE
      A TO OFFICERS’ CERTIFICATE

     

    Dated

    

    
      	
              ELIGIBLE
                COLLATERAL

            	
              NAME
                OF

              MEMBER

            	
              EQUITY
                RATIO OF MEMBER

            	
              AVERAGE

              COVERAGE

              RATIO
                OF

              MEMBER

            	
              ALLOWABLE
                AMOUNT INCLUDED IN CERTIFICATE LAST PREVIOUSLY FILED (ITEM
                1)

            	
              INCREASE
                (DECREASE) IN SUCH ALLOWABLE AMOUNT (ITEMS

              2
                AND 3)

            	
              CURRENT
                ALLOWABLE AMOUNT

              (ITEM
                4)

            
	 	 	 	 	 	 	 
	
              Cash

            	
              —

            	
              —

            	
              —

            	 	 	 
	
              Permitted
                Investments

              (Here
                List)

            	
              —

            	
              —

            	
              —

            	 	 	 
	
              Mortgage
                Notes (Here

              List
                Notes)

            	 	 	 	 	 	 
	 	 	 	 	 	 	 

    

    [NOTE:
      The Eligible Collateral, if any, made the basis of the action by the Trustee
      requested in the application is to be designated by asterisks or
      otherwise.]

    

    
      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

    

    

    ELIGIBLE
      COLLATERAL BEING DEPOSITED

     

    SCHEDULE
      B TO OFFICERS’ CERTIFICATE

     

    Dated

    
      	
              ELIGIBLE
                COLLATERAL

            	
              NAME
                OF

              MEMBER

            	
              EQUITY
                RATIO

              OF
                MEMBER

            	
              AVERAGE

              COVERAGE

              RATIO
                OF

              MEMBER

            	
               
                
                ALLOWABLE

                AMOUNT
                  (ITEM 5)

              

            
	 	 	 	 	 
	
              Cash                                      

            	
              —

            	
              —

            	
              —

            	 
	
              Permitted
                Investments

              (Here
                List)                              

            	
              —

            	
              —

            	
              —

            	 
	
              Mortgage
                Notes (Here

              List
                Notes)                              

            	 	 	 	 
	 	 	 	 	 

    

    

    [NOTE:
      The Eligible Collateral, if any, made the basis of the action by the Trustee
      requested in the application is to be designated by asterisks or
      otherwise.]

    

    The
      Trustee shall be under no obligation to recompute, verify, reclassify or
      recalculate any information supplied to it in any such Certificate.

     

    If
      such Certificate is being delivered to the Trustee in connection with the
      authentication and delivery of Bonds and the aggregate principal amount of
      Bonds
      then being applied for plus the aggregate principal amount of Bonds
      authenticated and delivered since the commencement of the then current calendar
      year (other than Bonds with respect to which such a Certificate signed by an
      Independent Accountant has been previously furnished) is 10% or more of the
      aggregate principal amount of the Bonds at the time Outstanding, the Accountant
      signing such Certificate shall be an Independent Accountant; provided, however,
      that such Certificate need not be signed by an Independent Accountant as to
      dates or periods not covered by annual reports required to be filed by the
      Company, in the case of any matter which depends upon a state of facts as of
      a
      date or dates or for a period or periods different from that required to be
      covered by such annual reports.

     

    The
      Company may include in any Certificate of Available Eligible Collateral any
      cash, Permitted Investments or Eligible Mortgage Notes without also including
      any other cash, Permitted Investments or Eligible Mortgage Notes on deposit
      with
      the Trustee, and by so doing it shall not lose the right later to file a further
      Certificate of Available Eligible Collateral including such other cash,
      Permitted Investments or Eligible Mortgage Notes.

     

    (3)
      A certificate of an Appraiser, dated not more than 30 days prior to such
      authentication and delivery, as to the aggregate fair value to the Company
      as of
      the date of such Certificate of the Permitted Investments and Eligible Mortgage
      Notes made the basis for such authentication and delivery of Bonds (namely,
      those designated as such on Schedule A and/or Schedule B to the Certificate
      of
      Available Eligible Collateral provided for in the foregoing paragraph
      (2)).  If the aggregate fair value to the Company of such
      Permitted Investments and Eligible Mortgage Notes and of all other Permitted
      Investments and Eligible Mortgage Notes deposited with the Trustee since the
      commencement of the then current calendar year and made the basis of the
      authentication and delivery of Bonds, withdrawal of cash or the release of
      property or securities is 10% or more of the aggregate principal amount of
      Bonds
      then Outstanding, such certificate shall be made by an Independent Appraiser
      and, in case the certificate is being made in connection with the authentication
      and delivery of Bonds, shall also cover the aggregate fair value to the Company
      of all other securities deposited with the Trustee since the commencement of
      the
      then current calendar year as to which

     

    

    
      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

    

    

    a
      certificate of an Independent Appraiser shall not previously have been
      furnished; but the certificate provided for in this paragraph need not be made
      by an Independent Appraiser if the aggregate fair value to the Company of the
      Permitted Investments and Eligible Mortgage Notes as set forth in such
      certificate of an Appraiser is less than $25,000 or less than 1% of the
      aggregate principal amount of Bonds at the time Outstanding.  However,
      notwithstanding that such certificate of an Appraiser or Independent Appraiser,
      as the case may be, may show that the aggregate fair value to the Company of
      such Permitted Investments and Eligible Mortgage Notes is less than the
      Allowable Amount thereof, subject to Section 10.01 the Trustee shall
      nevertheless authenticate and deliver Bonds so long as the Allowable Amount
      of
      Eligible Collateral thereof exceeds the principal amount of Bonds
      Outstanding.

     

    (4)
      An Opinion of Counsel for the Company dated the date of the authentication
      and
      delivery of said Bonds and complying with Section 1.02 substantially to
      the effect that:

     

    (i)
      the instruments which have been or are therewith delivered to the Trustee
      conform to the requirements of this Indenture, and all conditions precedent
      provided for in this Indenture (including any covenants compliance with which
      constitutes a condition precedent) which relate to the authentication and
      delivery of the Bonds applied for have been complied with;

     

    (ii)
      the certificate or other evidence specified therein, if any, will be sufficient
      to show or provide for the compliance with the requirements, if any, of any
      mortgage recording tax law or other tax law applicable to the issuance of the
      Bonds then applied for;

     

    (iii)
      the certificate or other evidence specified therein, if any, will be sufficient
      to show the authorization, approval or consent of or to the issuance by the
      Company of the Bonds then applied for, by any Federal, State or other
      governmental regulatory agency at the time having jurisdiction in the
      premises;

     

    (iv)
      the Company is duly authorized by law and by the terms of this Indenture to
      issue such Bonds, and the execution, authentication and delivery of such Bonds
      have been duly authorized by all requisite corporate action on the part of
      the
      Company;

     

    (v)
      such Bonds, when executed by the Company, authenticated and delivered by the
      Trustee and issued, will constitute legal, valid and binding obligations of
      the
      Company enforceable in accordance with their terms and the terms of this
      Indenture, subject to such matters as shall be specified therein, and will
      be
      entitled to the benefits of this Indenture;

     

    (vi)
      each Loan Agreement (if any), pursuant to which a Mortgage Note included in
      item
      5 of the Certificate of Available Eligible Collateral furnished pursuant to
      the
      foregoing paragraph (2) was issued, has been duly authorized, executed and
      delivered by the Company and constitutes a valid and binding obligation of
      the
      Company;

     

    (vii)
      each Mortgage Note and Permitted Investment included in item 5 of said
      Certificate of Available Eligible Collateral has been duly endorsed or assigned
      to the Trustee;

     

    (viii)
      each Mortgage securing a Mortgage Note included in item 5 of said Certificate
      of
      Available Eligible Collateral complies as to form with the requirements of
      this
      Indenture and the interest of the Company therein (if any) has been duly
      assigned to the Trustee;

     

    (ix)
      a financing statement with respect to said Mortgage Notes and the proceeds
      of
      said Mortgage Notes has been properly filed so as to make effective the lien
      or
      pledge intended to be

     

    

    
      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    

    

    created
      thereby or thereon or stating that no such financing statement is required
      to be
      filed, and stating that a financing statement with respect to the assignment
      of
      such interest as the Company has in said Mortgages has been properly filed
      in
      the jurisdictions where the Company keeps its records and in which its principal
      place of business is located (but such opinion need not state the legal effect
      of such latter filing);

     

    (x)
      the certificate or other evidence specified therein, if any, will be sufficient
      to show the authorization, approval or consent of or to the pledge and
      assignment of said Mortgage Notes and of such interest as the Company has in
      said Mortgages to the Trustee by any Federal, State or other governmental
      regulatory agency at the time having jurisdiction in the premises;
      and

     

    (xi)
      the creation, execution, delivery and issuance of the Bonds, the endorsement
      or
      assignment to the Trustee of the Mortgage Notes, Permitted Investments and
      interest in Mortgages referred to above and the execution and delivery of the
      supplemental indenture, if any, hereinafter referred to in paragraph
      (8) of this Subsection, will not violate any provision of the charter or
      by-laws of the Company or, to the knowledge of such counsel, result in the
      breach of, or constitute a default under, any agreement, indenture or other
      instrument to which the Company is a party or by which it is bound.

     

    In
      the event that any Mortgage Note included in item 5 of the Certificate of
      Available Eligible Collateral was originally payable to a wholly-owned
      subsidiary of the Company, said Opinion of Counsel shall state, in lieu of
      what
      is required by clause (vi) with reference to such Mortgage Note, that
      the Loan Agreement (if any) pursuant to which such Mortgage Note was issued
      has
      been duly authorized, executed and delivered by such wholly-owned subsidiary
      and
      constitutes a valid and binding obligation of such wholly-owned subsidiary,
      and
      that the interest of such wholly-owned subsidiary in such Loan Agreement, such
      Mortgage Note and the Mortgage securing such Mortgage Note has been duly
      endorsed or assigned to the Company free and clear of all liens, charges and
      encumbrances.  In addition, the statements required by clauses
      (ix) and (xi) shall include appropriate references to such
      wholly-owned subsidiary as well as to the Company.

     

    (5)
      An Opinion or Opinions of Counsel (or a true copy or copies thereof, certified
      by the Secretary or an Assistant Secretary of the Company) for each Member
      a
      Mortgage Note of which is included in item 5 of said Certificate of Available
      Eligible Collateral, addressed to the Company, stating in substance that as
      of
      the date of such Opinion,

     

    (i)
      such Member is duly organized, validly existing and in good standing under
      the
      laws of its jurisdiction of organization and has full corporate power to execute
      and deliver such Mortgage Note, the Loan Agreement pursuant to which it was
      issued (if any) and the Mortgage securing the same, to perform all acts required
      to be done by it under such Mortgage Note, Loan Agreement (if any) and Mortgage
      and to own, operate and maintain its properties and operate its business as
      conducted at the date of such opinion;

     

    (ii)
      to the extent reasonably required for the maintenance and operation of its
      properties and business taken as a whole, such Member has complied with all
      requirements of the laws of all States in which it operates or does business
      and
      holds all certificates, licenses, consents or approvals of governmental
      authorities required to be obtained on or prior to the date of such Opinion
      to
      enable it to engage in the business then transacted by it;

     

    (iii)
      such Mortgage Note, Loan Agreement (if any) and Mortgage have been duly
      authorized, executed and delivered by said Member and constitute the valid
      and
      binding

     

    

    
      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

    

    

    obligations
      of such Member, enforceable against such Member in accordance with their
      respective terms;

     

    (iv)
      the execution and performance by such Member of such Mortgage Note, Loan
      Agreement (if any) and Mortgage, and the transactions contemplated thereby,
      will
      not violate any provisions of law, the Articles of Incorporation or by-laws
      of
      such Member, or result in the breach of, or constitute a default under, any
      agreement, indenture or other instrument to which such Member is a party, or
      by
      which it may be bound, known to such Counsel;

     

    (v)
      no authorization from any regulatory body is required in connection with the
      execution and delivery of such Mortgage Note, Loan Agreement (if any) or
      Mortgage or that each such authorization so required has been obtained;
      and

     

    (vi)
      such Counsel knows of no litigation pending or threatened against or affecting
      such Member or its property which, in the opinion of such Counsel (or in the
      opinion of such Member as evidenced by a certificate of the manager or other
      responsible officer of such Member annexed to said Opinion), would have a
      material adverse effect upon the business, operations or financial condition
      of
      such Member.

     

    In
      giving the Opinions of Counsel specified in paragraphs (4),
(5) and (8), (i) such Counsel may rely as to matters governed
      by the law of any particular jurisdiction upon opinions of counsel in any such
      jurisdiction upon whom they believe they and the Trustee are justified in
      relying, and, in such event, they shall deliver copies of such opinions to
      the
      Trustee, (ii) such Counsel may include in any such Opinions customary
      qualifications, including without limitation qualifications to the effect that
      (x) any sale or transfer by the Trustee of any of the Pledged Property (other
      than a transfer into the name of the Trustee or a nominee thereof) may be
      subject to the provisions of the Securities Act of 1933, other applicable
      securities laws and regulations promulgated thereunder, and (y) the
      enforceability of certain of the remedies under the Indenture are subject to
      equitable requirements of good faith which may render ineffective any consent
      by
      the Company to the sale of Pledged Property at private sale, and (iii) insofar
      as any such Opinion relates to the enforceability of any agreement or
      instrument, such Counsel may state that the enforceability thereof may be
      limited by bankruptcy, insolvency or other laws of general application relating
      to or affecting the enforcement of creditors’ rights and that the enforceability
      thereof may be limited by laws with respect to or affecting the remedies
      provided for in said agreement or instrument (provided that such laws do not
      in
      the opinion of such Counsel make inadequate the remedies afforded thereby for
      the realization of the benefits provided for in such agreement or
      instrument).

     

    (6)
      An Officers’ Certificate, dated not more than 10 days prior to the
      authentication and delivery of said Bonds, stating that, based upon information
      in the Company’s files and (to the extent deemed necessary by the signers)
      inquiries of the Members,

     

    (i)
      no litigation is pending or threatened against or affecting any Member, or
      the
      property of any Member, whose Mortgage Notes are included in item 5 of said
      Certificate of Available Eligible Collateral which would have a material adverse
      effect upon the business, operations or financial condition of such Member;
      and

     

    (ii)
      since the date of the delivery of the Mortgages securing the Notes referred
      to
      in clause(i) above, no transactions have been entered into by
      the Members issuing said Mortgage Notes which could result in any property
      of
      such Members, respectively, becoming subject to any lien or encumbrance other
      than those contemplated by paragraph 2 under Covenants and Warranties in
      Schedule I to this Indenture.

     

    

    
      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

    

     

    
      (7)
        The instruments and certificates and other evidence, if any, specified in
        the
        Opinions of Counsel as provided by clauses (ii), (iii) and
(x) of the foregoing paragraph (4).

    

     

    (8)
      If such Bonds are of a series not theretofore Outstanding, a Board Resolution
      or
      supplemental indenture creating or authorizing the creation of such series,
      together in the latter case with a Board Resolution authorizing the execution
      and delivery of such supplemental indenture and an Opinion of Counsel stating
      that such supplemental indenture has been duly authorized, executed and
      delivered by the Company and constitutes a legal, valid and binding obligation
      of the Company enforceable in accordance with its terms, subject to such matters
      as may be set forth therein.

     

    Upon
      delivery to it of the foregoing instruments the Trustee shall authenticate
      and
      deliver such Bonds provided the Certificate delivered pursuant to Section
      3.01(b)(2) evidences compliance with the conditions provided for in
Section 3.01(a).

     

    
      	
              SECTION
                3.02.

            	
              Authentication
                and Delivery of Bonds on Basis of Refunding Outstanding
                Bonds.

            

    

     

    (a)
      At any time and from time to time Bonds and coupons, if any, of any series
      may
      be executed by the Company and delivered to the Trustee for authentication,
      and
      shall thereupon be authenticated and delivered by the Trustee, as directed
      by
      Company Order, on the basis of the retirement of Outstanding Bonds at their
      Stated Maturity or by redemption thereof at the option of the
      Company.

     

    (b)
      Prior to the authentication and delivery of any Bonds pursuant to this Section
      the Trustee shall be furnished with the following instruments:

     

    (1)
      A Board Resolution requesting or authorizing the authentication and delivery
      of
      a specified aggregate principal amount of Bonds of a designated
      series.

     

    (2)
      An Officers’ Certificate dated not more than 80 days prior to the authentication
      and delivery of such Bonds, stating

     

    (a)
      that specified Bonds in an aggregate principal amount not less than the
      aggregate principal amount of Bonds the authentication and delivery of which
      is
      requested have been paid at their Stated Maturity or defeased pursuant to
      Article Fourteen or have been or are to be redeemed at the option of the
      Company;

     

    (b)
      that such Bonds have been paid, defeased or redeemed within 60 days prior to
      the
      date of such Certificate or are to be paid or redeemed within 90 days after
      the
      date of such Certificate pursuant (if to be redeemed) to notice of redemption
      previously or concurrently mailed to the Holders of the Bonds to be redeemed
      or
      pursuant to notice which the Trustee has been irrevocably authorized to mail
      and
      money in the necessary amount to pay or redeem such Bonds has therefore been
      or
      is concurrently being deposited with the Trustee or any Paying Agent (other
      than
      the Company) in trust or set aside and segregated in trust by the Company (if
      the Company shall act as its own Paying Agent) for the Holders of the Bonds
      to
      be redeemed;

     

    (c)
      that none of said Bonds so paid or redeemed or to be paid or redeemed has been
      or is to be redeemed pursuant to any sinking fund provided for in this
      Indenture;

     

    (d)
      that none of said Bonds so paid or redeemed or to be paid or redeemed has
      previously been made the basis for the authentication and delivery of any Bonds
      under this Section; and

     

    

    
      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

    

    

    (e)
      that so far as is known to the signers, no Event of Default, and no event which,
      with notice or lapse of time or both, would result in an Event of Default,
      has
      occurred which has not been remedied.

     

    (3)
      An Opinion of Counsel covering the applicable matters specified in clauses
      (i) through (v) and (xi) of paragraph (4) of
Section 3.01(b).

     

    (4)
      The applicable certificates or other evidence, if any, specified in the Opinion
      of Counsel pursuant to the foregoing paragraph (3).

     

    (5)
      If the Bonds to be authenticated and delivered are of a series not theretofore
      Outstanding, a Board Resolution or a supplemental indenture creating or
      authorizing the creation of such series, together in the latter case with a
      Board Resolution authorizing the execution and delivery of such supplemental
      indenture and an Opinion of Counsel stating that such supplemental indenture
      has
      been duly authorized, executed and delivered by the Company and constitutes
      a
      legal, valid and binding obligation of the Company enforceable in accordance
      with its terms.

     

    
      	
              SECTION
                3.03.

            	
              Authentication
                and Delivery of Bonds on Basis of Canceling Bonds Not Issued by the
                Company.

            

    

     

    (a)
      At any time and from time to time Bonds of any series may be executed by the
      Company and delivered to the Trustee for authentication, and shall thereupon
      be
      authenticated and delivered by the Trustee, as directed by Company Order, in
      lieu of or in exchange for any Bonds surrendered by the Company for cancellation
      as provided in Section 2.11, provided such Bonds, although executed,
      authenticated and delivered, have not been issued by the Company.

     

    (b)
      Prior to the authentication and delivery of any Bonds pursuant to this Section
      the Trustee shall be furnished with the following instruments:

     

    (1)
      A Company Order requesting the authentication and delivery of a specified
      aggregate principal amount of Bonds of a designated series.

     

    (2)
      An Officers’ Certificate stating

     

    (a)
      that specified Bonds executed, authenticated and delivered by the Trustee but
      not issued by the Company, in an aggregate principal amount not less than the
      aggregate principal amount of Bonds the authentication and delivery of which
      is
      requested, have been surrendered for cancellation by the Company pursuant to
      Section 2.11;

     

    (b)
      that none of said Bonds so surrendered for cancellation has previously been
      made
      the basis for the authentication and delivery of any Bonds under this Section;
      and

     

    (c)
      that so far as is known to the signers, no Event of Default, and no event which,
      with notice or lapse of time or both, would result in an Event of Default,
      has
      occurred which has not been remedied.

     

    (3)
      An Opinion of Counsel covering the applicable matters specified in clauses
      (i) through (v) and (xi) of paragraph (4) of
Section 3.01(b).

     

    (4)
      The applicable certificates or other evidence, if any, specified in the Opinion
      of Counsel pursuant to the foregoing paragraph (3).

     

    

    
      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

    

    

    (5)
      If the Bonds to be authenticated and delivered are of a series not theretofore
      Outstanding, a Board Resolution or supplemental indenture creating or
      authorizing the creation of such series, together in the latter case with a
      Board Resolution authorizing the execution and delivery of such supplemental
      indenture and an Opinion of Counsel stating that such supplemental indenture
      has
      been duly authorized, executed and delivered by the Company and constitutes
      a
      legal, valid and binding obligation of the Company enforceable in accordance
      with its terms.

     

    
      	
              SECTION
                3.04

            	
              Other
                Authentication and Delivery of
                Bonds.

            

    

     

    Notwithstanding
      anything herein to the contrary, at any time and from time to time Bonds of
      any
      series may be executed by the Company and delivered to the Trustee for
      authentication, and shall thereupon be authenticated and delivered by the
      Trustee, as directed by Company Order and upon delivery of the instruments
      specified in Subsection (b) of Sections 3.01, 3.02 or
3.03, provided that such instruments shall
      be delivered prior only to
      the first issuance of such Bonds of any series, except that a new Certificate
      of
      Available Eligible Collateral shall be required if such a certificate dated
      not
      more than 90 days prior to such authentication and delivery has not previously
      been provided to the Trustee.

     

    ARTICLE
      FOUR

    PROVISIONS
      AS TO PLEDGED PROPERTY

     

    
      	
              SECTION
                4.01.

            	
              Holding
                of Pledged Securities.

            

    

     

    All
      Mortgage Notes, shares of stock and other securities pledged with the Trustee
      as
      part of the Pledged Property pursuant to any provision of this Indenture shall
      be endorsed in blank for transfer or be accompanied by proper instruments of
      assignment satisfactory to the Trustee, duly executed by any holder thereof
      other than the Trustee, unless and until an Event of Default shall have occurred
      and be continuing, in which case the Trustee may (to the extent a register
      is
      maintained therefor) cause the same to be registered in its name, as Trustee,
      or
      in the name of its nominee; provided that all such securities that may
      be held in book entry form only shall be at all times held in the name of the
      Trustee, as such, or its nominee.  The Company will delivery promptly
      to the Trustee all such documents, certificates and opinions as are specified
      in
      any instruments delivering, assigning or pledging securities to the Trustee
      as
      part of the Pledged Property, in connection with subjection of any securities
      to
      the lien of this Indenture to the extent contemplated hereby.

     

    So
      long as no Event of Default shall have occurred and be continuing, the Trustee
      shall take all actions specified in a Company Request for the purposes of
      maintaining, preserving, renewing or extending the existence of any corporation
      the stock of which may be Pledged Property, and, for any such purposes, from
      time to time, may sell, assign or transfer and deliver so many shares of the
      stock of any such corporation as may be necessary to qualify persons to act
      as
      directors of, or in any other official relation to, any such
      corporation.

     

    
      	
              SECTION
                4.02.

            	
              Disposition
                of Payments on Pledged
                Property.

