Exhibit 4.1




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                               INDENTURE OF TRUST


                                 by and between


                       NELNET EDUCATION LOAN FUNDING, INC.

                                       and


                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                                   as Trustee









                          Dated as of __________, 2003







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                       NELNET EDUCATION LOAN FUNDING, INC.


     Reconciliation and tie between Trust Indenture Act of 1939 and Indenture of
Trust dated as of __________, 2003.



          TRUST INDENTURE ACT SECTION            INDENTURE SECTION

        Section 310(a)(1)                                7.23
        310(a)(2)                                        7.23
        310(b)                                           7.23, 7.09
        Section 311(a)                                   7.08
        311(b)                                           7.08
        Section 312(b)                                   9.16
        312(c)                                           9.16
        Section 313(a)                                   4.16
        313(b)                                           4.16
        313(c)                                           4.16, 8.04
        Section 314(a)(1)                                4.17
        314(a)(2)                                        4.17
        314(a)(3)                                        4.17
        314(a)(4)                                        4.17
        314(c)                                           2.02, 5.09
        314(d)(1)                                        5.09
        Section 315(b)                                   8.04
        Section 317(a)(1)                                4.18
        317(a)(2)                                        7.24
        Section 318(a)                                   9.09
        318(c)                                           9.09

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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.


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                                TABLE OF CONTENTS



        (This Table of Contents is for convenience of reference only and is not
intended to define, limit or describe the purpose or intent of any provisions of
this Indenture of Trust.)

                                                                            PAGE


                                    Article I


DEFINITIONS AND USE OF PHRASES................................................3


                                   Article II

  NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF PROCEEDS OF NOTES

Section 2.01.     Note Details................................................14
Section 2.02.     Execution of Notes..........................................15
Section 2.03.     Registration, Transfer and Exchange of Notes; Persons
                  Treated as Registered Owners................................15
Section 2.04.     Lost, Stolen, Destroyed and Mutilated Notes.................16
Section 2.05.     Trustee's Authentication Certificate........................16
Section 2.06.     Cancellation and Destruction of Notes by the Trustee........16
Section 2.07.     Temporary Notes.............................................16
Section 2.08.     Issuance of Notes...........................................17

                                   Article III

     PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS; AND DERIVATIVE PRODUCTS

Section 3.01.     Parity and Priority of Lien.................................18
Section 3.02.     Other Obligations...........................................18
Section 3.03.     Derivative Products; Counterparty Payments; Issuer
                  Derivative Payments.........................................19

                                   Article IV

            PROVISIONS APPLICABLE TO THE NOTES; DUTIES OF THE ISSUER

Section 4.01.     Payment of Principal, Interest and Premium..................19
Section 4.02.     Representations and Warranties of the Issuer................19
Section 4.03.     Covenants as to Additional Conveyances......................19
Section 4.04.     Further Covenants of the Issuer.............................20
Section 4.05.     Enforcement of Servicing Agreements.........................21
Section 4.06.     Procedures for Transfer of Funds............................22


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Section 4.07.     Additional Covenants with Respect to the Act................22
Section 4.08.     Financed Eligible Loans; Collections Thereof;
                  Assignment Thereof..........................................23
Section 4.09.     Appointment of Agents, Etc..................................23
Section 4.10.     Capacity to Sue.............................................24
Section 4.11.     Continued Existence; Successor to Issuer....................24
Section 4.12.     Amendment of Student Loan Purchase Agreements...............24
Section 4.13.     Representations; Negative Covenants.........................24
Section 4.14.     Additional Covenants........................................30
Section 4.15.     Providing of Notice.........................................31
Section 4.16.     Reports by Issuer...........................................31
Section 4.17.     Statement as to Compliance..................................32
Section 4.18.     Collection of Indebtedness and Suits for Enforcement
                  by Trustee..................................................32
Section 4.19.     Representations of the Issuer Regarding the Trustee's
                  Security Interest...........................................33
Section 4.20.     Covenants of the Issuer Regarding the Trustee's Security
                  Interest....................................................34
Section 4.21.     Tax Treatment...............................................34
Section 4.22.     Opinions as to Indenture Trust Estate.......................34

                                    Article V

                                      FUNDS

Section 5.01.     Creation and Continuation of Funds and Accounts.............35
Section 5.02.     Acquisition/Redemption Fund.................................35
Section 5.03.     Collection Fund.............................................37
Section 5.04.     Reserve Fund................................................39
Section 5.05.     Operating Fund..............................................39
Section 5.06.     Transfers to Issuer.........................................40
Section 5.07.     Investment of Funds Held by Trustee.........................40
Section 5.08.     Investment Securities.......................................41
Section 5.09.     Release; Sale of Financed Eligible Loans....................44

                                   Article VI

                              DEFAULTS AND REMEDIES

Section 6.01.     Events of Default Defined...................................45
Section 6.02.     Remedy on Default; Possession of Trust Estate...............45
Section 6.03.     Remedies on Default; Advice of Counsel......................46
Section 6.04.     Remedies on Default; Sale of Trust Estate...................47
Section 6.05.     Appointment of Receiver.....................................47
Section 6.06.     Restoration of Position.....................................47
Section 6.07.     Purchase of Properties by Trustee or Registered Owners......48
Section 6.08.     Application of Sale Proceeds................................48
Section 6.09.     Accelerated Maturity........................................48
Section 6.10.     Remedies not Exclusive......................................48
Section 6.11.     Direction of Trustee........................................48
Section 6.12.     Right to Enforce in Trustee.................................49
Section 6.13.     Physical Possession of Obligations not Required.............49
Section 6.14.     Waivers of Events of Default................................49

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                                   Article VII

                                   THE TRUSTEE

Section 7.01.     Acceptance of Trust.........................................50
Section 7.02.     Recitals of Others..........................................51
Section 7.03.     As to Filing of Indenture...................................51
Section 7.04.     Trustee May Act Through Agents..............................51
Section 7.05.     Indemnification of Trustee..................................51
Section 7.06.     Trustee's Right to Reliance.................................52
Section 7.07.     Compensation of Trustee.....................................53
Section 7.08.     Trustee May Own Notes.......................................53
Section 7.09.     Resignation of Trustee......................................54
Section 7.10.     Removal of Trustee..........................................54
Section 7.11.     Successor Trustee...........................................54
Section 7.12.     Manner of Vesting Title in Trustee..........................55
Section 7.13.     Additional Covenants by the Trustee to Conform to the Act...55
Section 7.14.     Right of Inspection.........................................56
Section 7.15.     Limitation with Respect to Examination of Reports...........56
Section 7.16.     Servicing Agreement.........................................56
Section 7.17.     Additional Covenants of Trustee.............................56
Section 7.18.     Duty of Trustee with Respect to Rating Agencies.............56
Section 7.19.     Merger of the Trustee.......................................57
Section 7.20.     Receipt of Funds from Servicer..............................57
Section 7.21.     Special Circumstances Leading to Resignation of Trustee.....57
Section 7.22.     Survival of Trustee's Rights to Receive Compensation,
                  Reimbursement and Indemnification...........................57
Section 7.23.     Corporate Trustee Required; Eligibility; Conflicting
                  Interests...................................................58
Section 7.24.     Trustee May File Proofs of Claim............................58

                                  Article VIII

                             SUPPLEMENTAL INDENTURES

Section 8.01.     Supplemental Indentures Not Requiring Consent of
                  Registered Owners...........................................59
Section 8.02.     Supplemental Indentures Requiring Consent of
                  Registered Owners...........................................60
Section 8.03.     Additional Limitation on Modification of Indenture..........61
Section 8.04.     Notice of Defaults..........................................61
Section 8.05.     Conformity with the Trust Indenture Act.....................61

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                                   Article IX

                               GENERAL PROVISIONS

Section 9.01.     Notices.....................................................62
Section 9.02.     Covenants Bind Issuer.......................................63
Section 9.03.     Lien Created................................................63
Section 9.04.     Severability of Lien........................................63
Section 9.05.     Consent of Registered Owners Binds Successors...............63
Section 9.06.     Nonliability of Directors; No General Obligation............63
Section 9.07.     Nonpresentment of Notes or Interest Checks..................64
Section 9.08.     Security Agreement..........................................64
Section 9.09.     Laws Governing..............................................64
Section 9.10.     Severability................................................64
Section 9.11.     Exhibits....................................................64
Section 9.12.     Non-Business Days...........................................64
Section 9.13.     Parties Interested Herein...................................64
Section 9.14.     Obligations Are Limited Obligations.........................65
Section 9.15.     Counterparty Rights.........................................65
Section 9.16.     Disclosure of Names and Addresses of Registered Owners......65
Section 9.17.     Aggregate Principal Amount of Obligations...................65
Section 9.18.     Financed Eligible Loans.....................................65
Section 9.19.     No Petition.................................................65

                                    Article X

         PAYMENT AND CANCELLATION OF NOTES AND SATISFACTION OF INDENTURE

Section 10.01.    Trust Irrevocable...........................................65
Section 10.02.    Satisfaction of Indenture...................................66
Section 10.03.    Cancellation of Paid Notes..................................67

                                   Article XI

                                   TERMINATION

Section 11.01.    Termination of the Trust....................................67
Section 11.02.    Notice......................................................69

                                   Article XII

                             REPORTING REQUIREMENTS

Section 12.01.    Annual Statement as to Compliance...........................69
Section 12.02.    Annual Independent Public Accountants' Servicing Report.....69
Section 12.03.    Administrator's Certificate.................................69
Section 12.04.    Statements to Noteholders...................................69

EXHIBIT A......ELIGIBLE LOAN ACQUISITION CERTIFICATE
EXHIBIT B......FORM OF ISSUER ORDER

                                       iv
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                               INDENTURE OF TRUST


        THIS INDENTURE OF TRUST, dated as of __________, 2003 (this
"Indenture"), is by and between NELNET EDUCATION LOAN FUNDING, INC. (the
"Issuer"), a corporation duly organized and existing under the laws of the State
of Nebraska (the "State"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
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 represents that it is duly created as a corporation
under the laws of the State and that by proper action of its governing body it
has duly authorized the execution and delivery of this Indenture, which
Indenture provides for the payment of student loan asset-backed notes (the
"Notes") and the payments to any Counterparty (as defined herein), all to be
issued pursuant to the terms of Supplemental Indentures; and

        WHEREAS, this Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"), that are
deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions; and

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

        WHEREAS, it is hereby agreed between the parties hereto, the Registered
Owners of any Notes (the Registered Owners evidencing their consent by their
acceptance of the Notes) and any Counterparty (the Counterparty evidencing its
consent by its execution and delivery of a Derivative Product (as defined
herein)) that in the performance of any of the agreements of the Issuer herein
contained, any obligation it may thereby incur for the payment of money shall
not be general debt on its part, but shall be secured by and payable solely from
the Trust Estate, payable in such order of preference and priority as provided
herein;

        NOW, THEREFORE, the Issuer, in consideration of the premises and
acceptance by the Trustee of the trusts herein created, of the purchase and
acceptance of the Notes by the Registered Owners thereof, of the execution and
delivery of any Derivative Product by a Counterparty and the Issuer and the
acknowledgement thereof by the Trustee, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
does hereby GRANT, CONVEY, PLEDGE, TRANSFER, ASSIGN AND DELIVER to the Trustee,
for the benefit of the Registered Owners of the Notes, any Counterparty (to
secure the payment of any and all amounts which may from time to time become due
and owing to a Counterparty pursuant to any Derivative Product), all of the
moneys, rights, and properties described in the granting clauses A through F
below (the "Trust Estate"), as follows:


<PAGE>

                                GRANTING CLAUSE A

        The Revenues (other than Revenues deposited in the Operating Fund or
otherwise released from the lien of the Trust Estate as provided herein);

                                GRANTING CLAUSE B

        All moneys and investments held in the Funds created under Section
5.01(a) hereof (other than the moneys and investments held in the Operating
Fund);

                                GRANTING CLAUSE C

        The Financed Eligible Loans;

                                GRANTING CLAUSE D

        The rights of the Issuer in and to the Servicing Agreements, the Student
Loan Purchase Agreements, the Custodian Agreements and the Guarantee Agreements
as the same relate to Financed Eligible Loans;

                                GRANTING CLAUSE E

        The rights of the Issuer in and to any Derivative Product and any
Counterparty Guarantee; provided, however, that this Granting Clause E shall not
be for the benefit of a Counterparty with respect to its Derivative Product; and

                                GRANTING CLAUSE F

        Any and all other property, rights and interests of every kind or
description that from time to time hereafter is granted, conveyed, pledged,
transferred, assigned or delivered to the Trustee as additional security
hereunder.

        TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or
hereafter acquired, unto the Trustee and its successors or assigns;

        IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for
the equal and proportionate benefit and security of all present and future
Registered Owners of the Notes, without preference of any Note over any other,
except as provided herein, and for enforcement of the payment of the Notes in
accordance with their terms, and all other sums payable hereunder (including
payments due and payable to any Counterparty) or on the Notes, and for the
performance of and compliance with the obligations, covenants, and conditions of
this Indenture, as if all the Notes and other Obligations (as defined herein) at
any time Outstanding had been executed and delivered simultaneously with the
execution and delivery of this Indenture;

        PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall
well and truly pay, or cause to be paid, the principal of the Notes and the
interest due and to become due thereon, or provide fully for payment thereof as
herein provided, at the times and in the manner mentioned in the Notes according
to the true intent and meaning thereof, and shall make all required payments
into the Funds as required under Article V hereof, or shall provide, as


                                       2
<PAGE>

permitted hereby, for the payment thereof by depositing with the Trustee sums
sufficient to pay or to provide for payment of the entire amount due and to
become so due as herein provided (including payments due and payable to any
Counterparty), then this Indenture (other than Sections 4.13, 4.14 (for a period
of 90 days) and 7.05 hereof) and the rights hereby granted shall cease,
terminate and be void; otherwise, this Indenture shall be and remain in full
force and effect;

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

                                   ARTICLE I

                         DEFINITIONS AND USE OF PHRASES

        The following terms have the following meanings unless the context
clearly requires otherwise:

        "ACCOUNT" shall mean any of the accounts created and established within
any Fund by this Indenture.

        "ACQUISITION/REDEMPTION FUND" shall mean the Fund by that name created
in Section 5.01(a)(i) hereof and further described in Section 5.02 hereof,
including any Accounts and Subaccounts created therein.

        "ACT" shall mean the Higher Education Act of 1965, as amended or
supplemented from time to time, or any successor federal act and all
regulations, directives, bulletins, and guidelines promulgated from time to time
thereunder.

        "ADD-ON CONSOLIDATION LOAN" shall mean an Eligible Loan included in the
Trust Estate, the principal balance of which is added to an existing
Consolidation Loan during the Add-on Period, as required by the Act.

        "ADD-ON PERIOD" shall mean the period of 180 days after the date of
origination of any Consolidation Loan acquired by the Issuer.

        "ADMINISTRATIVE SERVICES AGREEMENT" shall mean any administrative
services agreement entered into between the Issuer and an entity who will
provide administrative services for the Issuer, as supplemented and amended.

        "AGENT MEMBER" shall mean a member of, or participant in, the Securities
Depository.

        "AGGREGATE MARKET VALUE" shall mean on any calculation date the sum of
the Values of all assets of the Trust Estate, less moneys in any Fund or Account
which the Issuer is then entitled to receive for deposit into the Operating Fund
but which has not yet been removed from the Trust Estate.

                                       3
<PAGE>

        "AUTHORIZED OFFICER" shall mean, when used with reference to the Issuer,
its Chairman, President, Vice President or Secretary, or any other officer or
board member authorized in writing by the Board to act on behalf of the Issuer.

        "AUTHORIZED REPRESENTATIVE" shall mean, when used with reference to the
Issuer, (a) an Authorized Officer or (b) any officer or board member of any
affiliate organization or other entity authorized by the Board to act on the
Issuer's behalf.

        "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Issuer.

        "BUSINESS DAY" shall mean the definition of Business Day found in the
Supplemental Indenture authorizing a series of Notes.

        "CERTIFICATE OF INSURANCE" shall mean any Certificate evidencing a
Financed Eligible Loan is Insured pursuant to a Contract of Insurance.

        "COMMISSION" shall mean the Securities and Exchange Commission.

        "CONTRACT OF INSURANCE" shall mean the contract of insurance between the
Eligible Lender and the Secretary.

        "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Each reference to a section of the Code herein shall be deemed to
include the United States Treasury Regulations, including applicable temporary
and proposed regulations, relating to such section which are applicable to the
Notes or the use of the proceeds thereof. A reference to any specific section of
the Code shall be deemed also to be a reference to the comparable provisions of
any enactment which supersedes or replaces the Code thereunder from time to
time.

        "COLLECTION FUND" shall mean the Fund by that name created in Section
5.01(a)(ii) hereof and further described in Section 5.03 hereof.

        "CONSOLIDATION LOAN" shall mean an Eligible Loan made pursuant to
Section 428C of the Act to consolidate the borrower's obligations under various
federally authorized student loan programs into a single loan, as supplemented
by the addition of any related Add-on Consolidation Loan.

        "COUNTERPARTY PAYMENTS " shall mean any payment to be made to, or for
the benefit of, the Issuer under a Derivative Product.

        "COUNTERPARTY" shall mean any counterparty under a Derivative Product.

         "CUSTODIAN AGREEMENT" shall mean, collectively, the custodian
agreements with any Servicer or other custodian or bailee related to Financed
Eligible Loans.

        "DATE OF ISSUANCE" shall mean the date of original issuance and delivery
of any Notes to an Underwriter or placement agent.

                                       4
<PAGE>

        "DERIVATIVE PAYMENT DATE" shall mean, with respect to a Derivative
Product, any date specified in the Derivative Product on which both or either of
the Issuer Derivative Payment and/or a Reciprocal Payment is due and payable
under the Derivative Product.

        "DERIVATIVE PRODUCT" shall mean a written contract or agreement between
the Issuer and a Counterparty entered into pursuant to Section 3.03 hereof.

        "DERIVATIVE VALUE" shall mean the value of the Derivative Product, if
any, to the Counterparty, provided that such value is defined and calculated in
substantially the same manner as amounts are defined and calculated pursuant to
the applicable provisions of an ISDA Master Agreement.

        "DISSOLUTION" shall mean, with respect to Article XI and the Issuer, the
occurrence of any of the events which would cause a dissolution of a limited
partnership organized under the laws of the State of Delaware, the sole general
partner of which is the Issuer.

        "ELIGIBLE LENDER" shall mean any "ELIGIBLE LENDER," as defined in the
Act, and which has received an eligible lender designation from the Secretary
with respect to Eligible Loans made under the Act.

        "ELIGIBLE LENDER TRUSTEE" shall mean Wells Fargo Bank Minnesota,
National Association, a national banking association, not in its individual
capacity but solely as Eligible Lender Trustee under the Eligible Lender Trust
Agreement.

        "ELIGIBLE LENDER TRUST AGREEMENT" shall mean the Eligible Lender Trust
Agreement dated as of __________, 2003 between the Issuer and the Eligible
Lender Trustee.

        "ELIGIBLE LOAN" shall mean any loan made to finance post-secondary
education that is (a) made under the Act (including Consolidation Loans and
Add-on Consolidation Loans); (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).

        "ELIGIBLE LOAN ACQUISITION CERTIFICATE" shall mean a certificate signed
by an Authorized Representative of the Issuer in substantially the form attached
as Exhibit A hereto.

        "EVENT OF BANKRUPTCY" shall mean (a) the Issuer shall have commenced a
voluntary case or other proceeding seeking liquidation, reorganization, or other
relief with respect to itself or its debts under any bankruptcy, insolvency, or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property, or shall have made a general assignment for
the benefit of creditors, or shall have declared a moratorium with respect to
its debts or shall have failed generally to pay its debts as they become due, or
shall have taken any action to authorize any of the foregoing; or (b) an
involuntary case or other proceeding shall have been commenced against the
Issuer seeking liquidation, reorganization, or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or any substantial part
of its property provided such action or proceeding is not dismissed within 60
days.

                                       5
<PAGE>

        "EVENT OF DEFAULT" shall have the meaning specified in Article VI
hereof.

        "FINANCED" or "FINANCING" when used with respect to Eligible Loans,
shall mean or refer to Eligible Loans (a) acquired by the Issuer with balances
in the Acquisition/Redemption Fund or otherwise deposited in or accounted for in
the Acquisition/Redemption Fund or otherwise constituting a part of the Trust
Estate and (b) Eligible Loans substituted or exchanged for Financed Eligible
Loans, but does not include Eligible Loans released from the lien of this
Indenture and sold or transferred, to the extent permitted by this Indenture.

        "FISCAL YEAR" shall mean the fiscal year of the Issuer as established
from time to time.

        "FITCH" shall mean Fitch, Inc., a corporation organized and existing
under the laws of the State of Delaware, its successors and assigns.

        "FUNDS" shall mean each of the Funds created pursuant to Section 5.01(a)
and (b) hereof.

        "GUARANTEE" or "GUARANTEED" shall mean, with respect to an Eligible
Loan, the insurance or guarantee by the Guaranty Agency pursuant to such
Guaranty Agency's Guarantee Agreement of the maximum percentage of the principal
of and accrued interest on such Eligible Loan allowed by the terms of the Act
with respect to such Eligible Loan at the time it was originated and the
coverage of such Eligible Loan by the federal reimbursement contracts,
providing, among other things, for reimbursement to the Guaranty Agency for
payments made by it on defaulted Eligible Loans insured or guaranteed by the
Guaranty Agency of at least the minimum reimbursement allowed by the Act with
respect to a particular Eligible Loan.

        "GUARANTEE AGREEMENTS" shall mean a guaranty or lender agreement between
the Trustee and any Guaranty Agency, and any amendments thereto.

        "GUARANTY AGENCY" shall mean any entity authorized to guarantee student
loans under the Act and with which the Trustee maintains a Guarantee Agreement.

        "HIGHEST PRIORITY OBLIGATIONS" shall mean, (a) at any time when Senior
Obligations are Outstanding, the Senior Obligations, (b) at any time when no
Senior Obligations are Outstanding, the Subordinate Obligations, and (c) at any
time when no Senior Obligations or Subordinate Obligations are Outstanding, the
Junior-Subordinate Obligations (and any priorities as between Junior-Subordinate
Obligations as shall be established by Supplemental Indentures).

        "INDENTURE" shall mean this Indenture of Trust, including all
supplements and amendments hereto.

        "INSURANCE" or "INSURED" or "INSURING" shall mean, with respect to an
Eligible Loan, the insuring by the Secretary (as evidenced by a Certificate of
Insurance or other document or certification issued under the provisions of the
Act) under the Act of 100% of the principal of and accrued interest on such
Eligible Loan.

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<PAGE>

        "INTEREST BENEFIT PAYMENT" shall mean an interest payment on Eligible
Loans received pursuant to the Act and an agreement with the federal government,
or any similar payments.

        "INTEREST PAYMENT DATE" shall mean the Interest Payment Dates specified
for Notes in the Supplemental Indenture authorizing the issuance of such Notes.

        "INVESTMENT AGREEMENT" shall mean, collectively, (a) the Investment
Agreement dated as of __________, 2003, among the Trustee, the Issuer and (b)
any other investment agreement approved by the Rating Agencies.

