SECOND SUPPLEMENTAL INDENTURE OF TRUST

Indenture Agreement

You are currently viewing:

This Indenture Agreement involves

PHEAA STUDENT LOAN TRUST

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: SECOND SUPPLEMENTAL INDENTURE OF TRUST
Governing Law: Pennsylvania Date: 8/26/2004

Exhibit 4.2

SECOND SUPPLEMENTAL INDENTURE OF TRUST

by and between

PHEAA STUDENT LOAN TRUST I

and

MANUFACTURERS AND TRADERS TRUST COMPANY,
as Indenture Trustee and Eligible Lender Trustee

Authorizing the Issuance of

$400,000,000
PHEAA Student Loan Trust I
Student Loan Asset-Backed Notes
Series 2004-1

Dated as of July 1, 2004

TABLE OF CONTENTS

ARTICLE I
DEFINITIONS AND USE OF PHRASES

ARTICLE II
CREATION OF THE SERIES 2004-1 NOTES, SERIES 2004-1 NOTE DETAILS, FORM OF SERIES 2004-1 NOTES, REDEMPTION OF SERIES 2004-1 NOTES AND USE OF PROCEEDS OF SERIES 2004-1 NOTES

Section 2.01 Designation
Section 2.02 Series 2004-1 Note Details.
Section 2.03 Payment of Principal, Generally; Redemption
Section 2.04 Delivery of Series 2004-1 Notes
Section 2.05 Form of Series 2004-1 Notes
Section 2.06 Trustee’s Authentication Certificate
Section 2.07 Deposit of Series 2004-1 Note Proceeds

ARTICLE III
GENERAL PROVISIONS

ARTICLE IV
FUNDS

Section 4.01 Maintenance and Creation of Funds and Accounts
Section 4.02 Acquisition Fund
Section 4.03 Revenue Fund.
Section 4.04 Distribution Account.
Section 4.05 Transfers to Depositor
Section 4.06 Reserve Fund.

ARTICLE V
LIMITATION ON COUNTERPARTY RIGHTS

ARTICLE VI
APPLICABILITY OF INDENTURE

Appendix A – Certain Terms and Provisions of the Auction Rate Notes

Exhibit A-1	Form of Series 2004-1, Senior Class A-1 Notes
Exhibit A-2	Form of Series 2004-1, Senior Class A-2 Notes
Exhibit A-3	Form of Series 2004-1, Senior Class A-3 Notes
Exhibit A-4	Form of Series 2004-1, Subordinate Class B-1 Notes
Exhibit B	Series 2004-1 Closing Cash Flow Projections
Exhibit C	Form of Notice of Payment Default
Exhibit D	Form of Notice of Cure of Payment Default
Exhibit E	Form of Notice of Proposed Change in Length of One or More Auction Periods
Exhibit F	Form of Notice Establishing Change in Length of One or More Auction Periods
Exhibit G	Form of Notice of Change in Auction Date
Exhibit H	Intentionally Omitted
Exhibit I	Form of Moody’s Investor Services’ Student Loan Monitoring Report

SECOND SUPPLEMENTAL INDENTURE OF TRUST

THIS SECOND SUPPLEMENTAL INDENTURE OF TRUST (this “ Supplemental Indenture ”), dated as of July 1, 2004, is by and between PHEAA STUDENT LOAN TRUST I, a Delaware statutory trust (the “ Issuer ”), by WACHOVIA BANK OF DELAWARE, N.A., not in its individual capacity, but solely as Owner Trustee on behalf of the Issuer and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York corporation (together with its successors, the “ Indenture Trustee ”), as Indenture Trustee and Eligible Lender Trustee hereunder (all capitalized terms used in these preambles, recitals and granting clauses shall have the same meanings assigned thereto in Article I hereof), and is executed by the parties hereto in connection with the issuance of the Series 2004-1 Notes;

W I T N E S S E T H:

WHEREAS, the Issuer has previously entered into an Indenture of Trust, dated as of December 1, 2003, as amended by a First Supplemental Indenture of Trust, dated as of December 1, 2003, and the First Amendment to Indenture of Trust and First Supplemental Indenture of Trust dated as of July 1, 2004 (the “ Indenture ”), between the Issuer and the Indenture Trustee;

WHEREAS, the Issuer desires to enter into this Supplemental Indenture in order to issue Notes pursuant to the terms of the Indenture, including Section 2.08 thereof;

WHEREAS, the Issuer represents that it is duly created as a statutory trust under the laws of the State of Delaware and that by proper action it has duly authorized the issuance of $400,000,000 of its Student Loan Asset-Backed Notes, Series 2004-1 (the “Series 2004-1 Notes”), and it has by proper action authorized the execution and delivery of this Supplemental Indenture;

WHEREAS, the Series 2004-1 Notes constitute Notes as defined in the Indenture;

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

WHEREAS, Section 2.08 of the Indenture provides that the Issuer may from time to time issue one or more Series of Notes. The terms of any Series of Notes are to be set forth in a Supplemental Indenture. Pursuant to this Supplemental Indenture, the Issuer and the Indenture Trustee shall create the Series 2004-1 Notes and specify the terms thereof. The Servicer is acknowledging this Supplemental Indenture to agree to the terms hereof applicable to the Servicer.

NOW, THEREFORE, it is mutually covenanted and agreed as follows:

ARTICLE I

DEFINITIONS AND USE OF PHRASES

All words and phrases defined in Appendix A of the Indenture shall have the same meaning in this Supplemental Indenture, except as otherwise appears in this Article. In addition, the following terms have the following meanings in this Supplemental Indenture unless the context clearly requires otherwise:

“ Accrual Period ” means, with respect to the Series 2004-1 Class A-1 Notes, initially, the period beginning on the Date of Issuance of the Series 2004-1 Class A-1 Notes, and ending on October 24, 2004, and thereafter, the period beginning on a Quarterly Distribution Date and ending on the day before the next Quarterly Distribution Date; and with respect to each Class of Auction Rate Notes issued pursuant to this Supplemental Indenture, means, initially, the period beginning on the Closing Date and ending on the Initial Auction Date for that Class, and thereafter, the period beginning on an Auction Rate Distribution Date for that Class and ending on the day before the next Auction Rate Distribution Date for that Class.

“ Acquisition Fund ” means the Acquisition Fund as described in the Indenture and this Supplemental Indenture.

“ Additional Notes ” means any Senior Notes, Subordinate Notes or Junior Subordinate Notes duly issued and authenticated pursuant to Section 2.08 of the Indenture and a related Supplemental Indenture at any time after the date hereof

“ Auction Rate Distribution Date ” means each Payment Date (as defined in Appendix A).

“ Auction Rate Notes ” means those notes issued by the Issuer pursuant to the Indenture and any Supplemental Indenture with respect to which the applicable Note Rate for any Accrual Period is determined in accordance with the procedures set forth in Appendix A to such Supplemental Indenture, and which includes the Series 2003-1 Class A-2 Notes, Series 2003-1 Class A-3 Notes and Series 2003-1 Class B-1 Notes, which, collectively, were issued on December 10, 2003 pursuant to that certain First Supplemental Indenture, and the Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes and Series 2004-1 Class B-1 Notes issued under this Supplemental Indenture, and any Additional Notes with respect to which the applicable Note Rate is so determined.

“ Authorized Denominations ” means (i) $100,000 and any additional increments of $1,000 for the LIBOR Rate Notes, and (ii) $50,000 and any integral multiple thereof for the Auction Rate Notes.

“ Available Funds ” means, as to a Distribution Date or any related Monthly Expense Payment Date, the sum of the following amounts for the related Collection Period or, in the case of an Auction Rate Distribution Date occurring while any LIBOR Notes remain Outstanding, the applicable portion of these amounts:

(a) all collections received by the Servicer on the Financed Student Loans, including any Guarantee Payments received on the Financed Student Loans, but net of:

(i) any collections in respect of principal on the Financed Student Loans applied by the Issuer to repurchase Guaranteed Student Loans from the Guarantors under the Guarantee Agreements, and

(ii) amounts required by the Higher Education Act to be paid to the Department or to be repaid to borrowers with respect to the Financed Student Loans for that Collection Period, whether or not in the form of a principal reduction of the applicable Financed Student Loan, and including Consolidation Loan rebate fees;

(b) any Interest Subsidy Payments and Special Allowance Payments received by the Servicer or the Eligible Lender Trustee during that Collection Period for the Financed Student Loans;

(c) all proceeds of the liquidation of defaulted Financed Student Loans that were liquidated during that Collection Period in accordance with the Servicer’s customary servicing procedures, net of expenses incurred by the Servicer related to their liquidation and any amounts required by law to be remitted to the borrower on the liquidated Financed Student Loans, and all recoveries on liquidated Financed Student Loans that were written off in prior Collection Periods or during that Collection Period;

(d) the aggregate purchase amounts received during that Collection Period for those Financed Student Loans repurchased by the Depositor or purchased by the Servicer or for Financed Student Loans sold to another Eligible Lender pursuant to the Servicing Agreement;

(e) the aggregate purchase amounts received during that Collection Period for those Student Loans repurchased by the Seller;

(f) the aggregate amounts, if any, received from the Seller, the Depositor or the Servicer, as the case may be, as reimbursement of non-guaranteed interest amounts, or lost Interest Subsidy Payments and Special Allowance Payments, on the Financed Student Loans pursuant to the Loan Sale Agreements or the Servicing Agreement;

(g) amounts received by the Issuer pursuant to the Servicing Agreement during that Collection Period as to yield or principal adjustments; and

(h) investment earnings on that Distribution Date and any interest remitted by the Indenture Trustee to the Revenue Fund prior to such Distribution Date or Monthly Expense Payment Date;

provided that if on any Distribution Date there would not be sufficient funds, after application of Available Funds, as defined above, and application of amounts available from the Acquisition Fund and the Reserve Fund, to pay the Monthly Operating Expenses and the items specified in clauses (i) and (ii) of each of Sections 4.03(d) and (e) (but excluding each clause (ii), and including clauses (iii) through (v)(B) of Section 4.03(d), in the event that a condition exists as

described in either of clause (i) or (ii) of Section 2.03(d)), then Available Funds on that Distribution Date will include, in addition to the Available Funds as defined above, amounts on deposit in the Revenue Fund, or amounts held by the Indenture Trustee, or which the Indenture Trustee reasonably estimates to be held by the Indenture Trustee, for deposit into the Revenue Fund that would have constituted Available Funds for the next succeeding Distribution Date, up to the amount necessary to pay such items, and the Available Funds for the succeeding Distribution Date will be reduced for any amounts so applied.

“ Calculation Agent ” shall mean Manufacturers and Traders Trust Company.

“ Carryover Amount ” shall have the meaning assigned to it in Appendix A.

