EXHIBIT 10.6

Mississippi Business Finance Corporation

and

Ingalls Shipbuilding, Inc.

Loan Agreement

Dated as of May 1, 1999

     The interest of Mississippi Business Finance Corporation in this Loan Agreement and all amounts receivable hereunder (except the right to receive payments, if any, under Sections 4.2(c), 5.2 and 6.3 hereof) has been assigned to The First National Bank of Chicago, as Trustee under the Indenture of Trust dated as of May 1, 1999 from the Mississippi Business Finance Corporation.

Loan Agreement

(This Table of Contents is not a part of
this Loan Agreement and is only for
convenience of reference)

Table of Contents

Section		Heading		Page
Article I		Definitions			1
Section 1.1.		Definition of Terms			1
Article II		Representations			4
Section 2.1.		Representations of the Issuer			4
Section 2.2.		Representations of the Company			5
Section 2.3.		Certain Benefits			6
Article III		Construction of the Project; Issuance of the Bonds			9
Section 3.1.		Agreement to Construct and Equip the Project			9
Section 3.2.		Agreement to Issue Bonds; Application of Bond Proceeds			10
Section 3.3.		Disbursements from the Construction Fund			10
Section 3.4.		Establishment of Completion Date; Obligation of the Company to Complete			11
Section 3.5.		Investment of Moneys in the Construction Fund, the Bond Fund and the Bond Purchase Fund			12
Article IV		Loan of Bond Proceeds; Loan Repayment Amounts; Other Amounts			12
Section 4.1.		Loan of Bond Proceeds			12
Section 4.2.		Loan Repayments; Other Amounts Payable			12
Section 4.3.		No Defense or Set-Off; Unconditional Obligation			14
Section 4.4.		Assignment of Issuer’s Rights			14
Article V		Special Covenants and Agreements			14
Section 5.1.		The Company to Maintain its Existence; Conditions Under Which Exceptions Permitted			14
Section 5.2.		Release and Indemnification Covenants			15
Section 5.3.		Insurance			15
Section 5.4.		Maintenance and Repair			15
Section 5.5.		Operation of Project			15
Section 5.6.		Insurance and Condemnation Awards			16
Section 5.7.		Qualification in State			16

Section		Heading		Page
Section 5.8.		Taxation Relating to Project			16
Section 5.9.		Recordation and Other Instruments			16
Section 5.10.		Compliance With Orders, Ordinances, Etc.			16
Article VI		Events of Default and Remedies			17
Section 6.1.		Events of Default			17
Section 6.2.		Remedies			18
Section 6.3.		Agreement to Pay Attorneys’ Fees and Expenses			18
Section 6.4.		No Remedy Exclusive			18
Section 6.5.		No Additional Waiver Implied by One Waiver			19
Article VII		Optional and Mandatory Prepayment			19
Section 7.1.		Obligation to Prepay Installments			19
Section 7.2.		Option to Prepay Installments			19
Section 7.3.		Amount of Prepayment in Certain Events			20
Section 7.4.		Option to Prepay Installments for Optional Redemption of Bonds			20
Section 7.5.		Notice of Prepayment			21
Section 7.6.		Redemption of Bonds With Prepayment Moneys			21
Article VIII		Miscellaneous			21
Section 8.1.		Notices			21
Section 8.2.		Assignments			22
Section 8.3.		Severability			22
Section 8.4.		Execution of Counterparts			22
Section 8.5.		Amounts Remaining in Any Fund With the Trustee			22
Section 8.6.		Amendments, Changes and Modifications			22
Section 8.7.		Governing Law			22
Section 8.8.		Authorized Representatives			22
Section 8.9.		Term of the Agreement			23
Section 8.10.		Binding Effect			23
Exhibit A		Description of Project			A-1

Loan Agreement

      This Loan Agreement, made and entered into as of May 1, 1999 by and between Mississippi Business Finance Corporation, a public corporation of the State of Mississippi, party of the first part (the “Issuer”), and Ingalls Shipbuilding, Inc. , a corporation organized and existing under the laws of the State of Delaware, party of the second part (the “Company”).

W i t n e s s e t h:

     In consideration of the respective representations and agreements herein contained, the parties hereto agree as follows (provided, that in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall be a limited obligation of the Issuer, payable solely out of the proceeds derived from this Loan Agreement, the sale of the Bonds, the income from the temporary investment thereof and moneys derived from the Guaranty, all as herein provided);

Article I

Definitions

      Section 1.1. Definition of Terms. Certain terms used in this Loan Agreement are hereinafter defined in this Section 1.1. When used herein, such terms shall have the meanings given to them by the language employed in this Article I defining such terms, and the plural includes the singular and the singular includes the plural, unless the context clearly indicates otherwise:

     “Act” means Sections 57-10-201 through 57-10-261, inclusive, and Sections 57-10-401 through 57-10-449, inclusive, of the Mississippi Code of 1972, as supplemented and amended.

     “Agreement” means this Loan Agreement as from time to time supplemented and amended.

     “Authorized Company Representative” means such person at the time and from time to time designated by written certificate furnished to the Issuer and the Trustee containing the specimen signature of such person and signed on behalf of the Company by the chairman, the president, any vice president, the treasurer or any assistant treasurer of the Company to act in behalf of the Company. Such certificate may designate an alternate or alternates.

     “Authorized Issuer Representative” means such person at the time and from time to time designated by written certificate furnished to the Company and the Trustee containing the specimen signature of such person and signed on behalf of the Issuer by its Executive Director to act in behalf of the Issuer. Such certificate may designate an alternate or alternates.

     “Bond Counsel” means Chapman and Cutler or such other nationally recognized municipal bond counsel of recognized expertise with respect to such matters as may be mutually satisfactory to the Issuer, the Company (so long as no event of default is then existing under Section 6.1 (a), (b), (c), (d) or (e) of this Agreement) and the Trustee.

     “Bond Fund” means the Bond Fund created and established in Section 5.2 of the Indenture.

     “Bonds” means the $83,700,000 aggregate principal amount of Economic Development Revenue Bonds (Ingalls Shipbuilding, Inc. Project) Taxable Series 1999A authorized to be issued by the Issuer pursuant to the terms and conditions of Sections 2.1 and 2.2 of the Indenture.

     “Code” means the Internal Revenue Code of 1986, as amended, together with any regulations promulgated thereunder or applicable thereto.

     “Company” means (i) Ingalls Shipbuilding, Inc., the party of the second part hereto, and its successors and assigns, and (ii) any surviving, resulting or transferee entity as permitted by Section 5.1 hereof.

     “Completion Date” means the date of completion of construction of the Project.

     “Construction Fund” means the Construction Fund created and established in Section 5.6 of the Indenture.

     “Construction Period” means the period between the beginning of construction of the Project or the date on which the Bonds are first delivered to the purchasers thereof, whichever is earlier, and the Completion Date.

     “Cost of the Project” means the sum of the items authorized to be paid from the Construction Fund pursuant to the provisions of Section 3.3 hereof.

     “Event of Default” means any occurrence or event specified as such in and defined as such by Section 6.1 hereof.

     “Indenture” means the Indenture of Trust, including any indentures supplemental thereto as therein permitted, between the Issuer and the Trustee, of even date herewith, pursuant to which certain of the Issuer’s interest in this Agreement is pledged as security for the payment of the principal of, and premium, if any, and interest on, the Bonds and moneys on deposit in the Bond Purchase Fund are held in trust for the benefit of the respective owners which have tendered Bonds for purchase.

     “Initial Administrative Fee” means the initial fee of the Issuer with respect to the Bonds in the amount of $30,000, which fee is required to be paid by the Company to the Issuer upon the initial delivery of Bonds hereunder.

     “Issuer” means the Mississippi Business Finance Corporation, the party of the first part hereto, and any successor body to the duties or functions of the Issuer.

     “Permitted Investments” means:

     (a) Direct obligations of the United States of America and Canada and obligations fully guaranteed by any agency thereof;

     (b) Direct obligations of, and obligations fully guaranteed by, any of the fifty states of the United States of America or the ten provinces of Canada rated a minimum of Aa2 by Moody’s or AA by S&P or any equivalent rating by any equivalent rating service (such rating requirement can be met by an attached letter of credit from any bank meeting the requirements stated in clause (e) and/or (f) below or by municipal bond insurance);

     (c) Indebtedness of any county or other local government body within the United States of America rated at least Aa2 by Moody’s or AA by S&P or any equivalent rating by any equivalent rating service (such rating requirement can be met by an attached letter of credit from any bank meeting the requirements stated in clause (e) and/or (f) below or by municipal bond insurance);

     (d) Indebtedness of any corporation rated at least Aa2 by Moody’s or AA by S&P or any equivalent rating by any equivalent rating service or any commercial paper of any corporation rated at least P-2 by Moody’s or A-2 by S&P or any equivalent rating by any equivalent rating service;

     (e) Certificates of deposit, banker’s acceptances or time deposits of any commercial bank, branch or Edge Act (12 USC 611 et seq.) branch which is a member of the Federal Reserve System, has a net worth of at least $100 million and whose debt service has an A prefix by McCarthy Crisanti & Maffei, Inc., Moody’s or S&P or any equivalent rating by any equivalent rating service;

     (f) Certificates of deposit, banker’s acceptances or time deposits of any non-U.S. commercial bank which is ranked among the 100 largest banks in the world (by assets, as ranked by the American Banker Journal), has a net worth of at least $500 million and rated B/C or better by International Business Communications Ltd. or Thomson BankWatch, Inc. rating service or any equivalent rating by any equivalent rating service;

     (g) Repurchase agreements or reverse repurchase agreements with financial institutions whose commercial paper is rated at least P-1 by Moody’s or A-1 by S&P or whose debt rating is at least Aa2 by Moody’s or AA by S&P, or any bank who meets the requirements as stated in clause (e) and/or (f) above, provided that in all cases the market value of the collateral used for such transactions must be adequate to insure safety, liquidity and preservation of capital: Aaa or AAA-102%, Aa2 or AA-110%; and

          (h) Securities and Exchange Commission Rule 2a-7 money market funds with a net asset value of one and a parent company rating of P-1 or better by Moody’s or A-1 or better by S&P or any equivalent rating by any equivalent rating service.

     “Plans and Specifications” means the plans and specifications prepared for the Project by the Company, as amended from time to time prior to the Completion Date, which plans and specifications are on file at the Principal Office of the Company.

     “Plant” means the shipbuilding complex in Jackson County, Mississippi which is owned and operated by the Company.

     “Project” means those items of machinery, equipment, structures and related property acquired and constructed or installed with proceeds from the sale of the Bonds or the proceeds of any payment by the Company pursuant to Section 3.4 of this Agreement, as more particularly described in Exhibit A hereto.

     “Trustee” means the Trustee and/or co-trustee at the time serving as such under the Indenture.

     The words “hereof,” “herein,” “hereunder” and other words of similar import refer to this Agreement as a whole.

     Unless otherwise specified, references to Articles, Sections, and other subdivisions of this Agreement are to the designated Articles, Sections, and other subdivisions of this Agreement as originally executed.

     The headings of this Agreement are for convenience only and shall not define or limit the provisions hereof.

     Terms defined in the Indenture and used herein shall have the same meaning herein as set forth in the Indenture.

Article II

Representations; Certain Benefits

      Section 2.1. Representations of the Issuer. The Issuer makes the following representations as the basis for the undertakings on its part herein contained:

          (a) The Issuer is a public corporation duly organized and validly existing under the Constitution and laws of the State. The Issuer has the power, pursuant to the provisions of the Act, to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. By proper action of the Issuer, the Issuer has been duly authorized to execute and deliver this Agreement and the Indenture.

     (b) To finance a portion of the Cost of the Project, the Issuer will issue its Bonds, which will mature, bear interest and be subject to redemption as set forth in the Indenture.

     (c) The Bonds are to be issued under and secured by the Indenture, pursuant to which certain of the Issuer’s interests in this Agreement will be pledged to the Trustee as security for payment of the principal of, premium, if any, and interest on the Bonds.

     (d) The Issuer has not and will not pledge or otherwise transfer its interest in this Agreement other than to the Trustee to secure the Bonds.

     (e) The Issuer, to its knowledge, is not in default under any of the provisions of the laws of the State which default would affect its existence or its powers referred to in subsection (a) of this Section 2.1.

     (f) The issuance of the Bonds for the purpose of financing Cost of the Project will further the public purposes of the Act.

     (g) The Company qualifies as an eligible company within the meaning of the Act.

     (h) All requirements of the Act have been complied with in connection with the issuance and sale of the Bonds and the execution of this Agreement and the Indenture.

     (i) No official or officer of the Issuer has any interest, financial, employment or otherwise, in the Company or in the transactions contemplated hereby, prohibited by any statute or rule of law of the State.

      Section 2.2. Representations of the Company. The Company makes the following representations as the basis for the undertakings on its part herein contained:

     (a) The Company is a corporation duly organized and validly existing under the laws of the State of Delaware and is in good standing and is duly qualified to do business in the State of Mississippi and has power to enter into and by proper action has been duly authorized to execute and deliver this Agreement.

     (b) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement conflicts with or results in a breach of any of the terms, conditions or provisions of the Company’s Restated Certificate of Incorporation, any other organizational restriction or any agreement or instrument to which the Company is now a party or by which it is bound, or (with or without the giving of notice or the lapse of time, or both) constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance prohibited by the terms of any instrument or agreement to which the Company is now a party or by which it is bound.

          (c) The loan of the proceeds of the Bonds by the Issuer to the Company hereunder is not being made to finance any existing debt except for the repayment of existing debt which qualifies as a Cost of the Project.

      Section 2.3. Certain Benefits. (a) The parties hereto acknowledge that the Company has been induced to proceed with the Project in part by the benefits conferred by the Act. The Issuer hereby agrees that the Company shall be permitted to take advantage of all of the benefits provided by the Act to the fullest extent therein set forth subject to the rules and regulations of the Issuer to the extent that such rules are applicable to the Project.

          (b) With respect to income tax credits conferred by the Act referenced in (a) above, and all calculations in connection therewith, the following shall apply:

	(1)		the maximum income tax credit to be utilized in any taxable year of the Company (“ Taxable Year” ) is 80% of the tax liability and shall not exceed the payments of the principal of, premium, if any and interest payments on the Bonds during such year and the fees and expenses of the Trustee and any other fees and expenses referenced herein.
	(2)		the deductibility of interest payments on the Bonds shall be determined in accordance with applicable Mississippi law.
	(3)		the Company shall request the Trustee to provide the Issuer, not later than ninety (90) days after the end of each Taxable Year, with a certificate setting forth the amount of all payments made to the Trustee with respect to the Bonds whether for principal, premium, interest or the fees and expenses of the Trustee.
	(4)		it is understood that as an expansion to an existing manufacturing enterprise, the economic development project to be financed with the proceeds of the Bonds will generate an income tax credit in an amount equal to the annual payments on the Bonds as provided in this Agreement and the Indenture (which are described in the Act as “total debt service paid under a financing agreement”), subject to the following formula calculation which is based on guidelines promulgated by the Issuer, particularly Section 1 of the Issuer’s Rural Economic Development (RED) Guidelines which were modified effective July 1, 1998 (the “MBFC Guidelines” ). In no case may the credit exceed 80% of the taxpayer’s liability in a tax year.

i.

The Company shall establish an existing employment base which shall be the average number of employees reported by the Company to the Mississippi Employment Security Commission for twelve (12) months preceding November 1, 1997 (the first day of the month during which the Company was induced for financing by the Issuer for the Project). This amount shall constitute the “Employment Base” for the entire term of this Agreement and for the three years after the end of the term of this Agreement.

	ii.		Commencing with the 1998 Taxable Year and for each Taxable Year thereafter throughout the term of this Agreement, the Company shall compute the average number of employees in Mississippi reported by the Company to the Mississippi Employment Security Commission (the “Future Employment Base”) and calculate the percentage increase of such employees over the Employment Base. (As noted, this percentage shall be adjusted annually.)
	iii.		The percentage of total increased employment described in (ii) above is determined by subtracting the Employment Base (as defined in (i) above) from the Future Employment Base, dividing the result by the Future Employment Base and then converting the resulting fraction to a percentage.
	iv.		The Company shall establish the present value of the Company’s capital assets located in Mississippi by using the true value as reflected on the personal and real property tax rolls of the tax assessor of the county where the Company’s existing plants are located as of the most recent assessment date(s) immediately prior to commencement of the Project. This amount shall constitute the “Capital Asset Base” for the entire term of this Agreement. Since work on the Project commenced in August, 1997, the Capital Asset Base will be the true value of the personal property as reflected on the Company’s January 1, 1997 rendition form, plus the true value of the real property as reflected on the tax rolls of the county where the Company’s existing plants are located as of January 1, 1997.
			The percentage of the capital investment increase will be determined by dividing the cost of the new fixed assets by the total value of the Company’s capital assets upon completion of the Project, as determined by the tax assessors of the counties in which the Company has facilities and then converting the resulting fraction to a percentage.
	v.		For the 1999 Taxable Year, the Company shall calculate the percentage of its capital investment increase by using a formula, the numerator of which shall consist of the cost of the fixed assets in connection with the Project purchased from November 1, 1997 through July 31, 1999 with bond proceeds (including the proceeds of any bonds previously issued by the Issuer on behalf of the Company) or Company Equity (as defined in the MBFC Guidelines), and the denominator of which shall consist of (a) the cost of the fixed assets purchased from November 1, 1997 through July 31, 1999 with bond proceeds (including the proceeds of any bonds previously issued by the Issuer on behalf of the Company) or Company Equity, plus (b) the Capital Asset Base.

	vi.		For each subsequent Taxable Year until the Taxable Year following the Completion Date, the Company shall calculate the percentage of its capital investment increase by using the following formula:
			Numerator: (a) Cost of fixed assets in connection with the Project purchased during each respective Taxable Year with bond proceeds (including the proceeds of any bonds previously issued by the Issuer on behalf of the Company) or Company Equity excluding the cost of fixed assets purchased in such Taxable Year from August 1 through December 31 of such Taxable Year, plus (b) the total true value of the fixed assets in connection with the Project purchased from November 1, 1997 through the assessment date that occurs in such subsequent Taxable Year with bond proceeds (including the proceeds of any bonds previously issued by the Issuer on behalf of the Company) or Company Equity, as reflected on the real and personal property tax rolls for that assessment date.
			Denominator: (a) Cost of fixed assets in connection with the Project purchased during such subsequent Taxable Year with bond proceeds (including the proceeds of any bonds previously issued by the Issuer on behalf of the Company) or Company Equity excluding the cost of fixed assets purchased in such Taxable Year from August 1 through December 31 of such Taxable Year, plus (b) the total true value of the fixed assets at the Company’s Mississippi Plants as of the assessment date that occurs in such subsequent Taxable Year.
	vii.		For the Taxable Year following the Completion Date, the Company shall calculate the percentage of its capital investment increase by using a formula, the numerator of which shall consist of the true value of the fixed assets in connection with the Project of the Company purchased since November 1, 1997 with bond proceeds (including the proceeds of any bonds previously issued by the Issuer on behalf of the Company) or Company Equity, and the denominator of which shall consist of the true value of the fixed assets located at the Company’s Mississippi plants (which shall include the Project) as reflected on the real and personal property tax rolls as of the most recent assessment date. This quotient calculated with respect to the year following the Completion Date shall be used for such Taxable Year and all future years without adjustment.
	viii.		The Company shall compute its “Economic Tax Valuation Percentage” for each Taxable Year by multiplying the employment increase percentage (determined in (ii) above) by two (2), adding the percentage of capital investment increase (determined in (v), (vi) or (vii) above, as the case may be), and then dividing by three (3).

ix.

The Economic Tax Valuation Percentage shall then be applied to the Company’s Mississippi taxable income in order to determine the amount of income generated by or arising out of the Project for purposes of calculating the Company’s income tax liability which may be offset by the income tax credit provided under Section 57-10-409(d)(i) of the Act.

	(5)		the income tax credits provided by the Act may not be carried forward beyond three years following the year all of the Bonds are redeemed, whether by maturity, acceleration or redemption.
	(6)		the benefits accruing to the Company under this Section 2.3 shall cease in the event:

	(A)		a default should occur and be continuing under this Agreement or the Indenture; or
	(B)		the Company should fail to operate the Project for a period of nine (9) consecutive months following the initial start up of the Project except for force majeure, strikes, lockouts, damage, destruction, acts of God or in general, reasons beyond the Company’s reasonable control excepting, however, general economic conditions.

          With respect to the benefits that may accrue to the Company under this Section 2.3, the Company acknowledges and agrees that the Issuer makes no representation, warranty or covenant regarding the enforceability of the Company’s rights to receive the benefits, the extent that such benefits may be received nor the term under which the Company may be entitled to receive the benefits.

Article III

Construction of the Project; Issuance of the Bonds

      Section 3.1. Agreement to Construct and Equip the Project. The Company agrees that it will acquire or construct, or complete the acquisition and construction of, the Project in Jackson County, Mississippi substantially in accordance with the Plans and Specifications.

          In the event that Exhibit A hereto is to be amended or supplemented in accordance with the provisions of Section 11.1 of the Indenture, the Issuer will enter into, and will instruct the Trustee to consent to, an amendment of or supplement to Exhibit A hereto upon receipt of:

     (i) a certificate of an Authorized Company Representative describing in detail the proposed changes; and

     (ii) a copy of the proposed form of amendment or supplement to Exhibit A hereto and such other documents, certificates and showings as may be required by counsel rendering the opinion in clause (iii) of this paragraph; and

     (iii) an opinion of Bond Counsel to the effect that such amendment complies with the requirements of this Section 3.1, is in proper form for execution and delivery by the Issuer and will not adversely affect the validity of the Bonds.

      Section 3.2. Agreement to Issue Bonds; Application of Bond Proceeds. In order to provide funds to finance all or a portion of the Cost of the Project, the Issuer agrees that it will issue under the Indenture, sell and cause to be delivered to the Underwriter, the Bonds, bearing interest and maturing as set forth in the Indenture. The Issuer will cause the accrued interest, if any, received upon the delivery of the Bonds to be deposited in the Bond Fund and the balance of the proceeds (net of underwriting discount, if any) received from the sale of the Bonds to be deposited in the Construction Fund.

      Section 3.3. Disbursements from the Construction Fund. The Issuer hereby authorizes and directs the Trustee, upon compliance with Section 5.7 of the Indenture, to disburse the moneys in the Construction Fund to or on behalf of the Company for the following purposes (but, subject to the provisions of Sections 3.4 and 3.5 hereof, for no other purpose):

     (a) Payment to the Company of such amounts, if any, as shall be necessary to reimburse the Company in full for all advances and payments made by it at any time prior to or after the delivery of the Bonds for expenditures in connection with the preparation of the Plans and Specifications (including any preliminary study or planning of the Project or any aspect thereof) and the construction and acquisition of the Project.

     (b) Payment of the initial or acceptance fee of the Trustee, legal, financial and accounting fees and expenses, the Issuer’s fees and expenses, Rating Agency fees, original issue discount, and printing and engraving costs incurred in connection with the authorization, issuance and sale of the Bonds, the execution and filing of the Indenture and the preparation and recording or filing of all other documents in connection therewith, and payment of all fees, costs and expenses for the preparation of this Agreement, the Indenture and all other documents in connection with the authorization, issuance and sale of the Bonds.

     (c) Payment for labor, services, materials and supplies used or furnished in the construction and acquisition of the Project, and payment of amounts due under contracts for the acquisition, construction and installation of the Project, all as provided in the plans, specifications and work orders therefor.

     (d) Payment of the fees, if any, for architectural, engineering, legal, underwriting and supervisory services with respect to the Project.

     (e) To the extent not paid by a contractor for construction or installation with respect to any part of the Project, payment of the premiums on all insurance required to be taken out and maintained during the Construction Period.

          (f) Payment of the taxes, assessments and other charges, if any, that may become payable during the Construction Period with respect to the Project, or reimbursement thereof if paid by the Company.

          (g) Payment of expenses incurred in seeking to enforce any remedy against any contractor or subcontractor in respect of any default under a contract relating to the Project.

          (h) Interest on the Bonds during the Construction Period.

          (i) Payment of any other costs which constitute part of the cost of the Project in accordance with generally accepted accounting principles and which are permitted by the Act.

     All moneys remaining in the Construction Fund after the Completion Date and after payment or provision for payment of all other items provided for in the preceding subsections (a) to (j), inclusive, of this Section, shall at the direction of the Company be used in accordance with Section 3.4 hereof.

