6/04/03

YieldAuction Guidelines for State and Local Government Buyers and State and Local Government Sellers

Acknowledging Guidelines and Disclaimer:

Upon logging in to YieldAuction, Authorized Users acknowledge they have reviewed and accept Guidelines and Disclaimer, which are accessible via Guidelines and Disclaimer links on the YieldAuction Home Page. Any time an amendment to Guidelines and/or Disclaimer is posted, the date the amendment was posted will be displayed next to Guidelines and Disclaimer links.

Creating Approved Bidder List:

To create an Approved Bidder List, Sellers provide Grant Street Group with their general list of Approved Buyers. From this general list, Sellers may create one or multiple Approved Bidder Lists and may add or remove selected Approved Buyers from Approved Bidder Lists at any time. Sellers are solely responsible for maintaining Approved Bidder Lists.

Creating General Solicitations:

Sellers may solicit bids by creating a solicitation on their Solicitation Page. Sellers designate number of maturities to solicit, Open or Sealed auction, solicitation period, Minimum Rate (optional), amount solicited (in accordance with Amount Provisions), Minimum Bid (optional), settlement date, maturity date, type of Instruments, and Approved Buyers. Grant Street Group is available to assist Sellers with creating solicitations on their behalf. Sellers are solely responsible for the accuracy of the terms of their solicitations.

Creating Portfolio Solicitations:

Sellers may solicit bids for a portfolio of securities by creating a solicitation on their Solicitation Page. Sellers may solicit bids on an AON and/or MBM basis. For a portfolio, Sellers designate number of maturities, Open or Sealed auction, solicitation and bid submission periods, total proceeds, settlement date, Instruments, and Approved Buyers. For each maturity, Sellers designate amount solicited (in accordance with Amount Provisions) and maturity date. Grant Street Group is available to assist Sellers with creating solicitations on their behalf. Sellers are solely responsible for the accuracy of the terms of their solicitations.

Term Sheet for Portfolio Solicitation:

Sellers provide Grant Street Group with a Term Sheet for posting to the YieldAuction web site. Sellers are solely responsible for the accuracy of the Term Sheet.

Buyers are obligated to read and abide by the provisions of the Term Sheet.

Saving and Submitting Bids in Portfolio Solicitations:

Sellers may designate two phases for a portfolio solicitation period: (1) a first phase in which Buyers' bids may be saved only, and (2) a second phase in which Buyers may save or submit bids(the "Bid Submission Period"). Buyers may save bids without completing all inputs required for a submitted bid. On the Solicitation Page, Sellers may view saved bids; however, saved bids are not Eligible Bids and Buyers are not obligated to submit saved bids. To submit a bid, Buyers must input bids in accordance with the "Preparing and Submitting Bids" section below.

Preparing and Submitting Bids:

Buyers must complete the required inputs displayed on the Bid Page and must input bids in accordance with Amount Provisions, Rate Provisions, Price Provisions and Bid Limits in order to submit bids. For certain solicitations, Buyers are permitted to select a maturity date other than the one designated by Seller.

Verifying Bids:

Buyers submitting bids will have an opportunity to verify the terms of their bids and the Transaction Fee. Bids submitted in accordance with Guidelines herein become Eligible Bids. Buyers are obligated to honor submitted bids if accepted by Sellers, except as provided in the Award/Acknowledge Time Limits section herein.

Converting Bid Inputs:

To prioritize bids on Sellers' Solicitation Page, Buyers' rate inputs may be converted to another rate reflecting a common basis of comparison.

Instruments Solicited

Converted Rate

Any Instrument or combination of Instruments, excluding Agency CPN and T-Note/Bond/STRIPS

MMY

Agency CPN or T-Note/Bond/STRIPS in combination with any other Instrument or Instruments

IRR

Verifying CP Ratings:

Buyers and Sellers are solely responsible for verifying ratings of CP issues. Grant Street Group makes no representation regarding the accuracy of ratings of any CP issue displayed on YieldAuction.

Starting, Modifying and Canceling Solicitations:

Solicitations start in accordance with solicitation periods established by Sellers when creating solicitations. Sellers may modify solicitations up to the time the solicitation period begins; or, in the case of portfolio solicitations, Sellers may modify solicitations up to the time the Bid Submission Period begins. Sellers may cancel solicitations up to the time the solicitation period ends.

Sending Solicitation Alerts:

Creating, starting and modifying solicitations will automatically send Solicitation Alerts to Sellers' Approved Buyers.

Number of Bids:

In Sealed auctions, Buyers may submit any number of better and/or worse bids. In Open auctions, Buyers may submit better bids only, as provided in Prioritizing Bids section herein.