“ Class ” means those Notes, within a series, to which all the same terms and conditions apply and which can be identified by its own alpha-numeric designation (e.g. “A-1”) and which is so designated in a Supplemental Indenture.

“ Class A Auction Rate Notes ” shall mean the Series 2003-1 Class A-2 Notes, the Series 2003-1 Class A-3 Notes, the Series 2004-1 Class A-2 Notes, and the Series 2004-1 Class A-3 Notes, together with any Additional Notes which are Auction Rate Notes and which are issued on a parity with such Class A Auction Rate Notes.

“ Class A Auction Rate Noteholders ” shall mean the holders of the Class A Auction Rate Notes.

“ Class A Carryover Amount ” shall mean the Carryover Amount attributable to the Class A Auction Rate Notes.

“ Class A LIBOR Rate Notes ” shall mean, collectively, the Series 2003-1 Class A-1 Notes and the Series 2004-1 Class A-1 Notes together with any Additional Notes which are LIBOR Rate Notes and which are issued on a parity with such Class A LIBOR Rate Notes.

“ Class A Noteholders ” shall mean the holders of the Class A Notes.

“ Class A Noteholders’ Distribution Amount ” shall mean, for any Distribution Date, the sum of the Class A Noteholders’ Interest Distribution Amount and the Class A Noteholders’ Principal Distribution Amount on that Distribution Date.

“ Class A Noteholders’ Interest Distribution Amount ” means, for any Distribution Date, the sum of:

(a) the amount of interest accrued at the related Class A Note interest rates for the related Accrual Period with respect to all Class A Notes entitled to a distribution on such Distribution Date on the aggregate outstanding principal balances of the related Class A Notes on the applicable immediately preceding Distribution Date(s) after giving effect to all principal distributions made to Class A Noteholders on all preceding Distribution Dates or, in the case of the first Distribution Date for these Class A Notes, on the Closing Date, and

(b) the Class A Note Interest Shortfall on that Distribution Date.

“ Class A Noteholders’ Principal Distribution Amount ” shall mean, for any Distribution Date (a) while LIBOR Rate Notes are Outstanding, an amount equal to the Principal Distribution Amount on such Distribution Date plus the Class A Note Principal Shortfall as of the close of the immediately preceding Distribution Date, and (b) once no LIBOR Rate Notes remain Outstanding, and until the date on which the Class A Auction Rate Noteholders have been paid in full, an amount equal to the Principal Distribution Amount on such Distribution Date plus the Class A Note Principal Shortfall as of the close of the immediately preceding Distribution Date less the greatest amount that can be paid as principal on the Class B Notes without reducing the Senior Parity Percentage below the Required Senior Parity Percentage or reducing the Parity Percentage below the Required Parity Percentage, with those percentages computed assuming that immediately prior to the computation, that such principal payment was actually made on the Class B Notes; provided that the Class A Noteholders’ Principal Distribution Amount will not exceed the outstanding principal balance of the Class A Notes. In addition:

(a) on the Stated Maturity of the Series 2003-1 Class A-1 Notes, the principal required to be distributed to the holders of the Series 2003-1 Class A-1 Notes will include the amount required to reduce the outstanding principal balance of the Series 2003-1 Class A-1 Notes to zero; and

(b) on the Stated Maturity of the Series 2003-1 Class A-2 Notes, the principal required to be distributed to the holders of the Series 2003-1 Class A-2 Notes will include the amount required to reduce the outstanding principal balance of the Series 2003-1 Class A-2 Notes to zero; and

(c) on the Stated Maturity of the Series 2003-1 Class A-3 Notes, the principal required to be distributed to the holders of the Series 2003-1 Class A-3 Notes will include the amount required to reduce the outstanding principal balance of the Series 2003-1 Class A-3 Notes to zero; and

(d) on the Stated Maturity of the Series 2004-1 Class A-1 Notes, the principal required to be distributed to the holders of the Series 2004-1 Class A-1 Notes will include the amount required to reduce the outstanding principal balance of the Series 2004-1 Class A-1 Notes to zero; and

(e) on the Stated Maturity of the Series 2004-1 Class A-2 Notes, the principal required to be distributed to the holders of the Series 2004-1 Class A-2 Notes will include the amount required to reduce the outstanding principal balance of the Series 2004-1 Class A-2 Notes to zero; and

(f) on the Stated Maturity of the Series 2004-1 Class A-3 Notes, the principal required to be distributed to the holders of the Series 2004-1 Class A-3 Notes will include the amount required to reduce the outstanding principal balance of the Series 2004-1 Class A-3 Notes to zero.

“ Class A Notes ” shall mean, collectively, the Series 2003-1 Class A-1 Notes, the Series 2003-1 Class A-2 Notes, the Series 2003-1 Class A-3 Notes, the Series 2004-1 Class A-1 Notes, the Series 2004-1 Class A-2 Notes, and the Series 2004-1 Class A-3 Notes, together with any Additional Notes issued on a parity with the Class A Notes, and each of which shall constitute Senior Notes.

“ Class A Note Interest Shortfall ” means, for any Distribution Date, the sum, for all of the Class A Notes with a Distribution Date on such Distribution Date, of the excess of:

(a) the amount of interest (excluding Carryover Amounts) that was payable on such Class A Notes on their preceding Distribution Date, over

(b) the amount of interest actually distributed with respect to such Class A Notes on that preceding Distribution Date, plus interest on the amount of that excess, to the extent permitted by law, at the interest rates on the Class A Notes from that preceding Distribution Date to the current Distribution Date.

“ Class A Note Principal Shortfall ” means, as of the close of any Distribution Date, the excess of:

(a) the Class A Noteholders’ Principal Distribution Amount on that Distribution Date, over

(b) the amount of principal actually distributed or allocated to the Class A Noteholders on that Distribution Date.

“ Class B Auction Rate Notes ” shall mean the Series 2003-1 Class B-1 Notes and the Series 2004-1 Class B-1 Notes, together with any Additional Notes which are Auction Rate Notes and which are issued on a parity with such Class B Auction Rate Notes.

“ Class B Auction Rate Noteholders ” shall mean the holders of the Class B Auction Rate Notes.

“ Class B Carryover Amount ” shall mean the Carryover Amount attributable to the Class B Notes.

“ Class B Noteholders ” shall mean the holders of the Class B Notes.

“ Class B Noteholders’ Distribution Amount ” means, for any Distribution Date, the sum of the Class B Noteholders’ Interest Distribution Amount and the Class B Noteholders’ Principal Distribution Amount on that Distribution Date.

“ Class B Noteholders’ Interest Distribution Amount ” means, for any Distribution Date, the sum of:

(a) the amount of interest accrued at the applicable Note Rate for the related Accrual Period on the outstanding principal balance of each Class of the Class B Notes on the

immediately preceding Distribution Date, after giving effect to all principal distributions to Class B Noteholders on that immediately preceding Distribution Date, and

(b) the Class B Note Interest Shortfall on that Distribution Date.

“ Class B Note Interest Shortfall ” means, for any Distribution Date, the excess of:

(a) the Class B Noteholders’ Interest Distribution Amount on the preceding Distribution Date, over

(b) the amount of interest actually distributed to the Class B Noteholders on that preceding Distribution Date, plus interest on the amount of that excess, to the extent permitted by law, at the Class B Note interest rate from that preceding Distribution Date to the current Distribution Date.

“ Class B Note Principal Shortfall ” means, as of the close of any Distribution Date, the excess of:

(a) the Class B Noteholders’ Principal Distribution Amount on that Distribution Date, over

(b) the amount of principal actually distributed or allocated to the Class B Noteholders on that Distribution Date.

“ Class B Noteholders’ Principal Distribution Amount ” means:

(a) for any Distribution Date occurring after the date on which all the principal balances of Class A LIBOR Rate Notes have been reduced to zero and before the date on which the Class A Auction Rate Noteholders have been paid in full, the greatest amount that can be paid as principal on the Class B Notes without reducing the Senior Parity Percentage below the Required Senior Parity Percentage or reducing the Parity Percentage below the Required Parity Percentage; and

(b) for any Distribution Date occurring after the date on which the Class A Noteholders have been paid in full, the sum of the Principal Distribution Amount on that Distribution Date and the Class B Note Principal Shortfall as of the close of the preceding Distribution Date;

provided that the Class B Noteholders’ Principal Distribution Amount will not exceed the principal balance of the Class B Notes.

In addition, on the Stated Maturity of any Class of the Class B Notes, the principal required to be distributed to the Class B Noteholders will include the amount required to reduce the outstanding principal balance of the Class B Notes to zero.

“ Class B Notes ” shall mean the Series 2003-1 Class B-1 Notes and the Series 2004-1 Class B-1 Notes, together with any Additional Notes issued on a parity with the Class B Notes, and each of which shall constitute Subordinate Notes.

“ Collection Period ” means (a) with respect to the Series 2004-1 Class A-1 Notes, initially the period from the Date of Issuance through September 30, 2004, and thereafter, and with respect to all other Class A LIBOR Rate Notes Outstanding as of the date hereof, the three-month period ending on the last day of March, June, September or December, in each case for the Quarterly Distribution Date in the following month, and (b) with respect to the Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes, and the Series 2004-1 Class B-1 Notes, initially, the period from the Closing Date through July 31, 2004, and thereafter, and with respect to all other Auction Rate Notes Outstanding as of the date hereof, the period beginning on the first day of each month and ending on the last day of the same month.

“ Date of Issuance ” shall mean, with respect to the Series 2004-1 Notes, July 14, 2004.

“ Distribution Account ” shall mean the distribution account of the Revenue Fund established pursuant to Section 4.01.

“ Distribution Date ” shall mean with respect to the LIBOR Rate Notes each Quarterly Distribution Date, and with respect to the Auction Rate Notes means each Auction Rate Distribution Date, and means, for any Note, its Stated Maturity or the date of any other regularly scheduled principal payment with respect thereto.

“ First Amendment ” shall mean that certain First Amendment to the Indenture of Trust and First Supplemental Indenture of Trust, dated as of July 1, 2004, by and between the Issuer and the Indenture Trustee.

“ LIBOR Note Principal Distribution Amount ” shall mean, with respect to a Distribution Date, the aggregate of the Targeted Principal Amounts for each Class of LIBOR Rate Notes then Outstanding which is scheduled to be paid on such Distribution Date.

“ LIBOR Rate Notes ” shall mean notes issued by the Issuer pursuant to the Indenture and any Supplemental Indenture which are indexed on One-Month LIBOR, Two-Month LIBOR, Three-Month LIBOR, Four-Month, Six-Month LIBOR or One-Year LIBOR, and which include the Series 2003-1 Class A-1 Notes, the Series 2004-1 Class A-1 Notes, and any Additional Notes which are similarly indexed.

