Document:

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                                                                    Exhibit 10.3

              EXECUTIVE INCENTIVE COMPENSATION PLAN
                     FOR CORPORATE EXECUTIVES
                     (Amended March 9, 2001)

    This document constitutes and sets forth the terms of The
May Department Stores Company Executive Incentive Compensation
Plan for Corporate Executives.

    Section 1.  Purposes of the Plan.   The purposes of the Plan
are (i) to provide a means to attract, retain and motivate
talented personnel and (ii) to provide to participating
management employees added incentive for high levels of
performance and for additional effort to improve the Company's
financial performance.  Payments of awards under this Plan are
intended to qualify for tax deductibility under the provisions of
Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code").  Notwithstanding any other provisions of this Plan,
if any decision must be made before a specified date in order for
payments to qualify for such tax deductibility under the tax
rules in effect from time to time, then such decision is to be
made before such date.

    Section 2.  Definitions.   Whenever used herein, the
following terms shall have the following meanings:

       (a) "Annual Award" means, for a Participant for a Fiscal
    Year, the product of the Participant's Minimum Annual
    Compensation for such Fiscal Year multiplied by the
    aggregate of:

           (i) the Participant's Annual EPS Factor for such
           Fiscal Year, plus

          (ii) the Participant's Annual RONA Factor for such
       Fiscal Year.

       (b) "Annual EPS Factor" means, for a Participant for a
    Fiscal Year

       (1)  if actual EPS Growth for such Fiscal Year equals or
       exceeds the Participant's Threshold Annual EPS Growth
       Objective for such Fiscal Year but is less than the
       Participant's Target Annual EPS Growth Objective for such
       Fiscal Year,

           (i) seven and one-half percent (up to fifteen percent
           for the Chairman of the Board, the Chief Executive
           Officer or the President), plus
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           (ii) seven and one-half percent (up to fifteen
           percent for the Chairman of the Board , the Chief
           Executive Officer or the President) multiplied by a
           fraction (not less than zero and not greater than
           one), the numerator of which is the actual EPS Growth
           for such Fiscal Year less the Participant's Threshold
           Annual EPS Growth Objective for such Fiscal Year and
           the denominator of which is the Participant's Target
           Annual EPS Growth Objective for such Fiscal Year less
           the Participant's Threshold Annual EPS Growth
           Objective for such Fiscal Year; or

       (2)  if actual EPS Growth for such Fiscal Year equals or
       exceeds the Participant's Target Annual EPS Growth
       Objective for such Fiscal Year but is less than the
       Participant's Maximum Annual EPS Growth Objective for
       such Fiscal Year,

           (i) fifteen percent (up to thirty percent for the
           Chairman of the Board, the Chief Executive Officer or
           the President), plus

           (ii) seven and one-half percent (up to fifteen
           percent for the Chairman of the Board, the Chief
           Executive Officer or the President) multiplied by a
           fraction (not less than zero and not greater than
           one), the numerator of which is the actual EPS Growth
           for such Fiscal Year less the Participant's Target
           Annual EPS Growth Objective for such Fiscal Year and
           the denominator of which is the Participant's Maximum
           Annual EPS Growth Objective for such Fiscal Year less
           the Participant's Target Annual EPS Growth Objective
           for such Fiscal Year; or

       (3)  if actual EPS Growth for such Fiscal Year equals or
       exceeds the Participant's Maximum Annual EPS Growth
       Objective for such Fiscal Year, twenty-two and one-half
       percent (up to forty-five percent for the Chairman of the
       Board, the Chief Executive Officer or the President);

        provided, however,

           (1) that the Annual EPS Factor shall be subject to
           adjustment as provided in Section 6(b); and

           (2) that the percentages referred to in this
           definition may be adjusted by the Committee as
           provided in Section 4(b).
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       (c) "Annual RONA Factor" means, for a Participant for a
    Fiscal Year

       (1)   if actual RONA for such Fiscal Year equals or
       exceeds the Participant's Threshold Annual RONA Objective
       for such Fiscal Year but is less than the Participant's
       Target Annual RONA Objective for such Fiscal Year,

            (i) seven and one-half percent (up to fifteen
           percent for the Chairman of the Board, the Chief
           Executive Officer or the President), plus

           (ii) seven and one-half percent (up to fifteen
           percent for the Chairman of the Board, the Chief
           Executive Officer or the President) multiplied by a
           fraction (not less than zero and not greater than
           one), the numerator of which is the actual RONA for
           such Fiscal Year less the Participant's Threshold
           Annual RONA Objective for such Fiscal Year and the
           denominator of which is the Participant's Target
           Annual RONA Objective for such Fiscal Year less the
           Participant's Threshold Annual RONA Objective for
           such Fiscal Year; or

       (2)   if actual RONA for such Fiscal Year equals or
       exceeds the Participant's Target Annual RONA Objective
       for such Fiscal Year but is less than the Participant's
       Maximum Annual RONA Objective for such Fiscal Year,

            (i) fifteen percent (up to thirty percent for the
           Chairman of the Board, the Chief Executive Officer or
           the President), plus

           (ii) seven and one-half percent (up to fifteen
           percent for the Chairman of the Board, the Chief
           Executive Officer or the President) multiplied by a
           fraction (not less than zero and not greater than
           one), the numerator of which is the actual RONA for
           such Fiscal Year less the Participant's Target Annual
           RONA Objective for such Fiscal Year and the
           denominator of which is the Participant's Maximum
           Annual RONA Objective for such Fiscal Year less the
           Participant's Target Annual RONA Objective for such
           Fiscal Year; or

       (3)  if actual RONA for such Fiscal Year equals or
       exceeds the Participant's Maximum Annual RONA Objective
       for such Fiscal Year, twenty-two and one-half percent (up
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        to forty-five percent for the Chairman of the Board, the
        Chief Executive Officer or the President);

    provided, however,

           (1) that the Annual RONA Factor shall be subject to
           adjustment as provided in Section 6(b); and

           (2) that the percentages referred to in this
           definition may be adjusted by the Committee as
           provided in Section 4(b).

       (d) "Average Annual Compensation" means, for a Long-Term
    Performance Period, the Participant's average annual salary
    rate during such period, determined on a monthly basis, or
    such lesser amount as the Participant and the Company shall
    agree to, in writing.

       (e) "Board" means the Board of Directors of the Company.

       (f) "Committee" means a committee designated by the
    Board, which shall consist of not less than three members of
    the Board who shall be appointed by and serve at the
    pleasure of the Board and who shall be "outside" directors
    within the meaning of Section 162(m) of the Code.

       (g) "Company" means The May Department Stores Company, a
    Delaware corporation.1

       (h) "Disability" means the inability of a Participant to
    perform the normal duties of the Participant's regular
    occupation.

       (i) "EPS Growth" means (i) for a Fiscal Year, the annual
    growth rate in EPS measured from the immediately preceding
    Fiscal Year; and (ii) for a Long-Term Performance Period,
    the compound annual growth rate in EPS measured from the
    Fiscal Year immediately preceding the Long-Term Performance
    Period to the last Fiscal Year in the Long-Term Performance
    Period.  For purposes of this definition, "EPS" for a Fiscal
    Year means the Company's EPS for such Fiscal Year as
    reported in the Company's annual report to its shareholders
    for the year of determination (or, in the event that such

1 The definition of "Company" was amended on May 24, 1996 to
reflect the reincorporation of the company from New York to
Delaware pursuant to a statutory share exchange approved by
shareowners on May 24, 1996.
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    item is not included in such annual report, such comparable
    figure as may be determined by the Committee) adjusted by
    the Company's independent certified public accountants to
    exclude such non-recurring or extraordinary items as the
    Committee shall determine are not representative of the on-
    going operations of the Company.

       (j) "Fiscal Year" means the fiscal year of the Company.

       (k) "Long-Term Award" means, for a Participant for a
    Long-Term Performance Period, the product of the
    Participant's Average Annual Compensation for such period
    multiplied by the aggregate of:

           (i) the Participant's Long-Term EPS Factor for such
           period, plus

           (ii) the Participant's Long-Term RONA Factor for such
           period

    as such product is adjusted in accordance with Section 5(b)
    of the Plan.

       (l) "Long -Term EPS Factor" means, for a Participant for
    a Long-Term Performance Period,

       (1)  if actual EPS Growth for such period equals or
       exceeds the Participant's Threshold Long-Term EPS Growth
       Objective for such period but is less than the
       Participant's Target Long-Term EPS Growth Objective for
       such period,

           (i) five percent (up to ten percent for the Chairman
           of the Board, the Chief Executive Officer or the
           President), plus

           (ii) five percent (up to ten percent for the Chairman
           of the Board, the Chief Executive Officer or the
           President) multiplied by a fraction (not less than
           zero and not greater than one), the numerator of
           which is the actual EPS Growth for such period less
           the Participant's Threshold Long-Term EPS Growth
           Objective for such period and the denominator of
           which is the Participant's Target Long-Term EPS
           Growth Objective for such period less the
           Participant's Threshold Long-Term EPS Growth
           Objective for such period; or

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       (2)  if actual EPS Growth for such period equals or
       exceeds the Participant's Target Long-Term EPS Growth
       Objective for such period but is less than the
       Participant's Maximum Long-Term EPS Growth Objective for
       such period,

           (i) ten percent (up to twenty percent for the
           Chairman of the Board, the Chief Executive Officer or
           the President), plus

           (ii) five percent (up to ten percent for the Chairman
           of the Board, the Chief Executive Officer or the
           President) multiplied by a fraction (not less than
           zero and not greater than one), the numerator of
           which is the actual EPS Growth for such period less
           the Participant's Target Long-Term EPS Growth
           Objective for such period and the denominator of
           which is the Participant's Maximum Long-Term EPS
           Growth Objective for such period less the
           Participant's Target Long-Term EPS Growth Objective
           for such period; or

       (3)  if actual EPS Growth for such period equals or
       exceeds the Participant's Maximum Long-Term EPS Growth
       Objective for such period, fifteen percent (up to thirty
       percent for the Chairman of the Board, the Chief
       Executive Officer or the President);

    provided, however, that the Long-Term EPS Factor shall be
    subject to adjustment as provided in Section 6(b).

       (m) "Long-Term Performance Period" means three
    consecutive Fiscal Years.

       (n) "Long-Term RONA Factor" means, for a Participant for
    a Long-Term Performance Period

       (1)  if actual RONA for such period equals or exceeds the
       Participant's Threshold Long-Term RONA Objective for such
       period but is less than the Participant's Target Long-
       Term RONA Objective for such period,

           (i) five percent (up to ten percent for the Chairman
           of the Board, the Chief Executive Officer or the
           President), plus

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           (ii) five percent (up to ten percent for the Chairman
           of the Board, the Chief Executive Officer or the
           President) multiplied by a fraction (not less than
           zero and not greater than one), the numerator of
           which is the actual RONA for such period less the
           Participant's Threshold Long-Term RONA Objective for
           such period and the denominator of which is the
           Participant's Target Long-Term RONA Objective for
           such period less the Participant's Threshold Long-
           Term RONA Objective for such period; or

       (2)  if actual RONA for such period equals or exceeds the
       Participant's Target Long-Term RONA Objective for such
       period but is less than the Participant's Maximum Long-
       Term RONA Objective for such period,

           (i) ten percent (up to twenty percent for the
           Chairman of the Board, the Chief Executive Officer or
           the President), plus

           (ii) five percent (up to ten percent for the Chairman
           of the Board , the Chief Executive Officer or the
           President) multiplied by a fraction (not less than
           zero and not greater than one), the numerator of
           which is the actual RONA for such period less the
           Participant's Target Long-Term RONA Objective for
           such period and the denominator of which is the
           Participant's Maximum Long-Term RONA Objective for
           such period less the Participant's Target Long-Term
           RONA Objective for such period; or

       (3)  if actual RONA for such period equals or exceeds
       the Participant's Maximum Long-Term RONA Objective for
       such period, fifteen percent (up to thirty percent for
       the Chairman of the Board , the Chief Executive Officer
       or the President);

    provided, however, that the Long-Term RONA Factor shall be
    subject to adjustment as provided in Section 6(b).

       (o) "Market Value" means the average closing price of the
    Stock on the New York Stock Exchange, Inc. during the month
    of February of the year specified.

       (p) "Minimum Annual Compensation" means, for a Fiscal
    Year, the Participant's rate of minimum annual salary on the
    first day of the fiscal month of November in the Fiscal
    Year.
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       (q) "Participant" means an individual who has been
    designated to participate in the Plan in accordance with
    Section 3 of the Plan.

       (r) "Plan" mean The May Department Stores Company
    Executive Incentive Compensation Plan for Corporate
    Executives.

       (s) "Relative Performance Rank" means, for a Fiscal Year
    or for a Long-Term Performance Period, the relative rank of
    the Company (as among the Company and a group of competitors
    designated by the Committee) based on the EPS Growth and
    RONA, respectively, of all such corporations for such
    corporations' comparable fiscal periods, as determined by
    the Committee.  Relative Performance Rank shall be
    determined based on data provided by the Company's
    independent certified public accountants from publicly
    available information about all such corporations, and
    adjusted by such independent certified public accountants
    for comparability (adjustments for LIFO, major non-recurring
    transactions, etc.) subject to the direction and approval of
    the Committee.  The competitors designated by the Committee
    for the 1994 Fiscal Year and for the Long-Term Performance
    Period commencing in 1994 are Dayton-Hudson Company, Dillard
    Department Stores, J.C. Penney, Melville Stores, Mercantile
    Stores and Nordstrom.  The Committee may change the number
    of competitors or corporations included in the group when,
    as a result of extraordinary or unforeseen events, it is no
    longer appropriate for a particular corporation to be
    included in the competitor group (such as when one of the
    group ceases operations, merges with another corporation,
    files for bankruptcy protection or significantly changes the
    nature of its business).2 3

2 March 15, 1996:  The Committee changed the competitor group to
drop Melville and to add Sears for Fiscal Years and Long-Term
Performance Periods ending after March 15, 1996.  Melville had
announced its planned restructuring; the Company had announced
its planned spin-off of Payless; Sears was more closely
positioned to the Company in the marketplace.

3 November 20, 1998:  The Committee changed the competitor group
to drop Mercantile Stores and to add Federated Department Stores
and Kohl's for Fiscal Years and Long-Term Performance Periods
ending after November 20, 1998.  Mercantile Stores was acquired
by other retailers in the fall of 1998.

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       (t) "Retirement" means, as to a Participant, retirement
    as that word is defined in any retirement plan sponsored by
    the Company or any Subsidiary which is applicable to such
    Participant.

       (u) "RONA" means (i) for a Fiscal Year, the Company's
    return on beginning net assets for such Fiscal Year as
    reported in the Company's annual report to its shareowners
    for the year of determination (or, in the event that such
    item is not included in such annual report, such comparable
    figure as may be determined by the Committee) adjusted by
    the Company's independent certified public accountants to
    exclude such non-recurring or extraordinary items as the
    Committee shall determine are not representative of the
    ongoing operations of the Company; and (ii) for a Long-Term
    Performance Period, the sum of the RONA for each Fiscal Year
    in the Long-Term Performance Period divided by three.

       (v) "Stock" means the common stock of the Company.

       (w) "Subsidiary" means a subsidiary corporation of the
    Company within the meaning of Section 425(f) of Code.

       (x) The terms "Maximum Annual EPS Growth Objective,"
    "Maximum Long-Term EPS Growth Objective," "Target Annual EPS
    Growth Objective," "Target Long-Term EPS Growth Objective,"
    "Threshold Annual EPS Growth Objective," "Threshold Long-
    Term EPS Growth Objective," "Maximum Annual RONA Objective,"
    "Maximum Long-Term RONA Objective," "Target Annual RONA
    Objective," "Target Long-Term RONA Objective," "Threshold
    Annual RONA Objective" and "Threshold Long-Term RONA
    Objective" shall mean the respective objectives determined
    by the Committee for each Participant pursuant to Section 7
    of the Plan.

    Section 3.  Eligibility.   Management employees of the
Company and its Subsidiaries shall be eligible to participate in
the Plan.  The Committee may, in its sole discretion, designate
any such individual as a Participant for a particular Fiscal Year
and/or for a particular Long-Term Performance Period before the
end of such Fiscal Year and Long-Term Performance Period,
respectively.  Designation of an individual as a Participant for
any period shall not require designation of such individual as a
Participant in any other period, and designation of one
individual as a Participant shall not require designation of any
other individual as a Participant in such period or in any other
period.

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    Section 4.  Annual Award.   (a) Subject to the other
provisions of the Plan, a Participant for a Fiscal Year who is
designated as such for an entire Fiscal Year shall be entitled to
an Annual Award for such Fiscal Year.  Subject to the other
provisions of the Plan, a Participant for a Fiscal Year who is
designated as such for less than an entire Fiscal Year shall be
entitled to a reduced Annual Award for such Fiscal Year equal to
the Annual Award for such Fiscal Year multiplied by a fraction,
the numerator of which shall be the number of complete fiscal
months between (i) the first day of the fiscal month in which
occurs the date as of which the Participant was so designated and
(ii) the end of such Fiscal Year and the denominator of which
shall be twelve.

    (b) The Committee may change the percentages referred to in
the definitions of "Annual EPS Factor" and "Annual RONA Factor"
for any Fiscal Year, provided that the maximum Annual Award which
may be paid under such different percentages may not be greater
than 45% (90% for the Chairman of the Board, the Chief Executive
Officer or the President) of the Participant's Minimum Annual
Compensation for such Fiscal Year.

    (c) Notwithstanding any other provision of the Plan, the
maximum dollar amount of any Annual Award for any Participant for
any Fiscal Year shall not exceed $2,000,000.

    Section 5.  Long-Term Award.   (a) Subject to the other
provisions of the Plan, a Participant for a Long-Term Performance
Period who is designated as such for an entire Long-Term
Performance Period shall be entitled to a Long-Term Award for
such period.  Subject to the other provisions of the Plan, a
Participant for a Long-Term Performance Period who is designated
as such for less than an entire Long-Term Performance Period
shall be entitled to a reduced Long-Term Award for such period
equal to the Long-Term Award for such period multiplied by a
fraction, the numerator of which shall be the number of complete
fiscal months between (i) the first day of the fiscal month in
which occurs the date as of which the Participant was so
designated and (ii) the end of such Long-Term Performance Period
and the denominator of which shall be thirty-six.

