-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UTOmDWPbPC3HCe5U9rfOtM8SOkk4+ZrON3JoL6OAmUc2IO/Li9jbRVp/GviWypBX thm6W3onp9sV77Ly9WolWQ== 0000882377-04-001282.txt : 20040625 0000882377-04-001282.hdr.sgml : 20040625 20040625153838 ACCESSION NUMBER: 0000882377-04-001282 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 19 CONFORMED PERIOD OF REPORT: 20040610 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: National Collegiate Student Loan Trust 2004-1 CENTRAL INDEX KEY: 0001290641 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-113336-01 FILM NUMBER: 04882136 BUSINESS ADDRESS: STREET 1: 800 BOYLSTON STREET 34TH FLOOR CITY: BOSTON STATE: MA ZIP: 02199-8157 BUSINESS PHONE: (800) 895-4283 8-K 1 ncf_8k.txt THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 - ------------------------------------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) June 10, 2004 ------------- The National Collegiate Student Loan Trust 2004-1 (Exact Name of Registrant as Specified in Charter)
DELAWARE 333-113336-01 43-2052405 -------- ------------- ---------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 800 Boylston Street, 34th Floor, Boston, MA 02199-8157 ------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (800) 895-4283 -------------- - ------------------------------------------------------------------------------ Item 2. Acquisition or Disposition of Assets. ------------------------------------ For a description of the Notes, refer to the Indenture. For a description of the Student Loans, refer to the Deposit and Sale Agreement. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. --------------------------------------------------------- (a) Not applicable (b) Not applicable (c) Exhibits:
EXHIBIT NO. DESCRIPTION ----------- ----------- 1.1 Underwriting Agreement, dated as of June 7, 2004, among The National Collegiate Student Loan Trust 2004-1, UBS Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs & Co. and The First Marblehead Corporation EXHIBIT NO. DESCRIPTION ----------- ----------- 4.1 Indenture, dated as of June 1, 2004, between The National Collegiate Student Loan Trust 2004-1 and U.S. Bank National Association EXHIBIT NO. DESCRIPTION ----------- ----------- 5.1 Opinion of Thacher Proffitt & Wood LLP, dated as of June 10, 2004, with respect to legality EXHIBIT NO. DESCRIPTION ----------- ----------- 8.1 Opinion of Thacher Proffitt & Wood LLP, dated as of June 10, 2004, regarding tax matters EXHIBIT NO. DESCRIPTION ----------- ----------- 10.1* Note Purchase Agreement, dated as of May 1, 2002, between Bank One, N.A. and The First Marblehead Corporation, as amended EXHIBIT NO. DESCRIPTION ----------- ----------- 10.2* Note Purchase Agreement, dated as of April 30, 2001, between Bank of America, N.A. and The First Marblehead Corporation, as amended EXHIBIT NO. DESCRIPTION ----------- ----------- 10.3* Note Purchase Agreement, dated as of May 15, 2002, between Charter One, N.A. and The First Marblehead Corporation, as amended EXHIBIT NO. DESCRIPTION ----------- ----------- 10.4 Deposit and Sale Agreement, dated as of June 10, 2004, between The National Collegiate Funding LLC and The National Collegiate Student Loan Trust 2004-1 EXHIBIT NO. DESCRIPTION ----------- ----------- 10.5 * + Guaranty Agreement between The Education Resources Institute, Inc. and Bank One, N.A. dated May 13, 2002, as amended EXHIBIT NO. DESCRIPTION ----------- ----------- 10.6 * + Guaranty Agreement between The Education Resources Institute, Inc. and Bank of America, N.A., dated April 30, 2001, as amended EXHIBIT NO. DESCRIPTION ----------- ----------- 10.7 * + Guaranty Agreement between The Education Resources Institute, Inc. and Charter One Bank, N.A., dated as of May 15, 2002, as amended EXHIBIT NO. DESCRIPTION ----------- ----------- 10.8* Alternative Servicing Agreement, dated as of October 16, 2001, between the Pennsylvania Higher Education Assistance Agency and The First Marblehead Corporation EXHIBIT NO. DESCRIPTION ----------- ----------- 10.9 Trust Agreement, dated as of June 10, 2004, among Wachovia Trust Company, National Association, The National Collegiate Funding LLC and The Education Resources Institute, Inc. EXHIBIT NO. DESCRIPTION ----------- ----------- 10.10 Administration Agreement, dated as of June 10, 2004, among The National Collegiate Student Loan Trust 2004-1, Wachovia Trust Company, National Association, U.S. Bank National Association and First Marblehead Data Services, Inc. EXHIBIT NO. DESCRIPTION ----------- ----------- 10.11 Back-up Note Administration Agreement, dated as of June 10, 2004, among The National Collegiate Student Loan Trust 2004-1, First Marblehead Data Services, Inc., Wachovia Trust Company, National Association and U.S. Bank National Association EXHIBIT NO. DESCRIPTION ----------- ----------- 10.12 Structuring Advisory Agreement, dated as of June 10, 2004, between The National Collegiate Student Loan Trust 2004-1 and The First Marblehead Corporation EXHIBIT NO. DESCRIPTION ----------- ----------- 10.13 Deposit and Security Agreement, dated as of June 10, 2004, among The Education Resources Institute, Inc., The National Collegiate Student Loan Trust 2004-1 and First Marblehead Data Services, Inc. EXHIBIT NO. DESCRIPTION ----------- ----------- 10.14 + Pool Supplement, dated as of June 10, 2004, among The First Marblehead Corporation, The National Collegiate Funding LLC and Bank One, N.A. EXHIBIT NO. DESCRIPTION ----------- ----------- 10.15 + Pool Supplement, dated as of June 10, 2004, among The First Marblehead Corporation, The National Collegiate Funding LLC and Bank of America, N.A. EXHIBIT NO. DESCRIPTION ----------- ----------- 10.16 + Pool Supplement, dated as of June 10, 2004, among The First Marblehead Corporation, The National Collegiate Funding LLC and Charter One, N.A. EXHIBIT NO. DESCRIPTION ----------- ----------- 23.1 Consent of PricewaterhouseCoopers LLP, independent auditors of The Education Resources Institute, Inc. dated May 13, 2004 EXHIBIT NO. DESCRIPTION ----------- ----------- 23.2 Consent of PricewaterhouseCoopers LLP, independent auditors of The Education Resources Institute, Inc. dated June 3, 2004
* Exhibit (or amendments to Exhibit) previously filed as an exhibit to file 333-108531 and incorporated herein by reference + Confidential treatment to be requested for certain portions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: FIRST MARBLEHEAD DATA SERVICES, INC., ADMINISTRATOR By: /s/ Bruce F. Lefenfeld ------------------------- Name: Bruce F. Lefenfeld Title: President Dated: June 25, 2004 EXHIBIT INDEX
Sequentially Exhibit Numbered Number Description - ------ ----------- 1.1 Underwriting Agreement, dated as of June 7, 2004, among The National Collegiate Student Loan Trust 2004-1, UBS Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs & Co. and The First Marblehead Corporation 4.1 Indenture, dated as of June 1, 2004, between The National Collegiate Student Loan Trust 2004-1 and U.S. Bank National Association 5.1 Opinion of Thacher Proffitt & Wood LLP, dated as of June 10, 2004, with respect to legality 8.1 Opinion of Thacher Proffitt & Wood LLP, dated as of June 10, 2004, regarding tax matters 10.1* Note Purchase Agreement, dated as of May 1, 2002, between Bank One, N.A. and The First Marblehead Corporation, as amended 10.2* Note Purchase Agreement, dated as of April 30, 2001, between Bank of America, N.A. and The First Marblehead Corporation, as amended 10.3* Note Purchase Agreement, dated as of May 15, 2002, between Charter One, N.A. and The First Marblehead Corporation, as amended 10.4 Deposit and Sale Agreement, dated as of June 10, 2004, between the The National Collegiate Funding LLC and The National Collegiate Student Loan Trust 2004-1 10.5 * + Guaranty Agreement between The Education Resources Institute, Inc. and Bank One, N.A. dated May 13, 2002, as amended 10.6 * + Guaranty Agreement between The Education Resources Institute, Inc. and Bank of America, N.A., dated April 30, 2001, as amended 10.7 * + Guaranty Agreement between The Education Resources Institute, Inc. and Charter One Bank, N.A., dated as of May 15, 2002, as amended 10.8 * Alternative Servicing Agreement, dated as of October 16, 2001, between the Pennsylvania Higher Education Assistance Agency and The First Marblehead Corporation 10.9 Trust Agreement, dated as of June 10, 2004, among Wachovia Trust Company, National Association, The National Collegiate Funding LLC and The Education Resources Institute, Inc. 10.10 Administration Agreement, dated as of June 10, 2004, among The National Collegiate Student Loan Trust 2004-1, Wachovia Trust Company, National Association, U.S. Bank National Association and First Marblehead Data Services, Inc. 10.11 Back-up Note Administration Agreement, dated as of June 10, 2004, among The National Collegiate Student Loan Trust 2004-1, First Marblehead Data Services, Inc., Wachovia Trust Company, National Association and U.S. Bank National Association 10.12 Structuring Advisory Agreement, dated as of June 10, 2004, between The National Collegiate Student Loan Trust 2004-1 and The First Marblehead Corporation 10.13 Deposit and Security Agreement, dated as of June 10, 2004, among The Education Resources Institute, Inc., The National Collegiate Student Loan Trust 2004-1 and First Marblehead Data Services, Inc. 10.14 + Pool Supplement, dated as of June 10, 2004, among The First Marblehead Corporation, The National Collegiate Funding LLC and Bank One, N.A. 10.15 + Pool Supplement, dated as of June 10, 2004, among The First Marblehead Corporation, The National Collegiate Funding LLC and Bank of America, N.A. 10.16 + Pool Supplement, dated as of June 10, 2004, among The First Marblehead Corporation, The National Collegiate Funding LLC and Charter One, N.A. 23.1 Consent of PricewaterhouseCoopers LLP, independent auditors of The Education Resources Institute, Inc. dated May 13, 2004 23.2 Consent of PricewaterhouseCoopers LLP, independent auditors of The Education Resources Institute, Inc. dated June 3, 2004
* Exhibit (or amendments to Exhibit) previously filed as an exhibit to file 333-108531 and incorporated herein by reference + Confidential treatment to be requested for certain portions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934. EX-1.1 2 ncf_ex1-1.txt UNDERWRITING AGREEMENT EXHIBIT 1.1 EXECUTION COPY $715,100,000 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED NOTES CONSISTING OF $189,000,000 CLASS A-1 $342,100,000 CLASS A-2 $105,000,000 CLASS A-3 $ 39,500,000 CLASS B-1 $ 39,500,000 CLASS B-2 UNDERWRITING AGREEMENT June 7, 2004 UBS Securities LLC Deutsche Bank Securities Inc. 1285 Avenue of the Americas, 11th Floor 60 Wall Street New York, New York 10019 New York, New York 10005 Citigroup Global Markets Inc. Goldman, Sachs & Co. 388 Greenwich Street, 32nd Floor 85 Broad St. New York, New York 10013 New York, New York 10004 Ladies and Gentlemen: The National Collegiate Funding LLC, a Delaware limited liability company ("National Collegiate Funding"), proposes to cause The National Collegiate Student Loan Trust 2004-1, a Delaware statutory trust (the "Issuer"), to sell to UBS Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Goldman, Sachs & Co. (each an "Underwriter" and collectively, the "Underwriters"), pursuant to the terms of this Underwriting Agreement (this "Agreement"), $715,100,000 aggregate principal amount of its Student Loan Asset Backed Notes (the "Offered Notes") in the classes and aggregate principal or notional amounts set forth on SCHEDULE A hereto. The Issuer will also issue the Class A-4 Notes, Class A-IO-1 Notes and Class A-IO-2 Notes (collectively, the "Non-Offered Notes" and together with the Offered Notes, the "Notes") which are not being offered for sale hereby. The Notes will be issued under an Indenture, dated as of June 1, 2004 (the "Indenture"), between the Issuer and U.S. Bank National Association, a national banking association, as indenture trustee (the "Trustee"). Upon issuance, the Notes will be secured by, among other things, Financed Student Loans (as defined in the Indenture) pledged to the Trustee. The Financed Student Loans will be serviced by The Pennsylvania Higher Education Assistance Agency ("PHEAA") and one or more additional third party servicers (each, a "Servicer" and collectively, the "Servicers") pursuant to the servicing agreements listed on SCHEDULE B hereto (collectively, the "Servicing Agreements"), which servicing agreements will be assigned to the Issuer by The First Marblehead Corporation ("FMC"), as of June 10, 2004. This Agreement, along with (i) the note purchase agreements between each Loan Originator and National Collegiate Funding, as listed on SCHEDULE C hereto (collectively, the "Student Loan Purchase Agreement"), (ii) the Servicing Agreements, (iii) the Indenture, (iv) the Administration Agreement dated as of June 10, 2004 among National Collegiate Funding, the Issuer, First Marblehead Data Services, Inc., Wachovia Trust Company, National Association (the "Owner Trustee") and the Trustee, (v) the Deposit and Sale Agreement dated as of June 10, 2004 (the "Deposit and Sale Agreement") between National Collegiate Funding and the Issuer and (vi) the Trust Agreement dated as of June 1, 2004 (the "Trust Agreement"), among National Collegiate Funding, as Depositor, and TERI, as Owners, and Wachovia Trust Company, National Association, as Owner Trustee, are collectively referred to as the "Basic Documents." Capitalized terms used herein without definition shall have the meanings ascribed to them in the Indenture or the Prospectus (as defined below). National Collegiate Funding proposes to cause the Issuer, upon the terms and conditions set forth herein, to sell to the Underwriters on the Closing Date (as hereinafter defined) the aggregate principal amount of each Class of Notes, at the percentages set forth for each such Class, set forth on SCHEDULE A hereto. National Collegiate Funding wishes to confirm as follows this Agreement with the Underwriters in connection with the purchase of the Notes. 1. AGREEMENTS TO SELL, PURCHASE AND RESELL. (a) National Collegiate Funding hereby agrees, subject to all the terms and conditions set forth herein, to cause the Issuer to sell to the Underwriters and, upon the basis of the representations, warranties and agreements of National Collegiate Funding herein contained and subject to all the terms and conditions set forth herein, each Underwriter, severally and not jointly, agrees to purchase from the Issuer, such principal amount of the Offered Notes set forth next to the name of such Underwriter on SCHEDULE A hereto at such respective purchase prices as are set forth on SCHEDULE A hereto. (b) It is understood that the Underwriters propose to offer the Offered Notes for sale to the public (which may include selected dealers) as set forth in the Prospectus. 2. DELIVERY OF THE NOTES AND PAYMENT THEREFOR. Delivery to the Underwriters of and payment for the Offered Notes shall be made at the office of Thacher Proffitt & Wood LLP, Two World Financial Center, New York, NY 10281 at 10:00 a.m, on June 10, 2004 (the "Closing Date"). The place of such closing and the Closing Date may be varied by agreement between the Underwriters and the Issuer. -2- The Offered Notes will be delivered to the Underwriters against payment of the purchase price therefor to the Issuer in Federal Funds, by wire transfer to an account at a bank acceptable to the Underwriters, or such other form of payment as to which the parties may agree. Unless otherwise agreed to by National Collegiate Funding and the Underwriters, each Class of Offered Notes will be evidenced by a single global security in definitive form deposited with the Trustee as custodian for DTC and/or by additional definitive securities, and will be registered, in the case of the global classes of Offered Notes, in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), and in the other cases, in such names and in such denominations as the Underwriters shall request prior to 1:00 p.m., New York City time, no later than the Business Day preceding the Closing Date. The Offered Notes to be delivered to the Underwriters shall be made available to the Underwriters in New York, New York, for inspection and packaging not later than 9:30 a.m., time, on the Business Day next preceding the Closing Date. 3. REPRESENTATIONS AND WARRANTIES OF NATIONAL COLLEGIATE FUNDING. (A) National Collegiate Funding represents and warrants to each of the Underwriters that: (a) A registration statement on Form S-3 (No 333-113336), including a prospectus and such amendments thereto as may have been required to the date hereof, relating to the Offered Notes and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the "Act"), has been filed with the Securities and Exchange Commission (the "SEC" or the "Commission") and such registration statement, as amended, has become effective; such registration statement, as amended, and the prospectus relating to the sale of the Offered Notes offered thereby constituting a part thereof, as from time to time amended or supplemented (including the base prospectus, any prospectus supplement filed with the Commission pursuant to Rule 424(b) under the Act, the information deemed to be a part thereof pursuant to Rule 430A(b) under the Act, and the information incorporated by reference therein) are respectively referred to herein as the "Registration Statement" and the "Prospectus"; and the conditions to the use of a registration statement on Form S-3 under the Act, as set forth in the General Instructions to Form S-3, and the conditions of Rule 415 under the Act, have been satisfied with respect to the Registration Statement; (b) On the effective date of the Registration Statement, the Registration Statement and the Prospectus conformed in all respects to the requirements of the Act, the rules and regulations of the SEC (the "Rules and Regulations") and the Trust Indenture Act of 1939, as amended, and the rules and regulations thereunder (the "Trust Indenture Act"), and, except with respect to information omitted pursuant to Rule 430A of the Act, did not include any untrue statement of a material fact or, in the case of the Registration Statement, omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, in the case of the Prospectus, omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and on the date of this Agreement and on the Closing Date, the Registration Statement and the Prospectus will conform in all respects to the requirements of the Act, the Rules and Regulations and the Trust Indenture Act, and neither of such documents included or will include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the foregoing does not apply to statements in or omissions from the Registration Statement -3- or the Prospectus based upon written information furnished to National Collegiate Funding by the Underwriters, specifically for use therein. (c) The Commission has not issued and, to the best knowledge of National Collegiate Funding, is not threatening to issue any order preventing or suspending the use of the Registration Statement. (d) As of the Closing Date, each consent, approval, authorization or order of, or filing with, any court or governmental agency or body which is required to be obtained or made by National Collegiate Funding or its affiliates for the consummation of the transactions contemplated by this Agreement shall have been obtained, except as otherwise provided in the Basic Documents. (e) The Indenture has been duly and validly authorized by National Collegiate Funding and, upon its execution and delivery by the Issuer and assuming due authorization, execution and delivery by the Trustee, will be a valid and binding agreement of the Issuer, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other similar laws affecting creditors' rights generally and conform in all material respects to the description thereof in the Prospectus. The Indenture has been duly qualified under the Trust Indenture Act with respect to the Notes. (f) The Notes have been duly authorized by the Issuer and the Offered Notes to be issued on the Closing Date, when executed by the Issuer and authenticated by the Trustee in accordance with the Indenture, and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will have been validly issued and delivered, and will constitute valid and binding obligations of the Issuer entitled to the benefits of the Indenture and enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and the Offered Notes will conform in all material respects to the description thereof in the Prospectus. (g) National Collegiate Funding is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with full power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and as conducted on the date hereof, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition (financial or other), business, prospects, properties, net worth or results of operations of National Collegiate Funding. (h) Other than as contemplated by this Agreement or as disclosed in the Prospectus, there is no broker, finder or other party that is entitled to receive from National Collegiate Funding or any of its affiliates any brokerage or finder's fee or other fee or commission as a result of any of the transactions contemplated by this Agreement. -4- (i) There are no legal or governmental proceedings pending or threatened or, to the knowledge of National Collegiate Funding contemplated, against National Collegiate Funding, or to which National Collegiate Funding or any of its properties is subject, that are not disclosed in the Prospectus and which, if adversely decided, would individually or in the aggregate have a material adverse effect on the condition (financial or other), business, properties or results of operations of National Collegiate Funding, or would materially and adversely affect the ability of National Collegiate Funding, or the Issuer to perform its obligations under this Agreement and the other Basic Documents or otherwise materially affect the issuance of the Notes or the consummation of the transactions contemplated hereby or by the Basic Documents. (j) Neither the offer, sale or delivery of the Notes by the Issuer nor the execution, delivery or performance of this Agreement or the other Basic Documents by National Collegiate Funding or the Issuer, nor the consummation by National Collegiate Funding or the Issuer of the transactions contemplated hereby or thereby (i) requires or will require any consent, approval, authorization or other order of, or registration or filing with, any court, regulatory body, administrative agency or other governmental body, agency or official (except for compliance with the securities or Blue Sky laws of various jurisdictions, the qualification of the Indenture under the Trust Indenture Act and such other consents, approvals or authorizations as shall have been obtained prior to the Closing Date) or conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, the organizational documents of National Collegiate Funding or the Issuer or (ii) conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, in any material respect, any agreement, indenture, lease or other instrument to which National Collegiate Funding or the Issuer is a party or by which National Collegiate Funding or the Issuer or any of its respective properties may be bound, or violates or will violate in any material respect any statute, law, regulation or filing or judgment, injunction, order or decree applicable to National Collegiate Funding or the Issuer or any of its respective properties, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of National Collegiate Funding or the Issuer pursuant to the terms of any agreement or instrument to which it is a party or by which it may be bound or to which any of its properties is subject other than as contemplated by the Basic Documents. (k) National Collegiate Funding has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and the other Basic Documents to which it is a party; the execution and delivery of, and the performance by National Collegiate Funding of its obligations under, this Agreement and the other Basic Documents to which it is a party have been duly and validly authorized by National Collegiate Funding and this Agreement and the other Basic Documents have been duly executed and delivered by National Collegiate Funding and constitute the valid and legally binding agreements of National Collegiate Funding, enforceable against National Collegiate Funding in accordance with their respective terms, except as the enforcement hereof and thereof may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto and subject to the applicability of general principles of equity, and except as rights to indemnity and contribution hereunder and thereunder may be limited by Federal or state securities laws or principles of public policy. -5- (l) National Collegiate Funding's assignment and delivery of Financed Student Loans to the order of the Owner Trustee on behalf of the Issuer pursuant to the Deposit and Sale Agreement will vest in the Owner Trustee on behalf of Issuer all of National Collegiate Funding's right, title and interest therein, subject to no prior lien, mortgage, security interest, pledge, adverse claim, charge or other encumbrance. (m) The Issuer is not, nor as a result of the issuance and sale of the Notes as contemplated hereunder will it become, subject to registration as an "investment company" under the Investment Company Act of 1940, as amended. (n) The representations and warranties made by National Collegiate Funding in any Basic Document to which National Collegiate Funding is a party and made in any Officer's Certificate of the Issuer will be true and correct at the time made and on and as of the applicable Closing Date. (o) Since the date of the Prospectus, no material adverse change or any development involving a prospective material adverse change in, or affecting particularly the business or properties of, National Collegiate Funding has occurred. (B) Each Underwriter represents and warrants to, and agrees with National Collegiate Funding, as to itself that: (a) it has not offered or sold and will not offer or sell any notes to persons in the United Kingdom prior to the expiration of the period of six months from the issue date of the notes except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments, as principal or agent, for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended; (b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity, within the meaning of section 21 of the Financial Services and Markets Act 2000, received by it in connection with the issue or sale of any notes in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 does not apply to the trust; and (c) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom. 4. AGREEMENTS OF NATIONAL COLLEGIATE FUNDING. National Collegiate Funding agrees with each of the Underwriters as follows: (a) National Collegiate Funding will prepare a supplement to the Prospectus setting forth the amount of the Offered Notes covered thereby and the terms thereof not otherwise specified in the Prospectus, the price at which the Offered Notes are to be purchased by the Underwriters, either the initial public offering price or the method by which the price at -6- which the Offered Notes are to be sold will be determined, the selling concessions and reallowances, if any, and such other information as the Underwriters and National Collegiate Funding deem appropriate in connection with the offering of the Offered Notes, and National Collegiate Funding will timely file such supplement to the prospectus with the SEC pursuant to Rule 424(b) under the Act, but National Collegiate Funding will not file any amendments to the Registration Statement as in effect with respect to the Offered Notes or any amendments or supplements to the Prospectus, unless it shall first have delivered copies of such amendments or supplements to the Underwriters, with reasonable opportunity to comment on such proposed amendment or supplement or if the Underwriters shall have reasonably objected thereto promptly after receipt thereof; National Collegiate Funding will immediately advise the Underwriters or the Underwriters' counsel (i) when notice is received from the SEC that any post-effective amendment to the Registration Statement has become or will become effective and (ii) of any order or communication suspending or preventing, or threatening to suspend or prevent, the offer and sale of the Offered Notes or of any proceedings or examinations that may lead to such an order or communication, whether by or of the SEC or any authority administering any state securities or Blue Sky law, as soon as National Collegiate Funding is advised thereof, and will use its best efforts to prevent the issuance of any such order or communication and to obtain as soon as possible its lifting, if issued. (b) If, at any time when the Prospectus relating to the Offered Notes is required to be delivered under the Act, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Prospectus to comply with the Act or the Rules and Regulations, National Collegiate Funding promptly will notify each of the Underwriters of such event and will promptly prepare and file with the SEC, at its own expense, an amendment or supplement to such Prospectus that will correct such statement or omission or an amendment that will effect such compliance. Neither the Underwriters' consent to, nor the Underwriters' delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6 hereof. (c) National Collegiate Funding will immediately inform the Underwriters (i) of the receipt by National Collegiate Funding of any communication from the SEC or any state securities authority concerning the offering or sale of the Notes and (ii) of the commencement of any lawsuit or proceeding to which National Collegiate Funding is a party relating to the offering or sale of the Notes. (d) National Collegiate Funding will furnish to the Underwriters, without charge, copies of the Registration Statement (including all documents and exhibits thereto or incorporated by reference therein), the Prospectus, and all amendments and supplements to such documents relating to the Offered Notes, in each case in such quantities as the Underwriters may reasonably request. -7- (e) No amendment or supplement will be made to the Registration Statement or Prospectus which the Underwriters shall not previously have been advised or to which it shall reasonably object after being so advised. (f) National Collegiate Funding will cooperate with the Underwriters and with their counsel in connection with the qualification of, or procurement of exemptions with respect to, the Offered Notes for offering and sale by the Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as the Underwriters may designate and will file such consents to service of process or other documents necessary or appropriate in order to effect such qualification or exemptions; provided that in no event shall National Collegiate Funding be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Offered Notes, in any jurisdiction where it is not now so subject. (g) National Collegiate Funding consents to the use, in accordance with the securities or Blue Sky laws of such jurisdictions in which the Offered Notes are offered by the Underwriters and by dealers, of the Prospectus furnished by National Collegiate Funding. (h) To the extent, if any, that the rating or ratings provided with respect to the Notes by the rating agency or agencies that initially rate the Notes is conditional upon the furnishing of documents or the taking of any other actions by National Collegiate Funding, National Collegiate Funding shall cause to be furnished such documents and such other actions to be taken. (i) So long as any of the Offered Notes are outstanding, National Collegiate Funding will furnish to the Underwriters (i) as soon as available, a copy of each document relating to the Offered Notes required to be filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any order of the SEC thereunder, and (ii) such other information concerning National Collegiate Funding as the Underwriters may request from time to time. (j) If this Agreement shall terminate or shall be terminated after execution and delivery pursuant to any provisions hereof (otherwise than by notice given by the Underwriters terminating this Agreement pursuant to Section 8 or Section 9 hereof) or if this Agreement shall be terminated by the Underwriters because of any failure or refusal on the part of National Collegiate Funding to comply with the terms or fulfill any of the conditions of this Agreement, National Collegiate Funding agrees to reimburse the Underwriters for all out-of-pocket expenses (including fees and expenses of their counsel) reasonably incurred by it in connection herewith, but without any further obligation on the part of National Collegiate Funding for loss of profits or otherwise. (k) The net proceeds from the sale of the Offered Notes hereunder will be applied substantially in accordance with the description set forth in the Prospectus. (l) Except as stated in this Agreement and in the Prospectus, National Collegiate Funding has not taken, nor will it take, directly or indirectly, any action designed to or -8- that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Offered Notes to facilitate the sale or resale of the Offered Notes. (m) For a period from the date of this Agreement until the retirement of the Offered Notes, the Issuer will deliver to you the annual statements of compliance and the annual independent certified public accountants' reports furnished to the Trustee or National Collegiate Funding pursuant to the Servicing Agreements as soon as such statements and reports are furnished to the Trustee or National Collegiate Funding. (n) On or before the Closing Date, National Collegiate Funding shall mark its accounting and other records, if any, relating to the Financed Student Loans and shall cause the applicable Servicer to mark its computer records relating to the Financed Student Loans to show the absolute ownership by the Owner Trustee, of, and the interest of the Issuer in, the Financed Student Loans, and National Collegiate Funding shall not take, or shall not permit any other person to take, any action inconsistent with the ownership of, and the interest of the Issuer in, the Financed Student Loans, other than as permitted by the Basic Documents. (o) If, at the time the Registration Statement became effective, any information shall have been omitted therefrom in reliance upon Rule 430A under the Act, then, immediately following the execution of this Agreement, National Collegiate Funding will prepare, and file or transmit for filing with the Commission in accordance with such Rule 430A and Rule 424(b) under the Act, copies of an amended Prospectus containing all information so omitted. (p) As soon as practicable, but not later than 16 months after the date of this Agreement, National Collegiate Funding will make generally available to its securityholders an earnings statement covering a period of at least 12 months beginning after the later of (i) the effective date of the Registration Statement, (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective prior to the date of this Agreement and (iii) the date of the Issuer's most recent Annual Report or Form 10-K filed with the Commission prior to the date of this Agreement, which will satisfy the provisions of Section 11(a) of the Act. 5. INDEMNIFICATION AND CONTRIBUTION. (a) National Collegiate Funding agrees to indemnify and hold harmless each of the Underwriters and each person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities and expenses (or actions in respect thereof) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, or in any amendment or supplement thereto, or any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability, or action as such expenses are incurred, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information relating to -9- an Underwriter furnished in writing to National Collegiate Funding by such Underwriter expressly for use therein, it being understood that the only such information furnished by any Underwriter consists of the information described as such in Section 10 of this Agreement; PROVIDED, HOWEVER, that the indemnification contained in this paragraph (a) with respect to any preliminary prospectus shall not inure to the benefit of an Underwriter (or to the benefit of any person controlling an Underwriter) on account of any such loss, claim, damage, liability or expense arising from the sale of the of Offered Notes by an Underwriter to any person if the untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in such preliminary prospectus was corrected in the final Prospectus and such Underwriter sold Offered Notes to that person without sending or giving at or prior to the written confirmation of such sale, a copy of the final Prospectus (as then amended or supplemented but excluding documents incorporated by reference therein) if National Collegiate Funding has previously furnished sufficient copies thereof to such Underwriter at a time reasonably prior to the date such Offered Notes are sold to such person. The foregoing indemnity agreement shall be in addition to any liability which National Collegiate Funding may otherwise have. (b) If any action, suit or proceeding shall be brought against an Underwriter or any person controlling an Underwriter in respect of which indemnity may be sought against National Collegiate Funding, such Underwriter or such controlling person shall promptly notify the parties against whom indemnification is being sought (the "indemnifying parties"), but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under Sections 5(a) and 5(c) hereof, except to the extent that the indemnifying party is materially prejudiced by such omission, and in no event shall the omission so to notify relieve National Collegiate Funding from any liability which it may otherwise have. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party). The applicable Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the indemnifying parties have agreed in writing to pay such fees and expenses, (ii) the indemnifying parties have failed to assume the defense and employ counsel, or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both the Underwriter or such controlling person and the indemnifying parties and the Underwriter or such controlling person shall have been advised by its counsel that there may be one or more legal defenses available to it which are different from or additional to or in conflict with those available to the indemnifying parties and in the reasonable judgment of such counsel it is advisable for the Underwriter or such controlling person to employ separate counsel (in which case the indemnifying party shall not have the right to assume the defense of such action, suit or proceeding on behalf of the Underwriter or such controlling person). It is understood, however, that the indemnifying parties shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local -10- counsel) at any time for each Underwriter and controlling persons not having actual or potential differing interests with such Underwriter or among themselves, which firm shall be designated in writing by such Underwriter, and that all such fees and expenses shall be reimbursed on a monthly basis as provided in paragraph (a) hereof. An indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to, or an admission of fault, culpability or a failure to act by or on behalf of an indemnified party. (c) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless National Collegiate Funding and each of its directors and officers, and any person who controls National Collegiate Funding within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the indemnity from National Collegiate Funding to the Underwriters set forth in paragraph (a) hereof, but only with respect to information relating to such Underwriter furnished in writing by such Underwriter expressly for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus therein, it being understood that the only such information furnished by any Underwriter consists of the information described as such in Section 10 of this Agreement. If any action, suit or proceeding shall be brought against National Collegiate Funding, any of its directors or officers, or any such controlling person based on the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus and in respect of which indemnity may be sought against an Underwriter pursuant to this paragraph (c), such Underwriter shall have the rights and duties given to National Collegiate Funding by paragraph (b) above (except that if National Collegiate Funding shall have assumed the defense thereof the Underwriter shall have the option to assume such defense but shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at such Underwriter's expense), and National Collegiate Funding, its directors and officers, and any such controlling person shall have the rights and duties given to the Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be in addition to any liability which the Underwriters may otherwise have. (d) If the indemnification provided for in this Section 5 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by National Collegiate Funding on the one hand and the applicable Underwriter on the other hand from the offering of the Offered Notes, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of National Collegiate Funding on the one hand and the applicable Underwriter on the other in connection with the statements or omissions that resulted in such -11- losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by National Collegiate Funding on the one hand and an Underwriter on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Offered Notes (before deducting expenses) received by the Issuer bear to the total underwriting discounts and commissions received by such Underwriter. The relative fault of National Collegiate Funding on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by National Collegiate Funding on the one hand or by an Underwriter on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) National Collegiate Funding and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by a pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 5, no Underwriter shall be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offered Notes underwritten by such Underwriter exceed the sum of the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission and the amount of any damages such Underwriter has been required to pay under the Indemnity Agreement dated as of the date hereof among FMC and the Underwriters. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this paragraph (e) to contribute are several in proportion to their respective underwriting obligations. (f) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 5 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 5 and the representations and warranties of National Collegiate Funding and the Underwriters set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of the Underwriters, National Collegiate Funding or any person controlling any of them or their respective directors or officers, (ii) acceptance of any Offered Notes and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to the Underwriters, National Collegiate Funding or any person controlling any of them or their respective directors or officers, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 5. -12- 6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters hereunder to purchase the Offered Notes shall be subject to the accuracy of the representations and warranties on the part of National Collegiate Funding contained herein as of the date hereof and as of the Closing Date, to the accuracy of the statements of National Collegiate Funding made in any certificates delivered pursuant to the provisions hereof, to the performance by National Collegiate Funding of its obligations hereunder and to the following additional conditions: (a) All actions required to be taken and all filings required to be made by National Collegiate Funding under the Act prior to the sale of the Offered Notes shall have been duly taken or made. At and prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of National Collegiate Funding or the Underwriters, shall be contemplated by the Commission. (b) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in or affecting the condition (financial or other), business, properties, net worth, or results of operations of National Collegiate Funding, each Servicer or FMC not contemplated by the Registration Statement, which in the opinion of the Underwriters, would materially adversely affect the market for the Offered Notes, (ii) any downgrading in the rating of any debt securities of trusts sponsored by National Collegiate Funding, each Servicer or FMC by any nationally recognized statistical rating organization or any public announcement that any such organization has under surveillance or review its rating of any debt securities of trusts sponsored by National Collegiate Funding, each Servicer or FMC (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating), or (iii) any event or development which makes any statement made in the Registration Statement or Prospectus untrue or which, in the opinion of National Collegiate Funding and its counsel or the Underwriters and their counsel, requires the filing of any amendment to or change in the Registration Statement or Prospectus in order to state a material fact required by any law to be stated therein or necessary in order to make the statements therein not misleading, if amending or supplementing the Registration Statement or Prospectus to reflect such event or development would, in the opinion of the Underwriters, materially adversely affect the market for the Offered Notes. (c) The Administrator shall have delivered to you a certificate, signed by an authorized signatory and dated the Closing Date, to the effect that the signer of such certificate has carefully examined the Basic Documents and the Prospectus and that to the best of such signer's knowledge: (x) the representations and warranties in the Basic Documents of the Issuer are true and correct in all material respects at and as of the Closing Date with the same effect as if made on the Closing Date and (y) the Issuer has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. (d) National Collegiate shall have delivered to you a certificate, signed by an authorized signatory and dated the Closing Date, to the effect that the signer of such certificate has carefully examined the Basic Documents and the Prospectus and that to the best of such -13- signer's knowledge: (x) the representations and warranties in the Basic Documents of National Collegiate are true and correct in all material respects at and as of the Closing Date with the same effect as if made on the Closing Date and (y) National Collegiate has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. (e) You shall have received opinions addressed to you of Thacher Proffitt & Wood LLP and Hale & Dorr LLP, in their capacity as counsel to the Issuer, FMC, National Collegiate Funding and the Administrator, dated the Closing Date, in form and substance satisfactory to you and your counsel with respect to the status of the Issuer, FMC and the Administrator, to each of the Basic Documents to which FMC, the Administrator and the Issuer is a party and to the validity of the Notes and such related matters as you shall reasonably request. In addition, you shall have received opinions addressed to you of Thacher Proffitt & Wood LLP in form and substance satisfactory to you and your counsel, concerning "true sale", "first perfected security interest" and "non-consolidation", and certain other issues with respect to the transfer of the Financed Student Loans from the Loan Originator to National Collegiate Funding, from National Collegiate Funding to the Issuer and from the Issuer to the Trustee. (f) You shall have received an opinion addressed to you of Thacher Proffitt & Wood LLP, dated the Closing Date, in form and substance satisfactory to you and your counsel to the effect that the statements in the Prospectus under the headings "U.S. Federal Income Tax Consequences" and "ERISA Considerations", to the extent that they constitute statements of matters of law or legal conclusions with respect thereto, have been prepared or reviewed by such counsel and are correct in all material respects. (g) You shall have received an opinion addressed to you of Thacher Proffitt & Wood LLP, dated the Closing Date, in form and substance satisfactory to you and your counsel with respect to the character of the Notes for federal tax purposes. (h) You shall have received from Thacher Proffitt & Wood LLP, a favorable opinion in form reasonably satisfactory to you and dated the Closing Date: (i) with respect to the Prospectus and the Registration Statement and certain matters arising under the Trust Indenture Act of 1939, as amended, and the Investment Company Act of 1940, as amended; (ii) to the effect that no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body of the United States is required for the issuance of the Notes and the sale of the Offered Notes to you, or the consummation by the Issuer of the other transactions contemplated by the Basic Documents. (iii) to the effect that nothing has come to their attention in the course of their examination of the Prospectus or in their discussions or otherwise which would lead them to believe that the Prospectus (except as to financial or statistical data contained therein and the information set forth under the headings "The Servicers", "The Student Loan Guarantor" and "Underwriting") contained an untrue statement of a -14- material fact or omitted to state a material fact necessary in order to make the Prospectus not misleading. (i) You shall have received an opinion addressed to you of Stroock & Stroock & Lavan LLP, in its capacity as your counsel, dated the Closing Date, in form and substance satisfactory to you. (j) You shall have received an opinion addressed to you of Richards, Layton and Finger, P.A., counsel to the Owner Trustee, in form and substance satisfactory to you and your counsel. (k) You shall have received an opinion addressed to you of in-house counsel to PHEAA, in form and substance satisfactory to you and your counsel. (l) You shall have received an opinion addressed to you of in-house counsel to TERI, in form and substance satisfactory to you and your counsel. (m) You shall have received an opinion addressed to you of Nixon Peabody, LLP, counsel to the Trustee, dated the Closing Date and in form and substance satisfactory to you and your counsel. (n) You shall have received certificates addressed to you dated the Closing Date of any one of the Chairman of the Board, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, any Assistant Treasurer, the principal financial officer or the principal accounting officer of each of PHEAA and TERI in which such officer shall state that, to the best of such officer's knowledge after reasonable investigation, that such officer has reviewed the Prospectus and that the information therein regarding PHEAA, or TERI, as applicable, is fair and accurate in all material respects. (o) You shall have received evidence satisfactory to you that within ten days of the Closing Date UCC-1 financing statements will be filed in the office of the Secretary of State of the State of Delaware and the Commonwealth of Massachusetts, reflecting the grant of the security interest by the Issuer in the Financed Student Loans and the proceeds thereof to the Trustee. (p) All the representations and warranties of the Issuer, FMC, National Collegiate Funding and the Administrator contained in this Agreement and the Basic Documents shall be true and correct in all material respects on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date and the Underwriters shall have received a certificate, dated the Closing Date and signed by an executive officer of FMC, National Collegiate Funding and the Administrator to such effect. (q) The Issuer shall not have failed at or prior to the Closing Date to have performed or complied with any of its agreements herein contained and required to be performed or complied with by it hereunder at or prior to the Closing Date. -15- (r) (i) The Class A Notes shall be rated in the highest rating category of the following rating agencies: Fitch, Inc. ("Fitch"), Standard & Poor's Ratings Services, a Division of the McGraw-Hill Companies, Inc. ("S&P) and Moody's Investors Service, Inc. ("Moody's") (each of Fitch, S&P and Moody's, a "Rating Agency" and collectively, the "Rating Agencies"), and (ii) the Class B Notes shall be rated in one of the three highest rating categories of the Rating Agencies. (s) You shall have received certificates dated the Closing Date from officers of FMC, National Collegiate Funding and the Administrator addressing such additional matters as you may reasonably request in form and substance satisfactory to you and your counsel. (t) You shall have received such other opinions, certificates and documents as are required under the Indenture as a condition to the issuance of the Offered Notes. (u) You shall have received from each of the Servicers an officer's certificate in form and substance satisfactory to you and your counsel. (v) You shall have received a signed Indemnity Agreement from FMC in form and substance satisfactory to you and your counsel. (w) You shall have received from PricewaterhouseCoopers LLP, accountants to National Collegiate Funding, a letter dated the Closing Date, and in form and substance satisfactory to the Underwriters, to the effect that they have carried out certain specified procedures, not constituting an audit, with respect to certain information in the Prospectus regarding the Financed Student Loans and setting forth the results of such specified procedures. (x) You shall have received from PricewaterhouseCoopers LLP, accountants to TERI, a letter dated the Closing Date, and in form and substance satisfactory to the Underwriters, to the effect that they have carried out certain specified procedures, not constituting an audit, with respect to certain information in the Prospectus regarding the unaudited financial information of TERI and setting forth the results of such specified procedures. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, if National Collegiate Funding is in breach of any covenants or agreements contained herein or if any of the opinions and certificates referred to above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to you and your counsel, this Agreement and all your obligations hereunder may be canceled by you at, or at any time prior to, the Closing Date without liability of any party to any other party except as provided in Section 9(b). Notice of such cancellation shall be given to the Issuer in writing, or by telephone or facsimile transmission confirmed in writing. The obligation of National Collegiate Funding to cause the Issuer to sell the Offered Notes to you shall be subject to: (i) the accuracy of your representations and warranties herein contained at and as of the Closing Date and (ii) your performance of all your obligations hereunder to be performed at or prior to the Closing Date. -16- 7. EXPENSES. National Collegiate Funding agrees to pay or to otherwise cause the payment of the following costs and expenses and all other costs and expenses incident to the performance by it of its obligations hereunder: (i) the preparation, printing or reproduction of the Registration Statement, the Prospectus and each amendment or supplement to any of them, this Agreement, and each other Basic Document; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prospectus and all amendments or supplements to, and preliminary versions of, any of them as may be reasonably requested for use in connection with the offering and sale of the Offered Notes; (iii) the preparation, printing, authentication, issuance and delivery of definitive certificates for the Offered Notes; (iv) the printing (or reproduction) and delivery of this Agreement, the preliminary and supplemental Blue Sky Memoranda and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Offered Notes; (v) qualification of the Indenture under the Trust Indenture Act; (vi) the fees and disbursements of (A) the Issuer's counsel, (B) the Trustee and its counsel, (C) the Owner Trustee and its counsel, (D) the Depository Trust Company in connection with the book-entry registration of the Offered Notes, (E) KPMG LLP and PricewaterhouseCoopers LLP; and (vii) the fees charged by S&P, Fitch and Moody's for rating the Notes. 8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall be deemed effective as of the date first above written upon the execution and delivery hereof by all the parties hereto. Until such time as this Agreement shall have become effective, it may be terminated by National Collegiate Funding, by notifying each of the Underwriters, or by the Underwriters, by notifying National Collegiate Funding. Any notice under this Section 8 may be given by telecopy or telephone but shall be subsequently confirmed by letter. 9. TERMINATION. (a) This Agreement shall be subject to termination in the Underwriters' absolute discretion by notice given to National Collegiate Funding prior to delivery of and payment for the Offered Notes, if prior to such time, (i) there shall have occurred any adverse change, or any development involving a prospective adverse change, in or affecting particularly the business, assets or properties of National Collegiate, the Issuer, or any of their affiliates; (ii) trading of securities generally on the New York Stock Exchange or the American Stock Exchange shall have been suspended or materially limited; (iii) a general moratorium on commercial banking activities in New York shall have been declared by either federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; or (iv) there shall have occurred any material outbreak or declaration of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in your judgment, impracticable to market the Offered Notes. (b) If the sale of the Offered Notes shall not be consummated because any condition to your obligations set forth in Section 6 is not satisfied or because of any refusal, inability or failure on the part of National Collegiate Funding to perform any agreement herein or comply with any provision hereof other than by reason of your default, National Collegiate Funding shall reimburse you for the reasonable fees and expenses of your counsel and for such -17- other out-of-pocket expenses as shall have been incurred by you in connection with this Agreement and the proposed purchase of the Offered Notes, and upon demand National Collegiate Funding shall pay the full amount thereof to you. (c) This Agreement will survive delivery of and payment for the Offered Notes. The provisions of Section 5 and this Section 9(c) shall survive the termination or cancellation of this Agreement. 10. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in the table and the second, third and fourth paragraphs under the heading "Underwriting" in the Prospectus Supplement constitute the only information furnished by or on behalf of the Underwriters as such information is referred to in Sections 3(A)(b) and 5 hereof. 11. DEFAULT BY ONE OF THE UNDERWRITERS. If any of the Underwriters shall fail on the Closing Date to purchase the Offered Notes which it is obligated to purchase hereunder (the "Defaulted Notes"), the remaining Underwriters (the "Non-Defaulting Underwriters") shall have the right, but not the obligation, within one (1) Business Day thereafter, to make arrangements to purchase all, but not less than all, of the Defaulted Notes upon the terms herein set forth; if, however, the Non-Defaulting Underwriters shall have not completed such arrangements within such one (1) Business Day period, then this Agreement shall terminate without liability on the part of the Non-Defaulting Underwriters. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the Non-Defaulting Underwriters or National Collegiate Funding shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. 12. COMPUTATIONAL MATERIALS. (a) It is understood that the Underwriters may prepare and provide to prospective investors certain Computational Materials (as defined below) in connection with National Collegiate Funding's offering of the Offered Notes, subject to the following conditions: (i) The Underwriters shall comply with all applicable laws and regulations in connection with the use of Computational Materials including the No-Action Letter of May 20, 1994 issued by the Commission to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset Corporation, as made applicable to other issuers and underwriters by the Commission in response to the request of the Public Securities Association dated May 24, 1994, and the No-Action Letter of February 17, 1995 issued by the Commission to the Public Securities Association (collectively, the "Kidder/PSA Letters"). (ii) As used herein, "Computational Materials" and the term "ABS Term Sheets" shall have the meanings given such terms in the Kidder/PSA Letters, but -18- shall include only those Computational Materials that have been prepared or delivered to prospective investors by or at the direction of an Underwriter. (iii) Each Underwriter shall provide National Collegiate Funding with representative forms of all Computational Materials prior to their first use, to the extent such forms have not previously been approved by National Collegiate Funding for use by such Underwriter. Each Underwriter shall provide to National Collegiate Funding, for filing on Form 8-K as provided in Section 12(b), copies of all Computational Materials that are to be filed with the Commission pursuant to the Kidder/PSA Letters. Each Underwriter may provide copies of the foregoing in a consolidated or aggregated form. All Computational Materials described in this subsection (a)(iii) must be provided to National Collegiate Funding not later than 10:00 A.M., Eastern time, one business day before filing thereof is required pursuant to the terms of this Agreement. (iv) If an Underwriter does not provide the Computational Materials to National Collegiate Funding pursuant to subsection (a)(iii) above, such Underwriter shall be deemed to have represented, as of the applicable Closing Date, that it did not provide any prospective investors with any information in written or electronic form in connection with the offering of the Offered Notes that is required to be filed with the Commission in accordance with the Kidder/PSA Letters. (v) In the event of any delay in the delivery by an Underwriter to National Collegiate Funding of all Computational Materials required to be delivered in accordance with subsection (a)(iii) above, National Collegiate Funding shall have the right to delay the release of the Prospectus to investors or to such Underwriter, to delay the Closing Date and to take other appropriate actions in each case as necessary in order to allow National Collegiate Funding to comply with its agreement set forth in Section 12(b) to file the Computational Materials by the time specified therein. (d) National Collegiate Funding shall file the Computational Materials (if any) provided to it by the Underwriters under Section 12(a)(iii) with the Commission pursuant to a Current Report on Form 8-K no later than 5:30 P.M., New York time, on the date required pursuant to the Kidder/PSA Letters. 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective indemnities, agreements, representations, warranties and other statements of National Collegiate Funding or its officers and of the Underwriters set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, regardless of any investigation or statement as to the results thereof, made by or on behalf of the Underwriters, National Collegiate Funding or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Notes. 14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 8 and 9 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to National Collegiate Funding, at The Prudential Tower, 800 Boylston Street, 34th Floor, Boston, Massachusetts -19- 02199-8157, Attention: Controller; with a copy to First Marblehead Corporation, The Prudential Tower, 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199-8157 Attn: Richard P. Zermani, (ii) if to FMC, at The Prudential Tower, 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199-8157, Attention: Controller; with a copy to First Marblehead Corporation, The Prudential Tower, 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199-8157 Attn: Richard P. Zermani, and (iii) if to the Underwriters, to the address of the respective Underwriter set forth above with a copy to Richard L. Fried, Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038. This Agreement has been and is made solely for the benefit of the Underwriters, National Collegiate Funding, the Issuer, their respective directors, officers, managers, trustees and controlling persons referred to in Section 5 hereof and their respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from an Underwriter of any of the Offered Notes in his status as such purchaser. 15. APPLICABLE LAW; COUNTERPARTS. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made to be performed within the State of New York without giving effect to choice of laws or conflict of laws principles thereof. This Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute but one and the same instrument. [Signature pages follow] -20- Please confirm the foregoing correctly sets forth the agreement between National Collegiate Funding and the Underwriters. Very truly yours, THE NATIONAL COLLEGIATE FUNDING LLC By: GATE Holdings, Inc., as sole Member By: /s/ Bruce F. Lefenfeld -------------------------- Name: Bruce F. Lefenfeld Title: Vice President Confirmed as of the date first above mentioned: UBS SECURITIES LLC DEUTSCHE BANK SECURITIES INC. By: /s/ Jack McCleary By: /s/ Paul Vambutas ----------------- ----------------- Name: Jack McCleary Name: Paul Vambutas Title: Executive Director Title: Director By: /s/ Stuart Lippman By: /s/ James P. Murphy ------------------ ------------------- Name: Stuart Lippman Name: James P. Murphy Title: Director Title: Vice President CITIGROUP GLOBAL MARKETS INC. GOLDMAN, SACHS & CO. By: /s/ Hung Loi By: /s/ Goldman, Sachs & Co. ------------------- ------------------------ Name: Hung Loi Name: Title: Director Title: -21- Accepted and Agreed as to Section 5: THE FIRST MARBLEHEAD CORPORATION By: /s/ John A. Hupalo ------------------------ Name: John A. Hupalo Title: Executive Vice President -22- SCHEDULE A
Floating Rate Notes ----------------------------------------------------------------------------------- Price Class A-1 Notes Class A-2 Notes Class A-3 Notes (percentage (by principal (by principal (by principal of principal Underwriter amount) amount) amount) amount of Notes) - ----------- ----------------------------------------------------------------------------------- UBS Securities LLC $ 89,795,799 $162,535,146 $ 49,886,555 99.675% Deutsche Bank Securities Inc. 67,511,567 122,199,508 37,506,425 99.675% Citigroup Global Markets Inc. 15,846,317 28,682,673 8,803,510 99.675% Goldman, Sachs & Co. 15,846,317 28,682,673 8,803,510 99.675% - -------------------------------------------------------------------------------------------------------------------------- Total $189,000,000 $342,100,000 $105,000,000 99.675% - -------------------------------------------------------------------------------------------------------------------------- Auction Rate Notes ------------------------------------------------------------------- Price (percentage Class B-1 Notes Class B-2 Notes of principal Underwriter (by principal amount) (by principal amount) amount of Notes) - ----------- ------------------------------------------------------------------- UBS Securities LLC $39,500,000 0 99.590% Deutsche Bank Securities Inc. 0 $39,500,000 99.590% Citigroup Global Markets Inc. 0 0 -- Goldman, Sachs & Co. 0 0 -- - ----------------------------------------------------------------------------------------------------- Total $39,500,000 $39,500,000 99.590% - -----------------------------------------------------------------------------------------------------
SCHEDULE B LIST OF SERVICING AGREEMENTS 1. Alternative Servicing Agreement dated October 16, 2001, as amended, between The Pennsylvania Higher Education Assistance Agency and The First Marblehead Corporation. 2. Non-FFELP Loan Servicing Agreement dated as of May 1, 2003 between Great Lakes Educational Loan Services, Inc. and The First Marblehead Corporation. 3. Loan Servicing Agreement dated August 1, 2001, as amended, between Nelnet, Inc. (formerly known as Nelnet Loan Services, Inc.) and The First Marblehead Corporation. SCHEDULE C LIST OF STUDENT LOAN PURCHASE AGREEMENTS Each Student Loan Purchase Agreement, as amended or supplemented, in connection with each of the loan programs listed below, entered into between each of the loan originators listed below and The First Marblehead Corporation as follows: 1. Bank One, N.A. 2. Charter One Bank, N.A. 3. Bank of America, N.A. 4. Chase Manhattan Bank USA, N.A. 5. Citizens Bank of Rhode Island 6. First National Bank Northeast 7. GMAC Bank 8. HSBC Bank USA 9. The Huntington National Bank 10. National City Bank 11. Sun Trust Bank EX-4.1 3 ncf_ex4-1.txt INDENTURE EXHIBIT 4.1 EXECUTION COPY INDENTURE between THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, as Issuer and U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee Relating To: The National Collegiate Student Loan Trust 2004-1 Dated as of June 1, 2004 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 Reconciliation and tie between Trust Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA") and this Indenture of Trust, dated as of June 1, 2004. TRUST INDENTURE ACT SECTION INDENTURE SECTION Section 310(a)(1) 6.11 Section 310(a)(3) 9.08 Section 310(b) 6.11 Section 313(c) 3.24, 9.07 Section 314(c) 8.13 Section 314(d)(1) 8.13 Section 3.18 9.08 - -------------------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. Attention should also be directed to Section 318(c) of the Trust Indenture Act, which provides that the provisions of Sections 310 to and including 317 of the Trust Indenture Act are a part of and govern every qualified indenture, whether or not physically contained therein.
TABLE OF CONTENTS Page ARTICLE I Definitions and Usage SECTION 1.01 Definitions and Usage.......................................................................2 ARTICLE II The Notes SECTION 2.01 Form 2 SECTION 2.02 Execution, Authentication and Delivery......................................................3 SECTION 2.03 Temporary Notes.............................................................................3 SECTION 2.04 Registration; Registration of Transfer and Exchange.........................................4 SECTION 2.05 Mutilated, Destroyed, Lost or Stolen Notes.................................................12 SECTION 2.06 Persons Deemed Owner.......................................................................13 SECTION 2.07 Payment of Principal and Interest; Defaulted Interest......................................13 SECTION 2.08 Cancellation...............................................................................14 SECTION 2.09 Release of Collateral......................................................................14 SECTION 2.10 Book-Entry Notes...........................................................................14 SECTION 2.11 Notices to Clearing Agency.................................................................15 SECTION 2.12 Definitive Notes...........................................................................15 SECTION 2.13 Tax Treatment..............................................................................16 ARTICLE III Covenants SECTION 3.01 Payment to Noteholders.....................................................................16 SECTION 3.02 Maintenance of Office or Agency............................................................16 SECTION 3.03 Money for Payments To Be Held in Trust.....................................................17 SECTION 3.04 Existence..................................................................................18 SECTION 3.05 Protection of Indenture Trust Estate.......................................................18 SECTION 3.06 Opinions as to Indenture Trust Estate......................................................19 SECTION 3.07 Performance of Obligations; Servicing of Financed Student Loans............................19 SECTION 3.08 Negative Covenants.........................................................................21 SECTION 3.09 Annual Statement as to Compliance..........................................................21 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 Disposing of Financed Student Loans........................................................23 SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities..........................................24 SECTION 3.16 Capital Expenditures.......................................................................24 SECTION 3.17 Restricted Payments........................................................................25 SECTION 3.18 Notice of Events of Default................................................................25 SECTION 3.19 Further Instruments and Acts...............................................................25 SECTION 3.20 Additional Covenants.......................................................................25
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SECTION 3.21 Covenant Regarding Financed Student Loans..................................................26 SECTION 3.22 Additional Representations of the Issuer...................................................27 SECTION 3.23 Issuer Separateness Covenants..............................................................28 SECTION 3.24 Reports by Issuer..........................................................................29 SECTION 3.25 Rule 144A Information......................................................................30 ARTICLE IV Satisfaction and Discharge SECTION 4.01 Satisfaction and Discharge of Indenture....................................................30 SECTION 4.02 Application of Trust Money.................................................................31 SECTION 4.03 Repayment of Moneys Held by Paying Agent...................................................31 ARTICLE V Remedies SECTION 5.01 Events of Default..........................................................................31 SECTION 5.02 Acceleration of Maturity; Rescission and Annulment.........................................32 SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..................33 SECTION 5.04 Remedies; Priorities.......................................................................35 SECTION 5.05 Optional Preservation of the Financed Student Loans........................................38 SECTION 5.06 Limitation of Suits........................................................................38 SECTION 5.07 Unconditional Rights of Noteholders To Receive Principal and Interest......................39 SECTION 5.08 Restoration of Rights and Remedies.........................................................39 SECTION 5.09 Rights and Remedies Cumulative.............................................................40 SECTION 5.10 Delay or Omission Not a Waiver.............................................................40 SECTION 5.11 Control by Noteholders.....................................................................40 SECTION 5.12 Waiver of Past Defaults....................................................................40 SECTION 5.13 Undertaking for Costs......................................................................41 SECTION 5.14 Waiver of Stay or Extension Laws...........................................................41 SECTION 5.15 Action on Notes............................................................................41 SECTION 5.16 Performance and Enforcement of Certain Obligations.........................................41 SECTION 5.17 Notice of Defaults.........................................................................42 ARTICLE VI The Indenture Trustee SECTION 6.01 Duties of Indenture Trustee................................................................42 SECTION 6.02 Rights of Indenture Trustee................................................................43 SECTION 6.03 Individual Rights of Indenture Trustee.....................................................44 SECTION 6.04 Indenture Trustee's Disclaimer.............................................................45 SECTION 6.05 Notice of Defaults.........................................................................45 SECTION 6.06 Reports by Indenture Trustee to Noteholders................................................45 SECTION 6.07 Compensation and Indemnity.................................................................45 SECTION 6.08 Replacement of Indenture Trustee...........................................................45 SECTION 6.09 Successor Indenture Trustee by Merger......................................................46 SECTION 6.10 Appointment of Co-Trustee or Separate Trustee..............................................47 SECTION 6.11 Eligibility; Disqualification..............................................................48
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SECTION 6.12 Back-up Certification......................................................................48 ARTICLE VII Noteholders' Lists and Reports SECTION 7.01 Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.....................48 SECTION 7.02 Preservation of Information; Communications to Noteholders.................................48 SECTION 7.03 Reports by Issuer..........................................................................49 ARTICLE VIII Accounts, Disbursements and Releases SECTION 8.01 Collection of Money........................................................................49 SECTION 8.02 Trust Accounts.............................................................................50 SECTION 8.03 General Provisions Regarding Accounts......................................................56 SECTION 8.04 Release of Indenture Trust Estate..........................................................57 SECTION 8.05 Opinion of Counsel.........................................................................57 SECTION 8.06 Cost of Issuance Account...................................................................57 SECTION 8.07 Application of Collections.................................................................58 SECTION 8.08 Reserve Account............................................................................58 SECTION 8.09 Statements to Noteholders..................................................................59 SECTION 8.10 Pre-Funding Account........................................................................61 SECTION 8.11 Advances...................................................................................61 SECTION 8.12 Future Distribution Account................................................................62 ARTICLE IX Supplemental Indentures SECTION 9.01 Supplemental Indentures Without Consent of Noteholders.....................................62 SECTION 9.02 Supplemental Indentures with Consent of Noteholders........................................63 SECTION 9.03 Execution of Supplemental Indentures.......................................................64 SECTION 9.04 Effect of Supplemental Indenture...........................................................64 SECTION 9.05 [Reserved].................................................................................65 SECTION 9.06 Reference in Notes to Supplemental Indentures..............................................65 SECTION 9.07 Conformity With the Trust Indenture Act....................................................65 ARTICLE X Reporting Requirements SECTION 10.01 Annual Statement as to Compliance..........................................................65 SECTION 10.02 Annual Independent Public Accountants' Servicing Report....................................65 ARTICLE XI Miscellaneous SECTION 11.01 Compliance Certificates and Opinions, etc..................................................65 SECTION 11.02 Form of Documents Delivered to Indenture Trustee...........................................66 SECTION 11.03 Acts of Noteholders........................................................................67 SECTION 11.04 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies............................67
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SECTION 11.05 Notices to Noteholders; Waiver.............................................................68 SECTION 11.06 Alternate Payment and Notice Provisions....................................................68 SECTION 11.07 [Reserved].................................................................................69 SECTION 11.08 Effect of Headings and Table of Contents...................................................69 SECTION 11.09 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.....................................................................69 SECTION 11.16 Trust Obligations..........................................................................70 SECTION 11.17 No Petition................................................................................70 SECTION 11.18 Inspection.................................................................................70 SECTION 11.19 Third-Party Beneficiaries..................................................................71 APPENDIX A Definitions and Usage APPENDIX B Provisions Relating to Bearing Interest at an Auction Rate APPENDIX C Notice of Payment Default APPENDIX D Notice of Cure of Payment Default APPENDIX E Notice of Event of Default APPENDIX F Notice of Waiver/Cure of Event of Default APPENDIX G Notice of Proposed Change in Auction Period APPENDIX H Notice Regarding Establishment of Auction Period APPENDIX I Notice of Change in Auction Date SCHEDULE A Schedule of Initial Financed Student Loans SCHEDULE B Schedule of Subsequent Student Loans SCHEDULE C List of TERI Guarantee Agreements SCHEDULE D List of Student Loan Purchase Agreements EXHIBIT A-1 Form of Class A-1 Note EXHIBIT A-2 Form of Class A-2 Note EXHIBIT A-3 Form of Class A-3 Note EXHIBIT A-4 Form of Class A-4 Note EXHIBIT A-5 Form of Class A-IO-1 Note EXHIBIT A-6 Form of Class A-IO-2 Note EXHIBIT A-7 Form of Class B-1 Note EXHIBIT A-8 Form of Class B-2 Note EXHIBIT B Form of Student Loan Acquisition Certificate EXHIBIT C Form of Transferee Letter EXHIBIT D Form of Rule 144A Certification EXHIBIT E Form of Transfer Certificate for Rule 144A Global Note to Regulation S Global Note during Restricted Period
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EXHIBIT F Form of Transfer Certificate for Rule 144A Global Note to Regulation S Global Note after Restricted Period EXHIBIT G Form of Transfer Certificate for Regulation S Global Note to Rule 144A Global Note during Restricted Period EXHIBIT H Form of Transfer Certificate for Regulation S Global Note during Restricted Period EXHIBIT I Indenture Trustee Back-up Certification
v INDENTURE dated as of June 1, 2004, between THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, a Delaware statutory trust (the "Issuer"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee and not in its individual capacity (the "Indenture Trustee"). W I T N E S S E T H: -------------------- WHEREAS, the Issuer is duly created as a statutory trust under the laws of the State of Delaware and by proper action has duly authorized the execution and delivery of this Indenture, which Indenture provides for the issuance of student loan asset-backed notes to finance the acquisition of certain student loans from The National Collegiate Funding LLC (the "Depositor") and the payment to holders of the Notes; and WHEREAS, this Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"), that are deemed to be incorporated into this Indenture and shall, to the extent applicable, be governed by such provisions; NOW, THEREFORE, 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 Class A-1 Notes (the "Class A-1 Notes"), Class A-2 Notes (the "Class A-2 Notes"), Class A-3 Notes (the "Class A-3 Notes"), Class A-4 Notes (the "Class A-4 Notes"), 7.87% Class A-IO-1 Notes (the "Class A-IO-1 Notes"), 0.12% Class A-IO-2 Notes (the "Class A-IO-2 Notes"), Auction Rate Class B-1 Notes (the "Class B-1 Notes") and Auction Rate Class B-2 Notes (the "Class B-2 Notes" and together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-IO-1 Notes, Class A-IO-2 Notes and the Class B-1 Notes, the "Notes"): GRANTING CLAUSE The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as trustee for the benefit of the holders of the Notes, all the Issuer's right, title and interest in and to the following: (a) the Student Loans, and all obligations of the Obligors thereunder including all moneys paid thereunder on or after the Cutoff Date (or, in the case of Subsequent Student Loans, on or after the related Subsequent Cutoff Date); (b) all Servicing Agreements and all Student Loan Purchase Agreements, including the right of the Issuer to cause the Sellers to repurchase or the Servicers to purchase, Student Loans from the Issuer under circumstances described therein; (c) each Guarantee Agreement, including the right of the Issuer to cause the Guarantee Agency to make Guarantee Payments in respect of the Student Loans, the TERI Deposit and Security Agreement and the TERI Pledge Fund as the same relate to the Student Loans and the proceeds thereof, and each of the other Basic Documents; (d) all funds on deposit from time to time in the Trust Accounts related to the Notes (and sub-accounts thereof), including the Reserve Account Initial Deposit and the Pre-Funded Amount; and (e) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, 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, "Collateral"). The foregoing Grant is made in trust to secure the payment of principal of and/or interest on, as applicable, and any other amounts owing in respect of, the Notes, equally and ratably, without prejudice, priority or distinction, except as otherwise provided for herein, 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 holders of the Notes, 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 holders of the Notes may be adequately and effectively protected. ARTICLE I Definitions and Usage SECTION 1.01 DEFINITIONS AND USAGE. Except as otherwise specified herein or as the context may otherwise require, capitalized terms used but not defined herein are defined in Appendix A and Appendix B hereto, which also contain rules as to usage that shall be applicable herein. ARTICLE II The Notes SECTION 2.01 FORM. The Notes, together with the Indenture Trustee's certificate of authentication, shall be in substantially the forms set forth in Exhibits A-1 through A-8, 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 Exhibits A-1 through A-8, are part of the terms of this Indenture. 2 SECTION 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes. The Indenture Trustee shall upon an Issuer Order authenticate and deliver Notes for original issue in (i) an aggregate principal amount of $189,000,000 with respect to the Class A-1 Notes, $342,100,000 with respect to the Class A-2 Notes, $105,000,000 with respect to the Class A-3 Notes, $75,000,000 with respect to the Class A-4 Notes, $39,500,000 with respect to the Class B-1 Notes, and $39,500,000 with respect to the Class B-2 Notes, and (ii) an aggregate Notional Amount of $75,000,000 with respect to the Class A-IO-1 Notes and an aggregate Notional Amount of $75,000,000 with respect to the Class A-IO-2 Notes, except as provided in Section 2.05. As of any date of determination, the aggregate Notional Amount of the Class A-IO-1 Notes and the Class A-IO-2 Notes shall each equal the aggregate principal amount then outstanding of the Class A-4 Notes; PROVIDED, HOWEVER after the Quarterly Distribution Date occurring in June 2010, the Notional Amount of the Class A-IO-1 Notes shall equal $0. Each Note shall be dated the date of its authentication. The Class A Notes shall be issuable as registered Notes in the minimum denomination of $50,000 principal amount and in integral multiples of $1,000 in excess thereof. The Class B Notes shall be issuable as registered Notes in the minimum denomination of $50,000 principal amount and in integral multiples of $50,000 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 2.03 TEMPORARY NOTES. Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or 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 as the officers executing such Notes may determine, as evidenced by their execution of such Notes. If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the holder of the Notes. 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 initial principal amount or initial Notional Amount, as applicable, of Definitive Notes of authorized 3 denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes. SECTION 2.04 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. (a) The Indenture Trustee 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 and exchanges of Notes as herein provided. The Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor. (b) If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will 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 holders of the Notes and the principal amounts or Notional Amounts, as applicable, and number of such Notes. (c) The Issuer initially appoints the Indenture Trustee to act as custodian with respect to the Notes. The Securities Legend shall be placed on each Private Note. (d) 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 holder of the Notes thereof or such holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act. (e) No service charge shall be made to a holder of the Notes for any registration of transfer or exchange of Notes, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not involving any transfer. (f) On the Closing Date, the Issuer will execute and the Indenture Trustee will, upon Issuer Order, authenticate one or more Global Notes in an aggregate principal amount (or, in the case of the Class A-IO-1 Notes and Class A-IO-2 Notes, Notional Amount) that shall equal the applicable Original Principal Balance for each Class of Notes. The Global Notes, pursuant to the Depository's instructions, shall be delivered by the Administrator on behalf of the Depository to and deposited with the DTC Custodian, and shall be registered in the name of Cede & Co. and shall bear a legend substantially to the following effect: 4 "Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer 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 Global Notes may be deposited with such other Depository as the Administrator may from time to time designate, and shall bear such legend as may be appropriate; PROVIDED that such successor Depository maintains a book-entry system that qualifies to be treated as "registered form" under Section 163(f) of the Code. The Issuer and the Indenture Trustee are hereby authorized to execute and deliver a Note Depository Agreement with the Depository relating to the Global Notes. (g) With respect to Notes registered in the Note Register in the name of Cede & Co., as nominee of the Depository, the Administrator, the Owner Trustee and the Indenture Trustee shall have no responsibility or obligation to Participants or Indirect Participants or Beneficial Owners for which the Depository holds Notes from time to time as a Depository. Without limiting the immediately preceding sentence, the Administrator, the Owner Trustee and the Indenture Trustee shall have no responsibility or obligation with respect to (a) the accuracy of the records of the Depository, Cede & Co., or any Participant or Indirect Participant or Beneficial Owners with respect to the ownership interest in the Notes, (b) the delivery to any Participant or Indirect Participant or any other Person, other than a registered Noteholder, (c) the payment to any Participant or Indirect Participant or any other Person, other than a registered Noteholder as shown in the Note Register, of any amount with respect to any distribution of principal or interest on the Notes or (d) the making of book-entry transfers among Participants of the Depository with respect to Notes registered in the Note Register in the name of the nominee of the Depository. No Person other than a registered Noteholder as shown in the Note Register shall receive a Note evidencing such Note. (h) Upon delivery by the Depository to the Indenture Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions hereof with respect to the payment of distributions by the mailing of checks or drafts to the registered Noteholder appearing as registered owners in the Note Register on a Record Date, the name "Cede & Co." in this Indenture shall refer to such new nominee of the Depository. (i) Subject to the preceding paragraphs, upon surrender for registration of transfer of any Note at the office of the Note Registrar and, upon satisfaction of the conditions set forth below, the Issuer shall execute in the name of the designated transferee or transferees, a new Note of the same principal balance or Notional Amount and dated the date of authentication 5 by the Indenture Trustee. The Note Registrar shall notify the Administrator and the Indenture Trustee of any such transfer. By acceptance of an Individual Note relating to a Private Note, whether upon original issuance or subsequent transfer, each holder of such a Private Note acknowledges the restrictions on the transfer of such Private Note set forth in the Securities Legend and agrees that it will transfer such a Private Note only as provided herein. The Note Registrar shall register the transfer of any Individual Note relating to a Private Note if prior to the transfer the transferee furnishes to the Note Registrar a Transferee Letter in the form of Exhibit C hereto, provided that, if based upon an Opinion of Counsel to the effect that the delivery of such Transferee Letter is not sufficient to confirm that the proposed transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable laws, the Note Registrar may as a condition of the registration of any such transfer require the transferor to furnish other certifications, legal opinions or other information prior to registering the transfer of an Individual Note relating to a Private Note. (j) Subject to Section 2.04(n), so long as a Global Note relating to a Private Note remains outstanding and is held by or on behalf of the Depository, transfers of beneficial interests in the Global Note relating to a Private Note, or transfers by holders of Individual Notes relating to a Private Note to transferees that take delivery in the form of beneficial interests in the Global Note relating to a Private Note, may be made only in accordance with this Section 2.04(j) and in accordance with the rules of the Depository. (i) RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE DURING THE RESTRICTED PERIOD. If, during the Restricted Period, a Beneficial Owner of an interest in a Rule 144A Global Note wishes at any time to transfer its beneficial interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a Regulation S Global Note, such Beneficial Owner may, in addition to complying with all applicable rules and procedures of the Depository and Clearstream or Euroclear applicable to transfers by their respective participants (the "Applicable Procedures"), transfer or cause the transfer of such beneficial interest for an equivalent beneficial interest in the Regulation S Global Note only upon compliance with the provisions of this Section 2.04(j)(i). Upon receipt by the Note Registrar at its Corporate Trust Office of (1) written instructions given in accordance with the Applicable Procedures from a Depository Participant directing the Note Registrar to credit or cause to be credited to another specified Depository Participant's account a beneficial interest in the Regulation S Global Note in an amount equal to the denomination of the beneficial interest in the Rule 144A Global Note to be transferred, (2) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Depository Participant (and the Euroclear or Clearstream account, as the case may be) to be credited with, and the account of the Depository Participant to be debited for, such beneficial interest, and (3) a certificate in the form of Exhibit E hereto given by the Beneficial Owner that is transferring such interest, the Note Registrar shall instruct the Depository to reduce the denomination of the Rule 144A Global Note by the denomination of the beneficial interest in the Rule 144A Global Note to be 6 so transferred and, concurrently with such reduction, to increase the denomination of the Regulation S Global Note by the denomination of the beneficial interest in the Rule 144A Global Note to be so transferred, and to credit or cause to be credited to the account of the Person specified in such instructions (who shall be a Depository Participant acting for or on behalf of Euroclear or Clearstream, or both, as the case may be) a beneficial interest in the Regulation S Global Note having a denomination equal to the amount by which the denomination of the Rule 144A Global Note was reduced upon such transfer. (ii) RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE AFTER THE RESTRICTED PERIOD. If, after the Restricted Period, a Beneficial Owner of an interest in a Rule 144A Global Note wishes at any time to transfer its beneficial interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a Regulation S Global Note, such holder may, in addition to complying with all Applicable Procedures, transfer or cause the transfer of such beneficial interest for an equivalent beneficial interest in a Regulation S Global Note only upon compliance with the provisions of this Section 2.04(j)(ii). Upon receipt by the Note Registrar at its Corporate Trust Office of (1) written instructions given in accordance with the Applicable Procedures from a Depository Participant directing the Note Registrar to credit or cause to be credited to another specified Depository Participant's account a beneficial interest in the Regulation S Global Note in an amount equal to the denomination of the beneficial interest in the Rule 144A Global Note to be transferred, (2) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Depository Participant (and, in the case of a transfer pursuant to and in accordance with Regulation S, the Euroclear or Clearstream account, as the case may be) to be credited with, and the account of the Depository Participant to be debited for, such beneficial interest, and (3) a certificate in the form of Exhibit F hereto given by the Beneficial Owner that is transferring such interest, the Note Registrar shall instruct the Depository to reduce the denomination of the Rule 144A Global Note by the aggregate denomination of the beneficial interest in the Rule 144A Global Note to be so transferred and, concurrently with such reduction, to increase the denomination of the Regulation S Global Note by the aggregate denomination of the beneficial interest in the Rule 144A Global Note to be so transferred, and to credit or cause to be credited to the account of the Person specified in such instructions (who shall be a Depository Participant acting for or on behalf of Euroclear or Clearstream, or both, as the case may be) a beneficial interest in the Regulation S Global Note having a denomination equal to the amount by which the denomination of the Rule 144A Global Note was reduced upon such transfer. (iii) REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE. If the Beneficial Owner of an interest in a Regulation S Global Note wishes at any time to transfer its beneficial interest in such Regulation S Global Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in the Rule 144A Global Note, such holder may, in addition to complying with all Applicable Procedures, transfer or cause the transfer of such beneficial interest for an equivalent 7 beneficial interest in the Rule 144A Global Note only upon compliance with the provisions of this Section 2.04(j)(iii). Upon receipt by the Note Registrar at its Corporate Trust Office of (1) written instructions given in accordance with the Applicable Procedures from a Depository Participant directing the Note Registrar to credit or cause to be credited to another specified Depository Participant's account a beneficial interest in the Rule 144A Global Note in an amount equal to the denomination of the beneficial interest in the Regulation S Global Note to be transferred, (2) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Depository Participant to be credited with, and the account of the Depository Participant (or, if such account is held for Euroclear or Clearstream, the Euroclear or Clearstream account, as the case may be) to be debited for such beneficial interest, and (3) with respect to a transfer of a beneficial interest in the Regulation S Global Note for a beneficial interest in the related Rule 144A Global Note (i) during the Restricted Period, a certificate in the form of Exhibit G hereto given by the Beneficial Owner, or (ii) after the Restricted Period, a Rule 144A Certification in the form of Exhibit D hereto from the transferee to the effect that such transferee is a Qualified Institutional Buyer, the Note Registrar shall instruct the Depository to reduce the denomination of the Regulation S Global Note by the denomination of the beneficial interest in the Regulation S Global Note to be transferred, and, concurrently with such reduction, to increase the denomination of the Rule 144A Global Note by the aggregate denomination of the beneficial interest in the Regulation S Global Note to be so transferred, and to credit or cause to be credited to the account of the Person specified in such instructions (who shall be a Depository Participant acting for or on behalf of Euroclear or Clearstream, or both, as the case may be) a beneficial interest in the Rule 144A Global Note having a denomination equal to the amount by which the denomination of the Regulation S Global Note was reduced upon such transfer. (iv) TRANSFERS WITHIN REGULATION S GLOBAL NOTES DURING RESTRICTED PERIOD. If, during the Restricted Period, the Beneficial Owner of an interest in a Regulation S Global Note wishes at any time to transfer its beneficial interest in such Certificate to a Person who wishes to take delivery thereof in the form of a Regulation S Global Note, such Beneficial Owner may transfer or cause the transfer of such beneficial interest for an equivalent beneficial interest in such Regulation S Global Note only upon compliance with the provisions of this Section 2.04(j)(iv) and all Applicable Procedures. Upon receipt by the Note Registrar at its Corporate Trust Office of (1) written instructions given in accordance with the Applicable Procedures from a Depository Participant directing the Note Registrar to credit or cause to be credited to another specified Depository Participant's account a beneficial interest in such Regulation S Global Note in an amount equal to the denomination of the beneficial interest to be transferred, (2) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Depository Participant to be credited with, and the account of the Depository Participant (or, if such account is held for Euroclear or Clearstream, the Euroclear or Clearstream account, as the case may be) to be debited for, such beneficial interest and (3) a 8 certificate in the form of Exhibit H hereto given by the transferee, the Note Registrar shall instruct the Depository to credit or cause to be credited to the account of the Person specified in such instructions (who shall be a Depository Participant acting for or on behalf of Euroclear or Clearstream, or both, as the case may be) a beneficial interest in the Regulation S Global Note having a denomination equal to the amount specified in such instructions by which the account to be debited was reduced upon such transfer. The Note Registrar shall not be required to monitor compliance by Beneficial Owners of the provisions of this Section 2.04(j)(iv). (k) Any and all transfers from a Global Note relating to a Private Note to a transferee wishing to take delivery in the form of an Individual Note relating to a Private Note will require the transferee to take delivery subject to the restrictions on the transfer of such Individual Note relating to a Private Note described on the face of such Note, and such transferee agrees that it will transfer such Individual Note relating to a Private Note only as provided therein and herein. No such transfer shall be made and the Note Registrar shall not register any such transfer unless such transfer is made in accordance with this Section 2.04(k). (i) Transfers of a beneficial interest in a Global Note relating to a Private Note to a Qualified Institutional Buyer or a Regulation S Investor wishing to take delivery in the form of an Individual Note relating to a Private Note will be registered by the Note Registrar only upon compliance with the provisions of Section 2.04(j) and if the Note Registrar is provided with a Rule 144A Certification or a Regulation S Transfer Certificate, as applicable. (ii) Notwithstanding the foregoing, no transfer of a beneficial interest in a Regulation S Global Note to an Individual Note relating to a Private Note shall be made prior to the expiration of the Restricted Period. Upon acceptance for exchange or transfer of a beneficial interest in a Global Note for an Individual Note relating to a Private Note, as provided herein, the Note Registrar shall endorse on the schedule affixed to the related Global Note (or on a continuation of such schedule affixed to such Global Note and made a part thereof) an appropriate notation evidencing the date of such exchange or transfer and a decrease in the denomination of such Global Note equal to the denomination of such Individual Note relating to a Private Note issued in exchange therefor or upon transfer thereof. Unless determined otherwise by the Administrator in accordance with applicable law, an Individual Note relating to a Private Note issued upon transfer of or exchange for a beneficial interest in the Global Note shall bear the Securities Legend. (l) TRANSFERS OF INDIVIDUAL NOTE TO THE GLOBAL NOTES. If a Holder of an Individual Note relating to a Private Note wishes at any time to transfer such Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in the related Regulation S Global Note or the related Rule 144A Global Note, such transfer may be effected only in accordance with the Applicable Procedures, and this Section 2.04(l). Upon receipt by the Note Registrar at the Corporate Trust Office of (1) the Individual Note relating to a Private Note to be transferred with an assignment and transfer, (2) written instructions given in accordance with the Applicable Procedures from a Depository Participant directing the Note Registrar to 9 credit or cause to be credited to another specified Depository Participant's account a beneficial interest in such Regulation S Global Note or such Rule 144A Global Note, as the case may be, in an amount equal to the denomination of the Individual Note to be so transferred, (3) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Depository Participant (and, in the case of any transfer pursuant to Regulation S, the Euroclear or Clearstream account, as the case may be) to be credited with such beneficial interest, and (4) (x) if delivery is to be taken in the form of a beneficial interest in the Regulation S Global Note, a Regulation S Transfer Certificate from the transferor or (y) a Rule 144A Certification from the transferee to the effect that such transferee is a Qualified Institutional Buyer, if delivery is to be taken in the form of a beneficial interest in the Rule 144A Global Note, the Note Registrar shall cancel such Individual Note relating to a Private Note, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver a new Individual Note relating to a Private Note for the denomination of the Individual Note not so transferred, registered in the name of the Holder, and the Note Registrar shall instruct the Depository to increase the denomination of the Regulation S Global Note or the Rule 144A Global Note, as the case may be, by the denomination of the Individual Note to be so transferred, and to credit or cause to be credited to the account of the Person specified in such instructions (who, in the case of any increase in the Regulation S Global Note during the Restricted Period, shall be a Depository Participant acting for or on behalf of Euroclear or Clearstream, or both, as the case may be) a corresponding denomination of the Rule 144A Global Note or the Regulation S Global Note, as the case may be. It is the intent of the foregoing that under no circumstances may an investor that is not a Qualified Institutional Buyer or a Regulation S Investor take delivery in the form of a beneficial interest in a Global Note relating to a Private Note or an Individual Note relating to a Private Note. (m) An exchange of a beneficial interest in a Global Note for an Individual Note or Notes, an exchange of an Individual Note or Notes for a beneficial interest in a Global Note and an exchange of an Individual Note or Notes for another Individual Note or Notes (in each case, whether or not such exchange is made in anticipation of subsequent transfer, and in the case of the Global Notes, so long as the Global Notes remain outstanding and are held by or on behalf of the Depository), may be made only in accordance with this Section 2.04 and in accordance with the rules of the Depository and Applicable Procedures. (n) (i) Upon acceptance for exchange or transfer of an Individual Note relating to a Private Note for a beneficial interest in the Global Note as provided herein, the Note Registrar shall cancel such Individual Note and shall (or shall request the Depository to) endorse on the schedule affixed to the applicable Global Note (or on a continuation of such schedule affixed to the Global Note and made a part thereof) an appropriate notation evidencing the date of such exchange or transfer and an increase in the Note balance of the Global Note equal to the Note balance of such Individual Note exchanged or transferred therefor. (ii) Upon acceptance for exchange or transfer of a beneficial interest in the Global Note for an Individual Note relating to a Private Note as provided herein, the Note Registrar shall (or shall request the Depository to) endorse on the schedule affixed to the Global Note (or on a continuation of such schedule affixed to the Global Note and 10 made a part thereof) an appropriate notation evidencing the date of such exchange or transfer and a decrease in the Note balance of the Global Note equal to the Note balance of such Individual Note issued in exchange therefor or upon transfer thereof. (o) The Securities Legend shall be placed on any Individual Note relating to a Private Note issued in exchange for or upon transfer of another Individual Note relating to a Private Note or of a beneficial interest in the Global Note. No transfer of any Private Note shall be made unless such transfer is exempt from the registration requirements of the Securities Act and any applicable state securities laws or is made in accordance with said Act and laws. No transfer of any Private Note shall be made if such transfer would require the Issuer to register as an "investment company" under the Investment Company Act of 1940, as amended. In the event of any such transfer, unless such transfer is made in reliance on Rule 144A under the Securities Act or Regulation S under the Securities Act, (i) the Indenture Trustee may require a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Indenture Trustee that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from said Act and laws or is being made pursuant to said Act and laws, which Opinion of Counsel shall not be an expense of the Indenture Trustee or the Trust and (ii) the Indenture Trustee shall require the transferee to execute a Transferee Letter certifying to the Issuer and the Indenture Trustee the facts surrounding such transfer, which Transferee Letter shall not be an expense of the Indenture Trustee, or the Trust. The holder of a Private Note desiring to effect such transfer shall, and does hereby agree to, indemnify the Indenture Trustee, and the Trust 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. None of the Issuer, the Indenture Trustee or the Trust intends or is obligated to register or qualify any Private Note under the Securities Act or any state securities laws. No Note may be acquired directly or indirectly by a fiduciary of, on behalf of, or with "Plan Assets" (within the meaning of Section 2510.3-101 of the U.S. Department of Labor regulations (the "Plan Asset Regulation")) of, an "employee benefit plan" as defined in Section 3(3) of ERISA, a "plan" within the meaning of Section 4975 of the Code or any other entity whose underlying assets include Plan Assets by reason of any plan's investment in the entity, which is subject to Title I of ERISA or Section 4975 of the Code (a "Plan"), unless (i) such Note is rated investment grade or better as of the date of purchase, (ii) the transferee of the Note believes that the Note is properly treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulation and agrees to so treat such Note and (iii) the acquisition and holding of the Note do not result in a violation of the prohibited transaction rules of ERISA or Section 4975 of the Code (A) because it is covered by an applicable exemption, including Prohibited Transaction Class Exemption 96-23, 95-60, 91-38, 90-1 or 84-14, or (B) by reason of the Trust, the Administrator, the Underwriters, the Servicers, the Indenture Trustee, the Owner Trustee, any provider of credit support or any of their affiliates not being a "Party in Interest" (within the meaning of Section 3(14) of ERISA) with respect to such Plan. No transfer of a Note shall be made unless the Indenture Trustee shall have received a certification from the transferee of such Note, acceptable to and in form and substance satisfactory to the Indenture Trustee and the Issuer, to the effect that such transferee is acquiring a Note in conformance with the requirements of the preceding sentence. Notwithstanding anything else to the contrary herein, in 11 the event any purported transfer of any Note is made without delivery of the certification referred to above, such certification shall be deemed to have been made by the transferee by its acceptance of a Note. Notwithstanding any other provision of this Indenture to the contrary, no transfer, sale, pledge or other disposition of one or more Class A-4 Notes, Class A-IO-1 Notes or Class A-IO-2 Notes (a "Transfer") shall be made unless simultaneously with the Transfer (1) a proportionate amount of Class A-IO-1 Note, Class A-IO-2 Notes and Class A-4 Notes are Transferred so that the ratio of the Notional Amount of the Class A-IO-1 Notes so Transferred to the Notional Amount of all Class A-IO-1 Notes, the ratio of the Notional Amount of the Class A-IO-2 Notes so Transferred to the Notional Amount of all Class A-IO-2 Notes, and the ratio of the principal amount of the Class A-4 Notes so Transferred to the principal amount of all Class A-4 Notes are equal and (2) the Transfers of the Class A-IO-1 Notes, the Class A-IO-2 Notes and the Class A-4 Notes referred to herein are made to the same Person. The Indenture Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Participants, members or Beneficial Owners in any Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. SECTION 2.05 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it 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 instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable without surrender thereof. