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                                                                  EXHIBIT 10.23

                             SMARTDISK CORPORATION

                         REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made as of the
24th day of December, 2002, by and among SmartDisk Corporation, a Delaware
corporation (the "COMPANY"), and each of the investors (the "INVESTORS") listed
on Exhibit A hereto.

                                R E C I T A L S

         A. The Company and the Investors have entered into a Series A
Redeemable Convertible Preferred Stock Purchase Agreement dated December 9,
2002, as amended on December 24, 2002 (the "Purchase Agreement").

         B. Under the Purchase Agreement, Investors have agreed to purchase and
the Company has agreed to sell 2,552,364.8 shares of the Company's Series A
Redeemable Convertible Preferred Stock (the "Preferred Shares").

         C. The Purchase Agreement contains as a condition to the Investors'
obligations under the Purchase Agreement that the Company and the Investors
enter into this Agreement in order to provide the Investors with certain rights
to register shares of the Company's Common Stock.

         D. The Company desires to induce the Investors to purchase the
Preferred Shares pursuant to the Purchase Agreement by agreeing to the terms
and conditions set forth herein.

         NOW THEREFORE, in reliance on the foregoing recitals and in
consideration of the mutual covenants contained herein, and in the Purchase
Agreement the parties hereto agree as follows:

                               A G R E E M E N T

         1. REGISTRATION RIGHTS. The Company and the Investors covenant and
agree as follows:

                  1.1 DEFINITIONS. For purposes of this Section 1:

                           1.1.1 The terms "Register," "Registered," and
"Registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "ACT"), and the declaration or ordering of
effectiveness of such registration statement or document.

                           1.1.2 The term "Registrable Securities" means (i)
any shares of Company $0.001 par value Common Stock ("Common Stock") acquired
by a Holder upon conversion of the Preferred Shares, (ii) any shares of Common
Stock acquired by a Holder pursuant to a rights offering conducted by the
Company at any time on or before December 18, 2004 (the "Rights Shares"), and
(iii) any other shares of Common Stock or other securities of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with
respect to, or in exchange for or in replacement of, the Preferred Shares, the
Common Stock into which the Preferred Shares are convertible, or the Rights
Shares, provided that the foregoing definition shall exclude in all cases any
Registrable Securities sold by a person in a transaction in which his or her
rights under this Agreement are not assigned. Notwithstanding the foregoing,
Common Stock or other securities shall only be treated as Registrable
Securities if and so long as they have not been (A) sold to or through a broker
or dealer or underwriter in a public distribution or a public securities
transaction, or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Act under Section 4(1) thereof so that
all transfer restrictions, and restrictive legends with respect thereto, if
any, are removed upon the consummation of such sale.

                           1.1.3 The number of shares of "Registrable
Securities Then Outstanding" shall be determined by the number of shares of
Common Stock outstanding which are Registrable Securities, plus the
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number of shares of Common Stock issuable pursuant to conversion of outstanding
Preferred Shares, plus the number of shares of Common Stock issuable pursuant
to any other convertible securities that are Registrable Securities.

                           1.1.4 The term "Holder" means any person owning or
having the right to acquire, Registrable Securities or any assignee thereof in
accordance with Section 1.13 hereof.

                           1.1.5 The term "Form S-3" means such form under the
Act as in effect on the date hereof or any successor form under the Act.

                           1.1.6 The term "SEC" means the Securities and
Exchange Commission.

                           1.1.7 The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.

                  1.2      REQUEST FOR REGISTRATION.

                           1.2.1 If the Company shall receive at any time after
the earliest of (a) June 24, 2003, (b) such time as it has provided the
Investors with written notice of abandonment of the Rights Offering, as defined
in the Purchase Agreement, and a written commitment not to conduct a rights
offering to its shareholders for two years from the date of the notice without
the written consent of a majority in interest of the Investors, or (c) such
time as the Rights Offering has been conducted and closed, a written request
from the Holders of a majority of the Registrable Securities Then Outstanding
that the Company file a registration statement under the Act covering the
registration of at least twenty percent (20%) of the Registrable Securities
Then Outstanding (or a lesser percent if the anticipated aggregate offering
price, net of underwriting discounts and commissions, would exceed Ten Million
Dollars ($10,000,000)), then the Company shall, within ten (10) days of the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations of subsection 1.2.2, use its best efforts to effect
as soon as practicable, and in any event within 60 days of the receipt of such
request, the registration under the Act of all Registrable Securities which the
Holders request to be registered within twenty (20) days of receipt of such
notice mailed by the Company in accordance with Section 2.5.

                           1.2.2 If the Holders initiating the registration
request hereunder ("Initiating Holders") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 1.2
and the Company shall include such information in the written notice referred
to in subsection 1.2.1. The underwriter will be selected by a majority in
interest of the Initiating Holders and shall be reasonably acceptable to the
Company. In such event, the right of any Holder to include his Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in subsection
1.4.5 enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder, including all
Registrable Securities issuable upon conversion of Preferred Shares or other
convertible securities; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting shall not be reduced
unless all other securities are first entirely excluded from the underwriting.

                           1.2.3 Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting a registration statement pursuant to this
Section 1.2 a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the Company, it would
be seriously detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer
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the filing of such registration statement, the Company shall have the right to
defer such filing for a period of not more than seventy-five (75) days after
receipt of the request of the Initiating Holders; provided, however, that the
Company may not utilize this right more than once in any twelve (12)-month
period.

                           1.2.4 In addition, the Company shall not be
obligated to effect, or to take any action to effect, any registration pursuant
to this Section 1.2:

                           1.2.4.1 After the Company has effected one (1)
registration pursuant to this Section 1.2 and such registration has been
declared or ordered effective; or

                           1.2.4.2 During the period starting with the date
sixty (60) days prior to the Company's good faith estimate of the date of filing
of, and ending on a date one hundred eighty (180) days (or such lesser period as
officers, directors and greater than 5% stockholders of the Company shall be
contractually obligated to refrain from selling Company securities), after the
effective date of a registration subject to Section 1.3 hereof that is conducted
as a fully committed, underwritten registration; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective.

                  1.3 COMPANY REGISTRATION. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Holders)
any of its stock under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a transaction
covered by Rule 145 under the Act, a registration in which the only stock being
registered is Common Stock issuable upon conversion of debt securities which
are also being registered, a registered rights offering to all holders of
Company Common Stock, or any registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), the
Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
days after receipt of such notice mailed by the Company in accordance with
Section 2.5, the Company shall, subject to the provisions of Section 1.8, cause
to be registered under the Act all of the Registrable Securities that each such
Holder has requested to be registered.

                  1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:

                           1.4.1 Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to ninety (90)
days, such time period to be extended by the number of days (a) a stop order
shall be in effect with respect to the registration statement and (b) in the
period beginning on the date notice is given pursuant to Section 1.4.6 and
ending on the date a prospectus supplement is filed or a post-effective
amendment is declared effective, in each instance curing the misleading
statement or omission that was the subject of the notice.

                           1.4.2 Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act and the Exchange Act and the regulations thereunder
with respect to the disposition of all securities covered by such registration
statement for up to ninety (90) days.

                           1.4.3 Furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.

                           1.4.4 Use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
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                           1.4.5 In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering, including, without limitation, participating in investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Registrable Securities. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.

                           1.4.6 Notify each Holder of Registrable Securities
covered by such registration statement promptly at any time when a prospectus
relating thereto is required to be delivered under the Act of the happening of
any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and prepare
and file as soon as practicable (but in no event later than ten (10) business
days following notice of the occurrence of such event to each such Holder in
accordance with Section 2.5 hereof) with the SEC and promptly notify each such
Holder of the filing of, a supplement to such prospectus or an amendment to the
registration statement so that, as thereafter delivered to such Holders, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made and in the case of an amendment to the Registration Statement,
use reasonable best efforts to cause it to become effective as soon as possible

                           1.4.7 Cause all such Registrable Securities
registered pursuant hereto to be listed on each securities exchange on which
similar securities issued by the Company are then listed or are to be listed on
the Nasdaq SmallCap Market, if not listed on a securities exchange, if
eligible.

                           1.4.8 Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereto and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.

                           1.4.9 In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Common Stock included in such registration statement for
sale in any jurisdiction, the Company will promptly notify each Holder of
Registrable Securities covered by such registration statement of such order and
will use its best efforts to promptly obtain the withdrawal of such order; and

                           1.4.10 Use its best efforts to furnish, at the
request of any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Section 1, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters,
on the date that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of the counsel representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities.

                           1.4.11 Otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable but no later than fifteen
(15) months after the effective date of the registration statement, an earnings
statement covering a period of twelve (12) months beginning after the effective
date of the registration statement, in a manner which satisfies the provisions
of Section 11(a) of the Act.

                  1.5 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities
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held by it, and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of such Holder's Registrable
Securities. The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 of this Agreement if, as a
result of the application of the preceding sentence, the number of shares or
the anticipated aggregate offering price of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares or
the anticipated aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in subsection
1.2.1.

                  1.6 EXPENSES OF REQUESTED REGISTRATION. All expenses other
than underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one demand registration pursuant to Section 1.2, provided
further, however, that if at the time of such withdrawal, the Holders have
learned of a material adverse change in the condition, business, or prospects
of the Company from that known to the Holders at the time of their request and
have withdrawn the request with reasonable promptness following their learning
of such material adverse change, then the Holders shall not be required to pay
any of such expenses and shall retain their rights pursuant to Section 1.2.

                  1.7 EXPENSES OF COMPANY REGISTRATION. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as
provided in Section 1.13), including (without limitation) all registration,
filing, and qualification fees, printers' and accounting fees relating or
apportionable thereto and the reasonable fees and disbursements of one counsel
for the selling Holders, but excluding underwriting discounts and commissions
relating to Registrable Securities.

                  1.8 UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock,
the Company shall not be required under Section 1.3 to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters), and then only
in such quantity as the underwriters determine in their sole discretion will
not jeopardize the success of the offering by the Company. If the total amount
of securities, including Registrable Securities, requested by shareholders to
be included in such offering exceeds the amount of securities sold other than
by the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling shareholders according to
the total amount of securities entitled to be included therein owned by each
selling shareholder or in such other proportions as shall mutually be agreed to
by such selling shareholders) but in no event shall (i) the amount of
Registrable Securities of the selling Holders included in the offering be
reduced below thirty percent (30%) of the total amount of securities included
in such offering, or (ii) notwithstanding (i) above, any shares being sold by a
shareholder exercising a demand registration right similar to that granted in
Section 1.2 be excluded from such offering. For purposes of the preceding
parenthetical concerning apportionment, for any selling shareholder which is a
Holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "Selling
Shareholder," and any pro-rata reduction with respect to such "selling
shareholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Selling Shareholder," as defined in this sentence.

                  1.9 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
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                  1.10 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Section 1:

                           1.10.1 To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, any underwriter (as defined in
the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Act, the
Exchange Act or any state securities law; and the Company will pay to each such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this subsection 1.10.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to any Holder, underwriter or controlling person hereunder
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person, as
the case may be.

                           1.10.2 To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any losses,
claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this subsection 1.10.2, in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.10.2 shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this subsection
1.10.2 exceed the net proceeds from the offering received by such Holder,
except where a court has finally determined that the loss, claim, damage or
liability as to which indemnification is claimed was primarily caused by the
willful fraud of such Holder.

                           1.10.3 Promptly after receipt by an indemnified
party under this Section 1.10 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
1.10, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action,
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shall relieve such indemnifying party of any liability to the indemnified party
under this Section 1.10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.10.

                           1.10.4 If the indemnification provided for in this
Section 1.10 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations; provided, that, in no event shall any
contribution by a Holder under this subsection 1.10.4 exceed the net proceeds
from the offering received by such Holder, except where a court has finally
determined that the loss, claim, damage or liability in question was primarily
caused by the willful fraud of such Holder. The relative fault of the
indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

                           1.10.5 Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

                           1.10.6 The obligations of the Company and Holders
under this Section 1.10 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1, and
otherwise.

                  1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:

                           1.11.1 make and keep public information available,
as those terms are understood and defined in SEC Rule 144, so long as the
Company remains subject to the periodic reporting requirements under Sections
13 or 15(d) of the Exchange Act;

                           1.11.2 take such action as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities;

                           1.11.3 file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the
Exchange Act; and

                           1.11.4 furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of SEC Rule
144, the Act and the Exchange Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.

                  1.12 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to this Section 1 may
be assigned (but only with all related obligations) by a Holder to a transferee
or assignee of at least one hundred thousand (100,000) shares of such
securities as presently constituted, provided the Company is, within a
reasonable time after such transfer, furnished with written notice of
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the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the
number of shares of Registrable Securities held by a transferee or assignee,
the holdings of transferees and assignees of a partnership or limited liability
company who are partners, members or retired partners or members of such
partnership or limited liability company (including spouses and ancestors,
lineal descendants and siblings of such partners, members or spouses who
acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership or limited liability company,
provided that all assignees and transferees who would not qualify individually
for assignment of registration rights shall have a single attorney-in-fact for
the purpose of exercising any rights, receiving notices or taking any action
under Section 1.

                  1.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
1.2 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holders which is included, (b) to make a
demand registration which could result in such registration statement being
declared effective within one hundred eighty (180) days of the effective date
of any registration effected pursuant to Section 1.2 or (c) cut back rights
more favorable than or as favorable as the Holders' rights contained in Section
1.8 hereof.

                  1.14 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be
entitled to exercise any right provided for in this Section 1 after such time
as Rule 144 or another similar exemption under the Act is available for the
sale of all of such Holder's shares during a three (3)-month period without
registration.

         2.       MISCELLANEOUS.

                  2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of the Rights Shares, the Preferred Shares or the
underlying Common Stock). Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

                  2.2 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of laws.

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

                  2.4 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                  2.5 NOTICES. Unless otherwise provided, any notice required
or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier or
sent by telegram or fax, or forty-eight (48) hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party's address as set forth below or on
Exhibit A hereto or as subsequently modified by written notice.

                  2.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company, and the Holders
of a majority of the
<PAGE>
SmartDisk Corporation
Registration Rights Agreement
Page 9

Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each Holder of any
Registrable Securities then outstanding, each future Holder of all such
Registrable Securities, and the Company.

                  2.7 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(x) such provision shall be excluded from this Agreement, (y) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(z) the balance of the Agreement shall be enforceable in accordance with its
terms.

                  2.8 AGGREGATION OF STOCK. All Rights Shares, Preferred
Shares, and Shares of underlying Common Stock held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.

                  2.9 APPROVAL UNDER EXISTING INVESTOR'S RIGHTS AGREEMENT.
Phoenix House Investments, LP ("Phoenix"), as the holder of a majority of the
outstanding "Registrable Securities," as such term is defined in that certain
Investor's Rights Agreement dated as of May 22, 1998, by and among the Company,
Phoenix House Investments, L.L.C. (the predecessor of Phoenix), Toshiba
Corporation and Fischer International Systems Corporation, does hereby consent
to the Company's entering into this Agreement and granting of the rights
contained herein, as required by and in accordance with Section 1.14 of the
Investor's Rights Agreement.

                            [Signature Page Follows]
<PAGE>
SmartDisk Corporation
Registration Rights Agreement
Page 10

         The parties have executed this Registration Rights Agreement as of the
date first above written.

COMPANY:                                INVESTORS:

SMARTDISK CORPORATION                   PHOENIX HOUSE INVESTMENTS, LP

By:  /S/ Michael S. Battaglia           By:   PHOENIX HOUSE INVESTMENTS GP, INC.
     -------------------------------          its general partner
     Michael S. Battaglia, President

Address:      3506 Mercantile Avenue
         Naples, Florida  34104-3310

                                        By:  /S/ Addison M. Fischer
                                             -----------------------------------
                                             Addison M. Fischer, President

                                        Address:   400 West King Street
                                                   Carson City, Nevada  89703

                                        /S/ Addison M. Fischer
                                        ----------------------------------------
                                        Addison M. Fischer

                                        Address:   3584 Mercantile Avenue
                                                   Naples, Florida  34104
<PAGE>
SmartDisk Corporation
Registration Rights Agreement
Page 11

                                   EXHIBIT A

                                   INVESTORS

<TABLE>
<CAPTION>
                                                                     NO. OF
NAME                               ADDRESS                      PREFERRED SHARES
-------------------------------------------------------------------------------
<S>                                <C>                          <C>
Phoenix House Investments, LP      400 West King Street              2,380,857.6
                                   Carson City, Nevada  89703

Addison M. Fischer                 3584 Mercantile Avenue              171,507.2
                                   Naples, Florida  34104
</TABLE><PAGE>

                                                                     Exhibit 4.1

================================================================================

                               Indenture of Trust

                                  by and among

                        Education Funding Capital Trust-I

                                       and

                                Fifth Third Bank

                              as Indenture Trustee

                                       and

                                Fifth Third Bank

                        as Trust Eligible Lender Trustee

                             Dated as of May 1, 2002

================================================================================

<PAGE>

                        Education Funding Capital Trust-I

Reconciliation and tie between Trust Indenture Act of 1939 and Indenture of
Trust dated as of May 1, 2002.

Trust Indenture Act Section               Indenture Section
---------------------------               -----------------
     Section 310(a)(1)                        6.22
     (a)(2)                                   6.22
     (b)                                      6.09, 6.11
     Section 312(b)                           8.14
     (c)                                      8.14
     Section 313(c)                           3.16, 7.04
     Section 314(a)                           3.16
     (a)(4)                                   3.17
     Section 315(b)                           7.04
     Section 317(a)(1)                        3.18
     (a)(2)                                   6.23
     Section 318(a)                           8.07
     (c)                                      8.07

----------

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.

                                       i

<PAGE>

                                Table of Contents

          (This Table of Contents is for convenience of reference only and is
not intended to define, limit or describe the purpose or intent of any
provisions of this Indenture of Trust.)

<TABLE>
<S>                                                                                                 <C>
ARTICLE I............................................................................................3
NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF PROCEEDS OF NOTES........................3
   Section 1.01 Note Details.........................................................................3
   Section 1.02 Execution of Notes...................................................................3
   Section 1.03 Registration, Transfer and Exchange of Notes; Persons Treated as Noteholders.........3
   Section 1.04 Lost, Stolen, Destroyed and Mutilated Notes..........................................4
   Section 1.05 Indenture Trustee's Authentication Certificate.......................................4
   Section 1.06 Cancellation and Destruction of Notes by the Indenture Trustee.......................4
   Section 1.07 Temporary Notes......................................................................5
   Section 1.08 Issuance of Notes....................................................................5
ARTICLE II...........................................................................................6
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS; AND DERIVATIVE PRODUCTS..............................6
   Section 2.01 Parity and Priority of Lien..........................................................6
   Section 2.02 Other Obligations....................................................................6
   Section 2.03 Derivative Products; Counterparty Derivative Payments; Issuer Derivative
      Payments...................................................................................... 7
ARTICLE III......................................................................................... 8
PROVISIONS APPLICABLE TO THE NOTES;................................................................. 8
DUTIES OF THE ISSUER................................................................................ 8
   Section 3.01 Payment of Principal, Interest and Premium.......................................... 8
   Section 3.02 Representations and Warranties of the Issuer........................................ 8
   Section 3.03 Covenants as to Additional Conveyances.............................................. 8
   Section 3.04 Further Covenants of the Issuer..................................................... 8
   Section 3.05 Enforcement of the Servicing Agreement..............................................10
   Section 3.06 Procedures for Transfer of Funds....................................................11
   Section 3.07 Additional Covenants with Respect to the Act........................................11
   Section 3.08 Financed Student Loans; Collections Thereof; Assignment Thereof.....................12
   Section 3.09 Opinions as to the Trust Estate.....................................................12
   Section 3.10 Appointment of Agents, Etc..........................................................13
   Section 3.11 Capacity to Sue.....................................................................13
   Section 3.12 Continued Existence; Successor to Issuer............................................13
   Section 3.13 Amendment of Transfer and Sale Agreements...........................................13
   Section 3.14 Representations; Negative Covenants.................................................13
   Section 3.15 Additional Covenants. So long as any of the Notes are Outstanding...................18
   Section 3.16 Providing of Notice.................................................................19
   Section 3.17 Reports by Issuer...................................................................19
   Section 3.18 Statement as to Compliance..........................................................20
   Section 3.19 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...........20
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                 <C>
   Section 3.20 Representations of the Issuer Regarding the Indenture Trustee's Security Interest...21
   Section 3.21 Covenants of the Issuer Regarding the Indenture Trustee's Security Interest.........21
   Section 3.22 Certain Tax Forms and Treatment.....................................................21
ARTICLE IV..........................................................................................22
FUNDS...............................................................................................22
   Section 4.01 Creation and Continuation of Funds and Accounts.....................................22
   Section 4.02 Acquisition Fund....................................................................23
   Section 4.03 Revenue Fund........................................................................24
   Section 4.04 Interest Fund.......................................................................26
   Section 4.05 Principal Fund......................................................................27
   Section 4.06 Reserve Fund........................................................................28
   Section 4.07 Operating Fund......................................................................29
   Section 4.08 Transfers to Co-Owner Trustee.......................................................30
   Section 4.09 Capitalized Interest Fund...........................................................30
   Section 4.10 Investment of Funds Held by Indenture Trustee.......................................30
   Section 4.11 Indenture Trustee's Control over the Trust Accounts.................................31
   Section 4.12 Release; Sale of Financed Student Loans.............................................32
   Section 4.13 Purchase of Notes...................................................................32
ARTICLE V...........................................................................................32
DEFAULTS AND REMEDIES...............................................................................32
   Section 5.01 Events of Default Defined...........................................................32
   Section 5.02 Remedy on Default; Possession of Trust Estate.......................................33
   Section 5.03 Remedies on Default; Advice of Counsel..............................................34
   Section 5.04 Remedies on Default; Sale of Trust Estate...........................................34
   Section 5.05 Appointment of Receiver.............................................................35
   Section 5.06 Restoration of Position.............................................................35
   Section 5.07 Purchase of Properties by Indenture Trustee or Noteholders..........................35
   Section 5.08 Application of Sale Proceeds........................................................35
   Section 5.09 Accelerated Maturity................................................................36
   Section 5.10 Remedies Not Exclusive..............................................................36
   Section 5.11 Direction of Indenture Trustee......................................................36
   Section 5.12 Right to Enforce in Indenture Trustee...............................................37
   Section 5.13 Physical Possession of Obligations Not Required.....................................37
   Section 5.14 Waivers of Events of Default........................................................37
ARTICLE VI..........................................................................................38
THE INDENTURE TRUSTEE...............................................................................38
   Section 6.01 Acceptance of Trust.................................................................38
   Section 6.02 Recitals of Others..................................................................38
   Section 6.03 As to Filing of Indenture...........................................................38
   Section 6.04 Indenture Trustee May Act Through Agents............................................39
   Section 6.05 Indemnification of Indenture Trustee................................................39
   Section 6.06 Indenture Trustee's Right to Reliance...............................................40
   Section 6.07 Compensation of Indenture Trustee...................................................41
   Section 6.08 Indenture Trustee May Own Notes.....................................................41
   Section 6.09 Resignation of Indenture Trustee....................................................42
</TABLE>

                                       iii

<PAGE>

<TABLE>
<S>                                                                                                 <C>
   Section 6.10 Removal of Indenture Trustee........................................................42
   Section 6.11 Successor Indenture Trustee.........................................................42
   Section 6.12 Manner of Vesting Title in Indenture Trustee........................................43
   Section 6.13 Additional Covenants by the Indenture Trustee to Conform to the Act.................43
   Section 6.14 Limitation with Respect to Examination of Reports...................................44
   Section 6.15 Servicing Agreement.................................................................44
   Section 6.16 Additional Covenants of Indenture Trustee...........................................44
   Section 6.17 Duty of Indenture Trustee with Respect to Rating Agencies...........................44
   Section 6.18 Merger of the Indenture Trustee.....................................................45
   Section 6.19 Receipt of Funds from Servicer......................................................45
   Section 6.20 Special Circumstances Leading to Resignation of Indenture Trustee...................45
   Section 6.21 Survival of Indenture Trustee's Rights to Receive Compensation, Reimbursement and
                   Indemnification..................................................................45
   Section 6.22 Corporate Trustee Required; Eligibility; Conflicting Interests......................45
   Section 6.23 Payment of Taxes and Other Governmental Charges.....................................46
   Section 6.24 Indenture Trustee May File Proofs of Claim..........................................46
ARTICLE VII.........................................................................................47
SUPPLEMENTAL INDENTURES.............................................................................47
   Section 7.01 Supplemental Indentures Not Requiring Consent of Noteholders........................47
   Section 7.02 Supplemental Indentures Requiring Consent of Noteholders............................49
   Section 7.03 Additional Limitation on Modification of Indenture..................................50
   Section 7.04 Notice of Defaults..................................................................50
   Section 7.05 Conformity With the Trust Indenture Act.............................................50
ARTICLE VIII........................................................................................50
GENERAL PROVISIONS..................................................................................50
   Section 8.01 Notices.............................................................................50
   Section 8.02 Covenants Bind Issuer...............................................................52
   Section 8.03 Lien Created........................................................................52
   Section 8.04 Severability of Lien................................................................52
   Section 8.05 Consent of Noteholders Binds Successors.............................................52
   Section 8.06 Nonpresentment of Notes or Interest Checks..........................................52
   Section 8.07 Laws Governing......................................................................52
   Section 8.08 Severability........................................................................53
   Section 8.09 Exhibits............................................................................53
   Section 8.10 Non-Business Days...................................................................53
   Section 8.11 Parties Interested Herein...........................................................53
   Section 8.12 Obligations Are Limited Obligations.................................................53
   Section 8.13 Counterparty Rights.................................................................53
   Section 8.14 Disclosure of Names and Addresses of Noteholders....................................53
   Section 8.15 Aggregate Principal Amount of Obligations...........................................53
   Section 8.16 Financed Student Loans..............................................................54
   Section 8.17 Limitation of Liability of the Co-Owner Trustee.....................................54
ARTICLE IX..........................................................................................54
PAYMENT AND CANCELLATION OF NOTES...................................................................54
AND SATISFACTION OF INDENTURE.......................................................................54
   Section 9.01 Trust Irrevocable...................................................................54
</TABLE>

                                       iv

<PAGE>

<TABLE>
<S>                                                                                                 <C>
   Section 9.02 Satisfaction of Indenture...........................................................54
   Section 9.03 Cancellation of Paid Notes..........................................................55
ARTICLE X...........................................................................................55
TERMINATION.........................................................................................55
   Section 10.01 Termination of the Trust...........................................................55
   Section 10.02 Notice.............................................................................55
ARTICLE XI..........................................................................................55
REPORTING REQUIREMENTS..............................................................................55
   Section 11.01 Annual Statement as to Compliance..................................................55
   Section 11.02 Annual Independent Public Accountant's Servicing Report............................56
   Section 11.03 Servicer's Certificate.............................................................56
   Section 11.04 Statements to Noteholders..........................................................56
</TABLE>

Exhibit A  Student Loan Acquisition Certificate

Exhibit B  Form of Issuer Order

Appendix A  Definitions and Usage

                                        v

<PAGE>

                               Indenture of Trust

          This Indenture of Trust, dated as of May 1, 2002 (this "Indenture"),
is by and among Education Funding Capital Trust-I, a Delaware business trust
(the "Issuer"), Fifth Third Bank, a banking corporation organized under the laws
of the State of Ohio, as indenture trustee (the "Indenture Trustee"), and Fifth
Third Bank, a banking corporation organized under the laws of the State of Ohio,
as trust eligible lender trustee (the "Trust Eligible Lender Trustee").
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in Appendix A hereto, which also contains rules of usage
and construction that shall be applicable herein.