            

    

     

    Unless
      and until an Event of Default shall have occurred and be continuing, the Company
      shall be entitled to receive all principal (premium, if any) and interest paid
      in respect of any Mortgage Note and other indebtedness which may be part of
      the
      Pledged Property; and the Company shall also be entitled to receive dividends
      (except dividends payable in shares of stock of the issuing corporation) out
      of
      earnings, income or earned surplus on all shares of stock which may be part
      of
      the Pledged Property, and from time to time upon Company Request the Trustee
      shall deliver to the Company any coupons for such interest then in its
      possession in order that the Company may receive payment thereof or may cause
      the same to be

     

    

    
      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

    

    

    cancelled;
      and on like Company Request the Trustee shall deliver to the Company suitable
      orders in favor of the Company, or its nominee, for the payment of such
      principal (premium, if any) and interest and of such dividends, and the Company
      may collect such coupons, principal (premium, if any) and interest and dividends
      and the Trustee shall upon Company Request pay over to the Company any such
      principal (premium, if any) and interest and dividends which may be collected
      or
      be received by the Trustee; provided, however, that except as
      in this Indenture otherwise expressly provided:

     

    (1)
      the Company shall not be entitled to collect any stock dividends that may be
      declared on any shares of capital stock that may be part of the Pledged
      Property, and in case stock dividends are so declared the certificates therefor
      shall be endorsed for transfer and delivered to the Trustee; and

     

    (2)
      the Company shall not be entitled to collect any dividends on or other
      distributions in respect of any stock which is at any time part of the Pledged
      Property which shall in any way be chargeable to or payable out of the capital
      (including any paid-in or capital surplus or equity of members or patrons of
      Members) of the corporation issuing the same.

     

    Subject
      to the provisions of Section 10.01 hereof, until a Responsible Officer
      shall have actual notice to the contrary the Trustee shall be entitled to assume
      that any such dividend (except a dividend payable in shares of the issuing
      company) is payable out of earnings, income or earned surplus.

     

    In
      case any corporation whose shares of stock are part of the Pledged Property
      shall issue to the holders of such shares rights to purchase any securities
      or
      other property, the Company shall be entitled to receive and exercise such
      rights or sell such rights for cash as in its discretion it shall
      determine.

     

    In
      case default shall be made in the payment of the principal of or interest on
      any
      part of the Pledged Property, or in the due performance of any covenant
      contained in any obligation or instrument evidencing or securing the same,
      or
      pursuant to which it is issued, then and in any such case (without prejudice,
      however, to any right to claim a default under this Indenture or to assert
      any
      right consequent upon such default and without prejudice to any right of the
      Trustee, to exercise any rights to which it may be entitled as such holder),
      the
      Trustee, upon Company Request, shall, subject to Section 10.01, cause,
      or join with other owners of like obligations and as specified therein to cause,
      proceedings to be instituted and prosecuted to enforce such payment or
      performance.

     

    In
      case any payment or other distribution shall be received by the Company or
      the
      Trustee on account of any part of the Pledged Property, which the Company is
      not
      entitled to receive under the provisions of this Article, or after an Event
      of
      Default shall have occurred and be continuing, then, in any such case, any
      such
      payment or other distribution shall be delivered to the Trustee (if not received
      by it) and held by the Trustee as part of the Pledged Property.  For
      all purposes of this Article Four, the Trustee shall have no obligation to
      take
      any action with respect to any Event of Default until a Responsible Officer
      has
      actual notice of such Event of Default and the Trustee shall have no liability
      for any action or inaction taken, suffered or omitted in respect of any Event
      of
      Default by it prior to such time as a Responsible Officer has actual notice
      of
      such Event of Default or its continuance.

     

    
      	
              SECTION
                4.03.

            	
              Voting;
                Consents.

            

    

     

    Unless
      and until an Event of Default shall have occurred and be continuing, the Company
      shall have the right to vote or give consents or waivers, for all purposes
      not
      contrary to Section 7.12 or any other covenants herein contained or
      otherwise inconsistent with the provisions of this Indenture, upon and in
      respect of all shares of stock and other securities which are part of the
      Pledged Property or in respect of any

     

    

    
      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

    

    

    instrument
      evidencing or securing the same, or pursuant to which it is issued (and with
      the
      same force and effect as if such shares or other securities were not part of
      the
      Pledged Property), and from time to time, upon Company Request, the Trustee
      forthwith shall make and deliver, or shall cause to be made and delivered to
      the
      Company or to its nominees, such powers of attorney or proxies to vote any
      shares of stock or other securities which have been transferred into the name
      of
      the Trustee or its nominee, or to give consent or waiver in respect thereof,
      as
      shall be specified in such Company Request.  It is hereby understood
      that the Trustee is not included within the definition of “mortgagee” in any
      Mortgage and that, so long as no Event of Default shall have occurred and be
      continuing, the Trustee shall have no duties or responsibilities with regard
      to
      any Mortgage which is part of the Pledged Property or the value of the property
      subject thereto, except as specifically provided herein, and it shall not be
      necessary to obtain any consent from the Trustee with regard to any action
      taken
      pursuant to any Mortgage or any action omitted to be taken thereunder, in either
      case by any party thereto.  Without limiting the generality of the
      foregoing, the Company, unless and until any Event of Default shall have
      occurred and be continuing, shall have the right to consent to the sale or
      other
      transfer of any property of the mortgagor under any Mortgage and to execute
      any
      release of such property, and the Trustee shall execute any release or consent
      requested by Company Request to confirm any action taken by the Company pursuant
      to this Section.  In executing any such power of attorney, proxy,
      release or consent, the Trustee shall be entitled to receive and rely upon
      an
      Officers’ Certificate and an Opinion of Counsel each stating that the Company
      was authorized by this Indenture to take the action taken by it and that the
      execution of such power of attorney, proxy, release or consent is authorized
      or
      permitted hereunder.

     

    The
      Company covenants that it will not vote any such shares of stock or other
      securities or give consents or waivers with respect to any such instrument,
      under any power of attorney or proxy executed and delivered to it under the
      provisions of this Section for any purpose contrary to or inconsistent with
      the
      provisions or purposes of this Indenture.

     

    
      	
              SECTION
                4.04.

            	
              Certain
                Actions in Case of Judicial
                Proceedings.

            

    

     

    The
      Trustee, upon Company Request and as specified therein, shall join in any plan
      of reorganization in respect of any part of the Pledged Property and may accept
      new securities, including in that term stock, issued in exchange therefor under
      such plan.

     

    In
      case an Event of Default shall have occurred and be continuing, the Trustee
      shall be entitled to take such steps without the request or consent of the
      Company.

     

    In
      case all or any part of the property of any Person, all or part of whose
      outstanding stock, Mortgage Notes, bonds, indebtedness or obligations are part
      of the Pledged Property, shall be sold at any judicial or other involuntary
      sale
      and the Trustee shall receive any portion of the proceeds of such sale accruing
      on the securities held as part of the Pledged Property (subject, however, to
      the
      pledge thereof under any mortgage or other instrument prior in lien to this
      Indenture if required by the terms of such mortgage or other instrument), and
      such proceeds shall be held as part of the Pledged Property.

     

    
      	
              SECTION
                4.05.

            	
              Renewal;
                Extension; Substitution.

            

    

     

    Unless
      and until an Event of Default shall have occurred and be continuing, the Company
      may at any time renew or extend, subject to the continuing lien of this
      Indenture, any Mortgage Notes, bonds, obligations or indebtedness forming part
      of the Pledged Property upon any terms or may accept in place of and in
      substitution for any such Mortgage Notes, bonds, obligations or indebtedness,
      other Mortgage Notes, bonds, obligations or indebtedness of the same issuer
      or
      of any successor thereto for at least the same unpaid principal amounts and
      at
      any rate of interest, and, in case of Mortgage Notes, secured by a
      Mortgage

     

    

    
      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

    

    

    covering
      substantially the same property and having substantially the same terms, all
      as
      evidenced by an Officers’ Certificate delivered to the Trustee; provided,
      however, that in case of any substitution, Mortgage Notes, bonds, obligations
      or
      indebtedness substituted as aforesaid shall be subject to the lien of this
      Indenture as part of the Pledged Property and be held in the same manner as
      those for which they shall be substituted and in the case of each substituted
      Mortgage Note the Company shall deliver to the Trustee an Opinion or Opinions
      of
      Counsel (or a true copy or copies thereof, certified by the Secretary or an
      Assistant Secretary of the Company) complying with paragraphs (vii),
(viii), (ix) and (x) of Section 3.01(b)(4)
      and paragraphs (iii), (iv) and (v) of Section
      3.01(b)(5) omitting any statements concerning the Mortgage securing such
      Mortgage Note if the Mortgage Note substituted for was secured by the same
      Mortgage which shall not have been amended or supplemented since the pledge
      of
      the Mortgage Note substituted for, provided that the Opinion of Counsel
      complying with said paragraphs Section 3.01(b)(5) shall state that no
      amendment or supplement to said Mortgage or any additional recording or filing
      thereof is required in order to cause said substituted Mortgage Note to be
      secured by said Mortgage to the same extent as the Mortgage Note substituted
      for.

     

    So
      long as no Event of Default shall have occurred and be continuing, the Trustee,
      upon Company Request stating that no such Event of Default shall have occurred
      and be continuing, shall execute such consent to any such renewal, extension
      or
      substitution as shall be specified in such Company Request and in doing so
      the
      Trustee is entitled to receive and rely upon an Officers’ Certificate and an
      Opinion of Counsel to the effect that the execution of such consent is
      authorized or permitted by this Indenture.

     

    
      	
              SECTION
                4.06.

            	
              Certain
                Rights in Respect of Stock.

            

    

     

    Unless
      and until an Event of Default shall have occurred and be continuing, the Company
      shall have the right to vote or give consent, in respect of all or any part
      of
      the shares of stock of any corporation at the time forming part of the Pledged
      Property and having a par value, to the change thereof into shares having a
      higher or lower par value per share, or into shares having no par value, or
      shares having no par value into shares having a par value, and may consent
      at
      any time that the shares of stock of any corporation at the time forming part
      of
      the Pledged Property may be classified or reclassified in any manner permitted
      by law; provided, however, that all of such stock forming part of the Pledged
      Property shall be and remain fully paid and all new shares substituted shall
      be
      subject to the lien of this Indenture as part of the Pledged Property and be
      held in the same manner as those for which they were substituted.

     

    Unless
      and until an Event of Default shall have occurred and be continuing, the Company
      shall have the right to vote and give consent or waiver in respect of the
      increase or reduction of the capital stock or the dissolution of any
      corporation, shares of the stock of which form part of the Pledged Property,
      if
      the Board of Directors determines (as evidenced by a Board Resolution) that
      such
      increase or reduction or dissolution is desirable and not detrimental to the
      interest of the Bondholders, subject to the provisions of Section 4.02
      hereof with respect to dividends in such cases being paid to the
      Trustee.

     

    
      	
              SECTION
                4.07.

            	
              Consolidation,
                Merger, etc., of Issuing
                Corporations.

            

    

     

    Nothing
      contained in this Indenture shall prevent or restrict:

     

    (1)
      any corporation all or any part of whose capital stock or other securities
      may
      be part of the Pledged Property from consolidating with or merging into, or
      conveying in any manner all or any part of its assets to any other corporation,
      whether or not affiliated with such other corporation, provided that any capital
      stock of such other corporation which is issued for or in lieu of stock which
      is
      part of the Pledged Property shall become part of the Pledged Property and
      any
      such other securities shall continue to be part of the Pledged
      Property;

     

    

    
      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

    

    

    (2)
      any corporation, all or any part of whose capital stock or other securities
      may
      be part of the Pledged Property, from merging into itself, or taking a
      conveyance of, all or any part of the property of any other corporation, whether
      or not affiliated with such other corporation, provided that capital or other
      securities shall continue to be part of the Pledged Property; or

     

    (3)
      any corporation, all or any part of whose capital stock or other securities
      may
      be part of the Pledged Property, whether or not affiliated with the Company,
      from consolidating with or merging into, or conveying in any manner all or
      any
      part of its assets to, the Company, subject, however, to the provisions of
      Article Twelve;

     

    provided,
      however, that in each such case if such corporation has issued a
      Mortgage Note which is part of the Pledged Property, the terms of such merger,
      consolidation or conveyance shall comply with the requirements of the Mortgage
      securing said Mortgage Note.

    

    
      	
              SECTION
                4.08.

            	
              Certain
                Voting and Other Powers of the
                Trustee.

            

    

     

    The
      Trustee shall vote or permit to be voted any shares of stock forming part of
      the
      Pledged Property and take other actions to effect the purposes of Sections
      4.06 and 4.07; and, in connection with any transaction authorized
      thereby, the Trustee shall make or permit any necessary exchange, cancellation,
      substitution or surrender of bonds, obligations, indebtedness or stocks, or
      shall transfer, in whole or in part, into the name of the Company or, of the
      nominee or nominees of the Company, any shares of any corporation about to
      be
      merged or consolidated.  So long as no Event of Default shall have
      occurred and be continuing, such action shall be taken only upon Company
      Request.

     

    In
      connection with any such exchange, cancellation, substitution, surrender or
      release of bonds, obligations, indebtedness or stocks, in accordance with the
      provisions of Section 4.06 or 4.07, the Trustee shall be
      entitled to receive and rely upon an Officers’ Certificate as to any matters
      pertinent to any action taken or contemplated in connection therewith and also
      an Opinion of Counsel as to the legality and validity of any such action and
      to
      the effect that such action is authorized or permitted hereunder.

     

    
      	
              SECTION
                4.09.

            	
              Rights
                of Trustee and Company After Event of
                Default.

            

    

     

    Whenever
      in this Article it is provided that any right in respect of any part of the
      Pledged Property or in any obligation evidencing or securing the same or
      pursuant to which it is issued may be exercised by the Company only until an
      Event of Default or other default shall have occurred and be continuing, such
      right, nevertheless, shall be exercised by the Company for the benefit of the
      Bondholders in case such an Event of Default or other default shall have
      occurred and be continuing, except to the extent, if any, that the Trustee
      shall
      in writing to the Company limit such exercise.

     

    ARTICLE
      FIVE

     APPLICATION
      OF MONEYS INCLUDED IN PLEDGING PROPERTY;

    PERMITTED
      INVESTMENTS

     

    
      	
              SECTION
                5.01.

            	
              Cash
                Held by Trustee Treated as a
                Deposit.

            

    

     

    Any
      and all cash held by the Trustee under any provision of this Indenture may
      be
      treated by the Trustee, until required to be paid out pursuant hereto, as a
      deposit, in trust, without any liability for interest.  Nevertheless,
      at the election of the Company evidenced by a Company Request, any and all
      such
      money, in whole or in part, shall, from time to time (unless an Event of Default
      shall have occurred and shall be continuing), be deposited by the Trustee,
      in
      its corporate name as Trustee, with such other depositary or depositaries as
      shall be designated pursuant to such Company Request, to be held at all times
      subject to

     

    

    
      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

    

    

    withdrawal
      by the Trustee when required for the purposes of this Indenture or when
      requested by a Company Request.  Every such depositary shall be a bank
      or trust company within the continental United States and having a capital
      and
      surplus aggregating at least $100,000,000 (determined from its most recent
      report of condition, if it publishes such reports at least annually pursuant
      to
      law or the requirements of Federal or State examining or supervisory
      authority).  All sums deposited with any such depositary shall
      nevertheless for all purposes of this Indenture be deemed to be held by and
      deposited with the Trustee.  The Trustee shall have no liability for
      the loss of any sums so deposited with any such depositary, but the Company
      shall be obligated to promptly make up any such loss.  Such depositary
      shall not be under any obligation to see to the application of any sums
      withdrawn from it or to inquire into the authority of the Trustee to make any
      such withdrawal.

     

    
      	
              SECTION
                5.02.

            	
              Use
                of Moneys for Payment, Redemption or Purchase of
                Bonds.

            

    

     

    Subject
      to the provisions of Section 5.04, any moneys held by the Trustee as
      part of the Pledged Property (other than moneys at the time held for any payment
      on particular Bonds) shall, upon Company Request from time to time, such request
      to be accompanied by an Officer’s Certificate stating that the Allowable Amount
      of Eligible Collateral on deposit with the Trustee will exceed the principal
      amount of Bonds Outstanding after giving effect to the action
      requested,

     

    (1)
      be applied by the Trustee to the redemption of Bonds then Outstanding of any
      one
      or more series specified in such Company Request, including the redemption
      of
      any Bonds for any sinking or analogous fund established for Bonds of any series,
      or to the payment of any Bonds at Maturity; or

     

    (2)
      be applied by the Trustee to the purchase of Bonds then Outstanding of any
      one
      or more series specified in such Company Request, upon tender or in the open
      market or at a private sale or upon any securities exchange or in any one or
      more of said ways specified in such Company Request; provided,
however, that no Bond shall be purchased at a price (excluding
      brokerage fees) exceeding the lower of the principal amount thereof and accrued
      interest thereon or the maximum price (excluding brokerage fees) stated in
      such
      Company Request.

     

    Whenever
      the Trustee shall purchase Bonds under the foregoing paragraph (2), the
      Company shall promptly reimburse the Trustee for all brokerage fees and all
      interest on such Bonds to the date of purchase, and any moneys so reimbursed
      shall thereafter be held as part of the Pledged Property.

     

    
      	
              SECTION
                5.03.

            	
              Investment
                of Moneys by Trustee.

            

    

     

    Any
      moneys held by the Trustee as part of the Pledged Property (other than moneys
      held for the payment of principal of or premium (if any) or interest on
      particular Bonds at Maturity except as specifically provided herein) shall,
      upon
      Company Request and as stated therein, be invested or reinvested by the Trustee
      until required to be paid out by the Trustee as provided in this Indenture,
      in
      any one or more of the following (herein called “Permitted
      Investments”):

     

    (1)
      obligations of or guaranteed by the United States of America or any agency
      thereof for which the full faith and credit of the obligor shall be pledged
      and
      which shall mature (except in the case of obligations guaranteed by REA) not
      more than 2 years after the purchase thereof;

     

    (2)
      obligations of any state or municipality, or subdivision or agency of either
      thereof, which shall mature not more than 2 years after the purchase thereof
      and
      are rated AA (or equivalent)

     

    

    
      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

    

    

    or
      better by at least two nationally recognized statistical rating organizations
      or
      having a comparable rating in the event of any future change in the rating
      system of such agencies;

     

    (3)
      certificates of deposit issued by, or time deposits of, any bank or trust
      company (including the Trustee) organized under the laws of the United States
      of
      America or any State thereof having capital and surplus of not less than
      $500,000,000 (determined from its most recent report of condition, if it
      publishes such reports at least annually pursuant to law or the requirements
      of
      Federal or State examining or supervisory authority) and maturing not more
      than
      2 years after the purchase thereof; and

     

    (4)
      commercial paper of bank holding companies or of other issuers (excluding the
      Company) generally rated in the highest category by at least two nationally
      recognized statistical rating organizations and maturing not more than one
      year
      after the purchase thereof.

     

    Unless
      an Event of Default shall have occurred and be continuing, any interest received
      by the Trustee on any such investments which shall exceed the amount of accrued
      interest, if any, paid by the Trustee on the purchase thereof, and any profit
      which may be realized from any sale, redemption or maturity of such investments,
      shall be paid to the Company.  Such investments shall be held by the
      Trustee as a part of the Pledged Property, but upon Company Request the Trustee
      shall sell all or any designated part of the same, and the proceeds of such
      sale
      shall be held by the Trustee subject to the same provisions hereof as the cash
      used by it to purchase the investments so sold.  In case the net
      proceeds realized upon any sale, redemption or maturity shall amount to less
      than the purchase price paid by the Trustee in the purchase of the investments
      so sold, the Trustee shall notify the Company in writing thereof, and the
      Company shall pay to the Trustee the amount of the difference between such
      purchase price and the amount so realized, and the amount so paid shall be
      held
      by the Trustee in like manner and subject to the same conditions as the proceeds
      realized upon such sale.  The Company will reimburse the Trustee for
      any brokerage commissions or other expenses incurred by the Trustee in
      connection with the purchase or sale of such investments.  The Trustee
      may aggregate such costs and expenses of and such receipts from such investments
      on a monthly basis (or such other periodic basis as the Company and the Trustee
      may agree in writing from time to time) so as to net each against the other
      during such period and pay to the Company amounts due to it or notify the
      Company of amounts due from it on a net basis for such period.

     

    The
      Company may at any time deposit with the Trustee Permitted Investments to be
      held by the Trustee as part of the Pledged Property, provided that no such
      Permitted Investment shall be subject to any reservation, limitation or
      condition referred to in granting clause second.

     

    
      	
              SECTION
                5.04.

            	
              Trustee
                to Retain Moneys if Event of Default
                Exists.

            

    

     

    If
      an Event of Default shall have occurred and be continuing to the actual
      knowledge of a Responsible Officer, moneys held by the Trustee as a part of
      the
      Pledged Property shall not be paid over to the Company or upon Company Request
      except pursuant to Section 9.13.

     

    ARTICLE
      SIX

    WITHDRAWAL
      OF COLLATERAL

     

    
      	
              SECTION
                6.01.

            	
              Withdrawal
                of Collateral.

            

    

     

    (a)
      Unless and until an Event of Default shall have occurred and be continuing,
      any
      part of the Pledged Property may be withdrawn by the Company and shall be
      delivered by the Trustee upon Company Order at any time and from time to time,
      whenever the Allowable Amount of Eligible Collateral remaining after such
      withdrawal shall at least equal the aggregate principal amount of Bonds to
      be
      Outstanding after

     

    

    
      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

    

    

    such
      withdrawal, as shown by the Certificate of Available Eligible Collateral
      furnished to the Trustee pursuant to Subsection (b)(1) of this
      Section.

     

    (b)
      Prior to any such withdrawal the Trustee shall be furnished with the following
      instruments:

     

    (1)
      a Certificate of Available Eligible Collateral, dated not more than 30 days
      prior to such withdrawal, showing that immediately after such withdrawal the
      requirements of Subsection (a) of this Section and Subsections
      (a)(2) and (3) of Section 3.01 will be
      satisfied;

     

    (2)
      a certificate of an Appraiser (or Independent Appraiser), dated not more than
      30
      days prior to such withdrawal, as specified in Subsection (b)(3) of
Section 3.01, as to the aggregate fair value to the Company as of the
      date of such certificate of the Permitted Investments and Eligible Mortgage
      Notes made the basis for such withdrawal (namely, those designated as such
      on
      Schedule A and/or Schedule B to the Certificate of Available Eligible Collateral
      provided for in the foregoing paragraph (1)) (although notwithstanding
      that such Certificate may show that the aggregate fair value to the Company
      of
      such Permitted Investments and Eligible Mortgage Notes is less than the
      Allowable Amount thereof, subject to Section 10.01, the Trustee shall
      nevertheless permit such withdrawal if the Allowable Amount of remaining
      Eligible Collateral will exceed the amount of Bonds Outstanding after such
      withdrawal);

     

    (3)
      an Opinion of Counsel as specified in Subsection (b)(4) of Section
      3.01, dated not more than 30 days prior to such withdrawal, omitting
      therefrom the statements required by clauses (i) through (v)
      of said Subsection (b)(4) but stating that all conditions precedent
      provided for in this Indenture (including any covenants, compliance with which
      constitutes a condition precedent) which relate to such withdrawal and to the
      Trustee’s execution and delivery of any instruments of transfer and assignment
      in connection therewith have been complied with;

     

    (4)
      an Opinion or Opinions of Counsel (or a true copy or copies thereof, certified
      by the Secretary or an Assistant Secretary of the Company) for each Member
      a
      Mortgage Note of whom is included in item 5 of said Certificate of Available
      Eligible Collateral (or a confirmation of an Opinion previously given),
      complying with the provisions of Subsection (b)(5) of Section
      3.01;

     

    (5)
      an Officers’ Certificate, dated not more than 10 days prior to such withdrawal,
      complying with the provisions of Subsection (b)(6) of Section
      3.01 and certifying that so far as is known to the signers no Event of
      Default has occurred which has not been remedied; and

     

    (6)
      the instruments and certificates and other evidence specified in Subsection
      (b)(7) of Section 3.01 (to the extent applicable).