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith. Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the holder of the Notes thereof of a sum sufficient to cover any tax or other 12 governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith. Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. SECTION 2.06 PERSONS DEEMED OWNER. Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of (with respect to each Class of Notes other than the Class A-IO Notes) and interest on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Issuer or the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary. SECTION 2.07 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST. (a) The Class A Notes shall accrue interest as provided in the applicable form of such Class set forth in Exhibits A-1 through A-6 respectively, and each other Class of Notes shall accrue interest as provided in Appendix B, and such interest accrued on each Class of Notes shall be payable on each applicable Distribution Date as specified therein, subject to Section 3.01. Any installment of interest or principal, if any, with respect to each Class of Notes payable on any applicable Note which is punctually paid or duly provided for by the Issuer on the applicable Distribution Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the 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 will 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 applicable Note Final Maturity Date which shall be payable as provided below. The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03. (b) The principal of each Note, other than the Class A-IO Notes, shall be payable in installments on each Distribution Date as provided in the applicable form of Note set forth in Exhibits A-1 through A-8, respectively, to the extent the amount of funds required and available to be distributed in respect of principal on such Class of Notes pursuant to the terms of this Indenture; PROVIDED, HOWEVER, the entire unpaid principal amount of each Class of Notes, other than the 13 Class A-IO Notes, shall be due and payable on its respective Final Maturity Date. Notwithstanding the foregoing, the entire unpaid principal amount of the Notes, other than the Class A-IO Notes, shall be due and payable, if not previously paid, on the date on which an Event of Default shall have occurred and is continuing, if the Indenture Trustee or the Interested Noteholders holding a majority of the Outstanding Amount of the related Classes of Notes have declared the Notes to be immediately due and payable in the manner provided in Section 5.02. All principal payments on each Class of Class A Notes, other than the Class A-IO Notes, shall be made pro rata to the holders of such Class of Notes entitled thereto. All principal payments on each Class of Auction Rate Notes shall be made as described in Appendix B hereto and, with respect to each Class of Auction Rate Notes receiving a principal payment, the Trustee shall select the Outstanding Auction Rate Notes of such Class to receive principal payments by lot, or in its discretion, on a pro rata basis. 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 any Class of Notes 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. (c) If the Issuer defaults in a payment of interest on any Class of the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Note Interest Rate in any lawful manner. The Issuer shall pay such defaulted interest to the persons who are holders of such Class or Classes of Notes on a subsequent special record date, which date shall be at least three Business Days prior to the payment date. The Issuer shall fix or cause to be fixed any such special record date and payment date, and, at least 15 days before any such special record date, the Issuer shall mail to each holder of the affected Class or Classes of Notes and the Indenture Trustee a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.08 CANCELLATION. All Notes surrendered for payment, registration of transfer or exchange 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 cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time, unless the Issuer shall direct by an Issuer Order that they be returned to it and so long as such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee. SECTION 2.09 RELEASE OF COLLATERAL. Subject to Section 11.01 and the terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officers' Certificate of the Issuer. 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 14 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 will 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 may deal with the Clearing Agency for all purposes (including the payment of principal of and interest and other amounts on the Notes) as the authorized representative of the Note Owners; (iii) to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control; (iv) the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants pursuant to the Note Depository Agreements. 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 the holders of the 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 holders of the Notes 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 communications specified herein to be given to the holders of the Notes 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 properly discharge its responsibilities with respect to the Notes, and the Administrator is unable to locate a qualified successor, (ii) circumstances change so that the book-entry system through the Clearing Agency is less advantageous due to economic or administrative burden or the use of the book-entry system becomes unlawful with respect to the Notes or the Issuer notifies the Indenture Trustee in writing that because of the change in circumstances the Issuer is terminating the book-entry system with respect to the Notes or (iii) after the occurrence of an Event of Default, Note Owners 15 representing beneficial interests aggregating at least a majority of the Outstanding Amount of such Class of Notes advise the Clearing Agency (which shall then notify the Indenture Trustee) in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Note Owners of such Class of Notes, then the Indenture Trustee will cause the Clearing Agency to notify all Note Owners of such Class of Notes, through the Clearing Agency, of the occurrence of any such event and of the availability of Definitive Notes to such 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 the Noteholders for such Class of Notes. SECTION 2.13 TAX TREATMENT. The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for federal, state and local income, business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuer. The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of its Note, agree to treat the Notes for federal, state and local income, business and franchise tax purposes as indebtedness of the Issuer. ARTICLE III Covenants SECTION 3.01 PAYMENT TO NOTEHOLDERS. The Issuer will duly and punctually pay the principal of and interest owing on each Class of Notes pursuant to the terms of this Indenture. Without limiting the foregoing, subject to Section 8.02, the Issuer will cause to be distributed to the holders of the each Class of Notes that portion of the amounts on deposit in the Trust Accounts on a Distribution Date, to which the holders of each Class of Notes are entitled to receive pursuant to the terms of this Indenture. Amounts properly withheld under the Code by any Person from a payment to any holder of the Notes of interest on and/or principal of shall be considered as having been paid by the Issuer to such holder of the applicable Notes for all purposes of this Indenture. The Notes will be non-recourse obligations of the Issuer and shall be limited in right of payment to amounts available from the Indenture Trust Estate as provided in this Indenture and the Issuer shall not be otherwise liable on the Notes. SECTION 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will 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. The Issuer hereby initially designates U.S. Bank National Association, U.S. Bank Trust New York, 100 Wall Street, Suite 1600, New York, New York 10005 to serve as its agent for the foregoing purposes. The Issuer will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders may be made 16 or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders in respect of the Notes. SECTION 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in Section 8.02, 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 8.02 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. The Indenture Trustee is hereby appointed as the initial "Paying Agent" hereunder and the Indenture Trustee hereby accepts such appointment. On or before the Business Day next preceding each Distribution 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 each Class of 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 will 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 each Class of 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 any Class of Notes; (iii) at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; (iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of each applicable Class 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 Class of the Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith. The Administrator may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by written order direct any Paying Agent to pay to the 17 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; and the holder of such Notes 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 remaining will be repaid to the Issuer. SECTION 3.04 EXISTENCE. The Issuer will keep in full effect its existence, rights and franchises as a 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 will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will 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 3.05 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, instruments of further assurance and other instruments, and will take such other action necessary or advisable to: (i) maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof; (ii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture; (iii) enforce any of the Collateral; or (iv) preserve and defend title to the Indenture Trust Estate and the rights of the Indenture Trustee, and the holders of the Notes in such Indenture Trust Estate against the claims of all persons and parties. 18 The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required to be executed pursuant to this Section. SECTION 3.06 OPINIONS AS TO INDENTURE TRUST ESTATE. (a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and security interest of this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective. (b) On or before April 30 in each calendar year, beginning in 2005, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until April 30 in the following calendar year. SECTION 3.07 PERFORMANCE OF OBLIGATIONS; SERVICING OF FINANCED 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 or the other Basic Documents. (b) Although the Issuer will contract with other Persons to assist it in performing its duties under this Indenture, 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. Initially, the Issuer has contracted with the Servicers and the Administrator to assist the Issuer in performing its duties under this Indenture. (c) The Issuer will enforce all of its rights under this Indenture and the Basic Documents, including, without limitation, enforcing the covenants and agreements of the Depositor in the Deposit and Sale Agreement (including covenants to the effect that the Depositor will enforce covenants against the Sellers under the Student Loan Purchase Agreements), and will punctually perform and observe all of its obligations and agreements contained in this Indenture, the other Basic Documents and in the instruments and agreements 19 included in the Indenture Trust Estate, including filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture 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 and the Interested Noteholders holding a majority of the Outstanding Amount of the related Classes of Notes). (d) If the Issuer shall have knowledge of the occurrence of a Servicer Default or an Administrator Default, 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 a 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 Financed 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) Upon any partial or complete termination of the Servicer's rights and powers pursuant to a 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 the Rating Agencies. As soon as a successor Servicer or a successor Administrator is appointed, the Issuer shall notify the Indenture Trustee and the Rating Agencies of such appointment, specifying in such notice the name and address of such Successor Servicer or such Successor Administrator. (f) 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 and the Interested Noteholders holding a majority of the Outstanding Amount of the Related Classes of 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 therein, or waive timely performance or observance by the Servicers, the Administrator, the Depositor, the Issuer or the Owner 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, collections of payments with respect to Student Loans or distributions that shall be required to be made for the benefit of the holders of Notes, (ii) amend the aforesaid percentage of the Outstanding Amount of the related Class or Classes of Notes, which are required to consent to any such amendment, without the consent of all outstanding holders of all Classes of Notes affected by such amendment. If any such amendment, modification, supplement or waiver shall be so consented to by the Indenture Trustee and such holders of the Notes, the Issuer 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. 20 SECTION 3.08 NEGATIVE COVENANTS. So long as any Notes are Outstanding, the Issuer shall not: (i) except as expressly permitted by this Indenture or any other Basic Document, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Indenture Trust Estate, unless directed to do so by the Indenture Trustee pursuant to the terms hereof; (ii) claim any credit on, or make any deduction from the principal or interest payable in respect of, the applicable 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 holder of the Notes 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, in each case arising solely as a result of an action or omission of the related Obligor, 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 3.09 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver to the Indenture Trustee, on or before March 15 of each year, commencing March 15, 2005, an Officers' Certificate of the Issuer stating that: (i) a review of the activities of the Issuer during the previous calendar 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 21 to the Indenture Trustee, the due and punctual payment of the principal of and interest on each Class of 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 tax consequence to the Issuer, any holder of the Notes or any holder of the Certificates; (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. (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 assumes, 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 on each Class of 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 agrees 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 holders of the Notes and (D) unless otherwise provided in such supplemental indenture, expressly agrees 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; (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; 22 (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 tax consequence to the Issuer, any holder of the Notes or any holder of the Certificates; (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. 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), The National Collegiate Student Loan Trust 2004-1 will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery by the Issuer of written notice to the Indenture Trustee stating that The National Collegiate Student Loan Trust 2004-1 is to be so released. SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage in any business other than financing, purchasing, owning, selling and servicing the Financed Student Loans and making Additional Fundings in the manner contemplated by this Indenture and the other Basic Documents and activities incidental thereto. SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes. SECTION 3.14 DISPOSING OF FINANCED STUDENT LOANS. Other than pursuant to Article V, Financed Student Loans may only be sold, transferred, exchanged or otherwise disposed of by the Indenture Trustee free from the lien of this Indenture (i) for transfer to a Guarantee Agency pursuant to the terms of the applicable Guarantee Agreement; (ii) to a Seller or the Depositor in accordance with the applicable Student Loan Purchase Agreement or the Deposit and Sale Agreement; or (iii) to a Servicer in and, in each case, if the Indenture Trustee is provided with the following: (a) an Issuer Order stating the sale price and directing that Financed Student Loans be sold, transferred or otherwise disposed of and delivered to a transferee whose name shall be specified; and 23 (b) a Certificate signed by an Authorized Officer of the Issuer to the effect that the disposition price is equal to or in excess of the amount required by the applicable Guarantee Agreement in the case of clause (i), by the applicable Student Loan Purchase Agreement in the case of clause (ii), or by the applicable Servicing Agreement in the case of clause (iii). (c) Subject to the provisions of this Indenture and except for sales of Financed Student Loans pursuant to this Section 3.14, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Order, an Opinion of Counsel and independent certificates in accordance with TIA Sections 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. (d) 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 Financed Student Loan to be sold pursuant to this Section 3.14, and each Noteholder, by the acceptance of a Note, consents to any such release. The Indenture Trustee, as a third-party beneficiary under the Student Loan Purchase Agreements entered into by the Depositor, who has assigned its entire right, title and interest in such Student Loan Purchase Agreements to the Issuer pursuant to the terms of the Deposit and Sale Agreement, shall have the right to request the repurchase of loans by the applicable Seller or the Depositor, as the case may be, together with any indemnity payments due thereunder upon the conditions and subject to the provisions contained in the Student Loan Purchase Agreements. The Indenture Trustee shall make such a request to the applicable Seller under the related Student Loan Purchase Agreement or the Depositor under the Deposit and Sale Agreement, as the case may be, to repurchase and, as the case may be, pay any indemnity amounts due with respect to certain specific loans pursuant to the Student Loan Purchase Agreements or the Deposit and Sale Agreement, as applicable, if (i) the Indenture Trustee has actual knowledge that the conditions precedent to such a repurchase or indemnity obligation with respect to such loans have been satisfied; (ii) it has notified the Issuer in writing that such conditions have been satisfied; and (iii) the Issuer has not exercised its right to request the repurchase or indemnity of the applicable loans by the applicable Seller or the Depositor, as the case may be, within 10 days after receiving written notice from the Indenture Trustee. SECTION 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as contemplated by this Indenture or 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). 24 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 Owner 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 Depositor, the Servicers 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 such persons 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 Servicer of its obligations under a Servicing Agreement or the Administrator of its obligations under the Administration Agreement. In addition, the Issuer shall deliver to the Indenture Trustee, within five days after the occurrence thereof, written notice in the form of an Officers' Certificate of the Issuer of any event which with the giving of notice and the lapse of time would become an Event of Default under Section 5.01(iii), its status and what action the Issuer is taking or proposes to take with respect thereto. SECTION 3.19 FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 3.20 ADDITIONAL COVENANTS. The Issuer covenants that it will acquire or cause to be acquired Student Loans as described herein. The Noteholders shall not in any circumstances be deemed to be the owner or holder of the Financed Student Loan. The Issuer, or its designated agent, shall be responsible for each of the following actions: (a) The Issuer, or its designated agent, shall cause the benefits of the Guarantee Agreements to flow to the Indenture Trustee. (b) The Indenture Trustee shall have no obligation to administer, service or collect the loans in the Trust Estate or to maintain or monitor the administration, servicing or collection of such loans. (c) The Issuer shall comply with all United States statutes, rules and regulations which apply to the Student Loan Programs, the Program Manual and the Student Loans. (d) The Issuer shall cause to be diligently enforced and taken all reasonable steps, actions and proceedings necessary for the enforcement of all terms, covenants and conditions of all Student Loans made and agreements in connection therewith, including the 25 prompt payment of all principal and interest payments and all other amounts due the Issuer thereunder. The Issuer shall not permit the release of the obligations of any borrower under any Student Loan and shall at all times, to the extent permitted by law, cause to be defended, enforced, preserved and protected the rights and privileges of the Issuer, the Indenture Trustee and of the Noteholders under or with respect to each Student Loan and agreement in connection therewith. (e) The Issuer shall take all appropriate action to ensure that at the time each Student Loan becomes a part of the Trust Estate it shall be free and clear from all liens. (f) The Issuer shall diligently enforce, and take all steps, actions and proceedings reasonably necessary to protect its rights with respect to each Student Loan, and to maintain any Guarantee (including the Guarantee issued by TERI) on and to enforce all terms, covenants and conditions of Student Loans, including its rights and remedies under any Student Loan Purchase Agreement and the TERI Pledge Fund. The Trustee shall not be deemed to be the designated agent for the purposes of this Section unless it has agreed in writing to be such agent. SECTION 3.21 COVENANT REGARDING FINANCED STUDENT LOANS. The Issuer hereby covenants that all Student Loans to be acquired hereunder will meet the following: (a) Each Student Loan is evidenced by an executed promissory note, which note is a valid and binding obligation of the Obligor, enforceable by or on behalf of the holder thereof in accordance with its terms, subject to bankruptcy, insolvency and other laws relating to or affecting creditors' rights. (b) The amount of the unpaid principal balance of each Student Loan is due and owing, and no counterclaim, offset, defense or right to rescission exists with respect to any such Student Loan which can be asserted and maintained or which, with notice, lapse of time, or the occurrence or failure to occur of any act or event, could be asserted and maintained by the Obligor against the Issuer as assignee thereof. The Issuer shall take all reasonable actions to assure that no maker of a Student Loan has or may acquire a defense to the payment thereof. (c) No Student Loan has a payment that is more than 90 days overdue other than such Student Loans that, in the aggregate, do not exceed 1.00% of the then aggregate outstanding principal amount of the Student Loans. (d) The Issuer has full right, title and interest in each Student Loan free and clear of all liens, pledges or encumbrances whatsoever. (e) Each Student Loan was made in compliance with all applicable state and federal laws, rules and regulations, including, without limitation, all applicable nondiscrimination, truth-in-lending, consumer credit and usury laws. (f) All loan documentation shall be delivered to the Servicer (as custodian for the Indenture Trustee) prior to payment of the purchase price of such Student Loan. 26 (g) Each Student Loan is accruing interest (whether or not such interest is being paid currently by the borrower or is being capitalized), except as otherwise expressly permitted by this Indenture. (h) Each Student Loan was originated in conformity with the "loan acceptance criteria" (including, without limitation, any general policies, eligible borrower criteria, creditworthiness criteria and "good credit" criteria) and the "loan program terms" (including, without limitation, the loan amount, the interest rate and the guaranty fee) (or any similar criteria or terms, however so designated, under the applicable Program Manual) contained in the Program Manual and otherwise, in substantial conformity with the Program Manual. (i) Each Student Loan is guaranteed by a Guarantee Agency. SECTION 3.22 ADDITIONAL REPRESENTATIONS OF THE ISSUER. The Issuer hereby makes the following representations and warranties to the Indenture Trustee, on behalf of the Noteholders: (a) VALID AND CONTINUING SECURITY INTEREST. This Indenture creates a valid and continuing security interest (as defined in the applicable Uniform Commercial Code ("UCC") in effect in the State of Delaware) in the Financed Student Loans and all other assets constituting part of the Trust Estate in favor of the Indenture Trustee, which security interest is prior to all other liens, charges, security interests, mortgages or other encumbrances, and is enforceable as such as against creditors of and purchasers from Issuer. (b) ACCOUNTS. The Financed Student Loans constitute "accounts" or "payment intangibles" within the meaning of the applicable UCC. (c) GOOD AND MARKETABLE TITLE. The Issuer owns and has good and marketable title to the Financed Student Loans and all other assets constituting part of the Trust Estate free and clear of any lien, charge, security interest, mortgage or other encumbrance, claim or encumbrance of any Person, other that those granted pursuant to this Indenture. (d) PERFECTION BY FILING. The Issuer has caused or will have caused, within ten days of the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Financed Student Loans and all other assets of the Trust Estate granted to the Trustee hereunder. (e) PERFECTION BY POSSESSION. The Issuer has given the Indenture Trustee a copy of a written acknowledgment from the applicable custodian that the custodian is holding executed copies of the promissory notes and master promissory notes that constitute or evidence the Financed Student Loans, and that such custodian is holding such notes solely on behalf and for the benefit of the Indenture Trustee. (f) PRIORITY. Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Financed Student Loans or any other portion of the Trust Estate. The Issuer has not authorized the filing of and is not aware of any financing statements 27 against the Issuer that include a description of collateral covering the Financed Student Loans or any other portion of the Trust Estate other than any financing statement relating to the security interest granted to the Trustee hereunder or that has been terminated. The Issuer is not aware of any judgment or tax lien filings against the Issuer. (g) VALID BUSINESS REASONS; NO FRAUDULENT TRANSFERS. The transactions contemplated by this Indenture are in the ordinary course of the Issuer's business and the Issuer has valid business reasons for granting the Indenture Trust Estate pursuant to this Indenture. At the time of each such grant: (i) the Issuer granted the Indenture Trust Estate to the Indenture Trustee without any intent to hinder, delay, or defraud any current or future creditor of the Issuer; (ii) the Issuer was not insolvent and did not become insolvent as a result of any such grant; (iii) the Issuer was not engaged and was not about to engage in any business or transaction for which any property remaining with such entity was an unreasonably small capital or for which the remaining assets of such entity are unreasonably small in relation to the business of such entity or the transaction; (iv) the Issuer did not intend to incur, and did not believe or should not have reasonably believed, that it would incur, debts beyond its ability to pay as they become due; and (v) the consideration paid received by the Issuer for the grant of the Indenture Trust Estate was reasonably equivalent to the value of the related grant. SECTION 3.23 ISSUER SEPARATENESS COVENANTS. So long as any of the Notes are Outstanding: (a) The Issuer shall not engage in any business or activity other than in connection with the activities contemplated hereby and in the Basic Documents, and in connection with the issuance of Notes. (b) The funds and other assets of the Issuer shall not be commingled with those of any other individual, corporation, estate, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof. (c) The Issuer shall not be, become or hold itself out as being liable for the debts of any other party. (d) The Issuer shall not form, or cause to be formed, any subsidiaries. (e) The Issuer shall act solely in its own name and through its duly authorized officers or agents in the conduct of its business, and shall conduct its business so as not to mislead others as to the identity of the entity with which they are concerned. (f) The Issuer shall maintain its records and books of account and shall not commingle its records and books of account with the records and books of account of any other Person. The books of the Issuer maybe kept (subject to any provision contained in the statutes) inside or outside the State of Delaware at such place or places as may be designated from time to time by the board of trustees or in the bylaws of the Issuer. (g) All actions of the Issuer shall be taken by a duly authorized officer or agent of the Issuer. 28 (h) The Issuer shall not amend, alter, change or repeal any provision contained in this Section without (i) the prior written consent of the Indenture Trustee, and (ii) satisfying the Rating Agency Condition. (i) The Issuer shall not amend its organizational documents or change its jurisdiction of formation without first satisfying the Rating Agency Condition. (j) All audited financial statements of the Issuer that are consolidated with those of any Affiliate thereof will contain detailed notes clearly stating that (i) all of the Issuer's assets are owned by the Issuer, and (ii) the Issuer is a separate entity with creditors who have received ownership and/or security interests in the Issuer's assets. (k) The Issuer will strictly observe legal formalities in its dealings with any of its Affiliates, and funds or other assets of the Issuer will not be commingled with those of any of its Affiliates. The Issuer shall not maintain joint bank accounts or other depository accounts to which any of its Affiliates has independent access. None of the Issuer's funds will at any time be pooled with the funds of any of its Affiliates. (l) The Issuer will maintain an arm's length relationship with each Seller (and any Affiliate thereof), the Depositor (and any Affiliate thereof), and any of the Issuer's Affiliates. Any Person that renders or otherwise furnishes services to the Issuer will be compensated by the Issuer at market rates for such services it renders or otherwise furnishes to the Issuer except as otherwise provided in this Indenture. The Issuer will not hold itself out to be responsible for the debts of the Seller, or the Depositor, the parent or the decisions or actions respecting the daily business and affairs of the Seller, the Depositor or the parent. (m) The Issuer shall not sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate except as expressly permitted by this Indenture. (n) The Issuer shall not claim any credit on, or make any deduction from, the principal amount of any of the Notes by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate. (o) The Issuer shall not permit the validity or effectiveness of this Indenture or any grant hereunder to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this Indenture, except as may be expressly permitted hereby. SECTION 3.24 REPORTS BY ISSUER. The Issuer will: (a) File with the Indenture Trustee, within 15 days after the Issuer is required to file the same with the SEC, 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 SEC may from time to time by rules and regulations prescribe), if any, which the Issuer may be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; (b) File with the Indenture Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such additional information, documents 29 and reports, if any, with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (c) Transmit by mail to the Noteholders, within 30 days after the filing thereof with the Indenture Trustee, in the manner and to the extent provided in TIA Section 313(c), such summaries of any information, documents and reports required to be filed by the Issuer, if any, pursuant to Section 3.24(a) and (b) as may be required by rules and regulations prescribed from time to time by the SEC. The Indenture Trustee may conclusively rely and accept such reports from the Issuer as fulfilling the requirements of this Section 3.24, with no further duty to examine such reports or to determine whether such reports comply with the prescribed timing, rules and regulations of the SEC. Delivery of such reports to the Indenture Trustee is for informational purposes only and the Indenture Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Indenture Trustee is entitled to rely on an Officers' Certificate). SECTION 3.25 RULE 144A INFORMATION. For so long as any of the Private Notes are outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) of the Securities Act, (i) the Issuer will provide or cause to be provided to any holder of such Notes and any prospective purchaser thereof designated by such a holder, upon the request of such holder or prospective purchaser, the information required to be provided to such holder or prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (ii) the Issuer shall update such information from time to time in order to prevent such information from becoming false and misleading and will take such other actions as are necessary to ensure that the safe harbor exemption from the registration requirements of the Securities Act under Rule 144A is and will be available for resales of such Private Notes conducted in accordance with Rule 144A. ARTICLE IV Satisfaction and Discharge SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of holders of the Notes to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of holders of the Notes, 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) a period of 367 days has expired after all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or 30 stolen and that have been replaced or paid as provided in Section 2.05 and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; (B) a period of 367 days has expired after the later of (i) the date on which no Notes are outstanding or (ii) the date on which the Issuer has paid or caused to be paid all other sums otherwise payable hereunder by the Issuer; and (C) the Issuer has delivered to the Indenture Trustee an Officers' Certificate of the Issuer and an Opinion of Counsel, each meeting the applicable requirements of Section 11.01 and, subject to Section 11.02, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. SECTION 4.02 APPLICATION OF TRUST MONEY. All moneys deposited with the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the holders of the particular Notes for the payment of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal of and interest on each Class of Notes; but such moneys need not be segregated from other funds except to the extent required herein or required by law. SECTION 4.03 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. ARTICLE V Remedies SECTION 5.01 EVENTS OF DEFAULT. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (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 three (3) Business Days (PROVIDED, HOWEVER, so long as any of the Senior Notes are outstanding, each holder of any Class B Note or the Note Owner of any such Class B Note by such 31 holder's acceptance of such Class B Note or beneficial interest therein, as the case may be, shall be deemed to have consented to the delay in payment of interest on such Class B Note and to have waived its right to institute suit for enforcement of any such payment); or; (ii) default in the payment of the principal of any Note (x) when the same becomes due and payable (but only to the extent there exists sufficient Available Funds, therefor), or (y) on the Final Maturity Date with respect thereto; or (iii) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture or any other Basic Document (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 any other Basic Document or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Interested Noteholders, representing not less than 25% of the Outstanding Amount of the applicable Classes of 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 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default should occur and be continuing, then and in every such case the Indenture Trustee at the direction of the Interested Noteholders representing not less than a majority of the 32 Outstanding Amount of the applicable Classes of Notes, shall 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 the holders of the Notes), and upon any such declaration the unpaid principal amount of the Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable. 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 Interested Noteholders representing not less than a majority of the Outstanding Amount of the applicable Classes of 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 have become due solely by such acceleration, have been cured or waived as provided in Section 5.12. No such rescission shall affect any subsequent default or impair any right consequent thereto. SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE. (a) 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 three Business Days, or (ii) default is made in the payment of the principal on the related Final Maturity Date of a Class of Notes when the same becomes due and payable in accordance with Section 2.07(b), the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the holders of the Notes, the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest at the rate specified in Section 2.07 and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel. (b) 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, or shall at the written direction of the Interested Noteholders, representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes, institute a Proceeding for the collection of the sums so due and unpaid, and prosecute such Proceeding to judgment or final decree, and 33 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. (c) If an Event of Default occurs and is continuing, the Indenture Trustee may, or shall at the written direction of the Interested Noteholders, representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes, as more particularly provided in Section 5.04, proceed to protect and enforce its rights, the rights of the holders of the Notes, as applicable, 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. (d) 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, may, or shall at the written direction of the Interested Noteholders representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes, 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 of and interest on each Class of Notes owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and the holders of the Notes allowed in such Proceedings; (ii) unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Notes 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 holders of the Notes and of the Indenture Trustee on their behalf; 34 (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 holders of the Notes allowed in any judicial proceedings relative to the Issuer, its creditors and its property; and (v) to take any other action with respect to such claims including participating as a member of any official committee of creditor's appointed in the matters as it deems necessary or advisable; and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such holders of the Notes 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 holders of the Notes 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. (e) 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 holder of the Notes any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder of the Notes thereof or to authorize the Indenture Trustee to vote in respect of the claim of any holder of the Notes in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person. (f) 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 holders of the Notes. (g) 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 holders of the Notes and it shall not be necessary to make any holder of the Notes a party to any such Proceedings. SECTION 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall have occurred and be continuing, the Indenture Trustee may, or shall at the written direction of the Interested Noteholders representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes (or such different percentage as set forth below), do one or more of the following (subject to Section 5.05): 35 (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 securing the Notes; (iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the holders of the Notes; and (iv) sell the Indenture Trust Estate securing the Notes 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; PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise liquidate the Indenture Trust Estate securing the Notes following an Event of Default, other than an Event of Default described in Section 5.01(i) or (ii), unless (x) 100% of the Noteholders consent to such sale, (y) the proceeds of such sale are sufficient to pay in full the principal of and the accrued interest on the Notes or (z) the Indenture Trustee determines that the collections on the Student Loans would not be sufficient on an ongoing basis to make all payments on the Notes as such payments would have become due if such obligations had not been declared due and payable, and the Indenture Trustee obtains the consent of the holders of Notes, representing not less than a 66.67% of the Outstanding Amount of the Notes. (b) If the Indenture Trustee collects any money or property under this Article V following the occurrence and during the continuation of an Event of Default with respect to Sections 5.01(i) or 5.01(ii) above or following the acceleration of the Notes pursuant to Section 5.02, it shall pay out the money or property in the following order: First: pro rata based upon amounts owed to the Owner Trustee for amounts due under Article X of the Trust Agreement, to the Indenture Trustee for amounts due under Section 6.07 and to the Grantor Trustee for amounts due under the Grantor Trust Agreement, not to exceed $150,000 per annum in the aggregate, (ii) to the Servicers, the Administrator and any Paying Agents, the unpaid fees owed by the Issuer to such parties, not to exceed $100,000 per annum in the aggregate, and (iii) to the Auction Agent and the Broker-Dealers, the unpaid fees owed by the Issuer to such parties; Second: to the holders of the Class A Notes 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 interest; Third: to the holders of the Class A Notes, other than the Class A-IO Notes, 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 Class A Notes for principal, until the Outstanding Amount of the Class A Notes is zero. 36 Fourth: to the holders of the Class B Notes for amounts due and unpaid on the Class B Notes for interest (other than Carry-Over Amounts) ratably, without preference or priority of any kind, according to the amounts due and payable on the Class B Notes for interest; Fifth: to the holders of the Class B Notes 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, until the Outstanding Amount of the Class B Notes is zero; Sixth: to the holders of the Class B Notes for amounts due and unpaid for Carry-Over Amounts, ratably without preference or priority of any kind, according to the amounts due and payable on the Class B Notes for Carry-Over Amounts; Seventh: pro rata based upon amounts owed, to the Owner Trustee, the Indenture Trustee and the Grantor Trustee, for all amounts due and owing to such parties under the Basic Documents to the extent not paid pursuant to priority FIRST above, to FMC, for any unreimbursed Advances made pursuant to Section 8.11, and to the Servicers, the Administrator any Paying Agents, the Auction Agent, the Broker-Dealers and the Guarantee Agency, for all amounts due and owing to such parties pursuant to the Basic Documents, and Eighth: to the Owner Trustee (on behalf of the Issuer), for distribution to the Certificateholders in accordance with the terms of the Trust Agreement. The Indenture Trustee may fix a record date and payment date for any payment to the holders of the Notes pursuant to this Section. At least 15 days before such record date, the Issuer shall mail to each holder of the Notes and the Indenture Trustee a notice that states the record date, the payment date and the amount to be paid. (c) If the Indenture Trustee collects any money or property under this Article V following the occurrence and during the continuation of an Event of Default other than with respect to Sections 5.01(i) or 5.01(ii) above or following the acceleration of the Notes pursuant to Section 5.02, it shall pay out the money or property in the following order: First: pro rata based upon amounts owed (i) to the Owner Trustee for amounts due under Article X of the Trust Agreement, to the Indenture Trustee for amounts due under Section 6.07 and to the Grantor Trustee for amounts due under the Grantor Trust Agreement, not to exceed $150,000 per annum in the aggregate, (ii) to the Servicers, the Administrator and any Paying Agents, the unpaid fees owed by the Issuer to such parties, not to exceed $100,000 per annum in the aggregate, and (iii) to the Auction Agent and the Broker-Dealers, the unpaid fees owed by the Issuer to such parties; Second: to the holders of the Class A Notes 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 interest; 37 Third: to the holders of the Class B Notes for amounts due and unpaid on the Class B Notes for interest (other than Carry-Over Amounts) ratably, without preference or priority of any kind, according to the amounts due and payable on the Class B Notes for interest; Fourth: to the holders of the Class A Notes, other than the Class A-IO Notes, 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 Class A Notes for principal, until the Outstanding Amount of the Class A Notes is zero. Fifth: to the holders of the Class B Notes 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, until the Outstanding Amount of the Class B Notes is zero; Sixth: to the holders of the Class B Notes for amounts due and unpaid for Carry-Over Amounts, ratably without preference or priority of any kind, according to the amounts due and payable on the Class B Notes for Carry-Over Amounts; Seventh: pro rata based upon amounts owed, to the Owner Trustee, the Indenture Trustee and the Grantor Trustee, for all amounts due and owning to such parties under the Basic Documents to the extent not paid pursuant to priority FIRST above, to FMC, for any unreimbursed Advances made pursuant to Section 8.11, and to the Servicers, the Administrator, any Paying Agents, the Auction Agent, the Broker-Dealers and the Guarantee Agency, for all amounts due and owing to such parties pursuant to the Basic Documents, and Eighth: to the Owner Trustee (on behalf of the Issuer), for distribution to the Certificateholders in accordance with the terms of the Trust Agreement. SECTION 5.05 OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS. If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, or shall at the written direction of the Interested Noteholders, representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes, elect to maintain possession of the related Indenture Trust Estate. It is the desire of the parties hereto and the holders of the Notes that there be at all times sufficient funds for the payment of principal of and interest on each Class of 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 5.06 LIMITATION OF SUITS. No holder of the Notes shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the 38 appointment of a receiver or trustee, or for any other remedy hereunder, unless the following conditions listed below are satisfied: (i) such holder of the Notes has previously given written notice to the Indenture Trustee of a continuing Event of Default; (ii) the holders of not less than 25% of the Outstanding Amount of the Notes, in the aggregate, 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 holders of the Notes 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 holders of a majority of the Outstanding Amount of the Notes in the aggregate; it being understood and intended that no one or more holders of the Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other holders of the Notes or to obtain or to seek to obtain priority or preference over any other holders of the Notes or to enforce any right under this Indenture, except in the manner herein provided. If the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Noteholders, each representing less than a majority of the Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture. SECTION 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST. Notwithstanding any other provisions in this Indenture, any holder of any Class of Notes 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 and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such holder of any such Class of Notes. SECTION 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee or any holder of Notes 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 holder of Notes, then and in every such case the Issuer, the Indenture Trustee and the holders of the Notes 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 holders of the Notes shall continue as though no such Proceeding had been instituted. 39 SECTION 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the holders of the Notes is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of the Indenture Trustee or any holder of Notes 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 holders of the Notes may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the holders of the Notes. SECTION 5.11 CONTROL BY NOTEHOLDERS. With respect to the Notes, the Interested Noteholders, representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes (or, in each case, if only one Class is affected thereby, a majority of the Outstanding Amount of such Class) 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 5.04, any direction to the Indenture Trustee to sell or liquidate the Indenture Trust Estate shall be by the holders of not less than 100% of the Outstanding Amount of the Notes; (iii) if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Indenture Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by the holders 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 6.01, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any holders of the Notes not consenting to such action. SECTION 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the acceleration of the Notes as provided in Section 5.02, the Interested Noteholders representing not less than a majority of the Outstanding Amount of the applicable Classes of Notes, may waive any past Default and its consequences except a Default (a) in payment when due of principal of or interest on any Note or (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of each holder of the Notes. In the case of any such 40 waiver, the Issuer, the Indenture Trustee and the holders of the Notes 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 holder of the Notes 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 holder of the Notes or group of holders of the Notes, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by any holder of the Notes 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. SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. SECTION 5.15 ACTION ON NOTES. The Indenture Trustee's right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the holders of the Notes shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Indenture Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b) or (c), as the case may be. SECTION 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a) Promptly following a request from the Indenture Trustee, and at the Administrator's expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Depositor, the Sellers, the Administrator and the Servicers, as applicable, of each of their obligations to the Issuer under or in connection with the Basic Documents in accordance with the terms thereof, and to exercise any and all rights, 41 remedies, powers and privileges lawfully available to the Issuer under or in connection with the Basic Documents, including the transmission of notices of default and the institution of legal or administrative actions or proceedings to compel or secure performance by the Depositor, the Sellers, the Administrator or the Servicers of each of their obligations under the Basic Documents. (b) If an Event of Default has occurred and is continuing, the Indenture Trustee shall at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter)) of the Interested Noteholders, representing not less than 66.67% of the Outstanding Amount of the applicable Classes of Notes, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor, the Sellers, the Administrator, the Servicers or the Guarantee Agency under or in connection with the Basic Documents, including the right or power to take any action to compel or secure performance or observance by the Depositor, the Sellers, the Administrator and the Servicers of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Basic Documents and any right of the Issuer to take such action shall be suspended. SECTION 5.17 NOTICE OF DEFAULTS. Within 90 days after the occurrence of any Default hereunder with respect to the Notes, the Indenture Trustee shall transmit in the manner and to the extent provided in TIA Section 313(c), notice of such Default hereunder to which a Responsible Officer of the Indenture Trustee has actual knowledge or is in receipt of a written notice thereof in accordance with the terms of this Indenture, unless such Default shall have been cured or waived; PROVIDED, HOWEVER, that, except in the case of a Default in the payment of the principal of or interest with respect to any Note, the Indenture Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Indenture Trustee in good faith determines that the withholding of such notice is in the interest of the Noteholders. ARTICLE VI The Indenture Trustee SECTION 6.01 DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and the other Basic Documents to which the Indenture Trustee is a party, 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 a Responsible Officer of the 42 Indenture Trustee and conforming to the requirements of this Indenture; PROVIDED, HOWEVER, that the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and (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) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section 6.01. (e) 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. (f) 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. (g) 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. (h) Except as expressly provided in the Basic Documents, the Indenture Trustee shall have no obligation to administer, service or collect the Financed Student Loans or to maintain, monitor or otherwise supervise the administration, servicing or collection of the Financed Student Loans. (i) In the event that the Indenture Trustee is the Paying Agent or the Note Registrar, the rights and protections afforded to the Indenture Trustee pursuant to this Indenture shall also be afforded to the Indenture Trustee in its capacity as Paying Agent or Note Registrar. (j) 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 6.01. SECTION 6.02 RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the 43 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 an Officers' Certificate of the Issuer 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. (f) In the event that the Person acting as Indenture Trustee is also acting as securities intermediary all the rights, powers, immunities and indemnities afforded to the Indenture Trustee under the Basic Documents shall also be afforded to the securities intermediary. (g) Absent willful misconduct or fraud, the Indenture Trustee shall not be liable for any punitive damages, regardless of the form of action and whether or not any such damages were foreseeable or contemplated. (h) The Indenture Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Indenture Trustee has actual knowledge thereof or unless written notice of any event which is in fact such Default or Event of Default is received by the Indenture Trustee at the Corporate Trust Office, and such notice references the Notes under this Indenture. (i) Any permissive right or authority granted to the Indenture Trustee shall not be construed as a mandatory duty. SECTION 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Section 6.11. 44 SECTION 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer's use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee's certificate of authentication. SECTION 6.05 NOTICE OF DEFAULTS. If a Default occurs and is continuing and if it is either actually known or written notice of the existence thereof has been received by a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each holder of the Notes notice of the Default within 90 days after it occurs. Except in the case of a Default in payment of principal of or interest on the Notes, the Indenture Trustee may withhold the notice to the holders of the Notes if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of holders of the Notes. SECTION 6.06 REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The Indenture Trustee shall deliver to each holder of the Notes (and to each Person who was a holder of the Notes 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. SECTION 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the Indenture Trustee from time to time reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Indenture. The Issuer further agrees to indemnify and save the Indenture Trustee harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or willful misconduct, to the extent solely payable from the Indenture Trust Estate. To secure the Indenture Trustee's right to receive amounts pursuant to this Section 6.07, the Indenture Trustee shall have a lien against the Indenture Trust Estate that is subordinate to the rights of the Noteholders. Without prejudice to its rights hereunder, when the Indenture Trustee incurs expenses or renders services after a Default specified in Sections 5.01(iv) or (v) occurs, such expenses and the compensation for such services (including the fees and expenses of its agent and counsel) shall constitute expenses of administration under the applicable bankruptcy law. The provisions of this Section 6.07 shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Indenture Trustee. SECTION 6.08 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any time by so notifying the Issuer. The Administrator 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; 45 (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 Administrator 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 the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to the holders of the Notes and each Rating Agency. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee upon payment of all monies due and owing to the retiring 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 holders of a majority in Outstanding Amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. If the Indenture Trustee fails to comply with Section 6.11, any holder of the Notes may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer's and the Administrator's obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee. SECTION 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust 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 46 shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have. SECTION 6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Indenture Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Indenture Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the holders of the Notes, 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 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 holders of the Notes of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Indenture Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee; (ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (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 47 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. There shall at all times be an Indenture Trustee hereunder which shall be eligible to act as Indenture Trustee under TIA Section 310(a)(1) and shall have a combined capital and surplus of at least $50,000,000 (and, with respect to any successor Indenture Trustee, having a rating of at least "Baa3" from Moody's unless the Rating Agency Condition is satisfied). If such corporation publishes reports of condition at least annually, pursuant to law or the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 6.11, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.11, it shall resign immediately in the manner and with the effect specified in this Article VI. Neither the Issuer nor any Person directly or indirectly controlling or controlled by, or under common control with, the Issuer shall serve as Indenture Trustee. SECTION 6.12 BACK-UP CERTIFICATION. The Indenture Trustee shall provide the Depositor with a certificate substantially in the form attached hereto as Exhibit I at the request of the Administrator; provided that the Indenture Trustee shall have no responsibility to file such certificate with the Securities and Exchange Commission. ARTICLE VII Noteholders' Lists and Reports SECTION 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the holders of the Notes as of such Record Date, (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the holders of the Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of the holders of the 48 Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished. (b) Upon receipt by the Indenture Trustee of any request by a holder of the Notes to receive a copy of the current list of holders of the Notes, 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 holders of the Notes produced in response thereto. (c) The Indenture Trustee shall furnish to the holders of the Notes 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. SECTION 7.03 REPORTS BY ISSUER. (a) The Issuer shall cause the Administrator to furnish the Issuer, the Indenture Trustee and the Grantor Trustee the reports required by the Administration Agreement and by Section 3.24 of this Indenture. (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year. ARTICLE VIII Accounts, Disbursements and Releases SECTION 8.01 COLLECTION OF MONEY. (a) 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 the holders of the Notes 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. (b) The Indenture Trustee shall deposit into the Collection Account all payments it receives from the Servicers by or on behalf of the Obligors with respect to the Student Loans, and all related Liquidation Proceeds and Recoveries, as collected during the Collection Period. For purposes of this Article VIII, the phrase "payments by or on behalf of Obligors" shall mean payments made with respect to the Student Loans, as applicable, by or on behalf of borrowers thereof and the Guarantee Agency. (c) The Indenture Trustee shall deposit into the Collection Account the aggregate Purchase Amount it receives with respect to Purchased Student Loans and all other amounts received from the Sellers or the Servicers with respect to the Student Loans. The 49 Indenture Trustee also shall deposit into the Collection Account all amounts transferred from the Pre-Funding Account pursuant to Section 8.10. SECTION 8.02 TRUST ACCOUNTS. (a)(i) The Issuer, for the benefit of the Noteholders and itself, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Collection Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders and the Issuer. The Collection Account will initially be established as a segregated account at U.S. Bank National Association in the name of the Indenture Trustee. The Issuer will make an initial deposit on the Closing Date into the Collection Account of cash equal to $605,130,319, which amount will be disbursed on the Closing Date by the Indenture Trustee, pursuant to written instructions of the Administrator, to acquire the Initial Financed Student Loans. (ii) The Issuer, for the benefit of the Noteholders and itself, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders and the Issuer. The Reserve Account initially will be established as a segregated account at U.S. Bank National Association in the name of the Indenture Trustee. The Issuer will make an initial deposit on the Closing Date into the Reserve Account of cash or certain Eligible Investments equal to the Reserve Account Initial Deposit. (iii) The Issuer, for the benefit of the Noteholders and itself, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Pre-Funding Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders and the Issuer. The Pre-Funding Account initially will be established as a segregated account at U.S. Bank National Association in the name of the Indenture Trustee. The Issuer will make an initial deposit on the Closing Date into the Pre-Funding Account of cash or certain Eligible Investments equal to $46,168,158.02 (the "Pre-Funded Amount"), to be used for the purchase of Subsequent Student Loans and as provided by Section 8.10 hereof. (iv) The Issuer, for the benefit of the Noteholders and itself, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Future Distribution Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders and the Issuer. The Future Distribution Account initially will be established as a segregated account at U.S. Bank National Association in the name of the Indenture Trustee. (b) Funds on deposit in the Collection Account, the Reserve Account, the Pre-Funding Account and the Future Distribution Account (collectively, the "Trust Accounts") shall be invested by the Indenture Trustee (or any custodian or designated agent with respect to any amounts on deposit in such accounts) in Eligible Investments pursuant to written instructions by the Issuer; PROVIDED, HOWEVER, it is understood and agreed that the Indenture Trustee shall not be liable for any loss arising from such investment in Eligible Investments. All such Eligible Investments shall be held by (or by any custodian on behalf of) the Indenture Trustee for the benefit of the Noteholders and the Issuer; provided that on the Business Day preceding each 50 Distribution Date on which funds in the applicable Trust Account will be needed, all interest and other investment income (net of losses and investment expenses) on funds on deposit therein shall be deposited into the Collection Account and shall constitute a portion of the Available Funds for such Distribution Date. Other than as described in the following proviso or as otherwise permitted by the Rating Agencies, funds on deposit in the Trust Accounts shall be invested in Eligible Investments that will mature so that such funds will be available at the close of business on the Business Day preceding the following Distribution Date for which such funds are needed; PROVIDED, HOWEVER, that funds on deposit in Trust Accounts may be invested in Eligible Investments of the Indenture Trustee which may mature so that such funds will be available on such Distribution Date. Funds deposited in a Trust Account on a Business Day which immediately precedes a Distribution Date upon the maturity of any Eligible Investments are not required to be invested overnight. (c) The Indenture Trustee, on behalf of the Noteholders, shall possess all right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all proceeds thereof (including all income thereon) and all such funds, investments, proceeds and income shall be part of the Indenture Trust Estate. Subject to the Issuer's power to instruct the Indenture Trustee pursuant to paragraph (b) above, the Trust Accounts shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Noteholders. If, at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Administrator on its behalf) agrees, by its acceptance hereto, that it shall within 5 Business Days (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Trust Account as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Trust Account. In connection with the foregoing, the Issuer agrees that, in the event that any of the Trust Accounts are not accounts with the Indenture Trustee, the Issuer shall notify the Indenture Trustee, in writing, promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit Account. (A) With respect to the Trust Account Property, the Indenture Trustee agrees, by its acceptance hereof, that: (B) any Trust Account Property that is held in deposit accounts shall be held solely in Eligible Deposit Accounts; and, subject to Section 8.02(b), each such Eligible Deposit Account shall be subject to the exclusive custody and control of the Indenture Trustee, and the Indenture Trustee shall have sole signature authority with respect thereto; (C) any Trust Account Property shall be Delivered to the Indenture Trustee in accordance with the definition of "Delivery" and shall be held, pending maturity or disposition, solely by the Indenture Trustee or such other Person acting solely for the Indenture Trustee as required for Delivery; (D) In the event that the Indenture Trustee, in its capacity as securities intermediary has or subsequently obtains by agreement, operation of law or otherwise a security interest in the Trust Accounts or any security entitlement credited thereto, the Indenture Trustee, in its capacity as securities intermediary hereby agrees that such security interest shall be subordinate to the 51 security interest of the Indenture Trustee for the benefit of the Noteholders. The financial assets and other items deposited to the Trust Accounts will not be subject to deduction, set-off, banker's lien, or any other right in favor of any person other than the Indenture Trustee (except that the Indenture Trustee, in its capacity as securities intermediary may set off (i) the face amount of any checks which have been credited to the Trust Accounts but are subsequently returned unpaid because of uncollected or insufficient funds, and (ii) all amounts due to it in respect of its customary fees and expenses for the routine maintenance and operation of the Trust Accounts; (E) The Issuer shall instruct the Indenture Trustee to make withdrawals and payments from the Trust Accounts for the purpose of permitting the Indenture Trustee to carry out its duties under this Indenture; (F) Each Trust Account provided for herein to be established and maintained by the Indenture Trustee shall be so established and maintained by the Indenture Trustee, as securities intermediary (in such capacity, the "Securities Intermediary"). Each item of "investment property" within the meaning of Section 9-102(a)(49) of the New York Uniform Commercial Code (which shall not be deemed to include the Financed Student Loans or the related notes evidencing the Financed Student Loans) or "money" within the meaning of Section 1-201(24) of the New York Uniform Commercial Code, that is (whether investment property, security, instrument or cash) credited to such a Trust Account shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the New York Uniform Commercial Code. The State of New York shall be deemed to be the Securities Intermediary's location for purposes of the New York Uniform Commercial Code, and each such Trust Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York; and (G) Following the filing of any UCC financing statement with respect to this Indenture the Indenture Trustee hereby agrees to notify the Issuer six months prior to the expiration of such filing of the need to file continuation statements, and to the extent permitted by law, the Issuer shall execute and file such continuation statements, and provide a copy thereof to the Indenture Trustee along with an Opinion of Counsel to the effect that all action has been taken as is necessary to maintain the lien and security interest created by this Indenture. (d) On or prior to the 20th calendar day of each month other than the month in which a Quarterly Distribution Date occurs, or if such day is not a Business Day, the immediately following Business Day, the Administrator shall instruct the Indenture Trustee in writing (based on the information contained in the Administrator's Officer's Certificate and each related Servicer's Report delivered pursuant to the Administration Agreement) to transfer funds on deposit in the Collection Account to the Future Distribution Account, on or before the Monthly Allocation Date of the same month, from and to the extent of the Available Funds on deposit in the Collection Account, in the following order of priority, and the Indenture Trustee shall comply with such instructions: 52 (i) First, pro rata based on the amounts owed to each such party, in the amount of fees and expenses expected to accrue and be paid to the Indenture Trustee, the Owner Trustee, the Grantor Trustee, the Servicers and the Administrator from the calendar day after the current month's Monthly Allocation Date (plus, for the initial Monthly Allocation Date, the fees and expenses accrued from the Closing Date through and including such initial Monthly Allocation Date) through the following month's Monthly Allocation Date, or if there is not a Monthly Allocation Date in the next calendar month, the Quarterly Distribution Date that occurs in the following month, plus previously accrued and unpaid amounts not previously deposited in the Future Distribution Account; (ii) Second, pro rata based on the amounts owed to each such party, in the amount of fees and expenses expected to accrue and be paid to the Auction Agent and the Broker-Dealers from the calendar day after the current month's Monthly Allocation date (plus, for the initial Monthly Allocation Date, the fees and expenses accrued from the Closing Date through and including such initial Monthly Allocation Date) through the following month's Monthly Allocation Date, or if there is not a Monthly Allocation Date in the next calendar month, the Quarterly Distribution Date that occurs in the following month, plus previously accrued and unpaid amounts not previously deposited in the Future Distribution Account; (iii) Third, pro rata based on the amounts owed to each such party, for each Class of Class A Notes, other than the Class A-IO Notes, an amount equal to interest expected to accrue on such Class of Notes at the then applicable Note Interest Rate, and for the Class A-IO-1, an amount equal to interest at 7.87% per annum, and for the Class A-IO-2 Notes, an amount equal to interest at 0.12% per annum, from the calendar day after the current month's Monthly Allocation Date (plus, for the initial Monthly Allocation Date, the interest accrued from the Closing Date through and including such initial Monthly Allocation Date) through the following month's Monthly Allocation Date, or if there is not a Monthly Allocation Date in the next calendar month, the Quarterly Distribution Date that occurs in the following month, plus previously accrued and unpaid amounts not deposited in the Future Distribution Account; and (iv) Fourth, pro rata based on the amounts owed to each such party, for each Class of Class B Notes, an amount equal to interest expected to accrue on the Class B Notes at the then applicable Auction Rates from the calendar day after the current month's Monthly Allocation Date (plus, for the initial Monthly Allocation Date, the interest accrued from the Closing Date through and including such initial Monthly Allocation Date) through the following month's Monthly Allocation Date, or if there is not a Monthly Allocation Date in the next calendar month, the Quarterly Distribution Date that occurs in the following month, plus previously accrued and unpaid amounts not previously deposited in the Future Distribution Account. (e) On each Auction Rate Note Interest Payment Date for a Class of Auction Rate Notes that is not a Quarterly Distribution Date, the Indenture Trustee will make the following distributions based upon written instructions received from the Administrator: 53 (i) First, from amounts on deposit in the Future Distribution Account allocated to the Auction Agent and the Broker-Dealers, and then from amounts on deposit in the Collection Account and the Reserve Account, pro rata based upon amounts owed to each such party, to the Auction Agent and the Broker-Dealers, the Auction Agent Fees and the Broker-Dealer Fees; (ii) Second, from amounts on deposit in the Future Distribution Account to pay interest on that Class of Auction Rate Notes, and then from amounts on deposit in the Collection Account and the Reserve Account, to that Class of Auction Rate Notes, an amount equal to the Noteholders' Interest Distribution Amount for that Class of Auction Rate Notes; (iii) Third, from amounts on deposit in the Future Distribution Account to pay principal on that Class of Auction Rate Notes, if any, to that Class of Action Rate Notes; and (iv) Fourth, from amounts on deposit in the Future Distribution Account to pay Carry-over Amounts on that Class of Auction Rate Notes, if any, to that Class of Auction Rate Notes. (f) On each Monthly Servicing Payment Date, based upon written instructions received from the Administrator, the Indenture Trustee shall pay to the Servicers an amount equal to the Servicing Fees then payable to the Servicers from amounts on deposit in the Future Distribution Account that were allocated for such Servicing Fees, or to the extent necessary, from the Collection Account and the Reserve Account. (g) On each Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee in writing (based on the information contained in the Administrator's Officer's Certificate and each related Servicer's Report delivered pursuant to the Administration Agreement) to make the following deposits and distributions to the Persons or to the account specified below by 11:00 a.m. (New York time), to the extent of the amount of Available Funds in the Collection Account, in the following order of priority (except as otherwise provided in Sections 5.04(b)) and the Indenture Trustee shall comply with such instruction; PROVIDED, HOWEVER, only if an Auction Rate Note Interest Payment Date is also a Quarterly Distribution Date will a Class of Auction Rate Notes be paid interest or principal on a Quarterly Distribution Date (otherwise, the amount allocated to each such Class of Auction Rate Notes will be deposited into the Future Distribution Account): (1) First, pro rata: (i) Indenture Trustee fees and expenses, Owner Trustee fees and expenses and Grantor Trustee fees and expenses, in an aggregate amount not to exceed $150,000 per annum; (ii) Servicing Fees with respect to the Financed Student Loans due on such Quarterly Distribution Date and all prior unpaid Servicing Fees allocated to the Financed Student Loans up to the amount specified in the Servicing Agreements, Administration Fees with respect to the Financed Student Loans up to the amount specified in the Administration Agreement and any Paying Agent fees, the aggregate amount of fees paid pursuant to this clause (ii) shall not exceed $100,000 per annum, and (iii) to the extent the Quarterly Distribution Date is also an Auction Rate 54 Note Interest Payment Date, Broker-Dealer Fees and expenses up to the amount specified in the Broker-Dealer Agreements and Auction Agent Fees and expenses up to the amount specified in the Auction Agency Agreement; (2) Second, to the Future Distribution Account, an amount necessary to provide for one month's expected payments of fees and expenses for each of the items in clause (1); (3) Third, to TERI, the additional guaranty fees pursuant to the TERI Guaranty Agreements, which will be deposited into the TERI Pledge Fund; (4) Fourth, to the holders of each Class of Class A Notes, the Interest Distribution Amount for such Class A Notes on a pro rata basis; (5) Fifth, if the Quarterly Distribution Date is the Final Maturity Date for a Class of Class A Notes, to the holders of that Class of Class A Notes, the amount required to reduce the Outstanding Principal Balance of that Class to zero; (6) Sixth, if the Quarterly Distribution Date is also an Auction Rate Note Interest Payment Date for one or more Classes of Class B Notes, to the holders of such Auction Rate Notes, the Interest Distribution Amount for such Class B Notes on a pro rata basis; (7) Seventh, to the Future Distribution Account, an amount necessary to provide for one month's expected interest payments on the Class A Notes as described under Section 8.02(d)(iii); (8) Eighth, to the Future Distribution Account, an amount necessary to provide for one month's expected interest payments on the Class B Notes as described under Section 8.02 (d)(iv); (9) Ninth, to the Reserve Account, an amount, up to the amount, if any, necessary to reinstate the balance of the Reserve Account to the greater of the amounts determined pursuant to clauses (b) and (c) of the definition of Specified Reserve Account Balance; (10) Tenth, to TERI, to purchase Rehabilitated Financed Student Loans; (11) Eleventh, to the holders of (i) the Class A-1 Notes, until paid in full, then (ii) the Class A-2 Notes, until paid in full, then (iii) the Class A-3 Notes, until paid in full, then (iv) the Class A-4 Notes, until paid in full, and then (v) to the Class B-1 and the Class B-2 Notes, on a pro rata basis, until paid in full, or to the Future Distribution Account, as the case may be, the Noteholders' Principal Distribution Amount, less any amounts distributed as principal pursuant to priority Fifth (principal will be paid to the holders of the Auction Rate Notes in lots of $50,000 only); (12) Twelfth, to the holders of the Class B Notes or to the Future Distribution Account, as the case may be, Carryover Amounts, if any; 55 (13) Thirteenth, pro rata: (i) any unreimbursed advances to FMC and (ii) for all amounts in excess of the maximum amounts specified in clause (1): for Indenture Trustee fees and expenses; Owner Trustee fees and expenses pursuant to the Trust Agreement; Grantor Trustee fees and expenses pursuant to the Grantor Trust Agreement; indemnities and expenses of the Servicers; the portion of the Administration Fee allocated to the Notes and all unpaid Administration Fees from prior Collection Periods allocated to the Notes; Broker-Dealer Fees and expenses pursuant to the Broker-Dealer Agreements; Auction Agent Fees and expenses pursuant to the Auction Agency Agreement and any Paying Agent Fees; (14) Fourteenth, to the holders of the Class A-1 Notes, any remaining amounts until the Outstanding Principal Balance of that Class is reduced to zero; (15) Fifteenth, on and after the 10% Pool Balance Distribution Date or a TERI Trigger Event, to the holders of the Notes or to the Future Distribution Account, as the case may be, any remaining amounts as payment of principal allocated among the Noteholders as described in clause (11) until the Outstanding Principal Balance of each Class of Notes is reduced to zero; and (16) Sixteenth, to FMC, any unpaid and accrued structuring advisory fee, and then to the Certificateholders, any remaining amounts. SECTION 8.03 GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no Default shall have occurred and be continuing, all or a portion of the funds in the Trust Accounts shall be invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order, subject to the provisions of Section 8.01(b); PROVIDED, HOWEVER, that funds in the Pre-Funding Account shall be invested only in Eligible Investments described in clause (a) of the definition thereof. All income or other gain from investments of moneys deposited in the Trust Accounts shall be deposited by the Indenture Trustee in the Collection Account, and any loss resulting from such investments shall be charged to such Trust Account. The Issuer will not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any of the Trust Accounts unless the security interest granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such effect. (b) Subject to Section 6.01(c), the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee's failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms. (c) If (i) the Issuer shall have failed to give investment directions for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00 a.m. Eastern Time (or such other time as may be agreed by the Issuer and Indenture Trustee) on any Business Day; or 56 (ii) a Default shall have occurred and be continuing, but the Notes shall not have been declared due and payable pursuant to Section 5.02, or, if such Notes shall have been declared due and payable following an Event of Default, amounts collected or receivable from the Indenture Trust Estate are being applied in accordance with Section 5.04 as if there had not been such a declaration; then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts in one or more Eligible Investments. SECTION 8.04 RELEASE OF INDENTURE TRUST ESTATE. (a) Subject to the payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee's interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. (b) The Indenture Trustee shall, at such time as there are no Notes Outstanding, all sums due the Indenture Trustee pursuant to Section 6.07 have been paid, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts. The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer Request accompanied by an Officers' Certificate of the Issuer and an Opinion of Counsel meeting the applicable requirements of Section 11.01. SECTION 8.05 OPINION OF COUNSEL. The Indenture Trustee shall receive at least seven days' notice when requested by the Issuer to take any action pursuant to Section 8.04(a), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, except in connection with any action contemplated by Section 8.04(c), as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the holders of the Notes in contravention of the provisions of this Indenture. 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. SECTION 8.06 COST OF ISSUANCE ACCOUNT. The Issuer shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Cost of Issuance Account"). The Cost of Issuance Account shall not be a Trust Account and the Noteholders shall have no interest in the amount deposited therein. The Cost of Issuance Account initially will be established as a segregated account at U.S. Bank National Association in the name of the Indenture Trustee. The Issuer shall make a deposit into the Cost of Issuance Account on the Closing Date in an amount equal to $3,042,800. Upon receipt of written instructions from the Administrator, the Indenture Trustee shall remit funds on deposit in the 57 Cost of Issuance Account to pay the costs and expenses incurred by the Issuer in connection with issuing the Notes. SECTION 8.07 APPLICATION OF COLLECTIONS. (a) With respect to each Student Loan, all collections (including all Guarantee Payments) with respect thereto for the Collection Period shall be applied to interest and principal on such Student Loan by allocating to interest the portion of such collection equal to the product of (A) the applicable interest rate on such Student Loan, (B) the unpaid principal balance of such Student Loan, and (C) the period of time elapsed since the preceding payment of interest on such Student Loan was made (over the actual number of days in a year) ("Interest Collections") and by allocating the remainder of such collection to principal. (b) All Liquidation Proceeds shall be applied to the related Student Loan. SECTION 8.08 RESERVE ACCOUNT. (a) On the Closing Date, the Issuer shall deposit the Reserve Account Initial Deposit into the Reserve Account. The Trustee shall deposit into the Reserve Account the amounts, if any, required to be deposited pursuant to Sections 8.02 and 8.11. (b) (i) If the amounts payable for any Monthly Servicing Payment Date or Quarterly Distribution Date pursuant to Section 8.02(g)(1) exceed the amount distributed or allocated to the applicable parties on such Monthly Servicing Payment Date or Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee in writing to withdraw from the Reserve Account on such Monthly Servicing Payment Date or Quarterly Distribution Date an amount equal to such excess, to the extent of funds available therein, and to distribute or allocate such amounts to the applicable parties PRO RATA (based upon the amount owed to such parties). (ii) If the amounts payable on each Quarterly Distribution Date pursuant to Section 8.02(g)(2) exceed the amount transferred to the Future Distribution Account on such Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee in writing to withdraw from the Reserve Account on such Quarterly Distribution Date an amount equal to such excess, to the extent of funds available therein after giving effect to paragraph(b)(i), and to transfer such amount to the Future Distribution Account. (iii) If the amounts payable for any Quarterly Distribution Date pursuant to Section 8.02(g)(3) exceed the amount transferred to the TERI Pledge Fund on such Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee in writing to withdraw from the Reserve Account on such Quarterly Distribution Date an amount equal to such excess, to the extent of funds available therein after giving effect to paragraphs (b)(i) through (b)(ii) above, and to transfer such amount to the TERI Pledge Fund. (iv) If the Noteholders' Interest Distribution Amount with respect to the Class A Notes for a Distribution Date exceeds the amount distributed to the holders of the Class A Notes on such Distribution Date, the Administrator shall instruct the 58 Indenture Trustee in writing to withdraw from the Reserve Account on such Distribution Date an amount equal to such excess, to the extent of funds available therein after giving effect to paragraph (b)(i) through (b)(iii) above, and to distribute such amount PRO RATA (based on the amount of such excess allocable to the holders of the Class A Notes), to the holders of the Class A Notes entitled thereto. (v) If on the Final Maturity Date for a Class of Class A Notes, the outstanding principal balance of the applicable Class of Class A Notes (prior to giving effect to any distribution of principal thereon on such date) exceeds the amount of principal distributed to the holders of the applicable Class of Class A Notes on such date, the Administrator shall instruct the Indenture Trustee in writing on such date to withdraw from the Reserve Account on such date an amount equal to such excess, to the extent of funds available therein, after giving effect to paragraphs (b)(i) through (b)(iv) above and to distribute such amount to the holders of the applicable Class of Class A Notes, in the same order and priority as is set forth in Section 8.02(g)(11). (vi) If the Noteholders' Interest Distribution Amount with respect to the Class B Notes for a Distribution Date exceeds the amount distributed to the holders of the Class B Notes on such Distribution Date, the Administrator shall instruct the Indenture Trustee in writing to withdraw from the Reserve Account on such Distribution Date an amount equal to such excess, to the extent of funds available therein after giving effect to paragraph (b)(i) through (b)(v) above, and to distribute such amount PRO RATA (based on the amount of such excess allocable to the holders of the Class B Notes), to the holders of the Class A Notes entitled thereto. (vii) If on the Final Maturity Date for a Class of Class B Notes, the outstanding principal balance of the applicable Class of Class B Notes (prior to giving effect to any distribution of principal thereon on such date) exceeds the amount of principal distributed to the holders of the applicable Class of Class B Notes on such date, the Administrator shall instruct the Indenture Trustee in writing on such date to withdraw from the Reserve Account on such date an amount equal to such excess, to the extent of funds available therein, after giving effect to paragraphs (b)(i) through (b)(vi) above and to distribute such amount to the holders of the applicable Class of Class B Notes, PRO RATA (based on the Outstanding Principal Balance of each such Class). (c) If the amount on deposit in the Reserve Account on any Quarterly Distribution Date (without giving effect to all deposits or withdrawals therefrom on such Quarterly Distribution Date) is greater than the Specified Reserve Account Balance for such Quarterly Distribution Date, the Issuer shall instruct the Indenture Trustee in writing to deposit the amount of such excess into the Collection Account for distribution on such Quarterly Distribution Date. SECTION 8.09 STATEMENTS TO NOTEHOLDERS. On each Determination Date preceding a Quarterly Distribution Date, pursuant to the Administration Agreement the Administrator shall provide to the Indenture Trustee (with a copy to the Owner Trustee and the Rating Agencies) for the Indenture Trustee to forward on such succeeding Quarterly Distribution Date to each holder of record of the Notes a statement substantially in the form set forth as an 59 exhibit to the Administration Agreement setting forth at least the following information as to the Notes, to the extent applicable: (1) the amount of the distribution allocable to principal of each Class of Notes; (2) the amount of the distribution allocable to interest on each Class of Notes, together with the interest rates applicable with respect thereto; (3) the Pool Balance as of the close of business on the last day of the preceding Collection Period, after giving effect to the related payments allocated to principal reported under clause (1) above; (4) the aggregate outstanding principal balance or Notional Amount, as applicable, of each Class of Notes as of such Quarterly Distribution Date, after giving effect to related payments allocated to principal reported under clause (1) above; (5) for each Quarterly Distribution Date (A) the amount of fees and expenses paid to the Indenture Trustee and the Owner Trustee; (B) the amount of the Servicing Fee paid to each Servicer; (C) the amount of fees and expenses paid to each Broker-Dealer and the Auction Agent; (D) the amount of fees paid to TERI; and (E) the amount of the Administration Fee paid to the Administrator, and, in each case, with respect to such Collection Period, together with the amount, if any, remaining unpaid after giving effect to all such payments; (6) for each Quarterly Distribution Date, the amount of the aggregate Realized Losses for the Financed Student Loans, if any, for such Collection Period and the balance of the Financed Student Loans that are delinquent in each delinquency period as of the end of such Collection Period; (7) the balance of the Reserve Account on such Quarterly Distribution Date, after giving effect to changes therein on such Quarterly Distribution Date; (8) the amounts withdrawn from the Reserve Account on such Quarterly Distribution Date; (9) for Quarterly Distribution Dates during the Funding Period, the remaining Pre-Funded Amount on such Quarterly Distribution Date, after giving effect to changes therein during the related Collection Period; (10) for the first Quarterly Distribution Date on or following the end of the Funding Period, the amount of any remaining Pre-Funded Amount that has not been used to make Additional Fundings with respect to Additional Student Loans and is being deposited into the Collection Account; and (11) the amount of any Advance with respect to such Distribution Date; 60 (12) the amount transferred to the TERI Pledge Fund to acquire Rehabilitated Student Loans with respect to such Distribution Date; and Each amount set forth pursuant to clauses (1), (2), (3), (5) and (6) above shall be expressed as a dollar amount per $50,000 of original principal balance of a Note. A copy of the statements referred to above may be obtained by any Note Owner by a written request to the Indenture Trustee addressed to the Corporate Trust Office. On each Determination Date preceding an Auction Rate Note Interest Payment Date, the Administrator shall provide to the Indenture Trustee (with a copy to the Owner Trustee and the Rating Agencies) for the Indenture Trustee to forward to each holder of record of the applicable Class of Notes a statement setting forth the information in clauses (1) and (2) above with respect to the related Auction Rate Notes. SECTION 8.10 PRE-FUNDING ACCOUNT. (a) On the Closing Date, the Issuer will deposit in the Pre-Funding Account, $46,168,158.02, to be used by the Trust to acquire Subsequent Student Loans and as otherwise provided in this Section 8.10. On each Subsequent Transfer Date during the Funding Period on which Subsequent Student Loans are to be conveyed to the Issuer, the Issuer shall instruct the Indenture Trustee in writing to withdraw from the Pre-Funding Account an amount up to 109.8% of the sum of the principal balance of, plus to the extent capitalized or to be capitalized upon commencement of repayment or during deferment or forbearance, accrued interest on, such Subsequent Student Loans. The Administrator shall instruct the Indenture Trustee in writing to distribute such amount as directed by the Administrator; provided, however, upon each acquisition of Subsequent Student Loans, the amount deposited in the TERI Pledge Fund must be equal to or greater than 6% of the principal balance of such Subsequent Student Loans being acquired. (b) If the Pre-Funded Amount has not been reduced to zero on or prior to the Distribution Date on which the Funding Period ends (or, if the Funding Period does not end on a Distribution Date, on or prior to the first Distribution Date following the end of the Funding Period) after giving effect to any reductions in the Pre-Funded Amount on such Distribution Date pursuant to paragraph (a) above, the Administrator shall instruct the Indenture Trustee in writing to transfer on such Distribution Date from the Pre-Funding Account to the Collection Account an amount equal to the funds remaining in the Pre-Funding Account. Any such funds so transferred shall be considered Available Funds for the related Distribution Date. SECTION 8.11 ADVANCES. (a) On or prior to any Quarterly Distribution Date, a Certificateholder may, but shall not be obligated to, make an optional deposit (each, an "Optional Deposit") to the Reserve Account from funds to be released to such Certificateholder pursuant to Sections 8.02(g)(16) on such Distribution Date or otherwise. Any such Optional Deposit shall be applied on the related Distribution Date in the same manner as other funds on deposit in the Reserve Account on the related Distribution Date in accordance with Section 8.08. (b) If on any Determination Date the amount required to be distributed on the upcoming Monthly Servicing Payment Date or Distribution Date pursuant to Sections 8.02(e)(i), 8.02(f), or 8.02(g)(1), as the case may be, would exceed the sum of the aggregate amount in the 61 Collection Account, the Future Distribution Account and the Reserve Account, the Administrator, in its sole option, may elect to deposit, or have an Affiliate deposit, in the Reserve Account (no later than the Business Day immediately preceding such Monthly Servicing Payment Date or Distribution Date) an amount up to the amount of such deficiency (such deposit, is referred to as an "Advance"). SECTION 8.12 FUTURE DISTRIBUTION ACCOUNT. The Indenture Trustee shall make deposits into and withdrawals from the Future Distribution Account as provided in Section 8.02. To the extent amounts to be paid to the Noteholders or any other Person are in the Future Distribution Account, the Indenture Trustee, based upon written instructions received from the Administrator, shall transfer such amounts from the Future Distribution Account to the Collection Account and make such payments from the Collection Account. ARTICLE IX Supplemental Indentures SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. (a) Without the consent of any holders of the Notes 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, in form satisfactory to the Indenture Trustee, for any of the following purposes: (i) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property; (ii) to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained; (iii) to add to the covenants of the Issuer, for the benefit of the holders of the Notes, or to surrender any right or power herein conferred upon the Issuer; (iv) to convey, transfer, assign, mortgage or pledge any property to or with 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 holders of the Notes; or (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 62 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. 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 Administrator, on behalf of the Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the holders of the Notes but upon satisfying the Rating Agency Condition, 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 including changing the Auction Procedures for the Auction Rate Notes, or of modifying in any manner the rights of the holders of the Notes 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 holder of the Notes. SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies, and with the consent of the Interested Noteholders holding a majority of the Outstanding Amount of the related Classes of Notes, may 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 holders of the Notes under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without the consent of the holder of each Outstanding Note affected thereby: (i) change the date of payment of any installment of principal of or interest on each Class of Notes, or reduce the principal amount thereof or the interest rate thereon, 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 applicable 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; (ii) reduce the percentage of the Outstanding Amount of the Notes, the consent of the holders of which is required for any such supplemental indenture, or the consent of the holders of the Notes of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture; (iii) modify or alter the provisions of the proviso to the definition of the term "Outstanding"; 63 (iv) reduce the percentage of the Outstanding Amount of the Notes required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Indenture Trust Estate pursuant to Section 5.04; (v) modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the other Basic Documents cannot be modified or waived without the consent of the holder 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 applicable Note on any Distribution Date (including the calculation of any of the individual components of such calculation); (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 holder of any Note of the security provided by the lien of this Indenture; or (viii) or change the definition of Interested Noteholders. It shall not be necessary for any Act of holders of the Notes 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 holders of the Notes to which such amendment or supplemental indenture relates a notice prepared by the Issuer setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise. SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the 64 terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.05 [RESERVED] SECTION 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes. SECTION 9.07 CONFORMITY WITH THE TRUST INDENTURE ACT. Every Supplemental Indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect. ARTICLE X Reporting Requirements SECTION 10.01 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will cause each Servicer to deliver to the Administrator, any applicable annual statements as to compliance required by the Servicer's Servicing Agreement. Copies of any such annual statements will be provided to the Rating Agencies rating the Notes. SECTION 10.02 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. Within 90 days of the end of each Servicer's regular fiscal-year or calendar-year audit period, the Issuer shall cause each Servicer, at the Servicer's expense, to cause a firm of independent public accountants to furnish a statement to the Administrator and the Indenture Trustee in accordance with the Servicer's Servicing Agreement. Copies of any such statement shall be provided to the Rating Agencies rating the Notes. ARTICLE XI Miscellaneous SECTION 11.