Document:

<PAGE>
                                                                   EXHIBIT 10.33

                                    EXECUTIVE
                              EMPLOYMENT AGREEMENT
                                     R. CUNY

            This Employment Agreement, is made and entered into as of October
22, 2002, between SMITH & WESSON HOLDING CORPORATION, a Nevada corporation (the
"Company"), and ROY CUNY, an individual ("Employee").

            In consideration of the covenants and agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:

            1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings indicated:

                  1.1 Company means Smith & Wesson Holding Corporation or any
      successor entity.

                  1.2 Company Board means the Company Board of Directors or the
      Board of Directors of any successor entity of Company.

                  1.3 Effective Date means the date first set forth above.

                  1.4 Termination for Cause means the termination of employment
      of Employee by the Company's Chief Operating Officer and/or Chief
      Executive Officer because of Employee's personal dishonesty, substantial
      and intentional failure to perform reasonably designated duties, willful
      misconduct, material breach of fiduciary duty involving personal profit,
      willful violation of any material law, rule or regulation resulting in a
      detriment to the Company or reflecting upon the Company's integrity (other
      than minor traffic infractions or similar minor offenses) or a material
      breach by Employee of any term of this Agreement. With respect to all such
      grounds except for those involving personal dishonesty or violation of
      criminal or securities law, Employee shall be provided ten (10) days
      written notice thereof and a reasonable opportunity to cure such breach.
      Only upon the failure to cure such breach within ten (10) days after
      receipt of such written notice from the Company specifying the nature of
      such breach, or the failure to pay compensation to the Company deemed
      reasonable by the Company if the breach cannot be cured, may Employee be
      terminated for cause.

                  1.5 Total and Permanent Disability means an injury or illness
      of Employee that prevents him from performing his customary duties and
      which is expected to be of long continued and indefinite duration and that
      has caused Employee's absence from service for at least sixty (60) days.
<PAGE>
            2. EMPLOYMENT. The Company hereby employs Employee and Employee
accepts employment on the terms and conditions set forth herein.

                  2.1 Term. The term of this Agreement shall commence on the
      date hereof and shall end on the Expiration Date unless terminated in
      accordance with the provisions of Section 3 hereof. The "Expiration Date"
      shall initially be the first anniversary of the Effective Date, provided
      that unless either the Company or Employee elects otherwise at least
      ninety (90) days prior to any applicable Expiration Date, the Expiration
      Date shall be extended automatically for an additional two (2) years.

                  2.2 Duties and Responsibilities. Employee shall initially
      serve as the Vice President of Operations of the Company and be
      responsible for such duties as may be prescribed to him from time to time
      by the Company Board, the Chief Executive Officer of the Company and/or
      the Chief Operating Officer of the Company. Such duties may include,
      without limitation, overseeing the Company's subsidiary Smith & Wesson
      Corp. ("S&W"), maximizing the efficiency of its operations, reviewing the
      performance and compensation of all its personnel, and attending meetings
      from time to time at the headquarters of the Company as may be called by
      its officers and the Company Board. Employee shall initially be located at
      the principal place of business of S&W in Springfield, Massachusetts.
      Employee shall have such title with at least as much status, authority and
      responsibility as his initial position as may be designated by the Company
      Board from time to time.

                  2.3 Compensation. During the term of this Agreement and so
      long as Employee's employment has not been subject to Termination for
      Cause, he shall be entitled to the salary and other employment benefits
      provided in this Section 2.3. Employee shall be entitled to an annual
      salary of $200,000.00 payable pursuant to the Company's employment
      compensation policy as may exist from time to time. Employee shall be
      entitled to prompt reimbursement for business expenses on such basis as
      may be in effect from time to time. Employee shall also be entitled to
      such fringe benefits and receive such performance bonus(es) as may be
      agreed to from time to time in writing by Employee and the Company.

                  2.4 Additional Consideration. Upon the execution of this
      Agreement, Employee shall be entitled to receive stock options pursuant to
      the Company's Stock Option Plan to purchase 300,000 shares of Common Stock
      of the Company, which options shall have an exercise price equal to the
      market price as of the Effective Date and vest in three equal annual
      installments beginning on the first anniversary of the Effective Date.

            3. TERMINATION. Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:

                  3.1 Total and Permanent Disability. In the event that Employee
      suffers Total and Permanent Disability, the Company may terminate
      Employee's

                                       2
<PAGE>
      employment, but shall be obligated to continue Employee's then regular
      salary and continue his benefits hereunder for six months. Employee
      agrees, in the event of any dispute under this Section, to submit to a
      physical examination by a licensed physician selected by the Company, the
      cost of such examination to be paid by the Company, and the decision as to
      Employee's disability shall be conclusive and binding upon the Company and
      Employee. Nothing contained herein shall be construed to affect Employee's
      rights under any disability insurance or similar policy, whether
      maintained by the Company, Employee or another party.

                  3.2 Death. This Agreement shall terminate upon the death of
      the Employee and no further liability to Employee or to Employee's estate
      hereunder shall remain. Nothing contained herein shall be construed to
      affect Employee's rights under any life insurance or similar policy,
      whether maintained by the Company, or another party.

                  3.3 Termination for Cause. The Company may terminate
      Employee's employment for cause. The Company shall have no further
      obligation to pay salary or benefits hereunder after the date of any
      Termination for Cause.

                  3.4 Termination Without Cause. In the event the Company
      terminates Employee's employment "without cause", the Company shall
      continue to be liable to compensate Employee as set forth in this Section
      3.4 for the twelve month period following such termination. Such
      compensation shall consist solely of (a) salary in an amount equal to
      Employee's then-existing base salary multiplied by 1.5, plus (b) such
      fringe benefits as are in place at the time of termination. Employee shall
      receive no bonus compensation during such twelve month period except for
      such bonus(es) which pertain to a period prior to such termination and
      have been accrued but are not due and payable until after such date.

                  3.5 Good Reason Termination by Employee. The Employee may
      terminate employment hereunder for "Good Reason" by delivering to the
      Company (1) a Preliminary Notice of Good Reason (as defined below), and
      (2) not earlier than thirty (30) days from the delivery of such
      Preliminary Notice, a Notice of Termination. For purposes of this
      Agreement, "Good Reason" means (i) the failure to continue the Employee as
      Vice President of Operations of the Company or in another capacity
      contemplated by Section 2 hereof; (ii) the assignment to the Employee of
      any duties materially inconsistent with the Employee's positions, duties,
      authority, and responsibilities as set forth in Section 2 hereof; (iii) a
      reduction in or a material delay in payment of the Employee's total cash
      compensation and benefits from those required to be provided in accordance
      with the provisions of this Agreement; (iv) the Company, the Board or any
      person controlling the Company requires the Employee to be based outside
      of the United States, other than on travel reasonably required to carry
      out the Employee's obligations under the Agreement; or (v) the failure of
      the Company to obtain the assumption in writing of its obligation to
      perform this Agreement by any successor to all or substantially all of the
      assets of the Company within 15 days after a merger,

                                       3
<PAGE>
      consolidation, sale or similar transaction; provided, however, that "Good
      Reason" shall not include (1) acts not taken in bad faith which are cured
      by the Company in all respects not later than thirty (30) days from the
      date of receipt by the Company of a written notice from the Employee
      identifying in reasonable detail the act or acts constituting "Good
      Reason" (a "Preliminary Notice of Good Reason") or (2) acts taken by the
      Company by reason of the Employee's physical or mental infirmity which
      impairs the Employee's ability to substantially perform his duties under
      this Agreement. Notwithstanding the foregoing, in no event shall any new
      bonus arrangement be deemed to be a Good Reason. A Preliminary Notice of
      Good Reason shall not, by itself, constitute a Notice of Termination.

            4. COVENANT NOT TO COMPETE AND CONFIDENTIALITY.

                  4.1 Covenant Not to Compete. Employee shall not engage in any
      business or perform any service, directly or indirectly, or have any
      interest, whether as a proprietor, partner, employee, investor, principal,
      agent, consultant, director or officer, in any enterprise which
      manufactures guns or gun accessories for commercial purposes in the United
      States or which is in substantial competition with the business of the
      Company (i) during the term of his employment, and (ii) for twenty-four
      months after the termination of this Agreement. Nothing in this Section 4
      shall be deemed to prohibit Employee from purchasing less than one percent
      (1%) of the outstanding shares of any corporation whose shares are traded
      on a national exchange and which, at the time of purchase, is not engaged
      in competition with the Company. If any court shall determine that the
      duration or geographical limit of the foregoing restriction is
      unenforceable, it is the intention of the parties that the foregoing
      restriction shall not be terminated but shall be deemed amended to the
      extent required to render it valid and enforceable, such amendment to
      apply only with respect to the operation of this Section 4 in the
      jurisdiction of the court that has made the adjudication.

                  4.2 Confidential Information. Employee acknowledges that he
      has and will have access to trade secrets and confidential business
      information of the Company throughout the term of this Agreement and that
      any such trade secret or confidential information, regardless of whether
      Employee alone or with others developed any such trade secret or
      confidential information, shall be and shall remain the property of the
      Company. During the term of this Agreement and after termination of
      employment, Employee shall not, either voluntarily or involuntarily, on
      either his own account, as a member of a firm, or on behalf of another
      employer or otherwise, directly or indirectly use or reveal to any person,
      partnership, corporation or association any trade secret or confidential
      information of the Company, its subsidiaries, or their affiliates. Such
      trade secrets shall include, but shall not be limited to, business plans,
      marketing plans or programs, financial information, forecasts,
      compensation arrangements, contracts (whether leases, financing
      arrangements, or other contracts) customer lists, and business
      opportunities. The term "trade secrets" shall not include information
      generally available to the public or a governmental agency except such
      term "trade secrets" shall include information provided to the Securities
      and Exchange Commission or other governmental

                                       4
<PAGE>
      agency on a confidential basis. Employee will not make available to any
      person, partnership, limited liability company, corporation or
      association, or retain after termination of employment, any Company or S&W
      policy manuals, contracts or other written materials.

                  4.3 Noninterference with Employees. During the term of
      Employee's employment, and for a period of twelve (12) months thereafter,
      Employee shall not, in any manner, directly or indirectly, solicit or
      assist others to solicit, or employ, hire or otherwise engage or
      collaborate with persons who are then-employees of the Company or its
      subsidiaries who were employees at any time during the then-prior three
      (3) month period, save and except such employees, if any, with whom
      Employee had a pre-existing business relationship as of the Effective
      Date. Without limitation as to duration, Employee shall not interfere with
      the employment relationships between the Company, its subsidiaries and
      their respective employees and shall not use or disclose employee lists or
      data in violation of Section 4.2 above.

                  4.4 Noninterference with Customers. During the term of
      Employee's employment, and for a period of twelve (12) months thereafter,
      Employee agrees not to solicit or assist others to solicit, in any manner,
      directly or indirectly (as defined below), for the purpose of providing
      products or services similar or related to those provided by the Company,
      persons who are current or prospective customers of the Company. Without
      limitation as to duration, Employee shall not interfere with any present
      or prospective business relationships between the Company and current or
      prospective customers.

                  4.5 Reasonableness of Limitations. EMPLOYEE ACKNOWLEDGES
      HAVING CAREFULLY READ AND CONSIDERED THE PROVISIONS OF THIS AGREEMENT AND
      AGREES THAT THE RESTRICTIONS AND OTHER OBLIGATIONS SET FORTH IN THIS
      AGREEMENT, INCLUDING THE DURATION AND SCOPE OF THE RESTRICTIONS ON
      COMPETITION, ARE FAIR AND REASONABLE. Employee acknowledges that the
      Company offers unique and specialized products and services that have been
      developed as a result of a substantial investment of time and money, that
      Employee will be an important employee with access to highly confidential
      and valuable proprietary information and materials, and that the
      restrictions and other obligations set forth in this Agreement are
      reasonable and necessary to protect the good will, proprietary rights,
      confidential information and other legitimate business interests of the
      Company. Employee acknowledges that this Agreement will not preclude or
      unreasonably impair Employee's ability to obtain other employment or
      otherwise earn a living after termination of employment with the Company,
      and understands that it may be necessary to relocate temporarily if
      Employee desires to continue to exercise, during the restricted period,
      the same skills provided to the Company. Employee acknowledges and agrees
      that the employment and compensation and other consideration that Employee
      will receive while employed pursuant to this Agreement is appropriate and
      sufficient consideration for Employee to agree to the restrictions and
      other obligations set forth in this Agreement. Employee acknowledges

                                       5
<PAGE>
      and agrees that the restrictions and other obligations, including the
      acknowledgments and agreements set forth in this section, are material to
      the Company and that the consideration given by the Company and received
      by Employee under this Agreement is given by the Company in reliance on
      the full enforceability of this Agreement.

                  4.6 Nondisparagement. During the term of Employee's employment
      and after termination of Employee's employment, Employee and Company agree
      to refrain from making any disparaging statements about each other.

                  4.7 Injunctive Relief. Employee acknowledges that the
      restrictions contained in this Section 4 are a reasonable and necessary
      protection of the immediate interests of the Company and that any
      violation of these restrictions would cause substantial injury to the
      Company. In the event of a breach or threatened breach by Employee of
      these restrictions, each of the Company shall be entitled to apply to any
      court of competent jurisdiction for an injunction restraining Employee
      from such breach or threatened breach; provided, however, that the right
      to apply for an injunction shall not be construed as prohibiting either
      the Company from pursuing any other available remedies for such breach or
      threatened breach.

                  4.8 Definition of the Company. For purposes of this Section 4
      only, "Company" shall mean the Company, S&W and their respective
      subsidiaries and affiliates.

            5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of Employee, the Company and their respective heirs,
executors, administrators, successors and assigns; provided, however, that
Employee may not assign his rights hereunder without the prior written consent
of the Company and may not assign his obligations hereunder. The Company may
assign either its rights or obligations hereunder to any of its subsidiaries or
affiliated corporation or to any successor to substantially all of the assets or
business of the Company.

            6. AMENDMENTS. This Agreement may not be amended, modified or
supplemented in any respect except by a subsequent written agreement executed by
the Company and Employee.

            7. MISCELLANEOUS.

                  7.1 Entire Agreement. This Agreement rescinds and supersedes
      any other agreement, whether oral or written, relating to Employee's
      employment by the Company and contains the entire understanding between
      the parties relative to the employment of Employee, there being no terms,
      conditions, warranties, or representations other than those contained or
      referred to herein, and no amendment hereto shall be valid unless made in
      writing and signed by both of the parties hereto.

                                       6
<PAGE>
                  7.2 Governing Law; Venue. This Agreement shall be interpreted
      and construed in accordance with the laws of the State of Arizona as
      applied to residents of Arizona without regard to conflicts of law
      principles. Any suit, action or other proceeding brought by Employee which
      stems from or relates to the subject matter of this Agreement shall be
      limited solely to an action brought in either U.S. District Court in
      Phoenix, Arizona or Maricopa County (Arizona) Superior Court.

                  7.3 Severability. In the event that any provisions herein
      shall be legally unenforceable, the remaining provisions nevertheless
      shall be carried into effect.

                  7.4 Attorneys' Fees. In the event of any litigation between
      the parties hereto arising out of the terms, conditions and obligations
      expressed in this Agreement, the prevailing party in such litigation shall
      be entitled to recover reasonable attorneys' fees incurred in connection
      therewith.

                  7.5 Notices. All notices required or permitted to be given
      hereunder shall be deemed given if in writing and delivered personally or
      sent by telex, telegram, telecopy, or forwarded by prepaid registered or
      certified mail (return receipt requested) to the party or parties at the
      following addresses (or at such other addresses as shall be specified by
      like notices), and any notice, however given, shall be effective when
      received:

                                    To Employee:

                                    Roy Cuny
                                    4716 Lakeside Drive
                                    Colleyville, TX 76034

                                    To Company:

                                    Smith & Wesson Holding Corporation
                                    14500 N. Northsight Boulevard, Suite 116
                                    Scottsdale, AZ  85260

                  7.6 Waiver. The waiver by any party of a breach of any
      provision of this Agreement by the other shall not operate or be construed
      as a waiver of any subsequent breach of the same provision or any other
      provision of this Agreement.

                  7.7 Counterparts. This Agreement may be executed in one or
      more counterparts, each of which shall be deemed an original, but all of
      which together shall constitute one and the same instrument.

                  7.8 Headings. The subject headings to the sections in this
      Agreement are included for purposes of convenience only and shall not
      affect the construction or interpretation of any of its provisions.

                                       7
<PAGE>
                  7.9 Construction. Each party has had the opportunity to set
      forth in this Agreement all matters related to the subject hereof. The
      Company and Employee acknowledge the binding legal effect of this
      Agreement, that this Agreement has been negotiated by the parties hereto
      and that each party has, to the extent desired, sought legal counsel
      related to the terms, conditions and effect of this Agreement.

                  7.10 Assistance in Litigation. Employee shall upon reasonable
      notice, furnish such information and reasonable assistance to the Company
      as it may reasonably require in connection with any litigation in which it
      is, or may become, a party either during or after employment. Employee
      will be entitled to, and will receive, reasonable compensation for his
      time and expenses, including attorneys' fees, for such assistance if no
      longer employed by Company when providing such assistance.

                  7.11 Limited Effect of Waiver. Should the Company or Employee
      waive breach of any provision of this Agreement by the other, that waiver
      will not operate or be construed as a waiver of further breach by such
      party.

                  7.12 No Contrary Binding Obligations. Employee represents and
      warrants to the Company that he is not bound by any contract, obligation
      or other agreement that will adversely affect his ability to perform his
      duties hereunder. Employee shall indemnify and hold harmless the Company
      and its affiliates from any breach of such representation and warranty.

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first hereinabove written.

                                        COMPANY:

                                        SMITH & WESSON HOLDING CORPORATION,
                                        a Nevada corporation

                                        By: /s/ Colton R. Melby
                                           -------------------------------------
                                             Its: President
                                                 -------------------------------

                                           EMPLOYEE:

                                           /s/ Roy Cuny
                                           -------------------------------------
                                           Roy Cuny

                                       8<PAGE>

                                                                    Exhibit 10.6

                                    INDENTURE

                          Dated as of October 18, 2002
                                      among

                                EDUCATION FUNDING
                                 RESOURCES, LLC
                                    as Issuer

                        CORPORATE RECEIVABLES CORPORATION
                                       and
                      CORPORATE ASSET FUNDING COMPANY, INC.
                               as Conduit Lenders

                  THE FINANCIAL INSTITUTIONS FROM TIME TO TIME

                                  PARTY HERETO

                              as Committed Lenders

                          CITICORP NORTH AMERICA, INC.
                                    as Agent

                                FIFTH THIRD BANK
                              as Indenture Trustee

                                       and

                           as Eligible Lender Trustee

                                       and

                        EDUCATION LENDING SERVICES, INC.
                               as Master Servicer

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   Page
                                                                                   ----
<S>                                                                                <C>
ARTICLE I  ADVANCES ...............................................................   2
     SECTION 1.01.  Commitments to Lend; Limits on Lenders' Obligations ...........   2
                    ---------------------------------------------------
     SECTION 1.02.  Borrowing Procedures ..........................................   3
                    --------------------
     SECTION 1.03.  Grant of Security Interest ....................................   4
                    --------------------------
     SECTION 1.04.  Release of Collateral .........................................   5
                    ---------------------
     SECTION 1.05.  Effect of Release .............................................   6
                    -----------------
     SECTION 1.06.  Premium Letter of Credit ......................................   6
                    ------------------------
     SECTION 1.07.  Extension of the Facility Termination Date ....................   7
                    ------------------------------------------

ARTICLE II  NOTE ..................................................................   8
     SECTION 2.01.  Note ..........................................................   8
                    ----
     SECTION 2.02.  Interest on Advances ..........................................   8
                    --------------------
     SECTION 2.03.  Repayments and Prepayments ....................................   9
                    --------------------------
     SECTION 2.04.  General Procedures ............................................  10
                    ------------------
     SECTION 2.05.  Reduction in Program Limit ....................................  10
                    --------------------------
     SECTION 2.06.  Characterization of Note ......................................  10
                    ------------------------

ARTICLE III  SETTLEMENTS ..........................................................  10
     SECTION 3.01.  Accounts; Investments by Indenture Trustee ....................  10
                    ------------------------------------------
     SECTION 3.02.  Collection of Moneys ..........................................  12
                    --------------------
     SECTION 3.03.  Collection Account ............................................  12
                    ------------------
     SECTION 3.04.  Reserve Account ...............................................  15
                    ---------------
     SECTION 3.05.  Payments and Computations, Etc.; Monthly Advances .............  15
                    -------------------------------------------------

ARTICLE IV  FEES AND YIELD PROTECTION .............................................  16
     SECTION 4.01.  Fees ..........................................................  16
                    ----
     SECTION 4.02.  Yield Protection ..............................................  16
                    ----------------
     SECTION 4.03.  Funding Losses ................................................  18
                    --------------

ARTICLE V  CONDITIONS OF BORROWINGS ...............................................  18
     SECTION 5.01.  Conditions Precedent to Initial Borrowing .....................  18
                    -----------------------------------------
     SECTION 5.02.  Conditions Precedent to All Borrowings ........................  20
                    --------------------------------------
     SECTION 5.03.  Delivery of Schedule of Pledged Student Loans .................  21
                    ---------------------------------------------

ARTICLE VI  REPRESENTATIONS AND WARRANTIES ........................................  21
     SECTION 6.01.  Representations and Warranties of Issuer ......................  21
                    ----------------------------------------
     SECTION 6.02.  Reassignment upon Breach ......................................  24
                    ------------------------
     SECTION 6.03.  Representations and Warranties of Indenture Trustee ...........  25
                    ---------------------------------------------------
     SECTION 6.04.  Representations and Warranties of Eligible Lender Trustee .....  25
                    ---------------------------------------------------------

ARTICLE VII  GENERAL COVENANTS OF ISSUER AND SERVICER .............................  26
     SECTION 7.01.  Affirmative Covenants of Issuer ...............................  26
                    -------------------------------
</TABLE>

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<PAGE>

<TABLE>
<S>                                                                                   <C>
     SECTION 7.02.  Reporting Requirements of Issuer ................................ 30
                    --------------------------------
     SECTION 7.03.  Servicing Covenants ............................................. 32
                    -------------------
     SECTION 7.04.  Negative Covenants of Issuer .................................... 34
                    ----------------------------

ARTICLE VIII  EVENTS OF TERMINATION ................................................. 35
     SECTION 8.01.  Events of Termination ........................................... 36
                    ---------------------
     SECTION 8.02.  Remedies. ....................................................... 38
                    --------

ARTICLE IX  THE AGENT; INDENTURE TRUSTEE ............................................ 40
     SECTION 9.01.  Authorization and Action ........................................ 40
                    ------------------------
     SECTION 9.02.  Agent's Reliance, Etc ........................................... 40
                    ---------------------
     SECTION 9.03.  Agent and Affiliates ............................................ 40
                    --------------------
     SECTION 9.04.  Lender's Purchase Decision ...................................... 40
                    --------------------------
     SECTION 9.05.  Delegation of Duties ............................................ 41
                    --------------------
     SECTION 9.06.  Successor Agent ................................................. 41
                    ---------------
     SECTION 9.07.  Acceptance of the Trusts ........................................ 41
                    ------------------------
     SECTION 9.08.  Fees, Charges and Expenses of Indenture Trustee ................. 43
                    -----------------------------------------------
     SECTION 9.09.  Notice to Lenders if Event of Termination Occurs ................ 43
                    ------------------------------------------------
     SECTION 9.10.  Intervention by Indenture Trustee ............................... 43
                    ---------------------------------
     SECTION 9.11.  Successors ...................................................... 43
                    ----------
     SECTION 9.12.  Resignation ..................................................... 44
                    -----------
     SECTION 9.13.  Removal ......................................................... 44
                    -------
     SECTION 9.14.  Appointment of Successor ........................................ 44
                    ------------------------
     SECTION 9.15.  Concerning Any Successor ........................................ 44
                    ------------------------
     SECTION 9.16.  Appointment of Co-Trustee ....................................... 44
                    -------------------------
     SECTION 9.17.  Successor Indenture Trustee as Trustee of Funds ................. 45
                    -----------------------------------------------
     SECTION 9.18.  Indemnification ................................................. 45
                    ---------------

ARTICLE X  ASSIGNMENT OF LENDER'S INTEREST .......................................... 46
     SECTION 10.01.  Restrictions on Assignments .................................... 46
                     ---------------------------
     SECTION 10.02.  Rights of Assignee ............................................. 47
                     ------------------
     SECTION 10.03.  Evidence of Assignment ......................................... 47
                     ----------------------

ARTICLE XI  INDEMNIFICATION ......................................................... 47
     SECTION 11.01.  Indemnities .................................................... 47
                     -----------

ARTICLE XII  SERVICING OF PLEDGED STUDENT LOANS ..................................... 50
     SECTION 12.01.  Duties of Master Servicer ...................................... 50
                     -------------------------
     SECTION 12.02.  Collection of Pledged Student Loan Payments .................... 52
                     -------------------------------------------
     SECTION 12.03.  Realization upon Pledged Student Loans ......................... 52
                     --------------------------------------
     SECTION 12.04.  No Impairment .................................................. 52
                     -------------
     SECTION 12.05.  Purchase of Pledged Student Loans .............................. 53
                     ---------------------------------
     SECTION 12.06.  Master Servicer's Report ....................................... 53
                     ------------------------
     SECTION 12.07.  Annual Statement as to Compliance; Notice of Default ........... 53
                     ----------------------------------------------------
     SECTION 12.08.  Servicer Expenses .............................................. 54
                     -----------------
     SECTION 12.09.  Appointment of Sub-Servicers ................................... 54
                     ----------------------------
     SECTION 12.10.  Maintenance of Fidelity Bond and Errors and Omission Policy .... 54
                     -----------------------------------------------------------
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                             <C>
     SECTION 12.11.  Representations of Master Servicer ....................................... 55
                     ----------------------------------
     SECTION 12.12.  Indemnities of Master Servicer ........................................... 56
                     ------------------------------
     SECTION 12.13.  Education Lending Services, Inc. Not To Resign as Master Servicer ........ 56
                     -----------------------------------------------------------------
     SECTION 12.14.  Servicer Default ......................................................... 57
                     ----------------
     SECTION 12.15.  Appointment of Successor ................................................. 57
                     ------------------------
     SECTION 12.16.  Master Servicer Fee ...................................................... 58
                     -------------------

ARTICLE XIII  MISCELLANEOUS ................................................................... 58
     SECTION 13.01.  Amendments, Etc .......................................................... 58
                     ---------------
     SECTION 13.02.  Notices, Etc ............................................................. 58
                     ------------
     SECTION 13.03.  No Waiver; Remedies ...................................................... 58
                     -------------------
     SECTION 13.04.  Binding Effect; Survival ................................................. 59
                     ------------------------
     SECTION 13.05.  Costs, Expenses and Taxes ................................................ 59
                     -------------------------
     SECTION 13.06.  No Proceedings ........................................................... 59
                     --------------
     SECTION 13.07.  Captions and Cross References ............................................ 59
                     -----------------------------
     SECTION 13.08.  Integration .............................................................. 60
                     -----------
     SECTION 13.09.  Governing Law ............................................................ 60
                     -------------
     SECTION 13.10.  Waiver Of Jury Trial; Submission to Jurisdiction ......................... 60
                     ------------------------------------------------
     SECTION 13.11.  Execution in Counterparts ................................................ 60
                     -------------------------
     SECTION 13.12.  No Recourse Against Other Parties ........................................ 61
                     ---------------------------------
     SECTION 13.13.  Confidentiality .......................................................... 61
                     ---------------
     SECTION 13.14.  Limitation of Liability .................................................. 62
                     -----------------------
</TABLE>

                                      iii

<PAGE>

                                   APPENDICES

APPENDIX A            Definitions

APPENDIX B            Originators

APPENDIX C            Guarantors

APPENDIX D-1          Purchase and Sale Agreements

APPENDIX D-2          Form of Approved School Lender Purchase and Sale Agreement

                               SCHEDULES

SCHEDULE 6.0 l(k)     List of Offices of Issuer where Records Are Kept
SCHEDULE 13.02        Notice Information

                               EXHIBITS

EXHIBIT 1.02          Form of Borrowing Notice

EXHIBIT 1.04          Form of Release Certification

EXHIBIT 2.01          Form of Note

EXHIBIT 5.02(d)       Form of Coverage Condition Certificate

EXHIBIT 7.02(c)       Form of Monthly Report

                                       iv

<PAGE>

                                    INDENTURE

                          Dated as of October 18, 2002

         THIS IS AN INDENTURE, among Education Funding Resources, LLC, a
Delaware limited liability company ("Issuer"), Corporate Receivables Corporation
and Corporate Asset Funding Company, Inc. (each, a "Conduit Lender"), the
financial institutions from time to time party hereto (each, a "Committed
Lender" and together with the Conduit Lenders, the "Lenders"), Citicorp North
America, Inc. ("CNAI"), as agent for Lenders (in such capacity, and together
with any successor thereto in such capacity, the "Agent"), Fifth Third Bank, as
indenture trustee hereunder (in such capacity, and together with any successor
thereto in such capacity, the "Indenture Trustee") and as eligible lender
trustee (in such capacity, and together with any successor thereto in such
capacity, the "Eligible Lender Trustee") and Education Lending Services, Inc.,
as master servicer (in such capacity, the "Master Servicer"). Unless otherwise
indicated, capitalized terms used in this Agreement are defined in Appendix A.

                                   BACKGROUND

         1.   Issuer will purchase from time to time Student Loans, the legal
title of which is held by the Eligible Lender Trustee on behalf of the Issuer.

         2.   Issuer intends to finance certain of the Student Loans by
borrowing Advances from Lenders. Issuer has requested Lenders, and Lenders have
agreed, subject to the terms and conditions contained in this Agreement, to make
Advances to Issuer from time to time during the term of this Agreement, which
Advances will be secured by such Student Loans and other Collateral.

         3.   Education Lending Services, Inc. has agreed to act as Master
Servicer to service the Pledged Student Loans.

         4.   CNAI has been requested by Lenders, and is willing, to act as the
Agent.

         5.   Fifth Third Bank has been requested by Issuer, and is willing, to
act as Indenture Trustee and as Eligible Lender Trustee.

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

<PAGE>

                                   ARTICLE I

                                    ADVANCES

         SECTION 1.01.   Commitments to Lend; Limits on Lenders' Obligations.

         Advances. Upon the terms and subject to the conditions of this
Agreement, from time to time prior to the Termination Date, Issuer may request
that each Conduit Lender make loans to Issuer secured by the Collateral (each,
an "Advance") and each Conduit Lender may, in its sole discretion, make such
Advances, and if a Conduit Lender elects not to make such Advances, the
Committed Lenders shall fund such Advance, each in an amount equal to its
respective Pro Rata Share of such Advance; provided that no Advance shall be
made by a Lender if, after giving effect thereto, the then Total Outstanding
Advances would exceed the Program Limit. Notwithstanding anything contained in
this Agreement to the contrary, no Committed Lender shall be obligated to
provide the Agent or Issuer with aggregate funds in connection with a Borrowing
in an amount that would exceed such Committed Lender's unused Commitment then in
effect less any amounts advanced by such Committed Lender pursuant to a Program
Support Agreement.

         Use of Proceeds. Notwithstanding anything in this Agreement to the
contrary, the proceeds of each Advance made pursuant to Section 1.01(a) shall be
used by Issuer only for the purchase of Student Loans pursuant to a Purchase and
Sale Agreement or otherwise to fund Student Loans or to make deposits to the
Collection Account to be applied as permitted herein and the proceeds of each
Advance made pursuant to Section 1.01(c) shall be used by Issuer only for the
payment of unpaid amounts described in clauses first through eighth of Section
3.03(b); provided, however, in the case of the first Borrowing hereunder, such
proceeds (or a portion thereof) may be used to fund the Reserve Account so that
the amount therein at least equals the Reserve Account Minimum Balance.

         Additional Advances. In addition to Advances pursuant to Section
1.01(a), prior to the occurrence of an Event of Termination and so long as no
Event of Termination would occur as a result of such Advances on each Settlement
Date, the Lenders shall make Advances in an aggregate amount equal to all
amounts described in the first through eighth clauses of Section 3.03(b) that
remain unpaid after the application of funds from Collections and Available
Funds on deposit in the Collection Account pursuant to Section 3.03(b). On each
Settlement Date after the occurrence and during the continuance of an Event of
Termination, absent a written agreement signed by the Required Lenders that such
Advances shall not be made, the Lenders shall make Advances in an aggregate
amount equal to all amounts described in the first through fifth clauses of
Section 3.03(b) and all amounts related to independent directors' fees described
in the sixth clause of Section 3.03(b) which remain unpaid after the application
of funds from Collections and Available Funds on deposit in the Collection
Account pursuant to Section 3.03(b). Each Conduit Lender may make an Advance
under this Section 1.01(c) in its sole discretion. If a Conduit Lender elects
not to make such Advance, the Committed Lenders shall fund such Advance, each in
an amount equal to its respective Pro Rata Share of such Advance; provided, that
no Advance shall be made by a Lender if, after giving effect thereto, the then
Total

                                       2

<PAGE>

Outstanding Advances would exceed the Program Limit. Advances made pursuant to
this Section 1.01(c) shall constitute "Advances" as such term is used in this
Agreement and shall be secured by the Collateral. Notwithstanding anything
contained in this Agreement to the contrary, no Committed Lender shall be
obligated to provide the Agent or Issuer with aggregate funds in connection with
a Borrowing in an amount that would exceed such Committed Lender's unused
Commitment then in effect less any amounts advanced by such Committed Lender
pursuant to a Program Support Agreement. The Indenture Trustee shall notify the
Agent in writing two Business Days prior to each Settlement Date if the amounts
on deposit in the Collection Account will be insufficient to pay in full the
amounts described in the first through eighth clauses of Section 3.03(b). The
Agent will promptly notify the Conduit Lenders or the Committed Lenders, as
applicable, of the Agent's receipt of any such notice. Each Conduit Lender shall
instruct the Agent as to whether such Conduit Lender will fund the proposed
Borrowing by telephone or telecopy by no later than the close of its business on
the Business Day following its receipt of any such request.

