Document:

Exhibit 4.3

 

 

 

INDENTURE

 

 

among

 

 

SLM STUDENT LOAN TRUST 2004-1

as the Issuer,

 

 

CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,

not in its individual capacity but

solely as the Eligible Lender Trustee

 

 

and

 

 

THE BANK OF NEW YORK,

not in its individual capacity but

solely as the Indenture Trustee

 

 

Dated as of January 1, 2004

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  	
   

  
	
  Definitions and Usage

  	
   

  
	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions and Usage

  	
   

  
	
  SECTION
  1.2

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
  The
  Notes

  	
   

  
	
   

  	
   

  
	
  SECTION
  2.1

  	
  Form

  	
   

  
	
  SECTION
  2.2

  	
  Execution, Authentication and Delivery

  	
   

  
	
  SECTION 2.3

  	
  Temporary Notes

  	
   

  
	
  SECTION
  2.4

  	
  Registration; Registration of Transfer and
  Exchange

  	
   

  
	
  SECTION 2.5

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
   

  
	
  SECTION 2.6

  	
  Persons Deemed Owner

  	
   

  
	
  SECTION 2.7

  	
  Payment of Principal and Interest; Note
  Interest Shortfall

  	
   

  
	
  SECTION 2.8

  	
  Cancellation

  	
   

  
	
  SECTION 2.9

  	
  Release of Collateral

  	
   

  
	
  SECTION 2.10

  	
  Book-Entry Notes

  	
   

  
	
  SECTION 2.11

  	
  Notices to Clearing Agency

  	
   

  
	
  SECTION 2.12

  	
  Definitive Notes

  	
   

  
	
  SECTION 2.13

  	
  Transfer Restrictions

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  
	
  Covenants

  	
   

  
	
   

  	
   

  
	
  SECTION
  3.1

  	
  Payment to Noteholders and each Swap Counterparty

  	
   

  
	
  SECTION 3.2

  	
  Maintenance of Office or Agency

  	
   

  
	
  SECTION 3.3

  	
  Money for Payments to be Held in Trust

  	
   

  
	
  SECTION 3.4

  	
  Existence

  	
   

  
	
  SECTION 3.5

  	
  Protection of Indenture Trust Estate

  	
   

  
	
  SECTION 3.6

  	
  Opinions as to Indenture Trust Estate

  	
   

  
	
  SECTION
  3.7

  	
  Performance of Obligations; Servicing of
  Trust Student Loans

  	
   

  
	
  SECTION 3.8

  	
  Negative Covenants

  	
   

  
	
  SECTION 3.9

  	
  Annual Statement as to Compliance

  	
   

  
	
  SECTION 3.10

  	
  Issuer May Consolidate, etc., Only on
  Certain Terms.

  	
   

  
	
  SECTION 3.11

  	
  Successor or Transferee

  	
   

  
	
  SECTION 3.12

  	
  No Other Business

  	
   

  
	
  SECTION 3.13

  	
  No Borrowing

  	
   

  
	
  SECTION
  3.14

  	
  Obligations of Servicer and Administrator

  	
   

  
	
  SECTION
  3.15

  	
  Guarantees, Loans, Advances and Other
  Liabilities

  	
   

  
	
  SECTION 3.16

  	
  Capital Expenditures

  	
   

  

 

i

 

	
  SECTION 3.17

  	
  Restricted Payments

  	
   

  
	
  SECTION 3.18

  	
  Notice of Events of Default

  	
   

  
	
  SECTION 3.19

  	
  Further Instruments and Acts

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  IV

  	
   

  
	
  Satisfaction and Discharge

  	
   

  
	
   

  	
   

  
	
  SECTION
  4.1

  	
  Satisfaction and Discharge of Indenture

  	
   

  
	
  SECTION 4.2

  	
  Application of Trust Money

  	
   

  
	
  SECTION
  4.3

  	
  Repayment of Moneys Held by Paying Agent

  	
   

  
	
  SECTION 4.4

  	
  Auction of Trust Student Loans

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  V

  	
   

  
	
  Remedies

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1

  	
  Events of Default

  	
   

  
	
  SECTION
  5.2

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
   

  
	
  SECTION
  5.3

  	
  Collection of Indebtedness and Suits for
  Enforcement by Indenture Trustee

  	
   

  
	
  SECTION 5.4

  	
  Remedies; Priorities

  	
   

  
	
  SECTION
  5.5

  	
  Optional Preservation of the Trust Student
  Loans

  	
   

  
	
  SECTION 5.6

  	
  Limitation of Suits

  	
   

  
	
  SECTION
  5.7

  	
  Unconditional Rights of Noteholders to
  Receive Principal and Interest

  	
   

  
	
  SECTION 5.8

  	
  Restoration of Rights and Remedies

  	
   

  
	
  SECTION 5.9

  	
  Rights and Remedies Cumulative

  	
   

  
	
  SECTION 5.10

  	
  Delay or Omission Not a Waiver

  	
   

  
	
  SECTION 5.11

  	
  Control by Noteholders

  	
   

  
	
  SECTION 5.12

  	
  Waiver of Past Defaults

  	
   

  
	
  SECTION 5.13

  	
  Undertaking for Costs

  	
   

  
	
  SECTION 5.14

  	
  Waiver of Stay or Extension Laws

  	
   

  
	
  SECTION 5.15

  	
  Action on Notes

  	
   

  
	
  SECTION
  5.16

  	
  Performance and Enforcement of Certain
  Obligations.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  
	
  The Indenture Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1

  	
  Duties of Indenture Trustee

  	
   

  
	
  SECTION 6.2

  	
  Rights of Indenture Trustee

  	
   

  
	
  SECTION
  6.3

  	
  Individual Rights of Indenture Trustee

  	
   

  
	
  SECTION 6.4

  	
  Indenture Trustee’s Disclaimer

  	
   

  
	
  SECTION 6.5

  	
  Notice of Defaults

  	
   

  
	
  SECTION
  6.6

  	
  Reports by Indenture Trustee to Noteholders

  	
   

  
	
  SECTION 6.7

  	
  Compensation and Indemnity

  	
   

  
	
  SECTION 6.8

  	
  Replacement of Indenture Trustee

  	
   

  
	
  SECTION 6.9

  	
  Successor Indenture Trustee by Merger

  	
   

  
	
  SECTION
  6.10

  	
  Appointment of Co-Trustee or Separate
  Trustee.

  	
   

  

 

ii

 

	
  SECTION 6.11

  	
  Eligibility; Disqualification

  	
   

  
	
  SECTION
  6.12

  	
  Preferential Collection of Claims Against
  the Issuer

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
  Noteholders’ Lists and Reports

  	
   

  
	
   

  	
   

  
	
  SECTION
  7.1

  	
  Issuer to Furnish Indenture Trustee Names
  and Addresses of Noteholders

  	
   

  
	
  SECTION
  7.2

  	
  Preservation of Information; Communications
  to Noteholders

  	
   

  
	
  SECTION 7.3

  	
  Reports by Issuer.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  	
   

  
	
  Accounts, Disbursements and Releases

  	
   

  
	
   

  	
   

  
	
  SECTION 8.1

  	
  Collection of Money

  	
   

  
	
  SECTION 8.2

  	
  Trust Accounts

  	
   

  
	
  SECTION
  8.3

  	
  General Provisions Regarding Accounts

  	
   

  
	
  SECTION 8.4

  	
  Release of Indenture Trust Estate

  	
   

  
	
  SECTION 8.5

  	
  Opinion of Counsel

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  
	
  Supplemental Indentures

  	
   

  
	
   

  	
   

  
	
  SECTION
  9.1

  	
  Supplemental Indentures Without Consent of
  Noteholders

  	
   

  
	
  SECTION
  9.2

  	
  Supplemental Indentures with Consent of
  Noteholders

  	
   

  
	
  SECTION 9.3

  	
  Execution of Supplemental Indentures

  	
   

  
	
  SECTION 9.4

  	
  Effect of Supplemental Indenture

  	
   

  
	
  SECTION 9.5

  	
  Conformity with Trust Indenture Act

  	
   

  
	
  SECTION
  9.6

  	
  Reference in Notes to Supplemental
  Indentures

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  X

  	
   

  
	
  Redemption of Notes

  	
   

  
	
   

  	
   

  
	
  SECTION
  10.1

  	
  Redemption

  	
   

  
	
  SECTION 10.2

  	
  Form of Redemption Notice

  	
   

  
	
  SECTION 10.3

  	
  Notes Payable on Redemption Date

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  
	
  SECTION
  11.1

  	
  Compliance Certificates and Opinions, etc

  	
   

  
	
  SECTION
  11.2

  	
  Form of Documents Delivered to Indenture
  Trustee

  	
   

  
	
  SECTION 11.3

  	
  Acts of Noteholders

  	
   

  
	
  SECTION 11.4

  	
  Notices, etc., to Indenture Trustee, Issuer
  and Rating Agencies

  	
   

  
	
  SECTION 11.5

  	
  Notices to Noteholders; Waiver

  	
   

  
	
  SECTION
  11.6

  	
  Alternate Payment and Notice Provisions

  	
   

  
	
  SECTION 11.7

  	
  Conflict with Trust Indenture Act

  	
   

  
	
  SECTION
  11.8

  	
  Effect of Headings and Table of Contents

  	
   

  

 

iii

 

	
  SECTION 11.9

  	
  Successors and Assigns

  	
   

  
	
  SECTION 11.10

  	
  Separability

  	
   

  
	
  SECTION 11.11

  	
  Benefits of Indenture

  	
   

  
	
  SECTION 11.12

  	
  Legal Holidays

  	
   

  
	
  SECTION 11.13

  	
  Governing Law

  	
   

  
	
  SECTION 11.14

  	
  Counterparts

  	
   

  
	
  SECTION 11.15

  	
  Recording of Indenture

  	
   

  
	
  SECTION 11.16

  	
  Trust Obligations

  	
   

  
	
  SECTION 11.17

  	
  No Petition

  	
   

  
	
  SECTION 11.18

  	
  Inspection

  	
   

  
	
  SECTION 11.19

  	
  Subordination

  	
   

  

 

iv

 

APPENDICES, SCHEDULES AND EXHIBITS

 

	
  APPENDIX
  A-1

  	
  Definitions and Usage

  	
   

  
	
  APPENDIX
  A-2

  	
  Reset Rate Note Procedures

  	
   

  
	
  APPENDIX
  A-3

  	
  Transfer Restrictions for the Reset Rate
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  A

  	
  Schedule of Trust Student Loans

  	
   

  
	
  SCHEDULE
  B

  	
  Location of Trust Student Loan Files

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Forms
  of Notes

  	
   

  
	
  EXHIBIT B

  	
  Form of Note Depository Agreement for U.S.
  Dollar Denominated Notes

  	
   

  
	
  EXHIBIT
  C

  	
  Form of Note Depository Agreement for Notes
  Denominated in a Currency Other than U.S. Dollars

  	
   

  

 

v

 

INDENTURE,
dated as of January 1, 2004, among SLM STUDENT LOAN TRUST 2004-1, a Delaware
statutory trust (the “Issuer”), CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity but solely as
eligible lender trustee on behalf of the Issuer (the “Eligible Lender
Trustee”), and THE BANK OF NEW YORK, a New York banking corporation, not in its
individual capacity but solely as indenture trustee (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit
of the other party and for the equal and ratable benefit of the holders of the
Issuer’s Student Loan-Backed Notes (the “Notes”) and, after the Notes have been
paid in full, for the benefit of any Cross-Currency Swap Counterparty:

 

GRANTING CLAUSE

 

The Issuer and, with respect to the Trust Student
Loans, the Eligible Lender Trustee hereby Grant to the Indenture Trustee, as
trustee for the benefit of the Noteholders and, subject to the provisions of
Section 11.19, any Cross-Currency Swap Counterparty, effective as of the
Closing Date all of their right, title and interest in and to the following:

 

(a)                                the
Trust Student Loans, and all obligations of the Obligors thereunder including
all moneys accrued and paid thereunder on or after the Cutoff Date and all
guaranties and other rights relating to the Trust Student Loans;

 

(b)                               the
Servicing Agreement, including the right of the Issuer to cause the Servicer to
purchase Trust Student Loans from the Issuer under circumstances described
therein;

 

(c)                                the
Sale Agreement, including the right of the Issuer to cause the Depositor to
repurchase Trust Student Loans from the Issuer under the circumstances
described therein and including the rights of the Depositor under the Purchase
Agreement;

 

(d)                               the
Purchase Agreement, to the extent that the rights of the Depositor thereunder
have been assigned to the Issuer pursuant to the Sale Agreement, including the
right of the Depositor to cause SLMA to repurchase Trust Student Loans from the
Depositor under the circumstances described therein;

 

(e)                                the
Administration Agreement, the Interest Rate Cap Agreement, the Remarketing
Agreement, the Initial Interest Rate Swap Agreement and any other Swap
Agreement to be entered into from time to time and any agreement representing
Eligible Repurchase Obligations between the Trust and an Eligible Repo
Counterparty to be entered into from time to time;

 

(f)                                  each
Guarantee Agreement, including the right of the Issuer to cause the related
Guarantor to make Guarantee Payments in respect of the Trust Student Loans;

 

(g)                               the
Trust Accounts and all funds on deposit from time to time in the Trust
Accounts, including the Reserve Account Initial Deposit and the Capitalized
Interest Account Initial Deposit, if any, and all investments and proceeds
thereof (including all income thereon); and

 

 

(h)                               all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, general intangibles, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the “Collateral”).

 

The foregoing Grant is made in trust to
secure the payment of principal of and interest on, and any other amounts owing
in respect of, the Notes, equally and ratably without prejudice, priority or
distinction, to secure compliance with the provisions of this Indenture and to
secure amounts owing to any Cross-Currency Swap Counterparty under the related
Cross-Currency Swap Agreement subject to the provisions of Section 11.19, all
as provided in this Indenture.

 

The Indenture Trustee, as indenture trustee
on behalf of the Noteholders and each Cross-Currency Swap Counterparty,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required
in this Indenture to the best of its ability to the end that the interests of
the Noteholders and each Cross-Currency Swap Counterparty under the related
Cross-Currency Swap Agreement may be adequately and effectively protected.

 

ARTICLE I

Definitions and Usage

 

SECTION 1.1   Definitions
and Usage.  Except as otherwise
specified herein or as the context may otherwise require, capitalized terms
used but not otherwise defined herein are defined in Appendix A-1 to this
Indenture, which also contains rules as to usage that shall be applicable
herein.

 

SECTION 1.2   Incorporation
by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.  The following TIA terms used
in this Indenture have the following meanings:

 

“Commission” means the Securities and
Exchange Commission.

 

“indenture securities” means the Notes.

 

“indenture security holder” means a
Noteholder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional
trustee” means the Indenture Trustee.

 

2

 

“obligor” on the indenture securities means
the Issuer and any other obligor on the indenture securities.

 

All other TIA terms used in this Indenture
that are defined by the TIA, defined by TIA reference to another statute or
defined by Commission rule have the meaning assigned to them by such
definitions.

 

ARTICLE II

 

The Notes

 

SECTION 2.1   Form.  The Notes, together with the Indenture
Trustee’s certificate of authentication, shall be in substantially the forms
set forth in Exhibit A, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing the Notes, as evidenced by their
execution of the Notes.  Any portion of
the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.

 

The Definitive Notes shall be typewritten,
printed, lithographed or engraved or produced by any combination of these
methods (with or without steel engraved borders), all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.

 

The terms of the Notes set forth in Exhibit A
are part of the terms of this Indenture.

 

Each class of Floating Rate Notes will be
represented by interests in a book-entry note certificate deposited on the
Closing Date with The Bank of New York, as custodian for DTC (the “DTC
Custodian”), and registered in the name of Cede & Co. as initial
nominee for DTC.

 

The Reset Rate Notes denominated in U.S.
Dollars may be offered and sold only to QIBs in reliance on Rule 144A or to a
non-U.S. Person (as defined in Regulation S) outside the United States in
reliance on Regulation S, as applicable. 
On the Closing Date, the entire Outstanding Amount of the Reset Rate
Notes will be represented by interests in a global registered note certificate
(the “U.S. Rule 144A Global Note Certificate”), deposited on the Closing Date
with the DTC Custodian and registered in the name of Cede & Co. as
initial nominee for DTC.  On the Closing
Date, a corresponding Non-U.S. Rule 144A Global Note Certificate (as defined
below) and Regulation S Global Note Certificate (as defined below) for the
Reset Rate Notes will be deposited with the Regulation S Custodian (as defined
below), registered in the name of The Bank of New York Depository (Nominees)
Limited, as initial joint nominee for Euroclear and Clearstream (the “Joint
Nominee”).  Transfers of interest among
the U.S. Rule 144A Global Note Certificate, the Non-U.S. Rule 144A Global Note
Certificate and the Regulation S Global Note Certificate on any date (other
than a Reset Date)when the Reset Rate Notes are then denominated in U.S.
Dollars will be governed by

 

3

 

the usual and
customary rules and regulations applicable to DTC, Euroclear and Clearstream,
as applicable.

 

The Reset Rate Notes denominated in a
currency other than U.S. Dollars may be offered and sold only to QIBs in
reliance on Rule 144A or to a non-U.S. Person (as defined in Regulation S)
outside the United States of America in reliance on Regulation S, as
applicable, and will be represented by interests in either a Rule 144A global
registered note certificate (the “Non-U.S. Rule 144A Global Note Certificate”)
or a Regulation S global registered note certificate (the “Regulation S Global
Note Certificate,” and collectively with the Non-U.S. Rule 144A Global Note
Certificate, the “Non-U.S. Global Note Certificates”).  Each Non-U.S. Global Note Certificate will
be registered in the name of the Joint Nominee, and will be deposited on the
Closing Date with The Bank of New York, acting through its London branch, as
common depositary for Euroclear and Clearstream (the “Regulation S Custodian”
and together with the DTC Custodian, the “Custodian”).  At all times, there will be only one
Non-U.S. Rule 144A Global Note Certificate and one Regulation S Global Note
Certificate for the Reset Rate Notes. 
At all times, the entire Outstanding Amount of the Reset Rate Notes
denominated in a currency other than U.S. Dollars will be allocated between the
corresponding Non-U.S. Rule 144A Global Note Certificate and Regulation S
Global Note Certificate for the Reset Rate Notes.  On the Closing Date, a corresponding U.S. Rule 144A Global Note
Certificate will be deposited with the DTC Custodian and will have an
outstanding principal balance of zero for so long as the Reset Rate Notes are
denominated in a currency other than U.S. Dollars.  On the Closing Date and on any Reset Date when the Reset Rate
Notes are to be denominated in U.S. Dollars during the immediately following
Reset Period, the aggregate outstanding principal balance of the Reset Rate
Notes will be allocated among the three Global Note Certificates, any of which
may, from time to time during the related Reset Period, be reduced to zero or
represent 100%, individually or in the aggregate, of the aggregate outstanding
principal balance of the Reset Rate Notes.

 

SECTION 2.2   Execution,
Authentication and Delivery. 
The Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers.  The signature of
any such Authorized Officer on the Notes may be manual or facsimile.

 

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

 

The Indenture Trustee shall upon Issuer Order
authenticate and deliver Notes for original issue in an aggregate principal
amount of $2,025,274,000.  The aggregate
principal amount of Notes Outstanding at any time may not exceed such amount
except as provided in Section 2.5.  On
each Spread Determination Date, upon receipt of an Issuer Order, the Indenture
Trustee shall deliver a revised Schedule A for the Reset Rate Notes to the
Custodians.

 

Each Note shall be dated the date of its
authentication.  The Floating Rate
Class A Notes shall be issuable as registered notes in minimum
denominations of $10,000 and additional increments of $1,000.  The Class B Notes shall be issuable as
registered Class B Notes in minimum denominations of $100,000 and additional
increments of $1,000.

 

4

 

During any Reset Period when the Reset Rate
Notes are denominated in U.S. Dollars, they shall be issued in minimum
denominations of $250,000, and additional increments of $1.  During any Reset Period when the Reset Rate
Notes are denominated in a currency other than U.S. Dollars, they shall be
issued in minimum denominations of the applicable currency equivalent
(approximately) of $250,000 and additional increments of the applicable
currency equivalent of $1 (which shall be determined by reference to the
exchange rate to be set forth in the related cross-currency swap agreement); provided,
that during any Reset Period when the Reset Rate Notes are denominated in
Pounds Sterling, the Reset Rate Notes shall be issued in minimum denominations
of £100,000 and additional increments of £1; and provided, further, that
during any Reset Period when the Reset Rate Notes are denominated in Euros, the
Reset Rate Notes shall be issued in minimum denominations of €100,000 and
additional increments of €1.

 

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

 

SECTION 2.3   Temporary Notes.  Pending the preparation of Definitive Notes,
the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture determined to be appropriate
by the Responsible Officer of the Issuer executing the temporary Notes, as
evidenced by his or her execution of such temporary Notes.

 

If temporary Notes are issued, the Issuer
will cause Definitive Notes to be prepared without unreasonable delay.  After the preparation of Definitive Notes,
the temporary Notes shall be exchangeable for Definitive Notes upon surrender
of the temporary Notes at the office or agency of the Issuer to be maintained
as provided in Section 3.2, without charge to the Noteholder.  Upon surrender for cancellation of any one
or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
Definitive Notes of authorized denominations. 
Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.

 

SECTION 2.4   Registration;
Registration of Transfer and Exchange.  The Issuer shall cause to be kept a register (the “Note
Register”) in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes.  The
Indenture Trustee shall be “Note Registrar” for the purpose of registering
Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.

 

5

 

If a Person other than the Indenture Trustee
is appointed by the Issuer as Note Registrar, the Issuer shall give the
Indenture Trustee prompt written notice of the appointment of such Note
Registrar and of the location, and any change in the location, of the Note
Register, and the Indenture Trustee shall have the right to inspect the Note
Register at all reasonable times and to obtain copies thereof, and the
Indenture Trustee shall have the right to rely upon a certificate executed on
behalf of the Note Registrar by an Executive Officer thereof as to the names
and addresses of the Noteholders and the principal amounts and number of such
Notes.

 

Upon surrender for registration of transfer
of any Note at the office or agency of the Issuer to be maintained as provided
in Section 3.2 or, with respect to the Reset Rate Notes, to the Note Registrar
or any transfer agent, as applicable, if the requirements of Section 8-401(1)
of the UCC are met, the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, in the
name of the designated transferee or transferees, one or more new Notes in any
authorized denominations and a like aggregate principal amount.

 

On each Reset Date on which either the All
Hold Rate is not applicable or fewer than 100% of the Reset Rate Noteholders
permissibly elect to hold their Reset Rate Notes, the Indenture Trustee shall
allocate the aggregate Outstanding Amount of the Reset Rate Notes, if such
Reset Rate Notes are to be denominated in U.S. Dollars during the immediately
following Reset Period to the U.S. Rule 144A Global Note Certificate and/or the
Non-U.S. Global Note Certificates, as applicable, either of which may from time
to time during the related Reset Period be reduced to zero or represent 100%,
individually or in the aggregate, of the Outstanding Amount of the Reset Rate
Notes.  On any Reset Date when the Reset
Rate Notes are to be denominated in a currency other than U.S. Dollars during
the immediately following Reset Period, the Outstanding Amount of the Reset
Rate Notes shall be allocated entirely to the Non-U.S. Global Note
Certificates, as applicable.  Any
transfer of Reset Rate Notes (other than on a Reset Date) between the related
U.S. Rule 144A Global Note Certificate and the related Non-U.S. Global Note
Certificates is not permitted and any attempt or inadvertent transfer shall be
null and void and of no effect.

 

At the option of the Noteholder, Notes may be
exchanged for other Notes in any authorized denominations and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency.  Whenever any Notes are so
surrendered for exchange, the Issuer shall execute, and the Indenture Trustee
shall authenticate and the Noteholder shall obtain from the Indenture Trustee,
the Notes which the Noteholder making the exchange is entitled to receive.

 

All Notes issued upon any registration of
transfer or exchange of Notes shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Notes surrendered upon such registration of transfer or
exchange.

 

Every Note presented or surrendered for
registration of transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Noteholder thereof or such Noteholder’s
attorney duly authorized in writing, with such signature guaranteed by an
“eligible guarantor institution” meeting the requirements of the Note
Registrar, which requirements include membership or

 

6

 

participation
in Securities Transfer Agent’s Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.

 

No service charge shall be made to a
Noteholder for any registration of transfer or exchange of Notes, but the
Indenture Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes, other than exchanges pursuant to
Section 2.3 or 9.6 not involving any transfer.

 

The preceding provisions of this Section
notwithstanding, the Issuer shall not be required to make and the Note
Registrar need not register transfers or exchanges of Notes selected for
redemption or of any Note for a period of 15 days preceding the due date for
any payment with respect to the Note.

 

SECTION 2.5   Mutilated,
Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Issuer and the Indenture Trustee such security or indemnity as may be required
by each of them to hold the Issuer and the Indenture Trustee harmless, then, in
the absence of notice to the Issuer, the Note Registrar or the Indenture
Trustee that such Note has been acquired by a bona fide purchaser, and provided
that the requirements of Section 8-405 of the UCC are met, the Issuer shall
execute and upon its request the Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within 15 days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof.  If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee
in connection therewith.

 

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

 

Every replacement Note issued pursuant to
this Section in replacement of any mutilated, destroyed, lost or stolen Note
shall constitute an original additional contractual obligation of the Issuer,
whether or not the mutilated, destroyed, lost or stolen Note shall be at

 

7

 

any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.

 

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

 

SECTION 2.6   Persons Deemed
Owner.  Prior to due presentment
for registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of, interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Issuer, the Indenture Trustee nor any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the
contrary.

 

SECTION 2.7   Payment
of Principal and Interest; Note Interest Shortfall.  (a)  The Floating Rate Notes shall
accrue interest as provided in such Floating Rate Notes, which shall be
substantially in the form of Exhibits A-1, A-2, A-3, A-4, A-5 and A-9 and
the Reset Rate Notes shall accrue interest as provided in such Reset Rate
Notes, which shall be substantially in the form of Exhibit A-6, A-7 or A-8, and
such interest shall be payable on each applicable Distribution Date as
specified therein, subject to Section 3.1. 
Any installment of interest or principal, if any, payable on any Note
which is punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one
or more Predecessor Notes) is registered on the applicable Record Date by check
mailed first-class, postage prepaid to such Person’s address as it appears on
the Note Register on such Record Date, except that, unless Definitive Notes
have been issued pursuant to Section 2.12, with respect to Notes
registered on the Record Date in the name of the nominee of the applicable
Clearing Agency (initially, such nominee to be Cede & Co.), as nominee for
DTC, for the Notes, payment shall be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Distribution Date or on the Note Final Maturity Date for such Note which shall
be payable as provided below.  The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.3.

 

(b)                               The
principal amount of each class of Floating Rate Notes shall be payable on each
applicable Distribution Date as provided in the forms of Notes set forth in
Exhibits A-1, A-2, A-3, A-4, A-5 and A-9 and the principal amount of the
Reset Rate Notes shall be payable on each applicable Distribution Date as set
forth in Exhibit A-6, A-7 or A-8, and in Appendix A-2 to this Indenture.  Notwithstanding the foregoing, the entire
unpaid principal amount of each class of the Notes shall be due and payable, if
not previously paid, on the Note Final Maturity Date for such class of Notes
and on the date on which an Event of Default shall have occurred and be
continuing if the Indenture Trustee or the Noteholders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2.  All principal
payments on the Notes shall be made pro rata to the specific class of
Noteholders entitled thereto.  The
Indenture Trustee shall notify the Person in whose name a Note is registered at
the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the

 

8

 

final installment of principal of and interest
on such Note will be paid.  Such notice
shall be mailed or transmitted by facsimile prior to such final Distribution
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of
Notes shall be mailed to Noteholders as provided in Section 10.2.

 

(c)                                If
the Issuer defaults in a payment of interest at the applicable Note Rate on the
Notes, the Issuer shall pay the resulting Note Interest Shortfall on the
following Distribution Date as provided in the Administration Agreement.

 

SECTION 2.8   Cancellation.  All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever
and all Notes so delivered shall be promptly cancelled by the Indenture
Trustee.  No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section,
except as expressly permitted by this Indenture.  All canceled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time, unless the Issuer shall direct by an Issuer Order that they
be returned to it and so long as such Issuer Order is timely and the Notes have
not been previously disposed of by the Indenture Trustee.

 

SECTION 2.9   Release of
Collateral.   Subject to Section
11.1 and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officers’ Certificate of the Issuer, an Opinion of Counsel
and Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) or
an Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates.

 

SECTION 2.10   Book-Entry Notes.  The Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to the applicable initial Clearing Agency by the Issuer, or by the
Indenture Trustee on behalf of the Issuer. 
Such Notes shall initially be registered on the Note Register in the
name of the nominee of each initial Clearing Agency, and no Note Owner shall
receive a definitive, fully registered note (a “Definitive Note”) representing
such Note Owner’s interest in such Note, except as provided in Section
2.12.  Unless and until Definitive Notes
have been issued to Note Owners pursuant to Section 2.12:

 

(i)                                                           the
provisions of this Section shall be in full force and effect;

 

(ii)                                                        the
Note Registrar and the Indenture Trustee, and their respective directors,
officers, employees and agents, may deal with the applicable Clearing Agency
for all purposes (including the payment of principal of and interest and other
amounts on the Notes) as the authorized representative of the Note Owners;

 

9

 

(iii)                                                     to
the extent that the provisions of this Section conflict with any other
provisions of this Indenture, the provisions of this Section shall control;

 

(iv)                                                    the
rights of Note Owners shall be exercised only through the applicable Clearing
Agency and shall be limited to those established by law and agreements between
such Note Owners and the applicable Clearing Agency and/or the applicable
Clearing Agency Participants pursuant to the Note Depository Agreements; and
unless and until Definitive Notes are issued pursuant to Section 2.12, the
applicable initial Clearing Agency will make book-entry transfers among the
applicable Clearing Agency Participants and receive and transmit payments of
principal of and interest and other amounts on the Notes to such applicable
Clearing Agency Participants;

 

(v)                                                       whenever
this Indenture requires or permits actions to be taken based upon instructions
or directions of Noteholders of Notes evidencing a specified percentage of the
Outstanding Amount of the Notes, the applicable Clearing Agency shall be deemed
to represent such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or applicable Clearing Agency
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to the
Indenture Trustee; and

 

(vi)                                                    upon
acquisition or transfer of a beneficial interest in any Book-Entry Note by, for
or with the assets of, an employee benefit plan or other retirement arrangement
(“Plan”), such Note Owner shall be deemed to have represented that such
acquisition or purchase will not constitute or otherwise result in: (i) in the
case of a Plan subject to Section 406 of ERISA or Section 4975 of the Code, a
non-exempt prohibited transaction in violation of Section 406 of ERISA or
Section 4975 of the Code which is not covered by a class or other applicable
exemption and (ii) in the case of a Plan subject to a substantially similar
federal, state, local or foreign law (“Similar Law”), a non-exempt violation of
such substantially Similar Law.  Any
transfer found to have been made in violation of such deemed representation
shall be null and void and of no effect.

 

SECTION 2.11   Notices
to Clearing Agency.  Whenever a
notice or other communication is required under this Indenture to be given to
Noteholders, unless and until Definitive Notes shall have been issued to Note
Owners pursuant to Section 2.12, the Indenture Trustee shall give all such
notices and communications specified herein to the applicable Clearing Agency.

 

SECTION 2.12   Definitive Notes.  If (i) the Administrator advises the
Indenture Trustee in writing that a Clearing Agency (a) is closed for
business for a continuous period of 14 days (other than by reason of holiday,
statutory or otherwise), (b) announces an intention to cease business
permanently (or does so and no alternative clearing system acceptable to the Indenture
Trustee is then available), or (c) at any time, is unwilling or unable to
continue as, or ceases to be, a clearing agency registered under all applicable
laws, and a successor clearing agency which is registered as a clearing agency
under all applicable laws is not appointed by the Administrator within 90 days
of such event, (ii) the Administrator at its option advises the Indenture
Trustee in writing that it elects to terminate the book-entry system through
that Clearing Agency or (iii) after the occurrence of an Event of Default, a
Servicer Default or an

 

10

 

Administrator Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the applicable Notes advise the applicable Clearing
Agency (which shall then notify the Indenture Trustee) in writing that the
continuation of a book-entry system through such Clearing Agency is no longer
in the best interests of such Note Owners, then the Indenture Trustee shall
cause such Clearing Agency to notify all Note Owners cleared, through such
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same.  Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by a Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
such Clearing Agency, which shall include, without limitation, the identity and
payment instructions for all Noteholders of the applicable Notes.  None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions.  Upon the issuance of
Definitive Notes, the Indenture Trustee shall recognize the holders of the
Definitive Notes as Noteholders.

 

Upon acquisition or transfer of a Definitive
Note by, for or with the assets of, a Plan, such Note Owner shall be deemed to
have represented that such acquisition or purchase will not constitute or
otherwise result in: (i) in the case of a Plan subject to Section 406 of ERISA
or Section 4975 of the Code, a non-exempt prohibited transaction in violation
of Section 406 of ERISA or Section 4975 of the Code which is not covered by a
class or other applicable exemption and (ii) in the case of a Plan subject to a
substantially Similar Law, a non-exempt violation of such substantially Similar
Law.  Any transfer found to have been
made in violation of such deemed representation shall be null and void and of
no effect.

 

SECTION 2.13   Transfer
Restrictions.  Each Noteholder
and Note Owner of a Reset Rate Note shall be subject to the restrictions on
transfer thereof set forth in Appendix A-3 to this Indenture.

 

ARTICLE III

Covenants

 

SECTION 3.1   Payment
to Noteholders and each Swap Counterparty.  The Issuer shall duly and punctually pay the
principal and interest, if any, with respect to the Notes in accordance with
the terms of the Notes and this Indenture and shall duly and punctually pay
amounts, if any, owing to each Swap Counterparty in accordance with the terms
of this Indenture and the related Swap Agreement.  Without limiting the foregoing, the Issuer shall cause to be
distributed to Noteholders and each Swap Counterparty in accordance with the
Administration Agreement that portion of the amounts on deposit in the Trust
Accounts on a Distribution Date or with respect to any Swap Counterparty
amounts on deposit in the relevant Trust Accounts on the date such payment is
due under the related Swap Agreement, which the Noteholders and any Swap
Counterparty are entitled to receive pursuant to Sections 2.7 and 2.8 of the
Administration Agreement.  Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.

 

11

 

SECTION 3.2   Maintenance
of Office or Agency.  The Issuer
shall maintain in the Borough of Manhattan, The City of New York and in
Luxembourg, an office or agency where Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served.  The Issuer hereby initially appoints the
Indenture Trustee to serve as its agent for the foregoing purposes.  The Issuer shall give prompt written notice
to the Indenture Trustee of the location, and of any change in the location, of
any such office or agency.  If at any
time the Issuer shall fail to maintain any such office or agency or shall fail
to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and
the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.

 

SECTION 3.3   Money
for Payments to be Held in Trust. 
As provided in Section 8.2(a) and (b), all payments of amounts due and
payable with respect to any Notes or any Swap Agreement that are to be made
from amounts distributed from the Collection Account or any other Trust Account
pursuant to Sections 2.7 and 2.8 of the Administration Agreement shall be made
on behalf of the Issuer by the Indenture Trustee or by another Paying Agent,
and no amounts so distributed from the Collection Account for payments to
Noteholders or any Swap Counterparty shall be paid over to the Issuer except as
provided in this Section.

 

On or before the Business Day next preceding
each Distribution Date and Redemption Date, the Issuer shall distribute or
cause to be distributed to the Indenture Trustee (or any other Paying Agent) an
aggregate sum sufficient to pay the amounts then becoming due under the Notes
or any Swap Agreement, such sum to be held in trust for the benefit of the
Persons entitled thereto and (unless the Paying Agent is the Indenture Trustee)
shall promptly notify the Indenture Trustee of its action or failure so to act.

 

The Issuer shall cause each Paying Agent
other than the Indenture Trustee to execute and deliver to the Indenture
Trustee an instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so
agrees), subject to the provisions of this Section, that such Paying Agent
will:

 

(i)                                                           hold
all sums held by it for the payment of amounts due with respect to the Notes or
any Swap Agreement in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and pay such sums to such Persons as herein provided;

 

(ii)                                                        give
the Indenture Trustee notice of any default by the Issuer of which it has
actual knowledge (or any other obligor upon the Notes) in the making of any
payment required to be made with respect to the Notes or any Swap Agreement;

 

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

 

(iv)                                                    immediately
resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums
held by it in trust for the payments due under the Notes or any Swap

 

12

 

Agreement if at any time it ceases to meet
the standards required to be met by a Paying Agent at the time of its
appointment; and

 

(v)                                                       comply
with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith.

 

The Issuer may at any time, for the purpose
of obtaining the satisfaction and discharge of this Indenture or for any other
purpose, by Issuer Order direct any Paying Agent to pay to the Indenture
Trustee all sums held in trust by such Paying Agent, such sums to be held by
the Indenture Trustee upon the same trusts as those upon which the sums were
held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.

 

Subject to applicable laws with respect to
escheat of funds, any money held by the Indenture Trustee or any Paying Agent
in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer on Issuer Request
or if the Issuer has been terminated to the Depositor upon its written request;
and the Noteholder thereof shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Issuer), and all liability of the Indenture Trustee or
such Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York and in Luxembourg, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer.  The Indenture Trustee shall also adopt and employ, at the expense
of the Issuer, any other reasonable means of notification of such repayment
(including mailing notice of such repayment to Noteholders whose Notes have
been called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Noteholder).

 

SECTION 3.4   Existence.  The Issuer shall keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.

 

13

 

SECTION 3.5   Protection
of Indenture Trust Estate.  The
Issuer will from time to time execute and deliver all such supplements and
amendments hereto, all such financing statements and continuation statements
and will take such other action necessary or advisable to:

 

(i)                                                           maintain
or preserve the lien and security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;

 

(ii)                                                        perfect,
publish notice of or protect the validity of any grant made or to be made by
this Indenture;

 

(iii)                                                     enforce
any of the Collateral; or

 

(iv)                                                    preserve
and defend title to the Indenture Trust Estate and the rights of the Indenture
Trustee, the Noteholders and each Swap Counterparty in such Indenture Trust
Estate against the claims of all persons and parties.