        "INVESTMENT SECURITIES" shall mean:

               (a) direct obligations of, or obligations on which the timely
        payment of the principal of and interest on which are unconditionally
        and fully guaranteed by, the United States of America;

               (b) interest-bearing time or demand deposits, certificates of
        deposit or other similar banking arrangements with a maturity of 12
        months or less with any bank, trust company, national banking
        association or other depository institution, including those of the
        Trustee, provided that, at the time of deposit or purchase such
        depository institution has commercial paper which is rated "A-1+" by
        S&P, "P-1" by Moody's and "F-1+" by Fitch;

               (c) interest-bearing time or demand deposits, certificates of
        deposit or other similar banking arrangements with a maturity of 24
        months or less, but more than 12 months, with any bank, trust company,
        national banking association or other depository institution, including
        those of the Trustee and any of its affiliates, provided that, at the
        time of deposit or purchase such depository institution has senior debt
        rated "A" or higher by S&P, "P-1" or higher by Moody's and "A" or higher
        by Fitch, and, if commercial paper is outstanding, commercial paper
        which is rated "A-1+" by S&P, "P-1" by Moody's and "F-1+" by Fitch;

               (d) interest-bearing time or demand deposits, certificates of
        deposit or other similar banking arrangements with a maturity of more
        than 24 months with any bank, trust company, national banking
        association or other depository institution, including those of the
        Trustee and any of its affiliates, provided that, at the time of deposit
        or purchase such depository institution has senior debt rated "AA" or
        higher by S&P, "Aa2" or higher by Moody's and "AA" or higher by Fitch
        and, if commercial paper is outstanding, commercial paper which is rated
        "A-1+" by S&P, "Aa2" by Moody's and "F-1+" by Fitch;

               (e) bonds, debentures, notes or other evidences of indebtedness
        issued or guaranteed by any of the following agencies: Federal Farm
        Credit Banks, Federal Home Loan Mortgage Corporation; the Export-Import
        Bank of the United States; the Federal National Mortgage Association;
        the Student Loan Marketing Association; the Farmers Home Administration;
        Federal Home Loan Banks provided such obligation is rated "AAA" by S&P,
        "Aaa" by Moody's and "AAA" by Fitch; or any agency or instrumentality of
        the United States of America which shall be established for the purposes
        of acquiring the obligations of any of the foregoing or otherwise
        providing financing therefor;

                                       7
<PAGE>

               (f) repurchase agreements and reverse repurchase agreements,
        other than overnight repurchase agreements and overnight reverse
        repurchase agreements, with banks, including the Trustee and any of its
        affiliates, which are members of the Federal Deposit Insurance
        Corporation or firms which are members of the Securities Investors
        Protection Corporation, in each case whose outstanding, unsecured debt
        securities are rated no lower than two subcategories below the highest
        rating on any series of Outstanding Notes by S&P, Moody's and Fitch and,
        if commercial paper is outstanding, commercial paper which is rated
        "A-1+" by S&P, "P-1" by Moody's and "F-1+" by Fitch;

               (g) overnight repurchase agreements and overnight reverse
        repurchase agreements at least 101% collateralized by securities
        described in subparagraph (a) of this definition and with a
        counterparty, including the Trustee and any of its affiliates, that has
        senior debt rated "AA" or higher by S&P, "A2" or higher by Moody's, and
        "A" or higher by Fitch and, if commercial paper is outstanding,
        commercial paper which is rated "A-1+" by S&P, "P-1" by Moody's and
        "F-1+" by Fitch or a counterparty approved in writing by S&P, Moody's
        and Fitch, respectively;

               (h) investment agreements or guaranteed investment contracts,
        which may be entered into by and among the Issuer and/or the Trustee and
        any bank, bank holding company, corporation or any other financial
        institution, including the Trustee and any of its affiliates, whose
        outstanding (i) commercial paper is rated "A-1+" by S&P, "Aa3" by
        Moody's and "F-1+" by Fitch for agreements or contracts with a maturity
        of 12 months or less; (ii) unsecured long-term debt is rated no lower
        than two subcategories below the highest rating on any series of
        Outstanding Notes by S&P, Moody's and Fitch and, if commercial paper is
        outstanding, commercial paper which is rated "A-1+" by S&P, "Aa1" by
        Moody's and "F-1+" by Fitch for agreements or contracts with a maturity
        of 24 months or less, but more than 12 months, or (iii) unsecured
        long-term debt which is rated no lower than two subcategories below the
        highest rating on any series of Outstanding Notes by S&P, Moody's and
        Fitch and, if commercial paper is outstanding, commercial paper which is
        rated "A-1+" by S&P, "Aa1" by Moody's and "F-1+" by Fitch for agreements
        or contracts with a maturity of more than 24 months, or, in each case,
        by an insurance company whose claims-paying ability is so rated;

               (i) "tax exempt bonds" as defined in Section 150(a)(6) of the
        Code, other than "specified private activity bonds" as defined in
        Section 57(a)(5)(C) of the Code, that are rated in the highest category
        by S&P, Moody's and Fitch for long-term or short-term debt or shares of
        a so-called money market or mutual fund rated "AAAm/AAAm-G" or higher by
        S&P, "Aaa" or higher by Moody's, and "AA/F1+" or higher by Fitch, that
        do not constitute "investment property" within the meaning of Section
        148(b)(2) of the Code, provided that the fund has all of its assets
        invested in obligations of such rating quality;

                                       8
<PAGE>

               (j) commercial paper, including that of the Trustee and any of
        its affiliates, which is rated in the single highest classification,
        "A-1+" by S&P, "P-1" by Moody's and "F-1+" by Fitch, and which matures
        not more than 270 days after the date of purchase;

               (k) investments in a money market fund rated at least "AAAm" or
        "AAAm-G" by S&P, "Aaa" by Moody's and "AA" or "F-1+" by Fitch, including
        funds for which the Trustee or an affiliate thereof acts as investment
        advisor or provides other similar services for a fee;

               (l) any Investment Agreement; and

               (m) any other investment with a Rating Confirmation from each
        Rating Agency.

        "ISDA MASTER AGREEMENT" shall mean the ISDA Interest Rate and Currency
Exchange Agreement, copyright 1992, as amended from time to time, and as in
effect with respect to any Derivative Product.

        "ISSUER" shall mean Nelnet Student Loan Funding, Inc., a corporation
organized and existing under the laws of the State, and any successor thereto.

        "ISSUER ORDER" shall mean a written order signed in the name of the
Issuer by an Authorized Representative.

        "ISSUER DERIVATIVE PAYMENT" shall mean a payment required to be made by
or on behalf of the Issuer due to a Counterparty pursuant to a Derivative
Product (including Priority Termination Payments, but excluding other
Termination Payments.

        "JUNIOR-SUBORDINATE NOTES" shall mean Notes, the principal of and
interest on which is payable on a subordinated basis to the payment of the
principal of and interest on the Senior Notes and the Subordinate Notes;
provided, however, that any series of the Junior-Subordinate Notes need not
necessarily be payable on a parity with all other series of the
Junior-Subordinate Notes.

        "JUNIOR-SUBORDINATE OBLIGATIONS" shall mean Junior-Subordinate Notes and
any Derivative Product, the priority of payment of which is equal with that of
any series or subseries of Junior-Subordinate Notes.

        "LIQUIDATED FINANCED ELIGIBLE LOAN" shall mean any defaulted Financed
Eligible Loan liquidated by a Servicer (which shall not include any Financed
Eligible Loan on which payments are received from a Guaranty Agency) or which a
Servicer has, after using all reasonable efforts to realize upon such Financed
Eligible Loan, determined to charge off.

        "LIQUIDATION PROCEEDS" shall mean, with respect to any Liquidated
Financed Eligible Loan which became a Liquidated Financed Eligible Loan during
the current calendar quarter in accordance with a Servicer's customary servicing
procedures, the moneys collected in respect of the liquidation thereof from
whatever source, other than moneys collected with respect to any Liquidated


                                       9
<PAGE>

Financed Eligible Loan which was written off in prior calendar quarters or
during the current calendar quarter, net of the sum of any amounts expended by a
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the obligor on such Liquidated Financed Eligible Loan.

        "MASTER PROMISSORY NOTE" shall mean a note (a) that evidences one or
more loans made to finance post-secondary education financing and (b) that is in
the form mandated by Section 432(m)(1) of the Act, as added by Pub. L. 105-244,
ss. 427, 112 Stat. 1702 (1998), as amended by Public Law No: 106-554 (enacted
December 21, 2000) and as codified in 20 U.S.C. ss. 1082(m)(1).

        "MATURITY" when used with respect to any Note, shall mean the date on
which the principal thereof becomes due and payable as therein or herein
provided, whether at its Stated Maturity, by earlier redemption, by declaration
of acceleration, or otherwise.

        "MOODY'S" shall mean Moody's Investors Service, its successors and
assigns.

        "NOTE PAYMENT DATE" shall mean, for any Note, any Interest Payment Date,
its Stated Maturity or the date of any other regularly scheduled principal
payment with respect thereto.

        "NOTES" shall mean any notes or other debt obligations issued pursuant
to Section 2.08 of this Indenture.

        "OBLIGATIONS"   shall   mean   Senior   Obligations,   Subordinate
Obligations and Junior-Subordinate Obligations.

        "OPERATING FUND" shall mean the fund by that name continued by Section
5.01 and further described in Section 5.05 hereof.

        "OUTSTANDING" shall mean, when used in connection with any Note, a Note
which has been executed and delivered pursuant to this Indenture which at such
time remains unpaid as to principal or interest, unless provision has been made
for such payment pursuant to Section 10.02 hereof, excluding Notes which have
been replaced pursuant to Section 2.03 hereof.

        "PERSON" shall mean an individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or agency or political subdivision thereof.

        "PRINCIPAL OFFICE" shall mean the principal office of the party
indicated, as set forth in Section 9.01 hereof or elsewhere in this Indenture.

        "PRINCIPAL REDUCTION PAYMENT DATE" shall mean, for any Note, any date
described on a Supplemental Indenture for the payment of Principal Reduction
Payments.

        "PRINCIPAL REDUCTION PAYMENTS" shall mean principal payments made prior
to a Stated Maturity as set forth in a Supplemental Indenture.

        "PRIORITY TERMINATION PAYMENT" shall mean, with respect to a Derivative
Product, any termination payment payable by the Issuer under such Derivative


                                       10
<PAGE>

Product relating to an early termination of such Derivative Product by the
Counterparty, as the non-defaulting party, following (i) a payment default by
the Issuer thereunder (ii) the occurrence of an Event of Default specified in
Section 6.01(e) of this Indenture or (iii) the Trustee's taking any action
hereunder to liquidate the entire Trust Estate following an Event of Default and
acceleration of the Notes pursuant to Section 6.09 hereof.

        "PROGRAM" shall mean the Issuer's program for the origination and the
purchase of Eligible Loans, as the same may be modified from time to time.

        "PROGRAM EXPENSES" shall mean (a) the fees and expenses of the Trustee
and the Eligible Lender Trustee; (b) the fees and expenses of any auction agent,
any market agent, any calculation agent and any broker-dealer then acting under
a Supplemental Indenture with respect to auction rate Notes; (c) the fees and
expenses of any remarketing agent then acting under a Supplemental Indenture
with respect to variable rate Notes; (d) the fees and expenses due to any credit
provider of any Notes for which a credit facility or liquidity facility is in
place; (e) the fees of any Servicer and/or Custodian under any servicing
agreement or custodian agreement; (f) the fees and expenses of the Issuer
incurred in connection with the preparation of legal opinions and other
authorized reports or statements attributable to the Notes and the Financed
Eligible Loans; (g) transfer fees, purchase premiums, rebate fees and loan
origination fees on Financed Eligible Loans; (h) fees and expenses associated
with the delivery of a substitute credit facility or liquidity facility under a
Supplemental Indenture; (i) fees and expenses associated with (but not payments
under) Derivative Products; (j) the costs of remarketing any variable rate Notes
and (k) expenses incurred for the Issuer's maintenance and operation of its
Program as a direct consequence of this Indenture, the Notes or the Financed
Eligible Loans; including, but not limited to, taxes, the reasonable fees and
expenses of attorneys, agents, financial advisors, consultants, accountants and
other professionals, attributable to such maintenance and operation, marketing
expenses for the Program and a prorated portion of the rent, personnel
compensation, office supplies and equipment, travel expenses and other lawful
payments made to members of the Board.

        "RATING" shall mean one of the rating categories of Fitch, Moody's and
S&P or any other Rating Agency, provided Fitch, Moody's and S&P or any other
Rating Agency, as the case may be, is currently rating the Notes.

        "RATING AGENCY" shall mean, collectively, Fitch, Moody's and S&P and
their successors and assigns or any other Rating Agency requested by the Issuer
to maintain a Rating on any of the Notes.

        "RATING CONFIRMATION" shall mean a letter from each Rating Agency then
providing a Rating for any of the Notes at the request of the Issuer, confirming
that the action proposed to be taken by the Issuer will not, in and of itself,
result in a downgrade of any of the Ratings then applicable to the Notes, or
cause any Rating Agency to suspend or withdraw the Ratings then applicable to
the Notes.

        "REALIZED LOSS" shall mean the excess of the principal balance
(including any interest that had been or had been expected to be capitalized) of


                                       11
<PAGE>

any Liquidated Financed Eligible Loan over Liquidation Proceeds with respect to
such Financed Eligible Loan to the extent allocable to principal (including any
interest that had been or had been expected to be capitalized).

         "RECORD DATE" shall mean the Record Date established for any Notes
pursuant to the Supplemental Indenture authorizing the issuance of such Notes.

        "RECOVERIES OF PRINCIPAL" shall mean all amounts received by the Trustee
from or on account of any Financed Eligible Loan as a recovery of the principal
amount thereof, including scheduled, delinquent and advance payments, payouts or
prepayments, proceeds from insurance or from the sale, assignment, transfer,
reallocation or other disposition of a Financed Eligible Loan and any payments
representing such principal from the guarantee or insurance of any Financed
Eligible Loan.

        "REGISTERED OWNER" shall mean the Person in whose name a Note is
registered on the Note registration books maintained by the Trustee, and shall
also mean with respect to a Derivative Product, any Counterparty, unless the
context otherwise requires.

        "REGULATIONS" shall mean the Regulations promulgated from time to time
by the Secretary or any Guaranty Agency guaranteeing Financed Eligible Loans.

        "RESERVE FUND" shall mean the Fund by that name created in Section
5.01(a)(iii) hereof and further described in Section 5.04 hereof, including any
Accounts and Subaccounts created therein.

        "RESERVE FUND REQUIREMENT" shall mean an amount, if any, required to be
on deposit in the Reserve Fund with respect to any Notes issued pursuant to the
Supplemental Indenture authorizing the issuance of such Notes.

        "RESOLUTION" shall mean a resolution duly adopted by the Board.

        "REVENUE" or "REVENUES" shall mean all Recoveries of Principal,
payments, proceeds, charges and other income received by the Trustee or the
Issuer from or on account of any Financed Eligible Loan (including scheduled,
delinquent and advance payments of and any insurance proceeds with respect to,
interest, including Interest Benefit Payments, on any Financed Eligible Loan and
any Special Allowance Payment received by the Issuer with respect to any
Financed Eligible Loan) and all interest earned or gain realized from the
investment of amounts in any Fund or Account and all payments received by the
Issuer pursuant to a Derivative Product.

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

        "SECRETARY" shall mean the Secretary of the United States Department of
Education or any successor to the pertinent functions thereof under the Act.

        "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

                                       12
<PAGE>

        "SECURITIES DEPOSITORY" or "DEPOSITORY" shall mean The Depository Trust
Company and its successors and assigns or if, (a) the then Securities Depository
resigns from its functions as depository of the Notes or (b) the Issuer
discontinues use of the Securities Depository, any other securities depository
which agrees to follow the procedures required to be followed by a securities
depository in connection with the Notes and which is selected by the Issuer with
the consent of the Trustee.

        "SECURITIES EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.

        "SELLER" shall mean an Eligible Lender from which the Issuer is
purchasing or has purchased or agreed to purchase Eligible Loans pursuant to a
Student Loan Purchase Agreement between the Issuer and such Eligible Lender.

        "SENIOR NOTES" shall mean all Notes secured on a senior priority to the
Subordinate Obligations and the Junior-Subordinate Obligations.

        "SENIOR OBLIGATIONS" shall mean Senior Notes and any Derivative Product,
the priority of payment of which is equal with that of Senior Notes.

        "SERVICER" shall mean, collectively, Nelnet, Inc., Nelnet Loan Services,
Inc., InTuition, Inc., Sallie Mae Servicing L.P., EFS Services, Inc., ACS
Educational Services, Inc., Pennsylvania Higher Education Assistance Agency and
any other additional Servicer, Subservicer or successor Servicer or Subservicer
selected by the Issuer, including an affiliate of the Issuer, so long as the
Issuer obtains a Rating Confirmation as to each such other Servicer or
Subservicer.

        "SERVICING AGREEMENT" shall mean the servicing agreements with any
Servicer relating to Financed Eligible Loans, as amended from time to time.

        "SPECIAL ALLOWANCE PAYMENTS" shall mean the special allowance payments
authorized to be made by the Secretary by Section 438 of the Act, or similar
allowances, if any, authorized from time to time by federal law or regulation.

        "SPECIAL RECORD DATE" shall have the meaning set forth in a Supplemental
Indenture.

        "STATE" shall mean the State of Nebraska.

        "STATED MATURITY" shall mean the date specified in the Notes as the
fixed date on which principal of such Notes is due and payable.

        "STUDENT LOAN PURCHASE AGREEMENT" shall mean a loan purchase agreement
entered into for the purchase of Eligible Loans into the Trust Estate.

        "SUBACCOUNT" shall mean any of the subaccounts which may be created and
established within any Account by this Indenture.

        "SUBORDINATE NOTES" shall mean any Notes secured on a priority
subordinate to the Senior Obligations and on a priority senior to the
Junior-Subordinate Obligations.

                                       13
<PAGE>

        "SUBORDINATE OBLIGATIONS" shall mean Subordinate Notes and any
Derivative Product, the priority of payment of which is equal with that of
Subordinate Notes.

        "SUPPLEMENTAL INDENTURE" shall mean an agreement supplemental hereto
executed pursuant to Article VIII hereof.

        "TERMINATION PAYMENT" shall mean, with respect to a Derivative Product,
any termination payment payable by the Issuer under such Derivative Product
relating to an early termination of such Derivative Product by the Counterparty,
as the non-affected party or non-defaulting party, after the occurrence of a
termination event or event of default specified in such Derivative Product,
including any Priority Termination Payment.

        "TRUST ESTATE" shall mean the property described as such in the granting
clauses hereto.

        "TRUST INDENTURE ACT" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, and as in force at the date as of which this Indenture was
executed, except as provided in Section 8.05.

        "TRUSTEE" shall mean Wells Fargo Bank Minnesota, National Association,
acting in its capacity as Trustee under this Indenture, or any successor trustee
designated pursuant to this Indenture.

        "UNDERWRITER" shall mean the underwriter or underwriters of the Notes.

        "VALUE" on any calculation date when required under this Indenture shall
mean the value of the Trust Estate calculated by the Issuer as to (a) below and
by the Trustee as to (b) through (e), inclusive, below, as follows:

               (a) with respect to any Eligible Loan, the unpaid principal
        amount thereof plus any accrued but unpaid interest, Interest Benefit
        Payments and Special Allowance Payments;

               (b) with respect to any funds of the Issuer held under this
        Indenture and on deposit in any commercial bank or as to any banker's
        acceptance or repurchase agreement or investment contract, the amount
        thereof plus accrued but unpaid interest; and

               (c) with respect to any Investment Securities, the par value
        thereof, plus accrued but unpaid interest.

        Words importing the masculine gender include the feminine gender, and
words importing the feminine gender include the masculine 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 Indenture.

                                       14
<PAGE>

                                   ARTICLE II

                NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES
                          AND USE OF PROCEEDS OF NOTES

        SECTION 2.01. NOTE DETAILS. The details of each series of Notes
authorized pursuant to this Indenture and a Supplemental Indenture, shall be
contained in the applicable Supplemental Indenture. Such details shall include,
but are not limited to, the principal amount, authorized denomination, dated
date, interest rate, principal maturity date, redemption provisions and
registration provisions.

        SECTION 2.02. EXECUTION OF NOTES. The Notes shall be executed in the
name and on behalf of the Issuer by the manual or facsimile signature of the
Chairman of the Board, President, any Vice President or the acting Chairman of
the Board and attested by the manual or facsimile signature of the Secretary of
the Issuer, any Vice President or any other member of the Board (to the extent
not executed by such person). Any Note may be signed (manually or by facsimile)
or attested on behalf of the Issuer by any person who, at the date of such act,
shall hold the proper office, notwithstanding that at the date of
authentication, issuance or delivery, such person may have ceased to hold such
office.

        SECTION 2.03. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; PERSONS
TREATED AS REGISTERED OWNERS. The Issuer shall cause books for the registration
and for the transfer of the Notes as provided in this Indenture to be kept by
the Trustee which is hereby appointed the transfer agent of the Issuer for the
Notes. Notwithstanding such appointment and with the prior written consent of
the Issuer, the Trustee is hereby authorized to make any arrangements with other
institutions which it deems necessary or desirable in order that such
institutions may perform the duties of transfer agent for the Notes. Upon
surrender for transfer of any Note at the Principal Office of the Trustee, duly
endorsed for transfer or accompanied by an assignment duly executed by the
Registered Owner or his attorney duly authorized in writing, the Issuer shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new fully registered Note or Notes of the same
interest rate and for a like series, subseries, if any, and aggregate principal
amount of the same maturity.

        Notes may be exchanged at the Principal Office of the Trustee for a like
aggregate principal amount of fully registered Notes of the same series,
subseries, if any, interest rate and maturity in authorized denominations. The
Issuer shall execute and the Trustee shall authenticate and deliver Notes which
the Registered Owner making the exchange is entitled to receive, bearing numbers
not contemporaneously outstanding. The execution by the Issuer of any fully
registered Note of any authorized denomination shall constitute full and due
authorization of such denomination and the Trustee shall thereby be authorized
to authenticate and deliver such fully registered Note.

        The Trustee shall not be required to transfer or exchange any Note
during the period of 15 business days next preceding the mailing of notice of
redemption as herein provided. After the giving of such notice of redemption,
the Trustee shall not be required to transfer or exchange any Note, which Note
or portion thereof has been called for redemption.

                                       15
<PAGE>

        As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as hereinabove
provided. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.

        The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange.

        SECTION 2.04. LOST, STOLEN, DESTROYED AND MUTILATED NOTES. Upon receipt
by the Trustee of evidence satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note and, in the case of a lost, stolen
or destroyed Note, of indemnity satisfactory to it, and upon surrender and
cancellation of the Note, if mutilated, (a) the Issuer shall execute, and the
Trustee shall authenticate and deliver, a new Note of the same series,
subseries, if any, interest rate, maturity and denomination in lieu of such
lost, stolen, destroyed or mutilated Note or (b) if such lost, stolen, destroyed
or mutilated Note shall have matured or have been called for redemption, in lieu
of executing and delivering a new Note as aforesaid, the Issuer may pay such
Note. Any such new Note shall bear a number not contemporaneously outstanding.
The applicant for any such new Note may be required to pay all taxes and
governmental charges and all expenses and charges of the Issuer and of the
Trustee in connection with the issuance of such Note. All Notes shall be held
and owned upon the express condition that, to the extent permitted by law, the
foregoing conditions are exclusive with respect to the replacement and payment
of mutilated, destroyed, lost or stolen Notes, negotiable instruments or other
securities.

        SECTION 2.05. TRUSTEE'S AUTHENTICATION CERTIFICATE. The Trustee's
authentication certificate upon any Notes shall be substantially in the form
provided in the Supplemental Indenture authorizing the issuance of such Notes.
No 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 any Note shall be conclusive evidence and the
only competent evidence that such Note has been authenticated and delivered
hereunder and under a Supplemental Indenture. The Trustee's certificate of
authentication shall be deemed to have been duly executed by it if manually
signed by an authorized officer or signatory of the Trustee, but it shall not be
necessary that the same person sign the certificate of authentication on all of
the Notes issued hereunder.

        SECTION 2.06. CANCELLATION AND DESTRUCTION OF NOTES BY THE TRUSTEE.
Whenever any Outstanding Notes shall be delivered to the Trustee for the
cancellation thereof pursuant to this Indenture, upon payment of the principal
amount and interest represented thereby, or for replacement pursuant to Section
2.03 hereof, such Notes shall be promptly cancelled and, within a reasonable
time, cremated or otherwise destroyed by the Trustee and counterparts of a
certificate of destruction evidencing such cremation or other destruction shall
be furnished by the Trustee to the Issuer.

                                       16
<PAGE>

        SECTION 2.07. TEMPORARY NOTES. Pending the preparation of definitive
Notes, the Issuer may execute and the Trustee shall authenticate and deliver
temporary Notes. Temporary Notes shall be issuable as fully registered Notes
without coupons, of any denomination, and substantially in the form of the
definitive Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Issuer. Every
temporary Note shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Notes. As promptly as practicable the Issuer
shall execute and shall furnish definitive Notes and thereupon temporary Notes
may be surrendered in exchange therefor without charge at the principal office
of the Trustee, and the Trustee shall authenticate and deliver in exchange for
such temporary Notes a like aggregate principal amount of definitive Notes.
Until so exchanged the temporary Notes shall be entitled to the same benefits
under this Indenture as definitive Notes.

        SECTION 2.08. ISSUANCE OF NOTES.

                (a) The Issuer shall have the authority, upon complying with the
        provisions of this Section, to issue and deliver from time to time Notes
        secured by the Trust Estate on a parity with the Senior Notes, the
        Subordinate Notes or the Junior-Subordinate Notes, if any, secured
        hereunder as shall be determined by the Issuer. In addition, the Issuer
        may enter into any Derivative Products it deems necessary or desirable
        with respect to any or all of the Notes.

                (b) No Notes shall be authenticated and delivered pursuant to
        this Indenture until the following conditions have been satisfied:

                        (i) The Issuer and the Trustee have entered into a
                Supplemental Indenture (which Supplemental Indenture shall not
                require the approval of the Registered Owners of any of the
                Outstanding Notes or Derivative Products) providing the terms
                and forms of the proposed Notes as described in Section 2.01
                hereof, including the designation of such Notes as Senior Notes,
                Subordinate Notes or Junior-Subordinate Notes, the redemption
                and selection provisions applicable to such Notes, and the
                Reserve Fund Requirement with respect to such Notes, if any.