“ Monthly Allocation Date ” shall mean the 25th day of each calendar month and if such 25th day is not a Business Day, the Business Day immediately following such 25th day.

“ Monthly Expense Payment Date ” shall mean the 25th day of each calendar month and if such 25th day is not a Business Day, the Business Day immediately following such 25th day.

“ Principal Distribution Amount ” shall mean:

(c) as to the initial Distribution Date, the amount by which the initial Pool Balance exceeds the Pool Balance on that Distribution Date plus any amounts transferred from the Acquisition Fund to the Revenue Fund during the initial Collection Period, and

(d) as to each subsequent Distribution Date, the amount by which the Pool Balance for the preceding Distribution Date exceeds the Pool Balance on that Distribution Date plus the amounts transferred from the Acquisition Fund to the Revenue Fund upon the expiration of the period prescribed for the purchase of Add-On Consolidation Loans, if any.

“ Quarterly Distribution Date ” shall mean the 25th day of each January, April, July and October, beginning, with respect to the Series 2004-1 Notes, October 25, 2004; provided, however, if any such 25th day is not a Business Day, the Quarterly Distribution Date shall be the next Business Day.

“ Realized Loss ” shall mean the excess of the principal balance, including any interest that had been or had been expected to be capitalized, of any liquidated Financed Student Loan over liquidation proceeds for such Financed Student Loan to the extent allocated to principal, including any interest that had been or had been expected to be capitalized.

“ Record Date ” shall mean:

(e) for the LIBOR Notes, the day before the related Distribution Date; and

(f) for the Auction Rate Notes,

(i) for payments of interest at the applicable interest rate and for payments of principal, two Business Days before the related Distribution Date, and

(ii) for payments of Carryover Amounts and interest accrued thereon, the record date relating to the Distribution Date for which the Carryover Amount accrued.

“ Required Parity Percentage ” shall mean 101.5%; provided, however, that the Required Parity Percentage may be reduced upon receipt of a Rating Confirmation.

“ Required Senior Parity Percentage ” shall mean 105.0%; provided, however, that the Required Senior Parity Percentage may be reduced upon receipt of a Rating Confirmation.

“ Reserve Fund ” shall mean the Reserve Fund as described in the Indenture and this Supplemental Indenture.

“ Reserve Fund Requirement ” shall mean 1.0% of the aggregate principal amount of Class A Notes and Class B Notes Outstanding; provided, however, that so long as any Class A Notes or Class B Notes remain Outstanding there shall be at least $500,000 on deposit in the Reserve Fund; provided, further, that in no event shall the Reserve Fund Requirement exceed the principal amount of Notes Outstanding on any date of determination. Further, such percentages and amounts may be changed upon satisfaction of the Rating Agency Condition.

“ Revenue Fund ” shall mean the Revenue Fund as described in the Indenture and this Supplemental Indenture.

“ Series 2003-1 Class A-1 Notes ” shall mean the $200,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2003-1, Class A-1 LIBOR Rate Notes.

“ Series 2003-1 Class A-1 Principal Distribution Amount” shall mean, as of any date of Determination, the lesser of (a) the amount required to reduce the outstanding principal amount of the Series 2003-1 Class A-1 Notes to the scheduled principal amount listed on Schedule I attached hereto, or (b) the Class A Noteholders’ Principal Distribution Amount.

“ Series 2003-1 Class A-2 Notes ” shall mean the $90,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2003-1, Class A-2 Auction Rate Notes.

“ Series 2003-1 Class A-3 Notes ” shall mean the $90,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2003-1, Class A-3 Auction Rate Notes.

“ Series 2003-1 Class B-1 Notes ” shall mean the $20,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2003-1, Class B-1 Auction Rate Notes.

“ Series 2003-1 Notes ” shall mean the PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2003-1 issued pursuant to that certain First Supplemental Indenture dated December 1, 2003 consisting of the Series 2003-1 Class A-1 Notes, the Series 2003-1 Class A-2 Notes, the Series 2003-1 Class A-3 Notes and the Series 2003-1 Class B-1 Notes.

“ Series 2004-1 Class A-1 Notes ” shall mean the $200,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2004-1, Class A-1 LIBOR Rate Notes.

“ Series 2004-1 Class A-1 Principal Distribution Amount” shall mean, as of any date of Determination, the lesser of (a) the amount required to reduce the outstanding principal amount of the Series 2004-1 Class A-1 Notes to the scheduled principal amount listed on Schedule II attached hereto, or (b) the Class A Noteholders’ Principal Distribution Amount less the Series 2003-1 Class A-1 Principal Distribution Amount.

“ Series 2004-1 Class A-2 Notes ” shall mean the $90,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2004-1, Class A-2 Auction Rate Notes.

“ Series 2004-1 Class A-3 Notes ” shall mean the $90,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2004-1, Class A-3 Auction Rate Notes.

“ Series 2004-1 Class B-1 Notes ” shall mean the $20,000,000 PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2004-1, Class B-1 Auction Rate Notes.

“ Series 2004-1 Notes ” shall mean the PHEAA Student Loan Trust I, Student Loan Asset-Backed Notes, Series 2004-1 issued pursuant to this Supplemental Indenture in the aggregate principal amount of $400,000,000 consisting of the Series 2004-1 Class A-1 Notes, the Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes and the Series 2004-1 Class B-1 Notes.

“ Servicer ” shall mean Pennsylvania Higher Education Assistance Agency, and any successor Servicer permitted under the Servicing Agreement, and with respect to which a Rating Confirmation has been obtained.

“ Servicing Agreement ” shall mean the Servicing Agreement, dated as of December 1, 2003, as supplemented and amended from time to time, between the Issuer and the Servicer.

“ Targeted Principal Amount ” shall mean, with respect to any Class of LIBOR Rate Notes and a Distribution Date, the amount of principal which is scheduled to be paid to reduce the principal balance of such LIBOR Rate Notes on such Distribution Date to the principal amount set forth in the Supplemental Indenture pursuant to which such LIBOR Rate Notes were issued. The Targeted Principal Amounts with respect to the Series 2003-1 Class A-1 Notes and the Series 2004 Class A-1 Notes are attached hereto as Schedule I and Schedule II, respectively.

“ Underwriter ” shall mean, with respect to the Series 2004-1 Notes, UBS Financial Services Inc.

“ Underwriting Agreement ” shall mean, with respect to the Series 2004-1 Notes, that certain Underwriting Agreement dated July 8, 2004 by and between the Seller, the Depositor, the Administrator, acting on behalf of the Issuer, and the Underwriter.

Words importing the masculine gender include the feminine gender. Words importing persons include firms, associations and corporations. Words importing the singular number include the plural number and vice versa. Additional terms are defined in the body of this Supplemental Indenture and the Appendices hereto.

In the event that any term or provision contained herein with respect to the Series 2004-1 Notes shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplemental Indenture shall govern.

ARTICLE II

CREATION OF THE SERIES 2004-1 NOTES, SERIES 2004-1 NOTE DETAILS,
FORM OF SERIES 2004-1 NOTES, REDEMPTION OF SERIES 2004-1 NOTES
AND USE OF PROCEEDS OF SERIES 2004-1 NOTES

Section 2.01 Designation . There is hereby created a Series of Notes to be issued pursuant to the Indenture and this Supplemental Indenture and to be known as the “Series 2004-1 Student Loan Asset-Backed Notes” (the “Series 2004-1 Notes”). The Series 2004-1 Notes shall be comprised of four (4) Classes, as described in Section 2.02 hereof.

Section 2.02 Series 2004-1 Note Details .

(a) The aggregate principal amount of the Series 2004-1 Notes which may be initially authenticated and delivered under this Supplemental Indenture is limited to $400,000,000, and shall be individually issued in four (4) separate Classes consisting of

$200,000,000 of Series 2004-1 Class A-1 Notes, $90,000,000 of Series 2004-1 Class A-2 Notes, $90,000,000 of Series 2004-1 Class A-3 Notes, and $20,000,000 of Series 2004-1 Class B-1 Notes. Except for Series 2004-1 Notes authenticated and delivered upon transfer of, or in exchange for, or in lieu of Notes pursuant to Sections 2.03 and 2.04 of the Indenture, if any, Series 2004-1 Notes shall be issuable only as fully registered notes in the Authorized Denominations. Each Class of Notes issued pursuant to the Indenture shall, in each case, be designated by an alphanumeric identifier, which shall be lettered either “A” to indicate Senior Notes, “B” to indicate Subordinate Notes, or “C” to indicate Junior Subordinate Notes, which alpha-designation shall be followed by a hyphenated numeral, in sequential ascending order, beginning with one (1), for each such Class of Notes issued and designated as either Class A, Class B or Class C.

The Series 2004-1 Class A-1 Notes shall be dated their Date of Issuance and shall bear interest at an interest rate equal to the Three-Month LIBOR plus twelve-hundredths percent (0.12%); provided, however, that the interest rate for the first Accrual Period shall be determined by the Calculation Agent by reference to straight line interpolation between Three-Month LIBOR and Four-Month LIBOR based on the actual number of days in the first Accrual Period. Interest shall be payable on each Quarterly Distribution Date, except that LIBOR Rate Notes which are issued upon transfer, exchange or other replacement shall bear interest from the most recent Quarterly Distribution Date to which interest has been paid, or if no interest has been paid, from their respective Date of Issuance. The Series 2004-1 Class A-1 Notes shall mature on April 25, 2016. Interest on the LIBOR Rate Notes shall be computed on the basis of a 360-day year and actual days elapsed.

The Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes and the Series 2004-1 Class B-1 Notes shall be dated their Date of Issuance and shall bear interest from their Date of Issuance, payable on each Payment Date (as defined in Appendix A to this Supplemental Indenture), except that Auction Rate Notes which are issued upon transfer, exchange or other replacement shall bear interest from the most recent Payment Date to which interest has been paid, or if no interest has been paid, from the respective Date of Issuance of such Auction Rate Notes. The Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes and the Series 2004-1 Class B-1 Notes shall mature on April 25, 2044. Interest on the Auction Rate Notes shall be computed on the basis of actual days in the applicable year and actual days elapsed. The terms of and definitions related to the Auction Rate Notes are found in Article I hereof and Appendix A to this Supplemental Indenture.