 

The Issuer hereby designates the Indenture
Trustee its agent and attorney-in-fact to execute any financing statement,
continuation statement or other instrument required to be executed pursuant to
this Section.

 

SECTION 3.6   Opinions
as to Indenture Trust Estate. 
(a)  On the Closing Date, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture as is necessary to perfect and make effective the lien
and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.

 

(b)                               On
or before December 31 in each calendar year, beginning in 2004, the Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect
to the recording, filing, re-recording and refiling of this Indenture and any
indentures supplemental hereto as is necessary to maintain the lien and
security interest created by this Indenture and relating the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describe
the recording, filing, recording and refiling of this Indenture and any
indentures supplemental hereto that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until December
31 in the following calendar year.

 

SECTION 3.7   Performance
of Obligations; Servicing of Trust Student Loans.  (a)  The Issuer will not take any
action and will use its best efforts not to permit any action to be taken by
others that would release any Person from any of such Person’s material
covenants or obligations under any instrument or agreement included in the
Indenture Trust Estate or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly
provided in this Indenture, any other Basic Document or such other instrument
or agreement.

 

(b)                               The
Issuer may contract with other Persons to assist it in performing its duties
under this Indenture, and any performance of such duties by a Person identified
to the Indenture

 

14

 

Trustee in an Officers’ Certificate of the
Issuer shall be deemed to be action taken by the Issuer; provided, however,
the Issuer shall not be liable for any acts of Persons with whom the Issuer has
contracted with reasonable care. 
Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.  The Issuer shall give
written notice to the Indenture Trustee and each Rating Agency of any such
contract with any other Person.

 

(c)                                The
Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the other Basic Documents and the
instruments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements prepared by the Issuer and required to be filed by the terms of this
Indenture and the Administration Agreement in accordance with and within the
time periods provided for herein and therein. 
Except as otherwise expressly provided therein, the Issuer shall not
waive, amend, modify, supplement or terminate any Basic Document or any
provision thereof without the consent of the Indenture Trustee or the
Noteholders of at least a majority of the Outstanding Amount of the Notes.  The Issuer shall give written notice to each
Rating Agency of any such waiver, amendment, modification, supplement or
termination.

 

(d)                               If
a Responsible Officer of the Issuer shall have knowledge of the occurrence of a
Servicer Default or an Administrator Default under the Servicing Agreement or
the Administration Agreement, respectively, the Issuer shall promptly notify
the Indenture Trustee and the Rating Agencies thereof, and shall specify in
such notice the action, if any, the Issuer is taking with respect to such
default.  If a Servicer Default shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Servicing Agreement, or an Administrator Default shall
arise from the failure of the Administrator to perform any of its duties or
obligations under the Administration Agreement, as the case may be, with
respect to the Trust Student Loans, the Issuer shall take all reasonable steps
available to it to enforce its rights under the Basic Documents in respect of
such failure.

 

(e)                                As
promptly as possible after the giving of notice of termination to the Servicer
of the Servicer’s rights and powers, pursuant to Section 5.1 of the Servicing
Agreement, or to the Administrator of the Administrator’s rights and powers,
pursuant to Section 5.1 of the Administration Agreement, the Issuer shall appoint
a successor servicer (the “Successor Servicer”) or a successor administrator
(the “Successor Administrator”), respectively, and such Successor Servicer or
Successor Administrator, as the case may be, shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee.  In the event that a Successor Servicer or
Successor Administrator has not been appointed and accepted its appointment at
the time when the Servicer or Administrator, as the case may be, ceases to act
as Servicer or Administrator, respectively, the Indenture Trustee without
further action shall automatically be appointed the Successor Servicer or
Successor Administrator, as the case may be. 
The Indenture Trustee may resign as the Successor Servicer or the Successor
Administrator by giving written notice of resignation to the Issuer and in such
event will be released from such duties and obligations, such release not to be
effective until the date a new servicer or a new administrator enters into an
agreement with the Issuer as provided below; provided, however,
that nothing herein shall require or permit the Indenture Trustee to act as
Servicer, or otherwise service the Trust Student Loans, in violation of the
Higher Education Act.  Upon delivery of
any such notice to the Issuer, the Issuer shall obtain a new servicer as the
Successor Servicer under

 

15

 

the Servicing Agreement or a new
administrator as the Successor Administrator under the Administration Agreement,
as the case may be.  Any Successor
Servicer or Successor Administrator, other than the Indenture Trustee, shall
(i) be an established institution (A) that satisfies any requirements of the
Higher Education Act applicable to servicers and (B) whose regular business
includes the servicing or administration of student loans and (ii) enter into a
servicing agreement or an administration agreement, respectively, with the
Issuer having substantially the same provisions as the provisions of the
Servicing Agreement and the Administration Agreement, as applicable.  If within 30 days after the delivery of the
notice referred to above, the Issuer shall not have obtained such a new
servicer or new administrator, as the case may be, the Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer or Successor Administrator; provided, however,
that such right to appoint or to petition for the appointment of any such
successor shall in no event relieve the Indenture Trustee from any obligations
otherwise imposed on it under the Basic Documents until such successor has in
fact assumed such appointment.  In
connection with any such appointment, the Indenture Trustee may make such arrangements
for the compensation of such successor as it and such successor shall agree,
subject to the limitations set forth below and in the Servicing Agreement or
Administration Agreement, as applicable, and in accordance with Section 5.2 of
the Servicing Agreement and Section 5.2 of the Administration Agreement, the
Issuer shall enter into an agreement with such successor for the servicing or
administration of the Trust Student Loans (such agreement to be in form and
substance satisfactory to the Indenture Trustee).  If the Indenture Trustee shall succeed as provided herein to the
Servicer’s duties as Servicer with respect to the Trust Student Loans, or the
Administrator’s duties with respect to the Issuer and the Trust Student Loans,
as the case may be, it shall do so in its individual capacity and not in its
capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer or the Administrator, as the case may be, and the
servicing or administration of the Trust Student Loans.  In case the Indenture Trustee shall become
successor to the Servicer or the Administrator, the Indenture Trustee shall be
entitled to appoint as Servicer or as Administrator, as the case may be, any
one of its Affiliates, provided that such appointment shall not affect or alter
in any way the liability of the Indenture Trustee as Successor Servicer or
Successor Administrator, respectively, in accordance with the terms hereof.

 

(f)                                  Upon
any termination of the Servicer’s rights and powers pursuant to the Servicing
Agreement, or any termination of the Administrator’s rights and powers pursuant
to the Administration Agreement, as the case may be, the Issuer shall promptly
notify the Indenture Trustee and each Rating Agency.  As soon as a Successor Servicer or a Successor Administrator is
appointed, the Issuer shall notify the Indenture Trustee and each Rating Agency
of such appointment, specifying in such notice the name and address of such
Successor Servicer or such Successor Administrator.

 

(g)                               Without
derogating from the absolute nature of the assignment granted to the Indenture
Trustee under this Indenture or the rights of the Indenture Trustee hereunder,
the Issuer agrees that it will not, without the prior written consent of the
Indenture Trustee or the Noteholders of at least a majority in Outstanding
Amount of the Notes, amend, modify, waive, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral or the Basic Documents, except to the
extent otherwise provided in the Basic Documents, or waive timely performance
or

 

16

 

observance by the Servicer, the
Administrator, the Depositor, the holder of the Excess Distribution
Certificate, SLMA, the Issuer or the Eligible Lender Trustee or any Swap
Counterparty under the Basic Documents; provided, however, that
no such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders or any Swap Counterparty, or (ii) reduce the
aforesaid percentage of the Notes which are required to consent to any such
amendment, without the consent of the Noteholders of all the Outstanding
Notes.  If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Noteholders, the Issuer shall give written notice thereof to
each Rating Agency and agrees, promptly following a request by the Indenture
Trustee to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.

 

SECTION 3.8   Negative
Covenants.  So long as any Notes
are Outstanding, the Issuer shall not:

 

(i)                                                           except
as expressly permitted by this Indenture or any other Basic Document, sell,
transfer, exchange or otherwise dispose of any of the properties or assets of
the Issuer, including those included in the Indenture Trust Estate, unless
directed to do so by the Indenture Trustee;

 

(ii)                                                        claim
any credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments
under the Code or applicable state law) or assert any claim against any present
or former Noteholder by reason of the payment of the taxes levied or assessed
upon any part of the Indenture Trust Estate;

 

(iii)                                                     (A)
permit the validity or effectiveness of this Indenture to be impaired, or
permit the lien of this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this Indenture except
as may be expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than the lien of
this Indenture) to be created on or extend to or otherwise arise upon or burden
the Indenture Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens and other liens that arise by operation
of law, and other than as expressly permitted by the Basic Documents) or (C)
permit the lien of this Indenture not to constitute a valid first priority
(other than with respect to any such tax or other lien) security interest in
the Indenture Trust Estate; or

 

(iv)                                                    enter
into any amendment to the Interest Rate Cap Agreement or any Swap Agreement to
cure any ambiguity in, or to correct or supplement any provision of the
Interest Rate Cap Agreement or any Swap Agreement, unless the Issuer has
determined, and the Indenture Trustee has agreed in writing at the written
direction of the Issuer, that the amendment will not materially adversely
affect the interests of the Noteholders and provided that the Issuer has
provided reasonable notice to the Rating Agencies of such amendment and the
Rating Agency Condition is satisfied.

 

17

 

SECTION 3.9   Annual
Statement as to Compliance.  The
Issuer will deliver to the Indenture Trustee and each Rating Agency, within 120
days after the end of each fiscal year of the Issuer (commencing with the
fiscal year ending December 31, 2004), an Officers’ Certificate of the Issuer
stating that:

 

(i)                                                           a
review of the activities of the Issuer during such year and of performance
under this Indenture has been made under such Authorized Officers’ supervision;
and

 

(ii)                                                        to
the best of such Authorized Officers’ knowledge, based on such review, the
Issuer has complied with all conditions and covenants under this Indenture
throughout such year, or, if there has been a default in the compliance of any
such condition or covenant, specifying each such default known to such
Authorized Officers and the nature and status thereof.

 

SECTION 3.10   Issuer
May Consolidate, etc., Only on Certain Terms.

 

(a)                                The
Issuer shall not consolidate or merge with or into any other Person, unless:

 

(i)                                                           the
Person (if other than the Issuer) formed by or surviving such consolidation or
merger shall be a Person organized and existing under the laws of the United
States of America or any State and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of, and interest, if any, on all Notes and the performance or observance
of every agreement and covenant of this Indenture and the other Basic Documents
on the part of the Issuer to be performed or observed, all as provided herein;

 

(ii)                                                        immediately
after giving effect to such transaction, no Default shall have occurred and be
continuing;

 

(iii)                                                     the
Rating Agency Condition shall have been satisfied with respect to such
transaction;

 

(iv)                                                    the
Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee) to the effect that such transaction
will not have any material adverse Federal or Delaware state tax consequence to
the Issuer or any Noteholder or any Swap Counterparty;

 

(v)                                                       any
action as is necessary to maintain the lien and security interest created by
this Indenture shall have been taken; and

 

(vi)                                                    the
Issuer shall have delivered to the Indenture Trustee an Officers’ Certificate
of the Issuer and an Opinion of Counsel each stating that such consolidation or
merger and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange Act).

 

18

 

(b)                               The
Issuer shall not convey or transfer all or substantially all of its properties
or assets, including those included in the Indenture Trust Estate, to any
Person, unless:

 

(i)                                                           the
Person that acquires by conveyance or transfer the properties and assets of the
Issuer the conveyance or transfer of which is hereby restricted shall (A) be a
United States citizen or a Person organized and existing under the laws of the
United States of America or any State, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of, and interest, if any, on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of the
Issuer to be performed or observed, all as provided herein, (C) expressly agree
by means of such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights of
Noteholders and any Cross-Currency Swap Counterparty, (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify, defend
and hold harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E) expressly
agree by means of such supplemental indenture that such Person (or if a group
of Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange Act in
connection with the Notes;

 

(ii)                                                        immediately
after giving effect to such transaction, no Default shall have occurred and be
continuing;

 

(iii)                                                     the
Rating Agency Condition shall have been satisfied with respect to such
transaction;

 

(iv)                                                    the
Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee) to the effect that such transaction
will not have any material adverse Federal or Delaware state tax consequence to
the Issuer or any Noteholder;

 

(v)                                                       any
action as is necessary to maintain the lien and security interest created by
this Indenture shall have been taken; and

 

(vi)                                                    the
Issuer shall have delivered to the Indenture Trustee an Officers’ Certificate
of the Issuer and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange Act).

 

SECTION 3.11   Successor
or Transferee. 
(a)  Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.

 

(b)                               Upon
a conveyance or transfer of all the assets and properties of the Issuer pursuant
to Section 3.10(b), SLM Student Loan Trust 2004-1 will be released from every
covenant and agreement of this Indenture to be observed or performed on the
part of the Issuer

 

19

 

with respect to the Notes immediately upon
the delivery by the Issuer of written notice to the Indenture Trustee stating
that SLM Student Loan Trust 2004-1 is to be so released.

 

SECTION 3.12   No Other
Business.  The Issuer shall not
engage in any business other than financing (including entering into Swap
Agreements from time to time), purchasing, owning, selling and managing the
Trust Student Loans and the other assets of the Issuer and related proceeds in
the manner contemplated by this Indenture and the other Basic Documents and
activities incidental thereto.

 

SECTION 3.13   No Borrowing.  The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.

 

SECTION 3.14   Obligations of Servicer and
Administrator.  The
Issuer shall cause the Servicer to comply with Sections 3.1, 3.2 and 3.3 of the
Administration Agreement and Section 3.7 of the Servicing Agreement and the
Administrator to comply with Sections 2.11, 3.1, 3.2 and 3.3 of the Administration
Agreement.

 

SECTION 3.15   Guarantees,
Loans, Advances and Other Liabilities.   Except as contemplated by this Indenture and the other Basic
Documents, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another’s payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.

 

SECTION 3.16   Capital
Expenditures.  The Issuer shall
not make any expenditure (by long-term or operating lease or otherwise) for
capital assets (either realty or personalty).

 

SECTION 3.17   Restricted
Payments.  The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Eligible Lender Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest or security in or of the Issuer or to the Servicer or the
Administrator, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however,
that the Issuer may make, or cause to be made, distributions to the Servicer,
the Eligible Lender Trustee, the Indenture Trustee, the Noteholders, any Swap
Counterparty, any Remarketing Agent, any Swap Agent, the Administrator, the
Depositor and the holder of the Excess Distribution Certificate as contemplated
by, and to the extent funds are available for such purpose under, this
Indenture and the other Basic Documents. 
The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the other Basic Documents.

 

20

 

SECTION 3.18   Notice of
Events of Default.  The Issuer
shall give the Indenture Trustee, the Rating Agencies and each Swap
Counterparty prompt written notice of each Event of Default hereunder and each
default on the part of Depositor of its obligations under the Sale Agreement,
SLMA of its obligations under the Purchase Agreement, the Servicer of its
obligations under the Servicing Agreement, or the Administrator of its
obligations under the Administration Agreement.  In addition, the Issuer shall deliver to the Indenture Trustee,
each Rating Agency and each Swap Counterparty, within five days after the
occurrence thereof, written notice in the form of an Officers’ Certificate of
the Issuer of any event which with the giving of notice and the lapse of time
would become an Event of Default under Section 5.1(iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.

 

SECTION 3.19   Further
Instruments and Acts.  Upon
request of the Indenture Trustee, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.

 

ARTICLE IV

Satisfaction and Discharge

 

SECTION 4.1   Satisfaction
and Discharge of Indenture. 
This Indenture shall cease to be of further effect with respect to the
Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations
and immunities of the Indenture Trustee hereunder (including, without
limitation, the rights of the Indenture Trustee under Section 6.7 and the
obligations of the Indenture Trustee under Section 4.2) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when:

 

(a)                                either

 

(1)                                  all
Notes theretofore authenticated and delivered (other than (i) Notes that have
been destroyed, lost or stolen and that have been replaced or paid as provided
in Section 2.5 and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or

 

(2)                                  all
Notes not theretofore delivered to the Indenture Trustee for cancellation

 

(i)                                     have
become due and payable,

 

(ii)                                  will
become due and payable at their respective Note Final Maturity Date, within one
year, or

 

21

 

(iii)                               are
to be called for redemption within one year under arrangements satisfactory to
the Indenture Trustee for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the
case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or direct obligations of
or obligations guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Indenture Trustee for cancellation when due to
the Note Final Maturity Date;

 

(b)                               the
Issuer has paid or caused to be paid all other sums payable hereunder by the
Issuer; and

 

(c)                                the
Issuer has delivered to the Indenture Trustee an Officers’ Certificate of the
Issuer, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.1(a) and,
subject to Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

 

SECTION 4.2   Application
of Trust Money.  All moneys
deposited with the Indenture Trustee pursuant to Section 4.1 hereof shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying
Agent, as the Indenture Trustee may determine, to the Noteholders of the
particular Notes or to any Swap Counterparty, as applicable, for the payment or
redemption of which such moneys have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
moneys need not be segregated from other funds except to the extent required
herein or in the Administration Agreement or required by law.

 

SECTION 4.3   Repayment
of Moneys Held by Paying Agent.  
In connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all moneys then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Paying Agent shall
be released from all further liability with respect to such moneys.

 

SECTION 4.4   Auction
of Trust Student Loans.  Any
Trust Student Loans remaining in the Trust as of the later of (a) the end
of Collection Period for the January 2009 Distribution Date or (b) the end of
the first Collection Period when the Pool Balance is equal to 10% or less of
the initial Pool Balance three Business Days prior to such Distribution Date
(the “Trust Auction Date”) shall be offered for sale by the Indenture Trustee
unless the Servicer has exercised its option to purchase the Trust Estate as
described in Section 6.1(a) of the Administration Agreement with respect to
such Distribution Date.  The Servicer
will be deemed to have waived such option if it fails to notify the Eligible
Lender Trustee and the Indenture Trustee of its exercise thereof in writing
prior to the Indenture Trustee’s acceptance of a bid to purchase such Trust
Student Loans; provided, however, that there shall be no such offer
for sale if the Indenture Trustee fails to provide notice to the Servicer in
accordance with this Section 4.4.

 

22

 

The Indenture Trustee shall provide written
notice to the Servicer of any such offer for sale at least 5 Business Days in
advance of the Trust Auction Date.  The
Indenture Trustee shall permit the Servicer or any of its Affiliates including
SLMA and the Servicer to offer bids only if the Pool Balance as of the
applicable Trust Auction Date is equal to 10% or less of the Initial Pool
Balance and such bid does not exceed the fair market value of the Trust Student
Loans as of the Trust Auction Date.  If
at least two bids are received, the Indenture Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids.  The Indenture Trustee shall accept the highest of such remaining
bids if it is equal to or in excess of both the Minimum Purchase Amount and the
fair market value of such Trust Student Loans as of the end of the Collection
Period immediately preceding the Trust Auction Date.  If at least two bids are not received or the highest bid after
the resolicitation process is completed is not equal to or in excess of the
higher of the Minimum Purchase Amount and the fair market value of the Trust
Student Loans, the Indenture Trustee shall not consummate such sale.  The Indenture Trustee may consult, and, at
the direction of the Depositor, shall consult, with a financial advisor,
including an Initial Purchaser of the Notes or the Administrator, to determine
if the fair market value of the Trust Student Loans has been offered.  The proceeds of any such sale will be paid
at the time set forth in Section 2.6 of the Administration Agreement and
applied in the order of priority set forth in Section 5.4(b).  If the sale is not consummated in accordance
with the foregoing, the Indenture Trustee may, but shall not be under any obligation
to, solicit bids for sale of the Trust Student Loans with respect to future
Distribution Dates upon terms similar to those described above, including the
Servicer’s waiver of its option to purchase the Trust Estate in accordance with
Section 6.1(a) of the Administration Agreement with respect to each such future
Distribution Date.

 

ARTICLE V

Remedies

 

SECTION 5.1   Events of Default.  “Event of Default,” wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

 

(i)                                                           default
in the payment of any interest on any Note when the same becomes due and
payable, and such default shall continue for a period of five days; or

 

(ii)                                                        default
in the payment of the principal of any Note when the same becomes due and
payable on the related Note Final Maturity Date; or

 

(iii)                                                     default
in the observance or performance of any covenant or agreement of the Issuer
made in this Indenture (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section specifically
dealt with), or any representation or warranty of the Issuer made in this
Indenture or in any certificate or other writing having been incorrect in any
material respect as of the time when made, such default or breach having a
material adverse effect on the holders of the Notes, and such default or breach
shall continue or not be cured, or the circumstance or condition in respect of
which such

 

23

 

misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days
after there shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by
the Noteholders of at least 25% of the Outstanding Amount of the Notes, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of Default
hereunder; or

 

(iv)                                                    the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Issuer or any substantial part of the Indenture
Trust Estate in an involuntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the Issuer’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or

 

(v)                                                       the
commencement by the Issuer 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 the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Indenture Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing.

 

SECTION 5.2   Acceleration
of Maturity; Rescission and Annulment.  If an Event of Default should occur and be continuing, then and
in every such case the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes may declare all the
Notes to be immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable, subject, however, to Section 5.4 of this
Indenture.

 

At any time after such declaration of
acceleration of maturity has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Noteholders of Notes representing a
majority of the Outstanding Amount of the Notes, by written notice to the
Issuer and the Indenture Trustee, may rescind and annul such declaration and
its consequences if:

 

(i)                                                           the
Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
pay:

 

(a)                                  all
payments of principal of and interest on all Notes and all other amounts that
would then be due hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and

 

24

 

(b)                                 all
sums paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel; and

 

(ii)                                                        all
Events of Default, other than the nonpayment of the principal of the Notes that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.

 

No such rescission shall affect any
subsequent default or impair any right consequent thereto.

 

SECTION 5.3   Collection
of Indebtedness and Suits for Enforcement by Indenture Trustee.  The Issuer covenants that if (i) default is
made in the payment of any interest on any Note when the same becomes due and
payable, and such default continues for a period of five days, or (ii) default
is made in the payment of the principal of any Note when the same becomes due
and payable at the related Note Final Maturity Date, the Issuer shall, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Noteholders,
the whole amount then due and payable on such Notes for principal and interest,
with interest upon the overdue principal, and, to the extent payment at such
rate of interest shall be legally enforceable, upon overdue installments of
interest, at the rate specified in Section 2.7 and in addition thereto such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.

 

(a)                                In
case the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, may
institute a Proceeding for the collection of the sums so due and unpaid, and
may prosecute such Proceeding to judgment or final decree, and may enforce the
same against the Issuer or other obligor upon such Notes and collect in the
manner provided by law out of the property of the Issuer or other obligor upon
such Notes, wherever situated, the moneys adjudged or decreed to be payable.

 

(b)                               If
an Event of Default occurs and is continuing, the Indenture Trustee may, as
more particularly provided in Section 5.4, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders and any
Cross-Currency Swap Counterparty by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.

 

(c)                                In
case there shall be pending, relative to the Issuer or any other obligor upon
the Notes or any Person having or claiming an ownership interest in the
Indenture Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other, comparable judicial Proceedings
relative to the Issuer or other obligor upon 

 

25

 

the Notes, or to the creditors or property of
the Issuer or such other obligor, the Indenture Trustee, irrespective of
whether the principal of any Notes shall then be due and payable, as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such proceedings
or otherwise:

 

(i)                                                           to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad faith)
and of the Noteholders allowed in such Proceedings;

 

(ii)                                                        unless
prohibited by applicable law and regulations, to vote on behalf of the
Noteholders (and, if applicable, any Cross-Currency Swap Counterparty) in any
election of a trustee, a standby trustee or Person performing similar functions
in any such Proceedings;

 

(iii)                                                     to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute all amounts received with respect to the claims
of the Noteholders, any Cross-Currency Swap Counterparty and the Indenture
Trustee on their behalf; and

 

(iv)                                                    to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee, any
Cross-Currency Swap Counterparty or the Noteholders allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;

 

and any trustee, receiver, liquidator,
custodian or other similar official in any such Proceeding is hereby authorized
by each of such Noteholders and any Cross-Currency Swap Counterparty to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders and any
Cross-Currency Swap Counterparty to pay to the Indenture Trustee such amounts
as shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.

 

(d)                               Nothing
herein contained shall be deemed to authorize the Indenture Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Noteholder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.

 

26

 

(e)                                All
rights of action and of asserting claims under this Indenture, or under any of
the Notes, may be enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders, and after the Notes have been paid in full,
and subject to the provisions of Section 11.19, any Cross-Currency Swap
Counterparty.

 

(f)                                  In
any Proceedings brought by the Indenture Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Indenture Trustee shall be a party), the Indenture Trustee shall be held to
represent all the Noteholders and each Cross-Currency Swap Counterparty, and it
shall not be necessary to make any Noteholder or any Cross-Currency Swap
Counterparty a party to any such Proceedings.

 

SECTION 5.4   Remedies;
Priorities.    If an Event of
Default shall have occurred and be continuing, the Indenture Trustee may do one
or more of the following (subject to Section 5.5):

 

(a)                                (i)                                   institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under this Indenture
with respect thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;

 

(ii)                                institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture, with respect to the Indenture Trust Estate;

 

(iii)                             exercise
any remedies of a secured party under the UCC with respect to the Trust Estate
and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee, any Cross-Currency Swap Counterparty and the
Noteholders;

 

(iv)                            sell
the Indenture Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in any
manner permitted by law; and/or

 

(v)                               elect
to have the Eligible Lender Trustee maintain ownership of the Trust Student
Loans and continue to apply collections with respect to the Trust Student Loans
as if there had been no declaration of acceleration;

 

provided,
however, that the Indenture Trustee may not sell or otherwise liquidate
the Indenture Trust Estate following an Event of Default, other than an Event
of Default described in Section 5.1(i) or (ii) with respect to the Class A
Notes, unless (A) the Noteholders of 100% of the Outstanding Amount of the
Class A Notes consent thereto, (B) the proceeds of such sale or liquidation
distributable to the Class A Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon such Class A Notes for principal and
interest or (C) the Indenture Trustee determines that the Indenture Trust
Estate will not continue to provide sufficient funds for the payment of principal
of and interest on the Class A Notes as would have become due if

 

27

 

the Class A
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of Noteholders of 66-2/3% of the Outstanding Amount of the Class A
Notes; provided, further, that the Indenture Trustee may not sell
or otherwise liquidate the Indenture Trust Estate following an Event of
Default, other than an Event of Default described in Section 5.1(i) or (ii)
with respect to the Class A Notes, unless (D) the proceeds of such sale or
liquidation distributable to the Class B Noteholders plus the proceeds of the
sale or liquidation of the Trust Estate distributable to the Class B
Noteholders are sufficient to pay to the Class B Noteholders the Outstanding
Amount of the Class B Notes plus accrued and unpaid interest thereon or
(E) after receipt of notice from the Eligible Lender Trustee that the proceeds
of such sale or liquidation distributable to the Class B Noteholders plus the
proceeds of the sale or liquidation of the Trust Estate distributable to the
Class B Noteholders would not be sufficient to pay to the Class B Noteholders
the outstanding principal plus accrued and unpaid interest thereon, the Class B
Noteholders of at least a majority of the Outstanding Amount of the Class B
Notes consent thereto.  In determining
such sufficiency or insufficiency with respect to clauses (B), (C), (D) and
(E), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Indenture Trust Estate and/or Trust Estate, as applicable, for such purpose.

 

(b)                               Notwithstanding
the provisions of Section 8.2, following the occurrence and during the
continuation of an Event of Default specified in Section 5.1(i), 5.1(ii),
5.1(iv) or 5.1(v) which has resulted in an acceleration of the Notes, if the
Indenture Trustee collects any money or property, it shall pay out the money or
property (and other amounts including amounts, if any, held on deposit in each
of the Trust Accounts) held as Collateral for the benefit of the Noteholders,
net of liquidation costs associated with the sale of the assets of the Trust,
in the following order:

 

FIRST:                                                           to
the applicable Noteholders of the Reset Rate Notes then denominated in U.S.
Dollars and bearing interest at a fixed rate, or if the Reset Rate Notes are in
Foreign Exchange Mode, to the related Cross-Currency Swap Counterparty (for
exchange into the applicable non-U.S. Dollar Currency) the amount, if any, on
deposit in the Accumulation Account for the Reset Rate Notes (excluding any
Investment Earnings thereon) in reduction of the Outstanding Amount of the
Reset Rate Notes until they are paid in full;

 

SECOND:                                            to the
Indenture Trustee for amounts due under Section 6.7;

 

THIRD:                                                       to
the Servicer for due and unpaid Primary Servicing Fees;

 

FOURTH:                                           to the
Administrator, any due and unpaid Administration Fees;

 

FIFTH:                                                          pro
rata, based on amounts due and owing:

 

A:                                   to
the Class A Noteholders (other than the Reset Rate Noteholders if a Swap
Agreement is then in effect), for amounts due and unpaid on the Class A Notes
for interest at the applicable Note Rate, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Class A
Notes for such interest;

 

28

 

B:                                     if
a Swap Agreement is then in effect, to each Swap Counterparty, the amount of
any Swap Interest Payments due and payable by the Issuer (other than as paid to
that Swap Counterparty under clause FIRST); and

 

C:                                     if
any Swap Agreement has been terminated, to the related Swap Counterparty, the
amount of any Swap Termination Payments due to such Swap Counterparty due to a
Termination Event (as defined in the related Swap Agreement) resulting from a
payment default under the related Swap Agreement by the Issuer, a
non-rescindable, non-waivable acceleration of the Notes, or the bankruptcy or
insolvency of the Issuer.

 

SIXTH:

 

A:                                 If
the Reset Rate Notes are then in Foreign Exchange Mode, pro rata (1) to the
Class A Noteholders (other than the holders of the Reset Rate Notes then in
Foreign Exchange Mode), ratably, an amount sufficient to reduce the respective
principal balance of those Class A Notes to zero, and (2) to the related
Cross-Currency Swap Counterparty an amount sufficient to reduce the U.S. Dollar
Equivalent Principal Amount of the Reset Rate Notes to zero; or

 

B:                                   if
the Reset Rate Notes are then denominated in U.S. Dollars, pro rata to all of
the Class A Noteholders, ratably, an amount sufficient to reduce the respective
principal balances of the Class A Notes to zero;

 

SEVENTH:                                      to the Class B
Noteholders for amounts due and unpaid on the Class B Notes for interest at the
Class B Note Rate;

 

EIGHTH:                                                to the
Class B Noteholders, an amount sufficient to reduce the Outstanding Amount
of the Class B Notes to zero;

 

NINTH:                                                      to
the Servicer, for any unpaid Carryover Servicing Fees;

 

TENTH:                                                    to
any Swap Counterparties, pro rata, the amount of any Swap Termination Payments
due to such Swap Counterparties by the Issuer and not payable in Clause FIFTH
(C);

 

ELEVENTH:                               to the Remarketing
Agents, any due and unpaid Remarketing Fees payable by the Issuer to the extent
not previously paid from amounts on deposit in the Remarketing Fee Account;

 

TWELFTH:                                  sequentially, first
to the Remarketing Agents, and second to the Administrator for any advances
made on behalf of the Issuer, in each case, for payment of certain costs and
expenses as set forth in Section 3 of the Remarketing Agreement in connection
with the remarketing of the Reset Rate Notes not previously reimbursed by the
Issuer;

 

29

 

THIRTEENTH:                to the Interest Rate Cap Swap
Counterparty, the amount of any termination payment due to the Interest Rate
Cap Swap Counterparty by the Issuer under the Interest Rate Cap Agreement; and

 

FOURTEENTH:            to the Excess Distribution Certificateholder,
any remaining funds.

 

In the event that the related Swap Agreements
have terminated, all payments by the Trust to the Noteholders of the Reset Rate
Notes then in Foreign Exchange Mode will be made in the applicable currency
utilizing the exchange rate set forth in the related Swap Agreement prior to
its termination.

 

If a Cross-Currency Swap Agreement
terminates, amounts that would have otherwise been paid to the related
Cross-Currency Swap Counterparty under such Cross-Currency Swap Agreement
(other than amounts payable as a Termination Payment thereunder) will be used
to make payments to the Reset Rate Notes, in an amount in Pounds Sterling,
Euros or any other applicable non-U.S. Dollar currency equal to the payment
that the related Cross-Currency Swap Counterparty would have made.  If this occurs, the Trust will exchange U.S.
Dollars for Pounds Sterling, Euros or any other applicable non-U.S. Dollar
currency in order to make distributions to the Reset Rate Notes.

 

The Indenture Trustee may fix a record date
and payment date for any payment to Noteholders pursuant to this Section.  At least 15 days before such record date,
the Indenture Trustee shall mail to each Noteholder and the Issuer a notice
that states the record date, the payment date and the amount to be paid.

 

SECTION 5.5   Optional
Preservation of the Trust Student Loans.  If the Notes have been declared to be due
and payable under Section 5.2 following an Event of Default and such
declaration and its consequences have not been rescinded and annulled, the
Indenture Trustee may, but need not, elect to maintain possession of the
Indenture Trust Estate.  It is the
desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes, and
the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Indenture Trust Estate.  In determining whether to maintain
possession of the Indenture Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Indenture Trust Estate for such purpose.

 

SECTION 5.6   Limitation of
Suits.  No Noteholder shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

 

(i)                                                           such
Noteholder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;

 

(ii)                                                        the
Noteholders of not less than 25% of the Outstanding Amount of the Notes have
made written request to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;

 

30

 

(iii)                                                     such
Noteholder or Noteholders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;

 

(iv)                                                    the
Indenture Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute such Proceeding; and

 

(v)                                                       no
direction inconsistent with such written request has been given to the
Indenture Trustee during such 60-day period by the Noteholders of a majority of
the Outstanding Amount of the Notes;

 

it being understood and intended that no one
or more Noteholders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this indenture to affect, disturb or
prejudice the rights of any other Noteholders or to obtain or to seek to obtain
priority or preference over any other Noteholders or to enforce any right under
this Indenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall
receive conflicting or inconsistent requests and indemnity from two or more
groups of Noteholders, each representing less than a majority of the
Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.

 

SECTION 5.7   Unconditional
Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other provisions in this
Indenture, each Noteholder shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on its Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Noteholder.

 

SECTION 5.8   Restoration
of Rights and Remedies.  If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee or to such Noteholder, then and in every such case the
Issuer, the Indenture Trustee and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to their
former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.

 

SECTION 5.9   Rights
and Remedies Cumulative.  No
right or remedy herein conferred upon or reserved to the Indenture Trustee, any
Swap Counterparty or to the Noteholders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

 

31

 

SECTION 5.10   Delay
or Omission Not a Waiver.  No
delay or omission of the Indenture Trustee, any Swap Counterparty or any
Noteholder to exercise any right or remedy accruing upon any Default shall
impair any such right or remedy or constitute a waiver of any such Default or
an acquiescence therein.  Every right
and remedy given by this Article V or by law to the Indenture Trustee, any Swap
Counterparty or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Indenture Trustee, any Swap
Counterparty or by the Noteholders, as the case may be.

 

SECTION 5.11   Control by
Noteholders.  The Noteholders of
a majority of the Outstanding Amount of the Notes shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; provided that

 

(i)                                                           such
direction shall not be in conflict with any rule of law or with this Indenture;

 

(ii)                                                        subject
to the express terms of Section 5.4, any direction to the Indenture Trustee to
sell or liquidate the Indenture Trust Estate shall be by the Noteholders of not
less than 100% of the Outstanding Amount of the Notes;

 

(iii)                                                     if
the conditions set forth in Section 5.5 have been satisfied and the Indenture
Trustee elects to retain the Indenture Trust Estate pursuant to such Section,
then any direction to the Indenture Trustee by Noteholders of less than 100% of
the Outstanding Amount of the Notes to sell or liquidate the Indenture Trust
Estate shall be of no force and effect; and

 

(iv)                                                    the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction;

 

provided, however,
that, subject to Section 6.1, the Indenture Trustee need not take any action
that it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.

 

SECTION 5.12   Waiver of
Past Defaults.  Prior to the
time a judgment or decree for payment of money due has been obtained as
described in Section 5.2, the Noteholders of not less than a majority of the
Outstanding Amount of the Notes may waive any past Default and its consequences
except a Default (a) in payment when due of principal of or interest on any of
the Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of each Noteholder.  In the case of any such waiver, the Issuer,
the Indenture Trustee and the Noteholders shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.

 

Upon any such waiver, such Default shall
cease to exist and be deemed to have been cured and not to have occurred for
every purpose of this Indenture; but no such waiver shall extend to any subsequent
or other Default or impair any right consequent thereto.

 

SECTION 5.13   Undertaking
for Costs.  All parties to this
Indenture agree, and each Noteholder by such Noteholder’s acceptance of any
Note shall be deemed to have agreed,

 

32

 

that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit Instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).

 

SECTION 5.14   Waiver
of Stay or Extension Laws.  The
Issuer covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Indenture Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

 

SECTION 5.15   Action on Notes.  The Indenture Trustee’s right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture.  Neither the lien of
this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Indenture Trust Estate or upon any of the assets of the
Issuer.  Any money or property collected
by the Indenture Trustee shall be applied in accordance with Section 5.4(b).

 

SECTION 5.16   Performance and Enforcement of
Certain Obligations.

 

(a)                                Promptly
following a request from the Indenture Trustee to do so and at the
Administrator’s expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Depositor, SLMA, the Administrator and the Servicer, as
applicable, of each of their obligations to the Issuer, whether directly or by
assignment, under or in connection with the Sale Agreement, the Purchase
Agreement, the Administration Agreement and the Servicing Agreement,
respectively, in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale Agreement, the Purchase Agreement, the
Administration Agreement and the Servicing Agreement, as the case may be, to
the extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Depositor, SLMA, the
Administrator or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Depositor, SLMA, the Administrator or the Servicer of

 

33

 

each of their obligations under the Sale
Agreement, the Purchase Agreement, the Administration Agreement and the
Servicing Agreement, respectively.