      Section 3.4. Establishment of Completion Date; Obligation of the Company to Complete. As soon as practicable after the completion of construction of the Project, and in any event not more than ninety (90) days thereafter, the Company shall furnish to the Trustee a certificate signed by an Authorized Company Representative stating (i) that construction of the Project has been completed substantially in accordance with the Plans and Specifications, (ii) the Completion Date, (iii) the Cost of the Project, (iv) the portion of the Cost of the Project which has then been paid and (v) the portion of the Cost of the Project which has not yet then been paid. Such certificate may state that it is given without prejudice to any rights against third parties which exist at the date of such certificate or which may subsequently come into being.

          Moneys (including investment proceeds) remaining in the Construction Fund on the date of such certificate may be used, at the direction of an Authorized Company Representative, to the extent indicated, for the payment, in accordance with the provisions of this Agreement, of any Cost of the Project not then paid as specified in the above-mentioned certificate. Any moneys (including investment proceeds) remaining in the Construction Fund on the date of the aforesaid certificate and not so set aside for the payment of such Cost of the Project shall be used as soon as practicable to redeem Bonds in accordance with Section 3.1(d) of the Indenture.

          In the event the moneys in the Construction Fund available for payment of the Cost of the Project should not be sufficient to pay the costs thereof in full, the Company agrees to pay directly, or to deposit in the Construction Fund moneys sufficient to pay, the costs of completing the Project as may be in excess of the moneys available therefor in the Construction Fund. The Issuer does not make any warranty, either express or implied, that the moneys which will be paid into the Construction Fund and which, under the provisions of this Agreement, will be available for payment of the Cost of the Project, will be sufficient to pay all the costs which will be incurred in that connection. The Company agrees that if after exhaustion of the moneys in the Construction Fund the Company should pay, or deposit moneys in the Construction Fund for the

payment of, any portion of the Cost of the Project pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefor from the Issuer or from the Trustee or from the owners of any of the Bonds, nor shall it be entitled to any diminution of the loan repayment installments or other amounts payable under Section 4.2 hereof.

      Section 3.5. Investment of Moneys in the Construction Fund, the Bond Fund and the Bond Purchase Fund. Any moneys held as a part of the Construction Fund or the Bond Fund shall at the written direction (or the oral direction confirmed in writing) of an Authorized Company Representative as to specific investments be invested or reinvested by the Trustee as provided in Article VI of the Indenture, to the extent permitted by law, in Permitted Investments. Any such direction shall certify that any investment so directed to be made constitutes a Permitted Investment and that such investment is permitted to be made under the Indenture and the Agreement. The Trustee may make any and all such investments through its own trust investment department. The investments purchased pursuant to this Section 3.5 and Article VI of the Indenture shall be held by the Trustee and shall be deemed at all times a part of the Construction Fund or the Bond Fund, as the case may be, and the interest accruing thereon and any profit realized therefrom shall be credited to such fund and any net losses resulting from such investment shall be charged to such fund.

Article IV

Loan of Bond Proceeds; Loan Repayment Amounts; Other Amounts

      Section 4.1. Loan of Bond Proceeds. The Issuer hereby agrees, upon the terms and conditions in this Agreement, to lend to the Company the proceeds (exclusive of accrued interest, if any) received by the Issuer from the sale of the Bonds.

      Section 4.2. Loan Repayments; Other Amounts Payable. (a) On or before each date provided in or pursuant to the Indenture for the payment of principal of, premium, if any, and/or interest on the Bonds, until the principal of, premium, if any, and interest on the Bonds shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Indenture, the Company covenants and agrees to pay to the Trustee in federal or other immediately available funds at the Principal Office of the Trustee for deposit in the Bond Fund, as a loan repayment installment pursuant to Section 4.1 hereof, a sum equal to the amount payable on such date as principal (whether at maturity, or upon redemption or acceleration), premium, if any, and interest upon the Bonds as provided in the Indenture; provided, however, that the obligation of the Company to make any such payment shall be reduced by the amount of moneys on deposit in the Bond Fund on any such date and ^: available to pay the principal of and premium, if any, and interest on the Bonds on such date (excluding moneys on deposit in the Bond Fund for the payment of past due principal of or premium, if any, or interest on Bonds in cases where Bonds have not been presented for payment or interest checks have not been cashed); provided further, that in any event the payments under this Section 4.2(a) shall at all times be sufficient to pay the principal of and premium, if any, and interest on the Bonds, and if on any date on which the payment of the principal of or premium, if any, or interest on Bonds is due, the Trustee shall not have sufficient moneys on deposit in the Bond Fund and available therefor to make each such payment in full, the Company shall immediately pay to the Trustee in

immediately available funds an amount equal to such deficiency. Each payment made pursuant to this Section 4.2(a) shall be made during normal banking hours. In the event the Company should fail to make any of the payments required in this Section 4.2(a), the item or installment so in default shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon to the extent permitted by law at the rate of interest borne by the Bonds from the due date thereof until paid.

     To secure its obligation to make the payments required under this Section 4.2(a), the Company agrees to cause the Guaranty to be issued and delivered to the Trustee on or prior to the date of the initial delivery to and payment for Bonds by the Initial Purchaser. The obligation of the Company to make payments under this Section 4.2(a) shall be fully or partially, as the case may be, satisfied and discharged to the extent that, at the time any such payments shall be due or owing, payment of the principal of, premium, if any, and interest on the Bonds which would have been paid with such payments shall be paid (or provision for such payment shall be made as set forth in the Indenture) with amounts received by the Trustee from (i) moneys realized under the Guaranty or (iii) any other source under the Indenture so long as the amounts are available for such purpose.

     (b) The Company agrees to pay the Trustee (1) the reasonable costs and expenses of the Trustee, including reasonable attorneys’ fees and expenses, incurred by the Trustee in entering into and executing the Indenture and (2) (i) an amount equal to the reasonable annual fee of the Trustee for the ordinary services of the Trustee, as trustee, rendered and its reasonable ordinary expenses incurred under the Indenture, as and when the same become due, (ii) the reasonable fees, charges and expenses of the Trustee, as paying agent, as tender agent and as bond registrar, as and when the same become due and (iii) the reasonable fees, charges and expenses (including reasonable attorneys’ fees and expenses) of the Trustee for any reasonable extraordinary services rendered by it and extraordinary expenses incurred by it under the Indenture, as and when the same become due. The Company further agrees to indemnify the Trustee, including its officers, directors, employees and agents, for, and to hold the Trustee harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with the issuance or sale of the Bonds or the acceptance or administration of the trusts under the Indenture, this Agreement and the Guaranty, 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 and duties under the Indenture. In the event the Company should fail to make any of the payments required in this Section 4.2(b), the item or installment so in default shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon to the extent permitted by law at the prime rate of the Trustee at the time of such failure from the due date thereof until paid.

     (c) The Company also agrees to pay when due, upon written request, or to promptly reimburse the Issuer for (i) all costs incurred by the Issuer in connection with the financing and administration of the Project, except as may be paid out of the proceeds of the Bonds, including without limitation, any necessary expenses incurred by the Board of Directors or any officer of the Issuer while engaged in the performance of their duties as such commissioners or officers of the Issuer, (ii) the reasonable fees and expenses of counsel to the Issuer and (iii) all publication, filing and recording fees. In the event the Company should fail to make any of the payments

required in this Section 4.2(c), the item or installment so in default shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon to the extent permitted by law at the rate of interest borne by the Bonds from the due date thereof until paid.

          (d) The Trustee’s rights to immunities and protection from liability hereunder and its right to payment of its fees, expenses and indemnities shall survive its resignation or removal and the final payment or defeasance of the Bonds.

      Section 4.3. No Defense or Set-Off; Unconditional Obligation. The obligations of the Company to make the payments required in Section 4.2 hereof and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional, irrespective of any defense or any rights of set-off, recoupment or counterclaim it might otherwise have against the Issuer or the Trustee, and the Company shall pay absolutely net during the term of this Agreement the payments to be made as prescribed in Section 4.2 and all other payments required hereunder free of any deductions and without abatement, diminution or set-off; and, except as provided in Section 4.2(d) hereof, until such time as the principal of, premium, if any, and interest on the Bonds shall have been fully paid, or provision for the payment thereof shall have been made in accordance with the Indenture, the Company: (i) will not suspend or discontinue any payments provided for in Section 4.2 hereof; (ii) will perform and observe all of its other agreements contained in this Agreement; and (iii) except as provided in Article VII hereof, will not terminate this Agreement for any cause, including, without limiting the generality of the foregoing, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax laws of the United States of America or of the State or any political subdivision of either of these, or any failure of the Issuer or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement or the Indenture, except to the extent permitted by this Agreement.

      Section 4.4. Assignment of Issuer’s Rights. As security for the payment of the Bonds, the Issuer will assign to the Trustee the Issuer’s rights under this Agreement, including the right to receive payments hereunder (except the right to receive payments, if any, under Sections 4.2(c), 5.2 and 6.3 hereof), and hereby directs the Company to make said payments directly to the Trustee. The Company herewith assents to such assignment and will make such payments directly to the Trustee without defense or set-off by reason of any dispute between the Company and the Issuer or the Trustee.

Article v

Special Covenants and Agreements

      Section 5.1. The Company to Maintain its Existence; Conditions Under Which Exceptions Permitted. The Company agrees that during the term of this Agreement it will maintain its existence, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another entity or permit one or more entities to consolidate with or merge into it; provided that the Company may, without violating the

agreement contained in this Section, consolidate with or merge into another entity, or permit one or more entities to consolidate with or merge into it, or sell or otherwise transfer to another entity all or substantially all of its assets as an entirety and thereafter dissolve, provided, the surviving, resulting or transferee entity, as the case may be, if it is other than the Company, (i) is qualified to do business in the State, and (ii) assumes in writing all of the obligations of the Company under this Agreement.

      Section 5.2. Release and Indemnification Covenants. The Company releases the Issuer (and its commissioners, officers, employees and agents) from and covenants and agrees that the Issuer shall not be liable for, and to indemnify and hold the Issuer (and its commissioners, officers, employees and agents) harmless against, any loss or damage to property or any injury to or death of any person occurring on or about or resulting from the Project or the operation thereof; including, without limiting the generality of the foregoing, all causes of action and attorneys’ fees and any other expenses incurred in defending any suits or actions which may arise as a result of any of the foregoing. The Company further releases the Issuer (and its commissioners, officers, employees and agents) from and covenants and agrees that the Issuer (and its commissioners, officers, employees and agents) shall not be liable for, and to indemnify and hold the Issuer harmless against, any liability resulting from or related to the issuance or sale of the Bonds; including, without limiting the generality of the foregoing, all causes of action and attorneys’ fees and any other expenses incurred in defending any suits or actions which may arise as a result of any of the foregoing.

      Section 5.3. Insurance. The Company agrees to maintain, or cause to be maintained, all necessary insurance with respect to the Project in accordance with its customary insurance practices, which may include self-insurance. All costs of maintaining insurance with respect to the Project shall be paid by the Company, and the Issuer shall have no obligation or liability in this regard.

      Section 5.4. Maintenance and Repair. The Company agrees that it will (i) maintain, or cause to be maintained, the Project in as reasonably safe condition as its operations shall permit and (ii) maintain, or cause to be maintained, the Project in good repair and in good operating condition, ordinary wear and tear excepted, making from time to time all necessary repairs thereto and renewals and replacements thereof. All costs of operating and maintaining the Project shall be paid by the Company, and the Issuer shall have no obligation or liability in this regard.

      Section 5.5. Operation of Project. Although the Company intends to operate, or cause to be operated, the Project for its designed purposes until the date on which no Bonds are outstanding, the Company is not required by this Agreement to operate, or cause to be operated, any portion of the Project after the Company shall deem in its discretion that such continued operation is not advisable, and in such event it is not prohibited by this Agreement from selling, leasing or retiring all or any such portion of the Project. The net proceeds from such sale, lease or other disposition, if any, shall belong to, and may be used for any lawful purpose by, the Company. No such sale, lease or other disposition of all or any portion of the Project shall reduce or otherwise affect the Company’s obligation to pay amounts under Article IV hereof.

      Section 5.6. Insurance and Condemnation Awards. The net proceeds of any insurance or condemnation award as a result of the destruction or condemnation of the Project or any portion thereof shall belong to, and may be used for any lawful purpose by, the Company.

      Section 5.7. Qualification in State. The Company agrees that throughout the term of this Agreement it will be qualified to do business in the State.

      Section 5.8. Taxation Relating to Project. During the term of this Agreement, the Company will promptly remit when due any taxes, assessments or other charges levied or imposed in respect of the Project or the installments payable hereunder to the appropriate taxing body. The Company may, at its own expense and in its own name, in good faith contest any such taxes, assessments and other charges and, in the event of such contest, may permit the taxes, assessments or other charges contested to remain unpaid during the period of such contest and any appeal therefrom if permitted by applicable law. All taxes, assessments and other charges levied or imposed with respect to the Project shall be the obligation of the Company, and the Issuer shall have no obligation or liability in this regard.

      Section 5.9. Recordation and Other Instruments. In order to perfect the security interest of the Trustee in the Trust Estate, the Company will cause such security agreements or financing statements, to be duly filed and recorded in the appropriate state and county offices as required by the provisions of the Uniform Commercial Code or other similar law as adopted in the State, as from time to time amended. To continue the perfection of the security interest evidenced by such security agreements or financing statements, the Company shall file and record such necessary continuation statements or supplements thereto and other instruments from time to time as may be required pursuant to the provisions of said Uniform Commercial Code or other similar law to fully preserve and protect the security interest of the Trustee in the Trust Estate. The Issuer, at the expense of the Company, shall execute and cause to be executed any and all further instruments as shall be reasonably requested by the Trustee for such protection and perfection of the interests of the Trustee and the Bondholders, and the Company shall file and refile such instruments which shall be necessary to preserve and perfect the lien of the Indenture upon the Trust Estate until the principal of, premium, if any, and interest on the Bonds issued thereunder shall have been paid or provision for their payment shall be made as therein provided.

      Section 5.10. Compliance With Orders, Ordinances, Etc. The Company agrees that it will use its best efforts promptly to comply with all statutes, codes, laws, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of all federal, state, county, municipal and other governmental authorities, foreseen or unforeseen, ordinary or extraordinary, which now or at any time hereafter may be applicable to the Project or any part thereof, or to any use, manner of use or condition of the Project or any part thereof.

Article VI

Events of Default and Remedies

      Section 6.1. Events of Default. The occurrence and continuation of any one of the following shall constitute an Event of Default:

     (a) failure by the Company to pay any amount required to be paid under Section 4.2(a) hereof with respect to principal of or premium on any Bond on the dates and at the time specified therein; or

     (b) failure by the Company to pay any amount required to be paid under Section 4.2(a) hereof with respect to interest on any Bond on the dates and at the time specified therein; or

     (c) failure by the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Agreement, other than as referred to in (a) or (b) above, for a period of 30 days after receipt by the Company of written notice, specifying such failure and requesting that it be remedied, given to the Company by the Issuer (with a copy to the Trustee) or the Trustee, unless the Issuer and the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice can be corrected but not within such 30-day period, no Event of Default shall have occurred if corrective action is instituted by the Company within such period and diligently pursued until the default is corrected; or

     (d) the dissolution or liquidation of the Company or the filing by the Company of a voluntary petition in bankruptcy, or failure by the Company promptly to cause to be lifted any execution, garnishment or attachment of such consequence as will impair the Company’s ability to carry on its obligations hereunder, or the commission by the Company of any act of bankruptcy, or adjudication of the Company as a bankrupt, or if a petition or answer proposing the adjudication of the Company as a bankrupt or its reorganization, arrangement or debt readjustment under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety days after the filing thereof, or if the Company shall admit in writing its inability to pay its debts generally as they become due, or a receiver, trustee or liquidator of the Company shall be appointed in any proceeding brought against the Company and shall not be discharged within ninety days after such appointment or if the Company shall consent to or acquiesce in such appointment, or assignment by the Company for the benefit of its creditors, or the entry by the Company into an agreement of composition with its creditors, or a bankruptcy, insolvency or similar proceeding shall be otherwise initiated by or against the Company under any applicable bankruptcy, reorganization or analogous law as now or hereafter in effect and if initiated against the Company shall remain undismissed (subject to no further appeal) for a period of ninety days; provided, the term “dissolution or liquidation of the Company,” as used in this subsection, shall not be construed to include the cessation of the existence of the Company resulting either from a merger or consolidation

of the Company into or with another entity or a dissolution or liquidation of the Company following a transfer of all or substantially all of its assets as an entirety or under the conditions permitting such actions contained in Section 5.1 hereof; or

     (e) the occurrence of an “event of default” under the Indenture.

      Section 6.2. Remedies. Whenever any Event of Default shall have happened and is subsisting, the Trustee may take any one or more of the following remedial steps, subject to Article IX of the Indenture:

     (a) By notice in writing to the Company, declare the unpaid loan repayment installments payable under Section 4.2(a) of this Agreement to be due and payable immediately, if concurrently with or prior to such notice the unpaid principal amount of the Bonds has become or has been declared to be due and payable under the Indenture, and upon any such declaration under this Section 6.2(a) the amounts payable under Section 4.2(a) hereof shall become and shall be immediately due and payable in the amount set forth in Section 8.2 of the Indenture; provided, however, that an Event of Default shall be deemed waived and a declaration accelerating payment of unpaid loan repayment installments payable under Section 4.2(a) of this Agreement shall be deemed rescinded without further action on the part of the Trustee or the Issuer upon any rescission by the Trustee of the corresponding declaration of acceleration of the Bonds under Section 8.11 of the Indenture. The Trustee shall as soon as possible after any such declaration provide the Company with written notice thereof.

     (b) Whatever action at law or in equity may appear necessary or desirable to collect the payments and other amounts then due or to enforce performance and observance of any obligation, agreement or covenant of the Company under this Agreement.

       In case the Trustee shall have proceeded to enforce its rights under this Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee, then and in every such case the Issuer, the Company and the Trustee shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Company and the Trustee shall continue as though no such proceeding had been taken.

      Section 6.3. Agreement to Pay Attorneys’ Fees and Expenses. In the event the Company should default under any of the provisions of this Agreement and the Issuer or the Trustee should employ attorneys or incur other expenses for the collection of the payments due under this Agreement or the enforcement of performance or observance of any obligation or agreement on the part of the Company herein contained, the Company agrees that it will on demand therefor pay to the Issuer or the Trustee the reasonable fees and expenses of such attorneys and such other reasonable expenses so incurred by the Issuer or the Trustee.

      Section 6.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other available remedy or remedies, but each and

every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute, except that the remedy of acceleration shall be exercised only in the manner set forth in Section 6.2(a) hereof. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Such rights and remedies as are given the Trustee hereunder are also for the benefit of the Issuer and the owners of the Bonds, and the Issuer and the owners of the Bonds shall be deemed third party beneficiaries of all covenants and agreements herein contained. In order to entitle the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be herein expressly required.

      Section 6.5. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by the Company and thereafter waived by the Trustee, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

Article VII

Optional and Mandatory Prepayment

      Section 7.1. Obligation to Prepay Installments. The Company shall have the obligation to prepay installments payable hereunder in whole (or in the case of the event stated in (b) of this Section 7.1 in whole or in part), if any of the following shall have occurred:

     (a) As a result of any changes in the Constitution of the State or the Constitution of the United States of America or by legislative or administrative action (whether state or federal) or by final decree, judgment or order of any court or administrative body (whether state or federal) this Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in this Agreement; or

     (b) Proceeds of the Bonds, including income from the investment thereof, shall remain after completion of the Project and the payment of the Cost of the Project.

     In case of the event stated in Section 7.1(b) hereof, the Company agrees it will fulfill its obligation and prepay within 180 days after the Company has notice or actual knowledge of such event.

      Section 7.2. Option to Prepay Installments. The Company shall have the option to prepay the installments payable hereunder in whole, but not in part, if any of the following shall have occurred:

     (a) The Project or the Plant shall have been damaged or destroyed (in whole or in part) by fire or other casualty to such extent that in the opinion of the Company it is not practicable or desirable to rebuild, repair or restore the Project or the Plant; or

     (b) Title to, or the temporary use of, all or substantially all the Project or the Plant shall have been taken under the exercise of the power of eminent domain by any governmental authority, or person, firm or corporation acting under governmental authority.

      Section 7.3. Amount of Prepayment in Certain Events. To fulfill the obligation set forth in Section 7.1 hereof or to exercise an option granted in Section 7.2 or 7.4 hereof, the Company shall give written notice to the Issuer and to the Trustee as provided in Section 7.5 hereof. Such notice shall specify the date for the prepayment of the installments which shall be on or before the redemption date for the Bonds (the date for redemption of the Bonds being hereinafter called the “Redemption Date”).

     The amount payable by the Company in the event of its exercise of the obligation set forth in Section 7.1(a) hereof and the option granted in Section 7.2 hereof to prepay installments in whole shall be the sum of the following:

     (1) an amount of money which, when added to the amount then on deposit in the Bond Fund, will be sufficient to redeem (or when invested in Governmental Obligations in which such money is required to be invested will without reinvestment mature as to principal and interest, if any, at times and in amounts sufficient to redeem) the outstanding Bonds on the Redemption Date, which amount shall consist of the principal amount thereof, all interest accrued and to accrue to the Redemption Date and expenses incurred or to be incurred in connection with the prepayment of installments and the redemption of the Bonds,

     (2) an amount of money equal to the Trustee’s fees and expenses under the Indenture accrued and to accrue until the Redemption Date, and

     (3) an amount of money sufficient to discharge all other liabilities of the Company accrued under this Agreement.

     Upon the occurrence of the event stated in Section 7.1(b) hereof, the amount payable by the Company hereunder will be an amount which, together with the amount then remaining on deposit in the Construction Fund and available for such purpose, will be sufficient to redeem (or when invested in Governmental Obligations in which such money is required to be invested will without reinvestment mature as to principal and interest, if any, at times and in amounts sufficient to redeem) the Bonds or portions thereof (in Authorized Denominations) to be redeemed on the Redemption Date, which amount shall consist of the principal amount thereof, all interest accrued and to accrue thereon to said Redemption Date, and expenses incurred or to be incurred in connection with such prepayment of installments and such redemption of Bonds.

      Section 7.4. Option to Prepay Installments for Optional Redemption of Bonds. The Company shall have, and is hereby granted, the option to prepay from time to time installments under this Agreement in the manner, from the sources and on the dates specified in Section 3.1(a) of the Indenture and at prices sufficient to redeem (or when invested in Governmental Obligations in which such money is required to be invested will without

reinvestment mature as to principal and interest, if any, at times and in amounts sufficient to redeem) all or part of the Bonds in Authorized Denominations in accordance with the provisions of the Indenture.

      Section 7.5. Notice of Prepayment. To exercise an option granted in or an obligation required by this Article VII, the Company shall give written notice to the Issuer and the Trustee not less than 45 days prior to the Redemption Date (or such later date as is acceptable to the Issuer and the Trustee) which shall specify therein the amount of such prepayment, the provisions of this Agreement permitting or requiring such prepayment and the date upon which such prepayment will be made, which date shall be not later than the Redemption Date, together with such other information, if any, as shall be reasonably necessary in order to enable the Trustee to call Bonds for redemption under the applicable provisions of the Indenture. In the Indenture the Issuer will forthwith take all steps necessary under the applicable provisions of the Indenture to effect redemption of all or part of the then outstanding Bonds, as may be the case, under applicable provisions of the Indenture.

      Section 7.6. Redemption of Bonds With Prepayment Moneys. By virtue of the assignment of the rights of the Issuer under this Agreement to the Trustee as provided in Section 4.4 hereof, the Company agrees to and shall pay any amount required or permitted to be paid by it under this Article VII directly to the Trustee. The Trustee shall use the moneys so paid to it by the Company to redeem (directly or through the application of maturing principal and interest, if any, of Governmental Obligations in which such moneys are required to be invested) the Bonds on the date set for such redemption pursuant to Sections 7.3 and 7.5 hereof.