    (b) The Long-Term Award otherwise payable pursuant to
Section 5(a) of the Plan for a Long-Term Performance Period shall
be adjusted by multiplying such Long-Term Award by a percentage
equal to a fraction, the numerator of which shall be the Market
Value of the Stock in February of the calendar year in which such
Long-Term Performance Period ends and the denominator of which

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shall be the Market Value of the Stock in February of the
calendar year in which such Long-Term Performance Period begins;
provided, however, that such percentage shall in no event be
greater than one hundred fifty percent nor less than seventy-five
percent.

    (c) Notwithstanding any other provision of the Plan, the
maximum dollar amount of any Long-Term Award for any Participant
for any Long-Term Performance Period shall not exceed $2,000,000.

    Section 6.  Adjustments.   (a)  Discretionary Adjustment of
Awards.  In the event that the Committee determines, in its
absolute discretion, that an Annual Award or a Long-Term Award
payable to a Participant in accordance with the other terms of
the Plan should be adjusted, upwards or downwards, based on all
the facts and circumstances known to the Committee at the time,
then, the Committee may, in its sole and absolute discretion,
increase or decrease any such Annual Award or Long-Term Award to
such amount as it determines;  provided, however, that the
Committee may not adjust upwards any Annual Award or Long-Term
Award of any Participant who is a "covered employee" (as defined
in Section 162 (m) of the Code and the regulations thereunder)
with respect to the particular performance period for which the
Annual Award or Long-Term Award is being granted.

    (b) Adjustment for Relative Rank.  A Participant's Annual
EPS Factor, Annual RONA Factor, Long-Term EPS Factor and Long-
Term RONA Factor shall be adjusted in the following manner based
upon the number of competitors in the group of competitors used
to determine the Company's Relative Performance Rank and the
Company's Relative Performance Rank therein:

    Number of Competitor Companies (not including the Company)

                              10    9    8    7    6    5    4
Factor will be no less than
 "Target" if the Company's    1st- 1st- 1st- 1st- 1st- 1st- 1st-
 rank is:                      3rd  3rd  3rd  2nd  2nd  2nd  2nd

Factor will be no less than
 "Threshold" if the Company's 4th- 4th- 4th- 3rd- 3rd- 3rd- 3rd -
 rank is:                      6th  6th  6th  4th  4th  4th  4th

Factor will be no higher than
 "Threshold" if the Company's 9th- 8th- 7th- 7th- 6th- 5th- 5th
 rank is:                      11th 10th 9th  8th  7th  6th

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    Section 7.  Annual and Long-Term Targets.   Threshold,
target and maximum annual and long-term objectives with respect
to EPS Growth and with respect to RONA shall be determined by the
Committee as soon as practicable prior to the commencement of
each Fiscal Year and each Long-Term Performance Period for each
Participant or within the period permitted by applicable law.
The Committee shall cause the respective objectives for each
Participant to be provided to such Participant as soon thereafter
as practicable.  Such objectives shall remain in effect for the
entire Fiscal Year or Long-Term Performance Period, as
appropriate.

    Section 8.  Payment of Awards.   (a) Annual Awards for a
Fiscal Year shall be payable in cash within three months after
the close of such Fiscal Year or as soon thereafter as
practicable.

    (b) Long-Term Awards for a Long-Term Performance Period
shall be payable in cash within three months after the close of
such Long-Term Performance Period or as soon thereafter as
practicable.

    (c) A Participant may elect to defer all or a portion of an
award by making such election under the Deferred Compensation
Plan with respect to such award. Such election must be made not
later than December 31 of the calendar year preceding the
commencement of the Fiscal Year or Long-Term Performance Period,
as appropriate.

    (d) The Company shall have the right to deduct any sums that
federal, state or local tax laws require to be withheld with
respect to any payment of awards.

    (e) Before any award is paid to a Participant who is a
"covered employee" (as defined in Section 162(m) of the Code and
the regulations thereunder), the Committee shall certify in
writing that the material terms of the Plan have been satisfied.

    Section 9.  Termination of Employment.

    (a) Death or Disability.  In the event of either the death
or Disability of the Participant while employed (a "Section 9(a)
Event"), the Participant shall be entitled to the following:

       (i) An Annual Award with respect to the Fiscal Year in
       which the Section 9(a) Event occurs equal to the Annual

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       Award otherwise payable (if any) for that Fiscal Year,
       prorated to the end of the fiscal month in which such
       Section 9(a) Event occurs; and

       (ii) A Long-Term Award with respect to each Long-Term
       Performance Period which includes the Fiscal Year of the
       Section 9(a) Event; provided, however, that for purposes
       of this Section 9(a)(ii) the Long-Term Award for any
       Long-Term Performance Period (1) shall be determined at
       the end of the Fiscal Year in which the Section 9(a)
       Event occurs, (2) shall be determined (and averages used
       in that determination shall be calculated) based only on
       the Fiscal Year and any preceding Fiscal Years otherwise
       included in the Long-Term Performance Period and (3)
       shall be prorated to the end of the fiscal month in which
       the Section 9(a) Event occurs.

   (b) Retirement.

       (i) In the event of the Retirement of the Participant
       with the written consent of the Company, such event shall
       be deemed to be a Section 9(a) Event, and the Participant
       shall be entitled to an Annual Award and to a Long-Term
       Award as provided in Section 9(a).

       (ii) In the event of the Retirement of the Participant
       without the consent of the Company (a "Section 9(b)(ii)
       Event"), the Participant shall be entitled to the
       following:

           (1) An Annual Award with respect to the Fiscal Year
           in which the Section 9(b)(ii) Event occurs equal to
           the Annual Award otherwise payable (if any) for the
           Fiscal Year, prorated to the end of the fiscal month
           in which the Section 9(b)(ii) Event occurs; and

           (2) No Long-Term Award following the Section 9(b)(ii)
           Event.  The Participant shall forfeit any right or
           entitlement to any award with respect to any Long-
           Term Performance Period which has not been completed
           on the date of the Section 9(b)(ii) Event.  Any Long-
           Term Award for a period which ended prior to the
           Section 9(b)(ii) Event shall remain unaffected.

   (c) Termination of Employment.

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       (i) In the event of the termination of employment of the
       Participant not covered by Sections 9(a) or 9(b) above
       which occurs at the end of the term of the Participant's
       then-current written employment agreement (if any) with
       the Company or Subsidiary, or in the event of such a
       termination of a Participant who has no current written
       employment agreement with the Company or Subsidiary, such
       event shall be deemed to be a Section 9(b)(ii) Event, and
       the Participant shall be entitled to an Annual Award (but
       not to a Long-Term Award) as provided in Section
       9(b)(ii).

       (ii) In the event of the termination of employment of the
       Participant not covered by Sections 9(a) or 9(b) above
       before the end of the term of the Participant's then-
       current written employment agreement (if any) with the
       Company or Subsidiary, with the written consent of the
       Company (a "Section 9(c)(ii) Event"), the Participant
       shall be entitled to the following:

           (1) An Annual Award with respect to the Fiscal Year
           in which the Section 9(c)(ii) Event occurs equal to
           the actual award otherwise payable for the Fiscal
           Year (if any); provided, however, that in the event
           that the term of the Participant's then-current
           employment agreement is due to expire during that
           Fiscal Year, then the Annual Award shall be prorated
           to the end of the fiscal month in which such term is
           due to expire; and

           (2) A Long-Term Award with respect to each Long-Term
           Performance Period which includes the Fiscal Year of
           the 9(c)(ii) Event equal to the Long-Term Award
           otherwise payable with respect to each Long-Term
           Performance Period; provided, however, that in the
           event that the term of the Participant's then-current
           employment agreement (if any) with the Company is
           otherwise due to expire during any such period, then
           the Long-Term Award with respect to such period shall
           be prorated to the end of the calendar month in which
           such term is due to expire.

       (iii) In the event of the termination of employment of
       the Participant not otherwise covered by this Section 9
       before the end of the term of the then-current written
       employment agreement (if any) with the Company or
       Subsidiary, without the written consent of the Company,

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       the Participant shall not be entitled to any Annual Award
       or to any Long-Term Award with respect to any Fiscal Year
       or Long-Term Performance Period which has not been
       completed as of the date of such termination of
       employment.  The Participant shall forfeit any right or
       interest in any award for any such Fiscal Year or Long-
       Term Performance Period.  Annual Awards and Long-Term
       Awards with respect to Fiscal Years and Long-Term
       Performance Periods which ended prior to the date of such
       termination of employment shall remain unaffected.

   (d) For purposes of this Section 9, the term "written
consent of the Company" shall refer to an express written consent
of the Company, duly executed by the Company, which, by its own
terms, expressly refers to this Section 9 of the Plan.

    Section 10. Transfers and Changes in Responsibilities.   In
the event that (i) the duties of a Participant change and the
Participant becomes eligible to participate in another bonus plan
of the Company, or (ii) the duties of an employee who is a
participant in another bonus plan of the Company change and the
employee is newly designated by the Committee as a Participant in
this Plan, then the maximum amount that such Participant would be
entitled to receive under the Plan shall be

    (1)  the Annual Award determined in accordance with the
    provisions of the Plan with respect to the entire Fiscal
    Year in which such event occurred; and

    (2)  a Long-Term Award with respect to each Long-Term
    Performance Period which has commenced at the time of the
    event, determined in accordance with the provisions of the
    Plan,

subject, in all events, to the Committee's right to adjust such
awards in accordance with and subject to the restrictions set
forth in Section 6(a), in its absolute discretion, which may be
exercised in such a way that the Committee deems fair and
equitable based on the performance of Participant while
participating in the other bonus plan of the Company.

    Section 11.  Rights of Participants and Beneficiaries.   (a)
Nothing contained in the Plan shall confer upon any Participant
any right to continue in the employ of the Company or constitute
any contract or agreement of employment or interfere in any way
with the right of the Company to terminate or change the
conditions of employment.

                                15
<PAGE>
    (b) The Company shall pay all amounts payable hereunder only
to the Participant or his or her personal representatives.  In
the event of the death of a Participant, payments of all amounts
otherwise due to the Participant under the Plan shall be made to
the Participant's beneficiary at the time of death under the
Company Paid Life Plan of The May Department Stores Company or to
such other beneficiary as the Participant shall have designated,
in writing, for purposes of this Plan on a form provided by the
Company.

    (c) Subject to the provisions of Section 11(d), rights to
payments under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, levy or charge, and any attempt to do so shall be
void;  nor shall any such amounts be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or
torts of the Participant or his or her beneficiaries.

    (d) Nothing in this Section 11 shall prohibit the personal
representatives of a Participant from designating that any amount
that would otherwise be distributed to the Participant's estate
should be distributed in accordance with the terms of the
Participant's last will and testament or pursuant to the laws of
descent and distribution.

    Section 12.  Unfunded Character of the Plan.   The right of
a Participant to receive any Annual Award or Long-Term Award
hereunder shall be an unsecured claim against the general assets
of the Company.  Nothing in the Plan shall require the Company to
invest any amounts in Stock or in any other medium.

    Section 13.  Changes in Capital Structure.   In the event
that there is any change in the Stock through merger,
consolidation, reorganization, recapitalization, spin-off or
otherwise, or if there shall be any dividend on the Stock,
payable in such Stock, or if there shall be a stock split or
combination of shares, then the fraction provided for in Section
5(b) of the Plan shall be adjusted by the Committee as it deems
desirable, in its absolute discretion, to prevent dilution or
enlargement of the rights of Participants.  The issuance of Stock
for consideration and the issuance of Stock rights shall not be
considered a change in the Company's capital structure.

    Section 14.  Amendment or Termination.   The Committee may,
by resolution, amend or terminate the Plan at any time.  Any
amendment necessary to bring the Plan into compliance with
Section 162(m) of the Code and any regulations thereunder shall

                                16
<PAGE>
not require shareowner approval and the effectiveness of such
amendment shall be as of the effective date of the provision in
Section 162(m) of the Code or regulations thereunder giving rise
to the amendment.  However, (i) shareowner approval shall be
sought for any changes to the Plan which would require shareowner
approval under Section 162(m) of the Code and (ii) except as
provided in the preceding sentence, the Committee may not,
without the consent of the Participant, amend or terminate the
Plan in such a manner as to affect adversely any Annual Award or
Long-Term Award which would have been payable, based on the terms
of the Plan immediately prior to any such amendment or
termination, for any Fiscal Year or Long-Term Performance Period
which has already commenced as of the effective date of the
amendment or termination.

                                17Exhibit 4.1

                  SERIES 2002A SUPPLEMENTAL INDENTURE OF TRUST

                                 by and between

                        NELNET STUDENT LOAN CORPORATION-2

                                       and

                           ZIONS FIRST NATIONAL BANK,
                                   as Trustee

                           Authorizing the Issuance of

                                  $564,000,000
                        NELNET Student Loan Corporation-2
                         Student Loan Asset-Backed Notes
                                  Series 2002A

                            Dated as of March 1, 2002

<PAGE>

                                Table of Contents

                                                                           Page

                                    ARTICLE I

DEFINITIONS AND USE OF PHRASES................................................1

                                   ARTICLE II

 SERIES 2002A NOTE DETAILS, FORM OF SERIES 2002A NOTES, REDEMPTION OF
    SERIES 2002A NOTES AND USE OF PROCEEDS OF SERIES 2002A NOTES

Section 2.01.     Series 2002A Note Details...................................3
Section 2.02.     Redemption of the Series 2002A Notes........................6
Section 2.03.     Delivery of Series 2002A Notes..............................7
Section 2.04.     Trustee's Authentication Certificate........................8
Section 2.05.     Deposit of Series 2002A Note Proceeds.......................8
Section 2.06.     Forms of Series 2002A Notes.................................8

                                   ARTICLE III

AMENDMENT TO THE ORIGINAL INDENTURE...........................................8

                                   ARTICLE IV

Section 4.01.     Date of Execution...........................................9
Section 4.02.     Laws Governing..............................................9
Section 4.03.     Severability................................................9
Section 4.04.     Exhibits....................................................9

                                    ARTICLE V

APPLICABILITY OF INDENTURE....................................................9

APPENDIX A   CERTAIN TERMS AND PROVISIONS OF THE AUCTION RATE NOTES
EXHIBIT A    FORM OF SERIES 2002A NOTES
EXHIBIT B    SERIES 2002A CLOSING CASH FLOW PROJECTIONS
EXHIBIT C    NOTICE OF PAYMENT DEFAULT
EXHIBIT D    NOTICE OF CURE OF PAYMENT DEFAULT
EXHIBIT E    NOTICE OF PROPOSED CHANGE IN LENGTH OF ONE OR MORE AUCTION PERIODS
EXHIBIT F    NOTICE ESTABLISHING CHANGE IN LENGTH OF ONE OR MORE AUCTION PERIODS
EXHIBIT G    NOTICE OF CHANGE IN AUCTION DATE

<PAGE>

                  SERIES 2002A SUPPLEMENTAL INDENTURE OF TRUST

        THIS SERIES 2002A SUPPLEMENTAL INDENTURE OF TRUST (this "Supplemental
Indenture") dated as of March 1, 2002, is by and between NELNET STUDENT LOAN
CORPORATION-2, a corporation duly organized and existing under the laws of the
State of Nevada (the "Issuer"), and ZIONS FIRST NATIONAL BANK, a national
banking association duly organized and operating under the laws of the United
States of America (together with its successors, the "Trustee"), as trustee
hereunder (all capitalized terms used in these preambles, recitals and granting
clauses shall have the same meanings assigned thereto in Article I hereof);

                              W I T N E S S E T H :

        WHEREAS, the Issuer has previously entered into an Indenture of Trust
dated as of June 1, 2000 (as previously amended, the "Original Indenture," and
together with this Supplemental Indenture, the "Indenture"), between the Issuer
and the Trustee;

        WHEREAS, the Issuer desires to enter into this Supplemental Indenture in
order to issue Notes pursuant to the terms of the Original Indenture, including
Section 2.08 thereof;

        WHEREAS, the Issuer represents that it is duly created as a corporation
under the laws of the State and that by proper action it has duly authorized the
issuance of $564,000,000 of its Student Loan Asset-Backed Notes, Series 2002A
consisting of one Class, designated as Senior Class 2002A (the "Series 2002A
Notes"), and it has by proper corporate action authorized the execution and
delivery of this Supplemental Indenture;

        WHEREAS,  the  Series  2002A  Notes  constitute  Notes as defined in the
Indenture;

        WHEREAS, the Trustee has agreed to accept the trusts herein created upon
the terms herein set forth; and

        NOW, THEREFORE, it is mutually covenanted and agreed as follows:

                                   ARTICLE I

                         DEFINITIONS AND USE OF PHRASES

        All words and phrases defined in Article I of the Indenture shall have
the same meaning in this Supplemental Indenture, except as otherwise appears in
this Article. In addition, the following terms have the following meanings in
this Supplemental Indenture unless the context clearly requires otherwise:

        "AUTHORIZED DENOMINATIONS" means $50,000 and any integral multiple
thereof.

        "CLASS 2002A-1 NOTES" means the $70,500,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-1 Auction
Rate Notes.

                                       1
<PAGE>

        "CLASS 2002A-2 NOTES" means the $70,500,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-2 Auction
Rate Notes.

        "CLASS 2002A-3 NOTES" means the $70,500,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-3 Auction
Rate Notes.

        "CLASS 2002A-4 NOTES" means the $70,500,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-4 Auction
Rate Notes.

        "CLASS 2002A-5 NOTES" means the $100,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-5 Auction
Rate Notes.

        "CLASS 2002A-6 NOTES" means the $100,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-6 Auction
Rate Notes.

        "CLASS 2002A-7 NOTES" means the $82,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2002A-7 Auction
Rate Notes.

        "DATE OF ISSUANCE" means, with respect to the Series 2002A Notes, March
27, 2002.

        "RATING AGENCY" means, collectively, Fitch Ratings, Standard & Poor's
Ratings Services and Moody's Investors Service.

        "SERIES 2002A NOTES" means the NELNET Student Loan Corporation-2,
Student Loan Asset-Backed Notes, Series 2002A issued pursuant to the Indenture
and this Supplemental Indenture in the aggregate principal amount of
$564,000,000 consisting of the Class 2002A-1 Notes, the Class 2002A-2 Notes, the
Class 2002A-3 Notes, the Class 2002A-4 Notes, the Class 2002A-5 Notes, the Class
2002A-6 Notes and the Class 2002A-7 Notes.

