Document:

TRUST AGREEMENT

                            Dated as of April 1, 2001

                                      among

                        NELNET Student Loan Corporation-1
                                  as Depositor

                                   MELMAC LLC
                                  as Depositor

                                  NELnet, Inc.
                                as Administrator

                            The Chase Manhattan Bank,
                            as Collateral Agent, Note
                         Registrar and Note Paying Agent

                                       and

                            Wilmington Trust Company
         as Trustee, Certificate Registrar and Certificate Paying Agent

                            THE NELNET GROUP TRUST I

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                                TABLE OF CONTENTS

                                                                            Page
                                   ARTICLE I

                                   DEFINITIONS

Section 1.1.   Definitions.....................................................5
Section 1.2.   Usage of Terms.................................................18
Section 1.3.   Calculations...................................................18
Section 1.4.   Section References.............................................18
Section 1.5.   Action by or Consent of Noteholders and/or Subordinated
               Certificateholders.............................................18

                                   ARTICLE II

                                CREATION OF TRUST

Section 2.1.   Creation of Trust..............................................19
Section 2.2.   Office.........................................................19
Section 2.3.   Purposes and Powers............................................19
Section 2.4.   Appointment of Trustee, Certificate Paying Agent,
               Certificate Registrar, Note Paying Agent and Note Registrar....20
Section 2.5.   Conveyance of Underlying Residual Rights, Maintenance and
               Operating Expenses and the Underlying Ancillary Rights.........21
Section 2.6.   Declaration of Trust...........................................25
Section 2.7.   Liability of the Noteholders and Subordinated
               Certificateholders.............................................25
Section 2 8.   Title to Trust Property........................................25
Section 2.9.   Situs of Trust.................................................26
Section 2.10.  Representations and Warranties of the Depositor................26
Section 2.11.  Federal Income Tax Allocations.................................29
Section 2.12.  Transfer of Interest to the Holder of the Special Interest.....30
Section 2.13.  Covenants of the Noteholders...................................30
Section 2.14.  Covenants of the Trust, the Trustee, the Administrator and
               Subordinated Certificateholders................................30
Section 2.15.  Note Insurer's Rights Regarding Actions, Proceedings
               or Investigations..............................................32

                                   ARTICLE IIA

                                THE ADMINISTRATOR

Section 2.1A.  Representations and Warranties of the Administrator............33
Section 2.2A.  Merger or Consolidation of Administrator.......................34
Section 2.3A.  Liability and Indemnities......................................35

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Section 2.4A.  Administrator Not to Resign....................................35
Section 2.5A.  Administrator Default..........................................36
Section 2.6A.  Appointment of Successor.......................................37
Section 2.7A.  Notification to Noteholders and Subordinated
               Certificateholders.............................................38
Section 2.8A.  Waiver of Past Defaults........................................38
Section 2.9A.  Sub-Administrators.............................................38
Section 2.10A. Cash Flow Certificates.........................................39
Section 2.11A. Perfected Security Interest....................................39
Section 2.12A. Administrative Duties..........................................39

                                   ARTICLE III

                   THE NOTES AND THE SUBORDINATED CERTIFICATES

Section 3.1.   Initial Ownership..............................................40
Section 3.2.   Conditions to Issuance of the Notes and the Subordinated
               Certificates...................................................41
Section 3.3.   The Notes and Subordinated Certificates........................41
Section 3.4.   Unconditional Rights of Noteholders to Receive Principal
               Amount and Interest............................................41
Section 3.5.   Authentication of Notes and Subordinated Certificates..........41
Section 3.6.   Registration of Transfer and Exchange of Notes and
               Subordinated Certificates......................................42
Section 3.7.   Mutilated, Destroyed, Lost or Stolen Notes or
               Subordinated Certificates......................................46
Section 3.8.   Persons Deemed Noteholders and Subordinated
               Certificateholders.............................................46
Section 3.9.   Access to List of Noteholders' and Subordinated
               Certificateholders' Names and Addresses........................47
Section 3.10.  Disposition by the Holder of the Special Interest..............48

                                   ARTICLE IV

              ADMINISTRATION OF COLLECTION ACCOUNT, RESERVE ACCOUNT

                    AND DISTRIBUTION ACCOUNT; CERTAIN DUTIES

Section 4.1.   Collection Account, Reserve Account and Distribution
               Account........................................................48
Section 4.2.   Use of Funds in Collection Accounts, Distribution
               Account and Reserve Account....................................50
Section 4.3.   Method of Payment or Distribution..............................52
Section 4.4.   No Segregation of Moneys; No Interest..........................53
Section 4.5.   Accounting; Reports; Tax Returns...............................53
Section 4.6.   Optional Redemption of Notes...................................53
Section 4.7.   Reports........................................................54
Section 4.8.   Optional Advances..............................................55
Section 4.9.   The Policies...................................................55

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                                    ARTICLE V

    THE TRUSTEE, THE COLLATERAL AGENT, THE NOTE PAYING AGENT, THE CERTIFICATE
         PAYING AGENT, THE NOTE REGISTRAR AND THE CERTIFICATE REGISTRAR

Section 5.1.   General Authority and Duties...................................57
Section 5.2.   Action Upon Instruction........................................58
Section 5.3.   No Duties Except as Specified in This Agreement or in
               Instructions; Not Acting in Individual Capacity................60
Section 5.4.   Representations and Warranties.................................61
Section 5.5.   Reliance; Advice of Counsel....................................62
Section 5.6.   May Own Notes..................................................63
Section 5.7.   Doing Business in Other Jurisdictions..........................63
Section 5.8.   Indemnification................................................63
Section 5.9.   Acceptance of Trusts and Duties................................64
Section 5.10.  Trustee, Collateral Agent, Note Registrar and Note
               Paying Agent Not Liable for Subordinated Certificates or
               Underlying Certificates........................................65
Section 5.11.  Payments from Trust Property...................................66
Section 5.12.  Consent of the Note Insurer with Respect to Certain Matters....66
Section 5.13.  Actions by Subordinated Certificateholders with Respect
               to Bankruptcy..................................................68
Section 5.14.  Restrictions on the Subordinated Certificateholders' Powers....68
Section 5.14.  Fiduciary Duties of the Trustee................................68

                                   ARTICLE VI

                       COMPENSATION OF TRUSTEE AND OTHERS

Section 6.1.   Fees and Expenses..............................................69

                                   ARTICLE VII

                                     DEFAULT

Section 7.1.   Events of Default..............................................69
Section 7.2.   Rights Upon an Event of Default................................70
Section 7.3.   Distributions..................................................70
Section 7.4.   Restrictions on Noteholders' Power.............................71

                                  ARTICLE VIII

                            DISSOLUTION OF THE TRUST

Section 8.1.   Dissolution of the Trust.......................................72

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                                   ARTICLE IX

    SUCCESSOR TRUSTEES, PAYING AGENTS AND REGISTRARS AND ADDITIONAL TRUSTEES

Section 9.1.   Eligibility Requirements for Trustee...........................72
Section 9.2.   Resignation or Removal of Trustee and Others...................73
Section 9.3.   Successor Trustee..............................................74
Section 9.4.   Merger or Consolidation........................................75
Section 9.5.   Appointment of Co-Trustee or Separate Trustee..................75

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

Section 10.1.  Amendment......................................................76
Section 10.2.  No Recourse....................................................77
Section 10.3.  Governing Law..................................................78
Section 10.4.  Severability of Provisions.....................................78
Section 10.5.  Third-Party Beneficiaries......................................78
Section 10.6.  Counterparts...................................................79
Section 10.7.  Notices........................................................79
Section 10.8.  Successors and Assigns.........................................79
Section 10.9.  No Petition....................................................80
Section 10.10. Headings.......................................................80
Section 10.11. Administrator..................................................80
Section 10.12. Furnishing Information.........................................80
Section 10.13. Amendments to Underlying Agreements; Underlying Trusts Not
               to Issue Additional Securities.................................81
Section 10.14. The Note Insurer...............................................81
Section 10.15. Security Agreement.............................................82

SCHEDULE I      Targeted Balance Schedule
SCHEDULE II     List of Underlying Agreements

EXHIBIT A    Form of Certificate of Trust
EXHIBIT B    Form of Note
EXHIBIT C    Form  of  Subordinated  Certificate
EXHIBIT D    Form of Payment Date Report
EXHIBIT E    Form of Representation Letter and Affidavit
EXHIBIT F    Debt Service Reserve Surety Bond
EXHIBIT G    Note  Insurance  Policy
EXHIBIT H    Form  of Cash  Flow  Certificate
EXHIBIT I    Form  of Notice to Note Insurer
EXHIBIT J    Form of Demand for Payment to Note Insurer

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        THIS TRUST  AGREEMENT  dated as of April 1, 2001,  is made among  NELNET
Student Loan Corporation-1 (formally known as Union Financial Services-1, Inc.),
a Nevada  corporation,  as a depositor (the "NELNET  Depositor"),  MELMAC LLC, a
Delaware limited liability  company,  as a depositor (the "MELMAC Depositor" and
together with the NELNET Depositor, the "Depositors"),  NELnet, Inc. ("NELnet"),
a  Nevada  Corporation,  as  administrator  (the  "Administrator"),   The  Chase
Manhattan  Bank, a New York  banking  corporation,  as  collateral  agent,  note
registrar and note paying agent (in such capacities, the "Collateral Agent," the
"Note Registrar" and the "Note Paying Agent," respectively) and Wilmington Trust
Company,  a Delaware  banking  corporation  and trust company  headquartered  in
Wilmington Delaware,  as trustee,  certificate  registrar and certificate paying
agent  (in  such  capacities,   the  "Trustee,"   "Certificate   Registrar"  and
"Certificate Paying Agent," respectively).

        In consideration of the mutual agreements herein contained, and of other
good and  valuable  consideration,  the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

        Section 1.1.  Definitions.

        Administration Fee: The fee payable to the Administrator on each Payment
Date pursuant to Section 4.2(a)(iv) for performing its services hereunder, which
fee shall equal $15,000 per year, payable semi-annually in equal installments of
$7,500 each.

        Administrator:  Means  NELnet,  Inc.,  a  Nevada  corporation,  and  its
successors and assigns.

        Administrator Default:  Has the meaning set forth in Section 2.5A.

        Agreement:  This Trust Agreement, all amendments and supplements thereto
and all exhibits and schedules to any of the foregoing.

        Amount Available: With respect to any Payment Date, the aggregate amount
contained in the Collection  Account on such Payment Date, but not including the
portion thereof representing Surety Bond Payments or Insured Payments or amounts
transferred from the first sub-account of the Reserve Account.

        Assignment Agreements: Collectively, the MELMAC Assignment Agreement and
the NELNET Assignment Agreement.

        Bankruptcy Action:  The meaning set forth in Section 5.12 hereof.

        Beneficial  Owner:  With respect to any Book-Entry  Note, the beneficial
owner of such Book-Entry Note.

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        Book-Entry  Note:  Any Note  registered in the name of the Depository or
its  nominee,  beneficial  ownership  of which is  reflected on the books of the
Depository or on the books of a Direct Participant or Indirect Participant.

        Business  Day:  Any day  other  than (a) a  Saturday  or a Sunday or (b)
another  day on which  banking  institutions  in the  city in which a Person  is
taking action hereunder are authorized or obligated by law,  executive order, or
governmental decree to be closed.

        Business Trust Statute:  Chapter 38 of Title 12 of the Delaware Code, 12
Del. Codess. 3801 et seq., as the same may be amended from time to time.

        Cash Flow Certificate: Each annual certificate prepared by the Cash Flow
Consultant  and delivered by the  Administrator  to the Trustee,  the Collateral
Agent, the Note Insurer and the Rating Agency pursuant to Section 2.10A.

        Cash Flow  Consultant:  Salomon  Smith  Barney  Inc.,  or any  successor
thereto approved by the Note Insurer.

        Certificate of Trust:  The Certificate of Trust in the form of Exhibit A
hereto filed for the Trust  pursuant to Section  3810(a) of the  Business  Trust
Statute.

        Certificate  Paying  Agent:  Initially,  the Trustee or its successor in
interest and any  successor  certificate  paying agent  appointed as provided in
this Agreement.

        Certificate  Register:  The Certificate  Register referred to in Section
3.6(a).

        Certificate  Registrar:  Initially,  the  Trustee  or its  successor  in
interest and any successor  certificate  registrar appointed as provided in this
Agreement.

        Closing Date: April 3, 2001.

        Collateral  Agent:  The  Chase  Manhattan  Bank,  not in its  individual
capacity but solely as collateral agent for the Note Insurer hereunder and under
the Security  Agreement,  and any  successor  appointed  as provided  therein or
hereunder.

        Collateral  Agent  Fee:  The fee  payable  to the  Collateral  Agent  as
provided in a separate fee agreement between the Collateral Agent and NELnet.

        Code: The Internal Revenue Code of 1986, as amended.

        Collection Account: The account designated as the Collection Account in,
and which is established and maintained pursuant to, Section 4.1.

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        Corporate Trust Office: With respect to the Trustee, its office at which
at any particular time its corporate trust business shall be administered, which
office at the Closing Date is located at Rodney Square North,  1100 North Market
Street,   Wilmington,   Delaware   19890-0001,    Attention:   Corporate   Trust
Administration;  or at such other address as the Trustee may designate by notice
to the Noteholders,  the Note Insurer, the Administrator and the Depositors,  or
the principal  corporate trust office of any successor Trustee.  With respect to
the Collateral  Agent,  its office at which at any particular time its corporate
trust  business  shall be  administered,  which  office at the  Closing  Date is
located at 450 West 33rd Street, New York, New York 10001, Attention: Structured
Finance Services, or at such other address as the Collateral Agent may designate
by  notice to the  Noteholders,  the Note  Insurer,  the  Administrator  and the
Depositors,  or the principal corporate trust office of any successor Collateral
Agent.

        Debt Service Available Amount:  For any Payment Date, an amount equal to
(i) the initial amount of the Debt Service  Reserve Surety Bond,  minus (ii) all
Debt Service  Payments made prior to such Payment  Date,  plus (iii) all amounts
reimbursed  to the Note  Insurer  pursuant  to Section  4.2(a)(vi)  (other  than
amounts  representing  interest on Surety Bond  Payments)  prior to such Payment
Date in respect of prior Surety Bond Payments.

        Debt  Service  Payment:  For any Payment  Date,  an amount  equal to the
excess,  if any, of (i) the Interest  Amount for such Payment Date over (ii) the
amount  remaining in the Collection  Account on such Payment Date,  after giving
effect to the receipt of Optional  Advances,  if any,  cash  transfers  from the
first  sub-account  of the  Reserve  Account  pursuant  to Section  4.1(a),  and
payments made pursuant to Section 4.2(a)(i), (ii), (iii) and (iv).

        Debt Service  Reserve Surety Bond: The debt service  reserve surety bond
dated the Closing  Date in the initial  amount of  $1,822,750  and issued by the
Note Insurer for the benefit of the holders of the Notes,  pursuant to which the
Note Insurer guarantees Surety Bond Payments, a copy of which is attached hereto
as Exhibit F.

        Deficiency  Amount:  (a) For any Payment  Date,  an amount  equal to the
excess,  if any,  of the  Interest  Amount  over  the  Amount  Available  in the
Collection  Account  to pay the  Interest  Amount,  after  giving  effect to the
payments  made  pursuant  to  Section  4.2(a)(i),  (ii),  (iii) and (iv) of this
Agreement  and the receipt of an  Optional  Advance,  if any,  and a Surety Bond
Payment, if any, and (b) on the Maturity Date, an amount equal to the excess, if
any, of the outstanding  Principal Amount of the Notes over the Amount Available
in the Collection Account to pay the outstanding  Principal Amount of the Notes,
after giving  effect to the payments made  pursuant to Section  4.2(a)(i),  (ii)
(iii), (iv), (v), and (vi) of this Agreement.

        Definitive  Note: Any Note registered in the name of a Person other than
the Depository or its nominee.

        Depositors: Collectively, the MELMAC Depositor and the NELNET Depositor.

        Depository:  The Depository Trust Company,  and any successor Depository
hereafter named.

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        Depository  Representation  Letter:  Letters to, or agreements with, the
Depository  to  effectuate  a book  entry  system  with  respect  to  the  Notes
registered in the Note Register under the nominee name of the Depository.

        Direct   Participant:   Any  broker-dealer,   bank  or  other  financial
institution for which the Depository holds Book-Entry Notes from time to time as
a securities depository.

        Distribution Account: The account designated as the Distribution Account
in, and which is established and maintained pursuant to, Section 4.1.

        Eligible  Account:  An  account  which is any of the  following:  (i) an
account maintained with an Eligible Institution; (ii) an account or accounts the
deposits  in which are fully  insured by either the Bank  Insurance  Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation;
(iii) a trust account (which shall be a "segregated  trust account")  maintained
with the corporate trust  department of a federal or state chartered  depository
institution  or trust  company  with trust  powers  and acting in its  fiduciary
capacity for the benefit of the Trustee, the Note Paying Agent or the Collateral
Agent  hereunder,  which  depository  institution  or trust  company  shall have
capital and surplus of not less than  $50,000,000  and the  obligations  of such
depository  institution (or, if such depository institution is a subsidiary of a
bank holding company system and such depository institution's securities are not
rated,  the obligations of the bank holding  company) shall have a credit rating
from each Rating  Agency in one of its generic  credit rating  categories  which
signifies  investment  grade; or (iv) an account  acceptable to the Note Insurer
and that will not cause any Rating  Agency to  downgrade  or  withdraw  its then
current  rating  assigned  to the  Notes  (without  giving  effect  to the  Note
Insurance Policy), as evidenced in writing by each Rating Agency.

        Eligible  Institution:  Any  depository  institution  (which  may be the
Trustee,  the Note Paying Agent or the  Collateral  Agent or an affiliate of the
Trustee, the Note Paying Agent or the Collateral Agent) organized under the laws
of the United States or any State, the deposits of which are insured to the full
extent  permitted by law by the Bank Insurance  Fund or the Savings  Association
Insurance Fund of the Federal Deposit Insurance Corporation, which is subject to
supervision and examination by federal or state authorities and whose short-term
obligations  have been rated A-1 or higher by S&P and F-1 or higher by Fitch, or
whose  unsecured  long-term  obligations has been rated one of the three highest
categories by each Rating Agency.

        Eligible Investments: Any of the following:

               (i) direct  obligations of, and obligations  fully guaranteed by,
        the  United   States  of  America,   the  Federal  Home  Loan   Mortgage
        Corporation, the Federal National Mortgage Association, or any agency or
        instrumentality of the United States of America the obligations of which
        are backed by the full faith and credit of the United States of America;

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<PAGE>

               (ii)(A)demand  and time deposits in,  certificates  of deposit of
        and  bankers'  acceptances  issued  by,  or  federal  funds  sold by any
        depository  institution  or trust company  (including  the Trustee,  the
        Collateral Agent or their  respective  agents acting in their respective
        commercial capacities)  incorporated under the laws of the United States
        of  America  or  any  state  thereof  and  subject  to  supervision  and
        examination by federal and/or state authorities, so long as, at the time
        of  such  investment  or  contractual   commitment  providing  for  such
        investment, such depository institution or trust company or its ultimate
        parent has a short-term  unsecured debt rating in one of the two highest
        available rating  categories of S&P and Fitch and the highest  available
        rating category of Moody's and provided that each such investment has an
        original  maturity of no more than 365 days; and (B) any other demand or
        time deposit or  certificate  of deposit  which is fully  insured by the
        Federal Deposit Insurance Corporation;

               (iii)  repurchase  obligations  with a term not to exceed 30 days
        with respect to any  security  described in clause (i) above and entered
        into  with a  depository  institution  or  trust  company  (acting  as a
        principal) rated "A" or higher by S&P and Fitch and rated "A2" or higher
        by Moody's; provided,  however, that the collateral transferred pursuant
        to such  repurchase  obligation  must be of the type described in clause
        (i) above and must (a) be valued  daily at  current  market  price  plus
        accrued  interest,  (b)  pursuant to such  valuation,  be equal,  at all
        times, to 105% of the cash transferred by the Trust in exchange for such
        collateral  and (c) be delivered  to the  Trustee,  Note Paying Agent or
        Collateral  Agent or, if the Trustee,  Note Paying  Agent or  Collateral
        Agent is supplying the collateral,  an agent for the Trustee,  in such a
        manner  as to  accomplish  perfection  of a  security  interest  in  the
        collateral by possession of certificated securities;

               (iv) securities  bearing interest or sold at a discount issued by
        any  corporation  incorporated  under the laws of the  United  States of
        America or any State thereof which has a long-term unsecured debt rating
        in the highest  available  rating  category of each of S&P,  Moody's and
        Fitch;

               (v) commercial paper having an original maturity of less than 365
        days and issued by an  institution  having a short-term  unsecured  debt
        rating in the highest  available rating category of each of S&P, Moody's
        and Fitch at the time of such investment;

               (vi) a guaranteed  investment  contract  approved by each of S&P,
        Moody's  and  Fitch and the Note  Insurer  and  issued  by an  insurance
        company or other corporation having a long-term unsecured debt rating in
        the highest  available rating category of each of S&P, Moody's and Fitch
        (if  Fitch  is  rating  such  insurance  company)  at the  time  of such
        investment;

               (vii) money market funds having ratings in the highest  available
        rating category of Moody's and one of the two highest  available  rating
        categories  of S&P and Fitch (if Fitch is rating such money market fund)
        at the time of such  investment  which  invest  only in  other  Eligible
        Investments,  any such  money  market  funds  which  provide  for demand
        withdrawals   being   conclusively   deemed  to  satisfy  any   maturity
        requirement for Eligible Investments set forth herein; and

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<PAGE>

               (viii) Any other investment  acceptable to each Rating Agency and
        the Note Insurer,  written  confirmation  of which shall be furnished by
        the Administrator to the Trustee.

        The  Trustee,  the Note Paying Agent or the  Collateral  Agent may trade
with itself or an affiliate  as  principal or agent,  in the purchase or sale of
Eligible Investments.

        Event of Default: The meaning assigned to such term in Section 7.1.

        Financial Guaranty Agreement:  The Financial Guaranty Agreement dated as
of the Closing  Date by and between the Note  Insurer and the Trust,  as amended
from time to time by the parties thereto.

        Fitch:  Fitch, Inc., and its successors and assigns.

        Holder: A Noteholder, a Subordinated Certificateholder and the Holder of
the Special Interest.

        Holder of the Special Interest:  Shall mean NELnet.

        Indemnification  Agreement: Means the Indemnification Agreement dated as
of April 3, 2001 among the Note  Insurer,  the  Depositors,  the  Administrator,
Salomon  Smith  Barney  Inc.,  UBS Warburg LLC and UFS  Securities,  L.L.C.,  as
amended from time to time by the parties thereto.

        Indentures:  Means,  collectively  the NELNET  Indenture  and the MELMAC
Indenture.

        Indirect  Participant:  Any  financial  institution  for whom any Direct
Participant holds an interest in a Book-Entry Note.

        Insolvency Event: With respect to a specified Person,  (a) the filing of
a decree or order for relief by a court having  jurisdiction  in the premises in
respect of such Person or any substantial part of its property 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  (including any
receiver  appointed  under  the  Financial  Institutions  Reform,  Recovery  and
Enforcement Act of 1989, as amended), liquidator,  assignee, custodian, trustee,
sequestrator or similar  official for such Person or for any substantial part of
its  property,  or ordering  the  winding-up  or  liquidation  of such  Person's
affairs,  and such decree or order  shall  remain  unstayed  and in effect for a
period of 60  consecutive  days;  or (b) the  commencement  by such  Person of a
voluntary case under any applicable  Federal or state bankruptcy,  insolvency or
other  similar law now or hereafter in effect,  or the consent by such Person to
the entry of an order for relief in an  involuntary  case under any such law, or
the  consent by such  Person to the  appointment  of or taking  possession  by a
receiver,  liquidator,  assignee,  custodian,  trustee,  sequestrator or similar
official for such Person or for any  substantial  part of its  property,  or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person  generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.

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<PAGE>

        Institutional  Accredited Investor: An institutional accredited investor
within the meaning of Rule  501(a)(1),  (2), (3) or (7) under the Securities Act
of 1933, as amended.

        Insurance  Agreement:  The insurance  agreement  dated as of the Closing
Date by and among the Note Insurer,  the Depositors,  the  Administrator and the
Trust, as amended from time to time by the parties thereto.

        Insurance  Paying Agent:  The Chase  Manhattan Bank, or any successor as
appointed herein.

        Insured Payment:  (i) As of any Payment Date, any Deficiency  Amount and
(ii) any Preference Amount.

        Interest Amount: For any Payment Date,  interest at the Interest Rate on
the  outstanding  Principal  Amount  of  the  Notes  immediately  following  the
preceding  Payment Date (or, in the case of the first Payment Date,  the Closing
Date) for the period beginning on the immediately preceding Payment Date (or, in
the case of the first Payment Date,  the Closing Date) to but not including such
Payment Date,  plus any Interest  Shortfall  with respect to prior Payment Dates
together  (to the  extent  legally  permissible)  with  interest  thereon at the
Interest Rate.

        Interest Rate: 6.34% per annum, payable semi-annually at one-half of the
annual rate (calculated on the basis of a 360-day year of twelve 30-day months).

        Interest  Shortfall:  With respect to any Payment Date,  the amount,  if
any, by which the amount  distributed to the Noteholders on such Payment Date is
less than the Interest Amount after giving effect to Optional Advances,  if any,
and Surety Bond Payments and Insured Payments.

        Maintenance  and Operating  Expenses:  The NELNET  Depositor's  right to
receive  the  Estimated  Amount (as  defined in the NELNET  Indenture)  from the
Underlying NELNET Trust pursuant to Section 5.03 of the NELNET Indenture,  which
rights  are  being  conveyed  to the Trust  pursuant  to the  NELNET  Assignment
Agreement and Section 2.5(b) hereof.

        Maturity Date:  July 2, 2020.

        MELMAC Assignment Agreement:  The Assignment Agreement dated as of April
1, 2001 between the MELMAC  Depositor and the Trust  relating to the  Underlying
MELMAC Residual Rights.

        MELMAC Depositor: MELMAC LLC, a Delaware limited liability company.

                                       11
<PAGE>

        MELMAC Indenture:  The Amended and Restated  Indenture of Trust dated as
of January 1, 1999 by and between  MELMAC LLC (as assignee of Maine  Educational
Loan Marketing  Corporation),  as issuer, and People's Heritage Bank, as trustee
(as amended or supplemented from time to time).

        Moody's:  Moody's  Investors  Service,  Inc.,  and  its  successors  and
assigns.

        NELnet:  NELnet,  Inc., a Nevada  corporation,  and its  successors  and
assigns.

        NELNET Assignment Agreement:  The Assignment Agreement dated as of April
1, 2001 between the NELNET  Depositor and the Trust  relating to the  Underlying
NELNET  Residual  Rights and the right to receive the  Maintenance and Operating
Expenses.

        NELNET   Depositor:   NELNET  Student  Loan   Corporation-1,   a  Nevada
corporation.

        NELNET  Indenture:  The Second  Amended and Restated  Indenture of Trust
dated  as  of  November  1,  1996  by  and  between  the  NELNET   Student  Loan
Corporation-1  (formerly known as Union Financial Services-1,  Inc.), as issuer,
and Zions First National Bank, as successor  trustee (as amended or supplemented
from time to time).

        Note: A 6.34%  Student Loan  Interest  Margin  Security  evidencing  the
obligation of the Trust to pay the Principal Amount  specified  therein together
with interest at the Interest Rate, substantially in the form of Exhibit B.

        Noteholder:  A Person  in whose  name a Note is  registered  on the Note
Register. Such Person shall be a creditor of the Trust.

        Note  Insurance  Policy:  The note guaranty  insurance  policy dated the
Closing  Date and issued by the Note  Insurer to the Note  Paying  Agent for the
benefit  of the  Holders  of the  Notes,  pursuant  to which  the  Note  Insurer
guarantees Insured Payments, a copy of which is attached hereto as Exhibit G.

        Note Insurer:  MBIA Insurance  Corporation,  a New York stock  insurance
corporation,  or any successor  thereof,  as issuer of the Note Insurance Policy
and the Debt Service Reserve Surety Bond.

        Note Insurer  Premium:  For any Payment Date,  the  semi-annual  premium
payable  to the Note  Insurer  equal to the sum of (i) with  respect to the Debt
Service  Reserve Surety Bond,  the product of (A) the applicable  percentage set
forth in the  Insurance  Agreement  and (B) the Debt  Service  Available  Amount
immediately  prior  to such  Payment  Date  and (ii)  with  respect  to the Note
Insurance Policy, the product of (A) the applicable  percentage set forth in the
Insurance  Agreement  and (B) the  outstanding  Principal  Amount  of the  Notes
immediately prior to such Payment Date.

                                       12
<PAGE>

        Note Paying Agent:  Initially,  the Collateral Agent or its successor in
interest  and any  successor  note paying  agent  appointed  as provided in this
Agreement.

        Note Register: The Note Register referred to in Section 3.6(a).

        Note  Registrar:  Initially,  the  Collateral  Agent or its successor in
interest  and  any  successor  note  registrar  appointed  as  provided  in this
Agreement.

        Optional Advance:  For any Payment Date, the amount, if any, advanced by
NELnet pursuant to Section 4.8(a).

        Payment  Date:  The  second  Business  Day of  each  January  and  July,
commencing January 3, 2002.

        Payment  Date  Report:  The  report  provided  for by  Section  4.7  and
substantially in the form of Exhibit D.

        Percentage Interest: With respect to any Subordinated  Certificate,  the
percentage evidenced on such Subordinated Certificate.  The aggregate Percentage
Interest of all the Subordinated Certificates shall equal 100%.

        Person:  Any  individual,   corporation,   partnership,  joint  venture,
association,  joint stock company,  limited liability company,  trust (including
any  beneficiary  thereof),  unincorporated  organization  or  government or any
agency or political subdivision thereof.

        Policies:  Collectively,  the Debt Service  Reserve  Surety Bond and the
Note Insurance Policy.

        Preference  Amount:  Any amount  previously  distributed to a Noteholder
that is  recoverable  and sought to be recovered as a voidable  preference  by a
trustee in bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C.),
as amended from time to time, in accordance with a final  nonappealable order of
a court having competent jurisdiction.

        Principal  Amount:  With  respect  to  any  Note,  as  of  any  date  of
determination,  the  original  principal  amount of such  Note less all  amounts
previously  distributed on such Note in respect of principal pursuant to Section
4.2(a)(vii) and (viii).

        Principal  Payment Amount:  With respect to any Payment Date, the amount
remaining in the  Collection  Account  after payment of all amounts set forth in
Section 4.2(a)(i),  (ii), (iii), (iv), (v) and (vi) provided,  however, that the
Principal Payment Amount shall not exceed the lesser of (A) the amount necessary
to reduce  the  Recalculated  Targeted  Amount of the Notes  below the  Targeted
Balance for such Payment  Date or (B) the  outstanding  Principal  Amount of the
Notes immediately prior to such Payment Date.

                                       13
<PAGE>

        Principal  Subsidy  Payment:  For any Payment Date, the amount,  if any,
deposited by the Trust into the Collection Account pursuant to Section 4.8(b).

        Qualified  Institutional  Buyer: A qualified  institutional buyer within
the meaning of Rule 144A under the Securities Act of 1933, as amended.

        Rating  Agency:  Each of S&P and  Fitch,  so  long as each  such  agency
maintains  a  rating  on the  Notes;  and if any  such  organization  no  longer
maintains a rating on the Notes,  such other nationally  recognized  statistical
rating organization as may be selected by the Administrator.

        Recalculated  Targeted Amount:  For any Payment Date, the sum of (i) the
Principal  Amount of the Notes  immediately  prior to such Payment Date and (ii)
all Special Principal Payments,  if any, received by the Holders of the Notes on
or prior to such Payment Date.

        Record Date:  With respect to any Payment Date, the close of business on
the second Business Day immediately preceding such Payment Date.

        Reimbursement  Amount:  To the extent  not  otherwise  reimbursed  under
Sections  4.2(a)(vi)  and 4.2(a)(x)  hereof,  all costs and expenses of the Note
Insurer in connection with any action, proceeding or investigation affecting the
Trust, Trust Property or the rights or obligations of the Note Insurer hereunder
or under the Policies or the Related Documents,  including (without  limitation)
any judgment or settlement  entered into  affecting the Note Insurer or the Note
Insurer's interests,  together with interest thereon at a rate equal to the Late
Payment Rate (as defined in the Insurance Agreement).

        Related  Documents:  The  Notes,  the  Subordinated  Certificates,   the
Assignment Agreements, the Security Agreement, the Financial Guaranty Agreement,
the Indemnification Agreement and the Insurance Agreement. The Related Documents
executed  by  any  party  are  referred  to  herein  as  "such  party's  Related
Documents," "its Related Documents" or by a similar expression.

        Representation  Letter  and  Affidavit:  A letter  and an  affidavit  in
substantially  the form of  Exhibit E  executed  by the Person to which is being
transferred a Definitive Note or a Subordinated Certificate.

        Reserve Account:  The account  designated as the Reserve Account in, and
which is established and maintained pursuant to, Section 4.1.

        Responsible  Officer:  When  used  with  respect  to  the  Trustee,  the
Collateral  Agent,  the Note  Paying  Agent or the Note  Registrar,  any officer
within its respective  Corporate Trust Office  including any Managing  Director,
Vice  President,  Assistant  Vice  President,  Secretary,  Assistant  Secretary,
Treasurer,  Assistant Treasurer, Financial Services Officer or any other officer
customarily  performing functions similar to those performed by any of the above
designated  officers having primary  responsibility  for matters relating to the
Trust.

                                       14
<PAGE>

        Secretary of State: The Secretary of State of the State of Delaware.

        Securities Act of 1933: Means the Securities Act of 1933, as amended.

        Security  Agreement:  The Security  Agreement  dated as of April 1, 2001
among the Trust, the Collateral  Agent, the  Administrator and the Note Insurer,
as amended or supplemented from time to time.

        S&P:  Standard & Poor's Rating  Services,  a division of The McGraw-Hill
Companies, and its successors and assigns.