                              W I T N E S S E T H:

          Whereas, the Issuer represents that it is duly created as a Delaware
business trust and that it has duly authorized the execution and delivery of
this Indenture, which Indenture provides for the payment of student loan
asset-backed notes (the "Notes") and the payments to any Counterparty (as
defined herein), all to be issued pursuant to the terms of Supplemental
Indentures; and

          Whereas, this Indenture may become subject to the provisions of the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"),
that are deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions; and

          Whereas, the Indenture Trustee has agreed to accept the trusts herein
created upon the terms herein set forth; and

          Whereas, it is hereby agreed between the parties hereto, the
Noteholders (the Noteholders evidencing their consent by their acceptance of the
Notes) and any Counterparty (the Counterparty evidencing its consent by its
execution and delivery of a Derivative Product (as defined herein)) that in the
performance of any of the agreements of the Issuer herein contained, any
obligation it may thereby incur for the payment of money shall not be general
debt on its part, but shall be secured by and payable solely from the Trust
Estate, payable in such order of preference and priority as provided herein;

          Now, Therefore, the Issuer (and, with respect to the legal title to
the Financed Student Loans that were originated under the Act, the Trust
Eligible Lender Trustee), in consideration of the premises and acceptance by the
Indenture Trustee of the trusts herein created, of the purchase and acceptance
of the Notes by the Noteholders thereof, of the execution and delivery of any
Derivative Product by a Counterparty and the Issuer and the acknowledgement
thereof by the Indenture Trustee, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, hereby Grant,
Convey, Pledge, Transfer, Assign and Deliver to the Indenture Trustee, for the
benefit of the Noteholders, any Counterparty (to secure the payment of any and
all amounts that may from time to time become due and owing to a Counterparty
pursuant to any Derivative Product), all of their right, title and interest in
and to the moneys, rights, and properties described in the granting clauses A
through F below (the "Trust Estate"), as follows:

<PAGE>

                                Granting Clause A

          The Revenues (other than Revenues deposited in the Operating Fund or
otherwise released from the lien of the Trust Estate as provided herein);

                                Granting Clause B

          All moneys and investments held in the Funds created under Section
4.01(a) hereof (other than the moneys and investments held in the Operating
Fund);

                                Granting Clause C

          The Financed Student Loans;

                                Granting Clause D

          The Servicing Agreement, the Subservicing Agreement, the Transfer and
Sale Agreements and the Guarantee Agreements as the same relate to Financed
Student Loans;

                                Granting Clause E

          Any Derivative Product and any guarantee of any Counterparty;
provided, however, that this Granting Clause E shall not be for the benefit of a
Counterparty with respect to its Derivative Product; and

                                Granting Clause F

          Any and all other property, rights and interests of every kind or
description that from time to time hereafter is granted, conveyed, pledged,
transferred, assigned or delivered to the Indenture Trustee as additional
security hereunder.

          To Have And To Hold the trust Estate, whether now owned or held or
hereafter acquired, unto the Indenture Trustee and its successors or assigns,

          In Trust Nevertheless, upon the terms and trusts herein set forth for
the equal and proportionate benefit and security of all present and future
Noteholders, without preference of any Note over any other, except as provided
herein, and for enforcement of the payment of the Notes in accordance with their
terms, and all other sums payable hereunder (including payments due and payable
to any Counterparty) or on the Notes, and for the performance of and compliance
with the obligations, covenants, and conditions of this Indenture, as if all the
Notes and other Obligations (as defined herein) at any time Outstanding had been
executed and delivered simultaneously with the execution and delivery of this
Indenture;

          Provided, However, that if the Issuer, its successors or assigns,
shall well and truly pay, or cause to be paid, the principal of the Notes and
the interest due and to become due thereon, or provide fully for payment thereof
as herein provided, at the times and in the manner mentioned in the Notes
according to the true intent and meaning thereof, and shall make all required
payments into the Funds as required under Article IV hereof, or shall provide,
as

                                       2

<PAGE>

permitted hereby, for the payment thereof by depositing with the Indenture
Trustee sums sufficient to pay or to provide for payment of the entire amount
due and to become due as herein provided (including payments due and payable to
any Counterparty), then this Indenture and the rights hereby granted shall
cease, terminate and be void; otherwise, this Indenture shall be and remain in
full force and effect;

          Now, Therefore, it is mutually covenanted and agreed as follows:

                                    Article I

  Note Details, Form of Notes, Redemption of Notes and Use of Proceeds of Notes

          Section 1.01 Note Details. The details of each Series of Notes
authorized pursuant to this Indenture and a Supplemental Indenture, shall be
contained in the applicable Supplemental Indenture. Such details shall include,
but are not limited to, the principal amount, authorized denomination, dated
date, interest rate, principal maturity date, redemption provisions and
registration provisions.

          Section 1.02 Execution of Notes. The Notes shall be executed in the
name and on behalf of the Issuer by the manual or facsimile signature of any of
its Authorized Officers. Any Note may be signed (manually or by facsimile) or
attested on behalf of the Issuer by any person who, at the date of such act,
shall hold the proper office, notwithstanding that at the date of
authentication, issuance or delivery, such person may have ceased to hold such
office.

          Section 1.03 Registration, Transfer and Exchange of Notes; Persons
Treated as Noteholders. The Issuer shall cause books for the registration and
for the transfer of the Notes as provided in this Indenture to be kept by the
Indenture Trustee, which is hereby appointed the transfer agent of the Issuer
for the Notes. Notwithstanding such appointment and with the prior written
consent of the Issuer, the Indenture Trustee is hereby authorized to make any
arrangements with other institutions that it deems necessary or desirable in
order that such institutions may perform the duties of transfer agent for the
Notes. Upon surrender for transfer of any Note at the Corporate Trust Office of
the Indenture Trustee, duly endorsed for transfer or accompanied by an
assignment duly executed by the Noteholder or his attorney duly authorized in
writing, the Issuer shall execute and the Indenture Trustee shall authenticate
and deliver, making all appropriate notations on its records, and causing the
same to be made on the records of its nominees, in the name of the transferee or
transferees a new fully registered Note or Notes of the same interest rate and
for a like Series, subseries, if any, and aggregate principal amount of the same
maturity.

          Notes may be exchanged at the Corporate Trust Office of the Indenture
Trustee for a like aggregate principal amount of fully registered Notes of the
same Series, subseries, if any, interest rate and maturity in authorized
denominations. The Issuer shall execute and the Indenture Trustee shall
authenticate and deliver Notes that the Noteholder making the exchange is
entitled to receive, bearing numbers not contemporaneously outstanding. The
execution by the Issuer of any fully registered Note of any authorized
denomination shall constitute full and due authorization of such denomination
and the Indenture Trustee shall thereby be authorized to authenticate and
deliver such fully registered Note.

                                       3

<PAGE>

          The Indenture Trustee shall not be required to transfer or exchange
any Note during the period 15 Business Days next preceding the mailing of notice
of redemption as herein provided. After the giving of such notice of redemption,
the Indenture Trustee shall not be required to transfer or exchange any Note
that has been called for full or partial redemption.

          As to any Note, the Person in whose name the Note is registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Noteholder thereof or his legal
representative. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.

          The Indenture Trustee shall require the payment by any Noteholder
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The Noteholder requesting
such transfer or exchange may be required to pay all taxes and governmental
charges in connection with such transfer or exchange.

          Section 1.04 Lost, Stolen, Destroyed and Mutilated Notes. Upon receipt
by the Indenture Trustee of evidence satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note and, in the case of a
lost, stolen or destroyed Note, of indemnity satisfactory to it, and upon
surrender and cancellation of the Note, if mutilated, (a) the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver, a new Note of
the same Series, subseries, if any, interest rate, maturity and denomination in
lieu of such lost, stolen, destroyed or mutilated Note or (b) if such lost,
stolen, destroyed or mutilated Note shall have matured or have been called for
redemption, in lieu of executing and delivering a new Note as aforesaid, the
Issuer may pay such Note. Any such new Note shall bear a number not
contemporaneously outstanding. The Person requesting any such new Note may be
required to pay all taxes and governmental charges and all expenses and charges
of the Issuer and of the Indenture Trustee in connection with the issuance of
such Note. All Notes shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing conditions are exclusive with respect
to the replacement and payment of mutilated, destroyed, lost or stolen Notes,
negotiable instruments or other securities.

          Section 1.05 Indenture Trustee's Authentication Certificate. The
Indenture Trustee's authentication certificate upon any Notes shall be
substantially in the form provided in the Supplemental Indenture authorizing the
issuance of such Notes. No Note shall be secured hereby or entitled to the
benefit hereof, or shall be valid or obligatory for any purpose, unless a
certificate of authentication, substantially in such form, has been duly
executed by the Indenture Trustee; and such certificate of the Indenture Trustee
upon any Note shall be conclusive evidence and the only competent evidence that
such Note has been authenticated and delivered hereunder and under a
Supplemental Indenture. The Indenture Trustee's certificate of authentication
shall be deemed to have been duly executed by it if manually signed by an
authorized officer or signatory of the Indenture Trustee, but it shall not be
necessary that the same person sign the certificate of authentication on all of
the Notes issued hereunder.

          Section 1.06 Cancellation and Destruction of Notes by the Indenture
Trustee. Whenever any Outstanding Notes are delivered to the Indenture Trustee
for the cancellation thereof pursuant to this Indenture, upon payment of the
principal amount and interest represented

                                       4

<PAGE>

thereby, or for replacement pursuant to Section 1.03 hereof, such Notes shall be
promptly cancelled and, within a reasonable time, cremated or otherwise
destroyed by the Indenture Trustee and counterparts of a certificate of
destruction evidencing such cremation or other destruction shall be furnished by
the Indenture Trustee to the Issuer.

          Section 1.07 Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute and the Indenture Trustee shall authenticate and
deliver temporary Notes. Temporary Notes shall be issuable as fully registered
Notes without coupons, of any denomination, and substantially in the form of the
definitive Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Issuer. Every
temporary Note shall be executed by the Issuer and be authenticated by the
Indenture Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Notes. As promptly as practicable the
Issuer shall execute and shall furnish definitive Notes and thereupon temporary
Notes may be surrendered in exchange therefor without charge at the Corporate
Trust Office of the Indenture Trustee, and the Indenture Trustee shall
authenticate and deliver in exchange for such temporary Notes a like aggregate
principal amount of definitive Notes. Until so exchanged the temporary Notes
shall be entitled to the same benefits under this Indenture as definitive Notes.

          Section 1.08 Issuance of Notes.

          (a) The Issuer shall have the authority, upon complying with the
provisions of this Section 1.08, to issue and deliver from time to time Notes
secured by the Trust Estate on a parity with the Senior Notes or the Subordinate
Notes, or other borrowings of the Issuer, if any, secured hereunder as shall be
determined by the Issuer. In addition, the Issuer may enter into any Derivative
Products it deems necessary or desirable with respect to any or all of the
Notes.

          (b) No Notes shall be authenticated and delivered pursuant to this
Indenture until the following conditions have been satisfied:

          (i) The Issuer and the Indenture Trustee have entered into a
     Supplemental Indenture (which Supplemental Indenture shall not require the
     approval of the Noteholders of any of the Outstanding Notes or Derivative
     Products) providing the terms and forms of the proposed Notes as described
     in Section 1.01 hereof, including the designation of such Notes as Senior
     Notes or Subordinate Notes or another designation that indicates the
     priority of such Notes with respect to other Notes secured under this
     Indenture, the redemption and selection provisions applicable to such
     Notes, and the Reserve Fund Requirement with respect to such Notes, if any;

          (ii) The Indenture Trustee shall have received a Rating Confirmation
     from each Rating Agency that has assigned a Rating or Ratings to any
     Outstanding Notes that such Rating or Ratings will not be reduced or
     withdrawn as a result of the issuance of the proposed Notes;

          (iii) Upon the issuance of the proposed Notes, an amount equal to the
     Reserve Fund Requirement with respect to such Notes, if any, shall be
     deposited into the Reserve Fund; and

                                       5

<PAGE>

          (iv) The Indenture Trustee shall have received a written order from
     the Issuer to authenticate and deliver the Notes.

          (c) The Indenture Trustee is authorized to set up any additional Funds
or Accounts or Subaccounts under this Indenture that it deems necessary or
convenient in connection with the issuance and delivery of any Notes.

                                   Article II

     Parity and Priority of Lien; Other Obligations; and Derivative Products

          Section 2.01 Parity and Priority of Lien. The provisions, covenants
and agreements herein set forth to be performed by or on behalf of the Issuer
are for the equal benefit, protection and security of the Noteholders or any
holders of the Obligations, all of which, regardless of the time or times of
their issuance or maturity, shall be of equal rank without preference, priority
or distinction of any of the Obligations over any other thereof, except as
expressly provided in this Indenture with respect to certain payment and other
priorities.

          Section 2.02 Other Obligations.

          (a) The Issuer shall not issue any Notes, incur any obligations or
engage in any activities other than in connection with the purposes and powers
of the Issuer as set forth in Section 2.3 of the Trust Agreement.

          (b) The Issuer may commingle the Funds established by this Indenture
with funds, proceeds, or investments of funds relating to other issues or Series
of notes heretofore or hereafter issued.

          (c) The revenues and other moneys, Financed Student Loans, securities,
evidences of indebtedness, interests, rights and properties pledged under this
Indenture are and will be owned by the Issuer (or the Trust Eligible Lender
Trustee) free and clear of any pledge, lien, charge or encumbrance thereon or
with respect thereto prior to or of equal rank with the respective pledges
created by this Indenture, except as otherwise expressly provided herein, and
all action on the part of the Issuer to that end has been duly and validly
taken. If any Financed Student Loan is found to have been subject to a lien at
the time such Financed Student Loan was acquired, the Issuer shall cause such
lien to be released, shall purchase such Financed Student Loan from the Trust
Estate for a purchase price equal to its principal amount plus unamortized
premium, if any, and interest accrued thereon, or shall replace such Financed
Student Loan with another Student Loan with substantially identical
characteristics that shall be free and clear of liens at the time of such
replacement. Except as otherwise provided herein, the Issuer shall not create or
voluntarily permit to be created any debt, lien, or charge on the Financed
Student Loans that would be on a parity with or prior to the lien of this
Indenture; shall not do or omit to do or suffer to be done or omitted to be done
anything whatsoever whereby the lien of this Indenture or the priority of such
lien for the Obligations hereby secured might or could be lost or impaired; and
will pay or cause to be paid or will make adequate provisions for the
satisfaction and discharge of all lawful claims and demands that if unpaid might
by law be given precedence to or any equality with this Indenture as a lien or
charge upon the Financed Student Loans; provided, however, that nothing in this
subsection (c) shall require the Issuer to pay, discharge, or make

                                       6

<PAGE>

provision for any such lien, charge, claim, or demand so long as the validity
thereof shall be by it in good faith contested, unless thereby, the same will
endanger the security for the Obligations; and provided further that any
subordinate lien hereon (i.e., subordinate to the lien securing the Senior
Obligations and the Subordinate Obligations) shall be entitled to no payment
from the Trust Estate, nor may any remedy be exercised with respect to such
subordinate lien against the Trust Estate until all Obligations have been paid
or deemed paid hereunder.

          Section 2.03 Derivative Products; Counterparty Derivative Payments;
Issuer Derivative Payments. The Issuer hereby authorizes and directs the
Indenture Trustee to acknowledge and agree to any Derivative Product hereafter
entered into by the Issuer and a Counterparty under which (a) the Issuer may be
required to make, from time to time, Issuer Derivative Payments and (b) the
Indenture Trustee may receive, from time to time, Counterparty Derivative
Payments for the account of the Issuer. No Derivative Product shall be entered
into unless (i) the Indenture Trustee shall have received a Rating Confirmation
from each Rating Agency that such Derivative Product will not adversely affect
the Rating on any of the Notes and (ii) all Issuer Derivative Payments and
Counterparty Derivative Payments are to be made on the third Business Day
immediately preceding a Payment Date. Anything in this Indenture to the contrary
notwithstanding, any Revenues representing Counterparty Derivative Payments of a
Counterparty shall not be available to make an Issuer Derivative Payment to
another Counterparty or to pay any other amounts owed to such Counterparty
pursuant to a Derivative Product.

          No later than the fourth Business Day immediately preceding each
Derivative Payment Date the Issuer shall give written notice to the Indenture
Trustee stating (a) the amount and payer of each Counterparty Derivative
Payment, if any, due to be received by the Indenture Trustee for the account of
the Issuer on the third Business Day immediately preceding such Derivative
Payment Date and (b) the amount and payee of each Issuer Derivative Payment, if
any, to be paid on the third Business Day immediately preceding such Derivative
Payment Date. If the Indenture Trustee fails to receive such written
notification from the Issuer by the end of such third Business Day, it shall
immediately notify the Issuer of such fact in writing.

          On the third Business Day immediately preceding each Derivative
Payment Date and in accordance with the written notification received from the
Issuer, the Indenture Trustee shall deposit all moneys received representing
Counterparty Derivative Payments into the Revenue Fund to be applied in
accordance with the provisions of Section 4.03 hereof. The Indenture Trustee
shall notify the Issuer on such Business Day, if (a) the amount received from
any Counterparty is not equal to the amount specified in the written
notification of the Issuer, (b) no amount is received from such Counterparty or
(c) the amount received is not received in immediately available funds.

          On the third Business Day immediately preceding any Derivative Payment
Date with respect to which an Issuer Derivative Payment is due in accordance
with the written notification received from the Issuer or, with respect to a
payment in respect of an early termination date due from the Issuer pursuant to
the terms of a Derivative Product, the Indenture Trustee shall make payment to
the appropriate Counterparty from moneys in the Revenue Fund of the amount of
the Issuer Derivative Payment specified in such written notification of the
Issuer due on such date by the deposit or wire transfer of immediately available
funds to the

                                       7

<PAGE>

credit of the account of such Counterparty specified in such written
notification of the Issuer, but only to the extent such payment will not result
in a deficiency in the amount due on the next succeeding Payment Date to the
holders of any class of Obligations having a priority equal to or higher than
the Derivative Product in respect of which such Issuer Derivative Payment is
due.

          If any payment to a Counterparty described in the immediately
preceding paragraph would result in a deficiency in the amounts required to make
payments to the holders of the Obligations referred to in that paragraph on such
Payment Date, then the Indenture Trustee shall delay the making of such payment
to such Counterparty until the first date on which no deficiency would result
from such payment and the Indenture Trustee has been notified in writing to make
such payment.

                                   Article III

                       Provisions Applicable to the Notes;
                              Duties of the Issuer

          Section 3.01 Payment of Principal, Interest and Premium. The Issuer
covenants that it will promptly pay, but solely from the Trust Estate, the
principal of and interest, if any, on each and every Obligation issued under the
provisions of this Indenture at the places, on the dates and in the manner
specified herein and in said Obligations and any premium required for the
retirement of said Obligations by purchase or redemption according to the true
intent and meaning thereof. The Obligations shall be and are hereby declared to
be payable from and equally secured by an irrevocable first lien on and pledge
of the properties constituting the Trust Estate, subject to the application
thereof as permitted by this Indenture, but in no event shall the Noteholders or
any holders of the Obligations have any right to possession of any Financed
Student Loans, which shall be held only by the Indenture Trustee or its agent or
bailee.

          Section 3.02 Representations and Warranties of the Issuer. The Issuer
represents and warrants that it is duly authorized under the laws of Delaware to
issue the Notes and to execute and deliver this Indenture and any Derivative
Product and to make the pledge to the payment of Notes and any Issuer Derivative
Payments hereunder, that all necessary action on the part of the Issuer for the
creation and issuance of the Notes and the execution and delivery of this
Indenture and any Derivative Product has been duly and effectively taken, and
that the Notes in the hands of the Noteholders thereof and the Issuer Derivative
Payments are and will be valid and enforceable special limited obligations of
the Issuer secured by and payable solely from the Trust Estate.

          Section 3.03 Covenants as to Additional Conveyances. At any and all
times, the Issuer will duly execute, acknowledge, and deliver, or will cause to
be done, executed, and delivered, all and every such further acts, conveyances,
transfers, and assurances in law as the Indenture Trustee shall reasonably
require for the better conveying, transferring, and pledging and confirming unto
the Indenture Trustee, all and singular, the properties constituting the Trust
Estate hereby transferred and pledged, or intended so to be transferred and
pledged.

          Section 3.04 Further Covenants of the Issuer.

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<PAGE>

          (a) The Issuer will cause financing statements and continuation
statements with respect thereto at all times to be filed in the office of the
Secretary of the State of Delaware and any other jurisdiction necessary to
perfect and maintain the security interest granted by the Issuer hereunder.

          (b) The Issuer will duly and punctually keep, observe and perform each
and every term, covenant, and condition on its part to be kept, observed, and
performed, contained in this Indenture and the other agreements to which the
Issuer is a party pursuant to the transactions contemplated herein, and will
punctually perform all duties required by the Trust Agreement and the laws of
Delaware.

          (c) The Issuer shall be operated on the basis of its Fiscal Year.

          (d) The Issuer shall cause to be kept full and proper books of records
and accounts, in which full, true, and proper entries will be made of all
dealings, business, and affairs of the Issuer that relate to the Notes and any
Derivative Product.

          (e) The Issuer, upon written request of the Indenture Trustee, will
permit at all reasonable times the Indenture Trustee or its agents, accountants,
and attorneys, to examine and inspect the property, books of account, records,
reports, and other data relating to the Financed Student Loans, and will furnish
the Indenture Trustee such other information as it may reasonably request. The
Indenture Trustee shall be under no duty to make any such examination unless
requested in writing to do so by the Noteholders of not less than a majority of
the principal amount of the Notes, and unless such Noteholders shall have
offered the Indenture Trustee security and indemnity satisfactory to it against
any costs, expenses and liabilities that might be incurred thereby.

          (f) The Issuer shall cause an annual audit to be made by an
independent auditing firm of national reputation and file one copy thereof with
the Indenture Trustee and each Rating Agency within 150 days of the close of
each Fiscal Year. The Indenture Trustee shall be under no obligation to review
or otherwise analyze such audit.

          (g) The Issuer covenants that all Financed Student Loans upon receipt
thereof shall be delivered to the Indenture Trustee or its agent or bailee to be
held pursuant to this Indenture and pursuant to the Servicing Agreement, a
Subservicing Agreement or a custodian agreement.

          (h) Notwithstanding anything to the contrary contained herein, except
upon the occurrence and during the continuance of an Event of Default hereunder,
the Issuer hereby expressly reserves and retains the privilege to receive and,
subject to the terms and provisions of this Indenture, to keep or dispose of,
claim, bring suits upon or otherwise exercise, enforce or realize upon its
rights and interest in and to the Financed Student Loans and the proceeds and
collections therefrom, and neither the Indenture Trustee nor any Noteholder
shall in any manner be or be deemed to be an indispensable party to the exercise
of any such privilege, claim or suit, and the Indenture Trustee shall be under
no obligation whatsoever to exercise any such privilege, claim or suit;
provided, however, that the Indenture Trustee shall have and retain possession
of the Financed Student Loans pursuant to Section 4.02 hereof (which Financed
Student Loans may

                                       9

<PAGE>

be held by the Indenture Trustee's agent or bailee) so long as such loans are
subject to the lien of this Indenture.

          (i) The Issuer shall notify the Indenture Trustee and each Rating
Agency in writing prior to entering into any Derivative Product and shall not
enter into any Derivative Product unless the Indenture Trustee has received a
Rating Confirmation.

          Section 3.05 Enforcement of the Servicing Agreement. Regardless of
whether the Issuer is otherwise in default under this Indenture, the Issuer
shall comply with and shall require the Servicer to comply with the following:

          (a)  The Issuer shall diligently enforce and take all reasonable
               steps, actions and proceedings necessary for the enforcement of
               all terms, covenants and conditions of the Servicing Agreement,
               including the prompt payment of all amounts due the Issuer
               thereunder, including without limitation all principal and
               interest payments and Guarantee Payments that relate to any
               Financed Student Loans, and cause the Servicer to specify whether
               payments received by it represent principal or interest;

          (b)  The Issuer shall not permit the release of the obligations of the
               Servicer under the Servicing Agreement except in conjunction with
               amendments or modifications permitted by (h) below;

          (c)  The Issuer shall at all times, to the extent permitted by law,
               cause to be defended, enforced, preserved and protected the
               rights and privileges of the Issuer and of the Noteholders under
               or with respect to the Servicing Agreement;

          (d)  The Issuer shall at its own expense duly and punctually perform
               and observe each of its obligations to the Servicer under the
               Servicing Agreement in accordance with the terms thereof;

          (e)  The Issuer shall give the Indenture Trustee and the Rating
               Agencies prompt written notice of each default on the part of the
               Servicer of its obligations under the Servicing Agreement coming
               to the Issuer's attention;

          (f)  The Issuer shall not waive any default by the Servicer under the
               Servicing Agreement without the written consent of the Indenture
               Trustee;

          (g)  The Issuer shall cause the Servicer to deliver to the Indenture
               Trustee and the Issuer, on or before March 31 of each year,
               beginning with March 31, 2003, a certificate stating that (i) a
               review of the activities of the Servicer during the preceding
               calendar year and of its performance under the Servicing
               Agreement has been made under the supervision of the officer
               signing such certificate and (ii) to the best of such officers'
               knowledge, based on such review, the Servicer has fulfilled all
               its obligations under the Servicing Agreement throughout such
               year, or, there has been a default

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<PAGE>

               in the fulfillment of any such obligation, specifying each such
               default known to such officer and the nature and status thereof.
               The Issuer shall send copies of such annual certificate of the
               Servicer to each Rating Agency; and

          (h)  The Issuer shall not consent or agree to or permit any amendment
               or modification of the Servicing Agreement that will in any
               manner materially adversely affect the rights or security of the
               Noteholders. The Issuer shall be entitled to receive and rely
               upon an opinion of its counsel that any such amendment or
               modification will not materially adversely affect the rights or
               security of the Noteholders.

          Section 3.06 Procedures for Transfer of Funds. In any instance where
this Indenture requires a transfer of funds or money from one Fund to another, a
transfer of ownership in investments or an undivided interest therein may be
made in any manner agreeable to the Issuer and the Indenture Trustee, and in the
calculation of the amount transferred, interest on the investment that has or
will accrue before the date the money is needed in the Fund to which the
transfer is made shall not be taken into account or considered as money on hand
at the time of such transfer.

          Section 3.07 Additional Covenants with Respect to the Act. The Issuer
covenants that (i) so long as any of the Financed Student Loans were originated
under the Act, it will cause the Indenture Trustee to be, or replace the
Indenture Trustee with, an Eligible Lender under the Act, (ii) all Student Loans
originated under the Act that it acquires shall be acquired from, and it shall
cause such Student Loans to be held by, only an Eligible Lender, and (iii) it
will not dispose of or deliver any Student Loan originated under the Act or any
security interest in any such Student Loans to any party who is not an Eligible
Lender so long as the Act or Regulations adopted thereunder require an Eligible
Lender to be the owner or holder of Student Loans originated under the Act;
provided, however, that nothing above shall prevent the Issuer from delivering
Student Loans originated under the Act to the Servicer, any Subservicer or
Guaranty Agency. The Noteholders shall not in any circumstances be deemed to be
the owner or holder of Student Loans originated under the Act.

