exv4w2



 






EXHIBIT 4.2














INDENTURE OF TRUST




from




HIGHER EDUCATION FUNDING I




and




THE BANK OF NEW YORK,

as Eligible Lender Trustee




to




THE BANK OF NEW YORK,

as Trustee




Dated as of January 1, 2004















 









 












	 	 	 	 	 	 	 
	 
	 	 ARTICLE I	 	 	 	 
	 
	 	DEFINITIONS AND GENERAL PROVISIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.01.
	 	Definitions	 	 	3	 
	Section 1.02.
	 	Definitions of General Terms	 	 	23	 
	Section 1.03.
	 	Computations	 	 	23	 
	Section 1.04.
	 	Compliance Certificates and Opinions, Etc	 	 	23	 
	Section 1.05.
	 	Evidence of Action by the Issuer	 	 	25	 
	Section 1.06.
	 	Exclusion of Notes Held By or For the Issuer	 	 	25	 
	Section 1.07.
	 	Exhibits	 	 	25	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE II	 	 	 	 
	 
	 	THE NOTES AND OTHER OBLIGATIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.01.
	 	General Title	 	 	25	 
	Section 2.02.
	 	General Limitations; Issuable in Series; Purposes and Conditions for Issuance; Payment of Principal and Interest	 	 	25	 
	Section 2.03.
	 	Terms of Particular Series	 	 	27	 
	Section 2.04.
	 	Form and Denominations	 	 	27	 
	Section 2.05.
	 	Execution, Authentication and Delivery	 	 	28	 
	Section 2.06.
	 	Temporary Notes	 	 	28	 
	Section 2.07.
	 	Registration, Transfer and Exchange	 	 	28	 
	Section 2.08.
	 	Mutilated, Destroyed, Lost and Stolen Notes	 	 	32	 
	Section 2.09.
	 	Interest Rights Preserved; Dating of Notes	 	 	33	 
	Section 2.10.
	 	Persons Deemed Holders	 	 	33	 
	Section 2.11.
	 	Cancellation	 	 	33	 
	Section 2.12.
	 	Credit Enhancement Facilities and Swap Agreements	 	 	34	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE III	 	 	 	 
	 
	 	 PREPAYMENT OF NOTES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.01.
	 	Right of Prepayment	 	 	34	 
	Section 3.02.
	 	Election To Prepay or Purchase; Notice to Trustee; Senior Asset Requirement and Subordinate Asset Requirement	 	 	34	 
	Section 3.03.
	 	Selection by Trustee of Notes To Be Prepaid	 	 	35	 
	Section 3.04.
	 	Notice of Prepayment	 	 	36	 
	Section 3.05.
	 	Notes Payable on Prepayment Date and Sinking Fund Payment Date	 	 	37	 
	Section 3.06.
	 	Notes Prepaid in Part	 	 	37	 
	Section 3.07.
	 	Purchase of Notes	 	 	37	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE IV	 	 	 	 
	 
	 	CREATION OF FUNDS AND ACCOUNTS; CREDITS THERETO AND PAYMENTS THEREFROM	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.01.
	 	Creation of Funds and Accounts	 	 	38	 
	Section 4.02.
	 	Acquisition Fund	 	 	39	 
	Section 4.03.
	 	Administration Fund	 	 	41	 






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	Section 4.04.
	 	Reserve Fund	 	 	42	 
	Section 4.05.
	 	Collection Fund	 	 	43	 
	Section 4.06.
	 	Debt Service Fund	 	 	45	 
	Section 4.07.
	 	Surplus Fund	 	 	49	 
	Section 4.08.
	 	Borrower Benefits Fund	 	 	50	 
	Section 4.09.
	 	Termination	 	 	51	 
	Section 4.10.
	 	Pledge	 	 	51	 
	Section 4.11.
	 	Investments	 	 	52	 
	Section 4.12.
	 	Transfer of Investment Securities	 	 	55	 
	Section 4.13.
	 	Verification of Investment Securities	 	 	56	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE V	 	 	 	 
	 
	 	  COVENANTS TO SECURE NOTES, REPRESENTATIONS AND WARRANTIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.01.
	 	Eligible Lender Trustee to Hold Financed Student Loans	 	 	56	 
	Section 5.02.
	 	Enforcement and Amendment of Guarantee Agreements	 	 	56	 
	Section 5.03.
	 	Acquisition, Collection and Assignment of Student Loans	 	 	56	 
	Section 5.04.
	 	Enforcement of Financed Student Loans	 	 	56	 
	Section 5.05.
	 	Administration and Collection of Financed Student Loans	 	 	57	 
	Section 5.06.
	 	Punctual Payments	 	 	58	 
	Section 5.07.
	 	Further Assurances	 	 	58	 
	Section 5.08.
	 	Protection of Security; Power to Issue Notes and Pledge Revenues and Other Funds	 	 	58	 
	Section 5.09.
	 	No Encumbrances	 	 	59	 
	Section 5.10.
	 	Continuing Existence; Merger and Consolidation	 	 	59	 
	Section 5.11.
	 	Amendment of Remarketing Agreements and Tender Agent Agreements	 	 	60	 
	Section 5.12.
	 	Tax Treatment	 	 	60	 
	Section 5.13.
	 	Representations and Warranties of the Issuer	 	 	60	 
	Section 5.14.
	 	Use of Trustee Eligible Lender Number	 	 	62	 
	Section 5.15.
	 	Additional Covenants	 	 	62	 
	Section 5.16.
	 	Covenant Regarding Financed Student Loans	 	 	62	 
	Section 5.17.
	 	Opinions as to Trust Estate	 	 	64	 
	Section 5.18.
	 	Representations of the Issuer Regarding the Trustee’s Security Interest	 	 	64	 
	Section 5.19.
	 	Covenants of the Issuer Regarding the Trustee’s Security Interest	 	 	65	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE VI	 	 	 	 
	 
	 	  DEFAULTS AND REMEDIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01.
	 	Events of Default	 	 	65	 
	Section 6.02.
	 	Acceleration	 	 	67	 
	Section 6.03.
	 	Other Remedies; Rights of Beneficiaries	 	 	70	 
	Section 6.04.
	 	Direction of Proceedings by Acting Beneficiaries Upon Default	 	 	71	 
	Section 6.05.
	 	Waiver of Stay or Extension Laws	 	 	71	 
	Section 6.06.
	 	Application of Moneys	 	 	71	 
	Section 6.07.
	 	Remedies Vested in Trustee	 	 	77	 
	Section 6.08.
	 	Limitation on Suits by Beneficiaries	 	 	77	 






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	Section 6.09.
	 	Unconditional Right of Holders To Enforce Payment	 	 	77	 
	Section 6.10.
	 	Trustee May File Proofs of Claims	 	 	78	 
	Section 6.11.
	 	Undertaking for Costs	 	 	78	 
	Section 6.12.
	 	Termination of Proceedings	 	 	79	 
	Section 6.13.
	 	Waiver of Defaults and Events of Default	 	 	79	 
	Section 6.14.
	 	Inspection of Books and Records	 	 	79	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE VII	 	 	 	 
	 
	 	   FIDUCIARIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01.
	 	Acceptance of the Trustee	 	 	80	 
	Section 7.02.
	 	Fees, Charges and Expenses of the Trustee, Paying Agents, Note Registrar, Authenticating Agents, Remarketing Agents, Tender Agents, Auction Agents, Market Agents and Broker-Dealers	 	 	82	 
	Section 7.03.
	 	Notice to Beneficiaries if Default Occurs	 	 	82	 
	Section 7.04.
	 	Intervention by Trustee	 	 	83	 
	Section 7.05.
	 	Successor Trustee, Paying Agents, Authenticating Agents, and Tender Agents	 	 	83	 
	Section 7.06.
	 	Resignation by Trustee, Paying Agents, Authenticating Agents, and Tender Agents	 	 	83	 
	Section 7.07.
	 	Removal of Trustee	 	 	83	 
	Section 7.08.
	 	Appointment of Successor Trustee	 	 	84	 
	Section 7.09.
	 	Concerning any Successor Trustee	 	 	84	 
	Section 7.10.
	 	Trustee Protected in Relying Upon Resolutions, Etc	 	 	85	 
	Section 7.11.
	 	Successor Trustee as Custodian of Funds	 	 	85	 
	Section 7.12.
	 	Co-Trustee	 	 	85	 
	Section 7.13.
	 	Corporate Trustee Required; Eligibility; Disqualification	 	 	87	 
	Section 7.14.
	 	Statement by Trustee of Funds and Accounts and Other Matters	 	 	87	 
	Section 7.15.
	 	Trustee, Authenticating Agent, Note Registrar, Paying Agents, Remarketing Agents, Tender Agents, Auction Agents, Market Agents and Broker-Dealers May Buy, Hold, Sell or Deal in Notes	 	 	87	 
	Section 7.16.
	 	Authenticating Agent and Paying Agents; Paying Agents To Hold Moneys in Trust	 	 	88	 
	Section 7.17.
	 	Removal of Authenticating Agent and Paying Agents; Successors	 	 	88	 
	Section 7.18.
	 	Appointment and Qualifications of Tender Agents	 	 	89	 
	Section 7.19.
	 	Remarketing Agents	 	 	90	 
	Section 7.20.
	 	Qualifications of Remarketing Agents	 	 	91	 
	Section 7.21.
	 	Indemnification of the Trustee	 	 	92	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE VIII	 	 	 	 
	 
	 	  SUPPLEMENTAL INDENTURES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.01.
	 	Supplemental Indentures Not Requiring Consent of Beneficiaries	 	 	93	 
	Section 8.02.
	 	Supplemental Indentures Requiring Consent of Beneficiaries	 	 	93	 
	Section 8.03.
	 	Rights of Trustee	 	 	95	 
	Section 8.04.
	 	Consent of Tender Agents	 	 	95	 
	Section 8.05.
	 	Consent of Remarketing Agents	 	 	95	 






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	Section 8.06.
	 	Consent of Auction Agents	 	 	95	 
	Section 8.07.
	 	Consent of Broker-Dealers	 	 	96	 
	Section 8.08.
	 	Consent of Market Agents	 	 	96	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE IX	 	 	 	 
	 
	 	  DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.01.
	 	Discharge of Liens and Pledges; Notes No Longer Outstanding and Deemed To Be Paid Hereunder	 	 	96	 
	Section 9.02.
	 	Notes Not Presented for Payment When Due; Moneys Held for the Notes after Due Date of Notes	 	 	98	 
	 
	 	 	 	 	 	 
	 
	 	 ARTICLE X	 	 	 	 
	 
	 	  MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.01.
	 	Consent, etc., of Holders	 	 	99	 
	Section 10.02.
	 	Limitation of Rights	 	 	99	 
	Section 10.03.
	 	Severability	 	 	99	 
	Section 10.04.
	 	Notices	 	 	100	 
	Section 10.05.
	 	Counterparts	 	 	101	 
	Section 10.06.
	 	Indenture Constitutes a Security Agreement	 	 	101	 
	Section 10.07.
	 	Payments Due on Non-Business Days	 	 	101	 
	Section 10.08.
	 	Notices to Rating Agencies	 	 	102	 
	Section 10.09.
	 	Governing Law	 	 	102	 
	Section 10.10.
	 	Rights of Other Beneficiaries	 	 	102	 
	Section 10.11.
	 	Subcontracting by Issuer	 	 	102	 
	Section 10.12.
	 	Role of Eligible Lender Trustee	 	 	102	 
	Section 10.13.
	 	Limitation of Liability	 	 	102	 






EXHIBIT A — ELIGIBLE LOAN ACQUISITION CERTIFICATE




EXHIBIT B — FORM OF
STUDENT LOAN PURCHASE AGREEMENT






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     THIS INDENTURE OF TRUST, dated as of January 1, 2004, between HIGHER EDUCATION LOAN FUNDING I,
a Delaware statutory trust (herein called the “Issuer”), THE BANK OF NEW YORK, as trustee pursuant
to an Eligible Lender Trust Agreement with the Issuer dated the date hereof (herein called the
“Eligible Lender Trustee”), and THE BANK OF NEW YORK, a banking corporation duly established,
existing and authorized to accept and execute trusts of the character herein set out under and by
virtue of the laws of the State of New York, as trustee (herein called the “Trustee”);



RECITALS OF THE ISSUER




     WHEREAS, the Issuer is organized to assist Consolidation Loan Funding II, LLC, a Delaware
limited liability company (the “Depositor”) in acquiring and financing student loans; and



     WHEREAS, the Issuer and the Eligible Lender Trustee have entered into a Trust Agreement (the
“Eligible Lender Trust Agreement”) pursuant to which the Eligible Lender Trustee will hold legal
title to certain of the student loans acquired by the Issuer as beneficial owner; and



     WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to
provide for the issuance of its Notes, to be issued in one or more series (hereinafter referred to
as the “Notes”), to finance the acquisition of such loans and for the other purposes as in this
Indenture provided; and



     WHEREAS, all things necessary to make the Notes, when executed by the Issuer and authenticated
and delivered by the Trustee hereunder, the valid obligations of the Issuer, and to make this
Indenture a valid agreement of the Issuer in accordance with its terms, have been done;



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



     The Issuer and the Eligible Lender Trustee, in consideration of the premises and the
acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the
Notes by the Holders thereof, the execution and delivery of any Swap Agreement (as hereinafter
defined) by any Swap Counterparty (as hereinafter defined), the execution and delivery of any
Credit Enhancement Facility (as hereinafter defined) by any Credit Facility Provider (as
hereinafter defined), and the acknowledgment thereof by the Trustee, in order to secure the payment
of the principal of, premium, if any, and interest on and any Carry-Over Amounts (and accrued
interest thereon) with respect to the Notes according to their tenor and effect and the performance
and observance by the Issuer of all the covenants expressed or implied herein and in the Notes and
in any such Swap Agreement or Credit Enhancement Facility, do hereby grant to the Trustee, and to
its successors in trust, and to them and their assigns, forever, a security interest in the
following:



GRANTING CLAUSE FIRST




     All rights, title, interest and privileges of the Issuer and/or the Eligible Lender Trustee
(a) with respect to Financed Student Loans, in, to and under any Servicing Agreement, the Eligible
Lender Trust Agreement, the Guarantee Agreements and any purchase and sale



 









 







agreements pursuant to which the Issuer acquires Financed Student Loans; (b) in, to and under
all Financed Student Loans (including the evidences of indebtedness thereof and related
documentation), the proceeds of the sale of the Notes (until expended for the purpose for which the
Notes were issued) and the revenues, moneys, evidences of indebtedness and securities (including
any earnings thereon) in and payable into the Acquisition Fund, the Debt Service Fund, the
Collection Fund, the Reserve Fund, the Administration Fund and the Surplus Fund, in the manner and
subject to the prior applications provided in Article IV hereof; and (c) in, to and under any
Credit Enhancement Facility, any Swap Agreement, any Swap Counterparty Guaranty, any Tender Agent
Agreement, any Remarketing Agreement, any Auction Agent Agreement, any Market Agent Agreement and
any Broker-Dealer Agreement, all as hereinbefore and hereinafter defined, including any contract or
any evidence of indebtedness or other rights of the Issuer to receive any of the same whether now
existing or hereafter coming into existence, and whether now or hereafter acquired;



GRANTING CLAUSE SECOND




     All proceeds from any property described in these Granting Clauses and any and all other
property of every name and nature from time to time hereafter by delivery or by writing of any kind
conveyed, pledged, assigned or transferred, as and for additional security hereunder by the Issuer
or by anyone on its behalf or with its written consent to the Trustee, which is hereby authorized
to receive any and all such property at any and all times and to hold and apply the same subject to
the terms hereof;



     To Have and to Hold all the same with all privileges and appurtenances hereby conveyed and
assigned, or agreed or intended so to be, to the Trustee and its successors in said trust and to
them and their assigns forever;



     In Trust Nevertheless, upon the terms and trust herein set forth (a) for the equal and
proportionate benefit, security and protection of all present and future Senior Beneficiaries (as
hereinafter defined), without privilege, priority or distinction as to lien or otherwise of any of
the Senior Beneficiaries over any of the others; (b) for the equal and proportionate benefit,
security and protection of all present and future Subordinate Beneficiaries (as hereinafter
defined), without privilege, priority or distinction as to the lien or otherwise of any of the
Subordinate Beneficiaries over any of the others, but on a basis subordinate to the Senior
Beneficiaries on the terms described herein; and (c) for the equal and proportionate benefit,
security and protection of all present and future Junior Subordinate Beneficiaries (as hereinafter
defined), without privilege, priority or distinction as to the lien or otherwise of any of the
Junior Subordinate Beneficiaries over any of the others, but on a basis subordinate to the Senior
Beneficiaries and the Subordinate Beneficiaries on the terms described herein;



     Provided, However, that if the Issuer, its successors or assigns, shall well and truly pay, or
cause to be paid, the principal of and premium, if any, on the Notes and the interest and any
Carry-Over Amounts (and accrued interest thereon) with respect thereto 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 the
payments into the Trust Funds as required under Article IV hereof, or shall provide, as permitted
hereby, for the payment thereof by depositing with the Trustee sums sufficient for payment of



2









 







the entire amount due and to become due thereon as herein provided, and shall well and truly
keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture
to be kept, performed and observed by it, and shall pay to the Trustee, any Swap Counterparty and
any Credit Facility Provider all sums of money due or to become due to them in accordance with the
terms and provisions hereof, then (except as otherwise provided in a Supplemental Indenture) this
Indenture 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 for the benefit of all Holders of the
Notes and for the benefit of any Swap Counterparty and any Credit Facility Provider, as follows:



ARTICLE I




DEFINITIONS AND GENERAL PROVISIONS




     Section 1.01. Definitions. In this Indenture the following terms have the following
respective meanings unless the context hereof clearly requires otherwise:



     “Account” means any of the accounts created or established by this Indenture.



     “Accountant” means any registered or certified public accountant or firm of such accountants
selected and paid by the Issuer, who is Independent and not under the domination of the Issuer, but
who may be regularly retained to make annual or similar audits of the books or records of the
Issuer.



     “Acquisition Fund” means the Acquisition Fund created and established by Section 4.01 hereof.



     “Acquisition Period” with respect to any series of Notes shall have the meaning set forth in
the related Supplemental Indenture.



     “Acting Beneficiaries Upon Default” means:




     (a) at any time that any Senior Obligations are Outstanding: (i) with respect to
directing the Trustee to accelerate the Outstanding Notes pursuant to Section 6.02 hereof
(A) upon an Event of Default described in clauses (a) through (d) of Section 6.01 hereof,
the Holders of a majority in aggregate Principal Amount of Senior Notes Outstanding; and (B)
upon any other Event of Default described in Section 6.01 hereof, the Holders of a majority
in aggregate Principal Amount of all Notes Outstanding; (ii) with respect to requesting the
Trustee to exercise rights and powers under this Indenture, directing the conduct of
proceedings in connection with the enforcement of this Indenture and requiring the Trustee
to waive Events of Default: (A) the Holders of a majority in aggregate Principal Amount of
the Senior Notes Outstanding, unless the Trustee shall receive conflicting requests or
directions from any Other Senior Beneficiary; or (B) any Other Senior Beneficiary, unless
the Trustee determines that the requested action is not in the overall interest of the
Senior Beneficiaries or receives conflicting requests or directions from another Other
Senior Beneficiary or the Holders of a majority in



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aggregate Principal Amount of the Senior Notes Outstanding; and (iii) with respect to
all other matters under this Indenture, the Holders of a majority in aggregate Principal
Amount of Senior Notes Outstanding or any Other Senior Beneficiary; and




     (b) at any time that no Senior Obligations are Outstanding but Subordinate Obligations
are Outstanding: (i) with respect to directing the Trustee to accelerate the Outstanding
Notes pursuant to Section 6.02 hereof (A) upon an Event of Default described in clauses (A)
through (D) of Section 6.01 hereof, the Holders of a majority in aggregate Principal Amount
of Subordinate Notes Outstanding; and (B) upon any other Event of Default described in
Section 6.01, the Holders of a majority in aggregate Principal Amount of all Notes
Outstanding; (ii) with respect to requesting the Trustee to exercise rights and powers under
this Indenture, directing the conduct of proceedings in connection with the enforcement of
this Indenture and requiring the Trustee to waive Events of Default: (A) the Holders of a
majority in aggregate Principal Amount of the Subordinate Notes Outstanding, unless the
Trustee receives conflicting requests or directions from any Other Subordinate Beneficiary;
or (B) any Other Subordinate Beneficiary, unless the Trustee determines that the requested
action is not in the overall interest of the Subordinate Beneficiaries or receives
conflicting requests or directions from another Other Subordinate Beneficiary or the Holders
of a majority in aggregate Principal Amount of the Subordinate Notes Outstanding; and (iii)
with respect to all other matters under this Indenture, the Holders of a majority in
aggregate Principal Amount of Subordinate Notes Outstanding or any Other Subordinate
Beneficiary.




     (c) at any time that no Senior Obligations and no Subordinate Obligations are
Outstanding but any Junior Subordinate Obligations are Outstanding, (i) with respect to
directing the Trustee to accelerate the Outstanding Junior Subordinate Notes pursuant to
Section 6.02 hereof, the Holders of a majority in aggregate Principal Amount of Junior
Subordinate Notes Outstanding; (ii) with respect to requesting the Trustee to exercise
rights and powers under this Indenture, directing the conduct of proceedings in connection
with the enforcement of this Indenture and requiring the Trustee to waive Events of Default:
(A) the Holders of a majority in aggregate Principal Amount of the Junior Subordinate Notes
Outstanding, unless the Trustee receives conflicting requests or directions from an Other
Junior Subordinate Beneficiary; or (B) any Other Junior Subordinate Beneficiary, unless the
Trustee determines that the requested action is not in the overall interest of the Junior
Subordinate Beneficiaries or receives conflicting requests or directions from another Other
Junior Subordinate Beneficiary or the Holders of a majority in aggregate Principal Amount of
the Junior Subordinate Notes Outstanding; and (iii) with respect to all other matters under
this Indenture, the Holders of a majority in aggregate Principal Amount of Junior
Subordinate Notes Outstanding or any Other Junior Subordinate Beneficiary.



     “Add-On Loan” means, with respect to any Consolidation Loan owned by the Issuer, an amount
equal to the increased balance of such Consolidation Loan arising out of amounts required to be
paid to a Lender at the request of the related borrower within 180 days of the date such
Consolidation Loan was originated.



4









 





     “Administration Agreement” means the Administration Agreement, dated as of January 1, 2004,
among the Issuer Administrator, the Issuer, the Trustee, the Eligible Lender Trustee and the
Delaware Trustee as such agreement may be amended or supplemented from time to time.



     “Administration Fee” means, with respect to each series of Notes, a monthly fee in an amount
set forth in the Supplemental Indenture authorizing such series of Notes, which shall be released
to the Issuer Administrator or any Outside Administrator each month to cover expenses (other than
Servicing Fees and Note Fees) incurred in connection with carrying out and administering its
powers, duties and functions under this Indenture and any related agreements.



     “Administration Fund” means the Administration Fund created and established by Section 4.01
hereof.



     “Aggregate Value” means on any calculation date the sum of the Values of all assets of the
Trust Estate.



     “Asset Release Requirement” means, at any time, any requirement set forth as such in a
Supplemental Indenture.



     “Auction Agent” means, with respect to any series of Notes, any bank, national banking
association or trust company designated as such with respect to such Notes pursuant to the
provisions of a Supplemental Indenture, and its successor or successors, and any bank, national
banking association or trust company at any time substituted in its place pursuant to such
Supplemental Indenture.



     “Auction Agent Agreement” means, with respect to any series of Notes, an agreement among an
Auction Agent, the Issuer and the Trustee setting forth the rights and obligations of the Auction
Agent acting in such capacity with respect to such Notes under this Indenture and the related
Supplemental Indenture, including any supplement thereto or amendment thereof entered into in
accordance with the provisions thereof.



     “Authenticating Agent,” when used with respect to a series of Notes, means a bank or trust
company (which may be the Trustee) appointed for the purpose of receiving, authenticating and
delivering Notes of that series in connection with transfers, exchanges and registrations as in
this Indenture provided, and its successor or successors and any other bank or trust company which
may at any time be substituted in its place as Authenticating Agent pursuant to this Indenture.



     “Authorized Officer,” when used with reference to the Issuer, means those individuals
authorized to act for the Issuer Administrator, as set forth in a list of Authorized Officers
delivered by the Issuer Administrator to the Trustee and the Delaware Trustee, as such list may be
amended from time to time by the Issuer Administrator.



     “Balance,” when used with reference to any Account or Fund, means the aggregate sum of all
assets standing to the credit of such Account or Fund, including, without limitation, Investment
Securities computed at the Investment Security Balance Valuation; Financed Student Loans computed
at the Value thereof; and lawful money of the United States; provided, however, that (a) the
Balance of the Interest Account shall not include amounts standing to the credit



5









 







thereof which are being held therein for (i) the payment of past due and unpaid interest on
Notes; or (ii) the payment of interest on Notes that are deemed no longer Outstanding as a result
of the defeasance thereof pursuant to subparagraph (b) of the first paragraph of Section 9.01
hereof; and (b) the Balances of the Principal Account and the Retirement Account shall not include
amounts standing to the credit thereof which are being held therein for the payment of principal of
or premium, if any, on Notes which are deemed no longer Outstanding in accordance with the
provisions of subparagraph (b) of the first paragraph of Section 9.01 hereof.



     “Beneficial Owner” means the Person in whose name a Note is recorded as beneficial owner of
such Note by the Securities Depository under a book-entry system, or by a Participant or Indirect
Participant, as the case may be.



     “Beneficial Ownership Interest” means the right to receive payments and notices with respect
to Notes which are held by the Securities Depository under a book-entry system and for which the
Securities Depository does not act on behalf of the Beneficial Owner in connection with the
optional or mandatory tender of Notes on a Tender Date.



     “Beneficiaries” means, collectively, all Senior Beneficiaries, all Subordinate Beneficiaries
and all Junior Subordinate Beneficiaries.



     “Book-Entry Notes” means Notes registered in book-entry form.



     “Borrower Benefits” shall have the meaning assigned to such term in a Supplemental Indenture.



     “Borrower Benefits Fund” means the Borrower Benefits Fund created and established by Section
4.01 hereof.



     “Broker-Dealer” means, with respect to any series of Notes, any broker or dealer (each as
defined in the Exchange Act), commercial bank or other entity permitted by law to perform the
functions required of a broker-dealer set forth in the auction procedures relating to such Notes,
designated as such with respect to such Notes pursuant to the provisions of a Supplemental
Indenture, and its successor or successors, and any broker or dealer, commercial bank or other
entity at any time substituted in its place pursuant to such Supplemental Indenture.



     “Broker-Dealer Agreement” means, with respect to any series of Notes, an agreement between an
Auction Agent and a Broker-Dealer, and approved by the Issuer, setting forth the rights and
obligations of the Broker-Dealer acting in such capacity with respect to such Notes under this
Indenture and the related Supplemental Indenture, including any supplement thereto or amendment
thereof entered into in accordance with the provisions thereof.



     “Business Day” means a day of the year other than a Saturday, a Sunday or a day on which banks
located in the city in which the Principal Office of the Trustee is located, in the city in which
the Principal Office of any Authenticating Agent is located or in the city in which the Principal
Office of the Issuer is located, are required or authorized by law to remain closed, or on which
The New York Stock Exchange is closed; provided, that a Supplemental Indenture may provide for a
different meaning with respect to Notes of any series issued pursuant thereto.



6









 





     “Carry-Over Amount” means, if and to the extent specifically provided for as such in a
Supplemental Indenture with respect to a series of Variable Rate Notes, the excess, if any, of (a)

the amount of interest on a Note that would have accrued with respect to the related interest
period at the applicable interest rate over (b) the amount of interest on such Note actually
accrued with respect to such Note, with respect to such interest period based on the maximum rate
specified in a Supplemental Indenture, together with the unpaid portion of any such excess from
prior interest periods. To the extent required by a Supplemental Indenture providing for any
Carry-Over Amount, interest will accrue on such Carry-Over Amount until paid. Any reference to
“principal” or “interest” in this Indenture and in the related Notes shall not include, within the
meanings of such words, any Carry-Over Amount or any interest accrued on any Carry-Over Amount.



     “Cash Flows” means cash flow schedules prepared by the Issuer or its designee, including a
listing of all assumptions used in the preparation of such cash flow schedules, in connection with
the issuance of any Notes hereunder or in connection with obtaining a Rating Agency Confirmation.



     “Code” means the Internal Revenue Code of 1986, as amended, or any successor legislation
thereto.



     “Collection Fund” means the Collection Fund created and established by Section 4.01 hereof.



     “Consolidation Loan” means a Student Loan originated pursuant to Section 428C of the Higher
Education Act.



     “Costs of Issuance” means all items of expense directly or indirectly payable by or
reimbursable to the Issuer and related to the authorization, sale and issuance of a series of the
Notes, including, but not limited to, printing costs, costs of preparation and reproduction of
documents, filing fees, initial fees, charges and expenses of the Trustee, the Delaware Trustee,
the Eligible Lender Trustee, any Authenticating Agent, any Remarketing Agent, any Tender Agent, any
Auction Agent, any Market Agent or any Broker-Dealer, legal fees and charges, fees and
disbursements of underwriters, consultants and professionals, underwriters’ discount, costs of
credit ratings, fees and charges for preparation, execution, transportation and safekeeping of such
Notes, other costs incurred by the Issuer in anticipation of the issuance of such Notes and any
other cost, charge or fee in connection with the issuance of such Notes.



     “Counsel” means a person, or firm of which such a person is a member, authorized in any state
or the District of Columbia to practice law.



     “Counterparty Swap Payment” means a payment due to or received by the Issuer from a Swap
Counterparty pursuant to a Swap Agreement (including, but not limited to, payments in respect of
any early termination of such Swap Agreement) and amounts received by the Issuer under any related
Swap Counterparty Guaranty.



     “Credit Enhancement Facility” means, if and to the extent provided for in a Supplemental
Indenture described in Section 8.01(h) hereof, with respect to Notes of one or more series (a) an
insurance policy insuring, or a letter of credit or surety bond providing a direct or indirect
source



7









 







of funds for, the timely payment of principal of and interest on such Notes (but not
necessarily principal due upon acceleration thereof under Section 6.02 hereof); or (b) a letter of
credit, standby purchase agreement, or similar instrument, providing for the purchase of such Notes
on a Tender Date, and in either case, all agreements entered into by the Issuer or the Trustee and
the Credit Facility Provider with respect thereto.



     “Credit Facility Provider” means, if and to the extent provided for in a Supplemental
Indenture entered into pursuant to Section 8.01(h) hereof, any Person or Persons engaged by the
Issuer pursuant to a Credit Enhancement Facility, to provide credit enhancement or liquidity for
the payment of the principal of and interest on any or all of the Notes of one or more series or
the Issuer’s obligation to purchase Notes on a Tender Date.



     “Custodian” means Great Lakes Educational Loan Services, Inc., as custodian pursuant to the
Custodian Agreement, dated as of January 1, 2004, among Great Lakes Educational Loan Services,
Inc., the Issuer, the Eligible Lender Trustee and the Trustee, ACS Education Services, Inc., as
custodian pursuant to the Custodian Agreement, dated as of January 1, 2004, among ACS Education
Services, Inc., the Issuer, the Eligible Lender Trustee and the Trustee, and its successors and
assigns in such capacity, and any other Person entering into a similar agreement and for which a
Rating Agency Confirmation has been obtained.



     “Debt Service” means: (a) with respect to any Notes, as of any particular date and with
respect to any particular period, the aggregate of the moneys to be paid or set aside on such date
or during such period for the payment (or retirement) of the principal of, premium, if any, and
interest on Notes; and (b) with respect to Other Obligations, as of any particular date and with
respect to any particular period, the aggregate of the moneys to be paid or set aside on such date
or during such period for the payment of amounts payable by the Issuer under any Swap Agreements or
Credit Enhancement Facilities, including fees payable by the Issuer to the Credit Facility Provider
thereunder.



     “Debt Service Fund” means the Debt Service Fund created and established by Section 4.01
hereof.



     “Defaulted Interest” shall have the meaning given in Section 2.02 hereof.



     “Delaware Trustee” means The Bank of New York (Delaware), not in its individual capacity but
solely as trustee under the Trust Agreement, and its successors and assigns in such capacity.



     “Depositor” means Consolidation Loan Funding II, LLC, a Delaware limited liability company, as
depositor under the Trust Agreement, and any successor thereto or assignee thereof.



     “Direct Participant” means any broker-dealer, bank or other financial institution for whom the
nominee of the Securities Depository holds an interest in any Note.



     “DTC” means The Depository Trust Company.



     “DTC Custodian” means the Trustee as a custodian for DTC.



8









 





     “Eligible Borrower” means a borrower who is eligible under the Higher Education Act to be the
obligor of a loan for consolidating two or more Student Loans, or who is eligible under the Higher
Education Act to be an obligor of a loan made pursuant to the Higher Education Act.



     “Eligible Institution” means (i) an institution of higher education; (ii) a vocational school;
or (iii) with respect to students who are nationals of the United States, an institution outside
the United States which is comparable to an institution of higher education or to a vocational
school and which has been approved by the Secretary of Education.



     “Eligible Lender Trust Agreement” means the Eligible Lender Trust Agreement, dated as of
January 1, 2004, between the Issuer, as grantor, and the Eligible Lender Trustee, as trustee, and
any similar agreement entered into by the Issuer and an “eligible lender” under the Higher
Education Act pursuant to which such “eligible lender” holds Financed Student Loans as legal owner
in trust for the Issuer as beneficial owner, in each case as supplemented or amended from time to
time.



     “Eligible Lender Trustee” means The Bank of New York, as trustee under the Eligible Lender
Trust Agreement, and its successors and assigns in such capacity.



     “Eligible Loan” means a Student Loan which: (i) has been or will be made to a borrower for
post-secondary education; (ii) is Guaranteed; and (iii) is an “eligible loan” as defined in Section
438 of the Higher Education Act for purposes of receiving Special Allowance Payments; provided,
however, that if, after any reauthorization or amendment of the Higher Education Act, loans
authorized thereunder, including their benefits, are materially different from loans authorized
prior to such reauthorization or amendment, such loans authorized after such reauthorization or
amendment shall not constitute Eligible Loans unless a Rating Agency Confirmation is obtained.



     “Eligible Loan Acquisition Certificate” means a certificate signed by an Authorized Officer of
the Issuer and substantially in the form attached as Exhibit A hereto.



     “Event of Default” means one of the events described as such in Section 6.01 hereof.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Federal Reimbursement Contract” means any agreement between a Guarantee Agency and the
Secretary of Education providing for the payment by the Secretary of Education of amounts
authorized to be paid pursuant to the Higher Education Act, including (but not necessarily limited
to) partial reimbursement of amounts paid or payable upon defaulted Financed Student Loans and
other student loans guaranteed or insured by the Guarantee Agency and interest subsidy payments to
holders of qualifying student loans Guaranteed by the Guarantee Agency.



     “Financed,” when used with respect to Student Loans or Eligible Loans, means Student Loans or
Eligible Loans, as the case may be, acquired by the Issuer or the Eligible Lender Trustee on behalf
of the Issuer with moneys in the Acquisition Fund, any Eligible Loans received in exchange for
Financed Student Loans upon the sale thereof or substitution therefor in accordance with Section
4.02 hereof and any other Student Loans deemed to be “Financed” with



9









 







moneys in the Acquisition Fund pursuant to this Indenture, but does not include Student Loans
released from the lien of this Indenture and sold, as permitted in this Indenture, to any
purchaser, including a trustee for the holders of the Issuer’s bonds, notes or other evidences of
indebtedness issued other than pursuant to this Indenture.



     “Fiscal Year” means the fiscal year of the Issuer as established from time to time (initially
being January 1 through December 31 of each year).



     “Fund” means any of the funds created or established by this Indenture.



     “Government Obligations” means direct obligations of, or obligations the full and timely
payment of the principal of and interest on which are unconditionally guaranteed by, the United
States of America.



     “Guarantee” or “Guaranteed” means with respect to a Student Loan, the insurance or guarantee
by a Guarantee Agency, to the extent provided in the Higher Education Act, of the principal of and
accrued interest on such Student Loan, and the coverage of such Student Loan by one or more Federal
Reimbursement Contracts providing, among other things, for reimbursement to the Guarantee Agency
for losses incurred by it on defaulted Financed Student Loans insured or guaranteed by the
Guarantee Agency to the extent provided in the Higher Education Act.



     “Guarantee Agency” means any state agency or private nonprofit institution or organization
which has Federal Reimbursement Contracts in place and has entered into a Guarantee Agreement with
the Eligible Lender Trustee, and any such guarantor’s successors and assigns.



     “Guarantee Agreements” means the blanket guarantee and other guarantee agreements issued by or
from any Guarantee Agency to the Eligible Lender Trustee for the purpose of Guaranteeing Student
Loans to be Financed hereunder, and any amendment of any of the foregoing entered into in
accordance with the provisions thereof.



     “Guaranteed Loan” means a Student Loan which is Guaranteed.



     “Higher Education Act” means the Higher Education Act of 1965, as amended or supplemented from
time to time, and all regulations promulgated thereunder.



     “Holder,” when used with respect to any Note, means the Person in whose name such Note is
registered in the Note Register, except that to the extent and for the purposes provided in a
Supplemental Indenture for a series of Notes (including, without limitation, for purposes of the
definition of “Acting Beneficiaries Upon Default”), a Credit Facility Provider that has delivered a
Credit Enhancement Facility with respect to such series of Notes may instead be treated as the
Holder of the Notes of such series.



     “Indenture” means this Indenture of Trust, including any supplement hereto or amendment hereof
entered into in accordance with the provisions hereof.



10









 





     “Independent,” when used with respect to any specified Person, means such a Person who (a) is
in fact independent; (b) does not have any direct financial interest or any material indirect
financial interest in the Issuer, other than the payment to be received under a contract for
services to be performed by such Person; and (c) is not connected with the Issuer as an official,
officer, employee, promoter, underwriter, trustee, partner, affiliate, subsidiary, director or
Person performing similar functions. Whenever it is herein provided that any Independent Person’s
opinion or certificate shall be furnished to the Trustee, such Person shall be appointed by the
Issuer or the Trustee, as the case may be, and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the meaning hereof.



     “Indirect Participant” means any financial institution for whom any Direct Participant holds
an interest in any Note.



     “Individual Note” means any Note registered in the name of a holder other than the Securities
Depository or its nominee.



     “Initial Notes” means the Notes issued contemporaneously with the execution and delivery of
this Indenture pursuant to the First Supplemental Indenture of Trust dated as of January 1, 2004,
between the Issuer and the Trustee.



     “Interest Account” means the Interest Account created and established by Section 4.01 hereof.



     “Interest Payment Date” means each regularly scheduled interest payment date on the Notes
(which dates shall be specified in the Supplemental Indenture providing for the issuance thereof)
or, with respect to the payment of interest upon redemption or acceleration of a Note, purchase of
a Note by the Trustee on a Tender Date (to the extent such Tender Date is designated as an Interest
Payment Date in the related Supplemental Indenture) or the payment of Defaulted Interest, such date
on which such interest is payable under this Indenture or a Supplemental Indenture.



     “Investment Company Act” means the Investment Company Act of 1940, as amended.