The principal of the Series 2004-1 Notes due at their Stated Maturity or upon redemption in whole shall be payable at the Corporate Trust Office of the Indenture Trustee, or such other location as directed by the Indenture Trustee, or at the principal office of its successor in trust upon presentation and surrender of the Series 2004-1 Notes. Payment of interest and principal paid subject to a redemption of any Series 2004-1 Note shall be made to the Noteholder thereof by check or draft mailed on the Distribution Date by the Indenture Trustee to the Noteholder at his address as it last appears on the registration books kept by the Indenture Trustee at the close of business on the Record Date for such Distribution Date, but any such interest not so timely paid or duly provided for shall cease to be payable to the Noteholder thereof at the close of business on the Record Date and such defaulted interest shall be payable to the Noteholder thereof at the close of business on a special record date to be fixed by the

Indenture Trustee whenever moneys become available for payment of such defaulted interest, (each, a “Special Record Date”). Notice of any such Special Record Date shall be given to the Noteholders of the Series 2004-1 Notes entitled to any payment of defaulted interest not less than ten (10) days prior thereto by first-class mail to each such Noteholder as shown on the Indenture Trustee’s registration books on the date selected by the Indenture Trustee, stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest. Payment of interest to (i) the Securities Depository or its nominee and (ii) any other Noteholder owning at least $1,000,000 principal amount of the Series 2004-1 Notes, but only upon the written request of such Noteholder addressed to the Indenture Trustee, shall be paid by wire transfer within the United States to the bank account number filed no later than the Record Date or Special Record Date with the Indenture Trustee for such purpose. All payments on the Series 2004-1 Notes shall be made in lawful money of the United States of America.

Notwithstanding anything to the contrary set forth herein or in any Supplemental Indenture, as originally provided in the First Amendment, Additional Notes may be issued, from time to time, pursuant to Section 2.08 of the Indenture that, prior to the occurrence of an Event of Default, may be entitled to receive:

(i) principal payments and/or allocations of principal (in each case, including but not limited to principal redemptions) at a time prior to, concurrently with, or after principal payments and/or allocations of principal to any Senior Notes, any Subordinate Notes, and any Junior Subordinate Notes then Outstanding; and

(ii) payments of interest, the allocation of which shall be determined concurrently (in all material respects) with interest upon the Issuer’s other Senior Notes, Subordinate Notes, or Junior Subordinate Notes, as applicable, at any time Outstanding, but which may be paid upon different dates in accordance with the terms of such Notes;

provided, however, that nothing contained in this Section or the First Amendment shall affect the respective rights of any Outstanding Notes or Additional Notes in the Trust Estate as set forth in Section 6.02 of the Indenture, upon the occurrence of an Event of Default; and, provided further that , no Additional Notes will be issued that, absent the existence of an Event of Default, are entitled to receive principal payments and/or allocations of principal (in each case, including principal redemptions) on any Quarterly Distribution Date or Monthly Allocation Date until principal has first been paid or allocated, as applicable, to reduce the principal amount of the Series 2003-1 Class A-1 Notes or the Series 2004-1 Class A-1 Notes then Outstanding to the applicable Targeted Principal Amount for such Distribution Date, and no Additional Notes will be issued unless the Trustee first receives a Rating Confirmation from each Rating Agency then rating Outstanding Notes that the issuance of such Additional Notes will not result in a downgrade or withdrawal of its ratings on the Outstanding Notes. To the extent that any provision of this Second Supplemental Indenture or any Supplemental Indenture issued in the future conflicts with the terms of the First Amendment as it relates to the timing of payments on the Series 2003-1 Class A-1 Notes, the terms of the First Amendment shall govern.

(b) Except as otherwise provided in this Section, the Series 2004-1 Notes in the form of one global note for each Stated Maturity date of each Class shall be registered in the

name of the Securities Depository or its nominee and ownership thereof shall be maintained in book-entry form by the Securities Depository for the account of the Participants. Initially, each Class of the Series 2004-1 Notes shall be registered in the name of CEDE & CO., as the nominee of The Depository Trust Company. Except as provided in subsection (d) of this Section, the Series 2004-1 Notes may be transferred, in whole but not in part, only to the Securities Depository or a nominee of the Securities Depository or to a successor Securities Depository selected or approved by the Issuer or to a nominee of such successor Securities Depository. Each global note shall bear a legend substantially to the following effect: “Except as otherwise provided in the Indenture, this global note may be transferred, in whole but not in part, only to another nominee of the Securities Depository (as defined in the Indenture) or to a successor Securities Depository or to a nominee of a successor Securities Depository.”

(c) Except as otherwise provided herein, the Issuer and the Indenture Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Securities Depository or any Participant with respect to any beneficial ownership interest in the Series 2004-1 Notes; (ii) the delivery to any Participant, beneficial owner of the Series 2004-1 Notes or other Person, other than the Securities Depository, of any notice with respect to the Series 2004-1 Notes, or (iii) the payment to any Participant, beneficial owner of the Series 2004-1 Notes or other Person, other than the Securities Depository, of any amount with respect to the principal of or interest on the Series 2004-1 Notes. So long as the certificates for the Series 2004-1 Notes issued under this Supplemental Indenture are not issued pursuant to subsection (d) of this Section, the Issuer and the Indenture Trustee may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of the Series 2004-1 Notes for all purposes whatsoever, including, without limitation, (A) the payment of principal of and interest on such Series 2004-1 Notes, (B) giving notices of redemption and other matters with respect to such Series 2004-1 Notes and (C) registering transfers with respect to such Series 2004-1 Notes. In connection with any notice or other communication to be provided to the Noteholders pursuant to this Supplemental Indenture by the Issuer or the Indenture Trustee with respect to any consent or other action to be taken by the Noteholders, the Issuer or the Indenture Trustee, as the case may be, shall establish a record date for such consent or other action and, if the Securities Depository shall hold all of the Series 2004-1 Notes, give the Securities Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Such notice to the Securities Depository shall be given only when the Securities Depository is the sole Noteholder.

(d) If at any time the Securities Depository notifies the Issuer and the Indenture Trustee that it is unwilling or unable to continue as Securities Depository with respect to any or all of the Series 2004-1 Notes or if at any time the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act or other applicable statute or regulation and a successor Securities 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, subsections (b) and (c) of this Section shall no longer be applicable and the Issuer shall execute and the Indenture Trustee shall authenticate and deliver certificates representing the Series 2004-1 Notes as provided below. In addition, the Issuer may determine at any time that the Series 2004-1 Notes shall no longer be represented by global certificates and that the provisions of subsections (b) and (c) of this Section shall no longer apply to the Series 2004-1 Notes. In such event, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver

certificates representing the Series 2004-1 Notes as provided below. Certificates for the Series 2004-1 Notes issued in exchange for a global certificate pursuant to this subsection shall be registered in such names and authorized denominations as the Securities Depository, pursuant to instructions from the Participant or otherwise, shall instruct in writing to the Issuer and the Indenture Trustee, and upon which written instructions the Indenture Trustee may rely without investigation. The Indenture Trustee shall promptly deliver such certificates representing the Series 2004-1 Notes to the Persons in whose names such Notes are so registered.

Section 2.03 Payment of Principal, Generally; Redemption . To the extent not modified in a Supplemental Indenture executed in connection with the issuance of Additional Notes pursuant to Section 2.08 of the Indenture and Section 2.03(c) hereof,

(a) Principal shall be payable on the Class A Notes, to the extent of the Class A Noteholders’ Principal Distribution Amount as follows: (i) on the Series 2003-1 Class A-1 Notes and the Series 2004-1 Class A-1 Notes, on each Quarterly Distribution Date in an amount equal to the LIBOR Note Principal Distribution Amount, and (ii) on the Class A Auction Rate Notes, on each Auction Rate Distribution Date in an amount equal to the Class A Noteholders’ Principal Distribution Amount less the amount of the LIBOR Note Principal Distribution Amount, and any amounts allocated to the payment of the LIBOR Note Principal Distribution Amount on the next applicable Quarterly Distribution Date.

(b) Subject to subsection (d) of this Section, principal shall be payable on the Class B Auction Rate Notes on each Auction Rate Distribution Date in an amount equal to the Class B Noteholders’ Principal Distribution Amount.

(c) Subject to subsection (d) of this Section and the timing and amount of payments of principal on any Additional Notes as may be set forth in any subsequent Supplemental Indenture, in accordance with Section 4.03, on each Quarterly Distribution Date or Monthly Allocation Date, as applicable, principal on the Notes shall be paid or, in the case of Auction Rate Notes, allocated (for payment on the next Auction Rate Distribution Date), as follows:

(i) While Series 2003-1 Class A-1 Notes or Series 2004-1 Class A-1 Notes are Outstanding, to the extent of the Class A Noteholders’ Principal Distribution Amount,

(A) to the Noteholders of the Series 2003-1 Class A-1 Notes, the amount of the Targeted Principal Amount then due on the Series 2003-1 Class A-1 Notes;

(B) to the Noteholders of the Series 2004-1 Class A-1 Notes, the amount of the Targeted Principal Amount then due on the Series 2004-1 Class A-1 Notes,

(C) while other Class A Notes are Outstanding, to the extent of the Class A Noteholders’ Principal Distribution Amount remaining after payments on the Series 2003-1 Class A-1 Notes and the Series 2004-1 Class A-1 Notes above,

(1) to the Series 2003-1 Class A-2 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(2) to the Series 2003-1 Class A-3 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(3) to the Series 2004-1 Class A-2 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(4) to the Series 2004-1 Class A-3 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; and

(ii) after all Series 2003-1 Class A-1 Notes and all Series 2004-1 Class A Notes have been paid in full, and while other Class A notes are Outstanding,

(A) subject to the limitations set forth in Section 2.03(d), to the Series 2003-1 Class B-1 Noteholders until paid in full, and then to the Series 2004-1 Class B-1 Noteholders until paid in full, the Class B Noteholders’ Principal Distribution Amount; then

(1) to the extent of the Class A Noteholders’ Principal Distribution Amount remaining, to Class A Auction Rate Noteholders in the order directed by the Issuer, or in the absence of such direction,

a. to the Series 2003-1 Class A-2 noteholders until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

b. to the Series 2003-1 Class A-3 noteholders until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

c. to the Series 2004-1 Class A-2 noteholders until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

d. to the Series 2004-1 Class A-3 noteholders until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(B) after all Class A Notes have been paid in full, and while Class B notes remain Outstanding, to the extent of the Class B Noteholders’ Principal Distribution Amount,

(1) to the Series 2003-1 Class B-1 Notes until paid in full, the Class B Noteholders’ Principal Distribution Amount; and then,

(2) to the Series 2004-1 Class B-1 noteholders until paid in full, the Class B Noteholders’ Principal Distribution Amount.

However, following the occurrence of an Event of Default and the exercise by the Indenture Trustee of remedies under the Indenture, principal payments on the Class A Notes and

the Class B Notes shall be made or set aside for future distribution, pro rata, without preference or priority, as set forth in Section of 6.02 the Indenture.

Any payment of principal on an Auction Rate Note shall be made by redeeming that Auction Rate Note.