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

          (a) the Issuer, or its designated agent, shall be responsible for
dealing with the Secretary with respect to the rights, benefits and obligations
under the Certificates of Insurance and the Contract of Insurance, and the
Issuer shall be responsible for dealing with the Guarantee Agencies with respect
to the rights, benefits and obligations under the Guarantee Agreements with
respect to Guaranteed Student Loans;

          (b) the Issuer, or its designated agent, shall cause to be diligently
enforced, and shall cause to be taken all reasonable steps, actions and
proceedings necessary or appropriate for the enforcement of all terms, covenants
and conditions of all Financed Student Loans and agreements in connection
therewith, including the prompt payment of all principal and interest payments
and all other amounts due thereunder;

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<PAGE>

          (c) the Issuer, or its designated agent, shall cause the Financed
Student Loans to be serviced by entering into the Servicing Agreement or other
agreement with the Servicer for the collection of payments made for, and the
administration of the accounts of, the Financed Student Loans;

          (d) the Issuer, or its designated agent, shall comply, and shall cause
all of its officers, directors, employees and agents to comply, with the
provisions of the Act and any regulations or rulings thereunder, with respect to
Financed Student Loans that were originated under the Act; and

          (e) the Issuer, or its designated agent, shall cause the benefits of
the Guarantee Agreements, the Interest Subsidy Payments and the Special
Allowance Payments to flow to the Indenture Trustee. The Indenture Trustee shall
have no liability for actions taken at the direction of the Issuer, except for
gross negligence or willful misconduct in the performance of its express duties
hereunder. The Indenture Trustee shall have no obligation to administer, service
or collect the loans in the Trust Estate or to maintain or monitor the
administration, servicing or collection of such loans.

          The Indenture Trustee shall not be deemed to be the designated agent
for the purposes of this Section 3.07 unless it has agreed in writing to be such
agent.

          Section 3.08 Financed Student Loans; Collections Thereof; Assignment
Thereof. The Issuer, through the Servicer, shall diligently collect all
principal and interest payments on all Financed Student Loans, and all Interest
Benefit Payments, insurance, guarantee and default claims and Special Allowance
Payments that relate to such Financed Student Loans. The Issuer shall cause the
filing and assignment of such claims (prior to the timely filing deadline for
such claims under the Regulations, if applicable) by the Servicer. The Issuer
will comply with the Act and Regulations that apply to the Program and to such
Financed Student Loans.

          Section 3.09 Opinions as to the Trust Estate.

          (a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee and any Counterparties an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any Supplemental Indentures hereto, and
any other requisite documents, and with respect to the execution and filing of
any financing statements and continuation statements, as are necessary to
perfect and make effective the lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.

          (b) On or before March 31, in each calendar year, beginning in 2003,
the Issuer shall furnish to the Indenture Trustee and any Counterparties an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any Supplemental Indentures hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action, or stating that in the opinion of

                                       12

<PAGE>

such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any Supplemental Indentures hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until March 31 of the following calendar year.

          Section 3.10 Appointment of Agents, Etc. The Issuer shall employ and
appoint all employees, agents, consultants and attorneys that it may consider
necessary.

          Section 3.11 Capacity to Sue. The Issuer shall have the power and
capacity to sue and to be sued on matters arising out of or relating to the
financing of the Financed Student Loans.

          Section 3.12 Continued Existence; Successor to Issuer. The Issuer
agrees that it will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights and franchises as a Delaware
business trust, except as otherwise permitted by this Section 3.12. The Issuer
further agrees that it will not (a) sell, transfer or otherwise dispose of all
or substantially all of its assets (except Financed Student Loans if such sale,
transfer or disposition will discharge this Indenture in accordance with Article
IX hereof); (b) consolidate with or merge into another entity; or (c) permit one
or more other corporations or entities to consolidate with or merge into it. The
preceding restrictions in (a), (b) and (c) shall not apply to a transaction if
(x) the transferee or the surviving or resulting corporation or entity, if other
than the Issuer, by proper written instrument for the benefit of the Indenture
Trustee, irrevocably and unconditionally assumes the obligation to perform and
observe the agreements and obligations of the Issuer under this Indenture, and
(y) the Issuer has received a Rating Confirmation regarding such transaction.

          If a transfer is made as provided in this Section 3.12, the provisions
of this Section 3.12 shall continue in full force and effect and no further
transfer shall be made except in compliance with the provisions of this Section
3.12.

          Section 3.13 Amendment of Transfer and Sale Agreements. The Issuer
shall notify the Indenture Trustee in writing of any proposed amendments to the
Transfer and Sale Agreements. No such amendment shall become effective unless
and until the Indenture Trustee consents thereto in writing. The consent of the
Indenture Trustee shall not be unreasonably withheld and shall not be withheld
if the Indenture Trustee receives an Opinion of Counsel acceptable to it that
such an amendment is required by the Act and is not materially prejudicial to
the Noteholders. Notwithstanding the foregoing, however, the Indenture Trustee
shall consent to any amendment from time to time so long as it is not materially
prejudicial to the interests of the Noteholders, and the Indenture Trustee may
rely on an Opinion of Counsel to such effect. The Indenture Trustee shall not be
required to execute any amendment that affects its rights, duties, immunities or
indemnities.

          Section 3.14 Representations; Negative Covenants.

                                       13

<PAGE>

          (a) The Issuer hereby makes the following representations and
warranties to the Indenture Trustee on which the Indenture Trustee relies in
authenticating the Notes and on which the Noteholders have relied in purchasing
the Notes. Such representations and warranties shall survive the grant of the
Trust Estate to the Indenture Trustee pursuant to this Indenture.

          (i) Organization and Good Standing. The Issuer is duly formed and
     validly existing under the laws of Delaware, and has the power to own its
     assets and to transact the business in which it presently engages.

          (ii) Due Qualification. The Issuer is duly qualified to do business
     and is in good standing, and has obtained all material necessary licenses
     and approvals, in all jurisdictions where the failure to be so qualified,
     have such good standing or have such licenses or approvals would have a
     material adverse effect on the Issuer's business and operations or in which
     the actions as required by this Indenture require or will require such
     qualification.

          (iii) Authorization. The Issuer has the power, authority and legal
     right to execute, deliver and perform this Indenture and to grant the Trust
     Estate to the Indenture Trustee, and the execution, delivery and
     performance of this Indenture and grant of the Trust Estate to the
     Indenture Trustee have been duly authorized by the Issuer.

          (iv) Binding Obligation. This Indenture, assuming due authorization,
     execution and delivery by the Indenture Trustee, constitutes a legal, valid
     and binding obligation of the Issuer enforceable against the Issuer in
     accordance with its terms, except that (A) such enforcement may be subject
     to bankruptcy, insolvency, reorganization, moratorium or other similar laws
     (whether statutory, regulatory or decisional) now or hereafter in effect
     relating to creditors' rights generally and (B) the remedy of specific
     performance and injunctive and other forms of equitable relief may be
     subject to certain equitable defenses and to the discretion of the court
     before which any proceeding therefor may be brought, whether a proceeding
     at law or in equity.

          (v) No Violation. The consummation of the transactions contemplated by
     this Indenture and the fulfillment of the terms hereof does not conflict
     with, result in any breach of any of the terms and provisions of or
     constitute (with or without notice, lapse of time or both) a default under
     the organizational documents of the Issuer, or any material indenture,
     agreement, mortgage, deed of trust or other instrument to which the Issuer
     is a party or by which it is bound, or result in the creation or imposition
     of any lien upon any of its material properties pursuant to the terms of
     any such indenture, agreement, mortgage, deed of trust or other instrument,
     other than this Indenture, nor violate any law or any order, rule or
     regulation applicable to the Issuer of any court or of any federal or state
     regulatory body, administrative agency, or other governmental
     instrumentality having jurisdiction over the Issuer or any of its
     properties.

          (vi) No Proceedings. There are no proceedings, injunctions, writs,
     restraining orders or investigations to which the Issuer or any of its
     affiliates is a party pending, or, to the best of the Issuer's knowledge,
     threatened, before any court, regulatory body, administrative agency, or
     other tribunal or governmental instrumentality (A) asserting the

                                       14

<PAGE>

     invalidity of this Indenture, (B) seeking to prevent the issuance of any
     Notes or the consummation of any of the transactions contemplated by this
     Indenture or (C) seeking any determination or ruling that might materially
     and adversely affect the performance by the Issuer of its obligations
     under, or the validity or enforceability of this Indenture.

          (vii) Approvals. All approvals, authorizations, consents, orders or
     other actions of any person, corporation or other organization, or of any
     court, governmental agency or body or official, required on the part of the
     Issuer in connection with the execution and delivery of this Indenture have
     been taken or obtained on or prior to the Date of Issuance.

          (viii) Place of Business. The Issuer's place of business and office is
     located at the Corporate Trust Office of the Co-Owner Trustee.

          (ix) Taxes. The Issuer has filed (or caused to be filed) all federal,
     state, county, local and foreign income, franchise and other tax returns
     required to be filed by it through the date hereof, and has paid all taxes
     reflected as due thereon. There is no pending dispute with any taxing
     authority that, if determined adversely to the Issuer, would result in the
     assertion by any taxing authority of any material tax deficiency, and the
     Issuer has no knowledge of a proposed liability for any tax year to be
     imposed upon its properties or assets for which there is not an adequate
     reserve reflected in its current financial statements.

          (x) Legal Name. The legal name of the Issuer is "Education Funding
     Capital Trust-I" and has not changed since its formation. The Issuer has no
     tradenames, fictitious names, assumed names or "dba's" under which it
     conducts its business and has made no filing in respect of any such name.

          (xi) Business Purpose. The Issuer has acquired the Financed Student
     Loans conveyed to it under the Depositor Transfer and Sale Agreement for a
     bona fide business purpose and has undertaken the transactions contemplated
     herein as principal rather than as an agent of any other person. The Issuer
     has adopted and operated consistently with all formalities with respect to
     its operations and has engaged in no other activities other than those
     specified in this Indenture and the Depositor Transfer and Sale Agreement
     and in accordance with the transactions contemplated herein and therein.

          (xii) Compliance With Laws. The Issuer is in compliance with all
     applicable laws and regulations with respect to the conduct of its business
     and has obtained and maintains all permits, licenses and other approvals as
     are necessary for the conduct of its operations.

          (xiii) Valid Business Reasons; No Fraudulent Transfers. The
     transactions contemplated by this Indenture are in the ordinary course of
     the Issuer's business and the Issuer has valid business reasons for
     granting the Trust Estate pursuant to this Indenture. At the time of each
     such grant: (A) the Issuer granted the Trust Estate to the Indenture
     Trustee without any intent to hinder, delay, or defraud any current or
     future creditor of the Issuer; (B) the Issuer was not insolvent and did not
     become insolvent as a result of any such grant; (C) the Issuer was not
     engaged and was not about to engage in any

                                       15

<PAGE>

     business or transaction for which any property remaining with it was an
     unreasonably small capital or for which the remaining assets of it are
     unreasonably small in relation to its business or the transaction; (D) the
     Issuer did not intend to incur, and did not believe or should not have
     reasonably believed, that it would incur, debts beyond its ability to pay
     as they become due; and (E) the consideration received by the Issuer for
     the grant of the Trust Estate was reasonably equivalent to the value of the
     related grant.

          (xiv) No Management of Affairs of Depositor. The Issuer is not and
     will not be involved in the day-to-day management of the Depositor.

          (xv) Ability to Perform. There has been no material impairment in the
     ability of the Issuer to perform its obligations under this Indenture.

          (xvi) Financial Condition. No material adverse change has occurred in
     the Issuer's financial status since the date of its formation.

          (xvii) Event of Default. No Event of Default has occurred and no event
     has occurred that, with the giving of notice, the passage of time, or both,
     would become an Event of Default.

          (xviii) Acquisition of Financed Student Loans Legal. The Issuer has
     complied with all applicable federal, state and local laws and regulations
     in connection with its acquisition of the Financed Student Loans from the
     Depositor.

          (xix) No Material Misstatements or Omissions. No information,
     certificate of an officer, statement furnished in writing or report
     delivered to the Indenture Trustee, the Servicer or any Noteholder by the
     Issuer contains any untrue statement of a material fact or omits a material
     fact necessary to make such information, certificate, statement or report
     not misleading.

          (b) The Issuer will not:

          (i) sell, transfer, exchange or otherwise dispose of any portion of
     the Trust Estate except as expressly permitted by this Indenture;

          (ii) claim any credit on, or make any deduction from, the principal
     amount of any of the Notes by reason of the payment of any taxes levied or
     assessed upon any portion of the Trust Estate;

          (iii) except as otherwise provided herein, dissolve or liquidate in
     whole or in part, except with the prior written consent of the Indenture
     Trustee, and to the extent Notes remain Outstanding, approval of the
     Noteholders and a Rating Confirmation;

          (iv) permit the validity or effectiveness of this Indenture, any
     Supplemental Indenture or any grant hereunder to be impaired, or permit the
     lien of this Indenture to be amended, hypothecated, subordinated,
     terminated or discharged, or permit any Person to be released from any
     covenants or obligations under this Indenture, except as may be expressly
     permitted hereby;

                                       16

<PAGE>

          (v) except as otherwise provided herein, permit any lien, charge,
     security interest, mortgage or other encumbrance (other than the lien of
     this Indenture) to be created on or extend to or otherwise arise upon or
     burden the Trust Estate or any part thereof or any interest therein or the
     proceeds thereof;

          (vi) permit the lien of this Indenture not to constitute a valid first
     priority, perfected security interest in the Trust Estate;

          (vii) incur or assume any indebtedness or guarantee any indebtedness
     of any Person whether secured by any Financed Student Loans under this
     Indenture or otherwise, except for such obligations as may be incurred by
     the Issuer in connection with the issuance of the Notes pursuant to this
     Indenture and unsecured trade payables in the ordinary course of its
     business;

          (viii) operate such that it would be consolidated with any affiliate
     and its separate existence disregarded in any federal or state proceeding;

          (ix) act as agent of the Depositor or allow the Depositor to act as
     its agent;

          (x) allow the Depositor or any other affiliate to pay its expenses,
     guarantee its obligations or advance funds to it for payment of expenses;
     or

          (xi) consent to the appointment of a conservator or receiver or
     liquidator in any insolvency, readjustment of debt, marshalling of assets
     and liabilities, voluntary liquidation or similar proceedings of or
     relating to the Issuer or of or relating to all or substantially all of its
     property, or admit in writing its inability to pay its debts generally as
     they become due, file a petition to take advantage of any applicable
     insolvency, bankruptcy or reorganization statute, make an assignment for
     the benefit of its creditors or voluntarily suspend payment of its
     obligations.

          (c) The Issuer makes the following representations and warranties as
to the Trust Estate granted to the Indenture Trustee hereunder on which the
Indenture Trustee relies in accepting the Trust Estate. Such representations and
warranties shall survive the grant of the Trust Estate to the Indenture Trustee
pursuant to this Indenture.

          (i) Financed Student Loans. Notwithstanding the definition of "Student
     Loans" herein, the Issuer covenants not to acquire Student Loans delinquent
     by more than 90 days.

          (ii) Schedule of Financed Student Loans. The information set forth in
     each Schedule of Financed Student Loans is true and correct in all material
     respects as of the opening of business on the Date of Issuance.

          (iii) Grant. It is the intention of the Issuer that the transfer
     herein contemplated constitutes a grant of the Financed Student Loans to
     the Indenture Trustee.

          (iv) All Filings Made. All filings (including, without limitation, UCC
     filings) necessary in any jurisdiction to give the Indenture Trustee a
     first priority perfected

                                       17

<PAGE>

     ownership and security interest in the Trust Estate, including the Financed
     Student Loans, have been made no later than the Date of Issuance and copies
     of the file-stamped financing statements shall be delivered to the
     Indenture Trustee within 5 Business Days of receipt by the Issuer or its
     agent from the appropriate secretary of state. The Issuer has not caused,
     suffered or permitted any lien, pledges, offsets, defenses, claims,
     counterclaims, charges or security interest with respect to the promissory
     notes relating to the Financed Student Loans (other than the security
     interest created in favor of the Indenture Trustee) to be created.

          (v) Transfer Not Subject to Bulk Transfer Act. Each grant of the
     Financed Student Loans by the Issuer pursuant to this Indenture is not
     subject to the bulk transfer act or any similar statutory provisions in
     effect in any applicable jurisdiction.

          (vi) No Transfer Taxes Due. Each grant of the Financed Student Loans
     (including all payments due or to become due thereunder) by the Issuer
     pursuant to this Indenture is not subject to and will not result in any
     tax, fee or governmental charge payable by the Issuer or the Depositor to
     any federal, state or local government.

          Section 3.15 Additional Covenants. So long as any of the Notes are
Outstanding:

          (a) The Issuer shall not engage in any business or activity other than
in connection with the activities contemplated hereby and in the Transfer and
Sale Agreements, and in connection with the issuance of Notes.

          (b) The Issuer shall not consolidate or merge with or into any other
entity or convey or transfer its properties and assets substantially as an
entirety to any entity except as otherwise provided herein.

          (c) The funds and other assets of the Issuer shall not be commingled
with those of any other individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.

          (d) The Issuer shall not be, become or hold itself out as being liable
for the debts of any other party.

          (e) The Issuer shall act solely in its own name and through its duly
Authorized Officers in the conduct of its business, and shall conduct its
business so as not to mislead others as to the identity of the entity with which
they are concerned.

          (f) The Issuer shall maintain its records and books of account and
shall not commingle its records and books of account with the records and books
of account of any other Person. The books of the Issuer may be kept (subject to
any provision contained in the statutes) inside or outside of Delaware at such
place or places as may be designated from time to time by the Issuer.

          (g) All actions of the Issuer shall be taken by a duly Authorized
Officer or agent of the Issuer.

                                       18

<PAGE>

          (h) The Issuer shall not amend, alter, change or repeal any provision
contained in this Section 3.15 without (i) the prior written consent of the
Indenture Trustee and (ii) a Rating Confirmation (a copy of which shall be
provided to the Indenture Trustee).

          (i) The Issuer shall not amend the Trust Agreement without first
obtaining the prior written consent of each Rating Agency.

          (j) All audited financial statements of the Issuer that are
consolidated with those of any affiliate thereof will contain detailed notes
clearly stating that (i) all of the Issuer's assets are owned by the Issuer, and
(ii) the Issuer is a separate entity with creditors who have received ownership
and/or security interests in the Issuer's assets.

          (k) The Issuer will strictly observe legal formalities in its dealings
with the Depositor or any affiliate thereof, and funds or other assets of the
Issuer will not be commingled with those of the Depositor or any other affiliate
thereof. The Issuer shall not maintain joint bank accounts or other depository
accounts to which the Depositor or any other affiliate has independent access.
None of the Issuer's funds will at any time be pooled with any funds of the
Depositor or any other affiliate.

          (l) The Issuer will maintain an arm's length relationship with the
Depositor (and any affiliate). Any Person that renders or otherwise furnishes
services to the Issuer will be compensated by the Issuer at market rates for
such services except as otherwise provided in this Indenture. Except as
contemplated in this Indenture, the Transfer and Sale Agreements, the Issuer
will not hold itself out to be responsible for the debts of the Depositor or the
decisions or actions respecting the daily business and affairs of the Depositor.

          Section 3.16 Providing of Notice. The Issuer, upon learning of any
failure on its part to observe or perform in any material respect any covenant,
representation or warranty of the Issuer set forth in this Indenture or the
Depositor Transfer and Sale Agreement, or of any failure on the part of the
Depositor to observe or perform in any material respect any covenant,
representation or warranty of the Depositor set forth in the Transfer and Sale
Agreements, shall promptly notify the Indenture Trustee, the Servicer and each
Rating Agency of such failure.

          Section 3.17 Reports by Issuer. At such time as the Notes are
registered with the Commission, the Issuer shall:

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

          (b) file with the Indenture Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Issuer with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and (c) transmit by mail to the
Noteholders, within 30 days after the filing thereof

                                       19

<PAGE>

with the Indenture Trustee, in the manner and to the extent provided in TIA
Section 313(c), such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (a) and (b) of this
Section 3.17 as may be required by rules and regulations prescribed from time to
time by the Commission.

          Section 3.18 Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee, within 120 days after the end of each Fiscal Year, a
brief certificate from an Authorized Officer as to his or her knowledge of the
Issuer's compliance with all conditions and covenants under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 3.18, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.

          Section 3.19 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. The Issuer covenants that if:

          (a) default is made in the payment of any installment of interest, if
any, on any Notes when such interest becomes due and payable; or

          (b) default is made in the payment of the principal of and premium, if
any, on any Notes at their Maturity,

          then the Issuer will, upon demand of the Indenture Trustee, pay to the
Indenture Trustee, for the benefit of the Noteholders, the whole amount then due
and payable on such Notes for principal and premium, if any, and interest, with
interest upon any overdue principal and premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon any overdue

installments of interest, if any, at the rate or rates borne by or provided for
in such Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

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

          If an Event of Default with respect to Notes occurs and is continuing
of which a Responsible Officer has actual knowledge, the Indenture Trustee may,
after being indemnified to its satisfaction and in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders by such
appropriate judicial proceedings as the Indenture Trustee shall deem appropriate
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

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<PAGE>

          Section 3.20 Representations of the Issuer Regarding the Indenture
Trustee's Security Interest. The Issuer hereby represents and warrants for the
benefit of the Indenture Trustee and the Noteholders as follows:

          (a) This Indenture creates a valid and continuing security interest
(as defined in the applicable Uniform Commercial Code in effect in the State of
Delaware) in the Financed Student Loans in favor of the Indenture Trustee, which
security interest is prior to all other liens, charges, security interests,
mortgages or other encumbrances, and is enforceable as such as against creditors
of and purchasers from Issuer.

          (b) The Financed Student Loans constitute either "general intangibles"
or "instruments" within the meaning of the applicable UCC.

          (c) The Issuer owns and has good and marketable title to the Financed
Student Loans free and clear of any lien, charge, security interest, mortgage or
other encumbrance, claim or encumbrance of any Person.

          (d) The Issuer has caused or will have caused, within 10 days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Financed Student Loans granted to the Indenture Trustee
hereunder.

          (e) All executed copies of each promissory note that constitute or
evidence the Financed Student Loans have been delivered to either the Indenture
Trustee or the Custodian.

          (f) The Issuer has received a written acknowledgment from each
Custodian that such Custodian is holding the promissory notes that constitute or
evidence the Financed Student Loans solely on behalf and for the benefit of the
Indenture Trustee.

          (g) Other than the security interest granted to the Indenture Trustee
pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted
a security interest in, or otherwise conveyed any of the Financed Student Loans;
the Issuer has not authorized the filing of and is not aware of any financing
statements against the Issuer that include a description of collateral covering
the Financed Student Loans other than any financing statement relating to the
security interest granted to the Indenture Trustee hereunder or that has been
terminated; and the Issuer is not aware of any judgment or tax lien filings
against Issuer.

          The representations and warranties set forth in this Section 3.20
shall survive the termination of this Indenture. The Indenture Trustee shall not
waive any of the representations and warranties set forth in this Section 3.20.

          Section 3.21 Covenants of the Issuer Regarding the Indenture Trustee's
Security Interest. The Issuer hereby covenants for the benefit of the Indenture
Trustee and the Noteholders that the Issuer shall take all steps necessary, and
shall cause the Servicers to take all steps necessary and appropriate, to
maintain the perfection and priority of the Indenture Trustee's security
interest in the Financed Student Loans.

          Section 3.22 Certain Tax Forms and Treatment.

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<PAGE>

          (a) Each Noteholder and any beneficial owner of a Note, if required by
law, shall timely furnish the Issuer or its agents any U.S. federal income tax
form or certification (such as IRS Form W-8BEN (Certification of Foreign Status
as Beneficial Owner), Form W-8IMY (Certification of Foreign Intermediary Status)
with all appropriate attachments, IRS Form W-9 (Request for Taxpayer
Identification Number and Certification), or IRS Form W-8ECI (Certification of
Foreign Person's Claim for Exemption from Withholding on Income Effectively
Connected with Conduct of a U.S. Trade or Business) or any successors to such
IRS forms) that the Issuer or its agents may reasonably request and shall update
or replace such form or certification in accordance with its terms or its
subsequent amendments. The Noteholder understands that the Issuer may require
certification acceptable to it (a) to permit the Issuer to make payments to it
without, or at a reduced rate of, withholding or (b) to enable the Issuer to
qualify for a reduced rate of withholding or back-up withholding in any
jurisdiction from or through which the Issuer receives payments on its assets.
The Noteholder agrees to provide any such certification that is requested by the
Issuer.

          (b) The Issuer, the Co-Owner Trustee, the Depositor, the Indenture
Trustee and each Noteholder of Senior Notes and Subordinated Notes agree to
treat such Notes as indebtedness for U.S. federal, state and local income and
franchise tax purposes and further agree not to take any action inconsistent
with such treatment, unless required by law.

          (c) None of the Issuer, the Depositor, or the Indenture Trustee shall
cause the Issuer to be treated as a separate entity that is an association
taxable as a corporation for U.S. federal income tax purposes.

          (d) The Administrator shall on behalf of the Issuer prepare, execute
and timely file (or cause to be prepared, appropriately executed and timely
filed) all federal, state and local tax and information returns, reports,
information, statements and schedules required to be filed by or in respect of
the Issuer, in accordance with this Indenture and as may be required under
applicable tax laws.

          (e) The Issuer intends to treat the transactions contemplated by the
Depositor Transfer and Sale Agreement as an absolute transfer, and not a pledge,
of the Financed Student Loans from the Depositor for financial accounting
purposes. The Issuer and the Depositor intend to treat the Notes as indebtedness
of the Depositor (or, if both the Issuer and the Depositor are "disregarded
entities," of the sole owner of the Depositor) and the Issuer assets as assets
owned by the Depositor (or, if both the Issuer and the Depositor are
"disregarded entities," of the sole owner of the Depositor) for U.S. federal
income tax purposes.

                                   Article IV

                                      Funds

          Section 4.01 Creation and Continuation of Funds and Accounts.

          (a) There are hereby created and established the following Funds and
Accounts to be held and maintained by the Indenture Trustee for the benefit of
the Noteholders:

          (i)  Acquisition Fund;

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<PAGE>

          (ii) Revenue Fund;

          (iii) Interest Fund (including therein a Class A Account and a Class B
                Account);

          (iv) Principal Fund (including therein a Class A Account and a Class B
               Account);

          (v)  Reserve Fund; and

          (vi) Capitalized Interest Fund.

          (b) The Operating Fund will be established separately by the Issuer,
and will not constitute a Fund within the meaning of this Indenture, and is held
by a depository bank of the Issuer for the benefit of the Issuer; and the
Noteholders shall have no right, title or interest therein.

          The Indenture Trustee is hereby authorized for the purpose of
facilitating the administration of the Trust Estate and for the administration
of any Notes issued hereunder to create further Accounts or Subaccounts in any
of the various Funds and Accounts established hereunder that are deemed
necessary or desirable.

          Section 4.02 Acquisition Fund. There shall be deposited into the
Acquisition Fund moneys from proceeds of any Notes. Financed Student Loans shall
be held by the Indenture Trustee or its agent or bailee and shall be pledged to
the Trust Estate and accounted for as a part of the Acquisition Fund.