        "SERIES 2002A RESERVE FUND REQUIREMENT" means 0.75% of the Notes
outstanding; provided, however, that so long as any Notes remain Outstanding
there shall be at least $1,000,000 on deposit in the Reserve Fund.

        "SERVICER" means NELnet, Inc., a Nevada corporation,  and its successors
and assigns.

        "SERVICING AGREEMENT" means, collectively, (i) the Servicing Agreement
dated as of June 1, 2000, as supplemented and amended from time to time, between
the Issuer and the Servicer, (ii) the Loan Subservicing Agreement dated as of
June 1, 2000, as supplemented and amended from time to time, between the
Servicer and Nelnet Loan Services, Inc. (formerly known as UNIPAC Service
Corporation), as subservicer and (iii) the Loan Sub-Servicing Agreement dated as
of June 1, 2000, as supplemented and amended from time to time, between the
Servicer and InTuition, Inc., as subservicer.

        "SUBSERVICER" means, collectively,  Nelnet Loan Services, Inc. (formerly
known as UNIPAC Service  Corporation) and InTuition,  Inc., and their successors
and assigns.

        "UNDERWRITER"  means,  collectively,  Banc of America Securities LLC and
J.P. Morgan Securities Inc.

                                       2
<PAGE>

        Words importing the masculine gender include the feminine gender. Words
importing persons include firms, associations and corporations. Words importing
the singular number include the plural number and vice versa. Additional terms
are defined in the body of this Supplemental Indenture and the Appendices
hereto.

        In the event that any term or provision contained herein with respect to
the Series 2002A Notes shall conflict with or be inconsistent with any term or
provision contained in the Indenture, the terms and provisions of this
Supplemental Indenture shall govern.

                                   ARTICLE II

                           SERIES 2002A NOTE DETAILS,
                           FORM OF SERIES 2002A NOTES,
                        REDEMPTION OF SERIES 2002A NOTES
                    AND USE OF PROCEEDS OF SERIES 2002A NOTES

        SECTION 2.01. SERIES 2002A NOTE DETAILS.

                (a) The aggregate principal amount of the Series 2002A Notes
        which may be initially authenticated and delivered under this
        Supplemental Indenture is limited to $564,000,000 except for Series
        2002A Notes authenticated and delivered upon transfer of, or in exchange
        for, or in lieu of Notes pursuant to Sections 2.03 and 2.04 of the
        Indenture. The Series 2002A Notes shall be issued in seven (7) separate
        subclasses (each a "Subclass") consisting of $70,500,000 of Class
        2002A-1 Notes, $70,500,000 of Class 2002A-2 Notes, $70,500,000 of Class
        2002A-3 Notes, $70,500,000 of Class 2002A-4 Notes, $100,000,000 of Class
        2002A-5 Notes, $100,000,000 of Class 2002A-6 Notes and $82,000,000 of
        Class 2002A-7 Notes. The Series 2002A Notes shall be issuable only as
        fully registered notes in the Authorized Denominations. The Series 2002A
        Notes of each Subclass shall each be lettered "R" and shall be numbered
        separately from 1 upwards, respectively.

                The Series 2002A Notes (collectively, the "Auction Rate Notes")
        shall be dated their Date of Issuance and shall bear interest from their
        Date of Issuance, payable on each Interest Payment Date (as defined in
        Appendix A to this Supplemental Indenture), except that Auction Rate
        Notes which are issued upon transfer, exchange or other replacement
        shall bear interest from the most recent Interest Payment Date to which
        interest has been paid, or if no interest has been paid, from the date
        of the Auction Rate Notes. The Series 2002A Notes shall mature on June
        1, 2035. Interest on the Auction Rate Notes shall be computed on the
        basis of a 360-day year and actual days elapsed. The terms of and
        definitions related to the Auction Rate Notes are found in Article I
        hereof and Appendix A to this Supplemental Indenture.

               The principal of the Series 2002A Notes due at its Stated
        Maturity or redemption in whole shall be payable at the Principal Office
        of the Trustee, or such other location as directed by the Trustee, or at
        the Principal Office of its successor in trust upon presentation and
        surrender of the Series 2002A Notes. Payment of interest and principal
        paid subject to a redemption on any Series 2002A Note shall be made to
        the Registered Owner thereof by check or draft mailed on the Interest
        Payment Date by the Trustee to the Registered Owner at his address as it

                                       3
<PAGE>

        last appears on the registration books kept by the Trustee at the close
        of business on the Record Date for such interest payment date, but any
        such interest not so timely paid or duly provided for shall cease to be
        payable to the Registered Owner thereof at the close of business on the
        Record Date and shall be payable to the Registered Owner thereof at the
        close of business on a special record date (a "Special Record Date") for
        the payment of any such defaulted interest. Such Special Record Date
        shall be fixed by the Trustee whenever moneys become available for
        payment of the defaulted interest, and notice of such Special Record
        Date shall be given to the Registered Owners of the Series 2002A Notes
        not less than 10 days prior thereto by first-class mail to each such
        Registered Owner as shown on the Trustee's registration books on the
        date selected by the Trustee, stating the date of the Special Record
        Date and the date fixed for the payment of such defaulted interest.
        Payment of interest to the Securities Depository or its nominee shall,
        and at the written request addressed to the Trustee of any other
        Registered Owner owning at least $1,000,000 principal amount of the
        Series 2002A Notes, payments of interest shall, be paid by wire transfer
        within the United States to the bank account number filed no later than
        the Record Date or Special Record Date with the Trustee for such
        purpose. All payments on the Series 2002A Notes shall be made in lawful
        money of the United States of America.

                (b) Except as otherwise provided in this Section, the Series
        2002A Notes in the form of one global note for each Stated Maturity date
        shall be registered in the name of the Securities Depository or its
        nominee and ownership thereof shall be maintained in book-entry form by
        the Securities Depository for the account of the Agent Members.
        Initially, each Series 2002A Note shall be registered in the name of
        CEDE & Co., as the nominee of The Depository Trust Company. Except as
        provided in subsection (d) of this Section, the Series 2002A Notes may
        be transferred, in whole but not in part, only to the Securities
        Depository or a nominee of the Securities Depository or to a successor
        Securities Depository selected or approved by the Issuer or to a nominee
        of such successor Securities Depository. Each global note shall bear a
        legend substantially to the following effect: "Except as otherwise
        provided in the Indenture, this global note may be transferred, in whole
        but not in part, only to another nominee of the Securities Depository
        (as defined in the Indenture) or to a successor Securities Depository or
        to a nominee of a successor Securities Depository."

                (c) Except as otherwise provided herein, the Issuer and the
        Trustee shall have no responsibility or obligation with respect to (i)
        the accuracy of the records of the Securities Depository or any Agent
        Member with respect to any beneficial ownership interest in the Series
        2002A Notes, (ii) the delivery to any Agent Member, beneficial owner of
        the Series 2002A Notes or other Person, other than the Securities
        Depository, of any notice with respect to the Series 2002A Notes or
        (iii) the payment to any Agent Member, beneficial owner of the Series
        2002A Notes or other Person, other than the Securities Depository, of
        any amount with respect to the principal of or interest on the Series
        2002A Notes. So long as the certificates for the Series 2002A Notes
        issued under this Supplemental Indenture are not issued pursuant to
        subsection (d) of this Section the Issuer and the Trustee may treat the
        Securities Depository as, and deem the Securities Depository to be, the
        absolute owner of the Series 2002A Notes for all purposes whatsoever,
        including, without limitation, (A) the payment of principal of and

                                       4
<PAGE>

        interest on such Series 2002A Notes, (B) giving notices of redemption
        and other matters with respect to such Series 2002A Notes and (C)
        registering transfers with respect to such Series 2002A Notes. In
        connection with any notice or other communication to be provided to the
        Registered Owners pursuant to this Supplemental Indenture by the Issuer
        or the Trustee with respect to any consent or other action to be taken
        by the Registered Owners, the Issuer or the Trustee, as the case may be,
        shall establish a record date for such consent or other action and, if
        the Securities Depository shall hold all of the Series 2002A Notes, give
        the Securities Depository notice of such record date not less than 15
        calendar days in advance of such record date to the extent possible.
        Such notice to the Securities Depository shall be given only when the
        Securities Depository is the sole Registered Owner.

                (d) If at any time the Securities Depository notifies the Issuer
        and the Trustee that it is unwilling or unable to continue as Securities
        Depository with respect to any or all of the Series 2002A Notes or if at
        any time the Securities Depository shall no longer be registered or in
        good standing under the Securities Exchange Act or other applicable
        statute or regulation and a successor Securities Depository is not
        appointed by the Issuer within 90 days after the Issuer receives notice
        or becomes aware of such condition, as the case may be, subsections (b)
        and (c) of this Section shall no longer be applicable and the Issuer
        shall execute and the Trustee shall authenticate and deliver
        certificates representing the Series 2002A Notes as provided below. In
        addition, the Issuer may determine at any time that the Series 2002A
        Notes shall no longer be represented by global certificates and that the
        provisions of subsections (b) and (c) of this Section shall no longer
        apply to the Series 2002A Notes. In such event, the Issuer shall execute
        and the Trustee shall authenticate and deliver certificates representing
        the Series 2002A Notes as provided below. Certificates for the Series
        2002A Notes issued in exchange for a global certificate pursuant to this
        subsection shall be registered in such names and authorized
        denominations as the Securities Depository, pursuant to instructions
        from the Agent Members or otherwise, shall instruct in writing to the
        Issuer and the Trustee, and upon which written instructions the Trustee
        may rely without investigation. The Trustee shall promptly deliver such
        certificates representing the Series 2002A Notes to the Persons in whose
        names such Notes are so registered.

        SECTION 2.02. REDEMPTION OF THE SERIES 2002A NOTES.

                (a) MANDATORY REDEMPTION. Subject to the provisions of Section
        2.02(d) hereof, the Series 2002A Notes are subject to mandatory
        redemption (a) in whole or in part, on the first Interest Payment Date
        after September 15, 2002, at a redemption price equal to the principal
        amount thereof plus interest accrued, if any, to the date of redemption
        thereof from moneys deposited in the Acquisition Fund on the Date of
        Issuance which have not been used to finance Eligible Loans by September
        15, 2002 and (b) at the direction of the Issuer, in whole or in part, on
        any Interest Payment Date, at a redemption price equal to the principal
        amount thereof plus interest accrued, if any, to the date of redemption
        thereof from moneys representing Recoveries of Principal deposited in
        the Acquisition Fund after March 1, 2005, unless such date can be
        extended without affecting the Rating on any of the Notes, as evidenced
        by a Rating Confirmation.

                                       5
<PAGE>

        (b) OPTIONAL REDEMPTIONS AND OPTIONAL PURCHASE.

                (i) OPTIONAL REDEMPTION OF SERIES 2002A NOTES. Subject to the
        provisions of Section 2.02(d) hereof, the Series 2002A Notes are subject
        to redemption at the option of the Issuer, from funds received by the
        Trustee constituting interest on Financed Eligible Loans remaining in
        the Revenue Fund after all other prior required payments have been made
        from the Revenue Fund, in whole or in part, on any Interest Payment
        Date, at a redemption price equal to the principal amount thereof being
        redeemed, plus interest accrued, if any, and Carry-Over Amounts, if any
        and as described in Schedule A hereto, to the date of redemption.

                (ii) EXTRAORDINARY OPTIONAL REDEMPTION OF SERIES 2002A NOTES.
        Subject to the provisions of Section 2.02(d) hereof, the Series 2002A
        Notes shall also be subject to extraordinary optional redemption, at the
        option of the Issuer, from any unallocated and available moneys in the
        Trust Estate, at a redemption price equal to the principal amount of the
        Series 2002A Notes being redeemed, plus accrued interest to the date of
        redemption, without premium in whole or in part on any Interest Payment
        Date, if the Issuer reasonably determines that it is unable to acquire
        Financed Eligible Loans, that the rate of return on Financed Eligible
        Loans has materially decreased, or that the costs of administering the
        Trust Estate have placed unreasonable burdens upon the ability of the
        Issuer to perform its obligations under the Indenture.

                (iii) OPTIONAL PURCHASE OF SERIES 2002A NOTES. Subject to the
        provisions of Section 2.02(d) hereof, the Issuer may purchase or cause
        to be purchased all of the Series 2002A Notes on any Interest Payment
        Date on which the aggregate current principal balance of the Series
        2002A Notes shall be less than or equal to 20% of the initial aggregate
        principal balance of the Series 2002A Notes on their Date of Issuance,
        at a purchase price equal to the aggregate current principal balance of
        such Series 2002A Notes, plus accrued interest on the Series 2002A Notes
        through the day preceding the Interest Payment Date on which the
        purchase occurs. The amount deposited pursuant to this subsection (iii)
        shall be paid to the Registered Owners on the related Interest Payment
        Date following the date of such deposit. All Series 2002A Notes which
        are purchased pursuant to this subsection (iii) shall be delivered by
        the Issuer upon such purchase to, and be canceled by, the Trustee and be
        disposed of in a manner satisfactory to the Trustee and the Issuer.

        (c) NOTICE OF REDEMPTION AND PURCHASE. The Trustee shall cause notice of
any redemption or purchase to be given by mailing a copy of the notice by
first-class mail to the Registered Owner of any Series 2002A Notes, and the
Auction Agent, designated for redemption or purchase in whole or in part, at
their address as the same shall last appear upon the registration books, in each
case not less than 15 days prior to the redemption or purchase date; provided,
however, that failure to give such notice, or any defect therein, shall not
affect the validity of any proceedings for the redemption or purchase date of
such Series 2002A Notes for which no such failure or defect occurs.

                                       6
<PAGE>

        (d)     PARTIAL REDEMPTION.

                (i) If less than all of the Series 2002A Notes are to be
        redeemed pursuant to Section 2.02(a) or 2.02(b) hereof, the Subclass of
        Series 2002A Notes to be redeemed shall be redeemed as directed by an
        Issuer Order. If less than all of the Series 2002A Notes of any Stated
        Maturity of any Subclass of the Series 2002A Notes are to be redeemed,
        the Series 2002A Notes of the same Stated Maturity to be redeemed shall
        be selected by lot in such manner as the Trustee shall determine.

                (ii) In case a Series 2002A Note is of a denomination larger
        than an Authorized Denomination, a portion of such Note (in an
        Authorized Denomination) may be redeemed. Upon surrender of any Series
        2002A Note for redemption in part only, the Issuer shall execute and the
        Trustee shall authenticate and deliver to the Registered Owner thereof,
        the cost of which shall be paid by the Issuer, a new Series 2002A Note
        or Series 2002A Notes of the same series, maturity and of authorized
        denominations, in an aggregate principal amount equal to the unredeemed
        portion of the Series 2002A Note surrendered.

        SECTION 2.03. DELIVERY OF SERIES 2002A NOTES. Upon the execution and
delivery of this Supplemental Indenture, the Issuer shall execute and deliver to
the Trustee and the Trustee shall authenticate the Series 2002A Notes and
deliver them to The Depository Trust Company and as hereinafter in this Section
provided.

        Prior to the delivery by the Trustee of any of the Series 2002A Notes,
there shall have been filed with or delivered to the Trustee the following:

                (a) A resolution duly adopted by the Issuer, certified by the
        Secretary or other Authorized Officer thereof, authorizing the execution
        and delivery of this Supplemental Indenture and the issuance of the
        Series 2002A Notes.

                (b) Duly executed copies of this Supplemental Indenture and a
        copy of the Indenture.

                (c) Rating letters from each Rating Agency pursuant to Section
        2.08(b)(ii) of the Original Indenture.

                (d) An opinion of Note Counsel pursuant to Section 2.08(b)(iii)
        of the Original Indenture.

        SECTION 2.04. TRUSTEE'S AUTHENTICATION CERTIFICATE. The Trustee's
authentication certificate upon the Series 2002A Notes shall be substantially in
the form provided in Exhibit A hereto. No Series 2002A Note shall be secured
hereby or entitled to the benefit hereof, or shall be valid or obligatory for
any purpose, unless a certificate of authentication, substantially in such form,
has been duly executed by the Trustee; and such certificate of the Trustee upon

                                       7
<PAGE>

any Series 2002A Note shall be conclusive evidence and the only competent
evidence that such Note has been authenticated and delivered hereunder. The
Trustee's certificate of authentication shall be deemed to have been duly
executed by it if manually signed by an authorized officer of the Trustee, but
it shall not be necessary that the same person sign the certificate of
authentication on all of the Series 2002A Notes issued hereunder.

        SECTION 2.05. DEPOSIT OF SERIES 2002A NOTE PROCEEDS. Upon the issuance
and delivery of the Series 2002A Notes, the Trustee shall deposit the net
proceeds thereof (i.e., net of Underwriters' discount of $1,410,000):

                (a) an amount equal to $558,360,000 shall be deposited to the
        Acquisition Fund; and

                (b) an amount equal to $4,230,000 shall be deposited to the
        Reserve Fund.

        SECTION 2.06. FORMS OF SERIES 2002A NOTES. The Series 2002A Notes shall
be in substantially the form set forth in Exhibit A hereto, each with such
variations, omissions and insertions as may be necessary.

                                  ARTICLE III

                       AMENDMENT TO THE ORIGINAL INDENTURE

        The Definition of "Eligible Loan" in the Original Indenture is hereby
amended and restated in its entirety as follows:

               "ELIGIBLE LOAN" shall mean any loan made to finance
        post-secondary education that is (a) made under the Act; (b) insured by
        the Secretary of Health and Human Services pursuant to the Public Health
        Services Act; or (c) otherwise permitted to be acquired by the Issuer
        pursuant to its Program (provided a Rating Confirmation is received with
        respect thereto); provided, however, that if after any reauthorization
        or amendment of the Act loans authorized thereunder, including, without
        limitation, their benefits, any provisions, or the servicing thereof,
        are materially different from loans authorized prior to such
        reauthorization or amendment, such loans shall not constitute Eligible
        Loans unless a Rating Confirmation is obtained.

                                   ARTICLE IV

        SECTION 4.01. DATE OF EXECUTION. This Supplemental Indenture for
convenience and for the purpose of reference is dated as of March 1, 2002.