        Special  Event:  With respect to (i) the  Underlying  MELMAC Trust,  the
occurrence  of an event  described in Article II (Bond  Details,  Form of Bonds,
Redemption  of Bonds and Use of Proceeds of Bonds) or Article VI  (Defaults  and
Remedies) of the MELMAC  Indenture and (ii) the  Underlying  NELNET  Trust,  the
occurrence  of an event  described in Article II (Note  Details,  Form of Notes,
Redemption  of Notes and Use of Proceeds of Notes) or Article VI  (Defaults  and
Remedies) of the NELNET Indenture.

        Specified Reserve Account Requirement:  For each Payment Date, an amount
equal to the sum of (i) the  Interest  Amount for the NEXT Payment Date and (ii)
the amount  necessary to reduce the  Recalculated  Targeted  Amount of the Notes
(calculated  after giving  effect to all  payments of principal  received on the
Notes on the Payment Date for which such calculation is being determined) to the
Targeted Balance for the NEXT Payment Date.

        Special  Interest:  Shall  have the  meaning  assigned  to such  term in
Section 2.12.

        Special  Principal  Payments:  For any Payment  Date for which a Special
Event has occurred since the last Payment Date (or since the Closing Date in the
case of the first Payment Date) an amount equal to the least of (i) the portion,
if  any,  of  the  Amount  Available  remaining  after  application  of  Section
4.2(a)(i)-(vii), inclusive, on such Payment Date, (ii) the portion of the Amount
Available  for such  Payment  Date  representing  payments  received  from  each
Underlying  Trust for which a Special Event  occurred and (iii) the  outstanding
Principal  Amount of the Notes after  application  of Section 4.2  (a)(i)-(vii),
inclusive,  on such Payment  Date.  If a Special Event has not occurred for such
period, the Special Principal Payment for such Payment Date shall be zero.

        Subordinated  Certificate:  A Subordinated  Student Loan Interest Margin
Certificate  evidencing a fractional undivided beneficial interest in the Trust,
substantially in the form of Exhibit C.

        Subordinated  Certificateholder:  A Person in whose name a  Subordinated
Certificate is registered on the  Certificate  Register (which shall include the
Holder of the Special Interest unless the context clearly  requires  otherwise).
Such Person shall be a  beneficial  owner of the Trust within the meaning of the
Business Trust Statute.

                                       15
<PAGE>

        Surety  Bond  Payment:  An  amount  equal  to the Debt  Service  Payment
required to be made by the Trust under this Agreement,  as certified in a Demand
for Payment (as defined in the Financial Guaranty Agreement).

        Targeted  Balance:  For any Payment Date, the amount set forth under the
heading "Targeted Balance" for such Payment Date on Schedule I hereto.

        Trust: The trust created by this Agreement, the estate of which consists
of the Trust Property.

        Trust Company:  Wilmington Trust Company,  or any successor thereto,  in
its individual capacity.

        Trust Property: The property and proceeds of every description, conveyed
to the Trust pursuant to Section 2.5, together with the Collection Account,  the
Distribution  Account,  the Reserve  Account  and the  Policies  (including  all
investments therein and all proceeds therefrom).

        Trustee:  Wilmington Trust Company, or its successor in interest, not in
its  individual  capacity but solely as trustee of the Trust,  and any successor
trustee appointed as provided in this Agreement.

        Trustee  Fee:  The fee  payable to the Trustee as provided in a separate
fee agreement between the Trustee and the Administrator.

        Underlying  Agreements:  The  Indentures  and other  related  agreements
listed on Schedule II hereto,  as such  Schedule II may be amended  from time to
time.

        Underlying  Ancillary  Rights:   Collectively,   the  Underlying  MELMAC
Ancillary Rights and the Underlying NELNET Ancillary Rights.

        Underlying  Bonds:  Collectively,  the  Underlying  MELMAC Bonds and the
Underlying NELNET Bonds.

        Underlying MELMAC Ancillary  Rights:  All of the following rights of the
MELMAC Depositor under the MELMAC Indenture:

        (a) the right to  deliver  or to direct  the  delivery  of any Cash Flow
        Certificate  and to do all other  acts of the  Issuer  under the  MELMAC
        Indenture (E.G., ss. 5.12 of the MELMAC Indenture) to cause the Trust to
        receive the proceeds of the Underlying MELMAC Residual Rights;

        (b) the right to optionally  redeem the Underlying MELMAC Bonds pursuant
        to  ss.ss.2.14,  2.26,  2.33  and  2.41,  it being  understood  that the
        Underlying MELMAC Ancillary Rights shall not include the right to redeem
        Underlying  MELMAC Bonds  resulting from the  Underlying  MELMAC Trust's
        inability to acquire Eligible Loans (as defined in the MELMAC Indenture)
        during the applicable acquisition and recycling periods; and

                                       16
<PAGE>

        (c)  the  right  to  sell  Eligible  Loans  (as  defined  in the  MELMAC
        Indenture) pursuant to the fifth unnumbered  paragraph of ss.5.02 of the
        MELMAC  Indenture  (provided,   however,   that  the  Underlying  MELMAC
        Ancillary  Rights shall not include the right to sell Eligible  Loans in
        order to avoid a default under the MELMAC Indenture).

        Underlying MELMAC Bonds:  The meaning set forth in Section 10.13 hereof.

        Underlying  MELMAC Residual  Rights:  The MELMAC  Depositor's  rights to
receive all cash payments from the  Underlying  MELMAC Trust,  including but not
limited to,  pursuant to Section 5.12(a) of the MELMAC  Indenture,  which rights
are being conveyed to the Trust pursuant to the MELMAC Assignment  Agreement and
Section 2.5 (a) hereof.

        Underlying  MELMAC Trust:  The separate master trust estate  established
and maintained in accordance with the MELMAC Indenture.

        Underlying NELNET Ancillary  Rights:  All of the following rights of the
NELNET Depositor under the NELNET Indenture:

        (a) the  right  to  deliver  or cause  the  delivery  of any  Cash  Flow
        Certificate  and to do all other  acts of the  Issuer  under the  NELNET
        Indenture (e.g.,  ss.5.10 of the NELNET Indenture) to cause the Trust to
        receive the proceeds of the Underlying  NELNET  Residual  Rights and the
        Maintenance and Operating Expenses;

        (b) the right to optionally redeem the Underlying NELNET Bonds, it being
        understood that the Underlying NELNET Ancillary Rights shall not include
        the right to redeem  the  Underlying  NELNET  Bonds  resulting  from the
        Underlying  NELNET  Trust's  inability  to  acquire  Eligible  Loans (as
        defined in the NELNET Indenture)  during the applicable  acquisition and
        recycling periods; and

        (c)  the  right  to  sell  Eligible  Loans  (as  defined  in the  NELNET
        Indenture) pursuant to the sixth unnumbered  paragraph of ss.5.02 of the
        NELNET  Indenture  (provided,   however,   that  the  Underlying  NELNET
        Ancillary  Rights shall not include the right to sell Eligible  Loans in
        order to avoid a default under the NELNET Indenture).

        Underlying NELNET Bonds:  The meaning set forth in Section 10.13 hereof.

        Underlying  NELNET Residual  Rights:  The NELNET  Depositor's  rights to
receive all cash payments from the  Underlying  NELNET Trust,  including but not
limited to, pursuant to Section 5.10 of the NELNET  Indenture,  which rights are
being  conveyed to the Trust  pursuant to the NELNET  Assignment  Agreement  and
Section 2.5(b) hereof.

                                       17
<PAGE>

        Underlying  NELNET Trust:  The separate master trust estate  established
and maintained in accordance with the NELNET Indenture.

        Underlying Residual Rights: Collectively, the Underlying MELMAC Residual
Rights and the Underlying NELNET Residual Rights.

        Underlying  Trusts:  Collectively,  the Underlying  MELMAC Trust and the
Underlying NELNET Trust.

        Section 1.2.  Usage of Terms.

        With respect to all terms used in this Agreement,  the singular includes
the plural and the plural the singular;  words  importing any gender include the
other genders;  references to "writing" include printing,  typing,  lithography,
and other means of reproducing words in a visible form; references to agreements
and other contractual  instruments include all subsequent  amendments thereto or
changes therein entered into in accordance with their  respective  terms and not
prohibited  by this  Agreement;  references to Persons  include their  permitted
successors and assigns;  and the terms  "include" or  "including"  mean "include
without  limitation"  or  "including  without  limitation".  To the extent  that
definitions are contained in this Agreement, or in any such certificate or other
document, such definitions shall control.

        Section 1.3.  Calculations.

        All calculations of the amount of interest accrued on the Notes shall be
made on the basis of a 360-day year consisting of twelve 30-day months.

        Section 1.4.  Section References.

        All references to Articles, Sections, paragraphs,  subsections, exhibits
and  schedules  shall be to such  portions of this  Agreement  unless  otherwise
specified.

        Section 1.5.  Action by or Consent of  Noteholders  and/or  Subordinated
Certificateholders.

        Whenever any provision of this  Agreement  refers to action to be taken,
or consented to, by Noteholders  and/or  Subordinated  Certificateholders,  such
provision  shall  be  deemed  to  refer  to  Noteholders   and/or   Subordinated
Certificateholders  of record  as of the close of  business  on the  second  day
immediately  preceding the date on which such action is to be taken,  or consent
given, by Noteholders  and/or  Subordinated  Certificateholders.  Solely for the
purposes of any action to be taken, or consented to, by  Noteholders,  any Notes
registered on the Note  Register in the name of the  Depositors or any affiliate
thereof shall be deemed not to be outstanding and the aggregate Principal Amount
of the Notes represented  thereby shall not be taken into account in determining
whether the  requisite  aggregate  Principal  Amount of the Notes  necessary  to
effect any such action or consent has been obtained unless the Depositors and/or
its affiliates are the Holders of all the Notes; provided, however, that, solely
for the purpose of determining  whether the Trustee is entitled to rely upon any
such action or consent,  only Notes which the Trustee knows to be so owned shall
be so disregarded.

                                       18
<PAGE>

                                   ARTICLE II
                                CREATION OF TRUST

        Section 2.1.  Creation of Trust.

        There is hereby  formed a trust to be known as "The  NELnet  Group Trust
I," in which name the Trust may,  and the  Trustee on behalf of the Trust  shall
have power and authority  and is hereby  authorized  and  empowered to,  conduct
business,  make and execute contracts and other instruments and sue and be sued.
The  Trustee  shall  have  power  and  authority  and is hereby  authorized  and
empowered  to execute and file with the  Secretary of State the  Certificate  of
Trust.

        Section 2.2.  Office.

        The office of the Trust shall be in care of the Trustee at its Corporate
Trust Office or at such other  address in Delaware as the Trustee may  designate
by written notice to the Noteholders,  the Subordinated  Certificateholders  and
the Depositors.

        Section 2.3.  Purposes and Powers.

        The  purpose  of the Trust is,  and the Trust  shall  have the power and
authority,  and the  Trustee  shall  have  power  and  authority  and is  hereby
authorized  and  empowered in the name and on behalf of the Trust to do or cause
to be done all acts and things  necessary,  advisable or convenient to cause the
Trust, to engage in the following activities:

        (i)    to  acquire the Underlying MELMAC Residual Rights from the MELMAC
Depositor,  to acquire the Maintenance and Operating Expenses and the Underlying
NELNET  Residual  Rights  from the NELNET  Depositor,  and to  acquire  from the
Depositors and to exercise all of the Underlying Ancillary Rights as provided in
this Agreement;

        (ii)   to authorize, execute, authenticate, deliver and issue the Notes,
the  Subordinated  Certificates  and  the  Special  Interest  pursuant  to  this
Agreement to or upon the written direction of the Administrator;

        (iii)  to pay the organizational, start-up and transactional expenses of
the Trust, to the extent not paid by the Depositors or the Administrator, and to
pay the balance of any proceeds of the Notes or the Subordinated Certificates to
the  Depositors,  pro  rata  based  upon  the fair  market  value of the  assets
contributed to the Trust by each;

        (iv)   to  enter into,  execute,  deliver,  and perform its  obligations
under the Related  Documents to which it is to be a party and to consummate  the
transactions contemplated hereby and thereby;

                                       19
<PAGE>

        (v)    to   engage  in  those   activities,   including   entering  into
agreements,  that are necessary or suitable to  accomplish  the foregoing or are
incidental thereto or connected therewith; and

        (vi)   subject  to compliance with the Related  Documents,  to engage in
such other activities as may be required in connection with  conservation of the
Trust  Property,   payment  of  the  Notes  and  making   distributions  to  the
Subordinated Certificateholders.

        The Trust is hereby  authorized to engage in the  foregoing  activities.
The Trust shall not engage in any  activity  other than in  connection  with the
foregoing or other than as required or expressly authorized by the terms of this
Agreement  or the Related  Documents  and as may be suitable  or  convenient  to
accomplish such activities.

        The Administrator shall exercise all of the Underlying  Ancillary Rights
on  behalf of the  Trust;  provided,  however,  that  neither  the Trust nor the
Administrator  may exercise any of the Underlying MELMAC Ancillary Rights or any
of the Underlying NELNET Ancillary Rights described in clauses (b) or (c) of the
definitions   thereof   without   the   consent  of  all  of  the   Subordinated
Certificateholders  other than the Holder of the  Special  Interest  and without
complying with the provisions of Section 10.13 hereof.

        Section  2.4.   Appointment  of  Trustee,   Certificate   Paying  Agent,
Certificate Registrar, Note Paying Agent and Note Registrar.

        (a)    The Depositors hereby appoint Wilmington Trust Company as Trustee
of the Trust,  effective as of the date hereof,  to have all the rights,  powers
and duties of the Trustee set forth herein, and Wilmington Trust Company accepts
such appointment as Trustee.

        (b)    The   Depositors  hereby  appoint  Wilmington  Trust  Company  as
Certificate Paying Agent and Certificate Registrar of the Trust, effective as of
the date hereof,  to have all the rights,  powers and duties of the  Certificate
Paying Agent and the Certificate Registrar,  respectively, set forth herein, and
Wilmington Trust Company hereby accepts such  appointment as Certificate  Paying
Agent  and  Certificate  Registrar.  A  successor  Certificate  Paying  Agent or
successor Certificate Registrar may be appointed by the Trustee.  Written notice
of any  such  appointment  shall  be  given  to the  Depositors.  Any  successor
Certificate Paying Agent or successor Certificate Registrar shall be required to
deliver to the Trustee a written instrument under which such successor agrees to
be subject to the  obligations  of the  Certificate  Paying Agent or Certificate
Registrar, as the case may be, under this Agreement.

        (c)    The  Depositors  hereby appoint The Chase  Manhattan Bank as Note
Paying Agent and Note  Registrar,  effective as of the date hereof,  to have all
the  rights,  powers and  duties of the Note  Paying  Agent and Note  Registrar,
respectively,  set forth herein and The Chase Manhattan Bank hereby accepts such
appointment  as Note Paying Agent and Note  Registrar.  A successor  Note Paying
Agent and Note Registrar may be appointed by the  Administrator,  subject to the
prior written  consent of the Note Insurer.  Written  notice of any  appointment
shall be given to the  Depositors.  Any successor Note Paying Agent or successor
Note Registrar shall be required to deliver to the trustee a written  instrument
under which such successor  agrees to be subject to the  obligations of the Note
Paying Agent or Note Registrar, as the case may be, under this Agreement.

                                       20
<PAGE>

        Section 2.5. Conveyance of Underlying  Residual Rights,  Maintenance and
Operating Expenses and the Underlying Ancillary Rights.

        (a) The MELMAC Depositor hereby  contributes,  assigns,  delivers,  sets
over and otherwise conveys to the Trust without recourse except as otherwise set
forth herein, all the MELMAC Depositor's right, title and interest,  whether now
owned or hereafter acquired, now existing or hereafter arising wherever located,
in and to all the Underlying  MELMAC Residual  Rights and the Underlying  MELMAC
Ancillary Rights.

        In that connection,  the MELMAC Depositor will deliver to the Trustee on
behalf of the Trust on or before  the  Closing  Date the  following  instruments
relating to the Underlying MELMAC Residual Rights:

               (i)    the MELMAC Assignment Agreement;

               (ii) a copy of the  MELMAC  Indenture  and the  other  Underlying
        Agreements relating to the Underlying MELMAC Trust listed on Schedule II
        hereto;

               (iii) any  documents  required  under the  Indenture or the other
        Underlying  Agreements  relating to the  Underlying  MELMAC  Trust to be
        delivered in connection with such transfer;

               (iv) any  documents  required  under the MELMAC  Indenture or the
        other Underlying  Agreements  relating to the Underlying MELMAC Trust to
        be signed by the Trustee as transferee of the Underlying MELMAC Residual
        Rights;

               (v)  properly  completed  Uniform  Commercial  Code -1  Financing
        Statements  relating to the  assignment  by the MELMAC  Depositor to the
        Trust of the Underlying MELMAC Residual Rights; and

               (vi) signed  acknowledgments  from the  trustee  under the MELMAC
        Indenture (a) to remit all amounts  payable to the  Collateral  Agent as
        set  forth  in  the  related  Cash  Flow  Certificates  directly  to the
        Collateral Agent for deposit in the Collection  Account until instructed
        in writing to the contrary by the  Administrator  and the Note  Insurer,
        which written instructions shall be consented to by the Rating Agencies,
        and (b) to look solely to the Trust,  acting  through the  Administrator
        and the Note  Insurer,  to consent to certain  amendments  to the MELMAC
        Indenture.

        The MELMAC  Depositor also shall deliver to the Trustee on behalf of the
Trust  copies of each  amendment  or  supplement  to the  Underlying  Agreements
relating to the  Underlying  MELMAC Trust  promptly  after the MELMAC  Depositor
receives any such copy.

                                       21
<PAGE>

        The Trustee shall have power and authority and is hereby  authorized and
empowered  to sign,  in the name  and on  behalf  of the  Trust,  each  document
delivered  to it  pursuant  to clauses  (iv) and (v) above as  requested  by the
MELMAC  Depositor  and return such  document to the MELMAC  Depositor for proper
filing with the trustee  under the MELMAC  Indenture for the  Underlying  MELMAC
Residual Rights, or proper recording office, as the case may be, and the Trustee
shall be fully protected in so doing.

        The  contribution of the Underlying  MELMAC Residual Rights is absolute.
Except as otherwise provided herein and under the Security Agreement, and to the
fullest extent  permitted by applicable  law, the Trust shall not assign,  sell,
dispose of or transfer any interest in the Underlying  MELMAC Residual Rights or
the Underlying MELMAC Ancillary Rights or any other asset constituting the Trust
Property  or permit the  Underlying  MELMAC  Residual  Rights or the  Underlying
MELMAC Ancillary Rights or any other asset constituting the Trust Property to be
subjected to any lien,  claim or  encumbrance  arising by,  through or under the
Trust or any Person claiming by through or under the Trust.

        It is intended that the  conveyance of the  Underlying  MELMAC  Residual
Rights by the MELMAC  Depositor to the Trust as provided in this Section 2.5 be,
and be construed as, an absolute  contribution of the Underlying MELMAC Residual
Rights by the MELMAC  Depositor to the Trust and  thereafter  for the benefit of
the  Subordinated  Certificateholders.  Nevertheless,  if,  notwithstanding  the
intent of the parties,  the Underlying MELMAC Residual Rights are held to be the
property of the MELMAC Depositor,  or, if for any other reason this Agreement is
held or deemed to create a security  interest in the Underlying  MELMAC Residual
Rights, then it is intended that (a) this Agreement shall also be deemed to be a
security  agreement  within  the  meaning  of  Articles  8 and 9 of the  Uniform
Commercial Code of any applicable jurisdiction;  (b) the conveyance provided for
in this Section 2.5 shall be deemed to be a grant by the MELMAC Depositor to the
Trust of a security  interest  in all the MELMAC  Depositor's  right,  title and
interest in and to the Underlying MELMAC Residual Rights and all amounts payable
to the holders of the Underlying  MELMAC  Residual Rights after the Closing Date
in accordance with the terms thereof, all proceeds of the conversion,  voluntary
or  involuntary,  of the  foregoing  into cash,  instruments,  security or other
property,  including  without  limitation  all amounts from time to time held or
invested in the  Collection  Account,  the  Distribution  Account or the Reserve
Account, whether in the form of cash, instruments, securities or other property;
and (c) the  possession  by the  Trust  or its  agent of the  Underlying  MELMAC
Residual  Rights and such other  items of property  as  constitute  instruments,
money,  negotiable  documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security  interest pursuant
to the Uniform Commercial Code of any applicable jurisdiction. The Trustee, upon
receipt of written direction from the  Administrator or the Note Insurer,  shall
take such actions,  including but not limited to filing Uniform  Commercial Code
Financing  Statements and continuation  statements,  as the Administrator or the
Note  Insurer  may direct as  necessary  to ensure that the  security  interests
created  hereby  would be deemed to be a  perfected  security  interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.  Neither the  Administrator  nor the Note Insurer shall direct
the Trustee to take any action inconsistent with this Agreement.

                                       22
<PAGE>

        (b) The NELNET Depositor hereby  contributes,  assigns,  delivers,  sets
over and otherwise conveys to the Trust without recourse except as otherwise set
forth herein, all the NELNET Depositor's right, title and interest,  whether now
owned or hereafter acquired, now existing or hereafter arising wherever located,
in and to all  the  Underlying  NELNET  Residual  Rights,  the  Maintenance  and
Operating Expenses and the Underlying NELNET Ancillary Rights.

        In that connection,  the NELNET Depositor will deliver to the Trustee on
behalf of the Trust on or before  the  Closing  date the  following  instruments
relating  to the  Underlying  NELNET  Residual  Rights and the  Maintenance  and
Operating Expenses:

               (i)    the NELNET Assignment Agreement;

               (ii) a copy of the  NELNET  Indenture  and the  other  Underlying
        Agreements relating to the Underlying NELNET Trust listed on Schedule II
        hereto;

               (iii) any documents  required  under the NELNET  Indenture or the
        other Underlying  Agreements  relating to the Underlying NELNET Trust to
        be delivered in connection with such transfer;

               (iv) any  documents  required  under the NELNET  Indenture or the
        other Underlying  Agreements  relating to the Underlying NELNET Trust to
        be signed by the Trustee as transferee of the Underlying NELNET Residual
        Rights and the Maintenance and Operating Expenses;

               (v)  properly  completed  Uniform  Commercial  Code - 1 Financing
        Statements  relating to the  assignment  by the NELNET  Depositor to the
        Trust of the Underlying  NELNET  Residual Rights and the Maintenance and
        Operating Expenses; and

               (vi) signed  acknowledgments  from the  trustee  under the NELNET
        Indenture (a) to remit all amounts  payable to the Collateral  Agent for
        deposit in the  Collection  Account  until  instructed in writing to the
        contrary  by the  Administrator  and the  Note  Insurer,  which  written
        instructions  shall be consented to by the Rating  Agencies,  and (b) to
        look solely to the Trust,  acting through the Administrator and the Note
        Insurer, to consent to certain amendments to the NELNET Indenture.

        The NELNET  Depositor also shall deliver to the Trustee on behalf of the
Trust  copies of each  amendment  or  supplement  to the  Underlying  Agreements
relating to the  Underlying  NELNET Trust  promptly  after the NELNET  Depositor
receives any such copy.

        The Trustee shall have power and authority and is hereby  authorized and
empowered  to sign,  in the name  and on  behalf  of the  Trust,  each  document
delivered to it pursuant to clauses (iv) and (v) above as required by the NELNET
Depositor  and return such  document to the NELNET  Depositor  for proper filing
with the trustee under the NELNET  Indenture for the Underlying  NELNET Residual
Rights, or proper recording office, as the case may be, and the Trustee shall be
fully protected in so doing.

                                       23
<PAGE>

        The  contribution  of the  Underlying  NELNET  Residual  Rights  and the
Maintenance  and Operating  Expenses is absolute.  Except as otherwise  provided
herein and under the  Security  Agreement,  the Trust  shall not  assign,  sell,
dispose of or transfer any interest in the Underlying  NELNET  Residual  Rights,
the  Maintenance  and Operating  Expenses,  or the Underlying  NELNET  Ancillary
Rights  or any  other  asset  constituting  the Trust  Property  or  permit  the
Underlying NELNET Residual Rights, the Maintenance and Operating Expenses or the
Underlying  NELNET  Ancillary  Rights or any other asset  constituting the Trust
Property to be subjected to any lien,  claim or encumbrance  arising by, through
or under the Trust or any Person claiming by through or under the Trust.

        It is intended that the  conveyance of the  Underlying  NELNET  Residual
Rights and the Maintenance and Operating Expenses by the NELNET Depositor to the
Trust as  provided  in this  Section  2.5 be, and be  construed  as, an absolute
contribution  of the Underlying  NELNET  Residual Rights and the Maintenance and
Operating  Expenses by the NELNET  Depositor to the Trust and thereafter for the
benefit   of   the   Subordinated    Certificateholders.    Nevertheless,    if,
notwithstanding the intent of the parties, the Underlying NELNET Residual Rights
and the  Maintenance  and Operating  Expenses are held to be the property of the
NELNET  Depositor,  or, if for any other reason this Agreement is held or deemed
to create a security  interest in the Underlying  NELNET Residual Rights and the
Maintenance and Operating Expenses,  then it is intended that (a) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles 8
and 9 of the Uniform  Commercial  Code of any applicable  jurisdiction;  (b) the
conveyance provided for in this Section 2.5 shall be deemed to be a grant by the
NELNET  Depositor  to  the  Trust  of a  security  interest  in all  the  NELNET
Depositor's  right,  title and interest in and to the Underlying NELNET Residual
Rights and the Maintenance and Operating Expenses and all amounts payable to the
holders  of the  Underlying  NELNET  Residual  Rights  and the  Maintenance  and
Operating  Expenses after the Closing Date in accordance with the terms thereof,
all proceeds of the conversion,  voluntary or involuntary, of the foregoing into
cash, instruments,  security or other property, including without limitation all
amounts  from time to time  held or  invested  in the  Collection  Account,  the
Distribution  Account  or the  Reserve  Account,  whether  in the  form of cash,
instruments,  securities or other property;  and (c) the possession by the Trust
or its agent of the Underlying  NELNET  Residual  Rights and the Maintenance and
Operating  Expenses and such other items of property as constitute  instruments,
money,  negotiable  documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security  interest pursuant
to the Uniform Commercial Code of any applicable jurisdiction. The Trustee, upon
receipt of written direction from the  Administrator or the Note Insurer,  shall
take such actions,  including but not limited to filing Uniform  Commercial Code
Financing  Statements and continuation  statements,  as the Administrator or the
Note  Insurer  may direct as  necessary  to ensure that the  security  interests
created  hereby  would be deemed to be a  perfected  security  interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.  Neither the  Administrator  nor the Note Insurer shall direct
the Trustee to take any action inconsistent with this Agreement.

                                       24
<PAGE>

        Section 2.6.  Declaration of Trust.

        The  Trustee  hereby  declares  that it will hold the Trust  Property in
trust upon and subject to the  conditions  set forth  herein first to secure the
payment of the Notes and payments  due and owing to the Note Insurer  under this
Agreement,  the Insurance  Agreement and the  Financial  Guaranty  Agreement and
thereafter for the use and benefit of the Subordinated Certificateholders. It is
the intention and  agreement of the parties  hereto that the Trust  constitute a
business  trust  under the  Business  Trust  Statute  of which the  Subordinated
Certificateholders  are the beneficial owners and that this Agreement constitute
the  governing  instrument  of such  business  trust.  It is the  intention  and
agreement  of the  parties  hereto  that,  solely for income and  franchise  tax
purposes,  the Trust  shall be treated  as a grantor  trust.  Nevertheless,  if,
notwithstanding  the intent of the parties the Trust is not held to be a grantor
trust,  solely for income and  franchise tax purposes the Trust shall be treated
as a partnership, with the Subordinated  Certificateholders as the sole partners
thereof.  The parties agree that,  unless otherwise  required by appropriate tax
authorities,  the Trust will file or cause to be filed annual or other necessary
returns,  reports and other forms  consistent with the  characterization  of the
Trust as a grantor trust or, if necessary,  a partnership for such tax purposes.
Effective  as of the date  hereof,  the Trustee  shall have all rights,  powers,
authority,  and authorization set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.

        Section   2.7.   Liability   of   the   Noteholders   and   Subordinated
Certificateholders.

        Except  as  otherwise  set  forth in  Section  2.12,  no  Noteholder  or
Subordinated  Certificateholder  shall  have  any  personal  liability  for  any
liability  or  obligation  of the Trust or by reason of any action  taken by the
parties to this  Agreement  pursuant to any  provisions of this Agreement or any
Related Document. The Subordinated  Certificateholders  shall be entitled to the
same limitation of personal  liability  extended to shareholders of corporations
under the General Corporation Law of the State of Delaware.

        Section 2.8.  Title to Trust Property.

        (a)    Legal  title to all the  Trust  Property  shall be  vested at all
times in the Trust as a separate legal entity except where applicable law in any
jurisdiction  requires title to any part of the Trust Property to be vested in a
trustee or  trustees,  in which  case title  shall be deemed to be vested in the
Trustee, a co-trustee and/or a separate trustee, as the case may be.

        (b)    Neither  the Noteholders nor the Subordinated  Certificateholders
shall have legal title to any part of the Trust Property.  The Noteholders shall
be entitled to receive payments, and the Subordinated  Certificateholders  shall
be entitled to receive  distributions,  only in accordance with Articles IV, VII
and VIII. No transfer, by operation of law or otherwise,  of any right, title or
interest by any Noteholder or  Subordinated  Certificateholder  of its ownership
interest in any Note or Subordinated Certificate shall operate to terminate this
Agreement or the trusts  hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.

                                       25
<PAGE>

        Section 2.9.  Situs of Trust.

        The Trust will be located and administered in the State of Delaware. The
Trust shall not have any employees; provided, however, that nothing herein shall
restrict or prohibit the Trustee,  the Depositors or any agent of the Trust from
having  employees  within or without the State of  Delaware.  All bank  accounts
maintained by the Trust shall be in Delaware or New York. The only office of the
Trust shall be the Corporate Trust Office in Delaware.

        Section 2.10. Representations and Warranties of the Depositors.

        (a)    By  execution of this Agreement,  the MELMAC  Depositor makes the
following  representations  and  warranties  on which  each of the Trust and the
Trustee  relies in accepting  the Trust  Property in trust and issuing the Notes
and the Subordinated Certificates:

                      (i)  Organization  and Good  Standing.  It has  been  duly
               organized and is validly existing as a limited  liability company
               in good  standing  under the laws of the State of Delaware,  with
               power and  authority  to own its  properties  and to conduct  its
               business  as such  properties  are  currently  owned  and as such
               business is currently  conducted  and is proposed to be conducted
               pursuant to this Agreement and the Related Documents

                      (ii)  Due  Qualification.  It  is  duly  qualified  to  do
               business as a foreign limited liability company in good standing,
               and has obtained all  necessary  licenses and  approvals,  in all
               jurisdictions  in which the  ownership or lease of its  property,
               the  conduct  of  its  business  and  the   performance   of  its
               obligations  under  this  Agreement  and  the  Related  Documents
               requires such qualification.

                      (iii) Power and Authority.  It has the power and authority
               to execute and deliver this  Agreement and its Related  Documents
               and  to  perform  its  obligations   pursuant  thereto;  and  the
               execution,  delivery and  performance  of this  Agreement and its
               Related  Documents  have been duly  authorized  by all  necessary
               corporate action.

                      (iv) No Consent Required. No consent, license, approval or
               authorization or registration or declaration  with, any Person or
               with any governmental authority,  bureau or agency is required in
               connection  with the  execution,  delivery or performance of this
               Agreement  and the Related  Documents  and the  assignment of the
               Underlying  MELMAC Residual Rights,  except for such as have been
               obtained, effected or made.

                      (v) No Violation.  The  consummation  of the  transactions
               contemplated by this Agreement and the Related  Documents and the
               fulfillment  of its  obligations  under  this  Agreement  and its
               Related  Documents do 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

                                       26
<PAGE>

               Formation,  limited  liability company agreement or any indenture
               (including but not limited to the MELMAC  Indenture and the other
               Underlying   Agreements   relating  to  the  MELMAC   Depositor),
               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  except as
               otherwise  contemplated  by this  Agreement or any of its Related
               Documents,   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.

                      (vi) No  Proceedings.  There  are not any  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  (A)  asserting  the
               invalidity of this Agreement or any of its Related Documents, (B)
               seeking to prevent the issuance of the Notes or the  Subordinated
               Certificates  or the  consummation  of  any  of the  transactions
               contemplated  by this Agreement or any of its Related  Documents,
               (C) seeking any determination or ruling that might materially and
               adversely affect its performance of its obligations under, or the
               validity  or  enforceability  of,  this  Agreement  or any of the
               Related Documents, or (D) seeking to adversely affect the federal
               income tax or other federal, state or local tax attributes of the
               Notes or the Subordinated Certificates.

                      (viii) Enforceability.  It has duly executed and delivered
               its  Related  Documents  and each such  agreement  constitutes  a
               legal,  valid and  binding  agreement  on its  part,  enforceable
               against it in accordance with its terms.

        (b)    By  execution of this Agreement,  the NELNET  Depositor makes the
following  representations  and  warranties  on which the Trust and the  Trustee
relies in  accepting  the Trust  Property in trust and issuing the Notes and the
Subordinated Certificates:

                      (i)  Organization  and Good  Standing.  It has  been  duly
               organized  and is  validly  existing  as a  corporation  in  good
               standing  under the laws of the State of  Nevada,  with power and
               authority  to own its  properties  and to conduct its business as
               such  properties  are  currently  owned and as such  business  is
               currently  conducted and is proposed to be conducted  pursuant to
               this Agreement and the Related Documents.

                      (ii)  Due  Qualification.  It  is  duly  qualified  to  do
               business  as a  foreign  corporation  in good  standing,  and has
               obtained   all   necessary   licenses  and   approvals,   in  all
               jurisdictions  in which the  ownership or lease of its  property,
               the  conduct  of  its  business  and  the   performance   of  its
               obligations  under  this  Agreement  and  the  Related  Documents
               requires such qualification.