     

    Upon
      any such withdrawal, the Trustee shall execute any instruments of transfer
      or
      assignment specified in a Company Request as necessary to vest in the Company
      any part of the Pledged Property withdrawn.

     

    Prior
      to such delivery by the Trustee, the Trustee shall be furnished with the
      certificate of an Appraiser as to the fair value of any part of the Pledged
      Property to be withdrawn, which certificate shall state that in the opinion
      of
      such Appraiser the proposed withdrawal will not impair the security under this
      Indenture in contravention of the provisions hereof.  Such certificate
      shall be made by an Independent Appraiser if the fair value of such part of
      the
      Pledged Property and of all other Pledged Property released since the
      commencement of the then current calendar year, as set forth in the certificates
      required by this Section, is 10% or more of the aggregate principal amount
      of
      the Bonds at the time outstanding; but such a

     

    

    
      
        
          
          

        

        
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    certificate
      of an Independent Appraiser shall not be required in the case of any withdrawal
      of any part of the Pledged Property if the fair value thereof as set forth
      in
      the certificate required by this Section is less than $25,000 or less than
      1% of
      the aggregate principal amount of the Bonds at the time
      outstanding.  However, notwithstanding that such certificate of an
      Appraiser or Independent Appraiser, as the case may be, may show that the fair
      value of such Permitted Investments, Mortgage Notes or other securities is
      more
      than the Allowable Amount thereof, subject to Section 10.01 the Trustee
      shall nevertheless permit such withdrawal if the Allowable Amount of Eligible
      Collateral remaining after such withdrawal will exceed the amount of Bonds
      Outstanding.

     

    In
      case an Event of Default shall have occurred and be continuing, the Company
      shall not withdraw any part of the Pledged Property except that, notwithstanding
      Section 4.05, any Mortgage Notes (and the Mortgages securing such
      Mortgage Notes) may be withdrawn upon the deposit with the Trustee of an
      Allowable Amount of cash and/or Permitted Investments at least equal to the
      Allowable Amount (at the time of such withdrawal) of the Mortgage Notes so
      withdrawn and the delivery to the Trustee of the instruments referred to in
      Subsections (b)(1) and (2) of this Section and a Company
      Request.  The Trustee shall have no liability in respect of any
      withdrawal made when an Event of Default shall have occurred and be continuing
      unless a Responsible Officer has actual notice of such Event of Default and
      its
      continuance.

     

    
      	
              SECTION
                6.02.

            	
              Reassignment
                of Mortgage Notes Upon
                Payment.

            

    

     

    Upon
      receipt of

     

    (1)
      an Officers’ Certificate stating that all payments of principal, premium (if
      any) and interest have been made upon any Mortgage Note held by the Trustee
      other than payment of an amount (if any) specified in said certificate required
      fully to discharge all obligations on said Mortgage Note, and

     

    (2)
      cash in the amount (if any) so specified fully to discharge said Mortgage
      Note,

     

    the
      Trustee shall deliver to the Company upon Company Request said Mortgage Note,
      together with the Mortgage securing such Mortgage Note and any instrument of
      transfer or assignment necessary to reassign to the Company said Mortgage Note
      and the interest of the Company in the Mortgage specified in such Company
      Request.

     

    ARTICLE
      SEVEN

     

    

     

    
      	
              SECTION
                7.01.

            	
              Payment
                of Principal, Premium and
                Interest.

            

    

     

    The
      Company will duly and punctually pay the principal of (and premium, if any)
      and
      interest on the Bonds in accordance with the terms of the Bonds, the coupons
      appertaining thereto, if any, and this Indenture.  Any interest due on
      Bearer Bonds on or before Maturity, other than premiums, if any, shall be
      payable only upon presentation and surrender of the several coupons for such
      interest Installments as are evidenced thereby as they severally
      mature.

     

    
      	
              SECTION
                7.02.

            	
              Maintenance
                of Offices or Agencies.

            

    

     

    The
      Company will maintain (1) in the Borough of Manhattan, The City of New York,
      an
      office or agency where Registered Bonds may be presented or surrendered for
      payment, where Bonds may be surrendered for registration of transfer or
      exchange, and where notices and demands to or upon the Company in respect of
      the
      Bonds and coupons and this Indenture may be served, and (2) outside of
      the

     

    

    
      
        
          
          

        

        
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    United
      States an office or agency where Bearer Bonds and coupons may be presented
      and
      surrendered for payment.

     

    The
      Company will give prompt written notice to the Trustee of the location, and
      of
      any change in the location, of each such office or agency.  If at any
      time the Company shall fail to maintain any such office or agency or shall
      fail
      to furnish the Trustee with the address thereof, such presentations, surrenders,
      notices and demands may be made or served at the Corporate Trust Office of
      the
      Trustee, and the Company hereby appoints the Trustee its agent to receive all
      such presentations, surrenders, notices and demands.

     

    
      	
              SECTION
                7.03.

            	
              Money
                for Bond Payments to be Held in
                Trust.

            

    

     

    If
      the Company shall at any time act as its own Paying Agent for any series of
      Bonds and any coupons appertaining thereto, it will, on or before each due
      date
      of the principal of (and premium, if any) or interest on, any of the Bonds
      of
      such series, segregate and hold in trust for the benefit of the Persons entitled
      thereto a sum sufficient to pay the principal (and premium, if any) or interest
      so becoming due until such sums shall be paid to such Persons or otherwise
      disposed of as herein provided, and will promptly notify the Trustee in writing
      of its action or failure so to act.

     

    All
      moneys deposited with the Trustee or with any Paying Agent for the purpose
      of
      paying the principal of or premium or interest on Bonds shall be deposited
      and
      held in trust for the benefit of the Holders entitled to such principal, premium
      or interest, subject to the provisions of this Section.  Moneys so
      deposited and held in trust shall not be part of the Pledged Property but shall
      constitute a separate trust fund for the benefit of the Holders entitled to
      such
      principal, premium or interest.

     

    The
      Company will cause each Paying Agent other than the Trustee to execute and
      deliver to the Trustee an instrument in which such Paying Agent shall agree
      with
      the Trustee, subject to the provisions of this Section, that such Paying Agent
      will

     

    (1)
      hold all sums held by it for the payment of principal of (and premium, if any)
      or interest on Bonds in trust for the benefit of the Holders entitled thereto
      until such sums shall be paid to such Holders or otherwise disposed of as herein
      provided;

     

    (2)
      give the Trustee notice of any default by the Company (or any other obligor
      upon
      the Bonds or coupons) in the making of any such payment of principal (and
      premium, if any) or interest; and

     

    (3)
      at any time during the continuance of any such default, upon the written request
      of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
      Paying Agent.

     

    The
      Company may at any time, for the purpose of obtaining the satisfaction and
      discharge of this Indenture or for any other purpose, pay, or direct any paying
      Agent to pay, to the Trustee all sums held in trust by the Company or such
      Paying Agent, such sums to be held by the Trustee upon the same trusts as those
      upon which such sums were held by the Company or such Paying Agent; and, upon
      such payment by any Paying Agent to the Trustee, such Paying Agent shall be
      released from all further liability with respect to such money.

     

    Any
      money deposited with the Trustee or any Paying Agent, or then held by the
      Company, in trust for the payment of the principal of (and premium, if any)
      or
      interest on any Bond and remaining unclaimed for two years after such principal
      (and premium, if any) or interest has become due and payable shall be paid
      to
      the Company on Company Request, or (if then held by the Company) shall be
      discharged from such

     

    

    
      
        
          
          

        

        
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    trust;
      and the Holder of such Bond or relevant coupon shall thereafter, as an unsecured
      general creditor, look only to the Company for payment thereof, and all
      liability of the Trustee or such Paying Agent with respect to such trust money,
      and all liability of the Company as trustee thereof, shall thereupon cease;
      provided, however, that the Trustee or such Paying Agent, before being required
      to make any such repayment, may at the expense of the Company cause to be
      published once, in an Authorized Newspaper in each Place of Payment of such
      Bond, 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 publication,
      any unclaimed balance of such money then remaining will be repaid to the
      Company.

     

    
      	
              SECTION
                7.04.

            	
              Maintenance
                of Corporate Existence.

            

    

     

    Subject
      to the provisions of Article Twelve, the Company, at its own cost and
      expense, will do or cause to be done all things necessary to preserve and keep
      in full force and effect its corporate existence, rights and franchises, except
      as otherwise specifically permitted in this Indenture; provided,
however, that the Company shall not be required to preserve any
      right
      or franchise if the Board of Directors shall determine (as evidenced by a Board
      Resolution) that the preservation thereof is no longer desirable in the conduct
      of the business of the

     

    
      	
              SECTION
                7.05.

            	
              Maintenance
                of Books of Record and Account; Financial Statements of Company and
                Members.

            

    

     

    The
      Company will keep proper books of record and account in which full and correct
      entries will be made of its transactions in accordance with generally accepted
      accounting principles.

     

    The
      Company will deliver to the Trustee within 120 days after the expiration of
      each
      fiscal year of the Company, an operating statement for such fiscal year and
      a
      balance sheet of the Company as of the last day of such fiscal
      year.  Such operating statements and balance sheets shall set forth in
      reasonable detail the results of operations and the financial condition of
      the
      Company and shall be accompanied by the report of the Independent Accountants
      who have audited the books of the Company for such fiscal year.

     

    The
      Company will cause to be furnished to it, within 120 days after the expiration
      of each calendar year, similar financial statements of each such Member whose
      Mortgage Notes are then pledged hereunder, which shall be prepared in accordance
      with the Uniform System of Accounts prescribed by REA for such year (unless
      such
      Member is not required to maintain its accounts in accordance with such Uniform
      System of Accounts), together with the latest similar financial statements
      of
      such Member which have been audited (if not previously furnished) by the
      Independent Accountants who have audited said statements.  The Company
      will also cause each such Member to furnish to it any additional financial
      information as may be required at any time to enable a computation to be made
      of
      the Equity Ratio and the Average Coverage Ratio of such Member, accompanied
      by a
      certificate of an Accountant as to the correctness of such financial
      information.

     

    
      	
              SECTION
                7.06.

            	
              Warranty
                of Title and Authority to
                Pledge.

            

    

     

    The
      Company warrants that, at the date of the subjection to the lien hereof, it
      owns
      and is possessed of all the Pledged Property pledged by it hereunder free and
      clear of all mortgages, pledges, liens, charges and encumbrances, except the
      lien of this Indenture and any liens referred to in the second granting clause
      hereof, and that it has full power and lawful authority to pledge, assign,
      transfer and deliver such Pledged Property in the manner and form aforesaid
      or
      to cause such Pledged Property so to be pledged, assigned, transferred and
      delivered.  Any Mortgage Note pledged hereunder will, at the time of
      delivery to the Trustee, be a genuine and validly outstanding Mortgage Note
      of
      the Member issuing the same, according to the tenor

     

    

    
      
        
          
          

        

        
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    and
      purport thereof.  The Company hereby does and will forever warrant and
      defend the title of the Trustee to Pledged Property pledged by the Company
      for
      the benefit of the Holders for the time being of the Bonds and coupons
      appertaining thereto, if any, against the lawful claims and demands of all
      persons whomsoever.

     

    
      	
              SECTION
                7.07.

            	
              Protection
                of Title; Payment of Taxes; Liens,
                etc.

            

    

     

    The
      Company will:

     

    (1)
      duly and promptly pay and discharge, or cause to be paid and discharged, before
      they become delinquent, all taxes, assessments, governmental and other charges
      lawfully levied, assessed or imposed upon or against any of the Pledged
      Property, including the income or profits therefrom and the interests of the
      Trustee and Bondholders in such Pledged Property;

     

    (2)
      duly observe and conform to all valid requirements of any governmental authority
      imposed upon the Company relative to any of the Pledged Property, and all
      covenants, terms and conditions under or upon which any part thereof is
      held;

     

    (3)
      cause to be paid and discharged all lawful claims (including, without
      limitation, income taxes) which, if unpaid, might become a lien or charge upon
      Pledged Property; and

     

    (4)
      do all things and take all actions necessary to keep the lien of this Indenture
      a first and prior lien upon the Pledged Property and protect its title to the
      Pledged Property against loss by reason of any foreclosure or other proceeding
      to enforce any lien prior to or pari passu with the lien of this
      Indenture.

     

    Nothing
      contained in this Section shall require the payment of any such tax, assessment,
      claim, lien or charge or the compliance with any such requirement so long as
      the
      validity, application or amount thereof shall be contested in good faith;
provided, however, that the Company shall have set aside on
      its books such reserves (segregated to the extent required by generally accepted
      accounting principles) as shall be deemed adequate with respect thereto as
      determined by the Board of Directors as evidenced by a Board
      Resolution.

     

    
      	
              SECTION
                7.08.

            	
              Recordation;
                Opinions of Counsel.

            

    

     

    The
      Company will cause this Indenture, all financing and continuation statements
      with respect thereto and all supplemental indentures to be kept recorded and
      filed in such manner and in such places, if any, as may in the opinion of
      counsel for the Company be required by law in order to preserve and protect
      the
      rights of the Holders of Bonds and any coupons and the Company and will pay
      all
      taxes and fees incidental thereto.  The Company will furnish to the
      Trustee:

     

    (1)
      promptly after the execution and delivery of this Indenture and the execution
      and delivery of each supplemental indenture, an Opinion of Counsel,

     

    (i)
      that in the opinion of such Counsel this Indenture and such supplemental
      indenture, as the case may be, have been properly recorded and filed so as
      to
      make effective the lien intended to be created hereby and thereby, and reciting
      the details of such action, or that in the opinion of such Counsel no such
      action is necessary to make effective such lien, and

     

    

    
      
        
          
          

        

        
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    (ii)
      that any other action required to be taken so as to make such lien so effective
      has been taken, and reciting the details of such action, or that in the opinion
      of such Counsel no such other action is necessary to make such lien so
      effective; and

     

    (2)
      on May 15, 1995 and each May 15 thereafter, so long as any Bonds are
      outstanding, an Opinion of Counsel either stating that in the opinion of such
      Counsel such action has been taken with respect to the recording, filing,
      re-recording, and re-filing of this Indenture as is necessary to maintain the
      lien of this Indenture, and reciting the details of such action, or stating
      that
      in the opinion of such Counsel no such action is necessary to maintain such
      lien.

     

    The
      Company will also cause each Mortgage pledged with the Trustee to be kept,
      recorded and filed in such manner and in such places as may in the opinion
      of
      counsel for the Company or such Member be required by law in order to protect
      and preserve the rights of the Company, and on or before May 15 of each year,
      commencing with 1995, will furnish to the Trustee an Opinion or Opinions of
      Counsel (which may be based on opinions of local counsel accompanying said
      Opinion, certificates of officers of Members as to factual matters and such
      other information deemed by such Counsel to be reliable) stating that such
      action has been taken with respect to the recording, filing, re-recording and
      re-filing of each Mortgage securing a Mortgage Note certified in the most recent
      Certificate of Available Eligible Collateral and still held by the Trustee
      as
      part of the Pledged Property as is necessary to maintain the lien thereof,
      and
      reciting the details of such action, or stating that in the opinion of such
      counsel no such action is necessary to maintain such lien.  Nothing
      herein shall be deemed to create any obligation on the part of the Company
      or
      the Trustee (subject to Section 10.01) to take any further
      recording or filing steps with respect to the rights of the Trustee in or to
      the
      Mortgages, including any recording or filing of the assignment to the Trustee
      of
      any Mortgage, except that the Company shall be obligated to file a financing
      statement with respect to the assignment of its interest in each Mortgage
      pledged with the Trustee in the jurisdictions in which the Company keeps its
      records and in which its principal place of business is located.  The
      Opinion or Opinions of Counsel hereinabove referred to in this paragraph shall
      be accompanied by an Officers’ Certificate stating that no instrument of
      satisfaction of any Mortgage which is then part of the Pledged Property with
      the
      Trustee has been executed by the Company.

     

    
      	
              SECTION
                7.09.

            	
              Further
                Assurances.

            

    

     

    The
      Company will execute and deliver, or cause to be executed and delivered, all
      such additional instruments and do, or cause to be done, all such additional
      acts as (a) may be necessary or proper, consistently with the Granting Clauses
      hereof, to carry out the purposes of this Indenture and to make subject to
      the
      lien hereof any property intended so to be subject, or (b) may be necessary
      or
      proper to transfer to any successor trustee the estate, powers, instruments
      and
      funds held in trust hereunder and to confirm the lien of this Indenture with
      respect to any series of Bonds.  The Company will also cause to be
      filed, registered or recorded any instruments of conveyance, transfer,
      assignment or further assurance in all offices in which such filing, registering
      or recording is necessary to the validity thereof or to give notice
      thereof.

     

    
      	
              SECTION
                7.10.

            	
              Advances
                by Trustee.

            

    

     

    If
      the Company shall fail to perform any of its covenants contained in this
      Indenture, the Trustee may (but shall not be obligated to) make advances to
      perform the same on behalf of the Company, and the Company will repay upon
      demand all sums so advanced, with interest after demand at the highest rate
      of
      interest borne by any Bond then Outstanding.  All sums so advanced,
      with interest as aforesaid, shall be secured by this Indenture and have priority
      to the indebtedness evidenced by the Bonds.  No such advance shall be
      deemed to relieve the Company from any default or Event of Default
      hereunder.

     

    

    
      
        
          
          

        

        
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              SECTION
                7.11.

            	
              Restriction
                on Indebtedness.

            

    

     

    The
      Company will not incur any Superior Indebtedness, or make any optional
      prepayment on any Capital Term Certificate, if, after giving effect thereto,
      (x)
      on the date of such incurrence or making of optional prepayment (the
      determination date) the aggregate principal amount of Superior Indebtedness
      then
      outstanding, less a principal amount of Superior Indebtedness equal to the
      principal amount of Government or Government Insured Obligations held by the
      Company (whether or not pledged with the Trustee), exceeds 20 times the sum
      of
      (i) the aggregate principal amount of Capital Term Certificates outstanding
      on
      the determination date and (ii) the aggregate amount of Members’ equity in the
      Company, other than Capital Term Certificates, on the determination date or
      (y)
      on any given future date the aggregate principal amount of Superior Indebtedness
      outstanding on the determination date which will remain outstanding on such
      given future date, less a principal amount of Superior Indebtedness equal to
      the
      principal amount of Government or Government Insured Obligations held by the
      Company on the determination date which will remain outstanding on such given
      future date, will exceed 20 times the sum of (i) the aggregate principal amount
      of Capital Term Certificates outstanding on the determination date which will
      remain outstanding on such given future date and (ii) the aggregate amount
      of
      Members’ equity in the Company, other than Capital Term Certificates, on the
      determination date.  The respective principal amounts of Superior
      Indebtedness, Capital Term Certificates and Government or Government Insured
      Obligations to be outstanding on such given future date shall be determined
      after giving effect to mandatory sinking fund payments, other mandatory
      prepayments and serial and other maturity payments required to be made on or
      prior to said given future date by the terms of such Superior Indebtedness,
      Capital Term Certificates and Government or Government Insured Obligations
      or
      any indenture or other instrument pursuant to which they are respectively
      issued.  For the purposes of this Section “Government or
      Government Insured Obligations” shall mean (A) obligations of the
      United States of America or any agency thereof issued to promote the purposes
      of
      the Rural Electrification Act of 1936, as from time to time in effect, or any
      similar Act hereafter enacted by the Congress of the United States of America
      and (B) obligations of Members which are guaranteed or insured by the United
      States of America or any agency thereof.

     

    
      	
              SECTION
                7.12.

            	
              Restriction
                on Amendment of Certain
                Instruments.

            

    

     

     

    The
      Company will not enter into any agreement providing for, or consent to, any
      modification, alteration, supplement or amendment of any Mortgage Note or
      Mortgage, except as provided in this Section, Section 4.05, Section
      13.01(b) or Section 13.02(b) and except that this provision shall
      not prevent any modification, alteration, supplement or amendment of any
      Mortgage so long as thereafter such Mortgage will continue to comply with the
      requirements set forth in Schedule I to this Indenture.  To the extent
      permitted by the preceding sentence, the Company may waive compliance with
      provisions in said instruments, either before or after the time when such
      compliance was required, but no such waiver shall extend to or affect such
      provisions except to the extent expressly waived.

     

    
      	
              SECTION
                7.13.

            	
              Maintenance
                of Eligible Collateral.

            

    

     

    The
      Company shall cause the Allowable Amount of Eligible Collateral held by the
      Trustee as Pledged Property at all times to be not less than 100% of the
      aggregate principal amount of the Outstanding Bonds.

     

    On
      July 1 in each calendar year, beginning with 1994, the Company will deliver
      to
      the Trustee a Certificate of Available Eligible Collateral, dated not more
      than
      30 days prior to such delivery, showing that the requirements of the preceding
      paragraph and Subsections (a)(2) and (3) of Section
      3.01 are satisfied; provided, however, that no such
      Certificate need be delivered to the Trustee on any July 1 if a Certificate
      of
      Available Eligible Collateral shall have been delivered in connection with
      the
      authentication and delivery of Bonds or the withdrawal of any part of the
      Pledged Property since the preceding January 1.

     

    

    
      
        
          
          

        

        
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              SECTION
                7.14.

            	
              Restrictions
                on Assignments of Mortgage and Loan
                Agreements.

            

    

     

    Except
      as specifically provided therein, the Company will not assign, transfer or
      otherwise dispose of its interest (or any part thereof) in any Mortgage securing
      any Mortgage Note then held by the Trustee or in any Loan Agreement pursuant
      to
      which such Mortgage Note was issued.

     

    
      	
              SECTION
                7.15.

            	
              Statement
                as to Compliance.

            

    

     

    The
      Company will deliver to the Trustee, within 120 days after the end of each
      fiscal year of the Company, a brief certificate signed by the principal
      executive officer, principal financial officer or principal accounting officer,
      as to his or her knowledge of the Company’s compliance with all the conditions
      and covenants under this Indenture (without regard to any period of grace or
      requirement of notice provided under this Indenture).

     

    The
      Company will promptly deliver to the Trustee an Officers’ Certificate specifying
      the nature, status and period of existence of any Event of Default or any event
      which with notice or lapse of time would become an Event of
      Default.

     

    
      	
              SECTION
                7.16.

            	
              Waiver
                of Certain Covenants.

            

    

     

    The
      Company may omit in any particular instance to comply with any covenant or
      condition set forth in Sections 7.04, 7.07(1), (2) and
(3), 7.11, 7.12, 7.13 and 7.14, if before or after the time
      for such compliance the Holders of at least a majority in principal amount
      of
      the Bonds at the time Outstanding shall, by Act of such Bondholders, either
      waive such compliance in such instance or generally waive compliance with such
      covenant or condition, but no such waiver shall extend to or affect such
      covenant or condition except to the extent so expressly waived, and, until
      such
      waiver shall become effective, the obligations of the Company in respect of
      any
      such covenant or condition shall remain in full force and effect.