        SECTION 4.02. LAWS GOVERNING. It is the intent of the parties hereto
that this Supplemental Indenture shall in all respects be governed by the laws
of the State.

                                       8
<PAGE>

        SECTION 4.03. SEVERABILITY. If any covenant, agreement, waiver, or part
thereof in this Supplemental Indenture contained be forbidden by any pertinent
law or under any pertinent law be effective to render this Supplemental
Indenture invalid or unenforceable or to impair the lien hereof, then each such
covenant, agreement, waiver, or part thereof shall itself be and is hereby
declared to be wholly ineffective, and this Supplemental Indenture shall be
construed as if the same were not included herein.

        SECTION 4.04. EXHIBITS. The terms of the Exhibits attached to this
Supplemental Indenture are incorporated herein in all particulars.

                                   ARTICLE V

                           APPLICABILITY OF INDENTURE

        The provisions of the Indenture are hereby ratified, approved and
confirmed, except as otherwise expressly modified by this Supplemental
Indenture. The representations, warranties and covenants contained in the
Indenture (except as expressly modified herein) are hereby reaffirmed with the
same force and effect as if fully set forth herein and made again as of the date
hereof.

                                       9
<PAGE>

        IN WITNESS WHEREOF, the Issuer has caused this Supplemental Indenture to
be executed in its corporate name and behalf by its Secretary and Treasurer, and
the Trustee by its Vice President, to evidence its acceptance of the trusts
hereby created, has caused this Supplemental Indenture to be executed in its
corporate name and behalf, all in multiple counterparts, each of which shall be
deemed an original, and the Issuer and the Trustee have caused this Supplemental
Indenture to be dated as of the date herein above first shown, although actually
executed on the dates shown in the acknowledgments hereafter appearing.

                                           NELNET STUDENT LOAN CORPORATION-2

                                           By /s/ Jeffrey R. Noordhoek
                                              ----------------------------------
                                               Jeffrey R. Noordhoek
                                               Secretary and Treasurer

                                           ZIONS FIRST NATIONAL BANK, as Trustee

                                           By /s/ David W. Bata
                                              ----------------------------------
                                               David W. Bata
                                               Vice President

                                       10
<PAGE>

                                  APPENDIX A

                         CERTAIN TERMS AND PROVISIONS OF
                             THE AUCTION RATE NOTES

                                    ARTICLE I

                                   DEFINITIONS

        Except as provided below in this Section, all terms which are defined in
Article I of the Indenture and Article I of this Supplemental Indenture shall
have the same meanings, respectively, in this Appendix A as such terms are given
in the Indenture and Article I of this Supplemental Indenture. In addition, the
following terms shall have the following respective meanings:

        "ALL HOLD RATE" means the Applicable LIBOR Rate less .20%; provided,
that in no event shall the applicable All Hold Rate be greater than the
applicable Maximum Rate.

        "APPLICABLE LIBOR RATE" means, (a) for Auction Periods of 35 days or
less, One-Month LIBOR, (b) for Auction Periods of more than 35 days but less
than 91 days, Three-Month LIBOR, (c) for Auction Periods of more than 90 days
but less than 181 days, Six-Month LIBOR, and (d) for Auction Periods of more
than 180 days, One-Year LIBOR.

        "AUCTION" means the implementation of the Auction Procedures on an
Auction Date.

        "AUCTION AGENT" means the Initial Auction Agent under the Initial
Auction Agent Agreement unless and until a Substitute Auction Agent Agreement
becomes effective, after which "Auction Agent" shall mean the Substitute Auction
Agent.

        "AUCTION AGENT AGREEMENT" means the Initial Auction Agent Agreement
unless and until a Substitute Auction Agent Agreement is entered into, after
which "Auction Agent Agreement" shall mean such Substitute Auction Agent
Agreement.

        "AUCTION AGENT FEE" has the meaning set forth in the Auction Agent
Agreement.

        "AUCTION DATE" means, initially, April 22, 2002 with respect to the
Class 2002A-1 Notes, April 24, 2002 with respect to the Class 2002A-2 Notes,
April 29, 2002 with respect to the Class 2002A-3 Notes, May 1, 2002 with respect
to the Class 2002A-4 Notes, April 4, 2002 with respect to the Class 2002A-5
Notes, April 24, 2002 with respect to the Class 2002A-6 Notes and April 29, 2002
with respect to the Class 2002A-7 Notes, and thereafter, the Business Day
immediately preceding the first day of each Auction Period for each respective
Subclass, other than:

               (a) each Auction Period commencing after the ownership of the
        applicable Auction Rate Notes is no longer maintained in Book-entry Form
        by the Securities Depository;

<PAGE>

                (b) each Auction Period commencing after and during the
        continuance of a Payment Default; or

               (c) each Auction Period commencing less than two Business Days
        after the cure or waiver of a Payment Default.

Notwithstanding the foregoing, the Auction Date for one or more Auction Periods
may be changed pursuant to Section 2.02(h) of this Appendix A.

        "AUCTION RATE NOTES" means, collectively, the Series 2002A Notes.

        "AUCTION NOTE INTEREST RATE" means each variable rate of interest per
annum borne by an Auction Rate Note for each Auction Period and determined in
accordance with the provisions of Sections 2.01 and 2.02 of this Appendix A;
provided, however, that in the event of a Payment Default, the Auction Note
Interest Rate shall equal the applicable Non-Payment Rate; provided, further,
however that such Auction Note Interest Rate shall in no event exceed the lesser
of the Net Loan Rate and the Maximum Rate.

        "AUCTION PERIOD" means the Interest Period applicable to the Auction
Rate Notes during which time the Interest Rate is determined pursuant to Section
2.02(a) of this Appendix A, which Auction Period (after the Initial Period for
such Subclass) initially shall consist generally of 28 days for the Series 2002A
Notes, as the same may be adjusted pursuant to Section 2.02(g) of this Appendix
A.

        "AUCTION PERIOD ADJUSTMENT" means an adjustment to the Auction Period as
provided in Section 2.02(g) of this Appendix A.

        "AUCTION PROCEDURES" means the procedures set forth in Section 2.02(a)
of this Appendix A by which the Auction Rate is determined.

        "AUCTION RATE" means the rate of interest per annum that results from
implementation of the Auction Procedures and is determined as described in
Section 2.02(a)(iii)(B) of this Appendix A.

        "AUTHORIZED DENOMINATIONS" means $50,000 and any integral multiple
thereof.

        "AVAILABLE AUCTION RATE NOTES" has the meaning set forth in Section
2.02(a)(iii)(A)(1) of this Appendix A.

        "BID" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.

        "BID AUCTION RATE" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A.

        "BIDDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.

        "BOND EQUIVALENT YIELD" means, in respect of any security the rate for
which is quoted in THE WALL STREET JOURNAL on a bank discount basis, the "bond
equivalent yield" (expressed as a percentage) for such security which appears on
Telerate's United States Treasury and Money Market Composite Page 0223, rounded
up to the nearest one one-hundredth of one percent.

                                       A-1-2
<PAGE>

        "BOOK-ENTRY FORM" or "BOOK-ENTRY SYSTEM" means a form or system under
which (a) the beneficial right to principal and interest may be transferred only
through a book entry, (b) physical securities in registered form are issued only
to a Securities Depository or its nominee as registered owner, with the
securities "immobilized" to the custody of the Securities Depository, and (c)
the book entry is the record that identifies the owners of beneficial interests
in that principal and interest.

        "BROKER-DEALER" means, collectively, Banc of America Securities LLC and
J.P. Morgan Securities Inc., or any other broker or dealer (each as defined in
the Securities Exchange Act of 1934, as amended), commercial bank or other
entity permitted by law to perform the functions required of a Broker-Dealer set
forth in the Auction Procedures that (a) is a Participant (or an affiliate of a
Participant), (b) has been appointed as such by the Issuer pursuant to Section
2.02(f) of this Appendix A, and (c) has entered into a Broker-Dealer Agreement
that is in effect on the date of reference.

        "BROKER-DEALER AGREEMENT" means each agreement between the Auction Agent
and a Broker-Dealer, and approved by the Issuer, pursuant to which the
Broker-Dealer agrees to participate in Auctions as set forth in the Auction
Procedures, as from time to time amended or supplemented. Each Broker-Dealer
Agreement shall be in substantially the form of the Broker-Dealer Agreements,
each dated as of March 1, 2002, among the Issuer, Bankers Trust Company, as
Auction Agent, and the Broker-Dealers.

        "BROKER-DEALER FEE" has the meaning set forth in the Auction Agent
Agreement.

        "BROKER-DEALER FEE RATE" has the meaning set forth in the Auction Agent
Agreement.

        "BUSINESS DAY" means any day other than April 14 and 15, December 30 and
31, a Saturday, Sunday, holiday or day on which banks located in the City of New
York, New York, or the New York Stock Exchange, the Trustee or the Auction
Agent, are authorized or permitted by law or executive order to close or such
other date as may be agreed to in writing by the Auction Agent, the
Broker-Dealers and the Issuer.

        "CARRY-OVER AMOUNT" means the excess, if any, of (a) the amount of
interest on an Auction Rate Note that would have accrued with respect to the
related Interest Period at the applicable Auction Rate over (b) the amount of
interest on such Auction Rate Note actually accrued with respect to such Auction
Rate Note with respect to such Interest Period based on the Net Loan Rate,
together with the unreduced portion of any such excess from prior Interest
Periods; provided that any reference to "principal" or "interest" in the
Supplemental Indenture and in this Appendix A and the Auction Rate Notes shall
not include within the meanings of such words any Carry-over Amount or any
interest accrued on any Carry-over Amount.

        "CLOSING DATE" means the Date of Issuance of the Auction Rate Notes
(March 27, 2002).

        "EFFECTIVE INTEREST RATE" means, with respect to any Financed Eligible
Loan, the interest rate per annum payable by the borrower as of the last day of
the calendar quarter borne by such Financed Eligible Loan after giving effect to

                                      A-1-3
<PAGE>

any reduction in such interest rate pursuant to borrower incentives, (a) less
all accrued rebate fees on such Financed Eligible Loan constituting
Consolidation Loans paid during such calendar quarter expressed as a percentage
per annum and (b) plus all accrued Interest Benefit Payments and Special
Allowance Payments applicable to such Financed Eligible Loan during such
calendar quarter expressed as a percentage per annum.

        "ELIGIBLE CARRY-OVER MAKE-UP AMOUNT" means, with respect to each
Interest Period relating to the Auction Rate Notes as to which, as of the first
day of such Interest Period, there is any unpaid Carry-over Amount, an amount
equal to the lesser of (a) interest computed on the principal balance of the
Auction Rate Notes in respect to such Interest Period at a per annum rate equal
to the excess, if any, of the Net Loan Rate over the Auction Rate, together with
the unreduced portion of any such excess from prior Interest Periods and (b) the
aggregate Carry-over Amount remaining unpaid as of the first day of such
Interest Period together with interest accrued and unpaid thereon through the
end of such Interest Period.

        "EXISTING OWNER" means (a) with respect to and for the purpose of
dealing with the Auction Agent in connection with an Auction, a Person who is a
Broker-Dealer listed in the Existing Owner Registry at the close of business on
the Business Day immediately preceding the Auction Date for such Auction and (b)
with respect to and for the purpose of dealing with the Broker-Dealer in
connection with an Auction, a Person who is a beneficial owner of Auction Rate
Notes.

        "EXISTING OWNER REGISTRY" means the registry of Persons who are owners
of the Auction Rate Notes, maintained by the Auction Agent as provided in the
Auction Agent Agreement.

        "HOLD ORDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.

        "INITIAL AUCTION AGENT" means Bankers Trust Company, a New York banking
corporation, its successors and assigns.

        "INITIAL AUCTION AGENT AGREEMENT" means, collectively, the Auction Agent
Agreement dated as of March 1, 2002, by and among the Issuer, the Trustee and
the Initial Auction Agent, including any amendment thereof or supplement
thereto.

        "INITIAL PERIOD" means, as to Auction Rate Notes, the period commencing
on the Closing Date and continuing through the day immediately preceding the
Initial Rate Adjustment Date for such Auction Rate Notes.

        "INITIAL RATE" means 2.05% for the Class 2002A-1 Notes, 2.05% for the
Class 2002A-2 Notes, 2.05% for the Class 2002A-3 Notes, 2.05% for the Class
2002A-4 Notes, 2.00% for the Class 2002A-5 Notes, 2.03% for the Class 2002A-6
Notes and 2.03% for the Class 2002A-7 Notes.

        "INITIAL RATE ADJUSTMENT DATE" means, with respect to the Class 2002A-1
Notes, April 23, 2002; with respect to the Class 2002A-2 Notes, April 25, 2002;
with respect to the Class 2002A-3 Notes, April 30, 2002; with respect to the
Class 2002A-4 Notes, May 2, 2002; with respect to the Class 2002A-5 Notes, April
5, 2002; with respect to the Class 2002A-6 Notes, April 25, 2002; and with
respect to the Class 2002A-7 Notes, April 30, 2002.

                                      A-1-4
<PAGE>

        "INTEREST PAYMENT DATE" means, with respect to the Auction Rate Notes,
the Business Day immediately following the expiration of the Initial Period for
such Subclass, and each related Auction Period thereafter.

        "INTEREST PERIOD" means, with respect to the Auction Rate Notes, the
Initial Period and each period commencing on an Interest Rate Adjustment Date
for such Subclass and ending on the day before (a) the next Interest Rate
Adjustment Date for such Subclass or (b) the Stated Maturity of such Subclass,
as applicable.

        "INTEREST RATE ADJUSTMENT DATE" means the date on which an Auction Note
Interest Rate is effective, and means, with respect to the Auction Rate Notes,
the date of commencement of each Auction Period.

        "INTEREST RATE DETERMINATION DATE" means, with respect to the Auction
Rate Notes, the Auction Date, or if no Auction Date is applicable to such
Subclass, the Business Day immediately preceding the date of commencement of an
Auction Period.

        "MAXIMUM RATE" means the least of (a) either (i) the Applicable LIBOR
Rate plus 1.50% (if the ratings assigned by the Rating Agency to the Auction
Rate Notes are "Aa3" and "AA-," respectively, or better) or (ii) the Applicable
LIBOR Rate plus 2.50% (if any one of the ratings assigned by the Rating Agency
to the Auction Rate Notes is less than "Aa3" or "AA-," respectively), (b) 18%
and (c) the highest rate the Issuer may legally pay, from time to time, as
interest on the Auction Rate Notes. For purposes of the Auction Agent and the
Auction Procedures, the ratings referred to in this definition shall be the last
ratings of which the Auction Agent has been given written notice pursuant to the
Auction Agent Agreement.

        "NET LOAN RATE" means, with respect to any Interest Period applicable to
the Auction Rate Notes, the greater of (a) the rate of interest per annum
(rounded to the next highest one one-hundredth of one percent) equal to the
applicable United States Treasury Security Rate plus 1.50% or (b) the rate of
interest per annum (rounded to the next highest one-hundredth of one percent)
equal to (i) the weighted average Effective Interest Rate of the Financed
Eligible Loans for the calendar quarter immediately preceding such Interest
Period, as determined by the Issuer on the last day of such calendar quarter,
less (ii) the Program Expense Percentage, as determined by the Issuer on the
last day of each calendar year. In making the determinations in (b)(i) and (ii)
of this definition of "Net Loan Rate," the Issuer shall take into account as an
increase to such Net Loan Rate the receipt of any Reciprocal Payment and as a
decrease to any Issuer Derivative Payment. The determinations made by the Issuer
in (b)(i) and (ii) of this definition of "Net Loan Rate" shall be given in
writing to the Auction Agent, the Trustee and the Broker-Dealers immediately
upon their respective calculation dates.

        "NON-PAYMENT RATE" means One-Month LIBOR plus 1.50%.

        "ONE-MONTH LIBOR," "THREE-MONTH LIBOR," "SIX-MONTH LIBOR" or "ONE-YEAR
LIBOR," means the offered rate, as determined by the Auction Agent or Trustee,
as applicable, of the Applicable LIBOR Based Rate for United States dollar
deposits which appears on Telerate Page 3750, as reported by Bloomberg Financial
Markets Commodities News (or such other page as may replace Telerate Page 3750
for the purpose of displaying comparable rates) as of approximately 11:00 a.m.,
London time, on the LIBOR Determination Date; provided, that if on any

                                      A-1-5
<PAGE>

calculation date, no rate appears on Telerate Page 3750 as specified above, the
Auction Agent or Trustee, as applicable, shall determine the arithmetic mean of
the offered quotations of four major banks in the London interbank market, for
deposits in United States dollars for the respective periods specified above to
the banks in the London interbank market as of approximately 11:00 a.m., London
time, on such calculation date and in a principal amount of not less than
$1,000,000 that is representative of a single transaction in such market and at
such time, unless fewer than two such quotations are provided, in which case,
the Applicable LIBOR Based Rate shall be the arithmetic mean of the offered
quotations that leading banks in New York City selected by the Auction Agent or
Trustee, as applicable, are quoting on the relevant LIBOR Determination Date for
loans in United States dollars to leading European banks in a principal amount
of not less than $1,000,000 that is representative of a single transaction in
such market at such time. All percentages resulting from such calculations shall
be rounded upwards, if necessary, to the nearest one-hundredth of one percent.

        "ORDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.

        "PAYMENT DEFAULT" means, with respect to the Auction Rate Notes, (a) a
default in the due and punctual payment of any installment of interest on such
Auction Rate Notes, or (b) a default in the due and punctual payment of any
interest on and principal of such Auction Rate Notes at their maturity.

        "POTENTIAL OWNER" means any Person (including an Existing Owner that is
(a) a Broker-Dealer when dealing with the Auction Agent and (b) a potential
beneficial owner when dealing with a Broker-Dealer) who may be interested in
acquiring Auction Rate Notes (or, in the case of an Existing Owner thereof, an
additional principal amount of Auction Rate Notes).

        "PROGRAM EXPENSE PERCENTAGE" means, the percentage that all Program
Expenses estimated for the next 12 months represent of the principal amount of
the Notes, which as of March 27, 2002 is 1.30%, and which the Issuer shall
calculate annually on the last day of each calendar year. Any adjustment in the
Program Expense Percentage shall be effective beginning on the first Interest
Rate Determination Date following each such calculation.

        "PSA" means the Public Securities Association, its successors and
assigns.