     “Investment Securities” means any of the following:




     (a) direct general obligations of, or obligations fully and unconditionally guaranteed
as to the timely payment of principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the full faith and credit
of the United States, FHA debentures, Freddie Mac senior debt obligations, Federal Home Loan
Bank consolidated senior debt obligations, and Fannie Mae senior debt obligations, but
excluding any of such securities whose terms do not provide for payment of a fixed dollar
amount upon maturity or call for redemption;




     (b) federal funds, certificates of deposit, time deposits and banker’s acceptances
(having original maturities of not more than 365 days) of any bank or trust company
incorporated under the laws of the United States or any state thereof, provided that the
short-term debt obligations of such bank or trust company at the date of



11









 






acquisition thereof have been rated “A-1+” or better by S&P and “P-1” or better by
Moody’s;




     (c) deposits of any bank or savings and loan association which has combined capital,
surplus and undivided profits of at least $3,000,000 which deposits are held only up to the
limits insured by the Bank Insurance Fund or Savings Association Insurance Fund administered
by the Federal Deposit Insurance Corporation, provided that the unsecured long-term debt
obligations of such bank or savings and loan association have been rated “BBB” or better by
S&P and “Baa3” or better by Moody’s;




     (d) commercial paper (having original maturities of not more than 365 days) rated
“A-1+” or better by S&P and “P-1” or better by Moody’s;




     (e) debt obligations rated “AAA” by S&P and “Aaa” by Moody’s (other than any such
obligations that do not have a fixed par value and/or whose terms do not promise a fixed
dollar amount at maturity or call date);




     (f) investments in money market funds (including those funds managed or advised by the
Trustee or an affiliate thereof) rated “AAAm” by S&P and “Aaa” by Moody’s;




     (g) guaranteed investment contracts or surety bonds for which a Rating Agency
Confirmation has been obtained and providing for the investment of funds in an account or
insuring a minimum rate of return on investments of such funds, which contract or surety
bond shall:




          (i) be an obligation of an insurance company or other corporation whose debt
obligations or insurance financial strength or claims paying ability are rated “AAA”
by S&P and “Aaa” by Moody’s;




          (ii) provide that the Trustee may exercise all of the rights of the Issuer
under such contract or surety bond without the necessity of the taking of any action
by the Issuer;




     (h) a repurchase agreement between the Trustee and a dealer bank or securities firm
described in (A) or (B) below:




          (A) primary dealers on the Federal Reserve reporting dealer list which are
rated “A” or better by S&P and “Aa3” or better by Moody’s; or




          (B) banks rated “A” or above by S&P and “Aa3” or above by Moody’s; and




     (i) any other investment upon receipt of a Rating Agency Confirmation.



     “Issuer” means Higher Education Funding I, a Delaware statutory trust, and any successor or
assignee thereto under this Indenture.



12









 





     “Issuer Administrator” means Lord Securities Corporation (or, except as provided in the
Administrative Agreement for certain Issuer Orders specified therein, CLF Administration Company,
LLC), in its capacity as administrator under that certain Administration Agreement, or any other
Person providing similar services upon receipt of a Rating Agency Confirmation.



     “Issuer Order” or “Issuer Certificate” means, respectively, a written order or certificate
(which may be a standing order or certificate) signed in the name of the Issuer by an Authorized
Officer and delivered to the Trustee.



     “Issuer Swap Payment” means a payment due to a Swap Counterparty from the Issuer pursuant to
the applicable Swap Agreement (including, but not limited to, payments in respect of any early
termination of such Swap Agreement).



     “Junior Subordinate Beneficiaries” means (a) the Holders of any Outstanding Junior Subordinate
Notes and (b) any Other Junior Subordinate Beneficiary holding any Other Junior Subordinate
Obligation that is Outstanding.



     “Junior Subordinate Credit Enhancement Facility” means a Credit Enhancement Facility
designated as a Junior Subordinate Credit Enhancement Facility in the Supplemental Indenture
pursuant to which such Credit Enhancement Facility is furnished by the Issuer.



     “Junior Subordinate Credit Facility Provider” means any person who provides a Junior
Subordinate Credit Enhancement Facility.



     “Junior Subordinate Notes” means any Notes designated in a Supplemental Indenture as Junior
Subordinate Notes, which are secured under this Indenture on a basis subordinate to any Senior
Obligations and Subordinate Obligations (as such subordination is described herein, and on a parity
with Other Junior Subordinate Obligations).



     “Junior Subordinate Obligations” means, collectively, the Junior Subordinate Notes and any
Other Junior Subordinate Obligations.



     “Junior Subordinate Swap Agreement” means a Swap Agreement designated as a Junior Subordinate
Swap Agreement in the Supplemental Indenture pursuant to which such Swap Agreement is furnished by
the Issuer.



     “Junior Subordinate Swap Counterparty” means any Person who provides a Junior Subordinate Swap
Agreement.



     “Lender” means any party from which the Issuer or the Depositor (or the Eligible Lender
Trustee on behalf of the Issuer or the Depositor) acquires Financed Student Loans, which, in the
case of Student Loans, must be an “eligible lender” (as defined in the Higher Education Act).



     “Letter of Representations” means any Letter of Representations relating to Book-Entry Notes
among the Issuer, the Trustee and the Securities Depository.



13









 





     “Market Agent” means, with respect to any series of Notes, the Person identified as such in
the related Supplemental Indenture, and its successor or successors, and any Person at any time
substituted in its place pursuant to such Supplemental Indenture.



     “Market Agent Agreement” means, with respect to any series of Notes, an agreement between a
Market Agent and the Trustee designated as such in the Supplemental Indenture pursuant to which the
issuance of such series of Notes is authorized.



     “Maturity,” when used with respect to any Note, means the date on which the entire outstanding
Principal Amount of such Note becomes due and payable as therein or herein provided, whether at the
Stated Maturity thereof or by declaration of acceleration, redemption, distribution of principal or
otherwise.



     “Monthly Calculation Date” means the twenty-fifth day of each calendar month (or, in the event
such twenty-fifth day is not a Business Day, the next succeeding Business Day).



     “Monthly Servicing Report” means a report prepared by or on behalf of the Issuer setting forth
certain information with respect to the Financed Student Loans as of the end of each month.



     “Moody’s” means Moody’s Investors Service, Inc., its successors and assigns, and, if such
corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Trustee, at the written direction of the Issuer.



     “Note Fees” means the fees, costs and expenses (excluding Costs of Issuance), of the Trustee,
the Delaware Trustee and any Eligible Lender Trustee, Paying Agent, Authenticating Agent,
Remarketing Agent, Tender Agent, Auction Agent, Market Agent, Broker-Dealer, Counsel, Note
Registrar, Accountant and other consultants and professionals incurred by the Issuer in carrying
out and administering its powers, duties and functions under (a) the Eligible Lender Trust
Agreement, the Trust Agreement, the Guarantee Agreements, the Higher Education Act or any
requirement of the laws of the United States or any State, as such powers, duties and functions
relate to Financed Student Loans; (b) any Swap Agreement or Credit Enhancement Facility (other than
any amounts payable thereunder which constitute Other Obligations); (c) any Remarketing Agreement,
Tender Agent Agreement, Auction Agent Agreement, Market Agent Agreement or Broker-Dealer Agreement;
and (d) this Indenture.



     “Note Register” means the register maintained by the Note Registrar pursuant to Section 2.07
hereof.



     “Note Registrar” means the Trustee, or, if so designated pursuant to the terms of a
Supplemental Indenture, an Authenticating Agent, serving in such capacity under the terms of this
Indenture, unless and until an Issuer Order is delivered to the Authenticating Agent and the
Trustee directing that the Authenticating Agent or the Trustee, as the case may be, become the Note
Registrar and the Authenticating Agent or the Trustee, as the case may be, agrees to serve in such
capacity hereunder.



     “Notes” means all notes, bonds or other obligations issued pursuant to this Indenture in
accordance with the provisions of Article II hereof.



14









 





     “Other Beneficiary” means an Other Senior Beneficiary, an Other Subordinate Beneficiary or an
Other Junior Subordinate Beneficiary.



     “Other Junior Subordinate Beneficiary” means a person who is a Junior Subordinate Beneficiary
other than as a result of ownership of Junior Subordinate Notes.



     “Other Junior Subordinate Obligations” means the Issuer’s obligations to pay any amounts under
any Junior Subordinate Swap Agreements and any Junior Subordinate Credit Enhancement Facilities.



     “Other Obligations” means, collectively, Other Senior Obligations, Other Subordinate
Obligations and Other Junior Subordinate Obligations.



     “Other Senior Beneficiary” means a Person who is a Senior Beneficiary other than as a result
of ownership of Senior Notes.



     “Other Senior Obligations” means the Issuer’s obligations to pay any amounts under any Senior
Swap Agreements and any Senior Credit Enhancement Facilities.



     “Other Subordinate Beneficiary” means a Person who is a Subordinate Beneficiary other than as
a result of ownership of Subordinate Notes.



     “Other Subordinate Obligations” means the Issuer’s obligations to pay any amounts under any
Subordinate Swap Agreements and any Subordinate Credit Enhancement Facilities.



     “Outstanding,” (a) when used with respect to any Note, shall have the construction given to
such word in Sections 1.06, 2.07 and 9.01 hereof, i.e., a Note shall not be Outstanding hereunder
if such Note is at the time not deemed to be Outstanding hereunder by reason of the operation and
effect of Section 1.06, 2.07 or 9.01 hereof; and (b) when used with respect to any Other
Obligation, means all Other Obligations which have become, or may in the future become, due and
payable and which have not been paid or otherwise satisfied.



     “Participant” means a Person that has an account with DTC.



     “Paying Agent” means the Trustee and any other commercial bank designated herein or in
accordance herewith as the party from whom principal of, premium, if any, or interest on any Note
is payable to the Holders of the Notes.



     “Person” means any individual, corporation, limited liability company, partnership, joint
venture, association, joint stock company, trust, incorporated organization or government or any
agency or political subdivision thereof.



     “Premium” means for each Eligible Loan acquired by the Issuer or the Eligible Lender Trustee
on behalf of the Issuer from a Lender, the meaning set forth in a Supplemental Indenture.



     “Prepayment Date,” when used with respect to any Note, all or any portion of the Principal
Amount of which is to be prepaid prior to its Stated Maturity, means the date fixed for such
prepayment by or pursuant to this Indenture.



15









 





     “Prepayment Price,” when used with respect to any Note to be prepaid, means the price at which
it is to be redeemed pursuant to this Indenture and the Supplemental Indenture pursuant to which it
has been issued.



     “Principal Account” means the Principal Account created and established by Section 4.01
hereof.



     “Principal Amount,” when used with respect to (a) a Note, means the original principal amount
of such Note less all payments previously made to the Holder thereof in respect of principal; and
(b) a Swap Agreement, shall have the meaning set forth in the Supplemental Indenture relating to
the Series of Notes for which the Issuer entered into such Swap Agreement.



     “Principal Balance,” when used with respect to a Student Loan, means the unpaid principal
amount thereof (including, in the case of Student Loans, any unpaid capitalized interest thereon
that is authorized to be capitalized under the Higher Education Act as of a given date.



     “Principal Office” means (a) when used with respect to the Trustee, the office located at the
address specified in Section 10.04 hereof, or such other office as may, from time to time, be
designated as such by the Trustee in writing to the Issuer; (b) when used with respect to the
Issuer, its executive office located at the address specified in Section 10.04 hereof, or such
other office as may, from time to time, be designated as such by Issuer Order; and (c) when used
with respect to a Paying Agent (other than the Trustee), an Authenticating Agent, the Note
Registrar, a Tender Agent, a Remarketing Agent, an Auction Agent, a Market Agent or a
Broker-Dealer, its office located at the address specified in Section 10.04 hereof or such office
as may, from time to time, be designated as such in writing to the Trustee and the Issuer as the
location of its principal office for the performance of its duties as Paying Agent, Authenticating
Agent, Note Registrar, Tender Agent, Remarketing Agent, Auction Agent, Market Agent or
Broker-Dealer, as the case may be.



     “Principal Payment Date” means the Stated Maturity of principal of any Serial Note and the
Sinking Fund Payment Date for any Term Note.



     “Rating Agency” means (a) with respect to the Notes, any rating agency that shall have an
outstanding rating on any of the Notes pursuant to request by the Issuer; and (b) with respect to
Investment Securities, any rating agency that shall have an outstanding rating on the applicable
Investment Security.



     “Rating Agency Confirmation” means, with respect to any action, that each of the Rating
Agencies shall have notified the Issuer and the Trustee in writing that such action will not result
in a reduction, qualification or withdrawal of the then-current rating of any of the Notes.



     “Rating Category” means one of the general rating categories of a Rating Agency, without
regard to any refinement or gradation of such rating category by a numerical modifier or otherwise.



     “Regular Record Date” means, with respect to an Interest Payment Date for any series of Notes,
unless the Supplemental Indenture authorizing the issuance of such series of Notes



16









 







otherwise provides, the fifteenth day (whether or not a Business Day) of the calendar month
immediately preceding such Interest Payment Date.



     “Remaining Acquisition Amount” with respect to any series of Notes means the excess, if any,
of (a) the amount deposited into the Acquisition Fund on the date of issuance of such series of
Notes; over (b) the sum of all amounts withdrawn from, or added to, the Acquisition Fund during the
related Acquisition Period.



     “Remarketing Agent” means, with respect to any series of Notes, any securities dealer
designated as such with respect to such Notes pursuant to the provisions of Section 7.19 hereof and
its successor or successors and any securities dealer at any time substituted in its place pursuant
to this Indenture.



     “Remarketing Agreement” means an agreement between a Remarketing Agent and the Issuer setting
forth the rights and obligations of the Remarketing Agent acting in such capacity under this
Indenture and otherwise meeting the requirements of Section 7.20 hereof, including any supplement
thereto or amendment thereof entered into in accordance with the provisions thereof.



     “Reserve Fund” means the Reserve Fund created and established by Section 4.01 hereof.



     “Reserve Fund Requirement” with respect to any series of Notes shall have the meaning set
forth in the Supplemental Indenture authorizing the issuance of such series of Notes. In
calculating the Reserve Fund Requirement, all Notes to be defeased by a series of refunding Notes
shall be deemed not Outstanding as of the date of calculation.



     “Retirement Account” means the Retirement Account created and established by Section 4.01
hereof.



     “Revolving Period” with respect to any series of Notes shall have the meaning set forth in the
related Supplemental Indenture.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
its successors and their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer
to any other nationally recognized securities rating agency designated by the Trustee, at the
written direction of the Issuer.



     “Secretary of Education” means the Secretary of the United States Department of Education (who
succeeded to the functions of the Commissioner of Education pursuant to the Department of Education
Organization Act), or any other officer, board, body, commission or agency succeeding to the
functions thereof under the Higher Education Act.



     “Securities Act” means the Securities Act of 1933, as amended.



     “Securities Depository” means The Depository Trust Company, New York, New York, and its
successors and assigns, or, if (a) the then-existing Securities Depository resigns from its
functions as depository of the Notes or (b) the Issuer discontinues use of the Securities



17









 







Depository pursuant to Section 2.07 hereof, then 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 Legend” means the following legend: “THIS NOTE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR
QUALIFIED UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (a) (i)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING
FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A; OR (b) TO AN “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES
ACT) PURCHASING FOR INVESTMENT AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT
TO THE RECEIPT BY THE TRUSTEE OF SUCH EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS; (ii)
PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS; OR (iii) PURSUANT TO A VALID REGISTRATION STATEMENT.”



     “Senior Asset Percentage” means, as of the date of determination, the percentage resulting by
dividing (a) the Aggregate Value less the sum of (i) all accrued interest on Outstanding Senior
Notes, (ii) all accrued Issuer Swap Payments with respect to Senior Swap Agreements, (iii) all
accrued fees with respect to Senior Credit Enhancement Facilities and (iv) all accrued fees and
expenses to be paid out of the Administration Fund by (b) the aggregate Principal Amount of
Outstanding Senior Notes.



     “Senior Asset Requirement” means, at any time, any requirement set forth as such in a
Supplemental Indenture providing for the issuance of one or more series of Notes any of which are
then Outstanding.



     “Senior Beneficiaries” means (a) the Holders of any Outstanding Senior Notes and (b) any Other
Senior Beneficiary holding any Other Senior Obligation that is Outstanding.



     “Senior Credit Enhancement Facility” means a Credit Enhancement Facility designated as a
Senior Credit Enhancement Facility in the Supplemental Indenture pursuant to which such Credit
Enhancement Facility is furnished by the Issuer.



     “Senior Credit Facility Provider” means any Person who provides a Senior Credit Enhancement
Facility.



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     “Senior Notes” means any Notes designated in a Supplemental Indenture as Senior Notes, which
are secured under this Indenture on a basis senior to any Subordinate Obligations and any Junior
Subordinate Obligations (as such seniority is described herein), and on a parity with Other Senior
Obligations.



     “Senior Obligations” means, collectively, the Senior Notes and any Other Senior Obligations.



     “Senior Swap Agreement” means a Swap Agreement designated as a Senior Swap Agreement in the
Supplemental Indenture pursuant to which such Swap Agreement is furnished by the Issuer.



     “Senior Swap Counterparty” means any Person who provides a Senior Swap Agreement.



     “Serial Notes” means all Notes other than Term Notes.



     “Servicer” means Great Lakes Educational Loan Services, Inc., ACS Education Services, Inc.
and, subject to obtaining a Rating Agency Confirmation, any other organization with which the
Issuer has (or the Issuer and the Eligible Lender Trustee have) entered into a Servicing Agreement;
in any case, so long as such party acts as servicer of Financed Student Loans.



     “Servicing Agreement” means the Student Loan Servicing Agreement, dated as of January 1, 2004,
between the Issuer and Great Lakes Educational Loan Services, Inc., the Servicing Agreement, dated
as of January 1, 2004, between the Issuer and ACS Education Services, Inc. and any other agreement
between the Issuer and any Servicer (or among the Issuer, the Eligible Lender Trustee and any
Servicer), under which such Servicer agrees to act as the Issuer’s agent in connection with the
administration and collection of Financed Student Loans in accordance with this Indenture.



     “Servicing Fees” means any fees payable by the Issuer to (a) a Servicer in respect of Financed
Student Loans pursuant to the provisions of a Servicing Agreement and (b) a collection agent in
respect of Financed Student Loans in default.



     “Sinking Fund Payment Date” means the date on which any Term Note is to be mandatorily
redeemed pursuant to the applicable provisions of the Supplemental Indenture providing for the
issuance thereof and from funds allocated as provided in Section 4.06(b) hereof, or, if not
redeemed, the Stated Maturity thereof.



     “SLCC” means Student Loan Consolidation Center, LLC, a California limited liability company,
and any successor thereto or assignee thereof.



     “Special Allowance Payments” means special allowance payments authorized to be made by the
Secretary of Education by Section 438 of the Higher Education Act, or similar allowances authorized
from time to time by federal law or regulation.



     “Special Record Date” means, with respect to the payment of any Defaulted Interest, a date
fixed by the Trustee pursuant to Section 2.02 hereof.



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     “Stated Maturity,” when used with respect to any Note or any installment of interest thereon,
means the date specified in such Note as the fixed date on which principal of such Note or such
installment of interest is due and payable.



     “Student Loan” means a loan under the Higher Education Act to an Eligible Borrower for
education at an Eligible Institution (or a loan to consolidate the same).



     “Student Loan Purchase Agreement” means (a) the Loan Purchase Agreement, dated as of January
1, 2004, between the Issuer and the Depositor in the form of Exhibit B hereto, as such form may be
amended and supplemented with a Rating Agency Confirmation, (b) the Loan Purchase Agreement, dated
as of January 1, 2004, between the Issuer and Consolidation Loan Funding, LLC in the form of
Exhibit B hereto, as such form may be amended and supplemented with a Rating Agency Confirmation,
and (c) any other student loan purchase agreement in the form of Exhibit B hereto, as such form may
be amended and supplemented with a Rating Agency Confirmation, with a seller of Eligible Loans
which has been approved by the Rating Agencies.



     “Student Loan Repurchase Agreement” means the Student Loan Repurchase Agreement, dated as of
January 1, 2004, between the Issuer and SLCC, as amended and supplemented pursuant to the terms
thereof.



     “Subordinate Asset Percentage” means, as of the date of determination, the percentage
resulting by dividing (a) the Aggregate Value less the sum of (i) all accrued interest on
Outstanding Senior Notes and Outstanding Subordinate Notes, (ii) all accrued Issuer Swap Payments
(other than with respect to Junior Subordinate Swap Agreements), (iii) all accrued fees with
respect to Credit Enhancement Facilities (other than Junior Subordinate Credit Enhancement
Facilities) and (vi) all accrued fees and expenses to be paid out of the Administration Fund by (b)
the aggregate Principal Amount of Outstanding Senior Notes and Outstanding Subordinate Notes.



     “Subordinate Asset Requirement” means, at any time, any requirement set forth as such in a
Supplemental Indenture providing for the issuance of one or more series of Notes any of which are
then Outstanding.



     “Subordinate Beneficiaries” means (a) the Holders of any Outstanding Subordinate Notes and (b)
any Other Subordinate Beneficiary holding any Other Subordinate Obligation that is Outstanding.



     “Subordinate Credit Enhancement Facility” means a Credit Enhancement Facility designated as a
Subordinate Credit Enhancement Facility in the Supplemental Indenture pursuant to which such Credit
Enhancement Facility is furnished by the Issuer.



     “Subordinate Credit Facility Provider” means any Person who provides a Subordinate Credit
Enhancement Facility.



     “Subordinate Notes” means any Notes designated in a Supplemental Indenture as Subordinate
Notes, which are secured under this Indenture on a basis subordinate to any Senior Obligations (as
such subordination is described herein), on a basis senior to any Junior



20









 







Subordinate Obligations (as such subordination is herein described), and on a parity with
Other Subordinate Obligations.



     “Subordinate Obligations” means, collectively, the Subordinate Notes and any Other Subordinate
Obligations.



     “Subordinate Swap Agreement” means a Swap Agreement designated as a Subordinate Swap Agreement
in the Supplemental Indenture pursuant to which such Swap Agreement is furnished by the Issuer.



     “Subordinate Swap Counterparty” means any Person who provides a Subordinate Swap Agreement.



     “Subservicing Agreement” means any agreement between a Servicer and any subservicer relating
to subservicing and/or administration of Financed Student Loans, which Subservicing Agreement shall
be approved by a Rating Agency Confirmation.



     “Supplemental Indenture” means any amendment of or supplement to this Indenture made in
accordance with Article VIII hereof.



     “Surplus Fund” means the Surplus Fund created and established by Section 4.01 hereof.



     “Swap Agreement” means an interest rate or other hedge agreement between the Issuer and a Swap
Counterparty, as supplemented or amended from time to time.



     “Swap Counterparty” means any Person with whom the Issuer shall, from time to time, enter into
a Swap Agreement.



     “Swap Counterparty Guaranty” means a guarantee in favor of the Issuer given in connection with
the execution and delivery of a Swap Agreement under this Indenture.



     “Taxes” shall mean an amount reasonably estimated by the Issuer Administrator which shall be
equal to the hypothetical taxes which would be incurred by the Issuer as a direct consequence of
this Indenture, the Notes or the Financed Student Loans if the Issuer were a taxpaying entity with
a tax rate of 35% (which percentage can be changed with a Rating Agency Confirmation), and shall
not be based upon the actual taxes owed by any owners of the Issuer or the Depositor.



     “Tender Agent” means, with respect to any series of Notes, any commercial bank or banking
association having trust powers or trust company designated as such with respect to such Notes
pursuant to the provisions of Section 7.18 hereof and its successor or successors and any other
commercial bank or banking association having trust powers or trust company at any time substituted
in its place pursuant to this Indenture.



     “Tender Agent Agreement” means an agreement among a Tender Agent, the Trustee, the Issuer, any
Remarketing Agent and/or any related Credit Facility Provider setting forth the rights and
obligations of the Tender Agent acting in such capacity under this Indenture and otherwise



21









 







meeting the requirements of Section 7.18 hereof, including any supplement thereto or amendment
thereof entered into in accordance with the provisions thereof.



     “Tender Date” means, with respect to any Note, a date on which such Note is required to be
tendered for purchase by or on behalf of the Issuer, or has been tendered for purchase by or on
behalf of the Issuer pursuant to a right given the Holder or Beneficial Owner of such Note, in
accordance with the provisions in the Supplemental Indenture providing for the issuance thereof.



     “Term Notes” means Notes the payment of the principal of which is provided for from moneys
credited to the Principal Account pursuant to Section 4.06(b) hereof.



     “Trust Agreement” means the Trust Agreement, dated as of January 1, 2004, between the Delaware
Trustee and the Depositor, as the same may be amended from time to time.



     “Trust Estate” means the Trust Estate as described in the Granting Clauses hereof.



     “Trust Funds” means, in the aggregate, all of the Funds and Accounts.



     “Trustee” means The Bank of New York, a banking corporation duly established, existing and
authorized to accept and execute trusts of the character herein set out under and by virtue of the
laws of the State of New York, as trustee under this Indenture, and its successor or successors and
any other corporation which may at any time be substituted in its place pursuant to this Indenture.



     “Unamortized Premium” means for each Eligible Loan, the portion of the related Premium that
has not been amortized based upon an assumed average life for such Eligible Loan of seven years and
straight line method of amortization (or such other method approved by a Rating Agency
Confirmation).



     “Value” means, on any calculation date when required under this Indenture, the value of the
Trust Estate calculated by the Issuer Administrator with respect to clauses (a) and (f) below and
the Trustee with respect to clauses (b) through (e) below, in accordance with the following:




     (a) with respect to any Financed Eligible Loan, the Principal Balance thereof, plus
accrued interest and Special Allowance Payments thereon (or with respect to a Financed
Student Loan which is no longer an Eligible Loan, zero);




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




     (c) with respect to any investment securities of an investment company, the bid price,
or the net asset value if there is no bid price, of the shares as reported by the investment
company;




     (d) as to other investments, (i) the bid price published by a nationally recognized
pricing service; or (ii) if the bid and asked prices thereof are published on a regular
basis by Bloomberg Financial Markets Commodities News (or, if not there, then



22









 






in The Wall Street Journal), the average of the bid and asked prices for such
investments so published on or most recently prior to such time of determination plus
accrued interest thereon;




     (e) as to investments the bid prices of which are not published by a nationally
recognized pricing service and the bid and asked prices of which are not published on a
regular basis by Bloomberg Financial Markets Commodities News (or, if not there, then in
The Wall Street Journal) the lower of the bid prices at such time of determination for such
investments by any two nationally recognized government securities dealers (selected by the
Issuer in its absolute discretion) at the time making a market in such investments, plus
accrued interest thereon; and




     (f) any accrued but unpaid Counterparty Swap Payment, unless the Swap Counterparty is
in default of its obligations under the Swap Agreement.



     “Variable Rate Notes” means Notes whose interest rate is not fixed but varies on a periodic
basis as specified in the Supplemental Indenture providing for the issuance thereof.



     Section 1.02. Definitions of General Terms. Unless the context shall clearly indicate
otherwise, or may otherwise require, in this Indenture the terms “herein,” “hereunder,” “hereby,”
“hereto,” “hereof” and any similar terms refer to this Indenture as a whole and not to any
particular article, section or subdivision hereof.



     Unless the context shall clearly indicate otherwise, or may otherwise require, in this
Indenture: (a) references to articles, sections and other subdivisions, whether by number or
letter or otherwise, are to the respective or corresponding articles, sections or subdivisions of
this Indenture as such articles, sections or subdivisions may be amended from time to time; (b)
references to articles, chapters, subchapters and sections of the Statutes, or to any public law or
other statute of the United States or any section thereof, are to the respective or corresponding
chapters, subchapters, sections and statutes as they may be amended from time to time; (c) the word
“heretofore” means before the date of execution of this Indenture, the word “now” means at the date
of execution of this Indenture, and the word “hereafter” means after the date of execution of this
Indenture; and (d) the word “or” is not exclusive.



     Section 1.03. Computations. Unless the facts shall then be otherwise, all computations
required for the purposes of this Indenture shall be made on the assumption that: (a) the
principal of and interest on all Notes shall be paid as and when the same become due; (b) all
credits required by this Indenture to be made to any Fund or Account shall be made in the amounts
and at the times required; (c) all Notes required by this Indenture to be paid from moneys credited
to the Note Principal Account shall be paid on the respective Sinking Fund Payment Dates therefor
in the amounts and at the times as required by this Indenture; and (d) all Issuer Swap Payments and
Counterparty Swap Payments (unless the Swap Counterparty is then in default of its obligations
under the Swap Agreement) shall be paid when the same become due.



     Section 1.04. Compliance Certificates and Opinions, Etc. Except as otherwise specifically
provided in this Indenture, upon any application or request by the Issuer to the



23









 







Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to
the Trustee an Issuer Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with.



     Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:



     (a) a statement that each signatory of such certificate or opinion has read or has caused to
be read such covenant or condition and the definitions herein relating thereto;



     (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;



     (c) a statement that, in the opinion of each such signatory, such signatory has made such
examination or investigation as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been complied with; and



     (d) a statement as to whether, in the opinion of each such signatory, such condition or
covenant has been complied with.



     In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.



     Any certificate of an Authorized Officer of the Issuer may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such certificate of an Authorized Officer
is based are erroneous. Any such certificate of an Authorized Officer or opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Servicer or the Issuer, stating that the
information with respect to such factual matters is in the possession of the Servicer or the
Issuer, unless such Authorized Officer or Counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to such matters are
erroneous.



     Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.



     Whenever in this Indenture, in connection with any application or certificate or report to the
Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting
of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the Issuer to have such



24









 







application granted or to the sufficiency of such certificate or report. The foregoing shall
not, however, be construed to affect the Trustee’s right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article VII hereof.



     Section 1.05. Evidence of Action by the Issuer. Except as otherwise specifically provided in
this Indenture, any request, direction, command, order, notice, certificate or other instrument of,
by or from the Issuer shall be effective and binding upon the Issuer for the purposes of this
Indenture if signed by an Authorized Officer.



     Section 1.06. Exclusion of Notes Held By or For the Issuer. In determining whether the
Holders of the requisite Principal Amount of Notes Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by the Issuer shall be

disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall
be protected in relying upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes which the Trustee knows to be so owned shall be disregarded.



     Section 1.07. Exhibits. Exhibit A (Form of Eligible Loan Acquisition Certificate) and Exhibit
B (Form of Student Loan Purchase Agreement) are attached to and by reference made a part of this
Indenture.



ARTICLE II




THE NOTES AND OTHER OBLIGATIONS




     Section 2.01. General Title. There is hereby created and established an issue of Notes of the
Issuer to be known and designated as “Student Loan Asset-Backed Notes,” which Notes may be issued
in series as hereinafter provided. With respect to the Notes of any particular series, the Issuer
may incorporate in or add to the general title of such Notes any words, letters or figures designed
to distinguish that series.



     Section 2.02. General Limitations; Issuable in Series; Purposes and Conditions for Issuance;
Payment of Principal and Interest. The aggregate Principal Amount of Notes that may be
authenticated and delivered and Outstanding under this Indenture is not limited, except as may be
limited by law. The Notes may be issued in series as from time to time authorized by Issuer Order.



     Notes shall be issued only for the purposes of (a) providing funds for the acquisition by the
Issuer of Eligible Loans (including, for this purpose, the acquisition under this Indenture of
Eligible Loans previously purchased by the Issuer or any affiliate of the Issuer from other
available moneys of the Issuer or such affiliate) or for the payment of guarantee or origination
fees with respect to Student Loans; (b) refunding at or before their Stated Maturity any or all
Outstanding Notes issued for that purpose; (c) paying Servicing Fees, Administration Fees, Note
Fees, Costs of Issuance and capitalized interest on the Notes being issued; (d) making deposits to
the Reserve Fund; and (e) such other purposes relating to the Issuer’s loan programs as may be
provided in a Supplemental Indenture.



25









 





     The Notes, including the principal thereof, premium, if any, and interest thereon and any
Carry-Over Amounts (and accrued interest thereon) with respect thereto, and Other Obligations are
limited obligations of the Issuer, payable solely from the revenues and assets of the Issuer
pledged therefor under this Indenture.



     In the event a default occurs in the due and punctual payment of any interest on any Note,
interest shall be payable thereon to the extent permitted by law on the overdue installment of
interest, at the interest rate borne by the Note in respect of which such interest is overdue.



     The principal of and premium, if any, on the Notes, together with interest payable on the
Notes at the Maturity thereof if the date of such Maturity is other than a regularly scheduled
Interest Payment Date, shall, except as hereinafter provided or as otherwise provided in a
Supplemental Indenture, be payable upon presentation and surrender of such Notes at the Principal
Office of the Trustee or, at the option of the Holder, at the Principal Office of a duly appointed
Paying Agent. Interest due on the Notes on each regularly scheduled Interest Payment Date shall,
except as hereinafter provided or as otherwise provided in a Supplemental Indenture, be payable by
check or draft drawn upon the Trustee mailed to the Person who is the Holder thereof as of 5:00
p.m. on the Regular Record Date relating thereto, at the address of such Holder as it appears on
the Note Register. Any interest not so timely paid or duly provided for (herein referred to as
“Defaulted Interest”) shall cease to be payable to the Person who is the Holder thereof at the
close of business on the Regular Record Date and shall be payable to the Person who is the Holder
thereof at the close of business on a Special Record Date for the payment of any such defaulted
interest. Such Special Record Date shall be fixed by the Trustee whenever moneys become available
for payment of the Defaulted Interest, and notice of the Special Record Date shall be given to the
Holders of the Notes not less than 10 days prior thereto by first-class mail to each such Holder as
shown on the Note Register on a date selected by the Trustee, stating the date of the Special
Record Date and the date fixed for the payment of such Defaulted Interest. All payments of
principal of, premium, if any, and interest on the Notes shall be made in lawful money of the
United States of America.



     After the issuance of the Initial Notes, and from time to time, one or more additional series
of Notes may be issued upon compliance with the provisions of Article II hereof (except where
specifically indicated otherwise in this Section) in such Principal Amounts as may be determined by
the Issuer for any of the purposes hereinbefore specified in this Section upon compliance with the
following conditions and any additional conditions specified in a Supplemental Indenture:



     (a) An Authorized Officer of the Issuer shall have certified (as evidenced by an Issuer
Certificate filed with the Trustee) that the Issuer is not in default in the performance of any of
its covenants and agreements in this Indenture made (unless, in the opinion of Counsel, any such
default does not deprive any Beneficiary in any material respect of the security afforded by this
Indenture).



     (b) A Rating Agency Confirmation shall have been obtained with respect to the issuance of such
additional series of Notes.



26









 





     (c) An opinion of Counsel to the Issuer to the effect that: (i) this Indenture and such
Supplemental Indenture have been duly authorized, executed and delivered by the Issuer and,
assuming due authorization, execution and delivery by the other parties thereto, is valid and
binding upon the Issuer (subject to the operation of bankruptcy, insolvency, preferential transfer,
fraudulent transfer, fraudulent conveyance or other laws relating to or affecting creditors rights
generally, now existing or hereafter enacted, and by the application of general principles of
equity including those relating to equitable subordination and judicial discretion); (ii) pursuant
to this Indenture the Issuer has assigned and pledged, and all necessary action on the part of the
Issuer has been taken as required to assign and pledge under this Indenture, all of the Trust
Estate to the Trustee, subject to customary exceptions; (iii) upon the execution, authentication
and delivery thereof, such Notes will have been duly and validly authorized and issued in
accordance with the provisions of this Indenture; (iv) such Notes are valid and binding obligations
of the Issuer; (v) the Notes will be classified as debt for federal income tax purposes; and (vi)
the Trustee will have a perfected security interest in all Financed Student Loans.



     (d) A written order as to the delivery of such Notes, signed by an Authorized Officer.



     Section 2.03. Terms of Particular Series. Each series of Notes shall be created by and issued
pursuant to a Supplemental Indenture and such Supplemental Indenture shall designate Notes of each
series as Senior Notes, Subordinate Notes or Junior Subordinate Notes. The Notes of each series
shall bear such date or dates, shall be payable at such place or places, shall have such Stated
Maturities and Sinking Fund Payment Dates, shall bear interest at such rate or rates, from such
date or dates, payable in such installments and on Interest Payment Dates and at such place or
places, may be subject to redemption at such Prepayment Price or Prices and upon such terms, may be
entitled to distributions of principal upon such terms, may have such provisions for accrual of
Carry-Over Amounts (and interest thereon), payable in such installments and on Interest Payment
Dates and at such place or places, upon such terms as shall be provided for in the Supplemental
Indenture creating that series. The Supplemental Indenture creating any series of Notes may
contain a provision limiting the aggregate Principal Amount of the Notes of that series or the
aggregate Principal Amount of Notes which may thereafter be issued.



     All Notes of the same series shall be substantially identical in tenor and effect, except as
to denomination, the differences specified herein or in a Supplemental Indenture between interest
rates, Stated Maturities and redemption and principal distribution provisions.



     Section 2.04. Form and Denominations. The Notes of each series and the Trustee’s or
Authenticating Agent’s certificate of authentication shall be in substantially the forms set forth
in the Supplemental Indenture providing for the issuance thereof, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by this Indenture or
such Supplemental Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their signing of the Notes. Any portion of the text
of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Note. The Notes of each series shall be distinguished from the Notes of other series
and Term Notes shall be distinguished from Serial Notes in such manner as the Issuer may determine.



27









 





     The Notes of any series may be issuable only as fully registered Notes.



     The Notes of each series shall be issuable in such denominations as shall be provided in the
provisions of the Supplemental Indenture creating such series.



     Section 2.05. Execution, Authentication and Delivery. The Notes shall be executed on behalf
of the Issuer by the Delaware Trustee, which signature may be facsimiles.



     Notes bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.



     At any time and from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Notes executed by the Issuer to the Trustee or an Authenticating Agent for
authentication; and, upon Issuer Order, the Trustee or the Authenticating Agent, as the case may
be, shall authenticate and deliver such Notes as in this Indenture provided and not otherwise.



     No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose, unless there appears on such Note a certificate of authentication substantially in the
form provided for in the Supplemental Indenture authorizing the issuance thereof executed by the
Trustee or the Authenticating Agent by manual signature of one of its authorized officers, and such
certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.



     Section 2.06. Temporary Notes. Pending the preparation of definitive Notes, the Issuer may
execute and, upon Issuer Order, the Trustee shall authenticate and deliver, temporary Notes which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Notes in lieu of which they are issued, in fully
registered form, without coupons, and with such appropriate insertions, omissions, substitutions
and other variations as the officers of the Issuer executing such Notes may determine, as evidenced
by their signing of such Notes.



     If temporary Notes are issued, the Issuer will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the Principal Office of
the Trustee, without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Issuer shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like Principal Amount of definitive Notes of the same series and Stated
Maturity of authorized denominations. Until so exchanged the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as definitive Notes.



     Section 2.07. Registration, Transfer and Exchange. The Issuer shall cause to be kept at the
Principal Office of the Note Registrar a Note Register in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration of Notes and of
transfers of Notes as herein provided. The Issuer may, in a Supplemental Indenture, appoint an
Authenticating Agent for the purpose of receiving, authenticating and delivering Notes in
connection with transfers, exchanges and registrations as herein provided. Unless an



28









 







Authenticating Agent is designated to serve in such capacity pursuant to a Supplemental
Indenture or is otherwise directed, and agrees, to so serve in accordance with an Issuer Order, the
Trustee shall be Note Registrar for the purpose of registering Notes and transfer of Notes as
herein provided. At reasonable times and under reasonable regulations established by the Note
Registrar, the Note Register may be inspected and copied by the Issuer or by the Holders (or a
designated representative thereof) of 10% or more in Principal Amount of Notes then Outstanding.



