Document:

Exhibit 4.2

 

 

INDENTURE

 

 

between

 

 

SLM PRIVATE CREDIT STUDENT LOAN TRUST 2005-A,

as Issuer

 

 

and

 

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

not in
its individual capacity but

solely as Indenture Trustee

 

 

Dated as of April 1, 2005

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
   

  	
   

  
	
  DEFINITIONS AND USAGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions and Usage

  	
   

  	
   

  
	
  Section 1.02.

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
  THE
  NOTES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Form

  	
   

  	
   

  
	
  Section 2.02.

  	
  Execution, Authentication and Delivery

  	
   

  	
   

  
	
  Section 2.03.

  	
  Temporary Notes

  	
   

  	
   

  
	
  Section 2.04.

  	
  Registration; Registration of Transfer and
  Exchange

  	
   

  	
   

  
	
  Section 2.05.

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
   

  	
   

  
	
  Section 2.06.

  	
  Persons Deemed Owner

  	
   

  	
   

  
	
  Section 2.07.

  	
  Payment of Principal and Interest; Note
  Interest Shortfall

  	
   

  	
   

  
	
  Section 2.08.

  	
  Cancellation

  	
   

  	
   

  
	
  Section 2.09.

  	
  Release of Collateral

  	
   

  	
   

  
	
  Section 2.10.

  	
  Book-Entry Notes

  	
   

  	
   

  
	
  Section 2.11.

  	
  Notices to Clearing Agency

  	
   

  	
   

  
	
  Section 2.12.

  	
  Definitive Notes

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Payment to Noteholders

  	
   

  	
   

  
	
  Section 3.02.

  	
  Maintenance of Office or Agency

  	
   

  	
   

  
	
  Section 3.03.

  	
  Money for Payments To Be Held in Trust

  	
   

  	
   

  
	
  Section 3.04.

  	
  Existence

  	
   

  	
   

  
	
  Section 3.05.

  	
  Protection of Indenture Trust Estate

  	
   

  	
   

  
	
  Section 3.06.

  	
  Opinions as to Indenture Trust Estate

  	
   

  	
   

  
	
  Section 3.07.

  	
  Performance of Obligations; Servicing of
  Trust Student Loans

  	
   

  	
   

  
	
  Section 3.08.

  	
  Negative Covenants

  	
   

  	
   

  
	
  Section 3.09.

  	
  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

  	
   

  	
   

  
	
  Section 3.17.

  	
  Restricted Payments

  	
   

  	
   

  
	
  Section 3.18.

  	
  Notice of Events of Default

  	
   

  	
   

  
	
  Section 3.19.

  	
  Further Instruments and Acts

  	
   

  	
   

  

 

i

 

	
  ARTICLE IV

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Satisfaction and Discharge of Indenture

  	
   

  	
   

  
	
  Section 4.02.

  	
  Application of Trust Money

  	
   

  	
   

  
	
  Section 4.03.

  	
  Repayment of Moneys Held by Paying Agent

  	
   

  	
   

  
	
  Section 4.04.

  	
  Auction of Trust Student Loans

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  
	
  REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Events of Default

  	
   

  	
   

  
	
  Section 5.02.

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
   

  	
   

  
	
  Section 5.03.

  	
  Collection of Indebtedness and Suits for
  Enforcement by Indenture Trustee

  	
   

  	
   

  
	
  Section 5.04.

  	
  Remedies; Priorities

  	
   

  	
   

  
	
  Section 5.05.

  	
  Optional
  Preservation of the Trust Student Loans

  	
   

  	
   

  
	
  Section 5.06.

  	
  Limitation of Suits

  	
   

  	
   

  
	
  Section 5.07.

  	
  Unconditional Rights of Noteholders To Receive Principal and Interest

  	
   

  	
   

  
	
  Section 5.08.

  	
  Restoration of Rights and Remedies

  	
   

  	
   

  
	
  Section 5.09.

  	
  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 6.01.

  	
  Duties of Indenture Trustee

  	
   

  	
   

  
	
  Section 6.02.

  	
  Rights of Indenture Trustee

  	
   

  	
   

  
	
  Section 6.03.

  	
  Individual Rights of Indenture Trustee

  	
   

  	
   

  
	
  Section 6.04.

  	
  Indenture Trustee’s Disclaimer

  	
   

  	
   

  
	
  Section 6.05.

  	
  Notice of Defaults

  	
   

  	
   

  
	
  Section 6.06.

  	
  Reports by Indenture Trustee to Noteholders

  	
   

  	
   

  
	
  Section 6.07.

  	
  Compensation and Indemnity

  	
   

  	
   

  
	
  Section 6.08.

  	
  Replacement of Indenture Trustee

  	
   

  	
   

  
	
  Section 6.09.

  	
  Successor Indenture Trustee by Merger

  	
   

  	
   

  
	
  Section 6.10.

  	
  Appointment of Co-Trustee or Separate Trustee

  	
   

  	
   

  
	
  Section 6.11.

  	
  Eligibility; Disqualification

  	
   

  	
   

  
	
  Section 6.12.

  	
  Preferential Collection of Claims Against Issuer

  	
   

  	
   

  

 

ii

 

	
  ARTICLE VII

  	
   

  	
   

  
	
  NOTEHOLDERS’ LISTS AND
  REPORTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Issuer to Furnish Indenture Trustee Names and Addresses of
  Noteholders

  	
   

  	
   

  
	
  Section 7.02.

  	
  Preservation of Information; Communications to Noteholders

  	
   

  	
   

  
	
  Section 7.03.

  	
  Reports by Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  
	
  ACCOUNTS,
  DISBURSEMENTS AND RELEASES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Collection of Money

  	
   

  	
   

  
	
  Section 8.02.

  	
  Trust Accounts

  	
   

  	
   

  
	
  Section 8.03.

  	
  General Provisions Regarding Accounts

  	
   

  	
   

  
	
  Section 8.04.

  	
  Release of Indenture Trust Estate

  	
   

  	
   

  
	
  Section 8.05.

  	
  Opinion of Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Supplemental Indentures Without Consent of Noteholders

  	
   

  	
   

  
	
  Section 9.02.

  	
  Supplemental Indentures With Consent of Noteholders

  	
   

  	
   

  
	
  Section 9.03.

  	
  Execution of Supplemental Indentures

  	
   

  	
   

  
	
  Section 9.04.

  	
  Effect of Supplemental Indenture

  	
   

  	
   

  
	
  Section 9.05.

  	
  Conformity with Trust Indenture Act

  	
   

  	
   

  
	
  Section 9.06.

  	
  Reference in Notes to Supplemental Indentures

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
   

  
	
  REDEMPTION OF NOTES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Redemption

  	
   

  	
   

  
	
  Section 10.02.

  	
  Form of Redemption Notice

  	
   

  	
   

  
	
  Section 10.03.

  	
  Notes Payable on Redemption Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Compliance Certificates and Opinions, etc

  	
   

  	
   

  
	
  Section 11.02.

  	
  Form of Documents Delivered to Indenture Trustee

  	
   

  	
   

  
	
  Section 11.03.

  	
  Acts of Noteholders

  	
   

  	
   

  
	
  Section 11.04.

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

  	
   

  	
   

  
	
  Section 11.05.

  	
  Notices to Noteholders; Waiver

  	
   

  	
   

  
	
  Section 11.06.

  	
  Alternate Payment and Notice Provisions

  	
   

  	
   

  
	
  Section 11.07.

  	
  Conflict with Trust Indenture Act

  	
   

  	
   

  
	
  Section 11.08.

  	
  Effect of Headings and Table of Contents

  	
   

  	
   

  
	
  Section 11.09.

  	
  Successors and Assigns

  	
   

  	
   

  
	
  Section 11.10.

  	
  Separability

  	
   

  	
   

  
	
  Section 11.11.

  	
  Benefits of Indenture

  	
   

  	
   

  

 

iii

 

	
  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

  	
   

  	
   

  

 

	
  APPENDICES,
  SCHEDULES AND EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  APPENDIX A-1

  	
  Definitions
  and Usage

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
   

  

 

iv

 

INDENTURE

 

This
INDENTURE, dated as of April 1, 2005, is between SLM PRIVATE CREDIT
STUDENT LOAN TRUST 2005-A, a Delaware statutory trust (the “Issuer”), and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association, as
trustee and 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”):

 

GRANTING CLAUSE

 

The
Issuer hereby Grants to the Indenture Trustee, as trustee for the benefit of
the Noteholders, 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;

 

(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
Depositor 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 Seller Sale Agreements;

 

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

 

(e)                                  the
Administration Agreement;

 

(f)                                    the
Swap Agreements;

 

(g)                                 the
Trust Accounts and all funds on deposit from time to time in the Trust
Accounts, including the Collection Account Initial Deposit, the Reserve Account
Initial Deposit and the Cash Capitalization Account Initial Deposit, and all
investments and proceeds thereof (including all income thereon); and

 

(h)                                 all
present and future claims, demands, causes and choices 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, and to secure compliance with
the provisions of this Indenture, all as provided in this Indenture.

 

The
Indenture Trustee, as Indenture Trustee on behalf of the Noteholders,
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 may be adequately and effectively protected.

 

ARTICLE I

 

DEFINITIONS AND USAGE

 

Section 1.01.                             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 hereto,
which also contains rules as to usage that shall be applicable herein.

 

Section 1.02.                             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.

 

“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.

 

2

 

ARTICLE II

 

THE NOTES

 

Section 2.01.                             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.

 

Each
Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibit A
are part of the terms of this Indenture.

 

Section 2.02.                             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 $1,650,794,000, of which $451,000,000
shall be denominated Class A-1 Notes, $464,000,000 shall be
denominated Class A-2 Notes, $370,000,000 shall be denominated Class A-3
Notes, $237,215,000 shall be denominated Class A-4 Notes,  $53,920,000 shall be denominated Class B
Notes and $74,659,000 shall be denominated Class C Notes.

 

Each
Note shall be dated the date of its authentication.  The Notes shall be issuable as registered
Notes in multiple denominations of $1,000.

 

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 2.03.                             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

 

3

 

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 3.02,
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 2.04.                             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.

 

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 3.02, 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.

 

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.

 

4

 

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 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 2.03 or 9.06 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.

 

Any
transfer or assignment of any Note or any interest in any Note that is not
effected pursuant to the provisions of this Indenture, such as a transfer or
assignment not reflected on the Note Register, shall be null and void and shall
not be taken into account by, or be binding upon, the Indenture Trustee or any
other party.

 

Section 2.05.                             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

 

5

 

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 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 2.06.                             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 2.07.                             Payment
of Principal and Interest; Note Interest Shortfall.  (a)  The Notes shall accrue interest as
provided in the forms of Notes set forth in Exhibit and such interest
shall be payable on each applicable Distribution Date as specified therein,
subject to Section 3.01.  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 Clearing Agency
(initially, such nominee to be Cede & Co.), 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 3.03.

 

(b)                                 The
principal amount of each class of Notes shall be payable in installments on
each Distribution Date as provided in the forms of such note set forth in Exhibit A.  Notwithstanding the foregoing, the entire
unpaid principal amount of each class of the Notes

 

6

 

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
Controlling Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.02. 
All principal payments on the Notes shall be made pro rata to the 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 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 10.02.

 

(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 2.08.                             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 2.09.                             Release
of Collateral.  Subject to Section 11.01
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 Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer.  Such Notes shall initially be registered on
the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner shall receive a Definitive Note (as
defined below) representing such Note Owner’s interest in such Note, except as
provided in Section 2.12.  Unless
and until definitive, fully registered Notes (the “Definitive Notes”) have been
issued to Note Owners pursuant to Section 2.12:

 

7

 

(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 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;

 

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

 

(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 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 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, a Benefit 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 Benefit Plan subject to Title I 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 Benefit Plan subject to a substantially similar federal, state, local
or foreign 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 to the Noteholders is required under this
Indenture, 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 communication specified herein to be given to Noteholders to the
Clearing Agency.

 

Section 2.12.                             Definitive
Notes.  If (i) the Administrator
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to discharge its responsibilities with respect to the Notes,
and the Administrator is unable to locate a successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii) after
the occurrence of an Event of Default, a

 

8

 

Servicer Default
or an Administrator Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Notes advise
the Clearing Agency (which shall then notify the Indenture Trustee) in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Note Owners, then the Indenture Trustee
shall cause the Clearing Agency to notify all Note Owners, through the 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 the 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 the Clearing Agency. 
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 Benefit 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 Benefit Plan subject to Title I 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 Benefit 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.

 

ARTICLE III

 

COVENANTS

 

Section 3.01.                             Payment
to Noteholders.  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.  Without limiting the foregoing, the Issuer
shall cause to be distributed to Noteholders, in accordance with the
Administration Agreement, that portion of the amounts on deposit in the Trust
Accounts on a Distribution Date (other than any Eligible Investments deposited
therein that will mature on the Business Day preceding a subsequent
Distribution Date) which the Noteholders are entitled to receive pursuant to
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.

 

Section 3.02.                             Maintenance
of Office or Agency.  The Issuer
shall maintain in the Borough of Manhattan, The City of New York and in
Luxembourg, so long as any of the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, or in such other
jurisdiction if any of the Notes are listed on another stock exchange of
international standing and the rules of such other exchange so require, an
office or agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or

 

9

 

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 3.03.                             Money
for Payments To Be Held in Trust.  As
provided in Sections 8.02(a) and (b), all payments of amounts due and
payable with respect to any Notes that are to be made from amounts distributed
from the Collection Account or any other Trust Account pursuant to Sections
2.07 and 2.08 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 of Notes 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, 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 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;

 

(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 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

 

10

 

(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, so long as any of the Notes are listed on the
Luxembourg Stock Exchange and the rules of such stock exchange so require,
or in such other jurisdiction if any of the Notes are listed on another stock
exchange of international standing and the rules of such other exchange so
require, 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 3.04.                             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.

 

11

 

Section 3.05.                             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 and the Noteholders 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 3.06.                             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 2005, 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 3.07.                             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

 

12

 

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 5.01 of the
Servicing Agreement, or to the Administrator of the Administrator’s rights and powers,
pursuant to Section 5.01 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.  Upon delivery of any such notice to the
Issuer, the Issuer shall obtain a new servicer as the Successor Servicer under
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

 

13

 

Administrator,
other than the Indenture Trustee, shall (i) be an established institution
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 5.02 of the Servicing Agreement and Section 5.02
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 observance by the Servicer, the Administrator, the Depositor, SLM Education
Credit Finance Corporation or the Issuer 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

 

14

 

timing of,
distributions that are required to be made for the benefit of the Noteholders,
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 3.08.                             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 Swap Agreements to cure any ambiguity in, or to
correct or supplement any provision of the Swap Agreements, so long as 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
Indenture Trustee has provided reasonable notice to the Rating Agencies of such
amendment and each Rating Agency has provided written confirmation that the
then current rating of the Notes will not be lowered or withdrawn.

 

Section 3.09.                             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

 

15

 

the Issuer (commencing
with the fiscal year ending December 31, 2005), 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;

 

(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).

 

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

 

16

 

(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, (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 Private Credit Student Loan Trust 2005-A
will be released from every covenant and agreement of this Indenture to be
observed or performed on the part of

 

17

 

the Issuer with
respect to the Notes immediately upon the delivery by the Issuer of written
notice to the Indenture Trustee stating that SLM Private Credit Student Loan
Trust 2005-A is to be so released.

 

Section 3.12.                             No
Other Business.  The Issuer shall not
engage in any business other than financing, 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 3.01, 3.02 and 3.03 of
the Administration Agreement and Section 3.07 of the Servicing Agreement
and the Administrator to comply with Sections 2.09, 3.01, 3.02 and 3.03 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 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 Trustee, the
Indenture Trustee, the Noteholders, the Administrator, the Depositor and the
Excess Distribution Certificateholder 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 or
any other Trust Account except in accordance with this Indenture and the other
Basic Documents.

 

Section 3.18.                             Notice
of Events of Default.  The Issuer
shall give the Indenture Trustee and the Rating Agencies prompt written notice
of each Event of Default hereunder and each default on the part of the
Depositor of its obligations under the Depositor Sale Agreement, SLM Education
Credit Finance Corporation of its obligations under the Seller Sale Agreements,
the

 

18

 

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 and each
Rating Agency, 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 5.01(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 4.01.                             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
3.03, 3.04, 3.05, 3.08, 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 6.07 and the
obligations of the Indenture Trustee under Section 4.02) 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 (A) Notes that
have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.05 and (B) 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 3.03) have been delivered to the Indenture Trustee for
cancellation; or

 

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

 

(A)                              have
become due and payable,

 

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

 

(C)                                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

 

19

 

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 11.01(a) and,
subject to Section 11.02, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.

 

Section 4.02.                             Application of Trust
Money.  All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 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 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 4.03.                             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 3.03 and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.

 

Section 4.04.                             Auction of Trust
Student Loans.  Any Trust Student
Loans remaining in the Trust as of the end of the Collection Period immediately
preceding the earliest Distribution Date on which 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 6.01(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 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 4.04.  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
SLM Education

 

20

 

Credit Finance
Corporation and the Depositor, 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 (plus any amounts
owed to the Servicer as Carryover Servicing Fees) 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 (plus any amounts owed to the Servicer as Carryover Servicing
Fees) 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 underwriter 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 5.04(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 6.01(a) of the Administration Agreement with
respect to each such future Distribution Date.

 

ARTICLE V

 

REMEDIES

 

Section 5.01.                             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):

 

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

 

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

 

(c)                                  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

 

21

 

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
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 Controlling 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;

 

(d)                                 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

 

(e)                                  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 5.02.                             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 of Notes representing not
less than a majority of the Outstanding Amount of the Controlling 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 5.04 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 not less than a majority of the Outstanding
Amount of the Controlling Notes, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:

 

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

 

(i)                                     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

 

22

 

(ii)                                  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

 

(b)                                 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 5.03.                             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 Controlling 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 2.07
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 5.04, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, 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 the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture

 

23

 

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 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 and of 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 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 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, 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.

 

(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 

 

24

 

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.

 

(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 it shall not be necessary to make any
Noteholder a party to any such Proceedings.

 

Section 5.04.                             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 5.05):

 

(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 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 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 5.01(a) or (b), unless (A) the Noteholders of 100% of
the Outstanding Amount of the Controlling Notes consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Noteholders of the
Controlling Notes are sufficient to discharge in full all amounts then due and
unpaid upon such 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
Controlling Notes as they would have become due if the Controlling 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 5.01(a) or
(b) 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 C Noteholders are sufficient to pay to the Class B
Noteholders and the Class C Noteholders their respective Outstanding
Amount plus accrued and unpaid

 

25

 

interest thereon or (E) if 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 C
Noteholders would not be sufficient to pay to the Class B Noteholders and
the Class C Noteholders the outstanding principal plus accrued and unpaid
interest thereon, the Class B Noteholders and the Class C Noteholders
of at least a majority of the Outstanding Amount of the Class B Notes and
the Class C 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 8.02, following the occurrence and during the
continuation of an Event of Default specified in Section 5.01(a), 5.01(b),
5.01(d) or 5.01(e) which has resulted in an acceleration of the Notes
(or following the occurrence of any such event after an Event of Default
specified in Section 5.01(c) has occurred and the Trust has been
liquidated), if the Indenture Trustee collects any money or property, it shall
pay out the money or property (and other amounts including amounts held on
deposit in the Reserve Account and the Cash Capitalization Account) 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:

 

(i)                                     to
the Indenture Trustee for amounts due under Section 6.07;

 

(ii)                                  to
the Servicer for any due and unpaid Primary Servicing Fees;

 

(iii)                               to
the Administrator, any due and unpaid Administration Fees;

 

(iv)                              to
the Swap Counterparties, any Swap Payments payable to the Swap Counterparties
under the related Swap Agreement for such Distribution Date;

 

(v)                                 pro
rata, based on the Class Note Balance and the amount of any Swap
Termination Payments due and payable by the Issuer to the Swap Counterparties
under this clause (v);

 

(A)                              to
the Class A Noteholders, for amounts due and unpaid on the Class A
Notes for interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class A Notes for such
interest; and

 

(B)                                to
the Swap Counterparties, the amount of any Swap Termination Payments, if any,
due to the Swap Counterparties under the related Swap Agreement due to a
Termination Event resulting from a payment default by the Issuer or the
insolvency of the Issuer; provided, that if any amounts allocable to the
Class A Notes are not needed to pay Class A Noteholders’ Interest
Distribution Amount as of such Distribution Date, such amounts will be applied
to pay the portion, if any, of any Swap Termination Payments remaining unpaid;

 

26

 

(vi)                              (A) 
so long as any Swap Agreement is in effect, to the Class A Noteholders,
ratably, an amount sufficient to reduce their respective Class A Note
Balance to zero; and

 

(B)  if
no Swap Agreement is in effect, pro rata (1) to the Class A
Noteholders, ratably, an amount sufficient to reduce the respective principal
balances of the Class A Notes to zero and (2) to the Swap
Counterpartes under the Swap Agreements, the amount (to the extent not paid
under clause (v) above) of any Swap Termination Payments due to the Swap
Counterparties due to a Termination Event resulting from a “Cross Default”
under 5(a)(vi) of the Swap Agreements by the Issuer.  For the avoidance of doubt, any Swap
Termination Payments due to the Swap Counterparties resulting from such a “Cross-Default”
that is a result of the bankruptcy or insolvency of the Trust shall be payable
under clause (v) above;

 

(vii)                           to the Class B Noteholders for amounts due and unpaid
on the Class B Notes for interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class B Notes
for such interest;

 

(viii)                        to Class B
Noteholders, an amount sufficient to reduce the Class B Note Balance to
zero;

 

(ix)                                to the Class C Noteholders, for amounts due and unpaid
on the Class C Notes for interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class C Notes
for such interest;

 

(x)                                   to
the Class C Noteholders, an amount sufficient to reduce the Class C
Note Balance to zero;

 

(xi)                                to
the Servicer, for any unpaid Carryover Servicing Fees;

 

(xii)                             to
the Swap Counterparties, the amount of any Swap Termination Payments due and
payable by the Issuer to the Swap Counterparties under the Swap Agreements and
not payable in clause (v) or (vi) above; and

 

(xiii)                          to the Certificateholders, any remaining funds.

 

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 5.05.                             Optional Preservation of the Trust Student Loans.  If the Notes have been declared to be due and
payable under Section 5.02 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.

 

27

 

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 5.06.                             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:

 

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

 

(b)                                 the
Noteholders of not less than 25% of the Outstanding Amount of the Controlling
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;

 

(c)                                  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;

 

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

 

(e)                                  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 Controlling 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 5.07.                             Unconditional Rights of
Noteholders To Receive Principal and Interest.  Notwithstanding any other provisions in this
Indenture, any Noteholder shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such 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 5.08.                             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

 

28

 

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 5.09.                             Rights
and Remedies Cumulative.  No
right or remedy herein conferred upon or reserved to the Indenture Trustee 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.

 

Section 5.10.                             Delay
or Omission Not a Waiver.  No
delay or omission of the Indenture Trustee 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 or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee 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 Controlling 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

 

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

 

(b)                                 subject to the express terms of Section 5.04, 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 Controlling Notes;

 

(c)                                  if
the conditions set forth in Section 5.05 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 Controlling Notes to sell or
liquidate the Indenture Trust Estate shall be of no force and effect; and

 

(d)                                 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 6.01, 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 5.02, the Noteholders of not

 

29

 

less than a
majority of the Outstanding Amount of the Controlling 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, 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 5.04(b).

 

30

 

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, SLM Education Credit Finance Corporation, the
Administrator and the Servicer, as applicable, of each of their respective
obligations to the Issuer, whether directly or by assignment, under or in
connection with a Basic Document, 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 a Basic Document, 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,
SLM Education Credit Finance Corporation, the Administrator or the Servicer
thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Depositor, SLM Education
Credit Finance Corporation, the Administrator or the Servicer of each of their
obligations under a Basic Document, 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
Controlling Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Depositor,
SLM Education Credit Finance Corporation, the Administrator or the Servicer
under or in connection with a Basic Document, respectively, including the right
or power to take any action to compel or secure performance or observance by
the Depositor, SLM Education Credit Finance Corporation, 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 a Basic Document, respectively, and any
right of the Issuer to take such action shall be suspended.

 

ARTICLE VI

 

THE INDENTURE TRUSTEE

 

Section 6.01.                             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 its exercise as a prudent person would exercise or
use under the circumstances in the conduct of 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

 

31

 

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 clause (c) does not limit the effect of clause (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

 

(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
of the Noteholders received by it pursuant to this Indenture.

 

(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.

 

(j)                                     The
rights and protections of the Indenture Trustee under Sections 6.01 and 6.02 shall
apply to each of the Basic Documents as though explicitly incorporated therein.

 

32

 

Section 6.02.                             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 may
conclusively rely on any such Opinion of Counsel or Officers’ Certificate and
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, 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 6.03.                             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 6.04.                             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 6.05.                             Notice
of Defaults.  If a Default or
a Servicer Default occurs and is continuing and if it is either actually known
to a Responsible Officer 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 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

 

33

 

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.  Except as provided in the first sentence of
this Section 6.05, in no event shall the Indenture Trustee be deemed to
have knowledge of a Default, a Servicer Default or an Event of Default.

 

Section 6.06.                             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.

 

Section 6.07.                             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
including the reasonable expenses and disbursements of its counsel 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 losses, claims, actions, suits,
damages, liabilities, costs, penalties, taxes (excluding taxes payable by it on
any compensation received by it for its services as Indenture Trustee) or
expenses (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 or the earlier resignation and removal
of the Indenture Trustee.  When the
Indenture Trustee incurs expenses after the occurrence of a Default specified
in Section 5.01(d) or (e) with respect to the Issuer, the expenses
are intended to constitute

 

34

 

expenses of administration under
Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or similar law.

 

Section 6.08.                             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 6.08.
The Indenture Trustee may resign at any time by so notifying the Issuer.  The Noteholders of at least a majority in
Outstanding Amount of the Controlling 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.

 

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 Controlling 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 6.07 shall continue for
the benefit of the retiring Indenture Trustee.

 

Section 6.09.                             Successor
Indenture Trustee by Merger. 
If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust

 

35

 

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.

 

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.

 

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 6.08
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

 

36

 

(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 any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all 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.  (a) 
The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a).  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.

 

(b)                                 Within
ninety (90) days after ascertaining the occurrence of an Event of Default which
shall not have been cured or waived, unless authorized by the TIA or the
Commission, the Indenture Trustee shall resign with respect to the Class A
Notes, the Class B Notes and/or the Class C Notes in accordance with Section 6.08
of this Indenture, and the Issuer shall appoint a successor Indenture Trustee
for two or all of such Classes, as applicable, so that there will be separate
Indenture Trustees for the Class A Notes, the Class B Notes and the Class C
Notes.  In the event the Indenture
Trustee fails to comply with the terms of the preceding sentence, the Indenture
Trustee shall comply with clauses (ii) and (iii) of TIA § 310(b).

 

(c)                                  In
the case of the appointment hereunder of a successor Indenture Trustee with
respect to any Class of Notes pursuant to this Section 6.11, the
Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with
respect to such Class of Notes shall execute and deliver an indenture
supplemental hereto wherein each successor Indenture Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, the
successor Indenture Trustee all the rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Notes of the Class

 

37

 

to which the
appointment of such successor Indenture Trustee relates, (ii) if the
retiring Indenture Trustee is not retiring with respect to all Classes of
Notes, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of each Class as to which the
retiring Indenture Trustee is not retiring shall continue to be vested in the
Indenture Trustee and (iii) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Indenture Trustee, it
being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee shall be a trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Indenture Trustee; and upon the removal of the retiring Indenture Trustee
shall become effective to the extent provided herein.

 

Section 6.12.                             Preferential Collection
of Claims Against 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 7.01.                             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 7.02.                             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 7.01 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 7.01 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 the current list of Noteholders (whether or not made pursuant to TIA § 312(b)),
the Indenture

 

38

 

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 2.09 of the Administration Agreement.  The Indenture Trustee shall make such
information available on its website at http://www.jpmorgan.com/absmbs.  In connection with any electronic
transmissions of information, including without limitation, the use of
electronic mail or internet or intranet web sites, the systems used in such
transmissions are not fully tested by the Indenture Trustee and may not be
completely reliable as to stability, robustness and accuracy.  Accordingly, the parties hereto acknowledge
and agree that information electronically transmitted as described herein may
not be relied upon as timely, accurate or complete and that the Indenture
Trustee shall have no liability hereunder in connection with such information
transmitted electronically.  The parties
hereto further acknowledge that any systems, software or hardware utilized in
posting or retrieving any such information is utilized on an “as is” basis
without representation or warranty as to the intended uses of such systems,
software or hardware.  The Indenture
Trustee makes no representation or warranty that the systems and the related
software used in connection with the electronic transmission of information are
free and clear of threats known as software and hardware viruses, time bombs,
logic bombs, Trojan horses, worms, or other malicious computer instructions,
intentional devices or techniques which may cause a component or system to
become erased, damaged, inoperable, or otherwise incapable of being used in the
manner to which it is intended, or which would permit unauthorized access
thereto.  In the event such web site is
not available, the Indenture Trustee shall use reasonable efforts to distribute
such information in a timely manner to the intended recipients.

 

(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 Trustee notice of any
amendment of the Administration Agreement pursuant to Section 8.05 of the
Administration Agreement.

 

Section 7.03.                             Reports
by Issuer.  (a)  The
Issuer shall:

 

(i)                                     supply
to 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)                                  supply
to the Indenture Trustee and file with the Commission in accordance with rules and
regulations prescribed from time to time by the Commission

 

39

 

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 7.03(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.

 

ARTICLE VIII

 

ACCOUNTS,
DISBURSEMENTS AND RELEASES

 

Section 8.01.                             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 or the Trust
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 8.02.                             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 the
Certificateholders, the Trust Accounts as provided in Section 2.03 of the
Administration Agreement.

 

(b)                                 On
or before the Business Day 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 2.04 of the Administration
Agreement.  On or before each
Distribution Date, the Indenture Trustee (or any other Paying Agent) shall make
the deposits and distributions as provided in Sections 2.07, 2.08(a), (b) and
(c) of the Administration Agreement (except as otherwise provided in Section 5.02
or Section 5.04(b)).

 

Section 8.03.                             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 2.03(b) of the Administration
Agreement.  All income or

 

40

 

other
gain from investments of moneys deposited in the Trust Accounts 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.  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.