        "QUARTERLY AVERAGE AUCTION RATE" means the simple average of the Auction
Rates for the Auction Dates preceding the current Auction Date by 91 days or
less, including the current Auction Date.

        "QUARTERLY AVERAGE T-BILL RATE" means the simple average of the Bond
Equivalent Yields of 91-day Treasury bills auctioned in the 91 days preceding
(but not including) the current Auction Date.

        "REGULAR RECORD DATE" means the Business Day next preceding the
applicable Auction Date.

        "S&P" means Standard & Poor's Ratings Services, a Division of The
McGraw-Hill Companies, Inc., its successors and assigns.

                                      A-1-6
<PAGE>

        "SELL ORDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.

        "SUBMISSION DEADLINE" means 1:00 p.m., eastern time, on any Auction Date
or such other time on any Auction Date by which Broker-Dealers are required to
submit Orders to the Auction Agent as specified by the Auction Agent from time
to time.

        "SUBMITTED BID" has the meaning set forth in Section 2.02(a)(iii)(A) of
this Appendix A.

        "SUBMITTED HOLD ORDER" has the meaning set forth in Section
2.02(a)(iii)(A) of this Appendix A.

        "SUBMITTED ORDER" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A.

        "SUBMITTED SELL ORDER" has the meaning set forth in Section
2.02(a)(iii)(A) of this Appendix A.

        "SUBSTITUTE AUCTION AGENT" means the Person with whom the Issuer and the
Trustee enter into a Substitute Auction Agent Agreement.

        "SUBSTITUTE AUCTION AGENT AGREEMENT" means an auction agent agreement
containing terms substantially similar to the terms of the Initial Auction Agent
Agreement, whereby a Person having the qualifications required by Section
2.02(e) of this Appendix A agrees with the Trustee and the Issuer to perform the
duties of the Auction Agent under this Appendix A.

        "SUFFICIENT BIDS" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A.

        "UNITED STATES TREASURY SECURITY RATE" means, for purposes of
calculating the Net Loan Rate applicable to the Auction Rate Notes, that rate of
interest per annum equal to the Bond Equivalent Yield on the applicable United
States Treasury securities sold at the last auction thereof that immediately
precedes the Interest Rate Adjustment Date for the Auction Rate Notes.

        "VARIABLE RATE" means the variable rate of interest per annum, including
the Initial Rate, borne by each Subclass of Auction Rate Notes during the
Initial Period for such Subclass, and each Interest Period thereafter as such
rate of interest is determined in accordance with the provisions of Article II
of this Appendix A.

                                   ARTICLE II

                               TERMS AND ISSUANCE

        SECTION 2.01. AUCTION RATE AND CARRY-OVER AMOUNTS. During the Initial
Period, the Auction Rate Notes shall bear interest at the Initial Rate for such
Subclass. Thereafter, and except with respect to an Auction Period Adjustment,
the Auction Rate Notes shall bear interest at an Auction Note Interest Rate
based on a 28-day Auction Period for the Auction Rate Notes, as determined
pursuant to this Section 2.01 and Section 2.02 of this Appendix A.

                                      A-1-7
<PAGE>

        For the Auction Rate Notes during the Initial Period and each Auction
Period thereafter, interest at the applicable Auction Rate Notes Interest Rate
shall accrue daily and shall be computed for the actual number of days elapsed
on the basis of a year consisting of 360 days.

        The Auction Note Interest Rate to be borne by the Auction Rate Notes
after such Initial Period for each Auction Period until an Auction Period
Adjustment, if any, shall be determined as described below. Each such Auction
Period after the Initial Period shall commence on and include the day following
the expiration of the immediately preceding Auction Period and terminate on and
include the (i) Monday (unless such day is not a Business Day, in which case on
the next succeeding day that is followed by a Business Day) of the following
fourth week in the case of the Class 2002A-1 Notes, the Class 2002A-3 Notes and
the Class 2002A-7 Notes, (ii) Wednesday (unless such day is not a Business Day,
in which case on the next succeeding day that is followed by a Business Day) of
the following fourth week in the case of the Class 2002A-2 Notes, the Class
2002A-4 Notes and the Class 2002A-6 Notes and (iii) Thursday (unless such day is
not a Business Day, in which case on the next succeeding day that is followed by
a Business Day) of the following fourth week in the case of the Class 2002A-5
Notes; provided, however, that in the case of the Auction Period that
immediately follows the Initial Period for the Auction Rate Notes, such Auction
Period shall commence on the Initial Rate Adjustment Date. The Auction Note
Interest Rate of the Auction Rate Notes for each Auction Period shall be the
Auction Rate in effect for such Auction Period as determined in accordance with
Section 2.02(a) of this Appendix A. Notwithstanding the foregoing, if an Auction
is scheduled to occur for the next Auction Period on a date that was reasonably
expected to be a Business Day, but such Auction does not occur because such date
is later not considered to be a Business Day, the Auction shall nevertheless be
deemed to have occurred, and the applicable Auction Note Interest Rate in effect
for the next Auction Period will be the Auction Note Interest Rate in effect for
the preceding Auction Period and such Auction Period will generally be 28 days
in duration, beginning on the calendar day following the date of the deemed
Auction and ending on (and including) the applicable (i) Monday of the following
fourth week in the case of the Class 2002A-1 Notes, the Class 2002A-3 Notes and
the Class 2002A-7 Notes, (ii) Wednesday of the following fourth week in the case
of the Class 2002A-2 Notes, the Class 2002A-4 Notes and the Class 2002A-6 Notes
and (iii) Thursday of the following fourth week in the case of the Class 2002A-5
Notes (unless any such date is not followed by a Business Day, in which case on
the next succeeding day that is followed by a Business Day). If the preceding
Auction Period was other than generally 28 days in duration, the Auction Note
Interest Rate for the deemed Auction will instead be the rate of interest
determined by the applicable Broker-Dealer on equivalently rated auction
securities with a comparable length of auction period.

        Notwithstanding the foregoing:

               (a) if the ownership of an Auction Rate Note is no longer
        maintained in Book-entry Form, the Auction Note Interest Rate on the
        Auction Rate Notes for any Interest Period commencing after the delivery
        of certificates representing Auction Rate Notes pursuant to this
        Supplemental Indenture shall equal the lesser of (i) the Maximum Rate
        and (ii) the Net Loan Rate on the Business Day immediately preceding the
        first day of such subsequent Interest Period; or

                                      A-1-8
<PAGE>

               (b) if a Payment Default shall have occurred, the Auction Note
        Interest Rate on the Auction Rate Notes for the Interest Period
        commencing on or immediately after such Payment Default, and for each
        Interest Period thereafter, to and including the Interest Period, if
        any, during which, or commencing less than two Business Days after, such
        Payment Default is cured, shall equal the applicable Non-Payment Rate on
        the first day of each such Interest Period.

        In accordance with Section 2.02(a)(iii)(B) and (C) of this Appendix A,
the Auction Agent shall promptly give written notice to the Trustee and the
Issuer of each Auction Note Interest Rate (unless the Auction Note Interest Rate
is the applicable Non-Payment Rate) and the Maximum Rate when such rate is not
the Auction Note Interest Rate, applicable to the Auction Rate Notes. The
Trustee shall notify the Registered Owners and the Issuer of Auction Rate Notes
of the applicable Auction Note Interest Rate applicable to such Auction Rate
Notes for each Auction Period not later than the third Business Day of such
Auction Period. Notwithstanding any other provision of the Auction Rate Notes or
this Supplemental Indenture and except for the occurrence of a Payment Default,
interest payable on the Auction Rate Notes for an Auction Period shall never
exceed for such Auction Period the amount of interest payable at the applicable
Maximum Rate in effect for such Auction Period.

        If the Auction Rate for the Auction Rate Notes is greater than the Net
Loan Rate, then the Variable Rate applicable to such Auction Rate Notes for that
Interest Period will be the Net Loan Rate. If the Variable Rate applicable to
such Auction Rate Notes for any Interest Period is the Net Loan Rate, the
Trustee shall determine the Carry-over Amount, if any, with respect to such
Auction Rate Notes for such Interest Period. Such Carry-over Amount shall bear
interest calculated at a rate equal to One-Month LIBOR (as determined by the
Auction Agent, provided the Trustee has received notice of One-Month LIBOR from
the Auction Agent, and if the Trustee shall not have received such notice from
the Auction Agent, then as determined by the Trustee) from the Interest Payment
Date for the Interest Period with respect to which such Carry-over Amount was
calculated, until paid. Any payment in respect of Carry-over Amount shall be
applied, first, to any accrued interest payable thereon and, second, in
reduction of such Carry-over Amount. For purposes of this Supplemental Indenture
and this Appendix A, any reference to "principal" or "interest" herein shall not
include within the meaning of such words Carry-over Amount or any interest
accrued on any such Carry-over Amount. Such Carry-over Amount shall be
separately calculated for each Auction Rate Note by the Trustee during such
Interest Period in sufficient time for the Trustee to give notice to each
Registered Owner of such Carry-over Amount as required in the next succeeding
sentence. Not less than four days before the Interest Payment Date for an
Interest Period with respect to which such Carry-over Amount has been calculated
by the Trustee, the Trustee shall give written notice to each Registered Owner
the Auction Agent and the Issuer of the Carry-over Amount applicable to each
Registered Owner's Auction Rate Note, which written notice may accompany the
payment of interest by check made to each such Registered Owner on such Interest
Payment Date or otherwise shall be mailed on such Interest Payment Date by
first-class mail, postage prepaid, to each such Registered Owner at such
Registered Owner's address as it appears on the registration records maintained
by the Registrar. Such notice shall state, in addition to such Carry-over
Amount, that, unless and until an Auction Rate Note has been redeemed (other
than by optional redemption), after which all accrued Carry-over Amounts (and
all accrued interest thereon) that remains unpaid shall be canceled and no
Carry-over Amount (and interest accrued thereon) shall be paid with respect to

                                      A-1-9
<PAGE>

an Auction Rate Note, (a) the Carry-over Amount (and interest accrued thereon
calculated at a rate equal to One-Month LIBOR) shall be paid by the Trustee on
an Auction Rate Note on the earliest of (i) the date of defeasance of the
Auction Rate Notes or (ii) the first occurring Interest Payment Date (or on the
date of any such optional redemption) if and to the extent that (A) the Eligible
Carry-over Make-Up Amount with respect to such subsequent Interest Period is
greater than zero, and (B) moneys are available pursuant to the terms of the
Indenture in an amount sufficient to pay all or a portion of such Carry-over
Amount (and interest accrued thereon), and (b) interest shall accrue on the
Carry-over Amount at a rate equal to One-Month LIBOR until such Carry-over
Amount is paid in full or is cancelled.

        The Carry-over Amount (and interest accrued thereon) for Auction Rate
Notes shall be paid by the Trustee on Outstanding Auction Rate Notes on the
earliest of (a) the date of defeasance of any of the Auction Rate Notes or (b)
the first occurring Interest Payment Date if and to the extent that (i) the
Eligible Carry-over Make-Up Amount with respect to such Interest Period is
greater than zero, and (ii) on such Interest Payment Date there are sufficient
moneys in the Revenue Fund to pay all interest due on the Auction Rate Notes on
such Interest Payment Date. Any Carry-over Amount (and any interest accrued
thereon) on any Auction Rate Note which is due and payable on an Interest
Payment Date, which Auction Rate Note is to be redeemed (other than by optional
redemption) on said Interest Payment Date, shall be paid to the Registered Owner
thereof on said Interest Payment Date to the extent that moneys are available
therefor in accordance with the provisions of this Appendix A; provided,
however, that any Carry-over Amount (and any interest accrued thereon) which is
not yet due and payable on said Interest Payment Date shall be cancelled with
respect to said Auction Rate Note that is to be redeemed (other than by optional
redemption) on said Interest Payment Date and shall not be paid on any
succeeding Interest Payment Date. To the extent that any portion of the
Carry-over Amount (and any interest accrued thereon) remains unpaid after
payment of a portion thereof, such unpaid portion shall be paid in whole or in
part as required hereunder until fully paid by the Trustee on the earliest of
(a) the date of defeasance of any of the Auction Rate Notes or (b) the next
occurring Interest Payment Date or Dates, as necessary, if and to the extent
that the conditions in the second preceding sentence are satisfied. On any
Interest Payment Date on which the Trustee pays only a portion of the Carry-over
Amount (and any interest accrued thereon) on Auction Rate Notes, the Trustee
shall give written notice in the manner set forth in the immediately preceding
paragraph to the Registered Owner of such Auction Rate Note receiving such
partial payment of the Carry-over Amount remaining unpaid on such Auction Rate
Note.

        The Interest Payment Date or other date on which such Carry-over Amount
(or any interest accrued thereon) for Auction Rate Notes shall be paid shall be
determined by the Trustee in accordance with the provisions of the immediately
preceding paragraph, and the Trustee shall make payment of the Carry-over Amount
(and any interest accrued thereon) in the same manner as, and from the same Fund
from which, it pays interest on the Auction Rate Notes on an Interest Payment
Date. Any payment of Carry-over Amounts (and interest accrued thereon) shall
reduce the amount of Eligible Carry-Over Make-Up Amount.

                                      A-1-10
<PAGE>

        In the event that the Auction Agent no longer determines, or fails to
determine, when required, the Auction Note Interest Rate with respect to Auction
Rate Notes, or, if for any reason such manner of determination shall be held to
be invalid or unenforceable, the Auction Note Interest Rate for the next
succeeding Interest Period, which Interest Period shall be an Auction Period,
for Auction Rate Notes shall be the applicable Maximum Rate as determined by the
Auction Agent for such next succeeding Auction Period, and if the Auction Agent
shall fail or refuse to determine the Maximum Rate, the Maximum Rate shall be
determined by the securities dealer appointed by the Issuer capable of making
such a determination in accordance with the provisions of this Appendix A and
written notice of such determination shall be given by such securities dealer to
the Trustee.

        Section 2.02.  Auction Rate.

               (a) DETERMINING THE AUCTION RATE. By purchasing Auction Rate
        Notes, whether in an Auction or otherwise, each purchaser of the Auction
        Rate Notes, or its Broker-Dealer, must agree and shall be deemed by such
        purchase to have agreed (x) to participate in Auctions on the terms
        described herein, (y) to have its beneficial ownership of the Auction
        Rate Notes maintained at all times in Book-entry Form for the account of
        its Participant, which in turn will maintain records of such beneficial
        ownership and (z) to authorize such Participant to disclose to the
        Auction Agent such information with respect to such beneficial ownership
        as the Auction Agent may request.

               So long as the ownership of Auction Rate Notes is maintained in
        Book-entry Form by the Securities Depository, an Existing Owner may
        sell, transfer or otherwise dispose of Auction Rate Notes only pursuant
        to a Bid or Sell Order placed in an Auction or otherwise sell, transfer
        or dispose of Auction Rate Notes through a Broker-Dealer, provided that,
        in the case of all transfers other than pursuant to Auctions, such
        Existing Owner, its Broker-Dealer or its Participant advises the Auction
        Agent of such transfer. Auctions shall be conducted on each Auction
        Date, if there is an Auction Agent on such Auction Date, in the
        following manner:

                      (i)   (A)   Prior to the Submission Deadline on each
                                  Auction Date;

                                (1) each Existing Owner of Auction Rate Notes
                        may submit to a Broker-Dealer by telephone or otherwise
                        any information as to:

                                            a. the principal amount of
                                    Outstanding Auction Rate Notes, if any,
                                    owned by such Existing Owner which such
                                    Existing Owner desires to continue to own
                                    without regard to the Auction Note Interest
                                    Rate for the next succeeding Auction Period;

                                            b. the principal amount of
                                    Outstanding Auction Rate Notes, if any,
                                    which such Existing Owner offers to sell if
                                    the Auction Note Interest Rate for the next
                                    succeeding Auction Period shall be less than
                                    the rate per annum specified by such
                                    Existing Owner; and/or

                                      A-1-11
<PAGE>

                                            c. the principal amount of
                                    Outstanding Auction Rate Notes, if any,
                                    owned by such Existing Owner which such
                                    Existing Owner offers to sell without regard
                                    to the Auction Note Interest Rate for the
                                    next succeeding Auction Period;

                                    and

                                    (2) one or more Broker-Dealers may contact
                             Potential Owners to determine the principal amount
                             of Auction Rate Notes which each Potential Owner
                             offers to purchase, if the Auction Note Interest
                             Rate for the next succeeding Auction Period shall
                             not be less than the rate per annum specified by
                             such Potential Owner.

                             The statement of an Existing Owner or a Potential
                      Owner referred to in (1) or (2) of this paragraph (A) is
                      herein referred to as an "Order," and each Existing Owner
                      and each Potential Owner placing an Order is herein
                      referred to as a "Bidder"; an Order described in clause
                      (1)a is herein referred to as a "Hold Order"; an Order
                      described in clauses (1)b and (2) is herein referred to as
                      a "Bid"; and an Order described in clause (1)c is herein
                      referred to as a "Sell Order."

                             (B) (1) Subject to the provisions of Section
                             2.02(a)(ii) of this Appendix A, a Bid by an
                             Existing Owner shall constitute an irrevocable
                             offer to sell:

                                        a. the principal amount of Outstanding
                                Auction Rate Notes specified in such Bid if the
                                Auction Note Interest Rate determined as
                                provided in this Section 2.02(a) shall be less
                                than the rate specified therein; or

                                        b. such principal amount, or a lesser
                                principal amount of Outstanding Auction Rate
                                Notes to be determined as set forth in Section
                                2.02(a)(iv)(A)(4) of this Appendix A, if the
                                Auction Note Interest Rate determined as
                                provided in this Section 2.02(a) shall be equal
                                to the rate specified therein; or

                                        c. such principal amount, or a lesser
                                principal amount of Outstanding Auction Rate
                                Notes to be determined as set forth in Section
                                2.02(a)(iv)(B)(3) of this Appendix A, if the
                                rate specified therein shall be higher than the
                                applicable Maximum Rate and Sufficient Bids have
                                not been made.

                                    (2) Subject to the provisions of Section
                             2.02(a)(ii) of this Appendix A, a Sell Order by an
                             Existing Owner shall constitute an irrevocable
                             offer to sell:

                                      A-1-12
<PAGE>

                                        a. the principal amount of Outstanding
                                Auction Rate Notes specified in such Sell Order;
                                or

                                        b. such principal amount, or a lesser
                                principal amount of Outstanding Auction Rate
                                Notes set forth in Section 2.02(a)(iv)(B)(3) of
                                this Appendix A, if Sufficient Bids have not
                                been made.