Article VIII

Miscellaneous

      Section 8.1. Notices. Unless otherwise specifically provided, all notices, certificates or other communications shall be sufficiently given if in writing and shall be deemed given: (i) three days after the same are deposited in the United States mail and sent by registered or certified mail, return receipt requested, or (ii) when the same are delivered by hand, or (iii) when the same are sent by confirmed facsimile transmission, or (iv) on the next Business Day when the same are sent by overnight delivery service (with the signature of the receiving party required), in each case to the parties at the addresses set forth below: if to the Issuer, to Mississippi Business Finance Corporation, Department of Economic and Community Development, Corner of President and High, Sillers Building — 13th Floor, P.O. Box 849, Jackson, Mississippi 39205, or Telecopy Number (601) 359-2832, Attention: Executive Director; if to the Trustee, to The First National Bank of Chicago, One First National Plaza, Chicago, Illinois 60670, or Telecopy No. (312) 407-1708, Attention: Corporate Trust Services Division, Suite 0126; if to the Company, to Ingalls Shipbuilding, Inc., 1000 Litton Access Road, Pascagoula, Mississippi 39567, or Telecopy Number (228) 935-4864, Attention: Division Counsel, with a copy to the Guarantor at the address stated below; if to the Guarantor, to Litton Industries, Inc., 21240 Burbank Boulevard, Woodland Hills, California 91367, or Telecopy Number (818) 598-2025, Attention: General Counsel. A duplicate copy of each notice, certificate or other communication given hereunder by either the Issuer or the Company shall

also be given to the Trustee. The Issuer, the Company and the Trustee may, by written notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

      Section 8.2. Assignments. This Agreement may not be assigned by either party without consent of the other and the Trustee, except that the Issuer shall assign to the Trustee certain of its rights under this Agreement as provided by Section 4.4 hereof and the Company may assign to any transferee or any surviving or resulting entity its rights under this Agreement as provided by Section 5.1 hereof.

      Section 8.3. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever.

      Section 8.4. Execution of Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

      Section 8.5. Amounts Remaining in Any Fund With the Trustee. It is agreed by the parties hereto that after payment in full of (i) the principal of, premium, if any, and interest on the Bonds (or provision for the payment thereof having been made in accordance with the provisions of the Indenture), (ii) the fees, charges and expenses of the Issuer and the Trustee in accordance with this Agreement and the Indenture and (iii) all other amounts required to be paid under this Agreement and the Indenture, any amounts remaining in any fund or accounts maintained under this Agreement or the Indenture and not applied to the payments of the above in accordance with the provisions of this Agreement and the Indenture shall belong to and be paid to the Company by the Trustee as an overpayment of loan repayment installments upon receipt of a written request from the Company.

      Section 8.6. Amendments, Changes and Modifications. Except as otherwise provided in this Agreement or the Indenture, subsequent to the issuance of Bonds and prior to their payment in full (or provision for payment thereof having been made in accordance with the provisions of the Indenture), this Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Trustee and only in accordance with the provisions of Article XI of the Indenture.

      Section 8.7. Governing Law. This Agreement shall be governed exclusively by and construed in accordance with the applicable laws of the State.

      Section 8.8. Authorized Representatives. Whenever under the provisions of this Agreement the approval of the Company is required or the Issuer or the Trustee is required to take some action at the request of the Company, such approval or such request shall be given for the Company by an Authorized Company Representative, and the Issuer and the Trustee shall be authorized to act on any such approval or request and neither party hereto shall have any complaint against the other or against the Trustee as a result of any such action taken. Whenever

under the provisions of this Agreement the approval of the Issuer is required or the Company or the Trustee is required to take some action at the request of the Issuer, such approval or such request shall be given for the Issuer by an Authorized Issuer Representative, and the Company and the Trustee shall be authorized to act on any such approval or request and neither party hereto shall have any complaint against the other or against the Trustee as a result of any such action taken.

      Section 8.9. Term of the Agreement. The term of this Agreement shall commence as of the date hereof and, unless sooner terminated as provided in this Agreement, shall expire on the date that all of the Bonds and all fees, indemnities, expenses and charges of the Issuer and the Trustee have been fully paid or provision made for such payment.

      Section 8.10. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Company and their respective successors and assigns; subject, however, to the limitations contained in Sections 4.4, 5.1 and 8.2 hereof.

      In Witness Whereof , the Mississippi Business Finance Corporation and Ingalls Shipbuilding, Inc. have caused this Agreement to be executed in their respective names and attested by their duly authorized officers and have caused their corporate seals to be affixed hereto, all as of the date first above written.

		Mississippi Business Finance Corporation
		By
				Executive Director

(Seal)

Attest:

By		Secretary

		Ingalls Shipbuilding, Inc.
		By
				Treasurer

(Seal)

Attest:

By
		Assistant Secretary

Exhibit A

Description of Project

     Port facilities at the shipbuilding complex of Ingalls Shipbuilding, Inc. in Jackson County, Mississippi, in the following areas:

Pontoon Expansion

Land Improvements

Production Buildings and Support

Equipment Improvements

Pontoon

EXHIBIT 10.7

Mississippi Business Finance Corporation

To

The First National Bank of Chicago

As Trustee

Indenture of Trust

Dated as of May 1, 1999

Indenture of Trust

(This Table of Contents is not a part of
this Indenture of Trust and is only for
convenience of reference)

Table of Contents

Section		Heading		Page
Parties					1
Recitals					1
Granting Clauses					9
Article I		Definitions			10
Article II		The Bonds			14
Section 2.1.		Authorized Amount of Bonds			14
Section 2.2.		Issuance of Bonds; Interest on Bonds			14
Section 2.3.		Execution; Limited Obligation			14
Section 2.4.		Authentication.			15
Section 2.5.		Form and Place of Payment of Bonds			15
Section 2.6.		Delivery of the Bonds			16
Section 2.7.		Mutilated, Lost, Stolen or Destroyed Bonds			17
Section 2.8.		Registration, Transfer and Exchange of Bonds; Persons Treated as Owners			17
Section 2.9.		Cancellation of Bonds			19
Section 2.10.		Application of Proceeds of Bonds			19
Section 2.11.		Book-Entry System			19
Article III		Redemption of Bonds Before Maturity			20
Section 3.1.		Certain Redemption Dates and Prices			20
Section 3.2.		Partial Redemption of Bonds			22
Section 3.3.		Notice of Redemption			23
Section 3.4.		Redemption Payments			24
Section 3.5.		Cancellation			24
Article IV		General Covenants			24
Section 4.1.		Payment of Principal, Premium, if any, and Interest			24
Section 4.2.		Performance of Covenants; Issuer			25
Section 4.3.		Right to Payments Under Agreement; Instruments of Further Assurance			25

Section		Heading		Page
Section 4.4.		Recordation and Other Instruments			25
Section 4.5.		Inspection of Books			26
Section 4.6.		List of Bondholders			26
Section 4.7.		Rights Under Agreement			26
Article V		Revenues and Funds			26
Section 5.1.		Source of Payment of Bonds			26
Section 5.2.		Creation of Bond Fund			27
Section 5.3.		Payments into Bond Fund			27
Section 5.4.		Use of Moneys in Bond Fund			27
Section 5.5.		Custody of Bond Fund			27
Section 5.6.		Construction Fund			27
Section 5.7.		Payments into Construction Fund; Disbursements			27
Section 5.8.		Completion of Project			28
Section 5.9.		Transfer of Construction Fund			28
Section 5.10.		Non-presentment of Bonds			28
Section 5.11.		Moneys to be Held in Trust			29
Section 5.12.		Repayment to the Company from Bond Fund			29
Section 5.13.		Additional Payments Under the Agreement			29
Article VI		Investment of Moneys			29
Article VII		Discharge of Lien			30
Article VIII		Default Provisions and Remedies of Trustee and Bondholders			32
Section 8.1.		Defaults; Events of Default			32
Section 8.2.		Acceleration			32
Section 8.3.		Other Remedies; Rights of Bondholders			32
Section 8.4.		Right of Bondholders to Direct Proceedings			33
Section 8.5.		Appointment of Receivers			33
Section 8.6.		Waiver			33
Section 8.7.		Application of Moneys			34
Section 8.8.		Remedies Vested in Trustee			35
Section 8.9.		Rights and Remedies of Bondholders			35
Section 8.10.		Termination of Proceedings			35
Section 8.11.		Waivers of Events of Default			36
Section 8.12.		Notice of Defaults under Section 9.1(d); Opportunity of the Issuer and the Company to Cure Such Defaults			36
Article IX		trustee			36
Section 9.1.		Acceptance of Trusts			36
Section 9.2.		Fees, Charges, Indemnities and Expenses of the Trustee			39
Section 9.3.		Notice of Default			39

Section		Heading		Page
Section 9.4.		Intervention by the Trustee			40
Section 9.5.		Successor Trustee			40
Section 9.6.		Resignation by the Trustee			40
Section 9.7.		Removal of the Trustee			40
Section 9.8.		Appointment of Successor Trustee			40
Section 9.9.		Concerning Any Successor Trustee			41
Section 9.10.		Appointment of a Co-Trustee			41
Article X		Supplemental Indentures			42
Section 10.1.		Supplemental Indentures Not Requiring Consent of Bondholders			42
Section 10.2.		Supplemental Indentures Requiring Consent of Bondholders			43
Section 10.3.		Consent of Company			44
Section 10.4.		Execution of Supplemental Indentures			44
Article XI		Amendment of Agreement and Guaranty			44
Section 11.1.		Amendments, Etc., to Agreement Not Requiring Consent of Bondholders			44
Section 11.2.		Amendments, Etc., to Agreement Requiring Consent of Bondholders			45
Section 11.3.		Amendment of Guaranty			45
Section 11.4.		Execution of Consents			45
Article XII		Miscellaneous			46
Section 12.1.		Consents, Etc., of Bondholders			46
Section 12.2.		Limitation of Rights			47
Section 12.3.		Severability			47
Section 12.4.		Notices			47
Section 12.5.		Payments Due on Non-Business Days			47
Section 12.6.		Action by Company			48
Section 12.7.		Counterparts			48
Section 12.8.		Applicable Provisions of Law			48
Section 12.9.		Captions			48
Section 12.10.		Provisions for Payment of Expenses			48
Section 12.11.		Limited Liability of Officers, Etc.			48
Section 12.12.		Additional Notices to Rating Agencies			48
Testimonium					50

Indenture of Trust

      This Indenture of Trust (the “Indenture”), dated as of May 1, 1999, by and between the Mississippi Business Finance Corporation , a public corporation of the State of Mississippi (the “Issuer”), and The First National Bank of Chicago, a national banking association duly organized, existing and authorized to accept and execute trusts of the character herein set out under and by virtue of the laws of the United States of America, with its principal corporate trust office located in Chicago, Illinois, as Trustee (the “Trustee”).

W i t n e s s e t h:

      Whereas, the Issuer is authorized under the Constitution and laws of the State of Mississippi, including Sections 57-10-201 through 57-10-261, inclusive, and Sections 57-10-401 through 57-10-449, inclusive, of the Mississippi Code of 1972, as amended (the “Act”), to provide and finance “economic development projects” under the Act; and

      Whereas, the Issuer has authorized the issuance of its Economic Development Revenue Bonds (Ingalls Shipbuilding, Inc. Project) Taxable Series 1999A (the “Bonds”) in an aggregate principal amount of $83,700,000 for the purpose of defraying the costs of certain port facilities pursuant to the Act (the “Project”) to be owned by Ingalls Shipbuilding, Inc., a Delaware corporation (the “Company”); and

      Whereas, the Issuer has duly entered into a Loan Agreement, dated as of May 1, 1999, with the Company specifying the terms and conditions of a loan by the Issuer to the Company of the proceeds of the Bonds for the purpose of financing the Project and the payment by the Company to the Issuer of amounts sufficient for the payment of the principal of, premium, if any, and interest on the Bonds and certain related expenses; and

      Whereas, payments of principal of, and premium, if any, and interest on, the Bonds are unconditionally guaranteed to the Trustee for the benefit of the owners of the Bonds pursuant to a Guaranty Agreement, dated as of May 1, 1999, from Litton Industries, Inc., a Delaware corporation and the owner of all outstanding capital stock of the Company; and

      Whereas, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and premium, if any, and interest thereon, the Issuer has authorized the execution and delivery of this Indenture; and

      Whereas, the Bonds, the certificate of authentication to be endorsed on the Bonds and the form of assignment to be endorsed on the Bonds are to be in substantially the following forms, with appropriate variations, omissions and insertions as permitted or required by this Indenture, to-wit:

(Form of Bond)

[Private Placement Legend]

Principal Amount:

      Know All Men By These Presents that the Mississippi Business Finance Corporation (the “Issuer”), a public corporation of the State of Mississippi, for value received, hereby promises to pay, solely and only from the sources and as hereinafter provided, to the Registered Owner specified above (the “Registered Owner”), or registered assigns, the Principal Amount specified above, payable on the Maturity Date specified above (the “Maturity Date”), except as the provisions hereinafter set forth with respect to redemption and acceleration of maturity prior to the Maturity Date may become applicable hereto, and in like manner to pay interest on said Principal Amount from the Dated Date hereof at the Interest Rate per annum identified above, payable on each Interest Payment Date (as hereinafter defined) until said Principal Amount is paid. Interest hereon shall be calculated on the basis of a year consisting of 360 days of twelve (12) thirty-day months. Principal of and premium, if any, on this Bond shall be payable in lawful money of the United States of America at the designated corporate trust office (the “Principal Office”) of The First National Bank of Chicago, as trustee, or its successor under trust (the “Trustee”). “Interest Payment Date” means May 1 and November 1 of each year, commencing November 1, 1999.

     Interest on this Bond shall be payable to the Registered Owner hereof as of the Record Date (as hereinafter defined) preceding the related Interest Payment Date. Except while the Bonds are in a book-entry system of registration, payments of interest on this Bond shall be made in next day funds by check of the Trustee mailed on the applicable Interest Payment Date to the Registered Owner hereof at his address as it appears on the registration books of the Issuer kept by the Trustee, as bond registrar, or at such other address as is furnished to the Trustee in writing by such Registered Owner no later than the close of business on the Record Date;

provided that payments of interest on this Bond may be made by wire transfer of immediately available funds to the Registered Owner of this Bond to an account at a financial institution located in the continental United States in the event that the Registered Owner hereof is the Registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds (as hereinafter defined) as of the close of business on the Record Date immediately preceding the applicable Interest Payment Date and such Registered Owner shall have given written notice to the Trustee on or before the second Business Day immediately preceding such Record Date, directing the Trustee to make such payments of interest by wire transfer and identifying the location and number of the account to which such payments should be wired. As used herein, the term “Record Date” shall mean the fifteenth day of the calendar month immediately preceding such Interest Payment Date.

     This Bond is issued pursuant to and in full compliance with the Constitution and laws of the State of Mississippi, including particularly Sections 57-10-201 through 57-10-261, inclusive, and Sections 57-10-401 through 57-10-449, inclusive, of the Mississippi Code of 1972, as supplemented and amended (the “Act”), and in accordance with action taken by the governing body of the Issuer. This Bond and the obligation to pay interest hereon are special, limited obligations of the Issuer, secured as hereinafter described and payable solely out of the revenues and income derived from the hereinafter defined Agreement and as otherwise provided in the hereinafter defined Indenture.

      The Bonds will be limited obligations of the Issuer, payable solely from the revenues and receipts derived from the Agreement. The Bonds shall not be general obligations of the Issuer nor shall they be payable in any manner by taxation. The Bonds do not and shall never constitute or evidence an indebtedness of the Issuer, the State of Mississippi or any political subdivision thereof or a loan of credit thereof within the meaning of any constitutional or statutory provision. This Bond and all other Bonds of the series of which it forms a part are issued under, and in conformity with, the provisions, restrictions and limitations of the constitution and laws of the State of Mississippi and particularly the provisions of Sections 57-10-201 through 57-10-261, inclusive, and Sections 57-10-401 through 57-10-449, Inclusive, of the Mississippi Code of 1972, as amended.

     This Bond is one of an authorized series of Bonds in the aggregate principal amount of $83,700,000 (the “Bonds”) issued for the purpose of defraying the costs of certain port facilities (the “Project”) at the shipbuilding complex (the “Plant”) of Ingalls Shipbuilding, Inc., a Delaware corporation (the “Company”), located in Jackson County, Mississippi. The Bonds are all issued under and are equally and ratably secured by and entitled to the protection of an Indenture of Trust dated as of May 1, 1999 (which indenture, as from time to time amended and supplemented, is hereinafter referred to as the “Indenture”), duly executed and delivered by the Issuer to the Trustee. Reference is hereby made to the Indenture for a description of the rights, duties and obligations of the Issuer, the Trustee and the owners of the Bonds and the terms upon which the Bonds are issued and secured. The terms and conditions of the use of the proceeds of the Bonds and the payment of loan repayment installments by the Company (which installments are correlated to the terms of the Bonds as to principal amount and maturity date, interest rates

and payment dates and prepayment (or redemption) provisions) are contained in a Loan Agreement dated as of May 1, 1999 (which agreement, as from time to time amended and supplemented, is hereinafter referred to as the “Agreement”), by and between the Issuer and the Company. Payments of principal of, and interest and premium, if any, on, the Bonds are guaranteed by Litton Industries, Inc., a Delaware corporation and the owner of all outstanding stock of the Company (the “Guarantor”), under a Guaranty Agreement dated as of May 1, 1999 (the “Guaranty”) from the Guarantor to the Trustee. Capitalized terms used herein and not defined shall have the meanings set forth in the Indenture.

     The Bonds are issuable only as fully registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof but not less than $100,000 (such denominations being hereinafter referred to as “Authorized Denominations”). This Bond is transferable by the Registered Owner hereof in person or by his attorney duly authorized in writing at the designated corporate trust office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new Bond or Bonds of Authorized Denomination or Denominations for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Issuer and the Trustee may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and premium, if any, hereon and interest due hereon and for all other purposes, and neither the Issuer nor the Trustee shall be affected by any notice to the contrary.

     Subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation thereof, Bonds may be exchanged for a like aggregate principal amount of Bonds of other Authorized Denominations. The Trustee shall not be required to transfer or exchange any Bond after notice calling such Bond or portion thereof for redemption prior to maturity has been given as provided in the Indenture, or during the period of fifteen (15) days next preceding the giving of such notice of redemption.

     No recourse shall be had for the payment of the principal of, premium, if any, and interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future official or employee of the Issuer, or of any successor thereof, as such, either directly or indirectly or through the Issuer or any successor, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such official or employee as such is hereby expressly waived and released as a condition of and consideration for the execution of the Indenture and the issuance of any of the Bonds.

     Payments pursuant to the Agreement and as otherwise provided in the Indenture sufficient for the prompt payment, when due, of the principal of and interest, and premium, if any, on the Bonds are to be paid to the Trustee for the account of the Issuer and deposited in a special trust fund created by the Issuer and identified as the Bond Fund, and such payments have been duly pledged and assigned for that purpose, and in addition certain rights of the Issuer under the Agreement have been assigned to the Trustee to secure payment of such principal, premium, if any, and interest under the Indenture.

      The Bonds are subject to redemption at the option of the Company as provided in the Indenture. In addition, the Bonds are subject to mandatory redemption upon the terms provided in the Indenture.

     The Registered Owner of this Bond shall have no right to enforce the provisions of the Indenture or the Agreement or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture or the Agreement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Bonds issued under the Indenture and then outstanding may become or may be declared due and payable before the Maturity Date, together with interest accrued thereon. The Indenture prescribes the manner in which it may be discharged, including a provision that under certain circumstances the Bonds shall be deemed to be paid if Governmental Obligations maturing as to principal and interest in such amounts and on such dates as will provide sufficient moneys to pay the principal of and interest and premium, if any, on the Bonds shall have been deposited with the Trustee, and if moneys sufficient to pay all fees, charges and expenses of the Trustee and all other liabilities of the Company under the Agreement shall have been paid or provided for, after which the Bonds shall no longer be secured by or entitled to the benefits of the Indenture or the Agreement, except for purposes of transfer and exchange and payment from such Governmental Obligations on the date or dates specified at the time of such deposit.

     The Indenture permits the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the owners of the Bonds at any time by the Issuer and the Trustee with the consent of the owners of not less than a majority, or in certain instances 100%, in aggregate principal amount of the Bonds at the time outstanding. Any such consent or waiver by the Registered Owner of this Bond shall be conclusive and binding upon such owner and upon all future owners of this Bond and of any Bond issued upon the transfer or exchange of this Bond whether or not notation of such consent or waiver is made upon this Bond. The Indenture also contains provisions permitting the Trustee to enter into certain supplemental indentures without the consent of the owners of the Bonds and to waive certain past defaults under the Indenture and their consequences. No amendment of the Indenture will become effective without the consent of the Company.

     This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been manually executed by the Trustee. This Bond is issued with the intent that the laws of the State of Mississippi will govern its construction.

      It is Hereby Certified, Recited and Declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the execution and delivery of the Indenture and the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law; and that the issuance of this Bond and the series of which it forms a part does not exceed or violate any constitutional or statutory limitation.

      In Witness Whereof , the Mississippi Business Finance Corporation has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its Executive Director and its seal to be affixed, imprinted or reproduced hereon and attested by the manual or facsimile signature of its Secretary, all as of the Dated Date.

						Mississippi Business Finance Corporation
						By:
								Executive Director
[Seal]
Attested:
By:
		Secretary

[Form of Certificate of Authentication]

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

[Form of Validation Certificate]

State of Mississippi
County of Hinds

     The undersigned, Secretary of the Mississippi Business Finance Corporation, does hereby certify that the within Bond has been validated and confirmed by decree of the Chancery Court of the First Judicial District of Hinds County, Mississippi, rendered on the 14th day of May, 1999.

		Secretary, Mississippi Business
		Finance Corporation
[SEAL]

[Form of Assignment]

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

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

Assignment

      For Value Received, the undersigned sells, assigns and transfers unto

(Name and Address of Assignee)

(Taxpayer I.D. No.                                           )

the within Bond of Mississippi Business Finance Corporation numbered                                           , and does hereby irrevocably constitute and appoint                                           to transfer said Bond on the books kept for registration thereof with full power of substitution in the premises.

Dated:                                          

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

Signature Guaranteed:                                          

Notice: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company with a branch in the United States.

*      *      *      *      *      *

           Whereas , all things necessary to make the Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the Issuer according to the import thereof, and to constitute this Indenture a valid assignment and pledge of the amounts assigned and pledged to the payment of the principal of, premium, if any, and interest on the Bonds and a valid assignment and pledge of certain rights of the Issuer under the Agreement have been done and performed, and the creation, execution and delivery of this Indenture, and the creation, execution and issuance of the Bonds, subject to the terms hereof, have in all respects been duly authorized:

Granting Clauses

Now, Therefore, this Indenture of Trust Witnesseth:

          That the Issuer in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the owners thereof, the delivery of the Guaranty by the Guarantor and of the sum of ten dollars, lawful money of the United States of America, to it duly paid by the Trustee at or before the execution and delivery of these presents, and for other good and valuable considerations, the receipt of which is hereby acknowledged, in order to secure the payment of the principal of, and premium, if any, and interest on, and to secure the performance and observance by the Issuer of all the covenants expressed or implied herein and in the Bonds, does hereby grant, bargain, sell, convey, assign and pledge, and grant a security interest to The First National Bank of Chicago, as Trustee, and its successors in trust and assigns forever, for the benefit of the owners from time to time of the Bonds, to the extent provided in this Indenture:

Granting Clause First

          All of the right, title and interest of the Issuer in and to the Agreement and all Revenues, as hereinafter defined, except for the rights of the Issuer under Sections 4.2(c), 5.2 and 6.3 of the Agreement and the rights to make determinations and receive notices as therein provided;

Granting Clause Second

          All moneys and securities from time to time held by the Trustee under the terms of this Indenture, including without limitation any moneys realized under the Guaranty, and any and all other real or personal property of every name and nature from time to time hereafter by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred, as and for additional security hereunder, by the Issuer or by anyone on its behalf or with its written consent to the Trustee which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof;

           To Have And To Hold all and singular the Trust Estate (as hereinafter defined), whether now owned or hereafter acquired, unto the Trustee and its respective successors in said trust and assigns forever;

           In Trust , upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all present and future owners of the Bonds from time to time issued under and secured by this Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds (except as otherwise specifically provided herein);

           Provided, However, that if the Issuer, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest on the Bonds due or to become due thereon, on the dates and in the manner mentioned in the Bonds according to the true intent and meaning thereof, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon (or Governmental Obligations, as hereinafter defined, sufficient for that purpose as provided in Article VIII hereof), and shall pay or cause to be paid to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof and, after said payments on the Bonds and payment of such other sums have been made, then upon the final payment thereof or provision therefor this Indenture and the rights hereby granted shall cease, determine and be void; otherwise this Indenture to be and remain in full force and effect.

