Document:

<PAGE>

                                                                     Exhibit 4.3

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                                    INDENTURE

                                      among

                          SLM STUDENT LOAN TRUST 2002-5
                                 as the Issuer,

                 CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
                       not in its individual capacity but
                      solely as the Eligible Lender Trustee

                                       and

                              THE BANK OF NEW YORK,
                       not in its individual capacity but
                         solely as the Indenture Trustee

                           Dated as of August 1, 2002

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

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                                       ii

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
                                                                                         Page
         <S>                                                                             <C>
                                    ARTICLE I

                              Definitions and Usage

         SECTION 1.1    Definitions and Usage.........................................    3
         SECTION 1.2    Incorporation by Reference of Trust Indenture Act.............    3

                                   ARTICLE II

                                    The Notes

         SECTION 2.1    Form..........................................................     4
         SECTION 2.2    Execution, Authentication and Delivery........................     4
         SECTION 2.3    Temporary Notes...............................................     5
         SECTION 2.4    Registration; Registration of Transfer and Exchange...........     5
         SECTION 2.5    Mutilated, Destroyed, Lost or Stolen Notes....................     7
         SECTION 2.6    Persons Deemed Owner..........................................     8
         SECTION 2.7    Payment of Principal and Interest; Note Interest
                        Shortfall.....................................................     8
         SECTION 2.8    Cancellation..................................................    10
         SECTION 2.9    Release of Collateral.........................................    10
         SECTION 2.10   Book-Entry Notes..............................................    10
         SECTION 2.11   Notices to Clearing Agency....................................    11
         SECTION 2.12   Definitive Notes..............................................    11

                                   ARTICLE III

                                    Covenants

         SECTION 3.1    Payment to Noteholders........................................    12
         SECTION 3.2    Maintenance of Office or Agency...............................    12
         SECTION 3.3    Money for Payments To Be Held in Trust........................    13
</TABLE>

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                                       iii

<TABLE>
         <S>                                                                                <C>
         SECTION 3.4    Existence.........................................................  15
         SECTION 3.5    Protection of Indenture Trust Estate..............................  15
         SECTION 3.6    Opinions as to Indenture Trust Estate.............................  16
         SECTION 3.7    Performance of Obligations; Servicing of Trust Student
                        Loans.............................................................  16
         SECTION 3.8    Negative Covenants................................................  20
         SECTION 3.9    Annual Statement as to Compliance.................................  20
         SECTION 3.10   Issuer May Consolidate, etc., Only on Certain Terms...............  21
         SECTION 3.11   Successor or Transferee...........................................  23
         SECTION 3.12   No Other Business.................................................  23
         SECTION 3.13   No Borrowing......................................................  23
         SECTION 3.14   Obligations of Servicer and Administrator.........................  24
         SECTION 3.15   Guarantees, Loans, Advances and Other Liabilities.................  24
         SECTION 3.16   Capital Expenditures..............................................  24
         SECTION 3.17   Restricted Payments...............................................  24
         SECTION 3.18   Notice of Events of Default.......................................  24
         SECTION 3.19   Further Instruments and Acts......................................  25

                                       ARTICLE IV

                        Satisfaction and Discharge

         SECTION 4.1    Satisfaction and Discharge of Indenture...........................  25
         SECTION 4.2    Application of Trust Money........................................  26
         SECTION 4.3    Repayment of Moneys Held by Paying Agent..........................  27
         SECTION 4.4    Auction of Trust Student Loans....................................  27

                                       ARTICLE IV

                                        Remedies

         SECTION 5.1    Events of Default.................................................  28
         SECTION 5.2    Acceleration of Maturity; Rescission and Annulment................  29
         SECTION 5.3    Collection of Indebtedness and Suits for Enforcement
                        by Indenture Trustee..............................................  30
         SECTION 5.4    Remedies; Priorities..............................................  33
</TABLE>

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                                       iv

<TABLE>
         <S>                                                                             <C>
         SECTION 5.5    Optional Preservation of the Trust Student Loans..............   35
         SECTION 5.6    Limitation of Suits...........................................   36
         SECTION 5.7    Unconditional Rights of Noteholders To Receive
                        Principal and Interest........................................   37
         SECTION 5.8    Restoration of Rights and Remedies............................   37
         SECTION 5.9    Rights and Remedies Cumulative................................   37
         SECTION 5.10   Delay or Omission Not a Waiver................................   38
         SECTION 5.11   Control by Noteholders........................................   38
         SECTION 5.12   Waiver of Past Defaults.......................................   38
         SECTION 5.13   Undertaking for Costs.........................................   39
         SECTION 5.14   Waiver of Stay or Extension Laws..............................   39
         SECTION 5.15   Action on Notes...............................................   40
         SECTION 5.16   Performance and Enforcement of Certain Obligations............   40

                                   ARTICLE VI

                              The Indenture Trustee

         SECTION 6.1    Duties of Indenture Trustee...................................   41
         SECTION 6.2    Rights of Indenture Trustee...................................   43
         SECTION 6.3    Individual Rights of Indenture Trustee........................   44
         SECTION 6.4    Indenture Trustee's Disclaimer................................   44
         SECTION 6.5    Notice of Defaults; Seller Insolvency.........................   44
         SECTION 6.6    Reports by Indenture Trustee to Noteholders...................   45
         SECTION 6.7    Compensation and Indemnity....................................   45
         SECTION 6.8    Replacement of Indenture Trustee..............................   46
         SECTION 6.9    Successor Indenture Trustee by Merger.........................   47
         SECTION 6.10   Appointment of Co-Trustee or Separate Trustee.................   48
         SECTION 6.11   Eligibility; Disqualification.................................   49
         SECTION 6.12   Preferential Collection of Claims Against Issuer..............   49
</TABLE>

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                                       v

                                  ARTICLE VII

                         Noteholders' Lists and Reports

<TABLE>
         <S>                                                                       <C>
         SECTION 7.1    Issuer To Furnish Indenture Trustee Names and
                        Addresses of Noteholders................................   50
         SECTION 7.2    Preservation of Information; Communications to
                        Noteholders.............................................   50
         SECTION 7.3    Reports by Issuer.......................................   51

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

         SECTION 8.1    Collection of Money.....................................   52
         SECTION 8.2    Trust Accounts..........................................   52
         SECTION 8.3    General Provisions Regarding Accounts...................   54
         SECTION 8.4    Release of Indenture Trust Estate.......................   55
         SECTION 8.5    Opinion of Counsel......................................   56

                                   ARTICLE IX

                             Supplemental Indentures

         SECTION 9.1    Supplemental Indentures Without Consent of
                        Noteholders.............................................   56
         SECTION 9.2    Supplemental Indentures with Consent of
                        Noteholders.............................................   58
         SECTION 9.3    Execution of Supplemental Indentures....................   60
         SECTION 9.4    Effect of Supplemental Indenture........................   60
         SECTION 9.5    Conformity with Trust Indenture Act.....................   60
         SECTION 9.6    Reference in Notes to Supplemental Indentures...........   60
</TABLE>

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                                       vi

                                    ARTICLE X

                               Redemption of Notes

<TABLE>
<S>                                                                                       <C>
         SECTION 10.1   Redemption....................................................    61
         SECTION 10.2   Form of Redemption Notice.....................................    61
         SECTION 10.3   Notes Payable on Redemption Date..............................    62

                                   ARTICLE XI

                                  Miscellaneous

         SECTION 11.1   Compliance Certificates and Opinions, etc.....................    62
         SECTION 11.2   Form of Documents Delivered to Indenture Trustee..............    64
         SECTION 11.3   Acts of Noteholders...........................................    66
         SECTION 11.4   Notices, etc., to Indenture Trustee, Issuer and Rating
                        Agencies......................................................    66
         SECTION 11.5   Notices to Noteholders; Waiver................................    67
         SECTION 11.6   Alternate Payment and Notice Provisions.......................    68
         SECTION 11.7   Conflict with Trust Indenture Act.............................    68
         SECTION 11.8   Effect of Headings and Table of Contents......................    69
         SECTION 11.9   Successors and Assigns........................................    69
         SECTION 11.10  Separability..................................................    69
         SECTION 11.11  Benefits of Indenture.........................................    69
         SECTION 11.12  Legal Holidays................................................    69
         SECTION 11.13  Governing Law.................................................    69
         SECTION 11.14  Counterparts..................................................    69
         SECTION 11.15  Recording of Indenture........................................    70
         SECTION 11.16  Trust Obligations.............................................    70
         SECTION 11.17  No Petition...................................................    70
         SECTION 11.18  Inspection....................................................    71
</TABLE>

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                                      vii

                       APPENDICES, SCHEDULES AND EXHIBITS

   APPENDIX A        Definitions and Usage

   SCHEDULE A        Schedule of Trust Student Loans
   SCHEDULE B        Location of Trust Student Loan Files

   EXHIBIT A         Forms of Notes
   EXHIBIT B         Form of Note Depository Agreement

<PAGE>

                                       1

               INDENTURE dated as of August 1, 2002, among SLM STUDENT LOAN
TRUST 2002-5, a Delaware business trust (the "Issuer"), CHASE MANHATTAN BANK
USA, NATIONAL ASSOCIATION, a Delaware banking corporation, not in its individual
capacity but solely as trustee on behalf of the Issuer (the "Eligible Lender
Trustee"), and THE BANK OF NEW YORK, a New York banking corporation, as
indenture trustee and not in its individual capacity (the "Indenture Trustee").

               Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the holders of the Issuer's Floating
Rate Student Loan-Backed Notes (the "Notes"):

                                 GRANTING CLAUSE

               The Issuer and, with respect to the Trust Student Loans, the
Eligible Lender Trustee hereby Grant to the Indenture Trustee, as trustee for
the benefit of the Noteholders, effective as of the Closing Date all of their
right, title and interest in and to the following:

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

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

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

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

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                                       2

     (e) the Administration Agreement;

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

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

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

               The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.

               The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.

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                                        3

                                    ARTICLE I

                              Definitions and Usage

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

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

               "Commission" means the Securities and Exchange Commission.

               "indenture securities" means the Notes.

               "indenture security holder" means a Noteholder.

               "indenture to be qualified" means this Indenture.

               "indenture trustee" or "institutional trustee" means the
Indenture Trustee.

               "obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.

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

<PAGE>

                                       4

                                   Article II

                                    The Notes

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

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

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

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

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

               The Indenture Trustee shall upon Issuer Order authenticate and
deliver Notes for original issue in an aggregate principal amount of
$1,339,000,000. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount except as provided in Section 2.5.

<PAGE>

                                       5

               Each Note shall be dated the date of its authentication. The
Class A Notes shall be issuable as registered Class A Notes in the minimum
denomination of $1,000 and in integral multiples of $1,000 in excess thereof.
The Class B Notes shall be issuable as registered Class B Notes in the minimum
denomination of $100,000 and in integral multiples of $1,000 in excess thereof.

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

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

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

               SECTION 2.4 Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes

<PAGE>

                                        6

as herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.

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

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

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

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

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

<PAGE>

                                       7

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

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

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

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

<PAGE>

                                       8

any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.

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

               Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

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

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

               SECTION 2.7 Payment of Principal and Interest; Note Interest
Shortfall. (a) The Notes shall accrue interest as provided in the forms of Notes
set forth in Exhibit A, and such interest shall be payable on each Distribution
Date as specified therein, subject to Section 3.1. Any installment of interest
or principal, if any, payable on any Note which is punctually paid or duly
provided for by the Issuer on the applicable Distribution Date shall be paid to
the Person in whose

<PAGE>

                                       9

name such Note (or one or more Predecessor Notes) is registered on the Record
Date by check mailed first-class, postage prepaid to such Person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to Section 2.12, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Distribution Date or on the Note Final Maturity Date for such
Note which shall be payable as provided below. The funds represented by any such
checks returned undelivered shall be held in accordance with Section 3.3.

     (b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of Note set forth in Exhibit A.
Notwithstanding the foregoing, the entire unpaid principal amount of each class
of the Notes shall be due and payable, if not previously paid, on the Note Final
Maturity Date for such class of Notes and on the date on which an Event of
Default shall have occurred and be continuing if the Indenture Trustee or the
Noteholders of the Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. All principal payments on the
Notes shall be made pro rata to the Noteholders entitled thereto, subject,
however, to the last paragraph of Section 2.7C of the Administration Agreement.
The Indenture Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the final installment of principal of and interest
on such Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such Installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

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

<PAGE>

                                       10

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

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

               SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner shall receive a Definitive Note (as
defined below) representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:

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

               (ii)   the Note Registrar and the Indenture Trustee, and their
respective directors, officers, employees and agents, may deal with the Clearing
Agency for all

<PAGE>

                                       11

purposes (including the payment of principal of and interest and other amounts
on the Notes) as the authorized representative of the Note Owners;

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

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

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

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

                  SECTION 2.12 Definitive Notes. If (i) the Administrator
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to discharge its responsibilities with respect to the Notes, and
the Administrator is unable to locate a successor, (ii) the Administrator at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, a Servicer Default or an Administrator Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the

<PAGE>

                                       12

Clearing Agency (which shall then notify the Indenture Trustee) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Note Owners, then the Indenture Trustee shall cause
the Clearing Agency to notify all Note Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive Notes to
Note Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the holders of the Definitive Notes as Noteholders.

                                   ARTICLE III

                                    Covenants

               SECTION 3.1 Payment to Noteholders. The Issuer shall duly and
punctually pay the principal and interest, if any, with respect to the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.2(c), the Issuer shall cause to be distributed
to Noteholders in accordance with the Administration Agreement that portion of
the amounts on deposit in the Trust Accounts on a Distribution Date (other than
any Eligible Investments deposited therein that will mature on the Business Day
preceding a subsequent Distribution Date) which the Noteholders are entitled to
receive pursuant to the Administration Agreement. Amounts properly withheld
under the Code by any Person from a payment to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.

               SECTION 3.2 Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to

<PAGE>

                                       13

the Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.

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

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

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

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

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

<PAGE>

                                       14

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

               (iv)      immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and

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

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

               Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request or if the Issuer has been terminated
to Seller; and the Noteholder thereof shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then

<PAGE>

                                       15

remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt
and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including mailing notice of such repayment to
Noteholders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Noteholder).

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

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

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

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

               (iii) enforce any of the Collateral; or

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

<PAGE>

                                       16

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

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

     (b)  On or before December 31 in each calendar year, beginning in
2002, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture and any indentures supplemental hereto as is necessary to maintain the
lien and security interest created by this Indenture and relating the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, recording and refiling of this
Indenture and any indentures supplemental hereto that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until December 31 in the following calendar year.

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

     (b)  The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officers' Certificate of the Issuer
shall be deemed to be action taken by the Issuer; provided, however, the Issuer
shall not be

<PAGE>

                                       17

liable for any acts of Persons with whom the Issuer has contracted with
reasonable care. Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture. The Issuer shall give written notice to the Indenture Trustee and
each Rating Agency of any such contract with any other Person.

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

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

     (e)  As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers, pursuant to Section 5.1 of
the Servicing Agreement, or to the Administrator of the Administrator's rights
and powers, pursuant to Section 5.1 of the Administration Agreement, the Issuer
shall appoint a successor servicer (the "Successor Servicer") or a successor
administrator (the "Successor Administrator"), respectively, and such Successor
Servicer or Successor Adminis-

<PAGE>

                                       18

trator, as the case may be, shall accept its appointment by a written assumption
in a form acceptable to the Indenture Trustee. In the event that a Successor
Servicer or Successor Administrator has not been appointed and accepted its
appointment at the time when the Servicer or Administrator, as the case may be,
ceases to act as Servicer or Administrator, respectively, the Indenture Trustee
without further action shall automatically be appointed the Successor Servicer
or Successor Administrator, as the case may be. The Indenture Trustee may resign
as the Servicer or the Administrator by giving written notice of resignation to
the Issuer and in such event will be released from such duties and obligations,
such release not to be effective until the date a new servicer or a new
administrator enters into an agreement with the Issuer as provided below;
provided, however, that nothing herein shall require or permit the Indenture
Trustee to act as Servicer, or otherwise service the Trust Student Loans, in
violation of the Higher Education Act. Upon delivery of any such notice to the
Issuer, the Issuer shall obtain a new servicer as the Successor Servicer under
the Servicing Agreement or a new administrator as the Successor Administrator
under the Administration Agreement, as the case may be. Any Successor Servicer
or Successor Administrator, other than the Indenture Trustee, shall (i) be an
established institution (A) that satisfies any requirements of the Higher
Education Act applicable to servicers and (B) whose regular business includes
the servicing or administration of student loans and (ii) enter into a servicing
agreement or an administration agreement, respectively, with the Issuer having
substantially the same provisions as the provisions of the Servicing Agreement
and the Administration Agreement, as applicable. If within 30 days after the
delivery of the notice referred to above, the Issuer shall not have obtained
such a new servicer or new administrator, as the case may be, the Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a Successor Servicer or Successor Administrator; provided, however,
that such right to appoint or to petition for the appointment of any such
successor shall in no event relieve the Indenture Trustee from any obligations
otherwise imposed on it under the Basic Documents until such successor has in
fact assumed such appointment. In connection with any such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor as it and such successor shall agree, subject to the limitations set
forth below and in the Servicing Agreement or Administration Agreement, as
applicable, and in accordance with Section 5.2 of the Servicing Agreement and
Section 5.2 of the Administration Agreement, the Issuer shall enter into an
agreement with such successor for the servicing or administration of the Trust
Student Loans (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed as provided herein to

<PAGE>

                                       19

the Servicer's duties as Servicer with respect to the Trust Student Loans, or
the Administrator's duties with respect to the Issuer and the Trust Student
Loans, as the case may be, it shall do so in its individual capacity and not in
its capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer or the Administrator, as the case may be, and the
servicing or administration of the Trust Student Loans. In case the Indenture
Trustee shall become successor to the Servicer or the Administrator, the
Indenture Trustee shall be entitled to appoint as Servicer or as Administrator,
as the case may be, any one of its Affiliates, provided that such appointment
shall not affect or alter in any way the liability of the Indenture Trustee as
Successor Servicer or Successor Administrator, respectively, in accordance with
the terms hereof.

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

     (g)  Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Noteholders of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral or the Basic
Documents, except to the extent otherwise provided in the Basic Documents, or
waive timely performance or observance by the Servicer, the Administrator, the
Seller, the Student Loan Marketing Association, the Issuer or the Eligible
Lender Trustee under the Basic Documents; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders, or (ii) reduce the aforesaid percentage of
the Notes which are required to consent to any such amendment, without the
consent of the Noteholders of all the Outstanding Notes. If any such amendment,
modification, supplement or waiver shall

<PAGE>

                                       20

be so consented to by the Indenture Trustee or such Noteholders, the Issuer
shall give written notice thereof to each Rating Agency and agrees, promptly
following a request by the Indenture Trustee to do so, to execute and deliver,
in its own name and at its own expense, such agreements, instruments, consents
and other documents as the Indenture Trustee may deem necessary or appropriate
in the circumstances.

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

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

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

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

               SECTION 3.9 Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and each Rating Agency, within 120 days after
the end of each fiscal year of the Issuer (commencing with the fiscal year
ending December 31, 2002), an Officers' Certificate of the Issuer stating that:

<PAGE>

                                       21

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

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

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

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

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

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

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

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

<PAGE>

                                       22

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

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

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

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

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

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

<PAGE>

                                       23

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

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

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

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

            (b)   Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10(b), SLM Student Loan Trust 2002-5 will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery by the Issuer of written notice to the Indenture Trustee stating
that SLM Student Loan Trust 2002-5 is to be so released.

                  SECTION 3.12 No Other Business. The Issuer shall not engage in
any business other than financing, purchasing, owning, selling and managing the
Trust Student Loans in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto.

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

<PAGE>

                                       24

                  SECTION 3.14 Obligations of Servicer and Administrator. The
Issuer shall cause the Servicer to comply with Sections 3.1, 3.2 and 3.3 of the
Administration Agreement and Section 3.7 of the Servicing Agreement and the
Administrator to comply with Sections 2.9, 3.1, 3.2 and 3.3 of the
Administration Agreement.

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

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

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

                  SECTION 3.18 Notice of Events of Default. The Issuer shall
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and each default on the part of the Seller of its
obligations under

<PAGE>

                                       25

the Sale Agreement, the Student Loan Marketing Association of its obligations
under the Purchase Agreement, the Servicer of its obligations under the
Servicing Agreement, or the Administrator of its obligations under the
Administration Agreement. In addition, the Issuer shall deliver to the Indenture
Trustee and each Rating Agency, within five days after the occurrence thereof,
written notice in the form of an Officers' Certificate of the Issuer of any
event which with the giving of notice and the lapse of time would become an
Event of Default under Section 5.1(iii), its status and what action the Issuer
is taking or proposes to take with respect thereto.

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

                                   ARTICLE IV

                           Satisfaction and Discharge

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

                  (a)      either

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

<PAGE>

                                       26

repaid to the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or

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

                            (i)   have become due and payable,

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

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

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

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

                SECTION 4.2 Application of Trust Money. All moneys deposited
with the Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums

<PAGE>

                                       27

due and to become due thereon for principal and interest; but such moneys need
not be segregated from other funds except to the extent required herein or in
the Administration Agreement or required by law.

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

                  SECTION 4.4 Auction of Trust Student Loans. Any Trust Student
Loans remaining in the Trust as of the end of the Collection Period immediately
preceding the earliest Distribution Date on which the Pool Balance is equal to
10% or less of the initial Pool Balance three business days prior to such
Distribution Date (the "Trust Auction Date") shall be offered for sale by the
Indenture Trustee unless the Seller has exercised its option to purchase the
Trust Estate as described in Section 6.1A of the Administration Agreement with
respect to such Distribution Date. The Seller will be deemed to have waived such
option if it fails to notify the Eligible Lender Trustee and the Indenture
Trustee of its exercise thereof in writing prior to the Indenture Trustee's
acceptance of a bid to purchase such Trust Student Loans; provided, however,
that there shall be no such offer for sale if the Indenture Trustee fails to
provide notice to the Seller in accordance with this Section 4.4. The Indenture
Trustee shall provide written notice to the Seller of any such offer for sale at
least 5 business days in advance of the Trust Auction Date. The Indenture
Trustee shall permit the Seller or any of its Affiliates to offer bids only if
the Pool Balance as of the applicable Trust Auction Date is equal to 10% or less
of the Initial Pool Balance and such bid does not exceed the fair market value
of the Trust Student Loans as of the Trust Auction Date. If at least two bids
are received, the Indenture Trustee shall solicit and resolicit new bids from
all participating bidders until only one bid remains or the remaining bidders
decline to resubmit bids. The Indenture Trustee shall accept the highest of such
remaining bids if it is equal to or in excess of both the Minimum Purchase
Amount and the fair market value of such Trust Student Loans as of the end of
the Collection Period immediately preceding the Trust Auction Date. If at least
two bids are not received or the highest bid after the resolicitation process is
completed is not equal to or in excess of the higher of the Minimum Purchase

<PAGE>

                                       28

Amount and the fair market value of the Trust Student Loans, the Indenture
Trustee shall not consummate such sale. The Indenture Trustee may consult, and,
at the direction of the Seller, shall consult, with a financial advisor,
including an underwriter of the Notes or the Administrator, to determine if the
fair market value of the Trust Student Loans has been offered. The proceeds of
any such sale will be applied in the order of priority set forth in Section 5.4
(b). If the sale is not consummated in accordance with the foregoing, the
Indenture Trustee may, but shall not be under any obligation to, solicit bids
for sale of the Trust Student Loans with respect to future Distribution Dates
upon terms similar to those described above, including the Seller's waiver of
its option to purchase the Trust Estate in accordance with Section 6.1A of the
Administration Agreement with respect to each such future Distribution Date.

                                    ARTICLE V

                                    Remedies

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

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

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

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

<PAGE>

                                       29

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

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

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

          SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Noteholders of Notes representing not less than a
majority of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable, subject, however, to the last paragraph of Section 2.7C of the
Administration Agreement and to Section 5.4 of this Indenture.

<PAGE>

                                       30

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

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

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

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

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

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

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

<PAGE>

                                       31

collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.

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

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

     (c)  In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other, comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable, as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:

          (i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file such
other

<PAGE>

                                       32

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

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

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

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

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

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

<PAGE>

                                       33

proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.

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

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

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

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

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

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

<PAGE>

                                       34

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

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

provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii) with respect to the
Class A Notes, unless (A) the Noteholders of 100% of the Outstanding Amount of
the Class A Notes consent thereto, (B) the proceeds of such sale or liquidation
distributable to the Class A Noteholders are sufficient to discharge in full all
amounts then due and unpaid upon such Class A Notes for principal and interest
or (C) the Indenture Trustee determines that the Indenture Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Class A Notes as they would have become due if the Class A Notes
had not been declared due and payable, and the Indenture Trustee obtains the
consent of Noteholders of 66-2/3% of the Outstanding Amount of the Class A
Notes; provided, further, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii) with respect to the
Class A Notes, unless (D) the proceeds of such sale or liquidation distributable
to the Class B Noteholders plus the proceeds of the sale or liquidation of the
Trust Estate distributable to the Class B Noteholders are sufficient to pay to
the Class B Noteholders the outstanding principal plus accrued and unpaid
interest thereon or (E) after receipt of notice from the Eligible Lender Trustee
that the proceeds of such sale or liquidation distributable to the Class B
Noteholders plus the proceeds of the sale or liquidation of the Trust Estate
distributable to the Class B Noteholders would not be sufficient to pay to the
Class B Noteholders the outstanding principal plus accrued and unpaid interest
thereon, the Class B Noteholders of at least a majority of the principal amount
of the Class B Notes consent thereto. In determining such sufficiency or
insufficiency with respect to clauses (B), (C), (D) and (E), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Indenture
Trust Estate and/or Trust Estate, as applicable, for such purpose.

<PAGE>

                                       35

     (b)  If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:

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

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

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

          FOURTH: to Class A Noteholders for amounts due and unpaid on the Class
A Notes for principal, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal;

          FIFTH: to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest;

          SIXTH: to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for principal, ratably without preference or priority of any kind,
according to the amounts due and payable on the Class B Notes for principal;

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

          EIGHTH: to the Issuer, for distribution in accordance with the terms
of the Administration Agreement and the Trust Agreement.

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

          SECTION 5.5 Optional Preservation of the Trust Student Loans. If the
Notes have been declared to be due and payable under Section 5.2 following an
Event of Default and such declaration and its consequences have not been
rescinded

<PAGE>

                                       36

and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Indenture Trust Estate. It is the desire of the parties hereto
and the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Indenture Trust Estate. In determining whether to maintain possession of
the Indenture Trust Estate, the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.

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

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

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

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

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

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

          it being understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of

<PAGE>

                                       37

this indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.

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

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

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

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

<PAGE>

                                       38

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

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

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

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

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

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

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

          SECTION 5.12 Waiver of Past Defaults. Prior to the time a judgment or
decree for payment of money due has been obtained as described in Section 5.2,
the

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                                       39

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

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

          SECTION 5.13 Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance of any Note shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit Instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).

          SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of

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                                       40

any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

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

          SECTION 5.16 Performance and Enforcement of Certain Obligations.

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

     (b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the written direction of the Noteholders of 66-2/3% of the

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                                       41

Outstanding Amount of the Notes shall, exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Seller, the Student Loan
Marketing Association, the Administrator or the Servicer under or in connection
with the Sale Agreement, the Purchase Agreement, the Administration Agreement
and the Servicing Agreement, respectively, including the right or power to take
any action to compel or secure performance or observance by the Seller, the
Student Loan Marketing Association, the Administrator or the Servicer of each of
their obligations to the Issuer thereunder, whether directly or by assignment,
and to give any consent, request, notice, direction, approval, extension or
waiver under the Sale Agreement, the Purchase Agreement, the Administration
Agreement and the Servicing Agreement, respectively, and any right of the Issuer
to take such action shall be suspended.

                                   ARTICLE VI

                             The Indenture Trustee

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

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

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

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

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                                       42

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

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

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

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

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

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

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

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

     (h)  In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this

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                                       43

Indenture shall also be afforded to the Indenture Trustee in its capacity as
Paying Agent or Note Registrar.

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

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

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

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

         (d)      The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.

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

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                                       44

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

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

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

         (b)      If the Indenture Trustee receives notice from the Eligible
Lender Trustee of the occurrence of an Insolvency Event with respect to the
Seller pursuant to Section 9.2 of the Trust Agreement, the Indenture Trustee
shall give prompt written notice to the Noteholders of the occurrence of such
event and of the effect of such event under such Section 9.2. Upon termination
of the Trust pursuant to such Section 9.2, the Indenture Trustee shall, if so
directed by the Eligible Lender Trustee, sell the Trust Estate (other than the
Trust Accounts) in a commercially reasonable manner and on commercially
reasonable terms. The proceeds of any such sale shall be treated as collections
under the Administration Agreement.

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                                       45

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

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

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                                       46

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

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

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

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

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

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

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

               A successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a

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                                       47

notice of its succession to Noteholders. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.

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

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

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

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

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

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                                       48

           SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.

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

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

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

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

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                                       49

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

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

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

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

                  SECTION 6.12 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship

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                                       50

listed in TIA (S) 311(b). An Indenture Trustee who has resigned or been removed
shall be subject to TIA (S) 311(a) to the extent indicated.

                                   ARTICLE VII

                         Noteholders' Lists and Reports

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

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

     (a)  Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more holders of Notes evidencing not less than 25% of
the Outstanding Amount of the Notes to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA (S) 312(b)), the Indenture
Trustee shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.

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

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                                       51

          (c)  On each Distribution Date the Indenture Trustee shall provide to
each Noteholder of record as of the related Record Date the information provided
by the Administrator to the Indenture Trustee on the related Determination Date
pursuant to Section 2.9 of the Administration Agreement.

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

               SECTION 7.3 Reports by Issuer. (a) The Issuer shall:

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

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

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

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

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                                       52

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

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

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

          (b)  On or before the Business Day preceding each Distribution Date,
all Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 2.4 of the
Administration Agreement. On or before each Distribution Date, the Noteholders'
Distribution Amount with respect to the preceding Collection Period will be
distributed from the Collection Account and any other Trust Account to the
Indenture Trustee (or any other Paying Agent) on behalf of the Noteholders as
provided in Sections 2.7, 2.8.1 and 2.8.2 of the Administration Agreement.

          (c)  On each Distribution Date and Redemption Date, the Indenture
Trustee (or any other Paying Agent) shall distribute all amounts received by it
on behalf of Noteholders pursuant to paragraph (b) above to Noteholders in
respect of the Notes to

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                                       53

the extent of amounts payable on the Notes for principal and interest in the
following amounts and in the following order of priority (except as otherwise
provided in Section 5.2 or Section 5.4(b)):

               (i)   the Class A Noteholders' Interest Distribution Amount, to
the Class A Noteholders in an amount equal to the accrued and unpaid interest on
the Notes at the respective Class A Note Rates; provided that if there are not
sufficient funds received to pay the entire amount of accrued and unpaid
interest then due on the Class A Notes at the respective Class A Note Rates, the
amounts so received shall be applied to the payment of such interest on the
Class A Notes on a pro rata basis;

               (ii)  the Class B Noteholders' Interest Distribution Amount, to
the Class B Noteholders in an amount equal to the accrued and unpaid interest on
the Notes at the Class B Note Rate; provided that if there are not sufficient
funds received to pay the entire amount of accrued and unpaid interest then due
on the Class B Notes at the Class B Note Rate, the amounts so received shall be
applied to the payment of such interest on the Class B Notes on a pro rata
basis;

               (iii) the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-1 Notes until the Outstanding Amount of the Class A-1
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-1 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-1 Notes on
a pro rata basis; and

               (iv)  the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-2 Notes until the Outstanding Amount of the Class A-2
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-2 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-2 Notes on
a pro rata basis; and

               (v)   Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-3 Notes until the Outstanding Amount of the Class A-3
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-3 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-3 Notes on
a pro rata basis; and

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                                       54

               (vi)  the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-4 Notes until the Outstanding Amount of the Class A-4
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-4 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-4 Notes on
a pro rata basis; and

               (vii) the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class B Notes until the Outstanding Amount of the Class B
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class B Notes, the amounts so
received shall be applied to the payment of principal on the Class B Notes on a
pro rata basis

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

          (b)  Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable for the selection of Eligible Investments or by reason of
any insufficiency in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Indenture Trustee's failure to make payments on such Eligible Investments issued
by the Indenture Trustee, in its

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                                       55

commercial capacity as principal obligor and not as trustee, in accordance with
their terms.