                                       27
<PAGE>

                      (iii) Power and Authority.  It has the power and authority
               to execute and deliver this  Agreement and its Related  Documents
               and  to  perform  its  obligations   pursuant  thereto;  and  the
               execution,  delivery and  performance  of this  Agreement and its
               Related  Documents  have been duly  authorized  by all  necessary
               corporate action.

                      (iv) No Consent Required. No consent, license, approval or
               authorization or registration or declaration  with, any Person or
               with any governmental authority,  bureau or agency is required in
               connection  with the  execution,  delivery or performance of this
               Agreement  and the Related  Documents  and the  assignment of the
               Underlying   NELNET  Residual  Rights  and  the  Maintenance  and
               Operating  Expenses,  except  for  such  as have  been  obtained,
               effected or made.

                      (v) No Violation.  The  consummation  of the  transactions
               contemplated by this Agreement and the Related  Documents and the
               fulfillment  of its  obligations  under  this  Agreement  and its
               Related  Documents do 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  Articles of
               Incorporation,  By-Laws,  or any  indenture  (including  but  not
               limited  to  the  NELNET   Indenture  and  the  other  Underlying
               Agreements),   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 except as otherwise  contemplated by this Agreement or
               any of its Related Documents,  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.

                      (vi) No  Proceedings.  There  are not any  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  (A)  asserting  the
               invalidity of this Agreement or any of its Related Documents, (B)
               seeking to prevent the issuance of the Notes or the  Subordinated
               Certificates  or the  consummation  of  any  of the  transactions
               contemplated  by this Agreement or any of its Related  Documents,
               (C) seeking any determination or ruling that might materially and
               adversely affect its performance of its obligations under, or the
               validity  or  enforceability  of,  this  Agreement  or any of the
               Related Documents, or (D) seeking to adversely affect the federal
               income tax or other federal, state or local tax attributes of the
               Notes or the Subordinated Certificates.

                      (viii) Enforceability.  It has duly executed and delivered
               its  Related  Documents  and each such  agreement  constitutes  a
               legal,  valid and  binding  agreement  on its  part,  enforceable
               against it in accordance with its terms.

                                       28
<PAGE>

        Section 2.11. Federal Income Tax Allocations.

        Net income of the Trust for any month as determined  for federal  income
tax purposes (and each item of income, gain, loss, deduction and credit, if any,
entering into the computation  thereof) shall be allocated:  to the Subordinated
Certificateholders  in accordance  with their  Percentage  Interests;  provided,
however,  if the  Noteholders  are  deemed  to be  partners,  together  with the
Subordinated Certificateholders, for federal income tax purposes:

        (a)    Income  of the Trust shall be allocated among such Noteholders as
of the first Record Date  following  the end of any such month in  proportion to
their  ownership  of the Notes on such  date,  in an amount up to the sum of the
Interest Amount for such month, and the balance of the income of the Trust shall
be  allocated  to the  Subordinated  Certificateholders,  and, if such income is
insufficient in any month for such allocations to the  Noteholders,  such income
in subsequent months shall first be allocated to the Noteholders to make up such
shortfall  (and  interest   thereon)  before  being  allocated  to  Subordinated
Certificateholders.

        (b)    Net  losses of the Trust, if any, for any month as determined for
federal income tax purposes (and each item of income,  gain,  loss and deduction
entering into the  computation  thereof) shall be allocated to the  Subordinated
Certificateholders  to  the  extent  the  Subordinated   Certificateholders  are
reasonably  expected to bear the  economic  burden of such net losses,  then net
losses  shall be  allocated  among the  Noteholders  as of the first Record Date
following the end of such month in proportion to their ownership of the Notes on
such Record Date.

        (c)    Notwithstanding  anything in this Agreement to the contrary,  the
Subordinated  Certificateholders  shall be allocated an aggregate of at least 1%
of each item of income, profit, gain or loss of the Trust.

        (d)    The Subordinated  Certificateholders are authorized to modify the
allocations in this Section if necessary or appropriate,  for the allocations to
reflect  fairly  the  economic   income,   gain  or  loss  to  the  Subordinated
Certificateholders  or the  Noteholders  or to comply with the provisions of the
Code and the accompanying Treasury Regulations.

        (e)    All  federal  income tax  allocations  are to be  calculated  and
prepared by the Administrator.

        Section 2.12. Payment of Expenses.

        NELnet,  as holder of no less than 1%  Percentage  Interest in the Trust
(the   "Special   Interest"),   shall  pay,  to  the  extent  not  paid  by  the
Administrator,  organizational expenses of the Trust as they may arise or shall,
upon the request of the  Trustee,  promptly  reimburse  the Trustee for any such
expenses paid by the Trustee.

                                       29
<PAGE>

        Section 2.13. Covenants of the Noteholders.

        Each  Noteholder  by  becoming  an owner of a Note (and each  Beneficial
Owner) agrees and covenants for the benefit of each other  Noteholder  (and each
Beneficial Owner), the Note Insurer,  the Subordinated  Certificateholders,  the
Collateral Agent and the Trustee, during this term of this Agreement, and to the
fullest extent permitted by applicable law:

        (a)    to be bound by the terms and  conditions of the Notes and of this
Agreement,  including any supplements or amendments  hereto,  for the benefit of
the Trust, the Trustee,  the Collateral  Agent, the Note Insurer,  and all other
Noteholders   (and   Beneficial   Owners   of   Notes)   and  the   Subordinated
Certificateholders present and future; and

        (b)    to  treat the Trust,  for purposes of federal  income,  state and
local income and franchise and any other income taxes,  as a partnership and the
Subordinated Certificateholders as partners of that partnership and the Notes as
debt of the Trust for all tax purposes and not to take any position inconsistent
with such treatment in any tax returns filed by it.

        Section 2.14. Covenants of the Trust, the Trustee, the Administrator and
Subordinated Certificateholders.

        The  Trust,  the  Trustee,   the  Administrator  and  each  Subordinated
Certificateholder agree and covenant as follows:

        (a)    neither  the  Trustee,  the  Administrator  nor any  Subordinated
Certificateholder  shall  cause the  funds  and other  assets of the Trust to be
commingled with those of any other individual, corporation, estate, partnership,
joint  venture,   association,   joint  stock  company,  trust,   unincorporated
organization, or government or any agency or political subdivision thereof;

        (b)    neither  the  Trustee,  the  Administrator  nor any  Subordinated
Certificateholder  shall  cause the Trust to be,  become or hold  itself  out as
being liable for the debts of any other party or  guarantee  any of the debts or
obligations  of any  other  party  (excepting  only the  indemnification  of the
Trustee in its individual  capacity under the Trust  Agreement by a Subordinated
Certificateholder);

        (c)    the Trust and the Subordinated Certificateholder shall not act as
agents for each other;

        (d)    the  Trust  shall  (1) act  solely  in its name and  through  its
Trustee  and any duly  authorized  officers  or  agents  in the  conduct  of its
business,  (2) prepare all correspondence in the Trust name, and (3) conduct its
business so as not to mislead others as to the identity of the entity with which
they are concerned;

        (e)    except in the case of a Subordinated Certificateholder that is an
Administrator,  no  Subordinated  Certificateholder  shall  be  involved  in the
day-to-day management of the Trust;

                                       30
<PAGE>

        (f)    the  Trustee  shall  maintain on behalf of the Trust all business
trust  records and books of account of the Trust and neither the Trustee nor any
Subordinated  Certificateholder  shall cause the Trust to commingle its business
trust  records  and books of account  with the  corporate  records  and books of
account  of any  other  entity,  and the  books and  records  maintained  by the
Subordinated  Certificateholders  or the  Trustee  on behalf of the Trust  shall
reflect the separate existence of the Trust;

        (g)    the  Trustee  shall  comply  with  such  formalities  as  may  be
necessary  under the  Business  Trust  Statute to  authorize  all of the Trust's
actions as may be required by law;

        (h)    the  Trustee shall cause the Trust to (1) conduct its business in
an office  separate from that of each  Subordinated  Certificateholder  and each
Depositor,  (2)  maintain  stationery  separate  from that of each  Subordinated
Certificateholder  and  each  Depositor,  (3) pay all of its own  expenses,  (4)
observe all statutory  formalities,  and (5) keep in full effect its  existence,
rights  and  franchises  as a  business  trust  under  the laws of the  State of
Delaware; and the Administrator shall cause the Trust to obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or will be necessary to protect the  validity and  enforceability  of this Trust
Agreement;

        (i)    the  persons  performing  financial  and  operational   services,
including, without limitation, maintenance of the books and records of the Trust
or  incurring   expenses  in  connection   with  such  services   shall  receive
compensation for such services  rendered or expenses incurred in an amount equal
to the fair value of such  services and  expenses;  to the extent that the Trust
leases  premises  from  a  Subordinated  Certificateholder  or  affiliates  of a
Subordinated  Certificateholder,  each of the  foregoing  shall pay  appropriate
reasonable  compensation or rental; and the Trust shall be directly  responsible
for the costs of its own outside legal,  auditing and other similar services and
shall provide for its own operating expenses and liabilities from its own funds;
and

        (j)    any  consolidated  financial  statements  which  consolidate  the
assets and earnings of a Subordinated  Certificateholder with those of the Trust
shall contain a footnote or other statement stating that the assets of the Trust
will not be available to creditors of the  Subordinated  Certificateholder;  the
financial statements (if any) of the Trust shall disclose that the assets of the
Trust are not available to pay creditors of any Subordinated Certificateholder.

        Section 2.15. Note Insurer's  Rights Regarding  Actions,  Proceedings or
Investigations.

        Until the  Noteholders  have been paid in full,  all amounts owed to the
Note Insurer  have been paid in full,  the  Insurance  Agreement  and  Financial
Guaranty  Agreement  have  terminated and the Policies have been returned to the
Note Insurer for  cancellation,  and subject to the provisions of Section 10.14,
the following provisions shall apply:

        (a)    Notwithstanding  anything  contained  herein  or in  the  Related
Documents to the contrary,  the Note Insurer shall have the right to participate
in, to direct the  enforcement  or defense of, and, at the Note  Insurer's  sole
option,  to  institute  or assume the  defense  of, any  action,  proceeding  or
investigation that could adversely affect the Trust or the Trust Property or the

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<PAGE>

rights or obligations of the Note Insurer hereunder or under the Policies or the
Related Documents,  including (without  limitation) any insolvency or bankruptcy
proceeding in respect of the  Administrator,  the  Depositors,  the Trust or any
affiliate thereof.  Following notice to the Trustee, the Note Insurer shall have
exclusive right to determine,  in its sole discretion,  the actions necessary to
preserve and protect the Trust and the Trust Property. All costs and expenses of
the Note Insurer in connection  with such action,  proceeding or  investigation,
including (without limitation) any judgment or settlement entered into affecting
the  Note  Insurer  or the  Note  Insurer's  interests,  shall  be  included  in
Reimbursement Amount.

        (b)    In  connection with any action,  proceeding or investigation that
could  adversely  affect  the  Trust,  the  Trust  Property  or  the  rights  or
obligations  of the Note Insurer  hereunder or under the Policies or the Related
Documents,   including   (without   limitation)  any  insolvency  or  bankruptcy
proceeding in respect of the  Administrator,  the  Depositors,  the Trust or any
affiliate thereof, the Trustee hereby agrees to cooperate with, and to take such
action as directed by, the Note Insurer, including (without limitation) entering
into such  agreements and  settlements as the Note Insurer shall direct,  in its
sole  discretion,   without  the  consent  of  any  Noteholder  or  Subordinated
Certificateholder.  Notwithstanding  any other provision herein or in any of the
other   Related   Documents,   the  Trustee   shall  not  require  any  bond  or
indemnification from any Person for taking of any action at the direction of the
Note  Insurer,  and the Trustee  shall not be liable to the Note  Insurer or any
Noteholder or Subordinated  Certificateholder  for any such action that conforms
to the direction of the Note Insurer.  The  Trustee's  reasonable  out-of-pocket
costs and expenses (including  attorneys' fees and expenses) with respect to any
such action shall be reimbursed pursuant to Section 5.8 hereof.

        (c)    Any  judgment or  settlement  entered  against or  affecting  the
Trust,  the Trust Property or the Trustee,  on behalf of the  Noteholders or the
Subordinated  Certificateholders  in connection  with any action,  proceeding or
investigation shall be paid by the Trustee from the Trust Property.

        (d)    The  Trustee  hereby agrees to provide to the Note Insurer prompt
written notice of any action,  proceeding or investigation  that names the Trust
or the Trustee as a party or that could  adversely  affect the Trust,  the Trust
Property or the rights or obligations of the Note Insurer hereunder or under the
Policies or the Related Documents, including (without limitation) any insolvency
or bankruptcy  proceeding in respect of the Administrator,  the Depositors,  the
Trust or any affiliate thereof.

        (e)    Notwithstanding  anything contained herein or in any of the other
Related  Documents  to the  contrary,  the Trustee  shall not,  without the Note
Insurer's  prior  written  consent  or  unless  directed  by the  Note  Insurer,
undertake  or join any  litigation  or agree to any  settlement  of any  action,
proceeding  or  investigation  affecting  the Trust,  the Trust  Property or the
rights or obligations of the Note Insurer hereunder or under the Policies or the
Related Documents.

        (f)    Each Noteholder or Subordinated Certificateholder,  by acceptance
of its Note or  Certificate  as the case may be, and the Trustee  agree that the
Note Insurer shall have such rights as set forth in this  Section,  which are in
addition to any rights of the Note Insurer  pursuant to the other  provisions of
the  Related  Documents,  that  the  rights  set  forth in this  Section  may be

                                       32
<PAGE>

exercised by the Note Insurer, in its sole discretion,  without the need for the
consent or approval of any Noteholder or Subordinated  Certificateholder  or the
Trustee,  notwithstanding  any other provision contained herein or in any of the
other  Related  Documents,  and that nothing  contained in this Section shall be
deemed to be an  obligation  of the Note  Insurer to exercise  any of the rights
provided for herein.

                                   ARTICLE IIA
                                THE ADMINISTRATOR

        Section 2.1A. Representations and Warranties of the Administrator.

        By execution of this Agreement,  the  Administrator  makes the following
representations  and  warranties  on which the Trust,  the  Trustee and the Note
Insurer rely:

        (a)    Organization and Good Standing. It has been duly organized and is
validly  existing as a corporation  in good standing under the laws of the State
of Nevada,  with power and  authority to own its  properties  and to conduct its
business  as  such  properties  are  currently  owned  and as such  business  is
currently  conducted and is proposed to be conducted  pursuant to this Agreement
and the Related Documents.

        (b)    Due  Qualification.  It is duly  qualified  to do  business  as a
foreign  corporation in good standing,  and has obtained all necessary  licenses
and  approvals,  in all  jurisdictions  in which the  ownership  or lease of its
property,  the conduct of its business and the  performance  of its  obligations
under this Agreement and the Related Documents requires such qualification.

        (c)    Power  and  Authority.  It has the power and authority to execute
and  deliver  this  Agreement  and its  Related  Documents  and to  perform  its
obligations  pursuant  thereto;  and the execution,  delivery and performance of
this  Agreement  and its  Related  Documents  have been duly  authorized  by all
necessary corporate action.

        (d)    No   Consent   Required.   No  consent,   license,   approval  or
authorization  or  registration  or  declaration  with,  any  Person or with any
governmental  authority,  bureau or agency is  required in  connection  with the
execution,  delivery or performance of this Agreement and its Related Documents,
except for such as have been obtained, effected or made.

        (e)    No Violation.  The consummation of the transactions  contemplated
by  this  Agreement  and  its  Related  Documents  and  the  fulfillment  of its
obligations under this Agreement and its Related Documents do 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  Articles  of
Incorporation or By-Laws, 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  except as
otherwise  contemplated  by this Agreement or any of its Related  Documents,  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.

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<PAGE>

        (f)    No  Proceedings.  There are not any 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  Agreement  or any of its Related  Documents,  (ii)  seeking to prevent the
issuance of the Notes or the  Subordinated  Certificates or the  consummation of
any of the  transactions  contemplated  by this  Agreement or any of its Related
Documents,  (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  Agreement  or any of its Related  Documents,  or (iv)
seeking to adversely  affect the federal income tax or other  federal,  state or
local tax attributes of the Notes or the Subordinated Certificates.

        (g)    Enforceability. It has duly executed and delivered this Agreement
and its Related Documents and each such agreement constitutes a legal, valid and
binding agreement on its part it, enforceable  against it in accordance with its
terms.

        Section 2.2A. Merger or Consolidation of Administrator.

        Any  Person  (a)  into  which  the   Administrator   may  be  merged  or
consolidated, (b) which may result from any merger or consolidation to which the
Administrator  shall be a party or (c) which may succeed to the  properties  and
assets of the Administrator, substantially as a whole, shall be the successor to
the  Administrator,  without  the  execution  or filing of any  document  or any
further act by any of the parties to this Agreement; provided, however, that the
Administrator  hereby covenants that it will not consummate any of the foregoing
transactions  except  upon  satisfaction  of the  following:  (i) the  surviving
Administrator executes an agreement of assumption to perform every obligation of
the Administrator under this Agreement,  (ii) immediately after giving effect to
such  transaction,   no  Administrator   Default  shall  have  occurred  and  be
continuing,  (iii) the Administrator shall have delivered to the Trustee and the
Note  Insurer an  officer's  certificate  and an opinion of counsel each stating
that such  consolidation,  merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, and (iv)
the  Administrator  shall have  delivered to the Trustee and the Note Insurer an
opinion of counsel stating that such  transaction  will not result in a material
adverse  Federal  or state  tax  consequence  to the Trust  relating  to its tax
classification,  or to the  Noteholders,  considered  as a whole,  relating to a
change in the characterization of the Notes.

        Section 2.3A. Liability and Indemnities.

        (a) The Administrator shall be liable in accordance herewith only to the
extent of the obligations  specifically  undertaken by the  Administrator  under
this Agreement.

        The  Administrator  and any of its  directors,  officers,  employees  or
agents may rely in good faith on the advice of counsel or on any document of any
kind, prima facie properly executed and submitted by any Person.

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<PAGE>

        Except as provided in this  Agreement,  the  Administrator  shall not be
under any  obligation  to appear in,  prosecute  or defend any legal action that
shall not be  incidental to its duties in accordance  with this  Agreement,  and
that in its  opinion  may  involve  it in any  expense or  liability;  provided,
however,  that the Administrator may undertake any reasonable action that it may
deem  necessary or desirable in respect of this  Agreement and its other Related
Documents  and the rights and duties of the  parties to this  Agreement  and its
other Related  Documents and the interests of the Noteholders,  the Note Insurer
and the  Subordinated  Certificateholders  under  this  Agreement  and its other
Related Documents.

        (b) The Administrator shall indemnify, defend and hold harmless from its
funds,  the Trust,  the Trustee,  the Collateral  Agent,  the Note Insurer,  the
Noteholders and the Subordinated Certificateholders and the officers, directors,
employees  and agents of the Trust,  the  Trustee,  the  Collateral  Agent,  the
Noteholders,  the Note Insurer and the Subordinated  Certificateholders from and
against any and all costs,  expenses,  losses,  claims,  damages and liabilities
arising out of, or imposed upon such Person through, the Administrator's willful
misfeasance, bad faith or negligence in the performance of its duties under this
Agreement,  or by reason of reckless  disregard  of its  obligations  and duties
under this Agreement;  provided,  however, the Administrator shall not be liable
for any such costs,  expenses,  losses,  claims, damages and liabilities imposed
upon  such  Person to the  extent  that  they  arise out of or result  from such
Person's gross negligence,  willful  malfeasance or bad faith or a breach of the
representations and warranties of such Person in this Agreement.

        Section 2.4A. Administrator Not to Resign.

        Subject to the provisions of Section 2.2A,  NELnet shall not resign from
the obligations and duties imposed on it as  Administrator  under this Agreement
except  upon  determination  that  the  performance  of its  duties  under  this
Agreement shall no longer be permissible  under  applicable law or shall violate
any final order of a court or administrative agency with jurisdiction over it or
its properties. Notice of any such determination permitting resignation shall be
communicated  to the Trustee and the Note  Insurer at the  earliest  practicable
time (and,  if such  communication  is not in  writing,  shall be  confirmed  in
writing at the earliest  practicable time) and any such  determination  shall be
evidenced  by an opinion of counsel to such effect  delivered to the Trustee and
the Note  Insurer  concurrently  with or  promptly  after such  notice.  No such
resignation   shall   become   effective   until  the  Trustee  or  a  successor
Administrator,  with the  consent of the Note  Insurer,  shall have  assumed the
responsibilities and obligations of NELnet in accordance with Section 2.6A.

        Section 2.5A. Administrator Default.

        If any one of the following  events (an  "Administrator  Default") shall
occur and be continuing:

               (1) any failure by the Administrator to direct the Trustee or the
        trustee of an  Underlying  Trust,  as  applicable,  to make any required
        distributions  with  respect  to the  Underlying  Residual  Rights,  the

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<PAGE>

        Maintenance  and Operating  Expenses or any other item of Trust Property
        within  the time  period  specified  herein or  therein,  which  failure
        continues  unremedied  for three  Business Days after written  notice of
        such  failure is received by the  Administrator  from the Trustee or the
        Note  Insurer or after  discovery  of such  failure by an officer of the
        Administrator; or

               (2)  any  failure  by the  Administrator  duly to  observe  or to
        perform in any material respect any other covenants or agreements of the
        Administrator  set  forth in this  Agreement,  which  failure  shall (i)
        materially  and  adversely  affect  the  rights of the Note  Insurer  or
        Noteholders  and (ii) continue  unremedied for a period of 30 days after
        the date on which written notice of such failure,  requiring the same to
        be  remedied,  shall  have been  given (A) to the  Administrator  by the
        Trustee  or the  Note  Insurer  or (B) to the  Administrator  and to the
        Trustee and the Note Insurer by the  Noteholders  representing  not less
        than 66 2/3% of the aggregate  outstanding Principal Amount of the Notes
        with the prior written consent of the Note Insurer;

                (3) an Insolvency  Event shall have occurred with respect to the
        Administrator;

then, and in each and every case, so long as the Administrator Default shall not
have been remedied,  the Trustee or the Noteholders evidencing not less than 25%
of the aggregate  outstanding Principal Amount of the Notes, with the consent of
the Note Insurer,  or the Note  Insurer,  by notice then given in writing to the
Administrator  (and  to the  Trustee  and  the  Note  Insurer  if  given  by the
Noteholders)  may  terminate  all the rights  and  obligations  (other  than the
obligations  set forth in  Sections  2.3A and 5.8  hereof) of the  Administrator
under  this  Agreement.  On or after the  receipt by the  Administrator  of such
written  notice,  all  authority  and  power  of the  Administrator  under  this
Agreement shall, without further action, pass to and be vested in the Trustee or
such  successor  Administrator  consented  to by  the  Note  Insurer  as  may be
appointed under Section 2.6A;  and,  without  limitation,  the Trustee is hereby
authorized  and  empowered  to  execute  and  deliver,  for the  benefit  of the
predecessor  Administrator,  as  attorney-in-fact  or  otherwise,  any  and  all
documents  and other  instruments,  and to do or  accomplish  all other  acts or
things  necessary  or  appropriate  to effect  the  purposes  of such  notice of
termination.  The predecessor  Administrator  shall cooperate with the successor
Administrator   and  the   Trustee  in   effecting   the   termination   of  the
responsibilities  and  rights  of  the  predecessor   Administrator  under  this
Agreement.  All  reasonable  costs  and  expenses  (including  attorneys'  fees)
incurred in connection  with amending this Agreement to reflect such  succession
as  Administrator  pursuant  to this  Section  shall be paid by the  predecessor
Administrator  upon  presentation of reasonable  documentation of such costs and
expenses.  Upon receipt of notice of the occurrence of an Administrator Default,
the  Trustee  shall give  notice  thereof to the  Rating  Agencies  and the Note
Insurer.

        Section 2.6A. Appointment of Successor.

        (a) Upon receipt by the Administrator of notice of termination  pursuant
to Section 2.5A, or the resignation by the  Administrator in accordance with the
terms of this Agreement, the predecessor Administrator shall continue to perform
its functions as Administrator  under this Agreement in the case of termination,

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<PAGE>

only until the date specified in such termination  notice or, if no such date is
specified in a notice of  termination,  until receipt of such notice and, in the
case of resignation,  until the later of (x) the date 120 days from the delivery
to the Trustee and the Note Insurer of written  notice of such  resignation  (or
written  confirmation  of such  notice)  in  accordance  with the  terms of this
Agreement and (y) the date upon which the predecessor Administrator shall become
unable to act as  Administrator,  as specified in the notice of resignation  and
accompanying  opinion of counsel.  In the event of the termination  hereunder of
the  Administrator,  the  Depositors  shall  appoint a  successor  Administrator
acceptable to the Note Insurer and the Trustee, and the successor  Administrator
shall accept its  appointment by a written  assumption in form acceptable to the
Note Insurer and the Trustee.  In the event that a successor  Administrator  has
not been appointed at the time when the predecessor  Administrator has ceased to
act as  Administrator,  in  accordance  with this Section,  the Trustee  without
further action shall automatically be appointed the successor  Administrator and
the Trustee shall be entitled to the  Administration  Fee in accordance with the
provisions of this Agreement.  Notwithstanding  the above, the Trustee shall, if
it shall be unwilling  or legally  unable so to act, or if requested by the Note
Insurer,  appoint or petition a court of competent jurisdiction to appoint, with
the consent of the Note  Insurer,  any  established  institution  whose  regular
business shall include the servicing of student  loans,  as the successor to the
Administrator, as the case may be, under this Agreement; provided, however, that
such right to appoint or to petition for the  appointment  of any such successor
servicer  shall in no event relieve the Trustee from any  obligations  otherwise
imposed on it until such successor has in fact assumed such appointment.

        (b) Upon appointment, the successor Administrator (including the Trustee
acting as successor Administrator) shall be the successor in all respects to the
predecessor  Administrator  and shall be  subject  to all the  responsibilities,
duties  and  liabilities  arising  thereafter  relating  thereto  placed  on the
predecessor  Administrator  and shall be entitled to an amount agreed to by such
successor  Administrator  as the  case  may  be  (which  shall  not  exceed  the
Administration  Fee without the consent of the Note  Insurer) and all the rights
granted to the  predecessor  Administrator  by the terms and  provisions of this
Agreement.

        (c) The  Administrator  may not  resign  unless  it is  prohibited  from
serving as such by law as  evidenced  by an  opinion  of counsel to such  effect
delivered to the Trustee and the Note Insurer.  Notwithstanding the foregoing or
anything to the contrary herein or in the other Related Documents,  the Trustee,
to the extent it is acting as successor  Administrator  pursuant hereto shall be
entitled to resign within 30 days of its appointment as successor Administrator.

        Section   2.7A.    Notification   to   Noteholders   and    Subordinated
Certificateholders.

        Upon any  termination or  resignation  of, or appointment of a successor
to, the  Administrator  pursuant to this  Article  IIA,  the Trustee  shall give
prompt  written  notice  thereof to Note  Registrar  (who shall then give prompt
written notice thereof to the Noteholders), Subordinated Certificateholders, the
Note Insurer and the Rating Agencies (which, in the case of any such appointment
of a successor,  shall  consist of prior  written  notice  thereof to the Rating
Agencies).

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<PAGE>

        Section 2.8A. Waiver of Past Defaults.

        The  Noteholders  of Notes  evidencing  not less than a majority  of the
aggregate outstanding Principal Amount of the Notes with the consent of the Note
Insurer, or the Note Insurer, may, on behalf of all Noteholders and Subordinated
Certificateholders,  waive in writing  any default by the  Administrator  in the
performance of its obligations hereunder and any consequences thereof,  except a
default in making any  required  deposits  to or  payments  from the  Collection
Account (or giving  instructions  regarding  the same) in  accordance  with this
Agreement.  Upon any such waiver of a past default,  such default shall cease to
exist, and any  Administrator  Default arising therefrom shall be deemed to have
been remedied for every purpose of this  Agreement.  No such waiver shall extend
to any subsequent or other default or impair any right consequent thereto.

        Section 2.9A.  Sub-Administrators.

        (a) The Administrator,  as an independent  contractor,  shall administer
the Trust Property and shall have full power and authority,  acting alone, to do
any  and  all  things  in  connection   with  such   administration   which  the
Administrator  may deem necessary or desirable and consistent  with the terms of
this  Agreement.  The  Administrator  may enter into  agreements with affiliated
entities for purposes of carrying out any or all of the  Administrator's  duties
hereunder.  The  Administrator  shall  give  notice to the Note  Insurer  of the
appointment of any such  affiliate.  Any such agreement shall be consistent with
and not violate the provisions of this Agreement.

        (b) Notwithstanding  any such agreement,  the Administrator shall remain
obligated and primarily liable to the Trustee, the Noteholders, the Subordinated
Certificateholders  and the Note  Insurer  for the  administering  of the  Trust
Property in accordance with the provisions of this Agreement without  diminution
of such  obligation or liability by virtue of such agreements or arrangements to
the same extent and under the same terms and conditions as if the  Administrator
alone were servicing the administering the Trust Property.

        Section 2.10A.  Cash Flow Certificates.

        Not more than 60 and not less than 30 days  prior to each  December  31,
commencing with December 31, 2001, the  Administrator  shall cause the Cash Flow
Consultant to prepare and deliver to the Administrator, the Collateral Agent and
the  Trustee,  with a copy to the  Depositors,  the Note  Insurer and the Rating
Agencies,  a Cash Flow Certificate for each of the Underlying Trusts.  Each Cash
Flow  Certificate  shall be in  substantially  the form set  forth in  Exhibit H
hereto and shall set forth,  the maximum  amount that may be withdrawn  from the
applicable  Underlying  Trust and remitted to the Collateral Agent no later than
three  Business Days prior to the January 2 and July 2 next  succeeding the date
of such Cash Flow Certificate (the "Withdrawal Amounts") and shall set forth the
assumptions and methodology  used in calculating  such Withdrawal  Amounts.  Not
later than 5 Business Days following the Administrator's  receipt of a Cash Flow
Certificate,  the  Administrator  shall submit to the trustee of the  applicable
Underlying  Trust the related  Cash Flow  Certificate  along with a request that
each such trustee remit to the  Collateral  Agent,  no later than three Business
Days prior to the related January 2 and July 2 the applicable Withdrawal Amount.

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<PAGE>

        Section 2.11A.  Perfected Security Interest.

        The  Administrator  shall provide  written  directions to the Trustee to
take such actions,  including but not limited to filing Uniform  Commercial Code
Financing   Statements  and  continuation   statements,   as  the  Administrator
determines to be necessary to ensure that the security interest created pursuant
to Section 2.5 would be deemed a perfected  security  interest of first priority
under  applicable law and will be maintained as such throughout the term of this
Agreement.

        Section 2.12A.  Administrative Duties

        (a) The  Administrator  shall perform all of its duties and  obligations
under the Related Documents.  In addition,  the Administrator shall consult with
the Trustee as the Administrator  deems appropriate  regarding the duties of the
Trust  under  the  Related  Documents.   The  Administrator  shall  monitor  the
performance  of the Trust and shall  advise the Trustee when action is necessary
to comply  with the  Administrator's  duties  under the Related  Documents.  The
Administrator  shall  prepare  for  execution  by the  Trust or shall  cause the
preparation  by  other  appropriate  Persons  of all  such  documents,  reports,
filings,  instruments,  certificates and opinions as it shall be the duty of the
Administrator  or the Trust to prepare,  file or deliver pursuant to the Related
Documents.  Notwithstanding the foregoing,  the Administrator shall not have any
duty or  obligation  to make  any  payments  with  respect  to the  Notes or the
Subordinated  Certificates  or to make any  payments  or  assume  any  financial
obligations  to the Note Insurer or,  except as  specifically  set forth in this
Agreement, the Trust.

        (b)  The   Administrator   shall   obtain  and   preserve   the  Trust's
qualification to do business in each jurisdiction in which such qualification is
or shall be  necessary  to  protect  the  validity  and  enforceability  of this
Agreement and the Related  Documents and each other  instrument and agreement to
which the Trust is a party.

        (c)  Notwithstanding  anything in this  Agreement  or any of the Related
Documents to the contrary,  the Administrator  shall be responsible for promptly
notifying the Trustee, the Note Paying Agent and the Certificate Paying Agent in
the event  that any  withholding  tax is  imposed on the  Trust's  payments  (or
allocations of income) to a Noteholder or  Subordinated  Certificateholder.  Any
such notice  shall be in writing and specify the amount of any  withholding  tax
required to be withheld by the Trustee, the Note Paying Agent or the Certificate
Paying Agent pursuant to such provision.

        (d) The Administrator  shall perform any other duties expressly required
to be performed by the Administrator  under this Agreement or any of the Related
Documents.

        (e) In carrying out the foregoing duties or any of its other obligations
under this Agreement,  the  Administrator  may enter into  transactions  with or
otherwise deal with any of its affiliates;  provided, however, that the terms of
any such  transactions  or dealings  shall be in accordance  with any directions
received  from the Trust or the  Trustee  and  shall be, in the  Administrator's
opinion,  no less favorable to the Trust in any material respect than could have
been obtained with other non-affiliated parties.

                                       39
<PAGE>

        (f) The  Administrator  shall  furnish to the Trustee  from time to time
such additional  information regarding the Trust or the Related Documents as the
Trustee shall reasonably request.

                                   ARTICLE III
                   THE NOTES AND THE SUBORDINATED CERTIFICATES

        Section 3.1.  Initial Ownership.

        Upon  the  formation  of  the  Trust  and  until  the  issuance  of  the
Subordinated Certificates, the Depositors shall be the sole beneficial owners of
the Trust.  Upon the  issuance  of the  Subordinated  Certificates,  the Holders
thereof shall be the sole beneficial owners of the Trust.

        Section 3.2.  Conditions  to Issuance of the Notes and the  Subordinated
Certificates.