(d) If, on any Auction Rate Distribution Date occurring while Class A Auction Rate Notes remain Outstanding, (i) the Senior Parity Percentage is greater than the Required Senior Parity Percentage and (ii) the Parity Percentage is greater than the Required Parity Percentage, then, before any amount will be paid or allocated as principal on the Class A Auction Rate Notes, principal shall be paid on the Class B Notes in an amount equal to the greatest amount that can be paid as principal on the Class B Notes without reducing the Senior Parity Percentage below the Required Senior Parity Percentage or reducing the Parity Percentage below the Required Parity Percentage.

Notwithstanding the foregoing, if:

(i) on any Distribution Date, following distributions under Sections 4.03(d)(i) through (vii), or under Sections 4.03(e)(i) and (ii), to be made on that Distribution Date, without giving effect to any payments from the Acquisition Fund to the Class B Notes, the outstanding principal balance of the Class A Notes would be in excess of:

(A) the outstanding principal balance of the Financed Student Loans plus

(B) any accrued but unpaid interest on the those Financed Student Loans as of the last day of the related Collection Period plus

(C) the balance on deposit in the Reserve Fund on that Distribution Date following those distributions minus

(D) the Reserve Fund Requirement on that Distribution Date, or

(ii) an insolvency event involving the Depositor or an Event of Default affecting the Class A Notes has occurred and is continuing,

then, until the conditions described in (i) or (ii) above no longer exist, the amounts on deposit in the Revenue Fund and the Reserve Fund shall be applied on that Distribution Date to the payment of the Class A Noteholders’ Distribution Amount before any amounts shall be applied to the payment of the Class B Noteholders’ Distribution Amount.

(e) The Auction Rate Notes are subject to redemption in minimum increments of $50,000; provided, however, while any Class A Auction Rate Notes are Outstanding, the Issuer may redeem Class B Auction Rate Notes only if, as of the date of selection of Notes for redemption and after giving effect to the redemption, the Senior Parity Percentage is at least the Required Senior Parity Percentage and the Parity Percentage is at least the Required Parity Percentage. If less than all outstanding Auction Rate Notes are to be

redeemed, the particular Class to be redeemed shall be determined by the Issuer. In the absence of direction by the Issuer, the Class of Auction Rate Notes to be redeemed shall be selected first from the Class A Auction Rate Notes in ascending numerical order of the Series and Class designation (beginning with the Series 2003-1 Class A-2 Notes), and thereafter, from the Class B Auction Rate Notes in ascending numerical order of the Class designation (beginning with the Series 2003-1 Class B-1 notes). If less than all Outstanding Auction Rate Notes of a given Class designation are to be redeemed, the particular Notes to be redeemed shall be determined by lot. To the extent any portion of Principal Distribution Amount remains after the redemption of Auction Rate Notes in $50,000 increments on any Distribution Date, those amounts shall be used to redeem Auction Rate Notes on the next applicable Distribution Date on which Auction Rate Notes may be redeemed.

(f) The Indenture Trustee shall cause notice of any redemption to be given by mailing a copy of the notice by first-class mail to the Noteholder of any Notes designated for redemption in whole or in part at their address as the same shall last appear upon the registration books, and with respect to Auction Rate Notes designated for redemption, to the Auction Agent, in each case not less than 12 days prior to the redemption date; provided, however, that failure to give such notice, or any defect therein, shall not affect the validity of any proceedings for the redemption of such Notes for which no such failure or defect occurs.

Section 2.04 Delivery of Series 2004-1 Notes . Upon the execution and delivery of this Supplemental Indenture, the Issuer shall execute and deliver to the Indenture Trustee and the Indenture Trustee shall authenticate the Series 2004-1 Notes and deliver the Class A Notes and the Class B Notes to The Depository Trust Company; provided, however, prior to the delivery by the Indenture Trustee of any of the Series 2004-1 Notes, there shall have been filed with or delivered to the Indenture Trustee the following:

(a) An Issuer Order authorizing the execution and delivery of this Supplemental Indenture and the issuance of the Series 2004-1 Notes.

(b) Duly executed copies of this Supplemental Indenture and a copy of the Indenture.

(c) A resolution duly adopted by the Issuer, certified by an Authorized Officer thereof, authorizing the execution and delivery of this Supplemental Indenture and the issuance of the Series 2004-1 Notes.

(d) Rating letters from each Rating Agency confirming (i) that the Class A Notes have been rated at least “Aaa” by Moody’s and “AAA” by Fitch and S&P and (ii) that the Class B Notes have been rated at least “A2” by Moody’s and “A” by Fitch and S&P.

(e) An opinion of counsel pursuant to Section 2.08 of the Indenture.

Section 2.05 Form of Series 2004-1 Notes . The Series 2004-1 Class A-1 Notes, the Series 2004-1 Class A-2 Notes, and the Series 2004-1 Class A-3 Notes shall be in substantially the forms set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 hereto, respectively, each with such variations, omissions, and insertions as may be necessary. The Series 2004-1

Class B-1 Notes shall be in substantially the form set forth in Exhibit A-4 hereto, each with such variations, omissions, and insertions as may be necessary.

Section 2.06 Trustee’s Authentication Certificate . The Indenture Trustee’s authentication certificate upon the Series 2004-1 Notes shall be substantially in the form included in Exhibits A-1 through A-4 hereto. No Series 2004-1 Note shall be secured hereby or entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless a certificate of authentication, substantially in such form, has been duly executed by the Indenture Trustee at the written direction of the Issuer; and such certificate of the Indenture Trustee upon any Series 2004-1 Note shall be conclusive evidence and the only competent evidence that such Note has been authenticated and delivered hereunder. The Indenture Trustee’s certificate of authentication shall be deemed to have been duly executed by it if manually signed by an authorized officer of the Indenture Trustee, but it shall not be necessary that the same person sign the certificate of authentication on all of the Series 2004-1 Notes issued hereunder.

Section 2.07 Deposit of Series 2004-1 Note Proceeds . Upon the issuance and delivery of the Series 2004-1 Notes, the Indenture Trustee shall deposit the net proceeds thereof as follows:

(a) an amount equal to $394,622,000 shall be deposited to the Acquisition Fund; and

(b) an amount equal to $4,000,000 shall be deposited to the Reserve Fund;

ARTICLE III

GENERAL PROVISIONS

Section 3.01 Date of Execution . This Supplemental Indenture for convenience and for the purpose of reference is dated as of July 1, 2004.

Section 3.02 Laws Governing . It is the intent of the parties hereto that this Supplemental Indenture shall in all respects be governed by the laws of the Commonwealth of Pennsylvania without regard to principles of conflicts of law.

Section 3.03 Severability . If any provision of this Supplemental Indenture is forbidden, in whole or in part, by any pertinent law or any pertinent law is effective to render this Supplemental Indenture invalid or unenforceable or to impair the lien hereof, then each such provision or part thereof is hereby declared to be wholly ineffective, and this Supplemental Indenture shall be construed as if the same were not included herein.

Section 3.04 Exhibits and Appendices . The terms of each Exhibit and Appendix attached to this Supplemental Indenture are incorporated herein in all particulars.

ARTICLE IV

FUNDS

Section 4.01 Maintenance and Creation of Funds and Accounts . The following Funds, have been established by the Issuer pursuant to the Indenture, and such accounts shall be held by the Indenture Trustee in trust for the benefit of the Holders of the Obligations:

(a) The Acquisition Fund;

(b) The Revenue Fund; and

There is hereby created and established a Distribution Account within the Revenue Fund to be administered and maintained by the Indenture Trustee, in book form, for the benefit of the Noteholders of the Series 2004-1 Notes and the Holders of any other Obligations.

The Indenture Trustee is hereby authorized for the purpose of facilitating the administration of the Trust Estate and for the administration of any Additional Notes issued pursuant to the Indenture or any Supplemental Indenture to create additional Accounts or subaccounts in any of the various Funds and Accounts established hereunder which are deemed necessary or desirable.

Section 4.02 Acquisition Fund . With respect to the moneys deposited into the Acquisition Fund pursuant to Section 2.07 hereof from the proceeds of the sale of the Series 2004-1 Notes, after payment of the related purchase price with respect to the Financed Student Loans on the Closing Date and the related costs of issuance of the Series 2004-1 Notes, the remaining proceeds of the sale of the Series 2004-1 Notes, less $250,000, will be held in the Acquisition Fund and may be used to purchase Additional Financed Student Loans on or prior to July 31, 2004 and shall be transferred to the Revenue Fund on January 31, 2005 to the extent not used to purchase Additional Financed Student Loans. The remaining $250,000 may be used to purchase Add-on Consolidation Loans with respect to those Consolidation Loans purchased with the proceeds of the Series 2004-1 Notes on or prior to January 24, 2005.

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

No amount shall be transferred from the Acquisition Account to acquire or originate Student Loans having characteristics that are materially and adversely different from the characteristics of the Financed Student Loans shown in the most recent Cash Flows provided to the Rating Agencies, which characteristics include but are not limited to loan type, federal

benefits, applicable borrower benefit programs, and provisions and servicing of such Financed Student Loans required by the Act as amended through the date hereof, unless the Issuer first obtains a Rating Confirmation. Any such Issuer Order or Student Loan Acquisition Certificate shall state that such proposed use of moneys in the Acquisition Fund is in compliance with the provisions of this Indenture.

The Financed Student Loans shall be held by the Eligible Lender Trustee, on behalf of the Issuer, and shall be pledged to the Trust Estate and accounted for as a part of the Acquisition Fund. Student loan files and documentation relating to the Financed Student Loans shall be maintained by the Servicer as Custodian. Except as otherwise provided in the Indenture or this Supplemental Indenture, Financed Student Loans shall not be sold, transferred, or otherwise disposed of (other than for consolidation, serialization or transfer to a Guarantor) by the Indenture Trustee free from the lien of this Indenture.

The Indenture Trustee shall transfer all amounts remaining in the Acquisition Fund on January 24, 2005, after giving effect to all withdrawals from the Acquisition Fund on or prior to that date, to the Revenue Fund; provided, however, the transfer of those amounts may be delayed until a later date if the Issuer has provided to the Indenture Trustee a Rating Confirmation with respect to that delay.

On each Quarterly Distribution Date occurring while any LIBOR Rate Notes are Outstanding, and thereafter on each Monthly Allocation Date which is not a Quarterly Distribution Date, to the extent amounts on deposit in the Distribution Account and allocated to the payment of interest on the Notes, and amounts on deposit in the Revenue Fund representing interest receipts on the Financed Student Loans are insufficient to make the transfers required by clauses (i) and (ii) of each of Sections 4.03(d) and 4.03(e), or if on the Stated Maturity of any Class of Notes, amounts on deposit in the Distribution Account and allocated to the payment of principal on that Class of Notes and amounts on deposit in the Revenue Fund are insufficient to make the required principal distributions to the Noteholders of that Class of Notes, the amount of such deficiency shall be paid from the Acquisition Fund to the extent of moneys therein before applying to that payment any amounts on deposit in the Reserve Fund pursuant to Section 4.06(a).