                                    (3) Subject to the provisions of Section
                             2.02(a)(ii) of this Appendix A, a Bid by a
                             Potential Owner shall constitute an irrevocable
                             offer to purchase:

                                        a. the principal amount of Outstanding
                                Auction Rate Notes specified in such Bid if the
                                Auction Note Interest Rate determined as
                                provided in this Section 2.02(a) shall be higher
                                than the rate specified in such Bid; or

                                        b. such principal amount, or a lesser
                                principal amount of Outstanding Auction Rate
                                Notes set forth in Section 2.02(a)(iv)(A)(5) of
                                this Appendix A, if the Auction Note Interest
                                Rate determined as provided in this Section
                                2.02(a) shall be equal to the rate specified in
                                such Bid.

                      (ii) (A) Each Broker-Dealer shall submit in writing to the
                      Auction Agent prior to the Submission Deadline on each
                      Auction Date all Orders obtained by such Broker-Dealer and
                      shall specify with respect to each such Order:

                                (1)     the name of the Bidder placing such
                                        Order;

                                (2)     the aggregate principal amount of
                                        Auction Rate Notes that are the subject
                                        of such Order;

                                (3)     to the extent that such Bidder is an
                                        Existing Owner:

                                        a. the principal amount of Auction Rate
                                Notes, if any, subject to any Hold Order placed
                                by such Existing Owner;

                                        b. the principal amount of Auction Rate
                                Notes, if any, subject to any Bid placed by such
                                Existing Owner and the rate specified in such
                                Bid; and

                                        c. the principal amount of Auction Rate
                                Notes, if any, subject to any Sell Order placed
                                by such Existing Owner;

                             and

                                      A-1-13
<PAGE>

                                (4)     to the extent such Bidder is a Potential
                                        Owner, the rate specified in such
                                        Potential Owner's Bid.

                             (B) If any rate specified in any Bid contains more
                      than three figures to the right of the decimal point, the
                      Auction Agent shall round such rate up to the next higher
                      one thousandth of 1%.

                             (C) If an Order or Orders covering all Outstanding
                      Auction Rate Notes owned by an Existing Owner is not
                      submitted to the Auction Agent prior to the Submission
                      Deadline, the Auction Agent shall deem a Hold Order to
                      have been submitted on behalf of such Existing Owner
                      covering the principal amount of Outstanding Auction Rate
                      Notes owned by such Existing Owner and not subject to an
                      Order submitted to the Auction Agent.

                             (D) Neither the Issuer, the Trustee nor the Auction
                      Agent shall be responsible for any failure of a
                      Broker-Dealer to submit an Order to the Auction Agent on
                      behalf of any Existing Owner or Potential Owner.

                             (E) If any Existing Owner submits through a
                      Broker-Dealer to the Auction Agent one or more Orders
                      covering in the aggregate more than the principal amount
                      of Outstanding Auction Rate Notes owned by such Existing
                      Owner, such Orders shall be considered valid as follows
                      and in the following order of priority:

                                    (1) All Hold Orders shall be considered
                             valid, but only up to the aggregate principal
                             amount of Outstanding Auction Rate Notes owned by
                             such Existing Owner, and if the aggregate principal
                             amount of Auction Rate Notes subject to such Hold
                             Orders exceeds the aggregate principal amount of
                             Auction Rate Notes owned by such Existing Owner,
                             the aggregate principal amount of Auction Rate
                             Notes subject to each such Hold Order shall be
                             reduced pro rata so that the aggregate principal
                             amount of Auction Rate Notes subject to such Hold
                             Order equals the aggregate principal amount of
                             Outstanding Auction Rate Notes owned by such
                             Existing Owner.

                                    (2) a. Any Bid shall be considered valid up
                                    to an amount equal to the excess of the
                                    principal amount of Outstanding Auction Rate
                                    Notes owned by such Existing Owner over the
                                    aggregate principal amount of Auction Rate
                                    Notes subject to any Hold Order referred to
                                    in clause (A) of this paragraph (v);

                                      A-1-14
<PAGE>

                                            b. subject to subclause (1) of this
                                    clause (B), if more than one Bid with the
                                    same rate is submitted on behalf of such
                                    Existing Owner and the aggregate principal
                                    amount of Outstanding Auction Rate Notes
                                    subject to such Bids is greater than such
                                    excess, such Bids shall be considered valid
                                    up to an amount equal to such excess;

                                            c. subject to subclauses (1) and (2)
                                    of this clause (B), if more than one Bid
                                    with different rates are submitted on behalf
                                    of such Existing Owner, such Bids shall be
                                    considered valid first in the ascending
                                    order of their respective rates until the
                                    highest rate is reached at which such excess
                                    exists and then at such rate up to the
                                    amount of such excess; and

                                           d. in any such event, the amount of
                                   Outstanding Auction Rate Notes, if any,
                                   subject to Bids not valid under this clause
                                   (B) shall be treated as the subject of a Bid
                                   by a Potential Owner at the rate therein
                                   specified; and

                                    (3) All Sell Orders shall be considered
                             valid up to an amount equal to the excess of the
                             principal amount of Outstanding Auction Rate Notes
                             owned by such Existing Owner over the aggregate
                             principal amount of Auction Rate Notes subject to
                             Hold Orders referred to in clause (1) of this
                             paragraph (v) and valid Bids referred to in clause
                             (2) of this paragraph (E).

                             (F) If more than one Bid for Auction Rate Notes is
                      submitted on behalf of any Potential Owner, each Bid
                      submitted shall be a separate Bid with the rate and
                      principal amount therein specified.

                             (G) An Existing Owner that offers to purchase
                      additional Auction Rate Notes is, for purposes of such
                      offer, treated as a Potential Owner.

                             (H) Any Bid or Sell Order submitted by an Existing
                      Owner covering an aggregate principal amount of Auction
                      Rate Notes not equal to an Authorized Denomination shall
                      be rejected and shall be deemed a Hold Order. Any Bid
                      submitted by a Potential Owner covering an aggregate
                      principal amount of Auction Rate Notes not equal to an
                      Authorized Denomination shall be rejected.

                             (I) Any Bid specifying a rate higher than the
                      applicable Maximum Rate will (1) be treated as a Sell
                      Order if submitted by an Existing Owner and (2) not be
                      accepted if submitted by a Potential Owner.

                             (J) Any Order submitted in an Auction by a
                      Broker-Dealer to the Auction Agent prior to the Submission
                      Deadline on any Auction Date shall be irrevocable.

                                      A-1-15
<PAGE>

                      (iii) (A) Not earlier than the Submission Deadline on each
                      Auction Date, the Auction Agent shall assemble all valid
                      Orders submitted or deemed submitted to it by the
                      Broker-Dealers (each such Order as submitted or deemed
                      submitted by a Broker-Dealer being herein referred to
                      individually as a "Submitted Hold Order," a "Submitted
                      Bid" or a "Submitted Sell Order," as the case may be, or
                      as a "Submitted Order," and collectively as "Submitted
                      Hold Orders," "Submitted Bids" or "Submitted Sell Orders,"
                      as the case may be, or as "Submitted Orders") and shall
                      determine:

                                    (1) the excess of the total principal amount
                             of Outstanding Auction Rate Notes over the sum of
                             the aggregate principal amount of Outstanding
                             Auction Rate Notes subject to Submitted Hold Orders
                             (such excess being herein referred to as the
                             "Available Auction Rate Notes"), and

                                    (2)     from the Submitted Orders whether:

                                        a. the aggregate principal amount of
                                Outstanding Auction Rate Notes subject to
                                Submitted Bids by Potential Owners specifying
                                one or more rates equal to or lower than the
                                applicable Maximum Rate;

                             exceeds or is equal to the sum of:

                                        b. the aggregate principal amount of
                                Outstanding Auction Rate Notes subject to
                                Submitted Bids by Existing Owners specifying one
                                or more rates higher than the applicable Maximum
                                Rate; and

                                        c. the aggregate principal amount of
                                Outstanding Auction Rate Notes subject to
                                Submitted Sell Orders;

                             (in the event such excess or such equality exists,
                             other than because all of the Outstanding Auction
                             Rate Notes are subject to Submitted Hold Orders,
                             such Submitted Bids described in subclause a. above
                             shall be referred to collectively as "Sufficient
                             Bids"); and

                                    (3) if Sufficient Bids exist, the Bid
                             Auction Rate, which shall be the lowest rate
                             specified in such Submitted Bids such that if:

                                        a. (x) each Submitted Bid from Existing
                                Owners specifying such lowest rate and (y) all
                                other Submitted Bids from Existing Owners
                                specifying lower rates were rejected, thus
                                entitling such Existing Owners to continue to
                                own the principal amount of Auction Rate Notes
                                subject to such Submitted Bids; and

                                      A-1-16
<PAGE>

                                        b. (x) each such Submitted Bid from
                                Potential Owners specifying such lowest rate and
                                (y) all other Submitted Bids from Potential
                                Owners specifying lower rates were accepted;

                             the result would be that such Existing Owners
                             described in subclause a. above would continue to
                             own an aggregate principal amount of Outstanding
                             Auction Rate Notes which, when added to the
                             aggregate principal amount of Outstanding Auction
                             Rate Notes to be purchased by such Potential Owners
                             described in subclause b. above, would equal not
                             less than the Available Auction Rate Notes.

                             (B) Promptly after the Auction Agent has made the
                      determinations pursuant to Section 2.02(a)(iii)(A) of this
                      Appendix A, the Auction Agent shall advise the Trustee,
                      the Broker-Dealers and the Issuer of the Net Loan Rate,
                      Maximum Rate and the All Hold Rate and the components
                      thereof on the Auction Date and, based on such
                      determinations, the Auction Rate for the next succeeding
                      Interest Period as follows:

                                    (1) if Sufficient Bids exist, that the
                             Auction Rate for the next succeeding Interest
                             Period shall be equal to the Bid Auction Rate so
                             determined;

                                    (2) if Sufficient Bids do not exist (other
                             than because all of the Outstanding Auction Rate
                             Notes are subject to Submitted Hold Orders), that
                             the Auction Rate for the next succeeding Interest
                             Period shall be equal to the applicable Maximum
                             Rate; or

                                    (3) if all Outstanding Auction Rate Notes
                             are subject to Submitted Hold Orders, that the
                             Auction Rate for the next succeeding Interest
                             Period shall be equal to the applicable All Hold
                             Rate.

                             (C) Promptly after the Auction Agent has determined
                      the Auction Rate, the Auction Agent shall determine and
                      advise the Trustee of the Auction Note Interest Rate,
                      which rate shall be the lesser of (x) the Auction Rate and
                      (y) the Net Loan Rate; provided, however, that in no event
                      shall the Auction Note Interest Rate exceed the applicable
                      Maximum Rate.

                                      A-1-17
<PAGE>

                      (iv) Existing Owners shall continue to own the principal
               amount of Auction Rate Notes that are subject to Submitted Hold
               Orders. If the Net Loan Rate is equal to or greater than the Bid
               Auction Rate and if Sufficient Bids have been received by the
               Auction Agent, the Bid Auction Rate will be the Auction Note
               Interest Rate, and Submitted Bids and Submitted Sell Orders will
               be accepted or rejected and the Auction Agent will take such
               other action as described below in subparagraph (A).

                      If the Net Loan Rate is less than the Auction Rate, the
               Net Loan Rate will be the Auction Note Interest Rate. If the
               Auction Rate and the Net Loan Rate are both greater than the
               applicable Maximum Rate, the Auction Note Interest Rate shall be
               equal to the applicable Maximum Rate. If the Auction Agent has
               not received Sufficient Bids (other than because all of the
               Outstanding Auction Rate Notes are subject to Submitted Hold
               Orders), the Auction Note Interest Rate will be the lesser of the
               Net Loan Rate and the applicable Maximum Rate. In any of the
               cases described above, Submitted Orders will be accepted or
               rejected and the Auction Agent will take such other action as
               described below in subparagraph (B).

                             (A) If Sufficient Bids have been made and the Net
                      Loan Rate is equal to or greater than the Bid Auction
                      Rate, and if the applicable Maximum Rate does not apply
                      (in which case the Auction Note Interest Rate shall be the
                      Bid Auction Rate), all Submitted Sell Orders shall be
                      accepted and, subject to the provisions of clauses (4) and
                      (5) of this Section 2.02(a)(iv), Submitted Bids shall be
                      accepted or rejected as follows in the following order of
                      priority, and all other Submitted Bids shall be rejected:

                                    (1) Existing Owners' Submitted Bids
                             specifying any rate that is higher than the Auction
                             Note Interest Rate shall be accepted, thus
                             requiring each such Existing Owner to sell the
                             aggregate principal amount of Auction Rate Notes
                             subject to such Submitted Bids;

                                    (2) Existing Owners' Submitted Bids
                             specifying any rate that is lower than the Auction
                             Note Interest Rate shall be rejected, thus
                             entitling each such Existing Owner to continue to
                             own the aggregate principal amount of Auction Rate
                             Notes subject to such Submitted Bids;

                                    (3)     Potential  Owners'  Submitted Bids
                             specifying any rate that is lower than the Auction
                             Note  Interest  Rate shall be accepted;

                                      A-1-18
<PAGE>

                                    (4) Each Existing Owners' Submitted Bid
                             specifying a rate that is equal to the Auction Note
                             Interest Rate shall be rejected, thus entitling
                             such Existing Owner to continue to own the
                             aggregate principal amount of Auction Rate Notes
                             subject to such Submitted Bid, unless the aggregate
                             principal amount of Outstanding Auction Rate Notes
                             subject to all such Submitted Bids shall be greater
                             than the principal amount of Auction Rate Notes
                             (the "remaining principal amount") equal to the
                             excess of the Available Auction Rate Notes over the
                             aggregate principal amount of Auction Rate Notes
                             subject to Submitted Bids described in clauses (2)
                             and (3) of this Section 2.02(a)(iv)(D)(1), in which
                             event such Submitted Bid of such Existing Owner
                             shall be rejected in part, and such Existing Owner
                             shall be entitled to continue to own the principal
                             amount of Auction Rate Notes subject to such
                             Submitted Bid, but only in an amount equal to the
                             aggregate principal amount of Auction Rate Notes
                             obtained by multiplying the remaining principal
                             amount by a fraction, the numerator of which shall
                             be the principal amount of Outstanding Auction Rate
                             Notes owned by such Existing Owner subject to such
                             Submitted Bid and the denominator of which shall be
                             the sum of the principal amount of Outstanding
                             Auction Rate Notes subject to such Submitted Bids
                             made by all such Existing Owners that specified a
                             rate equal to the Auction Note Interest Rate,
                             subject to the provisions of Section 2.02(a)(iv)(D)
                             of this Appendix A; and

                                    (5) Each Potential Owner's Submitted Bid
                             specifying a rate that is equal to the Auction Note
                             Interest Rate shall be accepted, but only in an
                             amount equal to the principal amount of Auction
                             Rate Notes obtained by multiplying the excess of
                             the aggregate principal amount of Available Auction
                             Rate Notes over the aggregate principal amount of
                             Auction Rate Notes subject to Submitted Bids
                             described in clauses (2), (3) and (4) of this
                             Section 2.02(a)(iv)(A) by a fraction the numerator
                             of which shall be the aggregate principal amount of
                             Outstanding Auction Rate Notes subject to such
                             Submitted Bid and the denominator of which shall be
                             the sum of the principal amount of Outstanding
                             Auction Rate Notes subject to Submitted Bids made
                             by all such Potential Owners that specified a rate
                             equal to the Auction Note Interest Rate, subject to
                             the provisions of Section 2.02(a)(iv)(D) of this
                             Appendix A.

                             (B) If Sufficient Bids have not been made (other
                      than because all of the Outstanding Auction Rate Notes are
                      subject to submitted Hold Orders), or if the Net Loan Rate
                      is less than the Bid Auction Rate (in which case the
                      Auction Note Interest Rate shall be the Net Loan Rate) or
                      if applicable Maximum Rate applies, subject to the
                      provisions of Section 2.02(a)(iv)(D) of this Appendix A,
                      Submitted Orders shall be accepted or rejected as follows
                      in the following order of priority and all other Submitted
                      Bids shall be rejected:

                                      A-1-19
<PAGE>

                                    (1) Existing Owners' Submitted Bids
                             specifying any rate that is equal to or lower than
                             the Auction Note Interest Rate shall be rejected,
                             thus entitling such Existing Owners to continue to
                             own the aggregate principal amount of Auction Rate
                             Notes subject to such Submitted Bids;

                                    (2) Potential Owners' Submitted Bids
                             specifying (x) any rate that is equal to or lower
                             than the Auction Note Interest Rate shall be
                             accepted and (y) any rate that is higher than the
                             Auction Note Interest Rate shall be rejected; and

                                    (3) each Existing Owner's Submitted Bid
                             specifying any rate that is higher than the Auction
                             Note Interest Rate and the Submitted Sell Order of
                             each Existing Owner shall be accepted, thus
                             entitling each Existing Owner that submitted any
                             such Submitted Bid or Submitted Sell Order to sell
                             the Auction Rate Notes subject to such Submitted
                             Bid or Submitted Sell Order, but in both cases only
                             in an amount equal to the aggregate principal
                             amount of Auction Rate Notes obtained by
                             multiplying the aggregate principal amount of
                             Auction Rate Notes subject to Submitted Bids
                             described in clause (2)(x) of this Section
                             2.02(a)(iv)(B) by a fraction the numerator of which
                             shall be the aggregate principal amount of
                             Outstanding Auction Rate Notes owned by such
                             Existing Owner subject to such submitted Bid or
                             Submitted Sell Order and the denominator of which
                             shall be the aggregate principal amount of
                             Outstanding Auction Rate Notes subject to all such
                             Submitted Bids and Submitted Sell Orders.

                             (C) If all Auction Rate Notes are subject to
                      Submitted Hold Orders, all Submitted Bids shall be
                      rejected.