          Moneys on deposit in the Acquisition Fund shall be used, upon Issuer
Order, solely to pay costs of issuance of the Notes, to redeem Notes in
accordance with the provisions of any Supplemental Indenture, and, upon receipt
by the Indenture Trustee of a Student Loan Acquisition Certificate, to acquire
Student Loans at a price that would permit the results of the Cash Flows
provided to each Rating Agency on any Date of Issuance to be sustained as
certified to the Indenture Trustee on the Student Loan Acquisition Certificate;
provided that such price may be increased if Rating Confirmation is obtained,
based on new Cash Flows containing such assumptions as the Issuer shall
reasonably determine.

          No amounts shall be transferred from the Acquisition Fund to acquire
or originate Student Loans having characteristics that are materially and
adversely different from the characteristics of the Financed Student Loans shown
in the most recent Cash Flows provided to the Rating Agencies, which
characteristics include but are not limited to loan type, federal benefits,
applicable borrower benefit programs, and provisions and servicing of such
Financed Student Loans required by the Act as amended through the date hereof,
unless the Issuer first obtains a Rating Confirmation.

          Any such Issuer Order or Student Loan Acquisition Certificate shall
state that such proposed use of moneys in the Acquisition Fund is in compliance
with the provisions of this Indenture. If the Issuer determines that all or any
portion of such moneys cannot be so used, then

                                       23

<PAGE>

an Authorized Officer of the Issuer may, by Issuer Order, direct the Indenture
Trustee to redeem Notes in accordance with any Supplemental Indenture.

          Notwithstanding the foregoing, if on any Payment Date there are not
sufficient moneys on deposit in the Interest Fund, the Principal Fund or the
Capitalized Interest Fund to make the transfers required by Section 4.03(b)(i)
through (iv) hereof, then an amount equal to any such deficiency may, upon
Issuer Order, be transferred directly from the Acquisition Fund.

          While the Issuer will be the beneficial owner of Financed Student
Loans that were originated under the Act and the Noteholders will have a
security interest therein, it is understood and agreed that the Trust Eligible
Lender Trustee will be the legal owner thereof and the Indenture Trustee will
have a security interest in such Financed Student Loans for and on behalf of the
Noteholders. The notes representing Financed Student Loans that were originated
under the Act will be held in the name of the Trust Eligible Lender Trustee for
the account of the Issuer, for the benefit of the Noteholders.

          Section 4.03 Revenue Fund.

          (a) The Indenture Trustee shall deposit into the Revenue Fund all
Revenues derived from Financed Student Loans acquired by the Issuer, all other
Revenue derived from moneys or assets on deposit in the Acquisition Fund, the
Interest Fund, the Principal Fund and the Reserve Fund, all Counterparty
Derivative Payments, moneys transferred from the Acquisition Fund or Capitalized
Interest Fund as provided herein, and any other amounts to be deposited therein
pursuant to and upon receipt of an Issuer Order. Upon receipt of an Issuer Order
substantially in the form of Exhibit B hereto, directing the same, moneys in the
Revenue Fund shall be used, on any date, to make a transfer to the Operating
Fund to pay Program Expenses, subject to Section 4.07 hereof.

          (b) On the last Business Day of each month, money remaining in the
Revenue Fund shall be used and transferred to other funds or Persons in the
following order of precedence, or as otherwise specified in a Supplemental
Indenture (any money not so transferred or paid to remain in the Revenue Fund
until subsequently applied pursuant to this Section 4.03(b)):

          (i) to the Class A Account of the Interest Fund, after giving effect
     to any money already on deposit in the Class A Account of the Interest Fund
     for such purposes, the amount necessary to pay (a) the interest payments
     due in the next succeeding month in respect of each Series of Senior Notes
     for which a Payment Date will occur in that month; provided, however, that
     if the interest rate on such Series of Senior Notes is unknown, the amount
     to be transferred shall be calculated using the last known interest rate
     for such Series, (b) the interest to accrue during the next succeeding
     month in respect of each Series of Senior Notes for which a Payment Date
     will not occur in that month, and (c) any Issuer Derivative Payments due in
     the next succeeding month in respect of any Derivative Product secured on a
     parity with the Senior Notes;

          (ii) to the Class A Account of the Principal Fund, after giving effect
     to any money already on deposit in the Class A Account of the Principal
     Fund for such purpose,

                                       24

<PAGE>

     the amount necessary to pay the principal of and premium, if any, on each
     Series of Senior Notes due at Stated Maturity in the next succeeding month;

          (iii) to the Class B Account of the Interest Fund, after giving effect
     to any money already on deposit in the Class B Account of the Interest Fund
     for such purposes, the amount necessary to pay (a) the interest payments
     due in the next succeeding month in respect of each Series of Subordinate
     Notes for which a Payment Date will occur in that month; provided, however,
     that if the interest rate on such Series of Subordinate Notes is unknown,
     the amount to be transferred shall be calculated using the last known
     interest rate for such Series, (b) the interest to accrue during the next
     succeeding month in respect of each Series of Subordinate Notes for which a
     Payment Date will not occur in that month, and (c) any Issuer Derivative
     Payments due in the next succeeding month in respect of any Derivative
     Product secured on a parity with the Subordinate Notes;

          (iv) to the Class B Account of the Principal Fund, after giving effect
     to any money already on deposit in the Class B Account of the Principal
     Fund for such purpose, the amount necessary to pay the principal of and
     premium, if any, on any Subordinate Notes due at Stated Maturity in the
     next succeeding month;

          (v) to the Reserve Fund the amount, if any, required by Section
     4.06(d) hereof;

          (vi) if the Parity Percentage is not at least equal to the Required
     Parity Percentage, to the Class A Account of the Principal Fund, after
     giving effect to any money already on deposit in the Class A Account of the
     Principal Fund for such purposes, the amount necessary to pay the principal
     of and premium, if any, on Senior Notes for which an interest Payment Date
     will occur in the next succeeding month, or if no Senior Notes are
     Outstanding, to the Class B Account of the Principal Fund the amount
     necessary to pay principal of and premium, if any, on Subordinate Notes for
     which an interest Payment Date will occur in the next succeeding month;
     provided, however, that during any Revolving Period, at the direction of
     the Issuer, amounts remaining in the Revenue Fund after payment of all
     amounts required by (i) through (v) of this Section 4.03(b) may be used for
     the acquisition or origination of other Student Loans and, provided,
     further, at the direction of the Issuer, such excess amounts may also be
     used to acquire Add-on Consolidation Loans originated within 180 days of
     the origination of the related Consolidation Loan;

          (vii) to the Class B Account of the Principal Fund, after giving
     effect to any money already on deposit in the Class B Account of the
     Principal Fund for such purpose, from amounts representing Recoveries of
     Principal, the amount necessary to pay principal of and premium, if any, on
     Subordinate Notes in respect of which an interest Payment Date will occur
     in the next succeeding month to the extent that, after such payment the
     Senior Parity Percentage shall not be less than the Required Senior Parity
     Percentage; otherwise to the Class A Account of the Principal Fund to pay
     principal and premium, if any, on Senior Notes in respect of which an
     interest Payment Date will occur in the next succeeding month;

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<PAGE>

          (viii) to the Class A Account of the Interest Fund, after giving
     effect to any money already on deposit in the Class A Account of the
     Interest Fund for such purpose, the amount necessary to pay interest
     accrued on the interest carryover amounts of the Senior Notes and the
     interest carryover amounts of the Senior Notes, and to the Class B Account
     of the Interest Fund, after giving effect to any money already on deposit
     in the Class B Account of the Interest Fund for such purpose, the amount
     necessary to pay interest accrued on the interest carryover amounts of the
     Subordinate Notes and the interest carryover amounts of the Subordinate
     Notes, in that order of priority; provided, however, on any Payment Date,
     any such amount shall be allocated first to any Notes being redeemed on
     such Payment Date; and

          (ix) to the Co-Owner Trustee for deposit into the Certificate
     Distribution Account (as defined in the Trust Agreement) if after giving
     effect to the transfer to the Co-Owner Trustee the Parity Percentage is at
     least equal to the Required Parity Percentage and the Senior Parity
     Percentage is at least equal to the Required Senior Parity Percentage; if
     these parity requirements are not met, then any remainder shall be retained
     in the Revenue Fund; provided, however, that during any period commencing
     after June 1, 2022, moneys will be transferred to the Co-Owner Trustee
     pursuant to this subsection (ix) only upon receipt of a Rating Confirmation
     with respect to transfers during that period, otherwise moneys remaining in
     the Revenue Fund after payment of all amounts required by (i) through
     (viii) of this Section 4.03(b) shall be retained in the Revenue Fund and
     subsequently distributed as provided in (i) through (viii) of this Section
     4.03(b).

          All payments of principal on the Notes shall be made by redemption of
the Notes unless otherwise directed in a Supplemental Indenture.

          (c) As long as any Senior Notes remain Outstanding, the above payment
     order will be modified if, after giving effect to the payments on any
     Payment Date, a payment Event of Default has occurred under this Indenture
     (in which event amounts will be applied as provided herein with respect to
     Events of Default).

          In such event, the Subordinate Notes shall not receive any payments of
interest or principal and Issuer Derivative Payments that are secured on a
parity with the Subordinate Notes shall not be made. Any such deferral of
payments on the Subordinate Notes shall not constitute an Event of Default under
this Indenture.

          Section 4.04 Interest Fund.

          (a) On the last Business Day of each month, the Indenture Trustee
shall transfer to the Class A Account of the Interest Fund from the Revenue Fund
amounts necessary to make the transfers required by Section 4.03(b)(i) hereof.
During the next succeeding month, the Indenture Trustee shall use moneys
transferred to the Class A Account of the Interest Fund pursuant to Section
4.03(b)(i) hereof for the payment, on a parity basis, of interest due on Senior
Notes for which an interest Payment Date will occur during that month and any
Issuer Derivative Payments due during that month on any Derivative Product
secured on a parity with such Senior Notes. Also during that month, the
Indenture Trustee shall use moneys transferred to the Class A

                                       26

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Account of the Interest Fund pursuant to Section 4.03(b)(viii) to pay interest
accrued on the interest carryover amounts of Senior Notes for which an interest
Payment Date will occur during that month and the interest carryover amounts of
such Senior Notes.

          (b) On the last Business Day of each month, the Indenture Trustee
shall transfer to the Class B Account of the Interest Fund from the Revenue Fund
amounts necessary to make the transfers required by Section 4.03(b)(iii) hereof.
During the next succeeding month, the Indenture Trustee shall use moneys
transferred to the Class B Account of the Interest Fund pursuant to Section
4.03(b)(iii) hereof for the payment, on a parity basis, of interest due on
Subordinate Notes for which an interest Payment Date will occur during that
month and any Issuer Derivative Payments due during that month on any Derivative
Product secured on a parity with such Subordinate Notes. Also during that month,
the Indenture Trustee shall use moneys transferred to the Class B Account of the
Interest Fund pursuant to Section 4.03(b)(viii) to pay interest accrued on the
interest carryover amounts of Subordinate Notes for which an interest Payment
Date will occur during that month and the interest carryover amounts of such
Subordinate Notes.

          (c) If moneys sufficient to pay all interest due on the Senior Notes
or Subordinate Notes or any Issuer Derivative Payments due on any Derivative
Product secured on a parity with such Notes is not available in the related
Account of the Interest Fund on the first Business Day preceding the related
Note Payment Date or Derivative Payment Date, the Indenture Trustee shall
withdraw the amount of any such deficiency from moneys available in the
Capitalized Interest Fund or the Reserve Fund, in that order of priority.

          Section 4.05 Principal Fund.

          (a) On the last Business Day of each month, the Indenture Trustee
shall transfer to the appropriate Account of the Principal Fund from the Revenue
Fund amounts necessary to make the transfers required by Section 4.03(b) hereof.
The Indenture Trustee shall use moneys in the Class A Account of the Principal
Fund for the payment of principal due on the Senior Notes, whether at their
Stated Maturity or upon redemption of such Notes. The Indenture Trustee shall
use moneys in the Class B Account of the Principal Fund for the payment of
principal due on the Subordinate Notes, whether at their Stated Maturity or upon
redemption of such Notes.

          (b) If moneys sufficient to pay principal due on the Senior Notes or
Subordinate Notes at their Stated Maturity is not available in the related
Account of the Principal Fund on the first Business Day preceding their Stated
Maturity, the Indenture Trustee shall withdraw the amount of any such deficiency
from moneys available in the Reserve Fund.

          (c) If the Parity Percentage is not at least equal to the Required
Parity Percentage on the last Business Day of any month, during the next
succeeding month the Indenture Trustee shall use moneys in the Class A Account
of the Principal Fund to pay the principal of and premium, if any, on Senior
Notes for which an interest Payment Date will occur in that month, or if no
Senior Notes are Outstanding, the Indenture Trustee shall use moneys in the
Class B Account of the Principal Fund to pay principal of and premium, if any,
on

                                       27

<PAGE>

Subordinate Notes for which an interest Payment Date will occur in that month,
until the Parity Percentage is at least equal to the Required Parity Percentage.

          (d) On each Payment Date, the Indenture Trustee shall use moneys in
the Class B Account of the Principal Fund representing Recoveries of Principal
to pay principal of and premium, if any, on Subordinate Notes in respect of
which interest is due on that Payment Date, but only to the extent that, after
such payment the Senior Parity Percentage will not be less than the Required
Senior Parity Percentage; provided, however, if the Senior Parity Percentage is
less than the Required Senior Parity Percentage on that Payment Date, the
Indenture Trustee shall use moneys in the Class A Account of the Principal Fund
representing Recoveries of Principal to pay principal and premium, if any, on
Senior Notes in respect of which interest is due on that Payment Date.

          (e) Moneys in the Principal Fund shall be used at the option of the
Issuer to redeem Notes in accordance with the Supplemental Indenture authorizing
the issuance of such Notes.

          Section 4.06 Reserve Fund.

          (a) The Indenture Trustee shall deposit to the Reserve Fund the
amount, if any, specified in each Supplemental Indenture. On each Payment Date,
to the extent there are insufficient moneys in the Revenue Fund to make the
transfers required by Sections 4.03(b)(i) through (iv) hereof, the amount of
such deficiency shall be paid directly from the Reserve Fund if such deficiency
has not been paid from the Acquisition Fund or the Capitalized Interest Fund.

          (b) Money in the Reserve Fund may be used to pay principal on the
Notes only on the date of their Stated Maturity.

          (c) An amount specified in a Supplemental Indenture may be withdrawn
from the Reserve Fund, free from the lien of the Indenture on the dates
described therein.

          (d) If the Reserve Fund is used for the purposes described in Section
4.06(a)-(c) hereof, the Indenture Trustee shall restore the Reserve Fund to the
Reserve Fund Requirement with respect thereto by transfers from the Revenue Fund
on the next Payment Date pursuant to Section 4.03(b)(v) hereof. If the full
amount required to restore the Reserve Fund to the applicable Reserve Fund
Requirement is not available in the Revenue Fund on such next succeeding Payment
Date, the Indenture Trustee shall continue to transfer funds from the Revenue
Fund as they become available and in accordance with Section 4.03(b)(v) hereof
until the deficiency in the Reserve Fund has been eliminated.

          (e) On any day that the amount in the Reserve Fund exceeds the Reserve
Fund Requirement with respect thereto, the Indenture Trustee, at the direction
of the Issuer, shall transfer the excess to the Revenue Fund.

          (f) On the date of redemption of all of the Notes, at the direction of
the Issuer, the Indenture Trustee shall transfer all moneys in the Reserve Fund
to the Revenue Fund.

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<PAGE>

          If at any time the balance in the Reserve Fund, together with other
available funds of the Issuer on deposit with the Indenture Trustee, shall be
sufficient to retire all Notes Outstanding, such balance may be applied at the
direction of the Issuer to retire all Notes Outstanding.

          Section 4.07 Operating Fund. The Indenture Trustee shall deposit to
the Operating Fund or transfer to an Eligible Deposit Account at the Issuer's
depository bank if not the Indenture Trustee, the amount, if any, specified in
each Supplemental Indenture. The Operating Fund is a special fund created with a
depository bank of the Issuer and shall be used to pay Program Expenses. The
Operating Fund shall be held by such depository bank of the Issuer, and no
Noteholder shall have any right, title or interest in the Operating Fund.
Amounts deposited in the Operating Fund shall be used to pay Program Expenses.

          The amount deposited in the Operating Fund by transfer from the
Revenue Fund and, if necessary, from the Acquisition Fund, and the schedule of
deposits shall be determined by the Issuer, but the amount so transferred in any
one Fiscal Year shall not exceed the amount budgeted by the Issuer as Program
Expenses for such Fiscal Year with respect to the Notes and as may be limited by
a Supplemental Indenture, and shall not exceed the amount designated therefor in
the Cash Flows provided to each Rating Agency on each Date of Issuance, unless
the Issuer, after furnishing each Rating Agency with revised Cash Flows, shall
have received a Rating Confirmation. The Issuer shall provide the Indenture
Trustee with an Issuer Order from time to time as to the amount to be
transferred.

          At any time in order to meet expenses that have been incorporated in
an amended budget, the Issuer may requisition from the Indenture Trustee the
amount that it is anticipated will be required to pay the Program Expenses not
in excess of the amount budgeted with respect to the Notes for the period to the
next deposit into the Operating Fund. The requisition, in the form of an Issuer
Order, shall include a statement that the amount requisitioned, when combined
with the amount requisitioned previously in the Fiscal Year, does not exceed the
amount currently budgeted for that year as Program Expenses or as may be further
limited by a Supplemental Indenture.

          Upon the receipt of such requisition, the Indenture Trustee shall
withdraw the amount requisitioned from the Revenue Fund, and if necessary, from
the Acquisition Fund (or so much thereof as is then on deposit in such Funds)
and transfer the same into the Operating Fund; provided, however, if (a) the
Parity Percentage and Senior Parity Percentage, calculated as of the month in
which such Program Expense are to be paid, is not at least equal to 98% and
103%, respectively, or (b) the interest rate on any Series of Notes has been set
at the Net Loan Rate (as defined in the Supplemental Indenture authorizing the
issuance of such Notes) during the previous 12 months, amounts otherwise payable
to the Administrator or the Servicer for each of their services as Administrator
or Servicer (not including amounts payable to the Administrator or Servicer in
respect of fees payable by the Administrator or Servicer to third parties) shall
not be deposited into the Operating Fund. The Issuer may request that the
Indenture Trustee pay the requisitioned amount in installments as specified by
the Issuer. In the event there is not sufficient money on hand in the Revenue
Fund and the Acquisition Fund to transfer the full amount requisitioned, the
Indenture Trustee shall notify the Issuer and the Issuer shall then determine
the amount to be transferred.

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<PAGE>

          Section 4.08 Transfers to Co-Owner Trustee. Transfers from the Revenue
Fund to the Co-Owner Trustee may be made in accordance with Section 4.03(b)(ix)
hereof; provided, however, that no transfer of assets to the Co-Owner Trustee
shall be made if there is not on deposit in the Reserve Fund an amount equal to
at least the Reserve Fund Requirement; and further provided, that no transfer
shall be made to the Co-Owner Trustee unless immediately after taking into
account any such transfer, the Parity Percentage is at least equal to the
Required Parity Percentage and the Senior Parity Percentage is at least equal to
the Required Senior Parity Percentage.

          The amounts so transferred to the Co-Owner Trustee shall be
distributed as provided in the Trust Agreement.

          Section 4.09 Capitalized Interest Fund. The Indenture Trustee shall
deposit to the Capitalized Interest Fund or transfer to an Eligible Deposit
Account at the Issuer's depository bank if not the Indenture Trustee, the
amount, if any, specified in each Supplemental Indenture. On each Payment Date,
to the extent there are insufficient moneys in the Interest Fund to make the
transfers required by Sections 4.03(b)(i) and (iii) hereof, to the extent of
moneys in the Capitalized Interest Fund the amount of such deficiency shall be
paid from the Capitalized Interest Fund before any amounts are transferred from
the Reserve Fund pursuant to Section 4.06(a) hereof. Amounts remaining in the
Capitalized Interest Fund on April 4, 2004 will be transferred to the Revenue
Fund and, subject to the Rating Agency Condition, may be transferred on an
earlier date.

          Section 4.10 Investment of Funds Held by Indenture Trustee. The
Indenture Trustee shall invest money held for the credit of any Fund or Account
or Subaccount held by the Indenture Trustee hereunder as directed in writing by
an Authorized Officer of the Issuer, to the fullest extent practicable and
reasonable, in Eligible Investments that shall mature or be redeemed prior to
the respective dates when the money held for the credit of such Fund or Account
will be required for the purposes intended. In the absence of any such direction
and to the extent practicable, the Indenture Trustee shall invest amounts held
hereunder in those Eligible Investments described in clause (a) of the
definition of the Eligible Investments. The Indenture Trustee and the Issuer
hereby agree that unless an Event of Default shall have occurred hereunder, the
Issuer acting by and through an Authorized Officer shall be entitled to, and
shall, provide written direction or oral direction confirmed in writing to the
Indenture Trustee with respect to any discretionary acts required or permitted
of the Indenture Trustee under any Eligible Investments and the Indenture
Trustee shall not take such discretionary acts without such written direction.

          The Eligible Investments purchased shall be held by the Indenture
Trustee and shall be deemed at all times to be part of such Fund or Account or
Subaccounts or combination thereof, and the Indenture Trustee shall inform the
Issuer of the details of all such investments. Upon direction in writing from an
Authorized Officer of the Issuer, the Indenture Trustee shall use its best
efforts to sell at the best price obtainable, or present for redemption, any
Eligible Investments purchased by it as an investment whenever it shall be
necessary to provide money to meet any payment from the applicable Fund. The
Indenture Trustee shall advise the Issuer in writing, on or before the fifteenth
day of each calendar month (or such later date as reasonably consented to by the
Issuer), of all investments held for the credit of each Fund in its custody

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<PAGE>

under the provisions of this Indenture as of the end of the preceding month and
the value thereof, and shall list any investments that were sold or liquidated
for less than their Value at the time thereof.

          Money in any Fund constituting a part of the Trust Estate may be
pooled for the purpose of making investments and may be used to pay accrued
interest on Eligible Investments purchased. The Indenture Trustee and its
affiliates may act as principal or agent in the acquisition or disposition of
any Eligible Investments.

          Notwithstanding the foregoing, the Indenture Trustee shall not be
responsible or liable for any losses on investments made by it hereunder or for
keeping all Funds held by it fully invested at all times, its only
responsibility being to comply with the investment instructions of the Issuer or
its designee in a non-negligent manner. The Indenture Trustee shall have no
liability in respect of losses incurred as a result of liquidation of any
Eligible Investment prior to its stated maturity or failure to provide timely
written directions.

          The Issuer acknowledges that to the extent the regulations of the
Comptroller of the Currency or other applicable regulatory agency grant the
Issuer the right to receive brokerage confirmations of security transactions,
the Issuer waives receipt of such confirmations.

          Section 4.11 Indenture Trustee's Control over the Trust Accounts. The
Indenture Trustee, on behalf of the Noteholders and any Counterparties, shall
possess all right, title and interest in all funds on deposit from time to time
in the Trust Accounts and in all proceeds thereof (including all income thereon)
and all such funds, investments, proceeds and income shall be part of the Trust
Estate. The Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders and any Counterparties. If,
at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account,
the Indenture Trustee agrees, by its acceptance hereto, that it shall within ten
(10) Business Days (or such longer period, not to exceed thirty (30) calendar
days, as to which each Rating Agency may consent) establish a new Trust Account
as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Trust Account. In connection with the foregoing, the
Issuer agrees that, in the event that any of the Trust Accounts are not accounts
with the Indenture Trustee, the Issuer shall notify the Indenture Trustee and
any Counterparties in writing promptly upon any of such Trust Accounts ceasing
to be an Eligible Deposit Account.

          With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:

          (a) any Trust Account Property that is held in deposit accounts shall
be held solely in Eligible Deposit Accounts and each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the Indenture
Trustee, and the Indenture Trustee shall have sole signature authority with
respect thereto;

          (b) any Trust Account Property that constitutes Physical Property
shall be Delivered to the Indenture Trustee in accordance with paragraph (a) of
the definition of "Delivery;" any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be Delivered in accordance

                                       31

<PAGE>

with paragraph (b) of the definition of "Delivery"; and any Trust Account
Property that is an "uncertificated security" under Article VIII of the UCC and
that is not governed by clause (3) above shall be Delivered to the Indenture
Trustee in accordance with paragraph (c) of the definition of "Delivery."

          Section 4.12 Release; Sale of Financed Student Loans. The Indenture
Trustee shall, upon Issuer Order and subject to the provisions of this Indenture
and the Rating Agency Condition, take all actions reasonably necessary to effect
the release of any Financed Student Loans from the lien of this Indenture;
provided, however, if all Notes Outstanding bear interest at an Auction Note
Interest Rate (as defined in the Supplemental Indenture(s) authorizing the
issuance of such Notes) and the release of Financed Student Loans will not cause
the Parity Percentage or the Senior Parity Percentage to fall below the Required
Parity Percentage or the Required Senior Parity Percentage, respectively, then
Financed Student Loans aggregating on a cumulative basis no more than 5% of the
Value of the Trust Estate may be released from the lien of this Indenture
without satisfying the Rating Agency Condition.

          Section 4.13 Purchase of Notes. Pursuant to this Indenture, any
amounts held under this Indenture that are available to redeem Notes may instead
be used to purchase Notes outstanding under this Indenture at the same times and
subject to the same conditions (except as to price) as apply to the redemption
of Notes.

                                    Article V

                              Defaults and Remedies

          Section 5.01 Events of Default Defined. For the purpose of this
Indenture, the following events are hereby defined as, and are declared to be,
"Events of Default":

          (a) default in the due and punctual payment of the principal of or
interest on any of the Senior Notes when due or failure to make any payment due
under any other Senior Obligations hereunder when due;

          (b) if no Senior Obligations are Outstanding hereunder, default in the
due and punctual payment of the principal of or interest on any of the
Subordinate Notes or failure to make any payment due under any other Subordinate
Obligation when due;

          (c) default in the performance or observance of any other of the
covenants, agreements, or conditions on the part of the Issuer to be kept,
observed, and performed contained in this Indenture or in the Notes, and
continuation of such default for a period of 90 days after written notice
thereof by the Indenture Trustee to the Issuer; and

          (d) the occurrence of an Event of Bankruptcy with respect to the
Issuer.

          Failure to pay interest carryover amounts or interest on interest
carryover amounts shall not constitute an Event of Default.

          Any notice herein provided to be given to the Issuer with respect to
any default shall be deemed sufficiently given if sent by registered mail with
postage prepaid to the Person to

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<PAGE>

be notified, addressed to such Person at the post office address as shown in
Section 8.01 hereof or such other address as may hereafter be given as the
principal office of the Issuer in writing to the Indenture Trustee by an
Authorized Officer of the Issuer. The Indenture Trustee shall give such notice
if requested to do so in writing by the Noteholders of at least a majority of
the principal amount of the Highest Priority Obligations at the time Outstanding
("Noteholder Approval").