     The Trustee and any Authenticating Agent shall adhere, with respect to transfer of Notes, to
the standards for efficiency in transfer agent performance established in Securities and Exchange
Commission Rules 17Ad-2 through 17Ad-7 under the Exchange Act, most particularly Rule 17Ad-2, which
requires that registered transfer agents process at least 90% of routine items (such as
certificates presented for transfer) received during any month within three business days of their
receipt.



     Upon surrender for transfer or exchange of any Note at the Principal Office of the Note
Registrar or at the Principal Office of any Authenticating Agent, or on a Tender Date with respect
to Notes which are required to be tendered for purchase, whether or not surrendered on such date,
the Issuer shall execute, and the Trustee or the Authenticating Agent, as the case may be, shall
authenticate and deliver, in the name of the designated transferee or transferees, including
transferees designated by a Tender Agent with respect to Notes required to be tendered for
purchase, or in exchange for the Note surrendered, one or more new fully registered Notes of any
authorized denomination or denominations, of like aggregate Principal Amount, of the same series,
having the same Stated Maturity and interest rate and bearing numbers not previously assigned.



     All Notes executed, delivered and authenticated pursuant to the preceding paragraph shall be
registered in the name of the Holder presenting the Note for exchange or the designated transferee,
as the case may be, on the Note Register on the date of such transfer or exchange.



     All Notes surrendered upon any exchange or transfer provided for in this Indenture shall be
promptly canceled by the Trustee upon receipt thereof from the Note Registrar or the Authenticating
Agent, as the case may be, and thereafter disposed of as directed by Issuer Order.



     All Notes issued upon any transfer or exchange of Notes, including Notes issued in lieu of
Notes required to be tendered for purchase on a Tender Date, whether or not surrendered, shall be
the valid obligations of the Issuer evidencing the same debt, and entitled to the same security and
benefits under this Indenture, as the Notes surrendered upon such transfer or exchange or in lieu
of which such Notes were issued.



     Every Note presented or surrendered for transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Note Registrar or the
Authenticating Agent, as the case may be, duly executed, by the Holder thereof or his, her or its
attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor
institution” meeting the requirements of the Note Registrar or the Authenticating Agent, as the
case may be, which requirements include membership or participation in a “signature guarantee



29









 







program” determined by the Note Registrar or the Authenticating Agent, as the case may be, in
accordance with the Exchange Act, and such other documents as the Trustee may require.



     The Issuer may require payment by the Holder thereof of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or exchange of Notes,
other than exchanges upon a partial redemption of, or distribution of principal with respect to, a
Note not involving any transfer. All other expenses incurred by the Issuer, the Trustee, the Note
Registrar or the Authenticating Agent in connection with any transfer or exchange of Notes shall be
paid by the Issuer.



     Except in connection with a Tender Date, the Issuer shall not be required to transfer any Note
(a) during a period beginning at the opening of business 15 days before any selection of Notes of
the same series for redemption and ending at the close of business on the day of such selection,
(b) selected for redemption in whole or in part, (c) after receipt by the Tender Agent of a
properly completed demand for purchase of such Note in accordance with the Supplemental Indenture
pursuant to which it was issued and through the corresponding Tender Date, or (d) on or after the
date notice of a Tender Date is given and through such Tender Date. In the event that a Note is
transferred in connection with a Tender Date either during the period referred to in clause (a) or
after being selected for redemption in whole or in part, the Note Registrar or the Authenticating
Agent, as appropriate, shall give written notice to any transferee thereof that such Note may be,
or has been, selected for redemption, as the case may be.



     The Book-Entry Notes (a) shall be delivered by the Issuer to the Securities Depository or,
pursuant to the Securities Depository’s instructions, shall be delivered by the Issuer on behalf of
the Securities Depository to and deposited with the DTC Custodian, and in each case shall be
registered in the name of Cede & Co. and (b) shall bear a legend substantially to the following
effect:



     “Unless this Note is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Note Registrar or its agent for registration of
transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest herein.”



     The Book-Entry Notes may be deposited with such other Securities Depository as the Issuer may
from time to time designate, and shall bear such legend as may be appropriate; provided that such
successor Securities Depository maintains a book-entry system that qualifies to be treated as
“registered form” under Section 163(f)(3) of the Code.



     The Issuer and the Trustee are hereby authorized to execute and deliver a Letter of
Representations with the Securities Depository relating to the Notes of each series.



     With respect to Notes registered in the Note Register in the name of Cede & Co., as nominee of
the Securities Depository, the Issuer and the Trustee shall have no responsibility or



30









 







obligation to Direct or Indirect Participants or Beneficial Owners for which the Securities
Depository holds Notes from time to time as a Securities Depository. Without limiting the
immediately preceding sentence, the Issuer and the Trustee shall have no responsibility or
obligation with respect to (a) the accuracy of the records of the Securities Depository, Cede &
Co., or any Direct or Indirect Participant with respect to the ownership interest in the Notes; (b)
the delivery to any Direct or Indirect Participant or any other Person, other than a Holder of a
Note; (c) the payment to any Direct or Indirect Participant or any other Person, other than a
Holder of a Note as shown in the Note Register, of any amount with respect to any distribution of
principal or interest on the Notes; or (d) the making of book-entry transfers among Participants of
the Securities Depository with respect to Notes registered in the Note Register in the name of the
nominee of the Securities Depository. No Person other than a Holder of a Note as shown in the Note
Register shall receive a Note evidencing such Note.



     Upon delivery by the Securities Depository to the Trustee of written notice to the effect that
the Securities Depository has determined to substitute a new nominee in place of Cede & Co., and
subject to the provisions hereof with respect to the payment of distributions by the mailing of
checks or drafts to the Holders of Notes appearing as Holders in the Note Register, the name “Cede
& Co.” in this Indenture shall refer to such new nominee of the Securities Depository.



     In the event that (a) the Securities Depository or the Issuer advises the Trustee in writing
that the Securities Depository is no longer willing or able to discharge properly its
responsibilities as nominee and depository with respect to the Book-Entry Notes and the Issuer is
unable to locate a qualified successor; or (b) the Issuer at its sole option elects to terminate
the book-entry system through the Securities Depository, the Book-Entry Notes shall no longer be
restricted to being registered in the Note Register in the name of Cede & Co. (or a successor
nominee) as nominee of the Securities Depository. At that time, the Issuer may determine that the
Book-Entry Notes shall be registered in the name of and deposited with a successor depository
operating a global book-entry system, as may be acceptable to the Issuer, or such depository’s
agent or designee but, if the Issuer does not select such alternative global book-entry system,
then upon surrender to the Note Registrar of the Book-Entry Notes by the Securities Depository,
accompanied by the registration instructions from the Securities Depository for registration, the
Trustee shall at the Issuer’s expense authenticate Individual Notes. Neither the Issuer nor the
Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance of Individual
Notes, the Trustee, the Note Registrar, the Issuer, any Paying Agent and the Depositor shall
recognize the Holders of the Individual Notes as Holders hereunder.



     Notwithstanding any other provision of this Indenture to the contrary, so long as any
Book-Entry Notes are registered in the name of Cede & Co., as nominee of the Securities Depository,
all distributions of principal and interest on such Book-Entry Notes and all notices with respect
to such Book-Entry Notes shall be made and given, respectively, in the manner provided in the
applicable Letter of Representations.



     Subject to the preceding paragraphs, upon surrender for registration of transfer of any Note
at the office of the Note Registrar and, upon satisfaction of the conditions set forth below,



31









 







the Issuer shall execute in the name of the designated transferee or transferees, a new Note
of the same Principal Amount and dated the date of authentication by the Trustee. The Note
Registrar, if not the Trustee, shall notify the Trustee of any such transfer.



     By acceptance of an Individual Note, whether upon original issuance or subsequent transfer,
each holder of such a Note acknowledges the restrictions on the transfer of such Note set forth in
the Securities Legend and agrees that it will transfer such a Note only as provided herein.



     No transfer of any Note shall be made unless such transfer is exempt from the registration
requirements of the Securities Act and any applicable state securities laws or is made in
accordance with the Securities Act and laws. In the event of any such transfer, unless such
transfer is made in reliance upon Rule 144A under the Securities Act as evidenced by a certificate
signed by such transferee in substantially the form provided in the Supplemental Indenture with
respect to such Notes, (a) the Trustee may require a written opinion of Counsel (which may be
in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Trustee
that such transfer may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from the Securities Act and laws or is being made pursuant to the Securities
Act and laws, which opinion of Counsel shall not be an expense of the Trustee, the Issuer or the
Trust Estate; and (b) the Trustee shall require the transferee to execute a transferee letter
certifying to the Issuer and the Trustee the facts surrounding such transfer, which transferee
letter shall not be an expense of the Trustee, the Issuer or the Trust Estate. The holder of a
Note desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Eligible Lender Trustee and the Issuer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws. None of the Issuer, the
Trustee, the Eligible Lender Trustee or the Depositor intends or is obligated to register or
qualify any Note under the Securities Act or any state securities laws.



     Section 2.08. Mutilated, Destroyed, Lost and Stolen Notes. If a mutilated Note is surrendered
to the Trustee or the Note Registrar, the Issuer shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver in exchange therefor a new Note of the same
series and of like tenor and Principal Amount, Stated Maturity and interest rate, bearing a number
not contemporaneously outstanding. If the Issuer, the Note Registrar, any Authenticating Agent and
the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note,
and there is delivered to the Issuer, the Note Registrar, any Authenticating Agent and the Trustee
such security or indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Issuer, the Note Registrar, any Authenticating Agent or the Trustee that
such Note has been acquired by a bona fide purchaser, the Issuer shall execute and upon its request
the Trustee or any Authenticating Agent shall authenticate and deliver, in exchange for or in lieu
of such destroyed, lost or stolen Note, a new Note of the same series and of like tenor, Principal
Amount, Stated Maturity and interest rate.



     In case any such mutilated, destroyed, lost or stolen Note has become or is about to become
due and payable, the Issuer in its discretion may, instead of issuing a new Note, pay such Note.



32









 





     Every new Note issued pursuant to this Section in lieu of any destroyed, lost or stolen Note
shall constitute an original additional contractual obligation of the Issuer, whether or not the
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all other Notes of such
series duly issued and authenticated hereunder. Neither the Issuer, the Trustee, the Note
Registrar nor any Authenticating Agent shall be required to treat both the original Note and any
duplicate Note as being Outstanding for the purpose of determining the Principal Amount of Notes
which may be issued hereunder or for the purpose of determining any percentage of Notes Outstanding
hereunder, but both the original and duplicate Note shall be treated as one and the same.



     Upon the issuance of any new Note under this Section, the Issuer may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Note Registrar, any
Authenticating Agent and the Trustee) connected therewith.



     The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Notes.



     Section 2.09. Interest Rights Preserved; Dating of Notes. Each Note delivered under this
Indenture upon transfer of or in exchange for or in lieu of any other Note shall carry all the
rights to interest accrued and unpaid, and to accrue, which were carried by such other Note. Each
Note shall bear an original issue date as provided in the Supplemental Indenture authorizing the
issuance of the series of Notes of which such Note is a part and, upon the original delivery of a
series of Notes or an exchange or transfer of Notes pursuant to Section 2.07 hereof, the Trustee or
the Authenticating Agent, as the case may be, shall date each Note to be delivered as of the date
of authentication thereof, except as may be otherwise provided in a Supplemental Indenture with
respect to Notes of the series authorized to be issued thereby.



     Section 2.10. Persons Deemed Holders. The Issuer, the Trustee, each Authenticating Agent,
each Paying Agent, each Note Registrar, each Tender Agent and any other agent of the Issuer may
treat the Person in whose name any Registered Note is registered as the owner of such Note for the
purpose of receiving payment of principal of (and premium, if any), interest on and any Carry-Over
Amounts (and accrued interest thereon) with respect to such Note and (except as may be provided in
a Supplemental Indenture with respect to Beneficial Ownership Interests) for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuer, the Trustee, any
Authenticating Agent, any Paying Agent, any Note Registrar, any Tender Agent nor any other agent of
the Issuer shall be affected by notice to the contrary.



     Section 2.11. Cancellation. All Notes surrendered for payment, redemption, transfer or
exchange, if surrendered to the Trustee, shall be promptly canceled by it, and, if surrendered to
any Person other than the Trustee, shall be delivered to the Trustee and, if not already canceled,
shall be promptly canceled by it. The Issuer may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder, which Notes so delivered
shall be promptly canceled by the Trustee. All canceled Notes held by the Trustee shall be
disposed of as directed by an Issuer Order.



33









 





     Section 2.12. Credit Enhancement Facilities and Swap Agreements. The Issuer may from time to
time, pursuant to a Supplemental Indenture, enter into or obtain the benefit of any Credit
Enhancement Facility with respect to any Notes of any series or any Swap Agreement; provided that
(a) a Rating Agency Confirmation is obtained with respect to any such Credit Enhancement Facility
or Swap Agreement and (b) any such Credit Enhancement Facility or Swap Agreement satisfies any
conditions specified in a prior Supplemental Indenture.



     Notwithstanding anything in this Indenture to the contrary, (a) any Supplemental Indenture
authorizing the execution by the Issuer of a Swap Agreement or Credit Enhancement Facility may
include provisions with respect to the application and use of all amounts to be paid thereunder;
(b) no amounts paid under any such Credit Enhancement Facility shall be part of the Trust Estate
except to the extent, if any, specifically provided in such Supplemental Indenture and no
Beneficiaries shall have any rights with respect to any such amounts so paid except as may be
specifically provided in such Supplemental Indenture; (c) Notes of one or more series or any
portions thereof may be secured by a pledge of any or all amounts payable pursuant to such Credit
Enhancement Facility, in the manner and to the extent provided in such Supplemental Indenture, and
such Notes may be either Senior Notes or Subordinate Notes for purposes hereof; and (d) except as
otherwise provided in the Supplemental Indenture pursuant to which such Credit Enhancement Facility
is obtained or such Swap Agreement is entered into, the Issuer’s obligations under any such Credit
Enhancement Facility or Swap Agreement shall be limited obligations, payable solely from the
revenues and assets of the Issuer pledged therefor under this Indenture.



ARTICLE III




PREPAYMENT OF NOTES




     Section 3.01. Right of Prepayment. The Notes of any series shall be subject to redemption or
principal distribution as provided in this Article and in the Supplemental Indenture creating such
series. As used in this Article and elsewhere in this Indenture, references to “prepay” shall mean
to make payments of principal prior to Stated Maturity, and shall be deemed to include references
to “redeem” or “make distributions of principal with respect to,” as appropriate.



     Notes which may be prepaid before their Stated Maturity shall be prepaid in accordance with
their terms, this Indenture and (except as otherwise provided with respect to the Notes of any
particular series by the provisions of the Supplemental Indenture creating such series) in
accordance with this Article.



     Section 3.02. Election To Prepay or Purchase; Notice to Trustee; Senior Asset Requirement and
Subordinate Asset Requirement. The election of the Issuer to prepay any Notes or cause any Notes
then subject to prepayment to be purchased by the Trustee (other than on a Tender Date) shall be
evidenced by an Issuer Order, received by the Trustee no later than the tenth Business Day prior to
the date on which notice of prepayment must be given in order to effect a prepayment on the
Prepayment Date established with respect to a series of Notes in the Supplemental Indenture
authorizing the issuance of the Notes of such series, stating the



34









 







Prepayment Date, the Principal Amount, the series of Notes, and, if applicable, the Stated
Maturity within a series, to be prepaid.



     Notwithstanding any provision hereof to the contrary but apart from the prepayment of
Subordinate Notes which are no longer Outstanding by reason of Section 9.01 hereof or the
prepayment of Subordinate Notes on a Sinking Fund Payment Date, no prepayment or purchase (other
than on a Tender Date) of Subordinate Notes by the Trustee shall be effected hereunder unless prior
to the Trustee giving notice of redemption, transferring moneys to the Retirement Account to make a
principal distribution or soliciting a purchase, as the case may be, the Issuer furnishes the
Trustee an Issuer Certificate to the effect that, as of the date Subordinate Notes are to be
selected for prepayment or purchase or such determination to prepay is made, and after giving
effect to such prepayment or purchase, the Senior Asset Requirement will be met, and such Issuer
Certificate shall contain the information used to calculate the Senior Asset Requirement and the
Trustee shall verify that the Senior Asset Requirement will be met. Such Subordinate Notes may be
prepaid on the Prepayment Date or purchased on the purchase date therefor if the foregoing
conditions are met on the date such Notes are selected for redemption or purchase or as of the date
on which moneys are transferred to the Retirement Account to make any distribution of principal
with respect to such Notes, whether or not such conditions are met on the Prepayment Date or the
date of purchase. Any election to prepay Notes of a series may also be conditioned upon such
additional requirements as may be set forth in the Supplemental Indenture authorizing the issuance
of such Notes.



     Notwithstanding any provision hereof to the contrary but apart from the prepayment of Junior
Subordinate Notes which are no longer Outstanding by reason of Section 9.01 hereof or the
prepayment of Junior Subordinate Notes on a Sinking Fund Payment Date, no prepayment or purchase
(other than on a Tender Date) of Junior Subordinate Notes by the Trustee shall be effected
hereunder unless prior to the Trustee giving notice of redemption, transferring moneys to the
Retirement Account to make a principal distribution or soliciting a purchase, as the case may be,
the Issuer furnishes the Trustee an Issuer Certificate to the effect that, as of the date Junior
Subordinate Notes are to be selected for prepayment or purchase or such determination to prepay is
made, and after giving effect to such prepayment or purchase, both the Senior Asset Requirement and
the Subordinate Asset Requirement will be met, and such Issuer Certificate shall contain the
information used to calculate the Senior Asset Requirement and the Subordinate Asset Requirement
and the Trustee shall verify that the Senior Asset Requirement and the Subordinate Asset
Requirement will be met. Such Junior Subordinate Notes may be prepaid on the Prepayment Date or
purchased on the purchase date therefor if the foregoing conditions are met on the date such Notes
are selected for redemption or purchase or as of the date on which moneys are transferred to the
Retirement Account to make any distribution of principal with respect to such Notes, whether or not
such conditions are met on the Prepayment Date or the date of purchase. Any election to prepay
Notes of a series may also be conditioned upon such additional requirements as may be set forth in
the Supplemental Indenture authorizing the issuance of such Notes.



     Section 3.03. Selection by Trustee of Notes To Be Prepaid. Subject to Section 3.02 hereof,
Balances deposited to the credit of the Retirement Account to provide for the payment of the
Prepayment Price of Notes subject to mandatory redemption, or required distributions of principal
with respect to Notes, shall be applied to the payment of Notes of all series subject to



35









 







such prepayment (or to the reimbursement of any Credit Facility Provider for such payment) in
such order of priority as may be established by the Supplemental Indentures pursuant to which such
Notes have been issued or, in the absence of direction from such Supplemental Indentures, in the
order of the Stated Maturities of such Notes, and among Notes with the same Stated Maturity, in the
order in which such Notes were issued.



     If less than all Notes of a series are to be prepaid, the Trustee shall select the particular
Notes to be prepaid as provided in the Supplemental Indenture providing for the issuance of such
Notes. The Trustee may provide for the selection for prepayment of portions of the principal of
Notes in the denomination larger than the smallest authorized denomination of the Notes of that
series or multiple thereof.



     The Trustee shall promptly notify the Issuer and any Paying Agent in writing of the Notes
selected for prepayment and, in the case of any Note selected for partial prepayment, the Principal
Amount thereof to be prepaid.



     For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the prepayment of Notes shall relate, in the case of any Note prepaid or to be prepaid
only in part, to the portion of the principal of such Note which has been or is to be prepaid.



     Section 3.04. Notice of Prepayment. Notice of prepayment with respect to any series of Notes
shall be given by first-class mail, postage prepaid, mailed by the date specified in the
Supplemental Indenture creating such series to each Holder of Notes to be prepaid at the address of
such Holder appearing in the Note Register; but neither failure to give such notice nor any defect
in any notice so given shall affect the validity of the proceedings for prepayment of any Note not
affected by such failure or defect.



     All notices of prepayment shall state:




     (a) the Prepayment Date;




     (b) the Prepayment Price;




     (c) the name (including series designation), Stated Maturity and CUSIP numbers of the
Notes to be prepaid, the Principal Amount of Notes of each series to be prepaid, and, if
less than all outstanding Notes of a series are to be prepaid, the identification (and, in
the case of partial prepayment, the respective Principal Amounts) of the Notes of each
series to be prepaid;




     (d) that, on the Prepayment Date, the Prepayment Price of and accrued interest on each
such Note will become due and payable and that interest on each such Note shall cease to
accrue on and after such date;




     (e) the place or places where such Notes are to be surrendered for payment of the
Prepayment Price thereof and accrued interest thereon; and




     (f) if it be the case, that such Notes are to be prepaid by the application of certain
specified trust moneys and for certain specified reasons.



36









 





     Within 60 days after any Prepayment Date, a second notice of prepayment shall be given, in the
manner described above, to the Holder of any Note that was not presented for prepayment within 30
days after the Prepayment Date.



     Section 3.05. Notes Payable on Prepayment Date and Sinking Fund Payment Date. Notice of
prepayment having been given as aforesaid, the Notes so to be prepaid shall, on the Prepayment
Date, become due and payable at the Prepayment Price specified plus accrued interest thereon to the
Prepayment Date and on and after such date (unless the Issuer shall default in the payment of the
Prepayment Price and accrued interest) such Notes (or portions thereof) shall cease to bear
interest. Upon surrender of any such Note for redemption in accordance with such notice, such Note
shall be paid at the Prepayment Price thereof plus (unless the Prepayment Date is a regularly
scheduled Interest Payment Date) accrued interest to the Prepayment Date. Installments of interest
whose Stated Maturity is on or prior to the Prepayment Date shall continue to be payable to the
applicable Holder.



     If any Note called for redemption shall not be so paid upon surrender thereof for redemption,
the Prepayment Price and, to the extent lawful, interest thereon shall, until paid, bear interest
from the Prepayment Date at the rate borne by the Note.



     Section 3.06. Notes Prepaid in Part. Any Note other than a Book-Entry Note which is to be
redeemed only in part shall (except as otherwise provided in the Supplemental Indenture pursuant to
which the Notes of such series were issued) be surrendered to the Paying Agent (with, if the Paying
Agent so requires, due endorsement by, or a written instrument of transfer in form satisfactory to
the Paying Agent duly executed by, the Holder thereof or his, her or its attorney duly authorized
in writing) and the appropriate officers of the Issuer shall execute and the Trustee or an
Authenticating Agent shall authenticate and deliver to the Holder of such Note, without service
charge, a new Note or Notes of the same series, of any authorized denomination or denominations,
having the same Stated Maturity and interest rate as requested by such Holder, in aggregate
Principal Amount equal to and in exchange for the unredeemed portion of the principal of the Note
so surrendered.



     Any Note with respect to which a partial distribution of principal is made shall remain
Outstanding in the then current Principal Amount. The Trustee shall retain a record of the
Principal Amount of each Note any portion of the principal of which has been distributed, and shall
give the Note Registrar (if other than the Trustee) prompt written notice of the current Principal
Amount of each such Note as of the end of each calendar month.



     Section 3.07. Purchase of Notes. The Issuer may at any time, but subject to Section 3.02
hereof, and in the case of Book-Entry Notes, subject to Section 2.07 hereof, authorize and direct
the Trustee to purchase Notes in the open market out of any funds available for such purpose, such
purchases to be made at a price not in excess of the amount specified in this Indenture or, if no
amount is specified, the Principal Amount thereof plus accrued interest and any applicable
prepayment premium. In addition, the Issuer may, from time to time, direct the Trustee to request
the submission of tenders following published notice requesting such submission prior to making the
purchases authorized pursuant to this Section. The Issuer may specify the maximum and minimum
period of time which shall transpire between the date upon which such notice is to be given and the
date upon which such tenders are to be accepted or may



37









 







authorize the Trustee to determine the same in its discretion. No tenders shall be considered
or accepted at any price exceeding the maximum price specified by the Issuer for the purchase of
Notes. The Trustee shall accept bids with the lowest price and, in the event the moneys available
for purchase pursuant to such tenders are not sufficient to permit acceptance of all tenders and if
there shall be tenders at an equal price above the amounts of moneys available for purchase, then
the Trustee shall, determine in its discretion, the Notes tendered which shall be purchased. All
Notes purchased by the Trustee pursuant to this Section shall be canceled and not reissued.



ARTICLE IV




CREATION OF FUNDS AND ACCOUNTS;




CREDITS THERETO AND PAYMENTS THEREFROM




     Section 4.01. Creation of Funds and Accounts. There are hereby created and established the
following Funds and Accounts to be held by the Trustee and maintained in accordance with the
provisions of this Indenture:




     (a) an Acquisition Fund;




     (b) an Administration Fund;




     (c) a Reserve Fund;




     (d) a Collection Fund;




     (e) a Debt Service Fund, within which there shall be an Interest Account, a Principal
Account and a Retirement Account;




     (f) a Surplus Fund; and




     (g) a Borrower Benefits Fund.



     The Supplemental Indenture for any series of Notes may provide for the creation of additional
Funds, separate Accounts within any Fund or separate subaccounts within any Account, into which
moneys representing proceeds of such series, moneys set aside for the payment of such series, or
moneys otherwise allocable to such series shall be deposited or credited. Notwithstanding the
creation of such Accounts or subaccounts, moneys therein shall (except as provided in this Section
with respect to amounts paid pursuant to a Credit Enhancement Facility and amounts set aside in an
Escrow Account) be available for any purpose for which other moneys in the Fund of which such
Account is a part or the Account of which such subaccount is a part, as the case may be, are
authorized to be applied or used.



     Any Supplemental Indenture providing for the issuance of any series of Notes, the payment of
which is to be provided pursuant to or secured by a Credit Enhancement Facility, shall also provide
for the creation of separate subaccounts within the Interest Account, the Principal Account and the
Retirement Account. Any payment received pursuant to such Credit Enhancement Facility shall be
deposited into such subaccounts, and moneys deposited therein shall be used only for the payment of
Debt Service on Notes of such series, or for such other



38









 







purposes as may be permitted by such Supplemental Indenture, upon the conditions set forth in
such Supplemental Indenture.



     Any Supplemental Indenture providing for the issuance of any series of Notes which (or the
Beneficial Ownership Interests in which) must, upon the occurrence of certain circumstances, or
may, at the option of the Holder or Beneficial Owner, be tendered for purchase by or on behalf of
the Issuer shall also provide for the creation of a separate Fund for such purpose. Any payment
received from any source provided for in accordance with the provisions in the Supplemental
Indenture (including proceeds of remarketing of such Notes or Beneficial Ownership Interests,
amounts provided pursuant to a Credit Enhancement Facility which provides liquidity for the payment
of such purchase price, or amounts received from other sources) shall be deposited into such Fund,
and moneys deposited therein shall be used only for the payment of the purchase price of Notes of
such series (or the Beneficial Ownership Interests therein) on a Tender Date, or for such other
purposes as may be permitted by such Supplemental Indenture (including reimbursement of the Credit
Facility Provider for the payment of such purchase price).



     In addition, a Supplemental Indenture may provide for the creation of one or more Escrow
Accounts within the Debt Service Fund, upon the defeasance of Notes pursuant to Section 9.01
hereof. Moneys deposited in any Escrow Account shall be used only for the payment of the Notes
with respect to which the Escrow Account was established.



     Section 4.02. Acquisition Fund. With respect to each series of Notes, the Trustee shall, upon
delivery to the initial purchasers thereof and from the proceeds thereof, credit to the Acquisition
Fund the amount, if any, specified in the Supplemental Indenture providing for the issuance of such
series of Notes. The Trustee shall also deposit in the Acquisition Fund: (a) any funds to be
transferred thereto from the Collection Fund as provided in Section 4.05 hereof, or from the
Surplus Fund as provided in Section 4.07 hereof; and (b) any other amounts specified in a
Supplemental Indenture to be deposited therein.



     Balances in the Acquisition Fund shall be used only for (a) the acquisition of Eligible Loans
including the payment of any related Premium and origination fees, if any, and any related Add-On
Loan; (b) the redemption or purchase of, or distribution of principal with respect to, Notes as
provided in a Supplemental Indenture providing for the issuance of such Notes; (c) the payment of
Debt Service on the Notes and Other Obligations when due (upon transfer to the Debt Service Fund as
set forth below in this Section); (d) following the Acquisition Period, the deposit of amounts into
the Debt Service Fund; (e) the deposit of amounts into the Administration Fund to pay
Administration Fees, Servicing Fees and Note Fees as provided in Section 4.03 hereof; or (f) such
other purposes related to the Issuer’s loan programs as may be provided in the Supplemental
Indenture authorizing a series of Notes. The Trustee shall make payments from the Acquisition Fund
to Lenders for the acquisition of Eligible Loans, including all related Premiums, if any, in
connection therewith, and any related Add-On Loan, upon receipt by the Trustee of an Eligible Loan
Acquisition Certificate and all documents and certificates required thereby.



     If, on any Monthly Calculation Date, the Balance in the Acquisition Fund available for such
purpose is less than the amount set forth in an Issuer Certificate as the amount expected to



39









 







be needed to pay such origination fees, related premiums and other fees due in the next month,
the Trustee shall transfer to the Acquisition Fund an amount equal to such deficiency from the
following Funds in the following order of priority: (i) the Collection Fund and (ii) the Surplus
Fund.



     Balances in the Acquisition Fund (other than any portion of such Balance consisting of Student
Loans) shall be transferred to the credit of the Debt Service Fund on the Monthly Calculation Date
of each calendar month to the extent required to provide for the payment of the Debt Service on the
Notes and any Other Obligations, all as provided in Section 4.06 hereof. Transfers of amounts from
the Acquisition Fund to the Debt Service Fund pursuant to the preceding sentence shall be made by
the Trustee without any further authorization or direction. If any amounts have been transferred
to the Debt Service Fund pursuant to this paragraph, the Trustee shall, to the extent necessary to
cure the deficiency in the Acquisition Fund as a result of such transfer or transfers, transfer to
the Acquisition Fund amounts from the Collection Fund as provided in Section 4.05 hereof.



     On the first Monthly Calculation Date following the end of the Acquisition Period relating to
a series of Notes, the Trustee shall transfer from the Acquisition Fund to the Retirement Account
of the Debt Service Fund, for the redemption of, or distribution of principal with respect to,
Notes, an amount equal to the Remaining Acquisition Amount (provided, however that any portion of
the Remaining Acquisition Amount which is less than an authorized denomination for the Notes shall
be deposited to the Collection Fund).



     The Principal Balance of Financed Student Loans in the Acquisition Fund shall be included in
the Balance of the Acquisition Fund until such Financed Student Loans shall have been paid in full
or sold or exchanged as herein provided. Interest and principal payments, including Guarantee
payments, and Special Allowance Payments received with respect to Financed Student Loans
(excluding, except as otherwise provided in a Supplemental Indenture, any federal interest subsidy
payments and Special Allowance Payments that accrued prior to the date on which such Student Loans
were Financed) and proceeds from the sale or other conveyance of Financed Student Loans shall be
credited to the Collection Fund as provided in Section 4.05 hereof.



     Except as otherwise set forth in a Supplemental Indenture (which Supplemental Indenture shall
be executed by the Issuer only after receipt of a Rating Agency Confirmation) or with Rating Agency
Confirmation, the Issuer may direct the Trustee and the Eligible Lender Trustee to sell to any
purchaser one or more Student Loans Financed only in the following circumstances: (a) to the
Depositor or other seller if such party is required to repurchase such Financed Student Loan
pursuant to a Student Loan Purchase Agreement; (b) in order to avoid an Event of Default hereunder;
(c) to a Guarantee Agency; or (d) if all of the Financed Student Loans are sold at a price
sufficient to defease all Obligations Outstanding under this Indenture as described in Article IX
hereof and such proceeds are so used. Prior to any such sale the Trustee shall have received an
Issuer Certificate certifying that such sale will not materially adversely affect the Issuer’s
ability to pay Debt Service on the Outstanding Notes and Outstanding Other Obligations, Carry-Over
Amounts (including accrued interest thereon) with respect to Outstanding Notes, Servicing Fees,
Administration Fees or Note Fees. Any money received by the Issuer in connection with a sale of
Financed Student Loans pursuant to this paragraph,



40









 







including those moneys representing the excess of the aggregate Principal Balance of and
accrued borrower interest on such Financed Student Loans released from this Indenture over the
aggregate Principal Balance of and accrued borrower interest on the Eligible Loans transferred to
this Indenture in exchange therefor, shall be deposited to the credit of the Collection Fund in
accordance with the preceding paragraph. Notwithstanding the foregoing, the Issuer may not direct
the Trustee or the Eligible Trustee to sell any Student Loans Financed with moneys in the
Acquisition Fund to the Depositor pursuant to clause (a) of this paragraph (unless the Depositor is
required to repurchase such Student Loan pursuant to a Student Loan Purchase Agreement).



     Any acquisition or sale of Eligible Loans hereunder may be for an amount of principal,
interest and Special Allowance Payments as of a cut-off date determined by the Issuer, and,
notwithstanding any other provision of this Indenture to the contrary, compensatory payments and
receipts may be made to and from the Acquisition Fund in amounts necessary to reconcile the same.



     Pending application of moneys in the Acquisition Fund, such moneys shall be invested in
Investment Securities, as provided in Section 4.11 hereof, and any earnings on or income from such
investments shall be deposited in the Collection Fund as provided in Section 4.05 hereof.



     Section 4.03. Administration Fund. With respect to each series of Notes, the Trustee shall,
upon delivery thereof and from the proceeds thereof, credit to the Administration Fund the amount,
if any, specified in the Supplemental Indenture providing for the issuance of such series of Notes.
The Trustee shall also credit to the Administration Fund all amounts transferred thereto from the
Collection Fund as provided in Section 4.05 hereof and the Surplus Fund as provided in Section 4.07
hereof. Amounts in the Administration Fund shall be used for the payment of Costs of Issuance,
Servicing Fees, Administration Fees and Note Fees as provided in this Section.



     On each Monthly Calculation Date, the Trustee shall transfer and credit to the Administration
Fund moneys available hereunder for transfer thereto in such amounts and at such times as an
Authorized Officer of the Issuer shall direct by Issuer Order, for the payment of Servicing Fees,
Administration Fees and Note Fees due during the next month. Deposits to the credit of the
Administration Fund shall be made from the following sources in the following order of priority:
(i) the Collection Fund to the extent and in the manner provided in Section 4.05 hereof; and (ii)
the Surplus Fund to the extent and in the manner provided in Section 4.07 hereof.



     Amounts in the Administration Fund may, subject to any limitations specified in a Supplemental
Indenture, be paid out for Servicing Fees, Administration Fees or Note Fees at any time upon
receipt of an Issuer Order and shall be paid in the full amount designated therein. Amounts in the
Administration Fund may, as provided in a Supplemental Indenture pursuant to which Notes are
issued, be paid out for Costs of Issuance related to such Notes upon receipt of an Issuer Order and
shall be paid in the full amount designated therein. Upon receipt by the Trustee of Issuer Orders
directing the payment of Note Fees or Costs of Issuance to designated payees in designated amounts
for stated services or, in the case of reimbursement of the Issuer for its payment of such Note
Fees or Costs of Issuance or the payment of Servicing Fees or Administration Fees, to the Issuer,
and in each case certifying that such payment is authorized by



41









 







this Indenture, be used for and applied only to pay Servicing Fees, Administration Fees, Note
Fees and Costs of Issuance or to reimburse another fund, account or other source of the Issuer for
the previous payment of Administration Fees, Servicing Fees, Note Fees or Costs of Issuance.
Payments from the Administration Fund for such purposes shall be made by check or wire transfer by
the Trustee in accordance with such Issuer Orders (which Issuer Order shall have attached thereto
the appropriate invoice from the payee and the Trustee shall compare the amount stated in the
invoice with the amount requested by the Issuer Order). The Trustee shall calculate the fees
payable to the Auction Agent, the Broker-Dealer, the Issuer Administrator and the Trustee and shall
compare its calculations to the amounts requested in the Issuer Order. Amounts in the
Administration Fund in excess of amounts needed to pay Servicing Fees, Administration Fees or Note
Fees may, upon Issuer Order, be transferred to the Collection Fund. Any Administrative Fees
payable to any subadministrator shall be paid directly to such subadministrator and not to or
through the Issuer Administrator.



     Pending application of moneys in the Administration Fund, the moneys therein shall be invested
in Investment Securities, as provided in Section 4.11 hereof, and any earnings on or income from
such investments shall be deposited in the Collection Fund as provided in Section 4.05 hereof.



     Section 4.04. Reserve Fund. Immediately upon the delivery of any series of Notes, and from
the proceeds thereof or, at the option of the Issuer, from any amounts to be transferred thereto
from the Surplus Fund pursuant to Section 4.07 hereof or from any other available moneys of the
Issuer not otherwise credited to or payable into any Fund or Account under this Indenture or
otherwise subject to the pledge and security interest created by this Indenture, the Trustee shall
credit to the Reserve Fund the amount, if any, specified in the Supplemental Indenture providing
for the issuance of that series of Notes, such that upon issuance of such Notes, the Balance in the
Reserve Fund shall not be less than the Reserve Fund Requirement.



     If on any Monthly Calculation Date the Balance in the Reserve Fund shall be less than the
Reserve Fund Requirement, which shall be calculated by the Trustee on such Monthly Calculation Date
with the most current information provided to the Trustee, the Trustee shall transfer and credit
thereto an amount equal to the deficiency from the following Funds and Accounts in the following
order of priority (to the extent not required for credit to the Administration Fund, the Debt
Service Fund or the Acquisition Fund): (i) the Collection Fund and (ii) the Surplus Fund.



     The Balance in the Reserve Fund shall be used and applied solely for the payment when due of
Debt Service on the Notes and the Other Obligations and the other purposes specified in Section
4.06 hereof. Amounts in the Reserve Fund shall be transferred by the Trustee to the credit of the
Debt Service Fund at any time and to the extent that the Balance therein and the Balances available
for deposit to the credit thereof from the Collection Fund and the Surplus Fund are insufficient to
meet the requirements specified in Section 4.06 hereof for deposit to the credit of the Debt
Service Fund at such time (provided, however, that such amounts shall be applied in the following
order of priority: (a) to the payment of interest on the Senior Notes and the payment of Other
Senior Obligations payable from the Interest Account, (b) to the payment of principal and the
purchase price of the Senior Notes and the payment of Other Senior Obligations payable from the
Principal Account, (c) to the payment of interest on the



42









 







Subordinate Notes and the payment of Other Subordinate Obligations payable from the Interest
Account, (d) to the payment of principal and the purchase price of the Subordinate Notes and the
payment of Other Subordinate Obligations payable from the Principal Account, (e) to the payment of
interest on the Junior Subordinate Notes and the payment of Other Junior Subordinate Obligations
payable from the Interest Account and (f) to the payment of principal and the purchase price of the
Junior Subordinate Notes and the payment of Other Junior Subordinate Obligations payable from the
Principal Account).