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

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

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

          (c)  Each Noteholder, by the acceptance of a Note, acknowledges that
from time to time the Indenture Trustee shall release the lien of this Indenture
on any

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                                       56

Trust Student Loan to be sold to (i) the Seller in accordance with Section 6 of
the Sale Agreement, (ii) to the Servicer in accordance with Section 3.5 of the
Servicing Agreement and (iii) to another eligible lender holding one or more
Serial Loans with respect to such Trust Student Loan, in accordance with Section
3.11E of the Servicing Agreement, and each Noteholder, by the acceptance of a
Note, consents to any such release.

               SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(c), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Indenture Trust Estate. Counsel rendering
any such opinion may rely, without independent investigation, on the accuracy
and validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.

                                   ARTICLE IX

                            Supplemental Indentures

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

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

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                                       57

Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;

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

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

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

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

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

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

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

         (b)   The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice

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                                       58

to the Rating Agencies, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Noteholders under this Indenture; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Noteholder.

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

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

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

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                                       59

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

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

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

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

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

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

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

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                                       60

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

         SECTION 9.4  Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

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

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

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                                       61

                                    ARTICLE X

                               Redemption of Notes

         SECTION 10.1 Redemption. The Indenture Trustee shall, upon receipt of
written notice from the Eligible Lender Trustee or the Depositor pursuant to
Section 9.2 of the Trust Agreement of an Insolvency Event with respect to the
Depositor, give prompt written notice to the Noteholders of the occurrence of
such event. In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, that portion of the amounts on deposit in
the Trust Accounts to be distributed to the Noteholders shall be paid to the
Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid
interest thereon (but only to the extent provided by Sections 2.7(d) and
8.2(c)). If amounts are to be paid to Noteholders pursuant to this Section 10.1,
the notice of such event from the Indenture Trustee to the Noteholders shall
include notice of the redemption of Notes by application of such amounts on the
next Distribution Date which is not sooner than 15 days after the date of such
notice (the "Redemption Date"), whereupon all such amounts shall be payable on
the Redemption Date.

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

               All notices of redemption shall state:

               (i)    the Redemption Date;

               (ii)   the Redemption Price; and

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

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                                       62

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

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

                                   ARTICLE XI

                                 Miscellaneous

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

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

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

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                                       63

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

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

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

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

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

               (iii)  Other than any property released as contemplated by clause
(v) below, whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officers' Certificate

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                                       64

of the Issuer certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.

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

               (v)    Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of
Trust Student Loans as and to the extent permitted or required by the Basic
Documents, (B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents and (C) convey to the Seller, the
Servicer or another eligible lender those specified Trust Student Loans as and
to the extent permitted or required by and in accordance with Section 8.4(c)
hereof and Section 6 of the Sale Agreement, Section 3.5 of the Servicing
Agreement or Section 3.11E of the Servicing Agreement, respectively, so long as
the Issuer shall deliver to the Indenture Trustee every six months, commencing
December 25, 2002, an Officers' Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.

         SECTION 11.2 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or

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                                       65

covered by the opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an opinion
with respect to some matters, and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.

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

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

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

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                                       66

            SECTION 11.3 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.

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

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

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

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

      (a)   The Indenture Trustee by any Noteholder, the Servicer, the
Administrator or by the Issuer shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with the Indenture Trustee
at its Corporate

<PAGE>

Trust Office with a copy to: The Bank Of New York, 2 LaSalle, Suite 1020,
Chigago, Illinois, 60602, Attn: Corporate Trust - Structured Finance.

      (b)   The Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to: SLM Student Loan Trust 2002-5, in
care of Chase Manhattan Bank USA, National Association, Christiana Center/OPS4,
500 Stanton Christiana Road, Newark, Delaware 19713, Attention: Corporate Trust
Department; with copies to JPMorgan Chase Bank, 450 West 33rd Street 15th Fl.,
New York, New York 10001, Attention: Structured Finance Services; 11600 Sallie
Mae Drive, Reston, VA 20193, Attention: Director, Corporate Finance Operations,
or any other address previously furnished in writing to the Indenture Trustee by
the Issuer or the Administrator. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.

            Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Eligible Lender Trustee shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to
(i) in the case of Moody's, at the following address: ABS Monitoring Department,
99 Church Street, New York, New York 10007, (ii) in the case of Standard &
Poor's, at the following address: 55 Water Street, New York, New York
10041-0003, Attention: Asset Backed Surveillance Department, 32/nd/ Floor, and
(iii) in the case of Fitch, at the following address: One State Street Plaza,
New York, New York 10004, Attention: Municipal Structured Finance Group; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.

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

<PAGE>

                                       68

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

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

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

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

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

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

<PAGE>

                                       69

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

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

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

            SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

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

            SECTION 11.13 Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions (other than (S)5-1401 of the New York General
Obligations Law), and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

            SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an

<PAGE>

                                       70

original, but all such counterparts shall together constitute but one and the
same instrument.

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

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

            SECTION 11.17 No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they shall not at any time institute against the Seller or the
Issuer, or join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other

<PAGE>

                                       71

proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the other Basic Documents. The foregoing shall not limit the rights of the
Indenture Trustee to file any claim in, or otherwise take any action with
respect to, any insolvency proceeding that was instituted against the Issuer by
any Person other than the Indenture Trustee.

      SECTION 11.18 Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information obtained from such examination or inspection except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.

<PAGE>

                                       72

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

                                SLM STUDENT LOAN TRUST 2002-5

                                By: CHASE MANHATTAN BANK USA, NATIONAL
                                    ASSOCIATION, not in its individual capacity
                                    but solely as Eligible Lender Trustee

                                By:  /s/ JOHN J. CASHIN
                                    -----------------------------------
                                Name:    John J. Cashin
                                Title:   Vice President

                                CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
                                not in its individual capacity but solely as
                                Eligible Lender Trustee

                                By:  /s/ JOHN J. CASHIN
                                    -----------------------------------
                                Name:    John J. Cashin
                                Title:   Vice President

                                THE BANK OF NEW YORK,
                                not in its individual capacity but solely
                                as Indenture Trustee

                                By:  /s/ ROBERT D. FOLTZ
                                    -----------------------------------
                                Name:  Robert D. Foltz
                                Title: Agent

<PAGE>

                                       73

                                                                      APPENDIX A
                                                                TO THE INDENTURE

                              Definitions and Usage

<PAGE>

                                       74

                                   SCHEDULE A
                                TO THE INDENTURE

                         Schedule of Trust Student Loans

                       [See Schedule A to the Bill of Sale
                      (Attachment B to the Sale Agreement)]

<PAGE>

                                       75

                                                                      SCHEDULE B
                                                                TO THE INDENTURE

                      Location of Trust Student Loan Files

                  [See Attachment B to the Servicing Agreement]

<PAGE>

                                        1

                                                                     EXHIBIT A-1
                                                                TO THE INDENTURE

                            [FORM OF CLASS A-1 NOTE]

                       SEE REVERSE FOR CERTAIN DEFINITIONS

            Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

            THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.

NUMBER                                               [Note Face Amount]
R-__                                                 CUSIP NO. [CUSIP #]

<PAGE>

                                        2

                       SLM STUDENT LOAN TRUST [Trust Name]

                FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES

            SLM Student Loan Trust [Trust Name], a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is [Note Face Amount] and the denominator
of which is [Total Class A-1 Note Amount] by (ii) the aggregate amount, if any,
payable to Class A-1 Noteholders on such Distribution Date in respect of
principal of the Notes pursuant to Section 3.1 of the Indenture dated as of
[Indenture Date], among the Issuer, Chase Manhattan Bank USA, National
Association, a Delaware banking corporation, as Eligible Lender Trustee on
behalf of the Issuer, and The Bank of New York, a New York banking corporation,
as Indenture Trustee (the "Indenture Trustee") (capitalized terms used but not
defined herein being defined in Appendix A to the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
[Final Class A-1 Distribution Date] (the "Class A-1 Maturity Date").

            The Issuer shall pay interest on this Note at the rate per annum
equal to the Class A-1 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.

<PAGE>

                                        3

            The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

            Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.

            Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

<PAGE>

                                        4

                     IN WITNESS WHEREOF, the Issuer has caused this instrument
to be duly executed, manually or in facsimile, as of the date set forth below.

                                SLM STUDENT LOAN TRUST [Trust Name]

                                By CHASE MANHATTAN BANK USA, NATIONAL
                                      ASSOCIATION, not in its individual
                                      capacity but solely as Eligible Lender
                                      Trustee under the Trust Agreement,

                                      By:_________________________
                                              Authorized Signatory

Date:  [Closing Date]

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                     This is one of the Notes designated above and referred to
in the within-mentioned Indenture.

                                      THE BANK OF NEW YORK,
                                      not in its individual capacity but solely
                                      as Indenture Trustee,

                                      By:_________________________
                                              Authorized Signatory

Date:  [Closing Date]

<PAGE>

                                       5

                                [REVERSE OF NOTE]

                This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-1 Student Loan-Backed Notes (the
"Class A-1 Notes"), which, together with the Issuer's Floating Rate Class A-2
Student Loan-Backed Notes (the "Class A-2 Notes"), Floating Rate Class A-3
Student Loan-Backed Notes (the "Class A-3 Notes"), Floating Rate Class A-4
Student Loan-Backed Notes (the "Class A-4 Notes") and Floating Rate Class B
Student Loan-Backed Notes (the "Class B Notes" and, together with the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the
"Notes"), are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.

                The Class A-1 Notes are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture. The Class A-1 Notes are prior in order of principal payment to the
Class A-2, Class A-3, Class A-4 and Class B Notes and senior to the Class B
Notes as and to the extent provided in the Indenture.

                Principal of the Class A-1 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 15th day of each March, June, September and December or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
[initial Distribution Date].

                As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-1 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-1 Notes shall be made pro rata to the Noteholders entitled thereto.

<PAGE>

                                       6

                Interest on the Class A-1 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-1 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-1 Rate. The "Class A-1 Rate" for each Accrual Period shall be equal
to Three-Month [or such other designated maturity or formula, as necessary, for
the initial Accrual Period] LIBOR as determined on the second Business Day
before the beginning of that Accrual Period plus [specified percentage points]%.

                Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.

                The Issuer shall pay interest on overdue installments of
interest on this Note at the Class A-1 Rate to the extent lawful.

<PAGE>

                                       7

                As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

                Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender Trustee have
no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.

                Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by

<PAGE>

                                       8

accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.

                Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

                The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.

                The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.

                The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

<PAGE>

                                       9

                The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.

                This Note shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.

                No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.

                Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither The Bank of New York, in its
individual capacity, Chase Manhattan Bank USA, National Association in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.

<PAGE>

                                       10

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

________________________________________________________________________________

                FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _

________________________________________________________________________________
                         (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

Dated: _______________________________

                                                                           */
                                  ________________________________________ _
                                                        Signature Guaranteed:

                                                                           */
                                 _________________________________________ _

---------------------
*/      NOTICE: The signature to this assignment must correspond with the name
-
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

<PAGE>

                                       1

                                                                     EXHIBIT A-2
                                                                TO THE INDENTURE

                            [FORM OF CLASS A-2 NOTE]

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

                THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.

NUMBER                                               [Note Face Amount]
R-__                                                 CUSIP NO. [CUSIP #]

<PAGE>

                                       2

                       SLM STUDENT LOAN TRUST [Trust Name]

                FLOATING RATE CLASS A-2 STUDENT LOAN-BACKED NOTES

                SLM Student Loan Trust [Trust Name], a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is [Note Face Amount] and the denominator
of which is $[Total Class A-2 Note Amount] by (ii) the aggregate amount, if any,
payable to Class A-2 Noteholders on such Distribution Date in respect of
principal of the Notes pursuant to Section 3.1 of the Indenture dated as of
[Indenture Date], among the Issuer, Chase Manhattan Bank USA, National
Association, a Delaware banking corporation, as Eligible Lender Trustee on
behalf of the Issuer, and The Bank of New York, , a New York banking
corporation, as Indenture Trustee (the "Indenture Trustee") (capitalized terms
used but not defined herein being defined in Appendix A to the Indenture, which
also contains rules as to usage that shall be applicable herein); provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the [Final Class A-2 Distribution Date] (the "Class A-2 Maturity
Date").

                The Issuer shall pay interest on this Note at the rate per annum
equal to the Class A-2 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.

<PAGE>

                                       3

                The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.

                Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.

                Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.

<PAGE>

                                       4

                IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed, manually or in facsimile, as of the date set forth below.

                             SLM STUDENT LOAN TRUST [Trust Name]

                             By CHASE MANHATTAN BANK USA, NATIONAL
                                    ASSOCIATION, not in its individual
                                    capacity but solely as Eligible
                                    Lender Trustee under the Trust
                                    Agreement,

                                    By: _________________________________
                                                     Authorized Signatory

Date: [Closing Date]

                TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                    THE BANK OF NEW YORK
                                    not in its individual capacity but solely as
                                    Indenture Trustee,

                                    By: _________________________________
                                                     Authorized Signatory

Date: [Closing Date]

<PAGE>

                                       5

                                [REVERSE OF NOTE]

                This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-2 Student Loan-Backed Notes (the
"Class A-2 Notes"), which, together with the Issuer's Floating Rate Class A-1
Student Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-3
Student Loan-Backed Notes (the "Class A-3 Notes"), Floating Rate Class A-4
Student Loan-Backed Notes (the "Class A-4 Notes") and the Issuer's Floating Rate
Class B Student Loan-Backed Notes (the "Class B Notes" and, together with the
Class A-1 Notes , the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.

                The Class A-2 Notes are and will be equally and ratably secured
by the Collateral pledged as security therefor as provided in the Indenture. The
Class A-1 Notes are prior in order of principal payment to the Class A-2 Notes,
and the Class A-2 Notes are senior to the Class A-3 Notes, Class A-4 Notes and
Class B Notes, as and to the extent provided in the Indenture.

                Principal of the Class A-2 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 15th day of each March, June, September and December or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
[initial Distribution Date].

                As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-2 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-2 Notes shall be made pro rata to the Noteholders entitled thereto.

<PAGE>

                                       6

                Interest on the Class A-2 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-2 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-2 Rate. The "Class A-2 Rate" for each Accrual Period shall be equal
to Three-Month [or such other designated maturity or formula, as necessary, for
the initial Accrual Period] LIBOR as determined on the second Business Day
before the beginning of that Accrual Period plus [specified percentage points]%.

                Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.

                The Issuer shall pay interest on overdue installments of
interest on this Note at the Class A-2 Rate to the extent lawful.

<PAGE>

                                       7

                As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

                Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender Trustee have
no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.

                Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by

<PAGE>

                                       8

accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.

                Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

                The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.

                The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.

                The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

<PAGE>

                                       9

                The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.

                This Note shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.

                No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.

                Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither The Bank of New York, in its
individual capacity, Chase Manhattan Bank USA, National Association in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.

<PAGE>

                                       10

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

________________________________________________________________________________

                FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _

________________________________________________________________________________
                         (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

Dated: ____________________________

                                                                              */
                                             --------------------------------- -
                                                           Signature Guaranteed:

                                                                              */
                                             -------------------------------- -

----------------
*/      NOTICE: The signature to this assignment must correspond with the name
-
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

<PAGE>

                                       1

                                                                     EXHIBIT A-3
                                                                TO THE INDENTURE

                            [FORM OF CLASS A-3 NOTE]

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

                THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.

NUMBER                                               [Note Face Amount]
R-__                                                 CUSIP NO. [CUSIP #]

<PAGE>

                                       2

                       SLM STUDENT LOAN TRUST [Trust Name]

                FLOATING RATE CLASS A-3 STUDENT LOAN-BACKED NOTES

                SLM Student Loan Trust [Trust Name], a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is [Note Face Amount] and the denominator
of which is $[Total Class A-3 Note Amount] by (ii) the aggregate amount, if any,
payable to Class A-3 Noteholders on such Distribution Date in respect of
principal of the Notes pursuant to Section 3.1 of the Indenture dated as of
[Indenture Date], among the Issuer, Chase Manhattan Bank USA, National
Association, a Delaware banking corporation, as Eligible Lender Trustee on
behalf of the Issuer, and The Bank of New York, a New York banking corporation,
as Indenture Trustee (the "Indenture Trustee") (capitalized terms used but not
defined herein being defined in Appendix A to the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
[Final Class A-3 Distribution Date] (the "Class A-3 Maturity Date").

                The Issuer shall pay interest on this Note at the rate per annum
equal to the Class A-3 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.

<PAGE>

                                       3

                The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.

                Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.

                Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.

<PAGE>

                                       4

                IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed, manually or in facsimile, as of the date set forth below.

                                    SLM STUDENT LOAN TRUST [Trust Name]

                                    By CHASE MANHATTAN BANK USA, NATIONAL
                                          ASSOCIATION, not in its individual
                                          capacity but solely as Eligible
                                          Lender Trustee under the Trust
                                          Agreement,

                                          By: ____________________________
                                                      Authorized Signatory

Date: [Closing Date]

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                          THE BANK OF NEW YORK,
                                          not in its individual capacity but
                                          solely as Indenture Trustee,

                                          By: ____________________________

      Authorized Signatory

Date: [Closing Date]

<PAGE>

                                       5

                                [REVERSE OF NOTE]

                This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-3 Student Loan-Backed Notes (the
"Class A-3 Notes"), which, together with the Issuer's Floating Rate Class A-1
Student Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2
Student Loan-Backed Notes (the "Class A-2 Notes"), Floating Rate Class A-4
Student Loan-Backed Notes (the "Class A-4 Notes") and the Issuer's Floating Rate
Class B Student Loan-Backed Notes (the "Class B Notes" and, together with the
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.

                The Class A-3 Notes are and will be equally and ratably secured
by the Collateral pledged as security therefor as provided in the Indenture. The
Class A-1 Notes and the Class A-2 Notes are prior in order of principal payment
to the Class A-3 Notes, and the Class A-3 Notes are prior in order of principal
payment to the Class A-4 Notes and are senior to the Class B Notes, as and to
the extent provided in the Indenture.

                Principal of the Class A-3 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 15th day of each March, June, September and December or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
[initial Distribution Date].

                As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-3 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-2 Notes shall be made pro rata to the Noteholders entitled thereto.

<PAGE>

                                        6

               Interest on the Class A-3 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-3 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-3 Rate. The "Class A-3 Rate" for each Accrual Period shall be equal
to Three-Month [or such other designated maturity or formula, as necessary, for
the initial Accrual Period] LIBOR as determined on the second Business Day
before the beginning of that Accrual Period plus [specified percentage points]%.

               Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.

               The Issuer shall pay interest on overdue installments of interest
on this Note at the Class A-3 Rate to the extent lawful.

<PAGE>

                                       7

               As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

               Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender Trustee have
no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.

<PAGE>

                                       8

               Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
by accepting the benefits of the Indenture such Noteholder or Note Owner will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.

               Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

               The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.

               The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.

<PAGE>

                                       9

               The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

               The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.

               This Note shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.

               No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.

               Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither The Bank of New York, in its
individual capacity, Chase Manhattan Bank USA, National Association in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.

<PAGE>

                                       10

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

________________________________________________________________________________

               FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _

________________________________________________________________________________
                         (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated: _____________________________

                                                                              */
                                                       ---------------------- -
                                                           Signature Guaranteed:

                                                                             */
                                                       ---------------------- -

----------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
-
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

<PAGE>

                                       1

                                                                     EXHIBIT A-4
                                                                TO THE INDENTURE

                            [FORM OF CLASS A-4L NOTE]

                       SEE REVERSE FOR CERTAIN DEFINITIONS

               Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

               THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.

NUMBER                                                       [Note Face Amount]
R-__                                                         CUSIP NO. [CUSIP #]

<PAGE>

                                       2

                       SLM STUDENT LOAN TRUST [Trust Name]

               FLOATING RATE CLASS A-4L STUDENT LOAN-BACKED NOTES

               SLM Student Loan Trust [Trust Name], a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is [Note Face Amount] and the denominator
of which is $[Total Class A-4 Note Amount] by (ii) the aggregate amount, if any,
payable to Class A-4L Noteholders on such Distribution Date in respect of
principal of the Notes pursuant to Section 3.1 of the Indenture dated as of
[Indenture Date], among the Issuer, Chase Manhattan Bank USA, National
Association, a Delaware banking corporation, as Eligible Lender Trustee on
behalf of the Issuer, and The Bank of New York, a New York banking corporation,
as Indenture Trustee (the "Indenture Trustee") (capitalized terms used but not
defined herein being defined in Appendix A to the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
[Final Class A-4 Distribution Date] (the "Class A-4 Maturity Date").

               The Issuer shall pay interest on this Note at the rate per annum
equal to the Class A-4L Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.

<PAGE>

                                       3

               The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.

               Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.

               Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

<PAGE>

                                       4

               IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed, manually or in facsimile, as of the date set forth below.

                              SLM STUDENT LOAN TRUST [Trust Name]

                              By CHASE MANHATTAN BANK USA, NATIONAL
                                      ASSOCIATION, not in its individual
                                      capacity but solely as Eligible Lender
                                      Trustee under the Trust Agreement,

                                      By: ________________________________
                                                      Authorized Signatory

Date:  [Closing Date]

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Notes designated above and referred to in
the within-mentioned Indenture.

                                      THE BANK OF NEW YORK, as ______
                                      not in its individual capacity but solely
                                      as Indenture Trustee,

                                      By: ________________________________
                                                      Authorized Signatory

Date:  [Closing Date]

<PAGE>

                                        5

                                [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-4L Student Loan-Backed Notes (the "Class
A-4 Notes"), which, together with the Issuer's Floating Rate Class A-1 Student
Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Floating Rate Class A-3 Student
Loan-Backed Notes (the "Class A-3 Notes"), Floating Rate Class A-4 Student
Loan-Backed Notes (the "Class A-4 Notes") and the Issuer's Floating Rate Class B
Student Loan-Backed Notes (the "Class B Notes" and, together with the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.

          The Class A-4L Notes are and will be equally and ratably secured by
the Collateral pledged as security therefor as provided in the Indenture. The
Class A-1 Notes, Class A-2 Notes and Class A-3 Notes are prior in order of
principal payment to the Class A-4 Notes, and the Class A-4 Notes are senior to
the Class B Notes, as and to the extent provided in the Indenture.

          Principal of the Class A-4L Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 15th day of each March, June, September and Decemberor, if any such
date is not a Business Day, the next succeeding Business Day, commencing
[initial Distribution Date].

          As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-4 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-4 Notes shall be made pro rata to the Noteholders entitled thereto.

<PAGE>

                                        6

          Interest on the Class A-4L Notes shall be payable on each Distribution
Date on the principal amount outstanding of the Class A-4L Notes until the
principal amount thereof is paid in full, at a rate per annum equal to the Class
A-4L Rate. The "Class A-4L Rate" for each Accrual Period shall be equal to
Three-Month [or such other designated maturity or formula, as necessary, for the
initial Accrual Period] LIBOR as determined on the second Business Day before
the beginning of that Accrual Period plus [specified percentage points]%.

          Payments of interest on this Note on each Distribution Date, together
with the installment of principal, if any, to the extent not in full payment of
this Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment, and the mailing of such check shall constitute payment of
the amount thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who was the Noteholder hereof
as of the preceding Record Date by notice mailed no later than five days prior
to such Distribution Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in the Borough of Manhattan, The City of New
York.

          The Issuer shall pay interest on overdue installments of interest on
this Note at the Class A-4L Rate to the extent lawful.

<PAGE>

                                        7

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, any holder or
owner of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign thereof in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Eligible Lender Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.

<PAGE>

                                        8

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

<PAGE>

                                        9

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.

          Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither The Bank of New York, in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.

<PAGE>

                                       10

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

________________________________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _

________________________________________________________________________________
                         (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated: _________________

                                                      _______________________ */
                                                                              -
                                                           Signature Guaranteed:

                                                      _______________________ */
                                                                              -

_________________
*/ NOTICE: The signature to this assignment must correspond with the name of the
-
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

<PAGE>

                                        1

                                                                     EXHIBIT A-5
                                                                TO THE INDENTURE

                           [FORM OF CLASS A-4CP NOTE]

                       SEE REVERSE FOR CERTAIN DEFINITIONS

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.

NUMBER                                           [Note Face Amount]
R-__                                             CUSIP NO. [CUSIP #]

<PAGE>

                                        2

                       SLM STUDENT LOAN TRUST [Trust Name]

               FLOATING RATE CLASS A-4CP STUDENT LOAN-BACKED NOTES

          SLM Student Loan Trust [Trust Name], a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is [Note Face Amount] and the denominator
of which is $[Total Class A-4CP Note Amount] by (ii) the aggregate amount, if
any, payable to Class A-4CP Noteholders on such Distribution Date in respect of
principal of the Notes pursuant to Section 3.1 of the Indenture dated as of
[Indenture Date], among the Issuer, Chase Manhattan Bank USA, National
Association, a Delaware banking corporation, as Eligible Lender Trustee on
behalf of the Issuer, and The Bank of New York, a New York banking corporation,
as Indenture Trustee (the "Indenture Trustee") (capitalized terms used but not
defined herein being defined in Appendix A to the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
[Final Class A-4 Distribution Date] (the "Class A-4 Maturity Date").

          The Issuer shall pay interest on this Note at the rate per annum equal
to the Class A-4CP Rate (as defined on the reverse hereof), on each Distribution
Date until the principal of this Note is paid or made available for payment, on
the principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 365 or 366, as the case may be. Such
principal of and interest on this Note shall be paid in the manner specified on
the reverse hereof.

<PAGE>

                                        3

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

<PAGE>

                                        4

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.

                           SLM STUDENT LOAN TRUST [Trust Name]

                           By CHASE MANHATTAN BANK USA, NATIONAL
                                 ASSOCIATION, not in its individual capacity
                                 but solely as Eligible Lender Trustee under the
                                 Trust Agreement,

                                 By: _______________________
                                       Authorized Signatory

Date: [Closing Date]

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                 THE BANK OF NEW YORK,
                                 not in its individual capacity but solely as
                                 Indenture Trustee,

                                 By: _______________________
                                       Authorized Signatory

Date: [Closing Date]

<PAGE>

                                        5

                                [REVERSE OF NOTE]

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-4CP Student Loan-Backed Notes (the
"Class A-4CP Notes"), which, together with the Issuer's Floating Rate Class A-1
Student Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2
Student Loan-Backed Notes (the "Class A-2 Notes"), Floating Rate Class A-3
Student Loan-Backed Notes (the "Class A-3 Notes"), Floating Rate Class A-4
Student Loan-Backed Notes (the "Class A-4 Notes") and the Issuer's Floating Rate
Class B Student Loan-Backed Notes (the "Class B Notes" and, together with the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes, the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.

          The Class A-4CP Notes are and will be equally and ratably secured by
the Collateral pledged as security therefor as provided in the Indenture. The
Class A-1 Notes, Class A-2 Notes and Class A-3 Notes are prior in order of
principal payment to the Class A-4 Notes, and the Class A-4 Notes are senior to
the Class B Notes, as and to the extent provided in the Indenture.

          Principal of the Class A-4CP Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 15th day of each March, June, September and December or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
[initial Distribution Date].

          As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-4 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-4 Notes shall be made pro rata to the Noteholders entitled thereto.

<PAGE>

                                        6

Interest on the Class A-4CP Notes shall be payable on each Distribution Date on
the principal amount outstanding of the Class A-4CP Notes until the principal
amount thereof is paid in full, at a rate per annum equal to the Class A-4CP
Rate. "Class A-4CP Rate" means, for any Accrual Period, the daily weighted
average of the CP Rates within the Accrual Period, plus [specified percentage
points]%. The CP Rate will be adjusted daily based upon the CP Rate published
for the corresponding day in the preceding week. If the corresponding day in the
immediately preceding week is a Saturday, Sunday or other Non-Business Day, the
CP Rate will be the rate published for the Business Day immediately preceding
that corresponding day. Interest due for any Accrual Period for the Class A-4CP
Notes will be determined based on the actual number of days elapsed in the
Accrual Period divided by 365, or 366 in the case of any accrual period ending
in a leap year.

          Payments of interest on this Note on each Distribution Date, together
with the installment of principal, if any, to the extent not in full payment of
this Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment, and the mailing of such check shall constitute payment of
the amount thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who was the Noteholder hereof
as of the preceding Record Date by notice mailed no later than five days prior
to such Distribution Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
Corporate Trust

<PAGE>

                                        7

Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in the Borough of Manhattan, The City of New York.

          The Issuer shall pay interest on overdue installments of interest on
this Note at the Class A-4CP Rate to the extent lawful.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, any holder or
owner of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign thereof in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Eligible Lender Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall

<PAGE>

                                        8

be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.

<PAGE>

                                        9

          The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

          The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.

          The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

          This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.

          Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither The Bank of New York, in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer

<PAGE>

                                       10

for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.

<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

________________________________________________________________________________

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _

________________________________________________________________________________
                         (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated: _________________

                                                      _______________________ */
                                                                              -
                                                           Signature Guaranteed:

                                                      _______________________ */
                                                                              -

___________________
*/NOTICE: The signature to this assignment must correspond with the name of the
-
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange

<PAGE>

                                       1

                                                                     EXHIBIT A-6
                                                                TO THE INDENTURE

                             [FORM OF CLASS B NOTE]

                       SEE REVERSE FOR CERTAIN DEFINITIONS

          Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

          THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.

NUMBER                                               [Note Face Amount]
R-__                                                 CUSIP NO. [CUSIP #]

<PAGE>

                                       2

                       SLM STUDENT LOAN TRUST [Trust Name]

                 FLOATING RATE CLASS B STUDENT LOAN-BACKED NOTES

          SLM Student Loan Trust [Trust Name], a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is [Note Face Amount] and the denominator
of which is $[Total Class B Note Amount] by (ii) the aggregate amount, if any,
payable to Class B Noteholders on such Distribution Date in respect of principal
of the Notes pursuant to Section 3.1 of the Indenture dated as of [Indenture
Date], among the Issuer, Chase Manhattan Bank USA, National Association, a
Delaware banking corporation, as Eligible Lender Trustee on behalf of the
Issuer, and The Bank of New York, a New York banking corporation, as Indenture
Trustee (the "Indenture Trustee") (capitalized terms used but not defined herein
being defined in Appendix A to the Indenture, which also contains rules as to
usage that shall be applicable herein); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the [Final
Class B Distribution Date] (the "Class B Maturity Date").

          The Issuer shall pay interest on this Note at the rate per annum equal
to the Class B Rate (as defined on the reverse hereof), on each Distribution
Date until the principal of this Note is paid or made available for payment, on
the principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.

<PAGE>

                                       3

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

<PAGE>

                                       4

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.

                                    SLM STUDENT LOAN TRUST [Trust Name]

                                    By CHASE MANHATTAN BANK USA, NATIONAL
                                       ASSOCIATION, not in its individual
                                       capacity but solely as Eligible
                                       Lender Trustee under the Trust
                                       Agreement,

                                       By: ________________________
                                               Authorized Signatory

Date: [Closing Date]

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                       THE BANK OF NEW YORK,
                                       not in its individual capacity but solely
                                       as Indenture Trustee,
                                       By: ________________________
                                               Authorized Signatory

Date: [Closing Date]

<PAGE>

                                       5

                                [REVERSE OF NOTE]

               This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class B Student Loan-Backed Notes (the
"Class B Notes"), which, together with the Issuer's Floating Rate Class A-1
Student Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2
Student Loan-Backed Notes (the "Class A-2 Notes"), Floating Rate Class A-3
Student Loan-Backed Notes (the "Class A-3 Notes") and the Issuer's Floating Rate
Class A-4 Student Loan-Backed Notes (the "Class A-4 Notes" and, together with
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class B
Notes, the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.