 

(b)                               If
an Event of Default has occurred and is continuing, the Indenture Trustee may,
and at the written direction of the Noteholders of 66-2/3% of the Outstanding
Amount of the Notes shall, exercise all rights, remedies, powers, privileges
and claims of the Issuer against the Depositor, SLMA, the Administrator or the
Servicer under or in connection with the Sale Agreement, the Purchase
Agreement, the Administration Agreement and the Servicing Agreement,
respectively, including the right or power to take any action to compel or
secure performance or observance by the Depositor, SLMA, the Administrator or
the Servicer of each of their obligations to the Issuer thereunder, whether
directly or by assignment, and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale Agreement, the Purchase Agreement,
the Administration Agreement and the Servicing Agreement, respectively, and any
right of the Issuer to take such action shall be suspended.

 

ARTICLE VI

The Indenture Trustee

 

SECTION 6.1   Duties
of Indenture Trustee.  (a)  If
an Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct such person’s own affairs.

 

(b)                               Except
during the continuance of an Event of Default:

 

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

 

(ii)                                                        in
the absence of bad faith on its part, the Indenture Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Indenture
Trustee and conforming to the requirements of this Indenture; provided, however,
that the Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.

 

(c)                                The
Indenture Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:

 

(i)                                                           this
paragraph does not limit the effect of paragraph (b) of this Section;

 

(ii)                                                        the
Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and

 

34

 

(iii)                                                     the
Indenture Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 5.11.

 

(d)                               The
Indenture Trustee shall not be liable for interest on any money received by it
except as the Indenture Trustee may agree in writing with the Issuer.

 

(e)                                Money
held in trust by the Indenture Trustee need not be segregated from other funds
except to the extent required by law or the terms of this Indenture or the
other Basic Documents.

 

(f)                                  No
provision of this Indenture shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayments of such funds or
adequate indemnity satisfactory to it against any loss, liability or expense is
not reasonably assured to it.

 

(g)                               Except
as expressly provided in the Basic Documents, the Indenture Trustee shall have
no obligation to administer, service or collect the Trust Student Loans or to
maintain, monitor or otherwise supervise the administration, servicing or
collection of the Trust Student Loans.

 

(h)                               In
the event that the Indenture Trustee is the Paying Agent or the Note Registrar,
the rights and protections afforded to the Indenture Trustee pursuant to this
Indenture shall also be afforded to the Indenture Trustee in its capacity as
Paying Agent or Note Registrar.

 

(i)                                   Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.

 

SECTION 6.2   Rights
of Indenture Trustee. 
(a)  The Indenture Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper
Person.  The Indenture Trustee need not
investigate any fact or matter stated in such document.

 

(b)                               Before
the Indenture Trustee acts or refrains from acting, it may require and shall be
entitled to receive an Officers’ Certificate of the Issuer and/or an Opinion of
Counsel.  The Indenture Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion of Counsel.

 

(c)                                The
Indenture Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or a
custodian or nominee, and the Indenture Trustee shall not be responsible for
any misconduct or negligence on the part of, or for the supervision of, any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder.

 

(d)                               The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers; provided, however,

 

35

 

that the Indenture Trustee’s conduct does not
constitute willful misconduct, negligence or bad faith.

 

(e)                                The
Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.

 

SECTION 6.3   Individual
Rights of Indenture Trustee. 
The Indenture Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture
Trustee.  Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like
rights.  However, the Indenture Trustee
must comply with Sections 6.11 and 6.12.

 

SECTION 6.4   Indenture
Trustee’s Disclaimer.  The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuer’s use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee’s certificate of authentication.

 

SECTION 6.5   Notice of
Defaults.  If a Default occurs
and is continuing and if it is either actually known or written notice of the
existence thereof has been delivered to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail notice of the Default to each
Noteholder and any Swap Counterparty within 90 days and to each Rating Agency
as soon as practicable within 30 days after it occurs.  Except in the case of a Default in payment
of principal of or interest on any Note (including payments pursuant to the mandatory
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders and
any Swap Counterparty.  Except as
provided in the first sentence of this Section 6.5, in no event shall the
Indenture Trustee be deemed to have knowledge of a Default or an Event of
Default.

 

SECTION 6.6   Reports
by Indenture Trustee to Noteholders.  The Indenture Trustee shall deliver to each Noteholder (and to
each Person who was a Noteholder at any time during the applicable calendar
year) such information as may be required to enable such holder to prepare its
Federal and state income tax returns. 
Within 60 days after each December 31 beginning with the December 31
following the date of this Indenture, the Indenture Trustee shall mail to each
Noteholder a brief report as of such December 31 that complies with TIA §
313(a) if required by said section.  The
Indenture Trustee shall also comply with TIA § 313(b).  A copy of each such report required pursuant
to TIA § 313(a) or (b) shall, at the time of such transaction to Noteholders,
be filed by the Indenture Trustee with the Commission and with each securities
exchange, if any, upon which the Notes are listed, provided that the Issuer has
previously notified the Indenture Trustee of such listing.

 

36

 

SECTION 6.7   Compensation
and Indemnity.  The Issuer shall
cause the Depositor to pay to the Indenture Trustee reasonable compensation for
its services in accordance with a separate agreement between the Depositor and
the Indenture Trustee and shall cause the Depositor to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it as
provided in such separate agreement. 
The Indenture Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. 
The Issuer shall cause the Administrator to indemnify the Indenture
Trustee and its directors, officers, employees and agents against any and all
loss, liability or expense (including attorneys’ fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder and under the other Basic Documents.  The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so
notify the Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder and under the other Basic
Documents.  The Issuer shall cause the
Administrator to defend the claim and the Administrator shall not be liable for
the legal fees and expenses of the Indenture Trustee after it has assumed such
defense; provided, however, that, in the event that there may be
a conflict between the positions of the Indenture Trustee and the Administrator
in conducting the defense of such claim, the Indenture Trustee shall be
entitled to separate counsel acceptable to it in its sole discretion the
reasonable fees and expenses of which shall be paid by the Administrator on
behalf of the Issuer.  Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuer’s payment obligations to the
Indenture Trustee pursuant to this Section shall survive the discharge of this
Indenture.  When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section 5.1(iv)
or (v) with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or similar law.

 

SECTION 6.8   Replacement
of Indenture Trustee.  No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section
6.8.  The Indenture Trustee may resign
at any time by so notifying the Issuer. 
The Noteholders of a majority in Outstanding Amount of the Notes may
remove the Indenture Trustee by so notifying the Indenture Trustee and may
appoint a successor Indenture Trustee. 
The Issuer shall remove the Indenture Trustee if:

 

(i)                                                           the
Indenture Trustee fails to comply with Section 6.11;

 

(ii)                                                        an
Insolvency Event occurs with respect to the Indenture Trustee;

 

(iii)                                                     a
receiver or other public officer takes charge of the Indenture Trustee or its
property; or

 

(iv)                                                    the
Indenture Trustee otherwise becomes incapable of acting.

 

37

 

If the Indenture Trustee resigns or is
removed or if a vacancy exists in the office of Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint a successor
Indenture Trustee.

 

A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring Indenture Trustee and to
the Issuer.  Thereupon the resignation
or removal of the retiring Indenture Trustee shall become effective, and the
successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. 
The successor Indenture Trustee shall mail a notice of its succession to
Noteholders.  The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

 

If a successor Indenture Trustee does not
take office within 60 days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the Noteholders of a
majority in Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.  The successor Indenture Trustee shall give
notice of its appointment as successor Indenture Trustee to the Rating
Agencies.

 

If the Indenture Trustee fails to comply with
Section 6.11, any Noteholder may petition any court of competent jurisdiction
for the removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee.

 

Notwithstanding the replacement of the
Indenture Trustee pursuant to this Section, the Issuer’s and the
Administrator’s obligations under Section 6.7 shall continue for the benefit of
the retiring Indenture Trustee.

 

SECTION 6.9   Successor
Indenture Trustee by Merger.  If
the Indenture Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee, provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11.  The
Indenture Trustee shall provide the Rating Agencies prior written notice of any
such transaction.

 

In case at the time such successor or
successors by merger, conversion or consolidation to the Indenture Trustee
shall succeed to the trusts created by this Indenture any of the Notes shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor trustee,
and deliver such Notes so authenticated; and in case at that time any of the
Notes shall not have been authenticated, any successor to the Indenture Trustee
may authenticate such Notes either in the name of any predecessor hereunder or
in the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.

 

38

 

SECTION 6.10   Appointment
of Co-Trustee or Separate Trustee.

 

(a)                                Notwithstanding
any other provisions of this Indenture, at any time, for the purpose of meeting
any legal requirement of any jurisdiction in which any part of the Indenture
Trust Estate may at the time be located, the Indenture Trustee shall have the
power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Indenture Trust Estate, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Indenture Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable.  No such appointment shall relieve the
Indenture Trustee of its obligations hereunder.  No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8 hereof.

 

(b)                               Every
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 Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture 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 Indenture 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 Indenture 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 Indenture Trust
Estate 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 Indenture Trustee;

 

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

 

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

 

(c)                                Any
notice, request or other writing given to the Indenture 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 Indenture and the conditions of this Article VI.  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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. 
Every such instrument shall be filed with the Indenture Trustee.

 

(d)                               Any
separate trustee or co-trustee may at any time constitute the Indenture
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
Indenture on its behalf and in its name. 
If

 

39

 

any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.

 

SECTION 6.11   Eligibility;
Disqualification.  The Indenture
Trustee shall at all times satisfy the requirements of TIA § 310(a), the
requirements of an “eligible lender” under 20 USC § 1085(d) and the
requirements of Rule 3a-7(4)(i) of the General Rules and Regulations under the
Investment Company Act of 1940, as amended. 
The Indenture Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition and it shall have a long-term senior unsecured debt rating of not
less than investment grade by each of the Rating Agencies.  The Indenture Trustee shall comply with TIA
§ 310(b), including the optional provision permitted by the second sentence of
TIA § 310(b)(9); provided, however, that there shall be excluded
from the operation of TIA § 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA § 310(b)(1) are met.

 

SECTION 6.12   Preferential Collection of
Claims Against the Issuer. 
The Indenture Trustee shall comply with TIA § 311(a), excluding any
creditor relationship listed in TIA § 311(b). 
An Indenture Trustee who has resigned or been removed shall be subject
to TIA § 311(a) to the extent indicated.

 

ARTICLE VII

Noteholders’ Lists and Reports

 

SECTION 7.1   Issuer
to Furnish Indenture Trustee Names and Addresses of Noteholders.  The Issuer will furnish or cause to be
furnished to the Indenture Trustee (a) not more than five days after the
earlier of (i) each Record Date and (ii) three months after the last Record
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Noteholders as of such Record Date, (b) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.

 

SECTION 7.2   Preservation
of Information; Communications to Noteholders.    The Indenture Trustee shall preserve, in
as current a form as is reasonably practicable, the names and addresses of the
Noteholders contained in the most recent list furnished to the Indenture
Trustee as provided in Section 7.1 and the names and addresses of Noteholders
received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list
furnished to it as provided in such Section 7.1 upon receipt of a new list so
furnished.

 

(a)                                Noteholders
may communicate pursuant to TIA § 312(b) with other Noteholders with respect to
their rights under this Indenture or under the Notes.  Upon receipt by the Indenture Trustee of any request by three or
more Noteholders or by one or more holders of Notes evidencing not less than
25% of the Outstanding Amount of the Notes to receive a copy of

 

40

 

the current list of Noteholders (whether or
not made pursuant to TIA § 312(b)), the Indenture Trustee shall promptly notify
the Administrator thereof by providing to the Administrator a copy of such
request and a copy of the list of Noteholders produced in response thereto.

 

(b)                               The
Issuer, the Indenture Trustee and the Note Registrar shall have the protection
of TIA § 312(c).

 

(c)                                On
each Distribution Date the Indenture Trustee shall provide to each Noteholder
of record as of the related Record Date the information provided by the
Administrator to the Indenture Trustee on the related Determination Date
pursuant to Section 2.11 of the Administration Agreement.

 

(d)                               The
Indenture Trustee shall furnish to the Noteholders promptly upon receipt of a
written request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other instruments
furnished to the Indenture Trustee under the Basic Documents.  The Indenture Trustee shall furnish to the
Noteholders promptly upon receipt thereof from the Eligible Lender Trustee
notice of any amendment of the Administration Agreement pursuant to Section 8.5
of the Administration Agreement.

 

SECTION 7.3   Reports by Issuer.

 

(a)                                The
Issuer shall:

 

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

 

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

 

(iii)                                                     supply
to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to
all Noteholders described in TIA § 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to clauses
(i) and (ii) of this Section 7.3(a) as may be required by rules and regulations
prescribed from time to time by the Commission.

 

(b)                               Unless
the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.

 

41

 

ARTICLE VIII

Accounts, Disbursements and
Releases

 

SECTION 8.1   Collection of
Money.  Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture.  The Indenture Trustee shall
apply all such money received by it on behalf of Noteholders and any Swap
Counterparty pursuant to the Administration Agreement as provided in this
Indenture.  Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of
any payment or performance under any agreement or instrument that is part of
the Indenture Trust Estate, the Indenture Trustee may take such action as may
be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice
to any right to claim a Default under this Indenture and any right to proceed
thereafter as provided in Article V.

 

SECTION 8.2   Trust Accounts.  (a)  On or prior to the Closing
Date, the Issuer shall cause the Administrator to establish and maintain, in
the name of the Indenture Trustee, for the benefit of the Noteholders and any
Swap Counterparty the Trust Accounts as provided in Section 2.3 of the
Administration Agreement.

 

(b)                               On
or before the Business Day immediately preceding each Distribution Date, all
Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 2.4 of the
Administration Agreement.  On or before
each Distribution Date, the Indenture Trustee (or any other Paying Agent) shall
make the required deposits and distributions as provided in Sections 2.7 and 2.8
of the Administration Agreement.

 

SECTION 8.3   General
Provisions Regarding Accounts. 
(a)  So long as no Default shall have occurred and be
continuing, all or a portion of the funds in the Trust Accounts shall be
invested in Eligible Investments and reinvested by the Indenture Trustee upon
Issuer Order, subject to the provisions of Section 2.3(b) of the Administration
Agreement.  All income or other gain
from investments of moneys deposited in the Trust Accounts (except for the
Capitalized Interest Account, if any) shall be deposited by the Indenture
Trustee in the Collection Account, and any loss resulting from such investments
shall be charged to such Trust Account. 
All income or other gain from investments of moneys deposited in the
Capitalized Interest Account, if any, shall be deposited by the Indenture
Trustee in the Capitalized Interest Account, and any loss resulting from such
investments shall be charged to the Capitalized Interest Account.  The Issuer will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
any of the Trust Accounts unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the proceeds
of such sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.

 

42

 

(b)                               Subject
to Section 6.1(c), the Indenture Trustee shall not in any way be held liable
for the selection of Eligible Investments or by reason of any insufficiency in
any of the Trust Accounts resulting from any loss on any Eligible Investment
included therein except for losses attributable to the Indenture Trustee’s
failure to make payments on such Eligible Investments issued by the Indenture
Trustee, in its commercial capacity as principal obligor and not as trustee, in
accordance with their terms.

 

(c)                                If
(i) the Issuer shall have failed to give investment directions for any funds on
deposit in the Trust Accounts to the Indenture Trustee by 10:00 a.m.  Eastern Time (or such other time as may be
agreed by the Issuer and Indenture Trustee) on any Business Day; or (ii) a
Default shall have occurred and be continuing with respect to the Notes but the
Notes shall not have been declared due and payable pursuant to Section 5.2, or,
if such Notes shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Indenture Trust Estate are
being applied in accordance with Section 5.5 as if there had not been such a declaration;
then the Indenture Trustee shall invest and reinvest funds in the Trust
Accounts in the Eligible Investments described in clause (d) of the definition
thereof.

 

SECTION 8.4   Release
of Indenture Trust Estate. 
(a)  Subject to the payment of its fees and expenses pursuant
to Section 6.7, the Indenture Trustee may, and when required by the provisions
of this Indenture shall, execute instruments to release property from the lien
of this Indenture, or convey the Indenture Trustee’s interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture.  No party relying upon
an instrument executed by the Indenture Trustee as provided in this Article
VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire
into the satisfaction of any conditions precedent or see to the application of
any moneys.

 

(b)                               The
Indenture Trustee shall, at such time as there are no Notes Outstanding and all
sums due the Indenture Trustee pursuant to Section 6.7 have been paid, subject
to the interest therein of any Swap Counterparty, release any remaining portion
of the Indenture Trust Estate that secured the Notes from the lien of this
Indenture and release to the Issuer or any other Person entitled thereto any
funds then on deposit in the Trust Accounts. 
The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer
Request accompanied by an Officers’ Certificate of the Issuer, an Opinion of
Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.1.

 

(c)                                Each
Noteholder, by the acceptance of a Note, acknowledges that from time to time
the Indenture Trustee shall release the lien of this Indenture on any Trust
Student Loan to be sold to (i) the Depositor in accordance with Section 6 of
the Sale Agreement, (ii) to the Servicer in accordance with Section 3.5 of the
Servicing Agreement, and (iii) to SLMA in accordance with Section 6 of the
Purchase Agreement, and each Noteholder, by the acceptance of a Note, consents
to any such release.

 

SECTION 8.5   Opinion of
Counsel.  The Indenture Trustee
shall receive at least seven days’ notice when requested by the Issuer to take
any action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(c), as a condition to such

 

43

 

action, an Opinion of Counsel, in form and
substance satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been complied
with and such action will not materially and adversely impair the security for
the Notes or the rights of the Noteholders or any Swap Counterparty in
contravention of the provisions of this Indenture; provided, however,
that such Opinion of Counsel shall not be required to express an opinion as to
the fair value of the Indenture Trust Estate. 
Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.

 

ARTICLE IX

Supplemental Indentures

 

SECTION 9.1   Supplemental Indentures Without
Consent of Noteholders.  
Without the consent of any Noteholders but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:

 

(i)                                                           to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;

 

(ii)                                                        to
evidence the succession, in compliance with the applicable provisions hereof,
of another person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;

 

(iii)                                                     to
add to the covenants of the Issuer, for the benefit of the Noteholders and, any
Swap Counterparty, as applicable, or to surrender any right or power herein
conferred upon the Issuer;

 

(iv)                                                    to
convey, transfer, assign, mortgage or pledge any property to the Indenture Trustee;

 

(v)                                                       to
cure any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture which may be inconsistent with any other provision
herein or in any supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture or in any
supplemental indenture; provided that such action shall not materially
adversely affect the interests of the Noteholders or any Swap Counterparty;

 

(vi)                                                    to
evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI; or

 

44

 

(vii)                                                 to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the TIA
or under any similar Federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the TIA.

 

The Indenture Trustee is hereby authorized to
join in the execution of any such supplemental indenture and to make any
further appropriate agreements and stipulations that may be therein contained.

 

(b)                               The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any of the Noteholders but with prior notice to any Swap
Counterparty and the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders or any Swap Counterparty
under this Indenture; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Noteholder or any Swap Counterparty.

 

SECTION 9.2   Supplemental
Indentures with Consent of Noteholders.  The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, also may, with prior notice to any Swap
Counterparty and the Rating Agencies and with the consent of the Noteholders of
not less than a majority of the Outstanding Amount of the Notes, by Act of such
Noteholders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture;  provided, however,
that no such supplemental indenture shall, without the consent of the
Noteholder of each Outstanding Note affected thereby:

 

(i)                                                           change
the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate thereon or the
Redemption Price with respect thereto, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of the sale of,
the Indenture Trust Estate to payment of principal of or interest on the Notes,
or change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable (other than pursuant to the terms and
conditions of the Reset Rate Notes or pursuant to the Reset Rate Note
Procedures set forth in Appendix A-2 to this Indenture) or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article
V, to the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or after the
Redemption Date);

 

(ii)                                                        reduce
the percentage of the Outstanding Amount of the Notes, the consent of the
Noteholders of which is required for any such supplemental indenture, or the
consent of the Noteholders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;

 

45

 

(iii)                                                     modify
or alter the provisions of the proviso to the definition of the term
“Outstanding”;

 

(iv)                                                    reduce
the percentage of the Outstanding Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Indenture Trust
Estate pursuant to Section 5.4;

 

(v)                                                       modify
any provision of this Section except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or
the other Basic Documents cannot be modified or waived without the consent of
the Noteholder of each Outstanding Note affected thereby;

 

(vi)                                                    modify
any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Noteholders to the benefit of any provisions for the mandatory redemption of
the Notes contained herein; or

 

(vii)                                                 permit
the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Indenture Trust Estate or, except as
otherwise permitted or contemplated herein, terminate the lien of this
Indenture on any property at any time subject hereto or deprive any Noteholder
of any Note of the security provided by the lien of this Indenture.

 

It shall not be necessary for any Act of
Noteholders under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.

 

Promptly after the execution by the Issuer
and the Indenture Trustee of any supplemental indenture pursuant to this
Section, the Indenture Trustee shall mail to the Noteholders of the Notes to
which such amendment or supplemental indenture relates a notice setting forth
in general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.

 

SECTION 9.3   Execution
of Supplemental Indentures.  In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee’s own rights, duties, liabilities or immunities under this
Indenture or otherwise.

 

SECTION 9.4   Effect
of Supplemental Indenture.  Upon
the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and immunities

 

46

 

under this Indenture of the Indenture
Trustee, the Issuer and the Noteholders shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

 

SECTION 9.5   Conformity
with Trust Indenture Act.  Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.

 

SECTION 9.6   Reference
in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.

 

ARTICLE X

Redemption of Notes

 

SECTION 10.1   Redemption.  The Indenture Trustee shall, upon receipt of
written notice from the Servicer pursuant to Section 6.1(b) of the
Administration Agreement, give prompt written notice to the Noteholders of the occurrence
of such event.  In the event that the
assets of the Trust are sold pursuant to Section 6.1(a) of the Administration
Agreement, that portion of the amounts on deposit in the Trust Accounts to be
distributed to the Noteholders shall be paid to the Noteholders as provided in
Sections 2.7 and 2.8.  If amounts are to
be paid to Noteholders pursuant to this Section 10.1, the notice of such event
from the Indenture Trustee to the Noteholders shall include notice of the
redemption of Notes by application of such amounts on the next Distribution
Date which is not sooner than 15 days after the date of such notice (the
“Redemption Date”), whereupon all such amounts shall be payable on the
Redemption Date.

 

SECTION 10.2   Form of
Redemption Notice.  Notice of
redemption under Section 10.1 shall be given by the Indenture Trustee by
first-class mail, postage prepaid, or by facsimile, mailed or transmitted on or
prior to the applicable Redemption Date to each Noteholder, as of the close of
business on the Record Date preceding the applicable Redemption Date, at such
Noteholder’s address or facsimile number appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)                                                           the
Redemption Date;

 

(ii)                                                        the
Redemption Price; and

 

47

 

(iii)                                                     the
place where such Notes are to be surrendered for payment of the Redemption
Price (which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.2).

 

Notice of redemption of the Notes shall be
given by the Indenture Trustee in the name and at the expense of the
Issuer.  Failure to give notice of
redemption, or any defect therein, to any Noteholder of any Note shall not
impair or affect the validity of the redemption of any other Note.

 

SECTION 10.3   Notes
Payable on Redemption Date.  The
Notes or portions thereof to be redeemed shall on the Redemption Date become
due and payable at the Redemption Price and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.

 

ARTICLE XI

Miscellaneous

 

SECTION 11.1   Compliance Certificates and
Opinions, etc. 
(a)  Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee and the Rating Agencies (i) an
Officers’ Certificate of the Issuer stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with and (iii)
(if required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

 

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

 

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

 

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

 

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

 

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

 

48

 

(b)                               (i)                                    Prior
to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property
or securities subject to the lien of this Indenture, the Issuer shall, in
addition to any obligation imposed in Section 11.1(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee and the Rating Agencies an
Officers’ Certificate of the Issuer certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of such
deposit) to the Issuer of the Collateral or other property or securities to be
so deposited.

 

(ii)                                                        Whenever
the Issuer is required to furnish to the Indenture Trustee and the Rating
Agencies an Officers’ Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (i) above,
the Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the basis
of any such withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates delivered pursuant
to clause (i) above and this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the Issuer as set
forth in the related Officers’ Certificate is less than $25,000 or less than
one percent of the Outstanding Amount of the Notes.

 

(iii)                                                     Other
than any property released as contemplated by clause (v) below, whenever any
property or securities are to be released from the lien of this Indenture, the
Issuer shall also furnish to the Indenture Trustee an Officers’ Certificate of
the Issuer certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the property
or securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.

 

(iv)                                                    Whenever
the Issuer is required to furnish to the Indenture Trustee an Officers’
Certificate of the Issuer certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer shall
also furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property, other than property as contemplated by clause (v) below, or
securities released from the lien of this Indenture since the commencement of
the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof as set forth in
the related Officers’ Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.

 

(v)                                                       Notwithstanding
Section 2.9 or any other provision of this Section, the Issuer may, without
compliance with the requirements of the other provisions of this Section, (A)
collect, liquidate, sell or otherwise dispose of Trust Student Loans as and to
the extent permitted or required by the Basic Documents, (B) make cash payments
out of the Trust Accounts as and to the extent permitted or required by the
Basic Documents and (C) convey to the Depositor, the Servicer or another
eligible lender those specified Trust Student Loans as and to the extent
permitted or required by and in accordance with Section 8.4(c) hereof and
Section 6 of the Sale

 

49

 

Agreement, Section 3.5 of the Servicing
Agreement or Section 3.11E of the Servicing Agreement, respectively, so long as
the Issuer shall deliver to the Indenture Trustee every six months, commencing
December 31, 2004, an Officers’ Certificate of the Issuer stating that all
the dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months were in the
ordinary course of the Issuer’s business and that the proceeds thereof were
applied in accordance with the Basic Documents.

 

SECTION 11.2   Form of Documents Delivered to
Indenture Trustee.   In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters, and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

 

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

 

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

 

Whenever in this Indenture, in connection
with any application or certificate or report to the Indenture Trustee, it is
provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer’s compliance with
any term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or
report.  The foregoing shall not,
however, be construed to affect the Indenture Trustee’s right to rely upon the
truth and accuracy of any statement or opinion contained in any such document
as provided in Article VI.

 

SECTION 11.3   Acts of
Noteholders.  (a)  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such action shall
become effective when such

 

50

 

instrument or instruments are delivered to
the Indenture Trustee, and, where it is hereby expressly required, to the
Issuer.  Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Noteholders signing such instrument or
instruments.  Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section.

 

(b)                               The
fact and date of the execution by any person of any such instrument or writing
may be proved in any manner that the Indenture Trustee deems sufficient.

 

(c)                                The
ownership of Notes shall be proved by the Note Register.

 

(d)                               Any
request, demand, authorization, direction, notice, consent, waiver or other
action by any Noteholder shall bind the Noteholder of every Note issued upon registration
of transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.

 

SECTION 11.4   Notices,
etc., to Indenture Trustee, Issuer and Rating Agencies.   Any request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders or other documents
provided or permitted by this Indenture shall be in writing and if such
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders is to be made upon, given or furnished to or filed with:

 

(a)                                The
Indenture Trustee by any Noteholder, the Servicer, the Administrator or by the
Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at its Corporate
Trust Office with a copy to: The Bank of New York, 2 North LaSalle St., Suite
1020, Chicago, Illinois, 60602, Attention: Corporate Trust – Structured
Finance.

 

(b)                               The
Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for
every purpose hereunder if in writing and mailed, first-class, postage prepaid,
to the Issuer addressed to: SLM Student Loan Trust 2004-1, in care of Chase
Manhattan Bank USA, National Association, Christiana Center/OPS4, 500 Stanton
Christiana Road, Newark,  Delaware
19713, Attention:  Corporate Trust
Department; with copies to JPMorgan Chase Bank, 450 West 33rd Street 15th Fl.,
New York, New York 10001, Attention: 
Structured Finance Services; and the Administrator, 11600 Sallie Mae
Drive, Reston, Virginia  20193,
Attention: ABS Trust Administration, or any other address previously furnished
in writing to the Indenture Trustee by the Issuer or the Administrator.  The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.

 

Notices required to be given to the Rating
Agencies by the Issuer, the Indenture Trustee or the Eligible Lender Trustee
shall be in writing, personally delivered or mailed by certified mail, return
receipt requested, to (i) in the case of Moody’s, at the following address: ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (ii) in the
case of S&P, at the following address: 55 Water Street, New York, New York
10041-0003, Attention:

 

51

 

Asset Backed
Surveillance Department, 32nd Floor, and (iii) in the case of Fitch, at the
following address: One State Street Plaza, New York, New York 10004, Attention:
Municipal Structured Finance Group; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.

 

Notices to any Swap Counterparty will be sent
to the addresses set forth in the related Swap Agreement or the Interest Rate
Cap Agreement, respectively or such other addresses as may be designated by
written notice to the parties to this Indenture.

 

SECTION 11.5   Notices
to Noteholders; Waiver.  Where
this Indenture provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid to each Noteholder affected by
such event, at his address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice.  In any case
where notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given.

 

Where this Indenture provides for notice in
any manner, such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice.  Waivers
of notice by Noteholders shall be filed with the Indenture Trustee but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such a waiver.

 

In case, by reason of the suspension of
regular mail service as a result of a strike, work stoppage or similar
activity, it shall be impractical to mail notice of any event to Noteholders
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to
the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

 

Where this Indenture provides for notice to
the Rating Agencies, failure to give such notice shall not affect any other
rights or obligations created hereunder, and shall not under any circumstance
constitute a Default.

 

SECTION 11.6   Alternate Payment and Notice
Provisions.  Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Noteholder providing for a method of payment,
or notice by the Indenture Trustee or any Paying Agent to such Noteholder, that
is different from the methods provided for in this Indenture for such payments
or notices.  The Issuer will furnish to
the Indenture Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in accordance with such
agreements.

 

SECTION 11.7   Conflict
with Trust Indenture Act.  If
any provision hereof limits, qualifies or conflicts with another provision
hereof that is required to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.

 

52

 

The provisions of TIA §§ 310 through 317 that
impose duties on any Person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.

 

SECTION 11.8   Effect
of Headings and Table of Contents. 
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

 

SECTION 11.9  
Successors and Assigns.  All
covenants and agreements in this Indenture and the Notes by the Issuer shall
bind its successor and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in
this Indenture shall bind the successors, co-trustees and agents (excluding any
legal representatives or accountants) of the Indenture Trustee.

 

SECTION 11.10  
Separability.  In case any
provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

SECTION 11.11  
Benefits of Indenture. 
(a)  Except as set forth in paragraphs (b) and (c) below,
nothing in this Indenture or in the Notes, express or implied shall give to any
person, other than the parties hereto and their successors hereunder, the
Noteholders, any other party secured hereunder, and any other Person with an
ownership interest in any part of the Indenture Trust Estate, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

 

(b)                               The
parties to this Indenture acknowledge and agree that each Swap Counterparty is
an intended third party beneficiary of this Indenture to the extent of its
rights hereunder and under the related Swap Agreement entered into by the
Issuer from time to time and shall be entitled to enforce such rights.

 

(c)                                The
parties to this Indenture acknowledge and agree that SLM Corporation, and any
permitted transferee, if applicable, is an intended third party beneficiary of
this Indenture to the extent of its rights with respect to the Call Option as
set forth in Section 7 of Appendix A-2 hereto and shall be entitled to enforce
such rights.

 

SECTION 11.12  
Legal Holidays.  In any case
where the date on which any payment is due shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date on which nominally
due, and no interest shall accrue for the period from and after any such
nominal date.

 

SECTION 11.13  
GOVERNING LAW.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS (OTHER THAN §5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

53

 

SECTION 11.14  
Counterparts.  This Indenture may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

 

SECTION 11.15  
Recording of Indenture.  If this
Indenture is subject to recording in any appropriate public recording offices,
such recording is to be effected by the Issuer and at its expense accompanied
by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any
other counsel reasonably acceptable to the Indenture Trustee) to the effect
that such recording is necessary either for the protection of the Noteholders
or any other Person secured hereunder or for the enforcement of any right or
remedy granted to the Indenture Trustee under this Indenture.

 

SECTION 11.16  
Trust Obligations.  No recourse
may be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Depositor, the Administrator, the Servicer, the Eligible Lender
Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual
capacity, any holder or owner of a beneficial interest in the Issuer, the
Eligible Lender Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Eligible Lender Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.  For all purposes
of this Indenture, in the performance of any duties or obligations of the
Issuer hereunder, the Eligible Lender Trustee shall be subject to, and entitled
to the benefits of, the terms and provisions of Articles VI, VII and VIII of
the Trust Agreement.

 

SECTION 11.17  
No Petition.  The Indenture
Trustee, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they shall not at any time institute
against the Depositor or the Issuer, or join in any institution against the
Depositor or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency, receivership 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 Notes, this Indenture or any of the other Basic
Documents.  The foregoing shall not
limit the rights of the Indenture Trustee to file any claim in, or otherwise
take any action with respect to, any insolvency proceeding that was instituted
against the Issuer by any Person other than the Indenture Trustee.

 

SECTION 11.18  
Inspection.  The Issuer agrees
that, on reasonable prior notice, it shall permit any representative of the
Indenture Trustee, during the Issuer’s normal business hours, to examine all
the books of account, records, reports, and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer’s affairs, finances and
accounts with the Issuer’s officers, employees, and Independent certified
public accountants, all at such reasonable times and as often as may be
reasonably requested.  The Indenture Trustee
shall and shall cause its

 

54

 

representatives to hold in confidence all
such information obtained from such examination or inspection except to the
extent disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.

 

SECTION 11.19  
Subordination.  All rights and
interest of each Cross-Currency Swap Counterparty in the security interest
granted to the Indenture Trustee under this Indenture shall be fully
subordinated to the interests of the Noteholders.  No Cross-Currency Swap Counterparty shall have any rights, implied
or otherwise, in the Collateral until after the Outstanding Amount of the Notes
has been reduced to zero and the Noteholders have been paid all amounts owed to
them under this Indenture. 
Notwithstanding the foregoing, the provisions of this Section 11.19
shall not modify or otherwise affect the contractual priority of payments set
forth in Section 5.4(b) hereof or Section 2.8 of the Administration
Agreement.  More specifically, no
Cross-Currency Swap Counterparty shall have any voting rights or rights to
exercise any remedies under this Indenture until after the Outstanding Amount
of the Notes has been reduced to zero and the Noteholders have been paid all
amounts owed to them under this Indenture. 
After the Outstanding Amount of the Notes has been reduced to zero and
the Noteholders have been paid all amounts owed to them under this Indenture,
each Cross-Currency Swap Counterparty shall have all of the rights and
obligations, including all voting rights, of the Noteholders set forth in this
Indenture.

 

55

 

IN WITNESS WHEREOF, the Issuer, the Eligible
Lender Trustee and the Indenture Trustee have caused this Indenture to be duly
executed by their respective officers, thereunto duly authorized and duly
attested, all as of the day and year first above written.

 

	
   

  	
  SLM STUDENT LOAN TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
  By: CHASE MANHATTAN BANK USA, NATIONAL

  ASSOCIATION, not in its individual capacity but solely as

  Eligible Lender Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   JOHN J. CASHIN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John J. Cashin

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHASE MANHATTAN BANK USA, NATIONAL

  ASSOCIATION, not in its individual capacity but solely

  as Eligible Lender Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   JOHN J. CASHIN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John J. Cashin

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  not in its individual capacity but solely

  as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   ERIC A. LINDAHL

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Eric A. Lindahl

  
	
   

  	
   

  	
  Title:

  	
  Agent

  
					

 

56

 

 

ACCEPTED AND AGREED TO WITH RESPECT TO THE
TRANSFER OF ALL RIGHT, TITLE AND INTEREST IN AND TO THE CALL OPTION CONTAINED
IN, AND SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN, SECTION 7 OF APPENDIX
A-2 TO THIS INDENTURE

 

	
  SLM FUNDING LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/   MARK L. HELEEN

  	
   

  
	
   

  	
   Name:

  	
  Mark L. Heleen

  
	
   

  	
   Title:

  	
  Vice President

  
	
   

  
	
   

  
	
  SLM CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/   J. LANCE FRANKE

  	
   

  
	
   

  	
   Name:

  	
  J. Lance Franke

  
	
   

  	
   Title:

  	
  Authorized Agent

  
				

 

57

 

APPENDIX
A-1

 

DEFINITIONS AND USAGE

Series 2004-1

 

Usage

 

The following rules of construction and usage
shall be applicable to any instrument that is governed by this appendix (this
“Appendix”):

 

(a)                                  All
terms defined in this Appendix shall have the defined meanings when used in any
instrument governed hereby and in any certificate or other document made or delivered
pursuant thereto unless otherwise defined therein.

 

(b)                                 As
used herein, in any instrument governed hereby and in any certificate or other
document made or delivered pursuant thereto, accounting terms not defined in
this Appendix or in any such instrument, certificate or other document, and
accounting terms partly defined in this Appendix or in any such instrument,
certificate or other document, to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument.  To the extent that the definitions of
accounting terms in this Appendix or in any such instrument, certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Appendix or
in any such instrument, certificate or other document shall control.

 

(c)                                  The
words “hereof,” “herein,” “hereunder” and words of similar import when used in
an instrument refer to such instrument as a whole and not to any particular
provision or subdivision thereof; references in an instrument to “Article,”
“Section” or another subdivision or to an attachment are, unless the context
otherwise requires, to an article, section or subdivision of or an attachment
to such instrument; and the term “including” means “including without
limitation.”

 

(d)                                 The
definitions contained in this Appendix are equally applicable to both the
singular and plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.

 

(e)                                  Any
agreement, instrument or statute defined or referred to below or any agreement
or instrument that is governed by this Appendix means such agreement or
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by assignment, assumption,
waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated
therein.  References to a Person are
also to its permitted successors and assigns.

 

A-1-1

 

“30/360”
means that interest is calculated on the basis of a 360-day year consisting of
twelve 30-day months.