          Section 5.02 Remedy on Default; Possession of Trust Estate. Subject to
Section 5.09 hereof, upon the happening and continuance of any Event of Default,
the Indenture Trustee personally or by its attorneys or agents may enter into
and upon and take possession of such portion of the Trust Estate as shall be in
the custody of others, and all property comprising the Trust Estate, and each
and every part thereof, and exclude the Issuer and its agents, servants, and
employees wholly therefrom, and have, hold, use, operate, manage, and control
the same and each and every part thereof, and in the name of the Issuer or
otherwise, as they shall deem best, conduct the business thereof and exercise
the privileges pertaining thereto and all the rights and powers of the Issuer
and use all of the then existing Trust Estate for that purpose, and collect and
receive all charges, income and Revenue of the same and of every part thereof,
and after deducting therefrom all expenses incurred hereunder and all other
proper outlays herein authorized, and all payments that may be made as just and
reasonable compensation for its own services, and for the services of its
attorneys, agents, and assistants (and any other amounts due and owing including
amounts due and owing to the Owner Trustee and Co-Owner Trustee), the Indenture
Trustee shall apply the rest of the money received by the Indenture Trustee as
follows:

          (a) if the principal of none of the Obligations shall have become due,
first, to the payment of the interest in default on the Senior Notes and to the
payment of all Issuer Derivative Payments secured on a parity with the Senior
Notes then due, in order of the maturity of the installments thereof, with
interest on the overdue installments thereof at the same rates, respectively, as
were borne by the Senior Notes on which such interest shall be in default and
any such Issuer Derivative Payments as provided in the ISDA Master Agreement
then due, such payments to be made ratably to the parties entitled thereto
without discrimination or preference, second, to the payment of the interest in
default on the Subordinate Notes and to the payment of all Issuer Derivative
Payments secured on a parity with the Subordinate Notes then due, in order of
the maturity of the installments of such interest and any such Issuer Derivative
Payments, with interest on the overdue installments thereof at the same rates,
respectively, as were borne by the Subordinate Notes on which such interest
shall be in default and any such Issuer Derivative Payments then due, such
payments to be made ratably to the parties entitled thereto without
discrimination or preference, and third, to the payment of the interest in
default on any other borrowings of the Issuer, if any, secured hereby and to the
payment of all Issuer Derivative Payments secured on a parity with such
borrowings, if any, then due, in order of the maturity of the installments of
such interest and any such Issuer Derivative Payments, with interest on the
overdue installments thereof at the same rates, respectively, as were borne by
such borrowings on which such interest shall be in default and any such Issuer
Derivative Payments then due, such payments to be made ratably to the parties
entitled thereto without discrimination or preference, except as may be provided
in a Supplemental Indenture; and

          (b) if the principal of any of the Obligations shall have become due
by declaration of acceleration or otherwise, first to the payment of the
interest in default on the

                                       33

<PAGE>

Senior Notes and all Issuer Derivative Payments secured on a parity with the
Senior Notes then due, in the order of the maturity of the installments thereof,
with interest on overdue installments thereof at the same rates, respectively,
as were borne by the Senior Notes on which such interest shall be in default and
such Issuer Derivative Payments as provided in the ISDA Master Agreement then
due, as the case may be, second, to the payment of the principal of all Senior
Notes then due and any amount owed to a Counterparty secured on a parity with
Senior Obligations under the ISDA Master Agreement, such payments to be made
ratably to the parties entitled thereto without discrimination or preference,
third, to the payment of the interest in default on the Subordinate Notes and
all Issuer Derivative Payments secured on a parity with the Subordinate Notes
then due, in the order of the maturity of the installments thereof with interest
on overdue installments thereof at the same rates, respectively, as were borne
by the Subordinate Notes on which such interest shall be in default and such
Issuer Derivative Payments as provided in the ISDA Master Agreement then due, as
the case may be, fourth, to the payment of the principal of all Subordinate
Notes then due and any amount owed to a Counterparty secured on a parity with
Subordinate Obligations under the ISDA Master Agreement, such payments to be
made ratably to the parties entitled thereto without discrimination or
preference, fifth, to the payment of the interest in default on all other
borrowings of the Issuer, if any, secured hereby and all Issuer Derivative
Payments secured on a parity with such borrowings then due, in the order of the
maturity of the installments thereof at the same rates, respectively, as were
borne by such borrowings on which such interest shall be in default and such
Issuer Derivative Payments as provided in the ISDA Master Agreement then due, as
the case may be, and sixth, to the payment of the principal of all other
borrowings of the Issuer, if any, secured hereby then due and any amount owed to
a Counterparty secured on a parity with such borrowings under the ISDA Master
Agreement, such payments to be made ratably to the parties entitled thereto
without discrimination or preference, except as may be provided in a
Supplemental Indenture.

          Section 5.03 Remedies on Default; Advice of Counsel. Upon the
happening of any Event of Default, the Indenture Trustee may proceed to protect
and enforce the rights of the Indenture Trustee and the Noteholders in such
manner as counsel for the Indenture Trustee may advise, whether for the specific
performance of any covenant, condition, agreement or undertaking herein
contained, or in aid of the execution of any power herein granted, or for the
enforcement of such other appropriate legal or equitable remedies as, in the
opinion of such counsel, may be more effectual to protect and enforce the rights
aforesaid.

          Section 5.04 Remedies on Default; Sale of Trust Estate. Upon the
happening of any Event of Default and if the principal of all of the Outstanding
Obligations shall have been declared due and payable, then and in every such
case, and irrespective of whether other remedies authorized shall have been
pursued in whole or in part, the Indenture Trustee may sell, with or without
entry, to the highest bidder the Trust Estate, and all right, title, interest,
claim and demand thereto and the right of redemption thereof, at any such place
or places, and at such time or times and upon such notice and terms as may be
required by law. Upon such sale the Indenture Trustee may make and deliver to
the purchaser or purchasers a good and sufficient assignment or conveyance for
the same, which sale shall be a perpetual bar both at law and in equity against
the Issuer and all Persons claiming such properties. No purchaser at any sale
shall be bound to see to the application of the purchase money or to inquire as
to the authorization, necessity, expediency or regularity of any such sale. The
Indenture Trustee is hereby irrevocably appointed the true and lawful
attorney-in-fact of the Issuer, in its name and stead, to make and

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<PAGE>

execute all bills of sale, instruments of assignment and transfer and such other
documents of transfer as may be necessary or advisable in connection with a sale
of all or part of the Trust Estate, but the Issuer, if so requested by the
Indenture Trustee, shall ratify and confirm any sale or sales by executing and
delivering to the Indenture Trustee or to such purchaser or purchasers all such
instruments as may be necessary, or in the judgment of the Indenture Trustee,
proper for the purpose that may be designated in such request. In addition, the
Indenture Trustee may proceed to protect and enforce the rights of the Indenture
Trustee and the holders of the Obligations in such manner as counsel for the
Indenture Trustee may advise, whether for the specific performance of any
covenant, condition, agreement or undertaking herein contained, or in aid of the
execution of any power herein granted, or for the enforcement of such other
appropriate legal or equitable remedies as may in the opinion of such counsel,
be more effectual to protect and enforce the rights aforesaid. The Indenture
Trustee shall take any such action or actions if requested to do so in writing
by the Noteholders of at least a majority of the principal amount of the Highest
Priority Obligations at the time Outstanding.

          Section 5.05 Appointment of Receiver. In case an Event of Default
occurs, and if all of the Outstanding Obligations shall have been declared due
and payable and in case any judicial proceedings are commenced to enforce any
right of the Indenture Trustee or of the Noteholders under this Indenture or
otherwise, then as a matter of right, the Indenture Trustee shall be entitled to
the appointment of a receiver of the Trust Estate and of the earnings, income or
Revenue, rents, issues and profits thereof with such powers as the court making
such appointments may confer.

          Section 5.06 Restoration of Position. In case the Indenture Trustee
shall have proceeded to enforce any rights under this Indenture by sale or
otherwise, and such proceedings shall have been discontinued, or shall have been
determined adversely to the Indenture Trustee, then and in every such case to
the extent not inconsistent with such adverse decree, the Issuer, the Indenture
Trustee and the Noteholders shall be restored to their former respective
positions and the rights hereunder in respect to the Trust Estate, and all
rights, remedies, and powers of the Indenture Trustee and of the Noteholders
shall continue as though no such proceeding had been taken.

          Section 5.07 Purchase of Properties by Indenture Trustee or
Noteholders. In case of any such sale of the Trust Estate, any Noteholder or
Noteholders or committee of Noteholders or the Indenture Trustee, may bid for
and purchase such property and upon compliance with the terms of sale may hold,
retain possession, and dispose of such property as the absolute right of the
purchaser or purchasers without further accountability and shall be entitled,
for the purpose of making any settlement or payment for the property purchased,
to use and apply any Obligations hereby secured and any interest thereon due and
unpaid, by presenting such Obligations in order that there may be credited
thereon the sum apportionable and applicable thereto out of the net proceeds of
such sale, and thereupon such purchaser or purchasers shall be credited on
account of such purchase price payable to him or them with the sum apportionable
and applicable out of such net proceeds to the payment of or as a credit on the
Obligations so presented.

          Section 5.08 Application of Sale Proceeds. The proceeds of any sale of
the Trust Estate, together with any funds at the time held by the Indenture
Trustee and not otherwise

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appropriated, shall be applied by the Indenture Trustee as set forth in Section
5.02 hereof, and then to the Issuer or whomsoever shall be lawfully entitled
thereto.

          Section 5.09 Accelerated Maturity. If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may declare, or upon the
written direction by the Noteholders of at least 66% of the principal amount of
the Highest Priority Obligations then Outstanding, shall declare, the principal
of all Obligations then Outstanding, and the interest thereon, if not previously
due, immediately due and payable, anything in the Obligations or this Indenture
to the contrary notwithstanding; provided, however, that for a declaration of
acceleration upon a default pursuant to Section 5.01(c) hereof shall require the
consent of a majority of the Noteholders of the principal amount of the Highest
Priority Obligations then Outstanding.

          Section 5.10 Remedies Not Exclusive. The remedies herein conferred
upon or reserved to the Indenture Trustee or the holders of Obligations are not
intended to be exclusive of any other remedy, but each remedy herein provided
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing, and every power and remedy hereby given
to the Indenture Trustee or to the holders of Obligations, or given by any
Supplemental Indenture, may be exercised from time to time as often as may be
deemed expedient. No delay or omission of the Indenture Trustee or of any holder
of Obligations to exercise any power or right arising from any default hereunder
shall impair any such right or power or shall be construed to be a waiver of any
such default or to be acquiescence therein.

          Section 5.11 Direction of Indenture Trustee. Upon the happening of any
Event of Default, the Noteholders of at least a majority of the principal amount
of the Highest Priority Obligations then Outstanding, shall have the right by an
instrument or instruments in writing delivered to the Indenture Trustee to
direct and control the Indenture Trustee as to the method of taking any and all
proceedings for any sale of any or all of the Trust Estate, or for the
appointment of a receiver, if permitted by law, and may at any time cause any
proceedings authorized by the terms hereof to be so taken or to be discontinued
or delayed; provided, however, that such Noteholders shall not be entitled to
cause the Indenture Trustee to take any proceedings that in the Indenture
Trustee's opinion would be unjustly prejudicial to non-assenting holders of
Obligations, but the Indenture Trustee shall be entitled to assume that the
action requested by the Noteholders of at least a majority of the principal
amount of the Highest Priority Obligations then Outstanding will not be
prejudicial to any non-assenting Noteholders unless the Noteholders of at least
a majority of the principal amount of Obligations of the non-assenting
Noteholders, in writing, show the Indenture Trustee how they will be prejudiced.
Anything in this Indenture to the contrary notwithstanding, the Noteholders of
at least a majority of the principal amount of the Highest Priority Obligations
then Outstanding together with the Noteholders of at least a majority of the
principal amount of all other Obligations then Outstanding shall have the right,
at any time, by an instrument or instruments in writing executed and delivered
to the Indenture Trustee, to direct the method and place of conducting all
proceedings to be taken in connection with the enforcement of the terms and
conditions of this Indenture, or for the appointment of a receiver or any other
proceedings hereunder, provided that such direction shall not be otherwise than
in accordance with the provisions of law and of this Indenture. The provisions
of this Section 5.11 shall be expressly subject to the provisions of Sections
6.01(c) and 6.05 hereof.

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          Section 5.12 Right to Enforce in Indenture Trustee. No Noteholder of
any Obligation shall have any right as such Noteholder to institute any suit,
action, or proceedings for the enforcement of the provisions of this Indenture
or for the execution of any trust hereunder or for the appointment of a receiver
or for any other remedy hereunder, all rights of action hereunder being vested
exclusively in the Indenture Trustee, unless and until the Indenture Trustee
fails to institute an action or suit after (i) the Noteholders of at least 25%
of the Notes shall have previously given to the Indenture Trustee written notice
of a default hereunder, and of the continuance thereof, (ii) the Noteholders of
at least 25% of the Notes shall have made written request upon the Indenture
Trustee and the Indenture Trustee shall have been afforded reasonable
opportunity to institute such action, suit or proceeding in its own name, and
(iii) the Indenture Trustee shall have been offered indemnity and security
satisfactory to it against the costs, expenses, and liabilities to be incurred
therein or thereby, which offer of indemnity shall be an express condition
precedent hereunder to any obligation of the Indenture Trustee to take any such
action hereunder, and the Indenture Trustee for 30 days after receipt of such
notification, request, and offer of indemnity, shall have failed to institute
any such action, suit or proceeding. It is understood and intended that no one
or more holders of the Obligations shall have the right in any manner whatever
by his or their action to affect, disturb, or prejudice the lien of this
Indenture or to enforce any right hereunder except in the manner herein provided
and for the equal benefit of the Noteholders of not less than a majority of the
principal amount of the Obligations then Outstanding.

          The Indenture Trustee and the Noteholders covenant that they will not
at any time institute against the Trust any bankruptcy, reorganization or other
proceeding under any federal or state bankruptcy or similar law.

          Section 5.13 Physical Possession of Obligations Not Required. In any
suit or action by the Indenture Trustee arising under this Indenture or on all
or any of the Obligations issued hereunder, or under any Supplemental Indenture,
the Indenture Trustee shall not be required to produce such Obligations, but
shall be entitled in all things to maintain such suit or action without their
production.

          Section 5.14 Waivers of Events of Default. The Indenture Trustee may
in its discretion waive any Event of Default hereunder and its consequences and
rescind any declaration of acceleration of Obligations, and shall do so upon the
written request of the Noteholders of at least a majority of the principal
amount of the Highest Priority Obligations then Outstanding; provided, however,
that there shall not be waived (a) any Event of Default in the payment of the
principal of or premium on any Outstanding Obligations at the date of maturity
or redemption thereof, or any default in the payment when due of the interest on
any such Obligations, unless prior to such waiver or rescission, all arrears of
interest or all arrears of payments of principal and premium, if any, and all
expenses of the Indenture Trustee, in connection with such default shall have
been paid or provided for or (b) any default in the payment of amounts set forth
in Section 6.05 hereof. In case of any such waiver or rescission, or in case any
proceedings taken by the Indenture Trustee on account of any such default shall
have been discontinued or abandoned or determined adversely to the Indenture
Trustee, then and in every such case the Issuer, the Indenture Trustee and the
holders of Obligations shall be restored to their former positions and rights
hereunder respectively, but no such waiver or rescission shall

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<PAGE>

extend to or affect any subsequent or other default, or impair any rights or
remedies consequent thereon.

                                   Article VI

                              The Indenture Trustee

          Section 6.01 Acceptance of Trust. The Indenture Trustee hereby accepts
the trusts imposed upon it by this Indenture, and agrees to perform said trusts,
but only upon and subject to the following terms and conditions:

          (a) Except during the continuance of an Event of Default,

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

          (ii) in the absence of bad faith on its part, the Indenture Trustee
     may conclusively rely, as to the truth of the statements and the
     correctness of the opinions expressed therein, upon certificates or
     opinions furnished to the Indenture Trustee and conforming to the
     requirements of this Indenture; but in the case of any such certificates or
     opinions that by any provisions hereof are specifically required to be
     furnished to the Indenture Trustee, the Indenture Trustee shall be under a
     duty to examine the same to determine whether or not they conform as to
     form with the requirements of this Indenture and whether or not they
     contain the statements required under this Indenture.

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

          (c) Before taking any action hereunder requested by Noteholders, the
Indenture Trustee may require that it be furnished an indemnity bond or other
indemnity and security satisfactory to it by the Noteholders for the
reimbursement of all expenses it may incur and to protect it against liability
arising from any action taken by the Indenture Trustee (excluding, however, any
action taken by the Indenture Trustee acting as Servicer pursuant to Section
6.15 hereof).

          Section 6.02 Recitals of Others. The recitals, statements, and
representations set forth herein and in the Notes shall be taken as the
statements of the Issuer, and the Indenture Trustee assumes no responsibility
for the correctness of the same. The Indenture Trustee makes no representations
as to the title of the Issuer in the Trust Estate or as to the security afforded
thereby and hereby, or as to the validity or sufficiency of this Indenture or of
the Notes issued hereunder, and the Indenture Trustee shall incur no
responsibility in respect of such matters.

          Section 6.03 As to Filing of Indenture. The Indenture Trustee shall be
under no duty (a) to file or record, or cause to be filed or recorded, this
Indenture or any Supplemental Indenture, (b) or to procure any further order or
additional instruments of further assurance, (c)

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<PAGE>

to see to the delivery to it of any personal property intended to be mortgaged
or pledged hereunder or thereunder, (d) or to do any act that may be suitable to
be done for the better maintenance of the lien or security hereof (other than
the filing of any continuation statements (but not initial financing statements)
), or (e) for giving notice of the existence of such lien, or for extending or
supplementing the same or to see that any rights to Revenue and Funds intended
now or hereafter to be transferred in trust hereunder are subject to the lien
hereof. The Indenture Trustee shall not be liable for failure of the Issuer to
pay any tax or taxes in respect of such property, or any part thereof, or the
income therefrom or otherwise, nor shall the Indenture Trustee be under any duty
in respect of any tax that may be assessed against it or the Noteholders in
respect of such property or pledged Revenue and Funds.

          Section 6.04 Indenture Trustee May Act Through Agents. The Indenture
Trustee may execute any of the trusts or powers hereof and perform any duty
hereunder, either itself or by or through its attorneys, agents, or employees,
and it shall not be answerable or accountable for any default, neglect, or
misconduct of any such attorneys, agents, or employees, if reasonable care has
been exercised in the appointment, supervision, and monitoring of the work
performed. All reasonable costs incurred by the Indenture Trustee and all
reasonable compensation to all such persons as may reasonably be employed in
connection with the trusts hereof shall be paid by the Issuer.

          Section 6.05 Indemnification of Indenture Trustee. Other than with
respect to its duties to make payment on the Obligations when due, and its duty
to pursue the remedy of acceleration as provided in Section 5.02 hereof, for
each of which no additional security or indemnity may be required, the Indenture
Trustee shall be under no obligation or duty to perform any act at the request
of Noteholders or to institute or defend any suit in respect thereof unless
properly indemnified and provided with security to its satisfaction as provided
in Section 6.01(c) hereof. The Indenture Trustee shall not be required to take
notice, or be deemed to have knowledge, of any default or Event of Default of
the Issuer hereunder and may conclusively assume that there has been no such
default or Event of Default (other than an Event of Default described in
Sections 5.01(a) or (b) hereof) unless and until a Responsible Officer shall
have been specifically notified in writing at the address in Section 8.01 hereof
of such default or Event of Default by (a) the Noteholders of the required
percentages in principal amount of the Obligations then Outstanding hereinabove
specified or (b) an Authorized Officer of the Issuer. However, the Indenture
Trustee may begin suit, or appear in and defend suit, execute any of the trusts
hereby created, enforce any of its rights or powers hereunder, or do anything
else in its judgment proper to be done by it as Indenture Trustee, without
assurance of reimbursement or indemnity, and in such case the Indenture Trustee
shall be reimbursed or indemnified by the Noteholders requesting such action, if
any, or the Issuer in all other cases, for all fees, costs and expenses,
liabilities, outlays and counsel fees and other reasonable disbursements
properly incurred in connection therewith, unless such costs and expenses,
liabilities, outlays and attorneys' fees and other reasonable disbursements
properly incurred in connection therewith are adjudicated to have resulted from
the gross negligence or willful misconduct of the Indenture Trustee. In
furtherance and not in limitation of this Section 6.05, the Indenture Trustee
shall not be liable for, and shall be held harmless by the Issuer from,
following any orders, instructions or other directions upon which the Indenture
Trustee is authorized to rely pursuant to this Indenture or any other agreement
to which it is a party. If the Issuer or the Noteholders, as appropriate, shall
fail to make such reimbursement or indemnification, the Indenture Trustee may
reimburse

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<PAGE>

itself from any money in its possession under the provisions of this Indenture,
subject only to the prior lien of the Notes for the payment of the principal
thereof, premium, if any, and interest thereon from the Revenue Fund. None of
the provisions contained in this Indenture or any other agreement to which it is
a party shall require the Indenture Trustee to act or to expend or risk its own
funds or otherwise incur individual financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers (excluding,
however, any duties, rights or powers of the Indenture Trustee acting as
Servicer pursuant to Section 6.15 hereof) if the Noteholders shall not have
offered security and indemnity acceptable to it or if it shall have reasonable
grounds for believing that prompt repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.

          The Issuer shall indemnify the Indenture Trustee and its officers,
agents, directors and employees, against any and all loss, liability or expense
(including reasonable attorneys' fees and expenses) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder (excluding, however, any duties of the Indenture Trustee acting as
Servicer pursuant to Section 6.15 hereof) or under the Basic Documents 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 or under the Basic Documents. Without limiting the foregoing, the
Issuer agrees to indemnify and hold harmless the Indenture Trustee from and
against any liability (including for taxes, penalties or interest asserted by
any taxing jurisdiction) arising from any failure to withhold taxes from amounts
payable in respect of payments from the Revenue Fund. The Indenture Trustee
shall notify the Issuer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer shall not relieve the
Issuer of its obligations hereunder, except to the extent of any loss, liability
or expense resulting from such failure. The Issuer need not reimburse any
expense or indemnity against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct, gross
negligence or bad faith.

          Section 6.06 Indenture Trustee's Right to Reliance. The Indenture
Trustee shall fully be protected in acting upon any notice, resolution, request,
consent, order, certificate, report, appraisal, opinion, report or document of
the Issuer or the Servicer or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Indenture Trustee may consult with experts and with counsel (who may, but need
not, be counsel for the Issuer, the Indenture Trustee, or for a Noteholder), and
the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered, and in respect of any
determination made by it hereunder in good faith and in accordance with the
opinion of such counsel.

          Whenever in the administration hereof the Indenture Trustee shall
reasonably deem it desirable that a matter be proved or established prior to
taking, suffering, or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon a certificate signed by an Authorized Officer
of the Issuer or an authorized officer of the Servicer.

          The Indenture Trustee shall not be liable for any action taken,
suffered, or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers

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<PAGE>

conferred upon it hereby; provided, however, that the Indenture Trustee shall be
liable for its gross negligence or willful misconduct in taking such action.

          The Indenture Trustee is authorized, under this Indenture, subject to
Section 4.12 hereof, to sell, assign, transfer or convey Financed Student Loans
in accordance with an Issuer Order. If such Financed Student Loan was originated
under the Act, such Issuer Order shall certify that the Person to whom such
Financed Student Loan is sold, assigned, transferred, or conveyed is an Eligible
Lender unless not required by the Act. The Indenture Trustee is further
authorized to enter into agreements with other Persons, in its capacity as
Indenture Trustee, in order to carry out or implement the terms and provisions
of this Indenture.

          The duties and obligations of the Indenture Trustee shall be
determined solely by the express provisions of this Indenture, and the Indenture
Trustee shall take such action with respect to this Indenture as it shall be
directed hereunder, and the Indenture Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Indenture and as specifically directed by the Issuer or the Servicer, and no
implied covenants or obligations shall be read into this Indenture against the
Indenture Trustee.

          The Indenture Trustee shall not be liable for any error of judgment
made in good faith by an officer or officers of the Indenture Trustee, unless it
shall be conclusively determined by a court of competent jurisdiction that the
Indenture Trustee was grossly negligent in ascertaining the pertinent facts.

          The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees appointed with due care, and shall not
be responsible for any willful misconduct or gross negligence on the part of any
agent, attorney, custodian or nominee so appointed.

          Section 6.07 Compensation of Indenture Trustee. Except as otherwise
expressly provided herein, all advances, counsel fees and other expenses
reasonably made or incurred by the Indenture Trustee in and about the execution
and administration of the trust hereby created and reasonable compensation to
the Indenture Trustee for its services in the premises shall be paid by the
Issuer. The compensation of the Indenture Trustee shall not be limited to or by
any provision of law in regard to the compensation of trustees of an express
trust. If not paid by the Issuer, the Indenture Trustee shall have a lien
against all money held pursuant to this Indenture, subject only to the prior
lien of the Obligations against the money and investments in the Revenue Fund
for the payment of the principal thereof, premium, if any, and interest thereon,
for such reasonable compensation, expenses, advances and counsel fees incurred
in and about the execution of the trusts hereby created and the exercise and
performance of the powers and duties of the Indenture Trustee hereunder and the
cost and expense incurred in defending against any liability in the premises of
any character whatsoever (unless such liability is adjudicated to have resulted
from the gross negligence or willful misconduct of the Indenture Trustee).

          Section 6.08 Indenture Trustee May Own Notes. The Indenture Trustee
hereunder, or any successor Indenture Trustee, in its individual or other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Issuer, with the same rights it would have if it were not the Indenture
Trustee. The Indenture Trustee may act as depository for, and permit any

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<PAGE>

of its officers or directors to act as a member of, or act in any other capacity
in respect to, any committee formed to protect the rights of the Noteholders or
to effect or aid in any reorganization growing out of the enforcement of the
Notes or of this Indenture, whether or not any such committee shall represent
the Noteholders of more than 66% of the principal amount of the Outstanding
Obligations.

          Section 6.09 Resignation of Indenture Trustee. The Indenture Trustee
and any successor to the Indenture Trustee may resign and be discharged from the
trust created by this Indenture by giving to the Issuer notice in writing, which
notice shall specify the date on which such resignation is to take effect;
provided, however, that such resignation shall only take effect on the day
specified in such notice if a successor Indenture Trustee shall have been
appointed pursuant to Section 6.11 hereof (and is qualified to be the Indenture
Trustee under the requirements of Section 6.11 hereof). If no successor
Indenture Trustee has been appointed by the date specified or within a period of
90 days from the receipt of the notice by the Issuer, whichever period is the
longer, the Indenture Trustee may (a) appoint a temporary successor Indenture
Trustee having the qualifications provided in Section 6.11 hereof or (b) request
a court of competent jurisdiction to (i) require the Issuer to appoint a
successor, as provided in Section 6.11 hereof, within 3 days of the receipt of
citation or notice by the court, or (ii) appoint an Indenture Trustee having the
qualifications provided in Section 6.11 hereof. In no event may the resignation
of the Indenture Trustee be effective until a qualified successor Indenture
Trustee shall have been selected and appointed. In the event a temporary
successor Indenture Trustee is appointed pursuant to (a) above, the Issuer may
remove such temporary successor Indenture Trustee and appoint a successor
thereto pursuant to Section 6.11 hereof.

          Section 6.10 Removal of Indenture Trustee. The Indenture Trustee or
any successor Indenture Trustee may be removed (a) at any time by the
Noteholders of a majority of the principal amount of the Highest Priority
Obligations then Outstanding, (b) by the Issuer for cause or upon the sale or
other disposition of the Indenture Trustee or its corporate trust functions or
(c) by the Issuer without cause so long as no Event of Default as described in
Sections 5.01(a), (b) or (c) exists or has existed within the last 30 days, upon
payment to the Indenture Trustee so removed of all money then due to it
hereunder and appointment of a successor thereto by the Issuer and acceptance
thereof by said successor. One copy of any such order of removal shall be filed
with the Issuer and the other with the Indenture Trustee so removed.