Amounts on deposit in the Acquisition Fund may be used to pay principal on a Note only on its Stated Maturity.

No Additional Financed Student Loan shall be acquired if, after the Date of Issuance, Congress has, in the judgment of the Issuer, materially adversely changed any of the following characteristics of Student Loans: (i) the Special Allowance Payments, (ii) the loan interest yield formula, (iii) the guaranty obligation of the Guaranty Agency, (iv) the federal interest subsidies, or (v) federal reinsurance of Student Loans, or makes any other economic change in such loans, that, in each instance, would have a materially adverse effect on the return to the holder of such loans. The Trustee shall be entitled to rely upon the certification of an Authorized Officer of the Issuer as to the compliance with the provisions of this paragraph in connection with the origination and acquisition of Student Loans.

Section 4.03 Revenue Fund .

(a) The Indenture Trustee shall deposit into the Revenue Fund all Revenues and all moneys transferred from the Acquisition Fund, and, in accordance with Section 4.06(d), from the Reserve Fund, as provided herein, and any other amounts to be deposited therein pursuant to and upon receipt of an Issuer Order.

(b) On or prior to the 25th day of each month, the Indenture Trustee shall make the following allocations in the following priority using funds on deposit in the Revenue Fund (all references to pro rata allocation of funds described in this Section 4.03(b) shall be based upon the amount of such fees expected to be payable with respect to each such payee to the total amount of fees for all payees granted such priority):

(i) to the Distribution Account for the Secretary, an amount equal to the monthly rebate fee expected to be payable to the Secretary from the 25th day of the current calendar month to the 24th day of the subsequent calendar month plus previously accrued and unpaid or set aside amounts;

(ii) to the Distribution Account for the Servicer, an amount equal to its fees expected to be payable from the first day of the prior calendar month to the last day of the prior calendar month plus previously accrued and unpaid or set aside amounts;

(iii) to the Distribution Account for the Indenture Trustee, the Eligible Lender Trustee, and the Owner Trustee, pro rata, an amount equal to their fees expected to be payable from the 25th day of the current calendar month to the 24th day of the subsequent calendar month plus previously accrued and unpaid or set aside amounts;

(iv) to the Distribution Account, pro rata, for the Auction Agent, the Broker-Dealers, the Calculation Agent and the Market Agent, an amount equal to their fees expected to be payable from the 25th day of the current calendar month to the 24th day of the subsequent calendar month plus previously accrued and unpaid or set aside amounts;

(v) to the Distribution Account for the Administrator, an amount equal to its fees expected to be payable from the first day of the prior calendar month to the last day of the prior calendar month plus previously accrued and unpaid or set aside amounts;

(vi) to the Distribution Account, pro rata, for each Class of Class A Notes an amount equal to the sum of (a) the interest expected to accrue on such Class of Class A Notes from the 25th day of the current calendar month to the 24th day of the subsequent calendar month plus previously accrued and unpaid or set aside amounts, and (b) the amount expected to be payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under Derivative Products, the payments of which are secured on a parity with the Class A Notes; and

(vii) to the Distribution Account for the Class B Notes an amount equal to the sum of (a) the interest expected to accrue on the Class B Notes from the 25th day of the current calendar month to the 24th day of the subsequent calendar month plus previously accrued and unpaid or set aside amounts, and (b) the amount expected to be payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under Derivative Products, the payments of which are secured on a parity with the Class B Notes.

(c) On each Monthly Expense Payment Date, the Indenture Trustee shall pay the following fees from amounts on deposit in the Distribution Account and allocated to the payment of those fees, and to the extent of any insufficiency, from amounts on deposit in the Revenue Fund: (i) the monthly rebate fee payable to the Secretary, (ii) the fees of the Servicer, (iii) pro rata, the fees of the Indenture Trustee, the Eligible Lender Trustee, and the Owner Trustee, and (iv) pro rata, the fees of the Auction Agent, the Broker-Dealers, Market Agent and the Calculation Agent, and (v) the Administration Fee; provided, however, If (a) the default rate on the Financed Student Loans owned by the Issuer is equal to or greater than 16% during the period from December 10, 2003 through December 9, 2004, (b) the average daily yield to maturity (expressed as an annual percentage) on 91-day United States Treasury Bills during any calendar quarter during which such calendar month falls is equal to or greater than 9%, (c) if at any time during the preceding Collection Period, (i) there was a Net Loan Rate Restriction Period or portion thereof in effect, or (ii) any Auction Rate Notes accrued interest at the Maximum Loan Rate, (d) on the Quarterly Distribution Date occurring immediately prior to the last day of such calendar month with respect to the Series 2003-1 Class A-1 Notes or the Series 2004-1 Class A-1 Notes was less than the Targeted Principal Amount then due, or (e) an Event of Default has occurred and is continuing, then, subject to the other provisions of the Indenture with respect to application of moneys, only one-fifth of the Administration Fee shall be paid in the normal order of priority, and the remaining balance of the Administration Fee shall be subordinated and paid after the payment of any amount payable under Section 4.03(c)(xii) of the Second Supplemental Indenture.

(d) On each Quarterly Distribution Date occurring on or before the date on which no LIBOR Rate Notes remain Outstanding, and on each Monthly Allocation Date occurring after all the LIBOR Rate Notes are paid in full, the Indenture Trustee shall make the distributions and transfers set forth in clauses (i) through (xiv) below, and in the case of a Quarterly Distribution Date or Monthly Allocation Date that is not an Auction Rate Distribution Date for all Auction Rate Notes, allocations to the Distribution Account with respect to those Auction Rate Notes (for principal and Carryover Amounts), in the amounts and in the order of priority shown in clauses (i) through (xiii) below, except as otherwise provided in Section 2.03(d). These distributions and transfers shall be made from amounts on deposit in the following funds and accounts in the following order: first , from amounts on deposit in the Distribution Account and allocated to the related payment set forth below, second , from, and to the extent of, the Available Funds in the Revenue Fund on that Distribution Date after payment of the fees set forth in 4.03(c); third , from amounts transferred from the Acquisition Fund pursuant to Section 4.02 with respect to clauses (i) and (ii) below on that Distribution Date and with respect to the payment of principal on the Class A Notes and Class B Notes at their Stated Maturities; and fourth , from amounts transferred from the Reserve Fund with respect to

clauses (i) and (ii) below on that Distribution Date and with respect to the payment of principal on the Class A Notes and Class B Notes at their Stated Maturities.

(i) Pro rata, based on the aggregate principal balance of the Class A Notes entitled to distributions on such date and on the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under Derivative Products, the payments of which are secured on a parity with those Class A Notes, if any:

(A) to the Class A Noteholders, the Class A Noteholders’ Interest Distribution Amount, pro rata, based on the amounts payable upon each such Class of Class A Notes as Class A Noteholders’ Interest Distribution Amount, and

(B) to the Counterparties under Derivative Products, the payments of which are secured on a parity with the Class A Notes, the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under each Derivative Product, pro rata, based on the amounts payable by the Issuer under each Derivative Product;

(ii) pro rata, based on the aggregate principal balance of the Class B Notes entitled to distributions on this date and the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under Derivative Products, the payments of which are secured on a parity with those Class B Notes:

(A) to the Class B Noteholders, the Class B Noteholders’ Interest Distribution Amount, pro rata, based on the amounts payable as Class B Noteholders’ Interest Distribution Amount, and

(B) to the Counterparties under Derivative Products, the payments of which are secured on a parity with the Class B Notes, the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under each Derivative Product, pro rata, based on the amounts payable by the Issuer under each Derivative Product;

(iii) to the holders of the Series 2003-1 Class A-1 Notes, to the extent of the Class A Principal Distribution Amount, the Targeted Principal Amount then due with respect to such Series 2003-1 Class A-1 Notes;

(iv) to the holders of the Series 2004-1 Class A-1 Notes, to the extent of the Class A Noteholders’ Principal Distribution Amount remaining after payment to the holders of the Series 2003-1 Class A-1 Noteholders, the Targeted Principal Amount then due with respect to such Series 2004-1 Class A-1 Notes;

(A) While Series 2003-1 Class A-1 Notes or Series 2004-1 Class A-1 Notes are Outstanding, and while other Class A Notes are Outstanding, to the extent of the Class A Noteholders’ Principal Distribution Amount

remaining after payments to the holders of the Series 2003-1 Class A-1 Notes and the holders of the Series 2004-1 Class A-1 Notes above,

(1) to the Series 2003-1 Class A-2 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(2) to the Series 2003-1 Class A-3 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(3) to the Series 2004-1 Class A-2 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(4) to the Series 2004-1 Class A-3 noteholders, until paid in full, the Class A Noteholders’ Principal Distribution Amount; and

(B) after all Series 2003-1 Class A-1 Notes and Series 2004-1 Class A-1 Notes have been paid in full, and other Class A Notes are outstanding,

(1) subject to the limitations set forth in Section 2.03(d), to the Series 2003-1 Class B-1 Noteholders until paid in full, and then to the Series 2004-1 Class B-1 Noteholders until paid in full, the Class B Noteholders’ Principal Distribution Amount; and then

(2) to the extent of the Class A Noteholders’ Principal Distribution Amount then remaining, to the holders of Class A Auction Rate Notes in the order directed by the Issuer, or in the absence of such direction,

a. to the holders of the Series 2003-1 Class A-2 Notes until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

b. to the holders of the Series 2003-1 Class A-3 Notes until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

c. to the holders of the Series 2004-1 Class A-2 Notes until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

d. to the holders of the Series 2004-1 Class A-3 Notes until paid in full, the Class A Noteholders’ Principal Distribution Amount; then,

(C) after all Class A Notes have been paid in full, and while Class B Notes remain outstanding, to the extent of the Class B Noteholders’ Principal Distribution Amount, to pay principal

(1) to the holders of the Series 2003-1 Class B-1 Notes until paid in full; and then,

(2) to the holders of the Series 2004-1 Class B-1 Notes until paid in full.