     

    ARTICLE
      EIGHT

    REDEMPTION
      OF BONDS

     

    
      	
              SECTION
                8.01.

            	
              Right
                of Redemption.

            

    

     

    The
      Bonds of each series shall be redeemable as set forth in or pursuant to the
      supplemental indenture or Board Resolution creating such series.

     

    
      	
              SECTION
                8.02.

            	
              Applicability
                of Article.

            

    

     

    Redemption
      of Bonds at the election of the Company or otherwise, as permitted or required
      by any provision of this Indenture or any supplemental indenture, shall be
      made
      in accordance with such provision and this Article.

     

    
      	
              SECTION
                8.03.

            	
              Election
                to Redeem; Notice to Trustee.

            

    

     

    The
      election of the Company to redeem any Bonds shall be evidenced by a Board
      Resolution.  In case of any redemption at the election of the Company
      of less than all of the Bonds of any series, the Company shall, at least 45
      days
      prior to the Redemption Date fixed by the Company (unless a shorter notice
      shall
      be satisfactory to the Trustee), notify the Trustee in writing of such
      Redemption Date and of the principal amount of Bonds of such series to be
      redeemed.

     

    

    
      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

    

    

    
      	
              SECTION
                8.04.

            	
              Selection
                by Trustee of Bonds to be
                Redeemed.

            

    

     

    If
      less than all the Bonds of any series are to be redeemed, the particular Bonds
      to be redeemed shall be selected not more than 60 days prior to the Redemption
      Date by the Trustee, from the Outstanding Bonds of such series not previously
      called for redemption, by such method as the Trustee shall deem fair and
      appropriate and which may provide for the selection for redemption of portions
      of the principal of Bonds of a denomination larger than $1,000.  The
      portions of the principal of Bonds so selected for partial redemption shall
      be
      equal to $1,000 or the smallest authorized denomination of the Bonds of such
      series, whichever is greater, or a multiple thereof.

     

    The
      Trustee shall promptly notify the Company in writing of the Bonds selected
      for
      redemption and, in the case of any Bond selected for partial redemption, the
      principal amount thereof to be redeemed.

     

    For
      all purposes of this Indenture, unless the context otherwise requires, all
      provisions relating to the redemption of Bonds shall relate, in the case of
      any
      Bond redeemed or to be redeemed only in part, to the portion of the principal
      of
      such Bond which has been or is to be redeemed.

     

    
      	
              SECTION
                8.05.

            	
              Notice
                of Redemption.

            

    

     

    Notice
      of redemption shall be given in the manner provided in Section 1.06 (i) to
      Holders of Registered Bonds to be redeemed, once not less than 30 nor more
      than
      60 days prior to the Redemption Date; and (ii) to Holders of Bearer Bonds to
      be
      redeemed, once not less than 30 nor more than 60 days prior to the Redemption
      Date.

     

    All
      notices of redemption shall state:

     

    (1)
      the Redemption Date,

     

    (2)
      the Redemption Price and accrued interest, if any,

     

    (3)
      If less than all Outstanding Bonds of any series are to be redeemed, the
      identification (and, in the case of partial redemption, the respective principal
      amounts) of the Bonds to be redeemed,

     

    (4)
      that on the Redemption Date the Redemption Price and accrued interest, if any,
      will become due and payable upon each such Bond, and that interest thereon
      shall
      cease to accrue from and after said date, and

     

    (5)
      the place where such Bonds, together in the case of Bearer Bonds with all
      coupons appertaining thereto, if any, maturing after the Redemption Date, are
      to
      be surrendered for payment of the Redemption Price and accrued interest, if
      any,
      which shall be the office or agency of the Company in the Place of Payment
      for
      the Bonds of the series being redeemed.

     

    Notice
      of redemption of Bonds to be redeemed shall be given by the Company or, upon
      a
      Company Request, by the Trustee in the name and at the expense of the
      Company.

     

    
      	
              SECTION
                8.06.

            	
              Deposit
                of Redemption Price.

            

    

     

    On
      or prior to any Redemption Date, the Company shall deposit with the Trustee
      or
      with a Paying Agent (or, if the Company is acting as its own Paying Agent,
      segregate and hold in trust as provided in

     

    

    
      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

    

    

    Section
      7.03) an amount of money sufficient to pay the Redemption Price and accrued
      interest, if any, of all the Bonds which are to be redeemed on that
      date.

     

    
      	
              SECTION
                8.07.

            	
              Bonds
                Payable on Redemption Date.

            

    

     

    Notice
      of redemption having been given as aforesaid, the Bonds so to be redeemed shall,
      on the Redemption Date, become due and payable at the Redemption Price and
      accrued interest, if any, therein specified and from and after such date (unless
      the Company shall default in the payment of the Redemption Price and such
      accrued interest) such Bonds shall cease to bear interest and the coupons for
      such interest appertaining to any Bearer Bonds so to be redeemed, except to
      the
      extent provided below, shall be void.  Upon surrender of such Bonds
      for redemption, together with all coupons, if any, appertaining thereto maturing
      after the Redemption Date, in accordance with said notice, such Bonds shall
      be
      paid by the Company at the Redemption Price and accrued interest, if any,
      exclusive, however, of installments of interest maturing on the Redemption
      Date
      payment of which shall have been made or duly provided for to the Holders of
      such Bonds registered as such on the relevant Record Dates, or otherwise,
      according to their terms and the provisions of Section 2.09;
provided, however, that installments of interest on Bearer
      Bonds with a Stated Maturity on or before the Redemption Date shall be payable
      only upon presentation and surrender of coupons for such interest at an office
      or agency located outside the United States.

     

    If
      any Bond called for redemption shall not be so paid upon surrender thereof
      for
      redemption, the principal (and premium, if any) shall, until paid, bear interest
      from the Redemption Date at the rate borne by the Bond.

     

    If
      any Bearer Bond surrendered for redemption shall not be accompanied by all
      appurtenant coupons maturing after the Redemption Date, the surrender of such
      missing coupon or coupons may be waived by the Company and the Trustee, if
      there
      be furnished to them such security or indemnity as they may require to save
      each
      of them harmless.  If thereafter the Holder of such Bearer Bond shall
      surrender to any Paying Agent any such missing coupon in respect of which a
      deduction shall have been made from the Redemption Price, such Holder shall
      be
      entitled to receive the amount to be deducted; provided,
however, that interest represented by coupons shall be payable
      only as
      provided in Section 7.02.

     

    
      	
              SECTION
                8.08.

            	
              Bonds
                Redeemed in Part.

            

    

     

    Any
      Registered Bond of any series which is to be redeemed only in part shall be
      surrendered at the Place of Payment for Bonds of such series (with, if the
      Company or the Trustee so requires, due endorsement by, or a written instrument
      of transfer in form satisfactory to the Company and the Trustee duly executed
      by, the Holder thereof or his attorney duly authorized in writing) and the
      Company shall execute and the Trustee shall authenticate and deliver to the
      Holder of such Bond a new Registered Bond or Bonds of the same series, of any
      authorized denomination as requested by such Holder in aggregate principal
      amount equal to and in exchange for the unredeemed portion of the principal
      of
      the Bond so surrendered; provided, that if a Global Bond is so
      surrendered, such new Bond so issued shall be a new Global Bond in a
      denomination equal to the unredeemed portion of the principal of the Global
      Bond
      so surrendered.

     

    ARTICLE
      NINE

    REMEDIES

     

    
      	
              SECTION
                9.01.

            	
              Events
                of Default.

            

    

     

    “Event
      of Default”, wherever used herein, means any one of the following
      events (whatever the reason for such Event of Default and whether it shall
      be
      voluntary or involuntary or be effected by operation

     

    

    
      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

    

    

    of
      law pursuant to a judgment, decree or order of any court or any order, rule
      or
      regulation of any administrative or governmental body):

     

    (1)
      default in the payment of any interest upon any Bond when it becomes due and
      payable, and continuance of such default for a period of 30 days;
      or

     

    (2)
      default in the payment of the principal of (or premium, if any, on) any Bond
      at
      its Maturity; or

     

    (3)
      default in the making of any sinking fund payment provided for, with respect
      of
      Bonds of any series, in or pursuant to any supplemental indenture;
      or

     

    (4)
      default in the performance, or breach, of any covenant of the Company contained
      in Section 7.11, 7.12, 7.13 or 7.14 and
      continuance of such default or breach for a period of 60 days after such default
      has become known to an officer of the Company; or

     

    (5)
      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 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
      principal amount of the Outstanding Bonds, 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

     

    (6)
      the entry of a decree or order by a court having jurisdiction in the premises
      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 the Bankruptcy Code or any other applicable Federal
      or State law or law of the District of Columbia, or appointing a receiver,
      liquidator, assignee, trustee, sequestrate or (or other similar 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

     

    (7)
      the institution by the Company of proceedings to be adjudicated a bankrupt
      or
      insolvent, or the consent by it to the institution of bankruptcy or insolvency
      proceedings against it, or the filing by it of a petition or answer or consent
      seeking reorganization or relief under the Bankruptcy Code or any other
      applicable Federal or State law or law of the District of Columbia, or the
      consent by it to the filing of any such petition or to the appointment of a
      receiver, liquidator, assignee, 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 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.

     

    Upon
      receipt by the Trustee of any Notice of Default pursuant to this Section 9.01,
      (i) with respect to Bonds of a series all or part of which is represented by
      a
      Global Bond or Bonds, the Trustee shall establish a record date, which record
      date shall be at the close of business on the day the Trustee receives such
      Notice of Default, and (ii) with respect to any other series of Bonds issued
      hereunder, the Trustee may, but shall not be obligated to, establish a record
      date, in each case for the purpose of determining Holders of Outstanding Bonds
      of such series entitled to join in such Notice of Default.  The
      Holders on such record date, or their duly designated proxies, and only such
      Persons, shall be entitled to join in such Notice of

     

    

    
      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

    

    

    Default,
      whether or not such Holders remain Holders after such record date;
provided, that unless Holders of at least the requisite principal
      amount (which amount is 25% in the case of subclause (5) of this
Section) of the Outstanding Bonds of such series, or their proxies,
      shall have joined in such Notice of Default prior to the day which is 90 days
      after such record date, such Notice of Default and the Act of Holders, or their
      proxies, joining in such Notice of Default shall automatically and without
      further action by any Holders be cancelled and of no effect.  Nothing
      in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
      (i) after expiration of such 90-day period, a new Notice of Default to the
      same
      effect as that cancelled pursuant to the proviso to the preceding sentence,
      or
      (ii) during any such 90-day period in respect of any Notice of Default with
      respect to a prospective Event of Default with respect to Bonds of such series,
      an additional Notice of Default with respect to any other prospective Event
      of
      Default (other than a prospective Event of Default as to which such a 90-day
      period has not expired) with respect to Bonds of such series, in either of
      which
      events a new record date shall or may, as the case may be, be established
      pursuant to the provisions of this Section 9.01 in respect of such new
      or additional Notice of Default.

     

    
      	
              SECTION
                9.02.

            	
              Acceleration
                of Maturity; Rescission and
                Annulment.

            

    

     

    If
      an Event of Default occurs and is continuing, then and in every such case the
      Trustee or the Holders of not less than 25% in principal amount of the Bonds
      Outstanding may declare the principal of all the Bonds to be due and payable
      immediately, by a notice in writing to the Company (and to the Trustee if given
      by Bondholders), and upon any such declaration such principal shall become
      immediately due and payable.

     

    At
      any time after such a declaration of acceleration 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 and before any sale of the Pledged
      Property, or any part thereof, shall have been made pursuant to any power of
      sale as hereinafter in this Article provided, the Holders of a majority in
      principal amount of the Bonds Outstanding, by written notice, to the Company
      and
      the Trustee, may rescind and annul such declaration and its consequences
      if

     

    (1)
      the Company has paid or deposited with the Trustee a sum sufficient to
      pay

     

    (A)
      all overdue installments of interest on all Bonds,

     

    (B)
      the principal of (and premium, if any, on) any Bonds which have become due
      otherwise than by such declaration of acceleration and interest thereon at
      the
      respective rates borne by the Bonds,

     

    (C)
      to the extent that payment of such interest is lawful, interest upon overdue
      installments of interest at the respective rates borne by the Bonds,
      and

     

    (D)
      all sums due to the Trustee pursuant to Section 10.07;

     

    and

     

    (2)
      all Events of Default, other than the non-payment of the principal of Bonds
      which have become due solely by such acceleration, have been cured or waived
      as
      provided in Section 7.16 or 9.09.

     

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

     

    

    
      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

    

    

    Upon
      receipt by the Trustee of any written notice declaring such an acceleration,
      or
      rescission and annulment thereof, (i) with respect to Bonds of a series all
      or
      part of which is represented by a Global Bond or Bonds, the Trustee shall
      establish a record date, which record date shall be at the close of business
      on
      the day the Trustee receives such notice, and (ii) with respect to any other
      series of Bonds issued under this Indenture, the Trustee may, but shall not
      be
      obligated to, establish a record date, in each case for the purpose of
      determining Holders of Outstanding Bonds of such series entitled to join in
      such
      notice.  The Holders on such record date, or their duly designated
      proxies, and only such Persons, shall be entitled to join in such notice,
      whether or not such Holders remain Holders after such record date; provided,
      that unless such declaration of acceleration, or rescission and annulment,
      as
      the case may be, shall have become effective by virtue of the requisite
      percentage having joined in such notice prior to the day which is 90 days after
      such record date, such notice of declaration of acceleration, or rescission
      and
      annulment, as the case may be, and the Act of Holders, or their proxies, joining
      in such notice shall automatically and without further action by any Holders
      be
      cancelled and of no effect.  Nothing in this paragraph shall prevent a
      Holder, or a proxy of a Holder, of Bonds of any series from giving, (i) after
      expiration of such 90-day period a new written notice of declaration of
      acceleration, or rescission and annulment thereof, as the case may be, to the
      same effect as that cancelled pursuant to the proviso to the preceding sentence,
      or (ii) during any such 90-day period in respect of any written notice of
      declaration of acceleration or rescission and annulment thereof, as the case
      may
      be, with respect to any Event of Default with respect to Bonds of such series,
      an additional written notice of declaration of acceleration, or rescission
      and
      annulment thereof, as the case may be, with respect to any other Event of
      Default (other than an Event of Default as to which such a 90-day period has
      not
      expired) with respect to Bonds of such series, in either of which events a
      new
      record date shall or may, as the case may be, be established pursuant to the
      provisions of this Section 9.02 in respect of such new or additional
      written notice.

     

    
      	
              SECTION
                9.03.

            	
              Trustee’s
                Power of Sale of Pledged Property; Notice Required; Power to Bring
                Suit.

            

    

     

    If
      an Event of Default shall have occurred and be continuing for a period of 30
      days after the Trustee shall have given the Company written notice requiring
      such Event of Default to be remedied, and subject to the provisions of
Sections 9.07 and 9.08, the Trustee, by such officer or agent
      as it may appoint, may:

     

    (1)
      sell, to the extent permitted by law, without recourse, for cash, or credit
      or
      for other property, for immediate or future delivery, and for such price or
      prices and on such terms as the Trustee in its discretion may determine, the
      Pledged Property as an entirety, or in any such portions as the Trustee in
      its
      discretion shall deem expedient in the interest of the Bondholders, (i) at
      private sale after at least 30 days’ written notice to the Company, or as
      otherwise required by law, or (ii) at public sale at some convenient place
      in
      the Borough of Manhattan, City and State of New York, or at such other place
      or
      places as may be required by law, after publishing notice of such public sale
      in
      an Authorized Newspaper in such Borough and in such place or places as may
      be
      required by law, at least once in each of two successive calendar weeks
      preceding such public sale (which notice shall state that such public sale
      will
      be subject to all necessary governmental or statutory approvals and consents),
      and may from time to time adjourn such public sale by announcement at the time
      and place fixed for such sale or for such adjourned sale or sales without
      further notice except such as may be required by law; and/or

     

    (2)
      proceed by one or more suits, actions or proceedings at law or in equity or
      otherwise or by any other appropriate remedy, to enforce payment of the Bonds
      and related coupons or Mortgage Notes which are part of the Pledged Property
      or
      to realize on any collateral security for such Mortgage Notes, or to foreclose
      this Indenture or to sell the Pledged Property under a

     

    

    
      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

    

    

    judgment
      or decree of a court or courts of competent jurisdiction, or by the enforcement
      of any such other appropriate legal or equitable remedy, as the Trustee in
      its
      discretion shall deem most effectual to protect and enforce any of its rights
      or
      powers or any of the rights or powers of the Bondholders.

     

    In
      the event that the Trustee shall deem it advisable to sell any of or all the
      Pledged Property in accordance with the provisions of this Section, the Company
      agrees that if registration of any such Pledged Property shall be required,
      in
      the opinion of counsel for the Trustee, under the Securities Act of 1933 or
      other applicable law, and regulations promulgated thereunder, and if the Company
      shall not effect, or cause to be effected, such registration promptly, the
      Trustee may sell any such Pledged Property at a private sale, and the Company
      and the Bondholders shall not attempt to maintain that the prices at which
      such
      Pledged Property is to be sold are inadequate by reason of the failure to sell
      at public sale, or hold the Trustee liable therefor.

     

    
      	
              SECTION
                9.04.

            	
              Incidents
                of Sale of Pledged Property.

            

    

     

    Upon
      any sale of all or any part of the Pledged Property made either under the power
      of sale given under this Indenture or under judgment or decree in any judicial
      proceedings for foreclosure or otherwise for the enforcement of this Indenture,
      the following shall be applicable:

     

    (1)
      Bonds Due and Payable.  The principal of, and premium, if
      any, and accrued interest on, the Bonds, if not previously due, shall
      immediately become and be due and payable.

     

    (2)
      Trustee Appointed Attorney of Company to Make Conveyances.  The
      Trustee is hereby irrevocably appointed the true and lawful attorney of the
      Company, in its name and stead, to make all necessary deeds, bills of sale
      and
      instruments of assignment, transfer or conveyance of the property thus sold;
      and
      for that purpose the Trustee may execute all such documents and instruments
      and
      may substitute one or more persons with like power; and the Company hereby
      ratifies and confirms all that its said attorneys, or such substitute or
      substitutes, shall lawfully do by virtue hereof.

     

    (3)
      Company to Confirm Sales and Conveyances.  If so requested by
      the Trustee or by any purchaser, the Company shall ratify and confirm any such
      sale or transfer by executing and delivering to the Trustee or to such purchaser
      or purchasers all proper deeds, bills of sale, instruments of assignment,
      conveyance or transfer and releases as may be designated in any such
      request.

     

    (4)
      Bondholders and Trustee May Purchase Pledged Property.  Any
      Bondholder or Holder of a related coupon or the Trustee may bid for and purchase
      any of the Pledged Property, and upon compliance with the terms of sale, may
      hold, retain, possess and dispose of such Pledged Property in their or its
      or
      his own absolute right without further accountability.

     

    (5)
      Purchaser at Sale May Apply Bonds or Coupons to Purchase
      Price.  Any purchaser at any such sale may, in paying the
      purchase price, deliver any of the Bonds or related coupons then Outstanding
      in
      lieu of cash and apply to the purchase price the amount which shall, upon
      distribution of the net proceeds of such sale, after application to the costs
      of
      the action and any other sums which the Trustee is authorized to deduct under
      this Indenture, be payable on such Bonds or related coupons so delivered in
      respect of principal, premium, if any, and interest.  In case the
      amount so payable on such Bonds or coupons shall be less than the amount due
      thereon, duly executed and authenticated Bonds or coupons shall be delivered
      to
      the Holder thereof for the

     

    

    
      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

    

    

    balance
      of the amount due on such Bonds or coupons so delivered by such Holder in
      exchange therefor.

     

    (6)
      Receipt of Trustee Shall Discharge Purchaser.  The receipt of
      the Trustee or of the officer making such sale under judicial proceedings shall
      be a sufficient discharge to any purchaser for his purchase money, and, after
      paying such purchase money and receiving such receipt, such purchaser or his
      personal representative or assigns shall not be obliged to see to the
      application of such purchase money, or be in any way answerable for any loss,
      misapplication or non-application thereof.

     

    (7)
      Sale to Divest Company’s Rights in Property Sold.  Any such
      sale shall operate to divest the Company of all right, title, interest, claim
      and demand whatsoever, either at law or in equity or otherwise, in and to the
      Pledged Property so sold, and shall be a perpetual bar both at law and in equity
      or otherwise against the Company, and its successors and assigns, and any and
      all persons claiming or who may claim the Pledged Property sold or any part
      thereof from, through or under the Company, or its successors and
      assigns.

     

    (8)
      Application of Moneys Received upon Sale.  Any moneys
      collected by the Trustee upon any sale made either under the power of sale
      given
      by this Indenture or under judgment or decree in any judicial proceedings for
      foreclosure or otherwise for the enforcement of this Indenture, shall be applied
      as provided in Section 9.13.

     

    
      	
              SECTION
                9.05.

            	
              Upon
                Default Company Will Pay Principal and Interest upon Demand of
                Trustee.

            

    

     

    In
      case

     

    (1)
      default is made in the payment of any installment of interest on any Bond when
      such interest becomes due and payable and such default continues for a period
      of
      30 days, or

     

    (2)
      default is made in the payment of the principal of (or premium, if any, on)
      any
      Bond at the Maturity thereof, then in any such event, upon demand of the
      Trustee, the Company will pay to the Trustee, for the benefit of the Holders
      of
      the Bonds and coupons, the whole amount then due and payable on all Bonds and
      coupons, for principal, premium, if any, and interest, or any of them, as the
      case may be, with interest at the rates specified in the respective Bonds on
      the
      overdue principal and premium, if any, and (to the extent that payment of such
      interest is legally enforceable) on the overdue Installments of
      interest.  In addition thereto, the Company will pay to the Trustee
      all amounts due to it pursuant to Section 10.07.

     

    
      	
              SECTION
                9.06.

            	
              Judicial
                Proceedings Instituted by
                Trustee.

            

    

     

    (a)
      Trustee May Bring Suit.  In case the Company shall fail to
      pay promptly the amounts required to be paid pursuant to Section 9.05
      upon demand of the Trustee, then the Trustee in its own name, and as trustee
      of
      an express trust, shall be entitled and empowered to institute any suits,
      actions or proceedings at law, in equity or otherwise, to recover judgment
      against the Company or any other obligor on the Bonds and coupons for the whole
      amount due and unpaid, and may prosecute any such claim or proceeding to
      judgment or final decree, and may enforce any such judgment or final decree
      against the Company or any such other obligor and collect the moneys adjudged
      or
      decreed to be payable in any manner provided by law, whether before or after
      or
      during the pendency of any proceedings for the enforcement of the lien of this
      Indenture, or of any of the Trustee’s rights or the rights of the Holders of
      Bonds and coupons under this Indenture, and such power of the Trustee shall
      not
      be affected by any sale hereunder or by the exercise of

     

    

    
      
        
          
          

        

        
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    any
      other right, power or remedy for the enforcement of the provisions of this
      Indenture or for the foreclosure of the lien hereof.

     

    (b)
      Trustee May Recover Unpaid Indebtedness after Sale of Pledged
      Property.  In the case of a sale of the Pledged Property and of
      the application of the proceeds of such sale to the payment of the indebtedness
      secured by this Indenture, the Trustee in its owns name, and as trustee of
      an
      express trust, shall be entitled and empowered, by any appropriate means, legal,
      equitable or otherwise, to enforce payment of, and to receive all amounts then
      remaining due and unpaid upon, all or any of the Bonds or coupons, for the
      benefit of the Holders thereof, and upon any other portion of the indebtedness
      remaining unpaid, with interest as provided in Section
      9.05.

