AUCTION AGENT AGREEMENT

 

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                                                                     Exhibit 4.3

 

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                             AUCTION AGENT AGREEMENT

 

                                  by and among

 

                          EDUCATION LOANS INCORPORATED,

                                   as Issuer,

 

                         U.S. BANK NATIONAL ASSOCIATION,

                                   as Trustee,

 

                                       and

 

                      DEUTSCHE BANK TRUST COMPANY AMERICAS,

                                as Auction Agent

 

                                   ----------

 

                          Dated as of February 1, 2004

 

                                   ----------

 

                                   Relating to

 

                                  $462,000,000

                          EDUCATION LOANS INCORPORATED

                         STUDENT LOAN ASSET-BACKED NOTES

                    SENIOR SERIES 2004-A1, A2, A3, A4 and A5

                           SUBORDINATE SERIES 2004-B1

 

================================================================================

 

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                                TABLE OF CONTENTS

 

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Section 1.     Definitions and Rules of Construction...........................................................2

        1.1    Terms Defined by Reference to First Supplemental Indenture......................................2

        1.2    Terms Defined Herein............................................................................2

        1.3    Rules of Construction...........................................................................3

 

Section 2.     The Auction. ...................................................................................4

        2.1    Interest Rate on Series 2004-1 Notes; Incorporation by Reference of Auction

               Procedures and Settlement Procedures............................................................4

        2.2    Preparation of Each Auction; Maintenance of Existing Holder Registry............................4

        2.3    All Hold Rates, Maximum Auction Rates, Net Loan Rate, One-Month

               LIBOR and Three-Month LIBOR.....................................................................6

        2.4    Auction Schedule................................................................................7

        2.5    Changes in Auction Periods or Auction Date......................................................8

        2.6    Notice of Fee Rate Change.......................................................................9

        2.7    Notices to Existing Holders.....................................................................9

        2.8    Payment Default.................................................................................9

        2.9    Broker-Dealers.................................................................................10

        2.10   Access to and Maintenance of Auction Records...................................................10

 

Section 3.     Term of Agreement..............................................................................10

 

Section 4.     Trustee........................................................................................11

 

Section 5.     Representations and Warranties of the Trustee..................................................11

 

Section 6.     The Auction Agent..............................................................................12

        6.1    Duties and Responsibilities....................................................................12

        6.2    Rights of the Auction Agent....................................................................12

        6.3    Auction Agent's Disclaimer.....................................................................13

        6.4    Compensation, Remedies and Indemnification.....................................................13

        6.5    Compensation of the Broker-Dealers.............................................................14

 

Section 7.     Miscellaneous..................................................................................15

        7.1    Governing Law..................................................................................15

        7.2    Communications.................................................................................15

        7.3    Entire Agreement...............................................................................16

        7.4    Benefits.......................................................................................16

        7.5    Amendment; Waiver..............................................................................16

        7.6    Successors and Assigns.........................................................................16

        7.7    Severability...................................................................................16

        7.8    Execution in Counterparts......................................................................16

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Exhibits

 

Exhibit A   -- List of Initial Broker-Dealers for the Series 2004-1

Exhibit B   -- Broker-Dealer Agreement

Exhibit C   -- Notice of Ratings

Exhibit D   -- Notice of Series 2004-1 Notes Outstanding

Exhibit E   -- Notice of Fee Rate Change

Exhibit F   -- Notice of a Payment Default

Exhibit G   -- Settlement Procedures

Exhibit H   -- Notice of Continuation of Auction Period

Exhibit I   -- Notice of Series 2004-1 Note Auction Rate

 

                                      -ii-

 

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     THIS AUCTION AGENT AGREEMENT, dated as of February 1, 2004 (this "Auction

Agent Agreement"), is being entered into by and among EDUCATION LOANS

INCORPORATED, a Delaware corporation (together with any successors or assigns,

the "Issuer"), U.S. BANK NATIONAL ASSOCIATION, Minneapolis, Minnesota, a

national banking association duly established and existing under the laws of the

United States of America, as Trustee (together with any successors or assigns,

the "Trustee") under a certain First Supplemental Indenture of Trust, as

hereinafter defined and described, and DEUTSCHE BANK TRUST COMPANY AMERICAS, a

New York banking corporation (together with its successors and assigns, the

"Auction Agent"), acting not in its individual capacity but solely as agent for

the Issuer.