 

“91-day
Treasury Bill Rate” means, for any relevant Interest Rate Determination
Date, prior to each Interest Rate Change Date, the rate equal to the weighted
average per annum discount rate (expressed as a bond equivalent yield and
applied on a daily basis) for direct obligations of the United States with a
maturity of thirteen weeks (“91-day Treasury Bills”) sold at the applicable
91-day Treasury Bill auction, as published in H.15(519) or otherwise or as
reported by the U.S.  Department of the
Treasury.  In the event that the results
of the auctions of 91-day Treasury Bills cease to be published or reported as
provided above, or that no 91-day Treasury Bill auction is held in a particular
week, then the 91-day Treasury Bill Rate in effect as a result of the last such
publication or report will remain in effect until such time, if any, as the
results of auctions of 91-day Treasury Bills will again be so published or
reported or such auction is held, as the case may be.  The 91-day Treasury Bill Rate will be subject to a Lock-In Period
of six Business Days.

 

“Accrual
Period” means, with respect to a Distribution Date and (i) each class
of Notes bearing a floating rate of interest (including, without limitation,
the Floating Rate Notes), the period from and including the immediately
preceding Distribution Date for such class of Notes to but excluding the
then-current Distribution Date, or in the case of the initial such period for
the Floating Rate Notes, the period from and including the Closing Date to and
including April 25, 2004; provided that if more than one Interest Rate
Change Date occurs for the Reset Rate Notes bearing a floating rate of interest
within any given Accrual Period, the rate of interest for the entire Accrual
Period shall be as specified in the relevant Remarketing Terms Notice; and
(ii)  the Reset Rate Notes if they then bear a fixed rate of interest and
(x) are denominated in U.S. Dollars (including during the initial Reset
Period), the period from and including the 25th day of the month of
the immediately preceding Distribution Date, to and including the 24th
day of the month of the then-current Distribution Date for the Reset Rate
Notes, or (y) are denominated in a currency other than U.S. Dollars,
(A) the period from and including the 25th day of the month of
the immediately preceding Distribution Date, to and including the 24th
day of the month of the then-current Distribution Date or (B) as otherwise
specified on the Schedule A for the Reset Rate Notes; provided, however, that
the initial Accrual Period for the Reset Rate Notes will begin on the Closing
Date and end on April 24, 2004 and shall consist of 86 days.

 

“Accumulation
Account” means the account designated as such, established and maintained
pursuant to Section 2.3(j) of the Administration Agreement.

 

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

 

“Actual/360”
means that interest is calculated on the basis of the actual number of days
elapsed in a year of 360 days.

 

“Actual/365
(fixed)” means that interest is calculated on the basis of the actual
number of days elapsed in a year of 365 days, regardless of whether accrual or
payment occurs in a leap year.

 

A-1-2

 

“Actual/Actual
(accrual basis)” means that interest is calculated on the basis of the
actual number of days elapsed in a year of 365 days, or 366 days for every day
in a leap year.

 

“Actual/Actual
(ISMA)” means a calculation in accordance with the definition of
“Actual/Actual” adopted by the International Securities Market Association
(“ISMA”), which means that interest is calculated on the following basis:

 

(1)                                  where
the number of days in the relevant Accrual Period is equal to or shorter than
the Determination Period during which such Accrual Period ends, the number of
days in such Accrual Period divided by the product of (A) the number of days in
such Determination Period and (B) the number of Distribution Dates that would
occur in one calendar year; or

 

(2)                                  where
the Accrual Period is longer than the Determination Period during which the
Accrual Period ends, the sum of:

 

(A)                              the
number of days in such Accrual Period falling in the Determination Period in
which the Accrual Period begins divided by the product of (x) the number of
days in such Determination Period and (y) the number of Distribution Dates that
would occur in one calendar year; and

 

(B)                                the
number of days in such Accrual Period falling in the next Determination Period
divided by the product of (x) the number of days in such Determination Period
and (y) the number of Distribution Dates that would occur in one calendar year;

 

where
“Determination Period” means the period from and including one Calculation Date
to but excluding the next Calculation Date and “Calculation Date” means, in
each year, each of those days in the calendar year that are specified herein as
being the scheduled Distribution Dates.

 

“Actual/Actual
(payment basis)” means that interest is calculated on the basis of the
actual number of days elapsed in a year of 365 days if the interest period ends
in a non-leap year, or 366 days if the interest period ends in a leap year, as
the case may be.

 

“Adjusted
Pool Balance” means, for any Distribution Date, (a) if the Pool Balance as
of the last day of the related Collection Period is greater than 40% of the
Initial Pool Balance, the sum of that Pool Balance and the Specified Reserve
Account Balance for that Distribution Date or (b) if the Pool Balance as of the
last day of the related Collection Period is less than or equal to 40% of the
Initial Pool Balance, that Pool Balance.

 

“Administration
Agreement” means the Administration Agreement, dated as of January 29,
2004, among the Administrator, the Servicer, the Depositor, the Trust and the
Eligible Lender Trustee, and as such agreement may be further amended or
supplemented from time to time.

 

“Administration
Fees” has the meaning specified in Section 2.14 of the Administration
Agreement.

 

A-1-3

 

“Administrator”
means Sallie Mae, Inc., in its capacity as administrator of the Trust in
accordance with the Administration Agreement.

 

“Administrator
Default” has the meaning specified in Section 5.1 of the Administration
Agreement.

 

“Administrator’s
Certificate” means an Officers’ Certificate of the Administrator delivered
pursuant to Section 3.1(c) of the Administration Agreement.

 

“Affiliate”
means, with respect to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person.  For the purposes of this definition,
“control” when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

“All Hold
Rate” means, if the Reset Rate Notes are denominated in U.S. Dollars during
the then-current Reset Period and the immediately following Reset Period, the
applicable Index plus or minus the Spread (if the Reset Rate Notes are in
floating rate mode) or the applicable fixed rate, which may be expressed as the
fixed rate pricing benchmark plus or minus a spread (if the Reset Rate Notes
are in fixed rate mode), that the Remarketing Agents, in consultation with the
Administrator, determine will be effective, unless the Call Option is
exercised, in the event that 100% of the Reset Rate Noteholders choose to hold
their Notes for the upcoming Reset Period. 
The All Hold Rate shall be a rate that the Remarketing Agents, in
consultation with the Administrator, and in their good faith determination,
believe would result in the remarketing of all of the Reset Rate Notes at a
price equal to 100% of the Outstanding Amount thereof.

 

“Authorized
Officer” means (i) with respect to the Trust, any officer of the Eligible
Lender Trustee who is authorized to act for the Eligible Lender Trustee in
matters relating to the Trust pursuant to the Basic Documents and who is
identified on the list of Authorized Officers delivered by the Eligible Lender
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (ii) with respect to
the Administrator, any officer of the Administrator or any of its Affiliates
who is authorized to act for the Administrator in matters relating to itself or
to the Trust and to be acted upon by the Administrator pursuant to the Basic
Documents and who is identified on the list of Authorized Officers delivered by
the Administrator to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter), (iii) with
respect to the Depositor, any officer of the Depositor or any of its Affiliates
who is authorized to act for the Depositor in matters relating to or to be
acted upon by the Depositor pursuant to the Basic Documents and who is
identified on the list of Authorized Officers delivered by the Depositor to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and (iv) with respect to the
Servicer, any officer of the Servicer who is authorized to act for the Servicer
in matters relating to or to be acted upon by the Servicer pursuant to the
Basic Documents and who is identified on the list of Authorized Officers
delivered by the Servicer to the Indenture Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter).

 

A-1-4

 

“Available
Funds” means, as to a Distribution Date or any related Monthly Servicing
Payment Date, the sum of the following amounts received with respect to the related
Collection Period or, in the case of a Monthly Servicing Payment Date, the
applicable portion of these amounts:

 

(a)                                  all collections on
the Trust Student Loans (including for this purpose, as to the first
Distribution Date, the Collection Account Initial Deposit), including any
Guarantee Payments received on the Trust Student Loans, but net of:

 

(1)                                  any
collections in respect of principal on the Trust Student Loans applied by the
Trust to repurchase guaranteed loans from the Guarantors under the Guarantee
Agreements, and

 

(2)                                  amounts
required by the Higher Education Act to be paid to the Department or to be
repaid to borrowers, whether or not in the form of a principal reduction of the
applicable Trust Student Loan, on the Trust Student Loans for that Collection
Period including Consolidation Loan rebate fees;

 

(b)                                 any Interest Subsidy
Payments and Special Allowance Payments with respect to the Trust Student Loans
during that Collection Period;

 

(c)                                  all Liquidation
Proceeds from any Trust Student Loans which became Liquidated Student Loans
during that Collection Period in accordance with the Servicer’s customary
servicing procedures, net of expenses incurred by the Servicer related to their
liquidation and any amounts required by law to be remitted to the borrowers on
the Liquidated Student Loans, and all Recoveries on Liquidated Student Loans
which were written off in prior Collection Periods or during that Collection
Period;

 

(d)                                 the aggregate Purchase
Amounts received during that Collection Period for those Trust Student Loans
repurchased by the Depositor or purchased by the Servicer or for Trust Student
Loans sold to another eligible lender pursuant to Section 3.11E of the
Servicing Agreement;

 

(e)                                  the aggregate
Purchase Amounts received during that Collection Period for those Trust Student
Loans purchased by SLMA;

 

(f)                                    the aggregate
amounts, if any, received from SLMA, the Depositor or the Servicer, as the case
may be, as reimbursement of nonguaranteed interest amounts, or lost Interest
Subsidy Payments and Special Allowance Payments, on the Trust Student Loans
pursuant to the Sale Agreement or Section 3.5 of the Servicing Agreement,
respectively;

 

(g)                                 amounts received by
the Trust pursuant to Sections 3.1 and 3.12 of the Servicing Agreement during
that Collection Period as to yield or principal adjustments;

 

(h)                                 any interest remitted
by the Administrator to the Collection Account prior to such Distribution Date
or Monthly Servicing Payment Date;

 

A-1-5

 

(i)                                     Investment
Earnings for that Distribution Date earned on amounts on deposit in each Trust
Account (other than any Other Currency Account);

 

(j)                                     amounts
transferred from the Remarketing Fee Account in excess of the sum of the Reset
Period Target Amounts for that Distribution Date;

 

(k)                                  payments
received under the Interest Rate Cap Agreement;

 

(l)                                     amounts
transferred from the Reserve Account in excess of the Specified Reserve Account
Balance as of that Distribution Date;

 

(m)                               the Investment Premium
Purchase Account Release Amount transferred from the Investment Premium
Purchase Account on that Distribution Date;

 

(n)                                 all amounts on deposit
in the Investment Reserve Account not transferred to an Accumulation Account to
offset realized losses on Eligible Investments actually incurred by the Trust
as of that Distribution Date;

 

(o)                                 all amounts received
by the Trust from any Swap Counterparty, but only to the extent paid in U.S.
Dollars during that Collection Period;

 

(p)                                 all amounts on deposit
in the Supplemental Interest Account; and

 

(q)                                 amounts transferred
from the Reserve Account in excess of the Specified Reserve Account Balance for
that Distribution Date;

 

provided that if
on any Distribution Date there would not be sufficient funds, after application
of Available Funds, as defined above, and application of amounts available from
the Capitalized Interest Account and the Reserve Account, in that order, to pay
certain of the items specified in clauses (a) through (e) of Section 2.8 of the
Administration Agreement (but excluding clause (e), and including clauses (f)
and (g) thereof, in the event that a condition exists as described in either
clause (i) or (ii) of the last paragraph of Section 2.8 of the Administration
Agreement), as set forth in Sections 2.9 and 2.10(a) of the Administration
Agreement, relating to such allocations and distributions, then Available Funds for
that Distribution Date will include, in addition to the Available Funds as
defined above, amounts on deposit in the Collection Account, or amounts held by
the Administrator, or which the Administrator reasonably estimates to be held
by the Administrator, for deposit into the Collection Account which would have
constituted Available Funds for the Distribution Date succeeding that
Distribution Date, up to the amount necessary to pay such items, and the
Available Funds for the succeeding Distribution Date will be adjusted
accordingly.

 

“Basic
Documents” means the Trust Agreement, the Indenture, the Servicing
Agreement, the Administration Agreement, the Sale Agreement, the Purchase
Agreement, the Guarantee Agreements, the Note Depository Agreements, any
Remarketing Agreement, the Interest Rate Cap Agreement, any Swap Agreements
(including the Initial Interest Rate Swap Agreement) and other documents and
certificates delivered in connection with any such documents.

 

“Benefit
Plan” has the meaning specified in Exhibit C to the Trust Agreement.

 

A-1-6

 

“Bill of
Sale” has the meaning specified in the Purchase Agreement or the Sale
Agreement, as applicable.

 

“Book-Entry
Note” means a beneficial interest in the Notes, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 2.10 of the Indenture.

 

“Business
Day” means (i) with respect to calculating LIBOR of a specified maturity,
any day on which banks in New York, New York and London, England are open for
the transaction of international business; and (ii) for all other purposes, any
day other than a Saturday, a Sunday or a day on which banking institutions or
trust companies in New York, New York or Wilmington, Delaware are authorized or
obligated by law, regulation or executive order to remain closed.

 

“Call
Option” means, the option assigned by the Depositor to SLM Corporation
which may be further assigned by SLM Corporation to one of its subsidiaries as
a permitted transferee (provided, that no such subsidiary shall possess the
Call Option if it at any time owned an interest in any of the Trust Student Loans)
to purchase 100% of the Reset Rate Notes in their entirety as of their Reset
Date, exercisable at a price equal 100% of the Outstanding Amount of the Reset
Rate Notes, less all amounts distributed to the Reset Rate Noteholders as a
payment of principal in respect of the related Distribution Date, plus any
accrued and unpaid interest not paid by the Trust in respect of the related
Distribution Date, and pursuant to the terms and conditions set forth in the
Reset Rate Note Procedures.

 

“Call
Option Notice” means a written notice from the holder of the Call Option or
the Administrator, as applicable, stating its desire to exercise the Call
Option on the related Reset Date, delivered to each Clearing Agency, the
Indenture Trustee, the Remarketing Agents, the Rating Agencies and, if the
Reset Rate Notes is then listed on the Luxembourg Stock Exchange, the
Administrator will forward a copy to the Luxembourg Listing Agent (the contents
of which are to be published in a leading newspaper having general circulation
in Luxembourg).

 

“Call Rate”
means, if the Call Option has been exercised with respect to the Reset Rate
Notes, the rate of interest that is either (1) if the Reset Rate Notes did not
have at least one related Swap Agreement in effect during the previous Reset
Period, the floating rate applicable for the most recent Reset Period during
which the Failed Remarketing Rate was not in effect; or (2) if the Reset Rate
Notes had one or more related Swap Agreements in effect during the previous
Reset Period, the weighted average of the floating rates of interest that were
due to the related Interest Rate Swap Counterparties from the Trust during the
previous Reset Period.  The Call Rate
will continue to apply for each Reset Period while the holder of the Call Option
retains the Reset Rate Notes.

 

“Capitalized
Interest Account” means the account designated as such, established and
maintained pursuant to Section 2.3(h) of the Administration Agreement.

 

“Capitalized
Interest Account Initial Deposit” means $28,000,000.

 

“Carryover
Servicing Fee” has the meaning specified in Attachment A to the Servicing
Agreement.

 

A-1-7

 

“Class A
Note” means, a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a Class
A-4 Note, a Class A-5 Note or a Class A-6 Note.

 

“Class A
Note Interest Shortfall” means, for any Distribution Date, the excess of
(x) the Class A Noteholders’ Interest Distribution Amount on the preceding
Distribution Date, over (y) the amount of interest actually distributed to the
Class A Noteholders on the preceding Distribution Date, plus
(2) interest on the amount of that excess, to the extent permitted by law,
at the interest rate applicable for each such Class of Notes from the
preceding Distribution Date to the current Distribution Date.

 

“Class A
Note Principal Shortfall” means, as of the close of any Distribution Date,
the excess of (i) the Class A Noteholders’ Principal Distribution Amount on
that Distribution Date, over (ii) the amount of principal actually distributed
to the Class A Noteholders or deposited into the Accumulation Account on such
Distribution Date.

 

“Class A
Noteholder” means the Person in whose name a Class A Note is registered in
the Note Register.

 

“Class A
Noteholders’ Distribution Amount” means, for any Distribution Date, the sum
of the Class A Noteholders’ Interest Distribution Amount and the
Class A Noteholders’ Principal Distribution Amount for that Distribution
Date.

 

“Class A
Noteholders’ Interest Distribution Amount” means, for any Distribution
Date, the sum of: (1) the amount of interest accrued at the Class A-1 Rate, the
Class A-2 Rate, the Class A-3 Rate, the Class A-4 Rate, the Class A-5 Rate or
the Class A-6 Rate, as applicable, for the related Accrual Period on the
Outstanding Amount of all classes of Class A Notes on the immediately preceding
Distribution Date(s) after giving effect to all principal distributions to
Class A Noteholders on that preceding Distribution Date or, in the case of the
first Distribution Date, on the Closing Date, and (2) the Class A Note
Interest Shortfall for that Distribution Date.

 

“Class A
Noteholders’ Principal Distribution Amount” means, for any Distribution
Date, the Principal Distribution Amount times the Class A Percentage for that
Distribution Date, plus any Class A Note Principal Shortfall as of the close of
business on the preceding Distribution Date; provided that the Class A
Noteholders’ Principal Distribution Amount will not exceed the Outstanding
Amount of the Class A Notes (less all amounts, other than Investment Earnings,
on deposit in the Accumulation Account). 
In addition, on the Class A-1 Maturity Date, the Class A-2 Maturity
Date, the Class A-3 Maturity Date, the Class A-4 Maturity Date, the Class A-5
Maturity Date or the Class A-6 Maturity Date, as applicable, the principal
required to be distributed to the related Class A Noteholders will include the
amount required to reduce the Outstanding Amount of that class to zero.

 

“Class A
Notes” means the Floating Rate Class A Notes and the Reset Rate Notes.

 

“Class A
Percentage” means 100% minus the Class B Percentage.

 

“Class A-1
Maturity Date” means the January 2015 Distribution Date.

 

“Class A-2
Maturity Date” means the July 2018 Distribution Date.

 

A-1-8

 

“Class A-3
Maturity Date” means the April 2023 Distribution Date.

 

“Class A-4
Maturity Date” means the October 2025 Distribution Date.

 

“Class A-5
Maturity Date” means the July 2028 Distribution Date.

 

“Class A-6
Maturity Date” means the July 2039 Distribution Date.

 

“Class A-1
Noteholder” means a Person in whose name a Class A-1 Note is registered in
the Note Register.

 

“Class A-2
Noteholder” means a Person in whose name a Class A-2 Note is registered in
the Note Register.

 

“Class A-3
Noteholder” means a Person in whose name a Class A-3 Note is registered in
the Note Register.

 

“Class A-4
Noteholder” means a Person in whose name a Class A-4 Note is registered in
the Note Register.

 

“Class A-5
Noteholder” means a Person in whose name a Class A-5 Note is registered in
the Note Register.

 

“Class A-6
Noteholder” means a Person in whose name a Class A-6 Note is registered in
the Note Register.

 

“Class A-1
Notes” means the $575,000,000 Floating Rate Class A-1 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-1 thereto.

 

“Class A-2
Notes” means the $329,000,000 Floating Rate Class A-2 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-2 thereto.

 

“Class A-3
Notes” means the $478,000,000 Floating Rate Class A-3 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-3 thereto.

 

“Class A-4
Notes” means the $246,000,000 Floating Rate Class A-4 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-4 thereto.

 

“Class A-5
Notes” means the $168,000,000 Floating Rate Class A-5 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-5 thereto.

 

A-1-9

 

“Class A-6
Notes” means the $168,515,000 Reset Rate Class A-6 Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-6 thereto.

 

“Class A-1
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.04%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-1 Rate shall mean the
Initial Accrual Rate plus 0.04%, based on an Actual/360 accrual method.

 

“Class A-2
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.14%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-2 Rate shall mean the
Initial Accrual Rate plus 0.14%, based on an Actual/360 accrual method.

 

“Class A-3
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.21%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-3 Rate shall mean the
Initial Accrual Rate plus 0.21%, based on an Actual/360 accrual method.

 

“Class A-4
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.26%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-4 Rate shall mean the
Initial Accrual Rate plus 0.26%, based on an Actual/360 accrual method.

 

“Class A-5
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.32%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-5 Rate shall mean the
Initial Accrual Rate plus 0.32%, based on an Actual/360 accrual method.

 

“Class A-6
Rate” means, for any Accrual Period until and including the Initial Reset
Date for the Class A-6 Notes, 3.46% per annum, based on a 30/360 accrual method
with the initial Accrual Period consisting of 86 days.  The Class A-6 Rate shall be changed on each
related Reset Date to the interest rate and Day Count Basis that will be set
forth in the notice required to be delivered by the Administrator and/or the
Remarketing Agents on each Remarketing Terms Determination Date and Spread
Determination Date, as applicable, pursuant to the procedures set forth in the
Reset Rate Note Procedures.

 

“Class B
Maturity Date” means the July 2039 Distribution Date.

 

“Class B
Note Interest Shortfall” means, for any Distribution Date, (1) the
excess of (x) the Class B Noteholders’ Interest Distribution Amount
on the preceding Distribution Date, over (y) the amount of interest
actually distributed to the Class B Noteholders on that preceding Distribution
Date, plus (2) interest on the amount of that excess, to the extent permitted
by law, at the Class B Rate from that preceding Distribution Date to the
current Distribution Date.

 

“Class B
Note Principal Shortfall” means, as of the close of any Distribution Date,
the excess of (i) the Class B Noteholders’ Principal Distribution Amount on
that Distribution Date

 

A-1-10

 

over (ii) the amount of principal actually
distributed to the Class B Noteholders on that Distribution Date.

 

“Class B
Noteholder” means the Person in whose name a Class B Note is registered in
the Note Register.

 

“Class B
Noteholders’ Distribution Amount” means, for any Distribution Date, the sum
of the Class B Noteholders’ Interest Distribution Amount and the
Class B Noteholders’ Principal Distribution Amount for that Distribution
Date.

 

“Class B
Noteholders’ Interest Distribution Amount” means, for any Distribution
Date, the sum of (1) the amount of interest accrued at the Class B Rate for the
related Accrual Period on the Outstanding Amount of the Class B Notes on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date), after giving effect to all principal
distributions to Class B Noteholders on that preceding Distribution Date, and
(2) the Class B Note Interest Shortfall for that Distribution Date.

 

“Class B
Noteholders’ Principal Distribution Amount” means, for any Distribution
Date, the Principal Distribution Amount times the Class B Percentage for that
Distribution Date, plus any Class B Note Principal Shortfall as of the close of
business on the preceding Distribution Date; provided that the Class B
Noteholders’ Principal Distribution Amount will not exceed the Outstanding
Amount of the Class B Notes.  In
addition, on the Class B Maturity Date, the principal required to be
distributed to the Class B Noteholders will include the amount required to
reduce the Outstanding Amount of the Class B Notes to zero.

 

“Class B
Notes” means the $60,759,000 Floating Rate Class B Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-[7] thereto.

 

“Class B
Percentage” with respect to any Distribution Date, means (1) prior to the
Stepdown Date or with respect to any Distribution Date on which a Trigger Event
is in effect, zero; and (2) on and after the Stepdown Date and provided that no
Trigger Event is in effect, a fraction expressed as a percentage, the numerator
of which is the aggregate principal balance of the Class B Notes immediately
prior to that Distribution Date and the denominator of which is Outstanding
Amount of the Notes, less all amounts (other than Investment Earnings) on
deposit in the Accumulation Account, immediately prior to that Distribution
Date.

 

“Class B
Rate” means, for any Accrual Period after the initial Accrual Date,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.50%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class B Rate shall mean the Initial
Accrual Rate plus 0.50%, based on an Actual/360 accrual method.

 

“Clearing
Agency” means DTC, Euroclear or Clearstream, as applicable, or another
organization registered as a “clearing agency” pursuant to applicable law.  The initial Clearing Agency for the Notes
shall be DTC and the initial nominee for such Clearing Agency shall be Cede
& Co.  The Clearing Agencies for the
Reset Rate Notes (i) for any Reset Period when they are not denominated in U.S.
Dollars shall be Euroclear and Clearstream and the initial joint nominee for
such Clearing Agencies shall be The Bank of New York Depository (Nominees)

 

A-1-11

 

Limited, and (ii) for any Reset Period when
they are denominated in U.S. Dollars shall be DTC, Euroclear or Clearstream, as
applicable.

 

“Clearing
Agency Participant” means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

 

“Clearstream”
means Clearstream Banking, société anonyme, Luxembourg.

 

“Closing
Date” means January 29, 2004.

 

“CMT Rate”
means, for any relevant Interest Rate Determination Date prior to each Interest
Rate Change Date, the rate displayed on the applicable Designated CMT Moneyline
Telerate Page shown below by 3:00 p.m., New York City time, on that Interest
Rate Determination Date under the caption “. 
..  .  Treasury Constant Maturities . 
..  .  Federal Reserve Board Release H.15 .  .  .  Mondays Approximately 3:45 p.m.,” under the
column for: (i) if the Designated CMT Moneyline Telerate Page is 7051, the rate
on that Interest Rate Determination Date; or (ii) if the Designated CMT
Moneyline Telerate Page is 7052, the average for the week, the month or the
quarter, as specified on the Remarketing Terms Determination Date, ended
immediately before the week in which the Interest Rate Determination Date
occurs.  The following procedures will
apply if the CMT Rate cannot be determined as described above: (i) if the rate
described above is not displayed on the relevant page by 3:00 p.m., New York
City time on that Interest Rate Determination Date, unless the calculation is
made earlier and the rate is available from that source at that time on that
Interest Rate Determination Date, then the CMT Rate will be the Treasury
constant maturity rate having the designated index maturity, as published in
H.15(519) or another recognized electronic source for displaying the rate, (ii)
if the applicable rate described above is not published in H.15(519) or another
recognized electronic source for displaying such rate by 3:00 p.m., New York
City time on that Interest Rate Determination Date, unless the calculation is
made earlier and the rate is available from one of those sources at that time,
then the CMT Rate will be the Treasury constant maturity rate, or other United
States Treasury rate, for the index maturity and with reference to the relevant
Interest Rate Determination Date, that is published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury and that the Administrator determines to be comparable to the rate
formerly displayed on the Designated CMT Moneyline Telerate Page shown above
and published in H.15(519), (iii) if the rate described in the prior paragraph
cannot be determined, then the Administrator will determine the CMT Rate to be
a yield to maturity based on the average of the secondary market closing
offered rates as of approximately 3:30 p.m., New York City time, on the
relevant Interest Rate Determination Date reported, according to their written
records, by leading primary United States government securities dealers in New
York City.  The Administrator will
select five such securities dealers and will eliminate the highest and lowest
quotations or, in the event of equality, one of the highest and lowest
quotations, for the most recently issued direct noncallable fixed rate
obligations of the United States Treasury (“Treasury Notes”) with an original
maturity of approximately the designated index maturity and a remaining term to
maturity of not less than the designated index maturity minus one year in a
representative amount, (iv) if the Administrator cannot obtain three Treasury
Note quotations of the kind described above in (iii), the Administrator will
determine the CMT Rate to be the yield to maturity based on the average

 

A-1-12

 

of the secondary market bid rates for
Treasury Notes with an original maturity longer than the designated CMT index
maturity which have a remaining term to maturity closest to the designated CMT
index maturity and in a representative amount, as of approximately 3:30 p.m.,
New York City time, on the relevant Interest Rate Determination Date of leading
primary United States government securities dealers in New York City.  In selecting these offered rates, the
Administrator will request quotations from at least five such securities
dealers and will disregard the highest quotation (or if there is equality, one
of the highest) and the lowest quotation (or if there is equality, one of the
lowest).  If two Treasury Notes with an
original maturity longer than the designated CMT index maturity have remaining
terms to maturity that are equally close to the designated CMT index maturity,
the Administrator will obtain quotations for the Treasury Note with the shorter
remaining term to maturity, (v) if three or four but not five leading primary
United States government securities dealers are quoting as described in the
prior paragraph, then the CMT Rate for the relevant Interest Rate Determination
Date will be based on the average of the bid rates obtained and neither the
highest nor the lowest of those quotations will be eliminated, or (vi) if fewer
than three leading primary United States government securities dealers selected
by the Administrator are quoting as described in (v) above, the CMT Rate will
remain the CMT Rate then in effect on that Interest Rate Determination Date.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and
Treasury Regulations promulgated thereunder.

 

“Collateral”
has the meaning specified in the Granting Clause of the Indenture.

 

“Collection
Account” means the account designated as such, established and maintained
pursuant to Section 2.3(f) of the Administration Agreement.

 

“Collection
Account Initial Deposit” means $2,721,028.

 

“Collection
Period” means, with respect to the first Distribution Date, the period
beginning on the Cutoff Date and ending on March 31, 2004, and with respect to
each subsequent Distribution Date, the Collection Period means the three
calendar months immediately following the end of the previous Collection
Period.

 

“Commercial
Paper Rate” means, for any relevant Interest Rate Determination Date prior
to each Interest Rate Change Date, the Bond Equivalent Yield shown below of the
rate for 90-day commercial paper, as published in H.15(519) prior to 3:00 p.m.,
New York City time, on that Interest Rate Determination Date under the heading
“Commercial Paper—Financial”.  If the
rate described above is not published in H.15(519) by 3:00 p.m., New York City
time, on that Interest Rate Determination Date, unless the calculation is made
earlier and the rate was available from that source at that time, then the
Commercial Paper Rate will be the Bond Equivalent Yield of the rate on the
relevant Interest Rate Determination Date, for commercial paper having the
index maturity specified on the Remarketing Terms Determination Date, as
published in H.15 Daily Update or any other recognized electronic source used
for displaying that rate under the heading “Commercial Paper—Financial”.  For purposes of the definition of
“Commercial Paper Rate”, the “Bond Equivalent Yield” equals [(NxD)]/[360(Dx90)]
times 100, where “D” refers to the per annum rate determined as set forth
above, quoted on a bank discount basis and expressed as a decimal and “N”
refers to 365 or 366, as the case may be. 
If the rate described above cannot be

 

A-1-13

 

determined, the Commercial Paper Rate will
remain the commercial paper rate then in effect on that Interest Rate
Determination Date.  Unless otherwise
specified on the Remarketing Terms Determination Date, the Commercial Paper Rate
will be subject to a Lock-In Period of six Business Days.

 

“Commission”
means the Securities and Exchange Commission.

 

“Consolidation
Loans” means Student Loans made in accordance with the Section 428C of the
Higher Education Act.

 

“Corporate
Trust Office” means (i) with respect to the Indenture Trustee, the
principal office of the Indenture Trustee at which at any particular time its
corporate trust business shall be administered, which office at the Closing
Date is located at 101 Barclay Street 8 West, New York, New York 10286,
Attention: Corporate Trust Group (telephone: (212) 815-3247, facsimile:
(212) 815-3883) or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Depositor, or
the principal corporate trust office of any successor Indenture Trustee (the
address of which the successor Indenture Trustee will notify the Noteholders,
the Administrator and the Depositor) and (ii) with respect to the Eligible
Lender Trustee, the principal corporate trust office of the Eligible Lender
Trustee located at Christiana Center/OPS4, 500 Stanton Christiana Road, Newark,
Delaware 19713, Attention:  Corporate
Trust Department (telephone: (302) 552-6279; facsimile: (302) 552-6280); or at
such other address as the Eligible Lender Trustee may designate by notice to
the Depositor, or the principal corporate trust office of any successor
Eligible Lender Trustee (the address of which the successor Eligible Lender
Trustee will notify the Administrator and the Depositor).

 

“Cross-Currency
Swap Agreements” means, with respect to the Reset Rate Notes in Foreign
Exchange Mode, each Swap Agreement between the Trust and the related
Cross-Currency Swap Counterparty which (a)  converts its specified
percentage of all payments of U.S. Dollars by the Trust to the Reset Rate
Noteholders into the applicable currency, and (b) pays to the Paying
Agent, on behalf of the Trust, for the benefit of the tendering Reset Rate
Noteholders, its specified percentage of required additional interest at the
interest rate applicable to the tendered Reset Rate Notes resulting from any
required delay in Reset Date payments through Euroclear and Clearstream.

 

“Cross-Currency
Swap Counterparty” means each Eligible Swap Counterparty which is a party,
in its capacity as swap counterparty, to the related Cross-Currency Swap
Agreement.

 

“Custodian”
has the meaning specified in Section 2.1 of the Indenture.

 

“Cutoff
Date” means January 5, 2004.

 

“Day Count
Basis” means 30/360, Actual/360, Actual/365 (fixed), Actual/Actual (accrual
basis), Actual/Actual (ISMA) or Actual/Actual (payment basis), as applicable,
or any other day count basis set forth in the Remarketing Terms Notice.

 

“Default”
means any occurrence that is, or with notice or the lapse of time or both would
become, an Event of Default.

 

A-1-14

 

“Definitive
Notes” has the meaning specified in Section 2.10 of the Indenture.

 

“Delaware
Statutory Trust Act” means Chapter 38 of Title 12, Part V of the Delaware
Code, entitled “Treatment of Delaware Statutory Trusts”.

 

“Delivery”
when used with respect to Trust Account Property means:

 

(a)                                  with respect to
bankers’ acceptances, commercial paper, negotiable certificates of deposit and
other obligations that constitute “instruments” within the meaning of Section
9-102(a)(47) of the UCC and are susceptible of physical delivery, transfer
thereof to the Indenture Trustee or its nominee or custodian by physical
delivery to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank, and, with respect to a certificated security (as defined in
Section 8-102(a)(3) of the UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank to a securities
intermediary (as defined in Section 8-102(a)(14) of the UCC) and the making by
such securities intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or its
nominee or custodian and the sending by such securities intermediary of a
confirmation of the purchase of such certificated security by the Indenture
Trustee or its nominee or custodian, or (ii) by delivery thereof to a “clearing
corporation” (as defined in Section 8-102(a)(5) of the UCC) and the making by
such clearing corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate securities
account of a securities intermediary by the amount of such certificated
security, the identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the securities intermediary,
the maintenance of such certificated securities by such clearing corporation or
the nominee of either subject to the clearing corporation’s exclusive control,
the sending of a confirmation by the securities intermediary of the purchase by
the Indenture Trustee or its nominee or custodian of such securities and the
making by such securities intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee
or its nominee or custodian (all of the foregoing, but not including Trust
Student Loans, “Physical Property”); and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Indenture Trustee or its
nominee or custodian, consistent with changes in applicable law or regulations
or the interpretation thereof;

 

(b)                                 with respect to any
security issued by the U.S. Treasury, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association that is a book-entry security held at a Federal Reserve
Bank pursuant to Federal book-entry regulations, the following procedures, all in
accordance with applicable law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: the crediting of such book-entry security to an
appropriate book-entry account of the Indenture Trustee or its nominee or the
custodian or securities intermediary at a Federal Reserve Bank, causing the
custodian to continuously indicate by book-entry such book-entry security as
credited to the relevant book-entry account, the continuous crediting of such
book-entry security to a securities account of the custodian at such Federal
Reserve Bank and the continuous

 

A-1-15

 

identification
of such book-entry security by the custodian as credited to the appropriate
book-entry account; and

 

(c)                                  with respect to any
item of Trust Account Property that is an uncertificated security under Article
8 of the UCC and that is not governed by clause (b) above, registration on the
books and records of the issuer thereof in the name of the securities
intermediary, the sending of a confirmation by the securities intermediary of
the purchase by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such securities intermediary of entries
on its books and records identifying such uncertificated certificates as
belonging to the Indenture Trustee or its nominee or custodian.

 

“Department”
means the United States Department of Education, an agency of the Federal
government.

 

“Depositor”
means SLM Funding LLC, a Delaware limited liability company, and its successors
and assigns, including for such purpose, a permitted transferee of all of SLM
Funding LLC’s right, title and interest in the Excess Distribution Certificate.

 

“Depository
Agreements” means the Note Depository Agreements.

 

“Determination
Date” means, with respect to the Collection Period preceding any
Distribution Date, the first Business Day preceding such Distribution Date.

 

“Distribution
Date” means for any class of Notes, the 25th day of each of January, April,
July and October, or, if such day is not a Business Day, the immediately
following Business Day, commencing on April 26, 2004.

 

“DTC”
means the Depository Trust Company, or any successor thereto.

 

“Eligible
Deposit Account” means (i) with respect to the Trust Accounts other
than any Other Currency Account, either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the States or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers and acting as
trustee for funds deposited in such account, so long as any of the securities
of such depository institution have a credit rating from Moody’s, S&P, and,
if such institution is rated by Fitch, Fitch, in one of their generic rating
categories which signifies investment grade and (ii) with respect to any
Other Currency Account, a segregated account with the London Paying Agent.

 

“Eligible
Institution” means a depository institution organized under the laws of the
United States of America or any one of the States or the District of Columbia
(or any domestic branch of a foreign bank) (i) which has (A) either a long-term
senior unsecured debt rating of “AAA” or a short-term senior unsecured debt or
certificate of deposit rating of “A-1+” or better by S&P and (B)(1) a
long-term senior unsecured debt rating of “A1” or better and (2) a short-term
senior unsecured debt rating of “P-1” or better by Moody’s, and (C) if such
institution is rated by Fitch, a long-term senior unsecured debt rating of “AA”
or a short-term senior unsecured debt rating of “F-1+”, or any other long-term,
short-term or certificate of deposit rating with respect to which the Rating
Agency Condition has been satisfied and (ii) whose

 

A-1-16

 

deposits are insured by the FDIC.  If so qualified, the Eligible Lender Trustee
or the Indenture Trustee may be considered an Eligible Institution.