     

    (c)
      Recovery of Judgment Does Not Affect Lien of this Indenture or Other
      Rights.  No recovery of any such judgment or final decree by the
      Trustee and no levy of any execution under any such judgment upon any of the
      Pledged Property, or upon any other property, shall in any manner or to any
      extent affect the lien of this Indenture upon any of the Pledged Property,
      or
      any rights, powers or remedies of the Trustee, or any liens, rights, powers
      or
      remedies of the Holders of Bonds and coupons, but all such liens, rights, powers
      and remedies shall continue unimpaired as before.

     

    (d)
      Trustee May File Proofs of Claim; Appointment of Trustee as Attorney-in-Fact
      in Judicial Proceedings.  The Trustee in its own name, or as
      trustee of an express trust, or as attorney-in-fact for the Holders of Bonds
      and
      coupons, or in any one or more of such capacities (irrespective of whether
      the
      principal of the Bonds shall then be due and payable as therein expressed or
      by
      declaration or otherwise and irrespective of whether the Trustee shall have
      made
      any demand on the Company for the payment of overdue principal, premium (if
      any)
      or interest), shall be entitled and empowered to file such proofs of claim
      and
      other papers or documents as may be necessary or advisable in order to have
      the
      claims of the Trustee and of the Holders of Bonds and coupons (whether such
      claims be based upon the provisions of the Bonds, the coupons, or this
      Indenture) allowed in any equity receivership, insolvency, bankruptcy,
      liquidation, readjustment, reorganization or any other judicial proceedings
      relative to the Company, or any obligor on the Bonds or coupons, the creditors
      of the Company or any such other obligor, any Member, the Pledged Property
      or
      any other property of the Company or any such other obligor and any receiver,
      assignee, trustee, liquidator, sequestrator (or other similar official) in
      any
      such judicial proceeding is hereby authorized by each Holder of Bonds and
      coupons to make such payments to the Trustee and in the event that the Trustee
      shall consent to the making of such payments directly to the Holders of Bonds
      and coupons, to pay to the Trustee any amount due to it pursuant to Section
      10.07.  The Trustee is hereby irrevocably appointed (and the
      successive respective Holders of the Bonds and coupons, by taking and holding
      the same, shall be conclusively deemed to have so appointed the Trustee) the
      true and lawful attorney-in-fact of the respective Bondholders, with authority
      to (i) make and file in the respective names of the Holders of Bonds and coupons
      (subject to deduction from any such claims of the amounts of any claims filed
      by
      any of the Holders of Bonds and coupons themselves), any claim, proof of claim
      or amendment thereof, debt, proof of debt or amendment thereof, petition or
      other document in any such proceedings and to receive payment of any amounts
      distributable on account thereof, (ii) execute any such other papers and
      documents and to do and perform any and all such acts and things for and on
      behalf of such Holders of Bonds and coupons, as may be necessary or advisable
      in
      order to have the respective claims of the Trustee and of the Holders of Bonds
      and coupons against the Company or any such other obligor, the Members, the
      Pledged Property or any other property of the Company or any such other obligor
      allowed in any such proceeding and (iii) receive payment of or on account of
      such claims and debt; provided, however, that nothing
      contained in this Indenture shall be deemed to give to the Trustee any right
      to
      accept or consent to any plan or reorganization or otherwise by action of any
      character in any such proceeding to waive or change in any way any right of
      any
      Holders of Bonds and coupons.  Any moneys collected by the Trustee
      under this Section shall be applied as provided in Section
      9.13.

     

    

    
      
        
          
          

        

        
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    (e)
      Trustee Need Not Have Possession of Bonds or Coupons.  All
      rights of action and of asserting claims under this Indenture or under any
      of
      the Bonds and coupons enforceable by the Trustee may be enforced by the Trustee
      without possession of any of such Bonds and coupons or the production thereof
      on
      the trial or other proceedings relative thereto.

     

    (f)
      Suit To Be Brought for Ratable Benefit of Holders of Bonds and
      Coupons.  Any suit, action or other proceeding at law, in equity
      or otherwise which shall be instituted by the Trustee under any of the
      provisions of this Indenture shall be for the equal, ratable and common benefit
      of all the Holders of Bonds and coupons, subject to the provisions of this
      Indenture.

     

    (g)
      Trustee May Be Restored to Former Position and Rights in Certain
      Circumstances.  In case the Trustee shall have proceeded to
      enforce any right under this Indenture by suit, foreclosure or otherwise and
      such proceedings shall have been discontinued or abandoned for any reason,
      or
      shall have been determined adversely to the Trustee, then in every such case,
      the Company, the Members, any other obligor on the Bonds or coupons and the
      Trustee shall be restored without further act to their respective former
      positions and rights hereunder, and all rights, remedies and powers of the
      Trustee shall continue as though no such proceedings had been
      taken.

     

    
      	
              SECTION
                9.07.

            	
              Bondholders
                May Demand Enforcement of Rights by
                Trustee.

            

    

     

    If
      an Event of Default shall have occurred and shall be continuing, the Trustee
      shall, upon the written request of the holders of a majority in aggregate
      principal amount of the Bonds then Outstanding and upon the offering of
      indemnity as provided in Section 10.03(e), proceed to institute one or
      more suits, actions or proceedings at law, in equity or otherwise, or take
      any
      other appropriate remedy, to enforce payment of the principal of, or premium,
      if
      any, or interest on, the Bonds or coupons or Mortgage Notes which are part
      of
      the Pledged Property or to realize on any collateral security for such Mortgage
      Notes, or to foreclose this Indenture or to sell the Pledged Property under
      a
      judgment or decree of a court or courts of competent jurisdiction or under
      the
      power of sale herein granted, or take such other appropriate legal, equitable
      or
      other remedy, as the Trustee, being advised by counsel, shall deem effectual
      to
      protect and enforce any of the rights or powers of the Trustee or the Holders
      of
      Bonds and coupons, or, in case such Bondholders shall have requested a specific
      method of enforcement permitted hereunder, in the manner requested,
provided that such action shall not be otherwise than in accordance
      with law and the provisions of this Indenture, and the Trustee, subject to
      such
      indemnity provisions, shall have the right to decline to follow any such request
      if the Trustee in good faith shall determine that the suit, proceeding or
      exercise of other remedy so requested would involve the Trustee in personal
      liability or expense.

     

    
      	
              SECTION
                9.08.

            	
              Control
                by Bondholders.

            

    

     

    Subject
      to Section 11.03(e), the Holders of a majority in principal amount of the
      Outstanding Bonds 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 that

     

    (1)
      such direction shall not be in conflict with any rule of law or with this
      Indenture, be unduly prejudicial to Holders not joining in such request or
      involve the Trustee in personal liability or expense (but the Trustee shall
      not
      be obligated to make any determination with respect to such conflict, prejudice
      or liability), and

     

    (2)
      the Trustee may take any other action deemed proper by the Trustee which is
      not
      inconsistent with such direction.

     

    

    
      
        
          
          

        

        
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    Upon
      receipt by the Trustee of any written notice directing the time, method or
      place
      of conducting any such proceeding or exercising any such trust or power, (i)
      with respect to Bonds of a series all or part of which is represented by a
      Global Bond or Bonds, the Trustee shall establish a record date, which record
      date shall be at the close of business on the day the Trustee receives such
      notice, and (ii) with respect to any other series of Bonds issued under this
      Indenture, the Trustee may, but shall not be obligated to, establish a record
      date, in each case for the purpose of determining Holders of Outstanding Bonds
      of such series entitled to join in such notice.  The Holders on such
      record date, or their duly designated proxies, and only such Persons, shall
      be
      entitled to join in such notice, whether or not such Holders remain Holders
      after such record date; provided, that unless the Holders of a majority
      in principal amount of the Outstanding Bonds of such series shall have joined
      in
      such notice prior to the date which is 90 days after such record date, such
      notice and the Act of Holders, or their proxies, joining in such notice shall
      automatically and without further action by any Holders be cancelled and of
      no
      effect.  Nothing in this paragraph shall prevent a Holder, or a proxy
      of a Holder, from giving, (i) after expiration of such 90-day period, a new
      notice to the same effect as that cancelled pursuant to the proviso to the
      preceding sentence, or (ii) during any such 90-day period in respect of any
      notice, a new notice giving directions contrary to or otherwise different from
      such notice in either of which events a new record date shall or may, as the
      case may be, be established pursuant to the provisions of this Section
      9.08 in respect of such new notice.

     

    
      	
              SECTION
                9.09.

            	
              Waiver
                of Past Defaults.

            

    

     

    The
      Holders of not less than a majority in principal amount of the Outstanding
      Bonds
      may on behalf of the Holders of all the Bonds and related coupons waive any
      past
      default hereunder and its consequences, except a default

     

    (1)
      in the payment of the principal of (or premium, if any) or interest on any
      Bonds, or

     

    (2)
      in respect of a covenant or provision hereof which under Article
      Thirteen cannot be modified or amended without the consent of the Holder of
      each Outstanding Bond affected.

     

    Upon
      any such waiver, such default shall cease to exist, and any Event of Default
      arising therefrom shall be deemed to have been cured, for every purpose of
      this
      Indenture; but no such waiver shall extend to any subsequent or other default
      or
      impair any right consequent thereon.

     

    
      	
              SECTION
                9.10.

            	
              Holder
                May Not Bring Suit Except Under Certain
                Conditions.

            

    

     

    A
      Holder of any Bond of any series or any related coupon shall not have the right
      to institute any suit, action or proceeding at law or in equity or otherwise
      for
      the foreclosure of this Indenture, for the appointment of a receiver or for
      the
      enforcement of any other remedy under or upon this Indenture,
unless:

     

    (1)
      such Holder previously shall have given written notice to the Trustee of a
      continuing Event of Default;

     

    (2)
      the Holders of at least 25% in aggregate principal amount of the Bonds then
      Outstanding shall have requested the Trustee in writing to institute such
      action, suit or proceeding and shall have offered to the Trustee indemnity
      as
      provided in Section 10.03(e);

     

    (3)
      the Trustee shall have refused or neglected to institute any such action, suit
      or proceeding for 60 days after receipt of such notice, request and offer of
      indemnity; and

     

    

    
      
        
          
          

        

        
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    (4)
      no direction inconsistent with such written request has been given to the
      Trustee during such 60-day period by the Holders of a majority in principal
      amount of Outstanding Bonds.

     

    It
      is understood and intended that no one or more of the Holders of Bonds or
      coupons shall have any right in any manner whatever hereunder or under the
      Bonds
      or coupons to (i) surrender, impair, waive, affect, disturb or prejudice the
      lien of this Indenture on any Pledged Property or the rights of the Holders
      of
      any other Bonds or coupons, (ii) obtain or seek to obtain priority over or
      preference to any other such Holder or (iii) enforce any right under this
      Indenture, except in the manner herein provided and for the equal, ratable
      and
      common benefit of all the Holders of Bonds or coupons subject to the provisions
      of this Indenture.

     

    
      	
              SECTION
                9.11.

            	
              Undertaking
                To Pay Court Costs.

            

    

     

    All
      parties to this Indenture, and each Holder of any Bond or coupon by his
      acceptance thereof, shall be deemed to have agreed that any court may in its
      discretion require, in any suit, action or proceeding for the enforcement of
      any
      right or remedy under this Indenture, or in any suit, action or proceeding
      against the Trustee for any action taken or omitted by it as Trustee hereunder,
      the filing by any party litigant in such suit, action or proceeding of an
      undertaking to pay the costs of such suit, action or proceeding, and that such
      court may, in its discretion, assess reasonable costs, including reasonable
      attorneys’ fees, against any party litigant in such suit, action or proceeding,
      having due regard to the merits and good faith of the claims or defenses made
      by
      such party litigant; provided, however, that the provisions of
      this Section shall not apply to (a) any suit, action or proceeding instituted
      by
      the Trustee, (b) any suit, action or proceeding instituted by any Bondholder
      or
      group of Bondholders holding in the aggregate more than 10% in aggregate
      principal amount of the Bonds then Outstanding or (c) any suit, action or
      proceeding instituted by any Holder for the enforcement of the payment of the
      principal of, or premium, if any, or interest on, any of the Bonds or coupons,
      on or after the respective due dates expressed therein.

     

    
      	
              SECTION
                9.12.

            	
              Right
                of Holders To Receive Payment Not To Be
                Impaired.

            

    

     

    Anything
      in this Indenture to the contrary notwithstanding, the right of any Holder
      of
      any Bond or coupon to receive payment of the principal of, and premium, if
      any,
      and interest on, such Bond or payment of such coupon, on or after the respective
      due dates expressed in such Bond or coupon (or, in case of redemption, on the
      Redemption Date fixed for such Bond), 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
                9.13.

            	
              Application
                of Moneys Collected by
                Trustee.

            

    

     

    Any
      moneys collected or to be applied by the Trustee pursuant to this Article,
      together with any other moneys which may then be held by the Trustee under
      any
      of the provisions of this Indenture as security for the Bonds and coupons (other
      than moneys at the time required to be held for the payment of specific Bonds
      or
      coupons at Maturity or at a time fixed for the redemption thereof) shall be
      applied in the following order from time to time, on the date or dates fixed
      by
      the Trustee and, in the case of a distribution of such moneys on account of
      principal, premium, if any, or interest, upon presentation of the several
      Outstanding Bonds or coupons, and stamping thereon of payment, if only partially
      paid, and upon surrender thereof, if fully paid:

     

    FIRST:
      to the payment of all taxes, assessments or liens prior to the lien of this
      Indenture, except those subject to which any sale shall have been made, all
      costs and expenses of collection, including the costs and expenses of handling
      the Pledged Property

     

    

    
      
        
          
          

        

        
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    and
      of any sale thereof pursuant to the provisions of this Article and of the
      enforcement of any remedies hereunder or under any Mortgage, and to the payment
      of reasonable compensation to the Trustee, its agents, attorneys and counsel,
      and all expenses, liabilities and advances incurred or made by the Trustee,
      or
      through the Trustee by any Holder or Holders and all other amounts due the
      Trustee under Section 10.07;

     

    SECOND:
      in case the principal of the Bonds or any of them shall not have become due,
      to
      the payment of any interest in default, in the order of the maturity of the
      installments of such interest, with interest at the rates specified in the
      respective Bonds (to the extent that payment of such interest shall be legally
      enforceable) on the overdue installments thereof;

     

    THIRD:
      in case the principal of any of but not all the Bonds shall have become due,
      by
      declaration, upon redemption or otherwise, first to the payment of accrued
      interest in the order of the maturity of the installments thereof with interest
      at the respective rates specified in the Bonds on overdue principal, premium,
      if
      any, and (to the extent that payment of such interest shall be legally
      enforceable) on overdue installments of interest, and next to the payment of
      the
      principal of all Bonds then due;

     

    FOURTH:
      in case the principal of all the Bonds shall have become due, by declaration,
      upon redemption or otherwise, to the payment of the whole amount then due and
      unpaid upon the Bonds then Outstanding and the related coupons for principal,
      premium, if any, and interest, at the rate specified in the respective Bonds
      on
      overdue principal, premium, if any, and (to the extent that payment of such
      interest shall be legally enforceable) on overdue installments of interest,
      and,
      in case such proceeds shall be insufficient to pay in full the whole amount
      so
      due and unpaid, then to the payment of such principal, premium, if any, and
      interest ratably, without discrimination or preference; and

     

    FIFTH:
      in case the principal of all the Bonds shall have become due, by declaration,
      upon redemption or otherwise, and all of such Bonds shall have been fully paid
      together with all interest (including any interest on overdue payments) and
      premium, if any, thereon, any surplus then remaining shall be paid to the
      Company, its successors or assigns, or to whomsoever may be lawfully entitled
      to
      receive the same, or as a court of competent jurisdiction may
      direct;

     

    provided,
      however, that all payments to be made pursuant to this Section shall be
      made ratably to the persons entitled thereto, without discrimination or
      preference.

    

    
      	
              SECTION
                9.14.

            	
              Bonds
                or Coupons Held by Company Not To Share in
                Distribution.

            

    

     

    Any
      Bonds or coupons owned or held by, or for the account or benefit of, the Company
      shall not be entitled to share in any payment or distribution provided for
      in
      this Article, provided that the Trustee shall have no
      liability in respect of such payment or distribution made to any Person entitled
      thereto pursuant to Section 2.10 other than the Company unless a
      Responsible Officer shall have actual knowledge that any such Person holds
      Bonds
      or coupons for the account or benefit of the Company.

     

    
      	
              SECTION
                9.15.

            	
              Waiver
                of Appraisement, Valuation, Stay, Right to
                Marshalling.

            

    

     

    To
      the extent it may lawfully do so, the Company, for itself and for any person
      who
      may claim through or under it, hereby:

     

    

    
      
        
          
          

        

        
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    (1)
      agrees that neither it nor any such person will set up, plead, claim or in
      any
      manner whatsoever take advantage of, any appraisement, valuation, stay,
      extension or redemption laws, now or hereafter in force in any jurisdiction,
      which may delay, prevent or otherwise hinder (i) the performance or enforcement
      or foreclosure of this Indenture, (ii) the sale of any of the Pledged Property,
      or (iii) the putting of the purchaser or purchasers thereof into possession
      of
      such property immediately after the sale thereof;

     

    (2)
      waives all benefit or advantage of any such laws;

     

    (3)
      waives and releases all rights to have the Pledged Property marshaled upon
      any
      foreclosure, sale or other enforcement of this Indenture; and

     

    (4)
      consents and agrees that all the Pledged Property may at any such sale be sold
      by the Trustee as an entirety.

     

    
      	
              SECTION
                9.16.

            	
              Remedies
                Cumulative; Delay or Omission Not a
                Waiver.

            

    

     

    Every
      remedy given hereunder to the Trustee or to any of the Holders of Bonds or
      coupons shall not be exclusive of any other remedy or remedies, and every such
      remedy shall be cumulative and in addition to every other remedy given hereunder
      or now or hereafter given by statute, law, equity or otherwise.  The
      Trustee may (but shall not be obligated to, except pursuant to Section
      9.07 or 9.08) exercise all or any of the powers, rights or
      remedies given to it hereunder or which may be now or hereafter given by
      statute, law or equity or otherwise, in its absolute discretion.  No
      course of dealing between the Company and the Trustee or the Holders of Bonds
      or
      coupons or any delay or omission of the Trustee or of any such Holder to
      exercise any right, remedy or power accruing upon any Event of Default shall
      impair any right, remedy or power or shall be construed to be a waiver of any
      such Event of Default or of any right of the Trustee or of the Holders of Bonds
      and coupons or acquiescence therein, and, subject to the provisions of
Section 9.10, every right, remedy and power given by this Article to
      the Trustee or to the Holders of Bonds and coupons may be exercised from time
      to
      time and as often as may be deemed expedient by the Trustee or by such
      Holders.

     

    ARTICLE
      TEN

    THE
      TRUSTEE

     

    
      	
              SECTION
                10.01.

            	
              Certain
                Duties and Responsibilities.

            

    

     

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

     

    (1)
      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

     

    (2)
      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 (other than with respect to the Opinions of Counsel
      referred to in Section 3.01(b)(5)), the Trustee shall be under a duty
      to examine the same to determine whether or not they conform to the requirements
      of this Indenture.

     

    

    
      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      

    

    

    (b)
      In case an Event of Default has occurred and is continuing, the Trustees hall
      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

     

    (1)
      this Subsection shall not be construed to limit the effect of Subsection
      (a) of this Section;

     

    (2)
      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;

     

    (3)
      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
      a majority in principal amount of the Outstanding Bonds 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; and

     

    (4)
      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.

     

    (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.

     

    
      	
              SECTION
                10.02.

            	
              Notice
                of Defaults.

            

    

     

    Within
      90 days after the occurrence of any default hereunder, the Trustee shall
      transmit by mail to all Bondholders entitled to receive reports pursuant to
      Section 11.03, 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 Bond or in the payment
      of
      any sinking fund installment, 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 and/or Responsible Officers of the Trustee in
      good
      faith determine that the withholding of such notice is in the interests of
      the
      Bondholders; and provided, further, that in the case of any
      default of the character specified in Section 9.01(5) no such notice to
      Bondholders shall be given until at least 60 days after the occurrence
      thereof.  For the purpose of this Section the term
“default” means any event which is, or after notice or lapse of
      time or both would become, an Event of Default.

     

    
      	
              SECTION
                10.03.

            	
              Certain
                Rights of Trustee.

            

    

     

    Except
      as otherwise provided in Section 10.01:

     

    (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,

     

    

    
      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      

    

    

    bond,
      debenture 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 a Company Request or Company Order 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 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
      of any Bonds or of any related coupons 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;

     

    (f)
      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, bond, debenture or other
      paper or document, or to recompute, verify, reclassify or recalculate any
      information contained therein, but the Trustee, in its discretion, may make
      such
      further inquiry or investigation into such facts or matters as it may see fit,
      and, if the Trustee shall determine to make such further inquiry or
      investigation, it shall be entitled to examine the books, records and premises
      of the Company, personally or by agent or attorney;

     

    (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; and

     

    (h)
      Except with respect to Section 7.01, the Trustee shall have no duty to
      inquire as to the performance of the Company’s covenants in Article 7
      hereof.  In addition, the Trustee shall not be deemed to have
      knowledge of any Event of Default or event which with notice or lapse of time
      or
      both will become an Event of Default (a “Default”) except (i)
      any Event of Default occurring pursuant to Sections 9.01(1),
9.01(2) and 7.01, or (ii) any Default or Event of Default of
      which the Trustee shall have received written notification or obtained actual
      knowledge.

     

    
      	
              SECTION
                10.04.

            	
              Not
                Responsible for Recitals or Issuance of
                Bonds.

            

    

     

    The
      recitals contained herein and in the Bonds and in any coupons, except the
      certificates of authentication, shall be taken as the statements of the Company,
      and the Trustee assumes no responsibility for their correctness.  The
      Trustee makes no representations as to the validity or sufficiency of this
      Indenture, the Bonds, the coupons or the lien of this Indenture in respect
      of
      Pledged Property.  The Trustee shall not be accountable for the use or
      application by the Company of Bonds or the proceeds thereof.

     

    
      
        	
                SECTION
                  10.05.

              	
                May Hold Bonds.

              

      

       

      The
        Trustee, any Paying Agent, Bond Registrar or any other agent of the Company
        or
        the Trustee, in its individual or any other capacity, may become the owner
        or
        pledgee of Bonds and coupons may otherwise deal with the Company with the
        same
        rights it would have if it were not Trustee, Paying Agent, Bond Registrar
        or
        such other agent.

    

    

    
      
        
          
          

        

        
          64

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
                10.06.

            	
              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 have no
      liability to pay interest on or invest (except as herein expressly provided)
      any
      such moneys.

     

    
      	
              SECTION
                10.07.

            	
              
                Compensation
                  and Reimbursement.

              

            

    

     

    The
      Company agrees

     

    (1)
      to pay to the Trustee from time to time reasonable compensation for all services
      rendered by it hereunder (which compensation shall not be limited by any
      provision of law in regard to the compensation of a trustee of an express
      trust);

     

    (2)
      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 to the extent any such expense, disbursement or advance may
      be
      attributable to its negligence or bad faith; and

     

    (3)
      to indemnify the Trustee for, and to defend and 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 this
      trust or the performance of its duties hereunder, including the costs and
      expenses of defending itself against any claim or liability in connection with
      the exercise or performance of any of its powers or duties hereunder, except
      to
      the extent such loss, liability or expense may be attributable to its negligence
      or bad faith.