           This Indenture of Trust Further Witnesseth, and it is expressly declared that, all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all said property, rights and interests, including, without limitation, the amounts hereby assigned and pledged, are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Issuer has agreed and covenanted, and does hereby agree and covenant with the Trustee and with the respective owners of the Bonds as follows (subject, however, to the provisions of Section 2.3 hereof):

Article I

Definitions

          All words and phrases defined in Article I of the Agreement shall have the same meanings in this Indenture. In addition, the following words and phrases shall have the following meanings:

          “Act” means Sections 57-10-201 through 57-10-261, inclusive, and Sections 57-10-401 through 57-10-449, inclusive, of the Mississippi Code of 1972, as supplemented and amended.

          “Agreement” means the Loan Agreement dated as of May 1, 1999, by and between the Issuer and the Company, as from time to time supplemented and amended, relating to the Bonds.

          “Authorized Denomination” means $5,000 or any integral multiple thereof but not less than $100,000.

          “Beneficial Owner” means the owner of a Bond or portion thereof for federal income tax purposes.

          “Bond” or “Bonds” means the Economic Development Revenue Bonds (Ingalls Shipbuilding, Inc. Project) Taxable Series 1999A of the Issuer, authorized to be issued in the aggregate principal amount of $83,700,000 pursuant to this Indenture.

          “Bond Counsel” means Chapman and Cutler or such other nationally recognized municipal bond counsel of recognized expertise with respect to such matters as may be mutually satisfactory to the Issuer, the Company (so long as no event of default is then existing under Section 6.1(a), (b), (c), (d) or (e) of the Agreement) and the Trustee.

          “Bond Fund” means the fund created and established by Section 5.2 of this Indenture.

          “Bondholder,” “bondholder,” “holder” and “owner” mean the Registered Owner of any Bond.

          “Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the city in which the Principal Office of the Company or the Principal Office of the Trustee are required or authorized by law or executive order to be closed, or other than a day on which the New York Stock Exchange is closed.

          “Code” means the Internal Revenue Code of 1986, as amended, together with any regulations promulgated thereunder or applicable thereto.

          “Company” means Ingalls Shipbuilding, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware, and its successors and assigns, and any surviving, resulting or transferee entity as permitted by Section 5.1 of the Agreement. “Principal Office” of the Company means 1000 Litton Access Road, Pascagoula, Mississippi 39567 unless another office is designated as such in writing to the Trustee and the Issuer.

          “Construction Fund” means the fund created and established by Section 5.6 of this Indenture.

          “Counsel” means an attorney at law or a firm of attorneys (who may be an employee of or counsel to the Issuer or the Company or the Trustee) duly admitted to the practice of law before the highest court of any state of the United States of America or of the District of Columbia.

          “Dated Date” means May 1, 1999.

          “Direct Participant” means securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations which participate in the Securities Depository with respect to the Bonds.

          “Event of Default” or “event of default” means any occurrence or event specified as such in and defined as such by Section 8.1 hereof.

          “Governmental Obligations” means noncallable, direct general obligations of, or obligations the full and timely payment of the principal of and interest on which is unconditionally guaranteed by, the United States of America.

          “Guarantor” means Litton Industries, Inc., a Delaware corporation, and its successors and assigns.

          “Guaranty” means the Guaranty Agreement dated as of May 1, 1999 between the Guarantor and the Trustee, pursuant to which the Guarantor guarantees, among other things, the payment of principal of, premium, if any, and interest on the Bonds, as it may hereafter be amended or supplemented.

          “Indenture” means this Indenture, as from time to time supplemented and amended in accordance with Article XI hereof.

          “Initial Purchaser” means NationsBanc Montgomery Securities LLC.

          “Interest Payment Date” means May 1 and November 1 of each year, commencing November 1, 1999.

          “Issuer” means the Mississippi Business Finance Corporation, a public corporation of the State of Mississippi, and any successor body to the duties or functions of the Issuer.

          “Maturity Date” means May 1, 2024.

          “Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successor and their assigns, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other Rating Agency.

          “Outstanding” or “Bonds outstanding” means all Bonds which have been authenticated and delivered by the Trustee under this Indenture, except:

     (a) Bonds canceled after purchase or because of payment at redemption or at maturity;

     (b) Bonds or portions thereof deemed to be paid, as provided in Article VII hereof;

     (c) Bonds in lieu of which other Bonds have been authenticated under Sections 2.7, 2.8 and 3.2 hereof; and

     (d) Unsurrendered Bonds.

If this Indenture shall have been discharged pursuant to the provisions of Article VII hereof, no Bonds shall be deemed to be Outstanding within the meaning of this provision.

          “Rating Agency” means any nationally recognized securities rating agency selected by the Company, with notice to the Trustee.

          “Record Date” means the fifteenth day of the calendar month immediately preceding an Interest Payment Date.

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

          “Revenues” means the amounts pledged to the payment of the principal of, premium, if any, and interest on the Bonds, consisting of the following: (i) all amounts payable pursuant to Section 4.2(a) of the Agreement and all receipts of the Trustee credited under the provisions of this Indenture against such amounts, including all moneys realized by the Trustee under the Guaranty to pay the principal of, premium, if any, and interest on the Bonds, (ii) any portion of the net proceeds of the Bonds deposited with the Trustee under Section 6.3(a) hereof, and (iii) any amounts paid into the Bond Fund from the Construction Fund, including income on investments.

          “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other Rating Agency.

          “Securities Depository” has the meaning set forth in Section 2.11 hereof.

          “State” means the State of Mississippi.

          “Trust Estate” means the property conveyed to the Trustee for the benefit of the owners from time to time of the Bonds pursuant to the Granting Clauses of this Indenture.

          “Trustee” means The First National Bank of Chicago, and any successor trustee at the time serving as successor trustee hereunder. “Principal Office” of the Trustee means, initially, One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126 and, thereafter, the office designated as such in writing to the Bondholders, the Issuer and the Company.

          The words “hereof,” “herein,” “hereunder” and other words of similar import refer to this Indenture as a whole.

          Unless otherwise specified, references to Articles, Sections, and other subdivisions of this Indenture are to the designated Articles, Sections, and other subdivisions of this Indenture as originally executed.

          The headings of this Indenture are for convenience only and shall not define or limit the provisions hereof.

Article II

The Bonds

      Section 2.1. Authorized Amount of Bonds. No Bonds may be issued under the provisions of this Indenture except in accordance with this Article II. The total principal amount of Bonds that may be issued is hereby expressly limited to $83,700,000, except as provided in Section 2.7 hereof.

      Section 2.2. Issuance of Bonds; Interest on Bonds.

           (a) General. The Bonds shall be designated “Mississippi Business Finance Corporation Economic Development Revenue Bonds (Ingalls Shipbuilding, Inc. Project) Taxable Series 1999A.” The Bonds shall be issuable only as fully registered Bonds without coupons in Authorized Denominations. Unless the Issuer shall otherwise direct, the Bonds shall be numbered separately from 1 upward.

          All Bonds shall be dated the Dated Date and shall mature on the Maturity Date. The Bonds shall be subject to redemption prior to maturity as set forth in Article III hereof. Interest on the Bonds shall be payable in arrears on each Interest Payment Date for each Bond until the principal sum becomes due and payable and shall accrue from the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid or duly provided for on such Bond, then from the Dated Date until the principal of such Bond is paid or made available for payment.

          The Bonds shall bear interest at the rate of 7.810% per annum, calculated on the basis of a calendar year of 360 days consisting of twelve (12) thirty-day months).

      Section 2.3. Execution; Limited Obligation. The Bonds shall be executed on behalf of the Issuer with the manual or facsimile signature of its Executive Director and attested by the manual or facsimile signature of its Secretary, and shall have impressed or imprinted thereon the official seal of the Issuer or a facsimile thereof. All authorized facsimile signatures shall have the same force and effect as if manually signed. In case any official whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be such official before the delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such official had remained in office until delivery. The Bonds may be signed on behalf of the Issuer by such persons who, at the time of the execution of such Bonds, are duly authorized or hold the appropriate offices of the Issuer, although on the date of the Bonds such persons were not so authorized or did not hold such offices.

          The Bonds, together with premium, if any, and interest thereon, shall be special, limited obligations of the Issuer, payable solely from the Revenues (except to the extent paid out of moneys attributable to Bond proceeds and the income from the temporary investment thereof), and shall be a valid claim of the owners from time to time thereof only against the Bond Fund and other moneys held by the Trustee and the Revenues, which Revenues shall be used for no other purpose than to pay the principal installments of, premium, if any, and interest on the Bonds, except as may be otherwise expressly authorized in this Indenture or the Agreement.

           The obligations of the Issuer hereunder and under the Bonds shall not be general obligations of the Issuer nor shall they be payable in any manner by taxation. Neither the State nor any political subdivision thereof, including the Issuer, shall be obligated to pay the obligations hereunder, the principal of, premium, if any, or interest on the Bonds, or the other costs incident thereto except from the revenues and receipts pledged therefor, and neither the faith and credit nor the taxing power of the State or any political subdivision thereof, including the Issuer (which has no taxing power), is pledged to the payment of the obligations hereunder or under the Bonds. No owner of any of the Bonds has the right to compel any exercise of the taxing power of the Issuer, the State or any political subdivision thereof to pay the Bonds or the interest or the premium, if any, thereon. The Bonds do not and shall never constitute or give rise to any pecuniary liability of the Issuer or a charge upon its general credit or against its taxing powers. The Bonds do not and shall never constitute or evidence an indebtedness of the Issuer, the State or any political subdivision thereof or a loan of credit thereof within the meaning of any constitutional or statutory provision.

      Section 2.4. Authentication. No Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Indenture unless and until a certificate of authentication on such Bond substantially in the form hereinabove set forth shall have been duly executed by the Trustee, and such executed certificate of the Trustee upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture. The Trustee’s certificate of authentication on any Bond shall be deemed to have been executed by it if manually signed by an authorized officer of the Trustee, but it shall not be necessary that the same authorized officer execute the certificate of authentication on all of the Bonds issued hereunder. Each Bond shall bear the date of its authentication, which date of authentication shall be inserted by the Trustee in the place provided for such purpose in the form of certificate of authentication of the Trustee to appear on each Bond.

      Section 2.5. Form and Place of Payment of Bonds. The Bonds issued under this Indenture shall be substantially in the form hereinabove set forth with such variations, omissions and insertions as are permitted or required by this Indenture.

          The principal of and premium, if any, on the Bonds shall be payable in lawful money of the United States of America only at the Principal Office of the Trustee. Payment of interest on any Bond due on any regularly scheduled Interest Payment Date shall be made to the Registered Owner thereof as of the Record Date preceding such Interest Payment Date. Payments of interest on any Bond shall be made in next day funds by check of the Trustee mailed on the applicable Interest Payment Date to the Registered Owner thereof as of the Record Date

preceding such Interest Payment Date at the address of such Registered Owner as it appears on the registration books of the Issuer maintained by the Trustee, as bond registrar, or at such other address as is furnished to the Trustee in writing by such Registered Owner no later than the close of business on such Record Date; provided that payments of interest oh any Bond may be made by wire transfer of immediately available funds to the Registered Owner of such Bond to an account at a financial institution located in the continental United States in the event that such Registered Owner is the registered owner of at least $1,000,000 in aggregate principal amount of the Bonds as of the close of business on the Record Date immediately preceding the applicable Interest Payment Date and such Registered Owner shall have given written notice to the Trustee on or before the second Business Day immediately preceding such Record Date, directing the Trustee to make such payments of interest by wire transfer and identifying the location and number of the account to which such payments should be wired.

      Section 2.6. Delivery of the Bonds. Upon the execution and delivery of this Indenture, the Issuer shall execute and deliver to the Trustee and the Trustee shall deliver the Bonds to, or at the direction of, the Initial Purchaser as directed by the Issuer as hereinafter in this Section 2.6 provided.

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

     1. A copy, duly certified by the Secretary of the Issuer, of the proceedings of the governing body of the Issuer authorizing the execution and delivery of the Agreement and this Indenture and the issuance of the Bonds.

     2. Original executed counterparts of this Indenture, the Agreement and the Guaranty.

     3. A written request and authorization to the Trustee by the Issuer and signed by the Executive Director of the Issuer to authenticate and deliver the Bonds to, or at the direction of, the Initial Purchaser upon payment to the Trustee, but for the account of the Issuer, of a sum specified in such written request and authorization representing the principal proceeds of the Bonds plus accrued interest, if any, thereon.

     4. A closing certificate of the Issuer, in form and substance satisfactory to Bond Counsel.

     5. A closing certificate of the Company, in form and substance satisfactory to Bond Counsel.

     6. A closing certificate of the Guarantor, in form and substance satisfactory to Bond Counsel.

     7. Documents and evidence to establish the existence and good standing of the Company and the Guarantor, the authorization of the transactions contemplated by this Indenture and the taking of all proceedings in connection therewith, in form and substance satisfactory to Bond Counsel.

     8. All other such documents, proceedings and showings as shall be requested by Bond Counsel.

     9. An opinion of counsel to the Company, in form and substance satisfactory to Bond Counsel and counsel to the Issuer and the Initial Purchaser.

     10. An opinion of counsel to the Guarantor, in form and substance satisfactory to Bond Counsel and counsel to the Issuer and the Initial Purchaser.

     11. An opinion of counsel to the Issuer, in form and substance satisfactory to Bond Counsel and counsel to the Company, the Guarantor and the Initial Purchaser.

     12. An opinion of Bond Counsel in form and substance satisfactory to counsel to the Issuer, the Company, the Guarantor and the Initial Purchaser.

      Section 2.7. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated, lost, stolen, or destroyed, the Executive Director of the Issuer may execute and the Secretary of the Issuer may seal and attest and the Trustee may authenticate a new Bond of like Authorized Denomination as that mutilated, lost, stolen or destroyed bearing a number not contemporaneously then outstanding; provided, that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Trustee and in the case of any lost, stolen or destroyed Bond, there shall be first furnished to the Issuer, the Trustee and the Company evidence of such loss, theft or destruction satisfactory to the Issuer, the Trustee and the Company, together with indemnity, insurance or surety satisfactory to each of them. In the event any such Bond shall have matured or is to mature within fifteen (15) days of the request for a new Bond, instead of issuing a duplicate Bond, the Issuer may pay the same on the appropriate date. The Issuer and the Trustee may charge the owner of such Bond with their reasonable fees and expenses in this connection.

      Section 2.8. Registration, Transfer and Exchange of Bonds; Persons Treated as Owners. The Issuer shall cause books for the registration and for the registration of transfer of the Bonds as provided in this Indenture to be kept by the Trustee. The Issuer shall prepare and deliver to the Trustee, and the Trustee shall keep custody of, a supply of Bonds duly executed by the Executive Director of the Issuer and attested by the Secretary of the Issuer, with the seal of the Issuer affixed, as provided in Section 2.3 hereof, for use in the transfer and exchange of Bonds. The Trustee is hereby authorized and directed to complete (to the extent not already completed) such forms of Bonds as to principal amounts, registered owners and numbers in effecting transfers and exchanges of Bonds as provided herein. The principal of, premium, if any, and interest on any Bond shall be payable only to the Registered Owner or his legal representative duly authorized in writing, and no registration to “bearer” shall be permitted. Upon surrender for transfer of any Bond at the Principal Office of the Trustee, accompanied by an instrument of assignment or transfer, which instrument of assignment or transfer shall be in the form provided on the Bonds or in such other form acceptable to the Trustee, duly executed by the Registered Owner or his attorney duly authorized in writing, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or

Bonds in Authorized Denominations, for a like aggregate principal amount, bearing numbers not contemporaneously then outstanding.

          Bonds may be exchanged at the Principal Office of the Trustee for a like aggregate principal amount of Bonds of other Authorized Denominations. The Executive Director of the Issuer shall execute, the Secretary of the Issuer shall seal and attest and the Trustee shall authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive, bearing numbers not contemporaneously then outstanding.

          The Trustee shall not be required to transfer or exchange any Bond after notice calling such Bond or portion thereof for redemption prior to maturity has been given as herein provided, or during the period of fifteen (15) days next preceding the giving of such notice of redemption.

          In each case (except as provided in Section 3.2 hereof) the Trustee shall require the payment by the Bondholder requesting exchange or transfer of any tax or other governmental charge required to be paid with respect to such exchange or transfer, but otherwise no charge shall be made to the Bondholder for such exchange or transfer.

          The Issuer, the Trustee and the Company may deem and treat the Registered Owner of any Bond as the absolute owner thereof for the purpose of receiving payment of or on account of principal and premium, if any, and interest thereon and for all other purposes, and none of the Issuer, the Trustee or the Company shall be affected by any notice to the contrary.

          If the Trustee and the Issuer, at the written direction of the Company, enter into an agreement with a Securities Depository as provided in Section 2.11 hereof, the Issuer shall execute and the Trustee shall, in accordance with Section 2.4 hereof, authenticate a Bond to be held by such Securities Depository, which (i) shall be denominated in an amount equal to the aggregate principal amount of Bonds to be held by the Securities Depository, (ii) shall be registered in the name of the Securities Depository or its nominee in accordance with this Section 2.8, (iii) shall be delivered by the Trustee to the Securities Depository or pursuant to the Securities Depository’s instructions, and (iv) shall bear a legend substantially to the effect that unless the Bond is presented by an authorized representative of the Securities Depository to the Issuer or its agent for registration of transfer, exchange or payment, any transfer, exchange, pledge or other use for value or otherwise is wrongful.

          Notwithstanding any other provision of this Section 2.8, subject to the provisions of the immediately succeeding paragraph, any Bond registered in the name of a Securities Depository or its nominee may be transferred, in whole but not in part; in accordance with this Section 2.8, to a nominee (or a different nominee) of the Securities Depository, or to the Securities Depository, or a successor Securities Depository selected or approved by the Company, or to a nominee of such successor Securities Depository.

          If the Securities Depository which is the record owner (or whose nominee is the record owner) of the Bonds notifies the Issuer, the Trustee or the Company that it is unwilling or unable to continue as record owner of the Bonds, or if such Securities Depository shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other

applicable statute or regulation, the Issuer and the Trustee, upon written direction of the Company, shall appoint a successor Securities Depository. If a successor Securities Depository is not appointed within ninety (90) days after the Company receives notice or becomes aware of the events stated in the preceding sentence, or if the Issuer and the Trustee, upon written direction of the Company, elect not to appoint a successor Securities Depository, upon surrender for transfer of the Bond registered in the name of the Securities Depository or its nominee, the Issuer shall execute, and the Trustee shall authenticate, a new Bond or Bonds, for a like aggregate principal amount, bearing numbers not contemporaneously then outstanding, which shall be in the Authorized Denominations and registered in the name of the transferee or transferees specified in written instructions delivered pursuant to the last two sentences of this paragraph, in accordance with this Section 2.8. The Issuer and the Trustee shall discontinue an agreement with a Securities Depository within a reasonable amount of time after receipt of written direction from the Company. In such event, the Issuer shall execute and the Trustee shall authenticate, upon receipt of the Bond registered in the name of the Securities Depository or its nominee, a new Bond or Bonds, for a like aggregate principal amount, bearing numbers not contemporaneously then outstanding, in the Authorized Denominations and registered in the name of a transferee or transferees specified in written instructions delivered pursuant to the following two sentences, in accordance with this Section 2.8. Upon any surrender of Bonds for transfer pursuant to this paragraph, the Securities Depository shall specify in written instructions delivered to the Issuer, the Trustee and the Company, the name of the transferee or transferees and the Authorized Denominations of the new Bonds. If the transferee specified in such instructions is not a successor Securities Depository described above in this paragraph, then the transferees shall be the beneficial owners of the Bonds specified in such instructions and the Trustee shall deliver new Bonds to such transferees in Authorized Denominations proportionate to their beneficial interest in the Bonds as specified in said instructions.

      Section 2.9. Cancellation of Bonds. Whenever any Outstanding Bond shall be delivered to the Trustee for cancellation pursuant to this Indenture, upon full or partial payment of the principal amount represented thereby, or for replacement pursuant to Section 2.7 hereof, or upon exchange or transfer pursuant to Section 2.8 hereof, or in accordance with Section 3.2 hereof, such Bond shall be promptly canceled and disposed of by the Trustee and counterparts of a certificate evidencing such cancellation and disposition shall be furnished by the Trustee to the Issuer and the Company.

      Section 2.10. Application of Proceeds of Bonds. The proceeds of the issuance and sale of the Bonds (excluding accrued interest, if any, which shall be deposited into the Bond Fund pursuant to Section 5.3 hereof) shall be deposited with the Trustee in the Construction Fund pursuant to Section 5.7 hereof.

      Section 2.11. Book-Entry System. The Trustee and the Issuer, at the direction of the Company, may from time to time enter into, and discontinue, an agreement with a “clearing agency” (securities depository) registered under Section 17A of the Securities Exchange Act of 1934, as amended (a “Securities Depository”), which is the owner of the Bonds, to establish procedures with respect to the Bonds, not inconsistent with the provisions of this Indenture; provided, however, that any such agreement may provide:

     (a) that such Securities Depository is not required to present a Bond to the Trustee in order to receive a partial payment of principal;

     (b) that a legend shall appear on each Bond so long as the Bonds are subject to such agreement; and

     (c) that different provisions for notice to such Securities Depository may be set forth therein.

          So long as an agreement with a Securities Depository is in effect, the Issuer, the Company, the Trustee and any paying agent or bond registrar shall not have any responsibility or liability with respect to the payment of principal, premium, if any, or interest on the Bonds to the beneficial owners or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or any payments made to such beneficial owners.

Article III

Redemption of Bonds Before Maturity

      Section 3.1. Certain Redemption Dates and Prices.

           (a) Optional Redemption. The Bonds are redeemable, in whole or in part, at the option of the Issuer at the direction of the Company at any time at a redemption price equal to the greater of (i) 100% of the principal amount of the Bonds or (ii) as determined by an Independent Investment Banker (as defined herein), the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined herein), plus, in each case, accrued interest thereon to the date of redemption.

          “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue (as defined herein), assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price (as defined herein) for such redemption date, plus .25%.

          “Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Bonds to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Bonds. “Independent Investment Banker” means one of the Reference Treasury Dealers (as defined herein) appointed by the Trustee after consultation with the Company.

          “Comparable Treasury Price” means, with respect to any redemption date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a

percentage of its principal amount) on the third Business Day preceding such redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities” or (ii) if such release (or any successor release) is not published or does not contain such prices on such Business Day, (A) the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations. “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Treasury Reference Dealer at 5:00 p.m. on the third Business Day preceding such redemption date.

          “Reference Treasury Dealer” means each of NationsBanc Montgomery Securities LLC and at least three primary U.S. Government securities dealers in New York City appointed by the Trustee after consultation with the Company and their respective successors.

           (b) Extraordinary Optional Redemption. The Bonds shall be subject to extraordinary optional redemption by the Issuer, at the written direction of the Company on any date in whole but not in part, at a redemption price of 100% of the principal amount thereof plus accrued interest, if any, to the redemption date, upon the occurrence of any one of the following events:

     (i) The Project or the Plant shall have been damaged or destroyed (in whole or in part) by fire or other casualty to such extent that in the opinion of the Company it is not practicable or desirable to rebuild, repair or restore the Project or the Plant; or

     (ii) Title to, or the temporary use of, all or substantially all the Project or the Plant shall have been taken under the exercise of the power of eminent domain by any governmental authority, or person, firm or corporation acting under governmental authority.

           (c) Mandatory Redemption Upon Proceeds Remaining in Construction Fund. The Bonds shall be subject to mandatory redemption by the Issuer, as a whole or in part (in Authorized Denominations) to the extent of moneys remaining in the Construction Fund, at a redemption price of 100% of the principal amount thereof plus accrued interest, if any, to the redemption date, on any date within 180 days after the Company has notice or actual knowledge that proceeds of the Bonds, including income from the investment thereof, shall have remained after completion of the Project and the payment of the Cost of the Project. Upon the occurrence of the event stated in this Section 3.1(c), the principal amount of the Bonds to be redeemed will be a principal amount equal to the lowest Authorized Denomination equal to or in excess of the remaining proceeds of the Bonds, including income from the investment thereof.

           (d) Mandatory Redemption Upon Unenforceability of Agreement. The Bonds shall be subject to mandatory redemption by the Issuer as a whole and not in part, at a redemption

price of 100% of the principal amount thereof plus accrued interest, if any, to the redemption date, on any date (within 180 days after the Company has notice or actual knowledge of such event), if as a result of any changes in the Constitution of the State or the Constitution of the United States of America or by legislative or administrative action (whether state or federal) or by final decree, judgment or order of any court or administrative body (whether state or federal), the Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in the Agreement.

           (e) Purchase in Lieu of Redemption. Notwithstanding anything to the contrary stated herein, the Company may elect to purchase any Bonds that have been called for redemption as described above on the redemption date by giving the Trustee and the Issuer written notice at least two Business Days prior to the date the Bonds are to be redeemed.