                        (ii) The Trustee shall have received a Rating
                Confirmation from each Rating Agency which has assigned a Rating
                or Ratings to any Outstanding Notes that such Rating or Ratings
                will not be reduced or withdrawn as a result of the issuance of
                the proposed Notes.

                        (iii) The Trustee shall have received an opinion of Note
                Counsel to the effect that all of the foregoing conditions to
                the issuance of the proposed Notes have been satisfied.

                        (iv) Upon the issuance of the proposed Notes, an amount
                equal to the Reserve Fund Requirement with respect to such
                Notes, if any, shall be deposited in the Reserve Fund.

                                       17
<PAGE>

                (c) The Trustee is authorized to set up any additional Funds or
        Accounts or Subaccounts under this Indenture which it deems necessary or
        convenient in connection with the issuance and delivery of any Notes.

                                  ARTICLE III

                       PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS;
                             AND DERIVATIVE PRODUCTS

        SECTION 3.01. PARITY AND PRIORITY OF LIEN. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the Issuer shall
be for the equal benefit, protection and security of the Registered Owners of
any and all of the Obligations, all of which, regardless of the time or times of
their issuance or maturity, shall be of equal rank without preference, priority
or distinction of any of the Obligations over any other thereof, except as
expressly provided in this Indenture with respect to certain payment and other
priorities.

        SECTION 3.02. OTHER OBLIGATIONS.

                (a) The Issuer reserves the right to issue other notes or
        obligations which do not constitute or create a lien on the Trust
        Estate.

                (b) The Issuer shall not commingle the Funds established by this
        Indenture with funds, proceeds, or investment of funds relating to other
        issues or series of notes heretofore or hereafter issued, except to the
        extent such commingling is required by the Trustee for ease in
        administration of its duties and responsibilities; provided, however,
        that should the Trustee require such permitted commingling, it shall
        keep complete records in order that the funds, proceeds, or investments
        under this Indenture may at all times be identified by source and
        application, and if necessary, separated.

                (c) The Revenues and other moneys, Financed Eligible Loans,
        securities, evidences of indebtedness, interests, rights and properties
        pledged under this Indenture are and will be owned by the Issuer (or the
        Eligible Lender Trustee) free and clear of any pledge, lien, charge or
        encumbrance thereon or with respect thereto prior to, of equal rank with
        or subordinate to the respective pledges created by this Indenture,
        except as otherwise expressly provided herein, and all action on the
        part of the Issuer to that end has been duly and validly taken. If any
        Financed Eligible Loan is found to have been subject to a lien at the
        time such Financed Eligible Loan was acquired, the Issuer shall cause
        such lien to be released, shall purchase such Financed Eligible Loan
        from the Trust Estate for a purchase price equal to its principal amount
        plus any unamortized premium, if any, and interest accrued thereon or
        shall replace such Financed Eligible Loan with another Eligible Loan
        with substantially identical characteristics which replacement Eligible
        Loan shall be free and clear of liens at the time of such replacement.
        Except as otherwise provided herein, the Issuer shall not create or
        voluntarily permit to be created any debt, lien, or charge on the
        Financed Eligible Loans which would be on a parity with, subordinate to,
        or prior to the lien of this Indenture; shall not do or omit to do or
        suffer to be done or omitted to be done any matter or things whatsoever
        whereby the lien of this Indenture or the priority of such lien for the


                                       18
<PAGE>

        Obligations hereby secured might or could be lost or impaired; and will
        pay or cause to be paid or will make adequate provisions for the
        satisfaction and discharge of all lawful claims and demands which if
        unpaid might by law be given precedence to or any equality with this
        Indenture as a lien or charge upon the Financed Eligible Loans;
        provided, however, that nothing in this subsection (c) shall require the
        Issuer to pay, discharge, or make provision for any such lien, charge,
        claim, or demand so long as the validity thereof shall be by it in good
        faith contested, unless thereby, in the opinion of the Trustee, the same
        will endanger the security for the Obligations; and provided further
        that any subordinate lien hereon (i.e., subordinate to the lien securing
        the Senior Obligations, the Subordinate Obligations and the
        Junior-Subordinate Obligations) shall be entitled to no payment from the
        Trust Estate, nor may any remedy be exercised with respect to such
        subordinate lien against the Trust Estate until all Obligations have
        been paid or deemed paid hereunder.

        SECTION 3.03. DERIVATIVE PRODUCTS; COUNTERPARTY PAYMENTS ; ISSUER
DERIVATIVE PAYMENTS. The Issuer hereby authorizes and directs the Trustee to
acknowledge and agree to any Derivative Product hereafter entered into by the
Issuer and a Counterparty under which (a) the Issuer may be required to make,
from time to time, Issuer Derivative Payments and (b) the Trustee may receive,
from time to time, Counterparty Payments for the account of the Issuer. No
Derivative Product shall be entered into unless the Trustee shall have received
a Rating Confirmation from each Rating Agency that such Derivative Product will
not adversely affect the Rating on any of the Notes.

                                   ARTICLE IV

                       PROVISIONS APPLICABLE TO THE NOTES;
                              DUTIES OF THE ISSUER

        SECTION 4.01. PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM. The Issuer
covenants that it will promptly pay, but solely from the Trust Estate, the
principal of and interest, if any, on each and every Obligation issued under the
provisions of this Indenture at the places, on the dates and in the manner
specified herein and in said Obligations and any premium required for the
retirement of said Obligations by purchase or redemption according to the true
intent and meaning thereof. The Obligations shall be and are hereby declared to
be payable from and equally secured by an irrevocable first lien on and pledge
of the properties constituting the Trust Estate, subject to the application
thereof as permitted by this Indenture, but in no event shall the Registered
Owners or any Counterparty have any right to possession or control of any
Financed Eligible Loans, which shall be held only by the Trustee or its agent or
bailee.

        SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
represents and warrants that it is duly authorized under the laws of the State
to create and issue the Notes and to execute and deliver this Indenture and any
Derivative Product and to make the pledge to the payment of Notes and any Issuer
Derivative Payments hereunder, that all necessary action on the part of the
Issuer and the Board for the creation and issuance of the Notes and the
execution and delivery of this Indenture and any Derivative Product has been
duly and effectively taken; and that the Notes in the hands of the Registered
Owners thereof and the Issuer Derivative Payments are and will be valid and
enforceable special limited obligations of the Issuer secured by and payable
solely from the Trust Estate.

                                       19
<PAGE>

        SECTION 4.03. COVENANTS AS TO ADDITIONAL CONVEYANCES. At any and all
times, the Issuer will duly execute, acknowledge, and deliver, or will cause to
be done, executed, and delivered, all and every such further acts, conveyances,
transfers, and assurances in law as the Trustee shall reasonably require for the
better conveying, transferring, and pledging and confirming unto the Trustee,
all and singular, the properties constituting the Trust Estate hereby
transferred and pledged, or intended so to be transferred and pledged.

        SECTION 4.04. FURTHER COVENANTS OF THE ISSUER.

                (a) The Issuer will cause financing statements and continuation
        statements with respect thereto at all times to be filed in the office
        of the Secretary of State of the State and any other jurisdiction
        necessary to perfect and maintain the security interest granted by the
        Issuer hereunder.

                (b) The Issuer will duly and punctually keep, observe and
        perform each and every term, covenant, and condition on its part to be
        kept, observed, and performed, contained in this Indenture and the other
        agreements to which the Issuer is a party pursuant to the transactions
        contemplated herein, and will punctually perform all duties required by
        the Articles of Incorporation and Bylaws of the Issuer and the laws of
        the State.

                (c) The Issuer shall be operated on the basis of its Fiscal
        Year.

                (d) The Issuer shall cause to be kept full and proper books of
        records and accounts, in which full, true, and proper entries will be
        made of all dealings, business, and affairs of the Issuer which relate
        to the Notes and any Derivative Product.

                (e) The Issuer, upon written request of the Trustee, will permit
        at all reasonable times the Trustee or its agents, accountants, and
        attorneys, to examine and inspect the property, books of account,
        records, reports, and other data relating to the Financed Eligible
        Loans, and will furnish the Trustee such other information as it may
        reasonably request. The Trustee shall be under no duty to make any such
        examination unless requested in writing to do so by the Registered
        Owners of 66% in collective aggregate principal amount of the Notes at
        the time Outstanding, and unless such Registered Owners shall have
        offered the Trustee security and indemnity satisfactory to it against
        any costs, expenses and liabilities which might be incurred thereby.

                (f) The Issuer shall cause an annual audit to be made by an
        independent auditing firm of national reputation and file one copy
        thereof with the Trustee and each Rating Agency within 150 days of the
        close of each Fiscal Year. The Trustee shall be under no obligation to
        review or otherwise analyze such audit.

                (g) The Issuer covenants that all Financed Eligible Loans upon
        receipt thereof shall be delivered to the Trustee or its agent or bailee
        to be held pursuant to this Indenture and pursuant to the Servicing
        Agreement or a Custodian Agreement.

                                       20
<PAGE>

                (h) Notwithstanding anything to the contrary contained herein,
        except upon the occurrence and during the continuance of an Event of
        Default hereunder, the Issuer hereby expressly reserves and retains the
        privilege to receive and, subject to the terms and provisions of this
        Indenture, to keep or dispose of, claim, bring suits upon or otherwise
        exercise, enforce or realize upon its rights and interest in and to the
        Financed Eligible Loans and the proceeds and collections therefrom, and
        neither the Trustee nor any Registered Owner shall in any manner be or
        be deemed to be an indispensable party to the exercise of any such
        privilege, claim or suit and the Trustee shall be under no obligation
        whatsoever to exercise any such privilege, claim or suit; provided,
        however, that the Trustee shall have and retain possession or control of
        the Financed Eligible Loans pursuant to Section 5.02 hereof (which
        Financed Eligible Loans may be held by the Trustee's agent or bailee
        pursuant to a Custodian Agreement) so long as such loans are subject to
        the lien of this Indenture.

                (i) The Issuer shall notify the Trustee and each Rating Agency
        in writing prior to entering into any Derivative Product.

        SECTION 4.05. ENFORCEMENT OF SERVICING AGREEMENTS. The Issuer shall
comply with and shall require the Servicer to comply with the following whether
or not the Issuer is otherwise in default under this Indenture:

                (a) cause to be diligently enforced and taken all reasonable
        steps, actions and proceedings necessary for the enforcement of all
        terms, covenants and conditions of all Servicing Agreements;

                (b) not permit the release of the obligations of any Servicer
        under any Servicing Agreement except in conjunction with amendments or
        modifications permitted by (h) below;

                (c) at all times, to the extent permitted by law, cause to be
        defended, enforced, preserved and protected the rights and privileges of
        the Issuer and of the Registered Owners under or with respect to each
        Servicing Agreement;

                (d) at its own expense, the Issuer shall duly and punctually
        perform and observe each of its obligations to the Servicer under the
        Servicing Agreement in accordance with the terms thereof;

                (e) the Issuer agrees to give the Trustee prompt written notice
        of each default on the part of the Servicer of its obligations under the
        Servicing Agreement coming to the Issuer's attention;

                (f) the Issuer shall not waive any default by the Servicer under
        the Servicing Agreement without the written consent of the Trustee;

                (g) the Issuer shall cause the Servicer to deliver to the
        Trustee and the Issuer, on or before June 30 of each year, beginning
        with June 30, 2004, a certificate stating that (i) a review of the
        activities of the Servicer during the preceding calendar year and of its
        performance under the Servicing Agreement has been made under the


                                       21
<PAGE>

        supervision of the officer signing such certificate and (ii) to the best
        of such officers' knowledge, based on such review, the Servicer has
        fulfilled all its obligations under the Servicing Agreement throughout
        such year, or, there has been a default in the fulfillment of any such
        obligation, specifying each such default known to such officer and the
        nature and statue thereof; and

                (h) not consent or agree to or permit any amendment or
        modification of any Servicing Agreement which will in any manner
        materially adversely affect the rights or security of the Registered
        Owners. The Issuer shall be entitled to receive and rely upon an opinion
        of its counsel that any such amendment or modification will not
        materially adversely affect the rights or security of the Registered
        Owners.

        SECTION 4.06. PROCEDURES FOR TRANSFER OF FUNDS. In any instance where
this Indenture requires a transfer of funds or money from one Fund to another, a
transfer of ownership in investments or an undivided interest therein may be
made in any manner agreeable to the Issuer and the Trustee, and in the
calculation of the amount transferred, interest on the investment which has or
will accrue before the date the money is needed in the fund to which the
transfer is made shall not be taken into account or considered as money on hand
at the time of such transfer.

        SECTION 4.07. ADDITIONAL COVENANTS WITH RESPECT TO THE ACT. The Issuer
covenants that it will cause the Trustee to be, or replace the Trustee with, an
Eligible Lender under the Act, that it will acquire or cause to be acquired
Eligible Loans originated and held only by an Eligible Lender and that it will
not dispose of or deliver any Financed Eligible Loans or any security interest
in any such Financed Eligible Loans to any party who is not an Eligible Lender
so long as the Act or Regulations adopted thereunder require an Eligible Lender
to be the owner or holder of Guaranteed Eligible Loans; provided, however, that
nothing above shall prevent the Issuer from delivering the Eligible Loans to the
Servicer or the Guarantee Agency. The Registered Owners of the Notes shall not
in any circumstances be deemed to be the owner or holder of the Guaranteed
Eligible Loans.

        The Issuer, or its designated agent, shall be responsible for each of
the following actions with respect to the Act:

                (a) the Issuer, or its designated agent, shall be responsible
        for dealing with the Secretary with respect to the rights, benefits and
        obligations under the Certificates of Insurance and the Contract of
        Insurance, and the Issuer shall be responsible for dealing with the
        Guarantee Agencies with respect to the rights, benefits and obligations
        under the Guarantee Agreements with respect to the Financed Eligible
        Loans;

                (b) the Issuer, or its designated agent, shall cause to be
        diligently enforced, and shall cause to be taken all reasonable steps,
        actions and proceedings necessary or appropriate for the enforcement of
        all terms, covenants and conditions of all Financed Eligible Loans and
        agreements in connection therewith, including the prompt payment of all
        principal and interest payments and all other amounts due thereunder;

                (c) the Issuer, or its designated agent, shall cause the
        Financed Eligible loans to be serviced by entering into the Servicing
        Agreement or other agreement with the Servicer for the collection of
        payments made for, and the administration of the accounts of, the
        Financed Eligible Loans;

                                       22
<PAGE>

                (d) the Issuer, or its designated agent, shall comply, and shall
        cause all of its officers, directors, employees and agents to comply,
        with the provisions of the Act and any regulations or rulings
        thereunder, with respect to the Financed Eligible Loans; and

                (e) the Issuer, or its designated agent, shall cause the
        benefits of the Guarantee Agreements, the Interest Subsidy Payments and
        the Special Allowance Payments to flow to the Trustee. The Trustee shall
        have no liability for actions taken at the direction of the Issuer,
        except for negligence or willful misconduct in the performance of its
        express duties hereunder. The Trustee shall have no obligation to
        administer, service or collect the loans in the Trust Estate or to
        maintain or monitor the administration, servicing or collection of such
        loans.

                (f) the Issuer, or its designated agent, shall cause each
        Financed Eligible Loan evidenced by a Master Promissory Note in the form
        mandated by Section 432(m)(1) of the Higher Education Act to be acquired
        pursuant to a Student Loan Sale Agreement containing language similar to
        the following:

                      "The [Seller] hereby represents and warrants that the
               [Seller] is transferring all of its right title and interest in
               the MPN Loan to the Trustee, that it has not assigned any
               interest in such MPN Loan (other than security interests that
               have been released or ownership interests that the [Seller] has
               reacquired) to any person other than the Trustee, and that no
               prior holder of the MPN Loan has assigned any interest in such
               MPN Loan (other than security interests that have been released
               or ownership interests that such prior holder has reacquired) to
               any person other than a predecessor in title to the [Seller]. The
               [Seller] hereby covenants that the [Seller] shall not attempt to
               transfer to any other person any interest in any MPN Loan
               assigned hereunder. The [Seller] hereby authorizes the Trustee to
               file a UCC-1 financing statement identifying the [Seller] as
               debtor and the Trustee as secured party and describing the Loans
               sold pursuant to this Agreement. The preparation or filing of
               such UCC-1 financing statement is solely for additional
               protection of the

                      Trustee's interest in the MPN Loans and shall not be
               deemed to contradict the express intent of the [Seller] and the
               Trustee that the transfer of MPN Loans under this Agreement is an
               absolute assignment of such MPN Loans and is not a transfer of
               such MPN Loans as security for a debt."

               The Trustee shall not be deemed to be the designated agent for
        the purposes of this Section 4.07 unless it has agreed in writing to be
        such agent.

        SECTION 4.08. FINANCED ELIGIBLE LOANS; COLLECTIONS THEREOF; ASSIGNMENT
THEREOF. The Issuer, through the Servicer, shall diligently collect all
principal and interest payments on all Financed Eligible Loans, and all Interest
Benefit Payments, insurance, guarantee and default claims and Special Allowance
Payments which relate to such Financed Eligible Loans. The Issuer shall cause
the filing and assignment of such claims (prior to the timely filing deadline
for such claims under the Regulations) by the Servicer. The Issuer will comply
with the Act and Regulations which apply to the Program and to such Financed
Eligible Loans.

                                       23
<PAGE>

        SECTION 4.09. APPOINTMENT OF AGENTS, ETC. The Issuer shall employ and
appoint all employees, agents, consultants and attorneys which it may consider
necessary. No member of the Board, neither singly or collectively, shall be
personally liable for any act or omission not willfully fraudulent or mala fide.

        SECTION 4.10. CAPACITY TO SUE. The Issuer shall have the power and
capacity to sue and to be sued on matters arising out of or relating to the
financing of the Financed Eligible Loans.

        SECTION 4.11. CONTINUED EXISTENCE; SUCCESSOR TO ISSUER. The Issuer
agrees that it will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights and franchises as a Nebraska
corporation, except as otherwise permitted by this Section 4.11. The Issuer
further agrees that it will not (a) sell, transfer or otherwise dispose of all
or substantially all, of its assets (except Financed Eligible Loans if such
sale, transfer or disposition will discharge this Indenture in accordance with
Article X hereof); (b) consolidate with or merge into another corporation or
entity; or (c) permit one or more other corporations or entities to consolidate
with or merge into it. The preceding restrictions in (a), (b) and (c) shall not
apply to a transaction if the transferee or the surviving or resulting
corporation or entity, if other than the Issuer, by proper written instrument
for the benefit of the Trustee, irrevocably and unconditionally assumes the
obligation to perform and observe the agreements and obligations of the Issuer
under this Indenture.

        If a transfer is made as provided in this Section 4.11, the provisions
of this Section 4.11 shall continue in full force and effect and no further
transfer shall be made except in compliance with the provisions of this Section
4.11.

        SECTION 4.12. AMENDMENT OF STUDENT LOAN PURCHASE AGREEMENTS. The Issuer
shall notify the Trustee in writing of any proposed amendments to any existing
Student Loan Purchase Agreement. No such amendment shall become effective unless
and until the Trustee consents thereto in writing. The consent of the Trustee
shall not be unreasonably withheld and shall not be withheld if the Trustee
receives an opinion of counsel acceptable to them that such an amendment is
required by the Act and is not materially prejudicial to the Registered Owners.
Notwithstanding the foregoing, however, the Trustee shall consent to an
amendment from time to time so long as it is not materially prejudicial to the
interests of the Registered Owners, and the Trustee may rely on an opinion of
counsel to such effect.

        SECTION 4.13. REPRESENTATIONS; NEGATIVE COVENANTS.

                (a) The Issuer hereby makes the following representations and
        warranties to the Trustee on which the Trustee relies in authenticating
        the Notes and on which the Registered Owners have relied in purchasing
        the Notes. Such representations and warranties shall survive the
        transfer and assignment of the Trust Estate to the Trustee.

                        (i) ORGANIZATION AND GOOD STANDING. The Issuer is duly
                organized and validly existing under the laws of the State, and
                has the power to own its assets and to transact the business in
                which it presently engages.

                                       24
<PAGE>

                        (ii) DUE QUALIFICATION. The Issuer is duly qualified to
                do business and is in good standing, and has obtained all
                material necessary licenses and approvals, in all jurisdictions
                where the failure to be so qualified, have such good standing or
                have such licenses or approvals would have a material adverse
                effect on the Issuer's business and operations or in which the
                actions as required by this Indenture require or will require
                such qualification.

                        (iii) AUTHORIZATION. The Issuer has the power, authority
                and legal right to execute, deliver and perform this Indenture
                and to grant the Trust Estate to the Trustee and the execution,
                delivery and performance of this Indenture and grant of the
                Trust Estate to the Trustee have been duly authorized by the
                Issuer by all necessary corporate action.

                        (iv) BINDING OBLIGATION. This Indenture, assuming due
                authorization, execution and delivery by the Trustee,
                constitutes a legal, valid and binding obligation of the Issuer
                enforceable against the Issuer in accordance with its terms,
                except that (A) such enforcement may be subject to bankruptcy,
                insolvency, reorganization, moratorium or other similar laws
                (whether statutory, regulatory or decisional) now or hereafter
                in effect relating to creditors' rights generally and (B) the
                remedy of specific performance and injunctive and other forms of
                equitable relief may be subject to certain equitable defenses
                and to the discretion of the court before which any proceeding
                therefor may be brought, whether a proceeding at law or in
                equity.

                        (v) NO VIOLATION. The consummation of the transactions
                contemplated by this Indenture and the fulfillment of the terms
                hereof does not conflict with, result in any breach of any of
                the terms and provisions of or constitute (with or without
                notice, lapse of time or both) a default under the
                organizational documents of the Issuer, or any material
                indenture, agreement, mortgage, deed of trust or other
                instrument to which the Issuer is a party or by which it is
                bound, or result in the creation or imposition of any lien upon
                any of its material properties pursuant to the terms of any such
                indenture, agreement, mortgage, deed of trust or other
                instrument, other than this Indenture, nor violate any law or
                any order, rule or regulation applicable to the Issuer of any
                court or of any federal or state regulatory body, administrative
                agency, or other governmental instrumentality having
                jurisdiction over the Issuer or any of its properties.

                        (vi) NO PROCEEDINGS. There are no proceedings,
                injunctions, writs, restraining orders or investigations to
                which the Issuer or any of such entity's affiliates is a party
                pending, or, to the best of such entity's knowledge, threatened,
                before any court, regulatory body, administrative agency, or
                other tribunal or governmental instrumentality (A) asserting the
                invalidity of this Indenture, (B) seeking to prevent the
                issuance of any Notes or the consummation of any of the
                transactions contemplated by this Indenture or (C) seeking any
                determination or ruling that might materially and adversely
                affect the performance by the Issuer of its obligations under,
                or the validity or enforceability of this Indenture.

                                       25
<PAGE>

                        (vii) APPROVALS. All approvals, authorizations,
                consents, orders or other actions of any person, corporation or
                other organization, or of any court, governmental agency or body
                or official, required on the part of the Issuer in connection
                with the execution and delivery of this Indenture have been
                taken or obtained on or prior to the Date of Issuance.

                        (viii) PLACE OF BUSINESS. The Issuer's place of business
                and chief executive office is 121 South 13 Street, Suite 301,
                Lincoln, NE 68508.

                        (ix) TAX AND ACCOUNTING TREATMENT. The Issuer intends to
                treat the transactions contemplated by the Student Loan Purchase
                Agreements as an absolute transfer rather than as a pledge of
                the Financed Eligible Loans from the Seller for federal income
                tax and financial accounting purposes and the Issuer will be
                treated as the owner of the Financed Eligible Loans for all
                purposes. The Issuer further intends to treat the Senior Notes
                as its indebtedness for federal income tax and financial
                accounting purposes.

                        (x) TAXES. The Issuer has filed (or caused to be filed)
                all federal, state, county, local and foreign income, franchise
                and other tax returns required to be filed by it through the
                date hereof, and has paid all taxes reflected as due thereon.
                The Issuer has taken all steps necessary to ensure that it is
                eligible to file a consolidated federal income tax return with
                Nelnet, Inc. and such returns will be filed for all taxable
                years in which the Notes are Outstanding. There is no pending
                dispute with any taxing authority that, if determined adversely
                to the Issuer, would result in the assertion by any taxing
                authority of any material tax deficiency, and the Issuer has no
                knowledge of a proposed liability for any tax year to be imposed
                upon such entity's properties or assets for which there is not
                an adequate reserve reflected in such entity's current financial
                statements.

                        (xi) LEGAL NAME. The legal name of the Issuer is "Nelnet
                Education Loan Funding, Inc.," formerly known as NEBHELP, Inc.
                and Nebraska Higher Education Loan Program, Inc.