     

    As
      security for the performance of the obligations of the Company under this
      Section the Trustee shall have a lien prior to the Bonds and any coupons upon
      all property and funds held or collected by the Trustee as such, except funds
      held in trust for the payment of principal of (and premium, if any) or interest
      on particular Bonds.  “Trustee” for purposes of this
      Section shall include any predecessor trustee but the negligence or bad faith
      of
      any such Trustee shall not affect the rights under this Section of any other
      such Trustee.

     

    
      	
              SECTION
                10.08.

            	
              Disqualification;
                Conflicting Interests.

            

    

     

    Reference
      is made to TIA Section 310(b); for purposes of TIA Section 310(b)(1), no
      conflicting interest shall be deemed to arise by being Trustee hereunder for
      Bonds of more than one series.

     

    
      	
              SECTION
                10.09.

            	
              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 or of any
      State, authorized under such laws to exercise corporate trust powers, having
      a
      combined capital and surplus of at least $50,000,000, subject to

     

    

    
      
        
          
          

        

        
          65

          
            

          

        

        
          
          

        

      

    

    

    supervision
      or examination by Federal or State authority.  If such corporation
      publishes reports of condition at least annually, pursuant to law or to the
      requirements of the aforesaid supervising or examining authority, then for
      the
      purposes of this Section, 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.  Neither the Company nor any
      Person directly or indirectly controlling, controlled by or under common control
      with the Company shall serve as Trustee hereunder.  If at any time the
      Trustee shall cease to be eligible in accordance with the provisions of this
      Section, it shall resign immediately in the manner and with the effect
      hereinafter specified in this Article.

     

    
      	
              SECTION
                10.10.

            	
              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 shall become effective until the acceptance
      of
      appointment by the successor Trustee under Section 10.11.

     

    (b)
      The Trustee may resign at any time by giving written notice thereof to the
      Company.  If an instrument of acceptance by a successor Trustee shall
      not have been delivered to the Trustee within 30 days after the giving of such
      notice of 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 Act of the Holders of a majority
      in
      principal amount of the Outstanding Bonds, delivered to the Trustee and to
      the
      Company.

     

    (d)
      If at any time:

     

    (1)
      the Trustee shall fail to comply with TIA Section 310(b),

     

    (2)
      the Trustee shall cease to be eligible under Section 10.09 and shall
      fail to resign after written request therefor by the Company or by any bona
      fide
      Holder of a Bond for at least six months, or

     

    (3)
      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, (i) the Company by a Board Resolution
      may
      remove the Trustee, or (ii) subject to Section 9.11, any Bondholder who
      has been a bona fide Holder of a Bond for at least 6 months may, on behalf
      of
      himself and all others similarly situated, petition any court of competent
      jurisdiction for the removal of the Trustee and the appointment of a successor
      Trustee.

     

    (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.  If,
      within 1 year after such resignation, removal or incapability, or the occurrence
      of such vacancy, a successor Trustee shall be appointed by Act of the Holders
      of
      a majority in principal amount of the Outstanding Bonds delivered to the Company
      and the retiring Trustee, the successor Trustee so appointed shall, forthwith
      upon its acceptance of such appointment, 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 Bondholders
      and accepted appointment in the manner hereinafter provided, any Bondholder
      who
      has been a bona fide Holder of a Bond for at least 6 months may, on
      behalf

     

    
      
        
          
          

        

        
          66

          
            

          

        

        
          
          

        

      

    

    

    of
      himself 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 the Holders of Registered
      Bonds as their names and addresses appear in the Bond Register and to the
      Holders of Bearer Bonds in the manner set forth in Section
      1.06.  Each notice shall include the name of the successor
      Trustee and the address of its Corporate Trust Office.

     

    
      	
              SECTION
                10.11.

            	
              Acceptance
                of Appointment by Successor.

            

    

     

    Every
      successor Trustee appointed hereunder 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 request of the Company or the successor
      Trustee, such retiring Trustee shall, upon payment of its charges, 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, subject nevertheless to its lien, if any, provided for in
      Section 10.07.  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.

     

    No
      successor Trustee shall accept its appointment unless at the time of such
      acceptance such successor Trustee shall be qualified under TIA Section 310(b)
      and eligible under Section 10.09 hereof.

     

    
      	
              SECTION
                10.12.

            	
              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 of the corporate trust business of the
      Trustee, shall be the successor of the Trustee hereunder, provided such
      corporation shall be otherwise qualified under TIA Section 310(b) and eligible
      under Section 10.09 hereof without the execution or filing of any paper
      or any further act on the part of any of the parties hereto.  In case
      any Bonds 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 Bonds
      so
      authenticated with the same effect as if such successor Trustee had itself
      authenticated such Bonds.

     

    
      	
              SECTION
                10.13.

            	
              Preferential
                Collection of Claims Against
                Company.

            

    

     

    Reference
      is made to TIA Section 311, for the purposes of which:

     

    (1)
      The term “cash transaction” means any transaction in which full
      payment for goods or securities sold is made within 7 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.

     

    (2)
      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,

     

    
      
        
          
          

        

        
          67

          
            

          

        

        
          
          

        

      

    

    

    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.

     

    
      	
              SECTION
                10.14.

            	
              Appointment
                of Authenticating Agent.

            

    

     

    The
      Trustee may appoint an Authenticating Agent or Agents with respect to one or
      more series of Bonds which shall be authorized to act on behalf of the Trustee
      to authenticate Bonds of such series issued upon original issue or upon
      exchange, registration of transfer or partial redemption thereof or pursuant
      to
Section 2.08, and Bonds 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 Bonds by the Trustee
      or
      the Trustee’s 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
      having a combined capital and surplus of not less than the equivalent of
      $50,000,000 and subject to supervision or examination by Federal or State
      authority or the equivalent foreign authority, in the case of an Authenticating
      Agent who is not organized and doing business under the laws of the United
      States of America, any State thereof or the District of Columbia.  If
      such Authenticating Agent publishes reports of conditions at least annually,
      pursuant to law or to the requirements of said supervising or examining
      authority, then for the purposes of this Section, 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, such Authenticating
      Agent shall resign immediately in the manner and with the effect specified
      in
      this Section.

     

    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 to the corporate agency or corporate trust
      business of such Authenticating Agent, shall continue to be an Authenticating
      Agent; provided such corporation shall be otherwise eligible under this
      Section, without the execution or filing of any paper or any further act on
      the
      part of the Trustee or such 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, 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 of
      Registered Bonds, if any, of the series with respect to which such
      Authenticating Agent will serve, as their names and addresses appear in the
      Bond
      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.

    
      
        
          
          

        

        
          68

          
            

          

        

        
          
          

        

      

    

    

    The
      Trustee agrees to pay to each Authenticating Agent from time to time reasonable
      compensation for its services under this Section, and the Trustee shall be
      entitled to be reimbursed for such payments, subject to the provisions of
Section 10.07.

     

    If
      an appointment with respect to one or more series is made pursuant to this
      Section, the Bonds of such series may have endorsed thereon, in addition to
      the
      Trustee’s certificate of authentication, an alternative certificate of
      authentication in the following form:

     

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

     

    [full
      name of Trustee]

    

    
________________________________

    As
      Trustee

    

    By

    ________________________________

    As
      Authenticating Agent

    

    By

    ________________________________

    Authorized
      [Officer]
      [Signatory]

    

    If
      all of the Bonds of a series may not be originally issued at one time, and
      if
      the Trustee does not have an office capable of authenticating Bonds upon
      original issuance located in a Place of Payment or other place where the Company
      wishes to have Bonds of such series authenticated upon original issuance, the
      Trustee, if so requested by the Company in writing (which writing need not
      comply with Section 1.02 and need not be accompanied by an Opinion of
      Counsel), shall appoint in accordance with this Section an Authenticating Agent
      (which may be an Affiliate of the Company if eligible to be appointed as an
      Authenticating Agent hereunder) having an office in such Place of Payment or
      other place designated by the Company with respect to such series of
      Bonds.

     

    ARTICLE
      ELEVEN

    BONDHOLDERS'
      LISTS AND REPORTS BY TRUSTEE AND COMPANY

     

    
      	
              SECTION
                11.01.

            	
              Company
                to Furnish Trustee Names and Addresses of
                Bondholders.

            

    

     

    The
      Company will furnish or cause to be furnished to the Trustee semiannually,
      between January 15 and January 30, inclusive, and between July 15 and July
      30,
      inclusive, in each year, and at such other times as the Trustee may request
      in
      writing, within 30 days after receipt by the Company of any such request, a
      list, in such form as the Trustee may reasonably require, of the names and
      address of the Holders of Bonds, in each case as of a date not more than 15
      days
      prior to the time such list is furnished; provided, however, that so long as
      the
      Trustee is the Bond Registrar, no such list need be furnished with respect
      to
      the Holders of Registered Bonds.

     

    
      	
              SECTION
                11.02.

            	
              Preservation
                of Information; Communications to
                Bondholders.

            

    

     

    (a)
      The Trustee shall preserve, in as current a form as is reasonably practicable,
      the names and addresses of Holders of Bonds (i) contained in the most recent
      list furnished to the Trustee as provided in

     

    
      
        
          
          

        

        
          69

          
            

          

        

        
          
          

        

      

    

    

    Section
      11.01, (ii) received by the Trustee in its capacity as Bond Registrar (if
      it is then serving as such); and (iii) filed with it within the two preceding
      years for the purpose of receiving reports pursuant to
Section 11.03.  The Trustee may destroy any
      list furnished to it as provided in Section 11.01 upon receipt of a new
      list so furnished, and may destroy any information filed with it for the purpose
      of receiving reports pursuant to Section 11.03 two years after such
      filing.

     

    (b)
      If 3 or more Holders of Bonds (hereinafter referred to as
“applicants”) apply in writing to the Trustee, and furnish to
      the Trustee reasonable proof that each such applicant has owned a Bond for
      a
      period of at least 6 months preceding the date of such application, and such
      application states that the applicants desire to communicate with other Holders
      of Bonds with respect to their rights under this Indenture or under the Bonds
      and is accompanied by a copy of the form of proxy or other communication which
      such applicants propose to transmit, then the Trustee shall, within 5 business
      days after the receipt of such application, at its election, either

     

    (i)
      afford such applicants access to the information preserved at the time by the
      Trustee in accordance with Section 11.02(a), or

     

    (ii)
      inform such applicants as to the approximate number of Holders of Bonds whose
      names and addresses appear in the information preserved at the time by the
      Trustee in accordance with Section 11.02(a), and as to the approximate cost
      of
      mailing to such Bondholders the form of proxy or other communication, if any,
      specified in such application.

     

    If
      the Trustee shall elect not to afford such applicants access to such
      information, the Trustee shall, upon the written request of such applicants,
      mail to each Bondholder whose name and address appear in the information
      preserved at the time by the Trustee in accordance with Section
      11.02(a), a copy of the form of proxy or other communication which is
      specified in such request, with reasonable promptness after a tender to the
      Trustee of the material to be mailed and of payment, or provision for the
      payment, of the reasonable expenses of mailing, unless within 5 days after
      such
      tender, the Trustee shall mail to such applicants and file with the Commission,
      together with a copy of the material to be mailed, a written statement to the
      effect that, in the opinion of the Trustee, such mailing would be contrary
      to
      the best interests of the Holders of Bonds or would be in violation of
      applicable law.  Such written statement shall specify the basis of
      such opinion.  If the Commission, after opportunity for a hearing upon
      the objections specified in the written statement so filed, shall enter an
      order
      refusing to sustain any of such objections or if, after the entry of an order
      sustaining one or more of such objections, the Commission shall find, after
      notice and opportunity for hearing, that all the objections so sustained have
      been met and shall enter an order so declaring, the Trustee shall mail copies
      of
      such material to all such Bondholders with reasonable promptness after the
      entry
      of such order and the renewal of such tender; otherwise the Trustee shall be
      relieved of any obligation or duty to such applicants respecting their
      application.

     

    (c)
      Every Holder of Bonds or coupons, by receiving and holding the same, agrees
      with
      the Company and the Trustee that neither the Company nor the Trustee shall
      be
      held accountable by reason of the disclosure of any such information as to
      the
      names and addresses of the Holders of Bonds in accordance with Section
      11.02(b), regardless of the source from which such information was derived,
      and that the Trustee shall not be held accountable by reason of mailing any
      material pursuant to a request made under Section
      11.02(b).

     

    
      
        	
                SECTION
                  11.03

              	Reports by Trustee.

      

       

      The
        Trustee shall transmit any reports required pursuant to TIA Section 313(a)
        within 60 days after each May 15, commencing May 15, 1994, dated as of such
        May
        15.  Reference is made to TIA Section 313(d); the Company will notify
        the Trustee in writing when any Bonds are listed on any stock
        exchange.

       

      
        	
                SECTION
                  11.04.

              	
                Reports
                  by Company.

              

      

       

      The
        Company will

       

      (1)
        file with the Trustee, within 15 days after the Company is required to file
        the
        same with the Commission, copies of the annual reports and of the information,
        documents and other reports (or copies of such portions of any of the foregoing
        as 

    

    
      
        
          
          

        

        
          70

          
            

          

        

        
          
          

        

      

    

     

    the
      Commission may from time to time by rules and regulations prescribe) which
      the
      Company may be required to file with the Commission pursuant to Section 13
      or
      Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is
      not
      required to file information, documents or reports pursuant to either of said
      Sections, then it will file with the Trustee and the Commission, in accordance
      with rules and regulations prescribed from time to time by the Commission,
      such
      of the supplementary and periodic information, documents and reports which
      may
      be required pursuant to Section 13 of the Securities Exchange Act of 1934 in
      respect of a security listed and registered on a national securities exchange
      as
      may be prescribed from time to time in such rules and regulations;

     

    (2)
      file with the Trustee and the Commission, in accordance with rules and
      regulations prescribed from time to time by the Commission, such additional
      information, documents and reports with respect to compliance by the Company
      with the conditions and covenants of this Indenture as may be required from
      time
      to time by such rules and regulations; and

     

    (3)
      transmit by mail to all Bondholders, within 30 days after the filing thereof
      with the Trustee, in the manner and to the extent provided in TIA Section 313(c)
      with respect to reports pursuant to Section 11.03 hereof, such
      summaries of any information, documents and reports required to be filed by
      the
      Company pursuant to paragraphs (1) and (2) of this Section
      11.04 as may be required by rules and regulations prescribed from time to
      time by the Commission.

     

    ARTICLE
      TWELVE

    CONSOLIDATION,
      MERGER, CONVEYANCE, TRANSFER OR LEASE

     

    
      	
              SECTION
                12.01.

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

            

    

     

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

     

    (1)
      the corporation formed by such consolidation or into which the Company is merged
      or the Person which acquires by conveyance or transfer 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 the Bonds and the performance of every covenant of this
      Indenture on the part of the Company to be performed or observed;

     

    
      (2)
        immediately after giving effect to such transaction, no Event of Default,
        and no
        event which, after notice or lapse of time, or both, would become an Event
        of
        Default, shall have happened and be continuing; and

       

      (3)
        the Company shall have delivered to the Trustee an Officers’ Certificate and an
        Opinion of Counsel each stating that such consolidation, merger, conveyance
        or
        transfer and such supplemental indenture comply with this Article and that
        all
        conditions precedent herein provided for relating to such transaction have
        been
        complied with.

       

      
        	
                SECTION
                  12.02.

              	
                Successor
                  Corporation Substituted.

              

      

       

      Upon
        any consolidation or merger, or any conveyance or transfer of the properties
        and
        assets of the Company substantially as an entirety in accordance with
Section 12.01, the successor corporation formed by such consolidation
        or into which the Company is merged or to which such conveyance or transfer
        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
        instrument or any successor corporation which shall theretofore have become
        such
        in the manner prescribed in this Article from its liability as obligor and
        maker
        on any of the Bonds.

    
      
        
          
          

        

        
          71

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
                12.03.

            	
              Limitation
                on Lease of Properties as
                Entirety.

            

    

     

    The
      Company shall not lease its properties and assets substantially as an entirety
      to any Person.

     

    ARTICLE
      THIRTEEN

    SUPPLEMENTAL
      INDENTURES; AMENDMENT OF PLEDGED PROPERTY

     

    
      	
              SECTION
                13.01.

            	
              Supplemental
                Indentures and Amendments of Certain Pledged Property Without Consent
                of
                Bondholders.

            

    

     

    (a)
      Without the consent of the Holders of any Bonds or coupons, the Company, when
      authorized by a Board Resolution, and the Trustee, at any time and from time
      to
      time, may enter into one or more indentures supplemental hereto, in form
      satisfactory to the Trustee, for any of the following purposes:

     

    (1)
      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 Bonds contained; or

     

    (2)
      to add to the covenants of the Company, for the benefit of the Holders of the
      Bonds or any coupons, or to surrender any right or power herein conferred upon
      the Company; or

     

    (3)
      to add to or change any of the provisions of this Indenture to provide that
      Bearer Bonds may be registrable as to principal, to change or eliminate any
      restrictions on the payment of principal on Registered Bonds or of principal
      or
      any interest on Bearer Bonds or on the delivery of Bearer Bonds, or to permit
      Registered Bonds to be exchanged for Bearer Bonds, provided any such action
      shall not adversely affect the interest of the Holders of Bonds of any series
      or
      any related coupons in any material respect; or

     

    (4)
      to convey, transfer and assign to the Trustee, and to subject to the lien of
      this Indenture, with the same force and effect as though included in the
      Granting Clauses hereof, additional

     

    
      
        
          
          

        

        
          72

          
            

          

        

        
          
          

        

      

    

    

    properties
      of the Company, and to correct or amplify the description of any property at
      any
      time subject to the lien of this Indenture; or

     

    (5)
      to provide for the creation of any series of Bonds as provided in Article
      Two; or

     

    (6)
      to add to or change any of the provisions of this Indenture to such extent
      as
      shall be necessary to facilitate the issuance of Bonds in bearer form,
      registrable or not registrable as to principal, and with or without interest
      coupons; to change or eliminate any restrictions on the manner or place of
      payment of principal of or any premium or interest on Bearer Bonds, to permit
      Bearer Bonds to be issued in exchange for Registered Bonds, to permit Bearer
      Bonds to be issued in exchange for Bearer Bonds of other authorized
      denominations (to the extent permitted by law); provided that any such addition
      or change shall not adversely affect the interests of the Holders of Bonds
      of
      any series or any related coupons in any material respect; or

     

    (7)
      to provide for the issuance of uncertificated Bonds, original issue discount
      Bonds, and Bonds payable in foreign currencies of one or more series;
      or

     

    (8)
      if allowed under applicable laws and regulations to permit payment in the United
      States of America (including any of the states and the District of Columbia),
      its territories, its possessions and other areas subject to its jurisdiction,
      of
      principal, premium or interest on Bearer Bonds or coupons, if any;
      or

     

    (9)
      to modify, eliminate or add to the provisions of this Indenture to such extent
      as shall be necessary to continue the qualification of this Indenture (including
      any supplemental indenture) under the TIA, or under any similar federal statute
      hereafter enacted, and to add to this Indenture such other provisions as may
      be
      expressly permitted by the TIA, excluding, however, the provisions
      referred to in Section 316(a)(2) of the TIA as in effect at the date as of
      which
      this instrument was executed or any corresponding provision in any similar
      federal statute hereafter enacted; or

     

    (10)
      to cure any ambiguity, to correct or supplement any provision herein which
      may
      be defective or inconsistent with any other provision herein, or to make any
      other provisions with respect to matters or questions arising under this
      Indenture, provided such action shall not adversely affect the interest
      of the Holders of the Bonds of any series or any related coupons in any material
      respect; or

     

    (11)
      to provide for Mortgage Notes, Mortgages and/or Loan Agreements to be deposited
      with a depositary or an agency and/or to permit the addition to and withdrawal
      from the Pledged Property of such Mortgage Notes, Mortgages and/or Loan
      Agreements to be evidenced by a “book-entry” or other notation not requiring
      physical delivery of such instruments.

     

    (b)
      Without the consent of the Holders of any Bonds or coupons, the parties to
      any
      Mortgage Note, Mortgage or Loan Agreement may, at any time and from time to
      time, modify, alter, supplement or amend such Mortgage Note, Mortgage or Loan
      Agreement in any of the following respects:

     

    (1)
      to add to the covenants and agreements of the Member contained in any such
      instrument, other covenants and agreements thereafter to be observed, or to
      surrender any right or power therein reserved to or conferred upon any such
      Member; or

     

    

    
      
        
          
          

        

        
          73

          
            

          

        

        
          
          

        

      

    

    

    (2)
      to cure any ambiguity, to correct or supplement any provision therein which
      may
      be inconsistent with any other provision therein, or to make any other
      provisions with respect to matters or questions arising under any such
      instrument, provided such action shall not adversely affect the
      interest of the Holders of the Bonds or any related coupon in any material
      respect; or

     

    (3)
      to give effect to the provisions of Section 4.05; or

     

    (4)
      to amend or supplement any Mortgage, so long as thereafter such Mortgage will
      comply with the requirements of Schedule I annexed hereto as such Schedule
      may
      be amended in accordance with Section 13.02(b), or amend or supplement
      any Mortgage Note or Loan Agreement in any manner not inconsistent with the
      provisions of this Indenture; or

     

    (5)
      to amend or supplement any Mortgage to secure the evidence of a loan from a
      lender or lenders other than the Company in accordance with a provision in
      such
      Mortgage.

     

    It
      shall not be necessary to obtain any consent from the Trustee with regard to
      any
      action taken pursuant to this Subsection.  The Trustee shall execute
      any instrument requested in a Company Request for the purpose of confirming
      such
      action, upon receipt by the Trustee of an Officers’ Certificate and an Opinion
      of Counsel each stating that the action taken was authorized by this Indenture
      and that the execution of such instrument is appropriate to confirm such
      action.

     

    
      	
              SECTION
                13.02.

            	
              Supplemental
                Indentures and Amendments of Certain Pledged Property With Consent
                of
                Bondholders.

            

    

     

    (a)
      With the consent of the Holders of not less than a majority in principal amount
      of the Outstanding Bonds, by Act of said Holders delivered to the Company and
      the Trustee, the Company, when authorized by a Board Resolution, and the Trustee
      may 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 modifying in any manner the rights of the
      Holders of the Bonds and any related coupons under this Indenture;
provided, however, that no such supplemental indenture shall,
      without the consent of the Holder of each Outstanding Bond or coupon affected
      thereby,

     

    (1)
      change the Stated Maturity of the principal of, or any installment of interest
      on, any Bond or coupon, or reduce the principal amount thereof or the interest
      thereon or any premium payable upon the redemption thereof, or change the coin
      or currency in which any Bond or coupon or the interest thereon is payable,
      or
      impair the right to institute suit for the enforcement of any such payment
      on or
      after the Stated Maturity thereof (or, in the case of redemption, on or after
      the Redemption date), or

     

    (2)
      permit the creation of any lien prior to or pari passu with the lien of this
      Indenture with respect to any of the Pledged Property, or terminate the lien
      of
      this Indenture on any Pledged Property (except in each case as permitted by,
      and
      pursuant to, this Indenture) or deprive any Holder of any Bond or any related
      coupon of the security afforded by the lien of this Indenture (except as in
      this
      Indenture permitted), or

     

    (3)
      reduce the percentage in principal amount of the Outstanding Bonds, the consent
      of whose Holders is required for any such supplemental indenture, or the consent
      of whose Holders is required for any waiver (of compliance with certain
      provisions of this Indenture or certain defaults hereunder and their
      consequences) provided for in this Indenture, or

     

    

    
      
        
          
          

        

        
          74

          
            

          

        

        
          
          

        

      

    

    

    (4)
      modify any of the provisions of this Section, Section 7.16 or
Section 9.09, except to increase any such percentage or to provide
      that
      certain other provisions of this Indenture cannot be modified or waived without
      the consent of the Holder of each Bond or coupon affected thereby.