                             (D) If, as a result of the procedures described in
                      paragraph (A) or (B) of this Section 2.02(a)(iv), any
                      Existing Owner would be entitled or required to sell, or
                      any Potential Owner would be entitled or required to
                      purchase, a principal amount of Auction Rate Notes that is
                      not equal to an Authorized Denomination, the Auction Agent
                      shall, in such manner as in its sole discretion it shall
                      determine, round up or down the principal amount of
                      Auction Rate Notes to be purchased or sold by any Existing
                      Owner or Potential Owner so that the principal amount of
                      Auction Rate Notes purchased or sold by each Existing
                      Owner or Potential Owner shall be equal to an Authorized
                      Denomination.

                             (E) If, as a result of the procedures described in
                      paragraph (B) of this Section 2.02(a)(iv), any Potential
                      Owner would be entitled or required to purchase less than
                      an Authorized Denomination of Auction Rate Notes, the
                      Auction Agent shall, in such manner as in its sole
                      discretion it shall determine, allocate Auction Rate Notes
                      for purchase among Potential Owners so that only Auction
                      Rate Notes in Authorized Denominations are purchased by
                      any Potential Owner, even if such allocation results in
                      one or more of such Potential Owners not purchasing any
                      Auction Rate Notes.

                                      A-1-20
<PAGE>

                      (v) Based on the result of each Auction, the Auction Agent
               shall determine the aggregate principal amount of Auction Rate
               Notes to be purchased and the aggregate principal amount of
               Auction Rate Notes to be sold by Potential Owners and Existing
               Owners on whose behalf each Broker-Dealer submitted Bids or Sell
               Orders and, with respect to each Broker-Dealer, to the extent
               that such aggregate principal amount of Auction Rate Notes to be
               sold differs from such aggregate principal amount of Auction Rate
               Notes to be purchased, determine to which other Broker-Dealer or
               Broker-Dealers acting for one or more purchasers such
               Broker-Dealer shall deliver, or from which other Broker-Dealer or
               Broker-Dealers acting for one or more sellers such Broker-Dealer
               shall receive, as the case may be, Auction Rate Notes.

                      (vi) Any calculation by the Auction Agent or the Trustee,
               as applicable, of the Auction Note Interest Rate, the Maximum
               Rate, the All Hold Rate, the Net Loan Rate and the Non-Payment
               Rate shall, in the absence of manifest error, be binding on all
               other parties.

                      (vii) Notwithstanding anything in this Appendix A to the
               contrary, (A) no Auction for the Auction Rate Notes for an
               Auction Period of less than 180 days will be held on any Auction
               Date hereunder on which there are insufficient moneys in the
               Revenue Fund to pay, or otherwise held by the Trustee under the
               Indenture and available to pay, the principal of and interest due
               on the Auction Rate Notes on the Interest Payment Date
               immediately following such Auction Date, and (B) no Auction will
               be held on any Auction Date hereunder during the continuance of a
               Payment Default. The Trustee shall promptly notify the Auction
               Agent of any such occurrence.

               (b)  APPLICATION OF INTEREST PAYMENTS FOR THE AUCTION RATE NOTES.

                      (i) The Trustee shall determine not later than 2:00 p.m.,
               eastern time, on the Business Day next succeeding an Interest
               Payment Date, whether a Payment Default has occurred. If a
               Payment Default has occurred, the Trustee shall, not later than
               2:15 p.m., eastern time, on such Business Day, send a notice
               thereof in substantially the form of Exhibit C attached hereto to
               the Auction Agent by telecopy or similar means and, if such
               Payment Default is cured, the Trustee shall immediately send a
               notice in substantially the form of Exhibit D attached hereto to
               the Auction Agent by telecopy or similar means.

                      (ii) Not later than 2:00 p.m., eastern time, on each
               anniversary of the Closing Date, the Trustee shall pay to the
               Auction Agent, in immediately available funds out of amounts in
               the Revenue Fund, an amount equal to the Auction Agent Fee as set
               forth in the Auction Agent Agreement. Not later than 2:00 p.m.,
               eastern time, on each Auction Date, the Trustee shall pay to the
               Auction Agent, in immediately available funds out of amounts in

                                      A-1-21
<PAGE>
               the Revenue Fund, an amount equal to the Broker-Dealer Fee as
               calculated in the Auction Agent Agreement. The Trustee shall,
               from time to time at the request of the Auction Agent and at the
               direction of an Authorized Officer, reimburse the Auction Agent
               for its reasonable expenses as provided in the Auction Agent
               Agreement, such expenses to be paid out of amounts in the Revenue
               Fund.

               (c) CALCULATION OF MAXIMUM RATE, ALL HOLD RATE, NET LOAN RATE,
        APPLICABLE LIBOR RATE, AND NON-PAYMENT RATE. The Auction Agent shall
        calculate the applicable Maximum Rate, Net Loan Rate, Applicable LIBOR
        Rate, and All Hold Rate, as the case may be, on each Auction Date and
        shall notify the Trustee and the Broker-Dealers of the applicable
        Maximum Rate, Net Loan Rate, Applicable LIBOR Rate, and All Hold Rate,
        as the case may be, as provided in the Auction Agent Agreement;
        provided, that if the ownership of the Auction Rate Notes is no longer
        maintained in Book-entry Form, or if a Payment Default has occurred,
        then the Trustee shall determine the applicable Maximum Rate, Net Loan
        Rate, Applicable LIBOR Rate, All Hold Rate and Non-Payment Rate for each
        such Interest Period. If the ownership of the Auction Rate Notes is no
        longer maintained in Book-entry Form by the Securities Depository, the
        Trustee shall calculate the applicable Maximum Rate and the Net Loan
        Rate on the Business Day immediately preceding the first day of each
        Interest Period after the delivery of certificates representing the
        Auction Rate Notes pursuant to the Indenture. If a Payment Default shall
        have occurred, the Trustee shall calculate the Non-Payment Rate on the
        Interest Rate Determination Date for (i) each Interest Period commencing
        after the occurrence and during the continuance of such Payment Default
        and (ii) any Interest Period commencing less than two Business Days
        after the cure of any Payment Default. The determination by the Trustee
        or the Auction Agent, as the case may be, of the applicable Maximum
        Rate, Net Loan Rate, Applicable LIBOR Rate, All Hold Rate and
        Non-Payment Rate shall (in the absence of manifest error) be final and
        binding upon all parties. If calculated or determined by the Auction
        Agent, the Auction Agent shall promptly advise the Trustee of the
        applicable Maximum Rate, Net Loan Rate, Applicable LIBOR Rate, and All
        Hold Rate.

               (d)    NOTIFICATION OF RATES, AMOUNTS AND PAYMENT DATES.

                      (i) By 12:00 noon, eastern time, on the Business Day
               following each Regular Record Date, the Trustee shall determine
               the aggregate amounts of interest distributable on the next
               succeeding Interest Payment Date to the beneficial owners of
               Auction Rate Notes.

                      (ii) At least four days prior to any Interest Payment
               Date, the Trustee shall:

                             (A) confirm with the Auction Agent, so long as no
                      Payment Default has occurred and is continuing and the
                      ownership of the Auction Rate Notes is maintained in
                      Book-entry Form by the Securities Depository, (1) the date
                      of such next Interest Payment Date and (2) the amount
                      payable to the Auction Agent on the Auction Date pursuant
                      to Section 2.02(b)(ii) of this Appendix A;

                                      A-1-22
<PAGE>

                             (B) pursuant to Section 2.01 of this Appendix A,
                      advise the Registered Owners of a Subclass of Auction Rate
                      Notes of any Carry-over Amount accruing on such Auction
                      Rate Notes; and

                             (C) advise the Securities Depository, so long as
                      the ownership of the Auction Rate Notes is maintained in
                      Book-entry Form by the Securities Depository, upon
                      request, of the aggregate amount of interest distributable
                      on such next Interest Payment Date to the beneficial
                      owners of each Subclass of the Auction Rate Notes.

               If any day scheduled to be an Interest Payment Date shall be
        changed after the Trustee shall have given the notice or confirmation
        referred to in clause (i) of the preceding sentence, the Trustee shall,
        not later than 11:15 a.m., eastern time, on the Business Day next
        preceding the earlier of the new Interest Payment Date or the old
        Interest Payment Date, by such means as the Trustee deems practicable,
        give notice of such change to the Auction Agent, so long as no Payment
        Default has occurred and is continuing and the ownership of the Auction
        Rate Notes is maintained in Book-entry Form by the Securities
        Depository.

               (e)    AUCTION AGENT.

                      (i) Bankers Trust Company is hereby appointed as Initial
               Auction Agent to serve as agent for the Issuer in connection with
               Auctions. The Trustee and the Issuer will, and the Trustee is
               hereby directed to, enter into the Initial Auction Agent
               Agreement with Bankers Trust Company, as the Initial Auction
               Agent. Any Substitute Auction Agent shall be (A) a bank, national
               banking association or trust company duly organized under the
               laws of the United States of America or any state or territory
               thereof having its principal place of business in the Borough of
               Manhattan, New York, or such other location as approved by the
               Trustee in writing and having a combined capital stock or surplus
               of at least $50,000,000, or (B) a member of the National
               Association of Securities Dealers, Inc., having a capitalization
               of at least $50,000,000, and, in either case, authorized by law
               to perform all the duties imposed upon it hereunder and under the
               Auction Agent Agreement. The Auction Agent may at any time resign
               and be discharged of the duties and obligations created by this
               Appendix A by giving at least 90 days' notice to the Trustee,
               each Broker-Dealer and the Issuer. The Auction Agent may be
               removed at any time by the Trustee upon the written direction of
               an Authorized Officer or the Registered Owners of 51% of the
               aggregate principal amount of the Auction Rate Notes then
               Outstanding, and if by such Registered Owners, by an instrument
               signed by such Registered Owners or their attorneys and filed
               with the Auction Agent, the Issuer and the Trustee upon at least
               90 days' written notice. Neither resignation nor removal of the
               Auction Agent pursuant to the preceding two sentences shall be
               effective until and unless a Substitute Auction Agent has been
               appointed and has accepted such appointment. If required by the
               Issuer, a Substitute Auction Agent Agreement shall be entered
               into with a Substitute Auction Agent. Notwithstanding the
               foregoing, the Auction Agent may terminate the Auction Agent
               Agreement if, within 25 days after notifying the Trustee, each
               Broker-Dealer and the Issuer in writing that it has not received
               payment of any Auction Agent Fee due it in accordance with the
               terms of the Auction Agent Agreement, the Auction Agent does not
               receive such payment.

                                      A-1-23
<PAGE>

                      (ii) If the Auction Agent shall resign or be removed or be
               dissolved, or if the property or affairs of the Auction Agent
               shall be taken under the control of any state or federal court or
               administrative body because of bankruptcy or insolvency, or for
               any other reason, the Trustee at the direction of an Authorized
               Officer, shall use its best efforts to appoint a Substitute
               Auction Agent.

                      (iii) The Auction Agent is acting as agent for the Issuer
               in connection with Auctions. In the absence of bad faith,
               negligent failure to act or negligence on its part, the Auction
               Agent shall not be liable for any action taken, suffered or
               omitted or any error of judgment made by it in the performance of
               its duties under the Auction Agent Agreement and shall not be
               liable for any error of judgment made in good faith unless the
               Auction Agent shall have been negligent in ascertaining (or
               failing to ascertain) the pertinent facts.

               (f)    BROKER-DEALERS.

                       (i) The Auction Agent will enter into Broker-Dealer
               Agreements with Banc of America Securities LLC and J. P. Morgan
               Securities Inc. as the initial Broker-Dealers. An Authorized
               Officer may, from time to time, approve one or more additional
               persons to serve as Broker-Dealers under Broker-Dealer
               Agreements and shall be responsible for providing such
               Broker-Dealer Agreements to the Trustee and the Auction Agent.

                      (ii) Any Broker-Dealer may be removed at any time, at the
               request of an Authorized Officer, but there shall, at all times,
               be at least one Broker-Dealer appointed and acting as such.

               (g) CHANGES IN AUCTION PERIOD OR PERIODS AND CERTAIN PERCENTAGES.

                      (i) While any of the Auction Rate Notes are Outstanding,
               the Issuer may, from time to time, change the length of one or
               more Auction Periods (an "Auction Period Adjustment"), in order
               to conform with then current market practice with respect to
               similar securities or to accommodate economic and financial
               factors that may affect or be relevant to the length of the
               Auction Period and the interest rate borne by the Auction Rate
               Notes. The Issuer shall not initiate an Auction Period Adjustment
               unless it shall have received the written consent of the
               applicable Broker-Dealer, which consent shall not be unreasonably
               withheld, not later than nine days prior to the Auction Date for
               such Auction Period. The Issuer shall initiate the Auction Period
               Adjustment by giving written notice by Issuer Order to the
               Trustee, the Auction Agent, the applicable Broker-Dealer, each
               Rating Agency and the Securities Depository in substantially the
               form of, or containing substantially the information contained
               in, Exhibit E attached hereto at least 10 days prior to the
               Auction Date for such Auction Period.

                                      A-1-24
<PAGE>

                      (ii) Any such adjusted Auction Period shall not be less
               than 7 days nor more than 366 days.

                      (iii) An Auction Period Adjustment shall take effect only
               if (A) the Trustee and the Auction Agent receive, by 11:00 a.m.,
               eastern time, on the Business Day before the Auction Date for the
               first such Auction Period, an Issuer Certificate in substantially
               the form attached as, or containing substantially the same
               information contained in, Exhibit F attached hereto, authorizing
               the Auction Period Adjustment specified in such certificate along
               with a copy of the written consent of the applicable
               Broker-Dealer and, (B) Sufficient Bids exist as of the Auction on
               the Auction Date for such first Auction Period. If the condition
               referred to in (A) above is not met, the applicable Auction Note
               Interest Rate for the next Auction Period shall be determined
               pursuant to the above provisions of this Section 2.02 and the
               Auction Period shall be the Auction Period determined without
               reference to the proposed change. If the condition referred to in
               (A) is met but the condition referred in (B) above is not met,
               the applicable Auction Note Interest Rate for the next Auction
               Period shall be the applicable Maximum Rate and the Auction
               Period shall be the Auction Period determined without reference
               to the proposed change.

                      In connection with any Auction Period Adjustment, the
               Auction Agent shall provide such further notice to such parties
               as is specified in Section 2.03 of the Auction Agent Agreement.

               (h) CHANGES IN THE AUCTION DATE. The applicable Broker-Dealer,
        with the written consent of an Authorized Officer and, if applicable,
        upon receipt of the opinion of Note Counsel as required below, may
        specify an earlier Auction Date (but in no event more than five Business
        Days earlier) than the Auction Date that would otherwise be determined
        in accordance with the definition of "Auction Date" in Section 1.01 of
        this Appendix A with respect to one or more specified Auction Periods in
        order to conform with then current market practice with respect to
        similar securities or to accommodate economic and financial factors that
        may affect or be relevant to the day of the week constituting an Auction
        Date and the interest rate borne on the Auction Rate Notes. The
        applicable Broker-Dealer shall deliver a written request for consent to
        such change in the length of the Auction Date to the Issuer at least 14
        days prior to the effective date of such change. If the Issuer shall
        have delivered such written consent to the applicable Broker-Dealer,
        such Broker-Dealer shall provide notice of its determination to specify
        an earlier Auction Date for one or more Auction Periods by means of a
        written notice delivered at least 10 days prior to the proposed changed
        Auction Date to the Trustee, the Auction Agent, the Issuer, each Rating
        Agency and the Securities Depository. Such notice shall be substantially
        in the form of, or contain substantially the information contained in,
        Exhibit G attached hereto.

                                      A-1-25
<PAGE>

               In connection with any change described in this Section 2.02(h),
        the Auction Agent shall provide such further notice to such parties as
        is specified in Section 2.03 of the Auction Agent Agreement.

        SECTION 2.03. ADDITIONAL PROVISIONS REGARDING THE INTEREST RATES ON THE
AUCTION RATE NOTES. The determination of a Variable Rate by the Auction Agent or
any other Person pursuant to the provisions of the applicable Section of this
Article II shall be conclusive and binding on the Registered Owners of the
Auction Rate Notes to which such Variable Rate applies, and the Issuer and the
Trustee may rely thereon for all purposes.

        In no event shall the cumulative amount of interest paid or payable on
the Auction Rate Notes (including interest calculated as provided herein, plus
any other amounts that constitute interest on the Auction Rate Notes under
applicable law, which are contracted for, charged, reserved, taken or received
pursuant to the Auction Rate Notes or related documents) calculated from the
Date of Closing of the Auction Rate Notes through any subsequent day during the
term of the Auction Rate Notes or otherwise prior to payment in full of the
Auction Rate Notes exceed the amount permitted by applicable law. If the
applicable law is ever judicially interpreted so as to render usurious any
amount called for under the Auction Rate Notes or related documents or otherwise
contracted for, charged, reserved, taken or received in connection with the
Auction Rate Notes, or if the redemption or acceleration of the maturity of the
Auction Rate Notes results in payment to or receipt by the Registered Owner or
any former Registered Owner of the Auction Rate Notes of any interest in excess
of that permitted by applicable law, then, notwithstanding any provision of the
Auction Rate Notes or related documents to the contrary, all excess amounts
theretofore paid or received with respect to the Auction Rate Notes shall be
credited on the principal balance of the Auction Rate Notes (or, if the Auction
Rate Notes have been paid or would thereby be paid in full, refunded by the
recipient thereof), and the provisions of the Auction Rate Notes and related
documents shall automatically and immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
under the Auction Rate Notes and under the related documents.

                                      A-1-26
<PAGE>

                                    EXHIBIT A

                           FORM OF SERIES 2002A NOTES

        EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS GLOBAL NOTE MAY BE
TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES
DEPOSITORY (AS DEFINED IN THE INDENTURE) OR TO A SUCCESSOR SECURITIES DEPOSITORY
OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.

                        NELNET STUDENT LOAN CORPORATION-2
                         STUDENT LOAN ASSET-BACKED NOTE
                 SENIOR CLASS 2002A-[1] [2] [3] [4] [5] [6] [7]
                               AUCTION RATE NOTES

REGISTERED NO. R-__                                 REGISTERED $________________

     MATURITY DATE     INTEREST RATE     ORIGINAL ISSUE DATE          CUSIP NO.

      June 1, 2035        Variable          March 27, 2002           640314 ____

PRINCIPAL SUM: _________________________________________ AND 00/100 DOLLARS
REGISTERED OWNER: CEDE & CO.