     On the Stated Maturity or any Prepayment Date of any Notes, amounts in the Reserve Fund shall,
upon Issuer Order, be applied to the payment at Maturity or prepayment of all Outstanding Notes of
a series, to the extent that such application will not reduce the Balance of the Reserve Fund below
the Reserve Fund Requirement (calculated as though the Notes to be retired on such Stated Maturity
or Prepayment Date were not Outstanding as of the date of such calculation), and, after giving
effect to such payment or prepayment, the conditions of Section 3.02 will be met. In addition, at
any time when the aggregate of the Balances in the Debt Service Fund, the Reserve Fund and the
Surplus Fund (exclusive of Financed Student Loans) equals an amount sufficient to discharge and
satisfy the obligations of the Issuer with respect to all of the Outstanding Notes and Other
Obligations, all in the manner described in Section 9.01 hereof, said Balances shall, upon Issuer
Order, be so applied.



     Notwithstanding the foregoing, if on any Monthly Calculation Date the Balance in the Reserve
Fund exceeds the Reserve Fund Requirement, such excess shall, upon Issuer Order, be transferred to
the Collection Fund.



     Pending application of moneys in the Reserve Fund, the moneys therein shall be invested in
Investment Securities as provided in Section 4.11 hereof, and any earnings on or income from such
investments shall be deposited in the Collection Fund as provided in Section 4.05 hereof.



     Section 4.05. Collection Fund. The Trustee shall credit to the Collection Fund: (a) all
amounts received as interest, including federal interest subsidy payments, late fees and principal
payments with respect to Financed Student Loans, including all Guarantee payments, and all Special
Allowance Payments with respect to Financed Student Loans (excluding, unless otherwise provided in
a Supplemental Indenture, any federal interest subsidy payments and Special Allowance Payments that
accrued prior to the date on which such Student Loans were Financed); (b) unless otherwise provided
in a Supplemental Indenture, proceeds of any sale of any Financed Student Loans as permitted by
Section 4.02 hereof; (c) amounts transferred thereto from the Acquisition Fund as provided in
Section 4.02 hereof, the Administration Fund as provided in Section 4.03 hereof, the Reserve Fund
as provided in Section 4.04 hereof and the Borrower Benefits Fund as provided in Section 4.08
hereof; (d) all amounts received as earnings on or income from Investment Securities in the
Acquisition Fund, the Administration Fund, the Reserve Fund, the Collection Fund, the Debt Service
Fund, the Surplus Fund and the Borrower Benefits Fund; (e) all Counterparty Swap Payments; and (f)
any amount representing proceeds of the Notes as specified in a Supplemental Indenture.



     The Issuer shall cause all amounts required to be credited to the Collection Fund, upon
receipt by the Issuer or a Servicer, or any agent thereof, as the case may be, to be forthwith
transmitted to the Trustee for such credit.



43









 





     On each Monthly Calculation Date, the Trustee shall transfer the moneys received during the
preceding month in the Collection Fund, in the following priority:




     (a) to make any payments due and payable (or anticipated to be due and payable prior to
the next Monthly Calculation Date) by the Issuer to the U.S. Department of Education related
to the Financed Student Loans or any other payment due to another entity or trust estate if
amounts due by the Issuer or the Eligible Lender Trustee to the U.S. Department of Education
with respect to Financed Student Loans were paid by or offset against such other entity or
trust estate;




     (b) to the credit of the Administration Fund to the extent and in the manner provided
in Section 4.03 hereof;




     (c) to the credit of the Interest Account to the extent and in the manner provided in
Section 4.06(a) hereof to provide for the payment of interest on Senior Notes or Other
Senior Obligations (except termination payments due under Senior Swap Agreements as a result
of Swap Counterparty default) payable therefrom;




     (d) to the credit of the Principal Account to the extent and in the manner provided in
Section 4.06(b) hereof to provide for the payment of principal of Senior Notes at their
Stated Maturity or on a Sinking Fund Payment Date, or the reimbursement of Senior Credit
Facility Providers for the payment of principal of the Notes;




     (e) to the credit of the Interest Account to the extent and in the manner provided in
Section 4.06(a) hereof to provide for the payment of interest on Subordinate Notes or Other
Subordinate Obligations (except termination payments due under Subordinate Swap Agreements
as a result of Swap Counterparty default) payable therefrom;




     (f) to the credit of the Principal Account to the extent and in the manner provided in
Section 4.06(b) hereof to provide for the payment of principal of Subordinate Notes at their
Stated Maturity or on a Sinking Fund Payment Date, or the reimbursement of Subordinate
Credit Facility Providers for the payment of principal of the Notes;




     (g) to the credit of the Reserve Fund to the extent and in the manner provided in
Section 4.04 hereof;




     (h) to the credit of the Interest Account to the extent and in the manner provided in
Section 4.06(a) hereof to provide for the payment of interest on Junior Subordinate Notes or
Other Junior Subordinate Obligations (except termination payments due under Junior
Subordinate Swap Agreements as a result of Swap Counterparty default) payable therefrom;




     (i) to the credit of the Principal Account to the extent and in the manner provided in
Section 4.06(b) hereof to provide for the payment of principal of Junior Subordinate Notes
at their Stated Maturity or on a Sinking Fund Payment Date or the reimbursement of Junior
Subordinate Credit Facility Providers for the payment of principal of the Notes;



44









 






     (j) to make such other payments or distributions as may be set forth in a Supplemental
Indenture;




     (k) during the Revolving Period, to the extent directed by Issuer Order, to the credit
of the Acquisition Fund to acquire Eligible Loans and, after the Revolving Period, to the
extent directed by Issuer Order, to the credit of the Acquisition Fund an amount equal to
any Add-On Loans required to be funded;




     (l) to the credit of the Retirement Account, but only at the direction of the Issuer,
to the extent and in the manner provided in Section 4.06(c) hereof for the redemption of, or
distribution of principal with respect to, Notes (or the reimbursement of Credit Facility
Providers for the payment of the Prepayment Price of the Notes);




     (m) to the credit of the Interest Account to the extent and in the manner provided in
Section 4.06(a) for the payment of Carry-Over Amounts (and interest thereon) with respect to
the Senior Notes;




     (n) (but only if the Senior Asset Percentage would be at least 100% upon the
application of such amounts), to the credit of the Interest Account to the extent and in the
manner provided in Section 4.06(a) for the payment of Carry-Over Amounts (and interest
thereon) with respect to the Subordinate Notes;




     (o) (but only if the Senior Asset Percentage and the Subordinate Asset Percentage would
be at least 100% upon the application of such amounts), to the credit of the Interest
Account to the extent and in the manner provided in Section 4.06(a) for the payment of
Carry-Over Amounts (and interest thereon) with respect to the Junior Subordinate Notes;




     (p) to the credit of the Interest Account for the payment of termination payments due
under Senior Swap Agreements as a result of Swap Counterparty default;




     (q) to the credit of the Interest Account for the payment of termination payments due
under Subordinate Swap Agreements as a result of Swap Counterparty default;




     (r) to the credit of the Interest Account for the payment of termination payments due
under Junior Subordinate Swap Agreements as a result of Swap Counterparty defaults; and




     (s) to the credit of the Surplus Fund.



     Pending application of moneys in the Collection Fund, such moneys shall be invested in
Investment Securities as provided in Section 4.11 hereof, and any earnings on or income from such
investments shall be retained therein.



     Section 4.06. Debt Service Fund. The Debt Service Fund shall be used only for the payment of
principal of, premium, if any, and interest on the Notes, the purchase price of the



45









 







Notes to be purchased in accordance with Section 3.07 hereof, Other Obligations and Carry-Over
Amounts (including any accrued interest thereon).




     (a) Interest Account. With respect to each series of Notes, the Trustee shall, upon
delivery to the original purchasers thereof and from the proceeds thereof, credit to the
Interest Account the amount, if any, specified in the Supplemental Indenture providing for
the issuance of such series of Notes. The Trustee shall also deposit in the Interest
Account (i) that portion of the proceeds from the sale of the Issuer’s refunding bonds,
notes or other evidences of indebtedness, if any, to be used to pay interest on the Notes;
(ii) all payments under any Credit Enhancement Facilities by Credit Facility Providers to be
used to pay interest on Notes; and (iii) all amounts required to be transferred thereto from
the Funds and Accounts specified in this Section 4.06(a).



     With respect to each series of Notes on which interest is paid at intervals of less than every
30 days, the Trustee shall deposit to the credit of the Interest Account on each Monthly
Calculation Date an amount equal to the interest that will become payable on such Notes prior to or
during the following calendar month. With respect to each series of Notes on which interest is
paid at intervals of more than every 30 days, the Trustee shall make equal monthly deposits to the
credit of the Interest Account on each Monthly Calculation Date preceding each Interest Payment
Date, to aggregate the full amount of such interest. With respect to Variable Rate Notes for which
any such amount cannot be determined on the Monthly Calculation Date, the Trustee will make such
deposit based upon assumptions set forth in the Supplemental Indenture authorizing such Notes.



     With respect to each Swap Agreement under which Issuer Swap Payments are paid no less
frequently than every 30 days, the Trustee shall deposit to the credit of the Interest Account on
each Monthly Calculation Date an amount equal to the Issuer Swap Payments that will become payable
under such Swap Agreement during the following calendar month. With respect to each Swap Agreement
under which Issuer Swap Payments are paid less frequently than every 30 days, the Trustee shall
make equal monthly deposits to the credit of the Interest Account on each Monthly Calculation Date
preceding each date on which such Issuer Swap Payments are due, to aggregate the full amount of
such Issuer Swap Payments. With respect to any Swap Agreement for which any such amount cannot be
determined on the Monthly Calculation Date, the Trustee will make such deposit based upon
assumptions set forth in the Supplemental Indenture authorizing such Swap Agreement.



     With respect to each Credit Enhancement Facility under which fees or premiums are due no less
frequently than every 30 days, the Trustee shall deposit to the credit of the Interest Account on
each Monthly Calculation Date an amount equal to the fees or premiums that will become payable
under such Credit Enhancement Facility during the following calendar month. With respect to each
Credit Enhancement Facility under which fees or premiums are paid less frequently than every 30
days, the Trustee shall make equal monthly deposits to the credit of the Interest Account on each
Monthly Calculation Date preceding each Interest Payment Date, to aggregate the full amount of such
fees or premiums.



     In making the deposits required to be deposited and credited to the Interest Account, all
other deposits and credits otherwise made or required to be made to the Interest Account shall, to



46









 







the extent available for such purpose, be taken into consideration and allowed for. Each
deposit required by this Section 4.06(a) to pay the foregoing amounts or any deficiency on an
Interest Payment Date shall be made by transfer from the following Funds and Accounts, in the
following order of priority: (i) the Collection Fund, (ii) the Surplus Fund, (iii) the Acquisition
Fund (other than that portion of the Balance thereof consisting of Student Loans) and (iv) the
Reserve Fund.



     On each Monthly Calculation Date, if any Carry-Over Amount (including any accrued interest
thereon) will be due and payable with respect to a series of Notes during the next month, as
provided in the related Supplemental Indenture, the Trustee shall transfer to the Interest Account
(to the extent amounts are available therefor in the Collection Fund or the Surplus Fund after
taking into account all prior applications of moneys in such Funds on such Monthly Calculation Date
in accordance with Sections 4.06 and 4.08 hereof) an amount equal to such Carry-Over Amount
(including any accrued interest thereon) so due and payable.



     The moneys in the Interest Account required for the payment of interest on the Notes of any
series (including, without limitation, the payment of that portion of the purchase price of Notes
purchased pursuant to Section 4.06(b) or 4.06(c) hereof attributable to accrued interest thereon),
any Issuer Swap Payments or fees payable to a Credit Facility Provider under a Credit Enhancement
Facility or any Carry-Over Amount (including any accrued interest thereon) shall be applied by the
Trustee to the payment of such interest or amounts when due without further authorization or
direction, except that the Issuer shall provide written direction as to any Issuer Swap Payments or
fees payable to a Credit Facility Provider under a Credit Enhancement Facility.



     Pending application of moneys in the Interest Account, such moneys shall be invested in
Investment Securities as provided in Section 4.11 hereof, and any earnings on or income from such
investments shall be deposited in the Collection Fund as provided in Section 4.05 hereof.




     (b) Principal Account. With respect to each series of Notes, the Trustee shall, upon
delivery to the original purchasers thereof and from the proceeds thereof, credit to the
Principal Account: (i) that portion of the proceeds from the sale of the Issuer’s bonds,
notes or other evidences of indebtedness, if any, to be used to pay principal of the Notes
on a Principal Payment Date; (ii) all payments under any Credit Enhancement Facility to be
used to pay principal of Notes; and (iii) all amounts required to be transferred thereto
from the Funds and Accounts specified in this Section 4.06(b).



     Each deposit required by this Section 4.06(b) to pay the foregoing amounts or any deficiency
on an Principal Payment Date shall be made by transfer from the following Funds, in the following
order of priority (after transfers therefrom to the Interest Account required on the date of any
such transfer): (i) the Collection Fund, (ii) the Surplus Fund, (iii) the Acquisition Fund (other
than that portion of the Balance thereof consisting of Student Loans) and (iv) the Reserve Fund.



     The moneys in the Principal Account required for the payment of the principal of Notes at the
Stated Maturity thereof or on a Sinking Fund Payment Date therefor (or for the



47









 







reimbursement to any Credit Facility Provider for the payment of such principal) shall be
applied by the Trustee to such payment when due without further authorization or direction.



     Subject to Section 3.02 hereof, Balances in the Principal Account may also be applied to the
purchase of Notes at a purchase price (including any brokerage or other charges) not to exceed the
Principal Amount thereof plus accrued interest, in accordance with the provisions of Section 3.07
hereof, or to the redemption of or distribution of principal with respect to Notes at a Prepayment
Price not to exceed the Principal Amount thereof plus accrued interest, upon transfer to the
Retirement Account, as determined by the Issuer at such time, provided the Trustee shall have first
certified that no deficiency exists at such time in the Debt Service Fund. Any such purchase,
redemption, or distribution of principal shall be limited to those Notes whose Stated Maturity or
Sinking Fund Payment Date is the next succeeding Principal Payment Date. If any moneys credited to
the Principal Account for the retirement of the Term Notes are applied to the purchase or
redemption of, or distribution of principal with respect to, such Notes as provided in this Section
4.06(b), the Principal Amount of such Notes to be prepaid on the next respective Sinking Fund
Payment Date shall be reduced by the Principal Amount of the Notes so purchased, redeemed or
distributed; provided, however, that no Term Notes shall be so purchased during the interval
between the date on which notice of prepayment of said Notes on a Sinking Fund Payment Date is
given and the date of prepayment set forth in such notice, unless the Notes so purchased are Notes
called for prepayment in such notice or are purchased from moneys other than those credited to the
Principal Account with respect to sinking fund installments.



     All Notes retired by prepayment, purchase or payment at Stated Maturity pursuant to this
Section 4.06(b) shall be canceled and shall not be reissued. The accrued interest to be paid on
the prepayment, purchase or payment at Stated Maturity of such Notes shall be paid from the
Interest Account.



     Pending application of moneys in the Principal Account, such moneys shall be invested in
Investment Securities as provided in Section 4.11 hereof, and any earnings on or income from such
investments shall be deposited in the Collection Fund as provided in Section 4.05 hereof.




     (c) Retirement Account. The Trustee shall deposit to the credit of the Retirement
Account (i) any amounts transferred thereto from the Acquisition Fund, the Collection Fund,
the Reserve Fund, the Surplus Fund or the Principal Account to provide for the redemption or
purchase of, or the distribution of principal with respect to, Notes; (ii) that portion of
the proceeds from the sale of the Issuer’s bonds, notes or other evidences of indebtedness,
if any, to be used to pay the principal or Prepayment Price of Notes on a date other than
the Stated Maturity thereof or a Sinking Fund Payment Date therefor; (iii) that portion of
the proceeds of the sale or securitization of an Eligible Loan, if any, to be used to pay
the principal or Prepayment Price of Notes on a date other than the Stated Maturity thereof
or a Sinking Fund Payment Date thereof; and (iv) all payments made by a Credit Facility
Provider under a Credit Enhancement Facility to be used to pay the principal or Prepayment
Price of Notes payable from the Retirement Account.



     Subject to Section 3.02 hereof, all redemptions of and distributions of principal with respect
to Notes (other than at Stated Maturity or on a Sinking Fund Payment Date), shall be



48









 







made with moneys deposited to the credit of the Retirement Account. Moneys in the Retirement
Account shall also be used for the reimbursement to any Credit Facility Provider for the payment of
such amounts pursuant to a Credit Enhancement Facility.



     Subject to Section 3.02 hereof, Balances in the Retirement Account may also be applied to the
purchase of Notes at a purchase price (including any brokerage or other charges) not to exceed the
Principal Amount thereof plus accrued interest plus any then applicable prepayment premium, in
accordance with the provisions of Section 3.07 hereof, as determined by the Issuer at such time;
provided the Trustee shall have first certified that no deficiency exists at such time in the Debt
Service Fund.



     In the event that Notes are to be prepaid from the Retirement Account on a date other than a
regularly scheduled Interest Payment Date or are to be purchased from Balances in the Retirement
Account pursuant to the preceding paragraph, accrued interest on such Notes shall be paid from the
Interest Account.



     The moneys in the Retirement Account required for the payment of the Prepayment Price of Notes
to be redeemed, or required distributions or principal with respect to Notes (or for the
reimbursement to any Credit Facility Provider for the payment of such amounts) shall be applied by
the Trustee to such payment when due without further authorization or direction.



     Pending application of moneys in the Retirement Account, such moneys shall be invested in
Investment Securities as provided in Section 4.11 hereof, and any earnings on or income from such
investment shall be deposited in the Collection Fund as provided in Section 4.05 hereof.



     Section 4.07. Surplus Fund. On each Monthly Calculation Date, the Trustee shall transfer from
the Collection Fund to the Surplus Fund any amounts permitted to be transferred to the Surplus Fund
pursuant to Section 4.05 hereof. The Trustee shall also credit to the Surplus Fund any amounts
transferred from the Acquisition Fund pursuant to Section 4.02.



     At any time there is a deficiency in any of the other Funds or Accounts, Balances in the
Surplus Fund shall be transferred to such Funds or Accounts to remedy such deficiency in the same
order of priority as set forth in Section 4.05 hereof for the application of moneys in the
Collection Fund.



     Subject to Section 3.02 hereof, Balances in the Surplus Fund may also be applied to any one or
more of the following purposes at any time as determined by the Issuer at such time, provided the
Trustee shall have first certified that no deficiencies exist at such time in the Administration
Fund, the Debt Service Fund or the Reserve Fund:




     (a) transfer to the Retirement Account for the redemption or purchase of, or the
distribution of principal with respect to, Notes;




     (b) the purchase of Notes in accordance with the provisions of Section 3.07 hereof;




     (c) transfer to the Acquisition Fund for the acquisition of Eligible Loans pursuant to
Section 4.02 hereof; or




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          (d) so long as no Event of Default has occurred and is continuing and the Asset Release
Requirement (or such different requirement set forth in a Rating Agency Confirmation) will
be met, paid to the Issuer on a quarterly basis in an amount equal to the Taxes which would
be theoretically incurred by the Issuer during the preceding calendar quarter; provided,
however, no amounts in the Surplus Fund shall be paid out for Taxes on amounts previously
released by the Trustee to the Issuer in accordance with this Section.



     Any amounts in the Surplus Fund shall, upon Issuer Order, be released to the Issuer free and
clear of the lien of this Indenture if, after taking into account any such release, the Asset
Release Requirement will be met. The Issuer Order requesting such release shall identify the
Senior Asset Percentage and the Subordinate Asset Percentage used in making the calculation of the
Asset Release Requirement and provide the Trustee with Issuer’s calculation of the Aggregate Value
of the assets held under the Indenture, the principal amount of all Notes Outstanding, the accrued
interest on Outstanding Senior Notes, the accrued Issuer Swap Payments with respect to Senior Swap
Agreements, the accrued fees with respect to Senior Credit Enhancement Facilities, the accrued
interest on all Outstanding Subordinate Notes, the accrued Issuer Swap Payments (other than with
respect to Junior Subordinate Swap Agreements), the accrued fees with respect to Credit Enhancement
Facilities (other than Junior Subordinate Credit Enhancement Facilities) and the Asset Release
Requirement. The Trustee shall verify the Asset Release Requirement using the numbers contained in
the Issuer Order requesting the release. Amounts in the Surplus Fund may also be released free and
clear of the lien of this Indenture to make indemnity payments required pursuant to the terms of
any Servicing Agreement, any Custodian Agreement, any Guaranty Agreement, the Trust Agreement, the
Eligible Lender Trust Agreement, any Auction Agency Agreement, any Note Purchase Agreement and the
Administration Agreement. The Trustee shall not release any moneys to the Issuer from the Surplus
Fund pursuant to this Section if there are any unpaid indemnification amounts due and owing.



     Pending application of moneys in the Surplus Fund, such moneys shall be invested in Investment
Securities as provided in Section 4.11 hereof, and any earnings on or income from such investments
shall be deposited in the Collection Fund as provided in Section 4.05 hereof.



     Section 4.08. Borrower Benefits Fund. An amount identified in the Eligible Loan Acquisition
Certificate equal to 1% of the original principal amount of each Consolidation Loan with an
interest rate of 5.00% or greater purchased with proceeds from the sale of the Series 2004-1 Notes
shall be transferred from the Acquisition Fund to the Borrower Benefits Fund on the purchase date.
Amounts on deposit in the Borrower Benefits Fund, unless released to the Collection Fund as
provided in this Section, shall be used solely for the payment of the Borrower Benefit on such
Consolidation Loans described in clause (a)(i) of the definition of “Borrower Benefits” contained
in Section 1 of the First Supplemental Indenture. Amounts on deposit in the Borrow Benefits Fund
shall be transferred upon Issuer Order to an entity acceptable to the Rating Agencies engaged by
the Issuer to disburse such funds to borrowers under such Consolidation Loans who have qualified
for the Borrower Benefit on such Consolidation Loans described in clause (a)(i) of the definition
of “Borrower Benefits” contained in Section 1 of the First Supplemental Indenture. Such Issuer
Order shall identify the amount to be transferred and the Consolidation Loans to which such
Borrower Benefit payments relate. Any amount returned by



50









 





the entity engaged by the Issuer to disburse such fund to borrowers under such Consolidation
Loans (due to the borrower under the Consolidation Loan not cashing his or her disbursement check
or otherwise) shall be deposited to the Borrower Benefits Fund and shall remain in the Borrower
Benefits Fund until the borrower under the related Consolidation Loan is unable to make a claim for
such moneys against the Issuer.




     Any amounts on deposit in the Borrower Benefits Fund which relate to Consolidation Loans for
which the borrower under such Consolidation Loans has failed to qualify for the Borrower Benefit on
such Consolidation Loans described in clause (a)(i) of the definition of “Borrower Benefits”
contained in Section 1 of the First Supplemental Indenture shall, upon Issuer Order, be transferred
to the Collection Fund. Such Issuer Order shall identify the amount to be transferred to the
Collection Fund and the Consolidation Loans to which such payments relate.



     Pending application of moneys in the Borrower Benefits Fund, such moneys shall be invested in
Investment Securities as provided in Section 4.11 hereof, and any earnings on or income from such
investments shall be deposited in the Collection Fund as provided in Section 4.05 hereof.



     Section 4.09. Termination. When no Notes remain Outstanding and no Other Obligations are
Outstanding, the Trustee shall transfer to the Issuer, or to the order of the Issuer, the Balances
in all Funds and Accounts if, and to the extent that, such Balances are in excess of amounts needed
to pay principal of, premium, if any, and interest on, and any Carry-Over Amounts (and accrued
interest thereon) due and payable with respect to the Notes, to satisfy any Other Obligations, and
to pay the fees, compensation and expenses of the Trustee and any Authenticating Agent, Note
Registrar, Remarketing Agents, Tender Agents, Auction Agents, Market Agents, Broker-Dealers and
Paying Agents. To the extent that such Balances are needed to pay such amounts or fees, the
Trustee shall retain such Balances hereunder and pay such amounts or fees to the Persons to whom
such amounts are due and payable as provided hereunder. In the event that any portion or all of
the Balances in the Funds and Accounts payable to the Issuer pursuant to this Section consist of
Investment Securities which are payable solely to the Trustee and cannot be effectively transferred
to the Issuer, the Trustee shall continue to hold such Investment Securities under this Indenture
on behalf of the Issuer until such time as such securities can be transferred to the Issuer or
amounts payable thereunder received, whether by acceleration at the option of the holder thereof,
at maturity or otherwise, all at the direction of an Authorized Officer of the Issuer.



     Section 4.10. Pledge. The Notes, including the principal thereof, premium, if any, and
interest thereon and any Carry-Over Amounts (and accrued interest thereon) with respect thereto,
and Other Obligations shall be limited obligations of the Issuer specifically secured as provided
in the Granting Clauses hereof. Financed Student Loans purchased with the proceeds of the Issuer’s
bonds, notes or other obligations as described in Section 4.02 hereof, or resold to a Lender
pursuant to its repurchase obligation, or sold or exchanged for Eligible Loans in accordance with
the provisions of Section 4.02 hereof, shall, contemporaneously with receipt by the Trustee of the
purchase price thereof in freely transferable funds, including any Eligible Loans to be received in
exchange therefor, no longer be pledged to nor serve as security for the principal of, premium, if
any, and interest on and any Carry-Over Amounts (and accrued interest



51









 





thereon) with respect to the Notes or any Other Obligations. Moneys paid out to the Issuer as
provided in Section 4.03 hereof for Costs of Issuance, Servicing Fees, Administration Fees, and
reimbursement for the prior payment of Note Fees, moneys on deposit in the Borrower Benefits Fund,
moneys released to the Issuer pursuant to Section 4.07 hereof, and other moneys applied as herein
provided shall, upon such payment, release, or application, no longer be pledged to nor serve as
security for the principal of, premium, if any, and interest on and any Carry-Over Amounts (and
accrued interest thereon) with respect to the Notes or any Other Obligations.




     The Issuer pledges and agrees with the Beneficiaries that the Issuer will not limit or alter
its powers to fulfill the terms of any agreements made in this Indenture or in any Notes or in any
way impair the rights and remedies of the Beneficiaries until the Notes, together with interest
thereon, including interest on any unpaid installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of the Holders and all amounts owing to
Other Beneficiaries, are fully met and discharged.



     The Notes, including the principal thereof, premium, if any, and interest thereon and any
Carry-Over Amounts (and accrued interest thereon) with respect thereto, and any Other Obligations
shall be secured hereunder by the foregoing pledge of the Financed Student Loans, revenues,
securities and other moneys hereby made, and by a lien thereon, subject to the priorities expressly
provided herein. The pledge in the Granting Clauses hereof shall constitute a prior and paramount
lien and charge on such Financed Student Loans, revenues, contract rights, securities and other
moneys from time to time held hereunder (subject only to the valid exercise of the constitutional
powers of the United States of America, valid bankruptcy, insolvency, reorganization, moratorium
and other laws affecting creditors’ rights, and to the provisions of this Indenture permitting the
application of such Financed Student Loans, revenues, securities and other moneys for the purposes
and on the terms and conditions hereof), over and ahead of any claims (whether in tort, contract or
otherwise irrespective of whether the parties possessing such claims have notice of the foregoing
pledges or charges), encumbrances or obligations of any nature hereafter arising or incurred, and
over and ahead of all other indebtedness payable from or secured by such revenues which may
hereafter be created or incurred. The pledge of such Financed Student Loans, revenues, securities
and other moneys made herein and hereby shall be valid and binding from the time of the delivery of
and payment for the first series of Notes issued hereunder, and such Financed Student Loans,
revenues, securities and other moneys shall thereupon be immediately subject to the lien, pledge
and charge hereof upon receipt thereof by the Issuer or Trustee, without any physical delivery or
segregation thereof or further act.



     No Beneficiary shall be required to see that the moneys derived from any Note are applied to
the purpose or purposes for which the Note is issued. The validity of the Notes shall neither be
dependent upon nor affected by the use and application of the proceeds of such Notes.



     The pledge of the Financed Student Loans, revenues, securities and other moneys made hereby
includes the pledge of any contract or any evidence of indebtedness or other rights of the Issuer
to receive any of the same, whether now existing or hereafter coming into existence, and whether
now or hereafter acquired, and the proceeds thereof.



     Section 4.11. Investments. Moneys held by the Trustee for the credit of any Fund or Account
shall be invested by the Trustee, in accordance with the Sections hereof relating to such



52









 





Funds and Accounts, as directed by the Issuer, to the fullest extent practicable and
reasonable, in Investment Securities which shall mature or be redeemable at the option of the
holder prior to the respective times when the moneys held for the credit of such Fund or Account
will be required for the purposes intended; provided, however, an amount equal to the interest due
on the next Interest Payment Date shall be held uninvested or shall be invested in Investment
Securities which shall mature or be redeemed no later than such Interest Payment Date.




     If the Issuer has not provided other investment directions to the Trustee, the moneys in the
Funds or Accounts shall be invested and reinvested by the Trustee in the Dreyfus Cash Management
Fund/Class ”B”. 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 combination thereof, and the Trustee
shall inform the Issuer of the details of all such investments. The Trustee shall 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 moneys to meet any payment from such Fund or
Account. The Trustee may purchase from or sell to itself or an affiliate, as principal or agent,
any Investment Securities. The Trustee shall advise the Issuer of all investments held for the
credit of each Fund or Account in its custody under the provisions of this Indenture as provided in
Section 7.14 hereof.



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



53









 






     (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




     (1) 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;




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




     (A) if a securities intermediary



54









 






     (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.



     Section 4.12. Transfer of Investment Securities. Whenever any transfer is required by this
Indenture to be made from any Fund or Account to any other Fund or Account, the Trustee may use
Investment Securities, or allocable portions thereof, included in the Balance of the former to the
extent necessary to make such transfer, but only to the extent such Investment Securities are
permissible investments for the Fund or Account to which they are to be transferred. The amount of
any such transfer of Investment Securities shall be the Value determined with respect thereto as of
the date of transfer.



55









 





     Section 4.13. Verification of Investment Securities. The Trustee shall verify as of each
January 1 and July 1 of each year that each investment of moneys within any Fund constitutes a
Permitted Investment.



ARTICLE V




COVENANTS TO SECURE NOTES, REPRESENTATIONS AND WARRANTIES




     Section 5.01. Eligible Lender Trustee to Hold Financed Student Loans. The Issuer shall cause
all Financed Student Loans to be endorsed and otherwise conveyed to the Issuer or the Eligible
Lender Trustee on behalf of the Issuer.



     Section 5.02. Enforcement and Amendment of Guarantee Agreements. So long as any Notes or
Other Obligations are Outstanding and Financed Eligible Loans are guaranteed by a Guarantee Agency,
the Issuer will (a) from and after the date on which the Eligible Lender Trustee on its behalf
shall have either entered into, or succeeded to the rights and interests of any Lender under, any
Guarantee Agreement covering Financed Eligible Loans, cause the Eligible Lender Trustee to maintain
such Guarantee Agreement and diligently enforce the Eligible Lender Trustee’s rights thereunder;
(b) cause the Eligible Lender Trustee to enter into such other similar or supplemental agreements
as shall be required to maintain benefits for all Financed Eligible Loans covered thereby; and (c)
not voluntarily consent to or permit any rescission of or consent to any amendment to or otherwise
take any action under or in connection with any such Guarantee Agreement or any similar or
supplemental agreement which in any manner will materially adversely affect the rights of the
Holders from time to time of the Notes or Other Beneficiaries hereunder. Notwithstanding the
foregoing, the Issuer may amend any Guarantee Agreement, or may cause the Eligible Lender Trustee
to amend any Guarantee Agreement, in any respect if a Rating Agency Confirmation is obtained with
respect to such amendment.



     Section 5.03. Acquisition, Collection and Assignment of Student Loans. The Issuer shall
acquire only Eligible Loans with moneys in any of the Funds and shall diligently cause to be
collected all principal and interest payments (subject to any adjustments described in Section 5.04
hereof) on all the Financed Student Loans and other sums to which the Issuer is entitled with
respect to such Financed Student Loans, and all Special Allowance Payments and all defaulted
payments guaranteed by any Guarantee Agency which relate to such Financed Student Loans.



     Section 5.04. Enforcement of Financed Student Loans. The Issuer shall cause to be diligently
enforced, and shall cause to be taken all steps, actions and proceedings reasonably necessary for
the enforcement of, all terms, covenants and conditions of all Financed Student Loans and
agreements in connection therewith, including the prompt payment of all principal and interest
payments (as such payments may be adjusted to take into account (a) any discount the Issuer may
cause to be made available to borrowers who make payments on Financed Student Loans through
automatic withdrawals; and (b) any reduction in the interest payable on Financed Student Loans
provided for in any borrower incentive or other special program under which such loans were
originated) and all other amounts due the Issuer thereunder. The Issuer shall not permit the
release of the obligations of any borrower under any Financed Student Loan and shall at all times,
to the extent permitted by law, cause to be defended, enforced, preserved



56









 





and protected the rights and privileges of the Issuer, the Eligible Lender Trustee, the
Trustee and the Beneficiaries under or with respect to each Financed Student Loan and agreement in
connection therewith. The Issuer shall not consent or agree to or permit any amendment or
modification of any Financed Student Loan or agreement in connection therewith which will in any
manner materially adversely affect the rights or security of the Beneficiaries; provided, that
nothing in this Section or in Sections 5.03 and 5.05 hereof shall be construed to prevent the
Issuer from (i) settling a default or from curing a delinquency on any Financed Student Loan on
such terms as shall be required by law; (ii) amending the terms of a Financed Student Loan to
provide for a different rate of interest thereon to the extent required by law; or (iii) amending
the terms of any Financed Student Loan or agreement in connection therewith in any manner if a
Rating Agency Confirmation is obtained with respect to such amendment.




     Section 5.05. Administration and Collection of Financed Student Loans. The Issuer shall
service and collect, or shall enter into one or more Servicing Agreements pursuant to which the
Servicers agree to service and collect, all Student Loans in accordance with all applicable
requirements of the Higher Education Act, the Secretary of Education and this Indenture, and each
Guarantee Agreement, provided that each such Servicer shall (i) be in compliance with the laws of
each state necessary to enable it to perform its obligations under the related Servicing Agreement;
and (ii) either have a net worth of at least $5,000,000 or be an affiliate of the Issuer. The
Issuer may enter into the Administration Agreement with the Issuer Administrator and into other
administration agreements with other administrators, provided that the Issuer Administrator and
each such other administrator shall (A) be in compliance with the laws of each state necessary to
enable it to perform its obligations under the Administration Agreement or related administration
agreement (as applicable); and (B) either have a net worth of at least $5,000,000 or be an
affiliate of the Issuer.



     The Issuer shall cause to be diligently enforced, and take all reasonable steps, actions and
proceedings necessary for the enforcement of, all terms, covenants and conditions of all Servicing
Agreements, the Administration Agreement, the Eligible Lender Trust Agreement, the Student Loan
Repurchase Agreement, any Student Loan Purchase Agreement and all other administration agreements,
including, in the case of the Servicing Agreements, the prompt payment of all principal and
interest payments and all other amounts due the Issuer or the Trustee thereunder, including all
Special Allowance Payments and all defaulted payments guaranteed by any Guarantee Agency which
relate to any Financed Student Loans. The Issuer shall not permit the release of the obligations
of any Servicer under any Servicing Agreement, the Eligible Lender Trustee under the Eligible
Lender Trust Agreement, SLCC under the Student Loan Repurchase Agreement, any parties to any
Student Loan Purchase Agreement or the Issuer Administrator or any other administrator under the
Administration Agreement or the related administration agreement, as applicable, except in
accordance with the terms thereof, and shall at all times, to the extent permitted by law, cause to
be defended, enforced, preserved and protected the rights and privileges of the Issuer, the Trustee
and the Beneficiaries under or with respect to each Servicing Agreement, the Administration
Agreement and each other administration agreement. The Issuer shall not consent or agree to or
permit any amendment or modification of any Servicing Agreement, the Administration Agreement, the
Eligible Lender Trust Agreement, the Student Loan Repurchase Agreement, any Student Loan Purchase
Agreement or any other administration agreement which will in any manner materially adversely
affect the rights or security of the Beneficiaries, unless, in the case of the Administration
Agreement or any other



57









 





administration agreement, the requisite amount of Beneficiaries vote in favor of such
amendment or modification in accordance with the terms thereof. Notwithstanding the foregoing, the
Issuer may amend, or cause the Eligible Lender Trustee to amend, any Servicing Agreement, the
Administration Agreement or any other administration agreement in any respect if a Rating Agency
Confirmation is obtained with respect to such amendment.




     Each Servicer may enter into Subservicing Agreements for any servicing and administration of
Financed Student Loans with any entity, upon receipt of a Rating Agency Confirmation. The Servicer
shall be entitled to terminate any Subservicing Agreement in accordance with the terms and
conditions of such Subservicing Agreement and to either itself directly service the related
Financed Student Loans or enter into a Subservicing Agreement with a successor subservicer.



     Section 5.06. Punctual Payments. The Issuer shall duly and punctually pay, or cause to be
paid, the principal of, premium, if any, and interest on and any Carry-Over Amount (and accrued
interest thereon) due and payable with respect to each and every Note and each Other Obligation
from the revenues and other assets pledged hereunder on the dates and at the places, and in the
manner provided, in the Notes and with respect to each Other Obligation according to the true
intent and meaning thereof, and the Issuer shall faithfully do and perform and at all times fully
observe and keep any and all of its covenants, undertakings, stipulations and provisions contained
in the Notes, the Other Obligations and this Indenture. The Issuer shall duly and punctually pay,
or cause to be paid, the Note Fees, Servicing Fees and Administration Fees from the revenues and
other assets pledged hereunder as and when the same become due in accordance with Section 4.03
hereof.



     Section 5.07. Further Assurances. Each of the Issuer and the Eligible Lender Trustee shall at
any and all times, insofar as it may be authorized so to do, pass, make, do, execute, acknowledge
and deliver all and every such further resolutions, indentures, acts, deeds, conveyances,
assignments, transfers and assurances as may be necessary or desirable for the better assuring,
conveying, granting, assigning and confirming any and all of the rights, revenues, securities and
other moneys hereby pledged or charged with or assigned to the payment of the Notes or Other
Obligations, or intended so to be, or which the Issuer and/or the Eligible Lender Trustee may
hereafter become bound to pledge or charge or assign.



     Section 5.08. Protection of Security; Power to Issue Notes and Pledge Revenues and Other
Funds. The Issuer is duly authorized under all applicable law to create and issue the Notes, to
enter into this Indenture, to enter into Other Obligations and to pledge the revenues and other
moneys, Financed Student Loans, securities, properties, rights, interests and evidences of
indebtedness purported to be pledged by this Indenture in the manner and to the extent provided in
this Indenture. The revenues and other moneys, securities, evidences of indebtedness and
properties so pledged are and will be free and clear of any pledge, lien, charge or encumbrance
thereon or with respect thereto prior to, or of equal rank with, the pledge 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. The Notes and the provisions of this Indenture, each
Supplemental Indenture and each Other Obligation are and will be valid and legally enforceable
obligations of the Issuer in accordance with their terms and the terms of this Indenture and each
Supplemental Indenture. The Issuer shall at all times, to the extent permitted by law, defend,



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preserve and protect the pledge of the revenues and other moneys, Financed Student Loans,
securities, properties, rights, interests and evidences of indebtedness pledged under this
Indenture and each Supplemental Indenture and all the rights of the Beneficiaries hereto against
all claims and demands of all Persons whomsoever.