           (f) Direction to Trustee to Call Bonds for Redemption. The Issuer hereby directs the Trustee to call Bonds for redemption when it shall have been notified in writing by the Company, pursuant to Sections 7.3 and 7.5 of the Agreement, to do so by mailing a copy of the notice of redemption to the Company at the same time as the Trustee mails such notice of redemption to the owners of the Bonds that have been called for redemption, pursuant to Section 3.3 hereof.

      Section 3.2. Partial Redemption of Bonds. Upon a partial redemption of Bonds, the Bonds to be redeemed shall be selected in such manner as shall be designated by the Trustee. In the case of a partial redemption of Bonds prior to maturity when Bonds of denominations greater than the minimum Authorized Denomination are then outstanding, then for all purposes in connection with such redemption, each minimum Authorized Denomination of each Bond shall be treated as though it were a separate Bond. If it is determined that one or more, but not all, of the minimum Authorized Denominations represented by any Bond is to be called for redemption, then upon notice of redemption of such minimum Authorized Denomination or Denominations, the owner of such Bond shall forthwith surrender such Bond to the Trustee (1) for payment of the redemption price (including the premium, if any, and interest, if any, to the date fixed for redemption) of the minimum Authorized Denomination or Denominations called for redemption, and (2) for exchange, without charge to the owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed balance of the principal amount of such Bond, to the extent possible, provided that after the redemption date all Bonds will be in Authorized Denominations. If the owner of any such Bond of a denomination greater than the minimum Authorized Denomination shall fail to present such Bond to the Trustee for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination or Denominations called for redemption (and to that extent only); interest shall cease to accrue on the portion of the principal amount of such Bond represented by such minimum Authorized Denomination or Denominations on and after the date fixed for redemption and (moneys in an amount sufficient for the payment of the redemption price having been deposited with the Trustee, and being available for the redemption of said minimum Authorized Denomination or Denominations on the date fixed for redemption) such Bond shall not be entitled to the benefit or security of this Indenture to the extent of the portion of its principal amount (and accrued interest thereon to the date fixed for redemption) represented by such minimum Authorized Denomination or

Denominations nor shall new Bonds be thereafter issued corresponding to said minimum Authorized Denomination or Denominations.

      Section 3.3. Notice of Redemption.

           (a) Official Notice. Notice of the call for any redemption shall be given by the Trustee, at the direction of the Company (which direction shall be in writing), by mailing a copy of the redemption notice by first-class mail, postage prepaid, at least thirty (30) days, but not more than sixty (60) days, prior to the date fixed for redemption to the Registered Owner of each Bond to be redeemed as a whole or in part at the address shown on the registration books of the Issuer maintained by the Trustee; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceedings for the redemption of any Bond, or portion thereof with respect to which no such failure or defect has occurred. In addition, the Trustee may give such other notice or notices as may be recommended in releases, letters, pronouncements or other writings of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board. No defect in or delay or failure in giving any recommended notice described in the preceding sentence of this Section 3.3(a) shall in any manner affect the notice of redemption described in the first sentence of this Section 3.3(a). Any notice mailed as provided in this Section 3.3(a) shall be conclusively presumed to have been duly given, whether or not the Registered Owner receives the notice.

          All notices of redemption shall state:

     (1) the redemption date,

     (2) the redemption price,

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

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

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

          With respect to any notice of optional redemption of Bonds, unless upon the giving of such notice such Bonds shall be deemed to have been paid within the meaning of Article VII hereof, such notice shall state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, and premium, if any, and interest on, such Bonds to be redeemed, and that if such moneys shall not have been so received said notice shall be of no force and effect and the Issuer

shall not be required to redeem such Bonds. In the event that such notice of redemption contains such a condition and moneys are not so received, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

           (b) Additional Notice of Redemption. The redemption notice required in subsection (a) above shall also be given by the Trustee as set out below. No defect in such redemption notice nor any failure to give all or any portion of such redemption notice as provided in this paragraph shall in any manner defeat the effectiveness of a call for redemption. Such redemption notice shall be sent at least 30 days before the redemption date by facsimile transmission or registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations similar to the Bonds identified to the Trustee by the Company and to one or more national information services identified to the Trustee by the Company that disseminate notices of redemption of obligations such as the Bonds.

      Section 3.4. Redemption Payments. On or prior to the date fixed for redemption, moneys immediately available at the Principal Office of the Trustee on such redemption date shall be deposited in the Bond Fund and the Trustee is hereby authorized and directed to apply such funds in the Bond Fund to the payment of the Bonds or portions thereof called for redemption, together with accrued interest, if any, thereon to the date fixed for redemption and any required premium. Upon the giving of notice and the deposit of moneys for redemption (which moneys shall be held in trust for the benefit of, and subject to a security interest in favor of, the owners of the Bonds so called for redemption and may only be invested overnight in Governmental Obligations or securities rated AAA or Aaa by each Rating Agency then rating the Bonds), interest on the Bonds or portions thereof thus called shall no longer accrue from and after the date fixed for redemption, and such Bonds shall no longer be entitled to the benefit or security of this Indenture except as set forth in Section 5.12 hereof.

      Section 3.5. Cancellation. All Bonds which have been redeemed shall not be reissued but shall be canceled and disposed of by the Trustee in accordance with Section 2.9 hereof.

Article IV

General Covenants

      Section 4.1. Payment of Principal, Premium, if any, and Interest. The Issuer covenants that it will promptly pay or cause to be paid the principal of, premium, if any, and interest on, every Bond issued under this Indenture at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent and meaning thereof. The principal and interest and premium, if any, are payable by the Issuer solely and only from the Revenues, and nothing in the Bonds or this Indenture should be considered as assigning or pledging any other funds or assets of the Issuer, other than such Revenues and the right, title and interest of the Issuer in and to the Agreement (except as otherwise provided herein) in the manner and to the extent herein specified.

      Section 4.2. Performance of Covenants; Issuer. The Issuer convenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in any and every Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining thereto; provided, however, that except for the matters set forth in Section 4.1 hereof, the Issuer shall not be obligated to take any action or execute any instrument pursuant to any provision hereof until it shall have been requested to do so by the Company or by the Trustee, or shall have received the instrument to be executed and at the option of the Issuer shall have received from the Company assurance satisfactory to the Issuer that the Issuer shall be reimbursed for its reasonable expenses incurred or to be incurred in connection with taking such action or executing such instrument. The Issuer certifies that it is duly authorized under the Constitution and the laws of the State, including particularly the Act, to issue the Bonds and to execute this Indenture, to grant the security interest herein provided, to assign and pledge the Agreement (except as otherwise provided herein) and to assign and pledge the amounts hereby assigned and pledged in the manner and to the extent herein set forth, that all action on its part for the issuance of the Bonds and the execution and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the hands of the owners thereof are and will be valid and enforceable obligations of the Issuer according to the terms thereof and hereof. Anything contained in this Indenture to the contrary notwithstanding, it is hereby understood that none of the covenants or certifications of the Issuer contained in this Indenture are intended to create a general obligation of the Issuer.

      Section 4.3. Right to Payments Under Agreement; Instruments of Further Assurance. The Issuer covenants that it will defend its right to the payment of amounts due from the Company under the Agreement to the Trustee, for the benefit of the owners from time to time of the Bonds. The Issuer covenants that it will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such indentures supplemental hereto and such further acts, instruments and transfers as the Trustee may reasonably require for the better assuring, transferring, conveying, pledging, assigning and confirming unto the Trustee all and singular the rights assigned hereby and the amounts assigned and pledged hereby to the payment of the principal of, premium, if any, and interest on, the Bonds. The Issuer covenants and agrees that, except as herein and in the Agreement provided, it will not sell, convey, mortgage, encumber, or otherwise dispose of any part of the Revenues or its rights under the Agreement.

      Section 4.4. Recordation and Other Instruments. In order to perfect the security interest of the Trustee in the Trust Estate and to perfect the security interest in the Agreement, the Company has covenanted in the Agreement to cause such financing statements, at the expense of the Company, to be duly filed in the appropriate state and county offices as required by the provisions of the Uniform Commercial Code or other similar law as adopted in the State, as from time to time amended. To continue the security interest evidenced by such financing statements, the Company has covenanted in the Agreement to file and record or cause to be filed and recorded, at the expense of the Company, such necessary continuation statements or supplements thereto and other instruments from time to time as may be required pursuant to the provisions of said Uniform Commercial Code or other similar law to fully preserve and protect the security interest of the Trustee in the Trust Estate and to perfect the security interest in the Agreement. The Issuer, at the expense of the Company, shall execute and cause to be executed

any and all further instruments as shall be reasonably required by the Trustee or the Company for such protection and perfection of the interests of the Trustee and the Registered Owners. The Company has covenanted in the Agreement to file and refile or cause to be filed and refiled such instruments which shall be necessary to preserve and perfect the Trustee’s lien of this Indenture upon the Trust Estate until the principal of, premium, if any, and interest on the Bonds issued hereunder shall have been paid or provision for their payment shall be made as herein provided.

      Section 4.5. Inspection of Books. The Issuer and the Trustee covenant and agree that all books and documents in their possession relating to the Project and the Revenues shall at all times be open to inspection (upon reasonable notice to the Trustee) during normal business hours by the other or the Company and such accountants or other agencies as one of the other parties may from time to time designate.

      Section 4.6. List of Bondholders. The Trustee will keep on file a list of names and addresses of all Registered Owners of the Bonds on the registration books of the Issuer maintained by the Trustee, together with the principal amount and numbers of such Bonds. At reasonable times and under reasonable regulations established by the Trustee, said list may be inspected and copied by the Company or the owners (or a designated representative thereof) of fifteen percent (15%) or more in aggregate principal amount of Bonds then outstanding, such ownership and the authority of such designated representative to be evidenced to the satisfaction of the Trustee.

      Section 4.7. Rights Under Agreement. The Agreement, a duly executed counterpart of which has been filed with the Trustee, sets forth the covenants and obligations of the Issuer and the Company, and reference is hereby made to the same for a detailed statement of said covenants and obligations of the Company thereunder, including provisions that subsequent to the issuance of the Bonds and prior to their payment in full or provision for payment thereof in accordance with the provisions hereof the Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Trustee, and the Issuer agrees that the Trustee in its name or in the name of the Issuer may enforce all rights of the Issuer pledged and assigned hereunder and all obligations of the Company under and pursuant to the Agreement for and on behalf of the Registered Owners, whether or not the Issuer is in default hereunder.

Article V

Revenues and Funds

      Section 5.1. Source of Payment of Bonds. The Bonds herein authorized and all payments to be made by the Issuer hereunder, are not general obligations of the Issuer, but are special, limited obligations payable solely and only from the Revenues and as authorized by the Act and provided in the Agreement and in this Indenture.

          The Revenues are to be remitted directly to the Trustee for the account of the Issuer and deposited in the Bond Fund (hereinafter created). The entire amount of said Revenues is hereby

assigned and pledged to the payment of the principal of, and interest and premium, if any, on, the Bonds (and as otherwise provided in this Indenture).

      Section 5.2. Creation of Bond Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated “Mississippi Business Finance Corporation Economic Development Revenue Bonds (Ingalls Shipbuilding, Inc. Project) Taxable Series 1999A — Bond Fund,” which is pledged and shall be used to pay the principal of, premium, if any, and interest on, the Bonds.

      Section 5.3. Payments into Bond Fund. There shall be deposited in the Bond Fund, as and when received, (a) any accrued interest paid upon the initial delivery of any of the Bonds; (b) any amount in the Construction Fund directed to be paid into the Bond Fund under Sections 5.8 and 5.9 hereof; (c) all Revenues, including all moneys received by the Trustee under and pursuant to the Guaranty to pay the principal of, and premium, if any, and interest on, the Bonds; and (d) all other moneys received by the Trustee under and pursuant to the Agreement or from any other source which are required or which are accompanied by directions that such moneys are to be paid into the Bond Fund.

      Section 5.4. Use of Moneys in Bond Fund. Except as otherwise provided in Sections 5.10, 5.12 and 9.2 hereof, moneys in the Bond Fund shall be used solely for the payment of the principal of and premium, if any, on the Bonds at maturity or upon acceleration or for the redemption of the Bonds prior to maturity, and for the payment of the interest on the Bonds when due.

      Section 5.5. Custody of Bond Fund. The Bond Fund shall be in the custody of the Trustee but in the name of the Issuer, and the Issuer hereby authorizes and directs the Trustee to withdraw sufficient funds from the Bond Fund to pay the principal of and premium, if any, and interest on the Bonds as the same become due and payable which authorization and direction the Trustee hereby accepts.

      Section 5.6. Construction Fund. There is hereby created and established with the Trustee a trust fund in the name of the Issuer to be designated “Mississippi Business Finance Corporation Economic Development Revenue Bonds (Ingalls Shipbuilding, Inc. Project) Taxable Series 1999A — Construction Fund,” which shall be expended in accordance with the provisions of the Agreement.

      Section 5.7. Payments into Construction Fund; Disbursements. The proceeds of the issuance and delivery of the Bonds in accordance with Section 2.6 hereof (excluding accrued interest, if any) shall be deposited in the Construction Fund. Moneys in the Construction Fund shall be expended in accordance with Section 3.3 of the Agreement pursuant to requisitions signed by an Authorized Company Representative and delivered to the Trustee stating with respect to each payment to be made:

     (a) The requisition number;

     (b) The name and address of the person, firm or corporation to whom payment is due or has been made, which may include the Company;

     (c) The amount to be or which has been paid; and

     (d) That each obligation mentioned therein has been properly incurred, is a proper charge against the Construction Fund in accordance with the provisions of the Agreement and has not been the basis of any previous requisition from the Construction Fund or from the proceeds (including investment income) of any other obligations issued by or on behalf of any state or political subdivision, including authorities, agencies, departments or other similar issuers.

          The Trustee is hereby authorized and directed to make the disbursement pursuant to each such requisition and to issue its checks therefor. In making any such disbursement, the Trustee may rely on any such requisition. The Trustee shall keep and maintain adequate records pertaining to the Construction Fund and all disbursements therefrom and shall provide monthly statements of transactions and investments pertaining to the Construction Fund to the Company so long as any Bonds remain outstanding.

      Section 5.8. Completion of Project. The completion of the Project and payment or provision made for payment of the full Cost of the Project shall be evidenced by the filing with the Trustee of a certificate required by the provisions of Section 3.4 of the Agreement. Any balance remaining in the Construction Fund on the Completion Date shall be used in accordance with Section 3.4 of the Agreement.

      Section 5.9. Transfer of Construction Fund. If all of the Bonds are paid or deemed to be paid or canceled as herein provided or if the principal of the Bonds shall have become due and payable pursuant to Article VIII hereof, then, notwithstanding anything herein to the contrary, any balance then remaining in the Construction Fund shall without further authorization be deposited in the Bond Fund by the Trustee.

      Section 5.10. Non-presentment of Bonds. In the event any Bond or portion thereof shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, or in the event that any interest payment remains unclaimed, then if moneys sufficient to pay such Bond or interest, including all interest accrued thereon to such date and any premium due in connection therewith shall have been made available to the Trustee, all liability of the Issuer for the payment of such Bond or the payment of such interest and all liability of the Company for the payment of such Bond or the payment of such interest shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such fund or funds (which may only be invested overnight in Governmental Obligations or securities rated AAA or Aaa by each Rating Agency then rating the Bonds), without liability for interest thereon, in trust for the benefit of, and subject to a security interest in favor of, the owner of such Bond or such interest payment, as the case may be, who shall thereafter be restricted exclusively to such fund or funds, for any claim of

whatever nature on his part under this Indenture or on, or with respect to, said Bond or interest. Subject to applicable law, any moneys so deposited with and held by the Trustee for the benefit of such persons, if any, for one (1) year after the date upon which such moneys were so deposited, shall be repaid to the Company as provided in Section 8.5 of the Agreement on written request of the Company and thereafter such persons shall look only to the Company for the purpose of payment from such moneys and then only to the extent of the amounts so deposited with the Company, without interest thereon, and the Issuer and the Trustee shall have no responsibility with respect to such moneys and all liability of the Issuer and the Trustee with respect to such moneys shall thereupon cease, terminate and be completely discharged.

      Section 5.11. Moneys to be Held in Trust. All moneys required to be deposited with or paid to the Trustee for the account of the Bond Fund or the Construction Fund under any provision of this Indenture shall be held by the Trustee in trust, and except for moneys deposited with or paid to the Trustee for the redemption of Bonds, notice of the redemption of which has been duly given, and except for moneys which have been deposited with the Trustee pursuant to Article VII hereof, and except for moneys held pursuant to Section 5.10 hereof, shall, while held by the Trustee, constitute part of the Trust Estate and be subject to the lien or security interest created hereby.

      Section 5.12. Repayment to the Company from Bond Fund. Subject to the provisions of Section 5.10 hereof, any amounts remaining in the Bond Fund or any other fund or account established pursuant to this Indenture after payment in full of the Bonds (or provision therefor having been made in accordance herewith), and payment in full of the fees, charges and expenses of the Issuer and the Trustee and payment in full of all other amounts required to be paid hereunder and under the Agreement shall be paid to the Company.

      Section 5.13. Additional Payments Under the Agreement. Pursuant to Section 4.2(b) of the Agreement the Company has agreed to pay as provided therein fees, expenses and indemnities of the Trustee. All such additional payments received by the Trustee shall not be paid into the Bond Fund and the Construction Fund, but shall be disbursed by the recipient thereof solely for the purposes for which said additional payments are received.

Article VI

Investment of Moneys

          Except as provided in Sections 3.4 and 5.10 hereof, any moneys held as part of the Bond Fund and any moneys held as part of the Construction Fund shall be invested and reinvested by the Trustee at the written direction of the Company in accordance with the provisions of Section 3.5 of the Agreement. The Trustee may make any and all such investments and such investments described in the next succeeding paragraph through its own investment department. Any such investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the fund for which they were made. The interest accruing thereon and any profit realized from such investments shall be credited to such fund, and any net loss resulting from such investments shall be charged to such fund. The Trustee shall, at the written direction of the Company, sell and reduce to cash a sufficient amount of such investments of the

Construction Fund whenever the cash balance in the Construction Fund is insufficient to pay a requisition when presented or of the Bond Fund whenever the cash balance in the Bond Fund is insufficient to pay the principal of, premium, if any, and interest on the Bonds when due, provided, that the Trustee shall, at the direction of the Company, first sell and reduce to cash those investments of the Bond Fund which mature earliest. The Trustee shall have no responsibility with respect to the compliance by the Company or the Issuer with any covenant herein regarding investments made in accordance with this Article, other than to use its best reasonable efforts to comply with instructions from the Company regarding such investments and the Trustee shall bear no responsibility for losses incurred from such investments. Since the investments permitted by this Section have been included at the request of the Company and the making of such investments from time to time will be subject to the Company’s direction, the Issuer and the Trustee specifically disclaim any obligation to the Company for any loss arising from, or tax consequences of, investments pursuant to the provisions of this Section. The Trustee shall not be responsible for any depreciation of the value of any investment made pursuant to this Section or for losses incurred in the redemption, sale or other disposal of any investments made in accordance with this Section.

Article VII

Discharge of Lien

          If the Issuer shall pay or cause to be paid, or there shall be otherwise paid or provision for payment made to or for the owners from time to time of the Bonds, the principal of, premium, if any, and interest due or to become due thereon on the dates and in the manner stipulated therein, and shall pay or cause to be paid to the Trustee all sums of money due or to become due according to the provisions hereof and if all other liabilities of the Company under the Agreement shall have been satisfied, then these presents and the estate and rights hereby granted shall cease, determine and be void, whereupon the liens of this Indenture shall be canceled and discharged (except with respect to moneys held by the Trustee hereunder, and the rights and immunities of the Issuer and the Trustee hereunder), and upon written request of the Issuer or the Company, the Trustee shall execute and deliver to the Issuer such instruments in writing as shall be required by the Issuer or the Company to cancel and discharge the lien hereof and thereof, and reconvey, release, assign and deliver unto the Issuer and the Company, respectively, the estate, right, title and interest in and to any and all property conveyed, assigned or pledged to the Trustee or otherwise subject to the lien of this Indenture, except amounts in the Bond Fund or any other fund or account established pursuant to this Indenture required to be paid to the Company under Section 5.12 hereof.

          Any Bond shall be deemed to be paid within the meaning of this Article VII when payment of the principal of and premium, if any, on such Bond, plus interest thereon to the due date thereof (whether such due date be by reason of maturity or upon redemption prior to maturity as provided in this Indenture or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided by irrevocably depositing with the Trustee, in trust for the benefit of and subject to a security interest in favor of the owner of such Bond, and irrevocably setting aside exclusively for such payment on such due date (1) moneys sufficient to make such payment, or (2) Governmental Obligations maturing as

to principal and interest in such amounts and on such dates as will (together with any moneys held under clause (1)), in the written opinion of a firm of certified public accountants delivered to the Trustee, provide sufficient moneys without reinvestment to make such payment, and if all necessary and proper fees, compensation and expenses of the Trustee pertaining to the Bonds with respect to which such deposit is made and all other liabilities of the Company under the Agreement shall have been paid or the payment thereof provided for to the satisfaction of the Trustee. At such time as a Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes set forth in Sections 2.7 and 2.8 hereof and any such payment from such moneys or Governmental Obligations on the date or dates specified at the time of such deposit.

          Notwithstanding the foregoing, in the case of Bonds which are to be redeemed prior to the Maturity Date, no deposit under clause (ii) of the immediately preceding paragraph shall be deemed a payment of such Bonds as aforesaid until proper notice of redemption of such Bonds shall have been previously given in accordance with Article III hereof, or until the Company, on behalf of the Issuer, shall have given the Trustee, in form satisfactory to the Trustee, irrevocable instructions:

     (a) stating the redemption date when the principal (and premium, if any) of each such Bond is to be paid (which may be any redemption date permitted by this Indenture); and

     (b) to call for redemption pursuant to this Indenture any Bonds to be redeemed prior to the Maturity Date pursuant to (a) hereof.

          In the case of Bonds which are not to be redeemed within the next succeeding sixty (60) days, the Trustee shall mail, as soon as practicable, in the manner prescribed by Article III hereof, a notice to the owners of such Bonds that the deposit required by (ii) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Article VII and stating the redemption or maturity date upon which moneys are to be available for the payment of the redemption price on or principal of said Bonds.

          Any moneys so deposited with the Trustee as provided in this Article VII may at the direction of the Company also be invested and reinvested in Governmental Obligations, maturing in the written opinion of a firm of nationally recognized certified public accountants delivered to the Trustee in the amounts and on the dates as hereinbefore set forth, and all income from all Governmental Obligations in the hands of the Trustee pursuant to this Article VII which in the written opinion of a firm of certified public accountants delivered to the Trustee is not required for the payment of the Bonds and interest and premium, if any, thereon with respect to which such moneys are deposited, shall be deposited in the Bond Fund as and when collected for use and application as are other moneys deposited in that fund.

          Anything in Article X hereof to the contrary notwithstanding, if moneys or Governmental Obligations have been deposited or set aside with the Trustee pursuant to this Article VII for the payment of the principal of, premium, if any, and interest on the Bonds and the principal of, premium, if any, and interest on such Bonds shall not have in fact been actually paid in full, no

amendment to the provisions of this Article VII shall be made without the consent of the owner of each of the Bonds affected thereby.

          If an agreement with a Securities Depository as described in Section 2.11 hereof is then in effect and such agreement provides for the Trustee to obtain a CUSIP number in the event of a partial refunding or redemption of the Bonds and the authentication of a new Bond for the refunded or redeemed Bonds, then the Trustee shall comply with the provisions of such agreement.

Article VIII

Default Provisions and Remedies of Trustee
and Bondholders

      Section 8.1. Defaults; Events of Default. If any of the following events occur, it is hereby declared to constitute an “event of default” hereunder:

     (a) Failure to pay interest on any Bond when such interest shall have become due and payable;

     (b) Failure to pay the principal of, or premium, if any, on any Bond, when due, whether at the stated maturity thereof or upon proceedings for redemption thereof;

     (c) Failure to perform or observe any other of the material covenants, agreements or conditions on the part of the Issuer in this Indenture or in the Bonds contained and failure to remedy the same after notice thereof pursuant to Section 8.12 hereof;

     (d) The occurrence of an “Event of Default” under the Agreement; or

     (e) The occurrence of an “event of default” under the Guaranty.