 

                              W I T N E S S E T H:

 

     WHEREAS, the Issuer proposes to cause the Trustee to authenticate and

deliver $462,000,000 aggregate principal amount of its Student Loan Asset-Backed

Notes, Series 2004-1, consisting of six series designated Student Loan

Asset-Backed Notes, Senior Series 2004-A1 (the "Series 2004-A1 Notes"), Student

Loan Asset-Backed Notes, Senior Series 2004-A2 (the "Series 2004-A2 Notes"),

Student Loan Asset-Backed Notes, Senior Series 2004-A3 (the "Series 2004-A3

Notes"), Student Loan Asset-Backed Notes, Senior Series 2004-A4 (the "Series

2004-A4 Notes"), Student Loan Asset-Backed Notes, Senior Series 2004-A5 (the

"Series 2004-A5 Notes"), and Student Loan Asset-Backed Notes, Subordinate Series

2004-B1 (the "Series 2004-B1 Notes" and, together with the Series 2004-A1 Notes,

the Series 2004-A2 Notes, the Series 2004-A3 Notes, the Series 2004-A4 Notes and

the Series 2004-A5 Notes, the " Series 2004-1 Notes"). The Series 2004-1 Notes

are being issued under the First Supplemental Indenture of Trust, dated as of

February 1, 2004 (the "First Supplemental Indenture"), by and between the Issuer

and the Trustee and executed pursuant to an Indenture of Trust, dated as of

February 1, 2004 (as amended and supplemented, the "Original Indenture"), by and

between the Trustee and the Issuer; and

 

     WHEREAS, pursuant to Section 8 of the First Supplemental Indenture, the

Auction Agent has been appointed to act in the capacities set forth in this

Auction Agent Agreement; and

 

     WHEREAS, the Trustee is entering into this Auction Agent Agreement at the

direction of the Issuer pursuant to the terms of the First Supplemental

Indenture;

 

     NOW, THEREFORE, in consideration of the premises and the mutual covenants

contained herein, the Issuer, the Trustee and the Auction Agent agree as

follows:

 

                                      -1-

 

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     Section 1. Definitions and Rules of Construction.

 

     1.1  Terms Defined by Reference to First Supplemental Indenture.

Capitalized terms used herein and not otherwise defined herein shall have the

meanings given such terms in the First Supplemental Indenture.

 

     1.2  Terms Defined Herein. As used herein and in the Settlement Procedures

(as defined below), the following terms shall have the following meanings,

unless the context otherwise requires:

 

     "Auction" shall have the meaning specified in Section 2.1 hereof.

 

     "Auction Agent Fee" shall have meaning specified in Section 6.4(b) hereof.

 

     "Auction Agent Fee Payment Date" shall mean each January 1, April 1, July 1

and October 1, commencing April 1, 2004.

 

     "Auction Agent Fee Rate" shall mean the rate per annum determined pursuant

to Section 6.4(b) hereof, as the same may be changed from time to time in

accordance with Section 6.4(b) hereof, at which the fee to be paid to the

Auction Agent for services rendered by it hereunder and under the Broker-Dealer

Agreements accrues pursuant to Section 6.4(b) hereof.

 

     "Auction Procedures" shall mean the provisions that are set forth in

Sections 4 through 11, inclusive, of the First Supplemental Indenture.

