Application of Bond Fund

(A)Subject to subsection CD) of this Section, all amounts m the Bond Fund shall be used and withdrawn by the Trustee solely for the purpose of

(1)paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity pursuant to this Indenture),

(2)paying the principal of the Serial Bonds when due and payable, and

(3)purchasing or redeeming or paying at maturity the Term Bonds as provided in this Section.

(B)Subject to subsection

(D)of this Section, on each Mandatory Sinking Account Payment date, the Trustee shall apply the Mandatory Sinking Account Payment or Payments required on that date to the redemption (or payment at maturity, as the ease may be) of the applicable Term Bonds upon the notice and in the manner provided in Article IV. At any time prior to giving such COL4/6/2022 CH. 22 GENERAL FISCAL POLICIES AND CONTROLS notice of such redemption, the Trustee, upon the Request of the Government, shall apply moneys in the Bond Fund, in an amount not in excess of such Mandatory Sinking Account Payment, to the purchase of the applicable Term Bonds at public or private sale, as and when and at such prices (including brokerage and other charges) as are specified in such Request, except that the purchase price (excluding accrued interest) shall not exceed the price that would be payable for such Bonds upon redemption by application of such Mandatory Sinking Account Payment.

(C)Subject to the terms and conditions set forth in subsections

(B)and CD) of this Section and in § 4.01(B), Term 1997 Series A Bonds shall be redeemed (or paid at maturity, as the case may be) by application of Mandatory Sinking Account Payments for such Bonds, in the amounts (after giving effect to the credits provided for in this Section) and upon the Principal Payment Dates in the years hereinafter set forth: Mandatory Sinking Account Payments for Bonds Due ____________, 200__ Year Amount Year Amount Mandatory Sinking Account Payments for Bonds Due ____________, 200__ Year Amount Year Amount Upon the redemption of Term 1997 Series A Bonds pursuant to § 4.01(A), the principal amount of such Bonds shall be credited against remaining Mandatory Sinking Account Payments in such manner as may be designated by Request of the Government, provided that Mandatory Sinking Account Payments shall remain as integral multiples of $5,000. If,

(1)during the twelve-month period immediately preceding a Mandatory Sinking Account Payment date the Trustee purchases the applicable Term Bonds with moneys in the Bond Fund, or

(2)during said period and prior to giving said notice of redemption the Government otherwise deposits the applicable Term Bonds with the Trustee (together COL4/6/2022 CH. 22 GENERAL FISCAL POLICIES AND CONTROLS with a Request of the Government to apply such Bonds so deposited to the Mandatory Sinking Account Payment due on said date), the amount of Bonds so purchased or deposited shall be credited the time of such purchase or deposit, to the extent of the full principal amount thereof, to reduce such Mandatory Sinking Account Payment. All Bonds purchased or deposited pursuant to this subsection shall be canceled and delivered by the Trustee to or upon the Order of the Government.