               The Class B Notes are and will be equally and ratably secured by
the Collateral pledged as security therefor as provided in the Indenture. The
Class A-1, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes are prior in
order of principal payment, and are senior, to the Class B Notes as and to the
extent provided in the Indenture.

               Principal of the Class B Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 15th day of each March, June, September and December or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
[initial Distribution Date].

               As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class B Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class B
Notes shall be made pro rata to the Noteholders entitled thereto.

<PAGE>

                                       6

               Interest on the Class B Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class B Notes until
the principal amount thereof is paid in full, at a rate per annum equal to the
Class B Rate. The "Class B Rate" for each Accrual Period shall be equal to
Three-Month [or such other designated maturity or formula, as necessary, for the
initial Accrual Period] LIBOR as determined on the second business day before
the beginning of that Accrual Period plus [specified percentage points]%.

               Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.

               The Issuer shall pay interest on overdue installments of interest
on this Note at the Class B Rate to the extent lawful.

<PAGE>

                                       7

               As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

               Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender Trustee have
no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.

<PAGE>

                                       8

               Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees that
by accepting the benefits of the Indenture such Noteholder or Note Owner will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.

               Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

               The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.

               The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.

<PAGE>

                                       9

               The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

               The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.

               This Note shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.

               No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.

               Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither The Bank of New York, in its
individual capacity, Chase Manhattan Bank USA, National Association in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.

<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

________________________________________________________________________________

               FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _

________________________________________________________________________________
                         (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated: _____________________________

                                                                              */
                                                    ------------------------- -
                                                           Signature Guaranteed:

                                                                              */
                                                    ------------------------- -

---------------
*/   NOTICE: The signature to this assignment must correspond with the name of
-
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                       EXHIBIT B
                                                                TO THE INDENTURE

               Note Depository Agreement<PAGE>

                                  EXHIBIT 10.1

                         Pooling and Servicing Agreement

                                 August 1, 2002

<PAGE>

                       FIRST HORIZON ASSET SECURITIES INC.

                                    Depositor

                       FIRST HORIZON HOME LOAN CORPORATION

                           Seller and Master Servicer

                                       and

                              THE BANK OF NEW YORK,

                                     Trustee

              _____________________________________________________

                         POOLING AND SERVICING AGREEMENT

                           Dated as of August 1, 2002

              _____________________________________________________

                FIRST HORIZON MORTGAGE PASS-THROUGH TRUST 2002-5

                MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2002-5

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                               <C>
ARTICLE I DEFINITIONS .........................................................................................   5

ARTICLE II CONVEYANCE OF MORTGAGE LOANS;  REPRESENTATIONS AND WARRANTIES ......................................  32
 SECTION 2.1 Conveyance of Mortgage Loans .....................................................................  32
 SECTION 2.2 Acceptance by Trustee of the Mortgage Loans ......................................................  36
 SECTION 2.3 Representations, Warranties and Covenants of the Seller and
     Master Servicer ..........................................................................................  38
 SECTION 2.4 Representations and Warranties of the Depositor as to the Mortgage Loans .........................  40
 SECTION 2.5 Delivery of Opinion of Counsel in Connection with Substitutions ..................................  41
 SECTION 2.6 Execution and Delivery of Certificates ...........................................................  41
 SECTION 2.7 REMIC Matters ....................................................................................  41
 SECTION 2.8 Covenants of the Master Servicer .................................................................  43

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS ....................................................  43
 SECTION 3.1 Master Servicer to Service Mortgage Loans ........................................................  43
 SECTION 3.2 Subservicing; Enforcement of the Obligations of Servicers ........................................  44
 SECTION 3.3 Rights of the Depositor and the Trustee in Respect of the Master Servicer ........................  45
 SECTION 3.4 Trustee to Act as Master Servicer ................................................................  45
 SECTION 3.5 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account ..................  46
 SECTION 3.6 Collection of Taxes, Assessments and Similar Items; Escrow Accounts ..............................  48
 SECTION 3.7 Access to Certain Documentation and Information Regarding the
     Mortgage Loans ...........................................................................................  49
 SECTION 3.8 Permitted Withdrawals from the Certificate Account and Distribution
     Account ..................................................................................................  49
 SECTION 3.9 Maintenance of Hazard Insurance; Maintenance of Primary Insurance
     Policies .................................................................................................  51
 SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption Agreements .......................................  53
 SECTION 3.11 Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans .................  54
 SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files .................................................  57
 SECTION 3.13 Documents Records and Funds in Possession of Master Servicer to be Held for the Trustee .........  57
 SECTION 3.14 Master Servicing Compensation ...................................................................  58
 SECTION 3.15 Access to Certain Documentation .................................................................  58
 SECTION 3.16 Annual Statement as to Compliance ...............................................................  59
 SECTION 3.17 Annual Independent Public Accountants' Servicing Statement; Financial Statements ................  59
 SECTION 3.18 Errors and Omissions Insurance; Fidelity Bonds ..................................................  60

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER ..................................................  60
 SECTION 4.1 Advances .........................................................................................  60
SECTION 4.2 Priorities of Distribution ........................................................................  60
SECTION 4.3 Method of Distribution ............................................................................  63
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                     <C>
  SECTION 4.4 Allocation of Losses....................................................................  64
  SECTION 4.5 Reserved................................................................................  66
  SECTION 4.6 Monthly Statements to Certificateholders................................................  66
  SECTION 4.7 Determination of Pass-Through Rates for LIBOR Certificates..............................  68

ARTICLE V THE CERTIFICATES............................................................................  70
  SECTION 5.1 The Certificates........................................................................  70
  SECTION 5.2 Certificate Register; Registration of Transfer and Exchange of Certificates.............  70
  SECTION 5.3 Mutilated, Destroyed, Lost or Stolen Certificates.......................................  75
  SECTION 5.4 Persons Deemed Owners...................................................................  76
  SECTION 5.5 Access to List of Certificateholders' Names and Addresses...............................  76
  SECTION 5.6 Maintenance of Office or Agency.........................................................  76

ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER......................................................  77
  SECTION 6.1 Respective Liabilities of the Depositor and the Master Servicer.........................  77
  SECTION 6.2 Merger or Consolidation of the Depositor or the Master Servicer.........................  77
  SECTION 6.3 Limitation on Liability of the Depositor, the Seller, the Master Servicer and
      Others..........................................................................................  77
  SECTION 6.4 Limitation on Resignation of Master Servicer............................................  78

ARTICLE VII DEFAULT...................................................................................  78
  SECTION 7.1 Events of Default.......................................................................  78
  SECTION 7.2 Trustee to Act; Appointment of Successor................................................  80
  SECTION 7.3 Notification to Certificateholders......................................................  81

ARTICLE VIII CONCERNING THE TRUSTEE...................................................................  81
  SECTION 8.1 Duties of Trustee.......................................................................  81
  SECTION 8.2 Certain Matters Affecting the Trustee...................................................  83
  SECTION 8.3 Trustee Not Liable for Certificates or Mortgage Loans...................................  84
  SECTION 8.4 Trustee May Own Certificates............................................................  85
  SECTION 8.5 Trustee's Fees and Expenses.............................................................  85
  SECTION 8.6 Eligibility Requirements for Trustee....................................................  85
  SECTION 8.7 Resignation and Removal of Trustee. ....................................................  86
  SECTION 8.8 Successor Trustee.......................................................................  87
  SECTION 8.9 Merger or Consolidation of Trustee......................................................  87
  SECTION 8.10 Appointment of Co-Trustee or Separate Trustee. ........................................  87
  SECTION 8.11 Tax Matters............................................................................  89
  SECTION 8.12 Periodic Filings.......................................................................  90

ARTICLE IX TERMINATION ...............................................................................  91
  SECTION 9.1 Termination upon Liquidation or Purchase of all Mortgage Loans..........................  91
  SECTION 9.2 Final Distribution on the Certificates..................................................  91
  SECTION 9.3 Additional Termination Requirements.....................................................  92

ARTICLE X [RESERVED]..................................................................................  93

ARTICLE XI MISCELLANEOUS PROVISIONS...................................................................  93
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                             <C>
   SECTION 11.1 Amendment.....................................................................  93
   SECTION 11.2 Recordation of Agreement; Counterparts........................................  95
   SECTION 11.3 Governing Law.................................................................  95
   SECTION 11.4 Intention of Parties. ........................................................  95
   SECTION 11.5 Notices.......................................................................  96
   SECTION 11.6 Severability of Provisions....................................................  97
   SECTION 11.7 Assignment....................................................................  98
   SECTION 11.8 Limitation on Rights of Certificateholders....................................  98
   SECTION 11.9 Inspection and Audit Rights...................................................  98
   SECTION 11.10 Certificates Nonassessable and Fully Paid....................................  99
   SECTION 11.11 Limitations on Actions; No Proceedings.......................................  99
</TABLE>

<TABLE>

                                    SCHEDULES
<S>                                                                                        <C>
Schedule I:      Mortgage Loan Schedule                                                      S-I-1
Schedule II:     Representations and Warranties of the Seller/Master Servicer               S-II-1
Schedule III:    Representations and Warranties as to the Mortgage Loans                   S-III-1
Schedule IV:     Form of Monthly Master Servicer Report                                     S-IV-1
Schedule V:      Principal Balance Schedules                                                 S-V-1

<CAPTION>

                                    EXHIBITS
<S>                                                                                        <C>
Exhibit A:       Form of Senior Certificate                                                    A-1
Exhibit B:       Form of Subordinated Certificate                                              B-1
Exhibit C:       Form of Residual Certificate                                                  C-1
Exhibit D:       Form of Reverse of Certificates                                               D-1
Exhibit E:       Form of Initial Certification                                                 E-1
Exhibit F:       Form of Delay Delivery Certification                                          F-1
Exhibit G:       Form of Final Certification of Custodian                                      G-1
Exhibit H:       Transfer Affidavit                                                            H-1
Exhibit I:       Form of Transferor Certificate                                                I-1
Exhibit J:       Form of Investment Letter [Non-Rule 144A]                                     J-1
Exhibit K:       Form of Rule 144A Letter                                                      K-1
Exhibit L:       Request for Release (for Trustee)                                             L-1
Exhibit M:       Request for Release (Mortgage Loan)                                           M-1
</TABLE>

                                      iii

<PAGE>

         THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2002, among
FIRST HORIZON ASSET SECURITIES INC., a Delaware corporation, as depositor (the
"Depositor"), FIRST HORIZON HOME LOAN CORPORATION, a Kansas corporation, as
seller (in such capacity, the "Seller") and as master servicer (in such
capacity, the "Master Servicer"), and THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York, as trustee (the
"Trustee").

                                 WITNESSETH THAT

         In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

                              PRELIMINARY STATEMENT

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of two separate REMICs. The Certificates will
represent the entire beneficial ownership interest in the Trust Fund. The
Regular Certificates will represent "regular interests" in the Upper REMIC. The
Class A-RU Certificates will represent the sole class of residual interests in
the Upper REMIC and the Class A-RL Certificates will represent the sole class of
residual interests in the Lower REMIC, as described in Section 2.7. The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the Latest Possible Maturity Date.

         The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different amount and, in addition, one
Residual Certificate representing the Tax Matters Person Certificate may be
issued in a different amount):

                  [Remainder of Page Intentionally Left Blank]

                                       1

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                             Initial Class                                                  Integral Multiples
   Class Designation      Certificate Balance    Pass Through Rate   Minimum Denomination   in Excess Minimum
----------------------------------------------------------------------------------------------------------------
<S>                      <C>                           <C>           <C>                   <C>
Class A-1                $    186,234,000.00           5.500%        $          25,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class A-2                $     62,077,000.00        Variable/(1)/    $          25,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class A-3                                /(2)/      Variable/(3)/    $       2,000,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class A-4                $     36,500,000.00           6.250%        $          25,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class A-5                $     20,760,000.00           6.250%        $           1,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class A-6                $     35,000,000.00           6.250%        $          25,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class A-RU               $             50.00           6.250%        $              50                   N/A
----------------------------------------------------------------------------------------------------------------
Class A-RL               $             50.00           6.250%        $              50                   N/A
----------------------------------------------------------------------------------------------------------------
Class B-1                $      4,551,000.00           6.250%        $         100,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class B-2                $      1,750,000.00           6.250%        $         100,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class B-3                $      1,400,000.00           6.250%        $         100,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class B-4                $        525,000.00           6.250%        $         100,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class B-5                $        700,000.00           6.250%        $         100,000     $           1,000
----------------------------------------------------------------------------------------------------------------
Class B-6                $        525,317.00           6.250%        $         100,000     $           1,000
----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Pass-Through Rate with respect to any Distribution Date (and the related
Interest Accrual Period) for the Class A-2 Certificates is the per annum rate
equal to (a) 2.35% with respect to the first Distribution Date, and (b)
thereafter, the lesser of (i) LIBOR plus 0.55% and (ii) 8.50%, subject to a
minimum rate of 0.55%.

(2) The Notional Amount with respect to any Distribution Date (and the related
Interest Accrual Period) of the Class A-3 Certificates will equal the Class
Certificate Balance of the Class A-2 Certificates immediately preceding such
Distribution Date.

(3) The Pass-Through Rate with respect to any Distribution Date (and the related
Interest Accrual Period) for the Class A-3 Certificates is the per annum rate
equal to (a) 6.15% with respect to the first Distribution Date, and (b)
thereafter, 7.95% minus LIBOR, subject to a minimum rate of 0.00%.

                                       2

<PAGE>

<TABLE>
<S>                                         <C>

Accretion Directed Certificates .........  None.
Accrual Certificates ....................  None.
Accrual Components ......................  None.
Book-Entry Certificates .................  All Classes of Certificates other than the Physical Certificates.
Component Certificates ..................  None.
Components ..............................  For purposes of calculating distributions, the Component Certificates
                                           will be comprised of multiple payment components having the designations,
                                           Initial Component Balances and Pass-Through Rates set forth below:

                                                                               Initial
                                                                              Component
                                           Designation                         Balance             Pass-Through Rate
                                           -----------                        ---------            -----------------
                                               N/A                               N/A                       N/A
Delay Certificates ......................  All interest-bearing Classes of Certificates other than
                                           the Non-Delay Certificates, if any.

ERISA-Restricted Certificates ...........  The Residual Certificates and the Private Certificates.
Floating Rate Certificates ..............  The Class A-2 Certificates.
Insured Retail Certificates .............  None.
Interest Only Certificates ..............  The Class A-3 Certificates.
Inverse Floating Rate
Certificates ............................  The Class A-3 Certificates.
COFI Certificates .......................  None.
LIBOR Certificates ......................  The Class A-2 and Class A-3 Certificates.
Non-Delay Certificates ..................  The LIBOR Certificates.
Notional Principal Amount
Certificates ............................  The Class A-3 Certificates.
Offered Certificates ....................  All Classes of Certificates other than the Private Certificates.
Physical Certificates ...................  The Private Certificates and the Residual Certificates.
Planned Principal Classes ...............  The Primary Planned Principal Classes and the Secondary Planned Principal
                                           Classes.
Primary Planned Principal
Classes .................................  None.
Principal Only Certificates .............  None.
Private Certificates ....................  The Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies .........................  S&P and Fitch.
Regular Certificates ....................  All Classes of Certificates, other than the Residual Certificates.
</TABLE>

                                       3

<PAGE>

<TABLE>
<S>                                        <C>
Residual Certificates ...................  The Class A-RU and Class A-RL Certificates.
Retail Certificates .....................  None.
Scheduled Principal Classes .............  None.
Secondary Planned Principal
Class ...................................  None.
Senior Certificates .....................  The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
                                           Class A-6, Class A-RU and Class A-RL Certificates.
Subordinated Certificates ...............  The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
                                           and Class B-6 Certificates.
Support Classes .........................  None.
Targeted Principal Classes ..............  None.
Underwriters ............................  Lehman Brothers, Inc.
</TABLE>

         With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.

                                       4

<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

     Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:

     Accrued Certificate Interest: For any Class of Certificates for any
Distribution Date, the interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the Class Certificate Balance (or
Notional Amount, in the case of any Interest Only Certificates) of such Class of
Certificates immediately prior to such Distribution Date, less such Class' share
of any Net Interest Shortfall.

     Adjusted Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Master Servicing Fee Rate.

     Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the related Expense Rate.

     Advance: The payment required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.1, the amount of any such
payment being equal to the aggregate of payments of principal and interest (net
of the Master Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer has
determined would constitute a Nonrecoverable Advance if advanced.

     Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.

     Allocable Share: With respect to any Class of Subordinated Certificates on
any Distribution Date, such Class' pro rata share (based on the Class
Certificate Balance of each Class entitled thereto) of each of the components of
the Subordinated Optimal Principal Amount; provided, that, except as provided in
this Agreement, no Subordinated Certificates (other than the Class of
Subordinated Certificates with the highest priority of distribution) shall be
entitled on any Distribution Date to receive distributions pursuant to clauses
(2), (3) and (5) of the definition of Subordinated Optimal Principal Amount
unless the Class Prepayment Distribution Trigger for such Class is satisfied for
such Distribution Date.

     Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date on account of (i) Principal Prepayments received
after the related Prepayment Period and Liquidation Proceeds received in the
month of such Distribution Date and (ii) all Scheduled Payments due after the
related Due Date.

     Appraised Value: With respect to any Mortgage Loan, the Appraised Value of
the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of

                                       5

<PAGE>

the Mortgaged Property at the time of the origination of such Mortgage Loan;
(ii) with respect to a Refinancing Mortgage Loan other than a Streamlined
Documentation Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made at the time of the origination of such Refinancing Mortgage Loan;
and (iii) with respect to a Streamlined Documentation Mortgage Loan, (a) if the
loan-to-value ratio with respect to the Original Mortgage Loan at the time of
the origination thereof was 90% or less, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of the Original
Mortgage Loan and (b) if the loan-to-value ratio with respect to the Original
Mortgage Loan at the time of the origination thereof was greater than 90%, the
value of the Mortgaged Property based upon the appraisal (which may be a
drive-by appraisal) made at the time of the origination of such Streamlined
Documentation Mortgage Loan.

     Available Funds: With respect to any Distribution Date, an amount equal to
     the sum of:

          .    all scheduled installments of interest, net of the Master
               Servicing Fee, the Trustee Fee and any amounts due to First
               Horizon in respect of the Retained Yield on such Distribution
               Date, and all scheduled installments of principal due on the Due
               Date in the month in which the Distribution Date occurs and
               received before the related Determination Date, together with any
               Advances in respect thereof;

          .    all Insurance Proceeds and all Liquidation Proceeds received
               during the calendar month before the Distribution Date, which in
               each case is net of unreimbursed expenses incurred in connection
               with a liquidation or foreclosure and unreimbursed Advances, if
               any;

          .    all Principal Prepayments received during the related Prepayment
               Period, plus interest received thereon, net of any Prepayment
               Interest Excess;

          .    any Compensating Interest in respect of Principal Prepayments in
               Full received during the related Prepayment Period; and

          .    any Substitution Adjustment Amount or the Purchase Price for any
               Deleted Mortgage Loan or a Mortgage Loan repurchased by the
               Seller or the Master Servicer as of such Distribution Date,
               reduced by amounts in reimbursement for Advances previously made
               and other amounts that the Master Servicer is entitled to be
               reimbursed for out of the Certificate Account pursuant to this
               Agreement.

     Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.

     Bankruptcy Coverage Termination Date: The date on which the Bankruptcy Loss
Coverage Amount is reduced to zero.

     Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction; provided, however, that a Bankruptcy Loss shall not
be deemed a Bankruptcy Loss hereunder so long as the Master Servicer has
notified the Trustee in writing that the Master Servicer is diligently pursuing
any remedies that may exist in connection with the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to

                                       6

<PAGE>

payments due thereunder or (B) delinquent payments of principal and interest
under the related Mortgage Loan and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by the Master Servicer,
in either case without giving effect to any Debt Service Reduction or Deficient
Valuation.

     Bankruptcy Loss Coverage Amount: As of any Determination Date, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading of the then current ratings assigned to the Classes of Certificates
rated by it.

     Blanket Mortgage: The mortgage or mortgages encumbering the Cooperative
Property.

     Book-Entry Certificates: As specified in the Preliminary Statement.

     Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in the City of Dallas, or the State of Texas or
the city in which the Corporate Trust Office of the Trustee is located are
authorized or obligated by law or executive order to be closed.

     Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.

     Certificate Account: The separate Eligible Account or Accounts created and
maintained by the Master Servicer pursuant to Section 3.5 with a depository
institution in the name of the Master Servicer for the benefit of the Trustee on
behalf of Certificateholders and designated "First Horizon Home Loan Corporation
in trust for the registered holders of First Horizon Asset Securities Inc.
Mortgage Pass-Through Certificates, Series 2002-5."

     Certificate Principal Balance: With respect to any Certificate (other than
the Class A-3 Certificates) and as of any Distribution Date, the Certificate
Principal Balance on the date of the initial issuance of such Certificate, as
reduced by:

     (a)  all amounts distributed on previous Distribution Dates on such
          Certificate on account of principal,

     (b)  the principal portion of all Realized Losses previously allocated to
          such Certificate, and

     (c)  in the case of a Subordinated Certificate, such Certificate's pro rata
          share, if any, of the Subordinated Certificate Writedown Amount for
          previous Distribution Dates.

     Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate.

     Certificate Register: The register maintained pursuant to Section 5.2
hereof.

                                       7

<PAGE>

     Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Seller or any affiliate or agent of the Depositor
or the Seller shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however, that if any such Person (including the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of the Depositor or
any affiliate of the Depositor in determining which Certificates are registered
in the name of an affiliate of the Depositor.

     Class: All Certificates bearing the same class designation as set forth in
the Preliminary Statement.

     Class Certificate Balance: With respect to any Class of Certificates (other
than the Class A-3 Certificates) and as of any Distribution Date the aggregate
of the Certificate Principal Balances of all Certificates of such Class as of
such date.

     Class A-6 Distribution Percentage: 0% through the Distribution Date in
August 2007; 30% of the applicable Class A-6 Percentage thereafter through the
Distribution Date in August 2008; 40% of the applicable Class A-6 Percentage
thereafter through the Distribution Date in August 2009; 60% of the applicable
Class A-6 Percentage thereafter through the Distribution Date in August 2010;
80% of the applicable Class A-6 Percentage thereafter through the Distribution
Date in August 2011; and 100% of the applicable Class A-6 Percentage thereafter.

     Class A-6 Percentage: For any Distribution Date, the lesser of (x) 100% and
(y) the percentage (carried to six places rounded up) obtained by dividing (1)
the aggregate Class Certificate Balance of the Class A-6 Certificates
immediately preceding such Distribution Date by (2) the aggregate Stated
Principal Balance of the Mortgage Loans immediately preceding such Distribution
Date.

     Class A-6 Principal Distribution Amount: For any Distribution Date, the
lesser of (i) the sum of:

          (a) the total of the amounts described in clauses (1) and (4) of the
          definition of Senior Optimal Principal Amount (determined without
          application of the Senior Percentage or the Senior Prepayment
          Percentage) for such date multiplied by the Class A-6 Scheduled
          Distribution Percentage for such date; and

          (b) the total of the amounts described in clauses (2), (3) and (5) of
          the definition of Senior Optimal Principal Amount (determined without
          application of the Senior Prepayment Percentage) for such date
          multiplied by the Class A-6 Distribution Percentage for such date.

                                       8

<PAGE>

         and (ii) 98.6% of the Senior Optimal Principal Amount.

         Class A-6 Scheduled Distribution Percentage: As to any Distribution
Date, 0% through the Distribution Date in August 2007 and thereafter, the Class
A-6 Percentage for such date.

         Class Prepayment Distribution Trigger: For a Class of Subordinated
Certificates (other than the Class of Subordinated Certificates with the highest
priority of distribution), a trigger that is satisfied on any Distribution Date
on which a fraction (expressed as a percentage), the numerator of which is the
aggregate Class Certificate Balance of such Class and each Class subordinate
thereto, if any, and the denominator of which is the Pool Principal Balance with
respect to such Distribution Date, equals or exceeds such percentage calculated
as of the Closing Date.

         Closing Date:  August 29, 2002.

         Code:  The Internal Revenue Code of 1986, including any successor or
amendatory provisions.

         COFI:  Not applicable.

         COFI Certificates:  Not applicable.

         Compensating Interest: As to any Distribution Date and any Principal
Prepayment in respect of a Mortgage Loan that is received during the period from
the sixteenth day of the month prior to the month of such Distribution Date
through the last day of such month, an additional payment made by the Master
Servicer, to the extent funds are available from the Master Servicing Fee, equal
to the amount of interest at the Adjusted Net Mortgage Rate for that Mortgage
Loan from the date of the prepayment to the related Due Date; provided that the
aggregate of all such payments shall not exceed 0.0083% of the Pool Principal
Balance as of the related Determination Date, and provided further that if a
partial Principal Prepayment is applied after the first of the month following
the month of receipt, no additional payment is required for such Principal
Prepayment.

         Component:  Not applicable.

         Component Balance:  Not applicable.

         Component Certificates:  Not applicable.

         Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.

         Coop Shares:  Shares issued by a Cooperative Corporation.

         Cooperative Loan:  Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.

                                       9

<PAGE>

     Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.

     Cooperative Unit: A single family dwelling located in a Cooperative
Property.

     Corporate Trust Office: The designated office of the Trustee in the State
of New York at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at The Bank of New York, 101 Barclay
Street, 8W, New York, New York 10286 (Attn: Corporate Trust Mortgage-Backed
Securities Group, First Horizon Asset Securities Inc. Series 2002-5), facsimile
no. (212) 815-3986, and which is the address to which notices to and
correspondence with the Trustee should be directed.

     Corresponding Classes of Certificates: Not applicable.

     Cross-over Date: The Distribution Date on which the respective Class
Certificate Balances of each Class of Subordinated Certificates have been
reduced to zero.

     Custodial Agreement: The Custodial Agreement dated as of August 29, 2002 by
and among the Trustee, the Master Servicer and the Custodian.

     Custodian: LaSalle Bank National Association, a national banking
association, and its successors and assigns, as custodian under the Custodial
Agreement.

     Cut-off Date: August 1, 2002.

     Cut-off Date Pool Principal Balance: $350,022,417.52.

     Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.

     Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a
court of competent jurisdiction in a proceeding under the Bankruptcy Code in the
Scheduled Payment for such Mortgage Loan which became final and non-appealable,
except such a reduction resulting from a Deficient Valuation or any reduction
that results in a permanent forgiveness of principal.

     Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.2 or 2.3.

     Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then-outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of such court which is final and non-appealable in a
proceeding under the Bankruptcy Code.

                                       10

<PAGE>

     Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.2(e).

     Delay Certificates: As specified in the Preliminary Statement.

     Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not delivered to Trustee on the Closing
Date. The number of Delay Delivery Mortgage Loans shall not exceed 25% of the
aggregate number of Mortgage Loans as of the Closing Date.

     Deleted Mortgage Loan: As defined in Section 2.3(c) hereof.

     Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Certificate Balance of this Certificate" or the
Percentage Interest appearing on the face thereof.

     Depositor: First Horizon Asset Securities Inc., a Delaware corporation, or
its successor in interest.

     Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.

     Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

     Determination Date: As to any Distribution Date, the earlier of (i) the
third Business Day after the 15th day of each month, and (ii) the second
Business Day prior to the related Distribution Date.

     Discount Mortgage Loan: Any Mortgage Loan with a Mortgage Rate of less than
6.50% per annum.

     Distribution Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.5 in the name of the Trustee for the
benefit of the Certificateholders and designated "The Bank of New York, in trust
for registered Holders of First Horizon Asset Securities Inc. Mortgage
Pass-Through Certificates, Series 2002-5." Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.

     Distribution Account Deposit Date: As to any Distribution Date, 1:30 p.m.
Central time on the Business Day immediately preceding such Distribution Date.

     Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in September 2002.

                                       11

<PAGE>

         Due Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution Date occurs.

         Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF, as applicable) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a trust company, acting in its fiduciary
capacity or (iv) any other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended.

         ERISA-Restricted Certificate: As specified in the Preliminary
Statement.

         Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.6(a) hereof.

         Event of Default: As defined in Section 7.1 hereof.

         Excess Loss: The amount of any (i) Fraud Loss realized after the Fraud
Loss Coverage Termination Date, (ii) Special Hazard Loss realized after the
Special Hazard Coverage Termination Date or (iii) Deficient Valuation realized
after the Bankruptcy Coverage Termination Date.

         Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed to the Master
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.8(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced (and not reimbursed) to Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the calendar month
during which such liquidation occurred.

         Expense Rate: As to each Mortgage Loan, the sum of the related Master
Servicing Fee Rate and the Trustee Fee Rate.

                                       12

<PAGE>

         FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.

         FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.

         FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.

         First Horizon: First Horizon Home Loan Corporation, a Kansas
corporation and an indirect wholly owned subsidiary of First Tennessee National
Corporation, a Tennessee corporation.

         Fitch: Fitch Ratings or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section 11.5(b)
the address for notices to Fitch shall be Fitch, Inc., One State Street Plaza,
New York, New York 10004, Attention: Residential Mortgage Surveillance Group, or
such other address as Fitch may hereafter furnish to the Depositor and the
Master Servicer.

         FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.

         Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.

         Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation.

         Fraud Loss Coverage Amount: As of the Closing Date, $3,500,224. As of
any Distribution Date from the first anniversary of the Cut-off Date and prior
to the fourth anniversary of the Cut-off Date, the Fraud Loss Coverage Amount
will equal $3,500,224 minus the aggregate amount of Fraud Losses that would have
been allocated to the Subordinated Certificates in the absence of the Loss
Allocation Limitation since the Cut-off Date. As of any Distribution Date from
the fourth to the fifth anniversaries of the Cut-off Date, the Fraud Loss
Coverage Amount will equal (1) the lesser of (a) the Fraud Loss Coverage Amount
as of the most recent anniversary of the Cut-off Date and (b) 0.50% of the
aggregate outstanding principal balance of all of the mortgage loans as of the
most recent anniversary of the Cut-off Date minus (2) the Fraud Losses that
would have been allocated to the Subordinated Certificates in the absence of the
Loss Allocation Limitation since the most recent anniversary of the Cut-off
Date. As of any Distribution Date on or after the earlier of the Cross-over Date
or the fifth anniversary of the Cut-off Date, the Fraud Loss Coverage Amount
shall be zero.

         Fraud Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.

         Index: Not applicable.

                                       13

<PAGE>

         Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.

         Initial Bankruptcy Coverage Amount: $100,000.

         Initial Component Balance: Not applicable.

         Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.

         Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.

         Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.

         Insured Retail Certificates:  Not applicable.

         Interest Accrual Period: With respect to each Class of Delay
Certificates and any Distribution Date, the calendar month prior to the month of
such Distribution Date. With respect to any Non-Delay Certificates and any
Distribution Date, the one month period commencing on the 25th day of the month
preceding the month in which such Distribution Date occurs and ending on the
24th day of the month in which such Distribution Date occurs.

         Interest Determination Date: With respect to any Interest Accrual
Period for any LIBOR Certificates, the second Business Day prior to the first
day of such Interest Accrual Period.

         Interest Only Certificates: As specified in the Preliminary Statement.

         Latest Possible Maturity Date: As to each Class of Certificates, the
Distribution Date following the third anniversary of the scheduled maturity date
of the Mortgage Loan having the latest scheduled maturity date as of the Cut-off
Date.

         Lender PMI Mortgage Loan: Not applicable.

         LIBOR: The London Interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 4.7.

         LIBOR Certificates: As specified in the Preliminary Statement.

         Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Master Servicer has determined (in accordance with this Agreement) that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan, including the final disposition of an REO Property.

                                       14

<PAGE>

         Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Master Servicing Fees, Servicing Advances
and Advances.

         Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.

         Loss Allocation Limitation: As defined in Section 4.4(g).

         Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.

         Lower REMIC: The segregated pool of assets consisting of the Trust Fund
but excluding the Retained Yield and the Lower REMIC Interests.

         Lower REMIC Interests: The regular REMIC interests issued by the Lower
REMIC as set forth in Section 2.7.