         SECTION 1.02.   Borrowing Procedures.

         Notice of Borrowing. Each Borrowing hereunder (other than a Borrowing
pursuant to Section 1.01(c)) shall be made upon Issuer's irrevocable written
notice, substantially in the form of Exhibit 1.02 (a "Borrowing Notice"),
delivered to the Agent in accordance with Section 13.02 (which notice must be
received by the Agent prior to 11:00 a.m., New York City time) not less than two
Business Days prior to the requested Borrowing Date, which notice shall specify
(A) the amount requested to be borrowed by Issuer (which amount shall be in a
minimum amount of $1,000,000 or in integral $100,000 multiples in excess
thereof), and (B) the date of such Borrowing (which shall be a Business Day).
The Agent will promptly notify the Conduit Lenders or the Committed Lenders, as
applicable, of the Agent's receipt of any Borrowing Notice. Each Conduit Lender
shall instruct the Agent as to whether such Conduit Lender will fund the
requested Borrowing by telephone or telecopy by no later than the close of its
business on the Business Day following its receipt of any such request. Issuer
shall request no more than four Borrowings per month.

         Funding of Borrowing. On the date of each Borrowing, upon satisfaction
of the applicable conditions set forth in Article V, the Conduit Lenders or the
Committed Lenders, as the case may be, shall make available to the Agent at the
Agent's Office the principal amount of such Borrowing (which, in the case of a
Borrowing to be funded by the Committed Lenders, shall consist of each Committed
Lender remitting its Pro Rata Share of the principal amount of such Borrowing)
and after receipt by the Agent of such funds, the Agent shall make such funds
available to Issuer in same day funds by depositing such funds in the
Disbursement Account (or, with respect to Borrowings made pursuant to Section
1.01(c), at the sole discretion of the Agent, such funds may be applied directly
to the unpaid amounts described in clauses first through eighth of Section
3.03(b)). Advances in connection with Borrowings to fund any FFELP Loan or HEAL
Loan shall be made in an amount equal to the outstanding Principal Balance of
such Student Loan plus accrued and unpaid interest thereon plus the Financed
Premium Amount with respect to such Student Loan. Advances in connection with
Borrowings to fund any Private Loan that has the benefit of a Private Loan
Guarantee Agreement, shall be made in an amount not to exceed the lesser of (w)
the outstanding Principal Balance of such Student Loan at such time, plus
accrued and unpaid interest thereon or (x) such Private Loan's actual amortized

                                       3

<PAGE>

purchase price if purchased at a discount by Issuer. Advances in connection with
Borrowings to fund any other type of Private Loan shall be made in an amount not
to exceed the lesser of (y) 95% of the original Principal Balance of such
Private Loan plus accrued and unpaid interest thereon or (z) such Private Loan's
actual amortized purchase price, if purchased at a discount. The obligation of
each Committed Lender to remit its Pro Rata Share of any such Borrowing shall be
several from that of each other Committed Lender, and the failure of any
Committed Lender to make such amount available to the Agent shall not relieve
any other Committed Lender of its obligation hereunder.

         If, by 2:00 P.M. (New York time) on the date of any Borrowing (whether
or not the Agent has advanced any Committed Lender's share of such Borrowing),
one or more Committed Lenders (each, a "Defaulting Committed Lender", and each
Committed Lender other than the Defaulting Committed Lender being referred to as
a "Non-Defaulting Committed Lender") fails to make its Pro Rata Share of the
principal amount of such Borrowing available to the Agent pursuant to Section
1.02(b) (the aggregate amount not so made available to the Agent being herein
called in either case the "Borrowing Deficit"), then the Agent shall, by no
later than 2:30 P.M. (New York time) on such date, instruct each Non-Defaulting
Committed Lender to pay, by no later than 3:00 P.M. (New York time) on such
date, in immediately available funds, to the account designated by the Agent, an
amount equal to the lesser of (y) such Non-Defaulting Committed Lender's
proportionate share (based upon the relative Commitments of the Non-Defaulting
Committed Lenders) of the Borrowing Deficit and (z) its unused Commitment. A
Defaulting Committed Lender shall forthwith, upon demand, pay to the Agent for
the ratable benefit of the Non-Defaulting Committed Lenders all amounts paid by
each Non-Defaulting Committed Lender on behalf of such Defaulting Committed
Lender, together with interest thereon, for each day from the date a payment was
made by a Non-Defaulting Committed Lender until the date such Non-Defaulting
Committed Lender has been paid such amounts in full, at a rate per annum equal
to the sum of the Alternate Base Rate plus 2.0%.

         SECTION 1.03.   Grant of Security Interest.

         Issuer (and the Eligible Lender Trustee, in its capacity as title
holder to the Pledged Student Loans that are a part of the Collateral) hereby
grants to the Indenture Trustee, for the benefit of the Secured Parties, a first
priority, continuing lien and security interest in all right, title and interest
of Issuer (and the Eligible Lender Trustee) in, to and under the Collateral,
whether now owned or hereafter acquired or existing. Issuer and the Eligible
Lender Trustee agree that the foregoing sentence is intended to grant in favor
of the Indenture Trustee, for the benefit of the Secured Parties, a first
priority, continuing lien and security interest in all of the Issuer's (and the
Eligible Lender Trustee's, in its capacity as title holder to the Pledged
Student Loans that are part of the Collateral) personal property. Such lien and
security interest shall secure all of Issuer's obligations (monetary or
otherwise) hereunder and under the other Transaction Documents to which Issuer
is a party, including, without limitation, the payments on the Note, the payment
of Fees, the Reimbursement Obligation and all Indemnified Amounts and the
obligation to cause the Master Servicer to turn over all Collections (or cause
all Collections to be remitted) to the Indenture Trustee for deposit into the
Collection Account. The Indenture Trustee hereby accepts the foregoing grant of
a security interest in the Collateral, and agrees to hold such security interest
in trust for the benefit of the Secured Parties pursuant to the terms of this
Agreement. The Indenture Trustee agrees that it has no security interest or
other adverse

                                       4

<PAGE>

claim to the Accounts or the Eligible Investments therein that are Collateral
other than pursuant to this Agreement and that it will not enter into any
agreement that would give any person or entity other than the Indenture Trustee
the right to give entitlement orders with respect to such Eligible Investments
or the Accounts.

         All instruments representing or evidencing the Demand Note Collateral
or any Collateral described in clause (xii) of the definition of "Collateral"
shall be delivered to and held by or on behalf of the Indenture Trustee for the
benefit of the Secured Parties pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Issuer shall not at any time ask for, sue or receive any payment on
the Demand Note Collateral (whether in cash or other assets, pursuant to a
security interest, by exercise of any right of set-off or otherwise) without the
prior written consent of the Agent. The Issuer agrees that it shall not, at any
time, without the prior written consent of the Agent, (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Demand Note Collateral, (ii) create or permit to exist
any adverse claim, judgment or Lien upon or with respect to any of the Demand
Note Collateral, except for the security interest under this Agreement, or (iii)
amend, waive, forgive, terminate or otherwise modify any of the Demand Note
Collateral.

         The Issuer agrees that at any time and from time to time, at the
expense of the Issuer, the Issuer will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Agent may reasonably request, in order to enable the
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral.

         The Issuer agrees that all proceeds of the Demand Note shall be
deposited in the Collection Account and that the Indenture Trustee shall have
all rights of the Issuer with respect to the Demand Note, including without
limitation the right to demand payment and exercise remedies with respect to the
collateral pledged under the Demand Note, and that the Issuer shall not take any
action whatsoever with respect to the Demand Note without the prior written
consent of the Indenture Trustee.

         SECTION 1.04.   Release of Collateral. From time to time, Issuer may
request the Indenture Trustee to release its security interest in any Pledged
Student Loans by delivering to the Indenture Trustee and the Agent a notice (a
"Notice of Release") of its desire that such a release occur, such Notice of
Release to be delivered at least ten days but no more than 30 days before any
day on which Issuer may desire that such release occur. Issuer also shall
provide written notice at least two Business Days prior to the day within the
period covered by such Notice of Release on which it desires that such release
occur. Such Notice of Release shall state that Issuer plans to sell or otherwise
dispose of such Pledged Student Loans in connection with a sale, securitization
or other disposition thereof (which Pledged Student Loans will be specifically
identified in such Notice of Release). The release of the Indenture Trustee's
security interest in any Pledged Student Loans pursuant to this Section 1.04
shall be subject to the following conditions precedent:

               (i)   before and after giving effect to such release,

                                       5

<PAGE>

                      (A)  there shall not exist any Event of Termination or
               Unmatured Event of Termination;

                      (B)  the Coverage Condition is met;

                      (C)  no Lender is materially and adversely affected by the
               selection made by Issuer of the Pledged Student Loans in
               comparison to purchasers of Pledged Student Loans from Issuer
               (through the Eligible Lender Trustee) in connection with any
               asset securitization or sale by Issuer occurring during the
               Revolving Period; and

                      (D)  the Agent and the Lenders shall have determined that
               the remaining Collateral is consistent with a program rated "A2"
               by Moody's as reasonably determined by the Agent using the
               ratings methodology it employs for rating the Note.

               (ii)   on or prior to such release, Issuer shall have delivered a
         certificate to the Indenture Trustee and the Agent, substantially in
         the form of Exhibit 1.04, certifying that the foregoing conditions
         described in clause (i) above shall have been satisfied in connection
         therewith, together with a pro forma Coverage Condition Certificate
         demonstrating compliance of the condition described in clause (B)
         above.

               (iii)  on or prior to such release, Issuer shall have deposited
         into the Collection Account cash in an amount equal to the outstanding
         Principal Balance of such Pledged Student Loans, plus accrued and
         unpaid interest thereon, plus any Unamortized Premium thereon plus any
         unreimbursed Monthly Advance with respect thereto for application as a
         repayment of the Total Outstanding Advances on such date in accordance
         with Section 2.03(c).

         SECTION 1.05.  Effect of Release. Upon the satisfaction of the
foregoing conditions in accordance with Section 1.04, all right, title and
interest of the Indenture Trustee in, to and under such Pledged Student Loans
shall terminate and revert to Issuer, its successors and assigns, and the right,
title and interest of the Indenture Trustee in such Pledged Student Loans shall
thereupon cease, terminate and become void; and, upon the request of Issuer, its
successors or assigns, and at the cost and expense of Issuer, the Indenture
Trustee shall deliver and, if necessary, execute such UCC-3 financing statements
and releases as are necessary or reasonably requested by Issuer to terminate and
remove of record any documents constituting public notice of the security
interest in such Pledged Student Loans granted hereunder being released.

         SECTION 1.06.  Premium Letter of Credit.

         Issuance of Premium Letter of Credit. On or prior to the date hereof,
the Letter of Credit Provider shall issue the Premium Letter of Credit payable
to the Agent for the benefit of the Conduit Lenders in an amount equal to
$20,000,000. The expiration date of the Premium Letter of Credit shall be
October 16, 2003. The Agent may draw upon the Premium Letter of Credit upon the
occurrence and during the continuance of an Event of Termination in an amount
less than or equal to the outstanding obligations of the Issuer to the Conduit
Lenders under the Transaction Documents. Upon any such draw, the Agent shall pay
the amount drawn to the

                                       6

<PAGE>

Conduit Lenders for application as repayment of such obligations. The Premium
Letter of Credit shall be solely for the benefit of the Conduit Lenders and not
of their respective Program Support Providers.

         Reimbursement Obligation. Issuer agrees unconditionally, irrevocably
and absolutely upon receipt of notice from the Agent or the Letter of Credit
Provider to pay immediately to the Letter of Credit Provider, the amount of each
advance that is drawn under or pursuant to the Premium Letter of Credit (such
obligation of Issuer to reimburse the Letter of Credit Provider for an advance
made under the Premium Letter of Credit being referred to herein as a
"Reimbursement Obligation")).

         SECTION 1.07.  Extension of the Facility Termination Date.

         The Issuer, not more than forty-five (45) days before the date set
forth in clause (a) of the definition of Facility Termination Date (the
"Committed Lender Termination Date"), may request that the Committed Lenders
extend the Committed Lender Termination Date by giving the Agent notice of such
request. The Agent shall promptly notify the Committed Lenders of the Agent's
receipt of such request, and each Committed Lender shall, not earlier than
thirty (30) or later than fifteen (15) days before the Committed Lender
Termination Date, notify the Agent whether or not it consents to such extension;
provided, that if any Committed Lender fails to give such notice it shall be
deemed not to have consented to such extension. Consent to any extension
requested by the Issuer may be given or withheld in the sole and absolute
discretion of each Committed Lender. Upon receipt of consent by a Committed
Lender to an extension, the Agent will promptly notify the Issuer thereof, and
effective as of the Committed Lender Termination Date the Committed Lender
Termination Date then in effect shall be extended to the date that is 364 days
after the Committed Lender Termination Date then in effect, or if such day is
not a Business Day, the next preceding Business Day. The Agent will promptly
give the Issuer notice of any failure of any Committed Lender to consent to any
requested extension of the Committed Lender Termination Date (each Committed
Lender which has declined or has been deemed to have declined to renew its
commitment hereunder, a "Non-Renewing Committed Lender").

         The Agent may declare, to the extent of the unused Program Limit, that
any Non-Renewing Committed Lender's Commitment to make Advances shall
automatically terminate on a date agreed upon by the Agent and the Issuer. Upon
the termination of any Non-Renewing Committed Lender's Commitment to make
Advances pursuant to the preceding sentence, the Program Limit, to the extent
the Non-Renewing Committed Lender's Commitment is not assigned as provided in
Section 1.07(c), shall be reduced in an amount equal to the Commitment of such
Non-Renewing Committed Lender immediately prior to the termination of such
Commitment.

         Notwithstanding the preceding paragraph, except following the
occurrence of an Event of Termination, the Issuer, with the consent of the
Agent, may arrange for one or more banks (which may include any Committed
Lender) the short-term unsecured debt of which is rated at least equal to the
then existing ratings of the Promissory Notes issued by the Conduit Lenders, to
assume all or part of the Commitment of a Non-Renewing Committed Lender;
provided, that each such assignment satisfies the requirements of Section 10.01
hereof; provided, further, that the Issuer shall have arranged for such
assumption for all Non-Renewing Committed Lenders on

                                       7

<PAGE>

a pro rata basis. If a bank is willing to assume all or a part of the
Non-Renewing Committed Lender's Commitment, then such bank, the Non-Renewing
Committed Lender, the Issuer and the Agent will promptly evidence such
assumption and assignment pursuant to Section 10.03.

                                   ARTICLE II

                                      NOTE

         SECTION 2.01.  Note. The Advances shall be evidenced by a promissory
note (as from time to time supplemented, extended, amended or replaced, the
"Note"), substantially in the form set forth in Exhibit 2.01, with appropriate
insertions, dated the date hereof, payable to the order of the Agent, for the
benefit of the Lenders, in the maximum principal amount of $500,000,000 (or, if
less, in the aggregate unpaid principal amount of all of the Advances) on the
Maturity Date. Principal of the Advances shall be paid from time to time as set
forth in Sections 2.03 and 3.03. The Agent shall record in its records, or at
its option on the schedule attached to the Note, the date and amount of each
Advance made hereunder, the interest rate with respect thereto, each repayment
thereof, and the other information provided for thereon. The aggregate unpaid
principal amount so recorded shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on the Note. The failure so to record any such
information or any error in so recording any such information shall not,
however, limit or otherwise affect the actual obligations of Issuer hereunder or
under the Note to repay the principal amount of all Advances, together with all
interest accruing thereon, as set forth in this Agreement.

         SECTION 2.02.  Interest on Advances.

         Interest Rates. Each Advance shall accrue interest during each
Settlement Period at the following rates, which interest shall be payable as set
forth in paragraph (b) below:

               (i)   at all times while the making or maintenance of such
         Advance (or the applicable portion thereof) by a Conduit Lender is
         funded by the issuance of Promissory Notes, the Promissory Note Rate
         for such Settlement Period; and

               (ii)  at all times while the making or maintenance of such
         Advance (or the applicable portion thereof) by a Conduit Lender is
         funded other than by the issuance of Promissory Notes or is funded by
         the Committed Lenders, 1.0% per annum over the Eurodollar Rate, or if
         the Eurodollar Rate is not available, the Alternate Base Rate;

provided, however, that to the extent that the Eurodollar Rate is selected to
apply to an Advance but such Advance is made with less than two days prior
notice, such Advance shall accrue interest at the Alternate Base Rate; and
provided further that for any day while an Event of Termination or an Unmatured
Event of Termination exists the rate of interest on each Advance shall be an
interest rate equal to 2.0% per annum above the Alternate Base Rate in effect on
such day.

         The interest rate on any Advance bearing interest at the Alternate Base
Rate shall change simultaneously with each change in the Alternate Base Rate.

                                       8

<PAGE>

         Interest Settlement Dates. Interest accrued on each Advance shall be
paid on each of:

               (iii)  the Maturity Date;

               (iv)   each Settlement Date;

               (v)    the date of any prepayment, in whole or in part, of the
         outstanding principal of such Advance pursuant to Section 2.03(b) or
         Section 2.03(c) to the extent of the amount being prepaid; and

               (vi)   the date of the Maturity Date of any Advance which is
         accelerated pursuant to Section 8.02.

         SECTION 2.03.  Repayments and Prepayments. Issuer shall repay in full
the unpaid principal amount of each Advance on the Maturity Date. Prior thereto,
Issuer:

         may, from time to time on any Settlement Date with respect to any
Advance, make a prepayment, in whole or in part, of the outstanding principal
amount of any such Advance; provided, however, that

               (i)    all such voluntary prepayments shall require (x) in the
         case of prepayments of $20,000,000 or less, at least two Business Days'
         (but no more than five Business Days') prior written notice to the
         Agent, (y) in the case of prepayments of less than or equal to
         $50,000,000 but more than $20,000,00, at least five Business Days'
         prior written notice to the Agent and (z) in the case of all other
         prepayments, at least ten Business Days' prior written notice to the
         Agent; and

               (ii)   all such voluntary partial prepayments shall be in a
         minimum amount of $1,000,000;

         shall, on each date when any reduction in the Program Limit becomes
effective pursuant to Section 2.05, make a prepayment of the Advances in an
amount equal to the excess, if any, of the aggregate outstanding principal
amount of the Advances over the Program Limit as so reduced;

         shall, to the extent (i) there is a Reassignment of any Pledged Student
Loans pursuant to Section 6.02 or (ii) the Master Servicer repurchases a Pledged
Student Loan pursuant to Section 12.05, in either case, prepay the outstanding
Principal Balance of the Pledged Student Loan in an amount equal to the
principal portion of the Reassignment Amount or the Servicer Repurchase Amount,
as applicable, therefor on such date and to the extent there is a release of
Collateral pursuant to Section 1.04 or a withdrawal from the Collection Account
pursuant to Section 3.04(b), prepay the outstanding Principal Balance of all
released Pledged Loans in the amount set forth in Section 1.04(iii) or Section
3.04(b) as applicable;

         shall, immediately upon any acceleration of the Maturity Date of any
Advances pursuant to Section 8.02, repay such Advances.

                                       9

<PAGE>

         Each such prepayment shall be subject to the payment of any amounts
required by Section 4.03 resulting from a prepayment or payment of an Advance
prior to the Settlement Date with respect thereto.

         SECTION 2.04.  General Procedures. No outstanding principal of an
Advance shall be considered reduced by any allocation, setting aside or
distribution of any portion of Collections unless such Collections shall have
been actually delivered to the Agent for the purpose of paying such principal.
No principal or interest shall be considered paid by any distribution of any
portion of Collections if at any time such distribution is rescinded or must
otherwise be returned for any reason. No provision of this Agreement shall
require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law.

         SECTION 2.05.  Reduction in Program Limit. The unused portion of the
Program Limit may be decreased by an amount of $10,000,000 or any integral
multiple of $1,000,000 in excess thereof upon 10 Business Days' prior written
notice by Issuer to the Agent; provided the Program Limit shall in no event be
less than $25,000,000.

         SECTION 2.06.  Characterization of Note. Issuer, the Agent and each
Lender agree to treat the Note for federal, state and local income and franchise
tax purposes, and for book purposes, as indebtedness only of Issuer.

                                  ARTICLE III

                                   SETTLEMENTS

         SECTION 3.01.  Accounts; Investments by Indenture Trustee.

         Accounts. On or before the first Borrowing Date, the Indenture Trustee
shall establish, for the benefit of the Lenders to the extent of its interests
therein as provided herein, the Disbursement Account, the Collection Account and
the Reserve Account, which accounts shall be segregated accounts maintained at a
Qualified Institution selected by the Indenture Trustee. Each Account shall be
subject to the sole dominion and control of the Indenture Trustee and the Issuer
shall have no withdrawal rights therefrom (except that the Issuer may withdraw
from the Disbursement Account funds constituting an Advance solely for the use
described in the Borrowing Notice related to such Advance. The Eligible
Investments and funds in each Account shall be deemed "financial assets" as
defined in Section 8-102 of the UCC. In furtherance of the foregoing, the
Issuer, the Agent and the Indenture Trustee agree to enter into the Account
Control Agreement with respect to the Accounts as of the date hereof.

         Subject to the further provisions of this Section 3.01, the Indenture
Trustee shall, upon receipt, deposit into such Accounts all amounts received by
it which are required to be deposited therein in accordance with the provisions
hereof. All such amounts and all investments made with such amounts, including
all income and other gain from such investments, shall be held by the Indenture
Trustee in such Accounts as part of the Collateral as herein provided, subject
to withdrawal by the Indenture Trustee in accordance with, and for the purposes
specified in the provisions of, this Agreement.

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         Administration of Payments. Unless otherwise advised by the Agent in
writing or required herein, the Indenture Trustee shall assume that any amount
remitted to it by the Master Servicer in its capacity as trustee hereunder or
Issuer is to be deposited into the Collection Account pursuant to Section 3.03.
The Indenture Trustee may establish from time to time such deadline or deadlines
as it shall determine are reasonable or necessary in the administration hereof
after which all amounts received or collected by the Indenture Trustee on any
day shall not be deemed to have been received or collected until the next
succeeding Business Day.

         No Set-Off. Neither the Eligible Lender Trustee nor the Indenture
Trustee shall have any right of set-off against Collections, Accounts, or any
investment therein, whether or not commingled to satisfy any other obligations,
and each of the Eligible Lender Trustee and the Indenture Trustee hereby
irrevocably waives any and all such rights.

         Investments. Amounts in the Reserve Account and the Collection Account
shall be invested and reinvested by the Indenture Trustee pursuant to an Issuer
Order in one or more Eligible Investments. Subject to the restrictions on the
maturity of investments set forth in Section 3.01(f), each such Issuer Order may
authorize the Indenture Trustee to make the specific Eligible Investments set
forth therein, to make Eligible Investments from time to time consistent with
the general instructions set forth therein, or to make specific Eligible
Investments pursuant to instructions received in writing or by facsimile
transmission from the employees or agents of Issuer identified therein, in each
case in such amounts as such Issuer Order shall specify. Issuer agrees to report
as its income for financial reporting and tax purposes (to the extent
reportable) all Investment Earnings on amounts in the Accounts.

         Investments in the Absence of an Issuer Order; Notice of Uninvested
Cash. In the event that either (i) Issuer shall have failed to give investment
directions to the Indenture Trustee by 11:00 a.m., New York City time, on any
Business Day on which there may be uninvested cash deposited in the Accounts or
(ii) an Event of Termination or Unmatured Event of Termination shall have
occurred and be continuing, then the Indenture Trustee shall invest such funds
in Eligible Investments as directed by the Agent by 1:00 p.m., New York City
time, on such Business Day (to the extent such investments are then available)
or, if no such directions are given by such time, in Eligible Investments
described in clause (a) of the definition thereof. All Eligible Investments made
by the Indenture Trustee shall mature no later than the maturity date therefor
permitted by Section 3.01(f).

         Maturity of Eligible Investments. Unless otherwise specified by the
Agent in writing, Eligible Investments shall mature no later than the Business
Day prior to each Settlement Date in an amount sufficient to pay all interest
and fees hereunder and under the other Transaction Documents to which Issuer is
a party due on such Settlement Date. All income or other gains from the
investment of moneys deposited in the Accounts shall be deposited by the
Indenture Trustee in the Collection Account upon receipt and shall be deemed to
constitute a portion of the Available Funds for the related Settlement Date.

         Form of Investment. Any investment of any funds in the Accounts shall
be made under the following terms and conditions:

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               (i)    each such investment shall be made in the name of the
         Indenture Trustee, for the benefit of Issuer and the Secured Parties
         (to the extent of their respective interests therein), or in the name
         of a nominee of the Indenture Trustee;

               (ii)   any certificate or other instrument evidencing such
         investment shall be delivered directly to the Indenture Trustee, and
         the Indenture Trustee shall have sole possession of such instrument,
         and all income on such investment; and

               (iii)  the Indenture Trustee for the benefit of the Secured
         Parties shall have a first priority perfected security interest in such
         investment, perfected by control to the extent permitted under Article
         9 of the UCC.

         Indenture Trustee Not Liable. The Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in the Accounts resulting from
losses on investments made in accordance with the provisions of this Section
3.01 (but the institution serving as Indenture Trustee shall at all times remain
liable for its own debt obligations, if any, constituting part of such
investments) except for gross negligence or intentional misconduct.

         SECTION 3.02.  Collection of Moneys. If at any time Issuer and/or the
Master Servicer shall receive any Collections on or in respect of any Pledged
Student Loan (including any Guarantee Payment, Interest Subsidy Payment or
Special Allowance Payment), it shall hold such Collections for the benefit of
the Indenture Trustee (for the benefit of the Secured Parties), shall segregate
such payment from the other property of Issuer and shall, within two Business
Days, deliver such payment in the form received (endorsed as necessary for
transfer) to the Indenture Trustee for deposit in the Collection Account in
accordance with Section 3.03. If at any time Issuer and/or the Master Servicer
shall receive any payment on or in respect of any Pledged Student Loan
(including any Guarantee Payment, Interest Subsidy Payment or Special Allowance
Payment), it shall hold such payment for the benefit of the Indenture Trustee
(for the benefit of the Secured Parties), shall segregate such payment from the
other property of the Issuer and shall, within two Business Days, deliver such
payment in the form received (endorsed as necessary for transfer) to the
Indenture Trustee for deposit in the Reserve Account.

         SECTION 3.03.  Collection Account.

         Deposits. Each of Issuer and the Master Servicer shall remit or cause
to be remitted all Collections received by either of them (or by any
Sub-Servicer) to the Collection Account no later than the close of business on
the second Business Day after receipt thereof. Issuer and the Master Servicer
shall cause each Sub-Servicer to remit all Collections received by it to the
Collection Account or the Reserve Account, as applicable, in accordance with the
applicable Servicing Agreement but, notwithstanding the terms of any Servicing
Agreement, no less frequently than three times per month and at least once every
fifteen days). Master Servicer also shall, in its sole discretion, deposit into
the Collection Account the amount of any Monthly Advances determined to be made
by Master Servicer pursuant to Section 3.05(e) no later than the related
Settlement Date. In addition, Issuer shall deposit to the Collection Account no
later than the close of business on the date payable pursuant thereto, the
aggregate Reassignment Amounts payable by Issuer pursuant to Section 6.02. The
Indenture Trustee shall deposit into the

                                       12

<PAGE>

Collection Account on the date of receipt thereof all Collections received by
the Indenture Trustee from the Master Servicer, Issuer, any Sub-Servicer, any
affiliate of Issuer or otherwise.

         Settlement Date Procedures. Amounts on deposit on any Settlement Date
in the Collection Account representing Collections, Advances made pursuant to
Section 1.01(c) and other Available Funds (net of any amounts reimbursable to
Master Servicer in respect of Monthly Advances pursuant to Section 3.05(e),
which shall be paid to Master Servicer) shall be withdrawn from the Collection
Account by the Indenture Trustee on such Settlement Date, in the amounts
required, and applied in the following order of priority:

         first, (i) an amount equal to the unpaid Monthly Rebate Fee for such
Settlement Period plus any Monthly Rebate Fees not paid when due on any prior
Settlement Date shall be set aside in the Collection Account and paid to the
Department on such Settlement Date but only to the extent the Department has not
deducted or netted the amount of such Monthly Rebate Fees from the Interest
Subsidy Payments or Special Allowance Payments payable by the Department with
respect to the Pledged Student Loans and (ii) an amount equal to the unpaid
amount required to be paid by Issuer for such Settlement Period in respect of
any required federal loan insurance premiums plus any such required insurance
premiums not paid when due on any prior Settlement Date shall be set aside in
the Collection Account and paid to the HEAL Insurer on such Settlement Date;

         second, an amount equal to Servicers' Fees for the Pledged Student
Loans with respect to such Settlement Period plus any Servicers' Fees not paid
when due on any prior Settlement Date shall be set aside in the Collection
Account and paid first, ratably, to the Sub-Servicers on such Settlement Date
and, during the Revolving Period, all remaining Servicers' Fees for the Pledged
Student Loans with respect to such Settlement Period plus any remaining
Servicers' Fees not paid when due on any prior Settlement Date shall be set
aside in the Collection Account and paid to the Master Servicer on such
Settlement Date;

         third, an amount equal to the Eligible Lender Trustee's Fees with
respect to such Settlement Period, plus any Eligible Lender Trustee's Fees not
paid when due on any prior Settlement Date and all expenses incurred by the
Eligible Lender Trustee in connection with the enforcement of this Agreement
shall be set aside in the Collection Account and paid to the Eligible Lender
Trustee on such Settlement Date;

         fourth, an amount equal to the Indenture Trustee's Fees with respect to
such Settlement Period, plus any Indenture Trustee's Fees not paid when due on
any prior Settlement Date and all expenses incurred by the Indenture Trustee in
connection with the enforcement of this Agreement shall be set aside in the
Collection Account and paid to the Indenture Trustee on such Settlement Date;

         fifth, an amount equal to the Letter of Credit Provider's Fees with
respect to such Settlement Period, plus any Letter of Credit Provider's Fees not
paid when due on any prior Settlement Date shall be set aside in the Collection
Account and paid to the Letter of Credit Provider on such Settlement Date;

                                       13

<PAGE>

         sixth, an amount equal to Administrative Expenses with respect to such
Settlement Period, plus any Administrative Expenses not paid when due on any
prior Settlement Date shall be set aside in the Collection Account and paid to
the party to which such amounts are owed or to the Issuer for payment to such
party on such Settlement Date;

         seventh, an amount equal to the interest accrued (or to be accrued) in
respect of all Advances during such Settlement Period, plus any interest on the
Advances not paid when due on any prior Settlement Date and interest thereon
shall be set aside in the Collection Account and paid to the Agent for the
account of the Lenders on such Settlement Date;

         eighth, an amount equal to all Fees accrued (or to be accrued) during
such Settlement Period (that have not been paid pursuant to clause second,
third, fourth or fifth of this Section 3.03(b)), plus any Fees not paid when due
on any prior Settlement Date, together with interest thereon, shall be set aside
in the Collection Account and paid to the Agent for the account of Lenders or
any other intended recipient of such Fees on such Settlement Date;

         ninth, during the Liquidation Period, to the Agent on each Settlement
Date for the account of the Lenders and applied to the outstanding principal
amount of the Advances;

         tenth, an amount equal to any other amounts due and owing to the
Indenture Trustee, Eligible Lender Trustee, Agent, any Affected Party, any
Indemnified Party or the Lenders pursuant to this Agreement shall be set aside
in the Collection Account and paid to the Indenture Trustee, Eligible Lender
Trustee, Agent, such Affected Party, such Indemnified Party or the Lenders, as
the case may be, when due in accordance with this Agreement;

         eleventh, during the Revolving Period, to the Indenture Trustee for
deposit to the Reserve Account in an amount equal the amount by which the
balance in the Reserve Account is less than the origination and other up-front
fees with respect to any Private Loans which do not have the benefit of a
Private Loan Guarantee Agreement and the Reserve Account Minimum Balance;

         twelfth, an amount equal to any other amounts due and owing to the
Letter of Credit Provider pursuant to this Agreement or the Premium Letter of
Credit shall be set aside in the Collection Account and paid to the Letter of
Credit Provider when due; and

         thirteenth, during the Liquidation Period, all remaining Servicers'
Fees for the Pledged Student Loans with respect to such Settlement Period plus
any remaining Servicers' Fees not paid when due on any prior Settlement Date
shall be set aside in the Collection Account and paid to the Master Servicer on
such Settlement Date.

         Use of Funds. The Indenture Trustee may withdraw funds from the
Collection Account for the purchase or origination of Eligible Student Loans by
the Issuer to the extent there are Available Funds remaining in the Collection
Account after application of first through thirteenth of Section 3.03(b). The
Issuer may not purchase Student Loans pursuant to this subsection (c) from an
Originator with respect to which a Purchase Termination Event has occurred. Any
Eligible Student Loans purchased or originated by Issuer with funds from the
Collection Account shall automatically become Pledged Student Loans.

