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Interest Rate Provisions Interest on the ARS and IRS shall accrue for e ch Interest Period and shall be payable in arrears on each succeeding Interest Payment Da he Trustee to the persons who are the registered owners of the ARS as of the Reco e. An "Interest Period" begins on and includes an Interest Payment Date and ends o xcludes the next succeeding Interest Payment Date; however, the first Interest • io commences on the date of original delivery of the ARS. An "Interest Payment Dat-. .1 the ARS means January 1, 1995, semi-annually thereafter on each January 1 and July 1 1 at maturity. If any such day is not a Business Day, interest due on such day shall be paid on the next succeeding Business Day without accrual of any additional interest. Interest on the ARS shall be computed on the basis of a 360-day year for the actual number of days elapsed. The interest rate on the ARS shall be 3.08% per annum for the initial Auction Period and the interest rate (the "Applicable ARS Rate") for each subsequent Auction Period shall equal the sum of (A) the rate of interest (the "Auction Rate") determined periodically on the basis of orders placed in an Auction conducted on the Business Day immediately preceding the Interest Period and (B) the Service Charge Rate (as described in the Indenture) in effect, and in such other manner as described in the Indenture. The procedures for conducting an Auction and determining the Auction Rate are set forth in the Auction Agent Agreement, dated as of March 1, 1994, between the Trustee and the Auction Agent. Interest on the IRS shall be computed on the basis of a 360-day years for the number of days elapsed on the basis of twelve 30-day months. The interest rate on this Bond shall be 8.35% per annum for the initial Auction Period and the interest rate (the "Applicable IRS Rate") for each subsequent Auction Period shall equal the result, if any, taken to the nearest one-thousandth (.001) of 1% (without rounding), of (A) the Fixed Rate of 5.75% per annum multiplied by two, minus (b) the Applicable ARS Rate for such Interest Period multiplied by the Applicable Day Count Fraction, all as set forth in the Indenture. For purposes of the Applicable IRS Rate, the Applicable ARS Rate is multiplied by the Applicable Day Count Fraction in order to adjust such rate (which is calculated on the basis of actual days elapsed) to a rate per annum calculated on the basis of the number of days elapsed on the basis of twelve 30-day months. "Auction Period" shall mean the period from and including the Closing Date to, but not including, the first Auction Period Accrual Date and, thereafter, from and including each Auction Period Accrual Date to, but not including, the next succeeding Auction Period Accrual Date; provided, however, that if such date is later than the maturity date of a maturity of ARS, the last day of such Auction Period shall be the maturity date of such ARS. "Auction Period Accrual Date" shall mean September 20, 1994 and every 5th Tuesday thereafter (or such other day that the Market Agent shall establish as an Auction Period Accrual Date); provided, however, that if such day is not a Business Day, the Auction Period Accrual Date shall be the next succeeding Business Day. "Applicable Day Count Fraction" shall mean, with respect to any period the actual number of days in such period divided by the number of days in such period on the basis of twelve 30-day months. LAI-70383.1 4