         Maintenance: With respect to any Cooperative Unit, the rent paid by the
Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.

         Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least 51%
of the Percentage Interests evidenced by all Certificates of such Class.

         Master Servicer: First Horizon Home Loan Corporation, a Kansas
corporation, and its successors and assigns, in its capacity as master servicer
hereunder.

         Master Servicer Advance Date: As to any Distribution Date, 1:30 p.m.
Central time on the Business Day immediately preceding such Distribution Date.

         Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount payable out of each full payment of interest received on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the Due
Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date), subject to
reduction as provided in Section 3.14.

         Master Servicing Fee Rate: For each Mortgage Loan, other than Discount
Mortgage Loans, a per annum rate equal to 0.244%. For each Discount Mortgage
Loan, a per annum rate equal to the excess, if any, of the Mortgage Rate thereof
over 6.256%.

                                       15

<PAGE>

         Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.6.

         Moody's: Moody's Investors Service, Inc., or any successor thereto. If
Moody's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.5(b) the address for notices to Moody's shall be Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
Residential Pass-Through Monitoring, or such other address as Moody's may
hereafter furnish to the Depositor or the Master Servicer.

         Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.

         Mortgage File: The mortgage documents listed in Section 2.1 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.

         Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the addition of Substitute
Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:

                  (1)  the loan number;

                  (2)  the Mortgagor's name and the street address of the
                       Mortgaged Property, including the zip code;

                  (3)  the maturity date;

                  (4)  the original principal balance;

                  (5)  the Cut-off Date Principal Balance;

                  (6)  the first payment date of the Mortgage Loan;

                  (7)  the Scheduled Payment in effect as of the Cut-off Date;

                  (8)  the Loan-to-Value Ratio at origination;

                  (9)  a code indicating whether the residential dwelling at the
                       time of origination was represented to be owner-occupied;

                  (10) a code indicating whether the residential dwelling is
                       either (a) a detached single family dwelling (b) a
                       dwelling in a de minimis PUD, (c) a condominium unit or
                       PUD (other than a de minimis PUD), (d) a two-to-four unit
                       residential property or (e) a Cooperative Unit;

                                       16

<PAGE>

               (11)  the Mortgage Rate;

               (12)  the purpose for the Mortgage Loan;

               (13)  the type of documentation program pursuant to which the
                     Mortgage Loan was originated; and

               (14)  the Master Servicing Fee for the Mortgage Loan.

         Such schedule shall also set forth the total of the amounts described
under (iv) and (v) above for all of the Mortgage Loans.

         Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property.

         Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

         Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time, net of any insurance premium charged by the mortgagee to
obtain or maintain any Primary Insurance Policy.

         Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.

         Mortgagor: The obligor(s) on a Mortgage Note.

         National Cost of Funds Index: The National Monthly Median Cost of Funds
Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.

         Net Interest Shortfall: For any Distribution Date, the sum of (a) the
amount of interest which would otherwise have been received for any Mortgage
Loan that was the subject of (x) a Relief Act Reduction or (y) a Special Hazard
Loss, Fraud Loss, or Deficient Valuation, after the exhaustion of the respective
amounts of coverage for those types of losses provided by the Subordinated
Certificates; and (b) any Net Prepayment Interest Shortfalls.

         Net Prepayment Interest Shortfalls: As to any Distribution Date, the
amount by which the aggregate of Prepayment Interest Shortfalls during the
related Prepayment Period exceeds an amount equal to the Compensating Interest,
if any, for such Distribution Date.

         Non-Delay Certificates: As specified in the Preliminary Statement.

         Non-Excess Loss: Any Realized Loss other than an Excess Loss.

                                       17

<PAGE>

         Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.

         Notice of Final Distribution: The notice to be provided pursuant to
Section 9.2 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.

         Notional Amount: With respect to the Class A-3 Certificates and any
Distribution Date, an amount equal to the Class Certificate Balance of the Class
A-2 Certificates immediately prior to such Distribution Date.

         Notional Principal Amount Certificates: As specified in the Preliminary
Statement.

         Offered Certificates: As specified in the Preliminary Statement.

         Officer's Certificate: A Certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii), if provided for in
this Agreement, signed by a Servicing Officer, as the case may be, and delivered
to the Depositor and the Trustee, as the case may be, as required by this
Agreement.

         Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, including, in-house counsel,
reasonably acceptable to the Trustee; provided, however, that with respect to
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Master Servicer, (ii) not have
any direct financial interest in the Depositor or the Master Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.

         Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section 9.1(a)
hereof.

         Original Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.

         Original Subordinated Principal Balance: The aggregate of the Class
Certificate Balances of the Subordinated Certificates as of the Closing Date.

         OTS: The Office of Thrift Supervision.

         Outside Reference Date: Not applicable.

         Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:

                                       18

<PAGE>

                      (i)   Certificates theretofore canceled by the Trustee or
               delivered to the Trustee for cancellation; and

                      (ii)  Certificates in exchange for which or in lieu of
               which other Certificates have been executed and delivered by the
               Trustee pursuant to this Agreement.

         Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.

         Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.

         Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described in
the Preliminary Statement.

         Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.

         Permitted Investments: At any time, any one or more of the following
obligations and securities:

                      (i)   obligations of the United States or any agency
               thereof, provided such obligations are backed by the full faith
               and credit of the United States;

                      (ii)  general obligations of or obligations guaranteed by
               any state of the United States or the District of Columbia
               receiving the highest long-term debt rating of each Rating
               Agency, or such lower rating as will not result in the
               downgrading or withdrawal of the ratings then assigned to the
               Certificates by each Rating Agency;

                      (iii) commercial or finance company paper which is then
               receiving the highest commercial or finance company paper rating
               of each Rating Agency, or such lower rating as will not result in
               the downgrading or withdrawal of the ratings then assigned to the
               Certificates by each Rating Agency;

                      (iv)  certificates of deposit, demand or time deposits, or
               bankers' acceptances issued by any depository institution or
               trust company incorporated under the laws of the United States or
               of any state thereof and subject to supervision and examination
               by federal and/or state banking authorities, provided that the
               commercial paper and/or long term unsecured debt obligations of
               such depository institution or trust company (or in the case of
               the principal depository institution in a holding company system,
               the commercial paper or long-term

                                       19

<PAGE>

               unsecured debt obligations of such holding company, but only if
               Moody's is not a Rating Agency) are then rated one of the two
               highest long-term and the highest short-term ratings of each
               Rating Agency for such securities, or such lower ratings as will
               not result in the downgrading or withdrawal of the rating then
               assigned to the Certificates by either Rating Agency;

                      (v)    demand or time deposits or certificates of deposit
               issued by any bank or trust company or savings institution to the
               extent that such deposits are fully insured by the FDIC;

                      (vi)   guaranteed reinvestment agreements issued by any
               bank, insurance company or other corporation containing, at the
               time of the issuance of such agreements, such terms and
               conditions as will not result in the downgrading or withdrawal of
               the rating then assigned to the Certificates by either Rating
               Agency;

                      (vii)  repurchase obligations with respect to any security
               described in clauses (i) and (ii) above, in either case entered
               into with a depository institution or trust company (acting as
               principal) described in clause (iv) above;

                      (viii) securities (other than stripped bonds, stripped
               coupons or instruments sold at a purchase price in excess of 115%
               of the face amount thereof) bearing interest or sold at a
               discount issued by any corporation incorporated under the laws of
               the United States or any state thereof which, at the time of such
               investment, have one of the two highest ratings of each Rating
               Agency (except if the Rating Agency is Moody's, such rating shall
               be the highest commercial paper rating of Moody's for any such
               securities), or such lower rating as will not result in the
               downgrading or withdrawal of the rating then assigned to the
               Certificates by either Rating Agency as evidenced by a signed
               writing delivered by each Rating Agency;

                      (ix)   units of a taxable money-market portfolio having
               the highest rating assigned by each Rating Agency (except if
               Fitch is a Rating Agency and has not rated the portfolio, the
               highest rating assigned by Moody's) and restricted to obligations
               issued or guaranteed by the United States of America or entities
               whose obligations are backed by the full faith and credit of the
               United States of America and repurchase agreements collateralized
               by such obligations; and

                      (x)    such other investments bearing interest or sold at
               a discount acceptable to each Rating Agency as will not result in
               the downgrading or withdrawal of the rating then assigned to the
               Certificates by either Rating Agency, as evidenced by a signed
               writing delivered by each Rating Agency;

provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument.

                                       20

<PAGE>

         Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) an "electing large
partnership" as defined in section 775 of the Code, (vi) a Person that is not
(a) a citizen or resident of the United States, (b) a corporation, partnership,
or other entity created or organized in or under the laws of the United States,
any state thereof or the District of Columbia, (c) an estate whose income from
sources without the United States is includible in gross income for United
States federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States or (d) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust, unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form W-8ECI or any applicable successor form, and (vii) any
other Person so designated by the Depositor based upon an Opinion of Counsel
that the Transfer of an Ownership Interest in a Residual Certificate to such
Person may cause any REMIC created hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding; provided, however, that if a
person is classified as a partnership under the Code, such person shall only be
a Permitted Transferee if all of its beneficial owners are described in
subclauses (a), (b), (c) or (d) of clause (vi) and the governing documents of
such person prohibits a transfer of any interest in such person to any person
described in clause (vi). The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.

         Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.

         Physical Certificate: As specified in the Preliminary Statement.

         Planned Principal Classes: Not applicable.

         Pool Principal Balance: With respect to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.

         Prepayment Interest Excess: As to any Principal Prepayment received by
the Master Servicer from the first day through the fifteenth day of any calendar
month (other than the calendar month in which the Cut-off Date occurs), all
amounts paid by the related Mortgagor in

                                       21

<PAGE>

respect of interest on such Principal Prepayment. All Prepayment Interest Excess
shall be paid to the Master Servicer as additional master servicing
compensation.

         Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received (a) during the period from the sixteenth
day of the month preceding the month of such Distribution Date through the last
day of such month, in the case of a Principal Prepayment in full, or (b) during
the month preceding the month of such Distribution Date, in the case of a
partial Principal Prepayment, the amount, if any, by which one month's interest
at the related Adjusted Mortgage Rate on such Principal Prepayment exceeds the
amount of interest actually paid by the Mortgagor in connection with such
Principal Prepayment.

         Prepayment Period: (a) With respect to any Principal Prepayments in
Full and any Distribution Date, the period from the sixteenth day of the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, from the Cut-off Date) through the fifteenth day of the month
of such Distribution Date, and (b) with respect to any other Principal
Prepayments and any Distribution Date, the month preceding the month of such
Distribution Date.

         Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.

         Primary Planned Principal Classes: Not applicable.

         Principal Balance Schedules: Not applicable.

         Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.

         Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.

         Private Certificate: As specified in the Preliminary Statement.

         Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.

         PUD: Planned Unit Development.

         Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to Section 2.2 or 2.3 hereof or purchased at
the option of the Master Servicer pursuant to Section 3.11, an amount equal to
the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan on the
date of such purchase, and (ii) accrued interest thereon at the applicable
Mortgage Rate (or at the applicable Adjusted Mortgage Rate if (x) the purchaser
is the Master Servicer or (y) if the purchaser is the Seller and the Seller is
the Master Servicer) from

                                       22

<PAGE>

the date through which interest was last paid by the Mortgagor to the Due Date
in the month in which the Purchase Price is to be distributed to
Certificateholders.

         Qualified Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.

         Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein to
a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.

         Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any, received during
the month in which such liquidation occurred, to the extent applied as
recoveries of interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan which has become
the subject of a Deficient Valuation, if the principal amount due under the
related Mortgage Note has been reduced, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.

         Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the Cooperative
Property.

         Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which such
Distribution Date occurs.

         Reference Bank: A leading bank with an established place of business in
London engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, not controlled by, or under the common control with, the
Trustee.

                                       23

<PAGE>

         Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.

         Regular Certificates: As specified in the Preliminary Statement.

         Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

         Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than interest accrued thereon for such month pursuant to the Mortgage Note.

         REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.

         REMIC Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.

         REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.

         REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.

         Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits L and M, as
appropriate.

         Required Coupon: 6.50%.

         Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.

         Required Recordation States: The states of Florida, Maryland and
Mississippi.

         Residual Certificates: As specified in the Preliminary Statement.

         Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Agreement and also
to whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.

         Retail Certificates: Not applicable.

                                       24

<PAGE>

         Retained Yield: As to each Mortgage Loan and any Distribution Date, an
amount payable to First Horizon Home Loan Corporation out of each full payment
of interest received on such Mortgage Loan and equal to one-twelfth of the
Retained Yield Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the Due Date in the month of such Distribution Date (prior to giving
effect to any Scheduled Payments due on such Mortgage Loan on such Due Date).

         Retained Yield Rate: For any Mortgage Loan, other than the Discount
Mortgage Loans, a per annum rate equal to the excess of (a) the applicable
Mortgage Rate over (b) the Required Coupon. For any Discount Mortgage Loan, 0%.

         Scheduled Balances: Not applicable.

         Scheduled Classes: Not applicable.

         Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.

         Scheduled Principal Classes: Not applicable.

         Secondary Planned Principal Classes: Not applicable.

         Securities Act: The Securities Act of 1933, as amended.

         Security Agreement: The security agreement with respect to a
Cooperative Loan.

         Seller: First Horizon Home Loan Corporation, a Kansas corporation, and
its successors and assigns, in its capacity as seller of the Mortgage Loans
hereunder.

         Senior Certificates: As specified in the Preliminary Statement.

         Senior Final Distribution Date: For any Class of Senior Certificates,
the Distribution Date on which the Class Certificate Balance of such Class of
Senior Certificates has been reduced to zero.

         Senior Optimal Principal Amount: As to a Mortgage Pool and with respect
to each Distribution Date, an amount equal to the sum of:

               (1)  the Senior Percentage of all Scheduled Payments of principal
due on each Mortgage Loan on the first day of the month in which the
Distribution Date occurs, as specified in the amortization schedule at the time
applicable thereto after adjustment for previous principal prepayments and the
principal portion of Debt Service Reductions after the Bankruptcy Loss Coverage
Amount has been reduced to zero, but before any adjustment to such amortization
schedule by reason of any other bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period;

                                       25

<PAGE>

               (2)  the Senior Prepayment Percentage of the Stated Principal
Balance of each Mortgage Loan which was the subject of a prepayment in full
received by the Master Servicer during the applicable Prepayment Period;

               (3)  the Senior Prepayment Percentage of all partial prepayments
of principal received during the applicable Prepayment Period;

               (4)  the lesser of:

                    (a)    the Senior Prepayment Percentage of the sum of (x)
               the net liquidation proceeds allocable to principal on each
               Mortgage Loan which became a Liquidated Mortgage Loan during the
               related Prepayment Period, other than Mortgage Loans described in
               clause (y), and (y) the principal balance of each Mortgage Loan
               that was purchased by a private mortgage insurer during the
               related Prepayment Period as an alternative to paying a claim
               under the related Insurance Policy; and

                    (b)(i) the Senior Percentage of the sum of (x) the Stated
               Principal Balance of each Mortgage Loan which became a Liquidated
               Mortgage Loan during the related Prepayment Period, other than
               Mortgage Loans described in clause (y), and (y) the Stated
               Principal Balance of each Mortgage Loan that was purchased by a
               private mortgage insurer during the related Prepayment Period as
               an alternative to paying a claim under the related Insurance
               Policy minus (ii) the Senior Percentage of the principal portion
               of Excess Losses (other than Debt Service Reductions) during the
               related Prepayment Period; and

               (5)  the Senior Prepayment Percentage of the sum of (a) the
Stated Principal Balance of each Mortgage Loan which was repurchased by the
seller in connection with such Distribution Date and (b) the difference, if any,
between the Stated Principal Balance of a Mortgage Loan that has been replaced
by the seller with a Substitute Mortgage Loan pursuant to the agreement in
connection with such Distribution Date and the Stated Principal Balance of such
Substitute Mortgage Loan.

         Senior Percentage: On any Distribution Date, the lesser of 100% and the
percentage (carried to six places rounded up) obtained by dividing the aggregate
Class Certificate Balances of all Classes of Senior Certificates immediately
preceding such Distribution Date by the aggregate Class Certificate Balances of
all Classes of the Certificates immediately preceding Distribution Date.

         Senior Prepayment Percentage: On any Distribution Date occurring during
the periods set forth below, the Senior Prepayment Percentages, described below:

                                       26

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Period (Dates Inclusive)          Senior Prepayment Percentage
-----------------------------------------------------------------------------------------------------
<S>                               <C>
September 2002 - August 2007      100%
-----------------------------------------------------------------------------------------------------
September 2007 - August 2008      Senior Percentage plus 70% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------
September 2008 - August 2009      Senior Percentage plus 60% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------
September 2009 - August 2010      Senior Percentage plus 40% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------
September 2010 - August 2011      Senior Percentage plus 20% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------
September 2011 and thereafter     Senior Percentage
-----------------------------------------------------------------------------------------------------
</TABLE>

         Notwithstanding the foregoing, if the Senior Percentage on any
Distribution Date exceeds the initial Senior Percentage, the Senior Prepayment
Percentage for such Distribution Date will equal 100%.

         In addition, no reduction of the Senior Prepayment Percentage below the
level in effect for the most recent prior period specified in the table above
shall be effective on any Distribution Date unless, as of the last day of the
month preceding such Distribution Date:

                  (1)   the aggregate Stated Principal Balance of Mortgage Loans
         delinquent 60 days or more (including for this purpose any Mortgage
         Loans in foreclosure and Mortgage Loans with respect to which the
         related Mortgaged Property has been acquired by the Trust) does not
         exceed 50% of the aggregate Class Certificate Balance of the
         Subordinated Certificates as of such date; and

                  (2)   cumulative Realized Losses do not exceed:

                        (a)   30% of the Original Subordinated Principal Balance
                              if such Distribution Date occurs between and
                              including September 2007 - August 2008;

                        (b)   35% of the Original Subordinated Principal Balance
                              if such Distribution Date occurs between and
                              including September 2008 - August 2009;

                        (c)   40% of the Original Subordinated Principal Balance
                              if such Distribution Date occurs between and
                              including September 2009 - August 2010;

                        (d)   45% of the Original Subordinated Principal Balance
                              if such Distribution Date occurs between and
                              including September 2010 - August 2011; and

                                       27

<PAGE>

                       (e)   50% of the Original Subordinated Principal Balance
                 if such Distribution Date occurs during or after September
                 2011.

         Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.9.

         Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.

         Special Hazard Coverage Termination Date: The point in time at which
the Special Hazard Loss Coverage Amount is reduced to zero.

         Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property
on account of direct physical loss but not including (i) any loss of a type
covered by a hazard insurance policy or a flood insurance policy required to be
maintained with respect to such Mortgaged Property pursuant to Section 3.9 to
the extent of the amount of such loss covered thereby, or (ii) any loss caused
by or resulting from:

                 (1)   normal wear and tear;

                 (2)   fraud, conversion or other dishonest act on the part of
the Trustee, the Master Servicer or any of their agents or employees (without
regard to any portion of the loss not covered by any errors and omissions
policy);

                 (3)   errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then only for
the ensuing loss;

                 (4)   nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or uncontrolled,
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";

                 (5)   hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an actual,
impending or expected attack:

                       (i)    by any government or sovereign power, de jure or
                 de facto, or by any authority maintaining or using military,
                 naval or air forces;

                       (ii)   by military, naval or air forces; or

                       (iii)  by an agent of any such government, power,
                 authority or forces;

                                       28

<PAGE>

           (6) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or

           (7) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or customs
regulations, confiscation by order of any government or public authority or
risks of contraband or illegal transportation or trade.

     Special Hazard Loss Coverage Amount: Upon the initial issuance of the
Certificates, $4,560,876 Distribution Date, the Special Hazard Loss Coverage
Amount will equal the greater of

           (a) 1.30% (or if greater than 1.30%, the highest percentage of
Mortgage Loans by principal balance secured by Mortgaged Properties in any
single California zip code) of the outstanding principal balance of all the
Mortgage Loans as of the related Determination Date; and

           (b) twice the outstanding principal balance of the Mortgage Loan
which has the largest outstanding principal balance as of the related
Determination Date,

less, in each case, the aggregate amount of Special Hazard Losses that would
have been previously allocated to the subordinated certificates in the absence
of the Loss Allocation Limitation. As of any Distribution Date on or after the
Cross-over Date, the Special Hazard Loss Coverage Amount will be zero.

     Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.

     S&P: Standard & Poor's Corporation, a division of The McGraw-Hill
Companies, Inc. If S&P is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 11.5(b) the address for notices to S&P shall
be Standard & Poor's, 55 Water Street, 41st Floor, New York, New York 10041,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor and the Master Servicer.

     Startup Day: The Closing Date.

     Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.

     Streamlined Documentation Mortgage Loan: Any Mortgage Loan originated
pursuant to the Seller's Streamlined Loan Documentation Program then in effect.

     Subordinated Certificates: As specified in the Preliminary Statement.

                                       29

<PAGE>

     Subordinated Certificate Writedown Amount: As of any Distribution Date, the
amount by which (a) the sum of the Class Certificate Balances of all of the
Certificates, after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction of the Class Certificate Balances of
all of the Certificates on such Distribution Date, exceeds (b) the Pool
Principal Balance on the first day of the month of such Distribution Date less
any Deficient Valuations occurring before the Bankruptcy Loss Coverage Amount
has been reduced to zero.

     Subordinated Optimal Principal Amount: With respect to each Distribution
Date, an amount equal to the sum of the following (but in no event greater than
the aggregate Class Certificate Balances of the Subordinated Certificates
immediately prior to such Distribution Date):

           (1) the Subordinated Percentage of all Scheduled Payments of
principal due on each outstanding Mortgage Loan on the first day of the month in
which the Distribution Date occurs, as specified in the amortization schedule at
the time applicable thereto, after adjustment for previous principal prepayments
and the principal portion of Debt Service Reductions after the Bankruptcy Loss
Coverage Amount has been reduced to zero, but before any adjustment to such
amortization schedule by reason of any other bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period;

           (2) the Subordinated Prepayment Percentage of the Stated Principal
Balance of each Mortgage Loan which was the subject of a prepayment in full
received by the Master Servicer during the related Prepayment Period;

           (3) the Subordinated Prepayment Percentage of all partial prepayments
of principal received during the related Prepayment Period, plus, on the Senior
Final Distribution Date, 100% of any Senior Optimal Principal Amount remaining
undistributed on such date;

           (4) the amount, if any, by which the sum of (a) the net Liquidation
Proceeds allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan, other than Mortgage Loans described in
clause (b), and (b) the principal balance of each Mortgage Loan that was
purchased by a private mortgage insurer during the related Prepayment Period as
an alternative to paying a claim under the related Insurance Policy exceeds (c)
the sum of the amounts distributable to the Senior Certificateholders under
clause (4) of the definition of Senior Optimal Principal Amount on such
Distribution Date; and

           (5) the Subordinated Prepayment Percentage of the sum of (a) the
Stated Principal Balance of each Mortgage Loan which was repurchased by the
seller in connection with such Distribution Date and (b) the difference, if any,
between the Stated Principal Balance of a Mortgage Loan that has been replaced
by the seller with a Substitute Mortgage Loan pursuant to the Agreement in
connection with such Distribution Date and the Stated Principal Balance of such
Substitute Mortgage Loan.

     Subordinated Percentage: For any Distribution Date, 100% minus the Senior
Percentage.

                                       30

<PAGE>

     Subordinated Prepayment Percentage: For any Distribution Date, 100% minus
the Senior Prepayment Percentage, except that on any Senior Final Distribution
Date, the related Subordinated Prepayment Percentage will equal 100%.

     Subservicer: Any person to whom the Master Servicer has contracted for the
servicing of all or a portion of the Mortgage Loans pursuant to Section 3.2
hereof.

     Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for a
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed
in a Request for Release, substantially in the form of Exhibit L, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) have an Adjusted Net Mortgage Rate not lower than the Required
Coupon, provided that the Master Servicing Fee for the Substitute Mortgage Loan
shall be equal to or greater than that of the Deleted Mortgage Loan; (iii) be
accruing interest at a rate no lower than and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (v) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; (vi) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a Cooperative Loan and (vii) comply with each representation
and warranty set forth in Section 2.3 hereof.

     Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.3.

     Support Classes: Not applicable.

     Targeted Balances: Not applicable.

     Targeted Principal Classes: Not applicable.

     Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulationss. 1.860F-4(d) and Treasury
regulationss.301.6231(a)(7)-1. Initially, the Tax Matters Person shall be the
Trustee.

     Tax Matters Person Certificate: The Class A-RU and Class A-RL Certificate,
each with a Denomination of $0.01.

     Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Residual Certificate.

     Trust Fund: The corpus of the trust created hereunder consisting of (i) the
Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Certificate Account and the
Distribution Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise; and (iv) all proceeds of

                                       31

<PAGE>

the conversion, voluntary or involuntary, of any of the foregoing; provided that
the Trust Fund shall exclude the Retained Yield.

     Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.

     Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth of
the Trustee Fee Rate multiplied by the Pool Principal Balance with respect to
such Distribution Date.

     Trustee Fee Rate: With respect to each Mortgage Loan, the per annum rate
agreed upon in writing on or prior to the Closing Date by the Trustee and the
Depositor.

     Unanticipated Recovery: As defined in Section 4.2(f).

     Underwriters: As specified in the Preliminary Statement.

     Upper REMIC: The segregated pool of assets consisting of the Lower REMIC
Interests.

     Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. As of any date of determination, (a) 98%
of all Voting Rights will be allocated among all Holders of the Certificates,
other than the Class A-3, Class A-RU and Class A-RL Certificates, in proportion
to their then outstanding Class Certificate Balances; (b) 1% of all Voting
Rights shall be allocated among the Holders of the Class A-3 Certificates in
proportion to their then outstanding Notional Amount; and (c) 0.50% of all
Voting Rights will be allocated among the Holders of each of the Class A-RU and
Class A-RL Certificates, in each case in proportion to their respective
outstanding Class Certificate Balances.

                                   ARTICLE II
                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

     SECTION 2.1 Conveyance of Mortgage Loans.

     (a)   The Seller, concurrently with the execution and delivery hereof,
           hereby sells, transfers, assigns, sets over and otherwise conveys to
           the Depositor, without recourse, all the right, title and interest of
           the Seller in and to the Mortgage Loans, including all interest and
           principal received or receivable by the Seller on or with respect to
           the Mortgage Loans after the Cut-off Date and all interest and
           principal payments on the Mortgage Loans received on or prior to the
           Cut-off Date in respect of installments of interest and principal due
           thereafter, but not including payments of principal and interest due
           and payable on the Mortgage Loans on or before the Cut-off Date or
           amounts attributable to Retained Yield. On or prior to the Closing
           Date, the Seller shall deliver to the Depositor or, at the
           Depositor's direction, to the Trustee or the Custodian, the Mortgage
           File for each Mortgage Loan listed in the Mortgage Loan Schedule
           (except that, in the case of the Delay Delivery Mortgage Loans, such
           delivery may take place within thirty (30) days following the Closing
           Date). Such delivery of the Mortgage Files shall be made against
           payment by the Depositor of the purchase price, previously agreed to
           by

                                       32

<PAGE>

          the Seller and the Depositor, for the Mortgage Loans. With respect to
          any Mortgage Loan that does not have a first payment date on or before
          the Due Date in the month of the first Distribution Date, the Seller
          shall deposit into the Distribution Account on or before the
          Distribution Account Deposit Date relating to the first Distribution
          Date, an amount equal to one month's interest at the related Adjusted
          Mortgage Rate on the Cut-off Date Principal Balance of such Mortgage
          Loan.

     (b)  The Depositor, concurrently with the execution and delivery hereof,
          hereby sells, transfers, assigns, sets over and otherwise conveys to
          the Trustee for the benefit of the Certificateholders, without
          recourse, all the right, title and interest of the Depositor in and to
          the Trust Fund together with the Depositor's right to require the
          Seller to cure any breach of a representation or warranty made herein
          by the Seller or to repurchase or substitute for any affected Mortgage
          Loan in accordance herewith.

     (c)  In connection with the transfer and assignment set forth in clause (b)
          above, the Depositor has delivered or caused to be delivered to the
          Trustee or the Custodian on its behalf (or, in the case of the Delay
          Delivery Mortgage Loans, will deliver or cause to be delivered to the
          Trustee or the Custodian on its behalf within thirty (30) days
          following the Closing Date) for the benefit of the Certificateholders
          the following documents or instruments with respect to each Mortgage
          Loan so assigned:

          (i)   (A) the original Mortgage Note endorsed by manual or facsimile
                signature in blank in the following form: "Pay to the order of
                ________________, without recourse," with all intervening
                endorsements showing a complete chain of endorsement from the
                originator to the Person endorsing the Mortgage Note (each such
                endorsement being sufficient to transfer all right, title and
                interest of the party so endorsing, as noteholder or assignee
                thereof, in and to that Mortgage Note); or

                (B) with respect to any Lost Mortgage Note, a lost note
                affidavit from the Seller stating that the original Mortgage
                Note was lost or destroyed, together with a copy of such
                Mortgage Note;

          (ii)  except as provided below, the original recorded Mortgage or a
                copy of such Mortgage certified by the Seller as being a true
                and complete copy of the Mortgage;

          (iii) a duly executed assignment of the Mortgage in blank (which may
                be included in a blanket assignment or assignments), together
                with, except as provided below, all interim recorded assignments
                of such mortgage (each such assignment, when duly and validly
                completed, to be in recordable form and sufficient to effect the
                assignment of and transfer to the assignee thereof, under the
                Mortgage to which the assignment relates); provided that, if the
                related Mortgage has not been returned from the applicable

                                       33

<PAGE>

                public recording office, such assignment of the Mortgage may
                exclude the information to be provided by the recording office;

           (iv) the original or copies of each assumption, modification, written
                assurance or substitution agreement, if any;

           (v)  either the original or duplicate original title policy
                (including all riders thereto) with respect to the related
                mortgaged property, if available, provided that the title policy
                (including all riders thereto) will be delivered as soon as it
                becomes available, and if the title policy is not available, and
                to the extent required pursuant to the second paragraph below or
                otherwise in connection with the rating of the Certificates, a
                written commitment or interim binder or preliminary report of
                the title issued by the title insurance or escrow company with
                respect to the mortgaged property, and

           (vi) in the case of a Cooperative Loan, the originals of the
                following documents or instruments:

                (A) The Coop Shares, together with a stock power in blank;

                (B) The executed Security Agreement;

                (C) The executed Proprietary Lease;

                (D) The executed Recognition Agreement;

                (E) The executed UCC-1 financing statement with evidence of
                    recording thereon which have been filed in all places
                    required to perfect the Seller's interest in the Coop Shares
                    and the Proprietary Lease; and

                (F) Executed UCC-3 financing statements or other appropriate UCC
                    financing statements required by state law, evidencing a
                    complete and unbroken line from the mortgagee to the Trustee
                    with evidence of recording thereon (or in a form suitable
                    for recordation).

     In the event that in connection with any Mortgage Loan the Depositor cannot
deliver (a) the original recorded Mortgage or (b) all interim recorded
assignments satisfying the requirements of clause (ii) or (iii) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office, the Depositor shall promptly deliver to the Trustee or the
Custodian on its behalf such original Mortgage or such interim assignment, as
the case may be, with evidence of recording indicated thereon upon receipt
thereof from the public recording office, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery of the original Mortgage and each such interim assignment or a copy
thereof, certified, if appropriate, by the relevant recording office, be made
later than one year following the Closing Date; provided, however, in the event
the Depositor is unable to deliver by such date each Mortgage and each such
interim assignment by reason of the fact that any such documents

                                       34

<PAGE>

have not been returned by the appropriate recording office, or, in the case of
each such interim assignment, because the related Mortgage has not been returned
by the appropriate recording office, the Depositor shall deliver such documents
to the Trustee or the Custodian on its behalf as promptly as possible upon
receipt thereof and, in any event, within 720 days following the Closing Date.
The Depositor shall forward or cause to be forwarded to the Trustee or the
Custodian on its behalf (a) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Depositor or the Master Servicer to
the Trustee. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan and the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Master
Servicer shall execute and deliver or cause to be executed and delivered such a
document to the public recording office. In the case where a public recording
office retains the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, the Seller shall deliver to
the Trustee a copy of such Mortgage certified by such public recording office to
be a true and complete copy of the original recorded Mortgage.