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (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 and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, 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. 65 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with. SECTION 11.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicers, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of such Servicer, 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 66 such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee's right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI. SECTION 11.03 ACTS OF NOTEHOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by holders of the Notes may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such holders of the Notes, 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 holders of the Notes, signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient. (c) The ownership of Notes, shall be proved by the Note Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the holder of any Notes shall bind the holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note. SECTION 11.04 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver or Act of holders of Notes, 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 holders of Notes, is to be made upon, given or furnished to or filed with: (a) the Indenture Trustee by any holder of Notes, or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office. (b) the Issuer by the Indenture Trustee or by any holder of Notes shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the Issuer addressed to: The National Collegiate Student Loan Trust 2004-1, c/o Wachovia Trust Company, National Association, as Owner Trustee, One Rodney Square, 1st Floor, 920 King Street, Wilmington, Delaware 19801, Attention: Corporate Trust Administration; with a copy to: The First Marblehead Corporation, The Prudential Tower, 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199-8157, Attention: Controller, with a copy to Richard P. Zermani, Esq., or at any other address previously furnished in writing to the Indenture Trustee by the 67 Issuer or the Administrator. The Issuer shall promptly transmit any notice received by it from the holders of the Notes to the Indenture Trustee. Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or the Owner 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: Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007; (ii) in the case of Standard & Poor's, at the following address: Standard & Poor's Rating Services, 55 Water Street, New York, New York 10041, Attention of Asset Backed Surveillance Department; and (iii) in the case of Fitch, at the following address: Fitch, Inc., One State Street Plaza, Attention: ABS Surveillance, New York, NY 10004, SF; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. SECTION 11.05 NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture provides for notice to holders of Notes 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 holder of Notes 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 holders of the Notes is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular holder of Notes shall affect the sufficiency of such notice with respect to other holders of Notes, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given. Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by holders of the Notes 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 holders of the Notes 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 11.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any holder of the Notes providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such holder of the Notes 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. 68 SECTION 11.07 [RESERVED] SECTION 11.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 11.09 SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors 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 holders of the Notes, 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, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. THIS INDENTURE IS SUBJECT TO THE PROVISIONS OF THE TIA THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS. SECTION 11.14 COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 11.15 RECORDING OF INDENTURE. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the holders of the Notes or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture. 69 SECTION 11.16 TRUST OBLIGATIONS. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Administrator, the Servicer, the Owner 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 Administrator, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity or (ii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Administrator, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder or owner of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Administrator, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner 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. This Indenture is executed and delivered by Wachovia Trust Company, National Association ("Wachovia"), not individually or personally but solely as Owner Trustee of the Issuer in the exercise of the powers and authority conferred and vested in it and each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wachovia but is made and intended for the purpose of binding only the Issuer and under no circumstances shall Wachovia be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or otherwise. SECTION 11.17 NO PETITION. The Indenture Trustee, by entering into this Indenture, and each holder of each Class of the Notes, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the other Basic Documents. SECTION 11.18 INSPECTION. The Issuer agrees that, on reasonable prior notice, it will 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. 70 SECTION 11.19 THIRD-PARTY BENEFICIARIES. This Indenture will inure to the benefit of and be binding upon the parties hereto, the Noteholders, the Note Owners and their respective successors and permitted assigns. Except as otherwise provided in this Indenture, no other person will have any right or obligation hereunder. 71 IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee, By: /s/ Sterling C. Correia -------------------------------------- Name: Sterling C. Correia Title: Vice President U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: /s/ Vaneta Barnard -------------------------------------- Name: Vaneta Barnard Title: Vice President 72 STATE OF DELAWARE ) ) ss.: COUNTY OF NEW CASTLE ) On the 2nd day of June in the year 2004, before me, the undersigned, personally appeared Sterling C. Correia, an Authorized Officer, of WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, as Owner Trustee of THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 2nd day of June, 2004. /s/ Sheri M. Robinson ------------------------ Notary Public in and for the State of Delaware. My commission expires: October 9, 2004 STATE OF Massachusetts ) ) ss.: COUNTY OF Suffolk ) On the 10th day of June in the year 2004, before me, the undersigned, personally appeared Vaneta I. Bernard, a Vice President of U.S. BANK NATIONAL ASSOCIATION, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 10th day of June, 2004. /s/ Grace Lee Notary Public in and for the State of MA. My commission expires: April 21, 2006 APPENDIX A DEFINITIONS AND USAGE USAGE The following rules of construction and usage shall be applicable to any instrument that is governed by this Appendix: (a) All terms defined in this Appendix shall have the defined meanings when used in any instrument governed hereby and in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. (b) As used herein, in any instrument governed hereby and in any certificate or other document made or delivered pursuant thereto, accounting terms not defined in this Appendix or in any such instrument, certificate or other document, and accounting terms partly defined in this Appendix or in any such instrument, certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of such instrument. To the extent that the definitions of accounting terms in this Appendix or in any such instrument, certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Appendix or in any such instrument, certificate or other document shall control. (c) The words "hereof," "herein," "hereunder" and words of similar import when used in an instrument refer to such instrument as a whole and not to any particular provision or subdivision thereof; references in an instrument to "Article," "Section" or another subdivision or to an attachment are, unless the context otherwise requires, to an article, section or subdivision of or an attachment to such instrument; and the term "including" means "including without limitation." (d) The definitions contained in this Appendix are equally applicable to both the singular and plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. (e) Any agreement, instrument or statute defined or referred to below or in any agreement or instrument that is governed by this Appendix means such agreement or instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. A-1 DEFINITIONS "ACCOUNTANT" means PricewaterhouseCoopers LLP and any other independent certified public accountant as may be selected by the Issuer and satisfying the Rating Agency Condition. "ACT" has the meaning specified in Section 11.03(a) of the Indenture. "ADDITIONAL FUNDINGS" means the moneys transferred from the Pre-Funding Account on Subsequent Transfer Dates during the Funding Period, and shall consist of amounts paid to the applicable Seller to acquire Subsequent Student Loans as of the applicable Subsequent Cut-off Dates, to pay capitalized interest on the Student Loans, as applicable, and to remit to the Collection Account if the amount on deposit in the TERI Pledge Fund is less than the amount specified in Section 8.10 of the Indenture. "ADMINISTRATION AGREEMENT" means the Administration Agreement dated as of June 10, 2004, among the Issuer, the Indenture Trustee, the Owner Trustee and the Administrator. "ADMINISTRATION FEE" has the meaning specified in Section 3 of the Administration Agreement. "ADMINISTRATOR" means First Marblehead Data Services, Inc., a Massachusetts corporation, in its capacity as administrator of the Issuer and the Financed Student Loans, and its successors and permitted assigns. "ADMINISTRATOR DEFAULT" means the occurrence of any event specified in Section 8(d) of the Administration Agreement. "ADVANCE" has the meaning specified in Section 8.11(b) of the Indenture. "AFFILIATE" means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "APPLICABLE INDEX" means with respect to the Class A-1, A-2, A-3 and A-4 Notes, Three-Month LIBOR; PROVIDED, HOWEVER, with respect to the initial Interest Period, the Applicable Index shall be determined by the following formula: X + [17/30*(Y-X)] Where: X = Three-Month LIBOR, and A-2 Y = Four-Month LIBOR, in each case, as of the second business day before the start of the initial Interest Period. "APPLICABLE NOTE MARGIN" means: 0.12% for the Class A-1 Notes, 0.26% for the Class A-2 Notes, 0.38% for the Class A-3 Notes, and 0.43% for the Class A-4 Notes. "APPLICABLE NOTE RATE" means, with respect to the Class A-IO-1 Notes, 7.87% per annum and with respect to the Class A-IO-2 Notes, 0.12% per annum. "APPLICABLE PROCEDURES" has the meaning specified in Section 2.04(j)(i) of the Indenture. "AUCTION RATE NOTES" means the Class B-1 Notes and the Class B-2 Notes. "AUTHORIZED OFFICER" means, with respect to any Person, any Person who is authorized to act for such Person in matters relating to the Basic Documents and whose action is binding upon such Person. With the respect to the Issuer, "Authorized Officer" means any officer of the Owner Trustee and/or the Administrator who is authorized to act for the Owner Trustee and/or the Administrator in matters relating to the Issuer. With respect to the Indenture Trustee, "Authorized Officer" means any officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "AVAILABLE FUNDS" means, with respect to any Distribution Date, any Monthly Servicing Payment Date or any other distribution date pursuant to Section 5.04 of the Indenture, the sum of the following amounts received with respect to the then elapsed portion of the related Collection Period to the extent not previously distributed: (i) all collections received by a Servicer (or any Sub-Servicer acting on its behalf) on the Student Loans, (including any Guarantee Payments received) but net of any applicable administrative fees, late fees or similar fees received from a borrower; (ii) all Liquidation Proceeds and all Recoveries in respect of Liquidated Student Loans which were written off in prior Collection Periods or prior months of such Collection Period; (iii) the aggregate Purchase Amounts received for Student Loans repurchased by a Seller or a Servicer or under an obligation which arose during the elapsed portion of such Collection Period; (iv) Investment Earnings for such Distribution Date; (v) amounts withdrawn from the Reserve Account in excess of the Specified Reserve Account Balance and deposited into the Collection Account; A-3 (vi) amounts transferred from the Pre-Funding Account to the Collection Account; (vii) amounts on deposit in the Future Distribution Account; (viii) Advances and Optional Deposits, if any; and (ix) any proceeds received in connection with the sale of the Student Loans, or sums collected by the Indenture Trustee pursuant to Sections 5.03 or 5.04(a) of the Indenture; PROVIDED, HOWEVER, that Available Funds will exclude all payments and proceeds (including Liquidation Proceeds) of any Student Loans, the related Purchase Amount of which has been included in Available Funds, for a prior Distribution Date; PROVIDED, FURTHER, that if on any Distribution Date there would not be sufficient funds, after application of Available Funds and amounts available from the Reserve Account, the Future Distribution Account and the Pre-Funding Account, to pay any of the items specified in clauses (1) through (6) of Section 8.02(g) of the Indenture for such Distribution Date, then Available Funds for such Distribution Date will include, in addition to the Available Funds, amounts being held pursuant to Section 8.01 of the Indenture, or on deposit in the Collection Account, with respect to Available Funds relating to such Distribution Date which would have constituted Available Funds for the Distribution Date succeeding such Distribution Date, up to the amount necessary to pay the items specified in clause (1) through (6) of Section 8.02(g) of the Indenture, and the Available Funds, for such succeeding Distribution Date will be adjusted accordingly. "BASIC DOCUMENTS" means the Trust Agreement, the Grantor Trust Agreement, the Indenture, all Student Loan Purchase Agreements, the Deposit and Sale Agreement, all Servicing Agreements, the Administration Agreement, the Custodial Agreement, the Note Depository Agreement, the Guarantee Agreements, the TERI Deposit and Security Agreement, the Auction Agent Agreement, the Broker Dealer Agreements, any Program Manual and other documents and certificates delivered in connection with any thereof. "BENEFICIAL OWNER" means, with respect to a Note, the Person who is the beneficial owner of such Note, as reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly or as an indirect participant, in accordance with the rules of such Depository), as the case may be. "BOOK-ENTRY NOTE" means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10 of the Indenture. "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York City or the city in which the designated corporate trust office of the Indenture Trustee is located, are authorized or obligated by law, regulation or executive order to remain closed. A-4 "CERTIFICATE" means the Trust Certificate issued pursuant to the Trust Agreement, substantially in the form of Exhibit 1 thereto. "CERTIFICATEHOLDER" means the Person in whose name a Certificate is registered. "CLASS" means reference to any of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-IO-1, Class A-IO-2 Class B-1 or Class B-2 Notes, as applicable. "CLASS A NOTES" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-IO-1 Notes and Class A-IO-2 Notes. "CLASS A-1 NOTE" means a Class A-1 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-1 thereto. "CLASS A-2 NOTE" means a Class A-2 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-2 thereto. "CLASS A-3 NOTE" means a Class A-3 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-3 thereto. "CLASS A-4 NOTE" means a Class A-4 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-4 thereto. "CLASS A-IO NOTES" means the Class A-IO-1 Notes and the Class A-IO-2 Notes. "CLASS A-IO-1 NOTE" means a 7.87% Class A-IO-1 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-5 thereto. "CLASS A-IO-2 NOTE" means a 0.12% Class A-IO-2 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-6 thereto. "CLASS B NOTES" means the Class B-1 Notes and the Class B-2 Notes. "CLASS B-1 NOTE" means an Auction Rate Class B-1 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-7 thereto. "CLASS B-2 NOTE" means an Auction Rate Class B-2 Note issued pursuant to the Indenture, substantially in the form of Exhibit A-8 thereto. "CLEARING AGENCY" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. "CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "CLEARSTREAM" means Clearstream Banking, a societe anonyme, a limited liability company organized under the laws of Luxembourg. A-5 "CLOSING DATE" means June 10, 2004. "CODE" means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder. "COLLATERAL" has the meaning specified in the Granting Clause of the Indenture. "COLLECTION ACCOUNT" means the account designated as such, established and maintained pursuant to Section 8.02(a)(i) of the Indenture. "COLLECTION PERIOD" means, with respect to the first Quarterly Distribution Date, the period beginning on the Cutoff Date and ending on August 31st, 2004, and with respect to each subsequent Quarterly Distribution Date, the Collection Period means the three calendar months immediately following the end of the previous Collection Period. "CORPORATE TRUST OFFICE" means (i) with respect to the Indenture Trustee and the Note Registrar (so long as the Indenture Trustee is the Note Registrar), the designated office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at the Closing Date is located at One Federal Street, 3rd Floor, Boston, Massachusetts 02110, Attention: The National Collegiate Student Loan Trust 2004-1 (facsimile: (617) 603-6638) or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Administrator, and the Depositor, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders, the Administrator, and the Depositor) and (ii) with respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee located at One Rodney Square, 1st Floor, 920 King Street, Wilmington, Delaware 19801, Attention: Corporate Trust Administration (facsimile: (302) 888-7544); or at such other address as the Owner Trustee may designate by notice to the Certificateholder, the Administrator, and the Depositor, or corporate trust office of any successor Owner Trustee (the address of which the successor Owner Trustee will notify the Certificateholder, the Administrator, and the Depositor). "COST OF ISSUANCE ACCOUNT" means the account designated as such, established and maintained pursuant to Section 8.06 of the Indenture. "CREDIT-WORTHY COSIGNED LOAN" means a loan made to a borrower to pay the costs of attendance at a school approved under the Student Loan Programs, which loan (i) was originated and underwritten to a credit-worthy standard as set forth in the related Program Manual with at least two signatures on the note evidencing such Student Loan, and (ii) is guaranteed by TERI. "CREDIT-WORTHY NON-COSIGNED LOAN" means a loan made to a borrower to pay the costs of attendance at a school approved under the Student Loan Programs, which loan (i) was originated and underwritten to a credit-worthy standard as set forth in the related Program Manual with one signature on the note evidencing such Student Loan, and (ii) is guaranteed by TERI. "CREDIT-READY LOAN" means a loan made to a borrower to pay the costs of attendance at a school approved under the Student Loan Programs, which loan (i) was originated A-6 and underwritten to a credit-ready standard as set forth in the related Program Manual with one signature on the note evidencing such Student Loan, and (ii) is guaranteed by TERI. "CUMULATIVE DEFAULT RATE" means, as of any Quarterly Distribution Date, the percentage equivalent of the fraction (a) the numerator of which is the cumulative principal balance of the Financed Student Loans which are Defaulted Student Loans on the last day of the Collection Period related to such Quarterly Distribution Date, and (b) the denominator of which is the cumulative principal balance (on a loan by loan basis, the beginning principal balance of each Financed Student Loan on the first date each loan first enters repayment status) of all Financed Student Loans that have entered repayment status plus any prepayments on such Financed Student Loans that have occurred prior to those Financed Student Loans entering repayment. "CUSTODIAL AGREEMENTS" means, the Custodial Agreements, dated as of June 10, 2004, between each Servicer and the Indenture Trustee. "CUTOFF DATE" means with respect to the Initial Financed Student Loans, May 31, 2004. "DEFAULT" means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. "DEFAULTED STUDENT LOAN" means a Financed Student Loan for which a TERI Guaranty Event has occurred. "DEFINITIVE NOTES" has the meaning specified in Section 2.10 of the Indenture. "DELIVERY" or "DELIVER" when used with respect to Trust Account Property means the following and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Collateral to the Indenture Trustee, free and clear of any adverse claims, consistent with changes in applicable law or regulations or the interpretation thereof: (a) with respect to bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute instruments and are susceptible of physical delivery ("Physical Property"): (b) transfer of possession thereof to the Indenture Trustee endorsed to, or with respect to a certificated security: (i) delivery thereof in bearer form to the Indenture Trustee; or (ii) delivery thereof in registered form to the Indenture Trustee and (A) the certificate is endorsed to the Indenture Trustee or in blank by effective endorsement; or A-7 (B) the certificate is registered in the name of the Indenture Trustee, upon original issue or registration of transfer by the issuer; (c) with respect to an uncertificated security: (i) the delivery of the uncertificated security to the Indenture Trustee; or (ii) the issuer has agreed that it will comply with instructions originated by the Indenture Trustee, without further consent by the registered owner; (d) with respect to any security issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations: (i) a Federal Reserve Bank by book entry credits the book-entry security to the securities account (as defined in 31 CFR Part 357) of a participant (as defined in 31 CFR Part 357) which is also a securities intermediary; and (ii) the participant indicates by book entry that the book-entry security has been credited to the Indenture Trustee's securities account, as applicable; (e) with respect to a security entitlement: (i) the Indenture Trustee, becomes the entitlement holder; or (ii) the securities intermediary has agreed that it will comply with entitlement orders originated by the Indenture Trustee; (f) without further consent by the entitlement holder for the purpose of clauses (b) and (c) hereof "delivery" means: (i) with respect to a certificated security: (A) the Indenture Trustee, acquires possession thereof; (B) another person (other than a securities intermediary) either acquires possession thereof on behalf of the Indenture Trustee or, having previously acquired possession thereof, acknowledges that it holds for the Indenture Trustee; or (C) a securities intermediary acting on behalf of the Indenture Trustee acquires possession of thereof, only if the certificate is in A-8 registered form and has been specially endorsed to the Indenture Trustee by an effective endorsement; (ii) with respect to an uncertificated security: (A) the issuer registers the Indenture Trustee as the registered owner, upon original issue or registration of transfer; or (B) another person (other than a securities intermediary) either becomes the registered owner thereof on behalf of the Indenture Trustee, or, having previously become the registered owner, acknowledges that it holds for the Indenture Trustee; (g) for purposes of this definition, except as otherwise indicated, the following terms shall have the meaning assigned to each such term in the UCC: (i) "certificated security" (ii) "effective endorsement" (iii) "entitlement holder" (iv) "instrument" (v) "securities account" (vi) "securities entitlement" (vii) "securities intermediary" (viii) "uncertificated security" (h) in each case of Delivery contemplated herein, the Indenture Trustee shall make appropriate notations on its records, and shall cause same to be made of the records of its nominees, indicating that securities are held in trust pursuant to and as provided in this Agreement. "DEPOSIT AND SALE AGREEMENT" means the Deposit and Sale Agreement dated as of June 1, 2004, between the Depositor and the Issuer pursuant to which the Depositor transfers Student Loans to the Issuer. "DEPOSITOR" means The National Collegiate Funding LLC, as depositor under the Trust Agreement and any successor thereto or assignee thereof. "DEPOSITORY" means The Depository Trust Company, a New York corporation, its successors and assigns. "DEPOSITORY PARTICIPANT" means a Person for whom, from time to time, the Depository effects book-entry transfers and pledges of securities deposited with the Depository. A-9 "DETERMINATION DATE" means, with respect to any Monthly Servicing Payment Date or Distribution Date, as the case may be, the third Business Day preceding such Monthly Servicing Payment Date or Distribution Date. "DISTRIBUTION DATE" means, a Quarterly Distribution Date and/or an Auction Rate Note Interest Payment Date. "DTC" means the Depository Trust Company, a New York corporation. "DTC CUSTODIAN" means the Indenture Trustee as a custodian for DTC. "ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with an Eligible Institution, (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the States (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from at least two nationally recognized Rating Agencies in one of their respective generic rating categories which signifies investment grade, or (c) any other account that is acceptable to the Rating Agencies (as evidenced by written confirmation to the Indenture Trustee from each Rating Agency that the use of such account satisfies the Rating Agency Condition). "ELIGIBLE INSTITUTION" means a depository institution (which may be, without limitation, the Indenture Trustee or any Affiliate of the Indenture Trustee) organized under the banking laws of the United States of America or any one of the States (or any domestic branch of a foreign bank), (a) which has (i) a short-term senior unsecured debt rating of "P-1" or better by Moody's, (ii) either (A) a long term senior unsecured debt rating of "AAA" by S&P or (B) a short-term senior unsecured debt rating "A-1+" by S&P, and (iii) a short-term senior unsecured debt rating of "F-1" or better by Fitch or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and (b) whose deposits are insured by the FDIC. "ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence: (a) direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America; (b) demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any State (or any domestic branch of a foreign bank) and subject to supervision and examination by Federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in clause (a) above or portion of such obligation for the benefit of the holders of such depository receipts); PROVIDED, HOWEVER, that (i) each such investment has an original maturity of less than 365 days and (ii) at the time of the investment or contractual commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each Distribution Date, as the case may be), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit A-10 of a Person other than such depository institution or trust company) thereof shall have a credit rating from Moody's, S&P and Fitch in the highest investment category granted thereby; (c) commercial paper having an original maturity of less than 365 days and having, at the time of the investment or contractual commitment to invest therein, a rating from Moody's, S&P and Fitch in the highest investment category granted thereby; (d) investments in money market funds (including funds for which the Indenture Trustee or the Owner Trustee or any of their respective Affiliates is an investment manager or advisor) that (i) maintain a stable $1.00 net asset value per share, (ii) are freely transferable on a daily basis, (iii) invests only in other Eligible Investments, and (iv) have a rating from Moody's, S&P and Fitch in the highest investment category granted thereby; (e) bankers' acceptances having an original maturity of less than 365 days and issued by any depository institution or trust company referred to in clause (b) above; and (f) any other investment permitted by each of the Rating Agencies and as set forth in writing delivered to the Indenture Trustee; PROVIDED that such investment is consistent with the definition of an "eligible investment" contained in FASB 140, Paragraph 35. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "EUROCLEAR" means the Euroclear System, or any successor thereto. "EVENT OF DEFAULT" has the meaning specified in Section 5.01 of the Indenture. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXECUTIVE OFFICER" means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Senior Vice President, any Vice President, the Secretary, the Assistant Secretary or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof. "FASB" means the Financial Accounting Standards Board. "FDIC" means the Federal Deposit Insurance Corporation. "FINAL MATURITY DATE" means for the (i) Class A-1 Notes, the June 2014 Quarterly Distribution Date, (ii) Class A-2 Notes, the June 2027 Quarterly Distribution Date, (iii) Class A-3 Notes, the June 2029 Quarterly Distribution Date, (iv) Class A-4 Notes, the June 2031 Quarterly Distribution Date, (v) Class A-IO-1 Notes, the June 2010 Quarterly Distribution Date, (vi) Class A-IO-2 Notes, the June 2031 Quarterly Distribution Day, (vii) Class B-1 Notes, June 1, 2039, and (viii) Class B-2 Notes, June 1, 2039. "FINANCED STUDENT LOANS" means the collective reference to the Initial Financed Student Loans and the Subsequent Student Loans. A-11 "FINANCED STUDENT LOAN NOTE" means the original fully executed copy of the note (or a copy of a fully executed master promissory note) evidencing each Financed Student Loan. "FMC" means The First Marblehead Corporation. "FITCH" means Fitch, Inc., and its successors and assigns. "FORMULA RATE" means for any Interest Period with respect to the Class A-1, A-2, A-3 and A-4 Notes, the Applicable Index plus the Applicable Note Margin. "FIVE-MONTH LIBOR" see "One-Month LIBOR" herein. "FOUR-MONTH LIBOR" see "One-Month LIBOR" herein. "FUNDING PERIOD" means the period beginning on the Closing Date and ending on the first to occur of (a) the date on which an Event of Default, a Servicer Default or an Administrator Default occurs, (b) the date on which an Insolvency Event occurs with respect to the Depositor or the Administrator, (c) the first date on which amounts on deposit in the Pre-Funding Account is zero, after giving effect to the purchase of Subsequent Student Loans and related transfers of funds pursuant to Section 8.10 hereof, and (d) July 30, 2004. "FUTURE DISTRIBUTION ACCOUNT" means the account designated as such, established and maintained pursuant to Section 8.02(a)(iv) of the Indenture. "GLOBAL NOTE" means any Note registered in the name of the Depository or its nominee, beneficial interests of which are reflected on the books of the Depository or on the books of a Person maintaining any account with such Depository (directly or as an indirect participant in accordance with the rules of such Depository). The Global Note shall include the Rule 144A Global Notes and the Regulation S Global Notes. "GRANT" means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto. "GRANTOR TRUSTEE" means U.S. Bank National Association, not in its individual capacity but solely as Grantor Trustee under the Grantor Trust Agreement. "GRANTOR TRUST AGREEMENT" means the Grantor Trust Agreement dated as of June 10, 2004 between the Depositor and the Grantor Trustee. A-12 "GUARANTEE" means with respect to a Student Loan, the insurance or guarantee of the Guarantee Agency pursuant to such Guarantee Agency's Guarantee Agreement. "GUARANTEE AGENCY" means TERI. "GUARANTEE AGREEMENTS" means the TERI Guarantee Agreements. "GUARANTEE PAYMENT" means any payment made by the Guarantee Agency pursuant to the Guarantee Agreement in respect of a Financed Student Loan. "INDENTURE" means the Indenture dated as of June 1, 2004, between the Issuer and the Indenture Trustee. "INDENTURE TRUSTEE" means U.S. Bank National Association, not in its individual capacity but solely as Indenture Trustee under the Indenture. "INDENTURE TRUST ESTATE" means all money, instruments, rights and other property that are subject or intended to be subject to the lien and security interest of the Indenture for the benefit of the Noteholders (including all property and interests granted to the Indenture Trustee), including all proceeds thereof. "INDEPENDENT" means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuer, any other obligor upon the Notes, the Depositor, the Administrator and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Depositor, the Administrator or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Depositor, the Administrator or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that any Independent Person's Opinion of Counsel or certificate shall be furnished to the Indenture Trustee, such Person shall be appointed by the Issuer or the Indenture Trustee, as the case may be, and such Opinion of Counsel or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof. "INDEX MATURITY" means, (i) for One-Month LIBOR, one month, (ii) for Three-Month LIBOR, three months, (iii) for Five-Month LIBOR, five months, (iv) for Six-Month LIBOR, six months and (v) for One-Year LIBOR, one year. "INDIRECT PARTICIPANT" means any financial institution for whom any Participant holds an interest in any Note. "INDIVIDUAL NOTE" means any Note registered in the name of a holder other than the Depository or its nominee. "INITIAL FINANCED STUDENT LOANS" means the Student Loans identified as such in each of the pool supplements dated as of the Closing Date between the Trust and a Seller, transferred to the Trust as of the Closing Date and listed on the Schedule of Initial Financed A-13 Student Loans on the Closing Date as set forth in Schedule A to the Indenture (which Schedule may be in the form of microfiche or computer disk or tape). "INITIAL PURCHASERS" means UBS Securities LLC and Newport Funding Corp. "INSIDER" means, with respect to an entity, any officer, director or person privy to material information, including, but not limited to, contracts or agreements concerning such entity that are not available to the general public. "INSOLVENCY EVENT" means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. "INTEREST COLLECTIONS" shall have the meaning specified in Section 8.07 of the Indenture. "INTEREST PERIOD" means, with respect to a Distribution Date for a Class of Notes, the period from and including the Closing Date or the most recent Distribution Date for that Class of Notes on which interest on the Notes has been distributed to but excluding the current Distribution Date. "INTEREST RATE CHANGE DATE" means for each Interest Period for the Class A-1, A-2, A-3 and A-4 Notes, the date or dates, based on the Applicable Index, on which the rate of interest for such Class of Notes is to be reset. "INTEREST RATE DETERMINATION DATE" means, for each Interest Period for the Class A-1, A-2, A-3 and A-4 Notes, the related LIBOR Determination Date. "INTERESTED NOTEHOLDERS" means the Senior Noteholders (until such time as all Senior Notes have been paid in full, and then the Subordinate Noteholders). Notwithstanding the foregoing, any Notes owned by the Administrator, the Depositor or any of their respective Affiliates or agents designated for such purpose, shall be not voted by such entity nor considered in determining any specified voting percentage of the Interested Noteholders, unless otherwise set forth in the Indenture. The Class A-IO Notes shall not be entitled to any voting rights on matters to be decided by the Interested Noteholders. A-14 "INVESTMENT EARNINGS" means, with respect to any Distribution Date, the investment earnings (net of losses and investment expenses) on amounts on deposit in the Trust Accounts to be deposited into the Collection Account on or prior to such Distribution Date pursuant to Section 8.02(b) of the Indenture. "IRISH PAYING AGENT" means Deutsche International Corporate Services (Ireland) Limited, and its successors and assigns, and any other entity serving in such capacity. "ISSUER" means The National Collegiate Student Loan Trust 2004-1 until a successor replaces it and, thereafter, means the successor. "ISSUER ORDER" and "ISSUER REQUEST" means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee. "LIBOR" means the London interbank offered rate for deposits in U.S. dollars for a specified maturity. "LIBOR DETERMINATION DATE" means, with respect to each Interest Period for the Class A-1, A-2, A-3 and A-4 Notes, the second Business Day prior to the commencement of such Interest Period. For purposes of this definition, a "Business Day" is any day on which banks in London and New York City are open for the transaction of business. "LIEN" means a security interest, lien, charge, pledge, equity or encumbrance of any kind, other than tax liens and any other liens, if any, which attach to the respective Financed Student Loan by operation of law as a result of any act or omission by the related Obligor. "LIQUIDATED STUDENT LOAN" means any defaulted Financed Student Loan, liquidated by the Servicers have, after using all reasonable efforts to realize upon such Financed Student Loan, determined to charge off. "LIQUIDATION PROCEEDS" means, with respect to any Liquidated Student Loan, the moneys collected in respect thereof from whatever source, other than Recoveries or Guarantee Payments received, net of the sum of any amounts expended by the Servicers in connection with such liquidation and any amounts required by law to be remitted to the borrower on such Liquidated Student Loan. "MONTHLY ALLOCATION DATE" means the 25th calendar day of each month other than the month in which a Quarterly Distribution occurs, or if such day is not a Business Day, the immediately following Business Day. "MONTHLY SERVICING PAYMENT DATE" means the 25th calendar day of each month, or, if such day is not a Business Day, the immediately following Business Day, commencing in June 2004. "MOODY'S" means Moody's Investors Service, Inc., and its successors and assigns. A-15 "NOTE DEPOSITORY AGREEMENT" means the agreement dated as of June 9, 2004 relating to the Notes, among the Issuer, the Indenture Trustee and The Depository Trust Company, as the initial Clearing Agency. "NOTE INTEREST RATE" means, with respect to any Interest Period, (1) in the case of each of the Class A Notes, other than the Class A-IO Notes, the interest rate per annum equal to the sum of (x) the Applicable Index plus (y) the Applicable Note Margin for such Class, (2) in the case of each Class of the Class A-IO Notes, the Applicable Note Rate and (3) in the case of each Class of Auction Rate Notes, the interest rate established for each such Class for each such Interest Period pursuant to the procedures described in Appendix B to the Indenture. The interest rate per annum for the Class A Notes (other than the Class A-IO-1 Notes) will be computed on the basis of the actual number of days elapsed in the related Interest Period divided by 360. The interest rate per annum for the Class A-IO-1 Notes will be computed on a 30/360 basis, meaning a year of 360 days that is comprised of 12 months consisting of 30 days each; provided, however, that the initial Interest Period for the Class A-IO-1 Notes shall be deemed to consist of 107 days. The interest rate per annum for the Auction Rate Notes will be computed as provided in Appendix B hereto. "NOTE OWNER" means, with respect to a Book-Entry Note, the Person who is the owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified in Section 2.04 of the Indenture. "NOTEHOLDERS" means each Person in whose name a Note is registered in the Note. "NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any Distribution Date and any Class of Notes, the excess of (i) the sum of the related Noteholders' Interest Distribution Amount with respect to that Class of Notes, on the preceding Distribution Date for the Class of Notes over (ii) the amount of interest actually distributed to the holders of that Class of Notes on such preceding Distribution Date, plus interest on the amount of such excess interest due to the holders of that Class of Notes to the extent permitted by law, at the then current Note Interest Rate for that Class of Notes from such preceding Distribution Date for that Class of Notes to the current Distribution Date for that Class of Notes. "NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to any Distribution Date and any Class of Notes, the sum of (i) the aggregate amount of interest accrued at the applicable Note Interest Rate for the related Interest Period on the outstanding principal balance or outstanding Notional Amount, as applicable, of such Class of Notes on the immediately preceding Distribution Date for that Class of Notes after giving effect to all principal distributions, or Notional Amount allocations, as applicable, to such Noteholders of such Class on such date (or, in the case of the first Distribution Date, on the Closing Date) and (ii) the Noteholders' Interest Carryover Shortfall for such Class and such Distribution Date. A-16 "NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any Quarterly Distribution Date, the amount necessary, so that after distributing such amount to the Notes, the ratio, expressed as a percentage, of (a) the sum of the Pool Balance, as of the last day of the related Collection Period, plus amounts on deposit in the Pre-Funding Account, the Reserve Account, the Future Distribution Account and the Collection Account (excluding funds on deposit in the TERI Pledge Fund), in each case as of the last day of the related Collection Period, to (b) the Outstanding Amount of the Notes (other than the Class A-IO Notes) would equal at least 103%; PROVIDED, HOWEVER, that the Noteholders' Principal Distribution Amount will not exceed the Outstanding Amount of the Notes (other than the Class A-IO Notes). In addition, (a) on the Final Maturity Date for each related Class of Notes, the principal required to be distributed to such Class of Notes will include the amount required to reduce the outstanding principal balance of such Class of Notes to zero. "NOTES" means collectively, the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-IO-1 Notes, the Class A-IO-2 Notes, the Class B-1 Notes, and the Class B-2 Notes. "NOTIONAL AMOUNT" means, for each of the Class A-IO-1 Notes and the Class A-IO-2 Notes, the amount on which the interest accrued on each such Class of Notes is computed and, as of any date, shall equal the then outstanding principal balance of the Class A-4 Notes; PROVIDED, HOWEVER, that after the Quarterly Distribution Date in June 2010, the Notional Amount of the Class A-IO-1 Notes shall equal $0. "OBLIGOR" on a Financed Student Loan means the borrower or co-borrowers of such Financed Student Loan and any other Person who owes payments in respect of such Financed Student Loan, including the Guarantee Agency thereof. "OFFICERS' CERTIFICATE" means, with respect to the Issuer or the Administrator, a certificate signed by one of its Authorized Officers. "ONE-MONTH LIBOR," "THREE-MONTH LIBOR," "FIVE-MONTH LIBOR," "FOUR-MONTH LIBOR," "SIX-MONTH LIBOR" and "ONE-YEAR LIBOR" means, with respect to any Interest Period, the London interbank offered rate for deposits in U.S. dollars having the Index Maturity which appears on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination Date. If such rate does not appear on Telerate Page 3750, the rate for that day will be determined on the basis of the rates at which deposits in U.S. dollars, having the Index Maturity and in a principal amount of not less than U.S. $1,000,000, are offered at approximately 11:00 a.m., London time, on such LIBOR Determination Date to prime banks in the London interbank market by the Reference Banks. The Administrator will request the principal London office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that day will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the rate for that day will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Administrator, at approximately 11:00 a.m., New York City time, on such LIBOR Determination Date for loans in U.S. dollars to leading European banks having the Index Maturity and in a principal amount of not less than U.S. $1,000,000; provided that if the banks selected as aforesaid are not quoting as mentioned in A-17 this sentence, LIBOR in effect for the applicable Interest Period for the applicable Index Maturity will be LIBOR in effect for the previous Interest Period for that Index Maturity. "ONE-YEAR LIBOR" see "One-Month LIBOR" herein. "OPINION OF COUNSEL" means a written opinion of an attorney at law or firm of attorneys selected by the Person obliged to deliver an opinion on the subject in question, reasonably acceptable to the Person who is to receive the same hereunder, duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. "OPTIONAL DEPOSIT" has the meaning specified in Section 8.11(a) of the Indenture. "ORIGINAL PRINCIPAL BALANCE" means, for any Class of Notes, the original principal balance (or, in the case of the Class A-IO-1 and Class A-IO-2 Notes, the original Notional Amount) for such Class on the Closing Date, as set forth in Section 2.02 of the Indenture. "OUTSTANDING" means, as of the date of determination, all Notes theretofore authenticated and delivered under the Indenture except: (i) Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Noteholders thereof; (iii) Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; PROVIDED that in determining whether the Noteholders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any other Basic Document, Notes owned by the Issuer, any other obligor upon the Notes, the Depositor, the Administrator, the Servicer, or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee either actually knows to be so owned or has received written notice thereof shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Depositor, the Administrator, the Servicer, any Sub-Servicer or any Affiliate of any of the foregoing Persons. A-18 "OUTSTANDING AMOUNT" means the aggregate principal amount or Notional Amount, as applicable, of all Notes (or, if the context so indicates, one or more Classes of Notes) Outstanding at the date of determination. "OWNER TRUSTEE" means Wachovia Trust Company, National Association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, and any successor thereto or assigned thereof. "PARTICIPANT" means a Person that has an account with DTC. "PAYING AGENT" means (i) the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make the payments to and distributions from the Collection Account and payments of principal of and interest and any other amounts owing on the Notes on behalf of the Issuer and (ii) the Irish Paying Agent. "PERSON" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof. "PHYSICAL PROPERTY" has the meaning assigned to such term in the definition of "Delivery" above. "POOL BALANCE" means, at any time, the aggregate principal balance of the Financed Student Loans at the end of the preceding Collection Period (including accrued interest thereon for such Collection Period to the extent such interest will be capitalized upon commencement of repayment or during deferment or forbearance). "PREDECESSOR NOTE" means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.05 of the Indenture and in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note. "PRE-FUNDED AMOUNT" means, with respect to any Distribution Date, the amounts on deposit in the Pre-Funding Account. "PRE-FUNDING ACCOUNT" means the account designated as such, established and maintained pursuant to Section 8.02(a)(iii) of the Indenture. "PRIVATE NOTES" means the Class A-4, Class A-IO-1 and Class A-IO-2 Notes. "PROCEEDING" means any suit in equity, action at law or other judicial or administrative proceeding. "PROGRAM MANUALS" means the program manual attached as an exhibit to each TERI Guarantee Agreement together with the student loan program guidelines of each of the Sellers which describe their credit and collection policies for the origination, acquisition, A-19 financing and servicing of Financed Student Loans, as amended, revised or supplemented from time to time; PROVIDED, HOWEVER, that no such amendment, revision or supplement shall (a) reduce in any manner the amount of, or delay the timing of, collections of payments with respect to Financed Student Loans or (b) reduce the underwriting standards with respect to Financed Student Loans acquired or to be acquired by the Issuer, in each case without satisfying the Rating Agency Condition. "PURCHASE AMOUNT" means, as of the close of business on the last day of a Collection Period, 100% of the amount required to prepay in full the respective Financed Student Loan, in each case under the terms thereof including all accrued interest thereon expected to be capitalized upon commencement of repayment or during deferment or forbearance. "PURCHASE PRICE" means the purchase price of each Subsequent Student Loan in an amount not exceeding 9.8% of the aggregate principal balance thereof as of its related Subsequent Cutoff Date. For purposes of the foregoing calculations, the aggregate principal balance of each Financed Student Loan includes accrued interest thereon from the date of origination to the related Subsequent Cutoff Date, in each case expected to be capitalized upon commencement of repayment or during deferment or forbearance. "PURCHASED STUDENT LOAN" means a Financed Student Loan purchased by the Servicer or repurchased by a Seller from the Issuer. "QUALIFIED INSTITUTIONAL BUYER" has the meaning ascribed to such term in Rule 144A under the Securities Act. "QUARTERLY DISTRIBUTION DATE" means the 25th calendar day of each September, December, March and June or if the 25th day is not a Business Day, the next Business Day, commencing in September 2004. "RATING AGENCY" means each of Moody's, S&P and Fitch. If any such organization or successor is no longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Indenture Trustee and the Owner Trustee. "RATING AGENCY CONDITION" means, with respect to any action, that each Rating Agency shall have been given 10 days' prior notice thereof (or such shorter period as shall be acceptable to the Rating Agencies) and that none of the Rating Agencies shall have notified the Administrator, the Indenture Trustee and the Remarketing Agents, if applicable, in writing that such action will in and of itself result in a reduction or withdrawal of the then current rating of the Notes, based upon the review by each such Rating Agency of payment and default performance of the Financed Student Loans, financial information relating to the Trust, the Trust Estate, the Guarantee Agency, the Servicers or the Administrator, and such other information that such Rating Agency determines to review. "REALIZED LOSSES" means the excess of the aggregate principal balance of any Liquidated Student Loan plus accrued but unpaid interest thereon over the related Liquidation Proceeds to the extent allocable to principal. A-20 "RECORD DATE" means (i) with respect to the Class A Notes, the close of business on the Business Day immediately preceding a Distribution Date for such Classes of Notes and (ii) with respect to the Auction Rate Notes, the meaning set forth in Appendix B hereto. "RECOVERIES" means, with respect to any Liquidated Student Loan, moneys collected in respect thereof, from whatever source, during any Collection Period following the Collection Period in which such Financed Student Loan, became a Liquidated Student Loan, net of the sum of any amounts expended by the Servicers (or any Sub-Servicer acting on their behalf) for the account of any Obligor and any amounts required by law to be remitted to the Obligor. "REFERENCE BANK" means a leading bank (i) engaged in transactions in Eurodollar deposits in the international Eurocurrency market, (ii) not controlling, controlled by or under common control with the Administrator and (iii) having an established place of business in London. "REGULATION S" means Regulation S under the Securities Act. "REGULATION S GLOBAL NOTES" means the Private Notes sold in offshore transactions in reliance on Regulation S and represented by one or more Global Notes deposited with the Indenture Trustee as custodian for the Depository. "REGULATION S INVESTOR" means, with respect to a transferee of a Regulation S Global Note, a transferee that acquires such Private Note pursuant to Regulation S. "REGULATION S TRANSFER CERTIFICATE" means a letter substantially in the form attached to the Indenture as Exhibit G or Exhibit H. "REHABILITATED STUDENT LOANS" means Financed Student Loan purchased by TERI due to a TERI Guaranty Event, that the Trust will repurchase, (to the extent there are Available Funds), if TERI succeeds, after purchase, in obtaining from the borrower three full consecutive on-time monthly payments pursuant to the TERI Deposit and Security Agreement, and the borrower is within thirty days of being current on the Financed Student Loan. "RESERVE ACCOUNT" means the account designated as such, established and maintained pursuant to Section 8.02(a)(ii) of the Indenture. "RESERVE ACCOUNT INITIAL DEPOSIT" means $114,130,609. "RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee or the Owner Trustee, any officer within the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, including any Vice President, Assistant Vice President, Secretary, Assistant Secretary, or any other officer of the Indenture Trustee or the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers, with direct responsibility for the administration of the Indenture (or the Trust Agreement, as amended from time to time, as applicable to the Owner Trustee) and the other Basic Documents on behalf of the Indenture Trustee or the Owner Trustee and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. A-21 "RESTRICTED PERIOD" means the 40-day period prescribed by Regulation S commencing on the later of (a) the date upon which Private Notes are first offered to Persons other than the Initial Purchaser and any other distributor (as such term is defined in Regulation S) of the Private Notes and (b) the Closing Date. "RULE 144A" means Rule 144A under the Securities Act. "RULE 144A CERTIFICATION" means a letter substantially in the form attached to the Indenture as Exhibit D. "RULE 144A GLOBAL NOTES" means the Private Notes sold within the United States to U.S. Persons, initially issued to Qualified Institutional Buyers in the form of beneficial interests in one or more Global Notes, deposited with the Indenture Trustee as custodian for the Depository. "S&P" means Standard and Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors and assigns. "SCHEDULES OF FINANCED STUDENT LOANS" means the listing of the Financed Student Loans set forth in Schedule A to the Indenture (which Schedule may be in the form of microfiche or file or computer disk tape), as amended or supplemented on each Subsequent Transfer Date to reflect the sale to the Trust of the Subsequent Student Loans. "SEC" means the United States Securities and Exchange Commission. "SECURITIES" means the Notes. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITIES LEGEND" means the following legend: "THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (4) PURSUANT TO A VALID REGISTRATION STATEMENT." A-22 "SELLER" means any person authorized to sell Student Loans to the Depositor pursuant to a Student Loan Purchase Agreement. "SENIOR NOTEHOLDERS" means, collectively, each Person in whose name a Senior Note is registered in the Note Register. "SENIOR NOTES" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-IO-1 Notes and the Class A-IO-2 Notes. "SERVICER" means, the Pennsylvania Higher Education Assistance Agency, Great Lakes Educational Loan Services, Inc., Nelnet, Inc. or any other loan servicer satisfying the Rating Agency Condition. "SERVICER DEFAULT" means any default event specified in a Servicing Agreement. "SERVICER'S REPORT" means any report of a Servicer (or any Sub-Servicer acting at the direction of the Servicer) delivered pursuant to a Servicing Agreement, substantially in the form acceptable to the Administrator. "SERVICING AGREEMENT" means (a) the agreement by which the Pennsylvania Higher Education Assistance Agency will act as a Servicer, dated as of October 16, 2001, as amended, between FMC and the Pennsylvania Higher Education Assistance Agency, which agreement will be assigned to the Trust concurrent with the initial purchase of Financed Student Loans, (b) Non-FFELP Loan Servicing Agreement, dated as of May 1, 2003, as amended, by and between Great Lakes Educational Loan Services, Inc. and FMC, (c) Loan Servicing Agreement, dated as of August 1, 2001, as amended, between Nelnet, Inc. (formerly known as Nelnet Loan Services, Inc.) and FMC, and (d) any other servicing agreement between the Issuer and a Servicer under which such Servicer agrees to service Financed Student Loans included in the Trust Estate, which servicing agreement shall satisfy the Rating Agency Condition. "SERVICING FEE" means the fee payable to a Servicer pursuant to a Servicing Agreement as in effect on the Closing Date, such fee may be increased upon satisfying the Rating Agency Condition. "SIX-MONTH LIBOR" see "One-Month LIBOR" herein. "SPECIFIED RESERVE ACCOUNT BALANCE" means, on any Quarterly Distribution Date beginning with the Quarterly Distribution Date in June 2005 (after giving effect to all deposits or withdrawals therefrom on that Quarterly Distribution Date) the greater of (a) the respective amount listed below for that Quarterly Distribution Date: ON OR AFTER QUARTERLY DISTRIBUTION DATE AMOUNT --------------------------------------- ------ June 2005 $95,000,000 September 2005 $80,000,000 December 2005 $70,000,000 March 2006 $60,000,000 June 2006 $50,000,000 A-23 September 2006 $40,000,000 December 2006 $30,000,000 March 2007 $25,000,000 June 2007 $20,000,000 September 2007 $15,000,000 December 2007 $10,000,000 March 2008 $10,000,000 June 2008 $ 5,000,000 September 2008 and thereafter $ 1,500,000 (b) 1.25% of the Outstanding Amount of the Notes (other than the Class A-IO Notes) as of the last day of the immediately preceding Collection Period, and (c) $1,500,000. "STATE" means any one of the 50 States of the United States of America or the District of Columbia. "STUDENT LOAN" means (a) a Credit-Worthy Cosigned Loan, (b) a Credit-Worthy Non-Cosigned Loan, or (c) a Credit-Ready Loan. "STUDENT LOAN ACQUISITION CERTIFICATE" means the Student Loan Acquisition Certificate in substantially the form attached as Exhibit B to the Indenture, as such Exhibit B may be amended or supplemented from time to time. "STUDENT LOAN FILES" means (a) the original fully executed copy of the note evidencing the Financed Student Loan (including the original loan application fully executed by the Obligor); and (b) any and all other documents and computerized records that the Servicer shall keep on file, in accordance with its customary procedures, relating to such Financed Student Loan or any borrower with respect thereto. "STUDENT LOAN PROGRAMS" means the student loan programs sponsored by the Depositor and its Affiliates for the origination, acquisition, holding, servicing and financing of Student Loans, which programs are governed by the Program Manuals. "STUDENT LOAN PURCHASE AGREEMENTS" means, collectively, the student loan purchase agreements and any other similar agreement providing for the sale of Student Loans from the Sellers to the Depositor for deposit into the Trust Estate, including the pool supplement relating thereto by and among the applicable Seller, the Depositor and FMC. On the Closing Date, the Student Loan Purchase Agreements shall be as listed in Schedule D to the Indenture. "SUBORDINATE NOTEHOLDERS" means, collectively, each Person in whose name a Subordinate Note is registered in the Note Register. "SUBORDINATE NOTES" means the Class B-1 Notes and the Class B-2 Notes. A-24 "SUBSEQUENT CUTOFF DATE" means the day specified in the related Subsequent Transfer Agreement as of which principal and interest accruing with respect to a Subsequent Student Loan is to be transferred to the Issuer. "SUBSEQUENT STUDENT LOANS" means the Student Loans purchased by the Trust from the Depositor, and the Depositor from the Sellers with proceeds in the Pre-Funding Account, each Subsequent Student Loan to be identified on Schedule B to the Indenture (which may be in the form of microfiche or computer tape). "SUBSEQUENT TRANSFER DATE" means each day during the Funding Period on which Subsequent Student Loans will be conveyed to the Issuer. "SUPPLEMENTAL INDENTURE" means any amendment of or supplement to this Indenture made in accordance with Article IX hereof. "TELERATE PAGE 3750" means the display page so designated on the Bridge Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices) or such comparable page on a comparable service. "10% POOL BALANCE DISTRIBUTION DATE" means the Quarterly Distribution Date on which the outstanding aggregate Pool Balance is equal to or less than 10% of the sum of the aggregate principal balance as of the Cutoff Date of the Initial Financed Student Loans plus the aggregate initial principal balance of all Subsequent Student Loans. "TERI" means The Education Resources Institute, Inc., a Massachusetts non-profit corporation, or its successors and assigns. "TERI DEPOSIT AND SECURITY AGREEMENT" means the Deposit and Security Agreement dated as of June 10, 2004, by and among the Issuer, TERI and the Administrator with respect to the issuance of the Notes hereunder. "TERI GUARANTEE AGREEMENT" means, with a respect to a Student Loan Program, a guarantee agreement between a Seller and TERI, together with the acknowledgment relating thereto among the Seller, TERI and the Issuer. On the Issue Date, the TERI Guarantee Agreements shall be as listed on Schedule C to the Indenture. "TERI GUARANTY AMOUNT" means, pursuant to the TERI Guaranty Agreements, Financed Student Loans are guaranteed 100% as to payment of principal and interest. "TERI GUARANTY EVENT" means a claim for payment on a Financed Student Loan made under the TERI Guaranty Agreements if (a) the Obligor has failed to make monthly principal and/or interest payments on such loan when due, provided such failure continues for a period of 150 consecutive days, (b) the Obligor has filed a Chapter 13 petition in a bankruptcy or, in a Chapter 7 proceeding has filed an adversary proceeding pursuant to 11 U.S.C. ss. 523(a)(8), or (c) the Obligor has died. A-25 "TERI PLEDGE FUND" means the fund by the name created in the TERI Deposit and Security Agreement whereby TERI will pledge a portion of its guaranty fees to the Trust, by deposit into a special trust account with the Indenture Trustee. "TERI TRIGGER EVENT" means with respect to the Financed Student Loans on any Distribution Date, such time as the Cumulative Default Rate exceeds 15%; PROVIDED, HOWEVER, that a TERI Trigger Event will not have occurred if TERI is continuing to pay claims on Defaulted Student Loans that have met the TERI due diligence requirements. "THREE-MONTH LIBOR" see "One-Month LIBOR" herein. "TREASURY REGULATIONS" means regulations, including proposed or temporary regulations, promulgated under the Code. References in any document or instrument to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. "TRUST" means the Issuer, established pursuant to the Trust Agreement. "TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and investments held from time to time in any Trust Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise), including the Reserve Account Initial Deposits and the Pre-Funded Amount and all proceeds of the foregoing. "TRUST ACCOUNTS" has the meaning specified in Section 8.02(b) of the Indenture. "TRUST AGREEMENT" means the Trust Agreement, dated as of June 10, 2004, among the Depositor, TERI and the Owner Trustee. "TRUST CERTIFICATE" means the Certificate. "TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as amended from time to time. "UCC" means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time. "UNDERWRITERS" means UBS Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Goldman, Sachs & Co. A-26 APPENDIX B PROVISIONS RELATING TO NOTES BEARING INTEREST AS AN AUCTION RATE Unless otherwise provided herein, the provisions of this Appendix B shall apply separately to the Class B-1 Notes and Class B-2 Notes, each constituting Auction Rate Notes ("Auction Rate Notes"). ARTICLE I DEFINITIONS SECTION 1.01. CERTAIN DEFINITIONS. In addition to the terms defined elsewhere in the Indenture, the following terms shall have the following meanings with respect to the Auction Rate Note, unless the context otherwise requires: "ALL HOLD RATE" on any date of determination, shall mean the Applicable LIBOR-Based Rate less 0.25%, provided that in no event shall the applicable All Hold Rate be greater than the Maximum Interest Rate. "APPLICABLE AUCTION RATE" shall have the meaning set forth in Section 1.04(b) of this Appendix B. "APPLICABLE LIBOR-BASED RATE" shall mean (a) for an Auction Period of 35 days or less, One-Month LIBOR, (b) for an Auction Period of more than 35 days but less than 115 days, Three-Month LIBOR, (c) for an Auction Period of more than 114 days but less than 195 days, Six-Month LIBOR, and (d) for an Auction Period of more than 194 days, One-Year LIBOR. "APPLICABLE NUMBER OF BUSINESS DAYS" means the greater of two Business Days or one Business Day plus the number of Business Days by which the Auction Date precedes the first day of the next succeeding Auction Rate Note Interest Period. "AUCTION" shall mean each periodic implementation of the Auction Procedures. "AUCTION AGENCY AGREEMENT" shall mean the Auction Agency Agreement, dated as of June 1, 2004, among the Trustee, the Issuer and the Auction Agent, and any similar agreement or agreements with a successor Auction Agent, in each case as from time to time amended or supplemented. "AUCTION AGENT" shall mean any person appointed as such pursuant to Section 1.13 of this Appendix B. "AUCTION AGENT FEE" shall mean the fee to be paid to the Auction Agent for the services rendered by it under the Auction Agency Agreement and the Broker-Dealer Agreements. "AUCTION DATE" shall mean, for each Class of Auction Rate Notes, the Business Day immediately preceding the first day of each Auction Rate Note Interest Period for such Class, B-1 other than: (a) each Auction Rate Note Interest Period commencing after the ownership of the Auction Rate Note of such Class is no longer maintained in book-entry form by the Depository; (b) each Auction Rate Note Interest Period commencing after the occurrence and during the continuance of a Payment Default; or (c) any Auction Rate Note Interest Period commencing less than the Applicable Number of Business Days after the cure or waiver of a Payment Default. Notwithstanding the foregoing, the Auction Date for one or more Auction Periods may be changed pursuant to Section 1.15 of this Appendix B. "AUCTION PERIOD" means, with respect to any Auction Rate Note, the Auction Rate Note Interest Period applicable thereto as the same may be changed pursuant to Section 1.15 of this Appendix B. "AUCTION PROCEDURES" shall mean the procedures set forth in Section 1.06 of this Appendix B. "AUCTION RATE" shall mean the rate of interest per annum on any Auction Date that results from the implementation of the Auction Procedures, and determined as described in Section 1.06(c)(ii) of this Appendix B. "AUCTION RATE NOTE INITIAL INTEREST PERIOD" shall mean the period from and including the date of delivery of the Auction Rate Notes, and ending on and including July 15, 2004 for the for the Class B-1 Notes and July 8, 2004 for the Class B-2 Notes. "AUCTION RATE NOTE INTEREST PAYMENT DATE" shall mean the day after the end of each Auction Rate Note Interest Period, except as changed as provided herein; PROVIDED, HOWEVER, that if the duration of the Auction Rate Note Interest Period is one year or longer, then the Auction Rate Note Interest Payment Dates thereof shall be each January 1 and July 1 during such Auction Rate Note Interest Period and the day following the end of such Auction Rate Note Interest Period; and shall also mean the Final Maturity Date of any Class of Auction Rate Notes, or if any such date is not a Business Day, the next succeeding Business Day (but only for interest accrued through the last day of the Auction Rate Note Interest Period next preceding such Auction Rate Note Interest Payment Date). "AUCTION RATE NOTE INTEREST PERIOD" shall mean (a) with respect to each class of Auction Rate Notes, the Auction Rate Note Initial Interest Period and unless otherwise changed as described in Section 1.15 of this Appendix B, each successive period of generally 28 days, commencing on the first Business Day following the applicable Auction Date for a Class of Auction Rate Note, and ending on (and including) the next applicable Auction Date for such Class of Auction Rate Note (unless such date is not followed by a Business Day, in which case on the next succeeding day that is followed by a Business Day) and (b) if the Auction Periods are changed, each period commencing on an Auction Rate Note Interest Payment Date and ending on but excluding the next succeeding Auction Rate Note Interest Payment Date. By way of example, if an Auction Rate Note Interest Period ordinarily would end on a Tuesday, but the following Wednesday is not a Business Day, the Auction Rate Note Interest Period will end on that Wednesday and the new Auction Rate Note Interest Period will begin on Thursday. "AUCTION RATE NOTES" shall mean the Class B-1 Notes and Class B-2 Notes. B-2 "AUTHORIZED DENOMINATION" shall mean $50,000 and any integral multiple thereof. "AVAILABLE AUCTION RATE NOTE" shall have the meaning set forth in Section 1.06(c)(i)(A) of this Appendix B. "BID" shall have the meaning set forth in Section 1.06(a)(i) of this Appendix B. "BIDDER" shall have the meaning set forth in Section 1.06(a)(i) of this Appendix B. "BROKER-DEALER" shall mean UBS Financial Services Inc. and Deutsche Bank Securities Inc. or any other broker or dealer (each as defined in the Securities Exchange Act), commercial bank or other entity permitted by law to perform the functions required of a Broker-Dealer set forth in the Auction Procedures that (a) is a Participant (or an affiliate of a Participant), (b) has a capital surplus of at least $100,000,000, (c) has been selected by the Administrator with the approval of the Market Agents (which approval shall not be unreasonably withheld), and (d) has entered into a Broker-Dealer Agreement that remains effective. "BROKER-DEALER AGREEMENT" shall mean the broker-dealer agreement, dated as of June 1, 2004, between the Auction Agent and UBS Financial Services Inc. and the broker-dealer agreement, dated as of June 1, 2004, between the Auction Agent and Deutsche Bank Securities Inc., and each other agreement between the Auction Agent and a Broker-Dealer pursuant to which the Broker-Dealer agrees to participate in Auctions as set forth in the Auction Procedures, as from time to time amended or supplemented. "BROKER-DEALER FEE" shall mean the fee to be paid to a Broker-Dealer for the services rendered by a Broker-Dealer under a Broker-Dealer Agreement. "BROKER-DEALER FEE RATE" on any Auction Date, shall mean the rate per annum at which the service charge to be paid to a Broker-Dealer for the services rendered by it with respect to such Auction Date accrues, as provided in the Auction Agency Agreement and Broker-Dealer Agreement. "CARRY-OVER AMOUNT" shall mean the excess, if any, of (a) the amount of interest on a Class of Auction Rate Note that would have accrued with respect to the related Auction Period at the Auction Rate (if an Auction is not held for any reason, the Auction Rate shall be deemed to be the Maximum Auction Rate for purposes of this definition) over (b) the amount of interest on such Class of Auction Rate Note with respect to such Class of Auction Rate Note, with respect to such Auction Period based on the Maximum Rate, together with the unpaid portion of any such excess from prior Auction Periods; provided that any reference to "principal" or "interest" in the Indenture, and in the Auction Rate Notes shall not include within the meanings of such words any Carry-over Amount or any interest accrued on any Carry-over Amount. "DEFAULT RATE" on any date of determination shall mean the interest rate per annum equal to the lesser of (a) the Maximum Auction Rate or (b) the Maximum Interest Rate, rounded to the nearest one-thousandth (0.001) of 1%. "EXISTING OWNER" shall mean, (a) with respect to and for the purpose of dealing with the Auction Agent in connection with an Auction, a Person who is a Broker-Dealer listed in the B-3 existing owner registry at the close of business on the Business Day immediately preceding the Auction Date for such Auction and (b) with respect to and for the purpose of dealing with a Broker-Dealer in connection with an Auction, a Person who is a beneficial owner of Auction Rate Note. "HOLD ORDER" shall have the meaning set forth in Section 1.06(a)(i) of this Appendix B. "INTEREST AMOUNT" shall mean the amount of interest distributable in respect of each Auction Rate Note for any Auction Rate Note Interest Period or part thereof, as calculated in accordance with Section 1.10 of this Appendix B. "LIBOR DETERMINATION DATE" shall mean, with respect to an Auction Rate Note, the Auction Date, or if no Auction Date is applicable, the Business Day immediately preceding the first day of each Auction Rate Note Interest Period. "MARKET AGENT" shall mean the market agent or market agents appointed pursuant to Section 1.12 of this Appendix B, and its or their successors or assigns. "MARKET AGENT AGREEMENT" shall mean each Market Agent Agreement, dated as of June 1, 2004, between the Issuer and the initial Market Agents, and any similar agreement with a successor Market Agent, in each case as from time to time amended or supplemented. "MAXIMUM AUCTION RATE" shall mean either (a) the Applicable LIBOR-Based Rate plus 1.50% (if the ratings assigned by the Rating Agencies to the Auction Rate Note are "Aa3" and "AA-" or better, respectively), (b) the Applicable LIBOR-Based Rate plus 2.50% (if any one of the ratings assigned by the Rating Agencies to the Auction Rate Note is less than "Aa3" or "AA-", respectively, but each such rating is at least any category of "A"), or (c) the Applicable LIBOR-Based Rate plus 3.50% (if any one of the ratings assigned by the Rating Agencies to the Auction Rate Note is less than the lowest category of "A"). For purposes of the Auction Agent and the Auction Procedures, the ratings referred to in this definition shall be the last ratings of which the Auction Agent has been given notice pursuant to the Auction Agent Agreement. The percentage amount to be added to the Applicable LIBOR-Based Rate in any one or more of clause (a), (b) and (c) above may be increased upon satisfying the Rating Agency Condition. "MAXIMUM INTEREST RATE" shall mean the lesser of (a) 17% per annum or such higher rate as may be permitted upon satisfying the Rating Agency Condition or (b) the maximum rate of interest permitted under the laws of the State of Delaware. "MAXIMUM RATE" on any date of determination, shall mean the interest rate per annum equal to the lesser of: (a) the Maximum Auction Rate; or (b) the Maximum Interest Rate, in each case rounded to the nearest one-thousandth (0.001) of 1%. B-4 "ONE-MONTH LIBOR", "THREE-MONTH LIBOR", "SIX-MONTH LIBOR" or "ONE-YEAR LIBOR" shall mean, with respect to the Auction Rate Notes, the offered rate, as determined by the Auction Agent, of the Applicable LIBOR-Based Rate for United States dollar deposits which appears on Telerate Page 3750, as reported by Bloomberg Financial Markets Commodities News (or such other page as may replace Telerate Page 3750 for the purpose of displaying comparable rates) as of approximately 11:00 a.m. London time, on the LIBOR Determination Date; provided, that if on any calculation date, no rate appears on Telerate Page 3750 as specified above, the Auction Agent shall determine the arithmetic mean of the offered quotations for four major banks in the London interbank market, for deposits in U.S. dollars for the respective period specified above for the banks in the London interbank market as of approximately 11:00 a.m., London time, on such calculation date and in a principal amount of not less than $1,000,000 that is representative of a single transaction in such market and at such time, unless fewer than two such quotations are provided, in which case, the Applicable LIBOR-Based Rate shall be the arithmetic mean of the offered quotations that leading banks in New York City selected by the Auction Agent are quoting on the relevant LIBOR Determination Date for loans in U.S. dollars to leading European banks in a principal amount of not less than $1,000,000 that is representative of a single transaction in such market at such time. All percentages resulting from such calculations shall be rounded upwards, if necessary, to the nearest one hundredth of one percent. "ORDER" shall have the meaning set forth in Section 1.06(a) of this Appendix B. "OWNER" as used in this Appendix B shall mean the beneficial owner of any Auction Rate Notes. "PARTICIPANT" shall mean a member of or participant in, the Depository. "PAYMENT DEFAULT" shall mean failure to make payment of interest on, premium, if any, and principal of an Auction Rate Note when due, by the Issuer. "PERSON" means and includes, unless otherwise specified, an individual, corporation, company, trust, estate, partnership or association. "POTENTIAL OWNER" shall mean any Person (including any Existing Owner that is (a) a Broker-Dealer when dealing with the Auction Agent and (b) a potential beneficial owner when dealing with a Broker-Dealer), who may be interested in acquiring Auction Rate Notes (or, in the case of an Existing Owner thereof, an additional principal amount of Auction Rate Notes). "RECORD DATE" shall mean (a) if, and for so long as, Auction Rate Note Interest Payment Dates are specified to occur at the end of each Auction Period, as provided in Section 1.15 of this Appendix B, the Applicable Number of Business Days immediately preceding each Auction Rate Note Interest Payment Date and (b) if and for so long as interest is payable with respect thereto semiannually, one Business Day prior to each Auction Rate Note Interest Payment Date. "REGISTRAR" shall mean the Trustee or any separate registrar appointed under the Indenture with respect to the Auction Rate Note. "SEC" shall mean the Securities and Exchange Commission. B-5 "SECURITIES EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "SELL ORDER" shall have the meaning set forth in Section 1.06(a) of this Appendix B. "SERVICING FEES" means any fees payable by the Issuer to a Servicer in respect of Financed Student Loans pursuant to the provisions of a Servicing Agreement. "SUBMISSION DEADLINE" shall mean 1:00 p.m., New York time, on any Auction Date or such other time on any Auction Date by which the Broker-Dealers are required to submit Orders to the Auction Agent , as specified by the Auction Agent from time to time. "SUBMITTED BID" shall have the meaning set forth in Section 1.06(c)(i) of this Appendix B. "SUBMITTED HOLD ORDER" shall have the meaning set forth in Section 1.06(c)(i) of this Appendix B. "SUBMITTED ORDER" shall have the meaning set forth in Section 1.06(c)(i) of this Appendix B. "SUBMITTED SELL ORDER" shall have the meaning set forth in Section 1.06(c)(i) of this Appendix B. "SUFFICIENT CLEARING BIDS" shall have the meaning set forth in Section 1.06(c)(i)(B) of this Appendix B. "TRUSTEE" means the Indenture Trustee as defined in Appendix A to the Indenture. "WINNING BID RATE" shall have the meaning set forth in Section 1.06(c)(i)(C) of this Appendix B. SECTION 1.02. DESCRIPTION OF SERIES; GLOBAL FORM; DEPOSITORY. (a) As provided in the Indenture, Class B-1 Notes and Class B-2 Notes shall be issued as Auction Rate Notes. (b) Except as otherwise provided in this Section, the Auction Rate Notes, in the form of one or more securities, shall be registered in the name of the Depository, and ownership thereof shall be maintained in book-entry form by the Depository for the account of the Participants thereof. Initially, the Auction Rate Notes shall be registered in the name of Cede & Co., as the nominee of DTC. Except as provided in subsection (c) of this Section, the Auction Rate Notes may be transferred, in whole but not in part, only to the Depository, or to a successor to DTC selected or approved by the Administrator or to a nominee of such successor Depository. (i) Neither the Issuer, the Registrar nor any of their respective affiliates shall have any responsibility or obligation with respect to: B-6 (A) the accuracy of the records of the Depository or any Participant with respect to any beneficial ownership interest in an Auction Rate Note; (B) the delivery to any Participant, any Owner of an Auction Rate Note or any other person, other than the Depository, of any notice with respect to the Auction Rate Notes; or (C) the payment to any Participant, any Owner of an Auction Rate Note or any other person, other than the Depository, of any amount with respect to the principal of, premium, if any, or interest on the Auction Rate Notes. So long as the certificates for the Auction Rate Notes are not issued pursuant to subsection (c) of this Section 1.02, the Issuer and the Registrar may treat the Depository as, and deem the Depository to be, the absolute owner of the Auction Rate Notes for all purposes whatsoever, including without limitation: (i) the payment of principal of, premium, if any, and interest on the Auction Rate Notes; (ii) giving notices of redemption and other matters with respect to the Auction Rate Notes; (iii) registering transfer with respect to the Auction Rate Notes; and (iv) the selection of Auction Rate Notes for redemption. (d) If at any time the Market Agent has notified the Issuer that the Auction Rate Notes should not be maintained in book-entry form or the Depository notifies the Issuer that it is unwilling or unable to continue as Depository with respect to the Auction Rate Notes, or if at any time the Depository shall no longer be registered or in good standing under the Securities Exchange Act or other applicable statute or regulation and a successor Depository is not appointed by the Issuer within 90 days after the Issuer receives notice or becomes aware of such condition, as the case may be, then this Section shall no longer be applicable and the Issuer shall execute and the Registrar shall authenticate and deliver certificates representing the Auction Rate Notes as provided below. Certificates for the Auction Rate Notes issued in exchange for a global certificate pursuant to this subsection (c) shall be registered in such names and authorized denominations as the Depository, pursuant to instructions from the Participants or otherwise, shall instruct the Issuer and the Registrar. The Registrar shall deliver such certificates representing the Auction Rate Notes to the persons in whose names such Auction Rate Note are so registered on the Business Day immediately preceding the first day of an Auction Rate Note Interest Period. SECTION 1.03. LIMITATIONS ON TRANSFER. So long as the ownership of the Auction Rate Note is maintained in book-entry form by the Depository, an Existing Owner may sell, transfer or otherwise dispose of its beneficial interest in an Auction Rate Note only pursuant to a Bid or B-7 Sell Order placed in any Auction or to or through a Broker-Dealer; provided that in the case of all transfers other than pursuant to Auctions such Existing Owner, its Broker-Dealer or its Participant advises the Auction Agent of such transfer. SECTION 1.04. INTEREST ON AUCTION RATE NOTES. (a) Interest on the Auction Rate Notes shall accrue for each Auction Rate Note Interest Period and shall be payable in arrears, on each Auction Rate Note Interest Payment Date and shall be calculated in accordance with the provisions of Section 1.10 of this Appendix B. (b) The rate of interest on each Class of Auction Rate Notes for its Initial Auction Rate Note Interest Period shall be as follows: CLASS INITIAL RATE B-1 1.50% B-2 1.50% The rate of interest on an Auction Rate Note for each subsequent Auction Rate Note Interest Period shall be the Applicable Auction Rate unless such Auction Rate exceeds the Maximum Rate, in which case, the rate of interest on the Auction Rate Note for such Auction Rate Note Interest Period shall be the Maximum Rate, or unless the Maximum Rate shall actually be lower than the All Hold Rate, in which case the rate of interest on the Auction Rate Note for such Auction Rate Note Interest Period shall be the Maximum Rate; provided that if, on any Auction Date, an Auction is not held for any reason, then the rate of interest for the next succeeding Auction Rate Note Interest Period shall equal the Maximum Rate on such Auction Date. Notwithstanding the foregoing, if: (i) the ownership of an Auction Rate Note is no longer maintained in book-entry form by the Depository, the rate of interest on such Auction Rate Note for any Auction Rate Note Interest Period commencing after the delivery of certificates representing Auction Rate Note pursuant to Section 1.02(c) of this Appendix B shall equal the Maximum Rate on the Business Day immediately preceding the first day of such Auction Rate Note Interest Period; or (ii) a Payment Default occurs, Auctions will be suspended and the Applicable Auction Rate (as defined below) for the Auction Rate Note Interest Period commencing on or after such Payment Default and for each Auction Rate Note Interest Period thereafter, to and including the Auction Rate Note Interest Period, if any, during which, or commencing less than two Business Days after, such Payment Default is cured will equal the Default Rate. The rate per annum at which interest is payable on an Auction Rate Note for any Auction Rate Note Interest Period is herein referred to as the "Applicable Auction Rate." B-8 Notwithstanding anything herein to the contrary, the Applicable Auction Rate cannot exceed the Maximum Interest Rate. (c) Notwithstanding anything herein to the contrary, if any Auction Rate Note or portion thereof has been selected for redemption during the next succeeding Interest Period, said Auction Rate Note or portion thereof, will not be included in the Auction preceding such redemption date, and said Auction Rate Note or portion thereof, will continue to bear interest until the redemption date at the rate established for the Interest Period prior to said Auction. SECTION 1.05. PAYMENTS. So long as the Auction Rate Notes are registered in the name of the Depository or the nominee thereof, payment of interest (other than at maturity) and premium, if any, on, and of principal at redemption of, the Auction Rate Notes shall be made to the Depository by wire transfer provided proper wire instructions are received. SECTION 1.06. AUCTION PROCEDURES. Auctions shall be conducted on each Auction Date (other than the Auction Date immediately preceding (a) each Auction Rate Note Interest Period commencing after the ownership of an Auction Rate Note is no longer maintained in book-entry form by the Depository; (b) each Auction Rate Note Interest Period commencing after the occurrence and during the continuance of a Payment Default; or (c) any Auction Rate Note Interest Period commencing less than two Business Days after the cure of a Payment Default). If, there is an Auction Agent on such Auction Date, Auctions shall be conducted in the following manner (such procedures to apply separately to each Class of Auction Rate Note): (a) SUBMISSIONS BY EXISTING OWNERS AND POTENTIAL OWNERS TO A BROKER-DEALER. (i) Prior to the Submission Deadline on each Auction Date: (A) each Existing Owner of Auction Rate Notes may submit to a Broker-Dealer any information as to: (1) the principal amount of Outstanding Auction Rate Notes, if any, held by such Existing Owner which such Existing Owner desires to continue to hold without regard to the Auction Rate for the next succeeding Auction Rate Note Interest Period; (2) the principal amount of Outstanding Auction Rate Notes, if any, which such Existing Owner offers to sell if the Auction Rate for the next succeeding Auction Rate Note Interest Period shall be less than the rate per annum specified by such Existing Owner; and/or (3) the principal amount of Outstanding Auction Rate Notes, if any, held by such Existing Owner which such Existing Owner offers to sell without regard to the Auction Rate for the next succeeding Auction Rate Note Interest Period; and B-9 (B) one or more Broker-Dealers may contact Potential Owners to determine the principal amount of Auction Rate Notes which each such Potential Owner offers to purchase if the Auction Rate for the next succeeding Auction Rate Note Interest Period shall not be less than the rate per annum specified by such Potential Owner. For the purposes hereof, the communication to a Broker-Dealer of information referred to in clause (A)(1), (A)(2), (A)(3) or (B) of this paragraph (i) is hereinafter referred to as an "Order" and collectively as "Orders" and each Existing Owner and each Potential Owner placing an Order is hereinafter referred to as a "Bidder" and collectively as "Bidders;" an Order containing the information referred to in (x) clause (A)(1) of this paragraph (i) is hereinafter referred to as a "Hold Order" and collectively as "Hold Orders," (y) clause (A)(2) or (B) of this paragraph (i) is hereinafter referred to as a "Bid" and collectively as "Bids" and (z) clause (A)(3) of this paragraph (i) is hereinafter referred to as a "Sell Order" and collectively as "Sell Orders." (ii) (A) Subject to the provisions of Section 1.06(b) of this Appendix B, a Bid by an Existing Owner shall constitute an irrevocable offer to sell: (1) the principal amount of Outstanding Auction Rate Notes specified in such Bid if the Auction Rate determined as provided in this Section 1.06 of this Appendix B shall be less than the rate specified in such Bid; or (2) such principal amount or a lesser principal amount of Outstanding Auction Rate Notes to be determined as set forth in Section 1.06(d)(i)(D) of this Appendix B, if the Auction Rate determined as provided in this Section 1.06 shall be equal to the rate specified in such Bid; or (3) such principal amount or a lesser principal amount of Outstanding Auction Rate Notes to be determined as set forth in Section 1.06(d)(ii)(C) of this Appendix B, if the rate specified shall be higher than the Maximum Auction Rate and Sufficient Clearing Bids have not been made. (B) Subject to the provisions of Section 1.06(b) of this Appendix B, a Sell Order by an Existing Owner shall constitute an irrevocable offer to sell: (1) the principal amount of Outstanding Auction Rate Notes specified in such Sell Order; or (2) such principal amount or a lesser principal amount of Outstanding Auction Rate Notes as set forth in Section 1.06(d)(ii)(C) of this Appendix B, if Sufficient Clearing Bids have not been made. B-10 (C) Subject to the provisions of Section 1.06(b) of this Appendix B, a Bid by a Potential Owner shall constitute an irrevocable offer to purchase: (1) the principal amount of Outstanding Auction Rate Notes specified in such Bid if the Auction Rate determined as provided in this Section shall be higher than the rate specified in such Bid; or (2) such principal amount or a lesser principal amount of Outstanding Auction Rate Notes as set forth in Section 1.06(d)(i)(E) of this Appendix B, if the Auction Rate determined as provided in this Section shall be equal to the rate specified in such Bid. (b) SUBMISSIONS BY A BROKER-DEALER TO AN AUCTION AGENT. (i) Each Broker-Dealer shall submit in writing to the Auction Agent prior to the Submission Deadline on each Auction Date all Orders obtained by such Broker-Dealer and shall specify with respect to each such Order: (A) the name of the Bidder placing such Order; (B) the aggregate principal amount of Auction Rate Notes that are the subject of such Order; (C) to the extent that such Bidder is an Existing Owner: (1) the principal amount of Auction Rate Note, if any, subject to any Hold Order placed by such Existing Owner; (2) the principal amount of Auction Rate Notes, if any, subject to any Bid placed by such Existing Owner and the rate specified in such Bid; and (3) the principal amount of Auction Rate Notes, if any, subject to any Sell Order placed by such Existing Owner; and (D) to the extent such Bidder is a Potential Owner, the rate and amount specified in such Potential Owner's Bid. (ii) If any rate specified in any Bid contains more than three figures to the right of the decimal point, the Auction Agent shall round such rate up to the next highest one thousandth (.001) of 1%. (iii) If an Order or Orders covering all Outstanding Auction Rate Notes held by any Existing Owner is not submitted to the Auction Agent prior to the Submission Deadline, the Auction Agent shall deem a Hold Order to have been B-11 submitted on behalf of such Existing Owner covering the principal amount of Outstanding Auction Rate Notes held by such Existing Owner and not subject to an Order submitted to the Auction Agent. (iv) None of the Issuer, the Trustee nor the Auction Agent shall be responsible for any failure of a Broker-Dealer to submit an Order to the Auction Agent on behalf of any Existing Owner or Potential Owner. (v) If any Existing Owner submits through a Broker-Dealer to the Auction Agent one or more Orders covering in the aggregate more than the principal amount of Outstanding Auction Rate Notes held by such Existing Owner, such Orders shall be considered valid as follows and in the following order of priority: (A) all Hold Orders shall be considered valid, but only up to and including in the aggregate the principal amount of Auction Rate Notes held by such Existing Owner, and if the aggregate principal amount of Auction Rate Notes subject to such Hold Orders exceeds the aggregate principal amount of Auction Rate Notes held by such Existing Owner, the aggregate principal amount of Auction Rate Notes subject to each such Hold Order shall be reduced pro rata to cover the aggregate principal amount of Outstanding Auction Rate Notes held by such Existing Owner; (B) (1) any Bid shall be considered valid up to and including the excess of the principal amount of Outstanding Auction Rate Notes held by such Existing Owner over the aggregate principal amount of Auction Rate Notes subject to any Hold Orders referred to in clause (A) of this paragraph (v); (2) subject to subclause (1) of this clause (B), if more than one Bid with the same rate is submitted on behalf of such Existing Owner and the aggregate principal amount of Outstanding Auction Rate Notes subject to such Bids is greater than such excess such Bids shall be considered valid up to and including the amount of such excess, and the stated amount of Auction Rate Notes subject to each Bid with the same rate shall be reduced pro rata to cover the stated amount of Auction Rate Notes equal to such excess; (3) subject to subclause (1) and (2) of this clause (B), if more than one Bid with different rates is submitted on behalf of such Existing Owner, such Bids shall be considered valid first in the ascending order of their respective rates until the highest rate is reached at which such excess exists and then at such rate up to and including the amount of such excess; and B-12 (4) in any such event, the aggregate principal amount of Outstanding Auction Rate Notes, if any, subject to Bids not valid under this clause (B) shall be treated as the subject of a Bid by a Potential Owner at the rate therein specified; and (C) all Sell Orders shall be considered valid up to and including the excess of the principal amount of Outstanding Auction Rate Notes held by such Existing Owner over the aggregate principal amount of Auction Rate Note subject to valid Hold Orders referred to in clause (A) of this paragraph (v) and valid Bids referred to in clause (B) of this paragraph (v). (vi) If more than one Bid for Auction Rate Notes is submitted on behalf of any Potential Owner, each Bid submitted shall be a separate Bid with the rate and principal amount therein specified. (vii) Any Bid or Sell Order submitted by an Existing Owner covering an aggregate principal amount of Auction Rate Note not equal to an Authorized Denomination therefor shall be rejected and shall be deemed a Hold Order. Any Bid submitted by a Potential Owner covering an aggregate principal amount of Auction Rate Notes not equal to an Authorized Denomination therefor shall be rejected. (viii) Any Bid submitted by an Existing Owner or a Potential Owner specifying a rate lower than the All Hold Rate shall be treated as a Bid specifying the All Hold Rate and any such Bid shall be considered as valid and shall be selected in the ascending order of the respective rates in the Submitted Bids. (ix) An Existing Owner that offers to purchase an additional Auction Rate Note is, for purposes of such offer, treated as a Potential Owner. (x) Any Bid specifying a rate higher than the Maximum Interest Rate will (A) be treated as a Sell Order if submitted by an Existing Owner and (B) not be accepted if submitted by a Potential Owner. (c) DETERMINATION OF SUFFICIENT CLEARING BIDS, AUCTION RATE AND WINNING BID RATE. (i) Not earlier than the Submission Deadline on each Auction Date, the Auction Agent shall assemble all valid Orders submitted or deemed submitted to it by the Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer being hereinafter referred to individually as a "Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a "Submitted Order," and collectively as "Submitted Hold Orders," "Submitted Bids" or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and shall determine: B-13 (A) the excess of the total principal amount of Outstanding Auction Rate Notes over the sum of the aggregate principal amount of Outstanding Auction Rate Notes subject to Submitted Hold Orders (such excess being hereinafter referred to as the "Available Auction Rate Note"); and (B) from such Submitted Orders whether: (1) the aggregate principal amount of Outstanding Auction Rate Notes subject to Submitted Bids by Potential Owners specifying one or more rates equal to or lower than the Maximum Interest Rate, exceeds or is equal to the sum of: (2) the aggregate principal amount of Outstanding Auction Rate Notes subject to Submitted Bids by Existing Owners specifying one or more rates higher than the Maximum Interest Rate; and (3) the aggregate principal amount of Outstanding Auction Rate Notes subject to Submitted Sell Orders; (in the event such excess or such equality exists, other than because the sum of the principal amounts of Auction Rate Notes in subclauses (1) and (3) above is zero because all of the Outstanding Auction Rate Notes are subject to Submitted Hold Orders, such Submitted Bids in subclause (1) above being hereinafter referred to collectively as "Sufficient Clearing Bids"); and (C) if Sufficient Clearing Bids have been made, the lowest rate specified in such Submitted Bids (which shall be the "Winning Bid Rate") such that if: (1) each such Submitted Bid from Existing Owners specifying such lowest rate and all other Submitted Bids from Existing Owners specifying lower rates were rejected, thus entitling such Existing Owners to continue to hold the principal amount of Auction Rate Notes subject to such Submitted Bids; and (2) each such Submitted Bid from Potential Owners specifying such lowest rate and all other Submitted Bids from Potential Owners specifying lower rates were accepted; the result would be that such Existing Owners described in subclause (1) above would continue to hold own an aggregate principal amount of Outstanding Auction Rate Notes which, when added to the aggregate principal amount of Outstanding Auction Rate Note to be purchased by such Potential Owners described in B-14 subclause (2) above, would equal not less than the Available Auction Rate Notes. (ii) Promptly after the Auction Agent has made the determinations pursuant to paragraph (i) of this subsection (c), the Auction Agent shall advise the Trustee of the Maximum Auction Rate, the Maximum Interest Rate, the All Hold Rate, One-Month LIBOR, the Applicable LIBOR-Based Rate, the Carry-over Amount and any applicable interest thereon, and the components thereof on the Auction Date and, based on such determinations, the Auction Rate for the next succeeding Auction Rate Note Interest Period (the "Auction Rate") as follows: (A) if Sufficient Clearing Bids have been made, that the Auction Rate for the next succeeding Auction Rate Note Interest Period shall be equal to the Winning Bid Rate so determined; (B) if Sufficient Clearing Bids have not been made (other than because all of the Outstanding Auction Rate Notes are subject to Submitted Hold Orders), that the Auction Rate for the next succeeding Auction Rate Note Interest Period shall be equal to the Maximum Auction Rate; or (C) if all Outstanding Auction Rate Notes are subject to Submitted Hold Orders, that the Auction Rate for the next succeeding Auction Rate Note Interest Period shall be equal to the All Hold Rate. If the Auction Rate determined as set forth above exceeds the Maximum Rate, the Applicable Auction Rate for such Auction Rate Note Interest Period shall be equal to the Maximum Rate, and the excess of the amount of interest on the Auction Rate Note that would have accrued at the rate equal to the Auction Rate over the amount of interest on such Auction Rate Note actually accrued at the Maximum Rate will accrue as the Carry-over Amount. The Carry-over Amount will bear interest at a rate equal to One-Month LIBOR from the Auction Rate Note Interest Payment Date for the Auction Rate Note Interest Period for which the Carry-over Amount was calculated until paid, or until extinguished. The Carry-over Amount (and interest accrued thereon) on the Auction Rate Note will be calculated by the Auction Agent and paid by the Trustee, if ever, on the next occurring Auction Rate Note Interest Payment Date, and each succeeding Auction Rate Note Interest Payment Date until paid, for each Auction Period subsequent to the Auction Period in which such Carry-over Amount accrued, if and to the extent that (1) during such subsequent Auction Period, no additional Carry-over Amount is accruing on the Auction Rate Note, and if paid, such Carry-over Amount is paid solely to the extent that during such Auction Period, the amount of interest that would be payable on this note at the Maximum Rate exceeds the amount of interest that is payable for such Auction Period on the Auction Rate Note at the interest rate in effect for such Auction Period and (2) moneys are available pursuant to the terms of the Indenture in an amount sufficient to pay all or such portion of Carry-over Amount as described in clause (1) above. Any such B-15 payment obligation for Carry-over Amount is extinguished when the related Auction Rate Note is paid at maturity or by earlier redemption. (d) ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL ORDERS AND ALLOCATION OF AUCTION RATE NOTES. Existing Owners shall continue to hold the principal amount of Auction Rate Notes that are subject to Submitted Hold Orders, and, based on the determinations made pursuant to Section 1.06(c)(i) of this Appendix B, Submitted Bids and Submitted Sell Orders shall be accepted or rejected and the Auction Agent shall take such other action as set forth below: (i) If Sufficient Clearing Bids have been made, all Submitted Sell Orders shall be accepted and, subject to the provisions of paragraph (iv) of this subsection (d), Submitted Bids shall be accepted or rejected as follows in the following order of priority and all other Submitted Bids shall be rejected: (A) Existing Owners' Submitted Bids specifying any rate that is higher than the Winning Bid Rate shall be accepted, thus requiring each such Existing Owner to sell the aggregate principal amount of Auction Rate Notes subject to such Submitted Bids; (B) Existing Owners' Submitted Bids specifying any rate that is lower than the Winning Bid Rate shall be rejected, thus entitling each such Existing Owner to continue to hold the aggregate principal amount of Auction Rate Notes subject to such Submitted Bids; (C) Potential Owners' Submitted Bids specifying any rate that is lower than the Winning Bid Rate shall be accepted, thus requiring such Potential Owner to purchase the aggregate principal amount of Auction Rate Notes subject to such Submitted Bids; (D) Each Existing Owners' Submitted Bid specifying a rate that is equal to the Winning Bid Rate shall be rejected, thus entitling such Existing Owner to continue to hold the aggregate principal amount of Auction Rate Notes subject to such Submitted Bid, unless the aggregate principal amount of Outstanding Auction Rate Notes subject to all such Submitted Bids shall be greater than the principal amount of Auction Rate Note (the "remaining principal amount") equal to the excess of the Available Auction Rate Notes over the aggregate principal amount of Auction Rate Notes subject to Submitted Bids described in clauses (B) and (C) of this paragraph (i), in which event such Submitted Bid of such Existing Owner shall be rejected in part, and such Existing Owner shall be entitled to continue to hold the principal amount of Auction Rate Notes subject to such Submitted Bid, but only in an amount equal to the aggregate principal amount of Auction Rate Notes obtained by multiplying the remaining principal amount by a fraction, the numerator of B-16 which shall be the principal amount of Outstanding Auction Rate Notes held by such Existing Owner subject to such Submitted Bid and the denominator of which shall be the sum of the principal amount of Outstanding Auction Rate Notes subject to such Submitted Bids made by all such Existing Owners that specified a rate equal to the Winning Bid Rate; and (E) Each Potential Owner's Submitted Bid specifying a rate that is equal to the Winning Bid Rate shall be accepted, but only in an amount equal to the principal amount of Auction Rate Notes obtained by multiplying the excess of the aggregate principal amount of Available Auction Rate Note over the aggregate principal amount of Auction Rate Note subject to Submitted Bids described in clauses (B), (C) and (D) of this paragraph (i) by a fraction the numerator of which shall be the aggregate principal amount of Outstanding Auction Rate Notes subject to such Submitted Bid and the denominator of which shall be the sum of the principal amounts of Outstanding Auction Rate Notes subject to Submitted Bids made by all such Potential Owners that specified a rate equal to the Winning Bid Rate. (ii) If Sufficient Clearing Bids have not been made (other than because all of the Outstanding Auction Rate Note are subject to Submitted Hold Orders), subject to the provisions of paragraph (iv) of this subsection (d), Submitted Orders shall be accepted or rejected as follows in the following order of priority and all other Submitted Bids shall be rejected: (A) Existing Owners' Submitted Bids specifying any rate that is equal to or lower than the Maximum Auction Rate shall be rejected, thus entitling such Existing Owners to continue to hold the aggregate principal amount of Auction Rate Notes subject to such Submitted Bids; (B) Potential Owners' Submitted Bids specifying any rate that is equal to or lower than the Maximum Auction Rate shall be accepted, thus requiring each Potential Owner to purchase the aggregate principal amount of Auction Rate Notes subject to such Submitted Bids; and (C) Each Existing Owner's Submitted Bid specifying any rate that is higher than the Maximum Auction Rate and the Submitted Sell Order of each Existing Owner shall be accepted, thus entitling each Existing Owner that submitted any such Submitted Bid or Submitted Sell Order to sell the Auction Rate Note subject to such Submitted Bid or Submitted Sell Order, but in both cases only in an amount equal to the aggregate principal amount of Auction Rate Notes obtained by multiplying the aggregate principal amount of Auction Rate Note subject to Submitted Bids described in clause (B) of this paragraph (ii) by a fraction the numerator of which shall be the aggregate principal amount of Outstanding Auction Rate Notes held by such Existing Owner subject to B-17 such Submitted Bid or Submitted