Prioritizing Bids:

Bids will be prioritized and Bid Status determined in one of two ways, as designated by Sellers: (1) by highest rate; that being equal, then by greatest amount; those both being equal, then by first bid received, or (2) by highest rate; that being equal, then by first bid received; those both being equal, then by amount.

Accepting or Rejecting Bids:

Sellers may elect to make automatic or discretionary awards. In either case, Sellers reserve the right to reject any or all bids at their sole discretion.

Automatic Awards:

Automatic awards are made to Buyers (in full or in part) based on Bid Status immediately after the solicitation period ends.

Discretionary Awards:

For discretionary awards, Sellers must promptly accept or reject bids once the solicitation period ends. Sellers may accept bids in full or in part (subject to Minimum Bid limits), at their discretion. Sellers are not obligated to accept bids with the highest rates and, except as provided in the paragraph below, they cannot accept an amount from any Buyer greater than that Buyer's bid amount.

For certain discretionary awards, Sellers may accept amounts from Buyers greater than their bid amounts, but not amounts greater than $1 million. In such solicitations, Buyers will be notified of this possibility before they bid.

For certain discretionary awards, Sellers may be subject to a time limit for accepting or rejecting bids, as provided in the Award/Acknowledge Time Limits section herein.

Acknowledging or Withdrawing Bids:

In Sealed auctions only, Buyers may withdraw their bids during the solicitation period.

In Sealed and Open auctions, once the solicitation period ends and upon Sellers' acceptance of bids, Buyers must acknowledge their bids, unless Buyers are subject to a time limit for acknowledging or withdrawing bids, as provided in the Award/Acknowledge Time Limits section herein. After Buyers acknowledge their bids, they may enter or revise their settlement instructions via the Settlement link.

Award/Acknowledge Time Limits:

Sellers and Buyers may be subject to a time limit, whereby Sellers have a specific amount of time to accept or reject bids (the "Award Period") and Buyers have a specific amount of time to acknowledge or withdraw bids (the "Acknowledge Period"). The particular period (i.e., Award Period or Acknowledge Period) and time remaining will be disclosed to Sellers on their Solicitation Page and to Buyers on their Bid Page.

Open and Sealed Auctions:

SELLER'S	BUYER'S
AWARD PERIOD	ACKNOWLEDGE PERIOD

Seller can accept	If Seller accepts during
or reject.	Award Period,
	Buyer can acknowledge
Buyer cannot	or withdraw during
withdraw.	Acknowledge Period.

If Seller rejects or allows	If Seller accepts during
Award Period to expire,	Award Period, and Buyer
there is no trade.	allows Acknowledge Period
	to expire (or withdraws),
	there is no trade.

When Sellers accept bids during Award Period, the Award Period immediately ends and Acknowledge Period begins.

Settlement:

Sellers and Buyers are responsible for settlement of transactions conducted on YieldAuction. Settlement information is provided on the Settlement Page and is accessible via the Settlement link. Sellers and Buyers are responsible for promptly providing settlement instructions and/or verifying the accuracy of such data on the Settlement Page. Grant Street Group assumes no responsibility for inaccuracies in settlement instructions.

Disclosing Results:

Buyers who submit bids or, in particular solicitations, Buyers who formally pass on solicitations, may see bidding results via the Results Archive link on their Bid Page. Results will be accessible after either (a) Sellers reject bids, or (b) Buyers acknowledge bids.

Sellers may elect to disclose to all bidders the identities of Buyers who submitted bids or passed.

Transaction Fee Disclosure and Payment:

Buyers awarded deposits will be charged a Transaction Fee. The Transaction Fee will be displayed to Buyers on the Verification Page (before their bid is transmitted to Sellers) and on the Settlement Page (after they have received an award).

Transaction Fees will be paid via Automated Clearing House ("ACH") debit two business days following the trade date. Completion of the ACH Debit Authorization on the Settlement Page represents Buyers' authorization to debit their account. Under certain circumstances, alternative payment arrangements can be made with the permission of Grant Street Group.

Definitions:

AON:

All-or-none, as distinct from maturity-by-maturity ("MBM").

Agency CPN:

Coupon securities issued by any of the following: (a) Federal Farm Credit Banks ("FFCB"), Federal Home Loan Banks ("FHLB"), Federal National Mortgage Association ("Fannie Mae"), Federal Home Loan Mortgage Corporation ("Freddie Mac"), Student Loan Marketing Association ("Sallie Mae"), or Tennessee Valley Authority ("TVA").