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         Releases of Collateral from Collection Account. On the date of any
release of Collateral pursuant to Section 1.04 hereof, at Issuer's request, the
Indenture Trustee may withdraw funds from the Collection Account and may release
its security interest on Pledged Student Loans and Related Security purchased
with funds from the Collection Account under Section 3.03(c) so long as the
Asset Coverage Ratio after giving effect to such release is greater than or
equal to 102.75%.

         Final Payout Date. Any funds remaining in the Collection Account and
the Reserve Account after the Final Payout Date shall be paid to Issuer.

         SECTION 3.04.  Reserve Account.

         Establishment of Reserve Account. On and prior to the initial Borrowing
Date, Issuer shall deposit into the Reserve Account an amount equal to the
Reserve Account Minimum Balance. Thereafter, Issuer shall deposit to the Reserve
Account (i) all amounts required to be deposited therein pursuant to clause
eleventh of Section 3.03(b), and (ii) all origination and other up-front fees
paid by any Obligors or related Persons with respect to any Private Loans that
do not have the benefit of a Private Loan Guarantee Agreement.

         Withdrawals from Reserve Account. On each Settlement Date, the
Indenture Trustee shall withdraw from the Reserve Account the amounts on deposit
therein and treat such amounts as Collections and apply them as set forth in
Section 3.03(b) to the extent such withdrawal is necessary to pay the amounts
set forth in Section 3.03(b).

         Distribution on Final Payout Date. On the Final Payout Date, amounts
remaining on deposit in the Reserve Account shall be distributed to Issuer.

         SECTION 3.05.  Payments and Computations, Etc.; Monthly Advances.

         Payments. All amounts to be paid or deposited by the Indenture Trustee
or Issuer to the Agent or Lenders hereunder shall be paid or deposited in
accordance with the terms hereof no later than 11:00 a.m. (New York City time)
on the day when due in lawful money of the United States of America in same day
funds, to the Agent's Account.

         Late Payments. Issuer shall, to the extent permitted by law and subject
to Section 2.04, pay to Lenders interest on all amounts not paid or deposited by
Issuer when due hereunder at 2% per annum above the interest rate otherwise
applicable to such amount pursuant to this Agreement or, if no interest rate is
otherwise applicable to such amount pursuant to this Agreement, at 2% per annum
above the Alternate Base Rate, payable on demand.

         Method of Computation. All computations of interest, any fees payable
under Section 4.01 and any other fees payable by Issuer to Lenders or the Agent
in connection with Borrowings hereunder shall be calculated by the Agent on the
basis of a year of 360 days (or in the case of interest calculated by reference
to the Alternate Base Rate, 365 or 366 days, as applicable), for actual days
elapsed.

         Indenture Trustee's Reliance. In making the deposits, distributions and
calculations required to be made by it hereunder, the Indenture Trustee shall be
entitled to rely, in good faith,

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<PAGE>

on information supplied to the Indenture Trustee by the Agent. The Agent agrees
to provide to the Indenture Trustee instructions with respect to such
distributions by 3:00 p.m. (New York City time) at least one Business Day prior
to each Settlement Date. If the Indenture Trustee has not received such
instructions by such time, the Indenture Trustee shall immediately notify the
Agent. The Indenture Trustee shall only make distributions hereunder pursuant to
the terms hereof or, if the express terms do not conflict therewith, upon the
written instructions of the Agent.

         Monthly Advances. If Issuer or the Eligible Lender Trustee (or a
Servicer on its behalf) has applied for a Guarantee Payment from a Guarantor or
an Interest Subsidy Payment or a Special Allowance Payment from the Department,
and Issuer, the Eligible Lender Trustee or the Master Servicer, as the case may
be, has not received the related payment prior to the end of the Settlement
Period immediately preceding the current Settlement Date, Master Servicer may,
no later than the related Settlement Date, in its sole discretion, deposit into
the Collection Account an amount up to the amount of such payments applied but
not received (such deposits by Master Servicer are referred to herein as
"Monthly Advances"). Master Servicer shall have no obligation, legal or
otherwise, to make any Monthly Advance, and the making of or decision to make a
particular Monthly Advance shall not create any obligation on Master Servicer,
legal or otherwise, to make any future Monthly Advances. If after making a
Monthly Advance, Issuer (or the Eligible Lender Trustee or the Master Servicer
on its behalf) receives the Guarantee Payment, Special Allowance Payment or
Interest Subsidy Payment for which such Monthly Advance was made, then
notwithstanding the order set forth in Section 3.03(b) hereof, Master Servicer
shall be reimbursed immediately from such Guarantee Payment, Special Allowance
Payment or Interest Subsidy Payment, as the case may be, on deposit in the
Collection Account up to the amount of the related Monthly Advance.

                                   ARTICLE IV

                            FEES AND YIELD PROTECTION

         SECTION 4.01.  Fees. Issuer shall pay to the Agent for the account of
CNAI, the Agent and the Lenders certain fees in the amounts and on the date set
forth in the letter agreement between Issuer and the Agent dated October 18,
2002 (as the same may be amended, supplemented or otherwise modified, the
"Program Fee Letter"). Issuer shall also pay (i) to the Indenture Trustee for
the account of the Indenture Trustee the Indenture Trustee's Fees on the date
set forth in the letter agreement (the "Indenture Trustee Fee Letter") between
Issuer and the Indenture Trustee dated October 18, 2002, (ii) to the Eligible
Lender Trustee for the account of the Eligible Lender Trustee certain Fees
payable to the Eligible Lender Trustee on the dates and in the amounts set forth
in the letter agreement (the "Eligible Lender Trustee Fee Letter") between
Issuer and the Eligible Lender Trustee dated October 18, 2002, and (iii) to the
Letter of Credit Provider, for the account of the Letter of Credit Provider
certain Fees payable to the Letter of Credit Provider on the dates and in the
amounts set forth in the letter agreement (the "Letter of Credit Provider Fee
Letter") dated October 18, 2002

         SECTION 4.02.  Yield Protection.

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         If any Regulatory Change (including a change to Regulation D) occurring
after the date hereof:

               (A)  shall subject an Affected Party to any tax, duty or other
         charge with respect to any Advance owned by or funded by it (other than
         taxes, duties or charges based on income or gross receipts imposed by
         the jurisdiction in which such Affected Party's principal executive
         office is located), or any obligations or right to make Advances or to
         provide funding therefor, or shall change the basis of taxation (other
         than taxes based on income or gross receipts imposed by the
         jurisdiction in which such Affected Party's principal executive office
         is located) of payments to the Affected Party of any interest or
         principal owed to or with respect to Advances funded in whole or in
         part by it or any other amounts due under this Agreement in respect of
         the Advances owned by or funded by it or its obligations or rights, if
         any, to make Advances or to provide funding therefor (except for
         changes in the rate of tax on the overall net income or gross receipts
         of such Affected Party imposed by the jurisdiction in which such
         Affected Party's principal executive office is located);

               (B)  shall impose, modify or deem applicable any reserve
         (including, without limitation, any reserve imposed by the Federal
         Reserve Board, but excluding any reserve included in the determination
         of interest on the Advances), special deposit or similar requirement
         against assets of any Affected Party, deposits or obligations with or
         for the account of any Affected Party or with or for the account of any
         affiliate (or entity deemed by the Federal Reserve Board to be an
         affiliate) of any Affected Party, or credit extended by any Affected
         Party;

               (C)  shall change the amount of capital maintained or required or
         requested or directed to be maintained by any Affected Party;

               (D)  shall impose any other condition affecting any Advance owned
         or funded in whole or in part by any Affected Party, or its obligations
         or rights, if any, to make Advances or to provide funding therefor; or

               (E)  shall change the rate for, or the manner in which the
         Federal Deposit Insurance Corporation (or a successor thereto)
         assesses, deposit insurance premiums or similar charges;

and the result of any of the foregoing is or would be

               (x)  to increase the cost to or to impose a cost on an Affected
         Party funding or making or maintaining any Advance, or any purchases,
         reinvestments, or loans or other extensions of credit under any Program
         Support Agreement or any commitment of such Affected Party with respect
         to any of the foregoing;

               (y)  to reduce the amount of any sum received or receivable by an
         Affected Party under this Agreement or any other Program Support
         Agreement, or under any Program Support Agreement with respect thereto;
         or

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               (z)  in the sole determination of such Affected Party, to reduce
         the rate of return on the capital of an Affected Party as a consequence
         of its obligations hereunder or under any other Program Support
         Agreement or arising in connection herewith to a level below that which
         such Affected Party could otherwise have achieved;

then within thirty days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth in reasonable detail the basis of
such demand), Issuer shall pay directly to such Affected Party such additional
amount or amounts as will compensate such Affected Party for such additional or
increased cost or such reduction.

         Each Affected Party will promptly notify Issuer and the Agent of any
event of which it has actual knowledge which will entitle such Affected Party to
compensation pursuant to this Section 4.02; provided, however, no failure to
give or delay in giving such notification shall adversely affect the rights of
any Affected Party to such compensation.

         In determining any amount provided for or referred to in this Section
4.02, an Affected Party may use any reasonable averaging and attribution methods
that it (in its sole discretion) shall deem applicable and which it applies on a
consistent basis. Any Affected Party when making a claim under this Section 4.02
shall submit to Issuer a statement as to such increased cost or reduced return,
which statement shall, in the absence of manifest error, be conclusive and
binding upon Issuer.

         SECTION 4.03.  Funding Losses. In the event that any Program Support
Provider or any Lender shall incur any loss or expense (including, without
limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Program Support
Provider or Lender to make any purchase or maintain any purchase) as a result of
(i) any settlement with respect to any Advance being made on any day other than
the applicable Settlement Date with respect thereto, or (ii) any Borrowing not
being made in accordance with a request therefor under Section 1.02, then,
within 30 days of written notice from the Agent to Issuer, Issuer shall pay to
the Agent for the account of such Program Support Provider or the Lenders, the
amount of such loss or expense (including, without duplication, any related
Termination Fee). Such written notice shall, in the absence of manifest error,
be conclusive and binding upon Issuer.

                                   ARTICLE V

                            CONDITIONS OF BORROWINGS

         SECTION 5.01.  Conditions Precedent to Initial Borrowing. The initial
Borrowing is subject to the condition precedent that the Agent shall have
received, on or before the date of such Borrowing the following, each (unless
otherwise indicated) dated such date and in form and substance satisfactory to
the Agent and the Lenders:

         A copy of the resolutions of the Board of Directors of Issuer approving
this Agreement and the other Transaction Documents to which Issuer is a party to
be delivered by it hereunder and the transactions contemplated hereby, together
with a copy of the Limited Liability Company Agreement of Issuer, each certified
by its secretary or assistant secretary;

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<PAGE>

         A good standing certificate for Issuer issued by the State of Delaware,
as of a recent date acceptable to the Agent and the Lenders;

         A certificate of the secretary or assistant secretary of Issuer
certifying the names and true signatures of the officers authorized on its
behalf to sign the Transaction Documents to be delivered by it (on which
certificate the Agent and Lenders may conclusively rely until such time as the
Agent and Lenders shall receive from Issuer a revised certificate meeting the
requirements of this subsection (c)):

         The Certificate of Formation of Issuer, duly certified by the Secretary
of State of Delaware, as of a recent date acceptable to the Agent and the
Lenders;

         Financing statements on Form UCC-1 naming Issuer as the debtor and the
Indenture Trustee, for the benefit of the Secured Parties, as the secured party,
or other similar instruments or documents, in proper form for filing in the
offices in which filings are necessary or, in the opinion of the Agent or any
Lender, desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect the Indenture Trustee's security interest in the
Collateral, for the benefit of the Secured Parties;

         A search report as of a recent date acceptable to the Agent and the
Lenders provided in writing to the Agent by Issuer, in a form acceptable to the
Agent and the Lenders, listing all effective financing statements that name
Issuer as debtor and that are filed in the jurisdictions in which filings were
made pursuant to subsection (e) above and in such other jurisdictions that Agent
or any Lender shall reasonably request, together with copies of such financing
statements (none of which shall cover any Collateral or if so covered, the Agent
shall have received duly executed termination statements with respect thereto);

         Favorable opinions of counsel to Issuer and, if requested by the Agent
or any Lender, each of the other parties to each Purchase and Sale Agreement,
each Servicing Agreement, each Guarantee Agreement and each Eligible Lender
Trust Agreement, in each case in form and substance reasonably satisfactory to
the Agent and the Lenders, including without limitation security interest
opinions, a true sale opinion with respect to transfers under each Purchase and
Sale Agreement, and a non-substantive consolidation opinion with respect to each
Affiliated Originator and the Issuer;

         Such powers of attorney as the Agent or any Lender shall reasonably
request to enable the Agent to collect all amounts due under any and all
Collateral;

         The Note, duly executed by Issuer;

         Copies of each Guarantee Agreement, duly executed by the related
Guarantor and the Eligible Lender Trustee and certified by Issuer as being a
true and correct copy thereof;

         Copies of each Servicing Agreement between the Master Servicer and any
applicable Sub-Servicer (including all amendments thereto), duly executed by the
Master Servicer and any applicable Sub-Servicer and certified by Issuer as being
a true and correct copy thereof;

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<PAGE>

         A copy of this Agreement and each of the other Transaction Documents,
duly executed by Issuer, each Lender, Agent, Indenture Trustee, Eligible Lender
Trustee, the Letter of Credit Provider and each other party thereto;

         Such other documents, opinions and certificates as Lenders or the Agent
may reasonably request;

         Evidence that the Accounts have been established and that on or prior
to the initial Borrowing, the amount on deposit in the Reserve Account is at
least equal to the Reserve Account Minimum Balance; and

         A pro-forma settlement statement prepared in respect of the initial
Borrowing.

         In addition, the Indenture Trustee shall have received the executed
original of the Demand Note, delivered by the Issuer in pledge to the Indenture
Trustee for the benefit of the Secured Parties.

         SECTION 5.02.  Conditions Precedent to All Borrowings. Each Borrowing
(including the initial Borrowing) shall be subject to the further conditions
precedent that on the date of such Borrowing the following statements shall be
true:

         the representations and warranties contained in Section 6.01 are
correct in all material respects on and as of such day as though made on and as
of such day and shall be deemed to have been made (and to be correct in all
material respects) on such day (and Issuer by accepting the amount of such
Borrowing shall be deemed to have certified to such effect);

         no Material Adverse Change in the condition of Issuer, any Affiliated
Originator or the Master Servicer (or, to Issuer's knowledge, any Sub-Servicer)
has occurred and is continuing;

         no event has occurred and is continuing, or would result from such
Borrowing that constitutes an Event of Termination or Unmatured Event of
Termination (and Issuer by accepting the amount of such Borrowing shall be
deemed to have certified to such effect);

         the Agent shall have received a pro-forma Coverage Condition
Certificate, substantially in the form of Exhibit 5.02(d), executed by an
authorized officer of Issuer, showing that after giving effect to each proposed
Borrowing, the Coverage Condition is met;

         the Termination Date shall not have occurred (and Issuer by accepting
the amount of such Borrowing shall be deemed to have certified to such effect);

         the applicable Sub-Servicers, in each case as bailee for the Indenture
Trustee for the benefit of the Secured Parties, shall have received the original
Student Loan Notes that will be acquired or otherwise financed with the proceeds
of such Borrowing;

         all conditions precedent to Issuer's acquisition of the Student Loans
to be acquired or otherwise funded with the proceeds of such Borrowing (other
than the payment of the purchase price therefor) shall have been satisfied and
no Purchase Termination Event shall have occurred with respect to the seller of
such Student Loans;

                                       20

<PAGE>

         the Agent shall have received acknowledgment of releases or termination
statements on Form UCC-3 and any other documents necessary to evidence or
release any security interest (other than that of the Indenture Trustee) in the
Student Loans to be acquired or otherwise funded with the proceeds of such
Borrowing, to the extent required for any such prior security interest to be
terminated;

         the Issuer has paid all fees and expenses due hereunder at such time;
and

         with respect to any Private Loan, prior to any Borrowing with respect
thereto and prior to its inclusion in the calculation of the Coverage Condition,
(A) each such Private Loan shall be (1) covered by and serviced in accordance
with a Servicing Agreement in form and substance satisfactory to the Agent as
approved by the Lenders and (2) the Agent shall have received such other
opinions, approvals, documents and certificates with respect to such Private
Loan as the Agent and the Lenders shall reasonably request and (B) if such
Private Loan has the benefit of a Private Loan Guaranty Agreement and the
Private Loan Guarantor thereof is TERI, the Agent and the Lenders have conducted
such due diligence (including visiting the offices of TERI) as the Agent and the
Lenders shall deem necessary with respect to such Private Loan in its sole
discretion.

Notwithstanding the foregoing, the conditions precedent described in clauses
(a), (b), (d), (e), (f), (g), (h), (i), and (j) above shall not apply to
Borrowings made pursuant to Section 1.01(c) of this Agreement.

         SECTION 5.03.  Delivery of Schedule of Pledged Student Loans. In
connection with any Borrowing (other than a Borrowing pursuant to Section
1.01(c) of this Agreement), Issuer (or the Master Servicer on its behalf) shall
have delivered to the Indenture Trustee an updated Schedule of Pledged Student
Loans reflecting (i) any Student Loans not originated by the Issuer or its
Affiliates, as soon as possible but no later than 5 Business Days after the
acquisition thereof and (ii) with respect to any Student Loans originated by
Issuer or its Affiliates, within 5 Business Days after such origination.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

         SECTION 6.01.  Representations and Warranties of Issuer. Issuer
represents and warrants as follows:

         Organization, Corporate Powers. Issuer is a limited liability company
duly organized, validly existing solely under the laws of the State of Delaware,
is in good standing under the laws of the State of Delaware, has all necessary
corporate power to carry on its present business, is duly licensed or qualified
in all jurisdictions where the nature of its activities require such licensing
or qualifying, and has full power, right and authority to enter into this
Agreement, the other Transaction Documents to which it is, or will be, a party
and the transactions contemplated hereby and thereby, to issue the Note and to
perform each and all of the matters and things herein and therein provided for.

                                       21

<PAGE>

         Issuer Authority, etc. The execution, delivery and performance by
Issuer of this Agreement, the Note and the other Transaction Documents to which
it is, or will be, a party and the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action and this Agreement,
the Note and such Transaction Documents constitute the legal, valid and binding
obligations of Issuer enforceable against Issuer in accordance with their terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and general principals of equity, regardless of whether such enforceability is
considered in a proceeding in equity or law.

         Compliance with Laws and Contracts. (i) The execution, delivery and
performance by Issuer of this Agreement, the Note and the other Transaction
Documents to which Issuer is a party do not and will not (x) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award to which Issuer or its property is subject; (y)
result in a breach of or constitute a default under the provisions of any
indenture, loan or credit agreement or any other material agreement, lease or
instrument to which Issuer may be or is subject or by which it, or its property,
is bound; or (z) result in, or require, the creation or imposition of any Lien
on or with respect of any of the properties of Issuer other than the Lien in
favor of the Indenture Trustee provided herein; and (ii) the Issuer is not in
violation of, or in default under, any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.

         Governmental Approvals. Issuer has obtained all authorizations,
consents, approvals, licenses, exemptions of or filings or registrations with
all governmental commissions, regulatory bodies, boards, bureaus, agencies and
instrumentalities, domestic or foreign, necessary to the conduct of its business
or necessary to the valid execution, delivery and performance by Issuer of this
Agreement, the Note and the other Transaction Documents to which Issuer is, or
will be, a party (the "Approvals"), and such Approvals remain in full force and
effect.

         Litigation. There is no action, suit, proceeding, inquiry or
investigation at law or in equity or before or by any court, public board or
body pending or, to the knowledge of Issuer, overtly threatened in writing
against or affecting the Issuer wherein an unfavorable decision, ruling or
finding would have a Material Adverse Effect on the Issuer or which affects, or
purports to affect, the validity or enforceability against Issuer of any
Transaction Document.

         Employee Benefit Plans. All "employee benefit plans" (as such term is
defined in ERISA) of Issuer and each of its ERISA Affiliates (individually, a
"Plan" and collectively the "Plans") have been maintained and operated in
substantial compliance with all applicable provisions of the Code and ERISA and
the regulations and published interpretations thereunder. No Plan is insolvent
or in reorganization. No proceedings have been instituted to terminate any Plan,
and no conditions exist which would permit the institution of proceedings to
terminate any such Plan. Issuer has no liability of any kind whatsoever, whether
direct, indirect, contingent or otherwise, on account of (i) any violation of
the health care continuation requirements of Part 6 of Title I of ERISA or
Section 4980B of the Code, (ii) under Section 502(i) or Section 502 (l) of ERISA
or Section 4975 of the Code, (iii) under Section 302 of ERISA or Section 412 of
the Code or (iv) under Title IV of ERISA.

                                       22

<PAGE>

         Perfected Interest. Each Pledged Student Loan, including the related
Student Loan Note, is owned by Issuer or by the Eligible Lender Trustee, on
behalf of Issuer, free and clear of any adverse claim, judgment or Lien other
than the Lien created hereby. All other Collateral is owned by Issuer free and
clear of any adverse claim, judgment or Lien other than the Lien created hereby.
No further action, including any filing or recording of any document, is
necessary in order to establish, protect and perfect the first priority security
interest of the Indenture Trustee, for the benefit of the Secured Parties, in
the Collateral as against any third party in any applicable jurisdiction,
including, without limitation, any purchaser from, or creditor of, Issuer. No
financing statement or other instrument similar in effect covering any of the
Collateral or any interest therein is on file in any recording office except
such as may be filed (i) in connection with any Lien arising solely as the
result of any action taken by the Lenders (or any assignee thereof) or by the
Agent, (ii) in favor of the Indenture Trustee or (iii) for which UCC termination
statements have been filed. No consent of any other Person and no authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the pledge by the Issuer of the
Collateral pursuant to this Agreement, for the perfection or maintenance of the
security interest created hereby (including the first priority nature of such
security interest) or for the exercise by the Agent of the rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement.

         Accuracy of Information. All information (including each Monthly
Report) supplied by, or on behalf of, Issuer in writing to the Indenture
Trustee, the Lenders or the Agent in connection with this Agreement or the
transactions contemplated hereby is true and accurate in all material respects
as of the date thereof stated or certified. No information, exhibit or report
furnished by Issuer to the Indenture Trustee, the Lenders or the Agent in
connection with this Agreement contained any material misstatement.

         Terminations. No Event of Termination or Unmatured Event of Termination
exists.

         Margin Regulations. The use of all funds obtained by Issuer under this
Agreement will not conflict with or contravene any of Regulations T, U and X
promulgated by the Board of Governors of the Federal Reserve System from time to
time.

         Issuer Information. The chief place of business and chief executive
office of Issuer are located at the address of Issuer referred to in Section
13.02, and the offices where Issuer keeps all its books, records and documents
evidencing the Pledged Student Loans are located at the addresses specified in
Schedule 6.01(k) (or at such other locations, notified to the Agent in
accordance with Section 7.01(f), in jurisdictions where all action necessary to
maintain the Indenture Trustee's first priority perfected interest, for the
benefit of the Secured Parties, in the Collateral has been taken and completed).
The exact legal name of the Issuer is set forth on the signature page hereof.
The Issuer's organizational identification number is 3416376. Except with
respect to use of the name Grad Partners Premier, LLC, the Issuer has not
changed its name, changed its corporate structure, changed its jurisdiction of
organization, or used any name other than its exact legal name at any time
during the past five years.

                                       23

<PAGE>

         No Disclosure Required. Under applicable laws and regulations in effect
on the date hereof, Issuer is not required to file a copy of this Agreement with
the Securities and Exchange Commission or any other governmental authority.

         Capital of Issuer. Issuer is Solvent.

         Issuer Not an Investment Company. Issuer is not required to register as
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.

         Eligible Student Loans. Each Student Loan included as an Eligible
Student Loan in the calculation of the Coverage Condition, is an Eligible
Student Loan.

         Material Adverse Effect. No Material Adverse Change in the condition of
the Issuer or the Master Servicer (or, to Issuer's knowledge, any Sub-Servicer)
has occurred and is continuing.

         Prior Business Activity. The Issuer has no other business activity
except as contemplated in this Agreement and upon the date hereof is not party
to any other debt, financing or other material transaction or agreement other
than the Transaction Documents.

         Subsidiaries.  The Issuer has no subsidiaries.

         Acquisition of Student Loans. With respect to each Pledged Student
Loan, the Issuer has acquired such Pledged Student Loan pursuant to a Purchase
and Sale Agreement.

         Demand Note. The Demand Note has been duly authorized, issued and
delivered by Education Lending Services, Inc., and the Demand Note (and each
other instrument comprising a part of the Demand Note Collateral that shall have
been issued by Education Lending Services, Inc.) is the legal, valid and binding
obligation of Education Lending Services, Inc., and Education Lending Services,
Inc. is not in default thereunder. The Issuer, as secured party under the Demand
Note, has a first priority perfected security interest in the collateral pledged
thereunder.

         SECTION 6.02.  Reassignment upon Breach. Issuer, the Agent or the
Indenture Trustee, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon the discovery of any breach in any material
respects of the representations and warranties made by Issuer pursuant to
Section 6.01(g) or (o) or any breach in any material respects of the covenants
of Issuer made pursuant to Section 7.03. Unless any such breach shall have been
cured within 30 days following the discovery thereof by Issuer or receipt by
Issuer of written notice from the Indenture Trustee or the Agent of such breach,
the Pledged Student Loan as to which such representation and warranty or
covenant relates shall be reassigned to Issuer (a "Reassignment") as of the
first day succeeding the end of such 30-day period that is the last day of a
Settlement Period. In consideration of and simultaneously with the Reassignment
of such Pledged Student Loan, Issuer shall deposit to the Collection Account
immediately available funds equal to the outstanding Principal Balance of such
Pledged Student Loan, plus accrued and unpaid interest thereon, plus any
Unamortized Premium thereon plus any unreimbursed Monthly Advance with respect
thereto (the "Reassignment Amount"). Notwithstanding the foregoing, so long as
no Event of Termination shall have occurred and be continuing, during the
Revolving Period, Issuer may, at its option in lieu of depositing such
Reassignment Amount to the

                                       24

<PAGE>

Collection Account on such date, may pledge to the Indenture Trustee on such
date for inclusion in the Collateral a new Eligible Student Loan in substitution
for such Pledged Student Loan with respect to which a Borrowing could be made
(assuming Issuer requested a Borrowing in connection with such new Eligible
Student Loan pursuant to Section 1.02) in an amount at least equal to the
Reassignment Amount, by delivering an updated Schedule of Pledged Student Loans
to the Indenture Trustee reflecting such substitution and delivering to the
applicable Sub-Servicer, as bailee for the Indenture Trustee, if not already in
its possession the original Student Loan Note for the new Student Loan to be
included in the Collateral; provided, however, that the aggregate outstanding
Principal Balance of all such substitute Student Loans shall not at any time
exceed 10% of the Total Outstanding Advances. The Indenture Trustee shall
execute such documents reasonably requested by Issuer in order to effect such
reassignment and to release the Indenture Trustee's Lien thereunder.

         SECTION 6.03.  Representations and Warranties of Indenture Trustee. The
Indenture Trustee hereby represents and warrants as follows:

         Due Organization. It is a national banking association duly organized
and validly existing in good standing under the laws of the United States. It
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.

         Authorization. It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.

         Eligible Lender. It is an "eligible lender" as such term is defined in
Section 435(d) of the Higher Education Act, for purposes of being pledgee of the
Pledged Student Loans as contemplated by this Agreement.

         Binding Obligation. This Agreement constitutes, and each other
Transaction Document to be executed by the Indenture Trustee when duly executed
and delivered, will constitute, a legal, valid and binding obligation of the
Indenture Trustee, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

         SECTION 6.04.  Representations and Warranties of Eligible Lender
Trustee. The Eligible Lender Trustee hereby represents and warrants as follows:

         Due Organization. It is a national banking association duly organized
and validly existing in good standing under the laws of the United States. It
has all requisite corporate power and authority to execute and deliver this
Agreement.

         Eligible Lender. It is an "eligible lender" as such term is defined in
Section 435(d) of the Higher Education Act.

                                       25

<PAGE>

                                  ARTICLE VII

                    GENERAL COVENANTS OF ISSUER AND SERVICER

         SECTION 7.01.  Affirmative Covenants of Issuer. From the date hereof
until the Final Payout Date, Issuer will, unless the Agent and the Lenders shall
otherwise consent in writing:

         Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders, including those with respect to
the Pledged Student Loans except to the extent that failure to comply with such
laws, rules, regulations and orders would not have a Material Adverse Effect on
the Issuer.

         Preservation of Existence. Preserve and maintain its existence as a
limited liability company, and its rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in good standing
as a foreign limited liability company in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could be reasonably expected to have a Material Adverse Effect on
the Issuer.

         Audits. (i) At any time and from time to time during regular business
hours, permit the Agent, the Lenders, the Indenture Trustee or any of their
agents or representatives, upon prior written notice of at least ten Business
Days if no Event of Termination has occurred and is continuing, (y) to examine
and make copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the possession or
under the control of Issuer relating to the Collateral, and (z) to visit the
offices and properties of Issuer for the purpose of examining such materials
described in clause (i)(y) next above, and to discuss matters relating to
Pledged Student Loans or Issuer's performance hereunder with any of the officers
or employees of Issuer having knowledge of such matters; (ii) without limiting
the provisions of clause (i) next above, from time to time on the reasonable
request of the Agent or, in the event of an investigation, audit (not in the
ordinary course) or other proceeding instigated by the Department, permit
certified public accountants or other auditors acceptable to the Agent to
conduct, at Issuer's expense, a review of Issuer's books and records with
respect to the Pledged Student Loans; and (iii) without limiting the foregoing,
once per calendar year or, upon the occurrence and during the continuance of an
Event of Termination, at any time at the request of the Agent, cooperate fully
with the Agent or any auditor or representative appointed by the Agent in an
agreed upon procedures audit at Issuer's expense with respect to all Pledged
Student Loans.

         Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Pledged Student Loans in the event of
the destruction of the originals thereof), and keep and maintain, or cause to be
kept and maintained, all documents, books, records and other information
reasonably necessary or advisable for the collection of all the Pledged Student
Loans (including, without limitation, records adequate to permit the daily
identification of each new Pledged Student Loan included in the Collateral from
time to time and all Collections of, payments on and adjustments to each
existing Pledged Student Loan).

                                       26

<PAGE>

         Performance and Compliance with Student Loans. At its expense, timely
and fully perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Higher Education Act, the
Public Health Service Act, Student Loan Notes, the Guarantee Agreements, the
Servicing Agreements and other agreements to which Issuer is a party related to
the Collateral.

         Location of Records. Keep its chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Pledged Student Loans and all agreements related to such Collateral (and all
original documents relating thereto, unless such documents have been delivered
to the applicable Sub-Servicer or a bailee thereof), at the address(es) of
Issuer referred to in Schedule 6.01(k) or, upon 30 days' prior written notice to
the Agent, at such other locations selected by the Issuer.

         Administration of the Program. Administer, operate and maintain its
student loan program in such manner as to ensure that such program and (i) in
the case of FFELP Loans that are Pledged Student Loans, will benefit, in all
material respects, from the FFELP Program, the Guarantee Agreements related
thereto and the federal program of reimbursement for FFELP Loans pursuant to the
Higher Education Act, or from any other federal statute providing for such
federal program, (ii) in the case of HEAL Loans that are Pledged Student Loans,
will benefit in all material respects, from the HEAL Program, or for any federal
statute providing for such federal program, (iii) in the case of Private Loans,
will benefit in all material respects from Guarantee Agreements related thereto,
and (iv) promptly notify the Agent of any default under any Guarantee Agreement.

         Guarantee Agreements and Servicing Agreements; Enforcement. (i)
Maintain in effect all Guarantee Agreements and Servicing Agreements, diligently
and promptly enforce its rights thereunder and take, or use commercially
reasonable steps to cause the applicable Sub-Servicer to take, all commercially
reasonable steps, actions and proceedings necessary or appropriate for the
enforcement of all material terms, covenants and conditions of each Student Loan
that is a Pledged Student Loan, including the prompt payment of all principal
and interest payments and all other amounts due with respect to such Student
Loans, including (in the case of FFELP Loans) all Interest Subsidy Payments and
Special Allowance Payments, in the case of HEAL Loans all Insurance Payments and
in the case of FFELP Loans and Private Loans (which Private Loans have the
benefit of a Private Loan Guarantee Agreement), Guarantee Payments, except (in
the case of Federal Loans) for such deferments and forbearance permitted under
the Higher Education Act or Public Health Service Act, as applicable and (ii)
enter into Servicing Agreements with Sub-Servicers so that all Federal Loans and
Private Loans that are Pledged Student Loans are covered thereby.

         Insurance. Maintain in effect directors' and officer's insurance in
such liability and amounts and with such deductibles as are customary in the
industry and provide prompt notice to the Agent of any material changes in such
insurance.