 

     "Authorized Auction Agent Officer" shall mean, with respect to the Auction

Agent, each Managing Director, Vice President, Assistant Vice President and

Associate of the Auction Agent and every other officer of the Auction Agent

assigned to its Trust & Securities Services Group and every other officer or

employee of the Auction Agent designated as an "Authorized Auction Agent

Officer" for purposes hereof in a communication to the Trustee and the Issuer.

 

     "Authorized Issuer Officer" shall mean, with respect to the Issuer, the

Chairman of the Board of Directors, the President, any Vice President or the

Secretary of the Issuer or any other person designated in writing by the Board

of Directors of the Issuer to the Auction Agent from time to time, which writing

may limit the functions which such other person may undertake as an Authorized

Issuer Officer hereunder.

 

     "Authorized Trustee Representative" shall mean each Vice President,

Assistant Vice President or Trust Officer in the Corporate Trust Department of

the Trustee and every other officer or employee of the Trustee designated as an

"Authorized Trustee Representative" for purposes hereof in a written

communication to the Auction Agent and the Issuer.

 

     "Broker-Dealer" shall mean a Person listed on Exhibit A hereto, as such

Exhibit A may be amended from time to time.

 

     "Broker-Dealer Agreement" shall mean each agreement between the Auction

Agent and a Broker-Dealer substantially in the form attached hereto as Exhibit

B.

 

                                      -2-

 

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     "Broker-Dealer Fee" shall have the meaning specified in Section 6.5(a)

hereof.

 

     "Broker-Dealer Fee Rate" shall have the meaning specified in Section 6.5(b)

hereof.

 

     "Business Day" shall mean a day of the year on which (i) banks located in

the city in which the Principal Office of the Trustee is located are not

required or authorized to remain closed, (ii) banks located in the city in which

the Principal Office of the Auction Agent, as set forth in Section 7.2 hereof,

is located are not required or authorized to remain closed, (iii) banks located

in the city in which the Principal Office of each Broker-Dealer, as set forth in

and for purposes of the applicable Broker-Dealer Agreement, is located are not

required or authorized to remain closed and (iv) The New York Stock Exchange is

not closed.

 

     "Existing Holder Registry" shall mean the register maintained by the

Auction Agent pursuant to Section 2.2 hereof.

 

     "Notice of Failure to Deliver or Make Payment" shall mean a notice

substantially in the form of Exhibit D to the Broker-Dealer Agreement.

 

     "Notice of Fee Rate Change" shall mean a notice substantially in the form

of Exhibit E hereof.

 

     "Notice of Payment Default" shall mean a notice substantially in the form

of Exhibit F hereto.

 

     "Notice of Ratings" shall mean a notice substantially in the form of

Exhibit C hereto.

 

     "Notice of Series 2004-1 Notes Outstanding" shall mean a notice

substantially in the form of Exhibit D hereto.

 

     "Notice of Transfer" shall mean a notice substantially in the form of

Exhibit C to the Broker-Dealer Agreement.

 

     "Participant" shall mean a member of, or participant in, the Securities

Depository.

 

     "Settlement Procedures" shall mean the Settlement Procedures attached as

Exhibit G hereto.

 

     1.3  Rules of Construction. Unless the context or use indicates another or

different meaning or intent, the following rules shall apply to the construction

of this Auction Agent Agreement:

 

          (a) Words importing the singular number shall include the plural

     number and vice versa.

 

          (b) The captions and headings herein are solely for convenience of

     reference and shall not constitute a part of this Auction Agent Agreement

     nor shall they affect its meaning, construction or effect.

 

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          (c) The words "hereof," "herein," "hereto" and other words of similar

     import refer to this Auction Agent Agreement as a whole.

 

          (d) All references herein to a particular time of day shall be to New

     York City time.