                        (xii) BUSINESS PURPOSE. The Issuer has acquired the
                Financed Eligible Loans conveyed to it under a Student Loan
                Purchase Agreement for a bona fide business purpose and has
                undertaken the transactions contemplated herein as principal
                rather than as an agent of any other person. The Issuer has no
                subsidiaries, has adopted and operated consistently with all
                corporate formalities with respect to its operations and has
                engaged in no other activities other than those specified in
                this Indenture and the Student Loan Purchase Agreements and in
                accordance with the transactions contemplated herein and
                therein.

                        (xiii) COMPLIANCE WITH LAWS. The Issuer is in compliance
                with all applicable laws and regulations with respect to the
                conduct of its business and has obtained and maintains all
                permits, licenses and other approvals as are necessary for the
                conduct of its operations.

                                       26
<PAGE>

                        (xiv) VALID BUSINESS REASONS; No Fraudulent Transfers.
                The transactions contemplated by this Indenture are in the
                ordinary course of the Issuer's business and the Issuer has
                valid business reasons for granting the Trust Estate pursuant to
                this Indenture. At the time of each such grant: (A) the Issuer
                granted the Trust Estate to the Trustee without any intent to
                hinder, delay, or defraud any current or future creditor of the
                Issuer; (B) the Issuer was not insolvent and did not become
                insolvent as a result of any such grant; (C) the Issuer was not
                engaged and was not about to engage in any business or
                transaction for which any property remaining with such entity
                was an unreasonably small capital or for which the remaining
                assets of such entity are unreasonably small in relation to the
                business of such entity or the transaction; (D) the Issuer did
                not intend to incur, and did not believe or should not have
                reasonably believed, that it would incur, debts beyond its
                ability to pay as they become due; and (E) the consideration
                paid received by the Issuer for the grant of the Trust Estate
                was reasonably equivalent to the value of the related grant.

                        (xv) NO MANAGEMENT OF AFFAIRS OF SELLER. The Issuer is
                not and will not be involved in the day-to-day management of the
                Seller or the Issuer's parent or any affiliate.

                        (xvi) NO INTERCORPORATE TRANSFERS WITH SELLER OR
                AFFILIATES. Other than the acquisition of assets and the
                transfer of any Notes pursuant to this Indenture, the Issuer
                does not engage in and will not engage in any intercorporate
                transactions with the Seller and affiliates, except as provided
                herein with respect to Program Expenses and the Administrative
                Services Agreement or the payment of dividends to the Issuer's
                parent.

                        (xvii) ABILITY TO PERFORM. There has been no material
                impairment in the ability of the Issuer to perform its
                obligations under this Indenture.

                        (xviii) FINANCIAL CONDITION. No material adverse change
                has occurred in the Issuer's financial status since the date of
                its formation.

                        (xix) EVENT OF DEFAULT. No Event of Default has occurred
                and no event has occurred that, with the giving of notice, the
                passage of time, or both, would become an Event of Default.

                        (xx) ACQUISITION OF FINANCED ELIGIBLE LOANS LEGAL. The
                Issuer has complied with all applicable federal, state and local
                laws and regulations in connection with its acquisition of the
                Financed Eligible Loans from the Seller.

                (b) The Issuer will not:

                        (i) sell, transfer, exchange or otherwise dispose of any
                portion of the Trust Estate except as expressly permitted by
                this Indenture;

                        (ii) claim any credit on, or make any deduction from,
                the principal amount of any of the Notes by reason of the
                payment of any taxes levied or assessed upon any portion of the
                Trust Estate;

                                       27
<PAGE>

                        (iii) except as otherwise provided herein, dissolve or
                liquidate in whole or in part, except with the prior written
                consent of the Trustee, and to the extent Notes remain
                Outstanding, approval of the Registered Owners and a Rating
                Confirmation;

                        (iv) permit the validity or effectiveness of this
                Indenture, any Supplement or any grant hereunder to be impaired,
                or permit the lien of this Indenture to be amended,
                hypothecated, subordinated, terminated or discharged, or permit
                any Person to be released from any covenants or obligations
                under this Indenture, except as may be expressly permitted
                hereby;

                        (v) except as otherwise provided herein, permit any
                lien, charge, security interest, mortgage or other encumbrance
                (other than the lien of this Indenture) to be created on or
                extend to or otherwise arise upon or burden the Trust Estate or
                any part thereof or any interest therein or the proceeds
                thereof;

                        (vi) permit the lien of this Indenture not to constitute
                a valid first priority, perfected security interest in the Trust
                Estate;

                        (vii) incur or assume any indebtedness or guarantee any
                indebtedness of any Person whether secured by any Financed
                Eligible Loans under this Indenture or otherwise, except for
                such obligations as may be incurred by the Issuer in connection
                with the issuance of the Notes pursuant to this Indenture and
                unsecured trade payables in the ordinary course of its business;

                        (viii) operate such that it would be consolidated with
                its parent or any other affiliate and its separate corporate
                existence disregarded in any federal or state proceeding;

                        (ix) act as agent of any Seller or, except as provided
                in the Servicing Agreement, allow the Seller to act as its
                agent;

                        (x) allow the Seller or its parent or any other
                affiliate to pay its expenses, guarantee its obligations or
                advance funds to it for payment of expenses; or

                        (xi) consent to the appointment of a conservator or
                receiver or liquidator in any insolvency, readjustment of debt,
                marshalling of assets and liabilities or similar proceedings of
                or relating to the Issuer or of or relating to all or
                substantially all of its property, or a decree or order of a
                court or agency or supervisory authority having jurisdiction in
                the premises for the appointment of a conservator or receiver or
                liquidator in any insolvency, readjustment of debt, marshalling
                of assets and liabilities or similar proceedings, or for the
                winding-up or liquidation of its affairs, shall have been
                entered against the Issuer; or the Issuer shall not consent to
                the appointment of a receiver, conservator or liquidator in any
                insolvency, readjustment of debt, marshalling of assets and
                liabilities, voluntary liquidation or similar proceedings of or
                relating to the Issuer or of or relating to all or substantially
                all of its property; or admit in writing its inability to pay


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<PAGE>

                its debts generally as they become due, file a petition to take
                advantage of any applicable insolvency, bankruptcy or
                reorganization statute, make an assignment for the benefit of
                its creditors or voluntarily suspend payment of its obligations.

                (c) The Issuer makes the following representations and
        warranties as to the Trust Estate which is granted to the Trustee
        hereunder on such date, on which the Trustee relies in accepting the
        Trust Estate. Such representations and warranties shall survive the
        grant of the Trust Estate to the Trustee pursuant to this Indenture:

                        (i) FINANCED ELIGIBLE LOANS. Each Financed Eligible Loan
                acquired by the Issuer shall constitute an Eligible Loan and
                contain the characteristics found in a Student Loan Purchase
                Agreement.

                        (ii) SCHEDULE OF FINANCED ELIGIBLE LOANS. The
                information set forth in each Schedule of Financed Eligible
                Loans is true and correct in all material respects as of the
                opening of business on the Date of Issuance.

                        (iii) GRANT. It is the intention of the Issuer that the
                transfer herein contemplated constitutes a grant of the Financed
                Eligible Loans to the Trustee.

                        (iv) ALL FILINGS MADE. All filings (including, without
                limitation, UCC filings) necessary in any jurisdiction to give
                the Trustee a first priority perfected ownership and security
                interest in the Trust Estate, including the Financed Eligible
                Loans, have been made no later than the Date of Issuance and
                copies of the file-stamped financing statements shall be
                delivered to the Trustee within five Business Days of receipt by
                the Issuer or its agent from the appropriate secretary of state.
                The Issuer has not caused, suffered or permitted any lien,
                pledges, offsets, defenses, claims, counterclaims, charges or
                security interest with respect to the Financed Eligible Loans
                (other than the security interest created in favor of the
                Trustee) to be created.

                        (v) TRANSFER NOT SUBJECT TO BULK TRANSFER ACT. Each
                grant of the Financed Eligible Loans by the Issuer pursuant to
                this Indenture is not subject to the bulk transfer act or any
                similar statutory provisions in effect in any applicable
                jurisdiction.

                        (vi) NO TRANSFER TAXES DUE. Each grant of the Financed
                Eligible Loans (including all payments due or to become due
                thereunder) by the Issuer pursuant to this Indenture is not
                subject to and will not result in any tax, fee or governmental
                charge payable by the Issuer or the Seller to any federal, state
                or local government.

                        (vii) NOT AN INVESTMENT COMPANY. The Issuer is not an
                "investment company" within the meaning of the Investment
                Company Act of 1940, as amended, or is exempt from all
                provisions of such Act.

                                       29
<PAGE>

                        (viii) BINDING OBLIGATIONS. This Indenture, the Notes
                and each Obligation constitutes the legal, valid and binding
                obligation of the Issuer, enforceable against the Issuer in
                accordance with its terms, except (A) as such enforceability may
                be limited by applicable bankruptcy, insolvency, reorganization,
                moratorium or other similar laws now or hereafter in effect,
                affecting the enforcement of creditors' rights in general; and
                (B) as such enforceability may be limited by general principles
                of equity (whether considered in a suit at law or in equity).

                        (ix) VALID SECURITY INTEREST. This Indenture creates a
                valid and continuing security interest (as defined in the
                Uniform Commercial Code as in effect in the State of Nebraska)
                in the Financed Eligible Loans in favor of the Trustee, and is
                enforceable as such against any creditors of the Issuer.

        SECTION 4.14. ADDITIONAL COVENANTS. So long as any of the Notes are
Outstanding:

                (a) The Issuer shall not engage in any business or activity
        other than in connection with the activities contemplated hereby and in
        the Student Loan Purchase Agreements, and in connection with the
        issuance of Notes.

                (b) The Issuer shall not consolidate or merge with or into any
        other entity or convey or transfer its properties and assets
        substantially as an entirety to any entity except as otherwise provided
        herein.

                (c) The funds and other assets of the Issuer shall not be
        commingled with those of any other individual, corporation, estate,
        partnership, joint venture, association, joint stock company, trust,
        unincorporated organization, or government or any agency or political
        subdivision thereof.

                (d) The Issuer shall not be, become or hold itself out as being
        liable for the debts of any other party.

                (e) The Issuer shall act solely in its own name and through its
        duly authorized officers or agents in the conduct of its business, and
        shall conduct its business so as not to mislead others as to the
        identity of the entity with which they are concerned.

                (f) The Issuer shall maintain its records and books of account
        and shall not commingle its records and books of account with the
        records and books of account of any other Person. The books of the
        Issuer may be kept (subject to any provision contained in the statutes)
        inside or outside the State at such place or places as may be designated
        from time to time by the board of trustees or in the bylaws of the
        Issuer.

                (g) All actions of the Issuer shall be taken by a duly
        authorized officer or agent of the Issuer.

                (h) The Issuer shall not amend, alter, change or repeal any
        provision contained in this Section 4.14 without (i) the prior written
        consent of the Trustee and (ii) a Rating Confirmation from each Rating
        Agency rating any Notes Outstanding (a copy of which shall be provided
        to the Trustee).

                                       30
<PAGE>

                (i) The Issuer shall not amend its Articles of Incorporation
        without first obtaining the prior written consent of each Rating Agency.

                (j) All audited financial statements of the Issuer that are
        consolidated with those of any affiliate thereof will contain detailed
        notes clearly stating that (i) all of the Issuer's assets are owned by
        the Issuer, and (ii) the Issuer is a separate entity with creditors who
        have received ownership and/or security interests in the Issuer's
        assets.

                (k) The Issuer will strictly observe legal formalities in its
        dealings with the Seller, the Issuer's parent or any affiliate thereof,
        and funds or other assets of the Issuer will not be commingled with
        those of the Seller, the Issuer's parent or any other affiliate thereof.
        The Issuer shall not maintain joint bank accounts or other depository
        accounts to which the Seller, the Issuer's parent or any other affiliate
        has independent access. None of the Issuer's funds will at any time be
        pooled with any funds of the Seller, the Issuer's parent or any other
        affiliate.

                (l) The Issuer will maintain an arm's length relationship with
        the Seller (and any affiliate). Any Person that renders or otherwise
        furnishes services to the Issuer will be compensated by the Issuer at
        market rates for such services it renders or otherwise furnishes to the
        Issuer except as otherwise provided in this Indenture. Except as
        contemplated in this Indenture, the Student Loan Purchase Agreements or
        the Servicing Agreement, the Issuer will not hold itself out to be
        responsible for the debts of the Seller, the parent or the decisions or
        actions respecting the daily business and affairs of the Seller or
        parent.

        SECTION 4.15. PROVIDING OF NOTICE. The Issuer, upon learning of any
failure on its part to observe or perform in any material respect any covenant,
representation or warranty of the Issuer set forth in this Indenture or the
Student Loan Purchase Agreements, or of any failure on the part of the Seller to
observe or perform in any material respect any covenant, representation or
warranty of the Seller set forth in the Student Loan Purchase Agreements, shall
promptly notify the Trustee, the Servicer and each Rating Agency of such
failure.

        SECTION 4.16. REPORTS BY ISSUER. The Issuer will:

                (a) file with the Trustee, within 15 days after the Issuer is
        required to file the same with the Commission, copies of the annual
        reports and of the information, documents and other reports (or copies
        of such portions of any of the foregoing as the Commission may from time
        to time by rules and regulations prescribe) which the Issuer may be
        required to file with the Commission pursuant to Section 13 or Section
        15(d) of the Securities Exchange Act;

                (b) file with the Trustee and the Commission, in accordance with
        rules and regulations prescribed from time to time by the Commission,
        such additional information, documents and reports with respect to
        compliance by the Issuer with the conditions and covenants of this
        Indenture as may be required from time to time by such rules and
        regulations;

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<PAGE>

                (c) transmit by mail to the Registered Owners of Notes, within
        30 days after the filing thereof with the Trustee, in the manner and to
        the extent provided in TIA Section 313(c), such summaries of any
        information, documents and reports required to be filed by the Issuer
        pursuant to clauses (a) and (b) of this Section 4.16 as may be required
        by rules and regulations prescribed from time to time by the Commission;
        and

                (d) the Trustee shall mail to each Registered Owner, within 60
        days after each December 31 beginning with the December 31 following the
        date of this Indenture, a brief report as of such December 31 that
        complies with TIA Section 313(a) if required by said section. The
        Trustee shall also comply with TIA Section 313(b). A copy of each such
        report required pursuant to TIA Section 313(a) or (b) shall, at the time
        of such transaction to Registered Owners, be filed by the Trustee with
        the Commission and with each securities exchange, if any, upon which the
        Notes are listed, provided that the Issuer has previously notified the
        Trustee of such listing.

        The Trustee may conclusively rely and accept such reports from the
Issuer as fulfilling the requirements of this Section 4.16, with no further duty
to know, determine or examine such reports or comply with the prescribed timing,
rules and regulations of the Commission.

        SECTION 4.17. STATEMENT AS TO COMPLIANCE. The Issuer will deliver to the
Trustee, within 75 days after the end of each fiscal year, a brief certificate
from an Authorized Officer including (i) a current list of the officers and
directors of the Issuer and a list of Authorized Representatives, and (ii) a
statement of the Issuer's compliance with all conditions and covenants under
this Indenture and, in the event of any noncompliance, specifying such
noncompliance and the nature and status thereof. For purposes of this Section
4.17, such compliance shall be determined without regard to any period of grace
or requirement of notice under this Indenture.

        SECTION 4.18. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Issuer covenants that if:

                (a) default is made in the payment of any installment of
        interest, if any, on any Notes when such interest becomes due and
        payable and such default continues for a period of 30 days; or

                (b) default is made in the payment of the principal of (or
        premium, if any, on) any Notes at its Maturity,

then the Issuer will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Registered Owners, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of
interest, if any, at the rate or rates borne by or provided for in such Notes,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel.

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<PAGE>

        If the Issuer fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Issuer or any other obligor upon such Notes of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Issuer or any other obligor upon such Notes,
wherever situated.

        If an Event of Default with respect to Notes occurs and is continuing,
the Trustee may, after being indemnified to its satisfaction and in its
discretion, proceed to protect and enforce its rights and the rights of the
Registered Owners of Notes and any related coupons by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

        SECTION 4.19. REPRESENTATIONS OF THE ISSUER REGARDING THE TRUSTEE'S
SECURITY INTEREST. The Issuer hereby represents and warrants for the benefit of
the Trustee and the Noteholders as follows:

                (a) This Indenture creates a valid and continuing security
        interest (as defined in the applicable Uniform Commercial Code in effect
        in the State of Nebraska) in the Financed Eligible Loans in favor of the
        Trustee, which security interest is prior to all other liens, charges,
        security interests, mortgages or other encumbrances, and is enforceable
        as such as against creditors of and purchasers from the Issuer.

                (b) The Act deems the Financed Eligible Loans to constitute
        accounts within the meaning of the applicable UCC as in effect in the
        State of Nebraska for the purposes of perfecting a security interest in
        the Financed Eligible Loans.

                (c) The Issuer (or the Eligible Lender Trustee on behalf of the
        Issuer) owns and has good and marketable title to the Financed Eligible
        Loans free and clear of any lien, charge, security interest, mortgage or
        other encumbrance, claim or encumbrance of any Person.

                (d) The Issuer has caused or will have caused, within 10 days,
        the filing of all appropriate financing statements in the proper filing
        office in the appropriate jurisdictions under applicable law in order to
        perfect the security interest in the Financed Eligible Loans granted to
        the Trustee hereunder.

                (e) All executed copies of each promissory note that constitute
        or evidence the Financed Eligible Loans have been delivered to either
        the Trustee or the Custodian.

                (f) The Issuer has received a written acknowledgment from each
        Custodian that such Custodian is holding the promissory notes that
        constitute or evidence the Financed Eligible Loans solely on behalf and
        for the benefit of the Trustee.

                (g) Other than the security interest granted to the Trustee
        pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
        granted a security interest in, or otherwise conveyed any of the
        Financed Eligible Loans. The Issuer has not authorized the filing of and


                                       33
<PAGE>

        is not aware of any financing statements against the Issuer that include
        a description of collateral covering the Financed Eligible Loans other
        than any financing statement relating to the security interest granted
        to the Trustee hereunder or that has been terminated. The Issuer is not
        aware of any judgment or tax lien filings against the Issuer.

        SECTION 4.20. COVENANTS OF THE ISSUER REGARDING THE TRUSTEE'S SECURITY
INTEREST. The Issuer hereby covenants for the benefit of the Trustee and the
Noteholders as follows:

                (a) The Trustee shall not waive any of the representations and
        warranties set forth in Section 4.19 above.

                (b) The Issuer shall take all steps necessary, and shall cause
        the Servicers to take all steps necessary and appropriate, to maintain
        the perfection and priority of the Trustee's security interest in the
        Financed Eligible Loans.

        SECTION 4.21. TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, business and franchise tax purposes, the Notes (other than the
Junior-Subordinate Notes) will qualify as indebtedness of the Issuer. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of its Note, agree to treat the Notes (other than the Junior-Subordinate Notes)
for federal, state and local income, business and franchise tax purposes as
indebtedness of the Issuer.

        SECTION 4.22. OPINIONS AS TO INDENTURE TRUST ESTATE.

                (a) On the Closing Date, the Issuer shall furnish to the Trustee
        an Opinion of Counsel either stating that, in the opinion of such
        counsel, such action has been taken with respect to the recording and
        filing of this Indenture, any Supplemental Indentures hereto, and any
        other requisite documents, and with respect to the execution and filing
        of any financing statements and continuation statements, as are
        necessary to perfect and make effective the lien and security interest
        of this Indenture and reciting the details of such action, or stating
        that, in the opinion of such counsel, no such action is necessary to
        make such lien and security interest effective.

                (b) On or before March 31, in each calendar year, beginning on
        March 31, 2004, the Issuer shall furnish to the Trustee an Opinion of
        Counsel either stating that, in the opinion of such counsel, such action
        has been taken with respect to the recording, filing, re-recording and
        refiling of this Indenture, any Supplemental Indentures hereto and any
        other requisite documents and with respect to the execution and filing
        of any financing statements and continuation statements as are necessary
        to maintain the lien and security interest created by this Indenture and
        reciting the details of such action or stating that in the opinion of
        such counsel no such action is necessary to maintain such lien and
        security interest. Such Opinion of Counsel shall also describe the
        recording, filing, re-recording and refiling of this Indenture, any
        Supplemental Indentures hereto and any other requisite documents and the
        execution and filing of any financing statements and continuation
        statements that will, in the opinion of such counsel, be required to
        maintain the lien and security interest of this Indenture until March
        31, in the following calendar year.

                                       34
<PAGE>

                                   ARTICLE V

                                      FUNDS

        SECTION 5.01. CREATION AND CONTINUATION OF FUNDS AND ACCOUNTS.

                (a) There are hereby created and established the following Funds
        to be held and maintained by the Trustee for the benefit of the
        Registered Owners:

                (i) Acquisition/Redemption Fund;

                (ii) Collection Fund; and

                (iii) Reserve Fund.

                (b) The Operating Fund has previously been established by the
        Issuer, is hereby continued, does not constitute a Fund within the
        meaning of this Indenture, and is held by a depository bank of the
        Issuer for the benefit of the Issuer; and the Registered Owners shall
        have no right, title or interest therein.

        The Trustee is hereby authorized for the purpose of facilitating the
administration of the Trust Estate and for the administration of any Notes
issued hereunder to create further Accounts or Subaccounts in any of the various
Funds and Accounts established hereunder which are deemed necessary or
desirable.

        SECTION 5.02. ACQUISITION/REDEMPTION FUND. There shall be deposited into
the Acquisition/Redemption Fund amounts described in any Supplemental Indenture,
any deposit of funds from the Issuer, moneys from proceeds of any Notes and
moneys transferred thereto from the Collection Fund pursuant to Section 5.03
hereof. Financed Eligible Loans shall be held by the Trustee or its agent or
bailee (including the Servicer) and shall be pledged to the Trust Estate and
accounted for as a part of the Acquisition/Redemption Fund.

        Moneys on deposit in the Acquisition/Redemption Fund shall be used, upon
Issuer Order, (i) solely to pay costs of issuance of the Notes, (ii) to redeem
Notes in accordance with the provisions of any Supplemental Indenture, (iii) to
make Principal Reduction Payments on any Principal Reduction Payment Date in
accordance with the provisions of any Supplemental Indenture, and (iv) upon
receipt by the Trustee of an Eligible Loan Acquisition Certificate, to acquire
Eligible Loans at a price which would permit the results of cash flow analyses
provided to each Rating Agency on any Date of Issuance to be sustained as
certified to the Trustee on the Acquisition Certificate; provided that such
price may be increased if Rating Confirmation is obtained, based on new cash
flow analyses containing such assumptions as the Issuer shall reasonably
determine. Any such Issuer Order or Eligible Loan Acquisition Certificate shall
state that such proposed use of moneys in the Acquisition/Redemption Fund is in
compliance with the provisions of this Indenture. If the Issuer determines that
all or any portion of such moneys cannot be so used, then an Authorized
Representative of the Issuer may, by Issuer Order, direct the Trustee to redeem
Notes in accordance with any Supplemental Indenture.

                                       35
<PAGE>

        Notwithstanding the foregoing, if on any Note Payment Date there are not
sufficient moneys on deposit in the Collection Fund to make the transfers
required by Section 5.03(b)(i) through (vii) hereof, then, an amount equal to
any such deficiency may, upon Issuer Order, be transferred directly from the
Acquisition/Redemption Fund.

        While the Issuer will be the beneficial owner of the Financed Eligible
Loans and the Registered Owners will have a security interest therein, it is
understood and agreed that the Eligible Lender Trustee will be the legal owner
thereof and will have a security interest in the Financed Eligible Loans for and
on behalf of the Registered Owners. The notes representing the Financed Eligible
Loans will be held in the name of the Eligible Lender Trustee for the account of
the Issuer, for the benefit of the Noteholders.

        Financed Eligible Loans shall be sold, transferred or otherwise disposed
of (other than for consolidation, serialization or transfer to a Guaranty
Agency) by the Trustee free from the lien of this Indenture at any time pursuant
to an Issuer Order and if the Trustee is provided with the following:

                (a) an Issuer Order stating the sale price and directing that
        Financed Eligible Loans be sold, transferred or otherwise disposed of
        and delivered to:

                        (i) if the Eligible Loan is originated under the Act and
                the Act requires any such Eligible Loan to be held only by an
                Eligible Lender, an Eligible Lender under the Act whose name
                shall be specified; or

                        (ii) the trustee under another indenture securing notes
                issued by the Issuer; and

                (b) a certificate signed by an Authorized Representative of the
        Issuer to the effect that:

                        (i) the disposition price is equal to or in excess of
                the principal amount thereof (plus accrued interest) or equal to
                or in excess of the purchase price paid by the Issuer for such
                Financed Eligible Loan (less principal amounts received with
                respect to such Financed Eligible Loan); or

                        (ii) the disposition price is lower than the principal
                amount thereof (plus accrued interest), and (A) the Issuer
                reasonably believes that the Revenues expected to be received
                (after giving effect to such disposition) would be at least
                equal to the Revenues expected to be received assuming no such
                sale, transfer or other disposition occurred, or (B) the Issuer
                shall remain able to pay debt service on the Notes and make
                payment on any other Obligations on a timely basis (after giving
                effect to such sale, transfer or other disposition) whereas it
                would not have been able to do so on a timely basis if it had
                not sold, transferred or disposed of the Financed Eligible Loans
                at such discounted amount, or (C) the Aggregate Market Value of
                the Trust Estate (after giving effect to such sale, transfer or
                other disposition) will be at least equal to 100% of the
                aggregate principal amount of the Obligations plus accrued
                interest, or (D) the amount for which the Financed Eligible
                Loans are being sold, assigned, transferred or disposed of is
                equal to the purchase price paid by the Issuer for such Financed
                Eligible Loans (less principal amounts received with respect to
                such Financed Eligible Loans).