 

(b)                                 Subject
to Section 6.01(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.  The Indenture Trustee shall have no liability
in respect of losses incurred as a result of the liquidation of any investment
prior to its stated maturity or the failure of the Issuer to provide timely
written investment direction.

 

(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 5.02, 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 5.05 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 8.04.                             Release
of Indenture Trust Estate.  (a) 
Subject to the payment of its fees and expenses pursuant to Section 6.07,
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 6.07 have been paid,
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 8.04(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 11.01.

 

41

 

(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 Article VI
of the Depositor Sale Agreement, (ii) the Sellers in accordance with Article VI
of the Seller Sale Agreements and (iii) the Servicer in accordance with Section 3.05
of the Servicing Agreement and each Noteholder, by the acceptance of a Note,
consents to any such release.

 

Section 8.05.                             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 8.04(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, except in
connection with any action contemplated by Section 8.04(c), as a condition
to such 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 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 9.01.                             Supplemental Indentures
Without Consent of Noteholders.  (a)  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, 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;

 

42

 

(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;

 

(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

 

(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 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 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.

 

Section 9.02.                             Supplemental Indentures
With Consent of Noteholders.  The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, also may, with prior notice to 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, 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

 

43

 

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;

 

(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 5.04;

 

(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 9.03.                             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 6.01 and 6.02, shall be fully protected in
relying upon,

 

44

 

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 9.04.                             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 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 9.05.                             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 9.06.                             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 10.01.                       Redemption. 
The Indenture Trustee shall, upon receipt of written notice from the
Servicer pursuant to Section 6.01 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 6.01 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 up to the Outstanding Amount
of the Notes and all accrued and unpaid interest thereon.  If amounts are to be paid to Noteholders
pursuant to this Section 10.01, 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 10.02.                       Form of Redemption Notice.  Notice of redemption under Section 10.01
shall be given by the Indenture Trustee by first-class mail, postage prepaid,
or by facsimile,

 

45

 

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

 

(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 3.02).

 

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 10.03.                       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 11.01.                       Compliance Certificates and Opinions, etc.  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.

 

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

 

46

 

(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.

 

(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 11.01(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

 

47

 

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 2.09 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 8.04(c) hereof and Section 6.01 of the Depositor
Sale Agreement, Section 3.05 of the Servicing Agreement or Section 3.11(d) of
the Servicing Agreement, respectively, so long as the Issuer shall deliver to
the Indenture Trustee every six months, commencing December 31, 2005, 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 11.02.                       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.

 

48

 

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 11.03.                       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 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 6.01)
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 the Noteholder of any Notes 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 11.04.                       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, or

 

49

 

(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 Private Credit Student Loan Trust 2005-A,
in care of the Trustee, Christiana Center/OPS4, 500 Stanton Christiana Road,
Newark, Delaware 19713, Attention:  Corporate
Trust Department; with copies to JPMorgan Chase Bank, National Association, 4
New York Plaza, New York, New York 10004, Attention:  Structured Finance Services; SLM Private
Credit Student Loan Trust 2005-A, 12061 Bluemont Way, V3419, Reston,
Virginia 20190, Attention: Director, Corporate Finance Operations, 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 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 Standard & Poor’s, at
the following address: 55 Water Street, New York, New York 10041-0003,
Attention: 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.

 

Section 11.05.                       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.

 

50

 

Section 11.06.                       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 11.07.                       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.

 

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 11.08.                       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 11.09.                       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.  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.

 

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.

 

51

 

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 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 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 Trustee in its individual capacity, any holder or owner of a beneficial
interest in the Issuer, the 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 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 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 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

 

52

 

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.

 

53

 

IN
WITNESS WHEREOF, the Issuer 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 PRIVATE CREDIT STUDENT LOAN

  TRUST 2005-A

  
	
   

  	
   

  
	
   

  	
  By: CHASE BANK USA, NATIONAL

  ASSOCIATION, not in its individual capacity but

  solely as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ JOHN J.
  CASHIN

  	
   

  
	
   

  	
  Name:

  	
   

  	
  John J. Cashin

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE
  BANK, NATIONAL

  ASSOCIATION, not in its individual capacity but

  solely as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ DANIEL C
  BROWN JR.

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Daniel C. Brown
  Jr.

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  
						

 

54

APPENDIX A-1

 

DEFINITIONS AND USAGE

2005-A

 

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

 

Definitions

 

“Accrual
Period” means, with respect to a Distribution Date for a class of Floating
Rate Notes, the period from and including the immediately preceding
Distribution Date for such class of Floating Rate Notes, or in the case of the
initial such period, the Closing Date, to but excluding such current
Distribution Date.

 

“Act” has the meaning specified in Section 11.03(a) of
the Indenture.

 

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

 

“Additional
Principal Distribution Amount” means, as of any Distribution Date after the
last day of the Collection Period on which the Pool Balance has declined to 10%
or less of the Initial Pool Balance, an amount equal to the lesser of (i)
amounts available to be distributed on such Distribution Date after payment of
clauses (i) through (xiii) under Section 2.07(c) of the Administration
Agreement and (ii) the Class Note Balance after giving effect to all
distributions and allocations on that Distribution Date other than pursuant to
Section 2.07(c)(xiv) of the Administration Agreement.

 

“Administration
Agreement” means the Administration Agreement, dated as of April 1, 2005,
among the Servicer, the Administrator, the Indenture Trustee, the Issuer and
the Depositor, as such agreement may be amended or supplemented.

 

“Administration Fee” has the meaning specified
in Section 2.12 of the Administration Agreement.

 

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

 

“Administrator Default” has the meaning
specified in Section 5.01 of the Administration Agreement.

 

“Administrator’s Certificate” means an Officers’
Certificate of the Administrator delivered pursuant to Section 3.01(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.

 

“Asset Balance” means, with respect to any
Distribution Date, an amount equal to:

 

PB + CI - R

 

A-1-2

 

Where:

 

CI = the amount on deposit in the Cash Capitalization
Account on the last day of the related Collection Period less
the excess for that Distribution Date of (i) interest due on the Notes
plus any Primary Servicing Fees, Administration Fees, any Swap Payments owed to
a Swap Counterparty by the Trust and any Swap Termination Payments owed by the
Trust to a Swap Counterparty which are pari passu with interest payments on the Class A Notes
due, over (ii) Available Funds on
deposit in the Collection Account.  In no
case shall CI be less than zero;

 

PB = the Pool Balance as of the last day of the
related Collection Period; and

 

R = the amount to be released from the Cash
Capitalization Account pursuant to section 2.08(a)(viii) and (ix) of
the Administration Agreement.

 

provided, however, that as of the
Closing Date, the Asset Balance shall equal $1,659,063,683, and that, for all
Distribution Dates occurring on or after the September 2009 Distribution Date,
the Asset Balance will be equal to the Pool Balance as of the last day of the
related Collection Period.

 

 “Authorized
Officer” means (i) with respect to the Trust, any officer of the
Trustee who is authorized to act for the 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 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).

 

“Available Funds” means, with respect to a
Distribution Date or any related Monthly Servicing Payment Date, the sum of the
following amounts for the related Collection Period, or, in the case of a
Monthly Servicing Payment Date, the applicable portion of these amounts: (i) all
collections received by the Servicer from borrowers on the Trust Student Loans,
(ii) all Recoveries received during that Collection Period, (iii) the
aggregate Purchase Amounts received during that Collection Period for those
Trust Student Loans repurchased by the Depositor or purchased by the Servicer,
VG Funding or SLM Education Credit Finance Corporation, 

 

A-1-3

 

(iv) amounts received by the
Trust pursuant to the Servicing Agreement during that Collection Period related
to yield or principal adjustments, (v) Investment Earnings for that
Distribution Date and any interest remitted by the Administrator to the
Collection Account prior to such Distribution Date or Monthly Servicing Payment
Date and (vi) amounts received from the Swap Counterparties for that
Distribution Date;

 

provided, however, that if with respect to any Distribution Date there would not be
sufficient funds to pay all of the items specified in clauses (i) through (xi)
of Section 2.07(c) of the Administration Agreement, after application of
Available Funds and application of (a) amounts available from the Cash
Capitalization Account to pay any of the items specified in clauses (i) through
(ix) of Section 2.07(c) of the Administration Agreement and (b) amounts
available from the Reserve Account to pay any of the items specified in clauses
(i) through (iv), (vi) and (viii) and on the respective Note Final Maturity
Date of each Class of Notes, clauses (v), (vii) and (ix), then Available Funds
for that Distribution Date shall 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 such
Distribution Date, up to the amount necessary to pay such items, and the
Available Funds for such succeeding Distribution Date shall be adjusted
accordingly.  In addition, Available
Funds on the Distribution Dates from March 2007 through September 2009 shall
include all funds released from the Cash Capitalization Account for deposit
into the Collection Account on those Distribution Dates.

 

“Back-End
Fee” means an amount equal to, with respect to each Trust Student Loan, the
maximum fee allowable under the note evidencing such Trust Student Loan unless
otherwise limited by the insurance commissioner, but not greater than the
amount for such Trust Student Loan listed on Attachment D to the Servicing
Agreement.

 

“Basic
Documents” means the Trust Agreement, the Indenture, the Servicing
Agreement, the Administration Agreement, the Seller Sale Agreements, the
Depositor Sale Agreement, the Note Depository Agreement, the Swap Agreements
and other documents and certificates delivered in connection with any thereof.

 

“Basis Swap Agreement I” means the
first ISDA Master Agreement by and between the Trust and Morgan Stanley Capital
Services Inc., dated as of April 28, 2005, including the related schedule and
confirmation.

 

“Basis Swap Agreement II” means the
second ISDA Master Agreement by and between the Trust and Morgan Stanley
Capital Services Inc., dated as of April 28, 2005, including the related
schedule and confirmation.

 

“Benefit
Plan” means (i) an employee benefit plan (as defined in Section 3(3) of
ERISA), whether or not subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Code, whether or not
subject to Section 4975 of the Code or (iii) any entity whose
underlying assets include plan assets by reason of a plan’s investment in the
entity.

 

A-1-4

 

 “Bill of
Sale” has the meaning specified in the Seller Sale Agreements or the
Depositor 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 One-Month, Two-Month or
Three-Month LIBOR, 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.

 

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

 

“Cash Capitalization Account” means the account
designated as such, established and maintained pursuant to Section 2.03(a)(iii) of
the Administration Agreement.

 

“Cash Capitalization Account Initial Deposit”
means $154,000,000.

 

“Certificateholder” means the Excess
Distribution Certificateholder.

 

“Charged-Off Loan” means a Trust Student Loan
which is written-off in accordance with the Servicer’s policies and procedures,
but in any event, not later than the date such Trust Student Loan becomes 271
days past due.

 

“Class A Enhancement” means, for any
Distribution Date, the excess of (i) the Asset Balance as of the prior Distribution Date (or as of the Closing Date, in the case
of the first Distribution Date) over (ii) the Class A Note Balance
before taking into account any principal distributions to the Class A
Notes on the current Distribution Date.

 

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

 

“Class A
Note Balance” means the sum of the Class A-1 Note Balance, the Class A-2
Note Balance, the Class A-3 Note Balance and the Class A-4 Note Balance.

 

“Class A
Note Interest Shortfall” means, with respect to any Distribution Date, the
sum for all of the Class A Notes of the excess of (i) the amount of interest
that was payable to the Class A Notes on the preceding Distribution Date over
(ii) the amount of interest actually distributed with respect to the Class A
Notes on such preceding Distribution Date, plus interest on the amount of such
excess interest due to the Class A Noteholders, to the extent permitted by law,
at the weighted average interest rate borne by the Class A Notes from such
preceding Distribution Date to the current Distribution Date.

 

A-1-5

 

“Class A Note Parity Trigger” means with
respect to any Distribution Date that (i) the Class A Note Balance
(prior to giving effect to distributions on such date) is in excess of the sum
of (a) the Pool Balance as of the last day of the related Collection
Period and (b) amounts on deposit in the Collection Account and Cash
Capitalization Account after payment of items (i) through (iv) of Section 2.07(c) of
the Administration Agreement or (ii) the Class A Note Balance for
such Distribution Date (prior to giving effect to any distributions on that
date) is greater than or equal to the Asset Balance for the prior Distribution Date. 
The Class A Note Parity Trigger will remain in effect until the Class A
Enhancement is greater than or equal to the Specified Class A Enhancement.

 

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

 

“Class A
Noteholders’ Interest Distribution Amount” means, with respect to any
Distribution Date, the sum of (i) the amount of interest accrued at the Class A-1
Rate, the Class A-2 Rate, the Class A-3 Rate or the Class A-4 Rate, as
applicable, for the related Accrual Period with respect to all classes of Class
A Notes on the aggregate outstanding principal balances of these classes of
Class A Notes (a) on the immediately preceding Distribution Date after giving
effect to all principal distributions to Class A Noteholders on such preceding Distribution
Date or (b) in the case of the first Distribution Date, on the Closing Date;
and (ii) the Class A Note Interest Shortfall for such Distribution Date.

 

“Class A
Noteholders’ Principal Distribution Amount” means (a) as of any
Distribution Date prior to the Stepdown Date or on which a Trigger Event is in
effect, the lesser of (i) 100% of the excess, if any, of (x) the Class Note
Balance (after taking into account distributions or allocations of principal on
the immediately preceding Distribution Date or as of the Closing Date in the
case of the first Distribution Date) over (y) the excess, if any, of (1) the
Asset Balance for such Distribution Date over (2) the Specified
Overcollateralization Amount and (ii) the Class A Note Balance and (b) on or after
the Stepdown Date and as long as a Trigger Event is not in effect for such
Distribution Date, the excess, if any, of (x) the Class A Note Balance
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 85.0% and (ii) the Asset Balance as of such Distribution Date
and (B) the excess, if any, of the Asset Balance for such Distribution Date
over the Specified Overcollateralization Amount.  Notwithstanding the foregoing, on or after the
Class A-1 Maturity Date, the Class A-2 Maturity Date, the Class A-3 Maturity
Date or the Class A-4 Maturity Date, as applicable, the Class A Noteholders’
Principal Distribution Amount shall not be less than the amount that is
necessary to reduce the Class A-1 Note Balance, Class A-2 Note Balance, Class A-3
Note Balance or Class A-4 Note Balance, as applicable, to zero.

 

“Class A-1 Maturity Date” means the June 2018
Distribution Date.

 

“Class A-1 Note Balance” means, with
respect to any Distribution Date, the Outstanding Amount of the Class A-1
Notes.

 

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

 

A-1-6

 

“Class A-1 Notes” means the
$451,000,000 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-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 Maturity Date” means the December 2020
Distribution Date.

 

“Class A-2 Note Balance” means, with
respect to any Distribution Date, the Outstanding Amount of the Class A-2
Notes.

 

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

 

“Class A-2 Notes” means the
$464,000,000 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-2
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date,
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
Maturity Date” means the June 2023 Distribution Date.

 

“Class A-3
Note Balance” means, with respect to any Distribution Date, the Outstanding
Amount of the Class A-3 Notes.

 

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

 

“Class A-3
Notes” means the $370,000,000 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-3
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.20%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-3 Rate shall mean the
Initial Accrual Rate plus 0.20%, based on an Actual/360 accrual method.

 

“Class A-4
Maturity Date” means the December 2038 Distribution Date.

 

“Class A-4
Note Balance” means, with respect to any Distribution Date, the Outstanding
Amount of the Class A-4 Notes.

 

A-1-7

 

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

 

“Class A-4
Notes” means the $237,215,000 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-4
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.31%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class A-4 Rate shall mean the
Initial Accrual Rate plus 0.31%, based on an Actual/360 accrual method.

 

“Class B Enhancement” means for any
Distribution Date, the excess of (i) the Asset Balance as of the prior
Distribution Date (or as of the Closing Date, in the case of the first
Distribution Date) over (ii) the Class A Note Balance and the Class B
Note Balance before taking into account any principal distributions on the
current Distribution Date.

 

“Class B Maturity Date” means the December 2038
Distribution Date.

 

“Class B Note Balance” means, with respect
to any Distribution Date, the Outstanding Amount of the Class B Notes.

 

“Class B Note Interest Shortfall” means,
with respect to any Distribution Date, the excess of (i) the Class B
Noteholders’ Interest Distribution Amount on the preceding Distribution Date
over (ii) the amount of interest actually distributed to the Class B
Noteholders on that preceding Distribution Date, plus 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 Parity Trigger” means with
respect to any Distribution Date that (i) the outstanding Class A
Note Balance and Class B Note Balance (prior to giving effect to any
distributions on such date) is in excess of the sum of (a) the Pool
Balance as of the last day of the related Collection Period and (b) amounts
on deposit in the Collection Account, Principal Distribution Account and Cash
Capitalization Account after payment of clauses (i) through (vi) under
Section 2.07(c) of the Administration Agreement, or (ii) the Class A
Note Balance and the Class B Note Balance as of the related Distribution
Date (prior to giving effect to any distributions on that date) is greater than
or equal to the Asset Balance for the prior Distribution
Date.  The Class B Note Parity
Trigger will remain in effect until the Class B Enhancement is greater
than or equal to the Specified Class B Enhancement.

 

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

 

“Class B Noteholders’ Interest Distribution
Amount” means, with respect to any Distribution Date, the sum of (a) the
amount of interest accrued at the Class B Note Rate for the related
Accrual Period on the Class B Note Balance (i) on the immediately
preceding Distribution Date, after giving effect to all principal distributions
to Class B Noteholders on that

 

A-1-8

 

preceding
Distribution Date or (ii) in the case of the first Distribution Date, the
Closing Date, and (b) the Class B Note Interest Shortfall for that
Distribution Date.

 

“Class B Noteholders’ Principal Distribution
Amount” means, as of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect on such Distribution Date, the excess, if any, of (x) the sum of (i) the
Class A Note Balance (after taking into account the Class A
Noteholders’ Principal Distribution Amount due on such Distribution Date) and (ii) the
Class B Note Balance immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 89.875% and (ii) the
Asset Balance for such Distribution Date and (B) the excess, if any, of
the Asset Balance for such Distribution
Date over the Specified Overcollateralization Amount.  Prior to the Stepdown Date or any
Distribution Date for which a Trigger Event is in effect, the excess, if any,
of (i) the amounts in clause (a)(i) of the definition of the Class A
Noteholders’ Principal Distribution Amount over (ii) the Class A Note
Balance).  Notwithstanding the foregoing,
on or after the Class B Maturity Date, the Class B Noteholders’
Principal Distribution Amount shall not be less than the amount that is
necessary to reduce the Class B Note Balance to zero.

 

“Class B
Notes” means the $53,920,000 Floating Rate Class B Student Loan-Backed
Notes issued by the Trust pursuant to the Indenture, substantially in the form
of Exhibit A-45 thereto.

 

“Class B
Rate” means, for any Accrual Period after the initial Accrual Period,
Three-Month LIBOR, as determined on the related LIBOR Determination Date, plus
0.28%, based on an Actual/360 accrual method. 
For the initial Accrual Period, the Class B Rate shall mean the
Initial Accrual Rate plus 0.28%, based on an Actual/360 accrual method.

 

“Class C Enhancement” means, for any
Distribution Date, the excess of (i) the Asset Balance as of the prior
Distribution Date (or as of the Closing Date, in the case of the first
Distribution Date) over (ii) the Class Note Balance before taking
into account any principal distributions on the current Distribution Date.

 

“Class C Maturity Date” means the December 2038
Distribution Date.

 

“Class C Note Balance” means, with respect
to any Distribution Date, the Outstanding Amount of the Class C Notes.

 

 “Class C
Note Interest Shortfall” means, with respect to any Distribution Date, the
excess of (i) the Class C Noteholders’ Interest Distribution Amount
on the preceding Distribution Date over (ii) the amount of interest
actually distributed to the Class C Noteholders on that preceding
Distribution Date, plus interest on the amount of that excess, to the extent
permitted by law, at the Class C Rate from that preceding Distribution
Date to the current Distribution Date.

 

“Class C Note Parity Trigger” means with
respect to any Distribution Date that (i) the Class A Note Balance, Class B
Note Balance and Class C Note Balance (prior to giving effect to any
distributions on such date) is in excess of the sum of (a) Pool Balance as
of the last day of the related Collection Period and (b) amounts on
deposit in the Collection Account, Principal

 

A-1-9

 

Distribution Account and Cash Capitalization Account
after payment of clauses (i) through (viii) under Section 2.07(c) of
the Administration Agreement, or (ii) the Class Note Balance as of
the related Distribution Date (prior to giving effect to any distributions on
that date) is greater than or equal to the Asset Balance for the prior
Distribution Date.  The Class C Note
Parity Trigger will remain in effect until the Class C Enhancement is
greater than or equal to the Specified Class C Enhancement.

 

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

 

“Class C Noteholders’ Interest Distribution
Amount” means, with respect to any Distribution Date, the sum of (i) the
amount of interest accrued at the Class C Rate for the related Accrual
Period (a) on the Class C Note Balance on the immediately preceding
Distribution Date after giving effect to all principal distributions to Class C
Noteholders on that preceding Distribution Date or (b) in the case of the
first Distribution Date, the Closing Date and (ii) the Class C Note
Interest Shortfall for that Distribution Date.

 

“Class C
Noteholders’ Principal Distribution Amount” means, as of any Distribution
Date on or after the Stepdown Date and, as long as a Trigger Event is not in
effect on such Distribution Date, the excess, if any, of (x) the sum of (i) the
Class A Note Balance (after taking into account the Class A Noteholders’
Principal Distribution Amount due on such Distribution Date), (ii) the Class B
Note Balance (after taking into account the Class B Noteholders’ Principal
Distribution Amount due on such Distribution Date) and (iii) the Class C Note
Balance immediately prior to such Distribution Date over (y) the lesser of (A)
the product of (i) 97.0% and (ii) the Asset Balance as of such Distribution
Date and (B) the excess, if any, of the related Asset Balance for such
Distribution Date over the Specified Overcollateralization Amount.  Prior to the Stepdown Date or on any
Distribution Date with respect to which a Trigger Event is in effect, the
excess, if any, of (i) amounts in clause (a)(i) of the definition of the Class
A Noteholders’ Principal Distribution Amount over (ii) the Class A Note Balance
plus the Class B Note Balance. 
Notwithstanding the foregoing, on or after the Class C Maturity Date,
the Class C Noteholders’ Principal Distribution Amount shall not be less than
the amount that is necessary to reduce the Class C Note Balance to zero.

 

“Class C Notes” means the $74,659,000
Floating Rate Class C Student Loan-Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-6
thereto.

 

“Class C Rate” means, for any Accrual
Period after the initial Accrual Period, Three-Month LIBOR, as determined on
the related LIBOR Determination Date, plus 0.59%, based on an Actual/360
accrual method.  For the initial Accrual
Period, the Class C Rate shall mean the Initial Accrual Rate plus 0.59%,
based on an Actual/360 accrual method.

 

“Class Note Balance” means the sum of the Class A
Note Balance, the Class B Note Balance and the Class C Note Balance.

 

A-1-10

 

“Clearing Agency” means an organization
registered as a “clearing agency” pursuant to Section 17A of the Exchange
Act. The initial Clearing Agency shall be The Depository Trust Company and the
initial nominee for the Clearing Agency shall be Cede & Co.

 

“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.

 

“Closing
Date” means April 28, 2005.

 

“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 2.03(a)(i) of
the Administration Agreement.

 

“Collection Account Initial Deposit” means
$2,700,000.

 

“Collection
Period” means, with respect to the first Distribution Date, the period
beginning on the Cutoff Date and ending on May 31, 2005, 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.

 

“Commission” means the Securities and Exchange
Commission.

 

“Controlling Note” means so long as any of the Class A
Notes are Outstanding, the Class A Notes (voting together as a single
class), if the Class A Notes have been paid in full, the Class B
Notes and if the Class B Notes have been paid in full, the Class C
Notes.

 

“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 4 New York Plaza, New York, New York 10004, Attention:
Corporate Trust and Agency Group, Structured Finance Team (telephone: (212) 623-5600;
facsimile: (212) 623-4498) 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 Trustee, the
principal corporate trust office of the 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 Trustee may designate by notice to the
Depositor, or the principal corporate trust office of any successor Trustee
(the address of which the successor Trustee will notify the Administrator and
the Depositor).

 

A-1-11

 

“Cumulative Realized Losses Test” is satisfied
for any Distribution Date on which the cumulative principal amount of
Charged-Off Loans, net of Recoveries is equal to or less than the percentage of
the Initial Pool Balance set forth below for the specified period: 

 

	
  Distribution Date

  	
   

  	
  Percentage of

  Initial Pool Balance

  	
   

  
	
  June 2005
  through June 2010

  	
   

  	
  15

  	
  %

  
	
  September
  2010 through June 2013

  	
   

  	
  18

  	
  %

  
	
  September
  2013 and thereafter

  	
   

  	
  20

  	
  %

  

 

“Cutoff
Date” means March 18, 2005.

 

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

 

“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

 

A-1-12

 

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 by 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 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.

 

“Depositor” means SLM Education Credit Funding
LLC, a Delaware limited liability company.

 

“Depositor
Sale Agreement” means the Sale Agreement, dated as of April 28, 2005,
between the Trust and the Depositor.

 

“Depository Agreement” means the Note
Depository Agreement.

 

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

 

“Distribution
Date” means the 15th day of each March, June, September and December, or,
if such day is not a Business Day, the immediately following Business Day,
commencing on June 15, 2005.

 

“Eligible Deposit Account” means 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, Standard & Poor’s, and, if such
institution is rated by Fitch, Fitch, in one of their generic rating categories
which signifies investment grade.

 

A-1-13

 

“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 Standard & Poor’s 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
“F1+”, 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
deposits are insured by the FDIC.  If so
qualified, the 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, the Student Loan Marketing Association, or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America; provided,
that obligations of, or guaranteed by, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association or the Student Loan Marketing Association 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 Trustee or any of their respective
Affiliates is investment manager or advisor);

 

A-1-14

 

(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;

 

(g)                                 asset-backed
securities, including asset-backed securities issued by Affiliates, or entities
formed by Affiliates, of SLM Corporation, 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, but not at a
purchase price in excess of par; and

 

(h)                                 any
other investment which would not result in the downgrading or withdrawal of any
rating of the Securities 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 “F1+”
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
Standard & Poor’s, “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 Standard &
Poor’s shall be considered to be rated by each of the Rating Agencies in the
highest investment category granted thereby.

 

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

 

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

 

“Event of Default” has the meaning specified in
Section 5.01 of the Indenture.

 

“Excess Distribution Certificate” means the
certificate, substantially in the form of Exhibit A to the Trust
Agreement.

 

“Excess Distribution Certificate Paying Agent”
means any paying agent or co-paying agent appointed pursuant to Section 3.03(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.

 

“Excess Distribution Certificateholder” means
the person in whose name an Excess Distribution Certificate is registered in
the Excess Distribution Certificate Register.

 

A-1-15

 

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

 

“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 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 Trustee
under the Trust Agreement or the other Basic Documents.

 

“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.

 

“FDIC” means the Federal Deposit Insurance
Corporation.

 

“Federal Funds Rate” for any day 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.

 

“First Priority Principal Distribution Amount”
means, with respect to any Distribution Date, an amount not less than zero
equal to:

 

AN – AB

 

Where:

 

AN = the Class A Note Balance on (i) the
immediately preceding Distribution Date (after giving effect to any principal
payments made on the Class A Notes on such preceding Distribution Date) or
(ii) in the case of the first Distribution Date, on the Closing Date;

 

AB = the Asset Balance for such Distribution Date;

 

provided,
however, that:

 

•                  if a Class A Note Parity Trigger
is in effect, then the First Priority Principal Distribution Amount shall equal
the Class A Noteholders’ Principal Distribution Amount;

 

A-1-16

 

•                  on or after the Class A-1
Maturity Date, the First Priority Principal Distribution Amount shall not be
less than the amount that is necessary to reduce the Class A-1 Note
Balance to zero;

 

•                  on or after the
Class A-2 Maturity Date, the First Priority Principal Distribution Amount shall
not be less than the amount that is necessary to reduce the Class A-2 Note
Balance to zero;

 

•                  on or after the Class A-3 Maturity
Date, the First Priority Principal Distribution Amount shall not be less than
the amount that is necessary to reduce the Class A-3 Note Balance to zero; and

 

•                  on or after the Class A-4 Maturity
Date, the First Priority Principal Distribution Amount shall not be less than
the amount that is necessary to reduce the Class A-4 Note Balance to zero.

 

“Fitch”
means Fitch, Inc. (also known as Fitch Ratings).

 

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

 

“GLB Regulations” means the Joint Banking
Agencies’ Privacy of Consumer Financial Information, Final Rule (12 CFR
Parts 40, 216, 332 and 573) or the Federal Trade Commission’s Privacy of
Consumer Financial Information, Final Rule (16 CFR Part 313), as
applicable, implementing Title V of the Gramm-Leach-Bliley Act, Public Law 106-102,
as amended.

 

“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.

 

“Indenture”
means the Indenture dated as of April 1, 2005, between 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 (including all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.

 

“Indenture Trustee” means JPMorgan Chase Bank,
National Association, a national banking association, not in its individual
capacity but solely as trustee under the Indenture.

 

A-1-17

 

“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 11.01
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
Maturity” means, with respect to any Accrual Period, a period of time equal
to, one month, two months, three months or four months, as applicable,
commencing on the first day of that Accrual Period.

 

“Initial Accrual Rate” means for each class of Notes 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  +  [15/28  *  (y –
x)]

 

where:

 

x  = 
One-Month LIBOR, and

y  = 
Two-Month LIBOR.

 

“Initial Pool Balance” means the Pool
Balance as of the Cutoff Date, which is $1,505,063,683.

 

“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, 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

 

A-1-18

 

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.

 

“Insolvency
Proceeds” has the meaning set forth in Section 6.01(b) of the
Administration 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 2.03(b) of the Administration
Agreement.

 

“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.

 

“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.

 

“LAW Loan”
means a loan originated under the LAWLOANS Program.

 

“LIBOR”
means One-Month LIBOR, Two-Month LIBOR or Three-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.

 

“Liquidating
Distribution” means the amount of any distribution to the Depositor in
connection with the termination of the Trust under Section 9.01(a) of
the Trust Agreement.

 

“MBA Loan”
means a loan originated under the MBA Loans Program.

 

“MED Loan”
means a loan originated under the MEDLOANS Program.

