§ 6. Bonds of the corporation. 1. (i) The corporation shall have power
and is hereby authorized from time to time to issue its bonds in an
aggregate principal amount not exceeding four billion, two hundred
million dollars ($4,200,000,000) plus the amount of any financing costs,
to provide sufficient funds for achieving its corporate purpose,
consisting of the purchase of all or a portion of the state's share
pursuant to section four of this act and the payment or provision for
financing costs. The foregoing limitation shall not apply to bonds
issued to refund bonds. Provided, however, that no bonds may be issued
pursuant to the authority and power granted by this section, except an
issue of bonds in an amount not to exceed seven hundred million dollars
($700,000,000) plus the amount of any applicable financing costs, until
the state comptroller shall determine that legislative passage of the
budget has occurred for the current state fiscal year in accordance with
the provisions of subdivision 3 of section 5 of the legislative law.
Provided, further, no bonds, other than refunding bonds, shall be issued
pursuant to such authority and power on or after July 1, 2004.

(ii) Each issuance of bonds shall be authorized by a resolution of the
corporation, adopted by a majority of the members of the board then in
office without further authorization or approval, provided, however,
that any such resolution authorizing the issuance of bonds may delegate
to an officer of the corporation the power to issue such bonds from time
to time and to fix the details of any such issues of bonds by an
appropriate certificate of such authorized officer. Every issue of the
bonds of the corporation shall be special revenue obligations payable
from and secured by a pledge of pledged tobacco revenues and other
assets, including those proceeds of such bonds deposited in a reserve
fund for the benefit of bondholders, earnings on funds of the
corporation and such other funds and assets as may become available,
upon such terms and conditions as approved by the state representative
and as specified by the corporation in the resolution under which the
bonds are issued or in a related trust indenture.

(iii) The corporation shall have the power and is hereby authorized
from time to time to issue bonds, whenever it deems refunding expedient,
to refund any bonds by the issuance of new bonds, whether the bonds to
be refunded have or have not matured, and to issue bonds partly to
refund bonds then outstanding and partly for any of its other corporate
purposes. The refunding bonds may be exchanged for the bonds to be
refunded or sold and the proceeds applied to the purchase, redemption or
payment of such bonds.

2. The bonds of the corporation of each issue shall be dated, shall
bear interest (which, under the code, in the opinion of transaction
counsel to the corporation, may be includable in or excludable from the
gross income of the owners for federal income tax purposes) at such
fixed or variable rates, payable at or prior to maturity, and shall
mature at such time or times, as may be determined by the corporation
and may be made redeemable before maturity, at the option of the
corporation, at such price or prices and under such terms and conditions
as may be fixed by the corporation. The principal and interest of such
bonds may be made payable in any lawful medium. The resolution or the
certificate of the authorized officer shall determine the form of the
bonds, either registered or book-entry form, and the manner of execution
of the bonds and shall fix the denomination or denominations of the
bonds and the place or places of payment of principal and interest
thereof, which may be at any bank or trust company within or outside the
state. If any officer whose signature or a facsimile thereof appears on
any bonds shall cease to be such officer before the delivery of such
bonds, such signature or facsimile shall nevertheless be valid and
sufficient for all purposes the same as if he had remained in office
until such delivery. The corporation may also provide for temporary
bonds and for the replacement of any bond that shall become mutilated or
shall be destroyed or lost.

3. The corporation with the approval of the state representative may
sell such bonds in such manner, either at a public or private sale and
either on a competitive or negotiated basis. Provided, however, no such
bonds may be sold by the corporation at private sale unless such sale
and the terms thereof have been approved in writing by the comptroller.
The proceeds of such bonds shall be disbursed for the purposes for which
such bonds were issued under such restrictions as the sale agreement and
the resolution authorizing the issuance of such bonds or the related
trust indenture may provide. Such bonds shall be issued upon approval of
both the state representative and the corporation and without any other
approvals, filings, proceedings or the happening of any other conditions
or things other than the approvals, findings, proceedings, conditions,
and things that are specified and required by this act.