Sell Order and the denominator of which shall be the aggregate principal amount of Outstanding Auction Rate Notes subject to all such Submitted Bids and Submitted Sell Orders. (iii) If all Outstanding Auction Rate Notes are subject to Submitted Hold Orders, all Submitted Bids shall be rejected. (iv) If, as a result of the procedures described in paragraph (i) or (ii) of this subsection (d), any Existing Owner would be entitled or required to sell, or any Potential Owner would be entitled or required to purchase, a principal amount of Auction Rate Notes that is not equal to an Authorized Denomination therefor, the Auction Agent shall, in such manner as it shall, in its sole discretion, determine, round up or down the principal amount of Auction Rate Note to be purchased or sold by any Existing Owner or Potential Owner so that the principal amount of Auction Rate Notes purchased or sold by each Existing Owner or Potential Owner shall be equal to an Authorized Denomination, even if such allocation results in one or more of such Potential Owners not purchasing any Auction Rate Note. (e) Based on the results of each Auction, the Auction Agent shall determine the aggregate principal amount of Auction Rate Notes to be purchased and the aggregate principal amount of Auction Rate Notes to be sold by Potential Owners and Existing Owners on whose behalf each Broker-Dealer submitted Bids or Sell Orders and, with respect to each Broker-Dealer, to the extent that such aggregate principal amount of Auction Rate Notes to be sold differs from such aggregate principal amount of Auction Rate Note to be purchased, determine to which other Broker-Dealer or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive, as the case may be, Auction Rate Notes. SECTION 1.07. CERTAIN ORDERS NOT PERMITTED. Neither the Issuer nor any Affiliate of the Issuer may submit an Order in any Auction. The Auction Agent shall have no duty or liability in monitoring or enforcing compliance with this Section. SECTION 1.08. PAYMENT DEFAULTS; AUCTION AGENT AND BROKER-DEALER FEES AND EXPENSES. (a) By 12:30 p.m., New York time, on the Business Day immediately succeeding each Auction Rate Note Interest Payment Date, the Trustee will determine if a Payment Default has occurred. If a Payment Default has occurred, the Trustee will notify the Auction Agent and the Broker-Dealers by 1:00 p.m., New York time, of such Payment Default. If a Payment Default has been cured, the Trustee shall so notify the Auction Agent and the Broker-Dealers by 5:00 p.m., New York time, on the day such Payment Default is cured. So long as the ownership of the Auction B-18 Rate Notes is maintained in book-entry form by the Depository, upon the occurrence of a Payment Default the Trustee will immediately send a notice thereof to the Auction Agent and Market Agent by telecopy or similar means. So long as the ownership of the Auction Rate Notes is maintained in book-entry form by the Depository, the Trustee will immediately send notice to the Auction Agent by telecopy or similar means if a Payment Default is cured. (b) The Issuer will pay to the Auction Agent, on behalf of the Owners of the Auction Rate Note in same day funds out of amounts in the Collection Account, (i) an amount equal to the Auction Agent Fee as calculated in the Auction Agency Agreement and (ii) an amount equal to the Broker-Dealer Fee as calculated in the Broker-Dealer Agreements. SECTION 1.09. CALCULATION OF RATES. The Auction Agent will calculate the Carry-over Amount and any interest thereon, the Maximum Auction Rate, the Maximum Rate, the Maximum Interest Rate, the All Hold Rate, One-Month LIBOR and the Applicable LIBOR-Based Rate on each Auction Date. The determination by the Auction Agent of the Maximum Auction Rate, the Maximum Rate, the Maximum Interest Rate, the All Hold Rate, One-Month LIBOR and the Applicable LIBOR-Based Rate will (in the absence of manifest error) be final and binding upon the Owners and all other parties. If the ownership of an Auction Rate Note is no longer maintained in book-entry form by the Depository, the Auction Agent will calculate the Maximum Rate on the Business Day immediately preceding the first day of each Auction Rate Note Interest Period commencing after the delivery of certificates representing the Auction Rate Note pursuant to Subsection 1.02(c) of this Appendix B. If a Payment Default shall have occurred, the Auction Agent will calculate the Default Rate on the first day of (a) each Auction Rate Note Interest Period commencing after the occurrence and during the continuance of such Payment Default and (b) any Auction Rate Note Interest Period commencing less than two Business Days after the cure of any Payment Default. SECTION 1.10. COMPUTATION OF INTEREST. The amount of interest distributable to Owners for any Auction Rate Note Interest Period or part thereof for each $50,000 principal amount of Auction Rate Notes shall be calculated by multiplying 50,000 by the Applicable Auction Rate for such Auction Rate Note Interest Period or part thereof, multiplying such product by the actual number of days in the Auction Rate Note Interest Period or part thereof concerned divided by 365 or 366, as applicable, and rounding the resultant figure to the nearest one cent. Interest on the Auction Rate Notes shall be computed by the Trustee on the basis of a 365-day year for the number of days actually elapsed; except that for any such calculation with respect to an Auction Rate Note Interest Payment Date occurring after January 1 of any year through December 31 of such year (being the leap year), such interest shall be computed on the basis of a 366-day year period. The Trustee shall make the calculation required in this Section not later than the close of business on each Auction Date. SECTION 1.11. NOTIFICATION OF RATES, AMOUNTS AND PAYMENT DATES. (a) The Trustee shall determine the aggregate amount of interest distributable on the next succeeding Auction Rate Note Interest Payment Date to the Owners of the Auction Rate Note. So long as the ownership of the Auction Rate Note is maintained in book-entry form by the Depository, the Trustee shall advise the Depository of each Record Date for the Auction Rate Note at least two Business Days prior thereto. B-19 (b) Promptly after the date of original issuance of the Auction Rate Notes and each Auction Rate Note Interest Payment Date, but in any event at least 10 days prior to each Auction Rate Note Interest Payment Date, the Trustee will: (i) so long as no Payment Default has occurred and is continuing and the ownership of the Auction Rate Note is maintained in book-entry form by the Depository, acknowledge the Auction Agent's written notification to the Trustee of (A) the date of such next Auction Rate Note Interest Payment Date and (B) the amount payable to the Auction Agent on each Auction Rate Note Interest Payment Date pursuant to Section 1.08 of this Appendix B and notify the Auction Agent of any discrepancy therein; and (ii) advise the Depository, based on information received from the Auction Agent, so long as the ownership of the Auction Rate Note is maintained in book-entry form by the Depository, of the Applicable Auction Rate and the Interest Amount in respect of the next succeeding Auction Rate Note Interest Period and the amount of Carry-over Amount and interest thereon, if any. In the event that any day that is scheduled to be an Auction Rate Note Interest Payment Date is changed after the Trustee shall have given the notice referred to in clause (i) above, not later than 9:15 a.m., New York time, on the Business Day next preceding the earlier of the new Auction Rate Note Interest Payment Date or the old Auction Rate Note Interest Payment Date, the Trustee will, by such means as the Trustee deems practicable, give notice of such change to the Auction Agent, so long as no Payment Default has occurred and is continuing and the ownership of the Auction Rate Note is maintained in book-entry form by the Depository. SECTION 1.12. MARKET AGENT. The Market Agents shall be designated in the Market Agent Agreements and shall serve as such under the terms and provisions hereof and of the Market Agent Agreement. Each Market Agent, including any successor appointed pursuant hereto, shall be a member of the National Association of Securities Dealers, Inc. having capitalization of at least $25,000,000, and be authorized by law to perform all the duties imposed upon it by this Indenture and the respective Market Agent Agreement. The Market Agents may be removed at any time by the Trustee, acting at the direction of (a) the Administrator, or (b) the holders of 66-2/3% of the aggregate principal amount of the Auction Rate Notes, provided that such removal shall not take effect until the appointment of a successor Market Agent. Either Market Agent may resign upon 30 days' written notice delivered to the Issuer and the Trustee. The Administrator shall use its best efforts to appoint a successor Market Agent that is a qualified institution, effective as of the effectiveness of any such resignation or removal. The Trustee shall not be liable in any way for any action taken, suffered, or omitted, or for any error of judgment made by the Market Agent, whether in the performance of its duties under the Market Agent Agreement or otherwise. SECTION 1.13. AUCTION AGENT. (a) The Bank of New York shall serve as the initial Auction Agent for the Auction Rate Notes. The Trustee is hereby directed to enter into an agreement with the B-20 Auction Agent which shall provide as follows: The Auction Agent shall be (i) a bank or trust company duly organized under the laws of the United States of America or any state or territory thereof having its principal place of business in the Borough of Manhattan, in The City of New York, and having a combined capital stock, surplus and undivided profits of at least $40,000,000, and (ii) a member of the National Association of Securities Dealers, Inc., having a capitalization of at least $40,000,000 and, in either case, authorized by law to perform all the duties imposed upon it hereunder and under the Auction Agency Agreement. The Auction Agent may resign and be discharged of the duties and obligations created by the Indenture by giving at least 90 days' written notice to the Issuer, the Trustee and the Market Agent (30 days' written notice if the Auction Agent has not been paid its fee for more than 30 days). The Auction Agent may be removed at any time by the Trustee if the Auction Agent is an entity other than the Trustee, acting at the direction of (i) the Administrator or (ii) the holders of 66-2/3% of the aggregate principal amount of the Auction Rate Notes, by an instrument signed by the Trustee and filed with the Auction Agent, the Issuer and the Market Agent upon at least 90 days' notice; provided that, if required by the Market Agent, an agreement in substantially the form of the Auction Agency Agreement shall be entered into with a successor Auction Agent. If the Auction Agent and the Trustee are the same entity, the Auction Agent may be removed as described above, with the Issuer acting in lieu of the Trustee. (b) In the event that the Auction Agent resigns or is removed or dissolved, or if the property or affairs of the Auction Agent is taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, the Administrator shall use its best efforts to appoint a successor as Auction Agent, and the Trustee will thereupon enter into an Auction Agency Agreement with such successor. (c) The Auction Agent will act as agent for the Trustee and the Issuer in connection with Auctions. In the absence of bad faith or negligence on its part, the Auction Agent shall not be liable for any action taken, suffered or omitted or for any error of judgment made by it in the performance of its duties under the Auction Agency Agreement and will not be liable for any error of judgment made in good faith unless the Auction Agent shall have been negligent in ascertaining (or failing to ascertain) the pertinent facts necessary to make such judgment. (d) Notwithstanding that the Auction Agent is the agent of the Trustee hereunder and under the Auction Agency Agreement, the Trustee will not be liable in any way for any action taken, suffered or omitted, or for any error of judgment made by the Auction Agent, whether in the performance of its duties under the Auction Agency Agreement or otherwise. SECTION 1.14. BROKER-DEALERS. (a) The Auction Agent shall enter into a Broker-Dealer Agreement with each of (i) UBS Financial Services Inc. with respect to the Class B-1 Notes, and (ii) Deutsche Bank Securities Inc. with respect to the B-2 Notes. The Market Agent may B-21 from time to time approve one or more additional persons to serve as a Broker-Dealer under Broker-Dealer Agreements. Any Broker-Dealer may be removed at any time at the request of the Administrator of the Issuer, but there shall, at all times, be at least one Broker-Dealer appointed and acting as such. SECTION 1.15. CHANGES IN AUCTION PERIODS OR AUCTION DATE OR AUCTION RATE NOTE INTEREST PAYMENT DATES. (a) Changes in Auction Period or Periods. (i) The Market Agent: (A) in order to conform with then-current market practice with respect to similar securities, shall; or (B) in order to accommodate economic and financial factors that may affect or be relevant to the length of the Auction Period and the interest rate borne by the Auction Rate Notes and with the written consent of the Administrator of the Issuer, may change, from time to time, the length of one or more Auction Periods. In connection with any such change, or otherwise, but for the same stated purpose, the Market Agent: (1) in order to conform with then-current market practice with respect to similar securities, shall; and (2) with the written consent of the Administrator, may change Auction Rate Note Interest Payment Dates; any such change will be considered a "change in the length of one or more Auction Periods" for the purposes of the Indenture. The Administrator shall not consent to such change in the length of the Auction Period, if such consent is required above, unless he or she has received from the Market Agent not less than three days nor more than 25 days prior to the effective date of such change a written request for consent together with a certificate demonstrating the need for change in reliance on such factors. The Market Agent will initiate the change in the length of one or more Auction Periods by giving written notice to the Trustee, the Auction Agent, the Issuer and the Depository in substantially the form of, or containing substantially the information contained in, Appendix G to the Indenture at least 10 days prior to the Auction Date for such Auction Period. (ii) Any such changed Auction Period will not be less than 7 days; furthermore, any such change in the Auction Period shall not be more than 28 days without satisfying the Rating Agency Condition. (iii) The change in the length of one or more Auction Periods shall not be allowed unless Sufficient Clearing Bids existed at both the Auction before the B-22 date on which the notice of the proposed change was given as provided in this subsection (a) and the Auction immediately preceding the proposed change. (iv) The change in length of one or more Auction Periods shall take effect only if (A) the Trustee and the Auction Agent receive, by 11:00 A.M. New York time on the Business Day before the Auction Date for the first such Auction Period, a certificate from the Market Agent in substantially the form attached as, or containing substantially the same information contained in, Appendix H to the Indenture, authorizing the change in the length of one or more Auction Periods specified in such certificate and (B) Sufficient Clearing Bids exist at the Auction on the Auction Date for such first Auction Period. If the condition referred to in clause (A) above is not met, the Applicable Auction Rate for the next Auction Period shall be determined pursuant to the Auction Procedures and the Auction Period shall be the Auction Period determined without reference to the proposed change. If the condition referred to in clause (A) is met but the condition referred to in clause (B) above is not met, the Applicable Auction Rate for the next Auction Period shall be the Maximum Rate and the Auction Period shall be the Auction Period determined without reference to the proposed change. (b) Changes in the Auction Date. The Market Agent: (i) in order to conform with then-current market practice with respect to similar securities, shall; or (ii) in order to accommodate economic and financial factors that may affect or be relevant to the day of the week constituting an Auction Date and the interest rate borne on an Auction Rate Note and with the written consent of the Administrator, may specify an earlier Auction Date (but in no event more than five Business Days earlier) than the Auction Date that would otherwise be determined in accordance with the definition of "Auction Date" in Section 1.01 of this Appendix B with respect to one or more specified Auction Periods. The Administrator shall not consent to such change in the Auction Date, if such consent is required in subparagraph (b)(ii) above, unless he or she shall have received from the Market Agent not less than three days nor more than 25 days prior to the effective date of such change a written request for consent together with a certificate demonstrating the need for change in reliance on such factors. The Market Agent shall provide notice of any determination to specify an earlier Auction Date for one or more Auction Periods by means of a written notice delivered at least 10 days prior to the proposed changed Auction Date to the Trustee, the Auction Agent, the Issuer and the Depository. Such notice shall be substantially in the form of, or contain substantially the information contained in, Appendix I to the Indenture. (c) Any change described in this Section shall be made with respect to one or more Classes of Auction Rate Notes (but in each case separate notices shall be prepared and delivered as provided above and, with respect to changes in the length of Auction B-23 Periods, the conditions specified in subparagraph (a)(iv) above shall be applied to each Class separately). (d) In connection with any change described in this Section, the Auction Agent shall provide notice to the parties as is specified in Section 2.5 of the Auction Agency Agreement. (e) No change shall be made to the Auction Period or Auction Date unless the Issuer has satisfied the Rating Agency Condition. SECTION 1.16. CREDIT RATINGS. The Issuer shall take all reasonable action necessary to enable at least one nationally recognized statistical rating organization (as that term is used in the rules and regulations of the SEC under the Securities Exchange Act) to provide credit ratings for the Auction Rate Notes. SECTION 1.17. NOTICES. The Market Agent shall provide the Trustee and, so long as no default under the Indenture has occurred and is continuing and the ownership of the Auction Rate Notes is maintained in book-entry form by the Depository, the Auction Agent with notice of any change in the Maximum Interest Rate. SECTION 1.18. PURCHASES OF AUCTION RATE NOTES. The Issuer shall not purchase or otherwise acquire any Auction Rate Notes unless the Issuer redeems or otherwise cancels such Auction Rate Note on the day of any purchase. SECTION 1.19. NOTICE OF PAYMENT DEFAULT. (a) If the Issuer determines that a Payment Default has occurred the Issuer shall promptly notify the Trustee thereof. (b) So long as the ownership of the Auction Rate Notes is maintained in book-entry form by the Depository, upon the occurrence of a Payment Default the Trustee shall immediately send a notice thereof to the Auction Agent and Market Agent by telecopy or similar means. (c) So long as the ownership of the Auction Rate Notes is maintained in book-entry form by the Depository, the Trustee shall immediately send notice to the Auction Agent by telecopy or similar means if a Payment Default is cured. B-24 C-1 APPENDIX C NOTICE OF PAYMENT DEFAULT The National Collegiate Student Loan Trust 2004-1 Student Loan Asset Backed Notes Serves 2004-1, Class ___ NOTICE IS HEREBY GIVEN that a Payment Default currently exists with respect to the above-captioned issue. The next Auction for the Series 2004-1, Class ___ Notes will be held as scheduled on _______________. The rate of interest on the Series 2004-1, Class ___ Notes for the next succeeding Auction Period shall be determined through application of the Auction Procedures. Dated: __________________ By ______________________________ Authorized Signatory C-1 APPENDIX D NOTICE OF CURE OF PAYMENT DEFAULT The National Collegiate Student Loan Trust 2004-1 Student Loan Asset Backed Notes Series 2004-1, Class ___ NOTICE IS HEREBY GIVEN that the Payment Default with respect to the above-captioned issue has been cured. The next Interest Payment Date is _______________ and the next Auction Date is scheduled to be _______________. Dated: __________________ By __________________________________ Authorized Signatory D-1 APPENDIX E NOTICE OF EVENT OF DEFAULT The National Collegiate Student Loan Trust I Student Loan Asset Backed Notes Series 2004-1, Class ___ NOTICE IS HEREBY GIVEN that an Event of Default with respect to the above-captioned issue has occurred. Dated: __________________ By __________________________________ Authorized Signatory E-1 APPENDIX F NOTICE OF WAIVER/CURE OF EVENT OF DEFAULT The National Collegiate Student Loan Trust 2004-1 Student Loan Asset Backed Notes Series 2004-1, Class ___ NOTICE IS HEREBY GIVEN that an Event of Default with respect to the above-captioned issue has been [waived] [cured]. Determination of the interest rate on the Series 2004-1, Class ___ Notes pursuant to the Auction Procedures will resume. The next Interest Payment Date is _______________ and the next Auction Date is scheduled to be __________________. Dated: __________________ By ___________________________________ Authorized Signatory F-1 APPENDIX G NOTICE OF PROPOSED CHANGE IN AUCTION PERIOD The National Collegiate Student Loan Trust 2004-1 Student Loan Asset Backed Notes Series 2004-1, Class ___ NOTICE IS HEREBY GIVEN that The National Collegiate Student Loan Trust 2004-1 (the "Issuer") proposes to change the Auction Period in accordance with the Indenture dated as of June 1, 2004, as supplemented (the "Indenture") as follows: [insert description of change]. Assuming the conditions set forth in the Indenture are met, such change will be effective on _____________. If any such condition is not met, the Auction Rate for the next succeeding Auction Period shall be established in accordance with the procedures set forth in the Indenture. All terms not otherwise defined in this notice shall have the meanings set forth in the Indenture. Dated: __________________ By ___________________________________ Authorized Signatory G-1 APPENDIX H NOTICE REGARDING ESTABLISHMENT OF AUCTION PERIOD The National Collegiate Student Loan Trust 2004-1 Student Loan Asset Backed Notes Series 2004-1, Class ___ NOTICE IS HEREBY GIVEN that The National Collegiate Student Loan Trust 2004-1 (the "Issuer") hereby authorizes the establishment of a new Auction Period consisting of a period of _ days. If the condition(s) for the establishment of the new Auction Period are met, such Auction Period will commence on ___________________ and end on _________________. The Interest Payment Date for such Auction Period shall be ___________________. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Indenture of the Issuer dated as of June 1, 2004, as supplemented. Dated: __________________ By ___________________________________ Authorized Signatory H-1 APPENDIX I NOTICE OF CHANGE IN AUCTION DATE The National Collegiate Student Loan Trust 2004-1 Student Loan Asset Backed Notes Series 2004-1, Class ___ NOTICE IS HEREBY GIVEN that the Auction Date for auctions conducted with respect to the above-captioned issue has been changed to _______________. The next succeeding Auction Date will be ________________. In order to accommodate such change, the next succeeding Auction Period will consist of _____days and shall begin on ______________ and end on ________________. Interest will be paid on _______________. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Indenture of the Issuer dated as of June 1, 2004, as supplemented. Dated: __________________ [BROKER-DEALER] By ___________________________________ Authorized Signatory I-1 SCHEDULE A ---------- SCHEDULE OF INITIAL FINANCED STUDENT LOANS [On file with Indenture Trustee] Schedule A-1 SCHEDULE B ---------- SCHEDULE OF SUBSEQUENT STUDENT LOANS [On file with Indenture Trustee] Schedule B-1 SCHEDULE C ---------- LIST OF TERI GUARANTEE AGREEMENTS Each of the following Guaranty Agreements, as amended or supplemented, was entered into by and between The Education Resources Institute, Inc. and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 13, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. Schedule C-1 o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated July 26, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. Schedule C-2 SCHEDULE D ---------- LIST OF STUDENT LOAN PURCHASE AGREEMENTS Each of the Note Purchase Agreements, as amended or supplemented, was entered into by and between The First Marblehead Corporation and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 1, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. Schedule D-1 o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated November 13, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. Schedule D-2 EXHIBIT A-1 ----------- FORM OF CLASS A-1 NOTE ---------------------- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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 PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. A-1-3 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED LIBOR RATE NOTES CLASS A-1
No. A-1-___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP Variable June 25, 2014 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: **$189,000,000**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, the Principal Amount shown above in lawful money of the United States of America on the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Quarterly Distribution Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Quarterly Distribution Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is a Quarterly Distribution Date, in which case this note shall bear interest from such Quarterly Distribution Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class A-1 Notes (defined herein) shall be in default, Class A-1 Notes issued in lieu of such Class A-1 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class A-1 Notes surrendered until payment of the principal hereof has been made or duly provided for. Principal of this note is payable upon the presentation and surrender hereof at the principal corporate trust office of U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the Indenture Trustee in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). The Issuer will pay interest on this Class A-1 Note at the rate per annum equal to the Note Interest Rate (as defined in the Indenture) for this Note, on each Quarterly 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). Interest on this Note will accrue for each Quarterly Distribution Date from the most recent Distribution Date on which interest has been paid to but excluding such Quarterly Distribution Date or, if no interest has yet been paid, from A-1-4 the Closing Date). Such principal of and interest on this Note shall be paid in the manner specified herein. 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. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed LIBOR Rate Notes, Class A-1 (the "Class A-1 Notes"), issued pursuant to the Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class A-1 Notes. The Class A-1 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class A-1 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class A-1 Notes. The Class A-1 Notes are issuable as registered notes in the denomination of $50,000 and $1,000 integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class A-1 Notes may be exchanged for a like Class and aggregate principal amount of Class A-1 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the A-1-5 Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue or not, for the purpose of receiving payment of or on account of the principal or interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ A-1-6 CERTIFICATE OF AUTHENTICATION This note is one of the Class A-1 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-1-7 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-1-8 EXHIBIT A-2 ----------- FORM OF CLASS A-2 NOTE ---------------------- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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 PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. A-2-1 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED LIBOR RATE NOTES CLASS A-2
No. A-2-___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP Variable June 25, 2027 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: **$342,100,000**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, the Principal Amount shown above in lawful money of the United States of America on the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Quarterly Distribution Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Quarterly Distribution Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is a Quarterly Distribution Date, in which case this note shall bear interest from such Quarterly Distribution Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class A-2 Notes (defined herein) shall be in default, Class A-2 Notes issued in lieu of such Class A-2 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class A-2 Notes surrendered until payment of the principal hereof has been made or duly provided for. Principal of this note is payable upon the presentation and surrender hereof at the principal corporate trust office of U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the Indenture Trustee in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). The Issuer will pay interest on this Class A-2 Note at the rate per annum equal to the Note Interest Rate (as defined in the Indenture) for this Note, on each Quarterly 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). Interest on this Note will accrue for each Quarterly Distribution Date from the most recent Distribution Date on which interest has been paid to but excluding such Quarterly Distribution Date or, if no interest has yet been paid, from the Closing Date). Such principal of and interest on this Note shall be paid in the manner specified herein. A-2-2 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. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed LIBOR Rate Notes, Class A-2 (the "Class A-2 Notes"), issued pursuant to the Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class A-2 Notes. The Class A-2 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class A-2 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class A-2 Notes. The Class A-2 Notes are issuable as registered notes in the denomination of $50,000 and $1,000 integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class A-2 Notes may be exchanged for a like Class and aggregate principal amount of Class A-2 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. A-2-3 IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue or not, for the purpose of receiving payment of or on account of the principal or interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: ____________________________ Name: Title: Attest ______________________________ A-2-4 CERTIFICATE OF AUTHENTICATION This note is one of the Class A-2 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By ____________________________ Authorized Signatory A-2-5 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ EXHIBIT A-3 ----------- FORM OF CLASS A-3 NOTE ---------------------- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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 PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. A-3-1 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED LIBOR RATE NOTES CLASS A-3
No. A-3-___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP Variable June 25, 2029 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: **$105,000,000**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, the Principal Amount shown above in lawful money of the United States of America on the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Quarterly Distribution Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Quarterly Distribution Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is a Quarterly Distribution Date, in which case this note shall bear interest from such Quarterly Distribution Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class A-3 Notes (defined herein) shall be in default, Class A-3 Notes issued in lieu of such Class A-3 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class A-3 Notes surrendered until payment of the principal hereof has been made or duly provided for. Principal of this note is payable upon the presentation and surrender hereof at the principal corporate trust office of U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the Indenture Trustee in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). The Issuer will pay interest on this Class A-3 Note at the rate per annum equal to the Note Interest Rate (as defined in the Indenture) for this Note, on each Quarterly 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). Interest on this Note will accrue for each Quarterly Distribution Date from the most recent Distribution Date on which interest has been paid to but excluding such Quarterly Distribution Date or, if no interest has yet been paid, from the Closing Date). Such principal of and interest on this Note shall be paid in the manner specified herein. A-3-2 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. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed LIBOR Rate Notes, Class A-3 (the "Class A-3 Notes"), issued pursuant to the Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class A-3 Notes. The Class A-3 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class A-3 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class A-3 Notes. The Class A-3 Notes are issuable as registered notes in the denomination of $50,000 and $1,000 integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class A-3 Notes may be exchanged for a like Class and aggregate principal amount of Class A-3 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. A-3-3 IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue or not, for the purpose of receiving payment of or on account of the principal or interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ A-3-4 CERTIFICATE OF AUTHENTICATION This note is one of the Class A-3 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-3-5 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-3-6 EXHIBIT A-4 ----------- FORM OF CLASS A-4 NOTE ---------------------- THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (4) PURSUANT TO A VALID REGISTRATION STATEMENT. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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. [IF REGULATION S GLOBAL NOTE] [THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE ORIGINAL ISSUE DATE OF THE NOTES, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.] A-4-1 THE PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. NO TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF ONE OR MORE CLASS A-4 NOTES (A "TRANSFER") SHALL BE MADE UNLESS SIMULTANEOUSLY WITH THE TRANSFER (1) A PROPORTIONATE AMOUNT OF CLASS A-IO-1 NOTES AND CLASS A-IO-2 NOTES ARE TRANSFERRED SO THAT THE RATIO OF THE NOTIONAL AMOUNT OF THE CLASS A-IO-1 NOTES SO TRANSFERRED TO THE NOTIONAL AMOUNT OF ALL CLASS A-IO-1 NOTES, THE RATIO OF THE NOTIONAL AMOUNT OF THE CLASS A-IO-2 NOTES SO TRANSFERRED TO THE NOTIONAL AMOUNT OF ALL CLASS A-IO-2 NOTES, AND THE RATIO OF THE PRINCIPAL AMOUNT OF THE CLASS A-4 NOTES SO TRANSFERRED TO THE PRINCIPAL AMOUNT OF ALL CLASS A-4 NOTES ARE EQUAL AND (2) THE TRANSFERS OF THE CLASS A-IO-1 NOTES, THE CLASS A-IO-2 NOTES AND THE CLASS A-4 NOTES REFERRED TO HEREIN ARE MADE TO THE SAME PERSON. A-4-2 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED LIBOR RATE NOTES CLASS A-4
No. A-4-___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP Variable June 25, 2031 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: **$75,000,000**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, the Principal Amount shown above in lawful money of the United States of America on the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Quarterly Distribution Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Quarterly Distribution Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is a Quarterly Distribution Date, in which case this note shall bear interest from such Quarterly Distribution Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class A-4 Notes (defined herein) shall be in default, Class A-4 Notes issued in lieu of such Class A-4 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class A-4 Notes surrendered until payment of the principal hereof has been made or duly provided for. Principal of this note is payable upon the presentation and surrender hereof at the principal corporate trust office of U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the Indenture Trustee in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). The Issuer will pay interest on this Class A-4 Note at the rate per annum equal to the Note Interest Rate (as defined in the Indenture) for this Note, on each Quarterly 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). Interest on this Note will accrue for each Quarterly Distribution Date from the most recent Distribution Date on which interest has been paid to but excluding such Quarterly Distribution Date or, if no interest has yet been paid, from A-4-3 the Closing Date). Such principal of and interest on this Note shall be paid in the manner specified herein. 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. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed LIBOR Rate Notes, Class A-4 (the "Class A-4 Notes"), issued pursuant to the Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class A-4 Notes. The Class A-4 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class A-4 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class A-4 Notes. The Class A-4 Notes are issuable as registered notes in the denomination of $50,000 and $1,000 integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class A-4 Notes may be exchanged for a like Class and aggregate principal amount of Class A-4 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the A-4-4 Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue or not, for the purpose of receiving payment of or on account of the principal or interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ A-4-5 CERTIFICATE OF AUTHENTICATION This note is one of the Class A-4 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-4-6 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1 The following exchanges of a part of this Global Note for an interest in another Global Note or for an Individual Note, or exchanges of a part of another Global Note or Individual Note for an interest in this Global Note, have been made:
Principal Amount of this Global Note Amount of decrease in Amount of increase in following such Signature of Principal Amount of Principal Amount of decrease authorized officer of Date of Exchange this Global Note this Global Note (or increase) Note Registrar ---------------- ---------------- ---------------- ------------- --------------
- ---------------- 1 This should be included only if the Note is issued in global form. A-4-7 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-4-8 EXHIBIT A-5 ----------- FORM OF CLASS A-IO-1 NOTE ------------------------- THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (4) PURSUANT TO A VALID REGISTRATION STATEMENT. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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. [IF REGULATION S GLOBAL NOTE] [THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE ORIGINAL ISSUE DATE OF THE NOTES, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.] THE PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT A-5-1 PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. NO TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF ONE OR MORE CLASS A-IO-1 NOTES (A "TRANSFER") SHALL BE MADE UNLESS SIMULTANEOUSLY WITH THE TRANSFER (1) A PROPORTIONATE AMOUNT OF CLASS A-IO-2 NOTES AND CLASS A-4 NOTES ARE TRANSFERRED SO THAT THE RATIO OF THE NOTIONAL AMOUNT OF THE CLASS A-IO-1 NOTES SO TRANSFERRED TO THE NOTIONAL AMOUNT OF ALL CLASS A-IO-1 NOTES, THE RATIO OF THE NOTIONAL AMOUNT OF THE CLASS A-IO-2 SO TRANSFERRED TO THE NOTIONAL AMOUNT OF ALL CLASS A-IO-2 NOTES, AND THE RATIO OF THE PRINCIPAL AMOUNT OF THE CLASS A-4 NOTES SO TRANSFERRED TO THE PRINCIPAL AMOUNT OF ALL CLASS A-4 NOTES ARE EQUAL AND (2) THE TRANSFERS OF THE CLASS A-IO-1 NOTES, THE CLASS A-IO-2 AND THE CLASS A-4 NOTES REFERRED TO HEREIN ARE MADE TO THE SAME PERSON. THIS NOTE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY DISTRIBUTIONS IN RESPECT OF PRINCIPAL. A-5-2 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED LIBOR RATE NOTES CLASS A-IO-1
No. A-IO-1___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP 7.87% June 25, 2010 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, certain monthly distributions of interest for each Quarterly Distribution Date through and including the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Quarterly Distribution Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Quarterly Distribution Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is a Quarterly Distribution Date, in which case this note shall bear interest from such Quarterly Distribution Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class A-IO-1 Notes (defined herein) shall be in default, Class A-IO-1 Notes issued in lieu of such Class A-IO-1 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class A-IO-1 Notes surrendered until the Date of Maturity shown above. Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the U.S. Bank National Association, as indenture trustee (the "Indenture Trustee") in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). The Issuer will pay interest on this Class A-IO-1 Note at the rate per annum equal to the Note Interest Rate (as defined in the Indenture) on each Quarterly Distribution Date until the Date of Maturity. Interest on this Class A-IO-1 Note will accrue for each Quarterly Distribution Date on the Notional Amount outstanding of the Class A-IO-1 Note until such Notional Amount is reduced to zero, from the most recent Distribution Date on which interest has been paid to but excluding such Quarterly Distribution Date or, if no interest has yet been paid, from the Closing Date). Such interest on this Note shall be paid in the manner specified herein. Interest on this Note is 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. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed LIBOR Rate Notes, Class A-IO-1 (the "Class A-IO-1 Notes"), issued pursuant to the A-5-3 Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class A-IO-1 Notes. The Class A-IO-1 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class A-IO-1 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class A-IO-1 Notes. The Class A-IO-1 Notes are issuable as registered notes in the denomination of $50,000 or any integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class A-IO-1 Notes may be exchanged for a like Class and aggregate Notional Amount of Class A-IO-1 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue A-5-4 or not, for the purpose of receiving payment of or on account of interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. A-5-5 IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ A-5-6 CERTIFICATE OF AUTHENTICATION This note is one of the Class A-IO-1 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-5-7 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1 The following exchanges of a part of this Global Note for an interest in another Global Note or for an Individual Note, or exchanges of a part of another Global Note or Individual Note for an interest in this Global Note, have been made:
Principal Amount of this Global Note Amount of decrease in Amount of increase in following such Signature of Principal Amount of Principal Amount of decrease authorized officer of Date of Exchange this Global Note this Global Note (or increase) Note Registrar ---------------- ---------------- ---------------- ------------- --------------
- ------------------------- 1 This should be included only if the Note is issued in global form. A-5-8 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-5-9 EXHIBIT A-6 ----------- FORM OF CLASS A-IO-2 NOTE ------------------------- THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (4) PURSUANT TO A VALID REGISTRATION STATEMENT. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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. [IF REGULATION S GLOBAL NOTE] [THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE ORIGINAL ISSUE DATE OF THE NOTES, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.] THE PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT A-6-1 PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. NO TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF ONE OR MORE CLASS A-IO-2 NOTES (A "TRANSFER") SHALL BE MADE UNLESS SIMULTANEOUSLY WITH THE TRANSFER (1) A PROPORTIONATE AMOUNT OF CLASS A-IO-1 NOTES AND CLASS A-4 NOTES ARE TRANSFERRED SO THAT THE RATIO OF THE NOTIONAL AMOUNT OF THE CLASS A-IO-1 NOTES SO TRANSFERRED TO THE NOTIONAL AMOUNT OF ALL CLASS A-IO-1 NOTES, THE RATIO OF THE NOTIONAL AMOUNT OF THE CLASS A-IO-2 SO TRANSFERRED TO THE NOTIONAL AMOUNT OF ALL CLASS A-IO-2 NOTES, AND THE RATIO OF THE PRINCIPAL AMOUNT OF THE CLASS A-4 NOTES SO TRANSFERRED TO THE PRINCIPAL AMOUNT OF ALL CLASS A-4 NOTES ARE EQUAL AND (2) THE TRANSFERS OF THE CLASS A-IO-1 NOTES, THE CLASS A-IO-2 AND THE CLASS A-4 NOTES REFERRED TO HEREIN ARE MADE TO THE SAME PERSON. THIS NOTE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY DISTRIBUTIONS IN RESPECT OF PRINCIPAL. A-6-2 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED LIBOR RATE NOTES CLASS A-IO-2
No. A-IO-2___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP 0.12% June 25, 2031 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, certain monthly distributions of interest for each Quarterly Distribution Date through and including the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Quarterly Distribution Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Quarterly Distribution Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is a Quarterly Distribution Date, in which case this note shall bear interest from such Quarterly Distribution Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class A-IO-2 Notes (defined herein) shall be in default, Class A-IO-2 Notes issued in lieu of such Class A-IO-2 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class A-IO-2 Notes surrendered until the Date of Maturity shown above. Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the U.S. Bank National Association, as indenture trustee (the "Indenture Trustee") in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). The Issuer will pay interest on this Class A-IO-2 Note at the rate per annum equal to the Note Interest Rate (as defined in the Indenture) on each Quarterly Distribution Date until the Date of Maturity. Interest on this Class A-IO-2 Note will accrue for each Quarterly Distribution Date on the Notional Amount outstanding of the Class A-IO-2 Note until such Notional Amount is reduced to zero, from the most recent Distribution Date on which interest has been paid to but excluding such Quarterly Distribution Date or, if no interest has yet been paid, from the Closing Date). Such interest on this Note shall be paid in the manner specified herein. Interest on this Note is 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. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed LIBOR Rate Notes, Class A-IO-2 (the "Class A-IO-2 Notes"), issued pursuant to the A-6-3 Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class A-IO-2 Notes. The Class A-IO-2 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class A-IO-2 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class A-IO-2 Notes. The Class A-IO-2 Notes are issuable as registered notes in the denomination of $50,000 or any integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class A-IO-2 Notes may be exchanged for a like Class and aggregate Notional Amount of Class A-IO-2 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue A-6-4 or not, for the purpose of receiving payment of or on account of interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. A-6-5 IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ A-6-6 CERTIFICATE OF AUTHENTICATION This note is one of the Class A-IO-2 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-6-7 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1 The following exchanges of a part of this Global Note for an interest in another Global Note or for an Individual Note, or exchanges of a part of another Global Note or Individual Note for an interest in this Global Note, have been made:
Principal Amount of this Global Note Amount of decrease in Amount of increase in following such Signature of Principal Amount of Principal Amount of decrease authorized officer of Date of Exchange this Global Note this Global Note (or increase) Note Registrar ---------------- ---------------- ---------------- ------------- --------------
- ----------------- 1 This should be included only if the Note is issued in global form. A-6-8 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-6-9 EXHIBIT A-7 ----------- FORM OF CLASS B-1 NOTE ---------------------- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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 PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. A-7-1 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED AUCTION RATE NOTES CLASS B-1
No. B-1-___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP Variable June 1, 2039 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: **$39,500,000**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, the Principal Amount shown above in lawful money of the United States of America on the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Auction Rate Note Interest Payment Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Auction Rate Note Interest Payment Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is an Auction Rate Note Interest Payment Date, in which case this note shall bear interest from such Auction Rate Note Interest Payment Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class B-1 Notes (defined herein) shall be in default, Class B-1 Notes issued in lieu of such Class B-1 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class B-1 Notes surrendered until payment of the principal hereof has been made or duly provided for. Principal of this note is payable upon the presentation and surrender hereof at the principal corporate trust office of U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the Indenture Trustee in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). This note shall initially bear interest at the rate of interest per annum established by the Broker-Dealers for the initial Auction Period pursuant to the Broker-Dealer Agreements, written notice of which shall be given to the Indenture Trustee. For each Auction Period thereafter, the unpaid principal amount hereof from time to time outstanding shall bear interest at the Auction Rate, except as hereinafter provided, determined in accordance with the provisions of Appendix B to the Indenture, payable on each Auction Rate Note Interest Payment Date and on the date of payment or redemption of principal hereof to the extent of interest accrued on the principal then being paid or redeemed, such interest to accrue from the later of the date hereof or the date to A-7-2 which interest has been paid or duly provided for. Interest at the Auction Rate established from time to time pursuant to Appendix B to the Indenture shall be computed for the actual number of days elapsed on the basis of a year consisting of 365 or 366 days, as applicable, and as provided in Appendix B to the Indenture. This Note shall bear interest at an Auction Rate based on an Auction Period that shall, until adjusted pursuant to Appendix B to the Indenture, generally consist of 28 days, all as determined in Appendix B to the Indenture. If, for any Auction Period, the Auction Rate exceeds the Maximum Auction Rate, each as determined in accordance with the provisions of Appendix B to the Indenture, then the applicable interest rate for this note for that Auction Period will be the Maximum Auction Rate. The excess of the amount of interest that would have accrued on this note at the Auction Rate over the amount of interest actually accrued at the Maximum Auction Rate, together with any unpaid portion of any such excess from prior Auction Periods, will accrue as the Carry-over Amount. The Carry-over Amount will bear interest at a rate equal to One-Month LIBOR (as defined in Appendix B to the Indenture) from the Auction Rate Note Interest Payment Date for the Auction Period for which the Carry-over Amount was calculated until paid or extinguished as described in the Indenture. No reference to "principal" or "interest" in this note or in the Indenture shall include within the meaning of such words any Carry-over Amount or any interest accrued on any Carry-over Amount. The Carry-over Amount (and interest accrued thereon) for the Class B-1 Notes shall be paid by the Indenture Trustee, if ever, on the first occurring Auction Rate Note Interest Payment Date for a subsequent Auction Period if and to the extent set forth in the Indenture. THE AUCTION PERIOD, THE AUCTION RATE, THE METHOD OF DETERMINING THE AUCTION RATE AND THE MAXIMUM AUCTION RATE ON THIS NOTE AND THE AUCTION PROCEDURES RELATED THERETO, A CHANGE IN THE AUCTION DATE AND THE AUCTION RATE NOTE INTEREST PAYMENT DATES WILL BE DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF, INCLUDING, WITHOUT LIMITATION, REQUIRED NOTICES THEREOF TO THE REGISTERED OWNERS OF THE CLASS B-1 NOTES, THE INDENTURE AND THE AUCTION AGENCY AGREEMENT, TO WHICH TERMS, CONDITIONS AND PROVISIONS SPECIFIC REFERENCE IS HEREBY MADE, AND ALL OF WHICH TERMS, CONDITIONS AND PROVISIONS ARE HEREBY SPECIFICALLY INCORPORATED HEREIN BY REFERENCE. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed Auction Rate Notes, Class B-1 (the "Class B-1 Notes"), issued pursuant to the Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). A-7-3 This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class B-1 Notes. The Class B-1 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class B-1 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class B-1 Notes. The Class B-1 Notes are issuable as registered notes in the denomination of $50,000 or any integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class B-1 Notes may be exchanged for a like Class and aggregate principal amount of Class B-1 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue or not, for the purpose of receiving payment of or on account of the principal or interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. A-7-4 IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ CERTIFICATE OF AUTHENTICATION This note is one of the Class B-1 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-7-5 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-7-6 EXHIBIT A-8 ----------- FORM OF CLASS B-2 NOTE ---------------------- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE, THE REGISTRAR OR ANY AGENT THEREOF 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 PURCHASER OR HOLDER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT, AND IS NOT PURCHASING THIS NOTE ON BEHALF OF, AS A FIDUCIARY OF, OR WITH "PLAN ASSETS" (WITHIN THE MEANING OF SECTION 2510.3-101 OF THE U.S. DEPARTMENT OF LABOR REGULATIONS (THE "PLAN ASSET REGULATION")) OF, AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), A "PLAN" (WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE")) OR ANY OTHER ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, WHICH IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A "PLAN"), OR (II)(A) THIS NOTE IS RATED INVESTMENT GRADE OR BETTER AS OF THE DATE OF PURCHASE, (B) THE PURCHASER OR HOLDER OF THE NOTE BELIEVES THAT THE NOTE IS PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL EQUITY FEATURES FOR PURPOSES OF THE PLAN ASSET REGULATION AND AGREES TO SO TREAT SUCH NOTE AND (C) THE ACQUISITION AND HOLDING OF THE NOTE DO NOT RESULT IN A VIOLATION OF THE PROHIBITED TRANSACTION RULES OF ERISA OR SECTION 4975 OF THE CODE (X) BECAUSE IT IS COVERED BY AN APPLICABLE EXEMPTION, INCLUDING PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14, OR (Y) BY REASON OF THE TRUST, THE ADMINISTRATOR, THE UNDERWRITERS, THE SERVICERS, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, ANY PROVIDER OF CREDIT SUPPORT OR ANY OF THEIR AFFILIATES NOT BEING A "PARTY IN INTEREST" (WITHIN THE MEANING OF SECTION 3(14) OF ERISA) WITH RESPECT TO SUCH PLAN. A-8-1 THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 STUDENT LOAN ASSET BACKED AUCTION RATE NOTES CLASS B-2
No. B-2-___ INTEREST RATE DATE OF MATURITY DATED DATE CUSIP Variable June 1, 2039 ______ __, 200_ ___________ REGISTERED OWNER: **CEDE & CO.** PRINCIPAL AMOUNT: **$39,500,000**
The National Collegiate Student Loan Trust 2004-1, a statutory trust duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay, but only from the sources and as hereinafter provided, to the Registered Owner specified above, or registered assigns, the Principal Amount shown above in lawful money of the United States of America on the Date of Maturity shown above, unless prepaid prior thereto with interest thereon from the Auction Rate Note Interest Payment Date next preceding the date of authentication hereof, unless such date of authentication is prior to the first Auction Rate Note Interest Payment Date, in which case this note shall bear interest from the Dated Date specified above or unless such date of authentication is an Auction Rate Note Interest Payment Date, in which case this note shall bear interest from such Auction Rate Note Interest Payment Date; PROVIDED, HOWEVER, that if as shown by the records of the Indenture Trustee (defined herein) interest on the Class B-2 Notes (defined herein) shall be in default, Class B-2 Notes issued in lieu of such Class B-2 Notes surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Class B-2 Notes surrendered until payment of the principal hereof has been made or duly provided for. Principal of this note is payable upon the presentation and surrender hereof at the principal corporate trust office of U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Interest on this note is payable to the Registered Owner of record as of the close of business on the applicable record date as shown on the registration books of the Issuer maintained by the Indenture Trustee in its capacity as bond registrar, or its successor in such capacity, by check or draft mailed to the Registered Owner at the registered address. Any capitalized words and terms used as defined words and terms in this note and not otherwise defined herein shall have the meanings given them in the Indenture (hereinafter defined). This note shall initially bear interest at the rate of interest per annum established by the Broker-Dealers for the initial Auction Period pursuant to the Broker-Dealer Agreements, written notice of which shall be given to the Indenture Trustee. For each Auction Period thereafter, the unpaid principal amount hereof from time to time outstanding shall bear interest at the Auction Rate, except as hereinafter provided, determined in accordance with the provisions of Appendix B to the Indenture, payable on each Auction Rate Note Interest Payment Date and on the date of payment or redemption of principal hereof to the extent of interest accrued on the principal then being paid or redeemed, such interest to accrue from the later of the date hereof or the date to A-8-2 which interest has been paid or duly provided for. Interest at the Auction Rate established from time to time pursuant to Appendix B to the Indenture shall be computed for the actual number of days elapsed on the basis of a year consisting of 365 or 366 days, as applicable, and as provided in Appendix B to the Indenture. This Note shall bear interest at an Auction Rate based on an Auction Period that shall, until adjusted pursuant to Appendix B to the Indenture, generally consist of 28 days, all as determined in Appendix B to the Indenture. If, for any Auction Period, the Auction Rate exceeds the Maximum Auction Rate, each as determined in accordance with the provisions of Appendix B to the Indenture, then the applicable interest rate for this note for that Auction Period will be the Maximum Auction Rate. The excess of the amount of interest that would have accrued on this note at the Auction Rate over the amount of interest actually accrued at the Maximum Auction Rate, together with any unpaid portion of any such excess from prior Auction Periods, will accrue as the Carry-over Amount. The Carry-over Amount will bear interest at a rate equal to One-Month LIBOR (as defined in Appendix B to the Indenture) from the Auction Rate Note Interest Payment Date for the Auction Period for which the Carry-over Amount was calculated until paid or extinguished as described in the Indenture. No reference to "principal" or "interest" in this note or in the Indenture shall include within the meaning of such words any Carry-over Amount or any interest accrued on any Carry-over Amount. The Carry-over Amount (and interest accrued thereon) for the Class B-2 Notes shall be paid by the Indenture Trustee, if ever, on the first occurring Auction Rate Note Interest Payment Date for a subsequent Auction Period if and to the extent set forth in the Indenture. THE AUCTION PERIOD, THE AUCTION RATE, THE METHOD OF DETERMINING THE AUCTION RATE AND THE MAXIMUM AUCTION RATE ON THIS NOTE AND THE AUCTION PROCEDURES RELATED THERETO, A CHANGE IN THE AUCTION DATE AND THE AUCTION RATE NOTE INTEREST PAYMENT DATES WILL BE DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF, INCLUDING, WITHOUT LIMITATION, REQUIRED NOTICES THEREOF TO THE REGISTERED OWNERS OF THE CLASS B-2 NOTES, THE INDENTURE AND THE AUCTION AGENCY AGREEMENT, TO WHICH TERMS, CONDITIONS AND PROVISIONS SPECIFIC REFERENCE IS HEREBY MADE, AND ALL OF WHICH TERMS, CONDITIONS AND PROVISIONS ARE HEREBY SPECIFICALLY INCORPORATED HEREIN BY REFERENCE. This note is one of a duly authorized class of notes of the Issuer designated Student Loan Asset Backed Auction Rate Notes, Class B-2 (the "Class B-2 Notes"), issued pursuant to the Indenture, dated as of June 1, 2004, between the Issuer and the Indenture Trustee, as indenture trustee (such indenture, as supplemented or amended from time to time in accordance with its terms, the "Indenture"). The Indenture pledges for the payment of the Notes (as hereinafter defined) the student loans identified in the Indenture (the "Financed Student Loans") and the payments of interest and the repayments of principal with respect thereto, including certain guarantees related thereto, as well as certain other rights, funds and accounts of the Issuer set forth in the Indenture, including a Reserve Account (collectively, the "Trust Estate"). A-8-3 This note is a limited obligation of the Issuer, payable solely from the principal and interest on Financed Student Loans financed pursuant to the Indenture, any guaranty payments thereon received by the Issuer, and certain other revenues and earnings to be held pursuant to the Indenture, all in an amount and in the manner provided in the Indenture. Additional notes and other obligations may be issued or entered into under the Indenture the right to payment of which is equal with or subordinate to the Class B-2 Notes. The Class B-2 Notes, together with any additional notes issued pursuant to the Indenture are collectively referred to herein as "Notes." The Notes are secured as provided in the Indenture, but solely by the pledge of the Trust Estate described in the Indenture; provided that the rights of the holders of the Class A Notes shall be superior to the rights of the Registered Owners of Class B Notes. Reference is made to the Indenture for a complete statement of the terms and conditions upon which the Class B-2 Notes have been issued and provisions made for their security and for the rights, duties and obligations of the Issuer, the Indenture Trustee and the Registered Owners of the Class B-2 Notes. The Class B-2 Notes are issuable as registered notes in the denomination of $50,000 or any integral multiple thereof. Subject to the limitations provided in the Indenture and upon payment of any tax or governmental charge, Class B-2 Notes may be exchanged for a like Class and aggregate principal amount of Class B-2 Notes of other authorized denominations. The Registered Owner of this note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture. If an Event of Default under the Indenture occurs, the principal of all Notes then Outstanding issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to be done, to exist, to happen and to be performed in order to make this note a valid and binding obligation of the Issuer according to its terms have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. The Issuer and the Indenture Trustee may deem and treat the person in whose name this note is registered upon the registration books as the absolute owner hereof, whether this note is overdue or not, for the purpose of receiving payment of or on account of the principal or interest and for all other purposes, and all such payments so made to the Registered Owner or upon such Registered Owner's order shall be valid and effectual to satisfy and discharge the liability on this note to the extent of the sum or sums so paid, and neither the Issuer nor Indenture Trustee nor any Registrar shall be affected by any notice to the contrary. This note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Indenture Trustee. A-8-4 IN WITNESS WHEREOF, The National Collegiate Student Loan Trust 2004-1 has caused this note to be executed and attested. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: __________________________________ Name: Title: Attest _______________________________ A-8-5 CERTIFICATE OF AUTHENTICATION This note is one of the Class B-2 Notes and described in the provisions of the within-mentioned Indenture. Date of Authentication: __________________ U.S. BANK NATIONAL ASSOCIATION, as Authenticating Agent By _____________________________ Authorized Signatory A-8-6 ASSIGNMENT For Value Received _____________________ hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ (Please print or type an address (Social Security number including postal zip code of transferee) of transferee) the within note, together with accrued interest thereon and all right, title and interest thereto, and hereby irrevocably authorize(s) and appoint(s) _______________________________________ attorney to transfer said note on the books of the within named Corporation with full power of substitution in the premises. Dated ________________ ____________________________L.S. Guaranteed by: ____________________________________ A-8-7 EXHIBIT B --------- FORM OF STUDENT LOAN ACQUISITION CERTIFICATE -------------------------------------------- This Student Loan Acquisition Certificate is submitted pursuant to the provisions of the Indenture, dated as of June 1, 2004 (as amended, the "Indenture"), between The National Collegiate Student Loan Trust 2004-1 (the "Issuer") and U.S. Bank National Association, as Indenture Trustee. All capitalized terms used in this Certificate and not otherwise defined herein shall have the same meanings given to such terms in the Indenture. In your capacity as Trustee, you are hereby authorized and requested to disburse to _____________________ (the "Seller") the sum of approximately $__________ in accordance with specific instructions that will follow (or, in the case of an exchange, the Financed Student Loans listed in Schedule A hereto) for the purchase of Student Loans. With respect to the Student Loans so to be acquired, the Issuer hereby certifies as follows: (1) The Student Loans to be acquired are those specified in Schedule A, attached hereto and furnished to you by the Servicer (the "Subsequent Student Loans"). The remaining unpaid principal amount of each Subsequent Student Loan is as shown on such Schedule. (2) The amount to be disbursed pursuant to this Certificate does not exceed the amount permitted by Section 8.10 of the Indenture. (3) The Issuer and Seller represent that each Subsequent Student Loan is a Student Loan that meets the requirements of Section 3.21 of the Indenture and each such Student Loan is authorized to be acquired by the Indenture. (4) You have been previously, or are herewith, provided with the following items (the items listed in subparagraphs (a), (b) and (c) have been received and are being retained, on your behalf, by the Issuer or the Servicer): (a) a copy of the Student Loan Purchase Agreement between the Issuer and the Seller with respect to the Subsequent Student Loans; (b) with respect to each Guaranteed Student Loan included among the Subsequent Student Loans, a certified copy of the Guarantee Agreement relating thereto; (c) a blanket endorsement of the promissory notes evidencing the Subsequent Student Loans specifying that they have been assigned to the Trustee with all necessary endorsements which the Servicer has been instructed to attach to each promissory note; (d) instruments duly assigning the Subsequent Student Loans to the Trustee; and B-1 (e) an opinion of counsel to the Issuer specifying each action necessary to perfect a security interest in all Subsequent Student Loans to be acquired by the Issuer pursuant to the Student Loan Purchase Agreement in favor of the Trustee, including, if applicable, in the manner provided for by the provisions of 20 U.S.C. ss. 1087-2(d)(3) or 20 U.S.C. ss. 1082(m)(1)(d)(iv), as applicable (you Are authorized to rely on the advice of a single blanket opinion of counsel to the Issuer until such time as this Issuer shall provide any amended opinion to you). (5) The Issuer is not, on the date hereof, in default under the Indenture or the Student Loan Purchase Agreement applicable to the Subsequent Student Loans, and, to the best knowledge of the Issuer, the Seller is not in default under the Student Loan Purchase Agreement applicable to the Subsequent Student Loans. The Issuer is not aware of any default existing on the date hereof under any of the other documents referred to in paragraph 4 hereof. (6) All of the conditions specified in the Student Loan Purchase Agreement applicable to the Subsequent Student Loans and in the Indenture for the disbursement hereby authorized and requested have been satisfied; provided that the Administrator may waive any requirement of receiving an opinion of counsel from the counsel to the Seller. (7) The Issuer is not in default in the performance of any of its covenants and agreements made in the Guarantee Agreement applicable to the Subsequent Student Loans. (8) The proposed use of moneys in the Pre-Funding Account is in compliance with the provisions of the Indenture. (9) The undersigned is authorized to sign and submit this Certificate on behalf of the Depositor. B-2 WITNESS my hand this __ day of __________, 20__. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By [______________________] By______________________________ Name____________________________ Title___________________________ B-3 EXHIBIT C --------- FORM OF TRANSFEREE LETTER ------------------------- [Non-Rule 144a] --------------- [Date] The National Collegiate Student Loan Trust 2004-1 c/o Wachovia Trust Company, National Association, as Owner Trustee One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Corporate Trust Administration with a copy to: The First Marblehead Corporation The Prudential Tower 800 Boylston Street - 34th Floor Boston, Massachusetts 02199-8157 Attention: Controller Copy to: Richard P. Zermani, Esq. U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: NCSLT 2003-1 Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-I)-2 Notes ---------------------------------------------- Ladies and Gentlemen: In connection with our acquisition of the above-captioned Notes, we certify that (a) we understand that the Notes are not being registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we have had the opportunity to ask questions of and receive answers from The National Collegiate Student Loan Trust 2004-1 concerning the purchase of the Notes and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Notes, (c) we are acquiring the Notes for investment for our own account and not with a view to any distribution C-1 of such Notes (but without prejudice to our right at all times to sell or otherwise dispose of the Notes in accordance with clause (e) below), (d) we have not offered or sold any Notes to, or solicited offers to buy any Notes from, any person, or otherwise approached or negotiated with any person with respect thereto, or taken any other action which would result in a violation of Section 5 of the Act, (e) we will not sell, transfer or otherwise dispose of any Notes unless (1) such sale, transfer or other disposition is made pursuant to an effective registration statement under the Act or is exempt from such registration requirements, and if requested, we will at our expense provide an opinion of counsel satisfactory to the addressees of this certificate that such sale, transfer or other disposition may be made pursuant to an exemption from the Act, (2) the purchaser or transferee of such Note has executed and delivered to you a certificate to substantially the same effect as this certificate if required by the Indenture, and (3) the purchaser or transferee has otherwise complied with any conditions for transfer set forth in the Indenture, (f) the purchaser is not acquiring a Note, directly or indirectly, as a fiduciary of, on behalf of, or with the "Plan Assets" (within the meaning of Section 2510.3-101 of the U.S. Department of Labor regulations (the "Plan Asset Regulation")) of, an "employee benefit plan" (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), a "plan" (within the meaning of Section 4975 of the Internal Revenue Code of 1986 (the "Code")) or any other entity whose underlying assets include Plan Assets by reason of any plan's investment in the entity, which is subject to Title I of ERISA or Section 4975 of the Code (a "Plan"); unless (i) such Note is rated investment grade or better as of the date of purchase, (ii) the purchaser of the Note believes that the Note is properly treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulation and agrees to so treat such Note and (iii) the acquisition and holding of the Note does not result in a violation of the prohibited transaction rules of ERISA or Section 4975 of the Code (A) because it is covered by an applicable exemption, including Prohibited Transaction Class Exemption 96-23, 95-60, 91-38, 90-1 or 84-14, or (B) by reason of the Trust, the Administrator, the Initial Purchasers, the Servicers, the Indenture Trustee, the Owner Trustee, any provider of credit support or any of their affiliates not being a "Party in Interest" (within the meaning of Section 3(14) of ERISA) with respect to such Plan, and (g) if the purchaser is acquiring a Class A-4 Note, Class A-IO-1 Note or a Class A-IO-2 Note, the purchaser also simultaneously is acquiring a proportionate amount of the Class A-IO-1 Notes, Class A-IO-2 Notes or Class A-4 Notes, as applicable, such that the ratio and the principal balance of the Class A-4 Note being acquired to all Class A-4 Notes and the ratio and the notional amount of the Class A-IO-1 Note and Class A-IO-2 Note being acquired to all Class A-IO-1 Notes and Class A-IO-2 Notes are equal. Very truly yours, ________________________ Print Name of Transferee By:___________________ Authorized Officer C-2 EXHIBIT D --------- FORM OF RULE 144A CERTIFICATION ------------------------------- [Date] The National Collegiate Student Loan Trust 2004-1 c/o Wachovia Trust Company, National Association, as Owner Trustee One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Corporate Trust Administration with a copy to: The First Marblehead Corporation The Prudential Tower 800 Boylston Street - 34th Floor Boston, Massachusetts 02199-8157 Attention: Controller Copy to: Richard P. Zermani, Esq. U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: NCSLT 2003-1 Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-IO-2 Notes ---------------------------------------------- Ladies and Gentlemen: In connection with our acquisition of the above Notes we certify that (a) we understand that the Notes are not being registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we have had the opportunity to ask questions of and receive answers from The National Collegiate Student Loan Trust 2004-1 concerning the purchase of the Notes and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Notes, (c) we have not, nor has anyone acting on our behalf offered, transferred, pledged, sold or otherwise disposed of the Notes, any interest in the Notes or any other similar security to, or solicited any offer to buy or D-1 accept a transfer, pledge or other disposition of the Notes, any interest in the Notes or any other similar security from, or otherwise approached or negotiated with respect to the Notes, any interest in the Notes or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, that would constitute a distribution of the Notes under the Act or that would render the disposition of the Notes a violation of Section 5 of the Act or require registration pursuant thereto, nor will act, nor has authorized or will authorize any person to act, in such manner with respect to the Notes, (d) we are a "qualified institutional buyer" as that term is defined in Rule 144A under the Act and have completed the form of certification to that effect attached hereto as Annex 1, (e) we are not acquiring a Note, directly or indirectly, as a fiduciary of, on behalf of, or with the "Plan Assets" (within the meaning of Section 2510.3-101 of the U.S. Department of Labor regulations (the "Plan Asset Regulation")) of, an "employee benefit plan" (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), a "plan" (within the meaning of Section 4975 of the Internal Revenue Code of 1986 (the "Code")) or any other entity whose underlying assets include Plan Assets by reason of any plan's investment in the entity, which is subject to Title I of ERISA or Section 4975 of the Code (a "Plan"); unless (i) such Note is rated investment grade or better as of the date of purchase, (ii) the purchaser of the Note believes that the Note is properly treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulation and agrees to so treat such Note and (iii) the acquisition and holding of the Note does not result in a violation of the prohibited transaction rules of ERISA or Section 4975 of the Code (A) because it is covered by an applicable exemption, including Prohibited Transaction Class Exemption 96-23, 95-60, 91-38, 90-1 or 84-14, or (B) by reason of the Trust, the Administrator, the Initial Purchasers, the Servicers, the Indenture Trustee, the Owner Trustee, any provider of credit support or any of their affiliates not being a "Party in Interest" (within the meaning of Section 3(14) of ERISA) with respect to such Plan, (f) if the Purchaser is acquiring a Class A-4 Note, Class A-IO-1 Note or a Class A-IO-2 Note, the purchaser also simultaneously is acquiring a proportionate amount of the Class A-IO-1 Notes, Class A-IO-2 Notes or Class A-4 Notes, as applicable, such that the ratio and the principal balance of the Class A-4 Note being acquired to all Class A-4 Notes and the ratio and the notional amount of the Class A-IO-1 Note being acquired to all Class A-IO-1 Notes and Class A-IO-2 Notes are equal. We are aware that the sale to us is being made in reliance on Rule 144A. We are acquiring the Notes for our own account or for resale pursuant to Rule 144A and further, understand that such Notes may be resold, pledged or transferred only (i) to a person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the Act. Very truly yours, _________________________ Print Name of Transferee By:___________________ Authorized Officer D-2 ANNEX 1 TO EXHIBIT D [FORM OF CERTIFICATION] [Date] The National Collegiate Student Loan Trust 2004-1 c/o Wachovia Trust Company, National Association, as Owner Trustee One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Corporate Trust Administration with a copy to: The First Marblehead Corporation The Prudential Tower 800 Boylston Street, 34th Floor Boston, Massachusetts 02199-8157 Attention: Controller Copy to: Richard P. Zermani, Esq. U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: NCSLT 2003-1 Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-IO-2 Notes ---------------------------------------------- Ladies and Gentlemen: In connection with our purchase of the above Notes, the undersigned certifies to each of the parties to whom this letter is addressed that it is a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Act")) as follows: 1. It owns and/or invests on a discretionary basis eligible securities (excluding affiliate's securities, bank deposit notes and CD's, loan participations, repurchase agreements, securities owned but subject to a repurchase agreement and currency, interest rate and commodity swaps), as described below: 1 Amount:1 $_________________; and 2. The dollar amount set forth above is: a. greater than $100 million and the undersigned is one of the following entities: (1) |_| an insurance company as defined in Section 2(13) of the Act;* or (2) |_| an investment company registered under the Investment Company Act or any business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940 or as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; or (3) |_| a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; or (4) |_| a plan (i) established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, the laws of which permit the purchase of securities of this type, for the benefit of its employees and (ii) the governing investment guidelines of which permit the purchase of securities of this type; or (5) |_| a corporation (other than a U.S. bank, savings and loan association or equivalent foreign institution), partnership, Massachusetts or similar business trust, or an organization described in Section 501(c)(3) of the Internal Revenue Code; or (6) |_| a U.S. bank, savings and loan association or equivalent foreign institution, which has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements as of a date not more than 16 months preceding the date of sale in the case of a U.S. institution or 18 months in the case of a foreign institution; or (7) |_| an investment adviser registered under the Investment Advisers Act; or b. |_| greater than $10 million, and the undersigned is a broker-dealer registered with the SEC; or c. |_| greater than $10 million, and the undersigned is a broker-dealer registered with the SEC and will only purchase Rule 144A securities in riskless principal transactions (as defined in Rule 144A); or - -------------------------- 1 Must be calculated using only securities which the undersigned beneficially held as of the date below. * A purchase by an insurance company for one or more of its separate accounts, as defined by section 2(a)(37) of the Investment Company Act of 1940, which are neither registered nor required to be registered thereunder, shall be deemed to be a purchase for the account of such insurance company. 2 d. |_| greater than $100 million, and the undersigned is an investment company registered under the Investment Company Act of 1940, which, together with one or more registered investment companies having the same or an affiliated investment adviser, owns at least $100 million of eligible securities; or e. |_| greater than $100 million, and the undersigned is an entity, all the equity owners of which are qualified institutional buyers. The undersigned further certifies that it is purchasing Notes for its own account or for the account of others that independently qualify as "Qualified Institutional Buyers" as defined in Rule 144A. It is aware that the sale of the Notes is being made in reliance on its continued compliance with Rule 144A. It is aware that the transferor may rely on the exemption from the provisions of Section 5 of the Act provided by Rule 144A. The undersigned understands that the Notes may be resold, pledged or transferred only to a person reasonably believed to be a Qualified Institutional Buyer that purchases for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the resale, pledge or transfer is being made in reliance in Rule 144A. The undersigned agrees that if at some time before the expiration of the holding period described in Rule 144 it wishes to dispose of or exchange any of the Notes, it will not transfer or exchange any of the Notes to a Qualified Institutional Buyer without first obtaining a letter in the form hereof from the transferee and delivering such certificate to the addressees hereof. IN WITNESS WHEREOF, this document has been executed by the undersigned who is duly authorized to do so on behalf of the undersigned Qualified Institutional Buyer on the _____ day of ___________, ____. Name of Institution Signature Name Title** 3 - -------------------- **Must be President, Chief Financial Officer, or other executive officer. 4 EXHIBIT E --------- FORM OF TRANSFER CERTIFICATE FOR RULE 144A GLOBAL NOTE TO --------------------------------------------------------- REGULATION S GLOBAL NOTE DURING RESTRICTED PERIOD ------------------------------------------------- [Date] U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: NCSLT 2003-1 Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-IO-2 Notes ---------------------------------------------- Ladies and Gentlemen: Reference is hereby made to the Indenture, dated as of June 1, 2004 (the "Agreement"), between The National Collegiate Student Loan Trust 2004-1, as Issuer (the "Issuer"), and U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement. This letter relates to US $[_______] aggregate current principal amount of Class __ Notes (the "Notes") which are held in the form of the Rule 144A Global Note (CUSIP No. _________) with the Depository in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest for an interest in the Regulation S Global Note (CUSIP No. __________) to be held with [Euroclear] [Clearstream] (Common Code No.____________) through the Depository. In connection with such request and in respect of such Notes, the Transferor does hereby certify that such transfer has been effected in accordance with the transfer restrictions set forth in the Agreement and pursuant to and in accordance with Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor does hereby certify that: 1. the offer of the Notes was not made to a person in the United States, 2. [at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States] [the transaction was executed in, on or through the facilities of a designated offshore securities market and neither E-1 the transferor nor any person acting on its behalf knows that the transaction was pre-arranged with a buyer in the United States], 3. the transferee is not a U.S. Person within the meaning of Rule 902(o) of Regulation S nor a Person acting for the account or benefit of a U.S. Person, 4. no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable, 5. the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act, and 6. upon completion of the transaction, the beneficial interest being transferred as described above will be held with the Depository through [Euroclear] [Clearstream]. This certificate and the statements contained herein are made for your benefit and the benefit of the Indenture Trustee and the Issuer. [Insert Name of Transferor] By:_______________________________ Name: Title: Dated: E-2 EXHIBIT F --------- FORM OF TRANSFER CERTIFICATE FOR RULE 144A GLOBAL NOTE TO --------------------------------------------------------- REGULATION S GLOBAL NOTE AFTER RESTRICTED PERIOD ------------------------------------------------ U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: NCSLT 2003-1 Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-IO-2 Notes ---------------------------------------------- Ladies and Gentlemen: Reference is hereby made to the Indenture, dated as of June 1, 2004 (the "Agreement"), between The National Collegiate Student Loan Trust 2004-1, as Issuer (the "Issuer"), and U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement. This letter relates to US $[________] aggregate current principal amount of Class __ Notes (the "Notes") which are held in the form of the Rule 144A Global Note (CUSIP No. ________) with the Depository in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Notes for an interest in the Regulation S Global Note (Common Code No. _____). In connection with such request, and in respect of such Notes, the Transferor does hereby certify that such transfer has been effected in accordance with the transfer restrictions set forth in the Agreement and, (i) with respect to transfers made in reliance on Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), the Transferor does hereby certify that: 1. the offer of the Notes was not made to a person in the United States; 2. [at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States] [the transaction was executed in, on or through the facilities of a designated offshore securities market and neither F-1 the Transferor nor any person acting on its behalf knows that the transaction was pre-arranged with a buyer in the United States]; 3. no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and 4. the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act, or (ii) with respect to transfers made in reliance on Rule 144 under the Securities Act, the Transferor does hereby certify that the Notes that are being transferred are not "restricted securities" as defined in Rule 144 under the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Indenture Trustee and the Issuer. [Insert Name of Transferor] By:_______________________________ Name: Title: Dated: F-2 EXHIBIT G --------- FORM OF TRANSFER CERTIFICATE REGULATION S GLOBAL NOTE ----------------------------------------------------- TO RULE 144A GLOBAL NOTE DURING RESTRICTED PERIOD ------------------------------------------------- U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: NCSLT 2003-1 Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-IO-2 Notes ---------------------------------------------- Ladies and Gentlemen: Reference is hereby made to the Indenture, dated as of June 1, 2004 (the "Agreement"), between The National Collegiate Student Loan Trust 2003-1, as Issuer (the "Issuer"), and U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement. This letter relates to US $[________] aggregate current principal amount of Class __ Notes (the "Notes") which are held in the form of the Regulation S Global Note (CUSIP No. _______) with [Euroclear] [Clearstream] (Common Code No.__________) through the Depository in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Notes for an interest in the Regulation 144A Global Note (CUSIP No.____________). In connection with such request, and in respect of such Notes, the Transferor does hereby certify that such Notes are being transferred in accordance with (i) the transfer restrictions set forth in the Agreement and (ii) Rule 144A under the Securities Act to a transferee that the Transferor reasonably believes is purchasing the Notes for its own account with respect to which the transferee exercises sole investment discretion and the transferee and any such account is a "qualified institutional buyer" within the meaning of Rule 144A, in each case in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any jurisdiction. G-1 This certificate and the statements contained herein are made for your benefit and the benefit of the Indenture Trustee, the Issuer and placement agent of the offering of the Notes. [Insert Name of Transferor] By:_______________________________ Name: Title: Dated: G-2 EXHIBIT H --------- FORM OF TRANSFER CERTIFICATE FOR REGULATION S --------------------------------------------- GLOBAL NOTE DURING RESTRICTED PERIOD ------------------------------------ U.S. Bank National Association Corporate Trust Department -- SFS One Federal Street, 3rd Floor Boston, Massachusetts 02111 Attention: NCT 2003-1 Auction Rate Notes Re: The National Collegiate Student Loan Trust 2004-1, Class A-4, Class A-IO-1 and Class A-IO-2 Notes ---------------------------------------------- Ladies and Gentlemen: This certificate is delivered pursuant to Section 2.04 of the Indenture, dated as of June 1, 2004 (the "Agreement"), between The National Collegiate Student Loan Trust 2003-1, as Issuer (the "Issuer"), and U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"), in connection with the transfer by the undersigned (the "Transferor") to _________________ (the "Transferee") of $__________________ current principal amount of Class ___ Notes, in fully registered form (each, an "Individual Note"), or a beneficial interest of such aggregate current principal amount in the Regulation S Global Note (the "Global Note") maintained by The Depository Trust Company or its successor as Depository under the Agreement (such transferred interest, in either form, being the "Transferred Interest"). In connection with such transfer, the Transferor does hereby certify that such transfer has been effected in accordance with the transfer restrictions set forth in the Agreement and the Notes and (i) with respect to transfers made in accordance with Regulation S ("Regulation S") promulgated under the Securities Act of 1933, as amended (the "Securities Act"), the Transferor does hereby certify that: 1. the offer of the Transferred Interest was not made to a person in the United States; 2. [at the time the buy order was originated, the Transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the Transferee was outside the United States] [the transaction was executed in, on or through the facilities of a designated offshore securities H-1 market and neither the undersigned nor any person acting on its behalf knows that the transaction was pre-arranged with a buyer in the United States]; 3. the transferee is not a U.S. Person within the meaning of Rule 902(o) of Regulation S nor a person acting for the account or benefit of a U.S. Person, and upon completion of the transaction, the Transferred Interest will be held with the Depository through [Euroclear] [Clearstream]; 4. no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and 5. the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act. or (ii) with respect to transfers made in reliance on Rule 144 under the Securities Act, the Transferor does hereby certify that the Certificates that are being transferred are not "restricted securities" as defined in Rule 144 under the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Indenture Trustee and the Issuer. [Insert Name of Transferor] By:_______________________________ Name: Title: Dated: H-2 EXHIBIT I --------- FORM CERTIFICATION TO BE PROVIDED TO DEPOSITOR BY THE INDENTURE TRUSTEE Re: The National Collegiate Funding LLC The undersigned, U.S. Bank National Association, solely in its capacity as Indenture Trustee under that certain Indenture dated as of June 1, 2004 (the "Indenture") between The National Collegiate Student Loan Trust 2004-1 and U.S. Bank National Association, hereby certifies that: 1. The Indenture Trustee has reviewed the annual report on Form 10-K for the fiscal year [____], and all reports on Form 8-K containing distribution reports filed in respect of periods included in the year covered by that annual report, of the Registrant relating to the above-referenced trust; 2. Subject to paragraph 4 below and based on the knowledge of the officer of the Indenture Trustee signing this certification, the information in the distribution reports prepared by the Indenture Trustee, taken as a whole, does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by that annual report; and 3. Based on the Indenture Trustee's knowledge, the distribution or servicing information required to be provided by the Indenture Trustee under the Indenture, to the extent received by the Indenture Trustee from the Administrator, is included in these distribution reports. 4. In compiling the information in the distribution reports and making the foregoing certifications, the Indenture Trustee has relied upon information furnished to it by the Administrator under the Indenture. The Indenture Trustee shall have no responsibility or liability for any inaccuracy in such reports resulting from information so provided to it by the Administrator. 5. For purposes of this certificate, an officer shall mean any officer of the Indenture Trustee with direct responsibility for the administration of the Indenture, and shall also mean, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge and familiarity with the particular subject. I-1 Capitalized terms used and not defined herein shall have the meanings given to such terms in the Indenture. Date: U.S.Bank National Association, solely in its capacity as Indenture Trustee By: ------------------------ Name: Title: I-2 EX-5.1 4 ncf_ex5-1.txt OPINION OF THACHER PROFFITT & WOOD LLP EXHIBIT 5.1 [LETTERHEAD OF THACHER PROFFITT & WOOD LLP] June 10, 2004 To Each of the Parties Listed on SCHEDULE A Attached Hereto Opinion: Indenture The National Collegiate Student Loan Trust 2004-1 ------------------------------------------------- Ladies and Gentlemen: We have acted as counsel to The National Collegiate Student Loan Trust 2004-1, a Delaware statutory trust (the "Trust"), The National Collegiate Funding LLC (the "Depositor"), The First Marblehead Corporation ("FMC") and First Marblehead Data Services, Inc. ("FMDS") as to certain matters in connection with (i) the Student Loan Purchase Agreements listed on Schedule D (each, a "Student Loan Purchase Agreement"), each among a bank listed on Schedule B (each, a "Bank") as originator pursuant to the student loan programs listed on Schedule C and seller of student loans (each, a "Student Loan") and FMC, and the Pool Supplements thereto listed on Schedule E (each, a "Pool Supplement"), each among a Bank, FMC, the Trust and the Depositor, (ii) the Deposit and Sale Agreement, dated as of June 10, 2004 (the "Deposit and Sale Agreement"), between the Depositor and the Trust, (iii) the Indenture, dated as of June 1, 2004 (the "Indenture"), between the Trust and U.S. Bank National Association (the "Indenture Trustee"), and the Student Loan Asset Backed Notes Series 2004-1 (the "Notes") issued pursuant thereto, (iv) each of the Guaranty Agreements listed on Schedule F (each, a "Guaranty Agreement"), each between The Education Resources Institute, Inc. ("TERI") and a Bank, (v) each of the Deposit and Security Agreements, Security Agreements and Control Agreements listed on Schedule G (each, a "Deposit Agreement"), (vi) the Deposit and Security Agreement, dated as of June 10, 2004 (the "Security Agreement"), among TERI, the Trust and FMDS, (vii) each of the Custodial Agreements listed on Schedule H (each, a "Custodial Agreement"), each among the Trust, the Indenture Trustee and, respectively, the Pennsylvania Higher Education Assistance Agency ("PHEAA"), Great Lakes Educational Loan Services, Inc. and Nelnet Loan Services, Inc. (each, a "Custodian"), (viii) each Servicing Agreement listed on Schedule I (each, a "Servicing Agreement"), each between a Custodian and FMC, (ix) each Servicer Consent Letter listed on Schedule J (each a "Servicer Consent Letter"), each among a The National Collegiate Student Loan Trust 2004-1 Page 2. June 10, 2004 Custodian, FMC and the Trust, (x) the Interim Trust Agreement, dated as of May 13, 2004, between Wachovia Trust Company, National Association (the "Owner Trustee") and the Depositor, as amended and restated by the Trust Agreement, dated as of June 10, 2004 (as amended and restated, the "Trust Agreement"), among the Owner Trustee, the Depositor and TERI, and the owner trust certificates issued pursuant thereto (the "Owner Trust Certificates"), (xi) the Administration Agreement, dated as of June 10, 2004 (the "Administration Agreement"), between the Trust and FMDS, (xii) the Underwriting Agreement, dated as of June 7, 2004 (the "Underwriting Agreement"), among the Trust, UBS Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs & Co. and The First Marblehead Corporation (collectively, the "Underwriters"), (xiii) the Acknowledgment of Guaranty Agreements, dated as of June 10, 2004 (the "Acknowledgment"), by TERI, (xiv) the Structuring Advisory Agreement, dated as of June 10, 2004 (the "Structuring Agreement"), between the Trust and FMC, (xv) each Loan Origination Agreement listed on Schedule K (each, an "Origination Agreement"), (xvi) each Broker-Dealer Agreement listed on Schedule L (each, a "Broker-Dealer Agreement"), (xvii) each Market Agent Agreement listed on Schedule M (each, a "Market Agent Agreement"), (xviii) the Auction Agency Agreement, dated as of June 1, 2004 (the "Auction Agency Agreement"), among the Indenture Trustee, the Trust, The Bank of New York and FMDS, (xix) the Back-up Note Administration Agreement, dated as of June 10, 2004 (the "Back-up Note Administration Agreement"), among the Trust, FMDS, the Owner Trustee and the Indenture Trustee, (xx) the Base Prospectus, dated May 14, 2004 (the "Base Prospectus"), the related Preliminary Prospectus Supplement, dated May 14, 2004 (the "Preliminary Prospectus Supplement") and the related Prospectus Supplement, dated June 7, 2004 (together with the Preliminary Prospectus Supplement, the "Prospectus Supplement"; together with the Base Prospectus, the "Prospectus"), (xxi) Registration Statement No. 333-113336 filed with the U.S. Securities and Exchange Commission (the "Registration Statement"), (xxii) the Grantor Trust Agreement, dated as of June 10, 2004 (the "Grantor Trust Agreement"), between the Depositor and U.S. Bank National Association (the "Grantor Trustee") creating NCF Grantor Trust 2004-1 (the "Grantor Trust"), and the Grantor Trust Certificates (the "Grantor Trust Certificates") issued pursuant thereto, (xxiii) the Certificate Purchase Agreement, dated as of June 10, 2004 (the "DB Certificate Purchase Agreement"), between the Depositor and Newport Funding Corp. (an "Initial Purchaser") and (xxiv) the Certificate Purchase Agreement, dated as of June 10, 2004, (the "UBS Certificate Purchase Agreement"; together with the DB Certificate Purchase Agreement, the "Certificate Purchase Agreements") between the Depositor and UBS Securities LLC (in such capacity an "Initial Purchaser"). Each Student Loan Purchase Agreement, each Pool Supplement, the Deposit and Sale Agreement, the Indenture, each Guaranty Agreement, each Deposit Agreement, the Security Agreement, each Custodial Agreement, each Servicing Agreement, each Servicer Consent Letter, the Trust Agreement, the Administration Agreement, the Underwriting Agreement, the Acknowledgment, the Structuring Agreement, each Origination Agreement, each Broker-Dealer Agreement, each Market Agent Agreement, the Auction Agency Agreement, the Back-up Note Administration Agreement, Grantor Trust Agreement, and the Certificate Purchase Agreements are collectively referred to herein as the "Agreements." Capitalized terms not defined herein have the meanings assigned to them in Appendix A to the Indenture. This opinion is being delivered pursuant to Section 6 of the Underwriting Agreement. The National Collegiate Student Loan Trust 2004-1 Page 3. June 10, 2004 In rendering this opinion letter, as to relevant factual matters we have examined the documents described above and such other documents as we have deemed necessary including, where we have deemed appropriate, representations or certifications of officers of parties thereto or public officials. In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, with your permission we have assumed, and are relying thereon without independent investigation, (i) the authenticity of all documents submitted to us as originals or as copies thereof, and the conformity to the originals of all documents submitted to us as copies, (ii) the necessary entity formation and continuing existence in the jurisdiction of formation, and the necessary licensing and qualification in all jurisdictions, of all parties to all documents, (iii) the necessary authorization, execution, delivery and enforceability of all documents, and the necessary entity power with respect thereto, and (iv) that there is not any other agreement that modifies or supplements the agreements expressed in any document to which this opinion letter relates and that renders any of the opinions expressed below inconsistent with such document as so modified or supplemented. In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, we have made no inquiry, have conducted no investigation and assume no responsibility with respect to (a) the accuracy of and compliance by the parties thereto with the representations, warranties and covenants as to factual matters contained in any document or (b) the conformity of the underlying assets and related documents to the requirements of any agreement to which this opinion letter relates. In rendering this opinion letter, any opinion expressed herein with respect to the enforceability of any right or obligation is subject to (i) general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance and injunctive relief, regardless of whether considered in a proceeding in equity or at law, (ii) bankruptcy, insolvency, receivership, reorganization, liquidation, voidable preference, fraudulent conveyance and transfer, moratorium and other similar laws affecting the rights of creditors or secured parties, (iii) the effect of certain laws, regulations and judicial and other decisions upon (a) the availability and enforceability of certain remedies, including the remedies of specific performance and self-help, and provisions purporting to waive the obligation of good faith, materiality, fair dealing, diligence, reasonableness or objection to judicial jurisdiction, venue or forum and (b) the enforceability of any provision the violation of which would not have any material adverse effect on the performance by any party of its obligations under any agreement and (iv) public policy considerations underlying United States federal securities laws, to the extent that such public policy considerations limit the enforceability of any provision of any agreement which purports or is construed to provide indemnification with respect to securities law violations. However, the non-enforceability of any provisions referred to in foregoing clause (iii) will not, taken as a whole, materially interfere with the practical realization of the benefits of the rights and remedies included in any such agreement which is the subject of any opinion expressed below, except for the consequences of any judicial, administrative, procedural or other delay which may be imposed by, relate to or arise from applicable laws, equitable principles and interpretations thereof. The National Collegiate Student Loan Trust 2004-1 Page 4. June 10, 2004 This opinion letter is based upon our review of the documents referred to herein. We have conducted no independent investigation with respect to the facts contained in such documents and relied upon in rendering this opinion letter. We also note that we do not represent any of the parties to the transactions to which this opinion letter relates or any of their affiliates in connection with matters other than certain transactions. However, the attorneys in this firm who are directly involved in the representation of parties to the transactions to which this opinion letter relates have no actual present knowledge of the inaccuracy of any fact relied upon in rendering this opinion letter. In addition, if we indicate herein that any opinion is based on our knowledge, our opinion is based solely on the actual present knowledge of such attorneys. In rendering this opinion letter, we do not express any opinion concerning any law other than the laws of the State of New York, the Limited Liability Company Act of the State of Delaware, Chapter 38 of Title 12 of the State of Delaware Code relating to the "Treatment of Delaware Statutory Trusts" (the "Delaware Statutory Trust Law") and the federal laws of the United States, including without limitation the Securities Act of 1933, as amended (the "1933 Act"). We do not express any opinion herein with respect to any matter not specifically addressed in the opinions expressed below, including without limitation (i) any statute, regulation or provision of law of any county, municipality or other political subdivision or any agency or instrumentality thereof or (ii) the securities or tax laws of any jurisdiction. Based upon and subject to the foregoing, it is our opinion that: 1. The Trust has been legally formed under the laws of the State of Delaware and, based upon a certificate of good standing issued by that State, is validly existing as a statutory trust in good standing under the laws of that State, and has the requisite entity power and authority to execute and deliver each Agreement to which it is a party and to perform its obligations thereunder. 2. The Depositor has been legally formed under the laws of the State of Delaware and, based upon a certificate of good standing issued by that State, is validly existing as a limited liability company in good standing under the laws of that State, and has the requisite entity power and authority to execute and deliver each Agreement to which it is a party and to perform its obligations thereunder. 