      Section 8.2. Acceleration. Upon the occurrence of an event of default hereunder, the Trustee may, and upon the written request of the owners of not less than a majority in aggregate principal amount of Bonds then Outstanding the Trustee shall, by notice in writing delivered to the Issuer and the Company, declare the principal of all Bonds then Outstanding and the interest accrued thereon to the date of such declaration immediately due and payable, and such principal, interest, and any premium the Issuer shall have become obligated to pay prior to such date, if any, shall thereupon become and be immediately due and payable. Upon any acceleration hereunder the Trustee shall immediately declare an amount equal to all amounts then due and payable on the Bonds to be immediately due and payable under Section 4.2(a) of the Agreement.

      Section 8.3. Other Remedies; Rights of Bondholders. Upon the occurrence of an event of default hereunder the Trustee may, in addition or as an alternative to the remedy provided for in Section 8.2 hereof, pursue any available remedy by suit at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Bonds then outstanding.

          If an event of default shall have occurred, and if requested so to do by the owners of not less than a majority in aggregate principal amount of Bonds then outstanding, and if indemnified as provided in Section 9.1(1) hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Section 8.3, as the Trustee, being advised by counsel, shall deem most expedient and in the interests of the Registered Owners; provided that such request shall not be otherwise than in accordance with the provisions of law and of this Indenture and shall not result in the personal liability of the Trustee. The Trustee may take any other action under this Indenture which is not inconsistent with such requests. No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Registered Owners) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Registered Owners hereunder or now or hereafter existing at law or in equity.

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

          No waiver of any default or event of default hereunder, whether by the Trustee or the Registered Owners, shall extend to or shall affect any subsequent default or event of default or shall impair any rights or remedies consequent thereon.

      Section 8.4. Right of Bondholders to Direct Proceedings. Anything in this Indenture to the contrary notwithstanding, the owners of not less than a majority in aggregate principal amount of the Bonds then outstanding shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, and subject to indemnification of the Trustee pursuant to Section 9.1(1) hereof, to direct the time, method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver or any other proceedings hereunder; provided, that such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture and shall not result in the personal liability of the Trustee. The Trustee may take any other action under this Indenture which is not inconsistent with such direction.

      Section 8.5. Appointment of Receivers. Upon the occurrence of an event of default hereunder and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Registered Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Trust Estate and of the revenues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer.

      Section 8.6. Waiver. Upon the occurrence of an event of default hereunder, to the extent that such rights may then lawfully be waived, neither the Issuer, nor anyone claiming through or under the Issuer, shall set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption laws now or hereafter in force, in order to prevent or hinder the enforcement of this Indenture, and the Issuer, for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of all such laws.

      Section 8.7. Application of Moneys. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article VIII or pursuant to Section 6.3 or 6.9 hereof shall, after payment to the Trustee as provided in Section 9.2 hereof, be deposited in the Bond Fund; and all moneys in the Bond Fund (other than moneys held for the payment of a particular Bond) during the continuation of an event of default hereunder shall be applied as follows:

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

      First - To the payment to the persons entitled thereto of all interest then due on the Bonds and, if the amount available shall not be sufficient to pay said amount in full, then to the payment ratably, according to the amounts due, to the persons entitled thereto, without any discrimination or privilege; and

      Second - To the payment to the persons entitled thereto of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture) and, if the amount available shall not be sufficient to pay in full such unpaid principal and premium, then to the payment ratably to the persons entitled thereto without any discrimination or privilege.

     (b) If the principal of all the Bonds shall have become due or shall have been declared due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond.

     (c) If the principal of all of the Bonds shall have been declared due and payable, and if such declarations shall thereafter have been rescinded and annulled under the provisions of this Article VIII then, subject to the provisions of Section 8.7(b) hereof in the event that the principal of all of the Bonds shall later become due or be declared due and payable, the moneys shall be applied in accordance with the provisions of Section 8.7(a) hereof.

          Subject to the provisions of Section 9.2 hereof, whenever moneys are to be applied pursuant to the provisions of this Section 8.7, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and

shall not be required to make payment to the owner of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

      Section 8.8. Remedies Vested in Trustee. All rights of action (including the right to file proofs of claim) under this Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any owners of the Bonds, and any recovery of judgment shall be for the equal and ratable benefit of the owners of the outstanding Bonds.

      Section 8.9. Rights and Remedies of Bondholders. No owner of any Bond shall have any right to institute any suit, action or proceeding at law or in equity for the enforcement of this Indenture or the Agreement or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder or thereunder, unless a default has occurred of which the Trustee has been notified as provided in Section 9.1(h) hereof, or of which by said subsection it is deemed to have notice, nor unless also such default shall have become an event of default hereunder and the owners of not less than a majority in aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in Section 9.1(1), nor unless the Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name for sixty (60) days after such notification, request and offer of indemnification; and such notification, request and offer of indemnity are hereby declared in every case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture or the Agreement, or for the appointment of a receiver or for any other remedy hereunder or thereunder; it being understood and intended that no one or more owners of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by its, his or their action or to enforce any right hereunder or thereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the equal and ratable benefit of the owners of all Bonds then Outstanding. Nothing contained in this Indenture, however, shall affect or impair the right of any Registered Owner to enforce the payment of the principal of, premium, if any, and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of, premium, if any, and interest on each of the Bonds issued hereunder to the respective owners thereof on the date, at the place, from the source and in the manner in the Bonds expressed

      Section 8.10. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case the Issuer, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder respectively with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

      Section 8.11. Waivers of Events of Default. The Trustee may at its discretion waive any event of default hereunder and its consequences and may rescind any declaration of acceleration of principal, and shall do so upon the written request of the owners of (1) not less than a majority in aggregate principal amount of all the Bonds then Outstanding in respect of which default in the payment of principal or interest, or both, exists, or (2) not less than a majority in aggregate principal amount of all Bonds then Outstanding in the case Of any other default; provided, however, that there shall not be waived (a) any default in the payment of the principal of or premium, if any, on any Outstanding Bonds at the date of maturity specified therein or redemption prior to maturity, or (b) any default in the payment when due of the interest on any such Bonds, unless prior to such waiver or rescission, all arrears of principal or interest, or both, and all expenses of the Trustee, in connection with such default shall have been paid or provided for; and in case of any such waiver or rescission, or in case any proceeding taken by the Trustee on account of any such default shall have been discontinued or abandoned or determined adversely, then and in every such case the Issuer, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right consequent thereon.

      Section 8.12. Notice of Defaults under Section 8. 1(c) ; Opportunity of the Issuer and the Company to Cure Such Defaults. Anything herein to the contrary notwithstanding, no default under Section 8.1(c) hereof shall constitute an event of default hereunder until notice of such default by registered or certified mail, return receipt requested, shall be given to the Issuer and the Company by the Trustee or to the Issuer, the Company and the Trustee by the owners of not less than a majority in aggregate principal amount of all Bonds then Outstanding which notice shall specify such default, request that said default be remedied and state that such notice is a “Notice of Default” hereunder, and the Issuer and the Company shall have had ninety (90) days after receipt of such notice to correct said default or cause said default to be corrected, and shall not have corrected said default or caused said default to be corrected within the applicable period.

          With regard to any default concerning which notice is given to the Issuer and the Company under the provisions of this Section 8.12, the Issuer hereby grants the Company full authority for account of the Issuer to perform any covenant or obligation alleged in said notice to constitute a default, in the name and stead of the Issuer with full power to do any and all things and acts to the same extent that the Issuer could do and perform any such things and acts and with power of substitution.

Article IX

Trustee

      Section 9.1. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture and agrees to perform said trusts, but only upon and subject to the following express terms and conditions:

     (a) The Trustee, prior to the occurrence of an event of default and after the curing of all events of default which may have occurred hereunder, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an event of default has occurred hereunder (which has not been cured or waived), and subject to the provisions of Section 9.1(1) hereof, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

     (b) The Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, agents, receivers or employees, but shall, in the case of attorneys, agents or receivers, not be answerable for the conduct of the same if appointed by the Trustee in good faith and without negligence, and shall be entitled to advice of counsel concerning its duties hereunder and thereunder, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder or thereunder in good faith in reliance thereon, and may in all cases pay such reasonable compensation to all such attorneys, agents and receivers as may reasonably be employed in connection with the trusts hereof or thereof, and the Trustee may be reimbursed for such payment as provided in Section 4.2(b) of the Agreement.

     (c) The Trustee shall not be responsible for any recital herein or in the Bonds (except with respect to the certificate of the Trustee endorsed on the Bonds), or for the validity of the execution by the Issuer of this Indenture or any supplemental indentures hereto, or of any instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby or for filing any financing or continuation statements in any public office at any time in order to perfect or maintain the perfection of any security interest granted hereby or to maintain any insurance policy relating to the Project. No provision of this Indenture shall require the Trustee to expend or risk its own funds or shall relieve the Trustee from liability for its negligence or willful misconduct.

     (d) The Trustee shall not be accountable for the use of the proceeds of any Bonds authenticated or delivered hereunder. The Trustee may become the owner of Bonds secured hereby with the same rights which it would have if not the Trustee.

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

     (f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a certificate signed by a member or an authorized official of the Issuer or an Authorized Company Representative under the Agreement as sufficient evidence of the facts therein contained and prior to the occurrence of a default of which the Trustee has been notified as provided in Section 9.1(h) hereof, or of which by Section 9.1(h) it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. The Trustee may accept a certificate of a member or an authorized official of the Issuer to the effect that an authorization in the form therein set forth has been adopted by the Issuer as conclusive evidence that such authorization has been duly adopted, and is in full force and effect.

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

     (h) The Trustee shall not be required to take notice or be deemed to have notice of any default or event of default hereunder or under the Agreement except failure by the Issuer to cause to be made any of the payments to the Trustee required to be made by Article IV hereof, unless the Trustee shall be specifically notified in writing of such default by the Issuer, the Company or the owners of at least a majority in aggregate principal amount of Bonds then Outstanding and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Principal Office of the Trustee (unless otherwise provided in the Bonds and this Indenture), and in the absence of such notice so delivered the Trustee may conclusively assume there is no default except as aforesaid.

     (i) At any and all reasonable times, the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect any and all of the property herein conveyed, including all books, papers and records of the Issuer and the Company pertaining to the Project and the Bonds (upon reasonable notice to the Issuer or the Company, as the case may be), and to take such memoranda from and with regard thereto as may be desired, subject to such limitations, restrictions and requirements as the Issuer or the Company, as the case may be, may reasonably prescribe.

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

     (k) Notwithstanding anything elsewhere in this Indenture and the Agreement with respect to the authentication of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture and the Agreement, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or

evidence thereof, in addition to that by the terms hereof required as a condition of such action, by the Trustee deemed desirable for the purpose of establishing the right of the Issuer or the Company to the authentication of any Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee.

     (l) Before taking any action at the request or direction of owners of the Bonds under this Indenture, including directions referred to in Section 8.3, Section 8.4, and Section 9.4 hereof, the Trustee may require that a satisfactory indemnity bond be furnished by such owners for the reimbursement of all expenses (including reasonable counsel fees and expenses) to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence, bad faith or misconduct. Notwithstanding anything in this Indenture to the contrary, the Trustee may not require the indemnification provided for in this Section 9.1(1) before taking action under Section 9.2 hereof or to realize moneys under the Guaranty as provided herein or before making regularly scheduled payments of principal and interest on the Bonds.

     (m) 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.

     (n) The Trustee’s rights to immunities and protection from liability hereunder and its rights to payment of its fees, expenses and indemnities shall survive its resignation or removal and the final payment or defeasance of the Bonds and all indemnifications and releases from liability granted herein to the Trustee shall extend to its directors, officers, employees and agents.

      Section 9.2. Fees, Charges, Indemnities and Expenses of the Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all advances, counsel fees and other expenses reasonably made or incurred by the Trustee in connection with such services and in connection with entering into this Indenture. The Trustee shall also be entitled to payment of its reasonable fees, charges and expenses in the event that provision for the payment of the Bonds is made pursuant to Article VII hereof. The Company, the Issuer and the holders of the Bonds agree that the Trustee shall have a first lien for the foregoing fees, charges and expenses and for the indemnities owed to it under Section 4.2(b) of the Agreement with right to enforce such lien for payment prior to payment on account of principal of, premium, if any, and interest on any Bond upon the Trust Estate (other than moneys held for the payment of particular Bonds whether or not such payment is then due and owing) for the foregoing fees, charges, expenses and indemnities incurred by it.

      Section 9.3. Notice of Default. If a default occurs of which the Trustee is by Section 9.1(h) hereof required to take notice or if notice of default be given as therein provided, then the Trustee shall promptly give written notice thereof by registered or certified mail, return receipt requested, to the Issuer and the Company. The Trustee shall promptly give written notice of any such default by registered or certified mail, return receipt requested, to the owner of each

Bond as shown by the list of Registered Owners required by the terms of Section 4.6 hereof to be kept at the Principal Office of the Trustee.

      Section 9.4. Intervention by the Trustee. In any judicial proceeding to which the Issuer is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of the owners from time to time of the Bonds, the Trustee may intervene on behalf of Registered Owners and, subject to the provisions of Section 9.1(1) hereof, shall do so if requested in writing by the owners of at least a majority of the aggregate principal amount of Bonds then Outstanding.

      Section 9.5. Successor Trustee. Any corporation or association into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, merger or consolidation to which it is a party, shall be and become successor Trustee hereunder and vested with all of the title to the Trust Estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Any such successor Trustee shall give notice thereof to the Issuer and the Company.

      Section 9.6. Resignation by the Trustee. The Trustee and any successor Trustee may at any time resign from the trusts hereby created by giving sixty (60) days’ written notice by first class mail, postage prepaid, to the Issuer, the Company and the owner of each Bond as shown by the list of Registered Owners required by Section 4.6 hereof to be kept by the Trustee, and such resignation shall take effect at the end of such sixty (60) days provided that a successor Trustee has been appointed and shall have accepted appointment pursuant to Section 9.8 hereof, or upon the earlier appointment of, and acceptance of appointment by, a successor Trustee pursuant to Section 9.8 hereof. If no successor Trustee shall have been so appointed and have accepted appointment within sixty (60) days of the giving of written notice by the resigning Trustee as aforesaid, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

      Section 9.7. Removal of the Trustee. The Trustee may be removed at any time, by an instrument or concurrent instruments in writing delivered to the Trustee, the Issuer and the Company and signed by the owners of not less than a majority in aggregate principal amount of Bonds then Outstanding, or (so long as no default or Event of Default is then existing under the Agreement) signed by the Company and delivered to the Trustee and the Issuer, and such removal shall take effect at the appointment of a successor Trustee pursuant to the provisions of Section 9.8 hereof and acceptance by such Trustee.

      Section 9.8. Appointment of Successor Trustee. In case the Trustee hereunder shall (a) give notice of resignation, (b) be removed, or (c) be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public office or offices, or of a receiver appointed by a court; a successor shall be appointed by the Issuer (at the written direction of the Company); provided,

that if a successor Trustee is not so appointed within sixty (60) days after notice of resignation is mailed or an instrument of removal is delivered as provided under Sections 9.6 and 9.7 hereof, respectively, or within sixty (60) days of the Issuer’s knowledge of any of the events specified in (c) hereinabove, then the owners of not less than a majority in aggregate principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing signed by such owners, or by their duly authorized attorneys in fact, a copy of which shall be delivered personally or sent by first class mail, postage prepaid, to the Issuer, the retiring Trustee, the successor Trustee and the Company, may designate such successor. If the Registered Owners and the Issuer fail to so appoint a successor Trustee hereunder within sixty (60) days after the Trustee has given notice of its resignation, has been removed, has been dissolved, has otherwise become incapable of acting hereunder or has been taken under control by a public officer or receiver, the Trustee shall have the right to petition a court of competent jurisdiction to appoint a successor Trustee hereunder. Every such Trustee appointed pursuant to the provisions of this Section 9.8 shall be a trust company or bank with trust powers in good standing and have a reported capital and surplus of not less than $100,000,000 (such capital and surplus requirement may be met by the trust company’s or bank’s holding company) if there be such an institution willing, qualified and able to accept the trust upon customary terms.

      Section 9.9. Concerning Any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its or his predecessor and also to the Issuer an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of the Issuer (at the direction of the Company), or of its successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder, and every predecessor Trustee shall, upon payment of its charges, deliver all securities and moneys held by it as Trustee hereunder to its successor. Should any instrument in writing from the Issuer be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby or thereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Issuer. The resignation of any Trustee and the instrument or instruments removing any Trustee and appointing a successor hereunder and thereunder, together with all other instruments provided for in this Article X, shall be filed or recorded by the successor Trustee in each recording office where the Indenture (or a financing statement with respect thereto) shall have been filed or recorded.

      Section 9.10. Appointment of a Co-Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in case of litigation under this Indenture or the Agreement and, in particular, in case of the enforcement of either of them on default, or in case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies granted herein to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint, with the consent

of the Company (to the extent that no default or Event of Default shall have occurred and be continuing under the Agreement), an additional individual or institution as a separate trustee or co-trustee. The following provisions of this Section 9.10 are adapted to these ends.

          In the event that the Trustee appoints an additional individual or institution as a separate trustee or co-trustee, in the event of the incapacity or lack of authority of the Trustee, by reason of any present or future law of any jurisdiction, to exercise any of the rights, powers, trusts and remedies herein granted to the Trustee or to hold title to the Trust Estate or to take any other action which may be necessary or desirable in connection therewith, each and every remedy, power, right, obligation, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be imposed upon, exercised by or vested in or conveyed to the Trustee with respect thereto shall be imposed upon, exercisable by and vest in such separate trustee or co-trustee, but only to the extent necessary to enable such separate trustee or co-trustee to exercise such powers, rights, trusts and remedies, and every covenant and obligation necessary to the exercise thereof by such separate trustee or co-trustee shall run to and be enforceable by either of them. Such separate trustee or co-trustee shall deliver an instrument in writing acknowledging and accepting its appointment hereunder to the Issuer, the Trustee and the Company.

          Should any instrument in writing from the Issuer be required by the separate trustee or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Issuer. If the Issuer shall fail to deliver the same within fifteen (15) days of such request, or if an Event of Default has occurred and is continuing, the Trustee is hereby appointed attorney-in-fact for the Issuer to execute, acknowledge and deliver such instruments in the Issuer’s name and stead. In case any separate trustee or co-trustee, or a successor to either, shall die, become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co-trustee.

Article X

Supplemental Indentures

      Section 10.1. Supplemental Indentures Not Requiring Consent of Bondholders. The Issuer and the Trustee may, without consent of, or notice to, any of the Bondholders enter into an indenture or indentures supplemental to this Indenture for any one or more of the following purposes:

          (a) To cure any ambiguity or formal defect or omission in this Indenture or to make any other change, provided that no such action is to the prejudice of the Registered Owners;

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

          (c) To secure or maintain ratings on the Bonds from Moody’s and/or S&P, which changes will not restrict, limit or reduce the obligation of the Company to pay amounts sufficient to pay the principal of and premium, if any, and interest on the Bonds or otherwise materially adversely affect the Registered Owners under this Indenture; and

          (d) To make any other change which in the judgment of the Trustee does not materially adversely affect the Registered Owners.

          Upon the execution of any such supplemental indenture as in this Section 10.1 permitted and provided, this Indenture shall be deemed to be modified and amended in accordance therewith.

      Section 10.2. Supplemental Indentures Requiring Consent of Bondholders. Exclusive of supplemental indentures covered by Section 10.1 hereof and subject to the terms and provisions contained in this Section 10.2, and not otherwise, the owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Indenture to the contrary notwithstanding, to consent to and approve the execution by the Issuer and the Trustee of such other indenture or indentures supplemental hereto as shall be deemed necessary and desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any supplemental indenture; provided, however, that nothing in this Section 10.2 or in Section 10.1 hereof contained shall permit, or be construed as permitting, without the consent of the owners of 100% in aggregate principal amount of the Bonds then Outstanding, (a) an extension of the maturity (or mandatory redemption date) of the principal of, premium, if any, or the interest on, any Bond issued hereunder, or (b) a reduction in the principal amount of, or redemption premium on, any Bond or a change in the interest rate borne by any Bond issued hereunder, or (c) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (d) a reduction in the aggregate principal amount of the Bonds the owners of which are required to consent to such supplemental indenture or to an amendment to the Agreement as provided in Section 11.2 hereof, or (e) the creation of any lien ranking prior to or on a parity with the lien of this Indenture on the Trust Estate or any part thereof, except as hereinbefore expressly permitted, or (f) the deprivation of the owner of any Bond then Outstanding of the lien hereby created on the Trust Estate.

          If at any time the Issuer shall request the Trustee to enter into any such supplemental indenture for any of the purposes of this Section 10.2, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such supplemental indenture to be sent by overnight delivery service (with the signature of the receiving party required) or to be mailed by registered or certified mail, return receipt requested, to the owner of each Bond then Outstanding as shown by the list of Registered Owners required by the terms of Section 4.6 hereof to be kept at the Principal Office of the Trustee. Such notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that

copies thereof are on file at the Principal Office of the Trustee for inspection by all Registered Owners. If, within sixty (60) days or such longer period as shall be prescribed by the Trustee following the sending or mailing of such notice, the owners of not less than a majority or 100%, as the case may be, in aggregate principal amount of the Bonds then Outstanding shall have consented to and approved the execution thereof as herein provided, no owner of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such supplemental indenture as in this Section 10.2 permitted and provided, this Indenture shall be and be deemed to be modified and amended in accordance therewith.

      Section 10.3. Consent of Company. Anything herein to the contrary notwithstanding, no amendment, change or modification of this Indenture shall become effective unless and until the Company shall have consented in writing to the execution and delivery of such supplemental indenture. In this regard, the Trustee shall cause notice of the proposed execution of any such supplemental indenture, together with a copy of the proposed supplemental indenture, to be given by overnight delivery service (with the signature of the receiving party required) or by registered or certified mail, return receipt requested, to the Company at least fifteen (15) days prior to the proposed date of execution and delivery of any such supplemental indenture.

      Section 10.4. 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, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent have been complied with. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Article XI

Amendment of Agreement and Guaranty

      Section 11.1. Amendments, Etc., to Agreement Not Requiring Consent of Bondholders. The Issuer and the Trustee may, without the consent of or notice to the Registered Owners, consent to any amendment, change or modification of the Agreement (including an assignment thereof) as may be required (i) by the provisions of the Agreement or this Indenture; (ii) for the purpose of curing any ambiguity or formal defect or omission or in connection with any other change therein; (iii) to secure or maintain ratings on the Bonds from Moody’s and/or S&P; (iv) to describe more fully or to amplify or correct the description of any property financed under the Agreement or intended to be so or to amend Exhibit A to the Agreement in accordance with Section 3.1 thereof; or (v) to make any other change which in the judgment of the Trustee does not materially adversely affect the Registered Owners.

      Section 11.2. Amendments, Etc., to Agreement Requiring Consent of Bondholders. Except for the amendments, changes or modifications as provided in Section 11.1 hereof, the Issuer and the Trustee shall not consent to any other amendment, change or modification of the Agreement without the giving of notice and the written approval or consent of the owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding given as provided in this Section 11.2; provided, however, that nothing in this Section 11.2 or in Section 11.1 hereof contained shall permit or be construed as permitting, without the consent of the owners of 100% in aggregate principal amount of the Bonds then Outstanding, (a) an extension of time for the payment of an amount due pursuant to Section 4.2(a) of the Agreement; (b) a reduction in the total amount due pursuant to Section 4.2(a) of the Agreement; or (c) a reduction in the aggregate principal amount of the Bonds the owners of which are required to consent to such amendment, change or modification of the Agreement. If at any time the Issuer and the Company shall request the consent of the Trustee to any such proposed amendment, change or modification of the Agreement, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be given in the same manner as provided by Section 10.2 hereof with respect to supplemental indentures. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the Principal Office of the Trustee for inspection by all Registered Owners.

      Section 11.3. Amendment of Guaranty. The Trustee and the Guarantor may, without the consent of or notice to the owners of the Bonds, enter into any amendment, change or modification of the Guaranty (i) as may be required by the provisions of the Guaranty or this Indenture, (ii) for the purpose of curing any ambiguity or formal defect or omission, (iii) in connection with an amendment of this Indenture, (iv) to effect any event or purpose for which there could be an amendment of this Indenture without the consent of the owners of the Bonds, or (v) in connection with any other change therein which is not in the judgment of the Trustee to the material prejudice of the Trustee or the owners of the Bonds. Except for the amendments, changes or modifications described in the preceding sentence, the Trustee and the Guarantor may not enter into any other amendment, change or modification of the Guaranty without first mailing notice to, and obtaining the written approval or consent of, the owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that the foregoing does not permit, without the written approval or consent of the Owners of 100% in aggregate principal amount of the Bonds then Outstanding, an extension of the time of payment of, or a reduction in, any amount payable under the Guaranty as to principal of, and premium, if any, or interest on, the Bonds or any change in the unconditional nature of the obligations of the Guarantor thereunder. Notwithstanding the above provisions of this Section 11.3, any amendment, change or modification of the Guaranty relating to payments due the Issuer under Section 4.2(c), 5.2 or 6.2 of the Agreement may only be made with the prior written consent of the Issuer.