     

    (b)
      With the consent of the Holders of not less than a majority in principal amount
      of the Outstanding Bonds, by Act of said Holders delivered to the Company and
      the Trustee, the parties to any Mortgage Note or Mortgage (including the Trustee
      as assignee thereof) or Loan Agreement may, at any time and from time to time,
      modify, alter, supplement or amend any such Mortgage Note, Mortgage or Loan
      Agreement (including Schedule I hereto annexed as applied to any Mortgage used
      or to be used in a particular instance) in any manner or in any respect;
provided, however, that no such modification, alteration,
      supplement or amendment shall, without the consent of the Holder of each
      Outstanding Bond or coupon affected thereby,

     

    (1)
      reduce the principal amount of any Mortgage Note or impair the right to
      institute suit for the enforcement of payment of such principal amount on or
      after the maturity thereof, or

     

    (2)
      permit the creation of any lien prior to or pari passu with the lien of
      this Indenture with respect to any of the Pledged Property or terminate the
      lien
      of this Indenture on any Pledged Property (except in each case as permitted
      by,
      and pursuant to, the terms of this Indenture) or deprive any Holder of any
      Bond
      or related coupon of the security afforded by the lien of this Indenture (except
      as in this Indenture permitted), or

     

    (3)
      reduce the percentage and principal amount of Outstanding Bonds, the consent
      of
      whose Holders is required for any such modification, alteration, supplement
      or
      amendment.

     

    Upon
      receipt by the Trustee of a Company Request, Board Resolution, Officers’
Certificate and Opinion of Counsel to the effects set forth in the last
      paragraph of Section 13.01(b) and evidence of the Act of said Holders,
      the Trustee shall join in the execution of such supplemental indenture or other
      instrument, as the case may be, subject to the provisions of Section
      13.03.

     

    It
      shall not be necessary for any Act of Bondholders under this Section to approve
      the particular form of any proposed supplemental indenture or of any proposed
      modification of the instruments referred to in the foregoing Subsection
      (b), but it shall be sufficient if such Act shall approve the substance
      thereof.

     

    
      	
              SECTION
                13.03.

            	
              Execution
                of Supplemental Indentures.

            

    

     

    In
      executing, or accepting the additional trusts created by, any supplemental
      indenture permitted by this Article or the modifications thereby of the trusts
      created by this Indenture, or in executing any instrument modifying Mortgage
      Notes, Mortgages or Loan Agreements pursuant to Sections 13.01(b) or
13.02(b) the Trustee shall be entitled to receive, and (subject
      to
Section 10.01) shall be fully protected in relying upon, an Opinion of
      Counsel stating that the execution of such supplemental indenture or instrument,
      as the case may be, is authorized or permitted by this Indenture.  The
      Trustee may, but shall not be obligated to, enter into any such supplemental
      indenture or any such instrument which affects the Trustee’s own rights, duties,
      obligations or immunities under this Indenture or otherwise.

     

    
      	
              SECTION
                13.04.

            	
              Effect
                of Supplemental Indentures.

            

    

     

    Upon
      the execution of any supplemental indenture under this Article, this Indenture
      shall be modified in accordance therewith, and such supplemental indenture
      shall
      form a part of this Indenture for all purposes; and every Holder of Bonds
      theretofore or thereafter authenticated and delivered hereunder and

     

    

    
      
        
          
          

        

        
          75

          
            

          

        

        
          
          

        

      

    

    

    of
      any coupon appertaining thereto shall be bound thereby (except to the extent
      otherwise expressed therein).

     

    
      	
              SECTION
                13.05.

            	
              Conformity
                with Trust Indenture Act.

            

    

     

    Every
      supplemental indenture executed pursuant to this Article shall conform to the
      requirements of the TIA as then in effect.

     

    
      	
              SECTION
                13.06.

            	
              Reference
                in Bonds to Supplemental
                Indentures.

            

    

     

    Bonds
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to this Article may, and shall if required by the Trustee, bear a
      notation in form approved by the Trustee as to any matter provided for in such
      supplemental indenture.  If the Company shall so determine, new Bonds
      so modified as to conform, in the opinion of the Trustee and the Board of
      Directors (as evidenced by Board Resolution), to any such supplemental indenture
      may be prepared and executed by the Company and authenticated and delivered
      by
      the Trustee in exchange for Outstanding Bonds.

     

    ARTICLE
      FOURTEEN

    DEFEASANCE

     

    
      	
              SECTION
                14.01.

            	
              Payment
                of Indebtedness; Satisfaction.

            

    

     

    If
      the Company shall pay and discharge the entire indebtedness on all Bonds and
      coupons appertaining thereto hereby secured (or provide therefor) in any one
      or
      more of the following ways, to wit:

     

    (1)
      by paying or causing to be paid the principal of (including redemption premium,
      if any) and interest on Bonds and coupons appertaining thereto hereby secured,
      as and when the same become due and payable; and/or

     

    (2)
      by depositing with the Trustee, in trust, at or before maturity, either (i)
      moneys in the necessary amount or (ii) U.S. Government Obligations, the
      principal of and the interest on which when due, and without any regard to
      the
      reinvestment thereof, will in the opinion of an Independent Accountant or other
      independent financial expert delivered to the Trustee provide moneys which,
      together with the moneys, if any, deposited with or held by the Trustee, shall
      be sufficient to pay or redeem the principal of or premium, if any, and interest
      to the date of such deposit (in the case of Bonds and coupons appertaining
      thereto which have become due and payable) or to the Stated Maturity or
      Redemption Date (as irrevocably set to the satisfaction of the Trustee), as
      the
      case may be, of the Bonds hereby secured, with irrevocable direction to apply
      the same to such payment or redemption;

     

    and
      if the Company shall also pay or cause to be paid or provided for all other
      sums
      payable hereunder by the Company, then, upon Company Request authorized by
      a
      Board Resolution, accompanied by an Officers’ Certificate and an Opinion of
      Counsel stating that all conditions precedent to the satisfaction and discharge
      of this Indenture have been complied with, this Indenture and the lien, rights
      and interests hereby granted shall cease, determine and become null and void
      (except as to the rights of registration of transfer and exchange and
      replacement of Bonds and coupons, if applicable, and rights to receive payments
      provided for in the Bonds and coupons, if any), and the Trustee shall forthwith
      cause such satisfaction and discharge of this Indenture to be entered upon
      the
      record at the expense of the Company, and shall execute and deliver such
      instruments of satisfaction as may be necessary in the opinion of the Company
      as
      specified in a Company Request, and forthwith the estate, right, title and
      interest of the Trustee in and to the Pledged Property, any securities, cash
      (except cash deposited under this Section) and other property held by it
      under

    

    
      
        
          
          

        

        
          76

          
            

          

        

        
          
          

        

      

    

    

    this
      Indenture as a part of the Pledged Property shall thereupon cease, determine
      and
      become null and void, and the Trustee shall in such case transfer, deliver
      and
      pay the same to the Company or upon Company Order; provided that in the
      case of redemption the notice requisite to the validity of such redemption
      shall
      have been given or arrangements shall have been made to the satisfaction of
      the
      Trustee that such notice will be given; and provided, further, that the
      Company shall have delivered to the Trustee an Opinion of Counsel to the effect
      that Holders of the Bonds and coupons, if any, of such series will not recognize
      income, gain or loss for Federal income tax purposes as a result of the
      Company’s exercise of its option under this Section 14.01 and will be
      subject to Federal income tax in the same amount, in the same manner and at
      the
      same times as would have been the case if such option had not been
      exercised.

    

    In
      the absence of a Company Request authorized by a Board Resolution as aforesaid,
      the payment and discharge of all indebtedness secured by this Indenture shall
      not render this Indenture inoperative or prevent the Company from issuing Bonds
      and coupons hereunder from time to time thereafter as herein
      provided.

     

    All
      money deposited with the Trustee pursuant to Section 14.01 shall be
      held in trust and applied by it, in accordance with the provisions of the Bonds,
      the coupons and this Indenture, to the payment, either directly or through
      any
      Paying Agent (including the Company acting as its own Paying Agent) as
      the

     

    Trustee
      may determine, to the Persons entitled thereto, of the principal (and premium,
      if any) and interest for whose payment such money has been deposited with the
      Trustee; but such money need not be segregated from other funds except to the
      extent required by law.

     

    For
      the purposes of this Article, the Company and the Trustee shall not treat as
      a
      Bond or coupon hereby secured, and the Company shall not be required to pay
      or
      provide for the payment of, any Bond or coupon in lieu of which another Bond
      or
      coupon has been authenticated and delivered under Section 2.08,
      if

     

    (i)
      such Bond or coupon has not been presented to the Trustee with a claim of
      ownership and enforceability by the Holder thereof, prior to the Company Request
      for the satisfaction and discharge of this Indenture, or

     

    (ii)
      the enforceability of such Bond or coupon, if contested by the Company, has
      been
      determined adversely against such Holder by a court of competent jurisdiction
      or
      other competent tribunal.

     

    The
      rights, duties, obligations and immunities of the Trustee, including without
      limitation its rights under Section 10.07 against the Company, shall
      survive the satisfaction and discharge of this Indenture.

     

    
      	
              SECTION
                14.02.

            	
              Satisfaction,
                Discharge and Defeasance of Bonds of Any
                Series.

            

    

     

    If
      this Section is specified, as contemplated by Section 2.03, to be
      applicable to Bonds and coupons, if any, of any series, at the Company’s option,
      either

     

    (a)
      the Company will be deemed to have been Discharged (as defined below) from
      its
      obligations with respect to Bonds and coupons, if any, of such series
      or

     

    (b)
      the Company will cease to be under any obligation to comply with any term,
      provisions or condition set forth in (x) Sections 7.11, 12.01
      and 12.02 or (y) the instrument or instruments setting forth the terms,
      provisions or conditions of such series pursuant to Section 2.03
      (provided in case of this subclause (y) that such instrument or
      instruments specify which terms, provisions or conditions, if any, are subject
      to this

     

    

    
      
        
          
          

        

        
          77

          
            

          

        

        
          
          

        

      

    

    

    clause
      (b); provided further, however, that no such instrument may
      specify that the Company may cease to comply with any obligations as to which
      it
      may not be Discharged pursuant to the definition of “Discharged”);

     

    in
      each case (a) and (b) with respect to the Bonds and coupons, if any, of such
      series, on the 91st day after the applicable conditions set forth below in
      (p)
      and either (q) or (r) have been satisfied:

    

    (p)(1)
      the Company has paid or caused to be paid all other sums payable with respect
      to
      the Outstanding Bonds and coupons, if any, of such series (in addition to any
      sums required under (q) or (r)); and

     

    (2)
      the Company has delivered to the Trustee an Officers’ Certificate and an Opinion
      of Counsel as contemplated by Section 1.02 and each stating that all
      conditions precedent herein provided for relating to the satisfaction and
      discharge of the entire indebtedness on all Outstanding Bonds and coupons,
      if
      any, of any such series have been complied with;

     

    (q)(1)
      the Company shall have deposited or caused to be deposited irrevocably with
      the
      Trustee as a trust fund specifically pledged as security for, and dedicated
      solely to, the benefit of the Holders of the Bonds and coupons, if any, of
      such
      series (i) money in an amount (in such currency, currencies or currency unit
      or
      units in which any Outstanding Bonds and coupons, if any, of such series are
      payable) or (ii) in the case of Bonds and coupons, if any, denominated in
      Dollars, U.S. Government Obligations (as defined below) or, in the case of
      Bonds
      and coupons, if any, denominated in a Foreign Currency, Foreign Government
      Securities (as defined below), which through the payment of interest and
      principal in respect thereof in accordance with their terms will provide, not
      later than one day before the due date of any payment of principal (including
      any premium) and interest, if any, under the Bonds and coupons, if any, of
      such
      series, money in an amount (or (iii) a combination of (i) and (ii)) sufficient
      (in the opinion with respect to (ii) and (iii) of an Independent Accountant
      expressed in a written certification thereof delivered to the Trustee) to pay
      and discharge or redeem each installment of principal of and premium, if any,
      and interest, if any, on, the Outstanding Bonds and coupons, if any, of such
      series on the dates such installments of interest or principal are due, in
      the
      currency, currencies or currency unit or units, in which such Bonds and coupons,
      if any, are payable; provided, however, that the Company shall
      not make or cause to be made the deposit provided by this clause (1) unless
      the
      Company shall have delivered to the Trustee an Opinion of Counsel to the effect
      that there will not occur any violation of the Investment Company Act of 1940,
      as amended, on the part of the Company, the trust funds representing such
      deposit or the Trustee as a result of such deposit and the related exercise
      of
      the Company’s option under this Section 14.02.

     

    (2)(i)
      no Event of Default or event (including such deposit) which with notice or
      lapse
      of time or both would become an Event of Default with respect to the Bonds
      of
      such series shall have occurred and be continuing on the date of such deposit,
      (ii) no Event of Default as defined in clause (6) or (7)
      of Section 9.01, or event which with notice or lapse of time or both
      would become an Event of Default under either such clause, shall have occurred
      within 90 days after the date of such deposit and (iii) such deposit and the
      related intended consequence under (a) or (b) will not result in any default
      or
      event of default under any material indenture, agreement or other instrument
      binding upon the Company or any of its properties; and

     

    (3)
      the Company shall have delivered to the Trustee an Opinion of Counsel to the
      effect that Holders of the Bonds and coupons, if any, of such series will not
      recognize income, gain or loss for Federal income tax purposes as a result
      of
      the Company’s exercise of its option under this

     

    

    
      
        
          
          

        

        
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    Section
      14.02 and will be subject to Federal income tax in the same amount, in the
      same manner and at the same times as would have been the case if such option
      had
      not been exercised;

     

    (r)
      the Company has properly fulfilled such other means of satisfaction and
      discharge as is specified, as contemplated by Section 2.03, to be
      applicable to the Bonds and coupons, if any, of such series.

     

    Any
      deposits with the Trustee referred to in clause (q)(1) above will be made under
      the terms of an escrow trust agreement in from and substance satisfactory to
      the
      Trustee.  If any Outstanding Bonds and coupons, if any, of such series
      are to be redeemed prior to their Stated Maturity, whether pursuant to any
      mandatory redemption provisions or in accordance with any mandatory sinking
      fund
      requirement, the applicable escrow trust agreement will provide therefor and
      the
      Company will make arrangements for the giving of notice of redemption by the
      Trustee in the name, and at the expense, of the Company.

     

    (c)
      The Trustee shall deliver or pay to the Company from time to time upon Company
      Request any U.S. Government Obligations, Foreign Government Securities or money
      held by it as provided in Section14.01 or this Section
      14.02 which, in the opinion of an Independent Accountant expressed in a
      written certification thereof delivered to the Trustee, are then in excess
      of
      the amount thereof which then would have been required to be deposited for
      the
      purpose for which such obligations or money were deposited or
      received.  The Trustee shall also deliver or pay to the Company from
      time to time upon Company Request any U.S. Government Obligations, Foreign
      Government Securities or money held by it as provided in Section 14.01
      or this Section 14.02, in exchange for other U.S. Government
      Obligations, Foreign Government Securities or money, upon the following
      conditions:

     

    (1)
      such exchange shall occur simultaneously;

     

    (2)
      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 exchange contemplated by paragraph (c) of this Section
      14.02 have been complied with; and

     

    (3)
      in the opinion of an Independent Accountant expressed in a written certification
      thereof delivered to the Trustee, immediately after such exchange the U.S.
      Government Obligations, Foreign Government Securities or money then held by
      the
      Trustee as provided in Section 14.01 or this Section 14.02
      shall be in such amount as then would have been required to be deposited in
      order to comply with Sections 14.01(1) and 14.02(q)(1) hereof,
      as the case may be.

     

    
      	
              SECTION
                14.03.

            	
              Reinstatement.

            

    

     

    If
      the Trustee is unable to apply any money, U.S. Government Obligations or Foreign
      Government Securities in accordance with Section 14.01 or
14.02 by reason of any legal proceeding or by reason of any
      order or
      judgment of any court or governmental authority enjoining, restraining or
      otherwise prohibiting such application, the Company’s obligations under this
      Indenture and the Bonds and coupons, if any, of such series shall be revived
      and
      reinstated as though no deposit had occurred pursuant to Section 14.01
      or 14.02 until such time as the Trustee is permitted to apply all such
      money, U.S. Government Obligations or Foreign Government Securities in
      accordance with Section 14.01 or 14.02; provided, however,
      that if the Company has made any payment of interest on or principal of (and
      premium, if any) on any Bonds and coupons, if any, of such series because of
      the
      reinstatement of its obligations, the Company shall be subrogated to the rights
      of the Holders of such series of Bonds and coupons, if any, to receive such
      payment from the money, U.S. Government Obligations or Foreign Government
      Securities held by the Trustee.

     

    
      
        	
                SECTION
                  14.04.

              	
                Definintions

              

      

       

      The
        following terms, as used in this Article Fourteen, shall have the following
        meanings:

       

      “Discharged”
        means that the Company will be deemed to have paid and discharged the entire
        indebtedness represented by, and obligations under, the Bonds and coupons,
        if
        any, of the series as to which Section 14.02 is specified as applicable
        as aforesaid and all provisions of this Indenture relating to the Bonds and
        coupons, if any, of such series shall no longer be deemed in effect (and
        the
        Trustee, at the expense of the Company, will execute proper instruments
        acknowledging the same), except as to (A) the rights of Holders thereof to
        receive, from the trust fund described in clause (q)(1) of Section
        14.01 above, payment of the principal of and the interest, if any, on such
        Bonds and coupons, if any, when such payments are

    

    
      
        
          
          

        

        
          79

          
            

          

        

        
          
          

        

      

    

    
      due,
        (B) the Company’s obligations with respect to such Bonds and coupons, if any
        under Sections 2.07 and 2.08 (insofar as applicable to Bonds
        of such series), 7.02, 7.03 (last paragraph only) and
14.02 and the Company’s obligations to the Trustee under Sections
        10.07 and 10.10, (C) the rights of Holders of Bonds of any series
        with respect to the currency or currency units in which they are to receive
        payments of principal, premium, if any, and interest and (D) the rights,
        powers,
        trusts, duties and immunities of the Trustee hereunder, will survive such
        discharge.  The Company will reimburse the trust fund for any loss
        suffered by it as a result of any tax, fee or other charge imposed on or
        assessed against deposited U.S. Government Obligations or Foreign Government
        Securities, as the case may be, or any principal or interest paid on such
        obligations, and, subject to the provisions of Section 10.07, will
        indemnify the Trustee against any claims made against the Trustee in connection
        with any such loss.

       

    

    “Foreign
      Government Securities” means, with respect to Bonds and coupons, if
      any, of any series that are denominated in a Foreign Currency, securities that
      are (i) direct obligations of the government that issued or caused to be issued
      such currency for the payment of which obligations 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 such government the timely payment of which
      is unconditionally guaranteed as a full faith and credit obligation by such
      government, which, in either case under clauses (i) or (ii), are not callable
      or
      redeemable at the option of the issuer thereof.

     

    “U.S.
      Government Obligations” means securities that are (i) direct
      obligations of the United States of America 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
      of
      America the timely payment of which is unconditionally guaranteed as a full
      faith and credit obligation of the United States of America, which in either
      case under clauses (i) or (ii) are not callable or redeemable at the option
      of
      the issuer thereof, and will 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 specified 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 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.

     

    
      ARTICLE
        FIFTEEN

      SUNDRY PROVISIONS

       

      
        	
                SECTION
                  15.01.

              	
                Exercise
                  of Rights and Powers Under Mortgage Notes and
                  Mortgages.

              

      

       

      With
        respect to any Mortgage, the rights and powers of the Company and the holders
        of
        Mortgage Notes under such Mortgage Notes and such Mortgage shall,
        notwithstanding any other provision in this Indenture, be exercised exclusively
        by the holders of such Mortgage Notes or the Company unless and until an
        Event
        of Default occurs and is continuing.  The Trustee shall not be deemed
        to have any responsibility with respect to the occurrence or continuance
        of any
        Event of Default unless a Responsible Officer has actual knowledge
        thereof.  For such purpose, “the holders of Mortgage
        Notes” shall not be deemed to include the Trustee or any other pledgee
        of Mortgage Notes.  The provisions of this Section shall not be deemed
        to affect the definition of Mortgage herein.

       

      
        	
                SECTION
                  15.02.

              	
                Execution
                  in Counterparts.

              

      

       

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

    

    
      
        
          
          

        

        
          80

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
      executed and their respective corporate seals to be hereunto affixed and
      attested, all as of the day and year first above written.

     

    NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

    

    By

    ___________________________________

    Governor

    

    

    [SEAL]

    

    Attest:                                                              

    _____________________________

    Assistant
      Secretary

    

    FIRST
      BANK NATIONAL ASSOCIATION

    

    By

    ___________________________________

    Vice
      President

    

    [SEAL]

    

    Attest:                                                              

    _____________________________

    Assistant
      Secretary

    

    

    
      
        
          
          

        

        
          81

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE
      I

     

    Summary
      of Terms of Mortgage

     

    The
      Mortgage shall include the provisions summarized below or other provisions
      substantially as protective or more protective to the mortgagee or
      mortgagees.  The Mortgage may be made to one or more parties as
      mortgagees (provided the notes or bonds or other obligations secured thereby
      (the “Mortgage Notes”) are secured equally and ratably) or to a
      trustee or trustees under a trust indenture.  The term
“mortgagees”, as used below, includes the trustee or trustees
      under a trust indenture and a single mortgagee if there is only
      one.  In any case where the Mortgage provides that consents or
      approvals may be given by a percentage (at least a majority) in principal amount
      of the holders of outstanding notes or bonds (exclusive, if so provided, of
      notes or bonds held or owned by the mortgagor), the references below to
“consent” or “approval” of the mortgagees
      include any consent or approval given by such percentage in principal amount
      of
      such holders or by a trustee or trustees under the Mortgage pursuant to such
      consent or approval.

     

    The
      granting clauses shall convey all property (including all permits, licenses,
      privileges and similar property) then owned or thereafter acquired by the
      mortgagor, subject to usual exceptions in utility mortgages, which exceptions
      may include (without limitation) cash, bills, notes and accounts receivable;
      choses in action and judgments; shares of stock, bonds, notes and other
      securities; contracts and operating agreements; goods, wares, materials,
      merchandise and supplies acquired for purpose of sale in the ordinary course
      of
      business; fuel, fissionable and other materials and supplies and other personal
      property which are consumable (otherwise than by ordinary wear and tear) in
      their use in the operation of the business; office furniture, equipment and
      supplies; automobiles, trucks, trailers, tractors and similar vehicles;
      airplanes, airplane engines and other flight equipment; ships or marine
      equipment; the last day of the term of each leasehold estate held by the
      mortgagor; coal, ore, gas, oil, and other minerals on, in or under the property
      of the mortgagor; all electric energy, gas, steam, water and other products
      generated, produced or purchased; any leasehold interests, permits, licenses,
      franchises and other rights which cannot be assigned, mortgaged or granted
      without the consent of other parties; and any other property which has
      theretofore been released or which is not useful to the mortgagor in the
      business of generating, manufacturing, storing, transmitting, distributing,
      utilizing, purchasing or disposing of electricity for heat, light, power,
      refrigeration or other uses.