3. Each of the Agreements to which the Trust, FMC or the Depositor is a party has been duly authorized, executed and delivered by such party. The issuance, offer, sale and delivery of the Notes have been duly authorized by the Trust. 4. Each of the Agreements to which the Trust, the Depositor, FMC or FMDS is a party (to the extent that the laws of the State of New York are designated therein as the governing law thereof), assuming the necessary authorization, execution and delivery thereof by the parties thereto (other than any party as to which we opine to that effect herein) and the enforceability thereof against the other parties thereto, is a valid and legally binding agreement under the laws of the State of New York, enforceable thereunder in accordance with its terms against the Trust, the Depositor, FMC or FMDS, as the case may be. The National Collegiate Student Loan Trust 2004-1 Page 5. June 10, 2004 5. The Notes, assuming the necessary authorization, execution, authentication and delivery thereof and payment therefor in accordance with the applicable Agreements, are valid and legally binding obligations under the laws of the State of New York, enforceable thereunder in accordance with their terms against the Trust, and are entitled to the benefits of the Indenture. 6. With respect to each of the Trust, the Depositor, FMC and FMDS, the performance of its obligations under each of the Agreements to which it is a party and the consummation of the transactions contemplated thereby will not result in (i) any breach or violation of its certificate of trust or trust agreement, certificate of formation or limited liability company agreement or certificate of incorporation or bylaws, as the case may be, (ii) to our knowledge, any breach, violation or acceleration of or default under any indenture or other material agreement or instrument to which it is a party or by which it is bound or (iii) to our knowledge, any order of any United States federal or State of New York court, agency or other governmental body. 7. With respect to each of the Trust, the Depositor and FMC, to our knowledge, there is no legal action, suit, proceeding or investigation before any court, agency or other governmental body pending or threatened (by written communication to it of a present intention to initiate such action, suit or proceeding) against it, which, either in one instance or in the aggregate, draws into question the validity of, seeks to prevent the consummation of any of the transactions contemplated by or would impair materially its ability to perform its obligations under any of the Agreements to which it is a party. 8. With respect to each of the Trust, the Depositor and FMC, the performance of its obligations under each of the Agreements to which it is a party and the consummation of the transactions contemplated thereby do not require any consent, approval, authorization or order of, filing with or notice to any United States federal or State of New York court, agency or other governmental body under any United States federal or State of New York statute or regulation applicable to the Agreements, except such as may be required under the securities laws of any State of the United States or such as have been obtained, effected or given. 9. With respect to each of the Trust, the Depositor, FMC and FMDS, the performance of its obligations under each of the Agreements to which it is a party and the consummation of the transactions contemplated thereby will not result in any breach or violation of any United States federal or State of New York statute or regulation applicable to the Agreements. 10. The statements made in the Base Prospectus and Prospectus Supplement under the heading "ERISA Considerations", to the extent that they constitute matters of United States federal law or legal conclusions with respect thereto, while not purporting to discuss all possible consequences of investment in the Notes offered The National Collegiate Student Loan Trust 2004-1 Page 6. June 10, 2004 thereby, are correct in all material respects with respect to those consequences or matters that are discussed therein. 11. The Registration Statement has become effective under the 1933 Act. In that regard, this is to inform you that, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and not withdrawn, and no proceedings for that purpose have been instituted or threatened under Section 8(d) of the 1933 Act. 12. The Registration Statement as of its effective date, the date of the Prospectus Supplement and the date hereof, and the Base Prospectus as of the date of the Prospectus Supplement and the date hereof, other than any financial and statistical information contained or incorporated by reference therein as to which we express no opinion herein, complied as to form in all material respects with the requirements of the 1933 Act and the applicable rules and regulations thereunder. 13. To our knowledge, there are no material contracts, indentures or other documents of a character required to be described or referred to in either the Registration Statement or the Base Prospectus or to be filed as exhibits to the Registration Statement, and those described or referred to therein or filed or incorporated by reference as exhibits thereto. 14. The Indenture has been qualified under the Trust Indenture Act of 1939, as amended. Neither the Trust nor the Indenture Trust Estate created by the Indenture is an "investment company" or "controlled by" an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 15. Under ss. 3805(b) of the Delaware Statutory Trust Law, no creditor of any holder of an Owner Trust Certificate shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the Trust except in accordance with the terms of the Trust Agreement. 16. Under the Delaware Statutory Trust Law, the Trust is a separate legal entity and, assuming that the Student Loan Purchase Agreements, the related Pool Supplements and the Deposit and Sale Agreement convey good title to the Student Loans to the Trust as a true sale and not as a financing security arrangement, the Trust rather than a holder of an Owner Trust Certificate will hold whatever title to the Student Loans is conveyed to it pursuant to the Student Loan Purchase Agreements, the related Pool Supplements and the Deposit and Sale Agreement, except to the extent that the Trust has taken action to dispose of or otherwise transfer or encumber any part of the Student Loans. 17. Each Owner Trust Certificate, assuming the necessary authorization, execution, authentication and delivery thereof and payment therefore in accordance with the The National Collegiate Student Loan Trust 2004-1 Page 7. June 10, 2004 applicable Agreements, has been duly executed by the Trust and is validly issued and entitled to the benefits of the Trust Agreement. This opinion letter is rendered for the sole benefit of each addressee hereof with respect to the matters specifically addressed herein, and no other person or entity is entitled to rely hereon. Copies of this opinion letter may not be made available, and this opinion letter may not be quoted or referred to in any other document made available, to any other person or entity except (i) to any applicable rating agency, institution providing credit enhancement or liquidity support or governmental authority, (ii) to any accountant or attorney for any person or entity entitled hereunder to rely hereon or to whom or which this opinion letter may be made available as provided herein and (iii) as otherwise required by law; provided that none of the foregoing is entitled to rely hereon unless an addressee hereof. We assume no obligation to revise, supplement or withdraw this opinion letter, or otherwise inform any addressee hereof or other person or entity, with respect to any change occurring subsequent to the delivery hereof in any applicable fact or law or any judicial or administrative interpretation thereof, even though such change may affect a legal analysis or conclusion contained herein. In addition, no attorney-client relationship exists or has existed by reason of this opinion letter between our firm and any addressee hereof or other person or entity except for any addressee that is identified in the first paragraph hereof as a person or entity for which we have acted as counsel in rendering this opinion letter. In permitting reliance hereon by any person or entity other than such an addressee for which we have acted as counsel, we are not acting as counsel for such other person or entity and have not assumed and are not assuming any responsibility to advise such other person or entity with respect to the adequacy of this opinion letter for its purposes. Very truly yours, /s/ Thacher Proffitt & Wood LLP SCHEDULE A Ambac Assurance Corporation One State Street Plaza New York, New York 10004 UBS Securities LLC 1285 Avenue of the Americas, 11th Floor New York, New York 10019 Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005 Citigroup Global Markets Inc. 388 Greenwich Street, 35th Floor New York, New York 10013 Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Fitch, Inc. One State Street Plaza New York, New York 10004 Moody's Investors Service, Inc. 99 Church Street New York, New York 10007 Standard & Poor's 55 Water Street, 40th Floor New York, New York 10004 U.S. Bank National Association Corporate Trust Services-SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Wachovia Trust Company, National Association One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 EX-8.1 5 ncf_ex8-1.txt OPINION OF THACHER PROFFITT & WOOD LLP EXHIBIT 8.1 [LETTERHEAD OF THACHER PROFFITT & WOOD LLP] June 10, 2004 To Each of the Parties Listed on SCHEDULE A Attached Hereto Opinion: Tax The National Collegiate Student Loan Trust 2004-1 ------------------------------------------------- Ladies and Gentlemen: We have acted as counsel to The National Collegiate Student Loan Trust 2004-1, a Delaware statutory trust (the "Trust"), The National Collegiate Funding LLC (the "Depositor"), The First Marblehead Corporation ("FMC") and First Marblehead Data Services, Inc. ("FMDS") as to certain matters in connection with (i) the Student Loan Purchase Agreements listed on Schedule D (each, a "Student Loan Purchase Agreement"), each among a bank listed on Schedule B (each, a "Bank") as originator pursuant to the student loan programs listed on Schedule C and seller of student loans (each, a "Student Loan") and FMC, and the Pool Supplements thereto listed on Schedule E (each, a "Pool Supplement"), each among a Bank, FMC, the Trust and the Depositor, (ii) the Deposit and Sale Agreement, dated as of June 10, 2004 (the "Deposit and Sale Agreement"), between the Depositor and the Trust, (iii) the Indenture, dated as of June 1, 2004 (the "Indenture"), between the Trust and U.S. Bank National Association (the "Indenture Trustee"), and the Student Loan Asset Backed Notes Series 2004-1 (the "Notes") issued pursuant thereto, (iv) each of the Guaranty Agreements listed on Schedule F (each, a "Guaranty Agreement"), each between The Education Resources Institute, Inc. ("TERI") and a Bank, (v) each of the Deposit and Security Agreements, Security Agreements and Control Agreements listed on Schedule G (each, a "Deposit Agreement"), (vi) the Deposit and Security Agreement, dated as of June 10, 2004 (the "Security Agreement"), among TERI, the Trust and FMDS, (vii) each of the Custodial Agreements listed on Schedule H (each, a "Custodial Agreement"), each among the Trust, the Indenture Trustee and, respectively, the Pennsylvania Higher Education Assistance Agency ("PHEAA"), Great Lakes Educational Loan Services, Inc. and Nelnet Loan Services, Inc. (each, a "Custodian"), (viii) each Servicing Agreement listed on Schedule I (each, a "Servicing Agreement"), each between a Custodian and FMC, (ix) each Servicer Consent Letter listed on Schedule J (each a "Servicer Consent Letter"), each among a Custodian, FMC and the Trust, (x) the Interim Trust Agreement, dated as of May 13, 2004, between Wachovia Trust Company, National Association (the "Owner Trustee") and the Depositor, as amended and restated by the Trust Agreement, dated as of June 10, 2004 (as amended and restated, the "Trust Agreement"), among the Owner Trustee, the Depositor and TERI, and the owner trust certificates issued pursuant thereto (the "Owner Trust Certificates"), (xi) the Administration Agreement, The National Collegiate Student Loan Trust 2004-1 Page 2. June 10, 2004 dated as of June 10, 2004 (the "Administration Agreement"), between the Trust and FMDS, (xii) the Underwriting Agreement, dated as of June 7, 2004 (the "Underwriting Agreement"), among the Trust, UBS Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs & Co. and The First Marblehead Corporation (collectively, the "Underwriters"), (xiii) the Acknowledgment of Guaranty Agreements, dated as of June 10, 2004 (the "Acknowledgment"), by TERI, (xiv) the Structuring Advisory Agreement, dated as of June 10, 2004 (the "Structuring Agreement"), between the Trust and FMC, (xv) each Loan Origination Agreement listed on Schedule K (each, an "Origination Agreement"), (xvi) each Broker-Dealer Agreement listed on Schedule L (each, a "Broker-Dealer Agreement"), (xvii) each Market Agent Agreement listed on Schedule M (each, a "Market Agent Agreement"), (xviii) the Auction Agency Agreement, dated as of June 1, 2004 (the "Auction Agency Agreement"), among the Indenture Trustee, the Trust, The Bank of New York and FMDS, (xix) the Back-up Note Administration Agreement, dated as of June 10, 2004 (the "Back-up Note Administration Agreement"), among the Trust, FMDS, the Owner Trustee and the Indenture Trustee, (xx) the Base Prospectus, dated May 14, 2004 (the "Base Prospectus"), the related Preliminary Prospectus Supplement, dated May 14, 2004 (the "Preliminary Prospectus Supplement") and the related Prospectus Supplement, dated June 7, 2004 (together with the Preliminary Prospectus Supplement, the "Prospectus Supplement"; together with the Base Prospectus, the "Prospectus"), (xxi) Registration Statement No. 333-113336 filed with the U.S. Securities and Exchange Commission (the "Registration Statement"), (xxii) the Grantor Trust Agreement, dated as of June 10, 2004 (the "Grantor Trust Agreement"), between the Depositor and U.S. Bank National Association (the "Grantor Trustee") creating NCF Grantor Trust 2004-1 (the "Grantor Trust"), and the Grantor Trust Certificates (the "Grantor Trust Certificates") issued pursuant thereto, (xxiii) the Certificate Purchase Agreement, dated as of June 10, 2004 (the "DB Certificate Purchase Agreement"), between the Depositor and Newport Funding Corp. (an "Initial Purchaser") and (xxiv) the Certificate Purchase Agreement, dated as of June 10, 2004, (the "UBS Certificate Purchase Agreement"; together with the DB Certificate Purchase Agreement, the "Certificate Purchase Agreements") between the Depositor and UBS Securities LLC (in such capacity an "Initial Purchaser"). Each Student Loan Purchase Agreement, each Pool Supplement, the Deposit and Sale Agreement, the Indenture, each Guaranty Agreement, each Deposit Agreement, the Security Agreement, each Custodial Agreement, each Servicing Agreement, each Servicer Consent Letter, the Trust Agreement, the Administration Agreement, the Underwriting Agreement, the Acknowledgment, the Structuring Agreement, each Origination Agreement, each Broker-Dealer Agreement, each Market Agent Agreement, the Auction Agency Agreement, the Back-up Note Administration Agreement, Grantor Trust Agreement, and the Certificate Purchase Agreements are collectively referred to herein as the "Agreements." Capitalized terms not defined herein have the meanings assigned to them in Appendix A to the Indenture. This opinion is being delivered pursuant to Section 6 of the Underwriting Agreement. The Depositor is causing the Grantor Trust Certificates to be issued pursuant to the Grantor Trust Agreement. The Depositor is selling the Grantor Trust Certificates to the Initial Purchasers pursuant to the Certificate Purchase Agreements. The Grantor Trust Certificates represent the entire beneficial interest in the trust fund (the "Trust Fund") consisting of certain of the Notes (the Class A-4 Notes, the Class A-IO-1 Notes and the Class A-IO-2 Notes, (the "Deposit Notes")). On the Closing Date, the Depositor is transferring the Deposit Notes to the The National Collegiate Student Loan Trust 2004-1 Page 3. June 10, 2004 Grantor Trust and receiving the Grantor Trust Certificates evidencing the entire beneficial ownership interest in the Trust Fund. In rendering this opinion letter, as to relevant factual matters we have examined the documents described above and such other documents as we have deemed necessary including, where we have deemed appropriate, representations or certifications of officers of parties thereto or public officials. In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, with your permission we have assumed, and are relying thereon without independent investigation, (i) the authenticity of all documents submitted to us as originals or as copies thereof, and the conformity to the originals of all documents submitted to us as copies, (ii) the necessary entity formation and continuing existence in the jurisdiction of formation, and the necessary licensing and qualification in all jurisdictions, of all parties to all documents, (iii) the necessary authorization, execution, delivery and enforceability of all documents, and the necessary entity power with respect thereto, and (iv) that there is not any other agreement that modifies or supplements the agreements expressed in any document to which this opinion letter relates and that renders any of the opinions expressed below inconsistent with such document as so modified or supplemented. In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, we have made no inquiry, have conducted no investigation and assume no responsibility with respect to (a) the accuracy of and compliance by the parties thereto with the representations, warranties and covenants as to factual matters contained in any document or (b) the conformity of the underlying assets and related documents to the requirements of any agreement to which this opinion letter relates. This opinion letter is based upon our review of the documents referred to herein. We have conducted no independent investigation with respect to the facts contained in such documents and relied upon in rendering this opinion letter. We also note that we do not represent any of the parties to the transactions to which this opinion letter relates or any of their affiliates in connection with matters other than certain transactions. However, the attorneys in this firm who are directly involved in the representation of parties to the transactions to which this opinion letter relates have no actual present knowledge of the inaccuracy of any fact relied upon in rendering this opinion letter. In rendering this opinion letter, we do not express any opinion concerning any law other than the federal income tax laws of the United States, including without limitation the Internal Revenue Code of 1986, as amended (the "Code"). We do not express any opinion herein with respect to any matter not specifically addressed in the opinions expressed below, including without limitation (i) any statute, regulation or provision of law of any county, municipality or other political subdivision or any agency or instrumentality thereof or (ii) the securities or tax laws of any jurisdiction. The tax opinions set forth below are based upon the existing provisions of applicable law and regulations issued or proposed thereunder, published rulings and releases of applicable agencies or other governmental bodies and existing case law, any of which or the effect of any of which could change at any time. Any such changes may be retroactive in application and could modify the legal conclusions upon which such opinions are based. The opinions expressed The National Collegiate Student Loan Trust 2004-1 Page 4. June 10, 2004 herein are limited as described below, and we do not express any opinion on any other legal or income tax aspect of the transactions contemplated by the documents relating to the transaction. Based upon and subject to the foregoing, it is our opinion that: 1. The statements made in the Base Prospectus and Prospectus Supplement under the heading "U.S. Federal Income Tax Consequences", to the extent that they constitute matters of law or legal conclusions with respect thereto, while not purporting to discuss all possible consequences of investment in the Notes offered thereby, are correct in all material respects with respect to those consequences or matters that are discussed therein. 2. For United States federal income tax purposes, assuming the accuracy of and compliance with the representations, covenants and other provisions of the Agreements without any waiver or modification thereof, although there are no regulations, rulings or judicial precedents addressing the characterization for federal income tax purposes of securities having terms substantially the same as those of the Notes, the Notes will be treated as indebtedness of the Trust, and not as ownership interests in the Trust or in a separate association taxable as a corporation, and the Trust will not be classified as an association taxable as a corporation. This opinion is based on the assumption that: one person will acquire at original issuance both the Class A-4 Notes, the Class A-IO-1 Notes and the Class A-IO-2 Notes in their entirety, that such person has agreed that it will subsequently sell its interest in such Notes only through a sale of a pro rata share of its interest in each such Class (and will require subsequent purchasers to agree to the same limitation), and such person and the Indenture Trustee have agreed to treat the two Classes of Notes as a single debt obligation for all federal income tax purposes. This opinion letter is rendered for the sole benefit of each addressee hereof with respect to the matters specifically addressed herein, and no other person or entity is entitled to rely hereon. Copies of this opinion letter may not be made available, and this opinion letter may not be quoted or referred to in any other document made available, to any other person or entity except (i) to any applicable rating agency, institution providing credit enhancement or liquidity support or governmental authority, (ii) to any accountant or attorney for any person or entity entitled hereunder to rely hereon or to whom or which this opinion letter may be made available as provided herein, (iii) to any and all persons, without limitation, in connection with the disclosure of the tax treatment and tax structure of the transaction (as defined in Treasury regulation section 1.6011-4) and (iv) as otherwise required by law; provided that none of the foregoing is entitled to rely hereon unless an addressee hereof. We assume no obligation to revise, supplement or withdraw this opinion letter, or otherwise inform any addressee hereof or other person or entity, with respect to any change occurring subsequent to the delivery hereof in any applicable fact or law or any judicial or administrative interpretation thereof, even though such change may affect a legal analysis or conclusion contained herein. In addition, no attorney-client relationship exists or has existed by reason of this opinion letter between our firm and any addressee hereof or other person or entity except for any addressee that is identified in the first The National Collegiate Student Loan Trust 2004-1 Page 5. June 10, 2004 paragraph hereof as a person or entity for which we have acted as counsel in rendering this opinion letter. In permitting reliance hereon by any person or entity other than such an addressee for which we have acted as counsel, we are not acting as counsel for such other person or entity and have not assumed and are not assuming any responsibility to advise such other person or entity with respect to the adequacy of this opinion letter for its purposes. Very truly yours, /s/ Thacher Proffitt & Wood LLP SCHEDULE A Ambac Assurance Corporation One State Street Plaza New York, New York 10004 UBS Securities LLC 1285 Avenue of the Americas, 11th Floor New York, New York 10019 Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005 Citigroup Global Markets Inc. 388 Greenwich Street, 35th Floor New York, New York 10013 Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Fitch, Inc. One State Street Plaza New York, New York 10004 Moody's Investors Service, Inc. 99 Church Street New York, New York 10007 Standard & Poor's 55 Water Street, 40th Floor New York, New York 10004 U.S. Bank National Association Corporate Trust Services-SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Wachovia Trust Company, National Association One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 EX-10.4 6 ncf_ex10-4.txt DEPOSIT AND SALE AGREEMENT EXHIBIT 10.4 DEPOSIT AND SALE AGREEMENT THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 This Deposit and Sale Agreement (the "SALE AGREEMENT"), dated as of June 10, 2004, between The National Collegiate Funding LLC, in its capacity as seller (in such capacity, the "SELLER"), and The National Collegiate Student Loan Trust 2004-1, as purchaser (the "PURCHASER"), shall be effective upon execution by the parties hereto. WHEREAS, the Seller is the owner of certain student loans; and WHEREAS, the Seller desires to sell its interest in such student loans and the Purchaser desires to purchase such loans from the Seller. NOW, THEREFORE, in connection with the mutual promises contained herein, the parties hereto agree as follows: ARTICLE I TERMS This Sale Agreement sets forth the terms under which the Seller is selling and the Purchaser is purchasing the student loans listed on Schedule 2 to each of the Pool Supplements set forth on SCHEDULE A attached hereto (the "TRANSFERRED STUDENT LOANS"). ARTICLE II DEFINITIONS Capitalized terms used but not otherwise defined herein shall have the definitions set forth in Appendix A of the Indenture dated as of June 1, 2004 between U.S. Bank National Association (the "INDENTURE TRUSTEE") and the Purchaser. ARTICLE III SALE AND PURCHASE Section 3.01. SALE OF LOANS. The Seller hereby sells and the Purchaser hereby purchases the Transferred Student Loans. Section 3.02. ASSIGNMENT OF RIGHTS. The Seller hereby assigns to the Purchaser and the Purchaser hereby accepts all of the Seller's rights and interests under each of the Pool Supplements listed on SCHEDULE A attached hereto and the related Student Loan Purchase Agreements listed on SCHEDULE B attached hereto. Section 3.03. SETTLEMENT OF THE PAYMENT. The Purchaser shall pay the Seller the purchase price set forth in Schedule 1 of each of the Pool Supplements by wire transfer in immediately available funds to the account specified by the Seller. In addition, the Purchaser will also issue the Class A-4 Notes, the Class A-IO-1 Notes and the Class A-IO-2 Notes to the Seller pursuant to the Indenture. Section 3.04. ASSISTANCE BY SELLER. Following the execution of this Sale Agreement, the Seller shall provide any reasonable assistance requested by the Purchaser in determining that all required documentation on the Transferred Student Loans is present and correct. ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER Section 4.01. GENERAL. The Seller represents and warrants to the Purchaser that as of the date of this Sale Agreement: (a) The Seller is duly organized and existing under the laws of the State of Delaware; and (b) The Seller has all requisite power and authority to enter into and to perform the terms of this Sale Agreement. Section 4.02. LOAN REPRESENTATIONS. The Seller represents and warrants to the Purchaser that with respect to each Transferred Student Loan purchased by the Purchaser pursuant to this Sale Agreement, the Seller is making the same representations and warranties made by the respective program lender with respect to each Transferred Student Loan pursuant to the respective Student Loan Purchase Agreement listed on SCHEDULE B attached hereto. Section 4.03. COVENANTS. The Seller, in its capacity as purchaser of the Transferred Student Loans pursuant to the Pool Supplements, hereby covenants that it will enforce the covenants and agreements of each program lender in the respective Student Loan Purchase Agreement and related Pool Supplement. The Seller further covenants that it will not waive, amend, modify, supplement or terminate any Student Loan Purchase Agreement or Pool Supplement or any provision thereof without the consent of the Purchaser, which consent the Purchaser hereby agrees not to provide without the prior written consent of the Indenture Trustee and the Interested Noteholders in accordance with the Purchaser's covenant in Section 3.07(c) of the Indenture. ARTICLE V PURCHASE OF LOANS; REIMBURSEMENT Each party to this Sale Agreement shall give notice to the other such parties and to the Servicers, First Marblehead Data Services, Inc. and Wachovia Trust Company, National Association (the "OWNER TRUSTEE") promptly, in writing, upon the discovery of any breach of the Seller's representations and warranties made pursuant to this Sale Agreement which has a materially adverse effect on the interest of the Purchaser in any Transferred Student Loan. In the event of such a material breach, the Seller shall cure or repurchase the Transferred Student Loan in accordance with the remedies set forth in the respective Student Loan Purchase Agreement. ARTICLE VI LIABILITY OF SELLER; INDEMNITIES The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Sale Agreement. 2 (a) The Seller shall indemnify, defend and hold harmless the Purchaser and the Owner Trustee in its individual capacity and their officers, directors, employees and agents from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the other Basic Documents (except any such income taxes arising out of fees paid to the Owner Trustee), including any sales, gross receipts, general corporation, tangible and intangible personal property, privilege or license taxes and costs and expenses in defending against the same. (b) The Seller shall indemnify, defend and hold harmless the Purchaser and the Owner Trustee in its individual capacity and their officers, directors, employees and agents of the Purchaser and the Owner Trustee from and against any and all costs, expenses, losses, claims, damages and liabilities arising out of, or imposed upon such Person through, the Seller's willful misfeasance, bad faith or gross negligence in the performance of its duties under this Sale Agreement, or by reason of reckless disregard of its obligations and duties under this Sale Agreement. Indemnification under this Section shall survive the termination of this Sale Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Seller shall have made any indemnity payments pursuant to this Section and the Person to or for the benefit of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Seller, without interest. ARTICLE VII MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF SELLER Any Person (a) into which the Seller may be merged or consolidated, (b) which may result from any merger or consolidation to which the Seller shall be a party or (c) which may succeed to the properties and assets of the Seller substantially as a whole, shall be the successor to the Seller without the execution or filing of any document or any further act by any of the parties to this Sale Agreement; PROVIDED, HOWEVER, that the Seller hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Person, if other than the Seller, executes an agreement of assumption to perform every obligation of the Seller under this Sale Agreement, (ii) immediately after giving effect to such transaction, no representation or warranty made pursuant to this Sale Agreement shall have been breached, (iii) the surviving Person, if other than the Seller, shall have delivered an Officers' Certificate and an opinion of counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Sale Agreement relating to such transaction have been complied with, and that the Rating Agency Condition shall have been satisfied with respect to such transaction, (iv) if the Seller is not the surviving entity, such transaction will not result in a material adverse federal or state tax consequence to the Purchaser or the Noteholders and (v) if the Seller is not the surviving entity, the Seller shall have delivered an opinion of counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Purchaser in the Transferred Student Loans and reciting 3 the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. ARTICLE VIII LIMITATION ON LIABILITY OF SELLER AND OTHERS The Seller and any director or officer or employee or agent thereof may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder (provided that such reliance shall not limit in any way the Seller's obligations under this Sale Agreement). The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Sale Agreement or the Student Loan Purchase Agreements, and that in its opinion may involve it in any expense or liability. ARTICLE IX SURVIVAL OF COVENANTS All covenants, agreements, representations and warranties made herein shall survive the consummation of the purchase of the Transferred Student Loans; provided, however, that to the extent any of the same relate to a corresponding covenant, agreement, representation or warranty contained in a Student Loan Purchase Agreement, the same shall survive to the extent that such corresponding covenant, agreement, representation or warranty survives the applicable Student Loan Purchase Agreement. All covenants, agreements, representations and warranties made or furnished pursuant hereto by or for the benefit of the Seller shall bind and inure to the benefit of any successors or assigns of the Purchaser, including the Indenture Trustee. This Sale Agreement may be changed, modified or discharged, and any rights or obligations hereunder may be waived, only by a written instrument signed by a duly authorized officer of the party against whom enforcement of any such waiver, change, modification or discharge is sought. The waiver by the Indenture Trustee, at the direction of the Noteholders (pursuant to the Indenture), of any covenant, agreement, representation or warranty required to be made or furnished by the Seller or the waiver by the Indenture Trustee, at the direction of the Noteholders (pursuant to the Indenture), of any provision herein contained shall not be deemed to be a waiver of any breach of any other covenant, agreement, representation, warranty or provision herein contained, nor shall any waiver or any custom or practice which may evolve between the parties in the administration of the terms hereof, be construed to lessen the right of the Indenture Trustee, at the direction of the Noteholders (pursuant to the Indenture), to insist upon the performance by the Seller in strict accordance with said terms. ARTICLE X COMMUNICATION AND NOTICE REQUIREMENTS All communications, notices and approvals provided for hereunder shall be in writing and mailed or delivered to the Seller or the Purchaser, as the case may be. Notice given in any such communication, mailed to the Seller or the Purchaser by appropriately addressed registered mail, shall be deemed to have been given on the day following the date of such mailing and shall be addressed as follows: 4 If to the Purchaser, to: The National Collegiate Student Loan Trust 2004-1 c/o Wachovia Trust Company, National Association, as Owner Trustee One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Mr. Sterling C. Correia If to the Seller, to: The National Collegiate Funding LLC c/o First Marblehead Data Services, Inc. 230 Park Avenue, 10th Floor New York, NY 10169 Attention: Mr. Rob Baron with a copy to: First Marblehead Corporation The Prudential Tower 800 Boylston Street - 34th Floor Borton, MA 02199-8157 Attention: Mr. Richard P. Zermani or to such other address as either party shall have provided to the other parties in writing. Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered to the address of such party as provided above. ARTICLE XI AMENDMENT This Sale Agreement may be amended by the parties hereto without the consent of the related Noteholders for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Sale Agreement or of modifying in any manner the rights of such Noteholders; provided that such action will not, in the opinion of counsel satisfactory to the Indenture Trustee, materially affect the interest of any such Noteholder. In addition, this Sale Agreement may also be amended from time to time by the Seller and the Purchaser, with the consent of the Noteholders of Notes evidencing a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Sale Agreement or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the time of, collections of payments with respect to Transferred Student Loans or distributions that shall be required to be made for the benefit of the Noteholders or (b) reduce the aforesaid percentage of the Outstanding 5 Amount of the Notes, the Noteholders of which are required to consent to any such amendment, without the consent of all outstanding Noteholders. Promptly after the execution of any such amendment or consent (or, in the case of the Rating Agencies, five Business Days prior thereto), the Purchaser shall furnish written notification of the substance of such amendment or consent to the Indenture Trustee, and each of the Rating Agencies. It shall not be necessary for the consent of Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. Prior to the execution of any amendment to this Sale Agreement, the Owner Trustee shall be entitled to receive and rely upon an opinion of counsel stating that execution of such amendment is authorized or permitted by this Sale Agreement, the Owner Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee's own rights, duties or immunities under this Sale Agreement or otherwise. ARTICLE XII ASSIGNMENT The Seller hereby assigns its entire right, title and interest as purchaser under this Sale Agreement and the Student Loan Purchase Agreement thereunder to the Purchaser as of the date hereof and acknowledges that the Purchaser will assign the same, together with the right, title and interest of the Purchaser hereunder, to the Indenture Trustee under the Indenture. ARTICLE XIII GOVERNING LAW THIS SALE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES, HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. ARTICLE XIV LIMITATION OF LIABILITY OF OWNER TRUSTEE Notwithstanding anything contained herein to the contrary, this instrument has been executed by Wachovia Trust Company, National Association, not in its individual capacity but solely in its capacity as Owner Trustee of the Purchaser, and in no event shall Wachovia Trust Company, National Association in its individual capacity or any beneficial owner of the Purchaser have any liability for the representations, warranties, covenants, agreements or other obligations of the Purchaser hereunder, as to all of which recourse shall be had solely to the assets of the Purchaser. For all purposes of this Sale Agreement, in the performance of any duties or obligations of the Purchaser hereunder, the Owner Trustee shall be subject to, and 6 entitled to the benefits of, the terms and provisions of Articles VIII, IX and X of the Trust Agreement. [Signature Pages Follow] IN WITNESS WHEREOF, the parties hereto have caused this Sale Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. THE NATIONAL COLLEGIATE FUNDING LLC, as Seller By: GATE Holdings, Inc., Member By: /s/ Bruce F. Lefenfeld ------------------------------ Name: Bruce F. Lefenfeld Title: Vice President THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, as Purchaser By: Wachovia Trust Company, National Association, not in its individual capacity but solely as Owner Trustee By: /s/ Sterling C. Correia ---------------------------- Name: Sterling Correia Title: Vice President DEPOSIT AND SALE AGREEMENT SCHEDULE A Pool Supplements Each of the following Pool Supplements was entered into by and among The First Marblehead Corporation, The National Collegiate Funding LLC and: o Bank of America, N.A., dated June 10, 2004, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 10, 2004, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated June 10, 2004, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated June 10, 2004, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated June 10, 2004, for loans that were originated under the following Charter One programs: AES EducationGAIN Loan Program, (AMS) TuitionPay Diploma Loan Program, Brazos Alternative Loan Program, CFS Direct to Consumer Loan Program, Citibank Flexible Education Loan Program, College Loan Corporation Loan Program, Comerica Alternative Loan Program, Education Assistance Services Alternative Loan Program, ESF Alternative Loan Program, Extra Credit II Loan Program (North Texas Higher Education), M&I Alternative Loan Program, National Education Loan Program, Navy Federal Alternative Loan Program, NextStudent Alternative Loan Program, PNC Bank Resource Loan Program, SAF Alternative Loan Program, Southwest Loan Program and WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated June 10, 2004, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated June 10, 2004, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated June 10, 2004, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated June 10, 2004, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated June 10, 2004, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated June 10, 2004, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated June 10, 2004, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated June 10, 2004, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. SCHEDULE B Student Loan Purchase Agreements Each of the Note Purchase Agreements, as amended or supplemented, was entered into by and between The First Marblehead Corporation and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 1, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated November 13, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. EX-10.5 7 ncf_ex10-5.txt GUARANTY AGREEMENT EXHIBIT 10.5 EXHIBIT 10.5 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. EXECUTION 4/18/02 NOTE: THIS AGREEMENT CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION AND MAY NOT BE DISCLOSED WITHOUT THE CONSENT OF BOTH PARTIES OR AS REQUIRED BY LAW. AMENDED AND RESTATED GUARANTY AGREEMENT BETWEEN THE EDUCATION RESOURCES INSTITUTE, INC. AND BANK ONE, NATIONAL ASSOCIATION This Amended and Restated Guaranty Agreement (this "Agreement") is made as of the Conversion Date (as defined below), by and between The Education Resources Institute, Inc. ("TERI"), a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 330 Stuart Street, Boston, Massachusetts 02116, and Bank One, National Association ("Bank One"), a national banking association organized under the laws of the United States and having its principal place of business located at 100 East Broad Street, Columbus, Ohio 43215. WHEREAS, Bank One has established the EDUCATION ONE K-12 Loan Program, the EDUCATION ONE Continuing Education Loan Program, the EDUCATION ONE Undergraduate Loan Program, and EDUCATION ONE Graduate Loan Program (collectively, the "Program") to assist students and parents in financing the cost of education at private elementary and secondary schools and at various institutions of higher education; and WHEREAS, pursuant to agreements between Bank One and The First Marblehead Corporation ("FMC"), Bank One will originate loans conforming to the Program ("Loans"); and WHEREAS, pursuant to such agreements between Bank One and FMC, FMC has agreed to purchase or to cause to be formed one or more special purpose business trusts or other entities (each an "SPE") to purchase promissory notes evidencing Loans following origination; and WHEREAS, TERI is in the business of providing financial assistance in the form of loan guaranties to and on behalf of students enrolled in programs of education and their parents at TERI-approved schools; and WHEREAS, Bank One is willing to make Loans to eligible Borrowers under the Program, and TERI is willing to guaranty the payment of principal and interest against the Borrowers' default or certain other events as more fully described below, in accordance with the terms and conditions set forth in this Agreement; and WHEREAS Bank One and TERI entered a Guaranty Agreement dated April 30, 2001 ("Old Guaranty Agreement"), and the parties wish to amend and restate the Old Guaranty Agreement by their entry into this Amended and Restated Guaranty Agreement to take effect as of the Conversion Date; and WHEREAS the parties intend that this Amended and Restated Guaranty Agreement supersedes and replaces the Old Guaranty Agreement in its entirety and that the guaranty of any and all Loans for applications received under the Program on or after the Conversion Date, will be made under the terms and conditions of this Amended and Restated Guaranty Agreement and not under the Old Guaranty Agreement; NOW, THEREFORE, in consideration of the mutual covenants contained herein, TERI and Bank One agree as follows: Section 1: DEFINITIONS As used in this Agreement the following terms shall have the following meanings: 1.1 "Agent" shall mean State Street Bank & Trust Company, its successors and assigns, in its capacity as Agent under the Deposit and Security Agreement among TERI, said State Street Bank & Trust Company, Bank One, and The First Marblehead Corporation, of even date herewith, as amended. 1.2 "Borrower" shall mean the person, or all persons collectively, including all students, cosigners, co-borrowers, guarantors, endorsers, and accommodation parties, who execute a Promissory Note individually or, in the case of multiple Borrowers, severally and jointly, for the purpose of obtaining funds from Bank One under the Program. 1.3 "Conversion Date" means the date on which TERI begins accepting applications on the new application/promissory note forms attached hereto for program codes EOP1IM, EOTUDP, EOTUIM, EOTUIO, EOTGDF, and EOTCDF. That date shall be May 13, 2002, unless TERI notifies Bank One in writing prior to May 13, 2002, of a different date, which date shall in no event be later than May 27, 2002. 1.4 "Due Diligence" shall mean the utilization by Bank One of policies, practices and procedures in the origination, servicing and collection of Loans that comply with the standards set forth in the Program Guidelines and with the requirements of federal and state law and regulation. 1.5 "Guaranty Event" shall mean any of the following events: a. failure of the Borrower to make monthly principal and/or interest payments on a Loan when due, provided such failure persists for a period of one hundred fifty (150) consecutive days, 2 b. the filing of a petition in bankruptcy with respect to the Borrower, or c. the death of the Borrower. For Loans on which the Borrower is two or more persons, none of the above, with the exception of paragraph b, is a Guaranty Event unless one or more such events shall have occurred with respect to all such persons. The foregoing notwithstanding, if a Borrower files a petition in bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code and does not seek a discharge of the affected Loan(s) under 11 U.S.C. ss.523(a)(8)(B) of the U.S. Bankruptcy Code, Bank One at TERI's request will withdraw its guaranty claim unless or until one of the other Guaranty Events shall have occurred with respect thereto. 1.6 "Loan" shall mean a loan of funds, including all disbursements thereof, made by Bank One under the Program. 1.7 "Note Purchase Agreement" means the amended and restated agreement of that name between Bank One and FMC dated as of May 1, 2002, as amended from time to time. 1.8 "Pledged Account" shall mean the account held by the Agent pursuant to the Deposit and Security Agreement dated April 30, 2001, among TERI, FMC, the Agent, and Bank One, as amended. 1.9 "Program Guidelines" shall mean the (i) Underwriting, Origination and Loan Term Guidelines for EDUCATION ONE K-12 Loan Program, EDUCATION ONE Undergraduate Loan Program, EDUCATION ONE Graduate Loan Program, and EDUCATION ONE Continuing Education Loan Program, a copy of which is attached hereto as Exhibit A; (ii) the TERI Servicing Guidelines, a copy of which is attached hereto as Exhibit B; and (iii) the Promissory Notes, and all changes thereto as provided in Section 7 hereof. The Program Guidelines are hereby incorporated in this Agreement by reference and made a part hereof. 1.10 "Promissory Note" shall mean a promissory note executed by a Borrower evidencing a Loan, on forms in the Program Guidelines attached hereto or as approved pursuant to Section 3.2 below. Section 2: GUARANTEE OF LOANS 2.1 TERI hereby guarantees to Bank One, unconditionally except as set forth in Section 2.2 below, the payment of 100% of the principal of and accrued interest on every Loan as to which a Guaranty Event has occurred. "Accrued interest" shall mean interest accrued and unpaid to the date of payment in full by TERI, less any interest that shall have accrued after the filing of a claim for guaranty payment submitted to TERI by Bank One but before TERI shall have received all the documentation necessary to process the guaranty claim as set forth in the Program Guidelines. TERI will use all reasonable efforts to make payment on its guaranty within sixty (60) days, and will in any event make payment within ninety (90) days, of receipt of a demand from Bank One stating the 3 name of the Borrower and the type of Guaranty Event that has occurred accompanied by the full claim documentation required in the Program Guidelines. 2.2 TERI's guaranty is conditioned upon the following: a. Bank One must have filed its claim for guaranty payment within the time period and following the procedures specified in the Program Guidelines. b. Bank One and its predecessors in interest must at all times have exercised Due Diligence with respect to the Loan (or shall have cured any failure to exercise Due Diligence under the reinstatement provisions in Section 2.4 hereof and the Program Guidelines), and must have complied with all other material requirements of the Program Guidelines applicable to the Loan. c. Bank One shall have paid to TERI the Initial Guaranty Fee (as defined in Section 3.3.a below) for the Loan in question, and shall have paid to the Agent, either directly or through its origination agent, any Subsequent Guaranty Fee (as defined in Section 3.3.b below) for the Loan in question which is due and payable as provided in Section 3.3.b below. d. TERI must have received from Bank One the original Promissory Note, or a lost note affidavit or other acceptable and admissible evidence of the Loan, enforceable against the Borrower (except as provided in this Section 2.2(d) and in Section 2.3 below), endorsed to TERI in such manner as to transfer to TERI all rights in and title to such Promissory Note and Loan, and to Bank One's knowledge free and clear of all liens and encumbrances, and of all defenses, counterclaims, offsets, and rights of rescission that might be raised by the Borrower. Submission of a claim to TERI shall constitute Bank One's certification that the conditions of 2.2.b. and 2.2.d. have been met, and TERI is entitled to rely on such certification. Subsections 2.2.b. and 2.2.d above notwithstanding, if a Loan submitted for guaranty was originated by TERI on behalf of Bank One pursuant to a Loan Origination Agreement between the parties, (i) TERI will not deny Bank One's guaranty claim on such Loan to the extent the basis for denial is a violation of the Program Guidelines, a violation of Massachusetts or federal law committed by TERI in the origination process, or a violation of other law that would have been avoided had TERI followed procedures for compliance with such law stipulated by Bank One pursuant to Section 8(b) of the Loan Origination Agreement, and (ii) TERI will have no recourse against Bank One in the event that TERI's actions or omissions in the origination process (other than (A) its use of certain forms to comply with law other Massachusetts or federal law, or (B) actions or omissions stipulated by Bank One pursuant to said Section 8(b) of the Loan Origination Agreement), shall have given rise to a defense in favor of the Borrower in a suit on the Promissory Note or Loan. 4 2.3 TERI's guaranty obligation with respect to any Loan shall not be terminated or otherwise affected or impaired (i) by Bank One's granting an extension to the Borrower of time to make scheduled payments, or by any other indulgence Bank One may grant to the Borrower, provided that all extensions and other indulgences meet the forbearance standards and other requirements of the Program Guidelines; or, Section 2.2.d above notwithstanding, (ii) because of any fraud in the execution of the Promissory Note, (iii) because of any illegal or improper acts of the Borrower, (iv) because the Borrower may be relieved of liability for such Loan due to lack of contractual capacity or any other statutory exemption. 2.4 If TERI properly denies Bank One's claim on any Loan on the grounds of Due Diligence deficiencies, Bank One may thereafter require that TERI reinstate the guaranty of such Loan if (a) Bank One corrects such deficiencies and receives three (3) consecutive full on-time monthly payments from the Borrower, according to any schedule permitted by the Program Guidelines, and if at the time of Bank One's request the Borrower is within sixty (60) days of being current on all principal and interest payments on such Loan, or (b) Bank One satisfies any other method of cure set forth in the Program Guidelines. 2.5 TERI's guaranty hereunder is a continuing and absolute guaranty of payment and not merely of collection, covering Loans made in accordance herewith either (i) prior to termination of this Agreement, or (ii) based upon applications received by Bank One prior to such termination; and shall not affect TERI's obligations to Bank One then existing, whether direct or indirect, absolute or contingent, then due or thereafter to become due. 2.6 TERI agrees not to exercise any right of subrogation, reimbursement, indemnity, contribution or the like against the Borrower of any Loan unless and until all TERI's obligations under this Agreement with respect to such Loan have been satisfied in full, except to the extent that it is deemed a valid claimant as a contingent creditor, for example, under Title 11 of the United States Code (the "Bankruptcy Code"), or applicable state law. 2.7 During the term of this Agreement, TERI agrees to adhere to Bank One Information Security Standards attached hereto as Exhibit E. Notwithstanding any other provision of this Agreement, TERI shall permit Bank One to audit its operations for compliance with the Information Security Standards, upon reasonable notice from Bank One. 2.8 TERI will permit Bank One, any duly designated representative of Bank One, or any governmental body having jurisdiction over Bank One (subject to written notice being provided to TERI by Bank One identifying the requesting party and the date of the review), to examine and audit TERI's books and records, systems, controls, processes and procedures related to the Loans, at any time during TERI's regular business hours, provided that in the case of examinations by Bank One or its representative absent good cause (i) TERI must be given ten (3) business days' prior written notice and, (ii) no more than two such audits may be conducted with respect to any twelve-month period or will take place in any twelve-month period. In no event will any audit be performed during 5 July, August, September, or October in any year except at the request of a regulatory authority having jurisdiction over Bank One. Regulatory agencies can have access to TERI's books and records, systems, controls, processes and procedures when they deem necessary without prior notice. TERI will also provide Bank One with a copy of its audited financial statement or other third party audits within ten (10) days of same becoming available. Notwithstanding any other provision of this Agreement, TERI shall permit Bank One to audit its operations for compliance with the Information Security Standards, upon reasonable notice from Bank One. 2.9 If TERI should violate any material term of this Agreement, it will be liable to Bank One for all loss, cost, damage, and expense sustained by Bank One as a result. TERI will indemnify Bank One and hold it harmless from and against any loss, cost, damage and expense that Bank One may suffer as a result of claims arising out of TERI's actions or omissions relative to Bank One's participation in the Program. "Expense" includes, without limitation, Bank One's reasonable attorney's fees. TERI will further indemnify Bank One and hold it harmless from and against any claim brought against Bank One by any Borrower or third party based on actions or omissions of Bank One that were consistent with the Program Guidelines. The foregoing notwithstanding, TERI will not be liable to Bank One under any provision of this Agreement for special or consequential damages including but not limited to lost profits, even if advised in advance of the possibility of such damages, or for exemplary or punitive damages, provided that such exclusions shall not apply to the indemnification against an award of such damages pursuant to a third party claim. 2.10 Although Bank One agrees not to use any loan servicer not approved by TERI, Bank One acknowledges that TERI's approval of a servicer is in no way an endorsement of such servicer and that TERI shall have no liability to Bank One for any losses arising from such servicer's failure to comply with Due Diligence or the Program Guidelines or applicable law, nor shall TERI be required to honor any claim submitted by such servicer if the claim does not comply with the requirements of this Agreement. 2.11. This Amended and Restated Guaranty Agreement supersedes and replaces the Old Guaranty Agreement and all amendments thereto in their entirety and the guaranty of any Loans for which applications are received on or after the Conversion Date will be made under the terms and conditions of this Amended and Restated Guaranty Agreement and not under the Old Guaranty Agreement; provided, however, that the Third Amendment to Program Agreements, dated November 1, 2001, remains in full force and effect. The Old Guaranty Agreement shall continue to govern the guaranty of Loans for which applications are received prior to the Conversion Date. Section 3: OBLIGATIONS OF THE LENDER 3.1 In originating, servicing, disbursing, and collecting Loans, Bank One will comply, and cause its servicer and others acting on its behalf to comply with all applicable requirements of federal and state laws and regulations. 6 3.2 Bank One will use Promissory Notes, Loan applications, disclosure statements, and other forms to which the parties may agree from time to time in written, faxed, or e-mailed communications or documents. The forms of application and Promissory Note attached as part of the Program Guidelines, and the form of disclosure statement attached hereto as part of the Program Guidelines, are agreed to be satisfactory to both parties. Without limiting the generality of Section 3.1, Bank One warrants the conformity of such instruments and any agreed successors thereto with all applicable and material legal requirements, other than those of federal and Massachusetts law and regulation. 3.3 Bank One will pay a guaranty fee for each Loan (the "Guaranty Fee") as follows: a. At the time of each disbursement of the Loan, Bank One will promptly remit to TERI [**] percent ([**]%) of the principal amount of Loan disbursed (the "Initial Guaranty Fee"). b. At such times as are set forth in Schedule 3.3 attached hereto and incorporated herein by reference, Bank One will remit to the Agent, or cause TERI as originating agent to remit to the Agent, for deposit in the Pledged Account, such additional fees as are set forth in Schedule 3.3 ("Subsequent Guaranty Fee"). In the event that a Guaranty claim is made with respect to a Loan before a Subsequent Guaranty Fee is scheduled to be paid by Bank One, for such Loan, the Subsequent Guaranty Fee shall become immediately due and payable. In the event that a loan is prepaid in full prior to the date that a Subsequent Guaranty Fee is scheduled to be paid Bank One for such Loan, the Subsequent Guaranty Fee shall nevertheless become due and payable at the time that would have applied if such prepayment had not occurred. For example, if a Subsequent Guaranty Fee is due at the time of a Securitization Transaction and a Loan is prepaid before it is eligible for Securitization, then the Subsequent Guaranty Fee with respect to such Loan shall become due at the first Securitization Transaction when such Loan would have been eligible for inclusion, had prepayment not occurred. c. Anything in the Program Guidelines to the contrary notwithstanding, if Bank One is required under the terms of a Promissory Note to refund all or part of the fees collected from the Borrower, all or part of which are used to pay the Guaranty Fee, to a Borrower, TERI will refund all or part of the Initial Guaranty Fee and the Agent will refund all or part of any Subsequent Guaranty Fee it has received to Bank One upon being so advised in writing. Failure to remit a Guaranty Fee within thirty (30) days of the time set forth above will not be a breach of this Agreement but will vitiate TERI's guaranty of the Loan concerned. 3.4 If TERI shall have purchased a Loan due to the occurrence or alleged occurrence of a Guaranty Event described in Section 1.5.a and/or 1.5.b above, Bank One will promptly repurchase such Loan from TERI, (i) if TERI succeeds, after purchase, in obtaining from the Borrower three full consecutive on-time monthly payments, according to any schedule permitted by the Program Guidelines, provided that on the date of TERI's notice 7 to repurchase, the Borrower is within thirty (30) days of being current on his or her payments on such Loan; provided that this repurchase obligation may be invoked by TERI only once as to any Loan; or (ii) subject to Section 2.3 and the last sentence of 2.2 above, if TERI should determine that the Loan does not meet the conditions set forth in subsections (b), (c) and (d) of Section 2.2 above. 3.5 All to the extent permitted by applicable law, Bank One will deliver to TERI such reports, documents, and other information concerning the Loans as Bank One receives from TERI in its capacity as originator of the Loan and from the Servicer and permit independent auditors or authorized representatives of TERI, and permit governmental agencies, if any, having regulatory authority over TERI, to have access to the operational and financial records and procedures directly applicable to Loans and to Bank One's participation in the Program. 3.6 If Bank One should violate any material term of this Agreement, it will be liable to TERI for all loss, cost, damage, and expense sustained by TERI as a result. Bank One will indemnify TERI and hold it harmless from and against all loss, cost, damage, and expense that TERI may suffer as a result of claims arising out of Bank One's actions or omissions relative to Bank One's participation in the Program unless such actions or omissions are in compliance with this Agreement. Bank One will similarly indemnify TERI with respect to any defenses arising from Bank One's violation of or failure to comply with any material law, regulation, or order, or any term of this Agreement, that may be raised by a Borrower to any suit upon a Promissory Note or Loan. "Expense" includes, without limitation, TERI's reasonable attorney's fees. The foregoing notwithstanding, Bank One will not be liable to TERI under any provision of this Agreement for special or consequential damages including but not limited to lost profits, even if advised in advance of the possibility of such damages, or for exemplary or punitive damages, provided that such exclusions shall not apply to the indemnification against an award of such damages pursuant to a third party claim. Section 4: INTENTIONALLY OMITTED Section 5: REPRESENTATIONS AND WARRANTIES 5.1 Each party represents and warrants to the other that its execution, delivery and performance of this Agreement are within its power and authority, have been authorized by proper proceedings, and do not and will not contravene any provision of law or such party's organization documents or by-laws or contravene any provision of, or constitute an event of default or an event which, with the lapse of time or with the giving of notice or both, would constitute an event of default, under any other agreement, instrument or undertaking by which such party is bound. Each party represents and warrants that it has and will maintain in full force and effect all licenses required under applicable state, federal, local or other law for the conduct of all activities contemplated by this Agreement and comply with all requirements of such applicable law relative to its licenses and the conduct of all activities contemplated by this Agreement. This Agreement and all of its terms and provisions are and shall remain the legal and binding 8 obligation of the parties, enforceable in accordance with its terms subject to bankruptcy and insolvency laws. The warranties given herein shall survive any termination of this Agreement. 5.2 The parties acknowledge that TERI is not an insurer or reinsurer and Bank One expressly waives all claims it might otherwise have under applicable law were TERI to be held by any court or regulatory agency to be acting as an insurer or reinsurer hereunder. The only obligations of TERI to Bank One shall be those expressly set forth herein. Section 6: MISCELLANEOUS 6.1 Neither party is or will hold itself out to be the agent, partner, or joint venturer of the other party with regard to any transaction under or pursuant to this Agreement. 6.2 Each party's respective rights, remedies, powers, privileges, and discretions ("Rights and Remedies") shall be cumulative and not exclusive. No delay or omission by either party in exercising or enforcing any of its Rights and Remedies shall operate as to constitute a waiver of them. No waiver by a party of any default under this Agreement shall operate as a waiver of any subsequent or other default under this Agreement. No single or partial exercise by a party of any of its Rights and Remedies shall preclude the other or further exercise of such Rights and Remedies. No waiver or modification by a party of the Rights and Remedies on any one occasion shall be deemed a continuing waiver. A party may exercise its various Rights and Remedies at such time or times and in such order of preference as it in its sole discretion may determine. 6.3 This Agreement represents the entire understanding of the parties with respect to the subject matter hereof. This Agreement, together with any contemporaneous contract concerning credit analysis or other loan origination functions, supersedes all prior communications whatsoever between the parties relative in any way to Loans or Bank One's participation in the Program. This Agreement may be modified only by written agreement of the parties hereto, except as may otherwise be set forth herein. 6.4 Any determination that any provision of this Agreement is invalid, illegal, or unenforceable in any respect shall not affect the validity, legality, or enforceability of such provision in any other instance and shall not affect the validity, legality, or enforceability of any other provision of this Agreement. 6.5 Throughout the term of this Agreement, TERI shall maintain a disaster recovery plan and the capacity to execute such plan. On an annual basis, and upon request by Bank One, TERI shall provide Bank One with an executive summary of TERI's most current disaster recovery plan and a detailed description of the disaster recovery plan test results. Upon the occurrence of any disaster requiring use of TERI's disaster recovery plan, TERI shall promptly notify Bank One of same, and TERI shall provide to Bank One equal access as TERI's other customers in the provision of the Services contemplated by this Agreement. Bank One shall forward to TERI a copy of any disaster recovery plan provided to Bank One by the servicer or any notice of the occurrence of a disaster by the 9 servicer, consistent with the permission granted in the agreement between Bank One and the servicer to provide such information to TERI. Subject to the foregoing, no party hereto shall be responsible for, or in breach of this Agreement if it is unable to perform as a result of delays or failures due to any cause beyond its control, howsoever arising, and not due to its own act or negligence and that cannot be overcome by the exercise of due diligence. Such causes shall include, but not be limited to, labor disturbances, riots, fires, earthquakes, floods, storms, lightning, epidemics, wars, civil disorder, hostilities, expropriation or confiscation of property, failure or delay by carriers, interference by civil and military authorities whether by legal proceeding or in fact and whether purporting to act under some constitution, decree, law or otherwise, acts of God and perils of the sea. 6.6 This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws provisions thereof. 6.7 This Agreement will be binding on the parties' respective successors and assigns. It may not be assigned by either party without the other's written consent, which will not be unreasonably withheld, provided that: (a) Bank One may assign any Loan, together with the provisions hereof as applicable to such Loan, to FMC or any SPE; and (b) TERI may sub-contract any administrative obligations necessary or convenient to TERI to perform its obligations hereunder to FMC or any subsidiary or affiliate of FMC, so long as such sub-contractor shall be obligated to comply with this Agreement and so long as TERI is not relieved of any obligation as result of the sub-contracting; and (c) Bank One may assign its rights and obligations under this Agreement to any of its Affiliates that is a national banking association or state-chartered bank having the legal power and right under applicable law (including, without limitation, usury law in the State where it is located) to make educational loans conforming to the Program Guidelines to borrowers located in all states and territories of the United States. 6.8 Notice for any purpose hereunder may be given by any means requiring receipt signature, or by facsimile transmission confirmed by first class mail. 6.9 Notice for any purpose hereunder may be given by any means requiring receipt signature, or by facsimile transmission confirmed by first class mail. In the case of TERI, notices should be sent to its President, and if by fax, to (617) 451-9425, or to its Senior Vice President-Loan Programs, Fax No. (617) 422-8880. In the case of Bank One, notices should be sent to the following: Bank One, N.A. Myra Busch Goetz Vice President 1111 Polarais Parkway OH1-0246 Columbus, OH 43240 Fax No.: 614 217-5781 With a copy to: 10 Education One Group 11100 USA Parkway Indianapolis, Indiana 46038 Attn: Joseph F. Sergi Fax No.: 317-578-6082 Either party may from time to time change the person, address or fax number for notice purposes by formal notice to the other party. 6.10 The name of EDUCATION ONE and the loan product designated as EDUCATION ONE shall at all times be the sole property of Bank One, subject to any license granted by Bank One, and TERI shall acquire no interest in such name by virtue of this Agreement. During the term of this Agreement, however, Bank One shall use the EDUCATION ONE trademark and service mark only for Loans guaranteed hereunder. 6.11 This Agreement contains the entire understanding of the parties relating to this subject matter. It will be binding on and inure to the benefit of the parties' respective successors and assigns, provided that it may not be assigned by either party without the other's prior consent. Bank One may assign its interests in this Agreement (i) as it concerns any Loan originated hereunder, to any entity to which it assigns such Loan permissibly under the Guaranty Agreement, or (ii) to any of its affiliates or subsidiaries without consent; however, Bank One must notify TERI, in writing, of the assignment at least thirty days prior to the transfer. 6.12 TERI recognizes and hereby expressly agrees that this Agreement in no way prohibits Bank One from making education loans not guaranteed hereunder so long as, during the term of this Agreement, such loans are not marketed or made under the EDUCATION ONE trademark and service mark. Subject to such trademark and service mark restriction, Bank One retains the ability to contact, negotiate terms with, and enter into contracts with any other third party, including any competitor of TERI, at any time, without notice to TERI, and without incurring liability therefor. 6.13 Each party's respective rights, remedies, powers, privileges, and discretion's ("Rights and Remedies") will be cumulative and not exclusive. No delay or omission by either party in exercising or enforcing any of its Rights and Remedies will operate as or constitute a waiver of them. No waiver by a party of any default under this Agreement will operate as a waiver of any subsequent or other default under this Agreement. No single or partial exercise by a party of any of its Rights and Remedies will preclude the other or further exercise of such Rights and Remedies. No waiver or modification by a party of the Rights and Remedies on any one occasion will be deemed a continuing waiver. A party may exercise its various Rights and Remedies at such time or times and in such order of preference as it in its sole discretion may determine. 6.14 This Agreement may be modified only by written agreement of the parties hereto, except as may otherwise be set forth herein. 11 6.15 If any provision of this Agreement is declared or found to be illegal, unenforceable or void, then both parties shall be relieved of all obligations arising under such provision, but only to the extent that such provision is illegal, unenforceable or void, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefor another provision that is legal and enforceable and achieves the same objective. 6.16 Should TERI outsource or subcontract some or all of its administrative functions, no such outsourcing or subcontracting shall relieve TERI of it obligations under this Agreement. TERI will advise Bank One in writing of any outsourcing or subcontracting that would alter the manner in which, or the person(s) to whom, communications concerning originations should be made. 6.17 TERI shall not use any trade name, trademark, service mark, or any other information which identifies Bank One or EDUCATION ONE in TERI's sales, marketing, publicity activities, including but not limited to, interview with representatives of any written publication, television station or network, or radio station or network, without the prior written consent of Bank One Corporate Communication Department or a designated agent of Bank One. Section 7: CHANGES TO PROGRAM GUIDELINES The parties agree that the Program Guidelines will need to be updated and modified to respond to changed conditions from time to time. The parties intend to make such modifications in a manner that does not interfere with the ordinary advertising and origination cycle for education loans. Amendments necessary to meet state or federal regulatory requirements may be made at any time. With respect to all other changes, the parties shall exchange requests for modification of the Program Guidelines, including without limitation any requested changes to the provisions of the Program Guidelines concerning the Guaranty Fees, in the first part of the first calendar quarter of each year. Each party shall respond in writing to proposals from the other within 30 days, in writing, and both parties will attempt to resolve any differences within 30 days after receiving a response to a request. All modifications must be mutually acceptable. Any modifications approved by the parties and not requiring system adjustments by Bank One's loan servicer shall take effect within thirty (30) days after approval. Modifications requiring system adjustments by Bank One's loan servicer shall take effect as soon after approval as such servicer shall be able to adjust its systems to accept loans made on the modified terms. The parties shall use their best efforts to conclude all negotiations of proposed changes prior to May 1 of each year. The foregoing process shall not apply to modification of the Servicing Guidelines, which are subject to a modification process contained therein. Notwithstanding the foregoing, with respect to modification of note forms, applications, and related materials for prescreened marketing or other marketing campaigns, the parties may agree to supplemental forms and procedures as often as they desire. Upon approval of such forms in writing (which may include a fax or an email) by Bank One such additional forms and procedures shall be subject to the representation and warranty contained in Section 3.2 of this Agreement. 12 Section 8: TERM AND TERMINATION 8.1 The initial term of this Agreement shall commence on the Conversion Date, and shall continue through April 30, 2004. Thereafter, this Agreement shall automatically renew for successive two-year terms unless either party provides written notice of non-renewal and termination not less than ninety (90) days prior to the end of the then-current term. 8.2 In the event that the parties are unable to agree on a proposed modification to the Program Guidelines as provided in Section 7, above, the party proposing the modification shall have the option of terminating this Agreement by providing written notice of termination to the other party. Such termination will be effective on the following May 1. 8.3 To the extent permitted by applicable law, if either party should become subject to bankruptcy, receivership, or other proceedings affecting the rights of its creditors generally, this Agreement will be deemed terminated thereupon immediately without the need of notice from the other party, and the party becoming subject to such proceedings will promptly notify the other party thereof. 8.4 Any controversy or claim between the parties arising from or in connection with this Agreement or the relationship of the parties under this Agreement whether based on contract, tort, common law, equity, statute, regulation, order or otherwise, and whether arising before or after the termination of this Agreement ("Dispute") shall be resolved as follows: (1) Upon written request of either party, the parties will each appoint a designated representative whose task it will be to meet for the purpose of endeavoring to resolve such Dispute. (2) The designated representatives shall meet as often as the parties reasonably deem necessary to discuss the problem in an effort to resolve the Dispute without the necessity of any formal proceeding. (3) Arbitration proceedings for the resolution of a Dispute may not be commenced until the earlier of (i) when the designated representatives conclude in good faith that amicable resolution through continued negotiation of the matter does not appear likely; or (ii) the expiration of the thirty (30) day period immediately following the initial request to negotiate the Dispute. 8.5 The parties acknowledge that this Agreement evidences a transaction involving interstate commerce. Any controversy or claim arising out of or relating to this Agreement, or the breach of the same, shall be settled through consultation and negotiation in good faith and a spirit of mutual cooperation under Section 8.4. However, if those attempts fail, the parties agree that any misunderstandings or disputes arising from this Agreement shall be decided by binding arbitration which shall be conducted, upon request by either party, in New York, New York, before one (1) arbitrator designated by the American Arbitration Association (the "AAA"), in accordance with the terms of the Commercial Arbitration Rules of the AAA, and, to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code). The arbitrator shall be required to make detailed 13 findings of fact and conclusions of law. Notwithstanding anything herein to the contrary, either party may proceed to a court of competent jurisdiction to obtain equitable relief at any time. 8.6 If either party is in breach hereof, the other may terminate this agreement upon thirty (30) days' written notice, unless the breach is cured within that thirty-day period. If the breach is governed by Section 6.5 herein ("Force Majeure"), the 30-day cure period will be extended day-for-day by the number of days, not to exceed 60, that the party is prevented from performing by circumstances beyond its reasonable control. 8.7 Termination shall be prospective only and shall not affect the obligations of the parties hereto, which were incurred prior to such termination or any of the warranties and indemnities contained herein or the provisions of Section 9 below (regarding confidentiality). In no event shall Bank One be entitled to sue for specific performance of this Agreement by TERI with respect to the guaranty of Loans other than those as to which a binding commitment shall have been made prior to the sending of notice of termination of this Agreement. Section 9: CONFIDENTIALITY; RESTRICTIONS ON USE OF INFORMATION 9.1 TERI and Bank One each acknowledge that in the course of the operations contemplated by this Agreement, and in the course of communications relative to this Agreement, it has received and will receive information concerning the other's finances, business plans, business methods, and the like that is not generally known in the student loan industry ("Confidential Information"). Each party will respect and use all reasonable efforts to maintain the confidentiality of the other's Confidential Information unless and until such information becomes generally known through no fault of the receiving party. Without limiting the foregoing, TERI may disclose any of Bank One's Confidential Information to any entity to which TERI subcontracts its obligations under this Agreement pursuant to Section 6.7(b) hereof. 9.2 In accordance with the provisions of Title V of the Gramm-Leach-Bliley Act (the "GLB Act") and Federal Reserve Board Regulation P ("Regulation P"), TERI agrees to respect and protect the security and confidentiality of any "nonpublic personal information" (as defined in the GLB Act and Regulation P) relating to applicants for Loans and to Borrowers, including, where applicable, the restrictions on the re-use and disclosure of such information set forth in the GLB Act and Regulation P. 9.3 Without limiting the foregoing, TERI may retain as its own property and use for any lawful purpose any or all aggregated or de-identified data concerning Loan applicants and Borrowers which does not include the name, address or social security number of the Loan applicants or Borrowers. TERI may sell, assign, transfer or disclose such information to third parties including, without limitation, FMC, who may also use such information for any lawful purpose. 14 9.4 Both TERI and Bank One have made and will continue throughout the term of this Agreement to make available to the other party confidential and proprietary materials and information ("Proprietary Information"). Prospectively, each party shall advise the other of material and information that is confidential and/or proprietary. All material and information provided by either party to the other relating to the business, policies, procedures, customs, forms, customers and strategies of the providing party or any of its affiliates, including information previously divulged or delivered to the other party regarding the aforementioned subject matter is hereby designated as confidential and proprietary and shall be considered to be Proprietary Information. It is understood that the obligations set forth in this Section do not apply to materials or information that: (i) are already, or otherwise become, generally known by third parties as a result of no act or omission of the receiving party; (ii) subsequent to disclosure hereunder are lawfully received from a third party having the right to disseminate the information without restriction on disclosure; (iii) are generally furnished to others by the disclosing party without restriction on disclosure; (iv) were already known by the receiving party prior to receiving them from the disclosing party and were not received from a third party in breach of that third party's obligations of confidentiality; or (v) are independently developed by the receiving party without the use of Proprietary Information of the disclosing party. 9.5 Each party shall maintain the confidentiality of the other party's Proprietary Information and will not use or disclose such Proprietary Information without the prior written consent of the other party. Notwithstanding the foregoing, either party may disclose the other's Proprietary Information to its affiliates, agents, and other third parties on a need-to-know basis, provided that such parties are under a similar obligation to maintain the confidentiality of such Proprietary Information. 9.6 Further, each party may disclose the other's Proprietary Information in a judicial or quasi-judicial proceeding when required to do so by law when responding to a subpoena, deposition notice or similar judicial or governmental demand; in such situations, however, the party being requested to disclose the other's Proprietary Information shall endeavor to provide notice to the other party whereby the other party may intervene in the proceeding, if it wishes, and endeavor to prevent such disclosure. Additionally, each party may disclose the other's Proprietary Information to the various regulatory agencies having jurisdiction over the disclosing party. 9.7 Notwithstanding any contrary provision of this Agreement, as long as each party protects the Proprietary Information of the other, neither the exposure to the other party's Proprietary Information, nor its ownership of work products, shall prevent either party from using ideas, concepts, expressions, know-how, skills and experience possessed by either party prior to its association with the other party or developed by either party during its association with the other party, so long as the Proprietary Information of the other party is not used. 9.8 All capitalized terms used in this subsection and not otherwise defined shall have the meanings set forth in the Federal "Privacy of Consumer Financial Information" Regulation (12 CFR Part 40), as amended from time to time (the "Privacy Regulation"), 15 issued pursuant to Section 504 of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.). The parties acknowledge that the Privacy Regulation governs disclosures of nonpublic personal information about consumers. a. TERI hereby represents and warrants as follows with respect to any Nonpublic Personal Information released to TERI by Bank One (A) TERI controls access to the network on which any such Nonpublic Personal Information is stored, through the compliance with and utilization of its information security measures which restrict access; and (B) TERI's information security measures are consistent with Bank One's Information Security Standards, a copy of which are attached hereto as Exhibit E. b. TERI hereby agrees that it shall: (A) Comply with the terms and provisions of the Privacy Regulation, including, without limitation, the provisions regarding the sharing of Nonpublic Personal Information (as defined in the Privacy Regulation); (B) Not disclose or use any Nonpublic Personal Information that it obtains from Bank One except to carry out the purposes for which Bank One provided such Nonpublic Personal Information, or as otherwise permitted by the Privacy Regulation and other applicable laws; (C) Comply with Bank One's Information Security Standards; (D) Not make any changes to its security measures that would increase the risk of an unauthorized access; and (E) Not disclose any Nonpublic Personal Information disclosed to TERI by Bank One to any other entity, except as follows: (1) To Bank One's Affiliates, with the prior consent of Bank One. (2) To TERI's affiliates, provided, that its affiliates may, in turn, disclose and use the information only to the extent that TERI may disclose and use the information; (3) To an unaffiliated third party, in the ordinary course of business in order to carry out the activity for which the information was disclosed to TERI pursuant to one of the following exceptions to the Privacy Regulation: (i) as necessary to effect, administer or enforce a transaction that a consumer requests or authorizes; (ii) in connection with servicing or processing a financial product or service that a consumer requests or authorizes, or maintaining or servicing the consumer's account with Bank One; (iii) with the consent or at the direction of the consumer; or (iv) to protect the confidentiality or security of Bank One's records pertaining to the consumer, service, product or transaction; to protect against or prevent actual or potential fraud, unauthorized transactions, claims or other liability; for required institutional risk control; for resolving consumer disputes or inquiries; to persons holding a legal or beneficial interest relating to the consumer, or acting in a fiduciary or representative capacity on behalf of the consumer; to provide information to insurance rate advisory organizations, guaranty funds or agencies, or Bank One's attorneys, accountants and auditors; to the extent specifically permitted or required under other provisions of law, to law enforcement agencies, a state insurance authority, self-regulatory organizations or for an investigation on a matter related to public safety; to a consumer reporting agency in accordance with the Fair Credit Reporting Act; to comply with Federal, State or local laws, rules and other applicable legal requirements, or a properly authorized civil, criminal or regulatory investigation, or subpoena or summons; or to respond to judicial process or government regulatory authorities having jurisdiction over Bank One for examination, compliance or other purposes as authorized by law. c. At any time, upon Bank One's request, TERI shall return to Bank One all Nonpublic Personal Information in its possession to which it is not entitled in its capacity as guarantor or owner of the loan. TERI agrees that money damages would not be a sufficient remedy for any breach of this Section and that Bank One shall be entitled to seek injunctive or other equitable relief to remedy or prevent any breach or threatened breach of this Section by TERI. Such remedy shall not be the exclusive remedy for any breach of this Section, but shall be in addition to all other rights and remedies available to Bank One at law or in equity. Finally, Bank One shall be under no obligation to take any action which, within Bank One's reasonable judgment, would constitute a violation of the Privacy Regulation or its internal privacy policies. 17 d. TERI shall permit Bank One to audit its operations for compliance with Bank One's Information Security Standards, upon reasonable notice from Bank One. e. Notwithstanding any other term to the contrary contained herein, this Section regarding Privacy of Consumer Financial Information shall survive any termination, cancellation, expiration and/or rescission of this Agreement. 9.9 Nothing herein will be construed to prohibit TERI from making, during or after the term of this Agreement, any use or disclosure of information concerning applicants or Borrowers so long as the identity of the applicant or Borrower, and the identity of Bank One as the lender, cannot be discerned by any third party to which such disclosure is made. Without limitation of the foregoing, TERI will be free to sell to The First Marblehead Corporation statistical abstracts of de-identified data based on the Loans guaranteed under this Agreement. 9.10 This Agreement may be executed in counterparts, all of which taken together shall constitute one and the same instrument. Section 10: INSURANCE TERI shall maintain insurance coverage of the types and in the amounts as set forth in Exhibit F. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK. 18 IN WITNESS WHEREOF, TERI and Bank One have caused this instrument to be executed by their duly authorized officers under seal as of the day and year indicated above. THE EDUCATION RESOURCES BANK ONE, NATIONAL ASSOCIATION INSTITUTE, INC. By: /Ann S. Coles/ By: /Myra Busch Goetz/ -------------------------- -------------------------------------- Print Name: Ann S. Coles Print Name: Myra Busch Goetz ------------------ ------------------------------- Title: Acting President Title: Vice President, Education Lending ----------------------- ------------------------------------ 19 TABLE OF EXHIBITS AND SCHEDULES Exhibit A: Underwriting, Origination and Loan Term Guidelines for EDUCATION ONE K-12 Loan Program, EDUCATION ONE Undergraduate Loan Program, EDUCATION ONE Graduate Loan Program, and EDUCATION ONE Continuing Education Loan Program Exhibit B: TERI Servicing Guidelines Exhibit C: Forms of Application and Promissory Note Exhibit D: Form of Truth-in-Lending Disclosure Exhibit E: Bank One Information Security Standards Exhibit F: Insurance Requirements Schedule 3.3: TERI Guaranty Payment Structure by Product 20 EXHIBIT A UNDERWRITING, ORIGINATION AND LOAN TERM GUIDELINES FOR EDUCATION ONE K-12 LOAN PROGRAM, EDUCATION ONE UNDERGRADUATE LOAN PROGRAM, EDUCATION ONE GRADUATE LOAN PROGRAM, AND EDUCATION ONE CONTINUING EDUCATION LOAN PROGRAM [**] 21 EXHIBIT B TERI SERVICING GUIDELINES [**] 22 EXHIBIT C FORMS OF APPLICATION AND PROMISSORY NOTE [**] 23 EXHIBIT D FORM OF TRUTH-IN-LENDING DISCLOSURE [**] 24 EXHIBIT E BANK ONE INFORMATION SECURITY STANDARDS [**] 25 EXHIBIT F INSURANCE REQUIREMENTS [**] 26 SCHEDULE 3.3 TERI GUARANTY PAYMENT STRUCTURE BY PRODUCT [**] 27 AMENDMENT dated November 1, 2002 to the GUARANTY AGREEMENT between THE EDUCATION RESOURCES INSTITUTE, INC. and BANK ONE, N.A. This Amendment Agreement is entered into as of the 1st day of November, 2002 by and between Bank One, N.A. (the "Lender"), and The Education Resources Institute, Inc. ("TERI") with regard to the Guaranty Agreement between the Lender and TERI executed on April 18, 2002 (the "Guaranty Agreement"). WHEREAS, pursuant to the terms of the Guaranty Agreement, TERI provides guaranties of education loans made by the Lender; and WHEREAS, TERI and Lender desire to improve the customer service, collection strategies and pricing that they offer to borrowers; and WHEREAS, such improvements are only possible through the reasonably prudent management of the risks imposed on TERI as a guarantor of borrowers under the Guaranty Agreement, which necessitates the provision of regular and complete loan performance information to TERI by Lender; and WHEREAS, as a loan guarantor, TERI is permitted under Regulation P of the Federal Reserve Board and other applicable law to receive and process such information on its own authority and not merely as a delegate or agent of Lender. NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, it is hereby agreed as follows: 1. The following paragraph will be added to Section 3.5 of the Guaranty Agreement: LENDER will cause its loan servicer to provide a monthly report containing the information set forth on Exhibit B hereto at TERI's expense; TERI shall arrange directly with the loan servicer to receive the report and negotiate any necessary fee. Any other reporting or information shall be provided upon TERI's agreement to reimburse LENDER or its servicer for its incremental cost of such report. 2. A new Exhibit B will be added to the Guaranty Agreement, which shall read as set forth in Exhibit B attached hereto. 28 IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives have executed this Amendment as of the date first written above. THE EDUCATION RESOURCES BANK ONE, N.A. INSTITUTE, INC. By: /Lawrence W. O'Toole/ By: /Myra Busch Goetz/ ---------------------------- ---------------------------- Name: Lawrence W. O'Toole Name: Myra Busch Goetz ----------------------- ----------------------- Title: President Title: Vice President ------------------------- ------------------------- 29 EXHIBIT B SERVICER DATA REQUIREMENTS [**] 30 EXTENSION AGREEMENT This Extension Agreement ("Agreement") is entered into by and among Bank One, National Association, ("Bank One"), The First Marblehead Corporation, a Delaware Corporation ("FMC"), and The Education Resources Institute, Inc. ("TERI"), a Massachusetts not-for-profit corporation, and amends the Education One Loan Program Agreements (as hereinafter defined). This Agreement is dated as of November 1, 2002. WITNESSES WHEREAS, FMC and Bank One have entered into that certain Amended and Restated Note Purchase Agreement dated as of May 1, 2002 (the "NPA"); and WHEREAS, Bank One and TERI have entered into that certain Amended and Restated Guaranty Agreement dated as of April 18, 2002 and effective as of the Conversion Date (as defined therein) (the "Guaranty Agreement"); and WHEREAS, Bank One and TERI have entered into that certain Amended and Restated Loan Origination Agreement dated as of May 1, 2002 (the "LOA"); and WHEREAS, the NPA, Guaranty Agreement and LOA are hereinafter referred to as the "Education One Loan Program Agreements." NOW THEREFORE, in consideration of these presents and the covenants contained herein, the parties hereto hereby agree as follows: 1. NPA EXTENSION. (a) The term of the NPA is hereby extended by amending the second paragraph of Section 10.01 to read as follows: "Provided that the Guaranty Agreement remains in effect, this Agreement shall remain in full force and effect to and including April 30, 2007, and thereafter shall renew for additional one year terms unless either party gives written notice of termination at least 60 days prior to the then-effective expiration date." (b) The first clause in the last sentence of section 2.01 is amended to read: "For the first six (6) years of this Agreement," 2. EXTENSION OF GUARANTY AGREEMENT. TERI and Bank One agree that the Guaranty Agreement is hereby extended by amending the first sentence of Section 8.12 to read: 31 "The initial term of this Agreement shall commence on the Conversion Date, and shall continue through April 30, 2007." 3. LOA. Bank One and TERI agree that LOA requires no further amendment, as it is coterminous with the Guaranty Agreement. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers as of the date above first written. BANK ONE, NATIONAL ASSOCIATION By: /Myra Busch Goetz/ -------------------------------- Its: Vice President THE EDUCATION RESOURCES INSTITUTE, INC. By: /Lawrence W. O'Toole -------------------------------- Its: President THE FIRST MARBLEHEAD CORPORATION By: /Ralph James/ -------------------------------- Its: President 32 AMENDMENT to PROGRAM AGREEMENTS BANK ONE, N.A. (EDUCATION ONE LOAN PROGRAM) This Amendment is entered into as of the 1st day of April, 2003 by and between Bank One, N.A., (the "Lender"), The First Marblehead Corporation ("FMC"), and The Education Resources Institute, Inc. ("TERI") with regard to the Guaranty Agreement between Lender and TERI dated May 13, 2002 (the " Guaranty Agreement"), the Loan Origination Agreement between the same parties dated May 13, 2002 (the "Loan Origination Agreement") and a Note Purchase Agreement between Lender and FMC dated May 1, 2002. Capitalized terms used herein without definition have the meaning set forth in the Guaranty Agreement. WHEREAS, TERI, FMC and Lender desire to adopt new program terms for the 2003-2004 program year; NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, it is hereby agreed as follows: 1. PRICING. TERI and the Lender hereby amend and restate Schedule 3.3 to the Guaranty Agreement by adopting the Schedule 3.3 attached hereto as Exhibit A. 2. PROGRAM GUIDELINES. TERI and the Lender hereby amend and restate the Program Guidelines by adopting the Program Guidelines attached hereto as Exhibit B1. Differences between the new and old Program Guidelines are shown in blackline in Exhibit B2. Promissory notes and the Truth-in-Lending Disclosure for program year 2003-04 for the Education One program shall be agreed to by the parties in separate writings (which may take the form of e-mail correspondence). 3. PURCHASE PRICE. The Lender and FMC hereby amend and restate Section 2.04 of the Note Purchase Agreement to read in its entirety as set forth on Exhibit C attached hereto. 4. TRANSITION. This Amendment shall be effective for each Program loan for which applications are received on or after a date set by TERI by notice delivered to Lender as soon as reasonably possible. 5. FULL FORCE AND EFFECT. As amended herein, the Guaranty Agreement, Loan Origination Agreement, and Note Purchase Agreement remain in full force and effect. 33 IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives have executed this Amendment as of the date first written above. THE EDUCATION RESOURCES BANK ONE, N.A. INSTITUTE, INC. By: /Lawrence W. O'Toole/ By: /Myra Busch Goetz/ ------------------------------- ------------------------------ Name: Lawrence W. O'Toole Name: Myra Busch Goetz ----------------------------- ---------------------------- Title: President Title: Vice President ---------------------------- --------------------------- THE FIRST MARBLEHEAD CORPORATION By: /Ralph James/ ----------------------------- Name: Ralph James - -------------------------------- Title: President - -------------------------------- 34 TABLE OF EXHIBITS Exhibit A Schedule 3.3 Exhibit B1 Program Guidelines Exhibit B2 Blackline of Program Guidelines Exhibit C Section 2.04 Minimum Purchase Price EXHIBIT A SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN TERI AND BANK ONE Bank One ED ONE Product: TERI Guarantee Fee Payment Structure by Program [**] EXHIBIT B1 UNDERWRITING, ORIGINATION AND LOAN TERM --------------------------------------- GUIDELINES FOR: -------------- BANK ONE -------- K-12 LOANS UNDERGRADUATE LOANS GRADUATE LOANS CONTINUING EDUCATION LOANS THE EDUCATION RESOURCES INSTITUTE, INC. 330 Stuart Street Boston, MA 02116 [**] EXHIBIT B2 UNDERWRITING, ORIGINATION AND LOAN TERM GUIDELINES FOR: BANK ONE K-12 LOANS UNDERGRADUATE LOANS GRADUATE LOANS CONTINUING EDUCATION LOANS THE EDUCATION RESOURCES INSTITUTE, INC. 330 Stuart Street Boston, MA 02116 [**] EXHIBIT C 2.04. MINIMUM PURCHASE PRICE. [**] AMENDMENT TO PROGRAM AGREEMENTS (BANK ONE'S CORPORATE ADVANTAGE LOAN PROGRAMS) This Amendment to Program Agreements (this "Amendment") amends the Program Agreements, as defined below, entered into by and among Bank One, National Association ("Bank One"), The First Marblehead Corporation ("FMC"), The Education Resources Institute, Inc. ("TERI"), and U.S. Bank, N.A. This Amendment is dated as of May 1, 2003. W I T N E S S E T H WHEREAS, Bank One desires to offer its Education One loan products with reduced borrower fees to corporate employee and affinity groups; and WHEREAS, the parties hereto agree that such loans will be originated, guaranteed, and purchased under the Program Agreements (as defined below), as modified for such loans in this Amendment; NOW, THEREFORE, in consideration of these presents and the covenants contained herein, the parties hereto hereby agree as follows: I. DEFINITIONS. "Corporate Advantage Loan Programs" shall mean any program (a) offered under the Education One Program Guidelines, as amended from time to time, but involving the discounted consumer pricing set forth in Schedule 3.3 attached hereto, and (b) marketed by Bank One and its corporate partners, including any corporate or affinity groups proposed by Bank One to TERI to which TERI consents in writing. Corporate Advantage Loan Program partners approved by TERI are shown on Exhibit C attached hereto. The parties intend to update Exhibit C as new Corporate Advantage partners are added by Bank One with the consent of TERI. "Deposit and Security Agreement" means that certain agreement bearing that name entered into by and among Bank One, FMC, TERI, and State Street Bank and Trust Company (n/k/a U.S. Bank, N.A.) dated as of April 30, 2001, as amended. "Guaranty Agreement" means that certain amended and restated agreement bearing that name entered into by and between Bank One and TERI dated as of May 13, 2002, as amended. "Loan Origination Agreement" means that certain amended and restated agreement bearing that name entered into between Bank One and TERI dated as of May 13, 2002, as amended. "Note Purchase Agreement" means that certain amended and restated agreement bearing that name by and between FMC and Program Lender dated as of May 1, 2002, as amended. "Program Agreements" means the Guaranty Agreement, the Loan Origination Agreement, the Note Purchase Agreement, and the Deposit and Security Agreement, all as heretofore amended and as heretofore extended pursuant to an Extension Agreement dated November 1, 2002, and including all Exhibits and Schedules thereto, including, without limitation, the Program Guidelines. "Program Guidelines" shall mean the document of that name, as amended from time to time, attached to and made a part of the Guaranty Agreement. II. AMENDMENTS A. Generally. Bank One hereby represents and warrants that the marketing of the Corporate Advantage Loan Programs by Bank One and its corporate partners shall comply with all applicable federal and state laws and regulations. The foregoing representation and warranty is hereby made a part of each of the Program Agreements and any breach of the foregoing representation and warranty shall be subject to indemnification as set forth in the applicable Program Agreement. B. Program Agreements. All Program Agreements are hereby amended to include the above definition of "Corporate Advantage Loan Programs" and in each Program Agreement, the definitions of "Education One Program" and "Program" shall include Corporate Advantage Loan Programs, with the modifications herein that apply to such programs. Each definition of "Loans" or "Education One Loans" in the Program Agreements shall include loans made under the Corporate Advantage Loan Programs, as specified herein. C. GUARANTY AGREEMENT. 1. With respect to all Corporate Advantage Loan Programs, an additional Schedule 3.3 is added to the Guaranty Agreement in the form of Schedule 3.3 attached hereto. 2. "Promissory Notes" shall include the notes attached hereto as Exhibit A, as each shall be amended from time to time under Section 3.2 of the Guaranty Agreement. 3. Section 3.2 of the Guaranty Agreement is hereby amended by adding the following: "Upon TERI's request, Bank One will submit to TERI sample copies of promotional and marketing materials used in connection with the Corporate Advantage Loan Programs. No such delivery of materials shall constitute or be construed as a representation or warranty by TERI that such materials comply with applicable law or with Bank One's obligations under this Agreement, and no such delivery shall excuse Bank One's performance of any of its obligations under this Agreement." D. LOAN ORIGINATION AGREEMENT. With respect to the Corporate Advantage Loan Program, all marketing materials shall direct applicants to a web site created by Bank One for the particular corporate or affinity group in question. Bank One shall have full responsibility for hosting, supporting, and maintaining such web sites and for ensuring that Corporate Advantage Loan Program borrowers are directed to the proper web site and no other web site to apply for their loan. Bank One shall also ensure that such web sites interface with TERI's web application system in a manner directed by TERI to obtain correct fulfillment. E. NOTE PURCHASE AGREEMENT. In the Note Purchase Agreement, Section 2.04 is amended by adding Section 2.04 attached hereto for Corporate Advantage Loan Programs. F. DEPOSIT AND SECURITY AGREEMENT. The Deposit and Security Agreement shall apply to all Corporate Advantage Loan Program loans guaranteed under the Guaranty Agreement. G. SERVICING AGREEMENT The obligations of FMC under this Amendment are conditioned upon FMC and PHEAA entering into a Supplement to Alternative Servicing Agreement substantially in the form attached hereto as Exhibit B. H. In all other respects, the Program Agreements are hereby ratified and confirmed and shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed as of the date above first written. THE EDUCATION RESOURCES INSTITUTE, INC. By: /Lawrence W. O'Toole/ ------------------------------------ Its: President BANK ONE, N.A. By: /Myra Busch Goetz/ ------------------------------------ Its: Vice President THE FIRST MARBLEHEAD CORPORATION By: /Ralph James/ ------------------------------------ Its: President US BANK, N.A. By: /Vaneta Bernard/ ------------------------------------ Its: Vice President TABLE OF EXHIBITS Schedule 3.3 Guaranty Fees and Loan Pricing Schedule 2.04 Revised Section 2.04 of the Note Purchase Agreement Exhibit A Promissory Notes Exhibit B Supplement to Alternative Servicing Agreement Exhibit C Corporate Advantage Partners Approved by TERI SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN TERI AND BANK ONE [**] SCHEDULE 2.04. MINIMUM PURCHASE PRICE. ---------------------- [**] EXHIBIT A PROMISSORY NOTES [**] EXHIBIT B SERVICING SUPPLEMENT SUPPLEMENT TO ALTERNATIVE SERVICING AGREEMENT BETWEEN PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY AND THE FIRST MARBLEHEAD CORPORATION [**] EXHIBIT C CORPORATE ADVANTAGE PARTNERS APPROVED BY TERI [**] FOURTH AMENDMENT TO PROGRAM AGREEMENTS (BANK ONE'S PARENT LOAN PROGRAMS) This Fourth Amendment to Program Agreements (this "Amendment") amends the Program Agreements, as defined below, entered into by and among Bank One, National Association ("Bank One"), The First Marblehead Corporation ("FMC"), The Education Resources Institute, Inc. ("TERI"), and U.S. Bank, N.A. This Amendment is dated as of November 1, 2003. W I T N E S S E T H WHEREAS, the Program Agreements have previously been amended in an Extension Agreement for the Education One program dated November 1, 2002, an Amendment to Program Agreements for program year 2003-04 for the Education One program, dated April 1, 2003, and an Amendment to Program Agreements (Corporate Advantage Program), dated May 1, 2003 (collectively, "Prior Amendments"); and; WHEREAS Bank One desires to offer a new Education One loan product on a trial basis to parents of undergraduate and graduate students; and WHEREAS, the parties hereto agree that such loans will be originated, guaranteed, and purchased under the Program Agreements (as defined below), as modified for such loans in this Amendment; NOW, THEREFORE, in consideration of these presents and the covenants contained herein, the parties hereto hereby agree as follows: I. DEFINITIONS. "Parent Loan Program" shall mean the program (a) offered under the Education One Program Guidelines (Education One Parent Loans) attached hereto as Exhibit A, as amended from time to time ("Parent Loan Program Guidelines"), (b) involving the pricing set forth in Schedule 3.3 attached hereto, (b) marketed by Bank One to pre-screened applicants according to the prescreen criteria in the "Parent Only Loan for Ed One: Pilot Program" attached hereto as Exhibit B ("Prescreen Criteria"); and (4) documented on the promissory note forms attached hereto as Exhibit C, as amended from time to time ("Parent Promissory Notes"). "Deposit and Security Agreement" means that certain agreement bearing that name entered into by and among Bank One, FMC, TERI, and State Street Bank and Trust Company (n/k/a U.S. Bank, N.A.) dated as of April 30, 2001, as previously amended. "Guaranty Agreement" means that certain amended and restated agreement bearing that name entered into by and between Bank One and TERI dated as of May 13, 2002, as previously amended. "Loan Origination Agreement" means that certain amended and restated agreement bearing that name entered into between Bank One and TERI dated as of May 13, 2002, as previously amended. "Note Purchase Agreement" means that certain amended and restated agreement bearing that name by and between FMC and Program Lender dated as of May 1, 2002, as previously amended. "Parent Loan Notes" means notes evidencing loans made under the Parent Loan Program "Program Agreements" means the Guaranty Agreement, the Loan Origination Agreement, the Note Purchase Agreement, and the Deposit and Security Agreement, all as heretofore amended and extended in the Prior Amendments, and including all Exhibits and Schedules thereto, including, without limitation, the Program Guidelines. II. Amendments A. GENERALLY. Bank One hereby represents and warrants that the marketing of the Parent Loan Program by Bank One shall comply with all applicable federal and state laws and regulations. The foregoing representation and warranty is hereby made a part of each of the Program Agreements and any breach of the foregoing representation and warranty shall be subject to indemnification as set forth in the applicable Program Agreement. B. PROGRAM AGREEMENTS. All Program Agreements are hereby amended to include the above definition of "Parent Loan Program" and in each Program Agreement, the definitions of "Education One Program" and "Program" shall include the Parent Loan Program, with the modifications herein that apply to the Parent Loan Program. C. GUARANTY AGREEMENT. In the Guaranty Agreement: 1. With respect to the Parent Loan Program, an additional Schedule 3.3 is added to the Guaranty Agreement in the form of Schedule 3.3 attached hereto. 