         Separate Business. At all times:

               (i)  (y) maintain and prepare financial reports, financial
         statements, books and records and bank accounts separate from those of
         its Affiliates and any other Person or

                                       27

<PAGE>

         entity and (z) not permit any Affiliate or any other Person independent
         access to its bank accounts;

               (ii)   not commingle its funds and other assets with those of any
         Affiliate or any other Person or entity (other than any such
         commingling which might result from the performance of a Servicer's
         duties in accordance with any Servicing Agreement);

               (iii)  conduct its own business in its own name and hold all of
         its assets in its own name and in such a manner that it will not be
         costly or difficult to segregate, ascertain or identify its individual
         assets from those of any Affiliate or any other Person;

               (iv)   remain Solvent and pay its debts and liabilities
         (including employment and overhead expenses) from its assets as the
         same become due:

               (v)    do all things necessary to observe corporate formalities,
         and preserve its existence as a single-purpose, bankruptcy-remote
         entity;

               (vi)   enter into transactions with Affiliates only if each such
         transaction is commercially reasonable and on substantially similar
         terms as a transaction that would be entered into on an arm's-length
         basis with a Person other than an Affiliate of Issuer (provided,
         however, that this clause shall not be interpreted to prohibit the
         Demand Note);

               (vii)  pay the salaries of its own employees, if any, from its
         own funds and maintain a sufficient number of employees in light of its
         contemplated business operations;

               (viii) compensate each of its consultants and agents from its own
         funds for services provided to it and pay from its own assets all
         obligations of any kind incurred;

               (ix)   not (y) acquire obligations or securities of any Affiliate
         or any of the stockholders of Issuer (other than the Demand Note) or
         (z) buy or hold any evidence of indebtedness issued by any other Person
         or entity, other than cash, Eligible Investments and Pledged Student
         Loans;

               (x)    allocate fairly and reasonably and pay from its own funds
         the cost of (i) any overhead expenses (including paying for any office
         space) shared with any Affiliate of Issuer and (ii) any services (such
         as asset management, legal and accounting) that are provided jointly to
         Issuer and one or more of its Affiliates;

               (xi)   maintain and utilize separate stationery, invoices and
         checks bearing its own name, separate office space (which may be a
         separately identified area in office space shared with one or more
         Affiliates of Issuer), a separate mailing address, and a separate
         telephone number;

               (xii)  not make any loans or advances to, or pledge its assets
         for the benefit of, any other Person or entity, including, without
         limitation, any Affiliate (except as contemplated by the Demand Note,
         its operating agreement and this Agreement);

                                       28

<PAGE>

               (xiii)  be, and at all times hold itself out to the public as, a
         legal entity separate and distinct from any other Person;

               (xiv)   to the extent known by the Issuer, correct any
         misunderstanding regarding the separate identity of the Issuer;

               (xv)    not identify itself or any of its Affiliates as a
         division or part of any other entity;

               (xvi)   maintain adequate capital for the normal obligations
         reasonably foreseeable in a business of its size and character and in
         light of its contemplated business operations;

               (xvii)  not amend, modify or otherwise change its organizational
         documents, or suffer the same to be amended, modified or otherwise
         changed without the prior written consent of the Agent and the Lenders;

               (xviii) maintain at all times at least one independent director
         provided by CT Corporation who is not, and has not been for five years
         preceding the date hereof, a director, officer, employee or shareholder
         (or a family member of one of the foregoing) of an Originator or any
         Affiliate of an Originator (other than the Issuer); and

               (xix)   conduct in its business and activities in all respects in
         compliance with the assumptions contained in the legal opinion of
         Thompson Hine of even date herewith relating to true sale and
         substantive consolidation issues.

         Delivery of Student Loan Notes. Issuer shall deliver or cause to be
delivered to the applicable Sub-Servicers, in each case as bailee for the
Indenture Trustee for the benefit of the Secured Parties, each of the original
Student Loan Notes for all Pledged Student Loans.

         Business. Issuer shall not own assets or engage in any business other
than the assets and transactions specifically contemplated in this Agreement and
the other Transaction Documents.

         Status as Eligible Lender. Issuer shall maintain, directly or through
the Eligible Lender Trustee, its status as an "eligible lender" under Section
435(d)(1)(D) of the Higher Education Act and shall promptly notify the Agent of
any change in such status.

         Purchase and Sale Agreements; Enforcement. Issuer shall use
commercially reasonable efforts to monitor each Originator and shall provide the
Agent prompt notice of the occurrence of any event listed in clauses (a) through
(e) of the definition of "Purchase Termination Event". Issuer shall enforce its
rights with respect to all material obligations of the Originators under each
Purchase and Sale Agreement and all other transaction documents to which any
Originator is a party.

         Deposit of Collections. Issuer shall deposit, shall cause the
Affiliated Originators and the Master Servicer to deposit, and shall exercise
all rights available to it under its agreements with Third Party Originators to
cause such Third Party Originators to deposit or to forward to the

                                       29

<PAGE>

Issuer or Master Servicer to deposit, all Collections into the Collection
Account as soon as practicable following receipt thereof, but no later than two
Business Days after receipt thereof.

         Additional Financing Statements. Issuer shall file or cause to be
filed, and authorizes the Agent and the Indenture Trustee to file, UCC financing
statements against all Originators sufficient to perfect the security interest
in the Issuer in Student Loans acquired from such Originators. In addition, at
the request of the Agent or the Indenture Trustee the Issuer shall file or cause
to be filed, and authorizes the Agent and the Indenture Trustee to file, UCC
financing statement assignments assigning to the Indenture Trustee any financing
statement showing the Issuer as secured party with respect to the Collateral.

         SECTION 7.02.  Reporting Requirements of Issuer. From the date hereof
until the Final Payout Date, Issuer (or the Master Servicer on its behalf) will,
unless the Agent and the Lenders shall otherwise consent in writing, furnish to
the Agent:

         Quarterly Financial Statements. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each fiscal
year of Issuer, copies of the financial statements of the Issuer, in conformity
with generally accepted accounting principles, along with a certificate by an
authorized officer of Issuer certifying that such copies are the true and
complete copies of the financial statements;

         Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year of Issuer, copies of the
financial statements of Issuer prepared and duly certified by any nationally
recognized public accounting firm approved by the Agent, in conformity with
generally accepted accounting principles, along with a certificate by an
authorized officer of Issuer certifying that such copies are the true and
complete copies of the financial statements;

         Monthly Report. On or before the 20th day of each month (or, if any
such day is not a Business Day, on the next succeeding Business Day), a Monthly
Report with respect to the preceding calendar month in electronic form together
with a signed copy of such Monthly Report delivered by facsimile, messenger or
overnight courier;

         ERISA. Promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any "reportable event" described in Section
4043 of ERISA which Issuer or an ERISA Affiliate thereof files under ERISA with
the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or which Issuer receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation;

         Events of Termination. Immediately upon becoming aware of the existence
of any Event of Termination or Unmatured Event of Termination, a written
statement of an authorized officer of Issuer setting forth details of such event
and the action that Issuer proposes to take with respect thereto; and
immediately upon becoming aware of any Servicer Event of Default, written notice
thereof;

         Litigation. As soon as possible and in any event within five Business
Days of Issuer's actual knowledge thereof, written notice of (i) any litigation,
investigation or proceeding which may exist at any time that could reasonably be
expected to affect Issuer and (ii) any material

                                       30

<PAGE>

adverse development in previously disclosed litigation, including in each case,
if known to Issuer, any of the same against the Master Servicer (or any
Sub-Servicer);

         Act Amendments. Promptly after the occurrence thereof, written notice
of changes in the Higher Education Act, Public Health Service Act or any other
law, rule or regulation of the United States that could have a Material Adverse
Effect with respect to any party to the Transaction Documents;

         Financial Statements of Private Loan Guarantors. With respect to each
Private Loan Guarantor, promptly after receipt thereof, copies of any annual
audited financial statements of such Guarantor certified by an independent
certified public accounting firm;

         Financial Statements and Annual Compliance Audit of the Master Servicer
(or any Sub-Servicer). With respect to the Master Servicer (or any
Sub-Servicer), (A) promptly after receipt thereof, copies of any annual audited
financial statements of the Master Servicer (or any Sub-Servicer), certified by
an independent certified public accounting firm that have been received by
Issuer; (B) on an annual basis within ten (10) days after receipt thereof copies
of SAS 70 reports for each Sub-Servicer, or if not available the annual
compliance audit for each Sub-Servicer required by Section 428(b)(l)(4) of the
Higher Education Act, as amended; and (C) on an annual basis, each
Sub-Servicer's reject and cure rates and demonstrating Sub-Servicer compliance
under applicable regulations;

         Schedule of Pledged Student Loans. No later than the 20th Business Day
of each calendar month, a schedule of all Pledged Student Loans financed during
the preceding calendar month and, at the request of the Agent in connection with
the performance of any Portfolio Valuation, a schedule of all Pledged Student
Loans in electronic form acceptable to the Agent including all information
necessary for the performance of such Portfolio Valuation;

         Coverage Condition Certificate. Concurrently with the delivery of the
Monthly Report referred to in clause (c) above, a Coverage Condition
Certificate, substantially in the form of Exhibit 5.02(d), executed by an
authorized officer of Issuer;

         Credit and Collection Policy. Promptly after the occurrence thereof,
written notice of material changes in the Credit and Collection Policy;

         Certain Audit Reports. Promptly, and in any event within 3 Business
Days after the provision thereof copies of each audit report prepared and
submitted by Issuer to the Secretary of Health and Human Services as required by
the Public Health Service Act;

         Monthly Portfolio Reports. No later than the 20th Business Day of each
calendar month, a loan portfolio report of Student Loan portfolio activity and
delinquency statistics for the preceding calendar month;

         Segmented Portfolio Reports. No later than the 20th Business Day of
each calendar quarter, a loan portfolio report of Student Loan portfolio
activity and delinquency statistics for the preceding calendar quarter,
segmented by loan type, loan status, Sub-Servicer and school type; and

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         Approved School Lender Agreements. Within 20 Business Days after
execution thereof, a copy of the Purchase and Sale Agreement executed by each
new Approved School Lender added to an Affiliated Originator's school lender
program.

         Other. Promptly, from time to time, such other information, documents,
records or reports respecting the Collateral or the condition or operations,
financial or otherwise, of Issuer as the Agent, the Lenders or Indenture
Trustee, may from time to time reasonably request in order to protect the
interests of the Agent, the Lenders and Indenture Trustee, under or as
contemplated by this Agreement.

         SECTION 7.03.  Servicing Covenants. From the date hereof until the
Final Payout Date, Issuer (or the Master Servicer on its behalf) will, unless
the Agent and the Lenders shall otherwise consent in writing comply with the
following covenants.

         Servicing. Issuer (or the Master Servicer on its behalf) shall or shall
cause each applicable Sub-Servicer to service, administer and make collections
with respect to the Pledged Student Loans in accordance in all material respects
with all applicable federal and state laws, including all applicable standards,
guidelines and requirements of the Higher Education Act, the Public Health
Service Act and any Guarantee Agreement, the failure to comply with which would
adversely affect the eligibility of one or more of the Pledged Student Loans for
Interest Subsidy Payments, Special Allowance Payments, Insurance Payments or
Guarantee Payments, as applicable, or could otherwise be reasonably expected to
have a material adverse effect on the Lenders. Issuer (or the Master Servicer on
its behalf) shall not and shall not permit any Sub-Servicer to (i) rescind or
cancel any Pledged Student Loan except as ordered by a court of competent
jurisdiction or governmental authority or as otherwise consented to in writing
by the Agent or (ii) reschedule, revise, defer or otherwise compromise with
respect to payments due on any Pledged Student Loan except pursuant to any
applicable deferral or forbearance periods or otherwise in accordance with all
applicable standards, guidelines and requirements with respect to the servicing
of the Pledged Student Loans. Issuer (or the Master Servicer on its behalf)
shall not otherwise agree, or permit any Sub-Servicer to otherwise agree, to any
decrease of the interest rate on, or the principal amount payable with respect
to, any Pledged Student Loan except as otherwise permitted in accordance with
applicable standards, guidelines and requirements of the Higher Education Act,
the Public Health Service Act or any Guarantee Agreement. Issuer (or the Master
Servicer on its behalf) shall cause each Sub-Servicer to take any action
required to be taken to maintain each such Guarantee Agreement and to maintain
any and all collection procedures with respect to the Pledged Student Loans,
including (i) filing, pursuing and recovering claims against the Guarantors for
Guarantee Payments with respect to such Pledged Student Loans, (ii) taking any
steps to enforce such Pledged Student Loan such as commencing a legal proceeding
to enforce a Pledged Student Loan in the name of Issuer for the benefit of the
Indenture Trustee and the Lenders and (iii) taking any other collection efforts
that may be necessary or reasonable under the Private Health Service Act, the
Higher Education Act or any Guarantee Agreement (including in the case of any
HEAL Loan requesting proclaim assistance pursuant to the Public Health Service
Act) to collect any Pledged Student Loan. Notwithstanding any of the foregoing,
the Issuer (or the Master Servicer or any Sub-Servicer) shall be permitted to
reschedule, revise, defer or otherwise compromise payments or take other
reasonable actions with respect to Private Loans that are Defaulted Student
Loans in connection with maximizing the recovery on such Private Loans.

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<PAGE>

         Collection of Pledged Student Loan Payments. Issuer (or the Master
Servicer on its behalf) shall, and shall cause the applicable Sub-Servicer, to
make reasonable efforts (including all efforts that may be specified under the
Higher Education Act with respect to FFELP Loans, the Public Health Service Act
with respect to HEAL Loans or under any Guarantee Agreement) to collect all
payments called for under the terms and provisions of the Pledged Student Loans
as and when the same shall become due.

         Collection of Guarantee Payments. Issuer (or the Master Servicer on its
behalf) shall, or shall cause each applicable Sub-Servicer, to make reasonable
efforts to claim, pursue and collect all Guarantee Payments from the Guarantors
pursuant to the Guarantee Agreements with respect to any of the Pledged Student
Loans that have the benefit of a Guarantee Agreement as and when the same shall
become due and payable, and shall comply, and shall cause the Sub-Servicers to
comply, in all material respects with all applicable laws and agreements with
respect to claiming, pursuing and collecting such payments. In connection
therewith, Issuer (or the applicable Sub-Servicer on its behalf) is hereby
authorized and empowered to convey to any Guarantor the Student Loan Note and
the related Pledged Student Loan file representing any Pledged Student Loan that
is covered by such Guarantee Agreement in connection with submitting a claim to
such Guarantor for a Guarantee Payment in accordance with the terms of the
applicable Guarantee Agreement whereupon the Lien of the Indenture Trustee
relating to such Pledged Student Loan shall be released without any further
action of any kind.

         Collection of Interest Subsidy Payments, Special Allowance Payments and
Insurance Payments. Issuer (or the Master Servicer on its behalf) shall make
reasonable efforts to claim, pursue and collect all Interest Subsidy Payments
and Special Allowance Payments from the Department with respect to any of the
Pledged Student Loans that are FFELP Loans and all Insurance Payments with
respect to any Pledged Student Loans that are HEAL Loans, in either case as and
when the same shall become due and payable, shall comply in all material
respects with all applicable laws and agreements with respect to claiming,
pursuing and collecting such payments. All amounts so collected by Issuer (or
the Master Servicer on its behalf) shall constitute Collections for the
applicable Settlement Period and shall be deposited into the Collection Account
in accordance with Section 3.03(a). In connection therewith, Issuer (or the
Master Servicer on its behalf) shall prepare and file with the Department (in
the case of FFELP Loans) or with the HEAL Issuer (in the case of HEAL Loans) on
a timely basis all claims, forms and other documents and filings necessary or
appropriate in connection with the claiming of (i) in the case of FFELP Loans
Interest Subsidy Payments and Special Allowance Payments and otherwise pursuing
and collecting such Interest Subsidy Payments and Special Allowance Payments
from the Department and (ii) in the case of HEAL Loans, Insurance Payments and
otherwise pursuing and collecting such Insurance Payments from the HEAL Insurer.

         Realization upon Pledged Student Loans. Issuer (or the Master Servicer
on its behalf) shall cause, or shall cause each applicable Sub-Servicer, to use
reasonable efforts consistent with customary servicing practices and procedures
and including, all efforts that may be specified under any Guarantee Agreement
(and with respect to FFELP Loans and/or HEAL Loans, all efforts that may be
specified under the Higher Education Act or the Public Health Service Act, as
applicable) in its servicing of any delinquent Pledged Student Loans.

                                       33

<PAGE>

         SECTION 7.04.  Negative Covenants of Issuer. From the date hereof until
the Final Payout Date, Issuer will not, without the prior written consent of the
Agent and the Lenders:

         Sales, Liens, Etc. Except as otherwise provided herein, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist (or permit the Eligible Lender Trustee to create or suffer to exist)
any Lien upon or with respect to, any Pledged Student Loan or other Collateral,
or any interest therein, or any account to which any Collections of or payments
on any Pledged Student Loans or other Collateral are sent, or any right to
receive income or proceeds from or in respect of any of the foregoing; provided
that Issuer may (i) transfer a Pledged Student Loan that is an FFELP Loan (or a
Private Loan that has the benefit of a Private Loan Guarantee Agreement) to a
Guarantor if such Guarantor has paid the Principal Balance plus accrued interest
thereof to Issuer and (ii) transfer any HEAL Loans that are Pledged Student
Loans to the HEAL Insurer if such HEAL Insurer has paid the portion of the
Principal Balance plus accrued interest thereof required to be paid under the
applicable Guarantee Agreement to Issuer and (iii) transfer any FFELP Loans that
are Pledged Student Loans for serialization or consolidation purposes so long as
Issuer shall have deposited to the Collection Account the Principal Balance
thereof, plus accrued and unpaid interest thereon.

         Extension or Amendment. Extend, terminate, waive, amend or otherwise
modify the terms of any Pledged Student Loan, Servicing Agreement, Guarantee
Agreement or the Demand Note (including any amendment or modification of a
Servicing Agreement that would reduce the frequency of deposits to the
Collection Account), except pursuant to Section 7.03(a).

         Change in Business. Make any change in the character of its business,
which change could reasonably be expected to impair the collectibility of any
Pledged Student Loan or otherwise materially adversely affect the interests or
remedies of the Agent, the Indenture Trustee or Lenders under this Agreement or
any other Transaction Document.

         Consolidation, Mergers, etc. Merge into, or consolidate with, one or
more corporations or other entities, or be a party to any transaction involving
the transfer of any substantial portion of its assets, revenues or properties to
or with any corporation or other Person, without the prior written consent of
the Agent and the Lenders.

         Use of Proceeds. Use the proceeds of any Advance for any purpose other
than acquiring or making Student Loans, funding the Reserve Account and paying
fees and expenses incurred in connection with the transactions contemplated by
this Agreement.

         Master Servicer Limitations. Permit any Pledged Student Loans to be
serviced by any Sub-Servicer (other than the Sub-Servicers servicing the Pledged
Student Loans on the date hereof) without first obtaining the written consent of
the Agent and the Lenders and demonstrating to the satisfaction of the Agent and
the Lenders that all requirements and conditions required by the Agent and the
Lenders applicable to such new Sub-Servicer have been satisfied in all material
respects for such Sub-Servicer, which satisfaction shall be evidenced by such
written consent, and delivering to the Agent an opinion addressed to the
Lenders, Issuer, the Indenture Trustee and the Agent in form and substance and
written by counsel acceptable to the Agent including, without limitation, an
opinion to the effect that each action necessary to perfect a first priority
security interest in each of the Pledged Student Loans being or to be serviced
by

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<PAGE>

such Sub-Servicer has been accomplished and that the perfection and priority of
the Indenture Trustee's security interest in the Collateral will not be affected
by the use of such Sub-Servicer, or if it will be affected, setting forth the
steps necessary to continue such perfection and priority, and completing such
steps to the satisfaction of the Agent at Issuer's expense.

         Guarantor Limitations. Permit any Pledged Student Loan (a) that is an
FFELP Loan to be guaranteed by any guaranty agency or entity other than (i) an
FFELP Guarantor or (ii) any other guaranty agency or entity specifically
approved as a Guarantor by the Agent and the Lenders in advance hereunder in
writing or (b) that is a Private Loan covered by a Private Loan Guarantee
Agreement to be guaranteed by any guaranty agency or entity other than a Private
Loan Guarantor.

         Payment Instructions. Change, nor permit the Originators, the Master
Servicer, or any Sub-Servicer, to change payment instructions to any Obligor
without the prior written consent of the Agent.

         ERISA. Establish or be a party to any plan, multiemployer plan or
benefit plan under ERISA.

         Issuer's Legal Status. Without providing at least 30 days prior written
notice to the Agent and satisfying all other requirements set forth in this
Agreement with respect to such action, change its name, place of business, chief
executive office, mailing address or organizational identification number or
change its type of organization, jurisdiction of organization or other legal
structure.

         Credit and Collection Policies. Permit or implement any material change
in the Credit and Collection Policy without the prior written consent of the
Agent and the Lenders other than such changes that are not within the discretion
of the Issuer or Master Servicer.

         Issuer's Ability to Conduct Business. (a) Guarantee any obligation of
any Person, including any Affiliate; (b) engage, directly or indirectly, in any
business other than the actions required or permitted to be performed under the
Transaction Documents; (c) incur, create or assume any Indebtedness not arising
under or expressly permitted by this Agreement or any other Transaction
Document; (d) make or permit to remain outstanding any loan or advance to, or
own or acquire any stock or securities of, any Person, except that the Company
may invest in those investments permitted under the Transaction Documents and
may make any advance required or expressly permitted to be made pursuant to any
provision of the Transaction Documents and permit the same to remain outstanding
in accordance with such provisions; (e) to the fullest extent permitted by law,
engage in any dissolution, liquidation, consolidation, merger, asset sale or
transfer of ownership interests other than such activities as are expressly
permitted under this Agreement; or (f) form, acquire or hold any subsidiary
(whether corporate, partnership, limited liability company or other).

                                  ARTICLE VIII

                              EVENTS OF TERMINATION

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<PAGE>

         SECTION 8.01.  Events of Termination. The following events shall be
"Events of Termination" hereunder:

         Issuer shall fail to make any payment or deposit of principal, interest
or fees owing to Lenders, Agent, Letter of Credit Provider, Indenture Trustee,
Eligible Lender Trustee, Securities Intermediary and Program Support Providers
as required hereunder or under any Transaction Document when due (other than any
payment or deposit that is made from Advances made pursuant to Section 1.01(c))
or Issuer shall fail to make any other payment or deposit owing to Lenders,
Agent, Letter of Credit Provider, Indenture Trustee, Eligible Lender Trustee,
Securities Intermediary and Program Support Providers as required hereunder or
under any Transaction Document when due and such failure shall continue
unremedied for three Business Days after the Issuer has knowledge or has
received notice thereof;

         Any representation or warranty (other than a representation and
warranty made pursuant to Section 6.0l(g) with respect to a Pledged Student Loan
as to which Issuer has complied with Section 6.02) made by Issuer (or any of its
officers) or any Affiliated Originator under or in connection with this
Agreement or any other Transaction Document to which it is a party or any other
information or report delivered pursuant hereto shall prove to have been false
or incorrect in any material respect when made and, to the extent such
representation or warranty is capable of being remedied, such representation or
warranty shall not have been remedied within ten (10) Business Days;

         Issuer shall fail to perform or observe (i) any term, covenant or
agreement contained in Sections 7.01(c), 7.01(j), 7.01(k), 7.01(l), 7.01(o),
7.02 or 7.04 or (ii) any other term, covenant or agreement contained in this
Agreement or any of the other Transaction Documents on its part to be performed
or observed, including any payment default under any Transaction Document other
than those payment defaults identified in Section 8.01(a) above if such failure
shall remain unremedied for the shorter of ten (10) Business Days or the cure
period provided for in any such Transaction Document or other payment defaults
involving amounts reasonably disputed by the Issuer;

         An Event of Bankruptcy shall have occurred with respect to Issuer, any
Affiliated Originator, the Master Servicer or, to Issuer's knowledge, any
Private Loan Guarantor, any Sub-Servicer or the Eligible Lender Trustee;

         (i) Any litigation (including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings not disclosed in writing by
Issuer to the Agent prior to the date of execution and delivery of this
Agreement is pending against Issuer or any of its Affiliates, or (ii) any
material development not so disclosed has occurred in any litigation (including,
without limitation, derivative actions), arbitration proceedings or governmental
proceedings so disclosed, which, in the case of clause (i) or (ii), in the
opinion of the Agent or the Lenders, has a reasonable likelihood of having a
Material Adverse Effect on the Issuer or any of its Affiliates;

         The Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Code with regard to any of the assets of Issuer or any of
its Affiliates and such lien shall not have been released within five Business
Days or the Pension Benefit Guaranty Corporation shall, or

                                       36

<PAGE>

shall indicate its intention to, file notice of a lien pursuant to Section 4068
of ERISA with regard to any of the assets of Issuer or any of its Affiliates and
such lien shall not have been released within five Business Days;

         The Indenture Trustee shall fail to have a valid, perfected first
priority Lien on the Collateral, for the benefit of the Secured Parties;

         A Servicer Event of Default shall have occurred with respect to the
Master Servicer or any Sub-Servicer, or any Servicing Agreement shall not be in
full force and effect for any reason, and in the case of any Sub-Servicer, such
Sub-Servicer shall not have been replaced within 30 days of such event with a
substitute acceptable to the Agent and the Lenders;

         The Coverage Condition is not satisfied with respect to any Settlement
Period and such condition continues for two (2) Business Days;

         The average Excess Spread for any consecutive three month period is
less than 0.50% or the Excess Spread for any month is less than 0.35%;

         The Default Ratio for any calendar month exceeds (i) an annualized rate
of 5% in the case of the Private Loan Default Ratio or (ii) the default ratio
that maintains the highest Guarantee Payment then authorized under the Higher
Education Act, in the case of the Federal Default Ratio;

         Any amendment to the Higher Education Act, the Public Health Service
Act or any other federal law becomes effective that reduces the rate of return
on Eligible Student Loans, reduces the guaranteed value of Eligible Student
Loans, imposes additional requirements on servicers of Eligible Student Loans or
in any other way adversely affects the interests of the Agent or the Lenders;

         The Master Servicer, any Sub-Servicer, any Guarantor or the Eligible
Lender Trustee fails to comply with all material requirements and regulations
under the Higher Education Act;

         The Issuer shall fail to maintain its status as a single purpose
bankruptcy remote limited liability company;

         The Issuer or any Affiliated Originator shall fail to pay, or shall
default in the payment of, any principal or premium or interest on any
Indebtedness beyond any applicable grace period, or the Issuer or any Affiliated
Originator shall breach or default with respect to any other term of any
evidence of any Indebtedness, or of any loan agreement, mortgage, indenture or
other agreement relating thereto, if such failure, breach or default continues
beyond any applicable grace period, if the effect of such failure, default or
breach (x) is to cause the holder or holders of that Indebtedness (or a trustee
on behalf of such holder or holders) to cause that Indebtedness to become or be
declared due prior to its stated maturity or (y) would permit the holder of such
Indebtedness to accelerate the maturity of such Indebtedness; provided, however,
that the occurrence of the foregoing events with respect to any Affiliated
Originator shall only constitute an Event of Termination if such events involve
Indebtedness in the aggregate in excess of $100,000;

                                       37

<PAGE>

         (i) One or more judgments for the payment of money shall be rendered
against the Issuer or (ii) one or more judgments for the payment of money in an
aggregate amount in excess of $100,000 shall be rendered against any Affiliated
Originator and the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively stayed or a
satisfactory bond against such judgment shall not have been posted, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Issuer or any Affiliated Originator to enforce any such judgment;

         A Material Adverse Change in the condition of the Issuer, any
Affiliated Originator, the Master Servicer or, to Issuer's knowledge, any
Private Loan Guarantor, any Sub-Servicer or the Eligible Lender Trustee has
occurred and is continuing;

         An Eligible Lender Trustee Event of Default shall have occurred or any
Eligible Lender Trust Agreement shall not be in full force and effect for any
reason;

         The Demand Note shall for any reason cease to be an absolute and
unconditional claim against Education Lending Services, Inc. held by the Issuer;
or Education Lending Services, Inc. or any Affiliate thereof (including any
trustee in bankruptcy) shall exercise any right of set-off against the
indebtedness evidenced by the Demand Note or any other Demand Note Collateral,
shall assert the invalidity or unenforceability of the Demand Note or any other
Demand Note Collateral or shall assert the invalidity or unenforceability of the
pledge to the Indenture Trustee for the benefit of the Secured Parties hereunder
of any Demand Note Collateral; or the Issuer shall fail to have a first priority
perfected security interest in the collateral pledged under the Demand Note; and

         The Net Consolidation Ratio for any monthly period is greater than 1.1,
the average Net Consolidation Ratio for any consecutive three month period is
greater than 1.09, or the average Net Consolidation Ratio for any consecutive
six month period is greater than 1.0.

         SECTION 8.02.  Remedies.

         Optional Acceleration. Upon the occurrence of an Event of Termination
(other than an Event of Termination described in subsection (d) of Section
8.01), the Agent may, or at the request of Required Lenders shall, declare that
the Termination Date has occurred and the unpaid principal amount of the Note to
be due and payable immediately, by a notice in writing to Issuer, and upon any
such declaration, the Termination Date shall occur and such principal amount
shall be immediately due and payable, together with all accrued and unpaid
interest thereon, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Issuer.

         Automatic Acceleration. Upon the occurrence of an Event of Termination
described in subsection (d) of Section 8.01, with respect to the Issuer the
Termination Date shall occur automatically and the unpaid principal amount of
the Note shall automatically become due and payable, together with all accrued
and unpaid interest thereon, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by Issuer.

         Master Servicer Replacement. Upon the occurrence of an Event of
Termination, the Agent or the Lenders shall have the right to replace the Master
Servicer.

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<PAGE>

         Additional Remedies. Upon any acceleration of the Note pursuant to this
Section 8.02, no Borrowings thereafter will be made, and the Agent, the Lenders,
and the Indenture Trustee shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of each applicable jurisdiction and other applicable laws
to a secured party, which rights shall be cumulative, including, without
limitation, the right to foreclose upon the Collateral and sell all or any
portion thereof at public or private sale (and Issuer agrees that, to the extent
that notice of such sale is required, notice 10 days prior to such sale shall be
adequate and reasonable notice for all purposes); provided however that if the
acceleration of the Note results solely from the failure of one or more
Committed Lenders to extend the Facility Termination Date pursuant to Section
1.07 and no additional Event of Termination has occurred and is continuing, the
Agent shall refrain from selling all or any portion of the Collateral or
replacing the Master Servicer until on or after the date which is 90 days after
the Facility Termination Date.

         Portfolio Valuation. Upon the occurrence of any Event of Termination,
or at any time after five Business Days prior notice to the Issuer, the Agent
may at its discretion (and shall at the request of the Lenders) perform a
Portfolio Valuation on some or all of the Student Loans constituting a portion
of the Collateral.

         Setoff; Sharing of Payments. Regardless of the other means of obtaining
payment of any of the obligations of the Issuer or the Master Servicer hereunder
or under any other Transaction Document, each of the Agent, the Indenture
Trustee, the Lenders and any Program Support Provider is hereby authorized at
any time and from time to time, without notice to the Issuer or the Master
Servicer (any such notice being expressly waived by the Issuer and the Master
Servicer) and to the fullest extent permitted by law, to set off and apply such
deposits and other sums against the obligations of the Issuer or the Master
Servicer, as applicable, under this Agreement and the other Transaction
Documents, whether or not the Agent, the Indenture Trustee, the Lenders or
Program Support Provider shall have made any demand under this Agreement or the
other Transaction Documents and although such obligations may be contingent or
unmatured. Except as may be otherwise provided herein, the Lenders, the Agent
and the Program Support Providers agree that all setoffs and other recoveries
from the Issuer or the Master Servicer shall be shared ratably amongst the
Lenders, the Agent and the Program Support Providers.

         Demand Note. The Agent and the Indenture Trustee agree that they shall
only exercise their right to demand payment under the Demand Note on or after
the occurrence of and during the continuance of an Event of Termination. Upon
the occurrence of and during the continuance of an Event of Termination, the
Agent may, and at the request of the Required Lenders shall, direct the
Indenture Trustee to demand payment under the Demand Note and exercise remedies
available under the Demand Note. All rights of the Indenture Trustee and the
Agent in the Demand Note shall terminate upon the payment in full of all of
Issuer's obligations hereunder and under the other Transaction Documents and
promptly thereafter either the Indenture Trustee or the Agent, whichever party
is in possession of the Demand Note, shall return the Demand Note to the Issuer.

                                       39

<PAGE>

                                   ARTICLE IX

                          THE AGENT; INDENTURE TRUSTEE

         SECTION 9.01.  Authorization and Action. The Lenders have appointed and
authorized the Agent (or its designees) to take such action as agent on their
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The provisions of this Article IX are solely for the benefit
of the Agent and the Lenders. The Issuer shall not have any rights as a
third-party beneficiary or otherwise under any of the provisions hereof.

         SECTION 9.02.  Agent's Reliance, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by it or them under or in connection with the Transaction
Documents except for its or their own gross negligence, bad faith or willful
misconduct. Without limiting the generality of the foregoing, the Agent: (a) may
consult with legal counsel (including counsel for Issuer or any Affiliate of
Issuer), independent certified public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (b) makes no warranty or representation to the Lenders or any other
holder of any interest in the Collateral and shall not be responsible to the
Lenders or any such other holder for any statements, warranties or
representations made in or in connection with any Transaction Document; (c)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any Transaction
Document on the part of Issuer or the Master Servicer or to inspect the property
(including the books and records) of Issuer or the Master Servicer; (d) shall
not be responsible to the Lenders or any other holder of any interest in the
Collateral for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document; and (e) shall
incur no liability under or in respect of this Agreement by acting upon any
notice (including notice by telephone), consent, certificate or other instrument
or writing (which may be by facsimile or telex) believed by it to be genuine and
signed or sent by the proper party or parties.

         SECTION 9.03.  Agent and Affiliates. With respect to any Advance made
by the Agent, the Agent shall have the same rights and powers under this
Agreement as would a Lender if it had made such Advance (or portion thereof) and
may exercise the same as though such Person were not the Agent hereunder. The
Agent and any of its Affiliates may generally engage in any kind of business
with Issuer, the Master Servicer, any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of Issuer,
the Master Servicer, any Obligor or any of their respective Affiliates, all as
if Agent was not serving in such capacity and without any duty to account
therefor to the Lenders or any other holder of an interest in the Collateral.