         In addition, in the event that in connection with any Mortgage Loan the
Depositor cannot deliver the original or duplicate original lender's title
policy (together with all riders thereto), satisfying the requirements of clause
(v) above, concurrently with the execution and delivery hereof because the
related Mortgage has not been returned from the applicable public recording
office, the Depositor shall promptly deliver to the Trustee or the Custodian on
its behalf such original or duplicate original lender's title policy (together
with all riders thereto) upon receipt thereof from the applicable title insurer,
but in no event shall any such delivery of the original or duplicate original
lender's title policy be made later than one year following the Closing Date;
provided, however, in the event the Depositor is unable to deliver by such date
the original or duplicate original lender's title policy (together with all
riders thereto) because the related Mortgage has not been returned by the
appropriate recording office, the Depositor shall deliver such documents to the
Trustee or the Custodian on its behalf as promptly as possible upon receipt
thereof and, in any event, within 720 days following the Closing Date.
Notwithstanding the preceding, in connection with any Mortgage Loan for which
either the original or duplicate original title policy has not been delivered to
the Trust, if at any time during the term of this Agreement the parent company
of the Seller does not have a long term senior debt rating of A- or higher from
S&P and A- or higher from Fitch (if rated by Fitch), then the Depositor shall
within 30 days deliver to the Trustee or the Custodian on its behalf (if it has
not previously done so) a written commitment or interim binder or preliminary
report of the title issued by the title insurance or escrow company with respect
to the mortgaged property.

         Subject to the immediately following sentence, as promptly as
practicable subsequent to such transfer and assignment, and in any event, within
thirty (30) days thereafter, the Master Servicer shall (i) complete each
assignment of Mortgage, as follows: "First Horizon Mortgage Pass-Through
Certificates, Series 2002-5, The Bank of New York, as trustee for the holders of
the Certificates", (ii) cause such assignment to be in proper form for recording
in the appropriate public office for real property records and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the assignments of the Mortgages to the Trustee, except that, with
respect to any assignments of Mortgage as to which the Master

                                       35

<PAGE>

Servicer has not received the information required to prepare such assignment in
recordable form, the Master Servicer's obligation to do so and to deliver the
same for such recording shall be as soon as practicable after receipt of such
information and in any event within thirty (30) days after receipt thereof.
Notwithstanding the foregoing, the Master Servicer need not cause to be recorded
any assignment which relates to a Mortgage Loan in any state other than the
Required Recordation States.

         In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee or the Custodian on its behalf, will deposit in the Certificate Account
the portion of such payment that is required to be deposited in the Certificate
Account pursuant to Section 3.8 hereof.

         Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
Trustee or the Custodian on its behalf the Mortgage File as required pursuant to
this Section 2.1 for each Delay Delivery Mortgage Loan or (ii) (A) substitute a
Substitute Mortgage Loan for the Delay Delivery Mortgage Loan or (B) repurchase
the Delay Delivery Mortgage Loan, which substitution or repurchase shall be
accomplished in the manner and subject to the conditions set forth in Section
2.3 (treating each Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for
purposes of such Section 2.3), provided, however, that if the Seller fails to
deliver a Mortgage File for any Delay Delivery Mortgage Loan within the
thirty-day period provided in the prior sentence, the Seller shall use its best
reasonable efforts to effect a substitution, rather than a repurchase of, such
Deleted Mortgage Loan and provided further that the cure period provided for in
Section 2.2 or in Section 2.3 shall not apply to the initial delivery of the
Mortgage File for such Delay Delivery Mortgage Loan, but rather the Seller shall
have five (5) Business Days to cure such failure to deliver. At the end of such
thirty-day period, the Trustee or the Custodian, on behalf of the Trustee shall
send a Delay Delivery Certification for the Delay Delivery Mortgage Loans
delivered during such thirty-day period in accordance with the provisions of
Section 2.2. Notwithstanding anything to the contrary contained in this
Agreement, none of the Mortgage Loans in the Trust Fund is or will be Delay
Delivery Mortgage Loans.

         SECTION 2.2 Acceptance by Trustee of the Mortgage Loans.

         The Trustee or the Custodian, on behalf of the Trustee acknowledges
receipt of the documents identified in the Initial Certification in the form
annexed hereto as Exhibit E and declares that it or the Custodian holds and will
hold such documents and the other documents delivered to it constituting the
Mortgage Files, and that it or the Custodian holds or will hold such other
assets as are included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders. The Trustee acknowledges
that the Custodian will maintain possession of the Mortgage Notes in the State
of Illinois, unless otherwise permitted by the Rating Agencies.

         The Trustee agrees to execute and deliver or to cause the Custodian to
execute and deliver on the Closing Date to the Depositor, the Master Servicer
and the Seller an Initial Certification in the form annexed hereto as Exhibit E.
Based on its or the Custodian's review and examination, and only as to the
documents identified in such Initial Certification, the Custodian, on behalf of
the Trustee acknowledges that such documents appear regular on their

                                       36

<PAGE>

face and relate to such Mortgage Loan. Neither the Trustee nor the Custodian
shall be under any duty or obligation to inspect, review or examine said
documents, instruments, certificates or other papers to determine that the same
are genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.

     On or about the thirtieth (30th) day after the Closing Date, the Trustee
shall deliver or shall cause the Custodian to deliver to the Depositor, the
Master Servicer and the Seller a Delay Delivery Certification in the form
annexed hereto as Exhibit F, with any applicable exceptions noted thereon.
Notwithstanding anything to the contrary contained in this Agreement, none of
the Mortgage Loans in the Trust Fund is or will be Delay Delivery Mortgage
Loans.

     Not later than 90 days after the Closing Date, the Trustee shall deliver or
shall cause the Custodian to deliver to the Depositor, the Master Servicer and
the Seller a Final Certification in the form annexed hereto as Exhibit G, with
any applicable exceptions noted thereon.

     If, in the course of such review, the Trustee or the Custodian, on behalf
of the Trustee finds any document constituting a part of a Mortgage File which
does not meet the requirements of Section 2.1, the Trustee shall list or shall
cause the Custodian to list such as an exception in the Final Certification;
provided, however that neither the Trustee nor the Custodian shall make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Seller shall
promptly correct or cure such defect within 90 days from the date it was so
notified of such defect and, if the Seller does not correct or cure such defect
within such period, the Seller shall either (a) substitute for the related
Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.3, or (b) purchase such Mortgage Loan from the Trustee within 90 days from the
date the Seller was notified of such defect in writing at the Purchase Price of
such Mortgage Loan; provided, however, that in no event shall such substitution
or purchase occur more than 540 days from the Closing Date, except that if the
substitution or purchase of a Mortgage Loan pursuant to this provision is
required by reason of a delay in delivery of any documents by the appropriate
recording office, and there is a dispute between either the Master Servicer or
the Seller and the Trustee over the location or status of the recorded document,
then such substitution or purchase shall occur within 720 days from the Closing
Date. The Trustee shall deliver written notice to each Rating Agency within 270
days from the Closing Date indicating each Mortgage Loan (a) which has not been
returned by the appropriate recording office or (b) as to which there is a
dispute as to location or status of such Mortgage Loan. Such notice shall be
delivered every 90 days thereafter until the related Mortgage Loan is returned
to the Trustee or the Custodian on its behalf. Any such substitution pursuant to
(a) above or purchase pursuant to (b) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.5
hereof, if any, and any substitution pursuant to (a) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit L. No substitution is permitted to be made
in any calendar month after the Determination Date for such month. The Purchase
Price for any such Mortgage Loan shall be deposited by the Seller in the
Certificate Account on or prior to the Distribution Account Deposit Date for the
Distribution

                                       37

<PAGE>

Date in the month following the month of repurchase and, upon receipt of such
deposit and certification with respect thereto in the form of Exhibit M hereto,
the Trustee shall cause the Custodian to release the related Mortgage File to
the Seller and shall execute and deliver at the Seller's request such
instruments of transfer or assignment prepared by the Seller, in each case
without recourse, as shall be necessary to vest in the Seller, or a designee,
the Trustee's interest in any Mortgage Loan released pursuant hereto.

     The Trustee shall retain or shall cause the Custodian to retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions set forth herein. The Master Servicer shall promptly deliver to
the Trustee or the Custodian on its behalf, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File as come into the possession of the Master Servicer from time to
time.

     It is understood and agreed that the obligation of the Seller to substitute
for or to purchase any Mortgage Loan which does not meet the requirements of
Section 2.1 above shall constitute the sole remedy respecting such defect
available to the Trustee, the Depositor and any Certificateholder against the
Seller.

     SECTION 2.3 Representations, Warranties and Covenants of the Seller and
Master Servicer.

     (a)  First Horizon Home Loan Corporation, in its capacities as Seller and
          Master Servicer, hereby makes the representations and warranties set
          forth in Schedule II hereto, respectively, and by this reference
          incorporated herein, to the Depositor and the Trustee, as of the
          Closing Date, or if so specified therein, as of the Cut-off Date.

     (b)  The Seller, in its capacity as Seller, hereby makes the
          representations and warranties set forth in Schedule III hereto, and
          by this reference incorporated herein, to the Depositor and the
          Trustee, as of the Closing Date, or if so specified therein, as of the
          Cut-off Date.

     (c)  Upon discovery by any of the parties hereto of a breach of a
          representation or warranty made pursuant to Section 2.3(b) that
          materially and adversely affects the interests of the
          Certificateholders in any Mortgage Loan, the party discovering such
          breach shall give prompt notice thereof to the other parties. The
          Seller hereby covenants that within 90 days of the earlier of its
          discovery or its receipt of written notice from any party of a breach
          of any representation or warranty made pursuant to Section 2.3(b)
          which materially and adversely affects the interests of the
          Certificateholders in any Mortgage Loan, it shall cure such breach in
          all material respects, and if such breach is not so cured, shall, (i)
          if such 90-day period expires prior to the second anniversary of the
          Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan")
          from the Trust Fund and substitute in its place a Substitute Mortgage
          Loan, in the manner and subject to the conditions set forth in this
          Section; or (ii) repurchase the affected Mortgage Loan or Mortgage
          Loans from the Trustee at the Purchase Price in the manner set forth
          below; provided, however, that any such substitution pursuant to (i)
          above shall

                                       38

<PAGE>

          not be effected prior to the delivery to the Trustee of the Opinion of
          Counsel required by Section 2.5 hereof, if any, and any such
          substitution pursuant to (i) above shall not be effected prior to the
          additional delivery to the Trustee or the Custodian on its behalf of a
          Request for Release substantially in the form of Exhibit M and the
          Mortgage File for any such Substitute Mortgage Loan. The Seller shall
          promptly reimburse the Master Servicer and the Trustee for any
          expenses reasonably incurred by the Master Servicer or the Trustee in
          respect of enforcing the remedies for such breach. With respect to the
          representations and warranties described in this Section which are
          made to the best of the Seller's knowledge, if it is discovered by
          either the Depositor, the Seller or the Trustee that the substance of
          such representation and warranty is inaccurate and such inaccuracy
          materially and adversely affects the value of the related Mortgage
          Loan or the interests of the Certificateholders therein,
          notwithstanding the Seller's lack of knowledge with respect to the
          substance of such representation or warranty, such inaccuracy shall be
          deemed a breach of the applicable representation or warranty.

     With respect to any Substitute Mortgage Loan or Loans, the Seller shall
deliver to the Trustee or the Custodian on its behalf for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.1, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.1. No substitution is permitted to be made in any calendar month after
the Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of the
Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Master Servicer
shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the substitution of the
Substitute Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section 2.3(b)
with respect to such Mortgage Loan. Upon any such substitution and the deposit
to the Certificate Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph, the
Trustee shall release or shall cause the Custodian to release the Mortgage File
held for the benefit of the Certificateholders relating to such Deleted Mortgage
Loan to the Seller and shall execute and deliver at the Seller's direction such
instruments of transfer or assignment prepared by the Seller, in each case
without recourse, as shall be necessary to vest title in the Seller, or its
designee, the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.3.

     For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage

                                       39

<PAGE>

Loans (after application of the scheduled principal portion of the monthly
payments due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Mortgage Loans shall be
deposited in the Certificate Account by the Seller on or before the Distribution
Account Deposit Date for the Distribution Date in the month succeeding the
calendar month during which the related Mortgage Loan became required to be
purchased or replaced hereunder.

     In the event that the Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.5 on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which the Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.5 and receipt of a Request for Release in the form of
Exhibit M hereto, the Trustee shall release or shall cause the Custodian to
release the related Mortgage File held for the benefit of the Certificateholders
to such Person, and the Trustee shall execute and deliver or shall cause the
Custodian to execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
breach available to Certificateholders, the Depositor or the Trustee on their
behalf.

     The representations and warranties made pursuant to this Section 2.3 shall
survive delivery of the respective Mortgage Files to the Trustee or the
Custodian for the benefit of the Certificateholders.

     SECTION 2.4 Representations and Warranties of the Depositor as to the
Mortgage Loans.

     The Depositor hereby represents and warrants to the Trustee with respect to
each Mortgage Loan as of the date hereof or such other date set forth herein
that as of the Closing Date, and following the transfer of the Mortgage Loans to
it by the Seller, the Depositor had good title to the Mortgage Loans and the
Mortgage Notes were subject to no offsets, defenses or counterclaims.

     The Depositor hereby assigns, transfers and conveys to the Trustee all of
its rights with respect to the Mortgage Loans including, without limitation, the
representations and warranties of the Seller made pursuant to Section 2.3(b)
hereof, together with all rights of the Depositor to require the Seller to cure
any breach thereof or to repurchase or substitute for any affected Mortgage Loan
in accordance with this Agreement.

     It is understood and agreed that the representations and warranties set
forth in this Section 2.4 shall survive delivery of the Mortgage Files to the
Trustee. Upon discovery by the Depositor or the Trustee of a breach of any of
the foregoing representations and warranties set forth in this Section 2.4
(referred to herein as a "breach"), which breach materially and adversely
affects the

                                       40

<PAGE>

interest of the Certificateholders, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency.

        SECTION 2.5 Delivery of Opinion of Counsel in Connection with
Substitutions.

        (a)     Notwithstanding any contrary provision of this Agreement, no
                substitution pursuant to Section 2.2 or Section 2.3 shall be
                made more than 90 days after the Closing Date unless the Seller
                delivers to the Trustee an Opinion of Counsel, which Opinion of
                Counsel shall not be at the expense of either the Trustee or the
                Trust Fund, addressed to the Trustee, to the effect that such
                substitution will not (i) result in the imposition of the tax on
                "prohibited transactions" on the Trust Fund or contributions
                after the Startup Date, as defined in Sections 860F(a)(2) and
                860G(d) of the Code, respectively, or (ii) cause any REMIC
                created hereunder to fail to qualify as a REMIC at any time that
                any Certificates are outstanding.

        (b)     Upon discovery by the Depositor, the Seller, the Master Servicer
                or the Trustee that any Mortgage Loan does not constitute a
                "qualified mortgage" within the meaning of Section 860G(a)(3) of
                the Code, the party discovering such fact shall promptly (and in
                any event within five (5) Business Days of discovery) give
                written notice thereof to the other parties. In connection
                therewith, the Trustee shall require the Seller, at the Seller's
                option, to either (i) substitute, if the conditions in Section
                2.3(c) with respect to substitutions are satisfied, a Substitute
                Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase
                the affected Mortgage Loan within 90 days of such discovery in
                the same manner as it would a Mortgage Loan for a breach of
                representation or warranty made pursuant to Section 2.3. The
                Trustee shall reconvey or shall cause the Custodian to reconvey
                to the Seller the Mortgage Loan to be released pursuant hereto
                in the same manner, and on the same terms and conditions, as it
                would a Mortgage Loan repurchased for breach of a representation
                or warranty contained in Section 2.3.

        SECTION 2.6 Execution and Delivery of Certificates.

        The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.

        SECTION 2.7 REMIC Matters.

        The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby in the Upper REMIC. Each interest identified in the table below by a
designation beginning with "L" shall be a "regular interest" in the Lower REMIC
and the Class A-RL Certificates shall be the sole class of residual

                                       41

<PAGE>

     interest in the Lower REMIC. The Lower REMIC Interests shall be
     uncertificated and shall be held by the Trustee as assets of the Upper
     REMIC. The assets of the Lower REMIC shall be as set forth in the
     definition thereof. The assets of the Upper REMIC shall be as set forth in
     the definition thereof. The "Startup Day" for purposes of the REMIC
     Provisions shall be the Closing Date. The Tax Matters Person with respect
     to each REMIC hereunder shall be the Trustee and the Trustee shall hold the
     Tax Matters Person Certificate. Each REMIC's taxable year shall be the
     calendar year and its accounts shall be maintained using the accrual
     method.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                   Lower      Corresponding Class of Certificates
                                                              -----------------------------------
      Lower REMIC                                  REMIC                                              Latest Possible
      Interest or            Lower REMIC          Interest                                              Maturity Date
      Certificate          Interest Balance         Rate        Interest          Principal          (Payment Date in)
-----------------------------------------------------------------------------------------------------------------------
<S>                     <C>                      <C>          <C>                <C>            <C>
LTA-1                   $     186,234,000        5.500%           A-1                A-1         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTA-2                   $      62,077,000        8.500%          A-2/(1)/            A-2         September 25, 2035
                                                               A-3/(2)(3)/
-----------------------------------------------------------------------------------------------------------------------
LTA-4                   $      36,500,000        6.250%           A-4                A-4         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------

LTA-5                   $      20,260,000        6.250%           A-5                A-5         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTA-6                   $      35,000,000        6.250%           A-6                A-6         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTA-RU                  $              50        6.250%           A-RU               A-RU        September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
A-RL                    $              50        6.250%           N/A                N/A         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTB-1                   $       4,551,000        6.250%           B-1                B-1         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTB-2                   $       1,750,000        6.250%           B-2                B-2         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTB-3                   $       1,400,000        6.250%           B-3                B-3         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTB-4                   $         525,000        6.250%           B-4                B-4         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTB-5                   $         700,000        6.250%           B-5                B-5         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
LTB-6                   $         525,317        6.250%           B-6                B-6         September 25, 2035
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

     (1)  The Pass-Through Rate with respect to any Distribution Date (and the
     related Interest Accrual Period) for the Class A-2 Certificates is the per
     annum rate equal to (a) 2.35% with respect to the first Distribution Date,
     and (b) thereafter, the lesser of (i) LIBOR plus 0.55% and (ii) 8.50%,
     subject to a minimum rate of 0.55%.

     (2)  The Notional Amount with respect to any Distribution Date (and the
     related Interest Accrual Period) of the Class A-3 Certificates will equal
     the Class Certificate Balance of the Class A-2 Certificates immediately
     preceding such Distribution Date.

     (3)  The Pass-Through Rate with respect to any Distribution Date (and the
     related Interest Accrual Period) for the Class A-3 Certificates is the per
     annum rate equal to (a) 6.15% with respect to the first Distribution Date,
     and (b) thereafter, 7.95% minus LIBOR, subject to a minimum rate of 0.00%

          On each Distribution Date Available Funds shall be distributed with
     respect to the Lower REMIC Interests and the Class A-RL Certificate in a
     manner such that:

               (i)  interest accrued on each Lower REMIC Interest is distributed
                    with respect to each such Lower REMIC Interest in the same
                    manner that Accrued Certificate Interest is distributed with
                    respect to the Corresponding Class or Classes of
                    Certificates pursuant to Section 4.2(a)(i) and (ii);

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<PAGE>

              (ii)   interest accrued on the Class A-RU and Class A-RL
                     Certificates is distributed in the manner provided in
                     Section 4.2(a)(i) and (ii);

              (iii)  principal is distributed on each Lower REMIC Interest, such
                     that the principal balance of each such Lower REMIC
                     Interest always equals the principal balance of its
                     Corresponding Class of Certificates; and

              (iv)   principal is distributed on the Class A-RU and Class A-RL
                     Certificates as provided in Section 4.2(b)(i).

       Losses allocated to the Certificates pursuant to Section 4.4 shall be
allocated to the corresponding class of Lower REMIC Interest as set forth in the
above table.

       SECTION 2.8 Covenants of the Master Servicer.

       The Master Servicer hereby covenants to the Depositor and the Trustee as
follows:

       (a)    the Master Servicer shall comply in the performance of its
              obligations under this Agreement with all reasonable rules and
              requirements of the insurer under each Required Insurance Policy;
              and

       (b)    no written information, certificate of an officer, statement
              furnished in writing or written report delivered to the Depositor,
              any affiliate of the Depositor or the Trustee and prepared by the
              Master Servicer pursuant to this Agreement will contain any untrue
              statement of a material fact or omit to state a material fact
              necessary to make such information, certificate, statement or
              report not misleading.

                                   ARTICLE III
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

       SECTION 3.1 Master Servicer to Service Mortgage Loans.

       For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage loan
servicers. In connection with such servicing and administration, the Master
Servicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 3.2 hereof, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Master Servicer shall not take any action that
is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee

                                       43

<PAGE>

and the Certificateholders under this Agreement. The Master Servicer shall
represent and protect the interests of the Trust Fund in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Mortgage Loan, and shall not make or permit
any modification, waiver or amendment of any Mortgage Loan which would cause any
REMIC created hereunder to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Master Servicer, in its
own name or in the name of the Depositor and the Trustee, is hereby authorized
and empowered by the Depositor and the Trustee, when the Master Servicer
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Trustee, the Depositor, the Certificateholders or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Master Servicer shall prepare and deliver
to the Depositor and/or the Trustee such documents requiring execution and
delivery by either or both of them as are necessary or appropriate to enable the
Master Servicer to service and administer the Mortgage Loans to the extent that
the Master Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of such documents, the
Depositor and/or the Trustee shall execute such documents and deliver them to
the Master Servicer.

       In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.6, and further as
provided in Section 3.8. The costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

       SECTION 3.2 Subservicing; Enforcement of the Obligations of Servicers.

       (a)    The Master Servicer may arrange for the subservicing of any
              Mortgage Loan by a Subservicer pursuant to a subservicing
              agreement; provided, however, that such subservicing arrangement
              and the terms of the related subservicing agreement must provide
              for the servicing of such Mortgage Loans in a manner consistent
              with the servicing arrangements contemplated hereunder. Unless the
              context otherwise requires, references in this Agreement to
              actions taken or to be taken by the Master Servicer in servicing
              the Mortgage Loans include actions taken or to be taken by a
              Subservicer on behalf of the Master Servicer. Notwithstanding the
              provisions of any subservicing agreement, any of the provisions of
              this Agreement relating to agreements or arrangements between the
              Master Servicer and a Subservicer or reference to actions taken
              through a Subservicer or otherwise, the Master Servicer shall
              remain obligated and liable to the Depositor, the Trustee and the
              Certificateholders for the servicing and administration of the
              Mortgage Loans in accordance with the provisions of this Agreement
              without diminution of such obligation or liability by virtue of
              such subservicing

                                       44

<PAGE>

              agreements or arrangements or by virtue of indemnification from
              the Subservicer and to the same extent and under the same terms
              and conditions as if the Master Servicer alone were servicing and
              administering the Mortgage Loans. All actions of each Subservicer
              performed pursuant to the related subservicing agreement shall be
              performed as an agent of the Master Servicer with the same force
              and effect as if performed directly by the Master Servicer.

       (b)    For purposes of this Agreement, the Master Servicer shall be
              deemed to have received any collections, recoveries or payments
              with respect to the Mortgage Loans that are received by a
              Subservicer regardless of whether such payments are remitted by
              the Subservicer to the Master Servicer.

       SECTION 3.3 Rights of the Depositor and the Trustee in Respect of the
Master Servicer.

       The Depositor may, but is not obligated to, enforce the obligations of
the Master Servicer hereunder and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder and in connection with any such defaulted obligation to exercise the
related rights of the Master Servicer hereunder; provided that the Master
Servicer shall not be relieved of any of its obligations hereunder by virtue of
such performance by the Depositor or its designee. Neither the Trustee nor the
Depositor shall have any responsibility or liability for any action or failure
to act by the Master Servicer nor shall the Trustee or the Depositor be
obligated to supervise the performance of the Master Servicer hereunder or
otherwise.

       SECTION 3.4 Trustee to Act as Master Servicer.

       In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Master Servicer pursuant to
Section 3.9 hereof or any acts or omissions of the predecessor Master Servicer
hereunder), (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder including, but not limited to, repurchases or
substitutions of Mortgage Loans pursuant to Section 2.2 or 2.3 hereof, (iv)
responsible for expenses of the Master Servicer pursuant to Section 2.3 or (v)
deemed to have made any representations and warranties of the Master Servicer
hereunder). Any such assumption shall be subject to Section 7.2 hereof. If the
Master Servicer shall for any reason no longer be the Master Servicer (including
by reason of any Event of Default), the Trustee or its successor shall succeed
to any rights and obligations of the Master Servicer under each subservicing
agreement.

       The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement or substitute subservicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of the substitute subservicing
agreement to the assuming party.

                                       45

<PAGE>

       SECTION 3.5 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account.

       (a)    The Master Servicer shall make reasonable efforts in accordance
              with the customary and usual standards of practice of prudent
              mortgage servicers to collect all payments called for under the
              terms and provisions of the Mortgage Loans to the extent such
              procedures shall be consistent with this Agreement and the terms
              and provisions of any related Required Insurance Policy.
              Consistent with the foregoing, the Master Servicer may in its
              discretion (i) waive any late payment charge or any prepayment
              charge or penalty interest in connection with the prepayment of a
              Mortgage Loan and (ii) extend the due dates for payments due on a
              Mortgage Note for a period not greater than 180 days; provided,
              however, that the Master Servicer cannot extend the maturity of
              any such Mortgage Loan past the date on which the final payment is
              due on the latest maturing Mortgage Loan as of the Cut-off Date.
              In the event of any such arrangement, the Master Servicer shall
              make Advances on the related Mortgage Loan in accordance with the
              provisions of Section 4.1 during the scheduled period in
              accordance with the amortization schedule of such Mortgage Loan
              without modification thereof by reason of such arrangements. The
              Master Servicer shall not be required to institute or join in
              litigation with respect to collection of any payment (whether
              under a Mortgage, Mortgage Note or otherwise or against any public
              or governmental authority with respect to a taking or
              condemnation) if it reasonably believes that enforcing the
              provision of the Mortgage or other instrument pursuant to which
              such payment is required is prohibited by applicable law.

       (b)    The Master Servicer shall establish and maintain the Certificate
              Account into which the Master Servicer shall deposit or cause to
              be deposited no later than two Business Days after receipt, except
              as otherwise specifically provided herein, the following payments
              and collections remitted by Subservicers or received by it in
              respect of the Mortgage Loans subsequent to the Cut-off Date
              (other than in respect of principal and interest due on the
              Mortgage Loans on or before the Cut-off Date) and the following
              amounts required to be deposited hereunder:

              (i)    all payments on account of principal on the Mortgage Loans,
                     including Principal Prepayments;

              (ii)   all payments on account of interest on the Mortgage Loans,
                     net of the related Master Servicing Fee, any Prepayment
                     Interest Excess and, for so long as First Horizon is the
                     Master Servicer, any Retained Yield;

              (iii)  all Insurance Proceeds and Liquidation Proceeds, other than
                     proceeds to be applied to the restoration or repair of the
                     Mortgaged Property or released to the Mortgagor in
                     accordance with the Master Servicer's normal servicing
                     procedures;

              (iv)   any amount required to be deposited by the Master Servicer
                     pursuant to Section 3.5(c) in connection with any losses on
                     Permitted Investments;

                                       46

<PAGE>

              (v)    any amounts required to be deposited by the Master Servicer
                     pursuant to Section 3.9(b), 3.9(d), and in respect of net
                     monthly rental income from REO Property pursuant to Section
                     3.11 hereof;

              (vi)   all Substitution Adjustment Amounts;

              (vii)  all Advances made by the Master Servicer pursuant to
                     Section 4.1; and

              (viii) any other amounts required to be deposited hereunder.

              In addition, with respect to any Mortgage Loan that is subject to
       a buydown agreement, on each Due Date for such Mortgage Loan, in addition
       to the monthly payment remitted by the Mortgagor, the Master Servicer
       shall cause funds to be deposited into the Certificate Account in an
       amount required to cause an amount of interest to be paid with respect to
       such Mortgage Loan equal to the amount of interest that has accrued on
       such Mortgage Loan from the preceding Due Date at the related Adjusted
       Mortgage Rate on such date.

              The foregoing requirements for remittance by the Master Servicer
       shall be exclusive, it being understood and agreed that, without limiting
       the generality of the foregoing, payments in the nature of prepayment
       penalties, late payment charges, assumption fees or amounts attributable
       to reimbursements of Advances, if collected, need not be remitted by the
       Master Servicer. In the event that the Master Servicer shall remit any
       amount not required to be remitted, it may at any time withdraw or direct
       the institution maintaining the Certificate Account to withdraw such
       amount from the Certificate Account, any provision herein to the contrary
       notwithstanding. Such withdrawal or direction may be accomplished by
       delivering written notice thereof to the Trustee or such other
       institution maintaining the Certificate Account which describes the
       amounts deposited in error in the Certificate Account. The Master
       Servicer shall maintain adequate records with respect to all withdrawals
       made pursuant to this Section. All funds deposited in the Certificate
       Account shall be held in trust for the Certificateholders until withdrawn
       in accordance with Section 3.8.

       (c)    The Trustee shall establish and maintain, on behalf of the
              Certificateholders, the Distribution Account. The Trustee shall,
              promptly upon receipt, deposit in the Distribution Account and
              retain therein the following:

              (i)    the aggregate amount remitted by the Master Servicer to the
                     Trustee pursuant to Section 3.8(a)(ix);

              (ii)   any amount deposited by the Master Servicer pursuant to
                     this Section 3.5(c) in connection with any losses on
                     Permitted Investments; and

              (iii)  any other amounts deposited hereunder which are required to
                     be deposited in the Distribution Account.

              In the event that the Master Servicer shall remit any amount not
       required to be remitted, it may at any time direct the Trustee to
       withdraw such amount from the

                                       47

<PAGE>

       Distribution Account, any provision herein to the contrary
       notwithstanding. Such direction may be accomplished by delivering an
       Officer's Certificate to the Trustee which describes the amounts
       deposited in error in the Distribution Account. All funds deposited in
       the Distribution Account shall be held by the Trustee in trust for the
       Certificateholders until disbursed in accordance with this Agreement or
       withdrawn in accordance with Section 3.8. In no event shall the Trustee
       incur liability for withdrawals from the Distribution Account at the
       direction of the Master Servicer.

       (d)    The institutions at which the Certificate Account and the
              Distribution Account are maintained shall invest funds as directed
              by the Master Servicer in Permitted Investments which in both
              cases shall mature not later than (i) in the case of the
              Certificate Account, the second Business Day next preceding the
              related Distribution Account Deposit Date (except that if such
              Permitted Investment is an obligation of the institution that
              maintains such account, then such Permitted Investment shall
              mature not later than the Business Day next preceding such
              Distribution Account Deposit Date) and (ii) in the case of the
              Distribution Account, the Business Day next preceding the
              Distribution Date (except that if such Permitted Investment is an
              obligation of the institution that maintains such fund or account,
              then such Permitted Investment shall mature not later than such
              Distribution Date) and, in each case, shall not be sold or
              disposed of prior to its maturity. All such Permitted Investments
              shall be made in the name of the Trustee, for the benefit of the
              Certificateholders. All income and gain net of any losses realized
              from any such investment of funds on deposit in the Certificate
              Account shall be for the benefit of the Master Servicer as
              servicing compensation and all income and gain net of any losses
              realized from any such investment of funds on deposit in the
              Distribution Account shall be for the benefit of the Trustee. The
              amount of any Realized Losses in the Certificate Account in
              respect of any such investments shall promptly be deposited by the
              Master Servicer in the Certificate Account and the amount of any
              Realized Losses in the Distribution Account in respect of any such
              investments shall promptly be deposited by the Trustee into the
              Distribution Account. All reinvestment income earned on amounts on
              deposit in the Distribution Account shall be for the benefit of
              the Trustee. The Trustee in its fiduciary capacity shall not be
              liable for the amount of any loss incurred in respect of any
              investment or lack of investment of funds held in the Certificate
              Account and made in accordance with this Section 3.5.