 

“Minimum Purchase Amount” means an
amount that would be sufficient to (i) reduce the Outstanding Amount of
each class of Notes on such Distribution Date to zero and, (ii) pay to the
respective Noteholders the Class A Noteholders’ Interest Distribution
Amount, the Class B Noteholders’ Interest Distribution Amount and the Class C
Noteholders’ Interest Distribution Amount payable on such Distribution Date.

 

“Monthly Servicing Payment Date” means
the 15th day of each calendar month or, if such day is not a Business Day, the
immediately following Business Day, commencing on May 15, 2005.

 

“Moody’s”
means Moody’s Investors Service, Inc.

 

A-1-19

 

“Note
Depository Agreement” means the Letter of Representations, dated April 28,
2005, among the Trust, the Trustee and the Indenture Trustee in favor of the
Depository Trust Company.

 

“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 B Maturity Date
or the Class C Maturity Date, as applicable.

 

“Note Interest
Shortfall” means the Class A Note Interest Shortfall, the Class B
Note Interest Shortfall and/or the Class C 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” as of the close of
business on a Distribution Date means 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 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 B Rate and the Class C Rate for such Accrual
Period, collectively.

 

“Note Register”
and “Note Registrar” have the respective meanings specified in Section 2.04
of the Indenture.

 

“Noteholder”
or “Holder” means either a Class A Noteholder, a Class B
Noteholder or a Class C Noteholder, as the context requires.

 

“Noteholders’
Interest Distribution Amount” means the Class A Noteholders’ Interest
Distribution Amount, the Class B Noteholders’ Interest Distribution Amount
and the Class C Noteholders’ Interest Distribution Amount.

 

“Noteholders’
Principal Distribution Amount” means the Class A Noteholders’
Principal Distribution Amount, the Class B Noteholders’ Principal
Distribution Amount and the Class C Noteholders’ Principal Distribution
Amount.

 

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

 

“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.

 

A-1-20

 

“Officers’
Certificate” means (i) in the case of the Trust, a certificate signed
by any two Authorized Officers of the Trustee, under the circumstances
described in, and otherwise complying with, the applicable requirements of Section 11.01
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.

 

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

 

“Operating
Agreement” means the Limited Liability Company Operating Agreement of the
Depositor, as such agreement may be amended or supplemented from time to time.

 

“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 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 11.01
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
Trustee.

 

“Outstanding”
means, as of the date of determination, all Notes theretofore authenticated and
delivered under the Indenture except (i) Notes theretofore cancelled by
the Note Registrar or delivered to the Note Registrar for cancellation, (ii) 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 (provided,
however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture), and (iii) 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.

 

A-1-21

 

“Outstanding
Amount” means the aggregate principal amount of all (or, if specified, a
subset of) Notes Outstanding at the date of determination.

 

“Paying Agent”
means 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 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.

 

“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.

 

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

 

“Pool Balance”
means, as of the last day of a Collection Period, the aggregate principal
balance of the Trust Student Loans as of the beginning of such Collection
Period, including accrued interest as of the beginning of such Collection
Period, that is expected to be capitalized, plus interest and insurance fees
that accrue during such Collection Period that are capitalized or are to be
capitalized and which were not included in the prior Pool Balance, as reduced
by (i) all payments received by the Trust through the last day of such
Collection Period from Obligors (other than Recoveries), (ii) all amounts
received by the Trust through that date from purchases of the Trust Student
Loans by SLM Education Credit Finance Corporation, VG Funding or the Servicer, (iii) the
aggregate principal balance of all Trust Student Loans that became Charged-Off
Loans during such Collection Period, and (iv) the amount of any
adjustments to balances of the Trust Student Loans that the Servicer makes
under the Servicing Agreement through the last day of such Collection
Period.  The principal balance of a Trust
Student Loan that became a Charged-Off Loan during a prior Collection Period
shall be deemed to be zero.

 

“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 2.05 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.

 

“Principal
Distribution Account” means the account designated as such, established and
maintained pursuant to Section 2.03(a)(iv) of the Administration
Agreement.

 

“Principal Distribution Amount” means
the sum of the First Priority Principal Distribution Amount, the Second
Priority Principal Distribution Amount, the Third Priority

 

A-1-22

 

Principal Distribution Amount, and the Regular Principal Distribution
Amount for a Distribution Date.

 

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

 

“Program”
means one of the loan programs under which a MED Loan, MBA Loan, LAW Loan or
Signature Student Loan was originated.

 

“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 3.05 of the Servicing Agreement or repurchased by the
Depositor pursuant to Section 6.01 of the Depositor Sale Agreement or
purchased by the Sellers pursuant to Section 6.01 of the Seller Sale
Agreements.

 

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

 

“Rating Agency
Condition” means, with respect to any action, that each Rating Agency shall
have been given 10 days’ prior notice thereof and that each of the Rating
Agencies shall have notified the Administrator, the Servicer, the Trustee and
the Indenture Trustee in writing that such action will not result in and of
itself in a reduction or withdrawal of the then current rating of any of the
Notes.

 

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

 

“Recoveries”
means, as of any date of determination, all amounts received by the Trust in
respect of a Charged-Off Loan after such Trust Student Loan became a
Charged-Off Loan.

 

“Redemption
Date” means in the case of a payment to Noteholders pursuant to Section 10.01
of the Indenture, the Distribution Date specified pursuant to Section 10.01
of the Indenture.

 

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

 

“Reference
Banks” means four major banks in the London interbank market selected by
the Administrator.

 

A-1-23

 

“Regular
Principal Distribution Amount” means, with respect to any Distribution
Date, an amount not less than zero and equal to:

 

(N – (AB – SOA)) – (FPDA + SPDA + TPDA)

 

Where:

 

N = the Class Note
Balance on (i) the immediately preceding Distribution Date (after giving
effect to any principal payments made on such preceding Distribution Date) or (ii) in
the case of the first Distribution Date, the Closing Date, as the case may be;

 

AB = the Asset Balance
for such Distribution Date;

 

SOA = the
Specified Overcollateralization Amount for such Distribution Date;

 

FPDA = the First
Priority Principal Distribution Amount, if any, for such Distribution Date;

 

SPDA = the Second
Priority Principal Distribution Amount, if any, for such Distribution Date; and

 

TPDA = the Third Priority
Principal Distribution Amount, if any, for such Distribution Date;

 

provided, however, that:

 

•                  the Regular Principal Distribution
Amount shall not exceed the Class Note Balance on such Distribution Date
(after taking into account the allocation of the First Priority Principal
Distribution Amount, the Second Priority Principal Distribution Amount and the
Third Principal Distribution Amount, if any, on such Distribution Date).

 

“Reserve
Account” means the account designated as such, established and maintained
pursuant to Section 2.03(a)(ii) of the Administration Agreement.

 

“Reserve Account Initial Deposit”
means $3,762,659.

 

“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.

 

A-1-24

 

“Sale Agreement”
means, collectively, the Depositor Sale Agreement and the Seller Sale
Agreements.

 

“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).

 

“Second
Priority Principal Distribution Amount” means, with respect to any
Distribution Date, an amount not less than zero equal to:

 

(ABN – AB) – FPDA

 

Where:

 

ABN = the sum of
the Class A Note Balance and the Class B Note Balance on (i) the
immediately preceding Distribution Date (after giving effect to any principal
payments made on the Class A Notes and the Class B Notes on such
preceding Distribution Date or (ii) in the case of the first Distribution
Date, the Closing Date;

 

AB = the Asset
Balance for such Distribution Date; and

 

FPDA = the First
Priority Principal Distribution Amount, if any, with respect to such
Distribution Date;

 

provided, however, that:

 

•                  if a Class B Note Parity
Trigger is in effect, then the Second Priority Principal Distribution Amount
shall equal (a) the sum of (i) the Class A Noteholders’
Principal Distribution Amount and (ii) the Class B Noteholders’
Principal Distribution Amount less (b) the First Priority Principal
Distribution Amount;

 

•                  on or after the Class B
Maturity Date, the Second Priority Principal Distribution Amount shall not be
less than the amount that is necessary to reduce the Class B Note Balance
to zero; and

 

•                  the Second Priority Principal
Distribution Amount shall not exceed the Class A Note Balance and the Class B
Note Balance as of such Distribution Date (after taking into account the
allocation of the First Priority Principal Distribution Amount, if any, on such
Distribution Date).

 

“Seller”
means SLM Education Credit Finance Corporation and/or VG Funding, as
applicable.

 

“Seller Sale Agreements” means the SLM
ECFC Sale Agreement and the VG Funding Sale Agreement, each dated April 28,
2005.

 

A-1-25

 

“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 5.01 of the Servicing
Agreement.

 

“Servicer’s
Report” means any report of the Servicer delivered pursuant to Section 3.01(a) of
the Administration Agreement, substantially in the form acceptable to the
Administrator.

 

“Servicing Agreement” means the
Servicing Agreement, dated as of April 28, 2005, among the Trust, the Trustee,
the Depositor, the Servicer, the Administrator and the Indenture Trustee.

 

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

 

“Signature
Student Loan” means a loan originated under the Signature Student Loan
Program.

 

“SLM ECFC”
means SLM Education Credit Finance Corporation.

 

“SLM ECFC
Sale Agreement” means the Sale Agreement dated as of April 28, 2005,
between SLM ECFC and the Depositor.

 

“SLS Loan”
means a Trust Student Loan designated as such that is made under the
Supplemental Loans for Students Program in accordance with the Higher Education
Act.

 

“Specified Class A Enhancement” means,
for any Distribution Date, the greater of (a) 15.0%
of the Asset Balance for such Distribution Date, or (b) the Specified
Overcollateralization Amount for such Distribution Date.

 

“Specified Class B
Enhancement” means, for any Distribution Date, the greater of (a) 10.125%
of the Asset Balance for such Distribution Date, or (b) the Specified
Overcollateralization Amount for such Distribution Date.

 

“Specified Class C Enhancement” means,
for any Distribution Date, means the greater of (a) 3.0% of the Asset Balance
for such Distribution Date, or (b) the Specified Overcollateralization Amount
for such Distribution Date.

 

“Specified Overcollateralization Amount”
means, as of any Distribution Date, 2.0% of the initial Asset Balance.

 

“Specified Reserve Account Balance”
means the lesser of $3,762,659 and the Class Note Balance.

 

“Standard &
Poor’s” means Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc.

 

A-1-26

 

“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 (a) the June 2010 Distribution Date and (b) the Distribution Date
following that date on which the Class A Note Balance is reduced to zero.

 

“Student Loans”
means private education loans to students and parents of students that are not
reinsured by the Department of Education or any other government agency.

 

“Successor
Administrator” has the meaning specified in Section 3.07(e) of
the Indenture.

 

“Successor
Servicer” has the meaning specified in Section 3.07(e) of the
Indenture.

 

“Swap
Agreements” means the Basis Swap Agreement I and the Basis Swap Agreement
II.

 

“Swap Counterparty” means Morgan
Stanley Capital Services Inc., together with its successors and permitted
assigns under the Basis Swap Agreement I or the Basis Swap Agreement II.  In all instances, any references to the Swap
Counterparty in plural shall be read to refer to the Swap Counterparty, so long
as each Swap Counterparty is the same entity.

 

“Swap Payment” means, with respect to
each Distribution Date, the amount payable to the Swap Counterparty by the
Trust for such date as specified in the related Swap Agreement.

 

“Swap Termination Date” means the date
on which the related Swap Agreement terminates in accordance with its terms.

 

“Swap Termination Payments” has the
meaning set forth in the Swap Agreements.

 

“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).

 

“Third Priority
Principal Distribution Amount” means, with respect to any Distribution
Date, an amount not less than zero equal to:

 

(N – AB) – (FPDA +
SPDA)

 

Where:

 

N = the Class Note
Balance on (i) the immediately preceding Distribution Date (after giving
effect to any principal payments made on the Notes on such preceding
Distribution Date) or (ii) in the case of the first Distribution Date, the
Closing Date;

 

AB = the Asset
Balance for such Distribution Date;

 

A-1-27

 

FPDA = the First
Priority Principal Distribution Amount, if any, such Distribution Date; and

 

SPDA = the Second Priority
Principal Distribution Amount, if any, for such Distribution Date;

 

provided, however, that:

 

•                  if a Class C Note Parity
Trigger is in effect, then the Third Priority Principal Distribution Amount
shall equal (a) the sum of (i) the Class A Noteholders’
Principal Distribution Amount, (ii) the Class B Noteholders’
Principal Distribution Amount and (iii) the Class C Noteholders’
Principal Distribution Amount less (b) the First Priority Principal
Distribution Amount plus the Second Priority Principal Distribution Amount;

 

•                  on or after the Class C
Maturity Date, the Third Priority Principal Distribution Amount shall not be
less than the amount that is necessary to reduce the Class C Note Balance
to zero; and

 

•                  the Third Priority Principal
Distribution Amount shall not exceed the Class Note Balance on such
Distribution Date (after taking into account the allocation of the First
Priority Principal Distribution Amount and the Second Priority Principal
Distribution Amount, if any, on such Distribution Date).

 

“Three-Month LIBOR”, “One-Month
LIBOR” or “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 City
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 Date”
has the meaning specified in Section 5.02(a) of the Administration
Agreement.

 

A-1-28

 

“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 with respect to
any Distribution Date, that the Cumulative Realized Losses Test is not
satisfied.

 

“Trust” means SLM Private Credit
Student Loan Trust 2005-A, 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, the Collection Account Initial
Deposit and all earnings on and proceeds of the foregoing.

 

“Trust Accounts”
has the meaning specified in Section 2.03 of the Administration Agreement.

 

“Trust Agreement” means the Short-Form
Trust Agreement, dated as of March 29, 2005, between the Depositor and the
Trustee as amended and restated pursuant to an Amended and Restated Trust
Agreement, dated as of April 28, 2005, among the Depositor, the Trustee and the
Indenture Trustee.

 

“Trust Auction
Date” has the meaning specified in Section 4.04 of the Indenture.

 

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

 

“Trust Estate” means all right, title
and interest of the Trust (or the 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 Trustee and the Trust pursuant to the Trust Agreement, the Administration
Agreement and the Swap 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 substituted for
a Trust Student Loan by the Depositor pursuant to Section 6.01 of the
Depositor Sale Agreement, by the Sellers pursuant to Section 6.01 of the
Seller Sale Agreements or by the Servicer pursuant to Section 3.05 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.

 

A-1-29

 

“Trust Student
Loan Files” means the documents specified in Section 2.01 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.

 

“VG Funding”
means VG Funding, LLC.

 

“VG Funding
Sale Agreement” means the Sale Agreement dated as of April 28,
2005, between VG Funding and the Depositor.

 

“91-Day
Treasury Bills” means direct obligations of the United States with a
maturity of thirteen weeks.

 

A-1-30

 

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]

 

 

(See 16.1 through 16.6)

 

A-1

 

EXHIBIT B

 

[Form of Note Depository
Agreement]

 

B-1Exhibit 10.1

 

Dated 30 April 2005

 

 

VIA
NET.WORKS, INC.

 

and

 

VIA
NET.WORKS HOLDCO, INC.

 

and

 

VIA
NET.WORKS NY CORP, INC.

 

and

 

CLARANET
GROUP LIMITED

 

and

 

CLARA.NET
HOLDINGS LIMITED

 

 

SALE AND PURCHASE
AGREEMENT

 

relating to the operating subsidiaries and
certain assets and liabilities of VIA NET.WORKS, Inc. and

VIA NET.WORKS Holdco, Inc.

 

 

Linklaters

 

One Silk Street

London EC2Y 8HQ

 

 

Telephone +44 (20) 7456 2000

Facsimile +44 (20) 7456 2222

 

Ref JAGI

 

 

Sale and Purchase Agreement

 

This Agreement is made on 30 April 2005

 

between:

 

(1)                              VIA NET.WORKS, Inc., a company incorporated in Delaware,
the United States whose registered office is at 1013 Centre Road, Wilmington,
Delaware 19805, United States (“VIA Inc”
or the “Seller”);

 

(2)                              VIA NET.WORKS Holdco, Inc., a company incorporated in Delaware,
the United States whose registered office is at 1013 Centre Road, Wilmington,
Delaware 19805, United States (“Holdco”);

 

(3)                              VIA NET.WORKS NY Corp, Inc., a company incorporated in New York,
the United States, whose registered office is at 80 State Street, Albany NY1227-2543
(together with VIA Inc and Holdco, the “Sellers”
or the “Relevant Sellers”);

 

(4)                              Claranet Group Limited, a company incorporated in England and
Wales whose registered office is at 21 Southampton Row, London WC1B 5HA (the “Purchaser”); and

 

(5)                              Clara.net Holdings
Limited, a company
incorporated in Jersey whose registered office is at c/o Professional Trust
Company Limited, PO Box 274, 36 Hilgrove Street, St Helier, Jersey JE4 8TR (“Clara.net Holdings” and, together with the
Purchaser, the “Purchasers” or the
“Relevant Purchasers”).

 

Whereas:

 

(A)                           The Relevant Sellers have agreed to sell the Group
(as defined below) and to assume the obligations imposed on the Relevant
Sellers under this Agreement.

 

(B)                             The Relevant Purchasers have agreed to purchase
the Group and to assume the obligations imposed on the Relevant Purchasers
under this Agreement.

 

It is agreed as follows:

 

1                                      Interpretation

 

In this Agreement, unless the context
expressly otherwise requires, the provisions in this Clause 1 apply:

 

1.1                            Definitions

 

“Accounts
Date” means 31 December 2004;

 

“Agreed
Cashflow” means the sum of the amount of Cashflow expressly provided
for in the Working Capital Projections, being EUR 604,000 if the Pre-Closing
Cut-Off Date is 31 May 2005, EUR 893,000 if the Pre-Closing Cut-Off
Date is 30 June 2005, EUR 1,894,000 if the Pre-Closing Cut-Off Date
is 31 July 2005 and EUR 2,474,000 if the Pre-Closing Cut-Off Date is 31 August 2005;

 

“Agreed
Terms” means, in relation to a document, such document in the terms
agreed between VIA Inc and the Purchaser and signed for identification by the
Sellers’ Lawyers and the Purchasers’ Lawyers with such alterations as may be
agreed in writing between VIA Inc and the Purchaser from time to time;

 

 

“Assumed
Liabilities” means the liabilities of the Relevant Sellers (other
than the Excluded Liabilities) to be assumed by the Relevant Purchasers under
or pursuant to Clause 2.3.2 and “Assumed
Liability” means any one of them;

 

“Back
Stop Date” means 9 September 2005;

 

“Benchmark
Date” means the date of this Agreement;

 

“Business
Assets” means all the property, rights and assets (including the
Sellers’ Computer Systems) agreed to be sold under Clause 2.3.1 of this
Agreement or any relevant Local Transfer Document;

 

“Business
Day” means a day which is not a Saturday, a Sunday or a public
holiday in London or Amsterdam;

 

“Business
Intellectual Property” means all rights and interests of the Sellers
in Intellectual Property which, at or immediately before Closing, is used or
capable of use in the business of the Group, including the Registered
Intellectual Property details of which are set out in the document entitled “Business Intellectual Property” contained in the Data Room;

 

“Cashflow”
means the sum of any of the following to the extent they occur between the
Benchmark Date and the Closing Date (inclusive):

 

(i)                                 the aggregate amount of any dividend,
or distribution declared, paid or made by a Group Company other than to another
Group Company (expressed as a negative number); and

 

(ii)                              the aggregate amount of any redemption
or purchase of shares or return of capital by a Group Company other than to
another Group Company (expressed as a negative number); and

 

(iii)                           the aggregate amount of any cash
payments made to (or the fair market value of assets transferred to or
liabilities assumed, indemnified or incurred for the benefit of) any member of
the VIA Group (including, without limitation, management fees and any payment
of interest) by any Group Company (expressed as a negative number); and

 

(iv)                          the aggregate amount of any cash
payments made to (or the fair market value of assets transferred to or
liabilities assumed, indemnified or incurred for the benefit of) any Group
Company (including, without limitation, management fees and any payment of
interest) by any member of the VIA Group (expressed as a positive number); and

 

(v)                             any payment or incurrence by a Group
Company of any third party costs and expenses in connection with the proposed
sale of the Companies to the extent that the same have not been refunded to the
relevant Group Company by the Sellers or their agents prior to Closing
(expressed as a negative number); and

 

(vi)                          any payment or incurrence by a Group
Company of any material third party costs and expenses that should properly
have been for the account of the VIA Group in connection with any litigation or
potential litigation to the extent that the same have not been refunded to the
relevant Group Company by the Sellers or their agents prior to Closing
(expressed as a negative number); and

 

 

(vii)                       any indemnity or other contingent
liability or obligation granted or assumed, other than pursuant to this
Agreement, by a Group Company in connection with the proposed sale of the Companies
(expressed as a negative number).

 

“Cashflow
Adjustment Amount” means the amount of Agreed Cashflow minus the
amount of Identified Cashflow provided that if the amount of Identified
Cashflow is greater than the amount of Agreed Cashflow then the Cashflow
Adjustment Amount shall be deemed to be zero;

 

“Charged
Asset” means any asset subject to an Encumbrance created pursuant to
a Security Document;

 

“Claims”
means all rights and claims of the Sellers arising at any time whether before
or after Closing primarily in relation to any of the Business Assets or any
Assumed Liability (but excluding any rights or claims under insurance policies)
and “Claim” means any one of them;

 

“Closing”
means the completion of the sale of the Group pursuant to Clauses 6.1, 6.2 and
6.3 of this Agreement and any relevant Local Transfer Document;

 

“Closing
Date” means the date on which such Closing takes place pursuant to
Clause 6;

 

“Companies”
means the companies, details of which are set out in paragraph 1 of Schedule 2
and “Company” means any one of
them;

 

“Competing
Proposals” means a proposal made by a Third Party to either of the
Sellers pursuant to which such Third Party will acquire equity or any material
assets, or provide debt or equity funding to, either of the Sellers or any
Group Company. For the avoidance of doubt, “Competing Proposal” shall not
include the (i) disposal of any assets of either of the Sellers or any
Group Company to the extent that such disposal is proposed by or otherwise
agreed to in writing by Purchaser, pursuant to a Restructuring Action or
otherwise, or (ii) the issuance of any equity shares representing less
than 25 per cent of the entire issued equity share capital of VIA Inc;

 

“Computer
Systems” means all computer systems, communications systems,
hardware and software used by a Group Company and/or either of the Sellers, as
appropriate;

 

“Confidentiality
Agreement” means the confidentiality agreement dated 31 January 2005
between VIA Inc and Clara.net Limited pursuant to which VIA Inc made available
to the Purchasers certain confidential information relating to the Group;

 

“Consolidated
Accounts “ means the consolidated audited accounts of the VIA Group
and the Group Companies taken as a whole, each comprising a balance sheet and a
profit and loss account for the twelve month period ended on the Accounts Date;

 

“Contracts”
means the Licence Agreements and all contracts, undertakings, arrangements and
agreements listed in Schedule 3 and contained in the Data Room under “Contracts”
in the folder entitled “VIA Inc”, and “Contract”
means any of them;

 

“Customer
Premises Equipment” means equipment required by a customer for the
provision of services to that customer and which is not located at the premises
of a Group Company;

 

“Data
Room” means the data room containing documents and information
relating to the Group made available by the Sellers at the website communicated
by the Sellers to the

 

 

Purchasers on a CD ROM, the
contents of which are listed in Appendix B to the Disclosure Letter;

 

“Deposit”
means the amount of $3,000,000 paid to VIA Inc by the Purchaser pursuant to
paragraph 4 of the Letter of Intent;

 

“Disclosure
Letter” means the letter dated on the same date as this Agreement
from the Sellers to the Purchasers disclosing:

 

(i)                                 information constituting exceptions to
the Warranties; and

 

(ii)                              details of other matters referred to in
this Agreement;

 

“Employee”
means all employees of the Group Companies and all Relevant Employees who are
or will be employed by a Group Company immediately prior to the Closing Date
(other than any specifically excluded by agreement with the Purchaser);

 

“Encumbrance”
means any claim, charge, mortgage, lien, option, equity, power of sale,
hypothecation, usufruct, retention of title, right of pre-emption, right of first
refusal or other third party rights or security interest of any kind or an
agreement, arrangement or obligation to create any of the foregoing;

 

“Excluded
Liabilities” means the liabilities referred to in Clause 2.3.3;

 

“Facility
Agreement” means the agreement in the Agreed Terms to be entered
into on the date hereof pursuant to which Clara.net Holdings will provide VIA
Inc with a working capital facility;

 

“Finance
Documents” has the meaning given to it in the Facility Agreement;

 

“Financial
Indebtedness” means any indebtedness for or in respect of:

 

(a)                              moneys borrowed;

 

(b)                             any amount raised by acceptance under
any acceptance credit facility;

 

(c)                              any amount raised pursuant to any note
purchase facility or the issue of bonds, notes, debentures, loan stock or any
similar instrument;

 

(d)                             the amount of any liability in respect
of any lease or hire purchase contract which would, in accordance with the
relevant accounting standard in the jurisdiction of the relevant Group Company,
be treated as a finance or capital lease;

 

(e)                              receivables sold or discounted (other
than any receivables to the extent they are sold on a non-recourse basis);

 

(f)                                any amount raised under any other
transaction (including any forward sale or purchase agreement) having the
commercial effect of a borrowing;

 

(g)                             any derivative transaction entered into
in connection with protection against or benefit from fluctuation in any rate
or price (and, when calculating the value of any derivative transaction, only
the marked to market value shall be taken into account);

 

(h)                             shares which are expressed to be
redeemable;

 

(i)                                 any counter-indemnity obligation in
respect of a guarantee, indemnity, bond, standby or documentary letter of
credit or any other instrument issued by a bank or financial institution; and

 

 

(j)                                 the amount of any liability in respect
of any guarantee or indemnity for any of the items referred to in paragraphs (a) to
(i) above.

 

“Finance
Leasing Arrangement” means any arrangement or transaction pursuant
to which a Group Company:

 

(a)                              sells, transfers or otherwise disposes
of any of its assets on terms whereby they are or may be leased to or
re-acquired by that or any other Group Company;

 

(b)                             sells, transfers or otherwise disposes
of any of its receivables on recourse terms;

 

(c)                              agrees that money or the benefit of a
bank or other account may be applied, set-off or made subject to a combination
of accounts, save in the ordinary course of its banking arrangements for the
purpose of netting debit and credit balances; or

 

(d)                             enters into any other preferential
arrangement having a similar effect,

 

in circumstances where the
arrangement or transaction is entered into primarily as a method of raising
Financial Indebtedness or of financing the acquisition of an asset;

 

“Goodwill”
means the goodwill of the Sellers in relation to the business of the Group as
at Closing;

 

“Group”
means the Group Companies and the VIA Operations, taken as a whole;

 

“Group
Companies” means the Companies and the Subsidiaries and “Group Company” means any one of them;

 

“Group
Intellectual Property” means all rights and interests held by the
Group Companies in Intellectual Property as at the date of Closing (whether as
owner or licensee);

 

“Identified
Cashflow” means the aggregate amount of any Cashflow between the
Benchmark Date and the Pre-Closing Cut-Off Date which has been notified to the
Purchaser pursuant to Clause 6.4.1;

 

“Insolvency
Proceedings” means:

 

(a)                              any statutory procedure involving a
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any Group Company or any member of the
VIA Group;

 

(b)                             a composition, assignment or
arrangement with the majority by value of its unsecured creditors of any Group
Company or any member of the VIA Group;

 

(c)                              the appointment of a custodian,
liquidator, receiver, administrator, administrative receiver, compulsory
manager or other similar officer in respect of any Group Company or any of its
assets of any Group Company or any member of the VIA Group;

 

(d)                             the enforcement of any Security over
any assets of any Group Company or any member of the VIA Group and which if not
discharged within 10 Business Days would have a material adverse effect on the
business of the Group Companies and the VIA Group taken as a whole;

 

(e)                              the expropriation, attachment,
sequestration, distress or execution which affects any asset or assets of a
Group Company or any member of the VIA Group and

 

 

which is not discharged within 10
Business Days would have a material adverse effect on the business of the Group
Companies and the VIA Group taken as a whole; or

 

(f)                                any resolution by the directors of any
Group Company or member of the VIA Group or any application or petition to a
court in respect of any of the processes or events listed in paragraphs (a) to
(e) above,

 

or any analogous statutory
procedure or enforcement step in any jurisdiction,

 

BUT EXCLUDING any step taken by a
third party that:

 

(i)                                 does not actually result in one of the
processes or events described in paragraphs (a) to (e) above being
commenced or occurring in respect of that Group Company or member of the VIA
Group and is dismissed or withdrawn within 10 Business Days of presentation;
and

 

(ii)                              is made in respect of a debt with a
value purported (by the third party) to be less than $500,000.