        On  or  before  the   delivery   of  the  Notes  and  the   Subordinated
Certificates,  the  Depositors  shall  deliver or cause to be  delivered  to the
Trustee on behalf of the Trust (i) the  documents  specified  in Section 2.5 and
(ii) the Policies.

        Section 3.3.  The Notes and Subordinated Certificates.

        (a) Notes, in an aggregate  principal  amount of  $57,500,000,  shall be
issued in  denominations  of  $100,000  initial  Principal  Amount and  integral
multiples of $1,000 in excess thereof.

        (b) Subordinated  Certificates shall be issued in minimum  denominations
corresponding  to a  Percentage  Interest of 10% and  multiples  of 1% in excess
thereof; provided,  however, that Subordinated Certificates may be issued to the
Holder of the  Special  Interest  and  MELMAC,  Inc.  in  minimum  denominations
corresponding to a Percentage Interest of 1%.

        (c) The Notes and the  Subordinated  Certificates  shall be  executed on
behalf of the Trust by the  Trustee  by manual  or  facsimile  signature  of any
authorized signatory of the Trustee. Notes and Subordinated Certificates bearing
the manual or facsimile  signatures  of  individuals  who were, at the time when
such signatures were affixed,  authorized to sign on behalf of the Trustee shall
be  validly   issued  and   entitled  to  the   benefits   of  this   Agreement,
notwithstanding  that  such  individuals  or any of them  have  ceased  to be so
authorized  prior to the  authentication  and  delivery  of such  Notes  and the
Subordinated   Certificates;   provided   that  such   Notes  and   Subordinated
Certificates  shall have been authenticated by the Registrar pursuant to Section
3.5.

                                       40
<PAGE>

        Section 3.4.  Unconditional  Rights of Noteholders to Receive  Principal
Amount and Interest.

        Subject to Sections  4.2 and 7.3,  the Holder of any Note shall have the
right,  which is absolute and  unconditional,  to receive  payments equal to the
Principal  Amount of and interest on such Note on or before the  Maturity  Date;
provided,  however, that no provisions contained herein shall restrict the right
of the Trust to retire the Notes prior to the Maturity Date.

        Section 3.5.  Authentication of Notes and Subordinated Certificates.

        On the Closing Date, the Note Registrar shall  authenticate  and deliver
the Notes to the Persons  designated by the Depositors  against  delivery to the
Trustee and the Note Registrar, in the case of any Notes that are not Book-Entry
Notes, of affidavits of such Persons  substantially in the form of Exhibit E. No
Note or Subordinated  Certificate  shall entitle its Holder to any benefit under
this  Agreement,  or shall be valid for any  purpose,  unless there shall appear
thereon a certificate of  authentication  substantially in the form set forth in
(i)  Exhibit  B in the  case  of a Note  or  (ii)  Exhibit  C in the  case  of a
Subordinated  Certificate,  executed by the Note  Registrar  or the  Certificate
Registrar,  as  the  case  may  be,  by  manual  or  facsimile  signature;  such
authentication   shall  constitute   conclusive   evidence  that  such  Note  or
Subordinated  Certificate  is entitled to the benefits of this Agreement and has
been duly executed,  authenticated,  authorized, issued and delivered hereunder.
All  Notes  and  Subordinated  Certificates  shall  be  dated  the date of their
authentication.  Concurrently  with the contribution of the Underlying  Residual
Rights and the  Maintenance  and  Operating  Expenses to the Trust,  and without
further action by the Depositors,  the Trustee, in the name and on behalf of the
Trust,  shall cause, and shall have power and authority and is hereby authorized
and  empowered  to  cause,  the  Special  Interest  (which  shall  include  a 1%
Percentage  Interest) and a Subordinated  Certificate  therefor to be issued to,
and  registered  in the name of, the  Holder of the  Special  Interest,  and the
balance of the Subordinated Certificates to be executed,  authenticated,  issued
and  delivered  to and  in the  name  of,  and  registered  in the  name  of the
following:  98%  of  the  Percentage  Interest  to  NELnet,  Inc.  and 1% of the
Percentage   Interest  to  MELMAC,   Inc.   Thereupon,   all  such  Subordinated
Certificates  and the  Special  Interest  shall be duly  authorized  and validly
issued, shall be fully paid and non-assessable  interests in the Trust and shall
be entitled to the benefits of this Agreement.

        Section  3.6.  Registration  of  Transfer  and  Exchange  of  Notes  and
Subordinated Certificates.

        (a) The Certificate Registrar shall maintain, or cause to be maintained,
at its Corporate  Trust Office or such other  location  designated in writing to
the  Trustee,  a  Certificate  Register  in which,  subject  to such  reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of the Subordinated  Certificates and of transfers and exchanges as
provided in this Agreement.  The Note Registrar  shall maintain,  or cause to be
maintained,  at its Corporate Trust Office or such other location  designated in
writing to the Collateral Agent and the Note Insurer,  a Note Register in which,
subject to such reasonable  regulations as it may prescribe,  the Note Registrar
shall  provide for the  registration  of Notes and of transfers and exchanges as
provided in this Agreement.

                                       41
<PAGE>

        (b) Upon  surrender of any  Subordinated  Certificate  at the  Corporate
Trust Office of the  Certificate  Registrar,  the Trustee on behalf of the Trust
shall execute, and the Certificate  Registrar shall authenticate and deliver one
or more new  Subordinated  Certificates,  in authorized  denominations of a like
Percentage  Interest,  dated the date of authentication  and registered,  in the
case of a registration of transfer, in the name of the transferee or transferees
or, in the case of an exchange, in the name of the Holder; provided that, upon a
registration  of  transfer,  the  Certificate  Registrar  shall have  received a
Representation Letter and Affidavit.

        (c) Upon surrender of any Note at the Corporate Trust Office of the Note
Registrar,  the  Trustee  on  behalf of the Trust  shall  execute,  and the Note
Registrar shall  authenticate and deliver,  one or more new Notes, in authorized
denominations  of  a  like  original   Principal  Amount,   dated  the  date  of
authentication and registered, in the case of a registration of transfer, in the
name of the designated transferee or transferees or, in the case of an exchange,
in the name of the Holder; provided, that:

               (i) upon the  registration  of transfer of a  Definitive  Note by
        delivery to the transferee of a new Definitive  Note, or the transfer by
        a Beneficial  Owner of its beneficial  interest in a Book-Entry  Note by
        delivery  to the new  transferee  of a new  Definitive  Note,  the  Note
        Registrar  shall have received a  Representation  Letter and  Affidavit,
        and, in the case of a transferee that is identified as an  Institutional
        Accredited  Investor,  the Note  Registrar  may, upon advice of counsel,
        require  additional  information,  certifications or opinions to confirm
        that the proposed  transfer is not required to be  registered  under the
        Securities Act of 1933;

               (ii) upon the  registration  of transfer of a Definitive  Note by
        delivery to the transferee of an interest in a Book-Entry Note, the Note
        Registrar shall have received a  Representation  Letter and Affidavit to
        the effect that the transferee is a Qualified Institutional Buyer;

               (iii) a  transfer  by a  Beneficial  Owner  of an  interest  in a
        Book-Entry Note to another  Beneficial Owner shall be effected solely in
        accordance with the rules of the Depository;

               (iv) a Holder of a Definitive  Note may at any time exchange such
        Definitive Note for another Definitive Note or Definitive Notes;

               (v) a Beneficial Owner of an interest in a Book-Entry Note may at
        any time  exchange  such  beneficial  interest for a Definitive  Note or
        Definitive Notes; and

               (vi) a Holder of a Definitive  Note may exchange such  Definitive
        Note for an  interest in a  Book-Entry  Note by  delivering  to the Note
        Registrar a Representation Letter and Affidavit to the effect that it is
        a Qualified Institutional Buyer.

                                       42
<PAGE>

        (d) Upon  registration  of transfer or exchange of a Definitive Note for
an interest in a Book-Entry Note, the Note Registrar shall (or shall request the
Depository to) endorse on the applicable Book-Entry Note an appropriate notation
evidencing the increase in the original principal balance of the Book-Entry Note
and the date thereof.  Upon  registration of transfer or exchange of an interest
in a Book-Entry  Note for a Definitive  Note, the Note Registrar shall (or shall
request  the  Depository  to)  endorse  on the  applicable  Book-Entry  Note  an
appropriate  notation  evidencing the decrease in the original principal balance
of the Book-Entry Note and the date thereof.

        (e) All Notes or Subordinated  Certificates issued upon any registration
of  transfer  or  exchange  shall be the  valid  obligations,  or  evidences  of
ownership,  as the case may be, of the Trust,  duly authorized,  validly issued,
and  entitled  to the  same  benefits  under  this  Agreement  as the  Notes  or
Subordinated  Certificates  surrendered  upon such  registration  of transfer or
exchange.

        (f) Every Note or Subordinated  Certificate presented or surrendered for
registration  of  transfer  or  exchange  shall  be  accompanied  by  a  written
instrument  of  transfer  in form  satisfactory  to the  Note  Registrar  or the
Certificate  Registrar,  as the case may be, duly  executed by the Holder or his
attorney  duly  authorized  in writing.  Each Note or  Subordinated  Certificate
surrendered  for  registration  of transfer or  exchange  shall be canceled  and
subsequently  disposed  of  by  the  Trustee  (or  the  Note  Registrar  or  the
Certificate  Registrar,  as the  case  may be,  on  behalf  of the  Trustee)  in
accordance with its customary practice.

        (g) No service charge shall be made for any  registration of transfer or
exchange of Notes or  Subordinated  Certificates,  but the Note Registrar or the
Certificate Registrar, as applicable, may require payment of a sum sufficient to
cover any tax or governmental  charge that may be imposed in connection with any
such transfer or exchange.

        (h)  Neither  the  Trustee,  the  Note  Registrar  nor  the  Certificate
Registrar shall be responsible for determining  compliance with the restrictions
on transfer in this  Agreement  provided it receives the  documents  referred to
above in this Section 3.6.

        (i) The  Holder  (and  Beneficial  Owner)  of a Note or the  Holder of a
Subordinated Certificate effecting transfer thereof shall be deemed to indemnify
each of the Trustee,  the  Collateral  Agent,  the Note  Registrar  and the Note
Paying Agent or the Certificate  Registrar and the Certificate  Paying Agent, as
applicable, each in its individual and fiduciary capacities, the Depositors, the
Administrator,  the Note Insurer and the Subordinated Certificateholders against
any  liability  that  may  result  if  the  transfer  is  not  exempt  from  the
registration  requirements  of the Securities Act of 1933.  Each Noteholder (and
each Beneficial Owner) or Subordinated  Certificateholder shall be deemed by its
acceptance  and holding of its Note or  Subordinated  Certificate  to agree that
none of the Depositors,  the Trustee,  the Collateral Agent, the Note Registrar,
the Certificate Registrar, the Note Insurer, the Subordinated Certificateholder,
the Note Paying Agent or the Certificate  Paying Agent is under an obligation to
register the Notes or the Subordinated  Certificates under the Securities Act of
1933 or any other securities law.

                                       43
<PAGE>

        (j) Any transfer in violation of this Section 3.6 (whether pursuant to a
purchase,  a transfer resulting from a default under a secured lending agreement
or otherwise) to a nonresident alien or a foreign corporation shall be deemed to
be of no legal force or effect  whatsoever and any nonresident  alien or foreign
corporation shall not be deemed to be a Holder for any purpose hereunder.

        (k) It is intended  that the  Book-Entry  Notes be  registered  so as to
participate  in a global  book entry  system with the  Depository,  as set forth
herein.  The Book-Entry  Notes shall be initially issued in the form of a single
fully  registered Note. Upon initial  issuance,  the ownership of the Book-Entry
Notes shall be registered in the Note Register in the name of Cede & Co., or any
successor thereto, as nominee for the Depository.

        The Trustee  and the Note Paying  Agent in the name and on behalf of the
Trust and the Note Paying  Agent shall have power and  authority  and are hereby
authorized  and empowered to execute and deliver the  Depository  Representation
Letter with the Depository.

        With respect to the Book-Entry  Notes registered in the Note Register in
the name of Cede & Co.,  as nominee of the  Depository,  the Note  Paying  Agent
shall have no responsibility or obligation to Direct or Indirect Participants or
beneficial  owners for which the Depository  holds Book-Entry Notes from time to
time as a Depository.  Without limiting the immediately preceding sentence,  the
Note Paying Agent shall have no responsibility or obligation with respect to (i)
the  accuracy  of the  records of the  Depository,  Cede & Co., or any Direct or
Indirect  Participant  with respect to the ownership  interest in the Book-Entry
Notes,  (ii) the  delivery  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
notice with  respect to the Notes or (iii) 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.  No Person  other than a Holder of a Note as shown in the
Note Register shall receive a certificate evidencing such Note.

        Upon delivery by the  Depository to the Note Registrar of written notice
to the effect that the  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  interest  by the mailing of checks or drafts to the Holders of Notes
as shown in the Note  Register on a Record  Date,  the name "Cede & Co." in this
Agreement shall refer to such new nominee of the Depository.  The Note Registrar
shall provide a copy of such written notice to the Note Paying Agent.

        (l) In the event that (i) the Depository or the Administrator advise the
Note  Registrar in writing that the  Depository is no longer  willing or able to
discharge properly its  responsibilities  as nominee and depository with respect
to the  Book-Entry  Notes and neither the  Depositors  nor the Note Registrar is
able to locate a qualified successor or (ii) the Depositors at their sole option
elect to terminate the book-entry system through the 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 Depository. At
that time,  the  Depositors  may determine  that the  Book-Entry  Notes shall be
registered in the name of and deposited with a successor  depository operating a

                                       44
<PAGE>

global book-entry system, as may be acceptable to the Administrator and at their
expense,  or such depository's  agent or designee but, if the Administrator does
not select such alternative global book-entry system,  then the Book-Entry Notes
may be registered in whatever name or names Holders of Notes shall designate and
Definitive  Notes issued,  in accordance  with the provisions  hereof.  The Note
Registrar shall provide a copy of such written notice to the Note Paying Agent.

        (m)  Notwithstanding  any  other  provision  of  this  Agreement  to the
contrary,  so long as any  Book-Entry  Note is  registered in the name of Cede &
Co., as nominee of the Depository, all distributions of principal or 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 Depository
Representation Letter.

        (n) A Person which  becomes the  Beneficial  Owner of a Book-Entry  Note
shall be deemed to make the representations set forth in Exhibit E to the Trust,
the Trustee,  the Collateral  Agent,  the Note Paying Agent, the Note Registrar,
the Note Insurer, the other Noteholders and the Subordinated Certificateholders.

        (o) No offer, sale, transfer or other disposition  (including pledge) of
the  Subordinated  Certificates  shall be made to any  Person  which  is,  or is
purchasing  for,  or on  behalf  of (1) an  employee  benefit  plan,  retirement
arrangement, individual retirement account or Keogh plan subject to either Title
I of the Employee Retirement Income Security Act of 1974, as amended, or Section
4975 of the  Internal  Revenue  Code  of  1986,  as  amended,  or (2) an  entity
(including an insurance company general account) whose underlying assets include
plan assets by reason of any such plan's arrangements or account's investment in
any such entity.

        Section 3.7. Mutilated,  Destroyed, Lost or Stolen Notes or Subordinated
Certificates.

        If (a) any mutilated Note or Subordinated  Certificate is surrendered to
the Note Registrar or the Certificate Registrar,  as the case may be, or (b) the
Note  Registrar  or the  Certificate  Registrar,  as the case  may be,  receives
evidence to its  satisfaction of the  destruction,  loss or theft of any Note or
Subordinated  Certificate  and there is delivered  to the Note  Registrar or the
Certificate Registrar,  as the case may be, such security or indemnity as may be
required by it to save it harmless,  then,  in the absence of written  notice to
the Registrar that such Note or Subordinated  Certificate has been acquired by a
bona fide purchaser,  the Trustee on behalf of the Trust shall execute,  and the
Note  Registrar  or  the  Certificate  Registrar,  as the  case  may  be,  shall
authenticate  and  deliver,  in exchange  for or in lieu of any such  mutilated,
destroyed,  lost or  stolen  Note or  Subordinated  Certificate,  a new  Note or
Subordinated  Certificate  of  like  original  Principal  Amount  or  Percentage
Interest.  In  connection  with the  issuance  of any new  Note or  Subordinated
Certificate  under this  Section  3.7,  the Note  Registrar  or the  Certificate
Registrar,  as the case may be, 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 Trustee
and the  Note  Registrar  or the  Certificate  Registrar,  as the  case  may be)
connected  therewith.  Any duplicate  Note or  Subordinated  Certificate  issued
pursuant  to this  Section 3.7 shall be duly  authorized,  validly  issued,  and
entitled  to the  benefits of this  Agreement  and shall  constitute  conclusive
evidence of ownership,  as if originally issued, whether or not the lost, stolen
or destroyed Note or Subordinated Certificate shall be found at any time.

                                       45
<PAGE>

        Section   3.8.    Persons   Deemed    Noteholders    and    Subordinated
Certificateholders.

        Prior to due  presentation  of a Note or  Subordinated  Certificate  for
registration of transfer,  the Trustee,  the Collateral  Agent,  the Note Paying
Agent,  the Note Registrar or the  Certificate  Paying Agent and the Certificate
Registrar,  as the case may be and their  agents  may treat the  person in whose
name any Note or Subordinated Certificate is registered as the owner thereof for
the purpose of receiving  payments or distributions  pursuant to Section 4.2 and
for all other  purposes  whatsoever,  and none of the  Trustee,  the  Collateral
Agent, the Note Paying Agent, the Note Registrar or the Certificate Paying Agent
and the Certificate Registrar,  as the case may be, or any of their agents shall
be affected by any notice to the contrary.

        Section  3.9.   Access  to  List  of   Noteholders'   and   Subordinated
Certificateholders' Names and Addresses.

        (a) The Note  Registrar  shall  furnish or cause to be  furnished to the
Depositors, the Administrator, the Holder of the Special Interest or one or more
Subordinated  Certificateholders  holding  not less  than 25% of the  Percentage
Interest of the  Subordinated  Certificates  within 15 days after receipt by the
Note Registrar of a written request therefor,  a list of the names and addresses
of  the  Noteholders  as  of  the  most  recent  Record  Date  for  payments  to
Noteholders.  If three or more Noteholders,  or one or more Noteholders  holding
not less than 25% of the aggregate  Principal  Amount of the Notes  (hereinafter
referred to as "Applicants"),  apply in writing to the Note Registrar,  and such
application  states  that  the  Applicants  desire  to  communicate  with  other
Noteholders  with  respect to their  rights  under this  Agreement  or under the
Notes,  then the Note  Registrar  shall,  within  five  Business  Days after the
receipt of such  application,  afford  such  Applicants  access,  during  normal
business  hours,  to the  current  list of  Noteholders.  Every  Noteholder,  by
receiving and holding a Note,  agrees that none of the Depositors,  the Trustee,
the Note  Insurer,  the Note  Paying  Agent and Note  Registrar  or any of their
agents  shall  be held  accountable  by  reason  of the  disclosure  of any such
information  as to the  names  and  addresses  of  the  Noteholders  under  this
Agreement, regardless of the source from which such information was derived.

        (b) The Certificate  Registrar shall furnish or cause to be furnished to
the Depositors, the Administrator,  or the Holder of the Special Interest within
15 days after receipt by the Registrar of a written request therefor,  a list of
the names and addresses of the  Subordinated  Certificateholders  as of the most
recent Record Date for  distributions  to  Subordinated  Certificateholders.  If
three  or more  Subordinated  Certificateholders,  or one or  more  Subordinated
Certificateholders  holding  not  less  than  25%  of the  Percentage  Interests
(hereinafter  referred to as "Applicants"),  apply in writing to the Certificate
Registrar, and such application states that the Applicants desire to communicate
with other  Subordinated  Certificateholders  with respect to their rights under

                                       46
<PAGE>

this  Agreement or under the  Subordinated  Certificates,  then the  Certificate
Registrar   shall,   within  five  Business  Days  after  the  receipt  of  such
application, afford such Applicants access, during normal business hours, to the
current   list   of   Subordinated   Certificateholders.    Every   Subordinated
Certificateholder,  by receiving and holding a Subordinated Certificate,  agrees
that none of the  Depositors,  the Trustee,  the Note Insurer,  the  Certificate
Paying  Agent,  the  Certificate  Registrar or any of their agents shall be held
accountable by reason of the disclosure of any such  information as to the names
and  addresses  of the  Subordinated  Certificateholders  under this  Agreement,
regardless of the source from which such information was derived.

        Section 3.10. Disposition by the Holder of the Special Interest.

        On and after the Closing Date, the Holder of the Special  Interest shall
retain beneficial and record ownership of Subordinated Certificates representing
at least 1% (but not more than 99%) of the Percentage  Interest.  To the fullest
extent  permitted by applicable law, any attempted  transfer of any Subordinated
Certificate  that  would  reduce  such  interest  of the  Holder of the  Special
Interest  below  1%  of  the  Percentage  Interest  shall  be  void.  The  Trust
Certificate  representing  the 1% Special  Interest  issued to the Holder of the
Special Interest shall contain a legend stating "TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THIS CERTIFICATE IS NOT TRANSFERABLE."

                                   ARTICLE IV
              ADMINISTRATION OF COLLECTION ACCOUNT, RESERVE ACCOUNT
                    AND DISTRIBUTION ACCOUNT; CERTAIN DUTIES

        Section  4.1.  Collection  Account,  Reserve  Account  and  Distribution
Account.

        (a) The  Collateral  Agent shall  establish and maintain the  Collection
Account  in the name of the  Trust,  which  shall  be an  Eligible  Account  and
initially will be a segregated trust account  maintained at the Collateral Agent
or an  affiliate  thereof  and  shall be  entitled  "The  NELnet  Group  Trust I
Collection Account."

        The  Collateral  Agent also shall  establish  and  maintain  the Reserve
Account  in the name of the  Trust,  which  shall  be an  Eligible  Account  and
initially will be a segregated trust account  maintained at the Collateral Agent
or an affiliate  thereof and shall be entitled "The NELnet Group Trust I Reserve
Account."  The Reserve  Account will be divided into two  sub-accounts.  On each
Payment Date, the Collateral Agent will transfer from the Collection  Account to
the first  sub-account of the Reserve Account the amount,  if any,  remaining in
the  Collection  Account on such Payment  Date,  after giving effect to payments
made pursuant to Section 4.2(a)(i) through (xi), inclusive,  until the amount of
cash in the first  sub-account  of the  Reserve  Account  equals  the  Specified
Reserve Account  Requirement.  For the purpose of funding the second sub-account
of the Reserve Account,  the Trust shall deliver the Debt Service Reserve Surety
Bond to the Note Paying Agent.  If on the Business Day prior to any Payment Date
(other than the first Payment  Date),  the amount in the  Collection  Account is
less  than the  amount  to be paid on such  Payment  Date  pursuant  to  Section
4.2(a)(i) through (vii), inclusive, the Collateral Agent shall withdraw from the
first  sub-account of the Reserve Account and deposit in the Collection  Account

                                       47
<PAGE>

the lesser of (x) the amount  then on  deposit in the first  sub-account  of the
Reserve  Account and (y) the amount of such  shortfall.  If on the  Business Day
prior to any  Payment  Date (other  than the first  Payment  Date) the amount on
deposit  in the first  sub-account  of the  Reserve  Account  would  exceed  the
Specified Reserve Account Requirement for such Payment Date (after giving effect
to all payments to be made on such Payment Date  pursuant to Section  4.2(a) (i)
through (xiii),  inclusive),  the Collateral Agent shall withdraw from the first
sub-account  of the Reserve  Account and  deposit in the  Collection  Account an
amount  equal to such  excess.  For  purposes of this  Agreement,  when the Note
Paying  Agent is  entitled  to draw on the  second  sub-account  of the  Reserve
Account,  the Note Paying  Agent shall draw on the Debt Service  Reserve  Surety
Bond in the manner provided in Section 4.9 of this Agreement.

        The Collateral Agent shall deposit in the Collection Account (within one
Business  Day of  receipt  thereof)  all  amounts  received  on  account  of the
Underlying  Residual Rights,  any Optional Advances received pursuant to Section
4.8(a) and any Principal  Subsidy Payments  received pursuant to Section 4.8(b).
In connection  therewith,  the Depositors and the  Administrator  shall take, or
cause to be taken,  all  actions  required or  permitted  under the terms of the
Indentures and the other  Underlying  Agreements so that amounts  entitled to be
received on account of the Underlying  Residual  Rights and the  Maintenance and
Operating  Expenses  are  received  in a timely  manner to make  payments on the
Notes.  Such actions shall  include,  but not be limited to, the  procedures set
forth in Section 2.10A.

        The Trustee shall establish and maintain the Distribution Account in the
name of the Trust,  which shall be an Eligible  Account and initially  will be a
segregated trust account  maintained at Wilmington Trust Company or an affiliate
thereof and shall be entitled "The NELnet Group Trust I Distribution Account."

        On each Payment Date,  the Note Paying Agent shall  withdraw all amounts
then on deposit in the Collection  Account and apply the funds in the manner set
forth in Section 4.2 of this Agreement. The Note Paying Agent also shall deposit
in the  Collection  Account,  promptly  upon  receipt  thereof,  all Surety Bond
Payments and Insured Payments received from the Note Insurer.

        (b) The Trust will possess all right, title and interest in all funds on
deposit from time to time in the Collection Account, the Reserve Account and the
Distribution  Account  and all  proceeds  thereof  subject  to the  terms of the
Security  Agreement.  The Note  Paying  Agent  is  authorized  to draw  upon the
Collection  Account and the Reserve Account and the Certificate  Paying Agent is
authorized  to draw on the  Distribution  Account for the purposes of making all
payments therefrom required or permitted by this Agreement. If, at any time, the
Collection Account, the Reserve Account or the Distribution  Account,  ceases to
be an Eligible  Account,  the  Collateral  Agent,  in the case of the Collection
Account and the Reserve Account, or the Trustee, in the case of the Distribution
Account,  shall within five Business Days after a  Responsible  Officer  thereof
shall obtain actual knowledge  thereof (or such longer period,  not to exceed 30
calendar  days,  as to which the Rating  Agency  may  consent)  establish  a new
Collection Account, Reserve Account or Distribution Account, as the case may be,
as an Eligible  Account and the Note Paying Agent shall transfer any cash and/or
any investments to such new Collection  Account or Reserve Account,  as the case
may  be,  or the  Certificate  Paying  Agent  shall  transfer  any  cash  and/or
investments to such new Distribution Account.

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<PAGE>

        (c) All amounts held in the Collection  Account and the Reserve  Account
shall be  invested  to the  extent  permitted  by  applicable  laws,  rules  and
regulations,   by  the  Collateral  Agent  at  the  written   direction  of  the
Administrator  in Eligible  Investments that are payable on demand or mature not
later than one  Business  Day prior to the  Payment  Date to which such  amounts
relate. Amounts held in the Distribution Account shall remain uninvested. In the
absence of directions by the  Administrator,  the Collateral  Agent shall invest
all such  amounts in  Eligible  Investments  as  defined  in clause  (ii) of the
definition thereof. Investments in Eligible Investments must be made in the name
of the Collateral Agent for the benefit of the Noteholders and the Note Insurer,
and,  unless  payable  on demand  at par,  such  investments  may not be sold or
disposed of prior to their  maturity.  Any  investment  of funds must be made in
Eligible  Investments held by a financial  institution with respect to which (a)
such institution has noted the Collateral Agent's interest therein by book entry
or otherwise and (b) a confirmation of the Collateral  Agent's interest has been
sent to the Collateral  Agent by such  institution,  provided that such Eligible
Investments are (i) specific certificated securities, and (ii) either (A) in the
possession  of  such  institution  or  (B)  in  the  possession  of  a  clearing
corporation  in New York or Delaware,  registered  in the name of such  clearing
corporation,  not endorsed for  collection or surrender or any other purpose not
involving  transfer,  not  containing  any  evidence  of  a  right  or  interest
inconsistent  with the Collateral  Agent's  interest  therein,  and held by such
clearing  corporation  in an account of such  institution.  Subject to the other
provisions  hereof,  the Collateral Agent 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
Collateral Agent or its agent,  together with each document of transfer, if any,
necessary to transfer  title to such  investment  to the  Collateral  Agent in a
manner which complies with this Section 4.1. All interest, dividends, gains upon
sale and other income from, or earnings on investment of funds in the Collection
Account and the Reserve Account shall  constitute  part of the Amount  Available
and shall be applied on the next  Payment  Date  pursuant  to Section  4.2(a) or
4.2(c),  as the case may be.  All  investments  of  amounts  on  deposit  in the
Collection  Account also shall comply with the terms of the Security  Agreement.
Neither the Trustee,  the  Administrator nor the Collateral Agent shall have any
liability for any losses on  investments  made in  accordance  with this Section
4.1.

        Section 4.2. Use of Funds in Collection  Account,  Distribution  Account
and Reserve Account.

        (a) On each Payment Date,  the Note Paying Agent,  based solely upon the
information  contained in the Payment Date Report delivered  pursuant to Section
4.7, shall apply the sum of (i) the Amount Available,  (ii) amounts  transferred
from the first  sub-account of the Reserve  Account  pursuant to Section 4.1(a),
and (iii) any Surety Bond  Payments and Insured  Payments  received  pursuant to
Section 4.9 in the  following  order of priority  (provided,  however,  that (A)
Optional Advances may only be used for priorities (i), (ii), (iii), (iv) and (v)
below, (B) Principal  Subsidy Payments may only be used for priority (vii) below
and (C) Surety  Bond  Payments  and,  prior to the  Maturity  Date of the Notes,
Insured Payments may only be used for priority (v) below):

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<PAGE>

                (i) first,  to the  Trustee,  an amount equal to the accrued and
unpaid Trustee Fee for such period pursuant to Section 6.1;

               (ii)  second,  to the  Collateral  Agent,  an amount equal to the
accrued and unpaid Collateral Agent Fee for such Payment Date;

               (iii) third, to the Note Insurer,  an amount equal to the accrued
and unpaid Note Insurer Premiums for such Payment Date;

                (iv)  fourth,  to the  Administrator,  an  amount  equal  to the
accrued and unpaid Administration Fees for such Payment Date;

               (v) fifth, to the  Noteholders,  the Interest  Amount;  provided,
however,  if the portion of the amount remaining in the Collection Account after
application of clauses (i), (ii), (iii) and (iv) above is less than the Interest
Amount,  such  remaining  amount shall be paid to the  Noteholders on a pro rata
basis  according to the Principal  Amount of the  respective  Notes held by such
Noteholders;

               (vi) sixth,  to the Note  Insurer,  in respect of amounts owed on
account of any Surety Bond  Payments  previously  made,  together  with interest
accrued thereon at the rate set forth in the Financial Guaranty Agreement;

               (vii) seventh, to the Noteholders,  on a pro rata basis according
to the Principal  Amount of the respective  Notes held by such  Noteholders,  an
amount equal to the Principal Payment Amount;

               (viii) eighth, to the Noteholders,  on a pro rata basis according
to the Principal  Amount of the  respective  Notes held by such  Noteholder,  an
amount equal to the Special Principal Payment, if any, for such Payment Date;

                (ix) ninth, to reimburse the  Administrator for any unreimbursed
Optional Advances made pursuant to Section 4.8(a);

               (x) tenth,  to the Note  Insurer,  in respect of amounts  owed on
account of any Insured Payments  previously made, together with interest accrued
thereon at the rate set forth in the Insurance Agreement;

                (xi)  eleventh,  to  the  Trustee,  any  unpaid  indemnification
payments required to be made pursuant to Section 5.8;

               (xii) twelfth,  to the first  sub-account of the Reserve  Account
until the  amount on  deposit  therein  equals  the  Specified  Reserve  Account
Requirement for such Payment Date;

                (xiii) thirteenth, to the Note Insurer, any unpaid Reimbursement
Amounts; and

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<PAGE>

                (xiv) fourteenth,  any remainder to Certificate Paying Agent for
deposit in the Distribution Account.

        On each  Payment  Date,  the  Certificate  Paying  Agent shall remit all
amounts  it  receives  pursuant  to  clause  (xiv)  above  to  the  Subordinated
Certificateholders according to their respective Percentage Interests.

        (b) If any withholding  tax is imposed on the payments or  distributions
by the  Trust  (or  allocations  of  income)  to a  Noteholder  or  Subordinated
Certificateholder,  such tax shall reduce the amount otherwise  distributable to
the Noteholder or Subordinated Certificateholder in accordance with this Section
4.2. The Note Paying Agent or the Certificate  Paying Agent, as the case may be,
is hereby  authorized  to retain from  amounts  otherwise  distributable  to the
Noteholders or Subordinated  Certificateholders sufficient funds for the payment
of any tax that is legally owed by the Trust.  The amount of any withholding tax
so imposed shall be treated as cash paid to such  Noteholder or  distributed  to
such Subordinated  Certificateholder at the time it is withheld by the Trust and
remitted to the appropriate  taxing  authority.  If there is a possibility  that
withholding  tax is payable,  the Note Paying  Agent or the  Certificate  Paying
Agent, as the case may be, may in its sole  discretion  withhold such amounts in
accordance   with  this  Section   4.2(b).   If  a  Noteholder  or  Subordinated
Certificateholder  wishes to apply for a refund of any such withholding tax, the
Note Paying Agent or the  Certificate  Paying  Agent,  as the case may be, shall
reasonably  cooperate with such Noteholder or Subordinated  Certificateholder in
making such claim so long as such Noteholder or  Subordinated  Certificateholder
agrees to reimburse the Note Paying Agent or the  Certificate  Paying Agent,  as
the case may be, for any out-of-pocket expenses incurred.

        (c) If on the Business Day prior to any Payment Date,  the amount in the
Collection  Account  is less  than the  amount to be paid on such  Payment  Date
pursuant to Section  4.2(a)(i),  (ii), (iii), (iv) and (v) (such shortfall,  the
"Collection  Account  Shortfall"),  the Note  Paying  Agent shall be entitled to
withdraw  from the Reserve  Account and  deposit in the  Collection  Account the
lesser of (x) the Debt Service  Available Amount and (y) the Collection  Account
Shortfall. Such withdrawal from the Reserve Account shall be accomplished by the
Note Paying Agent drawing on the Debt Service  Reserve Surety Bond in the manner
provided in Section 4.9 of this Agreement.