4. Any pledge made by the corporation shall be valid and binding at
the time the pledge is made. The assets, property, revenues, reserves or
earnings so pledged shall immediately be subject to the lien of such
pledge without any physical delivery thereof or further act and the lien
of any such pledge shall be valid and binding as against all parties
having claims of any kind in tort, contract or otherwise against the
corporation, irrespective of whether such parties have notice thereof.
Notwithstanding any other provision of law to the contrary, neither the
bond resolution nor any indenture or other instrument by which a pledge
is created or by which the corporation's interest in pledged assets,
property, revenues, reserves or earnings thereon is assigned need be
filed, perfected or recorded in any public records in order to protect
the pledge thereof or perfect the lien thereof as against third parties,
except that a copy thereof shall be filed in the records of the
corporation.

5. Whether or not the bonds of the corporation are of such form and
character as to be negotiable instruments under the terms of the uniform
commercial code, the bonds are hereby made negotiable instruments for
all purposes, subject only to the provisions of the bonds for
registration.

6. At the sole discretion of the corporation, any bonds issued by the
corporation and any ancillary bond facility made under the provisions of
this act may be secured by a resolution or trust indenture by and
between the corporation and the trust indenture trustee, which may be
any trust company or bank having the powers of a trust company, whether
located within or outside the state. Such trust indenture or resolution
providing for the issuance of such bonds may provide for the creation
and maintenance of such reserves as the board shall determine to be
proper and may include covenants setting forth the duties of the
corporation in relation to the bonds, the income of the corporation, the
related sale agreement with respect to the sale of the state's share and
the pledged tobacco revenues and other assets. Such trust indenture or
resolution may contain provisions respecting the custody, safeguarding
and application of all moneys and securities, may contain such
provisions for protecting and enforcing the rights and remedies
(pursuant thereto and to the sale agreement) of the owners of the bonds
and any other benefitted party as may be reasonable and proper and not
in violation of law and may include any or all of the rights, powers and
duties of the trustee appointed by bondholders pursuant to section eight
of this act and limiting or abrogating the right of the bondholders to
appoint a trustee under such section. It shall be lawful for any bank or
trust company incorporated under the laws of the state which may act as
depository of the proceeds of bonds or of any other funds or obligations
received on behalf of the corporation to furnish such indemnifying bonds
or to pledge such securities as may be required by the corporation. Any
such trust indenture or resolution may contain such other provisions as
the corporation may deem reasonable and proper for priorities and
subordination among the owners of the bonds and other beneficiaries. Any
reference in this act to a resolution of the board shall include any
trust indenture authorized thereby.

7. The corporation may enter into, amend or terminate, as it
determines to be necessary or appropriate, any ancillary bond facility
(i) to facilitate the issuance, sale, resale, purchase, repurchase or
payment of bonds, interest rate savings or market diversification or the
making or performance of swap contracts, including without limitation
bond insurance, letters of credit and liquidity facilities, or (ii) to
attempt to manage or hedge risk or achieve a desirable effective
interest rate or cash flow. Such facility shall be made upon the terms
and conditions established by the board, including without limitation
provisions as to security, default, termination, payment, remedy and
consent to service of process.