 

“Intellectual
Property” means trade marks, domain names, get-up, logos, patents,
design rights, copyrights (including copyrights in software), database rights,
Know-how and all other similar rights in any part of the world, including any
registration of such rights and applications and rights to apply for such
registrations;

 

“Intra-Group
Payables” means all outstanding loans or other liabilities or obligations
(including, for the avoidance of doubt, in relation to dividends, management
fees and inter-company trading balances) owed by a Group Company to a member of
the VIA Group as at the close of business on the Closing Date;

 

“Intra-Group
Receivables” means all outstanding loans or other liabilities or
obligations (including, for the avoidance of doubt, in relation to management
fees and inter-company trading balances) owed by a member of the VIA Group to a
Group Company as at the close of business on the Closing Date;

 

“Know-how”
means confidential and/or proprietary industrial and commercial information and
techniques in any form including (without limitation) drawings, formulae, test
results, reports, project reports and testing procedures, instruction and
training manuals, tables of operating conditions, market forecasts, lists and
particulars of customers and suppliers;

 

“Letter
of Intent” means the letter agreement relating to the subject matter
of this Agreement signed by VIA Inc and the Purchaser and dated 10 April 2005;

 

“Liabilities”
means all liabilities, duties and obligations of every description, whether
deriving from contract, common law, statute or otherwise, whether present or
future, actual or contingent, ascertained or unascertained or disputed and
whether owed or incurred severally or jointly or as principal or surety;

 

“Licence
Agreements” means those Intellectual Property licence agreements
listed in the document entitled “Contracts” contained in the “VIA Inc” folder
in the Data Room and copies of which are included in the Data Room;

 

“Local
Transfer Document” has the meaning given to it in Clause 2.5.1;

 

“Losses”
means all losses, liabilities, costs (including without limitation legal costs
and experts’ and consultants’ fees), charges, expenses, actions, proceedings,
claims and

 

 

demands but excluding
consequential, incidental, special or punitive damages including loss of
profits or revenues;

 

“Material
Contracts” means contracts to which the Sellers or a Group Company
is a party and which account for, in the case of customers, in excess of
$150,000 of revenue per annum and, in the case of suppliers, in excess of
$100,000;

 

“Material
Group IP” means such of the Group Intellectual Property as is
material to the business of the Group;

 

“Moveable
Assets” means all existing applications and/or systems used in the
operations of the Group Companies immediately prior to Closing, including all
IT, communications, network management, back office and financial software
applications or systems (Inovaware, Coda, etc.) and network management systems;

 

“NASDAQ”
means the NASDAQ Stock Market Inc.;

 

“Net
Deposit Amount” means the amount of the Deposit minus £1,000,000;

 

“Permitted
Application” means, in respect of any funds advanced to either of
the Sellers by Clara.net Holdings under the Facility Agreement, the application
of such funds in accordance with the Cash Requests (as defined in the Facility
Agreement) accompanying the Utilisation Request (as defined in the Facility
Agreement) pursuant to which such funds were advanced by Clara.net Holdings;

 

“Permitted
Disposal” means any sale, lease, transfer or disposal of an asset
(other than a Charged Asset, any of the Shares or any of the Business Assets)
of a Group Company:

 

(a)                              made in the ordinary course of trading
on arm’s length terms where the higher of the market value of or the
consideration receivable for the asset, exclusive of VAT, is not greater than
$100,000; or

 

(b)                             comprising customer contracts of a
revenue nature in the ordinary course of business;

 

“Permitted Encumbrance”
means:

 

(a)                              any lien arising by operation of law
and in the ordinary course of trading; or

 

(b)                             any Encumbrance in existence as at the
date of this Agreement or coming into existence pursuant to an agreement
existing as of the date of this Agreement; or

 

(c)                              any Encumbrance created pursuant to the
Finance Documents;

 

“Pre-Closing
Cut-Off Date” means the last day of the calendar month prior to the
calendar month in which Closing takes place;

 

“Properties”
means the leasehold properties, listed in the document entitled “Real Property
Leasehold Interest Summary Relating to Office and Datacentres” contained in the
Data Room, and “Property” means
any one of them;

 

“Purchase
Price” has the meaning set out in Clause 3.1;

 

“Purchasers’
Group” means Clara.net Holdings and its subsidiaries from time to
time, including, if applicable, any Group Companies;

 

“Purchasers’
Lawyers” means Linklaters of One Silk Street, London EC2Y 8HQ;

 

 

“Registered
Intellectual Property” means Intellectual Property which is
registered or the subject of an application for registration in any patent,
trade mark or other Intellectual Property registry anywhere in the world;

 

“Relevant
Employees” means those employees listed in the document entitled “Relevant
Employees” contained in the Data Room;

 

“Relevant
Purchasers’ Warranties” has the meaning given to it in Clause 8.5;

 

“Restructuring
Action” means an action to restructure the business of any Group
Company or the VIA Operations which restructuring is carried out prior to
Closing by agreement between VIA Inc and the Purchaser;

 

“SEC”
has the meaning given to it in Clause 4.2;

 

“Security”
has the meaning given to it in the Facility Agreement;

 

“Security
Document” has the meaning given to it in the Facility Agreement;

 

“Sellers’
Lawyers” means Hogan & Hartson of One Angel Court, London
EC2R 7HJ;

 

“Senior
Employee” means any Employee employed or engaged in relation to the
Group on an annual salary (on the basis of full-time employment) in excess of
€100,000 or local equivalent;

 

“Shares”
means the shares in the capital of the Companies specified in Part 1 of Schedule 1;

 

“Solus
Accounts” means the audited accounts of PSINet Germany GmbH, VIA
NET.WORKS France S.A., VIA NET.WORKS España SL, VIA France Network Holding SAS
and VIA NET.WORKS UK Holding Limited comprising a balance sheet and a profit
and loss account for the twelve month period ended on 31 December 2003;

 

“Subsidiaries”
means the companies listed in paragraph 2 of Schedule 2 together with any
other subsidiaries of the Companies and “Subsidiary”
means any one of them;

 

“Taxation”
or “Tax” means all forms of
taxation whether direct or indirect and whether levied by reference to income,
profits, gains, net wealth, asset values, turnover, added value or other reference
and statutory, governmental, state, provincial, local governmental or municipal
impositions, duties, contributions, rates and levies (including without
limitation social security contributions and any other payroll taxes), whenever
and wherever imposed (whether imposed by way of a withholding or deduction for
or on account of tax or otherwise) and in respect of any person and all
penalties, charges, costs and interest relating thereto;

 

“Taxation
Benefit” means any Taxation benefit or advantage, including any
loss, relief, allowance, exemption, set-off, deduction or credit available in
the computation of any liability to Taxation;

 

“Tax
Authority” means any taxing or other authority competent to impose
any liability in respect of Taxation or responsible for the administration
and/or collection of Taxation or enforcement of any law in relation to
Taxation;

 

“Third
Party” means persons other than the Purchasers or any member of the
Purchasers’ Group;

 

 

“Third
Party Consents” means all consents, licences, approvals, permits,
authorisations or waivers required from third parties for the assignment or
transfer to the Relevant Purchasers or a Group Company of any of the Contracts
and “Third Party Consent” means
any one of them;

 

“UK
Sale Agreement” means the sale and purchase agreement between
Claranet Limited, CLARA.NET Holdings Limited, VIA NET.WORKS Europe Holding B.V.
and VIA Inc dated 28 September 2004;

 

“Unidentified
Cashflow” means Cashflow which is not Identified Cashflow;

 

“VAT”
means within the European Union such Tax as may be levied in accordance with
(but subject to derogations from) the Directive 77/338/EEC and outside the
European Union any Taxation levied by reference to added value or sales;

 

“VIA
Inc Board” means the board of directors of VIA Inc;

 

“VIA
Group “ means VIA Inc and its subsidiaries from time to time
excluding the Group Companies;

 

“VIA
Operations” means the activities carried on by the Sellers in
relation to or in connection with the business of the Group Companies and being
sold under this Agreement pursuant to Clause 2.3 and the Local Transfer
Documents;

 

“VIA
Shareholders” means the holders of VIA Inc’s common stock from time
to time;

 

“Warranties”
means the warranties given by the Sellers pursuant to Clause 8 and Schedule 7
and “Warranty” means any one of
them; and

 

“Working
Capital Projections” means the working capital projections set out
in Schedule 8 or as otherwise agreed in writing between the parties from
time to time.

 

1.2                            Shares

 

References to shares shall
include, where relevant, quotas.

 

1.3                            Singular, plural, gender

 

References to one gender include
all genders and references to the singular include the plural and vice versa.

 

1.4                            References to persons and companies

 

References to:

 

1.4.1                 a person include any company,
partnership or unincorporated association (whether or not having separate legal
personality); and

 

1.4.2                 a company include any company,
corporation or any body corporate, wherever incorporated.

 

1.5                            References to subsidiaries and holding companies

 

A company is a “subsidiary” of another company (its “holding company”) if that other company,
directly or indirectly, through one or more subsidiaries:

 

1.5.1                 holds a majority of the voting rights
in it;

 

 

1.5.2                 is a member or shareholder of it and
has the right to appoint or remove a majority of its board of directors or
equivalent managing body;

 

1.5.3                 is a member or shareholder of it and
controls alone, pursuant to an agreement with other shareholders or members, a
majority of the voting rights in it; or

 

1.5.4                 has the right to exercise a dominant
influence over it, for example by having the right to give directions with
respect to its operating and financial policies, with which directions its
directors are obliged to comply.

 

1.6                            Schedules etc.

 

References to this Agreement shall
include any Recitals and Schedules to it and references to Clauses and
Schedules are to Clauses of, and Schedules to, this Agreement. References to
paragraphs and Parts are to paragraphs and Parts of the Schedules.

 

1.7                            Information

 

References to books, records or
other information mean books, records or other information in any form
including paper, electronically stored data, magnetic media, film and
microfilm.

 

1.8                            Currency Conversion

 

Any amount to be converted from
one currency into another currency for the purposes of this Agreement shall be
converted into an equivalent amount at the Conversion Rate prevailing at the
Relevant Date. For the purposes of this Clause:

 

“Conversion
Rate” means the spot closing mid-point rate for a transaction
between the two currencies in question on the date immediately preceding the
Relevant Date as quoted by the Financial Times, London edition or, if no such
rate is quoted on that date, on the preceding date on which such rates are
quoted;

 

“Relevant
Date” means, save as otherwise provided in this Agreement, the date
on which a payment or an assessment is to be made, save that, for the following
purposes, the date shall mean:

 

(i)                                 for the purposes of Clause 5.1 (The
Sellers’ Obligations in Relation to the Conduct of the Group), the date of this
Agreement;

 

(ii)                              for the purposes of Clause 9
(Limitation of Sellers’ Liability), the date a claim is made in accordance with
Clause 9.1; and

 

(iii)                           for the purposes of Schedule 7
(Warranties given under Clause 8.1), the date at which the relevant Warranty is
expressed to be true and accurate.

 

1.9                            Rights of the Seller and the Purchaser

 

1.9.1                   The Seller and the Relevant Sellers
agree that where any right is given to a Seller under this Agreement, such right
shall be exercisable exclusively by VIA Inc and any such exercise shall be
binding on the Relevant Sellers.

 

1.9.2                   The Purchaser and the Relevant
Purchasers agree that where any right is given to a Purchaser under this
Agreement, such right shall be exercisable exclusively by the Purchaser and any
such exercise shall be binding on the Relevant Purchasers.

 

 

1.10                     Joint
and Several Liability

 

1.10.1            The obligations of the Sellers under
this Agreement shall be joint and several.

 

1.10.2            The obligations of the Purchasers under
this Agreement shall be joint and several.

 

2                                      Agreement to Sell the Group

 

2.1                            Sale and Purchase of the Group

 

On and subject to the terms of
this Agreement and the Local Transfer Documents:

 

2.1.1                   the Relevant Sellers (each as to the Shares
or VIA Operations set out against its name in Schedule 1) agree to sell,
and

 

2.1.2                   the Relevant Purchasers agree (each as
to the Shares or VIA Operations set out against its name in Schedule 1) to
purchase,

 

the whole of the Group as a going
concern.

 

2.2                            Sale of the Shares

 

2.2.1                   The Shares shall be sold free from
Encumbrances and together with all rights and advantages attaching to them as
at the date of this Agreement (including, without limitation, the right to
receive all dividends or distributions declared, made or paid on or after
Closing).

 

2.2.2                   The Relevant Sellers shall procure that
on or prior to Closing any and all rights of pre-emption over the Shares are
waived irrevocably by the persons entitled thereto.

 

2.3                            Sale of the VIA Operations

 

2.3.1                   There shall be as the Purchaser may
elect: (a) transferred to such Group Company with effect from Closing or (b) included
in the sale of the VIA Operations under this Agreement or, where relevant, the
Local Transfer Documents, which shall be sold free from Encumbrances except for
Permitted Encumbrances:

 

(i)                                the Business Intellectual Property;

 

(ii)                             the Goodwill;

 

(iii)                          the Moveable Assets;

 

(iv)                         the rights of the Sellers arising under
the Contracts (on the terms set out in Schedule 3);

 

(v)                            the benefit (so far as the same can
lawfully be assigned or transferred to the Relevant Purchasers) of the Claims;

 

(vi)                         the benefit (so far as the same can
lawfully be assigned or transferred to the Relevant Purchasers) of any claim
under an insurance policy to the extent such claim relates exclusively to any
Business Asset or Assumed Liability.

 

2.3.2                   Subject to Clause 2.3.3, with effect
from Closing the Relevant Sellers agree to transfer (to the extent they are
able so to do) and the Relevant Purchaser or such Group Company as the Relevant
Purchasers may elect, agrees to accept the

 

 

transfer of, and to assume, duly
and punctually pay, satisfy, discharge, perform or fulfil, all Liabilities
incurred by the Relevant Sellers in relation to the Relevant Employees (in
accordance with and subject to the provisions of Schedule 4) and the
Contracts. The Relevant Sellers agree with the Relevant Purchasers that such
Liabilities shall be transferred to and assumed by the Relevant Purchasers or a
member of the Purchasers’ Group (including the Group Companies) so that the
Relevant Purchasers shall have such Liabilities (so far as the same can be
lawfully transferred) and so that the Relevant Purchasers or the Group Company,
as the case may be, shall have and be entitled to the benefit of the same
rights, powers, remedies, claims, defences, obligations and conditions
(including, without limitation, rights of set-off and counterclaim) as the
Relevant Sellers enjoyed.

 

2.3.3                   Clause 2.3.2 shall not apply to, and
the Relevant Purchasers shall not be obliged to, and the Relevant Sellers shall
procure that no Group Company shall, accept the transfer of and to assume, duly
and punctually pay, satisfy, discharge, perform or fulfil:

 

(i)                                any Liability of the Relevant Sellers
or the VIA Group falling due for performance, or which should have been
performed, prior to Closing; and

 

(ii)                             any Liability of the Relevant Sellers
or the VIA Group except for the Liabilities referred to in Clause 2.3.2.

 

2.4                            Relevant Employees

 

The provisions of Schedule 4
shall apply in respect of the Relevant Employees.

 

2.5                            Local Transfer Documents

 

2.5.1                   On Closing, the Relevant Sellers and
the Relevant Purchasers shall execute such agreements, transfers, conveyances
and other documents (subject to the relevant local law and otherwise as may be
agreed between the Seller and the Purchaser) to implement the transfer of (i) the
Shares and (ii) the VIA Operations on Closing (the “Local Transfer Documents” and each, a “Local Transfer Document”).

 

2.5.2                   To the extent that the provisions of a
Local Transfer Document are inconsistent with or (except to the extent they
implement a transfer in accordance with this Agreement) additional to the
provisions of this Agreement:

 

(i)                                the provisions of this Agreement shall
prevail; and

 

(ii)                             so far as permissible under the laws of
the relevant jurisdiction, the Seller and the Purchaser shall procure that the
provisions of the relevant Local Transfer Document are adjusted, to the extent
necessary to give effect to the provisions of this Agreement or, to the extent
this is not permissible, the Seller shall indemnify the Purchaser against all
Losses suffered by the Relevant Purchasers or, as the case may be, the
Purchaser shall indemnify the Sellers against all Losses suffered by the Relevant
Sellers, in either case through or arising from the inconsistency between the
Local Transfer Document and the Agreement or the additional provisions (except
to the extent they implement a transfer in accordance with this Agreement).

 

2.5.3                   No Seller shall bring any claim against
the Relevant Purchasers in respect of or based upon the Local Transfer
Documents save to the extent necessary to

 

 

implement any transfer of the
Shares or VIA Operations in accordance with this Agreement.

 

2.5.4                   No Purchaser shall bring any claim
against the Relevant Sellers in respect of or based upon the Local Transfer
Documents save to the extent necessary to implement any transfer of the Shares
or VIA Operations in accordance with this Agreement.

 

3                                      Consideration

 

3.1                            Amount

 

The aggregate consideration for
the purchase of the Group under this Agreement and the Local Transfer Documents
shall be an amount in cash equal to the aggregate of:

 

(i)                                   $26,400,000;

 

minus

 

(ii)                                the Cashflow Adjustment Amount

 

(such aggregate amount being the “Purchase Price”).

 

3.2                            Allocation of Purchase Price

 

The parties shall co-operate in
good faith prior to Closing to allocate the consideration between the companies
and Business Assets being acquired with a view to ensuring that such allocation
is made in a mutually beneficial manner.

 

3.3                            VAT

 

The Seller and Purchaser agree
that the Purchase Price is exclusive of VAT. If any VAT is found to be
chargeable in respect of this Agreement, it shall be payable in addition to the
Purchase Price, against delivery of a valid VAT invoice (or equivalent, if
any), where appropriate, in respect of which the provisions of Schedule 5
shall apply.

 

3.4                            Reduction of the Purchase Price

 

3.4.1                   If any payment is made by the Relevant
Sellers to the Relevant Purchasers in respect of any claim for any breach of
this Agreement or any Local Transfer Document or pursuant to an indemnity under
this Agreement, the payment shall be made by way of adjustment of the
consideration paid by the Relevant Purchasers for the particular category of
Business Asset or Shares (if any) to which the payment and/or claim relates
under this Agreement and the Purchase Price shall be deemed to be reduced by
the amount of such payment.

 

3.4.2                   If:

 

(i)                                the payment and/or claim relates to
more than one category of Business Asset or Shares, it shall be allocated in a
manner which reflects the impact of the matter to which the payment and/or
claim relates, failing which it shall be allocated rateably to the relevant
Business Assets or Shares by reference to the proportions in which the Purchase
Price is allocated in accordance with Clause 3.2; or

 

 

(ii)                             the payment and/or claim relates to no
particular category of Business Asset or Shares, it shall be allocated rateably
to all Business Assets and Shares by reference to the proportions in which the
Purchase Price is allocated in accordance with Clause 3.2,

 

and in each case the Purchase
Price shall be deemed to have been reduced by the amount of such payment.

 

4                                      Conditions

 

4.1                            Conditions Precedent

 

The agreement to purchase and sell
the Group contained in Clause 2.1 is conditional upon the approval of the VIA
Stockholders in accordance with s271 of the Delaware General Corporation Law.

 

4.2                            Responsibility for Satisfaction

 

VIA Inc shall use its reasonable
endeavours to ensure the satisfaction of the condition set out in Clause 4.1 as
soon as possible and shall as soon as reasonably practical following the date
of this Agreement file requisite proxy materials with the US Securities and
Exchange Commission (“SEC”) and
proceed to a vote of VIA Shareholders, such vote to take place no later than
31 August 2005 and, subject to the provisions of Clause 5.6, VIA Inc
Board’s recommendation that VIA Shareholders approve the transactions
contemplated by this Agreement shall be included in the materials sent to VIA
Shareholders in relation to such vote. The Purchaser shall provide a reasonable
level of cooperation to VIA Inc in connection with the preparation of the proxy
statement and shall provide the Seller with such information as it may
reasonably request from time to time.

 

4.3                            Non-Satisfaction/Waiver

 

4.3.1                   VIA Inc shall give notice to the
Purchaser of the satisfaction of the condition in Clause 4.1 within one
Business Day of becoming aware of the same.

 

4.3.2                   VIA Inc may at any time, to the extent
permitted by law, waive in whole or in part and conditionally or
unconditionally the condition set out in Clause 4.1 by notice in writing to the
Purchaser.

 

4.3.3                   If the condition in Clause 4.1 is not
satisfied or waived on or before the Back Stop Date, save as expressly
provided, this Agreement (other than Clauses 1, 5.5, 11 and 12.2 to 12.15)
shall lapse and no party shall have any claim against any other under it, save
for any claim arising from breach of the obligation contained in Clause 4.2,
provided that the terms of Clause 5.5.2 shall apply and the amounts referred to
in Clauses 5.5.2 (x), (y) and (z) shall become payable to the Purchasers.

 

5                                      Pre-Closing

 

5.1                            The Sellers’ Obligations in Relation to the Conduct of the Group

 

Except (i) as may be required by law, (ii) as
may be required by any securities exchange or regulatory or governmental body
to which either of the Sellers or any Group Company is subject (including
without limitation, Euronext, the SEC or NASDAQ), or (iii) as may be
required under this Agreement, or, in the case of sub-clauses 5.1.1, 5.1.4(i),
5.1.4(ii),

 

 

5.1.4(iii) and 5.1.4(vii) consistent
with the Working Capital Projections between the date of this Agreement and
Closing, in relation to the Group, the Sellers and the Group Companies:

 

5.1.1                   shall carry on the business of the
Group as a going concern in the ordinary and
usual course as carried on since 1 January 2005;

 

5.1.2                   shall carry on the business of the
Group consistent with the Working Capital Projections, save in so far as agreed
in writing by the Purchaser;

 

5.1.3                   shall maintain in force all existing
insurance policies in all material respects on the same terms and similar level
of cover prevailing at the date of this Agreement for the benefit of the Group
Companies and the Sellers; and

 

5.1.4                   without prejudice to the generality of
Clause 5.1.1, shall not without the prior written consent of the Purchaser
(such consent not to be unreasonably withheld delayed or conditioned) do any of
the following in relation to any of the Group Companies or the VIA Operations:

 

(i)                                enter into any agreement or incur any
commitment involving any capital expenditure in excess of $50,000 per item and
$1,000,000 in aggregate save in respect of agreements of a revenue nature, in
which case no such limit or consent shall apply, in each case exclusive of VAT;

 

(ii)                             enter into or amend any agreement or
commitment (save in respect of agreements of a revenue nature) (a) which
is not capable of being terminated without compensation at any time with three
months’ notice or less or that is not in the ordinary and usual course of business and (b) which involves or may
involve total annual expenditure in excess of $100,000 per agreement or
commitment and $1,000,000 in the aggregate, exclusive of VAT;

 

(iii)                          enter into a single transaction or a
series of transactions (whether related or not and whether voluntary or
involuntary) to sell, lease, transfer or otherwise dispose of any asset
(including any present or future revenues and rights of every description),
other than a Permitted Disposal;

 

(iv)                         create any Encumbrance over any of its
assets except for a Permitted Encumbrance;

 

(v)                            enter into any new Finance Leasing
Arrangement;

 

(vi)                         make any loan, or provide any form of
credit or financial accommodation, to any other person other than in the
ordinary course of the business of the relevant Group Company;

 

(vii)                      other than the late or non-payment of
monies owing to the extent consistent with the practice adopted by the Group
since 1 January 2005 breach any of its material contractual or other
obligations with a person other than another Group Company;

 

(viii)                   acquire or agree to acquire any share,
shares or other interest in any company, partnership or other venture;

 

 

(ix)                           incur or assume any Financial
Indebtedness other than pursuant to the Facility Agreement or equipment leases
entered into prior to the date of this Agreement;

 

(x)                              create, allot or issue, or grant an
option to subscribe for, any share capital of any Group Company;

 

(xi)                           repay, redeem or repurchase any share
capital of any Group Company;

 

(xii)                        declare, make or pay any dividend or
other distribution to shareholders;

 

(xiii)                     make any application of funds advanced
to it directly or indirectly by Clara.net Holdings under the Facility Agreement
other than a Permitted Application;

 

(xiv)                    save as required by law:

 

(a)                        make any amendment to the terms and
conditions of employment (including, without limitation, remuneration and
pension entitlements and other benefits) of any Senior Employee;

 

(b)                       provide or agree to provide any
gratuitous payment or benefit to any Senior Employee or any of his dependants
otherwise than in the ordinary course of business;

 

(c)                        other than in the case of gross
misconduct, dismiss, remove or redeploy any Senior Employee; or

 

(d)                       engage or appoint any additional Senior
Employee;

 

(xv)                       save as expressly provided by the
Facility Agreement, enter into any guarantee, indemnity or other agreement to
secure any obligation of a third party other than on arm’s length terms or in
the ordinary and usual course of business of that Group Company; and

 

(xvi)                    make any change to its accounting
practices or policies (except as required by generally accepted accounting
principles) or amend its constitutional documents;

 

(xvii)                 take any step or commit any act which
might materially affect the adequacy and sufficiency of the Group’s Computer
Systems;

 

5.1.5                   shall comply with the provisions of Schedule 4,
paragraph 1.

 

5.2                            Sellers’ notification requirements

 

From the date of this Agreement
until Closing, the Seller shall notify the Purchaser forthwith upon becoming
aware that any of the following has occurred, is reasonably likely to occur or
has been threatened in writing:

 

5.2.1                   any actual or potential claim or
proceeding against either of the Sellers or any Group Company in excess of
$50,000, which had not been disclosed in the Data Room on or before 7 April 2005:

 

5.2.2                   any material deviation in the cash
flows of any Group Company from the Working Capital Projections, a material
deviation for these purposes shall be deemed to be a deviation in cash flow of
the relevant Group Company in any monthly period exceeding 20 per cent.;

 

 

5.2.3                   any cancellation (or non-renewal) of
any customer contract of a Group Company exceeding an annual value of $50,000,
which cancellation (or non-renewal) occurs on or after 7 April 2005;

 

5.2.4                   any Insolvency Proceedings occur in
respect of either of the Sellers or any Group Company;

 

5.2.5                   a material breach of any undertaking
set out in Clause 5.1; and

 

5.2.6                   the occurrence of any fact or matter
which would have resulted in a material breach of any Warranty had the fact or
matter been known to Matt Nydell, Ray Walsh or Joe Correia at the Benchmark
Date.

 

5.3                            The Sellers’ obligations in relation to inter-company financing

 

5.3.1                   The Sellers undertake that, between the
date of this Agreement and Closing, they will:

 

(i)                                procure that there is no Cashflow in
relation to any Group Company other than as set out in the accounting books and
records of the relevant Group Company or by such other means to which the
Purchaser has consented in advance, such consent to be in writing and not to be
unreasonably withheld or delayed or conditioned;

 

(ii)                             within five Business Days of the first
day of each calendar month until Closing notify the Purchaser of the aggregate
amount of any Cashflow, together with such details of the individual items of
Cashflow as the Purchaser may reasonably request, which has occurred between
the date of this Agreement and the close of business on the Friday prior to the
relevant notification; and

 

(iii)                          within five Business Days of the first
day of each calendar month until Closing provide to the Purchaser a schedule of
all creditor and debtor balances of each Group Company, together with ageing
analysis.

 

5.4                            Other Sellers’ Obligations Prior to Closing

 

5.4.1                   Without prejudice to the generality of
Clause 5.1, prior to Closing the Sellers shall, and shall procure that the
relevant Group Companies shall allow the Purchaser and its agents and advisers,
upon reasonable prior notice, reasonable access during customary business hours
and accompanied by a representative of one of the Sellers, if the Sellers may
reasonably require, to each Employee and to each Property, and to take at the
Purchaser’s expense, copies of, the books, records and documents of or relating
in whole or in part to the Group.

 

5.4.2                   The Sellers shall procure that the
share capital of VIA NET.WORKS Portugal - Tecnologies Da Informação, S.A. is cancelled
and reissued in the form of 117 bonds of 1,000 shares €5 each to VIA NET.WORKS
Europe Holding B.V. as soon practicable and in any event prior to Closing.

 

5.4.3                   The Sellers undertake to use all
reasonable endeavours to procure that the appointment of Fred Seibl as managing
director of PSINet Datacenter Germany GmbH in place of Eduard Seligmann-Schürch
is effected and recorded with the relevant commercial registry as soon as
practicable.

 

 

5.4.4                   The Sellers undertake to use their
reasonable endeavours to procure that the lease for the Schipol Netherlands
headquarters is novated from VIA NET.WORKS. Nederland B.V. (“VIA Nederland”) to a member of the VIA
Group prior to Closing and that VIA Nederland is released from all Liabilities
in respect of such lease. To the extent such novation is not completed prior to
Closing, on Closing the Purchaser shall pay into an escrow account held by the
Purchasers’ Lawyers and the Sellers’ Lawyers, as part of the Payment on Closing
pursuant to 6.3.1, an amount equal to all Liabilities accruing to the expiry of
such lease less amounts currently held in a blocked account by VIA Nederland as
security for the lease (“Schipol Deposit”)
(the “Schipol Escrow Amount”), on
terms that the amount paid into the Schipol Escrow Account shall be applied in
making any payments due to the Relevant Purchasers or Group Companies pursuant
to Clause 7.2(iii) and, subject to any such payments having been satisfied
in full, the balance shall be released to VIA Inc upon the novation of such
lease becoming effective and VIA Nederland being released from all Liabilities
in respect of such lease. Upon payment of such balance to VIA Inc, the Relevant
Purchasers shall procure that they shall cause VIA Nederland, or should VIA
Nederland be incapable of doing so, a Relevant Purchaser, to pay the amount of
the Schipol Deposit.

 

5.4.5                   The Sellers undertake to pay, or
procure that the Group Companies pay, prior to or at the Closing Date all
Employee bonuses due in respect of 2004, including all Taxation in relation
thereto or, to the extent that such payments are not made on or prior to
Closing, the provisions of Clause 6.3.1(v) shall apply.

 

5.4.6                   The Sellers shall deliver to the
Purchaser within 5 Business Days of the last day of each calendar month a
report of historic cash flow for the Group Companies and the Sellers for that
month, in the same format and with the same level of detail as the Working
Capital Projections, and, at the reasonable request of the Purchasers, such
additional information or explanation in respect of the report as the Sellers
are reasonably able to provide.

 

5.5                            Termination and Deposit

 

5.5.1                   The Purchaser shall be entitled, prior
to Closing, by notice in writing to the Seller, to terminate this Agreement
(other than Clauses 1, 5.5.2, 5.5.3, 11 and 12.2 to 12.15) in the event of:

 

(i)                                any actual or pending claims or
proceedings against any of the Sellers or any Group Company in excess of
$50,000, which had not been disclosed in the Data Room on or before 7 April 2005,
and which exceed $1,000,000 in the aggregate;

 

(ii)                             any increase in cash outflow of the VIA
Group and the Group Companies taken as a whole measured over the period from 1 May 2005
to the end of the most recently completed calendar month as compared to the
Working Capital Projections for the equivalent period exceeding $1,250,000;

 

(iii)                          during any period commencing on 7 April 2005,
the aggregate annualised value of customer contracts of the Group Companies
save for the contract between Alfa Accountants and PSINet Netherlands dated 27 January 2005
cancelled (or not renewed) exceeding the aggregate annualised value of new
contracts signed by customers (excluding renewals) (in each case

 

 

counting only customer contracts
exceeding an annual value of $50,000) by an amount in excess of $1,800,000;

 

(iv)                         any of the Sellers or any Group Company
enters into Insolvency Proceedings;

 

(v)                            breach(es) of any undertaking set out
in Clause 5.1, where the aggregate Losses to the Purchasers arising from such
breach(es) would exceed $1,000,000;

 

(vi)                         breach(es) known to Matt Nydell, Ray
Walsh or Joe Correia, of any Warranties (other than with respect to any actual
or pending claims or proceedings falling within (i) above) where the
aggregate Loss to the Purchasers resulting from such breach(es) would exceed
$1,000,000; and

 

(vii)                      a material breach of any Finance
Document by either Seller, save for a breach of Clause 13 (Representations) or Clause 14 (Operational Undertakings) of the Facility
Agreement that would not also constitute an event listed in paragraph (i) to
(vi) above.