         SECTION  9.04. Lender's Purchase Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent, any Affiliate of
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own evaluation and decision to enter into this
Agreement and, if it so determines, to make Advances hereunder. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent,
any Affiliate of the Agent or any other Lender, and based on such

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<PAGE>

documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agreement.

         SECTION 9.05.  Delegation of Duties. The Agent may delegate each or any
of its duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.

         SECTION 9.06.  Successor Agent. The Agent may, upon thirty (30) days'
notice to Issuer, each Lender and each other party hereto, resign as Agent. If
the Agent shall resign, then, the Lenders during such thirty-day period shall
appoint a successor agent, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent and references herein to the Agent shall
mean such successor agent, effective upon its appointment; and such former
Agent's rights, powers and duties in such capacity shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. If no such successor agent is appointed within such
thirty-day period, the Agent may petition a court of competent jurisdiction to
appoint a successor Agent. After any retiring Agent's resignation hereunder as
such agent, the provisions of this Article IX, Article XI and Section 13.05
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.

         SECTION 9.07.  Acceptance of the Trusts. Each Lender hereby appoints
Fifth Third Bank, as Indenture Trustee hereunder. The Indenture Trustee accepts
and agrees to execute the trusts granted to it by this Agreement, but only upon
the terms and conditions set forth herein. The Indenture Trustee, prior to the
occurrence of an Event of Termination and after the curing of all Events of
Termination which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement and no implied
covenants or obligations shall be read into this Agreement against the Indenture
Trustee.

         In case an Event of Termination has occurred of which the Indenture
Trustee has, or is deemed to have, notice in accordance with this Agreement and
has not been cured, the Indenture Trustee agrees to act in accordance with the
instructions and orders of the Agent, but in any such event, only upon and
subject to the following expressed terms and conditions:

         The Indenture Trustee may execute any of the trusts or powers hereof
and perform any of its duties by or through attorneys, agents, receivers,
employees or co-trustees but shall be answerable for the conduct of the same in
accordance with the standard specified above, except as otherwise provided
herein and except for the acts and omissions of agents of Persons other than the
Indenture Trustee chosen by Issuer and approved by the Agent and shall be
entitled to advice of counsel concerning all matters of trusts hereof and the
duties hereunder, and may in all cases pay such reasonable compensation to all
such attorneys, agents, receivers, and employees as may reasonably be employed
in connection with the trusts hereof. The Indenture Trustee may act upon the
opinion or advice of an attorney or accountant selected by it in the exercise of
reasonable care. The Indenture Trustee shall not be responsible for any loss or
damage resulting from any action or nonaction of such Person which is in good
faith and in reliance upon such opinion or advice. The Indenture Trustee shall
not be responsible for any action or inaction of

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<PAGE>

the Master Servicer, any Sub-Servicer or any party hereto except as provided
herein or under applicable laws, rules and regulations.

         The Indenture Trustee shall not be responsible for any recital herein,
or in the Note, or for the validity of the execution by Issuer of this
Agreement, or of any supplemental indentures or instruments of further
assurance, or for the sufficiency of the security for the Note issued hereunder
or intended to be secured hereby, or for the value or title of the property
herein conveyed or otherwise as to the maintenance of the security hereof.

         The Indenture Trustee shall not be accountable for the use or
application by Issuer of the Note or the proceeds thereof or for the use or
application of any money paid over by the Indenture Trustee in accordance with
the provisions of this Agreement or for the use and application of other money
received by the Indenture Trustee.

         The Indenture Trustee shall be protected in acting upon any notice,
requisition, request, consent, certificate, order, opinion, affidavit, letter,
telegram or other paper or document reasonably believed to be genuine and
correct and to have been signed or sent by the proper Person or Persons. Any
action taken by the Indenture Trustee pursuant to this Agreement upon the
request or authority or consent of any Person who at the time of making such
request or giving such authority or consent is the owner of the Note shall be
conclusive and binding upon all future owners of the Note and upon any Notes
issued in exchange therefor or in place thereof.

         Except as otherwise expressly provided in this Agreement, as to the
existence or nonexistence of any fact or as to the sufficiency or validity of
any instrument, paper or proceeding, the Indenture Trustee shall be entitled to
rely upon a certificate of the Agent as sufficient evidence of facts therein
contained, and prior to the occurrence of a default of which the Indenture
Trustee has been notified as provided in subsection (g) of this Section, or of
which by said subsection it is deemed to have notice, shall also be at liberty
to accept a dealing, transaction or action as necessary or expedient, but may at
its discretion secure such further evidence deemed necessary or advisable, but
shall in no case be bound to secure the same.

         The permissive right of the Indenture Trustee to do things enumerated
in this Agreement shall not be construed as a duty and the Indenture Trustee
shall not be answerable for other than its negligence or willful misconduct;
provided, however, that the Indenture Trustee shall not be liable for any error
of judgment made in good faith, unless it shall be proved that such Person was
negligent in ascertaining the pertinent facts.

         The Indenture Trustee shall not be required to take notice or be deemed
to have notice of any Event of Termination or other default hereunder except
failure by Issuer to cause to be made any of the payments to it for the account
of the Lenders required to be made by Article III, or Events of Termination
under clause (a) of Section 8.01, unless the Indenture Trustee shall be
specifically notified in writing of such default by Issuer, the Lenders or the
Agent.

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

         No provision of this Agreement shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties

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<PAGE>

hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

         If any Event of Termination under this Agreement shall have occurred
and be continuing, the Indenture Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and shall use the same degree of care as
a prudent person would exercise or use in the circumstances in the conduct of
his or her own affairs.

         All moneys received by the Indenture Trustee shall, until used or
applied or invested as herein provided, be held in trust for the purposes for
which they were received in the Collection Account.

         The Indenture Trustee shall file Uniform Commercial Code continuation
statements to the Uniform Commercial Code financing statements in favor of the
Indenture Trustee originally filed at the delivery of this Agreement prior to
every fifth year.

         Whether or not herein expressly so provided, every provision of this
Agreement 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 9.07.

         SECTION 9.08.  Fees, Charges and Expenses of Indenture Trustee. The
Indenture Trustee shall be entitled to payment of the Indenture Trustee's Fees
for its services rendered hereunder and to payment of, or reimbursement for, all
advances, reasonable counsel fees and expenses and other out-of-pocket expenses
reasonably and necessarily made or incurred by the Indenture Trustee, in
connection with such services and waives any lien on the Collateral with respect
to accrued and unpaid fees and reasonable expenses, including any
indemnification pursuant to Section 9.18, other than any such lien arising
pursuant to the Transaction Documents.

         SECTION 9.09.  Notice to Lenders if Event of Termination Occurs. If an
Event of Termination occurs of which the Indenture Trustee is by Section 9.07(g)
required to take notice or if notice of default be given as provided in said
Section 9.07(g), then the Indenture Trustee shall give written notice thereof by
registered or certified mail to Issuer, the Lenders and the Agent.

         SECTION 9.10.  Intervention by Indenture Trustee. To the extent
permitted by applicable law, in any judicial proceeding to which Issuer is a
party, the Indenture Trustee shall intervene if directed to do so in writing by
the Agent.

         SECTION 9.11.  Successors. Any corporation or association into which
the Indenture Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, sale, merger, consolidation or
transfer to which it is a party, ipso facto, shall be and become successor
Indenture Trustee hereunder and vested with all of the title to the whole
property or trust estate and all the trusts, powers, discretions, immunities,
privileges and all other matters as was its predecessor, without the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.

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<PAGE>

         SECTION 9.12.  Resignation. The Indenture Trustee may at any time
resign from the trusts hereby created by giving 90 days' written notice to
Issuer and the Agent, and such resignation shall take effect at the end of such
90 days, or upon the earlier appointment and acceptance of a successor Indenture
Trustee, as provided in Section 9.14, hereof, or removal as provided in Section
9.13 hereof. Notwithstanding the foregoing, resignation of the Indenture Trustee
shall not be effective until a successor or temporary Indenture Trustee is
appointed and has accepted such appointment; provided, however, if an instrument
of acceptance shall not have been delivered within 120 days after giving such
notice of resignation, the resigning Indenture Trustee may petition a court of
competent jurisdiction for the appointment of a successor, and any attorneys'
fees and expenses incurred in connection with such petition shall be payable by
Issuer, unless such failure is due to the gross negligence, bad faith or willful
misconduct of the Agent in not exercising its rights under Section 9.14, in
which event such fees and expenses shall be paid by the Agent.

         SECTION 9.13.  Removal. The Indenture Trustee may be removed by the
Agent at any time, by an instrument in writing delivered to the Indenture
Trustee. Notwithstanding the foregoing, removal of the Indenture Trustee shall
not be effective until a successor is appointed and has accepted such
appointment.

         SECTION 9.14.  Appointment of Successor. In case the Indenture Trustee
shall resign or be removed, or be dissolved, or shall be in course of
dissolution or liquidation, or otherwise become incapable of acting hereunder,
or in case it shall be taken under the control of any public officer or
officers, or of a receiver appointed by a court, a successor may be appointed by
the Agent with the consent of Issuer (which consent shall not be unreasonably
withheld) by an instrument in writing signed by the Agent. If in a proper case
no appointment of a successor Indenture Trustee shall be made pursuant to the
foregoing provisions of this Section 9.14 within 15 days after the Indenture
Trustee shall have given written notice as provided in Section 9.12 hereof, the
Indenture Trustee, Issuer, the Agent or the Lenders may apply to a court of
jurisdiction to appoint a successor Indenture Trustee. Said court may thereupon,
after such notice, if any, as such court may deem proper and prescribe, appoint
a successor Indenture Trustee. Each such successor Indenture Trustee shall agree
in writing to be bound by the provisions of Section 13.06.

         SECTION 9.15.  Concerning Any Successor. Every successor Indenture
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and also to Issuer and the Agent an instrument in writing accepting
such appointment hereunder, and thereupon such successor, without any further
act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessor;
but such predecessor shall, nevertheless, upon receipt of a request from the
Agent execute and deliver an instrument transferring to such successor all the
estates, properties, rights, powers and trusts of such predecessor hereunder;
and every predecessor shall deliver all securities and moneys held by it as
Indenture Trustee hereunder to its successor.

         SECTION 9.16.  Appointment of Co-Trustee. It is the purpose of this
Agreement that there shall be no violation of any law of any jurisdiction
denying or restricting the right of banking corporations or associations to
transact business as the Indenture Trustee in such jurisdiction. It is
recognized that in case of litigation under this Agreement or any other

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<PAGE>

Transaction Document or any Student Loan or related agreement, and in particular
in case of the enforcement thereof on default, or in case of a conflict of
interest, or in case the Indenture Trustee deems that by reason of any present
or future law of any jurisdiction it may not exercise any of the powers, rights
or remedies herein granted to the Indenture Trustee or hold title to the
properties, in trust, as herein granted, or take any other action which may be
desirable or necessary in connection therewith, it may be necessary that the
Indenture Trustee appoint an additional institution, which must be a commercial
bank with trust powers, as a separate or co-trustee. The following provisions of
this Section 9.16 are intended to accomplish these ends. In the event that the
Indenture Trustee appoints an additional individual or institution as a separate
or co-trustee, each and every remedy, power, right, claim, demand, cause of
action, immunity, estate, title, interest and lien expressed or intended by this
Agreement to be exercised by or vested in or conveyed to the Indenture Trustee
with respect thereto shall be exercisable by and vest in such separate or
co-trustee but only to the extent necessary to enable such separate or
co-trustee to exercise such powers, rights and remedies, and every covenant and
obligation necessary to the exercise thereof by such separate or co-trustee
shall run to and be enforceable by either of them.

         Should any instrument in writing from Issuer be required by the
separate or co-trustee so appointed by the Indenture Trustee for more fully and
certainly vesting in and confirming to him, her or it such properties, rights,
powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by Issuer. In case
any separate or co-trustee, or a successor to either, shall die, become
incapable of acting, resign or be removed, all the estates, properties, rights,
powers, trusts, duties and obligations of such separate or co-trustee, so far as
permitted by law, shall vest in and be exercised by the Indenture Trustee until
the appointment of a new Indenture Trustee or a successor to such separate or
co-trustee.

         SECTION 9.17.  Successor Indenture Trustee as Trustee of Funds. In the
event of a change of the Indenture Trustee the predecessor which has resigned or
been removed shall cease to be trustee of any funds then held by it hereunder
and the successor Indenture Trustee shall become such trustee.

         SECTION 9.18.  Indemnification.

         The Indenture Trustee shall not be under any obligation or duty to
perform any act at the request of the Agent or Issuer or to institute or defend
any suit in respect hereof or to exercise any remedy hereunder unless properly
indemnified to its satisfaction subject to Section 9.07(i) hereof. The Indenture
Trustee shall not be required to take notice, or be deemed to have knowledge, of
any default of Issuer, except as provided in Section 9.07(g).

         Issuer agrees to indemnify the Indenture Trustee for, and to hold it
harmless against, any loss, liability or expense, including attorneys' fees,
incurred without gross negligence, bad faith or willful misconduct on its part
or on the part of the Lenders or Agent, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except as a result of gross

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<PAGE>

negligence, bad faith or willful misconduct on its part or on the part of the
Lenders or Agent and except any liability to the Department on account of the
Indenture Trustee's status as such.

                                   ARTICLE X

                         ASSIGNMENT OF LENDER'S INTEREST

         SECTION 10.01.  Restrictions on Assignments.

         This Agreement and each Lender's rights and obligations herein
(including ownership of the Note) shall be assignable, in whole or in part, by
such Lender and its successors and assigns with the prior written consent of
Issuer; provided, however, that such consent shall not be unreasonably withheld
and such consent shall not be required if an Event of Termination shall have
occurred and be continuing; and provided, further, that no such consent shall be
required if the assignment is made by any Committed Lender to CNAI or any
Committed Lender, any Affiliate of CNAI or any Committed Lender (other than a
director or officer of CNAI or such Committed Lender), any Program Support
Provider or any Person which is (i) in the business of issuing commercial paper
notes and (ii) associated with or administered by CNAI or any Affiliate of CNAI
or by any Conduit Lender to any other commercial paper conduit which is
administered by CNAI. Each assignor may, in connection with the assignment,
disclose to the applicable assignee any information relating to Issuer or the
Collateral furnished to such assignor by or on behalf of the Lenders, Issuer or
the Agent.

         Each Lender may at any time grant to any Program Support Provider
participating interests in the Advances. In the event of any such grant by such
Lender of a participating interest to a Program Support Provider, except as set
forth in paragraph (f) below, such Lender shall remain solely responsible for
the performance of its obligations hereunder. Issuer agrees that each Program
Support Provider shall be entitled to the benefits of Sections 4.02 and 4.03.

         This Agreement and the rights and obligations of the Agent hereunder
shall be assignable, in whole or in part, by the Agent and its successors and
assigns with the consent of Issuer, which consent shall not be unreasonably
withheld; provided that, if (i) such assignment is to an Affiliate of CNAI, (ii)
it becomes unlawful for CNAI to serve as the Agent or (iii) an Event of
Termination exists, no such consent of Issuer shall be necessary.

         Issuer may not assign its rights or delegate its obligations hereunder
or any interest herein without the prior written consent of the Agent and the
Lenders.

         Without limiting any other rights that may be available under
applicable law, the rights of the Lenders may be enforced through them or by
their agents.

         In the event that the Advances have been assigned in their entirety
pursuant to one or more Program Support Agreements, and the Agent requests that
Issuer acknowledge the assignment of the Advances to the Program Support
Providers parties to such Program Support Agreements (or an agent on their
behalf). Issuer agrees (i) to enter into such amendments to this Agreement and
the other Transaction Documents as the Agent or the Lenders may reasonably
request in order to reflect the substitution of such Program Support Providers,
or an agent

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<PAGE>

therefor, as the Lenders and the release of the Lenders of all further
obligations hereunder, (ii) to authorize and deliver Uniform Commercial Code
financing statements, or amendments thereto or assignments thereof, to reflect
such assignment and substitution and (iii) to take such other actions as the
Agent or the Lenders shall reasonably request in connection with such
assignment, release and substitution.

         Any Conduit Lender may, without consent of the Issuer, sell
participations to one or more banks or other entities (each, a "Participant") in
all or a portion of its rights and obligations hereunder (including the
outstanding Advances); provided that following the sale of a participation under
this Agreement (i) the obligations of such Conduit Lender shall remain
unchanged, (ii) such Conduit Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Issuer, the
Agent, the other Lenders and the Master Servicer shall continue to deal solely
and directly with such Conduit Lender in connection with such Conduit Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which such Conduit Lender sells such a participation shall provide
that the Participant shall not have any right to direct the enforcement of this
Agreement or the other Transaction Documents or to approve any amendment,
modification or waiver of any provision of this Agreement or the other
Transaction Documents; provided that such agreement or instrument may provide
that such Conduit Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that (i) reduces the amount of
principal or interest that is payable on account of any Advance or delays any
scheduled date for payment thereof or (ii) reduces any fees payable by the
Issuer to the Agent (to the extent relating to payments to the Participant) or
delays any scheduled date for payment of such fees. The Issuer acknowledges and
agrees that the Conduit Lenders' sources of funds may derive in part from their
Participants. Accordingly, references in Sections 4.01, 4.02, 4.03, 13.05 and
the other terms and provisions of this Agreement and the other Transaction
Documents to determinations, reserve and capital adequacy requirements,
expenses, increased costs, reduced receipts and the like as they pertain to the
Conduit Lenders shall be deemed also to include those of their Participants.

         SECTION 10.02.  Rights of Assignee. Upon the assignment by a Lender in
accordance with this Article X, the assignee receiving such assignment shall
have all of the rights of such Lender with respect to the Transaction Documents
and the Collateral (or such portion thereof as has been assigned).

         SECTION 10.03.  Evidence of Assignment. Any assignment of the
Commitment and the Note (or any portion thereof) to any Person may be evidenced
by such instrument(s) or document(s) as may be satisfactory to the assigning
Lender, the Agent and the assignee.

                                   ARTICLE XI

                                 INDEMNIFICATION

         SECTION 11.01.  Indemnities.

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<PAGE>

         General Indemnity. Without limiting any other rights that any such
Person may have hereunder or under applicable law (including, without
limitation, the right to recover damages for breach of contract), Issuer hereby
agrees to indemnify each of the Agent, the Lenders, the Program Support
Providers, the Indenture Trustee, the Eligible Lender Trustee, the Master
Servicer (if not an Affiliated Originator or an Affiliate of any Affiliated
Originator), each of their respective Affiliates, and all successors,
transferees, participants and assigns and all officers, directors, employees and
agents of any of the foregoing (each an "Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including attorneys' fees and disbursements (all of
the foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or relating to the Transaction
Documents or the funding of the Advances or in respect of any Pledged Student
Loan, excluding, however, (a) Indemnified Amounts to the extent determined by a
court of competent jurisdiction to have resulted from gross negligence or
willful misconduct on the part of such Indemnified Party or (b) recourse for
Defaulted Pledged Student Loans (except as specifically provided herein).
Without limiting the foregoing, Issuer shall indemnify each Indemnified Party
for Indemnified Amounts arising out of or relating to:

               (i)   the adjustment or any non-cash reduction in the outstanding
         Principal Balance of any Pledged Student Loan that is not made pursuant
         to a Reduced Rate Program;

               (ii)  the transfer by Issuer of any interest in the Collateral
         other than the grant of a security interest granted to the Indenture
         Trustee, for the benefit of Lenders, pursuant to Section 1.03;

               (iii) any representation or warranty made by Issuer (or any of
         its officers or Affiliates) under or in connection with any Transaction
         Document or any other information or report delivered by or on behalf
         of Issuer pursuant hereto, which shall have been false, incorrect or
         misleading in any respect when made;

               (iv)  the failure by Issuer to comply with any applicable law,
         rule or regulation with respect to any Pledged Student Loan, including,
         with respect to any FFELP Loan or HEAL Loan that is a Pledged Student
         Loan, the Higher Education Act or the Public Health Service Act,
         respectively, or the nonconformity of any Pledged Student Loan with any
         such applicable law, rule or regulation, including, with respect to any
         FFELP Loan or HEAL Loan that is a Pledged Student Loan, the Higher
         Education Act or the Public Health Service Act, respectively;

               (v)   the failure to vest and maintain vested in the Indenture
         Trustee, for the benefit of the Secured Parties, a first priority
         perfected security interest, in the Collateral, free and clear of any
         Lien, other than a Lien arising solely as a result of an act of the
         Lenders or the Agent, whether existing at the time of any Borrowing or
         at any time thereafter;

               (vi)  the failure to file, or any delay in filing, financing
         statements or other similar instruments or documents under the UCC of
         any applicable jurisdiction or other

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<PAGE>

         applicable laws with respect to any item of the Collateral, whether at
         the time of any Borrowing or at any time thereafter;

               (vii)  any dispute, claim, offset or defense (other than
         discharge in bankruptcy) of the Obligor to the payment of any Student
         Loan or Guarantee Agreement in, or purporting to be in, the Collateral
         (including, without limitation, a defense based on such Student Loan or
         Guarantee Agreement not being a legal, valid and binding obligation of
         such Obligor enforceable against it in accordance with its terms);

               (viii) any Regulatory Change after the date of this Agreement
         that results in any tax or governmental fee or charge (but not
         including taxes upon or measured by net income or gross revenues), all
         interest and penalties thereon or with respect thereto, and all
         out-of-pocket costs and expenses, including the reasonable fees and
         expenses of counsel in defending against the same, which may arise by
         reason of the Advances, or any interest in the item of the Collateral
         or in any goods which secure any item of the Collateral;

               (ix)   the failure by the Issuer to comply with any term,
         provision or covenant contained in any Transaction Document to which it
         is party;

               (x)    any Lien attaching to any Student Loan or any Related
         Security or Collections with respect thereto, whether existing at the
         time that such Student Loan initially arose or at any time thereafter;

               (xi)   any claim or action arising out of or in connection with
         the origination or servicing of any Student Loan or any other services
         which gave rise to any Student Loan to the extent such origination,
         servicing or services were provided by the Issuer or an Affiliate of
         the Issuer or, if such origination, servicing or services were provided
         by a Person not the Issuer or an Affiliate of the Issuer, to the extent
         the Issuer is entitled to recover such Indemnified Amounts from such
         non-Affiliate or another Person;

               (xii)  the failure to pay when due any taxes and fees payable by
         the Issuer or any Originator in connection with the Collateral or the
         execution, delivery, filing and recording of this Agreement or the
         other agreements and documents to be delivered hereunder (including any
         UCC financing statements);

               (xiii) the payment by such Indemnified Party of taxes, including,
         without limitation, any taxes imposed by any jurisdiction on amounts
         payable and any liability (including penalties, interest and expenses)
         arising therefrom or with respect thereto, to the extent caused by the
         Issuer's actions or failure to act in breach of this Agreement;

               (xiv)  the commingling of Collections with any other funds of the
         Issuer or any Affiliate of the Issuer;

               (xv)   any failure by the Issuer to give reasonably equivalent
         value to any Originator in consideration for the transfer by such
         Originator to the Issuer of any Student Loans, or any attempt by any
         Person to void any such transfer under any statutory

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<PAGE>

         provision or common law or equitable action, including, without
         limitation, any provision of the Bankruptcy Code;

               (xvi)   the failure of any Sub-Servicer to remit any Collections
         pursuant to the instructions of the Agent or the Indenture Trustee
         given in accordance with this Agreement, whether by reason of the
         exercise of setoff rights or otherwise;

               (xvii)  any investigation, litigation or proceeding related to
         this Agreement or the use of proceeds of purchases made pursuant to
         this Agreement or any other Transaction Document delivered hereunder or
         in respect of any of the Student Loans related hereto;

               (xviii) any claim brought by any Person arising from any activity
         by the Issuer or an Affiliate of the Issuer in servicing, administering
         or collecting any Student Loan; or

               (xix)   the sale or pledge by the Issuer or any Originator of any
         Student Loan in violation of any applicable law, rule or regulation.

The exclusion in clause (b) of the first sentence of this Section 11.01 shall
not apply to any Indemnified Amounts described in clauses (i) through (xix)
above. Any amounts subject to the indemnification provisions of this Section
11.01 shall be paid by the Issuer to the related Indemnified Party within thirty
(30) Business Days following demand therefor accompanied by reasonable
supporting documentation with respect to such amounts.

         Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from Issuer under Section
11.01(a)(viii), such Indemnified Party shall give prompt and timely notice of
such attempt to Issuer. Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the payment of any of the aforesaid
taxes and the receipt of the indemnity provided hereunder or of any refund of
any such tax previously indemnified hereunder, including the effect of such tax
or refund on the amount of tax measured by net income or profits which is or was
payable by the Indemnified Party.

                                  ARTICLE XII

                       SERVICING OF PLEDGED STUDENT LOANS

         SECTION 12.01.  Duties of Master Servicer. The Master Servicer, for the
benefit of Issuer and the Lenders (to the extent provided herein), shall appoint
one or more Sub-Servicers approved by the Agent and the Lenders to manage,
service, administer and make collections on the Pledged Student Loans with
reasonable care, using that degree of skill and attention that the Master
Servicer (or such Sub-Servicer) exercises with respect to all comparable student
loans that it services but in any event, in accordance with customary and usual
standards of practice of prudent lenders and loan servicers administering
similar student loans. Without limiting the generality of the foregoing or of
any other provision set forth in this Agreement and notwithstanding any other
provision to the contrary set forth herein, the Master Servicer shall cause the
applicable Sub-Servicer to manage, service, administer and make collections with

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respect to the Pledged Student Loans (other than collection of any Interest
Subsidy Payments, Special Allowance Payments and Insurance Payments, which the
Agent or the Eligible Lender Trustee will perform) in accordance with, and
otherwise comply with, all applicable federal and state laws, including all
applicable standards, guidelines and requirements of the Higher Education Act,
the Public Health Service Act and any Guarantee Agreement, the failure to comply
with which would adversely affect the eligibility of one or more of the Pledged
Student Loans for federal reinsurance or Interest Subsidy Payments, Special
Allowance Payments or Insurance Payments or one or more of the Pledged Student
Loans for receipt of Guarantee Payments or would have an adverse effect on the
Lenders or any other Secured Party.

         The Master Servicer's duties (and the duties of the applicable
Sub-Servicers on behalf of the Master Servicer) shall include collection and
posting of all payments, responding to inquiries of borrowers on such Pledged
Student Loans, monitoring borrowers' status, making required disclosures to
borrowers, investigating delinquencies, sending payment coupons or billing
notices to borrowers and otherwise establishing repayment terms, reporting tax
information to borrowers, if applicable, accounting for collections and
furnishing monthly and quarterly statements with respect thereto to the Agent.
Unless otherwise expressly provided herein, the Master Servicer shall cause the
applicable Sub-Servicer to follow its customary standards, policies and
procedures in performing its duties as Sub-Servicer. Without limiting the
generality of the foregoing, the Master Servicer is authorized and empowered to
execute and deliver (and may cause the applicable Sub-Servicer to execute and
deliver), on behalf of itself, Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Lenders or any of them, instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Pledged Student Loans; provided, however, that
the Master Servicer agrees that it will not (nor will it permit a Sub-Servicer
to) (a) permit any rescission or cancellation of a Pledged Student Loan except
as ordered by a court of competent jurisdiction or governmental authority or as
otherwise consented to in writing by the Eligible Lender Trustee, the Agent and
the Indenture Trustee or (b) reschedule, revise, defer or otherwise compromise
with respect to payments due on any Pledged Student Loan except pursuant to any
applicable deferral or forbearance periods or otherwise in accordance with all
applicable standards, guidelines and requirements of the Higher Education Act or
any Guarantee Agreement; provided further, however, that the Master Servicer
shall not agree (nor shall it permit any Sub-Servicer to agree) to any decrease
of the interest rate on, or the principal amount payable with respect to, any
Pledged Student Loan except in accordance with the applicable standards,
guidelines and requirements of the Higher Education Act or any Guarantee
Agreement or a Reduced Rate Program. Notwithstanding any of the foregoing, the
Master Servicer shall be permitted to reschedule, revise, defer or otherwise
compromise payments or take other reasonable actions with respect to Private
Loans that are Defaulted Student Loans in connection with maximizing the
recovery on such Private Loans.

         The Eligible Lender Trustee on behalf of Issuer hereby grants a power
of attorney and all necessary authorization to the Master Servicer to (or to
cause the applicable Sub-Servicer to) maintain any and all collection procedures
with respect to the Pledged Student Loans it services (or sub-services),
including filing, pursuing and recovering claims against the Guarantors for
Guarantee Payments and taking any steps to enforce such Pledged Student Loan
such as commencing a legal proceeding to enforce a Pledged Student Loan in the
name of Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Lenders
and the Secured Parties. The Eligible

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<PAGE>

Lender Trustee or the Indenture Trustee shall upon the written request of the
Master Servicer or the Agent furnish the Master Servicer or the Agent (or at
written the direction of the Master Servicer or the Agent, the related
Sub-Servicer) with any other powers of attorney and other documents reasonably
necessary or appropriate to enable the Master Servicer or the Agent (or related
Sub-Servicer) to carry out their servicing and administrative duties hereunder
(or under the related sub-servicing agreement).

         SECTION 12.02.  Collection of Pledged Student Loan Payments.

         The Master Servicer shall (and shall cause the applicable Sub-Servicers
to) make reasonable efforts (including all efforts that may be specified under
the Higher Education Act or any Guarantee Agreement) to collect all payments
called for under the terms and provisions of the Pledged Student Loans as and
when the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable student loans that it services. With the
written consent of the Agent, the Master Servicer (or at the direction of the
Master Servicer, the related Sub-Servicer) may in its discretion waive any
charge or any other fee that may be collected in the ordinary course of
servicing a Pledged Student Loan. The Master Servicer shall (and shall cause the
applicable Sub-Servicers to) remit all collections relating to the Pledged
Student Loans to the Collection Account for deposit therein no later than the
close of business on the second Business Day after receipt thereof; provided,
however, that any Sub-Servicer may remit such collections to the Collection
Account, as applicable, less frequently (but no less frequently than three times
per month and at least once every fifteen days).

         The Master Servicer shall (and shall cause the applicable Sub-Servicer
to) make reasonable efforts to claim, pursue and collect all Guarantee Payments
from the Guarantors pursuant to the Guarantee Agreements with respect to any of
the Pledged Student Loans as and when the same shall become due and payable,
shall comply with all applicable laws and agreements with respect to claiming,
pursuing and collecting such payments and shall follow such practices and
procedures as it follows with respect to all comparable guarantee agreements and
student loans that it services. In connection therewith, the Master Servicer is
hereby authorized and empowered (or at the direction of the Master Servicer, the
related Sub-Servicer is authorized and empowered) to convey to any Guarantor the
Student Loan Note and the related loan documents representing any Pledged
Student Loan in connection with submitting a claim to such Guarantor for a
Guarantee Payment in accordance with the terms of the applicable Guarantee
Agreement.

         SECTION 12.03.  Realization upon Pledged Student Loans. For the benefit
of Issuer, the Lenders and the Secured Parties, the Master Servicer shall (and
shall cause the applicable Sub-Servicer to) use reasonable efforts consistent
with its customary servicing practices and procedures and including all efforts
that may be specified under the Higher Education Act or any applicable Guarantee
Agreement in its servicing (or sub-servicing) of any delinquent Pledged Student
Loans.

         SECTION 12.04.  No Impairment. The Master Servicer shall not (nor shall
it permit the applicable Sub-Servicer to) impair the rights of Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Lenders or any Secured Party
in such Pledged Student Loans.

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<PAGE>

         SECTION 12.05.  Purchase of Pledged Student Loans. The Master Servicer
shall inform the Agent and the Indenture Trustee promptly, in writing, upon the
discovery of any breach pursuant to Section 12.01, 12.02, 12.03 or 12.04. Unless
any such breach shall have been cured within 60 days following such discovery
(or, at the Master Servicer's election, the last day of the first month
following such discovery), the Master Servicer shall purchase any Pledged
Student Loan in which the interests of the Lenders or the other Secured Parties
are materially and adversely affected as determined by the Agent or the Lenders
by such breach as of the first day succeeding the end of such 60-day period that
is the last day of a Settlement Period for an amount equal to the outstanding
Principal Balance of such Student Loan, plus accrued and unpaid interest
thereon, plus any Unamortized Premium thereon plus any unreimbursed Monthly
Advance with respect thereto (the "Servicer Repurchase Amount"`). Such Servicer
Repurchase Amount shall be deposited by the Master Servicer into the Collection
Account on such date and applied as a repayment of the Total Outstanding
Advances on such date in accordance with Section 2.03(c). If the Master Servicer
takes any action or fails to take any action (including, without limitation, all
actions taken or not taken by a Sub-Servicer on its behalf) during any
Settlement Period pursuant to the sections referred to above that materially
impairs the rights of Issuer, the Indenture Trustee, the Eligible Lender
Trustee, or the Lenders in any Pledged Student Loan or otherwise than as
provided in such sections, the Master Servicer shall purchase such Pledged
Student Loan as of the last day of such Settlement Period for an amount equal to
Servicer Repurchase Amount (and such Servicer Repurchase Amount shall be
deposited by the Master Servicer into the Collection Account on such date and
applied as a repayment of the Total Outstanding Advances on such date in
accordance with Section 2.03(c)). Notwithstanding the foregoing, the Master
Servicer, at its option, may permit or cause a Sub-Servicer to purchase a
Pledged Student Loan in its stead, in the manner and for the reasons set forth
above.