2. "Loan" shall include loans made under the Parent Loan Program. 2. "Promissory Notes" shall include the Parent Promissory Notes. 3. "Program Guidelines" shall include the Parent Loan Program Guidelines. D. Loan Origination Agreement. With respect to the Parent Loan Program, all marketing materials shall direct applicants to a web site created by Bank One for that particular loan program. Bank One shall have full responsibility for hosting, supporting, and maintaining such web site and for ensuring that Parent Loan Program borrowers are directed to the proper web site and no other web site to apply for their loan. Bank One shall also ensure that such web site interfaces with TERI's web application system in a manner directed by TERI to obtain correct fulfillment. E. Note Purchase Agreement. In the Note Purchase Agreement: 1. In Article I, definitions: a. The definition of "EDUCATION ONE Loan" is amended to include those loans made under the Parent Loan Program that (a) conform to the requirements of the Program Guidelines at the time the loans were made, (b) are serviced by the Servicer (as defined in the Note Purchase Agreement) in accordance with the Program Guidelines, and (c) are covered by and subject to all the benefits of the Guaranty Agreement. b. The definition of "EDUCATION ONE Notes" is amended to include Parent Loan Notes. c. The definition of "EDUCATION ONE Pool" is amended to include Seasoned Loans that are Parent Loan Notes purchased and pledged or intended to be purchased and pledged as collateral in a particular Securitization Transaction. 2. Section 2.04 is amended by adding Section 2.04 attached hereto for the Parent Loan Program. F. DEPOSIT AND SECURITY AGREEMENT. The Deposit and Security Agreement shall apply to all Parent Loan Program loans guaranteed under the Guaranty Agreement. G. In all other respects, the Program Agreements are hereby ratified and confirmed and shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed as of the date above first written. THE EDUCATION RESOURCES INSTITUTE, INC. By: /Michael Gambee/ -------------------------------- Its: Treasurer BANK ONE, N.A. By: /Patrick Conner/ -------------------------------- Its: EVP THE FIRST MARBLEHEAD CORPORATION By: /Ralph James/ -------------------------------- Its: President US BANK, N.A. By: /Vaneta I. Bernard/ -------------------------------- Its: Vice President TABLE OF EXHIBITS Schedule 3.3 Guaranty Fees and Loan Pricing for Parent Loan Program Schedule 2.04 Section 2.04 of the Note Purchase Agreement for the Parent Loan Program Exhibit A Parent Loan Program Guidelines Exhibit B Prescreen Criteria for Parent Loan Program Exhibit C Promissory Notes for Parent Loan Program Exhibit D Supplement to Alternative Servicing Agreement SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN TERI AND BANK ONE FOR BANK ONE'S PARENT LOAN PRODUCT (THIS SCHEDULE 3.3 IS IN ADDITION TO, AND DOES NOT REPLACE, OTHER SCHEDULE 3.3S IN EFFECT FOR THE EDUCATION ONE PROGRAM UNDER THE GUARANTY AGREEMENT.) [**] SCHEDULE 2.04. MINIMUM PURCHASE PRICE. ---------------------- [**] EXHIBIT A PARENT LOAN PROGRAM GUIDELINES [**] EXHIBIT B PRESCREEN CRITERIA FOR PARENT LOAN PROGRAM [**] EXHIBIT C PROMISSORY NOTES FOR PARENT LOAN PROGRAM [**] FIFTH AMENDMENT to PROGRAM AGREEMENTS BANK ONE, N.A. (EDUCATION ONE LOAN PROGRAM, including the CORPORATE ADVANTAGE LOAN PROGRAM) This Fifth Amendment to Program Agreements (this "Amendment") is entered into as of the 1st day of March, 2004 by and between Bank One, N.A., ("Bank One") and The Education Resources Institute, Inc. ("TERI") with regard to the Guaranty Agreement between Bank One and TERI dated May 13, 2002 (the " Guaranty Agreement"). Capitalized terms used herein without definition have the meaning set forth in the Guaranty Agreement. WHEREAS, documents for the Program have been previously amended in an Extension Agreement for the Education One program dated November 1, 2002; an Amendment to Program Agreements for program year 2003-04 for the Education One program, dated April 1, 2003; and an Amendment to Program Agreements (Corporate Advantage Program), dated May 1, 2003; and the Fourth Amendment to Program Agreements (Bank One's Parent Loan Programs); WHEREAS, TERI and Bank One desire to adopt new program terms for the 2004-2005 program year for the Education One Loan Program (including the Corporate Advantage Loan Program); NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, it is hereby agreed as follows: 1. Pricing. TERI and Bank One hereby amend and restate Schedule 3.3 to the Guaranty Agreement by adopting the Schedule 3.3 attached hereto as Exhibit A. The attached Schedule 3.3 does not apply to the Bank One Parent Loan program, which is documented separately. 2. Program Guidelines. TERI and the Lender hereby amend and restate the Program Guidelines by adopting the Program Guidelines attached hereto as Exhibit B. 3. Transition. This Amendment shall be effective for each Program loan for which applications are received on or after a date set by TERI by notice delivered to Lender as soon as reasonably possible. 4. Full Force and Effect. As amended herein, the Guaranty Agreement remains in full force and effect. IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives have executed this Amendment as of the date first written above. THE EDUCATION RESOURCES BANK ONE, N.A. INSTITUTE, INC. By: /Lawrence W. O'Toole/ By: /Patrick Conner/ -------------------------------- -------------------------------- Name: Lawrence W. O'Toole Name: Patrick Conner ------------------------------ ------------------------------ Title: President Title: EVP ----------------------------- ----------------------------- 3 TABLE OF EXHIBITS Exhibit A Schedule 3.3 Exhibit B Program Guidelines EXHIBIT A SCHEDULE 3.3 [**] 1 EXHIBIT B PROGRAM GUIDELINES [**] 2 EX-10.6 8 ncf_ex10-6.txt GUARANTY AGREEMENT EXHIBIT 10.6 EXHIBIT 10.6 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. NOTE: THIS AGREEMENT CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION AND MAY NOT BE DISCLOSED WITHOUT THE CONSENT OF BOTH PARTIES OR AS REQUIRED BY LAW GUARANTY AGREEMENT BETWEEN THE EDUCATION RESOURCES INSTITUTE, INC. AND BANK OF AMERICA, N.A. This Guaranty Agreement (this "Agreement") is made as of this 30th day of April, 2001, by and between The Education Resources Institute, Inc. ("TERI"), a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 330 Stuart Street, Boston, Massachusetts 02116, and Bank of America, N.A. (the "LENDER"), a national banking association organized under the laws of the United States and having a place of business located at 600 Wilshire Blvd, Los Angeles, CA 90017. WHEREAS, The First Marblehead Corporation ("FMC") and Lender have established the Bank of America/GATE Education Loan Programs (the "Program") to assist parents in financing the cost of education at private elementary and secondary schools and at various institutions of higher education; and WHEREAS, pursuant to agreements between the LENDER and FMC, the LENDER is the exclusive lender for the Programs, and has agreed to originate loans conforming to the Programs ("Loans"); and WHEREAS, pursuant to such agreements between the LENDER and FMC, FMC has agreed to purchase or to cause to be formed one or more special purpose business trusts or other entities (each an "SPE") to purchase promissory notes evidencing Loans following origination; and WHEREAS, TERI is in the business of providing financial assistance in the form of loan guaranties to and on behalf of students enrolled in programs of higher education and their parents at TERI-approved schools; and WHEREAS, the LENDER is willing to make Loans to eligible Borrowers under the Program, and TERI is willing to guaranty the payment of principal and interest against the Borrowers' default or certain other events as more fully described below, in accordance with the terms and conditions set forth in this Agreement. 1 NOW, THEREFORE, in consideration of the mutual covenants contained herein, TERI and the LENDER agree as follows: SECTION 1: DEFINITIONS As used in this Agreement the following terms shall have the following meanings: 1.1 "Agent" shall mean State Street Bank and Trust Company, its successors and assigns, in its capacity as Agent under the Deposit and Security Agreement between TERI and the LENDER, of even date herewith. 1.2 "Borrower" shall mean the person, or all persons collectively, including all students, cosigners, coborrowers, guarantors, endorsers, and accommodation parties, who execute a Promissory Note individually or, in the case of multiple Borrowers, severally and jointly, for the purpose of obtaining funds from the LENDER under the Program. 1.3 "Due Diligence" shall mean the utilization by the LENDER of policies, practices and procedures in the origination, servicing and collection of Loans that comply with the standards set forth in the Program Guidelines, that comply with the requirements of federal and state law and regulation, and, to the extent not inconsistent with the foregoing, that are in accord with the LENDER's policies, practices and procedures applicable to its other consumer loan and credit portfolios and with sound lending practices utilized through the consumer lending industry. 1.4 "Guaranty Event" shall mean any of the following events: a. failure of the Borrower to make monthly principal and/or interest payments on a Loan when due, provided such failure persists for a period of one hundred fifty (150) consecutive days, b. the filing of a petition in bankruptcy with respect to the Borrower, or c. the death of the Borrower. For Loans on which the Borrower is two or more persons, none of the above, with the exception of paragraph b, is a Guaranty Event unless one or more such events shall have occurred with respect to all such persons. The foregoing notwithstanding, if a Borrower files a petition in bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code and does not seek a discharge of the affected Loan(s) under 11 U.S.C. ss.523(a)(8)(B) of the U.S. Bankruptcy Code, the LENDER at TERI's request will withdraw its guaranty claim unless or until one of the other Guaranty Events shall have occurred with respect thereto. 1.5 "Loan" shall mean a loan of funds, including all disbursements thereof, made by the LENDER under the Program. 2 1.6 "Note Purchase Agreement" means the agreement of that name between LENDER and FMC dated as of April 30, 2001, as amended. 1.7 "Program Guidelines" shall mean (i) Underwriting, Origination and Loan Term Guidelines for prepGATE Loan Program, Bank of America GATE Undergraduate Loan Program, Bank of America GATE Graduate Loan program and (ii) the TERI Servicing Guidelines, and (iii) Specific Program Summaries for prepGATE Loan Program, Bank of America GATE Undergraduate Loan Program, Bank of America GATE Graduate Loan program, copies of which are attached hereto as Exhibits A-C, and all changes thereto as provided in Section 7 hereof. The Program Guidelines are hereby incorporated in this Agreement by reference and made a part hereof. 1.8 "Promissory Note" shall mean a promissory note executed by a Borrower evidencing a Loan, in the form of Exhibits L or M hereto or as approved pursuant to Section 3.2 below. 1.9 "Securitization Transaction" shall mean and refer to a purchase of Loans guaranteed hereunder by a special purpose entity formed by FMC, which purchase is funded through the issuance of debt instruments or other securities by such entity, the repayment of which is supported by payments on the Loans. SECTION 2: GUARANTEE OF LOANS 2.1 TERI hereby guarantees to the LENDER, unconditionally except as set forth in Section 2.2 below, the payment of 100% of the principal of and accrued interest on every Loan as to which a Guaranty Event has occurred. "Accrued interest" shall mean interest accrued and unpaid to the date of payment in full by TERI, less any interest that shall have accrued after the filing of a claim for guaranty payment submitted to TERI by the LENDER but before TERI shall have received all the documentation necessary to process the guaranty claim as set forth in the Program Guidelines. TERI will use all reasonable efforts to make payment on its guaranty within sixty (60) days, and will in any event make payment within ninety (90) days, of receipt of a demand from the LENDER stating the name of the Borrower and the type of Guaranty Event that has occurred accompanied by the full claim documentation required in the Program Guidelines. 2.2 TERI's guaranty is conditioned upon the following: a. The LENDER must have filed its claim for guaranty payment within the time period and following the procedures specified in the Program Guidelines. b. The LENDER and its predecessors in interest must at all times have exercised Due Diligence with respect to the Loan (or shall have cured any failure to exercise Due Diligence under the reinstatement provisions in Section 2.4 hereof and the Program Guidelines), and must have complied with all other requirements of the Program Guidelines applicable to the Loan. 3 c. The LENDER shall have paid to TERI the Initial Guaranty Fee (as defined in Section 3.3.a below) for the Loan in question, and shall have paid to the Agent any Subsequent Guaranty Fee (as defined in Section 3.3.b below) for the Loan in question which is due and payable as provided in Section 3.3.b below. d. TERI must have received from the LENDER the original Promissory Note, enforceable against the Borrower (except as provided in this Section 2.2(d), below), endorsed to TERI in such manner as to transfer to TERI all rights in and title to such Promissory Note, free and clear of all liens and encumbrances, and of all defenses, counterclaims, offsets, and rights of rescission that might be raised by the Borrower. Submission of a claim to TERI shall constitute the LENDER's certification that the conditions of 2.2.b. and 2.2.d. have been met, and TERI is entitled to rely on such certification. Subsections 2.2.b. and 2.2.d above notwithstanding, if a Loan submitted for guaranty was originated by TERI on behalf of the LENDER pursuant to a Loan Origination Agreement between the parties, (i) TERI will not deny the LENDER's guaranty claim on such Loan if the sole basis for denial is a violation of the Program Guidelines or a violation of Massachusetts or federal law committed by TERI in the origination process, and (ii) TERI will have no recourse against the LENDER in the event that TERI's actions or omissions in the origination process shall have given rise to a defense in favor of the Borrower in a suit on the Promissory Note. 2.3 TERI's guaranty obligation with respect to any Loan shall not be terminated or otherwise affected or impaired (i) by the LENDER's granting an extension to the Borrower of time to make scheduled payments, or by any other indulgence the LENDER may grant to the Borrower, provided that all extensions and other indulgences meet the forbearance standards and other requirements of the Program Guidelines; or, Section 2.2.d above notwithstanding, (ii) because of any fraud in the execution of the Promissory Note, (iii) because of any illegal or improper acts of the Borrower, (iv) because the Borrower may be relieved of liability for such Loan due to lack of contractual capacity or any other statutory exemption. 2.4 If TERI properly denies the LENDER's claim on any Loan on the grounds of Due Diligence deficiencies, the LENDER may thereafter require that TERI reinstate the guaranty of such Loan if (a) the LENDER corrects such deficiencies and receives four (4) consecutive full on-time monthly payments from the Borrower, according to any schedule permitted by the Program Guidelines, and if at the time of the LENDER's request the Borrower is within thirty (30) days of being current on all principal and interest payments on such Loan, or (b) the LENDER satisfies any other method of cure set forth in the Program Guidelines. 2.5 TERI's guaranty hereunder is a continuing and absolute guaranty of payment and not merely of collection, covering Loans made in accordance herewith either (i) prior to termination of this Agreement, or (ii) based upon applications received by the LENDER 4 prior to such termination; and shall not affect TERI's obligations to the LENDER then existing, whether direct or indirect, absolute or contingent, then due or thereafter to become due. 2.6 TERI agrees not to exercise any right of subrogation, reimbursement, indemnity, contribution or the like against the Borrower of any Loan unless and until all TERI's obligations under this Agreement with respect to such Loan have been satisfied in full, except to the extent that it is deemed a valid claimant as a contingent creditor, for example, under Title 11 of the United States Code (the "Bankruptcy Code"), or applicable state law. 2.7 TERI will permit the LENDER, any duly designated representative of the LENDER, or any governmental body having jurisdiction over the LENDER (subject to written notice being provided to TERI by the LENDER, identifying the requesting party and the date of the review), to examine and audit the books and records of TERI pertaining to the Loans, at any time during TERI's regular business hours, provided that in the case of examinations by the LENDER or its representative absent good cause (i) TERI must be given ten (10) business days' prior written notice and, (ii) no more than one such audit may be conducted with respect to any twelve-month period or will take place in any twelve-month period. In no event will any audit be performed during July, August, September, or October in any year except at the request of a regulatory authority having jurisdiction over the LENDER. 2.8 TERI will indemnify the LENDER and hold it harmless from and against any loss, cost, damage and expense that the LENDER may suffer as a result of claims arising out of TERI's actions or omissions relative to the LENDER's participation in the Program. "Expense" includes, without limitation, the LENDER's reasonable attorney's fees. TERI will further indemnify the LENDER and hold it harmless from and against any claim brought against the LENDER by any Borrower based on actions or omissions of the LENDER that were mandated under the Program Guidelines. 2.9 Although the LENDER agrees not to use any loan servicer not approved by TERI, the LENDER acknowledges that TERI's approval of a servicer is in no way an endorsement of such servicer and that TERI shall have no liability to the LENDER for any losses arising from such servicer's failure to comply with Due Diligence or the Program Guidelines or applicable law, nor shall TERI be required to honor any claim submitted by such servicer if the claim does not comply with the requirements of this Agreement. SECTION 3: OBLIGATIONS OF THE LENDER 3.1 In originating, servicing, disbursing, and collecting Loans, the LENDER will comply, and cause its servicer and others acting on its behalf to comply, with all applicable requirements of federal and state laws and regulations. 3.2 The LENDER will use Promissory Notes, Loan applications, disclosure statements, and other forms mutually agreeable to the parties. The forms of application and Promissory 5 Note attached as Exhibits L and M hereto, and the forms of disclosure statement attached hereto as Exhibits, are agreed to be satisfactory to both parties. Without limiting the generality of Section 3.1, the LENDER warrants the conformity of such instruments and any agreed successors thereto with all legal requirements, other than those of federal and Massachusetts law and regulation, applicable to Loans originated by TERI. 3.3 The LENDER will pay a guaranty fee for each Loan (the "Guaranty Fee") as follows: a. At the time of each disbursement of the Loan, the LENDER will remit to TERI [**] percent ([**]%) of the principal amount of Loan disbursed (the "Initial Guaranty Fee"). b. At such times as are set forth in Exhibit K attached hereto and incorporated herein by reference, such additional fees as are set forth in the fifth and sixth columns of Exhibit K ("Subsequent Guaranty Fee"). If the terms of Exhibit K call for any Guaranty Fees to be paid to TERI or to the Agent concurrent with the Securitization Transaction, LENDER may elect either: (i) for LENDER to pay the fees directly (and be reimbursed in the Securitization Transaction), or (ii) for the purchaser to pay the fees directly. In the event that a Guaranty claim is made with respect to a Loan before a Subsequent Guaranty Fee is scheduled to be paid by the LENDER for such Loan, the Subsequent Guaranty Fee shall become immediately due and payable. In the event that a loan is prepaid in full prior to the date that a Subsequent Guaranty Fee is scheduled to be paid by the LENDER for such Loan, the Subsequent Guaranty Fee shall nevertheless become due and payable at the time that would have applied if such prepayment had not occurred. For example, if a Subsequent Guaranty Fee is due at the time of a Securitization Transaction and a Loan is prepaid before it is eligible for Securitization, then the Subsequent Guaranty Fee with respect to such Loan shall become due at the first Securitization Transaction when such Loan would have been eligible for inclusion, had prepayment not occurred. c. Failure to remit a Guaranty Fee within thirty (30) days of the time set forth above will not be a breach of this Agreement but will vitiate TERI's guaranty of the Loan concerned. d. Anything in the Program Guidelines to the contrary notwithstanding, if the LENDER is required under the terms of a Promissory Note to refund all or part of the Guaranty Fee to a Borrower, TERI will refund all or part of the Initial Guaranty Fee and the Agent will refund all or part of any Subsequent Guaranty Fee it has received to the LENDER upon being so advised in writing. e. For purposes of application and interpretation of Exhibit K, LENDER and FMC (acting jointly) shall, from time to time, propose to TERI a list of those schools to be included on a "preferred" list. Loans to finance education at those schools will qualify for "preferred" fee levels shown on Exhibit K. TERI shall, within thirty 6 (30) days, approve or disapprove, in whole or in part, proposals from FMC and LENDER. f. In addition to the Subsequent Guaranty Fees shown in column 6 of Exhibit K, there shall be an additional Subsequent Guaranty Fee payable at Securitization, as follows: Loan Type Fee Amount --------- ---------- Graduate Signature medical [**] percent of total loan or dental greater than amount (exclusive of $25,000 principal amount financed fees) (exclusive of financed fees) Graduate Signature other than [**] percent of total loan medical and dental greater than amount (exclusive of $18,500 principal amount financed fees) (exclusive of financed fees) 3.4 If TERI shall have purchased a Loan due to the occurrence or alleged occurrence of a Guaranty Event described in Section 1.4.a and/or 1.4.b above, the LENDER will promptly repurchase such Loan from TERI, (i) if TERI succeeds, after purchase, in obtaining from the Borrower three full consecutive on-time monthly payments, according to any schedule permitted by the Program Guidelines, provided that on the date of TERI's notice to repurchase, the Borrower is within thirty (30) days of being current on his or her payments on such Loan; provided that this repurchase obligation may be invoked by TERI only once as to any Loan; or (ii) subject to Section 2.3 above, if TERI should determine that the Loan does not meet the conditions set forth in subsection (b), (c) and (d) of Section 2.2 above. 3.5 To the extent permitted by applicable law, the LENDER will deliver to TERI such reports, documents, and other information concerning the Loans as TERI may reasonably require, and permit independent auditors or authorized representatives of TERI, and governmental agencies, if any, having regulatory authority over TERI, to have access to the operational and financial records and procedures directly applicable to Loans and to the LENDER's participation in the Program. 3.6 If the LENDER should violate any term of this Agreement, it will be liable to TERI for all loss, cost, damage, and expense sustained by TERI as a result. The LENDER will indemnify TERI and hold it harmless from and against all loss, cost, damage, and expense that TERI may suffer as a result of claims arising out of the LENDER's actions or omissions relative to the LENDER's participation in the Program unless such actions or omissions are specifically required by this Agreement. The LENDER will similarly indemnify TERI with respect to any defenses arising from the LENDER's violation of or 7 failure to comply with any law, regulation, or order, or any term of this Agreement, that may be raised by a Borrower to any suit upon a Promissory Note. "Expense" includes, without limitation, TERI's reasonable attorney's fees. SECTION 4: INTENTIONALLY OMITTED SECTION 5: REPRESENTATIONS AND WARRANTIES 5.1 Each party represents and warrants to the other that its execution, delivery and performance of this Agreement are within its power and authority, have been authorized by proper proceedings, and do not and will not contravene any provision of law or such party's organization documents or by-laws or contravene any provision of, or constitute an event of default or an event which, with the lapse of time or with the giving of notice or both, would constitute an event of default, under any other agreement, instrument or undertaking by which such party is bound. Each party represents and warrants that it has and will maintain in full force and effect all licenses required under applicable state, federal, local or other law for the conduct of all activities contemplated by this Agreement and comply with all requirements of such applicable law relative to its licenses and the conduct of all activities contemplated by this Agreement. This Agreement and all of its terms and provisions are and shall remain the legal and binding obligation of the parties, enforceable in accordance with its terms subject to bankruptcy and insolvency laws. The warranties given herein shall survive any termination of this Agreement. 5.2 Each party represents and warrants to the other that its computer and processing systems will (a) operate continuously without errors relating to date information; (b) continue to function and will not generate invalid or incorrect results as a result of date information, including any date information representing dates from different centuries or more than one century; and (c) have been designed to be and in fact are, Year 2000 compatible such that (i) all data created or stored by the software will be correct, regardless of the date information contained therein or the date the data is created or stored; (ii) all calculations performed will be correct regardless of the date information used or the date the calculations are performed; (iii) all date-related user interface functions and data fields include a century indication; and (iv) all reports generated will include a century indication. 5.3 The parties acknowledge that TERI is not an insurer or reinsurer and the LENDER expressly waives all claims it might otherwise have under applicable law were TERI to be held by any court or regulatory agency to be acting as an insurer or reinsurer hereunder. The only obligations of TERI to the LENDER shall be those expressly set forth herein. SECTION 6: MISCELLANEOUS 6.1 Neither party is or will hold itself out to be the agent, partner, or joint venturer of the other party with regard to any transaction under or pursuant to this Agreement. 8 6.2 Each party's respective rights, remedies, powers, privileges, and discretions ("Rights and Remedies") shall be cumulative and not exclusive. No delay or omission by either party in exercising or enforcing any of its Rights and Remedies shall operate as to constitute a waiver of them. No waiver by a party of any default under this Agreement shall operate as a waiver of any subsequent or other default under this Agreement. No single or partial exercise by a party of any of its Rights and Remedies shall preclude the other or further exercise of such Rights and Remedies. No waiver or modification by a party of the Rights and Remedies on any one occasion shall be deemed a continuing waiver. A party may exercise its various Rights and Remedies at such time or times and in such order of preference as it in its sole discretion may determine. 6.3 This Agreement represents the entire understanding of the parties with respect to the subject matter hereof. This Agreement, together with any contemporaneous contract concerning credit analysis or other loan origination functions, supersedes all prior communications whatsoever between the parties relative in any way to Loans or the LENDER's participation in the Program. This Agreement may be modified only by written agreement of the parties hereto, except as may otherwise be set forth herein. 6.4 Any determination that any provision of this Agreement is invalid, illegal, or unenforceable in any respect shall not affect the validity, legality, or enforceability of such provision in any other instance and shall not affect the validity, legality, or enforceability of any other provision of this Agreement. 6.5 Each of the parties will timely implement, if it has not already, and will maintain, a reasonable disaster recovery plan. Subject to the foregoing, no party hereto shall be responsible for, or in breach of this Agreement if it is unable to perform as a result of delays or failures due to any cause beyond its control, howsoever arising, and not due to its own act or negligence and that cannot be overcome by the exercise of due diligence. Such causes shall include, but not be limited to, labor disturbances, riots, fires, earthquakes, floods, storms, lightning, epidemics, wars, civil disorder, hostilities, expropriation or confiscation of property, failure or delay by carriers, interference by civil and military authorities whether by legal proceeding or in fact and whether purporting to act under some constitution, decree, law or otherwise, acts of God and perils of the sea. 6.6 This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the conflict of laws provisions thereof. 6.7 This Agreement will be binding on the parties' respective successors and assigns. It may not be assigned by either party without the other's written consent, which will not be unreasonably withheld, provided that: (a) the LENDER may assign any Loan, together with the provisions hereof as applicable to such Loan, to FMC or any SPE; (b) TERI may sub-contract any administrative obligations necessary or convenient to TERI to perform its obligations hereunder to FMC or any subsidiary or affiliate of FMC, (c) LENDER 9 may assign this Agreement to an affiliate who is a national bank who becomes a lender under the Bank of America/GATE Loan Programs. 6.8 Notice for any purpose hereunder may be given by any means requiring receipt signature, or by facsimile transmission confirmed by first class mail. 6.9 Notice for any purpose hereunder may be given by any means requiring receipt signature, or by facsimile transmission confirmed by first class mail. In the case of TERI, notices should be sent to its President, and if by fax, to (617) 451-9425, or to its Senior Vice President-Loan Programs, Fax No. (617) 422-8880. In the case of the LENDER, notices should be sent to Bank of America Student Banking Group, 600 Wilshire Blvd., 4th Floor, Los Angeles, CA 90017, Attention: Kathleen Cannon, and if by fax, to (213) 345-2111. Either party may from time to time change the person, address or fax number for notice purposes by formal notice to the other party. SECTION 7: CHANGES TO PROGRAM GUIDELINES The parties agree that the Program Guidelines will need to be updated and modified to respond to changed conditions from time to time. The parties intend to make such modifications in a manner that does not interfere with the ordinary advertising and origination cycle for education loans. Accordingly, the parties shall exchange requests for modification of the Program Guidelines, including without limitation any requested changes to the provisions of the Program Guidelines concerning the Guaranty Fees, in the fourth calendar quarter of each year and shall conclude their discussions of any modifications by January 1 of each calendar year. All modifications must be mutually acceptable. Any modifications approved by the parties shall become effective on the following March 1. SECTION 8: TERM AND TERMINATION 8.1 The initial term of this Agreement shall commence on May 1, 2001, and shall continue until June 30, 2002. Thereafter, this Agreement shall automatically renew for successive one-year terms unless either party provides written notice of non-renewal and termination not less that ninety (90) days prior to the end of the then-current term. 8.2 In the event that the parties are unable to agree on a proposed modification to the Program Guidelines as provided in Section 7, above, the party proposing the modification shall have the option of terminating this Agreement by providing written notice of termination to the other party. Such termination will be effective on the following March 1. 8.3 To the extent permitted by applicable law, if either party should become subject to bankruptcy, receivership, or other proceedings affecting the rights of its creditors generally, this Agreement will be deemed terminated thereupon immediately without the need of notice from the other party, and the party becoming subject to such proceedings will promptly notify the other party thereof. 10 8.4 Termination shall be prospective only and shall not affect the obligations of the parties hereto which were incurred prior to such termination or any of the warranties and indemnities contained herein or the provisions of Section 9 below (regarding confidentiality). In no event shall the LENDER be entitled to sue for specific performance of this Agreement by TERI with respect to the guaranty of Loans other than those as to which a binding commitment shall have been made prior to the sending of notice of termination of this Agreement. SECTION 9: CONFIDENTIALITY; RESTRICTIONS ON USE OF INFORMATION 9.1 TERI and the LENDER each acknowledge that in the course of the operations contemplated by this Agreement, and in the course of communications relative to this Agreement, it has received and will receive information concerning the other's finances, business plans, business methods, and the like that is not generally known in the student loan industry ("Confidential Information"). Each party will respect and use all reasonable efforts to maintain the confidentiality of the other's Confidential Information unless and until such information becomes generally known through no fault of the receiving party. The LENDER acknowledges that TERI will disclose the LENDER's Confidential Information to First Marblehead Education Resources, Inc. (FMER), to which TERI has subcontracted its obligations under this Agreement pursuant to Section 6.7(b) hereof, and with which the LENDER is contemporaneously entering into a confidentiality agreement. Except for such disclosure to FMER, TERI will not disclose the LENDER's confidential information to any third party other than a subcontractor permitted under Section 6.7, an agent, or a consultant, and in any event only as necessary to assist TERI in carrying out its functions under this Agreement, on a need-to-know basis, and under circumstances that require the disclosee to refrain from redisclosure to any other third party. 9.2 TERI will not disclose to any third party, other than FMER, the name, address, social security number, account number, or other personally identifiable information of any applicant or Borrower. Nothing herein, however, will prevent TERI (or FMER as its subcontractor) from (i) retaining and using such data as necessary for the operation of TERI's guaranty business, or (ii) retaining and using on a non-exclusive basis for any lawful purpose any or all aggregated and de-identified data concerning Loan applicants and Borrowers which does not include the name, address, social security number, account number, or other personally identifiable information of any applicant or Borrower. TERI may sell, assign, transfer or disclose aggregated and de-identified information to third parties including, without limitation, FMC, who may also use such information for any lawful purpose. IN WITNESS WHEREOF, TERI and the LENDER have caused this instrument to be executed by their duly authorized officers under seal as of the day and year indicated above. 11 THE EDUCATION RESOURCES BANK OF AMERICA, N.A. INSTITUTE, INC. By: /Ann S. Coles/ By: /KL Cannon/ --------------------------- ------------------------------ Print Name: Ann S. Coles Print Name: KL Cannon ------------------- ---------------------- Title: Acting President Title: Sr Vice President ------------------------ --------------------------- 12 TABLE OF EXHIBITS Exhibit A -- Underwriting, Origination and Loan Term Guidelines for prepGATE Loan Program, Bank of America GATE Undergraduate Loan Program, Bank of America GATE Graduate Loan program* Exhibit B -- TERI Servicing Guidelines* Exhibit C -- Loan Program Definitions for prepGATE Loan Program, Bank of America GATE Undergraduate Loan Program, Bank of America GATE Graduate Loan program* Exhibit D - [Intentionally Omitted] Exhibit E - [Intentionally Omitted] Exhibit F - [Intentionally Omitted] Exhibit G - [Intentionally Omitted] Exhibit H - [Intentionally Omitted] Exhibit I - [Intentionally Omitted] Exhibit J - [Intentionally Omitted] * Exhibits superceded by the Amendments filed as Exhibits 10.3 - 10.7 to the S-1 filed with the SEC on September 5, 2003 (Registration No. 333-108531). 13 EX-10.7 9 ncf_ex10-7.txt GUARANTY AGREEMENT EXHIBIT 10.7 EXHIBIT 10.7 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. EXECUTION 5/15/02 NOTE: THIS AGREEMENT CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION AND MAY NOT BE DISCLOSED WITHOUT THE CONSENT OF BOTH PARTIES OR AS REQUIRED BY LAW GUARANTY AGREEMENT BETWEEN THE EDUCATION RESOURCES INSTITUTE, INC. AND CHARTER ONE BANK, N.A. (CFS Loan Program) This Guaranty Agreement (this "Agreement") is made as of this 15th day of May, 2002, by and between The Education Resources Institute, Inc. ("TERI"), a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 330 Stuart Street, Boston, Massachusetts 02116, and Charter One Bank, N.A. (the "Lender"), a national bank organized under the laws of the United States and having a principal office located at 1215 Superior Avenue, Cleveland, OH 44114, and a student loan department located at 833 Broadway, Albany, NY, 12207. WHEREAS, TERI is in the business of providing financial assistance in the form of loan guaranties to and on behalf of students enrolled in programs of higher education and their parents at TERI-approved schools; and WHEREAS, the LENDER is willing to make Loans to eligible Borrowers under the Program, and TERI is willing to guaranty the payment of principal and interest against the Borrowers' default or certain other events as more fully described below, in accordance with the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained herein, TERI and the LENDER agree as follows: Section 1: DEFINITIONS As used in this Agreement the following terms shall have the following meanings: 1 1.1 "Agent" shall mean State Street Bank and Trust Company, its successors and assigns, in its capacity as Agent under the Deposit and Security Agreement between TERI and the LENDER, of even date herewith. 1.2 "Borrower" shall mean the person, or all persons collectively, including all students, cosigners, coborrowers, guarantors, endorsers, and accommodation parties, who execute a Promissory Note individually or, in the case of multiple Borrowers, severally and jointly, for the purpose of obtaining funds from the LENDER under the Program. 1.3 "CFS" shall mean Collegiate Funding Services, LLC, a limited liability company organized under the laws of Virginia and having a principal place of business at 100 Riverside Parkway, Fredericksburg, Virginia, 22406. 1.4 "Due Diligence" shall mean the utilization by the LENDER of policies, practices and procedures in the origination, servicing and collection of Loans that comply with the standards set forth in the Program Guidelines and that comply with the requirements of federal and state law and regulation. 1.5 "Guaranty Event" shall mean any of the following events: a. failure of the Borrower to make monthly principal and/or interest payments on a Loan when due, provided such failure persists for a period of one hundred fifty (150) consecutive days, b. the filing of a petition in bankruptcy with respect to the Borrower, or c. the death of the Borrower. For Loans on which the Borrower is two or more persons, none of the above, with the exception of paragraph b, is a Guaranty Event unless one or more such events shall have occurred with respect to all such persons. The foregoing notwithstanding, if a Borrower files a petition in bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code and does not seek a discharge of the affected Loan(s) under 11 U.S.C. ss.523(a)(8)(B) of the U.S. Bankruptcy Code, the LENDER at TERI's request will withdraw its guaranty claim unless or until one of the other Guaranty Events shall have occurred with respect thereto. 1.6 "Loan" shall mean a loan of funds, including all disbursements thereof, made by the LENDER under the Program. 1.7 "Note Purchase Agreement" means the agreement of that name between LENDER and The First Marblehead Corporation ("FMC") dated as of May 15, 2002, as amended, for Program. 2 1.8 "Program" shall mean the CFS Direct to Consumer Loan Program, as more fully described in the Program Guidelines. 1.9 "Program Guidelines" shall mean the CFS Direct to Consumer Program Guidelines attached hereto as Exhibit A, and all changes thereto as provided in Section 7 hereof. The Program Guidelines (a) consist of the TERI Underwriting Guidelines, PHEAA Servicing Guidelines, and Program Borrower Documents (consisting of the forms of Promissory Note and Truth in Lending Disclosure) and (b) are hereby incorporated in this Agreement by reference and made a part hereof. 1.10 "Promissory Note" shall mean a promissory note executed by a Borrower evidencing a Loan, in the form attached hereto as part of the Program Guidelines or as approved pursuant to Section 3.2 below. 1.11 "Securitization Transaction" shall mean and refer to a purchase of Loans guaranteed hereunder by a special purpose entity formed by FMC, which purchase is funded through the issuance of debt instruments or other securities by such entity, the repayment of which is supported by payments on the Loans. Section 2: GUARANTEE OF LOANS 2.1 TERI hereby guarantees to the LENDER, unconditionally except as set forth in Section 2.2 below, the payment of 100% of the principal of and accrued interest on every Loan as to which a Guaranty Event has occurred. "Accrued interest" shall mean interest accrued and unpaid to the date of payment in full by TERI, less any interest that shall have accrued after the filing of a claim for guaranty payment submitted to TERI by the LENDER but before TERI shall have received all the documentation necessary to process the guaranty claim as set forth in the Program Guidelines. TERI will use all reasonable efforts to make payment on its guaranty within sixty (60) days, and will in any event make payment within ninety (90) days, of receipt of a demand from the LENDER stating the name of the Borrower and the type of Guaranty Event that has occurred accompanied by the full claim documentation required in the Program Guidelines. 2.2 TERI's guaranty is conditioned upon the following: a. The LENDER must have filed its claim for guaranty payment within the time period and following the procedures specified in the Program Guidelines. b. The LENDER and its predecessors in interest must at all times have exercised Due Diligence with respect to the Loan (or shall have cured any failure to exercise Due Diligence under the reinstatement provisions in Section 2.4 hereof and the Program Guidelines), and must have complied 3 with all other requirements of the Program Guidelines applicable to the Loan. c. The LENDER shall have paid to TERI the Initial Guaranty Fee (as defined in Section 3.3.a below) for the Loan in question, and shall have paid to the Agent any Subsequent Guaranty Fee (as defined in Section 3.3.b below) for the Loan in question which is due and payable as provided in Section 3.3.b below. d. TERI must have received from the LENDER the original Promissory Note, enforceable against the Borrower (except as provided in this Section 2.2(d), below), endorsed to TERI in such manner as to transfer to TERI all rights in and title to such Promissory Note, free and clear of all liens and encumbrances, and of all defenses, counterclaims, offsets, and rights of rescission that might be raised by the Borrower. Submission of a claim to TERI shall constitute the LENDER's certification that the conditions of 2.2.b. and 2.2.d. have been met, and TERI is entitled to rely on such certification. Subsections 2.2.b. and 2.2.d above notwithstanding, if a Loan submitted for guaranty was originated by TERI on behalf of the LENDER pursuant to a Loan Origination Agreement between the parties, (i) TERI will not deny the LENDER's guaranty claim on such Loan if the sole basis for denial is a violation of the Program Guidelines or a violation of Massachusetts or federal law committed by TERI in the origination process, and (ii) TERI will have no recourse against the LENDER in the event that TERI's actions or omissions in the origination process shall have given rise to a defense in favor of the Borrower in a suit on the Promissory Note. 2.3 TERI's guaranty obligation with respect to any Loan shall not be terminated or otherwise affected or impaired (i) by the LENDER's granting an extension to the Borrower of time to make scheduled payments, or by any other indulgence the LENDER may grant to the Borrower, provided that all extensions and other indulgences meet the forbearance standards and other requirements of the Program Guidelines; or, Section 2.2.d above notwithstanding, (ii) because of any fraud in the execution of the Promissory Note, (iii) because of any illegal or improper acts of the Borrower, (iv) because the Borrower may be relieved of liability for such Loan due to lack of contractual capacity or any other statutory exemption. 2.4 If TERI properly denies the LENDER's claim on any Loan on the grounds of Due Diligence deficiencies, the LENDER may thereafter require that TERI reinstate the guaranty of such Loan if (a) the LENDER corrects such deficiencies and receives four (4) consecutive full on-time monthly payments from the Borrower, according to any schedule permitted by the Program Guidelines, and if at the time 4 of the LENDER's request the Borrower is within thirty (30) days of being current on all principal and interest payments on such Loan, or (b) the LENDER satisfies any other method of cure set forth in the Program Guidelines. 2.5 TERI's guaranty hereunder is a continuing and absolute guaranty of payment and not merely of collection, covering Loans made in accordance herewith either (i) prior to termination of this Agreement, or (ii) based upon applications received by the LENDER prior to such termination; and shall not affect TERI's obligations to the LENDER then existing, whether direct or indirect, absolute or contingent, then due or thereafter to become due. 2.6 TERI agrees not to exercise any right of subrogation, reimbursement, indemnity, contribution or the like against the Borrower of any Loan unless and until all TERI's obligations under this Agreement with respect to such Loan have been satisfied in full, except to the extent that it is deemed a valid claimant as a contingent creditor, for example, under Title 11 of the United States Code (the "Bankruptcy Code"), or applicable state law. 2.7 TERI will permit the LENDER, any duly designated representative of the LENDER, or any governmental body having jurisdiction over the LENDER (subject to written notice being provided to TERI by the LENDER, identifying the requesting party and the date of the review), to examine and audit the books and records of TERI pertaining to the Loans, at any time during TERI's regular business hours, provided that in the case of examinations by the LENDER or its representative absent good cause (i) TERI must be given ten (10) business days' prior written notice and, (ii) no more than one such audit may be conducted with respect to any twelve-month period or will take place in any twelve-month period. In no event will any audit be performed during July, August, September, or October in any year except at the request of a regulatory authority having jurisdiction over the LENDER. 2.8 TERI will indemnify the LENDER and hold it harmless from and against any loss, cost, damage and expense that the LENDER may suffer as a result of claims arising out of TERI's actions or omissions relative to the LENDER's participation in the Program. "Expense" includes, without limitation, the LENDER's reasonable attorney's fees. TERI will further indemnify the LENDER and hold it harmless from and against any claim brought against the LENDER by any Borrower based on actions or omissions of the LENDER that were mandated under the Program Guidelines. 2.9 Although the LENDER agrees not to use any loan servicer not approved by TERI, the LENDER acknowledges that TERI's approval of a servicer is in no way an endorsement of such servicer and that TERI shall have no liability to the LENDER for any losses arising from such servicer's failure to comply with Due Diligence or the Program Guidelines or applicable law, nor shall TERI be 5 required to honor any claim submitted by such servicer if the claim does not comply with the requirements of this Agreement. Section 3: OBLIGATIONS OF THE LENDER 3.1 In originating, servicing, disbursing, and collecting Loans, the LENDER will comply, and cause its servicer and others acting on its behalf to comply, with all applicable requirements of federal and state laws and regulations. 3.2 The LENDER will use Promissory Notes, Loan applications, disclosure statements, and other forms mutually agreeable to the parties. The forms of application and Promissory Note and disclosure statement attached hereto as part of the Program Guidelines are agreed to be satisfactory to both parties. Without limiting the generality of Section 3.1, the LENDER warrants the conformity of such instruments and any agreed successors thereto with all applicable legal requirements, other than those of federal and Massachusetts law and regulation, and TERI warrants their conformity with Massachusetts and federal law. 3.3 The LENDER will pay a guaranty fee for each Loan (the "Guaranty Fee") as follows: a. At the time of disbursement of the Loan, the LENDER will promptly remit to TERI [**] percent ([**]%) of the principal amount of Loan disbursed (the "Initial Guaranty Fee"). b. At the time of disbursement of the Loan, such additional fees as are set forth in the fifth column of Schedule 3.3 ("Subsequent Guaranty Fee"). c. Failure to remit any Guaranty Fee within thirty (30) days of the time set forth above will not be a breach of this Agreement but will void TERI's guaranty of the Loan concerned. d. Anything in the Program Guidelines to the contrary notwithstanding, if the LENDER is required under the terms of a Promissory Note to refund all or part of the Guaranty Fees identified above to a Borrower, TERI will refund all or part of the Initial Guaranty Fee and the Agent will refund all or part of any Subsequent Guaranty Fee it has received to the LENDER upon being so advised in writing. 3.4 If TERI shall have purchased a Loan due to the occurrence or alleged occurrence of a Guaranty Event described in Section 1.4.a and/or 1.4.b above, the LENDER will promptly repurchase such Loan from TERI, (i) if TERI succeeds, after purchase, in obtaining from the Borrower three full consecutive on-time monthly payments, according to any schedule permitted by the Program Guidelines, provided that on the date of TERI's notice to repurchase, the Borrower is within thirty (30) days of being current on his or her payments on such Loan; provided 6 that this repurchase obligation may be invoked by TERI only once as to any Loan; or (ii) subject to Section 2.3 above, if TERI should determine that the Loan does not meet the conditions set forth in subsection (b), (c) and (d) of Section 2.2 above. 3.5 To the extent permitted by applicable law, the LENDER will deliver to TERI such reports, documents, and other information concerning the Loans as TERI may reasonably require, and permit independent auditors or authorized representatives of TERI, and governmental agencies, if any, having regulatory authority over TERI, to have access to the operational and financial records and procedures directly applicable to Loans and to the LENDER's participation in the Program. 3.6 If the LENDER should violate any term of this Agreement, it will be liable to TERI for all loss, cost, damage, and expense sustained by TERI as a result. The LENDER will indemnify TERI and hold it harmless from and against all loss, cost, damage, and expense that TERI may suffer as a result of claims arising out of the LENDER's actions or omissions relative to the LENDER's participation in the Program unless such actions or omissions are specifically required by this Agreement. The LENDER will similarly indemnify TERI with respect to any defenses arising from the LENDER's violation of or failure to comply with any law, regulation, or order, or any term of this Agreement, that may be raised by a Borrower to any suit upon a Promissory Note. "Expense" includes, without limitation, TERI's reasonable attorney's fees. Section 4: REPRESENTATIONS AND WARRANTIES 4.1 Each party represents and warrants to the other that its execution, delivery and performance of this Agreement are within its power and authority, have been authorized by proper proceedings, and do not and will not contravene any provision of law or such party's organization documents or by-laws or contravene any provision of, or constitute an event of default or an event which, with the lapse of time or with the giving of notice or both, would constitute an event of default, under any other agreement, instrument or undertaking by which such party is bound. Each party represents and warrants that it has and will maintain in full force and effect all licenses required under applicable state, federal, local or other law for the conduct of all activities contemplated by this Agreement and comply with all requirements of such applicable law relative to its licenses and the conduct of all activities contemplated by this Agreement. This Agreement and all of its terms and provisions are and shall remain the legal and binding obligation of the parties, enforceable in accordance with its terms subject to bankruptcy and insolvency laws. The warranties given herein shall survive any termination of this Agreement. 4.2 The parties acknowledge that TERI is not an insurer or reinsurer and the LENDER expressly waives all claims it might otherwise have under applicable law were TERI to be held by any court or regulatory agency to be acting as an 7 insurer or reinsurer hereunder. The only obligations of TERI to the LENDER shall be those expressly set forth herein. Section 5: MISCELLANEOUS 5.1 Neither party is or will hold itself out to be the agent, partner, or joint venturer of the other party with regard to any transaction under or pursuant to this Agreement. 5.2 Each party's respective rights, remedies, powers, privileges, and discretions ("Rights and Remedies") shall be cumulative and not exclusive. No delay or omission by either party in exercising or enforcing any of its Rights and Remedies shall operate as to constitute a waiver of them. No waiver by a party of any default under this Agreement shall operate as a waiver of any subsequent or other default under this Agreement. No single or partial exercise by a party of any of its Rights and Remedies shall preclude the other or further exercise of such Rights and Remedies. No waiver or modification by a party of the Rights and Remedies on any one occasion shall be deemed a continuing waiver. A party may exercise its various Rights and Remedies at such time or times and in such order of preference as it in its sole discretion may determine. In no event will either party be liable to the other for special, incidental, or consequential damages, including but not limited to lost profits, even if advised in advance of the possibility of the same, or for punitive or exemplary damages, provided that such exclusions shall not apply to the indemnification against an award of such damages pursuant to a third party claim. 5.3 This Agreement represents the entire understanding of the parties with respect to the subject matter hereof. This Agreement, together with any contemporaneous contract concerning credit analysis or other loan origination functions, supersedes all prior communications whatsoever between the parties relative in any way to Loans or the LENDER's participation in the Program. This Agreement may be modified only by written agreement of the parties hereto, except as may otherwise be set forth herein. 5.4 Any determination that any provision of this Agreement is invalid, illegal, or unenforceable in any respect shall not affect the validity, legality, or enforceability of such provision in any other instance and shall not affect the validity, legality, or enforceability of any other provision of this Agreement. 5.5 Each of the parties will timely implement, if it has not already, and will maintain, a reasonable disaster recovery plan. Subject to the foregoing, no party hereto shall be responsible for, or in breach of this Agreement if it is unable to perform as a result of delays or failures due to any cause beyond its control, howsoever arising, and not due to its own act or negligence and that cannot be overcome by the exercise of due diligence. Such causes shall include, but not be limited to, labor disturbances, riots, fires, earthquakes, floods, storms, lightning, epidemics, wars, civil disorder, hostilities, expropriation or confiscation of property, failure 8 or delay by carriers, interference by civil and military authorities whether by legal proceeding or in fact and whether purporting to act under some constitution, decree, law or otherwise, acts of God and perils of the sea. 5.6 This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the conflict of laws provisions thereof. 5.7 This Agreement will be binding on the parties' respective successors and assigns. It may not be assigned by either party without the other's written consent, which will not be unreasonably withheld, provided that: (a) the LENDER may assign any Loan, together with the provisions hereof as applicable to such Loan, to FMC or any SPE; and (b) TERI has sub-contracted and hereafter may continue to subcontract any administrative obligations necessary or convenient to TERI to perform its obligations hereunder to FMC or any subsidiary or affiliate of FMC. 5.8 Notice for any purpose hereunder may be given by any means requiring receipt signature, or by facsimile transmission confirmed by first class mail. In the case of TERI, notices should be sent to its President, and if by fax, to (617) 451-9425. In the case of the LENDER, notices should be sent to Robert Moriale, Charter One Bank, N.A., Student Lending Department, 833 Boradway, Albany, NY 12207. Either party may from time to time change the person, address or fax number for notice purposes by formal notice to the other party. Section 6: CHANGES TO PROGRAM GUIDELINES The parties agree that the Program Guidelines will need to be updated and modified to respond to changed conditions from time to time. The parties intend to make such modifications in a manner that does not interfere with the ordinary advertising and origination cycle for education loans. Amendments necessary to meet state or federal regulatory requirements may be made at any time. With respect to all other changes, the parties shall exchange requests for modification of the Program Guidelines, including without limitation any requested changes to the provisions of the Program Guidelines concerning the Guaranty Fees, in the first part of the first calendar quarter of each year. Each party shall respond in writing to proposals from the other within 30 days, in writing, and both parties will attempt to resolve any differences within 30 days after receiving a response to a request. All modifications must be mutually acceptable. Any modifications approved by the parties and not requiring system adjustments by the LENDER's loan servicer shall take effect within thirty (30) days after approval. Modifications requiring system adjustments by the LENDER's loan servicer shall take effect as soon after approval as such servicer shall be able to adjust its systems to accept loans made on the modified terms. The parties shall use their best efforts to conclude all negotiations of proposed changes prior to May 1 of each year. The foregoing process shall not apply to modification of the Servicing Guidelines, which are subject to a modification process contained therein. 9 Section 7: TERM AND TERMINATION 7.1 The initial term of this Agreement shall commence on May 15, 2002, and shall continue until May 1, 2003. Thereafter, this Agreement shall automatically renew for successive one-year terms unless either party provides written notice of non-renewal and termination not less that ninety (90) days prior to the end of the then-current term. 7.2 In the event that the parties are unable to agree on a proposed modification to the Program Guidelines as provided in Section 7, above, the party proposing the modification shall have the option of terminating this Agreement by providing written notice of termination to the other party. Such termination will be effective on the following May 1. 7.3 To the extent permitted by applicable law, if either party should become subject to bankruptcy, receivership, or other proceedings affecting the rights of its creditors generally, this Agreement will be deemed terminated thereupon immediately without the need of notice from the other party, and the party becoming subject to such proceedings will promptly notify the other party thereof. 7.4 Termination shall be prospective only and shall not affect the obligations of the parties hereto which were incurred prior to such termination or any of the warranties and indemnities contained herein or the provisions of Section 8 below (regarding confidentiality). Not less than thirty (30) days prior to the effective date of termination, TERI may by additional notice to the Lender terminate its obligation to assume the guaranty of all or any subset of otherwise qualifying Loans as to which a commitment to lend is made after the Lender's receipt of such additional notice. In the absence of such additional notice TERI will, subject to the terms and conditions of this Agreement, assume the guaranty of all Loans as to which a commitment to lend is made prior to the effective date of termination. In the event this Agreement terminates or expires and only one disbursement of a multi-disbursement loan has been made prior to that date, the other disbursement will also be guaranteed pursuant to the terms of this Agreement. Section 8: CONFIDENTIALITY; RESTRICTIONS ON USE OF INFORMATION 8.1 TERI and the LENDER each acknowledge that in the course of the operations contemplated by this Agreement, and in the course of communications relative to this Agreement, it has received and will receive information concerning the other's finances, business plans, business methods, and the like that is not generally known in the student loan industry ("Confidential Information"). Each party will respect and use all reasonable efforts to maintain the confidentiality of the other's Confidential Information unless and until such information becomes generally known through no fault of the receiving party. Without limiting the foregoing, TERI may disclose any of LENDER's Confidential Information to any 10 entity to which TERI subcontracts its obligations under this Agreement pursuant to Section 5.7(b) hereof. 8.2 In accordance with the provisions of Title V of the Gramm-Leach-Bliley Act (the "GLB Act") and Federal Reserve Board Regulation P ("Regulation P"), TERI agrees to respect and protect the security and confidentiality of any "nonpublic personal information" (as defined in the GLB Act and Regulation P) relating to applicants for Loans and to Borrowers, including, where applicable, the restrictions on the re-use and disclosure of such information set forth in the GLB Act and Regulation P. 8.3 Without limiting the foregoing, TERI may retain as its own property and use for any lawful purpose any or all aggregated or de-identified data concerning Loan applicants and Borrowers, which does not include the name, address or social security number of the Loan applicants or Borrowers. TERI may sell, assign, transfer or disclose such information to third parties including, without limitation, FMC, who may also use such information for any lawful purpose. REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK 11 IN WITNESS WHEREOF, TERI and the LENDER have caused this instrument to be executed by their duly authorized officers under seal as of the day and year indicated above. THE EDUCATION RESOURCES CHARTER ONE BANK, N.A. INSTITUTE, INC. By: /Ann S. Coles/ By: /Linda M. Rankey/ Print Name: Ann S. Coles Print Name: Linda M. Rankey Title: Acting President Title: Production Manager 12 TABLE OF EXHIBITS Exhibit A - Program Guidelines for CFS Direct to Consumer Loan Program Schedule 3.3 - Guaranty Fee Amounts 13 EXHIBIT A PROGRAM GUIDELINES FOR CFS DIRECT TO CONSUMER LOAN PROGRAM [**] 14 SCHEDULE 3.3 GUARANTY FEE AMOUNTS [**] 15 AMENDMENT TO GUARANTY AND LOAN ORIGINATION AGREEMENTS This Amendment to Guaranty and Loan Origination Agreements (this "Amendment") is made and entered into as of May 15, 2002, by and among THE EDUCATION RESOURCES INSTITUTE, INC., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 330 Stuart Street, Suite 500, Boston, Massachusetts 02116 ("TERI"), and CHARTER ONE BANK, N.A., a national bank with its principal place of business at 1215 Superior Avenue, Cleveland, OH 44114, and a student loan department located at 833 Broadway, Albany, NY 12207 ("Lender"). WITNESSETH WHEREAS TERI and Lender entered into Guaranty Agreements and Loan Origination Agreements for the CFS Direct to Consumer Loan Program (dated May 15, 2002); AMS TuitionPay Diploma Loan Program (dated May 15, 2002); Education Assistance Services Alternative Loan Program (dated May 15, 2002); NextStudent Alternative Loan Program (dated May 15, 2002); GMAC Alternative Loan Program (dated July 15, 2002); and CLC Alternative Loan Program (dated July 1, 2002) (collectively, the "Guaranty Agreements" and the "Loan Origination Agreements"); and WHEREAS the parties hereto desire to amend the Guaranty Agreements and the Loan Origination Agreements as set forth herein; NOW THEREFORE in consideration of the premises and for other good and valuable consideration, the parties agree as follows: I. Guaranty Agreement Amendments. TERI and Lender hereby agree to amend each of the Guaranty Agreements as set forth below. Each amended section of the Guaranty Agreements is set forth below in its entirety, with deletions to each section marked with a strikethrough and additions to each section underlined twice: A. Section 1.1 of each of the Guaranty Agreements is revised as follows: "1.1 "Agent" shall mean State Street Bank and Trust Company, its successors and assigns, in its capacity as Agent under the Deposit and Security Agreement among TERI, the LENDER, the Agent, and the First Marblehead Corporation ("FMC") of even date herewith (the "Deposit and Security Agreement")." B. Section 1.10 of each of the Guaranty Agreements is revised as follows: "1.10 "Securitization Transaction" shall mean and refer to (a) a purchase of Loans guaranteed hereunder by a special purpose entity ("SPE") formed by FMC, which 16 purchase is funded through the issuance of debt instruments or other securities by such entity, the repayment of which is supported by payments on the Loans or (b) any other transaction whereby a Loan is transferred from the LENDER to FMC or one of its affiliates." C. The second paragraph of Section 2.2.d of each of the Guaranty Agreements is revised as follows: "Subsections 2.2.b. and 2.2.d. above notwithstanding, if a Loan submitted for guaranty was originated by TERI on behalf of the LENDER pursuant to a Loan Origination Agreement between the parties, (i) TERI will not deny the LENDER's guaranty claim on such Loan if the sole basis for denial is a violation of the Program Guidelines or a violation of Massachusetts or federal law committed by TERI in the origination process, and (ii) TERI will have no recourse against the LENDER in the event that TERI's actions or omissions in the origination process shall have given rise to a successful defense in favor of the Borrower in a suit on the Promissory Note." D. Section 2.4 of each of the Guaranty Agreements is revised as follows: TERI may deny the LENDER's Guaranty Claim on any Loan on the grounds of Due Diligence deficiencies. If TERI properly denies the LENDER's claim on any Loan on the grounds of Due Diligence deficiencies, the LENDER may thereafter require that TERI reinstate the guaranty of such Loan if (a) the LENDER corrects such deficiencies and receives four (4) consecutive full on-time monthly payments from the Borrower, according to any schedule permitted by the Program Guidelines, and if at the time of the LENDER's request the Borrower is within thirty (30) days of being current on all principal and interest payments on such Loan, or (b) the LENDER satisfies any other method of cure set forth in the Program Guidelines. E. Section 2.8 of each of the Guaranty Agreements is revised as follows: "2.8 TERI will indemnify the LENDER and hold it harmless from and against any loss, cost, damage or expense that the LENDER may suffer as a result of claims to the extent they arise out of TERI's actions or omissions relative to the LENDER's participation in the Program and do not arise out of the LENDER's actions or omissions. "Expense" includes, without limitation, the LENDER's reasonable attorney's fees. TERI will further indemnify the LENDER and hold it harmless from and against any claim brought against the LENDER by any Borrower based on actions or omissions of the LENDER that were mandated under the Program Guidelines." F. Section 3.1 of each of the Guaranty Agreements is revised as follows: "3.1 In originating, servicing, disbursing, and collecting Loans, the LENDER will comply, and cause its servicer and others acting on its behalf to comply, at all 17 times with all Program Guidelines (including Due Diligence requirements) and all applicable requirements of federal and state laws and regulations." G. Section 3.2 of each of the Guaranty Agreements is revised as follows: "3.2 The LENDER will use Promissory Notes, Loan applications, disclosure statements, and other forms mutually agreeable to the parties. The forms of Promissory Notes, Loan applications and disclosure statement attached hereto as part of the Program Guidelines are agreed to be satisfactory to both parties. Without limiting the generality of Sections 3.1 and 4.1, the LENDER warrants the conformity of such instruments and any agreed successors thereto with all applicable legal requirements, other than those of federal and Massachusetts laws and regulations, and TERI warrants their conformity with Massachusetts and federal law laws. In addition, upon TERI's request, the LENDER will submit to TERI sample copies of promotional and marketing materials used in connection with the Program. No such delivery of materials shall constitute or be construed as a representation or warranty by TERI that such materials comply with applicable law or with the LENDER's obligations under this Agreement, and no such delivery shall excuse the LENDER's performance of any of its obligations under this Agreement." H. Section 3.3.b of each of the Guaranty Agreements, except for the Guaranty Agreement dated May 15, 2002, for the CFS Direct-to-Consumer Loan Program, is revised as follows: "b. At such times as are set forth in Schedule 3.3 attached hereto and incorporated herein by reference, such additional fees as are set forth in the fifth and sixth columns of Schedule 3.3 ("Subsequent Guaranty Fee"). If the terms of Schedule 3.3 call for any Guaranty Fees to be paid to TERI or to the Agent concurrent with the Securitization Transaction, LENDER shall pay the fees directly (and be reimbursed in the Securitization Transaction to the extent provided in the Note Purchase Agreement), or (ii) for the purchaser to pay the fees directly. In the event that a Guaranty claim is made with respect to a Loan before a Subsequent Guaranty Fee is scheduled to be paid by the LENDER for such Loan, the Subsequent Guaranty Fee shall become immediately due and payable. In the event that a loan is prepaid in full prior to the date that a Subsequent Guaranty Fee is scheduled to be paid by the LENDER for such Loan, the Subsequent Guaranty Fee shall nevertheless become due and payable at the time that would have applied if such prepayment had not occurred. For example, if a Subsequent Guaranty Fee is due at the time of a Securitization Transaction and a Loan is prepaid before it is eligible for Securitization, then the Subsequent Guaranty Fee with respect to such Loan shall become due at the first Securitization Transaction when such Loan would have been eligible for inclusion, had prepayment not occurred. In the event that FMC fails to purchase any loan under the Note Purchase Agreement, and the LENDER sells such loan to a third party, the Guaranty Fees due with respect to such loan at the time of a Securitization Transaction will instead be paid by the LENDER at the time the loan is sold to the third party." 18 I. Section 3.3.c of each of the Guaranty Agreements is revised as follows: "c. Failure to remit any Guaranty Fee within thirty (30) days of the time set forth above will not affect the validity of the guaranty for any Loan for which the Guaranty Fee has already been paid in full, but, as a result, TERI will have the right, at its discretion to (i) void its obligation to guarantee or collect the Loan to which such Guaranty Fee relates or (ii) collect the amount of any such Guaranty Fee and to add interest at the rate of eighteen percent (18%) per annum from the disbursement date of the Loan to which such Guaranty Fee relates, plus any costs (including attorneys' fees and expenses) incurred by TERI in collecting or attempting to collect such Guaranty Fee from the LENDER." J. Section 3.4 of each of the Guaranty Agreements is revised as follows: "3.4 If TERI shall have purchased a Loan pursuant to Section 2.1 above, the LENDER will promptly repurchase such Loan upon request from TERI if (i) TERI succeeds, after purchasing, in obtaining from the Borrower three full consecutive on-time monthly payments, according to any schedule permitted by the Program Guidelines, provided that on the date of TERI's notice to repurchase, the Borrower is within thirty (30) days of being current on his or her payments on such Loan, and provided further that this repurchase obligation may be invoked by TERI only once as to any Loan (in which case, the Loan shall be considered "rehabilitated"); or (ii) , if TERI should determine that the Loan does not meet the conditions set forth in subsections b., c. and d. of Section 2.2 above. With respect to the repurchase of any Guaranteed Loan pursuant to this Section 3.4, the repurchase price shall be equal to (1) the remaining unpaid principal balance of such Loan, plus (2) any accrued and unpaid interest thereon." K. (1) Section 3.5 of each of the Guaranty Agreements is revised as follows: "3.5 To the extent permitted by applicable law, the LENDER will (i) deliver to TERI such reports, documents, and other information concerning the Loans as TERI may reasonably require, and (ii) permit independent auditors, authorized representatives of TERI and governmental agencies, if any, having regulatory authority over TERI, to have access to the operational and financial records and procedures directly applicable to Loans and to the LENDER's participation in the Program. LENDER will cause its loan servicer to deliver to TERI such reports, documents, and other detailed information concerning each Loan as TERI may reasonably require. LENDER shall provide a monthly report containing the information set forth on Exhibit B hereto at LENDER's actual cost, if any. Any other reporting or information shall be provided upon TERI's agreement to reimburse LENDER for its incremental cost of such report." 19 (2) Exhibit B is added to each of the Guaranty Agreements in the form of Exhibit B attached hereto. L. Section 3.6 of each of the Guaranty Agreements is revised as follows: "3.6 If the LENDER should violate any term of this Agreement, it will be liable to TERI for all loss, cost, damage or expense sustained by TERI as a result. The LENDER will indemnify TERI and hold it harmless from and against all loss, cost, damage or expense that TERI may suffer as a result of claims to the extent they arise out of the LENDER's actions or omissions relative to the LENDER's participation in the Program unless such actions or omissions are specifically required by this Agreement, and do not arise out of TERI's actions or omissions. The LENDER will similarly indemnify TERI with respect to any defenses arising from the LENDER's violation of or failure to comply with any law, regulation or order, or any term of this Agreement, that may be raised by a Borrower to any suit upon a Promissory Note. "Expense" includes, without limitation, TERI's reasonable attorney's fees." M. Section 5.7 of each of the Guaranty Agreements is revised as follows: "5.7 This Agreement will be binding on the parties' respective successors and assigns. Except as otherwise set forth in this Section 5.7, this Agreement may not be assigned by either party without the other's written consent. a. The LENDER may, without TERI's consent, assign any Loan, together with the provisions hereof as applicable to such Loan, to another entity participating in the Program, or to an SPE formed by the LENDER, in each case upon written notice to TERI. b. TERI specifically acknowledges that FMC or an SPE sponsored by FMC is expected to purchase some or all of the Loans, and this Agreement shall inure to the benefit of FMC or any such SPE upon such purchase. No notice of such purchase or consent to the assignment of the LENDER's rights under this Agreement in connection with a purchase of some or all of the Loans by FMC or any SPE sponsored by FMC shall be necessary. c. In assigning any Loan and its rights under this Agreement relating to such Loan in accordance with Section 5.7(a), (i) the LENDER's written notice to TERI must be made within thirty (30) days after said assignment and must identify each Loan to which such assignment relates, and (ii) TERI will fully cooperate with any Securitization Transaction or other sale of a portfolio of Loans, provided it is given thirty (30) days advance written notice of the date that information or documents are required of it and provided that its reasonable legal fees and other expenses incurred in connection with such transaction are reimbursed by the seller of such Loans. 20 d. Except for any assignment hereunder to FMC or any SPE sponsored by FMC in connection with a purchase of Loans as described in subsection b., above, no assignment of Loans or the LENDER's rights hereunder without TERI's express written consent shall release the LENDER from any liability to TERI under this Agreement arising out of the LENDER's ownership of such Loans (whether arising prior to, as a result of or after the sale of such Loans by the LENDER) including, without limitation, the LENDER's obligation to pay any unpaid Guaranty Fees and to repurchase Loans pursuant to Section 3.4. e. The Lender acknowledges that TERI has outsourced or subcontracted some or all of its administrative functions, including but not limited to the processing of guarantee claims, to First Marblehead Education Resources, Inc. In addition, the Lender acknowledges that TERI has subcontracted and may hereafter subcontract any administrative obligations necessary or convenient to TERI to perform its obligations hereunder, and that such subcontracts do not and shall not require the consent of the LENDER. Such outsourcing or subcontracting shall not relieve TERI of its obligations under this Agreement." N. Section 6 of the Guaranty Agreements is revised as follows: "The parties agree that the Program Guidelines will need to be updated and modified from time to time to respond to changed conditions. The parties intend to make such modifications in a manner that does not interfere with the ordinary advertising and origination cycle for education loans. Amendments necessary to meet state or federal regulatory requirements may be made at any time. With respect to all other changes, the parties shall exchange requests for modification of the Program Guidelines, including without limitation any requested changes to the provisions of the Program Guidelines concerning the Guaranty Fees, in the first part of the first calendar quarter of each year. Each party shall respond in writing to proposals from the other within thirty (30) days, and both parties will attempt to resolve any differences within thirty (30) days after receiving a response to a request. All modifications must be mutually acceptable. Any modifications approved by the parties and not requiring system adjustments by the LENDER's loan servicer shall take effect within thirty (30) days after approval. Modifications requiring system adjustments by the LENDER's loan servicer shall take effect as soon after approval as such servicer shall be able to adjust its systems to accept loans made on the modified terms, and the LENDER agrees to take such actions as are reasonably necessary to ensure that such servicer adjusts its systems as promptly as practicable. The parties shall use their best efforts to conclude all negotiations of proposed changes prior to May 1 of each year. The foregoing process shall not apply to modification of the Servicing Guidelines, which are subject to the modification process contained therein." O. Section 7.2 of each of the Guaranty Agreements is revised as follows: "7.2 In the event that the parties are unable to agree on a proposed modification to the Program Guidelines as provided in Section 6.1, above, the party proposing the 21 modification shall have the option of terminating this Agreement effective immediately upon written notice of termination to the other party, provided that the party desiring to exercise this option to terminate does so within thirty (30) days of the end of the thirty (30) day period provided in Section 6.1 for the resolution of any differences." II. Loan Origination Agreement Amendments. TERI and Lender hereby agree to amend each of the Loan Origination Agreements as set forth below. Each amended section of the Loan Origination Agreements is set forth below in its entirety, with deletions to each section marked with a strikethrough and additions to each section underlined twice: A. The last paragraph of Section 4 of each of the Loan Origination Agreements is revised to read: "All billed fees will be paid within thirty (30) days of the Lender's receipt of TERI's invoice, except fees subject to good faith dispute. Any nondisputed amounts unpaid after sixty (60) days will be subject to a late fee of 1.5% per month until paid in full. TERI's invoice will state the number of applications received, approved, and processed during the month covered by the invoice." B. Section 11.b of each of the Loan Origination Agreements is revised to read: "b. If either party is in breach hereof, the other may terminate this Agreement upon written notice, unless the breach is cured within (i) ten (10) business days after written notice in the case of failure to pay monies due, and (ii) thirty days in the case of all other breaches. If the breach is governed by Section 10 above ("Force Majeure"), the 30-day cure period will be extended day-for-day by the number of days, not to exceed 60, that the party is prevented from performing by circumstances beyond its reasonable control." C. Section 11.d of each of the Loan Origination Agreements is revised to read: "d. Upon termination of this Agreement, all books and records in TERI's possession relating to Loan origination and history under this Agreement will promptly be turned over to the Lender, provided that TERI may keep copies as it deems advisable for archival purpose or as required by applicable law. The foregoing provision shall not affect TERI's right to retain and use loan data in its capacity as guarantor under the Guaranty Agreement." III. Effectiveness. For each Guaranty Agreement and Loan Origination Agreement listed in the first recital above, this Amendment shall take effect as of the date of the original Agreements, as listed in the first recital above. Except as 22 expressly amended herein, each of the Guaranty Agreements and Loan Origination Agreements remains in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers, being first duly authorized, as of the day and year first above written. THE EDUCATION RESOURCES INSTITUTE, INC. By: /Lawrence W. O'Toole/ CHARTER ONE BANK, N.A. By: /Linda M. Rankey/ 23 EXHIBIT B SERVICER DATA REQUIREMENTS [**] 24 AMENDMENT to PROGRAM AGREEMENTS Charter One Bank, N.A. (CFS Alternative Loan Program) This Amendment is entered into as of the 1st day of May, 2003 by and among Charter One Bank, N.A., a national bank organized under the laws of the United States and having a principal office located at 1215 Superior Avenue, Cleveland, OH 44114, and a student loan department located at 833 Broadway, Albany, NY 12207 (the "Lender"), The First Marblehead Corporation, a Delaware corporation having a principal place of business at 30 Little Harbor, Marblehead, Massachusetts ("FMC"), and The Education Resources Institute, Inc., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 31 St. James Avenue, 6th Floor, Boston, Massachusetts 02116 ("TERI") with regard to the Guaranty Agreement between Lender and TERI dated May 15, 2002 (the " Guaranty Agreement"), the Loan Origination Agreement between the same parties dated May 15, 2002 (the "Loan Origination Agreement") and the Note Purchase Agreement between Lender and FMC dated May 15, 2002. Capitalized terms used herein without definition have the meaning set forth in the Guaranty Agreement. WHEREAS the parties entered into a Deposit and Security Agreement, Guaranty Agreement, Loan Origination Agreement, Note Purchase Agreement, and Marketing Agreement, all as heretofore amended, and including all Exhibits and Schedules thereto, on May 15, 2002 (collectively, the "Program Agreements"); and WHEREAS, pursuant to the terms of the Guaranty Agreement, TERI provides guaranties of education loans made by the Lender; and WHEREAS, TERI and Lender desire to adopt new program terms and to improve the customer service and pricing that they offer to borrowers; and WHEREAS, such improvements include offering risk-based pricing to borrowers; WHEREAS, as a loan guarantor, TERI has established a program of risk-based pricing based on tiered guaranty fees and/or tiered interest rates ("Risk-Based Pricing"), which pricing is set forth on Exhibit A, that it believes correspond with the actual risk of lending to borrowers with lesser creditworthiness; WHEREAS, Lender desires to make use of the TERI Risk-Based Pricing system in order to increase overall approval rates and increase its business; and 25 WHEREAS, Lender is free to set its prices to consumers at any level it desires, free from constraint by TERI, so long as Lender pays TERI the guaranty fees required under the Guaranty Agreement and the Program Guidelines incorporated therein; and WHEREAS, in an effort to offer a more diverse education loan program, the parties wish to amend and expand the Program to include loans disbursed through school channels. NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, it is hereby agreed as follows: 1. Pricing. TERI and the Lender hereby amend and restate Schedule 3.3 to the Guaranty Agreement by adopting the Schedule 3.3 attached hereto. TERI bases Risk Based Pricing upon the projected net cost of defaults, which TERI believes provides business justification for the pricing levels set forth in the risk-based pricing it has offered to Lender. Any representation or warranty of compliance with federal or state law made by TERI in the Guaranty Agreement or the Loan Origination Agreement that may relate to Risk Based Pricing does not extend beyond the pricing actually included in the Program Guidelines and in Schedule 3.3 attached hereto. 2. Program Guidelines. TERI and the Lender hereby amend and restate the Program Guidelines by adopting the Program Guidelines attached hereto as Exhibit A. Promissory notes and the Truth-in-Lending Disclosure for program year 2003-04 for the CFS Alternative Loan Program shall be agreed to by the parties in separate writings (which may take the form of e-mail correspondence). 3. Purchase Price. The Lender and FMC hereby amend and restate Section 2.04 of the Note Purchase Agreement to read in its entirety as set forth on Exhibit B attached hereto. 4. Definitions in the Note Purchase Agreement. In the Note Purchase Agreement, (a) The Lender and FMC hereby amend and restate the definition of "Seasoned Loan" to read in its entirety as set forth on Exhibit C attached hereto. (b) The following definitions are added to Section I: (i) "School Channel" loans are those CFS Conforming Loans for which school certification is obtained, as set forth in the Program Guidelines. "School Channel" loans are identified in Schedule 3.3 of the Guaranty Agreement under the heading "Charter One School Channel Collegiate Funding Services Referral Loan Products." (ii) "Direct to Consumer" loans are those CFS Conforming Loans for which proof of enrollment, but no school certification, is obtained, as set forth in the Program Guidelines. "Direct to Consumer" loans are identified in Schedule 3.3 of the Guaranty Agreement under the heading "Charter One Direct to Consumer Collegiate Funding Services Referral Loan Products." 26 5. Program Name. In each of the Program Agreements, the "CFS Direct to Consumer Loan Program" is hereby renamed the "CFS Alternative Loan Program". 6. Transition. This Amendment shall be effective for each Program loan for which applications are received on or after a date set by TERI by notice delivered to Lender as soon as reasonably possible. 6. Full Force and Effect. As amended herein, the Guaranty Agreement, Loan Origination Agreement, and Note Purchase Agreement remain in full force and effect. IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives have executed this Amendment as of the date first written above. THE EDUCATION RESOURCES CHARTER ONE BANK, N.A. INSTITUTE, INC. By: /Lawrence W. O'Toole/ By: /Linda M. Rankey/ Name: Name: Linda M. Rankey Title: Title: Production Manager THE FIRST MARBLEHEAD CORPORATION By: /Ralph James/ Name: Ralph James Title: President 27 SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN TERI AND CHARTER ONE BANK [**] 28 EXHIBIT A CFS ALTERNATIVE LOAN PROGRAM PROGRAM GUIDELINES UPDATED: APRIL 3, 2002 REV 1.0 [GRAPHIC OMITTED] [GRAPHIC OMITTED] 29 Table of Contents Program Overview 1. Schedule 3.3 2. TERI Underwriting Guidelines 3. PHEAA Servicing Guidelines 4. Program Borrower Documents A. Promissory Notes B. Truth in Lending Disclosure [**] 30 EXHIBIT B 2.04 Minimum Purchase Price [**] 31 EXHIBIT C [**] 32 EXHIBIT D Amendment to Referral Marketing Agreement [**] 33 AMENDMENT TO GUARANTY AND LOAN ORIGINATION AGREEMENTS This Amendment to Guaranty and Loan Origination Agreements (this "Amendment") is made and entered into as of January 1, 2004, by and between THE EDUCATION RESOURCES INSTITUTE, INC., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 31 St. James Avenue, 6th Floor, Boston, Massachusetts 02116 ("TERI"), and CHARTER ONE BANK, N.A., a national bank with its principal place of business at 1215 Superior Avenue, Cleveland, OH 44114, and a student loan department located at 833 Broadway, Albany, NY 12207 ("Lender"). WITNESSETH WHEREAS TERI and Lender entered into Guaranty Agreements and Loan Origination Agreements identified on Exhibits A and B hereto (respectively, the "Guaranty Agreements" and the "Loan Origination Agreements"); and WHEREAS the parties hereto desire to amend the Guaranty Agreements and the Loan Origination Agreements as set forth herein; NOW THEREFORE in consideration of the premises and for other good and valuable consideration, the parties agree as follows: I. Guaranty Agreement Amendments. TERI and Lender hereby agree to amend and restate certain sections of each of the Guaranty Agreements as set forth below. A. The definition of "Guaranty Event" in each of the Guaranty Agreements is revised as follows: "1.5 'Guaranty Event' shall mean any of the following events with respect to a Loan: a. failure of a Borrower to make monthly principal and/or interest payments on a Loan when due, provided such failure persists for a period of one hundred eighty (180) consecutive days, b. the filing of a petition in bankruptcy with respect to a Borrower, or c. the death of a Borrower. For Loans on which the Borrower is two or more persons, none of the above, with the exception of paragraph b., shall be a Guaranty Event unless one or more such events shall have occurred with 34 respect to all such persons. The foregoing notwithstanding, if a Borrower files a petition in bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code and does not seek a discharge of the affected Loan(s) under 11 U.S.C. ss.523(a)(8)(B) of the U.S. Bankruptcy Code, the LENDER at TERI's request will withdraw its guaranty claim unless or until one of the other Guaranty Events shall have occurred with respect thereto." B. The following provision is hereby added to Section 3.3 of each of the Guaranty Agreements, as follows: "In the event FMC has no further right or obligation under the Note Purchase Agreement to purchase a Loan in a Securitization Transaction, the LENDER shall pay all Subsequent Guaranty Fees that are due to be paid at the time of securitization as set forth in Schedule 3.3. Such fees shall be payable (A) with respect to any Loan already funded, within thirty (30) days after presentation of an invoice by TERI to the Lender, and (B) with respect to Loans funded after the date of such invoice, at the time of disbursement." C. Section 8 of each of the Guaranty Agreements is hereby amended and restated to read in its entirety as follows: "Section 8: CONFIDENTIALITY; RESTRICTIONS ON USE OF INFORMATION 8.1 During the course of negotiating this Agreement and hereafter during the pendency of this Agreement, the parties from time to time may have revealed or may hereafter reveal to each other certain information concerning their respective business plans, business methods, financial data and projections, and/or information that is not generally known in the student loan industry, including, without limitation, the terms and conditions of this Agreement. All the foregoing is referred to herein as "Confidential Information." In TERI's case, its Confidential Information also includes, but is not limited to, information concerning the operation of its telephone and on-line loan applications procedures, and its online credit scoring system. Each party will use reasonable efforts to preserve the confidentiality of Confidential Information contained herein or disclosed to it by the other party, such efforts to be not less vigilant than those that such party uses to protect its own proprietary information. The foregoing is subject to the following qualifications: a. No party will be so bound with respect to information that is or becomes public knowledge in the student loan industry 35 (but if it does so through any fault of such party that fault will be considered a material breach of this Agreement); b. No party will be so bound with respect to information that is now or hereafter comes into its possession by its own documented independent efforts or from a third party who, so far as the recipient party has reason to believe, is under no comparable restriction with respect to such information; c. Either party may disclose Confidential Information to its attorneys, auditors, agents, and consultants who are bound to maintain the confidentiality of such information; d. Either party may disclose Confidential Information in the context of any regulatory review of its operations or as compelled by law, regulation, or court order, provided that in the context of a court order the party required to disclose will (i) give the other party prompt written notice upon learning of the requirement so that the other party may take appropriate action to prevent or limit the disclosure, (ii) consult with the other party and use all reasonable efforts to agree on the nature, form, timing and content of the disclosure, (iii) except as otherwise agreed under (ii), disclose no more than its counsel advises is legally required, and (iv) inform the Court and all counsel concerned that such information is and should be treated as confidential information of the other party; and e. Information concerning Loans and Borrowers that comes into TERI's possession shall not be considered Confidential Information of the Lender. f. Without limiting the foregoing, TERI may disclose any of the LENDER's Confidential Information to any entity to which TERI subcontracts its obligations under this Agreement pursuant to Section 5.7(e) hereof. 8.2 In accordance with the provisions of Title V of the Gramm-Leach-Bliley Act (the "GLB Act") and Federal Reserve Board Regulation P ("Regulation P"), TERI agrees, as a financial institution subject to Regulation P, to respect and protect the security and confidentiality of any "nonpublic personal information" (as defined in the GLB Act and Regulation P) relating to applicants for Loans and to Borrowers, including, where applicable, the restrictions on the re-use and disclosure of such information set forth in the GLB Act and Regulation P. 36 8.3 Without limiting the foregoing, TERI may retain as its own property and use for any lawful purpose any or all data concerning Loan applicants and Borrowers that does not include names, addresses or social security numbers. TERI may sell, assign, transfer or disclose aggregated or de-indentified data concerning Loan applicants and Borrowers that does not include names, addresses, social security numbers, account numbers, or any other identifying information to third parties including, without limitation, FMC, who may also use such information for any lawful purpose. 8.4 The parties acknowledge that a breach of any of the terms of this Section 8 would cause irreparable harm to the non-breaching party for which it could not be adequately compensated by monetary damages. Accordingly, both parties agree that, in addition to all other remedies available to the non-breaching party in an action at law, in the event of any breach or threatened breach by either party of the terms of this Section 8, the non-breaching party shall, without the necessity of proving actual damages or posting any bond or other security, be entitled to temporary and permanent injunctive relief, including, but not limited to, specific performance of the terms of this Section 8." II. Loan Origination Agreement Amendments. TERI and Lender hereby agree to amend and restate certain sections of each of the Loan Origination Agreements as set forth below. A. Section 7 of each of the Loan Origination Agreements is hereby amended to read as follows: "Section 7: WARRANTIES AND REPRESENTATIONS a. TERI and the Lender each represents and warrants to the other that it has full power and authority to enter into, deliver and perform this Agreement. b. TERI and the Lender each represents and warrants to the other that it will at all times comply with the Truth-in-Lending Act, the Equal Credit Opportunity Act and similar consumer protection statutes adopted by the Federal Government and all other applicable jurisdictions and duly adopted regulations pertaining to each party. The foregoing notwithstanding, TERI will comply with all federal, state and local laws, rules and regulations applicable to the origination, disbursement, and maintenance of records concerning Loans subject to this Agreement, it being understood and agreed that such state and local laws, rules, and 37 regulations shall, with respect to TERI, only include (1) the laws of the Commonwealth of Massachusetts, (2) the laws of any other state that duplicate federal requirements, and (3) those state and local laws, rules, and regulations of which LENDER specifically informs TERI in writing and with which TERI specifically agrees in writing to comply (collectively, "Applicable Laws"). c. Without limiting the generality of the foregoing, TERI represents and warrants that: (1) the origination of each Loan and any accompanying notices and disclosures conform to all Applicable Laws; (2) the origination of each Loan was conducted in accordance with the Program Guidelines, including, without limitation, the requirements therein that (A) no loan be originated for a dead borrower or a borrower involved in a bankruptcy proceeding; (B) at least one borrower for each loan must be a United States citizen/national or a permanent resident alien of the United States, and (C) the borrower must have attained the age of majority at the time of the loan application; (3) following procedures, policies, and underwriting criteria set forth in the Program Guidelines, TERI will obtain for each Loan a promissory note duly and properly executed by each borrower, any student maker named therein, and any cosigner thereunder; (4) the promissory notes TERI uses in the performance of its obligations hereunder will conform to the promissory note forms included in the Program Guidelines and shall require interest accrual (whether or not such interest will be paid beginning shortly after disbursement of the loan or shall instead be capitalized) and provide or, when the payment schedule with respect thereto is determined, will provide for payments on a periodic basis that fully amortize the principal amount of the loan by its maturity, as such maturity may be modified in accordance with any applicable deferral forbearance periods granted in accordance with applicable law and the Program Guidelines; (5) each Loan will be originated by TERI in the United States in the ordinary course of its business; (6) each Loan will be made to an eligible borrower under the Program Guidelines with legal capacity to execute and deliver the promissory note under Applicable Laws; 38 (7) each promissory note documenting a Loan will contain consumer loan terms and involve guaranty fees payable to TERI in strict conformity with the Program Guidelines; (8) no application for a Loan shall be rejected, approved, or discouraged by TERI on the basis of race, sex, color, religion, national origin, age (other than laws limiting the capacity to enter a binding contract) or marital status, the fact that all or a part of the borrower's or co-signer's income derives from any public assistance program, or the fact that the borrower or any co-signer has, in good faith, exercised any right under the Consumer Credit Protection Act; and (9) TERI will commit no fraud, error, omission, misrepresentation, or similar occurrence with respect to any Loan originated hereunder and TERI's guaranty obligation under the Guaranty Agreement shall not be terminated or otherwise affected or impaired with respect to any Loan (A) by the LENDER's granting an extension of time to the Borrower to make scheduled payments, or by any other indulgence the LENDER may grant to the Borrower, provided that all extensions and other indulgences meet the forbearance standards and other requirements of the Program Guidelines, (B) because of any fraud in the execution of the promissory note relating to such Loan, (C) because of any illegal or improper acts of the Borrower, or (D) because the Borrower may be relieved of liability for such Loan due to lack of contractual capacity or any other statutory exemption." III. Effectiveness. This Amendment shall take effect as of the date first listed above. Except as expressly amended herein, each of the Guaranty Agreements and Loan Origination Agreements remains in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers, being first duly authorized, as of the day and year first above written. THE EDUCATION RESOURCES INSTITUTE, INC. By: /Lawrence W. O'Tooole/ CHARTER ONE BANK, N.A. By: /Linda M. Rankey-Froggett/ 39 EXHIBIT A Guaranty Agreements - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (Collegiate Funding Services, LLC) - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002, May 1, 2003, October 1, 2003, and November 17, 2003 (Academic Management Services, Inc.) - ------------------------------------------ May 15, 2002, as amended May 1, 2003 (Pinnacle Peak Solutions, Inc., d/b/a NextStudent) - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (EAS Group, LLC) - ------------------------------------------ July 1, 2002, as amended May 1, 2003 (College Loan Corporation) - ------------------------------------------ September 20, 2002, as amended May 1, 2003 (Southwest Student Services Corporation) - ------------------------------------------ December 4, 2002, as amended May 1, 2003 and November 17, 2003 (Comerica Bank) - ------------------------------------------ March 17, 2003, as amended May 1, 2003 (PNC Bank) - ------------------------------------------ May 1, 2003 (Student Assistance Foundation of Montana) - ------------------------------------------ May 15, 2003 (Navy Federal Credit Union) - ------------------------------------------ May 15, 2003, as amended in an amendment dated May 15, 2003 (Washington Mutual Bank, F.A.) - ------------------------------------------ 40 - ------------------------------------------ May 15, 2003 (Education Services Foundation) - ------------------------------------------ June 30, 2003, as amended September 30, 2003 and November 17, 2003 (effective September 30, 2003) (Student Loan Corporation) - ------------------------------------------ July 15, 2003 (Brazos Higher Education Service Corporation) - ------------------------------------------ September 15, 2003 (Higher Education Servicing Corporation) - ------------------------------------------ September 20, 2003 (Marshall & Ilsley Bank) - ------------------------------------------ October 31, 2003 (Pennsylvania Higher Education Assistance Agency) - ------------------------------------------ November 17, 2003 (Illinois Designated Account Purchasing Program) - ------------------------------------------ December 1, 2003 (Creditron Financial Services, Inc.) - ------------------------------------------ December 29, 2003 (AAA Southern New England Bank) - ------------------------------------------ 41 EXHIBIT B Loan Origination Agreements - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (Collegiate Funding Services, LLC) - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (Academic Management Services, Inc.) - ------------------------------------------ May 15, 2002, as amended May 1, 2003 (Pinnacle Peak Solutions, Inc., d/b/a NextStudent) - ------------------------------------------ May 15, 2002, as amended May 15, 2002 (EAS Group, LLC) - ------------------------------------------ July 1, 2002, as amended in an amendment effective July 1, 2002 (College Loan Corporation) - ------------------------------------------ September 20, 2002 (Southwest Student Services Corporation) - ------------------------------------------ December 4, 2002 (Comerica Bank) - ------------------------------------------ March 17, 2003 (PNC Bank) - ------------------------------------------ May 1, 2003 (Student Assistance Foundation of Montana) - ------------------------------------------ May 15, 2003 (Navy Federal Credit Union) - ------------------------------------------ May 15, 2003 (Washington Mutual Bank, F.A.) - ------------------------------------------ May 15, 2003 (Education Services Foundation) - ------------------------------------------ June 30, 2003, as amended September 30, 2003 - ------------------------------------------ 42 - ------------------------------------------ (Student Loan Corporation) - ------------------------------------------ July 15, 2003 (Brazos Higher Education Service Corporation) - ------------------------------------------ September 15, 2003 (Higher Education Servicing Corporation) - ------------------------------------------ September 20, 2003 (Marshall & Ilsley Bank) - ------------------------------------------ October 31, 2003 (Pennsylvania Higher Education Assistance Agency) - ------------------------------------------ November 17, 2003 (Illinois Designated Account Purchasing Program) - ------------------------------------------ December 1, 2003 (Creditron Financial Services, Inc.) - ------------------------------------------ December 29, 2003 (AAA Southern New England Bank) - ------------------------------------------ 43 FIFTH AMENDMENT to PROGRAM AGREEMENTS Charter One Bank, N.A. (CFS Alternative Loan Program) This Amendment is entered into as of the 1st day of March, 2004 by and among Charter One Bank, N.A., a national bank organized under the laws of the United States and having a principal office located at 1215 Superior Avenue, Cleveland, OH 44114, and a student loan department located at 833 Broadway, Albany, NY 12207 (the "Lender") and The Education Resources Institute, Inc., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 31 St. James Avenue, 6th Floor, Boston, Massachusetts 02116 ("TERI") with regard to the Guaranty Agreement between Lender and TERI dated May 15, 2002 (the " Guaranty Agreement"). Capitalized terms used herein without definition have the meaning set forth in the Guaranty Agreement. WHEREAS, documents for the Program have been previously amended in an Amendment to the Note Purchase Agreement dated May 15, 2002; an Amendment to the Referral Marketing Agreement dated December 6, 2002; a Second Amendment to the Note Purchase Agreement dated December 6, 2002; and an Amendment to Program Agreements dated May 1, 2003, for program year 2003-04; and WHEREAS, TERI and Lender desire to adopt new program terms for the 2004-2005 program year for the CFS Alternative Loan Program; NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, it is hereby agreed as follows: 1. Pricing. TERI and the Lender hereby amend and restate Schedule 3.3 to the Guaranty Agreement by adopting the Schedule 3.3 attached hereto. 