 

          (e) The rights and duties of the Trustee, the Auction Agent and the

     Issuer under this Auction Agent Agreement shall apply to the Series 2004-A1

     Notes, the Series 2004-A2 Notes, the Series 2004-A3 Notes, the Series

     2004-A4 Notes, the Series 2004-A5 Notes and the Series 2004-B1 Notes, but

     separately in each case. References to "Series 2004-1 Notes" shall, unless

     the context clearly contemplates a reference to all the Series 2004-1

     Notes, be deemed to refer only to a particular series of Series 2004-1

     Notes.

 

     Section 2. The Auction.

 

     2.1  Interest Rate on Series 2004-1 Notes; Incorporation by Reference of

Auction Procedures and Settlement Procedures.

 

          (a) During the Initial Interest Period, each of the Series 2004-A1

     Notes, the Series 2004-A2 Notes, the Series 2004-A3 Notes, the Series

     2004-A4 Notes, the Series 2004-A5 Notes and the Series 2004-B1 Notes shall

     bear interest at the Series 2004-1 Note Initial Interest Rate for such

     series. Thereafter, the Series 2004-1 Notes shall bear interest at the

     Series 2004-1 Note Interest Rate based on an Interest Period that shall be

     an Auction Period. The Series 2004-1 Note Auction Rate on each series of

     the Series 2004-1 Notes for each Auction Period shall be the lesser of (i)

     the Net Loan Rate and (ii) the Auction Rate determined in accordance with

     Sections 3 through 12 of the First Supplemental Indenture (not to exceed

     18% per annum). Pursuant to Section 8 of the First Supplemental Indenture,

     the Issuer has duly appointed Deutsche Bank Trust Company Americas as

     Auction Agent for purposes of the Auction Procedures and to perform such

     other obligations and duties as are herein set forth. Deutsche Bank Trust

     Company Americas hereby accepts such appointment and agrees that, on each

     Auction Date, it shall follow the procedures set forth in this Section 2

     and the Auction Procedures for the purpose of, among other things,

     determining the Auction Rate, and ultimately the Series 2004-1 Note Auction

     Rate for each series of the Series 2004-1 Notes for each Auction Period

     other than the Initial Interest Period. Each periodic operation of such

     procedures is hereinafter referred to as an "Auction."

 

          (b) All of the provisions contained in the Auction Procedures and the

     Settlement Procedures are incorporated herein by reference in their

     entirety and shall be deemed to be a part hereof to the same extent as if

     such provisions were fully set forth herein.

 

     2.2  Preparation of Each Auction; Maintenance of Existing Holder Registry.

 

          (a) A list of Broker-Dealers with respect to the Series 2004-1 Notes

     (showing RBC Dain Rauscher Inc. as the sole initial Broker-Dealer) is

     attached as Exhibit A to this Auction Agent Agreement. Not later than seven

     days prior to any Auction Date for which any change in such list of

     Broker-Dealers is to be effective, the Trustee, at the

 

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     direction of an Authorized Issuer Officer, will notify the Auction Agent in

     writing of such change and, if any such change is the addition of a

     Broker-Dealer to such list, shall cause to be delivered to the Auction

     Agent for execution by the Auction Agent a Broker-Dealer Agreement manually

     signed by such Broker-Dealer. The Auction Agent shall have entered into a

     Broker-Dealer Agreement with each Broker-Dealer prior to the participation

     of any such Broker-Dealer in any Auction.

 

          (b) In the event that any day that is scheduled to be an Auction Date

     shall be changed after the Auction Agent shall have given the notice of

     such Auction Date pursuant to clause (vii) of paragraph (a) of the

     Settlement Procedures, the Auction Agent, by such means as the Auction

     Agent deems practicable, shall give notice of such change to the

     Broker-Dealers not later than the earlier of 9:15 a.m., New York City time,

     on the new Auction Date and 9:15 a.m., New York City time, on the old

     Auction Date.