         SECTION 12.06.  Master Servicer's Report. On or before the 20th day of
each month (or, if any such day is not a Business Day, on the next succeeding
Business Day), the Master Servicer shall (or shall cause each Sub-Servicer to)
deliver to the Agent a Monthly Report with respect to the preceding calendar
month.

         SECTION 12.07.  Annual Statement as to Compliance; Notice of Default.

         The Master Servicer shall (and the Master Servicer shall cause each
Sub-Servicer to) deliver to the Indenture Trustee and the Agent, on or before
July 30 of each year beginning July 30, 2003, an officers' certificate of the
Master Servicer (and each Sub-Servicer) as the case may be, dated as of December
31 of the preceding year, stating that (i) a review of the activities of the
Master Servicer (and each Sub-Servicer on its behalf), during the preceding
12-month period (or, in the case of the first such certificate, during the
period from the date hereof to December 31, 2002 and of its performance under
this Agreement (or the related sub-servicing agreement, as applicable) has been
made under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer (or such Sub-Servicer), as
the case may be, has fulfilled all its obligations under this Agreement (or the
related sub-servicing agreement), as applicable, throughout such year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof.

         The Master Servicer shall deliver to the Indenture Trustee and the
Agent promptly after having obtained knowledge thereof, but in no event later
than five Business Days thereafter,

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<PAGE>

written notice in an officers' certificate of the Master Servicer of any event
which with the giving of notice or lapse of time, or both, would constitute an
Event of Termination or a Servicer Event of Default.

         Access to Certain Documentation and Information Regarding Pledged
Student Loans; Audits. Upon reasonable prior notice, the Master Servicer shall
(or shall cause the Sub-Servicers to) provide to the Indenture Trustee and the
Agent access to the all files and documents in its possession relating to the
Pledged Student Loans. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Master Servicer (or the applicable Sub-Servicer). Nothing in this
Section 12.08 shall affect the obligation of the Master Servicer (or the
applicable Sub-Servicer on its behalf) to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Master
Servicer (or the applicable Sub-Servicer) to provide access to information as a
result of such obligation shall not constitute a breach of this Section 12.08.
In addition to the foregoing, the Master Servicer shall once per calendar year
or, upon the occurrence and during the continuance of an Event of Termination,
at any time at the request of the Agent and the Lenders, cooperate fully with
the Agent or any auditor or representative appointed by the Agent and the
Lenders in an agreed upon procedures audit with respect to all Pledged Student
Loans.

         SECTION 12.08.  Servicer Expenses. The Master Servicer shall be
required to pay or cause to be paid all expenses incurred by it (or its agents
acting on its behalf) in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the Master
Servicer and expenses incurred in connection with distributions and reports to
be delivered by it hereunder and the costs of all agreed upon procedures audits
described in Section 12.08.

         SECTION 12.09.  Appointment of Sub-Servicers. The Master Servicer shall
appoint one or more Sub-Servicers to perform all of its obligations as Master
Servicer hereunder, and without notice or consent, delegate specific duties to
sub-contractors who are in the business of performing such duties; provided,
however, that the Master Servicer shall remain obligated and be liable to
Issuer, the Agent, the Lenders and the other Secured Parties for the servicing
and administering of the Pledged Student Loans, in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such Sub-Servicers or other delegation of such duties and
to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Pledged Student Loans. The
fees and expenses of each Sub-Servicer (and any such sub-contractors) shall be
as agreed between the Master Servicer and the applicable Sub-Servicer or a
sub-contractor from time to time and none of Issuer, Lenders, Agent, Indenture
Trustee, Eligible Lender Trustee or any Secured Party shall have any
responsibility therefor.

         SECTION 12.10.  Maintenance of Fidelity Bond and Errors and Omission
Policy. The Master Servicer shall cause each Sub-Servicer to maintain in full
force and effect, such policy or policies of insurance covering errors and
omissions and a fidelity bond in respect of its officers, employees and agents
in accordance with the applicable Servicing Agreement and as approved by the
Agent.

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<PAGE>

         SECTION 12.11.  Representations of Master Servicer. The Master Servicer
makes the following representations on which Issuer, the Lenders and each
Secured Party is deemed to have relied in entering into this Agreement and
appointing the Master Servicer, as Master Servicer hereunder.

         Organization and Good Standing. The Master Servicer is duly organized
and validly existing as a corporation in good standing under the laws of the
State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the power,
authority and legal right to master service the Pledged Student Loans.

         Due Qualification. The Master Servicer is duly qualified to do business
and has obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business
(including the master servicing of the Pledged Student Loans as required by this
Agreement) shall require such qualifications.

         Power and Authority of the Master Servicer. The Master Servicer has the
corporate power and authority to execute and deliver this Agreement and each of
the other Transaction Documents to which it is a party and to carry out their
respective terms; and the execution, delivery and performance of this Agreement
and each of the other Transaction Documents to which it is a party have been
duly authorized by the Master Servicer by all necessary corporate action.

         Binding Obligation. This Agreement and each of the other Transaction
Documents to which it is a party constitutes a legal, valid and binding
obligation of the Master Servicer enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization
and similar laws relating to creditors' rights generally, and subject to general
principles of equity.

         No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under the articles of
association or by-laws of the Master Servicer, or any indenture, agreement or
other instrument to which the Master Servicer is a party or by which it shall be
bound nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); which breach or default could reasonably
be expected to have a material adverse effect on the condition of the Master
Servicer, financial or otherwise, or adversely affect the transactions
contemplated by this Agreement; nor violate any law or, to the knowledge of the
Master Servicer, any order, rule or regulation applicable to the Master Servicer
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Master
Servicer or its properties.

         No Proceedings. There are no proceedings, or, to the Master Servicer's
best knowledge, investigations pending, or, to the Master Servicer's best
knowledge, threatened against the Master Servicer, before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Master Servicer or its properties: (i) asserting the

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<PAGE>

invalidity of this Agreement or any other Transaction Document to which it is a
party, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, and the other Transaction Documents, or (iii)
seeking any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Master Servicer of its
obligations under, or the validity or enforceability of, this Agreement or any
other Transaction Document to which it is a party.

         No Amendment or Waiver. No provision of a Pledged Student Loan has been
waived, altered or modified in any respect, except pursuant to a document,
instrument or writing included in the files relating to such Pledged Student
Loan.

         Collection Practices. The servicing and collection practices used by
the Master Servicer (or each Sub-Servicer on its behalf) with respect to the
Pledged Student Loans have been in all respects in compliance with Accepted
Servicing Procedures, and all applicable laws and regulations.

         Location of Files Relating to Pledged Student Loans. The file relating
to each Pledged Student Loan are kept in the offices of the applicable
Sub-Servicer on behalf of the Master Servicer identified to the Agent in writing
prior to the date hereof, or at such other office identified to the Agent in
writing, and all such files have been delivered to and are in the possession of
the applicable Sub-Servicer.

         SECTION 12.12.  Indemnities of Master Servicer. The Master Servicer
agrees to indemnify each Indemnified Party for Indemnified Amounts arising out
of or resulting from any of the following:

               (i)   reliance on any representation or warranty made by the
         Master Servicer under this Agreement or any other Transaction Document
         to which it is a party, which shall have been false or incorrect when
         made;

               (ii)  the failure by the Master Servicer to comply with any term,
         provision or covenant contained in any Transaction Document to which it
         is party or with any applicable law, rule or regulation with respect to
         any Pledged Student Loan or the Related Security;

               (iii) the commingling of Collections with any other funds; and

               (iv)  any action or omission by the Master Servicer that reduces
         or impairs the rights of the Agent or any Lender with respect to any
         Collateral or the value of any such Collateral.

Any amounts subject to the indemnification provisions of this Section 12.12
shall be paid by the Master Servicer to the related Indemnified Party within
thirty (30) days following demand therefor accompanied by reasonable supporting
documentation with respect to such amounts.

         SECTION 12.13.  Education Lending Services, Inc. Not To Resign as
Master Servicer. Without the prior written consent of the Agent and the Lenders,
Education Lending Services, Inc. shall not resign from the obligations and
duties hereby imposed on it as Master Servicer

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<PAGE>

under this Agreement except upon determination that the performance of its
duties under this Agreement shall no longer be permissible under applicable law.
Notice of any such determination permitting the resignation of Education Lending
Services, Inc. as Master Servicer shall be communicated to the Eligible Lender
Trustee, the Agent and the Indenture Trustee at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall be evidenced by
an opinion of counsel (in form and substance reasonable acceptable to the Agent)
to such effect delivered concurrently with or promptly after such notice. No
such resignation shall become effective until the Indenture Trustee, the
Eligible Lender Trustee, the Agent or a successor Master Servicer reasonably
acceptable to the Agent and the Lenders shall have assumed the responsibilities
and obligations of Education Lending Services, Inc., as Master Servicer
hereunder.

         SECTION 12.14.  Servicer Default. If any Servicer Event of Default with
respect to the Master Servicer shall occur and be continuing then, and in each
and every case, so long as the Servicer Event of Default shall not have been
remedied, the Agent at the request of the Lenders, by notice then given in
writing to the Master Servicer may terminate all the rights and obligations of
the Master Servicer in such capacity under this Agreement and each of the other
Transaction Documents to which it is a party, as Master Servicer. On or after
the receipt by the Master Servicer of such written notice, all authority and
power of the Master Servicer under this Agreement, whether with respect to the
Student Loan Notes or the Pledged Student Loans or otherwise, shall, without
further action, pass to and be vested in the Agent or such successor Master
Servicer as may be appointed by the Agent at the request of the Lenders; and,
without limitation, the Agent and the Eligible Lender Trustee are hereby
authorized and empowered to execute and deliver, for the benefit of the
predecessor Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Pledged
Student Loans and related documents, or otherwise. The predecessor Master
Servicer shall cooperate with the successor Master Servicer in effecting the
termination of the responsibilities and rights of the predecessor Master
Servicer under this Agreement and all agreements with the Sub-Servicers,
including the transfer to the successor Master Servicer of its rights under all
existing Sub-Servicing Agreements and for administration by it of all cash
amounts that shall at the time be held by the predecessor Master Servicer for
deposit, or shall thereafter be received by it with respect to a Pledged Student
Loan. All reasonable costs and expenses (including reasonable attorneys' fees)
incurred in connection with transferring all files and other documents in
respect of each Pledged Student Loan to the successor Master Servicer and
amending this Agreement, the sub-servicing agreements and any other Transaction
Documents to reflect such succession as Master Servicer pursuant to this Section
12.15 shall be paid by the predecessor Master Servicer upon presentation of
reasonable documentation of such costs and expenses.

         SECTION 12.15.  Appointment of Successor. Upon receipt by the Master
Servicer of notice of termination pursuant to Section 12.15, or the resignation
by the Master Servicer in accordance with the terms of this Agreement, the
predecessor Master Servicer shall continue to perform its functions as Master
Servicer under this Agreement in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the

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<PAGE>

date 120 days from the delivery to the Agent of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Master
Servicer shall become unable to act as Master Servicer as specified in the
notice of resignation and accompanying opinion of counsel. In the event of the
termination hereunder of a Master Servicer, the Agent and the Lenders shall
appoint, a successor Master Servicer and the successor Master Servicer shall
accept its appointment by a written assumption in form acceptable to the Agent.
In the event that a successor Master Servicer has not been appointed at the time
when the predecessor Master Servicer has ceased to act as Master Servicer
hereunder, the Agent without further action shall automatically be appointed the
successor Master Servicer.

         SECTION 12.16.  Master Servicer Fee. The Master Servicer shall be paid
the Master Servicer's Fee for each calendar month payable on each Settlement
Date pursuant to clauses second and thirteenth of Section 3.03(b), in an amount
equal to the Servicers' Fee, less any amounts due with respect to Sub-Servicer's
fees.

                                  ARTICLE XIII

                                  MISCELLANEOUS

         SECTION 13.01.  Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by Issuer therefrom
shall in any event be effective unless the same shall be in writing and signed
by each of the parties hereto and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. The
parties acknowledge that, before entering into such an amendment or granting
such a waiver or consent, Lenders may also be required to obtain the approval of
some or all of the Program Support Providers or to obtain confirmation from
certain Rating Agencies that such amendment, waiver or consent will not result
in a withdrawal or reduction of the ratings of the Promissory Notes.

         SECTION 13.02.  Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
express mail or courier or by certified mail, postage prepaid, or by facsimile,
to the intended party at the address or facsimile number of such party set forth
on Schedule 13.02 of this Agreement or at such other address or facsimile number
as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (b) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.

         SECTION 13.03.  No Waiver; Remedies. No failure on the part of Issuer,
the Agent, any Affected Party, any Indemnified Party, the Indenture Trustee or
any Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof (unless waived in writing); nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

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         SECTION 13.04.  Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of Issuer, the Agent, the Indenture
Trustee, the Master Servicer, the Lenders, and their respective successors and
assigns, and the provisions of Section 4.02 and Article XI shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by Section
10.01. This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect to
any breach of any representation and warranty made by Issuer pursuant to Article
VI and the indemnification and payment provisions of Articles IX and XI and
Sections 2.06, 4.02, 13.05, 13.06 and 13.12 shall be continuing and shall
survive any termination of this Agreement.

         SECTION 13.05.  Costs, Expenses and Taxes. In addition to its
obligations under Article XI, Issuer agrees to pay within fifteen Business Days
of demand:

         all reasonable costs and expenses incurred by the Agent, any Program
Support Provider, the Indenture Trustee and the Lenders and their respective
Affiliates in connection with the negotiation, preparation, execution and
delivery, the administration (including periodic auditing) the amendment to, or
waiver of, or the enforcement of, or any actual or claimed breach of, this
Agreement and the other Transaction Documents, including, without limitation (i)
the reasonable fees and expenses of counsel to any of such Persons incurred in
connection with any of the foregoing or in advising such Persons as to their
respective rights and remedies under any of the Transaction Documents, and (ii)
all reasonable out-of-pocket expenses (including reasonable fees and expenses of
independent accountants), incurred in connection with any review of Issuer's or
the Master Servicer's books and records either prior to the execution and
delivery hereof or pursuant to Section 7.01(c) or a Servicing Agreement; and

         all stamp and other taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.

         SECTION 13.06.  No Proceedings. Issuer, the Indenture Trustee and the
Agent each hereby agrees that it will not institute against any Conduit Lender,
or join any other Person in instituting against any Conduit Lender, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Promissory Notes issued by
such Conduit Lender shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such Promissory Notes shall
have been outstanding. The foregoing shall not limit Issuer's right to file any
claim in or otherwise take any action with respect to any insolvency proceeding
that was instituted by any Person other than Issuer. The provisions of this
Section 13.06 shall survive the termination of this Agreement.

         SECTION 13.07.  Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix,

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Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit to
this Agreement, as the case may be, and references in any Section, subsection,
or clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.

         SECTION 13.08.  Integration. This Agreement and the other Transaction
Documents, contains a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.

         SECTION 13.09.  Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE INTERESTS OF LENDERS IN THE COLLATERAL IS GOVERNED BY THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

         SECTION 13.10.  Waiver Of Jury Trial; Submission to Jurisdiction.
ISSUER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR
WHICH MAY BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM
ANY BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL. EACH OF THE ISSUER AND THE
MASTER SERVICER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE COURTS OF THE UNITED STATES LOCATED IN THE STATE
OF NEW YORK FOR THE PURPOSE OF ADJUDICATING ANY CLAIM OR CONTROVERSY ARISING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY AND, FOR SUCH PURPOSE, HEREBY
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE
THEREIN OF ANY ACTION INSTITUTED HEREUNDER AND WITHOUT WAIVING ANY RIGHT TO
DEFEND ITSELF OR APPEAL ANY DECISION, CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
13.10 SHALL AFFECT THE RIGHT OF ANY LENDER, THE AGENT OR THE INDENTURE TRUSTEE
TO BRING ANY ACTION OR PROCEEDING AGAINST ANY PARTY HERETO OR ITS PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTION.

         SECTION  13.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.

                                       60

<PAGE>

         SECTION 13.12.  No Recourse Against Other Parties. No recourse under
any obligation, covenant or agreement of the Lenders or the Issuer contained in
this Agreement shall be had against any stockholder, member, employee, officer,
director, or incorporator of the Lenders or the Issuer; provided, however, that
nothing in this Section 13.12 shall relieve any of the foregoing Persons from
any liability which such Person may otherwise have for his/her or its gross
negligence or willful misconduct.

         SECTION 13.13.  Confidentiality.

         The Issuer agrees that it shall and shall cause each of its Affiliates
(i) to keep this Agreement and the other Transaction Documents, the proposal
relating to the structure of the facility contemplated by this Agreement and the
other Transaction Documents (the "Facility"), any analyses, computer models,
information or document prepared by the Agent, or any of its Affiliates in
connection with the Facility, the Agent's or its Affiliate's written reports to
the Issuer or any of its Affiliates and any related written information
(collectively, the "Product Information") confidential and to disclose Product
Information only to those of its officers, employees, agents, accountants, legal
counsel and other representatives (collectively, the "Issuer Representatives")
who have a need to know such Product Information for the purpose of assisting in
the negotiation, completion and administration of the Facility; (ii) to use the
Product Information only in connection with the Facility and not for any other
purpose; and (iii) to cause the Issuer Representatives to comply with the
provisions of this Section 13.13 and to be responsible for any failure of any
Issuer Representative to so comply.

         The provisions of this Section 13.13 shall not apply to any Product
Information that is a matter of general public knowledge or that has heretofore
been made available to the public by any Person other than the Issuer, the
Master Servicer, any of their respective Affiliates or any Issuer Representative
or that is required to be disclosed by law or is requested by any authority with
jurisdiction over the Issuer, the Master Servicer or any of their respective
Affiliates.

         Each of the Secured Parties agrees (i) to keep all non-public
information with respect to the Issuer and the Master Servicer and their
respective Affiliates which such Secured Party receives pursuant to the
Transaction Documents (collectively, the "Issuer Information") confidential and
to disclose Issuer Information only to those of its officers, employees, agents,
accountants, legal counsel and other representatives of the Secured Parties
(collectively, the "Secured Party Representatives"), to the rating agencies or
to their Program Support Providers which, in each case, may have a need to know
or review such Issuer Information for the purpose of assisting in the
negotiation, completion, administration and evaluation of the Facility (ii) to
use the Issuer Information only in connection with the Facility and not for any
other purpose; and (iii) to cause its related Secured Party Representatives to
comply with the provisions of this Section 13.13(b).

         The provisions of this Section 13.13(b) shall not apply to any Issuer
Information that is a matter of general public knowledge or that has heretofore
been made available to the public by any Person other than such Secured Party
Representative or that is required to be disclosed by law or is requested by any
authority with jurisdiction over any Secured Party or Secured Party
Representative or any of its Affiliates.

                                       61

<PAGE>

         Notwithstanding the foregoing, the Issuer Information may be disclosed
by any Secured Party to permitted assignees and participants and potential
assignees and participants in the Facility to the extent such disclosure is made
pursuant to a written agreement of confidentiality substantially similar to this
Section 13.13(b).

         SECTION 13.14. Limitation of Liability. No claim may be made by the
Issuer, Master Servicer, any of their Affiliates, or any other Person against
the Lenders, any Program Support Provider, the Agent, or the Indenture Trustee
or their respective Affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and each of the Issuer and
the Master Servicer hereby waives, releases, and agrees not to sue upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                     EDUCATION FUNDING RESOURCES, LLC, as Issuer

                                     By: /s/  Perry Moore
                                        ----------------------------------------
                                            Title: SVP - Finance
                                                  ------------------------------

                                       62

<PAGE>

                                     [______Lender Signature Pages/1/ _________]

                                     By: ____________________________________
                                           Title:____________________________

_____________________
/1/ Signature pages will be included for each conduit lender and each committed
lender. Each committed lender will have a separate signature block reflecting
its separate commitment with respect to each conduit lender in the transaction.

                                       63

<PAGE>

                                      CITICORP NORTH AMERICA, INC.,
                                      as Agent

                                      By: /s/  Roger W. Saylor
                                         ---------------------------------------

                                          Title: Vice President
                                                --------------------------------

                                       64

<PAGE>

                                       FIFTH THIRD BANK,
                                       as Eligible Lender Trustee and
                                       as Indenture Trustee

                                       By: /s/  Brian J. Gardner
                                          --------------------------------------
                                          Title: AVP - Sr. Trust Officer
                                                --------------------------------

                                       65

<PAGE>

                                         EDUCATION LENDING SERVICES, INC., as
                                         Master Servicer

                                         By: /s/  Perry Moore
                                            ------------------------------------

                                             Title: SVP - Finance
                                                   -----------------------------

                                       66

<PAGE>

                                         CORPORATE RECEIVABLES
                                         CORPORATION, as Conduit Lender

                                         By: /s/  Roger W. Saylor
                                            ------------------------------------
                                         Title: Vice President
                                               ---------------------------------

<PAGE>

                                              CORPORATE ASSET FUNDING
                                              COMPANY, INC., as Conduit Lender

                                              By: /s/  Roger W. Saylor
                                                 -------------------------------
                                              Title: Vice President
                                                    ----------------------------

<PAGE>

                                    CITIBANK, N.A., as Committed Lender with
                                    respect to Corporate Receivables Corporation

                                    By: /s/  Roger W. Saylor
                                       -----------------------------------------
                                    Title: Vice President
                                          --------------------------------------

<PAGE>

                                CITIBANK, N.A., as Committed Lender with
                                respect to Corporate Asset Funding Company, Inc.

                                By: /s/  Roger W. Saylor
                                   ---------------------------------------------
                                Title: Vice President
                                      ------------------------------------------

<PAGE>
                                    CITIBANK, N.A., as Letter of Credit Provider

                                     By: /s/  Roger W. Saylor
                                        ----------------------------------------
                                     Title: Vice President
                                           -------------------------------------

<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

         This is Appendix A to the Indenture, dated as of October 18, 2002 among
Education Funding Resources, LLC, as Issuer, Corporate Receivables Corporation
and Corporate Asset Funding Company, Inc., as Conduit Lenders, the financial
institutions from time to time party thereto, as Committed Lenders, Citicorp
North America, Inc. as Agent, Fifth Third Bank, as Indenture Trustee and as
Eligible Lender Trustee, and Education Lending Services, Inc. as Master Servicer
(as amended, supplemented or otherwise modified from time to time, this
"Agreement"). Each reference in this Appendix A to any Section, the Preamble,
Appendix or Exhibit refers to such Section of or Appendix, Preamble or Exhibit
to this Agreement.

         A.   Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
below (such definitions to be applicable to both the singular and plural forms
of such terms):

         "Accepted Servicing Procedures" means that the Master Servicer shall
(or shall cause the applicable Sub-Servicer to) manage, service, administer and
make collections on the Pledged Student Loans with reasonable care, using that
degree of skill and attention that the Master Servicer (or such Sub-Servicer)
exercises with respect to all comparable student loans that it services but, in
any event, in accordance with customary and usual standards of practice of
prudent lenders and loan servicers administering similar student loans. The
Master Servicer shall (or shall cause the applicable Sub-Servicer to) manage,
service, administer and make collections with respect to the Pledged Student
Loans in accordance with, and otherwise comply with, all applicable federal and
state laws, including all applicable standards, guidelines and requirements of
the Higher Education Act, Public Health Service Act and any applicable Guarantee
Agreement. These procedures shall include collection and posting of all
payments, responding to inquiries of borrowers on such Pledged Student Loans,
monitoring borrowers' status, making required disclosures to borrowers,
investigating delinquencies, sending billing statements or payment coupons to
borrowers and otherwise establishing repayment terms, reporting tax information
to borrowers, if applicable, accounting for collections and furnishing monthly
and quarterly statements with respect thereto to the Agent. The Master Servicer
shall (or shall cause the applicable Sub-Servicer to) follow its customary
standards, policies and procedures in performing its duties as Master Servicer
(or Sub-Servicer, as the case may be).

         "Account Control Agreement" means the Account Control Agreements dated
as of October 18, 2002 among the Issuer, the Indenture Trustee, the Eligible
Lender Trustee and the Securities Intermediary with respect to the Accounts.

         "Accounts" means the Disbursement Account, the Collection Account and
the Reserve Account.

         "Add-on Loan" means a Federal Consolidation Loan made by the Issuer to
a student within 180 days after such student has consolidated other Student
Loans.

<PAGE>

         "Administrative Expenses" means all administrative expenses of the
Issuer, including without limitation the fees and expenses of its independent
directors, in an aggregate amount not to exceed $25,000 in any calendar year.

         "Advance" has the meaning set forth in Section 1.01.

         "Affected Party" means each of the Lenders, each Program Support
Provider, the Eligible Lender Trustee and any assignee or participant of any
Lender or any Program Support Provider.

         "Affiliate" when used with respect to a Person, means any other Person
controlling, controlled by, or under common control with, such Person.

         "Affiliated Originators" means those Affiliates of the Issuer set forth
on Appendix B.

         "Agent" has the meaning set forth in the preamble.

         "Agent's Account" means the special account number [____________] of
the Indenture Trustee maintained at the office of Citibank, N.A. at
[____________], or such other account as may be so designated in writing by the
Agent to Issuer and the Indenture Trustee.

         "Agent's Office" means the office of the Agent at 399 Park Avenue, New
York, New York 10022, or such other address as shall be designated by the Agent
in writing to Issuer and the Lenders.

         "Agreement" has the meaning set forth in the first paragraph of this
Appendix A.

         "Alternate Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of

         (a)  the rate of interest announced publicly by Citibank in New York,
New York, from time to time as Citibank's base rate.;

         (b)  the Federal Funds Rate (as defined below) most recently determined
by the Reference Bank plus 0.50%; and

         (c)  1/2 of one percent per annum above the latest three-week moving
average of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market banks,
such three-week moving average being determined weekly on each Monday (or, if
any such day is not a Business Day on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by Citibank from
three New York certificate of deposit dealers of recognized standing selected by
Citibank, in either case, adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent.

The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Reference Bank in connection with extensions of
credit.

                                       2

<PAGE>

         "Applicable Schedule of Premium Base Amounts" means (i) with respect to
FFELP Loans, the Schedule of FFELP Premium Base Amounts and (ii) with respect to
HEAL Loans, the Schedule of HEAL Premium Base Amounts.

         "Approved School Lender" means any graduate institution that meets the
requirements to act as a lender under FFELP Program Regulations that becomes a
part of an Affiliated Originator's school lender program and that sells Student
Loans to the Issuer using a form Purchase and Sale Agreement that has been
approved by the Agent.

         "Asset Coverage Ratio" for any Calculation Date means the ratio of (i)
Collateral Value to (ii) Total Outstanding Advances as of such Calculation Date.

         "Available Funds" means (i) all Collections, (ii) all Reassignment
Amounts, (ii) all Monthly Advances and (iv) all Investment Earnings.

         "Borrowing" means the aggregate Advances made on a Borrowing Date.

         "Borrowing Date" means each date on which a Borrowing is consummated,
which date shall be a Business Day.

         "Borrowing Deficit" has the meaning set forth in Section 1.02(c).

         "Borrowing Notice" has the meaning set forth in Section 1.02(a).

         "Business Day" means a day on which both (a) the Agent at its principal
office in New York City is open for business and (b) commercial banks in New
York City are not authorized or required to be closed for business.

         "Calculation Date" means the last date of each monthly reporting period
utilized in providing the Monthly Report and in determining the Asset Coverage
Ratio or, if different, any other date as may be mutually agreed upon by CNAI
and the Master Servicer or upon which the Agent conducts a Portfolio Valuation
pursuant to Section 8.02(e).

         "Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under U.S. generally accepted
accounting principles, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with U.S. generally accepted
accounting principles.

         "Citibank" means Citibank, N.A.

         "CNAI" has the meaning set forth in the preamble.

         "Code" means the Internal Revenue Code of 1986, as amended, and the
regulations, rulings and proclamations promulgated thereunder.

                                       3

<PAGE>

         "Collateral" means all of Issuer's (and the Eligible Lender Trustee's)
right, title and interest in, to and under the following: (i) the Financed
Student Loans and any additional Student Loans which are not Financed Student
Loans but which have been purchased with funds on deposit in the Collection
Account (together, the "Pledged Student Loans"); (ii) all right, title and
interest with respect to the Pledged Student Loans under the Guarantee
Agreements; (iii) all Interest Subsidy Payments and Special Allowance Payments
with respect to any Pledged Student Loan that is an FFELP Loan; (iv) all
Insurance Payments with respect to any Pledged Student Loan that is a HEAL Loan;
(v) all borrower interest with respect to Pledged Student Loans; (vi) the
Collection Account, the Reserve Account, the Disbursement Account and any other
account established by Issuer pursuant to the Indenture in the name of the
Indenture Trustee for the benefit of the Secured Parties, and all investments
therein; (vii) all funds on deposit in the accounts described in clause (vi),
together with all certificates and instruments, if any, from time to time
evidencing such accounts, and funds on deposit and all investments made with
such funds, all claims thereunder or in connection therewith, and interest,
dividends, moneys, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of any or all of the
foregoing; (viii) all right, title and interest under any Purchase and Sale
Agreement and any Servicing Agreements; (ix) the Demand Note, all additional
indebtedness from time to time owed to the Issuer by Education Lending Services,
Inc. and related to the Demand Note, and the instruments evidencing such
indebtedness, all interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for the Demand Note or such other indebtedness, and all of Issuer's rights as
secured party with respect to the Demand Note and the collateral pledged
thereunder; (x) all Related Security; (xi) all books and records (including
computer tapes and disks) related to the foregoing; (xii) all other personal and
fixture property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts, chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights, commercial
tort claims, securities and all other investment property, supporting
obligations, any other contract rights or rights to the payment of money,
insurance claims and proceeds, and all general intangibles (including all
payment intangibles) and (xiii) all Collections and other proceeds of any and
all of the foregoing.

         "Collateral Value" means (i) the lesser of (a) the Net Pool Balance
less any discount paid by Issuer on Private Loans which do not have the benefit
of a Private Loan Guarantee Agreement and (b) if the Agent has obtained a
Portfolio Valuation with respect to all of the Pledged Student Loans as of the
last Calculation Date, the result of the Portfolio Valuation that causes it to
be consistent with a program rated "A2" by Moody's as reasonably determined by
the Agent using the ratings methodology it employs for rating the Note, plus
(ii) Collections in bank accounts maintained in the name of the Indenture
Trustee in which no funds other than Collections are deposited and the balances
of which are swept into the Collection Account within 15 days pursuant to the
applicable Servicing Agreements, plus (iii) without duplication, funds
(including Eligible Investments) held in the Collection Account, Reserve Account
and Disbursement Account (other than Monthly Rebate Fees).

         "Collection Account" means the account established at a Qualified
Institution, in the name of the Indenture Trustee, for the benefit of Lenders,
which account has been designated as

                                       4

<PAGE>

the Collection Account, and any other account designated as the Collection
Account by the Indenture Trustee or the Agent.

         "Collections" means (i) all funds which are received by Issuer, the
Master Servicer, any Sub-Servicer or the Indenture Trustee or any other Person
on behalf of Issuer from or on behalf of the related Obligors in payment of any
amounts owed (including, without limitation, all Interest Subsidy Payments,
Special Allowance Payments, Guarantee Payments, Reimbursement Payments,
Insurance Payments, finance charges, interest and all other charges) in respect
of the Pledged Student Loans, or applied to such amounts owed by such Obligors,
(ii) all funds received pursuant to the Servicing Agreements, including all
payments representing the purchase price of any repurchased Pledged Student
Loan, (iii) all funds drawn on the Premium Letter of Credit, and (iv) all funds
received by Issuer, the Indenture Trustee or the Master Servicer pursuant to the
Purchase and Sale Agreements or from any other source in respect of the Pledged
Student Loans.

         "Committed Lender" has the meaning set forth in the preamble.

         "Committed Lender Termination Date" has the meaning set forth in
Section 1.07.

         "Commitment" means the obligation of a Committed Lender to make
Advances pursuant to this Agreement.

         "Conduit Lender" has the meaning set forth in the preamble.

         "Coverage Condition" means the requirement that for any Calculation
Date the Asset Coverage Ratio is greater than or equal to 100.1%.

         "Coverage Condition Certificate" means a certificate certifying as to
the Coverage Condition substantially in the form of Exhibit 5.02(d) to the
Agreement.

         "Credit and Collection Policy" means the TERI Program Manual and such
other policies and procedures applicable to the origination and collection of
Private Loans, as approved by the Agent in writing.

         "Default Ratio" means the Federal Default Ratio and/or the Private Loan
Default Ratio, as applicable.

         "Defaulted Amount" means, as of any date, with respect to any Private
Loan that is a Defaulted Pledged Student Loan and (x) that does not have the
benefit of a Private Loan Guarantee Agreement or (y) that does have the benefit
of a Private Loan Guarantee Agreement but the related Private Loan Guarantor has
failed to make when due the appropriate Guarantee Payment with respect thereto
or with respect to which payment shall not have been made within 120 days of
request therefor, the aggregate outstanding Principal Balance plus accrued
interest of such Private Loan.

         "Defaulted Pledged Student Loan" means any Pledged Student Loan that is
a Defaulted Student Loan.

                                       5

<PAGE>

         "Defaulted Student Loan" means any Student Loan (i) that is defaulted
with respect to any applicable servicing requirements; (ii) (A) with respect to
any FFELP Loan, as to which any payment, or portion thereof, is defaulted under
the terms of the FFELP Program unless such Student Loan is in Deferment; (B)
with respect to any HEAL Loan, as to which any payment or portion thereof is
defaulted under the terms of the HEAL Program, unless such Student Loan is in
Deferment; or (C) with respect to any Private Loan, is more than 120 days past
due from the original due date therefor; or (iii) the Obligor of which is the
subject of an Event of Bankruptcy or is deceased or disabled.