2. Program Guidelines. TERI and the Lender hereby amend and restate the Program Guidelines by adopting the Program Guidelines attached hereto as Exhibit A. 3. Transition. This Amendment shall be effective for each Program loan for which applications are received on or after a date set by TERI by notice delivered to Lender as soon as reasonably possible. 4. Full Force and Effect. As amended herein, the Guaranty Agreement remains in full force and effect. 44 IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives have executed this Amendment as of the date first written above. THE EDUCATION RESOURCES CHARTER ONE BANK, N.A. INSTITUTE, INC. By: /Lawrence W. O'Toole/ By: /Linda M. Rankey-Froggett/ Name: Name: Linda M. Rankey-Froggett Title: President Title: Production Manager 45 SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN TERI AND CHARTER ONE BANK [**] 46 EXHIBIT A CFS ALTERNATIVE LOAN PROGRAM PROGRAM GUIDELINES UPDATED: FEBRUARY 10, 2004 EFFECTIVE: PROGRAM YEAR 2004-5 [GRAPHIC OMITTED] [GRAPHIC OMITTED] 47 Table of Contents Program Overview 1. Schedule 3.3 2. TERI Underwriting Guidelines 3. PHEAA Servicing Guidelines 4. Program Borrower Documents A. Promissory Notes B. Truth in Lending Disclosure [**] 48 AMENDMENT TO GUARANTY AND LOAN ORIGINATION AGREEMENTS This Amendment to Guaranty and Loan Origination Agreements (this "Amendment") is made and entered into as of, and shall be effective as of, March 1, 2004, by and between THE EDUCATION RESOURCES INSTITUTE, INC., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 31 St. James Avenue, 6th Floor, Boston, Massachusetts 02116 ("TERI"), and CHARTER ONE BANK, N.A., a national bank with its principal place of business at 1215 Superior Avenue, Cleveland, OH 44114, and a student loan department located at 833 Broadway, Albany, NY 12207 ("Lender"). WITNESSETH WHEREAS TERI and Lender entered into Guaranty Agreements and Loan Origination Agreements identified on Exhibits A and B hereto (respectively, the "Guaranty Agreements" and the "Loan Origination Agreements"); and WHEREAS the parties hereto desire to amend the Guaranty Agreements and the Loan Origination Agreements to replace references to and associated with (a) Deposit and Security Agreements among Lender, FMC, The Education Resources Institute, Inc. ("TERI"), and U.S. Bank National Association ("U.S. Bank"), and (b) Control Agreements and Security Agreements entered into prior to the date hereof, to references to and associated with a Security Agreement of even date herewith between Lender and TERI ("Security Agreement") and a Control Agreement of even date herewith among Lender, U.S. Bank, and FMC ("Control Agreement");; NOW THEREFORE in consideration of the premises and for other good and valuable consideration, the parties agree as follows: 1. Guaranty Agreement Amendments. TERI and Lender hereby amend each of the Guaranty Agreements as follows: a. Each definition of "Agent" is deleted and references to the term "Agent" are replaced with references to "Custodian"; b. Each definition of "Borrower" is renumbered as Section 1.1; c. A defined term "Custodian" is hereby added (or, if applicable, revised) as Section 1.2 to read as follows: "`Custodian' shall mean U.S. Bank National Association, its successors and assigns, in its capacity as Depository Institution under the Security Agreement dated March 1, 2004, and as Bank under the Control Agreement dated March 1, 2004 (together, "Security Documents"), or a successor custodian appointed in accordance with the Security Documents;" 49 d. A defined term "Security Documents" is added (or, as applicable, revised) as Section 1.12 to read as follows: "`Security Documents' shall have the meaning assigned in Section 1.2;" e. In Section 3.3(b)(i) the words "to TERI or to the Agent" are, as applicable, deleted so that Section 3.3(b)(i) of each Guaranty Agreement reads in its entirety as follows: "If the terms of Schedule 3.3 call for any Guaranty Fees to be paid concurrent with the Securitization Transaction, the LENDER shall pay such fees directly (and be reimbursed in the Securitization Transaction to the extent provided in the Note Purchase Agreement)." f. Each and every reference to the "Deposit and Security Agreement" is replaced with a reference to the "Security Documents." II. Loan Origination Agreement Amendments. TERI and Lender hereby amend each of the Loan Origination Agreements by replacing each reference to the "Deposit and Security Agreement" with a reference to the "Security Agreement." III. Full Force and Effect. Except as expressly amended herein, each of the Guaranty Agreements and Loan Origination Agreements remains in full force and effect, each according to its terms. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers, being first duly authorized, as of the day and year first above written. THE EDUCATION RESOURCES INSTITUTE, INC. By: /Lawrence W. O'Toole/ CHARTER ONE BANK, N.A. By: /Linda M. Rankey-Froggett/ 50 EXHIBIT A GUARANTY AGREEMENTS - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (Collegiate Funding Services, LLC) - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002, May 1, 2003, October 1, 2003, and November 17, 2003 (Academic Management Services, Inc.) - ------------------------------------------ May 15, 2002, as amended May 1, 2003 (Pinnacle Peak Solutions, Inc., d/b/a NextStudent) - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (EAS Group, LLC) - ------------------------------------------ July 1, 2002, as amended May 1, 2003 (College Loan Corporation) - ------------------------------------------ September 20, 2002, as amended May 1, 2003 (Southwest Student Services Corporation) - ------------------------------------------ December 4, 2002, as amended May 1, 2003 and November 17, 2003 (Comerica Bank) - ------------------------------------------ March 17, 2003, as amended May 1, 2003 (PNC Bank) - ------------------------------------------ May 1, 2003 (Student Assistance Foundation of Montana) - ------------------------------------------ May 15, 2003 (Navy Federal Credit Union) - ------------------------------------------ May 15, 2003, as amended in an amendment dated May 15, 2003 (Washington Mutual Bank, F.A.) - ------------------------------------------ May 15, 2003 - ------------------------------------------ 51 - ------------------------------------------ (Education Services Foundation) - ------------------------------------------ June 30, 2003, as amended September 30, 2003 and November 17, 2003 (effective September 30, 2003) (Student Loan Corporation) - ------------------------------------------ July 15, 2003 (Brazos Higher Education Service Corporation) - ------------------------------------------ September 15, 2003 (Higher Education Servicing Corporation) - ------------------------------------------ September 20, 2003 (Marshall & Ilsley Bank) - ------------------------------------------ October 31, 2003 (Pennsylvania Higher Education Assistance Agency) - ------------------------------------------ November 17, 2003 (Illinois Designated Account Purchasing Program) - ------------------------------------------ December 1, 2003 (Creditron Financial Services, Inc.) - ------------------------------------------ December 29, 2003 (AAA Southern New England Bank) - ------------------------------------------ February 17, 2004 (Next Student Consolidation) - ------------------------------------------ 52 EXHIBIT B LOAN ORIGINATION AGREEMENTS - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (Collegiate Funding Services, LLC) - ------------------------------------------ May 15, 2002, as amended in amendments dated May 15, 2002 and May 1, 2003 (Academic Management Services, Inc.) - ------------------------------------------ May 15, 2002, as amended May 1, 2003 (Pinnacle Peak Solutions, Inc., d/b/a NextStudent) - ------------------------------------------ May 15, 2002, as amended May 15, 2002 (EAS Group, LLC) - ------------------------------------------ July 1, 2002, as amended in an amendment effective July 1, 2002 (College Loan Corporation) - ------------------------------------------ September 20, 2002 (Southwest Student Services Corporation) - ------------------------------------------ December 4, 2002 (Comerica Bank) - ------------------------------------------ March 17, 2003 (PNC Bank) - ------------------------------------------ May 1, 2003 (Student Assistance Foundation of Montana) - ------------------------------------------ May 15, 2003 (Navy Federal Credit Union) - ------------------------------------------ May 15, 2003 (Washington Mutual Bank, F.A.) - ------------------------------------------ May 15, 2003 (Education Services Foundation) - ------------------------------------------ June 30, 2003, as amended September 30, 2003 (Student Loan Corporation) - ------------------------------------------ 53 - ------------------------------------------ July 15, 2003 (Brazos Higher Education Service Corporation) - ------------------------------------------ September 15, 2003 (Higher Education Servicing Corporation) - ------------------------------------------ September 20, 2003 (Marshall & Ilsley Bank) - ------------------------------------------ October 31, 2003 (Pennsylvania Higher Education Assistance Agency) - ------------------------------------------ November 17, 2003 (Illinois Designated Account Purchasing Program) - ------------------------------------------ December 1, 2003 (Creditron Financial Services, Inc.) - ------------------------------------------ December 29, 2003 (AAA Southern New England Bank) - ------------------------------------------ 54 EX-10.9 10 ncf_ex10-9.txt TRUST AGREEMENT EXHIBIT 10.9 ================================================================================ THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 TRUST AGREEMENT Among WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION as OWNER TRUSTEE and THE NATIONAL COLLEGIATE FUNDING LLC and THE EDUCATION RESOURCES INSTITUTE, INC. as OWNERS Dated as of June 10, 2004 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS....................................................................1 Section 1.01 Capitalized Terms...........................................1 ARTICLE II ORGANIZATION...................................................................8 Section 2.01 Name........................................................8 Section 2.02 Office......................................................8 Section 2.03 Purposes and Powers.........................................8 Section 2.04 Appointment of the Owner Trustee...........................10 Section 2.05 Declaration of Trust.......................................10 Section 2.06 No Liability of Owners for Expenses or Obligations of Trust...................................................10 Section 2.07 Situs of Trust.............................................10 ARTICLE III TRUST CERTIFICATES AND TRANSFER OF INTEREST...................................10 Section 3.01 Issuance of Trust Certificate..............................10 Section 3.02 Registration and Transfer of Certificates..................10 Section 3.03 Lost, Stolen, Mutilated or Destroyed Certificates..........11 Section 3.04 Limitation on Transfer of Ownership Rights.................12 Section 3.05 Assignment of Right to Distributions.......................12 ARTICLE IV CONCERNING THE OWNERS.........................................................13 Section 4.01 Action by Owners with Respect to Certain Matters...........13 Section 4.02 Action Upon Instructions...................................14 Section 4.03 Super-majority Control.....................................14 Section 4.04 Representations and Warranties of the Depositor............14 Section 4.05 Power of Attorney..........................................15 ARTICLE V INVESTMENT AND APPLICATION OF TRUST FUNDS.....................................15 Section 5.01 Investment of Trust Funds..................................15 Section 5.02 Application of Funds.......................................16 i ARTICLE VI CAPITAL.......................................................................16 Section 6.01 Tax Characterization.......................................16 Section 6.02 Initial Capital Contributions of Owners....................16 Section 6.03 Capital Accounts...........................................16 Section 6.04 Interest...................................................17 Section 6.05 No Additional Capital Contributions........................17 Section 6.06 Investment of Capital Contributions........................17 Section 6.07 Repayment and Return of Capital Contributions..............17 ARTICLE VII ALLOCATION OF PROFIT AND LOSS; DISTRIBUTIONS..................................18 Section 7.01 Profit.....................................................18 Section 7.02 Loss.......................................................18 Section 7.03 Special Allocations........................................18 Section 7.04 Curative Allocations.......................................20 Section 7.05 Other Allocation Rules.....................................20 Section 7.06 Distribution of Net Cash Flow..............................21 Section 7.07 Distribution Date Statement................................21 Section 7.08 Allocation of Tax Liability................................21 Section 7.09 Method of Payment..........................................21 Section 7.10 No Segregation of Funds; No Interest.......................22 Section 7.11 Interpretation and Application of Provisions by the Administrator..........................................22 ARTICLE VIII AUTHORITY AND DUTIES OF THE OWNER TRUSTEE.....................................22 Section 8.01 General Authority..........................................22 Section 8.02 Specific Authority.........................................22 Section 8.03 General Duties.............................................22 Section 8.04 Accounting and Reports to the Owners, the Internal Revenue Service and Others.................................23 Section 8.05 Signature of Returns.......................................23 Section 8.06 Right to Receive and Rely Upon Instructions................23 Section 8.07 No Duties Except as Specified in this Agreement or in Instructions...............................................23 Section 8.08 No Action Except Under Specified Documents or Instructions...............................................24 Section 8.09 Restriction................................................24 ARTICLE IX CONCERNING THE OWNER TRUSTEE..................................................24 Section 9.01 Acceptance of Trusts and Duties............................24 Section 9.02 Furnishing of Documents....................................25 Section 9.03 Reliance; Advice of Counsel................................25 Section 9.04 Not Acting in Individual Capacity..........................26 ii Section 9.05 Representations and Warranties of Owner Trustee............26 ARTICLE X COMPENSATION OF OWNER TRUSTEE.................................................26 Section 10.01 Owner Trustee's Fees and Expenses.........................26 Section 10.02 Indemnification...........................................26 Section 10.03 Lien on Trust Property....................................26 Section 10.04 Payments to the Owner Trustee.............................27 ARTICLE XI TERMINATION OF TRUST..........................................................27 Section 11.01 Termination of Trust......................................27 Section 11.02 Distribution of Assets....................................27 Section 11.03 No Termination by Depositor or Owners.....................28 ARTICLE XII SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES........................28 Section 12.01 Resignation of Owner Trustee; Appointment of Successor.................................................28 Section 12.02 Appointment of Additional Owner Trustees..................29 ARTICLE XIII TAX MATTERS PARTNER...........................................................29 Section 13.01 Tax Matters Partner.......................................29 Section 13.02 Notice of Tax Audit.......................................30 Section 13.03 Authority to Extend Period for Assessing Tax..............30 Section 13.04 Choice of Forum for Filing Petition for Readjustment......30 Section 13.05 Authority to Bind Owners by Settlement Agreement..........30 Section 13.06 Notices Sent to the Internal Revenue Service..............30 Section 13.07 Indemnification of Tax Matters Partner....................30 Section 13.08 Approval of Tax Matters Partner's Decisions...............30 Section 13.09 Participation by Owners in Internal Revenue Service Administrative Proceedings...............................................30 ARTICLE XIV MISCELLANEOUS.................................................................31 Section 14.01 Supplements and Amendments................................31 Section 14.02 No Legal Title to Trust Property in Owner.................31 Section 14.03 Pledge of Collateral by Owner Trustee is Binding..........31 Section 14.04 Limitations on Rights of Others...........................31 Section 14.05 Notices...................................................32 Section 14.06 Severability..............................................32 Section 14.07 Separate Counterparts.....................................32 iii Section 14.08 Successors and Assigns....................................32 Section 14.09 Headings..................................................32 Section 14.10 Governing Law.............................................32 Section 14.11 General Interpretive Principles...........................32 SCHEDULE A CAPITAL CONTRIBUTIONS, INITIAL SHARING RATIOS AND PERCENTAGE INTERESTS SCHEDULE B LOAN ORIGINATORS SCHEDULE C LOAN PURCHASE AGREEMENTS SCHEDULE D GUARANTY AGREEMENTS EXHIBIT 1 FORM OF TRUST CERTIFICATE EXHIBIT 2 FORM OF ACCESSION AGREEMENT EXHIBIT 3 FEE SCHEDULE iv 32 TRUST AGREEMENT, dated as of June 10, 2004, among The National Collegiate Funding LLC, a Delaware limited liability company (the "Depositor"), The Education Resources Institute, Inc., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws, and Wachovia Trust Company, National Association, a national banking association (the "Owner Trustee"). WHEREAS, the parties hereto intend to amend and restate that certain Interim Trust Agreement, dated as of May 13, 2004 (the "Interim Trust Agreement"), by and between the Depositor and the Owner Trustee, on the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the premises and of the mutual agreements herein contained and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto amend and restate the Interim Trust Agreement in its entirety and further agree as follows: ARTICLE I DEFINITIONS Section 1.01 CAPITALIZED TERMS. For all purposes of this Agreement, the following terms shall have the meanings set forth below: "Administration Agreement" means the Administration Agreement, dated as of June 10, 2004, among the Trust, the Indenture Trustee, the Owner Trustee and First Marblehead Data Services, Inc., as Administrator, as it may be amended from time to time. "Administrator" means First Marblehead Data Services, Inc., a Massachusetts corporation, as Administrator under the Administration Agreement, or any successor Administrator as appointed pursuant to the terms of the Administration Agreement. "Affiliate" means with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agreement" means this Trust Agreement, as it may be amended or restated from time to time. "Assignment of Servicing Agreements" means each of the Servicer Consent Letters, dated as of June 10, 2004, among the Trust, The First Marblehead Corporation and each of the Pennsylvania Higher Education Assistance Agency, Great Lakes Educational Loan Services, Inc. and Nelnet Loan Services, Inc., each relating to the assignment of the Servicing Agreements to the Trust. "Auction Agency Agreement" means the Auction Agency Agreement, dated as of June 1, 2004, among the Indenture Trustee, the Trust, The Bank of New York and the Administrator. "Authorized Officer" means any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to, and binding upon, the Trust and whose name appears on a list of such authorized officers furnished by the Owner Trustee as such list may be amended or supplemented from time to time. "Back-up Agreement" means the Back-up Note Administration Agreement, dated as of June 10, 2004, among the Trust, the Owner Trustee, FMDS and the Indenture Trustee. "Bankruptcy Action" has the meaning set forth in Section 4.01(b)(iv)(G). "Beneficial Interest" as to any Owner, means all or any part of the interest of that Owner in the Trust, including without limitation its (a) right to a distributive share of the Profit and Loss of the Trust, (b) right to a distributive share of the assets of the Trust, and (c) right to direct or consent to actions of the Owner Trustee and otherwise participate in the management of and control the affairs of the Trust. "Broker-Dealer Agreements" means each of the Broker-Dealer Agreements, dated as of June 1, 2004, among the Trust, the Administrator, The Bank of New York and each of UBS Financial Services Inc. and Deutsche Bank Securities Inc. "Business Day" means any day that is not a Saturday, Sunday or any other day on which commercial banking institutions in Delaware are authorized or obligated by law or executive order to be closed. "Capital Account" means the Capital Account maintained for each Owner pursuant to Article VI of this Agreement. "Capital Contribution" means the amount of money contributed or deemed to have been contributed by an Owner to the capital of the Trust, which shall be as set forth on Schedule A to this Agreement. "Certificate of Trust" means the Certificate of Trust filed with the Secretary of State by the Owner Trustee on behalf of the Trust. "Custodial Agreements" means each of the Custodial Agreements, dated as of June 10, 2004, among the Trust, the Indenture Trustee and each of the Pennsylvania Higher Education Assistance Agency, Great Lakes Educational Loan Services, Inc. and Nelnet Loan Services, Inc. "Deposit and Sale Agreement" means the Deposit and Sale Agreement, dated as of June 10, 2004, between the Depositor and the Trust. "Deposit and Security Agreement" means the Deposit and Security Agreement, dated as of June 10, 2004, among the Administrator, TERI and the Trust. "Depositor" means The National Collegiate Funding LLC, a Delaware limited liability company. 2 "Distribution Date" means the first Business Day following a day on which the Owner Trustee obtains receipt of funds or, if instructed by the Owners, such other Business Day as they shall specify in writing. "Distribution Date Statement" means the statement described as such in Section 7.07. "Distributions" means any money or other property distributed to an Owner with respect to its Beneficial Interest. "Eligible Investments" means one or more of the following (it being acknowledged by the parties hereto that Eligible Investments will have the meaning set forth in the Indenture until such time as the Notes are no longer outstanding): (a) Obligations of or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; (b) Repurchase agreements on obligations specified in clause (a) maturing not more than one month from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated by each of the Rating Agencies in its highest short-term rating available; (c) Federal funds, certificates of deposit, demand deposits, time deposits and bankers' acceptances (which shall each have an original maturity of not more than 90 days and, in the case of bankers' acceptances, shall in no event have an original maturity of more than 365 days or a remaining maturity of more than 30 days) denominated in United States dollars of any U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or trust company; provided that the debt obligations of such depository institution or trust company at the date of acquisition thereof have been rated by each of the Rating Agencies in its highest short-term rating available; and, provided further that, if the original maturity of such short-term obligations of a domestic branch of a foreign depository institution or trust company shall exceed 30 days, the short-term rating of such institution shall have a credit rating in one of the two highest applicable categories from each of the Rating Agencies; (d) Commercial paper (having original maturities of not more than 365 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated by each of the Rating Agencies in its highest short-term rating available; provided that such commercial paper shall have a remaining maturity of not more than 30 days; (e) A money market fund rated by each of the Rating Agencies in its highest rating available which may be a money market fund of the Owner Trustee; and (f) Other obligations or securities that are acceptable to each of the Rating Agencies as an Eligible Investment hereunder; 3 PROVIDED, HOWEVER, that no instrument shall be an Eligible Investment if it provides for either (i) the right to receive only interest payments with respect to the underlying debt instrument or (ii) the right to receive both principal and interest payments derived from the obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to maturity greater than 120% of the yield to maturity at par of such underlying obligations; and PROVIDED FURTHER that so long as the Notes are outstanding, no instrument that is not a permitted investment under the Indenture shall be an Eligible Investment for purposes of this Agreement. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Fiscal Year" means the twelve month period ending on June 30 each year or such portion thereof as the Trust may be in existence. "Indemnification Agreements" means each of the Indemnification Agreements, dated as of June 10, 2004, between The First Marblehead Corporation and Bank of America, N.A. and Bank One, N.A., respectively. "Indenture" means the Indenture between the Trust and U.S. Bank National Association, as Indenture Trustee, dated as of June 1, 2004, as amended or supplemented from time to time pursuant to which the Notes are to be issued. "Indenture Trustee" means the bank or trust company acting as Indenture Trustee under the Indenture. "Interested Noteholders" shall have the meaning set forth in the Indenture. "Issuer Order" means the Issuer Order to the Indenture Trustee from the Trust dated June 10, 2004. "Issuer Order to Authenticate" means the Issuer Order to Authenticate to the Indenture Trustee from the Trust dated June 10, 2004. "Loan Originators" means each of the originators of the Student Loans, as set forth on Schedule B attached hereto, as amended or supplemented from time to time. "Loan Purchase Agreements" means each of the loan purchase agreements entered into between each of the Loan Originators and The First Marblehead Corporation, as set forth on Schedule C attached hereto, as amended or supplemented from time to time. "Market Agent Agreements" means each of the Market Agent Agreements, dated as of June 1, 2004, among the Trust, the Administrator and each of UBS Financial Services Inc. and Deutsche Bank Securities Inc. "Net Cash Flow" means with respect to any fiscal period of the Trust, all revenues of the Trust decreased by (a) cash expenditures for operating expenses (including interest on indebtedness of the Trust but not including expense items which do not require current cash outlay), (b) reserves for contingencies and working capital established in such amounts as the 4 Owner Trustee, with the consent of the Owners, may determine, (c) repayments of principal on any Trust indebtedness and (d) taxes. "1933 Act" has the meaning set forth in Section 3.02(a). "Notes" mean the collateralized student loan asset backed notes to be issued by the Trust pursuant to the Indenture. "Noteholder" means any holder of the Notes. "Owner" means each of the Depositor, TERI and any other Person who becomes an owner of a Beneficial Interest. "Owner Trustee" means Wachovia Trust Company, National Association, a national banking association with its principal place of business in the State of Delaware, not in its individual capacity but solely as trustee. "Percentage Interest" means the initial undivided beneficial interest in the Trust Property of an Owner expressed as a percentage of the total initial undivided beneficial interests in the Trust Property. References to Percentage Interests herein shall be solely for the purpose of certificating Owners' interests hereunder and for any other purpose specified in this Agreement. "Periodic Filings" means any filings or submissions that the Trust is required to make with any state or Federal regulatory agency or under the Code. "Person" means any individual, corporation, partnership, joint venture, limited liability company, association, trust (including any beneficiary thereof), estate, custodian, nominee, unincorporated organization or government or any agency or political subdivision thereof. "Plan" has the meaning set forth in Section 3.04(d). "Plan Assets" has the meaning set forth in Section 3.04(d). "Rating Agencies" means Moody's Investors Service, Inc., Fitch, Inc. and Standard & Poors Rating Services, a division of The McGraw-Hill Companies, Inc. "Secretary of State" means the office of the Secretary of State of the State of Delaware. "Servicers" mean the Pennsylvania Higher Education Assistance Agency, Great Lakes Educational Loan Services, Inc. and Nelnet Loan Services, Inc. "Servicing Agreements" mean (a) the Alternative Servicing Agreement, dated October 16, 2001, as amended, between the Pennsylvania Higher Education Assistance Agency and The First Marblehead Corporation, (b) the Loan Servicing Agreement, dated as of August 1, 2001, as amended, between Nelnet Loan Services, Inc. (formerly known as UNIPAC Service Corporation) and The First Marblehead Corporation, and (c) the Non-FFELP Loan Servicing Agreement, dated as of May 1, 2003, between Great Lakes Educational Loan Services, Inc. and The First Marblehead Corporation. 5 "Sharing Ratio" means, with respect to any Owner, the ratio (expressed as a percentage) specified on Schedule A attached hereto. "Statutory Trust Statute" means the Delaware Statutory Trust Act, 12 Del. Codess.3801 et seq. "Structuring Advisor" means The First Marblehead Corporation. "Structuring Advisory Agreement" means the Structuring Advisory Agreement between the Structuring Advisor and the Trust, dated as June 10, 2004. "Student Loans" means the education loans to or for the benefit of students originated under one of the Student Loan Programs. "Student Loan Notes" means the promissory notes to be sold to the Trust by the Loan Originators pursuant to the Loan Purchase Agreements representing education loans to or for the benefit of students originated under the Student Loan Programs. "Student Loan Programs" means each of the programs for the origination of the Student Loans by each of the Loan Originators pursuant to the Loan Purchase Agreements. "Super-majority Owners" shall have the meaning set forth in Section 4.03. "TERI" means The Education Resources Institute, Inc., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws. "TERI Deposit Account" means the special deposit account established by TERI pursuant to the Deposit and Security Agreement. "TERI Guaranty Agreements" means each of the Guaranty Agreements entered into between each of the Loan Originators and TERI as set forth on Schedule D attached hereto, as amended or supplemented from time to time. "TERI Guaranteed Loans" means Student Loans originated under the Student Loan Programs owned by the Trust and guaranteed by TERI pursuant to the Guaranty Agreements. "Transfer" means the sale, transfer or other assignment of all of an Owner's right, title and interest in all or a portion of such Owner's Beneficial Interest. "Trust" means the trust established by this Agreement. "Trust Certificate" means a certificate evidencing the Beneficial Interest of an Owner in substantially the form attached hereto as Exhibit 1. "Trust Property" means all right, title and interest of the Trust or the Owner Trustee on behalf of the Trust in and to any property contributed to the Trust by the Owners or otherwise acquired by the Trust, including without limitation all distributions, payments or proceeds thereon. 6 "Trust Related Agreements" means any instruments or agreements signed by the Owner Trustee on behalf of the Trust, including without limitation, the Indenture, the Loan Purchase Agreements, the Administration Agreement, the Deposit and Sale Agreement, the Deposit and Security Agreement, the Structuring Advisory Agreement, the Assignment of Servicing Agreements, the Auction Agency Agreement, the Market Agent Agreements, the Back-up Agreement, the Custodial Agreements, the Notes, the Indemnification Agreements, the Issuer Order, the Issuer Order to Authenticate and the Broker-Dealer Agreements. TAX TERMS: "Adjusted Capital Account Deficit" means, with respect to any Partner, the deficit balance, if any, in such Partner's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: (a) Credit to such Capital Account the minimum gain chargeback that such Partner is deemed to be obligated to restore pursuant to the penultimate sentences of sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations and the amount of such Partner's share of Partner Nonrecourse Debt Minimum Gain; and (b) Debit to such Capital Account the items described in sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Regulations. The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith. "Code" means the Internal Revenue Code of 1986, as amended. "Nonrecourse Deductions" has the meaning set forth in section 1.704-2(b)(1) of the Regulations. "Nonrecourse Liability" has the meaning set forth in section 1.704-2(b)(3) of the Regulations. "Partner Nonrecourse Debt" has the meaning set forth in section 1.704-2(b)(4) of the Regulations. "Partner Nonrecourse Debt Minimum Gain" means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with section 1.704-2(i)(3) of the Regulations. "Partner Nonrecourse Deductions" has the meaning set forth in sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations. "Partners" means the Owners. "Partnership" means the Trust. 7 "Partnership Minimum Gain" has the meaning set forth in sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations. "Profit and Loss" means, for each Fiscal Year, an amount equal to the Partnership's taxable income or loss for such Fiscal Year, determined in accordance with section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments: (a) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profit or Loss pursuant to this definition shall be added to such taxable income or loss; (b) Any expenditures of the Partnership described in section 705(a)(2)(B) of the Code or treated as expenditures under section 705(a)(2)(B) of the Code pursuant to section 1.704-1(b)(2)(iv)(i) of the Regulations (other than expenses in respect of which an election is properly made under section 709 of the Code), and not otherwise taken into account in computing Profit or Loss pursuant to this definition, shall be subtracted from such taxable income or loss; (c) Notwithstanding any other provisions of this definition, any items which are specially allocated pursuant to Section 7.03 or 7.04 shall not be taken into account in computing Profit or Loss. The amounts of the items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Sections 7.03 and 7.04 shall be determined by applying rules analogous to those set forth in clauses (a) and (b) above. "Regulations" means the federal income tax regulations promulgated by the United States Treasury Department under the Code as such Regulations may be amended from time to time. All references herein to a specific section of the regulations shall be deemed also to refer to any corresponding provision of succeeding Regulations. "Regulatory Allocations" has the meaning set forth in Section 7.04. ARTICLE II ORGANIZATION Section 2.01 NAME. The Trust continued hereby shall be known as The National Collegiate Student Loan Trust 2004-1, in which name the Owner Trustee may take any action as provided herein. Section 2.02 OFFICE. The principal place of business and principal office of the Trust shall be in care of the Owner Trustee, at the address set forth in Section 14.05. The Trust shall also have an office at 230 Park Avenue, New York, New York 10169. Section 2.03 PURPOSES AND POWERS. (a) The purpose of the Trust is to engage in the following activities and only those activities: 8 (i) To acquire a pool of Student Loans, to execute the Indenture and to issue the Notes; (ii) To enter into the Trust Related Agreements and to provide for the administration of the Trust and the servicing of the Student Loans. (iii) To engage in those activities and to enter into such agreements that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and (iv) To engage in such other activities as may be required in connection with conservation of the Trust Property and distributions to Owners. Until the Indenture is discharged, the Trust shall not engage in any business or activities other than in connection with, or relating to, the foregoing and other than as required or authorized by the terms of this Agreement and the Indenture, except as are incidental to and necessary to accomplish such activities, unless the Interested Noteholders consent to the Trust engaging in other activities. (b) Until the Indenture is discharged, the operations of the Trust shall be conducted in accordance with the following standards: (i) The Trust will act solely in its own name and the Owner Trustee or other agents selected in accordance with this Agreement will act on behalf of the Trust subject to direction by the Owners as provided herein, but such action shall not be in violation of the terms of this Agreement; (ii) The Trust's funds and assets shall at all times be maintained separately from those of the Owners and any of their respective Affiliates; (iii) The Trust shall maintain complete and correct books, minutes of the meetings and proceedings of the Owners, and records of accounts; (iv) The Trust shall conduct its business at the office of the Owner Trustee and will use stationary and other business forms of the Trust under its own name and not that of the Owners or any of their respective Affiliates, and will avoid the appearance (A) of conducting business on behalf of any Owner or any Affiliate of an Owner or (B) that the assets of the Trust are available to pay the creditors of the Owner Trustee or any Owner; (v) The Trust's operating expenses shall be paid out of its own funds; (vi) The Trust shall not incur, guarantee or assume any debt (other than the Notes) nor hold itself out as being liable for the debts of any entity, including any Owner or any Affiliates of any Owner; (vii) For so long as any of the Notes are outstanding, the Trust shall not (A) merge or consolidate with or into any other entity, (B) convey or transfer all or substantially all of its assets to any other entity (other than to the Indenture Trustee pursuant to the Indenture), or (C) dissolve, liquidate or terminate in whole or in part; and 9 (viii) For so long as any of the Notes are outstanding, the Trust shall not own or acquire any financial asset that requires the Trust, the Owners or the Administrator to make any decisions regarding such asset other than the servicing of the asset. Section 2.04 APPOINTMENT OF THE OWNER TRUSTEE. The Depositor hereby appoints the Owner Trustee as trustee of the Trust, to have all the rights, powers and duties set forth herein and in the Statutory Trust Statute. The Owner Trustee acknowledges receipt in trust from the Depositor, of the sum of one dollar ($1), constituting the initial Trust Property. Section 2.05 DECLARATION OF TRUST. The Owner Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the use and benefit of the Owners, subject to the obligations of the Owner Trustee under the Trust Related Agreements. It is the intention of the parties hereto that the Trust constitute a statutory trust under the Statutory Trust Statute and that this Agreement constitute the governing instrument of the Trust. Section 2.06 NO LIABILITY OF OWNERS FOR EXPENSES OR OBLIGATIONS OF TRUST. No Owner shall be liable for any liability, expense or other obligation of the Trust. Section 2.07 SITUS OF TRUST. The Trust will be located and administered in the State of Delaware. The Trust shall not have any employees in any state other than in the State of Delaware and payments will be received by the Owner Trustee on behalf of the Trust only in the State of Delaware and payments will be made by the Owner Trustee on behalf of the Trust only from the State of Delaware. ARTICLE III TRUST CERTIFICATES AND TRANSFER OF INTEREST Section 3.01 ISSUANCE OF TRUST CERTIFICATE. (a) As of the date hereof, as set forth on Schedule A attached hereto, the Depositor has been issued a Trust Certificate evidencing 75% of the Beneficial Interest in the Trust and TERI has been issued a Trust Certificate evidencing 25% of the Beneficial Interest in the Trust. (b) Each Trust Certificate shall be executed by manual signature on behalf of the Owner Trustee by one of its Authorized Officers. Trust Certificates bearing the manual signature of an individual who was, at the time when such signature was affixed, authorized to sign on behalf of the Owner Trustee shall bind the Trust, notwithstanding that such individual has ceased to be so authorized prior to the delivery of such Trust Certificate or does not hold such office at the date of such Trust Certificate. Each Trust Certificate shall be dated the date of its issuance. Section 3.02 REGISTRATION AND TRANSFER OF CERTIFICATES. (a) The Owner Trustee shall maintain at its office referred to in Section 2.02, or at the office of any agent appointed by it and approved in writing by the Owners at the time of such appointment, a register for the registration and Transfer of Trust Certificates. No Transfer of a 10 Beneficial Interest shall be made unless such Transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "1933 Act"), and state securities laws, or is exempt from the registration requirements under the 1933 Act and state securities laws. (b) The registered Owner of any Trust Certificate may Transfer all or any portion of the Beneficial Interest evidenced by such Trust Certificate upon surrender thereof to the Owner Trustee accompanied by the documents required by Section 3.04. Such Transfer may be made by the registered Owner in person or by its attorney duly authorized in writing upon surrender of the Trust Certificate to the Owner Trustee accompanied by a written instrument of Transfer and with such signature guarantees and evidence of authority of the Persons signing the instrument of Transfer as the Owner Trustee may reasonably require. Promptly upon the receipt of such documents and receipt by the Owner Trustee of the transferor's Trust Certificate, the Owner Trustee shall (i) record the name of such transferee as an Owner and its Percentage Interest in the Trust Certificate register and (ii) issue, execute and deliver to such Owner a Trust Certificate evidencing such Percentage Interest. In the event a transferor Transfers only a portion of its Beneficial Interest, the Owner Trustee shall register and issue to such transferor a new Trust Certificate evidencing such transferor's new Percentage Interest. Subsequent to a Transfer and upon the issuance of the new Trust Certificate or Trust Certificates, the Owner Trustee shall cancel and destroy the Trust Certificate surrendered to it in connection with such Transfer. The Owner Trustee may treat the Person in whose name any Trust Certificate is registered as the sole Owner of the Beneficial Interest in the Trust evidenced by such Trust Certificate. (c) As a condition precedent to any registration of Transfer, the Owner Trustee may require the payment of a sum sufficient to cover the payment of any tax or taxes or other governmental charges required to be paid in connection with such Transfer and any other reasonable expenses connected therewith. Section 3.03 LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES. If (i) any mutilated Trust Certificate is surrendered to the Owner Trustee, or (ii) the Owner Trustee receives evidence to its satisfaction that any Trust Certificate has been destroyed, lost or stolen, and upon proof of ownership satisfactory to the Owner Trustee together with such security or indemnity as may be requested by the Owner Trustee to save it harmless, the Owner Trustee shall execute and deliver a new Trust Certificate for the same Percentage Interest as the Trust Certificate so mutilated, destroyed, lost or stolen, of like tenor and bearing a different issue number, with such notations, if any, as the Owner Trustee shall determine. In connection with the issuance of any new Trust Certificate under this Section 3.03, the Owner Trustee may require the payment by the registered Owner thereof 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 reasonable fees and expenses of the Owner Trustee) connected therewith. Any replacement Trust Certificate issued pursuant to this Section 3.03 shall constitute complete and indefeasible evidence of ownership of a Beneficial Interest, as if originally issued, whether or not the lost, stolen or destroyed Trust Certificate shall be found at any time. 11 Section 3.04 LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS. (a) No Transfer of all or any part of a Beneficial Interest shall be made to any Person unless (i) such Person delivers to the Owner Trustee an accession agreement substantially in the form of Exhibit 2 hereof, (ii) except for the initial transfer of the Beneficial Interest of the Depositor, the Owner Trustee shall have received a written opinion of counsel in form and substance satisfactory to the Owner Trustee stating that such Transfer is exempt from the 1933 Act and any applicable state securities law. (b) At any time that there is more than one Owner, no Transfer of a Beneficial Interest shall be valid unless the Owner making such Transfer shall have received the prior written consent to such Transfer of the Owners holding at least 80% of both the Percentage Interests and the Sharing Ratios in the Trust at such time, which consent may not be unreasonably withheld; PROVIDED, HOWEVER, that in calculating the total Beneficial Interests in the Trust there shall be excluded the Beneficial Interest owned by the transferor or (unless the transferor and its Affiliates are the only Owners) any Affiliate thereof. (c) Except for the initial issuance of the Trust Certificates to the Depositor, no Transfer shall be valid if, as a result of such Transfer, (i) any Person would have a Percentage Interest or a Sharing Ratio of 100%, considering for such purpose all interests owned by any Affiliate of such Person as owned by such Person, or (ii) such Transfer would result in a termination of the Trust for Federal income tax purposes. (d) No Transfer of all or any part of a Beneficial Interest shall be made to any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA, or Section 4975 of the Code (collectively, "Plan"), any Person acting, directly or indirectly, on behalf of any such Plan or any Person acquiring the Beneficial Interest with "plan assets" of a Plan within the meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101 ("Plan Assets") unless the Owner Trustee is provided with an opinion of counsel which establishes to the satisfaction of the Owner Trustee that the purchase of the Beneficial Interest is permissible under applicable law, will not constitute or result in any prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Owners, the Owner Trustee or the Trust to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those undertaken in this Agreement, which opinion of counsel shall not be an expense of the Owners, the Owner Trustee or the Trust. (e) No Transfer of all or any part of a Beneficial Interest shall be permitted, and no such transfer shall be effective hereunder, if such transfer would cause the Trust to be classified as a publicly traded partnership, taxable as a corporation for federal income tax purposes by causing the Trust to have more than 100 Owners at any time during the taxable year of the Trust. Section 3.05 ASSIGNMENT OF RIGHT TO DISTRIBUTIONS. An Owner may assign all or any part of its right to receive distributions hereunder, but such assignment (in the absence of a permitted Transfer) shall effect no change in the ownership of the Trust. 12 ARTICLE IV CONCERNING THE OWNERS Section 4.01 ACTION BY OWNERS WITH RESPECT TO CERTAIN MATTERS. - ------------------------------------------------ (a) The Owner Trustee will take such action or refrain from taking such action under this Agreement or any Trust Related Agreement as it shall be directed pursuant to an express provision of this Agreement or such Trust Related Agreement or, with respect to nonministerial matters, as it shall be directed by all the Owners for so long as any of the Notes are outstanding. (b) Without limiting the generality of the foregoing, in connection with the following nonministerial matters, the Owner Trustee will take no action, and will not have authority to take any such action unless it receives prior written approval from all the Owners for so long as any of the Notes are outstanding: (i) The initiation of any claim or lawsuit by the Trust and the compromise of any claim or lawsuit brought by or against the Trust, except for claims or lawsuits initiated in the ordinary course of business by the Trust or its agents or nominees for the collection of the Student Loans owned by the Trust; (ii) The amendment, change or modification of this Agreement or any Trust Related Agreement; (iii) The filing of a voluntary petition in bankruptcy for the Trust, which in no event shall the Owner Trustee be permitted to do or be instructed to do until at least 367 days after the payment in full of the Outstanding Notes (as defined in the Indenture) issued by the Trust; and (iv) (A) Institute proceedings to have the Trust declared or adjudicated bankrupt or insolvent, (B) consent to the institution of bankruptcy or insolvency proceedings against the Trust, (C) file a petition or consent to a petition seeking reorganization or relief on behalf of the Trust under any applicable federal or state law relating to bankruptcy, (D) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any similar official) of the Trust or a substantial portion of the property of the Trust, (E) make any assignment for the benefit of the Trust's creditors, (F) cause the Trust to admit in writing its inability to pay its debts generally as they become due or (G) take any action, or cause the Trust to take any action, in furtherance of any of the foregoing (any of the above, a "Bankruptcy Action"). No Owner shall have the power to take, and no Owner shall take, any Bankruptcy Action with respect to the Trust or direct the Owner Trustee to take any Bankruptcy Action with respect to the Trust. (c) No Owner shall take any action to cause the filing of an involuntary petition in bankruptcy against the Trust. 13 Section 4.02 ACTION UPON INSTRUCTIONS. (a) The Owner Trustee shall take such action or actions as may be specified in this Agreement or in any instructions delivered in accordance with this Article IV or Article VIII; PROVIDED, HOWEVER, that the Owner Trustee shall not be required to take any such action if it shall have reasonably determined, or shall have been advised by counsel, that such action (i) is contrary to the terms hereof or of any document contemplated hereby to which the Trust or the Owner Trustee is a party or is otherwise contrary to law, (ii) is likely to result in personal liability on the part of the Owner Trustee, unless the Owners shall have provided to the Owner Trustee indemnification or security reasonably satisfactory to the Owner Trustee against all costs, expenses and liabilities arising from the Owner Trustee's taking such action, or (iii) would adversely affect the status of the Trust as a partnership for Federal income tax purposes. (b) No Owner shall direct the Owner Trustee to take or refrain from taking any action contrary to this Agreement or any Trust Related Agreement, nor shall the Owner Trustee be obligated to follow any such direction, if given. (c) Notwithstanding anything contained herein or in any Trust Related Agreement to the contrary, the Owner Trustee shall not be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will (i) require the consent or approval or authorization or order for the giving of notice to, or the registration with or taking of any action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware; (ii) result in any fee, tax or other governmental charge under the laws of any jurisdiction or any political subdivision thereof in existence on the date hereof other than the State of Delaware becoming payable by the Owner Trustee; or (iii) subject the Owner Trustee to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by the Owner Trustee contemplated hereby. (d) The Owner Trustee shall not have the power to remove the Administrator under the Administration Agreement or appoint a successor Administrator pursuant to the Administration Agreement without written instruction by the Owners. Section 4.03 SUPER-MAJORITY CONTROL. Except as otherwise expressly provided in this Agreement, any action which may be taken or consent or instructions which may be given by the Owners under this Agreement may be taken by the Owners holding in the aggregate at least 80% of both the Percentage Interests and the Sharing Ratios in the Trust at the time of such action (the "Super-majority Owners"). Any written notice of the Owners delivered pursuant to this Agreement shall be effective if signed by the Super-majority Owners at the time of the delivery of such notice. Section 4.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The Depositor hereby represents and warrants to the Owner Trustee as follows: (a) Upon the receipt of the Trust Property by the Owner Trustee under this Agreement, the Owner Trustee on behalf of the Trust will have good title to the Trust Property free and clear of any lien. 14 (b) The Trust is not, and will not be upon conveyance of the Trust Property to the Owner Trustee, an "Investment Company" or under the "control" of an "Investment Company," as such terms are defined in the Investment Company Act of 1940, as amended. (c) Except for the filing of the Certificate of Trust with the Secretary of State, no consent, approval, authorization or order of, or filing with, any court or regulatory, supervisory or governmental agency or body is required under current law in connection with the execution, delivery or performance by the Depositor of this Agreement or the consummation of the transactions contemplated hereby; PROVIDED, HOWEVER, that no representation or warranty is made herein as to compliance with federal securities laws or the securities or "blue sky" laws of any state. (d) This Agreement has been duly and validly authorized, executed and delivered by, and constitutes a valid and binding agreement of, the Depositor, enforceable in accordance with its terms. Section 4.05 POWER OF ATTORNEY. (a) GENERAL. Each Owner hereby irrevocably constitutes and appoints the Administrator, with full power of substitution, such Owner's true and lawful attorney-in-fact, in such Owner's name, place and stead, with full power to act jointly and severally, to make, execute, sign, acknowledge, swear to, verify, deliver, file, record and publish the following documents: (i) Any certificate, instrument or document to be filed by the Owners under the laws of any state, or by any governmental agency in connection with this Agreement; (ii) Any certificate, instrument or document which may be required to effect the continuation or the termination of the Trust, including any amendments to the Agreement; provided such continuation or termination is in accordance with the terms of this Agreement; and (iii) Any written notice, instruction, instrument or document under Article XII of this Agreement. (b) DURATION OF POWER OF ATTORNEY. It is expressly intended by each of the Owners that the Power of Attorney granted under this Section 4.05 is coupled with an interest, and it is agreed that such Power of Attorney shall survive (i) the dissolution, death or incompetency of the Owner and (ii) the assignment by any Owner of the whole or any portion of such Owner's Beneficial Interest. ARTICLE V. INVESTMENT AND APPLICATION OF TRUST FUNDS Section 5.01 INVESTMENT OF TRUST FUNDS. Unless otherwise directed in writing by the Owners, income with respect to and proceeds of the Trust Property which are received by the Owner Trustee more than one day prior to a Distribution Date shall be invested and reinvested by the Owner Trustee in Eligible Investments. Interest earned from such investment and reinvestment shall be credited to the Trust Property. 15 Section 5.02 APPLICATION OF FUNDS. Income with respect to and proceeds of Trust Property held by the Owner Trustee on a Distribution Date shall be remitted directly to the Indenture Trustee for application in accordance with the Indenture for so long as any of the Notes is outstanding, and thereafter shall be applied by the Owner Trustee on such Distribution Date in the following order; (i) FIRST to pay any amounts due to the Owner Trustee under this Agreement; (ii) SECOND, to pay any amounts due to the Administrator under the Administration Agreement and to the Structuring Advisor under the Structuring Advisory Agreement; (iii) THIRD, to pay any amounts then due to any Person under the Trust Related Agreements; (iv) FOURTH, to pay any other expenses of the Trust; and (v) FIFTH, to the Owners in accordance with Section 7.06. All payments to be made under this Agreement by the Owner Trustee shall be made only from the income and proceeds of the Trust Property and only to the extent that the Owner Trustee has received such income or proceeds. ARTICLE VI CAPITAL Section 6.01 TAX CHARACTERIZATION. It is intended that the Trust be characterized and treated as a partnership for federal income tax purposes. All references to a "Partner," the "Partners" and to the "Partnership" in this Agreement and in the provisions of the Code and Regulations cited in this Agreement shall be deemed to refer to an Owner, the Owners and the Trust, respectively. The Tax Matters Partner of the Trust shall be as set forth in Article XIII. Section 6.02 INITIAL CAPITAL CONTRIBUTIONS OF OWNERS. The Depositor shall make an initial Capital Contribution in the amount of one dollar ($1) upon execution of this Agreement. Upon their accession to this Agreement as Owners and the issuance of Trust Certificates to them in accordance with Section 3.01(c), the Owners will be deemed to have made initial Capital Contributions in the amounts set forth on Schedule A attached hereto. Section 6.03 CAPITAL ACCOUNTS. A capital account shall be maintained for each Owner throughout the term of the Trust in accordance with the rules of section 1.704-1(b)(2)(iv) of the Regulations as in effect from time to time, and, to the extent not inconsistent therewith, to which the following provisions apply: (a) To each Owner's Capital Account there shall be credited (i) the amount of money contributed by such Owner to the Trust (including each Owner's share of any liabilities of the Trust assumed by such Owner as provided in section 1.704-1(b)(2)(iv)(c) of the Regulations, (ii) the fair market value of any property contributed to the Trust by such Owner (net of liabilities 16 secured by such contributed property that the Trust is considered to assume or take subject to under section 752 of the Code), and (iii) such Owner's share of Profit and items of income and gain that are specially allocated pursuant to Sections 7.03 and 7.04 (other than any income or gain allocated to such Owner pursuant to Section 7.03(f) in accordance with section 704(c) of the Code). The initial Capital Contributions of each Owner are set forth on Schedule A attached hereto. (b) To each Owner's Capital Account there shall be debited (i) the amount of money distributed to such Owner by the Trust (including any liabilities of such Owner assumed by the Trust as provided in section 1.704-1(b)(2)(iv)(c) of the Regulations) other than amounts that are in repayment of debt obligations of the Trust to such Owner, (ii) the fair market value of property distributed to such Owner (net of liabilities secured by such distributed property that such Owner is considered to assume or take subject to), and (iii) such Owner's share of Loss and items of loss or deduction that are specially allocated pursuant to Sections 7.03 and 7.04 (other than any deduction or loss allocated to such Owner pursuant to Section 7.03(f) in accordance with section 704(c) of the Code). (c) The Capital Account of a transferee Owner shall include the appropriate portion of the Capital Account of the Owner from whom the transferee Owner's interest was obtained. (d) In determining the amount of any liability there shall be taken into account section 752(c) of the Code and any other applicable provisions of the Code and Regulations. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with section 1.704-1(b) of the Regulations, and shall be interpreted and applied in a manner consistent with such Regulations. Section 6.04 INTEREST. No Owner shall be entitled to interest on its Capital Contribution or on any Profit retained by the Trust. Section 6.05 NO ADDITIONAL CAPITAL CONTRIBUTIONS. No Owner shall make an additional Capital Contribution to the Trust, or receive a distribution from the Trust, of property unless this Agreement shall have first been amended to the extent necessary to comply with the requirements of sections 704(b) and (c) of the Code regarding the distributive shares of, and the allocation of income, gain, loss, deduction and credit among, partners of a partnership. Section 6.06 INVESTMENT OF CAPITAL CONTRIBUTIONS. The cash Capital Contributions of the Owners shall be invested by the Owner Trustee in accordance with Section 5.01. Section 6.07 REPAYMENT AND RETURN OF CAPITAL CONTRIBUTIONS. The Owner Trustee shall have no personal liability for the repayment of any Capital Contributions of the Owners. 17 ARTICLE VII ALLOCATION OF PROFIT AND LOSS; DISTRIBUTIONS Section 7.01 PROFIT. After giving effect to special allocations set forth in Section 7.03 and Section 7.04, Profit for any Fiscal Year shall be allocated to the Owners in proportion to their respective Sharing Ratios. Section 7.02 LOSS. After giving effect to the special allocations set forth in Sections 7.03 and 7.04, Loss for any Fiscal Year shall be allocated as follows: (a) SPECIAL ALLOCATION OF LOSS ATTRIBUTABLE TO NOTE DEFAULTS ON TERI GUARANTEED LOANS. To the extent of any positive balance in TERI's Capital Account as an Owner, TERI shall be specially allocated all Losses for such Fiscal Year resulting from defaults, as determined pursuant to the TERI Guaranty Agreements, on the TERI Guaranteed Loans owned by the Trust to the extent that the Trust is not reimbursed such Losses by TERI as a guaranty payment pursuant to the TERI Guaranty Agreements. (b) OTHER LOSS. All Loss not allocated pursuant to Section 7.02(a) shall be allocated to the Owners in proportion to their Sharing Ratios. (c) EFFECT OF ADJUSTED CAPITAL ACCOUNT DEFICIT. The Loss allocated pursuant to Section 7.02(a) and (b) shall not exceed the maximum amount of Loss that can be so allocated without causing any Owner to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Owners would have Adjusted Capital Account Deficits as a consequence of an allocation of Loss pursuant to Section 7.02(a) and (b), the limitation set forth in this Section 7.02(c) shall be applied on an Owner by Owner basis so as to allocate the maximum permissible Loss to each Owner under section 1.704-1(b)(2)(ii)(d) of the Regulations. (d) REMAINING LOSS. In the event that there is any remaining Loss in excess of the limitation set forth in Section 7.02(c), such remaining Loss shall be allocated among the Owners in proportion to their respective Sharing Ratios. Section 7.03 SPECIAL ALLOCATIONS. (a) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in section 1.704-2(f) of the Regulations, notwithstanding any other provision of this Section 7.03, if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Owner shall be specially allocated items of Trust income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Owner's share of the net decrease in Partnership Minimum Gain, determined in accordance with section 1.704-2(g) of the Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Owner pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 7.03(a) is intended to comply with the minimum gain chargeback requirement in section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. 18 (b) OWNER MINIMUM GAIN CHARGEBACK. Except as otherwise provided in section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of this Section 7.03, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Owner who has a share of the Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with section 1.704-2(i)(4) of the Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 7.03(b) is intended to comply with the minimum gain chargeback requirement in section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. (c) QUALIFIED INCOME OFFSET. In the event any Owner unexpectedly receives any adjustments, allocations, or distributions described in section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Trust income and gain shall be specially allocated to the Owner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Owner as quickly as possible, provided that an allocation pursuant to this Section 7.03(c) shall be made only if and to the extent that the Owner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VII have been tentatively made as if this Section 7.03(c) were not in this Agreement. (d) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any Fiscal Year shall be specially allocated among the Owners in proportion to their Sharing Ratios. (e) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Owner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with section 1.704-2(i)(1) of the Regulations. (f) MANDATORY ALLOCATIONS UNDER SECTION 704(C) OF THE CODE. Notwithstanding the foregoing provisions of this Section 7.03, in the event section 704(c) of the Code or section 704(c) of the Code principles applicable under section 1.704-1(b)(2)(iv) of the Regulations require allocations of income, gain, deduction or loss in a manner different than that set forth above, the provisions of section 704(c) of the Code and the Regulations thereunder shall control such allocations. Any item of Trust income, gain, loss and deduction with respect to any property (other than cash) that has been contributed by a Partner to the capital of the Trust or which has been revalued for Capital Account purposes pursuant to section 1.744-1(b)(2)(iv) of the Regulations and which is required to be allocated to such Partner for income tax purposes under section 704(c) of the Code so as to take into account the variation between the tax basis of such property and its fair market value at the time of its contribution shall be allocated solely for income tax purposes in the manner required or permitted under section 704(c) of the Code using the "traditional method" described in section 1.704-3(b) of the Regulations, PROVIDED, HOWEVER, 19 that curative allocations consisting of the special allocation of gain or loss upon the sale or other disposition of the contributed property shall be made in accordance with section 1.704-3(c) of the Regulations to the extent necessary to eliminate any disparity, to the extent possible, between the Partners' book and tax Capital Accounts attributable to such property; FURTHER PROVIDED, HOWEVER, that any other method allowable under applicable Regulations may be used for any contribution of property as to which there is agreement between the contributing Partner and the Administrator. (g) GROSS INCOME ALLOCATION. In the event any Owner has an Adjusted Capital Account Deficit, such Owner shall be specially allocated items of Trust income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 7.03(g) shall be made only if and to the extent that such Owner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 7.03 have been made as if Sections 7.03(c) and 7.03(g) were not in this Agreement. Section 7.04 CURATIVE ALLOCATIONS. The allocations set forth in Sections 7.02 and 7.03(a) through (e) (the "Regulatory Allocations") are intended to comply with certain requirements of the Regulations. It is the intent of the Owners that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Trust income, gain, loss, or deduction. Therefore, notwithstanding any other provision of this Article VII (other than the Regulatory Allocations), offsetting special allocations of Trust income, gain, loss, or deduction shall be made so that, after such offsetting allocations are made, each Owner's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Owner would have had if the Regulatory Allocations were not part of the Agreement and all Trust items were allocated pursuant to Sections 7.01 and 7.02. In making such offsetting allocations, there shall be taken into account future Regulatory Allocations under Section 7.03(a) and (b) that, although not yet made, are likely to offset other Regulatory Allocations previously made under Section 7.03(d) and (e). Section 7.05 OTHER ALLOCATION RULES. (a) For purposes of determining the Profit, Loss, or any other items allocable to any period, Profit, Loss, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Owner Trustee, under the direction of the Super-majority Owners, using any method permissible under section 706 of the Code and the Regulations thereunder. (b) The Owners are aware of the income tax consequences of the allocations made by this Article VII and hereby agree to be bound by the provisions of this Article VII in reporting their shares of Trust income and loss for income tax purposes. (c) Solely for purposes of determining an Owner's proportionate share of the "excess nonrecourse liabilities" of the Trust within the meaning of section 1.752-3(a)(3) of the Regulations, the Owners' interests in Trust profits are in proportion to their Sharing Ratios. (d) To the extent permitted by section 1.704-2(h)(3) of the Regulations, the Owner Trustee shall endeavor to treat distributions of Net Cash Flow as having been made from the 20 proceeds of a Nonrecourse Liability or a Partner Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Owner. Section 7.06 DISTRIBUTION OF NET CASH FLOW. Except to the extent prohibited by any other agreement to which the Trust is a party or is otherwise bound, Net Cash Flow on each Distribution Date shall be distributed on such Distribution Date to each Owner in an amount equal to (i) the Profit allocated to such Owner under this Article VII and not previously distributed to such Owner less (ii) the amount of Losses allocated to such Owner to the extent such Losses were not applied in reduction of the amount of any previous distribution of Net Cash Flow to such Owner and less (iii) with respect to a distribution to TERI, the amount of money paid to TERI by the Trust in accordance with paragraph 4 of the Section 2.05 Supplement to Master Loan Guaranty Agreement between TERI and The First Marblehead Corporation dated April 30, 2001, as amended. All payments to be made under this Agreement by the Owner Trustee shall be made only from the income and proceeds of the Trust Property and only to the extent the Owner Trustee has received such income or proceeds. Section 7.07 DISTRIBUTION DATE STATEMENT. With each distribution to an Owner pursuant to Section 7.06, the Owner Trustee shall deliver a Distribution Date Statement setting forth, for the period since the preceding Distribution Date: (a) Income and proceeds received by the Owner Trustee with respect to the Trust Property; (b) Amounts paid to the Owner Trustee; (c) Amounts paid to any Person pursuant to a Trust Related Agreement; and (d) Amounts paid for other expenses of the Trust. Section 7.08 ALLOCATION OF TAX LIABILITY. In the event that any tax is imposed on the Trust, such tax shall be charged against amounts otherwise distributable to the Owners in proportion to their respective Sharing Ratios. The Owner Trustee is hereby authorized to retain from amounts otherwise distributable to the Owners sufficient funds to pay or provide for the payment of, and then actually pay, such tax as is legally owed by the Trust (but such authorization shall not prevent the Owner Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). Section 7.09 METHOD OF PAYMENT. All amounts payable to an Owner pursuant to this Agreement shall be paid by the Owner Trustee to such Owner or a nominee therefor by check payable to such Owner, mailed first class to the address of such Owner appearing on the register maintained pursuant to Section 3.02, or by crediting the amount to be distributed to such Owner to an account maintained by such Owner with the Owner Trustee or by transferring such amount by wire transfer in immediately available funds to a banking institution with bank wire transfer facilities for the account of such Owner, as instructed in writing from time to time by such Owner. The Owner Trustee may require an Owner to pay any wire transfer fees incurred in connection with any wire transfer made to such Owner. 21 Section 7.10 NO SEGREGATION OF FUNDS; NO INTEREST. Subject to Sections 2.03(b)(ii) and 5.01, funds received by the Owner Trustee hereunder need not be segregated in any manner except to the extent required by law and may be deposited under such general conditions as may be prescribed by law, and the Owner Trustee shall not be liable for any interest thereon. Section 7.11 INTERPRETATION AND APPLICATION OF PROVISIONS BY THE ADMINISTRATOR. The Owner Trustee shall appoint and authorize the Administrator to interpret and apply the provisions set forth in Articles V, VI, VII and XI regarding application of funds, allocations of Profit and Loss and Distributions of Net Cash Flow, to resolve any ambiguities that may result from such application and to provide the Owner Trustee and the Owners with clarification of any provision as may be necessary or appropriate. The determinations of the Administrator shall be binding upon the Owners. ARTICLE VIII AUTHORITY AND DUTIES OF THE OWNER TRUSTEE Section 8.01 GENERAL AUTHORITY. The Owner Trustee is authorized to take all actions required or permitted to be taken by it pursuant to the terms of this Agreement, the Trust Related Agreements and the Statutory Trust Statute. The Owner Trustee is further authorized from time to time to take such action as the Administrator directs with respect to the Trust Related Agreements. Section 8.02 SPECIFIC AUTHORITY. The Owner Trustee is hereby authorized and directed to take the following actions: (a) Execute the Certificate of Trust; (b) Execute and deliver the Administration Agreement and the Back-up Agreement and on behalf of the Trust, the Trust Related Agreements, including without limitation, the Trust Certificates and any other document contemplated by the foregoing; in each case, in such form as the Administrator shall approve, as evidenced conclusively by the Owner Trustee's execution thereof; and (c) Execute and deliver on behalf of the Trust any documents necessary or appropriate, in such form as the Administrator shall approve, as evidenced conclusively by the Owner Trustee's execution thereof, to cause the repurchase by TERI or the Trust, as the case may be, of any Student Loan Note required to be repurchased in accordance with the TERI Guaranty Agreements. Section 8.03 GENERAL DUTIES. It shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Agreement and to administer the Trust in the interest of the Owners. Notwithstanding the foregoing, the Owner Trustee shall have deemed to have discharged its duties and responsibilities hereunder under the Trust Related Agreements to the extent the Administrator has agreed in the Administration Agreement to perform such acts or to discharge such duties of the Owner Trustee hereunder or under any Trust Related Agreement, and the Owner Trustee shall not be held liable for the 22 default or failure of the Administrator to carry out its obligations under the Administration Agreement. Section 8.04 ACCOUNTING AND REPORTS TO THE OWNERS, THE INTERNAL REVENUE SERVICE AND OTHERS. The Administrator shall (a) maintain or cause to be maintained the books of the Trust on a calendar year basis using the accrual method of accounting, (b) deliver to each Owner, within 60 days of the end of each Fiscal Year, or more often, as may be required by the Code and the Regulations thereunder, a copy of the annual financial statement of the Trust for such Fiscal Year and a statement in such form and containing such information as may be required by such Regulations, and as is necessary and appropriate to enable each Owner to prepare its federal and state income tax returns, (c) file such tax returns relating to the Trust, and make such elections, including an election for the first taxable year of the Trust, necessary for the Trust to qualify as a partnership, or as may from time to time be required under any applicable state or federal statute or rule or regulation thereunder, (d) cause such tax returns to be signed in the manner required by law, (e) collect or cause to be collected any withholding tax required by the Code to be withheld by the Owner Trustee with respect to distributions to Owners who are nonresident aliens or foreign corporations, and (f) cause to be mailed to each Owner copies of all such reports and tax returns of the Trust. Section 8.05 SIGNATURE OF RETURNS. The Owner Trustee shall sign on behalf of the Trust the tax returns and other Periodic Filings of the Trust, unless applicable law requires an Owner to sign such documents, in which case, so long as the Depositor is an Owner and applicable law allows the Depositor to sign any such document, the Depositor shall sign such document. At any time that the Depositor is not an Owner, or is otherwise not allowed by law to sign any such document, then the Owner required by law to sign such document shall sign. Section 8.06 RIGHT TO RECEIVE AND RELY UPON INSTRUCTIONS. In the event that the Owner Trustee is unable to decide between alternative courses of action, or is unsure as to the application of any provision of this Agreement or any Trust Related Agreement, or such provision is ambiguous as to its application, or is or appears to be, in conflict with any other applicable provision, or in the event that this Agreement or any Trust Related Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action which the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Owners requesting instructions and, to the extent that the Owner Trustee shall have acted or refrained from acting in good faith in accordance with any instructions received from the Owners, the Owner Trustee shall not be liable on account of such action or inaction to any Person. If the Owner Trustee shall not have received appropriate instructions within ten days of such notice (or within such shorter period of time as may be specified in such notice) the Owner Trustee may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Trust Related Agreements, as the Owner Trustee shall deem to be in the best interests of the Owners, and the Owner Trustee shall have no liability to any Person for such action or inaction. Section 8.07 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage, make any payment in respect of, register, record, sell, dispose of or otherwise deal with the Trust Property, or to otherwise take or 23 refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee or the Trust is a party, except as expressly provided by the terms of this Agreement and no implied duties or obligations shall be read into this Agreement against the Owner Trustee. The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Trust Property which result from claims against the Owner Trustee personally that are not related to the ownership or the administration of the Trust Property or the transactions contemplated by the Trust Related Agreements. Section 8.08 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Trust Property except (a) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, and (b) in accordance with instructions delivered to the Owner Trustee pursuant to Section 8.06 and Article IV hereof. Section 8.09 RESTRICTION. Notwithstanding anything herein to the contrary, the Owner Trustee shall not take any action (a) that is inconsistent with the purposes of the Trust or (b) that would result in the Trust being treated as an association taxable as a corporation for Federal income tax purposes. ARTICLE IX CONCERNING THE OWNER TRUSTEE Section 9.01 ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to the same but only upon the terms of this Agreement. The Owner Trustee shall not be personally liable under any circumstances, except (a) for its own willful misconduct or gross negligence, (b) for liabilities arising from the failure by the Owner Trustee to perform obligations expressly undertaken by it in the last sentence of Section 8.07, or (c) for taxes, fees or other charges on, based on or measured by any fees, commissions or compensation received by the Owner Trustee in connection with any of the transactions contemplated by this Agreement or the Trust Related Agreements. In particular, but not by way of limitation: (i) The Owner Trustee shall not be personally liable for any error of judgment made in good faith by an Authorized Officer of the Owner Trustee; (ii) The Owner Trustee shall not be personally liable with respect to any action taken or omitted to be taken by the Owner Trustee in good faith in accordance with the instructions of the Administrator or the Owners; (iii) No provision of this Agreement shall require the Owner Trustee to expend or risk its personal funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder, if the Owner Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it; 24 (iv) Under no circumstance shall the Owner Trustee be personally liable for any indebtedness of the Trust under any Trust Related Agreement; (v) The Owner Trustee shall not be personally responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor, or for the form, character, genuineness, sufficiency, value or validity of any Student Loan or Trust Certificate (other than with respect to the due execution thereby by an Authorized Officer), or for or in respect of the validity or sufficiency of the Administration Agreement or the Trust Related Agreements; and (vi) The Owner Trustee shall not be liable for the default or misconduct of the Administrator under any of the Trust Related Agreements or otherwise and the Owner Trustee shall have no obligation or liability to perform the obligations of the Trust hereunder or under any Trust Related Agreement that are required to be performed by the Administrator under the Administration Agreement. Section 9.02 FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish to the Owners, promptly upon receipt thereof, duplicates or copies of all material reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee hereunder (other than documents originated by or otherwise furnished to such Owners). Section 9.03 RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, note or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or any assistant treasurer or the secretary of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. (b) In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under any of the Trust Related Agreements, the Owner Trustee (i) may act directly or, at the expense of the Trust, through agents or attorneys pursuant to agreements entered into with any of them, and the Owner Trustee shall not be liable for the default or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care; and (ii) may, at the expense of the Trust, consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it, and the Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons. 25 Section 9.04 NOT ACTING IN INDIVIDUAL CAPACITY. Except as expressly provided in this Article IX, in accepting the trusts hereby created the Owner Trustee acts solely as trustee hereunder and not in its individual capacity, and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or the Trust Related Agreements shall look only to the Trust Property for payment or satisfaction thereof. Section 9.05 REPRESENTATIONS AND WARRANTIES OF OWNER TRUSTEE. The Owner Trustee represents and warrants to the Depositor that (a) the Owner Trustee meets the requirements of (i) Rule 3(a)(7) promulgated under the Investment Company Act of 1940, as amended, and (ii) section 3807 of the Statutory Trust Statute and (b) the Owner Trustee or the Owner Trustee's parent entity has a combined capital and surplus of at least $50,000,000. ARTICLE X. COMPENSATION OF OWNER TRUSTEE Section 10.01 OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall receive compensation from the Administrator and, to the extent not paid by the Administrator, from the Trust Property for its services hereunder as set forth on the fee schedule attached hereto as Exhibit 3. The Owner Trustee shall be entitled to be reimbursed by the Administrator and, to the extent not paid by the Administrator, from the Trust Property for its reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ in connection with the exercise and performance of its rights and duties under this Agreement and the Trust Related Agreements. Section 10.02 INDEMNIFICATION. The National Collegiate Funding LLC and The Education Resources Institute, Inc. shall be jointly and severally liable for, and hereby agree to indemnify Wachovia Trust Company, National Association, individually and as Owner Trustee, and its successors, assigns, agents and servants, from and against, any and all liabilities, obligations, losses, damages, taxes (other than taxes incurred as the result of the payment of fees and expenses pursuant to Section 10.01), claims, actions, suits, costs, expenses and disbursements (including legal fees and expenses) of any kind and nature whatsoever which may be imposed on, incurred by or asserted at any time against the Owner Trustee (whether or not indemnified against by other parties) in any way relating to or arising out of this Agreement, any Trust Related Agreement, the administration of the Trust Property or the action or inaction of the Owner Trustee hereunder, except only that the Owners shall not be required to indemnify the Owner Trustee for expenses arising or resulting from any of the matters described in the second sentence of Section 9.01. The indemnities contained in this Section 10.02 shall survive the termination of this Agreement. The obligations of The National Collegiate Funding LLC and The Education Resources Institute, Inc. pursuant to this Section 10.02 shall be borne in proportion to their respective Percentage Interests. The indemnities contained in this Section 10.02 extend only to the Owner Trustee in its individual capacity. Section 10.03 LIEN ON TRUST PROPERTY. Following the retirement of the Notes the Owner Trustee shall have a lien on the Trust Property for any compensation or expenses and indemnity due hereunder which lien shall be prior to all other liens. 26 Section 10.04 PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the Owner Trustee from the Trust Property pursuant to this Article X shall be deemed not to be part of the Trust Property immediately after such payment. ARTICLE XI TERMINATION OF TRUST Section 11.01 TERMINATION OF TRUST. (a) The trust created hereby shall dissolve and terminate and, except as otherwise provided in this Article XI, this Agreement shall be of no further force or effect, upon the earlier of (i) if the Notes are no longer outstanding, the unanimous consent of the Owners, (ii) if the Notes are no longer outstanding, the sale or other final disposition by the Owner Trustee of the Trust Property and the final distribution by the Owner Trustee of all funds or other property or proceeds of the Trust Property in accordance with the terms of this Agreement and the Trust Related Agreements, and (iii) 21 years less one day after the death of the survivor of the descendants living on the date of this Agreement of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James. (b) The bankruptcy, death, incapacity, dissolution or termination of any Owner shall not operate to dissolve or terminate this Agreement, nor entitle such Owner's legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust Property, nor otherwise affect the rights, obligations and liabilities of the parties hereto. (c) Upon the termination of the Trust pursuant to this Article XI, the Owner Trustee shall cause a Certificate of Termination to be filed with the Secretary of State. Section 11.02 DISTRIBUTION OF ASSETS. Upon dissolution and termination of the Trust, the Owner Trustee shall take full account of the Trust assets and liabilities, shall liquidate the assets as promptly as is consistent with obtaining the fair value thereof, and shall apply and distribute the proceeds therefrom in the following order: (a) To the payment of the expenses of liquidation and the debts and liabilities of the Trust; (b) To the setting up of reserves which the Owner Trustee may deem necessary or appropriate for anticipated obligations or contingencies of the Trust arising out of or in connection with the operation of the Trust. Such reserves may be paid over by the Owner Trustee to an escrow agent or trustee selected by the Owner Trustee to be disbursed by such escrow agent or trustee in payment of any of such obligations or contingencies and, if any balance remains at the expiration of such period as the Owner Trustee shall deem advisable, to be distributed by such escrow agent or trustee in the manner hereinafter provided; (c) To each of the Owners, other than TERI, in accordance with the positive balances in each such Owner's Capital Account to the extent of the aggregate unreturned Capital Contributions of such Owner credited therein; and 27 (d) To the Owners, the balance of any proceeds in accordance with the positive balances in their respective Capital Accounts; provided that with respect to any distribution to TERI, such distribution shall be reduced by the amount of money paid to TERI by the Trust in accordance with paragraph 4 of the Section 2.05 Supplement to Master Loan Guaranty Agreement between TERI and The First Marblehead Corporation dated April 30, 2001 less the amount by which aggregate Distributions to TERI of Net Cash Flow pursuant to Section 7.06 hereof have been reduced by the application of subsection (iii) thereof, and any such reduction shall be distributed to the Owners other than TERI in accordance with the positive balances in their respective Capital Accounts. If at the time of liquidation the Owner Trustee shall determine that an immediate sale of some or all of the assets would cause undue loss to the Owners, the Owner Trustee may, in order to avoid such loss and with the consent of the Owners, defer liquidation. Section 11.03 NO TERMINATION BY DEPOSITOR OR OWNERS. Except as provided in Section 11.01, neither the Depositor nor the Owners shall be entitled to terminate or revoke the Trust established hereunder. ARTICLE XII. SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES Section 12.01 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR. (a) The Owner Trustee may resign at any time without cause by giving at least 60 days' prior written notice to the Administrator, the Owners and the Administrative Agent, such resignation to be effective upon the acceptance of appointment by a successor Owner Trustee under Section 12.01(b). In addition, the Super-majority Owners may at any time remove the Owner Trustee without cause by an instrument in writing delivered to the Owner Trustee and the Administrator, such removal to be effective upon the acceptance of appointment by a successor Owner Trustee under Section 12.01(b). In case of the resignation or removal of the Owner Trustee, the Owners may appoint a successor Owner Trustee by an instrument signed by the Owners. If a successor Owner Trustee shall not have been appointed within 30 days after the giving of written notice of such resignation or the delivery of the written instrument with respect to such removal, the Owner Trustee or the Owners may apply to any court of competent jurisdiction to appoint a successor Owner Trustee to act until such time, if any, as a successor Owner Trustee shall have been appointed as provided above. Any successor Owner Trustee so appointed by such court shall immediately and without further act be superseded by any successor Owner Trustee appointed as above provided within one year from the date of the appointment by such court. (b) Any successor Owner Trustee, however appointed, shall execute and deliver to the predecessor Owner Trustee an instrument accepting such appointment, and thereupon such successor Owner Trustee, without further act (except for the filing required under clause (e) below), shall become vested with all the estates, properties, rights, powers, duties and trust of the predecessor Owner Trustee in the trusts hereunder with like effect as if originally named the Owner Trustee herein; but nevertheless, upon the written request of such successor Owner 28 Trustee and the payment of all fees and indemnities due the predecessor Owner Trustee, such predecessor Owner Trustee shall execute and deliver an instrument transferring to such successor Owner Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, duties and trusts of such predecessor Owner Trustee, and such predecessor Owner Trustee shall duly assign, transfer, deliver and pay over to such successor Owner Trustee all funds or other property then held or subsequently received by such predecessor Owner Trustee upon the trusts herein expressed. (c) Any successor Owner Trustee, however appointed, shall be a bank or trust company (i) that meets the requirements of (A) Rule 3(a)(7) promulgated under the Investment Company Act of 1940, as amended, and (B) section 3807 of the Statutory Trust Statute and (ii) whose parent entity has a combined capital and surplus of at least $50,000,000, if there be such an institution willing, able and legally qualified to perform the duties of the Owner Trustee hereunder upon reasonable or customary terms. (d) Any corporation into which the Owner 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 Owner Trustee shall be a party, or any corporation to which substantially all the corporate trust business of the Owner Trustee may be transferred, shall, subject to the terms of Section 12.01(c), be the Owner Trustee under this Agreement without further act. (e) Any successor Owner Trustee appointed pursuant to this Article XII shall file an amendment to the Certificate of Trust with the Secretary of State reflecting the name and principal place of business of such successor Owner Trustee. Section 12.02 APPOINTMENT OF ADDITIONAL OWNER TRUSTEES. At any time or times for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Property may at the time be located, the Owner Trustee and the Administrator, acting jointly, by an instrument in writing, may appoint one or more individuals or corporations approved by the Administrator and the Owner Trustee to act as separate trustee or separate trustees of all or any part of the Trust Property to the full extent that local law makes it necessary or appropriate for such separate trustee or separate trustees to act alone. If the Administrator shall not have joined in such appointment within fifteen days after the receipt of such request, the Owner Trustee, acting alone, shall have the power to make such appointment. ARTICLE XIII TAX MATTERS PARTNER Section 13.01 TAX MATTERS PARTNER. The tax matters partner (within the meaning of section 6231(a)(7) of the Code and applicable Regulations) of the Trust for all federal income tax purposes set forth in the Code shall be The National Collegiate Funding LLC. Subject to Section 13.08, the tax matters partner shall have the authority to represent the Trust and perform the duties imposed on the tax matters partner under the Code, and as set forth in this Article XIII. 29 Section 13.02 NOTICE OF TAX AUDIT. The tax matters partner shall give prompt notice to the Owners upon receipt of advice that the Internal Revenue Service intends to examine Trust income tax returns for any year. Section 13.03 AUTHORITY TO EXTEND PERIOD FOR ASSESSING TAX. Subject to Section 13.08, the tax matters partner shall have the authority to extend the period for assessing any tax imposed on any Owner under the Code by any agreement as provided for under section 6229(b)(1)(B) of the Code. Section 13.04 CHOICE OF FORUM FOR FILING PETITION FOR READJUSTMENT. Any petition for readjustment may, but is not required to, be filed by the tax matters partner in accordance with section 6226(a) of the Code in the United States District Court for the district in which the Trust's principal place of business is located, or the United States Claims Court. Section 13.05 AUTHORITY TO BIND OWNERS BY SETTLEMENT AGREEMENT. Subject to Section 13.08, the tax matters partner shall enter into a settlement agreement in accordance with section 6224(c)(3) of the Code as directed by the Owners. Section 13.06 NOTICES SENT TO THE INTERNAL REVENUE SERVICE. The tax matters partner shall use its best efforts to furnish to the Internal Revenue Service the name, address, profits interest and taxpayer identification number of each Owner and any additional information it receives from each Owner regarding any change in that Owner's name, address, profits interest and taxpayer identification number. In no event shall the tax matters partner be liable, responsible or accountable in damages or otherwise to the Owner for any loss in connection with furnishing such information to the Internal Revenue Service if the tax matters partner acts in good faith and is not guilty of fraud or gross negligence. Section 13.07 INDEMNIFICATION OF TAX MATTERS PARTNER. The Trust shall indemnify and save harmless the tax matters partner against any loss, damage, cost or expense (including attorneys' fees) incurred by it as a result of any act performed or omitted on behalf of the Trust or any Owner or in furtherance of the Trust's interests or the interests of the Owner, in its capacity as tax matters partner, without, however, relieving the tax matters partner of liability for bad faith, fraud or gross negligence. Section 13.08 APPROVAL OF TAX MATTERS PARTNER'S DECISIONS. The tax matters partner shall call a meeting of the Owners at any time in order to discuss any decisions the tax matters partner may propose to make, notice of which shall be included in the notice of such meeting. The tax matters partner shall make no decision and take no action with respect to the determination, assessment or collection of any tax imposed by the Code on the Owners unless and until such decision has been approved by the Owners. Section 13.09 PARTICIPATION BY OWNERS IN INTERNAL REVENUE SERVICE ADMINISTRATIVE PROCEEDINGS. Nothing contained in this Article XIII shall be construed to take away from any Owner any right granted to such person by the Code to participate in any manner in administrative proceedings of the Internal Revenue Service. 30 ARTICLE XIV MISCELLANEOUS Section 14.01 SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be amended only by a written instrument signed by the Owner Trustee and all of the Owners at the time of such amendment and upon satisfaction of the Rating Agency Condition (as defined in the Indenture); PROVIDED, HOWEVER, that if, in the opinion of the Owner Trustee, any instrument required to be so executed adversely affects any right, duty or liability of, or immunity or indemnity in favor of, the Owner Trustee under this Agreement or any of the documents contemplated hereby to which the Owner Trustee or the Trust is a party, or would cause or result in any conflict with or breach of any terms, conditions or provisions of, or default under, the charter documents or by-laws of the Owner Trustee or any document contemplated hereby to which the Owner Trustee is a party, the Owner Trustee may in its sole discretion decline to execute such instrument. The Certificate of Trust shall be amended (except as required by the Statutory Trust Statute) only upon satisfaction of the Rating Agency Condition (as defined in the Indenture). The Owner Trustee shall be fully protected in relying upon a certificate of the Administrator in determining if the Rating Agency Condition (as defined in the Indenture) has been satisfied. (b) The Trust shall not change its jurisdiction of formation without first satisfying the Rating Agency Condition (as defined in the Indenture). Section 14.02 NO LEGAL TITLE TO TRUST PROPERTY IN OWNER. Legal title to all Trust Property shall be vested at all times in the Trust as a separate legal entity, except where the laws of any jurisdiction require title to be vested in a trustee in which case legal title shall be vested in the Owner Trustee on behalf of the Trust. The Owners shall not have legal title to any part of the Trust Property and shall only have an undivided beneficial interest therein. No transfer, by operation of law or otherwise, of any right, title and interest of the Owners in and to their undivided Beneficial Interests in the Trust Property hereunder shall operate to terminate this Agreement or the trusts hereunder or entitle any successor transferee to an accounting or to the transfer to it of legal title to any part of the Trust Property. Section 14.03 PLEDGE OF COLLATERAL BY OWNER TRUSTEE IS BINDING. The pledge of any Trust Property to any Person by the Owner Trustee made under any Trust Related Agreement and pursuant to the terms of this Agreement shall bind the Owners and shall be effective to transfer or convey the rights of the Owner Trustee and the Owners in and to such Trust Property to the extent set forth in such Trust Related Agreement. No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of such pledge or as to the application of any proceeds with respect thereto by the Owner Trustee. Section 14.04 LIMITATIONS ON RIGHTS OF OTHERS. Nothing in this Agreement, whether express or implied, shall be construed to give to any Person other than the Owner Trustee, the Administrator and the Owners any legal or equitable right, remedy or claim in the Trust Property or under or in respect of this Agreement or any covenants, conditions or provisions contained 31 herein PROVIDED, HOWEVER, that for so long as any of the Notes are outstanding or any amounts are owed to the Indenture Trustee and the Noteholders, are third party beneficiaries hereof. Section 14.05 NOTICES. Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and delivered by hand or mailed by certified mail, postage prepaid, if to the Owner Trustee, addressed to: Wachovia Trust Company, National Association, One Rodney Square, 1st Floor, 920 King Street, Wilmington, Delaware 19801, Attention: Corporate Trust Administration, or to such other address as the Owner Trustee may have set forth in a written notice to the Owners; and if to an Owner, addressed to it at the address set forth for such Owner in the register maintained by the Owner Trustee. Whenever any notice in writing is required to be given by the Owner Trustee hereunder, such notice shall be deemed given and such requirement satisfied 72 hours after such notice is mailed by certified mail, postage prepaid, addressed as provided above; any notice given by an Owner to the Owner Trustee shall be effective upon receipt by an Authorized Officer of the Owner Trustee. A copy of any notice delivered to the Owner Trustee shall also be delivered to the Administrator, addressed to: First Marblehead Data Services, Inc., 230 Park Avenue, New York, New York 10169, Attention: Mr. Rob Baron, with a copy to First Marblehead Corporation, The Prudential Tower, 800 Boylston Street - 34th Floor, Boston, MA 02199-8157, Attention: Mr. Richard P. Zermani or to such other addresses as the Administrator may have set forth in a written notice to the Owner Trustee. Section 14.06 SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 14.07 SEPARATE COUNTERPARTS. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 14.08 SUCCESSORS AND ASSIGNS. All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Owner Trustee and its successors and assigns and each Owner and its successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by an Owner shall bind the successors and assigns of such Owner. Section 14.09 HEADINGS. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. Section 14.10 GOVERNING LAW. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of Delaware (excluding conflict of law rules), including all matters of construction, validity and performance. Section 14.11 GENERAL INTERPRETIVE PRINCIPLES. For purposes of this Agreement except as otherwise expressly provided or unless the context otherwise requires: 32 (a) The defined terms in this Agreement include the plural as well as the singular, and the use of any gender herein shall be deemed to include any other gender; (b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date hereof; (c) References herein to "Articles," "Sections," "paragraphs" and other subdivisions without reference to a document are to designated Articles, Sections, paragraphs and other subdivisions of this Agreement; (d) A reference to a paragraph without further reference to a Section is a reference to such paragraph as contained in the same Section in which the reference appears, and this rule shall also apply to subparagraphs and other subdivisions; (e) The words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision; and (f) The term "include" or "including" shall mean without limitation by reason of enumeration. 33 IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity except as expressly provided herein, but solely as Owner Trustee By: /s/ Sterling C. Correia -------------------------------- Name: Sterling Correia Title: Vice President THE NATIONAL COLLEGIATE FUNDING, as Depositor and Owner By: GATE Holdings, Inc., Member By: /s/ Bruce F. Lefenfeld -------------------------------- Name: Bruce F. Lefenfeld Title: Vice President THE EDUCATION RESOURCES INSTITUTE, Inc., as Owner By: /s/ Lawrence W. O'Toole -------------------------------- Name: Lawrence W. O'Toole Title: President ACKNOWLEDGED WITH RESPECT TO THE POWER OF ATTORNEY GRANTED IN SECTION 4.05 FIRST MARBLEHEAD DATA SERVICES, INC. By: /s/ Bruce F. Lefenfeld --------------------------------- Name: Bruce F. Lefenfeld Title: President TRUST AGREEMENT
SCHEDULE A OWNERS CAPITAL CONTRIBUTION ($) INITIAL SHARING RATIO (%) PERCENTAGE INTEREST (%) - ----------------------- ------------------------ ------------------------- ----------------------- The National Collegiate $1.00 75% 75% Funding LLC The Education Resources None 25% 25% Institute, Inc.