          In the event an Indenture Trustee (or successor Indenture Trustee) is
removed by any Person or for any reason permitted hereunder, such removal shall
not become effective until (a) in the case of removal by the Noteholders, such
Noteholders by instrument or concurrent instruments in writing (signed and
acknowledged by such Noteholders or their attorneys-in-fact) filed with the
Indenture Trustee removed have appointed a successor Indenture Trustee or
otherwise the Issuer shall have appointed a successor, and (b) the successor
Indenture Trustee has accepted appointment as such.

          Section 6.11 Successor Indenture Trustee. In case at any time the
Indenture Trustee or any successor Indenture Trustee shall resign, be dissolved,
or otherwise shall be disqualified to act or be incapable of acting, or in case
control of the Indenture Trustee or of any successor Indenture Trustee or of its
officers shall be taken over by any public officer or officers,

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a successor Indenture Trustee may be appointed by the Issuer. In the case of any
such appointment by the Issuer of a successor Indenture Trustee, the Issuer
shall forthwith cause notice thereof to be mailed to the Noteholders at the
address of each Noteholder appearing on the note registration books maintained
by the Indenture Trustee. Every successor Indenture Trustee appointed by the
Noteholders, by a court of competent jurisdiction, or by the Issuer shall be a
bank or trust company in good standing, organized and doing business under the
laws of the United States or of a state therein, that has a reported capital and
surplus of not less than $50,000,000, be authorized under the law to exercise
corporate trust powers, be subject to supervision or examination by a federal or
state authority, and be an Eligible Lender so long as such designation is
necessary to maintain guarantees and federal benefits under the Act with respect
to Financed Student Loans that were originated under the Act.

          Section 6.12 Manner of Vesting Title in Indenture Trustee. Any
successor Indenture Trustee appointed hereunder shall execute, acknowledge, and
deliver to its predecessor Indenture Trustee, and also to the Issuer, an
instrument accepting such appointment hereunder, and thereupon such successor
Indenture Trustee, without any further act, deed, or conveyance shall become
fully vested with all the estate, properties, rights, powers, trusts, duties,
and obligations of its predecessors in trust hereunder (except that the
predecessor Indenture Trustee shall continue to have the benefits to
indemnification hereunder together with the successor Indenture Trustee), with
like effect as if originally named as Indenture Trustee herein; but the
Indenture Trustee ceasing to act shall nevertheless, on the written request of
an Authorized Officer of the Issuer, or an authorized officer of the successor
Indenture Trustee, execute, acknowledge, and deliver such instruments of
conveyance and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Indenture Trustee all the right, title, and interest of the Indenture Trustee
that it succeeds, in and to pledged Revenue and Funds and such rights, powers,
trusts, duties, and obligations, and the Indenture Trustee ceasing to act also
shall, upon like request, pay over, assign, and deliver to the successor
Indenture Trustee any money or other property or rights subject to the lien of
this Indenture, including any pledged securities that may then be in its
possession. Should any deed or instrument in writing from the Issuer be required
by the successor Indenture Trustee for more fully and certainly vesting in and
confirming to such new Indenture Trustee such estate, properties, rights,
powers, and duties, any and all such deeds and instruments in writing shall on
request be executed, acknowledged and delivered by the Issuer.

          In case any of the Notes to be issued hereunder shall have been
authenticated but not delivered, any successor Indenture Trustee may adopt the
certificate of authentication of the Indenture Trustee or of any successor to
the Indenture Trustee; and in case any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes in its own name; and in all such cases such certificate shall have the
full force that it has anywhere in the Notes or in this Indenture.

          Section 6.13 Additional Covenants by the Indenture Trustee to Conform
to the Act. The Indenture Trustee covenants that it will at all times be an
Eligible Lender under the Act so long as such designation is necessary, as
determined by the Issuer, to maintain the guarantees and federal benefits under
the Act with respect to Financed Student Loans that were originated under the
Act, that it will acquire Student Loans originated under the Act in its capacity
as an Eligible Lender, and that it will not dispose of or deliver any Student
Loans originated under the

                                       43

<PAGE>

Act or any security interest in any such Student Loans to any party who is not
an Eligible Lender so long as the Act or Regulations adopted thereunder require
an Eligible Lender to be the owner or holder of such Student Loans; provided,
however, that nothing above shall prevent the Indenture Trustee from delivering
Student Loans originated under the Act to the Servicer or the Guaranty Agency.

          Section 6.14 Limitation with Respect to Examination of Reports. Except
as provided in this Indenture, the Indenture Trustee shall be under no duty to
examine any report or statement or other document required or permitted to be
filed with it by the Issuer.

          Section 6.15 Servicing Agreement. The Indenture Trustee acknowledges
the receipt of a copy of the Servicing Agreement. The Indenture Trustee, by the
execution hereof, covenants, represents and agrees that upon any termination of
the Servicer pursuant to the Servicing Agreement, the Indenture Trustee shall,
pursuant to Section 11 of the Servicing Agreement, act as Servicer until a
successor servicer has been appointed as provided in that Section 11.

          Section 6.16 Additional Covenants of Indenture Trustee. The Indenture
Trustee, by the execution hereof, covenants, represents and agrees that:

          (a) it will not exercise any of the rights, duties, or privileges
under this Indenture in such manner as would cause the Student Loans held or
acquired under the terms hereof to be transferred, assigned, or pledged as
security to any person or entity other than as permitted by this Indenture; and

          (b) so long as any of the Financed Student Loans were originated under
the Act, it will comply with the Act and the Regulations and will, upon written
notice from an Authorized Officer of the Issuer, the Secretary, or the Guaranty
Agency, use its reasonable efforts to cause this Indenture to be amended (in
accordance with Section 7.01 hereof) if the Act or Regulations are hereafter
amended so as to be contrary to the terms of this Indenture.

          Section 6.17 Duty of Indenture Trustee with Respect to Rating
Agencies. It shall be the duty of the Indenture Trustee to notify each Rating
Agency then rating any of the Notes (but the Indenture Trustee shall incur no
liability for any failure to do so) of (a) any change, expiration, extension, or
renewal of this Indenture, (b) redemption or defeasance of any or all the Notes,
(c) any change in the Indenture Trustee or (d) any other information
specifically required to be reported to each Rating Agency under any
Supplemental Indenture; provided, however, the provisions of this Section 6.17
do not apply when such documents have been previously supplied to such Rating
Agency and the Indenture Trustee has received written evidence to such effect,
all as may be required by this Indenture. All notices required to be forwarded
to the Rating Agencies under this Section 6.17 shall be sent in writing at the
following addresses:

          Fitch Ratings
          One State Street Plaza
          32nd Floor
          New York, New York  10004
          Attention:  ABS Surveillance

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<PAGE>

          Moody's Investors Service, Inc.
          99 Church Street
          New York, New York 10007
          Attention: ABS Monitoring Unit

          The Indenture Trustee also acknowledges that each Rating Agency's
periodic review for maintenance of a Rating on any Series of the Notes may
involve discussions and/or meetings with representatives of the Indenture
Trustee at mutually agreeable times and places.

          Section 6.18 Merger of the Indenture Trustee. Any corporation into
which the Indenture Trustee may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Indenture Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Indenture,
without the execution or filing of any paper of any further act on the part of
any other parties hereto.

          Section 6.19 Receipt of Funds from Servicer. The Indenture Trustee
shall not be accountable or responsible in any manner whatsoever for any action
of the Issuer, the depository bank of any funds of the Issuer, or the Servicer
while the Servicer is acting as bailee or agent of the Indenture Trustee with
respect to the Student Loans except, to the extent provided in the Servicing
Agreement or custodian agreement, for actions taken in compliance with any
instruction or direction given to the Indenture Trustee, or for the application
of funds or moneys by the Servicer until such time as funds are received by the
Indenture Trustee.

          Section 6.20 Special Circumstances Leading to Resignation of Indenture
Trustee. Because the Indenture Trustee serves as trustee hereunder for
Obligations of different priorities, it is possible that circumstances may arise
that will cause the Indenture Trustee to resign from its position as trustee for
one or more of the Obligations. In the event that the Indenture Trustee makes a
determination that it should so resign, due to the occurrence of an Event of
Default or potential default hereunder, or otherwise, the Issuer may permit such
resignation as to one or more of the Obligations or request the Indenture
Trustee's resignation as to all Obligations, as the Issuer may elect. If the
Issuer should determine that a conflict of interest has arisen as to the
trusteeship of any of the Obligations, it may authorize and execute a
Supplemental Indenture with one or more successor Indenture Trustees, under
which the administration of certain of the Obligations would be separated from
the administration of the other Obligations.

          Section 6.21 Survival of Indenture Trustee's Rights to Receive
Compensation, Reimbursement and Indemnification. The Indenture Trustee's rights
to receive compensation, reimbursement and indemnification of money due and
owing hereunder at the time of the Indenture Trustee's resignation or removal
shall survive the Indenture Trustee's resignation or removal.

          Section 6.22 Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be an Indenture Trustee hereunder that shall
be eligible to act as Indenture Trustee under TIA Section 310(a)(1) and shall
have a combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law

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<PAGE>

or the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section 6.22,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.22, it shall resign immediately
in the manner and with the effect specified in this Article VI. Neither the
Issuer nor any Person directly or indirectly controlling or controlled by, or
under common control with, the Issuer shall serve as Indenture Trustee.

          Section 6.23 Payment of Taxes and Other Governmental Charges.

          (a) The Indenture Trustee shall request, and Noteholders shall
provide, all appropriate tax certifications and forms necessary to enable the
Issuer or its agents, to determine their duties and liabilities with respect to
any taxes or other charges that they may be required to pay, deduct or withhold
in respect of the Notes under any present or future law or regulation of the
United States or any present or future law or regulation of any political
subdivision thereof or taxing authority therein or to comply with any reporting
or other requirements under any law or regulation, and to pay, deduct or
withhold any such taxes or charges and remit them to the relevant taxing
authorities as required under law. Such certification shall take the form of a
correct, complete and executed U.S. Internal Revenue Service Form W-8BEN,
W-8ECI, W-8IMY, or W-9 (or any successors thereto), including appropriate
attachments, as applicable, that identifies such Noteholder.

          (b) If such forms are not provided or if any tax or other governmental
charge shall otherwise become payable by or on behalf of the Indenture Trustee,
including any tax or governmental charge required to be withheld from any
payment made by the Indenture Trustee under the provisions of any applicable law
or regulation with respect to any Trust Property or the Notes, such tax or
governmental charge shall be payable by the Noteholder and may be withheld by
the Indenture Trustee. The Issuer and the Indenture Trustee shall have the right
to refuse the surrender, registration of transfer or exchange of any Note with
respect to which such tax or other governmental charge shall be payable until
such payment shall have been made by the Noteholder.

          Section 6.24 Indenture Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Issuer or any other obligor upon the Notes or the
property of the Issuer or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the principal of the Notes of any
Series shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand on the Issuer for the payment of overdue principal, premium, if any, or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise:

          (a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Notes, of principal (and premium, if any)
and interest, if any, owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim

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<PAGE>

for the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel) and of the Noteholders allowed in
such judicial proceeding; and

          (b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Noteholder of Notes to make such payments to the Indenture Trustee, and if the
Indenture Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and any predecessor Indenture Trustee, their agents and counsel, and any
other amounts due the Indenture Trustee or any predecessor Indenture Trustee.

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

          In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholders parties to any such proceedings.

                                   Article VII

                             Supplemental Indentures

          Section 7.01 Supplemental Indentures Not Requiring Consent of
Noteholders. The Issuer and the Indenture Trustee may, without the consent of or
notice to any of the Noteholders or any holders of Obligations enter into any
indenture or indentures supplemental to this Indenture for any one or more of
the following purposes:

          (a) to cure any ambiguity or defect or omission in this Indenture;

          (b) to grant to or confer upon the Indenture Trustee for the benefit
of the Noteholders any additional benefits, rights, remedies, powers or
authorities that may lawfully be granted to or conferred upon the Noteholders or
the Indenture Trustee;

          (c) to subject to this Indenture additional revenues, properties or
collateral;

          (d) to modify, amend or supplement this Indenture or any Supplemental
Indenture in such manner as to permit the qualification hereof and thereof under
the Trust Indenture Act or any similar federal statute hereafter in effect or to
permit the qualification of the Notes for sale under the securities laws of the
United States of America or of any of the states of the United States of
America, and, if they so determine, to add to this Indenture or any Supplemental
Indenture such other terms, conditions and provisions as may be permitted by
said Trust Indenture Act or similar federal statute;

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<PAGE>

          (e) to evidence the appointment of a separate or co-Indenture Trustee
or a co-registrar or transfer agent or the succession of a new Indenture Trustee
hereunder, or any additional or substitute Guaranty Agency or Servicer;

          (f) to add such provisions to or to amend such provisions of this
Indenture as may, in Note Counsel's opinion, be necessary or desirable to assure
implementation of the Program in conformance with the Act if along with such
Supplemental Indenture there is filed a Note Counsel's opinion to the effect
that the addition or amendment of such provisions will in no way impair the
existing security of the Noteholders or any holders of Outstanding Obligations;

          (g) to make any change as shall be necessary in order to obtain and
maintain for any of the Notes an investment grade Rating from a nationally
recognized rating service, which changes, in the opinion of the Indenture
Trustee are not to the prejudice of the Noteholder of any of the Obligations;

          (h) to make any changes necessary to comply with the Act, the
Regulations or the Code and the regulations promulgated thereunder;

          (i) to provide for the issuance of Notes pursuant to the provisions of
Section 1.08 hereof, including the creation of appropriate Funds, Accounts and
Subaccounts with respect to such Notes;

          (j) to make the terms and provisions of this Indenture, including the
lien and security interest granted herein, applicable to a Derivative Product,
and to modify Section 2.03 hereof with respect to any particular Derivative
Product;

          (k) to create any additional Funds or Accounts or Subaccounts under
this Indenture deemed by the Indenture Trustee to be necessary or desirable;

          (l) to amend the Indenture to allow for any Notes to be supported by a
letter of credit or insurance policy or a liquidity agreement, including
amendments with respect to repayment to such a provider on a parity with any
Notes or Derivative Product and providing rights to such provider under this
Indenture, including with respect to defaults and remedies;

          (m) to amend the Indenture to provide for use of a surety bond or
other financial guaranty instrument in lieu of cash and/or Eligible Investments
in all or any portion of the Reserve Fund, so long as such action shall not
adversely affect the Ratings on any of the Notes;

          (n) to make any other change with Rating Agency Confirmation; or

          (o) to make any other change that, in the judgment of the Indenture
Trustee, is not to the material prejudice of the Noteholders or any holders of
Obligations;

          provided, however, that nothing in this Section 7.01 shall permit, or
be construed as permitting, any modification of the trusts, powers, rights,
duties, remedies, immunities and privileges of the Indenture Trustee without the
prior written approval of the Indenture Trustee, which approval shall be
evidenced by execution of a Supplemental Indenture.

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<PAGE>

          The Indenture Trustee shall provide written notice to the Rating
Agencies prior to entering into any Supplemental Indenture for any one or more
of the purposes set forth in paragraphs (a) - (o) above.

          Section 7.02 Supplemental Indentures Requiring Consent of Noteholders.
Exclusive of Supplemental Indentures covered by Section 7.01 hereof and subject
to the terms and provisions contained in this Section 7.02, and not otherwise,
the Noteholders of not less than a majority of the principal amount of each
class of affected Notes and each affected Derivative Product then Outstanding
shall have the right, from time to time, to consent to and approve the execution
by the Issuer and the Indenture Trustee of such Supplemental Indentures as shall
be deemed necessary and desirable by the Indenture Trustee for the purpose of
modifying, altering, amending, adding to or rescinding, in any particular, any
of the terms or provisions contained in this Indenture or in any Supplemental
Indenture; provided, however, that nothing in this Section 7.02 shall permit, or
be construed as permitting (a) without the consent of the Noteholders of each
affected Note and each Derivative Product then Outstanding, (i) an extension of
the maturity date of the principal of or the interest on any Obligation, or (ii)
a reduction in the principal amount of any Obligation or the rate of interest
thereon, or (iii) a privilege or priority of any Obligation or Obligations over
any other Obligation or Obligations except as otherwise provided herein, or (iv)
a reduction in the aggregate principal amount of the Obligations required for
consent to a Supplemental Indenture, or (v) the creation of any lien other than
a lien ratably securing all of the Obligations at any time Outstanding hereunder
except as otherwise provided herein or (b) any modification of the trusts,
powers, rights, obligations, duties, remedies, immunities and privileges of the
Indenture Trustee without the prior written approval of the Indenture Trustee.

          If at any time the Issuer shall request that the Indenture Trustee
enter into any such Supplemental Indenture for any of the purposes in this
Section 7.02, the Indenture Trustee shall be entitled to receive an Opinion of
Counsel from the Issuer that all conditions precedent to the execution of any
Supplemental Indenture have been met. The Indenture Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of the
proposed execution of such Supplemental Indenture to be mailed by registered or
certified mail to each Noteholder of an Obligation at the address shown on the
registration books or listed in any Derivative Product. Such notice (which shall
be prepared by the Issuer) shall briefly set forth the nature of the proposed
Supplemental Indenture and shall state that copies thereof are on file at the
principal corporate trust office of the Indenture Trustee for inspection by all
Noteholders. If, within 60 days, or such longer period as shall be prescribed by
the Issuer, following the mailing of such notice, the Noteholders of not less
than a majority of the principal amount of each class of affected Notes and each
affected Derivative Product then Outstanding at the time of the execution of any
such Supplemental Indenture shall have consented in writing to and approved the
execution thereof as herein provided, no Noteholder of any Obligation shall have
any right to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the execution
thereof, or to enjoin or restrain the Indenture Trustee or the Issuer from
executing the same or from taking any action pursuant to the provisions thereof.

          The Indenture Trustee shall provide written notice to the Rating
Agencies prior to entering into any Supplemental Indenture for any of the
purposes in this Section 7.02.

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<PAGE>

          Upon the execution of any such Supplemental Indenture as in this
Section 7.02 permitted and provided, this Indenture shall be and be deemed to be
modified and amended in accordance therewith.

          Section 7.03 Additional Limitation on Modification of Indenture. None
of the provisions of this Indenture (including Sections 7.01 and 7.02 hereof)
shall permit an amendment to the provisions of the Indenture that permits the
transfer of all or part of the Financed Student Loans that were originated under
the Act or granting of a security interest therein to any Person other than an
Eligible Lender or the Servicer, unless the Act or Regulations are hereafter
modified so as to permit the same.

          Section 7.04 Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to the Notes, the Indenture Trustee shall
transmit in the manner and to the extent provided in TIA Section 313(c), notice
of such default hereunder known to the Indenture Trustee, unless such default
shall have been cured or waived; provided, however, that, except in the case of
a default in the payment of the principal of (or premium, if any) or interest
with respect to any Note, or in the payment of any sinking fund installment with
respect to the Notes, the Indenture Trustee shall be protected in withholding
such notice if and so long as an authorized officer of the Indenture Trustee in
good faith determines that the withholding of such notice is in the interest of
the Noteholders. For the purpose of this Section 7.04, the term "default" means
any event that is, or after notice or lapse of time or both would become, an
Event of Default with respect to the Notes.

          Section 7.05 Conformity with the Trust Indenture Act. Every
Supplemental Indenture executed pursuant to this Article VII shall conform to
the requirements of the Trust Indenture Act as then in effect.

                                  Article VIII

                               General Provisions

          Section 8.01 Notices. Any notice, request or other instrument required
by this Indenture to be signed or executed by the holders of Obligations may be
executed by the execution of any number of concurrent instruments of similar
tenor, and may be signed or executed by such holders of Obligations in person or
by agent appointed in writing. As a condition for acting thereunder the
Indenture Trustee may demand proof of the execution of any such instrument and
of the fact that any person claiming to be the owner of any of said Obligations
is such owner and may further require the actual deposit of such Obligation or
Obligations with the Indenture Trustee. The fact and date of the execution of
such instrument may be proved by the certificate of any officer in any
jurisdiction who by the laws thereof is authorized to take acknowledgments of
deeds within such jurisdiction, that the person signing such instrument
acknowledged before him the execution thereof, or may be proved by any affidavit
of a witness to such execution sworn to before such officer.

          The amount of Notes held by any person executing such instrument as a
Noteholder and the fact, amount, and numbers of the Notes held by such Person
and the date of his holding the same may be proved by a certificate executed by
any responsible trust company,

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<PAGE>

bank, banker, or other depository in a form approved by the Indenture Trustee,
showing that at the date therein mentioned such person had on deposit with such
depository the Notes described in such certificate; provided, however, that at
all times the Indenture Trustee may require the actual deposit of such Note or
Notes with the Indenture Trustee.

          All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, telecopy or facsimile or
similar writing) at the following addresses, and each address shall constitute
each party's respective "Corporate Trust Office" for purposes of the Indenture:

          If intended for the Issuer:

               Education Funding Capital Trust-I
               c/o Fifth Third Bank
               MD 10AT60
               38 Fountain Square Plaza
               Cincinnati, Ohio 45263
               Attention: Corporate Trust Administration
               Telephone: +1.513.534.3367
               Facsimile: +1.513.534.6785

               with a copy to:

               Wilmington Trust Company
               Rodney Square North
               1100 North Market Street
               Wilmington, Delaware 19890-0001
               Attention: Corporate Trust Administration
               Telephone: +1.203.975.6112
               Facsimile: +1.203.975.6299

          If intended for the Indenture Trustee:

               Fifth Third Bank
               MD 10AT60
               38 Fountain Square Plaza
               Cincinnati, Ohio 45263
               Attention:  Corporate Trust Administration
               Telephone:  +1.513.534.3367
               Facsimile:  +1.513.534.6785

Any party may change the address to which subsequent notices to such party are
to be sent, or of its principal office, by notice to the others, delivered by
hand or received by telex or telecopier or registered first-class mail, postage
prepaid. Each such notice, request or other communication shall be effective
when delivered by hand or received by telex or telecopier or first-class mail,
postage prepaid.

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<PAGE>

          Section 8.02 Covenants Bind Issuer. The covenants, agreements,
conditions, promises, and undertakings in this Indenture shall extend to and be
binding upon the successors and assigns of the Issuer, and all of the covenants
hereof shall bind such successors and assigns, and each of them, jointly and
severally. All the covenants, conditions, and provisions hereof shall be held to
be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the Noteholders from time to time of the Obligations.

          No extension of time of payment of any of the Obligations shall
operate to release or discharge the Issuer, it being agreed that the liability
of the Issuer, to the extent permitted by law, shall continue until all of the
Obligations are paid in full, notwithstanding any transfer of Financed Student
Loans or extension of time for payment.

          Section 8.03 Lien Created. This Indenture shall operate effectually as
(a) a grant of lien on and security interest in, and (b) an assignment of, the
Trust Estate.

          Section 8.04 Severability of Lien. If the lien of this Indenture shall
be or shall ever become ineffectual, invalid, or unenforceable against any part
of the Trust Estate, which is not subject to the lien because of want of power
or title in the Issuer, the inclusion of any such part shall not in any way
affect or invalidate the pledge and lien hereof against such part of the Trust
Estate as to which the Issuer in fact had the right to pledge.

          Section 8.05 Consent of Noteholders Binds Successors. Any request or
consent of the Noteholder of any Obligations given for any of the purposes of
this Indenture shall bind all future Noteholders of the same Obligation or any
Obligations issued in exchange therefor or in substitution thereof in respect of
anything done or suffered by the Issuer or the Indenture Trustee in pursuance of
such request or consent.

          Section 8.06 Nonpresentment of Notes or Interest Checks. Should any of
the Notes or interest checks not be presented for payment when due, the
Indenture Trustee shall retain from any money transferred to it for the purpose
of paying the Notes or interest checks so due, for the benefit of the
Noteholders thereof, a sum of money sufficient to pay such Notes or interest
checks when the same are presented by the Noteholders thereof for payment. Such
money shall not be required to be invested. All liability of the Issuer to the
Noteholders of such Notes or interest checks and all rights of such Noteholders
against the Issuer under the Notes or interest checks or under this Indenture
shall thereupon cease and determine, and the sole right of such Noteholders
shall thereafter be against such deposit. If any Note or interest check shall
not be presented for payment within the period of two years following its
payment or redemption date, the Indenture Trustee shall return to the Issuer the
money theretofore held by it for payment of such Note or interest check, and
such Note or interest check shall (subject to the defense of any applicable
statute of limitation) thereafter be an unsecured obligation of the Issuer. The
Indenture Trustee's responsibility for any such money shall cease upon
remittance thereof to the Issuer.

          Section 8.07 Laws Governing. It is the intent of the parties hereto
that this Indenture shall be construed in accordance with the laws of Ohio
without reference to its conflict of law provisions. This Indenture is subject
to those provisions of the TIA that are required to be part of this Indenture
and shall, to the extent applicable, be governed by such provisions.

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<PAGE>

          Section 8.08 Severability. If any covenant, agreement, waiver, or part
thereof contained in this Indenture be forbidden by any pertinent law or under
any pertinent law be effective to render this Indenture invalid or unenforceable
or to impair the lien hereof, then each such covenant, agreement, waiver, or
part thereof shall itself be and is hereby declared to be wholly ineffective,
and this Indenture shall be construed as if the same were not included herein.

          Section 8.09 Exhibits. The terms of the Schedules and Exhibits, if
any, attached to this Indenture are incorporated herein in all particulars.

          Section 8.10 Non-Business Days. Except as may otherwise be provided
herein, if the date for making payment of any amount hereunder or on any Note,
or if the date for taking any action hereunder, is not a Business Day, then such
payment can be made without accruing further interest or action can be taken on
the next succeeding Business Day, with the same force and effect as if such
payment were made when due or action taken on such required date.

          Section 8.11 Parties Interested Herein. Nothing in this Indenture
expressed or implied is intended or shall be construed to confer upon, or to
give to, any Person or entity, other than the Indenture Trustee, the paying
agent, if any, and the holders of the Obligations, any right, remedy or claim
under or by reason of this Indenture or any covenant, condition or stipulation
hereof, and all covenants, stipulations, promises and agreements in this
Indenture contained by and on behalf of the Issuer are for the sole and
exclusive benefit of the Indenture Trustee, the paying agent, if any, and the
holders of the Obligations.

          Section 8.12 Obligations are Limited Obligations. The Notes and the
obligations of the Issuer contained in this Indenture are special, limited
obligations of the Issuer, secured by and payable solely from the Trust Estate
herein provided. The Issuer shall not be obligated to pay the Notes, the
interest thereon, or any other obligation created by or arising from this
Indenture from any other source.

          Section 8.13 Counterparty Rights. Notwithstanding any provision of
this Indenture, no Counterparty that shall be in default under any Derivative
Product with the Issuer shall have any of the rights granted to a Counterparty
or as the Noteholder of an Obligation hereunder.

          Section 8.14 Disclosure of Names and Addresses of Noteholders.
Noteholders by receiving and holding the same, agree with the Issuer and the
Indenture Trustee that neither the Issuer nor the Indenture Trustee nor any
Securities Depository shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Noteholders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Indenture Trustee shall not be held accountable by reason
of mailing any material pursuant to a request made under TIA Section 312(b).