         "Defaulting Committed Lender" has the meaning set forth in Section
1.02(c).

         "Deferment" means (a) the period permitted by the Higher Education Act
and the policies of the applicable FFELP Guarantor as being a period during
which a borrower under a FFELP Loan may postpone making payments of principal or
interest and (b) the period permitted by the Public Health Service Act as being
a period during which a borrower under a HEAL Loan may postpone making payments
of principal or interest.

         "Demand Note" means that certain Demand Note made by Education Lending
Services, Inc. to the order of the Issuer dated October 18, 2002 in the original
principal amount of $20,000,000, which note evidences indebtedness of Education
Lending Services, Inc. to the Issuer payable on demand in such principal amount,
as the same may from time to time be amended, restated, supplemented or
otherwise modified, and any instrument given substitution or as a replacement
therefor at any time.

         "Demand Note Collateral" means all assets described in clause (ix) of
the definition of "Collateral", including, without limitation, the Demand Note.

         "Department" means the United States Department of Education, or any
successor thereto or to the functions thereof.

         "Disbursement Account" means the account established at a Qualified
Institution, in the name of the Indenture Trustee, for the benefit of Lenders,
which account has been designated as the Disbursement Account, and any other
account designated as the Disbursement Account by the Indenture Trustee or the
Agent.

         "Dollars" means dollars in lawful money of the United States of
America.

         "Eligible Borrower" means, (i) with respect to any FFELP Loan, an
Obligor who is eligible under the Higher Education Act to be the obligor of a
Student Loan for financing a program of education at an Eligible Institution or
for consolidating two or more such Student Loans, including an Obligor who is
eligible under the Higher Education Act to be an obligor of a loan made pursuant
to Section 428A, 428B, 428C or 428H of the Higher Education Act (20 U.S.C.
ss.ss.1078-1. 1078-2, 1078-3, or 1078-8), (ii) with respect to any HEAL Loan, an
obligor who is eligible under the Public Health Service Act to be the obligor of
a Student Loan for financing a program of education at an Eligible Institution
and (iii) with respect to any Private Loan, is a matriculated student at an
Eligible Institution.

                                       6

<PAGE>

         "Eligible Pledged Student Loan" means a Pledged Student Loan that is an
Eligible Student Loan as of the date it became a Pledged Student Loan.

         "Eligible Institution" means an institution that is (i) an accredited
institution of higher education, (ii) a vocational school or (iii) any other
institution that, in all of the above cases, is an "eligible institution" as
defined in the Higher Education Act or the Public Health Service Act, as
applicable.

         "Eligible Investments" means cash or any one or more of the following
obligations or securities:

         (a) marketable direct obligations issued or unconditionally guaranteed
by the United States government and backed by the full faith and credit of the
United States government;

         (b) domestic and Eurodollar certificates of deposit and time deposits,
bankers' acceptances and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by S&P (or its successors) or P-1 (or
better) by Moody's (or its successors);

         (c) commercial paper of United States and foreign banks and bank
holding companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by S&P (or its successors) or P-1 (or better) by
Moody's (or its successors);

         (d) marketable direct obligations of any state of the United States of
America or any political subdivision of any such state given on the date of such
investment the highest credit rating by Moody's (or its successors) and S&P (or
its successors);

         (e) shares in mutual funds rated AA or higher by Moody's or S&P (in any
amount) issued by a bank, trust company or insurance company with its principal
place of business in the United States of America which has a combined capital,
surplus and undivided profits of at least $100 million; and

         (f) repurchase agreements, as defined below;

         provided, that all such Eligible Investments in clauses (a) through (f)
above shall mature prior to the next Settlement Date.

         For purposes of this definition, "repurchase agreement" means a
simultaneous agreement between the Indenture Trustee and another entity which is
a bank or insurance company which has, or whose parent holding company has,
combined capital and surplus of at least $100 million and a rating on long-term
debt of the highest or next-to-highest rating by Moody's and S&P, in which one
of the parties has agreed to purchase investment securities that are (i) direct
obligations of or obligations insured or guaranteed by the United States of
America or (ii) obligations issued or guaranteed by any instrumentality or
agency of the United States of

                                       7

<PAGE>

America, whether now existing or hereafter organized, which bear the full faith
and credit of the United States of America and the other party has agreed to
repurchase the investment securities at the same price plus accrued interest on
a later date no more than 30 days thereafter, in which the market value
(principal and interest) of the investment securities purchased is in excess of
the amount of the repurchase agreement, and in which the investment securities
are so purchased and delivered to the Indenture Trustee or a third party, in
trust, in order to complete the contractual commitment and a custody receipt is
secured, or such transfer is annotated by book entry on the books of the
Department of Treasury of the United States of America or the appropriate
Federal Reserve Bank, as required by applicable law.

         "Eligible Lender Trust Agreement" means each eligible lender trust
agreement between the Eligible Lender Trustee and the Issuer.

         "Eligible Lender Trustee" has the meaning set forth in the preamble.

         "Eligible Lender Trustee Event of Default" means (i) the Eligible
Lender Trustee shall fail in any material respect to perform or observe any
term, covenant or agreement that is an obligation of the Eligible Lender Trustee
under an Eligible Lender Trust Agreement or any Transaction Document and such
failure continues unremedied for thirty days after (a) written notice thereof
shall have been given by the Agent to the Issuer or the Eligible Lender Trustee
or (b) the Eligible Lender Trustee or the Issuer has actual knowledge thereof or
(ii) any representation or warranty made or deemed to be made by the Eligible
Lender Trustee (or any of its officers) under or in connection with an Eligible
Lender Trust Agreement or any Transaction Document shall prove to have been
false or incorrect in any material respect when made and, if such condition is
capable of being remedied, such condition shall remain unremedied for 30 days
after (a) written notice thereof shall have been given by the Agent to the
Issuer or the Eligible Lender Trustee or (b) the Eligible Lender Trustee or the
Issuer has actual knowledge thereof.

         "Eligible Lender Trustee Fee Letter" has the meaning set forth in
Section 4.01.

         "Eligible Student Loan" means a Student Loan, on any date of
determination:

         (a)  which was acquired by the Issuer in the ordinary course of its
business from an Originator and pursuant to the terms of a valid Purchase and
Sale Agreement (it being understood that if such Student Loan is acquired by the
Issuer pursuant to a Purchase and Sale Agreement (other than the Purchase and
Sale Agreements defined in clause (i) of the definition thereof), the Agent and
the Lenders shall, if so requested, have received prior to such acquisition a
favorable opinion or opinions of counsel to the applicable Originator(s)
thereunder in form and substance reasonably satisfactory to the Agent and the
Lenders) or which is an Add-on Loan related to a Federal Consolidation Loan that
has been acquired by the Issuer in the ordinary course of its business from an
Originator and pursuant to the terms of a valid Purchase and Sale Agreement;

         (b)  that constitutes an instrument, account or a general intangible as
defined in the Uniform Commercial Code as in effect in the jurisdiction that
governs the perfection of the interests of Issuer therein and the perfection of
the Indenture Trustee's interest therein;

                                       8

<PAGE>

         (c)   the borrower thereof is an Eligible Borrower;

         (d)   the borrower thereof is a United States citizen or United States
national;

         (e)   (i) if such Student Loan is an FFELP Loan that is a subsidized
Stafford Loan, such Student Loan qualifies the Lenders to receive Interest
Subsidy Payments and Special Allowance Payments from the Department; (ii) if
such Student Loan is an FFELP Loan that is a Federal Consolidation Loan, such
Student Loan qualifies the Lenders to receive Interest Subsidy Payments and
Special Allowance Payments from the Department; (iii) if such Student Loan is an
FFELP Loan that is a PLUS Loan, a SLS Loan or an Unsubsidized Loan, such Student
Loan qualifies the Lenders to receive Special Allowance Payments from the
Department; and (iv) if such Student Loan is a HEAL Loan, such Student Loan
qualifies the Lenders to receive Insurance Payments equal to at least 100% of
the principal and interest of such HEAL Loan from the HEAL Insurer;

         (f)   is not a Defaulted Student Loan;

         (g)   that provides or, when the payment schedule with respect thereto
is determined, will provide for payments on a periodic basis that fully amortize
the Principal Balance thereof by its maturity, as such maturity may be modified
in accordance with any applicable deferral or forbearance periods granted in
accordance with applicable laws, including, (i) with respect to any FFELP Loan,
those of the Higher Education Act or any Guarantee Agreement, as applicable and
(ii) with respect to any HEAL Loan, those of the Public Health Service Act;

         (h)   with regard to which the warranty of Issuer in Section 6.01(g) is
true and correct;

         (i)   the sale or assignment of which to Issuer pursuant to a Purchase
and Sale Agreement and the granting of a security interest to the Indenture
Trustee pursuant to the Agreement does not contravene or conflict with any law
or regulation, or require the consent or approval of, or notice to, any Person;

         (j)   that is denominated and payable only in Dollars in the United
States;

         (k)   that together with the related Student Loan Note therefor
represents the genuine, legal, valid and binding payment obligation of the
related borrower, enforceable by or on behalf of the holder thereof against such
borrower in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and similar laws relating to
creditors' rights generally and subject to general principles of equity; and
that has not been satisfied, subordinated or rescinded and no right of
rescission, setoff, counterclaim or defense has been asserted or, to Issuer's
knowledge, overtly threatened in writing with respect to such Student Loan;

         (l)   that complied at the time it was originated or made, and on the
date that such Student Loan becomes a Pledged Student Loan complies, and Issuer
and its agents, with respect to such Student Loan, have at all times complied,
in all material respects with all requirements of applicable federal, state and
local laws and regulations thereunder, including, (i) with respect to any
Federal Loan, the Higher Education Act, the Public Health Service Act and the
Equal Credit

                                       9

<PAGE>

Opportunity Act, the Federal Reserve Board's Regulation B and other applicable
consumer credit laws and equal credit opportunity laws, as applicable to such
Federal Loan, (ii) with respect to any FFELP Loan, all applicable FFELP
Guarantee Agreements and (iii) with respect to any Private Loan complies with
all applicable Private Loan Guarantee Agreements and all regulations;

         (m)   that with respect to (a) any FFELP Loan is the subject of a valid
FFELP Guarantee Agreement with an eligible FFELP Guarantor under the Higher
Education Act and as to which a Guarantor Event of Default has not occurred, (i)
qualifies the holder thereof to receive Guarantee Payments equal to at least 98%
of principal and interest from the Guarantor and qualifies the Guarantor to
receive Reimbursement Payments thereon from the Department, (ii) with respect to
which Issuer is not in default in any material respect the performance of any of
its covenants and agreements made in the applicable Guarantee, (iii) with
respect to which all amounts due and payable to the Department or a Guarantor,
as the case may be, have been paid in full, and (iv) with respect to which no
Unanticipated Change has occurred affecting such FFELP Loan which has not been
approved by the Agent and (b) any HEAL Loan (i) with respect to \which all
amounts due and payable to the HEAL Insurer have been paid in full and (ii) with
respect to which no Unanticipated Change has occurred affecting such HEAL Loan
which has not been approved by the Agent;

         (n)   with respect to any FFELP Loan or HEAL Loan, the payment terms of
which have not been altered or amended other than in accordance with the Higher
Education Act or Public Health Service Act, respectively, and with respect to
FFELP Loans, in accordance with a Reduced Rate Program;

         (o)   that is the subject of a valid Servicing Agreement and as to
which a Servicer Event of Default has not occurred;

         (p)   if such Student Loan is not an FFELP Loan or a HEAL Loan, it is a
Private Loan that complies in all material respects with the applicable Program
Manuals and (if such Private Loan has the benefit of a Private Loan Guarantee
Agreement) the Credit and Collection Policy and all other requirements of the
related Private Loan Guarantor and the Program Manuals, Credit and Collection
Policy and such other requirements have been approved by the Agent;

         (q)   if such Student Loan is a Private Loan that does not have the
benefit of a Private Loan Guarantee Agreement, such Student Loan is part of a
Student Loan program which has been underwritten and approved by the Agent and
all origination fees with respect to such Private Loan have been deposited into
the Reserve Account;

         (r)   if such Student Loan is a Private Loan, all of the conditions set
forth in Section 5.02(j) for a Borrowing with respect to such Student Loan and
for its inclusion in the Coverage Condition shall have been satisfied;

         (s)   that with respect to any Private Loan that has the benefit of a
Private Loan Guarantee Agreement (i) is the subject of a valid Private Loan
Guarantee Agreement with a Private Guarantor and as to which neither a Guarantor
Event of Default nor a Material Adverse Change with respect to the applicable
Guarantor has occurred, (ii) qualifies the Lenders to

                                       10

<PAGE>

receive Guarantee Payments equal to at least 100% of principal and interest from
the Guarantor, (iii) with respect to which Issuer is not in default in any
material respect the performance of any of its covenants and agreements made in
the applicable Guarantee, and (iv) with respect to which all amounts due and
payable to a Guarantor, as the case may be, have been paid in full;

         (t)   if such Student Loan is a Private Loan, the interest rate payable
on such Private Loan is not less than or equal to 4.75% per annum; and

         (u)   the inclusion of such Student Loan as an Eligible Student Loan
shall not result in an Event of Termination pursuant to Section 8.01(j).

         "ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time.

         "ERISA Affiliate" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as Issuer, (ii) partnership or other trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with Issuer, or (iii) member of the same affiliated service group (within
the meaning of Section 414(m) of the Code) as Issuer, any corporation described
in clause (i) above or any partnership or trade or business described in clause
(ii) above.

         "Eurodollar Rate" means, for any Settlement Period, an interest rate
per annum (rounded upward to the nearest 1/16th of 1%) determined pursuant to
the following formula:

         Eurodollar Rate    =                      LIBOR
                                   ------------------------------------
                                   1.00 - Eurodollar Reserve Percentage

         Where,

         "Eurodollar Reserve Percentage" means, for any Settlement Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect on the date LIBOR for such Settlement Period is
determined under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
"Eurocurrency" funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Settlement Period.

         "Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:

                     (a)  a case or other proceeding shall be commenced, without
               the application or consent of such Person, in any court, seeking
               the liquidation, reorganization, debt arrangement, dissolution,
               winding up, or composition or readjustment of debts of such
               Person, the appointment of a trustee, receiver, custodian,
               liquidator, assignee, sequestrator or the like for such Person or
               all or substantially all of its assets, or any similar action
               with respect to such Person

                                       11

<PAGE>

               under any law relating to bankruptcy, insolvency, reorganization,
               winding up or composition or adjustment of debts, and such case
               or proceeding shall continue undismissed, or unstayed and in
               effect, for a period of 60 consecutive days; or an order for
               relief in respect of such Person shall be entered in an
               involuntary case under the federal bankruptcy laws or other
               similar laws now or hereafter in effect; or

                     (b)  such Person shall commence a voluntary case or other
               proceeding under any applicable bankruptcy, insolvency,
               reorganization, debt arrangement, dissolution or other similar
               law now or hereafter in effect, or shall consent to the
               appointment of or taking possession by a receiver, liquidator,
               assignee, trustee, custodian, sequestrator (or other similar
               official) for, such Person or for any substantial part of its
               property, or shall make any general assignment for the benefit of
               creditors, or shall fail to, or admit in writing its inability
               to, pay its debts generally as they become due, or, if a
               corporation or similar entity, its board of directors shall vote
               to implement any of the foregoing.

         "Event of Termination" has the meaning set forth in Section 8.01.

         "Excess Concentration Amount" means the sum of (i) the Private Loan
Excess Amount; (ii) the Unguaranteed Private Loan Excess Amount; (iii) the
Proprietary Loan Excess Amount; (iv) a Reduced Rate Program Excess Amount; and
(v) the Rehab Loan Excess Amount where:

               "Private Loan Excess Amount" means the outstanding Principal
Balance (including accrued but unpaid interest) of Eligible Student Loans which
are Private Loans which exceed 5% of the Net Pool Balance;

               "Unguaranteed Private Loan Excess Amount" means the outstanding
Principal Balance (including accrued but unpaid interest) of Eligible Student
Loans which are Private Loans but which do not have the benefit of a Private
Loan Guarantee Agreement which exceed 2% of the Net Pool Balance or, if
applicable, such higher percentage as shall have been approved by the Agent and
the Lenders in writing in connection with a specific Private Loan program;

               "Proprietary Loan Excess Amount" means the outstanding Principal
Balance (plus accrued but unpaid interest and any Financed Premium Amount) of
Eligible Student Loans which are FFELP Loans which are Proprietary Loans which
exceed 5% of the outstanding Principal Balance of Eligible Student Loans that
are FFELP Loans;

               "Reduced Rate Program Excess Amount" means the outstanding
Principal Balance (plus accrued but unpaid interest and any Financed Premium
Amount) of FFELP Eligible Student Loans which are subject to a Reduced Rate
Program which exceed 20% of the outstanding Principal Balance (plus accrued but
unpaid interest and any Financed Premium Amount) of all Eligible Student Loans
that are FFELP Loans; and

               "Rehab Loan Excess Amount" means the outstanding Principal
Balance (plus accrued but unpaid interest and any Financed Premium Amount) of
Eligible Student Loans which are Rehab Loans which exceed 2.5% of the
outstanding Principal Balance (plus accrued

                                       12

<PAGE>

but unpaid interest and any Financed Premium Amount) of all Eligible Student
Loans that are FFELP Consolidation Loans.

         "Excess Spread" means, the annualized percentage, calculated on the
last day of each month, which is a fraction, the numerator of which is the
positive difference, if any, between (x) the Expected Interest Collections for
such month and (y) the sum of (i) all fees payable to the Master Servicer or any
Sub-Servicers for such month, (ii) all other Fees payable hereunder, (iii) all
Monthly Rebate Fees for such month, and (iv) all interest payable to the Lenders
in respect of the Advances for such month pursuant to Section 2.02 and the
denominator of which is the Net Pool Balance as of such date.

         "Exchange Act" means the Securities and Exchange Act of 1934, as
amended.

         "Expected Interest Collections" means, for any calendar month, the sum
of (i) the amount of interest due or accrued with respect to the Net Pool
Balance and payable by the related Obligors thereof during the related calendar
month (whether or not such interest is actually paid), (ii) all Interest Subsidy
Payments, Special Allowance Payments and Insurance Payments estimated to have
accrued during such calendar month whether or not actually received and (iii)
Investment Earnings for such calendar month.

         "Facility" has the meaning set forth in Section 13.13(a).

         "Facility Termination Date" means the earliest to occur of (a) with
respect to the Committed Lenders' Commitments hereunder, October 15, 2003 unless
such date is extended pursuant to Section 1.07, (b) with respect to the Conduit
Lenders, the earlier of (i) the Maturity Date unless such date is extended with
the consent of the parties hereto and (ii) the termination of the commitment of
any Program Support Provider to the related Conduit Lender with respect to this
Agreement (unless such Program Support Provider is replaced in accordance with
the terms and conditions of the related Program Support Agreement or, assuming
that such Program Support Provider is also a Committed Lender, the Program Limit
is reduced in accordance with Section 1.07(b), and (c) the date determined
pursuant to Section 8.02.

         "FDIC" means the Federal Deposit Insurance Corporation, or any agency
succeeding substantially to its responsibilities.

         "Federal Consolidation Loan" means a loan made to an Obligor pursuant
to which the Obligor consolidates two or more of its PLUS Loans, SLS Loans,
Stafford Loans or HEAL Loans in accordance with the Higher Education Act.

         "Federal Default Ratio" means the ratio, computed as of the last day of
any Settlement Period, expressed as a percentage, of (i) the Unguaranteed Amount
of the aggregate Principal Balance of all Federal Loans which have become
Defaulted Pledged Student Loans during such Settlement Period, divided by (ii)
the weighted average aggregate Principal Balance of all Federal Loans in
Repayment status during such Settlement Period.

         "Federal Funds Rate" means, for any period, the per annum rate set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the

                                       13

<PAGE>

Federal Reserve Board (including any such successor, "H.15(519)") for such day
opposite the caption "Federal Funds (Effective)". If on any relevant day such
rate is not yet published in H.15(519), the rate for such day will be the rate
set forth in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
the "Composite 3:30 p.m. Quotation") for such day under the caption "Federal
Funds Effective Rate." If on any relevant day the appropriate rate for such
previous day is not yet published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such day will be the arithmetic mean as determined by
the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by the Agent.

         "Federal Loan" means any FFELP Loan and/or HEAL Loan, as applicable.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.

         "Fees" means all fees payable by Issuer pursuant to the Program Fee
Letter, the Indenture Trustee Fee Letter, the Eligible Lender Trustee Fee Letter
and the Letter of Credit Provider Fee Letter.

         "FFELP Guarantee Agreement" means any of, and "FFELP Guarantee
Agreements" means all of, the agreements pursuant to which a FFELP Guarantor
guarantees Student Loans that are FFELP Loans included or to be included in the
Pledged Student Loans in effect on October 18, 2002 and any such agreements that
thereafter become effective that are approved in writing by the Agent and the
Lenders, in each case as the same may be amended, supplemented or otherwise
modified from time to time.

         "FFELP Guarantors" means the entities set forth on Appendix C attached
hereto and any other guaranty agency which is authorized to act as a guarantor
of FFELP Loans under the FFELP Program, which is in compliance with all
regulatory requirements and guidelines, and which has not been specifically
excluded by the Agent or the Lenders as a FFELP Guarantor by written notice to
Issuer from the Agent at the time the Student Loan being guaranteed by such
guarantor becomes a Pledged Student Loan.

         "FFELP Loan" means a Federal Consolidation Loan, a PLUS Loan, a SLS
Loan or a Stafford Loan.

         "FFELP Program" means the Federal Family Education Loan Program
authorized under the Higher Education Act, including Federal Stafford Loans
authorized under Sections 427 and 428 thereof, Federal Supplemental Loans for
Students authorized under Section 428A thereof, Federal PLUS Loans authorized
under Section 428B thereof, Federal Consolidation Loans authorized under Section
428C thereof and Unsubsidized Loans authorized under Section 428H thereof.

                                       14

<PAGE>

         "Final Payout Date" means the date following the Termination Date on
which the principal and interest of the Note shall have been paid in full and
all other amounts payable by Issuer under the Transaction Documents shall have
been paid in full.

         "Financed Premium Amount" means, at any time of determination in the
case of any Student Loan that is an Eligible Student Loan and that may be
financed at a premium, the lesser of (a) an amount equal to the product of (i)
the Principal Balance of such Student Loan times (ii) the rate set forth on the
latest version of the Applicable Schedule of Premium Base Amounts (which
schedule has been approved by the Agent and the Lenders) as the rate in
connection with premiums available for funding under the Agreement with respect
to such Student Loan at such time and (b) the highest Financed Premium Amount
which shall cause the Weighted Average Financed Premium for all FFELP Loans and
HEAL Loans, or for any purchased portfolio of FFELP Loans and HEAL Loans, to not
exceed 4% of outstanding Principal Balance of such Student Loans plus accrued
but unpaid interest of such Student Loans unless CNAI or an Affiliate of CNAI
shall have conducted a Portfolio Valuation with respect to such Student Loans
and the Agent and the Lenders determine based on the results of such Portfolio
Valuation that the Collateral Value of such Student Loans is sufficient to
support such a higher percentage.

         "Financed Student Loan" means each Student Loan acquired or funded, or
purported to be acquired or funded, with the proceeds of Advances.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions or pertaining to
government, including without limitation any court, and any Person owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

         "Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such indebtedness or
obligation.

         "Guarantee Agreement" means any of, and "Guarantee Agreements" means
all of, the FFELP Guarantee Agreements and the Private Loan Guarantee
Agreements.

         "Guarantee Payment" means any payment by a Guarantor pursuant to a
Guarantee Agreement in respect of a Pledged Student Loan.

         "Guarantor" means a FFELP Guarantor and/or a Private Loan Guarantor, as
applicable.

                                       15

<PAGE>

         "Guarantor Event of Default" means (a) with respect to any FFELP
Guarantor, the Guarantor becomes ineligible to act as a guarantee agency under
the Higher Education Act; and (b) with respect to any Private Loan Guarantor,
the rating by the Rating Agencies on the long-term unsecured debt of such
Guarantor shall fall below BBB- by S&P or below Baa3 by Moody's.

         "HEAL Insurer" means the Secretary of Health and Human Services, as
insurer (subject to certain limitations), of HEAL Loans under the HEAL Program.

         "HEAL Loan" means an education loan made to an "eligible graduate
student" as defined in and pursuant to the Public Health Service Act.

         "HEAL Program" means the HEAL Program authorized under the Public
Health Service Act, which established the program to provide insured HEAL Loans
to "eligible graduate students" in schools of medicine, osteopathy, dentistry,
veterinary medicine, optometry, podiatry, public health, pharmacy, chiropractic
medicine or in programs in health administration, clinical psychology or allied
health.

         "Higher Education Act" means the Higher Education Act of 1965, as
amended or supplemented from time to time, or any successor federal act,
together with any rules (including, without limitation, the Common Manual),
regulations and interpretations promulgated thereunder.

         "Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
indebtedness of others secured by any mortgage, encumbrance, lien, pledge,
charge or security interest of any kind on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations of such Person to reimburse any
bank or other Person in respect of amounts paid under letters of credit and
similar instruments, (j) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances and (k) obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured. The Indebtedness
of any Person shall include the indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
indebtedness provide that such Person is not liable therefor.

         "Indemnified Amounts" has the meaning set forth in Section 11.01.

                                       16

<PAGE>

         "Indemnified Party" has the meaning set forth in Section 11.01.

         "Indenture Trustee" has the meaning set forth in the preamble.

         "Indenture Trustee Fee Letter" has the meaning set forth in Section
4.01.

         "Indenture Trustee's Fees" means the fees paid to the Indenture Trustee
by Issuer pursuant to the Indenture Trustee Fee Letter.

         "Insurance Payment" means any payment made by the HEAL Insurer in
respect of a Pledged Student Loan that is a HEAL Loan pursuant to the HEAL
Program.

         "Interest Subsidy Payments" means payments, designated as such,
consisting of interest subsidies to Issuer by the Department in respect of
Student Loans that are FFELP Loans in accordance with the Higher Education Act.

         "Investment Earnings" means, with respect to each Settlement Date, all
investment earnings (net of losses and investment expenses) on investments or
other amounts which are on deposit in the Accounts.

         "Issuer" has the meaning set forth in the preamble.

         "Issuer Information" has the meaning set forth in Section 13.13(b).

         "Issuer Order" means a direction letter, in such form as the Indenture
Trustee and Issuer may agree to specifying the Eligible Investments that funds
in the Collection Account and the Reserve Account shall be invested in pursuant
to Section 3.01.

         "Issuer Representatives" has the meaning set forth in Section 13.13(a).

         "Lender" means either a Conduit Lender or a Committed Lender.

         "Lenders" has the meaning set forth in the preamble.

         "Letter of Credit Provider" means Citibank.

         "Letter of Credit Provider Fee Letter" has the meaning set forth in
Section 4.01.

         "LIBOR" for any Settlement Period means the rate of interest per annum
at which deposits in U.S. Dollars are offered by the principal office of
Citibank in London, England to prime banks in the London interbank market at
11:00 a.m. (London time) two Business Days before the first day of such
Settlement Period in an amount approximately equal or comparable to the then
outstanding Advances and for a period equal to such Settlement Period.

         "Lien" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, assignment, conditional sale or trust receipt for a lease,

                                       17

<PAGE>

consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting property.

         "Liquidation Period" means the period commencing on the Termination
Date and ending on the Final Payout Date.

         "Master Servicer" has the meaning set forth in the preamble.

         "Master Servicer's Fee" means fees payable to the Master Servicer for
servicing the Pledged Student Loans under the Agreement.

         "Material Adverse Change" means the occurrence of an event or a change
in circumstances which could reasonably be viewed as having a Material Adverse
Effect.

         "Material Adverse Effect" with respect to any event or circumstance and
any Person, means that such event or circumstance would cause the rating of the
Note to fall below the equivalent of "A2" by Moody's as reasonably determined by
the Agent using the ratings methodology it employs for rating the Note or a
material adverse effect on:

               (i)   the business, assets, financial condition, prospects or
         operations of such Person;

               (ii)  the ability of such Person to perform its obligations under
         this Agreement or any other Transaction Document;

               (iii) the validity, enforceability or collectibility of this
         Agreement, any other Transaction Document to which such Person is a
         party, a material amount of the Pledged Student Loans or the Student
         Loan Notes, or the Servicing Agreements or the Guarantee Agreements;

               (iv)  the status, existence, perfection, priority or
         enforceability of the Indenture Trustee's security interest in the
         Collateral; or

               (v)   a Guarantor's obligation to guarantee payment of a Pledged
         Student Loan.

         "Maturity Date" means October 10, 2005.

         "Monthly Advances" has the meaning set forth in Section 3.05(e).

         "Monthly Rebate Fee" means with respect to any Settlement Period, the
sum of the following product calculated for each day in such Settlement Period:
(a) the rate, expressed as a percentage, established under the FFELP Program
divided by 365 or 366, as applicable, times (b) the aggregate outstanding
Principal Balance (plus accrued interest) of all Pledged Student Loans that are
Federal Consolidation Loans on such day and require remittance of a monthly
rebate fee.

         "Monthly Report" means a report, in substantially the form of Exhibit
7.02(c), furnished by Issuer (or the Master Servicer on its behalf) to the
Agent.

                                       18

<PAGE>

         "Moody's" means Moody's Investors Service, Inc.

         "Net Consolidation Ratio" means, for any calendar month, the ratio of
(i) the Principal Balance of all Federal Loans which are repaid or otherwise
removed from Net Pool Balance due to a loan consolidation to (ii) the Principal
Balance of Federal Consolidation Loans which became Pledged Student Loans and
were added to Net Pool Balance during the same period.

         "Net Pool Balance" means at any time of calculation hereunder, the
aggregate outstanding Principal Balance (as reported by Issuer on the last
Monthly Report delivered to the Agent) of the Pledged Student Loans (plus
accrued but unpaid interest and any unamortized Financed Premium Amounts) less
(i) the Unguaranteed Amount of the Defaulted Student Loans that constitute part
of the Collateral less (ii) the outstanding Principal Balance (as reported by
Issuer on the last Monthly Report delivered to the Agent) of the Pledged Student
Loans (other than those referred to in clause (i) of this definition) that
constitute part of the Collateral but which are not Eligible Student Loans (plus
accrued but unpaid interest and any unamortized Financed Premium Amounts) as of
the date of such calculation; (iii) Excess Concentration Amounts; and (iv)
Unapplied Cash.

         "Non-Defaulting Committed Lender" has the meaning set forth in Section
1.02(c).

         "Non-Renewing Committed Lender" has the meaning set forth in Section
1.07.

         "Non-Payment Amount" means, as of any date, with respect to any HEAL
Loan that is a Defaulted Pledged Student Loan for which a claim for an Insurance
Payment with respect to such Student Loan has been refused by the HEAL Insurer
or remains unpaid within 180 days after submission, the aggregate outstanding
Principal Balance of such Student Loan.

         "Note" has the meaning set forth in Section 2.01.

         "Notice of Release" has the meaning set forth in Section 1.04.

         "Obligor" means a Person obligated to make payments with respect to a
Student Loan, including the students, Guarantors and the Department.

         "Originator" means each Affiliated Originator and each Third-Party
Originator.

         "Participant" has the meaning assigned to it in Section 10.01(g).

         "Permitted Payments" has the meaning assigned to it in Section 1.03(b).

         "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.

         "Plan" has the meaning assigned to it in Section 6.01(f).

         "Pledged Student Loan" has the meaning assigned to it in the definition
of "Collateral".

                                       19

<PAGE>

         "PLUS Loan" means a parental loan for undergraduate students, made in
accordance with the Higher Education Act.

         "Portfolio Valuation" means a determination by CNAI or an Affiliate of
CNAI of the fair market value of part or all of the actual Collateral as of any
Calculation Date at the equivalent of a program rated "A2" by Moody's as
reasonably determined by the Agent using the ratings methodology it employs for
rating the Note.

         "Premium Amortization" means the Financed Premium Amount paid for a
Financed Student Loan and amortized as an expense during the applicable time
period in accordance with generally accepted accounting principals.

         "Premium Base" means, at any time of determination, the aggregate, for
all Stafford Loans, PLUS Loans and HEAL Loans that are Financed Student Loans
that are also Eligible Student Loans, of the Financed Premium Amount with
respect to such Student Loans.

         "Premium Letter of Credit" means the letter of credit issued by the
Letter of Credit Provider pursuant to Section 1.06.

         "Principal Balance" with respect to any Student Loan means the original
principal amount of such Student Loan, plus capitalized interest thereon
pursuant to the Higher Education Act or any Private Loan program, if any, less
payments of principal made by or on behalf of the Obligor of such Student Loan.

         "Private Loan" means an education loan made to a student or parent of a
dependent student that is not granted under the FFELP Program or the HEAL
Program.

         "Private Loan Default Ratio" means the ratio, computed as of the last
day of any Settlement Period, expressed as an annualized percentage, of (i) the
aggregate Principal Balance of all Private Loans that are Pledged Student Loans
which have become Defaulted Pledged Student Loans during such Settlement Period,
divided by (ii) the weighted average aggregate Principal Balance of all Private
Loans that are Pledged Student Loans in Repayment status for the full amount of
principal and accrued interest during such Settlement Period.

         "Private Loan Guarantee Agreement" means any of, and "Private Loan
Guarantee Agreements" means all of, the agreements pursuant to which a Private
Loan Guarantor guarantees (or insures) certain Student Loans that are Private
Loans included or to be included in the Pledged Student Loans in effect on
October 18, 2002 and any such agreements that thereafter become effective that
are approved in writing by the Agent and the Lenders, in each case as the same
may be amended, supplemented or otherwise modified from time to time.