     The pledge of the revenues and other moneys, Financed Student Loans, securities, properties,
rights, interests and evidences of indebtedness made hereby includes the pledge of any contract or
any evidence of indebtedness or other rights of the Issuer to receive any of the same, whether now
existing or hereafter coming into existence, and whether now or hereafter acquired, and the
proceeds thereof.



     In consideration of the purchase and acceptance of the Notes by those who shall hold the same
from time to time and the execution and delivery by Other Beneficiaries of any Other Obligations,
the provisions of this Indenture shall be a part of the contract of the Issuer with the
Beneficiaries and shall be deemed to be and shall constitute a contract between the Issuer, the
Trustee and the Beneficiaries.



     Section 5.09. No Encumbrances. The Issuer will not create, or permit the creation of, any
pledge, lien, charge or encumbrance upon the Financed Student Loans or the revenues and other
moneys, securities, properties, rights, interests and evidences of indebtedness pledged under this
Indenture, except only as to a lien subordinate to the lien of this Indenture created by any other
indenture authorizing the issuance of bonds, notes or other evidences of indebtedness of the Issuer
the proceeds of which have been or will be used to refund or otherwise retire all or a portion of
the Outstanding Notes (but only upon receipt by the Trustee of an opinion of Counsel that the
creation of such lien will not be prejudicial to the Trustee or the Holders of any Outstanding
Notes or any Other Beneficiary) or as otherwise provided in or permitted by this Indenture. The
Issuer will not issue any bonds or other evidences of indebtedness, other than the Notes as
permitted by this Indenture and other than Swap Agreements and Credit Enhancement Facilities
relating to Notes as permitted by this Indenture, secured by a pledge of the revenues and other
moneys, securities, properties, rights, interests and evidences of indebtedness herein pledged or
held aside by the Issuer or by a fiduciary under this Indenture, creating a lien or charge on such
revenues and other moneys, securities, properties, rights, interests and evidences of indebtedness
equal or superior to the lien of this Indenture; provided that nothing in this Indenture shall
prevent the Issuer from issuing obligations secured by assets and revenues of the Issuer other than
the revenues and other moneys, securities, properties, rights, interests and evidences of
indebtedness pledged in this Indenture.



     Section 5.10. Continuing Existence; Merger and Consolidation. The Issuer will maintain its
existence as a Delaware statutory trust and will not dispose of all or substantially all of its
assets (by sale, lease or otherwise), except as otherwise specifically authorized in this
Indenture, or consolidate with or merge into another entity or permit any other entity to
consolidate with or merge into it unless either the Issuer is the surviving entity or each of the
following conditions is satisfied:




     (a) the surviving, resulting or transferee entity, as the case may be, shall be a
corporation, limited liability company or other legal entity organized under the laws of the
United States or one of the states thereof;



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     (b) at least 30 days before any merger, consolidation or transfer of assets becomes
effective, the Issuer shall give the Trustee written notice of the proposed transaction;




     (c) immediately after giving effect to any merger, consolidation or transfer of assets,
no Event of Default shall have occurred and be continuing;




     (d) a Rating Agency Confirmation shall have been obtained with respect to any merger,
consolidation or transfer of assets; and




     (e) prior to or concurrently with any merger, consolidation or transfer of assets, (i)
any action as is necessary to maintain the lien and security interest created in favor of
the Trustee by this Indenture shall have been taken; (ii) the surviving, resulting or
transferee entity, as the case may be, shall deliver to the Trustee an instrument assuming
all of the obligations of the Issuer under this Indenture, any Notes, any Swap Agreement,
any Credit Enhancement Facility, any Remarketing Agreement, any Tender Agent Agreement, any
Auction Agent Agreement and any Servicing Agreement, together with the consent of the other
parties, if any, to each such instrument to such assumption; and (iii) the Issuer shall have
delivered to the Trustee and each Rating Agency an Issuer Certificate and an opinion of
Counsel (which shall describe the actions taken as required by clause (i) of this paragraph
or that no such action need be taken) each stating that all conditions precedent herein
provided for relating to such merger, consolidation or transfer of assets have been compiled
with.



     Section 5.11. Amendment of Remarketing Agreements and Tender Agent Agreements. The Issuer
shall notify the Trustee and any related Credit Facility Provider in writing of any proposed
amendments to any Remarketing Agreement or Tender Agent Agreement. No such amendment shall become
effective unless and until (a) the Trustee consents in writing thereto, which consent shall not be
given unless the Trustee receives an opinion of Counsel that such amendment is required by a Credit
Enhancement Facility or this Indenture or is not to the material prejudice of the Holders of the
Notes; and (b) any related Credit Facility Provider consents in writing thereto, which consent
shall not be unreasonably withheld, provided that no consent of the Credit Facility Provider shall
be required if the Credit Facility Provider receives an opinion of Counsel that such amendment is
required by this Indenture.



     Section 5.12. 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 will qualify as indebtedness of the Issuer. The Issuer, by entering into this
Indenture, and each Holder, by its acceptance of its Note, agree to treat the Notes for federal,
state and local income, business and franchise tax purposes as indebtedness of the Issuer.



     Section 5.13. Representations and Warranties of the Issuer. By execution of this Indenture,
the Issuer makes the following representations and warranties:




     (a) Organization and Good Standing. It has been duly organized and is validly existing
as a Delaware statutory trust, with power and authority to own its properties and to conduct
its business as such properties are currently owned and as such



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business is currently conducted and is proposed to be conducted pursuant to this
Indenture.





     (b) Power and Authority. It has the power and authority to execute and deliver this
Indenture and to perform its obligations pursuant thereto; and the execution, delivery and
performance of this Indenture, the Notes and each Other Obligation have been duly authorized
by all necessary corporate action.




     (c) No Consent Required. No consent, license, approval or authorization of, or
registration or declaration with, any Person or any governmental authority, bureau or agency
is required to be obtained by the Issuer in connection with the execution, delivery or
performance of this Indenture, the Notes or any Other Obligation, except for such as have
been obtained, effected or made.




     (d) No Violation. The consummation of the transactions contemplated by this Indenture,
the Notes and each Other Obligation and the fulfillment of its obligations under this
Indenture, the Notes and each Other Obligation will 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, its certificate of incorporation or bylaws, or any indenture,
agreement, mortgage, deed of trust or other instrument to which it is a party or by which it
is bound, or result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or violate any law, order, rule or regulation applicable to it of any court or
of any federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties.




     (e) No Proceedings. There are no proceedings or investigations pending or, to its
knowledge, threatened against it before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over it or its properties
(i) asserting the invalidity of this Indenture, any Note or any Other Obligation; (ii)
seeking to prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by this Indenture, any Note or any Other Obligation; or (iii) seeking any
determination or ruling that might materially and adversely affect its performance of its
obligations under, or the validity or enforceability of, this Indenture, any Note or any
Other Obligation.




     (f) Place of Business. The principal offices of the Issuer are in Newark, Delaware.




     (g) 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.




     (h) Binding Obligations. This Indenture, the Notes and each Other Obligation
constitutes the legal, valid and binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar



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laws now or hereafter in effect, affecting the enforcement of creditors’ rights in
general; and (ii) as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).




     (i) 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 Delaware)
in the Financed Student Loans in favor of the Trustee, and is enforceable as such against
any creditors of the Issuer.



     Section 5.14. Use of Trustee Eligible Lender Number. The Eligible Lender Trustee covenants
and agrees if it holds any other Student Loans under the federal eligible lender number under which
it holds any Financed Student Loans, the Eligible Lender Trustee shall segregate such Student Loans
and separately account for such Student Loans to the Issuer.



     Section 5.15. Additional Covenants. The Issuer covenants that it will acquire or cause to be
acquired Student Loans as described herein. The Holders of the Notes shall not in any
circumstances be deemed to be the owner or holder of the Financed Student Loan.



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




     (a) With respect to Financed Student Loans originated under the Higher Education Act,
the Issuer, or its designated agent, shall be responsible for dealing with the Secretary of
Education with respect to the rights, benefits and obligations under the certificates of
insurance and the contract of insurance with respect to Financed Student Loans originated
under the Higher Education Act, and the Issuer, or its designated agent, shall be
responsible for dealing with the Guarantee Agency with respect to the rights, benefits and
obligations under any Guarantee Agreement with respect to the Financed Student Loans.




     (b) With respect to Financed Student Loans originated under the Higher Education Act,
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 Higher Education Act
and any regulations or rulings thereunder, and with the provisions of any Guarantee
Agreement with respect to the Financed Student Loans.




     (c) The Issuer, or its designated agent, shall cause the benefits of the Guarantee
Agreements, the federal interest subsidy payments and the Special Allowance Payments to flow
to the Trustee.




     (d) 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.



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



     Section 5.16. Covenant Regarding Financed Student Loans. The Issuer hereby covenants that all
Student Loans to be acquired hereunder will meet the following:



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     (a) Each Student Loan is evidenced by an executed promissory note (which may be in
electronic form), which note is a valid and binding obligation of the borrower, enforceable
by or on behalf of the holder thereof in accordance with its terms, subject to bankruptcy,
insolvency and other laws relating to or affecting creditors’ rights.




     (b) The amount of the unpaid principal balance of each Student Loan is due and owing,
and no counterclaim, offset, defense or right to rescission exists with respect to any such
Student Loan which can be asserted and maintained or which, with notice, lapse of time, or
the occurrence or failure to occur of any act or event, could be asserted and maintained by
the borrower against the Issuer as assignee thereof. The Issuer shall take all reasonable
actions to assure that no maker of a Student Loan has or may acquire a defense to the
payment thereof.




     (c) No Student Loan has a payment that is more than 60 days overdue.




     (d) The Issuer has full right, title and interest in each Student Loan free and clear
of all liens, pledges or encumbrances whatsoever, and other than the security interest
granted to the Trustee hereunder, the Issuer has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Student Loans to any other Person.
The Issuer has not authorized the filing of and is not aware of any financing statements
against it that include a description of collateral covering the Student Loans, other than
any financing statement relating to the security interest granted to the Trustee hereunder
or any financing statement that has been terminated. The Issuer is not aware of any
judgment or tax lien filings against it.




     (e) Each Student Loan was made in compliance with all applicable local, state and
federal laws, rules and regulations, including, without limitation, all applicable
nondiscrimination, truth-in-lending, consumer credit and usury laws.




     (f) Except as otherwise approved in writing by each Credit Facility Provider, if any,
all loan documentation shall be delivered to a custodian (as custodian for the Trustee)
prior to payment of the purchase price of such Student Loan.




     (g) Each Student Loan is accruing interest (whether or not such interest is being paid
currently, either by the borrower or the Secretary of Education, or is being capitalized),
except as otherwise expressly permitted by this Indenture.




     (h) Each Student Loan constitutes an “instrument” as defined in the Uniform Commercial
Code as in effect in the State of Delaware.




     (i) The Issuer has received all consents and approvals required by the terms of each
Student Loan to the pledge of such Student Loan hereunder to the Trustee.




     (j) The Issuer has caused or will have caused, within ten days of the Closing Date, the
filing of all appropriate financing statements in the proper offices of all jurisdictions in
which filing is necessary under applicable law in order to perfect the security interest of
the Trustee in the Student Loans.



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     (k) The original executed copy of each promissory note that constitutes or evidences a
Student Loan will be delivered to the Custodian on behalf of and for the benefit of the
Trustee.




     (l) At the time each Student Loan is delivered to the Custodian, the Issuer will
receive a written acknowledgment from the Custodian that the Custodian is holding each
promissory note that constitutes or evidences a Student Loan solely on behalf of and for the
benefit of the Trustee.




     (m) The promissory notes that constitute or evidence the Student Loans will not have
any marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Trustee. All financing statements filed or to be
filed against the Issuer in favor of the Trustee in connection herewith describing the
Student Loans contain the following statement: “A purchase of or security interest in any
collateral described in this financing statement will violate the rights of the Trustee.”




     (n) Each Student Loan complies with the requirements of the Higher Education Act.



     Section 5.17. Opinions as to Trust Estate. On or before January 1 in each calendar year,
beginning in 2004, the Issuer will furnish to the Trustee an opinion of Counsel at the expense of
the Issuer 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 indentures
supplemental hereto and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is 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 indentures supplemental 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 January 1 in the following calendar year.



     Section 5.18. Representations of the Issuer Regarding the Trustee’s Security Interest.




     (a) This Indenture creates a valid and continuing security interest (as defined in the
applicable Uniform Commercial Code in effect in the State of Delaware) in the Trust Estate
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 Higher Education Act deems the Financed Eligible Loans to constitute “accounts”
within the meaning of the applicable UCC for 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 or claim of any Person.



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     (d) The Issuer has previously caused 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 under
this Indenture




     (e) All executed copies of each promissory note that constitute or evidence the
Financed Eligible Loans have been delivered to the Trustee (or its agent or bailee pursuant
to a Servicing Agreement or a Custodian Agreement).




     (f) 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 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 under this Indenture or that has
been terminated. The Issuer is not aware of any judgment or tax lien filings against the
Issuer.




     (g) The Issuer is an statutory trust organized solely under the laws of the State of
Delaware.



     Section 5.19. Covenants of the Issuer Regarding the Trustee’s Security Interest. The Issuer
hereby covenants for the benefit of the Trustee and the Registered Owners as follows:




     (a) None of the representations and warranties set forth in Section 5.18 hereof may be
waived by the Trustee.




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



ARTICLE VI




DEFAULTS AND REMEDIES




     Section 6.01. Events of Default. If any of the following events occur, it is hereby defined
as and declared to be and to constitute an Event of Default, whatever the reason therefor and
whether voluntary or involuntary or effected by operation of law:




     (a) default in the due and punctual payment of any interest on any Senior Note; or




     (b) default in the due and punctual payment of the principal of, or premium, if any,
on, any Senior Note, whether at the Stated Maturity thereof, at the date fixed for
prepayment thereof (including, but not limited to, Sinking Fund Payment Dates) or otherwise
upon the maturity thereof; or



65









 






     (c) default by the Issuer in its obligation to purchase any Senior Note on a Tender
Date therefor; or




     (d) default in the due and punctual payment of any amount owed by the Issuer to any
Other Senior Beneficiary under a Senior Swap Agreement or Senior Credit Enhancement
Facility; or




     (e) if no Senior Obligations are Outstanding, default in the due and punctual payment
of any interest on any Subordinate Note; or




     (f) if no Senior Obligations are Outstanding, default in the due and punctual payment
of the principal of, or premium, if any, on, any Subordinate Note, whether at the Stated
Maturity thereof, at the date fixed for prepayment thereof (including, but not limited to,
Sinking Fund Payment Dates) or otherwise upon the maturity thereof; or




     (g) if no Senior Obligations are Outstanding, default by the Issuer in its obligation
to purchase any Subordinate Note on a Tender Date therefor; or




     (h) if no Senior Obligations are Outstanding, default in the due and punctual payment
of any amount owed by the Issuer to any Other Subordinate Beneficiary under a Subordinate
Swap Agreement or Subordinate Credit Enhancement Facility; or




     (i) if no Senior Obligations and no Subordinate Obligations are Outstanding, default in
the due and punctual payment of any interest on any Junior Subordinate Note; or




     (j) if no Senior Obligations and no Subordinate Obligations are Outstanding, default in
the due and punctual payment of the principal of, or premium, if any, on, any Junior
Subordinate Note, whether at the Stated Maturity thereof, at the date fixed for prepayment
thereof (including, but not limited to, Sinking Fund Payment Dates) or otherwise upon the
maturity thereof; or




     (k) if no Senior Obligations and no Subordinate Obligations are Outstanding, default by
the Issuer in its obligation to purchase any Junior Subordinate Note on a Tender Date
therefor; or




     (l) if no Senior Obligations and no Subordinate Obligations are Outstanding, default in
the due and punctual payment of any amount owed by the Issuer to any Other Junior
Subordinate Beneficiary under a Junior Subordinate Swap Agreement or Junior Subordinate
Credit Enhancement Facility; or





     (m) default in the performance of any of the Issuer’s obligations with respect to the
transmittal of moneys to be credited to the Collection Fund, the Acquisition Fund or the
Debt Service Fund under the provisions hereof and such default shall have continued for a
period of thirty days; or




     (n) default in the performance or observance of any other of the covenants, agreements
or conditions on the part of the Issuer in this Indenture or in the Notes



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contained, and such default shall have continued for a period of thirty days after
written notice thereof, specifying such default, shall have been given to the Issuer by the
Trustee, which may give such notice in its discretion and shall give such notice at the
written request of the Acting Beneficiaries Upon Default); provided that, if the default is
such that it can be corrected, but not within such thirty days, it shall not constitute an
Event of Default if corrective action is instituted by the Issuer within such thirty days
and is diligently pursued until the default is corrected; or




     (o) if the Issuer shall:




     (i) admit in writing its inability to pay its debts generally as they become
due; or




     (ii) consent to the appointment of a custodian (as that term is defined in the
federal Bankruptcy Code) for or assignment to a custodian of the whole or any
substantial part of the Issuer’s property, or fail to stay, set aside or vacate
within 90 days from the date of entry thereof any order or decree entered by a court
of competent jurisdiction ordering such appointment or assignment; or




     (iii) commence any proceeding or file a petition under the provisions of the
federal Bankruptcy Code for liquidation, reorganization or adjustment of debts, or
under any insolvency law or other statute or law providing for the modification or
adjustment of the rights of creditors or fail to stay, set aside or vacate within 90
days from the date of entry thereof any order or decree entered by a court of
competent jurisdiction pursuant to an involuntary proceeding, whether under federal
or state law, providing for liquidation or reorganization of the Issuer or
modification or adjustment of the rights of creditors; or




     (p) there occurs the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust
Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing a receiver, liquidation,
assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Trust Estate, or ordering the winding-up or liquidation of the
Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period
of 90 consecutive days.



     Section 6.02. Acceleration. Whenever any Event of Default described in Section 6.01 hereof
shall have occurred and be continuing, the Trustee may (and upon the written request of the Acting
Beneficiaries Upon Default, the Trustee shall), by notice in writing delivered to the Issuer,
declare the principal of and interest accrued on all Notes then Outstanding due and payable. A
copy of such notice shall also be provided to any Tender Agent, any Remarketing Agent, any Auction
Agent, any Market Agent and any Broker-Dealer. In the event that the Trustee shall declare the
principal of and interest accrued on all Notes then Outstanding due and payable in accordance with
this Section, such principal and interest shall become immediately due and payable on the date of
declaration. At any time after such a declaration of acceleration has been made, but before a
judgment or decree for payment of the money due has been obtained



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by the Trustee, the Acting Beneficiaries Upon Default may, by written notice to the Issuer and
the Trustee, rescind and annul such declaration and its consequences if:





     (a) There has been paid to or deposited with the Trustee by or for the account of the
Issuer, or provision satisfactory to the Trustee has been made for the payment of, a sum
sufficient to pay:




     (i) if Senior Obligations are Outstanding:




     (A) all overdue installments of interest on all Senior Notes;




     (B) the principal of (and premium, if any, on) any Senior Notes which
have become due otherwise than by such declaration of acceleration, together
with interest thereon at the rate or rates borne by such Senior Notes;




     (C) to the extent that payment of such interest is lawful, interest
upon overdue installments of interest on the Senior Notes at the rate or
rates borne by such Senior Notes;




     (D) all Other Senior Obligations which have become due other than as a
direct result of such declaration of acceleration;




     (E) all other sums required to be paid to satisfy the Issuer’s
obligations with respect to the transmittal of moneys to be credited to the
Collection Fund, the Acquisition Fund and the Interest Account under the
provisions of this Indenture; and




     (F) all sums paid or advanced by the Trustee under this Indenture and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any Paying Agents, Remarketing Agents,
Tender Agents, Auction Agents, Market Agents and Broker-Dealers; or




     (ii) if no Senior Obligations are Outstanding but Subordinate Obligations are
Outstanding:




     (A) all overdue installments of interest on all Subordinate Notes;




     (B) the principal of (and premium, if any, on) any Subordinate Notes
which have become due other than by such declaration of acceleration,
together with interest thereon at the rate or rates borne by such
Subordinate Notes;




     (C) to the extent that payment of such interest is lawful, interest
upon overdue installments of interest on the Subordinate Notes at the rate
or rates borne by such Subordinate Notes;



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     (D) all Other Subordinate Obligations which have become due otherwise
as a direct result of such declaration of acceleration;




     (E) all other sums required to be paid to satisfy the Issuer’s
obligations with respect to the transmittal of moneys to be credited to the
Collection Fund, the Acquisition Fund and the Interest Account under the
provisions of this Indenture; and




     (F) all sums paid or advanced by the Trustee under this Indenture and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any Paying Agents, Remarketing Agents,
Tender Agents, Auction Agents and Broker-Dealers; or




     (iii) if no Senior Obligations and no Subordinate Obligations are Outstanding
but Junior Subordinate Notes are Outstanding:




     (A) all overdue installments of interest on all Junior Subordinate
Notes;




     (B) the principal of (and premium, if any, on) any Junior Subordinate
Notes which have become due other than by such declaration of acceleration,
together with interest thereon at the rate or rates borne by such Junior
Subordinate Notes;




     (C) to the extent that payment of such interest is lawful, interest
upon overdue installments of interest on the Junior Subordinate Notes at the
rate or rates borne by such Junior Subordinate Notes;




     (D) all Other Junior Subordinate Obligations which have become due
otherwise as a direct result of such declaration of acceleration;




     (E) all other sums required to be paid to satisfy the Issuer’s
obligations with respect to the transmittal of moneys to be credited to the
Collection Fund, the Acquisition Fund and the Interest Account under the
provisions of this Indenture; and




     (F) all sums paid or advanced by the Trustee under this Indenture and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any Paying Agents, Remarketing Agents,
Tender Agents, Auction Agents and Broker-Dealers.




     (b) All Events of Default, other than the non-payment of the principal of Notes or
Other Obligations which have become due solely by, or as a direct result of, such
declaration of acceleration, have been cured or waived as provided in Section 6.13 hereof.



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     No such rescission and annulment shall affect any subsequent default or impair any right
consequent thereon.



     Section 6.03. Other Remedies; Rights of Beneficiaries. If an Event of Default has occurred
and is continuing, the Trustee may (a) institute judicial proceedings in its own name and as or on
behalf of a trustee of an express trust for the collection of all amounts then payable on the Notes
and any Other Obligations or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon
such Notes and Other Obligations moneys adjudged due; and (b) pursue any other available remedy by
suit at law or in equity to enforce the covenants of the Issuer herein, including, without
limitation, any remedy of a secured party under the Delaware Uniform Commercial Code, foreclosure
and mandamus, and may pursue such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce, or aid in the protection and enforcement of, the covenants and
agreements herein.



     If an Event of Default shall have occurred and is continuing, and if it shall have been
requested so to do by the Acting Beneficiaries Upon Default and shall have been indemnified as
provided in Section 7.01 hereof, the Trustee shall be obliged to exercise such one or more of the
rights and powers conferred by this Section as the Trustee, being advised by its Counsel, shall
deem most expedient in the interests of the Beneficiaries; provided, however, that the Trustee
shall have the right to decline to comply with any such request if the Trustee shall be advised by
Counsel that the action so requested may not lawfully be taken or if the Trustee receives, before
exercising such right or power, contrary instructions from the Acting Beneficiaries Upon Default.



     Notwithstanding any other provisions of this Article, if an “Event of Default” (as defined
therein) occurs under a Swap Agreement or a Credit Enhancement Facility and, as a result, the Other
Beneficiary that is a party thereto is entitled to exercise one or more remedies thereunder, such
Other Beneficiary may exercise such remedies, including, without limitation, the termination of
such agreement, as provided therein, in its own discretion; provided that the exercise of any such
remedy shall not adversely affect the legal ability of the Trustee or Acting Beneficiaries Upon
Default to exercise any remedy available hereunder.



     No remedy by the terms of this Indenture conferred upon or reserved to the Trustee or to the
Beneficiaries is intended to be exclusive of any other remedy, but each and every such remedy shall
be cumulative and shall be in addition to any other remedy given to the Trustee or to the
Beneficiaries hereunder or now or hereafter existing at law or in equity or by statute. The
assertion or employment of any right or remedy hereunder shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.



     No delay or omission to exercise any right or power accruing upon any Event of Default shall
impair any such right or power or shall be construed to be a waiver of any such Event of Default or
acquiescence therein; and every such right and power may be exercised from time to time and as
often as may be deemed expedient by the Trustee or the Acting Beneficiaries Upon Default, as the
case may be.



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     The Issuer covenants that if an Event of Default shall have happened and shall not have been
remedied, the Issuer will continue to account, as a trustee of an express trust, for all other
money, securities and property pledged under this Indenture.



     Section 6.04. Direction of Proceedings by Acting Beneficiaries Upon Default. The Acting
Beneficiaries Upon Default 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; provided that (a) such direction shall not be otherwise than in accordance with the
provisions of law and of this Indenture; (b) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders of Notes or Other Beneficiaries not taking
part in such direction, other than by effect of the subordination of any of their interests
hereunder; and (c) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.



     Section 6.05. Waiver of Stay or Extension Laws. To the extent that such rights may lawfully
be waived, neither the Issuer nor anyone claiming through it or under it shall or will set up,
claim, or seek to take advantage of any stay or extension laws now or hereafter in force, which may
affect the covenants or agreements contained in this Indenture, or in the Notes, and the Issuer,
for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully
may do so, the benefit of all such laws.



     Section 6.06. Application of Moneys. All moneys received by the Trustee pursuant to any right
given or action taken under the provisions of this Article shall, after, except as otherwise
provided in a Supplemental Indenture, payment of the cost and expenses of the proceedings resulting
in the collection of such moneys and of the expenses, liabilities and advances incurred or made by
the Trustee with respect thereto and the payment of Servicing Fees (provided that any moneys or
Investment Securities held pursuant to Section 9.01 hereof with respect to Notes no longer deemed
Outstanding hereunder shall not be available for, nor be applied to, the payment of any such costs,
expenses, liabilities, advances or Servicing Fees), be applied as follows (except that moneys
received with respect to Credit Enhancement Facilities shall be applied only to the purposes for
which such Credit Enhancement Facilities were provided, and shall be so applied prior to the
application of other moneys as provided in this Section):




     (a) Unless the principal of all the Outstanding Notes shall have become or shall have
been declared due and payable, all such moneys shall be applied:




     (i) to the payment to the Senior Beneficiaries of all installments of principal
and interest then due on the Senior Notes and all Other Senior Obligations (except
termination payments due under Swap Agreements as a result of Swap Counterparty
default), and if the amount available shall not be sufficient to pay all such
amounts in full, then to the payment ratably, in proportion to the amounts due,
without regard to due date, to the Holders of Senior Notes and to each Other Senior
Beneficiary, without any discrimination or preference (provided, that the Trustee
shall apply the amount so apportioned to the Holders of Senior Notes, as follows:



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     (A) to the payment of all installments of interest (other than interest
on overdue principal) then due and payable in the order in which such
installments became due and payable, and if the amount available shall not
be sufficient to pay in full any particular installment, then to the
payment, ratably, according to the amounts due on such installment and other
amounts, to the Holders of Senior Notes entitled thereto, without any
discrimination or preference, and




     (B) to the payment of the unpaid principal of any of the Senior Notes
which shall have become due and payable (other than Senior Notes called for
redemption for the payment of which money is held pursuant to the provisions
of this Indenture) in the order of their stated payment dates, with interest
on the Principal Amount of such Notes at the respective rates specified
therein from the respective dates upon which such Senior Notes became due
and payable, and, if the amount available shall not be sufficient to pay in
full the principal of the Senior Notes by their stated terms due and payable
on any particular date, then to the payment of such principal, ratably,
according to the amount of such principal then due on such date, to the
Holders of Senior Notes entitled thereto without any discrimination or
preference);




     (ii) (but only if the Senior Asset Percentage would be at least 100% upon the
application of such amounts or if there are no Senior Notes Outstanding), to the
payment to the Subordinate Beneficiaries of all installments of principal and
interest then due on the Subordinate Notes and all Other Subordinate Obligations
(except termination payments due under Swap Agreements as a result of Swap
Counterparty default), and if the amount available shall not be sufficient to pay
all such amounts in full, then to the payment ratably, in proportion to the amounts
due, without regard to due date, to the Holders of Subordinate Notes and to each
Other Subordinate Beneficiary, without any discrimination or preference (provided,
that the Trustee shall apply the amount so apportioned to the Holders of Subordinate
Notes, as follows:




     (A) to the payment of all installments of interest (other than interest
on overdue principal) then due and payable in the order in which such
installments became due and payable, and if the amount available shall not
be sufficient to pay in full any particular installment, then to the
payment, ratably, according to the amounts due on such installment and other
amounts, to the Holders of Subordinate Notes entitled thereto, without any
discrimination or preference, and




     (B) to the payment of the unpaid principal of any of the Subordinate
Notes which shall have become due and payable (other than Subordinate Notes
called for redemption for the payment of which money is held pursuant to the
provisions of this Indenture) in the order of their stated payment dates,
with interest on the Principal Amount of such Notes at the respective rates
specified therein from the respective dates upon



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which such Subordinate Notes became due and payable, and, if the amount
available shall not be sufficient to pay in full the principal of the
Subordinate Notes by their stated terms due and payable on any particular
date, then to the payment of such principal, ratably, according to the
amount of such principal then due on such date, to the Holders of
Subordinate Notes entitled thereto without any discrimination or
preference);




     (iii) (but only if the Subordinate Asset Percentage would be at least 100% upon
the application of such amounts or if there are no Senior Notes or Subordinate Notes
Outstanding), to the payment to the Junior Subordinate Beneficiaries of all
installments of principal and interest then due on the Junior Subordinate Notes and
all Other Junior Subordinate Obligations (except termination payments due under Swap
Agreements as a result of Swap Counterparty default), and if the amount available
shall not be sufficient to pay all such amounts in full, then to the payment
ratably, in proportion to the amounts due, without regard to due date, to the
Holders of Junior Subordinate Notes and to each Other Junior Subordinate
Beneficiary, without any discrimination or preference (provided, that the Trustee
shall apply the amount so apportioned to the Holders of Junior Subordinate Notes, as
follows:




     (A) to the payment of all installments of interest (other than interest
on overdue principal) then due and payable in the order in which such
installments became due and payable, and if the amount available shall not
be sufficient to pay in full any particular installment, then to the
payment, ratably, according to the amounts due on such installment and other
amounts, to the Holders of Junior Subordinate Notes entitled thereto,
without any discrimination or preference, and




     (B) to the payment of the unpaid principal of any of the Junior
Subordinate Notes which shall have become due and payable (other than Junior
Subordinate Notes called for redemption for the payment of which money is
held pursuant to the provisions of this Indenture) in the order of their
stated payment dates, with interest on the Principal Amount of such Notes at
the respective rates specified therein from the respective dates upon which
such Junior Subordinate Notes became due and payable, and, if the amount
available shall not be sufficient to pay in full the principal of the Junior
Subordinate Notes by their stated terms due and payable on any particular
date, then to the payment of such principal, ratably, according to the
amount of such principal then due on such date, to the Holders of Junior
Subordinate Notes entitled thereto without any discrimination or
preference);




     (iv) to the payment of the Holders of the Senior Notes of all Carry-Over
Amounts (together with interest thereon) then due and payable in the order in which
such amounts became due and payable, and if the amount available shall not be
sufficient to pay in full all such Carry-Over Amounts (and interest thereon)



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which became due and payable on any particular date, then to the payment,
ratably, according to the amounts due on such date, to the Holders of Senior Notes
entitled thereto, without any discrimination or preference;




     (v) (but only if the Senior Asset Percentage would be at least 100% upon the
application of such amounts or if there are no Senior Notes Outstanding), to the
payment to the Holders of the Subordinate Notes of all Carry-Over Amounts (together
with interest thereon) then due and payable in the order in which such amounts
became due and payable, and if the amount available shall not be sufficient to pay
in full all such Carry-Over Amounts (and interest thereon) which became due and
payable on any particular date, then to the payment, ratably, according to the
amounts due on such date, to the Holders of Subordinate Notes entitled thereto,
without any discrimination or preference;




     (vi) (but only if the Subordinate Asset Percentage would be at least 100% upon
the application of such amounts or if there are no Senior Notes or Subordinate Notes
Outstanding), to the payment to the Holders of the Junior Subordinate Notes of all
Carry-Over Amounts (together with interest thereon) then due and payable in the
order in which such amounts became due and payable, and if the amount available
shall not be sufficient to pay in full all such Carry-Over Amounts (and interest
thereon) which became due and payable on any particular date, then to the payment,
ratably, according to the amounts due on such date, to the Holders of Junior
Subordinate Notes entitled thereto, without any discrimination or preference;




     (vii) to the payment of termination payments then due and payable to Swap
Counterparties under Senior Swap Agreements as a result of Swap Counterparty
default, in the order in which such termination payments became due and payable, and
if the amount available shall not be sufficient to pay in full all such termination
payments which became due and payable on any particular date, then to the payment,
ratably, according to the amounts due on such date, to the Senior Swap
Counterparties entitled thereto, without any discrimination or preference;




     (viii) (but only if the Senior Asset Percentage would be at least 100% upon the
application of such amounts or if there are no Senior Notes Outstanding), to the
payment of termination payments then due and payable to Swap Counterparties under
Subordinate Swap Agreements as a result of Swap Counterparty default, in the order
in which such termination payments became due and payable, and if the amount
available shall not be sufficient to pay in full all such termination payments which
became due and payable on any particular date, then to the payment, ratably,
according to the amounts due on such date, to the Subordinate Swap Counterparties
entitled thereto, without any discrimination or preference; and




     (ix) (but only if the Subordinate Asset Percentage would be at least 100% upon
the application of such amounts or if there are no Senior Notes or



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Subordinate Notes Outstanding), to the payment of termination payments then due
and payable to Swap Counterparties under Junior Subordinate Swap Agreements as a
result of Swap Counterparty default, in the order in which such termination payments
became due and payable, and if the amount available shall not be sufficient to pay
in full all such termination payments which became due and payable on any particular
date, then to the payment, ratably, according to the amounts due on such date, to
the Junior Subordinate Swap Counterparties entitled thereto, without any
discrimination or preference.




     (b) If the principal of all Outstanding Notes shall have become due or shall have been
declared due and payable and such declaration has not been annulled and rescinded under the
provisions of this Article, all such moneys shall be applied, as follows:




     (i) to the payment to the Senior Beneficiaries of the principal and interest
then due and unpaid upon the Senior Notes and all Other Senior Obligations (except
termination payments due under Swap Agreements as a result of Swap Counterparty
default), without preference or priority of principal over interest or of interest
over principal, or of any installment of interest over any other installment of
interest, or of any Senior Beneficiary over any other Senior Beneficiary, ratably,
according to the amounts due, to the Persons entitled thereto without any
discrimination or preference;




     (ii) to the payment to the Subordinate Beneficiaries of the principal and
interest then due and unpaid upon the Subordinate Notes and all Other Subordinate
Obligations (except termination payments due under Swap Agreements as a result of
Swap Counterparty default), without preference or priority of principal over
interest or of interest over principal, or of any installment of interest over any
other installment of interest, or of any Subordinate Beneficiary over any other
Subordinate Beneficiary, ratably, according to the amounts due, to the Persons
entitled thereto without any discrimination or preference;




     (iii) to the payment to the Junior Subordinate Beneficiaries of the principal
and interest then due and unpaid upon the Junior Subordinate Notes and all Other
Junior Subordinate Obligations (except termination payments due under Swap
Agreements as a result of Swap Counterparty default), without preference or priority
of principal over interest or of interest over principal, or of any installment of
interest over any other installment of interest, or of any Junior Subordinate
Beneficiary over any other Junior Subordinate Beneficiary, ratably, according to the
amounts due, to the Persons entitled thereto without any discrimination or
preference;




     (iv) to the payment of the Holders of the Senior Notes of all Carry-Over
Amounts (together with interest thereon) then due and unpaid, without any preference
or priority of Carry-Over Amounts over interest thereon or of interest thereon over
Carry-Over Amounts, ratably, according to the amounts due, to the



75









 






Holders of Senior Notes entitled thereto, without any discrimination or
preference;




     (v) to the payment to the Holders of the Subordinate Notes of all Carry-Over
Amounts (together with interest thereon) then due and unpaid, without any preference
or priority of Carry-Over Amounts over interest thereon or of interest thereon over
Carry-Over Amounts, ratably, according to the amounts due, to the Holders of
Subordinate Notes entitled thereto, without any discrimination or preference;




     (vi) to the payment to the Holders of the Junior Subordinate Notes of all
Carry-Over Amounts (together with interest thereon) then due and unpaid, without any
preference or priority of Carry-Over Amounts over interest thereon or of interest
thereon over Carry-Over Amounts, ratably, according to the amounts due, to the
Holders of Junior Subordinate Notes entitled thereto, without any discrimination or
preference;




     (vii) to the payment of termination payments then due and unpaid to Swap
Counterparties under Senior Swap Agreements as a result of Swap Counterparty
default, ratably, according to the amounts due on such date, to the Senior Swap
Counterparties entitled thereto, without any discrimination or preference;




     (viii) to the payment of termination payments then due and unpaid to Swap
Counterparties under Subordinate Swap Agreements as a result of Swap Counterparty
default, ratably, according to the amounts due on such date, to the Subordinate Swap
Counterparties entitled thereto, without any discrimination or preference; and




     (ix) to the payment of termination payments then due and unpaid to Swap
Counterparties under Junior Subordinate Swap Agreements as a result of Swap
Counterparty default, ratably, according to the amounts due on such date, to the
Junior Subordinate Swap Counterparties entitled thereto, without any discrimination
or preference.




     (c) If the principal of all the Outstanding Notes shall have been declared due and
payable and if such declaration shall thereafter have been rescinded and annulled under the
provisions of Section 6.02 hereof, then (subject to the provisions of paragraph (b) of this
Section, in the event that the principal of all the Outstanding Notes shall later become or
be declared due and payable) the money held by the Trustee hereunder shall be applied in
accordance with the provisions of paragraph (a) of this Section.



     Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section,
such moneys shall be applied by it at such times, and from time to time, as the Trustee shall
determine, having due regard to the amount of such moneys available for application and the
likelihood of additional moneys becoming available for such application in the future.



76









 





Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest
Payment Date unless it shall deem another date more suitable) upon which such application is to be
made and upon such date interest on the amounts of principal to be paid shall cease to accrue. The
Trustee shall give such notice as it may deem appropriate of the deposits with it of any such
moneys and of the fixing of any such date, and shall not be required to make payment to the Holder
of any unpaid Note until such Note shall be presented to the Trustee for appropriate endorsement or
for cancellation if fully paid.




     Whenever all Notes and interest thereon and all Other Obligations have been fully paid under
the provisions of this Section, and all expenses and charges of the Trustee have been paid, the
Issuer and the Trustee shall be restored to their former positions hereunder.



     Section 6.07. Remedies Vested in Trustee. All rights of action, including the right to file
proof of claims under this Indenture or under any of the Notes may be enforced by the Trustee
without the possession of any of the Notes or the production thereof in any trial or other
proceedings relating thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any
Beneficiaries, and any recovery of judgment shall be for the equal benefit of all Beneficiaries in
respect of which such judgment has been recovered.