                                       36
<PAGE>

        Further, Financed Eligible Loans shall also be sold, transferred or
otherwise disposed of by the Trustee pursuant to an Issuer Order in which the
Issuer determines that such disposition of Financed Eligible Loans from the
Trust Estate is necessary in order to avoid the occurrence of an Event of
Default hereunder or to avoid any default in the payment obligations of the
Issuer under any reimbursement agreement, in such amount and at such times and
prices as may be specified in such Issuer Order. The Trustee, following receipt
of the foregoing and of a certificate of the Issuer indicating that such
purchaser or transferee is one of the entities described in clause (a) above, if
applicable, shall deliver such Financed Eligible Loans free from the lien of
this Indenture upon the receipt of the purchase price or consideration specified
in the Issuer Order, in compliance with the foregoing. The proceeds to be
received upon any disposition may consist of cash, Investment Securities and/or
Eligible Loans.

        SECTION 5.03. COLLECTION FUND.

                (a) The Trustee shall deposit into the Collection Fund amounts
        described in any Supplemental Indenture, all Revenues derived from
        Financed Eligible Loans acquired by the Issuer, all other Revenue
        derived from moneys or assets on deposit in the Acquisition/Redemption
        Fund and the Reserve Fund, all Counterparty Payments and any other
        amounts deposited thereto upon receipt of an Issuer Order. All
        Recoveries of Principal constituting a portion of the Revenue deposited
        in the Collection Fund and so identified to the Trustee by the Issuer
        shall be transferred, on a monthly basis, to the Acquisition/Redemption
        Fund. Upon receipt of an Issuer Order substantially in the form of
        Exhibit B hereto, directing the same, moneys in the Collection Fund
        shall be used, on any date, to make a transfer to the Operating Fund,
        subject to Section 5.05 hereof. Upon receipt of an Issuer Order
        directing the same, moneys in the Collection Fund shall be used, on any
        date, to fund the acquisition of Add-on Consolidation Loans during the
        related Add-on Period to the extent moneys are not otherwise available
        therefor in the Acquisition/Redemption Fund. The Issuer shall provide
        the Trustee with an Issuer Order with respect to all Issuer Derivative
        Payments and carry-over interest amounts, which Issuer Order the Trustee
        may conclusively rely on.

                (b) In addition, on each Note Payment Date and Derivative
        Payment Date, money in the Collection Fund shall be used and transferred
        to other funds or Persons in the following order of precedence (any
        money not so transferred or paid to remain in the Collection Fund until
        subsequently applied pursuant to this Section 5.03(b)):

                        (i) on a parity basis, to pay interest due on any Senior
                Notes on such Note Payment Date and any Issuer Derivative
                Payment secured on a parity with the Senior Notes due on such
                Derivative Payment Date;

                        (ii) on a parity basis, to pay the principal of or
                premium, if any, on any Senior Notes due on such Note Payment
                Date (if such Note Payment Date is a Stated Maturity or
                mandatory sinking fund redemption date with respect to such
                Senior Notes);

                                       37
<PAGE>

                        (iii) on a parity basis, to pay interest due on any
                Subordinate Notes on such Note Payment Date and any Issuer
                Derivative Payment secured on a parity with the Subordinate
                Notes due on such Derivative Payment Date;

                        (iv) on a parity basis, to pay the principal of or
                premium, if any, on any Subordinate Notes due on such Note
                Payment Date (if such Note Payment Date is a Stated Maturity or
                mandatory sinking fund redemption date with respect to such
                Subordinate Notes);

                        (v) on a parity basis, to pay interest on
                Junior-Subordinate Notes on such Note Payment Date and to make
                any Issuer Derivative Payment secured on a parity with such
                Junior-Subordinate Notes due on such Derivative Payment Date;

                        (vi) on a parity basis, to pay the principal of or
                premium, if any, on any Junior-Subordinate Notes due on such
                Note Payment Date (if such Note Payment Date is a Stated
                Maturity or mandatory sinking fund redemption date with respect
                to such Junior-Subordinate Notes);

                        (vii) to the Reserve Fund the amount, if any, required
                by Section 5.04 hereof;

                        (viii) upon receipt of an Issuer Order, to pay interest
                accrued on the interest carryover amounts of the Senior Notes,
                the interest carryover amounts of the Senior Notes, to pay
                interest accrued on the interest carryover amounts of the
                Subordinate Notes, the interest carryover amounts of the
                Subordinate Notes, to pay interest accrued on the interest
                carryover amounts of the Junior-Subordinate Notes, the interest
                carryover amounts of the Junior-Subordinate, in that order of
                priority provided, however, on any Payment Date, any such amount
                shall be allocated first to any Notes being redeemed on such
                Payment Date;

                        (ix) upon receipt of an Issuer Order, to pay unpaid
                Termination Payments due on a Derivative Payment Date and any
                other unpaid Issuer Derivative Payment in the following order of
                priority: FIRST, to a Counterparty who has provided a Derivative
                Product secured on a parity with the Senior Notes; SECOND, to a
                Counterparty who has provided a Derivative Product secured on a
                parity with the Subordinate Notes; THIRD, to a Counterparty who
                has provided a Derivative Product secured on a parity with the
                Junior-Subordinate Notes;

                        (x) at the option of the Issuer and upon Issuer Order,
                to the Acquisition/Redemption Fund; and

                        (xi) at the option of the Issuer and upon Issuer Order,
                to the Issuer to the extent permitted by Section 5.06 hereof.

        SECTION 5.04. RESERVE FUND.

                (a) The Trustee shall deposit to the Reserve Fund the amount, if
        any, specified in each Supplemental Indenture. On each Note Payment
        Date, to the extent there are insufficient moneys in the Collection Fund


                                       38
<PAGE>

        to make the transfers required by Sections 5.03(b)(i) through (vi)
        hereof, then, the amount of such deficiency shall be paid directly from
        the Reserve Fund if such deficiency has not been paid from the
        Acquisition/Redemption Fund.

                (b) If the Reserve Fund is used for the purposes described in
        Section 5.04(a) hereof, the Trustee shall restore the Reserve Fund to
        the Reserve Fund Requirement with respect thereto by transfers from the
        Collection Fund on the next Note Payment Date pursuant to Section
        5.03(b)(vii) hereof or from the Acquisition/Redemption Fund pursuant to
        Section 5.02 hereof. If the full amount required to restore the Reserve
        Fund to the applicable Reserve Fund Requirement is not available in the
        Collection Fund on such next succeeding Note Payment Date, the Trustee
        shall continue to transfer funds from the Collection Fund as they become
        available and in accordance with Section 5.03(b)(vii) until the
        deficiency in the Reserve Fund has been eliminated.

                (c) On any day that the amount in the Reserve Fund exceeds the
        Reserve Fund Requirement with respect thereto for any reason, the
        Trustee, at the direction of the Issuer, shall transfer the excess to
        the Acquisition/Redemption Fund. Moneys in the Reserve Fund shall not be
        used to pay principal on the Notes, other than on a Stated Maturity Date
        or in connection with the defeasance of this Indenture in accordance
        with Article X hereof.

        SECTION 5.05. OPERATING FUND. The Trustee shall deposit to the Operating
Fund or transfer to the Issuer's depository bank if not the Trustee, the amount,
if any, specified in each Supplemental Indenture. The Operating Fund is a
special fund created with a depository bank of the Issuer and shall be used to
pay Program Expenses. The Operating Fund shall be held by such depository bank
of the Issuer, and no Registered Owner shall have any right, title or interest
in the Operating Fund. Amounts deposited in the Operating Fund shall be used to
pay Program Expenses.

        The amount deposited in the Operating Fund by transfer from the
Collection Fund and, if necessary, from the Acquisition/Redemption Fund, and the
schedule of deposits shall be determined by the Issuer. The Issuer shall certify
that the amount so transferred in any one Fiscal Year shall not exceed the
amount budgeted by the Issuer as Program Expenses for such Fiscal Year with
respect to the Notes and as may be limited by a Supplemental Indenture, and
shall not exceed the amount designated therefor in the cash flows provided to
each Rating Agency on each Date of Issuance, unless the Issuer, after furnishing
each Rating Agency with revised cash flows, shall have received a Rating
Confirmation. The Issuer shall provide the Trustee with an Issuer Order from
time to time as to the amount to be transferred, and the Trustee may rely upon
such Issuer certification as set forth in this section.

        At any time in order to meet expenses which have been incorporated in an
amended budget, the Issuer may requisition from the Trustee the amount which it
is anticipated will be required to pay the Program Expenses not in excess of the
amount budgeted with respect to the Notes for the period to the next deposit
into the Operating Fund. The requisition, in the form of an Issuer Order, shall
include a statement that the amount requisitioned, when combined with the amount
requisitioned previously in the Fiscal Year, does not exceed the amount
currently budgeted for that year as Program Expenses or as may be further
limited by a Supplemental Indenture, and shall not exceed the amount designated
therefor in the cash flows provided to each Rating Agency on each Date of
Issuance, unless the Issuer, after furnishing each Rating Agency with revised
cash flows, shall have received a Rating Confirmation.

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<PAGE>

        Upon the receipt of such requisition, the Trustee shall withdraw the
amount requisitioned from the Collection Fund, and if necessary, from the
Acquisition/Redemption Fund (or so much thereof as is then on deposit in such
Funds) and transfer the same into the Operating Fund. The Issuer may request
that the Trustee pay the requisitioned amount in installments as specified by
the Issuer. In the event there is not sufficient money on hand in the Collection
Fund and the Acquisition/Redemption Fund to transfer the full amount
requisitioned, the Trustee shall notify the Issuer and the Issuer shall then
determine the amount to be transferred.

        SECTION 5.06. TRANSFERS TO ISSUER. Transfers from the Collection Fund to
the Issuer may be made in accordance with Section 5.03(b)(xi); provided,
however, that no transfer of assets to the Issuer (other than pursuant to the
Operating Fund as otherwise permitted in Article V of the Indenture) shall be
made if there is not on deposit in the Reserve Fund an amount equal to at least
the Reserve Fund Requirement; and further provided, that no transfer shall be
made to the Issuer unless the Issuer certifies that immediately after taking
into account any such transfer, the Aggregate Market Value of the assets in the
Trust Estate will be equal to the greater of at least _____% of the unpaid
principal amount of the Senior Notes Outstanding and Subordinate Notes
Outstanding.

        The amounts so transferred to the Issuer may be used for any proper
purpose of the Issuer and investment earnings thereon shall be the property of
the Issuer.

        SECTION 5.07. INVESTMENT OF FUNDS HELD BY TRUSTEE. The Trustee shall
invest money held for the credit of any Fund or Account or Subaccount held by
the Trustee hereunder as directed in writing (or orally, confirmed in writing)
by an Authorized Representative of the Issuer, to the fullest extent practicable
and reasonable, in Investment Securities which shall mature or be redeemed at
the option of the holder prior to the respective dates when the money held for
the credit of such Fund or Account will be required for the purposes intended.
In the absence of any such direction and to the extent practicable, the Trustee
shall invest amounts held hereunder in those Investment Securities described in
clause (a) of the definition of the Investment Securities. All income and
earning on such investments shall be transferred monthly to the Collection Fund.
The Trustee and the Issuer hereby agree that unless an Event of Default shall
have occurred hereunder, the Issuer acting by and through an Authorized
Representative shall be entitled to, and shall, provide written direction or
oral direction confirmed in writing to the Trustee with respect to any
discretionary acts required or permitted of the Trustee under any Investment
Securities and the Trustee shall not take such discretionary acts without such
written direction.

        The Investment Securities purchased shall be held by the Trustee and
shall be deemed at all times to be part of such Fund or Account or Subaccounts
or combination thereof, and the Trustee shall inform the Issuer of the details
of all such investments. Upon direction in writing (or orally, confirmed in
writing) from an Authorized Representative of the Issuer, the Trustee shall use


                                       40
<PAGE>

its best efforts to sell at the best price obtainable, or present for
redemption, any Investment Securities purchased by it as an investment whenever
it shall be necessary to provide money to meet any payment from the applicable
Fund. The Trustee shall advise the Issuer in writing, on or before the fifteenth
day of each calendar month (or such later date as reasonably consented to by the
Issuer), of all investments held for the credit of each Fund in its custody
under the provisions of this Indenture as of the end of the preceding month and
the value thereof, and shall list any investments which were sold or liquidated
for less than their Value at the time thereof.

        Money in any Fund constituting a part of the Trust Estate may be pooled
for the purpose of making investments and may be used to pay accrued interest on
Investment Securities purchased. The Trustee and its affiliates may act as
principal or agent in the acquisition or disposition of any Investment
Securities.

        Notwithstanding the foregoing, the Trustee shall not be responsible or
liable for any losses on investments made by it hereunder or for keeping all
Funds held by it, fully invested at all times, its only responsibility being to
comply with the investment instructions of the Issuer or its designee in a
non-negligent manner.

        The Issuer acknowledges that to the extent the regulations of the
Comptroller of the Currency or other applicable regulatory agency grant the
Issuer the right to receive brokerage confirmations of security transactions,
the Issuer waives receipt of such confirmations.

        SECTION 5.08. INVESTMENT SECURITIES. Any investment of funds in
Investment Securities shall be held by a financial institution in accordance
with the following requirements:

                (a) all Investment Securities shall be held in an account with
        such financial institution in the name of the Trustee;

                (b) all Investment Securities held in such account shall be
        delivered to the Trustee in the following manner:

                        (i) with respect to bankers' acceptances, commercial
                paper, negotiable certificates of deposit and other obligations
                that constitute "instruments" within the meaning of Section
                9-102(a)(47) of the UCC (other than certificated securities) and
                are susceptible of physical delivery, transferred to the Trustee
                by physical delivery to the Trustee, endorsed to, or registered
                in the name of, the Trustee or its nominee or endorsed in blank;
                or such additional or alternative procedures as may hereafter
                become appropriate to effect the complete transfer of ownership
                of any such Investment Securities to the Trustee free of any
                adverse claims, consistent with changes in applicable law or
                regulations or the interpretation thereof;

                        (ii) with respect to a "certificated security" (as
                defined in Section 8-102(a)(4) of the UCC), transferred:

                                (A) by physical delivery of such certificated
                        security to the Trustee, provided that if the


                                       41
<PAGE>

                        certificated security is in registered form, it shall be
                        endorsed to, or registered in the name of, the Trustee
                        or endorsed in blank;

                                (B) by physical delivery of such certificated
                        security in registered form to a "securities
                        intermediary" (as defined in Section 8-102(a)(14) of the
                        UCC) acting on behalf of the Trustee if the certificated
                        security has been specially endorsed to the Trustee by
                        an effective endorsement;

                        (iii) with respect to any security issued by the U.S.
                Treasury, the Federal Home Loan Mortgage Corporation or by the
                Federal National Mortgage Association that is a book entry
                security held through the Federal Reserve System pursuant to
                Federal book entry regulations, the following procedures, all in
                accordance with applicable law, including applicable federal
                regulations and Articles 8 and 9 of the UCC: book entry
                registration of such property to an appropriate book entry
                account maintained with a Federal Reserve Bank by a securities
                intermediary which is also a "depositary" pursuant to applicable
                federal regulations and issuance by such securities intermediary
                of a deposit advice or other written confirmation of such book
                entry registration to the Trustee of the purchase by the
                securities intermediary on behalf of the Trustee of such book
                entry security; the making by such securities intermediary of
                entries in its books and records identifying such book entry
                security held through the Federal Reserve System pursuant to
                Federal book entry regulations as belonging to the Trustee and
                indicating that such securities intermediary holds such book
                entry security solely as agent for the Trustee; or such
                additional or alternative procedures as may hereafter become
                appropriate to effect complete transfer of ownership of any such
                Investment Securities to the Trustee free of any adverse claims,
                consistent with changes in applicable law or regulations or the
                interpretation thereof;

                        (iv) with respect to any "uncertificated security" (as
                defined in Section 8-102(a)(18) of the UCC) that is not governed
                by clause (iii) above, transferred:

                                (A) (1) by registration to the Trustee as the
                        registered owner thereof, on the books and records of
                        the issuer thereof; or

                                (2) by registration to another Person (not a
                        securities intermediary) that either becomes the
                        registered owner of the uncertificated security on
                        behalf of the Trustee or, having become the registered
                        owner, acknowledges that it holds for the Trustee; or

                                (B) by the issuer thereof having agreed that it
                        will comply with instructions originated by the Trustee
                        without further consent of the registered owner thereof;

                                       42
<PAGE>

                        (v) with respect to any "security entitlement" (as
                defined in Section 8-102(a)(17) of the UCC):

                                (A) if a securities intermediary

                                        (1) indicates by book entry that a
                                "financial asset" (as defined in Section
                                8-102(a)(9) of the UCC) has been credited to the
                                Trustee's "securities account" (as defined in
                                Section 8-501(a) of the UCC);

                                        (2) receives a financial asset (as so
                                defined) from the Trustee or acquires a
                                financial asset for the Trustee, and, in either
                                case, accepts it for credit to the Trustee's
                                securities account (as so defined);

                                        (3) becomes obligated under other law,
                                regulation or rule to credit a financial asset
                                to the Trustee's securities account; or

                                        (4) has agreed that it will comply with
                                "entitlement orders" (as defined in Section
                                8-102(a)(8) of the UCC) originated by the
                                Trustee, without further consent by the
                                "entitlement holder" (as defined in Section
                                8-102(a)(7) of the UCC); and

                                (B) such financial asset either is such
                        Investment Security or a security entitlement evidencing
                        a claim thereto; and

                        (vi) in each case of delivery contemplated pursuant to
                clauses (i) through (v) above, the Trustee shall make
                appropriate notations on its records, and shall cause the same
                to be made on the records of its nominees, indicating that such
                Investment Security is held in trust pursuant to and as provided
                in this Indenture.

        Any cash held by the Trustee shall be considered a "financial asset" for
purposes of this paragraph. Subject to the other provisions hereof, the Trustee
shall have sole control over each such investment and the income thereon, and
any certificate or other instrument evidencing any such investment, if any,
shall be delivered directly to the Trustee or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Trustee in a manner which complies with this paragraph.

        The Trustee agrees that it has no security interest or other adverse
claim to the Funds and Accounts or the Investment Securities therein that are
part of the Trust Estate other than pursuant to this Indenture and that it will
not enter into any agreement that would give any Person or entity other than the
Trustee the right to give entitlement orders with respect to such Investment
Securities or the Funds and Accounts.

                                       43
<PAGE>

        SECTION 5.09. RELEASE; SALE OF FINANCED ELIGIBLE LOANS.

                (a) The Trustee shall, upon Issuer Order and subject to the
        provisions of this Indenture, take all actions reasonably necessary to
        effect the release of any Financed Eligible Loans from the lien of this
        Indenture to the extent required by the Act or other applicable laws.

                (b) Subject to the payment of its fees and expenses pursuant to
        Sections 7.05 and 7.07, the Trustee may, and when required by the
        provisions of this Indenture shall, execute instruments to release
        property from the lien of this Indenture, or convey the Trustee's
        interest in the same, in a manner and under circumstances that are not
        inconsistent with the provisions of this Indenture. No party relying
        upon an instrument executed by the Trustee as provided in this Article V
        shall be bound to ascertain the Trustee's authority, inquire into the
        satisfaction of any conditions precedent or see to the application of
        any moneys.

                (c) The Trustee shall, at such time as there are no Notes
        Outstanding and all sums due the Trustee pursuant to Sections 7.05 and
        7.07 and all amounts payable to any Servicer, the Administrator, the
        Auction Agents, the Broker-Dealers, and the Counterparties have been
        paid, release any remaining portion of the Trust Estate that secured the
        Notes from the lien of this Indenture and release to the Issuer or any
        other Person entitled thereto any funds then on deposit in the Funds and
        Accounts. The Trustee shall release property from the lien of this
        Indenture pursuant to this Section 5.06(c) only upon receipt of an
        Issuer Order, an Opinion of Counsel and (if required by the TIA)
        Independent Certificates in accordance with TIA Sections 314(c) and
        314(d)(1).

                (d) Subject to the provisions of this Indenture, the Trustee
        shall release property from the lien of this Indenture only upon receipt
        of an Issuer Order, an Opinion of Counsel and Independent Certificates
        in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion of
        Counsel in lieu of such Independent Certificates to the effect that the
        TIA does not require any such Independent Certificates.

                                   ARTICLE VI

                              DEFAULTS AND REMEDIES

        SECTION 6.01. EVENTS OF DEFAULT DEFINED. For the purpose of this
Indenture, the following events are hereby defined as, and are declared to be,
"Events of Default":

                (a) default in the due and punctual payment of the principal of
        or interest on any of the Senior Notes when due or failure to make any
        payment due under any other Senior Obligations when due (other than the
        failure to make Principal Reduction Payments);

                (b) if no Senior Obligations are Outstanding hereunder, default
        in the due and punctual payment of the principal of or interest on any
        of the Subordinate Notes when due or failure to make any payment due
        under any other Subordinate Obligations when due (other than the failure
        to make Principal Reduction Payments);

                                       44
<PAGE>

                (c) if no Senior Obligations or Subordinate Obligations are
        Outstanding hereunder, default in the due and punctual payment of the
        principal of or interest on any of the Junior-Subordinate Notes when due
        or failure to make any payment due under any other Junior-Subordinate
        Obligations when due (other than the failure to make Principal Reduction
        Payments);

                (d) default in the performance or observance of any other of the
        covenants, agreements, or conditions on the part of the Issuer to be
        kept, observed, and performed contained in this Indenture or in the
        Notes, and continuation of such default for a period of 90 days after
        written notice thereof by the Trustee to the Issuer; and

                (e) the occurrence of an Event of Bankruptcy.

Failure to pay interest carryover amounts or interest on interest carryover
amounts shall not constitute an Event of Default.

        Any notice herein provided to be given to the Issuer with respect to any
default shall be deemed sufficiently given if sent by registered mail with
postage prepaid to the Person to be notified, addressed to such Person at the
post office address as shown in Section 9.01 of this Indenture or such other
address as may hereafter be given as the principal office of the Issuer in
writing to the Trustee by an Authorized Officer of the Issuer. The Trustee may
give any such notice in its discretion and shall give such notice if requested
to do so in writing by the Registered Owners of at least 51% of the collective
aggregate principal amount of the Highest Priority Obligations at the time
Outstanding ("Registered Owner Approval").