 

“Eligible
Investments” means book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form which
evidence:

 

(a)                                  direct obligations
of, and obligations fully guaranteed as to timely payment by, the United States
of America, the Government National Mortgage Association, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, SLMA, 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;
provided that obligations of, or guaranteed by, the Government National
Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association or SLMA shall be Eligible Investments only if, at
the time of investment, they meet the criteria of each of the Rating Agencies
for collateral for securities having ratings equivalent to the respective
ratings of the Notes in effect at the Closing Date;

 

(b)                                 demand deposits, time
deposits or certificates of deposit of any depository institution or trust
company incorporated under the laws of the United States of America or any
State (or any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with respect to any obligation referred to in clause (a) above or
portion of such obligation for the benefit of the holders of such depository
receipts); provided that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Distribution Date), the commercial paper or
other short-term senior unsecured debt obligations (other than such obligations
the rating of which is based on the credit of a Person other than such
depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category granted
thereby;

 

(c)                                  commercial paper
having, at the time of the investment, a rating from each of the Rating
Agencies in the highest investment category granted thereby;

 

(d)                                 investments in money
market funds having a rating from each of the Rating Agencies in the highest
investment category granted thereby (including funds for which the Indenture
Trustee, the Administrator or the Eligible Lender Trustee or any of their respective
Affiliates is investment manager or advisor);

 

(e)                                  bankers’ acceptances
issued by any depository institution or trust company referred to in clause (b)
above;

 

(f)                                    repurchase
obligations with respect to any security that is a direct obligation of, or
fully guaranteed by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States of America, in either case entered into with a
depository institution or trust company (acting as principal) described in
clause (b) above;

 

A-1-17

 

(g)                                 asset-backed
securities, including asset-backed securities issued by Affiliates, or entities
formed by Affiliates, of SLMA, but excluding mortgage-backed securities, that
at the time of investment have a rating in the highest investment category
granted by each of the Rating Agencies; provided that the purchase price of any
such asset-backed security in excess of par must be paid for with amounts on
deposit in the Investment Premium Purchase Account;

 

(h)                                 Eligible Repurchase
Obligations; and

 

(i)                                     any other
investment which would not result in the downgrading or withdrawal of any
rating of the Notes by any of the Rating Agencies as affirmed in writing
delivered to the Indenture Trustee.

 

For purposes
of the definition of “Eligible Investments” the phrase “highest investment
category” means (i) in the case of Fitch, “AAA” for long-term investments (or
the equivalent) and “F-1+” for short-term investments (or the equivalent), (ii)
in the case of Moody’s, “Aaa” for long-term investments (or the equivalent) and
“P-1” for short-term investments (or the equivalent), and (iii) in the case of
S&P, “AAA” for long-term investments (or the equivalent) and “A-1+” for
short-term investments (or the equivalent). 
A proposed investment not rated by Fitch but rated in the highest
investment category by Moody’s and S&P shall be considered to be rated by
each of the Rating Agencies in the highest investment category granted thereby.

 

“Eligible
Lender Trustee” means Chase Manhattan Bank USA, National Association, a
national banking association, not in its individual capacity but solely as
Eligible Lender Trustee under the Trust Agreement.  “Eligible Lender Trustee” shall also mean each successor Eligible
Lender Trustee as of the qualification of such successor as Eligible Lender
Trustee under the Trust Agreement.

 

“Eligible
Loans” has the meaning specified in the Purchase Agreement or the Sale
Agreement, as applicable.

 

“Eligible
Repo Counterparty” means an institution that is an eligible lender (under
the Family Federal Family Education Loan Program) or that holds Student Loans
through an eligible lender trustee and whose short-term debt ratings are not
less than “P-1” by Moody’s,  “A-1” by
S&P and “F-1” by Fitch, if rated by Fitch.

 

“Eligible
Repurchase Obligations” means repurchase obligations with respect to
Student Loans serviced by the Servicer or an Affiliate thereof, entered into
with an Eligible Repo Counterparty, provided that the applicable repurchase
date shall occur no later than the Business Day prior to the next Distribution
Date.

 

“Eligible
Swap Counterparty” means an entity, which may be an affiliate of a
Remarketing Agent, engaged in the business of entering into derivative
instrument contracts that satisfies the Rating Agency Condition.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“Euroclear”
means the Euroclear System, or any successor thereto.

 

A-1-18

 

“European
Clearing Systems” means Euroclear or Clearstream.

 

“Event of
Default” has the meaning specified in Section 5.1 of the Indenture.

 

“Excess
Distribution Certificate” means the certificate, substantially in the form
of Exhibit A to the Trust Agreement, evidencing the right to receive payments
thereon as set forth in Sections 2.8(p), 2.9(f) and 2.10(a)(ii) of the
Administration Agreement.

 

“Excess
Distribution Certificate Paying Agent” means any paying agent or co-paying
agent appointed pursuant to Section 3.13(g) of the Trust Agreement, which shall
initially be the Indenture Trustee.

 

“Excess
Distribution Certificate Register” and “Excess Distribution Certificate
Registrar” mean the register mentioned and the registrar appointed pursuant
to Section 3.13(c) of the Trust Agreement.

 

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

 

“Executive
Officer” means, with respect to any corporation, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, President, any
Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.

 

“Expenses”
means any and all liabilities, obligations, losses, damages, taxes, 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 which may at any time be imposed on, incurred by, or asserted
against the Eligible Lender Trustee or any of its officers, directors or agents
in any way relating to or arising out of the Trust Agreement, the other Basic
Documents, the Trust Estate, the administration of the Trust Estate or the
action or inaction of the Eligible Lender Trustee under the Trust Agreement or
the other Basic Documents.

 

“Extension
Rate” means, for each Distribution Date following a Failed Remarketing if
the Reset Rate Notes are then in Foreign Exchange Mode, the rate of interest
payable to each related Cross-Currency Swap Counterparty, not to exceed
Three-Month LIBOR plus 0.75%, unless the Remarketing Agents, in consultation
with the Administrator, determine that market conditions or some other benefit
to the Trust requires a higher rate; provided that in such case the Rating
Agency Condition is satisfied.

 

“Failed
Remarketing” means, on any Reset Date for the Reset Rate Notes, the
situation where:

 

(a)                                  the Remarketing
Agents, in consultation with the Administrator, cannot establish one or more of
the terms required to be set on the Remarketing Terms Determination Date;

 

(b)                                 the Remarketing Agents
are unable to establish the Spread or fixed rate on the Spread Determination
Date;

 

A-1-19

 

(c)                                  either the
Remarketing Agents are unable to remarket some or all of the tendered Reset
Rate Notes at the Spread or fixed rate established on the Spread Determination
Date, or any committed purchasers default on their purchase obligations and in
their sole discretion, the Remarketing Agents elect not to purchase those Reset
Rate Notes themselves;

 

(d)                                 the Remarketing
Agents, in consultation with the Administrator, are unable to obtain one or
more Swap Agreements meeting the required criteria, if applicable;

 

(e)                                  any of the conditions
specified in Section 8 of the Remarketing Agreement are not satisfied; or

 

(f)                                    any applicable
Rating Agency Condition has not been satisfied.

 

“Failed
Remarketing Rate” means, for any Reset Period when the Reset Rate Notes are
then denominated in U.S. Dollars, Three-Month LIBOR plus 0.75%; and for the
Reset Rate Notes while in Foreign Exchange Mode, as will be determined on the
Spread Determination Date pursuant to the terms of the related Cross-Currency
Swap Agreement.

 

“FDIC”
means the Federal Deposit Insurance Corporation.

 

“Federal
Funds Rate” means the rate set forth for such day opposite the caption
“Federal Funds (effective)” in the weekly statistical release designated
H.15(519), or any successor publication, published by the Board of Governors of
the Federal Reserve System.  If such
rate is not published in the relevant H.15(519) for any day, the rate for such
day shall be the arithmetic mean of the rates for the last transaction in
overnight Federal Funds arranged prior to 9:00 a.m. New York City time on that
day by each of four leading brokers in such transactions located in New York
City selected by the Administrator.  The
Federal Funds rate for each Saturday and Sunday and for any other that is not a
Business Day shall be the Federal Funds Rate for the preceding Business Day as
determined above.

 

“Fitch”
means Fitch Inc., also known as Fitch Ratings, or any successor rating agency.

 

“Floating
Rate Class A Notes” means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes and Class A-5 Notes.

 

“Floating
Rate Noteholder” means the Person in whose name a Floating Rate Note is
registered in the Note Register.

 

“Floating
Rate Notes” means the Floating Rate Class A Notes and the Class B Notes.

 

“Foreign
Exchange Mode” means that the Reset Rate Notes are then denominated in a
currency other than U.S. Dollars during the related Reset Period.

 

“GBP-LIBOR”
means, with respect to any Accrual Period, will be the London interbank offered rate for
deposits in Pounds Sterling having the specified maturity commencing on the
first day of the Accrual Period, which appears on Telerate Page 3750 as of
11:00 a.m. London time, on the related GBP-LIBOR Determination Date.  If an applicable rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the basis of
the rates at which

 

A-1-20

 

deposits in Pounds
Sterling, having the specified maturity and in a principal amount of not less
than £1,000,000, are offered at approximately 11:00 a.m., London time, on that
GBP-LIBOR Determination Date, to prime banks in the London interbank market by
the Reference Banks.  The Administrator
will request the principal London office of each Reference Bank to provide a
quotation of its rate.  If the Reference
Banks provide at least two quotations, the rate for that day will be the
arithmetic mean of the quotations.  If
the Reference Banks provide fewer than two quotations, the rate for that day
will be the arithmetic mean of the rates quoted by prime banks in London,
selected by the Administrator, at approximately 11:00 a.m. New York time, on
that GBP-LIBOR Determination Date, for loans in Pounds Sterling to leading
European banks having the specified maturity and in a principal amount of not
less than £1,000,000.  If the banks
selected as described above are not providing quotations, GPB-LIBOR in effect
for the applicable Accrual Period will be GBP-LIBOR for the specified maturity
in effect for the previous Accrual Period. 
For any GBP-LIBOR-based notes, interest due for any accrual period
always will be determined based on the actual number of days elapsed in the
accrual period over a 365-day year.

 

“GBP-LIBOR
Determination Date” means, for each Accrual Period, the second Settlement
Day before the beginning of that Accrual Period.

 

“Global
Note Certificate” means a global note certificate representing interests in
the Reset Rate Notes offered and sold in reliance on Rule 144A or
Regulation S, as applicable.

 

“Grant”
means mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create and grant a lien upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the Indenture.  A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.

 

“Guarantee
Agreement” means any agreement between any Guarantor and the Eligible
Lender Trustee providing for the payment by the Guarantor of amounts authorized
to be paid pursuant to the Higher Education Act to holders of qualifying
Student Loans guaranteed in accordance with the Higher Education Act by such
Guarantor.

 

“Guarantee
Payment” means any payment made by a Guarantor pursuant to a Guarantee
Agreement in respect of a Trust Student Loan.

 

“Guarantor”
means any entity listed on Attachment B (as amended from time to time) to
the Sale Agreement the Purchase Agreement.

 

“H.15(519)”  means
the weekly statistical release designated as such, or any successor
publication, published by the Board of Governors of the United States Federal
Reserve System.

 

A-1-21

 

“H.15 Daily
Update”
means the daily update for H.15(519), available through the world
wide web site of the Board of Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any successor site or
publications.

 

“Higher
Education Act” means the Higher Education Act of 1965, as amended, together
with any rules, regulations and interpretations thereunder.

 

“Hold
Notice” means a written statement (or an oral statement confirmed in
writing, which may be by e-mail) from a holder or beneficial owner of a Reset
Rate Note delivered to a Remarketing Agent that such holder or beneficial owner
desires to hold its Reset Rate Notes for the upcoming Reset Period and
affirmatively agrees to receive a rate of interest of not less than the
applicable All Hold Rate during that Reset Period.

 

“Indenture”
means the Indenture, dated as of January 1, 2004, among the Eligible Lender
Trustee on behalf of the Trust, the Trust and the Indenture Trustee.

 

“Indenture
Trust Estate” means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of the
Indenture for the benefit of the Noteholders and, as applicable, each Swap
Counterparty (including all Collateral Granted to the Indenture Trustee),
including all proceeds thereof.

 

“Indenture
Trustee” means The Bank of New York, a New York banking corporation, not in
its individual capacity but solely as trustee under the Indenture.

 

“Independent”
means, when used with respect to any specified Person, that the Person (a) is
in fact independent of the Trust, any other obligor upon the Notes, the
Depositor and any Affiliate of any of the foregoing Persons, (b) does not have
any direct financial interest or any material indirect financial interest in
the Trust, any such other obligor, the Depositor or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Trust, any such other
obligor, the Depositor or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, placement agent, trustee, partner,
director or person performing similar functions.

 

“Independent
Certificate” means a certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion
or certificate shall state that the signer has read the definition of
“Independent” in the Indenture and that the signer is Independent within the
meaning thereof.

 

“Index”
or “Indices” means LIBOR, GBP-LIBOR, a Commercial Paper Rate, the CMT
Rate, the Federal Funds Rate, the 91-day Treasury Bill Rate, the Prime Rate or
any other interest rate index specified in Schedule A to the Reset Rate Notes.

 

“Index
Maturity” means, with respect to any Accrual Period, the interval between
Interest Rate Change Dates for each applicable Index during such Accrual
Period, commencing on the first day of that Accrual Period.

 

A-1-22

 

“Initial
Accrual Rate” means for each class of Notes (other than the Reset Rate
Notes during their initial Reset Period) and the Accrual Period commencing on
the Closing Date to, but excluding, the first Distribution Date, the rate per
annum as determined on the related Determination Date, as follows:

 

X + [28/31 * (Y - X)]

 

where:

 

X = Two-Month LIBOR, and

Y = Three-Month] LIBOR

 

“Initial
Interest Rate Swap Agreement” means, with respect to the Reset Rate Notes,
the Swap Agreement, dated as of January 29, 2004 between the Trust and the
Initial Interest Rate Swap Counterparty.

 

“Initial
Interest Rate Swap Counterparty” means, Lehman Brothers Special Financing
Inc.

 

“Initial
Pool Balance” means the Pool Balance as of the Cutoff Date, which is
$2,005,222,737.

 

“Initial
Purchasers” means, collectively, Lehman Brothers Inc., Morgan Stanley &
Co. Incorporated, Goldman Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Greenwich Capital Markets, Inc.

 

“Initial
Remarketing Agency Agreement” means each agreement, substantially in the
form of Appendix B to the Remarketing Agreement to be entered into on each
Remarketing Terms Determination Date (unless the Call Option has been
exercised) among the Remarketing Agents, the Administrator and the Trust.

 

“Initial
Reset Date” means, for the Reset Rate Notes, the Distribution Date in
January 2009.

 

“Initial
Reset Date Notice” means the written notice delivered pursuant to Section
3(a) of the Reset Rate Note Procedures.

 

“Insolvency
Event” means, 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, 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, which decree or order remains 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,

 

A-1-23

 

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.

 

“Interest
Rate Cap Agreement” means the agreement between the Trust and the Interest
Rate Cap Swap Counterparty, dated January 21, 2004, documented under a 1992
ISDA Master Agreement (Multicurrency-Cross Border), including the related
schedule and confirmation, providing for certain payments to the Trust, in the
amounts and under the conditions set forth therein, which will terminate in
accordance with its terms on or before the April 2005 Distribution Date.

 

“Interest
Rate Cap Confirmation” means the confirmation executed under the Interest
Rate Cap Agreement, dated as of January 21, 2004, representing the interest
rate cap in a notional amount of $400,000,000.

 

“Interest
Rate Cap Swap Counterparty” means Merrill Lynch Derivative Products AG and
any successors or permitted assigns.

 

“Interest
Rate Change Date” means for each Accrual Period, the date or dates, based
on the applicable Index, on which the rate of interest for the Reset Rate Notes
bearing interest at a floating rate is to be reset.

 

“Interest
Rate Determination Date” means, for each Accrual Period, and (i) for the
Reset Rate Notes that bear interest at a LIBOR or GBP-LIBOR-based rate, the
related LIBOR or GBP-LIBOR Determination Date, as applicable, or (ii) for
the Reset Rate Notes that bear interest at a floating rate that is not
LIBOR-based, the applicable date or dates set forth in the Remarketing Terms
Notice, on which the applicable rate of interest to be in effect as of the next
Interest Rate Change Date will be determined by the Administrator.

 

 “Interest Rate Swap Agreement” means,
the Initial Interest Rate Swap Agreement and with respect to the Reset Rate
Notes during any Reset Period when they are denominated in U.S. Dollars and (i)
bear a fixed rate of interest (or bear interest based on LIBOR or a U.S.
Commercial Paper Rate, if a Swap Agreement is to be entered into per the Reset
Rate Note Procedures), or (ii) bear interest based on an index other than LIBOR
or a U.S. Commercial Paper Rate, any Swap Agreement between the Trust and an
Eligible Swap Counterparty, to hedge the basis risk during the Reset Period.

 

“Interest
Rate Swap Counterparty” means the Initial Interest Rate Swap Counterparty
and each additional Eligible Swap Counterparty with which the Trust enters into
an Interest Rate Swap Agreement.

 

“Interest
Subsidy Payments” means payments, designated as such, consisting of
interest subsidies by the Department in respect of the Trust Student Loans to
the Eligible Lender Trustee on behalf of the Trust in accordance with the
Higher Education Act.

 

“Interim
Eligible Lender Trustee” means Chase Manhattan Bank USA, National
Association, a national banking association, not in its individual capacity but
solely as Interim

 

A-1-24

 

Eligible Lender Trustee under the Interim
Trust Agreement.  “Interim Eligible
Lender Trustee” shall also mean each successor Interim Eligible Lender Trustee
as of the qualification of such Interim Eligible Lender Trustee under the
Interim Trust Agreement.

 

“Interim
Trust Agreement” means the Interim Trust Agreement, dated as of January 1,
2004, between the Depositor and the Interim Eligible Lender Trustee.

 

“Interim
Trust Loans” has the meaning set forth in the Interim Trust Agreement.

 

“Investment
Earnings” means, with respect to any Distribution Date, the Investment
Earnings (net of losses and investment expenses) on amounts on deposit in the
Trust Accounts to be deposited into the Collection Account on or prior to such
Distribution Date pursuant to Section 2.3(b) of the Administration Agreement.

 

“Investment
Premium Purchase Account” means an account designated as such, established
and maintained pursuant to Section 2.3(l) of the Administration Agreement.

 

“Investment
Premium Purchase Account Deposit Amount” means, with respect to each
Distribution Date when funds are deposited into the Accumulation Account, an
amount equal to 1.00% of the amount deposited into the Accumulation Account on
such Distribution Date.

 

“Investment
Premium Purchase Account Release Amount” means, with respect to any
Distribution Date that is one year or less prior to a Reset Date relating to
the Reset Rate Notes for which funds are then on deposit in the Accumulation Account,
the amount, if any, to be withdrawn from the Investment Premium Purchase
Account so that the remaining funds on deposit in such Investment Premium
Purchase Account will be equal to the lesser of (a) 1.00% of the amount on
deposit in the Accumulation Account, and (b) the amount then on deposit
the Investment Premium Purchase Account; provided that on any Distribution Date
that is also a Reset Date for the Reset Rate Notes for which amounts are then
on deposit in the Accumulation Account, all Investment Premium Purchase Account
Deposit Amounts relating to such Accumulation Account that remain on deposit in
the Investment Premium Purchase Account will become part of the Investment
Premium Purchase Account Release Amount on such Distribution Date.

 

“Investment
Reserve Account” means an account designated as such, established and
maintained pursuant to Section 2.3(m) of the Administration Agreement.

 

“Investment
Reserve Account Required Amount” means, with respect to each Distribution
Date, immediately following the date when the ratings of any Eligible
Investment in the Accumulation Account has been downgraded by one or more
Rating Agencies, an amount (to the extent of Available Funds), to be set by
each applicable Rating Agency in satisfaction of the Rating Agency Condition
(but not
to exceed the amount of the unrealized loss on the related Eligible Investment).

 

“Issuer”
means the Trust and, for purposes of any provision contained in the Indenture
and required by the TIA, each other obligor on the Notes.

 

A-1-25

 

“Issuer
Order” and “Issuer Request” means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered
to the Indenture Trustee.

 

“LIBOR”
means Three-Month LIBOR and Two-Month LIBOR, as applicable.

 

“LIBOR
Determination Date” means, for each Accrual Period, the second Business Day
before the beginning of that Accrual Period.

 

“Lien”
means a security interest, lien, charge, pledge, equity or encumbrance of any
kind, other than tax liens and any other liens, if any, which attach to the
respective Trust Student Loan by operation of law as a result of any act or
omission by the related Obligor.

 

“Liquidated
Student Loan” means any defaulted Trust Student Loan liquidated by the
Servicer (which shall not include any Trust Student Loan on which Guarantee
Payments are received) or which the Servicer has, after using all reasonable
efforts to realize upon such Trust Student Loan, determined to charge off.

 

“Liquidation
Proceeds” means, with respect to any Liquidated Student Loan which became a
Liquidated Student Loan during the current Collection Period in accordance with
the Servicer’s customary servicing procedures, the moneys collected in respect
of the liquidation thereof from whatever source, other than Recoveries, net of
the sum of any amounts expended by the Servicer in connection with such
liquidation and any amounts required by law to be remitted to the Obligor on
such Liquidated Student Loan.

 

“Loan”
has the meaning set forth in Section 2 of the Purchase Agreement.

 

“Lock-In
Period” means a period from the first day of such Lock-In Period (which may
be expressed as a number of Business Days prior to a Distribution Date) to the
immediately succeeding Interest Payment Date during which the interest rate,
Index or other calculation in effect on the first day of such Lock-In Period
shall remain in effect for every day in such Lock-In Period.

 

“London
Paying Agent” means, with respect to the Reset Rate Notes while in Foreign
Exchange Mode, the Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in Section 6.11
of the Indenture and is authorized by the Eligible Lender Trustee on behalf of
the Trust to make the payments to and distributions from the Other Currency
Account and shall initially be The Bank of New York London.

 

“Luxembourg
Listing Agent” means, initially, The Bank of New York (Luxembourg) S.A.

 

“Luxembourg
Paying Agent” means, initially, The Bank of New York (Luxembourg) S.A.

 

“Minimum
Purchase Amount” means an amount that would be sufficient to (i) reduce the
Outstanding Amount of each class of Notes, less the amount on deposit in the
Accumulation Account with respect to the Reset Rate Notes, on such Distribution
Date to zero and (ii) pay to

 

A-1-26

 

the respective Noteholders the Class A
Noteholders’ Interest Distribution Amount and the Class B Noteholders’
Interest Distribution Amount payable on such Distribution Date.

 

“Monthly
Servicing Payment Date” means the 25th day of each calendar
month or, if such day is not a Business Day, the immediately following Business
Day, commencing on February 25, 2004.

 

“Moody’s”
means Moody’s Investors Service, Inc., or any successor rating agency.

 

“Non-U.S.
Global Note Certificates” has the meaning specified in Section 2.1 of the
Indenture.

 

“Non-U.S.
Rule 144 A Global Note Certificate” has the meaning specified in Section
2.1 of the Indenture.

 

“Note”
and “Notes” means any of the Floating Rate Notes and the Reset Rate
Notes.

 

“Note
Depository Agreements” means with respect to the Notes, the Letter of
Representations, dated January 29, 2004, among the Trust, the Eligible Lender
Trustee and the Indenture Trustee in favor of DTC, and with respect to the
Reset Rate Notes, the Instruction Letter from Issuer to Common Depositary,
dated January 29, 2004 between the Trust and The Bank of New York Depository
(Nominees) Limited.

 

“Note Final
Maturity Date” for a class of Notes means the Class A-1 Maturity Date,
the Class A-2 Maturity Date, the Class A-3 Maturity Date, the Class A-4
Maturity Date, the Class A-5 Maturity Date, the Class A-6 Maturity Date or the
Class B Maturity Date, as applicable.

 

“Note
Interest Shortfall” means the Class A Note Interest Shortfall, if any,
and/or the Class B Note Interest Shortfall, as applicable.

 

“Note Owner”
means, with respect to a Book-Entry Note, the Person who is the owner of such
Book-Entry Note, as reflected on the books of the applicable Clearing Agency,
or on the books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).

 

“Note Pool
Factor” means, as of the close of business on a Distribution Date, a
seven-digit decimal figure equal to the Outstanding Amount of a class of Notes
divided by the original Outstanding Amount of such class of Notes.  The Note Pool Factor for each class will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor for each
class will decline to reflect reductions in the Outstanding Amount of that
class of Notes.

 

“Note
Purchase Agreement” means the Note Purchase Agreement dated as of
January 21, 2004, among the Depositor, the Seller and the Initial
Purchasers.

 

A-1-27

 

“Note Rates”
means, with respect to any Accrual Period, the Class A-1 Rate, the Class A-2
Rate, the Class A-3 Rate, the Class A-4 Rate, the Class A-5 Rate, the Class A-6
Rate and the Class B Rate for such Accrual Period, collectively.

 

“Note
Register” and “Note Registrar” have the respective meanings
specified in Section 2.4 of the Indenture.

 

“Noteholder”
means a Floating Rate Noteholder, a Class A Noteholder, a Reset Rate Noteholder
or a Class B Noteholder, as the context requires.

 

“Notes”
means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class A-5 Notes, the Class A-6 Notes and the Class B Notes,
collectively.

 

“Notice
Date” means, for the Reset Rate Notes, 12:00 p.m. (noon), New York City
time, on the sixth day prior to the Reset Date.

 

“Obligor”
on a Trust Student Loan means the borrower or co-borrowers of such Trust
Student Loan and any other Person who owes payments in respect of such Trust
Student Loan, including the Guarantor thereof and, with respect to any Interest
Subsidy Payment or Special Allowance Payment, if any, thereon, the Department.

 

“Officers’
Certificate” means (i) in the case of the Trust, a certificate signed by
any two Authorized Officers of the Eligible Lender Trustee, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, and delivered to the Indenture
Trustee, and (ii) in the case of the Depositor, the Administrator or the
Servicer, a certificate signed by any two Authorized Officers of the Depositor,
the Administrator or the Servicer, as applicable.

 

“Opinion of
Counsel” means (i) with respect to the Trust, one or more written opinions
of counsel who may, except as otherwise expressly provided in the Indenture, be
employees of or counsel to the Eligible Lender Trustee, the Trust, the
Depositor or an Affiliate of the Depositor and who shall be satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee as Indenture Trustee, shall comply with any applicable
requirements of Section 11.1 of the Indenture and shall be in form and
substance satisfactory to the Indenture Trustee, and (ii) with respect to the
Depositor, the Administrator or the Servicer, one or more written opinions of
counsel who may be an employee of or counsel to the Depositor, the
Administrator or the Servicer, which counsel shall be acceptable to the
Indenture Trustee and the Eligible Lender Trustee.

 

“Origination
Fee” means the origination fee payable to the Department by the lender with
respect to any Trust Student Loan made on or after October 1, 1993, equal to
0.50% of the initial principal balance of such loan.

 

“Other
Currency Account” means each account designated as such, established and
maintained pursuant to Section 2.3(n) of the Administration Agreement.

 

“Outstanding”
means, as of the date of determination, all Notes theretofore authenticated and
delivered under the Indenture except:

 

A-1-28

 

(a)                                  Notes theretofore
cancelled by the Note Registrar or delivered to the Note Registrar for
cancellation;

 

(b)                                 Notes, or portions thereof,
for which payment has been made to the applicable Noteholders in reduction of
the outstanding principal balance thereof or for which money in the necessary
amount has been theretofore deposited with the Indenture Trustee or any Paying
Agent in trust for the Noteholders thereof (excluding for such purpose any
amounts on deposit in the Accumulation Account); provided, however,
that if such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to the Indenture; and

 

(c)                                  Notes in exchange for
or in lieu of other Notes which have been authenticated and delivered pursuant
to the Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser; provided
that in determining whether the Noteholders of the requisite Outstanding Amount
of the Notes have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any other Basic Document, Notes owned by
the Trust, any other obligor upon the Notes, the Depositor or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the
Indenture Trustee either actually knows to be so owned or has received written
notice thereof shall be so disregarded. 
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee’s right so to act with respect to such Notes and that the
pledgee is not the Trust, any other obligor upon the Notes, the Depositor or any
Affiliate of any of the foregoing Persons.

 

“Outstanding
Amount” means the aggregate principal balance of all the Notes or the
applicable class or classes of Notes, as the case may be, Outstanding at the
date of determination; provided, however, that if the Reset Rate Notes are then
in Foreign Exchange Mode, the Outstanding Amount shall be based on the U.S.
Dollar Equivalent Principal Amount of the Reset Rate Notes.

 

“Paying
Agent” means, with respect to the Notes (other than Reset Rate Notes
denominated in a currency other than U.S. Dollars), the Indenture Trustee or
any other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the Eligible
Lender Trustee, on behalf of the Trust, to make the payments to and
distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Trust.  With respect to the Reset Rate Notes
denominated in a currency other than U.S. Dollars, Paying Agent means the
London Paying Agent and the Luxembourg Paying Agent.

 

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

 

A-1-29

 

“Physical
Property” has the meaning assigned to such terms in the definition of
“Delivery” above.

 

“Pool
Balance” for any date means the aggregate principal balance of the Trust
Student Loans on that date, including accrued interest that is expected to be
capitalized, as reduced by:

 

(a)                                  all payments received
by the Trust through that date from borrowers, the Guarantors and the
Department;

 

(b)                                 all amounts received
by the Trust through that date from purchases of the Trust Student Loans by
SLMA, the Depositor, or the Servicer;

 

(c)                                  all Liquidation
Proceeds and Realized Losses on the Trust Student Loans liquidated through that
date;

 

(d)                                 the amount of any
adjustments to balances of the Trust Student Loans that the Servicer makes
under the Servicing Agreement through that date; and

 

(e)                                  the amount by which
Guarantor reimbursements of principal on defaulted Trust Student Loans through
that date are reduced from 100% to 98%, or other applicable percentage, as
required by the risk sharing provisions of the Higher Education Act.

 

“Predecessor
Note” means, with respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.

 

“Primary
Servicing Fee” for any Monthly Servicing Payment Date has the meaning
specified in Attachment A to the Servicing Agreement, and shall include any
such fees from prior Monthly Servicing Payment Dates that remain unpaid.

 

“Prime Rate”
means, for any relevant Interest Rate Determination Date prior to each Interest
Rate Change Date, the prime rate or base lending rate on that date, as
published in H.15(519), prior to 3:00 p.m., New York City time, on that
Interest Rate Determination Date under the heading “Bank Prime Loan.”  The Administrator will observe the following
procedures if the Prime Rate cannot be determined as described above: (i) if
the rate described above is not published in H.15(519) prior to 3:00 p.m., New
York City time, on the relevant Interest Rate Determination Date unless the
calculation is made earlier and the rate was available from that source at that
time, then the Prime Rate will be the rate for that Interest Rate Determination
Date, as published in H.15 Daily Update or another recognized electronic source
for displaying such rate opposite the caption “Bank Prime Loan”, (ii) if the
above rate is not published in either H.15(519), H.15 Daily Update or another
recognized electronic source for displaying such rate by 3:00 p.m., New York
City time, on the relevant Interest Rate Determination Date, then the
Administrator will determine the Prime Rate to be the average of the rates of
interest publicly announced by each bank that appears on the Reuters screen
designated as “USPRIME1” as that bank’s prime rate or base lending rate as in
effect on that Interest Rate Determination Date, (iii) if fewer than four
rates appear on the Reuters screen USPRIME1 page on the relevant

 

A-1-30

 

Interest Rate Determination Date, then the
Prime Rate will be the average of the prime rates or base lending rates quoted,
on the basis of the actual number of days in the year divided by a 360-day
year, as of the close of business on that Interest Rate Determination Date by
three major banks in New York City selected by the Administrator, or (iv) if
the banks selected by the Administrator are not quoting as mentioned above, the
Prime Rate will remain the prime rate then in effect on that Interest Rate
Determination Date.

 

“Principal
Distribution Amount” means, (i) with respect to the initial
Distribution Date, the amount by which the sum of the Outstanding Amount of the
Notes exceeds the Adjusted Pool Balance for that Distribution Date, and
(ii) with respect to each subsequent Distribution Date, the sum of
(a) the amount by which the Adjusted Pool Balance for the preceding Distribution
Date exceeds the Adjusted Pool Balance for that Distribution Date, and
(b) any amounts received under the Interest Rate Cap Agreement for that
Distribution Date.

 

“Proceeding”
means any suit in equity, action at law or other judicial or administrative
proceeding.

 

“Purchase
Agreement” means the Purchase Agreement Master Securitization Terms Number
1000, dated as of January 29, 2004, among SLMA, the Interim Eligible Lender
Trustee and the Depositor.

 

“Purchase
Amount” with respect to any Trust Student Loan means the amount required to
prepay in full such Trust Student Loan under the terms thereof including all
accrued interest thereon.

 

“Purchased
Student Loan” means a Trust Student Loan which is, as of the close of
business on the last day of a Collection Period, purchased by the Servicer
pursuant to Section 3.5 of the Servicing Agreement or repurchased by the
Depositor pursuant to Section 6 of the Sale Agreement, purchased by SLMA
pursuant to Section 6 of the Purchase Agreement.

 

“QIB”
means a “qualified institutional buyer” as defined in Rule 144A under the Act.

 

“Quarterly
Funding Amount” means, for the Reset Rate Notes, for any Distribution Date
that is (1) more than one year before the next Reset Date, zero and
(2) one year or less before the next Reset Date, an amount to be deposited
into the Remarketing Fee Account for the Reset Rate Notes so that the amount
therein equals the Quarterly Required Amount; provided, however, that if on any
Distribution Date that is not a Reset Date, the amount on deposit in the
Remarketing Fee Account is greater than the Quarterly Required Amount, such
excess will be transferred to the Collection Account and included in Available
Funds for that Distribution Date.

 

“Quarterly
Required Amount” means, for the Reset Rate Notes, (1) on any Reset
Date, the Reset Period Target Amount or (2) on a Distribution Date that is
one year or less before the next Reset Date, (x) the Reset Period Target
Amount multiplied by (y) 5 minus the number of Distribution Dates
remaining until the next Reset Date (excluding the current Distribution Date
and including the next Reset Date), divided by (z) five (5).

 

“Rating
Agency” means Moody’s, S&P and Fitch. 
If any such organization or successor thereto is no longer in existence,
“Rating Agency” with respect to such organization shall be a

 

A-1-31

 

nationally recognized statistical rating
organization or other comparable Person designated by the Administrator, notice
of which designation shall be given to the Indenture Trustee, the Eligible
Lender Trustee and the Servicer.

 

“Rating
Agency Condition” means, with respect to any intended action, that each
Rating Agency then rating a class of Notes shall have been given 10 days’ prior
written notice thereof and that each such Rating Agency shall have notified the
Administrator, the Servicer, the Eligible Lender Trustee, the Indenture Trustee
and the Remarketing Agents, if applicable, in writing that such proposed action
will not result in and of itself in the reduction or withdrawal of its
then-current rating of any class of Notes.

 

“Realized
Loss” means the excess of the principal balance, including any interest
that had been or had been expected to be capitalized, of any Liquidated Student
Loan over Liquidation Proceeds for that Liquidated Student Loan to the extent
allocable to principal, including any interest that had been or had been
expected to be capitalized.

 

“Record
Date” means, with respect to a Distribution Date or Redemption Date and for
each class of Notes, the close of business on the day preceding such
Distribution Date or Redemption Date.

 

“Recoveries”
means moneys collected from whatever source with respect to any Liquidated
Student Loan which was written off in prior Collection Periods or during the
current Collection Period, net of the sum of any amounts expended by the
Servicer for the account of any Obligor and any amounts required by law to be
remitted to any Obligor.

 

“Redemption
Date” means in the case of a payment to Noteholders pursuant to
Section 10.1 of the Indenture, the Distribution Date specified pursuant to
Section 10.1 of the Indenture.

 

“Redemption
Price” means an amount equal to the Outstanding Amount of the Notes, plus
accrued and unpaid interest thereon at the applicable Note Rates to but
excluding the Redemption Date.

 

“Reference
Banks” means, with respect to (i) LIBOR, four major banks in the
London interbank market for deposits in U.S Dollars selected by the
Administrator and (ii) GBP-LIBOR, four major banks in the London interbank
market for deposits in Pounds Sterling selected by the Administrator.

 

“Registrar”
means the Excess Distribution Certificate Registrar and/or the Note Registrar,
as applicable.

 

“Regulation
S” means Regulation S promulgated under the Act.

 

“Regulation
S Global Note Certificate” has the meaning specified in Section 2.1 of the
Indenture.

 

“Remarketing
Agency Agreement” means the collective reference to an Initial Remarketing
Agency Agreement and the Supplemental Remarketing Agency Agreement.

 

A-1-32

 

“Remarketing
Agent” means, initially, each of Lehman Brothers Inc. and Morgan Stanley
& Co. Incorporated.  The
Administrator, in its sole discretion, may change any Remarketing Agent for the
Reset Rate Notes for any Reset Period at any time on or before a Remarketing
Terms Determination Date.

 

“Remarketing
Agreement” means the Remarketing Agreement dated as of January 29, 2004
among the Remarketing Agents, the Swap Agents, the Administrator and the Trust,
as amended or supplemented from time to time.

 

“Remarketing
Fee Account” means the account designated as such, established and
maintained pursuant to Section 2.3(i) of the Administration Agreement.

 

“Remarketing
Terms Determination Date” means, for the Reset Rate Notes, not later than
3:00 p.m., New York City time, on the eighth Business Day prior to the
applicable Reset Date.

 

“Remarketing
Terms Notice” means the notice delivered by the Remarketing Agents to the
Reset Rate Noteholders, the Indenture Trustee, the Rating Agencies and the
applicable Clearing Agencies on each Remarketing Terms Determination Date
containing the information set forth in the Reset Rate Note Procedures
(Appendix A-2 to the Indenture).

 

“Reserve
Account” means the account designated as such, established and maintained
pursuant to Section 2.3(g) of the Administration Agreement.

 

“Reserve
Account Initial Deposit” means $5,013,057.

 

“Reset Date”
means a Distribution Date on which certain terms for the Reset Rate Notes may
be changed in accordance with the Reset Rate Note Procedures (Appendix A-2 to
the Indenture).

 

“Reset Date
Currency Swap Agreement” means, with respect to the Reset Rate Notes in
Foreign Exchange Mode, any Swap Agreement between a Swap Agent, not in its
individual capacity but solely in its capacity as Swap Agent for the benefit of
the Remarketing Agents and the Reset Rate Noteholders pursuant to the
Remarketing Agreement, and an Eligible Swap Counterparty to convert its
specified percentage of secondary market trade proceeds received by the
Remarketing Agents into U.S. Dollars on the effective date of such Swap
Agreement, and into the applicable currency for payment of principal to the
tendering Reset Rate Noteholders on the Reset Date resulting in the successful remarketing
of the Reset Rate Notes or the exercise of the Call Option.