          Section 8.15 Aggregate Principal Amount of Obligations. Whenever in
this Indenture reference is made to the aggregate principal amount of any
Obligations, such phrase shall mean, at any time, the principal amount of any
Notes and the Derivative Value of any Derivative Product.

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<PAGE>

          Section 8.16 Financed Student Loans. The Issuer expects to acquire
Student Loans and to pledge Student Loans to the Indenture Trustee, in
accordance with this Indenture, which Student Loans, upon becoming subject to
the lien of this Indenture, constitute Financed Student Loans, as defined
herein. If for any reason a Financed Student Loan does not constitute a Student
Loan, or ceases to constitute a Student Loan, such loan shall continue to be
subject to the lien of this Indenture as a Financed Student Loan.

          Section 8.17 Limitation of Liability of the Co-Owner Trustee. It is
expressly understood and agreed by the parties hereto that (a) this Indenture is
executed and delivered by the Co-Owner Trustee, not individually or personally
but solely as trustee of the Issuer, in the exercise of the powers and authority
conferred and vested in it under the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by the Co-Owner Trustee but is made and intended for the purpose of
binding only the Issuer, and (c) under no circumstances shall the Co-Owner
Trustee be personally liable for the payment of any indebtedness or expenses of
the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this
Indenture or the other Basic Documents.

                                   Article IX

                        Payment and Cancellation of Notes
                          and Satisfaction of Indenture

          Section 9.01 Trust Irrevocable. The trust created by the terms and
provisions of this Indenture is irrevocable until the indebtedness secured
hereby (the Notes and interest thereon) and all Issuer Derivative Payments are
fully paid or provision made for their payment as provided in this Article IX.

          Section 9.02 Satisfaction of Indenture.

          (a) If the Issuer shall pay, or cause to be paid, or there shall
otherwise be paid (i) to the Noteholders, the principal of and interest on the
Notes, at the times and in the manner stipulated in this Indenture and (ii) to
each Counterparty, all Issuer Derivative Payments then due, then the pledge of
the Trust Estate hereunder, and all covenants, agreements, and other obligations
of the Issuer to the Noteholders shall thereupon cease, terminate, and become
void and be discharged and satisfied. In such event, the Indenture Trustee shall
execute and deliver to the Issuer all such instruments as may be desirable to
evidence such discharge and satisfaction, and the Indenture Trustee shall pay
over or deliver all money held by it under this Indenture to the party entitled
to receive the same under this Indenture.

          (b) Any Issuer Derivative Payments are deemed to have been paid and
the applicable Derivative Product terminated when payment of all Issuer
Derivative Payments due and payable to each Counterparty under its respective
Derivative Product have been made or duly provided for to the satisfaction of
each Counterparty and the respective Derivative Product has been terminated.

                                       54

<PAGE>

          (c) In no event shall the Indenture Trustee deliver over to the Issuer
any Financed Student Loans that were originated under the Act unless the Issuer
is an Eligible Lender, if the Act or Regulations then in effect require the
owner or holder of such Financed Student Loans to be an Eligible Lender.

          Section 9.03 Cancellation of Paid Notes. Any Notes that have been paid
or purchased by the Issuer, mutilated Notes replaced by new Notes, and any
temporary Notes for which definitive Notes have been delivered shall (unless
otherwise directed by the Issuer by Issuer Order) forthwith be cancelled by the
Indenture Trustee and, except for temporary Notes, returned to the Issuer.

                                    Article X

                                   Termination

          Section 10.01 Termination of the Trust.

          (a) The trust created by this Indenture shall terminate upon the later
of (A) payment to the Noteholders and to the Indenture Trustee of all amounts
required to be paid to them pursuant to this Indenture and any Supplemental
Indenture and the disposition of all property held as part of the Trust Estate
or (B) the day following the date on which all reimbursement obligations to the
Counterparties, if any, and any other Person as may be provided for in any
Supplemental Indenture have been paid in full. The Issuer shall promptly notify
the Indenture Trustee of any prospective termination pursuant to this Section
10.01.

          (b) Notice of any prospective termination, specifying the Payment Date
for payment of the final distribution and requesting the surrender of the Notes
for cancellation, shall be given promptly by the Indenture Trustee by letter to
Noteholders mailed not less than 10 nor more than 15 days preceding the
specified Payment Date stating (i) the Payment Date upon which final payment of
the Notes shall be made, (ii) the amount of any such final payment, and (iii)
the location for presentation and surrender of the Notes. Payment of the final
distribution that shall be made only upon presentation and surrender of the
Notes at the corporate trust office of the Indenture Trustee specified in the
notice.

          Section 10.02 Notice. The Indenture Trustee shall give notice of
termination of the trust created by this Indenture to the Issuer and each Rating
Agency.

                                   Article XI

                             Reporting Requirements

          Section 11.01 Annual Statement as to Compliance. The Servicer will
deliver to each Rating Agency, the Indenture Trustee and the Issuer, on or
before March 31 of each year, beginning with March 31, 2003, a certificate
stating that (a) a review of the activities of the Servicer during the preceding
calendar year and of its performance under the Servicing Agreement has been made
under the supervision of the officer signing such certificate and (b) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Servicing Agreement throughout such
year, or, there has been a default in

                                       55

<PAGE>

the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof.

          Section 11.02 Annual Independent Public Accountant's Servicing Report.
On or before March 31 of each year, beginning March 31, 2003, the Servicer at
its expense shall cause an independent public accountant that is a member of the
American Institute of Certified Public Accountants to furnish a statement to
each Rating Agency, the Issuer and the Indenture Trustee to the effect that such
accountant has examined certain documents and records relating to the servicing
of the Financed Student Loans (during the preceding fiscal year) under servicing
agreements substantially similar one to another and to the Servicing Agreement
and that, on the basis of such examination, such servicing has been conducted in
compliance with such servicing agreements except for such significant exceptions
or errors in records that, in the opinion of such accountant, requires it to
report and that are set forth in such report.

          Section 11.03 Servicer's Certificate. Each month, not later than the
twenty-fifth day of each month, the Servicer shall deliver to the Indenture
Trustee, a certificate certified by an officer of the Servicer certifying to the
accuracy of the monthly statement contemplated by Section 11.04.

          Section 11.04 Statements to Noteholders. On or before the fifteenth
day of each month, the Issuer shall provide or cause to be provided to the
Indenture Trustee (with a copy to the Rating Agencies) for the Indenture Trustee
to forward within 5 days of receipt to each Noteholder, a statement setting
forth information with respect to the Notes and Financed Student Loans as of the
end of the preceding month, including the following to the extent applicable;

          (a) the amount of payments with respect to each Series of Notes paid
with respect to principal during the preceding month;

          (b) the amount of payments with respect to each Series of Notes paid
with respect to interest during the preceding month;

          (c) the amount of the payments allocable to any interest that was
carried over together with the amount of any remaining outstanding interest that
was carried over;

          (d) the principal balance of Financed Student Loans as of the close of
business on the last day of the preceding month;

          (e) the aggregate outstanding principal amount of the Notes of each
Series as of the close of business on the last day of the preceding month, after
giving effect to payments allocated to principal reported under clause (a)
above;

          (f) the interest rate for any Series of variable rate Notes,
indicating how such interest rate is calculated;

          (g) the amount of the servicing fees allocated to the Servicer as of
the close of business on the last day of the preceding month;

                                       56

<PAGE>

          (h) the amount of the administration fee, the auction agent fee,
market agent fee, calculation agent fee and the trustee fee, if any, allocated
as of the close of business on the last day of the preceding month;

          (i) the amount of the Recoveries of Principal and interest received
during the preceding month relating to Financed Student Loans;

          (j) the amount of the payment attributable to moneys in the
Capitalized Interest Fund, the amount of any other withdrawals from the
Capitalized Interest Fund and the balance of the Capitalized Interest Fund as of
the close of business on the last day of the preceding month;

          (k) the amount of the payment attributable to moneys in the Reserve
Fund, the amount of any other withdrawals from the Reserve Fund and the balance
of the Reserve Fund as of the close of business on the last day of the preceding
month;

          (l) the portion, if any, of the payments attributable to amounts on
deposit in the Acquisition Fund;

          (m) the aggregate amount, if any, paid by the Indenture Trustee to
acquire Student Loans from amounts on deposit in the Acquisition Fund during the
preceding month;

          (n) the amount remaining in the Acquisition Fund that has not been
used to acquire Student Loans and is being transferred to the Revenue Fund;

          (o) the aggregate amount, if any, paid for Financed Student Loans
purchased from the Trust during the preceding month;

          (p) the number and principal amount of Financed Student Loans, as of
the close of business on the last day of the preceding month, (A) that are (i)
11 to 30 days delinquent, 31 to 60 days delinquent, (ii) 61 to 90 days
delinquent, (iii) 91 to 120 days delinquent, (iv) 121 to 150 days delinquent,
(v) 151 to 180 days delinquent, (vi) greater than 180 days delinquent, and (B)
for which claims have been filed with the appropriate Guaranty Agency and that
are awaiting payment;

          (q) the Value of the Trust Estate and the Outstanding principal amount
of the Notes as of the close of business on the last day of the preceding month;

          (r) the number and percentage by dollar amount of (i) initial federal
reimbursement claims for Financed Student Loans and (ii) rejected federal
reimbursement claims for Financed Student Loans;

          (s) principal balance of Financed Student Loans in each of the
following statuses: (i) forbearance, (ii) deferment, (iii) claims, (iv)
in-school, (v) grace, and (vi) repayment; and

          (t) the principal balance of Financed Student Loans by loan type as of
the close of business on the last day of the preceding month.

                                       57

<PAGE>

          Each amount set forth pursuant to paragraph (a), (b), (g) and (h)
above shall be expressed as a dollar amount per authorized denomination of a
Note. A copy of the statements referred to above may be obtained by any
Noteholder by a written request to the Indenture Trustee, addressed to its
Corporate Trust Office.

                  [Remainder of page intentionally left blank.]

                                       58

<PAGE>

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

                                  Education Funding Capital Trust-I, by Fifth
                                     Third Bank, not in its individual capacity,
                                     but solely as Co-Owner Trustee on behalf of
                                     the Trust

                                  By: /s/ Keith E. Brock
                                      ------------------------------------------
                                      Name: Keith E. Brock
                                      Title: Trust Officer

                                  Fifth Third Bank, not in its individual
                                     capacity but solely as Indenture Trustee

                                  By: /s/ Keith E. Brock
                                      ------------------------------------------
                                      Name: Keith E. Brock
                                      Title: Trust Officer

                                  Acknowledged and accepted as to the Granting
                                  Clauses as of the day and year first above
                                  written:

                                  Fifth Third Bank, not in its individual
                                     capacity but solely as Trust Eligible
                                     Lender Trustee

                                  By: /s/ Keith E. Brock
                                      ------------------------------------------
                                      Name: Keith E. Brock
                                      Title: Trust Officer

          Grad Partners, Inc. hereby acknowledges and accepts the duties and
obligations assigned to the Servicer in Article XI hereof.

                                  Grad Partners, Inc., as Servicer

                                  By: /s/ Perry D. Moore
                                      ------------------------------------------
                                      Name: Perry D. Moore
                                      Title: Senior Vice President - Finance

<PAGE>

                                                                       Exhibit A

                      Student Loan Acquisition Certificate

          This Student Loan Acquisition Certificate (this "Certificate") is
submitted pursuant to the provisions of Section 4.02 of the Indenture of Trust
dated as of May 1, 2002 (the "Indenture") among Education Funding Capital
Trust-I (the "Issuer"), Fifth Third Bank, as Indenture Trustee, and Fifth Third
Bank, as Trust Eligible Lender Trustee. All capitalized terms used in this
Certificate and not otherwise defined herein shall have the same meanings given
to such terms in the Indenture. In your capacity as Indenture Trustee, you are
hereby authorized and requested to disburse to Grad Partners, Inc. the sum of
$           (or, in the case of an exchange, the Student Loans listed in Exhibit
 ----------
A hereto) for the acquisition of Student Loans. With respect to the Student
Loans so to be acquired, the Issuer hereby certifies as follows:

          1. The Student Loans to be acquired are those specified in Schedule A
attached hereto (the "Acquired Student Loans"). The remaining unpaid principal
amount of each Acquired Student Loan is as shown on such Schedule A.

          2. The amount to be disbursed pursuant to this Certificate does not
exceed the amount permitted by Section 4.02 of the Indenture (or, if a Financed
Student Loan is being sold in exchange for an Acquired Student Loan under the
Indenture, the aggregate unpaid principal amount of, and accrued interest on,
such Financed Student Loan does not exceed the amount permitted by Section 4.02
of the Indenture).

          3. Each Acquired Student Loan is an Student Loan authorized so to be
acquired by the Indenture.

          4. You have been previously, or are herewith, provided with the
following items (the items listed in (a), (b), (c), (d), (f) and (g) have been
received and are being retained, on your behalf, by the Issuer or the Servicer):

          (a) a copy of the Depositor Transfer and Sale Agreement between the
Issuer and the Eligible Lender with respect to the Acquired Student Loans;

          (b) with respect to each Insured Student Loan included among the
Acquired Student Loans, the Certificate of Insurance relating thereto;

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

          (d) an Opinion of Counsel to the Issuer specifying each action
necessary to perfect a security interest in all Student Loans to be acquired by
the Issuer pursuant to the Depositor Transfer and Sale Agreement in favor of the
Indenture Trustee in the manner provided for by the provisions of 20 U.S.C. (S)
1087-2(d)(3) or 20 U.S.C. (S) 1082 (m)(1)(D)(iv), as applicable (you are
authorized to rely on the advice of a single blanket Opinion of Counsel to the
Issuer until such time as the Issuer shall provide any amended opinion to you);

<PAGE>

          (e) a certificate of an Authorized Officer of the Issuer to the effect
that (i) the Issuer is not in default in the performance of any of its covenants
and agreements made in the Depositor Transfer and Sale Agreement relating to the
Acquired Student Loans; (ii) with respect to all Acquired Student Loans that are
Insured, Insurance is in effect with respect thereto, and with respect to all
Acquired Student Loans that are Guaranteed, the Guarantee Agreement is in effect
with respect thereto; and (iii) the Issuer is not in default in the performance
of any of its covenants and agreements made in any Contract of Insurance or the
Guarantee Agreement applicable to the Acquired Student Loans;

          (f) evidence that the promissory notes evidencing the Acquired Student
Loans have had stamped thereon or affixed thereto (individually or by blanket
endorsement) a notice specifying that they have been assigned to the Indenture
Trustee with all necessary endorsements; and

          (g) instruments duly assigning the Acquired Student Loans to the
Indenture Trustee.

          5. The Issuer is not, on the date hereof, in default under the
Indenture or in the performance of any of its covenants and agreements made in
the Depositor Transfer and Sale Agreement relating to the Acquired Student
Loans, and, to the best knowledge of the Issuer, the Eligible Lender is not in
default under the Transfer and Sale Agreements applicable to the Acquired
Student Loans. The Issuer is not aware of any default existing on the date
hereof under any of the other documents referred to in paragraph 4 hereof, nor
of any circumstances that would reasonably prevent reliance upon the Opinion of
Counsel referred to in paragraphs 4(d) hereof.

          6. All of the conditions specified in the Depositor Transfer and Sale
Agreement applicable to the Acquired Student Loans and the Indenture for the
acquisition of the Acquired Student Loans and the disbursement hereby authorized
and requested have been satisfied; provided that the Issuer may waive the
requirement of receiving an Opinion of Counsel from the counsel to the Lender.

          7. If a Financed Student Loan is being sold in exchange for an
Acquired Student Loan, the final expected maturity date of such Acquired Student
Loan shall be substantially similar to that of the Financed Student Loan being
sold and such sale and exchange shall not adversely affect the ability of the
Trust Estate to make timely principal and interest payments on its Obligations.

          8. With respect to all Acquired Student Loans that are Insured,
Insurance is in effect with respect thereto, and with respect to all Acquired
Student Loans that are Guaranteed, the Guarantee Agreement is in effect with
respect thereto.

          9. The Issuer is not in default in the performance of any of its
covenants and agreements made in any Contract of Insurance or the Guarantee
Agreement applicable to the Acquired Student Loans.

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

                                       2

<PAGE>

          11. Student Loans are being acquired at a price that permits the
results of the Cash Flows provided to the Rating Agencies on the Date of
Issuance to be sustained.

                  [Remainder of page intentionally left blank.]

                                       3

<PAGE>

                    Witness my hand this     day of May 2002.
                                         ---

                                  Education Funding Capital Trust-I, by Fifth
                                     Third Bank, not in its individual capacity,
                                     but solely as Co-Owner Trustee on behalf of
                                     the Trust

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

                                       4

<PAGE>

                                                                      SCHEDULE A

                          Student Loans To Be Acquired
                          (On file with the Custodian)

<PAGE>

                              Form of Issuer Order

                        Education Funding Capital Trust-I

Issuer Order for the transfer of moneys from the Revenue Fund to the Operating
Fund pursuant to Section 4.03 of the Base Indenture.

To:  Fifth Third Bank, as indenture trustee (the "Indenture Trustee") under the
     Indenture of Trust dated as of May 1, 2002 (the "Base Indenture") among
     Education Funding Capital Trust-I (the "Issuer"), Fifth Third Bank, as
     trust eligible lender trustee, and Fifth Third Bank, as Indenture Trustee,
     as supplemented by the 2002-1 Series A&B Supplemental Indenture of Trust of
     even date therewith (the "Indenture Supplement" and collectively with the
     Base Indenture, the "Indenture")

Ladies and Gentlemen:

          Pursuant to Section 4.03 of the Base Indenture, you hereby are
authorized and directed to transfer moneys in the Revenue Fund, on any date, to
the Operating Fund, subject to Section 4.07 of the Base Indenture.

                                           Very truly yours,

                                           Education Funding Capital Trust-I, by
                                             Fifth Third Bank, not in its
                                             individual capacity, but solely as
                                             Co-Owner Trustee on behalf of the
                                             Trust

                                           By:
                                              ----------------------------------
                                              Name:
                                              Title:
Dated:             200
       -----------    ---

<PAGE>

                                                                      Appendix A

                              Definitions and Usage

                                      Usage

                                   ----------

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

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

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

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

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

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

                                       1

<PAGE>

                                   Definitions

"Accounts" shall mean any accounts established pursuant to the Indenture.

"Acquisition Fund" shall mean the Fund bearing that name established pursuant to
Section 4.01(a) of the Indenture, including any Accounts and Subaccounts created
therein.

"Act" shall mean the Higher Education Act of 1965, as amended, together with any
rules, regulations and interpretations thereunder.

"Add-on Consolidation Loan" shall mean a Student Loan included in the Trust
Estate, the principal balance of which is added to an existing Consolidation
Loan during the Add-on Period, as required by the Act.

"Add-on Period" shall mean, for each Series of Notes issued under the Indenture,
the period of 180 days after the last date of origination of any Consolidation
Loan acquired by the Issuer with the proceeds of such Note offering.

"Administration Agreement" shall mean the Administration Agreement dated as of
May 1, 2002, between the Issuer and the Administrator.

"Administration Fee" shall have the meaning set forth in the Administration
Agreement.

"Administrator" shall mean Grad Partners, Inc., in its capacity as administrator
of the Issuer and the Financed Student Loans, and any successor thereto.

"Administrator Default" shall have the meaning set forth in Section 12 of the
Administration Agreement.

"Administrator's Certificate" shall mean the certificate of the Administrator
delivered pursuant to Section 2(b)(ii) of the Administration Agreement.

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

"Auction Agent Agreement" when used with respect to any Series of Notes, shall
have the meaning given to such term in the Supplemental Indenture authorizing
the issuance of such Notes.

"Authorized Officer" shall mean (i) with respect to the Issuer, any officer of
the Co-Owner Trustee or Administrator who is authorized to act for the Co-Owner
Trustee or Administrator in matters relating to the Issuer pursuant to the Basic
Documents and who is identified on the lists of Authorized Officers delivered by
the Co-Owner Trustee and Administrator to the Indenture Trustee on a Closing
Date (as such list may be modified or supplemented from time to time thereafter)
and (ii) with respect to the Depositor, the Seller, the Servicer and the
Administrator, any officer or other authorized representative of the Seller, the
Servicer or the Administrator, respectively, who is authorized to act for the
Depositor, the Seller, the Servicer or the Administrator, respectively, in
matters relating to itself or to the Issuer and to be acted upon by the
Depositor, the Seller, the Servicer or the Administrator, respectively, pursuant
to the Basic Documents and who is identified on the list of Authorized Officers
delivered by the Depositor, the Seller, the Servicer and the Administrator,
respectively, to the Indenture Trustee on a Closing Date (as such list may be
modified or supplemented from time to time thereafter).

"Basic Documents" shall mean the Trust Agreement, the Indenture, the
Supplemental Indentures, the Eligible Lender Trust Agreements, the Transfer and
Sale Agreements, the Servicing Agreement, the Subservicing Agreements, the
Administration Agreement, the Guarantee Agreements, the Auction Agent Agreement,
the Market Agent Agreement, the Broker-Dealer

                                       2

<PAGE>

Agreements, the Note Purchase Agreement, any Derivative Product and other
documents and certificates delivered in connection with any thereof.

"Borrower" shall mean an individual who is the maker of a Borrower Note and,
with respect to Guaranteed Student Loans, who obtains a Student Loan from an
"eligible lender" in accordance with the Act and the policies and procedures of
a Federal Guarantor.

"Borrower Note" shall mean a promissory note of a Borrower for a Student Loan,
which promissory note, in the case of Guaranteed Student Loans, shall be set
forth on the appropriate form furnished by the Federal Guarantor and shall meet
the criteria set forth by the Act and the policies and procedures of the Federal
Guarantor.

"Broker-Dealer Agreement" when used with respect to any Series of Notes, shall
have the meaning given to such term in the Supplemental Indenture authorizing
the issuance of such Notes.

"Business Day" shall mean any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions or trust companies in the State of Ohio, or
in the city in which the Corporate Trust Office of the Indenture Trustee is
located, are authorized or obligated by law, regulation or executive order to
remain closed.

"Capitalized Interest Fund" shall mean the Fund bearing that name established
pursuant to Section 4.01(a) of the Indenture, including any Accounts and
Subaccounts created therein.

"Cash Flows" shall mean cash flow schedules prepared by the Issuer or its
designee, including a listing of all assumptions used in the preparation of such
cash flow schedules, and provided to each Rating Agency. All assumptions used in
the preparation of the Cash Flows shall be reasonable in the judgment of the
Issuer and disclosed in writing to each Rating Agency.

"Certificate of Insurance" shall mean any Certificate evidencing a Financed
Student Loan is Insured pursuant to a Contract of Insurance.

"Clearing Agency" shall mean an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.

"Closing Date" shall mean the date of issuance of a Series of Notes under the
Indenture.

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time. Each reference to a section of the Code herein shall be deemed to include
the United States Treasury Regulations, including applicable temporary and
proposed regulations, relating to such section that are applicable to the Notes
or the use of the proceeds thereof. A reference to any specific section of the
Code shall be deemed also to be a reference to the comparable provisions of any
enactment that supersedes or replaces the Code thereunder from time to time.

"Commission" shall mean the Securities and Exchange Commission.

                                       3

<PAGE>

"Consolidation Loan" shall mean a Student Loan made pursuant to Section 428C of
the Act to consolidate the Borrower's obligations under various federally
authorized student loan programs into a single loan, as supplemented by the
addition of any related Add-on Consolidation Loan.

"Contract of Insurance" shall mean the contract of insurance between the
Eligible Lender and the Secretary.

"Co-Owner Eligible Lender Trust Agreement" shall mean the Eligible Lender Trust
Agreement dated as of May 1, 2002 between the Issuer and the Trust Eligible
Lender Trustee.

"Co-Owner Trustee" shall mean the Fifth Third Bank, not in its individual
capacity, but solely as Co-Owner trustee of the Trust under the Trust Agreement.

"Corporate Trust Office" shall mean (i) with respect to the Indenture Trustee,
the principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be administered, which office at a Closing
Date is located at MD 10AT60, 38 Fountain Square Plaza, Cincinnati, Ohio 45263,
Attention: Corporate Trust Administration (telephone: +1.513.534.3367;
facsimile: +1.513.534.6785) or at such other address as the Indenture Trustee
may designate from time to time by notice to the Noteholders and the Depositor,
or the principal corporate trust office of any successor Indenture Trustee (the
address of which the successor Indenture Trustee will notify the Noteholders and
the Depositor) and (ii) with respect to the Co-Owner Trustee and the Trust
Eligible Lender Trustee, the principal corporate trust offices of the Co-Owner
Trustee and the Trust Eligible Lender Trustee located at MD 10AT60, 38 Fountain
Square Plaza, Cincinnati, Ohio 45263, Attention: Corporate Trust Administration
(telephone: +1.513.534.3367; facsimile: +1.513.534.6785) or at such other
address as the Co-Owner Trustee or the Trust Eligible Lender Trustee may
designate by notice to the Depositor or the principal corporate trust office of
any successor Co-Owner Trustee or Trust Eligible Lender Trustee (the address of
which the successor Co-Owner Trustee or Trust Eligible Lender Trustee will
notify the Depositor).

"Counterparty" shall mean any counterparty under a Derivative Product.

"Counterparty Derivative Payment" shall mean any payment to be made to, or for
the benefit of, the Issuer under a Derivative Product.

"Custodian" shall mean the Servicer or a Subservicer in its capacity as
custodian of the Borrower Notes or any permitted successor Custodian.

"Date of Issuance" when used with respect to any Series of Notes, shall have the
meaning given to such term in the Supplemental Indenture authorizing the
issuance of such Notes.

"Default" shall mean any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.

"Delivery" when used with respect to Trust Account Property shall mean:

                                        4

<PAGE>

          (a) with respect to bankers' acceptances, commercial paper, negotiable
     certificates of deposit and other obligations that constitute instruments
     and are susceptible of physical delivery ("Physical Property"):

               (i) transfer of possession thereof to the Indenture Trustee,
     endorsed to, or registered in the name of, the Indenture Trustee or its
     nominee or endorsed in blank;

          (b) with respect to a certificated security:

               (i) delivery thereof in bearer form to the Indenture Trustee; or

               (ii) delivery thereof in registered form to the Indenture
          Trustee; and

                    (A) the certificate is endorsed to the Indenture Trustee or
               in blank by effective endorsement; or

                    (B) the certificate is registered in the name of the
               Indenture Trustee, upon original issue or registration of
               transfer by the Issuer;

          (c) with respect to an uncertificated security:

               (i) the delivery of the uncertificated security to the Indenture
     Trustee; or

               (ii) the Issuer has agreed that it will comply with instructions
     originated by the Indenture Trustee without further consent by the
     registered owner;

          (d) with respect to any security issued by the U.S. Treasury, the
     Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
     Association that is a book-entry security held through the Federal Reserve
     System pursuant to federal book-entry regulations:

               (i) a Federal Reserve Bank by book entry credits the book-entry
     security to the securities account (as defined in 31 CFR Part 357) of a
     participant (as defined in 31 CFR Part 357) which is also a securities
     intermediary; and

               (ii) the participant indicates by book entry that the book-entry
     security has been credited to the Indenture Trustee's securities account;

          (e) with respect to a security entitlement:

               (i) the Indenture Trustee becomes the entitlement holder; or

               (ii) the securities intermediary has agreed that it will comply
     with entitlement orders originated by the Indenture Trustee;

          (f) without further consent by the entitlement holder; for the purpose
     of clauses (b) and (c) hereof "delivery" shall mean:

                                        5

<PAGE>

               (i) with respect to a certificated security:

                    (A) the Indenture Trustee acquires possession thereof;

                    (B) another person (other than a securities intermediary)
               either acquires possession thereof on behalf of the Indenture
               Trustee or, having previously acquired possession thereof,
               acknowledges that it holds for the Indenture Trustee; or

                    (C) a securities intermediary acting on behalf of the
               Indenture Trustee acquires possession of thereof, only if the
               certificate is in registered form and has been specially endorsed
               to the Indenture Trustee by an effective endorsement;

               (ii) with respect to an uncertificated security:

                    (A) the Issuer registers the Indenture Trustee as the Note
               Owner, upon original issue or registration of transfer; or

                    (B) another person (other than a securities intermediary)
               either becomes the Note Owner thereof on behalf of the Indenture
               Trustee or, having previously become the Note Owner, acknowledges
               that it holds for the Indenture Trustee;

          (g) for purposes of this definition, except as otherwise indicated,
     the following terms shall have the meaning assigned to each such term in
     the UCC:

               (i)  "certificated security"

               (ii) "effective endorsement"

               (iii) "entitlement holder"

               (iv) "instrument"

               (v)  "securities account"

               (vi) "securities entitlement"

               (vii) "securities intermediary"

               (viii) "uncertificated security"

"Department" shall mean the United States Department of Education, an agency of
the federal government.