        Section 4.3.  Method of Payment or Distribution.

        Payments required to be made to Noteholders and  distributions  required
to be made to Subordinated  Certificateholders on any Payment Date shall be made
to each Holder of record on the preceding  Record Date either by wire  transfer,
in immediately  available funds, to the account of each such Holder at a bank or
other entity having appropriate  facilities therefor,  if such Holder shall have
provided  to  the  Note  Paying  Agent  or  the  Certificate  Paying  Agent,  as
applicable,  appropriate written  instructions at least five Business Days prior
to such Payment Date (which may be represented by a single  continuing  request)
or,  if not,  by check  mailed  to such  Holder at the  address  of such  Holder
appearing in the Note Register or Certificate Register.

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<PAGE>

        Section 4.4.  No Segregation of Moneys; No Interest.

        Moneys  hereunder  need not be  segregated  in any manner  except to the
extent required by law or by Sections 4.1 or 4.2 and may be deposited under such
general  conditions as may be prescribed by law, and neither the Trustee nor the
Paying Agent shall be liable for any interest thereon.

        Section 4.5.  Accounting; Reports; Tax Returns.

        (a) The Holder of the Special  Interest  shall (i) maintain (or cause to
be maintained)  the books of the Trust on a  calendar-year  basis on the accrual
method of accounting, (ii) deliver (or cause to be delivered) to each Noteholder
and  Subordinated  Certificateholder,  as  may  be  required  by  the  Code  and
applicable Treasury Regulations,  such information as may be required, including
Form 1099 with respect to each  Noteholder  or Schedule K-l with respect to each
Subordinated Certificateholder, to enable each Holder to prepare its federal and
state  income tax  returns,  (iii)  file or cause to be filed  such tax  returns
relating to the Trust (including a partnership  information  return, Form 1065),
and make such  elections  as may from time to time be  required  or  appropriate
under any applicable  state or federal statute or rule or regulation  thereunder
so as to maintain  the Trust's  characterization  as a  partnership  for federal
income tax purposes and (iv)  collect or cause to be collected  any  withholding
tax as described in and in accordance with Section 4.2(b) with respect to income
or distributions to Noteholders or Subordinated Certificateholders.

        (b) The Trustee shall sign on behalf of the Trust the tax returns of the
Trust  furnished to it in execution form by the Holder of the Special  Interest,
unless  applicable  law requires a Subordinated  Certificateholder  to sign such
documents,  in which  case such  documents  shall be signed by the Holder of the
Special  Interest.  The Holder of the Special Interest shall be the "tax matters
partner" of the Trust pursuant to the Code and shall sign on behalf of the Trust
the tax returns of the Trust.

        Section 4.6.  Optional Redemption of Notes.

        (a) On any day  following  the  Payment  Date on which  the  outstanding
Principal  Amount  of the Notes  equals  10% or less of the  original  Principal
Amount of the Notes, the Administrator  shall have the option to purchase all of
the Underlying  Residual Rights and the Maintenance and Operating  Expenses.  To
exercise such option the Administrator shall deposit into the Collection Account
an amount equal to the sum of (i) the  Principal  Amount of the Notes,  plus any
unpaid  interest   thereon  through  the  date  of  redemption,   and  (ii)  any
unreimbursed  Surety Bond  Payments  and Insured  Payments,  any amounts due and
owing to the Note  Insurer  under  the  Insurance  Agreement  and the  Financial
Guaranty Agreement and all other accrued and unpaid expenses of the Trust.

        (b) The Note Paying Agent shall mail written  notice to the  Noteholders
(with a copy to each Rating Agency and the Note Insurer) specifying (i) the date
upon  which the  final  payment  with  respect  to the Notes  shall be made upon
presentation  and  surrender of the Notes at the office of the Note Paying Agent
therein specified,  (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Payment Date is not applicable, payment
being made only upon  presentation  and  surrender of the Notes at the office of

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<PAGE>

the Note Paying Agent therein specified.  Upon the giving of such notice and the
Administrator's  making  provision for payment of the Notes,  the Notes shall be
deemed to be paid and any amounts in the Collection  Account and Reserve Account
not  required for the payment of the Notes shall be  distributable  (i) first to
the Note Insurer for any unreimbursed Surety Bond Payments and Insured Payments,
(ii) second, to the  Administrator,  to the extent of any unreimbursed  Optional
Advances, and then (iii) third, to the Certificate Paying Agent for distribution
to the Subordinated  Certificateholders according to their respective Percentage
Interests. The Note Paying Agent shall cause to be paid to Noteholders the final
payment with respect to the Notes only upon  presentation  and  surrender of the
Notes.

        (c)  If  all  the  Noteholders  shall  not  surrender  their  Notes  for
cancellation  within six months after the date specified in the  above-mentioned
written notice,  the Note Paying Agent shall give a second written notice to the
remaining  Noteholders  (with a copy to each Rating Agency and the Note Insurer)
to surrender  their Notes for  cancellation  and receive the final  payment with
respect thereto.  If within one year after the second notice all the Notes shall
not have been  surrendered  for  cancellation,  the Note  Paying  Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the  remaining  Noteholders  concerning  surrender of their Notes,  and the cost
thereof  shall be paid out of the funds and other assets that remain  subject to
this Agreement.  Subject to applicable  escheat laws, any funds remaining in the
Trust which are payable to  Noteholders  after the Note Paying  Agent shall have
taken  such  measures  shall  be  distributed  by the Note  Paying  Agent to the
Certificate Paying Agent for distribution to the Subordinated Certificateholders
(but only upon termination of this Agreement) and the Noteholders, by acceptance
of their Notes,  hereby waive any rights with respect to such funds  against the
Trust,  the Trustee,  the  Collateral  Agent,  the Note Paying  Agent,  the Note
Insurer or the Certificate  Paying Agent and shall look only to the Subordinated
Certificateholders.

        Section 4.7.  Reports.

        (a) No later than each Payment Date, the Note Paying Agent, based solely
from the  information  provided by the  Administrator,  shall prepare a "Payment
Date Report"  substantially  in the form of Exhibit D attached  hereto and shall
provide such Payment Date Report (together with copies of each report or notice,
if any,  furnished  to the Note Paying  Agent by the Trustee and received by the
Trustee from the trustees of each of the Indentures since the last Payment Date)
to each Noteholder and the Note Insurer on each such Payment Date.

        (b) Within 45 days after the end of each calendar  year, the Note Paying
Agent  shall  furnish or cause to be  furnished  to each  Person who at any time
during  the  calendar  year was the  Holder  of a Note and the  Note  Insurer  a
statement containing the information with respect to payments of interest on and
principal of such Holder's Note made during such calendar year.  Such obligation
of the Note Paying  Agent shall be deemed to have been  satisfied  to the extent
that substantially  comparable  information shall be provided by the Note Paying
Agent pursuant to any requirements of the Code as from time to time in force.

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<PAGE>

        (c)  Copies of all  reports  provided  by the Note  Paying  Agent to the
Noteholders shall also be provided to the Rating Agency, the Note Insurer and to
the   Certificate   Paying   Agent   for   distribution   to  the   Subordinated
Certificateholders.

        (d) The  Administrator  shall  cooperate  with the Note Paying  Agent in
preparing the reports required to be provided  pursuant to this Section 4.7 and,
in such  regard,  shall  provide the Note Paying  Agent and the Trustee with all
information necessary to prepare the Payment Date Reports no later than noon New
York City time 3 Business Days prior to the related Payment Date.

        Section 4.8.  Optional Advances and Principal Subsidy Payments.

        (a) If for any Payment Date the Interest  Amount would exceed the sum of
the aggregate  amount in the  Collection  Account (less the amount to be paid on
such Payment Date pursuant to Section  4.2(a)(i),  (ii),  (iii) and (iv) above),
the  Administrator,  in its  sole  option,  may  elect  to  deposit,  or have an
affiliate  deposit,  in the  Collection  Account (no later than the Business Day
immediately  preceding  such  Payment  Date) an amount up to the  amount of such
deficiency  (such  deposit is referred to as an  "Optional  Advance").  Optional
Advances,  if any, shall be recoverable,  without interest, by the Administrator
pursuant to Sections 4.2(a)(ix) and 7.3(vii) hereof.

        (b) If for any Payment  Date,  the amount that will be  remaining in the
Collection  Account after application of Section  4.2(a)(i),  (ii), (iii), (iv),
(v) and (vi) is less than the amount needed to reduce the Recalculated  Targeted
Amount of the Notes to the Targeted Balance for such Payment Date, the Trust, in
the Administrator's  sole option, may elect to deposit in the Collection Account
(no later than the  Business Day  immediately  preceding  such Payment  Date) an
amount up to the amount of such  deficiency  (such  deposit is  referred to as a
"Principal   Subsidy   Payment").   Principal  Subsidy  Payments  shall  not  be
recoverable by the Trust.

        (c) If for any Payment  Date an Optional  Advance or  Principal  Subsidy
Payment will be made, the Administrator  shall provide written notice thereof to
each Rating Agency.

        Section 4.9.  The Policies.

        (a) As soon as possible, and in no event later than 10:00 A.M., New York
time, on the Business Day  immediately  preceding  each Payment  Date,  the Note
Paying  Agent  shall  furnish  the Note  Insurer  and the  Administrator  with a
completed notice in the form set forth as Exhibit I hereto (the "Notice") in the
case of a draw  under the Note  Insurance  Policy  and a  completed  demand  for
payment in the form set forth as Exhibit J hereto (the "Demand for Payment"), in
the case of a draw under the Debt Service  Reserve  Surety  Bond,  which will be
based upon the  information  set forth in the  Administrator's  report  provided
pursuant to Section  4.7(d),  that an Insured  Payment or a Surety Bond  Payment
will be required with respect to such Payment Date. The Notice or the Demand for
Payment  shall  specify the total  amount of the Insured  Payment or Surety Bond
Payment,  as the case may be, to be paid on the  applicable  Payment  Date,  and
shall constitute a claim for a Surety Bond Payment or an Insured Payment, as the

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<PAGE>

case  may be,  pursuant  to the Debt  Service  Reserve  Surety  Bond or the Note
Insurance  Policy,  respectively.  The Note  Insurer  shall remit or cause to be
remitted to the Insurance  Paying Agent the amount of the Surety Bond Payment or
Insured Payment, as the case may be. Upon receipt of such Surety Bond Payment or
Insured Payment by the Insurance Paying Agent on behalf of the  Noteholders,  it
shall remit such amounts to the Collateral  Agent, who shall deposit such Surety
Bond Payment or Insured Payment, as the case may be, in the Collection Account.

        The Note Paying  Agent shall serve as Insurance  Paying Agent  hereunder
for so long as the Debt Service Reserve Surety Bond or the Note Insurance Policy
shall remain in effect;  provided,  however, that the Insurance Paying Agent may
be located in another jurisdiction with the written consent of the Note Insurer.
The  Insurance  Paying Agent shall act as the agent of the Note Paying Agent and
shall (i) pay Surety Bond Payments and Insured  Payments  received from the Note
Insurer as the Note Paying Agent shall  direct and (ii) take such other  actions
with respect to the Note Insurer and the Policies as the Note Paying Agent shall
direct. The Note Paying Agent shall act initially as the Insurance Paying Agent.

        The Note Paying Agent shall receive through the Insurance  Paying Agent,
as  attorney-in-fact  of each  Holder of Notes,  any Surety  Bond  Payments  and
Insured  Payments  from the Note Insurer and disburse the same to each Holder of
Notes in accordance with the provisions of this Article IV. Surety Bond Payments
and Insured  Payments  disbursed by the Note Paying  Agent from  proceeds of the
Policies  shall not be  considered  payment by the Trust nor shall such payments
discharge the  obligation of the Trust with respect to such Notes,  and the Note
Insurer  shall become the owner of the right to receive such unpaid  amounts due
from the Trust in respect of the Notes.  The Note Paying Agent hereby  agrees on
behalf of each  Holder  of Notes for the  benefit  of the Note  Insurer  that it
recognizes  that to the extent the Note Insurer  makes  Surety Bond  Payments or
Insured  Payments,  either  directly  or  indirectly  (as by paying  through the
Insurance Paying Agent), to the Noteholders, the Note Insurer will be subrogated
to the rights of the  Noteholders  with  respect to such Surety Bond  Payment or
Insured  Payment,  as the case may be,  shall be  deemed  to the  extent  of the
payments so made to be a registered Noteholder and shall receive available funds
in  accordance  with Section 4.2 until all such Surety Bond Payments and Insured
Payments  by the Note  Insurer  have been fully  reimbursed.  To  evidence  such
subrogation,  the Note Paying Agent shall, or shall cause the Note Registrar to,
note the Note Insurer's rights as subrogee on the registration  books maintained
by the Note  Registrar upon receipt from the Note Insurer of proof of payment of
any Surety Bond Payment or Insured Payment.

                                    ARTICLE V
    THE TRUSTEE, THE COLLATERAL AGENT, THE NOTE PAYING AGENT, THE CERTIFICATE
         PAYING AGENT, THE NOTE REGISTRAR AND THE CERTIFICATE REGISTRAR

        Section 5.1.  General Authority and Duties.

        (a) The Trustee  shall have power and authority and hereby is authorized
and  empowered in the name and on behalf of the Trust to execute and deliver the
Related  Documents to which the Trust is to be a party and each  certificate  or

                                       55
<PAGE>

other document  attached as an exhibit to or  contemplated  by this Agreement or
the Related  Documents  to which the Trust is to be a party.  In addition to the
foregoing,  the Trustee  shall have power and authority and hereby is authorized
and empowered in the name on behalf of the Trust, but shall not be obligated, to
take all actions required of the Trust or the Trustee pursuant to this Agreement
or any of the Related Documents.

        (b) None of the Trustee,  the Collateral  Agent,  the Note Paying Agent,
the Certificate  Paying Agent, the Note Registrar and the Certificate  Registrar
may manage,  control,  use, sell,  dispose of or otherwise deal with any part of
the Trust Property  except (i) in accordance  with the powers granted to and the
authority  conferred  pursuant to this  Agreement,  (ii) in accordance  with the
Related  Documents  and (iii) in  accordance  with any  document or  instruction
delivered to the Trustee,  the  Collateral  Agent,  the Note Paying Agent or the
Note Registrar pursuant to Section 5.2.

        (c) Each of the Trustee,  the Collateral  Agent,  the Note Paying Agent,
the Certificate  Paying Agent, the Note Registrar and the Certificate  Registrar
accepts the trusts hereby  created,  and agrees to perform its duties  hereunder
but only such duties as are  specifically  set forth in this Agreement.  None of
the Trustee, the Collateral Agent, the Note Paying Agent, the Certificate Paying
Agent,  the Note Registrar and the Certificate  Registrar shall be answerable or
accountable or personally  liable  hereunder or under any Related Document under
any  circumstances,  except to the Trust,  the Note Insurer and the Subordinated
Certificateholders  (i) for its own gross  negligence or bad faith,  (ii) in the
case  of the  inaccuracy  of  any  representation  or  warranty  made  by it and
contained  in  Section  5.4,  (iii)  if it is the  obligor  (other  than  in its
fiduciary  capacity) on an Eligible  Investment or (iv) for taxes, fees or other
charges  on,  based on or measured  by, any fees,  commissions  or  compensation
received by it in connection with any of the  transactions  contemplated by this
Agreement or any Related Document.  In particular,  but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence), none of the
Trustee,  the Collateral  Agent, the Note Paying Agent,  the Certificate  Paying
Agent, the Note Registrar and the Certificate Registrar shall:

               (i) be liable for: (1) any error of judgment  made in good faith;
        (2) any  action  taken or  omitted  to be  taken by it in good  faith in
        accordance with the instructions of the Subordinated  Certificateholders
        or  the  Administrator  or  instructions   otherwise  pursuant  to  this
        Agreement or the Related  Documents;  (3)  indebtedness  evidenced by or
        arising  under  any of the  Related  Documents;  or (4) the  default  or
        misconduct of the Depositors or the  Administrator  under this Agreement
        or any of the Related Documents or otherwise;

               (ii)  be  responsible  for  or in  respect  of  the  validity  or
        sufficiency  of this  Agreement or for the due  execution  hereof by the
        Depositors or the Administrator or for the form, character, genuineness,
        sufficiency, value or validity of any of the Trust Property or for or in
        respect of the validity or sufficiency of the Related  Documents,  other
        than the certificate of authentication on the Notes and the Subordinated
        Certificates,  and shall not  assume or incur any  liability,  duty,  or
        obligation to the  Depositors,  the  Administrator  or any Noteholder or
        Subordinated  Certificateholder,  other than as  expressly  provided for
        herein and in the Related Documents; or

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<PAGE>

               (iii) be obligated to exercise any of the rights or powers vested
        in it by  this  Agreement  or any  Related  Document,  or to  institute,
        conduct or defend any litigation under this Agreement or otherwise or in
        relation to this  Agreement  or any Related  Document,  at the  request,
        order   or   direction   of  the   Noteholders   or   the   Subordinated
        Certificateholders,   unless  the   Noteholders   or  the   Subordinated
        Certificateholders have offered to it security or indemnity satisfactory
        to it against the costs,  expenses and liabilities  that may be incurred
        by it therein or thereby.

        (d) The right of the Trustee,  the Collateral Agent, the Note Registrar,
the Certificate  Registrar,  the Note Paying Agent,  or the  Certificate  Paying
Agent to perform any  discretionary  act  enumerated in this Agreement or in any
Related Document shall not be construed as a duty.

        (e) Without limiting the generality of the foregoing,  the Trustee,  the
Collateral Agent, the Note Paying Agent, the Certificate  Paying Agent, the Note
Registrar and the Certificate Registrar:

               (i) may rely on and shall be  protected  in acting in good  faith
upon  the  written  instructions  of  the  Note  Insurer,  or  the  Subordinated
Certificateholders  and such employees and  representatives of the Note Insurer,
or the Subordinated Certificateholders may hereinafter designate in writing; and

               (ii)  shall not be liable for any error of  judgment,  or for any
act done or step taken or omitted by it, in good  faith,  or for any  mistake of
fact or law, or for anything  that it may do or refrain from doing in connection
therewith,  except in the case of gross negligent performance or omission or bad
faith.

        Section 5.2.  Action Upon Instruction.

        (a) Except as otherwise set forth herein,  the Note Insurer or, with the
consent of the Note Insurer, the Subordinated  Certificateholders shall have the
exclusive  right to direct the actions of the Trustee in the  management  of the
Trust  (including all rights  exercisable by the Trust with respect to the Trust
Property) and the actions of the Collateral  Agent,  the Note Paying Agent,  the
Certificate  Paying Agent,  the Note Registrar and the Certificate  Registrar in
the  performance  of  their  duties  hereunder,  in each  case,  so long as such
directions  are not  inconsistent  with the express terms set forth herein or in
any Related Document.

        (b) None of the Trustee,  the Collateral  Agent,  the Note Paying Agent,
the Certificate  Paying Agent,  the Note Registrar or the Certificate  Registrar
shall be required to take any action  hereunder or under any Related Document if
it shall have reasonably determined, or shall have been advised by counsel, that
such  action is contrary  to the terms  hereof or of any Related  Document or is
otherwise contrary to law or may result in liability on the part of the Trustee,
the Collateral  Agent, the Note Paying Agent, the Certificate  Paying Agent, the
Note Registrar or the Certificate Registrar

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<PAGE>

        (c) None of the Trustee,  the Collateral  Agent,  the Note Paying Agent,
the Certificate  Paying Agent, the Note Registrar and the Certificate  Registrar
may take any action (a) that is inconsistent  with the purposes of the Trust set
forth in Section  2.3 or (b) that,  to the  actual  knowledge  of a  Responsible
Officer,  would  result in the Trust's  becoming  taxable as a  corporation  for
federal   income  tax   purposes.   The  Note   Insurer  and  the   Subordinated
Certificateholders   may  not  direct  taking  action  that  would  violate  the
provisions of this Section. Subject to the foregoing:

               (i)  Whenever  the Trustee  receives a request for the  Trustee's
        consent to any  amendment,  modification  or waiver with  respect to the
        Indentures  or any  document  relating  thereto,  or receives  any other
        solicitation for any action with respect to the Indentures or Underlying
        Residual  Rights,   the  Trustee  shall  promptly  give  notice  to  the
        Noteholders,  the Subordinated  Certificateholders  and the Note Insurer
        requesting instructions as to the course of action to be adopted and, to
        the  extent  it  acts in good  faith  in  accordance  with  any  written
        instructions  received  from the Holders of a majority of the  Principal
        Amount  of the  Notes,  the  Holders  of a  majority  of the  Percentage
        Interests of the  Subordinated  Certificates  and the Note  Insurer,  it
        shall not be liable on account of such action to any  Person;  provided,
        however,  that the Trustee  shall not vote in favor of or consent to any
        matter (i) which  would alter the timing or amount of any payment on the
        Underlying Residual Rights or (ii) which would result in the exchange or
        substitution  of any Underlying  Residual  Rights pursuant to a plan for
        the refunding or refinancing of such Underlying Residual Rights,  except
        in each case with the unanimous consent of the Noteholders.

               (ii) Whenever the Trustee,  the Collateral Agent, the Note Paying
        Agent,  the  Certificate   Paying  Agent,  the  Note  Registrar  or  the
        Certificate  Registrar,  is unable to decide between alternative courses
        of action  permitted  or required by the terms of this  Agreement or any
        Related Document,  it shall promptly give notice to the Note Insurer and
        the  Subordinated  Certificateholders  requesting  instruction as to the
        course of action to be adopted,  and to the extent it acts in good faith
        in accordance with any written instruction  received from the Holders of
        a majority of Percentage Interests of the Subordinated  Certificates and
        the Note  Insurer,  it shall not be liable on account of such  action to
        any Person.

               (iii) If the  Trustee,  the  Collateral  Agent,  the Note  Paying
        Agent,  the  Certificate   Paying  Agent,  the  Note  Registrar  or  the
        Certificate  Registrar is unsure as to the  application of any provision
        of this  Agreement  or any  Related  Document or any such  provision  is
        ambiguous  as to its  application,  or is, or appears to be, in conflict
        with any other applicable  provision,  or if this Agreement  permits any
        determination  by it or is silent or is  incomplete  as to the course of
        action that it is required to take with respect to a  particular  set of
        facts,  it may give  notice  to the Note  Insurer  and the  Subordinated
        Certificateholders  requesting  instruction  and,  to the extent that it
        acts or  refrains  from  acting  in good  faith in  accordance  with any
        instruction  received  from the  Holders  of a  majority  of  Percentage
        Interests of the  Subordinated  Certificates  and the Note  Insurer,  it
        shall not be  liable,  on  account of such  action or  inaction,  to any
        Person.

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<PAGE>

               (iv) If the Trustee, the Collateral Agent, the Note Paying Agent,
        the  Certificate  Paying Agent,  the Note  Registrar or the  Certificate
        Registrar shall not have received appropriate instruction within 10 days
        of any notice given pursuant to the foregoing clauses (i), (ii) or (iii)
        (or within such shorter period of time as reasonably may be specified in
        any such notice or may be necessary  under the  circumstances),  it may,
        but shall be under no duty to, take or refrain  from taking such action,
        not  inconsistent  with this Agreement or the Related  Documents,  as it
        shall  deem to be in the best  interests  of the  Noteholders,  the Note
        Insurer and,  after the Notes have been paid in full,  the  Subordinated
        Certificateholders  and shall have no  liability  to any Person for such
        action or inaction.

        Section  5.3. No Duties  Except as  Specified  in This  Agreement  or in
Instructions; Not Acting in Individual Capacity.

        (a) None of the Trustee,  the Collateral  Agent,  the Note Paying Agent,
the Certificate  Paying Agent,  the Note Registrar or the Certificate  Registrar
shall have any duty or obligation  to manage,  make any payment with respect to,
register,  record,  sell, dispose of, or otherwise deal with the Trust Property,
or to otherwise  take or refrain from taking any action under,  or in connection
with this Agreement,  any Related Document,  or any document contemplated hereby
or thereby,  except as expressly  provided by the terms of this Agreement or any
Related Document or in any written instruction received pursuant to Section 5.2;
and no implied  duties or  obligations  shall be read into this Agreement or any
Related  Document  against the Trustee,  the Collateral  Agent,  the Note Paying
Agent,  the  Certificate  Paying Agent,  the Note  Registrar or the  Certificate
Registrar. None of the Trustee, the Collateral Agent, the Note Paying Agent, the
Certificate Paying Agent, the Note Registrar or the Certificate  Registrar shall
have  any  responsibility  to  prepare  or  file  any  Securities  and  Exchange
Commission  filing  for the Trust or to record  this  Agreement  or any  Related
Document.

        (b)  Except  as  otherwise  expressly  provided  in this  Article V (and
particularly  Section 5.1), in accepting  the trusts hereby  created  Wilmington
Trust  Company  acts  solely  as  Trustee  hereunder  and  not in an  individual
capacity,  and all Persons having any claim against the Trustee by reason of the
transactions  contemplated by this Agreement or any Related  Document shall look
only to the Trust Property for payment or satisfaction thereof.

        (c)  Notwithstanding  anything in this  agreement to the contrary in the
event  of  gross  negligence,  lack of good  faith  or  willful  misconduct  (as
determined by a court of competent  jurisdiction)  of the Collateral  Agent, the
Note  Registrar  or the Note  Paying  Agent or any of its  directors,  officers,
agents or  employees,  the  Collateral  Agent,  the Note  Registrar and the Note
Paying Agent and any of its directors,  officers,  agents and employees shall be
liable to the Note Insurer for the amount of any Insured  Payment or Surety Bond
Payment and any  charges,  fees,  costs and expenses the Note Insurer may pay or
incur,  including  but not limited to attorneys'  fees,  in connection  with the
payment of a claim under the Policies due to the gross negligence,  lack of good
faith or willful  misconduct of the Collateral  Agent, the Note Registrar or the
Note  Paying  Agent or any of its  directors,  officers,  agents  or  employees;
provided, however, in no event shall the Trustee, the Collateral Agent, the Note
Paying  Agent,  the  Certificate  Paying  Agent,  the  Note  Registrar  and  the

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<PAGE>

Certificate  Registrar be liable for special,  indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits),  even
if the Trustee,  the Collateral  Agent,  the Note Paying Agent,  the Certificate
Paying Agent, the Note Registrar and the Certificate Registrar have been advised
of the likelihood of such loss or damage and regardless of the form of action.

        Section 5.4.  Representations and Warranties.

        (a) The Trustee hereby  represents and warrants to the  Depositors,  the
Administrator, the Noteholders and the Subordinated Certificateholders that:

               (i) It is a banking  corporation and trust company duly organized
        and validly existing in good standing under the laws of Delaware and has
        its principal office within the State of Delaware.

               (ii) It has taken all corporate action necessary to authorize the
        execution and delivery by it of this Agreement and each Related Document
        to which the Trust is a party.

                (iii) It is  eligible  to act as  Trustee  pursuant  to  Section
        9.1(a).

               (iv)  Neither  the  execution  nor  the  delivery  by it of  this
        Agreement,  nor the  performance by it of its  obligations  contemplated
        hereby nor  compliance by it with any of the terms or provisions  hereof
        will contravene any federal or Delaware state law,  governmental rule or
        regulation  governing  the banking or trust powers of the Trustee or any
        judgment or order  binding on it, or  constitute  any default  under its
        charter  documents  or by-laws  or any  indenture,  mortgage,  contract,
        agreement  or  instrument  to which it is a party or by which any of its
        properties may be bound.

        (b)  Each  of the  Note  Registrar  and the  Note  Paying  Agent  hereby
represents and warrants to the Note Insurer, the Depositors,  the Administrator,
the Noteholders and the Subordinated Certificateholders that:

               (i) It is a banking  corporation and trust company duly organized
        and validly existing in good standing under the laws of the State of New
        York.

               (ii) It has taken all corporate action necessary to authorize the
        execution and delivery by it of this Agreement and each Related Document
        to which it is a party.

               (iii)  Neither  the  execution  nor  the  delivery  by it of this
        Agreement,  nor the  performance by it of its  obligations  contemplated
        hereby nor  compliance by it with any of the terms or provisions  hereof
        will contravene any federal or New York State law,  governmental rule or
        regulation  governing the banking or trust powers of the Note  Registrar
        or Note  Paying  Agent  or any  judgment  or  order  binding  on it,  or
        constitute  any default  under its charter  documents  or by-laws or any
        indenture,  mortgage, contract, agreement or instrument to which it is a
        party or by which any of its properties may be bound.

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<PAGE>

        Section 5.5.  Reliance; Advice of Counsel.

        (a) Each of the Trustee,  the Collateral  Agent,  the Note Paying Agent,
the Certificate  Paying Agent, the Note Registrar and the Certificate  Registrar
may  conclusively  rely on and  shall  be fully  protected  in  acting  upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report,  opinion or other  document  or paper  believed  by it to be genuine and
believed by it to be signed by the proper party or parties.  A certified copy of
a resolution of the board of directors or other  governing body of any corporate
party or other entity shall be conclusive evidence that such resolution has been
duly  adopted  by such body and that the same is in full force and effect and as
to  any  fact  or  matter  the  method  of the  determination  of  which  is not
specifically  prescribed  herein, a certificate,  signed by the president or any
vice president or by the treasurer or secretary or other  authorized  officer of
the relevant party, as to such fact or matter,  shall constitute full protection
for any  action  taken or  omitted to be taken by the  Trustee,  the  Collateral
Agent, the Note Paying Agent,  the Certificate  Paying Agent, the Note Registrar
and the Certificate Registrar in good faith in reliance thereon.

        (b) In the exercise or administration of the trusts hereunder and in the
performance  of its duties and  obligations  under this Agreement or the Related
Documents, each of the Trustee, the Collateral Agent, the Note Paying Agent, the
Certificate  Paying Agent, the Note Registrar and the Certificate  Registrar (i)
may,  at the  expense of the Holder of the  Special  Interest,  act  directly or
through its agents or attorneys  pursuant to agreements entered into with any of
them,  and shall not be liable for the conduct or  misconduct  of such agents or
attorneys  if such  agents or  attorneys  shall  have been  selected  by it with
reasonable  care and (ii) may,  at the  expense  of the  Holder  of the  Special
Interest,  consult with counsel,  accountants  and other  skilled  persons to be
selected  with  reasonable  care and  employed by it. None of the  Trustee,  the
Collateral Agent, the Note Paying Agent, the Certificate  Paying Agent, the Note
Registrar  and the  Certificate  Registrar  shall be liable for  anything  done,
suffered or omitted in good faith by it in accordance  with the written  opinion
or advice of any such counsel, accountants or other such persons.

        Section 5.6.  May Own Notes.

        Each of the Trustee,  the Collateral  Agent,  the Note Paying Agent, the
Certificate  Paying Agent,  the Note Registrar and the Certificate  Registrar in
its  individual  or any other  capacity may become the owner or pledgee of Notes
and may deal with the  Depositors  and the  Administrator  in  banking  or other
transactions with the same rights as it would have if it were not acting in such
capacity.

        Section 5.7.  Doing Business in Other Jurisdictions.

        Notwithstanding  anything contained herein to the contrary, the Trustee,
the Collateral  Agent, the Note Registrar and the Note Paying Agent shall not be
required  to take any  action  in any  jurisdiction  other  than in the State of
Delaware if the taking of such action will:  (i) require the consent or approval

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<PAGE>

or  authorization  or order of or the giving of notice  to, or the  registration
with or the  taking  of any  other  action  in  respect  of,  any state or other
governmental  authority  or agency of any  jurisdiction  other than the State of
Delaware;  (ii) result in any fee,  tax or other  governmental  charge under the
laws of any jurisdiction or any political  subdivisions  thereof in existence on
the date  hereof  other  than the  State of  Delaware  becoming  payable  by the
Trustee,  the Collateral  Agent,  the Note Registrar or the Note Paying Agent in
its individual capacity; or (iii) subject the Trustee, the Collateral Agent, the
Note Registrar or the Note Paying Agent in its  individual  capacity to personal
jurisdiction in any jurisdiction  other than the State of Delaware for causes of
action arising from acts unrelated to the  consummation  of the  transactions by
the Trustee,  the Collateral  Agent, the Note Registrar or the Note Paying Agent
as the case may be, contemplated hereby.

        Section 5.8.  Indemnification.

        The Holder of the  Special  Interest  shall  indemnify,  defend and hold
harmless the Trustee (in its  individual and trust  capacities),  the Collateral
Agent,  the Note  Registrar  and the Note  Paying  Agent and  their  successors,
assigns, directors, officers, employees, agents and servants (collectively,  the
"Indemnified  Parties") from and against, any and all liabilities,  obligations,
losses,  damages,  taxes (other than income taxes related to the Trustee  Fees),
claims,  actions  and suits,  and any and all  reasonable  costs,  expenses  and
disbursements  (including  reasonable  legal fees and  expenses) of any kind and
nature  whatsoever  (collectively,  "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Trustee or any Indemnified Party in any
way relating to or arising out of this  Agreement,  the Related  Documents,  the
Trust  Property,  the  administration  of the Trust or the Trust Property or the
action or inaction of the Trustee,  the Certificate Paying Agent, the Collateral
Agent,  the Note Registrar,  the Note Paying Agent or the Certificate  Registrar
hereunder,  except  only that the Holder of the  Special  Interest  shall not be
liable for or  required to  indemnify  the  Trustee  from and  against  Expenses
arising or  resulting  from any of the matters  described  in Section 5.9 (i) or
(ii). The indemnities contained in this Section shall survive the resignation or
termination of the Trustee, the Collateral Agent, the Note Registrar or the Note
Paying Agent or the  termination of this  Agreement.  In any event of any claim,
action  or  proceeding  for which  indemnity  will be  sought  pursuant  to this
Section,  the Trustee's choice of legal counsel shall be subject to the approval
of the Holder of the Special Interest,  which approval shall not be unreasonably
withheld.

        Section 5.9.  Acceptance of Trusts and Duties.