 

“Reset
Period” means, with respect to the Reset Rate Notes, a period of at least
three months (or any other longer duration that is a multiple of three months)
that will always end on the day before a Distribution Date, which such
Distribution Date will be the next Reset Date; provided, that no Reset Period
may end after the day before the Reset Rate Notes Maturity Date.

 

“Reset
Period Target Amount” means, for the Reset Rate Notes and any Distribution
Date that is (1) more than one year before the next Reset Date, zero, and
(2) one year or less before the next Reset Date, the highest remarketing
fee payable to the Remarketing Agents for the Reset Rate Notes (not to exceed
0.35% of the maximum principal balance of the Reset Rate

 

A-1-33

 

Notes that could be remarketed) on the next
Reset Date as determined by the Administrator based on the assumed weighted
average life of the Reset Rate Notes and the maximum remarketing fee set forth
on a schedule attached to the Remarketing Agreement, as such schedule may be
amended from time to time.

 

“Reset Rate
Note” means any Class A-6 Notes.

 

“Reset Rate
Note Procedures” means Appendix A-2 to the Indenture.

 

“Reset Rate
Noteholder” means the Person in whose name a Reset Rate Note is registered
in the Note Register.

 

“Reset Rate
Notes” means the Class A-6 Notes.

 

“Reset Rate
Notes Maturity Date” means the Class A-6 Maturity Date.

 

“Responsible
Officer” means, with respect to the Indenture Trustee, any officer within
the Corporate Trust Office of the Indenture Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary,
or any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers, with direct
responsibility for the administration of the Indenture and the other Basic
Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer’s knowledge of and familiarity with the particular subject.

 

“Rule 144A”
means Rule 144A promulgated under the Act.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor rating agency.

 

“Sale
Agreement” means the Sale Agreement Master Securitization Terms Number
1000, dated as of January 29, 2004, among the Eligible Lender Trustee on behalf
of the Trust, the Trust, the Interim Eligible Lender Trustee and the Depositor.

 

“Schedule
of Trust Student Loans” means the listing of the Trust Student Loans set
forth in Schedule A to the Indenture and the Bill of Sale (which Schedule may
be in the form of microfiche).

 

“Schedule
Replacement Order” means an Issuer Order replacing Schedule A to the Reset
Rate Notes to be delivered with respect to the Reset Date.

 

“Servicer”
means Sallie Mae, Inc., in its capacity as servicer of the Trust Student Loans,
or any successor thereto in such capacity in accordance with the Servicing
Agreement.

 

“Servicer
Default” means an event specified in Section 5.1 of the Servicing
Agreement.

 

“Servicer
Distribution Date” has the meaning specified in the Servicing Agreement.

 

A-1-34

 

“Servicer’s
Report” means any report of the Servicer delivered pursuant to Section
3.1(a) of the Administration Agreement, substantially in the form acceptable to
the Administrator.

 

“Servicing
Agreement” means the Servicing Agreement, dated as of January 29, 2004,
among the Trust, the Eligible Lender Trustee, the Servicer, the Administrator
and the Indenture Trustee.

 

“Servicing
Fee” has the meaning specified in Attachment A to the Servicing Agreement.

 

“Settlement
Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer System is open which is also a day on which banks
in New York City are open for business.

 

“SLMA”
means the Student Loan Marketing Association.

 

“Special
Allowance Payments” means payments, designated as such, consisting of
effective interest subsidies by the Department in respect of the Trust Student
Loans to the Eligible Lender Trustee on behalf of the Trust in accordance with
the Higher Education Act.

 

“Specified
Reserve Account Balance” for any Distribution Date means the greater of:

 

(a)                                  0.25% of the Pool
Balance as of the close of business on the last day of the related Collection
Period; and

 

(b)                                 $3,007,834;

 

provided that
in no event will that balance exceed the Outstanding Amount.  For these purposes, as to the Reset Rate
Notes then bearing a fixed rate of interest, the Outstanding Amount of the
Reset Rate Notes will be reduced by any amounts (less any Investment Earnings)
on deposit in the Accumulation Account for the Reset Rate Notes.

 

“Spread”
means the percentage, determined by the Remarketing Agents on the Spread
Determination Date, with respect to the Reset Rate Notes that is to bear a
floating rate of interest, in excess of or below the applicable interest rate
Index that will be applicable to the Reset Rate Notes during any Reset Period
after the initial Reset Period so as to result in an interest rate that, in the
reasonable opinion of the Remarketing Agents, will enable all of the tendered
Reset Rate Notes to be remarketed by the Remarketing Agents at 100% of the
Outstanding Amount of such Reset Rate Notes.

 

“Spread
Determination Date” means, for the Reset Rate Notes, not later than 3:00
p.m., New York City time, on the third Business Day prior to the applicable
Reset Date.

 

“Spread
Determination Notice” means the notice delivered by the Remarketing Agents
to the Noteholders of the Reset Rate Notes, the Indenture Trustee, the Rating
Agencies, the Clearing Agencies and, if the Reset Rate Notes are then listed on
the Luxembourg Stock Exchange, the Luxembourg Stock Exchange on each Spread
Determination Date containing the information set forth in the Reset Rate Note
Procedures (Appendix A-2 to the Indenture).

 

A-1-35

 

“State”
means any one of the 50 States of the United States of America or the District
of Columbia.

 

“Stepdown
Date” means the earlier to occur of (i) the July 2009  Distribution
Date or (ii) the first date on which no Class A Notes remain
Outstanding.

 

“Student
Loans” means education loans to students and parents of students under the
Federal Family Education Loan Program.

 

“Successor
Administrator” has the meaning specified in Section 3.7(e) of the
Indenture.

 

“Successor
Servicer” has the meaning specified in Section 3.7(e) of the Indenture.

 

“Supplemental
Interest Account” means each account designated as such, established and
maintained pursuant to Section 2.3(k) of the Administration Agreement.

 

“Supplemental
Interest Account Deposit Amount” means, with respect to the Reset Rate
Notes while in fixed rate mode, and for any Distribution Date, the lesser of:

 

(a)               the product of:

 

(1)                                  the difference
between (x) the weighted average of the LIBOR-based rates (as determined
on the LIBOR Determination Date immediately preceding that Distribution Date)
that will be payable by the Trust to the related Swap Counterparty on the next
Distribution Date, and (y) an assumed rate of Investment Earnings that
satisfies the Rating Agency Condition,

 

(2)                                  the amount on deposit
in the Accumulation Account immediately after that Distribution Date, and

 

(3)                                  the actual number of
days from that Distribution Date to the next Reset Date for the Reset Rate
Notes, divided by 360; and

 

(b)              an amount that
satisfies the Rating Agency Condition.

 

“Supplemental
Remarketing Agency Agreement” means each agreement, substantially in the
form of Appendix C to the Remarketing Agreement to be entered into on each
Spread Determination Date (unless the Call Option has been exercised or a
Failed Remarketing has been declared) among the Remarketing Agents, the
Administrator and the Trust.

 

“Swap Agent”
means the entity appointed by the Remarketing Agents that is acting as agent
for the Remarketing Agents and for the benefit of the Reset Rate Noteholders,
and directed by the Remarketing Agents to enter into a Reset Date Currency Swap
Agreement.

 

“Swap
Agreement” means the applicable ISDA Master Agreement, and each related
swap schedule and/or Swap Confirmation pursuant to the terms and conditions set
forth in the Reset Rate Note Procedures, with respect to (i) each
Cross-Currency Swap Agreement and each Interest Rate Swap Agreement (including
the Initial Interest Rate Swap Agreement) to be entered into from time to time
by the Administrator or the Eligible Lender Trustee in either case solely

 

A-1-36

 

on behalf of the Trust and an Eligible Swap
Counterparty, (ii) each Reset Date Currency Swap Agreement to be entered
into from time to time by a Swap Agent, as agent for the Remarketing Agents and
for the benefit of the holders of the Reset Rate Notes, and an Eligible Swap
Counterparty and (iii) the Interest Rate Cap Agreement.

 

“Swap
Confirmation” means each swap confirmation relating to a Swap Agreement.

 

“Swap
Counterparty” means each Eligible Swap Counterparty from time to time party
to a Swap Agreement, the Initial Interest Rate Swap Counterparty (with respect
to the Initial Interest Rate Swap Agreement) and the Interest Rate Cap Swap Counterparty
(with respect to the Interest Rate Cap Agreement).

 

“Swap
Interest Payments” means, with respect to each Distribution Date, the
amount payable to the related Swap Counterparty by the Trust as a quarterly
premium payment pursuant to the related Swap Agreement.

 

“Swap
Payments” means, with respect to each Distribution Date, the amount, if
any, payable to a Swap Counterparty by the Trust for such date, including
amounts due and unpaid from prior Distribution Dates (other than Swap
Termination Payments), as specified in the applicable Swap Agreement.

 

“Swap
Receipts” means, with respect to each Distribution Date, the amount
required to be received from the related Swap Counterparty by the Trust for
such date (other than Swap Termination Payments), as specified in the related
Swap Agreement.

 

“Swap
Termination Date” means the date on which Swap Agreement terminates in
accordance with its terms, which with respect to any Initial Interest Rate Swap
Agreement is scheduled to be the Initial Reset Date for the Reset Rate Notes.

 

“Swap
Termination Payments” shall have the meaning set forth in each Swap
Agreement.

 

“Telerate
Page 248” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices).

 

“Telerate
Page 3750” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices).

 

“Telerate
Page 7051” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices).

 

“Telerate
Page 7052” means the display page so designated on the Moneyline Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices).

 

A-1-37

 

“Three-Month
LIBOR” and “Two-Month LIBOR” means, with respect to any Accrual Period, the
London interbank offered rate for deposits in U.S. Dollars having the Index
Maturity which appears on Telerate Page 3750 as of 11:00 a.m. London time, on
the related LIBOR Determination Date. 
If this rate does not appear on Telerate Page 3750, the rate for that
day will be determined on the basis of the rates at which deposits in U.S.
Dollars, having the Index Maturity and in a principal amount of not less than
U.S. $1,000,000, are offered at approximately 11:00 a.m., London time, on that
LIBOR Determination Date, to prime banks in the London interbank market by the
Reference Banks.  The Administrator will
request the principal London office of each Reference Bank to provide a
quotation of its rate.  If the Reference
Banks provide at least two quotations, the rate for that day will be the
arithmetic mean of the quotations.  If
the Reference Banks provide fewer than two quotations, the rate for that day
will be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Administrator, at approximately 11:00 a.m., New York
time, on that LIBOR Determination Date, for loans in U.S. Dollars to leading
European banks having the Index Maturity and in a principal amount of not less
than U.S. $1,000,000.  If the banks
selected as described above are not providing quotations, LIBOR in effect for
the applicable Accrual Period will be LIBOR, for the specified maturity in effect
for the previous Accrual Period.

 

“Transfer”
an offer, sale, pledge, transfer or other disposition of a Note or any interest
therein.

 

“Transfer
Date” has the meaning specified in Section  5.2(a) of the Administration
Agreement.

 

“Treasury
Regulations” means regulations, including proposed or temporary
regulations, promulgated under the Code. 
References in any document or instrument to specific provisions of
proposed or temporary regulations shall include analogous provisions of final
Treasury Regulations or other successor Treasury Regulations.

 

“Trigger
Event” means, on any Distribution Date while any of the Class A Notes
are outstanding, the Outstanding Amount of the Notes, less any amounts (other
than Investment Earnings) on deposit in the Accumulation Account, after giving
effect to distributions to be made on that Distribution Date, would exceed the
Adjusted Pool Balance as of the end of the related Collection Period.

 

“Trust”
means SLM Student Loan Trust 2004-1, a Delaware statutory trust established
pursuant to the Trust Agreement.

 

“Trust
Account Property” means the Trust Accounts, all cash and investments held
from time to time in any Trust Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities
or otherwise), including the Reserve Account Initial Deposit and the
Capitalized Interest Account Initial Deposit and all earnings on and proceeds
of the foregoing.

 

“Trust
Accounts” has the meaning specified in Section 2.3(b) of the Administration
Agreement.

 

A-1-38

 

“Trust
Agreement” means the Trust Agreement, dated as of January 1, 2004 among the
Depositor, the Eligible Lender Trustee and the Indenture Trustee.

 

“Trust
Auction Date” has the meaning specified in Section 4.4 of the Indenture.

 

“Trust
Estate” means all right, title and interest of the Trust (or the Eligible
Lender Trustee on behalf of the Trust) in and to the property and rights sold,
transferred and assigned to the Trust pursuant to the Sale Agreement, all funds
on deposit from time to time in the Trust Accounts and all other property of
the Trust from time to time, including any rights of the Eligible Lender
Trustee and the Trust pursuant to the Trust Agreement, the Administration
Agreement, the Servicing Agreement, any Interest Rate Swap Agreements and the
Interest Rate Cap Agreement.

 

“Trust
Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.

 

“Trust
Student Loan” means any student loan that is listed on the Schedule of
Trust Student Loans on the Closing Date, plus any student loan that is
permissibly substituted for a Trust Student Loan by the Depositor pursuant to
Sections 6 of the Sale Agreement or by the Servicer pursuant to Section 3.5 of
the Servicing Agreement, but shall not include any Purchased Student Loan
following receipt by or on behalf of the Trust of the Purchase Amount with
respect thereto or any Liquidated Student Loan following receipt by or on
behalf of the Trust of Liquidation Proceeds with respect thereto or following
such Liquidated Student Loan having otherwise been written off by the Servicer.

 

“Trust
Student Loan Files” means the documents specified in Section 2.1 of the
Servicing Agreement.

 

“Two-Month
LIBOR” see Three-Month LIBOR.

 

“UCC”
means, unless the context otherwise requires, the Uniform Commercial Code, as
in effect in the relevant jurisdiction, as amended from time to time.

 

“U.S.
Dollar Equivalent Principal Amount” means, with respect to the Reset Rate
Notes while in Foreign Exchange Mode, the U.S. Dollar equivalent of the
Outstanding Amount of the Reset Rate Notes as of the date of determination
based on the exchange rate provided in the related Cross-Currency Swap
Agreement.

 

“U.S.
Global Note Certificate” has the meaning specified in Section 2.1 of the
Indenture.

 

A-1-39

 

APPENDIX
A-2

 

RESET RATE
NOTE PROCEDURES

 

Section 1.                                                                                            Definitions:  All terms which are defined in Appendix
A-1 shall have the same meanings in this Appendix A-2.

 

Section 2.                                                                                            Interest
Rates; Principal Payments: (a)  The
Reset Rate Notes will bear interest for each Reset Period at the rate set forth
on Schedule A attached to the Reset Rate Note as determined in accordance with
Section 2(b) below; provided, that for the initial Reset Period, the Reset Rate
Notes will bear interest from the Closing Date through and including the
Initial Reset Date at the rate set forth in the first sentence of the
definitions of  “Class A-6 Rate”.  Interest on the Reset Rate Notes shall be
payable by the Trust with respect to each Distribution Date at the priority
level set forth in Section 2.8(d) of the Administration Agreement; provided,
that if interest due to the Reset Rate Notes is payable through a Swap Agreement,
the related Swap Interest Payments will be payable by the Trust to the related
Swap Counterparty, and by the Swap Counterparty to the Trust (for payment to
the Reset Rate Noteholders), as described in Section 10 below.

 

(b)                                                                                                                                 After
the initial Reset Period, the Reset Rate Notes may be reset to bear either a
fixed or floating rate of interest at the option of the Remarketing Agents, in
consultation with the Administrator. 
The interest rate of the Reset Rate Notes will be reset as of each Reset
Date as determined by (i) the Remarketing Agents, in consultation with the
Administrator, with respect to (A) the length of the Reset Period, (B) whether
the rate is fixed or floating and (x) if floating, the applicable Index, or (y)
if fixed, the applicable pricing benchmark, (C) the applicable Day Count Basis,
(D) the applicable currency denomination, i.e., U.S. Dollars, Euros, Pounds
Sterling or another non-U.S. Dollar currency, (E) if in Foreign Exchange Mode,
the applicable Distribution Dates on which interest will be paid to the Reset
Rate Noteholders, (F) the applicable Interest Rate Determination Dates within
each Accrual Period, (G) the interval between Interest Rate Change Dates during
each Accrual Period and (H) if applicable, the All Hold Rate, and (ii) the
Remarketing Agents (in their sole determination) with respect to the setting of
the (A) fixed rate of interest or (B) Spread to the chosen Index, as
applicable.

 

(c)                                                                                                                                  In
the event that the Reset Rate Notes are reset (i) to bear (or continue to bear)
interest at a floating rate, (ii) to bear (or continue to bear) a fixed rate of
interest and/or (iii) to be denominated (or continue to be denominated) in a
currency other than U.S. Dollars, and the Remarketing Agents, in consultation
with the Administrator determine that it would be in the best interest of the
Trust based on existing market conditions to enter into one or more Swap
Agreements, the Administrator will be responsible for arranging, on behalf of
the Trust, one or more Swap Agreements to hedge the basis risk and/or currency
exchange risk (as applicable) and, together with the Remarketing Agents, for
selecting the Swap Counterparties thereto in accordance with the procedures set
forth in Section 10(b) below.  The Reset
Rate Notes will not be reset (or continue) to bear interest at a floating rate
that is not based on LIBOR or a Commercial Paper Rate, at a fixed rate or to be
denominated in a currency other than U.S. Dollars unless one or more Swap
Agreements are entered into as of the related Reset Date that results in the
Rating Agency Condition being satisfied. 
In connection with each Swap

 

A-2-1

 

Agreement, the
Remarketing Agents shall solicit bids from Eligible Swap Counterparties in
accordance with the procedures set forth in Section 10(d) below.

 

(d)                                                                                                                                 The
Reset Rate Notes that bear interest at (i) a floating rate shall be entitled to
receive payments of principal in reduction of its Outstanding Amount on each
Distribution Date at the priority level set forth in Section 2.8(f) of the
Administration Agreement and (ii) a fixed rate shall be entitled to receive
allocations of principal at the priority level set forth in Section 2.8(f) of
the Administration Agreement on each Distribution Date, provided, however,
that such amounts referred to in this clause (ii) shall not be paid in
reduction of the Outstanding Amount of the Reset Rate Notes; instead all such
amounts shall be deposited into the Accumulation Account for payment to the
Reset Rate Noteholders or Cross-Currency Swap Counterparty, as applicable, on
or about the next Reset Date as set forth in Section 11(a) below.

 

Section 3.                                                                                            End
of Reset Period Notice:  (a)  Unless the holder of the Call Option has
delivered the related Call Option Notice, the Administrator, not less than
fifteen nor more than thirty calendar days prior to any Remarketing Terms
Determination Date, will (i) give written notice (including facsimile or
other electronic transmission, if permitted pursuant to the recipient’s standard
procedures) to the applicable Clearing Agencies and the Luxembourg Stock
Exchange (for so long as the Reset Rate Notes are listed on such exchange),
with a copy to the Indenture Trustee, notifying them of the upcoming Reset Date
and stating whether tender is deemed mandatory or optional for the Reset Rate
Notes on the Reset Date (the “Initial Reset Date Notice”), (ii) request
that each Clearing Agency notify its participants of (1) the contents of the
Initial Reset Date Notice, (2) the Remarketing Terms Notice to be given on the
Remarketing Terms Determination Date pursuant to Section 4(d) below,
(3) the Spread Determination Notice to be given on the Spread
Determination Date pursuant to Section 9(e) below, and (4) if applicable,
the procedures concerning the timely delivery of a Hold Notice pursuant to
Section 8 below that must be followed if any beneficial owner of a Reset Rate
Note wishes to retain its Reset Rate Notes. 
For so long as the Reset Rate Notes are listed on the Luxembourg Stock
Exchange, a copy of such notices will be sent to the Luxembourg Stock Exchange
and each of the Remarketing Terms Notice and the Spread Determination Notice
will also be published in a leading newspaper having general circulation in
Luxembourg (which is expected to be The  Luxemburger Wort) and (iii) initiate
discussions with representatives of the Luxembourg Stock Exchange regarding an
addendum to the Offering Memorandum dated January 21, 2004, if required by
Section 7(f)(i) of the Remarketing Agreement.

 

(b)                                                                                                                                 The
Administrator will also include in the Initial Reset Date Notice the names and
contact information of the Luxembourg listing agent, if applicable, and any
Remarketing Agents confirmed or appointed by the Administrator, or if no
Remarketing Agents have then been so chosen, the Administrator will provide
adequate contact information for Reset Rate Noteholders to receive information
regarding the upcoming Reset Date.

 

(c)                                                                                                                                  If
the related Clearing Agency or its respective nominee, as applicable, is no
longer the holder of record of the Reset Rate Notes, the Administrator, or the
Remarketing Agents on its behalf, will send the Reset Rate Noteholders, with a
copy to the Indenture Trustee and the Luxembourg listing agent, as applicable,
the required notices setting forth the information in Sections 3(a) and 3(b)
above not less than fifteen nor more than thirty calendar days prior to any
Remarketing Terms Determination Date. 
In addition, in the event that

 

A-2-2

 

Definitive
Notes evidencing an interest in the Reset Rate Notes are issued, the
Administrator shall cause the Note Registrar to provide to the relevant Reset
Rate Noteholders and the Luxembourg listing agent, as applicable, any
additional procedures applicable to such Reset Rate Notes while in definitive
form.

 

Section 4.                                                                                            Remarketing
Terms Determination Date:  (a)  Subject to the provisions of the Remarketing
Agreement, prior to the Remarketing Terms Determination Date, and unless the
holder of the Call Option has delivered the Call Option Notice, the
Administrator shall re-affirm the capability of the initial Remarketing Agents
to perform under the Remarketing Agreement, and/or enter into new remarketing
agreements with other or additional remarketing agents, who shall function as
the Remarketing Agents with respect to the Reset Date.  On each Remarketing Terms Determination
Date, the Trust, the Administrator and the Remarketing Agents will enter into a
Remarketing Agency Agreement for the remarketing of the Reset Rate Notes.

 

(b)                                                                                                                                 If
the Remarketing Agents, in consultation with the Administrator, determine prior
to the Remarketing Terms Determination Date that any Cross-Currency Swap
Agreements or Reset Date Currency Swap Agreements required pursuant to Section
2(c)(iii) above will not be obtainable on the Reset Date, the Reset Rate Notes
must be denominated in U.S. Dollars during the next Reset Period.

 

(c)                                                                                                                                  Unless
the holder of the Call Option has delivered the Call Option Notice, on or prior
to the Remarketing Terms Determination Date the Remarketing Agents will notify
the Reset Rate Noteholders whether tender is deemed mandatory or optional and,
in consultation with the Administrator, will establish the following terms for
the Reset Rate Notes to be applicable during the immediately following Reset
Period:

 

(i)                                     the
expected weighted average life of the Reset Rate Notes, based on prepayment and
other assumptions customary for comparable securities;

 

(ii)                                  the
name and contact information of the Remarketing Agents;

 

(iii)                               the
next Reset Date and length of such Reset Period;

 

(iv)                              the
interest rate mode (i.e., fixed rate or floating rate);

 

(v)                                 the
currency denomination;

 

(vi)                                                                              the
applicable minimum denominations and additional increments for the Reset Rate
Notes;

 

(vii)                                                                           if
in Foreign Exchange Mode, the identities of the Eligible Swap Counterparties
from which bids will be solicited and the identity, if known, of the proposed
Swap Agent for each related Eligible Swap Counterparty;

 

(viii)                        if
in Foreign Exchange Mode, the applicable Distribution Dates on which interest
and principal will be paid to the Reset Rate Noteholders;

 

 

A-2-3

 

(ix)                                if
in floating rate mode, the applicable Index;

 

(x)                                   if
in floating rate mode, the interval between Interest Rate Change Dates;

 

(xi)                                if
in floating rate mode, the applicable Interest Rate Determination Date;

 

(xii)                             if
in fixed rate mode, the applicable fixed rate pricing benchmark;

 

(xiii)                          if
in fixed rate mode, the identities of the Eligible Swap Counterparties from
which bids will be solicited;

 

(xiv)                         if
in floating rate mode, whether there will be a related Swap Agreement and, if
so, the identities of the Eligible Swap Counterparties from which bids will be
solicited;

 

(xv)                                                                            the
applicable Day Count Basis;

 

(xvi)                                                                         the
All Hold Rate, if applicable;

 

(xvii)                                                                      if
Definitive Notes are to be issued, the procedures for delivery and exchange of
Definitive Notes and for dealing with lost or mutilated notes; and

 

(xviii)                                                                   any
other relevant terms incidental to the foregoing (other than the Spread or
fixed rate of interest, as applicable) for the next Reset Period;

 

provided,
that any interest rate mode, other than a floating rate based on LIBOR or a
Commercial Paper Rate, will require that the Rating Agency Condition be
satisfied prior to the delivery of the Remarketing Terms Notice.

 

(d)                                                                                                                                 The
Remarketing Agents will communicate all of the information established in
Section 4(c) above in the Remarketing Terms Notice required to be given in
writing (including facsimile or other electronic transmission if in accordance
with each Clearing Agency’s standard procedures) to each Clearing Agency (and
the Luxembourg Stock Exchange if the Reset Rate Notes are then listed on such
exchange) or the Reset Rate Noteholders if Definitive Notes have been issued,
as applicable, the Indenture Trustee and the Rating Agencies on the Remarketing
Terms Determination Date.

 

(e)                                  In
addition, prior to the Remarketing Terms Determination Date, the Administrator
shall cause the Schedule Replacement Order with respect to the Reset Rate Notes
to be delivered to the Indenture Trustee, the Clearing Agencies and, if the
Reset Rate Notes are then listed on the Luxembourg Stock Exchange, the
Luxembourg listing agent.

 

Section 5.                                                                                            All
Hold Rate:  (a)  On each Remarketing Terms Determination Date
for the Reset Rate Notes which are denominated in U.S. Dollars during both the
then-current Reset Period and the immediately following Reset Period, the
Remarketing Agents, in consultation with the Administrator, will establish the
All Hold Rate for the Reset Rate Notes. 
With respect to the Reset Rate Notes that are either in Foreign Exchange
Mode during the then-current Reset Period or will be reset into Foreign Exchange
Mode on the immediately following

 

A-2-4

 

Reset Date,
all Reset Rate Noteholders will be deemed to have tendered their Notes on the
Reset Date, regardless of any desire by such Reset Rate Noteholders to retain
their ownership thereof, and no All Hold Rate will be applicable.

 

(b)                                                                                                                                 The
All Hold Rate will only be applicable if 100% of the Reset Rate Noteholders
deliver timely Hold Notices wherein they elect to hold their Reset Rate Notes
for the next Reset Period.  If
applicable, the interest rate for the Reset Rate Notes during the immediately
following Reset Period will not be less than the All Hold Rate.  If the rate of interest using the Spread or
fixed rate of interest established on the Spread Determination Date is higher
than the All Hold Rate, then upon a successful remarketing of the Reset Rate
Notes, all Reset Rate Noteholders who delivered a Hold Notice agreeing to be
subject to the All Hold Rate instead will be entitled to the higher rate of
interest during the immediately following Reset Period.

 

Section 6.                                                                                            Failed
Remarketing:  (a)  With respect to each Reset Date for which
the holder of the Call Option does not deliver the Call Option Notice, a Failed
Remarketing will be declared by the Remarketing Agents and the provisions of
this Section 6 will apply if any of the conditions set forth in the definition
of “Failed Remarketing” are applicable. 
In order to prevent the declaration of a Failed Remarketing, the
Remarketing Agents will have the option, but not the obligation, to purchase any
Reset Rate Notes tendered that they are not otherwise able to remarket or with
respect to which a committed purchaser defaults on their purchase obligations.

 

(b)                                                                                                                                 At
any time a Failed Remarketing is declared: (i) all Reset Rate Notes will be
retained by the Reset Rate Noteholders on the related Reset Date, regardless of
any deemed mandatory or voluntary tenders made to the Remarketing Agents, (ii)
the Failed Remarketing Rate for Reset Rate Notes will apply for the related
Reset Period and (iii) a Reset Period of three months will be established.  In addition, if the Reset Rates Notes are in
Foreign Exchange Mode at the time a Failed Remarketing is declared, the
provisions of Sections 10(a)(i) and (ii) shall also apply.

 

(c)                                                                                                                                  If
there is a Failed Remarketing of the Reset Rate Notes, the Reset Rate
Noteholders shall not be entitled to exercise any remedies as a result of the
failure of the Reset Rate Notes to be remarketed on the Reset Date.

 

Section 7.                                                                                            Call
Option:  (a)  With respect to each Reset Date, the Depositor,
as the initial holder of the Excess Distribution Certificate, is hereby granted
the Call Option for the purchase of not less than 100% of the Reset Rate Notes,
exercisable at a price equal to 100% of the Outstanding Amount of the Reset
Rate Notes, less all amounts distributed to the Reset Rate Noteholders as a
payment of principal with respect to the Distribution Date, plus any accrued
and unpaid interest not paid by the Trust with respect to the applicable Reset
Date.

 

(b)                                                                                                                                 The
Depositor, as the initial holder of the Excess Distribution Certificate,
effective as of the Closing Date, hereby transfers all of its right title and
interest in and to the Call Option to SLM Education Credit Finance Corporation,
which upon receipt thereof will dividend all of its right, title and interest
in and to the Call Option to SLM Corporation, and in acceptance of such
transfer SLM Corporation also hereby agrees to abide by

 

A-2-5

 

all terms and
conditions hereunder with respect to the Call Option as set forth in these
Reset Rate Note Procedures.

 

(c)                                                                                                                                  SLM
Corporation may further transfer ownership of the Call Option at any time to
one of its Affiliates, provided that such permitted transferee has at no
time in the past owned, and is not obligated under either the Purchase
Agreement or the Sale Agreement to transfer, an interest in any of the Trust
Student Loans.

 

(d)                                                                                                                                 The
Call Option may be exercised with respect to the Reset Rate Notes at any time
on or prior to the determination of the related Spread or fixed rate or the
declaration of a Failed Remarketing, as applicable, on the related Spread
Determination Date by delivery of a Call Option Notice; provided that
the Call Option may not be exercised before the day following the last
Distribution Date immediately preceding the next applicable Reset Date.  In addition, for so long as the Reset Rate
Notes are listed on the Luxembourg Stock Exchange, the holder of the Call
Option shall cause a notice of the exercise of the Call Option to be published
in a leading newspaper having general circulation in Luxembourg (which is
expected to be The Luxemburger Wort). 
Once written notice of the exercise of the Call Option is given, such
exercise may not be rescinded.

 

(e)                                                                                                                                  All
amounts due and owing to the Reset Rate Noteholders shall be remitted on or
before the related Reset Date by the holder of the Call Option in accordance
with the standard procedures established by the Clearing Agencies for transfer
of securities to ensure timely payment of principal to the Reset Rate
Noteholders on the Reset Date.

 

(f)                                                                                                                                    In
the event that the Call Option is exercised with respect to the Reset Rate
Notes if they are then in Foreign Exchange Mode, the holder of the Call Option
shall deliver the U.S. Dollar Equivalent Principal Amount remaining after all
payments of principal are made with respect to the related Distribution Date,
and interest (if applicable) owing to the Reset Rate Noteholders to the
Remarketing Agents for delivery to the related Swap Agents for delivery to the
Swap Counterparties to the related Reset Date Currency Swap Agreements, who
shall exchange such amount into the applicable currency for delivery to the
Reset Rate Noteholders; provided, however, that if there are no
such Reset Date Currency Swap Agreements then in effect, the holder of the Call
Option shall remit all amounts due and owing to the Remarketing Agents for
delivery to the Reset Rate Noteholders in the applicable currency on or before
the Reset Date in accordance with the standard procedures established by the
related Clearing Agencies for transfer of securities to ensure timely payment
of principal to the Reset Rate Noteholders on the Reset Date.

 

(g)                                                                                                                                 If
the Call Option is exercised with respect to the Reset Rate Notes, (i) the
interest rate on the Reset Rate Notes will be the Call Rate, (ii) the
Reset Rate Notes will be denominated in U.S. Dollars and (iii) a Reset
Period of three months will be established. 
At the end of such three month Reset Period, the holder of the Call
Option may either remarket the Reset Rate Notes pursuant to the remarketing
procedures set forth herein and in the Remarketing Agreement, or retain the
Reset Rate Notes for one or more successive three-month Reset Periods at the
then-current Call Rate.  In the event
the holder of the Call Option chooses to remarket the Reset Rate Notes, such
holder shall be solely responsible for all costs and expenses relating to the
preparation of any new offering document and any other related costs and

 

A-2-6

 

expenses
associated with such remarketing, other than the fees of the Remarketing
Agents, as more fully set forth in Section 3 of the Remarketing Agreement.

 

(h)                                 Other
than in connection with the exercise of a Call Option, neither SLM Corporation,
SLMA, the Trust or any of their Affiliates shall have the ability to purchase
any Reset Rate Notes tendered to the Remarketing Agents.

 

Section 8.                                                                                            Hold
Notice:  If the Reset Rate Notes are
denominated in U.S. Dollars during both the then-current Reset Period and the
immediately following Reset Period, the Reset Rate Noteholders will have the
option to deliver a Hold Notice to any Remarketing Agent setting forth their
desire to hold their Reset Rate Notes for the next Reset Period at a rate of
interest not less than the All Hold Rate and on the terms set forth in the
related Remarketing Terms Notice, at any time on or after the Remarketing Terms
Determination Date until the Notice Date. 
Such Hold Notice may be delivered as an oral statement to a Remarketing
Agent, if subsequently confirmed in writing within 24 hours, which confirmation
may be in the form of an e-mail if timely received by the Remarketing
Agent.  If a Reset Rate Noteholder does
not timely deliver a Hold Notice to a Remarketing Agent (such Hold Notice not
to be considered delivered until actually received by such Remarketing Agent),
that Reset Rate Noteholder will be deemed to have tendered for remarketing 100%
of the Outstanding Amount of the Reset Rate Notes.  Any duly delivered Hold Notice will be irrevocable, but will be
subject to a mandatory tender of the Reset Rate Notes pursuant to any exercise
of the Call Option.  All of the Reset
Rate Notes, whether tendered or not, will bear interest during any Reset Period
on the same terms.

 

Section 9.                                                                                            Spread
Determination Date:  (a)  On each Spread Determination Date, unless a
Failed Remarketing has been declared or the holder of the Call Option has
delivered the Call Option Notice, the Administrator, the Trust and the
Remarketing Agents will enter into a Supplemental Remarketing Agency Agreement.

 

(b)                                                                                                                                 If
pursuant to the Remarketing Terms Notice, the Remarketing Agents, in
consultation with the Administrator, have determined that the Reset Rate Notes
are to be reset to bear a fixed rate of interest, then the applicable fixed
rate of interest for the corresponding Reset Period will be determined on the
Spread Determination Date by adding (i) the applicable spread as
determined by the Remarketing Agents on the Spread Determination Date and
(ii) the yield to maturity on the Spread Determination Date of the
applicable fixed rate pricing benchmark, selected by the Remarketing Agents, as
having an expected weighted average life based on a scheduled maturity at the
next Reset Date, which would be used in accordance with customary financial
practice in pricing new issues of asset-backed securities of comparable average
life; provided that such fixed rate of interest will in no event be
lower than the related All Hold Rate, if applicable.  The Remarketing Agents shall determine the applicable fixed rate
of interest for the Reset Rate Notes (by reference to the applicable fixed rate
pricing benchmark plus or minus the spread determined on the Remarketing Terms
Determination Date) on each Spread Determination Date irrespective of whether
no remarketing will occur as the result of the application of the All Hold
Rate, if applicable.  In addition, on
the related Spread Determination Date, the Remarketing Agents, in consultation
with the Administrator, shall determine the Supplemental Interest Account
Deposit Amount, if any, for the Reset Rate Notes.

 

A-2-7

 

(c)                                                                                                                                  If
pursuant to the Remarketing Terms Notice, the Remarketing Agents, in consultation
with the Administrator, have determined that the Reset Rate Notes are to be
reset to bear a floating rate of interest, then, on the related Spread
Determination Date, the Remarketing Agents will establish the applicable Spread
to be added or subtracted from the applicable Index; provided that such
floating rate of interest will in no event be lower than the related All Hold
Rate, if applicable.

 

(d)                                                                                                                                 If
required pursuant to Section 2(c) above, on the related Reset Date the Trust
shall enter into either (i) one or more Cross-Currency Swap Agreements, if the
Reset Rate Notes are to be reset in Foreign Exchange Mode, or (ii) one or more
Interest Rate Swap Agreements if the Reset Rate Notes are to be reset in U.S.
Dollars and to bear interest at a fixed rate or at a floating rate other than
one based on LIBOR or a Commercial Paper Rate, with an Eligible Swap
Counterparty.  In addition, if the Reset
Rate Notes are to be reset in Foreign Exchange Mode, on the Reset Date the
Remarketing Agents shall cause at least one Swap Agent to enter into one or
more Reset Date Currency Swap Agreements with one or more Eligible Swap
Counterparties.

 

(e)                                                                                                                                  On
or immediately following the Spread Determination Date, the Remarketing Agents
will communicate in writing (including facsimile or other electronic
transmission if in accordance with each Clearing Agency’s standard procedures)
the contents of the Spread Determination Notice to each Clearing Agency (and
the Luxembourg Stock Exchange if the Reset Rate Notes are then listed on such
exchange) or the Reset Rate Noteholders if Definitive Notes have been issued,
as applicable, with instructions to distribute such notices to its related
participants, or to the Reset Rate Noteholders, as applicable, the Indenture
Trustee and the Rating Agencies.  The
Spread Determination Notice will contain: (i) the determined Spread or fixed
rate of interest, as the case may be, or, if applicable, a statement that the
All Hold Rate or the Failed Remarketing Rate will be in effect for the immediately
following Reset Period, (ii) any applicable currency exchange rate, (iii) the
identity of any selected Swap Counterparty or Counterparties, and Swap Agent or
Agents, if applicable, (iv) if applicable, the floating rate (or rates) of
interest to be due to each selected Swap Counterparty with respect to each
Distribution Date during the immediately following Reset Period and (v) any
other information that the Administrator or the Remarketing Agents deem
applicable.  Furthermore, for the Reset
Rate Notes to be reset in Foreign Exchange Mode, the currency exchange rate,
the Extension Rate due to each related Cross-Currency Swap Counterparty and the
Failed Remarketing Rate for the immediately following Reset Period will be
determined pursuant to the terms of the related Cross-Currency Swap Agreement
and contained in the Spread Determination Notice.  In addition, if required for the immediately following Reset
Period, on or before the related Spread Determination Date the Administrator
will arrange for new or additional securities identification codes to be
obtained as required.