        NELNET STUDENT LOAN CORPORATION-2, a corporation organized under the
corporation laws of the State of Nevada (the "Issuer," which term includes any
successor corporation under the Indenture of Trust, dated as of June 1, 2000 (as
previously amended, the "Original Indenture") and the Series 2002A Supplemental
Indenture of Trust dated as of March 1, 2002 (as amended, the "Series 2002A
Supplemental Indenture," and together with the Original Indenture, the
"Indenture"), each between the Issuer and Zions First National Bank, as trustee
(the "Trustee," which term includes any successor trustee under the Indenture))
for value received, hereby promises to pay to the Registered Owner (stated
above) or registered assigns, the Principal Sum of (stated above), but solely
from the revenues and receipts hereinafter specified and not otherwise, on the
Maturity Date specified above (subject to the right of prior redemption
hereinafter described), upon presentation and surrender of this note at the
Principal Office of the Trustee, as paying agent, trustee, authenticating agent
and registrar for the Notes, or a duly appointed successor paying agent, and to
pay interest in arrears on said Principal Sum, but solely from the revenues and
receipts hereinafter specified and not otherwise, to the Registered Owner hereof
from the most recent Interest Payment Date to which interest has been paid
hereon, until the payment of said principal sum in full.

        Any capitalized words and terms used as defined words and terms in this
note and not otherwise defined herein shall have the meanings given them in the
Indenture.

<PAGE>

        This note shall bear interest at an Auction Rate, all as determined in
Appendix A of the Series 2002A Supplemental Indenture.

        The principal of and interest on this note are payable in lawful money
of the United States of America. If the specified date for any payment of
principal or interest accrued to such specified date shall be a day other than a
Business Day then such payment may be made on the next succeeding Business Day,
with the same force and effect as if made on the specified date for such payment
without additional interest.

        Interest payable on this note shall be computed on the assumption that
each year contains 360 days and actual days elapsed.

        This note is one of a series of notes of the Issuer designated Student
Loan Asset-Backed Notes, Senior Class 2002A-[1][2][3][4][5][6][7] Auction Rate
Notes, dated the Original Issue Date, in the aggregate original principal amount
of $_______________ (the "Class 2002A-[1][2][3][4][5][6][7] Notes") which have
been authorized by the Issuer under a certain resolution, and issued by the
Issuer pursuant to the Indenture. The Issuer is, simultaneously with the Class
2002A-[1][2][3][4][5][6][7] Notes, issuing $_______________ of its Student Loan
Asset-Backed Notes, Senior Class 2002A Notes in six subclasses (together with
the Class 2002A-[1][2][3][4][5][6][7] Notes, the "Class 2002A Notes"). The
proceeds of such notes have been used by the Issuer, together with other moneys
of the Issuer, for the purpose of providing funds to finance the acquisition of
student loans, fund a reserve fund and to pay certain costs and expenses in
connection with the issuance of such notes. The Issuer has previously issued
$2,030,000,000 of its Student Loan Asset-Backed Notes pursuant to the terms of
the Indenture, consisting of $1,905,000,000 of Senior Class A Notes (the
"Outstanding Class A Notes," and together with the Class 2002A Notes, the "Class
A Notes") and $125,000,000 of Subordinate Class B Notes (the "Class B Notes").
The Indenture provides for the issuance of additional notes (the "Additional
Notes") which may be secured on a parity with or subordinate to the Class A
Notes or the Class B Notes as determined by the Issuer. The Class A Notes, the
Class B Notes and any Additional Notes are collectively referred to herein as
the "Notes."

        MANDATORY REDEMPTION, OPTIONAL REDEMPTION AND EXTRAORDINARY REDEMPTION.
This note is subject to mandatory redemption, optional redemption and
extraordinary redemption, all as described in the Indenture.

        OPTIONAL PURCHASE. The Issuer may purchase or cause to be purchased all
of the Series 2002A Notes on any Interest Payment Date on which the aggregate
current principal balance of the Series 2002A Notes shall be less than or equal
to 20% of the initial aggregate principal balance of the Series 2002A Notes on

                                       A-2
<PAGE>

the Date of Issuance, at a purchase price equal to the aggregate current
principal balance of such Series 2002A Notes, plus accrued interest on the
Series 2002A Notes through the day preceding the Interest Payment Date on which
the purchase occurs.

        NOTICE OF REDEMPTION OR PURCHASE. Notice of the call for redemption
shall be given by the Trustee by mailing a copy of the notice at least 15 days
prior to the redemption or purchase date to the Registered Owners of the Notes
to be redeemed in whole or in part at the address of such Registered Owner last
showing on the registration books. Failure to give such notice or any defect
therein shall not affect the validity of any proceedings for the redemption or
purchase of such Auction Rate Notes for which no such failure or defect occurs.
All Notes called for redemption or purchase will cease to bear interest after
the specified redemption or purchase date, provided funds for their payment are
on deposit at the place of payment at the time. If less than all Notes are to be
redeemed or purchased, Notes shall be selected for redemption or purchase as
provided in the Indenture.

        The Indenture provides that the Issuer may enter into a derivative
product between the Issuer and a derivative provider (a "Reciprocal Payor"), as
originally executed and as amended or supplemented, or other interest rate hedge
agreement between the Issuer and a Reciprocal Payor, as originally executed and
as amended or supplemented. Payments due to a Reciprocal Payor from the Issuer
pursuant to the applicable Derivative Product are referred to herein as "Issuer
Derivative Payments," and may be secured on a parity with any series of Bonds.

        The principal of and interest on the Class A Notes and any Additional
Notes issued on a parity with the Class A Notes and any Issuer Derivative
Payments secured on a parity with the Class A Notes are payable on a superior
basis to such payments on the Class B Notes and any Additional Notes issued on a
parity or subordinate to the Class B Notes; provided, however, that current
principal and interest may be paid on the Class B Notes and any Additional Notes
issued on a parity with the Class B Notes or subordinate to the Class B Notes if
all principal and interest payments due and owing at such time on the Class A
Notes and any Additional Notes issued on a parity with the Class A Notes and any
Issuer Derivative Payments secured on a parity with the Class A Notes have been
previously made or provided for as provided in the Indenture.

        Reference is hereby made to the Indenture, copies of which are on file
in the Principal Office of the Trustee, and to all of the provisions of which
any Registered Owner of this note by his acceptance hereof hereby assents, for
definitions of terms; the description of and the nature and extent of the
security for the Notes; the Issuer's student loan origination and acquisition
program; the revenues and other money pledged to the payment of the principal of
and interest on the Notes; the nature and extent and manner of enforcement of
the pledge; the conditions upon which the Indenture may be amended or
supplemented with or without the consent of the Registered Owners of the Notes
and any Reciprocal Payor; the rights and remedies of the Registered Owner hereof
with respect hereto and thereto, including the limitations upon the right of a
Registered Owner hereof to institute any suit, action, or proceeding in equity
or at law with respect hereto and thereto; the rights, duties, and obligations
of the Issuer and the Trustee thereunder; the terms and provisions upon which
the liens, pledges, charges, trusts, and covenants made therein may be
discharged at or prior to the stated maturity or earlier redemption of this
note, and this note thereafter shall no longer be secured by the Indenture or be
deemed to be Outstanding, as defined in the Indenture, thereunder; and for the
other terms and provisions thereof.

        THE NOTES ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM,
AND FURTHER SECURED BY, THE TRUST ESTATE, AS DEFINED IN THE INDENTURE.

                                       A-3
<PAGE>

        No recourse, either directly or indirectly, shall be had for the payment
of the principal of and interest on this note or any claim based hereon or in
respect hereof or of the Indenture, against the Trustee, or any incorporator,
director, officer, employee, or agent of the Issuer, nor against the State of
Nevada, or any official thereof, but the obligation to pay all amounts required
by the Indenture securing this note and the obligation to do and perform the
covenants and acts required of the Issuer therein and herein shall be and remain
the responsibility and obligation of said Issuer, limited as herein set forth.

        Subject to the restrictions specified in the Indenture, this note is
transferable on the Note Register kept for that purpose by the Trustee, as
registrar, upon surrender of this note for transfer at the principal office of
the Trustee, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Registered
Owner hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of the same series, Stated Maturity, of authorized denominations,
bearing interest at the same rate, and for the same aggregate principal amount
will be issued to the designated transferee or transferees. At the option of the
Registered Owner, any Note may be exchanged for other Notes in authorized
denominations upon surrender of the Note to be exchanged at the principal office
of the Trustee. Upon any such presentation for exchange, one or more new Notes
of the same series, Stated Maturity, in authorized denominations, bearing
interest at the same rate, and for the same aggregate principal amount as the
Note or Notes so surrendered will be issued to the Registered Owner of the Note
or Notes so surrendered; and the Note or Notes so surrendered shall thereupon be
cancelled by the Trustee.

        Notwithstanding the foregoing, so long as the ownership of the Notes is
maintained in book-entry form by The Depository Trust Company (the "Securities
Depository") or a nominee thereof, this note may be transferred in whole but not
in part only to the Securities Depository or a nominee thereof or to a successor
Securities Depository or its nominee.

        The Issuer, the Trustee, and any agent of either of them shall treat the
Person in whose name this note is registered as the Registered Owner hereof (a)
on the record date for purposes of receiving timely payment of interest hereon,
and (b) on the date of surrender of this note for purposes of receiving payment
of principal hereof at its stated maturity and (c) for all other purposes,
whether or not this note is overdue, and neither the Issuer, the Trustee, nor
any such agent shall be affected by notice to the contrary.

        To the extent permitted by the Indenture, modifications or alterations
of the Indenture and any supplemental indenture may be made with the consent of
less than all of the Registered Owners of the Notes then outstanding or without
the consent of any of such Registered Owners (by reason of a change in the Act
or Regulation or to cure ambiguities or conflicts), but such modification or
alteration is not permitted to affect the maturity date, Stated Maturity,
amount, Interest Payment Date, or rate of interest on any outstanding Notes or
affect the rights of the Registered Owners of less than all of the Notes
outstanding.

        The Registered Owner hereof shall not have the right to demand payment
of this note or any interest hereon out of funds raised or to be raised by
taxation.
                                       A-4
<PAGE>

        Any capitalized term used herein and not otherwise defined herein shall
have the same meaning ascribed to such term in the herein defined Indenture
unless the context shall clearly indicate otherwise.

        It is hereby certified and recited that all acts and things required by
the laws of the State of Nevada to happen, exist, and be performed precedent to
and in the issuance of this note, and the passage of said resolution and the
execution of said Indenture, have happened, exist and have been performed as so
required.

                                       A-5
<PAGE>

        IN TESTIMONY WHEREOF, the Board of Directors of NELNET STUDENT LOAN
CORPORATION-2 has caused this note to be executed by the manual or facsimile
signatures of the President and Secretary of the Issuer all as of the Original
Issue Date.

                                       NELNET STUDENT LOAN CORPORATION-2

                                       By
                                          --------------------------------------
                                          President

                                       By
                                          --------------------------------------
                                          Secretary

                                       A-6
<PAGE>

                          CERTIFICATE OF AUTHENTICATION

        This note is one of the Class 2002A-__ Notes designated therein and
described in the within-mentioned Indenture.

                                          ZIONS FIRST NATIONAL BANK, as Trustee

                                          By
                                             ----------------------------------
                                             Authorized Signatory

Authentication Date:

---------------------------------

                                       A-7
<PAGE>

                                   ASSIGNMENT

        FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto __________ (Social Security or other identifying number __________) the
within note and all rights thereunder and hereby irrevocably appoints __________
attorney to transfer the within note on the books kept for registration thereof,
with full power of substitution in the premises.

Dated:                        SIGNED:
       -----------------             ------------------------------------
                              NOTICE:  The  signature  on this  Assignment  must
                              correspond  with the name of the Registered  Owner
                              as it appears  on the face of the  within  note in
                              every particular.

Signature Guaranteed by:

----------------------------------
A Member of The New York Stock
Exchange or a State or National
Bank

                                       A-8
<PAGE>

                                    EXHIBIT B

                   SERIES 2002A CLOSING CASH FLOW PROJECTIONS

<PAGE>

                                    EXHIBIT C

                            NOTICE OF PAYMENT DEFAULT

                        NELNET STUDENT LOAN CORPORATION-2
                         STUDENT LOAN ASSET-BACKED NOTES
                                 CLASS 2002A-__
                         AUCTION RATE CERTIFICATE NOTES

        NOTICE IS HEREBY GIVEN that a Payment Default has occurred and is
continuing with respect to the Auction Rate Notes identified above. The next
Auction for the Auction Rate Notes will not be held. The Auction Rate for the
Auction Rate Notes for the next succeeding Interest Period shall be the
Non-Payment Rate.

                                         ZIONS FIRST NATIONAL BANK, as Trustee

Dated:                                   By
     -------------------                   ---------------------------------

<PAGE>

                                    EXHIBIT D

                        NOTICE OF CURE OF PAYMENT DEFAULT

                        NELNET STUDENT LOAN CORPORATION-2
                         STUDENT LOAN ASSET-BACKED NOTES
                                 CLASS 2002A-__
                         AUCTION RATE CERTIFICATE NOTES

        NOTICE IS HEREBY GIVEN that a Payment Default with respect to the
Auction Rate Notes identified above has been waived or cured. The next Interest
Payment Date is __________________________ and the Auction Date is
__________________________.

                                         ZIONS FIRST NATIONAL BANK, as Trustee

Dated:                                   By
     -----------------                      ------------------------------------

<PAGE>

                                    EXHIBIT E

                       NOTICE OF PROPOSED CHANGE IN LENGTH
                         OF ONE OR MORE AUCTION PERIODS

                        NELNET STUDENT LOAN CORPORATION-2
                         STUDENT LOAN ASSET-BACKED NOTES
                                 CLASS 2002A-__
                         AUCTION RATE CERTIFICATE NOTES

        Notice is hereby given that the Issuer proposes to change the length of
one or more Auction Periods pursuant to the Indenture of Trust, as amended (the
"Indenture") as follows:

        1. The change shall take effect on _______________, the Interest Rate
Adjustment Date for the next Auction Period (the "Effective Date").

        2. The Auction Period Adjustment in Paragraph 1 shall take place only if
(a) the Trustee and the Auction Agent receive, by 11:00 a.m., eastern time, on
the Business Day before the Auction Date for the Auction Period commencing on
the Effective Date, a certificate from the Issuer, as required by the Indenture
authorizing the change in length of one or more Auction Periods and (b)
Sufficient Bids exist on the Auction Date for the Auction Period commencing on
the Effective Date.

        3. If the condition referred to in (a) above is not met, the Auction
Rate for the Auction Period commencing on the Effective Date will be determined
pursuant to the Auction Procedures and the Auction Period shall be the Auction
Period determined without reference to the proposed change. If the condition
referred to in (a) is met but the condition referred to in (b) above is not met,
the Auction Rate for the Auction Period commencing on the Effective Date shall
be the Maximum Rate and the Auction Period shall be the Auction Period
determined without reference to the proposed change.

        4. It is hereby represented, upon advice of the Auction Agent for the
Class 2002A-__ Notes described herein, that there were Sufficient Bids for such
Class 2002A-__ Notes at the Auction immediately preceding the date of this
Notice.

        5. Terms not defined in this Notice shall have the meanings set forth in
the Indenture entered into in connection with the Class 2002A-__ Notes.

                                            NELNET STUDENT LOAN CORPORATION-2

Dated:                                      By
      -----------------------                  ---------------------------------

<PAGE>

                                    EXHIBIT F

                      NOTICE ESTABLISHING CHANGE IN LENGTH
                         OF ONE OR MORE AUCTION PERIODS

                        NELNET STUDENT LOAN CORPORATION-2
                         STUDENT LOAN ASSET-BACKED NOTES
                                 CLASS 2002A-__
                         AUCTION RATE CERTIFICATE NOTES

        Notice is hereby given that the Issuer hereby establishes new lengths
for one or more Auction Periods pursuant to the Indenture of Trust, as amended:

        1. The change shall take effect on _______________, the Interest Rate
Adjustment Date for the next Auction Period (the "Effective Date").

        2. For the Auction Period commencing on the Effective Date, the Interest
Rate Adjustment Date shall be _______________, or the next succeeding Business
Day if such date is not a Business Day.

        3. For Auction Periods occurring after the Auction Period commencing on
the Effective Date, the Interest Rate Adjustment Date shall be
[_______________(date) and every ______________(number) ______________(day of
week) thereafter] [every ______________(number) ______________(day of week)
after the date set forth in paragraph 2 above], or the next Business Day if any
such day is not a Business Day; provided, however, that the length of subsequent
Auction Periods shall be subject to further change hereafter as provided in the
Indenture of Trust.

        4. The changes described in paragraphs 2 and 3 above shall take place
only upon delivery of this Notice and the satisfaction of other conditions set
forth in the Indenture of Trust and our prior notice dated _______________
regarding the proposed change.

        5. Terms not defined in this Notice shall have the meanings set forth in
the Indenture of Trust relating to the Class 2002A-__ Notes.

                                         NELNET STUDENT LOAN CORPORATION-2

Dated:                                   By
      -----------------------               ------------------------------------

<PAGE>

                                    EXHIBIT G

                        NOTICE OF CHANGE IN AUCTION DATE

                        NELNET STUDENT LOAN CORPORATION-2
                         STUDENT LOAN ASSET-BACKED NOTES
                                 CLASS 2002A-__
                         AUCTION RATE CERTIFICATE NOTES

        Notice is hereby given by [ ], as Broker-Dealer for the Auction Rate
Notes, that with respect to the Auction Rate Notes, the Auction Date is hereby
changed as follows:

        1. With respect to Class 2002A-__ Notes, the definition of "Auction
Date" shall be deemed amended by substituting "_______________(number) Business
Day" in the second line thereof and by substituting "_______________(number)
Business Days" for "two Business Days" in subsection (d) thereof.

        2. This change shall take effect on _______________ which shall be the
Auction Date for the Auction Period commencing on _______________.

        3. The Auction Date for the Class 2002A-__ Notes shall be subject to
further change hereafter as provided in the Indenture of Trust.

        4. Terms not defined in this Notice shall have the meaning set forth in
the Indenture of Trust, as amended, relating to the Class 2002A-__ Notes.

                                        [BROKER-DEALER], as Broker-Dealer

Dated:                                  By
      -----------------------              -------------------------------------

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