     Section 6.08. Limitation on Suits by Beneficiaries. Except as may be permitted in a
Supplemental Indenture with respect to an Other Beneficiary, no Holder of any Note or Other
Beneficiary shall have any right to institute any suit, action or proceeding in equity or at law
for the enforcement of this Indenture or for the execution of any trust hereof or for the
appointment of a receiver or any other remedy hereunder unless (a) an Event of Default shall have
occurred and be continuing; (b) the Acting Beneficiaries Upon Default shall have made written
request to the Trustee; (c) such Beneficiary or Beneficiaries shall have offered to the Trustee
indemnity, as provided in Section 7.01 hereof; (d) the Trustee shall have thereafter failed for a
period of 60 days after the receipt of the request and indemnification or refused to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in its own name; and
(e) no direction inconsistent with such written request shall have been given to the Trustee during
such 60-day period by the Holders of not less than a majority in aggregate Principal Amount of the
Notes then Outstanding or by any Other Beneficiary; it being understood and intended that no one or
more Holders of the Notes or any Other Beneficiary shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien of this Indenture by his, her, its or their action or to
enforce any right hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, had and maintained in the manner herein provided and for the
benefit of the Holders of all Outstanding Notes and Other Beneficiaries hereunder as their
interests may appear hereunder; provided, however, that, notwithstanding the foregoing provisions
of this Section 6.08, the Acting Beneficiaries Upon Default may institute any such suit, action or
proceeding in their own names for the benefit of the Holders of all Outstanding Notes and Other
Beneficiaries hereunder.



     Section 6.09. Unconditional Right of Holders To Enforce Payment. Notwithstanding any other
provision in this Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of, premium, if any, and interest on such Note
in accordance with the terms thereof and hereof and, upon the occurrence of an



77









 





Event of Default with respect thereto, to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such Holder.




     Section 6.10. Trustee May File Proofs of Claims. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Issuer or the property of the Issuer, the Trustee (irrespective
of whether the principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the
Issuer for the payment of overdue principal 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 of principal, premium, if any, and
interest owing and unpaid in respect of the Notes then Outstanding 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, its agents and Counsel and any Paying Agents, Authenticating
Agents, Note Registrar, Remarketing Agents, Tender Agents, Auction Agents, Market Agents and
Broker-Dealers) and of the Beneficiaries allowed in such judicial proceeding, and




     (b) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same;



     and any receiver, assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses and
disbursements of the Trustee, its agents and Counsel and any Paying Agents, Authenticating Agents,
Note Registrar, Remarketing Agents, Tender Agents, Auction Agents, Market Agents and
Broker-Dealers.



     Nothing herein shall affect the right of any Paying Agent, Authenticating Agent, Note
Registrar, Remarketing Agent, Tender Agent, Auction Agent, Market Agent or Broker-Dealer to file
proofs of claim on their own behalf in any such proceeding.



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



     Section 6.11. Undertaking for Costs. The Issuer and the Trustee agree, and each Holder of any
Note by his, her or its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable attorneys fees,




78









 





against any party litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this Section shall not apply
to (a) any suit instituted by the Trustee; (b) any suit instituted by any Holder, or group of
Holders, in each case holding in the aggregate more than 10% of the Outstanding Principal Amount of
the Notes; or (c) any suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Note in accordance with Section 6.09 hereof.




     Section 6.12. Termination of Proceedings. In case the Trustee or any Beneficiary shall have
proceeded to enforce any right under this Indenture by the appointment of a receiver, or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee or such Beneficiary, then and in every such case the Issuer and
the Trustee or such Beneficiary shall, subject to any final determination in such proceedings, be
restored to their former positions and rights hereunder with respect to this Indenture, and all
rights, remedies and powers of the Trustee and the Beneficiaries shall continue as if no such
proceedings had been taken.



     Section 6.13. Waiver of Defaults and Events of Default. The Trustee shall, unless the Trustee
has declared the principal of and interest on all Outstanding Notes immediately due and payable in
accordance with Section 6.02 hereof and a judgment or decree for payment of the money due has been
obtained by the Trustee, waive any default or Event of Default hereunder and its consequences but
only upon written request of the Acting Beneficiaries Upon Default; provided, however, that there
shall not be waived (a) any Event of Default arising from the acceleration of the maturity of the
Notes, except upon the rescission and annulment of such declaration as described in Section 6.02
hereof; (b) any Event of Default in the payment when due of any amount owed to any Beneficiary
(including payment of principal of or interest on any Note) except with the consent of such
Beneficiary or unless, prior to such waiver, the Issuer has paid or deposited (or caused to be paid
or deposited) with the Trustee a sum sufficient to pay all amounts owed to such Beneficiary
(including, to the extent permitted by law, interest upon overdue installments of interest); (c)
any Event of Default arising from the failure of the Issuer to pay unpaid expenses of the Trustee,
its agents and counsel, and any Authenticating Agent, Paying Agents, Note Registrar, Remarketing
Agents, Tender Agents, Auction Agents, Market Agents and Broker-Dealers as required by this
Indenture, unless, prior to such waiver, the Issuer has paid or deposited (or caused to be paid or
deposited) with the Trustee sums required to satisfy such obligations of the Issuer under the
provisions of this Indenture; or (d) any default in respect of a covenant or provision hereof
which, under Article VIII hereof, cannot be modified or amended without the consent of the Holder
of each Note affected thereby. No such waiver shall extend to any subsequent or other default or
Event of Default, or impair any right consequent thereon.



     Section 6.14. Inspection of Books and Records. The Issuer covenants that if an Event of
Default shall have happened and shall not have been remedied, the books of record and account of
the Issuer relating to the Financed Student Loans and the Trust Estate, shall at all times be
subject to the inspection and use of the Trustee and any Holder of at least 25% of the Principal
Amount of the Notes Outstanding and of their respective agents and attorneys.



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ARTICLE VII




FIDUCIARIES




     Section 7.01. Acceptance of the Trustee. 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 to the requirements of this Indenture.




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




     (c) No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:




     (i) this subsection (c) shall not be construed to limit the effect of
subsection (a) of this Section;




     (ii) the Trustee shall not be liable for any error of judgment made in good
faith, unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;




     (iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Acting Beneficiaries Upon Default 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; and




     (iv) no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if it



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shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it.




     (d) The Trustee may execute any of the trusts or powers hereof and perform any of its
duties by or through attorneys, agents, receivers, or employees but shall be answerable for
the conduct of the same in accordance with the standard specified in subsection (b) above,
and shall be entitled to advice of Counsel concerning all matters of trusts hereof and
duties hereunder, and may in all cases pay such reasonable compensation to any attorney,
agent, receiver or employee retained or employed by it in connection herewith. The Trustee
may act upon the opinion or advice of any Counsel or accountant selected by it in the
exercise of reasonable care. The Trustee shall not be responsible for any loss or damage
resulting from any action or inaction based on its good faith reliance upon such opinion or
advice.




     (e) The Trustee shall not be responsible for any recital herein or in the Notes (except
with respect to the certificate of the Trustee endorsed on the Notes), or for the filing or
refiling of this Indenture, or for the validity of the execution by the Issuer of this
Indenture, or of any Supplemental Indenture or instrument of further assurance, or for the
sufficiency of the security for the Notes issued hereunder or intended to be secured hereby.




     (f) The Trustee shall not be accountable for the use or application by the Issuer of
any of the Notes or the proceeds thereof or for the use or application of any money paid
over by the Trustee in accordance with the provisions of this Indenture or for the use and
application of money received by any Paying Agent.




     (g) The Trustee shall be protected in acting upon any notice, order, requisition,
request, consent, certificate, order, opinion (including an opinion of Counsel), affidavit,
letter, telegram or other paper or document in good faith deemed by it to be genuine and
correct and to have been signed or sent by the proper person or persons. Any action taken
by the Trustee pursuant to this Indenture upon the request or authority or consent of any
person who at the time of making such request or giving such authority or consent is the
Holder of any Note shall be conclusive and binding upon all future Holders of the same Note
and Notes issued in exchange therefor or in place thereof.




     (h) As to the existence or nonexistence of any fact or as to the sufficiency or
authenticity of any instrument, paper or proceeding, the Trustee shall be entitled to rely
upon an Issuer Certificate as sufficient evidence of the facts stated therein.




     (i) At any and all reasonable times, the Trustee, and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives, shall have the right fully
to inspect all books, papers and records of the Issuer pertaining to the Financed Student
Loans, and to take such memoranda from and in regard thereto as may be desired.




     (j) The Trustee shall not be required to give any bond or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the premises.



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     (k) Notwithstanding anything elsewhere in this Indenture contained, the Trustee, in
respect to the authentication of any Notes, the withdrawal of any cash or any action
whatsoever within the purview of this Indenture, and any Authenticating Agent, in respect of
the authentication of Notes, shall have the right, but shall not be required, to demand any
showings, certificates, opinions (including opinions of Counsel), appraisals or other
information, or corporate action or evidence thereof, in addition to that by the terms
hereof required as a condition of such action by the Trustee or the Authenticating Agent, as
the case may be, deemed desirable for the purpose of establishing the right of the Issuer to
the authentication of any Notes, the withdrawal of any cash, or the taking of any other
action by the Trustee or the Authenticating Agent, as the case may be.




     (l) Before taking any action hereunder requested by Holders or by any Other
Beneficiary, the Trustee may require that it be furnished an indemnity bond or other
indemnity satisfactory to it for the reimbursement of all expenses to which it may be put
and to protect it against all liability, except liability which results from the negligence
or willful misconduct of the Trustee, by reason of any action so taken by the Trustee.




     (m) The Trustee shall periodically file Uniform Commercial Code continuation statements
and take such other actions described in Section 4.11 hereof as required to maintain and
continue the perfection of any security interests granted by the Issuer and the Eligible
Lender Trustee as debtors to the Trustee as secured party hereunder.



     Section 7.02. Fees, Charges and Expenses of the Trustee, Paying Agents, Note Registrar,
Authenticating Agents, Remarketing Agents, Tender Agents, Auction Agents, Market Agents and
Broker-Dealers. The Trustee and each Paying Agent, Note Registrar, Authenticating Agent,
Remarketing Agent, Tender Agent, Auction Agent, Market Agent and Broker-Dealer shall be entitled to
payment and/or reimbursement for reasonable fees for services rendered hereunder and all advances,
legal fees and other expenses reasonably and necessarily made or incurred by it in and about the
execution of the trusts created by this Indenture and in and about the exercise and performance of
the powers and duties of the Trustee and each Paying Agent, Note Registrar, Authenticating Agent,
Remarketing Agent, Tender Agent, Auction Agent, Market Agent and Broker-Dealer hereunder and for
the reasonable and necessary costs and expenses incurred in defending 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, the Paying Agent, the Note Registrar, the
Authenticating Agent, the Remarketing Agent, the Tender Agent, the Auction Agent, the Market Agent
or the Broker-Dealer); provided that any moneys or Investment Securities held pursuant to Section
9.01 hereof with respect to Notes no longer deemed Outstanding hereunder, shall not be available
for, nor be applied to, the payment of any such fees, advances, costs or expenses.



     Section 7.03. Notice to Beneficiaries if Default Occurs. The Trustee shall give to all
Beneficiaries, in the manner provided in Section 10.04 hereof, notice of all Events of Default, and
of all events which, with the passage of time or the giving of notice, or both, would become an
Event of Default, known to the Trustee, within 90 days after the occurrence of such Event of
Default or other event unless such Event of Default or other event shall have been cured before the
giving of such notice; provided that, except in the case of Events of Default in the payment of



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the principal of, premium, if any, or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of the Trustee in good
faith determines that the withholding of such notice is in the interest of the Beneficiaries.




     Section 7.04. Intervention by Trustee. In any judicial proceeding to which the Issuer is a
party and which in the opinion of the Trustee and its Counsel has a substantial bearing on the
interest of the Beneficiaries, the Trustee may intervene on behalf of Beneficiaries and shall do so
if requested in writing by the Acting Beneficiaries Upon Default. The rights and obligations of
the Trustee under this Section are subject to the approval of a court of competent jurisdiction in
the premises.



     Section 7.05. Successor Trustee, Paying Agents, Authenticating Agents, and Tender Agents. Any
corporation, association or agency into which the Trustee and any Paying Agent, any Authenticating
Agent or any Tender Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any such conversion, sale, merger, consolidation
or transfer to which it is a party, ipso facto, shall be and become successor Trustee, Paying
Agent, Note Registrar, Authenticating Agent, or Tender Agent hereunder and vested with all of the
trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor,
without the execution or filing of any instrument or any further act, deed or conveyance on the
part of any of the parties hereto, anything herein to the contrary notwithstanding; provided that
no such merger, conversion or consolidation shall relieve the Trustee of its obligation to comply
with Section 7.13 hereof.



     Section 7.06. Resignation by Trustee, Paying Agents, Authenticating Agents, and Tender Agents.
The Trustee, any Paying Agent, any Authenticating Agent and any Tender Agent may at any time
resign from the trusts and be discharged of the duties and obligations hereby created by giving 60
days’ written notice to the Issuer and the Rating Agencies and, in the case of the Trustee, a
Paying Agent, an Authenticating Agent or a Tender Agent, by first-class mail to all Holders and
Other Beneficiaries and such resignation shall take effect upon the appointment of a successor
Trustee, Paying Agent, Authenticating Agent or Tender Agent. No such resignation of the Trustee
shall become effective until the acceptance of appointment by a successor Trustee under Section
7.09 hereof. Upon the appointment and acceptance of a successor Trustee, Authenticating Agent,
Paying Agent or Tender Agent, the Trustee shall promptly cause written notice of such appointment
to be given to all Holders and Other Beneficiaries in the manner provided in Section 10.04 hereof,
which notice shall include the address of the Principal Office of such successor. If an instrument
of acceptance by a successor Trustee, Paying Agent, Authenticating Agent or Tender Agent shall not
have been delivered to the resigning Trustee, Paying Agent, Authenticating Agent or Tender Agent
within 60 days after the giving of such notice of resignation, the resigning Trustee, Paying Agent,
Authenticating Agent or Tender Agent may petition any court of competent jurisdiction for the
appointment of a successor and any attorneys’ fees incurred in connection with any such petition
shall be payable by the Issuer.



     Section 7.07. Removal of Trustee. The Issuer may, with a Rating Agency Confirmation, at any
time, subject to the provisions of this Article, remove the Trustee by Issuer Order. The Issuer
shall remove the Trustee if at any time so requested by an instrument or



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concurrent instruments in writing, filed with the Trustee and the Issuer, and signed by the
Holders of a majority in Principal Amount of the Notes then Outstanding or their attorneys-in-fact
duly authorized. Notwithstanding the foregoing, the Trustee may not be removed during the
existence of an Event of Default.




     In case the Trustee shall be dissolved, fail to comply with Section 7.13 hereof or otherwise
become incapable of acting hereunder, or in case it shall be taken under the control of any public
officer or officers, or of a receiver appointed by a court, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.



     No removal of the Trustee, and no appointment of a successor Trustee, pursuant to the
provisions of this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 7.09 hereof.



     Section 7.08. Appointment of Successor Trustee. If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer shall, by Issuer Order, promptly appoint a successor trustee. If, within one year of such
resignation, removal or incapability, or the occurrence of such vacancy, the Holders of a majority
in aggregate Principal Amount of the then Outstanding Notes, by an instrument or concurrent
instruments in writing signed by such Holders, or by their attorney-in-fact duly authorized,
appoint a successor, such successor shall, upon its acceptance of such appointment, supersede the
successor appointed by the Issuer. If no successor trustee has been appointed and accepted
appointment as herein provided after 60 days from the mailing of notice of resignation by the
Trustee under Section 7.06 hereof, or from the date the Trustee is removed or otherwise incapable
of acting hereunder, any Beneficiary may petition a court of competent jurisdiction to appoint a
successor trustee. No appointment of a successor Trustee shall be effective without the written
consent of all Other Beneficiaries, which consent shall not be unreasonably withheld.



     The Issuer shall promptly notify any Paying Agent, Authenticating Agent, Remarketing Agent and
Tender Agent as to the appointment of any successor trustee and shall promptly cause written notice
of such appointment to be given to all Holders and Other Beneficiaries in the manner provided in
Section 10.04 hereof, which notice shall include the address of the Principal Office of the
successor Trustee. The appointment of a successor trustee shall not be effective until the Issuer
has received a Rating Agency Confirmation.



     Section 7.09. Concerning any Successor Trustee. Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to its predecessor, and to the Issuer, an instrument in
writing accepting such appointment hereunder, and thereupon such successor, without any further
act, assignment or conveyance, shall become fully vested with all the estates, properties, rights,
powers, trusts, duties and obligations of its predecessor as Trustee; but such predecessor shall,
nevertheless, on the written request of the Issuer, or of its successor Trustee, execute and
deliver an instrument transferring to such successor Trustee all the estates, properties, rights,
powers and trusts of such predecessor hereunder, and every predecessor Trustee shall deliver all
securities and moneys and Balances held by it as Trustee hereunder to its successor together with
an accounting of the Balances held by it hereunder and shall take such actions as may be necessary
to cause any Credit Enhancement Facility to be transferred to the



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successor Trustee. Should any instrument in writing from the Issuer be required by any
successor Trustee for more fully and certainly vesting in such successor the estates, rights,
powers and duties hereby vested or intended to be vested in the predecessor trustee, any and all
such instruments in writing shall, on request, be executed, acknowledged and delivered by the
Issuer.




     Section 7.10. Trustee Protected in Relying Upon Resolutions, Etc. The resolutions, orders,
requisitions, opinions, certificates and other instruments conforming to the requirements of this
Indenture may be accepted by the Trustee as conclusive evidence of the facts and conclusions stated
therein and shall be full warrant, protection and authority to the Trustee for the withdrawal of
cash hereunder. The Trustee shall not, however, comply with any Issuer Order which does not comply
with the terms and provisions of this Indenture or which directs the Trustee to take an action
which is not permitted by the terms and provisions of this Indenture.



     Section 7.11. Successor Trustee as Custodian of Funds. In the event of a change in the office
of Trustee the predecessor Trustee which has resigned or been removed shall cease to be custodian
of the Funds and Accounts, and the successor Trustee shall be and become such custodian.



     Section 7.12. Co-Trustee. At any time or times, for the purpose of (a) meeting any legal
requirements of any state in which the Trustee determines it necessary to take any action
hereunder; or (b) establishing the eligibility of any Financed Student Loans for receipt of federal
payments with respect thereto, the Trustee shall have power to appoint, and, upon the request of
the Trustee or of the Holders of at least 25% in aggregate Principal Amount of Notes Outstanding or
of any Other Beneficiary, the Issuer shall for such purpose join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper to appoint one or
more Persons approved by the Trustee either to act as co-trustee or co-trustees, jointly with the
Trustee of all or any part of the trust estate, or to act as separate trustee or separate trustees
of all or any part of the trust estate, and to vest in such person or persons, in such capacity,
such title to the trust estate or any part thereof, and such rights, powers, duties, trusts or
obligations as the Trustee may consider necessary or desirable, subject to the remaining provisions
of this Section. No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor Trustee under Section 7.13 hereof and no notice to Holders of the
appointment of any co-trustee or separate trustee shall be required under Section 7.08 hereof.



     If the Issuer shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have power to make such appointment.



     The Issuer shall execute, acknowledge and deliver all such instruments as may be required by
any such co-trustee or separate trustee.



     Every co-trustee or separate trustee shall, to the extent permitted by law but to such extent
only, be appointed subject to the following terms, namely:



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     (a) The Notes shall be authenticated and delivered, and all rights, powers, trusts,
duties and obligations by this Indenture conferred upon the Trustee in respect of the
custody, control and management of moneys, papers, securities and other personal property
shall be exercised, solely by the Trustee.




     (b) All rights, powers, trusts, duties and obligations conferred or imposed upon the
trustees shall be conferred or imposed upon and exercised or performed by the Trustee, or by
the Trustee and such co-trustee or co-trustees or separate trustee or separate trustees
jointly, as shall be provided in the instrument appointing such co-trustee or co-trustees or
separate trustee or separate trustees, except to the extent that, under the law of any
jurisdiction in which any particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such act or acts
shall be performed by such co-trustee or co-trustees or separate trustee or separate
trustees.




     (c) Any request in writing by the Trustee to any co-trustee or separate trustee to take
or to refrain from taking any action hereunder shall be sufficient warrant for the taking,
or the refraining from taking, of such action by such co-trustee or separate trustee.




     (d) Any co-trustee or separate trustee may delegate to the Trustee the exercise of any
right, power, trust, duty or obligations, discretionary or otherwise.




     (e) The Trustee at any time, by any instrument in writing, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this Section. Upon the
request of the Trustee, the Issuer shall join with the Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to effectuate such
resignation or removal.




     (f) No trustee hereunder shall be personally liable by reason of any act or omission of
any other trustee hereunder.




     (g) Any demand, request, direction, appointment, removal, notice, consent, waiver or
other action in writing delivered to the Trustee shall be deemed to have been delivered to
each such co-trustee or separate trustee.




     (h) Any moneys, papers, securities or other items of personal property received by any
such co-trustee or separate trustee hereunder shall forthwith, so far as may be permitted by
law, be turned over to the Trustee.



     Upon the acceptance in writing of such appointment by any such co-trustee or separate trustee,
it or he or she shall be vested with such title to the trust estate or any part thereof, and with
such rights, powers, duties or obligations, as shall be specified in the instrument of appointment
jointly with the Trustee (except insofar as local law makes it necessary for any such co-trustee or
separate trustee to act alone) subject to all the terms of this Indenture. Every such acceptance
shall be filed with the Trustee. Any co-trustee or separate trustee may, at any time by an
instrument in writing, constitute the Trustee, his, her or its attorney-in-fact and agent, with
full power and authority to do all acts and things and to exercise all discretion on his, her or
its behalf and in his, her or its name.



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     In case any co-trustee or separate trustee shall die, become incapable of acting, resign or be
removed, the title to the trust estate, and all rights, powers, trusts, duties and obligations of
said co-trustee or separate trustee shall, so far as permitted by law, vest in and be exercised by
the Trustee unless and until a successor co-trustee or separate trustee shall be appointed in the
manner herein provided.



     Section 7.13. Corporate Trustee Required; Eligibility; Disqualification. There shall at all
times be a Trustee hereunder which shall be a corporation organized and doing business under the
laws of the United States of America or of any state, authorized under such laws to exercise
corporate trust powers, and shall be an “eligible lender” under the Higher Education Act, having a
combined capital stock, capital surplus and undivided profits of at least $25,000,000, subject to
supervision or examination by a federal or state authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section, the combined capital stock, capital
surplus and undivided profits of such corporation shall be deemed to be its combined capital stock,
capital surplus and undivided profits as set forth in its most recent report of condition so
published.



     Section 7.14. Statement by Trustee of Funds and Accounts and Other Matters. Not more than 30
days after the close of each Fiscal Year the Trustee shall furnish the Issuer and any Holder or
Other Beneficiary filing with the Trustee a written request for a copy, a statement setting forth
(to the extent applicable) in respect to such Fiscal Year, (a) all transactions relating to the
receipt, disbursement and application of all moneys received by the Trustee pursuant to all terms
of this Indenture; (b) the Balances held by the Trustee at the end of such Fiscal Year to the
credit of each Fund and Account; (c) a brief description of all moneys, Student Loans and
Investment Securities held by the Trustee as part of the Balance of each Fund and Account as of the
end of such Fiscal Year; (d) the Principal Amount of Notes of each series purchased by the Trustee
during such Fiscal Year from moneys available therefor in any Fund pursuant to the provisions of
this Indenture and the respective purchase price of such Notes; (e) the Principal Amount of Notes
of each series retired, at their Stated Maturity or by prepayment, during such Fiscal Year and the
Prepayment Prices thereof, if any; and (f) any other information which the Issuer may reasonably
request.



     In addition, the Trustee shall furnish the Issuer on or before the fifteenth day of each
calendar month (but no sooner than three Business Days after receipt of the monthly report with

respect to the Financed Eligible Loans from the Issuer Administrator or Servicers) a brief
description of all moneys, Financed Student Loans and Investment Securities to the credit of each
Fund and Account as of the last day of the preceding month.



     Section 7.15. Trustee, Authenticating Agent, Note Registrar, Paying Agents, Remarketing
Agents, Tender Agents, Auction Agents, Market Agents and Broker-Dealers May Buy, Hold, Sell or Deal
in Notes. The Trustee, any Authenticating Agent, any Note Registrar, any Paying Agent, any
Remarketing Agent, any Tender Agent, any Auction Agent, any Market Agent or any Broker-Dealer and
its directors, officers, employees or agents may, in good faith, buy, sell, own, hold and deal in
any of the Notes and may join in any action which any Holder of a Note may be entitled to take,
with like effect as if such Trustee, Authenticating Agent, Note Registrar, Paying Agent,
Remarketing Agent, Tender Agent, Auction Agent, Market



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Agent or Broker-Dealer were not the Trustee, an Authenticating Agent, a Note Registrar, a
Paying Agent, a Remarketing Agent, a Tender Agent, an Auction Agent, a Market Agent or a
Broker-Dealer, as the case may be, under this Indenture.




     Section 7.16. Authenticating Agent and Paying Agents; Paying Agents To Hold Moneys in Trust.
Any Paying Agent for a series of Notes shall be appointed by or pursuant to a Supplemental
Indenture providing for the issuance of such series of Notes. Each Paying Agent shall hold in
trust for the benefit of the Holders of the Notes and the Trustee any sums held by such Paying
Agent for the payment of the principal of, premium, if any, and interest on and any Carry-Over
Amounts (and accrued interest thereon) with respect to the Notes. Anything in this paragraph to
the contrary notwithstanding, the Issuer may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, cause to be paid to the
Trustee all sums held in trust by any Paying Agent hereunder as required by this paragraph, such
sums to be held by the Trustee upon the trusts herein contained, and such Paying Agent shall
thereupon be released from all further liability with respect to such sums.



     Any Authenticating Agent for a series of Notes shall be appointed by or pursuant to a
Supplemental Indenture providing for the issuance of such series of Notes. The Authenticating
Agent shall have the power to act in the receipt, authentication and delivery of Notes in
connection with transfers, exchanges and registrations hereunder.



     Each Authenticating Agent and Paying Agent other than the Trustee shall designate its
Principal Office and signify its acceptance of the duties and obligations imposed upon it by this
Indenture by executing and delivering to the Issuer a written acceptance thereof under which, in
the case of the Paying Agent, the Paying Agent will agree particularly:




     (a) to hold all sums held by it pursuant to this Indenture in trust for the benefit of
the Holders of the Notes until such sums shall be paid to such Holders or otherwise disposed
of as herein provided;




     (b) at any time during the continuance of any Event of Default, upon the written
request of the Trustee, to forthwith pay to the Trustee all sums so held in trust by such
Paying Agent; and




     (c) in the event of the resignation or removal of such Paying Agent, pay over, assign
and deliver any moneys, records or securities held by it as Paying Agent to its successor
or, if there be no successor, to the Trustee.



     No Paying Agent shall be obligated to expend its own funds in paying Debt Service on, or
Carry-Over Amounts (including accrued interest thereon) with respect to, the Notes.



     Section 7.17. Removal of Authenticating Agent and Paying Agents; Successors. Any
Authenticating Agent and any Paying Agent may be removed at any time by an instrument filed with
such Authenticating Agent or Paying Agent, as the case may be, and the Trustee and signed by the
Issuer. Any successor Authenticating Agent or Paying Agent shall be appointed by the Issuer and
shall be a bank having trust powers or trust company duly organized under the laws of any state of
the United States or a national banking association having trust powers, having, in the case of a
successor paying agent, a capital stock and surplus aggregating at least



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$25,000,000, and willing and able to accept the office on reasonable and customary terms and
authorized by law to perform all the duties imposed upon it by this Indenture and any Supplemental
Indenture. Upon the appointment and acceptance of a successor Authenticating Agent or Paying
Agent, the Issuer shall promptly give written notice of such appointment to the Trustee and the
Trustee shall promptly cause written notice thereof to be given to all Holders in the manner
provided in Section 10.04 hereof, which notice shall include the address of the Principal Office of
such successor.




     In the event of the resignation or removal of any Authenticating Agent or any Paying Agent,
such Authenticating Agent or Paying Agent shall pay over, assign and deliver any moneys, records or
securities held by it as Authenticating Agent (and Note Registrar, if appropriate) or Paying Agent,
as the case may be, to its successors or, if there be no successor, to the Trustee.



     Section 7.18. Appointment and Qualifications of Tender Agents. The Issuer may, in a
Supplemental Indenture, appoint a Tender Agent with respect to one or more series of Notes. The
Tender Agent shall, by entering into a Tender Agent Agreement, designate to the Trustee its
Principal Offices for the purposes of its functions as Tender Agent and, if applicable,
Authenticating Agent and Note Registrar hereunder and signify its acceptance of the duties and
obligations imposed upon it hereunder (including, if applicable, those of Authenticating Agent and
Note Registrar) and under the Tender Agent Agreement, and under which the Tender Agent will agree,
particularly:




     (a) to hold all Notes delivered to it hereunder in trust for the benefit of the
respective Holders which shall have so delivered such Notes until moneys representing the
purchase price of such Notes shall have been delivered to or for the account of or to the
order of such Holders;




     (b) to hold all moneys delivered to it hereunder for the purchase of Notes in trust for
the benefit of the person or entity which shall have so delivered such moneys until the
Notes purchased with such moneys shall have been delivered to or for the account of such
person or entity; and




     (c) to keep such books and records as shall be consistent with prudent industry
practice and to make such books and records available for inspection by the Issuer and the
Trustee at all reasonable times.



     The Issuer shall cooperate with the Tender Agent and the Trustee to cause the necessary
arrangements to be made and to be thereafter continued whereby funds from the sources specified
herein will be made available for the purchase of the Notes which are required to be tendered on a
Tender Date and whereby Notes, executed by the Issuer and authenticated by the Trustee or the
Authenticating Agent, shall be made available to the Remarketing Agent, the Trustee or the Tender
Agent to the extent necessary for delivery pursuant the applicable provisions of the related
Supplemental Indenture.



     The Tender Agent shall be a commercial bank or trust company duly organized under the laws of
the United States or any state or territory thereof, having its Principal Office for the



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performance of its functions as Tender Agent hereunder located in New York, New York, having a
combined capital stock, surplus and undivided profits of at least $100,000,000 and authorized by
law to perform all the duties imposed upon it by this Indenture (including, if applicable, those of
Authenticating Agent and Note Registrar) and the Tender Agent Agreement. The Tender Agent may at
any time resign and be discharged of the duties and obligations created by this Indenture and the
Tender Agent Agreement (including such duties and obligations as Note Registrar and Authenticating
Agent hereunder) by giving at least 60 days’ notice to the Issuer, the Trustee and any related
Credit Facility Provider, provided that such resignation shall not be effective until the
appointment of a successor Tender Agent by the Issuer. The Tender Agent may be replaced at any
time, at the direction of the Issuer, by an instrument, signed by an Authorized Officer of the
Issuer, filed with the Remarketing Agent, the Tender Agent, the Trustee and any related Credit
Facility Provider at least 60 days prior to the effective date of such replacement, provided that
such replacement shall not be effective until the appointment of a successor Tender Agent by the
Issuer. Upon the appointment and acceptance of a successor Tender Agent, the Issuer shall promptly
give written notice of such appointment to the Trustee and the Trustee shall promptly cause written
notice thereof to be given to all Holders in the manner provided in Section 10.04 hereof, which
notice shall include the address of the Principal Office of such successor.




     In the event of the resignation or removal of the Tender Agent, the Tender Agent shall pay
over, assign and deliver any moneys, Notes and records held by it in such capacity (including any
such moneys, Notes and records held by it as Authenticating Agent and Note Registrar) to its
successor or, if there be no successor, to the Trustee.



     In the event that the Tender Agent shall be removed or be dissolved, or if the property or
affairs of the Tender Agent shall be taken under the control of any state or federal court or
administrative body because of bankruptcy or insolvency, or for any other reason, and the Issuer
shall not have appointed its successor as Tender Agent, the Trustee, notwithstanding the foregoing
provisions of this Section, shall ipso facto be deemed to be the Tender Agent for all purposes of
this Indenture until the appointment by the Issuer of the successor Tender Agent, and the Trustee
shall be required to perform the functions of the Tender Agent (and, if applicable, of Note
Registrar and Authenticating Agent) as set forth in this Indenture and the Tender Agent Agreement.



     Section 7.19. Remarketing Agents. The Issuer may, in a Supplemental Indenture, appoint a
Remarketing Agent with respect to one or more series of Notes. The Remarketing Agent shall
designate its Principal Office and signify its acceptance of the duties and obligations imposed
upon it hereunder by entering into a Remarketing Agreement under which the Remarketing Agent will
agree, particularly:




     (a) to determine any variable interest rate in accordance with the applicable
provisions of the related Supplemental Indenture;




     (b) to determine any fixed interest rate in accordance with the applicable provisions
of the related Supplemental Indenture;



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     (c) to hold all Notes delivered to it hereunder in trust for the benefit of the
respective Holders which shall have so delivered such Notes until moneys representing the
purchase price of such Notes shall have been delivered to or for the account of or to the
order of such Holders;




     (d) to hold all moneys delivered to it hereunder for the purchase of Notes in trust for
the benefit of the person or entity which shall have so delivered such moneys until the
Notes purchased with such moneys shall have been delivered to or for the account of such
person or entity; and




     (e) to keep such books and records as shall be consistent with prudent industry
practice and to make such books and records available for inspection by the Issuer and the
Trustee at all reasonable times.



     Section 7.20. Qualifications of Remarketing Agents. The Remarketing Agent shall be a member
of the National Association of Securities Dealers, Inc., have a capitalization of at least
$50,000,000 and be authorized by law to perform all the duties imposed upon it by this Indenture
and the Remarketing Agreement. The Remarketing Agent may at any time resign and be discharged of
the duties and obligations created by this Indenture and the Remarketing Agreement (a) by giving at
least 60 days’ notice to the Issuer, the Trustee, the Tender Agent and any related Credit Facility
Provider, provided that such resignation shall not be effective until a successor Remarketing Agent
has been appointed by the Issuer and any related Credit Facility Provider has consented in writing
thereto, which consent shall not be unreasonably withheld; or (b) by giving notice to the Issuer,
the Trustee and the Tender Agent under the circumstances set forth in the Remarketing Agreement.
The Remarketing Agent may be replaced at any time, at the direction of the Issuer, by an instrument
signed by an Authorized Officer of the Issuer, filed with the Remarketing Agent, the Trustee, the
Tender Agent and any related Credit Facility Provider, provided that such replacement shall not be
effective until a successor Remarketing Agent has been appointed by the Issuer and any related
Credit Facility Provider has consented in writing thereto, which consent shall not be unreasonably
withheld.



     In the event of the resignation or removal of the Remarketing Agent, the Remarketing Agent
shall pay over, assign and deliver any moneys and Notes held by it in such capacity to its
successor or, if there be no successor, to the Trustee.



     In the event that the Remarketing Agent shall resign, be removed or be dissolved, or if the
property or affairs of the Remarketing Agent shall be taken under the control of any state or
federal court or administrative body because of bankruptcy or insolvency, or for any other reason,
and the Issuer shall not have appointed its successor as Remarketing Agent, the Trustee,
notwithstanding the provisions of the first paragraph of this Section, shall ipso facto be deemed
to be the Remarketing Agent for all purposes of this Indenture until the appointment by the Issuer
of the successor Remarketing Agent; provided, however, that the Trustee, in its capacity as
Remarketing Agent, shall not be required to sell Notes or to determine the interest rate on the
Notes. Nothing in this Section shall be construed as conferring on the Trustee additional duties
other than as set forth herein.



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     Section 7.21. Indemnification of the Trustee. Other than with respect to its duties to make
payment on the Notes and Other 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 the Beneficiaries 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
hereof. 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 Beneficiaries requesting such
action, if any, or the Issuer (but solely out of the Trust Estate) 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, the Trustee shall not be liable for, and shall
be held harmless by the Issuer from, following any Issuer 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 Beneficiaries, as appropriate, shall fail 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, except as
otherwise provided in Section 6.03 hereof. 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 Beneficiaries 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 or willful misconduct 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, provided, however, that any such indemnification shall be payable solely out of
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, provided, however, that no indemnification is made by the Issuer as to information
contained in any such offering document relating to, and provided by, the Trustee.



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ARTICLE VIII




SUPPLEMENTAL INDENTURES




     Section 8.01. Supplemental Indentures Not Requiring Consent of Beneficiaries. The Issuer and
the Trustee may, from time to time and at any time, without the consent of, or notice to, any of
the Holders or any Other Beneficiary (except to the extent, if any, required pursuant to a
Supplemental Indenture authorizing the issuance of a series of Notes), and when so required by this
Indenture shall, enter into an indenture or indentures supplemental to this Indenture as shall not
be inconsistent with the terms and provisions hereof (which Supplemental Indenture or Indentures
shall thereafter form a part hereof), so as to thereby (a) cure any ambiguity or formal defect or
omission in this Indenture or in any Supplemental Indenture; (b) grant to or confer upon the
Trustee for the benefit of the Beneficiaries any additional rights, remedies, powers, authority or
security that may lawfully be granted to or conferred upon the Beneficiaries or the Trustee; (c)
describe or identify more precisely any part of the Trust Estate or subject additional revenues,
properties or collateral to the lien and pledge of this Indenture; (d) evidence the appointment of
a separate trustee or a co-trustee or the succession of a new Trustee hereunder; (e) authorize
issuance of a series of Notes, subject to the requirements of Article II hereof; (f) modify,
eliminate and/or add to the provisions of this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the Trust Indenture Act of 1939, as then amended,
or under any similar Federal statute enacted after the date of this Indenture, and to add to this
Indenture such other provisions as may be expressly permitted by said Trust Indenture Act of 1939,
excluding, however, the provisions referred to in Section 316(a)(2) of said Trust Indenture Act of
1939; (g) modify, eliminate and/or add to the provisions of this Indenture to such extent as shall
be necessary or advisable in order to acquire Eligible Loans described in clause (b) of the
definition thereof in Section 1.01 hereof; (h) modify this Indenture (including deletions of or
changes to provisions of this Indenture or additions to this Indenture or any combination of
deletions, changes and additions) as required by any Credit Facility Provider or Swap Counterparty,
or otherwise necessary to give effect to any Credit Enhancement Facility, Swap Agreement or Swap
Counterparty Guaranty authorized to be obtained or entered into under Section 2.12 hereof, at the
time of issuance of a series of Notes to which such agreements relate; provided that no such
modifications shall be effective (i) if the consent of any Holders would be required therefor under
the proviso contained in Section 8.02 hereof and such consent has not been obtained; or (ii) if the
Trustee in its sole discretion shall determine that such modifications are to the prejudice of any
Other Beneficiary; (i) create additional Funds, Accounts or subaccounts as authorized by Section
4.01 hereof; (j) to provide for the creation of one or more additional classes of Notes or Other
Obligations; provided, (i) that no such class of Notes or Other Obligations may be senior in any
respect to any previously created such class of Notes or Other Obligations any of which are then
Outstanding, except to the extent specifically authorized or permitted by the Supplemental
Indenture authorizing such previously created class or except to the extent consented to by each
Beneficiary who would be adversely affected thereby; and (ii) that a Rating Agency Confirmation is
obtained with respect to such additional classes of Notes or Other Obligations; or (k) make any
other change in this Indenture which is not materially adverse to the Registered Owners of the
Notes.