 

          (c)  (i) The Auction Agent shall maintain a current registry of

          Persons that are Broker-Dealers, compiled initially on the Closing

          Date as described below, and that hold Series 2004-1 Notes, for

          purposes of dealing with the Auction Agent in connection with an

          Auction (such registry being herein called the "Existing Holder

          Registry"). Such Persons shall constitute the "Existing Holders" for

          purposes of dealing with the Auction Agent in connection with an

          Auction. The Auction Agent shall indicate in the Existing Holder

          Registry for each Existing Holder the identity of the Broker-Dealer

          which submitted the most recent Order in any Auction which resulted in

          such Existing Holder continuing to hold or purchasing the Series

          2004-1 Notes. Pursuant to its Broker-Dealer Agreement, RBC Dain

          Rauscher Inc., as the sole initial Broker-Dealer with respect to the

          Series 2004-1 Notes, has agreed to provide to the Auction Agent on the

          Closing Date the names and addresses of the Persons who are to be

          initially listed on the Existing Holder Registry as constituting the

          initial Existing Holders of Series 2004-1 Notes for purposes of

          dealing with the Auction Agent in connection with an Auction. The

          Auction Agent may rely upon, as evidence of the identities of the

          Existing Holders, such list, the results of each Auction and notices

          from any Existing Holder, Participant of any Existing Holder or

          Broker-Dealer of any Existing Holder as described in Section

          2.2(c)(iii) hereof.

 

               (ii) The Trustee shall notify the Auction Agent when any notice

          of redemption is sent to the Securities Depository as the Holder of

          Series 2004-1 Notes not later than 11:00 a.m., New York City time, on

          the date such notice is sent. Such notice with respect to a redemption

          shall be substantially in the form of Exhibit D hereto, Notice of

          Series 2004-1 Notes Outstanding. In the event the Auction Agent

          receives from the Trustee written notice of any partial redemption of

          any Series 2004-1 Notes, the Auction Agent shall, at least two

          Business Days prior to the next Auction, request each Participant to

          disclose to the Auction Agent (upon selection by such Participant of

          the Existing Holders whose Series 2004-1 Notes are to be redeemed) the

          aggregate principal amount of such Series 2004-1 Notes of each such

          Existing Holder, if any, which are to be redeemed; provided the

          Auction Agent has been furnished with the name and telephone number of

          a person or department at such Participant from which it is to request

 

                                      -5-

 

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          such information. In the absence of receiving any such information

          with respect to any Existing Holder, from such Existing Holder's

          Participant or otherwise, the Auction Agent may continue to treat such

          Existing Holder as the beneficial owner of the principal amount of

          Series 2004-1 Notes shown in the Existing Holder Registry.

 

               (iii) The Auction Agent shall be required to register in the

          Existing Holder Registry a transfer of Series 2004-1 Notes from an

          Existing Holder to another Person only if such transfer is made to a

          Person through a Broker-Dealer and if (A) such transfer is pursuant to

          an Auction or (B) the Auction Agent has been notified in writing (1)

          in a notice substantially in the form of a Notice of Transfer by such

          Existing Holder, by the Participant of such Existing Holder or by the

          Broker-Dealer of such Existing Holder of such transfer, or (2) in a

          notice substantially in the form of a Notice of Failure to Deliver or

          Make Payment by the Broker-Dealer of any Person that purchased or sold

          Series 2004-1 Notes in an Auction of the failure of such Series 2004-1

          Notes to be transferred as a result of the Auction. The Auction Agent

          is not required to accept any Notice of Transfer or Notice of Failure

          to Deliver or Make Payment delivered prior to an Auction unless it is

          received by the Auction Agent by 3:00 p.m., New York City time, on the

          Business Day next preceding the applicable Auction Date.

 

          (d) The Auction Agent may request that the Broker-Dealers, as set

     forth in the Broker-Dealer Agreements, provide the Auction Agent with the

     aggregate principal amount of Series 2004-1 Notes held by such

     Broker-Dealers for purposes of the Existing Holder Registry, as well as

     with a list of their respective customers that such Broker-Dealers believe

     are Existing Holders of the Series 2004-1 Notes and the aggregate principal

     amount of Series 2004-1 Notes beneficially owned by each such customer.