        SECTION 6.02. REMEDY ON DEFAULT; POSSESSION OF TRUST ESTATE. Subject to
Section 6.09 hereof, upon the happening and continuance of any Event of Default,
the Trustee personally or by its attorneys or agents may enter into and upon and
take possession of such portion of the Trust Estate as shall be in the custody
of others, and all property comprising the Trust Estate, and each and every part
thereof, and exclude the Issuer and its agents, servants, and employees wholly
therefrom, and have, hold, use, operate, manage and control the same and each
and every part thereof, and in the name of the Issuer or otherwise, as they
shall deem best, conduct the business thereof and exercise the privileges
pertaining thereto and all the rights and powers of the Issuer and use all of
the then existing Trust Estate for that purpose, and collect and receive all
charges, income and Revenue of the same and of every part thereof, and after
deducting therefrom all expenses incurred hereunder and all other proper outlays
herein authorized, and all payments which may be made as just and reasonable
compensation for its own services, and for the services of its attorneys,
agents, and assistants, the Trustee shall apply the rest and residue of the
money received by the Trustee as follows: FIRST, to the payment of the interest
in default on the Senior Notes and all Issuer Derivative Payments (excluding all
Termination Payments other than Priority Termination Payments) secured on a
parity with the Senior Notes then due, in the order of the maturity of the
installments thereof, with interest on overdue installments thereof at the same
rates, respectively, as were borne by the Senior Notes on which such interest
shall be in default and such Issuer Derivative Payments (excluding all
Termination Payments other than Priority Termination Payments) as provided in
the ISDA Master Agreement then due, as the case may be, SECOND, to the payment


                                       45
<PAGE>

of the principal of all Senior Notes then due, such payments to be made ratably
to the parties entitled thereto without discrimination or preference, THIRD, to
the payment of the interest in default on the Subordinate Notes and all Issuer
Derivative Payments (excluding all Termination Payments other than Priority
Termination Payments) secured on a parity with the Subordinate Notes then due,
in the order of the maturity of the installments thereof with interest on
overdue installments thereof at the same rates, respectively, as were borne by
the Subordinate Notes on which such interest shall be in default and such Issuer
Derivative Payments (excluding all Termination Payments other than Priority
Termination Payments) as provided in the ISDA Master Agreement then due, as the
case may be, FOURTH, to the payment of the principal of all Subordinate Notes
then due, such payments to be made ratably to the parties entitled thereto
without discrimination or preference, FIFTH, to the payment of the interest in
default on the Junior-Subordinate Notes and all Issuer Derivative Payments
(excluding all Termination Payments other than Priority Termination Payments)
secured on a parity with such Junior-Subordinate Notes then due, in the order of
the maturity of the installments thereof, with interest on overdue installments
thereof at the same rates, respectively, as were borne by the Junior-Subordinate
Notes on which such interest shall be in default and such Issuer Derivative
Payments (excluding all Termination Payments other than Priority Termination
Payments) as provided in the ISDA Master Agreement then due, as the case may be,
SIXTH, to the payment of the principal of all Junior-Subordinate Notes then due,
such payments to be made ratably to the parties entitled thereto without
discrimination or preference, SEVENTH, to pay interest accrued on the carryover
amounts of the Senior notes, the carryover amounts of the Senior Notes, to pay
interest accrued on the carryover amounts of the Subordinate Notes, the
carryover amounts of the Subordinate Notes, to pay interest accrued on the
carryover amounts of the Junior-Subordinate Notes, the carryover amounts of the
Junior-Subordinate Notes, in that order of priority, EIGHTH, to pay unpaid
Termination Payments due as a result of a Counterparty default under a
Derivative Product secured on a parity with the Senior Notes, NINTH, to pay
unpaid Termination Payments due as a result of a Counterparty default under a
Derivative Product secured on a parity with the Subordinate Notes, and TENTH to
pay unpaid Termination Payments due as a result of a Counterparty default under
a Derivative Product secured on a parity with the Junior-Subordinate Notes.

        SECTION 6.03. REMEDIES ON DEFAULT; ADVICE OF COUNSEL. Upon the happening
of any Event of Default, the Trustee may proceed to protect and enforce the
rights of the Trustee and the Registered Owners in such manner as counsel for
the Trustee may advise, whether for the specific performance of any covenant,
condition, agreement or undertaking herein contained, or in aid of the execution
of any power herein granted, or for the enforcement of such other appropriate
legal or equitable remedies as, in the opinion of such counsel, may be more
effectual to protect and enforce the rights aforesaid.

        SECTION 6.04. REMEDIES ON DEFAULT; SALE OF TRUST ESTATE. Upon the
happening of any Event of Default and if the principal of all of the Outstanding
Obligations shall have been declared due and payable, then and in every such
case, and irrespective of whether other remedies authorized shall have been
pursued in whole or in part, the Trustee may sell, with or without entry, to the
highest bidder the Trust Estate, and all right, title, interest, claim and
demand thereto and the right of redemption thereof, at any such place or places,
and at such time or times and upon such notice and terms as may be required by
law. Upon such sale the Trustee may make and deliver to the purchaser or
purchasers a good and sufficient assignment or conveyance for the same, which
sale shall be a perpetual bar both at law and in equity against the Issuer and
all Persons claiming such properties. No purchaser at any sale shall be bound to


                                       46
<PAGE>

see to the application of the purchase money or to inquire as to the
authorization, necessity, expediency or regularity of any such sale. The Trustee
is hereby irrevocably appointed the true and lawful attorney-in-fact of the
Issuer, in its name and stead, to make and execute all bills of sale,
instruments of assignment and transfer and such other documents of transfer as
may be necessary or advisable in connection with a sale of all or part of the
Trust Estate, but the Issuer, if so requested by the Trustee, shall ratify and
confirm any sale or sales by executing and delivering to the Trustee or to such
purchaser or purchasers all such instruments as may be necessary, or in the
judgment of the Trustee, proper for the purpose which may be designated in such
request. In addition, the Trustee may proceed to protect and enforce the rights
of the Trustee and the Registered Owners of the Obligations in such manner as
counsel for the Trustee may advise, whether for the specific performance of any
covenant, condition, agreement or undertaking herein contained, or in aid of the
execution of any power herein granted, or for the enforcement of such other
appropriate legal or equitable remedies as may in the opinion of such counsel,
be more effectual to protect and enforce the rights aforesaid. The Trustee shall
take any such action or actions if requested to do so in writing by the
Registered Owners of at least 51% of the collective aggregate principal amount
of the Highest Priority Obligations at the time Outstanding.

        SECTION 6.05. APPOINTMENT OF RECEIVER. In case an Event of Default
occurs, and if all of the Outstanding Obligations shall have been declared due
and payable and in case any judicial proceedings are commenced to enforce any
right of the Trustee or of the Registered Owners under this Indenture or
otherwise, then as a matter of right, the Trustee shall be entitled to the
appointment of a receiver of the Trust Estate and of the earnings, income or
Revenue, rents, issues and profits thereof with such powers as the court making
such appointments may confer.

        SECTION 6.06. RESTORATION OF POSITION. In case the Trustee shall have
proceeded to enforce any rights under this Indenture by sale or otherwise, and
such proceedings shall have been discontinued, or shall have been determined
adversely to the Trustee, then and in every such case to the extent not
inconsistent with such adverse decree, the Issuer, the Trustee and the
Registered Owners shall be restored to their former respective positions and the
rights hereunder in respect to the Trust Estate, and all rights, remedies, and
powers of the Trustee and of the Registered Owners shall continue as though no
such proceeding had been taken.

        SECTION 6.07. PURCHASE OF PROPERTIES BY TRUSTEE OR REGISTERED OWNERS. In
case of any such sale of the Trust Estate, any Registered Owner or Registered
Owners or committee of Registered Owners or the Trustee, may bid for and
purchase such property and upon compliance with the terms of sale may hold,
retain possession, and dispose of such property as the absolute right of the
purchaser or purchasers without further accountability and shall be entitled,
for the purpose of making any settlement or payment for the property purchased,
to use and apply any Obligations hereby secured and any interest thereon due and
unpaid, by presenting such Obligations in order that there may be credited
thereon the sum apportionable and applicable thereto out of the net proceeds of
such sale, and thereupon such purchaser or purchasers shall be credited on
account of such purchase price payable to him or them with the sum apportionable
and applicable out of such net proceeds to the payment of or as a credit on the
Obligations so presented.

                                       47
<PAGE>

        SECTION 6.08. APPLICATION OF SALE PROCEEDS. The proceeds of any sale of
the Trust Estate, together with any funds at the time held by the Trustee and
not otherwise appropriated, shall be applied by the Trustee as set forth in
Section 6.02 hereof, and then to the Issuer or whomsoever shall be lawfully
entitled thereto.

        SECTION 6.09. ACCELERATED MATURITY. If an Event of Default shall have
occurred and be continuing, the Trustee may declare, or upon the written
direction by the Registered Owners of at least 66% of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding, shall
declare, the principal of all Obligations then Outstanding, and the interest
thereon, if not previously due, immediately due and payable, anything in the
Obligations or this Indenture to the contrary notwithstanding; provided,
however, that for a declaration of acceleration upon a default pursuant to
Section 6.01(d) hereof shall require the consent of a majority of the Registered
Owners of the collective aggregate principal amount of each priority of
Obligations then Outstanding.

        SECTION 6.10. REMEDIES NOT EXCLUSIVE. The remedies herein conferred upon
or reserved to the Trustee or the Registered Owners of Obligations are not
intended to be exclusive of any other remedy, but each remedy herein provided
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing, and every power and remedy hereby given
to the Trustee or to the Registered Owners of Obligations, or any supplement
hereto, may be exercised from time to time as often as may be deemed expedient.
No delay or omission of the Trustee or of any Registered Owner of Obligations to
exercise any power or right arising from any default hereunder shall impair any
such right or power or shall be construed to be a waiver of any such default or
to be acquiescence therein.

        SECTION 6.11. DIRECTION OF TRUSTEE. Upon the happening of any Event of
Default, the Registered Owners of at least a majority of the collective
aggregate principal amount of the Highest Priority Obligations then Outstanding,
shall have the right by an instrument or instruments in writing delivered to the
Trustee to direct and control the Trustee as to the method of taking any and all
proceedings for any sale of any or all of the Trust Estate, or for the
appointment of a receiver, if permitted by law, and may at any time cause any
proceedings authorized by the terms hereof to be so taken or to be discontinued
or delayed; provided, however, that such Registered Owners shall not be entitled
to cause the Trustee to take any proceedings which in the Trustee's opinion
would be unjustly prejudicial to non-assenting Registered Owners of Obligations,
but the Trustee shall be entitled to assume that the action requested by the
Registered Owners of at least 51% of the collective aggregate principal amount
of the Highest Priority Obligations then Outstanding will not be prejudicial to
any non-assenting Registered Owners unless the Registered Owners of at least a
majority of the principal amount of the non-assenting Registered Owners of such
Obligations, in writing, show the Trustee how they will be prejudiced. Provided,
however, that anything in this Indenture to the contrary notwithstanding, the
Registered Owners of a majority of the collective aggregate principal amount of
the Highest Priority Obligations then Outstanding together with the Registered
Owners of a majority of the collective aggregate principal amount of all other
Obligations then Outstanding shall have the right, at any time, by an instrument
or instruments in writing executed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in connection with
the enforcement of the terms and conditions of this Indenture, or for the
appointment of a receiver or any other proceedings hereunder, provided that such
direction shall not be otherwise than in accordance with the provisions of law
and of this Indenture. The provisions of this Section 6.11 shall be expressly
subject to the provisions of Sections 7.01(c) and 7.05 hereof.

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<PAGE>

        SECTION 6.12. RIGHT TO ENFORCE IN TRUSTEE. No Registered Owner of any
Obligation shall have any right as such Registered Owner to institute any suit,
action, or proceedings for the enforcement of the provisions of this Indenture
or for the execution of any trust hereunder or for the appointment of a receiver
or for any other remedy hereunder, all rights of action hereunder being vested
exclusively in the Trustee, unless and until such Registered Owner shall have
previously given to the Trustee written notice of a default hereunder, and of
the continuance thereof, and also unless the Registered Owners of the requisite
principal amount of the Obligations then Outstanding shall have made written
request upon the Trustee and the Trustee shall have been afforded reasonable
opportunity to institute such action, suit or proceeding in its own name, and
unless the Trustee shall have been offered indemnity and security satisfactory
to it against the costs, expenses, and liabilities to be incurred therein or
thereby, which offer of indemnity shall be an express condition precedent
hereunder to any obligation of the Trustee to take any such action hereunder,
and the Trustee for 30 days after receipt of such notification, request, and
offer of indemnity, shall have failed to institute any such action, suit or
proceeding. It is understood and intended that no one or more Registered Owners
of the Obligations shall have the right in any manner whatever by his or their
action to affect, disturb, or prejudice the lien of this Indenture or to enforce
any right hereunder except in the manner herein provided and for the equal
benefit of the Registered Owners of not less than a majority of the collective
aggregate principal amount of the Obligations then Outstanding.

        SECTION 6.13. PHYSICAL POSSESSION OF OBLIGATIONS NOT REQUIRED. In any
suit or action by the Trustee arising under this Indenture or on all or any of
the Obligations issued hereunder, or any supplement hereto, the Trustee shall
not be required to produce such Obligations, but shall be entitled in all things
to maintain such suit or action without their production.

        SECTION 6.14. WAIVERS OF EVENTS OF DEFAULT. The Trustee may in its
discretion waive any Event of Default hereunder and its consequences and rescind
any declaration of acceleration of Obligations, and shall do so upon the written
request of the Registered Owners of at least a majority of the collective
aggregate principal amount of the Highest Priority Obligations then Outstanding;
provided, however, that there shall not be waived (a) any Event of Default in
the payment of the principal of or premium on any Outstanding Obligations at the
date of maturity or redemption thereof, or any default in the payment when due
of the interest on any such Obligations, unless prior to such waiver or
rescission, all arrears of interest or all arrears of payments of principal and
premium, if any, and all expenses of the Trustee, in connection with such
default shall have been paid or provided for or (b) any default in the payment
of amounts set forth in Section 7.05 hereof. In case of any such waiver or
rescission, or in case any proceedings taken by the Trustee on account of any
such default shall have been discontinued or abandoned or determined adversely
to the Trustee, then and in every such case the Issuer, the Trustee and the
Registered Owners of Obligations shall be restored to their former positions and
rights hereunder respectively, but no such waiver or rescission shall extend to
or affect any subsequent or other default, or impair any rights or remedies
consequent thereon.

                                       49
<PAGE>

                                   ARTICLE VII

                                   THE TRUSTEE

        SECTION 7.01. ACCEPTANCE OF TRUST. The Trustee hereby accepts the trusts
imposed upon it by this Indenture, and agrees to perform said trusts, but only
upon and subject to the following terms and conditions:

                (a) Except during the continuance of an Event of Default,

                        (i) the Trustee undertakes to perform such duties and
                only such duties as are specifically set forth in this
                Indenture, and no implied covenants or obligations shall be read
                into this Indenture against the Trustee; and

                        (ii) in the absence of bad faith on its part, the
                Trustee may conclusively rely, as to the truth of the statements
                and the correctness of the opinions expressed therein, upon
                certificates or opinions furnished to the Trustee and conforming
                to the requirements of this Indenture; but in the case of any
                such certificates or opinions which by any provisions hereof are
                specifically required to be furnished to the Trustee, the
                Trustee shall be under a duty to examine the same to determine
                whether or not they conform as to form with the requirements of
                this Indenture and whether or not they contain the statements
                required under this Indenture.

                (b) In case an Event of Default has occurred and is continuing,
        the Trustee, in exercising the rights and powers vested in it by this
        Indenture, shall use the same degree of care and skill in their exercise
        as a prudent person would exercise or use under the circumstances in the
        conduct of his or her own affairs.

                (c) Before taking any action hereunder requested by Registered
        Owners, the Trustee may require that it be furnished an indemnity bond
        or other indemnity and security satisfactory to it by the Registered
        Owners, as applicable, for the reimbursement of all expenses to which it
        may be put and to protect it against all liability.

        SECTION 7.02. RECITALS OF OTHERS. The recitals, statements, and
representations set forth herein and in the Notes shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the title of
the Issuer in the Trust Estate or as to the security afforded thereby and
hereby, or as to the validity or sufficiency of this Indenture or of the Notes
issued hereunder, and the Trustee shall incur no responsibility in respect of
such matters.

        SECTION 7.03. AS TO FILING OF INDENTURE. The Trustee shall be under no
duty (a) to file or record, or cause to be filed or recorded, this Indenture or
any instrument supplemental hereto, (b) or to procure any further order or
additional instruments of further assurance, (c) to see to the delivery to it of
any personal property intended to be mortgaged or pledged hereunder or
thereunder, (d) or to do any act which may be suitable to be done for the better
maintenance of the lien or security hereof (other than the filing of any
continuation (but not initial) statements), or (e) for giving notice of the
existence of such lien, or for extending or supplementing the same or to see
that any rights to Revenue and Funds intended now or hereafter to be transferred
in trust hereunder are subject to the lien hereof. The Trustee shall not be
liable for failure of the Issuer to pay any tax or taxes in respect of such


                                       50
<PAGE>

property, or any part thereof, or the income therefrom or otherwise, nor shall
the Trustee be under any duty in respect of any tax which may be assessed
against it or the Registered Owners in respect of such property or pledged
Revenue and Funds. The Trustee agrees to prepare, request that the Issuer
execute (if such execution is necessary for any such filing) and file in a
timely manner (if received from the Issuer in a timely manner) with any
necessary execution by the Issuer, the continuation statements referred to
herein; provided, that the Trustee shall have no responsibility for the
sufficiency, adequacy or priority of any initial filing and in the absence of
written notice to the contrary by the Issuer or other Authorized Representative,
may rely and shall be protected in relying on all information and exhibits in
such initial filings for the purposes of any continuation statements.

        SECTION 7.04. TRUSTEE MAY ACT THROUGH AGENTS. The Trustee may execute
any of the trusts or powers hereof and perform any duty hereunder, either itself
or by or through its attorneys, agents, or employees, and it shall not be
answerable or accountable for any default, neglect, or misconduct of any such
attorneys, agents, or employees, if reasonable care has been exercised in the
appointment, supervision, and monitoring of the work performed. All reasonable
costs incurred by the Trustee and all reasonable compensation to all such
persons as may reasonably be employed in connection with the trusts hereof shall
be paid by the Issuer.

        SECTION 7.05. INDEMNIFICATION OF TRUSTEE. Other than with respect to its
duties to make payment on the Obligations when due, and its duty to pursue the
remedy of acceleration as provided in Section 6.02 hereof, for each of which no
additional security or indemnity may be required, the Trustee shall be under no
obligation or duty to perform any act at the request of Registered Owners or to
institute or defend any suit in respect thereof unless properly indemnified and
provided with security to its satisfaction as provided in Section 7.01(c)
hereof. The Trustee shall not be required to take notice, or be deemed to have
knowledge, of any default or Event of Default of the Issuer or the Board
hereunder and may conclusively assume that there has been no such default or
Event of Default (other than an Event of Default described in Sections 6.01(a),
(b), (c), or (d) hereof) unless and until it shall have been specifically
notified in writing at the address in Section 9.01 hereof of such default or
Event of Default by (a) the Registered Owners of the required percentages in
principal amount of the Obligations then Outstanding hereinabove specified or
(b) an Authorized Representative of the Issuer. However, the Trustee may begin
suit, or appear in and defend suit, execute any of the trusts hereby created,
enforce any of its rights or powers hereunder, or do anything else in its
judgment proper to be done by it as Trustee, without assurance of reimbursement
or indemnity, and in such case the Trustee shall be reimbursed or indemnified by
the Registered Owners requesting such action, if any, or the Issuer in all other
cases, for all fees, costs and expenses, liabilities, outlays and counsel fees
and other reasonable disbursements properly incurred in connection therewith,
unless such costs and expenses, liabilities, outlays and attorneys' fees and
other reasonable disbursements properly incurred in connection therewith are
adjudicated to have resulted from the negligence or willful misconduct of the
Trustee. In furtherance and not in limitation of this Section 7.05, the Trustee
shall not be liable for, and shall be held harmless by the Issuer from,
following any Orders, instructions or other directions upon which the Trustee is
authorized to rely pursuant to this Indenture or any other agreement to which it
is a party. If the Issuer or the Registered Owners, as appropriate, shall fail


                                       51
<PAGE>

to make such reimbursement or indemnification, the Trustee may reimburse itself
from any money in its possession under the provisions of this Indenture, subject
only to the prior lien of the Notes for the payment of the principal thereof,
premium, if any, and interest thereon from the Collection Fund. None of the
provisions contained in this Indenture or any other Agreement to which it is a
party shall require the Trustee to act or to expend or risk its own funds or
otherwise incur individual financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers if the Registered
Owners shall not have offered security and indemnity acceptable to it or if it
shall have reasonable grounds for believing that prompt repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.

        The Issuer agrees to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expenses incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder arising
from the Trust Estate. The Issuer agrees to indemnify and hold harmless the
Trustee against any and all claims, demands, suits, actions or other proceedings
and all liabilities, costs and expenses whatsoever caused by any untrue
statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in any offering document
distributed in connection with the issuance of the Notes or caused by any
omission or alleged omission from such offering document of any material fact
required to be stated therein or necessary in order to make the statements made
therein in the light of the circumstances under which they were made, not
misleading.

        SECTION 7.06. TRUSTEE'S RIGHT TO RELIANCE. The Trustee shall be
protected in acting upon any notice, resolution, request, consent, order,
certificate, report, appraisal, opinion, report or document of the Issuer or the
Servicer or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. The Trustee may consult
with experts and with counsel (who may but need not be counsel for the Issuer,
the Trustee, or for a Registered Owner or who may be Note Counsel), and the
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered, and in respect of any determination
made by it hereunder in good faith and in accordance with the opinion of such
counsel.

        Whenever in the administration hereof the Trustee shall reasonably deem
it desirable that a matter be proved or established prior to taking, suffering,
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
a certificate signed by an Authorized Representative of the Issuer or an
authorized officer of the Servicer.

        The Trustee shall not be liable for any action taken, suffered, or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it hereby; provided, however, that
the Trustee shall be liable for its negligence or willful misconduct in taking
such action.

        The Trustee is authorized, under this Indenture, subject to Section 5.02
hereof, to sell, assign, transfer or convey Financed Eligible Loans in
accordance with an Issuer Order. If such Financed Eligible Loan was originated


                                       52
<PAGE>

under the Act, such Issuer Order shall certify that the Person to whom such
Financed Eligible Loan is sold, assigned, transferred, or conveyed is an
Eligible Lender unless not required by the Act. The Trustee is further
authorized to enter into agreements with other Persons, in its capacity as
Trustee, in order to carry out or implement the terms and provisions of this
Indenture.

        The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken in good faith in accordance with this Indenture
or any other transaction document or at the direction of the Registered Owners
evidencing the appropriate percentage of the aggregate principal amount of the
Outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture or any other transaction
document.

        SECTION 7.07. COMPENSATION OF TRUSTEE. Except as otherwise expressly
provided herein, all advances, counsel fees (including without limitation
allocated fees of in-house counsel) and other expenses reasonably made or
incurred by the Trustee in and about the execution and administration of the
trust hereby created and reasonable compensation to the Trustee for its services
in the premises shall be paid by the Issuer. The compensation of the Trustee
shall not be limited to or by any provision of law in regard to the compensation
of trustees of an express trust. If not paid by the Issuer, the Trustee shall
have a lien against all money held pursuant to this Indenture, subject only to
the prior lien of the Obligations against the money and investments in the
Collection Fund for the payment of the principal thereof, premium, if any, and
interest thereon, for such reasonable compensation, expenses, advances and
counsel fees incurred in and about the execution of the trusts hereby created
and the exercise and performance of the powers and duties of the Trustee
hereunder and the cost and expense incurred in defending against any liability
in the premises of any character whatsoever (unless such liability is
adjudicated to have resulted from the negligence or willful misconduct of the
Trustee).

        SECTION 7.08. TRUSTEE MAY OWN NOTES. The Trustee shall comply with TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein. The Trustee hereunder, or any
successor Trustee, in its individual or other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuer, with the same rights it
would have if it were not the Trustee. The Trustee may act as depository for,
and permit any of its officers or directors to act as a member of, or act in any
other capacity in respect to, any committee formed to protect the rights of the
Registered Owners or to effect or aid in any reorganization growing out of the
enforcement of the Notes or of this Indenture, whether or not any such committee
shall represent the Registered Owners of more than 60% of the collective
aggregate principal amount of the Outstanding Obligations.

        SECTION 7.09. RESIGNATION OF TRUSTEE. The Trustee and any successor to
the Trustee may resign and be discharged from the trust created by this
Indenture by giving to the Issuer notice in writing which notice shall specify
the date on which such resignation is to take effect; provided, however, that
such resignation shall only take effect on the day specified in such notice if a
successor Trustee shall have been appointed pursuant to Section 7.11 hereof (and
is qualified to be the Trustee under the requirements of Section 7.11 hereof).
If no successor Trustee has been appointed by the date specified or within a
period of 90 days from the receipt of the notice by the Issuer, whichever period
is the longer, the Trustee may (a) appoint a temporary successor Trustee having


                                       53
<PAGE>

the qualifications provided in Section 7.11 hereof or (b) request a court of
competent jurisdiction to (i) require the Issuer to appoint a successor, as
provided in Section 7.11 hereof, within three days of the receipt of citation or
notice by the court, or (ii) appoint a Trustee having the qualifications
provided in Section 7.11 hereof. In no event may the resignation of the Trustee
be effective until a qualified successor Trustee shall have been selected and
appointed. In the event a temporary successor Trustee is appointed pursuant to
(a) above, the Board may remove such temporary successor Trustee and appoint a
successor thereto pursuant to Section 7.11 hereof.

        SECTION 7.10. REMOVAL OF TRUSTEE. The Trustee or any successor Trustee
may be removed (a) at any time by the Registered Owners of a majority of the
collective aggregate principal amount of the Highest Priority Obligations then
Outstanding, (b) by the Issuer for cause or upon the sale or other disposition
of the Trustee or its corporate trust functions or (c) by the Issuer without
cause so long as no Event of Default as described in Sections 6.01(a), (b), (c),
(e) or (f) exists or has existed within the last 30 days, upon payment to the
Trustee so removed of all money then due to it hereunder and appointment of a
successor thereto by the Issuer and acceptance thereof by said successor. One
copy of any such order of removal shall be filed with the President of the
Issuer and the other with the Trustee so removed.