         "Private Loan Guarantor" means TERI and such other third-party
guarantors (or insurers) which are approved by the Agent and the Lenders in
writing.

         "Pro Rata Share" means, with respect to a Committed Lender, a fraction
(expressed as a percentage) computed by dividing such Committed Lender's
Commitment by the aggregate Commitments of all Committed Lenders.

                                       20

<PAGE>

         "Product Information" has the meaning set forth in Section 13.13(a).

         "Program Fee Letter" has the meaning set forth in Section 4.01.

         "Program Limit" means $500,000,000.

         "Program Manual" means the Credit and Collection Policy for each
program relating to the provision of Private Loans as approved in writing by the
Agent.

         "Program Support Agreement" means and includes any agreement entered
into by any Program Support Provider providing for the issuance of one or more
letters of credit for the account of a Conduit Lender, the issuance of one or
more surety bonds for which a Conduit Lender is obligated to reimburse the
applicable Program Support Provider for any drawings thereunder, the sale by a
Conduit Lender to any Program Support Provider of Advances (or portions thereof)
and/or the making of loans and/or other extensions of credit to a Conduit Lender
in connection with such Conduit Lender's securitization program, together with
any letter of credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the Agent).

         "Program Support Provider" means and includes any Person (other than
any customer of a Conduit Lender) now or hereafter extending credit or having a
commitment to extend credit to or for the account of, or to make purchases from,
a Conduit Lender or issuing a letter of credit, surety bond, guarantee or other
instrument to support any obligations arising under or in connection with the
Conduit Lender's securitization program.

         "Promissory Note Rate" means, for any Settlement Period, the per annum
rate equal to the weighted average of the per annum rates paid or payable by the
Conduit Lenders from time to time as interest on or otherwise (by means of
interest rate hedges or otherwise) in respect of the Promissory Notes that are
allocated, in whole or in part, by the Agent (on behalf of the Conduit Lenders)
to fund or maintain the Conduit Lenders' Advances during such Settlement Period,
as determined by the Agent (on behalf of the Conduit Lenders) and reported to
the Issuer and the Master Servicer, which rates shall reflect and give effect to
the commissions of placement agents and dealers in respect of Promissory Notes,
to the extent such commissions are allocated, in whole or in part, to such
Promissory Notes by the Agent (on behalf of the Conduit Lenders); provided,
however, that if any component of such rate is a discount rate, in calculating
the "Promissory Note Rate" for such Settlement Period, the Agent shall for such
component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum; provided, further, that the
Promissory Note Rate with respect to Advances funded by Participants shall be
the same rate as in effect from time to time on Advances or portions thereof
that are not funded by a Participant; provided, further, that if all of the
Advances maintained by the Conduit Lenders are funded by Participants, then the
Promissory Note Rate shall be the applicable Conduit Lender's pool funding rate
in effect from time to time for its largest size pool of transactions which
settles with a frequency corresponding to the Settlement Period.

         "Promissory Notes" means, collectively, (i) promissory notes issued by
the Conduit Lenders and (ii) participations sold by the Conduit Lenders pursuant
to Section 10.01(g);

                                       21

<PAGE>

provided that the term "Promissory Notes" shall not include the interests sold
by the Conduit Lenders under a Program Support Agreement.

         "Proprietary Loan" means except as otherwise approved as such in
writing by the Agent and the Lenders, a FFELP Loan, the borrower of which is
attending an accredited institution, which institution issues degrees after less
than or equal to two years and other than a four year degree granting
institution; provided, however, that Student Loans to students attending DeVry
Institute and The University of Phoenix shall not constitute Proprietary Loans.

         "Public Health Service Act" means the Public Health Services Act of
1975, as amended or supplemented from time to time, or any successor federal
act, together with any rules, regulations and interpretations promulgated
thereunder.

         "Purchase and Sale Agreement" means (i) each Purchase and Sale
Agreement or other agreement for the purchase and sale of Student Loans listed
on Appendix D-1; (ii) any agreement for the purchase and sale of Student Loans
entered into with an Approved School Lender in the form attached as Appendix
D-2; and (iii) each loan purchase agreement in such form which is approved by
the Agent and the Lenders in writing prior to the execution thereof together
with such opinions, UCC financing statements and any other documents as the
Agent or the Lenders may require, in either case as the same may be amended,
supplemented, or otherwise modified from time to time with the prior written
consent of the Agent and the Lenders.

         "Purchase Termination Event" means the occurrence of any of the
following events, to the extent that the Issuer has actual knowledge or has been
given written notice of such event: (a) a Material Adverse Change in the
condition of such Originator has occurred and is continuing; (b) an Event of
Bankruptcy has occurred with respect to such Originator; (c) such Originator
shall fail to pay, or shall default in the payment of, any principal or premium
or interest on any Indebtedness beyond any applicable grace period, or such
Originator shall breach or default with respect to any other term of any
evidence of any Indebtedness, or of any loan agreement, mortgage, indenture or
other agreement relating thereto, if such failure, default or breach continues
beyond any applicable grace period, if the effect of such failure, default or
breach (i) is to cause the holder or holders of that Indebtedness (or a trustee
on behalf of such holder or holders) to cause that Indebtedness to become or be
declared due prior to its stated maturity or (ii) would permit the holder of
such Indebtedness to accelerate the maturity of such Indebtedness and if the
amount of the Indebtedness involved in all such failures, defaults and breaches
is greater than $100,000; (d) one or more judgments for the payment of money in
an aggregate amount in excess of $100,000 shall be rendered against such
Originator and the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively stayed or a
satisfactory bond against such judgment shall not have been posted, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of such Originator to enforce any such judgment and a bond shall not have
been posted; or (e) a "Termination Date" shall occur under any Purchase and Sale
Agreement.

         "Qualified Institution" means Citibank and, with respect to the
Collection Account and the Reserve Account, any bank or trust company which has
a long-term unsecured debt rating of at least "A2" by Moody's and at least "A"
by S&P.

                                       22

<PAGE>

         "Ratings Agencies" means Moody's and S&P.

         "Reassignment" has the meaning set forth in Section 6.02.

         "Reassignment Amount" has the meaning set forth in Section 6.02.

         "Reduced Rate Program" means the program that provides borrowers of
FFELP Loans an interest rate that is up to 2.0% less than the maximum interest
rate specified under the Higher Education Act, effective after 48 consecutive
on-time payments have been received and posted by the applicable Sub-Servicer or
that provides borrowers of Stafford Loans an interest rate that is up to .25%
less than the maximum interest rate specified under the Higher Education Act
upon agreement by the borrower to have his or her payments automatically
deducted from his or her checking account, or such other terms as approved by
the Agent and Lenders in writing.

         "Reference Bank" means Citibank.

         "Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.

         "Regulatory Change" means, relative to any Affected Party:

               (a)  any change after the date of this Agreement in (or the
         adoption implementation, change in phase-in or commencement of
         effectiveness of) any

                    (i)   United States federal or state law or foreign law
               applicable to such Affected Party;

                    (ii)  regulation, interpretation, directive, requirement or
               request (whether or not having the force of law) applicable to
               such Affected Party of (A) any court, government authority
               charged with the interpretation or administration of any law
               referred to in clause (a)(i) or of (B) any fiscal, monetary or
               other authority having jurisdiction over such Affected Party; or

                    (iii) generally accepted accounting principles or regulatory
               accounting principles applicable to such Affected Party and
               affecting the application to such Affected Party of any law,
               regulation, interpretation, directive, requirement or request
               referred to in clause (a)(i) or (a)(ii) above; or

               (b)  any change after the date of this Agreement in the
         application to such Affected Party of any existing law, regulation,
         interpretation, directive, requirement, request or accounting
         principles referred to in clause (a)(i), (a)(ii) or (a)(iii) above.

         "Rehab Loan" means a Federal Consolidation Loan that consolidates one
or more Defaulted Student Loans.

                                       23

<PAGE>

         "Reimbursement Contract" means the agreements between the FFELP
Guarantors and the Department providing for the payment by the Secretary of
amounts authorized to be paid pursuant to the Higher Education Act, including,
without limitation, reimbursement of amounts paid or payable upon Defaulted
Student Loans that are FFELP Loans, Interest Subsidy Payments and Special
Allowance Payments to holders of Student Loans that are FFELP Loans.

         "Reimbursement Obligation" has the meaning set forth in Section
1.06(b).

         "Reimbursement Payment" means any payment by the Secretary pursuant to
a Reimbursement Contract in respect of a Student Loan that is an FFELP Loan.

         "Related Security" means, with respect to any Pledged Student Loan: (a)
all of Issuer's right, title and interest in and to the Student Loan Note(s) and
all other agreements that relate to such Pledged Student Loan; (b) all of
Issuer's right, title and interest under any Guarantee Agreement related
thereto; (c) all security interests or liens and property subject thereto from
time to time purporting to secure payment of such Pledged Student Loan, whether
pursuant to the Student Loan Note related to such Pledged Student Loan or
otherwise; (d) all UCC financing statements covering any collateral securing
payment of such Pledged Student Loan; (e) all other guarantees and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Pledged Student Loan; and (f) all rights of Issuer with
respect to such Pledged Student Loan under the related Servicing Agreement.

         "Repayment" means the period of time during which a borrower under a
Student Loan is required to make installment payments to repay the aggregate
principal amount plus accrued interest of all amounts borrowed by virtue of the
Student Loan Note(s) executed by such borrower.

         "Required Lenders" means at any time Committed Lenders then holding at
least 66-2/3% of the outstanding Advances funded by Committed Lenders; provided
that if no outstanding Advances are funded by Committed Lenders then "Required
Lenders" means at such time Committed Lenders then holding at least 66 2/3% of
the Commitments.

         "Reserve Account" means the account established at a Qualified
Institution, in the name of the Indenture Trustee, for the benefit of the
Lenders, which account has been designated as the Reserve Account, and any other
account designated as the Reserve Account by the Indenture Trustee or the Agent.

         "Reserve Account Minimum Balance" means at any time, an amount equal to
0.10% of the Program Limit.

         "Revolving Period" means the period commencing on the date hereof and
ending on the Termination Date.

         "Schedule of FFELP Premium Base Amounts" means a listing from time to
time, as approved by the Agent and the Lenders, of the premiums with respect to
FFELP Loans that Issuer is permitted to finance under the Agreement, as provided
by the Agent to the Issuer from time to time.

                                       24

<PAGE>

         "Schedule of HEAL Premium Base Amounts" means a listing from time to
time, as approved by the Agent and the Lenders, of the premiums with respect to
HEAL Loans that Issuer is permitted to finance under the Agreement, as provided
by the Agent to the Issuer from time to time.

         "Schedule of Pledged Student Loans" a listing of certain Student Loans
of Issuer delivered to and held by the Indenture Trustee (or set forth on the
Master Servicer's or any applicable Sub-Servicer's system) pursuant to Section
5.03 (which Schedule may be in the form of microfiche or computer file or other
medium acceptable to the Indenture Trustee), as from time to time amended,
supplemented, or modified.

         "Secretary" means the Secretary of the Department or an official or
employee of the Department acting for the Secretary under a delegation of
authority.

         "Secured Parties" means the Lenders, the Agent, the Letter of Credit
Provider, the Indemnified Parties and the Affected Parties, as their respective
interests appear under the Agreement.

         "Secured Party Representatives" has the meaning set forth in Section
13.13(b).

         "Securities Intermediary" means Fifth Third Bank in its capacity as
securities intermediary with respect to the Accounts.

         "Servicer Event of Default" means, with respect to the Master Servicer
or any Sub-Servicer: (i) the Master Servicer or such Sub-Servicer shall fail in
any material respect to perform or observe any term, covenant or agreement that
is an obligation of the Master Servicer or such Sub-Servicer under a Servicing
Agreement or any Transaction Document (other than as referred to in clause (ii)
below) and such failure continues unremedied for thirty days after (a) written
notice thereof shall have been given by the Agent to Issuer or the Master
Servicer or (b) the Master Servicer or such Sub-Servicer has actual knowledge
thereof; (ii) the Master Servicer or such Sub-Servicer shall fail to make any
payment or deposit to be made by it under a Servicing Agreement or any
Transaction Document when due and such failure shall remain unremedied for three
Business Days; (iii) any representation or warranty made or deemed to be made by
the Master Servicer or such Sub-Servicer (or any of its officers) under or in
connection with a Servicing Agreement or any Transaction Document or any
information or report delivered pursuant to a Servicing Agreement or any
Transaction Document shall prove to have been false or incorrect in any material
respect when made and such condition shall remain unremedied for 30 days after
(a) written notice thereof shall have been given by the Agent or to the Master
Servicer or (b) the Master Servicer or such Sub-Servicer has actual knowledge
thereof; (iv) an Event of Bankruptcy shall have occurred with respect to the
Master Servicer or such Sub-Servicer; (v) (a) any litigation (including, without
limitation, derivative actions), arbitration proceedings or governmental
proceedings not disclosed in writing by Issuer to the Agent prior to the
execution and delivery of the Indenture is pending against the Master Servicer
or such Sub-Servicer or any of its Affiliates at the time of execution hereof,
or (b) any material development not so disclosed has occurred in any such
litigation or proceedings so disclosed, which in the case of clause (a) or (b),
in the opinion of the Agent or the Lenders, has a reasonable likelihood of
having a Servicer Material Adverse Effect with respect to the Master Servicer or
such Sub-

                                       25

<PAGE>

         Servicer; (vi) there shall exist any event or occurrence that has a
reasonable likelihood of causing a Servicer Material Adverse Effect; and (vii)
the net claims reject rate due to Sub-Servicer error with respect to such
Sub-Servicer for any quarterly period shall exceed an annualized rate of 3.0%.

         "Servicer Material Adverse Effect" means with respect to the Master
Servicer or any Sub-Servicer and any event or circumstance, a material adverse
effect on:

               (i)    the business, assets, financial condition, prospects or
         operations of the Master Servicer or such Sub-Servicer;

               (ii)   the ability of the Master Servicer or such Sub-Servicer to
         perform its obligations under any Transaction Document to which it is a
         party;

               (iii)  the collectibility or enforceability of a material amount
         of the Pledged Student Loans, or any Guarantee Agreement or
         Reimbursement Contract with respect to a material amount of the Pledged
         Student Loans; or

               (iv)   the status, existence, perfection, priority or
         enforceability of the Indenture Trustee's security interest in the
         Collateral.

         "Servicer Repurchase Amount" has the meaning set forth in Section 12.05
of the Agreement.

         "Servicers' Fees" means fees payable to the Master Servicer and the
Sub-Servicers in an aggregate amount equal to the product of (i) the outstanding
average Principal Balance of all Pledged Student Loans during the preceding
Settlement Period and (ii) 0.75% per annum.

         "Servicing Agreement" means each servicing agreement entered into
between the Master Servicer and the applicable Sub-Servicer with respect to the
servicing of Student Loans, as the same may be amended, supplemented or
otherwise modified from time to time.

         "Settlement Date" means the date which is the second Business Day after
the end of a Settlement Period or, with respect to Advances bearing interest
with reference to the Eurodollar Rate or the Alternate Base Rate, the last day
of the Settlement Period.

         "Settlement Period" means: (i) initially the period commencing on the
date hereof pursuant to Section 1.02 of the Agreement (or in the case of any
fees payable hereunder, commencing on the date hereof) and ending on the last
day of the same calendar month, and (ii) thereafter, each monthly period ending
on the last day of the calendar month; provided, however, that during the
Liquidation Period the Settlement Period may, at the determination of the Agent,
be a period of one Business Day.

         "SLS Loan" means a loan made to an Obligor designated as such that is
made under the Supplemental Loans for Students Program in accordance with the
Higher Education Act.

         "Solvent" means, with respect to any Person at any time, a condition
under which:

                                       26

<PAGE>

               (i)    the fair value and present fair saleable value of such
         Person's total assets is, on the date of determination, greater than
         such Person's total liabilities (including contingent and unliquidated
         liabilities) at such time;

               (ii)   the fair value and present fair saleable value of such
         Person's assets is greater than the amount that will be required to pay
         such Person's probable liability on its existing debts as they become
         absolute and matured ("debts", for this purpose, includes all legal
         liabilities, whether matured or unmatured, liquidated or unliquidated,
         absolute, fixed, or contingent);

               (iii)  such Person is and shall continue to be able to pay all of
         its liabilities as such liabilities mature; and

               (iv)   such Person does not have unreasonably small capital with
         which to engage in its current and in its anticipated business.

For purposes of this definition:

               (A)    the amount of a Person's contingent or unliquidated
         liabilities at any time shall be that amount which, in light of all the
         facts and circumstances then existing, represents the amount which can
         reasonably be expected to become an actual or matured liability;

               (B)    the "fair value" of an asset shall be the amount which may
         be realized within a reasonable time either through collection or sale
         of such asset at its regular market value;

               (C)    the "regular market value" of an asset shall be the amount
         which a capable and diligent business person could obtain for such
         asset from an interested buyer who is willing to purchase such asset
         under ordinary selling conditions; and

               (D)    the "present fair saleable value" of an asset means the
         amount which can be obtained if such asset is sold with reasonable
         promptness in an arms length transaction in an existing and not
         theoretical market.

         "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.

         "Special Allowance Payments" means payments, designated as such,
consisting of effective interest subsidies by the Department in respect of
Student Loans that are FFELP Loans to Issuer in accordance with the Higher
Education Act.

         "Stafford Loan" means a loan made to an Obligor authorized under
Sections 427 and 428 of the Higher Education Act.

         "Student Loan" means an FFELP Loan, a HEAL Loan or a Private Loan which
was (a) originated by an Originator under an approved lender identification
number issued by the Department; (b) if a Private Loan, originated by a national
banking association approved in writing in advance by the Agent and the Lenders
in their sole discretion; or (c) if consented to in

                                       27

<PAGE>

writing in advance by the Agent and the Lenders in their sole discretion,
purchased by an Originator under a purchase and sale agreement and transferred
to the Issuer under the Purchase and Sale Agreement.

         "Student Loan Notes" means the promissory notes (whether in written or
electronic form) or other writings or records evidencing the Student Loans.

         "Sub-Servicer" means Great Lakes Educational Loan Services, Inc.,
Missouri Higher Education Loan Authority, Pennsylvania Higher Education
Assistance Agency, Student Loan Marketing Association (Sallie Mae), ACS
Education Services, Inc., LoanStar Systems, Inc. and such other sub-servicers as
are approved from time to time by the Agent and the Lenders in writing.

         "TERI" means The Education Resources Institute, a private, non-profit
Massachusetts corporation.

         "Termination Date" means the earlier of (i) the Business Day which
Issuer so designates by notice to the Agent at least 60 days in advance; and
(ii) the Facility Termination Date.

         "Termination Fee" with respect to any Advance means the amount, if any,
by which (i) the additional interest that would have accrued on such Advance
during its current Settlement Period if the outstanding principal amount of such
Advance had not been repaid prior to the Settlement Date for such Settlement
Period exceeds (ii) the income, if any, that the applicable Lender will receive
by investing the proceeds for such principal repayment in investments that are
permissible for such Lender and that will mature on such Settlement Date.

         "Third Party Originators" means each Approved School Lender, those
Third-Party Originators set forth on Appendix B hereto and such other
originators as may be approved by the Agent and the Lenders from time to time in
writing.

         "Total Outstanding Advances" at any time means the sum of (a) the
aggregate amount disbursed to the Issuer by the Lenders in connection with the
funding of any Advance (or portion thereof) pursuant to the Agreement, less (b)
any payments made by the Issuer and actually received by or on behalf of the
Lenders and applied to reduce the principal balance of any Advance pursuant to
Section 2.03 of the Agreement (which have not been rescinded or otherwise
returned for any reason), plus (c) all accrued and unpaid interest with respect
to the Advances which is "capitalized" by a Conduit Lender or the Agent on its
behalf in connection with such Conduit Lender's commercial paper program;
provided, however, that if the Total Outstanding Advances shall have been
reduced, pursuant to clause (b) above, by any distribution, and thereafter all
or a portion of such distribution is rescinded or must otherwise be returned for
any reason, such Total Outstanding Advances shall be increased by the amount of
such rescinded or returned distribution as though it had not been made.

         "Transaction Documents" means this Agreement, the Note, the Program Fee
Letter, the Indenture Trustee Fee Letter, the Eligible Lender Trustee Fee
Letter, the Servicing Agreements, the Guarantee Agreements, the Reimbursement
Contract, the Purchase and Sale Agreements, the Demand Note, all Program Support
Agreements, the Premium Letter of Credit, the Account

                                       28

<PAGE>

Control Agreement and the other documents to be executed and delivered in
connection herewith.

         "UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.

         "Unamortized Premium" means the remaining amount of the Financed
Premium Amount at any time pursuant to Premium Amortization.

         "Unanticipated Changes" with respect to the FFELP Program or the HEAL
Program, means any material change to the FFELP Program or HEAL Program, as
applicable.

         "Unapplied Cash" means any collections with respect to Pledged Student
Loans that have been received by the Master Servicer or applicable Sub-Servicer
but not yet applied to reduce the outstanding Principal Balance of such Pledged
Student Loan.

         "Unguaranteed Amount" means, as of any date, (a) with respect to any
FFELP Loan, that portion, if any, of the Principal Balance of such Pledged
Student Loan that is not contractually guaranteed pursuant to the related
Guarantee Agreement as of the effective date of such Guarantee Agreement (or as
of the date of any subsequent amendments thereto), (b) with respect to any HEAL
Loan, the Non-Payment Amount and (c) with respect to any Private Loan, the
Defaulted Amount.

         "Unmatured Event of Termination" means any event which, with the giving
of notice or lapse of time, or both, would become an Event of Termination.

         "Unsubsidized Loans" means Stafford Loans that are not subsidized by
the Department as set forth in Section 428H of the Higher Education Act (20
U.S.C. ss.1078-8).

         "Weighted Average Financed Premium" with respect to any group of
Student Loans means the weighted average of the Financed Premium Amounts for
such Student Loans.

         B.   Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles.
All terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.

         C.   Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".

                                       29

<PAGE>

                                   APPENDIX B

                             AFFILIATED ORIGINATORS

                            Student Loan Xpress, Inc.
                        Education Lending Services, Inc.

                             THIRD-PARTY ORIGINATORS

                              Charter One Bank, FSB
                        Education Investment Company, LLC
                     New York College of Podiatric Medicine

<PAGE>

                                   APPENDIX C

                                   GUARANTORS

Massachusetts Higher Education Assistance Corporation
Great Lakes Higher Education Guaranty Corporation
Pennsylvania Higher Education Assistance Agency
United States Aid Funds
American Student Assistance
Bureau of Student Financial Assistance
Connecticut Student Loan Foundation
Colorado Student Loan Program
Education Assistance Corporation
Education Assistance Service Company, Inc.
Educational Credit Management Corporation
California Student Aid Commission
Finance Authority of Maine
Georgia Higher Education Assistance Corporation
Illinois Student Assistance Commission
Kentucky Higher Education Assistance Authority
Louisiana Student Financial Assistance Commission
Michigan Guaranty Agency/Michigan Higher Education Assistance Authority
Montana Guaranteed Student Loan Program
Missouri Student Loan Program/Missouri Coordinating Board for Higher Education
Northwest Education Loan Assistance
NELNET Loan Services, Inc.
New Jersey Higher Education Student Assistance Authority
New Mexico Student Loan Guaranty Corporation
Nebraska Student Loan Program
New York State Higher Education Services Corporation
Oklahoma State Regents for Higher Education
Oregon State Scholarship Commission
Oregon Student Assistance Commission
Rhode Island Higher Education Assistance Agency
Student Loan Guaranty Foundation of Arkansas
Student Loans of North Dakota
Texas Guaranteed Student Loan Corporation
Tennessee Higher Education Commission
Tennessee Student Assistance Corporation
The Education Resources Institute, Inc. (TERI)

<PAGE>

                                  APPENDIX D-1

                          Purchase and Sale Agreements

<PAGE>

                                  APPENDIX D-2

                    Form of Approved School Lender Documents

<PAGE>

                                Schedule 6.0l(k)

                List of Offices of Issuer where Records Are Kept

12760 High Bluff Drive
Suite 210A
San Diego, CA  92130

<PAGE>

                                  Exhibit 1.02

                            Form of Borrowing Notice

<PAGE>

                                                                    Exhibit 1.02

                            Form of Borrowing Notice

                                     [DATE ]

Citibank, N.A.,
as Agent

[_____________]

Attention: [____________]

Ladies and Gentlemen:

         All capitalized terms used but not otherwise defined herein are defined
in the Indenture dated as of [_______ __, 2002] (as amended, supplemented or
modified from time to time, the "Indenture") among the undersigned,
[____________], as Conduit Lenders, the financial institutions from time to time
party thereto as Committed Lenders, Citicorp North America, Inc., as Agent,
Education Lending Services, Inc., as Master Servicer, and Fifth Third Bank, as
Indenture Trustee and as Eligible Lender Trustee, and have the same meanings
when used herein.

         The undersigned refers to the Indenture and hereby gives you notice,
irrevocably, pursuant to Section 1.02 of the Indenture that the undersigned
hereby requests a Borrowing (the "Requested Borrowing") under the Indenture, and
in that connection sets forth below the information relating to the Requested
Borrowing as required by Section 1.02(a) of the Indenture:

               (i)    The Borrowing Date of the Requested Borrowing is [ Date ];

               (ii)   The principal amount of the Requested Borrowing is [$ ];
                      and

               (iii)  The Aggregate Investment after giving effect to such
                      borrowing shall be [$ ].

         The proceeds of the Requested Borrowing will be used to purchase or
otherwise fund Student Loans on the Borrowing Date. The undersigned hereby
certifies as of the date hereof, and as of the Borrowing Date of the Requested
Borrowing, as follows:

               (a)    the representations and warranties contained in Section
                      6.01 of the Indenture are correct after giving effect to
                      the Requested Borrowing and to the application of the
                      Proceeds therefrom, as through made on and as of such
                      dates;

               (b)    no event has occurred and is continuing, or would result
                      from such Requested Borrowing or from the application of
                      the proceeds therefrom, that constitutes an Event of
                      Termination or an Unmatured Event of Termination; and

<PAGE>

               (c)    the original Student Loan Notes, if any, that will be
                      acquired or otherwise financed with the proceeds of the
                      Requested Borrowing have been delivered to the
                      Sub-Servicers of an approved bailee.

                            [signature page follows]

<PAGE>

IN WITNESS WHEREOF, we have caused this Borrowing Notice to be executed and
delivered by the undersigned on the date first written above.

Very truly yours,

EDUCATION FUNDING RESOURCES, LLC

By:___________________________________

Name:
Title:

<PAGE>

                                  Exhibit 1.04

                          Form of Release Certification

<PAGE>

                                                                    EXHIBIT 1.04

                    FORM OF REQUEST FOR RELEASE OF COLLATERAL

                                     [Date]

Fifth Third Bank
as Indenture Trustee
[____________]

Citicorp North America, Inc.,
as Agent
[____________]

Ladies and Gentlemen:

         Reference is hereby made to the Indenture dated as of [_______ __,
2002] (as amended through the date hereof, the "Indenture"), among Education
Funding Resources, LLC, as Issuer (the Issuer"), [____________], as Conduit
Lenders and the financial institutions from time to time party thereto as
Committed Lenders (together, the "Lenders"), Citicorp North America, Inc., as
Agent (the "Agent"), Fifth Third Bank, as Indenture Trustee (in such capacity,
the "Indenture Trustee") and as Eligible Lender Trustee (in such capacity, the
"Eligible Lender Trustee"), and Education Lending Services, Inc. as Master
Servicer. Capitalized terms used but not otherwise defined herein, shall have
the meaning assigned to such terms in the Indenture.

         This letter constitutes a Notice of Release pursuant to Section 1.04 of
the Indenture. The Issuer desires to sell or otherwise dispose of the Pledged
Student Loans identified on Exhibit A attached hereto in connection with a
[sale/securitization/other disposition] and hereby requests that the Indenture
Trustee release its security interest in such Pledged Student Loans.

         The Issuer hereby represents and warrants as of the date hereof that
before and after giving effect to the release requested herein:

               (i)    there shall not exist any Event of Termination or
                      Unmatured Event of Termination;

               (ii)   the Coverage Condition is met (as demonstrated in the pro
                      forma Coverage Condition Certificate attached hereto as
                      Exhibit B); and

               (iii)  the Lenders are not materially and adversely affected by
                      the selection made by the Issuer of the Pledged Student
                      Loans in comparison to (i) lenders whose loans to the
                      Issuer are secured by Student Loans not pledged hereunder
                      or (ii) purchasers of Student Loans from the Issuer
                      (through the Eligible Lender Trustee) in connection with
                      any asset securitization occurring during the Revolving
                      Period.

<PAGE>

         IN WITNESS WHEREOF, the undersigned has caused this Notice of Release
to be executed by its duly authorized officer as of the date first above
written.

                                            [______________________]

                                            By:_______________________________
                                            Name Printed:_____________________
                                            Title:____________________________

<PAGE>

                                  Exhibit 2.01

                                  Form of Note

<PAGE>

                                                                    EXHIBIT 2.01

                                  FORM OF NOTE

$500,000,000                                                  [________], 20[__]

         FOR VALUE RECEIVED, the undersigned, EDUCATION FUNDING RESOURCES, LLC
(the "Issuer"), hereby promises to pay to the order of CITICORP NORTH AMERICA,
INC., as Agent for the Lenders described below on or before the Maturity Date
(as defined in the Indenture referred to below), the principal amount of FIVE
HUNDRED MILLION DOLLARS AND 00/100 ($500,000,000), or, if less, the aggregate
unpaid principal amount of all of the Advances (as defined in the Indenture,
dated as of [_______ __, 2002], among the Issuer, the Lenders party thereto,
Citicorp North America, Inc., as Agent, Fifth Third Bank, as Indenture Trustee
and as Eligible Lender Trustee, and Education Lending Services, Inc. as Master
Servicer (as the same may be amended, modified or supplemented from time to
time, called the "Indenture")) made by the Lenders to the Issuer pursuant to the
Indenture (as shown in the records of the Agent or, at the Agent's option, on
the schedule attached hereto and any continuation thereof). Each Advance shall
be payable from time to time in amounts as provided in the Indenture, and in any
event shall be payable on the Maturity Date. Unless otherwise defined,
capitalized terms used herein have the meanings provided in the Indenture.

         The undersigned also promises to pay interest on the unpaid principal
amount of each Advance evidenced by this Note from the date of such Advance
until such Advance is paid in full, at the rates and payable on the dates
specified in the Indenture.

         This Note evidences indebtedness incurred as Advances under, and is
entitled to the benefits of, the Indenture, to which Indenture reference is
hereby made for a statement of its terms and conditions, including those under
which the maturity of this Note may be accelerated. Upon the occurrence of an
Event of Termination as specified in the Indenture, the principal balance hereof
and the interest accrued hereon may be declared to be forthwith due and payable.

         Notwithstanding any provision of this Note, the obligations of the
Issuer hereunder are limited obligations of the Issuer payable solely from the
Collateral, and, subject to Section 13.12 of the Indenture, neither the Issuer
nor any of its officers, directors, employees or stockholders shall be
individually or personally liable under this Note for such obligations.

         This Note is secured by and entitled to the benefits specified in
Section 1.03 of the Indenture, and reference is hereby made to such Section 1.03
for a description of the nature and extent of the collateral and the rights of
the parties to and beneficiaries of the Indenture in respect of such collateral.

         In addition to and not in limitation of the foregoing and the
provisions of the Indenture, the undersigned further agrees, subject only to any
limitation imposed by applicable law, to pay on demand all expenses, including
reasonable attorneys' fees and legal expenses, incurred by the holder of this
Note in endeavoring to collect any amounts payable hereunder which are not paid
when due, whether by acceleration or otherwise.

<PAGE>

         All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.

                          (continued on following page)

<PAGE>

         This Note shall be governed by and construed in accordance with the
internal laws of the State of New York.

                                      EDUCATION FUNDING RESOURCES, LLC

                                      By:_______________________________________
                                           Name:
                                           Title:

<PAGE>

                                 Exhibit 5.02(d)

                     Form of Coverage Condition Certificate

<PAGE>

                                 Exhibit 7.02(c)

                             Form of Monthly Report

<PAGE>

                                                                 Exhibit 7.02(c)

                             FORM OF MONTHLY REPORT

Citicorp North America, Inc., as Agent
[____________]

Attn: [____________]

Ladies and Gentlemen;

         All capitalized terms used but not otherwise defined herein are defined
in the Indenture dated as of [_______ __, 2002] among the undersigned,
[____________], as Conduit Lenders, the financial institutions from time to time
party thereto as Committed Lenders, Citicorp North America, Inc. as Agent, Fifth
Third Bank as Indenture Trustee and as Eligible Lender Trustee, and Education
Lending Services, Inc. as Master Servicer, and have the same meanings when used
herein.

The undersigned hereby certifies that it is in full compliance with Section
8.01, no Servicer Event of Default has occurred and that the information
attached hereto as the Monthly Coverage Condition Certificate and Compliance,
Servicer Portfolio report and the Guarantor and Servicer Reporting Requirements
is correct as of the last day of [ ]:

The undersigned hereby represents and warrants that this Monthly Report is a
true and accurate accounting with respect to the Indenture dated as of [_______
__, 2002].

IN WITNESS WHEREOF, we have caused this Form of Monthly Report to be executed
and delivered by the undersigned on the date as written below.

Very truly yours,

EDUCATION FUNDING RESOURCES, LLC    DATE:_________________

By: ____________________________________
Name:
Title:

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