        The Trustee  accepts the trusts hereby created and agrees to perform its
duties  hereunder  with  respect to such  trusts but only upon the terms of this
Agreement.  The Trustee also agrees to disburse all moneys actually  received by
it constituting part of the Trust Estate upon the terms of the Related Documents
and this  Agreement.  The Trust Company  shall not be answerable or  accountable
hereunder or under any Related Document under any  circumstances,  except to the
Trust, the Note Insurer and the Subordinated  Certificateholders (i) for its own
willful  misconduct,  bad faith or gross  negligence  or (ii) in the case of the
inaccuracy of any  representation or warranty contained in Section 5.4 expressly
made by the Trust  Company.  In  particular,  but not by way of limitation  (and
subject to the exceptions set forth in the preceding sentence):

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<PAGE>

        (a)    the Trust Company shall not be liable for any error of judgment;

        (b) the Trust  Company  shall not be liable  with  respect to any action
taken or omitted to be taken by the Trustee,  the  Certificate  Paying Agent, or
the Certificate  Registrar in accordance  with the  instructions of the Trustee,
the  Administrator,  the Holder of the  Special  Interest,  or any  Subordinated
Certificateholder,  instructions  otherwise in accordance with this Agreement or
any Related Document, or in reliance on any provision of this Agreement;

        (c) no provision of this Agreement or any Related Document shall require
the Trust  Company  to expend or risk  funds or  otherwise  incur any  financial
liability  in the  performance  of any rights or powers  hereunder  or under any
Related  Document  if the  Trust  Company  shall  have  reasonable  grounds  for
believing that repayment of such funds or adequate  indemnity  against such risk
or liability is not reasonably assured or provided to it;

        (d) under no  circumstances  shall the Trust  Company  be liable for the
Subordinated  Certificates  or any  amount  due and  owing  thereon,  any  other
interest  in or  indebtedness  of the Trust,  or  indebtedness  evidenced  by or
arising  under any of the Related  Documents,  including  the  principal  of and
interest on the Notes;

        (e) the Trust Company shall not be responsible  for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by any
other party hereto, or for the form, character, genuineness,  sufficiency, value
or validity of any of the Trust Property or for or in respect of the validity or
sufficiency   of  the  Related   Documents,   other  than  the   certificate  of
authentication on the Subordinated Certificates,  and the Trust Company shall in
no event assume or incur any liability,  duty or obligation to any Noteholder or
to any Subordinated  Certificateholder  or other Person, other than as expressly
provided for herein;

        (f) the Trust  Company shall not be liable for the default or misconduct
of the  Trustee  or Holder of the  Special  Interest  or the  Depositors  or the
Administrator or the Holders or the Registrar (if not the Trustee) or the Paying
Agent (if not the Trustee)  under any of the Related  Documents or otherwise and
the Trust  Company  shall have no  obligation  or liability to monitor or insure
compliance  by  the  Trustee  or  the  Holder  of the  Special  Interest  or the
Depositors  or the  Administrator  or the Holders or the  Registrar  (if not the
Trustee) or the Paying Agent (if not the Trustee) with any agreement to which it
is a party or to perform the  obligations  of the Trust under this  Agreement or
the Related  Documents  that are not  expressly  required to be performed by the
Trustee under this Agreement; and

        (g) the  Trustee,  Certificate  Paying  Agent,  Collateral  Agent,  Note
Registrar,  Note  Paying  Agent  and  Certificate  Registrar  shall  be under no
obligation  to  exercise  any of the  rights  or  powers  vested  in it by  this
Agreement  or any  Related  Document,  or to  institute,  conduct  or defend any
litigation under this Agreement or otherwise or in relation to this Agreement or
any  Related  Document,  at  the  request,  order  or  direction  of  any of the
Administrator,  the Subordinated Certificateholders or Noteholders or otherwise,
unless such Administrator,  Subordinated  Certificateholders or Noteholders have

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<PAGE>

offered to the Trustee,  Collateral  Agent,  Note Registrar or Note Paying Agent
security  or  indemnity  satisfactory  to it  against  the costs,  expenses  and
liabilities that may be incurred by the Trustee therein or thereby. The right of
the Trustee,  the Certificate  Paying Agent,  Collateral  Agent, Note Registrar,
Note Paying Agent or the Certificate  Registrar to perform any discretionary act
enumerated in this  Agreement or in any Related  Document shall not be construed
as a duty,  and,  except as otherwise  provided in Section 5.9 (i) and (ii), the
Trust Company shall not be answerable in the performance of any such act.

        Section 5.10. Trustee,  Collateral Agent, Note Registrar and Note Paying
Agent Not Liable for Subordinated Certificates or Underlying Residual Rights.

        The recitals  contained herein and in the Subordinated  Certificates and
the Notes (other than the  signature  and  authentication  of the Trustee on the
Subordinated Certificates) shall be taken as the statements of the Administrator
and the Trustee,  Collateral  Agent, Note Paying Agent and Note Registrar assume
no responsibility for the correctness  thereof.  The Trustee,  Collateral Agent,
Note Paying Agent and Note Registrar make no representations or warranties as to
the validity or sufficiency of this Agreement, of any Related Document or of the
Subordinated  Certificates  (other than the signature and  authentication of the
Trustee on the  Subordinated  Certificates)  or the Notes,  or of any Underlying
Residual Rights or related documents. The Trustee, Collateral Agent, Note Paying
Agent and Note Registrar shall at no time have any  responsibility  or liability
for or with respect to the legality, validity and enforceability of any Note, or
for or with respect to the  sufficiency  of the Trust Property or its ability to
generate the payments to be distributed to  Subordinated  Certificateholders  or
the Noteholders.

        Section 5.11. Payments from Trust Property.

        All payments to be made by the Trustee,  the Collateral  Agent, the Note
Paying Agent or the Certificate  Paying Agent under this Agreement or any of the
Related  Documents to which the Trust or the Trustee,  the Collateral Agent, the
Note Paying Agent or the Certificate  Paying Agent is a party shall be made only
from the income and  proceeds of the Trust  Property and only to the extent that
the Trustee,  the  Collateral  Agent,  the Note Paying Agent or the  Certificate
Paying Agent shall have received  income or proceeds from the Trust  Property to
make such payments in accordance with the terms hereof. None of the Trustee, the
Collateral  Agent, the Note Paying Agent or the Certificate  Paying Agent or any
successor thereto, in its individual  capacity,  shall be liable for any amounts
payable under this Agreement or any of the Related Documents to which the Trust,
the Trustee,  the  Collateral  Agent,  the Note Paying Agent or the  Certificate
Paying Agent is a party.

        Section  5.12.  Consent  of the Note  Insurer  With  Respect  to Certain
Matters.

        With  respect to the  following  matters,  neither  the  Trustee nor the
Collateral  Agent shall take  action,  and the  Subordinated  Certificateholders
shall not direct the Trustee or the Collateral  Agent to take any action without
the prior written consent of the Note Insurer:

        (a)  the  initiation  of any  claim  or  lawsuit  by the  Trust  and the
compromise of any action, claim or lawsuit brought by or against the Trust;

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<PAGE>

        (b) the election by the Trust to file an amendment to the Certificate of
Trust  (unless such  amendment is required to be filed under the Business  Trust
Statute);

        (c) the  amendment  or other  change to this  Agreement  or any  Related
Document  in  circumstances  where the  consent  of any  Noteholder  or the Note
Insurer is required;

        (d) the  amendment  or other  change to this  Agreement  or any  Related
Document  in  circumstances  where the  consent  of any  Noteholder  or the Note
Insurer is not  required and such  amendment  materially  adversely  affects the
interests of the Subordinated Certificateholders;

        (e) the  appointment  pursuant to this  Agreement  of a  successor  Note
Registrar,  Certificate Registrar, Note Paying Agent or Certificate Paying Agent
or the consent to the assignment by the Note Registrar,  Certificate  Registrar,
Certificate  Paying Agent or Certificate  Paying Agent of its obligations  under
this Agreement;

        (f) the  consent to the  calling or  waiving  of any  default  under any
Related Document;

        (g) the consent to the assignment by the Trustee or the Collateral Agent
of its respective obligations under any Related Document;

        (h) except as provided in Article VIII, dissolve, terminate or liquidate
the Trust in whole or in part;

        (i) merge or  consolidate  the Trust with or into any other  entity,  or
convey or transfer all or  substantially  all of the Trust's assets to any other
entity;

        (j) cause the Trust to incur,  assume or guaranty any indebtedness other
than as set forth in this Agreement;

        (k)    do any act that conflicts with any other Related Document;

        (l) do any act which would make it  impossible  to carry on the ordinary
business of the Trust as described in Section 2.3 hereof;

        (m)    confess a judgment against the Trust;

        (n) possess Trust assets,  or assign the Trust's right to property,  for
other than a Trust purpose;

        (o)    cause the Trust to lend any funds to any entity; or

        (p) change the Trust's  purposes and powers from those set forth in this
Agreement.

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        The Trustee  shall not have the power,  except upon the direction of the
Subordinated Certificateholders with the consent of the Note Insurer, and to the
extent consistent with the Related  Documents,  to (i) institute  proceedings to
have the Trust declared or adjudicated a bankrupt or insolvent,  (ii) consent to
the institution of bankruptcy or insolvency proceedings against the Trust, (iii)
file a petition  or consent to a petition  seeking  reorganization  or relief on
behalf of the Trust  under  any  applicable  federal  or state law  relating  to
bankruptcy, (iv) consent to the appointment of a receiver, liquidator, assignee,
trustee,  sequestrator  (or any similar  official) of the Trust or a substantial
portion of the property of the Trust, (v) make any assignment for the benefit of
the Trust's creditors, (vi) cause the Trust to admit in writing its inability to
pay its debts as they  generally  become due or (vii) take any action,  or cause
the Trust to take any action, in furtherance of any of the foregoing (any of the
above, a "Bankruptcy  Action").  So long as the Insurance  Agreement  remains in
effect and the Note Insurer is not in default of its payment  obligations  under
either of the Policies, no Subordinated  Certificateholder  shall have the power
to take, and shall not take, any Bankruptcy  Action with respect to the Trust or
direct the Depositors or the Trustee to take any Bankruptcy  Action with respect
to the Trust or the Depositors.

        Section 5.13. Actions by Subordinated Certificateholders with Respect to
Bankruptcy.

        The  Trustee  shall not have the power to commence a  bankruptcy  action
relating to the Trust without the consent and approval of the Note Insurer,  the
unanimous approval of all the Subordinated  Certificateholders  and the delivery
to  the  Trustee  by  each  Subordinated   Certificateholder  of  a  certificate
certifying  that such  Subordinated  Certificateholder  reasonably  believes the
Trust to be insolvent.

        Section  5.14.  Restrictions  on  the  Subordinated  Certificateholders'
Powers.

        The Subordinated Certificateholders shall not direct the Trustee to take
or refrain  from taking any action if such action or inaction  would be contrary
to any obligation of the Trust or the Trustee under this Agreement or any of the
Related  Documents  or would be contrary to Section  2.3 of this  Agreement  nor
shall the Trustee be obligated to follow any such direction, if given.

        Section 5.15. Fiduciary Duties of the Trustee.

        (a)  Notwithstanding   anything  contained  herein  or  in  the  Related
Documents to the contrary,  the duties and responsibilities of the Trustee shall
be limited to those  expressly  provided for in this  Agreement,  and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this  Agreement  or the  Related  Documents  against  the  Trustee.
Without limiting the generality of the foregoing, the Trustee does not have, and
shall not be deemed to have,  any  fiduciary  relationship  with the  Collateral
Agent, the Noteholders or the Note Insurer.  Rather, this Agreement creates only
an  administrative  relationship  between  independent  contracting  parties  to
facilitate  the lending and  borrowing  of funds and the  issuance of the Notes.
With respect to the Collateral Agent, the Noteholders and the Note Insurer,  the
Trustee  undertakes  to  perform  or  observe  only  such of the  covenants  and
obligations of the Trustee as are expressly set forth in this Agreement,  and no
implied  covenants or  obligations  with respect to the  Collateral  Agent,  the

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Noteholders  or the Note Insurer shall be read into this  Agreement or the other
Related  Documents  against the Trustee.  The Trustee shall not be deemed to owe
any fiduciary duty to the Collateral Agent, the Noteholders or the Note Insurer,
and  shall  not be liable to any such  person  for the  failure  of the Trust to
perform  its  obligations  to such  persons  other  than as  result of the gross
negligence  or  willful  misconduct  of the  Trustee in the  performance  of its
express obligations under this Agreement.

        (b) Whenever in connection with its performance under this Agreement the
Trustee   receives   inconsistent   notices  or  advice  from  the  Subordinated
Certificateholders,  the Noteholders and the Note Insurer,  the Trustee need not
take any action in respect with such notices or advice  unless and until Trustee
receives (a)  indemnification in respect of the matters noted in such notices or
advice to its  satisfaction or (b) written  direction signed by the Subordinated
Certificateholders, the Note Insurer and the Noteholders in respect thereof.

        (c) In its capacity as Trustee,  Wilmington Trust Company owes fiduciary
and other duties (the "Duties") to the Subordinated Certificateholders under the
this Agreement.  The  Subordinated  Certificateholders,  the Noteholders and the
Note  Insurer  acknowledge  and  agree  that the  Trustee  has  only the  duties
expressly  set forth  herein  and  waive any  potential  or actual  conflict  of
interest  that may arise as a result  thereof.  In  addition,  the  Subordinated
Certificateholders  acknowledge and agree that their rights under this Agreement
are subordinate to the rights of the Note Insurer and the Noteholders to enforce
the Trustee's duties to the Note Insurer and the Noteholders expressly set forth
herein to the extent  inconsistent with the Trustee's Duties to the Subordinated
Certificateholders  expressly set forth herein, and agree that in no event shall
the Trustee be liable to the Subordinated  Certificateholders as a result of the
foregoing.

                                   ARTICLE VI
                       COMPENSATION OF TRUSTEE AND OTHERS

        Section 6.1.  Fees and Expenses.

        For performing its services hereunder,  the Trustee shall be entitled to
receive  pursuant to Section  4.2(a)(i),  the Trustee Fee. The Trustee  shall be
entitled to receive from the Holder of the Special  Interest  reimbursement  for
expenses and disbursements of such agents, representatives,  experts and counsel
as the Trustee may employ in connection with the exercise and performance of its
rights and duties  hereunder.  The Trustee shall be  responsible  for paying any
separate  compensation owing to the Certificate Paying Agent and the Certificate
Registrar,  which  compensation  shall  be  included  in any  Trustee  Fee.  For
performing  its  services  hereunder,  the  Administrator  shall be  entitled to
receive, pursuant to Section 4.2(a)(iv),  the Administration Fee. For performing
its services  hereunder and under the Security  Agreement,  the Collateral Agent
shall be entitled to receive,  pursuant to Section  4.2(a)(ii),  the  Collateral
Agent Fee. The  Collateral  Agent shall be  responsible  for paying any separate
compensation owing to the Note Paying Agent and the Note Registrar.

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<PAGE>

                                   ARTICLE VII
                                     DEFAULT

        Section 7.1.  Events of Default.

        "Event  of  Default,"  whenever  used  herein,  means  any  one  of  the
following:

        (a)  default in the  payment of the  Interest  Amount on the Notes for a
period of five Business Days after the related Payment Date; or

        (b)  default in payment of the  entire  unpaid  Principal  Amount of the
Notes on or before the Maturity Date.

        Section 7.2.  Rights Upon an Event of Default.

        (a) If an Event of Default shall have occurred and be  continuing,  with
the consent of the Note Insurer the Trustee may, or with the consent of the Note
Insurer the Holders of at least 25% in aggregate outstanding Principal Amount of
the Notes  (subject to rescission  as described  below) may, or the Note Insurer
may, declare by written notice to the Subordinated  Certificateholders  (and the
Trustee,  if  declared  by the  Noteholders  or the Note  Insurer),  the  entire
Principal Amount of the Notes  immediately  due,  together with accrued interest
thereon. The Subordinated  Certificateholders  shall have no right to declare an
Event of Default or to make a declaration of acceleration.

        At any time after such a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee,  if there has been deposited in the Collection
Account,  either  pursuant to  collections on the Trust Property or from amounts
deposited with the Collateral Agent by the Subordinated  Certificateholders,  an
amount  sufficient  to pay:  (i) all sums paid or advanced by the  Trustee,  the
Collateral  Agent,  the Note Insurer and the Note Paying Agent hereunder and the
reasonable  compensation,   expenses  and  disbursements  of  the  Trustee,  the
Collateral Agent, the Note Paying Agent, the Certificate  Paying Agent, the Note
Registrar,  the Certificate Registrar,  the Administrator,  the Note Insurer and
their agents and (ii) the Interest Amount with respect to the next Payment Date,
such declaration and its consequences shall be rescinded and annulled.

        (b) If the Notes have been  declared due  following an Event of Default,
subject to the Security Agreement,  the Trustee shall maintain possession of the
Trust Property (or any portion  thereof) and continue to apply  collections from
the Trust Property as if there had been no declaration  of  acceleration  unless
the Trustee  shall be  directed by the Note  Insurer or, with the consent of the
Note  Insurer,  the Holders of not less 66 2/3% of the  Principal  Amount of the
Notes to liquidate the Trust Property, in which case the Trustee shall liquidate
the Trust  Property by selling all the assets of the Trust at one or more public
or private sales in any manner permitted by law; provided, however, that neither
the Depositors nor any of their affiliates shall be permitted to purchase any or
all of the assets of the Trust.

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        Section 7.3.  Distributions.

        Any money  collected  pursuant to this Article VII, shall be distributed
in the following order:

               (i) first, to the Trustee,  amounts due and owing and required to
        be  distributed  to the Trustee,  the  Certificate  Paying Agent and the
        Certificate Registrar pursuant to this Agreement;

               (ii) second,  to the Collateral  Agent, the amounts due and owing
        and required to be distributed to the Collateral  Agent, the Note Paying
        Agent and the Note Registrar pursuant to this Agreement;

               (iii) third, to the Noteholders,  the Interest Amount;  provided,
        however,  if the remaining money is less than the Interest  Amount,  the
        remaining  money  collected  shall be  distributed  on a pro rata  basis
        according to the Principal  Amount of the respective  Notes held by such
        Noteholders;

               (iv)  fourth,  to  the  Noteholders,   an  amount  equal  to  the
        outstanding  Principal Amount of the Notes,  provided,  however,  if the
        remaining  money is less than the  outstanding  Principal  Amount of the
        Notes,  the  remaining  money shall be  distributed  on a pro rata basis
        according to the Principal  Amount of the respective  Notes held by such
        Noteholders;

               (v)  fifth,  to the  Note  Insurer,  amounts  due and  owing  and
        required  to be  distributed  to  the  Note  Insurer  pursuant  to  this
        Agreement, the Insurance Agreement and the Financial Guaranty Agreement;

                (vi)  sixth,  to the  Administrator,  amounts  due and owing and
        required to be  distributed  to  the  Administrator  pursuant  to   this
        Agreement;

               (vii)  seventh,  to the  Administrator,  an  amount  equal to any
        unreimbursed Optional Advances; and

               (viii)   eighth,   to  the  Trustee  for   distribution   to  the
        Subordinated Certificateholders,  any remaining money according to their
        respective Percentage Interests.

        Section 7.4.  Restrictions on Noteholders' Power.

        No Noteholder will have any right by virtue or by availing itself of any
provisions  of this  Agreement to institute any suit,  action,  or proceeding in
equity or at law upon or under or with respect to this  Agreement or any Related
Document,  unless (a) a Noteholder previously has given to the Trustee a written
notice of default and of the continuance thereof, as provided in this Agreement,
and  has  obtained  the  consent  of  the  Note  Insurer,  and  (b)  Noteholders

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beneficially  owning not less than 66 2/3% of the aggregate  Principal Amount of
the Notes have made written  request upon the Trustee to institute  such action,
suit or  proceeding  in its own  name as  Trustee  under  this  Agreement,  have
obtained  the consent of the Note  Insurer and have  offered to the Trustee such
reasonable  indemnity  as  it  may  require  against  the  costs,  expenses  and
liabilities  to be incurred  therein or thereby,  and the  Trustee,  for 30 days
after its receipt of such notice, request, and offer of indemnity, has neglected
or refused to institute any such action,  suit,  or  proceeding  and during such
30-day period,  no request or waiver  inconsistent with such written request has
been given to the Trustee  pursuant to and in  compliance  with this  Section or
Section 5.2; it being understood and intended, and being expressly covenanted by
each Noteholder with every other Noteholder and the Trustee, that no one or more
Noteholders shall have any right in any manner whatever by virtue or by availing
itself or themselves of any provisions of this Agreement to affect,  disturb, or
prejudice  the  rights of any other  Noteholder,  or to obtain or seek to obtain
priority  over or preference  to any other  Noteholder,  or to enforce any right
under this  Agreement,  except in the manner  provided in this Agreement and for
the equal,  ratable,  and common benefit of all Noteholders.  For the protection
and  enforcement  of the  provisions  of this Section 7.4,  each and every other
Noteholder  and the  Trustee  will be  entitled  to such  relief as can be given
either at law or in equity.

                                  ARTICLE VIII
                            DISSOLUTION OF THE TRUST

        Section 8.1.  Dissolution of the Trust.

        (a) The Trust shall dissolve,  and this Agreement will  terminate,  upon
the later of (i) the Payment Date immediately  following the retirement or other
liquidation  of the last item of Trust Property or (ii) following the payment in
full of the Principal  Amount of and accrued  interest on the Notes,  by vote of
all the Subordinated  Certificateholders,  with the consent of the Note Insurer.
The bankruptcy, liquidation,  dissolution,  termination, resignation, expulsion,
withdrawal, death or incapacity of any Subordinated  Certificateholder shall not
(x) operate to  terminate  this  Agreement  or the Trust,  or (y)  entitle  such
Subordinated  Certificateholder  to claim an accounting or to take any action or
proceeding  in any court for a partition or winding up of all or any part of the
Trust or Trust  Property or (z)  otherwise  affect the rights,  obligations  and
liabilities of the parties hereto.

        (b) Except as provided in Section 8.1(a),  none of the  Depositors,  the
Administrator or any Subordinated  Certificateholder shall be entitled to revoke
or terminate the Trust.

        (c) Upon the completion of winding up and termination of the Trust,  the
Trustee  shall cause the  Certificate  of Trust to be canceled by executing  and
filing a certificate of  cancellation  with the Secretary of State in accordance
with the provisions of Section 3810 of the Business  Trust  Statute.  Thereupon,
this Agreement and the Trust shall terminate.

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<PAGE>

                                   ARTICLE IX
    SUCCESSOR TRUSTEES, PAYING AGENTS AND REGISTRARS AND ADDITIONAL TRUSTEES

        Section 9.1.  Eligibility Requirements for Trustee.

        (a) The Trustee shall at all times be a corporation or  association  (i)
satisfying the provisions of Section 3807(a) of the Business Trust Statute; (ii)
authorized to exercise  corporate trust powers;  (iii) having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
Federal or State authorities;  provided that with respect to the initial Trustee
(but  not  any  successor)  the  combined  capital  and  surplus  of the  parent
organization of such banking  association shall be included in the determination
of the  combined  capital  and  surplus  of such  banking  association  and (iv)
reasonably  acceptable  to the  Note  Insurer.  In case  at any  time  any  such
corporation  or  association  shall cease to be eligible in accordance  with the
provisions of this Section,  it shall resign  immediately in the manner and with
the effect specified in Section 9.2. In addition,  at all times the Trustee or a
co-trustee  shall be a Person that satisfies the  requirement of Section 3807(a)
of the Business Trust Statute and Section 26(a)(1) of the Investment Company Act
of 1940, as amended.

        (b) If the Trustee shall publish reports of condition at least annually,
pursuant to law or to the requirements of a supervising or examining  authority,
then for the purpose of this Section,  the combined  capital and surplus of such
corporation  or  association  shall be deemed  to be its  combined  capital  and
surplus as set forth in its most recent report of condition so published. A copy
of each such report shall be provided by the Trustee to the Note Insurer.

        Section 9.2.  Resignation or Removal of Trustee and Others.

        (a) The Trustee,  Note Paying  Agent,  Certificate  Paying  Agent,  Note
Registrar or Certificate Registrar may at any time resign and be discharged from
the trusts and obligation hereby created by giving written notice thereof to the
Administrator  (with a copy to each Rating Agency and the Note Insurer) at least
30 days before the date specified in such notice.  Upon receiving such notice of
resignation,  the  Administrator  shall promptly appoint a successor meeting (in
the case of a successor  Trustee)  the  applicable  qualifications  set forth in
Section  9.1 and in the case of the Note  Paying  Agent and the Note  Registrar,
acceptable to the Note Insurer, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee, Note Paying Agent,
Certificate Paying Agent, Note Registrar or Certificate Registrar,  and one copy
to the successor  Trustee,  Note Paying Agent,  Certificate  Paying Agent,  Note
Registrar or Certificate Registrar.  If no successor Trustee, Note Paying Agent,
Certificate  Paying Agent,  Note Registrar or Certificate  Registrar  shall have
been so appointed and have accepted  appointment within 30 days after the giving
of such  notice of  resignation,  the  resigning  Trustee,  Note  Paying  Agent,
Certificate  Paying Agent, Note Registrar or Certificate  Registrar may petition
any court of competent  jurisdiction for the appointment of a successor Trustee,
Note Paying Agent,  Certificate  Paying  Agent,  Note  Registrar or  Certificate
Registrar.

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<PAGE>

        (b) The  Administrator  (or the  Note  Insurer  in the  case of the Note
Paying Agent and the Note  Registrar)  may at any time remove the  Trustee,  the
Note Paying  Agent,  the  Certificate  Paying Agent,  the Note  Registrar or the
Certificate  Registrar by giving  written  notice thereof to the Trustee (with a
copy to each  Rating  Agency and the Note  Insurer)  at least 30 days before the
date specified in such notice.  Further,  if at any time the Trustee shall cease
to be eligible in accordance  with the  provisions of Section 9.1 and shall fail
to resign after written request therefor by the  Administrator or if at any time
the Trustee  shall be legally  unable to act,  or shall be adjudged  bankrupt or
insolvent,  or a receiver of the Trustee or of its property  shall be appointed,
or any  public  officer  shall take  charge or control of the  Trustee or of its
property  or  affairs  for  the  purpose  of  rehabilitation,   conservation  or
liquidation,  then the Administrator or the Note Insurer may remove the Trustee.
If the  Administrator  shall  remove the  Trustee,  the Note Paying  Agent,  the
Certificate Paying Agent, the Note Registrar or the Certificate  Registrar under
the authority of Section 9.2(b), the Administrator, with the consent of the Note
Insurer in the case of the Trustee,  Note Paying Agent or Note Registrar,  shall
promptly  appoint a successor  Trustee,  Note Paying Agent,  Certificate  Paying
Agent,  Note  Registrar  or  Certificate  Registrar  meeting  (in the  case of a
successor  Trustee)  the  qualification  requirements  of Section 9.1 by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Trustee, Note Paying Agent, Certificate Paying Agent, Note Registrar or
Certificate  Registrar so removed, and one copy to the successor Trustee (with a
copy to each Rating Agency and the Note Insurer) and upon any such removal,  the
Administrator promptly shall pay all fees and other amounts owed to the outgoing
Trustee,  Note  Paying  Agent,  Certificate  Paying  Agent,  Note  Registrar  or
Certificate Registrar.

        Any   resignation  or  removal  of  the  Trustee,   Note  Paying  Agent,
Certificate   Paying  Agent,   Note  Registrar  or  Certificate   Registrar  and
appointment of a successor Trustee, Note Paying Agent, Certificate Paying Agent,
Note Registrar or Certificate Registrar (consented to by the Note Insurer in the
case of the Trustee, Note Paying Agent or Note Registrar) pursuant to any of the
provisions  of this  Section  shall not become  effective  until  acceptance  of
appointment  by the successor  Trustee,  Note Paying Agent,  Certificate  Paying
Agent, Note Registrar or Certificate  Registrar  pursuant to Section 9.3 and (in
the case of removal  only) payment of all fees and expenses owed to the outgoing
party.

        Section 9.3.  Successor Trustee.

        Any successor Trustee  appointed  pursuant to Section 9.2 shall execute,
acknowledge and deliver to the Administrator  and to its predecessor  Trustee an
instrument  accepting such appointment  under this Agreement,  and thereupon the
resignation  or removal of its  predecessor  Trustee shall become  effective and
such  successor  Trustee,  without any further act,  deed or  conveyance,  shall
become fully vested with all the rights,  powers, duties, and obligations of its
predecessor  Trustee  under this  Agreement,  with like effect as if  originally
named. The predecessor  shall deliver to the successor Trustee all documents and
statements  and  moneys  held by it under  this  Agreement  promptly  upon  such
predecessor's  receipt  of all  fees and  other  amounts  owing  to it;  and the
Administrator  and the  predecessor  Trustee  shall  execute  and  deliver  such
instruments and do such other things as may reasonably be required for fully and
certainly  vesting and  confirming  in the  successor  Trustee all such  rights,
powers, duties, and obligations.

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<PAGE>

        No  successor  Trustee  shall  accept  appointment  as  provided in this
Section unless at the time of such  acceptance  such successor  Trustee shall be
eligible pursuant to Section 9.1.

        Upon acceptance of appointment by a successor  Trustee  pursuant to this
Section 9.3, the  Administrator  shall mail notice  thereof to all  Noteholders,
Subordinated  Certificateholders,  the Note Insurer and the Rating Agencies.  If
the Administrator shall fail to mail such notice within 10 days after acceptance
of appointment by a successor  Trustee,  the successor  Trustee shall cause such
notice to be mailed at the expense of the Administrator.

        Upon the appointment and acceptance of a successor  Trustee  pursuant to
this  Section  9.3,  such  successor  Trustee  shall  file an  amendment  to the
Certificate  of Trust with the Delaware  Secretary of State  pursuant to Section
3810 of the Business Trust Statute  reflecting  the name and principal  place of
business of such successor Trustee in the State of Delaware.

        Section 9.4.  Merger or Consolidation.

        Any  corporation  or  association  into which the  Trustee,  Note Paying
Agent,  Certificate Paying Agent, Note Registrar or Certificate Registrar may be
merged or converted or with which it may be consolidated,  or any corporation or
association  resulting from any merger,  conversion or consolidation to which it
shall  be a  party,  or any  corporation  or  association  succeeding  to all or
substantially  all  its  corporate  trust  business,   shall  be  the  successor
hereunder;  provided such corporation or association  shall be eligible pursuant
to Section 9.1 (in the case of the Trustee) and  acceptable  to the Note Insurer
(in the case of the Note  Paying  Agent  and the Note  Registrar),  without  the
execution or filing of any  instrument  or any further act on the part of any of
the parties hereto,  anything herein to the contrary  notwithstanding;  provided
further  that the Trustee  shall mail notice of any merger or  consolidation  or
conversion  affecting it to the Rating Agencies and the Note Insurer at least 30
days prior to the effective date of such merger, consolidation or conversion.

        Section 9.5.  Appointment of Co-Trustee or Separate Trustee.

        Notwithstanding any other provision of this Agreement,  at any time, for
the purpose of meeting any legal  requirements of any  jurisdiction in which any
part of the Trust  Property may at the time be located,  the Trustee  shall have
the power and  authority and is hereby  authorized  and empowered to execute and
deliver all  instruments to appoint one or more Persons  approved by the Trustee
and the  Administrator  to act as  co-trustee,  jointly  with  the  Trustee,  or
separate trustee or separate trustees, of all or any part of the Trust Property,
and to vest in such Person,  in such capacity,  such title to the Trust,  or any
part thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations,  rights and trusts as the Trustee may consider necessary or
desirable.  No co-trustee  or separate  trustee  under this  Agreement  shall be
required to meet the terms of  eligibility  as a successor  trustee  pursuant to
Section  9.1 and no notice of the  appointment  of any  co-trustee  or  separate
trustee  shall be required  pursuant to Section 9.1,  except that notice of such
appointment shall be given to the Rating Agencies and the Note Insurer.

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<PAGE>

        Each separate  trustee and co-trustee  shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

               (i) all rights,  powers,  duties,  and  obligations  conferred or
        imposed  upon the  Trustee  shall be  conferred  upon and  exercised  or
        performed by the Trustee and such separate trustee or co-trustee jointly
        (it being  understood  that such  separate  trustee or co-trustee is not
        authorized to act separately  without the Trustee  joining in such act),
        except to the extent that under any 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 rights,  powers,  duties, and obligations (including the holding of
        title  to  the  Trust  Property  or any  portion  thereof  in  any  such
        jurisdiction)  shall be exercised and performed  singly by such separate
        trustee or co-trustee, but solely at the direction of the Trustee;

               (ii) no trustee under this Agreement  shall be personally  liable
        by  reason  of any act or  omission  of any  other  trustee  under  this
        Agreement; and

               (iii)  the  Trustee  may at any time  accept the  resignation  of
        or remove any separate trustee or co-trustee.

        Any  notice,  request or other  writing  given to the  Trustee  shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as  effectively  as if given to each of them.  Every  instrument  appointing any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article.  Each separate  trustee and co-trustee,  upon its acceptance of
the trusts conferred,  shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be  provided  therein,  subject  to all the  provisions  of this  Agreement,
specifically including every provision of this Agreement relating to the conduct
of,  affecting the liability of, or affording  protection to, the Trustee.  Each
such instrument  shall be filed with the Trustee and a copy thereof given to the
Administrator.

        Any separate  trustee or co-trustee may at any time appoint the Trustee,
its agent or attorney-in-fact  with full power and authority,  to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name.  If any separate  trustee or  co-trustee  shall die,
dissolve,  become  incapable of acting,  resign or be removed,  all its estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Trustee,  to the extent  permitted by law,  without the  appointment of a new or
successor trustee.

                                       74
<PAGE>

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

        Section 10.1. Amendment.