     Except as permitted by Section 2.10 hereof, the Auction Agent shall keep

     confidential any such information and shall not disclose any such

     information so provided to any person other than the relevant

     Broker-Dealer, the Issuer and the Trustee, provided that the Auction Agent

     reserves the right to disclose any such information if it is advised by its

     counsel that its failure to do so would be unlawful or would expose the

     Auction Agent to liability, claim or damage for which the Auction Agent has

     not previously received indemnity reasonably satisfactory to it. The

     Auction Agent shall notify the Issuer, the Trustee and each Broker-Dealer

     promptly upon receipt of any request or demand to disclose such information

     and shall cooperate with any party seeking a protective order or similar

     relief.

 

          (e) The Auction Agent shall send by telecopy or other means a copy of

     any Notice of Series 2004-1 Notes Outstanding received from the Trustee to

     each Broker-Dealer in accordance with Section 4.3 of the applicable

     Broker-Dealer Agreement.

 

     2.3  All Hold Rates, Maximum Auction Rates, Net Loan Rate, One-Month LIBOR

and Three-Month LIBOR.

 

          (a) On each Auction Date, the Auction Agent shall determine the All

     Hold Rate, the Maximum Auction Rate and One-Month LIBOR or Three-Month

     LIBOR, as

 

                                      -6-

 

<PAGE>

 

     the case may be. The Net Loan Rate with respect to each Auction Date shall

     be determined and written notice thereof given to the Auction Agent in

     accordance with Section 6 of the First Supplemental Indenture. Not later

     than 9:30 a.m., New York City time, on each Auction Date, the Auction Agent

     shall notify the Trustee and the Broker-Dealers of the All Hold Rate, the

     Maximum Auction Rate, the Net Loan Rate and One-Month LIBOR or Three-Month

     LIBOR, as the case may be, so determined. On or within three Business Days

     after the Closing Date, the Issuer shall give written notice to the Auction

     Agent of the initial ratings on the Series 2004-1 Notes by Moody's and

     Fitch substantially in the form of the Notice of Ratings. Thereafter, if

     there is a change in one or both of such ratings, the Issuer shall give

     written notice to the Auction Agent substantially in the form of the Notice

     of Ratings within three Business Days of its receipt of notice of such

     change, but not later than the close of business on the Business Day

     immediately preceding an Auction Date if the Issuer has received written

     notice of such change in a rating or ratings prior to 12:00 noon, New York

     City time, on such Business Day, and the Auction Agent shall take into

     account such change in rating or ratings for purposes hereof and any

     Auction so long as such Notice of Ratings is received by the Auction Agent

     no later than the close of business on such Business Day.

 

          (b)  (i) If, on any Auction Date for an Auction Period, an Auction is

          not held for any reason, then the Series 2004-1 Note Auction Rate for

          the next succeeding Auction Period shall be the Net Loan Rate.

 

               (ii) If the ownership of the Series 2004-1 Notes is no longer

          maintained in Book-Entry Form by the Securities Depository, no further

          Auctions shall be held and the Series 2004-1 Note Auction Rate for

          each Interest Period commencing after the delivery of certificated

          Series 2004-1 Notes pursuant to Section 17 of the First Supplemental

          Indenture shall equal the lesser of the Net Loan Rate and the Maximum

          Auction Rate as determined by the Trustee on the Business Day

          immediately preceding the first day of such subsequent Interest Period

          as provided in Section 3 of the First Supplemental Indenture.

 

               (iii) If a Payment Default shall have occurred with respect to a

          series of Series 2004-1 Notes, the Series 2004-1 Note Auction Rate

          with respect to such series for each Interest Period commencing on or

          immediately after the occurrence of 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 Non-Payment Rate, as

          determined by the Trustee on the first day of such Interest Period as

          provided in Section 3 of the First Supplemental Indenture. The Series

          2004-1 Note Auction Rate for each Interest Period commencing at least

          two Business Days after any cure of a Payment Default shall be

          determined through implementation of the Auction Procedures.