     

    The
      Mortgage may permit mergers, consolidations or sales of all or substantially
      all
      the property of the mortgagor, provided either they are approved by the
      mortgagees or the successor corporation assumes the due and punctual payment
      of
      the Mortgage Notes and the due and punctual performance of the covenants
      contained in the Mortgage.  The Mortgage may contain provisions to the
      effect that in the event of any consolidation or merger or sale of all or
      substantially all of the business to another corporation and provided a
      supplemental indenture is executed specifying that no additional Mortgage Notes
      may be issued thereunder and that no further advances may be made on any
      outstanding Mortgage Notes, the lien of the Mortgage shall not extend to
      property of the successor or thereafter acquired except the property then
      subject to the lien of the Mortgage and extensions, improvements, substitutions
      and alterations to, upon, or of such property.

     

    Covenants
      and Warranties

    

    1.  The
      execution and delivery of the Mortgage and the Mortgage Notes issued to the
      Company (or to a wholly-owned subsidiary of the Company) have been duly
      authorized by the mortgagor in accordance with law, and the Mortgage and such
      Mortgage Notes are valid and enforceable.

     

    

    
      
        
          
          

        

        
          82

          
            

          

        

        
          
          

        

      

    

    

    2.  The
      mortgagor has the right and authority to mortgage the property described in
      the
      granting clauses.  The mortgaged property is free and clear of any
      equal or prior mortgage, lien, charge or encumbrance, with usual exceptions
      in
      utility mortgages, which exceptions may include (without limitation) liens
      for
      taxes, assessments or governmental charges for the current year and taxes,
      assessments or governmental charges not due and delinquent; liens for workmen’s
      compensation awards and similar obligations not then delinquent; mechanics’,
      laborers’, materialmen’s and similar liens not then delinquent; and any of such
      liens, whether or not delinquent, whose validity is at the time being contested
      in good faith; liens and charges incidental to construction or current operation
      which have not been filed or asserted or the payment of which has been
      adequately secured or which, in the opinion of counsel, are insignificant in
      amount; liens, securing obligations not assumed by the mortgagor and on account
      of which it does not pay and does not expect to pay interest, existing upon
      real
      estate (or rights in or relating to real estate) over or in respect of which
      the
      mortgagor has a right-of-way or other easement for substation, transmission,
      distribution or other right-of-way purposes; any right which the United States
      of America or any state or municipality or governmental body or agency may
      have
      by virtue of any franchise, license, contract or statute to purchase, or
      designate a purchaser of, or order the sale of, any property of the mortgagor
      upon payment of reasonable compensation therefor, or upon reasonable
      compensation or conditions to terminate any franchise, license or other rights
      before the expiration date thereof or to regulate the property and business
      of
      the mortgagor; attachment or judgment liens covered by insurance, or upon appeal
      and covered by bond; deposits or pledges to secure payment of workmen’s
      compensation, unemployment insurance, old age pensions or other social security;
      deposits or pledges to secure performance of bids, tenders, contracts (other
      than contracts for the payment of borrowed money), leases, public or statutory
      obligations; surety or appeal bonds; and other deposits or pledges for purposes
      of like general nature in the ordinary course of business; easements or
      reservations in respect to any property for the purpose of transmission and
      distribution lines and rights-of-way and similar purposes, zoning ordinances,
      regulations, reservations, restrictions, covenants, party-wall agreements,
      conditions of record and other encumbrances (other than to secure the payment
      of
      money), none of which in the opinion of counsel is such as to interfere with
      the
      proper operation of the property affected thereby; the burdens of any law or
      governmental organization or permit requiring the mortgagor to maintain certain
      facilities or perform certain acts as a condition of its occupancy of or
      interference with any public land or any river, stream or other waters or
      relating to environmental matters; any lien or encumbrance for the discharge
      of
      which moneys have been deposited in trust with a proper depository to apply
      such
      moneys to the discharge of such lien or encumbrance; any exceptions,
      reservations and other matters referred to in the description of the mortgaged
      property and, with respect to any property which the mortgagor may hereafter
      acquire, any terms, conditions, agreements, covenants, exceptions and
      reservations expressed or provided in the deeds or other instruments under
      which
      the mortgagor shall hereafter acquire the same, none of which in the opinion
      of
      counsel materially adversely affects or will affect the property to which the
      same relates or the operation thereof by the mortgagor; any lien reserved as
      security for rent or compliance with other provisions of the lease in case
      of
      any leasehold estate; and purchase money mortgages and liens, charges and
      encumbrances upon property existing at the time of acquisition thereof by the
      mortgagor.  The mortgagor will maintain and preserve the priority of
      lien of the Mortgage, subject to exceptions usual in utility mortgages including
      (without limitation) those mentioned above.

     

    3.  The
      mortgagor will punctually pay the principal of and interest on the Mortgage
      Notes.

     

    4.  The
      mortgagor will, subject to usual provisions in utility mortgages, preserve
      its
      corporate existence and will, to the extent reasonably required for the
      maintenance and operation of its properties and business taken as a whole,
      preserve and renew all franchises, permits and licenses held by it and comply
      with all valid laws and regulations applicable to it or its
      property.

     

    

    
      
        
          
          

        

        
          83

          
            

          

        

        
          
          

        

      

    

    

    Events
      of Default

    

    1.  Default
      in the payment of interest on the Mortgage Notes continued for 30
      days.

     

    2.  Default
      in the payment of principal of the Mortgage Notes continued for 30
      days.

     

    3.  Default
      in the performance of any of the covenants in the Mortgage Notes or the Mortgage
      continued for 60 days after written notice.

     

    4.  Falsity
      in any material respect of any representation or warranty by the mortgagor
      in
      the Mortgage.

     

    5.  Loss
      of corporate charter or franchises, permits, easements and licenses required
      to
      carry on any material portion of the mortgagor’s business, continued for 30 days
      after notice of such default.

     

    6.  Usual
      events of insolvency or bankruptcy contained in utility mortgages.

     

    Acceleration

    

    Upon
      the expiration of 30 days after an event of default still continuing, the
      principal of the Mortgage Notes may be accelerated.

     

    Miscellaneous

    

    The
      Mortgage shall also contain other customary provisions as to enforcement,
      including entry, foreclosure and sale, which may be limited if the Mortgage
      provides for one or more mortgagees or trustees to exercise remedies on behalf
      of the noteholders.

     

    In
      the event that the mortgagor is a governmental entity or public body or an
      agency of a governmental entity or public body (including any public authority
      or corporation owned or controlled by a governmental entity, public body or
      agency), the granting clauses, in lieu of mortgaging property, may mortgage
      the
      revenues of the electric generating, distribution and/or transmission facilities
      operated by such governmental entity, public body or agency, and, in such event,
      the covenants and warranties mentioned above shall be modified to relate to
      such
      revenues instead of property and such other revisions may be made as are
      appropriate for a mortgage made by a governmental entity, public body or agency
      as distinguished from a private corporation.

    

    
      
        
          
          

        

        
          84a070927ex_105.htm

    
      

      

    

    Exhibit
      10.5

     

    CONSULTING
      AGREEMENT

     

     

    This
      Agreement ("Agreement") is made and effective as of
      July 1, 2007 ("Effective Date") by and between
      SONOMAWEST HOLDINGS, INC. a Delaware corporation
      ("Client") and BUGATTO INVESTMENT COMPANY
      ("Consultant").

     

    1.    Services
      and Deliverables. Consultant will perform (i) any strategic services
      related to the Client’s current and future portfolio of real estate assets,
      including possible acquisitions of additional real estate, (ii) services that
      Client reasonably requests relating to the Client’s properties, including
      without limitation assisting Client concerning interactions with Sonoma County
      zoning and land use authorities, and (iii) such other services as Client and
      Consultant may agree upon (collectively, the
      "Services"). During the term of this Agreement,
      Consultant will make David J. Bugatto available to perform the Services.
      Consultant will determine the method, details and means of performing the
      Services. 

     

    2.    Fees
      and Payment. 

     

    a.    Hourly
      Fee. In consideration for the Services to be performed
      by Consultant, Client will pay to Consultant an hourly fee of $225.00 per hour
      for all hours rendered on behalf of Client. Client and Consultant agree that
      only the Chief Executive Officer of Client (the “CEO”)
      is authorized to request or authorize Services, and Consultant shall not
      undertake Services at the request of any other employee of Client without the
      prior written approval of the CEO. Client will pay Consultant for its services
      within fifteen (15) days of delivery of a monthly invoice. Any amounts that
      Client may pay to Consultant for time spent in connection with
      litigation-related activities (such as in connection with testimony, depositions
      or expert witness activity) will be subject to a separate arrangement and rates
      mutually agreed upon between Client and Consultant. 

     

    b.    No
      Additional Payments. No additional amounts shall be
      payable in connection with performance of the Services or in connection with
      any
      transaction involving a sale of any of Client’s properties, a sale of Client’s
      business (whether by merger, sale of assets or other transaction) or a
      transaction that results in Client no longer being a public company.

     

    c.    Deductions
      and Withholdings. All amounts payable or which become
      payable under any provision of this Agreement will be subject to any deductions
      and withholdings that Client reasonably determines are necessary or required
      by
      law. 

     

    3.    Independent
      Consultant Status. It is the express intention of the parties that
      Consultant is an independent consultant and not an employee, agent, joint
      venturer or partner of Client. Nothing in this Agreement will be interpreted
      or
      construed as creating or establishing the relationship of employer and employee
      between Client and Consultant, or any employee or agent of Consultant.

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    4.    Additional
      Obligations of Consultant. 

     

    a.    Equipment. Consultant
      will supply all tools and instrumentalities required to perform the Services
      under this Agreement. Consultant is not required to purchase or rent any tools,
      equipment or services from Client.

     

    b.    Costs
      and Expenses. Consultant is responsible for all costs
      and expenses incident to performing services hereunder, including but not
      limited to costs of equipment provided by Consultant, fees, fines, licenses,
      bonds, or taxes required of or imposed against Consultant and its assistants,
      if
      any, as costs of doing business. Client is not responsible for any expenses
      incurred by Consultant in performing services for Client, except for those
      reasonable out-of-pocket travel expenses and miscellaneous expenses incurred
      by
      Consultant in performing the Services under this Agreement.

     

    c.    Assistants;
      Indemnification. Consultant may, at its option and at
      its own expense, employ such assistants as Consultant deems necessary to perform
      the Services. Consultant assumes full and sole responsibility for the payment
      of
      all compensation and expenses of these assistants and for any state and federal
      income tax, unemployment insurance, Social Security, disability insurance and
      other applicable withholdings of such assistants. Consultant will provide
      workers' compensation insurance coverage for its employees and agents, and
      agrees to hold harmless and indemnify Client for any and all claims arising
      out
      of any injury, disability, or death of any of Consultant's employees or agents.
      Consultant will indemnify and hold Client harmless against any and all liability
      imposed or claimed, including attorneys' fees and other legal expenses, arising
      directly or indirectly from any act or failure to act of Consultant or
      Consultant's assistants, employees or agents, including all claims relating
      to
      injury or death of any person or damage to property.

     

    d.    Compliance
      With Client Policies. Consultant specifically agrees
      to abide by Client's standards and rules of conduct and general operating
      procedures while on Client's premises or otherwise while performing services
      pursuant to this Agreement. 

     

    e.    No
      Assignment By
      Consultants. Consultant may
      not assign any duties or obligations under this Agreement without Client's
      express written consent.

     

    f.    Independent
      Contractor. Consultant
      acknowledges that, as he is an independent consultant and not an employee,
      he is
      responsible for paying all required state and federal taxes. In particular,
      Client will not: (i) withhold FICA (Social Security) from Consultant's payments;
      (ii) make state or federal unemployment insurance contributions on Consultant's
      behalf; (iii) withhold state or federal income tax from payment to Consultant;
      (iv) make disability insurance contributions on behalf of Consultant; (v) obtain
      workers' compensation insurance on behalf of Consultant.

     

    g.    No
      Participation in Employee Benefit Plans. Consultant
      further acknowledges that he is not eligible for participation in any benefit
      plan or program available to Consultant's employees, and that the fee for
      services has been established in recognition of Consultant being responsible
      for
      maintaining such benefit coverage as it deems appropriate.

    
       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

    

     

    5.    Term
      and Termination.

     

    a.    Terms. This
      Agreement begins on the Effective Date and continues until the earlier to occur
      of (i) the mutual written agreement of Consultant and Client to terminate the
      Agreement; (ii) termination in accordance with the provisions set forth below;
      or (iii) June 30, 2008. 

     

    b.    Bankruptcy,
      Insolvency. Either party may terminate this Agreement
      upon notice to the other party if a court having jurisdiction shall enter a
      decree or order for relief in respect of the other party in an involuntary
      case
      under any applicable bankruptcy, insolvency or other similar law now or
      hereinafter in effect, or appoint a receiver, liquidator, assignee, custodian,
      trustee, sequestrator (or similar official) for that other party or for any
      substantial part of that party’s property, or order the winding up or
      liquidation of its affairs, and such decree or order shall remain unstayed
      and
      in effect for a period of sixty (60) consecutive business days; or if the other
      party shall commence a voluntary case under any applicable bankruptcy,
      insolvency or other similar law now or hereafter in effect, or consent to the
      entry of an order for relief in any involuntary case under any such law, or
      consent to the appointment of or taking possession by a receiver, liquidator,
      assignee, trustee, custodian, sequestrator (or similar official) for any
      substantial part of that other party’s property, or make any general assignment
      for the benefit of creditors, or shall take any action in furtherance of any
      of
      the foregoing. 

     

    c.    Personnel. Client
      may terminate this Agreement upon notice to Consultant if David J. Bugatto
      becomes no longer available to perform the Services. 

     

    d.    Material
      Default. If Consultant materially defaults in the
      performance of the Agreement or materially breaches any of the provisions and
      does not cure the default or breach within ten (10) days of delivery of a notice
      thereof from Client to Consultant, Client at its sole option may terminate
      the
      Agreement by delivering a notice to Consultant. For purposes of this section,
      material default or breach includes, but is not limited to: (i) failure or
      refusal to perform in any material respect the Services when and as
      contemplated; (ii) repeated failure to provide timely invoices with appropriate
      descriptions and approved expenses as provided herein; and (iii) negligence,
      misconduct, an act of dishonesty, or taking an action or conducting itself
      in a
      manner contrary or inimical to Client's best business interests or
      reputation.

     

    e.    Payment
      Defaults. If Client fails to pay Consultant fees or
      payment as provided herein and fails to make any required payment within ten
      (10) days after delivery by Consultant to Client of a late payment notice,
      Consultant at its option may terminate the Agreement by delivering a notice
      to
      Client.

     

    f.    Return
      of Materials. Upon termination of this Agreement for
      any reason, Consultant shall return to Client all materials of any kind in
      Client’s possession relating to the Services or Client.

     

    g.    Survival. The
      provisions of Sections 2(b), 2(c), 3, 4, 5(f), 6 and 7 shall survive expiration
      or termination of the Agreement for any reason.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    6.    Confidentiality,
      Trade Secrets, Work for Hire and Non-Competition.

     

    a.    Nondisclosure. Consultant
      recognizes that during the term of this Agreement, and in preparation therefore,
      he will be privy to Client's trade secrets or proprietary or other confidential
      or privileged information (“Confidential
      Information”). Consultant agrees to keep all Confidential
      Information in strictest confidence and not to disclose it except for legitimate
      purposes of Client and with Client's express written consent, either during
      the
      term of this Agreement or at any time thereafter.

     

    b.    Delivery
      of Materials on
      Termination. On termination of
      this Agreement, Consultant will promptly deliver to Client all equipment
      belonging to Client, all code and computer programs of whatever nature, as
      well
      as all manuals, letters, reports, price lists, customer lists, sales
      information, analyses, recommendations, and all copies thereof, and all other
      materials of a confidential nature regarding Client's business that are in
      its
      possession or control. Consultant agrees that the remedy at law for any breach
      of the foregoing will be inadequate, and that Client is entitled to seek
      appropriate injunctive relief in addition to any remedy at law in case of any
      such breach.

     

    c.    Work
      For Hire; Assignment of Rights. Consultant agrees that
      all work Consultant performs pursuant to this Agreement, and all work which
      relates at the time of conception or reduction to Client's business, and all
      work which results from work Consultant performs for Client, whenever performed
      during the term of this Agreement, and whether or not utilizing Client's
      equipment, supplies, facilities or trade secret information, is considered
      work
      made for hire for Client as such term is defined in section 101 of the Copyright
      Act of 1976 and belongs to Client. Consultant further agrees that in the event
      that this Agreement is determined not to be a work for hire agreement,
      Consultant will assign to Client any and all rights retained by Consultant.
      All
      Inventions (as defined below) conceived of or made by Consultant or Agent,
      either alone or with others, during the term of this Agreement, which (i) are
      developed, in whole or part, in reliance upon or any of the Client equipment,
      supplies, facilities or Confidential Information, or (ii) relate to the business
      of the Client or the Client actual or demonstrably anticipated research or
      development, or (iii) result from any work performed by Consultant for the
      Client pursuant to this Agreement, are and shall be the sole property of the
      Client, whether as “works for hire” or otherwise. Consultant hereby irrevocably
      assigns and transfers to the Client all of its right, title and interest in
      and
      to all such Inventions, and Consultant agrees not to disclose any such
      Inventions to others without the express written consent of Client. Consultant
      agrees to execute such documents as Client may reasonably request reflecting
      such assignment and transfer. For the purpose of this Agreement, an Invention
      is
      deemed to have been made during the term of the Agreement if, during such
      period, the Invention was conceived or first actually reduced to practice.
      Notwithstanding anything to the contrary contained herein, this Section shall
      not apply to any Invention which fully qualifies under Section 2870 of the
      California Labor Code, to the extent that such section applies to the activities
      of Consultant. For the purposes of this Section,
“Invention” means any new formulae, know-how,
      techniques, applications, combinations, machines, methods, processes,
      algorithms, routines, subroutines, apparatuses, compositions of matter,
      compounds, designs, uses, plans or configurations of any kind, discovered,
      conceived, developed, made or produced, or any improvements of them, and shall
      not be limited to the definition of an invention contained in the United States
      patent laws.

    
       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

    

     

    7.    General
      Provisions.

     

    a.    Notices. Any
      notices given by either party may be effected by personal delivery in writing
      or
      by mail, registered or certified, postage prepaid, or by facsimile transmission
      or by electronic submission, if receipt is confirmed in a commercially
      acceptable manner. Mailed notices are to be addressed to the parties at the
      addresses below:

     

    
      	
              If
                to Client: 

            	
              SonomaWest
                Holdings, Inc. 

              2064
                Highway 116, North 

              Sebastopol,
                CA 95472-2662 

            	
               

            	
               

            
	
               

            	
              Attn:
                Chief Executive Officer 

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              If
                to Consultant: 

            	
              Bugatto
                Investment Company 

            	
               

            	
               

            
	
               

            	
              c/o
                David J. Bugatto 

            	
               

            	
               

            
	
               

            	
              4425
                I Street 

            	
               

            	
               

            
	
               

            	
              Sacramento,
                CA 95819 

            	
               

            	
               

            

    

     

    Notices
      will be deemed delivered: (a) upon receipt if hand delivered; (b) three (3)
      days
      after mailing if sent by mail; and (c) one (l) business day after transmission
      if sent by telecopier (with electronic acknowledgment of successful
      transmission) or express courier, to the addresses set forth above, or such
      other addresses as any party may notify the other parties in accordance with
      this Section.

     

    b.    Entire
      Agreement. This Agreement supersedes any and all
      agreements, oral or written, between the parties with respect to rendering
      services by Consultant for Client, and contains all agreements between the
      parties. This Agreement supersedes the consulting agreements dated August 10,
      2005 and July 1, 2006, between Client and Consultant, and is intended by the
      parties to govern all services provided and to be provided by Consultant to
      Client on and after July 1, 2007. Without limiting the foregoing, Consultant
      agrees that neither Consultant nor any of its officers, directors or owners
      shall have any claim for payment of any amounts described in the Consulting
      Agreements dated as of August 10, 2005 and July 1, 2006, by and between
      Consultant and the Company for payment of any amounts contemplated therein,
      including upon the occurrence of a transaction involving the sale of any of
      the
      Company’s properties or as a result of which the Company is no longer a public
      company. Any modification of this Agreement is effective only if in writing
      signed by the party to be charged.

     

    c.    Governing
      Law; Consent to Jurisdiction. The provision of this
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of California, notwithstanding any application of any doctrine of
      conflicts of laws. Each party irrevocably consents to the exclusive jurisdiction
      and venue of the state and federal courts located in Sacramento, California,
      in
      connection with any action to enforce the provisions of this Agreement, to
      recover damages or other relief for breach or default of this Agreement, or
      otherwise arising under or by reason of this Agreement, and agrees that service
      of process in any such action may be effected by the means provided in this
      Agreement for delivery of notices. 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    d.    Counterparts. This
      Agreement may be executed in one or more counterparts, each of which shall
      constitute an original but all of which taken together shall constitute one
      and
      the same agreement.

     

    e.    Successors
      and Assigns. This Agreement shall be binding upon the
      heirs, successors and assigns of the parties. 

     

    f.    Severability. If
      any provision contained in this Agreement is determined to be void, invalid
      or
      unenforceable in whole or in part for any reason whatsoever, it shall be
      enforced and given effect to the extent possible, such determination shall
      not
      affect or impair the validity of any other provision herein, nor the validity
      of
      this Agreement as a whole, and the remaining provisions will continue in full
      force provided that the essential purposes of the Agreement can be achieved
      without the invalid provision

     

    g.    Amendment. The
      provisions of this Agreement may be modified at any time by agreement of the
      parties. Any such agreement hereafter made shall be ineffective to modify this
      Agreement in any respect unless in writing and signed by the parties against
      whom enforcement of the modification or discharge is sought. Any of the terms
      or
      conditions of this Agreement may be waived in writing at any time by the party
      entitled to the benefit thereof, but no such waiver shall affect or impair
      the
      right of the waiving party to require observance, performance or satisfaction
      either of that term or condition as it applies on a subsequent occasion or
      of
      any other term or condition.

     

    IN
      WITNESS WHEREOF, this Consulting Agreement has been entered into as of the
      date
      and year first above written.

     

    
      	
               

            	
               

            	
               

            
	
               

            	
              Consultant:

            
	
               

            	
                

            	
              BUGATTO
                INVESTMENT COMPANY

            
	
               

            	 
	
               

            	
              By:
                /s/ David J.
                Bugatto                
                

            
	
               

            	
              David
                J. Bugatto, President 

            

    

    

     

    
      	
               

            	
               

            	
               

            
	
               

            	
              Client:

            
	
              Date: 

            	
               

            	
              SONOMAWEST
                HOLDINGS, INC.

            
	
               

            	 
	
               

            	
              By:
                /s/ Walker R.
                Stapleton         
                

            
	
               

            	
              Walker
                R Stapleton, CEO 

            

    

    

     

    

     

    -6-

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