(v) to the Reserve Fund, the amount, if any, necessary to reinstate the balance of the Reserve Fund to the Reserve Fund Requirement;

(vi) if the Parity Percentage is not equal to at least the Required Parity Percentage or the Senior Parity Percentage is not equal to at least the Required Senior Parity Percentage, to the Distribution Account to pay principal on the Class A Notes on their next respective Distribution Dates, in the order and priority described in Section 2.03(c), the least amount required to increase the Parity Percentage to at least the Required Parity Percentage and the Senior Parity Percentage to at least the Required Senior Parity Percentage, with those percentages computed assuming that immediately prior to the computation, the required payments of principal were actually made on the Class A Notes;

(vii) if the Parity Percentage is not equal to at least the Required Parity Percentage, to the Distribution Account to pay principal on the Class B Notes on their next Distribution Date, the least amount required to increase the Parity Percentage to at least the Required Parity Percentage, with that percentage computed assuming that immediately prior to the computation, the required payments of principal were actually made on the Class B Notes;

(viii) to the Distribution Account to be paid on the next respective Distribution Dates for the Class A Auction Rate Notes, pro rata, any Class A Carryover Amounts;

(ix) to the Distribution Account to be paid on the next respective Distribution Dates for the Class B Auction Rate Notes, any Class B Carryover Amounts;

(x) pro rata, based on the amount of any Other Issuer Termination Payments due pursuant to this clause, to the Counterparties under each Derivative Product, the payments of which are secured on a parity with the Class A Notes, the amount of any Other Issuer Termination Payments due and payable;

(xi) pro rata, based on the amount of any Other Issuer Termination Payments due pursuant to this clause, to the Counterparties under each Derivative Product, the payments of which are secured on a parity with the Class B Notes, the amount of any Other Issuer Termination Payments due and payable;

(xii) to the Administrator, the amount of the Administration Fee subordinated in accordance with Section 4.03(c), if any; and

(xiii) to the Depositor, any remaining amounts after application of the preceding clauses if, after giving effect to the transfer of any amounts to the Depositor, the Parity Percentage is equal to at least the Required Parity Percentage and the Senior Parity Percentage is equal to at least the Required Senior Parity Percentage.

On each Quarterly Distribution Date that is not an Auction Rate Distribution Date, payments of principal and Carryover Amounts to the Auction Rate Notes shall be deposited into the Distribution Account for future payment on such Auction Rate Notes.

(e) On each Auction Rate Distribution Date that is not a Quarterly Distribution Date or Monthly Allocation Date, the Indenture Trustee shall make the following distributions:

(i) first, from amounts deposited in the Distribution Account that were allocated to the Class A Auction Rate Notes with a Distribution Date on this Auction Rate Distribution Date and to Counterparties under Derivative Products secured on a parity with those Class A Auction Rate Notes, and then from amounts on deposit in the Revenue Fund, pro rata, based on the aggregate principal balance of those Class A Auction Rate Notes and the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under each Derivative Product, the payments of which are secured on a parity with those Class A Auction Rate Notes:

(A) to the Noteholders of those Class A Auction Rate Notes, to the extent of the Class A Noteholders’ Interest Distribution Amount, pro rata, based on the amounts then payable as interest on each such Class of Class A Auction Rate Notes, and

(B) to the Counterparties under Derivative Products, the payments of which are secured on a parity with those Class A Auction Rate Notes, the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under each Derivative Product, pro rata, based on the amounts payable by the Issuer under each Derivative Product; and

(ii) second, from amounts deposited in the Distribution Account that were allocated to the Class B Auction Rate Notes with a Distribution Date on this Auction Rate Distribution Date and to Counterparties under Derivative Products, the payments of which are secured on a parity with those Class B Auction Rate Notes, and then from amounts on deposit in the Revenue Fund, pro rata, based on the aggregate principal balance of those Class B Auction Rate Notes and the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer Termination Payments under each Derivative Product, the payments of which are secured on a parity with those Class B Auction Rate Notes:

(A) to the Noteholders of those Class B Auction Rate Notes, the Class B Noteholders’ Interest Distribution Amount, pro rata, based on the amounts then payable as interest on each such Class of Class B Auction Rate Notes, and

(B) to the Counterparties under Derivative Products, the payments of which are secured on a parity with those Class B Auction Rate Notes, the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer

Termination Payments under each Derivative Product, pro rata, based on the amounts payable by the Issuer under each Derivative Product.

Amounts on deposit in the Distribution Account with respect to principal and Carryover Amounts allocated to the Auction Rate Notes will be paid on the Auction Rate Notes on their Auction Rate Distribution Dates. All payments in respect of principal on the Auction Rate Notes shall be made in the form of redemptions.

Notwithstanding the foregoing, at any time after the LIBOR Rate Notes have been paid in full, the Servicer may, at its option, purchase all of the Financed Student Loans owned by the Trust on the Distribution Date following any date on which the total principal balance of all the Financed Student Loans then outstanding is less than ten percent (10%) of the highest principal balance of all student loans outstanding at the end of any calendar month during the term of the Indenture provided that (i) such ten percent (10%) condition is true on such Distribution Date, (ii) the purchase price, which shall be equal to the fair market value of such Financed Student Loans together with accrued interest, is sufficient to pay the outstanding amount due on all the Notes then Outstanding, and (iii) no applicable Event of Default shall have occurred and be continuing with respect to the Servicer on such Distribution Date. The proceeds of the purchase of the Financed Student Loans from the Trust will be used to redeem Notes.

(f) Notwithstanding anything to the contrary in subsections (d) and (e) above, upon the occurrence of an Event of Default payments on any Distribution Date shall be made in accordance with the provisions of Section 6.02 of the Indenture.

Section 4.04 Distribution Account .

The Indenture Trustee shall deposit into the Distribution Account all amounts required to be deposited therein pursuant to Section 4.03(b). The Indenture Trustee shall use amounts on deposit in the Distribution Account to make the distributions pursuant to Sections 4.03(c), (d) and (e).

Section 4.05 Transfers to Depositor . Transfers from the Revenue Fund to the Depositor may be made in accordance with this Supplemental Indenture; provided, however, that no transfer of assets to the Depositor shall be made if there is not on deposit in the Reserve Fund an amount equal to at least the Reserve Fund Requirement; and further provided, that no transfer shall be made to the Depositor unless immediately after taking into account any such transfer, . The Parity Percentage is at least equal to the Required Parity Percentage and the Senior Parity Percentage is at least equal to the Required Senior Parity Percentage.

The amounts so transferred to the Depositor shall be free of the lien of this Indenture and all investment earnings thereon after the date of such transfer shall be the property of the Depositor.

Section 4.06 Reserve Fund .

(a) On each Quarterly Distribution Date occurring while any LIBOR Rate Notes are Outstanding, and thereafter on each Monthly Allocation Date, to the extent there are insufficient moneys in the Distribution Account or Revenue Fund to make the transfers required

by clauses (i) and (ii) of each of Sections 4.03(d) and 4.03(e), and after the transfer of amounts from the Acquisition Fund, the amount of such deficiency shall be paid directly from the Reserve Fund.

(b) Money in the Reserve Fund may be used to pay principal on a Note only on its Stated Maturity.

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

(d) On any Distribution Date that the amount in the Reserve Account exceeds the Reserve Account Requirement, the Indenture Trustee shall transfer the excess to the Revenue Fund.

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

If at any time the balance in the Reserve Fund, together with other available funds of the Issuer on deposit with the Indenture Trustee, shall be sufficient to retire all Notes Outstanding, the Issuer shall direct the Indenture Trustee to apply that balance to retire all Notes Outstanding in accordance with their terms.

ARTICLE V

LIMITATION ON COUNTERPARTY RIGHTS

Notwithstanding any provisions of the Indenture or this Supplemental Indenture, no Counterparty under a Derivative Product shall have any rights to security under the Indenture or the Supplemental Indenture other than as a beneficiary of the lien granted to the Indenture Trustee under the Indenture for the benefit of the Noteholders and any Counterparty, except that Scheduled Issuer Derivative Payments, Specified Issuer Termination Payments and Other Issuer Termination Payments may be paid in the priority and secured as provided in Section 4.03 of this Supplemental Indenture and as provided in Section 6.02 of the Indenture.

ARTICLE VI

APPLICABILITY OF INDENTURE

The provisions of the Indenture are hereby ratified, approved and confirmed, except as otherwise expressly modified by this Supplemental Indenture. The representations, warranties and covenants contained in the Indenture (except as expressly modified herein) are

hereby reaffirmed with the same force and effect as if fully set forth herein and made again as of the date hereof.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Issuer has caused this Supplemental Indenture to be executed in its name and on its behalf by the Owner Trustee and the Indenture Trustee, to evidence its acceptance of the trusts hereby created, has caused this Supplemental Indenture to be executed in its name and behalf, all in multiple counterparts, each of which shall be deemed an original, and the Issuer and the Indenture Trustee have caused this Supplemental Indenture to be dated as of the date herein above first shown, although actually executed on the dates shown in the acknowledgments hereafter appearing.

PHEAA STUDENT LOAN TRUST I,

as Issuer, by WACHOVIA BANK OF
DELAWARE, National Association, not in its
individual capacity, but solely as Owner Trustee on
behalf of the Issuer

By:

Name:

Title:

MANUFACTURERS AND TRADERS TRUST
COMPANY, not in its individual capacity but
solely as Indenture Trustee and Eligible Lender
Trustee

By:

Name:

Title:

Acknowledged this th day of , 2004

PENNSYLVANIA HIGHER EDUCATION
ASSISTANCE AGENCY, as Servicer

By:

Name:

Title:

APPENDIX A

CERTAIN TERMS AND PROVISIONS OF
THE AUCTION RATE NOTES

ARTICLE I

DEFINITIONS

Except as provided below in this Section, all terms which are defined in Appendix A of the Indenture and Article I of this Supplemental Indenture shall have the same meanings, respectively, in this Appendix A as such terms are given in the Indenture and Article I of this Supplemental Indenture. In addition, the following terms shall have the following respective meanings:

“ All Hold Rate ” shall mean the Applicable LIBOR Rate less 0.20%; provided, that in no event shall the applicable All Hold Rate be greater than the applicable Maximum Rate.

“ Applicable LIBOR Rate ” means, (a) for Auction Periods of 35 days or less, One-Month LIBOR, (b) for Auction Periods of more than 35 days but less than 91 days, Three-Month LIBOR, (c) for Auction Periods of more than 90 days but less than 181 days, Six-Month LIBOR, and (d) for Auction Periods of more than 180 days, One-Year LIBOR.

“ Auction ” shall mean the implementation of the Auction Procedures on an Auction Date.

“ Auction Agent ” shall mean the Initial Auction Agent under the Initial Auction Agent Agreement unless and until a Substitute Auction Agent Agreement becomes effective, after which “Auction Agent” shall mean the Substitute Auction Agent.

“ Auction Agent Agreement ” shall mean the Initial Auction Agent Agreement unless and until a Substitute Auction Agent Agreement is entered into, after which “Auction Agent Agreement” shall mean such Substitute Auction Agent Agreement.

“ Auction Agent Fee ” has the meaning set forth in the Auction Agent Agreement.