        In the event a Trustee (or successor Trustee) is removed, by any person
or for any reason permitted hereunder, such removal shall not become effective
until (a) in the case of removal by the Registered Owners, such Registered
Owners by instrument or concurrent instruments in writing (signed and
acknowledged by such Registered Owners or their attorneys-in-fact) filed with
the Trustee removed have appointed a successor Trustee or otherwise the Issuer
shall have appointed a successor, and (b) the successor Trustee has accepted
appointment as such.

SECTION 7.11. SUCCESSOR TRUSTEE. In case at any time the Trustee or any
successor Trustee shall resign, be dissolved, or otherwise shall be disqualified
to act or be incapable of acting, or in case control of the Trustee or of any
successor Trustee or of its officers shall be taken over by any public officer
or officers, a successor Trustee may be appointed by the Board by an instrument
in writing duly authorized by resolution. In the case of any such appointment by
the Board of a successor to the Trustee, the Board shall forthwith cause notice
thereof to be mailed to the Registered Owners of the Notes at the address of
each Registered Owner appearing on the note registration books maintained by the
Registrar.

        Every successor Trustee appointed by the Registered Owners, by a court
of competent jurisdiction, or by the Board shall be a bank or trust company in
good standing, organized and doing business under the laws of the United States
or of a state therein, which has a reported capital and surplus of not less than
$50,000,000, be authorized under the law to exercise corporate trust powers, be
subject to supervision or examination by a federal or state authority, and be an
Eligible Lender so long as such designation is necessary to maintain guarantees
and federal benefits under the Act with respect to the Financed Eligible Loans
originated under the Act.

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<PAGE>

        SECTION 7.12. MANNER OF VESTING TITLE IN TRUSTEE. Any successor Trustee
appointed hereunder shall execute, acknowledge, and deliver to its predecessor
Trustee, and also to the Issuer, an instrument accepting such appointment
hereunder, and thereupon such successor Trustee, without any further act, deed,
or conveyance shall become fully vested with all the estate, properties, rights,
powers, trusts, duties, and obligations of its predecessors in trust hereunder
(except that the predecessor Trustee shall continue to have the benefits to
indemnification hereunder together with the successor Trustee), with like effect
as if originally named as Trustee herein; but the Trustee ceasing to act shall
nevertheless, on the written request of an Authorized Representative of the
Issuer, or an authorized officer of the successor Trustee, execute, acknowledge,
and deliver such instruments of conveyance and further assurance and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in such successor Trustee all the right, title, and interest of
the Trustee which it succeeds, in and to pledged Revenue and Funds and such
rights, powers, trusts, duties, and obligations, and the Trustee ceasing to act
also, upon like request, pay over, assign, and deliver to the successor Trustee
any money or other property or rights subject to the lien of this Indenture,
including any pledged securities which may then be in its possession. Should any
deed or instrument in writing from the Issuer be required by the successor
Trustee for more fully and certainly vesting in and confirming to such new
Trustee such estate, properties, rights, powers, and duties, any and all such
deeds and instruments in writing shall on request be executed, acknowledged and
delivered by the Issuer.

        In case any of the Notes to be issued hereunder shall have been
authenticated but not delivered, any successor Trustee may adopt the certificate
of authentication of the Trustee or of any successor to the Trustee; and in case
any of the Notes shall not have been authenticated, any successor to the Trustee
may authenticate such Notes in its own name; and in all such cases such
certificate shall have the full force which it has anywhere in the Notes or in
this Indenture.

        SECTION 7.13. ADDITIONAL COVENANTS BY THE TRUSTEE TO CONFORM TO THE ACT.
The Trustee covenants that it will at all times be an Eligible Lender under the
Act so long as such designation is necessary, as determined by the Issuer, to
maintain the guarantees and federal benefits under the Act with respect to the
Financed Eligible Loans, that it will acquire Eligible Loans originated under
the Act in its capacity as an Eligible Lender and that it will not dispose of or
deliver any Financed Eligible Loans originated under the Act or any security
interest in any such Financed Eligible Loans to any party who is not an Eligible
Lender so long as the Act or Regulations adopted thereunder require an Eligible
Lender to be the owner or holder of such Financed Eligible Loans; provided,
however, that nothing above shall prevent the Trustee from delivering the
Eligible Loans to the Servicer or the Guaranty Agency.

        SECTION 7.14. RIGHT OF INSPECTION. A Registered Owner shall be permitted
at reasonable times during regular business hours and in accordance with
reasonable regulations prescribed by the Trustee to examine at the principal
office of the Trustee a copy of any report or instrument theretofore filed with
the Trustee relating to the condition of the Trust Estate.

        SECTION 7.15. LIMITATION WITH RESPECT TO EXAMINATION OF REPORTS. Except
as provided in this Indenture, the Trustee shall be under no duty to examine any
report or statement or other document required or permitted to be filed with it
by the Issuer.

        SECTION 7.16. SERVICING AGREEMENT. The Trustee acknowledges the receipt
of a copy of the Servicing Agreement described in Section 4.05 hereof.

                                       55
<PAGE>

        SECTION 7.17. ADDITIONAL COVENANTS OF TRUSTEE. The Trustee, by the
execution hereof, covenants, represents and agrees that:

                (a) it will not exercise any of the rights, duties, or
        privileges under this Indenture in such manner as would cause the
        Eligible Loans held or acquired under the terms hereof to be
        transferred, assigned, or pledged as security to any person or entity
        other than as permitted by this Indenture; and

                (b) it will comply with the Act and the Regulations and will,
        upon written notice from an Authorized Representative of the Issuer, the
        Secretary, or the Guaranty Agency, use its reasonable efforts to cause
        this Indenture to be amended (in accordance with Section 8.01 hereof) if
        the Act or Regulations are hereafter amended so as to be contrary to the
        terms of this Indenture.

        SECTION 7.18. DUTY OF TRUSTEE WITH RESPECT TO RATING AGENCIES. It shall
be the duty of the Trustee to notify each Rating Agency then rating any of the
Notes (but the Trustee shall incur no liability for any failure to do so) of (a)
any change, expiration, extension, or renewal of this Indenture, (b) redemption
or defeasance of any or all the Notes, (c) any change in the Trustee or (d) any
other information reasonably required to be reported to each Rating Agency under
any Supplemental Indenture; provided, however, the provisions of this Section do
not apply when such documents have been previously supplied to such Rating
Agency and the Trustee has received written evidence to such effect, all as may
be required by this Indenture. All notices required to be forwarded to the
Rating Agencies under this Section shall be sent in writing at the following
addresses:

                      Standard & Poor's Ratings Group
                      55 Water Street
                      New York, New York  10041
                      Attention: Asset-Backed Surveillance Group

                      Fitch, Inc.
                      One State Street Plaza
                      New York, New York  10004
                      Attention:    Structured Finance

                      Moody's Investors Service
                      99 Church Street
                      New York, New York  10007
                      Attention:    ABS Monitoring Group

        The Trustee also acknowledges that each Rating Agency's periodic review
for maintenance of a Rating on any series of the Notes may involve discussions
and/or meetings with representatives of the Trustee at mutually agreeable times
and places.

        SECTION 7.19. MERGER OF THE TRUSTEE. Any corporation into which the
Trustee may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Trustee shall be a


                                       56
<PAGE>

party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Indenture, without the execution or filing of any paper of any
further act on the part of any other parties hereto.

        SECTION 7.20. RECEIPT OF FUNDS FROM SERVICER. The Trustee shall not be
accountable or responsible in any manner whatsoever for any action of the
Issuer, the depository bank of any funds of the Issuer, or the Servicer while
the Servicer is acting as bailee or agent of the Trustee with respect to the
Eligible Loans except, to the extent provided in any Servicing Agreement or
custodian agreement, for actions taken in compliance with any instruction or
direction given to the Trustee, or for the application of funds or moneys by the
Servicer until such time as funds are received by the Trustee.

        SECTION 7.21. SPECIAL CIRCUMSTANCES LEADING TO RESIGNATION OF TRUSTEE.
Because the Trustee serves as trustee hereunder for Obligations of different
priorities, it is possible that circumstances may arise which will cause the
Trustee to resign from its position as trustee for one or more of the
Obligations. In the event that the Trustee makes a determination that it should
so resign, due to the occurrence of an Event of Default or potential default
hereunder, or otherwise, the Issuer may permit such resignation as to one or
more of the Obligations or request the Trustee's resignation as to all
Obligations, as the Issuer may elect. If the Issuer should determine that a
conflict of interest has arisen as to the trusteeship of any of the Obligations,
it may authorize and execute a Supplemental Indenture with one or more successor
Trustees, under which the administration of certain of the Obligations would be
separated from the administration of the other Obligations.

        SECTION 7.22. SURVIVAL OF TRUSTEE'S RIGHTS TO RECEIVE COMPENSATION,
REIMBURSEMENT AND INDEMNIFICATION. The Trustee's rights to receive compensation,
reimbursement and indemnification of money due and owing hereunder at the time
of the Trustee's resignation or removal shall survive the Trustee's resignation
or removal.

        SECTION 7.23. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING
INTERESTS. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 7.23, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.23, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article VII. Neither the Issuer
nor any Person directly or indirectly controlling or controlled by, or under
common control with, the Issuer shall serve as Trustee.

        SECTION 7.24. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer or any other obligor upon the Notes or the property of the Issuer or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Notes of any series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the


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Trustee shall have made any demand on the Issuer for the payment of overdue
principal, premium, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

                (a) to file and prove a claim for the whole amount, or such
        lesser amount as may be provided for in the Notes, of principal (and
        premium, if any) and interest, if any, owing and unpaid in respect of
        the Notes and to file such other papers or documents as may be necessary
        or advisable in order to have the claims of the Trustee (including any
        claim for the reasonable compensation, expenses, disbursements and
        advances of the Trustee and its agents and counsel) and of the
        Registered Owners allowed in such judicial proceeding; and

                (b) to collect and receive any money or other property payable
        or deliverable on any such claims and to distribute the same; and any
        custodian, receiver, assignee, trustee, liquidator, sequestrator (or
        other similar official) in any such judicial proceeding is hereby
        authorized by each Registered Owner of Notes to make such payments to
        the Trustee, and if the Trustee shall consent to the making of such
        payments directly to the Registered Owners, to pay to the Trustee any
        amount due to it for the reasonable compensation, expenses,
        disbursements and advances of the Trustee and any predecessor Trustee,
        their agents and counsel, and any other amounts due the Trustee or any
        predecessor Trustee.

        Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Registered Owner of
a Note any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Registered Owner thereof, or to
authorize the Trustee to vote in respect of the claim of any Registered Owner of
a Note in any such proceeding.

        In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Registered Owners of the Notes, and it shall not be necessary to make any
Registered Owners of the Notes parties to any such proceedings.

                                  ARTICLE VIII

                             SUPPLEMENTAL INDENTURES

        SECTION 8.01. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF
REGISTERED OWNERS. The Issuer and the Trustee may, without the consent of or
notice to any of the Registered Owners of any Obligations enter into any
indenture or indentures supplemental to this Indenture for any one or more of
the following purposes:

                (a) to cure any ambiguity or formal defect or omission in this
        Indenture;

                (b) to grant to or confer upon the Trustee for the benefit of
        the Registered Owners any additional benefits, rights, remedies, powers
        or authorities that may lawfully be granted to or conferred upon the
        Registered Owners or the Trustee;

                (c) to subject to this Indenture additional revenues, properties
        or collateral;

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<PAGE>

                (d) to modify, amend or supplement this Indenture or any
        indenture supplemental hereto in such manner as to permit the
        qualification hereof and thereof under the Trust Indenture Act of 1939
        or any similar federal statute hereafter in effect or to permit the
        qualification of the Notes for sale under the securities laws of the
        United States of America or of any of the states of the United States of
        America, and, if they so determine, to add to this Indenture or any
        indenture supplemental hereto such other terms, conditions and
        provisions as may be permitted by said Trust Indenture Act of 1939 or
        similar federal statute;

                (e) to evidence the appointment of a separate or co-Trustee or a
        co-registrar or transfer agent or the succession of a new Trustee
        hereunder, or any additional or substitute Guaranty Agency or Servicer;

                (f) to add such provisions to or to amend such provisions of
        this Indenture as may, in Note Counsel's opinion, be necessary or
        desirable to assure implementation of the Program in conformance with
        the Act if along with such Supplemental Indenture there is filed a Note
        Counsel's opinion to the effect that the addition or amendment of such
        provisions will in no way impair the existing security of the Registered
        Owners of any Outstanding Obligations;

                (g) to make any change as shall be necessary in order to obtain
        and maintain for any of the Notes an investment grade Rating from a
        nationally recognized rating service, which changes, in the opinion of
        the Trustee are not to the prejudice of the Registered Owner of any of
        the Obligations;

                (h) to make any changes necessary to comply with the Act, the
        Regulations or the Code and the regulations promulgated thereunder;

                (i) to provide for the issuance of Notes pursuant to the
        provisions of Section 2.08 of this Indenture, including the creation of
        appropriate Funds, Accounts and Subaccounts with respect to such Notes;

                (j) to make the terms and provisions of this Indenture,
        including the lien and security interest granted herein, applicable to a
        Derivative Product, and to modify Section 3.03 hereof with respect to
        any particular Derivative Product;

                (k) to create any additional Funds or Accounts or Subaccounts
        under this Indenture deemed by the Trustee to be necessary or desirable;

                (l) to amend the Indenture to allow for any Notes to be
        supported by a letter of credit or insurance policy or a liquidity
        agreement, including amendments with respect to repayment to such a
        provider on a parity with any Notes or Derivative Product and providing
        rights to such provider under this Indenture, including with respect to
        defaults and remedies;

                (m) to amend the Indenture to provide for use of a surety bond
        or other financial guaranty instrument in lieu of cash and/or Investment
        Securities in all or any portion of the Reserve Fund, so long as such
        action shall not adversely affect the Ratings on any of the Notes;

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<PAGE>

                (n) to make any other change with a Rating Confirmation; or

                (o) to make any other change which, in the judgment of the
        Trustee is not to the material prejudice of the Registered Owners of any
        Obligations;

provided, however, that nothing in this Section shall permit, or be construed as
permitting, any modification of the trusts, powers, rights, duties, remedies,
immunities and privileges of the Trustee without the prior written approval of
the Trustee, which approval shall be evidenced by execution of a Supplemental
Indenture.

        SECTION 8.02. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF REGISTERED
OWNERS. Exclusive of Supplemental Indentures covered by Section 8.01 hereof and
subject to the terms and provisions contained in this Section, and not
otherwise, the Registered Owners of not less than a majority of the collective
aggregate principal amount of the Obligations then Outstanding shall have the
right, from time to time, to consent to and approve the execution by the Issuer
and the Trustee of such other indenture or indentures supplemental hereto as
shall be deemed necessary and desirable by the Trustee for the purpose of
modifying, altering, amending, adding to or rescinding, in any particular, any
of the terms or provisions contained in this Indenture or in any Supplemental
Indenture; provided, however, that nothing in this Section shall permit, or be
construed as permitting (a) without the consent of the Registered Owners of all
then Outstanding Obligations, (i) an extension of the maturity date of the
principal of or the interest on any Obligation, or (ii) a reduction in the
principal amount of any Obligation or the rate of interest thereon, or (iii) a
privilege or priority of any Obligation or Obligations over any other Obligation
or Obligations except as otherwise provided herein, or (iv) a reduction in the
aggregate principal amount of the Obligations required for consent to such
Supplemental Indenture, or (v) the creation of any lien other than a lien
ratably securing all of the Obligations at any time Outstanding hereunder except
as otherwise provided herein or (b) any modification of the trusts, powers,
rights, obligations, duties, remedies, immunities and privileges of the Trustee
without the prior written approval of the Trustee.

        If at any time the Issuer shall request the Trustee to enter into any
such Supplemental Indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such Supplemental Indenture to be mailed by
registered or certified mail to each Registered Owner of an Obligation at the
address shown on the registration books or listed in any Derivative Product.
Such notice (which shall be prepared by the Issuer) shall briefly set forth the
nature of the proposed Supplemental Indenture and shall state that copies
thereof are on file at the principal corporate trust office of the Trustee for
inspection by all Registered Owners. If, within 60 days, or such longer period
as shall be prescribed by the Issuer, following the mailing of such notice, the
Registered Owners of not less than a majority of the collective aggregate
principal amount of the Obligations Outstanding at the time of the execution of
any such Supplemental Indenture shall have consented in writing to and approved


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the execution thereof as herein provided, no Registered Owner of any Obligation
shall have any right to object to any of the terms and provisions contained
therein, or the operation thereof, or in any manner to question the propriety of
the execution thereof, or to enjoin or restrain the Trustee or the Issuer from
executing the same or from taking any action pursuant to the provisions thereof.
Upon the execution of any such Supplemental Indenture as in this Section 8.02
permitted and provided, this Indenture shall be and be deemed to be modified and
amended in accordance therewith.

        SECTION 8.03. ADDITIONAL LIMITATION ON MODIFICATION OF INDENTURE. None
of the provisions of this Indenture (including Sections 8.01 and 8.02 hereof)
shall permit an amendment to the provisions of the Indenture which permits the
transfer of all or part of the Financed Eligible Loans originated under the Act
or granting of a security interest therein to any Person other than an Eligible
Lender or the Servicer, unless the Act or Regulations are hereafter modified so
as to permit the same. The Trustee may request an opinion of counsel to the
effect that an amendment to this Indenture was adopted in conformance with this
Indenture.

        SECTION 8.04. NOTICE OF DEFAULTS. Within 90 days after the occurrence of
any default hereunder with respect to the Notes, the Trustee shall transmit in
the manner and to the extent provided in TIA Section 313(c), notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest with respect to any
Note, or in the payment of any sinking fund installment with respect to the
Notes, the Trustee shall be protected in withholding such notice if and so long
as an authorized officer of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Registered Owners of the
Notes. For the purpose of this Section 8.04, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to the Notes.

        SECTION 8.05. CONFORMITY WITH THE TRUST INDENTURE ACT. Every
supplemental indenture executed pursuant to this Article VIII shall conform to
the requirements of the Trust Indenture Act as then in effect.

                                   ARTICLE IX

                               GENERAL PROVISIONS

        SECTION 9.01. NOTICES. Any notice, request or other instrument required
by this Indenture to be signed or executed by the Registered Owners of
Obligations may be executed by the execution of any number of concurrent
instruments of similar tenor, and may be signed or executed by such Registered
Owners of Obligations in person or by agent appointed in writing. As a condition
for acting thereunder the Trustee may demand proof of the execution of any such
instrument and of the fact that any person claiming to be the owner of any of
said Obligations is such owner and may further require the actual deposit of
such Obligation or Obligations with the Trustee. The fact and date of the
execution of such instrument may be proved by the certificate of any officer in
any jurisdiction who by the laws thereof is authorized to take acknowledgments
of deeds within such jurisdiction, that the person signing such instrument
acknowledged before him the execution thereof, or may be proved by any affidavit
of a witness to such execution sworn to before such officer.

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<PAGE>

        The amount of Notes held by any person executing such instrument as a
Registered Owner of Notes and the fact, amount, and numbers of the Notes held by
such person and the date of his holding the same may be proved by a certificate
executed by any responsible trust company, bank, banker, or other depository in
a form approved by the Trustee, showing that at the date therein mentioned such
person had on deposit with such depository the Notes described in such
certificate; provided, however, that at all times the Trustee may require the
actual deposit of such Note or Notes with the Trustee.

        All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, telecopy or facsimile or
similar writing) at the following addresses, and each address shall constitute
each party's respective "Principal Office" for purposes of the Indenture:

        If intended for the Issuer:

               Nelnet Student Loan Funding, Inc.
               Suite 301
               121 South 13 Street
               Lincoln, Nebraska  68508
               Attention: Terry Heimes
               Telephone:  (402) 458-2303
               Telecopier:  (402) 458-2399

               If intended for the Trustee:

               Wells Fargo Bank Minnesota, National Association
               6th and Marquette Avenue
               Minneapolis, Minnesota  55479-0069
               Attn: Corporate Trust Department
               Telephone:  (612) 667-4802
               Facsimile:  (612) 667-2149


Any party may change the address to which subsequent notices to such party are
to be sent, or of its Principal Office, by notice to the others, delivered by
hand or received by telex or telecopier or registered first-class mail, postage
prepaid. Each such notice, request or other communication shall be effective
when delivered by hand or received by telex or telecopier or registered
first-class mail, postage prepaid.

        SECTION 9.02. COVENANTS BIND ISSUER. The covenants, agreements,
conditions, promises, and undertakings in this Indenture shall extend to and be
binding upon the successors and assigns of the Issuer, and all of the covenants
hereof shall bind such successors and assigns, and each of them, jointly and
severally. All the covenants, conditions, and provisions hereof shall be held to
be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the Registered Owners from time to time of the Obligations.

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<PAGE>

        No extension of time of payment of any of the Obligations shall operate
to release or discharge the Issuer, it being agreed that the liability of the
Issuer, to the extent permitted by law, shall continue until all of the
Obligations are paid in full, notwithstanding any transfer of Financed Eligible
Loans or extension of time for payment.

        SECTION 9.03. LIEN CREATED. This Indenture shall operate effectually as
(a) a grant of lien on and security interest in, and (b) an assignment of, the
Trust Estate.

        SECTION 9.04. SEVERABILITY OF LIEN. If the lien of this Indenture shall
be or shall ever become ineffectual, invalid, or unenforceable against any part
of the Trust Estate, which is not subject to the lien, because of want of power
or title in the Issuer, the inclusion of any such part shall not in any way
affect or invalidate the pledge and lien hereof against such part of the Trust
Estate as to which the Issuer in fact had the right to pledge.

        SECTION 9.05. CONSENT OF REGISTERED OWNERS BINDS SUCCESSORS. Any request
or consent of the Registered Owner of any Obligations given for any of the
purposes of this Indenture shall bind all future Registered Owners of the same
Obligation or any Obligations issued in exchange therefor or in substitution
thereof in respect of anything done or suffered by the Issuer or the Trustee in
pursuance of such request or consent.

        SECTION 9.06. NONLIABILITY OF DIRECTORS; NO GENERAL OBLIGATION. It is
hereby expressly made a condition of this Indenture that any agreements,
covenants, or representations herein contained or contained in the Notes do not
and shall never constitute or give rise to a personal or pecuniary liability or
charge against the incorporators, officers, employees, agents, or directors of
the Issuer, or against the general credit of the Issuer, and in the event of a
breach of any such agreement, covenant, or representation, no personal or
pecuniary liability or charge payable directly or indirectly from the general
revenues of the Issuer shall arise therefrom. Nothing contained in this Section,
however, shall relieve the Issuer from the observance and performance of the
several covenants and agreements on its part herein contained.

        SECTION 9.07. NONPRESENTMENT OF NOTES OR INTEREST CHECKS. Should any of
the Notes or interest checks not be presented for payment when due, the Trustee
shall retain from any money transferred to it for the purpose of paying the
Notes or interest checks so due, for the benefit of the Registered Owners
thereof, a sum of money sufficient to pay such Notes or interest checks when the
same are presented by the Registered Owners thereof for payment. Such money
shall not be required to be invested. All liability of the Issuer to the
Registered Owners of such Notes or interest checks and all rights of such
Registered Owners against the Issuer under the Notes or interest checks or under
this Indenture shall thereupon cease and determine, and the sole right of such
Registered Owners shall thereafter be against such deposit. If any Note or
interest check shall not be presented for payment within the period of two years
following its payment or redemption date, the Trustee shall return to the Issuer
the money theretofore held by it for payment of such Note or interest check, and
such Note or interest check shall (subject to the defense of any applicable
statute of limitation) thereafter be an unsecured obligation of the Issuer. The
Trustee's responsibility for any such money shall cease upon remittance thereof
to the Issuer.

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<PAGE>

        SECTION 9.08. SECURITY AGREEMENT. This Indenture constitutes a Financing
Statement and a Security Agreement under the Nebraska Uniform Commercial Code.

        SECTION 9.09. LAWS GOVERNING. It is the intent of the parties hereto
that this Indenture shall in all respects be governed by the laws of the State.
This Indenture is subject to the provisions of the TIA that are required to be
part of this Indenture and shall, to the extent applicable, be governed by such
provisions.

        SECTION 9.10. SEVERABILITY. Of any covenant, agreement, waiver, or part
thereof in this Indenture contained be forbidden by any pertinent law or under
any pertinent law be effective to render this 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 Indenture shall be construed as if the same were not included herein.

        SECTION 9.11. EXHIBITS. The terms of the Schedules and Exhibits, if any,
attached to this Indenture are incorporated herein in all particulars.

        SECTION 9.12. NON-BUSINESS DAYS. Except as may otherwise be provided
herein, if the date for making payment of any amount hereunder or on any Note,
or if the date for taking any action hereunder, is not a Business Day, then such
payment can be made without accruing further interest or action can be taken on
the next succeeding Business Day, with the same force and effect as if such
payment were made when due or action taken on such required date.