 

5.5.2                   In the event of:

 

(i)                                a termination by the Purchaser pursuant
to this Clause 5.5 or Clause 6.7.1; or

 

(ii)                             a termination by the Purchaser by
notice in writing to the Sellers following the earlier of:

 

(a)                        the condition set out in Clause 4.1 not
being satisfied in time to allow Closing to take place prior to the Back Stop
Date; and

 

(b)                       the Sellers failing, in time for the
meeting to take place no later than 31 August 2005:

 

(I)                                 to convene a meeting of VIA
Shareholders to approve the transaction provided for by this Agreement; or

 

(II)                             to send to VIA Shareholders materials
containing a recommendation of the VIA Inc Board in the Agreed Terms that the
transactions provided for by this Agreement be approved or, having sent such a
recommendation, the VIA Inc Board adversely modifies or changes its
recommendation with respect to such transaction.

 

the Sellers shall pay to the
Purchaser in same day funds:

 

(x)                              within two Business Days of receipt of
the termination notice (or, in the case of Clause 5.5.2(x)(b) below,
within two Business Days of being notified of the relevant amount):

 

(a)                        a break fee in the amount of $500,000;
and

 

(b)                       the Purchaser’s actual and incurred
costs and expenses (including legal fees) in connection with the transactions
provided for by this Agreement up to a maximum amount of $250,000;

 

 

(y)                            within 20 days of receipt of the
termination notice, the Net Deposit Amount and accrued interest on the Net
Deposit Amount at a rate of 8.00 per cent. per annum, compounded daily; and

 

(z)                              within 20 days of written demand from
Clara.net Holdings in accordance with the terms of the Facility Agreement, all
amounts outstanding under the terms thereof.

 

5.5.3                   If the Net Deposit Amount has not
previously been returned to the Purchaser pursuant to Clause 5.5.2 above and if
the Purchaser has not previously forfeited the Deposit pursuant to Clause 5.5.4
below, the Net Deposit Amount and accrued interest on the Net Deposit Amount at
a rate of 8.00 per cent. per annum, compounded daily, shall be returned to the
Purchaser within 20 days of the Back Stop Date if Closing does not occur on or
prior to the Back Stop Date.

 

5.5.4                   In the event of a material breach by
Clara.net Holdings of the Facility Agreement or failure by the Purchasers to
proceed to Closing in breach of this Agreement), the Sellers shall be entitled,
at any time prior to Closing, by notice in writing to the Purchaser, to
terminate this Agreement (other than Clauses 1, 5.5, 11 and 12.2 to 12.15), and
upon receiving such notice (as applicable) or following a termination of this
Agreement by the Sellers pursuant to Clause 6.7.1:

 

(i)                                the Purchaser shall pay to the Sellers
in same day funds within two Business Days a break fee in the amount of
$500,000;

 

(ii)                             the Purchaser shall forfeit the
Deposit; and

 

(iii)                          the Sellers shall pay to Clara.net
Holdings within 40 days of written demand from Clara.net Holdings in accordance
with the terms of the Facility Agreement, all amounts outstanding under the
terms thereof.

 

5.5.5                   In the event of a termination pursuant
to Clause 5.5.2 and following the receipt by the Relevant Purchaser of the
amounts set out in Clauses 5.5.2(x), (y) and (z) the Sellers shall procure that
£1,000,000 is paid promptly to the joint escrow account maintained by Eversheds
LLP and Lewis Silkin to be held on the terms set out in Schedule 7 to the
UK Sale Agreement, or as the Purchaser and the Seller may otherwise agree, and
the release of VIA Inc from all obligations and claims under the UK Sale
Agreement pursuant to Clause 6.6.3 shall be rescinded with effect from the date
hereof as if such release had never been made.

 

5.5.6                   In the event of a termination pursuant
to Clauses 5.5.4 the Purchaser shall procure that £1,000,000 is paid promptly
to the joint escrow account maintained by Eversheds LLP and Lewis Silkin to be
held on the terms set out in Schedule 7 to the UK Sale Agreement, or as
the Purchaser and the Seller may otherwise agree, and the release of VIA Inc
from all obligations and claims under the UK Sale Agreement pursuant to Clause
6.6.3 shall be rescinded with effect from the date hereof as if such release
had never been made.

 

5.6                            Exclusivity

 

The Sellers undertake that:

 

5.6.1                   it, and members of the VIA Group and
the Group Companies and its or their respective agents, shall not make any
initial or further approach to, or enter into or continue negotiations with,
any other person with a view to a Competing Proposal

 

 

taking place, provided that the
VIA Inc Board or its agents may negotiate with a Third Party in relation to a
Competing Proposal if refusing to do so would, in the reasonable determination
of the VIA Inc Board based on advice of external counsel of the Sellers, be
reasonably likely to constitute a breach of its fiduciary duties to VIA
Shareholders;

 

5.6.2                   it shall not enter into any binding
agreement in relation to a Competing Proposal and the VIA Inc Board shall not
recommend a Competing Proposal to VIA Shareholders unless:

 

(i)                                to the extent permitted by any duties
of confidentiality or legal obligations to which the Sellers were subject on or
prior to 10 April 2005, the Purchasers have first been given the
opportunity, including reasonable time in the circumstances, to at least match,
to the reasonable satisfaction of the VIA Inc Board, any such Competing
Proposal; and

 

(ii)                             the VIA Inc Board has determined that
the terms of the Competing Proposal are more favourable to VIA Shareholders,
taking into account all relevant factors, including conditions and likelihood
of closing.

 

Provided that for the avoidance of
doubt VIA Inc is under no obligation to inform the Purchasers of any
unsolicited offers it may receive in relation to any Competing Proposal save as
required in order for the Seller to comply with Clause 5.6.2(i).

 

5.6.3                   If the VIA Board accepts or recommends
a Competing Proposal to VIA Shareholders, the Sellers or the Purchaser may
terminate this Agreement (other than Clauses 1, 5.5, 11, 12.2 to 12.15) and no
party shall have any claim against any other under this Agreement save as
expressly provided by Clause 5.5.5.

 

5.7                            Disposal Plans

 

The parties agree to develop a
disposal plan relating to certain of the Group Companies.

 

6                                      Closing

 

6.1                            Date and Place

 

Subject to Clause 4, Closing shall
take place at such time and place and on such date as the parties may agree
being no earlier than five Business Days following notification by the Seller
of satisfaction of the condition set out in Clause 4.1 and provided that such
date shall not be a date later than the seventh day of any calendar month or at
such other location, time or date as may be agreed between the Purchaser and
the Seller.

 

6.2                            Closing Events

 

On Closing, the parties shall
comply with their respective obligations specified in Schedule 6. The
Seller may waive some or all of the obligations of the Purchasers as set out in
Schedule 6 and the Purchaser may waive some or all of the obligations of
the Sellers as set out in Schedule 6.

 

6.3                            Payment on Closing

 

6.3.1                   On Closing the Relevant Purchasers
shall pay an amount in cash to the Relevant Sellers which is equal to the
aggregate of:

 

 

(i)                                the Purchase Price;

 

minus

 

(ii)                             all amounts, including accrued
interest, payable or repayable to Clara.net Holdings under the Facility
Agreement (excluding the Arrangement Fee (as defined therein) which Clara.net
Holdings hereby waives all rights to on Closing);

 

minus

 

(iii)                          the Net Deposit Amount;

 

minus

 

(iv)                         interest accrued on the Net Deposit
Amount at the rate of 8.00 per cent per annum, compounded daily;

 

minus

 

(v)                            the amount identified in the VIA Closing
Certificate

 

minus

 

(vi)                         to the extent that the VIA Nederland
lease is not novated prior to Closing pursuant to Clause 5.4.4, an amount equal
to the Schipol Escrow Amount, which amount shall be paid by the Purchaser to
the Purchaser’s Lawyers and the Seller’s Lawyers pursuant to Clause 5.4.4

 

6.4                            Cashflow

 

6.4.1                   By 5.00pm (London time) on the first
Business Day immediately following the Pre-Closing Cut-Off Date, VIA Inc shall
notify the Purchaser of the aggregate amount of any Cashflow which has occurred
between the Benchmark Date and the close of business on the Pre-Closing Cut-Off
Date and shall as soon as reasonably practicable thereafter provide to the
Purchaser bank statements for each bank account of each member of the VIA Group
as at the close of business as at the Pre-Closing Cut-Off Date.

 

6.4.2                   The Sellers shall procure that no
Cashflow takes place after the Pre-Closing Cut-Off Date without the prior
written consent of the Purchaser.

 

6.5                            Intra-Group Balances

 

The parties hereby undertake to perform
(or procure the performance of) such further acts and execute (or procure the
execution of) such further documents, as may reasonably be necessary to carry
out and give full effect to the parties’ intention that, save as expressly
provided by or pursuant to this Agreement, at Closing no sums shall be owed by
the VIA Group to the Group Companies or vice versa and any sums owing by the
VIA Group to the Group Companies or vice versa at Closing or thereafter shall
be assigned, subordinated, forgiven or otherwise written off or capitalised by
the relevant entity in each case without any of the Purchasers, the Sellers or
the Group Companies incurring any cash cost. The Parties shall co-operate in
good faith (or procure such co-operation) with a view to ensuring that such
action is taken in a mutually beneficial tax efficient manner and in taking
such action the Sellers shall procure that the relevant members of the VIA
Group use

 

 

applicable reliefs and any
available accumulated tax losses to the extent reasonably agreed by VIA Inc.

 

6.6                            Mutual Release

 

6.6.1                   The Sellers undertake that on and after
Closing no member of the VIA Group will except as expressly permitted under the
terms of this Agreement make any claim on any Group Company or any of its
officers or directors in respect of any transactions, acts or omissions
occurring before Closing (and, if requested by the Purchaser, VIA Inc shall or
shall procure that the relevant member of the VIA Group shall waive any such
claim) such that no Group Company shall have any Liability to any member of the
VIA Group save as otherwise provided by this Agreement.

 

6.6.2                   The Purchasers undertake that on and
after Closing no Group Company will (except as expressly permitted under the
terms of this Agreement) make any claim against any member of the VIA Group or
any of its officers or directors in respect of any transactions, act or
omissions occurring before Closing (and, if requested by VIA Inc, the
Purchasers shall procure that the relevant Group Companies shall waive any such
claim) such that no member of the VIA Group shall have any Liability to any
Group Company save as otherwise provided by this Agreement.

 

6.6.3                   The Purchasers hereby agree that with
effect from the date hereof they have no claim of any nature whatsoever
outstanding against VIA Inc or any member of the VIA Group under the UK Sale
Agreement and to the extent that any claim or obligation exists or may exist,
the Purchasers hereby waive and release VIA Inc and each member of the VIA
Group from all and any such claims and obligations.

 

6.6.4                   Confirmation of no claims

 

(i)                                The Sellers confirm that with effect
from Closing each of the Sellers and each of the Group Companies shall have no
claim (whether in respect of any breach of contract, compensation for loss of
office or monies due to it or on any account whatsoever) outstanding against
any of those directors of the Group Companies who are to resign with effect
from Closing.

 

(ii)                             To the extent that any such claim or
obligation exists or may exist in relation to any fact, matter or circumstance
arising on or before Closing, the Sellers (in relation to the period from the
date of this Agreement until Closing) and the Purchasers (from Closing) shall,
other than in the case of fraud, procure the waiver by each of the Group
Companies of such claim or obligation and, other than in the case of fraud,
shall procure the release of such directors of the Group Companies from any
liability whatsoever in respect of such claim or obligation.

 

6.7                            Breach of Closing Obligations

 

If any party fails to comply with
any material obligation in Schedule 6 in relation to Closing (and for the
avoidance of doubt the Sellers’ obligation under paragraph 1.1.4 of Schedule 6
is a material obligation), the Purchaser, in the case of non-compliance by the
Sellers (which has not been remedied to the reasonable satisfaction of the
Purchaser within 5 Business Days), or the Seller, in the case of
non-compliance by the Purchasers (which has not been remedied to the reasonable
satisfaction of the Sellers within 5 Business 

 

 

Days), shall be entitled by
written notice to the Sellers or the Purchasers, as the case may be:

 

6.7.1                   to terminate this Agreement (other than
Clauses 1, 5.5, 11 and 12.2 to 12.15) without liability on its part or on the
part of those on whose behalf notice is served whereupon, (i) in the case
of such non-compliance by any of the Sellers, the amounts referred to in
Clauses 5.5.2(x), (y) and (z) shall become payable or (ii) in the case of
such non-compliance by any of the Purchasers, the amounts referred to in Clause
5.5.4 shall become payable; or

 

6.7.2                   to effect Closing so far as practicable
having regard to the defaults which have occurred provided that the Relevant
Sellers shall not be required to sell the Shares and the VIA Operations unless
all of the Shares and the VIA Operations are purchased simultaneously; or

 

6.7.3                   to fix a new date for Closing (not
being more than 20 Business Days after the agreed date for Closing) in which
case the provisions of Schedule 6 shall apply to Closing as so deferred
but provided such deferral may only occur once.

 

6.8                            Books and Records

 

The Purchasers shall and shall
procure that the Group Companies shall, retain for a period of twelve months
from Closing or such longer period as is necessary for the Sellers to close
their books and file their tax returns for 2005 and allow the Sellers or the
Sellers’ representatives to have reasonable access (at all reasonable times
during normal business hours and on reasonable advance notice) to (and at the
Sellers’ expense, copies of) the books, records and documents relating to the
Group, to the extent that they relate to the period prior to Closing and to the
extent reasonably required by the Sellers to comply with any relevant law or
regulations or in connection with the preparation and agreement of any
accounting, tax or other records.

 

7                                      Post-Closing Obligations

 

7.1                            Indemnities

 

7.1.1                   Indemnity by Relevant
Purchasers against Assumed Liabilities

 

The Relevant Purchasers shall
indemnify and keep indemnified the Relevant Sellers against:

 

(i)                                all Assumed Liabilities and any
Liability of the Relevant Purchasers and/or any other person incurred in the
course of carrying on the business of the Group after Closing including, for
the avoidance of doubt, any such Liability which is or is deemed to be or
becomes a Liability of the Relevant Sellers by virtue of any applicable law;
and

 

(ii)                             any Losses which any of the Relevant
Sellers may suffer by reason of either of the Sellers taking any reasonable
action to avoid, resist or defend against any Liability referred to in Clause
7.1.1(i);

 

Provided that the Relevant
Purchasers shall not be liable under this Clause 7.1.1 to the extent the
Relevant Purchasers have a valid claim against the Relevant Sellers under this
Agreement in respect of the Liability in question.

 

 

7.1.2                   Indemnity by Relevant Sellers
against Excluded Liabilities

 

The Relevant Sellers shall
indemnify and keep indemnified the Relevant Purchasers against:

 

(i)                                any Liability of either of the Sellers
which is not an Assumed Liability including any such Liability which is deemed
to be, or becomes, a Liability of the Relevant Purchasers by virtue of any
applicable law and which is not otherwise assumed by the Relevant Purchasers
under this Agreement or any Local Transfer Document; and

 

(ii)                             any Losses which the Relevant
Purchasers may suffer by reason of either of the Purchasers taking any
reasonable action to avoid, resist or defend against any Liability referred to
in Clause 7.1.2(i).

 

Provided that the Relevant Sellers
shall not be liable under this Clause 7.1.2 to the extent that the Relevant
Sellers have a valid claim against the Relevant Purchasers under this Agreement
in respect of the Liability in question.

 

7.2                            Covenants in respect of certain matters

 

The Sellers shall indemnify and
keep indemnified the Relevant Purchasers and each Group Company against:

 

(i)                                 any Losses arising prior to the
Pre-Closing Cut-Off Date as a result of any Unidentified Cashflow to the extent
such Unidentified Cashflow would have resulted in a Cashflow Adjustment Amount
had it been identified pursuant to Clause 6.4.1;

 

(ii)                              any Losses arising after the
Pre-Closing Cut Off Date as a result of any Unidentified Cashflow;

 

(iii)                           all Losses of VIA Nederland incurred in
relation to the lease for the Schipol Netherlands headquarters and pending
completion of the novation of such lease pursuant to Clause 5.4.5 VIA Nederland
shall retain its rights in respect of the cash deposit securing the obligations
under such lease and the related guarantee; and

 

(iv)                          all Losses arising as a result of a
failure by the Sellers to comply with Clause 5.4.6 or paragraph 1.1.3 of Schedule 6.

 

7.3                            Conduct of Claims

 

7.3.1                   Assumed Liabilities

 

(i)                                If any of the Sellers becomes aware
after Closing of any claim against it which constitutes or may constitute an
Assumed Liability, the Seller in question shall as soon as reasonably
practicable (but in any event within such period as will afford the Relevant
Purchasers reasonable opportunity of requiring the Seller in question to lodge
a timely appeal) give written notice thereof to the Relevant Purchasers and
shall not admit, compromise, settle, discharge or otherwise deal with such
claim without the prior agreement of the Relevant Purchasers.

 

(ii)                             The Relevant Sellers shall take such
action as the Relevant Purchasers may reasonably request to avoid, dispute,
resist, appeal, compromise, defend or mitigate any claim which constitutes or
may constitute an

 

 

Assumed Liability subject to the
Relevant Sellers being indemnified and secured to their reasonable satisfaction
by the Relevant Purchasers against all Losses which may thereby be incurred. In
connection therewith the Relevant Sellers shall make or procure to be made
available to the Relevant Purchasers or their duly authorised agents on
reasonable notice during normal business hours all relevant books of account,
records and correspondence relating to the Group which have been retained by
the Relevant Sellers (and shall permit the Relevant Purchasers to take copies
thereof at the Relevant Purchasers’ expense) for the purposes of enabling the
Relevant Purchasers to ascertain or extract any information relevant to the
claim.

 

7.3.2                   Excluded Liabilities
etc.

 

(i)                                If the Relevant Purchasers become aware
after Closing of any claim which constitutes or may constitute an Excluded
Liability or which could give rise to a liability for a member of the
Purchasers’ Group in respect of which it is entitled to be indemnified by a
Relevant Seller, the Relevant Purchasers shall as soon as reasonably
practicable (but in any event within such period as will afford the Relevant
Sellers reasonable opportunity of requiring the Relevant Purchasers to lodge a
timely appeal) give written notice thereof to VIA Inc and shall not admit,
compromise, settle, discharge or otherwise deal with such claim without the
prior agreement of VIA Inc.

 

(ii)                             The Relevant Purchasers shall take such
action as VIA Inc may reasonably request to avoid, dispute, resist, appeal,
compromise, defend or mitigate any claim which constitutes or may constitute an
Excluded Liability or other liability in respect of which the Relevant
Purchasers are entitled to be indemnified subject to the Relevant Purchasers
being indemnified and secured to their reasonable satisfaction by the Relevant
Sellers against all Losses which may thereby be incurred. In connection
therewith the Relevant Purchasers shall make or procure to be made available to
the Relevant Sellers or their duly authorised agents on reasonable notice during
normal business hours all relevant books of account, records and correspondence
relating to the Group which are in the possession of the Relevant Purchasers
(and shall permit the Relevant Sellers to take copies thereof at the Relevant
Sellers’ expense) for the purposes of enabling the Relevant Sellers to
ascertain or extract any information relevant to the claim.

 

7.4                            Release of Guarantees etc.

 

The provisions of Schedule 9
shall apply.

 

7.5                            The Seller’s Continuing Obligations

 

Notwithstanding Closing, the
Sellers shall so far as reasonably practicable and for a period not exceeding
three months after Closing:

 

7.5.1                   procure that senior executives of VIA
Inc respond to inquiries and provide reasonable assistance and information as
they may reasonably require relating to the Group, its employees (including for
the avoidance of doubt, the Relevant Employees), customers and suppliers, its
current contracts and engagements and

 

 

its trade debtors
and trade creditors and pass on any trade enquiry which the Sellers receive,
provided that such requests do not impose a material burden on such individual’s
working time;

 

7.5.2                   subject to Schedule 5, retain or
procure the retention, for a reasonable period from Closing the books, records
and documents of the Group to the extent they relate to the Group for the
period prior to Closing and shall allow the Relevant Purchasers reasonable
access on reasonable prior written notice to such books, records and documents,
including the right to take copies at the Relevant Purchasers’ expense;

 

7.5.3                   in addition to the Sellers’ obligations
in Schedule 3, if any right or asset used in the business of the Group
immediately prior to Closing (other than any right or asset expressly excluded
from the sale under this Agreement) has not been transferred to the Relevant
Purchasers, transfer such right or asset (and any related liability which is an
Assumed Liability) to the extent legally possible and at the Relevant
Purchasers’ cost as soon as practicable to a member of the Purchasers’ Group
nominated by the Relevant Purchasers and reasonably acceptable to the Sellers.

 

7.6                            The Purchaser’s Continuing Obligations

 

Notwithstanding
Closing, the Purchaser shall so far as reasonably practicable and for a period
not exceeding six months after Closing:

 

7.6.1                   permit the Sellers’ staff to continue
to use, as currently configured, Microsoft Exchange e-mail server functionality
and storage capacity and, where applicable, network file and print server
functionality for the Schiphol, Netherlands’ Seller’s headquarters; and

 

7.6.2                   procure that the Group Companies
provide reasonable assistance and information as the Sellers may reasonably
require for the purpose of closing the Sellers’ financial books and filing its
final tax returns

 

provided that
nothing in this Clause 7.6 shall require the Purchasers or any Group Company to
incur external costs in relation thereto.

 

8                                      Warranties

 

8.1                            Sellers’ Warranties

 

8.1.1                   The Sellers warrant to the Relevant
Purchasers that the statements set out in Schedule 7 are true and accurate
as of the date of this Agreement.

 

8.1.2                   Each of the Warranties shall be
separate and independent and shall not be limited by reference to any other
paragraph of Schedule 7.

 

8.1.3                   Each Warranty, except for those set out
in paragraphs 1.1.1, 1.1.3 and 4.3 (title) and 15 (insolvency) in Schedule 7,
shall be deemed to be qualified by reference to the actual knowledge of Matt
Nydell, Ray Walsh and Joe Correia having made reasonable enquiries of the
managing directors and the finance directors of each of the Group Companies
with regard to the subject matter of the relevant Warranty.

 

8.2                            Sellers’ Disclosures

 

8.2.1                   The Warranties are subject to the
matters which are fully and fairly disclosed in this Agreement, the Disclosure
Letter or the Data Room provided that such matters are

 

 

disclosed in
sufficient detail to enable a reasonable purchaser to identify the nature of
the matter disclosed and provided that the Sellers are under no obligation to
have brought to the Relevant Purchasers’ attention any specific matter
documented in the Data Room. For the avoidance of doubt, the Purchasers
acknowledge that disclosure of a document in the Data Room shall not be
regarded as not fairly disclosed by reason of such document being written in a
language other than English.

 

8.2.2                   The parties agree that each document in
the Data Room shall be considered to be disclosed against each of the
Warranties.

 

8.3                            Updating of the Warranties to Closing

 

Subject to Clause
8.2, including without limitation the Disclosure Letter and the Data Room as
updated as at Closing, the Sellers further warrant to the Relevant Purchasers
that the Warranties will be true and accurate at Closing as if they had been
repeated at Closing by reference to the facts and circumstances then existing
and on the basis that any reference in the Warranties, whether express or
implied, to the date of this Agreement is substituted by a reference to the
Closing Date provided always that the Purchasers’ sole remedy for any breach of
any such Warranties shall be as set out in Clause 5.5.1.

 

8.4                            The Sellers’ Waiver of Rights against the Group

 

Save in the case
of fraud, the Sellers undertake to the Relevant Purchasers and to the Group
Companies and their respective directors, officers and agents and to the
Relevant Employees to waive any rights, remedies or claims which they may have
in respect of any misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by the Group Companies or their
respective directors, officers or agents or the Relevant Employees in
connection with assisting the Sellers in the giving of any Warranty or the
preparation of the Disclosure Letter.

 

8.5                            Relevant Purchasers’ Warranties

 

8.5.1                   The Relevant Purchasers warrant to the
Sellers that each of the following warranties (the “Relevant Purchasers’ Warranties”) is true and accurate in all
respects on the date of this Agreement and shall continue to remain true and
accurate in all respects up to and including the Closing Date as if they had
been repeated at Closing by reference to the facts and circumstances then
existing and on the basis that any reference in the Relevant Purchasers’
Warranties, whether express or implied, to the date of this Agreement is
substituted by a reference to the Closing Date:

 

(i)                                  Claranet Group Limited is duly organised, validly
existing and duly incorporated under the laws of England and Wales;

 

(ii)                               Clara.net Holdings Limited is duly organised,
validly existing and duly incorporated under the laws of Jersey;

 

(iii)                            the Relevant Purchasers have full
corporate power and authority to enter into and perform their obligations under
this Agreement and each document to be entered into pursuant hereto and all
actions have been taken by them which are necessary for them to execute and
perform their obligations under this Agreement and each document to be entered
into pursuant hereto;

 

 

(iv)                           the execution of and performance by the
Relevant Purchasers of their obligations under this Agreement and each document
to be entered into pursuant hereto have been duly authorised by their boards of
directors and by all other necessary corporate action; and

 

(v)                              the Relevant Purchasers’ obligations under this
Agreement and each document to be executed by them at or before Closing are, or
when the relevant document is executed, will be valid and binding on the
Relevant Purchasers in accordance with its terms;

 

(vi)                           the Relevant Purchasers have or will
have at Closing sufficient funds to pay the Purchase Price.

 

8.5.2                   The Relevant Purchasers’ Warranties
shall not in any respect be extinguished or affected by Closing.

 

8.5.3                   Each of the Relevant Purchasers’
Warranties shall be construed as a separate and independent Warranty and shall
not be limited or restricted in its scope by reference to, or inference from
any other term of another Relevant Purchasers’ Warranty or any term of this
Agreement.

 

9                                      Limitation of Seller’s Liability

 

9.1                            Time Limitation for Claims

 

Notwithstanding
any other provisions of this Agreement or the Facility Agreement to the
contrary, the Sellers shall not be liable for breach of any Warranty in respect
of any claim:

 

9.1.1                   unless a notice of the claim is given
by the Relevant Purchaser to VIA Inc including reasonable details of the claim
and so far as practicable an estimate of the amount of any claim within three
months following Closing; and

 

9.1.2                   which claim is not satisfied, settled
or withdrawn within six months of the date of notification of the claim under
this Clause 9.1.1 unless proceedings in respect of it have been commenced by
being both issued and served on either of the Sellers

 

except that there
shall be no time limitation for giving notice of any claim under paragraphs
1.1.1, 1.1.3 and 4.3 of Schedule 7 (title warranties).

 

9.2                            Aggregate Minimum Claims

 

9.2.1                   The Sellers shall not be liable under
this Agreement for breach of any Warranty in respect of any claim unless the
aggregate amount of all claims for which the Sellers would otherwise be liable
under this Agreement for breach of any Warranty (disregarding the provisions of
this Clause 9.2) exceeds $1,000,000.

 

9.2.2                   Where the liability agreed or
determined in respect of all claims exceeds $1,000,000 subject as provided elsewhere
in this Clause 9, the Sellers shall be liable for the aggregate amount of all
claims as agreed or determined.

 

9.3                            Maximum Liability

 

The aggregate liability of the
Sellers in respect of any claim under this Agreement and all documents to be
entered into pursuant hereto shall not exceed 33 per cent of the Purchase
Price.

 

 

9.4                            Matters Arising Subsequent to this Agreement

 

9.4.1                   The Sellers shall not be liable under
this Agreement for breach of any Warranty in respect of any matter, act,
omission or circumstance (or any combination thereof), including the
aggravation of a matter or circumstance, to the extent that the same would not
have occurred but for:

 

(i)                                  Agreed matters

 

any matter or
thing done or omitted to be done pursuant to and in compliance with this
Agreement or any Local Transfer Document or otherwise at the request in writing
or with the approval in writing of the Purchaser;

 

(ii)                               Changes in legislation

 

(a)                        the passing of, or any change in, after
Closing any law, rule, regulation or administrative practice of any government,
governmental department, agency or regulatory body including (without prejudice
to the generality of the foregoing) any increase in the rates of Taxation or
any imposition of Taxation or any withdrawal of relief from Taxation not
actually (or prospectively) in effect at the date of Closing; or

 

(b)                       any change after Closing of any
generally accepted interpretation or application of any legislation.

 

9.5                            Insurance

 

The Sellers shall
not be liable under this Agreement or any Local Transfer Document for breach of
any Warranty to the extent that the Losses in respect of which such claim is
made (i) are covered by a policy of insurance and payment is made by the insurer or (ii) would have been
covered under a policy of insurance in force at the date of this Agreement.

 

9.6                            Mitigation

 

Nothing in this
Agreement shall restrict or limit the Purchasers’ general obligation at law to
mitigate a loss which it may incur as a result of a matter giving rise to or
which may give rise to a claim under this Agreement.

 

9.7                            Double Claims

 

The Purchasers
shall not be entitled to recover from the Sellers under this Agreement more
than once in respect of the same Losses suffered. For the avoidance of doubt,
the Sellers shall not be liable under this Agreement for breach of any Warranty
to the extent that such matter, act, omission or circumstance (or any
combination thereof) has been taken into account or contemplated by the
Cashflow Adjustment Amount or the Working Capital Projections.

 

 

10                               Intellectual Property

 

10.1                     Prohibition on Use

 

Subject to Clause
10.2, the Sellers shall not, from Closing, use or authorise any third party to
use:

 

10.1.1            any Business Intellectual Property
transferred to the Relevant Purchaser or a Group Company; or

 

10.1.2            any Group Intellectual Property owned
by a Group Company,

 

in relation to or
in connection with any activities of the Sellers.

 

10.2                     Sellers’ Name

 

Notwithstanding
Clause 10.1, the Sellers shall be permitted to continue using the VIA NET.WORKS
trade mark until the earlier to occur of (i) the date on which trading of
VIA Inc’s common stock on NASDAQ and Euronext ceases and (ii) VIA Inc
having completed a distribution to the VIA Shareholders. Within 20 days of the
expiry of such period, the Sellers shall change their names so that they do not
incorporate VIA NET.WORKS, any other trade mark or name belonging to a Relevant
Purchaser or a Group Company or anything confusingly similar thereto.

 

10.3                     Power of attorney

 

The Sellers
hereby appoint the Purchaser from the Closing Date as their attorney for the
purposes of executing all documents and performing all acts necessary to give
full effect to the assignment of the Business Intellectual Property to the
Relevant Purchaser or a Group Company pursuant to Clause 2.3.1.