 

Section 10.                                      Swap
Agreements:

 

(a)                                                                                                                                  If
the Reset Rate Notes are to be reset in Foreign Exchange Mode, on the Reset
Date, the Administrator will enter into (not in its individual capacity, but
solely as Administrator on behalf of the Trust) or will instruct the Eligible
Lender Trustee to enter into (not in its individual capacity, but solely as
Eligible Lender Trustee) one or more Cross-Currency Swap Agreements for the
Reset Period.

 

A-2-8

 

(i)                                                                                     Each
Cross-Currency Swap Counterparty which is party to a related Cross-Currency
Swap Agreement will be entitled to receive with respect to each Distribution
Date, (x) an interest rate of Three-Month LIBOR, plus or minus a spread, as
determined from the bidding process described in Section 10(d) below (other
than as may be interpolated for an initial or final calculation period under
that Cross-Currency Swap Agreement), multiplied by the U.S. Dollar Equivalent
Principal Amount of the Reset Rate Notes, and multiplied by a fraction
determined by the number of days in the applicable Accrual Period and the
applicable Day Count Basis, (y) all payments of principal in U.S. Dollars that
are allocated to the Reset Rate Notes; provided that if the Reset Rate
Notes bear a fixed rate of interest, all principal payments allocated to the
Reset Rate Notes on any Distribution Date will be deposited into the
Accumulation Account and paid to the related Swap Counterparties on or about
the next Reset Date as set forth in the related Cross-Currency Swap Agreements
(including all sums required to be deposited therein on the Reset Date), but
excluding all Investment Earnings thereon.

 

(ii)                                                                                  In
addition, each related Cross-Currency Swap Counterparty will be obligated to
pay to the Trust (for payment to the Reset Rate Noteholders, if
applicable):  with respect to each
applicable Distribution Date, (A) their applicable percentage of the applicable
rate of interest on the Reset Rate Notes multiplied by the U.S. Dollar
Equivalent Principal Amount of the Reset Rate Notes and multiplied by a
fraction determined by the number of days in the applicable Accrual Period and
the applicable Day Count Basis, and (B) the applicable non-U.S. Dollar currency
equivalent of the U.S. Dollars such Swap Counterparty concurrently receives
from the Trust as a payment of principal allocated to the Reset Rate
Noteholders (including, on the Maturity Date for the Reset Rate Notes, if a
Cross-Currency Swap Agreement is then in effect, the remaining Outstanding
Amount of the Reset Rate Notes) but only to the extent that the required U.S.
Dollar Equivalent Principal Amount is received from the Trust on such date, at
an exchange rate to be set on the effective date of and set forth in the
related Cross-Currency Swap Agreement; and (y) on the second Business Day
following a Distribution Date that is also a Reset Date (other than for any
Reset Period following a Reset Date upon which a Failed Remarketing has occurred,
up to and including the Reset Date resulting in a successful remarketing or an
exercise of the Call Option) their applicable percentage of interest at the
interest rate from and including the Reset Date to, but excluding, the second
Business Day following such Reset Date. 
For any Reset Period following a Reset Date upon which a Failed
Remarketing has occurred, up to any including the Reset Date resulting in a
successful remarketing or an exercise of the Call Option for the Reset Rate
Notes, payments of interest and principal to the Reset Rate Noteholders will be
made on the second Business Day following the Reset Date without the payment of
any additional interest.

 

(b)                                                                                                                                 In
addition, if the Reset Rate Notes are to be reset in Foreign Exchange Mode, on
the Reset Date, the Remarketing Agents will appoint one or more Swap Agents and
cause such Swap Agents to enter into one or more Reset Date Currency Swap
Agreements with Eligible Swap Counterparties for the next Reset Period.  Each Reset Date Currency Swap Agreement will
share the same currency exchange rate as the related Cross-Currency Swap
Agreement.

 

A-2-9

 

(i)                                                                                     On
the effective date of any Reset Date Currency Swap Agreement (except with
respect to the Initial Reset Date Currency Swap Agreements) (A) the Remarketing
Agents will deliver to each Swap Agent, for further delivery to the related
Swap Counterparty, its percentage of all secondary trade sale proceeds received
from purchasers of the Reset Rate Notes in the applicable non-U.S. Dollar
currency, and (B) in return, the related Swap Counterparty will deliver to the
related Swap Agent, for delivery to the Remarketing Agents, the U.S. Dollar
equivalent of such sale proceeds using the conversion rate established on the
applicable effective date.  Upon
receipt, the Remarketing Agents will then deliver such sums either (1) to the
tendering Reset Rate Noteholders, if the Reset Rate Notes were denominated in
U.S. Dollars immediately prior to such Reset Date, as payment in full of the
Outstanding Amount of the Reset Rate Notes, or (2) if the Reset Rate Notes were
in Foreign Exchange Mode immediately prior to such Reset Date, to the related
Swap Agent for the Reset Date Currency Swap Agreement in effect for the Reset Period
ending on such Reset Date for the purposes described in subparagraph (ii)
below.

 

(ii)                                                                                  On
the Reset Date corresponding to the successful remarketing of the Reset Rate
Notes, (A) each Swap Agent for the related Reset Date Currency Swap Agreement
in effect for the Reset Period ending on such Reset Date will be obligated to
deliver to the related Swap Counterparty for the related Reset Date Currency
Swap Agreement in effect for the Reset Period ending on such Reset Date, its
percentage of all U.S. Dollar secondary trade sale proceeds received from the
Remarketing Agents that the Remarketing Agents either received directly from
the purchasers of such Reset Rate Notes (if remarketed in U.S. Dollars) or from
such Swap Agent with respect to the related Reset Date Currency Swap Agreement
commencing on such Reset Date (if remarketed in Foreign Exchange Mode, as
described in subparagraph (i) above), and (B) in return, the related Swap
Counterparty for the related Reset Date Currency Swap Agreement in effect for the
Reset Period ending on such Reset Date will deliver to the related Swap Agent
for the related Reset Date Currency Swap Agreement in effect for the Reset
Period ending on such Reset Date, for delivery to the Remarketing Agents, the
non-U.S. Dollar currency equivalent of such secondary trade sale proceeds,
using the exchange rate set forth in such Reset Date Currency Swap
Agreement.  The Remarketing Agents will
then deliver such non-U.S. Dollar currency amounts to the tendering Reset Rate
Noteholders, as payment in full of the Outstanding Amount of their Reset Rate
Notes, and the Reset Date Currency Swap Agreement effective during the previous
Reset Period will terminate in accordance with its terms.

 

(c)                                                                                                                                  On
the Closing Date, and on each Reset Date if the Reset Rate Notes are to be
reset in U.S. Dollars, and a Swap Agreement is required pursuant to Sections
2(c) and 9(d) above, then the Administrator will enter into (not in its
individual capacity, but solely as Administrator on behalf of the Trust) or will
instruct the Eligible Lender Trustee to enter into (not in its individual
capacity, but solely as Eligible Lender Trustee), one or more Interest Rate
Swap Agreements for the next Reset Period to facilitate the Trust’s ability to
pay applicable interest at the related interest rate.

 

(i)                                                                                     Each
Swap Counterparty (including, without limitation, the Initial Interest Rate
Swap Counterparty) which is party to a related Interest Rate Swap

 

A-2-10

 

Agreement will
be entitled to receive on each Distribution Date an interest rate of
Three-Month LIBOR, plus or minus a spread, as determined from the bidding
process described in Section 10(d) below, multiplied by the Outstanding Amount
of the Reset Rate Notes and multiplied by a fraction determined by the number
of days in the applicable Accrual Period and the applicable Day Count Basis.

 

(ii)                                                                                  In
addition, each related Swap Counterparty (including, without limitation, the
Initial Interest Rate Swap Counterparty) which is a party to a related Interest
Rate Swap Agreement will be obligated to pay to the Trust on each Distribution
Date, the applicable rate of interest on the Reset Rate Notes multiplied by the
Outstanding Amount of the Reset Rate Notes and multiplied by a fraction
determined by the number of days in the applicable Accrual Period and the
applicable Day Count Basis.

 

(d)                                                                                                                                 Other
than with respect to the Initial Swap Agreement, the Remarketing Agents, in
consultation with the Administrator, in determining the Swap Counterparty to
each required Swap Agreement, will solicit bids from at least three Eligible
Swap Counterparties and will select the lowest of these bids to provide the
interest rate swap and/or currency exchange swap(s).  If the lowest bidder specifies a notional amount that is less
than the Outstanding Amount of the Reset Rate Notes, the Remarketing Agents, in
consultation with the Administrator, may select more than one Eligible Swap
Counterparty, but only to the extent that such additional Eligible Swap Counterparties
have provided the next lowest received bid or bids, and enter into more than
one Swap Agreement that result in the Rating Agency Condition being
satisfied.  On or before the Spread
Determination Date, the Remarketing Agents, in consultation with the
Administrator, will select the Swap Counterparty or Counterparties and any
related Swap Agents and will cause any such Swap Agent or Swap Agents to enter
into the required Swap Agreements on the Reset Date for the upcoming Reset
Period.

 

(e)                                                                                                                                  Other
than with respect to the Initial Swap Agreement, it is a condition precedent to
the entering into of any Swap Agreement and the setting of the amount to be
paid to the related Swap Counterparty that the Rating Agency Condition is
satisfied.  No Swap Agreement will be
entered into or caused to be entered into by the Trust, the Administrator on
its behalf, the Remarketing Agents or a Swap Agent on their behalf, for any
Reset Period where either the Call Option has been exercised or a Failed
Remarketing has been declared.

 

(f)                                                                                                                                    Each
Cross-Currency Swap Agreement and each Reset Date Currency Swap Agreement will
terminate at the earliest to occur of (i) the next succeeding Reset Date
for which there is a successful remarketing, (ii) the Reset Date for which the
Call Option is exercised, (iii) the Distribution Date on which the
Outstanding Amount of the Reset Rate Notes are reduced to zero (including as
the result of the optional purchase of the remaining Trust Student Loans by the
Servicer or an auction of the Trust Student Loans by the Indenture Trustee) or
(iv) the Maturity Date of the Reset Rate Notes.  No Cross-Currency Swap Agreement or Reset Date Currency Swap
Agreement will terminate solely due to the declaration of a Failed
Remarketing.  Each Interest Rate Swap
Agreement will terminate on the earliest to occur of the next Reset Date, or
the occurrence of an event specified in clause (iii) or (iv) above.

 

A-2-11

 

(g)                                                                                                                                 With
respect to each Cross-Currency Swap Agreement, and in the event that a Failed
Remarketing is declared, the rate of interest due to each related
Cross-Currency Swap Counterparty from the Trust on each Distribution Date will
be increased to the Extension Rate and the rate due to the Trust from each
related Cross-Currency Swap Counterparty will change to equal the Failed
Remarketing Rate.

 

Section 11.                                                                                      Accumulation
Account; Supplemental Interest Account: 
(a)  If, on any Distribution
Date, principal would be payable to the Reset Rate Notes which are then bearing
interest at a fixed rate (including without limitation during the initial Reset
Period), that principal (subject to sufficient Available Funds therefor) will
be allocated to the Reset Rate Notes and deposited into the Accumulation
Account, where it will remain until the next Reset Date (except that if the
Reset Rate Notes are in Foreign Exchange Mode, principal will be paid according
to the provisions of Sections 10(a)(i) and (a)(ii) above), unless an Event of
Default under the Indenture or a sale of the Trust Estate pursuant to Section
6.1 of the Administration Agreement has occurred (in which case the Indenture
Trustee will distribute all sums on deposit therein (exclusive of Investment
Earnings) to the Reset Rate Noteholders in accordance with the provisions of
Section 5.4(b) of the Indenture or Section 6.1 of the Administration Agreement,
as applicable).

 

(b)                                                                                                                                 On
each Reset Date, if the Reset Rate Notes bore interest at a fixed rate during
the preceding Reset Period (including without limitation, on the Initial Reset
Date), all sums, if any, then on deposit in the Accumulation Account, including
any allocation of principal made on the same date, but less any Investment
Earnings, will be distributed by the Indenture Trustee, at the direction of the
Administrator, as set forth in Section 2.8 of the Administration Agreement, (x)
to the holders of the Reset Rate Notes, as of the Record Date, or (y) if the
Reset Rate Notes are then in Foreign Exchange Mode, to the related
Cross-Currency Swap Counterparty or Counterparties for the benefit of such
Reset Rate Noteholders as of the Record Date pursuant to the provisions of
Section 10(a)(i) and (a)(ii) above, in reduction of principal of the Reset Rate
Notes; provided, that, in the event on any Distribution Date the amount on
deposit in the Accumulation Account (excluding any Investment Earnings) would
equal the Outstanding Amount of the Reset Rate Notes, no additional amounts
will be deposited into the Accumulation Account and all amounts therein, less
any Investment Earnings, will be distributed by the Indenture Trustee, at the
direction of the Administrator, as set forth in Section 2.8 of the
Administration Agreement, on the next Reset Date to the Reset Rate Noteholders
or the related Cross-Currency Swap Counterparty or Counterparties (as
applicable), and on such Reset Date the Reset Rate Notes will no longer be
Outstanding.  Amounts on deposit in an
Accumulation Account (exclusive of Investment Earnings) may be used only to pay
principal on the Reset Rate Notes (or to the related Cross-Currency Swap
Counterparty or Counterparties) and for no other purpose.  On each Distribution Date, all Investment
Earnings on deposit in the Accumulation Account will be withdrawn by the
Indenture Trustee, at the direction of the Administrator and deposited into the
Collection Account.

 

(c)                                                                                                                                  The
Indenture Trustee, subject to sufficient available funds therefor, at the
direction of the Administrator and pursuant to Section 2.10(d)(ii) of the
Administration Agreement, will deposit into the Supplemental Interest Account,
the related Supplemental Interest Account Deposit Amount.  On each Distribution Date, all sums (which
shall include Investment Earnings) on deposit in the Supplemental Interest
Account will be

 

A-2-12

 

withdrawn by
the Indenture Trustee, at the direction of the Administrator, as set forth in
Section 2.10(d)(iii) of the Administration Agreement, and deposited into the
Collection Account.

 

Section 12.                                                                                      Remarketing
Agents; Swap Agent; Remarketing Fee Account: (a) The initial Remarketing
Agents, appointed pursuant to the terms of the Remarketing Agreement, are
Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated.  The terms and conditions of the Remarketing
Agreement will govern the duties and obligations of the Remarketing Agents and
each Swap Agent.  The Administrator, the
Trust and the Remarketing Agents will enter into on each (A) Remarketing Terms
Determination Date, a Remarketing Agency Agreement, in form and substance
substantially the same as Appendix B to the Remarketing Agreement, unless (i) a
Failed Remarketing is declared, or (ii) the holder of the Call Option has
delivered the Call Option Notice on or prior to such date; and (B) Spread
Determination Date, a Supplemental Remarketing Agency Agreement, in form and
substance substantially the same as Appendix C to the Remarketing Agreement,
unless (i) a Failed Remarketing is declared, (ii) the holder of the Call Option
has delivered the Call Option Notice on or prior to such date, or (iii) if
applicable, 100% of the Reset Rate Noteholders have timely delivered a Hold
Notice and the All Hold Rate will apply for the next Reset Period.

 

(b)                                 If
the Reset Rate Notes are in Foreign Exchange Mode or will be reset into Foreign
Exchange Mode, then pursuant to Section 13 of the Remarketing Agreement, the
Remarketing Agents shall appoint one or more Swap Agents to act as agent for
the Remarketing Agent and for the benefit of the Reset Rate Noteholders, and
instruct each Swap Agent to enter into a Reset Date Currency Swap
Agreement.  The duties and obligations
of each Swap Agent are set forth in the Remarketing Agreement.

 

(c)                                  Excluding
all Reset Rate Notes for which a Remarketing Agent has received a timely
delivered Hold Notice, if applicable (or if the holder of the Call Option has
delivered the related Call Option Notice), on the Reset Date that commences
each Reset Period, each Reset Rate Note will be automatically tendered, or
deemed tendered, to the relevant Remarketing Agent for remarketing by such
Remarketing Agent on the Reset Date at 100% of its Outstanding Amount.  If the Reset Rate Notes are held in
book-entry form, 100% of the Outstanding Amount of such Reset Rate Notes will
be paid by the Remarketing Agents in accordance with the standard procedures of
the applicable Clearing Agencies.

 

(d)                                 The
Remarketing Agents will attempt, on a reasonable efforts basis and in
accordance with the terms and conditions of the Remarketing Agreement and the
related Remarketing Agency Agreement, to remarket the tendered Reset Rate Notes
at a price equal to 100% of the Outstanding Amount of the Reset Rate Notes so
tendered.

 

(e)                                                                                                                                  Purchasers
of the Reset Rate Notes will be credited with their positions on the Reset Date
with respect to positions held through DTC or on the next Business Day with
respect to positions held through the European Clearing Systems.  No payment delay to existing Reset Rate
Noteholders holding U.S. Dollar-denominated Reset Rate Notes through DTC will
occur on the Reset Date for such Reset Rate Notes denominated in U.S. Dollars
during the immediately following Reset Period.

 

A-2-13

 

(f)                                                                                                                                    Each
of the Remarketing Agents, in its individual or any other capacity, may buy,
sell, hold and deal in the Reset Rate Notes, including, but not limited to,
purchasing any tendered Reset Rate Notes as part of the remarketing
process.  Any Remarketing Agent that
owns a Reset Rate Note may exercise any vote or join in any action which any
beneficial owner of the Reset Rate Notes may be entitled to exercise or take
with like effect as if it did not act in any capacity under the Remarketing
Agreement or Remarketing Agency Agreement. 
Any Remarketing Agent, in its individual capacity, either as principal
or agent, may also engage in or have an interest in any financial or other
transaction with the Trust, the Depositor, the Servicer, the Indenture Trustee
(in its individual capacity), the Eligible Lender Trustee (in its individual
capacity) or the Administrator as freely as if it did not act in any capacity
under the Remarketing Agreement or any Remarketing Agency Agreement.  No Reset Rate Noteholder or beneficial owner
of any Reset Rate Note will have any rights or claims against any Remarketing
Agent as a result of such Remarketing Agent’s not purchasing any tendered Reset
Rate Note, which results in the declaration of a Failed Remarketing.

 

(g)                                                                                                                                 Each
of the Remarketing Agents will be entitled to receive a fee in connection with
their services rendered for each successful remarketing of the Reset Rate Notes
in the amount set forth in the Remarketing Agreement and the related
Remarketing Agency Agreement.  Subject
to the terms and conditions set forth in the Remarketing Agreement, the
Administrator, in its sole discretion, may change the Remarketing Agents for
the Reset Rate Notes for any Reset Period at any time on or before the related
Remarketing Terms Determination Date. 
In addition, the Administrator will appoint one or more additional Remarketing
Agents, if necessary, for a Reset Date when the Reset Rate Notes will be
remarketed in a non-U.S. Dollar currency. 
Furthermore, a Remarketing Agent may resign at any time; provided
that no resignation may become effective on a date that is later than 15
Business Days prior to a Remarketing Terms Determination Date.

 

(h)                                                                                                                                 In
accordance with Section 2.3(i) of the Administration Agreement, on the Closing
Date, the Trust will establish the Remarketing Fee Account as an asset of the
Trust in the name of the Indenture Trustee, for the benefit of the Remarketing
Agents and the Reset Rate Noteholders. 
The fees associated with each successful remarketing will be payable
directly to the Remarketing Agents from amounts on deposit from time to time in
the Remarketing Fee Account.  On each
applicable Distribution Date, Available Funds will be deposited into the
Remarketing Fee Account, in the priority set forth in Section 2.8(c) of the
Administration Agreement, in an amount up to the Quarterly Funding Amount; provided,
that if the amount on deposit in the Remarketing Fee Account, after the payment
of any remarketing fees therefrom, exceeds the sum of the Reset Period Target
Amount for all Reset Rate Notes, such excess will be withdrawn on the related
Distribution Date, deposited into the Collection Account and included in
Available Funds for that Distribution Date. 
All Investments Earnings on deposit in the Remarketing Fee Account will
be withdrawn on the next Distribution Date, deposited into the Collection Account
and included in Available Funds for that Distribution Date.  In the event that the fees owed to any
Remarketing Agent on a Reset Date exceeds the amount then on deposit in the
Remarketing Fee Account, such shortfall shall be paid from Available Funds on
future Distribution Dates in the priority set forth in Section 2.8(n) of the
Administration Agreement.  The Trust
shall also be responsible for certain remarketing costs and expenses to the
extent set forth in Section 3 of the Remarketing Agreement, which shall be paid

 

A-2-14

 

on each
Distribution Date, to the extent of Available Funds, at the priority set forth
in Section 2.8(o) of the Administration Agreement.

 

Section 13.                                                                                      Eligible
Lender Trustee:  The Eligible Lender
Trustee is hereby authorized and directed to execute and deliver, not in its
individual capacity, but solely as Eligible Lender Trustee on behalf of the
Trust, the Remarketing Agreement, any Swap Agreements (including the Initial
Interest Rate Swap Agreement), and all Remarketing Agency Agreements and
Supplemental Remarketing Agency Agreements as the Administrator, in writing and
from time to time, shall instruct the Eligible Lender Trustee to execute.  The Eligible Lender Trustee shall not be
liable to any party, any third party or any Noteholder for any such actions
taken at the written instruction of the Administrator.  Notwithstanding the foregoing, in the event
that the Eligible Lender Trustee declines or fails to execute or deliver any such
document, instrument, certificate or agreement as instructed by the
Administrator, the Administrator is hereby authorized, in its sole discretion,
to execute and deliver, not in its individual capacity but solely as
Administrator on behalf of the Trust, all such required documents, instruments,
certificates and agreements.  The
foregoing authorization shall represent a limited power of attorney granted by
the Trust to the Administrator to act on its behalf, and the Administrator
shall not be liable to any party, any third party or any Noteholder for any
such actions taken in good faith and in accordance with these Reset Rate Note
Procedures.

 

A-2-15

 

APPENDIX
A-3

 

TRANSFER RESTRICTIONS
FOR 

THE RESET RATE NOTES

 

1.                                                               Except
as otherwise specified herein or as the context may otherwise require,
capitalized terms used but not otherwise defined in this Appendix A-3 (this
“Appendix”) are defined in Appendix A-1, which also contains rules as to usage
that shall be applicable herein.

 

2.                                                               The
Indenture Trustee, as Note Registrar, shall provide for the registration of the
Reset Rate Notes and of Transfers and exchanges of the Reset Rate Notes
pursuant to Section 2.4 of the Indenture.

 

3.                                                               The
Reset Rate Notes initially will be represented by registered notes of such
class in global form and shall be issued in the manner set forth in Sections
2.1, 2.2 and 2.10 of the Indenture. 
Global Note Certificates representing interests in the Reset Rate Notes
may be reissued and represented by Reset Rate Notes of such class in definitive
form pursuant to Section 2.12 of the Indenture.

 

4.                                                               During
any Reset Period when the Reset Rate Notes are denominated in a non-U.S. Dollar
currency, any Transfer of Reset Rate Notes made in violation of Section 2.1 of
the Indenture whereby a beneficial interest in either of the Non-U.S. Global
Note Certificates is Transferred to any related U.S. Global Note Certificate,
or vice versa (other than on a Reset Date where such class is being reset from
being denominated in Foreign Exchange Mode, to U.S. Dollars), shall be null and
void and of no effect.

 

5.                                                               Each
purchaser of the Reset Rate Notes that represent a beneficial interest in a
Global Note Certificate will be deemed to have represented and agreed, and each
purchaser of a Definitive Note will be required to certify in writing, that:

 

(i)                                     (A)
the purchaser is a QIB and is acquiring such Reset Rate Notes for its own
account or as a fiduciary or agent for others (which others also must be QIBs),
for investment purposes and not for distribution in violation of the Act, and
it is able to bear the economic risk of an investment in the Reset Rate Notes
and has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of purchasing the Reset Rate
Notes or (B) the purchaser is a non-U.S. Person (as defined in
Regulation S) outside the United States of America, acquiring the Reset
Rate Notes pursuant to an exemption from registration in accordance with Rule 903
or Rule 904 of Regulation S;

 

(ii)                                  the
purchaser understands that the Reset Rate Notes are being offered only in a
transaction that does not require registration under the Act and, if such
purchaser decides to resell or otherwise Transfer such Reset Rate Notes, then
it agrees that it will resell or Transfer such Reset Rate Notes only
(A) so long as such Reset Rate Notes are eligible for resale pursuant to
Rule 144A, to a person whom the seller

 

A-3-1

 

reasonably believes is a
QIB acquiring the Reset Rate Notes for its own account or as a fiduciary or
agent for others (which others must also be QIBs) to whom notice is given that
the resale or other Transfer is being made in reliance on Rule 144A, (B) pursuant
to an effective registration statement under the Act, (C) pursuant to an
exemption from registration available under the Act other than Rule 144A, or
(D) to a purchaser who is a non-U.S. Person (as defined in Regulation S)
outside the United States of America, acquiring the Reset Rate Notes pursuant
to an exemption from registration under the Act in accordance with Rule 903 or
Rule 904 of Regulation S, in each case in accordance with any applicable United
States state securities or “blue sky” laws or any securities laws of any other
jurisdiction;

 

(iii)                               unless
the relevant legend set out below has been removed from the Reset Rate Notes
such purchaser shall notify each transferee of the Reset Rate Notes that (A)
such Reset Rate Notes have not been registered under the Act, (B) the holder of
such Reset Rate Notes is subject to the restrictions on the resale or other
Transfer thereof described in paragraph (ii) above, (C) such transferee shall
be deemed to have represented (1) as to its status as a QIB or a purchaser
acquiring the Reset Rate Notes in an offshore transaction pursuant to the
requirements of Regulation S, as the case may be, (2) if such transferee is a
QIB, that such transferee is acquiring the Reset Rate Notes for its own account
or as a fiduciary or agent for others (which others also must be QIBs) (or that
such transferee is acquiring such Reset Rate Notes in reliance on an exemption
under the Act other than Rule 144A or pursuant to an effective registration
statement under the Act), (3) if such transferee is a non-U.S. Person (as
defined in Regulation S) outside the United States of America, that such
transferee is acquiring the Reset Rate Notes pursuant to an exemption from
registration under the Act in accordance with the requirements of Rule 903 or
Rule 904 of Regulation S, (4) that such transferee is not an underwriter within
the meaning of Section 2(11) of the Act, and (5) that such transferee shall be
deemed to have agreed to notify its subsequent transferees as to the foregoing;

 

(iv)                              the
acquisition or purchase by an employee benefit plan or other retirement
arrangements (“Plan”) of a Reset Rate Note will not constitute or otherwise
result in:  (A) in the case of a
Plan subject to Section 406 of Employee Retirement Income Security Act of 1974,
as amended (“ERISA”) or Section 4975 of the Internal Revenue Code of 1986, as
amended (“Code”), a non-exempt prohibited transaction in violation of Section
406 of ERISA or Section 4975 of the Code which is not covered by a class or
other applicable exemption and (B) in the case of a Plan subject to a
substantially similar federal, state, local or foreign law (“Similar Law”), a
non-exempt violation of such substantially Similar Law.

 

6.                                       (A)
By acceptance of a Reset Rate Note, whether upon original issuance or
subsequent Transfer, each Reset Rate Noteholder or Note Owner, as applicable,
of such Reset Rate Note (or a beneficial interest therein) offered and sold
only to a QIB in reliance on Rule 144A,

 

A-3-2

 

acknowledges
or is deemed to acknowledge, as the case may be, the restrictions on the
Transfer of such Reset Rate Notes and that the following securities legend (the
“Rule 144A Securities Legend”) shall be affixed to each U.S. Rule 144A Global Note
Certificate (as defined in Section 2.1 of the Indenture), Non-U.S. Rule
144A Global Note Certificate (as defined in Section 2.1 of the Indenture)
and each Definitive Note representing an interest in either such certificate
(collectively, the “Rule 144A Certificates”) unless determined otherwise in
accordance with applicable law:

 

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY UNITED
STATES STATE SECURITIES OR “BLUE SKY” LAWS OR ANY SECURITIES LAWS OF ANY OTHER
JURISDICTION, AND, AS A MATTER OF U.S. LAW, MAY NOT BE OFFERED OR SOLD IN
VIOLATION OF THE SECURITIES ACT OR SUCH OTHER LAWS.  THIS NOTE MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF NOT
LESS THAN $250,000, £100,000, €100,000 OR THE APPLICABLE CURRENCY EQUIVALENT OF
$250,000, DEPENDING ON ITS CURRENCY OF DENOMINATION.  THE HOLDER HEREOF, BY PURCHASING OR ACCEPTING THIS NOTE IS HEREBY
DEEMED TO HAVE AGREED FOR THE BENEFIT OF THE TRUST AND THE INITIAL PURCHASERS
THAT IT WILL RESELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE, AS A MATTER OF
U.S. LAW, ONLY (A) (1) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE, PURSUANT TO
RULE 144A PROMULGATED UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED
IN RULE 144A (A “QUALIFIED INSTITUTIONAL BUYER”), THAT IS ACQUIRING THIS NOTE
FOR ITS OWN ACCOUNT OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS MUST
ALSO BE QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE RESALE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OTHER THAN RULE 144A, (3)
TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S PROMULGATED
UNDER THE SECURITIES ACT) OUTSIDE THE UNITED STATES OF AMERICA ACQUIRING THIS
NOTE IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S PROMULGATED UNDER
THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY UNITED STATES STATE
SECURITIES OR “BLUE SKY” LAWS OR ANY SECURITIES LAWS OF ANY OTHER
JURISDICTION.  UPON ACQUISITION OR
TRANSFER OF A RESET RATE NOTE OR A BENEFICIAL INTEREST IN A RESET RATE NOTE, AS
THE CASE MAY BE, BY, FOR OR WITH THE ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT (A “PLAN”),

 

A-3-3

 

SUCH RESET RATE NOTE OWNER SHALL BE DEEMED TO HAVE REPRESENTED THAT
SUCH ACQUISITION OR PURCHASE WILL NOT CONSTITUTE OR OTHERWISE RESULT IN:  (I) IN THE CASE OF A PLAN SUBJECT TO SECTION
406 OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), A
NON-EXEMPT PROHIBITED TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WHICH IS NOT COVERED BY A CLASS OR OTHER APPLICABLE
EXEMPTION AND (II) IN THE CASE OF A PLAN SUBJECT TO A SUBSTANTIALLY SIMILAR
FEDERAL, STATE, LOCAL OR FOREIGN LAW (“SIMILAR LAW”), A NON-EXEMPT VIOLATION OF
SUCH SUBSTANTIALLY SIMILAR LAW.  ANY
TRANSFER FOUND TO HAVE BEEN MADE IN VIOLATION OF SUCH DEEMED REPRESENTATION
SHALL BE NULL AND VOID AND OF NO EFFECT.

 

THIS NOTE AND RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES UNDERTAKEN OR
REPRESENTED BY THE HOLDER, FOR RESALES AND OTHER TRANSFERS OF THIS NOTE, TO
REFLECT ANY CHANGE IN APPLICABLE LAWS OR REGULATIONS (OR THE INTERPRETATION THEREOF)
OR IN PRACTICES RELATING TO RESALES OR OTHER TRANSFERS OF RESTRICTED SECURITIES
GENERALLY.  THE HOLDER OF THIS NOTE AND
ANY BENEFICIAL OWNER OF ANY INTEREST THEREIN SHALL BE DEEMED, BY ITS ACCEPTANCE
OR PURCHASE HEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT (EACH OF
WHICH SHALL BE CONCLUSIVE AND BINDING ON THE HOLDER HEREOF AND ALL FUTURE
HOLDERS OF THIS NOTE AND ANY RESET RATE NOTES ISSUED IN EXCHANGE OR
SUBSTITUTION HEREFOR, WHETHER OR NOT ANY NOTATION THEREOF IS MADE HEREON) AND
AGREES TO TRANSFER THIS NOTE ONLY IN ACCORDANCE WITH ANY SUCH AMENDMENT OR
SUPPLEMENT IN ACCORDANCE WITH APPLICABLE LAW IN EFFECT AT THE DATE OF SUCH
TRANSFER.

 

(B) By acceptance of a Reset Rate Note, whether upon original issuance
or subsequent Transfer, each Reset Rate Noteholder or Note Owner, as
applicable, of the Reset Rate Notes (or a beneficial interest therein) offered
and sold only to a non-U.S. Person (as defined in Regulation S) outside the
United States of America in reliance on Regulation S acknowledges or is deemed
to acknowledge, as the case may be, the restrictions on the Transfer of such
Reset Rate Notes and that the following securities legend (the “Regulation S
Securities Legend” and with the Rule 144A Securities Legend, the “Securities
Legends” and each a “Securities Legend”) shall be affixed to each Regulation S
Global Note Certificate and each Definitive Note representing an interest in
such certificate (collectively, the “Regulation S Certificates”) unless
determined otherwise in accordance with applicable law:

 

A-3-4

 

THIS NOTE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
ANY UNITED STATES STATE SECURITIES OR “BLUE SKY” LAWS OR ANY SECURITIES LAWS OF
ANY OTHER JURISDICTION, AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS
40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING OF THE RESET RATE
NOTES AND THE CLOSING OF THE OFFERING OF THE RESET RATE NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OF AMERICA OR TO A
U.S. PERSON (AS DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT)
EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY UNITED STATES STATE
SECURITIES OR “BLUE SKY” LAWS OR ANY SECURITIES LAWS OF ANY OTHER
JURISDICTION.  THIS NOTE MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF NOT LESS THAN $250,000, £100,000,
€100,000 OR THE APPLICABLE CURRENCY EQUIVALENT OF $250,000, DEPENDING ON ITS
CURRENCY OF DENOMINATION.

 

UPON
ACQUISITION OR TRANSFER OF A RESET RATE NOTE OR A BENEFICIAL INTEREST IN A
RESET RATE NOTE, AS THE CASE MAY BE, BY, FOR OR WITH THE ASSETS OF, AN EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (A “PLAN”), SUCH RESET RATE NOTE
OWNER SHALL BE DEEMED TO HAVE REPRESENTED THAT SUCH ACQUISITION OR PURCHASE
WILL NOT CONSTITUTE OR OTHERWISE RESULT IN: 
(I) IN THE CASE OF A PLAN SUBJECT TO SECTION 406 OF EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), A NON-EXEMPT PROHIBITED
TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
WHICH IS NOT COVERED BY A CLASS OR OTHER APPLICABLE EXEMPTION AND (II) IN THE
CASE OF A PLAN SUBJECT TO A SUBSTANTIALLY SIMILAR FEDERAL, STATE, LOCAL OR
FOREIGN LAW (“SIMILAR LAW”), A NON-EXEMPT VIOLATION OF SUCH SUBSTANTIALLY
SIMILAR LAW.  ANY TRANSFER FOUND TO HAVE
BEEN MADE IN VIOLATION OF SUCH DEEMED REPRESENTATION SHALL BE NULL AND VOID AND
OF NO EFFECT.

 

Upon the
Transfer, exchange or replacement of a Rule 144A Certificate or a Regulation S
Certificate bearing the applicable legends set forth above, or upon specific
request for removal of the legends, the Trust or the Registrar will deliver
only replacement Rule 144A Certificates or Regulation S Certificates, as the
case may be, that bear such applicable legends, or will refuse to remove such
applicable legends, unless there is delivered to the Trust and the Registrar
such

 

A-3-5

 

satisfactory evidence (which may include a
legal opinion) as may reasonably be required by the Trust and the Indenture
Trustee that neither the applicable legends nor the restrictions on Transfer
set forth therein are required to ensure compliance with the provisions of the
Act.

 

Whenever a
Global Note Certificate is to be exchanged for Definitive Notes, such
Definitive Notes will be issued within five business days of delivery to the
Registrar of the information and any required certification described in the
preceding paragraph against the surrender of the relevant Global Note Certificate
at the specified office of the Registrar. 
Such exchange shall be effected in accordance with the regulations
concerning the Transfer and registration from time to time relating to the
Reset Rate Notes and shall be effected without charge, but against such
indemnity as the Registrar may require in respect of any tax or other duty of
whatsoever nature which may be levied or imposed in connection with such
exchange.

 

Each Reset
Rate Noteholder or Note Owner, as applicable, of such Reset Rate Note, by its
acceptance of a Reset Rate Note or a beneficial interest therein, respectively,
also agrees that it will Transfer such Reset Rate Note or beneficial interest
therein, as the case may be, only as provided herein and in accordance with the
Indenture.  In addition, by acceptance
of any Reset Rate Note or beneficial interest therein, as applicable, each
proposed transferee thereof is hereby deemed to have agreed with the conditions
set forth in the applicable Securities Legend and agreed, by virtue of its acceptance
of such Reset Rate Note or beneficial interest therein, as the case may be, to
indemnify the Administrator, the Depositor, the Servicer, the Indenture Trustee
the Eligible Lender Trustee, the Remarketing Agents (in the event such Transfer
is made pursuant to a successful remarketing on a Reset Date) and the Issuer
against any and all liability that may result if such Transfer is not made in a
manner consistent with the restrictions set forth in the Securities Legend.  In addition to any applicable restrictions
in the Indenture, with respect to the Transfer and registration of Transfer of
any Reset Rate Note registered in the name of a Reset Rate Noteholder other
than DTC or its nominee, or Euroclear or Clearstream, Luxembourg or their joint
nominee, as the case may be, to a transferee that takes delivery in the form of
a Definitive Note, in a transaction other than pursuant to an effective
registration statement under the Act, the Indenture Trustee shall register the
Transfer of such Definitive Note if (i) (A) the requested Transfer is
being made to a transferee who has provided the Indenture Trustee and the
Administrator with a Rule 144A and Related Matters Certificate,
substantially in the form attached as Annex 1 hereto, (B) such
transferee has provided comparable evidence as to its QIB status, (C) such
Transfer is being made in compliance with Regulation S and such transferee has
provided the Indenture Trustee and the Administrator with a Regulation S and
Related Matters Certificate, substantially in the form attached as Annex 1
hereto, or (D) such Transfer is being made in reliance on an exemption
from registration under the Act other than Rule 144A or Regulation S and that
such transferor has provided the Indenture Trustee and the Administrator with
reasonably acceptable evidence thereof, and (ii) the applicable transferor has
provided the Indenture Trustee and the Administrator with a Transferor Letter,
substantially in the form of Annex 2 hereto.