       (e)    The Master Servicer shall give notice to the Trustee, the Seller,
              each Rating Agency and the Depositor of any proposed change of the
              location of the Certificate Account prior to any change thereof.
              The Trustee shall give notice to the Master Servicer, the Seller,
              each Rating Agency and the Depositor of any proposed change of the
              location of the Distribution Account prior to any change thereof.

       SECTION 3.6 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.

       (a)    To the extent required by the related Mortgage Note and not
              violative of current law, the Master Servicer shall establish and
              maintain one or more accounts (each,

                                       48

<PAGE>

              an "Escrow Account") and deposit and retain therein all
              collections from the Mortgagors (or advances by the Master
              Servicer) for the payment of taxes, assessments, hazard insurance
              premiums or comparable items for the account of the Mortgagors.
              Nothing herein shall require the Master Servicer to compel a
              Mortgagor to establish an Escrow Account in violation of
              applicable law.

       (b)    Withdrawals of amounts so collected from the Escrow Accounts may
              be made only to effect timely payment of taxes, assessments,
              hazard insurance premiums, condominium or PUD association dues, or
              comparable items, to reimburse the Master Servicer out of related
              collections for any payments made pursuant to Sections 3.1 hereof
              (with respect to taxes and assessments and insurance premiums) and
              3.9 hereof (with respect to hazard insurance), to refund to any
              Mortgagors any sums determined to be overages, to pay interest, if
              required by law or the terms of the related Mortgage or Mortgage
              Note, to Mortgagors on balances in the Escrow Account or to clear
              and terminate the Escrow Account at the termination of this
              Agreement in accordance with Section 9.1 hereof. The Escrow
              Accounts shall not be a part of the Trust Fund.

       (c)    The Master Servicer shall advance any payments referred to in
              Section 3.6(a) that are not timely paid by the Mortgagors on the
              date when the tax, premium or other cost for which such payment is
              intended is due, but the Master Servicer shall be required so to
              advance only to the extent that such advances, in the good faith
              judgment of the Master Servicer, will be recoverable by the Master
              Servicer out of Insurance Proceeds, Liquidation Proceeds or
              otherwise.

       SECTION 3.7 Access to Certain Documentation and Information Regarding the
Mortgage Loans.

       The Master Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Master Servicer.

       Upon reasonable advance notice in writing, the Master Servicer will
provide to each Certificateholder which is a savings and loan association, bank
or insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Master Servicer in
providing such reports and access.

       SECTION 3.8 Permitted Withdrawals from the Certificate Account and
Distribution Account.

       (a)    The Master Servicer may from time to time make withdrawals from
              Certificate Account for the following purposes:

                                       49

<PAGE>

       (i)    to the extent not previously retained by the Master Servicer, to
              pay to First Horizon the Retained Yield and to pay to the Master
              Servicer the master servicing compensation to which it is entitled
              pursuant to Section 3.14, and earnings on or investment income
              with respect to funds in or credited to the Certificate Account as
              additional master servicing compensation;

       (ii)   to the extent not previously retained by the Master Servicer, to
              reimburse the Master Servicer for unreimbursed Advances made by
              it, such right of reimbursement pursuant to this subclause (ii)
              being limited to amounts received on the Mortgage Loan(s) in
              respect of which any such Advance was made;

       (iii)  to reimburse the Master Servicer for any Nonrecoverable Advance
              previously made;

       (iv)   to reimburse the Master Servicer for Insured Expenses from the
              related Insurance Proceeds;

       (v)    to reimburse the Master Servicer for (a) unreimbursed Servicing
              Advances, the Master Servicer's right to reimbursement pursuant to
              this clause (a) with respect to any Mortgage Loan being limited to
              amounts received on such Mortgage Loan(s) which represent late
              recoveries of the payments for which such advances were made
              pursuant to Section 3.1 or Section 3.6 and (b) for unpaid Master
              Servicing Fees as provided in Section 3.11 hereof;

       (vi)   to pay to the Seller, with respect to each Mortgage Loan or
              property acquired in respect thereof that has been purchased
              pursuant to Section 2.2, 2.3 or 3.11, all amounts received thereon
              after the date of such purchase;

       (vii)  to reimburse the Seller, the Master Servicer or the Depositor for
              expenses incurred by any of them and reimbursable pursuant to
              Section 6.3 hereof;

       (viii) to withdraw any amount deposited in the Certificate Account and
              not required to be deposited therein;

       (ix)   on or prior to the Distribution Account Deposit Date, to withdraw
              an amount equal to the related Available Funds and the Trustee Fee
              for such Distribution Date and remit such amount to the Trustee
              for deposit in the Distribution Account; and

       (x)    to clear and terminate the Certificate Account upon termination of
              this Agreement pursuant to Section 9.1 hereof.

       The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi). Prior to making

                                       50

<PAGE>

       any withdrawal from the Certificate Account pursuant to subclause (iii),
       the Master Servicer shall deliver to the Trustee an Officer's Certificate
       of a Servicing Officer indicating the amount of any previous Advance
       determined by the Master Servicer to be a Nonrecoverable Advance and
       identifying the related Mortgage Loans(s), and their respective portions
       of such Nonrecoverable Advance.

              The Master Servicer shall distribute the Retained Yield, if any,
       to First Horizon on each Distribution Account Deposit Date during the
       term of this Agreement.

       (b)    The Trustee shall withdraw funds from the Distribution Account for
              distributions to Certificateholders in the manner specified in
              this Agreement (and to withhold from the amounts so withdrawn, the
              amount of any taxes that it is authorized to withhold pursuant to
              the last paragraph of Section 8.11). In addition, the Trustee may
              prior to making the distribution pursuant to Section 4.2 from time
              to time make withdrawals from the Distribution Account for the
              following purposes:

              (i)    to pay to itself the Trustee Fee for the related
                     Distribution Date;

              (ii)   to pay to itself earnings on or investment income with
                     respect to funds in the Distribution Account;

              (iii)  to withdraw and return to the Master Servicer any amount
                     deposited in the Distribution Account and not required to
                     be deposited therein; and

              (iv)   to clear and terminate the Distribution Account upon
                     termination of the Agreement pursuant to Section 9.1
                     hereof.

       SECTION 3.9 Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.

       (a)    The Master Servicer shall cause to be maintained, for each
              Mortgage Loan, hazard insurance with extended coverage in an
              amount that is at least equal to the lesser of (i) the maximum
              insurable value of the improvements securing such Mortgage Loan or
              (ii) the greater of (y) the outstanding principal balance of the
              Mortgage Loan and (z) an amount such that the proceeds of such
              policy shall be sufficient to prevent the Mortgagor and/or the
              mortgagee from becoming a co-insurer. Each such policy of standard
              hazard insurance shall contain, or have an accompanying
              endorsement that contains, a standard mortgagee clause. Any
              amounts collected by the Master Servicer under any such policies
              (other than the amounts to be applied to the restoration or repair
              of the related Mortgaged Property or amounts released to the
              Mortgagor in accordance with the Master Servicer's normal
              servicing procedures) shall be deposited in the Certificate
              Account. Any cost incurred by the Master Servicer in maintaining
              any such insurance shall not, for the purpose of calculating
              monthly distributions to the Certificateholders or remittances to
              the Trustee for their benefit, be added to the principal balance
              of the Mortgage Loan, notwithstanding that the terms of the
              Mortgage Loan so permit. Such costs shall be recoverable by the
              Master Servicer out of late payments by the related Mortgagor or
              out of Liquidation Proceeds to

                                       51

<PAGE>

              the extent permitted by Section 3.8 hereof. It is understood and
              agreed that no earthquake or other additional insurance is to be
              required of any Mortgagor or maintained on property acquired in
              respect of a Mortgage other than pursuant to such applicable laws
              and regulations as shall at any time be in force and as shall
              require such additional insurance. If the Mortgaged Property is
              located at the time of origination of the Mortgage Loan in a
              federally designated special flood hazard area and such area is
              participating in the national flood insurance program, the Master
              Servicer shall cause flood insurance to be maintained with respect
              to such Mortgage Loan. Such flood insurance shall be in an amount
              equal to the least of (i) the original principal balance of the
              related Mortgage Loan, (ii) the replacement value of the
              improvements which are part of such Mortgaged Property, and (iii)
              the maximum amount of such insurance available for the related
              Mortgaged Property under the national flood insurance program.

       (b)    In the event that the Master Servicer shall obtain and maintain a
              blanket policy insuring against hazard losses on all of the
              Mortgage Loans, it shall conclusively be deemed to have satisfied
              its obligations as set forth in the first sentence of this
              Section, it being understood and agreed that such policy may
              contain a deductible clause on terms substantially equivalent to
              those commercially available and maintained by comparable
              servicers. If such policy contains a deductible clause, the Master
              Servicer shall, in the event that there shall not have been
              maintained on the related Mortgaged Property a policy complying
              with the first sentence of this Section, and there shall have been
              a loss that would have been covered by such policy, deposit in the
              Certificate Account the amount not otherwise payable under the
              blanket policy because of such deductible clause. In connection
              with its activities as Master Servicer of the Mortgage Loans, the
              Master Servicer agrees to present, on behalf of itself, the
              Depositor, and the Trustee for the benefit of the
              Certificateholders, claims under any such blanket policy.

       (c)    The Master Servicer shall not take any action which would result
              in non-coverage under any applicable Primary Insurance Policy of
              any loss which, but for the actions of the Master Servicer, would
              have been covered thereunder. The Master Servicer shall not cancel
              or refuse to renew any such Primary Insurance Policy that is in
              effect at the date of the initial issuance of the Certificates and
              is required to be kept in force hereunder unless the replacement
              Primary Insurance Policy for such canceled or non-renewed policy
              is maintained with a Qualified Insurer.

                     The Master Servicer shall not be required to maintain any
              Primary Insurance Policy (i) with respect to any Mortgage Loan
              with a Loan-to-Value Ratio less than or equal to 80% as of any
              date of determination or, based on a new appraisal, the principal
              balance of such Mortgage Loan represents 80% or less of the new
              appraised value or (ii) if maintaining such Primary Insurance
              Policy is prohibited by applicable law.

                     The Master Servicer agrees to effect the timely payment of
              the premiums on each Primary Insurance Policy, and such costs not
              otherwise recoverable shall be recoverable by the Master Servicer
              from the related liquidation proceeds.

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<PAGE>

       (d)    In connection with its activities as Master Servicer of the
              Mortgage Loans, the Master Servicer agrees to present on behalf of
              itself, the Trustee and Certificateholders, claims to the insurer
              under any Primary Insurance Policies and, in this regard, to take
              such reasonable action as shall be necessary to permit recovery
              under any Primary Insurance Policies respecting defaulted Mortgage
              Loans. Any amounts collected by the Master Servicer under any
              Primary Insurance Policies shall be deposited in the Certificate
              Account.

       SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption Agreements.

       (a)    Except as otherwise provided in this Section, when any property
              subject to a Mortgage has been conveyed by the Mortgagor, the
              Master Servicer shall to the extent that it has knowledge of such
              conveyance, enforce any due-on-sale clause contained in any
              Mortgage Note or Mortgage, to the extent permitted under
              applicable law and governmental regulations, but only to the
              extent that such enforcement will not adversely affect or
              jeopardize coverage under any Required Insurance Policy.
              Notwithstanding the foregoing, the Master Servicer is not required
              to exercise such rights with respect to a Mortgage Loan if the
              Person to whom the related Mortgaged Property has been conveyed or
              is proposed to be conveyed satisfies the terms and conditions
              contained in the Mortgage Note and Mortgage related thereto and
              the consent of the mortgagee under such Mortgage Note or Mortgage
              is not otherwise so required under such Mortgage Note or Mortgage
              as a condition to such transfer. In the event that the Master
              Servicer is prohibited by law from enforcing any such due-on-sale
              clause, or if coverage under any Required Insurance Policy would
              be adversely affected, or if nonenforcement is otherwise permitted
              hereunder, the Master Servicer is authorized, subject to Section
              3.10(b), to take or enter into an assumption and modification
              agreement from or with the person to whom such property has been
              or is about to be conveyed, pursuant to which such person becomes
              liable under the Mortgage Note and, unless prohibited by
              applicable state law, the Mortgagor remains liable thereon,
              provided that the Mortgage Loan shall continue to be covered (if
              so covered before the Master Servicer enters such agreement) by
              the applicable Required Insurance Policies. The Master Servicer,
              subject to Section 3.10(b), is also authorized with the prior
              approval of the insurers under any Required Insurance Policies to
              enter into a substitution of liability agreement with such Person,
              pursuant to which the original Mortgagor is released from
              liability and such Person is substituted as Mortgagor and becomes
              liable under the Mortgage Note. Notwithstanding the foregoing, the
              Master Servicer shall not be deemed to be in default under this
              Section by reason of any transfer or assumption which the Master
              Servicer reasonably believes it is restricted by law from
              preventing, for any reason whatsoever.

       (b)    Subject to the Master Servicer's duty to enforce any due-on-sale
              clause to the extent set forth in Section 3.10(a) hereof, in any
              case in which a Mortgaged Property has been conveyed to a Person
              by a Mortgagor, and such Person is to enter into an assumption
              agreement or modification agreement or supplement to the Mortgage
              Note or Mortgage that requires the signature of the Trustee, or if
              an

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<PAGE>

          instrument of release signed by the Trustee is required releasing the
          Mortgagor from liability on the Mortgage Loan, the Master Servicer
          shall prepare and deliver or cause to be prepared and delivered to the
          Trustee for signature and shall direct, in writing, the Trustee to
          execute the assumption agreement with the Person to whom the Mortgaged
          Property is to be conveyed and such modification agreement or
          supplement to the Mortgage Note or Mortgage or other instruments as
          are reasonable or necessary to carry out the terms of the Mortgage
          Note or Mortgage or otherwise to comply with any applicable laws
          regarding assumptions or the transfer of the Mortgaged Property to
          such Person. In connection with any such assumption, no material term
          of the Mortgage Note may be changed. In addition, the substitute
          Mortgagor and the Mortgaged Property must be acceptable to the Master
          Servicer in accordance with its underwriting standards as then in
          effect. Together with each such substitution, assumption or other
          agreement or instrument delivered to the Trustee for execution by it,
          the Master Servicer shall deliver an Officer's Certificate signed by a
          Servicing Officer stating that the requirements of this subsection
          have been met in connection therewith. The Master Servicer shall
          notify the Trustee that any such substitution or assumption agreement
          has been completed by forwarding to the Trustee the original of such
          substitution or assumption agreement, which in the case of the
          original shall be added to the related Mortgage File and shall, for
          all purposes, be considered a part of such Mortgage File to the same
          extent as all other documents and instruments constituting a part
          thereof. Any fee collected by the Master Servicer for entering into an
          assumption or substitution of liability agreement will be retained by
          the Master Servicer as additional servicing compensation.

     SECTION 3.11  Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.

     The Master Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
meet the requirements of the insurer under any Required Insurance Policy;
provided, however, that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Certificate Account). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the liquidation proceeds with respect to the related
Mortgaged Property, as provided in the definition of Liquidation Proceeds. If
the Master Servicer has knowledge that a Mortgaged Property which the Master
Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a 1 mile radius of any site listed in the
Expenditure Plan for the Hazardous Substance Clean Up Bond Act of 1984 or other
site with environmental or hazardous

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<PAGE>

waste risks known to the Master Servicer, the Master Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with its established environmental review procedures.

     With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trust Fund for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Master Servicer shall
ensure that the title to such REO Property references the Pooling and Servicing
Agreement and the Trust Fund's capacity thereunder. Pursuant to its efforts to
sell such REO Property, the Master Servicer shall either itself or through an
agent selected by the Master Servicer protect and conserve such REO Property in
the same manner and to such extent as is customary in the locality where such
REO Property is located and may, incident to its conservation and protection of
the interests of the Certificateholders, rent the same, or any part thereof, as
the Master Servicer deems to be in the best interest of the Certificateholders
for the period prior to the sale of such REO Property. The Master Servicer shall
prepare for and deliver to the Trustee a statement with respect to each REO
Property that has been rented showing the aggregate rental income received and
all expenses incurred in connection with the management and maintenance of such
REO Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by Section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and any tax
reporting required by Section 6050P of the Code with respect to the cancellation
of indebtedness by certain financial entities, by preparing such tax and
information returns as may be required, in the form required, and delivering the
same to the Trustee for filing.

     In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property
prior to the close of the third taxable year after the taxable year of its
acquisition by the Trust Fund unless the Trustee shall have been supplied with
an Opinion of Counsel to the effect that the holding by the Trust Fund of such
Mortgaged Property subsequent to such three-year period will not result in the
imposition of taxes on "prohibited transactions" of the REMIC hereunder as
defined in Section 860F of the Code or cause any REMIC created hereunder to fail
to qualify as a REMIC at any time that any Certificates are outstanding, in
which case the Trust Fund may continue to hold such Mortgaged Property (subject
to any conditions contained in such Opinion of Counsel). Notwithstanding any
other provision of this Agreement, no Mortgaged Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or (ii) subject the REMIC hereunder to the imposition of any federal,
state or local income taxes on the income earned from such Mortgaged Property
under Section 860G(c) of the Code or otherwise, unless the Master Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.

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<PAGE>

         In the event of a default on a Mortgage Loan one or more of whose
obligor is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Master Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.

         The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Properties,
net of reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Master Servicing Fees, Advances and Servicing Advances, shall be
applied to the payment of principal of and interest on the related defaulted
Mortgage Loans (with interest accruing as though such Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Certificate Account. To the
extent the net income received during any calendar month is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan for such calendar month, such excess
shall be considered to be a partial prepayment of principal of the related
Mortgage Loan.

         The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Master Servicer for any related unreimbursed Servicing
Advances and Master Servicing Fees; second, to reimburse the Master Servicer for
any unreimbursed Advances; third, to reimburse the Certificate Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn by
the Master Servicer pursuant to Section 3.8(a)(iii) that related to such
Mortgage Loan; fourth, to accrued and unpaid interest (to the extent no Advance
has been made for such amount or any such Advance has been reimbursed) on the
Mortgage Loan or related REO Property, at the Adjusted Net Mortgage Rate to the
Due Date occurring in the month in which such amounts are required to be
distributed; and fifth, as a recovery of principal of the Mortgage Loan. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be
retained by the Master Servicer as additional servicing compensation pursuant to
Section 3.14.

         The Master Servicer, with the consent of the Trustee, shall have the
right to purchase for its own account from the Trust Fund any Mortgage Loan
which is 91 days or more delinquent at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Certificate Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit M hereto, shall release or cause to be
released to the purchaser of such Mortgage Loan the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared by
the purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan and

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<PAGE>

all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.

      SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files.

      Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by delivering, or causing to be delivered a "Request for Release"
substantially in the form of Exhibit M. Upon receipt of such request, the
Trustee shall or shall cause the Custodian to promptly release the related
Mortgage File to the Master Servicer, and the Trustee shall at the Master
Servicer's direction execute and deliver to the Master Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by the
Master Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the related
Mortgagor. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose, collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Trustee shall, upon delivery to the Trustee of a Request for Release
in the form of Exhibit L signed by a Servicing Officer, release the Mortgage
File to the Master Servicer. Subject to the further limitations set forth below,
the Master Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee or its Custodian when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Certificate Account, in which case the
Master Servicer shall deliver to the Trustee a Request for Release in the form
of Exhibit M, signed by a Servicing Officer.

      If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.

      SECTION 3.13 Documents Records and Funds in Possession of Master Servicer
to be Held for the Trustee.

      Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or which otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any

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Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Master Servicer for and on behalf of the Trustee and shall
be and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. The Master Servicer also agrees that it
shall not create, incur or subject any Mortgage File or any funds that are
deposited in the Certificate Account, Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert by
legal action or otherwise any claim or right of setoff against any Mortgage File
or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Master Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to the
Master Servicer under this Agreement.

         SECTION 3.14 Master Servicing Compensation.

         As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account an amount equal
to the Master Servicing Fee for each Mortgage Loan, provided that the aggregate
Master Servicing Fee with respect to any Distribution Date shall be reduced (i)
by the amount of any Compensating Interest paid by the Master Servicer with
respect to such Distribution Date, and (ii) with respect to the first
Distribution Date, an amount equal to any amount to be deposited into the
Distribution Account by the Depositor pursuant to Section 2.1(a) and not so
deposited.

         Additional servicing compensation in the form of (i) Retained Yield,
Excess Proceeds, Prepayment Interest Excess and all income and gain net of any
losses realized from Permitted Investments and (ii) prepayment penalties,
assumption fees and late payment charges in each case under the circumstances
and in the manner set forth in the applicable Mortgage Note or Mortgage shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.5 hereof; provided that in the
event the Master Servicer is terminated pursuant to Section 7.1, the Retained
Yield shall be payable to First Horizon Home Loan Corporation in its individual
capacity and shall not be payable to the Trustee or any successor to the Master
Servicer. The Master Servicer shall be required to pay all expenses incurred by
it in connection with its master servicing activities hereunder (including
payment of any premiums for hazard insurance and any Primary Insurance Policy
and maintenance of the other forms of insurance coverage required by this
Agreement) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.

         SECTION 3.15 Access to Certain Documentation.

         The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinated
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices designated by the Master Servicer.
Nothing in this Section

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shall limit the obligation of the Master Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Master Servicer to provide access as provided in this Section as a result
of such obligation shall not constitute a breach of this Section.

     SECTION 3.16 Annual Statement as to Compliance.

     The Master Servicer shall deliver to the Depositor and the Trustee on or
before 120 days after the end of the Master Servicer's fiscal year, commencing
with its 2003 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of the Master Servicer during the
preceding calendar year and of the performance of the Master Servicer under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof. The
Trustee shall forward a copy of each such statement to each Rating Agency.

     SECTION 3.17 Annual Independent Public Accountants' Servicing Statement;
Financial Statements.

     On or before 120 days after the end of the Master Servicer's fiscal year,
commencing with its 2003 fiscal year, the Master Servicer at its expense shall
cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, the
Seller or any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that-such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans under this Agreement or
of mortgage loans under pooling and servicing agreements substantially similar
to this Agreement (such statement to have attached thereto a schedule setting
forth the pooling and servicing agreements covered thereby) and that, on the
basis of such examination, conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FNMA and FHLMC, such servicing has been conducted in
compliance with such pooling and servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program
for Mortgages serviced for FNMA and FHLMC requires it to report. In rendering
such statement, such firm may rely, as to matters relating to direct servicing
of mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC (rendered within one year of such statement) of independent
public accountants with respect to the related Subservicer. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided such statement is delivered by the
Master Servicer to the Trustee.

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         SECTION 3.18 Errors and Omissions Insurance; Fidelity Bonds.

         The Master Servicer shall for so long as it acts as master servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
Master Servicer hereunder and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of FNMA or FHLMC for persons
performing servicing for mortgage loans purchased by FNMA or FHLMC. In the event
that any such policy or bond ceases to be in effect, the Master Servicer shall
obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.

                                   ARTICLE IV
                DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

         SECTION 4.1 Advances.

         The Master Servicer shall determine on or before each Master Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make an
Advance, it shall, on or before the Master Servicer Advance Date, either (i)
deposit into the Certificate Account an amount equal to the Advance or (ii) make
an appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Master Servicer in
discharge of its obligation to make any such Advance. Any funds so applied shall
be replaced by the Master Servicer by deposit in the Certificate Account no
later than the close of business on the next Master Servicer Advance Date. The
Master Servicer shall be entitled to be reimbursed from the Certificate Account
for all Advances of its own funds made pursuant to this Section as provided in
Section 3.8. The obligation to make Advances with respect to any Mortgage Loan
shall continue if such Mortgage Loan has been foreclosed or otherwise terminated
and the related Mortgaged Property has not been liquidated.

         The Master Servicer shall deliver to the Trustee on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer indicating
the amount of any proposed Advance determined by the Master Servicer to be a
Nonrecoverable Advance.

         SECTION 4.2 Priorities of Distribution.

         (a)   On each Distribution Date, the Trustee shall withdraw the
               Available Funds from the Distribution Account and apply such
               funds to distributions on the Certificates in the following order
               and priority and, in each case, to the extent of Available Funds
               remaining:

               (i)   to the Classes of Senior Certificates, the Accrued
                     Certificate Interest on each such Class for such
                     Distribution Date, any shortfall in available amounts being
                     allocated among such Classes in proportion to the amount of
                     Accrued Certificate Interest otherwise distributable
                     thereon;

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               (ii)   to the Classes of Senior Certificates, any Accrued
                      Certificate Interest thereon remaining undistributed from
                      previous Distribution Dates, to the extent of remaining
                      Available Funds, any shortfall in available amounts being
                      allocated among such Classes in proportion to the amount
                      of such Accrued Certificate Interest remaining
                      undistributed for each such Class for such Distribution
                      Date;

               (iii)  to the Classes of Senior Certificates, in reduction of the
                      Class Certificate Balances thereof, to the extent of
                      remaining Available Funds, the Senior Optimal Principal
                      Amount for such Distribution Date, in the order of
                      priority set forth below in Section 4.2(b), until the
                      respective Class Certificate Balances thereof have been
                      reduced to zero;

               (iv)   to the Class B-1 Certificates, to the extent of remaining
                      Available Funds, but subject to the prior payment of
                      amounts, in the following order: (1) the Accrued
                      Certificate Interest thereon for such Distribution Date,
                      (2) any Accrued Certificate Interest thereon remaining
                      undistributed from previous Distribution Dates and (3)
                      such Class' Allocable Share for such Distribution Date;

               (v)    to the Class B-2 Certificates, to the extent of remaining
                      Available Funds, in the following order: (1) the Accrued
                      Certificate Interest thereon for such Distribution Date,
                      (2) any Accrued Certificate Interest thereon remaining
                      undistributed from previous Distribution Dates and (3)
                      such Class' Allocable Share for such Distribution Date;

               (vi)   to the Class B-3 Certificates, to the extent of remaining
                      Available Funds, in the following order: (1) the Accrued
                      Certificate Interest thereon for such Distribution Date,
                      (2) any Accrued Certificate Interest thereon remaining
                      undistributed from previous Distribution Dates and (3)
                      such Class' Allocable Share for such Distribution Date;

               (vii)  to the Class B-4 Certificates, to the extent of remaining
                      Available Funds, in the following order: (1) the Accrued
                      Certificate Interest thereon for such Distribution Date,
                      (2) any Accrued Certificate Interest thereon remaining
                      undistributed from previous Distribution Dates and (3)
                      such Class' Allocable Share for such Distribution Date;

               (viii) to the Class B-5 Certificates, to the extent of remaining
                      Available Funds, in the following order: (1) the Accrued
                      Certificate Interest thereon for such Distribution Date,
                      (2) any Accrued Certificate Interest thereon remaining
                      undistributed from previous Distribution Dates and (3)
                      such Class' Allocable Share for such Distribution Date;
                      and

               (ix)   to the Class B-6 Certificates, to the extent of remaining
                      Available Funds, in the following order: (1) the Accrued
                      Certificate Interest thereon for such Distribution Date,
                      (2) any Accrued Certificate Interest thereon

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                     remaining undistributed from previous Distribution Dates
                     and (3) such Class' Allocable Share for such Distribution
                     Date.

         (b)   Amounts allocated to the Senior Certificates pursuant to Section
               4.2(a)(iii) above will be distributed in the following order of
               priority:

               (i)   pro rata, to the Class A-RU and Class A-RL Certificates
                     until their respective Class Certificate Balances have each
                     been reduced to zero;

               (ii)  to the Class A-6 Certificates, an amount up to the Class
                     A-6 Principal Distribution Amount for such Distribution
                     Date, until the Class Certificate Balance thereof has been
                     reduced to zero;

               (iii) pro rata, to the Class A-1 and Class A-2 Certificates,
                     until their respective Class Certificate Balances have each
                     been reduced to zero;

               (iv)  sequentially, to the Class A-4 and Class A-5 Certificates,
                     in that order, until their respective Class Certificate
                     Balances have been reduced to zero;

               (v)   to the Class A-6 Certificates until the outstanding Class
                     Certificate Balance thereof has been reduced to zero.

         (c)   On each Distribution Date, the Trustee shall distribute to the
               Holders of the Class A-RU or Class A-RL Certificates any
               Available Funds remaining in the related REMIC for such
               Distribution Date after application of all amounts described in
               clauses (a), (b) and (f) of this Section 4.2 on such Distribution
               Date. Any distributions pursuant to this subsection (c) shall not
               reduce the Class Certificate Balance of the Class A-RU and Class
               A-RL Certificates.

         (d)   On and after the Cross-Over Date, the amount distributable to the
               Senior Certificates pursuant to Section 4.2(a)(iii) for such
               Distribution Date shall be allocated among the related Classes of
               Senior Certificates, pro rata, on the basis of their respective
               Class Certificate Balances immediately prior to such Distribution
               Date, regardless of the priorities and amounts set forth in
               Section 4.2.

         (e)   If on any Distribution Date (i) the Class Certificate Balance of
               any Class of Subordinated Certificates (other than the Class of
               Subordinated Certificates with the highest priority of
               distribution) for which the related Class Prepayment Distribution
               Trigger was satisfied on such Distribution Date is reduced to
               zero and (ii) amounts distributable to such Class of Subordinated
               Certificates pursuant to clauses (2), (3) and (5) of the
               Subordinated Optimal Principal Amount remain undistributed on
               such Distribution Date after all amounts otherwise distributable
               on such date pursuant to clauses (iv) through (ix) of Section
               4.2(a) have been distributed, such amounts, to the extent of such
               Class' remaining Allocable Share, shall be distributed on such
               Distribution Date to the remaining Classes of Subordinated
               Certificates in order of priority, such that no such distribution
               shall be made to any Class of Subordinated Certificates while a
               Class of Subordinated Certificates having a distribution priority
               higher than such Class is outstanding.

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         (f)   In the event that in any calendar month the Master Servicer
               recovers an amount (an "Unanticipated Recovery") in respect of
               principal of a Mortgage Loan which had previously been allocated
               as a Realized Loss to any Class of Certificates pursuant to
               Section 4.4, on the Distribution Date in the next succeeding
               calendar month the Trustee, shall withdraw from the Distribution
               Account and distribute to the Holders of each outstanding Class
               to which such Realized Loss had previously been allocated its
               share (determined as described in the succeeding paragraph) of
               such Unanticipated Recovery in an amount not to exceed the amount
               of such Realized Loss previously allocated to such Class. When
               the Class Certificate Balance of a Class of Certificates has been
               reduced to zero, the Holders of such Class shall not be entitled
               to any share of an Unanticipated Recovery, and such Unanticipated
               Recovery shall be allocated among all outstanding Classes of
               Certificates entitled thereto in accordance with the preceding
               sentence, subject to the remainder of this subsection (f). In the
               event that (i) any Unanticipated Recovery remains undistributed
               in accordance with the preceding sentence or (ii) the amount of
               an Unanticipated Recovery exceeds the amount of the Realized Loss
               previously allocated to any outstanding Classes with respect to
               the related Mortgage Loan, on the applicable Distribution Date
               the Trustee shall distribute to the Holders of all outstanding
               Classes of the related Certificates to which Realized Losses had
               previously been allocated and not reimbursed their pro rata share
               (determined as described below) of such excess in an amount not
               to exceed the aggregate amount of any Realized Loss previously
               allocated to such Class with respect to any other Mortgage Loan
               that has not been recovered in accordance with this subsection
               (f). Any distributions made pursuant to this subsection (f) shall
               not reduce the Class Certificate Balance of the related
               Certificate.