“ Auction Date ” shall mean, with respect to any Class of Auction Rate Notes, the Business Day immediately preceding the first day of each Auction Period for each respective Class, other than:

(a) with respect to the Initial Period for such Class;

(b) each Auction Period commencing after the ownership of the applicable Auction Rate Notes is no longer maintained in Book-entry Form by the Securities Depository;

A-1

(d) each Auction Period commencing less than two 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 2.02(h) of this Appendix A .

“ Auction Note Interest Rate ” shall mean each variable rate of interest per annum borne by Auction Rate Notes for each Auction Period and determined in accordance with the provisions of Sections 2.01 and 2.02 of this Appendix A ; provided, however, that in the event of a Payment Default, the Auction Note Interest Rate shall equal the applicable Non-Payment Rate; provided further, however, that such Auction Note Interest Rate shall in no event exceed the lesser of the Maximum Rate, and during the occurrence of a Net Loan Rate Restriction Period, the Net Loan Rate.

“ Auction Period ” shall mean the Interest Period applicable to each Class of the Auction Rate Notes during which time the Auction Note Interest Rate for such Class is determined pursuant to Section 2.02(a) of this Appendix A , which Auction Period (after the Initial Period for such Class) shall begin on an Interest Rate Adjustment Date and initially shall consist generally of 28 days for the Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes and the Series 2004-1 Class B-1 Notes, as the same may be adjusted pursuant to Section 2.02(g) of this Appendix A .

“ Auction Period Adjustment ” shall mean an adjustment to the Auction Period as provided in Section 2.02(g) of this Appendix A .

“ Auction Procedures ” shall mean the procedures set forth in Section 2.02(a) of this Appendix A by which the Auction Rate is determined.

“ Auction Rate ” shall mean the rate of interest per annum that results from implementation of the Auction Procedures and is determined as described in Section 2.02(a)(iii)(B) of this Appendix A .

“ Auction Rate Notes ” shall mean, collectively, the Series 2004-1 Class A-2 Notes, the Series 2004-1 Class A-3 Notes and the Series 2004-1 Class B-1 Notes.

“ Authorized Denominations ” shall mean $50,000 and any integral multiple thereof.

“ Available Auction Rate Notes ” has the meaning set forth in Section 2.02(a)(iii)(A)(1) of this Appendix A .

“ Bid ” has the meaning set forth in Section 2.02(a)(i)(A) of this Appendix A .

“ Bid Auction Rate ” has the meaning set forth in Section 2.02(a)(iii)(A) of this Appendix A .

“ Bidder ” has the meaning set forth in Section 2.02(a)(i)(A) of this Appendix A .

A-2

“ Book-Entry Form ” or “ Book-Entry System ” shall mean a form or system under which (a) the beneficial right to principal and interest may be transferred only through a book entry, (b) physical securities in registered form are issued only to a Securities Depository or its nominee as Noteholder, with the securities “immobilized” to the custody of the Securities Depository, and (c) the book entry is the record that identifies the owners of beneficial interests in that principal and interest.

“ Broker-Dealer ” shall mean UBS Financial Services Inc. or any other broker or dealer (each as defined in the Securities Exchange Act of 1934, as amended), 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 been appointed as such by the Issuer pursuant to Section 2.02(f) of this Appendix A , and (c) has entered into a Broker-Dealer Agreement that is in effect on the date of reference.

“ Broker-Dealer Agreement ” shall m

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates

SECOND SUPPLEMENTAL INDENTURE OF TRUST

Indenture Agreement

PHEAA STUDENT LOAN TRUST

(i) any collections in respect of principal on the Financed Student Loans applied by the Issuer to repurchase Guaranteed Student Loans from the Guarantors under the Guarantee Agreements, and

(i) for payments of interest at the applicable interest rate and for payments of principal, two Business Days before the related Distribution Date, and

(ii) for payments of Carryover Amounts and interest accrued thereon, the record date relating to the Distribution Date for which the Carryover Amount accrued.

Section 2.02 Series 2004-1 Note Details .

Section 2.03 Payment of Principal, Generally; Redemption . To the extent not modified in a Supplemental Indenture executed in connection with the issuance of Additional Notes pursuant to Section 2.08 of the Indenture and Section 2.03(c) hereof,

(i) While Series 2003-1 Class A-1 Notes or Series 2004-1 Class A-1 Notes are Outstanding, to the extent of the Class A Noteholders’ Principal Distribution Amount,

(A) to the Noteholders of the Series 2003-1 Class A-1 Notes, the amount of the Targeted Principal Amount then due on the Series 2003-1 Class A-1 Notes;

(B) to the Noteholders of the Series 2004-1 Class A-1 Notes, the amount of the Targeted Principal Amount then due on the Series 2004-1 Class A-1 Notes,

(C) while other Class A Notes are Outstanding, to the extent of the Class A Noteholders’ Principal Distribution Amount remaining after payments on the Series 2003-1 Class A-1 Notes and the Series 2004-1 Class A-1 Notes above,

(ii) after all Series 2003-1 Class A-1 Notes and all Series 2004-1 Class A Notes have been paid in full, and while other Class A notes are Outstanding,

(A) subject to the limitations set forth in Section 2.03(d), to the Series 2003-1 Class B-1 Noteholders until paid in full, and then to the Series 2004-1 Class B-1 Noteholders until paid in full, the Class B Noteholders’ Principal Distribution Amount; then

(B) after all Class A Notes have been paid in full, and while Class B notes remain Outstanding, to the extent of the Class B Noteholders’ Principal Distribution Amount,

(A) the outstanding principal balance of the Financed Student Loans plus

(B) any accrued but unpaid interest on the those Financed Student Loans as of the last day of the related Collection Period plus

(C) the balance on deposit in the Reserve Fund on that Distribution Date following those distributions minus

(D) the Reserve Fund Requirement on that Distribution Date, or

(ii) an insolvency event involving the Depositor or an Event of Default affecting the Class A Notes has occurred and is continuing,

Class B-1 Notes shall be in substantially the form set forth in Exhibit A-4 hereto, each with such variations, omissions, and insertions as may be necessary.

Section 2.07 Deposit of Series 2004-1 Note Proceeds . Upon the issuance and delivery of the Series 2004-1 Notes, the Indenture Trustee shall deposit the net proceeds thereof as follows:

ARTICLE III

GENERAL PROVISIONS

Section 4.01 Maintenance and Creation of Funds and Accounts . The following Funds, have been established by the Issuer pursuant to the Indenture, and such accounts shall be held by the Indenture Trustee in trust for the benefit of the Holders of the Obligations:

Section 4.03 Revenue Fund .

(i) to the Distribution Account for the Secretary, an amount equal to the monthly rebate fee expected to be payable to the Secretary from the 25th day of the current calendar month to the 24th day of the subsequent calendar month plus previously accrued and unpaid or set aside amounts;

(ii) to the Distribution Account for the Servicer, an amount equal to its fees expected to be payable from the first day of the prior calendar month to the last day of the prior calendar month plus previously accrued and unpaid or set aside amounts;

(v) to the Distribution Account for the Administrator, an amount equal to its fees expected to be payable from the first day of the prior calendar month to the last day of the prior calendar month plus previously accrued and unpaid or set aside amounts;

clauses (i) and (ii) below on that Distribution Date and with respect to the payment of principal on the Class A Notes and Class B Notes at their Stated Maturities.

(A) to the Class A Noteholders, the Class A Noteholders’ Interest Distribution Amount, pro rata, based on the amounts payable upon each such Class of Class A Notes as Class A Noteholders’ Interest Distribution Amount, and

(A) to the Class B Noteholders, the Class B Noteholders’ Interest Distribution Amount, pro rata, based on the amounts payable as Class B Noteholders’ Interest Distribution Amount, and

(iii) to the holders of the Series 2003-1 Class A-1 Notes, to the extent of the Class A Principal Distribution Amount, the Targeted Principal Amount then due with respect to such Series 2003-1 Class A-1 Notes;

(A) While Series 2003-1 Class A-1 Notes or Series 2004-1 Class A-1 Notes are Outstanding, and while other Class A Notes are Outstanding, to the extent of the Class A Noteholders’ Principal Distribution Amount

remaining after payments to the holders of the Series 2003-1 Class A-1 Notes and the holders of the Series 2004-1 Class A-1 Notes above,

(B) after all Series 2003-1 Class A-1 Notes and Series 2004-1 Class A-1 Notes have been paid in full, and other Class A Notes are outstanding,

(C) after all Class A Notes have been paid in full, and while Class B Notes remain outstanding, to the extent of the Class B Noteholders’ Principal Distribution Amount, to pay principal

(v) to the Reserve Fund, the amount, if any, necessary to reinstate the balance of the Reserve Fund to the Reserve Fund Requirement;

(viii) to the Distribution Account to be paid on the next respective Distribution Dates for the Class A Auction Rate Notes, pro rata, any Class A Carryover Amounts;

(ix) to the Distribution Account to be paid on the next respective Distribution Dates for the Class B Auction Rate Notes, any Class B Carryover Amounts;

(x) pro rata, based on the amount of any Other Issuer Termination Payments due pursuant to this clause, to the Counterparties under each Derivative Product, the payments of which are secured on a parity with the Class A Notes, the amount of any Other Issuer Termination Payments due and payable;

(xi) pro rata, based on the amount of any Other Issuer Termination Payments due pursuant to this clause, to the Counterparties under each Derivative Product, the payments of which are secured on a parity with the Class B Notes, the amount of any Other Issuer Termination Payments due and payable;

(xii) to the Administrator, the amount of the Administration Fee subordinated in accordance with Section 4.03(c), if any; and

(A) to the Noteholders of those Class A Auction Rate Notes, to the extent of the Class A Noteholders’ Interest Distribution Amount, pro rata, based on the amounts then payable as interest on each such Class of Class A Auction Rate Notes, and

(A) to the Noteholders of those Class B Auction Rate Notes, the Class B Noteholders’ Interest Distribution Amount, pro rata, based on the amounts then payable as interest on each such Class of Class B Auction Rate Notes, and

(B) to the Counterparties under Derivative Products, the payments of which are secured on a parity with those Class B Auction Rate Notes, the amount payable as Scheduled Issuer Derivative Payments and Specified Issuer

Termination Payments under each Derivative Product, pro rata, based on the amounts payable by the Issuer under each Derivative Product.

Section 4.04 Distribution Account .

Section 4.06 Reserve Fund .

by clauses (i) and (ii) of each of Sections 4.03(d) and 4.03(e), and after the transfer of amounts from the Acquisition Fund, the amount of such deficiency shall be paid directly from the Reserve Fund.

APPENDIX A

CERTAIN TERMS AND PROVISIONS OF THE AUCTION RATE NOTES

AGREEMENTS / CONTRACTS

CLAUSES

CERTAIN TERMS AND PROVISIONS OF
THE AUCTION RATE NOTES