      Section 11.4. Execution of Consents. In executing any consent permitted by this Article the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of Counsel stating that the execution of such consent is authorized or permitted by this Indenture and that all conditions precedent have been complied with. The Trustee may, but shall not be

obligated to, consent to any amendment, change or modification of the Agreement which affects the Trustee’s own rights, duties or immunities under this Indenture, the Agreement or otherwise.

Article XII

Miscellaneous

      Section 12.1. Consents, Etc., of Bondholders. Any consent, request, direction, approval, objection or other instrument required by this Indenture to be signed and executed by the Registered Owners may be in any number of concurrent documents and may be executed by such Registered Owners in person or by an agent appointed in writing. Proof of the execution of any such consent, request, direction, approval, objection or other instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Indenture, and shall be conclusive in favor of the Trustee with regard to any action taken by it under such request or other instrument, namely:

          (a) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgment within such jurisdiction that the person signing such writing acknowledged before him the execution thereof, or by an affidavit of any witness to such execution, or in any manner satisfactory to the Trustee.

          (b) The fact of ownership of Bonds and the amount or amounts, numbers and other identification of such Bonds, and the date of owning the same shall be proved by the registration books of the Issuer maintained by the Trustee pursuant to Section 2.8 hereof.

           For all purposes of this Indenture and of the proceedings for the enforcement hereof, such person shall be deemed to continue to be the owner of such Bond until the Trustee shall have received notice in writing to the contrary.

          In determining whether the owners of the requisite principal amount of Bonds outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Indenture, Bonds owned by the Company or any affiliate of the Company shall be disregarded and deemed not to be Outstanding under this Indenture, 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. For purposes of this paragraph (a) an “affiliate” means any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company; and for the purposes of this definition (b) “control”, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid 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 affiliate of the Company.

          Notwithstanding the foregoing paragraph, Bonds owned by the Company or any affiliate of the Company shall be deemed to be Outstanding under the Indenture if all the Bonds Outstanding at the time are owned by the Company or an affiliate of the Company; provided, however, that in such event the Company or such affiliate may not consent to any supplement to this Indenture that would affect the validity of the Bonds; and provided further that if a supplement to this Indenture is executed at a time when the Company or any affiliate is the owner of all the Outstanding Bonds, Bond Counsel shall render an opinion that the execution of the supplement to this Indenture does not adversely affect the validity of the Bonds.

      Section 12.2. Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds is intended or shall be construed to give to any person or company other than the parties hereto, the Company, and the owners of the Bonds, any legal or equitable right, remedy or claim under or with respect to this Indenture or any covenants, conditions and provisions therein contained, this Indenture and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and the Company and the owners from time to time of the Bonds as herein provided.

      Section 12.3. Severability. If any provision of this Indenture shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent whatever.

      Section 12.4. Notices. Unless otherwise specifically provided herein, any notice, request, complaint, demand, direction, communication or other paper shall be sufficiently given if in writing and shall be deemed given: (i) three (3) days after the same are deposited in the United States mail and sent by registered or certified mail, return receipt requested, or (ii) when the same are delivered by hand, or (iii) when the same are sent by confirmed facsimile transmission, or (iv) on the next Business Day when the same are sent by overnight delivery service (with the signature of the receiving party required), in each case to the parties at the addresses set forth below or at such other address as a party may designate by written notice to the other parties: if to the Issuer, to Mississippi Business Finance Corporation, Department of Economic and Community Development, Corner of President and High, Sillers Building — 13th Floor, P.O. Box 849, Jackson, Mississippi 39205, or Telecopy Number (601) 359-2832, Attention: Executive Director; if to the Trustee, to The First National Bank of Chicago, One First National Plaza, Chicago, Illinois 60670, or Telecopy No. (312) 407-1708, Attention: Corporate Trust Services Division, Suite 0126; if to the Company, to Ingalls Shipbuilding, Inc., 1000 Litton Access Road, Pascagoula, Mississippi 39567, or Telecopy Number (228) 935-4864, Attention: Division Counsel, with a copy to the Guarantor at the address stated below; and to the Guarantor, to Litton Industries, Inc., 21240 Burbank Boulevard, Woodland Hills, California 91367, or Telecopy Number (818) 598-2025, Attention: General Counsel. A duplicate copy of each notice required to be given hereunder by the Trustee to either the Issuer or the Company shall also be given to the other.

      Section 12.5. Payments Due on Non-Business Days. In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds is

not a Business Day, then payment of principal, premium, if any, or interest need not be made on such date, but may be made on the immediately following Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.

      Section 12.6. Action by Company. Wherever it is herein or in the Agreement provided or permitted for any action to be taken by the Company, such action may be taken by an Authorized Company Representative under the Agreement, unless the context clearly indicates otherwise.

      Section 12.7. Counterparts. This Indenture may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

      Section 12.8. Applicable Provisions of Law. This Indenture shall be governed by and construed in accordance with the laws of the State; provided that the immunities and standard of care of the Trustee in the administration of its trusts hereunder shall be governed by and construed in accordance with the laws of the jurisdiction in which its Principal Office is located.

      Section 12.9. Captions. The captions or headings in this Indenture are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Indenture.

      Section 12.10. Provisions for Payment of Expenses. The Issuer shall not be obligated to execute any documents or take any other action under or pursuant to this Indenture, the Agreement or any other document in connection with the Bonds unless and until provision for the payment of expenses of the Issuer shall have been made. Provisions for expenses shall be deemed to have been made upon arrangements reasonably satisfactory to the Issuer for the provision of expenses being agreed upon by the Issuer and the Company.

      Section 12.11. Limited Liability of Officers, Etc. No recourse shall be had for the payment of the principal of, premium, if any, and interest on the Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future official or employee of the Issuer, or any successor thereof, as such, either directly or indirectly or through the Issuer or any successor, under any rule or law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such official or employee as such is hereby expressly waived and released as a condition of and consideration for the execution of the Indenture and the issuance of any of the Bonds.

      Section 12.12. Additional Notices to Rating Agencies. The Trustee hereby agrees that if at any time (a) there is a change in the Trustee or the co-trustee; (b) any amendments to the Indenture, the Agreement or the Guaranty; or (c) all or any part of the principal of the Bonds is paid; then, in each case, the Trustee shall use its best efforts to give notice promptly as provided in Section 12.4 hereof of any such event to each Rating Agency then maintaining a rating on the Bonds, which notice in the case of an event described in clause (b) above shall include a copy of

any such amendment. The agreement contained in this paragraph is made as a matter of courtesy and accommodation only and the Trustee shall have no liability to any person for any failure to comply therewith.

           In Witness Whereof, the Mississippi Business Finance Corporation and The First National Bank of Chicago, have caused this Indenture of Trust to be executed in their respective names and their respective seals to be hereunto affixed and attested by their duly authorized officers, all as of the day first above written.

	Mississippi Business Finance Corporation
		By
		Executive Director

[Seal]

Attest:

By
		Secretary

	The First National Bank of Chicago, as Trustee
		By
		Its Assistant Vice President

[Seal]

Attest:

By
	Its	Vice President

EXHIBIT 10.8

MISSISSIPPI BUSINESS FINANCE CORPORATION

and

NORTHROP GRUMMAN SHIP SYSTEMS, INC.

LOAN AGREEMENT

Dated as of December 1, 2006

Relating to

$200,000,000
Gulf Opportunity Zone Industrial Development Revenue Bonds
(Northrop Grumman Ship Systems, Inc. Project),
Series 2006

LOAN AGREEMENT

TABLE OF CONTENTS

(This Table of Contents is for convenience of reference
only and is not a part of this Loan Agreement.)

		PAGE
ARTICLE I DEFINITIONS			1
ARTICLE II ACQUISITION AND REHABILITATION OF THE PROJECT; ISSUANCE OF THE BONDS			2
SECTION 2.1. Acquisition and Rehabilitation of the Project			2
SECTION 2.2. Issuance of the Bonds			3
SECTION 2.3. Benefits Under the Act			3
SECTION 2.4. Ad Valorem Tax Exemption			6
ARTICLE III LOAN BY ISSUER; PROVISIONS FOR PAYMENT			6
SECTION 3.1. Loan by Issuer			6
SECTION 3.2. Delivery of Note by Company; Other Amounts Payable			6
SECTION 3.3. Obligation of the Company Unconditional			7
SECTION 3.4. Assignment and Pledge of Payments and Rights Under the Note and the Agreement			7
SECTION 3.5. Closeout of the Project Fund			8
SECTION 3.6. Disposition of the Balance in the Project Fund			8
SECTION 3.7. Company Required to Pay in Event Project Fund Insufficient			8
SECTION 3.8. No Third Party Beneficiary			8
ARTICLE IV SPECIAL COVENANTS			9
SECTION 4.1. Use of Project			9
SECTION 4.2. Indemnity Against Claims			9
SECTION 4.3. The Company to Maintain Its Corporate Existence; Conditions Under Which Exceptions Permitted			9
SECTION 4.4. Approval of Indenture			10
SECTION 4.5. Further Assurances and Corrective Instruments			10
SECTION 4.6. Maintenance of Project by Company			10
SECTION 4.7. Redemption or Purchase of Bonds			10
SECTION 4.8. Non-Arbitrage Covenant			11
SECTION 4.9. Company’s Option to Determine Interest Rate Mode: Appointment of Remarketing Agent			11
SECTION 4.10. Specific Tax Covenants			11
ARTICLE V EVENTS OF DEFAULT AND REMEDIES			13
SECTION 5.1. Events of Default			13

		PAGE
SECTION 5.2. Remedies on Default			14
SECTION 5.3. Agreement to Pay Attorneys’ Fees and Expenses			15
SECTION 5.4. No Additional Waiver Implied by One Waiver			15
ARTICLE VI MISCELLANEOUS			15
SECTION 6.1. Term of This Agreement			15
SECTION 6.2. Notices			16
SECTION 6.3. Binding Effect			16
SECTION 6.4. Severability			16
SECTION 6.5. Amendments			17
SECTION 6.6. Execution in Counterparts			17
SECTION 6.7. Applicable Law			17
SECTION 6.8. Captions			17
SECTION 6.9. Other Financing			17
SECTION 6.10. No Charge Against Issuer Credit			17

     LOAN AGREEMENT dated as of December 1, 2006 between the MISSISSIPPI BUSINESS FINANCE CORPORATION, a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Mississippi (the “Issuer”), and NORTHROP GRUMMAN SHIP SYSTEMS, INC., a corporation organized and existing under the laws of the State of Delaware (the “Company”), evidencing the agreement of the parties hereto.

     In consideration of the respective representations and agreements hereinafter contained, the parties hereto agree as follows (provided that in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall not be a general debt, liability or obligation of the Issuer, or of the State of Mississippi or any political subdivision thereof but shall be payable solely out of the revenues and proceeds derived from this Agreement, the Note (as hereinafter defined) and the Guaranty (as hereinafter defined) and the sale of the Bonds referred to herein):

ARTICLE I

DEFINITIONS

     “Agreement” means this Loan Agreement and any amendments and supplements hereto.

     “Completion Date” means the date identified in the certificate provided by the Company to the Trustee pursuant to Section 3.5 of this Agreement.

     “Eligible Equipment” includes non-movable fixtures and equipment to the extent the same is assembled to construct, reconstruct or renovate the Company’s industrial plants located in the Gulf Opportunity Zone for the State and includes the equipment described in more detail in Exhibit A to the Non-Arbitrage Certificate of the Issuer and other items of equipment that are permitted to be financed under the Gulf Opportunity Zone Act of 2005 pursuant to any private letter ruling or other official governmental action recognized as binding upon the Internal Revenue Service and the Company.

     “Event of Default” means any of the occurrences enumerated in Section 5.1 of this Agreement.

     “Guarantor” means Northrop Grumman Corporation, a Delaware corporation.

     “Guaranty” has the meaning set forth in the Indenture.

     “Gulf Opportunity Zone” means that geographic area of Alabama, Mississippi and Louisiana so defined in Section 1400M(1) of the Code.

     “Gulf Opportunity Zone Bond” means any bond described in Section 1400N(a)(2) of the Code.

     “Indenture” means the Trust Indenture, dated as of December 1, 2006, relating to the Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds (Northrop Grumman Ship Systems, Inc. Project), Series 2006, between the Issuer and The Bank of New York Trust Company, N.A., as Trustee, pursuant to which the Bonds are authorized to be issued, and including any indenture supplemental thereto.

     “Loan” means the loan to be made by the Issuer to the Company of the proceeds (which shall be deemed to include the underwriting discounts, if any, and original issue discount, if any) of the sale of the Bonds, exclusive of any accrued interest paid by the initial purchasers of the Bonds upon the delivery thereof.

     “Note” means the non-negotiable promissory note of the Company issued pursuant to Section 3.2 hereof, in the form set forth in Exhibit A hereto.

     “Official Action” shall mean the action taken by the Issuer in adopting the inducement resolution of March 14, 2006 in which the Issuer agreed to finance the cost of acquiring, constructing, installing and equipping the Project.

     “Plans” means the capital improvement plan of the Company for the Project. The Company may supplement, amend and change the Plans without the approval of the Issuer provided that (i) no change shall be made to the Plans if such change includes expenditures for costs ineligible for financing with Gulf Opportunity Zone Bonds; or (ii) such change would render materially incorrect or incomplete the description of the components of the Project unless an opinion of Tax Counsel is provided to the Trustee that such alteration or amendment does not adversely affect the exclusion of interest on the Bonds from gross income for the purposes of federal income taxation.

     “Project” means the project of the Company as described in Exhibit B hereto.

     Terms not defined herein shall have the meaning assigned to them in the Indenture and any exhibit thereto.

ARTICLE II

ACQUISITION AND REHABILITATION OF THE PROJECT;
ISSUANCE OF THE BONDS

     SECTION 2.1. Acquisition and Rehabilitation of the Project . The Company represents that it will cause the acquisition, construction, reconstruction and renovation of the Project to be completed substantially in accordance with the Plans.

     SECTION 2.2. Issuance of the Bonds . In order to provide funds for the purpose set forth in Section 3.1 hereof, the Issuer agrees that it will issue and deliver the Bonds to the purchasers thereof at a price of 100% of the aggregate principal amount of the Bonds and apply and deposit the proceeds thereof in accordance with the terms of the Indenture and Section 3.1 hereof. The Indenture shall be satisfactory in form and substance to the Company and shall provide the manner in which, and the purposes for which, proceeds of Bonds may be used and invested.

     SECTION 2.3. Benefits Under the Act .

	(a)		The parties hereby acknowledge that the Company has been induced to proceed with the acquisition, construction and rehabilitation of the Project in part by the benefits conferred by the Act. The Issuer agrees that the Company shall be permitted to take advantage of all of the benefits provided by the Act to the fullest extent therein set forth subject to the rules and regulations of the Issuer. The Issuer agrees that it will not take any action to limit, curtail or otherwise make unavailable to the Company any of the benefits available under the Act.
	(b)		With respect to benefits conferred by the Act referenced in (a) above, the following shall apply:

	(1)		the maximum benefits accruing in any calendar year with respect to the income tax credit (other than any credits which may be carried forward to future years pursuant to the Act) shall not exceed the payments of the principal of, premium, if any, and interest payments on the Bonds during such year, and the fees and expenses of the Trustee and any other fees and expenses referenced herein.
	(2)		any benefit claimed or received by the Company for any Cost of the Project shall not be used as a deduction under the laws of the State of Mississippi in order to determine the taxable income of Company.
	(3)		the Trustee shall provide the Issuer, not later than ninety (90) days after the end of each calendar year, with a certificate setting forth the amount of all payments made to the Trustee with respect to the Bonds whether for principal, premium, interest or the fees and expenses of the Trustee.
	(4)		the benefits accruing to the Company under this Section 2.3 shall cease in the event:

	(A)		an Event of Default should occur under this Agreement or the Indenture; or
	(B)		the Company should fail to operate the Project for a period of nine (9) consecutive months following the initial start up of the Project except for force majeure , strikes, lockouts, damage, destruction, act of God or in general, reasons beyond the Company’s reasonable control excepting, however, general economic conditions.

	(5)		the Company agrees to comply with the terms and provisions of the Act in all respects with respect to the benefits available under the Act.
	(6)		the benefits or credits available under the Act shall cease to accrue on the date the principal and interest on the Bonds are paid in full whether at maturity or by way of redemption.
	(7)		the benefits accruing to the Company under this Section 2.3 shall be limited to the annual debt service payments on the Bonds for qualified Cost of the Project and shall be reduced by the amount of surplus funds remaining after completion which shall be used to redeem Bonds as provided for in Section 3.6 of this Agreement.
	(8)		the tax credits allowed as a benefit under the Act shall be further limited so that the credits allowed in any year shall not exceed eighty percent (80%) of the amount of taxes due to the State prior to the application of the credits (as directed in Section 27-7-22.3 of the Mississippi Code of 1972, as amended). To the extent that the payments of the principal of, premium, if any, and interest payments on the Bonds during any year and the fees and expenses of the Trustee and any other fees and expenses referenced herein exceed the amount of the tax credit authorized by Section 27-7-22.3, in any taxable year, such excess payment may be recouped from excess credits in succeeding years not to exceed three (3) years following the date upon which the credit was earned.
	(9)		the Company will report to the Mississippi Employment Security Commission (“MESC”) its employees as required by law, and shall annually report to the Issuer the average number of employees reported for each year to the MESC. This shall be done for each year after the year in which the Project was induced for financing by the Issuer.

(10)

for purposes of determining the benefits to which the Company is eligible under the Act, the following definitions shall apply:

(A) (i) “Base Employment” (“BE”) means the average number of employees of the Company in the State during the preceding twelve (12) month period ending February 28, 2006, as reported by the Company to the Mississippi Employment Security Commission.

          (ii) “Base Investment” (“BI”) means the present value of the capital assets owned or leased by the Company within the State as determined by the Tax Assessor of each County in which the Company owns or leases capital assets related to facilities, or corporate or regional offices.

          (iii) “Future Employment” (“FE”) means the average number of employees of the Company in the State each year after February 28, 2006, which may be an estimate for the first twelve (12) months, and as reported by the Company to the Mississippi Employment Security Commission over each twelve (12) month period thereafter.

          (iv) “Future Investment” (“FI”) means the sum of (a) the Base Investment; (b) the Costs of the Project paid with proceeds of the Bonds; and (c) funds of the Company used to pay Costs of the Project or related improvements.

(B)

The Company represents and warrants that as of the date of this Agreement:

          (i) the Base Employment is 11,540 employees and the Base Investment is $382,517,732.

          (ii) the Company reasonably anticipates that the Future Employment for the first twelve (12) months after February 28, 2006 will be 11,038 employees, and the Future Investment will be approximately $889,463,932 by December 31, 2007, and $1,018,633,932 by December 31, 2008.

(C)

The percentage of the Company’s total state income tax liability in which the Company shall be entitled to an income tax credit provided by the Act (subject to further limitation as set forth in Section 2.2(b)(8) above) shall be determined annually as follows:

     (i) (FE - BE) / FE = Employment Valuation Percentage (“EVP”)

     (ii) (FI - BI) / FI = Investment Valuation Percentage (“IVP”)

     (iii) [(EVP x 2) + IVP] / 3 = Percentage of income tax liabilities of the Company to which the Company is entitled to an income tax credit.

(c)

The Issuer makes no warranty or guaranty concerning the availability or application of the benefits granted or earned by the Company under this Section 2.3 or the Act.

     SECTION 2.4. Ad Valorem Tax Exemption . The Company hereby acknowledges and agrees that the Company shall only be entitled to an ad valorem tax exemption from city or county ad valorem taxes regarding the Project upon making proper application to and obtaining the approval of the respective Mississippi city or county in which the Project is located. Any such ad valorem tax exemption may be granted for a term of up to ten (10) years with the approval of each respective Mississippi city or county in which the Project is located, and in accordance with additional requirements under State law.

ARTICLE III

LOAN BY ISSUER; PROVISIONS FOR PAYMENT

     SECTION 3.1. Loan by Issuer . The Issuer hereby agrees to make the Loan to the Company in order to pay the Cost of the Project or to reimburse the Company for any Cost of the Project paid or incurred by the Company before or after the execution and delivery of this Agreement and the issuance and delivery of the Bonds but not paid or incurred before January 13, 2006, being the sixtieth day prior to Official Action (or, in the event that the IRS issues a ruling to the effect that reimbursement of costs incurred prior to that date will not affect the taxability of the bonds, such earlier date). Any such payment shall be made by the Issuer pursuant to the Indenture upon receipt by the Trustee of a requisition certificate substantially in the form attached as Exhibit C to the Indenture. Repayment of the Loan will be guaranteed by the Guarantor pursuant to the Guaranty.

     SECTION 3.2. Delivery of Note by Company; Other Amounts Payable . In order to evidence the Loan and the obligation of the Company to repay the same, the Company shall execute and deliver the Note in a principal amount equal to the aggregate principal amount of the Bonds and providing for payments which correspond in time and amount with payments due on the Bonds. The Note shall be dated the date of the initial authentication of, and mature on the same maturity date as, the Bonds. If (i) on the date any payments on the Bonds are due, there are

any available moneys on deposit with the Trustee which are not being held for the payment of Bonds due and payable but which have not been presented for payment, or (ii) on any date on which Bonds are required to be purchased pursuant to the Bonds or Article III of the Indenture, there are available moneys on deposit with the Trustee held for the payment of the purchase price which are not being held for the payment of Bonds which have not been presented for payment, then, in each case, such moneys shall be credited against the payment then due under the Note, first in respect of interest and then, to the extent of remaining moneys, in respect of principal.

     The Company will also pay: (i) the fees, charges and reasonable expenses of the Trustee and any paying agents under the Indenture, such fees, charges and reasonable expenses to be paid directly to the Trustee or paying agents for their respective accounts as and when such fees, charges and reasonable expenses become due and payable, and (ii) any expenses in connection with any redemption of the Bonds.

     SECTION 3.3. Obligation of the Company Unconditional . The obligation of the Company to make payments as provided in the Note and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional notwithstanding any change in the tax or other laws of the United States of America or of the State of Mississippi or any political subdivision of either thereof or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement. Nothing contained in this Section 3.3 shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained; and, in the event the Issuer should fail to perform any such agreement on its part, the Company may institute such action against the Issuer as the Company may deem necessary to compel performance so long as such action shall not violate the agreements on the part of the Company contained in the preceding sentence, but in no event shall the Company be entitled to any diminution of the amounts payable under the Note and as provided in Section 3.2 hereof.

     SECTION 3.4. Assignment and Pledge of Payments and Rights Under the Note and the Agreement . The Issuer shall assign to the Trustee as security under the Indenture all rights, title and interests of the Issuer in and to (i) the Note and all payments thereunder and (ii) this Agreement and all moneys receivable hereunder (except for payments under Sections 4.2 and 5.3 hereof or the second paragraph of Section 3.2 hereof). The Company assents to such assignment and hereby agrees that, as to the Trustee, its obligations to make such payments shall be absolute and shall not be subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach by the Issuer or the Trustee of any obligation to the Company, whether hereunder or otherwise, or out of any indebtedness or liability at any time owing to the Company by the Issuer or the Trustee.

     SECTION 3.5. Closeout of the Project Fund . The Completion Date for the Project shall be promptly established and evidenced to the Trustee and shall be the date on which the Company delivers to the Trustee a certificate stating that, except for the amounts retained by the Trustee at the Company’s written direction for any Cost of the Project not then due and payable, the Project has been completed substantially in accordance with the Plans, and all costs and expenses incurred in connection therewith have been paid. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties that exist at the date of such certificate or that may subsequently come into being.

     SECTION 3.6. Disposition of the Balance in the Project Fund . Pursuant to the Indenture, as soon as practicable after, and in any event within sixty (60) days from, the Trustee’s receipt of the certificate regarding the Completion Date described in Section 3.5 hereof, any amounts remaining in the Project Fund, including any unliquidated investments made with money theretofore deposited in the Project Fund, except for amounts to be retained in the Project Fund for any Cost of the Project not then due and payable, shall be transferred by the Trustee to the Bond Fund and shall be applied to the redemption of the Bonds in accordance with the terms of the Indenture.