                     For purposes of the preceding paragraph, the share of an
               Unanticipated Recovery allocable to any Class of Certificates
               with respect to a Mortgage Loan shall be based on its pro rata
               share (in proportion to the Class Certificate Balances thereof
               with respect to such Distribution Date) of the principal portion
               of any such Realized Loss previously allocated with respect to
               such Mortgage Loan (or Loans).

         SECTION 4.3 Method of Distribution.

         (a)   All distributions with respect to each Class of Certificates on
               each Distribution Date shall be made pro rata among the
               outstanding Certificates of such Class, based on the Percentage
               Interest in such Class represented by each Certificate. Payments
               to the Certificateholders on each Distribution Date will be made
               by the Trustee to the Certificateholders of record on the related
               Record Date by check or money order mailed to a Certificateholder
               at the address appearing in the Certificate Register, or upon
               written request by such Certificateholder to the Trustee made not
               later than the applicable Record Date, by wire transfer to a U.S.
               depository institution acceptable to the Trustee, or by such
               other means of payment as such Certificateholder and the Trustee
               shall agree.

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         (b)   Each distribution with respect to a Book-Entry Certificate shall
               be paid to the Depository, which shall credit the amount of such
               distribution to the accounts of its Depository Participants in
               accordance with its normal procedures. Each Depository
               Participant shall be responsible for disbursing such distribution
               to the Certificate Owners that it represents and to each
               financial intermediary for which it acts as agent. Each such
               financial intermediary shall be responsible for disbursing funds
               to the Certificate Owners that it represents. All such credits
               and disbursements with respect to a Book-Entry Certificate are to
               be made by the Depository and the Depository Participants in
               accordance with the provisions of the applicable Certificates.
               Neither the Trustee nor the Master Servicer shall have any
               responsibility therefor except as otherwise provided by
               applicable law.

         (c)   The Trustee shall withhold or cause to be withheld such amounts
               as it reasonably determines are required by the Code (giving full
               effect to any exemptions from withholding and related
               certifications required to be furnished by Certificateholders or
               Certificate Owners and any reductions to withholding by virtue of
               any bilateral tax treaties and any applicable certification
               required to be furnished by Certificateholders or Certificate
               Owners with respect thereto) from distributions to be made to
               Non-U.S. Persons. If the Trustee reasonably determines that a
               more accurate determination of the amount required to be withheld
               for a distribution can be made within a reasonable period after
               the scheduled date for such distribution, it may hold such
               distribution in trust for a Holder of a Residual Certificate
               until such determination can be made. For the purposes of this
               paragraph, a "Non-U.S. Person" is (i) an individual other than a
               citizen or resident of the United States, (ii) a partnership,
               corporation or entity treated as a partnership or corporation for
               U.S. federal income tax purposes not formed under the laws of the
               United States, any state thereof or the District of Columbia
               (unless, in the case of a partnership, Treasury regulations
               provide otherwise), (iii) any estate, the income of which is not
               subject to U.S. federal income taxation, regardless of source,
               and (iv) any trust, other than a trust that a court within the
               United States is able to exercise primary supervision over the
               administration of the trust and one or more U.S. Persons have the
               authority to control all substantial decisions of the trust.

         SECTION 4.4 Allocation of Losses.

         (a)   On or prior to each Determination Date, the Master Servicer shall
               determine the amount of any Realized Loss in respect of each
               Mortgage Loan that occurred during the immediately preceding
               calendar month.

         (b)   With respect to any Distribution Date, the principal portion of
               each Realized Loss (other than any Excess Loss) shall be
               allocated in the following order of priority:

               (i)   to the Class B-6 Certificates until the Class Certificate
                     Balance thereof has been reduced to zero;

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               (ii)  to the Class B-5 Certificates until the Class Certificate
                     Balance thereof has been reduced to zero;

               (iii) to the Class B-4 Certificates until the Class Certificate
                     Balance thereof has been reduced to zero;

               (iv)  to the Class B-3 Certificates until the Class Certificate
                     Balance thereof has been reduced to zero; (v) to the Class
                     B-2 Certificates until the Class Certificate Balance
                     thereof has been reduced to zero;

               (vi)  to the Class B-1 Certificates until the Class Certificate
                     Balance thereof has been reduced to zero;

               (vii) to the Classes of Senior Certificates, pro rata, in
                     accordance with their Class Certificate Balances.

         (c)   With respect to any Distribution Date, the principal portion of
               any Excess Loss (other than Excess Bankruptcy Losses attributable
               to Debt Service Reductions) shall be allocated pro rata to each
               Class of Certificates based on their respective Class Certificate
               Balances.

         (d)   Any Realized Losses allocated to a Class of Certificates pursuant
               to Section 4.4(b) or (c) shall be allocated among the
               Certificates of such Class in proportion to their respective
               Certificate Principal Balances. Any allocation of Realized Losses
               pursuant to this paragraph (d) shall be accomplished by reducing
               the Certificate Principal Balances of the related Certificates on
               the related Distribution Date in accordance with Section 4.4(e).

         (e)   Realized Losses allocated in accordance with this Section 4.4
               shall be allocated on the Distribution Date in the month
               following the month in which such loss was incurred and, in the
               case of the principal portion thereof, after giving effect to the
               distributions made on such Distribution Date.

         (f)   On each Distribution Date, the Master Servicer shall determine
               the Subordinated Certificate Writedown Amount, if any. Any such
               Subordinated Certificate Writedown Amount shall effect, without
               duplication of any other provision in this Section 4.4 that
               provides for a reduction in the Class Certificate Balance of the
               Subordinated Certificates, a corresponding reduction in the Class
               Certificate Balance of the Subordinated Certificates, which
               reduction shall occur on such Distribution Date after giving
               effect to distributions made on such Distribution Date.

         (g)   Notwithstanding the foregoing, no such allocation of any Realized
               Loss shall be made on a Distribution Date to a Class of
               Certificates to the extent that such allocation would result in
               the reduction of the aggregate Certificate Principal Balances of
               all the Certificates as of such Distribution Date, after giving
               effect to

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          all distributions and prior allocations of Realized Losses on such
          date, to an amount less than the aggregate Scheduled Principal Balance
          of the Mortgage Loans as of the first day of the month of such
          Distribution Date, less any Deficient Valuations occurring on or prior
          to the Bankruptcy Coverage Termination Date (such limitation, the
          "Loss Allocation Limitation").

     SECTION 4.5 Reserved.

     SECTION 4.6 Monthly Statements to Certificateholders.

     (a)  Not later than each Distribution Date, the Trustee shall prepare and
          cause to be forwarded by first class mail to each Certificateholder,
          the Master Servicer, the Depositor and each Rating Agency a statement
          setting forth with respect to the related distribution and may post
          such statement on its website located at www.mbsreporting.com:

          (i)    the amount thereof allocable to principal, separately
                 identifying the aggregate amount of any Principal Prepayments
                 and Liquidation Proceeds included therein;

          (ii)   the amount thereof allocable to interest, the amount of any
                 Compensating Interest included in such distribution and any
                 remaining Net Interest Shortfalls after giving effect to such
                 distribution;

          (iii)  if the distribution to the Holders of such Class of
                 Certificates is less than the full amount that would be
                 distributable to such Holders if there were sufficient funds
                 available therefor, the amount of the shortfall and the
                 allocation thereof as between principal and interest;

          (iv)   the Class Certificate Balance of each Class of Certificates
                 after giving effect to the distribution of principal on such
                 Distribution Date;

          (v)    the Pool Principal Balance for the following Distribution Date;

          (vi)   the Senior Percentage and Subordinated Percentage for the
                 following Distribution Date;

          (vii)  the amount of the Master Servicing Fees paid to or retained by
                 the Master Servicer with respect to such Distribution Date;

          (viii) the Pass-Through Rate for each such Class of Certificates with
                 respect to such Distribution Date;

          (ix)   the amount of Advances included in the distribution on such
                 Distribution Date and the aggregate amount of Advances
                 outstanding as of the close of business on such Distribution
                 Date;

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          (x)    the number and aggregate principal amounts of Mortgage Loans
                 (A) delinquent (exclusive of Mortgage Loans in foreclosure) (1)
                 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or
                 more days and (B) in foreclosure and delinquent (1) 1 to 30
                 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more
                 days, as of the close of business on the last day of the
                 calendar month preceding such Distribution Date;

          (xi)   with respect to any Mortgage Loan that became an REO Property
                 during the preceding calendar month, the loan number and Stated
                 Principal Balance of such Mortgage Loan as of the close of
                 business on the Determination Date preceding such Distribution
                 Date and the date of acquisition thereof;

          (xii)  the total number and principal balance of any REO Properties
                 (and market value, if available) as of the close of business on
                 the Determination Date preceding such Distribution Date;

          (xiii) the Senior Prepayment Percentage for the following Distribution
                 Date;

          (xiv)  the aggregate amount of Realized Losses incurred during the
                 preceding calendar month;

          (xv)   the cumulative amount of Realized Losses applied in reduction
                 of the principal balance of each class of Certificates since
                 the Closing Date;

          (xvi)  the Special Hazard Loss Coverage Amount, the Fraud Loss
                 Coverage Amount and the Bankruptcy Loss Coverage Amount, in
                 each case as of the related Determination Date; and

          (xvii) with respect to the second Distribution Date, the number and
                 aggregate balance of any Delay Delivery Mortgage Loans not
                 delivered within thirty days after the Closing Date.

     (b)  The Trustee's responsibility for disbursing the above information to
          the Certificateholders is limited to the availability, timeliness and
          accuracy of the information provided by the Master Servicer.

     (c)  On or before the fifth Business Day following the end of each
          Prepayment Period (but in no event later than the third Business Day
          prior to the related Distribution Date), the Master Servicer shall
          deliver to the Trustee (which delivery may be by electronic data
          transmission) a report in substantially the form set forth as Schedule
          IV hereto.

     (d)  Within a reasonable period of time after the end of each calendar
          year, the Trustee shall cause to be furnished to each Person who at
          any time during the calendar year was a Certificateholder, a statement
          containing the information set forth in clauses (a)(i), (a)(ii) and
          (a)(vii) of this Section 4.6 aggregated for such calendar year or
          applicable portion thereof during which such Person was a

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     Certificateholder. Such obligation of the Trustee shall be deemed to have
     been satisfied to the extent that substantially comparable information
     shall be provided by the Trustee pursuant to any requirements of the Code
     as from time to time in effect.

SECTION 4.7 Determination of Pass-Through Rates for LIBOR Certificates.

(a)  On each Interest Determination Date so long as any LIBOR Certificates are
     outstanding, the Trustee will determine LIBOR on the basis of the British
     Bankers' Association ("BBA") "Interest Settlement Rate" for one-month
     deposits in U.S. dollars as found on Telerate page 3750 as of 11:00 a.m.
     London time on each LIBOR Determination Date. Interest Settlement Rates
     currently are based on rates quoted by sixteen BBA designated banks as
     being, in the view of such banks, the offered rate at which deposits are
     being quoted to prime banks in the London interbank market. Such Interest
     Settlement Rates are calculated by eliminating the four highest rates and
     the four lowest rates, averaging the eight remaining rates, carrying the
     result (expressed as a percentage) out to six decimal places, and rounding
     to five decimal places. "Telerate Page 3750" means the display page
     currently so designated on the Bridge Telerate Service (formerly the Dow
     Jones Markets) (or such other page as may replace that page on that service
     for the purpose of displaying comparable rates or prices.)

(b)  If LIBOR cannot be determined as provided in paragraph (A) of this Section
     4.7, the Trustee shall either (i) request each Reference Bank to inform the
     Trustee of the quotation offered by its principal London office for making
     one-month United States dollar deposits in leading banks in the London
     interbank market, as of 11:00 a.m. (London time) on such Interest
     Determination Date or (ii) in lieu of making any such request, rely on such
     Reference Bank quotations that appear at such time on the Reuters Screen
     LIBO Page (as defined in the International Swap Dealers Association Inc.
     Code of Standard Wording, Assumptions and Provisions for Swaps, 1986
     Edition), to the extent available. LIBOR for the next Interest Accrual
     Period will be established by the Trustee on each interest Determination
     Date as follows:

     (i)  If on any interest Determination Date two or more Reference Banks
          provide such offered quotations, LIBOR for the next Interest Accrual
          Period shall be the arithmetic mean of such offered quotations
          (rounding such arithmetic mean upwards if necessary to the nearest
          whole multiple of 1/32%).

     (ii) If on any Interest Determination Date only one or none of the
          Reference Banks provides such offered quotations, LIBOR for the next
          Interest Accrual Period shall be whichever is the higher of (i) LIBOR
          as determined on the previous Interest Determination Date or (ii) the
          Reserve Interest Rate. The "Reserve Interest Rate" shall be the rate
          per annum which the Trustee determines to be either (i) the arithmetic
          mean (rounded upwards if necessary to the nearest whole multiple of
          1/32%) of the one-

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           month United States dollar lending rates that New York City banks
           selected by the Trustee are quoting, on the relevant Interest
           Determination Date, to the principal London offices of at least two
           of the Reference Banks to which such quotations are, in the opinion
           of the Trustee, being so made, or (ii) in the event that the Trustee
           can determine no such arithmetic mean, the lowest one-month United
           States dollar lending rate which New York City banks selected by the
           Trustee are quoting on such Interest Determination Date to leading
           European banks.

     (iii) If on any interest Determination Date the trustee is required but is
           unable to determine the Reserve Interest Rate in the manner provided
           in paragraph (b) above, LIBOR shall be LIBOR as determined on the
           preceding Interest Determination Date.

           Until all of the LIBOR Certificates are paid in full, the Trustee
     will at all times retain at least four Reference Banks for the purpose of
     determining LIBOR with respect to each Interest Determination Date. The
     Master Servicer initially shall designate the Reference Banks. Each
     "Reference Bank" shall be a leading bank engaged in transactions in
     Eurodollar deposits in the international Eurocurrency market, shall not
     control, be controlled by, or be under common control with, the Trustee and
     shall have an established place of business in London. If any such
     Reference Bank should be unwilling or unable to act as such or if the
     Master Servicer should terminate its appointment as Reference Bank, the
     Trustee shall promptly appoint or cause to be appointed another Reference
     Bank. The Trustee shall have no liability or responsibility to any Person
     for (i) the selection of any Reference Bank for purposes of determining
     LIBOR or (ii) any inability to retain at least four Reference Banks which
     is caused by circumstances beyond its reasonable control.

(c)  The Pass-Through Rate for each Class of LIBOR Certificates for each
     Interest Accrual Period shall be determined by the Trustee on each Interest
     Determination Date so long as the LIBOR Certificates are outstanding on the
     basis of LIBOR and the respective formulae appearing in footnotes
     corresponding to the LIBOR Certificates in the table relating to the
     Certificates in the Preliminary Statement.

           In determining LIBOR, any Pass-Through Rate for the LIBOR
     Certificates, any Interest Settlement Rate, or any Reserve Interest Rate,
     the Trustee may conclusively rely and shall be protected in relying upon
     the offered quotations (whether written, oral or on the Dow Jones Markets)
     from the BBA designated banks, the Reference Banks or the New York City
     banks as to LIBOR, the Interest Settlement Rate or the Reserve Interest
     Rate, as appropriate, in effect from time to time. The Trustee shall not
     have any liability or responsibility to any Person for (i) the Trustee's
     selection of New York City banks for purposes of determining any Reserve
     Interest Rate or (ii) its inability, following a good-faith reasonable
     effort, to obtain such quotations from, the BBA designated banks, the
     Reference Banks or the New York City banks or to determine such arithmetic
     mean, all as provided for in this Section 4.7.

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               The establishment of LIBOR and each Pass-Through Rate for the
          LIBOR Certificates by the Trustee shall (in the absence of manifest
          error) be final, conclusive and binding upon each Holder of a
          Certificate and the Trustee.

                                    ARTICLE V
                                THE CERTIFICATES

     SECTION 5.1 The Certificates.

     The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount which must be in excess of the
applicable minimum denomination) and aggregate denominations per Class set forth
in the Preliminary Statement.

     Subject to Section 9.2 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such Holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) 100% of the Class Certificate Balance
of any Class of Certificates or (B) Certificates of any Class with aggregate
principal Denominations of not less than $1,000,000 or (y) by check mailed by
first class mail to such Certificateholder at the address of such Holder
appearing in the Certificate Register.

     The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of such Certificates
or did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless countersigned by the Trustee by manual signature, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their countersignature. On the
Closing Date, the Trustee shall countersign the Certificates to be issued at the
direction of the Depositor, or any affiliate thereof.

     The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of Certificates to facilitate transfers.

     SECTION 5.2 Certificate Register; Registration of Transfer and Exchange of
Certificates.

     (a)  The Trustee shall maintain, or cause to be maintained in accordance
          with the provisions of Section 5.6 hereof, a Certificate Register for
          the Trust Fund in which, subject to the provisions of subsections (b)
          and (c) below and to such reasonable regulations as it may prescribe,
          the Trustee shall provide for the

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          registration of Certificates and of transfers and exchanges of
          Certificates as herein provided. Upon surrender for registration of
          transfer of any Certificate, the Trustee shall execute and deliver, in
          the name of the designated transferee or transferees, one or more new
          Certificates of the same Class and aggregate Percentage Interest.

               At the option of a Certificateholder, Certificates may be
          exchanged for other Certificates of the same Class in authorized
          denominations and evidencing the same aggregate Percentage Interest
          upon surrender of the Certificates to be exchanged at the office or
          agency of the Trustee. Whenever any Certificates are so surrendered
          for exchange, the Trustee shall execute, authenticate, and deliver the
          Certificates which the Certificateholder making the exchange is
          entitled to receive. Every Certificate presented or surrendered for
          registration of transfer or exchange shall be accompanied by a written
          instrument of transfer in form satisfactory to the Trustee duly
          executed by the Holder thereof or his attorney duly authorized in
          writing.

               No service charge to the Certificateholders shall be made for any
          registration of transfer or exchange of Certificates, but payment of a
          sum sufficient to cover any tax or governmental charge that may be
          imposed in connection with any transfer or exchange of Certificates
          may be required.

               All Certificates surrendered for registration of transfer or
          exchange shall be cancelled and subsequently destroyed by the Trustee
          in accordance with the Trustee's customary procedures.

     (b)  No transfer of a Private Certificate shall be made unless such
          transfer is made pursuant to an effective registration statement under
          the Securities Act and any applicable state securities laws or is
          exempt from the registration requirements under said Act and such
          state securities laws. In the event that a transfer is to be made in
          reliance upon an exemption from the Securities Act and such laws, in
          order to assure compliance with the Securities Act and such laws, the
          Certificateholder desiring to effect such transfer and such
          Certificateholder's prospective transferee shall each certify to the
          Trustee in writing the facts surrounding the transfer in substantially
          the forms set forth in Exhibit I (the "Transferor Certificate") and
          (i) deliver a letter in substantially the form of either Exhibit J
          (the "Investment Letter") or Exhibit K (the "Rule 144A Letter") or
          (ii) there shall be delivered to the Trustee at the expense of the
          transferor an Opinion of Counsel that such transfer may be made
          pursuant to an exemption from the Securities Act. The Depositor shall
          provide to any Holder of a Private Certificate and any prospective
          transferee designated by any such Holder, information regarding the
          related Certificates and the Mortgage Loans and such other information
          as shall be necessary to satisfy the condition to eligibility set
          forth in Rule 144A(d)(4) for transfer of any such Certificate without
          registration thereof under the Securities Act pursuant to the
          registration exemption provided by Rule 144A. The Trustee and the
          Master Servicer shall cooperate with the Depositor in providing the
          Rule 144A information referenced in the preceding sentence,

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<PAGE>

     including providing to the Depositor such information regarding the
     Certificates, the Mortgage Loans and other matters regarding the Trust Fund
     as the Depositor shall reasonably request to meet its obligation under the
     preceding sentence. Each Holder of a Private Certificate desiring to effect
     such transfer shall, and does hereby agree to, indemnify the Trustee and
     the Depositor, the Seller and the Master Servicer against any liability
     that may result if the transfer is not so exempt or is not made in
     accordance with such federal and state laws.

          No transfer of an ERISA-Restricted Certificate shall be made unless
     the Trustee shall have received either (i) a representation from the
     transferee of such Certificate acceptable to and in form and substance
     satisfactory to the Trustee (in the event such Certificate is a Private
     Certificate, such requirement is satisfied only by the Trustee's receipt of
     a representation letter from the transferee substantially in the form of
     Exhibit J or Exhibit K), to the effect that such transferee is not an
     employee benefit plan or arrangement subject to Section 406 of ERISA or a
     plan or arrangement subject to Section 4975 of the Code, nor a person
     acting on behalf of any such plan or arrangement, nor using the assets of
     any such plan or arrangement to effect such transfer, (ii) in the case of a
     Private Certificate or a Residual Certificate, if the purchaser is an
     insurance company, a representation that the purchaser is an insurance
     company which is purchasing such Certificates with funds contained in an
     "insurance company general account" (as such term is defined in Section
     V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and
     that the purchase and holding of such Certificates are covered under PTCE
     95-60 or (iii) in the case of any such ERISA-Restricted Certificate
     presented for registration in the name of an employee benefit plan subject
     to ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
     comparable provisions of any subsequent enactments), or a trustee of any
     such plan or any other person acting on behalf of any such plan or
     arrangement, or using such plan's or arrangement's assets, an Opinion of
     Counsel satisfactory to the Trustee, which Opinion of Counsel shall not be
     an expense of either the Trustee or the Trust Fund, addressed to the
     Trustee to the effect that the purchase or holding of such ERISA-Restricted
     Certificate will not result in the assets of the Trust Fund being deemed to
     be "plan assets" and subject to the prohibited transaction provisions of
     ERISA and the Code and will not subject the Trustee to any obligation in
     addition to those expressly undertaken in this Agreement or to any
     liability. Notwithstanding anything else to the contrary herein, any
     purported transfer of an ERISA-Restricted Certificate to or on behalf of an
     employee benefit plan subject to ERISA or to the Code without the delivery
     to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
     described above shall be void and of no effect.

          To the extent permitted under applicable law (including, but not
     limited to, ERISA), the Trustee shall be under no liability to any Person
     for any registration of transfer of any ERISA-Restricted Certificate that
     is in fact not permitted by this Section 5.2(b) or for making any payments
     due on such Certificate to the Holder thereof or taking any other action
     with respect to such Holder under the

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          provisions of this Agreement so long as the transfer was registered by
          the Trustee in accordance with the foregoing requirements.

     (c)  Each Person who has or who acquires any Ownership Interest in a
          Residual Certificate shall be deemed by the acceptance or acquisition
          of such Ownership Interest to have agreed to be bound by the following
          provisions, and the rights of each Person acquiring any Ownership
          Interest in a Residual Certificate are expressly subject to the
          following provisions:

          (i)   Each Person holding or acquiring any Ownership Interest in a
                Residual Certificate shall be a Permitted Transferee and shall
                promptly notify the Trustee of any change or impending change in
                its status as a Permitted Transferee.

          (ii)  No Ownership Interest in a Residual Certificate may be
                registered on the Closing Date or thereafter transferred, and
                the Trustee shall not register the Transfer of any Residual
                Certificate unless, in addition to the certificates required to
                be delivered to the Trustee under subparagraph (b) above, the
                Trustee shall have been furnished with an affidavit (a "Transfer
                Affidavit") of the initial owner or the proposed transferee in
                the form attached hereto as Exhibit H.

          (iii) Each Person holding or acquiring any Ownership Interest in a
                Residual Certificate shall agree (A) to obtain a Transfer
                Affidavit from any other Person to whom such Person attempts to
                Transfer its Ownership Interest in a Residual Certificate, (B)
                to obtain a Transfer Affidavit from any Person for whom such
                Person is acting as nominee, trustee or agent in connection with
                any Transfer of a Residual Certificate and (C) not to Transfer
                its Ownership Interest in a Residual Certificate or to cause the
                Transfer of an Ownership Interest in a Residual Certificate to
                any other Person if it has actual knowledge that such Person is
                not a Permitted Transferee.

          (iv)  Any attempted or purported Transfer of any Ownership Interest in
                a Residual Certificate in violation of the provisions of this
                Section 5.2(c) shall be absolutely null and void and shall vest
                no rights in the purported Transferee. If any purported
                transferee shall become a Holder of a Residual Certificate in
                violation of the provisions of this Section 5.2(c), then the
                last preceding Permitted Transferee shall be restored to all
                rights as Holder thereof retroactive to the date of registration
                of Transfer of such Residual Certificate. The Trustee shall be
                under no liability to any Person for any registration of
                Transfer of a Residual Certificate that is in fact not permitted
                by Section 5.2(b) and this Section 5.2(c) or for making any
                payments due on such Certificate to the Holder thereof or taking
                any other action with respect to such Holder under the
                provisions of this Agreement so long as the Transfer was
                registered after receipt of the related Transfer Affidavit,
                Transferor Certificate and either the Rule 144A Letter or the
                Investment Letter. The Trustee shall be entitled but not
                obligated to

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               recover from any Holder of a Residual Certificate that was in
               fact not a Permitted Transferee at the time it became a Holder
               or, at such subsequent time as it became other than a Permitted
               Transferee, all payments made on such Residual Certificate at and
               after either such time. Any such payments so recovered by the
               Trustee shall be paid and delivered by the Trustee to the last
               preceding Permitted Transferee of such Certificate.

          (v)  The Depositor shall use its best efforts to make available, upon
               receipt of written request from the Trustee, all information
               necessary to compute any tax imposed under Section 860E(e) of the
               Code as a result of a Transfer of an Ownership Interest in a
               Residual Certificate to any Holder who is not a Permitted
               Transferee.

               The restrictions on Transfers of a Residual Certificate set forth
          in this Section 5.2(c) shall cease to apply (and the applicable
          portions of the legend on a Residual Certificate may be deleted) with
          respect to Transfers occurring after delivery to the Trustee of an
          Opinion of Counsel, which Opinion of Counsel shall not be an expense
          of the Trust Fund, the Trustee, the Seller or the Master Servicer, to
          the effect that the elimination of such restrictions will not cause
          any REMIC created hereunder to fail to qualify as a REMIC at any time
          that the Certificates are outstanding or result in the imposition of
          any tax on the Trust Fund, a Certificateholder or another Person. Each
          Person holding or acquiring any Ownership Interest in a Residual
          Certificate hereby consents to any amendment of this Agreement which,
          based on an Opinion of Counsel furnished to the Trustee, is reasonably
          necessary (a) to ensure that the record ownership of, or any
          beneficial interest in, a Residual Certificate is not transferred,
          directly or indirectly, to a Person that is not a Permitted Transferee
          and (b) to provide for a means to compel the Transfer of a Residual
          Certificate which is held by a Person that is not a Permitted
          Transferee to a Holder that is a Permitted Transferee.

     (d)  The preparation and delivery of all certificates and opinions referred
          to above in this Section 5.2 in connection with transfer shall be at
          the expense of the parties to such transfers.

     (e)  Except as provided below, the Book-Entry Certificates shall at all
          times remain registered in the name of the Depository or its nominee
          and at all times: (i) registration of the Certificates may not be
          transferred by the Trustee except to another Depository; (ii) the
          Depository shall maintain book-entry records with respect to the
          Certificate Owners and with respect to ownership and transfers of such
          Book-Entry Certificates; (iii) ownership and transfers of registration
          of the Book-Entry Certificates on the books of the Depository shall be
          governed by applicable rules established by the Depository; (iv) the
          Depository may collect its usual and customary fees, charges and
          expenses from its Depository Participants; (v) the Trustee shall deal
          with the Depository, Depository Participants and indirect
          participating firms as representatives of the Certificate Owners of
          the Book-Entry Certificates for purposes of exercising the rights of
          holders under this Agreement, and requests and directions for and
          votes of such representatives shall

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          not be deemed to be inconsistent if they are made with respect to
          different Certificate Owners; and (vi) the Trustee may rely and shall
          be fully protected in relying upon information furnished by the
          Depository with respect to its Depository Participants and furnished
          by the Depository Participants with respect to indirect participating
          firms and persons shown on the books of such indirect participating
          firms as direct or indirect Certificate Owners.

               All transfers by Certificate Owners of Book-Entry Certificates
          shall be made in accordance with the procedures established by the
          Depository Participant or brokerage firm representing such Certificate
          Owner. Each Depository Participant shall only transfer Book-Entry
          Certificates of Certificate Owners it represents or of brokerage firms
          for which it acts as agent in accordance with the Depository's normal
          procedures.

               If (x) (i) the Depository or the Depositor advises the Trustee in
          writing that the Depository is no longer willing or able to properly
          discharge its responsibilities as Depository, and (ii) the Trustee or
          the Depositor is unable to locate a qualified successor, (y) the
          Depositor at its option advises the Trustee in writing that it elects
          to terminate the book-entry system through the Depository or (z) after
          the occurrence of an Event of Default, Certificate Owners representing
          at least 51% of the Class Certificate Balance of the Book-Entry
          Certificates together advise the Trustee and the Depository through
          the Depository Participants in writing that the continuation of a
          book-entry system through the Depository is no longer in the best
          interests of the Certificate Owners, the Trustee shall notify all
          Certificate Owners, through the Depository, of the occurrence of any
          such event and of the availability of definitive, fully-registered
          Certificates (the "Definitive Certificates") to Certificate Owners
          requesting the same. Upon surrender to the Trustee of the related
          Class of Certificates by the Depository, accompanied by the
          instructions from the Depository for registration, the Trustee shall
          issue the Definitive Certificates. Neither the Master Servicer, the
          Depositor nor the Trustee shall be liable for any delay in delivery of
          such instruction and each may conclusively rely on, and shall be
          protected in relying on, such instructions. The Master Servicer shall
          provide the Trustee with an adequate inventory of certificates to
          facilitate the issuance and transfer of Definitive Certificates. Upon
          the issuance of Definitive Certificates all references herein to
          obligations imposed upon or to be performed by the Depository shall be
          deemed to be imposed upon and performed by the Trustee, to the extent
          applicable with respect to such Definitive Certificates and the
          Trustee shall recognize the Holders of the Definitive Certificates as
          Certificateholders hereunder; provided that the Trustee shall not by
          virtue of its assumption of such obligations become liable to any
          party for any act or failure to act of the Depository.

      SECTION 5.3  Mutilated, Destroyed, Lost or Stolen Certificates.

      If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Master Servicer and the
Trustee such security or indemnity as may be required

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by them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, countersign and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.3, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.3 shall constitute complete and indefeasible evidence
of ownership, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

     SECTION 5.4 Persons Deemed Owners.

     The Master Servicer, the Trustee and any agent of the Master Servicer or
the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Master Servicer the Trustee nor any agent of the Master Servicer or the
Trustee shall be affected by any notice to the contrary.

     SECTION 5.5 Access to List of Certificateholders' Names and Addresses.

     If three or more Certificateholders (a) request such information in writing
from the Trustee, (b) state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, and (c) provide a copy of the communication which
such Certificateholders propose to transmit, or if the Depositor or Master
Servicer shall request such information in writing from the Trustee, then the
Trustee shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Master Servicer or such Certificateholders at such
recipients' expense the most recent list of the Certificateholders of such Trust
Fund held by the Trustee, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Trustee shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.

     SECTION 5.6 Maintenance of Office or Agency.

     The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its Corporate Trust Office for such purposes. The Trustee will give
prompt written notice to the Certificateholders of any change in such location
of any such office or agency.

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                                   ARTICLE VI
                      THE DEPOSITOR AND THE MASTER SERVICER

     SECTION 6.1 Respective Liabilities of the Depositor and the Master
 Servicer.

     The Depositor and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.

     SECTION 6.2 Merger or Consolidation of the Depositor or the Master
Servicer.

     The Depositor and the Master Servicer will each keep in full effect its
existence, rights and franchises as a corporation under the laws of the United
States or under the laws of one of the states thereof and will each obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its respective duties under this Agreement.

     Any Person into which the Depositor or the Master Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Master Servicer shall be a party, or any person succeeding
to the business of the Depositor or the Master Servicer, shall be the successor
of the Depositor or the Master Servicer, as the case may be, hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Master Servicer shall be
qualified to sell mortgage loans to, and to service mortgage loans on behalf of,
FNMA or FHLMC.