8. The corporation may enter into, amend or terminate, any ancillary
bond facility that it determines to be necessary or appropriate to place
the obligations or investments of the corporation, as represented by the
bonds or the investment of reserved bond proceeds or other pledged
tobacco revenues or other assets, in whole or in part, on the interest
rate, cash flow or other basis approved by the corporation, which
facility may include without limitation contracts commonly known as
interest rate swap agreements, forward purchase contracts or guaranteed
investment contracts and futures or contracts providing for payments
based on levels of, or changes in, interest rates. These contracts or
arrangements may be entered into by the corporation in connection with,
or incidental to, entering into, or maintaining any (i) agreement which
secures bonds of the corporation or (ii) investment, or contract
providing for investment of reserves or similar facility guaranteeing an
investment rate for a period of years not to exceed the underlying term
of the bonds. The determination by the corporation that an ancillary
bond facility or the amendment or termination thereof is necessary or
appropriate as aforesaid shall be conclusive. Any ancillary bond
facility may contain such payment, security, default, remedy,
termination provisions and payments and other terms and conditions as
determined by the corporation, after giving due consideration to the
creditworthiness of the counterparty or other obligated party, including
any rating by any nationally recognized rating agency, and any other
criteria as may be appropriate.

9. Bonds or any ancillary bond facility may contain a recital that
they are issued or executed, respectively, pursuant to this act, which
recital shall be conclusive evidence of their validity, respectively,
and the regularity of the proceedings relating thereto.

10. The corporation, subject to such agreements with bondholders as
may then exist (including provisions which restrict the power of the
corporation to purchase bonds), or with the providers of any applicable
ancillary bond facility, shall have the power out of any funds available
therefor to purchase bonds of the corporation, which may or may not
thereupon be cancelled, at a price not substantially exceeding:

(i) if the bonds are then redeemable, the redemption price then
applicable, including any accrued interest; and

(ii) if the bonds are not then redeemable, the redemption price and
accrued interest applicable on the first date after such purchase upon
which the bonds become subject to redemption.

11. (i) Notwithstanding the provisions of any general or special law
to the contrary, and subject to the making of annual appropriations
therefor by the state, in order to assist in the undertaking and
financing by the corporation under this act, the state representative is
authorized to and shall enter into one or more contingency contracts
with the corporation upon such terms as the corporation and the state
representative shall agree, so as to provide annually to the corporation
the amount, if any, as necessary to meet the debt service requirements
on one or more series of bonds, including refunding bonds, in any year
if the receipts from pledged tobacco revenues or from an ancillary bond
facility, if any, are inadequate and after application of all collateral
pledged therefor, including any debt service and debt service reserve
fund. Any contingency contract shall terminate when there are no bonds
benefited by the contract outstanding in accordance with the trust
indenture under which such bonds are issued. The contract may provide
for (A) the corporation to request annually, not later than sixty days
prior to the commencement of the state's next succeeding fiscal year,
from the state the amount, as shall be certified by an authorized
officer of the corporation to the director of the budget, to be provided
by the state during its next succeeding fiscal year pursuant to each
contingency contract, and (B) for the director of the budget on behalf
of the state to include, as a requested appropriation item, an amount
equal to such certified amount. Each contingency contract shall include
text to the effect that the obligations of the state thereunder shall be
deemed executory only to the extent of the moneys available to the state
and no liability on account of any such agreement shall be incurred by
the state beyond the moneys available and appropriated for the purpose
thereof.

(ii) The state, through the state representative, is hereby authorized
to enter into a contingency contract on the terms and conditions and
subject to the limitations of this section, it being hereby determined
that the additional net proceeds to be received as a result thereof by
the state are an important public purpose to be achieved. The obligation
of the state to fund or to pay the amounts provided for in the
contingency contract, as in this section provided, shall constitute a
contingent contractual obligation and shall not constitute a debt or
state supported debt of the state within the meaning of any
constitutional or statutory provision and shall be deemed executory only
to the extent of moneys available; no liability shall be incurred by the
state beyond the moneys available for such purpose and such obligation
is subject to annual appropriation by the legislature. The amounts paid
to the corporation pursuant to any such contract shall be used by it
solely to pay or provide for the payment of debt service on the bonds of
the corporation, including refunding bonds, if any.

12. Neither the members of the corporation nor any other person
executing the bonds or an ancillary bond facility of the corporation
shall be subject to any personal liability or accountability by reason
of the issuance or execution and delivery thereof.