     SECTION 3.7. Company Required to Pay in Event Project Fund Insufficient . In the event the moneys in the Project Fund should not be sufficient to pay the total Cost of the Project, the Company agrees to complete the Project and to pay that portion of such cost in excess of the moneys available therefore in the Project Fund, provided that no obligation shall exist under this covenant in the event that the Bonds are fully repaid. THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, THAT THE MONEYS PAID INTO THE PROJECT FUND AND AVAILABLE FOR PAYMENT OF THE COST OF THE PROJECT WILL BE SUFFICIENT TO PAY THE TOTAL COST OF THE PROJECT. The Company agrees that if, after exhaustion of the moneys in the Project Fund, the Company should pay any portion of the total Cost of Project pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefore from the Issuer, the Trustee, or any Bondholder and it shall not be entitled to any abatement or diminution of the payments required to be made by the Company pursuant to the Note or Section 3.1 hereof.

     SECTION 3.8. No Third Party Beneficiary . It is specifically agreed between the parties executing this Agreement that it is not intended by any of the provisions of any part of this Agreement to establish in favor of the public or any member thereof, other than as may be expressly provided herein or as contemplated in the Indenture, the rights of a third party beneficiary hereunder, or to authorize anyone not a party to this Agreement to maintain a suit for personal injuries or property damage pursuant to the terms or provisions of this Agreement. The duties,

obligations, and responsibilities of the parties to this Agreement with respect to third parties shall remain as imposed by law.

ARTICLE IV

SPECIAL COVENANTS

     SECTION 4.1. Use of Project . The Issuer hereby acknowledges that it shall have no rights to the use or possession of the Project. The Issuer hereby further acknowledges that the Project will not constitute any part of the security for the Bonds.

     SECTION 4.2. Indemnity Against Claims . The Company will pay and discharge and will indemnify and hold harmless the Issuer from (a) any lien or charge upon payments by the Company to the Issuer under the Note or hereunder, (b) any taxes, assessments, impositions and other charges upon payments by the Company to the Issuer under the Note or hereunder and (c) any and all liability, damages, costs and expenses arising out of or resulting from the transactions contemplated by this Agreement and the Indenture, including the reasonable fees and expenses of counsel. If any such lien or charge is sought to be imposed upon payments, or any such taxes, assessments, impositions or other charges are sought to be imposed, or any such liability, damages, costs and expenses are sought to be imposed, the Issuer will give prompt notice to the Company, and the Company shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole discretion.

     SECTION 4.3. The Company to Maintain Its Corporate Existence; Conditions Under Which Exceptions Permitted . The Company agrees that during the term of this Agreement it will maintain its corporate existence and its qualification to do business in Mississippi, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it; provided, that the Company may, without violating the agreements contained in this Section 4.3, consolidate with or merge into another domestic corporation (i.e., a corporation incorporated and existing under the laws of one of the states of the United States of America or under the laws of the United States of America) or permit one or more other corporations to consolidate with or merge into it, or sell or otherwise transfer to another domestic corporation all or substantially all of its assets as an entirety and thereafter dissolve, provided that, in the event the Company is not the surviving, resulting or transferee corporation, as the case may be, the surviving, resulting or transferee corporation assumes, accepts and agrees in writing to pay and perform all of the obligations of the Company herein and under the Note and is a Mississippi corporation or is qualified to do business in Mississippi as a foreign corporation and that such consolidation or merger does not

result in the loss of the exclusion from gross income for federal income tax purposes of interest on the outstanding Bonds.

     SECTION 4.4. Approval of Indenture . The Company acknowledges that the Issuer and Trustee have entered into the Indenture at the request of the Company. The Company approves the terms of the Indenture and agrees to perform any covenants and/or obligations contained therein required to be performed by the Company.

     SECTION 4.5. Further Assurances and Corrective Instruments . The Issuer and the Company agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project.

     SECTION 4.6. Maintenance of Project by Company . The Company agrees for so long as any of the Bonds remain outstanding, it will pay all costs of operating, maintaining and repairing the Project; provided, however, that the Company shall not be under any obligation to renew, repair or replace any inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary portion of the Project.

     SECTION 4.7. Redemption or Purchase of Bonds . The Issuer shall take all steps then necessary under the applicable provisions of the Indenture, at no expense to the Issuer, for the redemption or purchase (other than a purchase pursuant to tenders as provided in the form of Bonds and as provided in Section 3.07 of the Indenture) of Bonds upon receipt, not less than ten days prior to the day on which the Trustee is required to give notice (if any) thereof pursuant to the Indenture, by the Issuer and the Trustee from the Company of a written notice specifying:

	(a)		the principal amount of Bonds to be redeemed or purchased;
	(b)		the date of such redemption or purchase; and
	(c)		in the case of a redemption of Bonds, directions to mail a notice of redemption.

     In the case of a purchase of Bonds, the written notice to the Trustee shall, if available moneys on deposit with the Trustee are insufficient to purchase the principal amount of Bonds specified in (a) above, be accompanied by a deposit with the Trustee of cash or Government Obligations sufficient, together with other available moneys on deposit with the Trustee, to make the directed purchase of Bonds. The Company may purchase Bonds from time to time and deliver them to the Trustee for cancellation pursuant to Section 2.08 of the Indenture.

     SECTION 4.8. Non-Arbitrage Covenant . The Company and the Issuer each covenants that it shall take no action, nor shall the Company direct the taking of any action or the making of any investment or use of the proceeds of the Bonds or any other moneys, which would cause the Bonds to be treated as “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the proposed, temporary or final regulations thereunder as such may be applicable or proposed to be applicable to the Bonds at the time of such action, investment or use.

     Without limiting the generality of the foregoing, the Company covenants and agrees to comply with the requirements of Section 148(f) of the Internal Revenue Code of 1986, as amended, and any temporary or final regulations thereunder as may be applicable to the Bonds or the proceeds derived from the sale of the Bonds or any other moneys.

     SECTION 4.9. Company’s Option to Determine Interest Rate Mode: Appointment of Remarketing Agent . The Issuer and the Company agree that the Company shall have the option to change the interest rate determination method for the Bonds in the manner provided in the Indenture. The Company agrees, in connection with any change in the interest rate determination method, to provide for the appointment of a Remarketing Agent as provided in Section 10.15 of the Indenture if no Remarketing Agent has been appointed and is serving as such under the Indenture and for the appointment of an Auction Agent and one or more Broker-Dealers, as appropriate.

     SECTION 4.10. Specific Tax Covenants . The Company hereby agrees to comply with the following tax covenants and such other covenants as may be necessary to qualify the interest on the Bonds for exclusion from gross income for federal income tax purposes:

     (a) The Project shall constitute land or property of a character subject to the allowance for depreciation provided by the Code, and at least 95 percent of the Net Proceeds of the Bonds (the “Net Proceeds” being equal to the sale proceeds of the Bonds increased by investment proceeds with respect thereto) will be used to acquire land and nonresidential real property including fixed improvements associated with such property and subject to such allowance.

     (b) The proceeds of the Bonds shall be used to acquire, construct re-construct or rehabilitate facilities located in the Gulf Opportunity Zone in Mississippi and no portion of such proceeds shall be used to acquire “movable equipment or fixtures” within the meaning of the Joint Committee on Taxation’s Technical Explanation of the Revenue Provisions of H.R. 4440, the “Gulf Opportunity Zone Act of 2005 ” other than those that are assembled to construct an industrial plant.

     (c) No proceeds of the Bonds (including investment proceeds) other than an amount approximately equal to $2,100,000 will be used directly or indirectly to pay any issuance costs. Such amount does not exceed 2 percent of the proceeds of the Bonds (equal for this purpose to the stated principal amount).

     (d) No portion of the Net Proceeds of the Bonds will be used to provide any private or commercial golf course, country club, massage parlor, tennis club, skating facility (including roller skating, skateboard and ice skating), racquet sports facility (including any handball or racquetball court), hot tub facility, suntan facility, racetrack, airplane, skybox or other private luxury box, health club facility, facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for off premises consumption.

     (e) Less than 25 percent of the Net Proceeds of the Bonds will be used to acquire land. No portion of the proceeds of the Bonds will be used to acquire land (or an interest therein) to be used for farming purposes.

     (f) No portion of the Net Proceeds of the Bonds will be used for the acquisition of any property (or an interest therein) unless (i) the first use of such property is pursuant to such acquisition or (ii) if the first use of such property is not pursuant to such acquisition, then the rehabilitation expenditures of the Company with respect to such property equals or exceeds (A) 50% of the portion of the cost of acquiring such property financed with the Net Proceeds of the Bonds, if such property is a building or (B) 100% of the portion of the cost of acquiring such property financed with the Net Proceeds of the Bonds, if such property is a structure other than a building. In the case of an integrated operation contained in a building before its acquisition, such term includes rehabilitating existing equipment in such building or replacing it with equipment having substantially the same function. The “first use” of any property for purposes of this Section 4.10(f) shall have the meaning assigned to such term under Section 147(d) of the Code, any Regulations promulgated thereunder and any revenue rulings, private letter rulings or other written determinations or announcements issued by the Internal Revenue Service from time to time.

     (g) The payment of principal or interest with respect to the Bonds is not guaranteed in whole or in part by the United States or any agency or instrumentality thereof. The Bonds will not constitute an issue 5 percent or more of the proceeds of which is to be used in making loans the payment of principal or interest with respect to which is to be guaranteed in whole or in part by the United States or any agency or instrumentality thereof, or invested directly or indirectly in federally insured deposits or accounts, other than those proceeds invested during applicable temporary periods or as

investments in a bona fide debt service fund or investments in permissible reserves or in obligations issued by the United States Treasury. The payment of principal of or interest on the Bonds is not otherwise indirectly guaranteed in whole or in part by the United States or any agency or instrumentality thereof within the meaning of Section 149(b) of the Code.

     (h) The average reasonably expected economic life of the facilities of the Project being financed with the Net Proceeds of the Bonds, excluding land, as of the Bond issuance date, is 18.34 years.

     (i) The weighted average maturity of the Bonds is 21.94 years, which does not exceed 120 percent of the average reasonably expected economic life of the facilities of the Project being financed with the Net Proceeds of the Bonds.

     (j) Except for preliminary expenditures for architectural engineering, surveying, soil testing, bond issuance, and similar costs (not including costs of land acquisition, site preparation, and similar costs incident to commencement of project) that were incurred prior to commencement of acquisition, construction or rehabilitation of the facilities comprising the Project, and did not exceed in the aggregate 20 percent of the issue price of the Bonds, no proceeds of the Bonds will be allocated to the reimbursement of an expenditure for costs of the Project paid prior to January 13, 2006, which is 60 days prior to March 14, 2006, the date on which the Issuer adopted a resolution declaring official intent to finance a portion of the costs thereof with the Bonds.

ARTICLE V

EVENTS OF DEFAULT AND REMEDIES

     SECTION 5.1. Events of Default . Each of the following shall be an “Event of Default” under this Agreement:

     (a) Failure by the Company to pay when due the amounts required to be paid pursuant to the Bonds, or the failure by the Company to pay within 30 days of the date due any other amounts required to be paid pursuant to this Agreement.

     (b) Failure by the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, other than as referred to in subsection (a) of this Section 5.1, for a period of 90 days after written notice, specifying such failure and requesting that it be remedied, is given to the Company by the Issuer or the Trustee, unless the Issuer and the Trustee shall agree in writing to an extension of such period prior to its expiration; provided, however, if the failure stated in the notice

cannot be corrected within the applicable period, the Issuer and the Trustee will not unreasonably withhold their consent to an extension of such period if corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected.

     (c) The dissolution or liquidation of the Company, except as permitted by Section 4.3 hereof, or the commencement by the Company of any case or proceeding seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it as bankrupt or insolvent or seeking reorganization, liquidation, dissolution, winding-up, arrangement, composition, readjustment of its debts or any other relief under any bankruptcy, insolvency, reorganization or other similar law of the United States or any state, or adjudication of the Company as bankrupt, or an assignment by the Company for the benefit of its creditors, or the entry by the Company into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Company in any proceeding for its reorganization instituted under the provisions of Title 11 of the United States Code, as amended, or under any similar statutory provision which may hereafter be enacted.

     The foregoing provisions of Section 5.1(b) are subject to the limitation that, if by reason of force majeure the Company is unable in whole or in part to carry out its agreements herein contained other than those set forth in Sections 4.3 and 4.8 hereof, an Event of Default shall not be deemed to have occurred during the continuance of such inability. The term “ force majeure ” as used herein shall mean the following: acts of God; strikes; lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State of Mississippi or any of their departments, agencies or officials or of any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fire; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraints of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission lines, pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Company. The Company agrees, however, to remedy to the extent practicable with all reasonable dispatch the effects of any force majeure preventing the Company from carrying out its agreements; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Company, and the Company shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Company unfavorable to the Company.

     SECTION 5.2. Remedies on Default . Whenever any Event of Default shall have occurred and be continuing, the Issuer may, in addition to any other remedy

now or hereafter existing at law, in equity or by statute, take either or both of the following remedial steps:

     (a) By written notice to the Company, the Issuer may declare all amounts payable pursuant to the Note to be immediately due and payable, whereupon the same shall become immediately due and payable; and

     (b) The Issuer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts referred to in (a) above then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Company under this Agreement.

     Any amounts collected pursuant to action taken under this Section 5.2 shall be deposited with the Trustee and applied in accordance with the provisions of the Indenture or, if the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indenture) and the fees and expenses of the Trustee and the paying agents and all other amounts required to be paid under the Indenture shall have been paid, returned to the Company.

     SECTION 5.3. Agreement to Pay Attorneys’ Fees and Expenses . In the event the Company should breach any of the provisions of the Note or this Agreement and the Issuer should employ attorneys or incur other expenses for the collection of amounts payable hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Company herein contained, the Company agrees that it will on demand therefor pay to the Issuer the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Issuer.

     SECTION 5.4. No Additional Waiver Implied by One Waiver . In the event any agreement contained in the Note or in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

ARTICLE VI

MISCELLANEOUS

     SECTION 6.1. Term of This Agreement . This Agreement shall remain in full force and effect from the date hereof until such time as all of the outstanding Bonds shall have been fully paid or provision made therefor in accordance with the provisions of the Indenture, whichever shall first occur, and the fees and expenses of the Trustee and any paying agents and all other amounts payable by the Company under this Agreement and the Note shall have been paid.

A duplicate copy of each notice, certificate or other communication given hereunder by either the Issuer or the Company to the other shall also be given to the Trustee and Guarantor. The Issuer, the Company, the Guarantor and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

     SECTION 6.3. Binding Effect . This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Company and their respective successors and assigns, subject, however, to the limitations contained in Section 4.3 hereof.

     SECTION 6.4. Severability . In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

     SECTION 6.5. Amendments . This Agreement may not be effectively terminated except in accordance with the provisions hereof and may not be effectively amended except by a written agreement in accordance with Article XII and Article XIII of the Indenture and signed by the parties hereto.

     SECTION 6.6. Execution in Counterparts . This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

     SECTION 6.7. Applicable Law . This Agreement and the Note shall be governed by and construed in accordance with the laws of the State of Mississippi.

     SECTION 6.8. Captions . The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.

     SECTION 6.9. Other Financing . Notwithstanding anything in this Agreement to the contrary, the Issuer and the Company may hereafter enter into agreements to provide for the financing or refinancing of costs of the Project or any portion thereof.

     SECTION 6.10. No Charge Against Issuer Credit . No provision hereof shall be construed to impose a charge against the general credit of the Issuer or any personal or pecuniary liability upon any director, officer, employee or agent of the Issuer.

EXHIBIT A

EXHIBIT “A”

The holder hereof has agreed not to transfer this Note except to a successor Trustee under the Trust Indenture dated as of December 1, 2006 of the Mississippi Business Finance Corporation relating to the Bonds (hereinafter referred to).

NORTHROP GRUMMAN SHIP SYSTEMS, INC.
NON NEGOTIABLE PROMISSORY NOTE

$200,000,000		December 21, 2006

     NORTHROP GRUMMAN SHIP SYSTEMS, INC. (the “Company”), a corporation organized and existing under the laws of the State of Delaware, acknowledges itself indebted and for value received hereby promises to pay to the Mississippi Business Finance Corporation (the “Issuer”), and its successors and permitted assigns, the principal sum of TWO HUNDRED MILLION DOLLARS ($200,000,000) together with interest on the unpaid principal balance thereof from the date hereof until the Company’s obligations with respect to the payment of such sum shall be discharged at the rate or rates borne by the Bonds referred to below. As additional interest hereon there shall be payable, and the Company promises to pay when due, amounts which shall equal the premium, if any, due on such Bonds in connection with the redemption thereof. The Company further promises to pay the purchase price of such Bonds as herein below provided.

     This Note is issued to evidence the Loan (as defined in the Agreement hereinafter referred to) of the Issuer to the Company and the obligation of the Company to repay the same and shall be governed by and be payable in accordance with the terms and conditions of a loan agreement (the “Agreement”) between the Issuer and the Company dated as of December 1, 2006 pursuant to which the Issuer has loaned to the Company the proceeds of the sale of the Issuer’s $200,000,000 Gulf Opportunity Zone Industrial Development Revenue Bonds (Northrop Grumman Ship Systems, Inc. Project), Series 2006 (the “Bonds”). This Note (together with the Agreement) has been assigned to The Bank of New York Trust Company, N.A. (the “Trustee”), acting pursuant to a trust indenture dated as of December 1, 2006 (the “Indenture”) between the Issuer and the Trustee, and may not be assigned by the Trustee except to a successor Trustee pursuant to the terms of the Indenture. Such assignment is made as security for the Bonds. The Bonds are dated and bear interest in accordance with the provisions of the Indenture, and mature on December 1, 2028. The Bonds are subject to redemption prior to maturity as provided therein.

     Subject to the provisions of the Agreement, payments hereon are to be made by paying to the Trustee, as assignee of the Issuer, in funds which will be immediately available on the day payment is due, amounts which, and at or before times which, shall correspond to the payments with respect to the principal of and premium, if any, and interest on the Bonds whenever and in whatever manner the

same shall become due, whether at stated maturity, upon redemption or declaration or otherwise, and the purchase price of Bonds required to be purchased under the Indenture. If (i) on the date any payments on the Bonds are due there are any available moneys on deposit with the Trustee which are not being held for the payment of Bonds due and payable but which have not been presented for payment, or (ii) on any date on which Bonds are required to be purchased pursuant to the Bonds or Article III of the Indenture, there are available moneys on deposit with the Trustee held for the payment of the purchase price which are not being held for the payment of Bonds which have not been presented for payment, then, in each case, such moneys shall be credited against the payment then due hereunder, first in respect of interest and then, to the extent of remaining moneys, in respect of principal. Upon the occurrence of an Event of Default, as defined in the Agreement, the principal of and interest on this Note may be declared immediately due and payable as provided in the Agreement.

     Neither the officers of the Company nor any persons executing this Note shall be liable personally or shall be subject to any personal liability or accountability by reason of the issuance hereof.

     IN WITNESS WHEREOF, the Company has caused this Note to be executed in its corporate name and on its behalf by its duly authorized officers as of the date first above written.

ASSIGNMENT

     Pay, without recourse, to the order of The Bank of New York Trust Company, N.A., as assignee of the Mississippi Business Finance Corporation, under the Trust Indenture, dated as of December 1, 2006, between the Mississippi Business Finance Corporation and The Bank of New York Trust Company, N.A., as Trustee, securing the payment of Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds (Northrop Grumman Ship Systems, Inc. Project), Series 2006 in the original principal amount of $200,000,000, said payments to be deposited into the Bond Fund created thereunder.

EXHIBIT B

The construction, reconstruction, repair, replacement and modification of buildings and immovable equipment located at its shipbuilding facilities in Pascagoula and Gulfport Mississippi including:

	1.		Buildings: Maintenance shop, panel shop, metal processing building, shell shop, aluminum shop, multi-purpose warehouse, COSAL warehouse, combined shop, steel fabrication shop, paint storage shop (Gulfport), blast and paint hall, CDI building, Hiller building, Sonar Dome House, containment screen, administration buildings I, II, III, IV, PC buildings 1 and 2, Multipurpose warehouse, cafeteria, LBTF building, blast and paint hall, CSA I and II, panel shop, combined shop, propulsion assembly, maintenance depot, training center, headhouse 2 and 3, medical center, fire/safety, wetdock, bays 1-5 and chiller plant (Gulfport), Krebs, Chem lab, Resource recovery, transportation, sand blasting, blast and paint, security, LHD test team, propulsion, booster pump building, wet dock, FSO, HR building, Hiller building, carpenter shop, miscellaneous building, EDC, fuel depot, guard shack, computer center, welding lab.
	2.		Fixed and immovable equipment housed in the foregoing buildings.
	3.		Fixed and immovable equipment not intended to be housed in any building but permanently associated with the shipyard.
	4.		Other buildings and equipment eligible for financing under the Gulf Opportunity Zone Act of 2005 including such items that are permitted to be financed under the Gulf Opportunity Zone Act of 2005 pursuant to any private letter ruling or other official governmental action recognized as binding upon the Internal Revenue Service and the Company.

EXHIBIT 10.9

MISSISSIPPI BUSINESS FINANCE CORPORATION

to

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

as Trustee

TRUST INDENTURE

Dated as of December 1, 2006

Relating to

$200,000,000

Mississippi Business Finance Corporation
Gulf Opportunity Zone Industrial Development Revenue Bonds
(Northrop Grumman Ship Systems, Inc. Project),
Series 2006

TABLE OF CONTENTS

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

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

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

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

TRUST INDENTURE

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

RECITALS

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

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

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

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

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

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

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

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

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

GRANTING CLAUSE

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

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

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

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

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

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

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

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

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

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

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

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

     “ BMA Index ” means, as of any date, the rate calculated according to the Bond Market Association Municipal Swap Index as of the most recent date for which such index was published or such other weekly, high-grade index composed of weekly, tax-exempt variable rate demand notes produced by Municipal Market Data, Inc. or any successor thereto, or as otherwise designated by the Bond Market Association.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     “ Event of Default ” is defined in Section 9.01.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     c. Bonds deemed paid by Section 7.01.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     “ State ” means the State of Mississippi.

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

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

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

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

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

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

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

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

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

ARTICLE II

THE BONDS

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

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

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

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

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

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

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

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

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

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

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

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

     (ii) Determination of Commercial Paper Rates . The Commercial Paper Rate for each Commercial Paper Period for each Bond shall be the minimum rate necessary (as determined by the Remarketing Agent based on the examination of tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) for the Remarketing Agent to sell such Bond on the date and at the time of such determination at its principal amount (without regard to accrued interest).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE III

REDEMPTION, MANDATORY TENDER AND REMARKETING

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

     Section 3.02. Redemption Dates .

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

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

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

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

     Section 3.04. Redemption Notices .

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

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

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

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

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

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

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

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

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

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

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

     Section 3.07. Mandatory Tender .

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

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

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

     (2) the purchase price;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     (d)  Delivery of Remarketed Bonds .

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

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

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

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

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

ARTICLE IV

APPLICATION OF PROCEEDS AND PAYMENT OF BONDS

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

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

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

     Section 4.02. Payments from the Project Fund .

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

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

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

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

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

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

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

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

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

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

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

     (a) Government Obligations;

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

     (c) Obligations of the Federal Intermediate Credit Bank;

     (d) Obligations of the Federal Bank for Cooperatives;

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

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

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

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

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

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

ARTICLE V

REVENUES AND APPLICATION THEREOF

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

     Section 5.02. The Bond Fund .

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

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

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

ARTICLE VI

BOOK-ENTRY SYSTEM

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VII

COVENANTS

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

     Section 7.02. Performance of Covenants by Issuer . The Issuer covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in any and every Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining hereto. The Issuer covenants that it is duly authorized under the Constitution and laws of the State, including particularly and without limitation the Act, to issue the Bonds authorized hereby and to execute this Indenture, to accept, assign and pledge the Note and the Agreement and the amounts payable under the Note and to pledge the amounts hereby pledged in the manner and to the extent herein set forth; that all action on its part necessary for the issuance of the Bonds and the execution and delivery of this Indenture and the Agreement has been duly and effectively taken; and that the Bonds in the hands of the owners thereof are and will be valid and enforceable obligations of the Issuer according to the terms thereof and hereof.

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

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

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

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

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

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