     Section 8.02. Supplemental Indentures Requiring Consent of Beneficiaries. Exclusive of
Supplemental Indentures covered by Section 8.01 hereof and subject to the terms



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and provisions contained in this Section, and not otherwise, the Trustee (upon receipt of an
instrument evidencing the consent to the below-mentioned Supplemental Indenture by: (a) if they
are affected thereby, the Holders of not less than two-thirds of the aggregate Principal Amount of
the Outstanding Senior Notes; (b) if they are affected thereby, the Holders of not less than
two-thirds of the aggregate Principal Amount of the Outstanding Subordinate Notes; (c) if they are
affected thereby, the Holders of not less than two-thirds of the Aggregate Principal Amount of the
Outstanding Junior Subordinate Notes; and (d) each other Person which must consent to such
Supplemental Indenture as provided in any then outstanding Supplemental Indenture authorizing the
issuance of a series of Notes or any Other Obligation) shall join with the Issuer in the execution
of such other indenture or indentures supplemental hereto as shall be deemed necessary and
desirable for the purpose of modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in this Indenture; provided, however, that
nothing contained in this Article shall permit or be construed as permitting without the consent of
the Holder of each Note and each Other Beneficiary which would be affected thereby (i) an extension
of the maturity of the principal of or the interest on any Note, whether at the Stated Maturity
thereof, on a Sinking Fund Payment Date or otherwise; or (ii) a reduction in the Principal Amount,
Prepayment Price or purchase price of any Note or the rate of interest thereon; or (iii) a
privilege or priority of any Senior Obligation over any other Senior Obligation; (iv) a privilege
or priority of any Subordinate Obligation over any other Subordinate Obligation; or (v) a privilege
of any Senior Notes over any Subordinate Notes or Junior Subordinate Notes, other than as provided
herein; or (vi) a privilege of any Subordinate Notes over any Junior Subordinate Notes, other than
as provided herein; or (vii) the surrendering of a privilege or a priority granted hereby if, in
the judgment of the Trustee, to the detriment of another Beneficiary hereunder; or (viii) a
reduction or an increase in the aggregate Principal Amount of the Notes required for consent to
such Supplemental Indenture; or (ix) the creation of any lien ranking prior to or on a parity with
the lien of this Indenture on the Trust Estate or any part thereof, except as hereinbefore
expressly permitted; or (x) any Beneficiary to be deprived of the lien hereby created on the
rights, title, interest, privileges, revenues, moneys and securities pledged hereunder; or (xi) the
modification of any of the provisions of this Section 8.02; or (xii) the modification of any
provision of a Supplemental Indenture which states that it may not be modified without the consent
of the Holders of Notes issued pursuant thereto or any Notes of the same class or any Beneficiary
that has provided a Credit Enhancement Facility or Swap Agreement of such class.




     For purposes of this Indenture, Notes are deemed “affected” by an amendment if such amendment
adversely affects or diminishes the rights of the Holders thereof to be assured of the payment of
principal of, premium, if any, and interest on and any Carry-Over Amount (and accrued interest
thereon) with respect to such Notes, taking into account the priorities between classes of Notes
theretofore prescribed hereby. The Trustee may in its discretion determine whether any Notes would
be affected by any amendment and any such determination shall be conclusive upon the Holders of all
Notes, whether theretofore or thereafter authenticated and delivered under this Indenture. The
Trustee shall not be liable for any such determination made in good faith.



     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



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Supplemental Indenture to be mailed to each Holder of an Outstanding Note in accordance with
the provisions of Section 10.04 hereof and to each Other Beneficiary. Such notice shall briefly
set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are
on file at the Principal Office of the Trustee for inspection by all Beneficiaries. The Trustee
shall not, however, be subject to any liability to any Holder or any Other Beneficiary by reason of
its failure to mail such notice, and any such failure shall not affect the validity of such
Supplemental Indenture when consented to and approved as provided in this Section. If, at the time
of the execution of any such Supplemental Indenture, the Holders of Notes and each other
Beneficiary shall have consented to and approved the execution thereof as herein provided, no
Beneficiary 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 permitted and provided this Indenture shall be and be deemed to be modified and
amended in accordance therewith.




     Section 8.03. Rights of Trustee. If, in the opinion of the Trustee, any Supplemental
Indenture provided for in this Article adversely affects the rights, duties or immunities of the
Trustee under this Indenture or otherwise, the Trustee may, in its sole discretion, decline to
execute such Supplemental Indenture, except to the extent that this may be required in the case of
a Supplemental Indenture entered into under Section 8.01 hereof. The Trustee shall not be liable
for any such determination made in good faith. The Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an opinion of Counsel as conclusive evidence that any such
Supplemental Indenture conforms to the requirements of this Indenture.



     Section 8.04. Consent of Tender Agents. So long as any Tender Agent Agreement is in effect,
(a) no Supplemental Indenture which materially adversely affects the rights, duties or immunities
of the Tender Agent created by this Indenture or the Tender Agent Agreement (including, if
applicable, such duties and obligations as Note Registrar and Authenticating Agent hereunder) shall
become effective unless and until delivery to the Trustee of a written consent of the Tender Agent
to such Supplemental Indenture; and (b) the Trustee shall promptly furnish to the Tender Agent a
copy of each Supplemental Indenture.



     Section 8.05. Consent of Remarketing Agents. So long as any Remarketing Agreement is in
effect, (a) no Supplemental Indenture which materially adversely affects the rights, duties or
immunities of the Remarketing Agent created by this Indenture or the Remarketing Agreement shall
become effective unless and until delivery to the Trustee of a written consent of the Remarketing
Agent to such Supplemental Indenture; and (b) the Trustee shall promptly furnish to the Remarketing
Agent a copy of each Supplemental Indenture.



     Section 8.06. Consent of Auction Agents. So long as any Auction Agent Agreement is in effect,
(a) no Supplemental Indenture which materially adversely affects the rights, duties or immunities
of the Auction Agent created by this Indenture or the Auction Agent Agreement shall become
effective unless and until delivery to the Trustee of a written consent of the Auction Agent to
such Supplemental Indenture; and (b) the Trustee shall promptly furnish to the Auction Agent a copy
of each Supplemental Indenture.



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     Section 8.07. Consent of Broker-Dealers. So long as any Broker-Dealer Agreement is in effect,
(a) no Supplemental Indenture which materially adversely affects the rights, duties or immunities
of the Broker-Dealer created by this Indenture or the Broker-Dealer Agreement shall become
effective unless and until delivery to the Trustee of a written consent of the Broker-Dealer to
such Supplemental Indenture; and (b) the Trustee shall promptly furnish to the Broker-Dealer a copy
of each Supplemental Indenture.



     Section 8.08. Consent of Market Agents. So long as any Market Agent Agreement is in effect,
(a) no Supplemental Indenture which materially adversely affects the rights, duties or immunities
of the Market Agent created by this Indenture or the Market Agent Agreement shall become effective
unless and until delivery to the Trustee of a written consent of the Market Agent to such
Supplemental Indenture; and (b) the Trustee shall promptly furnish to the Market Agent a copy of
each Supplemental Indenture.



ARTICLE IX




DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES




     Section 9.01. Discharge of Liens and Pledges; Notes No Longer Outstanding and Deemed To Be
Paid Hereunder. The obligations of the Issuer under this Indenture, and the liens, pledges,
charges, trusts, covenants and agreements of the Issuer herein made or provided for, shall be fully
discharged and satisfied as to any Note and such Note shall no longer be deemed to be Outstanding
hereunder:




     (a) when such Note shall have been canceled, or shall have been purchased by the
Trustee from moneys held by it under this Indenture; or




     (b) as to any Note not canceled or so purchased, when payment of the principal of and
the applicable prepayment premium, if any, on such Note, plus interest on such principal to
the due date thereof (whether such due date be by reason of Stated Maturity or upon
prepayment, or otherwise); either (i) shall have been made or caused to be made in
accordance with the terms hereof; or (ii) shall have been provided for by irrevocably
depositing with the Trustee in an escrow account (an “Escrow Account”) and irrevocably
appropriating and setting aside exclusively for such payment; (A) moneys sufficient to make
such payment; or (B) Government Obligations maturing as to principal and interest in such
amount and at such times as will ensure the availability of sufficient moneys to make such
payment, and all necessary and proper fees, compensation and expenses of the Trustee, any
Remarketing Agents, any Tender Agents, any Auction Agents, any Market Agents, any
Broker-Dealers, any Authenticating Agents, the Note Registrar and any Paying Agents
pertaining to the Note with respect to which such deposit is made shall have been paid or
the payment thereof provided for to the satisfaction of the Trustee, said Remarketing
Agents, said Tender Agents, said Auction Agents, said Market Agents, said Broker-Dealers,
said Authenticating Agents, said Note Registrar and said Paying Agents.



     Any deposit under the preceding clause (ii) shall be accompanied by an Issuer Certificate
certifying that the moneys and Government Obligations so appropriated and set aside are



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sufficient, and will mature as needed, to pay the principal, premium, if any, and interest due
on the Note with respect to which such deposit has been made on the Stated Maturity or Prepayment
Date thereof and on each Interest Payment Date on and prior to such Stated Maturity or Prepayment
Date. At such time as a Note shall be deemed to be no longer Outstanding hereunder, as aforesaid,
such Note shall cease to draw interest from the due date thereof (whether such due date be by
reason of Stated Maturity, or upon prepayment or by declaration as aforesaid, or otherwise) and,
except for the purposes of any such payment from such moneys or Investment Securities, shall no
longer be secured by or entitled to the benefits of this Indenture.




     Notwithstanding the foregoing, (a) in the case of Notes which by their terms may be prepaid
prior to their Stated Maturities, no deposit under clause (ii) of subparagraph (b) above shall
constitute such payment, discharge and satisfaction as aforesaid, as to all such Notes which are to
be paid prior to their respective Stated Maturities, until proper notice of such prepayment shall
have been previously given in accordance with Section 3.04 hereof or provision satisfactory to the
Trustee shall have been irrevocably made for the giving of such notice, and (b) in the case of
Notes which may be required to be purchased on a Tender Date, no deposit under clause (ii)(B) of
subparagraph (b) above shall constitute such payment, discharge and satisfaction as aforesaid.



     Any such moneys so deposited with the Trustee as provided in this Section 9.01 may at the
direction of the Issuer also be invested and reinvested in Government Obligations maturing in the
amounts and time as hereinbefore set forth, and all income from all Government Obligations in the
hands of the Trustee pursuant to this Section which is not required for the payment of the Notes
and interest and premium thereon with respect to which such moneys shall have been so deposited
shall (a) if any Notes are then Outstanding, be deposited in the Collection Fund as and when
realized and collected, for use and application as are other moneys credited to such Fund and (b)
if no Notes are then Outstanding and no amounts are owed to any Other Beneficiaries hereunder, be
paid to the Issuer.



     Notwithstanding the satisfaction and discharge of this Indenture with respect to any Note, the
right to transfer and exchange such Note pursuant to Section 2.07, and any rights to have such Note
purchased on a Tender Date, shall survive.



     Notwithstanding any provision of any other Section of this Indenture which may be contrary to
the provisions of this Section, all moneys or Investment Securities set aside and held in trust
pursuant to the provisions of this Section for the payment of the principal of, premium, if any,
and interest on Notes shall be applied to and used solely for the payment of the principal of,
premium, if any, and interest on the particular Note with respect to which such moneys and
Investment Securities have been so set aside in trust.



     Anything in Article VIII hereof to the contrary notwithstanding, if moneys or Government
Obligations have been deposited or set aside with the Trustee pursuant to this Section for the
payment of Notes and such Notes shall be deemed to have been paid and to be no longer Outstanding
hereunder as provided in this Section, but such Notes shall not have in fact been actually paid in
full, no amendment to the provisions of this Article shall be made without the consent of the
Holder of each Note affected thereby.



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     The Issuer may at any time cause to be canceled any Notes previously executed and delivered,
which the Issuer may have acquired in any manner whatever, and such Notes upon such surrender for
cancellation shall be deemed to be paid and no longer Outstanding hereunder.



     The obligations of the Issuer under this Indenture, and the liens, pledges, charges, trusts,
covenants and agreements of the Issuer herein made or provided for, shall be fully discharged and
satisfied as to any Credit Enhancement Facility or Swap Agreement in the manner and with the effect
provided in the Supplemental Indenture providing for such Credit Enhancement Facility or Swap
Agreement.



     Notwithstanding the foregoing provisions of this Section, no Note shall be defeased hereunder
if, after giving effect to the defeasance, the requirements in Section 3.02 hereof are not met on
the date such Note is to be defeased, treating, for purposes of said Section 3.02, any Note that is
to be defeased as being prepaid on the date it is to be defeased at an assumed Prepayment Price
equal to the Principal Amount thereof with interest accrued thereon to the date of defeasance,
plus, if the Note is to be prepaid under this Section at a Prepayment Price greater than the
Principal Amount thereof, a premium equal to the amount by which the Prepayment Price exceeds such
Principal Amount.



     Section 9.02. Notes Not Presented for Payment When Due; Moneys Held for the Notes after Due
Date of Notes. Subject to the provisions of the next sentence of this paragraph, if any Note shall
not be presented for payment when the principal thereof shall become due, whether at Stated
Maturity, at the date fixed for redemption in full or otherwise, and if moneys or Investment
Securities described in subdivision (a) of the definition thereof in Section 1.01 hereof shall at
such due date be held by the Trustee, or a Paying Agent therefor, in trust for that purpose
sufficient and available to pay the principal of and premium, if any, on such Note, together with
all interest due on such principal to the due date thereof or to the date fixed for redemption
thereof, all liability of the Issuer for such payment shall forthwith cease, determine and be
completely discharged, and thereupon it shall be the duty of the Trustee, or such Paying Agent, to
hold said moneys or Investment Securities without liability to the Holder of such Note for interest
thereon, in trust for the benefit of the Holder of such Note, who thereafter shall be restricted
exclusively to said moneys or Investment Securities for any claim of whatever nature on his, her or
its part on or with respect to said Note, including any claim for the payment thereof. In the
event any such moneys or Investment Securities, or any other moneys or Investment Securities with
respect to interest due and payable on any Note prior to the Maturity thereof, held by the Trustee
or any Paying Agent for the Holders of such Notes remain unclaimed as of (a) 55 days after the
principal of or interest on the respective Notes with respect to which such moneys or Investment
Securities have been so set aside has become due and payable (whether at Stated Maturity,
redemption or otherwise), the Trustee shall, within five days thereafter, give notice thereof to
the Holders of such Notes in the same manner as a notice of redemption given in accordance with
Section 3.04 hereof; and (b) two years after the principal of or interest on such Notes has become
due and payable as aforesaid, the Trustee or such Paying Agent, as the case may be, shall, without
further request by the Issuer, pay such moneys and Investment Securities, to the extent permitted
by law, to the Issuer against a written receipt therefor, and otherwise hold or dispose of such
moneys and Investment Securities as required by law; provided that, if applicable law requires the
Trustee or any Paying Agent to dispose of any such moneys or Investment Securities prior to the end
of the period described in the preceding



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clause (b), disposition of such moneys and Investment Securities shall be made at the time and
otherwise in accordance with such law.




ARTICLE X




MISCELLANEOUS




     Section 10.01. Consent, etc., of Holders. Any consent, request, direction, approval,
objection or other instrument required by this Indenture to be signed and executed by Holders may
be in any number of writings of similar tenor and may be signed or executed by such Holders in
person or by agent appointed in writing. Proof of the execution of any such consent, request,
direction, approval, objection or other instrument or of the writing appointing any such agent and
of the ownership of Notes, if made in the following manner, shall be sufficient for any of the
purposes of this Indenture, and shall be conclusive in favor of the Issuer, any Paying Agent, any
Remarketing Agent, any Tender Agent, any Auction Agent, any Market Agent, any Broker-Dealer or the
Trustee with regard to any action taken by it under such consent, request, direction, approval,
objection or other instrument, namely:




     (a) The fact and date of the execution by any person of any such writing may be proved
by the certificate of any officer in any jurisdiction who by law has power to take
acknowledgements within such jurisdiction that the person signing such writing acknowledged
before him the execution thereof, or by an affidavit of any witness to such execution.




     (b) The fact of ownership of Notes, the numbers and other identification of such Notes,
and the date of holding the same shall be proved by the Note Register.



     Section 10.02. Limitation of Rights. With the exception of rights herein conferred, nothing
expressed or mentioned in or to be implied from this Indenture or the Notes is intended or shall be
construed to give to any Person other than the parties hereto, any Authenticating Agent, each
Paying Agent, each Remarketing Agent, each Tender Agent, each Auction Agent, each Market Agent,
each Broker-Dealer and the Beneficiaries, any legal or equitable right, remedy, or claim under or
in respect to this Indenture or any covenants, conditions and provisions herein contained; this
Indenture and all of the covenants, conditions and provisions hereof being intended to be and being
for the sole and exclusive benefit of the parties hereto, any Authenticating Agent, each Paying
Agent, each Remarketing Agent, each Tender Agent, each Auction Agent, each Market Agent, each
Broker-Dealer and the Beneficiaries as herein provided.



     Section 10.03. Severability. If any provision of this Indenture shall be held or deemed to be
or shall, in fact, be inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any
provisions of any constitution or statute or rule of public policy, or for any other reason, such
circumstances shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other provision or provisions
herein contained invalid, inoperative, or unenforceable to any extent whatever.



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     The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Indenture
contained shall not affect the remaining portions of this Indenture or part thereof.



     Section 10.04. Notices.




     (a) All notices, certificates, Issuer Orders or other communications hereunder shall be
sufficiently given and shall be deemed given when mailed by certified mail, postage prepaid,
with proper address as indicated below or, as to Other Beneficiaries, to a proper address
specified in or pursuant to a Supplemental Indenture; provided, however, any notices,
certificates, Issuer Orders or other communications hereunder to the Trustee may be given by
facsimile. The Issuer, the Trustee and any Rating Agency may, by written notice given by
each to the others, designate any other address or addresses to which notices, certificates,
Issuer Orders or other communications to them shall be sent when required as contemplated by
this Indenture. Until otherwise provided by the respective parties, all notices,
certificates, Issuer Orders and communications to each of them shall be addressed as
follows:



	 	 	 	 
	 	To the Issuer:
	 	Higher Education Funding I
	 	 	 	c/o The Bank of New York (Delaware), as Delaware Trustee
	 	 	 	502 White Clay Center, Route 273
	 	 	 	Newark, Delaware 19711
	 	 	 	Attention: Corporate Trust Administration
	 	 	 	 
	 	 	 	With a copy to:
	 	 	 	 
	 	 	 	CLF Administration Company LLC
	 	 	 	9477 Waples Street, Suite 100
	 	 	 	San Diego, California 92121
	 	 	 	Attention: Ryan Katz
	 	 	 	 
	 	 	 	and
	 	 	 	 
	 	 	 	Lord Securities Corporation
	 	 	 	48 Wall Street, 27th Floor
	 	 	 	New York, NY 10005
	 	 	 	Attention: Ben Abedine
	 	 	 	 
	 	To the Eligible	 	 
	 	   Lender Trustee:
	 	The Bank of New York
	 	 	 	10161 Centurion Parkway, 2nd Floor
	 	 	 	Jacksonville, Florida 32256
	 	 	 	Attention: Corporate Trust Department






100









 







	 	 	 	 
	 	To the Trustee:
	 	The Bank of New York
	 	 	 	10161 Centurion Parkway, 2nd Floor
	 	 	 	Jacksonville, Florida 32256
	 	 	 	Attention: Corporate Trust Department
	 	 	 	 
	 	To the

Delaware Trustee:
	 	The Bank of New York (Delaware)
	 	 	 	502 White Clay Center, Route 273
	 	 	 	Newark, Delaware 19711
	 	 	 	Attention: Corporate Trust Administration
	 	 	 	 
	 	To the Depositor:
	 	Consolidation Loan Funding II, LLC
	 	 	 	9477 Waples Street, Suite 100
	 	 	 	San Diego, California 92121
	 	 	 	Attention: Ryan Katz
	 	 	 	 
	 	To S&P:
	 	Standard & Poor’s
	 	 	 	55 Water Street
	 	 	 	New York, New York 10041
	 	 	 	Attention: Asset-Backed Surveillance Group
	 	 	 	 
	 	To Moody’s:
	 	Moody’s Investors Service
	 	 	 	99 Church Street
	 	 	 	4th Floor
	 	 	 	New York, New York 10007
	 	 	 	Attention: Structured Finance Group







     (b) Except as is otherwise provided in this Indenture, any provision in this Indenture
for the mailing of notice or other instrument to Holders of Notes shall be fully complied
with if it is mailed by first-class mail, postage prepaid, to each Holder of Notes
outstanding at the address appearing on the Note Register.



     Section 10.05. Counterparts. This Indenture may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.



     Section 10.06. Indenture Constitutes a Security Agreement. An executed counterpart or
certified copy of this Indenture delivered to and accepted by the Trustee shall constitute a
security agreement pursuant to and for all purposes of the Uniform Commercial Code of the State of
Delaware and of any other state or jurisdiction.



     Section 10.07. Payments Due on Non-Business Days. Except as may be otherwise provided in a
Supplemental Indenture, in any case where the principal of, premium, if any, or interest on the
Notes or amounts due to any Beneficiary shall be due on a day other than a Business Day, then
payment of such principal, premium and interest may be made on the next succeeding Business Day
with the same force and effect as if made on the date due and no interest shall accrue for the
intervening period.



101









 





     Section 10.08. Notices to Rating Agencies. So long as any Outstanding Notes are rated by a
Rating Agency, the Trustee agrees to give the Rating Agency prompt written notice of the
appointment of any successor Trustee.



     Section 10.09. Governing Law. This Indenture shall be governed by and be construed in
accordance with the laws of the State of New York without giving effect to the conflicts-of-laws
principles thereof.



     Section 10.10. Rights of Other Beneficiaries. All rights of any Other Beneficiary under this
Indenture to consent to or direct certain remedies, waivers, actions and amendments hereunder shall
cease for so long as such Other Beneficiary is in default of any of its obligations or agreements
under the Swap Agreement or the Credit Enhancement Facility by reason of which such Person is an
Other Beneficiary.



     Section 10.11. Subcontracting by Issuer. The Issuer may contract with other Persons to assist
it in performing its duties under this Indenture, and any performance of such duties by a Person
identified to the Trustee in an Issuer Certificate shall be deemed to be action taken by the
Issuer.



     Section 10.12. Role of Eligible Lender Trustee. The Eligible Lender Trustee has entered into
this Indenture for the sole purpose of pledging, hypothecating, assigning and granting a security
interest in its right, title and interest in the Financed Student Loans and related documentation
and contracts, all as provided in the Granting Clauses and Sections 5.07 and 5.15 hereof. The
Eligible Lender Trustee shall have no responsibility or liability for the payment of the Note or
the performance of any other obligation of the Issuer hereunder, except to the extent of such
pledge, hypothecation, assignment and grant.



     Section 10.13. Limitation of Liability. It is expressly understood and agreed by the parties
hereto that (a) this Indenture is executed and delivered by The Bank of New York (Delaware), not
individually or personally but solely as Delaware Trustee of the Issuer, in the exercise of the
powers and authority conferred and vested in it; (b) each of the representations, undertakings and
agreement herein made on the part of the Issuer is made and intended not as personal
representations, undertakings and agreements by The Bank of New York (Delaware) but is made and
intended for the purpose of binding only the Issuer; (c) nothing herein contained shall be
construed as creating any liability on The Bank of New York (Delaware), individually or personally,
to perform any covenant either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by, through or under the
parties hereto; and (d) under no circumstances shall The Bank of New York (Delaware) be personally
liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligations, representation, warranty or covenant made or undertaken by the Issuer
under this Indenture or the other related documents.



102









 





     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, as of
the day and year first above written.



	 	 	 
	 	HIGHER EDUCATION LOAN FUNDING I
	 	 	 
	 	By
	The Bank of New York (Delaware), not in its
individual capacity but solely as Delaware
Trustee
	 	 	 
	 	By	/s/ William
T. Lewis
	 	Name 	William
T. Lewis
	 	Title 	Senior
Vice President
	 	 	 
	 	THE BANK OF NEW YORK,
as Eligible Lender

Trustee
	 	 	 
	 	By	/s/ Craig S. Wenzler
	 	Name: Craig S. Wenzler
	 	Title: Assistant Vice President
	 	 	 
	 	THE BANK OF NEW YORK, as Trustee
	 	 	 
	 	By	/s/ Craig S. Wenzler
	 	Name: Craig S. Wenzler
	 	Title: Assistant Vice President







S-1









 








Exhibit A




Eligible Loan Acquisition Certificate




     This Eligible Loan Acquisition Certificate is submitted to the Trustee pursuant to the
provisions of Section 4.02 of the Indenture of Trust, dated as of January 1, 2004 (as amended and
supplemented from time to time in accordance with its terms, the “Indenture”), from Higher
Education Funding I (the “Issuer”) and The Bank of New York, as eligible lender trustee, to The
Bank of New York, as indenture trustee. All capitalized terms used in this Certificate and not
otherwise defined herein shall have the respective meanings given to such terms in the Indenture.
In your capacity as Trustee, you are hereby authorized and requested to disburse (i) to the
Lender(s) identified in the schedule attached hereto (the “Student Loan Acquisition Schedule”) the
amount(s) specified in such Schedule from the Acquisition Fund for the acquisition of Eligible
Loans, and any related Add-On Loan; (ii) to the Depositor, the amount of Premium set forth in such
Schedule (less an amount equal to the origination fees set forth in the Schedule which are payable
to the Secretary of Education on any Consolidation Loan set forth in the Student Loan Acquisition
Schedule attached hereto), (iii) to The Bank of New York Trust Company, N.A., as eligible lender
trustee pursuant to an Amended and Restated Eligible Lender Trust Agreement, dated as of January 1,
2004, between the Depositor and The Bank of New York Trust Company, N.A. for deposit to the
Depositor Trust Account established thereunder, an amount equal to the origination fees set forth
in the Student Loan Acquisition Schedule which are payable to the Secretary of Education on the
Eligible Loans set forth in the Student Loan Acquisition Schedule attached hereto and (iv) to the
Borrower Benefits Fund established pursuant to the Indenture, an amount equal to 1% of any
Consolidation Loans set forth on the Student Loan Acquisition Schedule attached hereto identified
as having an interest rate of 5.00% or greater. With respect to the Eligible Loans so to be
acquired, the Issuer hereby certifies as follows:




     (a) The Eligible Loans to be acquired are those specified in the Student Loan
Acquisition Schedule (the “Acquired Eligible Loans”).




     (b) The amount to be disbursed pursuant to this Certificate does not exceed the amount
permitted under the provisions of Section 4.02 of the Indenture.




     (c) Each Acquired Eligible Loan is an Eligible Loan authorized so to be acquired by the
Indenture and does not exceed any limitations imposed on the acquisition of Eligible Loans
contained in any Supplemental Indenture.




     (d) You (or your agent) have been previously, or are herewith, provided with the
following items:




     (i) with respect to each Acquired Eligible Loan, a copy of the Student Loan
Purchase Agreement pursuant to which the Issuer acquired such Acquired Eligible
Loan;



A-1









 






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




     (iii) evidence in form satisfactory to the Trustee that each action necessary
to perfect a first security interest in each of the Acquired Eligible Loans in favor
of the Trustee has been accomplished; and




     (iv) instruments duly assigning the Acquired Eligible Loans to the Issuer or
the Eligible Lender Trustee.




     (e) The Issuer is not, on the date hereof, in default under the Indenture or any other
agreement relating to the Acquired Eligible Loans, and, to the best knowledge of the Issuer,
the Depositor is not in default under any agreement relating 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 (d) hereof.




     (f) All of the conditions specified in the Student Loan Purchase Agreement relating 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.




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



Witness my hand this ____ day of _____________, ______.




	 	 	 
	

	HIGHER EDUCATION LOAN FUNDING I
	 	 	 
	 

	By:
	LORD SECURITIES CORPORATION,
	

	 	as Issuer Administrator
	 	 	 
	 

	By	 
	 	Name 	 
	 	Title 	 







A-2









 








Exhibit B




FORM OF STUDENT LOAN PURCHASE AGREEMENT





B-1









 






LOAN PURCHASE AGREEMENT




     This Loan Purchase Agreement is made and entered into as of the ___day of ___, ___by
and between ___, as seller (“Seller”), and HIGHER EDUCATION FUNDING I a Delaware
statutory trust, as purchaser (“Purchaser”), acting by and through their eligible lender trustees.



WITNESSETH:




     WHEREAS, Seller, through its eligible lender trustee, is engaged in a program of originating,
funding, purchasing, holding and selling Eligible Loans and which are made to eligible borrowers
and the proceeds of which are used to pay the costs incurred by students attending post-secondary
educational institutions;



     WHEREAS, Purchaser, through its eligible lender trustee, is engaged in or wishes to be engaged
in a program of purchasing, holding and selling Eligible Loans made to eligible borrowers in
accordance with the provisions of the Act; and



     WHEREAS, Seller, through its eligible lender trustee, desires to sell to Purchaser, through
its eligible lender trustee, certain Eligible Loans in accordance with the terms and conditions of
this Agreement.



     NOW, THEREFORE, in consideration of the foregoing premises and mutual covenants herein
contained, the parties agree as follows:



ARTICLE I

DEFINITIONS




     The following words and terms used in this Agreement shall have the following meanings unless
otherwise provided herein or unless the context or use clearly indicates another or different
meaning or intent:



     “Act” shall mean Title IV, Part B of the Higher Education Act of 1965 (20 USC § 1071
et. seq.), and includes insofar as the context requires Title VII of the Public Health Service Act
(42 USC. §292 et seq.), as either is amended and in effect from time to time, or any successor
enactment thereto, the effective administrative regulations promulgated thereunder, and any binding
directives issued by the Secretary pursuant thereto.



     “Agreement” shall mean this Agreement, including all exhibits attached hereto, and any
supplements or amendments hereto.



     “Business Day” shall mean any day other than December 30, December 31, April 14, April 15,
such other dates as may be agreed to in writing by the Trustee, the Market Agent, the



1









 







Auction
Agent, the Broker-Dealer and the Issuer, or a Saturday, Sunday, holiday or day on
which banks located in the City of New York, New York, or the New York Stock Exchange, the
Trustee or the Auction Agent, are authorized or permitted by law or executive order to close.



     “Certificate of Insurance” shall mean a certificate of federal loan insurance issued with
respect to an Eligible Loan by the Secretary pursuant to the Act.



     “Code” shall mean the Internal Revenue Code of 1986, as amended or supplemented from time to
time, or any successor federal act, and all regulations promulgated from time to time thereunder.



     “Commitment” shall mean Seller’s commitment to sell Eligible Loans to Purchaser pursuant to
Section 21 hereof.



     “Consolidation Loan” shall mean a Student Loan authorized under Section 428C of the Act
consolidating Eligible Loans.



     “Contract of Insurance” shall mean a contract of insurance under the Act between the Secretary
and the Eligible Lender Trustee for the benefit of the Seller or the Secretary and the Eligible
Lender Trustee for the benefit of the Purchaser, providing for the Insurance of Student Loans.



     “Eligible Borrower” shall mean a borrower who is eligible under the Act to be the obligor of a
loan for consolidating two or more Student Loans, or who is eligible under the Act to be an obligor
of a loan made pursuant to the Act.



     “Eligible Institution” shall mean (i) an institution of higher education; (ii) a vocational
school; or (iii) with respect to students who are nationals of the United States, an institution
outside the United States which is comparable to an institution of higher education or to a
vocational school and which has been approved by the Secretary.



     “Eligible Lender Trust Agreement” means (i) the Eligible Lender Trust Agreement, dated as of
January 1, 2004, between the Purchaser, as grantor, and the Eligible Lender Trustee, as trustee,
and any similar agreement entered into by the Purchaser and an “eligible lender” under the Higher
Education Act pursuant to which such “eligible lender” holds Student Loans as legal owner in trust
for the Purchaser as beneficial owner, in each case as supplemented or amended from time to time;
or (ii) the Eligible Lender Trust Agreement, dated as of January 1, 2004 between the Seller, as
grantor, and the Eligible Lender Trustee, as trustee, and any similar agreement entered into by the
Seller and an “eligible lender” under the Higher Education Act pursuant to which such “eligible
lender” holds Student Loans as legal owner in trust for the Seller as beneficial owner, in each
case as supplemented or amended from time to time; as is applicable.



2









 





     “Eligible Lender Trustee” means, for Seller, The Bank of New York Trust Company, NA., as
trustee under the Eligible Lender Trustee Agreement, and its successors and assigns in such
capacity and, for Purchaser, The Bank of New York as trustee under the Eligible Lender Trustee
Agreement, and its successors and assigns in such capacity.



     “Eligible Loan” shall mean a Student Loan which: (i) has been or will be made to a borrower
for post-secondary education; (ii) is Guaranteed; and (iii) is an “eligible loan” as defined in
Section 438 of the Higher Education Act for purposes of receiving Special Allowance Payments;
provided, however, that if, after any reauthorization or amendment of the Higher Education Act,
loans authorized thereunder, including their benefits, are materially different from loans
authorized prior to such reauthorization or amendment, such loans authorized after such
reauthorization or amendment shall not constitute Eligible Loans unless a Rating Agency
Confirmation is obtained.



     “Federal Reimbursement Contract” shall mean the agreement between the Guarantee Agency and the
Secretary providing for the payment by the Secretary of amounts authorized to be paid pursuant to
the Act, including (but not limited to) reimbursement of amounts paid or payable upon defaulted
Eligible Loans and other Student Loans Guaranteed or Insured by the Guarantee Agency and Interest
Benefit Payments and Special Allowance Payments to holders of qualifying Student Loans Guaranteed
or Insured by the Guarantee Agency.



     “Guarantee” or “Guaranteed” shall mean, with respect to a Student Loan, (i) the insurance or
guarantee by the Guarantee Agency pursuant to such Guarantee Agency’s Guarantee Agreement of the
maximum percentage of the principal of and accrued interest on such Student Loan allowed by the
terms of the Act with respect to such Student Loan, and (ii) the coverage of such Student Loan by a
Federal Reimbursement Contract, providing, among other things, for reimbursement to the Guarantee
Agency for payments made by it on defaulted Student Loans insured or guaranteed by the Guarantee
Agency of at least the minimum reimbursement allowed by the Federal Reimbursement Contract and the
Act with respect to a particular Student Loan.



     “Guarantee Agency” shall mean any state agency or private nonprofit institution or
organization which has Federal Reimbursement Contracts in place and has entered into a Guarantee
Agreement with the Eligible Lender Trustee, and any such guarantor’s successors and assigns.



     “Guarantee Agreement” shall mean any guarantee or lender agreement with any Guarantee Agency
and any amendments to the foregoing.



     “Guaranteed Loan” shall mean a Student Loan which is Guaranteed.



     “Insurance” or “Insured” or “Insure” shall mean, with respect to a Student Loan, the insurance
by the Secretary under the Act (as evidenced by a Contract of Insurance issued or entered into
under the provisions of the Act) of the maximum percentage of the principal of and



3









 







accrued interest
on such Student Loan allowed under the Act with respect to such Student Loan.



     “Insured Loan” shall mean a Student Loan which is Insured.



     “Issuer Administrator” shall mean Lord Securities Corporation.



     “Loan Transfer Addendum” shall mean the form set forth as Exhibit A, attached hereto and
incorporated herein by this reference.



     “Notes” shall mean all notes, bonds or other obligations issued pursuant to the Indenture of
Trust dated January 1, 2004 from Purchaser and The Bank of New York as Eligible Lender Trustee to
The Bank of New York as Indenture Trustee.



     “Portfolio” shall mean a group of Eligible Loans sold to Purchaser by Seller pursuant to
Section 2.1 hereof on a Scheduled Sale Date.



     “Principal Balance” shall mean the original principal amount of a Student Loan,
plus  capitalized interest (if any) and items which may not be guaranteed or
insured (such as late charges), less  payments by or on behalf of the Student
Borrower.



     “Purchase Price” shall mean the price as set forth in the Loan Transfer Addendum.



     “Purchaser” shall mean Higher Education Funding I, or its successors or assigns, by and
through its Eligible Lender Trustee.



     “Rating Agency” shall mean any rating agency that shall have an outstanding rating on any of
the Notes pursuant to a request by the Purchaser.



     “Rating Agency Confirmation” shall mean, with respect to any action, that each of the Rating
Agencies shall have notified the Purchaser and the Trustee under the Indenture of Trust dated
January 1, 2004 in writing that such action will not result in a reduction, qualification or
withdrawal of the then-current rating of any of the Notes.



     “Scheduled Sale Date” shall mean the dates specified in the report required by Section 4.3 of
this Agreement and in the applicable Loan Transfer Addendum for purchase of a Portfolio of Eligible
Loans by Purchaser, unless such date is changed by mutual agreement of the parties, in which case
the Scheduled Sale Date shall be the new date agreed to by the parties.



     “Secretary” shall mean the Secretary of the United States Department of Education or any
successor to the pertinent functions of that official or department under the Act, or, when the
context so requires, the former Commissioner of Education of the former United States Department of
Health, Education and Welfare and includes the Secretary of the United States Department of Health
and Human Services.



4









 





     “Servicer” shall mean Great Lakes Educational Loan Services, Inc., ACS Education Services Inc.
and any other organization with which the Purchaser or Seller has (or the Purchaser and its
Eligible Lender Trustee or the Seller and its Eligible Lender Trustee have) entered into a
servicing agreement; in any case, so long as such party acts as servicer of the Eligible Loans.



     “Seller” shall mean Consolidation Loan Funding II, LLC, by and through its Eligible Lender
Trustee.



     “Student Borrower” shall mean the obligor on a Student Loan.



     “Student Loan” shall mean a loan under the Higher Education Act to an Eligible Borrower for
education at an Eligible Institution (or a loan to consolidate the same).



     “Subadministrator” shall mean CLF Administration Company, L.L.C.



ARTICLE II

LOAN SALE COMMITMENT




     2.1 Loan Sale Commitment. Subject to the terms and conditions of this Agreement, and
in express reliance upon the representations, warranties and covenants set forth herein, Seller
(via its Eligible Lender Trustee ) agrees to sell, and Purchaser (via its Eligible Lender
Trustee) agrees to purchase, all Eligible Loans tendered by the Seller to the Purchaser to the
extent the Eligible Loans meet all eligibility requirements and to the extent the Purchaser has the
funds available to purchase the Eligible Loans.



ARTICLE III

SERVICING




     3.1. Servicing of Other Eligible Loans. All of the Eligible Loans that are
sold by Seller to Purchaser pursuant to this Agreement are currently serviced (or will be serviced
on the Scheduled Sale Date) by the Servicer(s) identified in the Loan Transfer Addendum. Such
Servicer shall either be Great Lakes Educational Loan Services, Inc., ACS Education Services Inc.
or another servicer with whom Purchaser has a servicing agreement that is satisfactory to (i) The
Bank of New York or its successor as Trustee under the Indenture of Trust and (ii) The Bank of New
York or its successor as Purchaser’s Eligible Lender Trustee. On the effective date for the sale
of those Eligible Loans, Purchaser shall cause the current servicer(s) or such other servicer(s) as
Purchaser may select to commence servicing such Portfolio at Purchaser’s expense and under the
identification number of Purchaser or its designee.