SCHEDULE B LOAN ORIGINATORS o Bank of America, N.A. o Bank One, N.A. o Charter One Bank, N.A. o Chase Manhattan Bank USA, N.A. o Citizens Bank of Rhode Island o First National Bank Northeast o GMAC Bank o HSBC Bank USA o The Huntington National Bank o National City Bank o SunTrust Bank SCHEDULE C LOAN PURCHASE AGREEMENTS Each of the Note Purchase Agreements, as amended or supplemented, was entered into by and between The First Marblehead Corporation and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 1, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated November 13, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. 2 SCHEDULE D GUARANTY AGREEMENTS Each of the following Guaranty Agreements, as amended or supplemented, was entered into by and between The Education Resources Institute, Inc. and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 13, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated July 26, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. 2 EXHIBIT 1 FORM OF TRUST CERTIFICATE THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 TRUST CERTIFICATE THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE OWNER TRUSTEE, SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES LAWS. THE TRANSFER OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE HAS DELIVERED TO THE OWNER TRUSTEE A LETTER IN THE FORM REQUIRED BY SECTION 3.04(A) OF THE TRUST AGREEMENT AND THE TRANSFEREE PROVIDES THE OWNER TRUSTEE WITH EVIDENCE SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE TRANSFEROR'S COMPLIANCE WITH SECTION 3.04(B) OF THE TRUST AGREEMENT. TRUST CERTIFICATE UNDER THE TRUST AGREEMENT, DATED AS OF JUNE 10, 2004 Certificate No. ______ Wachovia Trust Company, National Association, not in its individual capacity, but solely as owner trustee (the "Owner Trustee") under the Trust Agreement, dated as of June 10, 2004, with The National Collegiate Funding LLC and The Education Resources Institute, Inc., on behalf of the holders from time to time (each an "Owner") of beneficial interests in the trust created thereby (the "Trust Agreement"), hereby certifies that ______________ is the owner of a _____% undivided beneficial interest in the Trust Property provided for and created by the Trust Agreement. This Trust Certificate is issued pursuant to and is entitled to the benefits of the Trust Agreement, and each Owner by acceptance hereof shall be bound by the terms of the Trust Agreement. Reference is hereby made to the Trust Agreement for a statement of the rights and obligations of the Owner hereof. The Owner Trustee may treat the person shown on the register maintained by the Owner Trustee pursuant to Section 3.02 of the Trust Agreement as the absolute Owner hereof for all purposes. Capitalized terms used herein without definition have the meanings ascribed to them in or by reference in the Trust Agreement. Transfer of this Trust Certificate is subject to certain restrictions and limitations set forth in the Trust Agreement, including the requirement that any transfer requires the prior consent of owners of at least 80% of the Percentage Interests in the Trust. In the manner more fully set forth in, and as limited by, the Trust Agreement, this Trust Certificate may be transferred upon the books of the Owner Trustee by the registered Owner in person or by his attorney duly authorized in writing upon surrender of this Trust Certificate to the Owner Trustee accompanied by a written instrument of transfer and with such signature guarantees and evidence of authority of the Persons signing the instrument of transfer as the Owner Trustee may reasonably require, whereupon the Owner Trustee shall issue in the name of the transferee a Trust Certificate or Trust Certificates evidencing the amount and extent of interest of the transferee. The Owner hereof, by its acceptance of this Trust Certificate, warrants and represents to the Owner Trustee and to the Owners of the other Trust Certificates issued under the Trust Agreement and agrees not to transfer this Trust Certificate except in accordance with the Trust Agreement. This Trust Certificate and the Trust Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of Delaware (excluding conflict of law rules), including all matters of construction, validity and performance. IN WITNESS WHEREOF, the Owner Trustee, pursuant to the Trust Agreement, has caused this Trust Certificate to be issued as of the date hereof. WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee By: _________________________________ Name: _______________________________ Title: ______________________________ Dated: June 10, 2004 EXHIBIT 2 FORM OF ACCESSION AGREEMENT ___________________, ____________ Wachovia Trust Company, National Association One Rodney Square 920 King Street, 1st Floor Wilmington, Delaware 19801 Attention: Corporate Trust Administration Dear Sirs: We refer to the Trust Agreement, dated as of June 10, 2004 (the "Trust Agreement"), among The National Collegiate Funding LLC (the "Company"), The Education Resources Institute, Inc. and Wachovia Trust Company, National Association, a national banking association (in its capacity as trustee thereunder, the "Owner Trustee"). We propose to purchase a beneficial interest in The National Collegiate Student Loan Trust 2004-1, a Delaware statutory trust (the "Trust") formed pursuant to the Trust Agreement. Capitalized terms used herein without definition have the meanings given them in the Trust Agreement. 1. We understand that our Trust Certificate is not being registered under the Securities Act of 1933, as amended (the "1933 Act"), or any state securities or "Blue Sky" law and is being sold to us in a transaction that is exempt from the registration requirements of the 1933 Act and any applicable state laws. 2. We have knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Trust, we are able to bear the economic risk of investment in the Trust and we are an "accredited investor" as defined in Regulation D under the 1933 Act. 3. We acknowledge that none of the Trust, the Company or the Owner Trustee has advised us concerning the federal or state income tax consequences of owning a beneficial interest in the Trust, including the tax status of the Trust or the likelihood that distributions from the Trust would be characterized as "unrelated business income" for federal tax purposes, and we have consulted with our own tax advisor with respect to such matters. 4. We are acquiring our Trust Certificate for our own account and not for the benefit of any other person and not with a view to any distribution of our beneficial interest in the Trust subject, nevertheless, to the understanding that disposition of our property shall at all times be and remain within our control. 5. We agree that our beneficial interest in the Trust must be held indefinitely by us unless subsequently registered under the 1933 Act and any applicable state securities or "Blue Sky" law or unless exemptions from the registration requirements of the 1933 Act and applicable state laws are available. 6. We agree that in the event that at some future time we wish to dispose of or exchange any of our beneficial interest in the Trust, we will not transfer or exchange any of our beneficial interest in the Trust unless we have obtained the prior written consent to such transfer or exchange pursuant to Section 3.04 of the Trust Agreement, and either: (A)(1) the transfer or exchange is made to an Eligible Purchaser (as defined below), (2) a letter to substantially the same effect as this letter is executed promptly by such Eligible Purchaser and (3) all offers or solicitations in connection with the sale (if a sale), whether made directly or through any agent acting on our behalf, are limited only to Eligible Purchasers and are not made by means of any form of general solicitation or general advertising whatsoever; or (B) our beneficial interest in the Trust is sold in a transaction that does not require registration under the 1933 Act and any applicable State "Blue Sky" law. "Eligible Purchaser" means a corporation, partnership or other entity which we have reasonable grounds to believe and do believe can make representations with respect to itself to substantially the same effect as the representations set forth herein. 7. We understand that our Trust Certificate bears a legend to substantially the following effect: THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE OWNER TRUSTEE SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES LAWS. THE TRANSFER OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE HAS DELIVERED TO THE OWNER TRUSTEE A LETTER IN THE FORM REQUIRED BY SECTION 3.04(A) OF THE TRUST AGREEMENT AND THE TRANSFEREE PROVIDES THE OWNER TRUSTEE WITH EVIDENCE SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE TRANSFEROR'S COMPLIANCE WITH SECTION 3.04(B) OF THE TRUST AGREEMENT. 8. We agree to be bound by all terms and conditions of our Trust Certificate and the Trust Agreement. Very truly yours, _____________________________________ Name of Purchaser By: _________________________________ Name: _______________________________ Title: ______________________________ Accepted and Acknowledged this _______th day of ____________, _________. WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee By: ________________________________________ Name: ______________________________________ Title: _____________________________________ EXHIBIT 3 FEE SCHEDULE INITIAL FEE - $2,000 ANNUAL ADMINISTRATION FEE - $2,500 EX-10.10 11 ncf_ex10-10.txt ADMINISTRATION AGREEMENT EXHIBIT 10.10 ADMINISTRATION AGREEMENT This ADMINISTRATION AGREEMENT dated as of June 10, 2004 (as amended from time to time, the "AGREEMENT"), among THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, a Delaware statutory trust (the "ISSUER"), WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as Owner Trustee (the "OWNER TRUSTEE"), U.S. BANK NATIONAL ASSOCIATION, a national banking association (the "INDENTURE TRUSTEE"), solely in its capacity as trustee under the Indenture (hereinafter defined), and FIRST MARBLEHEAD DATA SERVICES, INC., a Massachusetts corporation (the "ADMINISTRATOR"). WHEREAS, the Issuer is issuing its (a) Student Loan Asset Backed Notes (the "NOTES") pursuant to the Indenture dated as of June 1, 2004 (the "INDENTURE"), between the Issuer and the Indenture Trustee, and (b) its Trust Certificates pursuant to the Trust Agreement dated as of June 10, 2004 (the "TRUST AGREEMENT") among the Owner Trustee, The National Collegiate Funding LLC and The Education Resources Institute, Inc. (together with its successors in interest, the "OWNERS"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement or the Indenture (the Trust Agreement and the Indenture are referred to collectively herein as the "BASIC DOCUMENTS"); WHEREAS, pursuant to the Basic Documents, the Issuer and the Owner Trustee are required to perform certain duties in connection with (a) the Student Loans and other collateral pledged pursuant to the Indenture (the "COLLATERAL"), (b) the Notes and (c) the Trust Certificates; WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain of the duties of the Issuer referred to in the Basic Documents and any other documents signed by the Owner Trustee on behalf of the Issuer (collectively, the "TRUST RELATED AGREEMENTS") and to provide such additional services consistent with the terms of this Agreement and the Trust Related Agreements as the Issuer and the Owner Trustee may from time to time request; and WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein; NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. DUTIES OF THE ADMINISTRATOR. (a) DUTIES WITH RESPECT TO THE TRUST RELATED AGREEMENTS. (i) The Administrator agrees to perform all its duties as Administrator and the duties of the Issuer under the Trust Related Agreements. In addition, the Administrator shall consult with the Owner Trustee regarding the duties of the Issuer under the Trust Related Agreements. The Administrator shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the Issuer's duties under the Trust Related Agreements. The Administrator shall prepare for execution by the Issuer, or shall cause the preparation by other appropriate persons or entities of, all such documents, reports, filings, instruments, certificates and opinions that it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Trust Related Agreements. In furtherance of the foregoing, the Administrator shall take all appropriate action that is the duty of the Issuer to take pursuant to the Trust Related Agreements including, without limitation, such of the foregoing as are required with respect to the following matters under the Indenture: (A) The direction to the Indenture Trustee by Issuer Order to deposit moneys with Paying Agents, if any, other than the Indenture Trustee; (B) The preparation and delivery of notice to the Noteholders of the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee; (C) The preparation of an Issuer Order and Officer's Certificate and the obtaining of an Opinion of Counsel, if necessary, for the release of property of the Trust Estate; (D) The preparation of Issuer Requests and the obtaining of Opinions of Counsel with respect to the execution of amendments to the Indenture and the Trust Agreement and the mailing to the Noteholders of notices with respect to such amendments; (E) The payment of all expenses in connection with the issuance of the Notes; and (F) Taking all actions on behalf of the Issuer necessary under the TERI Guarantee Agreement. (ii) The Administrator will: (A) Indemnify the Indenture Trustee and its agents for, and hold them harmless against, any losses, liability or expense, including reasonable attorneys fees and expenses, incurred without willful misconduct, negligence, or bad faith on their part, arising out of the willful misconduct, negligence or bad faith of the Administrator in the performance of the Administrator's duties contemplated by this Agreement; and (B) Indemnify the Issuer and the Owner Trustee and their respective agents for, and hold them harmless against, any losses, liability or expense, including reasonable attorneys fees and expenses, incurred without negligence, willful misconduct or bad faith on 2 their part, arising out of the willful misconduct, negligence or bad faith of the Administrator in the performance of the Administrator's duties contemplated by this Agreement; PROVIDED, HOWEVER, that the Administrator shall not be required to indemnify the Indenture Trustee, the Issuer or the Owner Trustee pursuant to Section 1(a) (ii)(A) or (B) of this Agreement so long as the Administrator has acted pursuant to the instructions of the Owner Trustee or the Owners in accordance with Subsection 1(c) of this Agreement; and (C) Pay the Owner Trustee fees and expenses as are set forth in section 10.01 of the Trust Agreement. (b) ADDITIONAL DUTIES. (i) In addition to the duties of the Administrator set forth above, the Administrator shall perform, or cause to be performed, its duties and obligations and the duties and obligations of (x) the Owner Trustee on behalf of the Issuer under the Indenture and the Trust Agreement and (y) the Grantor Trustee on behalf of the Depositor under the Grantor Trust Agreement dated June 10, 2004, among The National Collegiate Funding LLC, as Depositor, and U.S. Bank National Association, as Grantor Trustee, including, without limitation, those duties and obligations set forth on SCHEDULE A hereto. In furtherance thereof, the Issuer shall execute and deliver to the Administrator and to each successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the form of EXHIBIT A hereto, appointing the Administrator the attorney-in-fact of the Issuer for the purpose of executing on behalf of the Issuer all such documents, reports, filings, instruments, certificates and opinions. Subject to Section 4 of this Agreement, and in accordance with the directions of the Issuer and the Owner Trustee, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Trust Related Agreements) as are not covered by any of the foregoing provisions and as are expressly requested by the Issuer, the Indenture Trustee or the Owner Trustee and are reasonably within the capability of the Administrator. The Administrator agrees to perform such obligations and deliver such notices as are specified as to be performed or delivered by the Administrator under the Indenture and the Trust Agreement. (ii) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions or otherwise deal with any of its affiliates; PROVIDED, HOWEVER, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer, the Indenture Trustee or the Owner Trustee, and shall be, in the Administrator's opinion, no less favorable to the Issuer than would be available from unaffiliated parties. (iii) In carrying out any of its obligations under this Agreement, the Administrator may act either directly or through agents, attorneys, accountants, independent contractors and auditors and enter into agreements with any of them. 3 (iv) In carrying out its duties under this Agreement with respect to delinquent or defaulted Student Loans, the Administrator may retain and employ agents to collect on such Student Loans and to commence any actions or proceedings the agents deem necessary in connection with such collection efforts on such Student Loans. (v) The Administrator shall cause a nationally recognized independent public accounting firm to conduct an annual audit of the Financed Student Loans owned by the Issuer in accordance with procedures acceptable to the Rating Agencies and shall provide the Rating Agencies with a copy of the audit report. (c) NON-MINISTERIAL MATTERS. (i) With respect to matters that in the reasonable judgment of the Administrator are non-ministerial, the Administrator shall not be under any obligation to take any action, and in any event shall not take any action, unless the Administrator shall have received instructions from the Indenture Trustee, in accordance with the Indenture, or from the Owner Trustee or the Owners, in accordance with the Trust Agreement. For the purpose of the preceding sentence, "non-ministerial matters" shall include, without limitation: (A) The amendment of or any supplement to the Trust Related Agreements; (B) The initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer, except for claims or lawsuits initiated in the ordinary course of business by the Issuer or its agents or nominees for the collection of the Student Loans owned by the Issuer; (C) The appointment of successor administrators and successor indenture trustees pursuant to the Indenture, or the consent to the assignment by the Administrator or Indenture Trustee of its obligations under the Indenture; and (D) The removal of the Indenture Trustee. (ii) Notwithstanding anything to the contrary in this Agreement, the Administrator shall not be obligated to, and shall not (A) make any payments to the Noteholders under the Trust Related Agreements, (B) sell the Collateral pursuant to the Indenture or (C) take any action that the Issuer directs the Administrator not to take on its behalf. (d) ACTIONS ON BEHALF OF THE OWNERS. Pursuant to Section 4.05 of the Trust Agreement, each Owner has appointed the Administrator as its true and lawful attorney-in-fact with respect to certain matters described in such Section 4.05. 2. RECORDS. The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer, the Indenture Trustee, the Noteholders and the Owners at any time during normal business hours. 4 3. COMPENSATION. As compensation for the performance of the Administrator's obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to: (a) A fee (the "ADMINISTRATION FEE") payable on each Quarterly Distribution Date at a rate equal to 1/4 of 0.10% of the aggregate outstanding principal balance of the Financed Student Loans owned by the Issuer as of the related Determination Date for the prior Quarterly Distribution Date (and in the case of the payment of the Administration Fee on the first Quarterly Distribution Date as of the Cutoff Date); (b) Reimbursement for the following expenses, which expenses shall not exceed $100,000 in the aggregate per annum: (i) Annual audits of Servicers pursuant to Section 10.02 of the Indenture; (ii) Payments to Servicers for borrower privacy policy notices as required by the Gramm-Leach-Bliley Act; and (iii) Any other expenses of the Issuer. The payment of the foregoing fees and expenses shall be solely an obligation of the Issuer. 4. ADDITIONAL INFORMATION TO BE FURNISHED. The Administrator shall furnish to the Issuer and the Noteholders from time to time such additional information regarding the Collateral as the Issuer and the Noteholders shall reasonably request. 5. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee. 6. NO JOINT VENTURE. Nothing contained in this Agreement (i) shall constitute the Administrator and any of the Issuer, the Owner Trustee or any Owner as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others. 7. OTHER ACTIVITIES OF THE ADMINISTRATOR. Nothing herein shall prevent the Administrator or its Affiliates from engaging in other businesses or, in its or their sole discretion, from acting in a similar capacity as an administrator for any other person or entity even though such person or entity may engage in business activities similar to those of the Issuer, the Owner Trustee or the Indenture Trustee. 5 8. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR. (a) This Agreement shall continue in force until the dissolution of the Issuer, upon which event this Agreement shall automatically terminate. (b) Subject to Section 8(e) of this Agreement, the Administrator may resign its duties hereunder by providing the Issuer, the Noteholders and the Indenture Trustee with at least 60 days' prior written notice. (c) Subject to Section 8(e) of this Agreement, the Indenture Trustee, at the direction of the Noteholders (pursuant to the Indenture), may remove the Administrator without cause by providing the Administrator with at least 60 days' prior written notice. (d) Subject to Section 8(e) of this Agreement, at the option of the Indenture Trustee, at the direction of the Noteholders (pursuant to the Indenture), the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator if any of the following events shall occur: (i) The Administrator shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall not cure such default within ten days (or, if such default cannot be cured in such time, shall not give within ten days such assurance of cure as shall be reasonably satisfactory to the Issuer); (ii) A court having jurisdiction in the premises shall enter a decree or order for relief, and such decree or order shall not have been vacated within 60 days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or (iii) The Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due. The Administrator agrees that if any of the events specified in clauses (ii) or (iii) of this Section shall occur, it shall give written notice thereof to the Owner Trustee, the Noteholders and the Indenture Trustee within two Business Days after the happening of such event. (e) No resignation or removal of the Administrator pursuant to this Section shall be effective until (i) a successor Administrator shall have been appointed by the Issuer (with the consent of the Owner Trustee pursuant to Section 12 of this Agreement) and (ii) such successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound hereunder. 6 (f) The appointment of any successor Administrator shall be effective only after each Rating Agency, after having been given 10 days' prior notice of such proposed appointment, shall have declared in writing that such appointment will not result in a reduction or withdrawal of the then current rating of the Notes. (g) Concurrently with the execution of this Agreement, the parties hereto shall enter into a Back-up Note Administration Agreement (the "BACK-UP AGREEMENT') pursuant to which the Indenture Trustee will perform certain duties of the Administrator in accordance with this Agreement in the event that the Administrator is terminated under this Section 8. 9. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly upon the effective date of termination of this Agreement pursuant to Section 8(a) of this Agreement or the resignation or removal of the Administrator pursuant to Section 8(b) or (c) of this Agreement, respectively, the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 8(a) of this Agreement deliver to the Issuer all property and documents of or relating to the Collateral then in the custody of the Administrator. In the event of the resignation or removal of the Administrator pursuant to Section 8(b) or (c) of this Agreement, respectively, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator. 10. NOTICES. Any notice, report or other communication given hereunder shall be in writing and addressed as follows: (a) If to the Issuer, to: The National Collegiate Student Loan Trust 2004-1 c/o Wachovia Trust Company, National Association, as Owner Trustee One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Mr. Sterling C. Correia 7 (b) If to the Administrator, to: First Marblehead Data Services, Inc. 230 Park Avenue New York, NY 10169 Attention: Mr. Rob Baron with a copy to: First Marblehead Corporation The Prudential Tower 800 Boylston Street - 34th Floor Boston, MA 02199-8157 Attention: Mr. Richard P. Zermani (c) If to the Indenture Trustee, to: U.S. Bank National Association Corporate Trust Services-SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: Ms. Vaneta I. Bernard (d) If to the Owner Trustee, to: Wachovia Trust Company, National Association, as Owner Trustee One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Mr. Sterling C. Correia or to such other address as any party shall have provided to the other parties in writing. Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered to the address of such party as provided above. 11. AMENDMENTS. (a) This Agreement may be amended from time to time by the parties hereto as specified in this Section, provided that any amendment be accompanied by the written consent of the Owner Trustee and Noteholders, and an Opinion of Counsel to the Indenture Trustee and the Owner Trustee to the effect that such amendment complies with the provisions of this Section. (b) If the purpose of the amendment (as detailed therein) is to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal with any matter not covered (i.e., to give effect to the intent of the parties and, if applicable, to the expectations of the Noteholders), it shall not be necessary to obtain the consent of the Noteholders, but the Indenture Trustee shall be 8 furnished with a letter from each Rating Agency that the amendment will not result in the downgrading or withdrawal of the rating then assigned to any Note. (c) If the purpose of the amendment is to prevent the imposition of any federal or state taxes at any time that any Note is outstanding (i.e. technical in nature), it shall not be necessary to obtain the consent of any Noteholder, but the Indenture Trustee, the Owner Trustee and the Administrative Agent shall be furnished with an Opinion of Counsel from counsel to the Issuer that such amendment is necessary or helpful to prevent the imposition of such taxes and is not materially adverse to the Noteholders. (d) If the purpose of the amendment is to add or eliminate or change any provision of the Agreement other than as contemplated in (b) and (c) above, the amendment shall require the consent of each Rating Agency and the Noteholders (pursuant to the Indenture); PROVIDED, HOWEVER, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received that are required to be distributed on the Notes without the consent of the Noteholders (pursuant to the Indenture). (e) It shall not be necessary for the consent of a Rating Agency to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. (f) This Section 11 shall not apply to the execution of the Back-up Agreement by the parties hereto. 12. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer, the Owner Trustee, the Noteholders and the Indenture Trustee and unless each Rating Agency, after having been given 10 days' prior notice of such assignment, shall have declared in writing that such assignment will not result in a reduction or withdrawal of the then current rating of the Notes. An assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned by the Administrator, but without the consent of the Issuer or the Owner Trustee, to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; PROVIDED that such successor organization executes and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an agreement in which such corporation or other organization agrees to be bound hereunder by the terms of the assignment in the same manner as the Administrator is bound hereunder. Subject to the foregoing, this Agreement shall bind any such permitted successors or assigns of the parties hereto. 13. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New, without giving effect to conflicts of laws provisions thereof (other than Section 5-1401 of the New York General Obligations Law). 14. HEADINGS. The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement. 9 15. COUNTERPARTS. This Agreement may be executed in counterparts, each of which when so executed shall together constitute but one and the same agreement. 16. SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 17. LIMITATION OF LIABILITY OF OWNER TRUSTEE. Notwithstanding anything contained herein to the contrary, this instrument has been executed by Wachovia Trust Company, National Association, not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer, and in no event shall Wachovia Trust Company, National Association in its individual capacity or any beneficial owner of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VIII, IX and X of the Trust Agreement. 18. THIRD PARTY BENEFICIARY. The Parties hereto acknowledge that the Noteholders are an express third party beneficiary hereof entitled to enforce its rights hereunder as if actually a party hereto. 19. NO PETITION. The parties hereto will not at any time institute against the Issuer any bankruptcy proceeding under any United States federal or state bankruptcy or similar law in connection with any obligations of the Issuer under any Transaction Document as defined in the Indenture. 10 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: Wachovia Trust Company, National Association, not in its individual capacity but solely as Owner Trustee By: /s/ Sterling C. Correia -------------------------------- Name: Sterling C. Correia Title: Vice President WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: /s/ Sterling C. Correia -------------------------------- Name: Sterling C. Correia Title: Vice President U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee By: /s/ Vaneta I. Bernard -------------------------------- Name: Vaneta I. Bernard Title: Vice President FIRST MARBLEHEAD DATA SERVICES, INC. By: /s/ Bruce F. Lefenfeld -------------------------------- Name: Bruce F. Fefenfeld Title: President ADMINISTRATION AGREEMENT EXHIBIT A POWER OF ATTORNEY STATE OF DELAWARE ) ) COUNTY OF NEW CASTLE ) KNOW ALL MEN BY THESE PRESENTS, that The National Collegiate Student Loan Trust 2004-1 (the "ISSUER"), does hereby make, constitute and appoint First Marblehead Data Services, Inc., as administrator under the Administration Agreement dated as of June 10, 2004 (the "ADMINISTRATION AGREEMENT"), among the Issuer, Wachovia Trust Company, National Association, as Owner Trustee, U.S. Bank National Association, as Indenture Trustee, and First Marblehead Data Services, Inc., as Administrator, as the same may be amended from time to time, and its agents and attorneys, as Attorney-in-Fact to execute on behalf of the Issuer all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Trust Related Agreements, including, without limitation, to appear for and represent the Issuer in connection with the preparation, filing and audit of federal, state and local tax returns pertaining to the Issuer, and with full power to perform any and all acts associated with such returns and audits that the Issuer could perform, including without limitation, the right to distribute and receive confidential information, defend and assert positions in response to audits, initiate and defend litigation, and to execute waivers of restrictions on assessments of deficiencies, consents to the extension of any statutory or regulatory time limit, and settlements. All powers of attorney for this purpose heretofore filed or executed by the Issuer are hereby revoked. Capitalized terms that are used and not otherwise defined herein shall have the meanings ascribed thereto in the Administration Agreement. EXECUTED as of this 10th day of June, 2004. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: Wachovia Trust Company, National Association, not in its individual capacity but solely as Owner Trustee By:__________________________________ Name: Title: SCHEDULE A DUTIES OF THE ISSUER PERFORMED BY THE ADMINISTRATOR UNDER THE TRUST AGREEMENT (A) Filing tax returns, reports and forms under Section 8.04. (B) Furnishing documents to the Owners under Section 9.02. (C) Filing a Certificate of Termination of the Trust upon termination pursuant to Section 11.01. (D) Appointing separate trustees under Section 12.02. (E) Obtaining execution by the Owners of any amendment to the Trust Agreement thereunder. DUTIES OF THE ADMINISTRATOR UNDER THE TRUST AGREEMENT Interpreting and applying the provisions set forth in Articles V, VI, VII and XI regarding application of funds, allocations of Profit and Loss and Distributions of Net Cash Flow, to resolve any ambiguities that may result from such application and to provide the Owner Trustee and the Owners with clarification of any provision as may be necessary or appropriate. DUTIES OF THE ADMINISTRATOR UNDER THE INDENTURE Providing the statements to Noteholders required under Section 8.09. Providing, signing and filing such reports as required by Section 314(a) of the Trust Indenture Act of 1939, as amended, the Sarbanes-Oxley Act of 2002 and any federal and state securities laws. Servicer filings under Section 10.01 and 10.02. DUTIES OF THE ADMINISTRATOR UNDER THE GRANTOR TRUST AGREEMENT Taking all actions required by the Grantor Trustee on behalf of the Depositor under the Grantor Trust Agreement. EX-10.11 12 ncf_ex10-11.txt BACK-UP NOTE ADMINISTRATION AGREEMENT EXHIBIT 10.11 June 10, 2004 U.S. Bank National Association Corporate Trust Services-SFS One Federal Street, 3rd Floor Boston, Massachusetts 02110 Wachovia Trust Company, National Association One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Re: The National Collegiate Student Loan Trust 2004-1 ------------------------------------------------- Back-up Note Administration Agreement ------------------------------------- Ladies and Gentlemen: In connection with the issuance by The National Collegiate Student Loan Trust 2004-1 (the "TRUST") of student loan asset backed notes on June 10, 2004 pursuant to the Indenture dated as of June 1, 2004 (the "INDENTURE") between the Trust and U.S. Bank National Association ("U.S. BANK"), this letter serves as the Back-up Note Administration Agreement (the "BACK-UP AGREEMENT") and amends and supplements the Administration Agreement dated as of June 10, 2004 (the "ADMINISTRATION AGREEMENT") among the Trust, Wachovia Trust Company, National Association, U.S. Bank and First Marblehead Data Services, Inc. ("FMDS") as set forth below. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Administration Agreement. In the event of the resignation or removal of FMDS as Administrator pursuant to Section 8 of the Administration Agreement, U.S. Bank shall perform only such duties as required to be performed by FMDS as Administrator under Sections 8.02(d)-(g) and 8.09 of the Indenture; provided further, that prior to the termination of FMDS as Administrator pursuant to Section 8 of the Administration Agreement, FMDS shall either (a) appoint a successor administrator to perform those duties of the Administrator under the Administration Agreement not required to be performed by U.S. Bank hereunder or (b) satisfy the Rating Agency Condition expressly permitting FMDS to continue to perform those duties. Such successor administrator shall be entitled to a fee as negotiated with FMDS at the time of such appointment. Such negotiated fee shall be payable by FMDS. U.S. Bank will be subject to all of the terms and conditions of the Administration Agreement in so far as such terms and conditions apply to U.S. Bank's duties as set forth above. In the performance or non-performance of its duties contemplated by this Back-up Agreement, U.S. Bank shall be subject to the same standard of care as the Administrator under the Administration Agreement and shall be entitled to the same rights, privileges, protections, immunities and benefits given to the Administrator under the Administration Agreement. In no event will U.S. Bank be responsible for the obligations of the Administrator or be responsible for any actions, omissions or malfeasance of the Administrator under the Administration Agreement, Indenture, or Trust Agreement except for such duties as are expressly described above. In order to facilitate the performance of U.S. Bank's duties under this Back-up Agreement, FMDS will make all files, systems and employees available to U.S. Bank. Subject to the foregoing, U.S. Bank will be required to begin performing its duties under this Back-up Agreement within 90 days of receiving notice of FMDS' resignation or removal as Administrator under the Administration Agreement. Out of pocket expenses incurred by U.S. Bank in connection with the transition of services hereunder shall be borne by the Trust. Sections 2-19 of the Administration Agreement will remain in full force and effect. As consideration for U.S. Bank entering into this Back-up Agreement, (i) U.S. Bank will (and the Trust hereby irrevocably directs U.S. Bank to) invest all cash in the Trust Accounts (as such term is defined in the Indenture) in First American Funds as long as First American Funds' annual investment return (net of management fees) is not more than 0.25% lower than the investment return (net of management fees) for funds of comparable size and investment risk during the most recent prior twelve month period, as determined by the Administrator; provided that the Administrator will provide instructions to U.S. Bank as to the manner in which the cash in the Trust Accounts should be invested if such investment threshold is not met; and (ii) upon the resignation or removal of the Administrator, and notwithstanding the appointment of a successor administrator, U.S. Bank shall be paid the Administration Fee pursuant to Section 3(a) of the Administration Agreement. The provisions of Section 17 of the Administration Agreement are incorporated herein by reference and shall apply to this Back-up Agreement as they apply to the Administration Agreement. [Signature Pages Follow] Please evidence your agreement with the terms set forth herein by signing this letter below. Sincerely, THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: /s/ Sterling C. Correia ----------------------- Name: Sterling C. Correia Title: Vice President FIRST MARBLEHEAD DATA SERVICES, INC. By: /s/ Bruce F. Lefenfeld ---------------------- Name: Bruce F. Lefenfeld Title: President ACCEPTED AND AGREED: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: /s/ Sterling C. Correia ----------------------- Name: Sterling C. Correia Title: Vice President U.S. BANK NATIONAL ASSOCIATION By: /s/ Vaneta I. Bernard --------------------- Name: Veneta I. Bernard Title: Vice President BACK-UP NOTE ADMINISTRATION AGREEMENT EX-10.12 13 ncf_ex10-12.txt STRUCTURING ADVISORY AGREEMENT EXHIBIT 10.12 STRUCTURING ADVISORY AGREEMENT STRUCTURING ADVISORY AGREEMENT (the "AGREEMENT"), dated as of June 10, 2004, between The National Collegiate Student Loan Trust 2004-1, a Delaware statutory trust (the "TRUST"), and The First Marblehead Corporation (the "ADVISOR"). 1. APPOINTMENT. The Trust hereby appoints the Advisor and the Advisor hereby agrees to act, as structuring advisor to the Trust in connection with the Trust's issuance of its Student Loan Asset Backed Notes (the "NOTES") pursuant to that certain Indenture (the "INDENTURE"), dated as of June 1, 2004, between the Trust and U.S. Bank National Association, as Indenture Trustee, under the terms and conditions set forth herein. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture and the Trust Agreement dated as of June 10, 2004 by and among The National Collegiate Funding LLC, Wachovia Trust Company, National Association and The Education Resources Institute, Inc. 2. DUTIES OF ADVISOR. 2.1 CONSULTING SERVICES. The Advisor shall provide the Trust with the following services: (i) Advise the Trust with respect to the structuring of the Notes and the related transactions; (ii) Engage, coordinate and evaluate the efforts of the service providers to the Trust, including without limitation, program lenders, consumer and securitization lawyers, accountants and auditors, trustees and providers of loan servicing, collection and origination services; (iii) Monitor the transmission of loan data between borrower, participating school, loan originator and program lender; and (iv) Work with potential financing sources, rating agencies and financial guaranty insurers, utilizing proprietary cash flow modeling, so as to optimize the economics of securitization. 2.2 LIMITATIONS ON THE ADVISOR'S POWERS. Notwithstanding anything herein to the contrary, the Advisor's responsibilities are consultative only, and the Advisor shall have no power to take any action on behalf of the Trust, or to cause the Trust to be responsible for taking any action. 3. COMPENSATION OF ADVISOR. As compensation for the performance of the Advisor's obligations under this Agreement and as reimbursement for its expenses related thereto, the Advisor shall be entitled to a Structuring Advisory Fee payable pursuant to the priorities set forth in the Indenture and the Trust Agreement as follows: 3.1 $41,546,166 payable on the Closing Date from the Cost of Issuance Account; 3.2 During the Funding Period, an amount payable on each Subsequent Transfer Date equal to 4.5% of the aggregate outstanding principal balance of the Subsequent Student Loans as of the respective Subsequent Cutoff Date that are purchased by the Trust from the Depositor. 3.3 An amount payable on each Quarterly Distribution Date at a rate equal to 1/4 of 0.15% of the aggregate outstanding principal balance of the Financed Student Loans owned by the Trust as of the related Determination Date for the prior Quarterly Distribution Date (and in the case of the payment of such amount on the first Quarterly Distribution Amount as of the Cutoff Date) pursuant to the priorities set forth in the Indenture and the Trust Agreement. To the extent that any payment is not made when due, all accrued and unpaid amounts shall bear interest at a rate equal to Three-Month LIBOR plus 1.50%, which will be reset in the same manner as the Applicable Index for the Class A Notes under the Indenture. 4. LIABILITY. The Advisor is not and never shall be liable to any creditor of the Trust. In addition, the Advisor will not be culpable for and will have no liability to the Trust for or with respect to any and all losses, claims, damages or liabilities, joint or several, of the Trust incurred in connection with the Advisor's performance of the services described in this Agreement, except to the extent that any such loss, claim, damage or liability is found in a final judgment by a court of competent jurisdiction to have resulted from the Advisor's gross negligence, bad faith or willful misconduct, or a material breach of this Agreement. The exculpation of the Trust under this paragraph shall be in addition to any liability which the Trust may otherwise have, shall survive any termination of this Agreement, and shall be binding upon and extend to the benefit of any successors, assigns and representatives of the Trust and the Advisor. 5. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties' successors and permitted assigns. However, neither this Agreement nor any of the rights of the parties hereunder may be transferred or assigned by either party hereto, except that (i) the Trust may assign its rights hereunder to the Indenture Trustee and (ii) the Advisor may assign its rights and obligations hereunder to any affiliated person or entity. Any attempted transfer or assignment in violation of this Section 5 shall be void. 6. RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement is intended or is to be construed to constitute the Advisor and the Trust as partners or joint venturers or either party as an employee of the other party. Neither party hereto shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other party or to bind the other party to any contract, agreement or undertaking with any third party. The services to be performed by the Advisor hereunder are consultation services only. The Trust shall at all times be free to accept or reject the advice rendered by the Advisor hereunder in its sole discretion. 2 7. LIMITATION OF LIABILITY OF OWNER TRUSTEE. Notwithstanding anything contained herein to the contrary, this instrument has been executed by Wachovia Trust Company, National Association, not in its individual capacity but solely in its capacity as Owner Trustee of the Trust, and in no event shall Wachovia Trust Company, National Association in its individual capacity or any beneficial owner of the Trust have any liability for the representations, warranties, covenants, agreements or other obligations of the Trust hereunder, as to all of which recourse shall be had solely to the assets of the Trust. For all purposes of this Agreement, in the performance of any duties or obligations of the Trust hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VIII, IX and X of the Trust Agreement. 8. MISCELLANEOUS. 8.1 AMENDMENT AND WAIVERS. This Agreement may be amended or waived only by a writing signed by both parties, and then such consent shall be effective only in the specific instance and for the specific purpose for which given. 8.2 NOTICES. All notices and other communications provided for herein shall be dated and in writing and shall be deemed to have been duly given when delivered, if delivered personally or sent by telecopy, or when mailed, if sent by registered or certified mail, return receipt requested, postage prepaid. (i) to the Trust at: c/o Wachovia Trust Company, National Association One Rodney Square, 1st Floor 920 King Street Wilmington, Delaware 19801 Attention: Sterling Correia (ii) to the Advisor at: The First Marblehead Corporation 230 Park Avenue New York, New York 10169 Attention: Mr. Rob Baron with a copy to: The First Marblehead Corporation The Prudential Tower 800 Boylston Street - 34th Floor Boston, MA 02199-8157 Attention: Mr. Richard P. Zermani or at such other address as any party shall have specified by notice in writing to the others. 3 8.3 EFFECTIVENESS OF AGREEMENT; ENTIRE AGREEMENT. The terms of this Agreement shall become effective upon the issuance of the Notes. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. 8.4 SECTION HEADINGS. The section headings contained herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 8.5 COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 8.6 APPLICABLE LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed entirely within such State, without giving effect to conflicts of laws principles thereof (other than Section 5-1401 of the New York General Obligations Law). 8.7 SEVERABILITY. Any section, clause, sentence, provision, subparagraph or paragraph of this Agreement held by a court of competent jurisdiction to be invalid, illegal or ineffective shall not impair, invalidate or nullify the remainder of this Agreement, but the effect thereof shall be confined to the section, clause, sentence, provision, subparagraph or paragraph so held to be invalid, illegal or ineffective. 8.8 NO PETITION. The parties hereto will not at any time institute against the Trust any bankruptcy proceeding under any United States federal or State bankruptcy or similar law in connection with any obligations of the Trust under any Transaction Document as defined in the Indenture. [Signature Pages Follow] 4 IN WITNESS WHEREOF, the parties hereto have executed this Structuring Advisory Agreement as of the date first above written. THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee By: /S/ STERLING C. CORREIA ----------------------- Name: Sterling C. Correia Title: Vice President THE FIRST MARBLEHEAD CORPORATION By: /S/ JOHN A. HUPALO ------------------ Name: John A. Hupalo Title: Executive Vice President SRUCTURING ADVISORY AGREEMENT EX-10.13 14 ncf_ex10-13.txt DEPOSIT AND SECURITY AGREEMENT EXHIBIT 10.13 DEPOSIT AND SECURITY AGREEMENT THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 This Deposit and Security Agreement (the "AGREEMENT") is made and entered into as of June 10, 2004, by and among THE EDUCATION RESOURCES INSTITUTE, INC., a private non-profit corporation organized under Chapter 180 of the Massachusetts General Laws with its principal place of business at 31 St. James Avenue, Boston, Massachusetts 02116 ("TERI"), FIRST MARBLEHEAD DATA SERVICES, INC., a corporation organized under the General Corporation Law of the State of Massachusetts with its principal place of business at 230 Park Avenue, New York, New York 10169 (the "ADMINISTRATOR"), and THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1, in its capacity as owner (in such capacity, the "OWNER"). WHEREAS, the Owner is willing to purchase education loans to borrowers under the education loan programs listed on SCHEDULE A attached hereto and others in accordance with the Indenture (collectively, the "STUDENT LOAN PROGRAMS") upon certain terms and conditions, including but not limited to the guaranty of the payment of principal and interest by TERI pursuant to the terms of the Guaranty Agreements (as hereafter defined) and the deposit of certain monies with U.S. Bank National Association (the "TRUSTEE"), on behalf of the Owner, as security for such payment as more fully described herein and in accordance with the terms and conditions set forth in this Agreement, and the agreements (the "ACCOUNT SECURITY AGREEMENTS") listed on SCHEDULE B attached hereto and others in accordance with the Indenture; WHEREAS, under the terms of the Guaranty Agreements listed on SCHEDULE B attached hereto and others in accordance with the Indenture between TERI and each of the parties (the "LOAN ORIGINATORS") listed on SCHEDULE B attached hereto and others in accordance with the Indenture, TERI guaranties the payment of principal and interest on the Loans in exchange for the payment of certain Guaranty Fees (as hereinafter defined); WHEREAS, pursuant to the Student Loan Purchase Agreements listed on SCHEDULE B attached hereto and others in accordance with the Indenture, between the Loan Originators and the Owner's predecessor in interest, The First Marblehead Corporation (the "STUDENT LOAN PURCHASE AGREEMENTS"), the Owner has agreed to acquire certain Loans; WHEREAS, the Administrator is authorized to act for the Owner in all matters relating to this Agreement; and WHEREAS, it is the intention of the Owner and TERI that this Agreement shall apply to each Loan that is (i) subject to the Guaranty Agreements and (ii) purchased by the Owner with funds held under the Indenture (as hereafter defined). NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties agree as follows: 1. DEFINITIONS. Capitalized terms not otherwise defined in this Section, in the recitals hereto or elsewhere in this Agreement shall have the meanings ascribed to such terms in the Guaranty Agreements, listed in SCHEDULE B attached to this Agreement. In addition: (a) "CLOSING DATE" shall mean each of the dates on which the Owner consummates a transaction to purchase the Loans pursuant to the Student Loan Purchase Agreements. (b) "COLLATERAL" shall have the meaning set forth in Section 5. (c) "ELIGIBLE INVESTMENTS" means the following categories of securities: (i) For all purposes: (A) Cash (insured at all times by the Federal Deposit Insurance Corporation); (B) Obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S. government including: o U.S. treasury obligations o All direct or fully guaranteed obligations o Farmers Home Administration o General Services Administration o Guaranteed Title XI financing o Government National Mortgage Association (GNMA) o State and Local Government Series (C) Obligations of government-sponsored agencies that are not backed by the full faith and credit of the U.S. government including: o Federal Home Loan Mortgage Corp. (FHLMC) Debt obligations o Farm Credit System (formerly: Federal Land Banks, Federal Intermediate Credit Banks, and Banks for Cooperatives) o Federal Home Loan Banks (FHL Banks) o Federal National Mortgage Association (FNMA) debt obligations o Financing Corp. (FICO) debt obligations o Resolution Funding Corp. (REFCORP) debt obligations o U.S. Agency for International Development (U.S. A.I.D) guaranteed notes U.S.A.I.D. securities must mature at least four business days before the appropriate payment date. (ii) Investments in refunding escrow accounts: 2 (A) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: o Export-Import Bank o Rural Economic Community Development Administration o U.S. Maritime Administration o Small Business Administration o U.S. Department of Housing & Urban Development (PHAs) o Federal Housing Administration o Federal Financing Bank (B) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the U.S.: o Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC) o Obligations of the Resolution Funding Corporation (REFCORP) o Senior debt obligations of the Federal Home Loan Bank System o Senior debt obligations of other government sponsored agencies (C) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of: (1) "A-1+" by S&P and (2) either "P-1" by Moody's or "F1" by Fitch; and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (D) Commercial paper that meets the ratings of the following listed rating agencies at the time of purchase: (1) "A-1+" by S&P and (2) either "P-1" by Moody's or "F1" by Fitch; which matures not more than 270 calendar days after the date of purchase; (E) Investments in a money market fund rated "AAAm" or "AAA-m" by S&P and "Aaa" by Moody's; (F) Pre-refunded "municipal obligations" which are defined as follows: any bonds or other obligations of any state of the U.S. or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (1) Which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of (a) S&P and (b) either Moody's or Fitch or any successors thereto; or 3 (2) (a) Which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (i)(B) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (b) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (G) Any other investment that is generally approved by Moody's, S&P and Fitch for the investment of funds held as collateral for securities rated in the highest investment rating category and that is not: (1) A financial asset that involves the Owner, the Administrator or the beneficial owners of the Owner in making decisions other than the decisions inherent in servicing the financial assets including without limitation any financial asset that includes an option to be exercised by the Owner, the Administrator or the beneficial owners of the Owner; or (2) A derivative financial instrument that involves the Owner, the Administrator or the beneficial owners of the Owner in making decisions including without limitation any derivative financial instrument that includes an option allowing the Owner, the Administrator or the beneficial owners of the Owner to choose to call or put other financial instruments; provided that a derivative financial instrument shall be an Eligible Investment only if it is acquired from proceeds of the issuance of Notes by the Owner at the time of such issuance. (iii) The value of the above investments shall be determined as follows: (A) For the purpose of determining the amount in any fund, all Investment Securities credited to such fund shall be valued at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. Accepted industry providers shall include but are not limited to pricing services provided by Financial Times Interactive Data Corporation, Merrill Lynch & Co., Citigroup Global Markets Inc., Bear Stearns & Co. Inc., Deutsche Bank AG, New York Branch, or Lehman Brothers; (B) As to certificates of deposit and bankers' acceptances: the face amount thereof, plus accrued interest thereon; and (C) As to any investment not specified above: the value thereof established by prior agreement between the Owner and the Trustee. (d) "EXISTING PLEDGED ACCOUNT" means the Pledged Account, if any, created pursuant to the Account Security Agreements and named therein the "Pledged Account." 4 (e) "GUARANTY AGREEMENTS" shall mean each of the Guaranty Agreements between each of the Loan Originators and TERI, and any amendments or modifications thereto, as set forth on SCHEDULE B attached hereto and others in accordance with the Indenture. (f) "GUARANTY CLAIMS" shall mean a claim made by or on behalf of the Owner for payment by TERI following a Guaranty Event. (g) "GUARANTY FEES" shall mean, collectively, all of the fees payable to TERI for the guarantee of a Loan as described in each of the Guaranty Agreements. (h) "INDENTURE" means the Indenture dated as of June 1, 2004, by and between the Owner and the Trustee, as may be amended or supplemented from time to time. (i) "INTANGIBLES" shall have the meaning set forth in Section 5(a)(ii). (j) "QUARTERLY DISTRIBUTION DATE" shall have the meaning set forth in the Indenture. (k) "RECOVERIES" shall mean and include: (i) any and all cash, checks, drafts, orders and all other instruments for the payment of money received by TERI from or on behalf of Borrowers in payment of principal of, interest on, late fees with respect to, and costs of collecting defaulted Loans with respect to which TERI has paid, in full, Guaranty Claims, from funds in the Pledged Account, and the proceeds of all of the foregoing, (ii) any amount received by TERI upon the sale or other transfer of defaulted Loans with respect to which TERI has paid, in full, Guaranty Claims (including the sale of such Loans to the Owner as provided in each of the Guaranty Agreements or the sale of the right to collect such Loans or other similar rights with respect thereto), and (iii) in connection with any pledge or assignment of defaulted Loans (or rights with respect thereto) to secure a loan to TERI, the amount of such loan. In all cases, "Recoveries" shall be computed net of TERI's Costs of Collection. TERI's "COSTS OF COLLECTION" for purposes of this Agreement shall mean all fees and expenses paid to third party collectors and attorneys, and, to cover TERI's internal costs, an amount equal to two and one-half percent (2.5%) of the amount recovered (excluding amounts recovered upon the sale of loans to the Owner as provided in each of the Guaranty Agreements). (l) "SECURED OBLIGATIONS" shall have the meaning set forth in Section 6. (m) "TERI GUARANTEE FEE ENTITLEMENT" means a portion of Guaranty Fees equal to one and one-half percent (1.5%) of the principal amount of a Loan, payable in accordance with each of the Guaranty Agreements. 2. CREATION AND FUNDING OF THE PLEDGED ACCOUNT. Upon the execution of this Agreement, the Owner shall establish with the Trustee pursuant to the Indenture an account (the "PLEDGED ACCOUNT") for the purpose of depositing upon receipt portions of the Guaranty Fees, Recoveries and earnings as provided in this Section 2. The Pledged Account shall be funded (a) by transfer of all amounts held on each Closing Date in the Existing Pledged 5 Account that relate to the Loans being purchased on such Closing Date, determined as set forth in each of the Account Security Agreements, (b) by TERI with all Guaranty Fees payable on each Closing Date with respect to the Loans being purchased, and (c) by TERI with all Recoveries with respect to Loans on which TERI has paid Guaranty Claims, and earnings on the Pledged Account, all of which shall be pledged by TERI to the Owner under the terms of this Agreement. TERI hereby irrevocably directs the Owner to deposit the following amounts into the Pledged Account: (a) Any and all Guaranty Fees previously paid by the Loan Originators and currently held by the Trustee in the Existing Pledged Account created under each of the Account Security Agreements with respect to Loans purchased on any Closing Date as set forth in each of the Account Security Agreements; (b) Any and all additional Guaranty Fees with respect to such Loans purchased by the Owner, which fees will be deposited into the Pledged Account on each Closing Date; and (c) All Recoveries, which Recoveries shall be remitted by or on behalf of TERI to the Trustee on the 15th day of each month, for Recoveries received during the preceding month. Any amounts remitted to the Trustee for deposit into the Pledged Account shall be accompanied by a notice in the form of EXHIBIT 2. 3. PLEDGED ACCOUNT INVESTMENT AND MAINTENANCE. (a) The Owner shall withdraw from the Pledged Account and deposit into the Reserve Fund of the Indenture any amounts owed by TERI under each of the Guaranty Agreements for Guaranty Claims as provided in Section 3(d)(i) hereof. The Owner understands and agrees that TERI shall be required to pay any such claim amounts out of TERI's general reserves and other assets only to the extent that and for so long as the Pledged Account is without sufficient funds or is otherwise unavailable to promptly pay whatever amounts are then due and payable under each of the Guaranty Agreements. Notwithstanding the foregoing, while there is a default by TERI under Section 8 hereof continuing, the provisions of Section 9 hereof shall apply. (b) Prior to the occurrence of a default by TERI under Section 8 hereof, TERI may direct the Owner to invest amounts held in the Pledged Account in one or more Eligible Investments. If a default under Section 8 occurs and is continuing, the Administrator shall have the sole right to direct investment of the Pledged Account, but such investments shall be limited to Eligible Investments. (c) No interest, dividends, distributions or other earnings of whatever nature which are paid and derived from the Pledged Account (collectively, "EARNINGS") shall be withdrawn or paid to the Owner or TERI or any other person or entity unless pursuant to the provisions of Section 3(d). All Earnings shall be fully, immediately and completely reinvested in the Pledged Account. Any other provisions of this Agreement to the contrary (either expressly or by implication) notwithstanding, all Earnings net of losses shall be 6 credited to and deemed income of TERI and not of the Owner, and shall be so treated by TERI. (d) Withdrawals and disbursements from the Pledged Account shall be made only in accordance with the following provisions: (i) Upon receipt by the Owner of a Payment of Guaranty Claims Direction Letter, substantially in the form of EXHIBIT 1 (and, after the occurrence of a default under Section 8, whether or not such a Direction Letter is received), the Owner shall withdraw from the Pledged Account and deposit in the Revenue Fund of the Indenture the full amount of any valid Guaranty Claims made in accordance with each of the Guaranty Agreements for defaulted Loans. (ii) In the event TERI's income on the Pledged Account should become subject to federal income taxation or the income from the Pledged Account should become subject to excise tax under section 4940 of the Internal Revenue Code of 1986, as amended, TERI shall be entitled to the release of Earnings from the Pledged Account equal to the taxes actually paid by TERI with respect to the income on the Pledged Account. TERI shall provide the Administrator and the Trustee with a written request substantially in form of EXHIBIT 5 attached hereto, for any such withdrawal, which request shall be accompanied by documentation as to the amounts to be withdrawn ("WITHDRAWAL REQUEST"). Not later than 15 days following receipt by the Administrator of a Withdrawal Request, the Administrator may either (A) notify TERI of any objection to such Withdrawal Request along with reasons for such objection or (B) request any further information or documentation relating to such request. If the Administrator does not object or request further information from TERI within such 15 day period, the Administrator shall be deemed to have consented to the Withdrawal Request, and the Administrator shall thereafter promptly cause the Trustee to withdraw the requested funds from the Pledged Account. If the Administrator objects to any Withdrawal Request, the Administrator shall deny the request and provide TERI with a written statement of the Administrator's reasons for denial, which denial must be reasonably based on the requirements set forth in this Section 3(d). 4. EXCESS FUNDS IN THE PLEDGED ACCOUNT. If on any Quarterly Distribution Date under the Indenture, the product of (a) the aggregate outstanding principal balance of and earned interest on Loans held by or pledged to the Trustee, multiplied by (b) a factor equal to sixteen hundredths (.16) (the "STRESS FACTOR") is less than the balance in the Pledged Account, and, if no default exists hereunder or under each of the Guaranty Agreements, the Administrator shall cause the Trustee to pay to TERI the amount by which the balance in the Pledged Account exceeds such product. The parties agree that the approval of the Stress Factor by the rating agencies is dependent upon the types of Loans purchased by the Owner at each closing under the Indenture. 5. SECURITY INTEREST. TERI hereby pledges, assigns and sets over to the Owner, as security for payment by TERI of the Secured Obligations (as hereinafter defined), all of TERI's right, title and interest in and to (a) the Pledged Account and all amounts on deposit or to be deposited therein as described in Section 2 of this Agreement, including without 7 limitation (i) any and all Guaranty Fees previously paid by Loan Originators and currently held by the Trustee in the Existing Pledged Account created under each of the Account Security Agreements with respect to Loans purchased on any Closing Date as set forth in each of the Security Agreements; (ii) any and all additional Guaranty Fees with respect to such Loans purchased by the Owner, which fees will be deposited into the Pledged Account on each Closing Date; and (iii) all Recoveries, which Recoveries shall be remitted by or on behalf of TERI to the Trustee on the 15th day of each month, for Recoveries received during the preceding month, and (b) TERI's right to receive all Earnings. The foregoing shall not be deemed to include a grant of security interest in defaulted Loans. In furtherance thereof, TERI hereby grants to the Owner (and its assigns) a first priority security interest in all of TERI's right, title and interest in and to the following, to the extent they relate to Loans purchased by the Owner: (a) All personal property comprising and/or contained in the Pledged Account, as provided in this Agreement, both tangible and intangible, whether now owned or hereafter acquired by TERI and wheresoever located, including without limitation: (i) All contract rights, claims, instruments, notes and accounts, whether now existing or hereafter arising, including, without limitation, all of the same evidencing or representing indebtedness due or to become due to TERI (all hereinafter called the "ACCOUNTS"); (ii) All funds and investments thereof, whether in the form of certificates of deposit, repurchase agreements, U.S. Treasury Bills, U.S. Treasury Notes, investment grade commercial paper, U.S. Treasury Bonds, Federal agency notes or other investments, securities (whether certificated or uncertificated and specifically including any securities which are purchased through and for which records are maintained on a book entry system through any financial intermediary (as defined in ss. 8-313 of the Uniform Commercial Code)), payment intangibles and general intangibles, whether now existing or hereafter arising and wheresoever located, or otherwise (all hereinafter called the "INTANGIBLES"); (iii) All right, title and interest of TERI in or to all instruments and documents covering or relating to the above described property, including but not limited to, all books, records, computer printouts, tapes, disks, ledger sheets, files and other data (all such instruments and documents being called the "RELATED DOCUMENTS"); (iv) All interest, dividends and/or other earnings of any kind which are paid with respect to or derived from the Pledged Account, and all proceeds of any of the foregoing, and the present and continuing right to make claim for, collect, receive and receipt for, any and all such interest, dividends and/or other earnings; and (v) All the proceeds of all of the foregoing; (b) All contract and other rights of TERI to receive payment of Guaranty Fees, other than the TERI Guarantee Fee Entitlement, from the Owner under each of the Guaranty Agreements; TERI's rights to receive subsequent Guarantee Fees from the Owner pursuant to 8 such section, and any separate undertaking or agreement by the Owner to pay such subsequent Guarantee Fees; (c) All Recoveries and all rights of TERI to receive or collect Recoveries; and (d) All proceeds of the foregoing. All of the foregoing property in which the Owner has been granted a security interest is herein collectively referred to as "COLLATERAL." It is expressly understood and agreed that this security interest and assignment shall automatically attach to any and all future deposits to, earnings from, and proceeds of the Pledged Account immediately upon deposit or accrual, and all Guaranty Fees and Recoveries immediately upon the receipt thereof, without the making or doing of any further act or thing whatsoever. TERI shall promptly take all further action, and execute and deliver to the Owner such other documents, as may be requested from time to time by the Owner to create, evidence, maintain and effect the Owner's security interest in the Pledged Account and the other rights pledged hereunder. 6. SECURED OBLIGATIONS. The security interest of the Owner under this Agreement secures (a) the payment and performance of all indebtedness, obligations and liabilities of TERI arising at any time, now or in the future, to the Owner (or its assignees), pursuant to each of the Guaranty Agreements; (b) performance by TERI of the agreements set forth in this Agreement; (c) all payments made or expenses incurred by the Owner (or its assignees), including, without limitation, reasonable attorney's fees and legal expenses, in the exercise, preservation or enforcement of any of the rights, powers or remedies of the Owner (or its assignees), or in the enforcement of the obligations of TERI, under this Agreement or each of the Guaranty Agreements (whether or not paid or incurred in the context of a state or federal bankruptcy, insolvency, or reorganization proceeding); and (d) any renewals, continuations or extensions of any of the foregoing (all of which are collectively referred to as the "SECURED OBLIGATIONS"). 7. RESTRICTIONS ON THE PLEDGED ACCOUNT. TERI shall not (except as provided in Sections 3(d)(ii) and (4)) be paid by the Owner, at the direction of the Administrator, any funds from or further assign, pledge, or hypothecate the Pledged Account or any portion of the Pledged Account to any individual, person, entity or other third party without the express prior written consent of the Administrator. Payments to TERI will be by wire transfer unless TERI requests, in writing, another reasonable form of payment. 8. DEFAULT. TERI shall be in default of this Agreement if TERI fails to remit to the Owner from the Pledged Account or otherwise, in accordance with the terms and provisions of the Guaranty Agreements, the principal balance (including capitalized fees and interest) and accrued interest and late fees on any Loan as to which a Guaranty Event (as defined in each of the Guaranty Agreements) has occurred and as to which the conditions set forth in each of the Guaranty Agreements to payment of a Guaranty Claim have been satisfied, and if such failure continues for a period of thirty (30) days. Either TERI or the Owner shall be in default of this Agreement if (a) any representation, warranty, or statement made by such party in or pursuant to this Agreement or each of the Guaranty Agreements is found to be false or erroneous in any material respect, or (b) such party shall fail or omit to 9 perform or observe any material covenant or agreement made by it in this Agreement or each of the Guaranty Agreements, and if such circumstance, failure or omission (if susceptible of cure) remains uncured for thirty (30) days. Upon the occurrence of an event of default by TERI, and while such default is continuing, the Owner shall cease disbursing any funds at the request of TERI except to pay Guaranty Claims. 9. REMEDIES UPON DEFAULT. The Owner shall have all of the rights and remedies of a secured party under the Massachusetts Uniform Commercial Code (as the same may be amended from time to time), as well as all rights and remedies provided by any other applicable law, at law, or in equity. Without limiting the generality of the foregoing, the Administrator shall also have the right, during the term of this Agreement, to do any or all of the following upon a default and until any such default is cured: (a) ACCELERATION. Without any notice or demand, the Administrator may declare any or all Secured Obligations then in default to be immediately due and payable. (b) POSSESSION. Without notice, demand, or hearing, any right to which is hereby waived by TERI, the Administrator shall have full power and authority to hold, sequester, set-off or withdraw any and all funds from the Pledged Account and to (i) direct such funds for application to any Loan as to which a Guarantee Event has occurred and TERI has failed to remit the principal balance (including capitalized fees and interest) and accrued interest and late fees thereon in accordance with the terms and conditions of each of the Guaranty Agreements or (ii) hold the funds in the Pledged Account without making any disbursements of any kind to TERI as otherwise provided in this Agreement, and to apply the funds to any Loan if and when a Guarantee Event occurs and TERI fails to promptly remit to the Owner the unpaid principal balance (including capitalized fees and interest) and accrued interest and late fees thereon in accordance with the conditions of each of the Guaranty Agreements. (c) COLLECTION OF ACCOUNTS. (i) TERI hereby constitutes and appoints the Administrator (and upon assignment hereof, the Trustee) its true and lawful attorney (which appointment is coupled with an interest), with full power of substitution, either in the Administrator's own name or in the name of TERI, to ask for, demand, sue for, collect, receive, receipt and give acquittance for, any and all moneys due or to become due to TERI that are part of the Collateral; to endorse checks, drafts, orders and other instruments for the payment of money payable to TERI on account thereof, to settle, compromise, prosecute, or defend any action, claim, or proceeding with respect thereto; and to sell, assign, pledge, transfer and make any agreement respecting, or otherwise deal with, the same. (ii) TERI agrees that all Recoveries shall be held by the Owner to whatever extent may be necessary to facilitate full and complete payment of all amounts owed under each of the Guaranty Agreements. All such Recoveries received by TERI shall be remitted to the Trustee (properly endorsed for collection where required), not later than the next Business Day, and accompanied by EXHIBIT 2 and deposited in the Pledged Account, for the payment of all of the Secured Obligations then in default. TERI agrees not to 10 commingle any such collections or proceeds with any of its other funds or property and agrees to hold the same upon an express trust for the Owner until deposited in the Pledged Account, as aforesaid. 11 (iii) The Administrator agrees to provide notice to TERI of the Administrator's or Owner's exercise of any of its rights under this Section 9(c). (d) TRANSFER OF INTANGIBLES. The Administrator shall have the right to take possession of any agreement or other document evidencing any of the Intangibles, and may apply for or seek, on behalf of and as attorney-in-fact for TERI, any necessary consent to the assignment, transfer, conveyance, sale, renewal, reissuance or other disposition of the same, and TERI shall cooperate fully with the Administrator in doing so and shall take all actions reasonably requested by the Administrator in furtherance thereof. TERI hereby constitutes and appoints the Administrator its true and lawful attorney (which appointment is coupled with an interest) with full power of substitution, either in the Administrator's own name or in the name of TERI, to assign, transfer and convey, subject to all requirements of law, any and all of TERI's rights in and to any of the Intangibles. (e) DISPOSITION. The Administrator may assign, transfer, convey, any or all of the Collateral, by public or private sale subject to TERI's rights to retain a copy of each Related Document now or in the future in TERI's possession. The Administrator shall provide TERI with reasonable written notice of the time and place of any such sale. (f) PROCEEDS. All proceeds from the sale or other disposition of Collateral by the Administrator under this Section 9 of this Agreement, and all other moneys received by the Administrator pursuant to the terms of this Agreement shall be applied as follows: (i) First, to the payment of all expenses incurred by the Administrator in connection with this Agreement or the exercise of any right or remedy hereunder, or any sale or disposition, including, but not limited to the expenses of taking, advertising, processing, preparing and storing the Collateral to be sold, all court costs and the Administrator's reasonable legal fees in connection therewith; (ii) Second, to the payment of valid Guaranty Claims in accordance with the terms thereof in the order in which a complete claim (including all required documentation) is received, treating all claims received the same day as received at the same time (if there are not sufficient funds in the Pledged Account to pay all claims payable therefrom received on a given day, all such claims shall be paid in part, pro rata, from the Pledged Account as directed by the Administrator); and (iii) Third, any remainder to be held pursuant to the terms of this Agreement as continuing security for TERI's payment of the remaining Secured Obligations. The Administrator shall apply any such proceeds, monies, or balances in accordance with this Agreement promptly upon its receipt of the same. In respect of any application pursuant to clause (ii) above, such proceeds, monies, or balances shall be applied by the Administrator to discharge in whole or in part any unpaid Secured Obligation, notwithstanding any manifestation of an intent to the contrary expressed in writing or otherwise by TERI at any time. Upon any sale of Collateral by the Administrator (whether pursuant to a power of sale granted by a statute or under a judicial proceeding), the receipt of the 12 Administrator or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Administrator or such officer, or be answerable in any way for the misapplication thereof. Notwithstanding the sale or other disposition of any Collateral by the Administrator hereunder, TERI shall remain liable for any deficiency. Any Loan with respect to which the Owner receives payment in full hereunder will forthwith be transferred to TERI on the terms and conditions set forth in the Guaranty Agreements. 10. REMEDIES CUMULATIVE. All rights, remedies, or powers conferred upon the Owner herein or by law shall be cumulative and concurrent at the option of the Administrator, and the Administrator may, to whatever extent is reasonably necessary to cure any default, foreclose or exercise the power of sale or any other remedy available to it successively upon any default or upon successive defaults hereunder without the necessity of declaring all sums secured hereby to be due and payable. Upon any such occasion, the Administrator shall be authorized to sell or dispose of all or any such part of the Collateral as provided in this Agreement or pursuant to the Indenture and as permitted by law. The remaining Collateral shall continue as security for any other sums remaining due after such sale, lease, or disposition or thereafter to become due or payable on any of the Secured Obligations. 11. PLEDGE BY THE OWNER; ROLE OF THE ADMINISTRATOR. (a) TERI acknowledges that the Owner has pledged all of its right, title and interest under this Agreement and its interest in the Pledged Account as collateral security to the Trustee pursuant to the Indenture. Pursuant to such pledge, all rights of the Owner hereunder, subject to the limitations and obligations of this Agreement, may be exercised by the Trustee, pursuant to the terms of the Indenture. Subject to the terms and limitations of this Agreement, the Administrator, on the Owner's behalf, in accordance with the Indenture, shall request that the Trustee exercise the Owner's rights and obligations hereunder, including, without limitation: (i) The withdrawal of funds from the Pledged Account to pay the Trustee, as assignee of the Loans, with respect to a Guaranty Claim pursuant to Section 3(d)(i) hereof; (ii) The withdrawal of funds pursuant to Section 3(d)(ii) hereof; (iii) The investment of funds in the Pledged Account in Eligible Investments as directed by TERI from time to time; and (iv) The exercise of the remedies of the Owner on default by TERI under Section 9. (b) The Owner hereby directs TERI to pay all sums intended to be placed in the Pledged Account, including, without limitation, all future Recoveries, directly to the Trustee. The Pledged Account shall be maintained and funds held therein shall be invested by the 13 Trustee in Eligible Investments pursuant to and in accordance with the Indenture. Funds held in the Pledged Account in the form of bank deposits shall be deposited only with institutions that are federally insured. (c) The Trustee and the holders of the notes authenticated and delivered pursuant to the Indenture, are intended third-party beneficiaries of this Agreement, with rights to enforce the Owner's interests in the same. Such third-party beneficiaries are not parties hereto and incur no liabilities hereunder. (d) The Administrator has been appointed to act for the Owner in connection with the transactions contemplated by the Indenture. The Administrator has the power and authority to take any action and give any notice required or permitted by the Owner hereunder and TERI may deal with Administrator as if it were dealing with the Owner. Any notice required to be given to the Owner by TERI shall also be given to Administrator. The Administrator will request instructions from the Indenture Trustee on behalf of the Noteholders (pursuant to the Indenture) for any non-ministerial action that the Administrator is required to take under this Agreement. 12. POSSESSION OF COLLATERAL. Throughout the term of this Agreement, possession of the Collateral shall be maintained by the Trustee, or its agent or nominee (if the Trustee so chooses from time to time), as necessary and appropriate to perfect the Owner's, and, while the Indenture is in effect, the Trustee's security interest therein as provided in, and subject to the terms of, this Agreement. Upon termination of the Indenture and satisfaction in full of all debt secured thereby and release of the Pledged Account to the Owner, the Administrator may designate an alternative collateral agent to hold the Pledged Account. 13. TERMINATION OF SECURITY INTERESTS. This Agreement and the security interests under this Agreement shall terminate when all amounts due and owing on account of, and all obligations and liabilities of TERI in respect of, the Secured Obligations shall have been fully performed, satisfied and paid as provided in this Agreement and the Guaranty Agreements. At such time, the Administrator shall promptly reassign and deliver to TERI, without recourse or representation, against TERI's receipt, all Collateral then held by the Owner or anyone claiming by, through or under the Owner. TERI shall execute and if necessary deliver to the Administrator for execution, and the Administrator shall promptly cause to be filed at the Owner's expense, termination statements in respect of any financing statements filed under this Agreement. The Administrator agrees to fulfill the Owner's obligations to file such termination statements at its own cost and expense. The security interests hereunder shall terminate as to all Collateral lawfully withdrawn by or paid to TERI hereunder, upon the occurrence of such withdrawal or payment. 14. REPRESENTATIONS AND WARRANTIES. (a) Each party, with respect to itself, represents and warrants that: 14 (i) The making and performance of this Agreement and the activities contemplated hereby have been duly authorized by all necessary action and do not and will not: (A) Violate any provision of law, or any regulation, order, decree, writ or injunction, or any provision of such party's charter, bylaws, or any other organizing document; or (B) Violate or result in the breach of, or constitute a default or require any consent under, any agreement or instrument by which it or any of its property may be bound or affected. (ii) This Agreement is the legal, valid and binding obligation of such party, enforceable in accordance with the terms hereof. (iii) There is no pending or threatened litigation that would, if resolved adversely to such party, adversely impact such party's ability to perform any of its obligations under this Agreement or each of the Guaranty Agreements. (b) TERI represents and warrants that: (i) Except for the security interests of the Owner created under this Agreement, TERI is and will be the owner of the Collateral, whenever acquired or arising, free and clear of all liens, security interests, claims, encumbrances, charges, set-offs, defenses and counterclaims; (ii) This Agreement creates a valid and continuing security interest (as defined in the applicable Uniform Commercial Code ("UCC") in effect in the Commonwealth of Massachusetts) in the Collateral in favor of the Owner, which security interest is prior to all other liens, charges, security interests, mortgages or other encumbrances, and is enforceable as such as against creditors of and purchasers from TERI; (iii) The Collateral constitutes a "deposit account" or "investment property" within the meaning of the applicable UCC, except to the extent that the Collateral constitutes Recoveries, in which case, the Collateral is "payment intangibles" and cash. (iv) TERI has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral granted to the Owner hereunder. (v) Other than the security interest granted to the Owner pursuant to this Agreement, TERI has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral. TERI has not authorized the filing of and is not aware of any financing statements against TERI that include a description of collateral covering the Collateral other than any financing statement relating to the security interest granted to the 15 Owner hereunder or that has been terminated. TERI is not aware of any judgment or tax lien filings against TERI. The foregoing representations and warranties in this Section 14(b) shall continue in full force and effect until termination of this Agreement. (c) The foregoing representations and warranties are subject to (i) the exercise of judicial discretion in accordance with the general principles of equity; (ii) the valid exercise of the police powers of the several states of the United States of America and of the constitutional powers of the United States of America and (iii) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights generally. 15. COVENANTS OF TERI. TERI agrees and covenants with the Owner as follows: (a) MAINTENANCE AND USE OF COLLATERAL. TERI shall not permit the Collateral to be used in violation of any of the Guaranty Agreements or this Agreement. (b) TAXES. TERI shall, if so obligated, pay and discharge when due all taxes, assessments, license or permit fees, levies and other charges upon the Collateral, and TERI shall, if so obligated, also pay and discharge when due all other taxes, levies, or assessments relating to its business which, if unpaid, might give rise to any penalty, security interest, lien, charge, levy, assessment, or encumbrance in, on or against the Collateral. The Collateral and all income and/or proceeds of the Collateral shall be, and be treated by TERI as being, the property of TERI, subject to the pledge and security interest created hereunder, and TERI shall report the Collateral and all such proceeds as its sole property until, unless and except to the extent any of the Collateral is paid and transferred pursuant to each of the Guaranty Agreements and this Agreement. (c) NO ENCUMBRANCE. Except as otherwise expressly permitted in this Agreement, TERI shall not sell, assign, transfer, pledge, hypothecate, or otherwise dispose of or encumber any of the Collateral or any interest therein until all of the Secured Obligations are fully satisfied. TERI shall protect and defend the Collateral from and against any and all claims, demands, or legal proceedings brought or asserted by any party other than the Trustee. (d) MAINTENANCE OF SECURITY INTEREST. TERI agrees that it shall do all things necessary to preserve and maintain the security interests of the Owner under this Agreement and Indenture as a first priority lien in the Collateral and shall not permit the creation of any other lien, charge, security interest, or encumbrance in the Collateral. TERI agrees that it shall execute and if necessary deliver to the Trustee for execution, and the Administrator agrees to file or record (at its own cost and expense), such notices, financing statements, continuation statements, certificates of title and other documents, and TERI shall deliver to the Trustee upon request therefor such securities, agreements, writings, documents, certificates, instruments, or other intangibles, as the Trustee reasonably deems necessary from time to time to perfect and maintain the perfection of the security interests of the Trustee under this Agreement. The Trustee or the Administrator shall have the right to file 16 this Agreement and any financing statement reflecting the content of this Agreement for record in any governmental office. (e) RECORDS, STATEMENTS AND RELATED DOCUMENTS. TERI agrees: (i) When reasonably requested to do so by the Administrator, to prepare and deliver to the Administrator a schedule in form satisfactory to the Administrator, certified by an authorized officer of TERI, listing all Collateral and the location thereof; and (ii) To keep accurate and complete records at all times in respect of the Collateral and to deliver to the Administrator copies of such records and such other information regarding the Collateral which the Administrator may reasonably request. (f) LOCATION. The principal office of TERI is located at 31 St. James Avenue, Boston, Massachusetts 02116, and all books of account and records relating to the collateral and TERI's business are located at TERI's principal office. TERI shall not, without giving the Administrator at least ten (10) days prior written notice, change the location of any of the Collateral or the location at which it does business, including, without limitation, the location at which any books of account or records relating to the Collateral and TERI's business are kept. (g) NOTICE. TERI shall promptly notify the Owner of any change in TERI's name or its jurisdiction of organization or any physical loss, destruction, or damage to any material portion of the Collateral. TERI shall also promptly notify the Owner of any default hereunder. In the event of a name change or change in its jurisdiction of organization, TERI shall take such actions, if any, as shall be necessary to maintain the security interests of the Owner hereunder. (h) FURTHER INFORMATION. TERI shall execute and deliver, or cause to be executed and delivered, to the Trustee (and to any other financial institution holding the Pledged Account), in a form satisfactory to the Trustee (or such other institution), TERI's certification of its tax identification number and such other documents as the Trustee shall reasonably request to perform its obligations hereunder. (i) NON-PETITION. TERI shall not at any time prior to one year and one day after all outstanding obligations of the Trust are paid under the Indenture institute against the Owner any bankruptcy proceeding under the Bankruptcy Code or any state bankruptcy or similar law in connection with any obligations of the Owner under this Agreement. The Administrator shall not at any time prior to one year and one day after all outstanding obligations of the Trust are paid under the Indenture institute against the Owner any bankruptcy proceeding under the Bankruptcy Code or any state bankruptcy or similar law in connection with any obligations of the Owner under this Agreement. 16. WAIVER. No delays or omissions by any party hereto in exercising or enforcing any of its respective rights, remedies, powers, privileges and discretions ("RIGHTS AND REMEDIES") shall operate as or constitute a waiver of any such Rights and Remedies. No 17 waiver by a party of any default under this Agreement or each of the Guaranty Agreements shall operate as a waiver of any other default under this Agreement. No single or partial exercise by a party of any of its Rights and Remedies shall preclude the other of further exercise of such Rights and Remedies. No waiver or modification of a party's Rights and Remedies on any one occasion shall be deemed a waiver on any subsequent occasion, nor shall it be deemed a continuing waiver. All Rights and Remedies shall be cumulative and not alternative or exclusive, and a party may exercise any such Rights and Remedies at such time or times and in such order of preference as that party in its sole discretion may determine. 17. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together be deemed a single agreement. 18. CONFIDENTIALITY. The parties acknowledge that this Agreement contains confidential information and agree not to disclose any of the terms and conditions relating to this Agreement and the Pledged Account without the prior express written consent of the others. The provisions of the foregoing sentence to the contrary notwithstanding, any such information may be disclosed (a) to any employees, officers, directors or representatives of the parties to effect the purpose of the Student Loan Program; (b) by TERI and the Administrator to the affiliates and agents of either of them, and other third parties, to effectuate this Agreement, provided that such parties are under a corresponding written obligation to maintain the confidentiality of the Owner's information; and (c) to the attorneys and accountants of the parties on a confidential basis. This provision shall, further, not be construed to prohibit the disclosure of any information relating to this Agreement (i) that is now or in the future becomes public information, (ii) as may be required by applicable law or this Agreement, each of the Guaranty Agreements or the Indenture, (iii) to the underwriters and rating agencies, their employees, trustees and attorneys and to such others as the Administrator may determine necessary (including regulators and potential investors in a private or public offering) in connection with the sale, securitization or other financing of any of the Loans, (iv) in any private placement memorandum in connection with the sale, securitization or other financing of any of the Loans, and (v) as necessary to perfect or enforce the security interest in the Collateral granted hereunder. Nothing in this Agreement shall limit or restrict TERI, the Administrator, or any affiliate of the Administrator (A) in their exchange and use of information as among them, to the extent such exchange or use is governed by other agreements; or (B) from using, manipulating, sharing and disclosing Loan information that has been de-identified so that the identity of the borrower, the lender, or the holder of a Loan (including but not limited to the Owner and Trustee) cannot be determined. 19. CHOICE OF LAW. This Agreement shall be governed and construed in accordance with Massachusetts law, without regard to principles of conflict of laws. 20. SEVERABILITY. If at any time one or more provisions of this Agreement is or becomes invalid, illegal or unenforceable in whole or in part, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 18 21. ASSIGNMENT. This Agreement may not be assigned by any party without the others' prior express written consent. Pursuant to Section 11, this Agreement and the Owner's rights hereunder may be assigned by the Owner as collateral security to the Trustee, and the Trustee and certain other persons are intended beneficiaries of this Agreement. 22. HEADINGS. The section headings used in this Agreement are for convenience of reference only and are not to affect the construction or to be taken into consideration in interpreting this Agreement. 23. AMENDMENT. This Agreement may be amended or modified only by the written agreement of TERI, the Owner, the Administrator and while the Indenture remains in effect, the prior written consent of the Trustee. 24. NOTICES. All notices under this Agreement shall be sent by any means requiring receipt signature, or if by facsimile confirmed by first-class mail, postage or other delivery charge prepaid to TERI: The Education Resources Institute, Inc. 31 St. James Avenue Boston, MA 02116 Attention: President THE TRUSTEE: U.S. Bank National Association Corporate Trust Services-SFS One Federal Street, 3rd Floor Boston, MA 02110 Attention: Vaneta Bernard THE ADMINISTRATOR OR THE OWNER: First Marblehead Data Services, Inc. 230 Park Avenue, 10th Floor New York, NY 10169 Attention: Mr. Rob Baron with a copy to: First Marblehead Corporation The Prudential Tower 800 Boylston Street - 34th Floor Borton, MA 02199-8157 Attention: Mr. Richard P. Zermani 19 Any party may, by notice to the other parties in accordance with this section, designate a different address for notices thereafter under this Agreement. 25. NON-BUSINESS DAYS. Any action required or permitted to be taken or done hereunder on a day which is not a business day in Boston, Massachusetts may be taken or done on the next business day with the same effect as if taken or done on such non-business day. 26. ROLE OF THE OWNER TRUSTEE. It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Wachovia Trust Company, National Association ("Wachovia"), not individually or personally but solely as trustee of the Owner in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Owner is made and intended not as personal representations, undertakings and agreements by Wachovia but is made and intended for the purpose for binding only the Owner, (c) nothing herein contained shall be construed as creating any liability on Wachovia, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wachovia be personally liable for the payment of any indebtedness or expenses of the Owner or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Owner under this Agreement or any other document. [Signature Pages Follow] 20 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers, being first duly authorized, as of the day and year first above written. THE EDUCATION RESOURCES INSTITUTE, INC. By: /S/ LAWRENCE W. O'TOOLE ------------------------ Name: Lawrence W. O'Toole Title: President FIRST MARBLEHEAD DATA SERVICES, INC. By: /S/ BRUCE F. LEFENFELD ---------------------- Name: Bruce F. Lefenfeld Title: President THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1 By: WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION, acting solely as Owner Trustee and not in itsindividual capacity By: /S/ STERLING C. CORREIA ----------------------- Name: Sterling C. Correia Title: Vice President DEPOSIT AND SECURITY AGREEMENT SCHEDULES TO DEPOSIT AND SECURITY AGREEMENT Schedule A - Student Loan Programs Schedule B - Loan Originators, Guaranty Agreements, Student Loan Purchase Agreements and Account Security Agreements EXHIBITS TO DEPOSIT AND SECURITY AGREEMENT Exhibit 1 - Payment of Guaranty Claims Direction Letter Exhibit 2 - Remittance of Guaranty Fees and/or Recoveries Letter Exhibit 3 - [intentionally omitted] Exhibit 4 - [intentionally omitted] Exhibit 5 - Request for Reimbursement of Income Tax or Other Tax Amounts Exhibit 6 - Guaranty Agreements SCHEDULE A STUDENT LOAN PROGRAMS Bank of America, N.A. o BAGEL Loan Program o CEDU Loan Program o Direct to Consumer (DTC) Loan Program o ISLP Loan Program Bank One, N.A. o CORPORATE ADVANTAGE Loan Program o EDUCATION ONE Loan Program o M&T REFERRAL Loan Program Charter One Bank, N.A. o AES EducationGAIN Loan Program o Academic Management Services (AMS) TuitionPay Diploma Loan Program o Brazos Alternative Loan Program o CFS Direct to Consumer Loan Program o Citibank Flexible Education Loan Program o College Loan Corporation Loan Program o Comerica Alternative Loan Program o Education Assistance Services (EAS) Alternative Loan Program o ESF Alternative Loan Program o Extra Credit II Loan Program (North Texas Higher Education) o M&I Alternative Loan Program o National Education Loan Program o Navy Federal Alternative Loan Program o NextStudent Alternative Loan Program o PNC Bank Resource Loan Program o SAF Alternative Loan Program o Southwest Loan Program o WAMU Alternative Student Loan Program Chase Manhattan Bank USA, N.A. o Chase Extra Loan Program Citizens Bank of Rhode Island o Pennsylvania State University Undergraduate and Continuing Education Loan Programs First National Bank Northeast o CASL Undergraduate Loan Program GMAC Bank o GMAC Alternative Loan Program HSBC Bank USA. o Alternative Loan Program The Huntington National Bank o Huntington Education Loan Program National City Bank o National City Loan Program SunTrust Bank o SunTrust Alternative Loan Program SCHEDULE B LOAN ORIGINATORS, GUARANTY AGREEMENTS, STUDENT LOAN PURCHASE AGREEMENTS AND ACCOUNT SECURITY AGREEMENTS I. LOAN ORIGINATORS. o Bank of America, N.A. o Bank One, N.A. o Charter One Bank, N.A. o Chase Manhattan Bank USA, N.A. o Citizens Bank of Rhode Island o First National Bank Northeast o GMAC Bank o HSBC Bank USA o The Huntington National Bank o National City Bank o SunTrust Bank II. GUARANTY AGREEMENTS. Each of the following Guaranty Agreements, as amended or supplemented, was entered into by and between TERI and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 13, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated July 26, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. III. STUDENT LOAN PURCHASE AGREEMENTS. Each of the Student Loan Purchase Agreements, as amended or supplemented, was entered into by and among The First Marblehead Corporation, the Owner and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated May 1, 2002, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated August 1, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated November 13, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. V. ACCOUNT SECURITY AGREEMENTS. Each of the following Deposit and Security Agreements, as amended or supplemented, was entered into by and among TERI, The First Marblehead Corporation, the Trustee and: o Bank of America, N.A., dated April 30, 2001, for loans that were originated under Bank of America's BAGEL Loan Program, CEDU Loan Program and ISLP Loan Program. o Bank of America, N.A., dated June 30, 2003, for loans that were originated under Bank of America's Direct to Consumer Loan Program. o Bank One, N.A., dated April 30, 2001, for loans that were originated under Bank One's CORPORATE ADVANTAGE Loan Program and EDUCATION ONE Loan Program. o Bank One, N.A., dated July 26, 2002, for loans that were originated under Bank One's M&T REFERRAL Loan Program o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's (AMS) TuitionPay Diploma Loan Program. o Charter One Bank, N.A., dated July 15, 2003, for loans that were originated under Charter One's Brazos Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's CFS Direct to Consumer Loan Program. o Charter One Bank, N.A., dated June 30, 2003, for loans that were originated under Charter One's Citibank Flexible Education Loan Program. o Charter One Bank, N.A., dated July 1, 2002, for loans that were originated under Charter One's College Loan Corporation Loan Program. o Charter One Bank, N.A., dated December 4, 2002, for loans that were originated under Charter One's Comerica Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's Education Assistance Services Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's ESF Alternative Loan Program. o Charter One Bank, N.A., dated September 15, 2003, for loans that were originated under Charter One's Extra Credit II Loan Program (North Texas Higher Education). o Charter One Bank, N.A., dated September 20, 2003, for loans that were originated under Charter One's M&I Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's Navy Federal Alternative Loan Program. o Charter One Bank, N.A., dated May 15, 2002, for loans that were originated under Charter One's NextStudent Alternative Loan Program. o Charter One Bank, N.A., dated March 17, 2003, for loans that were originated under Charter One's PNC Bank Resource Loan Program. o Charter One Bank, N.A., dated May 1, 2003, for loans that were originated under Charter One's SAF Alternative Loan Program. o Charter One Bank, N.A., dated September 20, 2002, for loans that were originated under Charter One's Southwest Loan Program. o Charter One Bank, N.A., dated May 15, 2003, for loans that were originated under Charter One's WAMU Alternative Student Loan Program. o Citizens Bank of Rhode Island, dated October 1, 2002, for loans that were originated under Citizens Bank of Rhode Island's Pennsylvania State University Undergraduate and Continuing Education Loan Program. o First National Bank Northeast, dated July 31, 2001, for loans that were originated under First National Bank Northeast's CASL Undergraduate Loan Program. o GMAC Bank, dated May 30, 2003, for loans that were originated under GMAC Bank's GMAC Alternative Loan Program. o HSBC Bank USA, N.A., dated April 17, 2002, for loans that were originated under the HSBC Loan Program. o The Huntington National Bank, dated May 20, 2003, for loans that were originated under The Huntington National Bank's Huntington Education Loan Program. o National City Bank, dated July 26, 2002, for loans that were originated under National City Bank's National City Loan Program. o SunTrust Bank, dated March 1, 2002, for loans that were originated under SunTrust Bank's SunTrust Alternative Loan Program. Each of the following Control Agreements, as amended or supplemented, was entered into by and among The First Marblehead Corporation, the Trustee and: o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. Each of the following Security Agreements, as amended or supplemented, was entered into by and between TERI and: o Charter One Bank, N.A., dated October 31, 2003, for loans that were originated under Charter One's AES EducationGAIN Loan Program. o Charter One Bank, N.A., dated November 17, 2003, for loans that were originated under Charter One's National Education Loan Program. o Chase Manhattan Bank USA, N.A., dated September 30, 2003, for loans that were originated under Chase's Chase Extra Loan Program. EXHIBIT 1 PAYMENT OF GUARANTY CLAIMS DIRECTION LETTER [TERI LETTERHEAD] FIRST MARBLEHEAD DATA SERVICES, INC. 230 PARK AVENUE, 10TH FLOOR NEW YORK, NY 10169 WITH A COPY TO: U.S. BANK NATIONAL ASSOCIATION CORPORATE TRUST SERVICES-SFS ONE FEDERAL STREET, 3RD FLOOR BOSTON, MA 02110 Re: TERI/NCT Pledged Account # Ladies and Gentlemen: Reference is made to (i) the Deposit and Security Agreement (the "AGREEMENT"), dated as of June 10, 2004, by and among THE EDUCATION RESOURCES INSTITUTE, INC. ("TERI"), FIRST MARBLEHEAD DATA SERVICES, INC. and THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1. Capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Agreement. In accordance with the Agreement, please remit $___________________ in Guarantee Claims to U.S. Bank National Association ABA # [_______________] Corporate Trust Department DDA A/C# [____________] Attention: [__________________________]Collateral Proceeds Acct. SEI#: [________________] In addition, please fax this direction letter along with the attached breakdown, which lists the Loan(s), associated with the above-referenced claim funds to: [OWNER] Attention: [Name]; and [SERVICER] Attention: [Name]: Fax Number: ____________ Fax Number:___________________ Please contact me at [TERI CONTACT TELEPHONE NUMBER] should you have any questions regarding this request. Authorized Signature TERI Enc EXHIBIT 2 RECOVERIES LETTER [TERI LETTERHEAD] FIRST MARBLEHEAD DATA SERVICES, INC. 230 PARK AVENUE, 10TH FLOOR NEW YORK, NY 10169 WITH A COPY TO: U.S. BANK NATIONAL ASSOCIATION CORPORATE TRUST SERVICES-SFS ONE FEDERAL STREET, 3RD FLOOR BOSTON, MA 02110 Re: TERI/NCT Pledged Account # Ladies and Gentlemen: Reference is made to the Deposit and Security Agreement (the "AGREEMENT"), dated as of June 10, 2004, by and among THE EDUCATION RESOURCES INSTITUTE, INC., ("TERI"), FIRST MARBLEHEAD DATA SERVICES, INC. and THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1. Capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Agreement. In accordance with the Agreement, the following amounts will be wired to the Pledged Account: 1. $____________________ Total Guaranty Fees* *ATTACHED IS A LIST OF EACH LOAN NAME, LOAN NUMBER AND AMOUNT ASSOCIATED WITH THIS GUARANTY FEE REMITTANCE. 2. $____________________ Total Recovery** ** ATTACHED IS A LIST OF EACH LOAN NAME, LOAN NUMBER AND AMOUNT ASSOCIATED WITH THIS RECOVERY REMITTANCE. $_____________________ Total Amount wired to the Trustee The above-referenced funds will be wired to the Trustee using the following wire instruction: U.S. BANK NATIONAL ASSOCIATION BOSTON, MA 02110 ABA # [_______________] A/C# [_______________] PLEDGED ACCOUNT SEI ###### - 000 Please contact me at [TERI CONTACT TELEPHONE NUMBER] should you have any questions regarding this request. Authorized Signature [TERI] EXHIBIT 5 REQUEST FOR REIMBURSEMENT OF INCOME TAX OR OTHER TAX AMOUNTS [TERI LETTERHEAD] U.S. BANK NATIONAL ASSOCIATION CORPORATE TRUST SERVICES-SFS ONE FEDERAL STREET, 3RD FLOOR BOSTON, MA 02110 FIRST MARBLEHEAD DATA SERVICES, INC. 230 PARK AVENUE, 10TH FLOOR NEW YORK, NY 10169 Re: TERI/NCT Pledged Account # Ladies and Gentlemen: Reference is made to (i) the Deposit and Security Agreement (the "AGREEMENT"), dated as of June 10, 2004, by and among THE EDUCATION RESOURCES INSTITUTE, INC., ("TERI"), FIRST MARBLEHEAD DATA SERVICES, INC. and THE NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1. Capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Agreement. In accordance with Section 3(d)(ii) of the Agreement, this is to inform you that TERI has been assessed and has paid the sum of $______________________________ in income or excise taxes with respect to income earned on the Pledged Account. We hereby request reimbursement of such amount to be sent as follows: PLEASE USE THE FOLLOWING WIRE INSTRUCTIONS: [Bank Name] [Bank Location] ABA # A/C# ATTENTION: TERI Comments: In accordance with the Agreement, we are forwarding a copy of this request to the Owner and the Trustee. We have also enclosed documentation to support this request. Please contact me at [TERI CONTACT TELEPHONE NUMBER] should you have any questions regarding this request. Authorized Signature TERI Enc EX-10.14 15 ncf_ex10-14.txt POOL SUPPLEMENT EXHIBIT 10.14 POOL SUPPLEMENT BANK ONE, N.A. (EDUCATION ONE) This Pool Supplement (the "SUPPLEMENT") is entered into pursuant to and forms a part of that certain Amended and Restated Note Purchase Agreement (the "AGREEMENT") dated as of May 1, 2002, as amended or supplemented from the date of execution of the Agreement through the date of this Supplement, by and between The First Marblehead Corporation ("FMC") and Bank One, N.A. (Columbus, Ohio) (the "PROGRAM LENDER"). This Supplement is dated as of June 10, 2004. Capitalized terms used in this Supplement without definitions have the meanings set forth in the Agreement. ARTICLE 1: PURCHASE AND SALE. In consideration of the Minimum Purchase Price set forth in SCHEDULE 1 attached hereto, the Program Lender hereby transfers, sells, sets over and assigns to The National Collegiate Funding LLC (the "DEPOSITOR"), upon the terms and conditions set forth in the Agreement (which are incorporated herein by reference with the same force and effect as if set forth in full herein), each EDUCATION ONE Loan described in the attached SCHEDULE 2 (the "TRANSFERRED EDUCATION ONE LOANS") along with all of the Program Lender's rights under the Guaranty Agreement relating to the Transferred EDUCATION ONE Loans. The Depositor in turn will sell the Transferred EDUCATION ONE Loans to The National Collegiate Student Loan Trust 2004-1 (the "TRUST"). The Program Lender hereby transfers and delivers to the Depositor each EDUCATION ONE Note evidencing such EDUCATION ONE Loan and all Origination Records relating thereto, in accordance with the terms of the Agreement. The Depositor hereby purchases said EDUCATION ONE Notes on said terms and conditions. ARTICLE 2: PRICE. The amounts paid pursuant to this Supplement are the sum of those amounts set forth in subsections (A) and (B) below. For Transferred EDUCATION ONE Loans originated under the Program Guidelines in effect during the 2002-2003 program year, the term Minimum Purchase Price shall mean the sum of the following amounts with respect to each of the Seasoned Loans to be purchased: (a) The unpaid principal amount (including capitalized interest and financed fees) of the Seasoned Loans in the Pool; plus (b) All accrued and unpaid interest on such EDUCATION ONE Loans, in accordance with the terms of the EDUCATION ONE Notes excluding any capitalized interest already included in principal; plus (c) All fees paid by Bank One to The Education Resources Institute, Inc. ("TERI") with respect to such EDUCATION ONE Loans pursuant to the Origination Agreement, plus (d) A marketing fee and loan premium, computed as a percentage of the original principal amount (net of financed fees) or (if less) the remaining principal amount (net of financed fees) of EDUCATION ONE Loans, as follows (for tier references, see Schedule 3.3 of the Guaranty Agreement): (i) With respect to Undergraduate Creditworthy Loans, 5.5% for tiers 1-3 and 4.5% for tier 4; (ii) With respect to Graduate Creditworthy Loans, 5.5% for tiers 1-3 and 4.5% for tier 4; (iii) With respect to Continuing Education Loans (both Cosigned and Creditworthy), 5.0% for tiers 1-3 and 4.0% for tier 4; (iv) With respect to K-12 loans, 5.5%, plus; (e) The amount of any Guaranty Fees paid by Program Lender to TERI at the time of the Securitization Transaction pursuant to column 6 of Schedule 3.3 of the Guaranty Agreement. In lieu of such purchase price adjustment, FMC, the Depositor or the Trust may pay any such Guaranty Fees directly. For those Transferred EDUCATION ONE Loans originated under the 2003-2004 Program Guidelines, the term Minimum Purchase Price shall mean the sum of the following amounts with respect to each of the Seasoned Loans to be purchased: (a) The unpaid principal amount (including capitalized interest and financed fees) of the Seasoned Loans in the Pool; plus (b) All accrued and unpaid interest on such EDUCATION ONE Loans, in accordance with the terms of the EDUCATION ONE Notes excluding any capitalized interest already included in principal; plus (c) All fees paid by the Program Lender to TERI with respect to such EDUCATION ONE Loans pursuant to the Origination Agreement; plus (d) The amount of any Guaranty Fees paid by the Program Lender to TERI at the time of the Securitization Transaction pursuant to column 6 of Schedule 3.3 for the EDUCATION ONE program of the Guaranty Agreement (in lieu of such purchase price adjustment, FMC, the Depositor or the Trust may pay any such Guaranty Fees directly); plus (e) A marketing fee and loan premium, computed as a percentage of the original principal amount (net of financed fees) or (if less) the remaining principal amount (net of financed fees) of EDUCATION ONE Loans as follows (for tier references see Schedule 3.3 of the Guaranty Agreement): 2 (i) With respect to K-12 Creditworthy Loans, 5.50%; (ii) With respect to Continuing Education Creditworthy Loans, 5.00% for tiers 1-3, 4.00% for tier 4 and 2.50% for tier 5; (iii) With respect to Undergraduate Creditworthy Loans, 5.50% for tiers 1-3, 4.50% for tier 4 and 2.50% for tier 5; and (iv) With respect to Graduate Creditworthy Loans, 5.50% for tiers 1-3, 4.50% for tier 4 and 2.50% for tier 5. ARTICLE 3: REPRESENTATIONS AND WARRANTIES. 3.01. BY PROGRAM LENDER. The Program Lender repeats the representations and warranties contained in Section 5.02 of the Agreement for the benefit of each of the Depositor and the Trust and confirms the same are true and correct as of the date hereof with respect to the Agreement and to this Supplement. 3.02. BY DEPOSITOR. The Depositor hereby represents and warrants to the Program Lender that at the date of execution and delivery of this Supplement by the Depositor: (a) The Depositor is duly organized and validly existing as a limited liability company under the laws of the State of Delaware with the due power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire and own the Transferred EDUCATION ONE Loans. (b) The Depositor is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications. (c) The Depositor has the power and authority to execute and deliver this Supplement and to carry out its respective terms; the Depositor has the power and authority to purchase the Transferred EDUCATION ONE Loans and rights relating thereto as provided herein from the Program Lender, and the Depositor has duly authorized such purchase from the Program Lender by all necessary action; and the execution, delivery and performance of this Supplement has been duly authorized by the Depositor by all necessary action on the part of the Depositor. (d) This Supplement, together with the Agreement of which this Supplement forms a part, constitutes a legal, valid and binding obligation of the Depositor, enforceable in accordance with its terms. 3 (e) The consummation of the transactions contemplated by the Agreement and this Supplement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the governing instruments of the Depositor or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; or result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument; or violate any law or any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. (f) There are no proceedings or investigations pending, or threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties: (i) asserting the invalidity of the Agreement or this Supplement, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Agreement or this Supplement, or (iii) seeking any determination or ruling that is likely to materially or adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of the Agreement or this Supplement. ARTICLE 4: CROSS RECEIPT. The Program Lender hereby acknowledges receipt of the Minimum Purchase Price. The Depositor hereby acknowledges receipt of the Transferred EDUCATION ONE Loans included in the Pool. ARTICLE 5: ASSIGNMENT OF ORIGINATION, GUARANTY AND SERVICING RIGHTS. The Program Lender hereby assigns and sets over to the Depositor any claims it may now or hereafter have under the Guaranty Agreement, the Origination Agreement and the Servicing Agreement to the extent the same relate to the Transferred EDUCATION ONE Loans described in SCHEDULE 2, other than any right to obtain servicing after the date hereof. It is the intent of this provision to vest in the Depositor any claim of the Program Lender relating to defects in origination, guaranty or servicing of the loans purchased hereunder in order to permit the Depositor to assert such claims directly and obviate any need to make the same claims against the Program Lender under this Supplement. [Remainder of Page Intentionally Left Blank] 4 IN WITNESS WHEREOF, the parties have caused this Supplement to be executed as of the date set forth above. THE FIRST MARBLEHEAD CORPORATION By: /s/ John A. Hupalo ------------------ Name: John A. Hupalo Title: Executive Vice President BANK ONE, N.A. (Columbus, Ohio) By: /s/ Brad L. Conner ------------------ Name: Brad L. Conner Title: Executive Vice President THE NATIONAL COLLEGIATE FUNDING LLC By: GATE Holdings, Inc., Member By: /s/ Bruce F. Lefenfeld ---------------------- Name: Bruce F. Lefenfeld Title: Vice President BANK ONE (ED ONE) POOL SUPPLEMENT Schedule 1 Minimum Purchase Price [**] Schedule 2 Transferred Loans [On File with the Indenture Trustee] EX-10.15 16 ncf_ex10-15.txt POOL SUPPLEMENT EXHIBIT 10.15 POOL SUPPLEMENT BANK OF AMERICA, N.A. (BAGEL & TERI ALTERNATIVE) This Pool Supplement (the "SUPPLEMENT") is entered into pursuant to and forms a part of that certain Note Purchase Agreement (the "AGREEMENT") dated as of April 30, 2001, as amended or supplemented from the date of execution of the Agreement through the date of this Supplement, by and between The First Marblehead Corporation and Bank of America, N.A. (the "PROGRAM LENDER"). This Supplement is dated as of June 10, 2004. Capitalized terms used in this Supplement without definitions have the meanings set forth in the Agreement. ARTICLE 1: PURCHASE AND SALE. In consideration of the Minimum Purchase Price set forth in SCHEDULE 1 attached hereto, the Program Lender hereby transfers, sells, sets over and assigns to The National Collegiate Funding LLC (the "DEPOSITOR"), upon the terms and conditions set forth in the Agreement (which are incorporated herein by reference with the same force and effect as if set forth in full herein), each Bank of America Conforming Loan described in the attached SCHEDULE 2 (the "TRANSFERRED BANK OF AMERICA LOANS") along with all of the Program Lender's rights under the Guaranty Agreement relating to the Transferred Bank of America Loans. The Depositor in turn will sell the Transferred Bank of America Loans to The National Collegiate Student Loan Trust 2004-1 (the "TRUST"). The Program Lender hereby transfers and delivers to the Depositor each Bank of America Note evidencing such Bank of America Conforming Loan and all Origination Records relating thereto, in accordance with the terms of the Agreement. The Depositor hereby purchases said Bank of America Notes on said terms and conditions. ARTICLE 2: PRICE. The amounts paid pursuant to this Supplement are the Minimum Purchase Price for the Transferred Bank of America Loans. "Minimum Purchase Price" shall mean the sum of the following amounts with respect to each of the Seasoned Loans to be purchased: (a) The unpaid principal amount of the Seasoned Loans in question including, without limitation, any financed fees and capitalized interest; plus (b) All accrued and unpaid interest on such Seasoned Loans, in accordance with the terms of the Bank of America Notes, excluding any capitalized interest already included in principal; plus (c) With respect to Seasoned Loans as to which no financed fee was added to the principal amount, the amount of any guaranty fee paid by the Program Lender to The Education Resources Institute, Inc. ("TERI") (except that for Generic Creditready Medical loans and the loans to graduate and professional students at the College of William and Mary, no such amount shall be paid to the Program Lender for fees paid under columns 4 and 5 of Exhibit K to the Guaranty Agreement, as amended). If the terms of the Guaranty Agreement call for any Guaranty Fees to be paid to TERI or to the Agent concurrent with the Securitization Transaction, the Program Lender may elect either: (i) to pay the fees and be reimbursed under this clause, or (ii) for the Depositor or the Trust to pay the fees directly; plus (d) A partial reimbursement for servicing costs incurred and paid by the Program Lender with respect to Seasoned Loans described in subsection (b) of the definition of "Seasoned Loans" other than Bank of America TERI Program Loans, such reimbursement to equal one-third of the cost of servicing from the Purchase Date of the first Securitization Transaction that occurs after such loan is first disbursed until the Purchase Date when such loan is sold to the Depositor. ARTICLE 3: REPRESENTATIONS AND WARRANTIES. 3.01. BY PROGRAM LENDER. The Program Lender repeats the representations and warranties contained in Section 5.02 of the Agreement for the benefit of each of the Depositor and the Trust and confirms the same are true and correct as of the date hereof with respect to the Agreement and to this Supplement. 3.02. BY DEPOSITOR. The Depositor hereby represents and warrants to the Program Lender that at the date of execution and delivery of this Supplement by the Depositor: (a) The Depositor is duly organized and validly existing as a limited liability company under the laws of the State of Delaware with the due power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire and own the Transferred Bank of America Loans. (b) The Depositor is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications. (c) The Depositor has the power and authority to execute and deliver this Supplement and to carry out its respective terms; the Depositor has the power and authority to purchase the Transferred Bank of America Loans and rights relating thereto as provided herein from the Program Lender, and the Depositor has duly authorized such purchase from the Program Lender by all necessary action; and the execution, delivery and performance of this Supplement has been duly authorized by the Depositor by all necessary action on the part of the Depositor. (d) This Supplement, together with the Agreement of which this Supplement forms a part, constitutes a legal, valid and binding obligation of the Depositor, enforceable in accordance with its terms. (e) The consummation of the transactions contemplated by the Agreement and this Supplement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a 2 default under, the governing instruments of the Depositor or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; or result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument; or violate any law or any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. (f) There are no proceedings or investigations pending, or threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties: (i) asserting the invalidity of the Agreement or this Supplement, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Agreement or this Supplement, or (iii) seeking any determination or ruling that is likely to materially or adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of the Agreement or this Supplement. ARTICLE 4: CROSS RECEIPT. The Program Lender hereby acknowledges receipt of the Minimum Purchase Price. The Depositor hereby acknowledges receipt of the Transferred Bank of America Loans. ARTICLE 5: ASSIGNMENT OF ORIGINATION, GUARANTY AND SERVICING RIGHTS. The Program Lender hereby assigns and sets over to the Depositor any claims it may now or hereafter have under the Guaranty Agreement, the Origination Agreement and the Servicing Agreement to the extent the same relate to the Transferred Bank of America Loans described in SCHEDULE 2, other than any right to obtain servicing after the date hereof. It is the intent of this provision to vest in the Depositor any claim of the Program Lender relating to defects in origination, guaranty or servicing of the loans purchased hereunder in order to permit the Depositor to assert such claims directly and obviate any need to make the same claims against the Program Lender under this Supplement. 3 IN WITNESS WHEREOF, the parties have caused this Supplement to be executed as of the date set forth above. THE FIRST MARBLEHEAD CORPORATION By: /s/ John A. Hupalo --------------------------------- Name: John A. Hupalo Title: Executive Vice President BANK OF AMERICA, N.A. By: /s/ K L. Cannon --------------------------------- K L. Cannon Senior Vice President THE NATIONAL COLLEGIATE FUNDING LLC By: GATE Holdings, Inc., Member By: /s/ Bruce F. Lefenfeld ---------------------------- Name: Bruce F. Lefenfeld Title: Vice President BANK OF AMERICA (BAGEL) POOL SUPPLEMENT Schedule 1 Minimum Purchase Price [**] Schedule 2 Bank of America Conforming Loans [On File with the Indenture Trustee] EX-10.16 17 ncf_ex10-16.txt POOL SUPPLEMENT EXHIBIT 10.16 POOL SUPPLEMENT CHARTER ONE BANK, N.A. This Pool Supplement (the "SUPPLEMENT") is entered into pursuant to and forms a part of each of the Note Purchase Agreements (the "AGREEMENTS") set forth on SCHEDULE 1 attached hereto, each as amended or supplemented from the date of execution of the Agreement through the date of this Supplement, by and between The First Marblehead Corporation ("FMC") and Charter One Bank, N.A. (the "PROGRAM LENDER"). This Supplement is dated as of June 10, 2004. Capitalized terms used in this Supplement without definitions have the meanings set forth in the Agreements. ARTICLE 1: PURCHASE AND SALE. In consideration of the Minimum Purchase Price set forth in SCHEDULE 1 attached hereto, the Program Lender hereby transfers, sells, sets over and assigns to The National Collegiate Funding LLC (the "DEPOSITOR"), upon the terms and conditions set forth in the Agreements (which are incorporated herein by reference with the same force and effect as if set forth in full herein), each student loan set forth on attached SCHEDULE 2 (the "TRANSFERRED LOANS") along with all of the Program Lender's rights under the Guaranty Agreements relating to the Transferred Loans. The Depositor in turn will sell the Transferred Loans to The National Collegiate Student Loan Trust 2004-1 (the "TRUST"). The Program Lender hereby transfers and delivers to the Depositor each Note evidencing such Transferred Loan and all Origination Records relating thereto, in accordance with the terms of the Agreements. The Depositor hereby purchases said Notes on said terms and conditions. ARTICLE 2: PRICE. The amounts paid pursuant to this Supplement are the sum of the amounts set forth on SCHEDULE 1 attached hereto. ARTICLE 3: REPRESENTATIONS AND WARRANTIES. 3.01. BY PROGRAM LENDER. The Program Lender repeats the representations and warranties contained in Section 5.02 of the Agreements for the benefit of each of the Depositor and the Trust and confirms the same are true and correct as of the date hereof with respect to the Agreements and to this Supplement. 3.02. BY DEPOSITOR. The Depositor hereby represents and warrants to the Program Lender that at the date of execution and delivery of this Supplement by the Depositor: (a) The Depositor is duly organized and validly existing as a limited liability company under the laws of the State of Delaware with the due power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire and own the Transferred Loans. (b) The Depositor is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications. (c) The Depositor has the power and authority to execute and deliver this Supplement and to carry out its respective terms; the Depositor has the power and authority to purchase the Transferred Loans and rights relating thereto as provided herein from the Program Lender, and the Depositor has duly authorized such purchase from the Program Lender by all necessary action; and the execution, delivery and performance of this Supplement has been duly authorized by the Depositor by all necessary action on the part of the Depositor. (d) This Supplement, together with the Agreements of which this Supplement forms a part, constitutes a legal, valid and binding obligation of the Depositor, enforceable in accordance with its terms. (e) The consummation of the transactions contemplated by the Agreements and this Supplement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the governing instruments of the Depositor or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; or result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument; or violate any law or any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. (f) There are no proceedings or investigations pending, or threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties: (i) asserting the invalidity of the Agreements or this Supplement, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Agreements or this Supplement, or (iii) seeking any determination or ruling that is likely to materially or adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of the Agreements or this Supplement. ARTICLE 4: CROSS RECEIPT. The Program Lender hereby acknowledges receipt of the Minimum Purchase Price. The Depositor hereby acknowledges receipt of the Transferred Loans included in the Pool. ARTICLE 5: ASSIGNMENT OF ORIGINATION, GUARANTY AND SERVICING RIGHTS. The Program Lender hereby assigns and sets over to the Depositor any claims it may now or hereafter have under the Guaranty Agreements, the Origination Agreements and the Servicing Agreements to the extent the same relate to the Transferred Loans described in SCHEDULE 2, other than any right to obtain servicing after the date hereof. It is the intent of this provision to vest in the Depositor any claim of the Program Lender relating to defects in origination, guaranty or 2 servicing of the loans purchased hereunder in order to permit the Depositor to assert such claims directly and obviate any need to make the same claims against the Program Lender under this Supplement. 3 IN WITNESS WHEREOF, the parties have caused this Supplement to be executed as of the date set forth above. THE FIRST MARBLEHEAD CORPORATION By: /s/ John A. Hupalo ------------------------------- Name: John A. Hupalo Title: Executive Vice President CHARTER ONE BANK, N.A. By: /s/ Linda M. Rankey-Froggett ------------------------------- Name: Linda M. Rankey-Froggett Title: Production Manager THE NATIONAL COLLEGIATE FUNDING LLC By: GATE Holdings, Inc., Member By: /s/ Bruce F. Lefenfeld ------------------------ Name: Bruce F. Lefenfeld Title: Vice President CHARTER ONE POOL SUPPLEMENT Schedule 1 Minimum Purchase Price [**] Schedule 2 Transferred Loans [On File with the Indenture Trustee] EX-23.1 18 ncf_ex23-1.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS The Education Resources Institute, Inc. We hereby consent to the use in this Registration Statement on Form S-3 of our report dated September 4, 2003, relating to our audit of the financial statements of The Education Resources Institute, Inc. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts May 13, 2004 EX-23.2 19 ncf_ex23-2.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS The Education Resources Institute, Inc. We hereby consent to the use in this Registration Statement on Form S-3 of our report dated September 4, 2003, relating to our audit of the financial statements of The Education Resources Institute, Inc. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts June 3, 2004 -----END PRIVACY-ENHANCED MESSAGE-----