Agency DISC:

Discount securities issued by any of the following: (a) Federal Farm Credit Banks ("FFCB"), Federal Home Loan Banks ("FHLB"), Federal National Mortgage Association ("Fannie Mae"), Federal Home Loan Mortgage Corporation ("Freddie Mac"), Student Loan Marketing Association ("Sallie Mae"), or Tennessee Valley Authority ("TVA").

Agency INT:

Interest-bearing securities issued by Federal Farm Credit Banks ("FFCB"), which pay all interest at maturity.

Amount Provisions:

All amount inputs by Sellers and Buyers are either in millions (e.g. $50,000,000 is input as "50" or $50,123,456.78 is input as "50.12345678") or actual dollars (e.g. $50,000,000 is input as "50,000,000") as determined by Sellers and displayed on the Seller's Solicitation Page and the Buyer's Bid Page.

Approved Bidder List:

Seller's list of Approved Buyers.

Approved Buyer:

Buyer designated by Seller to receive Solicitation Alerts and permitted by Seller to bid on Seller's solicitations.

Authorized Users:

Registered users who bid or solicit on behalf of Buyers or Sellers.

Bid Limits:

One or more of the following limits established by Sellers and displayed on Buyer's Bid Pages: Minimum Rate, Maximum Amount, Minimum Bid and Increment.

Bid Status:

In an Open auction, the status of a Buyer's bid relative to other bids during an auction in accordance with the Prioritizing Bids Section herein. The Bid Status may be expressed as either: 1) the amount such bid is "In the Money", or 2) the rank order of such bid (i.e., 1^st, 2^nd, 3^rd, 4^th, etc.). Bid Status does not show rates or amounts submitted by other bidders, nor does it show identities of other bidders.

Buyers:

Authorized Users who submit bids for funds offered by Sellers.

CD (Neg):

Negotiable certificates of deposit held in book-entry form at Depository Trust Company.

CD (Non-Neg):

Non-negotiable certificates of deposit.

CP:

Commercial paper

Eligible Bids or Bids:

Bids submitted and verified by Buyers that meet Guidelines (i.e., bids eligible for acceptance by Sellers). The term "bid" or "bids" as used in these Guidelines means "Eligible Bid" or "Eligible Bids", unless otherwise noted (i.e., saved bids).

IRR:

Internal rate of return. IRR is that rate at which future cash receipts from interest payments and maturity amounts discounted back to the settlement date equal the initial amount of the investment.

Increment:

Minimum amount (or minimum multiple), by which Buyers' bid amount may exceed Minimum Bid, as designated by Sellers.

Instruments:

Means any of the following:

CD (Non-Neg),

CD (Neg),

Repo,

CP,

Agency DISC,

Agency CPN,

Agency INT,

T-Bill,

T-Note/Bond, or

STRIPS.

MBM:

Maturity-by-maturity, as distinct from all-or-none ("AON").

MMY:

Money market yield

Maximum Amount:

Maximum amount Buyers are permitted to submit, as designated by Sellers.

Minimum Bid:

The minimum amount Buyers may submit, as designated by Sellers. If no minimum amount is specified by Seller, Minimum Bid is $1,000.

Minimum Rate:

Minimum interest rate Buyers may submit, as designated by Sellers.

Open auctions:

Solicitations in which Buyers who submit bids can see their Bid Status.

Price Provisions:

All price inputs by Buyers should be expressed as a percentage, up to 1/100,000 of one percent (e.g., 99.12345%).

Rate Provisions:

All interest rate (and yield) inputs by Sellers and Buyers should be expressed as a percentage, up to 1/100,000 of one percent (e.g., 3.12345%).

Repo:

Repurchase Agreements

Sealed auctions:

Solicitations in which Buyers who submit bids cannot see their Bid Status.

Sellers:

Authorized Users who offer funds for sale.

Solicitation Alerts:

Electronic messages delivered to Approved Buyers via email or, for those logged into YieldAuction, via pop-up browser window, which contain summary information pertaining to particular solicitations and serve as an invitation to bid in response to Sellers' solicitations.

State and Local Government Sellers:

State and local government entities offering funds for sale.

State and Local Government Buyers:

Buyers of funds offered by State and Local Government Sellers.

STRIPS:

U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities)

T-Bill:

U. S. Treasury Bills

T-Note/Bond:

U. S. Treasury Notes or Bonds

Term Sheet:

Seller's official request for bids to Buyers which sets forth the terms and conditions of the solicitation for a portfolio of securities.

Transaction Fee:

Annualized fee based on the principal amount of the deposit awarded, payable to Grant Street Group, the Auction Administrator.