 

     2.4  Auction Schedule. The Auction Agent shall conduct Auctions on the

Auction Date in accordance with the schedule set forth below. Such schedule may

be changed by the Auction Agent with the consent of the Trustee and the Market

Agent, which consent shall not be unreasonably withheld or delayed. The Auction

Agent shall give notice pursuant to Section 4.3

 

                                      -7-

 

<PAGE>

 

of the applicable Broker-Dealer Agreement of any such change to each

Broker-Dealer. Such notice shall be given prior to the first Auction Date on

which any such change shall be effective.

 

By 9:30 a.m.            The Auction Agent advises the Trustee and the

                        Broker-Dealers of the Maximum Auction Rate, the All Hold

                        Rate, the Net Loan Rate and One-Month LIBOR or

                        Three-Month LIBOR, as the case may be, to be used in

                        determining the Auction Rate under the Auction

                        Procedures, the First Supplemental Indenture and this

                        Auction Agent Agreement.

 

9:30 a.m.- 12:30 p.m.   The Auction Agent assembles information communicated to

                        it by Broker-Dealers as provided in Section 4(c)(i) of

                        the First Supplemental Indenture. The Submission

                        Deadline is 12:30 p.m., New York City time.

 

Not earlier than        The Auction Agent makes the determination pursuant to

12:30 p.m.              Section 4(c)(i) of the First Supplemental Indenture.

                        Submitted Bids and Submitted Sell Orders are accepted

                        and rejected in whole or in part and principal amount of

                        Series 2004-1 Notes is allocated as provided in Section

                        4(d) of the First Supplemental Indenture.

 

By approximately        The Auction Agent advises the Trustee and the

3:00 p.m./1/ or         Broker-Dealers of the results of the Auction as provided

4:00 p.m./2/            in Section 4(c)(ii) of the First Supplemental Indenture.

 

----------

/1/  If the Series 2004-1 Note Auction Rate is the Auction Rate.

/2/  If the Series 2004-1 Note Auction Rate is the Net Loan Rate.

 

     The Auction Agent shall follow the notification procedures set forth in

paragraph (a) of the Settlement Procedures.

 

     2.5  Changes in Auction Periods or Auction Date.

 

          (a) Changes in Auction Period or Periods.

 

               (i) The Auction Agent shall deliver any notice delivered to it

          pursuant to Section 10(a) of the First Supplemental Indenture to the

          Existing Holders within two Business Days of its receipt thereof.

 

               (ii) The Auction Agent shall deliver any certificate delivered to

          it pursuant to Section 10(c) of the First Supplemental Indenture to

          the Broker-

 

                                      -8-

 

<PAGE>

 

          Dealers not later than 3:00 p.m., New York City time, on the last

          Business Day preceding the next Auction Date by telecopy or similar

          means.

 

               (iii) If, after delivery to the Auction Agent of the notice

          referred to in Section 10(a) of the First Supplemental Indenture, the

          Auction Agent fails to receive the certificate referred to in Section

          10(c) of the First Supplemental Indenture by 11:00 a.m., New York City

          time, on the last Business Day preceding the next Auction Date, the

          Auction Agent shall deliver a notice of such failure in substantially

          the form of Exhibit H hereto to the Broker-Dealers not later than 3:00

          p.m., New York City time, on such Business Day by telecopy or other

          similar means.

 

               (iv) If, after delivery to the Auction Agent of the notice

          referred to in Section 10(a) and the certificate referred to in

          Section 10(c) of the First Supplemental Indenture, Sufficient Bids are

          not received by the Auction Agent by the Submission Deadline, the

          Auction Agent shall notify the Broker-Dealers not later than 3:00

          p.m., New York City time, on such Auction Date by telephone confirmed

          in writing in substantially the form of