5









 





ARTICLE IV

SALE/PURCHASE OF PORTFOLIOS




     4.1 Tender of Eligible Loans to Purchaser. With respect to a Portfolio of Eligible
Loans to be sold to Purchaser pursuant to Section 2.1 hereof, prior to or on the Scheduled Sale
Date (or at such other time as the parties may agree), Seller shall furnish Purchaser or its
designee with a list of the Eligible Loans to be included in such Portfolio, and shall authorize
and direct the Servicer of the Eligible Loans to release such information and documentation to
Purchaser or its designee, in its reasonable judgment, deems necessary and appropriate to undertake
a review of such loans to determine whether (i) such loans constitute Eligible Loans under this
Agreement, and (ii) the Portfolio, aggregated with the other Eligible Loans that have been sold to
Purchaser by Seller if appropriate, comply with the requirements set forth in Section 3.1 hereof.



     4.2 Conditions of Purchase. Purchaser’s obligation to purchase and pay for Eligible
Loans in a Portfolio hereunder shall be subject to the following conditions precedent:




     (a) the Eligible Loans in the Portfolio, aggregated with the other Eligible Loans that
have been sold to Purchaser by Seller if appropriate, shall meet the requirements described
in Section 3.1 hereof;




     (b) all representations, warranties and statements by or on behalf of Seller contained
in this Agreement are true on the Scheduled Sale Date;




     (c) any notification to or approval by the Secretary or Guarantee Agency required by
the Act or the Guarantee Agreement as a condition to the assignment of Eligible Loans shall
have been made or received and evidence thereof delivered to both Purchaser and the Eligible
Lender Trustee;




     (d) without a prior Rating Agency Confirmation, all Eligible Loans purchased pursuant
to this Agreement shall have been originated by Great Lakes Educational Loan Services, Inc.
or ACS Education Services, Inc.; and




     (e) the entire interest of Seller in each Eligible Loan shall have been duly assigned
by endorsement, such endorsement to be without recourse except as provided in Article V
hereof.



     4.3 Consummation of Sale and Purchase of Portfolio. To consummate the sale and
purchase of a Portfolio of Eligible Loans, on or before the Scheduled Sale Date, Seller shall
deliver via facsimile to the Eligible Lender Trustee on behalf of Purchaser a Loan Transfer
Addendum, the Seller’s Closing Certificate, a form of which is attached as Exhibit B, and such
instruments of transfer, including a bill of sale, a form of which is attached as Exhibit D, and
blanket endorsement, a form of which is attached as Exhibit C, as Purchaser shall reasonably



6









 







deem
necessary for conveyance of title of the Eligible Loans contained in the Portfolio free and
clear of all liens, encumbrances and security interests. Seller hereby grants to Purchaser,
and Purchaser shall have, a security interest in the contract rights of Seller to originate, fund
and/or purchase such loans and in its interest in such loans pending the completion of the sale to
Purchaser. Seller shall retain all ownership rights with respect to Eligible Loans in a Portfolio
at all times prior to the effective sale of such Portfolio. Purchaser shall pay for any reasonable
transfer fees as may be required to be paid to the Secretary or to the Servicer.




     (a) On the Scheduled Sale Date, Seller shall arrange for the Servicer of the Eligible
Loans to notify the Eligible Lender Trustees via facsimile, by no later than 12:00 noon EST
or EDT, as is applicable, that (i) the day is a Scheduled Sale Date and (ii) the dollar
amount of the Eligible Loans which are going to be disbursed by the Servicer on the
Scheduled Sale Date. Seller shall also arrange for the Servicer of the Eligible Loans to
email to the Seller, the Issuer Administrator or its Subadministrator and the Purchaser’s
Eligible Lender Trustee a detailed roster of the Eligible Loans that were so disbursed.




     (b) By 12:00 noon EST or EDT, as is applicable, on the Scheduled Sale Date, Seller
shall deliver to the Purchaser’s Eligible Lender Trustee on behalf of Purchaser a Loan
Transfer Addendum.




     (c) On the Scheduled Sale Date, after receipt of the aforesaid Loan Transfer Addendum
and the documentation required to be provided by this Section, Purchaser shall arrange for a
transfer into an Account or Accounts maintained at The Bank of New York, designated by
Seller and satisfactory to the Purchaser, or wire transfer as directed by the Purchaser, the
amount necessary for the purchase of the Eligible Loans. The purchase and sale of the
Portfolio shall be effective simultaneously with the payment of the Purchase Price.



     4.4 Other Information and Documents. Seller shall furnish or make available to
Purchaser such additional information concerning Seller’s Student Loan portfolio as Purchaser may
reasonably request. Seller shall execute all other documents and take all other steps as may be
reasonably requested by Purchaser or the Eligible Lender Trustee from time to time to effect the
sale hereunder of a Portfolio of Eligible Loans.



ARTICLE V

REPURCHASE OBLIGATION OF SELLER




     5.1 Conditions Precedent to Repurchase Obligation. At the request of Purchaser or its
Eligible Lender Trustee, Seller shall repurchase any Student Loan purchased by Purchaser pursuant
to this Agreement if:




     (a) any representation or warranty made or furnished by Seller in or pursuant to this
Agreement shall prove to have been materially incorrect as to such Student Loan,



7









 





unless
resulting from an act or omission of Purchaser;


     (b) the Secretary or a Guarantee Agency, as the case may be, refuses to honor all or
part of a claim filed with respect to a Student Loan (including any claim for interest
subsidy, Special Allowance Payments, Insurance, reinsurance or Guarantee payments) on
account of any circumstance or event that occurred prior to the sale of such Student Loan to
Purchaser, unless resulting from an act or omission of Purchaser; or




     (c) On account of any wrongful or negligent act or omission of Seller or its servicing
agent that occurred prior to the sale of a Student Loan to Purchaser, a defense is asserted
by a maker (or endorser, if any) of the Student Loan with respect to his or her obligation
to pay all or any part of the Student Loan, and Purchaser or the Eligible Lender Trustee in
good faith believes that the facts reported, if true, raise a reasonable doubt as to the
enforceability of such Student Loan.



     5.2 Repurchase by Seller. Upon the occurrence of any of the conditions set forth in
Section 5.1 hereof and upon the request of Purchaser or the Eligible Lender Trustee,
Seller shall pay to the Eligible Lender Trustee, for the account of Purchaser, an amount equal to
the then-outstanding principal balance of such Student Loan, plus any premium in excess of par paid
with respect to such Student Loan, plus interest and Special Allowance Payments accrued and unpaid
with respect to such Student Loan from the Scheduled Sale Date to and including the date of
repurchase, plus any attorneys’ fees, legal expenses, court costs, servicing fees or other expenses
incurred by Purchaser, the Eligible Lender Trustee or the appropriate successors or assigns in
connection with such Student Loans.



ARTICLE VI

ONGOING OBLIGATIONS OF SELLER




     6.1 Obligation of Seller to Forward Payments. Seller shall promptly remit, or
cause to be remitted, to the Eligible Lender Trustee as it may direct, all funds received by Seller
after the Scheduled Sale Date which constitute payments of principal, or interest or Special
Allowance Payments accrued after the Scheduled Sale Date with respect to any Student Loan.



     6.2 Obligation of Seller to Forward Communications. Seller shall immediately transmit
to Purchaser any communication received by Seller after the Scheduled Sale Date with respect to a
Student Loan or the borrower under such a Student Loan. Such communication shall include, but not
be limited to, letters, notices of death or disability, adjudication of bankruptcy and similar
documents and forms requesting deferment of repayment or loan cancellations.



     6.3 Notification to Student Borrowers. Seller and Purchaser shall cause the Servicers
to provide each borrower under the Eligible Loans purchased under this Agreement with notice of the
assignment and transfer to the Eligible Lender Trustee for the account and on behalf of Purchaser
of Seller’s interest in such Eligible Loans as required by the Act.



8









 





     6.4 No Modification of Lender Agreements. Seller will consent to no amendments to, or
modifications of, the Contract of Insurance or Guarantee Agreement that may affect Eligible Loans
which are sold or to be sold pursuant to this Agreement without (i) the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, and (ii) Rating Agency Confirmation.
Amendments or modifications required by the Act are excluded from the requirement of this Section
6.4.



ARTICLE VII




REPRESENTATIONS, WARRANTIES AND COVENANTS




     7.1 Representations. Warranties and Covenants of Seller. Seller hereby represents,
covenants, and warrants to Purchaser that:




     (a) Organization and Authority of Seller. Seller is duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has all
necessary statutory power and authority to own its assets and carry on its business as now
being conducted; Seller has, and its officers and Eligible Lender Trustee acting on its
behalf have, all necessary statutory power and authority to make and perform this
Agreement, and has the power and authority to sell, assign and transfer Student Loans to
the Eligible Lender Trustee on behalf of Purchaser, and to repurchase Student Loans as
required under the terms hereof.




     (b) Eligible Lender Status. Seller’s Eligible Lender Trustee if applicable, is
an “eligible lender” under the Act.




     (c) Legal and Binding Obligation. The execution, delivery and performance of
this Agreement by Seller have been duly authorized by all necessary corporate action, and do
not require any stockholder approval or approval or consent of, or notice to, any trustee or
holders of indebtedness or obligations of Seller; upon due execution and delivery by the
parties hereto, this Agreement will constitute the legal, valid and binding obligation of
Seller, enforceable in accordance with its terms.




     (d) No Conflicts. Neither the execution, delivery or performance by Seller of
this Agreement, nor the consummation or performance by Seller of the transactions
contemplated hereby, will conflict with, result in a violation of, or constitute a default
(or an event which could constitute a default with the passage of time or notice or both)
under, (i) any of the terms of Seller’s charter or bylaws, or (ii) any indenture, mortgage,
contract or other agreement to which Seller is a party or by which it or its properties are
bound, or any law or regulation by which it or its properties are bound, where, in the case
of this clause (ii), such conflict, violation or default could have a material adverse
effect on Seller’s ability for perform its obligations hereunder. Seller is not a party to
or bound by any agreement or instrument or subject to any charter or other corporate
restrictions or judgment, order, writ, injunction, decree, law, rule or regulation which may
materially and adversely affect the ability of Seller to perform its obligations under this
Agreement.



9









 







     (e) No Defaults or Violations. Seller is not in default under any mortgage,
deed of trust, indenture or other instrument or agreement to which Seller is a party or by
which it or its properties are bound, or in violation of any law or regulation, which
default or violation could have a material adverse effect on Seller’s ability for perform
its obligations hereunder.




     (f) No Consents. No consent, approval or authorization of any government or
governmental body, including (without limitation) the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System or any state bank regulatory agency, is required in
connection with the execution, delivery and performance of this Agreement, or the
consummation of the transactions contemplated hereby.




     (g) No Litigation. There are no pending or threatened actions or proceedings
by or before any court, administrative agency or arbitrator, that could if adversely
determined, materially and adversely affect the ability of Seller to perform its obligations
hereunder, and there are no presently existing orders of any court, administrative agency or
arbitrator that could have a material and adverse effect on the ability of Seller to perform
its obligations hereunder.




     (h) Continuing Obligations of Seller. Seller agrees that during the term of
this Agreement, it will (i) remain in good standing and qualified to do business under the
laws of the State of Delaware and the jurisdictions in which it operates, (ii) conduct its
business in accordance with all applicable state and federal laws, and (iii) continue to be
qualified to carry out this Agreement.



     7.2 Representations, Warranties and Covenants of Seller with Respect to Student Loans.
Seller hereby represents, covenants, and warrants to Purchaser that, except for any condition
resulting from an act or omission of Purchaser:




     (a) Accuracy of Information. Any information furnished by Seller to Purchaser
or its agents with respect to any Eligible Loan is true, complete and correct.




     (b) Validity of Loans. Each Eligible Loan has been duly executed and delivered
and constitutes the legal, valid and binding obligation of the maker (and the endorser, if
any) thereof, enforceable in accordance with its terms.




     (c) No Defenses Against Repayment of Loans. The amount of the unpaid principal
balance of each Eligible Loan is true and owing, and no counterclaim, offset, defense or
right to rescission exists with respect to any Eligible Loan which can be asserted and
maintained or which, with notice, lapse of time, or the occurrence or failure to occur of
any act or event, could be asserted and maintained by the borrower against the



10









 






Eligible
Lender Trustee as assignee thereof. Seller shall take all reasonable actions to assure that
no maker of an Eligible Loan has or may acquire a defense to the payment
thereof. The rate of interest carried by each Eligible Loan is the maximum which was
allowable by law at the time the loan was made, and no such Eligible Loan carries a rate of
interest in excess of that permitted by the provisions of the Act or such other rate as was
applicable under a borrower’s benefit program.




     (d) Ownership and Location of Loans: Existence of Liens. Seller is the sole
owner and holder of title to each Eligible Loan and has full right and authority to sell and
assign the same free and clear of all liens, pledges or encumbrances, and upon the
endorsement and delivery of promissory notes evidencing such Eligible Loan to Eligible
Lender Trustee on behalf of Purchaser pursuant to this Agreement, Eligible Lender Trustee on
behalf of Purchaser will acquire full right, title and interest in the Eligible Loan free
and clear of all liens, pledges or encumbrances whatsoever. All documentation relating to
the Eligible Loans, including the original promissory note for each Eligible Loan, is now in
the possession of the servicer thereof.




     (e) Guarantee and Insurance on Loans. Each Eligible Loan to be sold hereunder
is either Insured or Guaranteed. With respect to all Insured Loans being acquired, a
Contract of Insurance is in full force and effect with respect thereto, the applicable
Certificates of Insurance are valid and binding upon the parties thereto in all respects,
Seller is not in default in the performance of any of its covenants and agreements made in
respect thereof, and such Insurance is freely transferable as an incident to the sale of
each Eligible Loan to be sold. With respect to all Guaranteed Loans being acquired, a
Guarantee Agreement is in full force and effect with respect thereto and is valid and
binding upon the parties thereto in all material respects, Seller is not in default in the
performance of any of its covenants and agreements made in such Guarantee Agreement, and
such Guarantee is freely transferable as an incident to the sale of each Eligible Loan to be
sold. All amounts due and payable to the Secretary or the Guarantee Agency, as the case may
be, have been or will be paid in full by Seller at the time Eligible Loans are sold to
Purchaser, and none of the Eligible Loans to be sold to Purchaser has at any time been
tendered to either the Secretary or the Guarantee Agency for payment. Seller will not, with
respect to any Eligible Loan subject to this Agreement, agree to release the Guarantee
Agency or the Secretary from any of its contractual obligations to Guarantee or Insure such
loan, or agree to otherwise alter, amend or renegotiate any terms or conditions under which
such Eligible Loan is Guaranteed or Insured, without the express prior written consent of
Purchaser and the Eligible Lender Trustee.




     (f) Compliance with the Act. Each Eligible Loan complies in all respects with
the requirements of the Act and is an Eligible Loan as those terms are defined in this
Agreement.



11









 






     (g) Compliance with Federal Laws. Each Eligible Loan was made in compliance
with all applicable local, state and federal laws, rules and regulations, including without
limitation all applicable nondiscrimination, truth-in-lending, consumer
credit and usury laws and is an Eligible Loan as those terms are defined in this
Agreement.




     (h) No Discrimination. In making each Eligible Loan to be purchased by
Purchaser pursuant to this Agreement, Seller has not discriminated based upon the
educational institutions attended by, or the age, sex, race, national origin, color,
religion, handicapped status, income, attendance at a particular eligible institution within
the area served by Purchaser, length of the Student Borrower’s educational program, or the
Student Borrower’s academic year in school.




     (i) Due Diligence in Servicing Loans. Seller and any independent servicer have
each exercised and shall continue until the Scheduled Sale Date to exercise due diligence
and reasonable care in making, administering, servicing and collecting the Eligible Loans
and Seller has conducted a reasonable investigation of sufficient scope and content to
enable it duly to make the representations and warranties contained in this Agreement.
Seller shall be solely responsible for the payment of the costs and expenses incident to
origination of the Eligible Loans, without any right of reimbursement therefor from
Purchaser.




     (j) Origination Fees. Seller has reported or shall report the amount of
origination fees (if any) authorized to be collected with respect to any Eligible Loan
pursuant to the Act to the Secretary for the period in which such fee was authorized to be
collected; and Seller has made and shall make any refund of an origination fee collected in
connection with any Eligible Loan which may be required pursuant to the Act.




     (k) Insurance Premium. For each Eligible Loan Seller has reported or shall
report the amount of the insurance premium authorized to be collected, and has paid or shall
pay said premium to the Guarantee Agency or the Secretary with all rights therein inuring to
Purchaser; and in the event a Student Borrower withdraws within the period specified as
qualifying for a cancellation refund by the Guarantee Agency, Seller agrees to pay the
amount of the premium to be refunded to Purchaser.



     7.3 Representations Warranties and Covenants of Purchaser. Purchaser hereby
represents, covenants, and warrants to Seller that:




     (a) Organization and Authority of Purchaser. Purchaser is a duly organized,
validly existing Delaware statutory trust in good standing under the laws of the State of
Delaware; Purchaser has, and its Eligible Lender Trustee and officers acting on its behalf
have, all necessary statutory power and authority to make and perform this Agreement,
including (without limitation) the power and authority to purchase Student Loans from



12









 






Seller
under the terms and conditions of this Agreement.




     (b) Legal and Binding Obligation. The execution, delivery and performance of
this Agreement by Purchaser have been duly authorized by all necessary action, and do not
require any member approval or approval or consent of, or notice to, any trustee or holders
of indebtedness or obligations of Purchaser; upon due execution and delivery by the parties
hereto, this Agreement will constitute the legal, valid and binding obligation of Purchaser,
enforceable in accordance with its terms.




     (c) No Conflict. Neither the execution, delivery and performance by Purchaser
of this Agreement, nor the consummation or performance by Purchaser of the transactions
contemplated hereby, will conflict with, result in a violation of, or constitute a default
(or an event which could constitute a default with the passage of time or notice or both)
under, (i) any of the terms of Purchaser’s organizational documents, or (ii) any indenture,
mortgage, contract or other agreement to which Purchaser is a party or by which it or its
properties are bound, or any law or regulation by which it or its properties are bound,
where, in the case of this clause (ii), such conflict, violation or default could have a
material adverse effect on Purchaser’s ability for perform its obligations hereunder.
Purchaser is not a party to or bound by any agreement or instrument or subject to any
charter or other corporate restrictions or judgment, order, writ, injunction, decree, law,
rule or regulation which may materially and adversely affect the ability of Purchaser to
perform its obligations under this Agreement.




     (d) No Defaults or Violations. Purchaser is not in default under any mortgage,
deed of trust, indenture or other instrument or agreement to which Purchaser is a party or
by which it or its properties are bound, or in violation of any law or regulation, which
default or violation could have a material adverse effect on Purchaser’s ability for perform
its obligations hereunder.




     (e) No Consents. No consent, approval or authorization of any government or
governmental body is required in connection with the execution, delivery and performance of
this Agreement, or the consummation of the transactions contemplated hereby.




     (f) No Litigation. There are no pending or threatened actions or proceedings
by or before any court, administrative agency or arbitrator, that could if adversely
determined, materially and adversely affect the ability of Purchaser to perform its
obligations hereunder, and there are no presently existing orders of any court,
administrative agency or arbitrator that could have a material and adverse affect on the
ability of Purchaser to perform its obligations hereunder.




     (g) Continuing Obligation of Purchaser. Purchaser agrees that during the term
of this Agreement, it will (i) remain in good standing and qualified to do business



13









 






under
the laws of the state of its organization and any other jurisdictions in which it operates,
(ii) conduct its business in accordance with all applicable state and federal laws, and
(iii) continue to be qualified to carry out this Agreement.



     7.4 Representations Warranties and Covenants with Respect to Eligible Lender Trustees.
Seller and Purchaser hereby represent, covenant and warrant that if and to the extent that they
are acting via Eligible Lender Trustees, then each such Eligible Lender Trustee has no personal
liability for any representation, covenant, warranty or other obligation undertaken in this
Agreement and that such Eligible Lender Trustee acts only for the Seller or Purchaser (as
applicable) and that recourse (if any) may be had only against such Seller or Purchaser and not
against such Eligible Lender Trustee or its separate assets. Each Eligible Lender Trustee shall be
a third-party beneficiary of this Section 7.4.



ARTICLE VIII

MISCELLANEOUS




     8.1 Communications and Notices. Unless otherwise expressly provided herein, all
notices, requests, demands or other instruments which may or are required to be given by either
party to the other or to the Eligible Lender Trustee, shall be in writing, and each shall be deemed
to have been properly given when served personally on an officer of the party to whom such notice
is to be given, or upon expiration of a period of 48 hours from and after the postmark thereof when
mailed postage prepaid by registered or certified mail, requesting return receipt, addressed as
follows:



     If to Seller:



Consolidation Loan Funding II, LLC

c/o CLF II Management Corp. Manager

Att: Mr. Ryan D. Katz, President

9477 Waples Street, Suite 100

San Diego, CA 92121

Facsimile: (858) 909-0284

e-mail: rkatz@slccloans.com



with copies to:



The Bank of New York Trust Co., N.A.,

as Seller’s Eligible Lender Trustee

Attn: Corporate Trust Manager

10161 Centurion Parkway, 2nd Floor

Jacksonville, Florida 32256

Facsimile: (904) 645-1931

e-mail: wcardozo@bankofny.com



14









 





     If to Purchaser:





Higher Education Funding I 
c/o CLF Administration Company, L.L.C.

c/o Lord Securities Corporation

Attention: Ben Abedine

48 Wall Street, 27th Floor

New York, NY 10005

Facsimile: (212) 346-9012

e-mail: bba@lordspv.com



with a copy to:



The Bank of New York,

as Purchaser’s Eligible Lender Trustee

Attn: Corporate Trust Manager

10161 Centurion Parkway, 2nd Floor

Jacksonville, Florida 32256

Facsimile: (904) 645-1931

e-mail: wcardozo@bankofny.com



     If to Issuer Administrator:



Lord Securities Corporation

Attention: Ben Abedine

48 Wall Street, 27th Floor

New York, NY 10005

Facsimile:(212) 346-9012

e-mail: bba@lordspv.com



     If to Subadministrator:



CLF Administration Company, L.L.C.

Att: Mr. Ryan D. Katz, President

9477 Waples Street, Suite 100

San Diego, CA 92121

Facsimile: (858) 909-0284

e-mail: rkatz@slccloans.com



In any instance with a copy to:




John J. Witmeyer, Esq.

Ford Marrin Esposito Witmeyer & Gleser, L.L.P.



15









 





Wall Street Plaza

New York, NY 10005-1875

Facsimile: (212) 344-4294

e-mail: jjwitmeyer@fmew.com


Any party may change the address and name of the addressee to which subsequent notices are to be
sent to it, by notice to the others given as aforesaid, but any such notice of change, if sent by
mail, shall not be effective until the 5th day after it is mailed.




     8.2 Forms of Instruments, Proceedings. All instruments relating to the sale and
purchase of the Student Loans, and all proceedings to be taken in connection with this Agreement
and the transactions contemplated herein, shall be in form and substance mutually satisfactory to
Seller and Purchaser and their respective counsel.



     8.3 Payment of Expenses. Each party to this Agreement shall pay its own expenses
incurred in connection with transactions herein contemplated.



     8.4 Non-Business Days. If the date for taking any action required hereunder is not a
Business Day, then such action can be taken, without interest or penalty, on the next succeeding
Business Day, with the same force and effect as if such action was taken on the required date.



     8.5 Amendments, Modifications and Waivers. The provisions of this Agreement cannot be
amended, waived or modified unless such amendment, waiver or modification be in writing and signed
by the parties hereto and the Eligible Lender Trustee. Inaction or failure to demand strict
performance shall not be deemed a waiver.



     8.6 Severability. If any provision of this Agreement shall be held, or deemed to be
or shall, in fact, be inoperative or unenforceable as applied in any particular situation, such
circumstance shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other situation or of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or paragraphs herein contained shall not affect the
remaining portions of this Agreement or any part hereof.



     8.7 Remedies. Unless otherwise expressly provided herein, no remedy by the terms of
this Agreement conferred upon or reserved to the Eligible Lender Trustee or Purchaser is intended
to be exclusive of any other remedy, but each and every such remedy shall be cumulative and in
addition to every other remedy given under this Agreement or existing at law or in equity
(including, without limitation, the right to such equitable relief by way of injunction), or
statute on or after the date of this Agreement.



     8.8 Assignment. This Agreement may not be assigned or otherwise transferred, in whole
or in part, by one party without the prior written consent of the other parties, which consent
shall not unreasonably be withheld.



16









 





     8.9 Binding Effect. All covenants and agreements herein contained shall extend to and
be obligatory upon all successors of the respective parties hereto.



     8.10 Governing Law. This Agreement shall be construed in accordance with and governed
by the law of the State of New York.



     8.11 Arbitration. All disputes or differences between the parties which arise under
or are related to this Agreement shall be settled by arbitration in New York, New York in
accordance with the Commercial Arbitration Rules of the American Arbitration Association and
judgment upon the award entered by the arbitrators may be entered in any Court having jurisdiction
thereof. The panel of arbitrators, as contemplated in this Article, shall consist of three neutral
arbitrators. The arbitrators shall promptly enter an award which shall do justice between the
parties and the award shall be supported by written opinion. Each party to the arbitration shall
bear its respective costs of arbitration, with the fees and expenses of the arbitrators to be borne
equally by the parties.



     8.12 Entire Agreement. This Agreement embodies and constitutes the entire
understanding between the parties with respect to the transactions contemplated by this Agreement,
and all prior or contemporaneous agreements, understandings, representations and statements between
the parties, written or oral, are merged into and superseded by this Agreement.



     8.13 Counterparts. This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.



     8.14 Limited Role of the Delaware Trustee. It is expressly understood and agreed by
the parties hereto that this Loan Purchase Agreement is executed and delivered by The Bank of New
York (Delaware), not individually or personally but solely as Delaware Trustee of the Purchaser, in
the exercise of the powers and authority conferred and vested in it; (b) each of the
representations, undertakings and agreement herein made on the part of the Purchaser is made and
intended not as personal representations, undertakings and agreements by The Bank of New York
(Delaware) but is made and intended for the purpose of binding only the Purchaser; (c) nothing
herein contained shall be construed as creating any liability on The Bank of New York (Delaware),
individually or personally, to perform any covenant either expressed or implied contained herein,
all such liability, if any, being expressly waived by the parties hereto and by any person claiming
by, through or under the parties hereto; and (d) under no circumstances shall The Bank of New York
(Delaware) be personally liable for the payment of any indebtedness or expenses of the Purchaser or
be liable for the breach or failure of any obligations, representation, warranty or covenant made
or undertaken by the Purchaser under this Loan Purchase Agreement.



     8.15 True Sale. It is the intention of the Seller that the transfer from the Seller
to the



17









 







Purchaser constitutes a true sale of the Student Loans hereunder and that neither any
interest in nor title to the Student Loans shall become or be deemed property of the Seller for any
purpose
under applicable law. The Seller hereby authorizes the Purchaser to file a UCC- 1 financing
statement identifying the Seller as debtor and the Purchaser as secured party and describing the
Student Loans sold pursuant to this Agreement. The preparation or filing of such UCC- I financing
statement is solely for additional protection of the Purchaser’s interest in the Student Loans and
shall not be deemed to contradict the express intent of the Seller and the Purchaser that the
transfer of Student Loans under this Agreement is an absolute assignment of such Student Loans and
is not a transfer of such Student Loans as security for a debt.



18









 





     IN WITNESS WHEREOF, the parties hereto have caused this Loan Purchase Agreement to be duly
executed as of the day and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	

	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	HIGHER EDUCATION FUNDING I
	 	 	“Purchaser”
	 	 	By: THE BANK OF NEW YORK

	 	 	(DELAWARE), not in its individual
	 	 	     capacity but solely as Delaware Trustee
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	








19









 






EXHIBIT A TO LOAN PURCHASE AGREEMENT




LOAN TRANSFER ADDENDUM




     This Loan Transfer Addendum (the “Addendum”) is made and entered into as of the ___day
of___, ___by and between Higher Education Funding I (the “Issuer”) and
Consolidation Loan Funding II, LLC (the “Seller”).



     WHEREAS, the parties hereto entered into that Loan Purchase Agreement, dated as of January 1,
2004 (the “Loan Purchase Agreement”), and the Seller wishes to sell a portfolio of Student Loans
(as defined in the Loan Purchase Agreement) to the Issuer, by and through The Bank of New York as
its eligible lender trustee (the “Eligible Lender Trustee”) pursuant to and in accordance with the
terms and conditions of the Loan Purchase Agreement.



     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, the parties hereto agree as follows:



     1. Definitions. All capitalized terms in this Addendum shall have the same meanings given to
them in the Loan Purchase Agreement, unless otherwise specifically stated herein.



     2. Purchase of Student Loans. Subject to the terms and conditions of the Loan Purchase
Agreement and in reliance upon the representations, warranties and covenants as set forth in the
Loan Purchase Agreement, the Seller agrees to sell to the Issuer, by and through the Eligible
Lender Trustee, a portfolio of Student Loans identified in the Loan Transfer Schedule attached
hereto, having an aggregate outstanding principal balance of approximately ___
(the “Current Purchase Portfolio”).



     3. Purchase Price. Subject to the terms and conditions of the Loan Purchase Agreement, the
issuer, by and through the Eligible Lender Trustee agrees to purchase the Student Loans in the
Current Purchase Portfolio at a purchase price equal to [___] of the aggregate unpaid
principal balance thereon plus 100% of the accrued and unpaid interest thereon (including Interest
Subsidy Payments and Special Allowance Payments), each as of the Loan Purchase Date.



     4. Loan Purchase Date. The Loan Purchase Date shall be no later than ___, ___.



     5. Non-Consolidation Loans. Student Loans which are not Consolidation Loans [check one]



     are ___



20









 





     are not ___



included in the Portfolio of Eligible Loans.




     6.Servicer. The Servicer of the Eligible Loans is ___



     7. Guarantors. The Guarantor of the Eligible Loans is ___



     8. Representations and Warranties. The Seller hereby reconfirms all the representations
and warranties set forth in the Loan Purchase Agreement as of the Loan Purchase Date set forth in
Article VII of the Loan Purchase Agreement.



     9. Effect on Loan Purchase Agreement. This Addendum sets forth the terms of purchase and sale
solely with respect to the Current Purchase Portfolio. This Addendum shall have no effect upon any
other sale or purchase of any Student Loans consummated or contemplated prior to or after the Loan
Purchase Date, and all other terms, conditions and agreements contained in the Loan Purchase
Agreement shall remain in full force and effect. Prior or subsequent purchases and sales of Student
Loans shall each be governed by a separate Loan Transfer Addendum.



	 	 	 	 	 	 	 	 	 	 
	 	 	CONSOLIDATION LOAN FUNDING II, LLC
	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	CLF II MANAGEMENT
CORP., as

 Manager
	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 
	

	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Name:	 	 	 
	

	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Title:	 	 	 
	

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 	 	HIGHER EDUCATION
FUNDING I
	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	LORD SECURITIES CORPORATION,

as Issuer Administrator	 
	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 
	

	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Name:	 	 	 
	

	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Title:	 	 	 
	

	 	 	 	 	 	 	 	 	 






21









 






LOAN TRANSFER SCHEDULE




	 	 	 	 	 
	Loan Number / Identification

	 	 	 	Principal Balance






22









 






EXHIBIT B TO LOAN PURCHASE AGREEMENT




SELLER’S CLOSING CERTIFICATE




     Consolidation Loan Funding II, LLC (the “Seller”) does hereby certify that all
representations, warranties and statements by or on behalf of the Seller contained in a
certain Loan Purchase Agreement, dated as of January 1, 2004 (the “Loan Purchase
Agreement”), between the Seller and Higher Education Funding I (the “Issuer”), are true and
correct on and as of the Loan Purchase Date, without exception or qualification whatsoever;



     FURTHERMORE, the Seller does hereby certify that the following documents, where applicable to
each Student Loan (as defined in the Loan Purchase Agreement) acquired under the Loan Purchase
Agreement, have heretofore been furnished to the Issuer or are simultaneously herewith delivered in
accordance with the instructions of the Issuer, pursuant to Section 4.3 of the Loan Purchase
Agreement:



     The Department of Education application or Guarantee Agency application, as supplemented



     Interim note(s) for each Student Loan



     Payout note(s) for each Student Loan



     Disclosure and Student Loan information statement



     Certificate of Insurance and Contract of Insurance with respect to each Insured Student Loan
(or certified copy thereof)



     Guarantee Agreement, Agreement for Participation in the Guaranteed Loan Program and
Notification of Loan Approval by the Guarantee Agency with respect to each Guaranteed Student Loan
(or certified copy thereof)



     Any other documentation held by the Seller relating to the history of such Student Loan



     Secretary or Guarantee Agency Loan Transfer Statements, if any



     Uniform Commercial Code financing statement, if any, securing any interest in a Student Loan
to be Financed, and an executed termination statement related thereto



     Evidence of Student Loan disbursement



     Any other document required to be submitted with a claim to the Guarantee Agency.



     IN WITNESS WHEREOF, the undersigned has caused this Certificate to be executed



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and delivered by an officer hereunto duly authorized as of the Loan Purchase Date, ___
___, ___.



	 	 	 	 	 	 	 	 	 
	 	 	CONSOLIDATION LOAN FUNDING II, LLC
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	CLF II MANAGEMENT CORP., as Manager	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By	 	 	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Name:	 	 	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Title:	 	 	 	 
	

	 	 	 	 	 	 	 	 






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EXHIBIT C TO LOAN PURCHASE AGREEMENT




BLANKET ENDORSEMENT OF




STUDENT LOAN PROMISSORY NOTES




     Pursuant to the Loan Purchase Agreement, dated, January 1, 2004 (the “Loan Purchase
Agreement”), between Consolidation Loan Funding II, LLC (the “Seller”) and Higher Education Funding
I (the “Issuer”), the Seller by execution of this instrument, hereby endorses all promissory notes
purchased by the Issuer, by and through The Bank of New York as its eligible lender trustee (the
“Eligible Lender Trustee”). This endorsement is in blank, unrestricted form. This endorsement is
without recourse, except as provided under the terms of the Loan Purchase Agreement. All right,
title, and interest of Seller in and to the promissory notes and related documentation identified
in the attached loan ledger are transferred and assigned to the Issuer, by and through the Eligible
Lender Trustee.



     This endorsement may be further manifested by attaching this instrument or a facsimile hereof
to each or any of the Promissory Notes and Master Notes (or copies thereof) and related
documentation acquired by the Issuer, by and through the Eligible Lender Trustee, from Seller, or
by attaching this instrument to the loan ledger schedule, as the Issuer may require or deem
necessary.



Dated this __day of_________ ____




	 	 	 	 	 	 	 	 	 
	 	 	CONSOLIDATION LOAN FUNDING II, LLC
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	CLF II MANAGEMENT CORP., as Manager	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By	 	 	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Name:	 	 	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Title:	 	 	 	 
	

	 	 	 	 	 	 	 	 






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EXHIBIT D TO LOAN PURCHASE AGREEMENT




BILL OF SALE




     FOR VALUE RECEIVED, Consolidation Loan Funding II, LLC (the “Seller”), pursuant to the terms
and conditions of that certain Loan Purchase Agreement, dated as of, January 1, 2004 (the “Loan
Purchase Agreement”), between the Seller and Higher Education Funding I (the “Issuer”) does hereby
grant, sell, assign, transfer and convey to the Issuer, by and through The Bank of New York as its
eligible lender trustee (the “Eligible Lender Trustee”), and its successors and assigns, all right,
title and interest of the Seller in and to the following:




     (1) The loans described in Annex I attached hereto (the “Student Loans”), including
the Guarantee, if any, of the Student Loans issued by a Guarantor and the Certificate of
Insurance for Student Loans insured by the Secretary of Education;




     (2) All promissory notes and Master Notes (or copies thereof) and related
documentation evidencing the indebtedness represented by such Student Loans; and




     (3) All proceeds of the foregoing including, without limitation, all payments made by
the obligor thereunder or with respect thereto, all guarantee payments made by any guarantee
agency with respect thereto, if any, and all interest benefit payments and special allowance
payments with respect thereto made under Title IV, Part B, of the Higher Education
Act of 1965, as amended, and all rights to receive such payments, but excluding any proceeds
of the sale made hereby.




     TO HAVE AND TO HOLD the same unto the Issuer, by and through the Eligible Lender
Trustee, its successors and assigns, forever. This Bill of Sale is made pursuant to and is
subject to the terms and provisions of the Loan Purchase Agreement, and is without recourse,
except as provided in the Loan Purchase Agreement.



     IN WITNESS WHEREOF, the Seller has caused this instrument to be executed by one of its
officers duly authorized to be effective as of the ___day of___



	 	 	 	 	 	 	 	 	 
	 	 	CONSOLIDATION LOAN FUNDING II, LLC
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	CLF II MANAGEMENT CORP., as Manager	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By	 	 	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Name:	 	 	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	Title:	 	 	 	 
	

	 	 	 	 	 	 	 	 






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ELIGIBLE LOAN ACQUISITION CERTIFICATE




     This Eligible Loan Acquisition Certificate is submitted pursuant to the provisions of Section
4.02 of the Indenture of Trust, dated as of, January 1, 2004 (as amended and supplemented from time
to time in accordance with its terms, the “Indenture”), from Higher Education Funding I (the
“Issuer”) and The Bank of New York, as eligible lender trustee, to The Bank of New York, as
indenture trustee. All capitalized terms used in this Certificate and not otherwise defined herein
shall have the respective meanings given to such terms in the Indenture. In your capacity
as Trustee, you are hereby authorized and requested to disburse (i) to the Lender(s) identified in
the schedule attached hereto (the “Student Loan Acquisition Schedule”) the amount(s) specified in
such Schedule from the Acquisition Fund (or, in the case of an exchange pursuant to Section 4.02 of
the Indenture, the Student Loans listed in Annex 1 hereto) for the acquisition of Eligible Loans,
and any related Add-On Loan; and (ii) to the Depositor, the amount of Premium set forth in such
Schedule. With respect to the Eligible Loans so to be acquired, the Issuer hereby certifies as
follows:




     (a) The Eligible Loans to be acquired are those specified in the Student Loan
Acquisition Schedule (the “Acquired Eligible Loans”).




     (b) The amount to be disbursed pursuant to this Certificate does not exceed the amount
permitted under the provisions of Section 4.02 of the Indenture.




     (c) Each Acquired Eligible Loan is an Eligible Loan authorized so to be acquired by the
Indenture.




     (d) You (or your agent) have been previously, or are herewith, provided with the
following items:




     (i) with respect to each Acquired Eligible Loan, a copy of the
resolution pursuant to which the Issuer acquired such Acquired Eligible Loan;




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




     (iii) evidence in form satisfactory to the Trustee that each action necessary
to perfect a first security interest in each of the Acquired Eligible Loans in favor
of the Trustee has been accomplished; and




     (iv) instruments duly assigning the Acquired Eligible Loans to the Issuer or
the Eligible Lender Trustee.




     (e) The Issuer is not, on the date hereof, in default under the Indenture or any



27









 






     other agreement relating to the Acquired Eligible Loans, and, to the best knowledge of
the Issuer, the Depositor is not in default under any agreement relating 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 (d) hereof.




     (f) All of the conditions specified in the resolution relating 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.




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



Witness
my hand this ___day of ___.



	 	 	 	 	 	 	 
	 	 	HIGHER EDUCATION FUNDING I
	 	 	By LORD SECURITIES CORPORATION
	 	 	L.L.C., as Issuer Administrator
	 
	 	 	 	 	 	 
	

	 	By	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title	 	 	 	 
	

	 	 	 	 	 	 







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