     SECTION 6.3 Limitation on Liability of the Depositor, the Seller, the
Master Servicer and Others.

     None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Seller, the Master Servicer
or any such Person against any breach of representations or warranties made by
it herein or protect the Depositor, the Seller, the Master Servicer or any such
Person from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Seller, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Seller or the Master Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Seller, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Master Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to

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any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. None of the Depositor,
the Seller or the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that any of the Depositor, the Seller or the
Master Servicer may in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Seller and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account.

     SECTION 6.4 Limitation on Resignation of Master Servicer.

     The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer and receipt by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates, or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor master servicer shall
have assumed the Master Servicer's responsibilities, duties, liabilities and
obligations hereunder.

                                   ARTICLE VII
                                     DEFAULT

     SECTION 7.1 Events of Default.

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

          (i)  any failure by the Master Servicer to deposit in the Certificate
               Account or remit to the Trustee any payment required to be made
               under the terms of this Agreement, which failure shall continue
               unremedied for five days after the date upon which written notice
               of such failure shall have been given to the Master Servicer by
               the Trustee or the Depositor or to the Master Servicer and the
               Trustee by the Holders of Certificates having not less than 25%
               of the Voting Rights evidenced by the Certificates; or

          (ii) any failure by the Master Servicer to observe or perform in any
               material respect any other of the covenants or agreements on the
               part of the Master Servicer contained in this Agreement, which
               failure materially affects the rights of Certificateholders,
               which failure continues unremedied for a period of 60 days after
               the date on which written notice of such failure shall have been
               given to the Master Servicer by the Trustee or the

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               Depositor, or to the Master Servicer and the Trustee by the
               Holders of Certificates evidencing not less than 25% of the
               Voting Rights evidenced by the Certificates; provided, however,
               that the 60-day cure period shall not apply to the initial
               delivery of the Mortgage File for Delay Delivery Mortgage Loans
               nor the failure to substitute or repurchase in lieu thereof; or

        (iii)  a decree or order of a court or agency or supervisory authority
               having jurisdiction in the premises for the appointment of a
               receiver or liquidator in any insolvency, readjustment of debt,
               marshalling of assets and liabilities or similar proceedings, or
               for the winding-up or liquidation of its affairs, shall have been
               entered against the Master Servicer and such decree or order
               shall have remained in force undischarged or unstayed for a
               period of 60 consecutive days; or

       (iv)    the Master Servicer shall consent to the appointment of a
               receiver or liquidator in any insolvency, readjustment of debt,
               marshalling of assets and liabilities or similar proceedings of
               or relating to the Master Servicer or all or substantially all of
               the property; or

        (v)    the Master Servicer shall admit in writing its inability to pay
               its debts generally as they become due, file a petition to take
               advantage of, or commence a voluntary case under, any applicable
               insolvency or reorganization statute, make an assignment for the
               benefit of its creditors, or voluntarily suspend payment of its
               obligations.

     If an Event of Default described in clauses (i) to (v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee may, or at the direction of
the Holders of Certificates evidencing not less than 66 2/3% of the Voting
Rights evidenced by the Certificates, the Trustee shall by notice in writing to
the Master Servicer (with a copy to each Rating Agency), terminate all of the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On and after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee. The Trustee, in its capacity as successor to the Master
Servicer, shall thereupon make any Advance which the Master Servicer failed to
make subject to Section 4.1 hereof. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Master Servicer to pay amounts owed pursuant
to Article VIII. The Master Servicer agrees to cooperate with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee of all
cash amounts which shall at the time be credited to the Certificate Account, or
thereafter be received with respect to the

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Mortgage Loans. All expenses incurred in the transferring of the servicing
duties from the Master Servicer to a Successor Servicer shall be paid by the
Master Servicer, and if not paid by the Master Servicer, shall be paid from
amounts on deposit in the Certificate Account.

     Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.8(a)(i)
through (viii),and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.

     SECTION 7.2 Trustee to Act; Appointment of Successor.

     On and after the time the Master Servicer receives a notice of termination
pursuant to Section 7.1 hereof, the Trustee shall, subject to and to the extent
provided in Section 3.4, be the successor to the Master Servicer in its capacity
as master servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make Advances
pursuant to Section 4.1. As compensation therefor, the Trustee shall be entitled
to all funds relating to the Mortgage Loans that the Master Servicer would have
been entitled to charge to the Certificate Account or Distribution Account if
the Master Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the Master Servicer in
accordance with Section 7.1 hereof, the Trustee may, if it shall be unwilling to
so act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.1 hereof or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any successor to the Master Servicer shall be an institution which is a FNMA and
FHLMC approved seller/servicer in good standing, which has a net worth of at
least $10,000,000, and which is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, which contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than liabilities of the Master Servicer under Section 6.3
hereof incurred prior to termination of the Master Servicer under Section 7.1),
with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to the Master Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.4 hereof, act in such capacity as provided above. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Master Servicing Fee permitted the Master Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this

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Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.

     Any successor to the Master Servicer as master servicer shall give notice
to the Mortgagors of such change of servicer and shall, during the term of its
service as master servicer maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.5.

     SECTION 7.3 Notification to Certificateholders.

     (a)  Upon any termination of or appointment of a successor to the Master
          Servicer, the Trustee shall give prompt written notice thereof to
          Certificateholders and to each Rating Agency.

     (b)  Within 60 days after the occurrence of any Event of Default, the
          Trustee shall transmit by mail to all Certificateholders notice of
          each such Event of Default hereunder known to the Trustee, unless such
          Event of Default shall have been cured or waived.

                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

     SECTION 8.1 Duties of Trustee.

     The Trustee, prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge and after the curing of
all Events of Default that may have occurred, shall undertake to perform such
duties and only such duties as are specifically set forth in this Agreement. In
case an Event of Default of which a Responsible Officer of the Trustee has
actual knowledge has occurred and remains uncured, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.

     The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Trustee shall notify the Certificateholders of such
instrument in the event that the Trustee, after so requesting, does not receive
a satisfactorily corrected instrument.

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     No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:

          (i)   unless an Event of Default of which a Responsible Officer of the
                Trustee has actual knowledge shall have occurred and be
                continuing, the duties and obligations of the Trustee shall be
                determined solely by the express provisions of this Agreement,
                the Trustee shall not be liable except for the performance of
                such duties and obligations as are specifically set forth in
                this Agreement, no implied covenants or obligations shall be
                read into this Agreement against the Trustee and the Trustee may
                conclusively rely, as to the truth of the statements and the
                correctness of the opinions expressed therein, upon any
                certificates or opinions furnished to the Trustee and conforming
                to the requirements of this Agreement which it believed in good
                faith to be genuine and to have been duly executed by the proper
                authorities respecting any matters arising hereunder;

          (ii)  the Trustee shall not be liable for an error of judgment made in
                good faith by a Responsible Officer or Responsible Officers of
                the Trustee, unless it shall be finally proven that the Trustee
                was negligent in ascertaining the pertinent facts;

          (iii) the Trustee shall not be liable with respect to any action
                taken, suffered or omitted to be taken by it in good faith in
                accordance with the direction of Holders of Certificates
                evidencing not less than 25% of the Voting Rights of
                Certificates relating to the time, method and place of
                conducting any proceeding for any remedy available to the
                Trustee, or exercising any trust or power conferred upon the
                Trustee under this Agreement;

          (iv)  the Trustee shall not be required to expend or risk its own
                funds or otherwise incur financial liability in the performance
                of any of its duties hereunder or the exercise of any of its
                rights or powers if there is reasonable ground for believing
                that the repayment of such funds or adequate indemnity against
                such risk or liability is not assured to it, and none of the
                provisions contained in this Agreement shall in any event
                require the Trustee to perform, or be responsible for the manner
                of performance of, any of the obligations of the Master Servicer
                under this Agreement except during such time, if any, as the
                Trustee shall be the successor to, and be vested with the
                rights, duties, powers and privileges of, the Master Servicer;
                and

          (v)   without limiting the generality of this Section 8.1, the Trustee
                shall have no duty (A) to see to any recording, filing, or
                depositing of this Agreement or any agreement referred to herein
                or any financing statement or continuation statement evidencing
                a security interest, or to see to the maintenance of any such
                recording or filing or deposit or to any rerecording, refiling
                or redepositing of any thereof, (B) to see to any

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                insurance, (C) to see to the payment or discharge of any tax,
                assessment, or other governmental charge or any lien or
                encumbrance of any kind owing with respect to, assessed or
                leviedagainst, any part of the Trust Fund other than from funds
                available in the Distribution Account (D) to confirm or verify
                the contents of any reports or certificates of the Servicer
                delivered to the Trustee pursuant to this Agreement believed by
                the Trustee to be genuine and to have been signed or presented
                by the proper party or parties.

     SECTION 8.2 Certain Matters Affecting the Trustee.

     Except as otherwise provided in Section 8.1:

          (i)   the Trustee may request and rely upon and shall be protected in
                acting or refraining from acting upon any resolution, Officers'
                Certificate, certificate of auditors or any other certificate,
                statement, instrument, opinion, report, notice, request,
                consent, order, appraisal, bond or other paper or document
                believed by it to be genuine and to have been signed or
                presented by the proper party or parties and the Trustee shall
                have no responsibility to ascertain or confirm the genuineness
                of any signature of any such party or parties;

          (ii)  the Trustee may consult with counsel, financial advisers or
                accountants and the advice of any such counsel, financial
                advisers or accountants and any Opinion of Counsel shall be full
                and complete authorization and protection in respect of any
                action taken or suffered or omitted by it hereunder in good
                faith and in accordance with such Opinion of Counsel;

          (iii) the 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
                conferred upon it by this Agreement;

          (iv)  the Trustee shall not be bound to make any investigation into
                the facts or matters stated in any resolution, certificate,
                statement, instrument, opinion, report, notice, request,
                consent, order, approval, bond or other paper or document,
                unless requested in writing so to do by Holders of Certificates
                evidencing not less than 25% of the Voting Rights allocated to
                each Class of Certificates; provided, however, that if the
                payment within a reasonable time to the Trustee of the costs,
                expenses or liabilities likely to be incurred by it in the
                making of such investigation is, in the opinion of the Trustee,
                not assured to the Trustee by the security afforded to it by the
                terms of this Agreement, the Trustee may require indemnity
                satisfactory to the Trustee against such cost, expense or
                liability as a condition to taking any such action. The
                reasonable expense of every such examination shall be paid by
                the Master Servicer or, if paid by the Trustee, shall be repaid
                by the Master Servicer upon demand from the Servicer's own
                funds.

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          (v)    the Trustee may execute any of the trusts or powers hereunder
                 or perform any duties hereunder either directly or by or
                 through agents, accountants or attorneys and the Trustee shall
                 not be responsible for any misconduct or negligence on the part
                 of such agent, accountant or attorney appointed by the Trustee
                 with due care;

          (vi)   the Trustee shall not be required to risk or expend its own
                 funds or otherwise incur any financial liability in the
                 performance of any of its duties or in the exercise of any of
                 its rights or powers hereunder if it shall have reasonable
                 grounds for believing that repayment of such funds or adequate
                 indemnity against such risk or liability is not assured to it;

          (vii)  the Trustee shall not be liable for any loss on any investment
                 of funds pursuant to this Agreement (other than as issuer of
                 the investment security);

          (viii) the Trustee shall not be deemed to have knowledge of an Event
                 of Default until a Responsible Officer of the Trustee shall
                 have received written notice thereof and in the absence of such
                 notice, the Trustee may conclusively assume that there is no
                 Event of Default;

          (ix)   the Trustee shall be under no obligation to exercise any of the
                 trusts, rights or powers vested in it by this Agreement or to
                 institute, conduct or defend any litigation hereunder or in
                 relation hereto at the request, order or direction of any of
                 the Certificateholders, pursuant to the provisions of this
                 Agreement, unless such Certificateholders shall have offered to
                 the Trustee reasonable security or indemnity satisfactory to
                 the Trustee against the costs, expenses and liabilities which
                 may be incurred therein or thereby;

          (x)    the right of the Trustee to perform any discretionary act
                 enumerated in this Agreement shall not be construed as a duty,
                 and the Trustee shall not be answerable for other than its
                 negligence or willful misconduct in the performance of such
                 act; and

          (xi)   the Trustee shall not be required to give any bond or surety in
                 respect of the execution of the Trust Fund created hereby or
                 the powers granted hereunder.

     SECTION 8.3 Trustee Not Liable for Certificates or Mortgage Loans.

     The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor or the Seller, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and counter-signature of the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor or
the Master Servicer of any funds

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paid to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Certificate Account by the Depositor or the
Master Servicer.

     SECTION 8.4 Trustee May Own Certificates.

     The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it were not the
Trustee.

     SECTION 8.5 Trustee's Fees and Expenses.

     The Trustee, as compensation for its activities prior to making the
distributions pursuant to Section 4.2 hereunder, shall be entitled to withdraw
from the Distribution Account on each Distribution Date an amount equal to the
Trustee Fee for such Distribution Date. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Master Servicer and
held harmless against any loss, liability or expense (including reasonable
attorney's fees) (i) incurred in connection with any claim or legal action
relating to (a) this Agreement, (b) the Certificates or (c) in connection with
the performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Trustee's duties hereunder or
incurred by reason of any action of the Trustee taken at the direction of the
Certificateholders and (ii) resulting from any error in any tax or information
return prepared by the Master Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, the Master Servicer covenants and
agrees, except as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any such expense, disbursement or advance as may arise
from the Trustee's negligence, bad faith or willful misconduct, to pay or
reimburse the Trustee, for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage such persons to perform acts
or services hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive Certificates. Except as otherwise provided herein, the
Trustee shall not be entitled to payment or reimbursement for any routine
ongoing expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Registrar, Tax Matters Person or Paying Agent hereunder or for any
other expenses.

     SECTION 8.6 Eligibility Requirements for Trustee.

     The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating which would
not cause either of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or

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examining authority, then for the purposes of this Section 8.6 the combined
capital and surplus of such corporation or association shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.6, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.7 hereof.
The entity serving as Trustee may have normal banking and trust relationships
with the Depositor and its affiliates or the Master Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Master
Servicer other than the Trustee in its role as successor to the Master Servicer.

     SECTION 8.7 Resignation and Removal of Trustee.

     The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice of resignation to the Depositor and the Master
Servicer and each Rating Agency not less than 60 days before the date specified
in such notice when, subject to Section 8.8, such resignation is to take effect,
and acceptance by a successor trustee in accordance with Section 8.8 meeting the
qualifications set forth in Section 8.6. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.

     If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.6 hereof and shall fail to resign after written
request thereto by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Master Servicer and one copy to the
successor trustee.

     The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor Trustee to the Master Servicer, one complete set
to the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to each Rating Agency by the
Successor Trustee.

     Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.7 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.8 hereof.

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     SECTION 8.8 Successor Trustee.

     Any successor trustee appointed as provided in Section 8.7 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and obligations.

     No successor trustee shall accept appointment as provided in this Section
8.8 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.6 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.

     Upon acceptance of appointment by a successor trustee as provided in this
Section 8.8, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

     SECTION 8.9 Merger or Consolidation of Trustee.

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
the provisions of Section 8.6 hereof without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.

     SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.

     Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in

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the case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.6 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.8.

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

          (i)   To the extent necessary to effectuate the purposes of this
                Section 8.10, all rights, powers, duties and obligations
                conferred or imposed upon the Trustee shall be conferred or
                imposed upon and exercised or performed by the Trustee and such
                separate trustee or co-trustee jointly (it being understood that
                such separate trustee or co-trustee is not authorized to act
                separately without the Trustee joining in such act), except to
                the extent that under any law of any jurisdiction in which any
                particular act or acts are to be performed (whether as Trustee
                hereunder or as successor to the Master Servicer hereunder), the
                Trustee shall be incompetent or unqualified to perform such act
                or acts, in which event such rights, powers, duties and
                obligations (including the holding of title to the applicable
                Trust Fund or any portion thereof in any such jurisdiction)
                shall be exercised and performed singly by such separate trustee
                or co-trustee, but solely at the direction of the Trustee;

          (ii)  No trustee hereunder shall be held personally liable by reason
                of any act or omission of any other trustee hereunder and such
                appointment shall not, and shall not be deemed to, constitute
                any such separate trustee or co-trustee as agent of the Trustee;

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

          (iv)  The Master Servicer, and not the Trustee, shall be liable for
                the payment of reasonable compensation, reimbursement and
                indemnification to any such separate trustee or co-trustee.

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

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

     SECTION 8.11 Tax Matters.

     It is intended that the assets with respect to which each REMIC election is
to be made, as set forth in the preliminary statement shall constitute, and that
the conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of any such REMIC and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to any such REMIC, containing such
information and at the times and in the manner as may be required by the Code or
state or local tax laws, regulations, or rules, and furnish or cause to be
furnished to Certificateholders the schedules, statements or information at such
times and in such manner as may be required thereby; (b) within thirty days of
the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code; (c) make or
cause to be made elections that such assets be treated as a REMIC on the federal
tax return for its first taxable year (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the prepayment
assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax); (f) to the extent that they are under its control conduct matters relating
to such assets at all times that any Certificates are outstanding so as to
maintain the status as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status; (h) pay, from the sources specified in the last
paragraph of this Section 8.11, the amount of any federal or state tax,
including prohibited transaction taxes as described below, imposed on any such
REMIC prior to its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall

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not prevent the Trustee from withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings); (i) ensure that federal, state or
local income tax or information returns shall be signed by the Trustee or such
other person as may be required to sign such returns by the Code or state or
local laws, regulations or rules; (j) maintain records relating to any such
REMIC, including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets determined at
such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent any such REMIC in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year of
any such REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any such
REMIC, and otherwise act on behalf of any such REMIC in relation to any tax
matter or controversy involving it.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.

         In the event that any tax is imposed on "prohibited transactions" of
any REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of any REMIC as defined in Section 860G(c) of the Code, on
any contribution to any REMIC after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement which breach was caused by its negligence or willful misconduct,
(ii) the Master Servicer, in the case of any such minimum tax, or if such tax
arises out of or results from a breach by the Master Servicer or Seller of any
of their obligations under this Agreement, (iii) the Seller, if any such tax
arises out of or results from the Seller's obligation to repurchase a Mortgage
Loan pursuant to Section 2.2 or 2.3 or (iv) in all other cases, or in the event
that the Trustee, the Master Servicer or the Seller fails to honor its
obligations under the preceding clauses (i), (ii) or (iii), any such tax will be
paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 3.8(b).

SECTION 8.12 Periodic Filings.

         Pursuant to written instructions from the Depositor, the Trustee shall
prepare, execute and file all periodic reports required under the Securities
Exchange Act of 1934 in conformity with the terms of the "no-action" relief
granted by the SEC to issuers of asset-backed securities such

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as the Certificates. In connection with the preparation and filing of such
periodic reports, the Depositor and the Master Servicer shall timely provide to
the Trustee all material information available to them which is required to be
included in such reports and not known to them to be in the possession of the
Trustee and such other information as the Trustee reasonably may request from
either of them and otherwise reasonably shall cooperate with the Trustee. The
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence or willful misconduct.

                                   ARTICLE IX
                                   TERMINATION

         SECTION 9.1 Termination upon Liquidation or Purchase of all Mortgage
         Loans.

         Subject to Section 9.3, the obligations and responsibilities of the
Depositor, the Master Servicer and the Trustee created hereby with respect to
the Trust Fund shall terminate upon the earlier of (a) the purchase by the
Master Servicer of all Mortgage Loans (and REO Properties) remaining in the
Trust Fund at the price equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan (other than a Mortgage Loan that has been
foreclosed and subject to clause (ii)) plus one month's accrued interest thereon
at the applicable Adjusted Mortgage Rate and (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Master
Servicer at the expense of the Master Servicer and (y) the Stated Principal
Balance of each Mortgage Loan related to any REO Property, in each case plus
accrued and unpaid interest thereon at the applicable Adjusted Mortgage Rate and
(b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the survivor of the descendants of
Joseph P. Kennedy, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof, and (ii) the Latest Possible Maturity Date.
The right to purchase all Mortgage Loans and REO Properties pursuant to clause
(a) above shall be conditioned upon the Pool Principal Balance, at the time of
any such repurchase, aggregating less than ten percent of the aggregate Cut-off
Date Principal Balance of the Mortgage Loans.

         SECTION 9.2 Final Distribution on the Certificates.

         If on any Determination Date, the Master Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Certificate Account, the Master Servicer shall
direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.1, at least 20 days prior to the date notice
is to be mailed to the affected Certificateholders, the Master Servicer shall
notify the Depositor and the Trustee of the date the Master Servicer intends to
terminate the Trust Fund and of the applicable repurchase price of the Mortgage
Loans and REO Properties.

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         Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day and no later than the 15th day of the month next preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Master Servicer will give such notice to each Rating Agency at
the time such notice is given to Certificateholders.

         In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Master Servicer the Mortgage Files for the Mortgage
Loans.

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in the order
set forth in Section 4.2 hereof, on the final Distribution Date, in the case of
the Certificateholders, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount equal to (i) as
to each Class of Regular Certificates, the Class Certificate Balance thereof
plus accrued interest thereon (or on their Notional Principal Amount, if
applicable) in the case of an interest bearing Certificate, and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Holders of each of the
Class A-RU and Class A-RL Certificates shall be entitled to all unclaimed funds
and other assets of the Trust Fund, held for distribution to such
Certificateholders, which remain subject hereto.

         SECTION 9.3 Additional Termination Requirements.

         (a)   In the event the Master Servicer exercises its purchase option as
               provided in Section 9.1, the Trust Fund and each REMIC created
               hereunder shall be

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               terminated in accordance with the following additional
               requirements, unless the Trustee has been supplied with an
               Opinion of Counsel, at the expense of the Master Servicer, to the
               effect that the failure to comply with the requirements of this
               Section 9.3 will not (i) result in the imposition of taxes on
               "prohibited transactions" on the REMIC as defined in Section 860F
               of the Code, or (ii) cause any REMIC to fail to qualify as a
               REMIC at any time that any Certificates are outstanding:

                         (1)  Within 90 days prior to the final Distribution
                    Date set forth in the notice given by the Master Servicer
                    under Section 9.2, the Master Servicer shall prepare and the
                    Trustee, at the expense of the "tax matters person," shall
                    adopt a plan of complete liquidation within the meaning of
                    Section 860F(a)(4) of the Code for each REMIC created
                    hereunder which, as evidenced by an Opinion of Counsel
                    addressed to the Trustee (which opinion shall not be an
                    expense of the Trustee or the Tax Matters Person), meets the
                    requirements of a qualified liquidation; and

                         (2)  Within 90 days after the time of adoption of such
                    plans of complete liquidation, the Trustee shall sell all of
                    the assets of the Trust Fund to the Master Servicer for cash
                    in accordance with Section 9.1.

         (b)   The Trustee as agent for any REMIC established hereunder hereby
               agrees to adopt and sign such a plan of complete liquidation upon
               the written request of the Master Servicer, and the receipt of
               the Opinion of Counsel referred to in Section 9.3(a)(1) and to
               take such other action in connection therewith as may be
               reasonably requested by the Master Servicer.

         (c)   By their acceptance of the Certificates, the Holders thereof
               hereby authorize the Master Servicer to prepare and the Trustee
               to adopt and sign plans of complete liquidation.

                                   ARTICLE X
                                   [RESERVED]

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

         SECTION 11.1 Amendment.

         This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller or the Master Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund),

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adversely affect in any material respect the interests of any Certificateholder;
provided, however, that the amendment shall not be deemed to adversely affect in
any material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor and the Master Servicer also may at any time and from time to time
amend this Agreement without the consent of the Certificateholders to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or helpful to (i) maintain the qualification of the REMIC as a REMIC under the
Code, (ii) avoid or minimize the risk of the imposition of any tax on the REMIC
pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.

         This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of a
Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating 66%, or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all such
Certificates then outstanding.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall not be an expense of the
Trustee or the Trust Fund, to the effect that such amendment will not cause the
imposition of any tax on the REMIC or the Certificateholders or cause the REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

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         Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 11.1.

         SECTION 11.2 Recordation of Agreement; Counterparts.

         This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense, but only
upon direction a majority of the Certificateholders to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed (by
facsimile or otherwise) simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.

         SECTION 11.3 Governing Law.

         THIS AGREEMENT (OTHER THAN SECTION 2.1 HEREOF) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTION 2.1
OF THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDER UNDER SUCH SECTION BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.

         SECTION 11.4 Intention of Parties.

         (a)   It is the express intent of the parties hereto that the
               conveyance of the Mortgage Loans by the Seller to the Depositor
               be, and be construed as, absolute sales thereof. It is, further,
               not the intention of the parties that such conveyances be deemed
               a pledge thereof by the Seller to the Depositor. However, in the
               event that, notwithstanding the intent of the parties, the
               Mortgage Loans are held to be the property of the Seller, or if
               for any other reason this Agreement is held or deemed to create a
               security interest in such assets, then (i) this Agreement shall
               be deemed to be a security agreement within the meaning of the
               Uniform

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               Commercial Code of the State of New York and (ii) the conveyance
               of the Mortgage Loans provided for in this Agreement shall be
               deemed to be an assignment and a grant by the Seller to the
               Depositor, for the benefit of the Certificateholders, of a
               security interest in all of the Mortgage Loans, whether now owned
               or hereafter acquired.

               The Seller, for the benefit of the Certificateholders, shall, to
               the extent consistent with this Agreement, take such actions as
               may be necessary to ensure that, if this Agreement were deemed to
               create a security interest in the Mortgage Loans, such security
               interest would be deemed to be a perfected security interest of
               first priority under applicable law and will be maintained as
               such throughout the term of the Agreement. The Seller shall
               arrange for filing any Uniform Commercial Code continuation
               statements in connection with any security interest granted or
               assigned to the Depositor for the benefit of the
               Certificateholders.

         (b)   It is the express intent of the parties hereto that the
               conveyance of the Trust Fund by the Depositor to the Trustee be,
               and be construed as, absolute sales thereof to the Trustee. It
               is, further, not the intention of the parties that such
               conveyances be deemed a pledge thereof by the Depositor to the
               Trustee. However, in the event that, notwithstanding the intent
               of the parties, such assets are held to be the property of the
               Depositor, or if for any other reason this Agreement is held or
               deemed to create a security interest in such assets, then (i)
               this Agreement shall be deemed to be a security agreement within
               the meaning of the Uniform Commercial Code of the State of New
               York and (ii) the conveyance provided for in this Agreement shall
               be deemed to be an assignment and a grant by the Depositor to the
               Trustee, for the benefit of the Certificateholders, of a security
               interest in all of the assets that constitute the Trust Fund,
               whether now owned or hereafter acquired.

                    The Depositor, for the benefit of the Certificateholders,
               shall, to the extent consistent with this Agreement, take such
               actions as may be necessary to ensure that, if this Agreement
               were deemed to create a security interest in the Trust Fund, such
               security interest would be deemed to be a perfected security
               interest of first priority under applicable law and will be
               maintained as such throughout the term of the Agreement. The
               Depositor shall arrange for filing any Uniform Commercial Code
               continuation statements in connection with any security interest
               granted or assigned to the Trustee for the benefit of the
               Certificateholders.

         SECTION 11.5 Notices.

         (a)   The Trustee shall use its best efforts to promptly provide notice
               to each Rating Agency with respect to each of the following of
               which it has actual knowledge:

                    (1)  Any material change or amendment to this Agreement;

                    (2)  The occurrence of any Event of Default that has not
                         been cured;

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                    (3)   The resignation or termination of the Master Servicer
                          or the Trustee and the appointment of any successor;

                    (4)   The repurchase or substitution of Mortgage Loans
                          pursuant to Section 2.3; and

                    (5)   The final payment to Certificateholders.

                    (6)   Any rating action involving the long-term credit
                          rating of the Master Servicer, which notice shall be
                          made by first-class mail within two Business Days
                          after the Trustee gains actual knowledge thereof.

                    In addition, the Trustee shall promptly furnish to each
               Rating Agency copies of the following:

                    (i)   Each report to Certificateholders described in
                          Section 4.6;

                    (ii)  Each annual statement as to compliance described in
                          Section 3.16;

                    (iii) Each annual independent public accountants' servicing
                          report described in Section 3.17; and

                    (iv)  Any notice of a purchase of a Mortgage Loan pursuant
                          to Section 2.2, 2.3 or 3.11.

         (b)   All directions, demands, authorizations, consents, waivers,
               communications and notices hereunder shall be in writing and
               shall be deemed to have been duly given when delivered to by
               first class mail, facsimile or courier (a) in the case of the
               Depositor, First Horizon Asset Securities Inc., 4000 Horizon Way,
               Irving, Texas 75063, Attention: Wade Walker; (b) in the case of
               the Master Servicer, First Horizon Home Loan Corporation, 4000
               Horizon Way, Irving, Texas 75063, Attention: Wade Walker or such
               other address as may be hereafter furnished to the Depositor and
               the Trustee by the Master Servicer in writing; (c) in the case of
               the Trustee, The Bank of New York, 101 Barclay Street, 8W, New
               York, New York 10286, Attention: Karon Greene, or such other
               address as the Trustee may hereafter furnish to the Depositor or
               Master Servicer; and (d) in the case of the Rating Agencies, the
               address specified therefor in the definition corresponding to the
               name of such Rating Agency. Notices to Certificateholders shall
               be deemed given when mailed, first class postage prepaid, to
               their respective addresses appearing in the Certificate Register.

         SECTION 11.6 Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms

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of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement or of the Certificates or the rights of
the Holders thereof.

         SECTION 11.7 Assignment.

         Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.2, this Agreement may not be assigned by the Master
Servicer without the prior written consent of the Trustee and Depositor.

         SECTION 11.8 Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.8, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

         SECTION 11.9 Inspection and Audit Rights.

         The Master Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Master

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Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Master Servicer relating to the Mortgage Loans,
to make copies and extracts therefrom, to cause such books to be audited by
independent certified public accountants selected by the Depositor or the
Trustee and to discuss its affairs, finances and accounts relating to the
Mortgage Loans with its officers, employees and independent public accountants
(and by this provision the Master Servicer hereby authorizes said accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 11.9 shall be borne by the party requesting such
inspection; all other such expenses shall be borne by the Master Servicer or the
related Subservicer.

         SECTION 11.10     Certificates Nonassessable and Fully Paid.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

         SECTION 11.11     Limitations on Actions; No Proceedings.

         (a)   Other than pursuant to this Agreement, or in connection with or
               incidental to the provisions or purposes of this Agreement, the
               trust created hereunder shall not (i) issue debt or otherwise
               borrow money, (ii) merge or consolidate with any other entity
               reorganize, liquidate or transfer all or substantially all of its
               assets to any other entity, or (iii) otherwise engage in any
               activity or exercise any power not provided for in this
               Agreement.

         (b)   Notwithstanding any prior termination of this Agreement, the
               Trustee, the Master Servicer and the Depositor shall not, prior
               to the date which is one year and one day after the termination
               of this Agreement, acquiesce, petition or otherwise invoke or
               cause any Person to invoke the process of any court or government
               authority for the purpose of commencing or sustaining a case
               against the Depositor or the Trust Fund under any federal or
               state bankruptcy, insolvency or other similar law or appointing a
               receiver, liquidator, assignee, trustee, custodian, sequestrator
               or other similar official of the Depositor or the Trust Fund or
               any substantial part of their respective property, or ordering
               the winding up or liquidation of the affairs of the Depositor or
               the Trust Fund.

                                   * * * * * *

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         IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the
Master Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.

                              FIRST HORIZON ASSET SECURITIES INC.,
                              as Depositor

                              By:_______________________________________________
                                   Wade Walker
                                   Senior Vice President - Asset Securitization

                              THE BANK OF NEW YORK,
                              not in its individual capacity, but solely as
                              Trustee

                              By:_______________________________________________
                                   Karon Greene
                                   Assistant Treasurer

                              FIRST HORIZON HOME LOAN
                              CORPORATION, as Seller and Master Servicer

                              By:_______________________________________________
                                   Wade Walker
                                   Senior Vice President - Asset Securitization

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