        (a) This Agreement may be amended by the Depositors, the Trustee and the
Collateral  Agent,  with prior  written  notice to the Rating  Agencies  and the
consent of the Note Insurer,  without the consent of any of the  Noteholders  or
the Subordinated Certificateholders (i) to cure any ambiguity or defect, (ii) to
correct,  supplement or modify any provisions in this Agreement or (iii) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the  provisions in this Agreement or of modifying in any manner the rights of
the Noteholders or the Subordinated  Certificateholders;  provided,  however, in
each case,  that such action  shall not, as  evidenced by an opinion of counsel,
adversely  affect in any material  respect the  interests of any  Noteholder  or
Subordinated Certificateholder.

        (b)  This  Agreement  may  also  be  amended  from  time  to time by the
Depositors,  the Trustee and the Collateral  Agent, with the consent of the Note
Insurer  and the Holders of a majority of the  aggregate  outstanding  Principal
Amount of the Notes  (which  consent of any Holder of a Note given  pursuant  to
this  Section or  pursuant to any other  provision  of this  Agreement  shall be
conclusive and binding on such Holder and on all future Holders of such Note and
of any Note issued upon the transfer thereof or in exchange therefore or in lieu
thereof  whether or not  notation of such  consent is made upon the Note) and to
the extent that the Subordinated  Certificates are affected thereby, the consent
of the  Holders  of a  majority  of  Percentage  Interests  of the  Subordinated
Certificates,  for the  purpose of adding any  provisions  to or changing in any
manner or eliminating any of the provisions of this  Agreement,  or of modifying
in any  manner  the  rights  of the  Holders  of  Notes  or the  Holders  of the
Subordinated Certificates;  provided,  however, that no such amendment shall (a)
increase  or reduce in any  manner the  amount  of, or  accelerate  or delay the
timing  of,  payments  that  shall  be  required  to be made on any  Note or the
Interest  Rate or (b) change  the Event of Default  relating  to  nonpayment  of
interest or (c) reduce the aforesaid  percentage required to consent to any such
amendment or any waiver hereunder, without the consent of the Holders of all the
Notes then outstanding.

        (c)  Prior  to the  execution  of any such  amendment  or  consent,  the
Subordinated  Certificateholders  shall  furnish  written  notification  of  the
substance of such amendment or consent to each Rating Agency.

        (d) Promptly after the execution of any such  amendment or consent,  the
Trustee shall furnish written notification of the substance of such amendment or
consent to the Note Registrar for  distribution to each  Noteholder  unless such
parties have previously received such notification.

        (e) It shall  not be  necessary  for the  consent  pursuant  to  Section
10.1(b) to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.  The
manner of obtaining such consents (and any other  consents  provided for in this
Agreement) and of evidencing the authorization of the execution thereof shall be
subject to such reasonable requirements as the Trustee may prescribe,  including
the establishment of record dates.

                                       75
<PAGE>

        (f) Prior to the  execution  of any  amendment  to this  Agreement,  the
Trustee,  Note  Registrar,  Collateral  Agent  and Note  Paying  Agent  shall be
entitled to receive and rely upon an opinion of counsel, not at its own expense,
stating that the execution of such  amendment is authorized or permitted by this
Agreement  and that all  conditions  precedent to the  execution and delivery of
such amendment have been  satisfied.  The Trustee,  Note  Registrar,  Collateral
Agent and Note Paying Agent may,  but shall not be obligated  to, enter into any
such amendment which affects their own rights,  duties or immunities  under this
Agreement or otherwise.

        Section 10.2. No Recourse.

        Each  Noteholder  by  accepting  a  Note  acknowledges  that  its  Notes
represent  obligations  of the Trust only and do not  represent  interests in or
obligations of the Depositors,  the Administrator,  the Trustee,  the Collateral
Agent, the Note Paying Agent, the Certificate  Paying Agent, the Note Registrar,
the Certificate Registrar,  the Subordinated  Certificateholders,  the Holder of
the Special Interest, the Note Insurer or any affiliate of any of the foregoing.
No recourse may be had against such  parties or their  assets,  except as may be
expressly set forth or contemplated in this Agreement,  the Notes or the Related
Documents.

        Section 10.3. Governing Law.

        THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE  WITHOUT  REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF AND THE OBLIGATIONS,  RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

        Section 10.4. Severability of Provisions.

        If any one or more of the covenants, agreements,  provisions or terms of
this  Agreement  shall be for any  reason  whatsoever  held  invalid,  then such
covenants,  agreements,  provisions or terms shall be deemed  severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or  enforceability of the other provisions of this
Agreement or of the Notes or the Subordinated  Certificates or the rights of the
Holders thereof.

        Section 10.5. Third-Party Beneficiaries.

        This  Agreement  shall inure to the  benefit of and be binding  upon the
parties  hereto,  the  Noteholders,   the  Note  Insurer  and  the  Subordinated
Certificateholders  and their respective  successors and permitted assigns.  The
Noteholders,   the  Note  Insurer,  and  Indemnified  Parties  are  third  party
beneficiaries  under  this  Agreement.  The  Trustee  shall have only the duties
expressly set forth herein with respect to the  Noteholders  and the Noteholders
shall  have the right to  enforce  the  obligations  of the  Trustee to the same
extent  as if they were  beneficial  owners of the  Trust.  Except as  otherwise
provided in this  Agreement,  no other Person shall have any right or obligation
hereunder.  Nothing  contained herein shall be construed to create any fiduciary
obligation of the Trustee to the Note Insurer.

                                       76
<PAGE>

        The Subordinated Certificateholders,  Noteholders, and Beneficial Owners
acknowledge  and agree that the Trustee has only the duties  expressly set forth
herein to the Noteholders under this Agreement and waive any potential or actual
conflict  of  interest  that may arise as a result  thereof.  In  addition,  the
Subordinated  Certificateholders  acknowledge  and agree that their rights under
this Agreement are  subordinate to the rights of the  Noteholders to enforce the
Trustee's  duties to the  Noteholders  expressly  set forth herein to the extent
inconsistent  with the Trustee's duties to the  Subordinated  Certificateholders
expressly  set forth  herein,  and agree that in no event  shall the  Trustee be
liable to the Subordinated Certificateholders as a result of the foregoing.

        Section 10.6. Counterparts.

        For the purpose of  facilitating  its execution and for other  purposes,
this  Agreement may be executed  simultaneously  in any number of  counterparts,
each of which counterparts  shall be deemed to be an original,  and all of which
counterparts shall constitute but one and the same instrument.

        Section 10.7. Notices.

        All demands, notices and communications under this Agreement shall be in
writing, delivered by telecopy (with hard copy to follow by recognized overnight
courier),  or by recognized overnight courier or mailed by certified mail-return
receipt requested,  and shall be deemed to have been duly given upon receipt (a)
in the case of the Administrator,  at the following address:  NELnet,  Inc., 121
South 13th Street,  Suite 301,  Lincoln,  Nebraska  68508,  Attention:  Terry J.
Heimes,  telecopy:  (402) 458-2399, (b) in the case of the NELNET Depositor,  at
the  following  address:  121 South 13th Street,  Suite 301,  Lincoln,  Nebraska
68508, Attention:  Terry J. Heimes, telecopy: (402) 458-2399, (c) in the case of
the MELMAC Depositor,  at the following  address:  One City Center,  Suite 1180,
Portland,  Maine 04101,  Attention:  Tim Sabo, telecopy:  (207) 773-4159, with a
copy to: 121 South 13th Street,  Suite 301, Lincoln,  NE 68508,  Attention:  Don
Bouc, (d) in the case of the Trustee or the Collateral  Agent, at its respective
Corporate  Trust Office,  Trustee  telecopy:  (302) 651-8882,  Collateral  Agent
telecopy: (212) 946-3916, (e) in the case of Standard & Poor's Rating Service, a
division of The McGraw-Hill  Companies,  Inc., 55 Water Street,  40th Floor, New
York, New York 10004,  Attention:  Asset Backed  Surveillance,  telecopy:  (212)
438-2664,  (f) in the case of Fitch, Inc., One State Street Plaza, New York, New
York 10004, Attention:  Asset Backed Securities  Surveillance,  telecopy:  (212)
480-4438,  and (g) in the case of the Note Insurer, 113 King Street, Armonk, New
York 10504, Attention: IPM-PF ($57,500,000 THE NELNET GROUP TRUST I Student Loan
Interest  Margin  Securities) or at such other address as shall be designated by
any such party in a written  notice to the other  parties.  Notwithstanding  the
foregoing,  any notice  required or  permitted to be mailed to a Holder shall be
given by first class  mail,  postage  prepaid,  at the address of such Holder as
shown in the Note Register or Certificate  Register, as the case may be, and any
notice  so  mailed  within  the  time  prescribed  in this  Agreement  shall  be
conclusively  presumed  to have  been  duly  given,  whether  or not the  Holder
receives such notice.

                                       77
<PAGE>

        Section 10.8. Successors and Assigns.

        All covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, the  Administrator,  the Depositors,  the Holder of the
Special Interest,  the Trustee, the Collateral Agent, the Note Paying Agent, the
Certificate  Paying Agent, the Note Registrar,  the Certificate  Registrar,  and
their  respective  successors,  each  Subordinated   Certificateholder  and  its
successors and permitted assigns, all as herein provided.  Any request,  notice,
direction,  consent,  waiver or other  instrument or action by a Noteholder or a
Subordinated  Certificateholder  shall bind the  successors  and assigns of such
Noteholder or Subordinated Certificateholder.

        Section 10.9. No Petition.

        The Trustee (in its  individual  capacity and as  Trustee),  by entering
into this Agreement, each Subordinated  Certificateholder,  by accepting a Trust
Certificate,  and each  Noteholder by accepting the benefits of this  Agreement,
hereby covenants and agrees that they will not at any time institute against the
Depositors or the Trust,  or join in any  institution  against the Depositors or
the  Trust  of,  any  bankruptcy,  reorganization,  arrangement,  insolvency  or
liquidation proceedings, or other proceedings under any United States Federal or
state  bankruptcy or similar law in connection with any obligations  relating to
the Subordinated  Certificates,  the Notes, this Agreement or any of the Related
Documents.

        Section 10.10.Headings.

        The  headings  of the  various  Articles  and  Sections  herein  are for
convenience  of reference only and shall not define or limit any of the terms or
provisions hereof.

        Section 10.11.Administrator.

        In carrying out its duties  hereunder,  the  Administrator  is acting on
behalf of the Trust.  The  Administrator is authorized and empowered to execute,
prepare,  file  and/or  deliver  in the name and on behalf of the Trust all such
documents, reports, filings, tax returns, instruments, certificates and opinions
as it shall be the duty of the Trust to prepare, file or deliver pursuant to the
Related  Documents.  Upon written request of the  Administrator,  the Trustee on
behalf of the Trust shall  execute and deliver to the  Administrator  a power of
attorney appointing the Administrator the Trust's agent and  attorney-in-fact to
execute,  prepare,  file and deliver all such documents,  reports,  filings, tax
returns, instruments, certificates and opinions.

        Section 10.12.Furnishing Information.

        For so  long  as  any of the  Notes  or  Subordinated  Certificates  are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
of the  Securities  Act of 1933,  as amended  (the  "Securities  Act"),  (1) the
Administrator  will  provide or cause to be provided to any Holder of such Notes
or Subordinated Certificates and any prospective purchaser thereof designated by
such a Holder,  upon the request of such Holder or  prospective  purchaser,  the

                                       78
<PAGE>

information  required to be provided to such Holder or prospective  purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Administrator shall update
such  information  from time to time in order to prevent such  information  from
becoming  false and misleading and will take such other actions as are necessary
to ensure that the safe harbor exemption from the  registration  requirements of
the  Securities Act under Rule 144A is and will be available for resales of such
Notes or Subordinated Certificates conducted in accordance with Rule 144A.

        Section 10.13.Amendments  to  Underlying  Agreements;  Underlying Trusts
Not to Issue Additional Securities.

        For so long as any of the Notes are outstanding, the Administrator shall
provide the Rating  Agencies,  the Note Insurer,  the Trustee and the Collateral
Agent with prior written  notice (A) of any proposed  amendment to or supplement
of (i) an Indenture,  (ii) any other  Underlying  Agreement,  or (iii) any other
contract or agreement to which a Depositor is a party or which was assigned to a
Depositor  relating to the servicing of student loans included in the Underlying
Trusts or (B) if the Administrator,  on behalf of the Trust,  wishes to exercise
an  optional  redemption  for some or all of the bonds  issued  under the MELMAC
Indenture (the "Underlying MELMAC Bonds"),  or the notes issued under the NELNET
Indenture (the "Underlying  NELNET Bonds").  Neither Depositor (or, with respect
to the Indentures and the other Underlying  Agreements,  the  Administrator,  on
behalf of the Trust)  shall  consent to any such  amendment  or  supplement,  or
exercise an optional  redemption for some or all of the Underlying Bonds, unless
the Note Insurer  provides its written  consent (and, in the case of an optional
redemption  of  the  Underlying  Bonds,  the  holders  of all  the  Subordinated
Certificates,  other  than the Holder of the  Special  Interest,  provide  their
written consent) and S&P indicates that such amendment, supplement or redemption
would not cause it to lower or withdraw  the rating  then  assigned by it to the
Notes (without  giving effect to the Note Insurance  Policy).  Further,  neither
Depositor  may enter into or consent to any  amendment of or  supplement  to the
Indentures on the other Underlying  Agreements  without the consent of the Trust
(which consent may be given by the Administrator on behalf of the Trust).  Prior
to entering into such amendment or supplement,  or prior to optionally redeeming
the Underlying Bonds, the  Administrator  shall provide the Trustee and the Note
Insurer  with a  certificate,  signed  by  its  president  or a vice  president,
attesting that such action has occurred. In no event, however, shall a Depositor
(or, with respect to the Indentures  and the other  Underlying  Agreements,  the
Administrator  on  behalf  of the  Trust)  consent  to  any  such  amendment  or
supplement that would result in additional servicing or other compensation being
paid, or student loans being acquired for premiums greater than permitted, under
the agreements  listed in (i) through (iv) above as in effect on the date hereof
if, as of the  Payment  Date  immediately  prior to the  effective  date of such
amendment or supplement,  the Recalculated  Targeted Amount of the Notes exceeds
the Targeted Balance for such Payment Date.  Notwithstanding the foregoing,  the
provisions of this Section 10.13 shall not apply to (i) any mandatory redemption
of Underlying Bonds or (ii) any redemption of Underlying Bonds resulting from an
Underlying  Trust's  inability  to  acquire  Eligible  Loans (as  defined in the
Indentures) during the applicable acquisition and recycling periods.

                                       79
<PAGE>

        Until the Principal Amount of the Notes has been reduced to zero and the
Noteholders  have  received  all amounts to which they are  entitled  under this
Trust Agreement,  neither Depositor will permit the respective  Underlying Trust
to issue any additional notes, bonds or other securities or change the mode used
to calculate  interest on the Underlying Bonds (I.E.,  from an auction rate to a
fixed rate or a variable rate).

        Section 10.14.The Note Insurer.

        Any right  conferred  to the Note Insurer  hereunder  shall be suspended
during  any  period in which  the Note  Insurer  is in  default  in its  payment
obligations  under the Debt Service  Reserve  Surety Bond or the Note  Insurance
Policy. At such time as the Notes are no longer  outstanding  hereunder,  and no
amounts owed to the Note Insurer  hereunder,  under the Insurance  Agreement and
under the Financial  Guaranty Agreement remain unpaid, the Note Insurer's rights
hereunder shall terminate.

        Section 10.15.Security Agreement.

        Each  Noteholder  by  becoming  an owner of a Note (and each  Beneficial
Owner) and each Subordinated  Certificateholder  acknowledges that the Trust has
pledged  to the Note  Insurer a security  interest  in the  Underlying  Residual
Rights and the other  Trust  Property  and that,  unless the Note  Insurer is in
default in its payment obligations under the Debt Service Reserve Surety Bond or
the Note Insurance Policy,  upon the occurrence of a Pledgor Default (as defined
in the Security  Agreement)  the Note Insurer may exercise  certain  rights with
respect to the Underlying Residual Rights and the other Trust Property.

                                       80
<PAGE>

        IN WITNESS  WHEREOF,  the Depositors,  the  Administrator,  the Trustee,
Certificate  Registrar and  Certificate  Paying Agent and the Collateral  Agent,
Note Registrar and Note Paying Agent have caused this Trust Agreement to be duly
executed  by  their  respective  officers  as of the day and  year  first  above
written.

                              NELNET STUDENT LOAN CORPORATION-1, as Depositor

                              By:
                              -------------------------------------------
                              Name: Ronald W. Page
                              Title: Vice President

                              MELMAC LLC, as Depositor

                              By:
                              -------------------------------------------
                              Name:   Don Bouc
                              Title: President

                              NELNET, INC., as Administrator and Holder of the
                              Special Interest

                              By:
                              -------------------------------------------
                              Name: Terry J. Heimes
                              Title: Vice President

                              WILMINGTON TRUST COMPANY, as Trustee,  Certificate
                              Registrar and Certificate Paying Agent

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

                              THE  CHASE   MANHATTAN  BANK, as Collateral Agent,
                              Note Registrar and Note Paying Agent

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

                                       81
<PAGE>

                                                                      SCHEDULE I

                            TARGETED BALANCE SCHEDULE

                                     TARGETED PRINCIPAL       TARGETED PRINCIPAL
          PAYMENT DATE                  PAYMENT*                    BALANCE
          ------------                 ---------                   -------
        January 2002                        $3,394,000           $54,106,000
           July 2002                         2,030,000            52,076,000
        January 2003                         1,332,000            50,744,000
           July 2003                         2,919,000            47,825,000
        January 2004                         3,306,000            44,519,000
           July 2004                           444,000            44,075,000
        January 2005                         3,300,000            40,775,000
           July 2005                           821,000            39,954,000
        January 2006                         4,061,000            35,893,000
           July 2006                         1,560,000            34,333,000
        January 2007                         5,046,000            29,287,000
           July 2007                           732,000            28,555,000
        January 2008                         1,675,000            26,880,000
           July 2008                         1,800,000            25,080,000
        January 2009                         3,565,000            21,515,000
           July 2009                         2,470,000            19,045,000
        January 2010                         3,398,000            15,647,000
           July 2010                         2,068,000            13,579,000
        January 2011                         1,726,000            11,853,000
           July 2011                         1,389,000            10,464,000
        January 2012                         1,318,000             9,146,000
           July 2012                         1,095,000             8,051,000
        January 2013                         1,231,000             6,820,000
           July 2013                           748,000             6,072,000
        January 2014                         1,022,000             5,050,000
           July 2014                           782,000             4,268,000
        January 2015                           672,000             3,596,000
           July 2015                           572,000             3,024,000
        January 2016                           397,000             2,627,000
           July 2016                           687,000             1,940,000
        January 2017                           515,000             1,425,000
           July 2017                           505,000               920,000
        January 2018                           495,000               425,000
           July 2018                           425,000                     0

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

*If for any  Payment  Date the  Targeted  Principal  Payment  exceeds the actual
Principal  Payment  Amount,  the  amount  of such  excess  will be  added to the
Targeted Principal Payment for the next Payment Date.

                                      I-1
<PAGE>

                                                                     SCHEDULE II

                          LIST OF UNDERLYING AGREEMENTS

UNDERLYING MELMAC TRUST

Amended  and  Restated  Indenture  of Trust  dated as of  January 1, 1999 by and
between MELMAC LLC (as assignee of Maine Educational Loan Marketing Corporation)
and Peoples Heritage Bank, as Trustee.

First Supplemental Indenture dated as of November 1, 1999 between MELMAC LLC (as
assignee of Maine  Educational Loan Marketing  Corporation) and Peoples Heritage
Bank, as Trustee.

Second  Supplemental  Indenture dated as of December 16, 1999 between MELMAC LLC
(as  assignee  of Maine  Educational  Loan  Marketing  Corporation)  and Peoples
Heritage Bank, as Trustee.

Third  Supplemental  Indenture  dated as of June 30, 2000 between MELMAC LLC (as
assignee of Maine  Educational Loan Marketing  Corporation) and Peoples Heritage
Bank, N.A., as Trustee.

Form of Fourth  Supplemental  Indenture  to be dated as of April 1, 2001 between
MELMAC LLC and Peoples Heritage Bank, N.A., as Trustee.

UNDERLYING NELNET TRUST

Second  Amended and Restated  Indenture of Trust dated as of November 1, 1996 by
and between NELNET Student Loan Corporation-1 (formerly known as Union Financial
Services-1, Inc.) and Zions First National Bank, as successor Trustee.

Series 1996C Supplemental Indenture of Trust.

First Supplement to Second Amended and Restated Indenture of Trust.

Series 1997A Supplemental Indenture of Trust.

Second Supplement to Second Amended and Restated Indenture of Trust.

Third Supplement to Second Amended and Restated Indenture of Trust.

Series 1998 Supplemental Indenture of Trust.

Series 1999 Supplemental Indenture of Trust.

                                      II-1
<PAGE>

                                                                      EXHIBIT A

                         [FORM OF CERTIFICATE OF TRUST]
                             CERTIFICATE OF TRUST OF
                            THE NELNET GROUP TRUST I

        This  Certificate  of Trust of The NELnet  Group  Trust I (the  "Trust")
dated as of April 3, 2001, is being duly executed and filed by Wilmington  Trust
Company,  a Delaware trust company  headquartered  in Wilmington,  Delaware,  as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
Code, ss. 3801 et seq.) (the "Act").

        1. Name.  The name of the  business  trust  formed  hereby is The NELnet
Group Trust I.

        2. Delaware Trustee. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001,  Attention: Corporate
Trust Administration.

        3.  Effective  Date.  This  Certificate of Trust shall be effective upon
filing.

        IN  WITNESS  WHEREOF,  the  undersigned,  being the sole  trustee of the
Trust, has executed this Certificate of Trust as of the date first above written
in accordance with Section 3811(a) of the Act.

                                        WILMINGTON TRUST COMPANY, not in its
                                        individual  capacity  but  solely as
                                        Trustee of the Trust.

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

                                       A-1
<PAGE>

                                                                       EXHIBIT B

                                 [FORM OF NOTE]

        UNLESS THIS NOTE IS PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY,  A NEW YORK CORPORATION  ("DTC"),  TO THE TRUST 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.

        NEITHER  THIS NOTE NOR THE  UNDERLYING  RESIDUAL  RIGHTS ARE  INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

        THE PRINCIPAL OF THIS NOTE IS PAYABLE IN  INSTALLMENTS.  THEREFORE,  THE
ACTUAL OUTSTANDING  PRINCIPAL AMOUNT OF THIS NOTE MAY, ON ANY DATE SUBSEQUENT TO
THE FIRST PAYMENT DATE, BE LESS THAN ITS INITIAL PRINCIPAL AMOUNT.

        THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE  SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR 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 (1)
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, (2) IN CERTIFICATED  FORM TO AN INSTITUTIONAL  "ACCREDITED  INVESTOR"
(WITHIN  THE  MEANING OF RULE  501(a)(1)-(3)  OR (7) UNDER THE  SECURITIES  ACT)
PURCHASING  FOR  INVESTMENT  AND  NOT  FOR  DISTRIBUTION  IN  VIOLATION  OF  THE
SECURITIES  ACT,  SUBJECT TO (A) THE RECEIPT BY THE NOTE  REGISTRAR  OF A LETTER
SUBSTANTIALLY IN THE FORM PROVIDED IN THE TRUST AGREEMENT AND (B) THE RECEIPT BY
THE NOTE REGISTRAR OF SUCH OTHER EVIDENCE  ACCEPTABLE TO THE NOTE REGISTRAR THAT
SUCH REOFFER,  RESALE,  PLEDGE OR TRANSFER IS IN COMPLIANCE  WITH THE SECURITIES

                                       B-1
<PAGE>

ACT AND OTHER  APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES  LAWS OF THE UNITED  STATES AND  SECURITIES  AND BLUE SKY LAWS OF ANY
STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE  JURISDICTION,  (3) PURSUANT
TO ANOTHER  EXEMPTION  AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH
ANY APPLICABLE STATE  SECURITIES  LAWS, OR (4) PURSUANT TO A VALID  REGISTRATION
STATEMENT.

THIS NOTE MAY NOT BE  ACQUIRED,  DIRECTLY OR  INDIRECTLY,  FOR OR ON BEHALF OF A
PERSON  WHO IS NOT A UNITED  STATES  PERSON (AS  DEFINED IN SECTION  7701 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED).

                                       B-2

<PAGE>

                            THE NELNET GROUP TRUST I
                      STUDENT LOAN INTEREST MARGIN SECURITY

                 (This Note does not represent an obligation of NELnet, Inc.
                                  or any of its affiliates)
CUSIP No. _____________ [144A]
CUSIP No. _____________ [Accredited Investors]
Interest Accrual Date: ___________, 2001
Registered Holder: [Cede & Co.] [Accredited Investor]
Initial Principal Amount of this Note: [$ ____________]
Aggregate Principal Amount of Notes: $___________
Interest Rate: ___%
First Payment Date:  January 3, 2002
Maturity Date: July 2, 2020

                                       B-3
<PAGE>

                          CERTIFICATE OF AUTHENTICATION

        This  is  one of the  6.34%  Student  Loan  Interest  Margin  Securities
referred to in the within-mentioned Trust Agreement.

Date of Authentication:  April 3, 2001

                                    THE CHASE MANHATTAN BANK,
                                    as Note Registrar

                                    By:
                                        -------------------------------
                                         Authorized Officer

        THE NELNET  GROUP TRUST I (the  "Trust")  hereby  promises to pay to the
Registered Holder named above, or registered  assigns,  from the Trust Property,
the  Initial  Principal  Amount  specified  above  and  interest  on the  unpaid
Principal  Amount of this Note at the Interest Rate  specified  above until this
Note shall have been paid in full.

        The Trust was created pursuant to a Trust Agreement dated as of April 1,
2001 (the "Trust Agreement"),  among MELMAC LLC, as a depositor,  NELNET Student
Loan  Corporation-1,  as a depositor  (the "NELNET  Depositor" and together with
MELMAC  LLC,  the   "Depositors"),   NELnet,   Inc.,   as   administrator   (the
"Administrator"),  Wilmington Trust Company, as Trustee (the "Trustee"), and the
Chase  Manhattan Bank, as Collateral  Agent,  Note Registrar and Paying Agent, a
summary of certain of the pertinent  provisions of which is set forth below.  To
the extent not otherwise defined herein,  the capitalized terms used herein have
the meanings assigned to them in the Trust Agreement.

        This Note is one of the duly  authorized  notes  issued  pursuant to the
Trust Agreement and designated as 6.34% Student Loan Interest Margin  Securities
(the  "Notes").  The  Trust  is  also  issuing  Subordinated  Certificates  (the
"Subordinated  Certificates").  This Note is issued  under and is subject to the
terms,  provisions and conditions of the Trust  Agreement  which is incorporated
herein  by  reference  and to which  the  holder  of this  Note by virtue of the
acceptance  hereof  assents  and by which such  holder is bound.  Payments  with
respect to the Notes are made solely from the assets of the Trust, which include
(as more fully described in the Trust  Agreement):  (i) the right to receive the
residual  cash-flow  (the  "Underlying  Residual  Rights") from two master trust
estates established under two underlying Indentures, (ii) the NELNET Depositor's
right to  receive  certain  maintenance  and  operating  expenses  and (iii) the
Collection Account,  Reserve Account and Distribution  Account established under
the Trust Agreement  (collectively,  the "Trust  Property").  The Notes also are
entitled  to the  benefits  of a Debt  Service  Reserve  Surety  Bond  and  Note
Insurance Policy issued by MBIA Insurance Corporation (the "Note Insurer").

        Under the Trust  Agreement,  there  will be paid  semi-annually,  on the
second  Business Day of each  January and July,  commencing  January,  2002 (the
"Payment  Date"),  to the  person in whose name this Note is  registered  at the
close of business on the second day immediately preceding such Payment Date (the

                                       B-4
<PAGE>

"Record  Date"),  interest  on this Note at the  Interest  Rate set forth  above
(calculated  on the basis of a 360-day  year of twelve  30-day  months)  and the
Principal  Payment  Amount and the  Special  Principal  Payment,  if any, to the
extent of the funds available therefor.

        As described  above,  the entire  unpaid  Principal  Amount of this Note
shall be due and  payable  on or  before  the  Maturity  Date  specified  above.
Notwithstanding  the foregoing,  the entire unpaid Principal Amount of the Notes
shall be due and  payable  on the date on which an Event of  Default  shall have
occurred and be continuing and the Trustee or the Holders owning at least 25% in
aggregate Principal Amount of the Notes with the consent of the Note Insurer, or
the Note Insurer,  have declared the Notes to be  immediately  due in the manner
provided in the Trust Agreement;  provided the Trustee shall maintain possession
of the Trust  Property and continue to apply  collections  therefrom as if there
had been no declaration of acceleration  unless the Trustee shall be directed by
the Holders of not less than 66% of the  Principal  Amount of the Notes with the
consent  of the Note  Insurer,  or the Note  Insurer,  to  liquidate  the  Trust
Property.  All payments with respect to the principal of the Notes shall be made
pro rata to the Holders of the Notes.

        It is the intent and  agreement of the  Subordinated  Certificateholders
and the Noteholders that, for purposes of federal income, state and local income
and franchise  and any other income taxes,  the Notes will be treated as debt of
the Trust.  Each  Noteholder,  by acceptance of a Note,  covenants and agrees to
treat,  and to take no action  inconsistent  with the treatment of, the Notes as
debt for such tax purposes.

        Payments on this Note will be made by the Note Paying  Agent by check or
money order mailed to the Noteholder of record in the Note Register  without the
presentation or surrender of this Note or the making of any notation hereon,  or
by  wire  transfer,  in  immediately  available  funds,  to the  account  of the
Noteholder at a bank or other entity having appropriate  facilities therefor, if
the Noteholder shall have provided to the Note Paying Agent appropriate  written
instructions   at  least  five   Business   Days   prior  to  a  Payment   Date.
Notwithstanding the above, the final payment on this Note will be made after due
notice by the Note Paying  Agent of the  pendency of such  payment and only upon
presentation  and surrender of this Note at the office or agency  maintained for
that purpose by the Note Paying Agent.

        The Notes do not  represent  an  obligation  of, or an interest  in, the
Depositors,  the  Administrator,  the Trustee,  the Collateral  Agent,  the Note
Paying Agent, the Note Registrar, the Subordinated Certificateholders,  the Note
Insurer  or any  affiliate  of any of them.  The Notes are  limited  in right of
payment to certain collections and recoveries respecting the Trust Property, all
as more specifically set forth in the Trust Agreement.  None of the Trustee, the
Collateral Agent, the Note Paying Agent, the Note Registrar, the Depositors, the
Administrator,  the Note Insurer or the Subordinated  Certificateholders  or any
affiliate  of any of them  shall  incur any  personal  liability  in  connection
herewith  except  as  provided  in the  Trust  Agreement.  A copy  of the  Trust
Agreement  may,  upon  request,  be examined  by any  Noteholder  during  normal
business  hours at the  principal  office of the  Trustee and of the Note Paying
Agent and at such other places, if any, designated by the Depositors.  The Trust
Agreement  permits,  with certain  exceptions  therein  provided,  the amendment

                                       B-5
<PAGE>

thereof  and the  modification  of the rights  and  obligations  of the  parties
thereto under the Trust Agreement at any time by the Depositors, the Trustee and
the  Collateral  Agent),  with the consent of the Note Insurer,  but without the
consent  of  the  Noteholders.  In  certain  limited  circumstances,  the  Trust
Agreement may only be amended by the Depositors,  the Trustee and the Collateral
Agent,  with the consent of the Note  Insurer and the Holders of not less than a
majority  of the  aggregate  outstanding  Principal  Amount of the Notes and, in
certain  circumstances,  all the Notes.  Any such  consent by the holder of this
Note shall be conclusive and binding on such Holder and on all future holders of
this Note and of any Note issued upon the transfer  hereof or in exchange hereof
or in lieu  hereof  whether or not  notation  of such  consent is made upon this
Notes.

        As provided in the Trust  Agreement  and subject to certain  limitations
set forth therein, the transfer of this Note is registrable in the Note Register
upon surrender of this Note for registration of transfer at the office or agency
of the Note Registrar,  accompanied by a written  instrument of transfer in form
satisfactory  to the Note  Registrar  duly executed by the holder hereof or such
holder's  attorney  duly  authorized  in writing,  and thereupon one or more new
Notes of authorized denominations shall be issued to the designated transferee.

        Transfers  of this Note are  subject  to the  restrictions  set forth in
Article III of the Trust Agreement.  The Holder of this Note shall indemnify the
Trustee,  the Collateral  Agent, the Note Paying Agent and the Note Registrar in
their individual and fiduciary  capacities,  the Note Insurer and the Depositors
against  any  liability  that may  result if the  transfer  is not  exempt  from
registration  under the Securities Act of 1933. The holder of this Note shall be
deemed  by its  acceptance  and  holding  of its Note to agree  that none of the
Depositors, the Administrator, the Subordinated Certificateholders, the Trustee,
the  Collateral  Agent,  the Note  Insurer,  the Note  Paying  Agent or the Note
Registrar is under an obligation to register this Note under the  Securities Act
of 1933 or any other securities law.

        The Notes are issuable  only as  registered  Notes in  denominations  of
$100,000  original  Principal Amount and integral  multiples of $1,000 in excess
thereof.  As provided in the Trust Agreement and subject to certain  limitations
therein  set  forth,   Notes  are  exchangeable  for  new  Notes  of  authorized
denominations,  as requested  by the Holder  surrendering  the same.  No service
charge will be made for any such  registration of transfer or exchange,  but the
Note  Registrar  may  require  payment of a sum  sufficient  to cover any tax or
governmental charges payable in connection therewith.

        The obligations and responsibilities  created by the Trust Agreement for
the benefit of the  Noteholders  shall terminate upon the payment in full of all
amounts  required  to be paid with  respect to the Notes  pursuant  to the Trust
Agreement.  The Trust may redeem the Notes as provided in the Trust Agreement on
a Payment Date as of which the outstanding Principal Amount of the Notes is less
than 10% of the original Principal Amount of the Notes.