 

6.                                       The
Reset Rate Notes will be issued only in minimum denominations of $250,000, or
the applicable currency equivalent of $250,000, €100,000, £100,000 or the
applicable currency equivalent of $250,000, depending on their currency of
denomination, and integral multiples of $1, €1, £1 or the applicable currency
equivalent of $1, depending on their currency of

 

A-3-6

 

denomination,
in excess thereof.  The Reset Rate Notes
are exchangeable at any time into an equal aggregate principal amount of Reset
Rate Notes of the same class of different authorized denominations pursuant to
Section 2.4 of the Indenture.

 

7.                                       Reset
Rate Notes may be presented or surrendered pursuant to Section 2.4 of the
Indenture.

 

8.                                       No
service charge shall be made to a Noteholder for any registration of Transfer
or exchange of Reset Rate Notes, but the Indenture Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge pursuant to
Section 2.4 of the Indenture.

 

9.                                       The
Indenture Trustee shall cancel all Reset Rate Notes surrendered for Transfer or
exchange pursuant to Section 2.8 of the Indenture.

 

10.                                 For
so long as the Reset Rate Notes are “restricted securities” within the meaning
of Rule 144(a)(3) of the Act, (1) the Administrator will provide or cause to be
provided to any holder of such Reset Rate Notes and any prospective purchaser
thereof designated by such a holder, upon the request of such holder or
prospective purchaser, the information required to be provided to such holder
or prospective purchaser by Rule 144A(d)(4) under the 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 Act under Rule 144A is and will be
available for resales of such Reset Rate Notes conducted in accordance with
Rule 144A.

 

A-3-7

 

ANNEX 1 TO 

APPENDIX A-3

 

FORM OF RULE 144A AND RELATED MATTERS
CERTIFICATE

 

[Date]

 

[SELLER]

 

The Bank of
New York, as Indenture Trustee 

2 North LaSalle, Suite 1020

Chicago, Illinois 60602

 

Sallie Mae,
Inc., as Administrator

11600 Sallie Mae Drive

Reston, Virginia 20193

 

	
  Re:

  	
   

  	
  SLM Student
  Loan Trust 2004-1, Student Loan-Backed, Class A-6 Reset Rate Notes (the
  “Reset Rate Notes”)

  

 

 

Dear Sirs:

 

In connection with our purchase of the Reset
Rate Notes of the above-referenced series, the undersigned certifies to each of
the parties to whom this letter is addressed that it is a qualified
institutional buyer (as defined in Rule 144A under the Securities Act of 1933,
as amended (the “Act”)) as follows:

 

(A)                              It
owned and/or invested on a discretionary basis eligible securities (excluding
affiliate’s securities, bank deposit notes and CD’s, loan participations,
repurchase agreements, securities owned but subject to a repurchase agreement
and swaps), as described below:

 

Date:
                            ,
20     (must be on or after the close of its most recent
fiscal year)

 

Amount:
$                                  ;
and

 

(B)                                The
dollar amount set forth above is: 

 

1.                                                               greater
than $100 million and the undersigned is one of the following entities:

 

an insurance company as defined in Section
2(13) of the Act; or

 

an investment company registered under the
Investment Company Act or any business development company as

 

A-3-8

 

defined in Section 2(a)(48) of the Investment
Company Act of 1940; or

 

a Small Business Investment Company licensed
by the U.S. Small Business Administration under Section 301 (c) or (d) of the
Small Business Investment Act of 1958; or

 

a plan (i) established and maintained by a
state, its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, the laws of which permit the purchase of
securities of this type, for the benefit of its employees and (ii) the
governing investment guidelines of which permit the purchase of securities of
this type; or

 

a business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940; or

 

a corporation (other than a U.S. bank,
savings and loan association or equivalent foreign institution), partnership,
Massachusetts or similar business trust, or an organization described in
Section 501(c)(3) of the Internal Revenue Code; or

 

a U.S. bank, savings and loan association or
equivalent foreign institution, which has an audited net worth of at least $25
million as demonstrated in its latest annual financial statements; or

 

an investment adviser registered under the
Investment Advisers Act; or

 

2.                                                               greater
than $10 million, and the undersigned is a broker-dealer registered with the
SEC; or

 

3.                                                               less
than $10 million, and the undersigned is a broker-dealer registered with the
SEC and will only purchase Rule 144A securities in transactions in which it
acts as a riskless principal (as defined in Rule 144A); or

 

4.                                                               less
than $100 million, and the undersigned is an investment company registered
under the Investment Company Act of 1940, which, together with one or more
registered investment companies having the same or an affiliated investment
adviser, owns at least $100 million of eligible securities; or

 

A-3-9

 

 

5.                                                               less
than $100 million, and the undersigned is an entity, all the equity owners of
which are qualified institutional buyers.

 

The undersigned further certifies that it is
purchasing the Reset Rate Notes for its own account or for the account of
others that independently qualify as “Qualified Institutional Buyers” as
defined in Rule 144A (a “QIB”). It is aware that the sale of the Reset Rate
Notes is being made in reliance on its continued compliance with Rule 144A. It
is aware that the transferor may rely on the exemption from the provisions of
Section 5 of the Act provided by Rule 144A. The undersigned understands that
the Reset Rate Notes may Transferred only (A) so long as such Reset Rate
Notes are eligible for resale pursuant to Rule 144A, to a person whom the
seller reasonably believes is a QIB acquiring the Reset Rate Notes for its own
account or as a fiduciary or agent for others (which others must also be QIBs)
to whom notice is given that the Transfer is being made in reliance on Rule
144A, (B) pursuant to an effective registration statement under the Act,
(C) pursuant to an exemption from registration available under the Act
other than Rule 144A, or (D) to a purchaser who is a non-U.S. Person (as
defined in Regulation S) outside the United States of America, acquiring
the Reset Rate Notes pursuant to an exemption from registration under the Act
in accordance with Rule 903 or Rule 904 of Regulation S, in each case in
accordance with any applicable United States state securities or “blue sky”
laws or any securities laws of any other jurisdiction.

 

The undersigned agrees that if at some future
time it wishes to dispose of or exchange any of the Reset Rate Notes, it will
not Transfer or exchange any of the Reset Rate Notes unless: (1) the sale is to
an Eligible Purchaser (as defined below), (2) all offers or solicitations in
connection with the sale, whether directly or through any agent acting on our
behalf, are limited only to Eligible Purchasers and are not made by means of
any form of general solicitation or general advertising whatsoever, and (3)
such transferee shall deliver a Rule 144A and Related Matters Certificate to
substantially the same effect as this letter to the addressees hereof or a
Regulation S and Related Matters Certificate substantially in the same form as
set forth in Annex 1 to Appendix 3 to the Indenture, or such other evidence as
may be reasonably acceptable to the Administrator.

 

The undersigned hereby represents and
warrants that the undersigned is accepting ownership of the Reset Rate Notes in
compliance with the restrictions set forth in Section 5 of Appendix A-3
to the Indenture, dated as of January 1, 2004 (the “Indenture”), among the
Trust, Chase Manhattan Bank USA, National Association, as eligible lender
trustee, and The Bank of New York, as indenture trustee, and acknowledges that
the Reset Rate Notes will be issued with the legends set forth in Section 6 of Appendix
A-3 to the Indenture.

 

“Eligible Purchaser” means a
corporation, partnership or other entity which we have reasonable grounds to
believe and do believe (A) (i) can make representations with respect to
itself to substantially the same effect as the representations set forth
herein, and (ii) is a QIB as defined under Rule 144A of the Act or any entity
in which all of the equity owners come within such paragraphs, (B) can make
representations with respect to itself to substantially the same effect as the
representations set forth in the Regulation S and Related Matters Certificate
in the same form as Annex 1 to Appendix 3 to the Indenture, or (C) (i) can
make representations with respect to itself substantially to the same effect as
the representations set forth herein (other than

 

A-3-10

 

to its status
as a QIB), and (ii) is acquiring such Reset Rate Notes in reliance on an
exemption to the Act other than Rule 144A in accordance with any applicable
United States state securities or “Blue Sky” laws.

 

If the Purchaser proposes that its Reset Rate
Notes be registered in the name of a nominee on its behalf, the Purchaser has
identified such nominee below, and has caused such nominee to complete the
Nominee Acknowledgment at the end of this letter.

 

Name of
Nominee (if any):
                                          

 

IN WITNESS WHEREOF, this document has been
executed by the undersigned who is duly authorized to do so on behalf of the
undersigned Qualified Institutional Buyer on the
         day of
                      ,
20    .

 

	
   

  	
  Name of Institution

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  

 

Nominee
Acknowledgment

 

The undersigned hereby acknowledges and
agrees that as to the Reset Rate Notes being registered in its name, the sole
beneficial owner thereof is and shall be the Purchaser identified above, for
whom the undersigned is acting as nominee.

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Duly Authorized

  	
   

  

 

A-3-11

 

FORM OF REGULATION S AND RELATED MATTERS
CERTIFICATE

 

[Date]

 

[SELLER]

 

The Bank of New
York, as Indenture Trustee 

2 North LaSalle, Suite 1020

Chicago, Illinois 60602

 

Sallie Mae,
Inc., as Administrator

11600 Sallie Mae Drive

Reston, Virginia 20193

 

	
  Re:

  	
   

  	
  SLM Student
  Loan Trust 2004-1, Student Loan-Backed, Class A-6 Reset Rate Notes (the “Reset
  Rate Notes”)

  

 

 

Dear Sirs:

 

In connection with our purchase of the Reset
Rate Notes of the above-referenced series, the undersigned certifies to each of
the parties to whom this letter is addressed that it is a non-U.S. person (as
defined in Regulation S) outside the United States of America, acquiring the
Reset Rate Notes pursuant to an exemption from registration in accordance with
Rule 903 or Rule 904 of Regulation S.

 

The undersigned further certifies that it is
purchasing the Reset Rate Notes for its own account or for the account of
others that independently qualify as non-U.S. persons (as defined in Regulation
S) outside the United States of America. 
It is aware that the sale of the Reset Rate Notes is being made in
reliance on its continued compliance with Rule 903 or Rule 904 of Regulation
S.  The undersigned understands that the
Reset Rate Notes may resold or transferred only (A) so long as such Reset
Rate Notes are eligible for resale pursuant to Rule 144A, to a person whom the
seller reasonably believes is a QIB acquiring the Reset Rate Notes for its own
account or as a fiduciary or agent for others (which others must also be QIBs)
to whom notice is given that the resale or other Transfer is being made in
reliance on Rule 144A, (B) pursuant to an effective registration statement
under the Act, (C) pursuant to another exemption from registration
available under the Act other than Rule 144A, or (D) to a purchaser who is a
non-U.S. Person (as defined in Regulation S) outside the United States of America,
acquiring the Reset Rate Notes pursuant to an exemption from registration under
the Act in accordance with Rule 903 or Rule 904 of Regulation S, in each case
in accordance with any applicable United States state securities or “blue sky”
laws or any securities laws of any other jurisdiction.

 

The undersigned agrees that if at some future
time it wishes to dispose of or exchange any of the Reset Rate Notes, it will
not Transfer or exchange any of the Reset Rate

 

A-3-12

 

Notes unless:
(1) the sale is to an Eligible Purchaser (as defined below), (2) all offers or
solicitations in connection with the sale, whether directly or through any
agent acting on our behalf, are limited only to Eligible Purchasers and are not
made by means of any form of general solicitation or general advertising
whatsoever, and (3) such transferee shall deliver a Rule 144A Certificate
substantially in the same form as Annex 1 to Appendix 3 to the Indenture, or a
Regulation S Certificate to substantially the same effect as this letter to the
addressees hereof or such other evidence as may be reasonably acceptable to the
Administrator and the Indenture Trustee.

 

The undersigned hereby represents and
warrants that the undersigned is accepting ownership of the Reset Rate Notes in
compliance with the restrictions set forth in Section 5 of Appendix A-3
to the Indenture, dated as of January 1, 2004 (the “Indenture”), among the
Trust, Chase Manhattan Bank USA, National Association, as eligible lender
trustee, and The Bank of New York, as indenture trustee, and acknowledges that
the Reset Rate Notes will be issued with the legends set forth in Section 5 to Appendix
A-3 to the Indenture.

 

“Eligible Purchaser” means a
corporation, partnership or other entity which we have reasonable grounds to
believe and do believe (A) (i) can make representations with respect to
itself to substantially the same effect as the representations set forth
herein, and (ii) is a QIB as defined under Rule 144A of the Act or any entity
in which all of the equity owners come within such paragraphs, (B) (i) can make
representions with respect to itself to substantially the same effect as the
representations set forth in the Regulation S Certificate in the same form as
Annex 1 to Appendix 3 to the Indenture, and (ii) is acquiring such Reset Rate
Notes pursuant to an exemption from registration in accordance with Rule 903 or
Rule 904 of Regulation S, or (C) (i) can make representations with respect
to itself substantially to the same effect as the representations set forth
herein (other than to its status as a QIB), and (ii) is acquiring such
Reset Rate Notes in reliance on an exemption to the Act other than Rule 144A in
accordance with any applicable United States state securities or “Blue Sky”
laws.

 

If the Purchaser proposes that its Reset Rate
Notes be registered in the name of a nominee on its behalf, the Purchaser has
identified such nominee below, and has caused such nominee to complete the
Nominee Acknowledgment at the end of this letter.

 

Name of
Nominee (if any):
                                          

 

A-3-13

 

IN WITNESS WHEREOF, this document has been
executed by the undersigned who is duly authorized to do so on behalf of the
undersigned Qualified Institutional Buyer on the
         day of
                      ,
20    .

 

	
   

  	
  Name of Institution

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  

 

Nominee
Acknowledgment

 

The undersigned hereby acknowledges and
agrees that as to the Reset Rate Notes being registered in its name, the sole
beneficial owner thereof is and shall be the Purchaser identified above, for
whom the undersigned is acting as nominee.

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Duly Authorized

  	
   

  

 

A-3-14

 

ANNEX 2 TO 

APPENDIX A-3

 

FORM OF TRANSFEROR LETTER

 

[Date]

 

The Bank of
New York, as Indenture Trustee 

2 North LaSalle, Suite 1020

Chicago, Illinois, 60602

 

Sallie Mae,
Inc., as Administrator

11600 Sallie Mae Drive

Reston, Virginia 20193

 

	
  Re:

  	
   

  	
  SLM Student
  Loan Trust 2004-1, Student Loan-Backed Class A-6 Reset Rate Notes (the “Reset
  Rate Notes”)

  

 

 

Ladies and
Gentlemen:

 

In connection
with our disposition of the Reset Rate Notes of the above-referenced series
owned by us, we certify that (a) we understand that the Reset Rate Notes have
not been registered under the Securities Act of 1933, as amended (the “Act”),
and are being disposed by us in a transaction that is exempt from the
registration requirements of the Act, and (b) we have not offered or sold any
Reset Rate Notes to, or solicited offers to buy any Reset Rate Notes from, any
person, or otherwise approached or negotiated with any person with respect
thereto, in a manner that would be deemed, or taken any other action would
result in, a violation of Section 5 of the Act.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name of Transferor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
				

 

A-3-15

 

SCHEDULE
A

 

Schedule of Trust Student Loans

 

[See Schedule A to the Bill of
Sale

(Attachment B to the Sale Agreement)]

 

A-1

 

SCHEDULE
B

 

Location of Trust Student Loan
Files

 

[See Attachment B to the
Servicing Agreement]

 

B-1

 

Exhibit
A

 

[Form of Notes]

 

A-1

 

Exhibit
B

 

[Form of Note
Depository Agreement

for U.S.
Dollar Denominated Notes]

 

B-1

 

Exhibit
C

 

[Form of Note
Depository Agreement for

Notes Denominated in a Currency Other than U.S. Dollars]

 

C-1Exhibit 10.1

Employment Agreement

THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and among Von
Hampton, an individual residing at _________________________________ (the
"Employee"); and Hampton & Hampton, P.A., a ___________________ corporation
whose principal place of business is located at
______________________________________ (the "Employer").

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereby exchanged, as well as of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:

                                   Witnesseth:
                                   -----------

                                   ARTICLE ONE
                                   -----------
                       TERM, RENEWALS, EARLIER TERMINATION
                       -----------------------------------
1.1      TERM.
--------------

         Subject to the provisions set forth herein, the term of the Employee's
employment hereunder shall be deemed to have commenced as of February 1, 2004
and shall continue for a period of one year thereafter.

1.2      RENEWALS.
------------------

(a) This Agreement shall be renewed automatically, after expiration of the
original one year term, on a continuing annual basis, unless the Party wishing
not to renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.

(b) In the event that in conjunction with a renewal of this Agreement, a Party
desires a modification of the terms of this Agreement that are not of general
application (e.g., the provisions pertaining to salary, commissions, etc.),
then:

         (1) Such Party shall provide the other with a written notice specifying
the requested modifications (the "Modification Request Notice") on or before the
45th day prior to termination of the then current term which;

         (2) If the modifications specified in the Modifications Request Notice
are accepted in writing by the other Party prior to expiration of the then
current term, the Modifications Request Notice shall be deemed a written
amendment to this Agreement, effective as of the first day of the new renewal
term;

         (3) If the Party receiving the Modifications Request Notice finds the
proposed modifications unacceptable, it may initiate negotiations to reach
compromise modifications with the Party providing the Modifications Request
Notice, which must be concluded and reflected in a written

<PAGE>

amendment to this Agreement prior to the end of the then current term, failing
which, the provisions of Section 1.2(B)(4) will be deemed in effect;

         (4) If the modifications specified in the Modifications Request Notice
are not accepted in writing by the other Party prior to expiration of the then
current term, the Modifications Request Notice shall be deemed a Notice of
Termination and this Agreement will expire effective as of the close of business
on the last day of the then current term.

1.3      EARLIER TERMINATION.
-----------------------------

         EMPLOYER shall have the right to terminate this Agreement prior to the
expiration of its Term or of any renewals thereof:

(a)      For Cause:

         (1)  EMPLOYER may terminate the Employee's employment under this
              Agreement at any time for cause.

         (2)  Such termination shall be evidenced by written notice thereof to
              the Employee, which notice shall specify the cause for
              termination.

         (3)  For purposes hereof, the term "cause" shall mean:

                  (A) The inability of the Employee, through sickness or other
incapacity, to discharge his duties under this Agreement for 30 or more
consecutive days or for Employee to be absent more than 60 days out of 270 days;

                  (B) The failure of the Employee to abide by the directions of
Employer's board of directors or the instructions from the Board of Directors of
Tels Corporation, the parent company of the Employer;

                  (C) Dishonesty; theft; insubordination or conviction of a
crime;

                  (D) Material default in the performance of the Employee's
obligations, services or duties required under this Agreement (other than due to
illness) or material breach of any provision of this Agreement, which default or
breach has not been completely remedied within five days after written notice of
such default or breach.

(b)      Deterioration or Discontinuance of Business:

         (1)      In the event that EMPLOYER discontinues operating its
                  business, this Agreement shall terminate as of the last day of
                  the month on which it ceases operation with the same force and
                  effect as if such last day of the month were originally set as
                  the termination date hereof; provided, however, that a
                  reorganization or merger of EMPLOYER shall not be deemed a
                  termination of its business.

(c)      Death:

         This Agreement shall terminate immediately on the death of the
Employee; however, all accrued compensation at such time shall be promptly paid
to the Employee's estate.

<PAGE>

1.4      SEVERANCE PAYMENTS AND ALTERNATIVES TO TERMINATION
-----------------------------------------------------------

         In the event this Agreement is terminated by EMPLOYER for reasons other
than for cause as described in Section 1.3(a)(3)(b) or (c) above, the Employee
shall be entitled to receive:

         (A) All salaries and reimbursements earned through the date of
termination;

         (B) An amount equal to 90 days of the Employee's then prevailing salary
or the remaining compensation due under this Agreement whichever is less;

         (C) Continued participation in those medical, life and disability
insurance benefits, if any, which are provided to the Employee as of the last
date of employment;

         (D) In the event of a change in control (as defined below), Employee
shall have the option at any time after the date that the change in control
occurs to terminate his employment. Under such a change in control termination,
the Employee will receive from EMPLOYER compensation in the amount equal to 1.5
times the Base Salary, less any Base Salary paid to him from the date of the
change in control to the date of termination. The Employee shall have the option
to receive this change in control payment in (i) equal installments in the same
amount and at the same periodic intervals as if Employee had remained employed
by EMPLOYER or (ii) in a single lump sum payment. A Change in Control shall mean
the occurrence of any event resulting in the current control shareholders
individually or collectively beneficially own less than 50% of the then
outstanding common stock.

1.5      FINAL SETTLEMENT.
--------------------------

         Upon termination of this Agreement the Employee or the Employee's
representative shall execute and deliver to EMPLOYER on a form prepared by
EMPLOYER, a release of all claims except such claims as may have been submitted
pursuant to the terms of this Agreement and which remain unpaid, and, shall
forthwith tender to EMPLOYER all records, manuals and written procedures, as may
be desired by it for the continued conduct of its business.

                                   ARTICLE TWO
                                   -----------
                               SCOPE OF EMPLOYMENT
                               -------------------

2.1      RETENTION.
-------------------

         EMPLOYER hereby hires the Employee and the Employee hereby accepts such
employment, in accordance with the terms, provisions and conditions of this
Agreement.

2.2      GENERAL DESCRIPTION OF DUTIES.
---------------------------------------

         (A) The Employee shall serve as the president of Hampton & Hampton,
P.A.

         (B) The Employee shall oversee all operational issues related to the
ongoing business needs of the Employer. The Employee shall at all times be
accountable to the Board of Directors of both the Employer and Tels. The
Employee is expected to of 40 hours per week and devote his

<PAGE>

full time and attention to the operations of EMPLOYER. However, nothing shall
prohibit the Employee from engaging in charitable and civic activities and
managing his personal passive investments, provided that such passive
investments are not in a company which competes in a business similar to that of
EMPLOYER's business.

         (C) The Employee hereby represents and warrants to EMPLOYER that he is
subject to no legal, self regulatory organization (e.g., National Association of
Securities Dealers, Inc.'s bylaws) or regulatory impediments to the provision of
the services called for by this Agreement, or to receipt of the compensation
called for under this Agreement or any supplements thereto; and, the Employee
hereby irrevocably covenants and agrees to immediately bring to the attention of
EMPLOYER any facts required to make the foregoing representation and warranty
continuingly accurate throughout the term of this Agreement, or any supplements
or extensions thereof.

                  Notwithstanding anything else contained herein to the contrary
nothing contained in this Agreement shall require Employee to accept or be
responsible for employment on a full time basis requiring relocation to any
facility outside of the state of Minnesota.

2.3      EXCLUSIVITY.
---------------------

         (a) Unless specifically authorized by this Agreement or is otherwise
authorized by EMPLOYER's board of directors, on a case-by-case basis, in
writing, all of the Employee's business time shall be devoted exclusively to the
affairs of EMPLOYER.

         (b) Without limiting the generality of the foregoing, the Employee
covenants to perform the employment duties called for hereby in good faith,
devoting substantially all business time, energies and abilities thereto and
will not engage in any other business or commercial activities for any person or
entity without the prior written consent of EMPLOYER.

2.4      LIMITATIONS ON SERVICES
--------------------------------

(a) The Parties recognize that certain responsibilities and obligations are
imposed by federal and state securities laws and by the applicable rules and
regulations of stock exchanges, the National Association of Securities Dealers,
Inc., in-house "due diligence" or "compliance" departments of Licensed
Securities Firms, etc.; accordingly, the Employee agrees that he will not:

         (1) Release any financial or other material information or data about
EMPLOYER without the prior written consent and approval of EMPLOYER's General
Counsel or Securities Counsel;

         (2) Conduct any meetings with financial analysts without informing
EMPLOYER's General Counsel and board of directors in advance of the proposed
meeting and the format or agenda of such meeting.

(b) In any circumstances where the Employee is describing the securities of Tels
Corporation to a third party, the Employee shall disclose to such person any
compensation received from EMPLOYER to the extent required under any applicable
laws, including, without limitation, Section 17(b) of the Securities Act of
1933, as amended.

<PAGE>

(c) In rendering his services, the Employee shall not disclose to any third
party any confidential non-public information furnished by EMPLOYER or otherwise
obtained by it with respect to EMPLOYER, except on a need to know basis, and in
such case, subject to appropriate assurances that such information shall not be
used, directly or indirectly, in any manner that would violate state or federal
prohibitions on insider trading of EMPLOYER's securities or those of TELS.

(d) The Employee shall not take any action which would in any way adversely
affect the reputation, standing or prospects of EMPLOYER or TELS or which would
cause EMPLOYER to be in violation of applicable laws.

                                  ARTICLE THREE
                                  -------------
                                  COMPENSATION
                                  ------------

3.1      COMPENSATION.
----------------------

         As consideration for the Employee's services to EMPLOYER the Employee
shall be entitled to the following compensation:

         The Employee's salary shall be $120,000 per year. The salary shall be
reviewed annually on the anniversary of this contract. In addition to the Base
Salary, the Employee shall be entitled to receive such bonuses as may be
determined by EMPLOYER from time to time during the term of this agreement. The
Salary shall be payable in accordance with the EMPLOYER's customary payroll
practices and procedures and shall be prorated for any partial year during the
Term.

3.2         BENEFITS.
---------------------

         (A) The Employee shall be entitled to any benefits generally made
available to all other employees including without limitation medical,
disability and life insurance plans and programs established by EMPLOYER subject
however to any eligibility requirements and other provisions of such plans. The
Employee shall also be entitled to receive such fringe benefits as may be
generally provided by EMPLOYER from time to time to its employees, in accordance
with the policies of EMPLOYER in office from time to time.

         (B) The Employee shall be entitled to two (2) weeks paid vacation
annually, to be take at such time(s) as shall not, in the reasonable judgment of
EMPLOYER's Board, interfere with the fulfillment of the Employee's duties under
this Agreement. The Employee shall be entitled to as many holidays, sick days
and personal days as are generally provided from time to time to its employees
in accordance with EMPLOYER's policies in effect from time to time.

         (C) The Employer shall pay or reimburse the Employee for all approved
travel, entertainment, and other expenses incurred by him in connection with the
performance of his duties hereunder in accordance with the policies and
procedures established by EMPLOYER.

         (D) The Employee shall be entitled to receive options of Tels
corporation common stock. The options will be issued pursuant to a stock option
plan to be

<PAGE>

established by Tels and the grant and price of the warrants will be subject to
the terms and conditions of the stock option program established by Tels.

3.3      INDEMNIFICATION.
-------------------------

         EMPLOYER will defend, indemnify and hold the Employee harmless from all
liabilities, suits, judgments, fines, penalties or disabilities, including
expenses associated directly, therewith (e.g. legal fees, court costs,
investigative costs, witness fees, etc.) resulting from any reasonable actions
taken by him in good faith on behalf of EMPLOYER, its affiliates or for other
persons or entities at the request of the board of directors of EMPLOYER, to the
fullest extent legally permitted, and in conjunction therewith, shall assure
that all required expenditures are made in a manner making it unnecessary for
the Employee to incur any out of pocket expenses; provided, however, that the
Employee permits the majority stockholders of EMPLOYER to select and supervise
all personnel involved in such defense and that the Employee waive any conflicts
of interest that such personnel may have as a result of also representing
EMPLOYER, its stockholders or other personnel and agrees to hold them harmless
from any matters involving such representation, except such as involve fraud or
bad faith.

                                  ARTICLE FOUR
                                  ------------
                                SPECIAL COVENANTS
                                -----------------

4.1      CONFIDENTIALITY, NON-CIRCUMVENTION AND NON-COMPETITION.
----------------------------------------------------------------

         During the term of this Agreement, all renewals thereof and for a
period of two years after its termination, the Employee hereby irrevocably
agrees to be bound by the following restrictions, which constitute a material
inducement for EMPLOYER's entry into this Agreement:

(a) Because the Employee will be developing for EMPLOYER, making use of,
acquiring and/or adding to, confidential information of special and unique
nature and value relating to such matters as EMPLOYER's trade secrets, systems,
procedures, manuals, confidential reports, personnel resources, strategic and
tactical plans, advisors, clients, investors and funders; as material inducement
to the entry into this Agreement by EMPLOYER, the Employee hereby covenants and
agrees not to personally use, divulge or disclose, for any purpose whatsoever,
directly or indirectly, any of such confidential information during the term of
this Agreement, any renewals thereof, and for a period of two years after its
termination.

(b) The Employee hereby covenants and agrees to be bound as a fiduciary of
EMPLOYER, as if the Employee were a partner in a partnership bound by the
partnership opportunities doctrine, as such concept has been judicially and
legislatively developed in the State of Minnesota, and consequently, without the
prior written consent of EMPLOYER, on a specific, case by case basis, the
Employee shall not, among other things, directly or indirectly:

         (1) Engage in any activities, whether or not for profit, competitive
with EMPLOYER's business.

         (2) Solicit or accept any person providing services to EMPLOYER,
whether as an employee, consultant or independent contractor, for employment or
provision of services.

<PAGE>

         (3) Induce any client or customer of EMPLOYER to cease doing business
with EMPLOYER or to engage in business with any person engaged in business
activities that compete with EMPLOYER's business.

         (4) Divert any business opportunity within the general scope of
EMPLOYER's business and business capacity, to any other person or entity.

4.2      SPECIAL REMEDIES.
--------------------------

         In view of the irreparable harm and damage which would undoubtedly
occur to EMPLOYER as a result of a breach by the Employee of the covenants or
agreements contained in this Article Four, and in view of the lack of an
adequate remedy at law to protect EMPLOYER's interests, the Employee hereby
covenants and agrees that EMPLOYER shall have the following additional rights
and remedies in the event of a breach hereof:

(a) In addition to and not in limitation of any other rights, remedies or
damages available to EMPLOYER, whether at law or in equity, it shall be entitled
to a permanent injunction in order to prevent or to restrain any such breach by
the Employee, or by the Employee's partners, agents, representatives, servants,
employers, employees, affiliates and/or any and all persons directly or
indirectly acting for or with him and the Employee hereby consents to the
issuance of such a permanent injunction; and

(b) Because it is impossible to ascertain or estimate the entire or exact cost,
damage or injury which EMPLOYER may sustain prior to the effective enforcement
of such injunction, the Employee hereby covenants and agrees to pay over to
EMPLOYER, in the event the employee violates the covenants and agreements
contained in Section 4.2 hereof, the greater of:

         (1) Any payment or compensation of any kind received by the Employee or
by persons affiliated with or acting for or with the Employee, because of such
violation before the issuance of such injunction, or

         (2) The sum of Twenty Five  Thousand ($25,000.00) Dollars per
violation, which sum shall be liquidated damages, and not a penalty, for the
injuries suffered by EMPLOYER as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the exclusive remedy
available to EMPLOYER for any breach of the covenants and agreements contained
in this Article Four, prior to the issuance of such injunction, the Parties
recognizing that the only adequate remedy to protect EMPLOYER from the injury
caused by such breaches would be injunctive relief.

4.3      CUMULATIVE REMEDIES.
-----------------------------

         The Employee hereby irrevocably agrees that the remedies described in
Section 4.2 shall be in addition to, and not in limitation of, any of the rights
or remedies to which EMPLOYER is or may be entitled to, whether at law or in
equity, under or pursuant to this Agreement.

4.4      ACKNOWLEDGMENT OF REASONABLENESS.
------------------------------------------

(a) The Employee hereby represents, warrants and acknowledges that having
carefully read and considered the provisions of this Article Four, the
restrictions set forth herein are fair and

<PAGE>

reasonable and are reasonably required for the protection of the interests of
EMPLOYER, its officers, directors and other employees; consequently, in the
event that any of the above-described restrictions shall be held unenforceable
by any court of competent jurisdiction, the Employee hereby covenants, agrees
and directs such court to substitute a reasonable judicially enforceable
limitation in place of any limitation deemed unenforceable and, the Employee
hereby covenants and agrees that if so modified, the covenants contained in this
Article Four shall be as fully enforceable as if they had been set forth herein
directly by the Parties.

(b) In determining the nature of this limitation, the Employee hereby
acknowledges, covenants and agrees that it is the intent of the Parties that a
court adjudicating a dispute arising hereunder recognize that the Parties desire
that these covenants not to circumvent, disclose or compete be imposed and
maintained to the greatest extent possible.

4.5      UNAUTHORIZED ACTS.
---------------------------

         The Employee hereby covenants and agrees not do any act or incur any
obligation on behalf of EMPLOYER except as authorized by its board of directors.

4.6      COVENANT NOT TO DISPARAGE
----------------------------------

         The Employee hereby irrevocably covenants and agrees that during the
term of this Agreement and after its termination, he will refrain from making
any remarks that could be construed by anyone, under any circumstances, as
disparaging, directly or indirectly, specifically, through innuendo or by
inference, whether or not true, about EMPLOYER, its constituent members, or
their officers, directors, stockholders, employees, agent or affiliates, whether
related to the business of EMPLOYER, to other business or financial matters or
to personal matters.

                                  ARTICLE FIVE
                                  ------------
                                  MISCELLANEOUS
                                  -------------

5.1      NOTICES.
-----------------

(a) (1) All notices, demands or other communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been duly given
on the first business day after mailing by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

To the Employee:

--------------------------------------------------------------------------------
VON HAMPTON
--------------------------------------------------------------------------------

HAMPTON & HAMPTON, P.A.             ____________________________

                                    ____________________________

WITH A COPY TO TELS CORPORATION     1750 YANKEE DOODLE ROAD
                                    SUITE 202
                                    EAGAN, MN  55121

<PAGE>

         (2)      Copies of notices will also be provided to such other address
                  or to such other person, as any Party shall designate to the
                  other for such purpose in the manner hereinafter set forth.

5.2      AMENDMENT.
-------------------

(a) No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by the Party against
which the enforcement of said modification, waiver, amendment, discharge or
change is sought.

(b) This Agreement may not be modified without the consent of a majority in
interest of EMPLOYER's Board of Directors.

5.3      MERGER.
----------------

(a) This instrument contains all of the understandings and agreements of the
Parties with respect to the subject matter discussed herein.

(b) All prior agreements whether written or oral, are merged herein and shall be
of no force or effect.

5.4      SURVIVAL.
------------------

         The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.

5.5      SEVERABILITY.
----------------------

         If any provision or any portion of any provision of this Agreement, or
the application of such provision or any portion thereof to any person or
circumstance shall be held invalid or unenforceable, the remaining portions of
such provision and the remaining provisions of this Agreement or the application
of such provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be effected thereby.

5.6      GOVERNING LAW AND VENUE.
---------------------------------

         This Agreement shall be construed in accordance with the laws of the
State of Minnesota.

5.7      LITIGATION.
--------------------

(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing Party
shall be entitled to recover its costs and expenses, including reasonable
attorneys' fees up to and including all negotiations, trials and appeals,
whether or not litigation is initiated.

<PAGE>

(b) In the event of any dispute arising under this Agreement, or the negotiation
thereof or inducements to enter into the Agreement, the dispute shall, at the
request of any Party, be exclusively resolved through the following procedures:

         (1)      (A) First, the issue shall be submitted to mediation before a
mediation service in the county where Tels corporation conducts its primary
business operations.

                  (B) The mediation efforts shall be concluded within ten
business days after their initiation unless the Parties unanimously agree to an
extended mediation period.

         (2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit the dispute
to binding arbitration before an arbitration service located in Dakota County,
Minnesota.

         (3)      (A) Expenses of mediation shall be borne by EMPLOYER, if
successful.

                  (B) Expenses of mediation, if unsuccessful and of arbitration
shall be borne by the Party or Parties against whom the arbitration decision is
rendered.

                  (C) If the terms of the arbitration award does not establish a
prevailing Party, then the expenses of unsuccessful mediation and arbitration
shall be borne equally by the Parties.

5.8      BENEFIT OF AGREEMENT.
------------------------------

(a) This Agreement may not be assigned by the Employer without the prior written
consent of Employee.

(b) Subject to the restrictions on transferability and assignment contained
herein, the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, their successors, assigns, personal
representative, estate, heirs and legatees.

5.9      CAPTIONS.
------------------

         The captions in this Agreement are for convenience and reference only
and in no way define, describe, extend or limit the scope of this Agreement or
the intent of any provisions hereof.

5.10     NUMBER AND GENDER.
---------------------------

         All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.

5.11     FURTHER ASSURANCES.
----------------------------

         The Parties hereby agree to do, execute, acknowledge and deliver or
cause to be done, executed or acknowledged or delivered and to perform all such
acts and deliver all such deeds, assignments, transfers, conveyances, powers of
attorney, assurances, recipes, records and other documents, as may, from time to
time, be required herein to effect the intent and purposes of this Agreement.

<PAGE>

5.12     STATUS.
----------------

         Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, agency, or lessor-lessee relationship; but, rather,
the relationship established hereby is that of employer-employee in EMPLOYER.

5.13     COUNTERPARTS.
----------------------

(a)      This Agreement may be executed in any number of counterparts.

(b)      Execution by exchange of facsimile transmission shall be deemed legally
         sufficient to bind the signatory; however, the Parties shall, for
         aesthetic purposes, prepare a fully executed original version of this
         Agreement, which shall be the document filed with the Securities and
         Exchange Commission.

In Witness Whereof, the Parties have executed this Agreement, effective as of
the last date set forth below.

Signed, Sealed & Delivered
        In Our Presence

THE EMPLOYEE

/s/ Von Hampton
-----------------
Von Hampton
Dated:     January 29, 2004

HAMPTON & HAMPTON, P.A.

/s/ Von Hampton
-----------------
BY:  Von Hampton
ITS    President
(CORPORATE SEAL)
                                                   Attest:  _________________

Dated:   January 29, 2004

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