        SECTION 9.13. PARTIES INTERESTED HEREIN. Nothing in this Indenture
expressed or implied is intended or shall be construed to confer upon, or to
give to, any person or entity, other than the Trustee, the paying agent, if any,
and the Registered Owners of the Obligations, any right, remedy or claim under
or by reason of this Indenture or any covenant, condition or stipulation hereof,
and all covenants, stipulations, promises and agreements in this Indenture
contained by and on behalf of the Issuer shall be for the sole and exclusive
benefit of the Trustee, the paying agent, if any, and the Registered Owners of
the Obligations.

        SECTION 9.14. OBLIGATIONS ARE LIMITED OBLIGATIONS. The Notes and the
obligations of the Issuer contained in this Indenture are special, limited
obligations of the Issuer, secured by and payable solely from the Trust Estate
herein provided. The Issuer shall not be obligated to pay the Notes, the
interest thereon, or any other obligation created by or arising from this
Indenture from any other source.

        SECTION 9.15. COUNTERPARTY RIGHTS. Notwithstanding any provision of this
Indenture, no Counterparty which shall be in default under any Derivative
Product with the Issuer shall have any of the rights granted to a Counterparty
or as the Registered Owner of an Obligation hereunder.

        SECTION 9.16. DISCLOSURE OF NAMES AND ADDRESSES OF REGISTERED OWNERS.
Registered Owners of Notes, by receiving and holding the same, agree with the
Issuer and the Trustee that neither the Issuer nor the Trustee nor any
Securities Depository shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Registered Owners of Notes
in accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).

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<PAGE>

        SECTION 9.17. AGGREGATE PRINCIPAL AMOUNT OF OBLIGATIONS. Whenever in
this Indenture reference is made to the aggregate principal amount of any
Obligations, such phrase shall mean, at any time, the principal amount of any
Notes and the Derivative Value of any Derivative Product.

        SECTION 9.18. FINANCED ELIGIBLE LOANS. The Issuer expects to acquire
Eligible Loans and to transfer Eligible Loans to the Trustee, in accordance with
this Indenture, which Eligible Loans, upon becoming subject to the lien of this
Indenture, constitute Financed Eligible Loans, as defined herein. If for any
reason a Financed Eligible Loan does not constitute an Eligible Loan, or ceases
to constitute an Eligible Loan, such loan shall continue to be subject to the
lien of this Indenture as a Financed Eligible Loan.

        SECTION 9.19. NO PETITION. The Trustee will not at any time institute
against the Issuer any bankruptcy proceeding under any United States federal or
State bankruptcy or similar law in connection with any obligations of the Issuer
under this Indenture.

                                   ARTICLE X

                        PAYMENT AND CANCELLATION OF NOTES
                          AND SATISFACTION OF INDENTURE

        SECTION 10.01. TRUST IRREVOCABLE. The trust created by the terms and
provisions of this Indenture is irrevocable until the indebtedness secured
hereby (the Notes and interest thereon) and all Issuer Derivative Payments are
fully paid or provision made for its payment as provided in this Article.

        SECTION 10.02. SATISFACTION OF INDENTURE.

                (a) If the Issuer shall pay, or cause to be paid, or there shall
        otherwise be paid (i) to the Registered Owners of the Notes, the
        principal of and interest on the Notes, at the times and in the manner
        stipulated in this Indenture and (ii) to each Counterparty, all Issuer
        Derivative Payments then due, then the pledge of the Trust Estate which
        is not pledged hereunder, and all covenants, agreements, and other
        obligations of the Issuer to the Registered Owners of Notes shall
        thereupon cease, terminate, and become void and be discharged and
        satisfied. In such event, the Trustee shall execute and deliver to the
        Issuer all such instruments as may be desirable to evidence such
        discharge and satisfaction, and the Trustee shall pay over or deliver
        all money held by it under this Indenture to the party entitled to
        receive the same under this Indenture. If the Issuer shall pay or cause
        to be paid, or there shall otherwise be paid, to the Registered Owners
        of any Outstanding Notes the principal of and interest on such Notes and
        to each Counterparty all Counterparty Payments then due, at the times
        and in the manner stipulated in this Indenture and in the Derivative
        Product, such Notes and each Counterparty shall cease to be entitled to
        any lien, benefit, or security under this Indenture, and all covenants,
        agreements, and obligations of the Issuer to the Registered Owners
        thereof and each Counterparty shall thereupon cease, terminate, and
        become void and be discharged and satisfied.

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<PAGE>

                (b) Notes or interest installments shall be deemed to have been
        paid within the meaning of Section 10.02(a) hereof if money for the
        payment or redemption thereof has been set aside and is being held in
        trust by the Trustee at the Stated Maturity or earlier redemption date
        thereof. Any Outstanding Note shall, prior to the Stated Maturity or
        earlier redemption thereof, be deemed to have been paid within the
        meaning and with the effect expressed in Section 10.02(a) hereof if (i)
        such Note is to be redeemed on any date prior to its Stated Maturity and
        (ii) the Issuer shall have given notice of redemption as provided herein
        on said date, there shall have been deposited with the Trustee either
        money (fully insured by the Federal Deposit Insurance Issuer or fully
        collateralized by Governmental Obligations) in an amount which shall be
        sufficient, or Governmental Obligations (including any Governmental
        Obligations issued or held in book-entry form on the books of the
        Department of Treasury of the United States of America) the principal of
        and the interest on which when due will provide money which, together
        with the money, if any, deposited with the Trustee at the same time,
        shall be sufficient, to pay when due the principal of and interest to
        become due on such Note on and prior to the redemption date or Stated
        Maturity thereof, as the case may be. Notwithstanding anything herein to
        the contrary, however, no such deposit shall have the effect specified
        in this subsection (b) if made during the existence of an Event of
        Default, unless made with respect to all of the Notes then Outstanding.
        Neither Governmental Obligations nor money deposited with the Trustee
        pursuant to this subsection (b) nor principal or interest payments on
        any such Governmental Obligations shall be withdrawn or used for any
        purpose other than, and shall be held irrevocably in trust in an escrow
        account for, the payment of the principal of and interest on such Notes.
        Any cash received from such principal of and interest on such
        Governmental Obligations deposited with the Trustee, if not needed for
        such purpose, shall, to the extent practicable, be reinvested in
        Governmental Obligations maturing at times and in amounts sufficient to
        pay when due the principal of and interest on such Notes on and prior to
        such redemption date or Stated Maturity thereof, as the case may be, and
        interest earned from such reinvestments shall be paid over to the
        Issuer, as received by the Trustee, free and clear of any trust, lien,
        or pledge. Any payment for Governmental Obligations purchased for the
        purpose of reinvesting cash as aforesaid shall be made only against
        delivery of such Governmental Obligations. For the purposes of this
        Section, "Governmental Obligations" shall mean and include only
        non-callable direct obligations of the Department of the Treasury of the
        United States of America or portions thereof (including interest or
        principal portions thereof), and such Governmental Obligations shall be
        of such amounts, maturities, and interest payment dates and bear such
        interest as will, without further investment or reinvestment of either
        the principal amount thereof or the interest earnings therefrom, be
        sufficient to make the payments required herein, and which obligations
        have been deposited in an escrow account which is irrevocably pledged as
        security for the Notes. Such term shall not include mutual funds and
        unit investment trusts.

                (c) Any Issuer Derivative Payments are deemed to have been paid
        and the applicable Derivative Product terminated when payment of all
        Issuer Derivative Payments due and payable to each Counterparty under
        its respective Derivative Product have been made or duly provided for to
        the satisfaction of each Counterparty and the respective Derivative
        Product has been terminated.

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<PAGE>

                (d) In no event shall the Trustee deliver over to the Issuer any
        Financed Eligible Loans originated under the Act unless the Issuer is an
        Eligible Lender, if the Act or Regulations then in effect require the
        owner or holder of such Financed Eligible Loans to be an Eligible
        Lender.

                (e) The provisions of this Section are applicable to the Notes
        and the Issuer Derivative Payments.

        SECTION 10.03. CANCELLATION OF PAID NOTES. Any Notes which have been
paid or purchased by the Issuer, mutilated Notes replaced by new Notes, and any
temporary Note for which definitive Notes have been delivered shall (unless
otherwise directed by the Issuer by Issuer Order) forthwith be cancelled by the
Trustee and, except for temporary Notes, returned to the Issuer.

                                   ARTICLE XI

                                   TERMINATION

        SECTION 11.01. TERMINATION OF THE TRUST.

                (a) The trust created by this Indenture (the "Trust") shall
        terminate upon the earlier of (i) the later of (A) payment to the
        Registered Owners and to the Trustee of all amounts required to be paid
        to them pursuant to this Indenture and any Supplemental Indenture and
        the disposition of all property held as part of the Trust Estate or (B)
        the day following the date on which all reimbursement obligations to the
        Counterparties, if any, and any other Person as may be provided for in
        any Supplemental Indenture have been paid in full, (ii) the expiration
        of 21 years from the death of the last survivor of the descendants of
        Joseph P. Kennedy (the late ambassador of the United States to the Court
        of St. James) living on the date of this Indenture or (iii) subject to
        Section 11.01(d), upon the occurrence of a Liquidation Event (as
        hereinafter defined). The Issuer shall promptly notify the Trustee of
        any prospective termination pursuant to this Section 11.01.

                (b) Notice of any prospective termination, specifying the Note
        Payment Date for payment of the final distribution and requesting the
        surrender of the Notes for cancellation, shall be given promptly by the
        Trustee by letter to Registered Owners mailed not less than 10 nor more
        than 15 days preceding the specified Note Payment Date stating (i) the
        Note Payment Date upon which final payment of the Notes shall be made,
        (ii) the amount of any such final payment, and (iii) the location for
        presentation and surrender of the Notes. Payment of the final
        distribution which shall be made only upon presentation and surrender of
        the Notes at the corporate trust office of the Trustee specified in the
        notice.

                (c) A "Liquidation Event" shall be deemed to have occurred,
        subject to Section 11.01(d), upon Dissolution of the Issuer.

                (d) The Issuer shall not voluntarily take any action that would
        cause it to be deemed dissolved within the meaning of this Article XI.

                                       67
<PAGE>

               In the event of the Dissolution of the Issuer or any action that
        would cause the Issuer to cease being deemed a general partner of the
        Trust if the Trust were deemed a limited partnership formed under the
        Delaware Revised Uniform Limited Partnership Act, and the Issuer's
        interest were deemed to represent the sole general partnership interest
        in such a partnership, the Trust shall terminate 90 days after the date
        of such event and its assets liquidated in accordance with Section
        11.01(e) unless both of the following occur:

                        (i) the Registered Owners representing Registered Owner
                Approval, as defined in Section 6.01 hereof, inform the Trustee
                in writing before the end of such 90 day period that they
                disapprove of the liquidation of the assets of the Trust; and

                        (ii) the Issuer, the Trustee and the Counterparties, if
                any, shall receive an opinion of counsel to the effect that the
                continuation of the Trust shall not cause the Trust to be
                treated as an association taxable as a corporation for federal
                income tax purposes.

                (e) Upon receipt by the Trustee from the Issuer of notice of the
        occurrence of a Liquidation Event (as defined in Section 11.01(c)), the
        Trustee shall, subject to the direction of the Registered Owners
        constituting Registered Owner Approval (provided that, if Registered
        Owners constituting Registered Owner Approval shall not have provided
        such direction to the Trustee within 30 days of the Trustee having sent
        a written request for such direction to the Registered Owners, the
        Trustee shall proceed without such direction) sell the remaining assets
        of the Trust Estate, if any, at public or private sale, in a
        commercially reasonable manner and on commercially reasonable terms. The
        Issuer agrees to cooperate with the Trustee to effect any such sale,
        including by executing such instruments of conveyance or assignment as
        shall be necessary or required by the purchaser. Proceeds of sale, net
        of expenses, shall be treated as collections on the assets of the Trust
        and shall be deposited into the Collection Fund. On the next Note
        Payment Date the Trustee shall cause to be paid to Registered Owners and
        the Issuer amounts distributable on such Note Payment Date pursuant to
        Article V. Following the termination of the Trust, all right, title and
        interest in and to the Financed Eligible Loans and other property and
        funds in the Trust Estate (other than funds on deposit in certain
        accounts for the payment of expenses) shall be conveyed and transferred
        to the Issuer.

        SECTION 11.02. NOTICE. The Trustee shall give notice of termination of
the Trust to the Issuer and each Rating Agency.

                                  ARTICLE XII

                             REPORTING REQUIREMENTS

        SECTION 12.01. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will cause
each Servicer to deliver to the Administrator, each Rating Agency, the Trustee
and the Issuer, on or before March 15 of each year, beginning with March 15,
2004, a certificate dated as of December 31 of the preceding year stating that
(a) a review of the activities of the Servicer during the preceding calendar
year (or, in the case of the first such certificate, during the period from the
Closing Date to December 31, 2003) and of its performance under the Servicing


                                       68
<PAGE>

Agreement has been made under the supervision of the officer signing such
certificate; and (b) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under the Servicing
Agreement throughout such year, or, there has been a default in the fulfillment
of any such obligation, specifying each such default known to such officer and
the nature and statue thereof.

SECTION 12.02. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. Within
75 days of the end of each Servicer's regular fiscal-year or calendar-year audit
period, the Issuer shall cause each Servicer, at its expense, to cause a firm of
independent public accountants to furnish a statement to the Administrator, each
Rating Agency, the Issuer and the Indenture Trustee to the effect that such firm
has examined certain documents and records relating to the servicing of the
Financed Eligible Loans (during the preceding year) in compliance with the
standards for Compliance Audits Attestation Engagements for Lenders and Lender
Servicers Participating in the Federal Family Education Loan Program and that,
on the basis of such examination, such servicing has been conducted in
compliance with such servicing agreements except for such significant exceptions
or errors in records that, in the opinion of such firm, requires it to report
and which are set forth in such report.

        SECTION 12.03. ADMINISTRATOR'S CERTIFICATE. Each month, not later than
the fifteenth day of each month, the Issuer shall deliver to the Trustee, an
Officer's Certificate certifying to the accuracy of the monthly statement
contemplated by Section 12.04.

        SECTION 12.04. STATEMENTS TO NOTEHOLDERS. On or before the fifteenth day
of each month, the Issuer shall provide to the Trustee (with a copy to the
Rating Agencies) for the Trustee to forward within five days of receipt to each
Registered Owner, a statement setting forth at least the following information
with respect to the preceding month, to the extent applicable;

                (a) the amount of payments with respect to each series and class
        of Notes paid with respect to principal during the preceding month;

                (b) the amount of payments with respect to each series and class
        of Notes paid with respect to interest during the preceding month;

                (c) the amount of the payments allocable to any Registered
        Owners' interest carryover, if any, together with any remaining
        outstanding amount of each thereof;

                (d) the principal balance of Financial Eligible Loans as of the
        close of business on the last day of the preceding month;

                (e) the aggregate outstanding principal amount of the Notes of
        each series and class as of the close of business on the last day of the
        preceding month, after giving effect to payments allocated to principal
        reported under clause (a) above;

                (f) the interest rate for any series and class of variable rate
        Notes, indicating such interest rate is calculated;

                                       69
<PAGE>

                (g) the amount of the servicing fees allocated to the Servicer
        as of the close of business on the last day of the preceding month;

                (h) the amount of the Program Expenses, Realized Losses, the
        Auction Agent Fees, Market Agent Fees, Calculation Agent Fees and the
        Trustee Fees, if any, allocated as of the close of business on the last
        day of the preceding month;

                (i) the amount of the recoveries of principal and interest
        received during the preceding month relating to Financed Eligible Loans;

                (j) the amount of the payment attributable to amounts in the
        Reserve Fund, the amount of any other withdrawals from the Reserve Fund
        and the balance of the Reserve Fund as of the close of business on the
        last day of the preceding month;

                (k) the portion, if any, of the payments attributable to amounts
        on deposit in the Acquisition/Redemption Fund;

                (l) the aggregate amount, if any, paid by the Trustee to acquire
        Eligible Loans from amounts on deposit in the Acquisition/Redemption
        Fund during the preceding month;

                (m) the amount remaining in the Acquisition/Redemption Fund that
        has not been used to acquire Eligible Loans and is being transferred to
        the Collection Fund, if any;

                (n) the aggregate amount, if any, paid for Financed Eligible
        Loans purchased from the Trust during the preceding month;

                (o) the number and principal amount of Financed Eligible Loans,
        as of the close of business on the last day of the preceding month, that
        are (i) 30 to 60 days delinquent, (ii) 61 to 90 days delinquent, (iii)
        91 to 120 days delinquent, (iv) more than 120 days delinquent and (v)
        for which claims have been filed with the appropriate Guarantee Agency
        and which are awaiting payment; and

                (p) the Aggregate Market Value of the Trust Estate and the
        Outstanding principal amount of the Notes as of the close of business on
        the last day of the preceding month.

        Each amount set forth pursuant to paragraph (a), (b), (g) and (h) above
shall be expressed as a dollar amount per Authorized Denomination of a Note. A
copy of the statements referred to above may be obtained by any Registered Owner
by a written request to the Trustee, addressed to its corporate trust office.


                                       70
<PAGE>


        IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed
in its corporate name and behalf by its President, and the Trustee, to evidence
its acceptance of the trusts hereby created, has caused this 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 Indenture to be dated as of the date herein above first shown.

                                     NELNET EDUCATION LOAN FUNDING, INC.



                                     By
                                        ----------------------------------------
                                     Name
                                          --------------------------------------
                                     Title
                                           -------------------------------------


                                     WELLS FARGO BANK MINNESOTA, NATIONAL
                                     ASSOCIATION, as Trustee



                                     By
                                        ----------------------------------------
                                         [Name][Title]


<PAGE>

                                    EXHIBIT A

                      ELIGIBLE LOAN ACQUISITION CERTIFICATE


        This Eligible Loan Acquisition Certificate is submitted pursuant to the
provisions of Section 5.02 of the Indenture of Trust, dated as of __________,
2003, as amended (the "Indenture"), between Nelnet Student Loan Funding, Inc.
(the "Issuer") and Wells Fargo Bank Minnesota, National Association, as Trustee.
All capitalized terms used in this Certificate and not otherwise defined herein
shall have the same meanings given to such terms in the Indenture. In your
capacity as Trustee, you are hereby authorized and requested to disburse to
_________________ (the "Lender") the sum of $____________ (or, in the case of an
exchange, the Eligible Loans listed in Exhibit A hereto) for the acquisition of
Eligible Loans. With respect to the Eligible Loans so to be acquired, the Issuer
hereby certifies as follows:

        1. The Eligible Loans to be acquired are those specified in Schedule A
attached hereto (the "Acquired Eligible Loans"). The remaining unpaid principal
amount of each Acquired Eligible Loan is as shown on such Schedule A.

        2. The amount to be disbursed pursuant to this Certificate does not
exceed the amount permitted by Section 5.02 of the Indenture (or, if a Financed
Eligible Loan is being sold in exchange for an Acquired Eligible Loan under the
Indenture, the aggregate unpaid principal amount of, and accrued interest on,
such Financed Eligible Loan does not exceed the amount permitted by Section 5.02
of the Indenture).

        3. Each Acquired Eligible Loan is an Eligible Loan authorized so to be
acquired by the Indenture.

        4. You have been previously, or are herewith, provided with the
following items (the items listed in (a), (b), (c), (d) and (f) have been
received and are being retained, on your behalf, by the Issuer or the Servicer):

               (a) a copy of the Student Loan Purchase Agreement between the
        Issuer and the Eligible Lender with respect to the Acquired Eligible
        Loans (original copy maintained on file with the Issuer on behalf of the
        Trustee);

               (b) with respect to each Insured Loan included among the Acquired
        Eligible Loans, the Certificate of Insurance relating thereto;

               (c) with respect to each Guaranteed Loan included among the
        Acquired Eligible Loans, a certified copy of the Guarantee Agreement
        relating thereto;

               (d) an opinion of counsel to the Issuer specifying each action
        necessary to perfect a security interest in all Eligible Loans to be
        acquired by the Issuer pursuant to the Student Loan Purchase Agreements
        in favor of the Trustee in the manner provided for by the provisions of
        20 U.S.C. ss. 1087-2(d)(3) or 20 U.S.C. ss. 1082(m)(1)(D)(iv), as
        applicable, (you are authorized to rely on the advice of a single
        blanket opinion of counsel to the Issuer until such time as the Issuer
        shall provide any amended opinion to you);


<PAGE>

               (e) a certificate of an Authorized Representative of the Issuer
        to the effect that (i) the Issuer is not in default in the performance
        of any of its covenants and agreements made in the Student Loan Purchase
        Agreement relating to the Acquired Eligible Loans; (ii) with respect to
        all Acquired Eligible Loans which are Insured, Insurance is in effect
        with respect thereto, and with respect to all Acquired Eligible Loans
        which are Guaranteed, the Guarantee Agreement is in effect with respect
        thereto; and (iii) the Issuer is not in default in the performance of
        any of its covenants and agreements made in any Contract of Insurance or
        the Guarantee Agreement applicable to the Acquired Eligible Loans; and

               (f) instruments duly assigning the Acquired Eligible Loans to the
        Trustee.

        5. The Issuer is not, on the date hereof, in default under the Indenture
or in the performance of any of its covenants and agreements made in the Student
Loan Purchase Agreement relating to the Acquired Eligible Loans, and, to the
best knowledge of the Issuer, the Eligible Lender is not in default under the
Student Loan Purchase Agreement applicable to the Acquired Eligible Loans. The
Issuer is not aware of any default existing on the date hereof under any of the
other documents referred to in paragraph 4 hereof, nor of any circumstances
which would reasonably prevent reliance upon the opinion of counsel referred to
in paragraphs 4(d) hereof.

        6. All of the conditions specified in the Student Loan Purchase
Agreement applicable to the Acquired Eligible Loans and the Indenture for the
acquisition of the Acquired Eligible Loans and the disbursement hereby
authorized and requested have been satisfied; provided that the Issuer may waive
the requirement of receiving an opinion of counsel from the counsel to the
Lender.

        7. If a Financed Eligible Loan is being sold in exchange for an Acquired
Eligible Loan, the final expected maturity date of such Acquired Eligible Loan
shall be substantially similar to that of the Financed Eligible Loan being sold
and such sale and exchange shall not adversely affect the ability of the Trust
Estate to make timely principal and interest payments on its Obligations.

        8. With respect to all Acquired Eligible Loans which are Insured,
Insurance is in effect with respect thereto, and with respect to all Acquired
Eligible Loans which are Guaranteed, the Guarantee Agreement is in effect with
respect thereto.

        9. The Issuer is not in default in the performance of any of its
covenants and agreements made in any Contract of Insurance or the Guarantee
Agreement applicable to the Acquired Eligible Loans.

        10. The proposed use of moneys in the Acquisition/Redemption Fund is in
compliance with the provisions of the Indenture.

                                       A-2
<PAGE>

        11. The undersigned is authorized to sign and submit this Certificate on
behalf of the Issuer.

        12. Eligible Loans are being acquired at a price which permits the
results of the cash flow analyses provided to the Rating Agencies on the Date of
Issuance to be sustained.

        WITNESS my hand this _____ day of ___________.

                                    NELNET EDUCATION LOAN FUNDING, INC.



                                    By
                                       -----------------------------------------
                                    Name
                                         ---------------------------------------
                                    Title
                                          --------------------------------------


                                      A-3
<PAGE>


                                    EXHIBIT B

                              FORM OF ISSUER ORDER


                       NELNET EDUCATION LOAN FUNDING, INC.

Issuer Order for the transfer of moneys from the Collection Fund to the
Operating Fund pursuant to Section 5.03 of the Indenture.

                              [__________ __, 200_]

        To:     Wells Fargo Bank Minnesota, National Association, as indenture
                trustee (the "Trustee") under the Indenture of Trust, dated as
                of ____________, 2003, between Nelnet Education Loan Funding,
                Inc. (the "Issuer") and the Trustee, as supplemented from time
                to time (the "Indenture")

Ladies and Gentlemen:

        Pursuant to Section 5.03 of the Indenture, you hereby are authorized and
directed to transfer moneys in the Collection Fund, on _________ __, 20__, to
the Operating Fund, subject to Section 5.05 of the Indenture.

        The Issuer hereby certifies that the amount so transferred (a) does not
exceed the amount budgeted by the Issuer as Program Expenses for such Fiscal
Year with respect to the Notes, (b) does not exceed the amount designated
therefore in the cash flows provided to each Rating Agency and (c) is in
compliance with the provisions of the Indenture and each Supplemental Indenture.

                                       Very truly yours,

                                       NELNET EDUCATION LOAN FUNDING, INC.



                                       By
                                          --------------------------------------
                                       Name
                                            ------------------------------------
                                       Title
                                             -----------------------------------

Dated:  [__________ __, 200_]