 

11                               Confidentiality

 

11.1                     Announcements

 

Pending Closing
no announcement or circular in connection with the existence or the subject
matter of this Agreement or any agreement to be entered into pursuant hereto
shall be made or issued by or on behalf of any member of the VIA Group or the
Purchasers’ Group (including for the purposes of this Clause 11.1, any holding
company (as defined in the Companies Act 1985) of the Purchaser or a subsidiary
of a holding company of the Purchaser) without the prior written approval of
VIA Inc and the Purchaser, such approval not to be unreasonably withheld,
delayed or conditioned. This shall not affect any announcement or circular
required by law or any regulatory body or the rules of any recognised
stock exchange on which the shares of either party are listed but the party
with an obligation to make an announcement or issue a circular shall consult
with the other parties insofar as is reasonably practicable before complying
with such an obligation.

 

11.2                     Confidentiality

 

The
Confidentiality Agreement shall cease to have any force or effect from Closing.

 

 

12                               Other
Provisions

 

12.1                     Further Assurances

 

Each of the
parties shall at its own cost from time to time execute such documents and
perform such acts and things as any party may reasonably require to transfer
the Shares and VIA Operations to the Relevant Purchaser and to give any party
the full benefit of this Agreement and any Local Transfer Document.

 

12.2                     Whole Agreement

 

12.2.1            This Agreement contains the whole
agreement between the parties relating to the subject matter of this Agreement
at the date hereof to the exclusion of any terms implied by law which may be
excluded by contract and supersedes any previous written or oral agreement
between the parties in relation to the matters dealt with in this Agreement.

 

12.2.2            In Clauses 12.2.1, 12.3, 12.7.2, “this
Agreement” includes the Disclosure Letter, the Local Transfer Documents, the
Finance Documents and all documents entered into pursuant to this Agreement.

 

12.3                     Relevant Purchasers’ Liability

 

The maximum
liability of the Purchasers for any breach of this Agreement shall be the
payment of the amounts referred to in Clauses 5.5.4 and 5.5.6.

 

12.4                     Reasonableness

 

Each of the
parties confirms that it has received independent legal advice relating to all
the matters provided for in this Agreement and agrees that the provisions of
this Agreement are fair and reasonable.

 

12.5                     Third Party Rights

 

A person who is
not a party to this Agreement has no right under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of, or enjoy any benefit under, this
Agreement.

 

12.6                     Variation

 

No variation of
this Agreement shall be effective unless in writing and signed by or on behalf
of each of the parties.

 

12.7                     Costs

 

Except as
otherwise expressly provided in this Agreement:

 

12.7.1            the Sellers shall bear all costs
incurred by them in connection with the preparation, negotiation and execution
of this Agreement and the Finance Documents and the sale of the Group provided
that any notarial fees shall not be included in the calculation of any
deviation from the Working Capital Projections for the purposes of Clause
5.5.1(ii);

 

12.7.2            the Purchasers shall bear all such
costs incurred by them in connection with the preparation, negotiation and
execution of this Agreement and the purchase of the Group.

 

 

12.8                     Interest

 

If any party
defaults in the payment when due of any sum payable under this Agreement,
(howsoever determined) the liability of that party shall, save as otherwise
expressly provided, be increased to include interest on such sum from the date
when such payment is due until the date of actual payment (as well after as
before judgment) at a rate per annum of two per cent above the base rate of
LIBOR for monthly deposits. Such interest shall accrue from day to day.

 

12.9                     Grossing-up of Indemnity Payments, VAT

 

12.9.1            All sums payable under this Agreement
pursuant to an indemnity, compensation or reimbursement provision shall be paid
free and clear of all deductions, withholdings, set-offs or counterclaims
whatsoever save only as may be required by law. If any deductions or
withholdings are required by law the party making the payment shall (except to
the extent such sums comprise interest) be obliged to pay to the other party
such sum as will after such deduction or withholding has been made leave the
other party with the same amount as it would have been entitled to receive in
the absence of any such requirement to make a deduction or withholding.

 

12.9.2            Where any payment is made under this
Agreement pursuant to an indemnity, compensation or reimbursement provision and
that sum is subject to a charge to Taxation in the hands of the recipient
(other than Taxation attributable to a payment being properly treated as an
adjustment to the consideration paid by the Relevant Purchaser for the Group)
the sum payable shall be increased to such sum as will ensure that after
payment of such Taxation (and after giving credit for any tax relief available
to the recipient in respect of the matter giving rise to the payment) the
recipient shall be left with a sum equal to the sum that it would have received
in the absence of such a charge to taxation.

 

12.9.3            Where any sum constituting an
indemnity, compensation or reimbursement to any party to this Agreement (the “Party”) is paid to a person other than the
Party but is treated as taxable in the hands of the Party, the payer shall
promptly pay to the Party such sum as shall reimburse the Party for all
Taxation suffered by it in respect of the payment (after giving credit for any
tax relief available to the Party in respect of the matter giving rise to the
payment).

 

12.10              Permitted assignment and nomination of Purchasers

 

12.10.1     Except as otherwise expressly provided
in this Agreement, the Relevant Purchasers may, with the prior written consent
of the Seller (such consent not to be unreasonably withheld, delayed or
conditioned), assign to a third party purchaser of any of the Group Companies,
and without the consent of the Sellers assign to a wholly-owned member of the
Purchaser’s Group, the benefit of all or any of the Sellers’ obligations under
this Agreement provided that the maximum liability of any of any party
hereunder for breach of any obligation under this Agreement or under any
indemnity contained in or entered into pursuant to this Agreement shall be
limited to the liability which would have arisen in the absence of any such
assignment by the Relevant Purchasers.

 

12.10.2     The Purchaser shall be entitled by
giving not less than two Business Days’ notice before the Closing to nominate a
wholly-owned subsidiary to assume the rights and

 

 

obligations of a
Relevant Purchaser under this Agreement provided that the Purchaser shall
remain jointly and severally liable under this Agreement.

 

12.11              Notices

 

12.11.1     Any notice or other communication in
connection with this Agreement (each, a “Notice”)
shall be:

 

(i)                                  in writing in English;

 

(ii)                               delivered by hand, fax, registered post
or by courier using an internationally recognised courier company.

 

12.11.2     A Notice to the Sellers or to either of
them shall be sent to the following address, or such other person or address as
the Sellers or VIA Inc may notify to the Relevant Purchasers from time to time:

 

VIA NET.WORKS Inc

H. Walaardt Sacrestraat 401-403

1117 BM Schipol

The Netherlands

 

Fax:                                                                    +31 205 020 0001

 

Attention:                                  Matt Nydell (Senior Vice President and
General Counsel 

and Secretary)

 

12.11.3     A Notice to the Relevant Purchasers
shall be sent to the following address, or such other person or address as the
Relevant Purchasers may notify to the Sellers from time to time:

 

Claranet Group
Limited

21 Southampton Row

London WC1B 5HA

 

Fax:                                                                    +44 20 7681 2564

 

Attention:                                  Charles Nasser

 

12.11.4     A Notice shall be effective upon
receipt and shall be deemed to have been received:

 

(i)                                  at the time of delivery, if delivered by hand,
registered post or courier;

 

(ii)                               at the time of transmission in legible
form, if delivered by fax.

 

12.12              Invalidity

 

12.12.1     If any provision in this Agreement shall
be held to be illegal, invalid or unenforceable, in whole or in part, the
provision shall apply with whatever deletion or modification is necessary so
that the provision is legal, valid and enforceable and gives effect to the
commercial intention of the parties.

 

12.12.2     To the extent it is not possible to
delete or modify the provision, in whole or in part, under Clause 12.12.1, then
such provision or part of it shall, to the extent that it is illegal, invalid
or unenforceable, be deemed not to form part of this Agreement and the
legality, validity and enforceability of the remainder of this Agreement shall,
subject to any deletion or modification made under Clause 12.12.1, not be
affected.

 

 

12.13              Counterparts

 

This Agreement
may be entered into in any number of counterparts, all of which taken together
shall constitute one and the same instrument. Any party may enter into this
Agreement by signing any such counterpart.

 

12.14              Governing Law and Submission to Jurisdiction

 

12.14.1     This Agreement and the documents to be
entered into pursuant to it, save as expressly referred to therein, shall be
governed by and construed in accordance with English law.

 

12.14.2     Each of the parties irrevocably agrees
that the courts of England are to have exclusive jurisdiction to settle any
dispute which may arise out of or in connection with this Agreement and the
documents to be entered into pursuant to it and that accordingly any
proceedings arising out of or in connection with this Agreement and the
documents to be entered into pursuant to it shall be brought in such courts.
Each of the parties irrevocably submits to the jurisdiction of such courts and
waives any objection to proceedings in any such court on the ground of venue or
on the ground that proceedings have been brought in an inconvenient forum.

 

12.15              Appointment of Process Agent

 

12.15.1     The Sellers hereby irrevocably appoint
Hogan & Hartson Corporate Services Limited as their agent to accept
service of process in England in any legal action or proceedings arising out of
this Agreement, service upon whom shall be deemed completed whether or not
forwarded to or received by the Sellers.

 

12.15.2     The Sellers agree to inform the
Purchasers in writing of any change of address of such process agent within 28
days of such change.

 

12.15.3     If such process agent ceases to be able
to act as such or to have an address in England, the Sellers irrevocably agree
to appoint a new process agent in England acceptable to the Purchasers and to
deliver to the Purchasers within 14 days a copy of a written acceptance of
appointment by the process agent.

 

12.15.4     Nothing in this Agreement shall affect
the right to serve process in any other manner permitted by law or the right to
bring proceedings in any other jurisdiction for the purposes of the enforcement
or execution of any judgment or other settlement in any other courts.

 

In
witness
whereof this Agreement has been duly executed as a Deed.

 

 

	
  SIGNED as a Deed by and 

  	
  }

  	
  /s/ 

  
	
  on behalf of VIA NET.WORKS, Inc.:

  	
   

  

 

 

	
  SIGNED as a Deed by and

  	
  }

  	
  /s/
  

  
	
  on behalf of VIA NET.WORKS Holdco,

  Inc.:

  	
   

  

 

 

	
  SIGNED as a Deed by and

  	
  }

  	
  /s/ 

  
	
  on behalf of VIA NET.WORKS NY

  Corp, Inc.:

  	
   

  

 

 

	
  SIGNED as a DEED by 

  	
  }

  	
  /s/ 

  
	
  and on behalf of Claranet Group

  Limited:

  	
   

  

 

 

	
  SIGNED as a DEED by 

  	
  }

  	
  /s/ 

  
	
  and on behalf of Clara.net Holdings

  Limited:

  	
   

  

 

 

Schedule 1

Part 1

Details of the Shares etc.

(Clause 1.1) 

 

	
  (1)

  	
   

  	
  (2)

  	
   

  	
  (3)

  	
   

  	
  (4)

  
	
  Name

  of Share Seller

  	
   

  	
  Name of

  Company

  	
   

  	
  Shares

  	
   

  	
  Name of Share

  Purchaser

  
	
  VIA NET.WORKS, Inc.

  	
   

  	
  VIA NET.WORKS USA, Inc.

  	
   

  	
  1,000 shares

  	
   

  	
  Clara.net Holdings
  Limited

  
	
  VIA NET.WORKS, Inc.

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  	
   

  	
  200 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  	
   

  	
  21 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  Agence des Medias
  Numeriques S.A.S

  	
   

  	
  500 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  Amen Ltd

  	
   

  	
  2 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  Agencia de media
  numerica España S.L.

  	
   

  	
  310 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  PSINet Netherlands
  B.V.

  	
   

  	
  40 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  PSINet Belgium
  BVBA/SPRL

  	
   

  	
  750 shares

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  PSINet Germany GmbH

  	
   

  	
  1 share

  	
   

  	
  Claranet Group
  Limited

  
	
  VIA NET.WORKS Holdco, Inc.

  	
   

  	
  PSINet Datacenter
  Germany GmbH

  	
   

  	
  1 share

  	
   

  	
  Claranet Group
  Limited

  

 

 

Schedule 2

Companies and Subsidiaries

 

1                                      Particulars of the Companies

 

	
  1.1

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS USA, Inc.

  
	
   

  	
   

  	
  Federal
  Identification Number:

  	
   

  	
  58-205 1588

  
	
   

  	
   

  	
  Place of Business:

  	
   

  	
  15 Piedmont CTR NE #
  710, Atlanta, GA 30305

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  26 May 1993
  (dissolved 23 July 1995 and reinstated 27 November 1995 effective
  from the date of the administrative dissolution); Georgia

  
	
   

  	
   

  	
  Issued capital
  stock:

  	
   

  	
  1,000 class A shares
  with a par value of US$1.00 per share

  
	
   

  	
   

  	
  Authorised capital
  stock:

  	
   

  	
  1,000 class A shares
  with a par value of US$1.00 per share

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS, Inc.:
  1,000 class A shares held

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Raymond Walsh, Matt
  Nydell and Patrick Gaul

  
	
   

  	
   

  	
  Secretary:

  	
   

  	
  Matt Nydell

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  34115551

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  H Walaardt
  Sacrestraat 401, 1117 BM Schiphol-Oost, The Netherlands.

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  5 May 1999; The
  Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 22,100 divided
  into 221 shares with a par value of EUR100 each.

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 100,000 divided
  into 1,000 shares with a par value of EUR 100 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Holdco, Inc.:
  21 shares with a par value of EUR 100 per share VIA NET.WORKS Inc.: 200
  shares with a par value of EUR 100 per share.

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS, Inc.

  
	
   

  	
   

  	
  Proxy Holders:

  	
   

  	
  Mike McTighe, John
  Steele, Jan Gesmar-Larsen, Malcolm Bell, Karen Slatford

  

 

 

	
  1.3

  	
   

  	
  Name
  of Company:

  	
   

  	
  Agence des Medias
  Numeriques S.A.S.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  421 527 797 RCS
  Paris

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  12/14 Rond Point des
  Champs-Elysées, 75008 Paris France

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  13 January 1998;
  France

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 37,000 divided
  into 500 shares with a nominal value of EUR 74 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 37,000 divided
  into 500 shares with a nominal value of EUR 74 each

  
	
   

  	
   

  	
  Shareholder and shares
  held:

  	
   

  	
  VIA NET.WORKS Holdco, Inc.:
  500 shares

  
	
   

  	
   

  	
  Chairman
  (President):

  	
   

  	
  Dick Theunissen

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.4

  	
   

  	
  Name
  of Company:

  	
   

  	
  AMEN Ltd

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  4414694

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  1 Canada Square, 29th
  Floor, Canary Wharf, London E14 5DY

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  11 April 2002;
  United Kingdom

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  £2 divided into 2
  shares of £1 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  1000 shares

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NETWORKS Holdco, Inc.:
  2 shares

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Matt Stuart Nydell,
  Raymond Walsh

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  Name
  of Company:

  	
   

  	
  AGENCIA DE MEDIA
  NUMERICA ESPAÑA S.L.

  
	
   

  	
   

  	
  Company Registration
  Details:

  	
   

  	
  Mercantile Register
  of Madrid, at Volume 16871, Book 0, Sheet 73, Section 8, Page M-288441,
  Registratin 1st

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Paseo de la
  Castellana, 164, Ent. 2a, 28046 Madrid, Spain

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  August 31,
  2001; Bilbao (Spain)

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 3,100 divided
  into 310 shares of EUR 10 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 3,100 divided
  into 310 shares of EUR 10 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Holdco, Inc.:
  310 shares

  
	
   

  	
   

  	
  Managing Director:

  	
   

  	
  Sandrine Girard
  (resigned on April 19, 2005)

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Mr. Dick
  Theunissen and Mr. Antonio Miguel 

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  Caetano Ferreira

  
	
   

  	
   

  	
  Secretary:

  	
   

  	
  Mr. Clifford J.
  Hendel (Secretary); Mr. Francisco Solchaga Lopez de Silanes
  (Vice-Secretary)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.6

  	
   

  	
  Name of
  Company:

  	
   

  	
  PSINet Netherlands
  B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  33294922

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Paul van
  Vlissingenstraat 16, 1096 BK Amsterdam, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  13 August 1997;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  NLG 40,000 divided
  into 40 ordinary shares of NLG 1,000 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  NLG 200,000 divided
  into 200 ordinary shares of NLG 1,000 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS
  Holdco, Inc: 40 shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  
	
   

  	
   

  	
  Proxy Holder:

  	
   

  	
  Alexander Johan
  Marie Scholten

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.7

  	
   

  	
  Name
  of Company:

  	
   

  	
  PSINet Belgium
  BVBA/SPRL

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  0460.461.275

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Medialaan 32, bus 3,
  1800 Vilvoorde, Belgium

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  27 March 1997;
  Belgium

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 18,550 dividend
  into 750 shares without nominal value

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 18,550 dividend
  into 750 shares without nominal value

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS
  Holdco, Inc: 750 shares held

  
	
   

  	
   

  	
  Director:

  	
   

  	
  James Joseph Henry
  Demaeght

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.8

  	
   

  	
  Name
  of Company:

  	
   

  	
  PSINet Germany GmbH

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  Local Court of
  Munich, HRB 117930

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Munich

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  10 April 1997;
  Germany

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  One share in the
  nominal amount of DM 50,000

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS
  Holdco, Inc: one share held

  
	
   

  	
   

  	
  Director:

  	
   

  	
  Fred Seibl

  

 

 

	
  1.9

  	
   

  	
  Name
  of Company:

  	
   

  	
  PSINet Datacenter
  Germany GmbH

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  Local Court of
  Berlin-Charlottenburg, HRB 76192

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Berlin

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  10 December 1999;
  Germany

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  One share in the
  nominal amount of EUR 25,000

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Holdco, Inc.:
  one share held

  
	
   

  	
   

  	
  Director

  	
   

  	
  Fred Seibl

  

 

2                                      Particulars of the
Subsidiaries

 

	
  2.1

  	
   

  	
  Name
  of Company:

  	
   

  	
  AMEN NEDERLAND B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  34212499

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  H Walaardt
  Sacrestraat 401, 1117 BM Schiphol, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  30 November 2004;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 18,000 divided
  into 18,000 shares with a par value of EUR 1.00 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 90,000 divided
  into 90,000 shares with a par value of EUR 1 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holdings B.V.: 18,000 shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS
  Nederland B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  17089780

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Science Park
  Eindhoven 5630, 5692 EN Son, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  21 November 1995;
  The Netherlands

  
	
   

  	
   

  	
  Issued share capital:

  	
   

  	
  EUR 45,000 divided
  into 10,000 ordinary shares of EUR 4.50 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 225,000 divided
  into 50,000 ordinary shares of EUR 4.50 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.: 10,000 shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  

 

 

	
   

  	
   

  	
  Proxy Holder:

  	
   

  	
  Alexander Johan
  Marie Scholten

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Name
  of Company:

  	
   

  	
  bART HOLDING B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  24270496

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Science Park
  Eindhoven 5630 5692 EN Son; The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  27 August 1996;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 340,355.16

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 453,780.22

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.: 340,355.16 shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Name
  of Company:

  	
   

  	
  Xenovic Holding B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  24271927

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Science Park
  Eindhoven 5630, 5692 En Son, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  15 March 1996;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 18,241.96

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 90,756.04

  
	
   

  	
   

  	
  Shareholders and
  shares held:

  	
   

  	
  Bart Holding B.V.:
  100% shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  bART Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Name
  of Company:

  	
   

  	
  bART Noord Nederland
  B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  020564446

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Science Park 5630,
  5692 En Son, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  21 December 1996;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 18,151.21

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 90,756.04

  
	
   

  	
   

  	
  Shareholders and
  shares held:

  	
   

  	
  bART Holding B.V.:
  100% shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  bART Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Name
  of Company:

  	
   

  	
  bART Midden
  Nederland B.V.

  

 

 

	
   

  	
   

  	
  Registered Number:

  	
   

  	
  24274849 (B-ART
  Midden Nederland)

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Science Park 5630,
  5692 En Son, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  14 May 1996;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 18,151.21

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 90,756.04

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  bART Holding B.V.:
  100% shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  bART Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Name
  of Company:

  	
   

  	
  Arameta B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  24272259

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Science Park
  Eindhoven 5630, 5692 En Son, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  28 January 1997;
  The Netherlands

  
	
   

  	
   

  	
  Issued share capital:

  	
   

  	
  EUR 18,151.21

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 90,756.04

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  bART Holding B.V.:
  sole shareholder

  
	
   

  	
   

  	
  Director:

  	
   

  	
  bART Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS
  Portugal - Tecnologies Da Informação, S.A.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  CRC Lisbon
  6.983/NIPC: 503 412 031

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Praça Duque de
  Saldanha, 1, Edificio Atrium Saldanha, 4H, Lisbon

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  February 1995;
  Portugal

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 585,000.00
  divided into 117,000 shares of EUR 5 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 585,000.00
  divided into 117,000 shares of EUR 5 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 117,000 shares

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  António Miguel
  Ferreira Dick Theunissen Brian Berkopec

  
	
   

  	
   

  	
  Secretary:

  	
   

  	
  Pedro José Sardinha
  Oliveira Cardo

  

 

 

	
  2.9

  	
   

  	
  Name
  of Company:

  	
   

  	
  AMENWORLD Servicos
  Internet Sociedade Unipessoal LDA

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  13019/301204

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Praça do Saldanha, no
  1, 4oH, Lisboa

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  30 December 2004

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 10,000.00

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  Unlimited

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.: 100% shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  António Miguel
  Caetano Ferreira

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS España
  S.L.

  
	
   

  	
   

  	
  Registration
  Details:

  	
   

  	
  Volume 3, 082, Page 186,
  Section 8, Sheet SE 40,794; entry number 1

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  13 August 1999;
  Spain

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 672,150 divided
  into 67,215 shares of EUR 10 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.: 67,215 shares

  
	
   

  	
   

  	
  Directors (Joint and
  Several):

  	
   

  	
  Mr. Nathan
  Wajsman Mr. Louis Bonnet,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS IRU
  Co. Ltd

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  306317

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Arthur Cox Building,
  Earlsfort Terrace, Dublin 2

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  6 May 1999:
  Republic of Ireland

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  IR£1.25 divided into
  1 share of IR£1.25

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  IR£125,000 euro
  divided into 100,000 Ordinary shares of IR£1.25 euro each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 1 share

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Alexander French
  Matt Stuart Nydell

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS, UK
  Holding Ltd

  

 

 

	
   

  	
   

  	
  Registered Number:

  	
   

  	
  03690730

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  c/o Hogan &
  Hartson One Angel Court, London EC2R 7HJ

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  31 December 1998;
  England and Wales

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  £10 divided into 10
  ordinary shares of £1.00 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  £1,000.00 divided
  into 1,000 shares of £1.00 each

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 10 shares

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Matt Stuart Nydell
  VIA NET.WORKS Europe Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.13

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS,
  France Holding SAS

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  433 596 228 RCS
  Paris

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  127, rue Amelot,
  75011 Paris, France

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  27 November 2000;
  Paris

  
	
   

  	
   

  	
  Share capital:

  	
   

  	
  17,326,400 euros
  divided into 1,732,640 shares of EUR10 each

  
	
   

  	
   

  	
  Members:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 1,555,800 shares VIA NET.WORKS UK Holdings Limited: 176,840
  shares

  
	
   

  	
   

  	
  Chairman
  (Président):

  	
   

  	
  Nathan Wajsman

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS Jersey
  Ltd

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  88289

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  c/o Jordans (C.I.)
  Limited, PO Box 456, Postman House, Hue Street, St Helier, Jersey JE4 5RP

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  9 August 2004;
  Jersey

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  £1000 divided into
  100 shares of £1 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  £10,000 divided into
  10,000 shares of £1 each

  
	
   

  	
   

  	
  Shareholders and
  shares held:

  	
   

  	
  VIA NET.WORKS UK
  Holding Limited; 1000 shares held

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Matt Stuart Nydell

  

 

 

	
  2.15

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS
  Deutschland GmbH

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  Local Court of
  Duisburg, HRB 7472

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Duisburg

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  2 April 1993;
  Germany

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  DEM 18,822,000.00:
  divided into one share of DEM 18,822,000.00

  
	
   

  	
   

  	
  Authorised share capital:

  	
   

  	
  DEM 18,822,000.00:
  divided into one share of DEM 18,822,000.00

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; one share

  
	
   

  	
   

  	
  Director:

  	
   

  	
  Fred Seibl

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.16

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS Holdco
  Italy S.r.L.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  13200500158

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Via Turati Filippo
  40 Milan

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  28 July 2000

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 500,000

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 500,000

  
	
   

  	
   

  	
  Shareholders and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 1 quota valued at EUR 495,000 VIA NET.WORKS UK Limited: 1 quota
  valued at EUR 5,000

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Matt Stuart Nydell

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.17

  	
   

  	
  Name
  of Company:

  	
   

  	
  PSINet France Sarl

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  394 332 118 RCS
  Nanterre

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Tour Atlantique - 13ème
  étage, Place de la Pyramide - 92911 Paris La Défense Cedex

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  17 March 1994;
  Paris

  
	
   

  	
   

  	
  Share capital:

  	
   

  	
  373,552.84 euros
  divided into 144,138 shares

  
	
   

  	
   

  	
  Member and shares
  held:

  	
   

  	
  VIA NET.WORKS,
  France Holdings SAS; 144,138 shares held

  
	
   

  	
   

  	
  Manager (Gérant):

  	
   

  	
  Marc le Leau

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.18

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS France
  S.A.

  

 

 

	
   

  	
   

  	
  Registered Number:

  	
   

  	
  408 236 990 RCS
  Nanterre

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Tour Atlantique - 13ème
  étage, Place de la Pyramide - 92911 Paris La Défense Cedex

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  17 July 1996;
  Pontoise

  
	
   

  	
   

  	
  Share capital:

  	
   

  	
  485,412.92 euros
  divided into 31,841 shares

  
	
   

  	
   

  	
  Shareholders and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 2 shares Matt Nydell: 1 share Paulo Baptista: 1 share VIA
  NET.WORKS, France Holding SAS; 31,837 shares

  
	
   

  	
   

  	
  Chairman of the
  Board:

  	
   

  	
  Paulo Baptista Gomes
  Carneiro

  
	
   

  	
   

  	
  Directors:

  	
   

  	
  Nathan Wajsman Matt
  Nydell

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.19

  	
   

  	
  Name
  of Company:

  	
   

  	
  PSINet Switzerland
  Sarl

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  CH-660-2323998-1

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Chemin de l’Epinglier
  2, CH-1217 Meyrin GE.

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  18 December 1998;
  Switzerland

  
	
   

  	
   

  	
  Issued quota
  capital:

  	
   

  	
  CHF 200,000 (no
  division)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; All quota

  
	
   

  	
   

  	
  Managers:

  	
   

  	
  Gérard Cauderay
  James John McCartan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.20

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS
  Deutsche Holding GmbH

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  Local Court of
  Duisburg, HRB 9349

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Duisburg

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  29 September 2000;
  Germany

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 25,000; one
  share

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; one share

  
	
   

  	
   

  	
  Director:

  	
   

  	
  Fred Seibl

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.21

  	
   

  	
  Name
  of Company:

  	
   

  	
  VIA NET.WORKS
  Express B.V.

  

 

 

	
   

  	
   

  	
  Registered Number:

  	
   

  	
  34208904

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  H. Walaardt
  Sacrestraat 401, 1117 BM Schiphol, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  30 November 2004;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 18,000 divided
  into 18,000 ordinary shares of EUR 1 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 90,000

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.; 18,000 shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.22

  	
   

  	
  Name
  of Company:

  	
   

  	
  AMEN ITALIA S.R.L.

  
	
   

  	
   

  	
  Company Registration
  Details:

  	
   

  	
  03962200964

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Torre A - Via
  Senigallia 18/2 - 20161 Milano

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  14 May 2003,
  registered in the Companies Registry on 29 May 2003; Italy

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  EUR 10

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  EUR 10

  
	
   

  	
   

  	
  Shareholder and
  shares held:

  	
   

  	
  Agences des Médias
  Numériques SAS; one quota representing all of the share capital

  
	
   

  	
   

  	
  Chairman of Board of
  Directors:

  	
   

  	
  Maurizio di Salvo

  
	
   

  	
   

  	
  Director:

  	
   

  	
  Thierry Avikian

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.23

  	
   

  	
  Name
  of Company:

  	
   

  	
  Unix Support
  Nederland B.V.

  
	
   

  	
   

  	
  Registered Number:

  	
   

  	
  27152479

  
	
   

  	
   

  	
  Registered Office:

  	
   

  	
  Paul van
  Vlissingenstraat 16, 1096 BK Amsterdam, The Netherlands

  
	
   

  	
   

  	
  Date and place of
  incorporation:

  	
   

  	
  12 February 1996;
  The Netherlands

  
	
   

  	
   

  	
  Issued share
  capital:

  	
   

  	
  NLG 40,000 divided
  into 40 ordinary shares of NLG 1,000 each

  
	
   

  	
   

  	
  Authorised share
  capital:

  	
   

  	
  NLG 200,000 divided
  into 200 ordinary shares of NLG 1,000 each

  
	
   

  	
   

  	
  Shareholders and
  shares held:

  	
   

  	
  PSINet Netherlands
  B.V.; 40 shares

  
	
   

  	
   

  	
  Director:

  	
   

  	
  VIA NET.WORKS Europe
  Holding B.V.

  
	
   

  	
   

  	
  Proxy Holder:

  	
   

  	
  Alexander Johan
  Marie Scholten

  

 

 

Schedule 3

Contracts

(Clause 2.3.1(iv))

 

1                                      Obligation to obtain
Third Party Consents

 

In relation to
any Contract which is not assignable without a Third Party Consent, this
Agreement shall not be construed as an assignment or an attempted assignment
and the Relevant Sellers and the Relevant Purchasers shall each use reasonable
endeavours both before and after Closing to obtain all necessary Third Party
Consents on terms reasonably acceptable to the Relevant Purchasers and the
Relevant Sellers as soon as possible and shall keep each other informed of
progress in obtaining such Third Party Consents. The Relevant Sellers shall
deliver to the Relevant Purchasers, on Closing or, if later, as soon as
possible after receipt, any Third Party Consent and an assignment duly executed
by the appropriate parties.