        The recitals  contained  herein shall be taken as the  statements of the
Depositors,  and the Trustee,  the Collateral Agent, the Note Insurer,  the Note
Paying Agent and the Note Registrar assume no responsibility for the correctness
thereof and make no  representations  as to the validity or  sufficiency of this
Note or of the assignment of the Trust Property or any related document.

                                       B-6

<PAGE>

        Unless the certificate of authentication hereon shall have been executed
by an  authorized  officer  of  the  Note  Registrar,  by  manual  or  facsimile
signature,  this Note shall not entitle the holder  hereof to any benefit  under
the Trust Agreement or be valid for any purpose.

        IN WITNESS  WHEREOF,  the  Trustee on behalf of the Trust and not in its
individual capacity has caused this Note to be duly executed.

Dated: April 3, 2001                THE NELNET GROUP TRUST I

                                    By: WILMINGTON TRUST COMPANY,
                                    not in its individual capacity but solely
                                    as Trustee

                                    By:
                                    -------------------------------------------
                                          Authorized Officer

                                       B-7
<PAGE>

                                   ASSIGNMENT

               FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
               transfer(s) unto

               PLEASE INSERT SOCIAL SECURITY
               OR OTHER IDENTIFYING NUMBER
               OF ASSIGNEE

--------------------------------------------------------------------------------
 (Please print or type name and address, including postal zip code, of assignee)

-------------------------------------------------------------------------------
the within Note, and all rights thereunder,  hereby irrevocably constituting and
appointing

-------------------------------------------------------------------------------
Attorney to  transfer  said Note on the books of the Note  Registrar,  with full
power of substitution in the premises.

Dated:                                             ------------------------*
                                                   Signature Guaranteed:

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

        * NOTICE: The signature to this assignment must correspond with the name
as it appears  upon the face of the  within  Note in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed by either (a) a member or  participants  in the  Securities  Transfer
Agents  Medallion  Program,  the New York  Stock  Exchange  Medallion  Signature
Program or the Stock Exchanges Medallion Program or (b) a Securities  depository
registered  as a clearing  agency with the  Securities  and Exchange  Commission
under the Securities Exchange Act of 1934, as amended.

                                      B-8
<PAGE>

                                                                       EXHIBIT C

                       [FORM OF SUBORDINATED CERTIFICATE]

        NEITHER THIS CERTIFICATE NOR THE UNDERLYING  RESIDUAL RIGHTS ARE INSURED
OR GUARANTEED BY ANY GOVERNMENTAL AGENCY.

        THIS  CERTIFICATE  HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF
1933,  AS AMENDED.  TRANSFER OF THIS  CERTIFICATE  MAY ONLY BE MADE TO QUALIFIED
INSTITUTIONAL  BUYERS AS DEFINED IN RULE 144A UNDER THE  SECURITIES  ACT OF 1933
WHICH ARE NOT  EMPLOYEE  PENSION  PLANS AS  DEFINED IN THE  EMPLOYEE  RETIREMENT
INCOME  SECURITY  ACT OF 1974 OR PLANS  SUBJECT TO SECTION  4975 OF THE INTERNAL
REVENUE  CODE OF  1986,  AS  AMENDED.  A  TRANSFEREE  IS  REQUIRED  TO  SUBMIT A
REPRESENTATION  LETTER  AND  AFFIDAVIT  IN THE FORM OF  EXHIBIT  E TO THE  TRUST
AGREEMENT REFERRED TO BELOW IN ORDER TO EFFECT A TRANSFER.

        THIS CERTIFICATE MAY NOT BE ACQUIRED,  DIRECTLY OR INDIRECTLY, FOR OR ON
BEHALF OF A PERSON WHO IS NOT A UNITED  STATES  PERSON  (WITHIN  THE  MEANING OF
SECTION 7701 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED).

[TO THE FULLEST  EXTENT  PERMITTED BY APPLICABLE  LAW, THIS  CERTIFICATE  IS NOT
TRANSFERABLE]1

                            THE NELNET GROUP TRUST I
              SUBORDINATED STUDENT LOAN INTEREST MARGIN CERTIFICATE
    (This Certificate does not represent an obligation of, or an interest in,
                     NELnet, INC. or any of its affiliates).

Certificate No. _                                  Percentage Interest: ___%

                          CERTIFICATE OF AUTHENTICATION

               This is one of the Subordinated  Certificates  referred to in the
within-mentioned Trust Agreement.

Date of Authentication:      WILMINGTON TRUST COMPANY, as  Certificate Registrar

April 3, 2001                By:
                                ------------------------------------------------
                                               Authorized Officer
------------------------
1   To be  inserted  in the  Certificate  to be  held by the  Holder  of the
    Special Interest.

                                       C-1

<PAGE>

        THIS CERTIFIES THAT  ___________,  is the registered  owner of the above
specified Percentage Interest in THE NELNET GROUP TRUST I (the "Trust").

        The Trust was created pursuant to a Trust Agreement dated as of April 1,
2001 (the "Trust Agreement"),  among MELMAC LLC, as a depositor,  NELNET Student
Loan  Corporation-1,  as a depositor  (the "NELNET  Depositor  and together with
MELMAC  LLC,  the   "Depositors"),   NELnet,   Inc.,   as   administrator   (the
"Administrator"),  Wilmington Trust Company, as trustee (the "Trustee"), and the
Chase Manhattan Bank as Collateral  Agent, Note Registrar and Note Paying Agent,
a summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein,  the capitalized terms used herein have
the meanings assigned to them in the Trust Agreement.

        This certificate is one of the duly authorized  certificates  designated
in  the  Trust  Agreement  as  Subordinated   Certificates  (the   "Subordinated
Certificates").  The Trust is also issuing 6.34%  Student Loan  Interest  Margin
Securities (the "Notes").  This Subordinated  Certificate is issued under and is
subject to the terms,  provisions and conditions of the Trust Agreement which is
incorporated  herein by reference  and to which the holder of this  Subordinated
Certificate by virtue of the acceptance  hereof assents and by which such holder
is bound.  Distributions  with respect to the Subordinated  Certificates will be
made, but only after payment in full of the Notes, solely from the assets of the
Trust,  which include (as more fully described in the Trust Agreement):  (i) the
right to receive the residual cash-flow (the "Underlying  Residual Rights") from
two master trust estates established under two underlying  Indentures,  (ii) the
NELNET Depositor's right to receive certain  maintenance and operating expenses,
and (iii) the  Collection  Account,  Reserve  Account and  Distribution  Account
established under the Trust Agreement (collectively, the "Trust Property").

        Distributions will be made with respect to the Subordinated Certificates
only to the  extent  set forth in the  Trust  Agreement,  semi-annually,  on the
second  Business Day of each  January and July,  commencing  January,  2002 (the
"Payment  Date") to the person in whose name this  Subordinated  Certificate  is
registered at the close of business on the second day immediately preceding such
Payment Date (the "Record Date").

        It is the intent  and  agreement  of the  Depositors,  the  Subordinated
Certificateholders  and the  Noteholders  that, for purposes of federal  income,
state and local income and franchise and any other income taxes,  the Trust will
be treated as a grantor trust or, if not, as a partnership with the Subordinated
Certificateholders being treated as partners in that partnership,  and the Notes
will  be  treated  as  debt  of the  Trust.  The  Holder  of  this  Subordinated
Certificate, by virtue of the acceptance hereof, agrees to treat, and to take no
action  inconsistent  with the treatment of, the  Subordinated  Certificates for
such tax purposes as partnership interests in the Trust.

        Distributions  on  this  Subordinated  Certificate  will  be made by the
Certificate  Paying  Agent by check or money  order  mailed to the  Subordinated
Certificateholder of record in the Certificate Register without the presentation
or  surrender  of this  Subordinated  Certificate  or the making of any notation
hereon or by wire transfer,  in immediately  available  funds, to the account of
the Subordinated  Certificateholder if the Subordinated  Certificateholder shall
have provided to the Certificate Paying Agent appropriate  written  instructions

                                       C-2
<PAGE>

at least five Business Days prior to a Distribution  Date.  Notwithstanding  the
above,  the final  distribution on this  Subordinated  Certificate  will be made
after  due  notice  by the  Certificate  Paying  Agent of the  pendency  of such
distribution  and only upon  presentation  and  surrender  of this  Subordinated
Certificate  at  the  office  or  agency  maintained  for  that  purpose  by the
Certificate Paying Agent.

        The  Subordinated  Certificates do not represent an obligation of, or an
interest in, the  Depositors,  the  Administrator,  the Trustee,  the Collateral
Agent, the Certificate Paying Agent, the Certificate  Registrar or any affiliate
of  any  of  them.  The  Subordinated  Certificates  are  limited  in  right  of
distributions  to  certain  collections  and  recoveries  respecting  the  Trust
Property,  but only  after  payment of all  amounts  the Notes are  entitled  to
receive  on a  Payment  Date,  all as more  specifically  set forth in the Trust
Agreement.  None of the Trustee,  the Collateral  Agent, the Certificate  Paying
Agent,  the Certificate  Registrar,  the Depositors,  the  Administrator  or the
Subordinated Certificateholders shall incur any personal liability in connection
herewith  except  as  provided  in the  Trust  Agreement.  A copy  of the  Trust
Agreement may, upon request,  be examined by any Subordinated  Certificateholder
during normal business hours at the principal  office of the Trustee and at such
other places, if any, designated by the Depositors.

        As provided in the Trust  Agreement  and subject to certain  limitations
set forth therein, the transfer of this Subordinated  Certificate is registrable
in the Certificate Register upon surrender of this Subordinated  Certificate for
registration of transfer at the office or agency of the  Certificate  Registrar,
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Certificate  Registrar  duly  executed  by the  holder  hereof or such  holder's
attorney duly authorized in writing,  and thereupon one or more new Subordinated
Certificates  of  authorized  denominations  shall be issued  to the  designated
transferee.

        No transfer of this  Subordinated  Certificate  shall be made unless the
Certificate  Registrar shall have received a Representation Letter and Affidavit
from the transferee in the form of Exhibit E to the Trust Agreement.  The Holder
of this Subordinated Certificate shall indemnify the Trustee, Certificate Paying
Agent the Certificate  Registrar in their  individual and fiduciary  capacities,
the Note Insurer and the Depositors against any liability that may result if the
transfer is not so exempt. The holder of this Subordinated  Certificate shall be
deemed by its  acceptance and holding of its  Subordinated  Certificate to agree
that none of the  Depositors,  the  Administrator,  the Trustee,  the Collateral
Agent,  the  Certificate  Paying  Agent,  the Note  Insurer  or the  Certificate
Registrar is under an  obligation  to register  this  Subordinated  Certificates
under the Securities Act of 1933 or any other securities law.

        The recitals  contained  herein shall be taken as the  statements of the
Depositors or the Subordinated  Certificateholders,  as the case may be, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee makes
no  representations  as to the  validity  or  sufficiency  of this  Subordinated
Certificate or of the assignment of the Trust Property or any related document.

                                       C-3
<PAGE>

        Unless the certificate of authentication hereon shall have been executed
by an authorized  officer of the Certificate  Registrar,  by manual or facsimile
signature,  this Subordinated Certificate shall not entitle the holder hereof to
any benefit under the Trust Agreement or be valid for any purpose.

        IN WITNESS  WHEREOF,  the  Trustee on behalf of the Trust and not in its
individual  capacity  has  caused  this  Subordinated  Certificate  to  be  duly
executed.

Dated: April 3, 2001                THE NELNET GROUP TRUST I

                                    By: WILMINGTON TRUST COMPANY,
                                        not in  its  individual  capacity
                                        but  solely  as Trustee

                                    By:
                                       -----------------------------------------
                                        Authorized Officer

                                       C-4
<PAGE>

                                   ASSIGNMENT

               FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
               transfer(s) unto

               PLEASE INSERT SOCIAL SECURITY
               OR OTHER IDENTIFYING NUMBER
               OF ASSIGNEE

--------------------------------------------------------------------------------
 (Please print or type name and address, including postal zip code, of assignee)

--------------------------------------------------------------------------------
the  within   Certificate,   and  all  rights  thereunder,   hereby  irrevocably
constituting and appointing

--------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.

Dated:                                             ---------------------------*
                                                   Signature Guaranteed:

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

        * NOTICE: The signature to this assignment must correspond with the name
as it  appears  upon the face of the  within  Certificate  in every  particular,
without alteration,  enlargement or any change whatever.  Such signature must be
guaranteed by either (a) a member or  participants  in the  Securities  Transfer
Agents  Medallion  Program,  the New York  Stock  Exchange  Medallion  Signature
Program or the Stock Exchanges Medallion Program or (b) a Securities  depository
registered  as a clearing  agency with the  Securities  and Exchange  Commission
under the Securities Exchange Act of 1934, as amended.

                                      C-5
<PAGE>

                                                                      EXHIBIT D

                [FORM OF NOTE PAYING AGENT'S PAYMENT DATE REPORT]
                            THE NELNET GROUP TRUST I
                  6.34% STUDENT LOAN INTEREST MARGIN SECURITIES

                                            Payment Date:  ___________________

1.      Amount  Available  for  such  Payment  Date  (Stated  separately  by (i)
        Underlying  MELMAC Residual Right, (ii) Underlying NELNET Residual Right
        and (iii) Maintenance and Operating  Expenses and in the aggregate,  and
        listing   date  of   each   deposit   into   the   Collection   Account)
        $____________________

2.      Trustee  Fee,   Collateral   Agent  Fee,   Note  Insurer   Premiums  and
        Administration Fee $____________________

3.      Calculation of Interest Amount

        (a)   Interest on outstanding stated amount of Notes due on Payment Date
              ($--------------------)

        (b)   Interest Shortfall, if any, on Prior Payment Date
              ($--------------------)

        (c)   Interest on Interest Shortfall due on Payment Date
              ($--------------------)

        (d)   Total-Interest Amount
              $-----------------------

4.      Excess,  if any, of Amount Available (line 1) over the sum of (i) line 2
        and (ii) the Interest Amount (line 3(d)):

        $---------------------

5.      Surety Bond Payments and Insured Payments, if any, for such Payment Date
        (stated separately)

        $---------------------

6.      Amount,  if any, owed to Note Insurer on account of Surety Bond Payments
        previously made:

         $----------------------

                                       D-1
<PAGE>

7.      Amount, if any, owed to Note Insurer as Reimburseable Amounts:

        $------------------------

8.      Outstanding  Principal Amount of Notes immediately prior to such Payment
        Date:

        $---------------------

9.      Recalculated  Targeted Amount of Notes immediately prior to such Payment
        Date:

        $----------------------

10.     Targeted Balance for such Payment Date:

        $---------------------

11.     Principal Payment Amount for such Payment Date:

        $---------------------

12.     Special Principal Payment, if any, for such Payment Date:

        $---------------------

13.     Specified Reserve Account Requirement for such Payment Date:

        $---------------------

14.     Amount on deposit in the first  sub-account of the Reserve Account after
        giving   effect   to  all   payments   made   on  such   Payment   Date:

        $----------------------

                                   The Chase Manhattan Bank,
                                   not in its individual  capacity but solely as
                                   Note Paying Agent

                                   By:
                                   -------------------------------------------
Enclosures

                                      D-2
<PAGE>

                                                                      EXHIBIT E

           [FORM OF TRANSFEREE'S REPRESENTATION LETTER AND AFFIDAVIT]

State of              )
                      ) ss:
County of             )

                            THE NELNET GROUP TRUST I
                          [Student Loan Interest Margin Securities]
                   [Subordinated Student Loan Interest Margin Certificates]

Wilmington Trust Company, as Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn:  Corporate Trust Administration

        Dear Sirs:

        1.      In connection with our proposed purchase of the above referenced
                [Notes][Subordinated  Certificates]  (the  "[Notes][Subordinated
                Certificates]")  issued pursuant to the Trust Agreement dated as
                of April 1, 2001 (the "Trust Agreement"), among MELMAC LLC, as a
                depositor,  NELNET  Student Loan  Corporation-1,  as a depositor
                (together with MELMAC LLC, the  "Depositors"),  as administrator
                (the "Administrator"), Wilmington Trust Company, as Trustee, and
                the Chase Manhattan Bank as Collateral Agent, Note Registrar and
                Note   Paying    Agent,    the    undersigned    represents   as
                follows:[He][She]  is a  [Title]  of [Name of  Transferee]  (the
                "Investor").

        2.      The   Investor   understands   that   the   [Notes][Subordinated
                Certificates]  have not been registered under the Securities Act
                of 1933, as amended (the "Securities  Act"), and may not be sold
                except as permitted in the following sentence and agrees, on its
                own behalf and on behalf of any  accounts for which it is acting
                as   hereinafter   stated,    that   the    [Notes][Subordinated
                Certificates] may be resold, pledged or transferred only so long
                as  the  [Notes][Subordinated  Certificates]  are  eligible  for
                resale  pursuant  to Rule 144A under the  Securities  Act ("Rule
                144A"), to a person whom it reasonably  believes is a "qualified
                institutional  buyer" as  defined  in Rule  144A (a "QIB")  that
                purchases  for  its own  account,  or a QIB  purchasing  for the
                account  of a QIB,  to whom  notice  is given  that the  resale,
                pledge or  transfer is being made in reliance on Rule 144A or an
                institutional   "accredited   investor"   as   defined  in  Rule
                501(a)(1),  (2), (3) or (7) under the Securities Act of 1933 (an
                "Institutional  Accredited Investor") that represents that it is
                buying the [Notes][Subordinated Certificates] for investment and
                not with a view to the distribution thereof.

                                      E-1
<PAGE>

        3.      The Investor is (check appropriate box)

        |_|     a QIB; or

        |_|     an  Accredited  Investor  that  is  buying  without  a  view  to
                distribution of the [Notes][Subordinated Certificates].

        4.      In the normal course of its business, the Investor invests in or
                purchases   securities   similar  to  the   [Notes][Subordinated
                Certificates],   and  the  Investor  has  such   knowledge   and
                experience in financial and business  matters that it is capable
                of  evaluating  the  merits  and risks of which  purchasing  the
                [Notes][Subordinated  Certificates].  The Investor is aware that
                it  (or  any   investor   account   on   behalf   of  which  the
                [Notes][Subordinated  Certificates]  may  be  purchased)  may be
                required  to bear  the  economic  risk of an  investment  in the
                [Notes][Subordinated  Certificates]  for an indefinite period of
                time,  and it is (or such account is) able to bear such risk for
                an indefinite period.

        5.      The  Investor  is  not  acquiring   such  [Note]   [Subordinated
                Certificates]  directly  or  indirectly  for, or on behalf of, a
                "benefit  plan  investor" as defined in, or subject to, the plan
                asset regulations set forth at 29 C.F.R. Section 2510.3-101 with
                respect  to a Plan  which  is  subject  to  Title I of  ERISA or
                Section  4975 of the Code.  [* In lieu of making  the  foregoing
                statement,   the  Investor  may  furnish  to  the   Registrar  a
                certification   satisfactory   in  form  and  substance  to  the
                Registrar  to the effect  that the  purchase  or holding of such
                Note directly or indirectly for, or on behalf of, the Transferee
                qualifies for prohibited transaction exemptive relief under PTCE
                96-23,  PTCE 95-60,  PTCE 91-38,  PTCE 90-1,  PTCE 84-14 or some
                other applicable exemption.]

---------------------
* Available only in connection with a trasfer of the Notes; the Subordinated
Certificates may not be transferred to a "benefit plan investor."

                                      E-2
<PAGE>

        6.      The Investor:  (a) acknowledges  receipt of the Trust Agreement,
                the Confidential  Private  Placement  Memorandum (the "Placement
                Memorandum") dated March 29, 2001, relating to the Notes and the
                Underlying   Agreements  listed  on  Schedule  II  thereto;  the
                Investor acknowledges that the all payments will be based solely
                on amounts to be received on the Underlying  Residual Rights and
                the Maintenance and Operating Expenses. The Investor understands
                that it is not expected that the Confidential  Private Placement
                Memorandum  will be updated to reflect  the  performance  of the
                Underlying  Residual  Rights and the  Maintenance  and Operating
                Expenses or for any other purpose; and confirms that it has been
                given the opportunity to conduct such investigation of the Trust
                Agreement and the Underlying Residual Rights and the Maintenance
                and Operating Expenses and ask such questions of officers of the
                Depositors  as it has  considered  necessary for purposes of its
                investment decision.

        7.      The  Investor  is  not  acquiring   such  [Note]   [Subordinated
                Certificates],  directly  or  indirectly,  for or on behalf of a
                person who is not a United  States person (as defined in Section
                7701 of the Code).

                                                   Very truly yours,

                                                   [INVESTOR]

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

                                      E-3
<PAGE>

                                                                      EXHIBIT F

                        DEBT SERVICE RESERVE SURETY BOND

                                      F-1
<PAGE>

                                                                      EXHIBIT G

                              NOTE INSURANCE POLICY

                                      G-1
<PAGE>

                                                                      EXHIBIT H

                          FORM OF CASH FLOW CERTIFICATE

                                      H-1
<PAGE>

                                                                      EXHIBIT I

                                 FORM OF NOTICE

                                      I-1

<PAGE>

                                                                      EXHIBIT J

                           FORM OF DEMAND FOR PAYMENT

                                      J-1

<PAGE>1984 STOCK OPTION PLAN

Exhibit 10.1

	
IDEXX CORPORATION

	 
	
1984 STOCK OPTION PLAN

	 
	
(as of May 23, 2001)

(Adopted by the Stockholders of the Company on July 9, 1984; amended by the Board of Directors and approved by the Stockholders of the Company as of August 29, 1984, August 18, 1985, July 18, 1986, January 6, 1989 and November 30, 1989; amended by the Board of Directors on May 23, 2001.  Number of shares covered by this plan reflects 2 for 1 stock split in the form of a stock dividend paid on October 1, 1993.)

          The purpose of this 1984 Stock Option Plan (the "Plan") is to encourage and enable selected key employees and consultants of IDEXX Corporation (the "Company") and of any subsidiary corporation of which 51% or more of the outstanding voting stock is owned by the Company (a "Subsidiary") to acquire an interest in the Company through the granting of options, as herein provided, to acquire its Series A Common Stock, $.10 par value (the "Common Stock").

          1.     Shares of Stock Subject to the Plan

                  The stock that may be issued and sold pursuant to options granted under the Plan shall not exceed, in the aggregate, 2,000,000 shares of Common Stock of the Company, which may be (i) authorized but unissued shares, (ii) treasury shares or (iii) shares previously reserved for issue upon exercise of options under the Plan, which options have expired or been terminated; provided, however, that the number of shares subject to the Plan shall be subject to adjustment as provided in Section 4.

          2.     Eligibility

                  Key employees, consultants and directors of the Company or of any Subsidiary shall be eligible for selection by the Board of Directors of the Company (the "Board") to participate in the Plan; provided, that no person shall be granted any Incentive Stock Option (as defined in Section 3) who, at the time such Option is granted, owns, or could own as a result of the grant, directly or indirectly, Common Stock of the Company possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or any of its Subsidiaries, unless the requirements of subparagraph (f)(3) of Section 3 are satisfied.  The Board, acting by a majority of its disinterested Directors, shall determine the employees and consultants to be granted options (the "Optionees"), the number of shares subject to each option and the terms of the options, consistently with the provisions of this Plan.  The Board may appoint from its disinterested Directors a committee of two or more persons who may exercise the powers of the Board in granting options under the Plan.  As used herein, a "disinterested" Director shall mean one who is not presently eligible, and has not been eligible at any time within one year prior to the granting of the options in question, to receive any option granted under the Plan or any stock, stock options or stock appreciation rights under any other employee benefit plan of the Company, its parent or its Subsidiaries.

          3.     Options

                  An Option granted pursuant to this Plan may be either (i) an incentive stock option ("Incentive Stock Option") meeting the requirements of Section 422A of the Internal Revenue Code of 1986 (the "Code") or (ii) a non-statutory option which is not intended to meet the requirements of Section 422A ("Non-Statutory Option", the Incentive Stock Options  and Non-Statutory Options shall be referred to together as "Options").  Options shall be subject to the terms, conditions and restrictions described in this Section 3 and elsewhere in the Plan and in the document evidencing the grant of the Option (which, in the case of an Incentive Stock Option, shall be substantially in the form of Exhibit A to the Plan and, in the case of a Non-Statutory Option, shall be in the form of Exhibit B to the Plan).

1

                  (a)     Purchase Price.  The purchase price per share of Common Stock deliverable upon the exercise of an Option shall be determined by the Board of Directors at the date of grant of the Option, but, in the case of an Incentive Stock Option, shall not be less than 100% of the fair market value of such Common Stock, as determined by the Board of Directors, on the day the Option is granted, and in no event shall the purchase price be less than the par value per share of such Common Stock.  No shares will be issued until full payment therefor has been made in cash or by check payable to the order of the Company at the time of exercise of an Option or any portion thereof.

                  (b)     Duration of Options.  Each Option and all rights thereunder shall expire on such date as the Board of Directors may determine, but, with respect to Incentive Stock Options, in no event later than ten (10) years from the date on which the Incentive Stock Option is granted, subject to earlier termination as provided herein.

                  (c)     Exercise of Options.  Options granted hereunder shall become exercisable either in full or in installments at such time or times and during such period as shall be set forth in the agreement evidencing such Option; provided, however, that no Incentive Stock Option granted under the Plan shall have a term in excess of ten (10) years from the date of grant.  To the extent that an Option to purchase shares (or a portion thereof) is not exercised by an Optionee when it becomes initially exercisable, it shall not expire but shall be carried forward and shall be exercisable, on a cumulative basis, until the expiration of the Option.

                  (d)     Nontransferability of Options.  No Option granted under the Plan shall be assignable or transferable by the Optionee, either voluntarily or by operation of law, except by will or the laws of descent and distribution.  During the life of the recipient, the Option shall be exercisable only by him.

                  (e)     Rights of Stockholder.  The holder of an Option shall have no rights as a stockholder with respect to any shares of Common Stock covered by an Option until the date of issue of a stock certificate to him for such shares.

                  (f)     Incentive Stock Options.  Options granted under the Plan which are intended to be Incentive Stock Options may only be granted to employees of the Company or a Subsidiary, shall be specifically designated as Incentive Stock Options and shall be subject to the following additional terms and conditions:

                          (1)     Prior Outstanding Incentive Stock Options.  No Incentive Stock Option granted prior to the effective date of those provisions of the Tax Reform Act of 1986 that amend Section 422A of the Code (the "Effective Date") under the Plan may be exercised, in whole or in part, by a holder thereof while there is outstanding, within the meaning of Section 422A(c)(7) of the Internal Revenue Code, as amended, any other Option to purchase stock of the Company, or of any Subsidiary or parent corporation of the Company (or a predecessor corporation of any thereof), qualifying as an "incentive stock option" under Section 422A(b) of the Internal Revenue Code which was granted to such holder prior to the date of grant of such Incentive Stock Option.

2

                          (2)     Dollar Limitation.

                                    (i)     The aggregate fair market value (determined as of the respective date or dates of grant) of the Common Stock which may be made the subject of Incentive Stock Options granted prior to the Effective Date under the Plan (and all other Incentive Stock Option plans of the Company or its Subsidiaries) to any employee in any one calendar year shall not exceed the sum of $100,000, plus any unused carryover to such year from each of the three immediately preceding calendar years after 1980.  For purposes of the preceding limitation, the term "carryover" means, with respect to each calendar year after 1980, one-half (1/2) of the amount by which the sum of $100,000 exceeds the aggregate fair market value (determined as of the respective date or dates of grant) of the Common Stock for which the Optionee is granted Incentive Stock Options under the Plan (or any other incentive stock option plan of the Company or its Subsidiaries) in such calendar year.  Options granted during any calendar year shall first be applied against the basic $100,000 limitation in effect for such calendar year and then applied against any unused carryovers to such calendar year in the order in which such carryovers arose in prior calendar years.  If Section 422A(b)(8) or Section 422A(c)(4) of the Internal Revenue Code is amended to alter the limitation set forth therein so that, following such amendment, such limitation shall differ from the limitation set forth in this subparagraph (f)(2), the limitation of this subparagraph (f)(2) shall be automatically amended accordingly.

                                    (ii)     The aggregate fair market value (determined as of the respective date or dates of grant) of the Common Stock which becomes exercisable in any one calendar year and which may be made the subject of Incentive Stock Options granted under the Plan (and under any other incentive stock option plans of the Company, and any parent corporation or Subsidiary) to any employee after the Effective Date shall not exceed the sum of $100,000.

                          (3)     10% Stockholder.  If any employee to whom an Incentive Stock Option is to be granted pursuant to the provisions of the Plan is, on the date of grant, the owner of stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any one of its Subsidiaries, then the following special provisions shall be applicable to the Incentive Stock Option granted to such individual:

                                    (i)     The price per share of the Common Stock subject to such Incentive Stock Option shall not be less than 110% of the fair market value of one share of Common Stock on the date of grant; and

                                    (ii)     Incentive Stock Options shall not have a term in excess of five (5) years from the date of grant.

                  Except as modified by the preceding provisions of this Section 3(f), all the provisions of the Plan shall be applicable to Incentive Stock Options granted hereunder.

          4.     Dilution or Other Adjustments

                  The term of the Options and the number of shares subject to this Plan shall be equitably adjusted in such manner as to prevent dilution or enlargement of option rights in the following instances:

                  (a)     the declaration of a dividend payable to the holders of Common Stock in stock of the same class;

                  (b)     a split-up of the Common Stock or a reverse split thereof;

                  (c)     a recapitalization of the Company under which shares of one or more different classes of stock are distributed in exchange for or upon the Common Stock without payment of any valuable consideration by the holders thereof.

                  The terms of any such adjustment shall be conclusively determined by the Board.

3

          5.     Administration and Amendment of the Plan

                  The Plan shall be administered by the Board, or a committee thereof as provided in Section 2, which shall effect the grant of Options under the Plan, determine the type and form of Options to be granted in each case, and make any other determination under or interpretation of any provision of the Plan and any Option.  Any of the foregoing actions taken by the Board or such committee shall be final and conclusive.  The Board may amend and make such changes in and additions to the Plan as it may deem proper and in the best interest of the Company; provided, however, that no such action shall adversely affect or impair any options theretofore granted under the Plan without the consent of the Optionee; and provided, further, that no amendment (i) increasing the maximum number of shares which may be issued under the Plan, except as provided in Section 4, (ii) extending the term of the Plan or any Option, (iii) changing the minimum exercise price of Options to be granted under the Plan, or (iv) changing the requirements as to eligibility for participation in the Plan, shall be adopted without the approval of shareholders.

                  Notwithstanding the foregoing, the Board hereby reserves the right to amend or modify the terms and provisions of the Plan and of any outstanding Incentive Stock Options under the Plan to the extent necessary to qualify any or all Incentive Stock Options under the Plan for such favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded employee stock options under Section 422A or any successor provision of the Internal Revenue Code.

          6.     Expiration and Termination of the Plan

                  Options may be granted under the Plan at any time, or from time to time, within ten (10) years from the date the Plan is adopted, as long as the total number of shares purchased under the Plan and subject to outstanding options under the Plan does not exceed the number of shares of the Common Stock of the Company set forth in Section 1 as adjusted as provided in Section 4.  The Plan may be abandoned or terminated at any time by the Board, except with respect to any options then outstanding under the Plan.

          7.     Acquisition Events

                  (a)     Upon the occurrence of an Acquisition Event (as defined below), or the execution by the Company of any agreement with respect to an Acquisition Event, the Board shall provide that all outstanding Options shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), provided that any options substituted for Incentive Stock Options shall satisfy, in the determination of the Board, the requirements of Section 424(a) of the Code.  Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate thereof) does not agree to assume, or substitute for, such Options, then the Board shall upon written notice to the holder of an Option, provide that all then unexercised Options will become exercisable in full as of a specified time (the "Acceleration Time") prior to the Acquisition Event and will terminate immediately prior to the consummation of such Acquisition Event, except to the extent exercised by the holders thereof before the consummation of such Acquisition Event; provided, however, that, in the event of an Acquisition Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share of Common Stock surrendered pursuant to such Acquisition Event (the "Acquisition Price"), then the Board may instead provide that all outstanding Options shall terminate upon consummation of such Acquisition Event and that each holder of an Option shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of shares of Common Stock subject to such outstanding Options (whether or not then exercisable), exceeds (B) the aggregate exercise price of such Options. 

4

                  (b)     An "Acquisition Event" shall mean:  (i) any merger or consolidation of the Company with or into another entity as a result of which the Common Stock is converted into or exchanged for the right to receive cash, securities or other property or (ii) any exchange of shares of the Company for cash, securities or other property pursuant to a statutory share exchange transaction.

          8.     Change of Control

                  (a)     Immediately prior to the consummation of a Change of Control (as defined below), each then outstanding Option under the Plan shall become immediately exercisable as to twenty-five percent (25%) of the number of shares as to which such Option would otherwise not then be exercisable (rounded down to the nearest whole share), and the number of shares as to which each such Option shall become exercisable on each vesting date set forth in the applicable option agreement shall be reduced by 25%.  In addition, all Options held by an Optionee shall immediately become exercisable in full if and when, within 24 months after a Change of Control, such Optionee's employment or engagement with the Company (or the acquiring or succeeding entity) is involuntarily terminated by the Company (or such acquiring or succeeding entity) other than for Cause (as defined below).

                  (b)     "Change of Control" shall mean:

                          (i)     The acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (b)(i), the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (4) any acquisition by any corporation pursuant to a transaction which satisfies the criteria set forth in clauses (A), (B) and (C) of subsection (b)(iii) of this Section 7; or

                          (ii)     Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequently to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 

5

                          (iii)     Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, immediately following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, of the corporation resulting from such Business Combination (which as used in this Section 7(b)(iii) shall include, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation and (C) at least half of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

                          (iv)     Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

                  (c)     "Cause" shall mean:

                          (i)     the failure of the Optionee to perform substantially the Optionee's duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), which failure is not cured within 30 days after a written demand for substantial performance is delivered to the Optionee by the Optionee's manager or the Board which specifically identifies the manner in which such manager or the Board, as applicable, believes that the Optionee has not substantially performed the Optionee's duties, or

                          (ii)     the engaging by the Optionee in illegal conduct or gross misconduct which is injurious to the Company.

6

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