"Depositor" shall mean Education Funding Capital I, LLC.

                                       6

<PAGE>

"Depositor Eligible Lender Trust Agreement" shall mean the Eligible Lender Trust
Agreement dated as of May 1, 2002 between the Depositor and the Depositor
Eligible Lender Trustee.

"Depositor Eligible Lender Trustee" shall mean Fifth Third Bank, a banking
corporation organized under the laws of the State of Ohio, not in its individual
capacity but solely Depositor Eligible Lender Trustee under the Depositor
Eligible Lender Trust Agreement.

"Depositor Transfer and Sale Agreement" shall mean the Transfer and Sale
Agreement dated as of May 1, 2002 among the Depositor, the Depositor Eligible
Lender Trustee, the Issuer and the Trust Eligible Lender Trustee.

"Derivative Payment Date" shall mean, with respect to a Derivative Product, any
date specified in such Derivative Product on which both or either of the Issuer
Derivative Payment and/or a Counterparty Derivative Payment is due and payable
under such Derivative Product.

"Derivative Product" shall mean a written contract or agreement between the
Issuer and a Counterparty that provides that the Issuer's obligations thereunder
will be conditioned on the absence of (i) a failure by the Counterparty to make
any payment required thereunder when due and payable, or (ii) a default
thereunder with respect to the financial status of the Counterparty, and:

     (a)  under which the Issuer is obligated to pay (whether on a net payment
          basis or otherwise) on one or more scheduled and specified Derivative
          Payment Dates, the Issuer Derivative Payments in exchange for the
          Counterparty's obligation to pay (whether on a net payment basis or
          otherwise), or to cause to be paid, to the Issuer, Counterparty
          Derivative Payments on one or more scheduled and specified Derivative
          Payment Dates in the amounts set forth in the Derivative Product;

     (b)  for which the Issuer's obligation to make Issuer Derivative Payments
          may be secured by a pledge of and lien on the Trust Estate on an equal
          and ratable basis with any class of the Issuer's Outstanding Notes and
          which Issuer Derivative Payments may be equal in priority with any
          priority classification of the Issuer's Outstanding Notes; and

     (c)  under which Counterparty Derivative Payments are to be made directly
          to the Indenture Trustee for deposit into the Revenue Fund.

"Derivative Value" shall mean the value of the Derivative Product, if any, to
the Counterparty, provided that such value is defined and calculated in
substantially the same manner as amounts are defined and calculated pursuant to
the applicable provisions of an ISDA Master Agreement.

"Determination Date" shall mean with respect to (i) a principal payment date, 16
calendar days preceding such date and, (ii) an interest payment date, the third
Business Day preceding such date.

"Directing Notes" shall mean, so long as any Series of Senior Notes are
Outstanding, the Senior Notes, and thereafter, the Subordinate Notes.

                                        7

<PAGE>

"Eligible Deposit Account" shall mean either (a) a segregated account with a
depository institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any domestic
branch of a foreign bank) that has either a long-term unsecured debt rating of
A2 by Moody's and AA by Fitch or a short-term unsecured debt rating of Prime-1
by Moody's and F2 by Fitch, and whose deposits are insured by the Federal
Deposit Insurance Corporation; or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank) having corporate trust
powers and acting as trustee for funds deposited in the account, so long as any
unsecured notes of the depository institution have an investment grade credit
rating from each Rating Agency.

"Eligible Investments" shall mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form that
evidence:

               (a) direct obligations of, and obligations fully guaranteed as to
          timely payment by, the United States of America;

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

               (c) commercial paper having, at the time of the investment or
          contractual commitment to invest therein, a rating from each of the
          Rating Agencies in the highest short-term and long-term investment
          category granted thereby;

               (d) investments in money market funds having a rating from
          Moody's and each of the other Rating Agencies rating such fund, in the
          highest short-term investment category granted thereby (including
          funds for which the Indenture Trustee, the Servicer or the Trust
          Eligible Lender Trustee or any of their respective Affiliates is
          investment manager or advisor);

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

                                        8

<PAGE>

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

               (g) any other investment permitted by each of the Rating Agencies
          as set forth in a written notice delivered to the Indenture Trustee.

No obligation will be considered to be rated in the highest investment category
if it has an "r" highlighter affixed to its rating. Eligible Investments shall
not include interest-only securities or securities purchased at a premium over
par.

"Eligible Lender" shall mean any "Eligible Lender" as defined in the Act that
has received an eligible lender designation from the Secretary with respect to
Student Loans made under the Act.

"Eligible Lender Trust Agreements" shall mean collectively the Seller Eligible
Lender Trust Agreement, the Depositor Eligible Lender Trust Agreement and the
Co-Owner Eligible Lender Trust Agreement.

"Event of Bankruptcy" shall mean (a) the Issuer shall have commenced a voluntary
case or other proceeding seeking liquidation, reorganization, or other relief
with respect to itself or its debts under any bankruptcy, insolvency, or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property, or shall have made a general assignment for
the benefit of creditors, or shall have declared a moratorium with respect to
its debts or shall have failed generally to pay its debts as they become due, or
shall have taken any action to authorize any of the foregoing; or (b) an
involuntary case or other proceeding shall have been commenced against the
Issuer seeking liquidation, reorganization, or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or any substantial part
of its property, provided such action or proceeding is not dismissed within 60
days.

"Events of Default" shall have the meaning set forth in Article V of the
Indenture.

"Federal Guarantor" shall mean a state or private non-profit guarantor that
guarantees the payment of principal of and interest on any of the Financed
Student Loans, which agency is reinsured by the Department under the Act for
between (x) 80% and 100% of the amount of default claims paid by such Federal
Guarantor for a given federal fiscal year for loans disbursed prior to October
1, 1993, for 78% to 98% of default claims paid for loans disbursed on or after
October 1, 1993 but prior to October 1, 1998 any (y) 75% to 95% of the amount of
default claims paid to by such Federal Guarantor for a given federal fiscal year
for loans disbursed on or after October 1, 1998 and for 100% of death,
disability, bankruptcy, closed school and false certification claims paid.

                                        9

<PAGE>

"FFEL Program" shall mean the Federal Family Education Loan Program established
by the Act pursuant to which loans are made to borrowers pursuant to certain
guidelines, and the repayment of such loans is guaranteed by a Guaranty Agency,
and any predecessor or successor program.

"FFELP Loan" shall mean a Student Loan made under the FFEL Program.

"Financed" or "Financing," when used with respect to Student Loans, shall mean
or refer to Student Loans (a) acquired by the Issuer with balances in the
Acquisition Fund or otherwise deposited in or accounted for in the Acquisition
Fund or otherwise constituting a part of the Trust Estate and (b) Student Loans
substituted or exchanged for Financed Student Loans, but does not include
Student Loans released from the lien of the Indenture and sold or transferred,
to the extent permitted by the Indenture.

"Financed Student Loans" shall mean (1) Student Loans that, as of any date of
determination, have been conveyed to the Issuer; and (2) any Student Loans that
the principal balance of which is increased by the principal balance of any
related Add-on Consolidation Loan; provided, however, that each Financed Student
Loan shall be a FFELP Loan unless the Issuer has obtained a Rating Confirmation
regarding the acquisition of non-FFELP Loans.

"Fiscal Year" shall mean the fiscal year of the Issuer as established from time
to time.

"Fitch" shall mean Fitch Ratings or any successor thereto.

"Funds" shall mean the funds established pursuant to Section 4.01(a) of the
Indenture.

"Guarantee" or "Guaranteed" shall mean, with respect to an Student Loan, the
insurance or guarantee by the Guaranty Agency pursuant to such Guaranty Agency's
Guarantee Agreement of the maximum percentage of the principal of and accrued
interest on such Student Loan allowed by the terms of the Act with respect to
such Student Loan at the time it was originated and the coverage of such Student
Loan by the federal reimbursement contracts, providing, among other things, for
reimbursement to the Guaranty Agency for payments made by it on defaulted
Student Loans insured or guaranteed by the Guaranty Agency of at least the
minimum reimbursement allowed by the Act with respect to a particular Student
Loan.

"Guaranty Agency" shall mean any entity authorized to guarantee student loans
under the Act and with which the Indenture Trustee maintains a Guarantee
Agreement.

"Guarantee Agreements" shall mean a guaranty or lender agreement between the
Indenture Trustee and any Guaranty Agency, and any amendments thereto.

"Guarantee Payment" shall mean any payment made by a Federal Guarantor pursuant
to a Guarantee Agreement in respect of a Student Loan.

"Highest Priority Obligations" shall mean, (a) at any time when Senior
Obligations are Outstanding, the Senior Obligations, and (b) at any time when no
Senior Obligations are Outstanding, the Subordinate Obligations.

                                       10

<PAGE>

"Indenture" shall mean the Indenture of Trust dated as of May 1, 2002 among the
Issuer, the Trust Eligible Lender Trustee and the Indenture Trustee, as amended
and supplemented from time to time.

"Indenture Trustee" shall mean Fifth Third Bank, a banking corporation organized
under the laws of the State of Ohio, not in its individual capacity but solely
as Indenture Trustee under the Indenture.

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

"Initial Purchaser" shall mean, with respect to a Series of Notes, the initial
purchaser of such Notes, which initial purchaser shall be identified in the
Supplemental Indenture authorizing the issuance of such Notes.

"Insurance" or "Insured" or "Insuring" shall mean, with respect to a Student
Loan, the insuring by the Secretary under the Act (as evidenced by a Certificate
of Insurance or other document or certification issued under the provisions of
the Act) of 100% of the principal of and accrued interest on such Student Loan.

"Interest Benefit Payment" shall mean an interest payment on Student Loans
received pursuant to the Act and an agreement with the federal government, or
any similar payments.

"Interest Fund" shall mean the Fund bearing that name established pursuant to
Section 4.01(a) of the Indenture, including any Accounts and subaccounts created
therein.

"Interest Subsidy Payments" shall mean payments, designated as such, consisting
of interest subsidies by the Department in respect of Financed Student Loans
that were originated under the Act to the Trust Eligible Lender Trustee on
behalf of the Trust in accordance with the Act.

"ISDA Master Agreement" shall mean the ISDA Interest Rate and Currency Exchange
Agreement, copyright 1992, as amended from time to time, including any schedule
or confirmation relating thereto, and as in effect with respect to any
Derivative Product.

"Issuer" shall mean Education Funding Capital Trust-I, until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained in the Indenture and required by the TIA, each other obligor
on the Notes.

"Issuer Derivative Payment" shall mean a payment required to be made by or on
behalf of the Issuer due to a Counterparty pursuant to a Derivative Product.

                                       11

<PAGE>

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

"Market Agent Agreement" when used with respect to any Series of Notes, shall
have the meaning given to such term in the Supplemental Indenture authorizing
the issuance of such Notes.

"Maturity" when used with respect to any Note, shall mean the date on which the
principal thereof becomes due and payable as therein or herein provided, whether
at its Stated Maturity, by earlier redemption, by declaration of acceleration,
or otherwise.

"Moody's" shall mean Moody's Investors Service, Inc. and its successors and
assigns.

"Note Counsel" shall mean counsel to the Issuer.

"Note Purchase Agreement" shall mean, with respect to a Series of Notes, the
agreement regarding the purchase of such Notes between the Issuer and the
Initial Purchaser identified in the Supplemental Indenture authorizing the
issuance of such Notes.

"Note Owner" shall mean, with respect to a book-entry Note, the Person who is
the owner of such book-entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).

"Noteholder" shall mean, with respect to a Note, the Person in whose name a Note
is registered in the Note registration books maintained by the Indenture Trustee
and, with respect to a Derivative Product, the Counterparty thereunder.

"Noteholder Approval" shall have the meaning given such term in Section 5.01 of
the Indenture.

"Notes" shall mean, collectively, the Senior Notes and the Subordinate Notes.

"Obligations" shall mean Senior Obligations and Subordinate Obligations.

"Operating Fund" shall mean the Fund bearing that name established pursuant to
Section 4.01(b) of the Indenture, including any Accounts and Subaccounts created
therein.

"Opinion of Counsel" shall mean (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Issuer and who shall be
satisfactory to the Indenture Trustee, and which opinion or opinions shall be
addressed to the Indenture Trustee as Indenture Trustee and shall be in form and
substance satisfactory to the Indenture Trustee and (ii) with respect to the
Seller, the Administrator, the Servicer or a Federal Guarantor, one or more
written opinions of counsel who may be an employee of or counsel to the Seller,
the Administrator, the Servicer or such Federal Guarantor, which counsel shall
be acceptable to the Indenture Trustee, the Trust Eligible Lender Trustee or the
Rating Agencies, as applicable.

                                       12

<PAGE>

"Outstanding Amount" or "Outstanding" shall mean the aggregate principal amount
of all Notes outstanding at the date of determination.

"Owner" means the Depositor and each of its successors in interest as
beneficiaries of the Trust pursuant to Article III of the Trust Agreement.

"Ownership Percentage" with respect to an Owner means the proportion (expressed
as a percentage) of the beneficial interest in the Trust held by such Owner.

"Owner Trustee" shall mean the Wilmington Trust Company, not in its individual
capacity, but solely as trustee of the Trust under the Trust Agreement.

"Parity Percentage" means the ratio of the Value of the Trust Estate, less
accrued interest and fees with respect to all Notes, to the principal amount of
all Notes then Outstanding.

"Payment Date" shall mean, for any Note, any interest payment date, its Stated
Maturity or the date of any other regularly scheduled principal payment with
respect thereto.

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

"Physical Property" shall have the meaning given such term in the definition of
"Delivery".

"Principal Fund" shall mean the Fund bearing that name established pursuant to
Section 4.01(a) of the Indenture, including any Accounts and subaccounts created
therein.

"Program" shall mean the Issuer's program for the purchase of Student Loans, as
the same may be modified from time to time.

"Program Expenses" shall mean (a) the fees and expenses of the Indenture
Trustee, the Owner Trustee and the Co-Owner Trustee; (b) the fees and expenses
of any auction agent, any market agent, any calculation agent and any
broker-dealer then acting under a Supplemental Indenture with respect to auction
rate Notes; (c) the fees and expenses of any remarketing agent then acting under
a Supplemental Indenture with respect to variable rate Notes; (d) the fees and
expenses due to any credit provider of any Notes for which a credit facility or
liquidity facility is in place; (e) the fees of the Administrator, the Servicer
and/or Custodian under the Administration Agreement and any servicing agreement
or custodian agreement; (f) the fees and expenses of the Issuer incurred in
connection with the preparation of legal opinions and other authorized reports
or statements attributable to the Notes and the Financed Student Loans; (g)
transfer fees, purchase premiums, loan origination fees and Consolidation Loan
rebate fees on Financed Student Loans; (h) fees and expenses associated with the
delivery of a substitute credit facility or liquidity facility under a
Supplemental Indenture; (i) fees and expenses associated with (but not payments
under) Derivative Products; (j) the costs of remarketing any variable rate Notes
and (k) expenses incurred for the Issuer's maintenance and operation of its
Program as a direct consequence of the Indenture, the Notes or the Financed
Student Loans; including, but not

                                       13

<PAGE>

limited to, taxes, the reasonable fees and expenses of attorneys, agents,
financial advisors, consultants, accountants and other professionals,
attributable to such maintenance and operation, marketing expenses for the
Program and a prorated portion of the rent, personnel compensation, office
supplies and equipment, travel expenses and other lawful payments made to the
Owner Trustee and Co-Owner Trustee.

"Rating" shall mean one of the rating categories of Fitch and Moody's or any
other Rating Agency, provided Fitch and Moody's or any other Rating Agency, as
the case may be, is currently rating the Notes.

"Rating Agency" shall mean Moody's and Fitch. If no such organization or
successor is any longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person designated
by the Seller, notice of which designation shall be given to the Indenture
Trustee, the Trust Eligible Lender Trustee and the Servicer.

"Rating Agency Condition" shall mean, with respect to any action, that each
Rating Agency shall have been given prior notice thereof and that each of the
Rating Agencies shall have issued a Rating Confirmation.

"Rating Confirmation" shall mean, as of any date, a letter from each Rating
Agency then providing a Rating for any of the Notes, confirming that the action
proposed to be taken by the Issuer will not, in and of itself, result in a
downgrade of any of the Ratings then applicable to the Notes, or cause any
Rating Agency to suspend or withdraw the Ratings then applicable to the Notes.

"Recoveries of Principal" shall mean all amounts received by the Indenture
Trustee from or on account of any Financed Student Loan as a recovery of the
principal amount thereof, including scheduled, delinquent and advance payments,
payouts or prepayments, proceeds from insurance or from the sale, assignment,
transfer, reallocation or other disposition of a Financed Student Loan and any
payments representing such principal from the guarantee or insurance of any
Financed Student Loan.

"Regulations" shall mean the Regulations promulgated from time to time by the
Secretary or any Guaranty Agency guaranteeing Financed Student Loans.

"Required Parity Percentage" with respect to any Series of Notes shall have the
meaning given to such term in the Supplemental Indenture pursuant to which such
Series of Notes was issued.

"Required Senior Parity Percentage" with respect to any Series of Notes shall
have the meaning given to such term in the Supplemental Indenture pursuant to
which such Series of Notes was issued.

"Reserve Fund" shall mean the Fund bearing that name established pursuant to
Section 4.01(a) of the Indenture, including any Accounts and Subaccounts created
therein.

                                       14

<PAGE>

"Reserve Fund Requirement" shall mean an amount, if any, required to be on
deposit in the Reserve Fund with respect to any Notes pursuant to the
Supplemental Indenture authorizing the issuance of such Notes.

"Responsible Officer" with respect to the Indenture Trustee, any officer
assigned to the Corporate Trust Office of the Indenture Trustee, including any
managing director, principal, vice president, assistant vice president,
assistant treasurer, assistant secretary, trust officer or any other officer of
the Indenture Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of the Indenture, and also, with respect
to a particular matter, any other officer, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.

"Revenue" or "Revenues" shall mean all Recoveries of Principal, payments,
proceeds, charges and other income received by the Indenture Trustee or the
Issuer from or on account of any Financed Student Loan (including scheduled,
delinquent and advance payments of and any insurance proceeds with respect to,
interest, including Interest Benefit Payments, on any Financed Student Loan and
any Special Allowance Payment received by the Issuer with respect to any
Financed Student Loan) and all interest earned or gain realized from the
investment of moneys in any Fund or Account and all payments received by the
Issuer pursuant to a Derivative Product.

"Revenue Fund" shall mean the Fund bearing that name established pursuant to
Section 4.01(a) of the Indenture, including any Accounts and subaccounts created
therein.

"Revolving Period" shall mean a period determined by the Issuer subject to the
Rating Agency Condition.

"Schedule of Financed Student Loans" shall means the schedule of Student Loans
attached as Schedule A to each Student Loan Acquisition Certificate.

"Secretary" shall mean the Secretary of the Department, or any successor to the
functions thereof under the Act.

"Securities Act" shall mean the federal Securities Act of 1933, as amended.

"Securities Depository" or "Depository" shall mean The Depository Trust Company
and its successors and assigns or if, (a) the then Securities Depository resigns
from its functions as depository of the Notes or (b) the Issuer discontinues use
of the Securities Depository, any other securities depository that agrees to
follow the procedures required to be followed by a securities depository in
connection with the Notes and that is selected by the Issuer with the consent of
the Indenture Trustee.

"Securities Exchange Act" shall mean the federal Securities Exchange Act of
1934, as amended.

"Seller" shall mean Direct III Marketing, Inc., dba Education Lending Group, in
its capacity as seller of the Financed Student Loans under the Seller Transfer
and Sale Agreement.

                                       15

<PAGE>

"Seller Eligible Lender Trust Agreement" shall mean the Eligible Lender Trust
Agreement dated as of May 1, 2002 between the Seller and the Seller Eligible
Lender Trustee.

"Seller Eligible Lender Trustee" shall mean Fifth Third Bank, a banking
corporation organized under the laws of the State of Ohio, not in its individual
capacity but solely Seller Eligible Lender Trustee under the Seller Eligible
Lender Trust Agreement.

"Seller Transfer and Sale Agreement" shall mean Transfer and Sale Agreement
dated as of May 1, 2002 among the Seller, the Seller Eligible Lender Trustee,
the Depositor and the Depositor Eligible Lender Trustee.

"Senior Notes" shall mean all Notes secured on a priority senior to the
Subordinate Obligations and other borrowings of the Issuer, if any, secured
hereby.

"Senior Obligations" shall mean Senior Notes and any Derivative Product, the
priority of payment of which is equal with that of Senior Notes.

"Senior Parity Percentage" means the ratio of the Value of the Trust Estate,
less accrued interest and fees with respect to all Senior Notes, to the
principal amount of all Senior Notes then Outstanding.

"Series" shall mean a series of Notes to which all the same terms and conditions
apply and which can be identified by its own alpha-numeric designation (e.g.
"A-1") and which is so designated in the Supplement Indenture authorizing the
issuance of such Notes.

"Servicer" shall mean Grad Partners, Inc., in its capacity as servicer of the
Financed Student Loans, or any permitted successor Servicer, under the Servicer
Agreement.

"Servicer Default" shall mean an event specified as such in the applicable
Servicing Agreement.

"Servicer Report" shall contain the information specified in Exhibit A-1 to the
Servicing Agreement.

"Servicing Agreement" shall mean the servicing agreement with the Servicer
relating to Financed Student Loans, as amended from time to time.

"Servicing Fee" has the meaning specified in the applicable Servicing Agreement.

"Special Allowance Payments" shall mean payments, designated as such, consisting
of effective interest subsidies by the Department to the Trust Eligible Lender
Trustee on behalf of the Trust in accordance with the Act in respect of the
Financed Student Loans that were originated under the Act.

"Stated Maturity" shall mean the date specified in the Notes as the fixed date
on which principal of such Notes is due and payable.

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"Student Loan" shall mean an agreement to repay a disbursement of money to or on
behalf of an eligible student, evidenced by a Borrower Note and, with respect to
Guaranteed Student Loans, guaranteed in accordance with the policies and
procedures of a Federal Guarantor.

"Student Loan Acquisition Certificate" shall mean a certificate signed by an
Authorized Officer of the Issuer in substantially the form attached as Exhibit A
to the Indenture.

"Subaccount" shall mean any of the subaccounts that may be created and
established within any Account or Fund by the Indenture.

"Subordinate Notes" shall mean any Notes secured on a priority subordinate to
the Senior Obligations but on a priority senior to any other borrowings of the
Issuer, if any, secured hereby.

"Subordinate Obligations" shall mean Subordinate Notes and any Derivative
Product, the priority of payment of which is equal with that of Subordinate
Notes.

"Subservicer" shall mean Great Lakes Higher Education Servicing Corporation, in
its capacity as Subservicer of the Financed Student Loans, and/or any other
permitted Subservicer, under the Servicer Agreement.

"Subservicing Agreement" shall mean any agreement entered into between the
Servicer and a Subservicer containing the terms under which the Subservicer
shall service, and otherwise act with respect to, all or certain of the Financed
Student Loans.

"Supplemental Indenture" shall mean an agreement supplemental to the Indenture,
executed pursuant to Article VII of the Indenture.

"Transfer and Sale Agreements" shall mean collectively the Seller Transfer and
Sale Agreement and the Depositor Transfer and Sale Agreement.

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

"Trust" shall mean Education Funding Capital Trust-I, formed pursuant to the
Trust Agreement.

"Trust Accounts" shall have the meaning set forth in Section 2(c) of the
Administration Agreement.

"Trust Account Property" shall mean the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Fund and the Revenue Fund and
all proceeds of the foregoing.

"Trust Agreement" shall mean the Trust Agreement dated as of May 9, 2002 among
the Depositor, the Owner Trustee and the Co-Owner Trustee, as amended and
restated in its entirety

                                       17

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by the Amended and Restated Trust Agreement dated as of May 9, 2002 among the
Depositor, the Owner Trustee and the Co-Owner Trustee, and acknowledged and
agreed to by the Trust Eligible Lender Trustee, as the same may be further
amended from time to time.

"Trust Certificate" means a certificate evidencing the Ownership Percentage of
an Owner in substantially the form as Exhibit A to the Trust Agreement.

"Trust Eligible Lender Trustee" shall mean Fifth Third Bank, a banking
corporation organized under the laws of the State of Ohio, not in its individual
capacity but solely as Trust Eligible Lender Trustee under the Co-Owner Eligible
Lender Trust Agreement.

"Trust Estate" shall mean all right, title and interest of the Trust (or the
Co-Owner Trustee or Trust Eligible Lender Trustee on behalf of the Trust) in and
to the property and rights assigned to the Trust pursuant to Article I of the
Depositor Transfer and Sale Agreement, all funds on deposit from time to time in
the Trust Accounts and all other property of the Trust from time to time,
including any rights of the Trust pursuant to the Depositor Transfer and Sale
Agreement, the Servicing Agreement and the Administration Agreement.

"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.

"UCC" shall mean, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.

"Value" on any calculation date when required under the Indenture shall mean the
value of the Trust Estate calculated by the Issuer as to (a) below and by the
Indenture Trustee as to (b) through (e), inclusive, below, as follows:

     (a)  with respect to any Student Loan, the unpaid principal amount thereof,
          accrued but unpaid interest, Interest Benefit Payments and Special
          Allowance Payments, if applicable, less the unguaranteed portion of
          Student Loans in claims status;

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

     (c)  with respect to any Eligible Investments of an investment company, the
          bid price of the shares as reported by the investment company plus
          accrued but unpaid interest;

     (d)  as to investments the bid and asked prices of which are published on a
          regular basis in The Wall Street Journal (or, if not there, then in
          The New York Times), the average of the bid and asked prices for such
          investments so published on or most recently prior to such time of
          determination; and

     (e)  as to investments the bid and asked prices of which are not published
          on a regular basis in The Wall Street Journal or The New York Times:
          (i) the lower of the bid

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          prices at such time of determination for such investments by any two
          nationally recognized government securities dealers (selected by the
          Issuer in its absolute discretion) at the time making a market in such
          investments or (ii) the bid price published by a nationally recognized
          pricing service.

                                       19

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