 

2                                      Obligations until Third Party
Consents are obtained/where Third Party Consents are refused

 

2.1                            Subject to paragraph 2.2, the Relevant
Purchasers shall, from Closing, assume, carry out, perform and discharge the
Relevant Seller’s obligations under the Contracts and shall indemnify and keep
indemnified the Relevant Seller against any Liability incurred by that Seller
or any member of the VIA Group arising from the failure by the Relevant
Purchaser to assume, carry out, perform or discharge such obligations and
against any Losses which that Seller may suffer by reason of that Seller taking
any reasonable action to avoid, resist or defend any Liability referred to in this
paragraph and provided that the Relevant Purchaser shall only be liable to the
extent such Liability incurred by that Seller is a Liability which is intended
to be assumed by the Relevant Purchaser pursuant to Clause 2.3.2.

 

2.2                            In respect of any Contract, from
Closing until the relevant Third Party Consent has been obtained, as
contemplated by paragraph 1.1, or where the Third Party Consent has been
refused and until the earlier to occur of (i) the date on which trading of
VIA Inc’s common stock on NASDAQ and Euronext ceases and (ii) VIA Inc
having completed a distribution to the VIA Shareholders:

 

2.2.1                   the Relevant Seller shall hold on trust
such Contract and any monies, goods or other benefits received under such
Contract to the extent it is lawfully able to do so or, where it is not
lawfully able to do so or where holding on trust is not possible under local
law, that Seller and the Relevant Purchaser shall make such other arrangements
between themselves to provide to the Relevant Purchaser the benefits of the
Contract, including the enforcement at the cost and for the account of the
Relevant Purchaser of all rights of the relevant Seller against any other party
thereto;

 

2.2.2                   to the extent that the Relevant
Purchasers are lawfully able to do so, and subject to the Relevant Purchasers
receiving the benefits of the Contract, the Relevant Purchasers shall at their
own expense perform the Relevant Seller’s obligations under the Contract as
agent or sub-contractor and shall indemnify the Relevant Seller in respect
thereof. To the extent that the Relevant Purchasers are not lawfully able to do
so, the Relevant Seller shall, at the Relevant Purchasers’ cost

 

 

do all
such things as the Relevant Purchasers may reasonably require to enable due
performance of the Contract;

 

provided that, in
each case, the Relevant Purchasers shall indemnify and keep indemnified the
Relevant Seller or member of the VIA Group against any liability incurred by
the Relevant Seller or any member of the VIA Group as a result of this
paragraph 2.2.

 

3                                      Failure to Obtain Third Party
Consents

 

If a Third Party
Consent is refused or otherwise not obtained on terms reasonably acceptable to
the Relevant Purchasers within three (3) months of Closing, references in
this Agreement to the Contracts and the VIA Operations (other than in this
paragraph 3) shall be construed as excluding such Contract.

 

4                                      Novation

 

To the extent
that the Sellers request the novation of any Contract to a Group Company or a
member of the Purchaser’s Group, the parties shall use their reasonable
endeavours to novate such Contract pursuant to Clause 2.3 and pending such
novation, the provisions of this Schedule 3 shall apply.

 

 

Schedule 4

Employees

(Clause 2.4)

 

1                                      Transfer of Employees

 

1.1                            The Sellers shall and shall procure
that the VIA Group shall:

 

1.1.1                   transfer the employment of each
Relevant Employee to a Group Company prior to the Closing Date; and

 

1.1.2                   not offer employment to, employ or
otherwise engage any Relevant Employee whose employment is transferred pursuant
to paragraph 1.1.1 above prior to the Closing Date.

 

1.2                            If any employee other than a Relevant
Employee is transferred to a Group Company or a Relevant Purchaser pursuant to
paragraph 1.1 of this Schedule 4:

 

1.2.1                   the Relevant Purchaser shall upon
becoming aware of the transfer of such employee at any time after the Closing
Date immediately or as soon as possible under applicable law terminate such
employee’s employment on terms agreed with the Seller (acting reasonably); and

 

1.2.2                   the Sellers shall indemnify the
Relevant Purchasers and keep the Relevant Purchasers indemnified against all
Liabilities relating to or arising out of such termination and reimburse the
Relevant Purchasers for all costs, expenses and emoluments (including, without
limitation, any taxation and employer’s national insurance contributions)
reasonably and properly incurred in employing such employee in respect of his
employment on or after the Closing Date until such employee is terminated
pursuant to paragraph 1.2.1 above.

 

1.3                            The Relevant Purchasers shall be
responsible for all wages, salaries, emoluments and other amounts due or
accruing and taxation and employer’s national insurance contributions payable
in respect of the Relevant Employees with effect from the Closing Date.

 

1.4                            The Sellers shall be responsible for
all wages, salaries, emoluments and other amounts due and accruing and taxation
and employer’s National Insurance contributions payable in respect of the
Employees prior to the Closing Date.

 

1.5                            The Sellers using their reasonable
endeavours (without cost to the Sellers) undertake that they shall not and
shall procure that no other member of the VIA Group and each Group Company
shall do or knowingly omit to do anything prior to the Closing Date unless
agreed by the Relevant Purchasers which would cause any Relevant Employee to
terminate their employment with either of the Sellers or any other company in
the VIA Group or any Group Company before the Closing Date or with the Relevant
Purchasers on or after the Closing Date.

 

2                                      Application of
Transfer Provisions

 

2.1                            If any contract of employment,
employment relationship or collective agreement in relation to any employee
(other than a Relevant Employee) employed by either of the Sellers, the other
members of the VIA Group or any Group Company shall have effect as if
originally made between the Relevant Purchasers and such employee (a “Transferred Employee”)

 

 

as a
result of the Transfer Provisions (without prejudice to any other rights or
remedies which may be available to the Relevant Purchasers):

 

2.1.1                   the Relevant Purchaser shall, upon
becoming aware of the application of the Transfer Provisions to any such
contract of employment or collective agreement, notify the Seller forthwith and
the Seller or any other member of the VIA Group shall procure that such
employees enter into settlement agreements with the Relevant Sellers and the
Relevant Purchaser on termination of the Transferred Employee’s employment (on
terms that the Sellers are liable for all payments due to such Transferred
Employees). The Relevant Purchaser shall co-operate with the Sellers and take
all reasonable steps to assist the Sellers in procuring that such Transferred
Employees enter into termination agreements as soon as reasonably practicable following
Closing; and

 

2.1.2                   the Sellers shall indemnify the
Relevant Purchasers and keep the Relevant Purchasers indemnified against all
Liabilities relating to or arising out of such termination or the transfer of
Transferred Employees (including any Liability arising out of a failure by the
Sellers but excluding any Liability arising out of a failure by the Purchasers
to comply with their obligations under the Transfer Provisions) and shall
reimburse the Relevant Purchasers for all costs, emoluments and expenses
(including, without limitation, any taxation and employer’s national insurance
contributions) reasonably and properly incurred in employing such Transferred
Employee in respect of his employment on or after the Closing Date; and

 

2.1.3                   irrespective of whether the Transferred
Employee’s employment is terminated in accordance with paragraph 2.1.1 above,
the Sellers will indemnify the Relevant Purchasers and keep the Relevant
Purchasers indemnified against any Liabilities which relate to, arise out of or
are connected with any claims brought against the Relevant Purchaser by any
Transferred Employee other than in each case as a result of breach by the
Relevant Purchaser of its obligations under paragraph 2.1.1 above which are due
solely to any act or omission by either of the Sellers, any other member of the
VIA Group or any Group Company or any event, matter or any other occurrence
having its origin prior to the Closing Date and which the Relevant Purchasers
incurs in relation to any contract of employment, or the employment
relationship or collective agreement of one or more of the Transferred
Employees pursuant to the Transfer Provisions and/or in respect of this
Agreement.

 

2.2                            The Sellers shall indemnify the
Relevant Purchasers and keep the Relevant Purchasers indemnified against all
Liabilities which relate to or arise out of any dismissal by the Sellers, the
VIA Group or any Group Company of any employee (not being a Relevant Employee)
and which the Relevant Purchasers may incur pursuant to the provisions of the
Transfer Provisions and this Agreement.

 

3                                      Definitions

 

3.1                            For the purposes of this provision the
terms:

 

“contract of employment” and “collective agreement” shall have the same
meanings respectively as in the Transfer Provisions;

 

“Transfer Provisions” means the Transfer
Regulations and Council Directive 2001/23/EC; and

 

 

“Transfer Regulations” means the Transfer of
Undertakings (Protection of Employment) Regulations 1981 (as amended or
replaced).

 

 

Schedule 5

VAT

 

1                                      The Sellers and the Purchasers shall
use all reasonable endeavours (including, where appropriate, the making of an
election or application in respect of VAT to any Taxation Authority or entering
into a written agreement) to secure that the sale of the Group so far as
carried on in the European Union is treated as neither a supply of goods nor a
supply of services for the purposes of the laws governing VAT in the relevant
member state.

 

2                                      To the extent that any state outside
the European Union provides for relief or exemption from VAT (or any similar
tax on turnover or added value) on the transfer of a business or a company or
treats such a transaction as being non-taxable for VAT purposes, the Sellers
and the Purchasers shall use all reasonable endeavours (including, where
appropriate, the making of an election or application in respect of VAT (or any
similar tax on turnover or added value) to any Taxation Authority or entering
into a written agreement) to secure such treatment as regards the sale of the
Group (insofar as the business of the Group is carried on in the relevant
state) under this Agreement.

 

 

Schedule 6

Closing Obligations

 

1                                      General Obligations

 

1.1                            The Sellers’ Obligations

 

On Closing, the
Sellers shall deliver or make available to the Purchasers the following:

 

1.1.1                   evidence of the due fulfilment of the
conditions set out in Clause 4;

 

1.1.2                   evidence that the Sellers are
authorised to execute this Agreement and the Local Transfer Documents
(including, where relevant, any notarial deeds referred to in this Schedule);

 

1.1.3                   a certificate (the “VIA Closing Certificate”) setting out
details of all Employee bonuses due in respect of 2004, including all Taxation
in relation thereto, to the extent that the same have not been paid by the
Sellers or the Group Companies prior to Closing; and

 

1.1.4                   evidence of the full release of the
prejudgment attachment dated 24 March 2005 over the shares held by VIA Inc
in VIA NET.WORKS Europe Holding B.V.

 

1.2                            The Purchaser’s Obligations

 

On Closing, the
Purchasers shall deliver or make available to the Sellers:

 

1.2.1                   the following evidence that the
Purchasers are authorised to execute this Agreement and the Local Transfer
Documents (including, where relevant, any notarial deeds referred to in this
Schedule); and

 

1.2.2                   immediately following the execution of
the Local Transfer Documents, the Relevant Purchaser shall resolve to appoint
or procure the appointment of those individuals identified by the Purchaser as
Directors of the Group Companies with such appointments to be effective as of
Closing.

 

2                                      Transfer of the Shares and
VIA Operations

 

2.1                            General Transfer Obligations

 

On Closing, the
Relevant Sellers and the Relevant Purchasers shall execute and/or deliver
and/or make available Local Transfer Documents and take such steps as are
required to transfer the Shares and the Business Assets.

 

2.2                            Specific Transfer Obligations

 

For the purposes
of compliance with paragraph 2.1, the Relevant Sellers and Relevant Purchaser
shall do the following, in relation to any Companies and VIA Operations that
are incorporated or located in the jurisdictions listed below:

 

2.2.1                   Belgium

 

(i)                                  Holdco shall record the transfer of the
Shares owned by it to the Relevant Purchaser in the share register of the
PSINet Belgium B.V.BA/SPRL (“PSINet Belgium”),
and shall sign the share register to that effect.

 

 

(ii)                               The Relevant Purchaser shall sign the
share register of the PSINet Belgium to accept the transfer of the Shares from
the Holdco.

 

(iii)                            Holdco and the Relevant Purchaser shall
procure that the transfer of the Business Assets located in Belgium shall be
effected by means of a notarial deed on terms reasonably satisfactory to the
parties to be executed by a notary public.

 

2.2.2                   France

 

(i)                                  In relation to any Shares having the
form of actions in any Company
incorporated in France, Holdco shall deliver to the Relevant Purchaser duly
completed, executed and dated share transfer forms (ordres de mouvements) in favour of the Relevant Purchaser
and Holdco and the Relevant Purchaser shall execute the registration forms (formulaires de cession de droits sociaux).

 

(ii)                               Holdco shall deliver to the Relevant
Purchaser any Third Party Consents as Holdco may have obtained;

 

(iii)                            Holdco, any relevant third party and
the Relevant Purchaser shall execute (or shall have executed, with effect on
Closing) assignment or novation agreements on terms reasonably satisfactory to
the parties.

 

2.2.3                   Germany

 

(i)                                  In the case of each of PSINet Germany GmbH and
PSINet Datacenter Germany GmbH (the “GmbH
Companies”) Holdco and the Relevant Purchaser shall enter into a
transfer agreement in notarial form on terms reasonably satisfactory to the
parties by means of which Holdco transfers title to the Shares in the GmbH
Companies to the Relevant Purchaser, and the Relevant Purchaser accepts such
transfer.

 

(ii)                               Holdco and the Relevant Purchaser shall
immediately after Closing inform the management of the relevant GmbH Company
with respect to the transfer of the Shares in such GmbH Company.

 

(iii)                            VIA NET.WORKS Deutschland GmbH and VIA
NET.WORKS Deutsche Holding GmbH (the “VIA
GmbH Companies”) as transferors and the Relevant Purchaser as
transferee shall enter into a transfer agreement on terms reasonably
satisfactory to the parties by means of which (a) each of the VIA GmbH
Companies transfers title to, and (to the extent applicable) possession of, all
Business Assets belonging to such VIA GmbH Company, to the Relevant Purchaser,
and the Relevant Purchaser accepts such transfers, (b) the Relevant Purchaser
assumes all liabilities incurred by any of the VIA GmbH Companies as described
in Clauses 2.3.2 and 2.3.3 of the Sale and Purchase Agreement and as existing
at Closing or arising, accruing or assessed after Closing in consequence of any
transaction carried out in the ordinary and usual course of carrying on the
Businesses prior to Closing] and undertakes to hold the VIA GmbH Companies
harmless against any such liabilities and the VIA GmbH Companies accepts such
assumption and undertaking, and (c) each of the VIA GmbH Companies assigns to
the Relevant Purchaser all Contracts to which it is a party and as existing in
the Business at Closing, and the Relevant

 

 

Purchaser accepts
such transfer and undertakes to hold Holdco harmless against any liabilities or
obligations under those Contracts.

 

(iv)                           In case the transfer of the Business
Assets, liabilities and Contracts requires further acts, notifications or
filings, Holdco shall support the Relevant Purchaser upon reasonable request
and at the costs of the Relevant Purchaser. To the extent that any required
consent by the other contractual party to the assignments of the Contracts
referred to in the preceding paragraph will not have been obtained within four
weeks of Closing, the relevant VIA GmbH Company shall have the right to
terminate such Contract in accordance with its terms or by any mutual agreement
with the other contractual party.

 

2.2.4                   Spain

 

(i)                                  In relation to the transfer of Shares
in Agencia de media numerica España, S.L.:

 

(a)                        Holdco shall deliver to the Relevant
Purchaser the documents of title to the relevant Shares (i.e.: acquisition
title).

 

(b)                       Holdco shall deliver to the notary
appointed in respect of the transfer (the “Notary”)
a certificate issued by the Secretary of the Board of Directors, with the
approval of the President (or the Director, if applicable) declaring that all
requirements established in the law and the bylaws have been fulfilled.

 

(c)                        The transfer of the relevant Shares
shall be effected by notarial deed on terms reasonably satisfactory to the
parties, executed by the Notary.

 

(d)                       The Company in question shall register
the Relevant Purchaser as the owner of the Relevant Shares in the Shareholders
Register (“Libro Registro de Socios”).

 

(e)                        Holdco shall deliver or make available
to the Relevant Purchaser the Company’s corporate books, duly updated.

 

(ii)                               Holdco and the Relevant Purchaser shall
ensure that a sale agreement in respect of Agencia de media numerica España
S.L., on terms reasonably satisfactory to the parties, is executed before the
Notary.

 

(iii)                            Holdco and the Relevant Purchaser shall
execute a sale property agreement in relation to any Business Assets located in
Spain, on terms reasonably satisfactory to the parties, before the Notary.

 

(iv)                           Holdco, the Relevant Purchaser and any
relevant third party shall execute, if necessary under the existing agreements,
an assignment or novation agreement on terms reasonably satisfactory to the
parties.

 

(v)                              Holdco shall deliver to the Relevant
Purchaser as many Third Party Consents as the Holdco may have obtained.

 

 

2.2.5                   United Kingdom

 

Holdco shall
deliver or make available to the Relevant Purchaser the following to the extent
they relate to Amen Ltd:

 

(i)                                  transfers of the relevant Shares duly
executed by the registered holders in favour of the Relevant Purchaser,
accompanied by the relative share certificate (or an express indemnity in a
form satisfactory to the Relevant Purchaser in the case of any certificate
found to be missing);

 

(ii)                               duly executed transfers of the Business
Assets, together with the relative documents of title and the relevant Third
Party Consents;

 

(iii)                            assignments and novations in such form
as may be agreed by Holdco and the Relevant Purchaser (duly executed as a deed
by Holdco, any third party and, if so reasonably required by Holdco, the
Relevant Purchaser) together with the relative documents of title and such
Third Party Consents as Holdco may have obtained;

 

(iv)                           assignments of Registered Intellectual
Property to the extent it has been possible to prepare and execute these by
Closing; and

 

(v)                              those Business Assets which are capable
of transfer by delivery.

 

2.2.6                   Netherlands

 

(i)                                  VIA Inc and Holdco shall transfer the
relevant Shares in VIA NET.WORKS Europe Holding B.V. (“VIA Holding B.V.”) to the Relevant
Purchaser, the Relevant Purchaser shall accept the transfer, and VIA Inc and
Holdco shall procure that Via Holding B.V. acknowledges the transfer, the
foregoing to be effected by execution by VIA Inc, the Relevant Purchaser and
VIA Holding B.V., before a civil law notary, of notarial deeds of transfer on
terms reasonably satisfactory to the parties.

 

(ii)                               Holdco shall transfer the relevant
Shares in PSINet Netherlands B.V. to the Relevant Purchaser, the Relevant
Purchaser shall accept the transfer and Holdco shall procure that PSINet
Netherlands B.V. acknowledges the transfer, the foregoing to be effected by
execution by Holdco, the Relevant Purchaser and PSINet Netherlands B.V., before
a civil notary of notarial deeds of transfer on terms satisfactory to the
parties.

 

(iii)                            The Seller shall transfer to the
Relevant Purchaser all property (other than Intellectual Property) forming part
of the Business Assets by execution by the Seller and Relevant Purchaser before
a civil law notary of notarial deeds of transfer of registered property on
terms reasonably satisfactory to the parties.

 

(iv)                           To the extent that they are not held by
third parties at Closing (the foregoing not detracting from any warranty
contained in this Agreement), the Moveable Assets (including Computer Systems
where appropriate) shall be transferred to the Relevant Purchaser on the
Closing Date by the Seller delivering the assets to the Relevant Purchaser or
giving the Relevant Purchaser access or the keys to the locations where the
aforesaid Business Assets are situated, whereupon the aforesaid Business Assets
shall be at the Relevant Purchaser’s full disposal. The Seller shall also

 

 

deliver to
the Relevant Purchaser all evidence of ownership of the Business Assets
referred to in this paragraph (iv).

 

(v)                              Those Business Assets referred to in
paragraph (iv) above which are held by third parties at Closing (the foregoing
not detracting from any warranty contained in this Agreement), shall be
transferred to the Relevant Purchaser on the Closing Date by virtue of this
Agreement (which shall constitute a deed as required under Dutch law) and by
written notices from the Seller, given also on behalf of the Relevant
Purchaser, to the said third parties that the latter shall from then on hold
the said Business Assets for the Relevant Purchaser, such notices to be
delivered to the third parties by the Seller on or before the Closing Date.

 

(vi)                           The Business Intellectual Property
shall be transferred to the Relevant Purchaser by assignments in respect of
Registered Intellectual Property and an assignment in Agreed Terms in respect
of all other Intellectual Property.

 

(vii)                        The benefit of the Claims (other than
Claims in order or bearer form) and all other rights referred to in the
Agreement (other than rights in order or bearer form), including without
limitation all licences, consents, authorisations, orders, warrants,
confirmations, permissions, certificates, approvals, registrations and
authorities, shall, to the extent permitted by law, be transferred on the
Closing Date to the Relevant Purchaser by virtue of this Agreement. The Sellers
shall give written notice to the affected third parties of the foregoing
transfer on or before the Closing Date.

 

(viii)                     Those Claims and other rights referred
to in the Agreement that are in order or bearer form shall be transferred by
the Seller to the Relevant Purchaser by delivery and, where required,
endorsement, to the Relevant Purchaser of the documents in which such Claims
and other rights are established.

 

(ix)                             The rights and obligations of the
Sellers’ Group arising under the Contracts which require Third Party Consents
that have not been obtained by the Closing Date (the foregoing not detracting
from any obligation of the Seller or right of the Relevant Purchaser under this
Agreement), shall be transferred to the Relevant Purchaser on the terms set out
in Schedule 3.

 

(x)                                In respect of any Contract in respect
of which the required Third Party Consent was obtained prior to signature of
this Agreement, the rights and obligations of the Seller’s Group under such
Contract shall, to the extent permitted by law, be transferred by the Seller to
the Relevant Purchaser on the Closing Date by virtue of this Agreement which
shall constitute a deed of assignment as required under Dutch law. The Seller
and the Relevant Purchaser shall jointly notify the affected third parties of
this assignment by written notice delivered on the Closing Date.

 

(xi)                             The rights and obligations of the
Sellers’ Group under the Contracts in respect of which the required Third Party
Consents are obtained after signature of this Agreement but prior to Closing,
shall, to the extent permitted by law, be transferred by the Seller to the
Relevant Purchaser on the Closing Date by the Seller and the Relevant Purchaser
executing Local Transfer Documents in the form of a deed of assignment on terms

 

 

reasonably
satisfactory to the parties. The Seller and the Relevant Purchaser shall
jointly notify the affected third parties of the foregoing transfer by written
notice delivered on the Closing Date.

 

2.2.7                   United States

 

The Relevant
Purchaser shall deliver or make available to VIA Inc. a receipt for the stock
certificates delivered pursuant to item (i) below.

 

VIA Inc. shall
deliver or make available to the Relevant Purchaser the following to the extent
they relate to VIA NET.WORKS U.S.A., Inc. (“VIA
USA”):

 

(i)                                  stock certificates for the relevant
Shares, each accompanied by a stock power duly executed by the registered
holder of such Shares, in favour of the Purchaser;

 

(ii)                               duly executed transfers of the Business
Assets, together with the relative documents of title and the relevant Third
Party Consents;

 

(iii)                            assignments of Registered Intellectual
Property in accordance with Schedule 4 to the extent it has been possible
to prepare and execute these by Closing;

 

(iv)                           assignments and novations in such form
as may be agreed by VIA Inc. and the Purchaser (duly executed by VIA Inc. and
any third party whose signature is reasonably requested by the Purchaser or VIA
Inc.) together with the relative documents of title and such Third Party
Consents as VIA Inc may have obtained; and

 

(v)                              a certificate stating that VIA Inc (a)
owns 100% of the outstanding issued share capital of VIA USA, (b) consents to
the shares held in VIA USA being transferred and (c) waives any rights it may
have under Article XI.B of the Charter of VIA USA as a result of the
transfer.

 

3                                      Further Obligations in
Addition to Transfer

 

3.1                            General Obligations

 

The Seller shall
deliver or make available to the Relevant Purchasers the following in each case
to the extent applicable and required under the laws of the respective
jurisdiction of the Group Companies:

 

3.1.1                   the written resignations on terms
reasonably satisfactory to the parties (and legalised by a notary where
required) of each of the persons named in Schedule 3 from the office or
position specified in Schedule 3, to take effect on Closing;

 

3.1.2                   evidence that all persons referred to
in 3.1.1 above holding share(s) in any Group Company under a nominee-type
arrangement or any arrangement having a similar effect have transferred such
share(s) to such other persons as the Relevant Purchasers may specify, to take
effect on Closing;

 

3.1.3                   if practicable, the Sellers having used
reasonable endeavours to obtain the same, the written resignations of the
auditors of the Group Companies concerned to take effect on the Closing Date,
with acknowledgements signed by each of them in a form satisfactory to the
Relevant Purchasers to the effect that they have no claim

 

 

against
any Group Company or otherwise complying with any relevant law or regulation;

 

3.1.4                   irrevocable powers of attorney or such
other appropriate document (in such form and terms as the Relevant Purchasers
may reasonably require) executed by each of the holders of the Shares in favour
of the Relevant Purchasers or as it may direct to enable it (pending
registration of the relevant transfers) to exercise post Closing all voting and
other rights attaching to the Shares and to appoint proxies for this purpose
with an express undertaking of the holder of the Shares not to exercise such
voting and other rights attached to the Shares;

 

3.1.5                   written waivers or consents in relation
to pre-emption rights as the Relevant Purchasers may reasonably require signed
by shareholders of the Companies to enable the Relevant Purchasers or its
nominees to be registered as holder of the Shares;

 

3.1.6                   releases or waivers on terms reasonably
satisfactory to the parties in respect of the Encumbrances affecting any of the
Shares, or any of the Business Assets;

 

3.1.7                   any releases which the parties have
obtained under Clause 7.4;

 

3.1.8                   in each case where the said information
is not in the possession of the relevant Group Company, the corporate books and
records, duly written up-to-date), including the shareholders’ register and
share certificates in respect of the Subsidiaries, and all other books and
records, all to the extent required to be kept by each Group Company under the
law of its jurisdiction of incorporation;

 

3.1.9                   in each case where the said information
is not at the Properties all other books, records and other information
relating primarily to the Group Companies or the VIA Operations (save for
books, records and other information which the Seller is required by law to
retain) and all information relating to customers, suppliers, agents and
distributors and other information relating primarily to the Group Companies or
the VIA Operations (including the Relevant Employees) as the Relevant Purchasers
may reasonably require and copies, or, at the Seller’s option, originals of any
such books, records, documents or other information in the possession or
control of the Seller which relate only in part to the Group Companies or the
VIA Operations and which the Relevant Purchasers may reasonably require;

 

3.1.10            evidence as to:

 

(i)                                  the acceptance by shareholders or the
directors of each of the relevant Group Companies of the resignations referred
to in paragraph 3.1.1;

 

(ii)                               the acceptance by shareholders of the
relevant Group Companies of the resignation of the auditors referred to in
paragraph 3.1.3; and

 

(iii)                            the approval by the shareholders or the
directors of the transfer of the Shares or the sale of the VIA Operations to
the Relevant Purchasers,

 

where such
acceptance or approval is required by law or under the constitutional documents
of the Group Company concerned;

 

 

3.1.11            evidence reasonably satisfactory to the
Relevant Purchasers of the revocation of existing authorities given by the Group
Company to banks (in respect of the operation of its bank accounts);

 

3.1.12            other requirements, e.g. certified
copies of board resolutions changing registered office, changing accounting
reference date, changing constitutional documents; and

 

3.1.13            all original deeds and documents
relating to any Group Company’s interests in or title to the Properties to the
extent the same are not in the possession or under the control of the relevant
Group Company.

 

 

Schedule 7

Warranties given under Clause 8.1

 

1                                      Corporate Information

 

1.1                            The Shares and the Group
Companies

 

1.1.1                   The Relevant Seller listed in Schedule 1:

 

(i)                                  is the sole legal and beneficial owner
of the Shares listed opposite the name of that Seller in Schedule 1; and

 

(ii)                               has the right to exercise all voting
and other rights over the Shares.

 

1.1.2                   The Shares comprise the whole of the
issued share capital of the Companies, have been properly and validly issued
and are each fully paid.

 

1.1.3                   The shareholders specified in paragraph
2 of Schedule 2:

 

(i)                                  are the sole legal and beneficial
owners of the shares in the Subsidiaries; and

 

(ii)                               have the right to exercise all voting
and other rights over such shares.

 

1.1.4                   The shares in the Subsidiaries comprise
the whole of the issued and allotted share capital of the Subsidiaries, have
been properly and validly issued and allotted and each are fully paid.

 

1.1.5                   No person has the right (whether
exercisable now or in the future and whether contingent or not) to call for the
allotment, conversion, issue, registration, sale or transfer, amortisation
or repayment of any share capital or any other security giving rise to a right
over, or an interest in, the capital of any Group Company under any option,
agreement or other arrangement (including conversion rights and rights of
pre-emption).

 

1.1.6                   There are no Encumbrances on the shares
in any Group Company.

 

1.1.7                   No third party consents are required
for the transfer of the Shares pursuant to this Agreement other than the
approval of VIA Stockholders as referred to in Clause 4.1.

 

1.1.8                   No Group Company has any interest in,
or has agreed to acquire, any share capital or other security referred to in
paragraph 1.1.5 of any other company (wherever incorporated) other than the
Subsidiaries set out in Schedule 2.

 

1.1.9                   The particulars contained in Schedule 2
are true and accurate.

 

1.2                            Constitutional Documents,
Corporate registers and minute books

 

1.2.1                   The constitutional documents in the
Data Room are true and accurate copies of the constitutional documents of the
Group Companies and there have not been and are not any breaches by any Group
Company of its constitutional documents which would have a material adverse
effect on the business of the Group.

 

1.2.2                   The register of members and minute
books for meetings of members required to be maintained by each Group Company
under the law of the jurisdiction of its incorporation:

 

 

(i)                                  are up-to-date;

 

(ii)                               are maintained in accordance with
applicable law; and

 

(iii)                            contain complete and accurate records
of all matters required to be dealt with in such books and register,

 

in each case in
all material respects.

 

1.2.3                   All registers of members and minute
books of the Group Companies are in the possession (or under the control) of
the Sellers, the relevant Group Company or legal counsel to the relevant Group
Company and no written notice or allegation that any of such books and records
is incorrect or should be rectified has been received.

 

2                                      Accounts

 

2.1                            Consolidated Accounts

 

The Consolidated
Accounts have been prepared in accordance with applicable law and with US GAAP
at the Accounts Date so as to give a true and fair view of the state of affairs
of the VIA Group and the Group Companies taken as a whole at the Accounts Date
and of the profits or losses for the period concerned.

 

2.2                            Solus Accounts

 

The Solus
Accounts have been prepared in accordance with applicable law and with the
accounting principles, standards and practices generally accepted at 31 December 2003
in the jurisdiction in which the relevant Group Company is incorporated so as
to give a true and fair view of the state of affairs of each Group Company for
which Solus Accounts have been prepared at 31 December 2003 and of the
profits or losses for the period concerned.

 

2.3                            Management Accounts

 

2.3.1                   The unaudited management accounts
relating to the Group Companies for the two (2) month period ended 28 February 2005
(the “Management Accounts” and the
“Management Accounts Date”,
respectively), a copy of which is included in the Data Room under the folder
entitled “VIA Inc”, have been prepared on bases consistent in all material
respects with those employed in the preparation of the Consolidated Accounts,
as adjusted for US GAAP.

 

2.3.2                   The Management Accounts do not
materially misstate the assets and liabilities of the Group as at the
Management Accounts Date nor the profits or losses of the Group for the period
concerned having regard to the purposes for which they have been prepared.

 

3                                      Financial Obligations

 

3.1                            Financial Facilities

 

Details of all
financial facilities (including loans, derivatives and hedging arrangements
outstanding or available to the Group Companies are given in the Disclosure
Letter and/or the Data Room.

 

 

3.2                            Guarantees

 

Other than in the
ordinary and usual course of
business or pursuant to this Agreement or the Finance Documents, there is no
outstanding guarantee, indemnity, suretyship or security given:

 

3.2.1                   by any Group Company; or

 

3.2.2                   for the benefit of any Group Company.

 

4                                      Assets

 

4.1                            The Properties

 

4.1.1                   No Group Company owns any real
property.

 

4.1.2                   True and complete copies of all leases
with a rental cost in excess of EUR 75,000 per lease relating to office
and data centres relevant to any Group Company’s are contained in the Data
Room.

 

4.1.3                   Each Property has the benefit of such
rights in the document entitled “Real Property Leasehold Interest Summary
Relating to Offices and Data Centres” and easements as are necessary for the
existing use of the Property.

 

4.1.4                   There is no outstanding notice or
dispute involving the relevant Group Company and any third party as to the
occupation or use of any Property which would, if implemented or enforced, have
a material adverse effect on the business of the Group carried out at that
Property.

 

4.2                            Leases

 

Where any
Property is leased by a Group Company:

 

4.2.1                   there is no subsisting breach (other
than non or late payment of rent and no non-observance of any covenant,
condition or agreement contained in the lease under which the Group Company
holds its interest in the Property, on the part of the relevant landlord or the
Group Company, which would have a material adverse effect on the business of
the relevant Group Company carried on at the Property.

 

4.2.2                   there is no right for the landlord to
terminate the lease before the expiry of the contractual term other than by
breach of the lease by the lessee.

 

4.3                            Ownership of Assets

 

All tangible
assets included in the Accounts or acquired by any of the Group Companies since
the Accounts Date, excepting rights and retention of title arrangements arising
by operation of law or in the ordinary and
usual course of business (such as leasing arrangements):

 

4.3.1                   are legally and beneficially owned by
the Group Companies;

 

4.3.2                   are, where capable of possession, in
the possession or under the control of the relevant Group Company except
Customer Premises Equipment, situated at customer sites or physical points of
presence and assets owned by the Group Companies at physical points of
presence;

 

 

4.3.3                   are free from Encumbrances other than
Permitted Encumbrances (save for Permitted Encumbrances of the type described
in paragraph (b) of the definition of Permitted Encumbrances);

 

4.3.4                   are not the subject of any factoring
arrangement, conditional sale or credit agreement.

 

5                                      Intellectual Property and
Information Technology

 

5.1                            Ownership etc.

 

5.1.1                   All of the Business Intellectual
Property and the Material Group IP is:

 

(i)                                  legally owned, licensed to or used
under the authority of the owner by the Seller, in the case of the Business
Intellectual Property; or

 

(ii)                               legally owned by, licensed to or used
under the authority of the owner by the Group Companies, in the case of the
Material Group IP.

 

Copies of all
such licences and authorities (excluding any shrink-wrap licences for computer
software and domain names) are included in the Data Room.

 

5.1.2                   The Material Group IP and the Business
Intellectual Property in each case owned by the Group Companies or the Sellers
as the case may be is:

 

(i)                                  not being infringed, attacked or
opposed by any person;

 

(ii)                               not licensed to a third party other
than pursuant to an agreement identified in the Data Room, to end users in the
ordinary course of business under end user license agreements or except as set
out in the Disclosure Letter; and

 

(iii)                            not subject to any Encumbrance other
than a Permitted Encumbrance (save for Permitted Encumbrances of the type
described in paragraph (b) of the definition of Permitted Encumbrances).

 

5.1.3                   The Data Room lists all Registered
Intellectual Property:

 

(i)                                  forming part of the Business
Intellectual Property; or

 

(ii)                               owned by a Group Company and forming
part of the Group Intellectual Property.

 

5.1.4                   The document entitled “Business
Intellectual Property” contained in the Data Room lists all unregistered trade
marks:

 

(i)                                  forming part of the Business
Intellectual Property; or

 

(ii)                               owned by a Group Company and forming
part of the Group Intellectual Property and which in each case is, material to
the business of the Group.

 

5.2                            Licences

 

The:

 

5.2.1                   Licence Agreements; and

 

5.2.2                   all licences and agreements relating to
the Material Group IP are included in the Data Room,

 

 

(including all
amendments, novations, supplements or replacements to those licences and
agreements) are in full force and effect, no notice having been given on either
side to terminate them and the obligations of all parties have been fully
complied with.

 

5.3                            Employee Rights

 

Except as set out
in the Data Room, there are no outstanding claims against any Group Company or
the Seller under any contract or under any law providing for employee
compensation in respect of any rights or interests in Intellectual Property.

 

5.4                            Infringement

 

5.4.1                   Excluding patents and similar rights,
the processes employed and the products and services dealt in by:

 

(i)                                  the Seller in relation to or in
connection with the business of the Group; and

 

(ii)                               each Group Company,

 

do not use,
embody or infringe any rights or interests of any third party in Intellectual
Property (other than those licensed to the Seller or the Group Companies pursuant
to the agreements described at paragraph 5.2 above) which would have a material
adverse effect on the business of the Group.

 

5.4.2                   Excluding patents and similar rights,
no written notice of any claims of infringement of rights or interests, in each
case of the nature referred to in 5.4.1, has been received by any Group Company
or member of the VIA Group.

 

5.5                            Sufficiency

 

The Business
Intellectual Property and the Group Intellectual Property comprise sufficient
rights and interests in Intellectual Property reasonably necessary for the
carrying on of the business of the Group in the manner and to the extent
carried on as at the date hereof.

 

5.6                            Other Provisions

 

5.6.1                   The Data Room contains a full list of
domain names under the folder entitled “Domain Names” which are:

 

(i)                                  included in the Business Intellectual
Property; or

 

(ii)                               registered in the name of any Group
Company and included in the Group Intellectual Property.

 

5.6.2                   No action has been knowingly taken by
the Seller or any Group Company to damage or otherwise adversely affect the
reputation or goodwill associated with any unregistered trade mark identified
in set out in the document entitled “Business Intellectual Property” contained
in the Data Room.

 

5.7                            Computer Systems

 

5.7.1                   In relation to the Seller’s Computer
Systems and the Group Companies’ Computer Systems:

 

(i)                                  the present capacity, capability,
functionality and performance of the Computer Systems are sufficient to satisfy
the business requirements of the Group Companies as at the date hereof;

 

 

(ii)                               there are no performance reductions or
breakdowns of, or logical or physical intrusions to, any Computer Systems or
losses of data which are having a material adverse effect on the business of
the Group;

 

(iii)                            each of the Computer Systems are owned
by, leased by or licensed to the relevant Group Company;

 

(iv)                           the Data Room contains accurate details
of the Group’s current procedures with a view to security of the Computer
Systems and data stored on them;

 

(v)                              the data storage capability,
functionality and performance of the Computer Systems are sufficient in all
material respects to conduct the Group’s business (as it is now conducted);

 

(vi)                           the Group Companies have full and
unrestricted access to and use of the Computer Systems and no third party
agreements or consents are required to enable the Group Companies to continue
such access and use following Closing; and

 

(vii)                        all material services relating to, and
licences of, Computer Services are provided under written contracts with the Group
(including maintenance and support, security, disaster recovery, management and
utilisation (including escrow arrangements relating to the deposit of source
codes, facilities management and computer bureau services agreements)) and true
copies of which are included in the Data Room.

 

5.7.2                   The Computer Systems are sufficient for
the purposes of carrying on the business of the Group in the manner and to the
extent carried on as at the date hereof.

 

5.7.3                   All the operating data of the Group
Companies (being data materially required for the Group Companies to be able to
provide services to their customers, to bill such customers, pay their
suppliers, manage and compensate their employees and maintain internal and
external e-mail communications systems for their employees) has been regularly
archived in soft copy form.

 

5.7.4                   The Group Company has in its
unencumbered possession or has unrestricted access to up-to-date and accurate
source code for all material bespoke software which has been written or produced
in-house by the Group.

 

5.7.5                   Copies of all licences and escrow
agreements relating to software material to the Group, either individually or
in the aggregate, are included in the Data Room. The licences of such software
have been complied with by the relevant Group Company in all material respects
in the operation of the business of the Group and any restrictions in those
licences do not materially and adversely affect the present conduct of the
business of the Group.

 

5.8                            Data Protection

 

5.8.1                   No written notice alleging
non-compliance with any applicable data protection legislation (including any
enforcement notice, deregistration notice, transfer prohibition notice or any
equivalent notice) has been received by any of the Group Companies or the Seller
from any competent data protection authority.

 

5.8.2                   No Group Company or the Seller is
involved in a dispute with an individual in respect of any infringement or
alleged infringement of any applicable data

 

 

protection
legislation and no Group Company or the Seller has received a written claim for
compensation from any individual in respect of any such infringement or alleged
infringement in the previous 12 months.

 

5.8.3                   There is no outstanding court order
against any Group Company or the Seller in respect of the rectification or
erasure of personal data.

 

6                                      Contracts

 

6.1                            Contracts

 

No Group Company
is a party to or subject to any Material Contract which:

 

6.1.1                   is not in the ordinary and usual course of business;

 

6.1.2                   is not on an arm’s length basis;

 

6.1.3                   is of a long term nature that is,
unlikely to have been fully performed, in accordance with its terms, more than
36 months after the date on which it was entered into or undertaken;

 

6.1.4                   restricts its freedom to carry on its
business in any part of the world in such manner as it thinks fit so as to have
a material adverse effect on the Group.

 

6.2                            Joint Ventures etc.

 

Except as
disclosed in the Data Room, no Group Company is, or has agreed to become, a
member of any joint venture, consortium, partnership or other association
(other than a recognised trade association in relation to which the Group
Company has no liability or obligation except for the payment of annual
subscription or membership fees).

 

6.3                            Agreements with Connected
Parties

 

6.3.1                   There are no existing contracts, and
have not been since 1 January 2004 any contracts, between, on the one
hand, any Group Company and, on the other hand, the Seller or any other member
of the VIA Group other than on normal commercial terms in the ordinary and usual course of business or which
cannot be terminated on less than 30 days notice and other than those contracts
included in the Data Room.

 

6.3.2                   The Seller is not nor is any Group
Company party to any contract material to the business of the Group, with any
current or former employee or current or former director or officer of any such
Group Company or the Seller or in which any such person is interested (whether
directly or indirectly), other than on normal commercial terms in the ordinary and usual course of business.

 

6.4                            Material Contracts

 

6.4.1                   All the Material Contracts to which a
Group Company is party are in full force and effect and other than the late or
non-payment of monies owing, have been duly complied with by the relevant Group
Company in all material respects and nothing has occurred whereby any of them
is subject to early termination or which has given rise to a material claim in
damages under any of them by any party to any of them.

 

6.4.2                   Copies of all Contracts and Material
Contracts are contained in the Data Room.

 

 

6.4.3                   The transactions contemplated by this
Agreement will not result in a material breach of, or give any third party a
right to terminate any Material Contract.

 

7                                      Employees and Employee
Benefits

 

7.1                            Employees and Terms of
Employment

 

7.1.1                   The Data Room contains details, in
relation to each Group Company and the VIA Operations, of:

 

(i)                                  the total number of the Employees;

 

(ii)                               the salary and other benefits, period
of continuous employment, location, grade, age and notice period of each
Employee; and

 

(iii)                            the terms of the contract of employment
of each Senior Employee.

 

7.2                            Termination of Employment

 

7.2.1                   Since 31 December 2004 no Senior
Employee has given or received notice terminating his or her employment.

 

7.2.2                   In relation to any claim received by a
Group Company, no liability which remains undischarged has been incurred by any
Group Company or the Seller for:

 

(i)                                  breach of any contract of employment
with any Employee; or

 

(ii)                               breach of any statutory employment
right.

 

7.2.3                   Except as provided, reflected or noted
in Management Accounts, neither the Seller nor any Group Company has made or
agreed to make any payment or provided or agreed to provide any benefit to any
Employee or former employee employed by the Group Company or the Seller with
regard to the VIA Operations since 31 December 2004 or any dependant of
such Employee or former employee in connection with the proposed termination or
suspension of employment of any such Employee or former employee.

 

7.3                            Works Councils and Employee
Representative Bodies

 

The Data Room
contains details of all work councils and employee representative bodies which
by law or any collective bargaining agreement have the right to be informed
and/or consulted on matters which affect the Employees.

 

7.4                            Collective Bargaining
Agreements etc.

 

Other than
national collective bargaining agreements or industry wide collective
agreements, the union recognition agreements, collective agreements and
European Works Council agreements contained in the Data Room are all the
agreements between the Group Companies and the Seller and trade unions or
representative bodies.

 

7.5                            Bonus or other Profit-related
Schemes

 

There are
contained in the Data Room the rules and other documentation relating to all
share incentive, share option, profit sharing, bonus or other incentive
arrangements for or affecting any Employees or other workers or former employees
or other former workers of

 

 

the Group
Companies or the Seller since 31 December 2003 together with details of
all awards allocated and options granted by each Group Company.

 

7.6                            Group Retirement Benefit
Arrangements

 

The Group
Companies are in compliance with the terms of any retirement, death, disability
or life assurance benefits provided to Employees in all material respects and
the Data Room contains copies of all such forms as are material in the context
of the Group.

 

8                                      Legal Compliance

 

8.1                            Licences and Consents

 

To the extent
that either of the Sellers or any Group Company is solely responsible for
obtaining them, all licences, consents, authorisations, orders, warrants,
confirmations, permissions, certificates, approvals, registrations and
authorities material to the business of the Group as carried on at the date
hereof have been obtained, are in force and are being complied with in all
material respects.

 

8.2                            Compliance with Laws

 

8.2.1                   Each Group Company and the Seller is
conducting, and during the two year period prior to Closing or, if shorter, the
period since the relevant Group Company was acquired by the Seller’s Group, has
conducted, the business of the Group in material compliance with applicable
laws and regulations in each country in which the business of the Group is
carried on except where such non-compliance does not materially and adversely
effect the present conduct of the business of the Group.

 

8.2.2                   There is no investigation, disciplinary
proceeding or enquiry by, or order, decree, decision or judgment of, any court,
tribunal, arbitrator, governmental agency or regulatory body outstanding
against any Group Company or the Seller or any person for whose acts or
defaults it may be vicariously liable which would have a material adverse
effect upon the business of the Group.

 

8.2.3                   No Group Company or the Seller has
received any written notice during the past 12 months from any court, tribunal,
arbitrator, governmental agency or regulatory body with respect to a violation
and/or failure to comply with any applicable law or regulation or requiring it
to take or omit any action which in any case would have a material adverse
effect on the business of the Group.

 

9                                      Litigation

 

9.1                            Current Proceedings

 

Except as set out
in the Data Room, no Group Company nor either Seller is involved whether as
claimant or defendant or other party in any claim, legal action, proceeding,
suit, litigation, prosecution, investigation, enquiry or arbitration (other
than as claimant in the collection of debts arising in the ordinary and usual course of its business none
of which exceeds $20,000) which would have a material adverse effect on the
business of the Group.

 

 

9.2                            Threatened Proceedings

 

No such claim,
legal action, proceeding, suit, litigation, prosecution, investigation, enquiry
or arbitration of material importance has been threatened in writing by or
against any Group Company or the Seller (or any person for whose acts or
defaults a Group Company or the Seller may be vicariously liable) which would
have a material adverse effect on the business of the Group.

 

9.3                            Circumstances likely to lead
to claims

 

The Seller has
not received any written notice of any investigation, disciplinary proceeding
or other circumstances likely to lead to any such claim or legal action,
proceeding, suit, litigation, prosecution, investigation, enquiry or
arbitration which would have a material adverse effect on the business of the
Group.

 

9.4                            Disputes with Creditors

 

Material
particulars of all disputes (other than those relating solely to the late
payment or non-payment of monies due) between each Group Company and its
creditors in respect of amounts of $100,000 or more due to such creditors are
set out in the Disclosure Letter or in the Data Room.

 

10                               Insurance

 

10.1                     Particulars of Insurances

 

Copies of all
documentation relating to the insurance policies of the Group Companies in the
possession of the Seller and material to the business of the Group are
contained in the Data Room.

 

10.2                     Insurance Claims

 

10.2.1            Details of all outstanding insurance
claims in excess of $100,000 made during the past twelve (12) months are
contained in the Disclosure Letter or the Data Room.

 

10.2.2            No circumstances exist which are likely
to give rise to any insurance claim in excess of $100,000.

 

11                               Tax

 

11.1                     Company Residence

 

Each Group
Company has been resident for tax purposes in its country of incorporation and
has not been resident anywhere else at any time since its incorporation and
will be so resident at Closing. For the avoidance of doubt, references to
residence in this paragraph shall be construed as references to residence as
determined by the local law of the jurisdiction or jurisdictions concerned and
not by reference to the provisions of any relevant double taxation treaty or
convention.

 

11.2                     Returns and Information

 

11.2.1            All registrations, returns,
computations, notices and information which are or have been required to be
made or given in the previous twelve months by each Group Company for any
Taxation purpose (i) have been made or given on a proper basis

 

 

and are
up-to-date and correct and (ii) no written notice has been received by any
Group Company of any dispute with any Tax Authority.

 

11.2.2            Each Group Company has maintained all records required to be maintained
for Taxation purposes or which may be required to calculate any Taxation
payable or the amount of any Taxation Benefit.

 

11.3                     Payment of Taxation

 

11.3.1            In the two years prior to the date
hereof, each Group Company has paid all Taxation which it is or has been liable
to pay or account for and the due date for payment of which has fallen prior to
the date hereof and has not received any written notice that it is liable to
any fine, penalty, surcharge or interest in connection with Taxation that
remains outstanding.

 

11.3.2            In the two years prior to the date
hereof, each Group Company has deducted or withheld all Taxation which it has
been obliged by law to deduct or withhold from payments made by it and has
properly accounted to the relevant Tax Authority for the Taxation so deducted
or withheld.

 

11.4                     Special
Regimes/Elections/Rulings

 

There are set out
in the Disclosure Letter, with express reference to this paragraph, full
particulars of any agreement, arrangement or election between any Group Company
and any Tax Authority pursuant to which the relevant Group Company is
authorised not to comply with, but for such agreement or arrangement, would be
its statutory obligations.

 

11.5                     Tax Equalisation Payments

 

11.5.1            No Group Company is under any
obligation to surrender or otherwise transfer any Taxation Benefit.

 

11.5.2            No Group Company is liable to make a payment
for utilisation, surrender or other transfer of any Taxation Benefit (“Taxation Equalisation Payment”), nor is any
Taxation Equalisation Payment received by any Group Company liable to be
refunded.

 

11.5.3            There are set out in the Disclosure
Letter, with express reference to this paragraph, or the Data Room, full
particulars of all surrenders or other transfers of any Taxation Benefit made
by any Group Company since the Accounts Date.

 

12                               Important Business Issues
since the Accounts Date

 

12.1                     Since 31 December 2004:

 

12.1.1            there has been no material adverse
change in the financial or trading position or prospects of the Group taken as
a whole (other than (i) in connection with the current financial position of
the Group to the extent disclosed to the Relevant Purchasers in the Data Room
in writing or otherwise publicly available (including without limitation the
liquidity of the Group and the individual Group Companies); (ii) a change
affecting or likely to affect all companies carrying on business in similar
countries in which the Group carries on business); (iii) a material adverse
change in stock or other financial markets, interest rates, exchange rates or
other general economic conditions; (iv) any matter contained in the Disclosure
Letter or

 

 

the Data
Room; or (v) any matter effected pursuant to or in accordance with this
Agreement including the change in control of the Group Companies resulting from
the sale and purchase of the Shares) and no event, fact or matter has occurred
which will give rise to any such change;

 

12.1.2            no Group Company has acquired, or
agreed to acquire, any single capital asset having a value in excess of
$100,000;

 

12.1.3            no Group Company has disposed of,
written off, or agreed to dispose of or write off, any capital asset having a
value reflected in the Accounts in excess of $100,000 or acquired since the
Accounts Date;

 

12.1.4            except as provided in the Finance
Documents, no Group Company has borrowed or raised any money or taken up any
financial facilities and no Group Company has repaid any borrowing or
indebtedness in advance of its stated maturity;

 

12.1.5            no dividend or other payment which is,
or could be treated as, a distribution has been declared, paid or made by any
Group Company;

 

12.1.6            except in connection with the
transaction contemplated by this Agreement or in the ordinary course of
business, no resolution of the shareholders of any Group Company has been
passed;

 

12.1.7            no Group Company has changed its
accounting reference date;

 

12.1.8            no share or loan capital has been
allotted, issued, repaid or redeemed or agreed to be allotted, issued, repaid
or redeemed by any Group Company; and

 

12.1.9            no Group Company has redeemed or
purchased or agreed to redeem or purchase any of its share capital.

 

12.16              Since the
Management Accounts Date no Group Company has sold or agreed to sell a debt at
less than its value in the Management Accounts and no debt has been released,
deferred, subordinated or written off by any Group Company other than between
Group Companies or between Group Companies and the VIA Group.

 

13                               Disclosure of Information

 

13.1                     The Data Room has been collated by the
Seller in good faith and the Seller has not knowingly included any matter which
is untrue or knowingly omitted any matter the omission of which is material to
the business of the Group.

 

13.2                     Each document in the Data Room is a
true and complete copy of the original of such document.

 

14                               Authority and Capacity

 

14.1.1            The Seller and each Group Company is
validly existing and is a company duly incorporated under the law of its
jurisdiction of incorporation.

 

14.1.2            The Seller has the legal right and full
power and authority to enter into and subject to the approval of the VIA
Shareholders, perform this Agreement, any Local Transfer Document to which it
is a party and any other documents to be executed by it pursuant to or in
connection with this Agreement or any Local Transfer Document.

 

 

14.1.3            The documents referred to in paragraph
16.1.2 will, when executed, constitute valid and binding obligations on the
Seller, in accordance with their respective terms.

 

14.1.4            The Seller has taken or will have taken
by Closing all corporate action required by it to authorise it to enter into
and to perform this Agreement, any Local Transfer Document to which it is a
party and any other documents to be executed by it pursuant to or in connection
with this Agreement or any Local Transfer Document.

 

15                               Insolvency etc.

 

15.1.1            No Group Company or the Seller will be
rendered insolvent by any of the transactions contemplated herein or in
connection with the Facility Agreement and any related documents (the “Contemplated Transactions”), under the laws
of its jurisdiction of incorporation or rendered unable to pay its debts as
they fall due.

 

15.1.2            Immediately after giving effect to the
consummation of the Contemplated Transactions, including the receipt of the
amounts payable by the Relevant Purchasers under this Agreement for the sale of
the Shares (i) the Seller will be able to pay its Liabilities as they become
due in the usual course of its business, (ii) the Seller will not have
unreasonably small capital with which to conduct its present or proposed
business, (iii) the Seller will have assets (calculated at fair market value)
that exceed its Liabilities and (iv) taking into account all pending and
threatened litigation, final judgments against the Seller in actions for money
damages are not reasonably anticipated to be rendered at a time when, or in
amounts such that, the Seller will be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum
probable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered) as well as all other
obligations of the Seller. The cash available to the Seller, after taking into
account all other anticipated uses of the cash, will be sufficient to pay all
such debts and judgments promptly in accordance with their terms.

 

15.1.3           For the purposes of paragraph 15.1.2
above:

 

“Governmental Body” means any:

 

(i)                                  nation, state, county, city, town,
borough, village, district, or other jurisdiction;

 

(ii)                               federal, state, local, municipal,
foreign, or other government;

 

(iii)                            governmental or quasi-governmental
authority of any nature (including any agency, branch, department, board,
commission, court, tribunal or other entity exercising governmental or
quasi-governmental powers); or

 

(iv)                           body exercising, or entitled or
purporting to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power;

 

“insolvent” means that the sum of the
present fair saleable value of Seller’s assets does not and will not exceed its
debts and other probable Liabilities;

 

“Liability” means with respect to any
Person, any liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or

 

 

unliquidated,
secured or unsecured, joint or several, due or to become due, vested or
invested, executory, determined, determinable or otherwise and whether or not
the same is required to be accrued on the financial statements of such Person;
and

 

“Person” means an individual, partnership,
corporation, business trust, limited liability company, limited liability
partnership, joint stock company, trust, unincorporated association, joint
venture or other entity, or a Governmental Body.

 

15.1.4            In the twelve month period prior to the
date hereof, no Group Company or the Seller has been held in material default
by lenders under any debt financing.

 

15.1.5            No order for the winding up of any
Group Company has been made.

 

15.1.6            No administrator or administrative
receiver has been appointed in respect of the assets of the Group Companies.

 

15.1.7            No steps have been taken to enforce any
security over any assets of any Group Company or the Seller and no event has
occurred to give the right to enforce such security.

 

 

Schedule 8

Working Capital Projections

 

 

Schedule 9

Guarantees

 

PART A

 

GROUP
COMPANY GUARANTEES:

 

The Sellers shall
use their reasonable endeavours to procure on or prior to Closing the release
of each relevant Group Company from any guarantees or indemnities (other than
any guarantee or indemnity which is an Assumed Liability) given by or binding
upon the Group Company in respect of any liability of the Sellers or any other
member of the VIA Group. Pending such release, the Sellers shall indemnify the
Relevant Purchasers and any Group Companies against all amounts paid by any
Group Company pursuant to any such securities, guarantees and indemnities in
respect of such liability of the Sellers or any member of the VIA Group.

 

PART B

 

VIA CASH
COLLATERALIZED GUARANTEES:

 

With respect to the restricted cash account of VIA
NET.WORKS, Inc. and guarantee issued by ING Bank N.V. dated 20/12/2004 in the
amount of €200,000 to the credit of VIA NET.WORKS, Inc. in favour of STEAG
Energie-Contracting GmbH (“STEAG”) and for the benefit of PSINet Datacenter Germany
GmbH concerning the office and Datacenter at Paul-Stern-Str. 63 in Berlin (“VIA STEAG Guarantee”):

 

The Sellers shall use their
reasonable endeavours to procure on or prior to Closing the release and
replacement of that certain guarantee and restricted cash account of VIA Inc in
the amount of €200,000 in favour of STEAG. If the Sellers have not caused a
Group Company to do so prior to Closing, so long as the guarantee and
restricted cash account of VIA Inc remains outstanding the Relevant Purchasers
shall indemnify the Sellers against all amounts paid by VIA Inc. arising out of
the VIA STEAG Guarantee.

 

VIA
GUARANTEES (NON-CASH COLLATERALIZED):

 

The Relevant
Purchasers shall use their reasonable endeavours to procure on or as soon as
reasonably practicable following Closing the release of each relevant member of
the VIA Group from the guarantees or indemnities given by or binding upon any
member of the VIA Group in respect of any liability of the Group Companies
including without limitation those set out below. Pending such release, the
Relevant Purchasers shall indemnify the Sellers against all amounts paid by any
member of the VIA Group pursuant to any such securities, guarantees and
indemnities in respect of such liability of the Group Companies.

 

a.  Guaranty from VIA Inc dated
21 May 2004 in favour of Schuberg Philis B.V. in respect of the obligations of
VIA NET.WORKS Europe Holding B.V. under the Master Services Agreement with
Schuberg Philis dated 19 May 2004.

 

b.  Guarantee from VIA Inc dated
10 December 2004 in favour of Metrolinx Sarl in respect of the obligations
of PSINet Switzerland Sarl under the lease agreement dated 17 October 2003.

 

c.  Declaration dated as of 1 April 2005
in favour of VIA NET.WORKS (Schweiz) A.G. in relation to the Amendment Number
Three and the related existing agreements between PSINet Switzerland Sarl and
TDC Switzerland AG dated 29 December 2004, with guarantees extended by VIA
Inc. and VIA NET.WORKS Europe Holding B.V.

 

 

d.  Amendment Number Three
between PSINet Switzerland Sarl and TDC Switzerland AG dated 29 December 2004

 

e.  Indemnity from VIA NET.WORKS
Holdco, Inc. in favour of Alfa Accountants in respect of claims from the Dutch
treasury and the UWV arising out of the agreement of PSINet Netherlands BV to
provide certain hosting services to Alfa Accountants.

 

f.  Guarantee, indemnity and/or
joint liability by VIA Inc. of obligations of Group Companies arising under
agreements between VIA Inc and each of the following entities: (i) (i)
Watchguard Technologies, Inc., (ii) GRIC Communications, Inc. and (iii)
Melbourne IT Ltd. (IMWW), which shall be released upon novation or assignment
of the agreements pursuant to Clause 2.3.1(iv) and Schedule 3 of this
Agreement.

 

VIA
SUPPORT AND COMFORT LETTERS

 

At the Closing,
the Relevant Purchasers shall deliver a letter of support to the directors of

 

VIA NET.WORKS France SAS,

 

VIA NET.WORKS France Holding SA,

 

PSINet Germany GmbH

 

PSINet Datacenter Germany GmbH

 

VIA NET.WORKS Deutschland GmbH

 

PSINet Switzerland Sarl

 

VIA NET.WORKS Espana S.L.

 

in respect of the
present and future liabilities of those companies in replacement and
substitution of letters of support and comfort from the Relevant Sellers

 

 

Table of
Contents

 

	
  Contents

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Agreement to Sell
  the Group

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Consideration

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Pre-Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Post-Closing
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Limitation
  of Seller’s Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Intellectual
  Property

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Other Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1
  Part 1 Details of the Shares etc. (Clause 1.1)

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2
  Companies and Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 3
  Contracts (Clause 2.3.1(iv))

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4
  Employees (Clause 2.4)

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 5 VAT

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6
  Closing Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 7 Warranties given under Clause 8.1

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 8 Working Capital Projections

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 9
  Guarantees

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